XML 67 R28.htm IDEA: XBRL DOCUMENT
v3.20.1

Summary of Significant Accounting Policies (Policies) | 9 Months Ended
--- | ---
Mar. 31, 2020
Accounting Policies [Abstract] |
Basis of Presentation | Basis of Presentation A full listing of our significant accounting policies is described in Note 4 “Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2019 (“2019 Form 10-K”). We have prepared the accompanying unaudited consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which are normal and recurring in nature) considered necessary for a fair presentation have been included. These consolidated financial statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto included in our 2019 Form 10-K. We use the same accounting policies in preparing quarterly and annual financial statements. Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. The World Health Organization declared the novel coronavirus (“COVID-19” or “virus”) to be a public health emergency on January 30, 2020. The virus has had tragic consequences across the globe, and its full impact is not yet known as of the May 5, 2020 filing date of this Form 10-Q. While the virus did not have significant impacts to the third quarter of fiscal year 2020 results of operations, depending on the length and severity of social distancing and other measures established to combat the virus, there could be significant impacts on future results of operations. Due to the effects of COVID-19 on operations and the seasonal nature of our business, quarterly revenue, expenses, earnings, and cash flows are not necessarily indicative of the results that may be achieved for the full fiscal year. Certain prior period amounts have been reclassified for consistency with the current period presentation.
Recent Accounting Standards | Recent Accounting Standards Recently adopted accounting standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We adopted this guidance, along with the related clarifications and improvements, effective July 1, 2019 using the modified retrospective approach without adjusting prior comparative periods. The adoption of this standard significantly impacts our Consolidated Balance Sheets, but did not impact our Consolidated Statements of Income. We elected the practical expedients package which allows us to forego reassessing (i) whether any expired or existing contracts are or contain leases; (ii) the lease classification for any expired or expiring leases; and (iii) initial direct costs for any existing leases. We did not elect the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of operating lease assets. See Note 11 “Leases” for the disclosures related to this new accounting standard. The impact on the Consolidated Balance Sheet upon adoption of Accounting Standards Codification (“ASC”) 842 is as follows (in thousands, except par value): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | Adjustments due to | ​ | July 1,
​ |  | 2019 |  | adoption of ASC 842 |  | 2019
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 299,445 | ​ | $ | — | ​ | $ | 299,445
Investments in marketable securities | ​ |  | 8,680 | ​ |  | — | ​ |  | 8,680
Restricted cash | ​ |  | 1,022 | ​ |  | — | ​ |  | 1,022
Accounts receivable, net | ​ |  | 157,829 | ​ |  | — | ​ |  | 157,829
Prepaid expenses and other current assets | ​ |  | 37,724 | ​ |  | (3,483) | ​ |  | 34,241
Total current assets | ​ |  | 504,700 | ​ |  | (3,483) | ​ |  | 501,217
Noncurrent assets: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Property and equipment, net | ​ | ​ | 364,683 | ​ | ​ | — | ​ | ​ | 364,683
Operating lease assets | ​ |  | — | ​ |  | 282,978 | ​ |  | 282,978
Deferred income taxes | ​ |  | 18,314 | ​ |  | — | ​ |  | 18,314
Intangible assets, net | ​ |  | 418,097 | ​ |  | — | ​ |  | 418,097
Goodwill | ​ |  | 874,451 | ​ |  | — | ​ |  | 874,451
Other assets, net | ​ |  | 62,451 | ​ |  | — | ​ |  | 62,451
Total noncurrent assets | ​ |  | 1,737,996 | ​ |  | 282,978 | ​ |  | 2,020,974
Total assets | ​ | $ | 2,242,696 | ​ | $ | 279,495 | ​ | $ | 2,522,191
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and shareholders' equity: | ​ |  |  | ​ |  |  | ​ |  |
Current liabilities: | ​ |  |  | ​ |  |  | ​ |  |
Accounts payable | ​ | $ | 57,627 | ​ | $ | — | ​ | $ | 57,627
Accrued salaries, wages, and benefits | ​ |  | 64,492 | ​ |  | — | ​ |  | 64,492
Accrued liabilities | ​ |  | 86,722 | ​ |  | (16,946) | ​ |  | 69,776
Deferred revenue | ​ |  | 99,790 | ​ |  | — | ​ |  | 99,790
Current operating lease liabilities | ​ |  | — | ​ |  | 66,707 | ​ |  | 66,707
Current portion of long-term debt | ​ |  | 3,000 | ​ |  | — | ​ |  | 3,000
Total current liabilities | ​ |  | 311,631 | ​ |  | 49,761 | ​ |  | 361,392
Noncurrent liabilities: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Long-term debt | ​ |  | 398,094 | ​ |  | — | ​ |  | 398,094
Long-term operating lease liabilities | ​ |  | — | ​ |  | 269,387 | ​ |  | 269,387
Deferred income taxes | ​ |  | 29,426 | ​ |  | — | ​ |  | 29,426
Other liabilities | ​ |  | 102,472 | ​ |  | (39,653) | ​ |  | 62,819
Total noncurrent liabilities | ​ |  | 529,992 | ​ |  | 229,734 | ​ |  | 759,726
Total liabilities | ​ |  | 841,623 | ​ |  | 279,495 | ​ |  | 1,121,118
Redeemable noncontrolling interest | ​ |  | 9,543 | ​ |  | — | ​ |  | 9,543
Shareholders' equity: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Common stock, $0.01 par value | ​ |  | 801 | ​ |  | — | ​ |  | 801
Additional paid-in capital | ​ |  | 486,061 | ​ |  | — | ​ |  | 486,061
Retained earnings | ​ |  | 2,012,902 | ​ |  | — | ​ |  | 2,012,902
Accumulated other comprehensive loss | ​ |  | (137,290) | ​ |  | — | ​ |  | (137,290)
Treasury stock, at cost | ​ |  | (970,944) | ​ |  | — | ​ |  | (970,944)
Total shareholders' equity | ​ |  | 1,391,530 | ​ |  | — | ​ |  | 1,391,530
Total liabilities and shareholders' equity | ​ | $ | 2,242,696 | ​ | $ | 279,495 | ​ | $ | 2,522,191
​ Upon the adoption of ASC 842, the following balances were removed from the Consolidated Balance Sheet as of July 1, 2019: (i) $3.5 million of prepaid rent balances within prepaid expenses and other current assets; (ii) $6.8 million of current deferred rent liability balances within accrued liabilities; (iii) $10.1 million of current restructure liability balances within accrued liabilities; (iv) $24.8 million of noncurrent deferred rent liability balances within other liabilities; and (v) $14.9 million of noncurrent restructure liability balances within other liabilities. In March 2020, FASB issued ASU No. 2020-04: “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance was issued to provide for temporary optional expedients and exceptions to the current guidance on certain contract modifications and hedge relationships to ease the burdens related to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) or other reference rates to alternative reference rates. The guidance is effective as of March 12, 2020 through December 31, 2022. We adopted this guidance in the third quarter of fiscal year 2020 and is not expected to have a significant effect on Adtalem’s Consolidated Financial Statements. Recently issued accounting standards not yet adopted In June 2016, FASB issued ASU No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The guidance was issued to provide financial statement users with more decision-useful information about the expected losses on financial instruments by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses by requiring a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Management is evaluating the impact the guidance will have on Adtalem’s Consolidated Financial Statements and believes the guidance will be applied to our allowance for bad debts on trade receivables and institutional loans and will not have a significant impact on Adtalem’s Consolidated Financial Statements.
Reclassifications | Reclassifications Beginning in the first quarter of fiscal year 2020, Adtalem Brazil operations were classified as discontinued operations. See Note 4 “Discontinued Operations and Assets Held for Sale” for additional information. Prior period amounts have been revised to conform to the current classification. Certain expenses in prior periods previously allocated to Adtalem Brazil within our former Business and Law segment have been reclassified to the Home Office and Other segment based on discontinued operation reporting guidance regarding allocation of corporate overhead. For fiscal year 2020, home office costs to support the remaining businesses are being allocated to the Medical and Healthcare and Financial Services segments. See Note 20 “Segment Information” for additional information.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). + References No definition available. + Details
Name: | us-gaap_BasisOfAccountingPolicyPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact. + References No definition available. + Details
Name: | us-gaap_NewAccountingPronouncementsPolicyPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for reclassifications that affects the comparability of the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 + Details
Name: | us-gaap_PriorPeriodReclassificationAdjustmentDescription
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration