RESTRUCTURING CHARGES

6 Months Ended

Dec. 31, 2018

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

NOTE 10: RESTRUCTURING CHARGES

During the second quarter and first six 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. On August 3, 2018, management announced its decision to relocate RUSM’s campus operations to Barbados and not 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 second quarter and first six months of fiscal year 2019, Adtalem recorded restructuring charges primarily related to real estate consolidations at Adtalem’s home office. During the second quarter and first six months of fiscal year 2018, Adtalem recorded restructuring charges primarily related to workforce reductions and real estate consolidations at 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 201 and 40 positions in the first six 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 December 31, 2018						Six Months Ended December 31, 2018
	Real Estate and Other		Termination Benefits		Total		Real Estate and Other		Termination Benefits		Total
Medical and Healthcare	$	2,389	$	56	$	2,445	$	40,143	$	1,317	$	41,460
Technology and Business		110		-		110		185		-		185
Home Office and Other		968		122		1,090		1,477		71		1,548
Total	$	3,467	$	178	$	3,645	$	41,805	$	1,388	$	43,193

	Three Months Ended December 31, 2017						Six Months Ended December 31, 2017
	Real Estate and Other		Termination Benefits		Total		Real Estate and Other			Termination Benefits		Total
Medical and Healthcare	$	-	$	-	$	-	$	26		$	86	$	112
Home Office and Other		160		1,266		1,426		(465	)		2,916		2,451
Total	$	160	$	1,266	$	1,426	$	(439	)	$	3,002	$	2,563

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)		2,797
Reduction in liability (payments and adjustments)		(13,557	)
Liability balance at December 31, 2018	$	28,167

Of this liability balance, $9.0 million is recorded as Accrued Liabilities and $19.2 million is recorded as Other Liabilities on the Consolidated Balance Sheet as of December 31, 2018. 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.