NOTE 2: DISCONTINUED OPERATIONS

On December 4, 2018, Adtalem completed the sale of Carrington to San Joaquin Valley College, Inc. (“SJVC”) for de minimis consideration. Adtalem has retained certain leases associated with the Carrington operations. Adtalem remains the primary lessee on these leases and subleases to Carrington. Adtalem records the proceeds from these subleases as an offset to operating costs. Adtalem also assigned certain leases to Carrington but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $11.3 million on the sale of Carrington and transferred $9.9 million of cash and restricted cash balances in fiscal year 2019, subject to post-closing adjustments to be completed in fiscal year 2020.

On December 11, 2018, Adtalem completed the sale of DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. The purchase agreement includes an earn-out entitling Adtalem to payments of up to $20 million over a ten-year period payable based on DeVry University’s free cash flow. In connection with the closing of the sale, Adtalem loaned to DeVry University $10 million under the terms of the promissory note, dated as of December 11, 2018 (the “Note”). The Note bears interest at a rate of 4% per annum, payable annually in arrears and has a maturity date of January 1, 2022. DeVry University may make prepayments on the loan. This loan is presented as Other Assets, Net on the Consolidated Balance Sheet. Adtalem has retained certain leases associated with DeVry University operations. Adtalem remains the primary lessee on these leases and subleases to DeVry University. In addition, Adtalem owns the buildings for certain DeVry University operating and administrative office locations and leases space to DeVry University under one-year operating leases, renewable annually at DeVry University’s option. Adtalem records the proceeds from these leases and subleases as an offset to operating costs. Adtalem also assigned certain leases to DeVry University but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $22.3 million on the sale of DeVry University and transferred $40.2 million of cash and restricted cash balances in fiscal year 2019.

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


	June 30,
	2019		2018
ASSETS:
Current Assets:
Cash and Cash Equivalents	$	—	$	1
Restricted Cash		—		13,404
Accounts Receivable, Net		—		25,294
Prepaid Expenses and Other Current Assets		—		8,433
Total Current Assets Held for Sale		—		47,132
Noncurrent Assets:
Perkins Program Fund, Net		—		13,450
Total Noncurrent Assets Held for Sale		—		13,450
Total Assets Held for Sale	$	—	$	60,582

LIABILITIES:
Current Liabilities:
Accounts Payable	$	—	$	24,312
Accrued Salaries, Wages and Benefits		—		13,979
Accrued Liabilities		—		1,514
Deferred Revenue		—		16,634
Total Current Liabilities Held for Sale		—		56,439
Noncurrent Liabilities:
Deferred Income Taxes		—		216
Total Noncurrent Liabilities Held for Sale		—		216
Total Liabilities Held for Sale	$	—	$	56,655

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


	Year Ended June 30,
	2019		2018		2017
REVENUE	$	195,716	$	484,268	$	601,891
OPERATING COST AND EXPENSE:
Cost of Educational Services		109,416		271,357		323,949
Student Services and Administrative Expense		101,447		222,323		249,109
Restructuring (Gain) Expense		(2,470)		18,507		16,852
Asset Impairment Charge - Intangible and Goodwill		—		44,041		—
Asset Impairment Charge - Building and Equipment		1,953		51,972		—
Loss on Sale of Assets		—		230		—
Regulatory Settlements		—		—		4,102
Loss on Assets Held for Sale		—		—		4,764
Total Operating Cost and Expense		210,346		608,430		598,776
Operating (Loss) Income from Discontinued Operations		(14,630)		(124,162)		3,115
Interest Income		—		—		20
(Loss) Income from Discontinued Operations Before Income Taxes		(14,630)		(124,162)		3,135
Loss on Disposal of Discontinued Operations Before Income Taxes		(33,604)		—		—
Income Tax Benefit (Provision)		7,791		44,016		(826)
(Loss) Income from Discontinued Operations	$	(40,443)	$	(80,146)	$	2,309