Restructuring Charges

3 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring Charges

5. Restructuring Charges

During the first quarter of fiscal year 2021, Adtalem recorded restructuring charges primarily related to Adtalem’s home office and ACAMS real estate consolidations. 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. 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 September 30, 2020						Three Months Ended September 30, 2019
	Real Estate and Other		Termination Benefits		Total		Real Estate and Other		Termination Benefits		Total
Medical and Healthcare	$	—	$	—	$	—	$	127	$	—	$	127
Financial Services		1,415		—		1,415		1,690		289		1,979
Home Office and Other		2,318		490		2,808		4,122		302		4,424
Total	$	3,733	$	490	$	4,223	$	5,939	$	591	$	6,530

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)		(1,688)
Liability balance as of September 30, 2020	$	237

⁽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.

The liability balance of $0.2 million is recorded as accrued liabilities on the Consolidated Balance Sheet as of September 30, 2020. 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. We have substantially completed our current restructuring plans. We continue to incur restructuring charges or reversals related to exiting leased space from previous restructuring activities. Management may institute future restructuring plans.