Segment Information

9 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment Information

20. Segment Information

During the fourth quarter of fiscal year 2019, Adtalem renamed two of its segments: Professional Education was renamed Financial Services, and Technology and Business was renamed Business and Law.

Beginning in the first quarter of fiscal year 2020, Adtalem Brazil operations were classified as discontinued operations. See Note 4 “Discontinued Operations and Assets Held for Sale” for additional information. Segment information presented excludes the results of Adtalem Brazil. Adtalem eliminated its Business and Law reportable segment during the first quarter of fiscal year 2020 when Adtalem Brazil was classified as discontinued operations. In addition, DeVry University and Carrington are presented as discontinued operations, see Note 4 “Discontinued Operations and Assets Held for Sale” for additional information. 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 Adtalem Brazil within our former Business and Law segment during fiscal year 2019 were reclassified to the Home Office and Other segment based on discontinued operations reporting guidance regarding allocation of corporate overhead. For fiscal year 2020, home office costs to support the remaining businesses are being allocated to the Medical and Healthcare and Financial Services segments.

We present two reportable segments as follows:

Medical and Healthcare – Offers degree and non-degree programs in the medical and healthcare postsecondary education industry. This segment includes the operations of Chamberlain, AUC, RUSM, and RUSVM. AUC, RUSM, and RUSVM is collectively referred to as the “medical and veterinary schools.”

Financial Services – Offers test preparation, certifications, conferences, seminars, memberships, and subscriptions to business professionals in the areas of accounting, anti-money laundering, banking, and mortgage industries. This segment includes the operations of ACAMS, Becker, OCL, and EduPristine.

These segments are consistent with the method by which the Chief Operating Decision Maker (Adtalem’s Chairman, President and Chief Executive Officer) evaluates performance and allocates resources. Performance evaluations are based on each segment’s operating income excluding special items. Operating income excludes special items that consists of restructuring expense, gain on sale of assets, and settlement gain. Adtalem’s management excludes these items from its

review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. 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 reportable 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 2 “Summary of Significant Accounting Policies.”

Summary financial information by reportable segment is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2020		2019		2020		2019
Revenue:
Medical and Healthcare	$	227,344	$	223,575	$	655,011	$	638,302
Financial Services		44,143		35,935		137,261		113,723
Home Office and Other		—		(807)		—		(2,422)
Total consolidated revenue	$	271,487	$	258,703	$	792,272	$	749,603
Operating income from continuing operations excluding special items:
Medical and Healthcare	$	57,559	$	52,960	$	127,786	$	141,152
Financial Services		4,190		5,086		13,976		19,469
Home Office and Other		(5,408)		(10,281)		(15,663)		(29,982)
Total consolidated operating income from continuing operations excluding special items		56,341		47,765		126,099		130,639
Reconciliation to Consolidated Financial Statements:
Restructuring expense		(1,854)		(2,186)		(10,339)		(45,194)
Gain on sale of assets		—		—		4,779		—
Settlement gain		—		—		—		15,571
Total consolidated operating income from continuing operations		54,487		45,579		120,539		101,016
Net other income (expense)		105,881		(3,009)		69,816		(11,913)
Total consolidated income from continuing operations before income taxes	$	160,368	$	42,570	$	190,355	$	89,103
Segment assets:
Medical and Healthcare	$	917,657	$	827,452	$	917,657	$	827,452
Financial Services		577,699		446,752		577,699		446,752
Home Office and Other		457,686		317,000		457,686		317,000
Discontinued Operations		490,978		557,499		490,978		557,499
Total consolidated assets	$	2,444,020	$	2,148,703	$	2,444,020	$	2,148,703
Capital expenditures:
Medical and Healthcare	$	7,274	$	10,978	$	20,108	$	37,696
Financial Services		568		84		1,980		1,487
Home Office and Other		3,781		2,149		9,846		6,086
Total consolidated capital expenditures	$	11,623	$	13,211	$	31,934	$	45,269
Depreciation expense:
Medical and Healthcare	$	7,127	$	7,680	$	21,898	$	20,449
Financial Services		556		480		1,438		1,212
Home Office and Other		866		653		2,437		3,065
Total consolidated depreciation expense	$	8,549	$	8,813	$	25,773	$	24,726
Intangible asset amortization expense:
Financial Services	$	2,576	$	1,605	$	7,686	$	4,816
Total consolidated intangible asset amortization expense	$	2,576	$	1,605	$	7,686	$	4,816

Adtalem conducts its educational and financial services operations in the U.S., Barbados, St. Kitts, St. Maarten, India, Europe, China, Canada, and the Middle East. Other international revenue was less than 5% of total revenue for each of the three and nine months ended March 31, 2020 and 2019. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2020		2019		2020		2019
Revenue from unaffiliated customers:
Domestic operations	$	176,946	$	160,949	$	507,482	$	468,788
International operations:
Barbados, Dominica, St. Kitts, and St. Maarten		92,259		95,366		277,934		274,207
Other		2,282		2,388		6,856		6,608
Total international		94,541		97,754		284,790		280,815
Total consolidated revenue	$	271,487	$	258,703	$	792,272	$	749,603
Long-lived assets:
Domestic operations	$	208,812	$	156,881	$	208,812	$	156,881
International operations:
Barbados, Dominica, St. Kitts, and St. Maarten		160,552		174,827		160,552		174,827
Other		1,807		2,065		1,807		2,065
Total international		162,359		176,892		162,359		176,892
Total consolidated long-lived assets	$	371,171	$	333,773	$	371,171	$	333,773

No one customer accounted for more than 10% of Adtalem’s consolidated revenue.