RESTRUCTURING CHARGES

3 Months Ended

Sep. 30, 2018

Restructuring and Related Activities [Abstract]

NOTE 10: RESTRUCTURING CHARGES

During the first three months of fiscal year 2019, Adtalem recorded restructuring charges primarily related to the impairment of the land, buildings and equipment at the Dominica campus of RUSM and severance related to workforce reductions in Dominica. On August 3, 2018, management announced its decision to relocate RUSM’s campus operations to Barbados and not return to Dominica. The land, buildings and equipment in Dominica have been fully impaired as management has determined the market value less the costs to sell the facilities or move the equipment is zero (see “Note 3: Summary of Significant Accounting Policies”). In addition, during the first three months of fiscal year 2019, Adtalem recorded restructuring charges primarily related to real estate consolidations at Adtalem’s home office. During the first three months of fiscal year 2018, Adtalem recorded restructuring charges primarily related to workforce reductions at Adtalem’s home office. When estimating costs of exiting lease space, estimates are made which could differ materially from actual results and result in additional restructuring charges or reversals in future periods.

Termination benefit charges, as a result of reducing Adtalem’s workforce by 176 and 7 positions in the first three months of fiscal year 2019 and 2018, respectively, represented severance pay and benefits for these employees. Adtalem’s home office is classified as “Home Office and Other” in “Note 14: Segment Information.” Pre-tax restructuring charges by segment were as follows (in thousands):

	Three Months Ended September 30, 2018
	Real Estate ‎ and Other		Termination ‎ Benefits			Total
Medical and Healthcare	$	37,753	$	1,262		$	39,015
Technology and Business		75		-			75
Home Office and Other		509		(51	)		458
Total	$	38,337	$	1,211		$	39,548

	Three Months Ended September 30, 2017
	Real Estate ‎ and Other			Termination ‎ Benefits		Total
Medical and Healthcare	$	26		$	86	$	112
Home Office and Other		(625	)		1,650		1,025
Total	$	(599	)	$	1,736	$	1,137

The following table summarizes the separation and restructuring plan activity for the fiscal years 2019 and 2018, for which cash payments are required (in thousands):


Liability balance at June 30, 2017	$	46,115
Increase in liability (separation and other charges)		19,893
Reduction in liability (payments and adjustments)		(27,081	)
Liability balance at June 30, 2018		38,927
Increase in liability (separation and other charges)		1,465
Reduction in liability (payments and adjustments)		(7,496	)
Liability balance at September 30, 2018	$	32,896

Of this liability balance, $14.7 million is recorded as Accrued Liabilities and $18.2 million is recorded as Other Liabilities on the Consolidated Balance Sheet as of September 30, 2018. 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 out for periods of up to 7 years.