RESTRUCTURING CHARGES

9 Months Ended

Mar. 31, 2019

Restructuring and Related Activities [Abstract]

NOTE 10: RESTRUCTURING CHARGES

During the third quarter and first nine 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. In January 2019, RUSM relocated its campus operations to Barbados with no plans to 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 third quarter and first nine months of fiscal year 2019, Adtalem recorded restructuring charges primarily related to real estate consolidations at Adtalem Brazil and Adtalem’s home office. During the third quarter and first nine months of fiscal year 2018, Adtalem recorded restructuring charges related to workforce reductions and real estate consolidations at the medical and veterinary schools and 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 203 and 111 positions in the first nine 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 March 31, 2019									Nine Months Ended March 31, 2019
	Real Estate and Other			Termination Benefits			Total			Real Estate and Other		Termination Benefits		Total
Medical and Healthcare	$	(110	)	$	(23	)	$	(133	)	$	40,033	$	1,294	$	41,327
Technology and Business		1,716			-			1,716			1,901		-		1,901
Home Office and Other		2,271			48			2,319			3,748		119		3,867
Total	$	3,877		$	25		$	3,902		$	45,682	$	1,413	$	47,095

	Three Months Ended March 31, 2018						Nine Months Ended March 31, 2018
	Real Estate and Other		Termination Benefits		Total		Real Estate and Other			Termination Benefits		Total
Medical and Healthcare	$	-	$	530	$	530	$	26		$	616	$	642
Home Office and Other		46		45		91		(419	)		2,961		2,542
Total	$	46	$	575	$	621	$	(393	)	$	3,577	$	3,184

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)		4,761
Reduction in liability (payments and adjustments)		(20,568	)
Liability balance at March 31, 2019	$	23,120

Of this liability balance, $9.0 million is recorded as Accrued Liabilities and $14.1 million is recorded as Other Liabilities on the Consolidated Balance Sheet as of March 31, 2019. These liability balances primarily represent rent accruals and costs for employees who have either not yet separated from Adtalem or for whom 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.