Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERSThe Company generated 82% and 79% of its revenue from U.S. domestic sales for the three and nine months ended September 30, 2021. The remaining 18% and 21% of revenue was generated from non-U.S. sales for the three and nine months ended September 30, 2021, respectively. For the three and nine months ended September 30, 2020, 83% and 78% of revenue was from U.S. domestic sales and the remaining 17% and 22% of revenue was generated from non-U.S. sales.

For the three and nine months ended September 30, 2021, the Company recognized 66% and 67% of its revenue over time as control of the services and goods transferred to the customer, and the remaining 34% and 33% at a point in time, when the customer obtained control of the promised goods. For the three and nine months ended September 30, 2020, the Company recognized 71% and 73% of its revenue over time, and the remaining 29% and 27% at a point in time.

In the second quarter of 2020, GHG received $7.4 million under the CARES Act as a general distribution from the Provider Relief Fund to provide relief for lost revenues and expenses incurred in connection with COVID-19. The healthcare revenue for the three and nine months ended September 30, 2020 includes $0.2 million and $5.7 million, respectively, for lost revenues related to COVID-19.

Contract Assets. As of September 30, 2021, the Company recognized a contract asset of $13.4 million related to a contract at a Kaplan International business, which is included in Deferred Charges and Other Assets. The Company expects to recognize an additional $4.0 million related to this performance obligation within the next year. As of December 31, 2020, the contract asset was $8.7 million.

Deferred Revenue. The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance, including amounts which are refundable. The following table presents the change in the Company’s deferred revenue balance:

	As of
	September 30, 2021		December 31, 2020		%
(in thousands)					Change
Deferred revenue	$	376,803	$	343,322	10

In April 2020, GHG received $31.5 million under the expanded Medicare Accelerated and Advanced Payment Program modified by the CARES Act as a result of COVID-19. The Department of Health and Human Services started to recoup this advance 365 days after the payment was issued and for the three and nine months ended September 30, 2021, $6.6 million and $11.6 million of the balance was recognized in revenue for claims submitted for eligible services. The remaining amount is included in the current deferred revenue balance on the Condensed Consolidated Balance Sheet as of September 30, 2021. As of December 31, 2020, the $31.5 million balance was included in the current and noncurrent deferred revenue balances on the Condensed Consolidated Balance Sheet.

The majority of the change in deferred revenue balance is related to the cyclical nature of services in the Kaplan international division. During the nine months ended September 30, 2021, the Company recognized $257.4 million related to the Company’s deferred revenue balance as of December 31, 2020.

Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of September 30, 2021, the deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than twelve months at Kaplan Supplemental Education was $9.4 million. Kaplan Supplemental Education expects to recognize 68% of this revenue over the next twelve months and the remainder thereafter.

Costs to Obtain a Contract. The following table presents changes in the Company’s costs to obtain a contract asset:

(in thousands)	Balance at Beginning of Period		Costs associated with new contracts		Less: Costs amortized during the period		Other		Balance at End of Period
2021	$	24,363	$	23,907	$	(33,903)	$	978	$	15,345

Other activity includes currency translation adjustments for the nine months ended September 30, 2021.