SEGMENT INFORMATION

9 Months Ended

Mar. 31, 2019

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.