DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

12 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

NOTE 2: DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

On December 4, 2017, Adtalem announced the signing of a definitive agreement to divest DeVry University, pursuant to, and subject to the terms and conditions of a stock purchase agreement with Cogswell Education, LLC (“Cogswell”), with an expected closing date occurring in early fiscal year 2019. The decision to divest was made based on changes in strategic direction for the Adtalem portfolio of institutions. As the potential sale represents a strategic shift that will have a major effect on Adtalem’s operations and financial results, DeVry University is presented in Adtalem’s financial reporting as a discontinued operation. All periods presented disclose the assets and liabilities as held for sale, and operations and cash flows of DeVry University, which was previously a part of the U.S. Traditional Postsecondary reporting segment, as discontinued operations.

During the year ended June 30, 2018, asset impairment charges of $58.6 million were recorded to write-down intangible assets, goodwill, building and equipment to zero based on the fair value market value of the DeVry University operations. During the year ended June 30, 2018, management also completed the sale of the DeVry University and Carrington co-located campus in Pomona, California, for $11.1 million, which was previously recorded on the Consolidated Balance Sheet as held for sale for $11.3 million, resulting in a $0.2 million realized loss on sale of assets. The assets which were previously recorded as held for sale, the unrealized loss on assets held for sale and the loss on sale of assets associated with the Pomona, California, campus have all been classified within discontinued operations.

On June 28, 2018, Adtalem announced the signing of a definitive agreement to divest Carrington, pursuant to, and subject to the terms and conditions of a membership interest purchase agreement with San Joaquin Valley College (“SJVC”), with an expected closing date occurring in mid-fiscal year 2019. The decision to divest was made based on changes in strategic direction for the Adtalem portfolio of institutions. As the potential sale represents a strategic shift that will have a major effect on Adtalem’s operations and financial results, Carrington is presented in Adtalem’s financial reporting as a discontinued operation. All periods presented disclose the assets and liabilities as held for sale, and operations and cash flows of Carrington, which was previously a part of the U.S. Traditional Postsecondary reporting segment, as discontinued operations.

During the year ended June 30, 2018, asset impairment charges of $37.4 million were recorded to write-down intangible assets, building and equipment to zero based on the fair value market value of the Carrington operations.

The following is a summary of balance sheet information of assets and liabilities reported as held for sale (in thousands).

	June 30,
	2018		2017
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	1	$	1,553
Restricted Cash		13,404		7,805
Accounts Receivable, Net		25,294		24,685
Prepaid Expenses and Other Current Assets		8,433		6,223
Total Current Assets Held for Sale		47,132		40,266
Land, Building and Equipment Held for Sale, Net		-		62,561
Noncurrent Assets:
Intangible Assets		-		21,845
Goodwill		-		22,196
Perkins Program Fund, Net		13,450		13,450
Other Assets, Net		-		4,918
Total Noncurrent Assets Held for Sale		13,450		62,409
Total Assets Held for Sale	$	60,582	$	165,236

LIABILITIES:
Current Liabilities:
Accounts Payable	$	24,312	$	21,202
Accrued Salaries, Wages and Benefits		13,979		19,335
Accrued Liabilities		1,514		9,182
Deferred Revenue		16,634		14,016
Total Current Liabilities Held for Sale		56,439		63,735
Noncurrent Liabilities:
Deferred Income Taxes, Net		216		983
Total Noncurrent Liabilities Held for Sale		216		983
Total Liabilities Held for Sale	$	56,655	$	64,718

The following is a summary of income statement information of operations reported as discontinued operations (in thousands).

	Year Ended June 30,
	2018			2017			2016
REVENUE:
Tuition	$	446,534		$	566,721		$	722,879
Other Educational		37,734			35,170			40,583
Total Revenue		484,268			601,891			763,462
OPERATING COST AND EXPENSE:
Cost of Educational Services		271,357			323,949			417,827
Student Services and Administrative Expense		222,323			249,109			301,403
Restructuring Expense		18,507			16,852			71,838
Asset Impairment Charge - Intangibles and Goodwill		44,041			-			147,660
Asset Impairment Charge - Building and Equipment		51,972			-			-
Loss on Sale of Assets		230			-			-
Regulatory Settlements		-			4,102			-
Loss on Assets Held for Sale		-			4,764			-
Gain on Sale of Assets		-			-			(7,032	)
Total Operating Cost and Expense		608,430			598,776			931,696
Operating (Loss) Income from Discontinued Operations		(124,162	)		3,115			(168,234	)
Interest Income		-			20			113
(Loss) Income from Discontinued Operations Before Income Taxes		(124,162	)		3,135			(168,121	)
Income Tax Benefit (Provision)		44,016			(826	)		39,869
(Loss) Income from Discontinued Operations	$	(80,146	)	$	2,309		$	(128,252	)