Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | Apr. 25, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Adtalem Global Education Inc. | |
Entity Central Index Key | 0000730464 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | ATGE | |
Entity Common Stock, Shares Outstanding | 56,582,000 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Current Assets: | |||
Cash and Cash Equivalents | $ 321,211 | $ 430,690 | $ 265,325 |
Investments in Marketable Securities | 8,341 | 4,255 | 4,200 |
Restricted Cash | 391 | 310 | 498 |
Accounts Receivable, Net | 155,372 | 146,726 | 155,418 |
Prepaid Expenses and Other Current Assets | 54,776 | 58,887 | 70,275 |
Current Assets Held for Sale | 0 | 47,132 | 43,624 |
Total Current Assets | 540,091 | 688,000 | 539,340 |
Land, Building and Equipment: | |||
Land | 43,801 | 48,177 | 48,359 |
Building | 374,535 | 389,129 | 383,880 |
Equipment | 279,170 | 302,516 | 304,971 |
Construction in Progress | 16,445 | 25,360 | 29,711 |
Land, Building and Equipment, Gross | 713,951 | 765,182 | 766,921 |
Accumulated Depreciation | (354,330) | (376,528) | (363,556) |
Land, Building and Equipment Held for Sale, Net | 0 | 0 | 14,994 |
Land, Building and Equipment, Net | 359,621 | 388,654 | 418,359 |
Noncurrent Assets: | |||
Deferred Income Taxes | 19,199 | 38,780 | 30,500 |
Intangible Assets, Net | 355,147 | 362,931 | 385,142 |
Goodwill | 811,260 | 813,887 | 845,843 |
Other Assets, Net | 63,385 | 39,259 | 32,021 |
Other Assets Held for Sale | 0 | 13,450 | 37,121 |
Total Noncurrent Assets | 1,248,991 | 1,268,307 | 1,330,627 |
TOTAL ASSETS | 2,148,703 | 2,344,961 | 2,288,326 |
Current Liabilities: | |||
Accounts Payable | 42,322 | 47,477 | 33,992 |
Accrued Salaries, Wages and Benefits | 54,901 | 71,289 | 60,794 |
Accrued Liabilities | 86,622 | 80,803 | 77,917 |
Deferred Revenue | 122,360 | 106,773 | 133,299 |
Current Portion of Long-Term Debt | 3,000 | 3,000 | 0 |
Current Liabilities Held for Sale | 0 | 56,439 | 72,624 |
Total Current Liabilities | 309,205 | 365,781 | 378,626 |
Noncurrent Liabilities: | |||
Long-Term Debt | 288,589 | 290,073 | 120,000 |
Deferred Income Taxes | 33,278 | 29,115 | 33,519 |
Other Liabilities | 104,562 | 131,380 | 96,920 |
Income Taxes Payable | 0 | 0 | 88,562 |
Noncurrent Liabilities Held for Sale | 0 | 216 | 1,021 |
Total Noncurrent Liabilities | 426,429 | 450,784 | 340,022 |
TOTAL LIABILITIES | 735,634 | 816,565 | 718,648 |
COMMITMENTS AND CONTINGENCIES (NOTE 13) | |||
NONCONTROLLING INTEREST | 8,482 | 9,110 | 11,391 |
SHAREHOLDERS' EQUITY: | |||
Common Stock, $0.01 Par Value, 200,000,000 Shares Authorized; 56,954,000, 59,893,000 and 60,369,000 Shares Outstanding at March 31, 2019, June 30, 2018 and March 31, 2018, respectively | 801 | 793 | 792 |
Additional Paid-in Capital | 483,043 | 454,653 | 450,120 |
Retained Earnings | 1,964,169 | 1,917,373 | 1,852,122 |
Accumulated Other Comprehensive Loss | (148,706) | (142,168) | (59,195) |
Treasury Stock, at Cost, 23,149,000, 19,390,000 and 18,852,000 Shares at March 31, 2019, June 30, 2018 and March 31, 2018, respectively | (894,720) | (711,365) | (685,552) |
TOTAL SHAREHOLDERS' EQUITY | 1,404,587 | 1,519,286 | 1,558,287 |
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY | $ 2,148,703 | $ 2,344,961 | $ 2,288,326 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Common Stock, Par Value | $ 0.01 | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Common Stock, Shares Outstanding | 56,954,000 | 59,893,000 | 60,369,000 |
Treasury Stock, Shares | 23,149,000 | 19,390,000 | 18,852,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE | $ 308,609 | $ 310,070 | $ 909,393 | $ 911,424 |
OPERATING COST AND EXPENSE: | ||||
Cost of Educational Services | 156,339 | 159,312 | 463,224 | 489,931 |
Student Services and Administrative Expense | 102,062 | 97,633 | 300,548 | 276,000 |
Restructuring Expense | 3,902 | 621 | 47,095 | 3,184 |
Insurance Settlement Gain | 0 | 0 | (15,571) | 0 |
Total Operating Cost and Expense | 262,303 | 257,566 | 795,296 | 769,115 |
Operating Income from Continuing Operations | 46,306 | 52,504 | 114,097 | 142,309 |
OTHER INCOME (EXPENSE): | ||||
Interest and Dividend Income | 2,003 | 1,329 | 6,121 | 4,812 |
Interest Expense | (5,269) | (2,850) | (17,027) | (7,247) |
Investment Gain (Loss) | 715 | 0 | (407) | 0 |
Net Other Expense | (2,551) | (1,521) | (11,313) | (2,435) |
Income from Continuing Operations Before Income Taxes | 43,755 | 50,983 | 102,784 | 139,874 |
Income Tax Provision | (7,542) | (8,024) | (18,820) | (122,775) |
Equity Method Investment Loss | 0 | (100) | 0 | (138) |
Income from Continuing Operations | 36,213 | 42,859 | 83,964 | 16,961 |
DISCONTINUED OPERATIONS (NOTE 2): | ||||
Income (Loss) from Discontinued Operations Before Income Taxes | 2,038 | (7,422) | (12,410) | (71,280) |
Loss on Disposal of Discontinued Operations Before Income Taxes | (265) | 0 | (32,979) | 0 |
Income Tax (Provision) Benefit | (120) | 3,851 | 7,212 | 25,741 |
Income (Loss) from Discontinued Operations | 1,653 | (3,571) | (38,177) | (45,539) |
NET INCOME (LOSS) | 37,866 | 39,288 | 45,787 | (28,578) |
Net Loss (Income) Attributable to Noncontrolling Interest | 39 | 46 | (117) | (459) |
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION | 37,905 | 39,334 | 45,670 | (29,037) |
AMOUNTS ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION: | ||||
Income from Continuing Operations | 36,252 | 42,905 | 83,847 | 16,502 |
Income (Loss) from Discontinued Operations | 1,653 | (3,571) | (38,177) | (45,539) |
NET INCOME (LOSS) ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION | $ 37,905 | $ 39,334 | $ 45,670 | $ (29,037) |
Basic: | ||||
Continuing Operations | $ 0.62 | $ 0.70 | $ 1.42 | $ 0.27 |
Discontinued Operations | 0.03 | (0.06) | (0.64) | (0.74) |
Total | 0.65 | 0.64 | 0.77 | (0.47) |
Diluted: | ||||
Continuing Operations | 0.62 | 0.69 | 1.40 | 0.26 |
Discontinued Operations | 0.03 | (0.06) | (0.64) | (0.73) |
Total | $ 0.64 | $ 0.63 | $ 0.76 | $ (0.46) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
NET INCOME (LOSS) | $ 37,866 | $ 39,288 | $ 45,787 | $ (28,578) |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | ||||
Currency Translation (Loss) Gain | (5,238) | 1,598 | (6,193) | (101) |
Change in Fair Value of Available-For-Sale Securities | 50 | (48) | 36 | 25 |
COMPREHENSIVE INCOME (LOSS) | 32,678 | 40,838 | 39,630 | (28,654) |
COMPREHENSIVE LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTEREST | 138 | 17 | 51 | (451) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ADTALEM GLOBAL EDUCATION | $ 32,816 | $ 40,855 | $ 39,681 | $ (29,105) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ 45,787 | $ (28,578) |
Loss from Discontinued Operations | 38,177 | 45,539 |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||
Stock-Based Compensation Expense | 10,369 | 11,517 |
Depreciation | 31,758 | 33,554 |
Amortization of Intangible Assets | 6,231 | 7,333 |
Amortization of Deferred Debt Issuance Costs | 1,175 | 528 |
Provision for Bad Debts | 11,203 | 13,370 |
Deferred Income Taxes | 23,717 | 3,541 |
Loss on Disposals, Accelerated Depreciation and Adjustments to Land, Building and Equipment | 44,489 | 29,964 |
Realized Loss on Investments | 193 | 0 |
Unrealized Loss on Investments | 214 | 0 |
Insurance Settlement Gain | (15,571) | 0 |
Changes in Assets and Liabilities: | ||
Accounts Receivable | (20,838) | (18,967) |
Prepaid Expenses and Other | (39,127) | (30,625) |
Accounts Payable | (4,292) | (3,960) |
Accrued Salaries, Wages, Benefits and Liabilities | (4,566) | (29,538) |
Deferred Revenue | 15,688 | 29,003 |
Income Taxes Payable, Long-Term | 0 | 88,562 |
Net Cash Provided by Operating Activities-Continuing Operations | 144,607 | 151,243 |
Net Cash (Used in) Provided by Operating Activities-Discontinued Operations | (16,072) | 32,021 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 128,535 | 183,264 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital Expenditures | (50,853) | (50,433) |
Insurance Proceeds Received for Damage to Buildings and Equipment | 35,706 | 0 |
Sales of Marketable Securities | 1,625 | 0 |
Purchases of Marketable Securities | (6,070) | (145) |
Payment for Purchase of Businesses, Net of Cash Acquired | 0 | (4,041) |
Loan to DeVry University (see "Note 2: Discontinued Operations") | (10,000) | 0 |
Net Cash Used in Investing Activities-Continuing Operations | (29,592) | (54,619) |
Net Cash (Used in) Provided by Investing Activities-Discontinued Operations | (1,833) | 5,189 |
Cash and Restricted Cash Transferred in Divestitures of Discontinued Operations | (48,876) | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (80,301) | (49,430) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Exercise of Stock Options | 16,825 | 22,557 |
Employee Taxes Paid on Withholding Shares | (6,527) | (3,862) |
Proceeds from Stock Issued Under Colleague Stock Purchase Plan | 421 | 585 |
Repurchase of Common Stock for Treasury | (176,903) | (111,626) |
Payments of Seller Financed Obligations | (2,154) | (10,559) |
Borrowings Under Credit Facility | 0 | 258,000 |
Repayments Under Credit Facility | (2,250) | (263,000) |
NET CASH USED IN FINANCING ACTIVITIES | (170,588) | (107,905) |
Effects of Exchange Rate Differences | (449) | (714) |
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (122,803) | 25,215 |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 444,405 | 251,096 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 321,602 | 276,311 |
Less: Cash, Cash Equivalents and Restricted Cash of Discontinued Operations at End of Period | 0 | 10,488 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 321,602 | 265,823 |
Non-cash Investing and Financing Activity: | ||
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Options | $ (745) | $ 573 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Treasury Stock [Member] |
Beginning Balance at Jun. 30, 2017 | $ 1,669,039 | $ 781 | $ 415,912 | $ 1,881,397 | $ (59,119) | $ (569,932) |
Cumulative effect adjustment upon the adoption | (236) | (596) | 360 | |||
Net income (loss) | (29,037) | (29,037) | ||||
Foreign currency translation | (101) | (101) | ||||
Unrealized investment gains (losses), net of tax | 25 | 25 | ||||
Change in noncontrolling interest put option | (573) | (573) | ||||
Stock-based compensation | 11,517 | 11,517 | ||||
Net activity from stock-based compensation awards | 18,694 | 11 | 23,253 | (4,570) | ||
Proceeds from stock issued under Colleague Stock Purchase Plan | 585 | 34 | (25) | 576 | ||
Repurchase of common shares for treasury | (111,626) | (111,626) | ||||
Ending Balance at Mar. 31, 2018 | 1,558,287 | 792 | 450,120 | 1,852,122 | (59,195) | (685,552) |
Beginning Balance at Dec. 31, 2017 | 1,519,959 | 787 | 433,855 | 1,812,746 | (60,745) | (666,684) |
Net income (loss) | 39,334 | 39,334 | ||||
Foreign currency translation | 1,598 | 1,598 | ||||
Unrealized investment gains (losses), net of tax | (48) | (48) | ||||
Change in noncontrolling interest put option | 42 | 42 | ||||
Stock-based compensation | 2,737 | 2,737 | ||||
Net activity from stock-based compensation awards | 12,919 | 5 | 13,499 | (585) | ||
Proceeds from stock issued under Colleague Stock Purchase Plan | 194 | 29 | 165 | |||
Repurchase of common shares for treasury | (18,448) | (18,448) | ||||
Ending Balance at Mar. 31, 2018 | 1,558,287 | 792 | 450,120 | 1,852,122 | (59,195) | (685,552) |
Beginning Balance at Jun. 30, 2018 | 1,519,286 | 793 | 454,653 | 1,917,373 | (142,168) | (711,365) |
Cumulative effect adjustment upon the adoption | 0 | 381 | (381) | |||
Net income (loss) | 45,670 | 45,670 | ||||
Foreign currency translation | (6,193) | (6,193) | ||||
Unrealized investment gains (losses), net of tax | 36 | 36 | ||||
Change in noncontrolling interest put option | 745 | 745 | ||||
Stock-based compensation | 11,227 | 11,227 | ||||
Net activity from stock-based compensation awards | 10,298 | 8 | 17,075 | (6,785) | ||
Proceeds from stock issued under Colleague Stock Purchase Plan | 421 | 88 | 333 | |||
Repurchase of common shares for treasury | (176,903) | (176,903) | ||||
Ending Balance at Mar. 31, 2019 | 1,404,587 | 801 | 483,043 | 1,964,169 | (148,706) | (894,720) |
Beginning Balance at Dec. 31, 2018 | 1,429,647 | 801 | 479,946 | 1,926,134 | (143,518) | (833,716) |
Net income (loss) | 37,905 | 37,905 | ||||
Foreign currency translation | (5,238) | (5,238) | ||||
Unrealized investment gains (losses), net of tax | 50 | 50 | ||||
Change in noncontrolling interest put option | 130 | 130 | ||||
Stock-based compensation | 3,039 | 3,039 | ||||
Net activity from stock-based compensation awards | (86) | 0 | 40 | (126) | ||
Proceeds from stock issued under Colleague Stock Purchase Plan | 110 | 18 | 92 | |||
Repurchase of common shares for treasury | (60,970) | (60,970) | ||||
Ending Balance at Mar. 31, 2019 | $ 1,404,587 | $ 801 | $ 483,043 | $ 1,964,169 | $ (148,706) | $ (894,720) |
INTERIM FINANCIAL STATEMENTS
INTERIM FINANCIAL STATEMENTS | 9 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
INTERIM FINANCIAL STATEMENTS | NOTE 1: INTERIM FINANCIAL STATEMENTS For purposes of this report, “Adtalem,” “we,” “our,” “us,” or similar references refers to Adtalem Global Education Inc. and its consolidated subsidiaries, unless the context requires otherwise. The interim Consolidated Financial Statements include accounts of Adtalem and its wholly-owned and majority-owned subsidiaries. Adtalem’s wholly-owned subsidiaries include: Chamberlain University (“Chamberlain”) American University of the Caribbean School of Medicine (“AUC”) Ross University School of Medicine (“RUSM”) Ross University School of Veterinary Medicine (“RUSVM”) Association of Certified Anti-Money Laundering Specialists (“ACAMS”) Becker Professional Education (“Becker”) In addition, Adtalem maintains a 97.9% ownership interest in Adtalem Education of Brazil (“Adtalem Brazil”) and a 69% ownership interest in EduPristine. On December 4, 2018, Adtalem completed the sale of its previously wholly-owned subsidiary Carrington College (“Carrington”). On December 11, 2018, Adtalem completed the sale of its previously wholly-owned subsidiary DeVry University. Carrington and DeVry University are presented as discontinued operations. See “Note 2: Discontinued Operations” for additional details. These financial statements are unaudited but, in the opinion of management, contain all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial condition and results of operations of Adtalem. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”). The interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in Adtalem's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 and Adtalem’s Quarterly Report on Form 10-Q for the quarters ended September 30, 2018 and December 31, 2018, each as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three and nine months ended March 31, 2019 are not necessarily indicative of results to be expected for the entire fiscal year. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 2: DISCONTINUED OPERATIONS On December 4, 2018, Adtalem completed the sale of Carrington to San Joaquin Valley College, Inc. (“SJVC”) for de minimis consideration. Adtalem has retained certain leases associated with the Carrington operations. Adtalem remains the primary lessee on these leases and subleases to Carrington. Adtalem records the proceeds from these subleases as an offset to operating costs. Adtalem also assigned certain leases to Carrington but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $11.1 million on the sale of Carrington and transferred $9.9 million of cash and restricted cash balances in the second quarter of fiscal year 2019, subject to post-closing adjustments to be completed in the fourth quarter of fiscal year 2019. On December 11, 2018, Adtalem completed the sale of DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. The purchase agreement includes an earn-out entitling Adtalem to payments of up to $20 million over a ten-year period payable based on DeVry University’s free cash flow. In connection with the closing of the sale, Adtalem loaned to DeVry University $10 million under the terms of the promissory note, dated as of December 11, 2018 (the “Note”). The Note bears interest at a rate of 4% per annum, payable annually in arrears and has a maturity date of January 1, 2022. DeVry University may make prepayments on the loan. This loan is presented as Other Assets, Net on the Consolidated Balance Sheet. Adtalem has retained certain leases associated with DeVry University operations. Adtalem remains the primary lessee on these leases and subleases to DeVry University. In addition, Adtalem owns the buildings for certain DeVry University operating and administrative office locations and leases space to DeVry University under one-year operating leases, renewable annually at DeVry University’s option. Adtalem records the proceeds from these leases and subleases as an offset to operating costs. Adtalem also assigned certain leases to DeVry University but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $21.7 million on the sale of DeVry University and transferred $39.0 million of cash and restricted cash balances in the second quarter of fiscal year 2019, subject to post-closing adjustments to be completed in the fourth quarter of fiscal year 2019. The following is a summary of balance sheet information of assets and liabilities reported as held for sale (in thousands): March 31, June 30, March 31, 2019 2018 2018 ASSETS: Current Assets: Cash and Cash Equivalents $ - $ 1 $ 707 Restricted Cash - 13,404 9,781 Accounts Receivable, Net - 25,294 23,549 Prepaid Expenses and Other Current Assets - 8,433 9,587 Total Current Assets Held for Sale - 47,132 43,624 Land, Building and Equipment Held for Sale, Net - - 14,994 Noncurrent Assets: Intangible Assets - - 20,200 Perkins Program Fund, Net - 13,450 13,450 Other Assets, Net - - 3,471 Total Noncurrent Assets Held for Sale - 13,450 37,121 Total Assets Held for Sale $ - $ 60,582 $ 95,739 LIABILITIES: Current Liabilities: Accounts Payable $ - $ 24,312 $ 18,190 Accrued Salaries, Wages and Benefits - 13,979 11,610 Accrued Liabilities - 1,514 2,548 Deferred Revenue - 16,634 40,276 Total Current Liabilities Held for Sale - 56,439 72,624 Noncurrent Liabilities: Deferred Income Taxes - 216 1,021 Total Noncurrent Liabilities Held for Sale - 216 1,021 Total Liabilities Held for Sale $ - $ 56,655 $ 73,645 The following is a summary of income statement information of operations reported as discontinued operations (in thousands). The results include Carrington's and DeVry University's operations through the date of each respective sale. For the three months ended March 31, 2019, activity is related to adjustments to accounts based on settlement of balances. Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 REVENUE $ - $ 122,705 $ 195,716 $ 370,263 OPERATING COST AND EXPENSE: Cost of Educational Services - 65,182 109,416 209,871 Student Services and Administrative Expense (65 ) 53,057 99,227 162,130 Restructuring (Gain) Expense (1,973 ) 6,150 (2,470 ) 16,342 Asset Impairment Charge - Intangible and Goodwill - - - 23,841 Asset Impairment Charge - Building and Equipment - 5,738 1,953 29,129 Loss on Sale of Assets - - - 230 Total Operating Cost and Expense (2,038 ) 130,127 208,126 441,543 Income (Loss) from Discontinued Operations Before Income Taxes 2,038 (7,422 ) (12,410 ) (71,280 ) Loss on Disposal of Discontinued Operations Before Income Taxes (265 ) - (32,979 ) - Income Tax (Provision) Benefit (120 ) 3,851 7,212 25,741 Income (Loss) from Discontinued Operations $ 1,653 $ (3,571 ) $ (38,177 ) $ (45,539 ) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Consolidated Financial Statements include the accounts of Adtalem and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100%, but greater than 50%, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “Net Loss (Income) Attributable to Noncontrolling Interest” in our Consolidated Statements of Income (Loss). Unless indicated, or the context requires otherwise, references to years refer to Adtalem’s fiscal years. Equity/Cost Method Investment The equity method of accounting is used for an investment where we have the ability to influence the operating and financial decisions of the investee but do not possess more than a 50% ownership interest. Generally, this occurs when the ownership interest is greater than 20%. The investment is initially recorded at cost and classified as Other Assets, Net on the Consolidated Balance Sheets. The carrying amount of the investment is adjusted in subsequent periods for Adtalem’s share of the earnings or losses of the investee, which is recorded in the Consolidated Statements of Income (Loss) as Equity Method Investment Loss. The cost method of accounting is used for an investment where we do not have the ability to influence the operating and financial decisions of the investee. Generally, this occurs when the ownership interest is less than 20%. The investment is recorded at cost and classified as Other Assets, Net on the Consolidated Balance Sheets. Cash and Cash Equivalents Cash and cash equivalents can include time deposits, high-grade commercial paper, money market funds and bankers acceptances with original maturities of three months or less. Short-term investment objectives are to minimize risk and maintain liquidity. These investments are stated at cost (which approximates fair value) because of their short duration or liquid nature. Adtalem places its cash and temporary cash investments with high credit quality institutions. Cash and cash equivalent balances in U.S. bank accounts are generally in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash and cash equivalent balances in Brazilian bank accounts are generally in excess of the deposit insurance limits for Brazilian banks. Adtalem has not experienced any losses on its cash and cash equivalents. Management periodically evaluates the creditworthiness of the security issuers and financial institutions with which it invests and maintains deposit accounts. Financial Aid and Restricted Cash A significant portion of cash is received from students who participate in government financial aid and assistance programs which are subject to political and governmental budgetary considerations. There is no assurance that such funding will be maintained at current levels. Extensive and complex regulations in the U.S. and Brazil govern all of the government financial assistance programs in which students participate. Administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for disciplinary action, which could include the suspension, limitation or termination from such financial aid programs. Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in Adtalem’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers (students), in an amount that reflects the consideration we expect to be entitled in exchange for those goods or services. The following tables disaggregate revenue by source (in thousands): Three Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 217,423 $ - $ 46,558 $ - $ 263,981 Test Preparation - 19,533 3,349 (808 ) 22,074 Certifications - 8,029 - - 8,029 Conferences/Seminars - 3,860 - - 3,860 Memberships/Subscriptions - 4,299 - - 4,299 Other 6,152 214 - - 6,366 $ 223,575 $ 35,935 $ 49,907 $ (808 ) $ 308,609 Nine Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 630,083 $ - $ 149,792 $ - $ 779,875 Test Preparation - 60,049 9,999 (2,423 ) 67,625 Certifications - 23,527 - - 23,527 Conferences/Seminars - 17,405 - - 17,405 Memberships/Subscriptions - 12,135 - - 12,135 Other 8,219 607 - - 8,826 $ 638,302 $ 113,723 $ 159,791 $ (2,423 ) $ 909,393 Three Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 220,067 $ - $ 53,803 $ - $ 273,870 Test Preparation - 19,652 5,227 (532 ) 24,347 Certifications - 5,432 - - 5,432 Conferences/Seminars - 2,371 - - 2,371 Memberships/Subscriptions - 3,580 - - 3,580 Other - 470 - - 470 $ 220,067 $ 31,505 $ 59,030 $ (532 ) $ 310,070 Nine Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 614,649 $ - $ 181,078 $ - $ 795,727 Test Preparation - 56,641 15,524 (1,733 ) 70,432 Certifications - 21,259 - - 21,259 Conferences/Seminars - 13,334 - - 13,334 Memberships/Subscriptions - 9,852 - - 9,852 Other - 820 - - 820 $ 614,649 $ 101,906 $ 196,602 $ (1,733 ) $ 911,424 In addition, see “Note 14: Segment Information” for a disaggregation of revenue by geographical region. Performance Obligations and Revenue Recognition Higher Education: Higher education revenue consists of tuition, fees, books and other educational products. The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the term as instruction is delivered. Books and other educational product revenue is recognized when products are shipped or students receive access to electronic materials. Under certain circumstances, we report revenue from these transactions on a net basis because our performance obligation is to facilitate a transaction between the student and a vendor. Test Preparation: Test preparation revenue consists of test preparation course instruction and self-study materials sales. Becker test preparation revenue is recognized when access to the course materials is delivered to the customer. Adtalem Brazil and EduPristine test preparation course instruction revenue is recognized on a straight-line basis over the applicable instruction delivery periods. Certifications: Certification revenue consists of exam preparation guides, seminars, exam sitting fees and recertification fees. We recognize revenue for each of these items at a point in time when the applicable performance obligation is satisfied. Conferences/Seminars: Conference revenue consists of revenue from attendees, sponsors and exhibitors. We recognize revenue for all items related to conferences at the time of the conference. Seminar revenue consists of seminars delivered in live, live-online, or on-demand online formats. We recognize revenue for live and live-online seminars on the day of the seminar. On-demand online seminars, in which customers have access to a webcast of a seminar, are recognized on the day the customer places the order. Memberships/Subscriptions: Membership revenue is recognized on a straight-line basis over the membership period. Subscription revenue is recognized on a straight-line basis over the subscription period. Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied. Customer contracts generally have separately stated prices for each performance obligation contained in the contract. Therefore, each performance obligation generally has its own standalone selling price. For higher education students, arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction price at the beginning of the academic term. Students utilizing private funding or funding through Adtalem’s institutional loan program (see “Note 6: Financing Receivables” for further discussion) generally pay during or after the academic term is complete. For non-higher education customers, payment is typically due and collected at the time a customer places an order. Transaction Price Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services. For higher education, students may receive discounts, scholarships or refunds, which gives rise to variable consideration. The amounts of discounts or scholarships are applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is reduced directly by these discounts or scholarships from the amount of the standard tuition rate charged. Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Adtalem to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Adtalem in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Adtalem’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within Accrued Liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term. Management reassesses collectability throughout the period revenue is recognized by the Adtalem institutions, on a student-by-student basis. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis. For test preparation and other Professional Education products, the transaction price is equal to the amount charged to the customer, which is the standard rate, less any discounts and an estimate for returns or refunds. We believe it is not probable that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. Therefore, the estimate of variable consideration is not constrained. Contract Balances For higher education institutions, students are billed at the beginning of each academic term and payment is due at that time. Adtalem’s performance obligation is to provide educational services in the form of instruction during the academic term. As instruction is provided, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Adtalem’s institutional loan program (see “Note 6: Financing Receivables”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts receivable is reduced. For our Professional Education businesses, customers are billed and payment is due at the time of order placement. In most cases, performance obligations are delivered subsequent to payments received. Delivering our performance obligations reduces deferred revenue, and accounts receivable is reduced upon payments received. Becker offers an 18-month term loan program as a financing option for the Becker CPA Exam Review Course (see “Note 6: Financing Receivables”). In this case, payment is received after satisfying the performance obligation. Revenue of $100.5 million was recognized during the first nine months of fiscal year 2019 that was included in the deferred revenue balance at the beginning of fiscal year 2019. Revenue recognized from performance obligations that were satisfied, or partially satisfied, in prior periods was not material. The difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period and increases from charges and payments received related to the start of academic terms beginning during the period. Allowance for bad debts as of March 31, 2019, June 30, 2018 and March 31, 2018 was $20.0 million, $27.6 million and $28.4 million, respectively. Practical Expedients As our performance obligations have an original expected duration of one year or less, we have applied the practical expedient (as provided in ASC 606-10-50-14) to not disclose the information in ASC 606-10-50-13, which requires disclosure of the amount of the transaction price allocated to our performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period and when the entity expects to recognize this amount as revenue. All consideration from contracts with customers is included in the transaction price. Internal-Use Software Development Costs Adtalem capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed seven years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as Construction in Progress in the Land, Building and Equipment section of the Consolidated Balance Sheets. As of March 31, 2019, June 30, 2018 and March 31, 2018, the net balance of capitalized internal-use software development costs was $11.2 million, $13.5 million and $3.4 million, respectively. Impairment of Long-Lived Assets Adtalem evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. During the nine months ended March 31, 2019, we recorded impairment charges of $2.0 million to write-down building, building improvements, furniture and equipment to zero based on the fair market value of the DeVry University and Carrington operations, which are classified within discontinued operations. During the first quarter of fiscal year 2018, the campuses of AUC and RUSM were damaged from Hurricanes Irma and Maria, respectively. Hurricane-related impairment charges of $29.9 million were recorded in the nine months ended March 31, 2018 for building, building improvements, furniture and equipment, along with receivables for insurance reimbursements of these amounts, less deductibles, of $20.8 million as of March 31, 2018. The impairment charges are included in Cost of Educational Services in the Consolidated Statements of Income (Loss). In the first quarter of fiscal year 2019, Adtalem announced its decision to relocate RUSM’s campus operations to Barbados and not return to RUSM’s Dominica campus. Adtalem recorded impairment charges of $39.1 million in the nine months ended March 31, 2019 to fully impair the land, buildings and equipment in Dominica as management has determined the market value less the costs to sell the facilities or move the equipment is zero (see “Note 10: Restructuring Charges”). The impairment charges are included in Restructuring Expense in the Consolidated Statements of Income (Loss). For a discussion of the impairment review of goodwill and intangible assets see “Note 9: Intangible Assets.” Foreign Currency Translation The financial position and results of operations of the AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. Adtalem Brazil’s and EduPristine’s operations and Becker’s and ACAMS’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resulting translation adjustments are included in the component of Shareholders’ Equity designated as Accumulated Other Comprehensive Loss. Transaction gains or losses during each of the three-month and nine-month periods ended March 31, 2019 and 2018 were not material. Noncontrolling Interest Adtalem currently maintains a 97.9% ownership interest in Adtalem Brazil with the remaining 2.1% owned by members of the current Adtalem Brazil senior management group. In addition, Adtalem currently maintains a 69% ownership interest in EduPristine with the remaining 31% owned by Kaizen Management Advisors (“Kaizen”), an India-based private equity firm. The adjustment to increase or decrease the Adtalem Brazil and EduPristine noncontrolling interests for their respective proportionate shares of Adtalem Brazil’s and EduPristine’s profit (loss) flows through the Consolidated Statements of Income (Loss) each reporting period based on Adtalem’s noncontrolling interest accounting policy. Since July 1, 2015, Adtalem has had the right to exercise a call option and purchase any remaining Adtalem Brazil stock from Adtalem Brazil management. Likewise, Adtalem Brazil management has had the right to exercise a put option and sell its remaining ownership interest in Adtalem Brazil to Adtalem. Beginning on March 26, 2020, Adtalem will have the right to exercise a call option and purchase any remaining EduPristine stock from Kaizen. Likewise, Kaizen will have the right to exercise a put option and sell up to 33% of its remaining ownership interest in EduPristine to Adtalem. Beginning on March 26, 2022, Kaizen will have the right to exercise a put option and sell its remaining ownership interest in EduPristine to Adtalem. Since the put options are out of the control of Adtalem, authoritative guidance requires the noncontrolling interests, which includes the value of the put options, to be displayed outside of the equity section of the Consolidated Balance Sheets. The Adtalem Brazil management and Kaizen put options are being accreted to their respective redemption values in accordance with the terms of the related stock purchase agreements. The adjustments to increase or decrease the put options to their expected redemption values each reporting period are recorded in retained earnings in accordance with GAAP. The following is a reconciliation of the noncontrolling interest balance (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance at Beginning of Period $ 8,651 $ 7,405 $ 9,110 $ 6,285 Net (Loss) Income Attributable to Noncontrolling Interest (39 ) (46 ) 117 459 (Decrease) Increase in Redemption Value of Noncontrolling Interest Put Options (130 ) (42 ) (745 ) 573 Acquisition of Noncontrolling Interest in EduPristine - 4,074 - 4,074 Balance at End of Period $ 8,482 $ 11,391 $ 8,482 $ 11,391 Earnings per Common Share Basic earnings per share is computed by dividing net income or loss attributable to Adtalem by the weighted average number of common shares outstanding during the period plus unvested participating restricted stock units (“RSUs”). Diluted earnings per share is computed by dividing net income or loss attributable to Adtalem by the weighted average number of shares assuming dilution. Diluted shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised during the period. Excluded from the computations of diluted earnings per share were outstanding stock-based grants representing 194,000 and 223,000 shares of common stock for the three and nine months ended March 31, 2019, respectively, and 294,000 and 1,273,000 shares of common stock for the three and nine months ended March 31, 2018, respectively. These outstanding stock-based grants were excluded because the exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive. The following is a reconciliation of basic shares to diluted shares (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Weighted Average Shares Outstanding 57,583 60,352 58,656 60,970 Unvested Participating RSUs 478 678 543 718 Basic Shares 58,061 61,030 59,199 61,688 Effect of Dilutive Stock Options 741 935 805 786 Diluted Shares 58,802 61,965 60,004 62,474 Treasury Stock Adtalem’s Board of Directors (the “Board”) has authorized share repurchase programs on eleven occasions (see “Note 7: Share Repurchase Programs”). The tenth share repurchase program was approved on February 16, 2017 and commenced in February 2017. The eleventh share repurchase program was approved on November 7, 2018 and commenced in January 2019. Shares that are repurchased by Adtalem are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity. From time to time, shares of our common stock are delivered back to Adtalem under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the Adtalem Stock Incentive Plans (see “Note 4: Stock-Based Compensation”). In addition, shares of our common stock are delivered back to Adtalem for payment of withholding taxes from employees for vesting RSUs. These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity. Prior to March 2019, treasury shares were reissued on a monthly basis, at market value, less a five percent discount, to the Adtalem Colleague Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, Adtalem uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to Retained Earnings. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenue and expense reported during the period. Actual results could differ from those estimates. Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss is composed of the change in cumulative translation adjustment, primarily at Adtalem Brazil, and unrealized gains on available-for-sale marketable securities, net of the effects of income taxes. The Accumulated Other Comprehensive Loss balance as of March 31, 2019, consists of $148.8 million of cumulative translation losses ($145.4 million attributable to Adtalem and $3.4 million attributable to noncontrolling interest) and unrealized gains on available-for-sale debt securities were immaterial. As of June 30, 2018, this balance consisted of $142.6 million of cumulative translation losses ($139.6 million attributable to Adtalem and $3.0 million attributable to noncontrolling interest) and $ 0.4 Advertising Expense Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in Student Services and Administrative Expense in the Consolidated Statements of Income (Loss), was $21.7 million and $61.9 million for the three and nine months ended March 31, 2019, respectively, and $22.1 million and $59.5 million for the three and nine months ended March 31, 2018, respectively. Hurricane Expense In September 2017, Hurricanes Irma and Maria caused damage and disrupted operations at AUC and RUSM. Adtalem recorded expenses of $12.5 million in the nine months ended March 31, 2019 associated with incremental costs of teaching at alternative sites, and $11.1 million and $55.1 $12.5 million were recorded in the nine months ended March 31, 2019, and insurance receivables of $20.8 million were recorded in the nine months ended March 31, 2018 to offset these expenses. Based upon damage assessments of the AUC and RUSM facilities, impairment write-downs of buildings, building improvements, furniture and equipment of $29.9 million were recorded in the nine months ended March 31, 2018. Insurance receivables of $20.8 million were recorded to offset these expenses in the nine months ended March 31, 2018. No further asset impairments were recorded in fiscal year 2019. In total, no net expense related to the hurricanes was recorded in the three and nine months ended March 31, 2019. In total, no net expense was recorded in the three months ended March 31, 2018 and $13.4 million of net expense was recorded in Cost of Educational Services in the Consolidated Statement of Income (Loss) for the nine months ended March 31, 2018. The expense primarily represented the deductibles under insurance policies. During the second quarter of fiscal year 2019, Adtalem received the final insurance proceeds related to Hurricanes Irma and Maria and recorded a pre-tax gain of $15.6 million in the nine months ended March 31, 2019. Restructuring Charges Adtalem’s financial statements include charges related to severance and related benefits for workforce reductions in staff. These charges also include early lease termination or cease-of-use costs, accelerated depreciation and losses on disposals of property and equipment related to campus and administrative office consolidations (see “Note 10: Restructuring Charges”). When estimating the 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. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This 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 amendments are 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. In February 2016, FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-to-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Adtalem will implement this guidance effective July 1, 2019. Management is evaluating the impact the guidance will have on Adtalem’s Consolidated Financial Statements and believes the adoption will impact the Consolidated Balance Sheet with significant increases in assets and liabilities. In January 2016, FASB issued ASU No. 2016-01: “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This guidance was issued to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance eliminates the classification of equity securities into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In the first quarter of fiscal year 2019, we retrospectively adopted this guidance. The adoption resulted in a cumulative adjustment to decrease retained earnings and increase additional paid-in capital, each by $0.4 million. This guidance requires Adtalem to record the changes in the fair value of its available-for-sale equity investments through net income, which is included within the Consolidated Statements of Income (Loss) beginning with the first quarter of fiscal year 2019. In May 2014, FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We adopted this guidance effective July 1, 2018 using the full retrospective approach. The adoption of this standard did not have any impact on Adtalem’s Consolidated Financial Statements, and therefore, no adjustments were made to the prior year comparative financial statements. See subsection “Revenue Recognition” in “Note 3: Summary of Significant Accounting Policies” for the disclosures related to this new accounting standard. Reclassifications Beginning in the fourth quarter of fiscal year 2018, Carrington operations were classified as discontinued operations. See “Note 2: Discontinued Operations” for further information. Prior period amounts have been revised to conform to the current classification. Certain expenses in prior periods previously allocated to Carrington within the U.S. Traditional Postsecondary segment have been reclassified to the Home Office and Other segment based on discontinued operation reporting guidance regarding allocation of corporate overhead. See “Note 14: Segment Information” for additional information. In addition, we have reclassified certain amounts in the operating section of the Consolidated Statement of Cash Flows to conform to current period classification. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 4: STOCK-BASED COMPENSATION Adtalem maintains two stock-based incentive plans: the Amended and Restated Incentive Plan of 2005 and the Fourth Amended and Restated Incentive Plan of 2013. Under these plans, directors, key executives and managerial employees are eligible to receive incentive stock or nonqualified options to purchase shares of Adtalem’s common stock. The Fourth Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 also permit the granting of stock appreciation rights, RSUs, performance-based RSUs and other stock and cash-based compensation. Although options remain outstanding under the 2005 incentive plan, no further stock-based grants will be issued under this plan. The Fourth Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 are administered by the Compensation Committee of the Board. Options are granted for terms of up to ten years and can vest immediately or over periods of up to five years. The requisite service period is equal to the vesting period. The option price under the plans is the fair market value of the shares on the date of the grant. Stock-based compensation expense is measured at the grant date based on the fair value of the award. Adtalem accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized as expense over the employee requisite service period. We account for forfeitures of outstanding but unvested grants in the period they occur. As of March 31, 2019, 7,131,350 authorized but unissued shares of common stock were reserved for issuance under Adtalem’s stock-based incentive plans. The following is a summary of options activity for the nine months ended March 31, 2019: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Life (in Years) (in thousands) Outstanding at July 1, 2018 1,806,133 $ 32.88 Granted 129,025 49.01 Exercised (405,810 ) 42.75 Forfeited - - Expired (19,429 ) 51.65 Outstanding at March 31, 2019 1,509,919 31.37 6.89 $ 23,301 Exercisable at March 31, 2019 592,407 $ 31.60 5.09 $ 9,103 The total intrinsic value of options exercised for the nine months ended March 31, 2019 and 2018 was $4.2 million and $10.7 million, respectively. The fair value of Adtalem’s stock option awards was estimated using a binomial model. This model uses historical cancellation and exercise experience of Adtalem to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period. The weighted average estimated grant date fair value of options granted at market price under Adtalem’s stock-based incentive plans during the first nine months of fiscal years 2019 and 2018 was $20.96 and $14.63, per share, respectively. The fair value of Adtalem’s stock option grants was estimated assuming the following weighted average assumptions: Fiscal Year 2019 2018 Expected Life (in Years) 6.50 6.68 Expected Volatility 39.60 % 41.45 % Risk-free Interest Rate 2.73 % 1.95 % Dividend Yield 0.00 % 0.00 % The expected life of the options granted is based on the weighted average exercise life with age and salary adjustment factors from historical exercise behavior. Adtalem’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant and Adtalem’s long-term historical volatility. If factors change and different assumptions are employed in the valuation of stock-based grants in future periods, the stock-based compensation expense that Adtalem records may differ significantly from what was recorded in previous periods. During the first nine months of fiscal year 2019, Adtalem granted 217,960 RSUs to selected employees and directors. Of these, 65,160 are performance-based RSUs and 152,800 are non-performance-based RSUs. Performance-based RSUs are earned by the recipients over a three-year period based on achievement of certain mission-based goals, academic goals, return on invested capital and free cash flow per share. Certain awards are subject to achievement of a minimum level of Adtalem’s earnings before interest, taxes, depreciation and amortization. Non-performance-based RSUs are subject to restrictions which lapse ratably over one, three or four-year periods on the grant anniversary date based on the recipient’s continued service on the Board, employment with Adtalem or upon retirement. During the restriction period, the recipient of the non-performance based RSUs has the right to receive dividend equivalents, if any. This right does not pertain to the performance-based RSUs. The following is a summary of RSU activity for the nine months ended March 31, 2019: Weighted Average Number of Grant Date RSUs Fair Value Outstanding at July 1, 2018 1,226,958 $ 28.31 Granted 217,960 49.57 Vested (450,484 ) 27.86 Forfeited (79,958 ) 33.26 Outstanding at March 31, 2019 914,476 $ 33.45 The weighted average estimated grant date fair value of RSUs granted at market price under Adtalem’s stock-based incentive plans during the first nine months of fiscal years 2019 and 2018 was $49.57 and $34.34, per share, respectively. The following table shows total stock-based compensation expense included in the Consolidated Statements of Income (Loss) (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Cost of Educational Services $ 279 $ 876 $ 976 $ 3,510 Student Services and Administrative Expense 2,729 1,861 9,393 7,459 Restructuring Expense - - - 548 3,008 2,737 10,369 11,517 Income Tax Benefit (692 ) (554 ) (3,930 ) (4,655 ) Net Stock-Based Compensation Expense $ 2,316 $ 2,183 $ 6,439 $ 6,862 As of March 31, 2019, $21.5 million of total pre-tax unrecognized stock-based compensation expense related to unvested grants is expected to be recognized over a weighted average period of 2.3 years. The total fair value of options and RSUs vested during the nine months ended March 31, 2019 and 2018 was approximately $13.7 million and $14.3 million, respectively. There was no capitalized stock-based compensation cost at each of March 31, 2019, June 30, 2018 and March 31, 2018. Adtalem has an established practice of issuing new shares of common stock to satisfy stock-based grant exercises. However, Adtalem also may issue treasury shares to satisfy stock-based grant exercises under certain of its stock-based incentive plans. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 5: FAIR VALUE MEASUREMENTS Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets and assets of businesses where the long-term value of the operations have been impaired. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, Adtalem uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In some cases where market prices are not available, Adtalem makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3. Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite-lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2018. See “Note 9: Intangible Assets” for further discussion on the impairment review including valuation techniques and assumptions. The following table presents Adtalem's assets and liabilities at March 31, 2019, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 321,211 $ - $ - Investments in Marketable Securities 8,341 - - Institutional Loans Receivable, Net - 42,577 - Loan Receivable from DeVry University - 10,000 - Deferred Acquisition Obligations - 16,001 - Total Financial Assets at Fair Value $ 329,552 $ 68,578 $ - The following table presents Adtalem's assets and liabilities at June 30, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 430,690 $ - $ - Investments in Marketable Securities 4,255 - - Institutional Loans Receivable, Net - 44,320 - Deferred Acquisition Obligations - 18,585 - Total Financial Assets at Fair Value $ 434,945 $ 62,905 $ - The following table presents Adtalem's assets and liabilities at March 31, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 265,325 $ - $ - Investments in Marketable Securities 4,200 - - Institutional Loans Receivable, Net - 41,646 - Deferred Acquisition Obligations - 21,393 - FIES Receivable - 15,094 - Total Financial Assets at Fair Value $ 269,525 $ 78,133 $ - Cash and Cash Equivalents and Investments in Marketable Securities are valued using a market approach based on quoted market prices of identical instruments. The fair value of the institutional loans receivable included in Accounts Receivable, Net and Other Assets, Net on the Consolidated Balance Sheets as of March 31, 2019, June 30, 2018 and March 31, 2018 is estimated by discounting the future cash flows using current rates for similar arrangements. See “Note 6: Financing Receivables” for further discussion on these institutional loans receivable. In connection with the completion of the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the Note. The Note bears interest at a rate of 4% per annum, payable annually in arrears, and has a maturity date of January 1, 2022. The fair value of the DeVry University loan receivable included in Other Assets, Net on the Consolidated Balance Sheet as of March 31, 2019 is estimated by discounting the future cash flows using current rates for similar arrangements. The fair value of the deferred acquisition obligations is estimated by discounting the future cash flows using current rates for similar arrangements. The amounts of $6.1 million, $4.3 million and $4.8 million were classified as Accrued Liabilities on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively, and $9.9 million, $14.3 million and $16.6 million were classified as Other Liabilities on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively. The fair value of Adtalem Brazil’s receivable under Brazil’s “Fundo de Financiamento Estudantil” or “Students Financing Fund” (“FIES”) public loan program included in Accounts Receivable, Net on the Consolidated Balance Sheet as of March 31, 2018 is estimated by discounting the future cash flows using published market data on Brazilian interest and inflation rates. As of March 31, 2019, June 30, 2018 and March 31, 2018, there were no assets or liabilities measured at fair value using Level 3 inputs. |
FINANCING RECEIVABLES
FINANCING RECEIVABLES | 9 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
FINANCING RECEIVABLES | NOTE 6: FINANCING RECEIVABLES Adtalem’s institutional loan programs are available to students at Chamberlain, AUC, RUSM and RUSVM. These loan programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, books and fees and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM and RUSVM loans may be used for students’ living expenses. Repayment plans for institutional loan program balances are developed to address the financial circumstances of the particular student. Interest charges at rates from 3.0% to 12.0% per annum accrue each month on the unpaid balance. Students are required to begin repaying their loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay, reduce the possibility of over borrowing and to minimize interest being accrued on the loan balance. Payments may increase upon completing or departing the program. After a student leaves school, the student typically will have a monthly installment repayment plan. In addition, the Becker CPA Exam Review Course can be financed through Becker with an 18-month term loan program. Reserves for uncollectible loans are determined by analyzing the current aging of institutional loans and historical loss rates of loans at each institution. Management performs this analysis periodically throughout the year. Loans are considered nonperforming and are fully reserved if they are more than 90 days past due. Since all of Adtalem’s financing receivables are generated through the extension of credit to fund educational costs, all such receivables are considered part of the same loan portfolio. The following table details the institutional loan balances along with the related allowances for credit losses (in thousands). March 31, 2019 June 30, 2018 March 31, 2018 Gross Institutional Loans $ 47,259 $ 54,323 $ 51,389 Allowance for Credit Losses: Balance at July 1 $ (10,003 ) $ (9,736 ) $ (9,736 ) Charge-offs and Adjustments 9,965 330 206 Recoveries (73 ) (61 ) (51 ) Additional Provision (4,571 ) (536 ) (162 ) Balance at End of Period (4,682 ) (10,003 ) (9,743 ) Net Institutional Loans $ 42,577 $ 44,320 $ 41,646 Of the net balances above, $15.7 million, $21.2 million and $19.8 million was classified as Accounts Receivable, Net on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively, and $26.9 million, $23.1 million and $21.8 million, representing amounts due beyond one year, was classified as Other Assets, Net on the Consolidated Balance Sheets at March 31, 2019, June 30, 2018 and March 31, 2018, respectively. The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging of past due institutional loans (in thousands): March 31, June 30, March 31, 2019 2018 2018 Institutional Loans: Performing $ 42,716 $ 44,492 $ 42,048 Nonperforming 4,543 9,831 9,341 Total Institutional Loans $ 47,259 $ 54,323 $ 51,389 1-29 Days Past Due 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Institutional Loans Institutional Loans: March 31, 2019 $ 4,092 $ 4,412 $ 4,125 $ 4,543 $ 17,172 $ 30,087 $ 47,259 June 30, 2018 $ 8,473 $ 900 $ 3,099 $ 9,831 $ 22,303 $ 32,020 $ 54,323 March 31, 2018 $ 8,903 $ 464 $ 175 $ 9,341 $ 18,883 $ 32,506 $ 51,389 |
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS | 9 Months Ended |
Mar. 31, 2019 | |
Share Repurchase Programs [Abstract] | |
SHARE REPURCHASE PROGRAMS | NOTE 7: SHARE REPURCHASE PROGRAMS Adtalem has repurchased shares under the following programs as of March 31, 2019: Date Shares Total Cost Authorized Repurchased (in millions) November 15, 2006 908,399 $ 35.0 May 13, 2008 1,027,417 50.0 November 11, 2009 972,205 50.0 August 11, 2010 1,103,628 50.0 November 10, 2010 968,105 50.0 May 20, 2011 2,396,143 100.0 November 2, 2011 3,478,299 100.0 August 29, 2012 2,005,317 62.7 December 15, 2015 1,672,250 36.6 February 16, 2017 7,091,188 300.0 November 7, 2018 870,564 41.9 Totals 22,493,515 $ 876.2 On February 16, 2017, the Board authorized Adtalem’s tenth share repurchase program, which allowed Adtalem to repurchase up to $300 million of its common stock through December 31, 2020. The tenth share repurchase program was completed during January 2019. On November 7, 2018, the Board authorized Adtalem’s eleventh share repurchase program, which allows Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The eleventh share repurchase program commenced during January 2019. A total of 3,631,611 shares were repurchased during the nine months ended March 31, 2019 under the tenth and eleventh share repurchase programs for an aggregate of $176.9 million. The timing and amount of any repurchase will be determined based on an evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, in privately negotiated transactions, or otherwise. The buyback will be funded through available cash balances and/or borrowings and may be suspended or discontinued at any time. Shares of stock repurchased under the programs are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 8: BUSINESS COMBINATIONS EduPristine On February 5, 2018, Adtalem completed the acquisition of a majority interest in EduPristine. Under the terms of the agreement, Adtalem agreed to pay approximately $3.2 million in cash, in exchange for stock of EduPristine, increasing Adtalem’s ownership share from 36% to 64%. This ownership percentage was increased to 69% with an additional equity investment of $1.3 million in March 2018. The payments for these additional investments were made in the third quarter of fiscal year 2018. EduPristine is a professional education provider in India in the areas of finance, accounting, analytics, marketing and healthcare. The acquisition furthers Adtalem’s global growth strategy into professional education. The operations of EduPristine are included in Adtalem’s Professional Education segment. Prior to the February 5, 2018 investment, Adtalem accounted for its ownership interest in EduPristine under the equity method of accounting for investments. The results of EduPristine’s operations have been fully consolidated in the Consolidated Financial Statements of Adtalem since the February 5, 2018 acquisition date. The fair value of Adtalem’s equity investment immediately prior to the majority interest investment was $4.1 million, which was based on a discounted cash flow analysis. The $4.1 million noncontrolling interest recorded on the acquisition date was also derived using the same discounted cash flow analysis. In the third quarter of fiscal year 2018, Adtalem recorded a $1.2 million gain on its previous equity investment. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition of Adtalem’s majority interest in EduPristine (in thousands): February 5 2018 Current Assets $ 866 Property and Equipment 239 Other Long-term Assets 69 Intangible Assets 1,380 Goodwill 11,527 Total Assets Acquired 14,081 Liabilities Assumed 2,715 Net Assets Acquired $ 11,366 Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was assigned to the Professional Education reporting unit and reporting segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include EduPristine’s strategic fit into Adtalem’s expanding presence in professional education and the acquired assembled workforce. None of the goodwill acquired is expected to be deductible for income tax purposes. The $1.4 million of acquired intangible assets was assigned to Trade Names. None of the acquired intangible assets were determined to be subject to amortization. There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations. São Judas Tadeu On November 1, 2017, Adtalem Brazil completed the acquisition of São Judas Tadeu (“SJT”). Under the terms of the agreement, Adtalem Brazil agreed to pay approximately $6.0 million in cash, in exchange for 100% of the stock of SJT. Approximately $1.0 million of payments were made in the second quarter of fiscal year 2018, with additional aggregate payments of approximately $5.0 million required over the succeeding four years. Located in São Paulo, SJT offers medical doctor specialty test preparation and currently serves approximately 2,700 students. The acquisition of SJT adds a new product offering to Adtalem Brazil’s test preparation business. The operations of SJT are included in Adtalem’s Technology and Business segment. The results of SJT’s operations have been included in the Consolidated Financial Statements of Adtalem since the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): November 1 2017 Current Assets $ 558 Property and Equipment 64 Other Long-term Assets 9 Intangible Assets 381 Goodwill 5,636 Total Assets Acquired 6,648 Liabilities Assumed 684 Net Assets Acquired $ 5,964 Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was assigned to the Adtalem Brazil reporting unit, which is classified within the Technology and Business segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include SJT’s strategic fit into Adtalem’s expanding presence in test preparation and the acquired assembled workforce. Of the $0.4 million of acquired intangible assets, $0.2 million was assigned to Trade Names, which has been determined not to be subject to amortization. The remaining acquired intangible asset was determined to be subject to amortization with a useful life of approximately six months. The value and estimated useful life by asset type is as follows (in thousands): November 1, 2017 Value Assigned Estimated Useful Life Student Relationships $ 162 6 months There is no pro forma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9: INTANGIBLE ASSETS Intangible assets relate mainly to acquired business operations. These assets consist of the acquisition fair value of certain identifiable intangible assets acquired and goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. Intangible assets consist of the following (in thousands): March 31, 2019 Gross Carrying Amount Accumulated Amortization Weighted Average Amortization Period Amortizable Intangible Assets: Student Relationships $ 7,952 $ (7,401 ) 5 Years Customer Relationships 42,900 (13,071 ) 10 Years Curriculum/Software 6,810 (5,775 ) 4 Years Franchise Contracts 8,947 (2,071 ) 18 Years Clinical Agreements 331 (127 ) 15 Years Trade Names 965 (965 ) 10 Years Proprietary Technology 500 (344 ) 4 Years Total $ 68,405 $ (29,754 ) Indefinite-Lived Intangible Assets: Trade Names $ 105,745 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 81,511 Total $ 316,496 June 30, 2018 Gross Carrying Amount Accumulated Amortization Amortizable Intangible Assets: Student Relationships $ 8,193 $ (6,972 ) Customer Relationships 42,900 (9,598 ) Non-compete Agreements 700 (700 ) Curriculum/Software 6,833 (4,265 ) Franchise Contracts 9,064 (1,720 ) Clinical Agreements 336 (112 ) Trade Names 976 (904 ) Proprietary Technology 500 (250 ) Total $ 69,502 $ (24,521 ) Indefinite-Lived Intangible Assets: Trade Names $ 106,132 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 82,578 Total $ 317,950 March 31, 2018 Gross Carrying Amount Accumulated Amortization Amortizable Intangible Assets: Student Relationships $ 9,601 $ (7,831 ) Customer Relationships 42,900 (8,430 ) Non-compete Agreements 700 (691 ) Curriculum/Software 7,148 (3,901 ) Franchise Contracts 10,621 (1,868 ) Clinical Agreements 393 (125 ) Trade Names 1,146 (1,031 ) Proprietary Technology 500 (219 ) Total $ 73,009 $ (24,096 ) Indefinite-Lived Intangible Assets: Trade Names $ 109,755 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 97,234 Total $ 336,229 Amortization expense for amortized intangible assets was $2.0 million and $6.2 million for the three and nine months ended March 31, 2019, respectively, and $2.4 million and $7.3 million for the three and nine months ended March 31, 2018, respectively. Estimated amortization expense for amortizable intangible assets for the next five fiscal years ending June 30 and in the aggregate, by reporting unit, is as follows (in thousands): Professional Adtalem Fiscal Year Education Brazil Total 2019 (excluding the nine months ended March 31, 2019) $ 1,605 $ 349 $ 1,954 2020 4,671 1,223 5,894 2021 4,440 766 5,206 2022 4,300 519 4,819 2023 4,118 519 4,637 Thereafter 11,268 4,873 16,141 All amortizable intangible assets except student relationships and customer relationships are being amortized on a straight-line basis. The amount being amortized for student relationships is based on the estimated progression of the students through the respective Damásio Educacional (“Damasio”) and Grupo Ibmec Educacional S.A. (“Grupo Ibmec”) programs, giving consideration to the revenue and cash flow associated with both existing students and new applicants. The amount being amortized for customer relationships related to ACAMS is based on the estimated retention of the customers, giving consideration to the revenue and cash flow associated with these existing customers. Indefinite-lived intangible assets related to trade names, Title IV eligibility, accreditations and intellectual property are not amortized, as there are no legal, regulatory, contractual, economic or other factors that limit the useful life of these intangible assets to the reporting entity. In accordance with GAAP, goodwill and indefinite-lived intangibles arising from a business combination are not amortized and charged to expense over time. Instead, these assets must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. Adtalem’s annual impairment review was most recently completed as of May 31, 2018, at which time, there was no impairment loss associated with recorded goodwill or indefinite-lived intangible assets for any reporting unit. Adtalem has five reporting units that contained goodwill as of the third quarter of fiscal year 2019. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss to goodwill is recognized. In analyzing the results of operations and business conditions of all the reporting units, as of March 31, 2019, it was determined that no triggering event had occurred that would indicate the carrying value of a reporting unit had exceeded its fair value. Adtalem has five reporting units that contained indefinite-lived intangible assets as of the third quarter of fiscal year 2019. For indefinite-lived intangible assets, management first analyzes qualitative factors including results of operations and business conditions of the five reporting units that contained indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. These interim triggering event conclusions were based on the fact that the annual impairment review of Adtalem’s reporting units and indefinite-lived intangible assets resulted in no impairment indicators as of the end of fiscal year 2018, and that no interim events or deviations from planned operating results occurred as of March 31, 2019, that would cause management to reassess these conclusions. In January 2019, Adtalem relocated RUSM to Barbados from its temporary locations in Knoxville, Tennessee at facilities owned by Lincoln Memorial University (“LMU”) and at a facility on St Kitts. Management believes the values of RUSM’s goodwill and indefinite-lived intangible assets are not affected by this move. The Trade Name will continue to be used and the U.S. Department of Education (“ED”) has provided approval for RUSM to operate in Barbados. No new accreditation is necessary, as RUSM’s secondary accreditor, the Caribbean Accreditation Authority for Education in Medicine and other Health Professions (“CAAM-HP”), is now its primary accreditor as of the start of the January 2019 semester. CAAM-HP is authorized by the government of Barbados to accredit medical programs. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates, which could lead to additional impairments of intangible assets or goodwill. As of March 31, 2019, intangible assets from business combinations totaled $355.1 million and goodwill totaled $811.3 million. Together, these assets equaled 54% of total assets as of such date, and any impairment could significantly affect future results of operations. The table below summarizes goodwill balances by reporting unit (in thousands): March 31, June 30, March 31, Reporting Unit 2019 2018 2018 Chamberlain $ 4,716 $ 4,716 $ 4,716 AUC 68,321 68,321 68,321 RUSM and RUSVM 237,173 237,173 237,173 Professional Education 317,475 317,699 319,528 Adtalem Brazil 183,575 185,978 216,105 Total $ 811,260 $ 813,887 $ 845,843 The table below summarizes goodwill balances by reporting segment (in thousands): March 31, June 30, March 31, Reporting Segment 2019 2018 2018 Medical and Healthcare $ 310,210 $ 310,210 $ 310,210 Professional Education 317,475 317,699 319,528 Technology and Business 183,575 185,978 216,105 Total $ 811,260 $ 813,887 $ 845,843 The table below summarizes the changes in goodwill balances by reporting segment (in thousands): Medical and Healthcare Professional Education Technology and Business Total Balance at June 30, 2017 310,210 306,653 212,223 829,086 Acquisitions - 12,548 3,807 16,355 Foreign exchange rate changes - 327 75 402 Balance at March 31, 2018 310,210 319,528 216,105 845,843 Purchase accounting adjustments - (1,021 ) 1,829 808 Foreign exchange rate changes - (808 ) (31,956 ) (32,764 ) Balance at June 30, 2018 310,210 317,699 185,978 813,887 Foreign exchange rate changes - (224 ) (2,403 ) (2,627 ) Balance at March 31, 2019 $ 310,210 $ 317,475 $ 183,575 $ 811,260 The decrease in the goodwill balance from June 30, 2018 in the Professional Education segment is the result of a change in the value of the British Sterling Pound and Indian Rupee compared to the U.S. dollar. Since the Becker’s European subsidiary and EduPristine’s goodwill is recorded in local currency, fluctuations in the values of the British Sterling Pound and Indian Rupee in relation to the U.S. dollar will cause changes in the balance of this asset. The decrease in the goodwill balance from June 30, 2018 in the Technology and Business segment is the result of a change in the value of the Brazilian Real compared to the U.S. dollar. Since Adtalem Brazil goodwill is recorded in local currency, fluctuations in the value of the Brazilian Real in relation to the U.S. dollar will cause changes in the balance of this asset. The table below summarizes the indefinite-lived intangible asset balances by reporting segment (in thousands): March 31, June 30, March 31, Reporting Segment 2019 2018 2018 Medical and Healthcare $ 137,500 $ 137,500 $ 137,500 Professional Education 69,111 69,126 67,812 Technology and Business 109,885 111,324 130,917 Total $ 316,496 $ 317,950 $ 336,229 Total indefinite-lived intangible assets decreased by $1.5 million from June 30, 2018. The decrease is the result of a change in the value of the Brazilian Real as compared to the U.S. dollar. Since Adtalem Brazil intangible assets are recorded in local currency, fluctuations in the value of the Brazilian Real in relation to the U.S. dollar will cause changes in the balance of these assets. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGES | NOTE 10: RESTRUCTURING CHARGES During the third quarter and first nine 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. 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 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 third quarter and first nine months of fiscal year 2019, Adtalem recorded restructuring charges primarily related to real estate consolidations at Adtalem Brazil and Adtalem’s home office. During the third quarter and first nine months of fiscal year 2018, Adtalem recorded restructuring charges related to workforce reductions and real estate consolidations at the medical and veterinary schools and 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 203 and 111 positions in the first nine 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 March 31, 2019 Nine Months Ended March 31, 2019 Real Estate and Other Termination Benefits Total Real Estate and Other Termination Benefits Total Medical and Healthcare $ (110 ) $ (23 ) $ (133 ) $ 40,033 $ 1,294 $ 41,327 Technology and Business 1,716 - 1,716 1,901 - 1,901 Home Office and Other 2,271 48 2,319 3,748 119 3,867 Total $ 3,877 $ 25 $ 3,902 $ 45,682 $ 1,413 $ 47,095 Three Months Ended March 31, 2018 Nine Months Ended March 31, 2018 Real Estate and Other Termination Benefits Total Real Estate and Other Termination Benefits Total Medical and Healthcare $ - $ 530 $ 530 $ 26 $ 616 $ 642 Home Office and Other 46 45 91 (419 ) 2,961 2,542 Total $ 46 $ 575 $ 621 $ (393 ) $ 3,577 $ 3,184 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) 4,761 Reduction in liability (payments and adjustments) (20,568 ) Liability balance at March 31, 2019 $ 23,120 Of this liability balance, $9.0 million is recorded as Accrued Liabilities and $14.1 million is recorded as Other Liabilities on the Consolidated Balance Sheet as of March 31, 2019. 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. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES The effective tax rate on income from continuing operations was 17.2% in the third quarter and 18.3% in the first nine months of fiscal year 2019, compared to 15.7% on income from continuing operations in the third quarter and 87.8% in the first nine months of fiscal year 2018. Tax expense in the first nine months of fiscal year 2019 included a special item related to one-time impacts from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) and various impacts due to the sale of DeVry University. The effective tax rate on income from continuing operations excluding tax expense related to the special item was 16.8% in the first nine months of fiscal year 2019. Also, tax expense in the first nine months of fiscal year 2018 included a special item of $101.2 million related to the Tax Act. The effective tax rate on income from continuing operations excluding the special item was 15.4% in the first nine months of fiscal year 2018. This increase in fiscal year 2019 primarily reflects a lower U.S. tax rate resulting from the Tax Act offset by higher additional expense from provisions of the Tax Act that were effective beginning in fiscal year 2019 and a decrease in the percentage of earnings from foreign operations, which are taxed at lower rates than domestic earnings. The provisions from the Tax Act impacting fiscal year 2019 include a tax on global intangible low-taxed income (“GILTI”), a deduction for foreign derived intangible income (“FDII”), a limitation of certain executive compensation, and the repeal of the domestic production activity deduction. We have elected to account for GILTI as a period cost. The effective tax rate includes estimates of these new provisions. Our estimates may be revised in future periods as we obtain additional data and any new regulations or guidance is released. Four of Adtalem’s operating units benefit from location tax incentives: AUC, which operates in St. Maarten, RUSM, which operated in Dominica and beginning in January 2019 in Barbados, RUSVM, which operates in St. Kitts, and Adtalem Brazil, which operates in Brazil. AUC’s effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. Both of these agreements have been extended to provide, in the case of RUSM, an indefinite period of exemption and, in the case of RUSVM, exemption until 2037. In January 2019, RUSM moved its operations from Dominica to Barbados. RUSM has negotiated an agreement with the Barbados government that exempts it from local income taxation until 2039. Adtalem Brazil’s effective tax rate reflects benefits derived from its participation in “Programa Universidade para Todos” or “University for All Program” (“PROUNI”), a Brazilian program for providing scholarships to a portion of its undergraduate students. Adtalem has completed its accounting for the tax effects of the enactment of the Tax Act. The SEC has issued rules that allowed for a measurement period of up to one year after the enactment date of the legislation to finalize the recording of the related tax impacts. As that period has now ended, we have finalized the calculations of the Tax Act’s impacts previously recorded in the second and fourth quarters of fiscal year 2018 with an immaterial adjustment in the second quarter of fiscal year 2019. |
DEBT
DEBT | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 12: DEBT Long-term debt consists of the following (in thousands): March 31, June 30, March 31, 2019 2018 2018 Total Debt: Term B Loan $ 297,750 $ 300,000 $ - Revolver - - 120,000 Total Principal Payments Due 297,750 300,000 120,000 Deferred Debt Issuance Costs (6,161 ) (6,927 ) - Total Amount Outstanding 291,589 293,073 120,000 Less Current Portion: Term B Loan (3,000 ) (3,000 ) - Noncurrent Portion $ 288,589 $ 290,073 $ 120,000 Scheduled future maturities of long-term debt for the next five fiscal years ending June 30 and in the aggregate are as follows (in thousands): Fiscal Year Maturity Payments 2019 (excluding the nine months ended March 31, 2019) $ 750 2020 3,000 2021 3,000 2022 3,000 2023 3,000 Thereafter 285,000 $ 297,750 Prior Credit Facility Adtalem entered into a revolving credit facility on March 31, 2015, which was set to expire on March 31, 2020 (“Prior Credit Facility”). The Prior Credit Facility provided for a multi-currency revolving credit facility in the amount of $400 million and $100 million available for letters of credit. As of March 31, 2018, Adtalem’s borrowings under the Prior Credit Facility were $120 million with a weighted average interest rate of 3.70%. Senior Secured Credit Facilities On April 13, 2018, Adtalem replaced the Prior Credit Facility with new credit facilities under a new Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for (1) a $300 million revolving facility (“Revolver”) with a maturity date of April 13, 2023, and (2) a $300 million senior secured Term B loan (“Term B Loan”) with a maturity date of April 13, 2025. We refer to the Revolver and Term B Loan collectively as the “Credit Facility.” The Revolver has availability for currencies other than U.S. dollars of up to $200 million and $100 million available for letters of credit. Subject to certain conditions set forth in the Credit Agreement, the Credit Facility may be increased by $250 million. Term B Loan For Eurocurrency rate loans, Term B Loan interest is equal to LIBOR or a LIBOR-equivalent rate plus 3%. For base rate loans, Term B Loan interest is equal to the base rate plus 2%. The Term B Loan amortizes in equal quarterly installments of $750,000, with the balance due at maturity on April 13, 2025. As of March 31, 2019, the interest rate for borrowings under the Term B Loan facility was 5.50%, which approximated the effective interest rate. Revolver Revolver interest is equal to LIBOR or a LIBOR-equivalent rate for Eurocurrency rate loans or a base rate, plus an applicable rate based on Adtalem’s consolidated leverage ratio, as defined in the Credit Agreement. The applicable rate ranges from 1.75% to 2.75% for Eurocurrency rate loans and from 0.75% to 1.75% for base rate loans. Adtalem had a letter of credit outstanding of $68.4 million as of each of March 31, 2019, June 30, 2018 and March 31, 2018. This letter of credit was posted in the second quarter of fiscal year 2017 in relation to the Federal Trade Commission settlement. As of March 31, 2019, Adtalem is charged an annual fee equal to 2.25% of the undrawn face amount of the outstanding letters of credit under the Revolver, payable quarterly. Adtalem continues to post the letter of credit in relation to the Federal Trade Commission settlement on behalf of DeVry University and is reimbursed by DeVry University for 2.00% of the outstanding amount of this letter of credit. The Credit Agreement also requires payment of a commitment fee equal to 0.40% of the undrawn portion of the Revolver as of March 31, 2019. The amount undrawn under the Revolver, which includes the impact of the outstanding letters of credit, was $231.6 million as of March 31, 2019. The letter of credit fees and commitment fees are adjustable quarterly, based upon Adtalem’s achievement of certain financial ratios. Debt Issuance Costs Adtalem incurred $9.9 million in fees that were capitalized in relation to the Credit Agreement, $7.1 million of which was related to the Term B Loan facility and $2.7 million of which was related to the Revolver facility. The deferred debt issuance costs related to the Term B Loan are presented as a direct deduction from the face amount of the debt, while the deferred debt issuance costs related to the Revolver are classified as Other Assets, Net on the Consolidated Balance Sheets. The following table summarizes the total deferred debt issuance costs for the Term B Loan and Revolver, which will be amortized over seven years and five years, respectively (in thousands): Term B Loan Revolver Total Deferred Debt Issuance Costs at June 30, 2018 $ 6,927 $ 2,606 $ 9,533 Amortization of Deferred Debt Issuance Costs (766 ) (409 ) (1,175 ) Deferred Debt Issuance Costs at March 31, 2019 $ 6,161 $ 2,197 $ 8,358 Covenants and Guarantees The Credit Agreement contains customary covenants, including restrictions on our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interest on assets, make acquisitions, loans, advances or investments, or sell or otherwise transfer assets. The Credit Agreement contains covenants that, among other things, require maintenance of certain financial ratios, as defined in the agreement. Maintenance of these financial ratios could place restrictions on Adtalem’s ability to pay dividends. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio and a U.S. Department of Education financial responsibility ratio based upon a composite score of an equity ratio, a primary reserve ratio and a net income ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the Credit Agreement would constitute an event of default and could result in termination of the Credit Agreement and require payment of all outstanding borrowings and replacement of outstanding letters of credit. Adtalem was in compliance with the debt covenants as of March 31, 2019. The stock of all U.S. and certain foreign subsidiaries of Adtalem is pledged as collateral for borrowings under the Credit Agreement. The Term B Loan requires mandatory prepayments equal to a percentage of Excess Cash Flow, which is defined within the Credit Agreement, subject to incremental step-downs, depending on the consolidated leverage ratio. Beginning in fiscal year 2019, the Excess Cash Flow payment is due in the first quarter of each year and is based on the Excess Cash Flow and consolidated leverage ratio for the prior year. No payment was due as of March 31, 2019. Our borrowings under the Credit Facility are guaranteed by us and all of our domestic subsidiaries (subject to certain exceptions) and secured by a first lien on our assets and the assets of our guarantor subsidiaries (excluding real estate), including capital stock of the subsidiaries. Deferred Acquisition Obligations Adtalem also has liabilities recorded for deferred purchase price agreements with sellers related to the purchases of Faculdade Diferencial Integral (“Facid”), Faculdade Ideal (“Faci”), Damasio, Grupo Ibmec, Faculdade de Imperatriz (“Facimp”) and SJT. This financing is in the form of holdbacks of a portion of the purchase price of these acquisitions or installment payments. Payments are made under these agreements based on payment schedules or the resolution of any pre-acquisition contingencies. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13: COMMITMENTS AND CONTINGENCIES Adtalem is subject to lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. As of March 31, 2019, Adtalem believes it has adequately reserved for potential losses. The following is a description of pending legal and regulatory matters that may be considered other than ordinary, routine and incidental to the business. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. The timing or outcome of the following matters, or their possible impact on Adtalem’s business, financial condition or results of operations, cannot be predicted at this time. The continued defense, resolution or settlement of any of the following matters could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. On May 13, 2016, a putative class action lawsuit was filed by the Pension Trust Fund for Operating Engineers, individually and on behalf of others similarly situated, against Adtalem, Daniel Hamburger, Richard M. Gunst, and Timothy J. Wiggins in the United States District Court for the Northern District of Illinois. The complaint was filed on behalf of a putative class of persons who purchased Adtalem common stock between February 4, 2011 and January 27, 2016. The complaint cites the January 27, 2016 Notice of Intent to Limit (the “January 2016 Notice”) and a civil complaint (the “FTC lawsuit”) filed by the FTC on January 27, 2016 against Adtalem, DeVry University, Inc., and DeVry/New York Inc. (collectively, the “Adtalem Parties”), which was resolved with the FTC in 2017, that alleged that certain of DeVry University’s advertising claims were false or misleading or unsubstantiated at the time they were made in violation of Section 5(a) of the FTC Act, as the basis for claims that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and the earnings of DeVry University graduates relative to the graduates of other universities and colleges. As a result of these alleged false or misleading statements, the plaintiff alleged that defendants overstated Adtalem’s growth, revenue and earnings potential and made false or misleading statements about Adtalem’s business, operations and prospects. The plaintiff alleged direct liability against all defendants for violations of §10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (the “Exchange Act”) and asserted liability against the individual defendants pursuant to § 20(a) of the Exchange Act. The plaintiff sought monetary damages, interest, attorneys’ fees, costs and other unspecified relief. On July 13, 2016, the Utah Retirement System (“URS”) moved for appointment as lead plaintiff and approval of its selection of counsel, which was not opposed by the Pension Trust Fund for Operating Engineers. URS was appointed as lead plaintiff on August 24, 2016. URS filed a second amended complaint (“SAC”) on December 23, 2016. The SAC sought to represent a putative class of persons who purchased Adtalem common stock between August 26, 2011 and January 27, 2016 and named an additional individual defendant, Patrick J. Unzicker. Like the original complaint, the SAC asserted claims against all defendants for alleged violations of §10(b) and Rule 10b-5 of the Exchange Act and asserted liability against the individual defendants pursuant to § 20(a) of the Exchange Act for alleged material misstatements or omissions regarding DeVry University graduate outcomes. On January 27, 2017, defendants moved to dismiss the SAC, which motion was granted on December 6, 2017, without prejudice. The plaintiffs filed a Third Amended Complaint (“TAC”) on January 29, 2018. The defendants moved to dismiss the TAC on March 30, 2018. The court denied the motion to dismiss the TAC on December 20, 2018. On February 8, 2019, defendants filed their answer to the TAC wherein defendants denied all material allegations in the TAC. The parties have exchanged written discovery requests and responses and objections to those requests. The Magistrate Judge assigned to manage discovery in this case has set a status conference for June 19, 2019, to address any preliminary discovery disputes arising from the parties’ initial discovery responses. On October 14, 2016, a putative class action lawsuit was filed by Debbie Petrizzo and five other former DeVry University students, individually and on behalf of others similarly situated, against the Adtalem Parties in the United States District Court for the Northern District of Illinois (the “ Petrizzo Case”). The complaint was filed on behalf of a putative class of persons consisting of those who enrolled in and/or attended classes at DeVry University from at least 2002 through the present and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of six different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs seek monetary, declaratory, injunctive, and other unspecified relief. On October 28, 2016, a putative class action lawsuit was filed by Jairo Jara and eleven others, individually and on behalf of others similarly situated, against the Adtalem Parties in the United States District Court for the Northern District of Illinois (the “ Jara Case”). The individual plaintiffs claimed to have graduated from DeVry University in 2001 or later and sought to proceed on behalf of a putative class of persons consisting of those who obtained a degree from DeVry University and who were unable to find employment within their chosen field of study within six months of graduation. Citing the FTC lawsuit, the plaintiffs claimed that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserted claims for unjust enrichment and violations of ten different states’ consumer fraud, unlawful trade practices, and consumer protection laws. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief. By order dated November 28, 2016, the district court ordered the Petrizzo and Jara Cases be consolidated under the Petrizzo caption for all further purposes. On December 5, 2016, plaintiffs filed an amended consolidated complaint on behalf of 38 individual plaintiffs and others similarly situated. The amended consolidated complaint sought to bring claims on behalf of the named individuals and a putative nationwide class of individuals for unjust enrichment and alleged violations of the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Private Businesses and Vocational Schools Act of 2012. In addition, it purported to assert causes of action on behalf of certain of the named individuals and 15 individual state-specific putative classes for alleged violations of 15 different states’ consumer fraud, unlawful trade practices, and consumer protection laws. Finally, it sought to bring individual claims under Georgia state law on behalf of certain named plaintiffs. The plaintiffs sought monetary, declaratory, injunctive, and other unspecified relief. A motion to dismiss the amended complaint was filed by the Adtalem Parties and granted by the court, without prejudice, on February 12, 2018. On April 12, 2018, the Petrizzo plaintiffs refiled their complaint with a new lead plaintiff, Renee Heather Polly. The plaintiffs’ refiled complaint is nearly identical to the complaint previously dismissed by the court on February 12, 2018. The Adtalem Parties moved to dismiss this refiled complaint on May 14, 2018. The court granted defendants’ motion and dismissed the amended complaint with prejudice on February 13, 2019. On March 15, 2019, plaintiffs filed a notice of appeal and this matter is currently pending on appeal before the Seventh Circuit. On January 17, 2017, Harriet Myers filed a complaint derivatively on behalf of Adtalem in the United States District Court for the Northern District of Illinois against individual defendants Daniel M. Hamburger, Timothy J. Wiggins, Richard M. Gunst, Patrick J. Unzicker, Christopher B. Begley, David S. Brown, Lisa W. Wardell, Ann Weaver Hart, Lyle Logan, Alan G. Merten, Fernando Ruiz, Ronald L. Taylor and James D. White. Adtalem was named as a nominal defendant only. The plaintiff agreed to a stipulated order moving the case to the United States District Court for the District of Delaware. Citing the FTC lawsuit and settlement, the January 2016 Notice, the negotiated agreement reached by DeVry University and ED on October 13, 2016 (the “ED Settlement”), and the allegations in the lawsuit filed by the Pension Trust Fund for Operating Engineers, each referenced above, the plaintiff has alleged that the individual defendants have breached their fiduciary duties and violated federal securities law since at least 2011. The plaintiff has asserted that the individual defendants permitted Adtalem to engage in unlawful conduct, failed to correct misconduct or prevent its recurrence, and failed to ensure the accurate dissemination of information to shareholders. The complaint attempts to state three claims: (i) breach of fiduciary duty by all named defendants for allegedly allowing the illegal conduct to occur, (ii) unjust enrichment by all individual defendants in the receipt of compensation, and (iii) violation of Section 14(a) of the Exchange Act by failing to disclose the alleged illegal scheme in proxy statements and falsely stating that compensation was based on “pay for performance” where those performance results were allegedly false. The plaintiff seeks on behalf of Adtalem monetary, injunctive and other unspecified relief. The parties reached an agreement to settle this matter along with the City of Hialeah matter (described below). The settlement approval hearing for the City of Hialeah matter will be heard on May 17, 2019. Following approval of the settlement by the court in the City of Hialeah matter, the plaintiff in Myers matter will dismiss her lawsuit. On June 20, 2017, the City of Hialeah Employees Retirement System filed a complaint derivatively on behalf of Adtalem in the Court of Chancery of the State of Delaware against individual defendants Daniel M. Hamburger, Christopher B. Begley, Lisa W. Wardell, Lyle Logan, Fernando Ruiz, Ronald L. Taylor and James D. White. Adtalem was named as a nominal defendant only. Citing the FTC lawsuit and settlement, the January 2016 Notice and ED Settlement, and documents produced in response to plaintiff’s request under Section 220 of the Delaware Code, the plaintiff alleges that the individual defendants have breached their fiduciary duties. The plaintiff asserts that the individual defendants permitted Adtalem and DeVry University to make, and failed to stop, false and misleading advertisements in breach of their fiduciary duties and in bad faith. The plaintiff seeks on behalf of Adtalem monetary and other unspecified relief. A motion to dismiss the complaint was filed by the Adtalem Parties on September 1, 2017, which was partially granted as to one count and partially denied as to another count on April 20, 2018. The parties reached an agreement to settle this matter along with the Myers City of Hialeah On April 13, 2018, a putative class action lawsuit was filed by Nicole Versetto, individually and on behalf of other similarly situated, against the Adtalem Parties in the Circuit Court of Cook County, Illinois, Chancery Division. The complaint was filed on behalf of herself and three separate classes of similarly situated individuals who were citizens of the State of Illinois and who purchased or paid for a DeVry University program between January 1, 2008 and April 8, 2016. The plaintiff claims that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserts causes of action under the Illinois Uniform Deceptive Trade Practices Act, Illinois Consumer Fraud and Deceptive Trade Practices Act, and Illinois Private Business and Vocational Schools Act, and claims of breach of contract, fraudulent misrepresentation, concealment, negligence, breach of fiduciary duty, conversion, unjust enrichment, and declaratory relief as to violations of state law. The plaintiff seeks compensatory, exemplary, punitive, treble, and statutory penalties and damages, including pre-judgment and post-judgment interest, in addition to restitution, declaratory and injunctive relief, and attorneys’ fees. The Adtalem Parties moved to dismiss this complaint on June 20, 2018. On March 11, 2019, the court granted plaintiff’s motion for leave to file an amended complaint. Plaintiff filed an amended complaint that same day, asserting similar claims, with new lead plaintiff, Dave McCormick. Defendants filed a motion to dismiss plaintiff’s amended complaint on April 15, 2019. On May 8, 2018, the Carlson Law Firm (“Carlson”) filed a lawsuit against Adtalem and DeVry University, Inc., on behalf of 71 individual former DeVry University students in Rangel v. Adtalem and DeVry University, Inc. Carlson filed this lawsuit in the United States District Court for the Western District of Texas. Plaintiffs contend that DeVry University “made deceptive representations about the benefits of obtaining a degree from DeVry University” in violation of Texas state laws and seek full restitution of all monies paid to DeVry University and any student loan lenders, punitive damages, and attorneys’ fees. The defendants moved to dismiss this complaint on June 5, 2018. On June 27, 2018, Carlson filed a second lawsuit on behalf of 32 former DeVry University students against Adtalem and DeVry University, Inc. in Lindberg v. Adtalem and DeVry University, Inc. Carlson filed this lawsuit in the United States District Court for the Western District of Texas. The allegations are identical to the allegations in the lawsuit Carlson filed on May 8, 2018. Specifically, plaintiffs contend that DeVry University “made deceptive representations about the benefits of obtaining a degree from DeVry University” in violation of Texas state law and seek full restitution of all monies paid to DeVry University and any student loan lenders, punitive damages, and attorneys’ fees. The defendants moved to dismiss this complaint on August 28, 2018. The court consolidated these two lawsuits on December 10, 2018. The defendants moved to dismiss the consolidated action on December 18, 2018. On January 2, 2019, Carlson filed a motion to intervene on behalf of 13 additional former DeVry University students seeking to join the consolidated lawsuit. The parties re-filed their briefing on the motions to dismiss so that the motion would apply to all three groups of plaintiffs. On April 24, 2019, the Court granted Adtalem’s and DeVry University’s motions to dismiss. The Court gave the plaintiffs 45 days to refile their complaint otherwise their cases will be dismissed with prejudice. On April 4, 2019, the Carlson Law Firm sent notice pursuant to California Legal Remedies Act, Civil Code § 1750, of 105 individuals who purportedly have claims against DeVry University and Adtalem based on allegedly deceptive comments made about the benefits of obtaining a DeVry University degree; specifically, that 90% of graduates obtained a job in their chosen field of study within six months of graduation, and that graduates were paid more than graduates of other universities. Pursuant to the letter, DeVry University and Adtalem have until May 4, 2019, to respond to the demand letters or the individuals will have the right to file a lawsuit. On June 21, 2018, the Stoltmann Law Firm filed a lawsuit against Adtalem in Cook County Circuit Court, alleging that Adtalem breached a contract with the Stoltmann Law Firm to pay filing fees associated with arbitration claims the Stoltmann Law Firm has filed with JAMS. The Stoltmann Law Firm is seeking Specific Performance from the court. Adtalem moved to dismiss this complaint on August 3, 2018. Prior to the court ruling on Adtalem’s motion to dismiss, the Stoltmann Law Firm and 399 individuals filed an amended complaint on August 9, 2018, asserting claims for specific performance, declaratory judgment and a petition to compel arbitration. Adtalem moved to dismiss the amended complaint on August 31, 2018. The court granted Adtalem’s motion to dismiss on November 30, 2018, but granted plaintiffs leave to file a second amended complaint. A single individual plaintiff filed a second amended complaint on January 3, 2019. Adtalem has until May 23, 2019, to file a responsive pleading. On March 29, 2019, a putative class action lawsuit was filed by Robby Brown, individually and on behalf of all others similarly situated, against Adtalem Global Education Inc. and DeVry University, Inc., in the Western District of Missouri. The complaint was filed on behalf of himself and two separate classes of similarly situated individuals who were citizens of the State of Missouri and who purchased or paid for and received any part of a DeVry University program. The plaintiffs claim that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and assert claims of breach of contract, negligent misrepresentation, fraudulent misrepresentation, fraudulent concealment, breach of fiduciary duty, conversion, unjust enrichment, and declaratory relief. The plaintiffs seek compensatory, exemplary, punitive, treble, and statutory penalties and damages as allowed by law, including pre-judgment and post-judgment interest disgorgement, restitution, injunctive and declaratory relief, and attorneys’ fees. Defendants have not yet been served with the complaint. On April 3, 2019, a putative class action lawsuit was filed by T’Lani Robinson, individually and on behalf of all others similarly situated, against Adtalem Global Education Inc. and DeVry University, Inc., in the Northern District of Georgia. The complaint was filed on behalf of herself and three separate classes of similarly situated individuals who were citizens of the State of Georgia who purchased or paid for and received any part of a DeVry University program. The plaintiffs claim that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and assert claims of breach of contract, negligent misrepresentation, fraudulent misrepresentation, fraudulent concealment, breach of fiduciary duty, conversion, unjust enrichment, and declaratory relief. The plaintiffs seek compensatory, exemplary, punitive, treble, and statutory penalties and damages as allowed by law, including pre-judgment and post-judgment interest disgorgement, restitution, injunctive and declaratory relief, and attorneys’ fees. Defendants have not yet been served with the complaint. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 14: SEGMENT INFORMATION Beginning in the second quarter of fiscal year 2018, DeVry University operations were classified as discontinued operations. In addition, beginning in the fourth quarter of fiscal year 2018, Carrington operations were classified as discontinued operations. See “Note 2: Discontinued Operations” for further information. Segment information presented excludes the results of DeVry University and Carrington, which were previously classified within our former U.S. Traditional Postsecondary segment and are presented as discontinued operations in the Consolidated Financial Statements. Discontinued operations assets are included in the table below to reconcile to Total Consolidated Assets presented on the Consolidated Balance Sheets. In addition, certain expenses previously allocated to DeVry University and Carrington within our former U.S. Traditional Postsecondary segment have been reclassified to the Home Office and Other segment based on discontinued operating reporting guidance regarding allocation of corporate overhead. Adtalem’s principal business is the provision of educational services. Adtalem presents three reporting segments: “Medical and Healthcare,” which includes the operations of Chamberlain and the medical and veterinary schools (which include AUC, RUSM and RUSVM); “Professional Education,” which includes the operations of ACAMS, Becker and EduPristine; and “Technology and Business,” which includes the operations of Adtalem Brazil. These segments are consistent with the method by which the Chief Operating Decision Maker (Adtalem’s President and Chief Executive Officer) evaluates performance and allocates resources. Performance evaluations are based, in part, on each segment’s operating income. Intersegment sales are accounted for at amounts comparable to sales to nonaffiliated customers and are eliminated in consolidation. “Home Office and Other” includes activity not allocated to a reporting segment and is included to reconcile segment results to the Consolidated Financial Statements. Segments may have allocated depreciation expense related to depreciable assets reported as an asset in a different segment. The accounting policies of the segments are the same as those described in “Note 3: Summary of Significant Accounting Policies.” Summary financial information by reporting segment is as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Revenue: Medical and Healthcare $ 223,575 $ 220,067 $ 638,302 $ 614,649 Professional Education 35,935 31,505 113,723 101,906 Technology and Business 49,907 59,030 159,791 196,602 Home Office and Other (808 ) (532 ) (2,423 ) (1,733 ) Total Consolidated Revenue $ 308,609 $ 310,070 $ 909,393 $ 911,424 Operating Income (Loss) from Continuing Operations: Medical and Healthcare $ 53,093 $ 60,304 $ 115,396 $ 141,583 Professional Education 5,086 2,382 19,469 15,082 Technology and Business (2,561 ) (103 ) 3,165 15,749 Home Office and Other (9,312 ) (10,079 ) (23,933 ) (30,105 ) Total Consolidated Operating Income from Continuing Operations $ 46,306 $ 52,504 $ 114,097 $ 142,309 Segment Assets: Medical and Healthcare $ 827,452 $ 935,360 $ 827,452 $ 935,360 Professional Education 446,752 455,358 446,752 455,358 Technology and Business 559,408 625,752 559,408 625,752 Home Office and Other 315,091 176,117 315,091 176,117 Discontinued Operations - 95,739 - 95,739 Total Consolidated Assets $ 2,148,703 $ 2,288,326 $ 2,148,703 $ 2,288,326 Additions to Long-Lived Assets: Medical and Healthcare $ 10,978 $ 10,740 $ 37,696 $ 25,076 Professional Education 84 12,918 1,487 14,139 Technology and Business 2,287 3,746 5,584 19,445 Home Office and Other 2,149 4,506 6,086 8,811 Total Consolidated Additions to Long-Lived Assets $ 15,498 $ 31,910 $ 50,853 $ 67,471 Reconciliation to Consolidated Financial Statements: Capital Expenditures $ 15,498 $ 18,960 $ 50,853 $ 50,433 Increase in Capital Assets from Acquisitions - 287 - 303 Increase in Intangible Assets and Goodwill - 12,663 - 16,735 Total Increase in Consolidated Long-Lived Assets $ 15,498 $ 31,910 $ 50,853 $ 67,471 Depreciation Expense (1): Medical and Healthcare $ 7,680 $ 8,360 $ 20,449 $ 23,171 Professional Education 480 533 1,212 1,515 Technology and Business 2,348 2,569 7,032 7,792 Home Office and Other 653 399 3,065 1,076 Total Consolidated Depreciation Expense $ 11,161 $ 11,861 $ 31,758 $ 33,554 Intangible Asset Amortization Expense: Professional Education $ 1,605 $ 1,626 $ 4,816 $ 4,876 Technology and Business 389 748 1,415 2,457 Total Consolidated Amortization Expense $ 1,994 $ 2,374 $ 6,231 $ 7,333 (1) Depreciation expense for each reporting segment has been modified to current presentation to include the Home Office and Other depreciation which is allocated to each reporting segment. Adtalem conducts its educational operations in the U.S., Barbados, St. Kitts, St. Maarten, Brazil, Canada, Europe, the Middle East, India, China and the Pacific Rim. Other international revenue, which is derived principally from Europe and the Pacific Rim, was less than 5% of total revenue for each of the three and nine months ended March 31, 2019 and 2018. Revenue and long-lived assets by geographic area are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Revenue from Unaffiliated Customers: Domestic Operations $ 160,948 $ 157,064 $ 468,787 $ 453,183 International Operations: Barbados, Dominica, St. Kitts and St. Maarten 95,366 91,580 274,207 257,194 Brazil 49,907 59,030 159,791 196,602 Other 2,388 2,396 6,608 4,445 Total International 147,661 153,006 440,606 458,241 Total Consolidated Revenue $ 308,609 $ 310,070 $ 909,393 $ 911,424 Long-Lived Assets: Domestic Operations $ 156,881 $ 150,759 $ 156,881 $ 150,759 International Operations: Barbados, Dominica, St. Kitts and St. Maarten 174,827 174,921 174,827 174,921 Brazil 89,233 107,573 89,233 107,573 Other 2,065 2,133 2,065 2,133 Total International 266,125 284,627 266,125 284,627 Total Consolidated Long-Lived Assets $ 423,006 $ 435,386 $ 423,006 $ 435,386 No one customer accounted for more than 10% of Adtalem's consolidated revenue. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 15: SUBSEQUENT EVENT On April 12, 2019, Adtalem entered into a Membership Interests Purchase Agreement (the “Purchase Agreement”) with OCL Financial Services LLC (“OCL FS”) and OCL Professional Education, Inc. (“Seller”), pursuant to which Adtalem agreed to purchase all of the membership interests of OCL FS from Seller. OCL FS offers education and compliance solutions courses in the field of financial services. Subject to the terms and conditions of the Purchase Agreement, at the closing of the transaction, Adtalem will pay consideration of $121.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements include the accounts of Adtalem and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100%, but greater than 50%, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “Net Loss (Income) Attributable to Noncontrolling Interest” in our Consolidated Statements of Income (Loss). Unless indicated, or the context requires otherwise, references to years refer to Adtalem’s fiscal years. |
Equity/Cost Method Investment | Equity/Cost Method Investment The equity method of accounting is used for an investment where we have the ability to influence the operating and financial decisions of the investee but do not possess more than a 50% ownership interest. Generally, this occurs when the ownership interest is greater than 20%. The investment is initially recorded at cost and classified as Other Assets, Net on the Consolidated Balance Sheets. The carrying amount of the investment is adjusted in subsequent periods for Adtalem’s share of the earnings or losses of the investee, which is recorded in the Consolidated Statements of Income (Loss) as Equity Method Investment Loss. The cost method of accounting is used for an investment where we do not have the ability to influence the operating and financial decisions of the investee. Generally, this occurs when the ownership interest is less than 20%. The investment is recorded at cost and classified as Other Assets, Net on the Consolidated Balance Sheets. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents can include time deposits, high-grade commercial paper, money market funds and bankers acceptances with original maturities of three months or less. Short-term investment objectives are to minimize risk and maintain liquidity. These investments are stated at cost (which approximates fair value) because of their short duration or liquid nature. Adtalem places its cash and temporary cash investments with high credit quality institutions. Cash and cash equivalent balances in U.S. bank accounts are generally in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Cash and cash equivalent balances in Brazilian bank accounts are generally in excess of the deposit insurance limits for Brazilian banks. Adtalem has not experienced any losses on its cash and cash equivalents. Management periodically evaluates the creditworthiness of the security issuers and financial institutions with which it invests and maintains deposit accounts. |
Financial Aid and Restricted Cash | Financial Aid and Restricted Cash A significant portion of cash is received from students who participate in government financial aid and assistance programs which are subject to political and governmental budgetary considerations. There is no assurance that such funding will be maintained at current levels. Extensive and complex regulations in the U.S. and Brazil govern all of the government financial assistance programs in which students participate. Administration of these programs is periodically reviewed by various regulatory agencies. Any regulatory violation could be the basis for disciplinary action, which could include the suspension, limitation or termination from such financial aid programs. Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in Adtalem’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized. |
Revenue Recognition | Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers (students), in an amount that reflects the consideration we expect to be entitled in exchange for those goods or services. The following tables disaggregate revenue by source (in thousands): Three Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 217,423 $ - $ 46,558 $ - $ 263,981 Test Preparation - 19,533 3,349 (808 ) 22,074 Certifications - 8,029 - - 8,029 Conferences/Seminars - 3,860 - - 3,860 Memberships/Subscriptions - 4,299 - - 4,299 Other 6,152 214 - - 6,366 $ 223,575 $ 35,935 $ 49,907 $ (808 ) $ 308,609 Nine Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 630,083 $ - $ 149,792 $ - $ 779,875 Test Preparation - 60,049 9,999 (2,423 ) 67,625 Certifications - 23,527 - - 23,527 Conferences/Seminars - 17,405 - - 17,405 Memberships/Subscriptions - 12,135 - - 12,135 Other 8,219 607 - - 8,826 $ 638,302 $ 113,723 $ 159,791 $ (2,423 ) $ 909,393 Three Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 220,067 $ - $ 53,803 $ - $ 273,870 Test Preparation - 19,652 5,227 (532 ) 24,347 Certifications - 5,432 - - 5,432 Conferences/Seminars - 2,371 - - 2,371 Memberships/Subscriptions - 3,580 - - 3,580 Other - 470 - - 470 $ 220,067 $ 31,505 $ 59,030 $ (532 ) $ 310,070 Nine Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 614,649 $ - $ 181,078 $ - $ 795,727 Test Preparation - 56,641 15,524 (1,733 ) 70,432 Certifications - 21,259 - - 21,259 Conferences/Seminars - 13,334 - - 13,334 Memberships/Subscriptions - 9,852 - - 9,852 Other - 820 - - 820 $ 614,649 $ 101,906 $ 196,602 $ (1,733 ) $ 911,424 In addition, see “Note 14: Segment Information” for a disaggregation of revenue by geographical region. Performance Obligations and Revenue Recognition Higher Education: Higher education revenue consists of tuition, fees, books and other educational products. The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the term as instruction is delivered. Books and other educational product revenue is recognized when products are shipped or students receive access to electronic materials. Under certain circumstances, we report revenue from these transactions on a net basis because our performance obligation is to facilitate a transaction between the student and a vendor. Test Preparation: Test preparation revenue consists of test preparation course instruction and self-study materials sales. Becker test preparation revenue is recognized when access to the course materials is delivered to the customer. Adtalem Brazil and EduPristine test preparation course instruction revenue is recognized on a straight-line basis over the applicable instruction delivery periods. Certifications: Certification revenue consists of exam preparation guides, seminars, exam sitting fees and recertification fees. We recognize revenue for each of these items at a point in time when the applicable performance obligation is satisfied. Conferences/Seminars: Conference revenue consists of revenue from attendees, sponsors and exhibitors. We recognize revenue for all items related to conferences at the time of the conference. Seminar revenue consists of seminars delivered in live, live-online, or on-demand online formats. We recognize revenue for live and live-online seminars on the day of the seminar. On-demand online seminars, in which customers have access to a webcast of a seminar, are recognized on the day the customer places the order. Memberships/Subscriptions: Membership revenue is recognized on a straight-line basis over the membership period. Subscription revenue is recognized on a straight-line basis over the subscription period. Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied. Customer contracts generally have separately stated prices for each performance obligation contained in the contract. Therefore, each performance obligation generally has its own standalone selling price. For higher education students, arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction price at the beginning of the academic term. Students utilizing private funding or funding through Adtalem’s institutional loan program (see “Note 6: Financing Receivables” for further discussion) generally pay during or after the academic term is complete. For non-higher education customers, payment is typically due and collected at the time a customer places an order. Transaction Price Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services. For higher education, students may receive discounts, scholarships or refunds, which gives rise to variable consideration. The amounts of discounts or scholarships are applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is reduced directly by these discounts or scholarships from the amount of the standard tuition rate charged. Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Adtalem to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Adtalem in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Adtalem’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within Accrued Liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term. Management reassesses collectability throughout the period revenue is recognized by the Adtalem institutions, on a student-by-student basis. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis. For test preparation and other Professional Education products, the transaction price is equal to the amount charged to the customer, which is the standard rate, less any discounts and an estimate for returns or refunds. We believe it is not probable that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. Therefore, the estimate of variable consideration is not constrained. Contract Balances For higher education institutions, students are billed at the beginning of each academic term and payment is due at that time. Adtalem’s performance obligation is to provide educational services in the form of instruction during the academic term. As instruction is provided, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Adtalem’s institutional loan program (see “Note 6: Financing Receivables”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts receivable is reduced. For our Professional Education businesses, customers are billed and payment is due at the time of order placement. In most cases, performance obligations are delivered subsequent to payments received. Delivering our performance obligations reduces deferred revenue, and accounts receivable is reduced upon payments received. Becker offers an 18-month term loan program as a financing option for the Becker CPA Exam Review Course (see “Note 6: Financing Receivables”). In this case, payment is received after satisfying the performance obligation. Revenue of $100.5 million was recognized during the first nine months of fiscal year 2019 that was included in the deferred revenue balance at the beginning of fiscal year 2019. Revenue recognized from performance obligations that were satisfied, or partially satisfied, in prior periods was not material. The difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period and increases from charges and payments received related to the start of academic terms beginning during the period. Allowance for bad debts as of March 31, 2019, June 30, 2018 and March 31, 2018 was $20.0 million, $27.6 million and $28.4 million, respectively. Practical Expedients As our performance obligations have an original expected duration of one year or less, we have applied the practical expedient (as provided in ASC 606-10-50-14) to not disclose the information in ASC 606-10-50-13, which requires disclosure of the amount of the transaction price allocated to our performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period and when the entity expects to recognize this amount as revenue. All consideration from contracts with customers is included in the transaction price. |
Internal-Use Software Development Costs | Internal-Use Software Development Costs Adtalem capitalizes certain internal-use software development costs that are amortized using the straight-line method over the estimated lives of the software, not to exceed seven years. Capitalized costs include external direct costs of equipment, materials and services consumed in developing or obtaining internal-use software and payroll-related costs for employees directly associated with the internal-use software development project. Capitalization of such costs ceases at the point at which the project is substantially complete and ready for its intended purpose. Capitalized internal-use software development costs for projects not yet complete are included as Construction in Progress in the Land, Building and Equipment section of the Consolidated Balance Sheets. As of March 31, 2019, June 30, 2018 and March 31, 2018, the net balance of capitalized internal-use software development costs was $11.2 million, $13.5 million and $3.4 million, respectively. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Adtalem evaluates the carrying amount of its significant long-lived assets whenever changes in circumstances or events indicate that the value of such assets may not be fully recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. During the nine months ended March 31, 2019, we recorded impairment charges of $2.0 million to write-down building, building improvements, furniture and equipment to zero based on the fair market value of the DeVry University and Carrington operations, which are classified within discontinued operations. During the first quarter of fiscal year 2018, the campuses of AUC and RUSM were damaged from Hurricanes Irma and Maria, respectively. Hurricane-related impairment charges of $29.9 million were recorded in the nine months ended March 31, 2018 for building, building improvements, furniture and equipment, along with receivables for insurance reimbursements of these amounts, less deductibles, of $20.8 million as of March 31, 2018. The impairment charges are included in Cost of Educational Services in the Consolidated Statements of Income (Loss). In the first quarter of fiscal year 2019, Adtalem announced its decision to relocate RUSM’s campus operations to Barbados and not return to RUSM’s Dominica campus. Adtalem recorded impairment charges of $39.1 million in the nine months ended March 31, 2019 to fully impair the land, buildings and equipment in Dominica as management has determined the market value less the costs to sell the facilities or move the equipment is zero (see “Note 10: Restructuring Charges”). The impairment charges are included in Restructuring Expense in the Consolidated Statements of Income (Loss). For a discussion of the impairment review of goodwill and intangible assets see “Note 9: Intangible Assets.” |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of the AUC, RUSM and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. Adtalem Brazil’s and EduPristine’s operations and Becker’s and ACAMS’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resulting translation adjustments are included in the component of Shareholders’ Equity designated as Accumulated Other Comprehensive Loss. Transaction gains or losses during each of the three-month and nine-month periods ended March 31, 2019 and 2018 were not material. |
Noncontrolling Interest | Noncontrolling Interest Adtalem currently maintains a 97.9% ownership interest in Adtalem Brazil with the remaining 2.1% owned by members of the current Adtalem Brazil senior management group. In addition, Adtalem currently maintains a 69% ownership interest in EduPristine with the remaining 31% owned by Kaizen Management Advisors (“Kaizen”), an India-based private equity firm. The adjustment to increase or decrease the Adtalem Brazil and EduPristine noncontrolling interests for their respective proportionate shares of Adtalem Brazil’s and EduPristine’s profit (loss) flows through the Consolidated Statements of Income (Loss) each reporting period based on Adtalem’s noncontrolling interest accounting policy. Since July 1, 2015, Adtalem has had the right to exercise a call option and purchase any remaining Adtalem Brazil stock from Adtalem Brazil management. Likewise, Adtalem Brazil management has had the right to exercise a put option and sell its remaining ownership interest in Adtalem Brazil to Adtalem. Beginning on March 26, 2020, Adtalem will have the right to exercise a call option and purchase any remaining EduPristine stock from Kaizen. Likewise, Kaizen will have the right to exercise a put option and sell up to 33% of its remaining ownership interest in EduPristine to Adtalem. Beginning on March 26, 2022, Kaizen will have the right to exercise a put option and sell its remaining ownership interest in EduPristine to Adtalem. Since the put options are out of the control of Adtalem, authoritative guidance requires the noncontrolling interests, which includes the value of the put options, to be displayed outside of the equity section of the Consolidated Balance Sheets. The Adtalem Brazil management and Kaizen put options are being accreted to their respective redemption values in accordance with the terms of the related stock purchase agreements. The adjustments to increase or decrease the put options to their expected redemption values each reporting period are recorded in retained earnings in accordance with GAAP. The following is a reconciliation of the noncontrolling interest balance (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance at Beginning of Period $ 8,651 $ 7,405 $ 9,110 $ 6,285 Net (Loss) Income Attributable to Noncontrolling Interest (39 ) (46 ) 117 459 (Decrease) Increase in Redemption Value of Noncontrolling Interest Put Options (130 ) (42 ) (745 ) 573 Acquisition of Noncontrolling Interest in EduPristine - 4,074 - 4,074 Balance at End of Period $ 8,482 $ 11,391 $ 8,482 $ 11,391 |
Earnings per Common Share | Earnings per Common Share Basic earnings per share is computed by dividing net income or loss attributable to Adtalem by the weighted average number of common shares outstanding during the period plus unvested participating restricted stock units (“RSUs”). Diluted earnings per share is computed by dividing net income or loss attributable to Adtalem by the weighted average number of shares assuming dilution. Diluted shares are computed using the Treasury Stock Method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised during the period. Excluded from the computations of diluted earnings per share were outstanding stock-based grants representing 194,000 and 223,000 shares of common stock for the three and nine months ended March 31, 2019, respectively, and 294,000 and 1,273,000 shares of common stock for the three and nine months ended March 31, 2018, respectively. These outstanding stock-based grants were excluded because the exercise prices were greater than the average market price of the common shares or the assumed proceeds upon exercise under the Treasury Stock Method resulted in the repurchase of more shares than would be issued; thus, their effect would be anti-dilutive. The following is a reconciliation of basic shares to diluted shares (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Weighted Average Shares Outstanding 57,583 60,352 58,656 60,970 Unvested Participating RSUs 478 678 543 718 Basic Shares 58,061 61,030 59,199 61,688 Effect of Dilutive Stock Options 741 935 805 786 Diluted Shares 58,802 61,965 60,004 62,474 |
Treasury Stock | Treasury Stock Adtalem’s Board of Directors (the “Board”) has authorized share repurchase programs on eleven occasions (see “Note 7: Share Repurchase Programs”). The tenth share repurchase program was approved on February 16, 2017 and commenced in February 2017. The eleventh share repurchase program was approved on November 7, 2018 and commenced in January 2019. Shares that are repurchased by Adtalem are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity. From time to time, shares of our common stock are delivered back to Adtalem under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the Adtalem Stock Incentive Plans (see “Note 4: Stock-Based Compensation”). In addition, shares of our common stock are delivered back to Adtalem for payment of withholding taxes from employees for vesting RSUs. These shares are recorded as Treasury Stock at cost and result in a reduction of Shareholders’ Equity. Prior to March 2019, treasury shares were reissued on a monthly basis, at market value, less a five percent discount, to the Adtalem Colleague Stock Purchase Plan in exchange for employee payroll deductions. When treasury shares are reissued, Adtalem uses an average cost method to reduce the Treasury Stock balance. Gains on the difference between the average cost and the reissuance price are credited to Additional Paid-in Capital. Losses on the difference are charged to Additional Paid-in Capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to Retained Earnings. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenue and expense reported during the period. Actual results could differ from those estimates. |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss is composed of the change in cumulative translation adjustment, primarily at Adtalem Brazil, and unrealized gains on available-for-sale marketable securities, net of the effects of income taxes. The Accumulated Other Comprehensive Loss balance as of March 31, 2019, consists of $148.8 million of cumulative translation losses ($145.4 million attributable to Adtalem and $3.4 million attributable to noncontrolling interest) and unrealized gains on available-for-sale debt securities were immaterial. As of June 30, 2018, this balance consisted of $142.6 million of cumulative translation losses ($139.6 million attributable to Adtalem and $3.0 million attributable to noncontrolling interest) and $ 0.4 |
Advertising Expense | Advertising Expense Advertising costs are recognized as expense in the period in which materials are purchased or services are performed. Advertising expense, which is included in Student Services and Administrative Expense in the Consolidated Statements of Income (Loss), was $21.7 million and $61.9 million for the three and nine months ended March 31, 2019, respectively, and $22.1 million and $59.5 million for the three and nine months ended March 31, 2018, respectively. |
Hurricane Expense | Hurricane Expense In September 2017, Hurricanes Irma and Maria caused damage and disrupted operations at AUC and RUSM. Adtalem recorded expenses of $12.5 million in the nine months ended March 31, 2019 associated with incremental costs of teaching at alternative sites, and $11.1 million and $55.1 $12.5 million were recorded in the nine months ended March 31, 2019, and insurance receivables of $20.8 million were recorded in the nine months ended March 31, 2018 to offset these expenses. Based upon damage assessments of the AUC and RUSM facilities, impairment write-downs of buildings, building improvements, furniture and equipment of $29.9 million were recorded in the nine months ended March 31, 2018. Insurance receivables of $20.8 million were recorded to offset these expenses in the nine months ended March 31, 2018. No further asset impairments were recorded in fiscal year 2019. In total, no net expense related to the hurricanes was recorded in the three and nine months ended March 31, 2019. In total, no net expense was recorded in the three months ended March 31, 2018 and $13.4 million of net expense was recorded in Cost of Educational Services in the Consolidated Statement of Income (Loss) for the nine months ended March 31, 2018. The expense primarily represented the deductibles under insurance policies. During the second quarter of fiscal year 2019, Adtalem received the final insurance proceeds related to Hurricanes Irma and Maria and recorded a pre-tax gain of $15.6 million in the nine months ended March 31, 2019. |
Restructuring Charges | Restructuring Charges Adtalem’s financial statements include charges related to severance and related benefits for workforce reductions in staff. These charges also include early lease termination or cease-of-use costs, accelerated depreciation and losses on disposals of property and equipment related to campus and administrative office consolidations (see “Note 10: Restructuring Charges”). When estimating the 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This 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 amendments are 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. In February 2016, FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-to-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Adtalem will implement this guidance effective July 1, 2019. Management is evaluating the impact the guidance will have on Adtalem’s Consolidated Financial Statements and believes the adoption will impact the Consolidated Balance Sheet with significant increases in assets and liabilities. In January 2016, FASB issued ASU No. 2016-01: “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This guidance was issued to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The guidance eliminates the classification of equity securities into different categories (that is, trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. In the first quarter of fiscal year 2019, we retrospectively adopted this guidance. The adoption resulted in a cumulative adjustment to decrease retained earnings and increase additional paid-in capital, each by $0.4 million. This guidance requires Adtalem to record the changes in the fair value of its available-for-sale equity investments through net income, which is included within the Consolidated Statements of Income (Loss) beginning with the first quarter of fiscal year 2019. In May 2014, FASB issued ASU No. 2014-09: “Revenue from Contracts with Customers (Topic 606).” This guidance was issued to clarify the principles for recognizing revenue and develop a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”). The guidance is effective for the fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We adopted this guidance effective July 1, 2018 using the full retrospective approach. The adoption of this standard did not have any impact on Adtalem’s Consolidated Financial Statements, and therefore, no adjustments were made to the prior year comparative financial statements. See subsection “Revenue Recognition” in “Note 3: Summary of Significant Accounting Policies” for the disclosures related to this new accounting standard. |
Reclassifications | Reclassifications Beginning in the fourth quarter of fiscal year 2018, Carrington operations were classified as discontinued operations. See “Note 2: Discontinued Operations” for further information. Prior period amounts have been revised to conform to the current classification. Certain expenses in prior periods previously allocated to Carrington within the U.S. Traditional Postsecondary segment have been reclassified to the Home Office and Other segment based on discontinued operation reporting guidance regarding allocation of corporate overhead. See “Note 14: Segment Information” for additional information. In addition, we have reclassified certain amounts in the operating section of the Consolidated Statement of Cash Flows to conform to current period classification. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Balance Sheet Information of Assets and Liabilities Reported as Discontinued Operations | The following is a summary of balance sheet information of assets and liabilities reported as held for sale (in thousands): March 31, June 30, March 31, 2019 2018 2018 ASSETS: Current Assets: Cash and Cash Equivalents $ - $ 1 $ 707 Restricted Cash - 13,404 9,781 Accounts Receivable, Net - 25,294 23,549 Prepaid Expenses and Other Current Assets - 8,433 9,587 Total Current Assets Held for Sale - 47,132 43,624 Land, Building and Equipment Held for Sale, Net - - 14,994 Noncurrent Assets: Intangible Assets - - 20,200 Perkins Program Fund, Net - 13,450 13,450 Other Assets, Net - - 3,471 Total Noncurrent Assets Held for Sale - 13,450 37,121 Total Assets Held for Sale $ - $ 60,582 $ 95,739 LIABILITIES: Current Liabilities: Accounts Payable $ - $ 24,312 $ 18,190 Accrued Salaries, Wages and Benefits - 13,979 11,610 Accrued Liabilities - 1,514 2,548 Deferred Revenue - 16,634 40,276 Total Current Liabilities Held for Sale - 56,439 72,624 Noncurrent Liabilities: Deferred Income Taxes - 216 1,021 Total Noncurrent Liabilities Held for Sale - 216 1,021 Total Liabilities Held for Sale $ - $ 56,655 $ 73,645 The following is a summary of income statement information of operations reported as discontinued operations (in thousands). The results include Carrington's and DeVry University's operations through the date of each respective sale. For the three months ended March 31, 2019, activity is related to adjustments to accounts based on settlement of balances. Three Months Ended Nine Months Ended March 31, March 31, 2019 2018 2019 2018 REVENUE $ - $ 122,705 $ 195,716 $ 370,263 OPERATING COST AND EXPENSE: Cost of Educational Services - 65,182 109,416 209,871 Student Services and Administrative Expense (65 ) 53,057 99,227 162,130 Restructuring (Gain) Expense (1,973 ) 6,150 (2,470 ) 16,342 Asset Impairment Charge - Intangible and Goodwill - - - 23,841 Asset Impairment Charge - Building and Equipment - 5,738 1,953 29,129 Loss on Sale of Assets - - - 230 Total Operating Cost and Expense (2,038 ) 130,127 208,126 441,543 Income (Loss) from Discontinued Operations Before Income Taxes 2,038 (7,422 ) (12,410 ) (71,280 ) Loss on Disposal of Discontinued Operations Before Income Taxes (265 ) - (32,979 ) - Income Tax (Provision) Benefit (120 ) 3,851 7,212 25,741 Income (Loss) from Discontinued Operations $ 1,653 $ (3,571 ) $ (38,177 ) $ (45,539 ) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregate revenue | The following tables disaggregate revenue by source (in thousands): Three Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 217,423 $ - $ 46,558 $ - $ 263,981 Test Preparation - 19,533 3,349 (808 ) 22,074 Certifications - 8,029 - - 8,029 Conferences/Seminars - 3,860 - - 3,860 Memberships/Subscriptions - 4,299 - - 4,299 Other 6,152 214 - - 6,366 $ 223,575 $ 35,935 $ 49,907 $ (808 ) $ 308,609 Nine Months Ended March 31, 2019 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 630,083 $ - $ 149,792 $ - $ 779,875 Test Preparation - 60,049 9,999 (2,423 ) 67,625 Certifications - 23,527 - - 23,527 Conferences/Seminars - 17,405 - - 17,405 Memberships/Subscriptions - 12,135 - - 12,135 Other 8,219 607 - - 8,826 $ 638,302 $ 113,723 $ 159,791 $ (2,423 ) $ 909,393 Three Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 220,067 $ - $ 53,803 $ - $ 273,870 Test Preparation - 19,652 5,227 (532 ) 24,347 Certifications - 5,432 - - 5,432 Conferences/Seminars - 2,371 - - 2,371 Memberships/Subscriptions - 3,580 - - 3,580 Other - 470 - - 470 $ 220,067 $ 31,505 $ 59,030 $ (532 ) $ 310,070 Nine Months Ended March 31, 2018 Medical and Healthcare Professional Education Technology and Business Home Office and Other Consolidated Higher Education $ 614,649 $ - $ 181,078 $ - $ 795,727 Test Preparation - 56,641 15,524 (1,733 ) 70,432 Certifications - 21,259 - - 21,259 Conferences/Seminars - 13,334 - - 13,334 Memberships/Subscriptions - 9,852 - - 9,852 Other - 820 - - 820 $ 614,649 $ 101,906 $ 196,602 $ (1,733 ) $ 911,424 |
Reconciliation of Non-Controlling Interest Balance | The following is a reconciliation of the noncontrolling interest balance (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Balance at Beginning of Period $ 8,651 $ 7,405 $ 9,110 $ 6,285 Net (Loss) Income Attributable to Noncontrolling Interest (39 ) (46 ) 117 459 (Decrease) Increase in Redemption Value of Noncontrolling Interest Put Options (130 ) (42 ) (745 ) 573 Acquisition of Noncontrolling Interest in EduPristine - 4,074 - 4,074 Balance at End of Period $ 8,482 $ 11,391 $ 8,482 $ 11,391 |
Reconciliation of Basic Shares to Diluted Shares | The following is a reconciliation of basic shares to diluted shares (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Weighted Average Shares Outstanding 57,583 60,352 58,656 60,970 Unvested Participating RSUs 478 678 543 718 Basic Shares 58,061 61,030 59,199 61,688 Effect of Dilutive Stock Options 741 935 805 786 Diluted Shares 58,802 61,965 60,004 62,474 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of options Activity | The following is a summary of options activity for the nine months ended March 31, 2019: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Life (in Years) (in thousands) Outstanding at July 1, 2018 1,806,133 $ 32.88 Granted 129,025 49.01 Exercised (405,810 ) 42.75 Forfeited - - Expired (19,429 ) 51.65 Outstanding at March 31, 2019 1,509,919 31.37 6.89 $ 23,301 Exercisable at March 31, 2019 592,407 $ 31.60 5.09 $ 9,103 |
Fair Values of Stock Option Awards Estimated Weighted Average Assumptions | The fair value of Adtalem’s stock option grants was estimated assuming the following weighted average assumptions: Fiscal Year 2019 2018 Expected Life (in Years) 6.50 6.68 Expected Volatility 39.60 % 41.45 % Risk-free Interest Rate 2.73 % 1.95 % Dividend Yield 0.00 % 0.00 % |
Summary of Restricted Stock Units Activity | The following is a summary of RSU activity for the nine months ended March 31, 2019: Weighted Average Number of Grant Date RSUs Fair Value Outstanding at July 1, 2018 1,226,958 $ 28.31 Granted 217,960 49.57 Vested (450,484 ) 27.86 Forfeited (79,958 ) 33.26 Outstanding at March 31, 2019 914,476 $ 33.45 |
Total Stock-Based Compensation Expense Included in Consolidated Statement of Earnings | The following table shows total stock-based compensation expense included in the Consolidated Statements of Income (Loss) (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Cost of Educational Services $ 279 $ 876 $ 976 $ 3,510 Student Services and Administrative Expense 2,729 1,861 9,393 7,459 Restructuring Expense - - - 548 3,008 2,737 10,369 11,517 Income Tax Benefit (692 ) (554 ) (3,930 ) (4,655 ) Net Stock-Based Compensation Expense $ 2,316 $ 2,183 $ 6,439 $ 6,862 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents Adtalem's assets and liabilities at March 31, 2019, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 321,211 $ - $ - Investments in Marketable Securities 8,341 - - Institutional Loans Receivable, Net - 42,577 - Loan Receivable from DeVry University - 10,000 - Deferred Acquisition Obligations - 16,001 - Total Financial Assets at Fair Value $ 329,552 $ 68,578 $ - The following table presents Adtalem's assets and liabilities at June 30, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 430,690 $ - $ - Investments in Marketable Securities 4,255 - - Institutional Loans Receivable, Net - 44,320 - Deferred Acquisition Obligations - 18,585 - Total Financial Assets at Fair Value $ 434,945 $ 62,905 $ - The following table presents Adtalem's assets and liabilities at March 31, 2018, that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): Level 1 Level 2 Level 3 Cash and Cash Equivalents $ 265,325 $ - $ - Investments in Marketable Securities 4,200 - - Institutional Loans Receivable, Net - 41,646 - Deferred Acquisition Obligations - 21,393 - FIES Receivable - 15,094 - Total Financial Assets at Fair Value $ 269,525 $ 78,133 $ - |
FINANCING RECEIVABLES (Tables)
FINANCING RECEIVABLES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Institutional Loan Balances and Related Allowances for Credit Losses | The following table details the institutional loan balances along with the related allowances for credit losses (in thousands). March 31, 2019 June 30, 2018 March 31, 2018 Gross Institutional Loans $ 47,259 $ 54,323 $ 51,389 Allowance for Credit Losses: Balance at July 1 $ (10,003 ) $ (9,736 ) $ (9,736 ) Charge-offs and Adjustments 9,965 330 206 Recoveries (73 ) (61 ) (51 ) Additional Provision (4,571 ) (536 ) (162 ) Balance at End of Period (4,682 ) (10,003 ) (9,743 ) Net Institutional Loans $ 42,577 $ 44,320 $ 41,646 |
Credit Risk Profiles of Institutional Student Loan Balances | The following tables detail the credit risk profiles of the institutional loan balances based on payment activity and an aging of past due institutional loans (in thousands): March 31, June 30, March 31, 2019 2018 2018 Institutional Loans: Performing $ 42,716 $ 44,492 $ 42,048 Nonperforming 4,543 9,831 9,341 Total Institutional Loans $ 47,259 $ 54,323 $ 51,389 |
Institutional Student Loans Past Due | 1-29 Days Past Due 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Total Institutional Loans Institutional Loans: March 31, 2019 $ 4,092 $ 4,412 $ 4,125 $ 4,543 $ 17,172 $ 30,087 $ 47,259 June 30, 2018 $ 8,473 $ 900 $ 3,099 $ 9,831 $ 22,303 $ 32,020 $ 54,323 March 31, 2018 $ 8,903 $ 464 $ 175 $ 9,341 $ 18,883 $ 32,506 $ 51,389 |
SHARE REPURCHASE PROGRAMS (Tabl
SHARE REPURCHASE PROGRAMS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Share Repurchase Programs [Abstract] | |
Shares Repurchased Under Programs | Adtalem has repurchased shares under the following programs as of March 31, 2019: Date Shares Total Cost Authorized Repurchased (in millions) November 15, 2006 908,399 $ 35.0 May 13, 2008 1,027,417 50.0 November 11, 2009 972,205 50.0 August 11, 2010 1,103,628 50.0 November 10, 2010 968,105 50.0 May 20, 2011 2,396,143 100.0 November 2, 2011 3,478,299 100.0 August 29, 2012 2,005,317 62.7 December 15, 2015 1,672,250 36.6 February 16, 2017 7,091,188 300.0 November 7, 2018 870,564 41.9 Totals 22,493,515 $ 876.2 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
EduPristine [Member] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition of Adtalem’s majority interest in EduPristine (in thousands): February 5 2018 Current Assets $ 866 Property and Equipment 239 Other Long-term Assets 69 Intangible Assets 1,380 Goodwill 11,527 Total Assets Acquired 14,081 Liabilities Assumed 2,715 Net Assets Acquired $ 11,366 |
Sao Judas Tadeu [Member] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): November 1 2017 Current Assets $ 558 Property and Equipment 64 Other Long-term Assets 9 Intangible Assets 381 Goodwill 5,636 Total Assets Acquired 6,648 Liabilities Assumed 684 Net Assets Acquired $ 5,964 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The value and estimated useful life by asset type is as follows (in thousands): November 1, 2017 Value Assigned Estimated Useful Life Student Relationships $ 162 6 months |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): March 31, 2019 Gross Carrying Amount Accumulated Amortization Weighted Average Amortization Period Amortizable Intangible Assets: Student Relationships $ 7,952 $ (7,401 ) 5 Years Customer Relationships 42,900 (13,071 ) 10 Years Curriculum/Software 6,810 (5,775 ) 4 Years Franchise Contracts 8,947 (2,071 ) 18 Years Clinical Agreements 331 (127 ) 15 Years Trade Names 965 (965 ) 10 Years Proprietary Technology 500 (344 ) 4 Years Total $ 68,405 $ (29,754 ) Indefinite-Lived Intangible Assets: Trade Names $ 105,745 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 81,511 Total $ 316,496 June 30, 2018 Gross Carrying Amount Accumulated Amortization Amortizable Intangible Assets: Student Relationships $ 8,193 $ (6,972 ) Customer Relationships 42,900 (9,598 ) Non-compete Agreements 700 (700 ) Curriculum/Software 6,833 (4,265 ) Franchise Contracts 9,064 (1,720 ) Clinical Agreements 336 (112 ) Trade Names 976 (904 ) Proprietary Technology 500 (250 ) Total $ 69,502 $ (24,521 ) Indefinite-Lived Intangible Assets: Trade Names $ 106,132 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 82,578 Total $ 317,950 March 31, 2018 Gross Carrying Amount Accumulated Amortization Amortizable Intangible Assets: Student Relationships $ 9,601 $ (7,831 ) Customer Relationships 42,900 (8,430 ) Non-compete Agreements 700 (691 ) Curriculum/Software 7,148 (3,901 ) Franchise Contracts 10,621 (1,868 ) Clinical Agreements 393 (125 ) Trade Names 1,146 (1,031 ) Proprietary Technology 500 (219 ) Total $ 73,009 $ (24,096 ) Indefinite-Lived Intangible Assets: Trade Names $ 109,755 Ross Title IV Eligibility and Accreditations 14,100 Intellectual Property 13,940 Chamberlain Title IV Eligibility and Accreditations 1,200 AUC Title IV Eligibility and Accreditations 100,000 Adtalem Brazil Accreditation 97,234 Total $ 336,229 |
Estimated Amortization Expense for Amortized Intangible Assets | Estimated amortization expense for amortizable intangible assets for the next five fiscal years ending June 30 and in the aggregate, by reporting unit, is as follows (in thousands): Professional Adtalem Fiscal Year Education Brazil Total 2019 (excluding the nine months ended March 31, 2019) $ 1,605 $ 349 $ 1,954 2020 4,671 1,223 5,894 2021 4,440 766 5,206 2022 4,300 519 4,819 2023 4,118 519 4,637 Thereafter 11,268 4,873 16,141 |
Changes in Carrying Amount of Goodwill, by Segment | The table below summarizes goodwill balances by reporting unit (in thousands): March 31, June 30, March 31, Reporting Unit 2019 2018 2018 Chamberlain $ 4,716 $ 4,716 $ 4,716 AUC 68,321 68,321 68,321 RUSM and RUSVM 237,173 237,173 237,173 Professional Education 317,475 317,699 319,528 Adtalem Brazil 183,575 185,978 216,105 Total $ 811,260 $ 813,887 $ 845,843 The table below summarizes goodwill balances by reporting segment (in thousands): March 31, June 30, March 31, Reporting Segment 2019 2018 2018 Medical and Healthcare $ 310,210 $ 310,210 $ 310,210 Professional Education 317,475 317,699 319,528 Technology and Business 183,575 185,978 216,105 Total $ 811,260 $ 813,887 $ 845,843 The table below summarizes the changes in goodwill balances by reporting segment (in thousands): Medical and Healthcare Professional Education Technology and Business Total Balance at June 30, 2017 310,210 306,653 212,223 829,086 Acquisitions - 12,548 3,807 16,355 Foreign exchange rate changes - 327 75 402 Balance at March 31, 2018 310,210 319,528 216,105 845,843 Purchase accounting adjustments - (1,021 ) 1,829 808 Foreign exchange rate changes - (808 ) (31,956 ) (32,764 ) Balance at June 30, 2018 310,210 317,699 185,978 813,887 Foreign exchange rate changes - (224 ) (2,403 ) (2,627 ) Balance at March 31, 2019 $ 310,210 $ 317,475 $ 183,575 $ 811,260 |
Summary of Indefinite-Lived Intangible Assets Balances by Reporting Segment | The table below summarizes the indefinite-lived intangible asset balances by reporting segment (in thousands): March 31, June 30, March 31, Reporting Segment 2019 2018 2018 Medical and Healthcare $ 137,500 $ 137,500 $ 137,500 Professional Education 69,111 69,126 67,812 Technology and Business 109,885 111,324 130,917 Total $ 316,496 $ 317,950 $ 336,229 |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Pre-tax restructuring charges by segment were as follows (in thousands): Three Months Ended March 31, 2019 Nine Months Ended March 31, 2019 Real Estate and Other Termination Benefits Total Real Estate and Other Termination Benefits Total Medical and Healthcare $ (110 ) $ (23 ) $ (133 ) $ 40,033 $ 1,294 $ 41,327 Technology and Business 1,716 - 1,716 1,901 - 1,901 Home Office and Other 2,271 48 2,319 3,748 119 3,867 Total $ 3,877 $ 25 $ 3,902 $ 45,682 $ 1,413 $ 47,095 Three Months Ended March 31, 2018 Nine Months Ended March 31, 2018 Real Estate and Other Termination Benefits Total Real Estate and Other Termination Benefits Total Medical and Healthcare $ - $ 530 $ 530 $ 26 $ 616 $ 642 Home Office and Other 46 45 91 (419 ) 2,961 2,542 Total $ 46 $ 575 $ 621 $ (393 ) $ 3,577 $ 3,184 |
Schedule of Restructuring Reserve by Type of Cost | 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) 4,761 Reduction in liability (payments and adjustments) (20,568 ) Liability balance at March 31, 2019 $ 23,120 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Debt Instruments [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consists of the following (in thousands): March 31, June 30, March 31, 2019 2018 2018 Total Debt: Term B Loan $ 297,750 $ 300,000 $ - Revolver - - 120,000 Total Principal Payments Due 297,750 300,000 120,000 Deferred Debt Issuance Costs (6,161 ) (6,927 ) - Total Amount Outstanding 291,589 293,073 120,000 Less Current Portion: Term B Loan (3,000 ) (3,000 ) - Noncurrent Portion $ 288,589 $ 290,073 $ 120,000 |
Schedule of Maturities of Long-term Debt | Scheduled future maturities of long-term debt for the next five fiscal years ending June 30 and in the aggregate are as follows (in thousands): Fiscal Year Maturity Payments 2019 (excluding the nine months ended March 31, 2019) $ 750 2020 3,000 2021 3,000 2022 3,000 2023 3,000 Thereafter 285,000 $ 297,750 |
Schedule Of Debt Issuance Costs | The following table summarizes the total deferred debt issuance costs for the Term B Loan and Revolver, which will be amortized over seven years and five years, respectively (in thousands): Term B Loan Revolver Total Deferred Debt Issuance Costs at June 30, 2018 $ 6,927 $ 2,606 $ 9,533 Amortization of Deferred Debt Issuance Costs (766 ) (409 ) (1,175 ) Deferred Debt Issuance Costs at March 31, 2019 $ 6,161 $ 2,197 $ 8,358 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Tabulation of Business Segment Information Based on Current Segmentation | Summary financial information by reporting segment is as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Revenue: Medical and Healthcare $ 223,575 $ 220,067 $ 638,302 $ 614,649 Professional Education 35,935 31,505 113,723 101,906 Technology and Business 49,907 59,030 159,791 196,602 Home Office and Other (808 ) (532 ) (2,423 ) (1,733 ) Total Consolidated Revenue $ 308,609 $ 310,070 $ 909,393 $ 911,424 Operating Income (Loss) from Continuing Operations: Medical and Healthcare $ 53,093 $ 60,304 $ 115,396 $ 141,583 Professional Education 5,086 2,382 19,469 15,082 Technology and Business (2,561 ) (103 ) 3,165 15,749 Home Office and Other (9,312 ) (10,079 ) (23,933 ) (30,105 ) Total Consolidated Operating Income from Continuing Operations $ 46,306 $ 52,504 $ 114,097 $ 142,309 Segment Assets: Medical and Healthcare $ 827,452 $ 935,360 $ 827,452 $ 935,360 Professional Education 446,752 455,358 446,752 455,358 Technology and Business 559,408 625,752 559,408 625,752 Home Office and Other 315,091 176,117 315,091 176,117 Discontinued Operations - 95,739 - 95,739 Total Consolidated Assets $ 2,148,703 $ 2,288,326 $ 2,148,703 $ 2,288,326 Additions to Long-Lived Assets: Medical and Healthcare $ 10,978 $ 10,740 $ 37,696 $ 25,076 Professional Education 84 12,918 1,487 14,139 Technology and Business 2,287 3,746 5,584 19,445 Home Office and Other 2,149 4,506 6,086 8,811 Total Consolidated Additions to Long-Lived Assets $ 15,498 $ 31,910 $ 50,853 $ 67,471 Reconciliation to Consolidated Financial Statements: Capital Expenditures $ 15,498 $ 18,960 $ 50,853 $ 50,433 Increase in Capital Assets from Acquisitions - 287 - 303 Increase in Intangible Assets and Goodwill - 12,663 - 16,735 Total Increase in Consolidated Long-Lived Assets $ 15,498 $ 31,910 $ 50,853 $ 67,471 Depreciation Expense (1): Medical and Healthcare $ 7,680 $ 8,360 $ 20,449 $ 23,171 Professional Education 480 533 1,212 1,515 Technology and Business 2,348 2,569 7,032 7,792 Home Office and Other 653 399 3,065 1,076 Total Consolidated Depreciation Expense $ 11,161 $ 11,861 $ 31,758 $ 33,554 Intangible Asset Amortization Expense: Professional Education $ 1,605 $ 1,626 $ 4,816 $ 4,876 Technology and Business 389 748 1,415 2,457 Total Consolidated Amortization Expense $ 1,994 $ 2,374 $ 6,231 $ 7,333 (1) Depreciation expense for each reporting segment has been modified to current presentation to include the Home Office and Other depreciation which is allocated to each reporting segment. |
Revenues and Long-Lived Assets by Geographic Area | Revenue and long-lived assets by geographic area are as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2019 2018 2019 2018 Revenue from Unaffiliated Customers: Domestic Operations $ 160,948 $ 157,064 $ 468,787 $ 453,183 International Operations: Barbados, Dominica, St. Kitts and St. Maarten 95,366 91,580 274,207 257,194 Brazil 49,907 59,030 159,791 196,602 Other 2,388 2,396 6,608 4,445 Total International 147,661 153,006 440,606 458,241 Total Consolidated Revenue $ 308,609 $ 310,070 $ 909,393 $ 911,424 Long-Lived Assets: Domestic Operations $ 156,881 $ 150,759 $ 156,881 $ 150,759 International Operations: Barbados, Dominica, St. Kitts and St. Maarten 174,827 174,921 174,827 174,921 Brazil 89,233 107,573 89,233 107,573 Other 2,065 2,133 2,065 2,133 Total International 266,125 284,627 266,125 284,627 Total Consolidated Long-Lived Assets $ 423,006 $ 435,386 $ 423,006 $ 435,386 |
INTERIM FINANCIAL STATEMENTS -
INTERIM FINANCIAL STATEMENTS - Additional Information (Detail) | Mar. 31, 2019 |
Adtalem Brazil [Member] | |
Noncontrolling Interest, Ownership Percentage by Parent | 97.90% |
Edupristine [Member] | |
Noncontrolling Interest, Ownership Percentage by Parent | 69.00% |
DISCONTINUED OPERATIONS (Summar
DISCONTINUED OPERATIONS (Summary of Balance Sheet Information of Assets and Liabilities) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Current Assets: | |||
Cash and Cash Equivalents | $ 0 | $ 1 | $ 707 |
Restricted Cash | 0 | 13,404 | 9,781 |
Accounts Receivable, Net | 0 | 25,294 | 23,549 |
Prepaid Expenses and Other Current Assets | 0 | 8,433 | 9,587 |
Total Current Assets Held for Sale | 0 | 47,132 | 43,624 |
Land, Building and Equipment Held for Sale, Net | 0 | 0 | 14,994 |
Noncurrent Assets: | |||
Intangible Assets | 0 | 0 | 20,200 |
Perkins Program Fund, Net | 0 | 13,450 | 13,450 |
Other Assets, Net | 0 | 0 | 3,471 |
Total NonCurrent Assets Held for Sale | 0 | 13,450 | 37,121 |
Total Assets Held for Sale | 0 | 60,582 | 95,739 |
Current Liabilities: | |||
Accounts Payable | 0 | 24,312 | 18,190 |
Accrued Salaries, Wages and Benefits | 0 | 13,979 | 11,610 |
Accrued Liabilities | 0 | 1,514 | 2,548 |
Deferred Revenue | 0 | 16,634 | 40,276 |
Total Current Liabilities Held for Sale | 0 | 56,439 | 72,624 |
Noncurrent Liabilities: | |||
Deferred Income Taxes | 0 | 216 | 1,021 |
Total Noncurrent Liabilities Held for Sale | 0 | 216 | 1,021 |
Total Liabilities Held for Sale | $ 0 | $ 56,655 | $ 73,645 |
DISCONTINUED OPERATIONS (Summ_2
DISCONTINUED OPERATIONS (Summary of Income Statement Information of Operations) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE | $ 0 | $ 122,705 | $ 195,716 | $ 370,263 |
OPERATING COST AND EXPENSE: | ||||
Cost of Educational Services | 0 | 65,182 | 109,416 | 209,871 |
Student Services and Administrative Expense | (65) | 53,057 | 99,227 | 162,130 |
Restructuring (Gain) Expense | (1,973) | 6,150 | (2,470) | 16,342 |
Asset Impairment Charge - Intangible and Goodwill | 0 | 0 | 0 | 23,841 |
Asset Impairment Charge - Building and Equipment | 0 | 5,738 | 1,953 | 29,129 |
Loss on Sale of Assets | 0 | 0 | 0 | 230 |
Total Operating Cost and Expense | (2,038) | 130,127 | 208,126 | 441,543 |
Income (Loss) from Discontinued Operations Before Income Taxes | 2,038 | (7,422) | (12,410) | (71,280) |
Loss on Disposal of Discontinued Operations Before Income Taxes | (265) | 0 | (32,979) | 0 |
Income Tax (Provision) Benefit | (120) | 3,851 | 7,212 | 25,741 |
Income (Loss) from Discontinued Operations | $ 1,653 | $ (3,571) | $ (38,177) | $ (45,539) |
DISCONTINUED OPERATIONS - Addit
DISCONTINUED OPERATIONS - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 11, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | $ 265 | $ 0 | $ 32,979 | $ 0 | ||
Payments to Acquire Loans Held-for-investment | $ 10,000 | $ 10,000 | $ 0 | |||
Contract Receivable, Due after One Year, Weighted Average Interest Rate | 4.00% | |||||
Loans Held-for-sale, Maturity Date | Jan. 1, 2022 | |||||
Earn Out Term | 10 years | |||||
Earn Out Maximum | $ 20,000 | |||||
Carrington Operations [Member] | ||||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | $ 11,100 | |||||
Increase (Decrease) in Restricted Cash and Investments | 9,900 | |||||
DeVry University Operations [Member] | ||||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 21,700 | |||||
Increase (Decrease) in Restricted Cash and Investments | $ 39,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Disaggregate revenue) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 308,609 | $ 310,070 | $ 909,393 | $ 911,424 |
Higher Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 263,981 | 273,870 | 779,875 | 795,727 |
Test Preparation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 22,074 | 24,347 | 67,625 | 70,432 |
Certifications [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,029 | 5,432 | 23,527 | 21,259 |
Conferences/Seminars [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,860 | 2,371 | 17,405 | 13,334 |
Memberships/Subscriptions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,299 | 3,580 | 12,135 | 9,852 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,366 | 470 | 8,826 | 820 |
Medical And Healthcare [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 223,575 | 220,067 | 638,302 | 614,649 |
Medical And Healthcare [Member] | Higher Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 217,423 | 220,067 | 630,083 | 614,649 |
Medical And Healthcare [Member] | Test Preparation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Medical And Healthcare [Member] | Certifications [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Medical And Healthcare [Member] | Conferences/Seminars [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Medical And Healthcare [Member] | Memberships/Subscriptions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Medical And Healthcare [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,152 | 0 | 8,219 | 0 |
Professional Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 35,935 | 31,505 | 113,723 | 101,906 |
Professional Education [Member] | Higher Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Professional Education [Member] | Test Preparation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 19,533 | 19,652 | 60,049 | 56,641 |
Professional Education [Member] | Certifications [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,029 | 5,432 | 23,527 | 21,259 |
Professional Education [Member] | Conferences/Seminars [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,860 | 2,371 | 17,405 | 13,334 |
Professional Education [Member] | Memberships/Subscriptions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,299 | 3,580 | 12,135 | 9,852 |
Professional Education [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 214 | 470 | 607 | 820 |
Technology And Business [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 49,907 | 59,030 | 159,791 | 196,602 |
Technology And Business [Member] | Higher Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 46,558 | 53,803 | 149,792 | 181,078 |
Technology And Business [Member] | Test Preparation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,349 | 5,227 | 9,999 | 15,524 |
Technology And Business [Member] | Certifications [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Technology And Business [Member] | Conferences/Seminars [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Technology And Business [Member] | Memberships/Subscriptions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Technology And Business [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Home Office And Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (808) | (532) | (2,423) | (1,733) |
Home Office And Other [Member] | Higher Education [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Home Office And Other [Member] | Test Preparation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (808) | (532) | (2,423) | (1,733) |
Home Office And Other [Member] | Certifications [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Home Office And Other [Member] | Conferences/Seminars [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Home Office And Other [Member] | Memberships/Subscriptions [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Home Office And Other [Member] | Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reconciliation of Non-Controlling Interest Balance) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||||
Balance at Beginning of Period | $ 8,651 | $ 7,405 | $ 9,110 | $ 6,285 |
Net (Loss) Income Attributable to Noncontrolling Interest | (39) | (46) | 117 | 459 |
(Decrease) Increase in Redemption Value of Noncontrolling Interest Put Options | (130) | (42) | (745) | 573 |
Acquisition of Noncontrolling Interest in EduPristine | 0 | 4,074 | 0 | 4,074 |
Balance at End of Period | $ 8,482 | $ 11,391 | $ 8,482 | $ 11,391 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Reconciliation of Basic Shares to Diluted Shares) (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted Average Shares Outstanding | 57,583 | 60,352 | 58,656 | 60,970 |
Unvested Participating RSUs | 478 | 678 | 543 | 718 |
Basic Shares | 58,061 | 61,030 | 59,199 | 61,688 |
Effect of Dilutive Stock Options | 741 | 935 | 805 | 786 |
Diluted Shares | 58,802 | 61,965 | 60,004 | 62,474 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Net balance of capitalized software development costs | $ 11,200 | $ 13,500 | $ 3,400 | $ 11,200 | $ 3,400 |
Anti-dilutive shares excluded from computations of earnings per share | 194,000 | 294,000 | 223,000 | 1,273,000 | |
Cumulative translation losses | $ 148,800 | 142,600 | $ 59,500 | $ 148,800 | $ 59,500 |
Advertising expense | 21,700 | 22,100 | 61,900 | 59,500 | |
Impairment of Long-Lived Assets Held-for-use | 2,000 | ||||
Cost of Goods and Services Sold, Total | 156,339 | 159,312 | 463,224 | 489,931 | |
Loss from Catastrophes | 11,100 | 12,500 | 55,100 | ||
Deferred Revenue, Revenue Recognized | 100,500 | ||||
Allowance for Doubtful Accounts Receivable, Current | 20,000 | 27,600 | 28,400 | 20,000 | 28,400 |
Asset Impairment Charges | 39,100 | ||||
Cumulative Effect on Retained Earnings, Net of Tax | 0 | (236) | |||
Proceeds from Insurance Settlement, Operating Activities | 20,800 | ||||
Gain on Business Interruption Insurance Recovery | 0 | 0 | 15,571 | 0 | |
Accounting Standards Update 2016-01 [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative Effect on Retained Earnings, Net of Tax | 400 | ||||
Noncontrolling Interest | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative translation losses | $ 3,400 | 3,000 | 1,300 | 3,400 | 1,300 |
Hurricane Expense [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Impairment of Long-Lived Assets Held-for-use | 29,900 | ||||
Cost of Goods and Services Sold, Total | 13,400 | ||||
Asset Impairment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Unusual or Infrequent Item, or Both, Insurance Proceeds | $ 12,500 | 20,800 | |||
Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | |||
Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||
Adtalem Brazil | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Ownership interest of parent in subsidiary | 97.90% | 97.90% | |||
Adtalem Global Education Inc. | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cumulative translation losses | $ 145,400 | 139,600 | 58,200 | $ 145,400 | 58,200 |
Tax effect on unrealized gains on available-for-sale securities | 400 | 300 | 300 | ||
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | $ 100 | $ 200 | $ 200 | ||
Edupristine | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Ownership interest of parent in subsidiary | 69.00% | 69.00% | |||
Kaizen | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Ownership interest of parent in subsidiary | 31.00% | 31.00% | |||
Adtalem Brazil Senior Management Group | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Ownership interest of parent in subsidiary | 2.10% | 2.10% |
STOCK-BASED COMPENSATION (Summa
STOCK-BASED COMPENSATION (Summary of Options Activity) (Detail) - Stock Option $ / shares in Units, $ in Thousands | 9 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Number of Options, Outstanding at beginning of period | shares | 1,806,133 |
Number of Options, Granted | shares | 129,025 |
Number of Options, Exercised | shares | (405,810) |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | (19,429) |
Number of Options, Outstanding at end of period | shares | 1,509,919 |
Number of Options, Exercisable at end of period | shares | 592,407 |
Weighted Average Exercise Price at beginning of period | $ / shares | $ 32.88 |
Weighted Average Exercise Price, Options Granted | $ / shares | 49.01 |
Weighted Average Exercise Price, Options Exercised | $ / shares | 42.75 |
Weighted Average Exercise Price, Options Forfeited | $ / shares | 0 |
Weighted Average Exercise Price, Options Expired | $ / shares | 51.65 |
Weighted Average Exercise Price, Outstanding at end of period | $ / shares | 31.37 |
Weighted Average Exercise Price, Exercisable at end of period | $ / shares | $ 31.60 |
Weighted Average Remaining Contractual Life, Outstanding at end of period | 6 years 10 months 20 days |
Weighted Average Remaining Contractual Life, Exercisable at end of period | 5 years 1 month 2 days |
Aggregate Intrinsic Value, Outstanding at End of period | $ | $ 23,301 |
Aggregate Intrinsic Value, Exercisable at end of period | $ | $ 9,103 |
STOCK-BASED COMPENSATION (Fair
STOCK-BASED COMPENSATION (Fair Values of Stock Option Awards Weighted Average Assumptions) (Detail) | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Life (in Years) | 6 years 6 months | 6 years 8 months 4 days |
Expected Volatility | 39.60% | 41.45% |
Risk-free Interest Rate | 2.73% | 1.95% |
Dividend Yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION (Sum_2
STOCK-BASED COMPENSATION (Summary of Restricted Stock Units Activity) (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Units Outstanding at beginning of period | 1,226,958 | |
Restricted Stock Units Outstanding, Shares Granted | 217,960 | |
Restricted Stock Units Outstanding, Shares Vested | (450,484) | |
Restricted Stock Units Outstanding, Shares Forfeited | (79,958) | |
Restricted Stock Units Outstanding at end of period | 914,476 | |
Weighted Average Grant Date Fair Value, beginning balance | $ 28.31 | |
Weighted Average Grant Date Fair Value, Shares Granted | 49.57 | $ 34.34 |
Weighted Average Grant Date Fair Value, Shares Vested | 27.86 | |
Weighted Average Grant Date Fair Value, Shares Forfeited | 33.26 | |
Weighted Average Grant Date Fair Value, ending balance | $ 33.45 |
STOCK-BASED COMPENSATION (Total
STOCK-BASED COMPENSATION (Total Stock-Based Compensation Expense Included in Consolidated Statement of Income) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-Based Compensation Expense | $ 3,008 | $ 2,737 | $ 10,369 | $ 11,517 |
Income Tax Benefit | (692) | (554) | (3,930) | (4,655) |
Net Stock-Based Compensation Expense | 2,316 | 2,183 | 6,439 | 6,862 |
Cost of Educational Services | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-Based Compensation Expense | 279 | 876 | 976 | 3,510 |
Student Services And Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-Based Compensation Expense | 2,729 | 1,861 | 9,393 | 7,459 |
Restructuring Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-Based Compensation Expense | $ 0 | $ 0 | $ 0 | $ 548 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of options exercised | $ 4.2 | $ 10.7 |
Total pre-tax unrecognized compensation costs related to non-vested awards | $ 21.5 | |
Total pre-tax unrecognized compensation costs related to non-vested awards expected to be recognized, years | 2 years 3 months 18 days | |
Total fair value of options and Restricted Stock Units vested | $ 13.7 | $ 14.3 |
Stock Incentive Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average estimated grant date fair values, for options granted at market price, per share | $ 20.96 | $ 14.63 |
Common Stock, Capital Shares Reserved for Future Issuance | 7,131,350 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 49.57 | $ 34.34 |
Restricted Stock Units Outstanding, Shares Granted | 217,960 | |
Performance Based Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Units Outstanding, Shares Granted | 65,160 | |
Non-Performance Based Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted Stock Units Outstanding, Shares Granted | 152,800 |
FAIR VALUE MEASUREMENTS (Assets
FAIR VALUE MEASUREMENTS (Assets Measured at Fair Value on Recurring Basis) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable Securities and Investments | $ 8,341 | $ 4,255 | $ 4,200 |
Institutional Loans Receivable, Net | 42,577 | 44,320 | 41,646 |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | 321,211 | 430,690 | 265,325 |
Marketable Securities and Investments | 8,341 | 4,255 | 4,200 |
Institutional Loans Receivable, Net | 0 | 0 | 0 |
Loan Receivable from DeVry University | 0 | ||
Deferred Acquisition Obligations | 0 | 0 | 0 |
FIES Receivable | 0 | ||
Total Financial Assets at Fair Value | 329,552 | 434,945 | 269,525 |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Marketable Securities and Investments | 0 | 0 | 0 |
Institutional Loans Receivable, Net | 42,577 | 44,320 | 41,646 |
Loan Receivable from DeVry University | 10,000 | ||
Deferred Acquisition Obligations | 16,001 | 18,585 | 21,393 |
FIES Receivable | 15,094 | ||
Total Financial Assets at Fair Value | 68,578 | 62,905 | 78,133 |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and Cash Equivalents | 0 | 0 | 0 |
Marketable Securities and Investments | 0 | 0 | 0 |
Institutional Loans Receivable, Net | 0 | 0 | 0 |
Loan Receivable from DeVry University | 0 | ||
Deferred Acquisition Obligations | 0 | 0 | 0 |
FIES Receivable | 0 | ||
Total Financial Assets at Fair Value | $ 0 | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
DeVry University Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||
Debt Instrument, Maturity Date | Jan. 1, 2022 | ||
Accrued Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred Acquisition Obligations | $ 6.1 | $ 4.3 | $ 4.8 |
Other Liabilities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred Acquisition Obligations | 9.9 | $ 14.3 | $ 16.6 |
Notes Receivable [Member] | DeVry University Operations [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Loans Receivable, Fair Value Disclosure | $ 10 |
FINANCING RECEIVABLES (Institut
FINANCING RECEIVABLES (Institutional Loan Balances and Related Allowances for Credit Losses) (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Financing Receivables [Line Items] | |||
Gross Institutional Loans | $ 47,259 | $ 51,389 | $ 54,323 |
Allowance for Credit Losses: | |||
Balance at July 1 | (10,003) | (9,736) | (9,736) |
Charge-offs and Adjustments | 9,965 | 206 | 330 |
Recoveries | (73) | (51) | (61) |
Additional Provision | (4,571) | (162) | (536) |
Balance at End of Period | (4,682) | (9,743) | (10,003) |
Net Institutional Loans | $ 42,577 | $ 41,646 | $ 44,320 |
FINANCING RECEIVABLES (Credit R
FINANCING RECEIVABLES (Credit Risk Profiles of Institutional Loan Balance) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Institutional Loans: | |||
Total Institutional Loans | $ 47,259 | $ 54,323 | $ 51,389 |
Credit Risk Profiles Of Institutional Loans | |||
Institutional Loans: | |||
Total Institutional Loans | 47,259 | 54,323 | 51,389 |
Performing | Credit Risk Profiles Of Institutional Loans | |||
Institutional Loans: | |||
Total Institutional Loans | 42,716 | 44,492 | 42,048 |
Nonperforming | Credit Risk Profiles Of Institutional Loans | |||
Institutional Loans: | |||
Total Institutional Loans | $ 4,543 | $ 9,831 | $ 9,341 |
FINANCING RECEIVABLES (Instit_2
FINANCING RECEIVABLES (Institutional Loans Past Due) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Institutional Loans, Past Due | $ 17,172 | $ 22,303 | $ 18,883 |
Institutional Loans, Current | 30,087 | 32,020 | 32,506 |
Total Institutional Loans | 47,259 | 54,323 | 51,389 |
Financing Receivables, 1 to 29 Days Past Due [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Institutional Loans, Past Due | 4,092 | 8,473 | 8,903 |
Financing Receivables, 30 to 59 Days Past Due [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Institutional Loans, Past Due | 4,412 | 900 | 464 |
Financing Receivables, 60 to 89 Days Past Due [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Institutional Loans, Past Due | 4,125 | 3,099 | 175 |
Financing Receivables Greater Than 90 Days Past Due [Member] | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Institutional Loans, Past Due | $ 4,543 | $ 9,831 | $ 9,341 |
FINANCING RECEIVABLES - Additio
FINANCING RECEIVABLES - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Maximum [Member] | |||
Financing Receivables [Line Items] | |||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 12.00% | ||
Minimum [Member] | |||
Financing Receivables [Line Items] | |||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 3.00% | ||
Accounts Receivable | |||
Financing Receivables [Line Items] | |||
Net Institutional Student Loans, classified as Accounts Receivable | $ 15.7 | $ 21.2 | $ 19.8 |
Other Assets | |||
Financing Receivables [Line Items] | |||
Net Institutional Student Loans, classified as Accounts Receivable | $ 26.9 | $ 23.1 | $ 21.8 |
SHARE REPURCHASE PROGRAMS (Shar
SHARE REPURCHASE PROGRAMS (Shares Repurchased under Programs) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Share Repurchases [Line Items] | ||||
Shares Repurchased | 3,631,611 | |||
Total Cost | $ 60,970 | $ 18,448 | $ 176,903 | $ 111,626 |
Stock Repurchase Programs Total | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 22,493,515 | |||
Total Cost | $ 876,200 | |||
Authorized on November 15, 2006 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 908,399 | |||
Total Cost | $ 35,000 | |||
Authorized on May 13, 2008 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 1,027,417 | |||
Total Cost | $ 50,000 | |||
Authorized on November 11, 2009 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 972,205 | |||
Total Cost | $ 50,000 | |||
Authorized on August 11, 2010 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 1,103,628 | |||
Total Cost | $ 50,000 | |||
Authorized on November 10, 2010 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 968,105 | |||
Total Cost | $ 50,000 | |||
Authorized on May 20, 2011 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 2,396,143 | |||
Total Cost | $ 100,000 | |||
Authorized on November 2, 2011 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 3,478,299 | |||
Total Cost | $ 100,000 | |||
Authorized On August 29, 2012 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 2,005,317 | |||
Total Cost | $ 62,700 | |||
Authorized On December 15, 2015 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 1,672,250 | |||
Total Cost | $ 36,600 | |||
Authorized On February 16, 2017 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 7,091,188 | |||
Total Cost | $ 300,000 | |||
Authorized On November 7, 2018 | ||||
Share Repurchases [Line Items] | ||||
Shares Repurchased | 870,564 | |||
Total Cost | $ 41,900 |
SHARE REPURCHASE PROGRAMS - Add
SHARE REPURCHASE PROGRAMS - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Nov. 07, 2018 | Feb. 16, 2017 | |
Share Repurchases [Line Items] | ||||
Repurchase of Common Stock for Treasury | $ 176,903 | $ 111,626 | ||
Treasury Stock Shares Acquired | 3,631,611 | |||
Maximum | Tenth share repurchase plan [Member] | ||||
Share Repurchases [Line Items] | ||||
Authorized amount for repurchase | $ 300,000 | |||
Maximum | Eleventh Share Repurchase Plan [Member] | ||||
Share Repurchases [Line Items] | ||||
Authorized amount for repurchase | $ 300,000 |
BUSINESS COMBINATIONS (Estimate
BUSINESS COMBINATIONS (Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Feb. 05, 2018 | Nov. 01, 2017 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 811,260 | $ 813,887 | $ 845,843 | ||
Sao Judas Tadeu [Member] | |||||
Business Acquisition [Line Items] | |||||
Current Assets | $ 558 | ||||
Property and Equipment | 64 | ||||
Other Long-term Assets | 9 | ||||
Intangible Assets | 381 | ||||
Goodwill | 5,636 | ||||
Total Assets Acquired | 6,648 | ||||
Liabilities Assumed | 684 | ||||
Net Assets Acquired | $ 5,964 | ||||
Edupristine [Member] | |||||
Business Acquisition [Line Items] | |||||
Current Assets | $ 866 | ||||
Property and Equipment | 239 | ||||
Other Long-term Assets | 69 | ||||
Intangible Assets | 1,380 | ||||
Goodwill | 11,527 | ||||
Total Assets Acquired | 14,081 | ||||
Liabilities Assumed | 2,715 | ||||
Net Assets Acquired | $ 11,366 |
BUSINESS COMBINATIONS (Acquired
BUSINESS COMBINATIONS (Acquired Intangible Assets Subject to Amortization and Values and Estimated Useful Lives) (Detail) - Sao Judas Tadeu [Member] - Student Relationships [Member] $ in Thousands | Nov. 01, 2017USD ($) |
Business Acquisition [Line Items] | |
Amortizable intangible assets | $ 162 |
Amortizable intangible assets, estimated useful lives | 6 months |
BUSINESS COMBINATIONS - Additio
BUSINESS COMBINATIONS - Additional Information (Detail) $ in Millions | Feb. 05, 2018USD ($) | Nov. 01, 2017USD ($)Number | Mar. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | $ 0.4 | ||
Sao Judas Tadeu [Member] | |||
Business Acquisition [Line Items] | |||
Number Of Students In Degree Programs | Number | 2,700 | ||
Payments to Acquire Businesses, Gross | $ 1 | ||
Business Combination, Consideration Transferred | $ 6 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||
Business Combination, Contingent Consideration | $ 5 | ||
Sao Judas Tadeu [Member] | Trade Name [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | $ 0.2 | ||
Edupristine [Member] | |||
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ 3.2 | $ 1.3 | |
Business Acquisition, Percentage of Voting Interests Acquired | 64.00% | 69.00% | |
Equity Method Investment, Ownership Percentage | 36.00% | ||
Equity Method Investments, Fair Value Disclosure | $ 4.1 | ||
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value | 4.1 | ||
Gain (Loss) on Disposition of Stock in Subsidiary or Equity Method Investee | 1.2 | ||
Edupristine [Member] | Trade Name [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | $ 1.4 |
INTANGIBLE ASSETS (Schedule of
INTANGIBLE ASSETS (Schedule of Intangible Assets) (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 68,405 | $ 69,502 | $ 73,009 |
Amortizable Intangible Assets, Accumulated Amortization | (29,754) | (24,521) | (24,096) |
Indefinite-lived Intangible Assets, Gross Carrying Amount | 316,496 | 317,950 | 336,229 |
Student Relationships [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | 7,952 | 8,193 | 9,601 |
Amortizable Intangible Assets, Accumulated Amortization | $ (7,401) | (6,972) | (7,831) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 5 years | ||
Customer Relationships [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 42,900 | 42,900 | 42,900 |
Amortizable Intangible Assets, Accumulated Amortization | $ (13,071) | (9,598) | (8,430) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 10 years | ||
Non-compete Agreements [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | 700 | 700 | |
Amortizable Intangible Assets, Accumulated Amortization | (700) | (691) | |
Curriculum/Software [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 6,810 | 6,833 | 7,148 |
Amortizable Intangible Assets, Accumulated Amortization | $ (5,775) | (4,265) | (3,901) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 4 years | ||
Franchise Contracts [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 8,947 | 9,064 | 10,621 |
Amortizable Intangible Assets, Accumulated Amortization | $ (2,071) | (1,720) | (1,868) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 18 years | ||
Proprietary Technology [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 500 | 500 | 500 |
Amortizable Intangible Assets, Accumulated Amortization | $ (344) | (250) | (219) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 4 years | ||
Clinical Agreements [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 331 | 336 | 393 |
Amortizable Intangible Assets, Accumulated Amortization | $ (127) | (112) | (125) |
Amortizable Intangible Assets, Weighted Average Amortization Period | 15 years | ||
Trade Names [Member] | |||
Intangible Assets [Line Items] | |||
Amortizable Intangible Assets, Gross Carrying Amount | $ 965 | 976 | 1,146 |
Amortizable Intangible Assets, Accumulated Amortization | (965) | (904) | (1,031) |
Indefinite-lived Intangible Assets, Gross Carrying Amount | $ 105,745 | 106,132 | 109,755 |
Amortizable Intangible Assets, Weighted Average Amortization Period | 10 years | ||
Ross Title IV Eligibility and Accreditations [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived Intangible Assets, Gross Carrying Amount | $ 14,100 | 14,100 | 14,100 |
Intellectual Property [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived Intangible Assets, Gross Carrying Amount | 13,940 | 13,940 | 13,940 |
Chamberlain Title IV Eligibility and Accreditations [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived Intangible Assets, Gross Carrying Amount | 1,200 | 1,200 | 1,200 |
AUC Title IV Eligibility and Accreditations [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived Intangible Assets, Gross Carrying Amount | 100,000 | 100,000 | 100,000 |
Adtalem Brazil Accreditation [Member] | |||
Intangible Assets [Line Items] | |||
Indefinite-lived Intangible Assets, Gross Carrying Amount | $ 81,511 | $ 82,578 | $ 97,234 |
INTANGIBLE ASSETS (Estimated Am
INTANGIBLE ASSETS (Estimated Amortization Expense for Amortized Intangible Assets) (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Intangible Assets [Line Items] | |
2019 | $ 1,954 |
2020 | 5,894 |
2021 | 5,206 |
2022 | 4,819 |
2023 | 4,637 |
Thereafter | 16,141 |
Adtalem Brazil [Member] | |
Intangible Assets [Line Items] | |
2019 | 349 |
2020 | 1,223 |
2021 | 766 |
2022 | 519 |
2023 | 519 |
Thereafter | 4,873 |
Professional Education [Member] | |
Intangible Assets [Line Items] | |
2019 | 1,605 |
2020 | 4,671 |
2021 | 4,440 |
2022 | 4,300 |
2023 | 4,118 |
Thereafter | $ 11,268 |
INTANGIBLE ASSETS (Summary of G
INTANGIBLE ASSETS (Summary of Goodwill Balances by Reporting Unit) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Goodwill [Line Items] | |||
Goodwill | $ 811,260 | $ 813,887 | $ 845,843 |
Chamberlain [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 4,716 | 4,716 | 4,716 |
AUC [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 68,321 | 68,321 | 68,321 |
RUSM and RUSVM [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 237,173 | 237,173 | 237,173 |
Professional Education [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 317,475 | 317,699 | 319,528 |
Adtalem Brazil [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 183,575 | $ 185,978 | $ 216,105 |
INTANGIBLE ASSETS (Summary of_2
INTANGIBLE ASSETS (Summary of Goodwill Balances by Reporting Segment) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Goodwill [Line Items] | |||
Goodwill | $ 811,260 | $ 813,887 | $ 845,843 |
Medical And Healthcare [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 310,210 | 310,210 | 310,210 |
Professional Education [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 317,475 | 317,699 | 319,528 |
Technology and Business [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 183,575 | $ 185,978 | $ 216,105 |
INTANGIBLE ASSETS (Changes in C
INTANGIBLE ASSETS (Changes in Carrying Amount of Goodwill, by Segment) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill [Line Items] | |||
Goodwill beginning balance | $ 845,843 | $ 813,887 | $ 829,086 |
Acquisitions | 16,355 | ||
Purchase accounting adjustments | 808 | ||
Foreign exchange rate changes | (32,764) | (2,627) | 402 |
Goodwill ending balance | 813,887 | 811,260 | 845,843 |
Medical And Healthcare [Member] | |||
Goodwill [Line Items] | |||
Goodwill beginning balance | 310,210 | 310,210 | 310,210 |
Acquisitions | 0 | ||
Purchase accounting adjustments | 0 | ||
Foreign exchange rate changes | 0 | 0 | 0 |
Goodwill ending balance | 310,210 | 310,210 | 310,210 |
Professional Education [Member] | |||
Goodwill [Line Items] | |||
Goodwill beginning balance | 319,528 | 317,699 | 306,653 |
Acquisitions | 12,548 | ||
Purchase accounting adjustments | (1,021) | ||
Foreign exchange rate changes | (808) | (224) | 327 |
Goodwill ending balance | 317,699 | 317,475 | 319,528 |
Technology And Business [Member] | |||
Goodwill [Line Items] | |||
Goodwill beginning balance | 216,105 | 185,978 | 212,223 |
Acquisitions | 3,807 | ||
Purchase accounting adjustments | 1,829 | ||
Foreign exchange rate changes | (31,956) | (2,403) | 75 |
Goodwill ending balance | $ 185,978 | $ 183,575 | $ 216,105 |
INTANGIBLE ASSETS (Summary of I
INTANGIBLE ASSETS (Summary of Indefinite-Lived Intangible Assets Balances by Reporting Segment) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets balances | $ 316,496 | $ 317,950 | $ 336,229 |
Medical and Healthcare | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets balances | 137,500 | 137,500 | 137,500 |
Professional Education [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets balances | 69,111 | 69,126 | 67,812 |
Technology And Business | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets balances | $ 109,885 | $ 111,324 | $ 130,917 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Intangible Assets [Line Items] | |||||
Amortization of Intangible Assets | $ 1,994 | $ 2,374 | $ 6,231 | $ 7,333 | |
Indefinite-lived Intangible Assets, Period Increase (Decrease) | (1,500) | ||||
Goodwill | 811,260 | 845,843 | 811,260 | 845,843 | $ 813,887 |
Intangible Assets, Net (Excluding Goodwill) | $ 355,147 | $ 385,142 | $ 355,147 | $ 385,142 | $ 362,931 |
Percentage Of Intangible Assets Including Goodwill | 54.00% | 54.00% |
RESTRUCTURING CHARGES (Pre-tax
RESTRUCTURING CHARGES (Pre-tax Restructuring Charges) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 3,902 | $ 621 | $ 47,095 | $ 3,184 |
Medical and Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | (133) | 530 | 41,327 | 642 |
Technology and Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 1,716 | 1,901 | ||
Home Office and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 2,319 | 91 | 3,867 | 2,542 |
Termination Benefits | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 25 | 575 | 1,413 | 3,577 |
Termination Benefits | Medical and Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | (23) | 530 | 1,294 | 616 |
Termination Benefits | Technology and Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0 | 0 | ||
Termination Benefits | Home Office and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 48 | 45 | 119 | 2,961 |
Real Estate and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 3,877 | 46 | 45,682 | (393) |
Real Estate and Other | Medical and Healthcare | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | (110) | 0 | 40,033 | 26 |
Real Estate and Other | Technology and Business | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 1,716 | 1,901 | ||
Real Estate and Other | Home Office and Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 2,271 | $ 46 | $ 3,748 | $ (419) |
RESTRUCTURING CHARGES (Separati
RESTRUCTURING CHARGES (Separation and Restructuring Plan Activity) (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Liability beginning balance | $ 38,927 | $ 46,115 |
Increase in liability (separation and other charges) | 4,761 | 19,893 |
Reduction in liability (payments and adjustments) | (20,568) | (27,081) |
Liability ending balance | $ 23,120 | $ 38,927 |
RESTRUCTURING CHARGES - Additio
RESTRUCTURING CHARGES - Additional Information (Detail) Unit_pure in Thousands, $ in Millions | 9 Months Ended | |
Mar. 31, 2019USD ($) | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Number of Positions Eliminated | 203 | 111 |
Adtalem Global Education Inc. | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Reserve, Noncurrent | $ 14.1 | |
Restructuring Reserve, Current | $ 9 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Contingency [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Percent | 17.20% | 15.70% | 18.30% | 87.80% |
Effective Income Tax Rate Continuing Operations Excluding Special Items | 16.80% | 15.40% | ||
Tax Expenses Special Items | $ 101.2 |
DEBT (Long-term debt) (Detail)
DEBT (Long-term debt) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Total Debt: | |||
Long-term Debt, Gross | $ 297,750 | $ 300,000 | $ 120,000 |
Deferred Debt Issuance Costs | (6,161) | (6,927) | 0 |
Total Amount Outstanding | 291,589 | 293,073 | 120,000 |
Less Current Portion: | |||
Term B Loan | (3,000) | (3,000) | 0 |
Noncurrent Portion | 288,589 | 290,073 | 120,000 |
Revolver [Member] | |||
Total Debt: | |||
Long-term Debt, Gross | 0 | 0 | 120,000 |
Term B Loan [Member] | |||
Total Debt: | |||
Long-term Debt, Gross | $ 297,750 | $ 300,000 | $ 0 |
DEBT (Scheduled maturities of l
DEBT (Scheduled maturities of long-term debt) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
2019 | $ 750 | ||
2020 | 3,000 | ||
2021 | 3,000 | ||
2022 | 3,000 | ||
2023 | 3,000 | ||
Thereafter | 285,000 | ||
Long-term Debt | $ 297,750 | $ 300,000 | $ 120,000 |
DEBT (Debt Issuance Costs) (Det
DEBT (Debt Issuance Costs) (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Deferred Debt Issuance Costs at June 30, 2018 | $ 6,927 | $ 0 |
Deferred Debt Issuance Costs at March 31, 2019 | 6,161 | 6,927 |
Term B Loan [Member] | ||
Deferred Debt Issuance Costs at June 30, 2018 | 6,927 | |
Amortization of Deferred Debt Issuance Costs | (766) | |
Deferred Debt Issuance Costs at March 31, 2019 | 6,161 | 6,927 |
Revolver [Member] | ||
Deferred Debt Issuance Costs at June 30, 2018 | 2,606 | |
Amortization of Deferred Debt Issuance Costs | (409) | |
Deferred Debt Issuance Costs at March 31, 2019 | 2,197 | 2,606 |
Total [Member] | ||
Deferred Debt Issuance Costs at June 30, 2018 | 9,533 | |
Amortization of Deferred Debt Issuance Costs | (1,175) | |
Deferred Debt Issuance Costs at March 31, 2019 | $ 8,358 | $ 9,533 |
DEBT - Additional Information (
DEBT - Additional Information (Detail) - USD ($) | Apr. 13, 2018 | Mar. 31, 2015 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Line of Credit Facility [Line Items] | |||||
Letters of Credit Outstanding, Amount | $ 68,400,000 | $ 68,400,000 | $ 68,400,000 | ||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.40% | ||||
Letter of Credit Annual Fee Percentage | 2.25% | ||||
Line of Credit Facility, Initiation Date | Apr. 13, 2018 | Mar. 31, 2015 | |||
Debt, Weighted Average Interest Rate | 3.70% | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 231,600,000 | ||||
Debt Instrument, Description of Variable Rate Basis | base rate plus 2% | ||||
Long-term Debt | $ 291,589,000 | $ 293,073,000 | $ 120,000,000 | ||
Line of Credit Facility, Increase (Decrease), Net | $ 250,000,000 | ||||
Debt Issuance Costs, Gross | $ 9,900,000 | ||||
Letter Of Credit Annual Fee Percentage Reimbursement | 2.00% | ||||
Term B Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt, Weighted Average Interest Rate | 5.50% | ||||
Debt Instrument, Maturity Date | Apr. 13, 2025 | ||||
Debt Instrument, Face Amount | $ 300,000,000 | ||||
Debt Instrument, Periodic Payment, Principal | 750,000 | ||||
Debt Issuance Costs, Gross | 7,100,000 | ||||
Eurocurrency Rate [Member] | Term B Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR-equivalent rate plus 3% | ||||
Base Rate [Member] | Term B Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | ||||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300,000,000 | ||||
Line of Credit Facility, Expiration Date | Apr. 13, 2023 | Mar. 31, 2020 | |||
Foreign Currency Borrowing Capacity | $ 200,000,000 | $ 400,000,000 | |||
Long-term Debt | $ 120,000,000 | ||||
Debt Issuance Costs, Gross | 2,700,000 | ||||
Revolving Credit Facility [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Interest Rate During Period | 1.75% | ||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Interest Rate During Period | 2.75% | ||||
Revolving Credit Facility [Member] | Prime Rate [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Interest Rate During Period | 0.75% | ||||
Revolving Credit Facility [Member] | Prime Rate [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Interest Rate During Period | 1.75% | ||||
Letter of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | $ 100,000,000 |
SEGMENT INFORMATION (Tabulation
SEGMENT INFORMATION (Tabulation of Business Segment Information Based on Current Segmentation) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | ||||
Segment Reporting Information [Line Items] | ||||||||
Total Consolidated Revenue | $ 308,609 | $ 310,070 | $ 909,393 | $ 911,424 | ||||
Total Consolidated Operating Income from Continuing Operations | 46,306 | 52,504 | 114,097 | 142,309 | ||||
Discontinued Operations | 0 | 95,739 | 0 | 95,739 | $ 60,582 | |||
Total Consolidated Assets | 2,148,703 | 2,288,326 | 2,148,703 | 2,288,326 | $ 2,344,961 | |||
Increase in Capital Assets from Acquisitions | 0 | 287 | 0 | 303 | ||||
Increase in Intangible Assets and Goodwill | 0 | 12,663 | 0 | 16,735 | ||||
Total Consolidated Additions to Long-Lived Assets | 15,498 | 31,910 | 50,853 | 67,471 | ||||
Total Consolidated Depreciation Expense | 11,161 | [1] | 11,861 | [1] | 31,758 | 33,554 | ||
Total Consolidated Amortization Expense | 1,994 | 2,374 | 6,231 | 7,333 | ||||
Discontinued Operations, Held-for-sale [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Discontinued Operations | 0 | 95,739 | 0 | 95,739 | ||||
Reconciliation to Consolidated Financial Statements [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Capital Expenditures | 15,498 | 18,960 | 50,853 | 50,433 | ||||
Total Consolidated Additions to Long-Lived Assets | 15,498 | 31,910 | 50,853 | 67,471 | ||||
Medical and Healthcare [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Consolidated Revenue | 223,575 | 220,067 | 638,302 | 614,649 | ||||
Total Consolidated Operating Income from Continuing Operations | 53,093 | 60,304 | 115,396 | 141,583 | ||||
Total Consolidated Assets | 827,452 | 935,360 | 827,452 | 935,360 | ||||
Total Consolidated Additions to Long-Lived Assets | 10,978 | 10,740 | 37,696 | 25,076 | ||||
Total Consolidated Depreciation Expense | [1] | 7,680 | 8,360 | 20,449 | 23,171 | |||
Professional Education [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Consolidated Revenue | 35,935 | 31,505 | 113,723 | 101,906 | ||||
Total Consolidated Operating Income from Continuing Operations | 5,086 | 2,382 | 19,469 | 15,082 | ||||
Total Consolidated Assets | 446,752 | 455,358 | 446,752 | 455,358 | ||||
Total Consolidated Additions to Long-Lived Assets | 84 | 12,918 | 1,487 | 14,139 | ||||
Total Consolidated Depreciation Expense | [1] | 480 | 533 | 1,212 | 1,515 | |||
Total Consolidated Amortization Expense | 1,605 | 1,626 | 4,816 | 4,876 | ||||
Technology and Business [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Consolidated Revenue | 49,907 | 59,030 | 159,791 | 196,602 | ||||
Total Consolidated Operating Income from Continuing Operations | (2,561) | (103) | 3,165 | 15,749 | ||||
Total Consolidated Assets | 559,408 | 625,752 | 559,408 | 625,752 | ||||
Total Consolidated Additions to Long-Lived Assets | 2,287 | 3,746 | 5,584 | 19,445 | ||||
Total Consolidated Depreciation Expense | [1] | 2,348 | 2,569 | 7,032 | 7,792 | |||
Total Consolidated Amortization Expense | 389 | 748 | 1,415 | 2,457 | ||||
Home Office and Other [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Total Consolidated Revenue | (808) | (532) | (2,423) | (1,733) | ||||
Total Consolidated Operating Income from Continuing Operations | (9,312) | (10,079) | (23,933) | (30,105) | ||||
Total Consolidated Assets | 315,091 | 176,117 | 315,091 | 176,117 | ||||
Total Consolidated Additions to Long-Lived Assets | 2,149 | 4,506 | 6,086 | 8,811 | ||||
Total Consolidated Depreciation Expense | [1] | $ 653 | $ 399 | $ 3,065 | $ 1,076 | |||
[1] | Depreciation expense for each reporting segment has been modified to current presentation to include the Home Office and Other depreciation which is allocated to each reporting segment. |
SEGMENT INFORMATION (Revenues a
SEGMENT INFORMATION (Revenues and Long-Lived Assets by Geographic Area) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | $ 308,609 | $ 310,070 | $ 909,393 | $ 911,424 |
Total Consolidated Long-lived Assets | 423,006 | 435,386 | 423,006 | 435,386 |
Domestic Operations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | 160,948 | 157,064 | 468,787 | 453,183 |
Total Consolidated Long-lived Assets | 156,881 | 150,759 | 156,881 | 150,759 |
Barbados Dominica St Kitts and St Maarten [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | 95,366 | 91,580 | 274,207 | 257,194 |
Total Consolidated Long-lived Assets | 174,827 | 174,921 | 174,827 | 174,921 |
Brazil [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | 49,907 | 59,030 | 159,791 | 196,602 |
Total Consolidated Long-lived Assets | 89,233 | 107,573 | 89,233 | 107,573 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | 2,388 | 2,396 | 6,608 | 4,445 |
Total Consolidated Long-lived Assets | 2,065 | 2,133 | 2,065 | 2,133 |
Total International [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Consolidated Revenue | 147,661 | 153,006 | 440,606 | 458,241 |
Total Consolidated Long-lived Assets | $ 266,125 | $ 284,627 | $ 266,125 | $ 284,627 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Concentration Risk, Benchmark Description | less than 5% | less than 5% | less than 5% | less than 5% |
Sales Revenue, Net [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Detail) $ in Millions | 1 Months Ended |
Apr. 12, 2019USD ($) | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Business Combination, Consideration Transferred | $ 121 |