DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

3 Months Ended

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	)