Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Entity Registrant Name | OPEN TEXT CORP | |
Entity Central Index Key | 1,002,638 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | otex | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 268,514,817 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 787,919 | $ 682,942 |
Accounts receivable trade, net of allowance for doubtful accounts of $12,970 as of September 30, 2018 and $9,741 as of June 30, 2018 (note 4) | 416,346 | 487,956 |
Contract assets (note 3) | 8,767 | 0 |
Income taxes recoverable (note 14) | 31,450 | 55,623 |
Prepaid expenses and other current assets | 80,624 | 101,059 |
Total current assets | 1,325,106 | 1,327,580 |
Property and equipment (note 5) | 246,500 | 264,205 |
Long-term contract assets (note 3) | 12,041 | 0 |
Goodwill (note 6) | 3,578,641 | 3,580,129 |
Acquired intangible assets (note 7) | 1,203,284 | 1,296,637 |
Deferred tax assets (note 14) | 1,106,377 | 1,122,729 |
Other assets (note 8) | 116,536 | 111,267 |
Deferred charges | 0 | 38,000 |
Long-term income taxes recoverable (note 14) | 30,563 | 24,482 |
Total assets | 7,619,048 | 7,765,029 |
Current liabilities: | ||
Accounts payable and accrued liabilities (note 9) | 252,079 | 302,154 |
Current portion of long-term debt (note 10) | 10,000 | 10,000 |
Deferred revenues | 582,139 | 644,211 |
Income taxes payable (note 14) | 31,055 | 38,234 |
Total current liabilities | 875,273 | 994,599 |
Long-term liabilities: | ||
Accrued liabilities (note 9) | 51,168 | 52,827 |
Deferred credits | 0 | 2,727 |
Pension liability (note 11) | 64,730 | 65,719 |
Long-term debt (note 10) | 2,609,127 | 2,610,523 |
Deferred revenues | 43,585 | 69,197 |
Long-term income taxes payable (note 14) | 173,807 | 172,241 |
Deferred tax liabilities (note 14) | 74,328 | 79,938 |
Total long-term liabilities | 3,016,745 | 3,053,172 |
Shareholders’ equity: | ||
Share capital and additional paid-in capital (note 12) 268,331,579 and 267,651,084 Common Shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively; authorized Common Shares: unlimited | 1,730,933 | 1,707,073 |
Accumulated other comprehensive income | 32,256 | 33,645 |
Retained earnings | 1,993,099 | 1,994,235 |
Treasury stock, at cost (991,368 shares at September 30, 2018 and 690,336 shares at June 30, 2018, respectively) | (30,381) | (18,732) |
Total OpenText shareholders' equity | 3,725,907 | 3,716,221 |
Non-controlling interests | 1,123 | 1,037 |
Total shareholders’ equity | 3,727,030 | 3,717,258 |
Total liabilities and shareholders’ equity | $ 7,619,048 | $ 7,765,029 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable trade, allowance for doubtful accounts | $ 12,970 | $ 9,741 |
Common shares issued (in shares) | 268,331,579 | 267,651,084 |
Common shares outstanding (in shares) | 268,331,579 | 267,651,084 |
Treasury stock (in shares) | 991,368 | 690,336 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||
Total revenues | $ 667,157 | $ 640,687 |
Cost of revenues: | ||
Amortization of acquired technology-based intangible assets (note 7) | 47,477 | 43,960 |
Total cost of revenues | 226,313 | 223,252 |
Gross profit | 440,844 | 417,435 |
Operating expenses: | ||
Research and development | 77,470 | 77,574 |
Sales and marketing | 120,182 | 122,615 |
General and administrative | 50,924 | 48,902 |
Depreciation | 23,854 | 18,878 |
Amortization of acquired customer-based intangible assets (note 7) | 45,876 | 43,789 |
Special charges (recoveries) (note 17) | 23,311 | 18,031 |
Total operating expenses | 341,617 | 329,789 |
Income from operations | 99,227 | 87,646 |
Other income (expense), net | 1,522 | 10,224 |
Interest and other related expense, net | (34,531) | (33,811) |
Income before income taxes | 66,218 | 64,059 |
Provision for (recovery of) income taxes (note 14) | 29,850 | 27,369 |
Net income for the period | 36,368 | 36,690 |
Net (income) loss attributable to non-controlling interests | (44) | (94) |
Net income attributable to OpenText | $ 36,324 | $ 36,596 |
Earnings per share—basic attributable to OpenText (note 20) (in dollars per share) | $ 0.14 | $ 0.14 |
Earnings per share—diluted attributable to OpenText (note 20) (in dollars per share) | $ 0.13 | $ 0.14 |
Weighted average number of Common Shares outstanding—basic (in '000's) (in shares) | 268,028 | 264,802 |
Weighted average number of Common Shares outstanding—diluted (in '000's) (in shares) | 269,387 | 266,235 |
Dividends declared per Common Share (in dollars per share) | $ 0.1518 | $ 0.1320 |
License | ||
Revenues: | ||
Total revenues | $ 76,887 | $ 78,231 |
Cost of revenues: | ||
Costs of revenues | 3,872 | 2,960 |
Cloud services and subscriptions | ||
Revenues: | ||
Total revenues | 208,083 | 193,853 |
Cost of revenues: | ||
Costs of revenues | 87,703 | 84,134 |
Customer support | ||
Revenues: | ||
Total revenues | 311,551 | 295,404 |
Cost of revenues: | ||
Costs of revenues | 30,465 | 32,770 |
Professional service and other | ||
Revenues: | ||
Total revenues | 70,636 | 73,199 |
Cost of revenues: | ||
Costs of revenues | $ 56,796 | $ 59,428 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income for the period | $ 36,368 | $ 36,690 |
Other comprehensive income (loss)—net of tax: | ||
Net foreign currency translation adjustments | (3,520) | 906 |
Unrealized gain (loss) on cash flow hedges: | ||
Unrealized gain (loss) - net of tax expense (recovery) effect of $181 and $463 for the three months ended September 30, 2018 and 2017, respectively | 502 | 1,285 |
(Gain) loss reclassified into net income - net of tax (expense) recovery effect of $132 and ($287) for the three months ended September 30, 2018 and 2017, respectively | 366 | (797) |
Actuarial gain (loss) relating to defined benefit pension plans: | ||
Actuarial gain (loss) - net of tax expense (recovery) effect of $306 and ($83) for the three months ended September 30, 2018 and 2017, respectively | 1,197 | (115) |
Amortization of actuarial (gain) loss into net income - net of tax (expense) recovery effect of $73 and $42 for the three months ended September 30, 2018 and 2017, respectively | 66 | 56 |
Release of unrealized gain on marketable securities - net of tax effect of nil | 0 | (617) |
Total other comprehensive income (loss) net, for the period | (1,389) | 718 |
Total comprehensive income | 34,979 | 37,408 |
Comprehensive (income) loss attributable to non-controlling interests | (44) | (94) |
Total comprehensive income attributable to OpenText | $ 34,935 | $ 37,314 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on cash flow hedges, tax (recovery) expense | $ 181,000 | $ 463,000 |
(Gain) loss reclassified into net income, tax (expense) recovery | 132,000 | (287,000) |
Actuarial gain (loss), tax (recovery) expense | 306,000 | (83,000) |
Amortization of actuarial (gain) loss into net income, tax recovery (expense) | 73,000 | 42,000 |
Release of unrealized gain on marketable securities, tax effect | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income for the period | $ 36,368 | $ 36,690 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of intangible assets | 117,207 | 106,627 |
Share-based compensation expense | 6,555 | 8,235 |
Pension expense | 1,145 | 1,035 |
Amortization of debt issuance costs | 1,078 | 1,298 |
Amortization of deferred charges and credits | 0 | 1,117 |
Loss on sale and write down of property and equipment | 7,789 | 163 |
Release of unrealized gain on marketable securities to income | 0 | (841) |
Deferred taxes | 7,769 | 5,947 |
Share in net (income) loss of equity investees | (2,372) | 512 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 73,875 | 5,162 |
Contract assets | (5,346) | 0 |
Prepaid expenses and other current assets | 9,732 | (2,808) |
Income taxes and deferred charges and credits | 12,561 | 9,148 |
Accounts payable and accrued liabilities | (40,001) | (64,476) |
Deferred revenue | (57,403) | (38,480) |
Other assets | 2,444 | (2,083) |
Net cash provided by operating activities | 171,401 | 67,246 |
Cash flows from investing activities: | ||
Additions of property and equipment | (24,495) | (30,449) |
Other investing activities | (1,004) | (4,206) |
Net cash used in investing activities | (27,778) | (326,699) |
Cash flows from financing activities: | ||
Proceeds from long-term debt and Revolver | 0 | 200,000 |
Proceeds from issuance of Common Shares from exercise of stock options and ESPP | 18,127 | 21,825 |
Repayment of long-term debt and Revolver | (2,500) | (1,940) |
Debt issuance costs | (322) | 0 |
Purchase of Treasury Stock | (11,719) | 0 |
Repurchase of non-controlling interests | (583) | 0 |
Payments of dividends to shareholders | (40,466) | (35,017) |
Net cash provided by (used in) financing activities | (37,463) | 184,868 |
Foreign exchange gain (loss) on cash held in foreign currencies | 428 | 7,762 |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 106,588 | (66,823) |
Cash, cash equivalents and restricted cash at beginning of the period | 683,991 | 446,210 |
Cash, cash equivalents and restricted cash at end of the period | 790,579 | 379,387 |
Guidance Software Inc. | ||
Purchase of business, net of cash acquired | (2,279) | (220,765) |
Covisint Corporation | ||
Purchase of business, net of cash acquired | $ 0 | $ (71,279) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Reconciliation of Cash, Cash Equivalents and Restricted Cash - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | $ 787,919 | $ 376,390 |
Restricted cash included in Other assets | 2,660 | 2,997 |
Total Cash, cash equivalents and restricted cash | $ 790,579 | $ 379,387 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying Condensed Consolidated Financial Statements include the accounts of Open Text Corporation and our subsidiaries, collectively referred to as "OpenText" or the "Company". We wholly own all of our subsidiaries with the exception of Open Text South Africa Proprietary Ltd. (OT South Africa) and EC1 Pte. Ltd. (GXS Singapore), which as of September 30, 2018 , were 70% and 81% owned, respectively, by OpenText. All inter-company balances and transactions have been eliminated. Previously, our ownership in GXS Inc. (GXS Korea) was 85% . During the first quarter of Fiscal 2019, we acquired all of the outstanding non-controlling interests in GXS Korea for $0.6 million in cash. Throughout this Quarterly Report on Form 10-Q : (i) the term “ Fiscal 2019 ” means our fiscal year beginning on July 1, 2018 and ending June 30, 2019; (ii) the term “Fiscal 2018” means our fiscal year beginning on July 1, 2017 and ended June 30, 2018; (iii) the term “Fiscal 2017” means our fiscal year beginning on July 1, 2016 and ended June 30, 2017; (iv) the term “Fiscal 2016” means our fiscal year beginning on July 1, 2015 and ended June 30, 2016; and (v) the term “Fiscal 2015” means our fiscal year beginning on July 1, 2014 and ended June 30, 2015. These Condensed Consolidated Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The information furnished reflects all adjustments necessary for a fair presentation of the results for the periods presented. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements . These estimates, judgments and assumptions are evaluated on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. In particular, significant estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) testing of goodwill for impairment, (iii) the valuation of acquired intangible assets, (iv) the valuation of long-lived assets, (v) the recognition of contingencies, (vi) restructuring accruals, (vii) acquisition accruals and pre-acquisition contingencies, (viii) the realization of investment tax credits, (ix) the valuation of stock options granted and obligations related to share-based payments, including the valuation of our long-term incentive plans, (x) the valuation of pension assets and obligations, and (xi) accounting for income taxes. Beginning in the second quarter of Fiscal 2018, our income tax estimates were impacted by legislation informally known as the Tax Cuts and Jobs Act, which was enacted in the United States on December 22, 2017. The Company has recorded a provisional charge and continues to assess the effect of the new law on its consolidated financial statements in accordance with Staff Accounting Bulletin 118 “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118). For more details related to this matter, please refer to note 14 "Income Taxes". Impact of Recently Adopted Accounting Pronouncements Revenue Recognition Effective July 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606 "Revenue from Contracts with Customers" (Topic 606) using the cumulative effect approach. We applied the standard to contracts that were not completed as of the date of the initial adoption. Results for reporting periods commencing on July 1, 2018 are presented under the new revenue standard, while prior period results continue to be reported under the previous standard. As a result of this adoption, we recorded a net increase of approximately $30 million to retained earnings as of July 1, 2018 on the Condensed Consolidated Balance Sheets, with the following corresponding impacts: • A decrease to deferred revenues of approximately $31 million ; • A decrease to other assets of approximately $22 million in connection with lower deferred implementation costs; • An increase to other assets of approximately $14 million in connection with higher capitalized sales commission costs; • An increase in contract assets of approximately $18 million representing future billings in excess of revenues; and • An increase in net deferred tax liabilities of approximately $11 million . Please refer to Note 3 "Revenues" for additional information relating to Topic 606, including our updated revenue recognition policies. Additionally, certain prior period balances have been reclassified within other assets on the Condensed Consolidated Balance Sheets, to conform to the current period presentation as a result of this adoption. Please refer to Note 8 "Other Assets" for details. Income Taxes Effective July 1, 2018, we adopted Accounting Standards Update (ASU) No. 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory" (ASU 2016-16) which requires entities to recognize the income tax consequence of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We adopted ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings. Results for reporting periods as of July 1, 2018 are presented under the new standard, while prior period results continue to be reported under the previous standard. As a result of this adoption, we recorded a net decrease of approximately $27 million to retained earnings as of July 1, 2018 on the Condensed Consolidated Balance Sheets, with the following corresponding impacts: • A decrease to deferred charges of approximately $38 million ; • An increase to deferred tax assets of approximately $8 million ; and • A decrease to deferred credits of approximately $3 million . There was no impact to the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income or Condensed Consolidated Statements of Cash Flows as a result of this adoption. Restricted Cash Effective July 1, 2018, we adopted ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (ASU 2016-18), which requires amounts described as restricted cash and cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts in the statement of cash flows. We adopted ASU 2016-18 using the retrospective method. As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Cash Flows have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Net cash provided by operating activities $ 67,102 $ 144 $ 67,246 Cash, cash equivalents and restricted cash at beginning of period 443,357 2,853 446,210 Increase (decrease) in cash, cash equivalents and restricted cash during the period (66,967 ) 144 (66,823 ) Cash, cash equivalents and restricted cash at end of period $ 376,390 $ 2,997 $ 379,387 There was no impact to the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Income, or Condensed Consolidated Statements of Comprehensive Income as a result of this adoption. Pension Expense Effective July 1, 2018, we adopted ASU No. 2017-07, “Retirement Benefits - Presentation of Net Period Pension Costs (Topic 715)” (ASU 2017-07), which provides guidance on the capitalization, presentation and disclosure of net benefit costs related to postretirement benefit plans. Upon adoption, only service-related net periodic pension costs will be recorded within operating expense. All other non-service related net periodic pension costs will be classified under "Interest and other related expense" on our Condensed Consolidated Statements of Income. We adopted ASU 2017-07 on a retrospective basis. As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Income for the three months ended September 30, 2017 have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cost of revenues - Cloud services $ 84,330 $ (196 ) $ 84,134 Cost of revenues - Customer Support 32,791 (21 ) 32,770 Cost of revenues - Professional service and other 59,459 (31 ) 59,428 Total cost of revenues 223,500 (248 ) 223,252 Gross profit 417,187 248 417,435 Research and Development 77,629 (55 ) 77,574 Sales and Marketing 122,822 (207 ) 122,615 General and administrative 48,915 (13 ) 48,902 Total operating expense 330,064 (275 ) 329,789 Income from operations 87,123 523 87,646 Interest and other related expense, net (33,288 ) (523 ) (33,811 ) There was no change to net income or net earnings per share in any of the periods presented as a result of this adoption. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED Retirement Benefits In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-14 “Compensation-Retirement Benefits-Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post retirement plans. ASU 2018-14 is effective for us in the first quarter of our fiscal year ending June 30, 2022. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements. Leases |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 3 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS Balance as of June 30, 2018 $ 9,741 Bad debt expense 2,999 Write-off /adjustments 230 Balance as of September 30, 2018 $ 12,970 Included in accounts receivable are unbilled receivables in the amount of $56.1 million as of September 30, 2018 ( June 30, 2018 — $55.5 million |
Revenues
Revenues | 3 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES In accordance with Topic 606, we account for a customer contract when we obtain written approval, the contract is committed, the rights of the parties, including the payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for our products and services (at its transaction price). Estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are based on readily available information, which may include historical, current and forecasted information, taking into consideration the type of customer, the type of transaction and specific facts and circumstances of each arrangement. We report revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue producing transactions. We have four revenue streams: license, cloud services and subscriptions, customer support, and professional service and other. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (on-premise). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use intellectual property (IP) that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user doesn’t take possession of the software, as well as from end-to-end fully outsourced business-to-business (B2B) integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis via an identified line. Our cloud arrangements can be broadly categorized as "platform as a service" (PaaS), "software as a service" (SaaS), cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer's electronic data interchange (EDI) environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. In connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as for example, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. Customer support revenue Customer support revenue is associated with perpetual, term license and on-premise subscription arrangements. As customer support is not critical to the customer's ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. Professional service and other revenue Our professional services, when offered along with software licenses, consists primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all of the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example we may consider total labor hours incurred compared to total expected labor hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If a material right exists in one of our contracts then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our consolidated financial statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require significant judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative standalone selling price (SSP) basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. In most cases we are able to establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for certain goods and services in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required and we will allocate the transaction price between license and customer support at a constant ratio reflecting the mid-point of the established SSP range. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). For these type of agreements, we assess whether we are considered the principal or the agent in the arrangement. We consider factors such as, but not limited to, whether or not the reseller has the ability to set the price for which they sell our software products to end users and whether or not resellers distribution rights are limited such that any potential sales are subject to OpenText’s review and approval before delivery of the software product can be made. If we determine that we are the principal in the arrangement, then revenue is recognized based on the transaction price for the sale of the software product to the end user at the gross amount. If that is not known, then the net amount received from the reseller is the transaction price. If we determine that we are the agent in the agreement, then revenue is recognized based on the transaction price for the sale of the software product to the reseller, less any applicable commissions paid or discounts or rebates, if offered. Costs or commissions paid to the reseller would be recognized as a reduction of revenue unless we received a distinct good or service in return. Similarly, any discounts or rebates offered by the reseller would be recognized as a reduction of revenue. Typically, we conclude that we are the principal in our reseller agreements, as we have control over the service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. In some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) Disaggregation of Revenue The following table disaggregates our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended September 30, 2018 Total Revenues by Geography: Americas (1) $ 389,340 EMEA (2) 214,475 Asia Pacific (3) 63,342 Total Revenues $ 667,157 Total Revenues by Type of Performance Obligation: Recurring revenue Cloud services and subscriptions revenue $ 208,083 Customer support revenue 311,551 Total recurring revenues $ 519,634 License revenue (perpetual, term and subscriptions) 76,887 Professional service and other revenue 70,636 Total revenues $ 667,157 Total Revenues by Timing of Revenue Recognition Point in time 76,887 Over time (including professional service and other revenue) 590,270 Total revenues $ 667,157 (1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) Asia Pacific primarily consists of the countries Japan, Australia, China, Korea, Philippines, Singapore and New Zealand. Contract Balances A contract asset will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. This will be the case if implementation services offered in a cloud arrangement for example, are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. When we perform services, such as during the design and build phase of a service contract, the right to consideration is typically subject to milestone completion or customer acceptance and the unbilled accounts receivable are classified as a contract asset. Contract assets are reclassified to accounts receivable when the rights become unconditional. The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of September 30, 2018 As of July 1, 2018 Short-term contract assets $ 8,767 $ 5,474 Long-term contract assets $ 12,041 $ 12,382 Short-term deferred revenue $ 582,139 $ 618,197 Long-term deferred revenue $ 43,585 $ 64,743 The difference in the opening and closing balances of our contract assets and deferred revenues primarily results from the timing difference between our performance and the customer’s payments. We fulfill our obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. During the three months ended September 30, 2018 , we reclassified $2.4 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. We had no asset impairment loss related to contract assets for the three months ended September 30, 2018 . We recognize deferred revenue when we have received consideration or an amount of consideration is due from the customer for future obligations to transfer products or services. Our deferred revenues primarily relate to customer support agreements which have been paid for by customers prior to the performance of those services. The amount of revenue that was recognized during the three months ended September 30, 2018 that was included in the deferred revenue balances at July 1, 2018 was approximately $270 million . Incremental Costs of Obtaining a Contract with a Customer Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the new standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commission allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within sales and marketing expense in the Condensed Consolidated Statements of Income . Our short term capitalized costs to obtain a contract are included in "Prepaid expenses and other assets", while our long-term capitalized costs to obtain a contract are included in "Other assets" on our Condensed Consolidated Balance Sheets . The following table summarizes the changes since July 1, 2018 : Capitalized costs to obtain a contract as of July 1, 2018 $ 35,151 New capitalized costs incurred 3,179 Amortization of capitalized costs (2,271 ) Capitalized costs to obtain a contract as of September 30, 2018 $ 36,059 During the three months ended September 30, 2018, there was no impairment loss in relation to costs capitalized. Transaction Price Allocated to the Remaining Performance Obligations As of September 30, 2018 , approximately $926 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize approximately 40% over the next 12 months and the remaining balance thereafter. We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. Impact on financial statements The following tables summarize the impacts of adopting Topic 606 on our condensed consolidated balance sheets, statements of income and cash flows, all as compared to proforma balances illustrating if ASC Topic 605 "Revenue Recognition" (Topic 605) had still been in effect. Financial statement line items that were not impacted by the adoption of Topic 606 have been excluded from the tables below. Condensed Consolidated Balance Sheet As of September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect ASSETS Contract assets $ 8,767 $ (8,767 ) $ — Prepaid expenses and other current assets 80,624 6,481 87,105 Total current assets 1,325,106 (2,286 ) 1,322,820 Long-term contract assets 12,041 (12,041 ) — Deferred tax assets 1,106,377 8,004 1,114,381 Other assets 116,536 (179 ) 116,357 Total assets $ 7,619,048 $ (6,502 ) $ 7,612,546 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 252,079 $ (2 ) $ 252,077 Deferred revenues 582,139 11,011 593,150 Total current liabilities 875,273 11,009 886,282 Long-term liabilities: Deferred revenues 43,585 20,000 63,585 Deferred tax liabilities 74,328 (3,934 ) 70,394 Total long-term liabilities 3,016,745 16,066 3,032,811 Shareholders’ equity: Accumulated other comprehensive income 32,256 462 32,718 Retained earnings 1,993,099 (34,039 ) 1,959,060 Total OpenText shareholders' equity 3,725,907 (33,577 ) 3,692,330 Non-controlling interests 1,123 — 1,123 Total shareholders’ equity 3,727,030 (33,577 ) 3,693,453 Total liabilities and shareholders’ equity $ 7,619,048 $ (6,502 ) $ 7,612,546 Condensed Consolidated Statements of Income Three Months Ended September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect Revenues: License $ 76,887 $ (2,601 ) $ 74,286 Cloud services and subscriptions 208,083 (535 ) 207,548 Customer support 311,551 (583 ) 310,968 Professional service and other 70,636 (54 ) 70,582 Total revenues 667,157 (3,773 ) 663,384 Cost of revenues: Cloud services and subscriptions 87,703 467 88,170 Total cost of revenues 226,313 467 226,780 Gross profit 440,844 (4,240 ) 436,604 Operating expenses: Sales and marketing 120,182 1,107 121,289 Total operating expenses 341,617 1,107 342,724 Income from operations 99,227 (5,347 ) 93,880 Interest and other related expense, net (34,531 ) (159 ) (34,690 ) Income before income taxes 66,218 (5,506 ) 60,712 Provision for (recovery of) income taxes 29,850 (1,253 ) 28,597 Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Condensed Consolidated Statement of Cash Flows Three Months Ended September 30, 2018 As reported under Topic 606 Adjustments Proforma as if Topic 605 was in effect Cash flows from operating activities: Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Adjustments to reconcile net income to net cash provided by operating activities: Deferred taxes 7,769 (1,293 ) 6,476 Changes in operating assets and liabilities: Accounts receivable 73,875 (2,281 ) 71,594 Contract assets (5,346 ) 5,346 — Prepaid expenses and other current assets 9,732 1,213 10,945 Income taxes and deferred charges and credits 12,561 36 12,597 Accounts payable and accrued liabilities (40,001 ) 75 (39,926 ) Deferred revenue (57,403 ) 703 (56,700 ) Other assets 2,444 454 2,898 Net cash provided by operating activities $ 171,401 $ — $ 171,401 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT As of September 30, 2018 Cost Accumulated Depreciation Net Furniture and fixtures $ 36,481 $ (22,085 ) $ 14,396 Office equipment 1,809 (722 ) 1,087 Computer hardware 207,047 (142,033 ) 65,014 Computer software 98,492 (63,220 ) 35,272 Capitalized software development costs 84,402 (45,074 ) 39,328 Leasehold improvements 109,145 (54,385 ) 54,760 Land and buildings 47,797 (11,154 ) 36,643 Total $ 585,173 $ (338,673 ) $ 246,500 As of June 30, 2018 Cost Accumulated Depreciation Net Furniture and fixtures $ 34,647 $ (21,488 ) $ 13,159 Office equipment 1,467 (687 ) 780 Computer hardware 207,381 (134,906 ) 72,475 Computer software 97,653 (59,485 ) 38,168 Capitalized software development costs 81,073 (41,556 ) 39,517 Leasehold improvements 118,200 (55,172 ) 63,028 Land and buildings 47,880 (10,802 ) 37,078 Total $ 588,301 $ (324,096 ) $ 264,205 |
Goodwill
Goodwill | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2018: Balance as of June 30, 2018 $ 3,580,129 Adjustments on account of foreign exchange (1,488 ) Balance as of September 30, 2018 $ 3,578,641 |
Acquired Intangible Assets
Acquired Intangible Assets | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS As of September 30, 2018 Cost Accumulated Amortization Net Technology assets $ 985,226 $ (487,251 ) $ 497,975 Customer assets 1,301,734 (596,425 ) 705,309 Total $ 2,286,960 $ (1,083,676 ) $ 1,203,284 As of June 30, 2018 Cost Accumulated Amortization Net Technology assets $ 985,226 $ (439,774 ) $ 545,452 Customer assets 1,348,510 (597,325 ) 751,185 Total $ 2,333,736 $ (1,037,099 ) $ 1,296,637 The above balances as of September 30, 2018 have been reduced to reflect the impact of intangible assets where the gross cost has become fully amortized during the three months ended September 30, 2018 . The impact of this resulted in a reduction of $46.8 million related to Customer assets. The weighted average amortization periods for acquired technology and customer intangible assets are approximately six years and eight years , respectively. The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2019 (nine months ended June 30) $ 259,048 2020 280,888 2021 190,763 2022 177,208 2023 115,015 2024 and beyond 180,362 Total $ 1,203,284 |
Other Assets
Other Assets | 3 Months Ended |
Sep. 30, 2018 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS As of September 30, 2018 As of June 30, 2018 Deposits and restricted cash $ 13,775 $ 9,479 Deferred implementation costs — 13,740 Capitalized costs to obtain a contract 26,987 13,027 Investments 47,109 49,635 Long-term prepaid expenses and other long-term assets 28,665 25,386 Total $ 116,536 $ 111,267 Deposits and restricted cash primarily relate to security deposits provided to landlords in accordance with facility lease agreements and cash restricted per the terms of certain contractual-based agreements. Deferred implementation costs relate to direct and relevant costs on implementation of long-term contracts, to the extent such costs can be recovered through guaranteed contract revenues. As a result of the adoption of Topic 606, deferred implementation costs are no longer capitalized, but rather expensed as incurred as these costs do not relate to future performance obligations. Capitalized costs to obtain a contract relate to incremental costs of obtaining a contract, such as sales commissions, which are eligible for capitalization on contracts to the extent that such costs are expected to be recovered. Investments relate to certain non-marketable equity securities in which we are a limited partner. Our interests in each of these investees range from 4% to below 20% . These investments are accounted for using the equity method. Our share of net income or losses based on our interest in these investments is recorded as a component of other income (expense), net in our Condensed Consolidated Statements of Income . During the three months ended September 30, 2018 , our share of income (loss) from these investments was $2.4 million ( three months ended September 30, 2017 — $(0.5) million ). |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 3 Months Ended |
Sep. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Current liabilities Accounts payable and accrued liabilities are comprised of the following: As of September 30, 2018 As of June 30, 2018 Accounts payable—trade $ 21,176 $ 41,722 Accrued salaries and commissions 84,918 118,024 Accrued liabilities 100,457 108,903 Accrued interest on Senior Notes 26,021 24,786 Amounts payable in respect of restructuring and other Special charges 17,712 5,622 Asset retirement obligations 1,795 3,097 Total $ 252,079 $ 302,154 Long-term accrued liabilities As of September 30, 2018 As of June 30, 2018 Amounts payable in respect of restructuring and other Special charges $ 5,740 $ 4,362 Other accrued liabilities* 31,965 35,874 Asset retirement obligations 13,463 12,591 Total $ 51,168 $ 52,827 * Other accrued liabilities consist primarily of tenant allowances, deferred rent and lease fair value adjustments relating to certain facilities acquired through business acquisitions. Asset retirement obligations We are required to return certain of our leased facilities to their original state at the conclusion of our lease. As of September 30, 2018 , the present value of this obligation was $15.3 million ( June 30, 2018 — $15.7 million ), with an undiscounted value of $17.1 million ( June 30, 2018 — $17.7 million |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt Long-term debt is comprised of the following: As of September 30, 2018 As of June 30, 2018 Total debt Senior Notes 2026 $ 850,000 $ 850,000 Senior Notes 2023 800,000 800,000 Term Loan B 995,000 997,500 Total principal payments due 2,645,000 2,647,500 Premium on Senior Notes 2026 5,866 6,018 Debt issuance costs (31,739 ) (32,995 ) Total amount outstanding 2,619,127 2,620,523 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Total current portion of long-term debt 10,000 10,000 Non-current portion of long-term debt $ 2,609,127 $ 2,610,523 Senior Unsecured Fixed Rate Notes Senior Notes 2026 On May 31, 2016, we issued $600 million in aggregate principal amount of 5.875% Senior Notes due 2026 (Senior Notes 2026) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (Securities Act), and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2026 bear interest at a rate of 5.875% per annum, payable semi-annually in arrears on June 1 and December 1, commencing on December 1, 2016. Senior Notes 2026 will mature on June 1, 2026, unless earlier redeemed, in accordance with their terms, or repurchased. On December 20, 2016, we issued an additional $250 million in aggregate principal amount by reopening our Senior Notes 2026 at an issue price of 102.75% . The additional notes have identical terms, are fungible with and are a part of a single series with the previously issued $600 million aggregate principal amount of Senior Notes 2026. The outstanding aggregate principal amount of Senior Notes 2026, after taking into consideration the additional issuance, is $850 million . For the three months ended September 30, 2018 , we recorded interest expense of $12.5 million , relating to Senior Notes 2026 ( three months ended September 30, 2017 — $12.5 million ). Senior Notes 2023 On January 15, 2015, we issued $800 million in aggregate principal amount of 5.625% Senior Notes due 2023 (Senior Notes 2023) in an unregistered offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act. Senior Notes 2023 bear interest at a rate of 5.625% per annum, payable semi-annually in arrears on January 15 and July 15, commencing on July 15, 2015. Senior Notes 2023 will mature on January 15, 2023, unless earlier redeemed, in accordance with their terms, or repurchased. For the three months ended September 30, 2018 , we recorded interest expense of $11.3 million , relating to Senior Notes 2023 ( three months ended September 30, 2017 — $11.3 million ). Term Loan B On May 30, 2018, we refinanced our existing term loan facility, by entering into a new $1 billion term loan facility (Term Loan B), whereby we borrowed $1 billion on that day and repaid in full the loans under our prior $800 million term loan credit facility originally entered into on January 16, 2014. Borrowings under Term Loan B are secured by a first charge over substantially all of our assets on a pari passu basis with the Revolver (defined below). Term Loan B has a seven year term, maturing in May 2025, and repayments made under Term Loan B are equal to 0.25% of the principal amount in equal quarterly installments for the life of Term Loan B, with the remainder due at maturity. Borrowings under Term Loan B currently bear a floating rate of interest equal to 1.75% plus LIBOR. As of September 30, 2018 , the outstanding balance on the Term Loan B bears an interest rate of approximately 3.83% . For the three months ended September 30, 2018 , we recorded interest expense of $9.8 million , relating to Term Loan B ( three months ended September 30, 2017 — $6.4 million ). Revolver We currently have a $450 million committed revolving credit facility (the Revolver) with a maturity date of May 5, 2022. Borrowings under the Revolver are secured by a first charge over substantially all of our assets, on a pari passu basis with Term Loan B. The Revolver has no fixed repayment date prior to the end of the term. Borrowings under the Revolver bear interest per annum at a floating rate of LIBOR plus a fixed margin dependent on our consolidated net leverage ratio ranging from 1.25% to 1.75% . As of September 30, 2018 , we have no outstanding balance on the Revolver. There was no activity during the three months ended September 30, 2018 and we recorded no interest expense. During the three months ended September 30, 2017 , we drew down $200 million from the Revolver, partially to finance acquisitions, and recorded interest expense of $1.8 million relating to amounts drawn on the Revolver. Debt Issuance Costs and Premium on Senior Notes Debt issuance costs relate primarily to costs incurred for the purpose of obtaining our credit facilities and issuing our Senior Notes 2023 and Senior Notes 2026 (collectively referred to as the Senior Notes) and are being amortized over the respective terms of the Senior Notes and Term Loan B using the effective interest method and the Revolver using the straight-line method. |
Pension Plans and Other Post Re
Pension Plans and Other Post Retirement Benefits | 3 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS | PENSION PLANS AND OTHER POST RETIREMENT BENEFITS The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH ( GXS GER ), GXS Philippines, Inc. ( GXS PHP ) and other plans as of September 30, 2018 and June 30, 2018 : As of September 30, 2018 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 32,668 $ 673 $ 31,995 GXS GER defined benefit plan 25,206 1,039 24,167 GXS PHP defined benefit plan 3,431 138 3,293 Other plans 5,698 423 5,275 Total $ 67,003 $ 2,273 $ 64,730 As of June 30, 2018 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 32,651 $ 655 $ 31,996 GXS GER defined benefit plan 25,382 1,027 24,355 GXS PHP defined benefit plan 3,853 138 3,715 Other plans 6,095 442 5,653 Total $ 67,981 $ 2,262 $ 65,719 * The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Condensed Consolidated Balance Sheets (see note 9 "Accounts Payable and Accrued Liabilities"). Defined Benefit Plans CDT Plan CDT sponsors an unfunded defined benefit pension plan covering substantially all CDT employees (CDT plan) which provides for old age, disability and survivors’ benefits. Benefits under the CDT plan are generally based on age at retirement, years of service and the employee’s annual earnings. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan's active employees. As of September 30, 2018 , there is approximately $0.5 million in accumulated other comprehensive income related to the CDT plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2019. GXS GER Plan As part of our acquisition of GXS Group, Inc. (GXS) in Fiscal 2014, we assumed an unfunded defined benefit pension plan covering certain German employees which provides for old age, disability and survivors' benefits. The GXS GER plan has been closed to new participants since 2006. Benefits under the GXS GER plan are generally based on a participant’s remuneration, date of hire, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of September 30, 2018 , there is approximately $0.1 million in accumulated other comprehensive income related to the GXS GER plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2019. GXS PHP Plan As part of our acquisition of GXS in Fiscal 2014, we assumed a primarily unfunded defined benefit pension plan covering substantially all of the GXS Philippines employees which provides for retirement, disability and survivors' benefits. Benefits under the GXS PHP plan are generally based on a participant’s remuneration, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Aside from an initial contribution which has a fair value of approximately $31 thousand as of September 30, 2018 , no additional contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of September 30, 2018 , there is approximately $0.4 million in accumulated other comprehensive income related to the GXS PHP plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2019. The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated: As of September 30, 2018 As of June 30, 2018 CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Benefit obligation—beginning of period $ 32,651 $ 25,382 $ 3,853 $ 61,886 $ 28,881 $ 23,730 $ 4,495 $ 57,106 Service cost 141 145 176 462 501 472 832 1,805 Interest cost 165 126 68 359 607 489 241 1,337 Benefits paid (154 ) (253 ) (34 ) (441 ) (580 ) (974 ) (141 ) (1,695 ) Actuarial (gain) loss (477 ) (460 ) (575 ) (1,512 ) 2,442 997 (1,313 ) 2,126 Foreign exchange (gain) loss 342 266 (57 ) 551 800 668 (261 ) 1,207 Benefit obligation—end of period 32,668 25,206 3,431 61,305 32,651 25,382 3,853 61,886 Less: Current portion (673 ) (1,039 ) (138 ) (1,850 ) (655 ) (1,027 ) (138 ) (1,820 ) Non-current portion of benefit obligation $ 31,995 $ 24,167 $ 3,293 $ 59,455 $ 31,996 $ 24,355 $ 3,715 $ 60,066 The following are details of net pension expense relating to the following pension plans: Three Months Ended September 30, 2018 2017 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 141 $ 145 $ 176 $ 462 $ 124 $ 117 $ 219 $ 460 Interest cost 165 126 68 359 150 121 55 326 Amortization of actuarial (gains) and losses 176 33 (140 ) 69 134 18 (61 ) 91 Net pension expense $ 482 $ 304 $ 104 $ 890 $ 408 $ 256 $ 213 $ 877 In determining the fair value of the pension plan benefit obligations as of September 30, 2018 and June 30, 2018 , respectively, we used the following weighted-average key assumptions: As of September 30, 2018 As of June 30, 2018 CDT GXS GER GXS PHP CDT GXS GER GXS PHP Assumptions: Salary increases 3.50% 3.50% 6.50% 3.50% 3.50% 6.50% Pension increases 2.00% 2.00% N/A 2.00% 2.00% N/A Discount rate 2.08% 2.08% 8.25% 2.00% 2.00% 7.25% Normal retirement age 65 65-67 60 65 65-67 60 Employee fluctuation rate: to age 20 —% —% 12.19% —% —% 12.19% to age 25 —% —% 16.58% —% —% 16.58% to age 30 1.00% —% 13.97% 1.00% —% 13.97% to age 35 0.50% —% 10.77% 0.50% —% 10.77% to age 40 —% —% 7.39% —% —% 7.39% to age 45 0.50% —% 3.28% 0.50% —% 3.28% to age 50 0.50% —% —% 0.50% —% —% from age 51 1.00% —% —% 1.00% —% —% Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, CDT GXS GER GXS PHP 2019 (nine months ended June 30) $ 497 $ 778 $ 103 2020 707 1,043 115 2021 808 1,072 147 2022 899 1,080 292 2023 1,010 1,082 243 2024 to 2028 6,071 5,563 1,529 Total $ 9,992 $ 10,618 $ 2,429 Other Plans |
Share Capital, Option Plans and
Share Capital, Option Plans and Share-Based Payments | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS | SHARE CAPITAL, OPTION PLANS AND SHARE-BASED PAYMENTS Cash Dividends For the three months ended September 30, 2018 , pursuant to the Company’s dividend policy, we declared total non-cumulative dividends of $0.1518 , per Common Share in the aggregate amount of $40.5 million , which we paid during the same period. For the three months ended September 30, 2017 , pursuant to the Company’s dividend policy, we paid total non-cumulative dividends of $0.1320 , per Common Share in the aggregate amount of $35.0 million . Share Capital Our authorized share capital includes an unlimited number of Common Shares and an unlimited number of Preference Shares. No Preference Shares have been issued. Treasury Stock Repurchase From time to time we may provide funds to an independent agent to facilitate repurchases of our Common Shares in connection with the settlement of awards under the Long-Term Incentive Plans (LTIP) or other plans. During the three months ended September 30, 2018 , we repurchased 304,000 of our Common Shares, at a cost of approximately $11.7 million , for potential reissuance under our LTIP or other plans ( three months ended September 30, 2017 — nil ). See below for more details on our various plans. Reissuance During the three months ended September 30, 2018 , we reissued 2,968 Common Shares from treasury stock ( three months ended September 30, 2017 — 8,332 Common Shares), in connection with the settlement of awards. Share-Based Payments Total share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended September 30, 2018 2017 Stock options $ 2,602 $ 3,302 Performance Share Units (issued under LTIP) 843 1,035 Restricted Share Units (issued under LTIP) 1,385 1,886 Restricted Share Units (other) 81 479 Deferred Share Units (directors) 661 547 Employee Share Purchase Plan 983 986 Total share-based compensation expense $ 6,555 $ 8,235 Summary of Outstanding Stock Options As of September 30, 2018 , an aggregate of 7,179,373 options to purchase Common Shares were outstanding and an additional 10,298,756 options to purchase Common Shares were available for issuance under our stock option plans. Our stock options generally vest over four years and expire between seven and ten years from the date of the grant. Currently we also have options outstanding that vest over five years , as well as options outstanding that vest based on meeting certain market conditions. The exercise price of all our options is set at an amount that is not less than the closing price of our Common Shares on the NASDAQ on the trading day immediately preceding the applicable grant date. A summary of activity under our stock option plans for the three months ended September 30, 2018 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000s) Outstanding at June 30, 2018 7,078,435 $ 28.41 Granted 750,220 39.27 Exercised (494,134 ) 25.16 Forfeited or expired (155,148 ) 32.05 Outstanding at September 30, 2018 7,179,373 $ 29.69 4.49 $ 57,829 Exercisable at September 30, 2018 2,570,581 $ 25.26 3.14 $ 32,850 We estimate the fair value of stock options using the Black-Scholes option-pricing model or, where appropriate, the Monte Carlo Valuation Method, consistent with the provisions of ASC Topic 718, "Compensation—Stock Compensation" (Topic 718) and SEC Staff Accounting Bulletin No. 107. The option-pricing models require input of subjective assumptions, including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. We use historical volatility as a basis for projecting the expected volatility of the underlying stock and estimate the expected life of our stock options based upon historical data. We believe that the valuation techniques and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair value of our stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards. For the periods indicated, the weighted-average fair value of options and weighted-average assumptions were as follows: Three Months Ended September 30, 2018 2017 Weighted–average fair value of options granted $ 8.73 $ 7.44 Weighted-average assumptions used: Expected volatility 26.07 % 27.35 % Risk–free interest rate 2.80 % 1.74 % Expected dividend yield 1.45 % 1.43 % Expected life (in years) 4.32 4.34 Forfeiture rate (based on historical rates) 6 % 6 % Average exercise share price $ 39.27 $ 34.49 As of September 30, 2018 , the total compensation cost related to the unvested stock option awards not yet recognized was approximately $21.8 million , which will be recognized over a weighted-average period of approximately 2.8 years . No cash was used by us to settle equity instruments granted under share-based compensation arrangements in any of the periods presented. We have no t capitalized any share-based compensation costs as part of the cost of an asset in any of the periods presented. For the three months ended September 30, 2018 , cash in the amount of $12.4 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three months ended September 30, 2018 from the exercise of options eligible for a tax deduction was $0.9 million . For the three months ended September 30, 2017 , cash in the amount of $16.2 million was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by us during the three months ended September 30, 2017 from the exercise of options eligible for a tax deduction was $0.1 million . Long-Term Incentive Plans We incentivize our executive officers, in part, with long-term compensation pursuant to our LTIP. The LTIP is a rolling three year program that grants eligible employees a certain number of target Performance Share Units (PSUs) and/or Restricted Share Units (RSUs). Target PSUs become vested upon the achievement of certain financial and/or operational performance criteria (the Performance Conditions) that are determined at the time of the grant. Target RSUs become vested when an eligible employee remains employed throughout the vesting period. PSUs and RSUs granted under the LTIPs have been measured at fair value as of the effective date, consistent with Topic 718, and will be charged to share-based compensation expense over the remaining life of the plan. Stock options granted under the LTIPs have been measured using the Black-Scholes option-pricing model, consistent with Topic 718. We estimate the fair value of PSUs using the Monte Carlo pricing model and RSUs have been valued based upon their grant date fair value. As of September 30, 2018 , the total expected compensation cost related to the unvested LTIP awards not yet recognized was $21.9 million , which is expected to be recognized over a weighted average period of 2.3 years . LTIP grants that have recently vested, or have yet to vest, are described below. LTIP grants are referred to in this Quarterly Report on Form 10-Q based upon the year in which the grants are expected to vest. Fiscal 2018 LTIP Grants made in Fiscal 2016 under the LTIP (collectively referred to as Fiscal 2018 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2016 starting on August 23, 2015. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2018 LTIP. We expect to settle the Fiscal 2018 LTIP awards in stock during the second quarter of Fiscal 2019. Fiscal 2019 LTIP Grants made in Fiscal 2017 under the LTIP (collectively referred to as Fiscal 2019 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2017 starting on August 14, 2016. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2019 LTIP. We expect to settle the Fiscal 2019 LTIP awards in stock. Fiscal 2020 LTIP Grants made in Fiscal 2018 under the LTIP (collectively referred to as Fiscal 2020 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2018 starting on August 7, 2017. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2020 LTIP. We expect to settle the Fiscal 2020 LTIP awards in stock. Fiscal 2021 LTIP Grants made in Fiscal 2019 under the LTIP (collectively referred to as Fiscal 2021 LTIP), consisting of PSUs and RSUs, took effect in Fiscal 2019 starting on August 6, 2018. The Performance Conditions for vesting of the PSUs are based solely upon market conditions. The RSUs are employee service-based awards and vest over the life of the Fiscal 2021 LTIP. We expect to settle the Fiscal 2021 LTIP awards in stock. Restricted Share Units (RSUs) During the three months ended September 30, 2018 , we did no t grant any RSUs to employees in accordance with employment and other agreements ( three months ended September 30, 2017 — 2,968 RSUs). The RSUs vest over a specified contract date, typically three years from the respective date of grants. We expect to settle the awards in stock. During the three months ended September 30, 2018 , we issued 2,968 Common Shares from treasury stock, with a cost of $0.1 million , in connection with the settlement of these vested RSUs ( three months ended September 30, 2017 — 8,332 Common Shares, with a cost of $0.2 million ). Deferred Stock Units (DSUs) During the three months ended September 30, 2018 , we granted 3,158 DSUs to certain non-employee directors ( three months ended September 30, 2017 — 3,203 DSUs). The DSUs were issued under our Deferred Share Unit Plan. DSUs granted as compensation for director fees vest immediately, whereas all other DSUs granted vest at our next annual general meeting following the granting of the DSUs. No DSUs are payable by us until the director ceases to be a member of the Board. Employee Share Purchase Plan (ESPP) Our ESPP offers employees a purchase price discount of 15% . During the three months ended September 30, 2018 , 176,074 Common Shares were eligible for issuance to employees enrolled in the ESPP ( three months ended September 30, 2017 — 192,369 Common Shares). During the three months ended September 30, 2018 , cash in the amount of approximately $5.7 million was received from employees relating to the ESPP ( three months ended September 30, 2017 — $5.7 million |
Guarantees and Contingencies
Guarantees and Contingencies | 3 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
GUARANTEES AND CONTINGENCIES | GUARANTEES AND CONTINGENCIES We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total October 1, 2018— July 1, 2019— July 1, 2021— July 1, 2023 Long-term debt obligations (1) $ 3,496,391 $ 108,945 $ 285,913 $ 1,084,256 $ 2,017,277 Operating lease obligations (2) 348,669 53,222 118,353 73,118 103,976 Purchase obligations 19,013 9,914 8,860 239 — $ 3,864,073 $ 172,081 $ 413,126 $ 1,157,613 $ 2,121,253 (1) Includes interest up to maturity and principal payments. Please see note 10 "Long-Term Debt" for more details. (2) Net of $33.8 million of sublease income to be received from properties which we have subleased to third parties. Guarantees and Indemnifications We have entered into customer agreements which may include provisions to indemnify our customers against third party claims that our software products or services infringe certain third party intellectual property rights and for liabilities related to a breach of our confidentiality obligations. We have not made any material payments in relation to such indemnification provisions and have not accrued any liabilities related to these indemnification provisions in our Condensed Consolidated Financial Statements . Occasionally, we enter into financial guarantees with third parties in the ordinary course of our business, including, among others, guarantees relating to taxes and letters of credit on behalf of parties with whom we conduct business. Such agreements have not had a material effect on our results of operations, financial position or cash flows. Litigation We are currently involved in various claims and legal proceedings. Quarterly, we review the status of each significant legal matter and evaluate such matters to determine how they should be treated for accounting and disclosure purposes in accordance with the requirements of ASC Topic 450-20 "Loss Contingencies" (Topic 450-20). Specifically, this evaluation process includes the centralized tracking and itemization of the status of all our disputes and litigation items, discussing the nature of any litigation and claim, including any dispute or claim that is reasonably likely to result in litigation, with relevant internal and external counsel, and assessing the progress of each matter in light of its merits and our experience with similar proceedings under similar circumstances. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss in accordance with Topic 450-20. As of the date of this Quarterly Report on Form 10-Q , the aggregate of such estimated losses was not material to our consolidated financial position or results of operations and we do not believe as of the date of this filing that it is reasonably possible that a loss exceeding the amounts already recognized will be incurred that would be material to our consolidated financial position or results of operations. Contingencies IRS Matter As we have previously disclosed, the United States Internal Revenue Service (IRS) is examining certain of our tax returns for our fiscal year ended June 30, 2010 (Fiscal 2010) through our fiscal year ended June 30, 2012 (Fiscal 2012), and in connection with those examinations is reviewing our internal reorganization in Fiscal 2010 to consolidate certain intellectual property ownership in Luxembourg and Canada and our integration of certain acquisitions into the resulting structure. We also previously disclosed that the examinations may lead to proposed adjustments to our taxes that may be material, individually or in the aggregate, and that we have not recorded any material accruals for any such potential adjustments in our Condensed Consolidated Financial Statements . We previously disclosed that, as part of these examinations, on July 17, 2015 we received from the IRS an initial Notice of Proposed Adjustment (NOPA) in draft form, that, as revised by the IRS on July 11, 2018 proposes a one-time approximately $335 million increase to our U.S. federal taxes arising from the reorganization in Fiscal 2010 (the 2010 NOPA), plus penalties equal to 20% of the additional proposed taxes for Fiscal 2010, and interest at the applicable statutory rate (which will continue to accrue until the matter is resolved and may be substantial). On July 11, 2018 , we also received, consistent with previously disclosed expectations, a draft NOPA proposing a one time approximately $80 million increase to our U.S. federal taxes for Fiscal 2012 (the 2012 NOPA) arising from the integration of Global 360 Holding Corp. into the structure that resulted from the internal reorganization in Fiscal 2010, plus penalties equal to 40% of the additional proposed taxes for Fiscal 2012, and interest. A NOPA is an IRS position and does not impose an obligation to pay tax. We continue to strongly disagree with the IRS’ positions within the NOPAs and intend to vigorously contest the proposed adjustments to our taxable income. We currently estimate our potential aggregate liability, as of September 30, 2018 , in connection with these ongoing matters with the IRS, including additional state income taxes plus penalties and interest that may be due, to be approximately $735 million , comprised of approximately $455 million in U.S. federal and state taxes, approximately $105 million of penalties, and approximately $175 million of interest. Based on our discussions with the IRS, we do not expect the IRS to further revise the NOPAs to increase any of their proposed adjustments to our U.S. federal income taxes (subject to the continued accrual of interest, as noted above). As previously disclosed and noted above, we strongly disagree with the IRS’ position and intend to vigorously contest the proposed adjustments to our taxable income. We are examining various alternatives available to taxpayers to contest the proposed adjustments. Any such alternatives could involve a lengthy process and result in the incurrence of significant expenses. As of the date of this Quarterly Report on Form 10-Q , we have not recorded any material accruals in respect of these examinations in our Condensed Consolidated Financial Statements . An adverse outcome of these tax examinations could have a material adverse effect on our financial position and results of operations. For additional information regarding the history of this IRS matter, including further details regarding the changes to the 2010 NOPA that the IRS made in July 2018, please see Note 13 "Guarantees and Contingencies" in our Annual Report on Form 10-K for Fiscal 2018. CRA Matter As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012 and Fiscal 2013. Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of September 30, 2018 , in connection with the CRA's reassessments for Fiscal 2012 and Fiscal 2013 to be limited to penalties and interest that may be due of approximately $23 million . The notices of reassessment for Fiscal 2012 and Fiscal 2013 would, as drafted, increase our taxable income by approximately $90 million for each of those years, as well as impose a 10% penalty on the proposed adjustment to income. We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012 and Fiscal 2013 (including any penalties) are without merit. We have filed notices of objection for Fiscal 2012 and Fiscal 2013, and we are currently seeking competent authority consideration under applicable international treaties in respect of these reassessments. Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012 and Fiscal 2013, or potential reassessments that may be proposed for subsequent years currently under audit, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above. We will continue to vigorously contest the proposed adjustments to our taxable income and any penalty and interest assessments. As of the date of this Quarterly Report on Form 10-Q , we have not recorded any accruals in respect of these reassessments in our Condensed Consolidated Financial Statements . Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability in respect of our international transactions, including the transfer pricing methodology applied to them. The CRA is currently auditing Fiscal 2014 and Fiscal 2015. We are engaged in ongoing discussions with the CRA and continue to vigorously contest the CRA's audit positions. GXS Brazil Matter Historically, prior to our acquisition of GXS, GXS would charge certain costs to its subsidiaries, including GXS Tecnologia da Informação (Brasil) Ltda. (GXS Brazil), primarily based on historical transfer pricing studies that were intended to reflect the costs incurred by subsidiaries in relation to services provided by the parent company to the subject subsidiary. GXS recorded taxes on amounts billed, that were considered to be due based on the intercompany charges. GXS subsequently re-evaluated its intercompany charges to GXS Brazil and related taxes and, upon taking into consideration the current environment and judicial proceedings in Brazil, concluded that it was probable that certain indirect taxes would be assessable and payable based upon the accrual of such intercompany charges and has approximately $1.4 million accrued for the probable amount of a settlement related to the indirect taxes, interest and penalties. GXS India Matter Our Indian subsidiary, GXS India Technology Centre Private Limited (GXS India), is subject to potential assessments by Indian tax authorities in the city of Bangalore. GXS India has received assessment orders from the Indian tax authorities alleging that the transfer price applied to intercompany transactions was not appropriate. Based on advice from our tax advisors, we believe that the facts that the Indian tax authorities are using to support their assessment are incorrect. We have filed appeals and anticipate an eventual settlement with the Indian tax authorities. We have accrued $1.2 million to cover our anticipated financial exposure in this matter. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate represents the net effect of the mix of income earned in various tax jurisdictions that are subject to a wide range of income tax rates. We recognize interest expense and penalties related to income tax matters in income tax expense. For the three months ended September 30, 2018 and 2017 , we recognized the following amounts as income tax-related interest expense and penalties: Three Months Ended September 30, 2018 2017 Interest expense $ 3,037 $ 2,086 Penalties expense (recoveries) 492 81 Total $ 3,529 $ 2,167 The following amounts have been accrued on account of income tax-related interest expense and penalties: As of September 30, 2018 As of June 30, 2018 Interest expense accrued * $ 56,886 $ 54,058 Penalties accrued * $ 2,373 $ 2,438 * These balances have been included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets . We believe that it is reasonably possible that the gross unrecognized tax benefits, as of September 30, 2018 , could decrease tax expense in the next 12 months by $8.4 million , relating primarily to the expiration of competent authority relief and tax years becoming statute barred for purposes of future tax examinations by local taxing jurisdictions. Our four most significant tax jurisdictions are Canada, the United States, Luxembourg and Germany. Our tax filings remain subject to audits by applicable tax authorities for a certain length of time following the tax year to which those filings relate. The earliest fiscal years open for examination are 2012 for Germany, 2010 for the United States, 2012 for Luxembourg, and 2012 for Canada. We are subject to tax audits in all major taxing jurisdictions in which we operate and currently have tax audits open in Canada, the United States, France, Germany, India, and the United Kingdom. On a quarterly basis we assess the status of these examinations and the potential for adverse outcomes to determine the adequacy of the provision for income and other taxes. Statements regarding the United States and Canada audits are included in note 13 "Guarantees and Contingencies" . The timing of the resolution of income tax audits is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax audits in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. For more information relating to certain tax audits, please refer to note 13 "Guarantees and Contingencies" . As at September 30, 2018 , we have provided $31.3 million ( June 30, 2018 — $28.5 million ) in respect of both additional foreign taxes or deferred income tax liabilities for temporary differences related to the undistributed earnings of certain non-United States subsidiaries, and planned periodic repatriations from certain United States and German subsidiaries, that will be subject to withholding taxes upon distribution. We have not provided for additional foreign withholding taxes or deferred income tax liabilities related to undistributed earnings of all other non-Canadian subsidiaries, since such earnings are considered permanently invested in those subsidiaries, or are not subject to withholding taxes. It is not practicable to reasonably estimate the amount of additional deferred income tax liabilities or foreign withholding taxes that may be payable should these earnings be distributed in the future. The effective tax rate increased to a provision of 45.1% for the three months ended September 30, 2018 , compared to 42.7% for the three months ended September 30, 2017 . The increase in tax expense of $2.5 million was primarily due to an increase of $3.7 million relating to the tax impact of internal reorganizations of subsidiaries, offset by a decrease of $1.1 million resulting from the elimination of deferred charge amortization upon the adoption of ASU 2016-16. The remainder of the difference was due to normal course movements and non-material items. On December 22, 2017, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act, which significantly changed the existing US tax laws, including a reduction in the federal corporate tax rate from 35% to 21% , and the transition of US international taxation from a worldwide tax system to a partially territorial tax system. As a result of the enactment of the legislation, the Company incurred a provisional one-time tax expense of $19.0 million in the year ended June 30, 2018, primarily related to the transition tax on accumulated foreign earnings and the re-measurement of certain deferred tax assets and liabilities. There has been no change to this provisional amount for the three months ended September 30, 2018 . The portion of this anticipated increase to tax expense attributable to the transition tax is payable over a period of up to eight years . The $19.0 million is a provisional amount in respect of Alternative Minimum Tax (AMT), and transition tax on accumulated foreign earnings in accordance with Staff Accounting Bulletin 118 “Income Tax Accounting Implications of the Tax Cuts and Jobs Act” (SAB 118). The finalization of the provisional one-time amount is pending finalization of considerations related to undistributed foreign earnings and evaluating whether any portion of our existing AMT credit carryforwards are not expected to be refundable as a result of the repeal of corporate AMT, which may result in changes to the provisional amount during the SAB 118 measurement period. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT ASC Topic 820 “Fair Value Measurement” (Topic 820) defines fair value, establishes a framework for measuring fair value, and addresses disclosure requirements for fair value measurements. Fair value is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value, in this context, should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including our own credit risk. In addition to defining fair value and addressing disclosure requirements, Topic 820 establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. • Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis: Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of September 30, 2018 and June 30, 2018 : September 30, 2018 June 30, 2018 Fair Market Measurements using: Fair Market Measurements using: September 30, 2018 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs June 30, 2018 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Financial Liabilities: Derivative financial instrument liability (note 16) $ (138 ) N/A $ (138 ) N/A $ (1,319 ) N/A $ (1,319 ) N/A $ (138 ) N/A $ (138 ) N/A $ (1,319 ) N/A $ (1,319 ) N/A Our valuation techniques used to measure the fair values of the derivative instruments, the counterparty to which has high credit ratings, were derived from pricing models including discounted cash flow techniques, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for these instruments. Our discounted cash flow techniques use observable market inputs, such as, where applicable, foreign currency spot and forward rates. Our cash and cash equivalents, along with our accounts receivable and accounts payable and accrued liabilities balances, are measured and recognized in our Condensed Consolidated Financial Statements at an amount that approximates their fair value (a Level 2 measurement) due to their short maturities. If applicable, we will recognize transfers between levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three months ended September 30, 2018 and 2017 , we did not have any transfers between Level 1, Level 2 or Level 3. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets and liabilities at fair value on a nonrecurring basis. These assets and liabilities are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the three months ended September 30, 2018 and 2017 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Foreign Currency Forward Contracts We are engaged in hedging programs with various banks to limit the potential foreign exchange fluctuations incurred on future cash flows relating to a portion of our Canadian dollar payroll expenses. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian dollar on account of large costs that are incurred from our centralized Canadian operations, which are denominated in Canadian dollars. As part of our risk management strategy, we use foreign currency forward contracts to hedge portions of our payroll exposure with typical maturities of between one and twelve months . We do not use derivatives for speculative purposes. We have designated these transactions as cash flow hedges of forecasted transactions under ASC Topic 815 “Derivatives and Hedging” (Topic 815). As the critical terms of the hedging instrument and of the entire hedged forecasted transaction are the same, in accordance with Topic 815, we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within other comprehensive income. The fair value of the contracts, as of September 30, 2018 , is recorded within "Accounts payable and accrued liabilities”. As of September 30, 2018 , the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $46.7 million ( June 30, 2018 — $47.1 million ). Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance The effect of these derivative instruments on our Condensed Consolidated Financial Statements for the periods indicated below were as follows (amounts presented do not include any income tax effects). Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 15 "Fair Value Measurement") As of September 30, 2018 As of June 30, 2018 Derivatives Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ (138 ) $ (1,319 ) Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Three Months Ended September 30, 2018 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) Foreign currency forward contracts $ 683 Operating $ (498 ) N/A $ — Three Months Ended September 30, 2017 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Amount of Gain or Location of Amount of Gain or (Loss) Recognized in Foreign currency forward contracts $ 1,748 Operating $ 1,084 N/A $ — |
Special Charges (Recoveries)
Special Charges (Recoveries) | 3 Months Ended |
Sep. 30, 2018 | |
Restructuring, Settlement and Impairment Provisions [Abstract] | |
SPECIAL CHARGES (RECOVERIES) | SPECIAL CHARGES (RECOVERIES) Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Three Months Ended September 30, 2018 2017 Fiscal 2019 Restructuring Plan $ 20,246 $ — Fiscal 2018 Restructuring Plan 535 6,389 Fiscal 2017 Restructuring Plan 1,057 4,364 Restructuring Plans prior to Fiscal 2017 Restructuring Plan (503 ) (83 ) Acquisition-related costs 507 2,256 Other charges (recoveries) 1,469 5,105 Total $ 23,311 $ 18,031 Fiscal 2019 Restructuring Plan During Fiscal 2019, we began to implement restructuring activities to streamline our operations (Fiscal 2019 Restructuring Plan) to take further steps to improve our operational efficiency. The Fiscal 2019 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. As of September 30, 2018 , we expect total costs to be incurred in conjunction with the Fiscal 2019 Restructuring Plan to be approximately $29.0 million , of which $20.3 million has already been recorded within "Special charges (recoveries)" to date. A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2019 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ — $ — $ — Accruals and adjustments 10,110 10,136 20,246 Cash payments (2,594 ) (621 ) (3,215 ) Foreign exchange and other non-cash adjustments (15 ) (2,770 ) (2,785 ) Balance payable as at September 30, 2018 $ 7,501 $ 6,745 $ 14,246 Fiscal 2018 Restructuring Plan During Fiscal 2018 and in the context of our acquisitions of Covisint, Guidance and Hightail (each defined below), we began to implement restructuring activities to streamline our operations (collectively referred to as the Fiscal 2018 Restructuring Plan). The Fiscal 2018 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the plan, approximately $10.7 million has been recorded within "Special charges (recoveries)" to date. We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2018 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ 558 $ 1,165 $ 1,723 Accruals and adjustments — 535 535 Cash payments (240 ) (375 ) (615 ) Foreign exchange and other non-cash adjustments 11 (355 ) (344 ) Balance payable as at September 30, 2018 $ 329 $ 970 $ 1,299 Fiscal 2017 Restructuring Plan During Fiscal 2017 and in the context of acquisitions made in Fiscal 2017, we began to implement restructuring activities to streamline our operations (collectively referred to as the Fiscal 2017 Restructuring Plan ). The Fiscal 2017 Restructuring Plan charges relate to workforce reductions and facility consolidations. These charges require management to make certain judgments and estimates regarding the amount and timing of restructuring charges or recoveries. Our estimated liability could change subsequent to its recognition, requiring adjustments to the expense and the liability recorded. On a quarterly basis, we conduct an evaluation of the related liabilities and expenses and revise our assumptions and estimates as appropriate. Since the inception of the plan, $42.1 million has been recorded within "Special charges (recoveries)". We do not expect to incur any further significant charges relating to this plan. A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2017 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ 1,590 $ 3,431 $ 5,021 Accruals and adjustments — 1,057 1,057 Cash payments (108 ) (196 ) (304 ) Foreign exchange and other non-cash adjustments (3 ) (226 ) (229 ) Balance payable as at September 30, 2018 $ 1,479 $ 4,066 $ 5,545 Acquisition-related costs Included within "Special charges (recoveries)" for the three months ended September 30, 2018 are costs incurred directly in relation to acquisitions in the amount of $0.5 million ( three months ended September 30, 2017 — $2.3 million ). Other charges (recoveries) For the three months ended September 30, 2018 , "Other charges" include (i) $1.1 million relating to one-time system implementation costs and (ii) $0.3 million relating to other miscellaneous charges. For the three months ended September 30, 2017 , "Other charges" primarily include (i) $3.7 million relating to the implementation of a broad ERP system and (ii) $1.4 million |
Acquisitions
Acquisitions | 3 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Fiscal 2018 Acquisitions Acquisition of Hightail, Inc. (Hightail) On February 14, 2018, we acquired all of the equity interest in Hightail, a leading cloud service provider for file sharing and creative collaboration, for approximately $20.5 million . In accordance with ASC Topic 805 "Business Combinations" (Topic 805), this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our Enterprise Information Management (EIM) portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning February 14, 2018. Preliminary Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of February 14, 2018, are set forth below: Current assets $ 1,290 Non-current tangible assets 1,270 Intangible customer assets 12,900 Intangible technology assets 4,200 Liabilities assumed (6,418 ) Total identifiable net assets 13,242 Goodwill 7,293 Net assets acquired $ 20,535 The goodwill of $7.3 million is primarily attributable to the synergies expected to arise after the acquisition. No portion of this goodwill is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $5.2 million , which represents our estimate of the fair value of the contractual obligations assumed based on a preliminary valuation. In arriving at this fair value, we reduced the acquired company’s original carrying value by $2.0 million . The fair value of current assets acquired includes accounts receivable with a fair value of $0.7 million . The gross amount receivable was $0.8 million of which $0.1 million of this receivable is expected to be uncollectible. The finalization of the purchase price allocation is pending the finalization of the valuation of fair value for assets acquired and liabilities assumed, including tax balances. We expect to finalize this determination on or before December 31, 2018. Acquisition of Guidance Software, Inc. (Guidance) On September 14, 2017, we acquired all of the equity interest in Guidance, a leading provider of forensic security solutions, for approximately $240.5 million . In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning September 14, 2017. The following tables summarize the consideration paid for Guidance and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date: Cash consideration* $ 237,291 Guidance shares already owned by OpenText through open market purchases (at fair value) 3,247 Purchase consideration $ 240,538 * Inclusive of $2.3 million previously accrued, but since paid as of September 30, 2018 . See "Appraisal Proceedings" below for more information. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of September 14, 2017, are set forth below: Current assets (inclusive of cash acquired of $5.7 million) $ 24,744 Non-current tangible assets 11,583 Intangible customer assets 71,230 Intangible technology assets 51,851 Liabilities assumed (48,670 ) Total identifiable net assets 110,738 Goodwill 129,800 Net assets acquired $ 240,538 The goodwill of $129.8 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $1.9 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $26.6 million , which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $7.6 million . The fair value of current assets acquired includes accounts receivable with a fair value of $10.3 million . The gross amount receivable was $11.8 million of which $1.5 million of this receivable is expected to be uncollectible. An amount of $0.8 million , representing the mark to market gain on the shares we held in Guidance prior to the acquisition, was recorded to "Other income" in our Condensed Consolidated Statements of Income for the year ended June 30, 2018. Appraisal Proceedings Under Section 262 of the Delaware General Corporation Law, shareholders who did not tender their shares in connection with our tender offer were entitled to have their shares appraised by the Delaware Court of Chancery and receive payment of the “fair value” of such shares. On August 31, 2017 we received notice from the record holder of approximately 1,519,569 shares or 5% of the issued and outstanding Guidance shares as of the date of acquisition, demanding an appraisal of the fair value of Guidance shares as they believed the price we paid for Guidance shares was less than its fair value. We accrued $10.8 million in connection with these claims, which is equivalent to paying $7.10 per Guidance share, the amount these Guidance shareholders otherwise would have received had they tendered their shares in our offer. During the second quarter of Fiscal 2018, we paid $8.5 million to the trust account of dissenting shareholders’ attorney, leaving $2.3 million previously accrued. During the three months ended September 30, 2018, these amounts were settled and released. On August 27, 2018, the appraisal petition was dismissed with prejudice. Acquisition of Covisint Corporation (Covisint) On July 26, 2017, we acquired all of the equity interest in Covisint, a leading cloud platform for building Identity, Automotive, and Internet of Things applications, for approximately $102.8 million . In accordance with Topic 805, this acquisition was accounted for as a business combination. We believe this acquisition complements and extends our EIM portfolio. The results of operations of this acquisition have been consolidated with those of OpenText beginning July 26, 2017. Purchase Price Allocation The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 26, 2017, are set forth below: Current assets (inclusive of cash acquired of $31.5 million) $ 41,586 Non-current tangible assets 3,426 Intangible customer assets 36,600 Intangible technology assets 17,300 Liabilities assumed (23,033 ) Total identifiable net assets 75,879 Goodwill 26,905 Net assets acquired $ 102,784 The goodwill of $26.9 million is primarily attributable to the synergies expected to arise after the acquisition. Of this goodwill, approximately $26.8 million is expected to be deductible for tax purposes. Included in total identifiable net assets is acquired deferred revenue with a fair value of $12.2 million , which represents our estimate of the fair value of the contractual obligations assumed. In arriving at this fair value, we reduced the acquired company’s original carrying value by $4.6 million . The fair value of current assets acquired includes accounts receivable with a fair value of $7.8 million . The gross amount receivable was $7.9 million of which $0.1 million |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 3 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Three Months Ended September 30, 2018 2017 Cash paid during the period for interest $ 32,627 $ 30,466 Cash received during the period for interest $ 735 $ 294 Cash paid during the period for income taxes $ 8,367 $ 9,582 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share are computed by dividing net income, attributable to OpenText, by the weighted average number of Common Shares outstanding during the period. Diluted earnings per share are computed by dividing net income, attributable to OpenText, by the shares used in the calculation of basic earnings per share plus the dilutive effect of Common Share equivalents, such as stock options, using the treasury stock method. Common Share equivalents are excluded from the computation of diluted earnings per share if their effect is anti-dilutive. Three Months Ended September 30, 2018 2017 Basic earnings per share Net income attributable to OpenText $ 36,324 $ 36,596 Basic earnings per share attributable to OpenText $ 0.14 $ 0.14 Diluted earnings per share Net income attributable to OpenText $ 36,324 $ 36,596 Diluted earnings per share attributable to OpenText $ 0.13 $ 0.14 Weighted-average number of shares outstanding Basic 268,028 264,802 Effect of dilutive securities 1,359 1,433 Diluted 269,387 266,235 Excluded as anti-dilutive (1) 1,868 2,474 (1) |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Our procedure regarding the approval of any related party transaction requires that the material facts of such transaction be reviewed by the independent members of the Audit Committee and the transaction be approved by a majority of the independent members of the Audit Committee. The Audit Committee reviews all transactions in which we are, or will be, a participant and any related party has or will have a direct or indirect interest in the transaction. In determining whether to approve a related party transaction, the Audit Committee generally takes into account, among other facts it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent and nature of the related person’s interest in the transaction; the benefits to the Company of the proposed transaction; if applicable, the effects on a director’s independence; and if applicable, the availability of other sources of comparable services or products. During the three months ended September 30, 2018 , Mr. Stephen Sadler, a director, earned approximately $6 thousand ( three months ended September 30, 2017 — $0.7 million |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Cash Dividends As part of our quarterly, non-cumulative cash dividend program, we declared, on October 30, 2018 , a dividend of $0.1518 per Common Share. The record date for this dividend is November 30, 2018 and the payment date is December 20, 2018 . Future declarations of dividends and the establishment of future record and payment dates are subject to the final determination and discretion of our Board. Acquisition of Liaison Technologies Inc. On October 31, 2018 , we signed a definitive agreement to acquire Liaison Technologies Inc. for approximately $310 million |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements |
Accounting Pronouncements | Revenue Recognition Effective July 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606 "Revenue from Contracts with Customers" (Topic 606) using the cumulative effect approach. We applied the standard to contracts that were not completed as of the date of the initial adoption. Results for reporting periods commencing on July 1, 2018 are presented under the new revenue standard, while prior period results continue to be reported under the previous standard. As a result of this adoption, we recorded a net increase of approximately $30 million to retained earnings as of July 1, 2018 on the Condensed Consolidated Balance Sheets, with the following corresponding impacts: • A decrease to deferred revenues of approximately $31 million ; • A decrease to other assets of approximately $22 million in connection with lower deferred implementation costs; • An increase to other assets of approximately $14 million in connection with higher capitalized sales commission costs; • An increase in contract assets of approximately $18 million representing future billings in excess of revenues; and • An increase in net deferred tax liabilities of approximately $11 million . Please refer to Note 3 "Revenues" for additional information relating to Topic 606, including our updated revenue recognition policies. Additionally, certain prior period balances have been reclassified within other assets on the Condensed Consolidated Balance Sheets, to conform to the current period presentation as a result of this adoption. Please refer to Note 8 "Other Assets" for details. Income Taxes Effective July 1, 2018, we adopted Accounting Standards Update (ASU) No. 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory" (ASU 2016-16) which requires entities to recognize the income tax consequence of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We adopted ASU 2016-16 on a modified retrospective basis through a cumulative-effect adjustment to opening retained earnings. Results for reporting periods as of July 1, 2018 are presented under the new standard, while prior period results continue to be reported under the previous standard. As a result of this adoption, we recorded a net decrease of approximately $27 million to retained earnings as of July 1, 2018 on the Condensed Consolidated Balance Sheets, with the following corresponding impacts: • A decrease to deferred charges of approximately $38 million ; • An increase to deferred tax assets of approximately $8 million ; and • A decrease to deferred credits of approximately $3 million . There was no impact to the Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income or Condensed Consolidated Statements of Cash Flows as a result of this adoption. Restricted Cash Effective July 1, 2018, we adopted ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (ASU 2016-18), which requires amounts described as restricted cash and cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts in the statement of cash flows. We adopted ASU 2016-18 using the retrospective method. As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Cash Flows have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Net cash provided by operating activities $ 67,102 $ 144 $ 67,246 Cash, cash equivalents and restricted cash at beginning of period 443,357 2,853 446,210 Increase (decrease) in cash, cash equivalents and restricted cash during the period (66,967 ) 144 (66,823 ) Cash, cash equivalents and restricted cash at end of period $ 376,390 $ 2,997 $ 379,387 There was no impact to the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Income, or Condensed Consolidated Statements of Comprehensive Income as a result of this adoption. Pension Expense Effective July 1, 2018, we adopted ASU No. 2017-07, “Retirement Benefits - Presentation of Net Period Pension Costs (Topic 715)” (ASU 2017-07), which provides guidance on the capitalization, presentation and disclosure of net benefit costs related to postretirement benefit plans. Upon adoption, only service-related net periodic pension costs will be recorded within operating expense. All other non-service related net periodic pension costs will be classified under "Interest and other related expense" on our Condensed Consolidated Statements of Income. We adopted ASU 2017-07 on a retrospective basis. As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Income for the three months ended September 30, 2017 have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cost of revenues - Cloud services $ 84,330 $ (196 ) $ 84,134 Cost of revenues - Customer Support 32,791 (21 ) 32,770 Cost of revenues - Professional service and other 59,459 (31 ) 59,428 Total cost of revenues 223,500 (248 ) 223,252 Gross profit 417,187 248 417,435 Research and Development 77,629 (55 ) 77,574 Sales and Marketing 122,822 (207 ) 122,615 General and administrative 48,915 (13 ) 48,902 Total operating expense 330,064 (275 ) 329,789 Income from operations 87,123 523 87,646 Interest and other related expense, net (33,288 ) (523 ) (33,811 ) There was no change to net income or net earnings per share in any of the periods presented as a result of this adoption. Additionally, there was no impact to the Condensed Consolidated Balance Sheets, Consolidated Statements of Comprehensive Income, or Condensed Consolidated Statements of Cash Flows as a result of this adoption. Retirement Benefits In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-14 “Compensation-Retirement Benefits-Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans” (ASU 2018-14), which modifies the disclosure requirements for defined benefit pension plans and other post retirement plans. ASU 2018-14 is effective for us in the first quarter of our fiscal year ending June 30, 2022. We are currently evaluating the impact of our pending adoption of ASU 2018-14 on our consolidated financial statements. Leases |
Revenues | Incremental costs of obtaining a contract include only those costs that we incur to obtain a contract that we would not have incurred if the contract had not been obtained, such as sales commissions. We have determined that certain of our commission programs meet the requirements to be capitalized. Some commission programs are not subject to capitalization as the commission expense is paid and recognized as the related revenue is recognized. In assessing costs to obtain a contract, we apply a practical expedient that allows us to assess our incremental costs on a portfolio of contracts with similar characteristics instead of assessing the incremental costs on each individual contract. We do not expect the financial statement effects of applying this practical expedient to the portfolio of contracts to be materially different than if we were to apply the new standard to each individual contract. We pay commissions on the sale of new customer contracts as well as for renewals of existing contracts to the extent the renewals generate incremental revenue. Commissions paid on renewal contracts are limited to the incremental new revenue and therefore these payments are not commensurate with the commission paid on the original sale. We allocate commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. Commissions allocated to the license performance obligation are expensed at the time the license revenue is recognized. Commissions allocated to professional service performance obligations are expensed as incurred, as these contracts are generally for one year or less and we apply a practical expedient to expense costs as incurred if the amortization period would have been one year or less. Commission allocated to maintenance, managed services, on-going hosting arrangements or other recurring services, are capitalized and amortized consistent with the pattern of transfer to the customer of the services over the period expected to benefit from the commission payment. As commissions paid on renewals are not commensurate with the original sale, the period of benefit considers anticipated renewals. The benefit period is estimated to be approximately six years which is based on our customer contracts and the estimated life of our technology. Expenses for incremental costs associated with obtaining a contract are recorded within sales and marketing expense in the Condensed Consolidated Statements of Income We have four revenue streams: license, cloud services and subscriptions, customer support, and professional service and other. License revenue Our license revenue can be broadly categorized as perpetual licenses, term licenses and subscription licenses, all of which are deployed on the customer’s premises (on-premise). Perpetual licenses: We sell perpetual licenses which provide customers the right to use software for an indefinite period of time in exchange for a one-time license fee, which is generally paid at contract inception. Our perpetual licenses provide a right to use intellectual property (IP) that is functional in nature and have significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when control has been transferred to the customer, which normally occurs once software activation keys have been made available for download. Term licenses and Subscription licenses: We sell both term and subscription licenses which provide customers the right to use software for a specified period in exchange for a fee, which may be paid at contract inception or paid in installments over the period of the contract. Like perpetual licenses, both our term licenses and subscription licenses are functional IP that have significant stand-alone functionality. Accordingly, for both term and subscription licenses, revenue is recognized at the point-in-time when the customer is able to use and benefit from the software, which is normally once software activation keys have been made available for download at the commencement of the term. Cloud services and subscriptions revenue Cloud services and subscriptions revenue are from hosting arrangements where in connection with the licensing of software, the end user doesn’t take possession of the software, as well as from end-to-end fully outsourced business-to-business (B2B) integration solutions to our customers (collectively referred to as cloud arrangements). The software application resides on our hardware or that of a third party, and the customer accesses and uses the software on an as-needed basis via an identified line. Our cloud arrangements can be broadly categorized as "platform as a service" (PaaS), "software as a service" (SaaS), cloud subscriptions and managed services. PaaS/ SaaS/ Cloud Subscriptions (collectively referred to here as cloud-based solutions): We offer cloud-based solutions that provide customers the right to access our software through the internet. Our cloud-based solutions represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customer’s discretion. The payment for cloud-based solutions may be received either at inception of the arrangement, or over the term of the arrangement. These cloud-based solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such we recognize revenue for these cloud-based solutions ratably over the term of the contractual agreement. For example, revenue related to cloud-based solutions that are provided on a usage basis, such as the number of users, is recognized based on a customer’s utilization of the services in a given period. Additionally, a software license is present in a cloud-based solutions arrangement if all of the following criteria are met: (i) The customer has the contractual right to take possession of the software at any time without significant penalty; and (ii) It is feasible for the customer to host the software independent of us. In these cases where a software license is present in a cloud-based solutions arrangement it is assessed to determine if it is distinct from the cloud-based solutions arrangement. The revenue allocated to the distinct software license would be recognized at the point in time the software license is transferred to the customer, whereas the revenue allocated to the hosting performance obligation would be recognized ratably on a monthly basis over the contractual term unless evidence suggests that revenue is earned, or obligations are fulfilled in a different pattern over the contractual term of the arrangement. Managed services: We provide comprehensive B2B process outsourcing services for all day-to-day operations of a customers’ B2B integration program. Customers using these managed services are not permitted to take possession of our software and the contract is for a defined period, where customers pay a monthly or quarterly fee. Our performance obligation is satisfied as we provide services of operating and managing a customer's electronic data interchange (EDI) environment. Revenue relating to these services is recognized using an output method based on the expected level of service we will provide over the term of the contract. In connection with cloud subscription and managed service contracts, we often agree to perform a variety of services before the customer goes live, such as for example, converting and migrating customer data, building interfaces and providing training. These services are considered an outsourced suite of professional services which can involve certain project-based activities. These services can be provided at the initiation of a contract, during the implementation or on an ongoing basis as part of the customer life cycle. These services can be charged separately on a fixed fee or time and materials basis, or the costs associated may be recovered as part of the ongoing cloud subscription or managed services fee. These outsourced professional services are considered to be distinct from the ongoing hosting services and represent a separate performance obligation within our cloud subscription or managed services arrangements. The obligation to provide outsourced professional services is satisfied over time, with the customer simultaneously receiving and consuming the benefits as we satisfy our performance obligations. For outsourced professional services, we recognize revenue by measuring progress toward the satisfaction of our performance obligation. Progress for services that are contracted for a fixed price is generally measured based on hours incurred as a portion of total estimated hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we recognize revenue at that amount. Customer support revenue Customer support revenue is associated with perpetual, term license and on-premise subscription arrangements. As customer support is not critical to the customer's ability to derive benefit from its right to use our software, customer support is considered as a distinct performance obligation when sold together in a bundled arrangement along with the software. Customer support consists primarily of technical support and the provision of unspecified updates and upgrades on a when-and-if-available basis. Customer support for perpetual licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for term and subscription licenses is renewable concurrently with such licenses for the same duration of time. Payments for customer support are generally made at the inception of the contract term or in installments over the term of the maintenance period. Our customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. As the elements of customer support are delivered concurrently and have the same pattern of transfer, customer support is accounted for as a single performance obligation. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them, and that any unspecified upgrades or unspecified future products developed by us will be made available. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the maintenance term, in line with how we believe services are provided. Professional service and other revenue Our professional services, when offered along with software licenses, consists primarily of technical services and training services. Technical services may include installation, customization, implementation or consulting services. Training services may include access to online modules or delivering a training package customized to the customer’s needs. At the customer’s discretion, we may offer one, all, or a mix of these services. Payment for professional services is generally a fixed fee or is a fee based on time and materials. Professional services can be arranged in the same contract as the software license or in a separate contract. As our professional services do not significantly change the functionality of the license and our customers can benefit from our professional services on their own or together with other readily available resources, we consider professional services as distinct within the context of the contract. Professional service revenue is recognized over time so long as: (i) the customer simultaneously receives and consumes the benefits as we perform them, (ii) our performance creates or enhances an asset the customer controls as we perform, and (iii) our performance does not create an asset with alternative use and we have enforceable right to payment. If all of the above criteria are met, we use an input-based measure of progress for recognizing professional service revenue. For example we may consider total labor hours incurred compared to total expected labor hours. As a practical expedient, when we invoice a customer at an amount that corresponds directly with the value to the customer of our performance to date, we will recognize revenue at that amount. Material rights To the extent that we grant our customer an option to acquire additional products or services in one of our arrangements, we will account for the option as a distinct performance obligation in the contract only if the option provides a material right to the customer that the customer would not receive without entering into the contract. For example if we give the customer an option to acquire additional goods or services in the future at a price that is significantly lower than the current price, this would be a material right as it allows the customer to, in effect, pay in advance for the option to purchase future products or services. If a material right exists in one of our contracts then revenue allocated to the option is deferred and we would recognize revenue only when those future products or services are transferred or when the option expires. Based on history, our contracts do not typically contain material rights and when they do, the material right is not significant to our consolidated financial statements. Arrangements with multiple performance obligations Our contracts generally contain more than one of the products and services listed above. Determining whether goods and services are considered distinct performance obligations that should be accounted for separately or as a single performance obligation may require significant judgment, specifically when assessing whether both of the following two criteria are met: • the customer can benefit from the product or service either on its own or together with other resources that are readily available to the customer; and • our promise to transfer the product or service to the customer is separately identifiable from other promises in the contract. If these criteria are not met, we determine an appropriate measure of progress based on the nature of our overall promise for the single performance obligation. If these criteria are met, each product or service is separately accounted for as a distinct performance obligation and the total transaction price is allocated to each performance obligation on a relative standalone selling price (SSP) basis. Standalone selling price The SSP reflects the price we would charge for a specific product or service if it was sold separately in similar circumstances and to similar customers. In most cases we are able to establish the SSP based on observable data. We typically establish a narrow SSP range for our products and services and assess this range on a periodic basis or when material changes in facts and circumstances warrant a review. If the SSP is not directly observable, then we estimate the amount using either the expected cost plus a margin or residual approach. Estimating SSP is a formal process whereby management considers multiple factors including, but not limited to, geographic or regional specific factors, competitive positioning, internal costs, profit objectives, and pricing practices. Transaction Price Allocation In bundled arrangements, where we have more than one distinct performance obligation, we must allocate the transaction price to each performance obligation based on its relative SSP. However, in certain bundled arrangements, the SSP may not always be directly observable. For instance, in bundled arrangements with license and customer support, we allocate the transaction price between the license and customer support performance obligations using the residual approach because we have determined that the SSP for certain goods and services in these arrangements are highly variable. We use the residual approach only for our license arrangements. When the SSP is observable but contractual pricing does not fall within our established SSP range, then an adjustment is required and we will allocate the transaction price between license and customer support at a constant ratio reflecting the mid-point of the established SSP range. When two or more contracts are entered into at or near the same time with the same customer, we evaluate the facts and circumstances associated with the negotiation of those contracts. Where the contracts are negotiated as a package, we will account for them as a single arrangement and allocate the consideration for the combined contracts among the performance obligations accordingly. Sales to resellers We execute certain sales contracts through resellers, distributors and channel partners (collectively referred to as resellers). For these type of agreements, we assess whether we are considered the principal or the agent in the arrangement. We consider factors such as, but not limited to, whether or not the reseller has the ability to set the price for which they sell our software products to end users and whether or not resellers distribution rights are limited such that any potential sales are subject to OpenText’s review and approval before delivery of the software product can be made. If we determine that we are the principal in the arrangement, then revenue is recognized based on the transaction price for the sale of the software product to the end user at the gross amount. If that is not known, then the net amount received from the reseller is the transaction price. If we determine that we are the agent in the agreement, then revenue is recognized based on the transaction price for the sale of the software product to the reseller, less any applicable commissions paid or discounts or rebates, if offered. Costs or commissions paid to the reseller would be recognized as a reduction of revenue unless we received a distinct good or service in return. Similarly, any discounts or rebates offered by the reseller would be recognized as a reduction of revenue. Typically, we conclude that we are the principal in our reseller agreements, as we have control over the service and products prior to being transferred to the end customer. We also assess the creditworthiness of each reseller and if they are newly formed, undercapitalized or in financial difficulty, we defer any revenues expected to emanate from such reseller and recognize revenue only when cash is received, and all other revenue recognition criteria under Topic 606 are met. Rights of return and other incentives We do not generally offer rights of return or any other incentives such as concessions, product rotation, or price protection and, therefore, do not provide for or make estimates of rights of return and similar incentives. In some contracts, however, discounts may be offered to the customer for future software purchases and other additional products or services. Such arrangements grant the customer an option to acquire additional goods or services in the future at a discount and therefore are evaluated under guidance related to “material rights” as discussed above. Other policies Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice. In certain arrangements, we will receive payment from a customer either before or after the performance obligation to which the invoice relates has been satisfied. As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less. On that basis, our contracts for license and maintenance typically do not contain a significant financing component. Our managed services contracts may not include an upfront charge for outsourced professional services performed as part of an implementation and are recovered through an ongoing fee. Therefore, these contracts may be expected to have a financing component associated with revenue being recognized in advance of billings. We may modify contracts to offer customers additional products or services. The additional products and services will be considered distinct from those products or services transferred to the customer before the modification and will be accounted for as a separate contract. We evaluate whether the price for the additional products and services reflects the SSP adjusted as appropriate for facts and circumstances applicable to that contract. In determining whether an adjustment is appropriate, we evaluate whether the incremental consideration is consistent with the prices previously paid by the customer or similar customers. Performance Obligations A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) A contract asset will be recorded if we have recognized revenue but do not have an unconditional right to the related consideration from the customer. This will be the case if implementation services offered in a cloud arrangement for example, are identified as a separate performance obligation and are provided to a customer prior to us being able to bill the customer. In addition, a contract asset may arise in relation to subscription licenses if the license revenue that is recognized upfront exceeds the amount that we are able to invoice the customer at that time. When we perform services, such as during the design and build phase of a service contract, the right to consideration is typically subject to milestone completion or customer acceptance and |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Income for the three months ended September 30, 2017 have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cost of revenues - Cloud services $ 84,330 $ (196 ) $ 84,134 Cost of revenues - Customer Support 32,791 (21 ) 32,770 Cost of revenues - Professional service and other 59,459 (31 ) 59,428 Total cost of revenues 223,500 (248 ) 223,252 Gross profit 417,187 248 417,435 Research and Development 77,629 (55 ) 77,574 Sales and Marketing 122,822 (207 ) 122,615 General and administrative 48,915 (13 ) 48,902 Total operating expense 330,064 (275 ) 329,789 Income from operations 87,123 523 87,646 Interest and other related expense, net (33,288 ) (523 ) (33,811 ) Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Net cash provided by operating activities $ 67,102 $ 144 $ 67,246 Cash, cash equivalents and restricted cash at beginning of period 443,357 2,853 446,210 Increase (decrease) in cash, cash equivalents and restricted cash during the period (66,967 ) 144 (66,823 ) Cash, cash equivalents and restricted cash at end of period $ 376,390 $ 2,997 $ 379,387 Condensed Consolidated Balance Sheet As of September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect ASSETS Contract assets $ 8,767 $ (8,767 ) $ — Prepaid expenses and other current assets 80,624 6,481 87,105 Total current assets 1,325,106 (2,286 ) 1,322,820 Long-term contract assets 12,041 (12,041 ) — Deferred tax assets 1,106,377 8,004 1,114,381 Other assets 116,536 (179 ) 116,357 Total assets $ 7,619,048 $ (6,502 ) $ 7,612,546 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 252,079 $ (2 ) $ 252,077 Deferred revenues 582,139 11,011 593,150 Total current liabilities 875,273 11,009 886,282 Long-term liabilities: Deferred revenues 43,585 20,000 63,585 Deferred tax liabilities 74,328 (3,934 ) 70,394 Total long-term liabilities 3,016,745 16,066 3,032,811 Shareholders’ equity: Accumulated other comprehensive income 32,256 462 32,718 Retained earnings 1,993,099 (34,039 ) 1,959,060 Total OpenText shareholders' equity 3,725,907 (33,577 ) 3,692,330 Non-controlling interests 1,123 — 1,123 Total shareholders’ equity 3,727,030 (33,577 ) 3,693,453 Total liabilities and shareholders’ equity $ 7,619,048 $ (6,502 ) $ 7,612,546 Condensed Consolidated Statements of Income Three Months Ended September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect Revenues: License $ 76,887 $ (2,601 ) $ 74,286 Cloud services and subscriptions 208,083 (535 ) 207,548 Customer support 311,551 (583 ) 310,968 Professional service and other 70,636 (54 ) 70,582 Total revenues 667,157 (3,773 ) 663,384 Cost of revenues: Cloud services and subscriptions 87,703 467 88,170 Total cost of revenues 226,313 467 226,780 Gross profit 440,844 (4,240 ) 436,604 Operating expenses: Sales and marketing 120,182 1,107 121,289 Total operating expenses 341,617 1,107 342,724 Income from operations 99,227 (5,347 ) 93,880 Interest and other related expense, net (34,531 ) (159 ) (34,690 ) Income before income taxes 66,218 (5,506 ) 60,712 Provision for (recovery of) income taxes 29,850 (1,253 ) 28,597 Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Condensed Consolidated Statement of Cash Flows Three Months Ended September 30, 2018 As reported under Topic 606 Adjustments Proforma as if Topic 605 was in effect Cash flows from operating activities: Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Adjustments to reconcile net income to net cash provided by operating activities: Deferred taxes 7,769 (1,293 ) 6,476 Changes in operating assets and liabilities: Accounts receivable 73,875 (2,281 ) 71,594 Contract assets (5,346 ) 5,346 — Prepaid expenses and other current assets 9,732 1,213 10,945 Income taxes and deferred charges and credits 12,561 36 12,597 Accounts payable and accrued liabilities (40,001 ) 75 (39,926 ) Deferred revenue (57,403 ) 703 (56,700 ) Other assets 2,444 454 2,898 Net cash provided by operating activities $ 171,401 $ — $ 171,401 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Changes in Carrying Amount of Allowance For Doubtful Accounts | Balance as of June 30, 2018 $ 9,741 Bad debt expense 2,999 Write-off /adjustments 230 Balance as of September 30, 2018 $ 12,970 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | A summary of our typical performance obligations and when the obligations are satisfied are as follows: Performance Obligation When Performance Obligation is Typically Satisfied License revenue: Software licenses (Perpetual,Term, Subscription) When software activation keys have been made available for download (point in time) Cloud services and subscriptions revenue: Outsourced Professional Services As the services are provided (over time) Managed Services / Ongoing Hosting Over the contract term, beginning on the date that service is made available (i.e. "Go live") to the customer (over time) Customer support revenue: When and if available updates and upgrades and technical support Ratable over the course of the service term (over time) Professional service and other revenue: Professional services As the services are provided (over time) |
Disaggregation of Revenue | The following table disaggregates our revenue by significant geographic area, based on the location of our end customer, and by type of performance obligation and timing of revenue recognition for the periods indicated: Three Months Ended September 30, 2018 Total Revenues by Geography: Americas (1) $ 389,340 EMEA (2) 214,475 Asia Pacific (3) 63,342 Total Revenues $ 667,157 Total Revenues by Type of Performance Obligation: Recurring revenue Cloud services and subscriptions revenue $ 208,083 Customer support revenue 311,551 Total recurring revenues $ 519,634 License revenue (perpetual, term and subscriptions) 76,887 Professional service and other revenue 70,636 Total revenues $ 667,157 Total Revenues by Timing of Revenue Recognition Point in time 76,887 Over time (including professional service and other revenue) 590,270 Total revenues $ 667,157 (1) Americas consists of countries in North, Central and South America. (2) EMEA primarily consists of countries in Europe, the Middle East and Africa. (3) |
Contract with Customer, Asset and Liability | The balance for our contract assets and contract liabilities (i.e. deferred revenues) for the periods indicated below were as follows: As of September 30, 2018 As of July 1, 2018 Short-term contract assets $ 8,767 $ 5,474 Long-term contract assets $ 12,041 $ 12,382 Short-term deferred revenue $ 582,139 $ 618,197 Long-term deferred revenue $ 43,585 $ 64,743 |
Capitalized Contract Cost | The following table summarizes the changes since July 1, 2018 : Capitalized costs to obtain a contract as of July 1, 2018 $ 35,151 New capitalized costs incurred 3,179 Amortization of capitalized costs (2,271 ) Capitalized costs to obtain a contract as of September 30, 2018 $ 36,059 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | As a result, certain prior period comparative figures in the Condensed Consolidated Statements of Income for the three months ended September 30, 2017 have been adjusted to conform to current period presentation as follows: Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Cost of revenues - Cloud services $ 84,330 $ (196 ) $ 84,134 Cost of revenues - Customer Support 32,791 (21 ) 32,770 Cost of revenues - Professional service and other 59,459 (31 ) 59,428 Total cost of revenues 223,500 (248 ) 223,252 Gross profit 417,187 248 417,435 Research and Development 77,629 (55 ) 77,574 Sales and Marketing 122,822 (207 ) 122,615 General and administrative 48,915 (13 ) 48,902 Total operating expense 330,064 (275 ) 329,789 Income from operations 87,123 523 87,646 Interest and other related expense, net (33,288 ) (523 ) (33,811 ) Three Months Ended September 30, 2017 As Previously Reported Adjustments As Adjusted Net cash provided by operating activities $ 67,102 $ 144 $ 67,246 Cash, cash equivalents and restricted cash at beginning of period 443,357 2,853 446,210 Increase (decrease) in cash, cash equivalents and restricted cash during the period (66,967 ) 144 (66,823 ) Cash, cash equivalents and restricted cash at end of period $ 376,390 $ 2,997 $ 379,387 Condensed Consolidated Balance Sheet As of September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect ASSETS Contract assets $ 8,767 $ (8,767 ) $ — Prepaid expenses and other current assets 80,624 6,481 87,105 Total current assets 1,325,106 (2,286 ) 1,322,820 Long-term contract assets 12,041 (12,041 ) — Deferred tax assets 1,106,377 8,004 1,114,381 Other assets 116,536 (179 ) 116,357 Total assets $ 7,619,048 $ (6,502 ) $ 7,612,546 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 252,079 $ (2 ) $ 252,077 Deferred revenues 582,139 11,011 593,150 Total current liabilities 875,273 11,009 886,282 Long-term liabilities: Deferred revenues 43,585 20,000 63,585 Deferred tax liabilities 74,328 (3,934 ) 70,394 Total long-term liabilities 3,016,745 16,066 3,032,811 Shareholders’ equity: Accumulated other comprehensive income 32,256 462 32,718 Retained earnings 1,993,099 (34,039 ) 1,959,060 Total OpenText shareholders' equity 3,725,907 (33,577 ) 3,692,330 Non-controlling interests 1,123 — 1,123 Total shareholders’ equity 3,727,030 (33,577 ) 3,693,453 Total liabilities and shareholders’ equity $ 7,619,048 $ (6,502 ) $ 7,612,546 Condensed Consolidated Statements of Income Three Months Ended September 30, 2018 As reported under Adjustments Proforma as if Topic 605 was in effect Revenues: License $ 76,887 $ (2,601 ) $ 74,286 Cloud services and subscriptions 208,083 (535 ) 207,548 Customer support 311,551 (583 ) 310,968 Professional service and other 70,636 (54 ) 70,582 Total revenues 667,157 (3,773 ) 663,384 Cost of revenues: Cloud services and subscriptions 87,703 467 88,170 Total cost of revenues 226,313 467 226,780 Gross profit 440,844 (4,240 ) 436,604 Operating expenses: Sales and marketing 120,182 1,107 121,289 Total operating expenses 341,617 1,107 342,724 Income from operations 99,227 (5,347 ) 93,880 Interest and other related expense, net (34,531 ) (159 ) (34,690 ) Income before income taxes 66,218 (5,506 ) 60,712 Provision for (recovery of) income taxes 29,850 (1,253 ) 28,597 Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Condensed Consolidated Statement of Cash Flows Three Months Ended September 30, 2018 As reported under Topic 606 Adjustments Proforma as if Topic 605 was in effect Cash flows from operating activities: Net income for the period $ 36,368 $ (4,253 ) $ 32,115 Adjustments to reconcile net income to net cash provided by operating activities: Deferred taxes 7,769 (1,293 ) 6,476 Changes in operating assets and liabilities: Accounts receivable 73,875 (2,281 ) 71,594 Contract assets (5,346 ) 5,346 — Prepaid expenses and other current assets 9,732 1,213 10,945 Income taxes and deferred charges and credits 12,561 36 12,597 Accounts payable and accrued liabilities (40,001 ) 75 (39,926 ) Deferred revenue (57,403 ) 703 (56,700 ) Other assets 2,444 454 2,898 Net cash provided by operating activities $ 171,401 $ — $ 171,401 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment by Type | As of September 30, 2018 Cost Accumulated Depreciation Net Furniture and fixtures $ 36,481 $ (22,085 ) $ 14,396 Office equipment 1,809 (722 ) 1,087 Computer hardware 207,047 (142,033 ) 65,014 Computer software 98,492 (63,220 ) 35,272 Capitalized software development costs 84,402 (45,074 ) 39,328 Leasehold improvements 109,145 (54,385 ) 54,760 Land and buildings 47,797 (11,154 ) 36,643 Total $ 585,173 $ (338,673 ) $ 246,500 As of June 30, 2018 Cost Accumulated Depreciation Net Furniture and fixtures $ 34,647 $ (21,488 ) $ 13,159 Office equipment 1,467 (687 ) 780 Computer hardware 207,381 (134,906 ) 72,475 Computer software 97,653 (59,485 ) 38,168 Capitalized software development costs 81,073 (41,556 ) 39,517 Leasehold improvements 118,200 (55,172 ) 63,028 Land and buildings 47,880 (10,802 ) 37,078 Total $ 588,301 $ (324,096 ) $ 264,205 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes In Carrying Amount of Goodwill | The following table summarizes the changes in goodwill since June 30, 2018: Balance as of June 30, 2018 $ 3,580,129 Adjustments on account of foreign exchange (1,488 ) Balance as of September 30, 2018 $ 3,578,641 |
Acquired Intangible Assets (Tab
Acquired Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Calculation of Acquired Intangibles by Asset Class | As of September 30, 2018 Cost Accumulated Amortization Net Technology assets $ 985,226 $ (487,251 ) $ 497,975 Customer assets 1,301,734 (596,425 ) 705,309 Total $ 2,286,960 $ (1,083,676 ) $ 1,203,284 As of June 30, 2018 Cost Accumulated Amortization Net Technology assets $ 985,226 $ (439,774 ) $ 545,452 Customer assets 1,348,510 (597,325 ) 751,185 Total $ 2,333,736 $ (1,037,099 ) $ 1,296,637 |
Calculation of Estimated Future Amortization Expense | The following table shows the estimated future amortization expense for the fiscal years indicated. This calculation assumes no future adjustments to acquired intangible assets: Fiscal years ending June 30, 2019 (nine months ended June 30) $ 259,048 2020 280,888 2021 190,763 2022 177,208 2023 115,015 2024 and beyond 180,362 Total $ 1,203,284 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Components of Other Assets | As of September 30, 2018 As of June 30, 2018 Deposits and restricted cash $ 13,775 $ 9,479 Deferred implementation costs — 13,740 Capitalized costs to obtain a contract 26,987 13,027 Investments 47,109 49,635 Long-term prepaid expenses and other long-term assets 28,665 25,386 Total $ 116,536 $ 111,267 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Current Liabilities | Accounts payable and accrued liabilities are comprised of the following: As of September 30, 2018 As of June 30, 2018 Accounts payable—trade $ 21,176 $ 41,722 Accrued salaries and commissions 84,918 118,024 Accrued liabilities 100,457 108,903 Accrued interest on Senior Notes 26,021 24,786 Amounts payable in respect of restructuring and other Special charges 17,712 5,622 Asset retirement obligations 1,795 3,097 Total $ 252,079 $ 302,154 |
Schedule of Long-Term Accrued Liabilities | As of September 30, 2018 As of June 30, 2018 Amounts payable in respect of restructuring and other Special charges $ 5,740 $ 4,362 Other accrued liabilities* 31,965 35,874 Asset retirement obligations 13,463 12,591 Total $ 51,168 $ 52,827 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following: As of September 30, 2018 As of June 30, 2018 Total debt Senior Notes 2026 $ 850,000 $ 850,000 Senior Notes 2023 800,000 800,000 Term Loan B 995,000 997,500 Total principal payments due 2,645,000 2,647,500 Premium on Senior Notes 2026 5,866 6,018 Debt issuance costs (31,739 ) (32,995 ) Total amount outstanding 2,619,127 2,620,523 Less: Current portion of long-term debt Term Loan B 10,000 10,000 Total current portion of long-term debt 10,000 10,000 Non-current portion of long-term debt $ 2,609,127 $ 2,610,523 |
Pension Plans and Other Post _2
Pension Plans and Other Post Retirement Benefits (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plan and Long-Term Employee Benefit Obligations | The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH ( GXS GER ), GXS Philippines, Inc. ( GXS PHP ) and other plans as of September 30, 2018 and June 30, 2018 : As of September 30, 2018 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 32,668 $ 673 $ 31,995 GXS GER defined benefit plan 25,206 1,039 24,167 GXS PHP defined benefit plan 3,431 138 3,293 Other plans 5,698 423 5,275 Total $ 67,003 $ 2,273 $ 64,730 As of June 30, 2018 Total benefit obligation Current portion of benefit obligation* Non-current portion of benefit obligation CDT defined benefit plan $ 32,651 $ 655 $ 31,996 GXS GER defined benefit plan 25,382 1,027 24,355 GXS PHP defined benefit plan 3,853 138 3,715 Other plans 6,095 442 5,653 Total $ 67,981 $ 2,262 $ 65,719 * The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Condensed Consolidated Balance Sheets (see note 9 "Accounts Payable and Accrued Liabilities"). |
Schedule of the Change in the Benefit Obligation of Defined Benefit Plan | The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated: As of September 30, 2018 As of June 30, 2018 CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Benefit obligation—beginning of period $ 32,651 $ 25,382 $ 3,853 $ 61,886 $ 28,881 $ 23,730 $ 4,495 $ 57,106 Service cost 141 145 176 462 501 472 832 1,805 Interest cost 165 126 68 359 607 489 241 1,337 Benefits paid (154 ) (253 ) (34 ) (441 ) (580 ) (974 ) (141 ) (1,695 ) Actuarial (gain) loss (477 ) (460 ) (575 ) (1,512 ) 2,442 997 (1,313 ) 2,126 Foreign exchange (gain) loss 342 266 (57 ) 551 800 668 (261 ) 1,207 Benefit obligation—end of period 32,668 25,206 3,431 61,305 32,651 25,382 3,853 61,886 Less: Current portion (673 ) (1,039 ) (138 ) (1,850 ) (655 ) (1,027 ) (138 ) (1,820 ) Non-current portion of benefit obligation $ 31,995 $ 24,167 $ 3,293 $ 59,455 $ 31,996 $ 24,355 $ 3,715 $ 60,066 |
Components of Net Pension Expense for Pension Plan | The following are details of net pension expense relating to the following pension plans: Three Months Ended September 30, 2018 2017 Pension expense: CDT GXS GER GXS PHP Total CDT GXS GER GXS PHP Total Service cost $ 141 $ 145 $ 176 $ 462 $ 124 $ 117 $ 219 $ 460 Interest cost 165 126 68 359 150 121 55 326 Amortization of actuarial (gains) and losses 176 33 (140 ) 69 134 18 (61 ) 91 Net pension expense $ 482 $ 304 $ 104 $ 890 $ 408 $ 256 $ 213 $ 877 |
Schedule of Weighted-Average Key Assumptions Used for CDT Pension Plan | In determining the fair value of the pension plan benefit obligations as of September 30, 2018 and June 30, 2018 , respectively, we used the following weighted-average key assumptions: As of September 30, 2018 As of June 30, 2018 CDT GXS GER GXS PHP CDT GXS GER GXS PHP Assumptions: Salary increases 3.50% 3.50% 6.50% 3.50% 3.50% 6.50% Pension increases 2.00% 2.00% N/A 2.00% 2.00% N/A Discount rate 2.08% 2.08% 8.25% 2.00% 2.00% 7.25% Normal retirement age 65 65-67 60 65 65-67 60 Employee fluctuation rate: to age 20 —% —% 12.19% —% —% 12.19% to age 25 —% —% 16.58% —% —% 16.58% to age 30 1.00% —% 13.97% 1.00% —% 13.97% to age 35 0.50% —% 10.77% 0.50% —% 10.77% to age 40 —% —% 7.39% —% —% 7.39% to age 45 0.50% —% 3.28% 0.50% —% 3.28% to age 50 0.50% —% —% 0.50% —% —% from age 51 1.00% —% —% 1.00% —% —% |
Anticipated Pension Payments Under Pension Plan | Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows: Fiscal years ending June 30, CDT GXS GER GXS PHP 2019 (nine months ended June 30) $ 497 $ 778 $ 103 2020 707 1,043 115 2021 808 1,072 147 2022 899 1,080 292 2023 1,010 1,082 243 2024 to 2028 6,071 5,563 1,529 Total $ 9,992 $ 10,618 $ 2,429 |
Share Capital, Option Plans a_2
Share Capital, Option Plans and Share-Based Payments (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-based Compensation Costs | Total share-based compensation expense for the periods indicated below is detailed as follows: Three Months Ended September 30, 2018 2017 Stock options $ 2,602 $ 3,302 Performance Share Units (issued under LTIP) 843 1,035 Restricted Share Units (issued under LTIP) 1,385 1,886 Restricted Share Units (other) 81 479 Deferred Share Units (directors) 661 547 Employee Share Purchase Plan 983 986 Total share-based compensation expense $ 6,555 $ 8,235 |
Summary of Option Activity | A summary of activity under our stock option plans for the three months ended September 30, 2018 is as follows: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value ($’000s) Outstanding at June 30, 2018 7,078,435 $ 28.41 Granted 750,220 39.27 Exercised (494,134 ) 25.16 Forfeited or expired (155,148 ) 32.05 Outstanding at September 30, 2018 7,179,373 $ 29.69 4.49 $ 57,829 Exercisable at September 30, 2018 2,570,581 $ 25.26 3.14 $ 32,850 |
Schedule of Weighted-Average Fair Value of Options and Weighted-Average Assumptions Used | For the periods indicated, the weighted-average fair value of options and weighted-average assumptions were as follows: Three Months Ended September 30, 2018 2017 Weighted–average fair value of options granted $ 8.73 $ 7.44 Weighted-average assumptions used: Expected volatility 26.07 % 27.35 % Risk–free interest rate 2.80 % 1.74 % Expected dividend yield 1.45 % 1.43 % Expected life (in years) 4.32 4.34 Forfeiture rate (based on historical rates) 6 % 6 % Average exercise share price $ 39.27 $ 34.49 |
Guarantees and Contingencies (T
Guarantees and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations | We have entered into the following contractual obligations with minimum payments for the indicated fiscal periods as follows: Payments due between Total October 1, 2018— July 1, 2019— July 1, 2021— July 1, 2023 Long-term debt obligations (1) $ 3,496,391 $ 108,945 $ 285,913 $ 1,084,256 $ 2,017,277 Operating lease obligations (2) 348,669 53,222 118,353 73,118 103,976 Purchase obligations 19,013 9,914 8,860 239 — $ 3,864,073 $ 172,081 $ 413,126 $ 1,157,613 $ 2,121,253 (1) Includes interest up to maturity and principal payments. Please see note 10 "Long-Term Debt" for more details. (2) Net of $33.8 million of sublease income to be received from properties which we have subleased to third parties. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Interest and Penalties Related to Liabilities for Income Tax Expense | For the three months ended September 30, 2018 and 2017 , we recognized the following amounts as income tax-related interest expense and penalties: Three Months Ended September 30, 2018 2017 Interest expense $ 3,037 $ 2,086 Penalties expense (recoveries) 492 81 Total $ 3,529 $ 2,167 The following amounts have been accrued on account of income tax-related interest expense and penalties: As of September 30, 2018 As of June 30, 2018 Interest expense accrued * $ 56,886 $ 54,058 Penalties accrued * $ 2,373 $ 2,438 * These balances have been included within "Long-term income taxes payable" within the Condensed Consolidated Balance Sheets |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Our financial assets and liabilities measured at fair value on a recurring basis consisted of the following types of instruments as of September 30, 2018 and June 30, 2018 : September 30, 2018 June 30, 2018 Fair Market Measurements using: Fair Market Measurements using: September 30, 2018 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs June 30, 2018 Quoted prices in active markets for identical assets/ (liabilities) Significant other observable inputs Significant unobservable inputs (Level 1) (Level 2) (Level 3) (Level 1) (Level 2) (Level 3) Financial Liabilities: Derivative financial instrument liability (note 16) $ (138 ) N/A $ (138 ) N/A $ (1,319 ) N/A $ (1,319 ) N/A $ (138 ) N/A $ (138 ) N/A $ (1,319 ) N/A $ (1,319 ) N/A |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets | The effect of these derivative instruments on our Condensed Consolidated Financial Statements for the periods indicated below were as follows (amounts presented do not include any income tax effects). Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 15 "Fair Value Measurement") As of September 30, 2018 As of June 30, 2018 Derivatives Balance Sheet Location Fair Value Fair Value Foreign currency forward contracts designated as cash flow hedges Prepaid expenses and other current assets (Accounts payable and accrued liabilities) $ (138 ) $ (1,319 ) |
Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) | Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) Three Months Ended September 30, 2018 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) Foreign currency forward contracts $ 683 Operating $ (498 ) N/A $ — Three Months Ended September 30, 2017 Derivatives in Cash Flow Hedging Relationship Amount of Gain or (Loss) Location of Amount of Gain or Location of Amount of Gain or (Loss) Recognized in Foreign currency forward contracts $ 1,748 Operating $ 1,084 N/A $ — |
Special Charges (Recoveries) (T
Special Charges (Recoveries) (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | Special charges (recoveries) include costs and recoveries that relate to certain restructuring initiatives that we have undertaken from time to time under our various restructuring plans, as well as acquisition-related costs and other charges. Three Months Ended September 30, 2018 2017 Fiscal 2019 Restructuring Plan $ 20,246 $ — Fiscal 2018 Restructuring Plan 535 6,389 Fiscal 2017 Restructuring Plan 1,057 4,364 Restructuring Plans prior to Fiscal 2017 Restructuring Plan (503 ) (83 ) Acquisition-related costs 507 2,256 Other charges (recoveries) 1,469 5,105 Total $ 23,311 $ 18,031 |
Fiscal 2019 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2019 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ — $ — $ — Accruals and adjustments 10,110 10,136 20,246 Cash payments (2,594 ) (621 ) (3,215 ) Foreign exchange and other non-cash adjustments (15 ) (2,770 ) (2,785 ) Balance payable as at September 30, 2018 $ 7,501 $ 6,745 $ 14,246 |
Fiscal 2018 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2018 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ 558 $ 1,165 $ 1,723 Accruals and adjustments — 535 535 Cash payments (240 ) (375 ) (615 ) Foreign exchange and other non-cash adjustments 11 (355 ) (344 ) Balance payable as at September 30, 2018 $ 329 $ 970 $ 1,299 |
Fiscal 2017 Restructuring Plan | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve | A reconciliation of the beginning and ending liability for the three months ended September 30, 2018 is shown below. Fiscal 2017 Restructuring Plan Workforce reduction Facility costs Total Balance payable as at June 30, 2018 $ 1,590 $ 3,431 $ 5,021 Accruals and adjustments — 1,057 1,057 Cash payments (108 ) (196 ) (304 ) Foreign exchange and other non-cash adjustments (3 ) (226 ) (229 ) Balance payable as at September 30, 2018 $ 1,479 $ 4,066 $ 5,545 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Hightail, Inc | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of February 14, 2018, are set forth below: Current assets $ 1,290 Non-current tangible assets 1,270 Intangible customer assets 12,900 Intangible technology assets 4,200 Liabilities assumed (6,418 ) Total identifiable net assets 13,242 Goodwill 7,293 Net assets acquired $ 20,535 |
Guidance Software Inc. | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | The following tables summarize the consideration paid for Guidance and the amount of the assets acquired and liabilities assumed, as well as the goodwill recorded as of the acquisition date: Cash consideration* $ 237,291 Guidance shares already owned by OpenText through open market purchases (at fair value) 3,247 Purchase consideration $ 240,538 * Inclusive of $2.3 million previously accrued, but since paid as of September 30, 2018 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of September 14, 2017, are set forth below: Current assets (inclusive of cash acquired of $5.7 million) $ 24,744 Non-current tangible assets 11,583 Intangible customer assets 71,230 Intangible technology assets 51,851 Liabilities assumed (48,670 ) Total identifiable net assets 110,738 Goodwill 129,800 Net assets acquired $ 240,538 |
Covisint Corporation | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of July 26, 2017, are set forth below: Current assets (inclusive of cash acquired of $31.5 million) $ 41,586 Non-current tangible assets 3,426 Intangible customer assets 36,600 Intangible technology assets 17,300 Liabilities assumed (23,033 ) Total identifiable net assets 75,879 Goodwill 26,905 Net assets acquired $ 102,784 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Three Months Ended September 30, 2018 2017 Cash paid during the period for interest $ 32,627 $ 30,466 Cash received during the period for interest $ 735 $ 294 Cash paid during the period for income taxes $ 8,367 $ 9,582 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Three Months Ended September 30, 2018 2017 Basic earnings per share Net income attributable to OpenText $ 36,324 $ 36,596 Basic earnings per share attributable to OpenText $ 0.14 $ 0.14 Diluted earnings per share Net income attributable to OpenText $ 36,324 $ 36,596 Diluted earnings per share attributable to OpenText $ 0.13 $ 0.14 Weighted-average number of shares outstanding Basic 268,028 264,802 Effect of dilutive securities 1,359 1,433 Diluted 269,387 266,235 Excluded as anti-dilutive (1) 1,868 2,474 (1) |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Noncontrolling Interest [Line Items] | |||
Acquisition of additional non-controlling interests | $ 583 | $ 0 | |
OT South Africa | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage by Open Text | 70.00% | ||
GXS Singapore | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage by Open Text | 81.00% | ||
GXS Korea | |||
Noncontrolling Interest [Line Items] | |||
Ownership percentage by Open Text | 85.00% | ||
Acquisition of additional non-controlling interests | $ 600 |
Basis of Presentation - Revenue
Basis of Presentation - Revenue Recognition (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jul. 01, 2018 | Jun. 30, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 1,993,099 | $ 1,994,235 | |
Increase of capitalized sales commission costs | 36,059 | 35,151 | |
Increase in net deferred tax liabilities | 74,328 | $ 79,938 | |
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | (34,039) | $ 30,000 | |
Decrease in deferred revenues | 31,000 | ||
Decrease in deferred implementation costs | 22,000 | ||
Increase of capitalized sales commission costs | 14,000 | ||
Increase in contract assets | 18,000 | ||
Increase in net deferred tax liabilities | $ (3,934) | $ 11,000 |
Basis of Presentation - Income
Basis of Presentation - Income Taxes (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jul. 01, 2018 | Jun. 30, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Increase to deferred tax assets | $ 1,106,377 | $ 1,122,729 | |
Accounting Standards Update 2016-16 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in deferred costs | $ 38,000 | ||
Increase to deferred tax assets | 8,000 | ||
Decrease to deferred credits | 3,000 | ||
Accounting Standards Update 2016-16 | Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | $ (27,000) |
Basis of Presentation - Restric
Basis of Presentation - Restricted Cash (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | $ 171,401 | $ 67,246 |
Cash, cash equivalents and restricted cash at beginning of the period | 683,991 | 446,210 |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 106,588 | (66,823) |
Cash, cash equivalents and restricted cash at end of the period | $ 790,579 | 379,387 |
As Previously Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | 67,102 | |
Cash, cash equivalents and restricted cash at beginning of the period | 443,357 | |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | (66,967) | |
Cash, cash equivalents and restricted cash at end of the period | 376,390 | |
Adjustments | Accounting Standards Update 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Net cash provided by operating activities | 144 | |
Cash, cash equivalents and restricted cash at beginning of the period | 2,853 | |
Increase (decrease) in cash, cash equivalents and restricted cash during the period | 144 | |
Cash, cash equivalents and restricted cash at end of the period | $ 2,997 |
Basis of Presentation - Pension
Basis of Presentation - Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total cost of revenues | $ 226,313 | $ 223,252 |
Gross profit | 440,844 | 417,435 |
Research and development | 77,470 | 77,574 |
Sales and marketing | 120,182 | 122,615 |
General and administrative | 50,924 | 48,902 |
Total operating expenses | 341,617 | 329,789 |
Income from operations | 99,227 | 87,646 |
Interest and other related expense, net | (34,531) | (33,811) |
Cloud services and subscriptions | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | 87,703 | 84,134 |
Customer support | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | 30,465 | 32,770 |
Professional service and other | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | $ 56,796 | 59,428 |
As Previously Reported | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total cost of revenues | 223,500 | |
Gross profit | 417,187 | |
Research and development | 77,629 | |
Sales and marketing | 122,822 | |
General and administrative | 48,915 | |
Total operating expenses | 330,064 | |
Income from operations | 87,123 | |
Interest and other related expense, net | (33,288) | |
As Previously Reported | Cloud services and subscriptions | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | 84,330 | |
As Previously Reported | Customer support | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | 32,791 | |
As Previously Reported | Professional service and other | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | 59,459 | |
Accounting Standards Update 2017-07 | Adjustments | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total cost of revenues | (248) | |
Gross profit | 248 | |
Research and development | (55) | |
Sales and marketing | (207) | |
General and administrative | (13) | |
Total operating expenses | (275) | |
Income from operations | 523 | |
Interest and other related expense, net | (523) | |
Accounting Standards Update 2017-07 | Adjustments | Cloud services and subscriptions | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | (196) | |
Accounting Standards Update 2017-07 | Adjustments | Customer support | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | (21) | |
Accounting Standards Update 2017-07 | Adjustments | Professional service and other | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Costs of revenues | $ (31) |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts - Changes In Carrying Amount (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance as of beginning of the period | $ 9,741 | |
Bad debt expense | 2,999 | |
Write-off /adjustments | 230 | |
Balance as of end of the period | 12,970 | |
Unbilled receivables | $ 56,100 | $ 55,500 |
Revenues - Additional Informati
Revenues - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2018revenue_stream | |
Revenue from Contract with Customer [Abstract] | |
Number of revenue streams | 4 |
Disaggregation of Revenue [Line Items] | |
Description of timing | As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less.We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Payment period | 30 days |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Payment period | 60 days |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 667,157 | $ 640,687 |
Point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 76,887 | |
Over time (including professional service and other revenue) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 590,270 | |
Recurring revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 519,634 | |
Cloud services and subscriptions | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 208,083 | 193,853 |
Customer support revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 311,551 | 295,404 |
License revenue (perpetual, term and subscriptions) | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 76,887 | 78,231 |
Professional service and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 70,636 | $ 73,199 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 389,340 | |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 214,475 | |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 63,342 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Jul. 01, 2018 | Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Short-term contract assets | $ 8,767,000 | $ 5,474,000 | $ 0 |
Long-term contract assets | 12,041,000 | 12,382,000 | 0 |
Short-term deferred revenue | 582,139,000 | 618,197,000 | 644,211,000 |
Long-term deferred revenue | 43,585,000 | $ 64,743,000 | $ 69,197,000 |
Contract assets reclassified to receivables | 2,400,000 | ||
Asset impairment | 0 | ||
Revenue recognized | $ 270,000,000 |
Revenues - Incremental Costs of
Revenues - Incremental Costs of Obtaining a Contract with a Customer (Details) | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Capitalized contract cost, amortization period | 6 years |
Capitalized Contract Cost [Roll Forward] | |
Capitalized costs to obtain a contract as of July 1, 2018 | $ 35,151,000 |
New capitalized costs incurred | 3,179,000 |
Amortization of capitalized costs | (2,271,000) |
Capitalized costs to obtain a contract as of September 30, 2018 | 36,059,000 |
Impairment loss | $ 0 |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligations (Details) $ in Millions | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 926 |
Revenues - Transaction Price Al
Revenues - Transaction Price Allocated to the Remaining Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Sep. 30, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 40.00% |
Expected timing of satisfaction, period | 12 months |
Revenues - Transaction Price _2
Revenues - Transaction Price Allocated to the Remaining Performance Obligations, Additional Information (Details) | 3 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Description of timing | As a practical expedient, we do not account for significant financing components if the period between when we transfer the promised good or service to the customer and when the customer pays for the product or service will be one year or less.We apply the practical expedient and do not disclose performance obligations that have original expected durations of one year or less. |
Revenues - Impact on Condensed
Revenues - Impact on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jul. 01, 2018 | Jun. 30, 2018 |
ASSETS | |||
Contract assets | $ 8,767 | $ 5,474 | $ 0 |
Prepaid expenses and other current assets | 80,624 | 101,059 | |
Total current assets | 1,325,106 | 1,327,580 | |
Long-term contract assets | 12,041 | 12,382 | 0 |
Deferred tax assets | 1,106,377 | 1,122,729 | |
Other assets | 116,536 | 111,267 | |
Total assets | 7,619,048 | 7,765,029 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities | 252,079 | 302,154 | |
Deferred revenues | 582,139 | 618,197 | 644,211 |
Total current liabilities | 875,273 | 994,599 | |
Deferred revenues | 43,585 | 64,743 | 69,197 |
Deferred tax liabilities | 74,328 | 79,938 | |
Total long-term liabilities | 3,016,745 | 3,053,172 | |
Accumulated other comprehensive income | 32,256 | 33,645 | |
Retained earnings | 1,993,099 | 1,994,235 | |
Total OpenText shareholders' equity | 3,725,907 | 3,716,221 | |
Non-controlling interests | 1,123 | 1,037 | |
Total shareholders’ equity | 3,727,030 | 3,717,258 | |
Total liabilities and shareholders’ equity | 7,619,048 | $ 7,765,029 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Adjustments | |||
ASSETS | |||
Contract assets | (8,767) | ||
Prepaid expenses and other current assets | 6,481 | ||
Total current assets | (2,286) | ||
Long-term contract assets | (12,041) | ||
Deferred tax assets | 8,004 | ||
Other assets | (179) | ||
Total assets | (6,502) | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities | (2) | ||
Deferred revenues | 11,011 | ||
Total current liabilities | 11,009 | ||
Deferred revenues | 20,000 | ||
Deferred tax liabilities | (3,934) | 11,000 | |
Total long-term liabilities | 16,066 | ||
Accumulated other comprehensive income | 462 | ||
Retained earnings | (34,039) | $ 30,000 | |
Total OpenText shareholders' equity | (33,577) | ||
Non-controlling interests | 0 | ||
Total shareholders’ equity | (33,577) | ||
Total liabilities and shareholders’ equity | (6,502) | ||
Proforma as if Topic 605 was in effect | |||
ASSETS | |||
Contract assets | 0 | ||
Prepaid expenses and other current assets | 87,105 | ||
Total current assets | 1,322,820 | ||
Long-term contract assets | 0 | ||
Deferred tax assets | 1,114,381 | ||
Other assets | 116,357 | ||
Total assets | 7,612,546 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities | 252,077 | ||
Deferred revenues | 593,150 | ||
Total current liabilities | 886,282 | ||
Deferred revenues | 63,585 | ||
Deferred tax liabilities | 70,394 | ||
Total long-term liabilities | 3,032,811 | ||
Accumulated other comprehensive income | 32,718 | ||
Retained earnings | 1,959,060 | ||
Total OpenText shareholders' equity | 3,692,330 | ||
Non-controlling interests | 1,123 | ||
Total shareholders’ equity | 3,693,453 | ||
Total liabilities and shareholders’ equity | $ 7,612,546 |
Revenues - Impact on Condense_2
Revenues - Impact on Condensed Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | $ 667,157 | $ 640,687 |
Costs of goods and services | 226,313 | 223,252 |
Gross profit | 440,844 | 417,435 |
Sales and marketing | 120,182 | 122,615 |
Total operating expenses | 341,617 | 329,789 |
Income from operations | 99,227 | 87,646 |
Interest and other related expense, net | (34,531) | (33,811) |
Income before income taxes | 66,218 | 64,059 |
Provision for (recovery of) income taxes | 29,850 | 27,369 |
Net income for the period | 36,368 | 36,690 |
License | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 76,887 | 78,231 |
Costs of revenues | 3,872 | 2,960 |
Cloud services and subscriptions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 208,083 | 193,853 |
Costs of revenues | 87,703 | 84,134 |
Customer support | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 311,551 | 295,404 |
Costs of revenues | 30,465 | 32,770 |
Professional service and other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 70,636 | 73,199 |
Costs of revenues | 56,796 | $ 59,428 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | (3,773) | |
Costs of goods and services | 467 | |
Gross profit | (4,240) | |
Sales and marketing | 1,107 | |
Total operating expenses | 1,107 | |
Income from operations | (5,347) | |
Interest and other related expense, net | (159) | |
Income before income taxes | (5,506) | |
Provision for (recovery of) income taxes | (1,253) | |
Net income for the period | (4,253) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | License | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | (2,601) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Cloud services and subscriptions | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | (535) | |
Costs of revenues | 467 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Customer support | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | (583) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Professional service and other | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | (54) | |
Proforma as if Topic 605 was in effect | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 663,384 | |
Costs of goods and services | 226,780 | |
Gross profit | 436,604 | |
Sales and marketing | 121,289 | |
Total operating expenses | 342,724 | |
Income from operations | 93,880 | |
Interest and other related expense, net | (34,690) | |
Income before income taxes | 60,712 | |
Provision for (recovery of) income taxes | 28,597 | |
Net income for the period | 32,115 | |
Proforma as if Topic 605 was in effect | License | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 74,286 | |
Proforma as if Topic 605 was in effect | Cloud services and subscriptions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 207,548 | |
Costs of revenues | 88,170 | |
Proforma as if Topic 605 was in effect | Customer support | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | 310,968 | |
Proforma as if Topic 605 was in effect | Professional service and other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Total revenues | $ 70,582 |
Revenues - Impact on Condense_3
Revenues - Impact on Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income for the period | $ 36,368 | $ 36,690 |
Deferred taxes | 7,769 | 5,947 |
Accounts receivable | 73,875 | 5,162 |
Contract assets | (5,346) | 0 |
Prepaid expenses and other current assets | 9,732 | (2,808) |
Income taxes and deferred charges and credits | 12,561 | 9,148 |
Accounts payable and accrued liabilities | (40,001) | (64,476) |
Deferred revenue | (57,403) | (38,480) |
Other assets | 2,444 | (2,083) |
Net cash provided by operating activities | 171,401 | $ 67,246 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Adjustments | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income for the period | (4,253) | |
Deferred taxes | (1,293) | |
Accounts receivable | (2,281) | |
Contract assets | 5,346 | |
Prepaid expenses and other current assets | 1,213 | |
Income taxes and deferred charges and credits | 36 | |
Accounts payable and accrued liabilities | 75 | |
Deferred revenue | 703 | |
Other assets | 454 | |
Net cash provided by operating activities | 0 | |
Proforma as if Topic 605 was in effect | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income for the period | 32,115 | |
Deferred taxes | 6,476 | |
Accounts receivable | 71,594 | |
Contract assets | 0 | |
Prepaid expenses and other current assets | 10,945 | |
Income taxes and deferred charges and credits | 12,597 | |
Accounts payable and accrued liabilities | (39,926) | |
Deferred revenue | (56,700) | |
Other assets | 2,898 | |
Net cash provided by operating activities | $ 171,401 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 585,173 | $ 588,301 |
Accumulated Depreciation | (338,673) | (324,096) |
Net | 246,500 | 264,205 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 36,481 | 34,647 |
Accumulated Depreciation | (22,085) | (21,488) |
Net | 14,396 | 13,159 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,809 | 1,467 |
Accumulated Depreciation | (722) | (687) |
Net | 1,087 | 780 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 207,047 | 207,381 |
Accumulated Depreciation | (142,033) | (134,906) |
Net | 65,014 | 72,475 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 98,492 | 97,653 |
Accumulated Depreciation | (63,220) | (59,485) |
Net | 35,272 | 38,168 |
Capitalized software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 84,402 | 81,073 |
Accumulated Depreciation | (45,074) | (41,556) |
Net | 39,328 | 39,517 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 109,145 | 118,200 |
Accumulated Depreciation | (54,385) | (55,172) |
Net | 54,760 | 63,028 |
Land and buildings | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 47,797 | 47,880 |
Accumulated Depreciation | (11,154) | (10,802) |
Net | $ 36,643 | $ 37,078 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance as of June 30, 2018 | $ 3,580,129 |
Adjustments on account of foreign exchange | (1,488) |
Balance as of September 30, 2018 | $ 3,578,641 |
Acquired Intangible Assets - Ca
Acquired Intangible Assets - Calculation Of Acquired Intangibles By Asset Class (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 2,286,960 | $ 2,333,736 |
Accumulated Amortization | (1,083,676) | (1,037,099) |
Total | 1,203,284 | 1,296,637 |
Technology assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 985,226 | 985,226 |
Accumulated Amortization | (487,251) | (439,774) |
Total | $ 497,975 | 545,452 |
Weighted-average amortization period (in years) for acquired intangible assets | 6 years | |
Customer assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 1,301,734 | 1,348,510 |
Accumulated Amortization | (596,425) | (597,325) |
Total | 705,309 | $ 751,185 |
Intangible assets fully amortized during the period | $ 46,800 | |
Weighted-average amortization period (in years) for acquired intangible assets | 8 years |
Acquired Intangible Assets - _2
Acquired Intangible Assets - Calculation Of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 (nine months ended June 30) | $ 259,048 | |
2,020 | 280,888 | |
2,021 | 190,763 | |
2,022 | 177,208 | |
2,023 | 115,015 | |
2024 and beyond | 180,362 | |
Total | $ 1,203,284 | $ 1,296,637 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Other Assets, Noncurrent Disclosure [Abstract] | ||
Deposits and restricted cash | $ 13,775 | $ 9,479 |
Deferred implementation costs | 0 | 13,740 |
Capitalized costs to obtain a contract | 26,987 | 13,027 |
Investments | 47,109 | 49,635 |
Long-term prepaid expenses and other long-term assets | 28,665 | 25,386 |
Total other assets | $ 116,536 | $ 111,267 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from equity method investments | $ 2,372 | $ (512) |
Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 4.00% | |
Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 20.00% |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Schedule of Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable—trade | $ 21,176 | $ 41,722 |
Accrued salaries and commissions | 84,918 | 118,024 |
Accrued liabilities | 100,457 | 108,903 |
Accrued interest on Senior Notes | 26,021 | 24,786 |
Amounts payable in respect of restructuring and other Special charges | 17,712 | 5,622 |
Asset retirement obligations | 1,795 | 3,097 |
Total | $ 252,079 | $ 302,154 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Liabilities - Schedule of Long-Term Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Amounts payable in respect of restructuring and other Special charges | $ 5,740 | $ 4,362 |
Other accrued liabilities | 31,965 | 35,874 |
Asset retirement obligations | 13,463 | 12,591 |
Total | $ 51,168 | $ 52,827 |
Accounts Payable and Accrued _5
Accounts Payable and Accrued Liabilities - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Present value of asset retirement obligation | $ 15.3 | $ 15.7 |
Undiscounted value of asset retirement obligation | $ 17.1 | $ 17.7 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Total debt | $ 2,645,000 | $ 2,647,500 |
Premium on Senior Notes 2026 | 5,866 | 6,018 |
Debt issuance costs | (31,739) | (32,995) |
Total amount outstanding | 2,619,127 | 2,620,523 |
Less: | ||
Current portion of long-term debt | 10,000 | 10,000 |
Non-current portion of long-term debt | 2,609,127 | 2,610,523 |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Total debt | 995,000 | 997,500 |
Less: | ||
Current portion of long-term debt | 10,000 | 10,000 |
Senior Notes | Senior Notes 2026 | ||
Debt Instrument [Line Items] | ||
Total debt | 850,000 | 850,000 |
Senior Notes | Senior Notes 2023 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 800,000 | $ 800,000 |
Long-Term Debt - Senior Unsecur
Long-Term Debt - Senior Unsecured Fixed Rate Notes (Details) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Dec. 20, 2016 | May 31, 2016 | Jan. 15, 2015 | |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 2,645,000,000 | $ 2,647,500,000 | ||||
Senior Notes | Senior Notes 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 250,000,000 | $ 600,000,000 | ||||
Debt instrument stated interest rate | 5.875% | |||||
Debt premium issue price percentage | 102.75% | |||||
Long-term debt | 850,000,000 | 850,000,000 | ||||
Interest expense | 12,500,000 | $ 12,500,000 | ||||
Senior Notes | Senior Notes 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 800,000,000 | |||||
Debt instrument stated interest rate | 5.625% | |||||
Long-term debt | 800,000,000 | $ 800,000,000 | ||||
Interest expense | $ 11,300,000 | $ 11,300,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | May 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jan. 16, 2014 |
Debt Instrument [Line Items] | |||||
Long-term debt | $ 2,645,000,000 | $ 2,647,500,000 | |||
Revolver | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 0 | $ 1,800,000 | |||
Credit agreement, maximum capacity | 450,000,000 | ||||
Long-term debt | $ 0 | ||||
Proceeds from line of credit | 200,000,000 | ||||
Revolver | Line of Credit | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Interest addition to floating rate | 1.25% | ||||
Revolver | Line of Credit | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Interest addition to floating rate | 1.75% | ||||
Term Loan B | |||||
Debt Instrument [Line Items] | |||||
Debt instrument face amount | $ 1,000,000,000 | $ 800,000,000 | |||
Proceeds from issuance of debt | $ 1,000,000,000 | ||||
Term loan period, years | 7 years | ||||
Term loan quarterly repayment as percentage of principal | 0.25% | ||||
Effective interest rate percentage | 3.83% | ||||
Interest expense | $ 9,800,000 | $ 6,400,000 | |||
Long-term debt | $ 995,000,000 | $ 997,500,000 | |||
Term Loan B | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Interest addition to floating rate | 1.75% |
Pension Plans and Other Post _3
Pension Plans and Other Post Retirement Benefits - Schedule of Defined Benefit Plans and Long-Term Employee Benefit Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Assumptions: | ||
Total benefit obligation | $ 67,003 | $ 67,981 |
Current portion of benefit obligation | 2,273 | 2,262 |
Non-current portion of benefit obligation | 64,730 | 65,719 |
Pension Plan | CDT defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 32,668 | 32,651 |
Current portion of benefit obligation | 673 | 655 |
Non-current portion of benefit obligation | 31,995 | 31,996 |
Pension Plan | GXS GER defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 25,206 | 25,382 |
Current portion of benefit obligation | 1,039 | 1,027 |
Non-current portion of benefit obligation | 24,167 | 24,355 |
Pension Plan | GXS PHP defined benefit plan | ||
Assumptions: | ||
Total benefit obligation | 3,431 | 3,853 |
Current portion of benefit obligation | 138 | 138 |
Non-current portion of benefit obligation | 3,293 | 3,715 |
Other plans | ||
Assumptions: | ||
Total benefit obligation | 5,698 | 6,095 |
Current portion of benefit obligation | 423 | 442 |
Non-current portion of benefit obligation | $ 5,275 | $ 5,653 |
Pension Plans and Other Post _4
Pension Plans and Other Post Retirement Benefits - Additional Information (Details) - Pension Plan | 3 Months Ended |
Sep. 30, 2018USD ($) | |
CDT defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | $ 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 500,000 |
GXS GER defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 100,000 |
GXS PHP defined benefit plan | |
Assumptions: | |
Contributions made by employer to plan | 0 |
Amount to be amortized from accumulated other comprehensive income (loss) over the next fiscal year | 400,000 |
Fair value of plan assets | $ 31,000 |
Pension Plans and Other Post _5
Pension Plans and Other Post Retirement Benefits - Schedule of the Change in Benefit Obligation (Details) - Pension Plan - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation—beginning of period | $ 61,886 | $ 57,106 | $ 57,106 |
Service cost | 462 | 460 | 1,805 |
Interest cost | 359 | 326 | 1,337 |
Benefits paid | (441) | (1,695) | |
Actuarial (gain) loss | (1,512) | 2,126 | |
Foreign exchange (gain) loss | 551 | 1,207 | |
Benefit obligation—end of period | 61,305 | 61,886 | |
Less: Current portion | (1,850) | (1,820) | |
Non-current portion of benefit obligation | 59,455 | 60,066 | |
CDT defined benefit plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation—beginning of period | 32,651 | 28,881 | 28,881 |
Service cost | 141 | 124 | 501 |
Interest cost | 165 | 150 | 607 |
Benefits paid | (154) | (580) | |
Actuarial (gain) loss | (477) | 2,442 | |
Foreign exchange (gain) loss | 342 | 800 | |
Benefit obligation—end of period | 32,668 | 32,651 | |
Less: Current portion | (673) | (655) | |
Non-current portion of benefit obligation | 31,995 | 31,996 | |
GXS GER defined benefit plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation—beginning of period | 25,382 | 23,730 | 23,730 |
Service cost | 145 | 117 | 472 |
Interest cost | 126 | 121 | 489 |
Benefits paid | (253) | (974) | |
Actuarial (gain) loss | (460) | 997 | |
Foreign exchange (gain) loss | 266 | 668 | |
Benefit obligation—end of period | 25,206 | 25,382 | |
Less: Current portion | (1,039) | (1,027) | |
Non-current portion of benefit obligation | 24,167 | 24,355 | |
GXS PHP defined benefit plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Benefit obligation—beginning of period | 3,853 | 4,495 | 4,495 |
Service cost | 176 | 219 | 832 |
Interest cost | 68 | $ 55 | 241 |
Benefits paid | (34) | (141) | |
Actuarial (gain) loss | (575) | (1,313) | |
Foreign exchange (gain) loss | (57) | (261) | |
Benefit obligation—end of period | 3,431 | 3,853 | |
Less: Current portion | (138) | (138) | |
Non-current portion of benefit obligation | $ 3,293 | $ 3,715 |
Pension Plans and Other Post _6
Pension Plans and Other Post Retirement Benefits - Components of Net Pension Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Assumptions: | |||
Net pension expense | $ 1,145 | $ 1,035 | |
Pension Plan | |||
Assumptions: | |||
Service cost | 462 | 460 | $ 1,805 |
Interest cost | 359 | 326 | 1,337 |
Amortization of actuarial (gains) and losses | 69 | 91 | |
Net pension expense | 890 | 877 | |
Pension Plan | CDT defined benefit plan | |||
Assumptions: | |||
Service cost | 141 | 124 | 501 |
Interest cost | 165 | 150 | 607 |
Amortization of actuarial (gains) and losses | 176 | 134 | |
Net pension expense | 482 | 408 | |
Pension Plan | GXS GER defined benefit plan | |||
Assumptions: | |||
Service cost | 145 | 117 | 472 |
Interest cost | 126 | 121 | 489 |
Amortization of actuarial (gains) and losses | 33 | 18 | |
Net pension expense | 304 | 256 | |
Pension Plan | GXS PHP defined benefit plan | |||
Assumptions: | |||
Service cost | 176 | 219 | 832 |
Interest cost | 68 | 55 | $ 241 |
Amortization of actuarial (gains) and losses | (140) | (61) | |
Net pension expense | $ 104 | $ 213 |
Pension Plans and Other Post _7
Pension Plans and Other Post Retirement Benefits - Schedule of Weighted-Average Key Assumptions Used for Pension Plans (Details) - Pension Plan | 3 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Jun. 30, 2018 | |
CDT | ||
Assumptions: | ||
Salary increases | 3.50% | 3.50% |
Pension increases | 2.00% | 2.00% |
Discount rate | 2.08% | 2.00% |
Normal retirement age | 65 years | 65 years |
CDT | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 1.00% | 1.00% |
CDT | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
CDT | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.50% | 0.50% |
CDT | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 1.00% | 1.00% |
GXS GER | ||
Assumptions: | ||
Salary increases | 3.50% | 3.50% |
Pension increases | 2.00% | 2.00% |
Discount rate | 2.08% | 2.00% |
GXS GER | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS GER | Minimum | ||
Assumptions: | ||
Normal retirement age | 65 years | 65 years |
GXS GER | Maximum | ||
Assumptions: | ||
Normal retirement age | 67 years | 67 years |
GXS PHP | ||
Assumptions: | ||
Salary increases | 6.50% | 6.50% |
Discount rate | 8.25% | 7.25% |
Normal retirement age | 60 years | 60 years |
GXS PHP | to age 20 | ||
Assumptions: | ||
Employee fluctuation rate | 12.19% | 12.19% |
GXS PHP | to age 25 | ||
Assumptions: | ||
Employee fluctuation rate | 16.58% | 16.58% |
GXS PHP | to age 30 | ||
Assumptions: | ||
Employee fluctuation rate | 13.97% | 13.97% |
GXS PHP | to age 35 | ||
Assumptions: | ||
Employee fluctuation rate | 10.77% | 10.77% |
GXS PHP | to age 40 | ||
Assumptions: | ||
Employee fluctuation rate | 7.39% | 7.39% |
GXS PHP | to age 45 | ||
Assumptions: | ||
Employee fluctuation rate | 3.28% | 3.28% |
GXS PHP | to age 50 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
GXS PHP | from age 51 | ||
Assumptions: | ||
Employee fluctuation rate | 0.00% | 0.00% |
Pension Plans and Other Post _8
Pension Plans and Other Post Retirement Benefits - Anticipated Pension Payments Under Pension Plans (Details) - Pension Plan $ in Thousands | Sep. 30, 2018USD ($) |
CDT defined benefit plan | |
Assumptions: | |
2019 (nine months ended June 30) | $ 497 |
2,020 | 707 |
2,021 | 808 |
2,022 | 899 |
2,023 | 1,010 |
2024 to 2028 | 6,071 |
Total | 9,992 |
GXS GER defined benefit plan | |
Assumptions: | |
2019 (nine months ended June 30) | 778 |
2,020 | 1,043 |
2,021 | 1,072 |
2,022 | 1,080 |
2,023 | 1,082 |
2024 to 2028 | 5,563 |
Total | 10,618 |
GXS PHP defined benefit plan | |
Assumptions: | |
2019 (nine months ended June 30) | 103 |
2,020 | 115 |
2,021 | 147 |
2,022 | 292 |
2,023 | 243 |
2024 to 2028 | 1,529 |
Total | $ 2,429 |
Share Capital, Option Plans a_3
Share Capital, Option Plans and Share-Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Dividends | ||
Dividends declared per common share (in dollars per share) | $ 0.1518 | $ 0.1320 |
Payments of dividends | $ 40,466 | $ 35,017 |
Share Capital | ||
Preference shares issued (in shares) | 0 | |
Treasury Stock | ||
Common shares repurchased (in shares) | 304,000 | 0 |
Purchase of treasury stock | $ 11,719 | $ 0 |
Issuance of treasury stock (in shares) | 2,968 | 8,332 |
Share Capital, Option Plans a_4
Share Capital, Option Plans and Share-Based Payments - Schedule of Share-Based Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 6,555 | $ 8,235 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 2,602 | 3,302 |
Restricted Stock Units (RSUs) | Long Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1,385 | 1,886 |
Restricted Stock Units (RSUs) | Other plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 81 | 479 |
Performance Stock Units (PSUs) | Long Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 843 | 1,035 |
Deferred Share Units (directors) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 661 | 547 |
Employee Share Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 983 | $ 986 |
Share Capital, Option Plans a_5
Share Capital, Option Plans and Share-Based Payments - Summary of Outstanding Stock Options, Narrative (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding (in shares) | 7,179,373 | 7,078,435 | |
Cash used to settle awards | $ 0 | $ 0 | |
Capitalized amount of share-based compensation costs | 0 | 0 | |
Cash proceeds from exercise of options granted | 12,400,000 | 16,200,000 | |
Tax benefit realized from exercise of options | $ 900,000 | $ 100,000 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding (in shares) | 7,179,373 | ||
Common shares available for issuance (in shares) | 10,298,756 | ||
Expiration period of options, minimum term | 7 years | ||
Expiration period of options, maximum term | 10 years | ||
Unrecognized compensation cost relating to unvested stock awards | $ 21,800,000 | ||
Unvested stock awards compensation cost, weighted average recognition period | 2 years 9 months 18 days | ||
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 4 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years |
Share Capital, Option Plans a_6
Share Capital, Option Plans and Share-Based Payments - Schedule of Outstanding Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Options | |
Outstanding at beginning of period (in shares) | shares | 7,078,435 |
Granted (in shares) | shares | 750,220 |
Exercised (in shares) | shares | (494,134) |
Forfeited or expired (in shares) | shares | (155,148) |
Outstanding at end of period (in shares) | shares | 7,179,373 |
Exercisable ending balance (in shares) | shares | 2,570,581 |
Weighted- Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 28.41 |
Granted (in dollars per share) | $ / shares | 39.27 |
Exercised (in dollars per share) | $ / shares | 25.16 |
Forfeited or expired (in dollars per share) | $ / shares | 32.05 |
Outstanding at end of period (in dollars per share) | $ / shares | 29.69 |
Exercisable at end of period (in dollars per share) | $ / shares | $ 25.26 |
Weighted- Average Remaining Contractual Term (years) | |
Outstanding (in years) | 4 years 5 months 26 days |
Exercisable (in years) | 3 years 1 month 20 days |
Aggregate Intrinsic Value ($’000s) | |
Outstanding | $ | $ 57,829 |
Exercisable | $ | $ 32,850 |
Share Capital, Option Plans a_7
Share Capital, Option Plans and Share-Based Payments - Schedule of Weighted-Average Fair Value Of Options And Weighted-Average Assumptions Used (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Weighted-average fair value of options granted (in dollars per share) | $ 8.73 | $ 7.44 |
Weighted-average assumptions used: | ||
Expected volatility | 26.07% | 27.35% |
Risk–free interest rate | 2.80% | 1.74% |
Expected dividend yield | 1.45% | 1.43% |
Expected life (in years) | 4 years 3 months 25 days | 4 years 4 months 2 days |
Forfeiture rate (based on historical rates) | 6.00% | 6.00% |
Average exercised share price (in dollars per share) | $ 39.27 | $ 34.49 |
Share Capital, Option Plans a_8
Share Capital, Option Plans and Share-Based Payments - Long-Term Incentive Plans (Details) - Long Term Incentive Plan $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of plan | 3 years |
Compensation cost related to unvested awards not yet recognized | $ 21.9 |
Unvested stock awards compensation cost, weighted average recognition period | 2 years 3 months 18 days |
Share Capital, Option Plans a_9
Share Capital, Option Plans and Share-Based Payments - RSU's, DSU's and ESPP (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted (in shares) | 0 | 2,968 |
Award vesting period | 3 years | |
Stock issued | $ 0.1 | $ 0.2 |
Stock issued (in shares) | 2,968 | 8,332 |
Deferred Stock Units (DSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted (in shares) | 3,158 | 3,203 |
Employee Share Purchase Plan (ESPP) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards purchase price discount | 15.00% | |
Common shares eligible for issuance (in shares) | 176,074 | 192,369 |
Cash received from employee stock purchase plan | $ 5.7 | $ 5.7 |
Guarantees and Contingencies -
Guarantees and Contingencies - Schedule of Contractual Obligations with Minimum Payments (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Long term debt obligations | |
Total | $ 3,496,391 |
October 1, 2018— June 30, 2019 | 108,945 |
July 1, 2019— June 30, 2021 | 285,913 |
July 1, 2021— June 30, 2023 | 1,084,256 |
July 1, 2023 and beyond | 2,017,277 |
Operating lease obligations | |
Total | 348,669 |
October 1, 2018— June 30, 2019 | 53,222 |
July 1, 2019— June 30, 2021 | 118,353 |
July 1, 2021— June 30, 2023 | 73,118 |
July 1, 2023 and beyond | 103,976 |
Purchase obligations | |
Total | 19,013 |
October 1, 2018— June 30, 2019 | 9,914 |
July 1, 2019— June 30, 2021 | 8,860 |
July 1, 2021— June 30, 2023 | 239 |
July 1, 2023 and beyond | 0 |
Total payments due between | |
Total | 3,864,073 |
October 1, 2018— June 30, 2019 | 172,081 |
July 1, 2019— June 30, 2021 | 413,126 |
July 1, 2021— June 30, 2023 | 1,157,613 |
July 1, 2023 and beyond | 2,121,253 |
Sublease income | $ 33,800 |
Guarantees and Contingencies _2
Guarantees and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Jul. 11, 2018 | Sep. 30, 2018 |
GXS Group, Inc. | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 1.4 | |
GXS India | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | 1.2 | |
Internal Revenue Service (IRS) | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | 735 | |
Income tax examination, tax | 455 | |
Income tax examination, penalties | 105 | |
Income tax examination, interest | 175 | |
Internal Revenue Service (IRS) | Tax Year 2010 | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | $ 335 | |
Additional tax expense, as a percent | 20.00% | |
Internal Revenue Service (IRS) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Income tax examination, change in liability | $ 80 | |
Additional tax expense, as a percent | 40.00% | |
Canada Revenue Agency (CRA) | ||
Loss Contingencies [Line Items] | ||
Estimated amount of loss resulting from an adverse tax position | $ 23 | |
Canada Revenue Agency (CRA) | Tax Year 2012 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 10.00% | |
Income tax examination, estimate of increase to taxable income | $ 90 | |
Canada Revenue Agency (CRA) | Tax Year 2013 | ||
Loss Contingencies [Line Items] | ||
Additional tax expense, as a percent | 10.00% | |
Income tax examination, estimate of increase to taxable income | $ 90 |
Income Taxes - Interest and Pen
Income Taxes - Interest and Penalties Related to Liabilities for Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Interest expense | $ 3,037 | $ 2,086 |
Penalties expense (recoveries) | 492 | 81 |
Total | $ 3,529 | $ 2,167 |
Income Taxes - Interest Accrued
Income Taxes - Interest Accrued and Penalties Accrued Related to Income Tax Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Interest expense accrued | $ 56,886 | $ 54,058 |
Penalties accrued | $ 2,373 | $ 2,438 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | |||
Possible decrease in tax expense in next 12 months | $ 8,400,000 | ||
Taxes paid on cash distribution | $ 28,500,000 | $ 31,300,000 | |
Effective income tax rate | 45.10% | 42.70% | |
Increase in income tax expense | $ 2,500,000 | ||
Income tax benefit from reorganization | 3,700,000 | ||
Effect of adoption of new accounting pronouncement | (1,100,000) | ||
Adjustment of deferred tax assets and liabilities | $ 19,000,000 | $ 0 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Financial Liabilities: | ||
Derivative financial instrument liability (note 16) | $ (138) | $ (1,319) |
Financial Liabilities | (138) | (1,319) |
Significant other observable inputs (Level 2) | ||
Financial Liabilities: | ||
Derivative financial instrument liability (note 16) | (138) | (1,319) |
Financial Liabilities | $ (138) | $ (1,319) |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |||
Assets, Level 1 to Level 2 transfers | $ 0 | $ 0 | |
Liabilities, Level 1 to Level 2 transfers | 0 | 0 | |
Assets, Level 2 to Level 1 transfers | 0 | 0 | |
Liabilities, Level 2 to Level 1 transfers | 0 | $ 0 | |
Asset transfers into Level 3 | 0 | $ 0 | |
Liability transfers into Level 3 | 0 | 0 | |
Asset transfers out of Level 3 | 0 | 0 | |
Liability transfers out of Level 3 | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Fair Value in the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of forward contracts held to sell U.S. dollars in exchange for Canadian dollars | $ 46,700 | $ 47,100 |
Accounts Payable and Accrued Liabilities | Cash Flow Hedging | Designated As Hedging Instrument | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Asset (Liability) | $ (138) | |
Prepaid expenses and other current assets | Cash Flow Hedging | Designated As Hedging Instrument | Foreign currency forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Asset (Liability) | $ (1,319) | |
Minimum | ||
Derivatives, Fair Value [Line Items] | ||
Contract maturity | 1 month | |
Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Contract maturity | 12 months |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Effects on Income and Other Comprehensive Income (OCI) (Details) - Cash Flow Hedging - Foreign currency forward contracts - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Derivatives, Fair Value [Line Items] | ||
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | $ 683 | $ 1,748 |
Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 |
Operating Expenses | ||
Derivatives, Fair Value [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | $ (498) | $ 1,084 |
Special Charges (Recoveries) -
Special Charges (Recoveries) - Schedule of Special Charges Related to Restructuring Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Acquisition-related costs | $ 507 | $ 2,256 |
Other charges (recoveries) | 1,469 | 5,105 |
Total | 23,311 | 18,031 |
Fiscal 2019 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges | 20,246 | 0 |
Fiscal 2018 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges | 535 | 6,389 |
Fiscal 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges | 1,057 | 4,364 |
Restructuring Plans prior to Fiscal 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges | $ (503) | $ (83) |
Special Charges (Recoveries) _2
Special Charges (Recoveries) - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Acquisition-related costs | $ 507 | $ 2,256 |
Other charges (recoveries) | 1,469 | 5,105 |
Special Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition-related costs | 500 | 2,300 |
System Implementation Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Other charges (recoveries) | 1,100 | |
Miscellaneous Other Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Other charges (recoveries) | 300 | 1,400 |
One-time ERP Implementation Project | ||
Restructuring Cost and Reserve [Line Items] | ||
Other charges (recoveries) | $ 3,700 | |
Fiscal 2019 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 29,000 | |
Special charges recorded to date | 20,300 | |
Fiscal 2018 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges recorded to date | 10,700 | |
Fiscal 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Special charges recorded to date | $ 42,100 |
Special Charges (Recoveries) _3
Special Charges (Recoveries) - Schedule of Restructuring Reserve (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Fiscal 2019 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | $ 0 |
Accruals and adjustments | 20,246 |
Cash payments | (3,215) |
Foreign exchange and other non-cash adjustments | (2,785) |
Balance payable as at September 30, 2018 | 14,246 |
Fiscal 2019 Restructuring Plan | Workforce Reduction | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 0 |
Accruals and adjustments | 10,110 |
Cash payments | (2,594) |
Foreign exchange and other non-cash adjustments | (15) |
Balance payable as at September 30, 2018 | 7,501 |
Fiscal 2019 Restructuring Plan | Facility Costs | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 0 |
Accruals and adjustments | 10,136 |
Cash payments | (621) |
Foreign exchange and other non-cash adjustments | (2,770) |
Balance payable as at September 30, 2018 | 6,745 |
Fiscal 2018 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 1,723 |
Accruals and adjustments | 535 |
Cash payments | (615) |
Foreign exchange and other non-cash adjustments | (344) |
Balance payable as at September 30, 2018 | 1,299 |
Fiscal 2018 Restructuring Plan | Workforce Reduction | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 558 |
Accruals and adjustments | 0 |
Cash payments | (240) |
Foreign exchange and other non-cash adjustments | 11 |
Balance payable as at September 30, 2018 | 329 |
Fiscal 2018 Restructuring Plan | Facility Costs | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 1,165 |
Accruals and adjustments | 535 |
Cash payments | (375) |
Foreign exchange and other non-cash adjustments | (355) |
Balance payable as at September 30, 2018 | 970 |
Fiscal 2017 Restructuring Plan | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 5,021 |
Accruals and adjustments | 1,057 |
Cash payments | (304) |
Foreign exchange and other non-cash adjustments | (229) |
Balance payable as at September 30, 2018 | 5,545 |
Fiscal 2017 Restructuring Plan | Workforce Reduction | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 1,590 |
Accruals and adjustments | 0 |
Cash payments | (108) |
Foreign exchange and other non-cash adjustments | (3) |
Balance payable as at September 30, 2018 | 1,479 |
Fiscal 2017 Restructuring Plan | Facility Costs | |
Restructuring Reserve [Roll Forward] | |
Balance payable as at June 30, 2018 | 3,431 |
Accruals and adjustments | 1,057 |
Cash payments | (196) |
Foreign exchange and other non-cash adjustments | (226) |
Balance payable as at September 30, 2018 | $ 4,066 |
Acquisitions - Acquisition of H
Acquisitions - Acquisition of Hightail, Inc. (Details) - USD ($) | Feb. 14, 2018 | Sep. 30, 2018 | Jun. 30, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,578,641,000 | $ 3,580,129,000 | |
Hightail, Inc | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 20,500,000 | ||
Goodwill | 7,293,000 | ||
Goodwill expected to be tax deductible | 0 | ||
Deferred revenue | 5,200,000 | ||
Deferred revenue adjustment | 2,000,000 | ||
Acquired receivables, fair value | 700,000 | ||
Acquired receivables, gross contractual amount | 800,000 | ||
Acquired receivables, estimated uncollectible | $ 100,000 |
Acquisitions - Acquisition of_2
Acquisitions - Acquisition of Hightail, Inc., Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Feb. 14, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,578,641 | $ 3,580,129 | |
Hightail, Inc | |||
Business Acquisition [Line Items] | |||
Current assets | $ 1,290 | ||
Non-current tangible assets | 1,270 | ||
Liabilities assumed | (6,418) | ||
Total identifiable net assets | 13,242 | ||
Goodwill | 7,293 | ||
Net assets acquired | 20,535 | ||
Hightail, Inc | Customer assets | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets | 12,900 | ||
Hightail, Inc | Technology assets | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets | $ 4,200 |
Acquisitions - Acquisition of G
Acquisitions - Acquisition of Guidance Software (Details) - USD ($) $ in Thousands | Sep. 14, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Aug. 31, 2017 |
Purchase Price Allocation | |||||
Goodwill | $ 3,578,641 | $ 3,580,129 | |||
Guidance Software Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase consideration | $ 240,538 | ||||
Business Combination, Consideration Transferred [Abstract] | |||||
Cash consideration | 237,291 | ||||
Guidance shares already owned by OpenText through open market purchases (at fair value) | 3,247 | ||||
Purchase consideration | 240,538 | ||||
Purchase Price Allocation | |||||
Current assets | 24,744 | ||||
Non-current tangible assets | 11,583 | ||||
Liabilities assumed | (48,670) | ||||
Total identifiable net assets | 110,738 | ||||
Goodwill | 129,800 | ||||
Net assets acquired | 240,538 | ||||
Cash acquired from acquisition | 5,700 | ||||
Goodwill expected to be tax deductible | 1,900 | ||||
Deferred revenue | 26,600 | ||||
Deferred revenue adjustment | 7,600 | ||||
Acquired receivables, fair value | 10,300 | ||||
Acquired receivables, gross contractual amount | 11,800 | ||||
Acquired receivables, estimated uncollectible | 1,500 | ||||
Remeasurement gain | $ 800 | ||||
Guidance Software Inc. | Appraisal Proceedings | |||||
Business Combination, Consideration Transferred [Abstract] | |||||
Loss contingency accrual | 2,300 | $ 2,300 | $ 10,800 | ||
Guidance Software Inc. | Customer assets | |||||
Purchase Price Allocation | |||||
Acquired intangible assets | 71,230 | ||||
Guidance Software Inc. | Technology assets | |||||
Purchase Price Allocation | |||||
Acquired intangible assets | $ 51,851 |
Acquisitions - Appraisal Procee
Acquisitions - Appraisal Proceedings (Details) - Appraisal Proceedings - Guidance Software Inc. - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Dec. 31, 2017 | Sep. 14, 2017 | Aug. 31, 2017 | |
Business Acquisition [Line Items] | |||
Shares outstanding at acquisition (in shares) | 1,519,569 | ||
Percent of shares outstanding | 5.00% | ||
Loss contingency accrual | $ 2.3 | $ 2.3 | $ 10.8 |
Share price (in dollars per share) | $ 7.10 | ||
Payments for legal settlements | $ 8.5 |
Acquisitions - Acquisition of C
Acquisitions - Acquisition of Covisint Corporation (Details) - USD ($) $ in Thousands | Jul. 26, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Purchase Price Allocation | |||
Goodwill | $ 3,578,641 | $ 3,580,129 | |
Covisint Corporation | |||
Business Acquisition [Line Items] | |||
Purchase consideration | $ 102,800 | ||
Purchase Price Allocation | |||
Current assets | 41,586 | ||
Non-current tangible assets | 3,426 | ||
Liabilities assumed | (23,033) | ||
Total identifiable net assets | 75,879 | ||
Goodwill | 26,905 | ||
Net assets acquired | 102,784 | ||
Cash acquired from acquisition | 31,500 | ||
Goodwill expected to be tax deductible | 26,800 | ||
Deferred revenue | 12,200 | ||
Deferred revenue adjustment | 4,600 | ||
Acquired receivables, fair value | 7,800 | ||
Acquired receivables, gross contractual amount | 7,900 | ||
Acquired receivables, estimated uncollectible | 100 | ||
Covisint Corporation | Customer assets | |||
Purchase Price Allocation | |||
Acquired intangible assets | 36,600 | ||
Covisint Corporation | Technology assets | |||
Purchase Price Allocation | |||
Acquired intangible assets | $ 17,300 |
Supplemental Cash Flow Disclo_3
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid during the period for interest | $ 32,627 | $ 30,466 |
Cash received during the period for interest | 735 | 294 |
Cash paid during the period for income taxes | $ 8,367 | $ 9,582 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Basic earnings per share | ||
Net income attributable to OpenText | $ 36,324 | $ 36,596 |
Basic earnings per share attributable to OpenText (in dollars per share) | $ 0.14 | $ 0.14 |
Diluted earnings per share | ||
Net income attributable to OpenText | $ 36,324 | $ 36,596 |
Diluted earnings per share attributable to OpenText (in dollars per share) | $ 0.13 | $ 0.14 |
Weighted-average number of shares outstanding | ||
Basic (in shares) | 268,028 | 264,802 |
Effect of dilutive securities (in shares) | 1,359 | 1,433 |
Diluted (in shares) | 269,387 | 266,235 |
Excluded as anti-dilutive (in shares) | 1,868 | 2,474 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Director, Stephen Sadler | ||
Related Party Transaction [Line Items] | ||
Consultancy fees for business acquisition-related activities | $ 6 | $ 700 |
Subsequent Events - Cash Divide
Subsequent Events - Cash Dividends (Details) - $ / shares | Oct. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Subsequent Event [Line Items] | |||
Dividends declared per common share (in dollars per share) | $ 0.1518 | $ 0.1320 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared per common share (in dollars per share) | $ 0.1518 |
Subsequent Events - Acquisition
Subsequent Events - Acquisition of Liaison Technologies Inc. (Details) $ in Millions | 8 Months Ended |
Jun. 30, 2019USD ($) | |
Subsequent Event | Forecast | Liaison Technologies Inc. | |
Subsequent Event [Line Items] | |
Purchase consideration | $ 310 |