NOTE 10: RESTRUCTURING CHARGES

During the fiscal 2013, DeVry implemented a Voluntary Separation Plan (VSP), an involuntary reduction in force (RIF) and other staff reduction actions that will reduce its workforce by approximately 475 positions across all reporting units. This resulted in a pre-tax charge of approximately $10.3 million in fiscal 2013 that represented severance pay and benefits for these colleagues. This was allocated to the segments as follows: $7.7 million to Business Technology and Management, $1.0 million to Medical and Healthcare, $0.6 million to International and Professional Education and $1.0 million to DeVry home office which is classified as “Depreciation and Other” in the segment disclosure in Note 16: Segment Information”.

DeVry made decisions to consolidate facilities at its Carrington and DeVry University educational institutions. This resulted in pre-tax charges of $6.3 million in fiscal 2013. Also during fiscal year 2013, DeVry consolidated its administrative offices in the Chicagoland area. As a result, a DeVry owned facility in Wood Dale, Illinois was closed in December 2012, and employees were re-located to other facilities in the area. The Wood Dale facility is held as available for sale. This resulted in a pre-tax charge of $7.9 million in fiscal 2013 for a write-down of assets to fair market value and an expected loss on this asset sale. Other restructuring charges totaling $1.7 million were also expensed in fiscal 2013. These facility and other charges were allocated to the segments as follows: $1.4 million to Business Technology and Management, $5.1 million to Medical and Healthcare and $9.4 million to DeVry home office which is classified as “Depreciation and Other” in the segment disclosure in Note 16: Segment Information”. Cash payments for fiscal 2013 restructuring charges were approximately $3.3 million for the year ended June 30, 2013. The remaining accrual for these charges is $13.2 as of June 30, 2013.

During the fourth quarter of fiscal 2012, DeVry implemented an involuntary reduction in force (RIF) that reduced its workforce by approximately 570 positions across all operating segments. This resulted in a pre-tax charge of approximately $7.1 million that primarily represented severance pay and benefits for these employees. This was allocated to the segments as follows: $5.0 million to Business Technology and Management, $2.0 million to Medical and Healthcare and $0.1 million to International and Professional Education. Cash payments and adjustments for the severance charges and restructuring charges were approximately $5.7 million for the year ended June 30, 2013. As of June 30, 2013, all amounts have been paid under these fiscal year 2012 restructuring plans.

The following table summarizes the fiscal 2012 and 2013 separation and restructuring plan activity for which cash payments are required (dollars in millions):

Liability balance at June 30, 2011	$	-
Increase in liability (separation charges)		7.1
Reduction in liability (payments and adjustments)		(1.4)
Liability balance at June 30, 2012		5.7
Increase in liability (separation and other charges)		16.5
Reduction in liability (payments and adjustments)		(9.0)
Liability balance at June 30, 2013	$	13.2

The remaining liability balances as of June 30, 2013 primarily represent costs for employees that have either not yet separated from DeVry or their full severance has not yet been paid. The majority of these remaining costs are expected to be paid in 2014 and 2015.