Segment Information

6 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

19. Segment Information

Beginning in the first quarter of fiscal year 2020, Adtalem Brazil operations were classified as discontinued operations. See Note 3 “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. Discontinued operations assets are included in the table below to reconcile to total consolidated assets presented on the Consolidated Balance Sheets.

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. AUC, RUSM, and RUSVM are collectively referred to as the “medical and veterinary schools.”

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 lending. This segment includes the operations of ACAMS, Becker, OCL, 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, which consists of restructuring expense, business acquisition and integration expense, and gain on sale of assets. 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 activities 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,
	2020		2019		2020		2019
Revenue:
Medical and Healthcare	$	234,396	$	220,180	$	453,222	$	427,667
Financial Services		48,715		45,992		98,130		93,118
Total consolidated revenue	$	283,111	$	266,172	$	551,352	$	520,785
Operating income excluding special items:
Medical and Healthcare	$	51,290	$	41,600	$	104,300	$	70,227
Financial Services		7,793		5,679		16,480		9,786
Home Office and Other		(6,516)		(5,013)		(13,848)		(10,255)
Total consolidated operating income excluding special items		52,567		42,266		106,932		69,758
Reconciliation to Consolidated Financial Statements:
Restructuring expense		(1,165)		(1,955)		(5,388)		(8,485)
Business acquisition and integration expense		(11,079)		—		(24,515)		—
Gain on sale of assets		—		—		—		4,779
Total consolidated operating income		40,323		40,311		77,029		66,052
Net other expense		(1,512)		(31,438)		(3,682)		(36,065)
Total consolidated income from continuing operations before income taxes	$	38,811	$	8,873	$	73,347	$	29,987
Segment assets:
Medical and Healthcare	$	987,276	$	913,359	$	987,276	$	913,359
Financial Services		590,045		574,813		590,045		574,813
Home Office and Other		667,343		272,601		667,343		272,601
Discontinued Operations		—		629,837		—		629,837
Total consolidated assets	$	2,244,664	$	2,390,610	$	2,244,664	$	2,390,610
Capital expenditures:
Medical and Healthcare	$	5,623	$	6,367	$	14,889	$	12,834
Financial Services		2,344		873		4,471		1,412
Home Office and Other		1,765		2,635		4,815		6,065
Total consolidated capital expenditures	$	9,732	$	9,875	$	24,175	$	20,311
Depreciation expense:
Medical and Healthcare	$	7,690	$	7,540	$	15,063	$	14,771
Financial Services		800		588		1,529		882
Home Office and Other		860		703		1,733		1,571
Total consolidated depreciation expense	$	9,350	$	8,831	$	18,325	$	17,224
Intangible asset amortization expense:
Financial Services	$	2,519	$	2,576	$	5,037	$	5,110
Total consolidated intangible asset amortization expense	$	2,519	$	2,576	$	5,037	$	5,110

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. Revenue and long-lived assets by geographic area are as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2020		2019		2020		2019
Revenue from unaffiliated customers:
Domestic operations	$	176,911	$	160,410	$	349,556	$	312,445
International operations:
Barbados, St. Kitts, and St. Maarten		92,419		94,705		177,480		185,675
Other		13,781		11,057		24,316		22,665
Total international		106,200		105,762		201,796		208,340
Total consolidated revenue	$	283,111	$	266,172	$	551,352	$	520,785
Long-lived assets:
Domestic operations	$	215,797	$	200,257	$	215,797	$	200,257
International operations:
Barbados, St. Kitts, and St. Maarten		161,825		162,813		161,825		162,813
Other		1,077		1,755		1,077		1,755
Total international		162,902		164,568		162,902		164,568
Total consolidated long-lived assets	$	378,699	$	364,825	$	378,699	$	364,825

Prior period amounts within domestic operations and other international operations revenue in the above table have been reclassified for consistency with the current period presentation. We previously classified certain sales dependent upon the location of the legal entity reporting the sale. We have changed our methodology to classify these sales within the geographic area category where the sale originates. We believe this better reflects the usefulness of this disclosure.

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