XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.8.0.1

FAIR VALUE MEASUREMENTS | 3 Months Ended
--- | ---
Sep. 30, 2017
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | NOTE 5: FAIR VALUE MEASUREMENTS Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets and assets of businesses where the long-term value of the operations have been impaired. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, Adtalem uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In some cases where market prices are not available, Adtalem makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3. Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2017. See “Note 9: Intangible Assets” for further discussion on the impairment review including valuation techniques and assumptions. During the second quarter of fiscal year 2017, management committed to a plan to sell the DeVry University and Carrington co-located campus in Pomona, California, which met criteria to be classified as an asset held for sale. This required a write-down of the assets to fair market value less costs to sell. The building is being marketed to prospective buyers and is available for immediate sale. Buyers have been identified and a sale is expected to close by March 31, 2018. We used significant unobservable inputs (Level 3) in our analysis, including third party offers received to acquire the building. Based on third party offers, management estimated the assets’ fair market values less costs to sell at approximately $11.3 million, which resulted in the carrying value exceeding the fair market value by $4.8 million. No change in fair value has occurred since the original re-valuation date. As a result, Land, Building and Equipment Held for Sale, Net of $11.3 million was recorded on the Consolidated Balance Sheets at September 30, 2017 and June 30, 2017. See “Note 2: Assets Held for Sale” for further discussion. During the first quarter of fiscal year 2018, the campuses of AUC and RUSM were damaged from Hurricanes Irma and Maria, respectively. Based on current estimates, using significant unobservable inputs (Level 3) in our analysis, we recorded impairment charges to building, building improvements, furniture and equipment of $10.9 million in the first three months of fiscal year 2018. The impairment charges are included in Cost of Educational Services in the Consolidated Statements of Income. The following table presents Adtalem's assets and liabilities at September 30, 2017, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).
|  | Level 1 |  | Level 2 |  | Level 3 |
Cash and Cash Equivalents |  | $ | 273,751 |  | $ | - |  | $ | - |
Available-for-Sale Investments: |  |  |  |  |  |  |  |  |  |
Marketable Securities, short-term |  |  | 4,139 |  |  | - |  |  | - |
Institutional Loans Receivable, Net |  |  | - |  |  | 46,825 |  |  | - |
Deferred Acquisition Obligations |  |  | - |  |  | 19,611 |  |  | - |
FIES Receivable |  |  | - |  |  | 16,707 |  |  | - |
Total Financial Assets at Fair Value |  | $ | 277,890 |  | $ | 83,143 |  | $ | - |
The following table presents Adtalem's assets and liabilities at June 30, 2017, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).
|  | Level 1 |  | Level 2 |  | Level 3 |
Cash and Cash Equivalents |  | $ | 241,979 |  | $ | - |  | $ | - |
Available-for-Sale Investments: |  |  | 4,013 |  |  |  |  |  |  |
Marketable Securities, short-term |  |  |  |  |  | - |  |  | - |
Institutional Loans Receivable, Net |  |  | - |  |  | 47,418 |  |  | - |
Deferred Acquisition Obligations |  |  | - |  |  | 26,590 |  |  | - |
FIES Receivable |  |  | - |  |  | 22,860 |  |  | - |
Total Financial Assets at Fair Value |  | $ | 245,992 |  | $ | 96,868 |  | $ | - |
The following table presents Adtalem's assets and liabilities at September 30, 2016, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands).
|  | Level 1 |  | Level 2 |  | Level 3 |
Cash and Cash Equivalents |  | $ | 189,017 |  | $ | - |  | $ | - |
Available-for-Sale Investments: |  |  |  |  |  |  |  |  |  |
Marketable Securities, short-term |  |  | 3,738 |  |  | - |  |  | - |
Institutional Loans Receivable, Net |  |  | - |  |  | 50,212 |  |  | - |
Deferred Acquisition Obligations |  |  | - |  |  | 28,559 |  |  | - |
FIES Long-Term Receivable |  |  | - |  |  | 13,032 |  |  | - |
Total Financial Assets at Fair Value |  | $ | 192,755 |  | $ | 91,803 |  | $ | - |
Cash and Cash Equivalents and Investments in short-term Marketable Securities are valued using a market approach based on quoted market prices of identical instruments. The fair value of the institutional loans receivable included in Accounts Receivable, Net and Other Assets, Net on the Consolidated Balance Sheets as of September 30, 2017, June 30, 2017 and September 30, 2016 is estimated by discounting the future cash flows using current rates for similar arrangements. See “Note 6: Financing Receivables” for further discussion on these institutional loans receivable. The fair value of the deferred acquisition obligations is estimated by discounting the future cash flows using current rates for similar arrangements. $6.9 million, $14.8 million and $10.9 million was classified as Accrued Expenses in the Consolidated Balance Sheets at September 30, 2017, June 30, 2017 and September 30, 2016, respectively, and $12.7 million, $11.8 million and $17.7 million was classified as Deferred Rent and Other Liabilities on the Consolidated Balance Sheets at September 30, 2017, June 30, 2017 and September 30, 2016, respectively. The fair value of Adtalem Brazil’s receivable under Brazil’s FIES public loan program included in Accounts Receivable, Net on the Consolidated Balance Sheets as of September 30, 2017 and June 30, 2017, and in Other Assets, Net on the Consolidated Balance Sheet as of September 30, 2016 is estimated by discounting the future cash flows using published market data on Brazilian interest and inflation rates. As of September 30, 2016, there were no assets or liabilities measured at fair value using Level 3 inputs.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueMeasurementInputsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration