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Restructuring Charges

9 Months Ended

Mar. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring Charges

5. Restructuring Charges

During the third quarter and first nine months of fiscal year 2021, Adtalem recorded restructuring charges primarily related to Adtalem’s home office and ACAMS real estate consolidations. During the third quarter and first nine months of fiscal year 2020, Adtalem recorded restructuring charges primarily related to the sale of Becker’s courses for healthcare students and Adtalem’s home office real estate consolidations and workforce reductions. 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 represented severance pay and benefits for these employees. Adtalem’s home office is classified as “Home Office and Other” in Note 19 “Segment Information.” Pre-tax restructuring charges by segment were as follows (in thousands):


		Three Months Ended March 31, 2021									Nine Months Ended March 31, 2021
		Real Estate and Other			Termination Benefits			Total			Real Estate and Other			Termination Benefits			Total
Financial Services		$	—		$	—		$	—		$	1,415		$	—		$	1,415
Home Office and Other			1,217			—			1,217			4,700			490			5,190
Total		$	1,217		$	—		$	1,217		$	6,115		$	490		$	6,605


		Three Months Ended March 31, 2020									Nine Months Ended March 31, 2020
		Real Estate and Other			Termination Benefits			Total			Real Estate and Other			Termination Benefits			Total
Medical and Healthcare		$	810		$	—		$	810		$	1,129		$	225		$	1,354
Financial Services			—			—			—			2,862			254			3,116
Home Office and Other			255			789			1,044			4,779			1,090			5,869
Total		$	1,065		$	789		$	1,854		$	8,770		$	1,569		$	10,339

The following table summarizes the separation and restructuring plan activity for the fiscal years 2020 and 2021, for which cash payments are required (in thousands):


Liability balance as of June 30, 2019		$	25,083
ASC 842 (leases) adjustment ⁽¹⁾			(25,030)
Liability balance as of July 1, 2019			53
Increase in liability (separation and other charges)			4,955
Reduction in liability (payments and adjustments)			(3,573)
Liability balance as of June 30, 2020			1,435
Increase in liability (separation and other charges)			490
Reduction in liability (payments and adjustments)			(1,925)
Liability balance as of March 31, 2021		$	—

⁽¹⁾Reflects amounts reclassified out of the opening balance of restructuring reserve accruals as of June 30, 2019 to operating lease assets that was recorded with the adoption of ASC 842.

We have completed our current restructuring plans. However, we continue to incur restructuring charges or reversals related to exiting leased space from previous restructuring activities. Management may institute future restructuring plans.