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DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | 3 Months Ended
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Sep. 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 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, 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 three months ended September 30, 2018, management identified additional assets that will be divested with DeVry University and recorded impairment charges of $2.2 million to write-down the building and equipment to zero based on the fair value market value of the DeVry University operations. These impairment charges were in addition to $58.6 million of impairment charges for assets that will be divested with DeVry University that were recorded in fiscal year 2018. 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 fiscal year ended June 30, 2018, management identified assets that will be divested with Carrington and recorded impairment charges of $37.4 million to write-down the 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):
|  | September 30, |  |  | June 30, |  |  | September 30, |
|  | 2018 |  |  | 2018 |  |  | 2017 |
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 19,880 |  |  | $ | 1 |  |  | $ | 649 |
Restricted Cash |  |  | 15,967 |  |  |  | 13,404 |  |  |  | 5,887 |
Accounts Receivable, Net |  |  | 39,508 |  |  |  | 25,294 |  |  |  | 37,916 |
Prepaid Expenses and Other Current Assets |  |  | 9,479 |  |  |  | 8,433 |  |  |  | 9,717 |
Total Current Assets Held for Sale |  |  | 84,834 |  |  |  | 47,132 |  |  |  | 54,169 |
Land, Building and Equipment Held for Sale, Net |  |  | - |  |  |  | - |  |  |  | 59,154 |
Noncurrent Assets: |  |  |  |  |  |  |  |  |  |  |  |
Intangible Assets |  |  | - |  |  |  | - |  |  |  | 21,845 |
Goodwill |  |  | - |  |  |  | - |  |  |  | 22,196 |
Perkins Program Fund, Net |  |  | 13,450 |  |  |  | 13,450 |  |  |  | 13,450 |
Other Assets, Net |  |  | - |  |  |  | - |  |  |  | 4,881 |
Total Noncurrent Assets Held for Sale |  |  | 13,450 |  |  |  | 13,450 |  |  |  | 62,372 |
Total Assets Held for Sale |  | $ | 98,284 |  |  | $ | 60,582 |  |  | $ | 175,695 |
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts Payable |  | $ | 23,570 |  |  | $ | 24,312 |  |  | $ | 25,276 |
Accrued Salaries, Wages and Benefits |  |  | 8,327 |  |  |  | 13,979 |  |  |  | 11,090 |
Accrued Liabilities |  |  | 5,004 |  |  |  | 1,514 |  |  |  | 8,815 |
Deferred Revenue |  |  | 47,289 |  |  |  | 16,634 |  |  |  | 50,041 |
Total Current Liabilities Held for Sale |  |  | 84,190 |  |  |  | 56,439 |  |  |  | 95,222 |
Noncurrent Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred Income Taxes |  |  | 216 |  |  |  | 216 |  |  |  | 915 |
Total Noncurrent Liabilities Held for Sale |  |  | 216 |  |  |  | 216 |  |  |  | 915 |
Total Liabilities Held for Sale |  | $ | 84,406 |  |  | $ | 56,655 |  |  | $ | 96,137 |
The following is a summary of income statement information of operations reported as discontinued operations (in thousands):
|  | Three Months Ended |
|  | September 30, |
|  | 2018 |  |  | 2017 |
REVENUE |  | $ | 112,302 |  |  | $ | 127,882 |
OPERATING COST AND EXPENSE: |  |  |  |  |  |  |  |
Cost of Educational Services |  |  | 61,341 |  |  |  | 74,940 |
Student Services and Administrative Expense |  |  | 55,372 |  |  |  | 61,536 |
Restructuring (Gain) Expense |  |  | (518 | ) |  |  | 6,855 |
Asset Impairment Charge - Building and Equipment |  |  | 2,242 |  |  |  | - |
Total Operating Cost and Expense |  |  | 118,437 |  |  |  | 143,331 |
Operating Loss from Discontinued Operations |  |  | (6,135 | ) |  |  | (15,449 | )
Income Tax Benefit |  |  | 1,428 |  |  |  | 2,796 |
Loss from Discontinued Operations |  | $ | (4,707 | ) |  | $ | (12,653 | )

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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