SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2018

NOTE 14: SEGMENT INFORMATION

Beginning in the second quarter of fiscal year 2018, DeVry University operations were classified as discontinued operations. In addition, beginning in the fourth quarter of fiscal year 2018, Carrington operations were classified as discontinued operations. See “Note 2: Discontinued Operations” for further information. Segment information presented excludes the results of DeVry University and Carrington, which were previously classified within our former U.S. Traditional Postsecondary segment and are presented as discontinued operations in the Consolidated Financial Statements. 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 DeVry University and Carrington within our former U.S. Traditional Postsecondary segment have been reclassified to the Home Office and Other segment based on discontinued operating reporting guidance regarding allocation of corporate overhead.

Adtalem’s principal business is the provision of educational services. Adtalem presents three reporting segments: “Medical and Healthcare,” which includes the operations of Chamberlain and the medical and veterinary schools (which include AUC, RUSM and RUSVM); “Professional Education,” which includes the operations of ACAMS, Becker and EduPristine; and “Technology and Business,” which includes the operations of Adtalem Brazil.

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, in part, on each segment’s operating income. 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 reporting 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 3: Summary of Significant Accounting Policies.”

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

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
Revenue:
Medical and Healthcare	$	212,627		$	203,297		$	414,727		$	394,582
Professional Education		42,142			30,359			77,788			70,401
Technology and Business		62,633			75,133			109,884			137,572
Home Office and Other		(808	)		(578	)		(1,615	)		(1,201	)
Total Consolidated Revenue	$	316,594		$	308,211		$	600,784		$	601,354
Operating Income (Loss) from Continuing Operations:
Medical and Healthcare	$	60,647		$	55,047		$	62,303		$	81,279
Professional Education		9,633			2,193			14,383			12,700
Technology and Business		8,471			13,991			5,726			15,852
Home Office and Other		(8,452	)		(11,312	)		(14,621	)		(20,026	)
Total Consolidated Operating Income from Continuing Operations	$	70,299		$	59,919		$	67,791		$	89,805
Segment Assets:
Medical and Healthcare	$	793,673		$	885,663		$	793,673		$	885,663
Professional Education		447,717			444,029			447,717			444,029
Technology and Business		551,501			610,803			551,501			610,803
Home Office and Other		329,332			169,718			329,332			169,718
Discontinued Operations		-			101,387			-			101,387
Total Consolidated Assets	$	2,122,223		$	2,211,600		$	2,122,223		$	2,211,600
Additions to Long-Lived Assets:
Medical and Healthcare	$	14,942		$	8,669		$	26,718		$	14,336
Professional Education		441			298			1,403			1,221
Technology and Business		1,468			12,407			3,297			15,748
Home Office and Other		3,354			2,463			3,937			4,305
Total Consolidated Additions to Long-Lived Assets	$	20,205		$	23,837		$	35,355		$	35,610
Reconciliation to Consolidated Financial Statements:
Capital Expenditures	$	20,205		$	19,700		$	35,355		$	31,473
Increase in Capital Assets from Acquisitions		-			16			-			16
Increase in Intangible Assets and Goodwill		-			4,121			-			4,121
Total Increase in Consolidated Long-Lived Assets	$	20,205		$	23,837		$	35,355		$	35,610
Depreciation Expense (1):
Medical and Healthcare	$	6,509		$	7,225		$	12,769		$	14,811
Professional Education		365			522			732			982
Technology and Business		2,369			2,458			4,684			5,223
Home Office and Other		1,312			310			2,412			677
Total Consolidated Depreciation Expense	$	10,555		$	10,515		$	20,597		$	21,693
Intangible Asset Amortization Expense:
Professional Education	$	1,605		$	1,626		$	3,211		$	3,251
Technology and Business		522			837			1,027			1,709
Total Consolidated Amortization Expense	$	2,127		$	2,463		$	4,238		$	4,960

(1) Depreciation expense for each reporting segment has been modified to current presentation to include the Home Office and Other depreciation which is allocated to each reporting segment.

Adtalem conducts its educational operations in the U.S., Barbados, St. Kitts, St. Maarten, Brazil, Canada, Europe, the Middle East, India, China and the Pacific Rim. Other international revenue, which is derived principally from Europe and the Pacific Rim, was less than 5% of total revenue for each of the three and six months ended December 31, 2018 and 2017. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
Revenue from Unaffiliated Customers:
Domestic Operations	$	161,176	$	144,095	$	307,839	$	296,120
International Operations:
Dominica, St. Kitts and St. Maarten		90,394		88,236		178,841		165,614
Brazil		62,633		75,133		109,884		137,572
Other		2,391		747		4,220		2,048
Total International		155,418		164,116		292,945		305,234
Total Consolidated Revenue	$	316,594	$	308,211	$	600,784	$	601,354
Long-Lived Assets:
Domestic Operations	$	159,069	$	153,321	$	159,069	$	153,321
International Operations:
Barbados, Dominica, St. Kitts and St. Maarten		172,065		167,841		172,065		167,841
Brazil		91,653		106,884		91,653		106,884
Other		2,155		4,143		2,155		4,143
Total International		265,873		278,868		265,873		278,868
Total Consolidated Long-Lived Assets	$	424,942	$	432,189	$	424,942	$	432,189

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