NOTE 12: RESTRUCTURING CHARGES

During fiscal year 2017 and 2016, Adtalem recorded restructuring charges related to real estate consolidations and reductions in force (“RIF”) at DeVry University, Carrington and at Adtalem’s home office, and the wind-down of the administrative support operations of the medical and veterinary schools. Adtalem’s home office is classified as “Home Office and Other” in “Note 17: Segment Information” to the Consolidated Financial Statements. RIF charges, which reduced Adtalem workforce by 332 and 761 total positions in the fiscal years 2017 and 2016, respectively, represented severance pay and benefits for these employees. Pre-tax restructuring charges by segment were as follows (in thousands):

	Year Ended June 30, 2017						Year Ended June 30, 2016
	Real Estate		Termination Benefits		Total		Real Estate		Termination Benefits		Total
Medical and Healthcare	$	1,884	$	698	$	2,582	$	665	$	-	$	665
Professional Education		-		-		-		1,183		-		1,183
U.S. Traditional Postsecondary		12,538		4,315		16,853		48,244		23,614		71,858
Home Office and Other		7,858		2,532		10,390		-		519		519
Total	$	22,280	$	7,545	$	29,825	$	50,092	$	24,133	$	74,225

The following table summarizes the separation and restructuring plan activity for the fiscal years 2017 and 2016, for which cash payments are required (in thousands):

Liability balance at June 30, 2015	$	26,992
Increase in liability (separation and other charges)		67,495
Reduction in liability (payments and adjustments)		(46,264)
Liability balance at June 30, 2016		48,223
Increase in liability (separation and other charges)		27,620
Reduction in liability (payments and adjustments)		(29,728)
Liability balance at June 30, 2017	$	46,115

Of this liability balance, $15.4 million is recorded as Accrued Expenses and $30.7 million is recorded as Deferred Rent and Other Liabilities on the Consolidated Balance Sheet at June 30, 2017. These liability balances primarily represent rent accruals and costs for employees that have either not yet separated from Adtalem or their full severance has not yet been paid. All of these remaining costs are expected to be paid over the next 12 months except for rent charges, which may be paid out for periods of up to 8 years.