Segment Information

6 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Information

20. Segment Information

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.”

Certain expenses previously allocated to ACAMS, Becker, OCL, and EduPristine within our former Financial Services segment during the first quarter of fiscal year 2022 have been 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.

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 allocate resources based on segment assets. 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				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Revenue:
Chamberlain	$	141,396	$	139,121	$	276,801	$	274,760
Walden		131,940		140,627		262,841		209,244
Medical and Veterinary		89,966		91,450		178,219		176,264
Total consolidated revenue	$	363,302	$	371,198	$	717,861	$	660,268
Adjusted operating income:
Chamberlain	$	33,229	$	25,791	$	60,231	$	46,646
Walden		29,012		32,401		52,403		43,413
Medical and Veterinary		23,017		19,706		40,371		35,371
Home Office and Other		(5,751)		(7,664)		(8,397)		(18,759)
Total consolidated adjusted operating income		79,507		70,234		144,608		106,671
Reconciliation to Consolidated Financial Statements:
Deferred revenue adjustment		—		(2,354)		—		(8,561)
CEO transition costs		—		—		—		(6,195)
Restructuring expense		(1,363)		(3,387)		(16,428)		(6,481)
Business acquisition and integration expense		(15,941)		(9,060)		(24,356)		(35,613)
Intangible amortization expense		(16,176)		(30,699)		(34,704)		(47,150)
Total consolidated operating income		46,027		24,734		69,120		2,671
Interest expense		(15,589)		(25,929)		(33,349)		(73,322)
Other (expense) income, net		(2,574)		861		(1,007)		1,739
Total consolidated income (loss) from continuing operations before income taxes	$	27,864	$	(334)	$	34,764	$	(68,912)
Capital expenditures:
Chamberlain	$	1,492	$	2,969	$	2,918	$	6,614
Walden		268		2,748		1,093		2,932
Medical and Veterinary		342		504		915		1,759
Home Office and Other		2,094		1,860		4,821		3,467
Total consolidated capital expenditures	$	4,196	$	8,081	$	9,747	$	14,772
Depreciation expense:
Chamberlain	$	4,099	$	4,726	$	8,580	$	9,310
Walden		2,269		2,516		4,864		4,228
Medical and Veterinary		3,031		3,645		6,136		7,100
Home Office and Other		1,257		744		1,881		1,492
Total consolidated depreciation expense	$	10,656	$	11,631	$	21,461	$	22,130
Intangible asset amortization expense:
Walden	$	16,176	$	30,699	$	34,704	$	47,150
Total consolidated intangible asset amortization expense	$	16,176	$	30,699	$	34,704	$	47,150

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				Six Months Ended
	December 31,				December 31,
	2022		2021		2022		2021
Revenue from unaffiliated customers:
Domestic operations	$	273,336	$	279,748	$	539,642	$	484,004
Barbados, St. Kitts, and St. Maarten		89,966		91,450		178,219		176,264
Total consolidated revenue	$	363,302	$	371,198	$	717,861	$	660,268
Long-lived assets:
Domestic operations	$	287,811	$	305,848	$	287,811	$	305,848
Barbados, St. Kitts, and St. Maarten		162,903		151,174		162,903		151,174
Total consolidated long-lived assets	$	450,714	$	457,022	$	450,714	$	457,022

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