RESTRUCTURING CHARGES

3 Months Ended

Sep. 30, 2019

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

NOTE 10: RESTRUCTURING CHARGES

During the first quarter 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. During the first quarter 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 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 first quarter of fiscal year 2019, Adtalem recorded restructuring charges primarily related to 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, resulting from reducing Adtalem’s workforce by 15 and 176 positions in the first quarter of fiscal year 2020 and 2019, respectively, represented severance pay and benefits for these employees. Adtalem’s home office is classified as “Home Office and Other” in “Note 15: Segment Information.” Pre-tax restructuring charges by segment were as follows (in thousands):

	Three Months Ended September 30, 2019						Three Months Ended September 30, 2018
	Real Estate		Termination				Real Estate		Termination
	and Other		Benefits		Total		and Other		Benefits		Total
Medical and Healthcare	$	127	$	—	$	127	$	37,753	$	1,262	$	39,015
Financial Services		1,690		289		1,979		—		—		—
Home Office and Other		4,122		302		4,424		509		(51)		458
Total	$	5,939	$	591	$	6,530	$	38,262	$	1,211	$	39,473

The following table summarizes the separation and restructuring plan activity for the fiscal years 2020 and 2019, for which cash payments are required (in thousands):

Liability balance at June 30, 2018	$	38,927
Increase in liability (separation and other charges)		8,870
Reduction in liability (payments and adjustments)		(22,714)
Liability balance at June 30, 2019		25,083
ASC 842 (Leases) Adjustment (1)		(25,030)
Liability balance at July 1, 2019		53
Increase in liability (separation and other charges)		591
Reduction in liability (payments and adjustments)		(500)
Liability balance at September 30, 2019	$	144

⁽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. See “Note 3: Summary of Significant Accounting Policies” for further details.

The liability balance of $0.1 million as of September 30, 2019 is recorded as Accrued Liabilities on the Consolidated Balance Sheet. This liability balance represents 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 within the next 12 months.