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DISCONTINUED OPERATIONS | 6 Months Ended
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Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | 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 $11.1 million on the sale of Carrington and transferred $9.9 million of cash and restricted cash balances in the second quarter of fiscal year 2019, subject to post-closing adjustments to be completed in the third quarter of fiscal year 2019. 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 $21.7 million on the sale of DeVry University and transferred $39.0 million of cash and restricted cash balances in the second quarter of fiscal year 2019, subject to post-closing adjustments to be completed in the third quarter of fiscal year 2019. The following is a summary of balance sheet information of assets and liabilities reported as held for sale (in thousands):
|  | December 31, |  |  | June 30, |  |  | December 31, |
|  | 2018 |  |  | 2018 |  |  | 2017 |
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | - |  |  | $ | 1 |  |  | $ | 902 |
Restricted Cash |  |  | - |  |  |  | 13,404 |  |  |  | 6,579 |
Accounts Receivable, Net |  |  | - |  |  |  | 25,294 |  |  |  | 25,404 |
Prepaid Expenses and Other Current Assets |  |  | - |  |  |  | 8,433 |  |  |  | 10,611 |
Total Current Assets Held for Sale |  |  | - |  |  |  | 47,132 |  |  |  | 43,496 |
Land, Building and Equipment Held for Sale, Net Noncurrent Assets: |  |  | - |  |  |  | - |  |  |  | 20,821 |
Intangible Assets |  |  | - |  |  |  | - |  |  |  | 20,200 |
Perkins Program Fund, Net |  |  | - |  |  |  | 13,450 |  |  |  | 13,450 |
Other Assets, Net |  |  | - |  |  |  | - |  |  |  | 3,420 |
Total Noncurrent Assets Held for Sale |  |  | - |  |  |  | 13,450 |  |  |  | 37,070 |
Total Assets Held for Sale |  | $ | - |  |  | $ | 60,582 |  |  | $ | 101,387 |
LIABILITIES: |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts Payable |  | $ | - |  |  | $ | 24,312 |  |  | $ | 19,801 |
Accrued Salaries, Wages and Benefits |  |  | - |  |  |  | 13,979 |  |  |  | 13,846 |
Accrued Liabilities |  |  | - |  |  |  | 1,514 |  |  |  | 8,044 |
Deferred Revenue |  |  | - |  |  |  | 16,634 |  |  |  | 15,517 |
Total Current Liabilities Held for Sale |  |  | - |  |  |  | 56,439 |  |  |  | 57,208 |
Noncurrent Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred Income Taxes |  |  | - |  |  |  | 216 |  |  |  | 878 |
Total Noncurrent Liabilities Held for Sale |  |  | - |  |  |  | 216 |  |  |  | 878 |
Total Liabilities Held for Sale |  | $ | - |  |  | $ | 56,655 |  |  | $ | 58,086 |
The following is a summary of income statement information of operations reported as discontinued operations (in thousands). The results include Carrington's and DeVry University's operations through the date of each respective sale.
|  | Three Months Ended |  |  | Six Months Ended |
|  | December 31, |  |  | December 31, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
REVENUE |  | $ | 83,414 |  |  | $ | 119,674 |  |  | $ | 195,716 |  |  | $ | 247,557 |
OPERATING COST AND EXPENSE: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of Educational Services |  |  | 48,075 |  |  |  | 69,747 |  |  |  | 109,416 |  |  |  | 144,688 |
Student Services and Administrative Expense |  |  | 43,920 |  |  |  | 47,537 |  |  |  | 99,292 |  |  |  | 109,073 |
Restructuring Expense (Gain) |  |  | 21 |  |  |  | 3,337 |  |  |  | (497 | ) |  |  | 10,192 |
Asset Impairment Charge - Intangible and Goodwill |  |  | - |  |  |  | 23,841 |  |  |  | - |  |  |  | 23,841 |
Asset Impairment Charge - Building and Equipment |  |  | (289 | ) |  |  | 23,391 |  |  |  | 1,953 |  |  |  | 23,391 |
Loss on Sale of Assets |  |  | - |  |  |  | 230 |  |  |  | - |  |  |  | 230 |
Total Operating Cost and Expense |  |  | 91,727 |  |  |  | 168,083 |  |  |  | 210,164 |  |  |  | 311,415 |
Loss from Discontinued Operations Before Income Taxes |  |  | (8,313 | ) |  |  | (48,409 | ) |  |  | (14,448 | ) |  |  | (63,858 | )
Loss on Disposal of Discontinued Operations Before Income Taxes |  |  | (32,714 | ) |  |  | - |  |  |  | (32,714 | ) |  |  | - |
Income Tax Benefit |  |  | 5,904 |  |  |  | 19,094 |  |  |  | 7,332 |  |  |  | 21,890 |
Loss from Discontinued Operations |  | $ | (35,123 | ) |  | $ | (29,315 | ) |  | $ | (39,830 | ) |  | $ | (41,968 | )

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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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