Segment Information

3 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

20. Segment Information

Beginning in the second quarter of fiscal year 2022, Adtalem eliminated its Financial Services segment when ACAMS, Becker, OCL, and EduPristine, 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 the former Financial Services segment. 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 ACAMS, Becker, OCL, and EduPristine within our former Financial Services segment during the first quarter of fiscal year 2022 were reclassified to Home Office and Other based on discontinued operations reporting guidance regarding allocation of corporate overhead. Beginning in the second quarter of fiscal year 2022, these costs are being allocated to the Chamberlain, Walden, and Medical and Veterinary segments.

We present three reportable segments as follows:

Chamberlain – Offers degree and non-degree programs in the nursing and health professions postsecondary education industry. This segment includes the operations of Chamberlain.

Walden – Offers more than 100 online certificate, bachelor’s, master’s, and doctoral degrees, including those in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice. This segment includes the operations of Walden, which was acquired by Adtalem on August 12, 2021. See Note 3 “Acquisitions” for additional information on the acquisition.

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

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 on each segment’s adjusted operating income. Adjusted operating income excludes special items, which consists of deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, and intangible asset amortization. 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. “Home Office and Other” includes activities not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. Total assets by segment is not presented as our CODM does not review or allocated resources based on segment assets. Segments may have allocated depreciation expense related to depreciable assets reported as an asset in a

different segment or at Home Office and Other. 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
	September 30,
	2022		2021
Revenue:
Chamberlain	$	135,405	$	135,639
Walden		130,901		68,617
Medical and Veterinary		88,253		84,814
Total consolidated revenue	$	354,559	$	289,070
Adjusted operating income:
Chamberlain	$	27,002	$	20,855
Walden		23,391		11,012
Medical and Veterinary		17,354		15,665
Home Office and Other		(2,646)		(11,095)
Total consolidated adjusted operating income		65,101		36,437
Reconciliation to Consolidated Financial Statements:
Deferred revenue adjustment		—		(6,207)
CEO transition costs		—		(6,195)
Restructuring expense		(15,065)		(3,094)
Business acquisition and integration expense		(8,415)		(26,553)
Intangible amortization expense		(18,528)		(16,451)
Total consolidated operating income (loss)		23,093		(22,063)
Net other expense		(16,193)		(46,515)
Total consolidated income (loss) from continuing operations before income taxes	$	6,900	$	(68,578)
Capital expenditures:
Chamberlain	$	1,426	$	3,645
Walden		825		184
Medical and Veterinary		573		1,255
Home Office and Other		2,727		1,607
Total consolidated capital expenditures	$	5,551	$	6,691
Depreciation expense:
Chamberlain	$	4,481	$	4,584
Walden		2,595		1,712
Medical and Veterinary		3,105		3,455
Home Office and Other		624		748
Total consolidated depreciation expense	$	10,805	$	10,499
Intangible asset amortization expense:
Walden	$	18,528	$	16,451
Total consolidated intangible asset amortization expense	$	18,528	$	16,451

Adtalem conducts its educational operations in the U.S., Barbados, St. Kitts, and St. Maarten. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended
	September 30,
	2022		2021
Revenue from unaffiliated customers:
Domestic operations	$	266,306	$	204,256
Barbados, St. Kitts, and St. Maarten		88,253		84,814
Total consolidated revenue	$	354,559	$	289,070
Long-lived assets:
Domestic operations	$	272,597	$	318,036
Barbados, St. Kitts, and St. Maarten		167,271		157,972
Total consolidated long-lived assets	$	439,868	$	476,008

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