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Segment Information

6 Months Ended

Dec. 31, 2019

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.

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, OnCourse Learning, 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						Six Months Ended
		December 31,						December 31,
		2019			2018			2019			2018
Revenue:
Medical and Healthcare		$	220,180		$	212,627		$	427,667		$	414,727
Financial Services			45,992			42,142			93,118			77,788
Home Office and Other			—			(808)			—			(1,615)
Total consolidated revenue		$	266,172		$	253,961		$	520,785		$	490,900
Operating income from continuing operations excluding special items:
Medical and Healthcare		$	41,600		$	47,521		$	70,227		$	88,192
Financial Services			5,679			9,633			9,786			14,383
Home Office and Other			(5,013)			(10,521)			(10,255)			(19,701)
Total consolidated operating income from continuing operations excluding special items			42,266			46,633			69,758			82,874
Reconciliation to Consolidated Financial Statements:
Restructuring expense			(1,955)			(3,535)			(8,485)			(43,008)
Gain on sale of assets			—			—			4,779			—
Settlement gain			—			15,571			—			15,571
Total consolidated operating income from continuing operations			40,311			58,669			66,052			55,437
Net other expense			(31,438)			(4,955)			(36,065)			(8,904)
Total consolidated income from continuing operations before income taxes		$	8,873		$	53,714		$	29,987		$	46,533
Segment assets:
Medical and Healthcare		$	913,359		$	793,673		$	913,359		$	793,673
Financial Services			574,813			447,717			574,813			447,717
Home Office and Other			277,947			330,777			277,947			330,777
Discontinued Operations			624,491			550,056			624,491			550,056
Total consolidated assets		$	2,390,610		$	2,122,223		$	2,390,610		$	2,122,223
Capital expenditures:
Medical and Healthcare		$	6,367		$	14,942		$	12,834		$	26,718
Financial Services			873			441			1,412			1,403
Home Office and Other			2,635			3,354			6,065			3,937
Total consolidated capital expenditures		$	9,875		$	18,737		$	20,311		$	32,058
Depreciation expense:
Medical and Healthcare		$	7,540		$	6,509		$	14,771		$	12,769
Financial Services			588			365			882			732
Home Office and Other			703			1,312			1,571			2,412
Total consolidated depreciation expense		$	8,831		$	8,186		$	17,224		$	15,913
Intangible asset amortization expense:
Financial Services		$	2,576		$	1,605		$	5,110		$	3,211
Total consolidated intangible asset amortization expense		$	2,576		$	1,605		$	5,110		$	3,211

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 months ended December 31, 2019 and 2018. Revenue and long-lived assets by geographic area are as follows (in thousands):


		Three Months Ended						Six Months Ended
		December 31,						December 31,
		2019			2018			2019			2018
Revenue from unaffiliated customers:
Domestic operations		$	169,140		$	161,176		$	330,535		$	307,839
International operations:
Barbados, Dominica, St. Kitts, and St. Maarten			94,705			90,394			185,675			178,841
Other			2,327			2,391			4,575			4,220
Total international			97,032			92,785			190,250			183,061
Total consolidated revenue		$	266,172		$	253,961		$	520,785		$	490,900
Long-lived assets:
Domestic operations		$	200,257		$	159,069		$	200,257		$	159,069
International operations:
Barbados, Dominica, St. Kitts, and St. Maarten			162,813			172,065			162,813			172,065
Other			1,755			2,155			1,755			2,155
Total international			164,568			174,220			164,568			174,220
Total consolidated long-lived assets		$	364,825		$	333,289		$	364,825		$	333,289

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