Adtalem Global Education
Annual Report 2021

Plain-text annual report

Notice of Annual Meeting of Shareholders, 2021 Proxy Statement and 2021 Annual Report About Us #WEAREADTALEM Adtalem Global Education is a workforce solutions provider and the parent organization of American University of the Caribbean School of Medicine, Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine, Ross University School of Veterinary Medicine, and Walden University. STUDENT FOCUSED Empowering individuals is the meaning behind our name – Adtalem Global Education. Adtalem (pronunciation: ad TAL em) is Latin for “To Empower.” MISSION VISION PURPOSE We provide global access to knowledge that transforms lives and enables careers. To create a dynamic global community of life-long learners who improve the world. We empower students, members and colleagues to achieve their goals, find success, and make inspiring contributions to our global community. WE ARE 9 institutions and companies MORE THAN 10,000 employees WITH A PRESENCE IN 209 territories and countries* WITH 27 operating campuses As of September 1, 2021. * Presence indicates employees, students, members or offices. Message from our Executive Chairman of the Board October 8, 2021 To Our Shareholders: Fiscal year 2021 was a year of significant progress and impact as we strengthened our position as a leading workforce solutions provider and healthcare educator. It is clear from our solid performance, robust educational offerings and partnerships, that our ability to truly make a difference in the lives of our students, add value for our employer partners and positively impact the communities we serve — remains strong and in demand. All of this is possible because of our dedicated colleagues around the world. When the world sheltered from the pandemic, our organizational instincts — resiliency, responsiveness and change agility — carried us forward in an unwavering pursuit of our mission. These key cultural qualities enable us to thrive amidst ongoing changes in the world. Despite lingering headwinds from COVID-19, our performance for the full year was in line with our outlook. Our medical and healthcare institutions performed well, as student outcomes continue to drive demand for our programs, and our financial services businesses continued to capitalize on our leading market positions and previous investments to drive operating performance. Most notably, just after the close of the fiscal year, we finalized our acquisition of Walden University, which represented the culmination of a multi-year strategy to reposition the business as a leading healthcare education provider with unmatched scale and breadth. After several years of streamlining our portfolio through the divestiture of non-core assets, the Walden acquisition further positions Adtalem as a more strategically focused business with a greater emphasis on the rapidly growing healthcare sector. As the need for more physicians and nurses continues to rise and improving health equity remains a global priority, Adtalem is uniquely positioned to scale sustainable workforce solutions. By engaging and supporting students from historically underrepresented groups and offering learning modalities that meet learners wherever they may be in life, our organization is well equipped to meet the challenges and demands for these critical workforce sectors — and with industry-leading results. Proudly, across our two medical institutions, we graduated more than 1,000 physicians; first-time residency match rates were 92% for first-time eligible 2020-2021 graduates; more than 70% of our 2019-2020 medical graduates chose to enter critical roles in primary care across all 50 U.S. states and Puerto Rico; and Chamberlain’s first-time NCLEX pass rates were over 91%. These outcomes demonstrate that our dedication has paid off, and we remain committed to building a pipeline of highly qualified talent to solve complex issues in the healthcare industry. In 2021, 84% of the total student population in our five degree-conferring institutions identified as female and 48% as a minority. Adtalem’s medical institutions graduate more than 100 Black/African American medical students annually, more than any other U.S. medical school. This level of diversity is imperative to the workforce pipeline and to our ability to increase health equity across the communities we serve. At Chamberlain, we expanded our physical footprint with a new campus in Irwindale, California and built robust employer partnerships to make education more accessible for all. Chamberlain University launched an innovative Called-to-Care Scholars Program with LCMC Health in Louisiana. This program is the first-of-its-kind tuition-free nursing program — funded by LCMC in exchange for employment after graduation and passing the NCLEX. The program offers a targeted approach to strengthening the pipeline of nurses and our increasing scale gives us the ability to service more partnerships like this in the future, a perfect example of our workforce solutions provider strategy in action. With a concentration of online graduate-level healthcare programs that are complementary to Adtalem’s core offerings, Walden significantly expands our breadth and best-in-class modalities to further enable us to reimagine the future of healthcare education at a critical time in history. Adtalem’s family of institutions have nearly 140,000 total student enrollments, with 82% of students in online learning modalities. The addition of Walden also delivers on our commitment to provide greater access to education, particularly for students of diverse backgrounds and those from underrepresented demographics. 1 2021 Proxy StatementMessage from our Executive Chairman of the Board In 2021, we saw continued strong revenue growth in our Financial Services segment, with double-digit increases driven by our ability to capture the demand generated by strong secular tailwinds. More broadly in the segment, we are establishing prominent growth vectors to enable expansion and diversification into new markets, and investments in new offerings are positioning this segment for long-term growth. With our focus shifting firmly towards the healthcare sector, we announced in August that we are exploring strategic alternatives for our Financial Services businesses. This is a natural progression of our workforce solutions strategy and is consistent with our long-standing commitment to delivering long-term shareholder value. After such a pivotal year and with the need to keep strong momentum as we continue with our next phase of growth, I determined that the time was right for me to transition from my role as chairman and CEO to executive chairman of Adtalem’s board of directors. Steve Beard, previously our chief operating officer, succeeded me as president and CEO and joined our board. This decision followed a thorough board-led succession planning process, with the board unanimously agreeing that Steve is the right choice to provide the continuity and strategic insight needed to lead us through this next phase of our growth. Steve has played a critical role in refining our leading workforce solutions strategy and repositioning our Financial Services segment for long-term, profitable growth. He has been instrumental in our acquisition of Walden and in the divestitures of DeVry University, Carrington College and Adtalem Brazil. There is no leader better suited than Steve to take us forward with strong momentum as we continue to amplify our social impact, expand access to high- quality education and unlock even more possibilities for all. Over the past five years during my tenure as CEO, we have made incredible progress. I am extremely proud and grateful for everyone at Adtalem; for everything we have accomplished and for supporting the repositioning of the company for growth. As executive chairman, I remain actively involved in our mission and will continue to partner with Steve, the board and our leadership team to drive results and superior student outcomes. Together, the strategic actions we took this year represent the beginning of the next chapter for Adtalem. A chapter in which we will continue our positive momentum to expand as a leading workforce solutions provider in a way that will enable us to drive even greater impact for our students, employer partners, communities and shareholders. We are energized by the even greater role Adtalem plays in solving these worker shortages through the increased scale and differentiated capabilities made possible by our acquisition of Walden. We hope you join us in this excitement for our next chapter, and on behalf of the entire Adtalem Global Education team and Board of Directors, we thank you for your continued confidence in our mission. Lisa W. Wardell Executive Chairman 2 Adtalem Global Education Inc. Notice of Annual Meeting of Shareholders W: 10 mm H: 10 mm Standard size of artboard 1 pt Standard stroke weight Make sure the icon is centered within the artboard Remove unnecessary color swatches Check the overprinting from the ATTRIBUTES window (Ctrl+F11) RECORD DATE September 24, 2021 PLACE The Annual Meeting will be held entirely online at: www.virtualshareholdermeeting.com/ ATGE2021. DATE AND TIME November 10, 2021 8:30 a.m. Central Standard Time Online check-in will be available beginning at 8:15 a.m. Central Standard Time. Please allow ample time for the online check-in process. ITEMS OF BUSINESS Proposal No. 1: Elect the directors named in the attached Proxy Statement to serve until the 2022 Annual Meeting of Shareholders Proposal No. 2: Ratify selection of PricewaterhouseCoopers LLP as independent registered public accounting firm Proposal No. 3: Say-on-pay: Advisory vote to approve the compensation of our named executive officers Board Voting Recommendation FOR each director nominee FOR FOR Shareholders will also consider such other business as may come properly before the Annual Meeting or any adjournment thereof. To participate in the 2021 Annual Meeting, you will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. This notice and Proxy Statement, voting instructions, and Adtalem Global Education Inc.’s 2021 Annual Report to Shareholders are being mailed to shareholders beginning on or about October 8, 2021. Douglas G. Beck Senior Vice President, General Counsel and Corporate Secretary REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: VIA THE INTERNET Visit the web site listed on your proxy card BY TELEPHONE Call the telephone number on your proxy card BY MAIL Sign, date, and return your proxy card in the enclosed envelope VIRTUALLY Attend the Annual Meeting online at www.virtualshareholdermeeting.com/ ATGE2021. Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on November 10, 2021. Our Proxy Statement and the Adtalem Global Education Inc. Annual Report for 2021 are available online at www.proxyvote.com or at our investor relations website, http://investors.adtalem.com/. 3 2021 Proxy StatementProxy Summary This summary highlights selected information about the items to be voted on at the annual meeting. It does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting. OUR BOARD OF DIRECTORS Director Nominees Diverse mix of backgrounds, current and former CEOs, marketing and medical professionals, and a former finance executive at a leading global company. Name and Principal Occupation Stephen W. Beard President and CEO Adtalem Global Education Inc. Director Since Other Public Company Boards Age Committee Memberships ACA AUD COM ER NG 50 2021 William W. Burke LEAD INDEPENDENT DIRECTOR President and Founder, Austin Highlands Advisors, LLC 62 2017 2 Charles DeShazer INDEPENDENT Director, Clinicals Products Google Health Mayur Gupta1 INDEPENDENT Chief Marketing & Strategy Officer Gannett Co., Inc. Donna J. Hrinak INDEPENDENT Senior Vice President, Corporate Affairs, Royal Caribbean Group Georgette Kiser INDEPENDENT Operating Executive, The Carlyle Group Lyle Logan INDEPENDENT Executive Vice President and Managing Director, The Northern Trust Company Michael W. Malafronte INDEPENDENT Former Managing Partner, International Value Advisers, LLC and President, IVA Funds Sharon L. O’Keefe INDEPENDENT Retired President, University of Chicago Medical Center Kenneth J. Phelan INDEPENDENT Former Chief Risk Officer., U.S. Department of Treasury Lisa W. Wardell2 Executive Chairman of the Board Adtalem Global Education Inc. 62 2021 44 2021 70 2018 53 2018 62 2007 47 2016 69 2020 62 2020 52 2008 3 1 1 1 1 Academic Quality Committee Audit and Finance Committee Compensation Committee External Relations Committee Nominating & Governance Committee Audit Committee Financial Expert Committee Chair 1 Mr. Gupta will join the Academic Quality and External Relations committees effective November 9, 2021. 2 Ms. Wardell is an ex officio member of each committee. 4 Adtalem Global Education Inc.Proxy Summary Board Highlights BOARD INDEPENDENCE Independent Not Independent TENURE 81.8% of our current directors are independent, including our lead independent director (“Lead Independent Director”), each of our five committees are composed entirely of independent directors, and our CEO is the only member of management who serves as a director SKILLS AND EXPERIENCE Senior Executive Strategy Governance Less than 3 years 3 to 8 years Over 8 years Average Tenure M&A/Joint Ventures 4.2 years Healthcare and Medical AGE Under 50 50 to 60 61 to 72 Average Age 57.5 years Financial Services 11/11 9/11 9/11 5/11 7/11 7/11 BOARD DIVERSITY Human Capital Management 36.3% 54.5% 18.1% Financial Reporting Compensation Female Ethnically Diverse Lived and Worked Outside of U.S. Global Markets 6/11 6/11 7/11 6/11 5 2021 Proxy Statement Proxy Summary Proxy Summary CORPORATE GOVERNANCE HIGHLIGHTS Shareholder Engagement We conduct regular outreach and engagement with our shareholders and value their insight and feedback. OUR OUTREACH We reached out to our shareholders representing approximately 80% of shares owned. We contacted shareholders representing more than 80% of shares owned. We met with shareholders representing approximately 45% of shares owned Ongoing Enhancements Our Board continually monitors best practices in corporate governance and, consistent with feedback from shareholders and other stakeholders, has taken the following actions in recent years: 2021 • Continued to refresh our Board by adding three new directors including our new CEO and directors with significant expertise in healthcare and digital marketing 2020 • Refreshed our Board by adding two new directors with significant expertise in healthcare and financial services • Amended the charter of our External Relations Committee to clarify its responsibilities for oversight of our sustainability strategy, including environmental and social policies 2019 • Appointed a Lead Independent Director when our CEO was appointed as our Chairman of the Board • Enhanced our proxy statement to focus on disclosures in key areas of investor interest • Increased stock ownership requirements for our Chief Operating Officer and other executive officers 2018 • Broadened our shareholder outreach program and increased Board involvement 2017 • Adopted proxy access (3%, 3 years, group up to 20 shareholders, greater of 2 directors or 20%) • Amended By-Laws to provide for majority voting with plurality carve out for contested elections • Approved Director resignation requirement upon change of principal job responsibilities • Added a Lead Independent Director requirement when our Chairman of the Board is not independent • Adopted outside Board service limits 6 Adtalem Global Education Inc.Proxy Summary Ongoing Best Practices BOARD COMMITTEES % We have five Board committees – Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance, each of which typically meets at least four times per year % The Chair of each committee, in consultation with the committee members, determines the frequency and length of committee meetings % Our Board and each of its committees are authorized to retain independent advisors at Adtalem’s expense DIRECTOR STOCK OWNERSHIP % 60% of our non-employee directors’ annual compensation (excluding fees for other additional roles) is in the form of restricted stock units (“RSUs”) % Our non-employee directors (other than those who are affiliated with our shareholders) are subject to a policy requiring their ownership of shares with a value equal to or in excess of three times their annual retainer CONTINUOUS IMPROVEMENT % New directors receive a tailored, two-day, live training program about Adtalem and its institutions from management % Our directors are encouraged to participate in director-oriented training programs % The Board annually undergoes a self-assessment process to critically evaluate its performance at a committee and Board level COMMUNICATION % Our Board promotes open and frank discussions with senior management % Our directors have access to all members of management 7 2021 Proxy StatementProxy Summary Proxy Summary EXECUTIVE COMPENSATION HIGHLIGHTS • Strong linkage of pay to individual, institutional, and financial performance • Balanced compensation program aligning performance to interests of shareholders, students, and other stakeholders Our Compensation Framework 2021 COMPENSATION SNAPSHOT Salary (cash) Objective Reflect experience, market competition and scope of responsibilities Additional Explanation • Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. Time Horizon Performance Measures Reviewed Annually Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021. MIP Annual Incentive (cash) Reward achievement of short-term operational business priorities 1 year • Revenue* • Adjusted Earnings Per Share* • Individual Goals • Represents 15% and 20% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. • Represents 33.3% of NEO LTI granted in FY21 • Represents 33.3% of NEO LTI granted in FY21 4 year ratable Stock price growth • ROIC • FCF per share 3 year cliff • Represents 33.3% of NEO LTI granted in FY21 Long Term Incentive (equity) Stock Options Reward stock RSUs ROIC PSUs FCF PSUs price growth and retain key talent Align interests of management and shareholders, and retain key talent Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent * A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit. 8 Adtalem Global Education Inc.Proxy Summary SUSTAINABILITY AND COMMUNITY RELATIONS Adtalem is committed to a holistic approach to our communities, providing quality learning and working opportunities, caring for the places where we operate, and conducting our business in a transparent and responsible manner. We advanced our environmental, social, and governance (“ESG”) strategy during fiscal year 2021 and remained steadfastly focused on our overarching philosophy of stewardship. ADTALEM GLOBAL EDUCATION SUSTAINABILITY COMMITMENT Adtalem Global Education operates in a sustainable, ethical and responsible manner as we increase access and equity in education and workforce training. Our solutions empower students and members to help address workforce needs in the healthcare and financial services industries. Adtalem is committed to protecting the environment, confronting the challenge of climate change, continuously enhancing our diverse and inclusive culture, and investing in the well-being of the communities where we teach, learn and work, globally. Environmental Practices Social Practices Governance Practices In fiscal year 2020 we launched a multi-year environmental initiative and established three strategic goals to define our Energy Conservation Measures and Green House Gas reduction activities through 2024. These initiatives have already resulted in reductions in energy and water usage. Adtalem has also implemented various initiatives to reduce waste and protect the ecosystems surrounding our offices and campuses. Our TEACH values—Teamwork, Energy, Accountability, Community, and Heart— shape how we work together to fulfill our promise to students, members, and each other. Adtalem has created diversity and inclusion councils and task forces at its healthcare and medical institutions. These taskforces are addressing racism as a public health crisis. During 2021, diversity, equity and inclusion threads were woven into our healthcare institutions’ curriculums and activities. We are committed to continuously reviewing the components of our educational programs, systems and processes to ensure we are addressing systemic bias within our institutions, as well as partnering with organizations that share our values to collectively address these challenges and have an intentional impact on the broader healthcare industry. Since 2016, under the leadership of Lisa Wardell, our Executive Chairman and former CEO, we have notably increased female and multicultural representation on our Board. We continue to engage in active Board refreshment and added three new directors in 2021 who bring significant healthcare and marketing expertise and deep knowledge of our operations and strategy. Community Investment Expanding Educational Access Empower Scholarship Fund We contribute to the well-being of local communities through support of philanthropic organizations and student, faculty, and employee volunteer efforts. Through corporate giving efforts, Adtalem provided over $354,000 to global community and civic partners in fiscal year 2021. Independent from the corporate giving efforts, the Adtalem Global Education Foundation awarded grants totaling over $893,000. Adtalem has created sustainable strategies to engage and support students from historically underrepresented groups and our intentional approach continues to yield industry-leading results. In 2021, 84% of the total student population in our four degree-conferring institutions identified as female and 48% as ethnically diverse. Adtalem’s medical institutions graduate more than 100 Black/African American medical students annually, more than any U.S. medical school. The Empower Scholarship Fund increased its total dollars and number of recipients by awarding $290,500 in scholarships to 111 students, including 32 first-generation college students and 14 single parents. The fund strives to keep education within reach by providing financial support to qualifying students. Established in 2000, the fund provides scholarships (restricted and unrestricted) to current students, especially those with the greatest need who have established a successful academic track record. 9 2021 Proxy StatementProxy Summary DIVERSITY AND INCLUSION At Adtalem, we are committed to driving diversity at the top and creating an inclusive culture throughout the organization. To us, diversity and inclusion needs to be intentional to be impactful. We don’t just welcome differences, we celebrate them. In fact, we believe bringing together diverse teams and innovative ideas is the best way to serve our diverse students and members, and we work collaboratively, committed to the idea that inclusion leads to innovation and high performance. BOARD DATA The composition of our Board reflects our commitment to diversity. LEADERSHIP DATA The Adtalem senior leadership team is over 44% diverse when considering gender and ethnicity. Female Ethnically Diverse Lived and Worked Outside the U.S. Female Ethnically Diverse Gender or Ethnically Diverse 36.3% 54.5% 18.1% 22.2% 22.2% 44.4% EMPLOYEE DATA Our global employee base is predominantly female and includes a strong minority representation. STUDENT DATA The student population at our Title IV institutions is similarly diverse in gender and ethnicity. Female 79% Ethnically Diverse 36% Female 84% Ethnically Diverse 48% Please note: Board data is as of October 1, 2021; leadership and employee data is as of October 1, 2021 and represents those who chose to report. Student data is for fall 2021 enrollment at Adtalem’s Title IV institutions. 10 Adtalem Global Education Inc.Table of Contents 1 MESSAGE FROM OUR EXECUTIVE CHAIRMAN OF THE BOARD 3 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 4 PROXY SUMMARY 4 Our Board of Directors Board Highlights 5 Corporate Governance Highlights 6 Executive Compensation Highlights 8 Sustainability and Community Relations 9 Diversity and Inclusion 10 12 13 24 24 26 31 35 36 38 38 38 39 40 42 42 61 62 62 64 66 68 68 69 69 72 73 73 73 74 PROPOSAL NO. 1 ELECTION OF DIRECTORS Board Composition Director Nominating Process Board Succession Planning Board Structure and Operations Key Board Responsibilities Board Practices and Policies Director Compensation PROPOSAL NO. 2 RATIFY SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Selection and Engagement of Independent Registered Public Accounting Firm Pre-Approval Policies Audit Fees and Other Fees Audit and Finance Committee Report PROPOSAL NO. 3 SAY-ON-PAY: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (“NEOs”) Compensation Discussion & Analysis Compensation Committee Report EXECUTIVE COMPENSATION TABLES 2021 Summary Compensation Table 2021 Grants of Plan-Based Awards 2021 Outstanding Equity Awards at Fiscal Year-End 2021 Options Exercises and Stock Vested 2021 Nonqualified Deferred Compensation Deferred Compensation Plan 2021 Potential Payments Upon Termination or Change-In-Control CEO Pay Ratio VOTING SECURITIES AND PRINCIPAL HOLDERS Equity Compensation Plan Information Security Ownership of Certain Beneficial Owners Security Ownership by Directors and Executive Officers ADDITIONAL INFORMATION Voting Instructions Voting Information Proxy Solicitation Shareholder Proposals for 2022 Annual Meeting Availability of Form 10-K Householding Delinquent Section 16(a) Reports 75 75 76 77 77 78 78 78 78 Other Business A-1 APPENDIX A – SUMMARY OF SPECIAL ITEMS EXCLUDED FOR PERFORMANCE ASSESSMENT 11 2021 Proxy StatementPROPOSAL NO. 1 Election of Directors The Board has nominated all of Adtalem’s eleven sitting directors and recommends their re-election, each for a term to expire at the 2022 Annual Meeting. All of the nominees have consented to serve as directors if elected at the Annual Meeting. It is intended that all shares represented by a proxy in the accompanying form will be voted for the election of each of Stephen W. Beard, William W. Burke, Charles DeShazer, Mayur Gupta, Donna J. Hrinak, Georgette Kiser, Lyle Logan, Michael W. Malafronte, Sharon L. O’Keefe, Kenneth J. Phelan, and Lisa W. Wardell as directors unless otherwise specified in such proxy. A proxy cannot be voted for more than eleven persons. In the event that a nominee becomes unable to serve as a director, the proxy committee (appointed by the Board) will vote for the substitute nominee that the Board designates. The Board has no reason to believe that the nominees will become unavailable for election. Each nominee for election as a director is listed below, along with a brief statement of his or her current principal occupation, business experience and other information, including directorships in other public companies held as of the date of this Proxy Statement or within the previous five years. Under the heading “Relevant Experience,” we describe briefly the particular experience, qualifications, attributes, or skills that led to the conclusion that these nominees should serve on the Board. As explained below under the caption “Director Nominating Process,” the Nominating & Governance Committee looks at the Board as a whole, attempting to ensure that it possesses the characteristics that the Board believes are important to effective governance. Approval by Shareholders The election of each of the eleven nominees for director listed below requires the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Adtalem maintains a majority voting standard for uncontested elections (where the number of nominees is the same as the number of directors to be elected), so for a nominee to be elected as a member of the Board, the nominee must receive the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Shareholders may not cumulate their votes in the election of directors. If a nominee for re-election fails to receive the requisite majority vote where the election is uncontested, such director must promptly tender his or her resignation to Adtalem’s Chairman or Adtalem’s General Counsel and Corporate Secretary, subject to acceptance by the Board. Unless otherwise indicated on the proxy, the shares will be voted FOR each of the nominees identified below. The Board of Directors recommends a vote FOR each of the nominees identified below. 12 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Proposal No. 1 Election of Directors BOARD COMPOSITION Director Nominees Stephen W. Beard, Chief Executive Officer President and CEO, Adtalem Global Education Age: 50 Director since: 2021 Career Highlights Mr. Beard was appointed Adtalem’s President and CEO and a director on our Board in September 2021. Previously, Mr. Beard served as Adtalem’s Chief Operating Officer (COO), responsible for the vision, leadership, and financial performance of Adtalem’s Financial Services vertical. In addition, Mr. Beard led the company’s strategy, corporate development, government and regulatory affairs, investor relations, communications and civic engagement activities and mobilized a variety of operational and corporate initiatives to accelerate Adtalem’s global performance. Prior to taking on the responsibility of COO in 2019 and responsibility for the Financial Services vertical in 2020, Mr. Beard served as senior vice president, general counsel and corporate secretary in 2018. Prior to Adtalem, Mr. Beard was executive vice president, chief administrative officer and general counsel of Heidrick & Struggles International, Inc. (NASDAQ:HSII), where he directed global legal operations for the company and oversaw a variety of enterprise-level functions including strategy and corporate development. Prior to joining Heidrick & Struggles, Mr. Beard was in private practice with Schiff Hardin, LLP in Chicago, where he was a member of the firm’s corporate and securities group, advising public and private companies in mergers and acquisitions, corporate finance and corporate governance matters. Mr. Beard began his legal career as a law clerk for the Honorable Frank Sullivan, Jr. (ret.), associate justice of the Indiana Supreme Court. Mr. Beard has been active in a variety of community and civic matters and currently serves on the board of the venture philanthropy fund, A Better Chicago. Mr. Beard received his bachelor’s degree from the University of Illinois at Urbana-Champaign and his juris doctor degree from the Maurer School of Law at Indiana University. Relevant Experience Mr. Beard’s experience as a senior executive and his prior service as Adtalem’s COO and General Counsel give him deep knowledge of Adtalem’s operations and strategy. Mr. Beard’s experience in refining Adtalem’s portfolio strategy, executing the DeVry University, Carrington College and Adtalem Brazil divestitures, and spearheading the acquisition of Walden University-coupled with his success in leading the Financial Services segment-have played an integral role in positioning Adtalem for long-term growth. 13 2021 Proxy StatementProposal No. 1 Election of Directors Proposal No. 1 Election of Directors William W. Burke, Lead Independent Director President and Founder, Austin Highlands Advisors, LLC Age: 62 Director since: 2017 Committees: Audit and Finance (Chair) Compensation Career Highlights Mr. Burke has been a director of Adtalem since January 2017. He has served as our Lead Independent Director since July 2019. Since November 2015, Mr. Burke has served as President of Austin Highlands Advisors, LLC, a provider of corporate advisory services. He served as Executive Vice President & Chief Financial Officer of IDEV Technologies, a peripheral vascular devices company, from November 2009 until the company was acquired by Abbott Laboratories in August 2013. From August 2004 to December 2007, he served as Executive Vice President & Chief Financial Officer of ReAble Therapeutics, a diversified orthopedic device company which was sold to The Blackstone Group in a going private transaction in 2006 and subsequently merged with DJO Incorporated in November 2007. Mr. Burke remained with ReAble Therapeutics until June 2008. From 2001 to 2004, he served as Chief Financial Officer of Cholestech Corporation, a medical diagnostic products company. Mr. Burke received his bachelor’s degree in Finance from The University of Texas at Austin and an MBA from The Wharton School of the University of Pennsylvania. Board Service Mr. Burke has served on numerous public and private company boards including serving as a board chairman and a lead independent director. He has served on the board of Tactile Systems Technology, Inc. (Nasdaq: TCMD) since 2015 and currently serves as Chairman of the Board. Since 2021, he has served on the board of directors and as chair of the audit committee of EQ Health Acquisition Corp. (NYSE:EQHA). He previously served on the board of Invuity, Inc. (acquired by Stryker Corp. in 2018), LDR Holding Corporation (acquired by Zimmer Biomet in July 2016), and Medical Action Industries (acquired by Owens & Minor in October 2014). Relevant Experience Mr. Burke’s experience as a senior executive and board member of multiple public companies, and his extensive understanding of financing, acquisition and operating strategy, enhances the Board’s capabilities from both a strategic and governance perspective. 14 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Dr. Charles DeShazer, Independent Director, Clinical Products, Google Health Age: 62 Director since: 2021 Committees: Academic Quality External Relations Career Highlights Dr. DeShazer is the Director, Clinical Products for Google Health where he helps lead the design and implementation of an intelligent suite of tools that help healthcare providers deliver better patient care. He previously was the Senior Vice President and Chief Medical Officer of Highmark, Inc., one of the largest insurance organizations in the United States from 2017 to 2021. In this role he oversaw the company’s clinical strategy, overall medical leadership and provided oversight of Highmark Inc.’s strategic direction and processes related to health care quality, efficiency and cost improvement. Additionally, as the CMO for the primary division of Highmark Health, Dr. DeShazer also interacted regularly with the smaller health division, Allegheny Health Network, as well as Penn State Health, a large academic health system governed jointly by Penn State University and Highmark Health through a significant minority ownership investment. Prior to joining Highmark, Dr. DeShazer served as the Chief Quality Officer for BayCare Health System from 2012-2016. From 2010-2012 he served as Vice President, Medical Information, Quality and Transformation for Dean Health System. Relevant Experience Dr. DeShazer’s leadership experience across the healthcare services ecosystem, coupled with his background as a board-certified M.D. in internal medicine, assists Adtalem and its Board in executing on the strategy of becoming a leading provider of workforce solutions to the rapidly evolving healthcare industry. 15 2021 Proxy StatementProposal No. 1 Election of Directors Mayur Gupta, Independent Chief Marketing & Strategy Officer, Gannett Co., Inc. Age: 44 Director since: 2021 Committees: Academic Quality (effective November 9, 2021) External Relations (effective November 9, 2021) Career Highlights Mr. Gupta is the Chief Marketing & Strategy Officer for Gannett Co., Inc. (NYSE:GCI), a subscription-led and digitally focused media and marketing solutions company (“Gannett”). Mr. Gupta oversees the marketing strategy and subscription-based transformation for several portfolios, which include USA TODAY, local media organizations in 46 states in the U.S., and Newsquest, a wholly owned subsidiary with over 120 local media brands operating in the United Kingdom. Before assuming his current role in September 2020, Mr. Gupta served on the board of directors of Gannett since October 2019. Prior to joining Gannett, Mr. Gupta served as the Chief Marketing Officer for Freshly, a growing food-technology company, from January 2019 until September 2020, where he oversaw all consumer-faced marketing, including driving growth, building the brand, and enhancing the company’s consumer insights. Before joining Freshly, Mr. Gupta led digital initiatives at several companies, including from October 2016 to January 2019 as Vice President, Growth and Marketing at Spotify, the on-demand streaming music giant, and from August 2015 to September 2016 as Executive Vice President, Chief Marketing Officer and earlier as Senior Vice President, Omni-Channel Consumer Marketing and Head of Digital Platforms at Healthgrades, a healthcare scheduling company. From August 2012 through July 2015, Mr. Gupta was the first Chief Marketing Technologist at Kimberly-Clark, one of the largest consumer goods companies. Mr. Gupta was recently named to Forbes World’s Most Influential CMOs list for 2021. Relevant Experience Mr. Gupta’s expertise across the digital marketing space, in combination with his background in technology, will help the Board drive the Company’s next phase of growth and impact. Mr. Gupta’s ability to implement data-driven strategies to drive business growth and increase shareholder value will assist the Company in developing its own growth plans. 16 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Donna J. Hrinak, Independent Senior Vice President, Corporate Affairs, Royal Caribbean Group Age: 70 Director since: 2018 Committees: Nominating & Governance (Chair) Audit and Finance Career Highlights Ms. Hrinak has been a director of Adtalem since October 2018. Ms. Hrinak has served as Senior Vice President, Corporate Affairs, Royal Caribbean Group since August 2020. Previously she served as President of Boeing Latin America (2011-2020) where she opened Boeing’s first three offices in the region and oversaw all aspects of operations, from commercial and defense product sales to research and technology. She came to Boeing from her role as Vice President Global Public Policy and Governmental Affairs/Vice President for Public Policy at PepsiCo (2008-2011) and also held a role at Kraft Foods (2006-2008), where she managed the Latin American and European Corporate Affairs teams. Prior to that, she served as a Senior Counselor for Trade and Competition at the law firm of Steel Hector & Davis and held a role with the strategic advisory firm of Kissinger McLarty Associates. Before entering the private sector, Ms. Hrinak was a career officer in the U.S. Foreign Service, and served as U.S. Ambassador to Brazil, Venezuela, Bolivia, and the Dominican Republic, as well as Deputy Assistant Secretary in the State Department. She holds a bachelor’s degree in Multidisciplinary Social Science from Michigan State University and also attended The George Washington University and the University of Notre Dame School of Law. Relevant Experience Ms. Hrinak’s extensive experience at a senior level in both the public and private sectors overseeing complex multi- cultural organizations brings insight to the Board directly applicable to the organization’s international scope. 17 2021 Proxy StatementProposal No. 1 Election of Directors Georgette Kiser, Independent Operating Executive, The Carlyle Group Age: 53 Director since: 2018 Committees: External Relations (Chair) Nominating & Governance Career Highlights Ms. Kiser has been a director of Adtalem since May 2018. Ms. Kiser is an Operating Executive at The Carlyle Group where she is advising across the firm and in particular, the firm’s Global Technology and Solutions organization. Ms. Kiser previously served as the firm’s Managing Director and Chief Information Officer. Prior to her role at The Carlyle Group, she was in various executive roles at T. Rowe Price from 1996 to 2015, including Vice President and Head of Enterprise Solutions and Capabilities. She was a consultant and Software Engineer at Martin Marietta Management Data Systems from 1993 to 1995, and a Software Design Engineer in the Aerospace Division of the General Electric Company from 1989 to 1993. She received a bachelor’s degree in Mathematics with a concentration in Computer Science from the University of Maryland, a M.S. in Mathematics from Villanova University, and an MBA from the University of Baltimore. Board Service Starting in 2019, Ms. Kiser has served on the boards of Aflac (NYSE: AFL), a leading supplemental insurer, Jacobs (NYSE: JEC), a leading, global professional services company, and NCR Corporation (NYSE: NCR), an American software, professional services, consulting and tech company. She serves on the audit and risk and compensation committees for Aflac, the compensation committee and nominating and corporate governance committee for Jacobs, and on the governance committee and chair of the risk committee at NCR. Relevant Experience Ms. Kiser’s experience in information technology at the senior leadership level in organizations with an international reach brings expertise to Adtalem which will enhance both the Board’s oversight of its business as well as Adtalem’s internal technology matters. 18 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Lyle Logan, Independent Executive Vice President and Managing Director, The Northern Trust Company Age: 62 Director since: 2007 Committees: Academic Quality (Chair) Compensation Nominating & Governance Career Highlights Mr. Logan has been a director of Adtalem since November 2007. Mr. Logan has been Executive Vice President and Managing Director, Global Financial Institutions Group of The Northern Trust Company since 2009. He previously served as Senior Vice President and Head of Chicago Private Banking within the Personal Financial Services business unit of The Northern Trust Company from 2000 to 2005. Prior to 2000, he was Senior Vice President in the Private Bank and Domestic Portfolio Management Group at Bank of America. Mr. Logan received his bachelor’s degree in Accounting and Economics from Florida A&M University and his Master’s Degree in Finance from the University of Chicago Graduate School of Business. Board Service Mr. Logan has served as a director of Heidrick & Struggles International Inc. (Nasdaq: HSII), an international executive search firm, since 2015. In addition to being the lead independent director at Heidrick & Struggles International Inc., he also serves on its audit and finance committee and nominating and board governance committee. Relevant Experience Mr. Logan’s experience in senior leadership positions with leading banking and investment management organizations adds perspective and an understanding of global investment markets to the Board’s consideration of finance and investment management matters. 19 2021 Proxy StatementProposal No. 1 Election of Directors Michael W. Malafronte, Independent Former Managing Partner, International Value Advisers and President of IVA Funds Age: 47 Director since: 2016 Committees: Compensation (Chair) Audit and Finance Career Highlights Mr. Malafronte has been a director of Adtalem since June 2016. Mr. Malafronte is a Founding Partner of International Value Advisers, LLC (“IVA”) and served as Managing Partner for 13 years until December 2020. He was responsible for overseeing all aspects of IVA, including company strategy and managing resources. He also served as President of IVA Funds. Prior to founding IVA in 2007, Mr. Malafronte was a Senior Vice President at Arnhold and S. Bleichroeder Advisers, LLC where he worked for two years as a senior analyst for the First Eagle Funds, owned by Arnhold & S. Bleichroeder Advisers, LLC. There he worked under Charles de Vaulx and Jean-Marie Eveillard within the Global Value Group for the value funds, including the First Eagle Overseas, Global, U.S. Value Funds as well as the offshore funds, inclusive of the Sofire Fund Ltd. Similarly, he was responsible for covering the oil and gas, media, real estate, financial services, and retail industries on a global basis, as well as companies within the United Kingdom, Germany, and Japan. Moreover, Mr. Malafronte was responsible for covering the larger names within the portfolio such as Pargesa Holdings, ConocoPhillips, Petroleo Brasileiro, SK Corp., News Corp., Dow Jones, and Comcast. Prior to the First Eagle Funds, Mr. Malafronte worked for nine years as a Portfolio Manager at Oppenheimer & Close, a dually-registered broker dealer and investment adviser; an adviser on three domestic hedge funds, one offshore partnership and a registered investment adviser and broker dealer. While at Oppenheimer & Close, Mr. Malafronte assisted in the launch of a domestic hedge fund in 1996 and an offshore partnership in 1998. Mr. Malafronte was responsible for all facets of portfolio management for the investment partnerships, including idea generation, in-depth research, and stock selection. In addition to that, he was also responsible for hiring and training both operations staff and research analysts. Mr. Malafronte earned his bachelor’s degree in Finance from Babson College. Board Service Mr. Malafronte has previously served on the boards of two publicly traded companies: Bresler & Reiner Inc. (2002-2008) and Century Realty Trust (2005-2006). Relevant Experience Mr. Malafronte’s experience as a financial analyst covering institutions globally, and as a founder of a global investment firm, provides the Board with a firm understanding of Adtalem’s shareholders’ perspective and deeply informs Adtalem’s financial planning. 20 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Sharon L. O’Keefe, Independent Retired President, University of Chicago Medical Center Age: 69 Director since: 2020 Committees: Academic Quality Nominating & Governance Career Highlights Ms. O’Keefe served as the President of the University of Chicago Medical Center from February 2011 through July 2020. From April 2009 through February 2011, Ms. O’Keefe served as President of Loyola University Medical Center. Prior to her role at Loyola, she served from July 2002 to April 2009 as Chief Operating Officer for Barnes Jewish Hospital, a member of BJC Healthcare, St. Louis. In addition, Ms. O’Keefe has served in a variety of senior management roles at The Johns Hopkins, Montefiore Medical Center, University of Maryland Medical System, and Beth Israel Deaconess Medical Center in Boston, a teaching affiliate of Harvard Medical School. She has also served as a healthcare consultant with Ernst & Young. In addition, Ms. O’Keefe has served on the National Institutes of Health Advisory Board for Clinical Research, the Finance Committee of the National Institutes of Health Advisory Board, the Board of Trustees of the Illinois Hospital Association, and an Examiner for the Malcolm Baldridge National Quality Award. Ms. O’Keefe holds a M.S. degree in Nursing from Loyola University of Chicago and a B.S. degree in Nursing from Northern Illinois University. Board Service Since 2012 Ms. O’Keefe has served as a director of Vocera Communications Inc. (NYSE: VCRA), a provider of clinical communications and workforce solutions, where she is a member of the compensation committee. Ms. O’Keefe previously served on the board of Aviv Reit Inc. from 2013 through 2015. Relevant Experience Ms. O’Keefe’s prior leadership roles at University of Chicago Medical Center and Loyola University of Chicago Medical Center provide the Board with insights into how Adtalem can best serve the needs of our employer partners and drive superior student outcomes for our healthcare and medical students and graduates. 21 2021 Proxy StatementProposal No. 1 Election of Directors Kenneth J. Phelan, Independent Former Chief Risk Officer, United States Department of Treasury Age: 62 Director since: 2020 Committees: Compensation External Relations Career Highlights Mr. Phelan served as the first Chief Risk Officer for the United States Department of Treasury (“Treasury”) from 2014 to 2019. As Chief Risk Officer of the Treasury, he was responsible for establishing and building the Treasury’s Office of Risk Management to provide senior Treasury and other administration officials with analysis of key risks including credit, market, liquidity, operational, governance, and reputational risk. From 2018 to 2019, Mr. Phelan also served as Acting Director for the Office of Financial Research, an independent bureau within the Treasury charged with supporting the Financial Stability Oversight Council and conducting research about systemic risk. Prior to joining the Treasury, Mr. Phelan served as the chief risk officer for RBS America from 2011 to 2014, as chief risk officer for Fannie Mae from 2009 to 2011, and as chief risk officer for Wachovia Corporation from 2008 to 2009. Earlier in his career, Mr. Phelan held a variety of senior risk roles at JPMorgan Chase, UBS, and Credit Suisse. Mr. Phelan holds a bachelor’s degree in Business Administration and Finance from Old Dominion University, a M.S. in Economics from Trinity College, and a J.D. from Villanova University. Board Service Since 2019 Mr. Phelan has served as a director of Huntington Bancshares, Inc. (NASDAQ. HBAN), a regional bank holding company whose primary subsidiary is The Huntington National Bank. Mr. Phelan is a member of Huntington’s risk oversight and compensation committees. Relevant Experience Mr. Phelan’s expansive financial and risk management experience assists the Board in its oversight of our risk portfolio and adds valuable perspective as we enhance and expand our global financial services offerings to serve customers’ governance, risk, and compliance needs. 22 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Lisa W. Wardell, Executive Chairman Executive Chairman of the Board, Adtalem Global Education Age: 52 Director since: 2008 Career Highlights Ms. Wardell has been a director of Adtalem since November 2008. She served as the President and CEO of Adtalem from 2016 through September 2021. She was appointed Chairman of the Board in 2019 and Executive Chairman in September 2021. Ms. Wardell was previously the Executive Vice President and Chief Operating Officer of The RLJ Companies (“RLJ”), a diversified holding company with portfolio companies in the financial services, asset management, real estate, hospitality, media and entertainment, and gaming industries for 12 years. In her role at RLJ, Ms. Wardell closed $40 million in automotive dealership acquisitions and served as the Executive Vice President of RML Automotive, the 19th largest automotive dealership group in the U.S. She served on the Board of Naylor, Inc., an RLJ Equity Partners’ portfolio company. In addition, Ms. Wardell served as the primary RLJ fundraiser for a $610 million money management fund and managed a hotel development project in West Africa. In 2010, Ms. Wardell served as the Chief Financial Officer of a special purpose acquisition company that formed RLJ Entertainment, Inc., where she subsequently served as a director. Prior to joining RLJ, Ms. Wardell was a Principal at Katalyst Venture Partners, a private equity firm that invested in start-up technology companies in the media and communications industries from 1999 to 2003. From 1998 to 1999, Ms. Wardell worked as a senior consultant for Accenture, a global management consulting, technology services, and outsourcing company. From 1994 to 1996, Ms. Wardell was an attorney with the Federal Communications Commission where she worked in the commercial wireless division. Ms. Wardell received her undergraduate bachelor’s degree in Political Science and African studies from Vassar College, her J.D. from Stanford University, and her Master’s Degree in Finance and Entrepreneurial Management from The Wharton School of Business at the University of Pennsylvania. Among numerous recognitions, she was selected by Black Enterprise magazine as one of the “300 Most Powerful Executives in Corporate America” (2017) and has been featured on Savoy Magazine’s™ Power 300: Most Influential Black Corporate Directors list (2017 and 2016). Ms. Wardell is often featured for her strategic insights by media outlets, including Bloomberg, Fortune, Politico, Investor’s Business Daily, Inside Higher Ed, and the Chronicle of Higher Education, among others. Board Service In addition to her work at Adtalem, Ms. Wardell has served on the board of American Express (NYSE: AXP), a Fortune 100 company, since 2021. She is also a vice chair, executive committee of The Business Council, and is a member of the Executive Leadership Council, CEO Action for Diversity and Inclusion and the Fortune CEO Initiative. Ms. Wardell served on the board of directors of Christopher and Banks, Inc. from 2011 to 2017. She also served as a director of RLJ Entertainment, Inc. from 2012 to 2015. Relevant Experience Ms. Wardell’s prior role as CEO of Adtalem and her current responsibilities as Executive Chairman give her deep and current knowledge of Adtalem’s academic and business operations and strategy and make her an essential member of the Board. Additionally, her experience as a senior business executive in private equity, operations, and strategy and financial analysis, including mergers and acquisitions, together with her previous experience with a federal regulatory agency, give her important perspectives on the issues that come before the Board. These include business, strategic, financial, and regulatory matters. 23 2021 Proxy StatementProposal No. 1 Election of Directors DIRECTOR NOMINATING PROCESS The Nominating & Governance Committee is responsible for making recommendations of nominees for directors to the Board. The Nominating & Governance Committee’s goal is to put before our shareholders candidates who, with the incumbent directors, will constitute a board that has the characteristics necessary to provide effective oversight for the growing, complex, global educational operations of Adtalem and reflect the broad spectrum of students and members that Adtalem serves. The Nominating & Governance Committee seeks a diversity of thought, background, experience, and other characteristics in its candidates. To this end, Adtalem’s Governance Principles provide that nominees are to be selected on the basis of, among other things, knowledge, experience, skills, expertise, diversity, personal and professional integrity, business judgment, time availability in light of other commitments, absence of conflicts of interest, and such other relevant factors that the Nominating & Governance Committee considers appropriate in the context of the interests of Adtalem, its Board and its shareholders. BOARD SUCCESSION PLANNING We are committed to ensuring that our Board represents the right balance of experience, tenure, independence, age, and diversity. Additionally, our Governance Principles provide that a director is required to retire from our Board when he or she reaches the age of 72, although on the recommendation of the Nominating & Governance Committee, our Board may waive this requirement if a waiver is in the best interests of Adtalem. Over the last six years, our Nominating & Governance Committee has led the gradual transformation of our Board, with nine of our eleven directors joining the Board since 2015. When considering nominees, the Nominating & Governance Committee seeks to ensure that the Board as a whole possesses, and individual members possess at least two of, the following characteristics or expertise in the following areas: • Leadership • Strategic vision • Business judgment • Management experience BOARD REFRESHMENT 11 New Directors 2015 2016 2017 2018 2020 2021 8 Retirements 2016 2017 2018 2019 2020 2021 ANNUAL PROCESS FOR NOMINATION 1 Identify Candidates • Directors • Management • Shareholders • Independent Search Firm • Experience as a CEO or similar function • Experience as a CFO or accounting and 2 Nominating & Governance Committee Review • Review qualifications finance expertise • Industry knowledge • Healthcare, medical, and related education and services • Education sector and accreditation • Financial services • Mergers, acquisitions, joint ventures, and strategic alliances • Public policy experience, particularly in higher education • Regulatory experience • Human capital management and/or compensation expertise • Global markets and international experience • Corporate governance 24 • Consider diversity • Examine Board composition and balance • Review independence and potential conflicts • Meet with potential nominees 3 Recommend Slate 4 Full Board Review and Nomination 5 Shareholder Review and Election Adtalem Global Education Inc.Proposal No. 1 Election of Directors The Nominating & Governance Committee has implemented this policy by evaluating each prospective director nominee as well as each incumbent director on the criteria described above, and in the context of the composition of the full Board, to determine whether she or he should be nominated to stand for election or re-election. In screening director nominees, the Nominating & Governance Committee also reviews potential conflicts of interest, including interlocking directorships and substantial business, civic, and social relationships with other members of the Board that could impair the prospective nominee’s ability to act independently. IDENTIFICATION AND CONSIDERATION OF NEW NOMINEES In identifying potential nominees and determining which nominees to recommend to the Board, the Nominating & Governance Committee has retained the advisory services of Russell Reynolds Associates, an international executive search firm. In connection with each vacancy, the Nominating & Governance Committee develops a specific set of ideal characteristics for the vacant director position. The Nominating & Governance Committee looks at director candidates that it has identified and any identified by shareholders on an equal basis using these characteristics and the general considerations identified above. SHAREHOLDER NOMINATIONS The Nominating & Governance Committee will not only consider nominees that it identifies, but will consider nominees submitted by shareholders in accordance with the advance notice process for shareholder nominations identified in the By-Laws. Under this process, all shareholder nominees must be submitted in writing to the attention of Adtalem’s General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661, not less than 90 days prior to the anniversary of the immediately preceding annual meeting of shareholders. As a result, a shareholder nomination must be submitted by August 12, 2022. Such shareholder’s notice shall be signed by the shareholder of record who intends to make the nomination (or his duly authorized proxy) and shall also include, among other things, the following information: • the name and address, as they appear on Adtalem’s books, of such shareholder and the beneficial owner or owners, if any, on whose behalf the nomination is made; • the number of shares of Adtalem’s Common Stock which are beneficially owned by such shareholder or beneficial owner or owners; • a representation that such shareholder is a holder of record entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to make the nomination; • the name and residence address of the person or persons to be nominated; • a description of all arrangements or understandings between such shareholder or beneficial owner or owners and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination is to be made by such shareholder; • such other information regarding each nominee proposed by such shareholder as would be required to be disclosed in solicitations of proxies for elections of directors, or would otherwise be required to be disclosed, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any information that would be required to be included in a proxy statement filed pursuant to Regulation 14A had the nominee been nominated by the Board; and • the written consent of each nominee to be named in a proxy statement and to serve as a director if so elected. In addition to candidates submitted through this advance notice By-Law process for shareholder nominations, shareholders may also request that a director nominee be included in Adtalem’s proxy materials in accordance with the proxy access provision in the By-Laws. Any shareholder or group of up to 20 shareholders holding both investment and voting rights to at least 3% of Adtalem’s outstanding Common Stock continuously for at least three years may nominate the greater of (i) two or (ii) 20% of the Adtalem directors to be elected at an annual meeting of shareholders. Such requests must be received not less than 120 days nor more than 150 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. As a result, any notice given by or on behalf of a shareholder pursuant to these provisions of the By-Laws (and not pursuant to Rule 14a-18 of the Exchange Act) must be received no earlier than June 13, 2022 and no later than July 13, 2022. However, if we hold our 2022 Annual Meeting of Shareholders more than 30 days from the first anniversary of this year’s Annual Meeting, then in order for notice by the shareholder to be timely, such notice must be received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. 25 2021 Proxy StatementProposal No. 1 Election of Directors In addition to candidates submitted through the By-Laws process for shareholder nominations, shareholders may also recommend candidates by following the procedures set forth below under the caption “Communications with Directors.” Director Independence The Board annually reviews the continuing independence of Adtalem’s non-employee directors under applicable laws and rules of the New York Stock Exchange (“NYSE”). The Board, excluding any director who is the subject of an evaluation, reviews and evaluates director transactions or relationships with Adtalem, including the results of any investigation, and makes a determination with respect to whether a conflict or violation exists or will exist or whether a director’s independence is or would be impaired. The Board has considered whether each director has any material relationship with Adtalem (either directly or as a partner, shareholder, or officer of an organization that has a relationship with Adtalem) and has otherwise complied with the requirements for independence under the applicable listing standards of the NYSE. As a result of this review, the Board affirmatively determined that, with the exception of Ms. Wardell and Mr. Beard, all of Adtalem’s current directors, and all of Adtalem’s former directors who served as a director during fiscal year 2021, are “independent” of Adtalem and its management within the meaning of the applicable NYSE rules. Mr. Beard is considered an inside director because of his employment as President and CEO of Adtalem. Ms. Wardell is considered an inside director because of her previous employment as President and CEO of Adtalem. The Board considered the relationship between Adtalem and The Northern Trust Company, a wholly-owned subsidiary of Northern Trust Corporation. Adtalem maintains depository accounts with The Northern Trust Company and conducts a significant portion of its disbursement activity through these accounts. Mr. Logan, one of our directors, is Executive Vice President and Managing Director, Global Financial Institutions Group, with Northern Trust Global Investments, a business unit of The Northern Trust Company. In fiscal year 2021, Adtalem incurred approximately $184,000 in fees to The Northern Trust Company, which were partially offset against compensating balance credits earned on an average monthly outstanding balance of approximately $23 million. The Board concluded, after considering (i) that the relationship with The Northern Trust Company predates Mr. Logan joining the Board, (ii) that Mr. Logan has had no involvement in the Adtalem banking transactions, (iii) the lack of materiality of the transactions to Adtalem and to The Northern Trust Company, and (iv) the fact that the terms of the transactions are not preferential either to Adtalem or to The Northern Trust Company, that the relationship is not a material one for purposes of the NYSE listing standards and would not influence Mr. Logan’s actions or decisions as a director of Adtalem. BOARD STRUCTURE AND OPERATIONS Summary of Board and Committee Structure Adtalem’s Board held 17 meetings during fiscal year 2021, consisting of 5 regular meetings and 12 special meetings. Currently, the Board has five standing committees: Academic Quality, Audit and Finance, Compensation, External Relations, and Nominating & Governance. The following table identifies each standing committee, its members and chairs, its key responsibilities and the number of meetings held during fiscal year 2021. In her role as Executive Chairman, Ms. Wardell is an ex officio member of each committee. Current copies of the charters of each of these committees, a current copy of Adtalem’s Governance Principles, and a current copy of Adtalem’s Code of Conduct and Ethics can be found on Adtalem’s website, www.adtalem.com, and are also available in print to any shareholder upon request from Adtalem’s General Counsel and Corporate Secretary, 500 West Monroe Street, Suite 2800, Chicago, IL 60661. The Board has determined that each of the members of the Audit and Finance, Compensation, and Nominating & Governance committees is independent within the meaning of applicable laws and NYSE listing standards in effect at the time of determination. The standing Audit and Finance Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act, the rules and regulations of the SEC, and the listing standards of the NYSE. 26 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Proposal No. 1 Election of Directors Academic Quality Committee Members* Lyle Logan (Chair) Charles DeShazer Mayur Gupta Sharon L. O’Keefe Meetings in fiscal year 2021 4 * Mr. DeShazer was appointed to the Committee on April 2, 2021. Mr. Gupta will join the Committee effective November 9, 2021. Mr. White served on the Committee until his retirement from the Board on April 30, 2021. Key Responsibilities • Supports improvement in academic quality and assures that the academic perspective is heard and represented at the highest policy-setting level and incorporated in all of Adtalem’s activities and operations • Reviews the academic programs, policies, and practices of Adtalem’s institutions • Evaluates the academic quality and assessment process and evaluates curriculum and programs Audit and Finance Committee Members Meetings in fiscal year 2021 William W. Burke (Chair) Donna J. Hrinak Michael W. Malafronte Key Responsibilities 8 Report Page 40 • Monitors Adtalem’s financial reporting processes, including its internal control systems and the scope, approach, and results of audits • Selects and evaluates Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders • Reviews and recommends to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies • Provide oversight of Adtalem’s policies and processes established by management to identify, assess, monitory, manage and control technology, cyber, information and other security risks • Reviews and approves any potential related party transactions The Board has determined that Mr. Burke and Mr. Malafronte are qualified as audit committee financial experts. 27 2021 Proxy StatementProposal No. 1 Election of Directors Compensation Committee Members Meetings in fiscal year 2021 Michael W. Malafronte (Chair) William W. Burke Lyle Logan Kenneth J. Phelan 5 Key Responsibilities Report Page 61 • Oversees all compensation practices and reviews eligibility criteria and award guidelines for Adtalem’s compensation program • Reviews and approves, following discussions with the other independent members of the Board, CEO annual goals and objectives • Evaluates the CEO’s performance against established annual goals and objectives • Recommends CEO compensation to the other independent members of the Board for approval • Reviews and approves recommendations made by the CEO for executive officers, including base salary, annual incentive, and equity compensation • Reviews and approves the total pay-out of short and long term incentive pools, including annual grants of equity awards • Reviews and recommends to the Board compensation paid to non-employee directors External Relations Committee Members* Meetings in fiscal year 2021 Georgette Kiser (Chair) Charles DeShazer Mayur Gupta Kenneth J. Phelan 4 * Mr. DeShazer was appointed to the Committee on April 2, 2021. Mr. Gupta will join the Committee effective November 9, 2021. Mr. Logan and Ms. O’Keefe served on the Committee until April 2, 2021. Key Responsibilities • Provides awareness and oversight of Adtalem’s external relations strategy, policy, and practice • Monitors, analyzes, and effectively manages legislative and regulatory policy trends, issues, and risks • Develops recommendations to the Board with regard to formulating and adopting policies, programs, and communications strategy related to legislative, regulatory, and reputational risk • Oversees risks and exposures related to higher education public policy, as well as compliance with laws and regulations applicable to Adtalem • Provides oversight regarding significant public policy issues including environmental, health and safety, and public and community affairs • Reviews Adtalem’s sustainability strategy, including initiatives and policies relating to environmental stewardship, corporate social responsibility, and corporate culture 28 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Nominating & Governance Committee Members* Meetings in fiscal year 2021 Donna J. Hrinak (Chair) Georgette Kiser Lyle Logan Sharon O’Keefe 5 * Ms. Hrinak was appointed Chair of the Committee on April 2, 2021. Mr. White served on the Committee until his retirement from the Board on April 30, 2021. Mr. Logan and Ms. O’Keefe were appointed to the Committee on April 2, 2021. Key Responsibilities • Reviews Board and committee structures and leads the Board self-evaluation process • Assesses Board needs and periodically conducts director searches and recruiting to ensure appropriate Board composition • Recommends candidates for nomination as directors to the Board • Oversees and conducts planning for CEO and director succession and potential related risks • Recommends governance policies and procedures Board Leadership Structure Pursuant to our Governance Principles, the Board believes that it should be free to make its selection of the Chairman of the Board and the CEO in the way that it deems best for Adtalem and its shareholders at any given time. To ensure continued Board independence, the Board has adopted a policy that, in the event the Chairman of the Board and CEO roles are combined, or the Chairman of the Board is not otherwise independent, the Board shall appoint a Lead Independent Director. In July 2019, the Board elected Lisa W. Wardell, who has served on our Board since November 2008 and as our President and CEO since May 2016, as Chairman of the Board. In accordance with our Governance Principles, the Board concurrently appointed William W. Burke to serve as our Lead Independent Director. In evaluating the Board’s leadership structure, the Board considered the relevant merits of combining the roles of Chairman of the Board and Chief Executive Officer and appointing a strong Lead Independent Director, compared with keeping the roles of Chairman of the Board and CEO separate. The Board concluded that Ms. Wardell was the person best suited to serve as Chairman of the Board during fiscal year 2021, providing consistent leadership, alignment between the Board and management, and a unified voice for Adtalem as it continues its transformation to a leading workforce solutions provider. In addition, the Board reaffirmed its commitment to independent board leadership by appointing Mr. Burke as our Lead Independent Director. The Board reviews its leadership structure periodically and as circumstances warrant. On September 8, 2021, Mr. Beard was appointed President and CEO and Ms. Wardell was appointed Executive Chairman of the Board. The Board separated the roles of Chairman and CEO at this time to allow our CEO to focus on strategic imperatives, including the integration of Walden University and continuing to drive our business transformation efforts. Meanwhile, in her role as Executive Chairman, Ms. Wardell will focus on leading the Board, the strategic review of Adtalem’s Financial Services business, and furthering Adtalem’s Global Legislative Agenda. Mr. Burke continues to serve as our Lead Independent Director. During fiscal year 2021, the Board met in executive session without employee directors or other employees present at each regular Board meeting. Mr. Burke, as Adtalem’s Lead Independent Director, presided over these sessions. In furtherance of our Board’s role in overall strategy and succession planning, our Lead Independent Director actively engages with our Executive Chairman or Chairman/CEO, as the case may be, on such matters. In addition, our Governance Principles provide that the Lead Independent Director: • sets the agenda for, calls meeting of and leads executive sessions of the independent directors and reports to the Executive Chairman of the Board, as appropriate, concerning such meetings; • acts as a liaison between the Executive Chairman of the Board and the independent directors; • advises the Executive Chairman of the Board as to the quality, quantity, and timeliness of the flow of information from management that is necessary for the independent directors to effectively and responsibly perform their duties; 29 2021 Proxy StatementProposal No. 1 Election of Directors • when appropriate, makes recommendations to the Executive Chairman of the Board about calling full meetings of the Board; • serves as a resource to consult with the Executive Chairman of the Board and other Board members on corporate governance practices and policies and assumes the primary leadership role in addressing issues of this nature if, under the circumstances, it is inappropriate for the Executive Chairman of the Board to assume such leadership; and • performs such other duties as requested by the Board or Nominating & Governance Committee and as set forth in the Governance Principles. OUR LEAD INDEPENDENT DIRECTOR During his career, Mr. Burke has served in executive leadership roles at several companies and, during his service on multiple public company boards, has served as a lead independent director, board chairman, audit committee chairman and compensation committee chairman. Mr. Burke also continues to serve as Chair of our Audit and Finance Committee. Director Attendance During fiscal year 2021, our Board met seventeen (17) times. Each of Adtalem’s directors attended at least 93% of the meetings of the Board and Board committees on which they served that occurred during their respective time of service on the Board in fiscal year 2021. All of our directors who were directors at the time were in attendance at the 2020 Annual Meeting of Shareholders, held virtually in November 2020. Our Board encourages all of its members to attend the Annual Meeting but understands there may be situations that prevent such attendance. Director Continuing Education Members of the Board are encouraged to participate in continuing education and enrichment classes and seminars. During fiscal year 2021, the following directors attended the following classes and seminars: (i) Mr. Burke is National Association of Corporate Directors (“NACD”) Directorship Certified. NACD Directorship Certified directors establish themselves as committed to continuing education on emerging issues and helping to elevate the profession of directorship. Mr. Burke also participates in the PwC Corporate Directors Exchange which aims to give Fortune 1000 directors the tools to lead for long-term success, and the NACD Advanced Director Professionalism course; (ii) Ms. Kiser is a NACD Board Leadership Fellow and attended NACD seminars, including the ESG Continuous Learning Cohort and The Boards Role in Driving Diversity and Inclusion; (iii) Ms. O’Keefe attended NACD seminars on Top Compensation Committee Concerns; and The Future of Healthcare. Board Self-Evaluation Each year our Board undertakes a self-evaluation process to critically evaluate its performance and effectiveness. Additionally, each committee conducts a self-evaluation to monitor its performance and effectiveness. The process is coordinated by Chairman and the chair of the Nominating & Governance Committee using an independent third-party to conduct the evaluation process. Board and committee members are asked to provide commentary about a variety of topics, including the following: overall Board performance, including strategy, challenges and opportunities; Board and committee meeting logistics and materials; Board and committee culture; and human capital and succession planning. The results of the evaluations are aggregated and summarized by the independent third party and discussed at Board and committee meetings. 30 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Proposal No. 1 Election of Directors KEY BOARD RESPONSIBILITIES Strategic Oversight The Board has an active role in our overall strategies. The Board actively reviews and provides guidance on Adtalem’s long-term strategies and annual operating plan. Management reports its progress in executing on Adtalem’s strategies and operating plan throughout the year. In addition, throughout the year, segment leadership will report to the Board regarding individual segment strategies and operating plans. While our External Relations Committee has primary responsibility to review and provide oversight to management on our ESG strategy, our Audit and Finance and Nominating & Governance Committees, along with the full Board, also review and provide oversight on our ESG strategies. Risk Oversight Adtalem’s full Board is responsible for assessing major risks facing Adtalem and overseeing management’s plans and actions directed toward the mitigation and/or elimination of such risk. The Board has assigned specific elements of the oversight of risk management of Adtalem to committees of the Board, as summarized below. Each committee meets periodically with members of management and, in some cases, with outside advisors regarding the matters described below and, in turn, reports to the full Board at least after each regular meeting regarding any findings. Managing current and emerging business risks from regulatory and market risks to global risks like a pandemic, is an important component of our governance and oversight system. Management undertakes a regular review of a broad set of risks across Adtalem’s business and operations to identify, assess, manage and monitor existing and emerging threats and opportunities. Adtalem’s Enterprise Risk Management (“ERM”) team is responsible for leading our risk management program at the enterprise level. The ERM team places particular focus on key risks that have the potential for the highest impact to Adtalem and its operations, and the highest likelihood of risk occurrence based on Adtalem’s preparedness and potential impact to Adtalem’s strategy. As part of management’s proactive risk identification and mitigation efforts, the ERM team has initiated the development of Risk Appetite Statements for each critical enterprise risk. These Risk Appetite Statements are expected to deepen our understanding of risks, enable effective action to mitigate risks and strengthen our risk culture. 31 2021 Proxy StatementProposal No. 1 Election of Directors Board/Committee Full Board Academic Quality Committee Audit and Finance Committee Compensation Committee External Relations Committee Nominating & Governance Committee Primary Areas of Risk Oversight • Reputation • Legal and regulatory compliance and ethical business practices • Strategic planning • Major organizational actions • Education public policy • Academic quality • Accreditation • Curriculum development and delivery • Student persistence • Student outcomes • Accounting and disclosure practices • Information technology • Cybersecurity • Financial controls • Risk management policies and procedures • Legal and regulatory compliance, including compliance and ethics program • Related party transactions • Capital structure • Investments • Foreign exchange • Compensation practices • Talent development • Retention • Management succession planning • Accreditation • Higher education public policy • Compliance with laws and regulations applicable to Adtalem • Sustainability, environmental, corporate social responsibility, and public and community affairs • Corporate and institutional governance structures and processes • Board composition and function • Board and Chairman of the Board succession Succession Planning and Human Capital Management The Board recognizes that one of its most important duties is to ensure continuity in Adtalem’s senior leadership by overseeing the retention and development of executive talent and planning for the effective succession of our CEO, including the recent succession of Mr. Beard as CEO, and the executive leadership team. In order to ensure that the succession planning and leadership development process supports and enhances our long-term strategic objectives, the Board periodically consults with our CEO and Chief Human Resources Officer on Adtalem’s business goals, the skills and experience necessary to help Adtalem achieve those goals, our organizational needs, our leadership pipeline, the succession plans for critical leadership positions, and our talent development and leadership initiatives. Talent and leadership development, including succession planning, is a top priority of our CEO and the senior executive team. Our CEO seeks input from members of our Board regarding candidates for executive positions and other key roles. 32 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Our Sustainability Commitment SAFEGUARDING GLOBAL HEALTH AND THE ENVIRONMENT We recognize that ESG practices and goals are at the forefront of our shareholders’ minds because our approach to these areas can provide insight into our corporate behavior, long-term performance, and sustainability. Our ESG practices support our purpose – to empower students and members to achieve their goals, find success, and make inspiring contributions to our global community. We aim to empower and enhance the communities in which we teach, learn, and work by operating sustainably, maintaining responsible governance standards, and supporting our global community. We continue to measure our performance and set new goals in areas including academic and policy standards; diversity and inclusion of Adtalem suppliers; and energy and waste reduction programs. Adtalem is committed to confronting the challenges of climate change by reducing the impact of our operations. In fiscal year 2020, we launched a multi-year environmental initiative with the following three strategic goals to define our Energy Conservation Measures (“ECMs”) and Green House Gas (“GHG”) reduction activities through 2024: 1. Achieve a ten percent (10%) reduction (when compared to 2019 calendar year levels) of controllable energy use and GHG emission levels across Adtalem’s U.S. properties by 2024 2. From 2021 through 2024, aim to initiate an average of one renewable energy project per year at an owned location 3. By the end of 2024 implement an enhanced waste and recycling initiative across Adtalem’s controllable waste portfolio These goals address a set of environmental issues that are important to us, including our impact on climate change and our effect on natural resources. The goals lay the foundation for our environmental vision and solidify our commitment to safeguard the environment. During fiscal year 2021, in accordance with Goal 1, we solidified a clearer picture of our carbon footprint and noted the impact of the ECM’s implemented across our locations. Our energy usage decreased 17.7 percent in fiscal year 2021 to 51,645,663 (kBtu) from 62,715,615 (kBtu). Our GHG emissions decreased 18.6 percent to 6,142 mtCO2e from 7,544 mtCO2e. Throughout 2021, we also made headway toward Goal 3 by strengthening our partnerships for advanced waste management in the recycling, refurbishment and diversion of waste from landfills. We also added to our growing pool of data used to assess risks and opportunities within our waste management systems through audits, pilot initiatives and partnership research. All of these results are through June 2021 and we recognize that COVID-19 restrictions and reduced occupancy impacted these metrics. EMPOWERING INDIVIDUALS, IMPACTING GLOBAL COMMUNITIES The principles of access and equity underpin our efforts to empower diverse, vibrant communities across the globe. Guided by our social mission to address critical workforce shortages through the education of diverse students and member populations, we seek to create sustainable workforces that represent the communities they serve. With projected nursing and physician shortages projected for the next decade, we are actively working to address these critical workforce shortages by providing training, expanding access to education and establishing robust employer partnerships. In 2021, 86.1% of the total population in our four degree-conferring institutions identified as female and 45.4% as ethnically diverse. Combined, our institutions graduate more than 100 Black physicians annually, more than any U.S. school. And many of our graduates go on to serve communities that are medically underserved or low-income. Forty-four percent (44%) of our medical school graduates practice in medically underserved or health professional shortage areas and eighty-eight percent (88%) of our medical school graduates practice in low-income communities. The initiatives described above along with a detailed discussion of our Sustainability Commitment and its core pillars – Operating with Purpose and Responsibility; Safeguarding Global Health and the Environment; and Empowering Individuals, Impacting Global Communities can be found in Adtalem’s 2021 Sustainability Report (https://www.adtalem.com/sites/g/files/krcnkv321/files/2021-10/Adtalem_2021_SustainabilityReport_FINAL.pdf). 33 2021 Proxy StatementProposal No. 1 Election of Directors Proposal No. 1 Election of Directors Information Security and Cybersecurity Adtalem takes seriously the custody of student, colleague, and stakeholder information, and therefore employs strong governance practices regarding information security. For example, Adtalem’s Enterprise Information Security Framework policy and Information Governance and Security procedures are modeled on the National Institute of Standards and Technology (NIST) 800-53 policy framework. We continually evaluate the effectiveness of our security measures. Some key safeguards include, but are not limited to: regularly scheduled penetration tests & vulnerability assessments and mandatory security awareness training for all users of our systems. Representative training topics include: protection of sensitive information, phishing, and mobile device security. We utilize advanced security tools and software to protect our systems and information, to detect unauthorized activity, and to take expeditious corrective action, as required. The Adtalem Audit and Finance Committee, comprised entirely of independent directors, assists the Board in its responsibilities of overseeing that the Company has established, documented, maintained, and periodically reevaluates its CyberSecurity processes. Management reports on the state of the CyberSecurity program to the Audit and Finance Committee on a quarterly basis. Additionally, Adtalem’s IT general controls are audited annually by both the Company’s internal function and the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP. Adtalem maintains a CyberSecurity insurance policy, which would potentially defray certain costs associated with a breach. In the last three years, Adtalem has not experienced a significant information security breach. Outreach and Engagement We value the opinions of our shareholders and believe regular, proactive communications with our shareholders to be in the long-term best interests of Adtalem. Our investor communications and outreach include investor day meetings, investor conferences, and quarterly conference calls. These calls are open to the public and are available live and as archived webcasts on our website. Additionally, we reach out at least annually to our largest shareholders to invite feedback. We hold individual calls with shareholders who accept our invitation to allow for open, meaningful discussions. As part of our shareholder outreach, we have spoken with shareholders holding approximately 45% of our shares. These included discussions of compensation matters, as well as environmental, social, and governance issues. We share any feedback received from our shareholders with our Board. COMMUNICATIONS WITH DIRECTORS Shareholders and other interested parties wishing to communicate with the Board, our Lead Independent Director, or any member or committee of the Board are encouraged to send any communication to our General Counsel and Corporate Secretary, Adtalem Global Education Inc., 500 West Monroe Street, Suite 2800, Chicago, IL 60661 and should prominently indicate on the outside of the envelope that it is intended for the Board, the independent directors as a group, or a committee or an individual member of the Board. Any such communication must be in writing, must set forth the name and address of the shareholder (and the name and address of the beneficial owner, if different), and must state the form of stock ownership and the number of shares beneficially owned by the shareholder making the communication. Adtalem’s General Counsel and Corporate Secretary will compile and promptly forward all communications to the Board except for spam, junk mail, mass mailings, resumes, or other forms of job inquiries, surveys, business solicitations, or advertisements. Communicating Accounting Complaints Shareholders, Adtalem employees and other interested persons are encouraged to communicate or report any complaint or concern regarding financial statement disclosures, accounting, internal accounting controls, auditing matters, or violations of Adtalem’s Code of Conduct and Ethics (collectively, “Accounting Complaints”) to the General Counsel and Corporate Secretary of Adtalem at the following address: General Counsel and Corporate Secretary Adtalem Global Education 500 West Monroe Street, Suite 2800 Chicago, IL 60661 34 Adtalem Global Education Inc.Proposal No. 1 Election of Directors Accounting Complaints also may be submitted in a sealed envelope addressed to the Chair of the Audit and Finance Committee, in care of the General Counsel, at the address indicated above, and labeled with a legend such as: “To Be Opened Only by the Audit and Finance Committee.” Any person making such a submission who would like to discuss an Accounting Complaint with the Audit and Finance Committee should indicate this in the submission and should include a telephone number at which he or she may be contacted if the Audit and Finance Committee deems it appropriate. Adtalem employees and students may also report Accounting Complaints using any of the reporting procedures specified in Adtalem’s Code of Conduct and Ethics. All reports by employees shall be treated confidentially and may be made anonymously. Adtalem will not discharge, demote, suspend, threaten, harass, or in any manner discriminate against any employee in the terms and conditions of his or her employment based upon any lawful actions taken by such employee with respect to the good faith submission of Accounting Complaints. BOARD PRACTICES AND POLICIES Certain Relationships and Related Person Transactions It is Adtalem’s policy that the Audit and Finance Committee review, approve, or ratify all related party transactions in which Adtalem participates and in which any related person has a direct or indirect material interest and the transaction involves or is expected to involve payments of $120,000 or more in the aggregate per fiscal year. Our legal staff is primarily responsible for gathering information from the directors and executive officers, including annual questionnaires completed by all our directors, director nominees, and executive officers. The Audit and Finance Committee will review the relevant facts and circumstances of all related party transactions, including whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction. No member of the Audit and Finance Committee may participate in any approval of a related party transaction to which he or she is a related party. Various Adtalem policies and procedures, including the Code of Conduct and Ethics, which applies to Adtalem’s directors, officers, and all other employees, and annual questionnaires completed by all Adtalem directors, director nominees, and executive officers, require disclosure of related person transactions or relationships that may constitute conflicts of interest or otherwise require disclosure under applicable Securities and Exchange Commission (“SEC”) rules. There were no related party transactions in fiscal year 2021 that required approval under our policies and procedures or the rules and regulations of the SEC. Governance Principles/Code of Ethics Our Board has adopted Governance Principles that set forth expectations for directors, director qualifications, director retirement, director independence standards, board committee structure, and functions and other policies for Adtalem’s governance. We have adopted a Code of Conduct and Ethics applicable to all colleagues including directors, officers, and full- and part-time colleagues and faculty of Adtalem Global Education Inc. and its subsidiaries. These documents are available on Adtalem’s website at https://www.adtalem.com/media/166/ governance-principles and https://www.adtalem.com/media/156/code_of_conduct.pdf. Any amendments or waivers of the Code of Conduct and Ethics will be disclosed at this website address. Compensation Committee Independence and Insider Participation During 2021, Michael W. Malafronte, William W. Burke, Lyle Logan, and Kenneth J. Phelan served on the Compensation Committee. No member of the Compensation Committee was, during 2021, an officer or employee of Adtalem, was formerly an officer of Adtalem or had any relationship requiring disclosure by Adtalem as a related person transaction under Item 404 of Regulation S-K. During 2021, none of the Company’s executive officers served on the board of directors of compensation committee of any other entity, any officers of which served on Adtalem’s Board or our Compensation Committee. 35 2021 Proxy StatementProposal No. 1 Election of Directors DIRECTOR COMPENSATION The director compensation program was reviewed in the second half of fiscal year 2021 and no changes were made for the year. In fiscal year 2021, non-employee directors continued to receive an annual retainer of $85,000, paid quarterly. In fiscal year 2021, the Chair of the Audit and Finance Committee received an additional annual retainer of $22,500, the Chair of the Compensation Committee was entitled to receive an additional retainer of $17,500, and the chairs of each of the other committees received an additional annual retainer of $10,000 for their roles as committee chairs. During fiscal year 2021, Ms. Wardell, our Executive Chairman of the Board, and former CEO and President, did not receive any additional compensation for her service as Chairman of the Board and Mr. Burke received an additional annual retainer of $35,000 for his service as Lead Independent Director. Directors were reimbursed for any reasonable and appropriate expenditures attendant to Board membership. Mr. Malafronte, who was originally appointed to the Board in 2016 pursuant to a Support Agreement, did not receive any compensation for his service until he retired from IVA Partners in 2021. Under the Adtalem Nonqualified Deferred Compensation Plan, a director could elect to defer all or a portion of the cash retainer. Any amount so deferred is, at the director’s election, valued as if invested in various investment choices made available by the Compensation Committee for this purpose, and is payable in cash installments, or as a lump-sum on or after termination of service as a director, or at a later date specified by the director. No non-employee directors deferred any portion of their compensation in fiscal year 2021. As long-term incentive compensation for directors, each non-employee director (other than Mr. Malafronte who did not receive compensation as a director at the time) received RSUs with an approximate value of $125,000 directly following the 2020 Annual Meeting of Shareholders. Each RSU represents the right to receive one share of Common Stock following the satisfaction of the vesting period. All RSUs granted in November 2020 vest upon the one-year anniversary of the grant date. This table discloses all director compensation provided in fiscal year 2021 to the directors of Adtalem for their service as directors (other than Ms. Wardell who received no compensation for her service as a director and received no additional compensation as Chairman of the Board; Ms. Wardell’s compensation as President and CEO is set forth in the 2021 Summary Compensation Table). Name William W. Burke Charles DeShazer(3) Mayur Gupta(4) Donna J. Hrinak Georgette Kiser Lyle Logan Michael W. Malafronte(6) Sharon L. O’Keefe Kenneth J. Phelan James D. White(7) Fees Earned or Paid in Cash ($)(1) 142,500 35,417 — Stock Awards ($)(2) Total ($) 125,026 267,526 — 35,417 — — 85,000 125,026 210,026 92,500 125,026 217,526 119,000(5) 125,026 244,026 40,666 — 40,666 85,000 125,026 210,026 85,000 125,026 210,026 95,000 125,026 220,026 (1) Includes all retainer fees paid or deferred pursuant to the Adtalem Global Education Inc. Nonqualified Deferred Compensation Plan. (2) The amounts reported in the Stock Awards column represent the grant date fair value of 4,370 RSUs granted on November 17, 2020 to each of the directors named above, computed in accordance with FASB ASC Topic 718. The assumptions made in determining the valuations of these awards can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021. The number of RSUs granted to each of the directors named above was determined by dividing $125,000 by $28.61, which represents the fair market value of a share of Common Stock on the November 17, 2020 award date, and rounding to the nearest 10 shares. (3) Dr. DeShazer was appointed to the Board effective April 2, 2021. (4) Mr. Gupta was appointed to the Board effective August 10, 2021. (5) This amount includes $24,000 in cash Mr. Logan received as compensation for his services as a member of the board of trustees of an Adtalem institution. 36 Adtalem Global Education Inc.(6) Mr. Malafronte did not receive compensation for his Board service until April 8, 2021 after he retired from IVA. (7) Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement. The table below discloses the aggregate number of RSUs outstanding at June 30, 2021 for each non-employee director listed above. Proposal No. 1 Election of Directors Name William W. Burke Charles DeShazer(1) Mayur Gupta(2) Donna J. Hrinak Georgette Kiser Lyle Logan Michael W. Malafronte Sharon L. O’Keefe Kenneth J. Phelan James D. White(3) (1) Mr. DeShazer was appointed to the Board effective April 2, 2021. (2) Mr. Gupta was appointed to the Board effective August 10, 2021. (3) Mr. White retired from the Board effective April 30, 2021. Mr. White’s stock awards were forfeited upon his retirement. RSUs Outstanding (#) 4,370 — — 4,370 4,370 4,370 — 4,370 4,370 — 37 2021 Proxy StatementPROPOSAL NO. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm Subject to shareholder ratification, the Audit and Finance Committee of the Board has reappointed PricewaterhouseCoopers LLP (“PwC”), as independent registered public accounting firm for Adtalem and its subsidiaries for fiscal year 2022. The Board recommends to the shareholders that the selection of PwC as independent registered public accounting firm for Adtalem and its subsidiaries be ratified. If the shareholders do not ratify the selection of PwC, the selection of independent registered public accounting firm will be reconsidered by the Audit and Finance Committee. Representatives of PwC are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and to be available to respond to appropriate questions from shareholders. APPROVAL BY SHAREHOLDERS Proposal No. 2 to ratify the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 2022 will require the affirmative vote of a majority of the shares of Common Stock of Adtalem represented at the Annual Meeting. Unless otherwise indicated on the proxy, the shares will be voted FOR ratification of the selection of PwC as independent registered public accounting firm for Adtalem for fiscal year 2022. The Board of Directors recommends a vote FOR the ratification of the appointment of PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022. SELECTION AND ENGAGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit and Finance Committee, at each of its regularly scheduled meetings, and on an interim basis as required, reviews all engagements of PwC for audit and all other services. Prior to the Audit and Finance Committee’s consideration for approval, management provides the Audit and Finance Committee with a description of the reason for and nature of the services to be provided along with an estimate of the time required and approximate cost. Following such review, each proposed service is approved, modified, or denied as appropriate. A record of all such approvals is maintained in the files of the Audit and Finance Committee for future reference. All services provided by PwC during the past two years were approved by the Audit and Finance Committee prior to their undertaking. PRE-APPROVAL POLICIES The Audit and Finance Committee has adopted a policy for approving all permitted audit, audit-related, tax, and non-audit services to be provided by PwC in advance of the commencement of such services, except for those considered to be de minimis by law for non-audit services. Information regarding services performed by the independent registered public accounting firm under this de minimis exception is presented to the Audit and Finance Committee for information purposes at each of its meetings. There is no blanket pre-approval provision within this policy. For fiscal years 2020 and 2021, none of the services provided by PwC were provided pursuant to the de minimis exception to the pre-approval requirements contained in the applicable rules of the SEC. Audit and Finance Committee consideration and approval generally occurs at a regularly scheduled Audit and Finance Committee meeting. For projects that require an expedited decision because the independent registered public accounting firm should begin prior to the next regularly scheduled meeting, requests for approval may be circulated to the Audit and Finance Committee by mail, telephonically or by other means for its consideration and approval. When deemed necessary, the Audit and Finance Committee has delegated pre-approval authority to its Chair. Any engagement of the independent registered public accounting firm under this delegation will be presented for informational purposes to the full Audit and Finance Committee at their next meeting. 38 Adtalem Global Education Inc. Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm AUDIT FEES AND OTHER FEES The Audit and Finance Committee appointed PwC as Adtalem’s independent registered public accounting firm for the fiscal year ended June 30, 2021. Adtalem’s shareholders ratified the engagement at the Annual Meeting of Shareholders on November 17, 2020. In addition to engaging PwC to audit the consolidated financial statements for Adtalem and its subsidiaries for the year and review the interim financial statements included in Adtalem’s Quarterly Reports on Form 10-Q filed with the SEC, the Audit and Finance Committee also engaged PwC to provide various other audit and audit-related services — e.g., auditing of Adtalem’s compliance with student financial aid program regulations. The Sarbanes-Oxley Act of 2002 prohibits an independent public accountant from providing certain non-audit services for an audit client. Adtalem engages various other professional service providers for these non-audit services as required. Other professional advisory and consulting service providers are engaged where the required technical expertise is specialized and cannot be economically provided by employee staffing. Such services include, from time to time, business and asset valuation studies, and services in the fields of law, human resources, information technology, employee benefits and tax structure, and compliance. In fiscal year 2020, we incurred significant tax fees related to the divestiture of Adtalem Brazil. The aggregate amounts included in Adtalem’s financial statements for fiscal year 2021 and 2020 for fees billed or to be billed by PwC for audit and other professional services, respectively, were as follows: Audit Fees Audit-Related Fees Tax Fees All Other Fees Total Fiscal Year 2021 $2,628,000 Fiscal Year 2020 $2,825,500 $ 850,000 $ — $ 405,881 $1,102,734 $ 18,000 $ 18,000 $3,901,881 $3,946,234 AUDIT FEES — Includes all services performed to comply with generally accepted accounting principles in conjunction with the annual audit of Adtalem’s financial statements and the audit of internal controls over financial reporting. In addition, this category includes fees for services in connection with Adtalem’s statutory and regulatory filings, consents, and review of filings with the SEC such as the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Also included are services rendered in connection with the required annual audits of Adtalem’s compliance with the rules and procedures promulgated for the administration of federal and state student financial aid programs. AUDIT-RELATED FEES — Includes services performed related to Adtalem’s debt offerings and comfort letters. Audit-related fees of $850,000 were billed to us by PwC for fiscal year 2021. TAX FEES — Includes all services related to tax compliance, tax planning, tax advice, assistance with tax audits, and responding to requests from Adtalem’s tax department regarding technical interpretations, applicable laws and regulations, and tax accounting. Adtalem’s Audit and Finance Committee has considered the nature of these services and concluded that these services may be provided by the independent registered public accounting firm without impairing its independence. ALL OTHER FEES — Includes subscriptions for online accounting research services, fees for access to disclosure checklist, and fees to prepare a human resource benchmarking study. 39 2021 Proxy StatementProposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm AUDIT AND FINANCE COMMITTEE REPORT To Our Shareholders: The Audit and Finance Committee of Adtalem consists of three independent directors. The members of the Audit and Finance Committee meet the independence and financial literacy requirements of the NYSE and additional heightened independence criteria applicable to members of the Audit and Finance Committee under SEC and NYSE rules. In fiscal year 2021, the Audit and Finance Committee held eight meetings. The Audit and Finance Committee has adopted, and annually reviews, a charter outlining the practices it follows. The charter conforms to the SEC’s implementing regulations and to the NYSE listing standards. Management is responsible for Adtalem’s internal controls and the financial reporting process by which it prepares the financial statements. Adtalem’s independent registered public accounting firm is responsible for performing an independent audit of the annual financial statements of Adtalem and expressing an opinion on those statements. The principal duties of the Audit and Finance Committee include: • Monitoring Adtalem’s financial reporting processes, including its internal control systems; • Selecting Adtalem’s independent registered public accounting firm, subject to ratification by the shareholders; • Evaluating the independent registered public accounting firm’s independence; • Monitoring the scope, approach, and results of the annual audits and quarterly reviews of financial statements, and discussing the results of those audits and reviews with management and the independent registered public accounting firm; • Overseeing the effectiveness of Adtalem’s internal audit function and overall risk management processes; • Discussing with management and the independent registered public accounting firm the nature and effectiveness of Adtalem’s internal control systems; and • Reviewing and recommending to the Board Adtalem’s financing policies and actions related to investment, capital structure, and financing strategies. During fiscal year 2021, at each of its regularly scheduled meetings, the Audit and Finance Committee met with the senior members of the Adtalem’s financial management team. Additionally, the Audit and Finance Committee had separate private sessions, on a quarterly basis, with Adtalem’s independent registered public accounting firm, Adtalem’s General Counsel and Corporate Secretary, Adtalem’s Chief Financial Officer or Interim Chief Financial Officer, and Adtalem’s Senior Director, Internal Audit. The Audit and Finance Committee is updated periodically on the process management uses to assess the adequacy of Adtalem’s internal control systems over financial reporting, the framework used to make the assessment and management’s conclusions on the effectiveness of Adtalem’s internal controls over financial reporting. The Audit and Finance Committee also discusses with Adtalem’s independent registered public accounting firm Adtalem’s internal control assessment process, management’s assessment with respect thereto and the evaluation by Adtalem’s independent registered public accounting firm of its system of internal controls over financial reporting. The Audit and Finance Committee annually evaluates the performance of Adtalem’s independent registered public accounting firm, including the senior audit engagement team, and determines whether to reengage the current independent registered public accounting firm. As a threshold matter, the Audit and Finance Committee satisfies itself that the most recent Public Company Accounting Oversight Board (“PCAOB”) inspection report pertaining to the current firm does not contain any information that would render inappropriate its continued service as Adtalem’s independent public accountants, including consideration of the public portion of the report and discussion in general terms of the types of matters covered in the non-public portion of the report. The Audit and Finance Committee also considers the quality and efficiency of the previous services rendered by the current auditors and the auditors’ technical expertise and knowledge of Adtalem’s global operations and industry. Based on this evaluation, the Audit and Finance Committee decided to reengage, and recommend ratification of, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022. The Audit and Finance Committee reviewed with members of Adtalem’s senior management team and PwC the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and PwC of Adtalem’s internal controls over financial reporting, and the quality of Adtalem’s financial reporting. Although the Audit and Finance 40 Adtalem Global Education Inc.Proposal No. 2 Ratify Selection of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm Committee has the sole authority to appoint Adtalem’s independent registered public accounting firm, the Audit and Finance Committee recommends that the Board ask the shareholders, at their annual meeting, to ratify the appointment of Adtalem’s independent registered public accounting firm. With respect to Adtalem’s audited financial statements for fiscal year 2021, the Audit and Finance Committee has: • Reviewed and discussed the audited financial statements with management; • Met with PwC, Adtalem’s independent registered public accounting firm, and discussed the matters required to be discussed by the PCAOB and the SEC; and • Received the written disclosures and the letter from PwC required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit and Finance Committee concerning independence, and has discussed its independence with PwC. In reliance upon the Audit and Finance Committee’s reviews and discussions with both management and PwC, management’s representations and the report of PwC on Adtalem’s audited financial statements, the Audit and Finance Committee recommended to the Board that the audited financial statements for the fiscal year ended June 30, 2021 be included in Adtalem’s Annual Report on Form 10-K filed with the SEC. In addition, the Audit and Finance Committee has re-appointed, subject to shareholder ratification, PwC as Adtalem’s independent registered public accounting firm for fiscal year 2022. This Audit and Finance Committee Report is not to be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or under the Exchange Act, except to the extent that Adtalem specifically incorporates this Audit and Finance Committee Report by reference, and is not otherwise to be deemed filed under such acts. William W. Burke, Chair Donna J. Hrinak Michael W. Malafronte 41 2021 Proxy StatementPROPOSAL NO. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) COMPENSATION DISCUSSION & ANALYSIS The following pages summarize our executive compensation program for our NEOs. Our 2021 NEOs were: Lisa W. Wardell* Chairman of the Board, President and Chief Executive Officer Former Executives (not pictured): Robert J. Phelan Interim Chief Financial Officer Stephen W. Beard* Chief Operating Officer Douglas G. Beck Senior Vice President, General Counsel and Corporate Secretary Kathy Boden Holland, Former Group President, Medical and Healthcare through September 30, 2021 Michael O. Randolfi, Former Senior Vice President and Chief Financial Officer through April 23, 2021 Executive Summary Adtalem’s executive compensation program is designed to reward leaders for delivering strong financial results and building shareholder value. We firmly believe that academic quality and a strong student-centric focus lead to growth and, therefore, we have incorporated measures into our executive compensation program to recognize leadership for their roles in improving student academic performance and outcomes. This executive compensation program structure enables us to provide a competitive total compensation package while aligning our leaders’ interests with those of our shareholders and other stakeholders. The following chart highlights key objectives behind the development, review and approval of our NEOs’ compensation. Effective September 8, 2021 the Company entered into new Executive Employment Agreements with Ms. Wardell and Mr. Beard for their new roles as Executive Chairman and President and CEO, respectively. The Company filed (i) a Current Report on Form 8-K on August 6, 2021 providing the details of Mr. Beard’s Executive Employment Agreement as President and CEO; and (ii) a Form 8-K/A on September 13, 2021 providing the details of Ms. Wardell’s Executive Employment Agreement as Executive Chairman. * Effective September 8, 2021, Ms. Wardell was appointed Executive Chairman and Mr. Beard was appointed President and CEO. 42 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) COMPENSATION OBJECTIVES Our executive compensation program is designed to: ALIGN INCENTIVES COMPETE FOR TALENT REWARD PERFORMANCE Our compensation program is designed to attract, retain and motivate high-performing employees, particularly our key executives who are critical to our operations. Our compensation decisions take into account the competitive landscape for talent. Our purpose is to empower our students to achieve their goals, find success and make inspiring contributions to the global community. Success in realizing our purpose drives growth, which leads to the creation of sustainable, long- term value for our shareholders. Our compensation program is distinguished by its alignment not only with our shareholders, but also with our students, whose success is critical to our organization’s success. We reward outstanding performance through: • A short-term incentive program focusing our executives on achieving strong financial results and superior academic and student outcomes, through individual performance objectives, and • A long-term incentive program providing a mix of equity vehicles designed to reward long-term financial performance and shareholder value creation. Our executive compensation program is founded on aligning the attainment of our business transformation and growth objectives with commensurate rewards based on results achieved over both short- and long-term performance periods. The Compensation Committee believes this approach appropriately focuses executives on achieving our strategic priorities and provides appropriate upside and downside potential based on actual performance and results achieved over time. Our program, particularly how we measure performance through both annual incentives and our long-term performance share plan, employs measures that support our fundamental shift in strategic focus for management and our organization at large. Fiscal year 2021 highlights underscored by our commitment to business transformation and growth Key Achievements How this positions us for growth Announcing the purchase of Walden University • Reinvests capital (following the divestiture of Adtalem Brazil) via inorganic growth to expand market share of our medical and healthcare business while harnessing synergies to accelerate returns and position us for short- and long-term growth; and • Complements existing portfolio while adding substantial scale as a workforce solutions provider with innovative online capabilities Focus on integration readiness as a segue to realizing value capture • Established integration synergy plans for post-close execution securing our commitment to deliver a $60 million contribution to free cash flow and $1.15 in EPS accretion from continuing operations (excluding special items) in year one following acquisition close Strengthening our bench and focus on excellence in talent • Strengthened bench and supported long-term growth by investing in several key leadership hires with emphasis on general management, strategic marketing and growth-oriented roles, improving the succession pipeline in key functional and operational areas Maintained Focus on Business Continuity ~ Normalized and prepared to expand business during Pandemic • Demonstrated agility with limited time and resources and despite the uncertainty during unprecedented times; • Rebounded with strong financial performance despite significant challenges to the business; • Managed through times of extreme uncertainty for Chamberlain and the medical schools where clinical experience is key for student success; and • Consolidated brick and mortar administrative offices and managed a complete remote workforce while significantly expanding our remote work capabilities for the longer term. 43 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) CONTINUED SHAREHOLDER OUTREACH Adtalem employs a proactive investor relations approach, involving management and the Board, with ongoing outreach and interactive dialogue with investors to seek input on topics including corporate governance, executive compensation, diversity, equity and inclusion, and strategy. Our goal is to provide transparency to ensure there is a clear understanding of our business and our operating and financial performance – as set forth in our public filings, through one-on-one discussions, non-deal road shows, and investor conferences. While we are very pleased by the positive response to the executive compensation program substantiated by our 92% ‘say on pay’ approval rating, our ongoing commitment included proactive outreach to our top shareholders in 2021. Those shareholders that did provide feedback (which collectively hold approximately 45% of our shares) responded favorably to our executive compensation program, did not express any particular areas of concern and reiterated their support for the positive changes implemented last year. Adtalem and the Compensation Committee will continue to engage its shareholder base in the future to understand shareholder concerns, particularly in connection with potential changes to its compensation or governance practices. Impact of COVID-19 on our Executive Compensation Program The Adtalem organization remained agile, innovative, and dedicated to our mission, vision, and values, successfully weathering the continued impacts of the pandemic in fiscal year 2021. Payouts under our annual Management Incentive Plan (MIP), as well as performance shares (PSU) vesting in 2021, reflected actual performance despite the effects of the pandemic on our business. PAY-FOR-PERFORMANCE FOCUS We use both short- and long-term incentives to reward NEOs for delivering strong business results, increasing shareholder value and improving student outcomes. With our pay-for-performance philosophy, an executive can earn in excess of target levels when performance exceeds established objectives. And, if performance falls below established objectives, our incentive plans pay below target levels, which in some cases could be nothing at all. MS. WARDELL’S 2021 TARGET COMPENSATION MIX OTHER NEO 2021 TARGET COMPENSATION MIX(1)(2) 14% Salary 15% Annual Incentive 52% Long-Term Incentives 28% Salary 20% Annual Incentive 71% Long Term Incentive (1) Excludes perquisites. (2) Illustration represents target compensation mix for NEOs who were actively employed as of June 30, 2021 with the exception of Douglas Beck who had not yet received an ‘annual’ LTI award. Program Design: • The actual value realized from the annual MIP award can range from zero, if threshold performance targets are not met, to up to 200% of targeted amounts for exceptional organizational performance. • Our long-term incentive program consists of equity-based awards whose value ultimately depends on our stock price growth. A significant portion of the long-term component (one-third of Ms. Wardell’s and the other NEO’s annual awards) is granted in the form of PSUs, the number of which are earned based on our three-year performance versus return on invested capital (ROIC) and free cash flow (FCF) per share goals. If the minimum levels of performance are not met, no PSUs are earned; if the minimum levels of performance are met, payout can range from 50% to 150% of the target number of PSUs. Beginning in fiscal year 2022, we are shifting our equity mix to 50% PSUs to strengthen pay-for-performance alignment. 44 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Performance Assessment: Our Compensation Committee uses a comprehensive, well-defined and rigorous process to assess organizational and individual performance. We believe the performance measures for our incentive plans focus management on the appropriate objectives for the creation of short- and long-term shareholder value as well as academic quality and organizational growth. 2021 COMPENSATION DECISIONS AND ACTIONS Key Fiscal Year 2021 Compensation Decisions BASE SALARY Page 48 While Adtalem remains committed to offering market competitive compensation for our key executives, the Compensation Committee chose to freeze salaries for all NEOs as a response to the ongoing challenges resulting from the COVID-19 pandemic. ANNUAL INCENTIVES Page 49 For Ms. Wardell, 85% of the fiscal 2021 MIP award was based on Adtalem’s financial performance, specifically adjusted earnings per share and revenue, reflecting our CEO’s key responsibility in leading Adtalem’s financial growth. The remaining 15% was based on individual performance. For the other NEOs, 70% of the 2021 MIP award was based on financial performance at Adtalem (adjusted earnings per share and revenue) or at the institutions for which the NEO is responsible (operating income and revenue), and the remaining 30% was based on individual performance. Payouts under the 2021 MIP award were earned at 123% of target for Ms. Wardell and between 111% and 129% of target for the other NEOs, reflecting the strong financial performance of Adtalem and its institutions and individual contributions for fiscal year 2021. LONG-TERM INCENTIVES Page 53 In fiscal year 2021, Ms. Wardell and other NEOs received long-term incentive grants consisting of performance vesting PSUs, service-vesting stock options, and service-vesting RSUs. Performance share awards granted in 2018 to NEOs1, consisted of financial-based PSUs, vested in 2021 including Revenue and Free Cash Flow per share targets that were assessed over a three-year period. Based on our financial performance, the ROIC and Free Cash Flow PSUs vested with an overall payout of 64.3% and 93.8% of target, respectively. 1 excluding Ms. Wardell, who did not receive a grant of LTI in August 2018 and Douglas Beck and Robert Phelan who were not employed by Adtalem at the time of grant. Factors Guiding our Decisions • Executive compensation program objectives, philosophy and principles; • Shareholder input, including say-on-pay vote; • Adtalem’s mission, vision, purpose and “TEACH” values; • The competitive landscape, trends and best pay practices; • Financial performance of Adtalem and its individual institutions; and • Advice of our independent outside compensation consultant. The following provides a more in-depth discussion of our performance in these areas that helped drive the Compensation Committee’s evaluation of performance, and ultimately, compensation decisions for fiscal year 2021. 45 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) 2021 Financial and Operational Highlights Adtalem’s fiscal year 2021 financial results reflect continued growth in its Medical and Healthcare and Financial Services segments, with revenue increasing 4.7% and 10.7%, respectively, despite the effects of COVID-19. COVID-19 resulted in estimated revenue losses of approximately $47 million, operating income losses of approximately $33 million and loss of earnings per share of approximately $0.50 in fiscal year 2021. Through efforts to manage salary, travel, and discretionary spending, Adtalem was able to partially offset the effects of COVID-19 and achieve fiscal year 2021 earnings per share, excluding special items, of $2.98. See Appendix A for a reconciliation to reported results. Significant progress was made in executing our workforce solutions strategy in fiscal year 2021; a strategy designed to drive superior student outcomes, meet the critical workforce needs of our employer partners and drive value for our shareholders. We entered into an agreement to acquire Walden University to further position us as a leading healthcare education provider with market-leading scale and breadth. We successfully completed the acquisition of Walden University in August, 2021. Fiscal year 2021 revenue was below our expectations while earnings per share exceeded our expectations, as reflected in our fiscal year 2021 operating plan, which served as the basis for our fiscal year 2021 MIP financial performance targets. As a result, the portions of executive officer MIP awards based on Adtalem revenue and earnings per share paid out at 98.0% and 136.5% of target, respectively. FY 2021 REVENUE FY 2021 EARNINGS PER SHARE $1,112.4 $1,116.9 $2.98* $2.60 Actual Plan Actual Plan * Adjusted results exclude impact of special items. See Appendix A for a reconciliation to reported results. EXECUTIVE COMPENSATION GOVERNANCE AND PRACTICES WHAT WE DO WHAT WE DON’T DO % Pay for economic and academic performance % Solicit and value shareholder opinions about our compensation practices % Deliver total direct compensation primarily through variable pay X Provide guaranteed salary increases X Provide tax gross-ups X Provide single-trigger change-in-control severance X Re-price stock options or exchange underwater % Set challenging short- and long-term incentive options for other awards or cash award goals % Provide strong oversight that ensures adherence to incentive grant regulations and limits % Maintain robust stock ownership requirements % Adhere to an incentive compensation recoupment (clawback) policy % Offer market-competitive benefits % Consult with an independent advisor on executive pay practices, plan designs and assessing external competitive pay levels X Pay dividends on unvested performance-based awards X Provide excessive perquisites X Offer a defined benefit pension or supplemental executive retirement plan X Permit hedging or pledging of Adtalem Common Stock X Reward executives without a link to performance 46 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Executive Compensation PRINCIPLES OF EXECUTIVE COMPENSATION The Compensation Committee uses the following Principles of Executive Compensation to assess Adtalem’s executive compensation program and to provide guidance to management on the Compensation Committee’s expectations for the overall executive compensation structure: Principle Stewardship/Sustainability Purpose • Reinforce Adtalem’s purpose and long-term vision • Motivate and reward sustained long-term growth in shareholder value • Uphold long-term interests of all stakeholders (including students, employees, employers, shareholders and taxpayers) • Focus on sustaining and enhancing the quality and outcomes of education programs • Promote continued differentiation and expansion of Adtalem’s programs Accountability • Ensure financial interests and rewards are tied to executive’s area of impact and responsibility (division, geography and function) • Require timing of performance periods to match timing of employee’s impact and responsibility (short-, medium- and long-term) • Emphasize quality, service and academic and career results • Articulate well defined metrics, goals, ranges, limits and results • Motivate and reward achievement of strategic goals, with appropriate consequences for failure • Comply with legislation and regulation Alignment • Promote commonality of interest with all stakeholders (including students, employees, employers, owners and taxpayers) • Reflect and reinforce Adtalem’s values and culture • Promote commonality of interests across business units, geography and up, down and across the chain of command • Provide a balance between short- and long-term performance Engagement • Attract and retain high quality talent and provide for organizational succession Transparency • Provide market competitive total compensation and benefits packages at all levels • Promote consistent employee development at all levels • Motivate urgency, creativity and dedication to Adtalem’s purpose • Clearly communicate the link between pay and performance • Clearly communicate compensation structure, rationale and outcomes to all employees and shareholders • Provide simple and understandable structure that is easy for internal and external parties to understand • Maintain a reasonable and logical relationship between pay at different levels • Base plan on systematic goals that are objective and clear, with appropriate level of discretion 47 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) 2021 EXECUTIVE COMPENSATION FRAMEWORK Adtalem’s fiscal year 2021 incentive compensation program for executives was designed to link compensation performance with the full spectrum of our business goals, some of which are short-term, while others take several years or more to achieve: COMPENSATION SNAPSHOT Salary (cash) Objective Reflect experience, market competition and scope of responsibilities Time Horizon Reviewed Annually Additional Explanation • Represents 14% and 28% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. Performance Measures Assessment of performance in prior year. Given the challenges presented by the pandemic and in response to the unprecedented and evolving business landscape, we took a conservative approach and did not increase salaries for executives during fiscal year 2021. MIP Annual Incentive (cash) Reward achievement of short-term operational business priorities 1 year • Revenue* • Adjusted Earnings Per Share* • Individual Goals • Represents 15% and 20% of Total Direct Compensation for Ms. Wardell and other NEOs (on average), respectively. Long Term Incentive (equity) Stock Options Reward stock price RSUs ROIC PSUs FCF PSUs growth and retain key talent Align interests of management and shareholders, and retain key talent Reward achievement of multi-year financial goals, align interests of management and shareholders, and retain key talent 4 year ratable • Stock price growth • Represents 33.3% of NEO LTI granted in FY21 • Represents 33.3% of NEO LTI granted in FY21 • ROIC 3 year cliff • FCF per share • Represents 33.3% of NEO LTI granted in FY21 * A portion of the MIP payout for executive leadership of business segments and business units is also based on the revenue and operating income at such executive’s business segment or business unit. ANALYSIS OF 2021 EXECUTIVE COMPENSATION Annual Base Salary Review Annual base salaries for NEOs are intended to reflect the scope of their responsibilities, the experience they bring to their roles, and current market compensation for similar roles outside of Adtalem. Once established, and under normal business conditions, base salaries are reviewed annually for adjustment to reflect the executive’s prior performance and respond to changes in market conditions. The table below lists the seven criteria the Compensation Committee uses to determine changes to salary from one year to the next. Base salary adjustments are made based on seven criteria: 1. Adtalem’s overall financial performance compared to operating plan 2. Executive’s performance against established individual goals and objectives 3. Executive’s effectiveness in instilling a culture of academic quality, teamwork, student service and integrity 4. Executive’s expected future contributions 5. Comparison to peer group and other available market data 6. Merit increase parameters set for all colleagues in the organization 7. Discretion based on interaction and observation through the year 48 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Fiscal Year 2021 Base Salary Decisions Given the unprecedented challenges presented by the pandemic and in response to the evolving business landscape, in August 2020 management, together with the Compensation Committee and based on input from F.W. Cook, made the decision that base salaries for NEOs would not be adjusted; and all were maintained at current levels for fiscal year 2021. ANNUAL BASE SALARY Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck(1) Kathy Boden Holland Michael O. Randolfi(2) FY2021 $1,100,000 $ 350,000 $ 600,020 $ 500,000 $ 592,250 $ 600,000 (1) Mr. Beck was hired on June 14, 2021 and therefore did not have a salary for fiscal year 2020. (2) Mr. Randolfi resigned effective April 23, 2021. Annual Cash Incentive Compensation The annual cash incentive, delivered through the MIP, provides NEOs with the opportunity to earn rewards based on the achievement of organizational and institutional performance, as well as individual performance. How the MIP Works MIP target award opportunities for each NEO are set by the Compensation Committee based on factors including external surveys of practices for positions with similar levels of responsibility. These targets, which are expressed as a percentage of base salary, are then reviewed at the beginning of each fiscal year based on updated market compensation data. For fiscal year 2021, the MIP provided Adtalem’s NEOs (other than Ms. Wardell) with a target award opportunity ranging from 50% to 80% of base salary. For this period, the target award opportunity for Ms. Wardell was set at 110% of base salary (consistent with fiscal year 2020). Additionally, the award opportunity for Mr. Phelan was adjusted mid-year to 80% (from 50%) during the period which he served as interim CFO in addition to his role as Vice President and Chief Accounting Officer. No other changes were made to the MIP target award opportunity as a percentage of base salary for the other NEOs. Actual awards can be higher or lower than the target opportunity based on the results for each performance measure. Performance below the threshold for the goal will result in no payment for that performance goal. Performance at or above threshold can earn an award ranging from 50% to 200% of the target amount. The maximum amount of 200% of target rewards exceptional performance compared to expectations, over-delivery of strategic initiatives, and/or achievement of initiatives not contemplated at the time goals were set. Actual earned awards are determined after the fiscal year has ended and audited financial results have been completed (i.e., in the first quarter of the next fiscal year). Thus, MIP awards for fiscal year 2021 were determined and paid in the early part of fiscal year 2022, after the results for the fiscal year ended June 30, 2021 were confirmed. The payout is based on Adtalem adjusted earnings per share and Adtalem revenue, and as applicable, institution operating income and institution revenue measures. MIP measures and goals are typically set by the Compensation Committee in the first quarter of the year in which the performance is measured, in addition to individual performance. Creating a Strong Link to Pay-for-Performance We believe the MIP payouts made to our NEOs for fiscal year 2021 support our executive compensation objective of pay-for- performance by rewarding our NEOs to the extent they met or exceeded pre-established individual performance goals and financial performance goals related to the institutions they oversee. MIP Performance Measures The Compensation Committee determined that Adtalem adjusted earnings per share and revenue, along with institution operating income and revenue, effectively balance top line revenue growth and bottom-line profitability and results and are the most appropriate short-term metrics to support our business objectives. 49 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) In measuring performance, the Compensation Committee may adjust results for certain unusual, non-recurring or other items to ensure the MIP rewards true operational performance as it is perceived by investors and as consistently measured. Appendix A details the adjustments made in the last three fiscal years. In instances where an institution has not demonstrated performance commensurate with the potential award, the Compensation Committee may exercise negative discretion and reduce MIP payouts for individuals with oversight over the applicable institution. In the case of acquisitions and dispositions, the Compensation Committee generally does not include revenue, and corresponding earnings per share or operating income, in their evaluation of achievement against targets unless such expected revenue, and corresponding earnings per share or operating income, had been factored into the performance target. Similarly, revenue, and corresponding earnings per-share or operating income performance is adjusted for dispositions during the year. In addition to the actual results achieved, the Compensation Committee also considers individual performance over the course of that fiscal year for each NEO. Individual performance goals reflect functional results and/or institution performance appropriate for the executive, as well as academic outcomes, organizational strength and the advancement of Adtalem’s core values. Individual performance goals are designed to drive initiatives that support Adtalem’s strategy and further align leadership with Adtalem’s student-focused purpose. The relative percentages assigned to the measures for each NEO(1) for fiscal year 2021 are as follows: Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck Kathy Boden Holland Organizational, Institution and Individual Performance Measure Allocation Adtalem Adj.Earnings Per Share 45% Adtalem Revenue 40% Institution Operating Income Institution Revenue Individual Performance 15% 40% 40% 40% 20% 30% 30% 30% 10% 25% 15% 30% 30% 30% 30% (1) Mr. Randolfi did not receive an incentive payment under the FY21 MIP and is therefore excluded from the above table. 2021 Performance Goals Financial goals set for our MIP participants are derived from Adtalem’s fiscal year operating plans, which are recommended by Adtalem’s executive management team and approved by the Board at the beginning of each fiscal year. For fiscal year 2021, these plans translated to financial performance goals of $1,116.9 million of revenue and $2.60 of adjusted EPS. The table below shows the threshold, target, and maximum goals for revenue and adjusted earnings per share under the fiscal 2021 MIP, the performance achieved, and the resulting payout. Metric Adtalem Revenue Plan Threshold $1,005.2 $1,116.9 Target Maximum $1,340.3 Actual Results (excluding special items)(1) $1,112.4 Performance Relative to Plan Payout % 98.0% 99.6% Adtalem Adj. Earnings Per Share $ 2.08 $ 2.60 $ 3.64 $ 2.98 114.6% 136.5% (1) See Appendix A for a reconciliation to reported results. The fiscal year 2021 revenue target under the MIP was 5.7% higher than fiscal year 2020 actual results of $1,052.0 million, which reflected expected growth in the Medical and Healthcare and Financial Services segments. The 2021 adjusted earnings per share target goal under MIP was 30.7% higher than 2020 actual results of $2.28, which, again reflected expected growth in the Medical and Healthcare and Financial Services segments and cost control measures across all segments and home office. 50 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Adtalem does not disclose the institution or segment performance goals utilized in its MIP due to the confidential nature of such information and the competitive harm that could result from its disclosure. The Compensation Committee considers the organization’s performance goals to represent the best estimate of what the organization could deliver if management, individually and collectively, were to materially satisfy its goals and objectives for the year. All goals are designed to be aggressive yet achievable, with the expectation that it would take extraordinary performance on the part of management to exceed them to the extent necessary to yield maximum incentive payouts under the MIP. The Compensation Committee approves individual performance goals and objectives for the CEO at the beginning of each fiscal year. The CEO also works collaboratively with the other NEOs in developing their respective individual performance goals and in assigning weightings to such goals to place additional emphasis on tactical priorities. Individual performance goals are factors in determining base salary adjustments, annual cash incentive compensation and future awards of long-term incentive compensation. Individual performance goals intentionally include elements that can be rated objectively as well as, to a lesser extent, elements that are of a subjective nature. Individual performance goals are used to drive stretch performance across a broad range of areas considered critical to our strategy and purpose. This mix of objective and subjective criteria allows the evaluator — the independent members of the Board in the case of the CEO, and the CEO with input and approval from the Compensation Committee in the case of the other NEOs — to assess the individual’s performance against objective criteria, while utilizing his or her discretion to make adjustments based on the individual’s perceived contributions and other subjective criteria. A summary of the primary individual performance goals and objectives established for each of our NEOs follows: Lisa W. Wardell (Chairman of the Board, President and CEO) • Successfully navigate the COVID-19 pandemic • Implement Workforce Solutions Provider Strategy across portfolio • Continue building High Performance Team and Succession Planning Robert Phelan (VP, Chief Accounting Officer & Interim CFO) Stephen W. Beard (Chief Operating Officer) Kathy Boden Holland (Group President, Medical & Healthcare Education) • Academic Outcomes and Student Success • Continue Board and Committee Succession Planning • Achieve FY21 Operating Plan • Drive the Talent First Agenda • Maintain and Build upon a Culture of Operational Excellence • Support Adtalem’s Growth Strategy • Successful mergers and acquisitions strategy to streamline Adtalem’s portfolio • Successful execution of Financial Services vertical (financial plan and succession planning) • Implement Workforce Solutions Provider Strategy across portfolio • Successfully navigate the COVID-19 pandemic • “Raise the bar” on talent and succession plans across the vertical • Achieve vertical academic outcome goals • Achieve vertical FY21 Plan for revenue and operating income as well as build organic growth momentum • Ensure progress on the development and execution of the Social Justice Commitments action plans across the vertical • Material and positive progress on execution of enterprise strategy within the vertical, across Adtalem as appropriate, and in collaboration with Corporate Development 51 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Fiscal Year 2021 MIP Decisions Based on an evaluation of organizational performance relative to MIP measures set at the beginning of fiscal year 2021, the final MIP awards were partially based on the following financial results, as adjusted for special items described in Appendix A: • Adtalem achieved 98.0% payout for the fiscal year 2021 revenue component; and • Adtalem achieved 136.5% payout for the fiscal year 2021 adjusted earnings per share component. In addition, a portion of the MIP awards for Ms. Boden Holland was based on results from the performance of the institutions she oversees. Final MIP award calculations also took into consideration evaluations of individual performance for each NEO during the fiscal year. Based on all of these applicable factors, the Compensation Committee approved the following MIP awards to the NEOs: Lisa W. Wardell Robert J. Phelan(1) Stephen W. Beard Douglas G. Beck(2) Kathy Boden Holland Annual Target as a Percentage of Base Salary 110% FY2021 Target Award Opportunity $1,210,000 FY2021 Actual Award $1,489,813 Percent of Target Paid Based on FY2021 Performance 123% 50% and 80% $ 201,753 $ 242,104 80%(1) $ 480,016 $ 619,200 70% 70% $ 15,342 $ 17,490 $ 414,575 $ 458,727 120% 129% 114% 111% (1) Mr. Phelan’s target was increased from 50% to 80% in March 2021 and pro-rated for the period when he was appointed Interim Chief Financial Officer effective April 24, 2021. (2) Douglas Beck’s award was approved by the committee for delivery on a prorata basis for fiscal year 2021 as an arrangement in connection with his offer of employment considering his start date of June 14, 2021. Set forth below, as an example of the MIP calculation for NEOs, is a summary of the calculation of the fiscal year 2021 award for Ms. Wardell: Target Award Opportunity (Weighting) 45% $ Target 2.60 Performance Achieved (Excluding Special Items) 2.98 $ Performance Relative to Target 114.6% Payout as a % of Target Award Opportunity based on Performance Relative to Target 136.5% Target Award Actual Opportunity ($ Amount) Award $ 544,500 $ 743,243 40% $1,116.9 $1,112.4 99.6% 98.0% $ 484,000 $ 474,320 Adtalem Adj. Earnings Per Share Adtalem Revenue Individual Performance 15% Total 150.0% 123.1% $ 181,500 $ 272,250 $1,210,000 $1,489,813 In reviewing Ms. Wardell’s performance, the Compensation Committee evaluated her performance against each of her individual goals and determined a 150% payout for the individual performance component of her MIP award (which represents 15% of the total MIP opportunity) was appropriate. Specifically, the Compensation Committee wanted to recognize Ms. Wardell’s continued role in the transformation of the Company, and in particular, successfully completing the acquisition of Walden University. Additionally, the Committee believes Ms. Wardell had exceeded expectations in continuing to lead the company through the global pandemic and preserving the organization’s financial performance, while at the same time, over-delivering in terms of academic outcomes and succession planning for the Board and management. 52 Adtalem Global Education Inc. Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) The Compensation Committee evaluated the other NEOs against their individual goals taking into consideration the following performance highlights: Robert J. Phelan Stephen W. Beard Mr. Phelan was instrumental in achieving the fiscal year plan, in particular overperforming on operating income through prudent cost measures and planning throughout the pandemic. The Committee also noted Mr. Phelan’s support for the workforce solutions strategy across the portfolio. The Committee recognized Mr. Beard’s exceptional performance in the Financial Services vertical by building out a successful management team and overdelivering on segment revenue growth. In addition, Mr. Beard spearheaded the Walden transaction and managed the integration strategy plan and new operating model to allow for greater execution on the workforce solutions strategy. Douglas G. Beck Although Mr. Beck started at Adtalem on June 14, 2021, the Committee noted his role in the successful completion of the acquisition of Walden University. The Committee also recognized notable talent additions completed by Mr. Beck. Kathy Boden Holland Ms. Boden Holland was recognized by the Committee for achieving growth across medical and healthcare while maintaining and improving academic outcomes, notably NCLEX scores above the national average and residency match rates of 92% for both medical schools. The Committee also noted the progress on social justice initiatives in the medical and nursing institutions. Long-Term Incentive Compensation Long-term incentive compensation at Adtalem consists of PSUs, stock options and RSUs. The Compensation Committee targets the value of long-term incentive compensation for NEOs to represent a substantial percentage of their total compensation opportunity. These incentives are intended to serve three complementary objectives of our compensation program: • Align executives’ long-term interests with those of our shareholders; • Drive achievement of and reward executives for the delivery of long-term business results; and • Promote long-term retention of key executives who are critical to our operations. How the Long-Term Incentive Plan Works The Compensation Committee granted equity awards to each of the NEOs (except Mr. Beck) in August 2020 (RSUs and stock options) and November 2020 (PSUs) based on both retrospective and prospective considerations and organizational and individual considerations. PSU grants were delayed until November in order to give the leadership team and the Compensation Committee time to evaluate the ongoing impacts of COVID-19 on the business and set goals that properly aligned management and shareholder interests. The Compensation Committee took into account the same seven criteria described in the “Annual Base Salary” section above in determining the amount of these awards. Awards were delivered through a mix of stock-based vehicles to provide a reasonable balance to the equity portfolio. Tier CEO, CFO, COO, and Group President Name Lisa W. Wardell Robert J. Phelan Stephen W. Beard Kathy Boden Holland Stock Options RSUs PSUs 33.3% 33.3% 16.7% ROIC/16.7% FCF per share Stock Options: Stock options reward long-term value creation through increases in stock price. To promote retention, stock option grants vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem. The Compensation Committee granted incentive stock options (“ISOs”) with a value of up to the $100,000 Internal Revenue Service (“IRS”) limitation applicable to each one-year vesting period. To the extent this limitation was met for any NEO, the remaining portion of the stock option award was issued in the form of non-qualified stock options. The Compensation Committee recognizes that Adtalem may not receive a tax deduction for ISOs, but weighed this consideration against the tax benefit ISOs provide to employees and the additional enhancement to Adtalem’s ability to attract and retain executives. The Compensation Committee determined it was in Adtalem’s best interest to continue utilizing ISOs in the manner described. Focusing on Long-Term Results The Compensation Committee believes that long-term equity compensation is an important retention tool and, therefore, chose to use a four-year ratable vesting schedule for grants of stock options and RSUs and a three-year cliff vesting schedule for PSUs, to encourage longer- term focus and retention. 53 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) In addition to the annual equity awards made to the NEOs, an RSU grant was awarded to Mr. Phelan in recognition of his appointment to Interim Chief Financial Officer effective April 24, 2021. The grant will vest 100% on the three- year anniversary of the grant date. Mr. Beck received a sign-on equity award, delivered in RSUs, which will vest ratably over a four-year period consistent with other RSUs granted to the NEOs. Restricted Stock Units (RSUs): RSUs align the interests of management with those of shareholders and reward long-term value creation. To promote retention, RSUs vest in equal annual installments over a four-year period beginning on the first anniversary of the grant date, subject to the NEO’s continuous service at Adtalem. Performance Share Units (PSUs): PSUs are designed to reward strong performance based on two financial indicators, ROIC and FCF per share, to focus executives on profitability and effective capital allocation. In fiscal year 2021, PSUs granted to the NEOs were split equally among these two components. These PSUs vest after three years based on ROIC and FCF per share performance, respectively, as compared to the goals outlined in the following tables: Performance Period 1-Year Goal for Fiscal Year 2021 Performance Period 1-Year Goal for Fiscal Year 2021 ROIC Performance Goals (FY21-23) Threshold (50% Payout) 8.0 % Target (100% Payout) 8.8 % Maximum (150% Payout) 9.6 % FCF Per Share Performance Goals (FY21-23) Threshold (50% Payout) $2.59 Target (100% Payout) $2.88 Maximum (150% Payout) $3.17 At the start of the performance period for fiscal year 2021, the average ROIC and FCF per share goals were set for a one-year period as an exception to our normal three-year goal setting process due to challenges in goal setting arising from the COVID-19 pandemic. The Committee further agreed to review and set goals for the remaining two years of the three-year performance period. Similar to goals for the MIP, these goals are based on the multi-year strategic plan. In some cases, stretch goals are built in to help bridge to anticipated future year targets to ensure we are appropriately working towards our long-term strategic plan. In addition, at the onset of fiscal year 2021 we also conducted a comprehensive analysis, examining our payout history, changes to our strategic plan accounting for recent and anticipated corporate transactions and events as well as the target ranges of our closest competitors. This year we also considered the additional challenges as presented by the global pandemic and its impact the business landscape to ensure we are positioning ourselves appropriately considering the market and compared to peers in the industry. Vesting for performance between threshold and target and between target and maximum is determined by straight-line interpolation. The 2021 PSU grant design is consistent with the change introduced in fiscal year 2020 such that vesting will be based on performance averaged over the three-year period. This design change was introduced in 2019 following shareholder questions regarding the need for the previous plan design that used two separate performance calculations to determine funding and also serves to preserve the simplified PSU construct introduced in fiscal year 2020. 54 Adtalem Global Education Inc. Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Fiscal Year 2021 Long-Term Incentive Decisions For fiscal year 2021, NEOs received the following stock-based awards: Lisa W. Wardell Robert Phelan(1) Stephen W. Beard Douglas Beck(2) Kathy Boden Holland Michael O. Randolfi(3) Stock Options RSUs $1,785,580 $1,999,953 $1,999,840 PSUs 2021 Long-Term Incentive Grant $ 47,697 $ 253,628 $ 53,214 $ 461,377 $ 516,644 $ 516,696 — $1,199,824 — $ 327,458 $ 366,744 $ 366,780 $ 327,458 $ 366,744 $ 366,780 $5,785,373 $ 354,539 $1,494,717 $1,199,824 $1,060,982 $1,060,982 (1) Reflects the value of the RSU grant made to Mr. Phelan in connection with his appointment as Interim Chief Financial Officer on April 24, 2021. (2) Reflects the value of Mr. Beck’s sign-on grant delivered in restricted shares on his date of hire, June 14, 2021. (3) Mr. Randolfi forfeited these awards when he resigned from Adtalem effective April 23, 2021. Payouts from Fiscal Year 2019 Performance Share Awards Performance share awards granted in August 2018 to Mr. Beard and Ms. Boden Holland, which included both financial-based PSUs, vested in 2021. The PSU awards were split evenly between ROIC and Free Cash Flow per share targets over the three-year performance period. Final funding is based upon the “better of” either, the 3-year average goal achievement, or the sum of each year’s “banked” results divided by 3. The other NEOs did not receive PSUs for the 2018 cycle. For the FY2019-2021 Plan, the funded result for ROIC is the same in either case at 64.3%, while the “better of result for FCF/share favors the sum of each year’s banked results at 93.8%. The tables below show the performance measures and targets established for the August 2018 PSUs, the performance achieved, and the resulting payout. Goal Financial-Based PSUs ROIC ROIC ROIC ROIC Performance Goals Threshold (50% Payout) Target (100% Payout) Maximum (150% Payout) Payout (as a % of Target) FY2019 FY2020 FY2021 FY2019-2021 (3-year average) 9.2% 10% 11% 12% 7.5% 8.8% 8.5% 9.6% 9.5% 9.2% 12.5% 13.5% 14.5% 84.8% 56% 52% 64.3% 8.5% 11% 13.5% Fiscal Year 2019-2021 PSU ROIC Total Payout as a % of Target: 64.3% 55 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Goal Financial-Based PSUs Free Cash Flow per Share - FY2019 Free Cash Flow per Share - FY2020 Free Cash Flow per Share - FY2021 Free Cash Flow per Share - FY2019-2021 (3-year average) Performance Goals Threshold (50% Payout) Target (100% Payout) Maximum (150% Payout) Payout (as a % of Target) 1.61 2.13 2.73 2.30 2.99 3.04 3.99 2.59 3.72 3.05 4.36 5.66 3.01 2.26 3.23 4.20 131.2% 74.7% 75.6% 88.7% Fiscal Year 2019-2021 PSU Free Cash Flow Total Payout as a % of Target: 93.8% COMPENSATION SETTING PROCESS Role of the Compensation Committee The Compensation Committee determines the appropriate level of compensation for the CEO and other NEOs. The Compensation Committee reviews and approves all components of annual compensation (base salary, annual cash incentive and long-term incentive) to ensure they align with the principles of Adtalem’s compensation program. In addition, the Compensation Committee meets periodically to review the design of the overall compensation program, approve performance targets and review management performance, and it assists in establishing CEO goals and objectives. Each year, the Compensation Committee recommends CEO compensation to the independent members of the Board, taking into consideration the CEO’s performance evaluation and advice from the independent executive compensation consulting firm engaged by the Compensation Committee. In determining the CEO’s long-term incentive compensation, the Compensation Committee considers Adtalem’s absolute and relative performance, incentive awards to CEOs at comparable companies, past awards and the CEO’s expected future contributions, as well as other factors it deems appropriate. The Compensation Committee approves base salary, annual cash incentive and long-term incentive compensation for Adtalem’s NEOs, except for the CEO whose compensation package is recommended by the Compensation Committee and approved by the independent members of the Board during executive session. Role of the Executive Officers and Management The CEO, in consultation with the Senior Vice President, Chief Human Resources Officer, provides the Compensation Committee with compensation recommendations for the other NEOs, including recommendations for annual base salary increases, annual cash incentive awards, and long-term incentive awards. These recommendations are based on market-competitive compensation data and the CEO’s assessment of each NEO’s performance in the prior year. While these recommendations are given significant weight, the Compensation Committee retains full discretion when determining compensation. The Compensation Committee reviews and approves, with any modifications it deems appropriate, base salary, annual cash incentive awards and long-term incentive awards for Adtalem’s NEOs. 56 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Role of the Compensation Consultant The Compensation Committee retains ultimate responsibility for compensation-related decisions. To add objectivity to the review process and inform the Compensation Committee of market trends and practices, the Compensation Committee engages the services of an independent executive compensation advisory firm. For fiscal year 2021, the Compensation Committee engaged Meridian Compensation Partners, LLC (“Meridian”) as its independent executive compensation consultant. F.W. Cook, the Compensation Committee’s previous compensation consultant attended the August 2020 meeting of the Compensation Committee. Meridian attended the meetings from November 2020 through the end of fiscal year 2021. Meridian reviewed Adtalem’s executive compensation structure and incentive plan designs and assessed whether the executive compensation program is competitive and supports the Compensation Committee’s goal to align the interests of executive officers with those of shareholders, students and other stakeholders. For fiscal year 2021, Meridian’s primary areas of assistance were: • Gathering information related to current trends and practices in executive compensation, including peer group and broader market survey data; • Reviewing, analyzing and providing recommendations for Adtalem’s list of peer group companies; • Benchmarking competitive pay levels for NEOs and other executives • Reviewing information developed by management for the Compensation Committee and providing input on such information to the Compensation Committee; • Attending and participating in all Compensation Committee meetings and most non-employee director executive sessions, as well as briefings with the Compensation Committee chair and management prior to meetings; and • Reviewing with management and the Compensation Committee the materials to be used in Adtalem’s Proxy Statement. In the second half of fiscal year 2021, Meridian also conducted a review of our non-employee director compensation program and recommended that we maintain our annual retainer rate throughout fiscal year 2021. Refer to “Director Compensation” beginning on page 36 for more detail. The Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and terms of the engagement. Thus, the Compensation Committee annually reviews its relationship with, and assesses the independence of, its independent consultant to ensure executive compensation consulting independence. The process includes a review of the services the independent consultant provides, the quality of those services, and fees associated with the services during the fiscal year. The Compensation Committee has assessed the independence of its independent consultants pursuant to applicable SEC rules and NYSE listing standards and has concluded that the independent consultants’ work for the Compensation Committee does not raise any conflict of interest. Executive Compensation Peer Group To ensure Adtalem continues to provide total executive compensation that is fair and competitively positioned in the marketplace, the Compensation Committee reviews the pay level, mix and practices of peer group companies. The Compensation Committee does not target any specific percentile levels in establishing compensation levels and opportunities. While including all large publicly-held, private sector higher education schools, Adtalem’s peer group also includes a broader group of organizations in order to provide more comprehensive compensation data. Adtalem’s expanded peer group includes publicly-held organizations that provide services over an extended period of time. In consideration of Adtalem’s significant focus on healthcare education, which requires attracting and retaining seasoned healthcare professionals and executives, the peer group also includes healthcare services companies. Revenue of most of the peer group organizations is generally between one-half and two times Adtalem’s revenue. 57 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) The following peer group was used for fiscal 2021: 2U Inc. Amedisys Cross Country Healthcare Laureate Education Ensign Group MEDNAX, Inc. AMN Healthcare Graham Holdings Company Perdoceo Education Bright Horizons Family Solutions LLC Grand Canyon Education, Inc. Strategic Education Brookdale Senior Living Inc. Houghton Mifflin Harcourt Tivity Health Chegg Chemed John Wiley & Sons WW International K12 ADDITIONAL EXECUTIVE COMPENSATION PRACTICES Deferred Compensation Adtalem maintains the Nonqualified Deferred Compensation Plan that allows certain employees, including the NEOs, to defer up to 50% of salary and 100% of the MIP compensation until termination of service or certain other specified dates. Adtalem credits matching contributions to participants’ accounts to the extent they have elected to defer the maximum contributions under Adtalem’s Retirement Plan, which is a 401(k) plan, and their matching contributions are limited by the Internal Revenue Code of 1986, as amended (the “Code”) provisions. The Nonqualified Deferred Compensation Plan enables the NEOs and other eligible employees with a certain level of annual compensation to save a portion of their income for retirement on a scale consistent with other employees not subject to IRS limits. Adtalem has elected to fund its Nonqualified Deferred Compensation Plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of an insolvency, but the assets held in the rabbi trust are not available for general corporate purpose. Participants have an unsecured contractual commitment by Adtalem to pay the amounts due under the Nonqualified Deferred Compensation Plan. The value of deferred compensation amounts is quantified each year and this program is periodically reviewed for its competitiveness. Other Benefits NEOs are eligible to participate in a number of broad-based benefit programs, which are the same ones offered to most employees at Adtalem, including health, disability and life insurance programs. We do not offer a defined benefit pension plan, and, therefore, our Retirement Plan and the Nonqualified Deferred Compensation Plan are the only retirement savings vehicles for executives. In general, we do not provide benefits or perquisites to our NEOs that are not available to other employees, with the exception of personal financial planning services. Benefits and perquisites make up the smallest portion of each NEO’s total compensation package. The nature and quantity of perquisites provided by Adtalem did not change materially in fiscal year 2021 versus 2020, consistent with our philosophy that benefits and perquisites should not represent a meaningful component of our compensation program. The Compensation Committee periodically reviews the benefit and perquisite program to determine if adjustments are appropriate. The “All Other Compensation” column of the 2021 Summary Compensation Table shows the amounts of benefit and perquisite compensation we provided for fiscal years 2019, 2020 and 2021 to each of the NEOs. 58 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Employment Agreements Adtalem has entered into employment agreements with each NEO that provide for: • Initial annual base salary, subject to annual increases (no decreases except in the case of an across-the-board reduction affecting all executives equally); • Annual cash incentive opportunity under the MIP, targeted at a percentage of base salary; • Benefits and perquisites generally available to senior management; • Reimbursement of expenses consistent with Adtalem’s policy in effect at the time; and • Severance benefits that will be provided upon certain terminations of employment, as further described on page 69 under the caption “2021 Potential Payments Upon Termination or Change-in-Control.” Employment Agreements Employment agreements provide NEOs with a guaranteed level of financial protection upon loss of employment. Adtalem believes that providing for such income continuity results in greater management stability and lower unwanted management turnover. The Compensation Committee believes that agreements provide: • Security and incentives that help retain and attract top executives; • Greater ability for Adtalem to retain key executives following an extraordinary corporate transaction; and • Benefits to Adtalem including non-competition and non-solicitation covenants by NEOs. Separation Agreements Adtalem has entered into a separation agreement with Ms. Boden Holland in connection with her resignation as Group President, Medical and Healthcare effective September 30, 2021. Ms. Boden Holland’s severance benefits were conditioned on signing a release of claims which she executed, and Ms. Boden Holland is subject to non-compete and non-solicitation provisions. Adtalem did not enter into a separation agreement with Mr. Randolfi in connection with his resignation as CFO effective April 23, 2021. Change-in-Control Adtalem provides benefits to its NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (e.g., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, as of November 8, 2017, when our shareholders approved the Fourth Amended and Restated Incentive Plan of 2013 (the “2013 Incentive Plan”), Adtalem’s equity compensation plans, and the award agreements used to implement them, provide for accelerated vesting of outstanding equity awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control. See “2021 Potential Payments Upon Termination or Change-in-Control” beginning on page 69 for a detailed description of potential payments and benefits to the NEOs under Adtalem’s compensation plans and arrangements upon termination of employment or a change of control of Adtalem. 59 2021 Proxy StatementProposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) OTHER EXECUTIVE COMPENSATION CONSIDERATIONS AND POLICIES Stock Ownership Guidelines Stock ownership guidelines have been in place for our directors and executive officers since 2010 and are intended to align their interests with our shareholders by requiring them to be subject to the same long-term stock price volatility our shareholders experience. Each of our non-employee Board members are expected to maintain ownership of Adtalem Common Stock valued at or equal to five times their annual retainer. For fiscal year 2021, required ownership levels for executive officers remained consistent with those put in place in fiscal year 2020 as described in the table below: Position CEO CFO COO Key operational leaders All other executive officers NEOs Lisa W. Wardell vacant Stephen W. Beard Kathy Boden Holland Douglas Beck and Robert Phelan Linking Compensation to Stock Performance Stock ownership guidelines tie the compensation of the NEOs to our stock performance, since the increase or decrease in our stock price impacts their personal holdings. Currently, all NEOs and directors who are no longer subject to a phase-in period have met the minimum ownership requirements. Number of Shares Equivalent to: 5 times base salary 3 times base salary 3 times base salary 2 times base salary 1 1/2 times base salary Our directors and executive officers have five years following their election, date of appointment or promotion to an executive officer position, as the case may be to achieve their stock ownership level. Additionally, our executive officers have until the later of five years from their appointment or adoption of the increased guidelines to achieve the new stock ownership levels. Shares that count toward satisfaction of the guidelines include Adtalem’s Common Stock directly and/or beneficially owned, Adtalem’s Common Stock held in Adtalem’s Retirement Plan, Adtalem’s Common Stock held in Adtalem’s Nonqualified Deferred Compensation Plan, and the after-tax value of unvested RSUs and PSUs and/or vested in-the-money options, provided that these make up no more than 50% of the ownership expectation. Our stock ownership guidelines are deemed to continue to be met by an individual who has achieved the required ownership level but then falls below solely due to a decline in Adtalem’s Common Stock price. Absent extenuating circumstances, executives who have not yet met the guidelines at the end of their five-year phase-in period are required to retain, until the guidelines are satisfied, 100% of the after-tax shares received from option exercises or the vesting of RSUs or PSUs. Incentive Compensation Recoupment Policy Adtalem has adopted an incentive compensation recoupment policy that applies to all executive officers. The policy provides that, in addition to any other remedies available to Adtalem (but subject to applicable law), if the Board or any committee of the Board determines that it is appropriate, Adtalem may recover (in whole or in part) any incentive payment, commission, equity award or other incentive compensation received by an executive officer of Adtalem to the extent that such incentive payment, commission, equity award or other incentive compensation is or was paid on the basis of any financial results that are subsequently restated due to executive officer conduct that is determined by the independent directors to have been knowingly or intentionally, fraudulent or illegal. Deductibility of Compensation Adtalem analyzes the overall expense arising from aggregate executive compensation, as well as the accounting and tax treatment of such programs. Section 162(m) of the Code generally disallows a tax deduction to publicly traded companies for certain compensation in excess of $1 million per year paid to “covered employees.” “Covered employees” include the Chief Executive Officer, the Chief Financial Officer and the three other most highly compensated officers. Once an executive officer qualifies as a covered employee, he or she will continue to be treated as a covered employee indefinitely, even after ceasing to serve as an executive officer or separating from Adtalem. Historically, the company’s compensation plans were structured so that compensation would be performance-based and deductible under Section 162(m) of the Code. However, The Tax Cuts and Jobs Act enacted on December 22, 2017 eliminated the performance-based compensation exemption 60 Adtalem Global Education Inc.Proposal No. 3 Say-on-pay: Advisory Vote to Approve the Compensation of Our Named Executive Officers (“NEOs”) from the Section 162(m) $1 million per year dollar deduction limit, with an exception for certain “grandfathered agreements” in effect on November 2, 2017. The company intends to administer outstanding “grandfathered agreements” and plans to the extent compatible with business needs to preserve potential deductions. The Compensation Committee views the tax deductibility of executive compensation as one factor to be considered in the context of its overall compensation philosophy. The Compensation Committee reviews each material element of compensation on a continuing basis and believes that shareholder interests are best served by not restricting the Compensation Committee’s discretion and flexibility in crafting compensation programs, even though such programs may result in certain non-deductible compensation expenses. Accordingly, the Compensation Committee has approved and may in the future approve compensation arrangements for executive officers that are not fully deductible. Compensation Risk Analysis The Compensation Committee, with the assistance of its consultant, Meridian Compensation Partners, LLC, conducted an annual assessment of our compensation program to ensure it does not encourage unnecessary or excessive risk taking that could have an adverse effect on Adtalem. The risk assessment covered all compensation programs, including those in which our top executives and NEOs participate. Through this process, Meridian and the Compensation Committee have concluded that Adtalem’s compensation programs do not encourage behaviors that could create material risk to the organization. More specifically, the Compensation Committee concluded that: • Adtalem’s compensation programs are well-designed to encourage behaviors aligned with the long-term interests of shareholders. • There is appropriate balance in the executive compensation program structure to mitigate compensation-related risk with fixed and variable pay, cash and equity, corporate and business unit goals, financial and non-financial goals, and formulas and discretion. • The Compensation Committee has approved policies to mitigate compensation risk, including stock ownership guidelines, insider-trading prohibitions, and clawbacks. • Additionally, the Compensation Committee exercises an appropriate level of independent oversight into compensation decisions and related risk. Prohibition on Hedging and Pledging Our insider trading policy prohibits employees and directors from engaging in any transaction that is designed to hedge or offset any decrease in the market value of equity securities issued by Adtalem. In addition, except as expressly approved by our general counsel, employees and directors may not hold Adtalem securities in a margin account or pledge Adtalem securities as collateral for a loan. None of our executive officers or directors have requested approval to hold Adtalem securities in a margin account or to pledge Adtalem securities. COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board hereby furnishes the following report to the shareholders of Adtalem in accordance with rules adopted by the SEC. The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis of this Proxy Statement with Adtalem’s management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis be included in this Proxy Statement. This report is submitted on behalf of the members of the Compensation Committee: Michael W. Malafronte, Chair William W. Burke Lyle Logan Kenneth J. Phelan 61 2021 Proxy StatementExecutive Compensation Tables 2021 SUMMARY COMPENSATION TABLE This table shows the compensation of each of our NEOs for fiscal years ended June 30, 2021, June 30, 2020 and June 30, 2019, respectively. Salary Year ($)(1) 2021 1,100,000 Bonus ($)(2) Stock Awards ($)(3) Option Awards ($)(4) — 3,999,793 1,785,580 2020 1,100,000 — 2,819,481 1,720,074 2019 1,083,654 — — — Non-Equity Incentive Plan Compensation ($)(5) 1,489,813 1,198,082 1,135,605 All Other Compensation(6) ($) Total ($) 153,247 8,528,433 133,442 6,971,079 153,935 2,373,194 2021 350,000 60,000 306,842 47,697 242,104 37,493 1,044,136 2021 2020 2019 2021 600,020 597,558 535,700 — — 1,033,340 461,377 — 600,084 365,919 — 449,790 — 1,199,824 324,666 — 619,200 562,723 388,913 17,490 87,943 2,801,880 40,534 2,166,818 23,341 1,722,410 — 1,217,314 2021 2020 2019 2021 2020 592,250 588,933 575,000 — 733,524 327,458 — 540,207 329,412 — 450,279 324,666 458,727 378,611 405,226 60,034 2,171,993 52,527 1,889,690 39,054 1,794,225 519,231 — 733,524 327,458 — 484,615 400,000 2,499,697 457,611 354,640 19,292 1,599,505 14,895 4,211,458 Name and Principal Position Lisa W. Wardell Chairman of the Board, Chief Executive Officer and President Robert J. Phelan(7) Interim Chief Financial Officer Stephen W. Beard Chief Operating Officer Douglas G. Beck(8) Senior Vice President, General Counsel and Corporate Secretary Kathy Boden Holland Group President, Medical and Healthcare Education Michael O. Randolfi(9) Former Senior Vice President and Chief Financial Officer (1) This column shows the salaries paid by Adtalem to its NEOs in fiscal years 2021, 2020, and 2019. The following NEOs have elected to defer a portion of their salaries under the Nonqualified Deferred Compensation Plan: Ms. Wardell ($309,132 for 2021, $261,230 for 2020, and $32,510 for 2019); Mr. Beard ($144,477 for 2021 and $9,975 for 2020); and Ms. Boden Holland ($263,714 for 2021, $485,124 for 2020, and $35,385 for 2019). Amounts shown are inclusive of these deferrals. (2) This column includes (i) the $60,000 sign-on bonus paid to Mr. Phelan in fiscal year 2021; and (ii) the $400,000 signing bonus paid to Mr. Randolfi in fiscal year 2020. (3) This column includes a sign-on grant value of $1,199,824 to Mr. Beck delivered in restricted shares in fiscal year 2021 and a sign-on grant value of $1,749,919 to Mr. Randolfi delivered in restricted shares in fiscal year 2020. The amounts reported in the Stock Awards column represents the grant date fair value of awards of both PSUs and RSUs, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years 2021, 2020, and 2019 calculations can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021; Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2020; and Note 5: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2019, respectively. The grant date fair values of the PSUs are based on the probable outcome of the performance conditions to which the PSUs are subject, and the shares the recipient would receive under such outcome. The 2021 Grants of Plan-Based Awards shows the values of PSU awards, assuming that the highest levels of the performance conditions are achieved. The grant date fair value of the PSUs is $28.61. The grant date fair value of the PSU awards assuming achievement of maximum performance would be: Ms. Wardell – $2,999,760; Mr. Phelan – $79,821; Mr. Beard – $775,044; Ms. Boden Holland – $550,170 and Mr. Randolfi – $550,170. 62 Adtalem Global Education Inc. Executive Compensation Tables (4) The amounts reported in the Options Awards column represent the grant date fair value, which is an estimated value computed in accordance with FASB ASC Topic 718. The assumptions used for fiscal years 2021, 2020, and 2019 calculations can be found at Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021; Note 17: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2020; and Note 5: Stock-Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2019, respectively. (5) The MIP compensation reported in this column was earned in fiscal years 2021, 2020, and 2019 and paid in fiscal years 2022, 2021, and 2020, respectively, based upon the MIP guidelines. Certain NEOs have elected to defer a portion of their MIP compensation under the Nonqualified Deferred Compensation Plan, specifically: Ms. Wardell ($148,981 for 2021, $119,808 for 2020, and $113,560 for 2019); Mr. Beard ($61,920 for 2021 and $56,272 for 2020); and Ms. Boden Holland ($344,045 for 2021, $189,305 for 2020, and $392,246 for 2019). Amounts shown are inclusive of these deferrals. (6) The amounts indicated in the “all other compensation” column for 2021 include the following: • Matching contributions credited under the Retirement Plan for Ms. Wardell ($11,838); Mr. Phelan ($16,004); Mr. Beard ($16,916); Ms. Boden Holland ($15,823); and Mr. Randolfi ($8,308). • Company contributions credited under the Nonqualified Deferred Compensation Plan for Ms. Wardell ($123,323); Mr. Beard ($54,049); and Ms. Boden Holland ($42,518). • Group life insurance premiums paid by Adtalem for Ms. Wardell ($2,086); Mr. Phelan ($1,489); Mr. Beard ($978); Ms. Boden Holland ($1,693); and Mr. Randolfi ($685). • Personal financial planning services for Ms. Wardell ($16,000); Mr. Beard ($16,000); and Mr. Randolfi ($8,000). • Monthly stipend of $10,000 per month paid to Mr. Phelan in his role as interim Chief Financial Officer for Mr. Phelan ($20,000). • Lump sum payout of unused vacation days for Mr. Randolfi ($2,299). (7) Mr. Phelan was appointed Interim Chief Financial Officer on April 24, 2021. (8) Mr. Beck joined Adtalem as Senior Vice President, General Counsel and Corporate Secretary on June 14, 2021. (9) Mr. Randolfi resigned effective April 23, 2021. Employment Agreements with Chief Executive Officer and Other Named Executive Officers Adtalem has entered into employment agreements with each of its NEOs, which are described on pages 69-70 under the caption “Employment Agreements.” 63 2021 Proxy StatementExecutive Compensation Tables 2021 GRANTS OF PLAN-BASED AWARDS This table sets forth information regarding non-equity incentive plan awards, equity incentive plan awards, RSUs and stock options granted to the NEOs in fiscal year 2021. Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) Estimated Future Payouts Under Equity Incentive Plan Awards(5) Threshold ($)(2) Target ($)(3) Maximum ($)(4) Threshold (#) Target (#) Maximum (#) 605,000 1,210,000 2,420,000 All Other Stock Awards: Number of Shares of Stock or Units (#) All Other Option Awards: Number of Securities Underlying Options (#)(6) Exercise or Base Price of Option Awards ($/sh)(7) Grant Date Fair Value of Stock and Option Awards(8) 34,950 69,900 104,850 146,000 62,440 $1,999,840 32.03 $1,785,580 $1,999,953 100,877 201,753 403,506 930 1,860 2,790 3,900 $ 53,214 32.03 $ 47,697 $ 53,490 $ 200,138 1,670 5,440(9) 240,008 480,016 960,032 7,671 15,342 30,684 9,030 18,060 27,090 37,725 $ 516,696 32.03 $ 461,377 $ 516,644 16,130 207,288 414,575 829,150 6,410 12,820 19,230 195,945 391,890 783,780 6,410 12,820 19,230 31,140(10) $1,199,824 12,820 $ 366,780 32.03 $ 327,459 $ 366,744 26,775 $ 366,780 32.03 $ 327,458 $ 366,744 11,450 11,450 Grant Date Lisa W. Wardell 11/17/2020 8/26/2020 8/26/2020 Robert J. Phelan(9) 11/17/2020 8/26/2020 8/26/2020 5/12/2021 Stephen W. Beard 11/17/2020 8/26/2020 8/26/2020 Douglas G. Beck(10) 6/14/2021 Kathy Boden Holland 11/17/2020 8/26/2020 8/26/2020 Michael O. Randolfi 11/17/2020 8/26/2020 8/26/2020 (1) Payouts under the MIP were based on performance in fiscal year 2021. Therefore, the information in the “Threshold,” “Target” and “Maximum” columns reflect the range of potential payouts when the performance goals were set on August 26, 2020. The amounts actually paid under the MIP for fiscal year 2021 appear in the “Non-Equity Incentive Plan Compensation” column of the 2021 Summary Compensation Table. (2) Pursuant to the MIP, performance below a performance goal threshold will result in no payment with respect to that performance goal. If a performance goal threshold is met, then the amount shown in this column represents the minimum incentive payment, 50% of the target. (3) The amount shown in this column represents the target incentive payment under the MIP, which is calculated as a set percentage of base salary. 64 Adtalem Global Education Inc.Executive Compensation Tables (4) Pursuant to the MIP, the amount shown in this column represents the maximum incentive payment, 200% of the target. (5) PSUs were granted under the 2013 Incentive Plan. The awards consist of 50% with a target based on ROIC over a period of three fiscal years and 50% with a target based on FCF per share over a period of three fiscal years. PSUs will pay out 0% for below threshold performance, and between 50% of target payout for threshold performance and 150% of target for achieving maximum performance or above. Straight-line interpolation will be used to determine achievement between threshold and target. (6) Stock option awards on August 26, 2020 were issued as part of the annual incentive award under the 2013 Incentive Plan, which become exercisable at 25% per year for four years beginning on the first anniversary of the date of grant and have a maximum term of ten years. (7) All options granted on August 26, 2020 have an exercise price equal to the closing sales price of the Common Stock on the date of grant. (8) This column shows the grant date fair value of PSUs (assuming payout at target value) granted on November 17, 2020 and RSUs and stock options granted on August 26, 2020, in fiscal year 2021, computed in accordance with FASB ASC Topic 718, which was $12.23 for stock options, $32.03 for RSUs, and $28.61 for PSUs. Also see Note 17: Stock- Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended June 30, 2021 for an explanation of the assumptions made by Adtalem in the valuation of stock option awards. (9) These RSUs were granted in connection with Mr. Phelan’s appointment as Interim Chief Financial Officer. (10) These RSUs were granted in connection with Mr. Beck’s onboarding package when joining Adtalem to replace awards he forfeited when he resigned from his former employer. 65 2021 Proxy StatementExecutive Compensation Tables 2021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END This table sets forth information for each NEO with respect to stock options, RSUs and PSUs held by the NEOs as of June 30, 2021. Option Awards Stock Awards Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(5) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) Number of Shares or Units of Stock That Have Not Vested (#)(2) Market Value of Shares or Units of Stock That Have Not Vested ($)(3) 78,685 2,804,333 113,220 4,035,161 12,957 461,787 1,860 66,290 23,231 827,953 31,140 1,109,830 31,860 — 1,135,490 — Number of Securities Underlying Unexercised Options (#) Exercisable 179,589 180,318 167,988 25,325 — — Number of Securities Underlying Unexercised Options (#) Unexercisable — — 167,987 75,975 146,000 3,900 Option Exercise Price ($) Option Expiration Date(1) 17.54 5/26/2026 23.78 8/25/2026 33.90 8/23/2027 43.39 8/28/2029 32.03 8/26/2030 32.03 8/26/2030 7,738 16,163 37,725 49.05 8/22/2028 43.39 8/28/2029 32.03 8/26/2030 7,738 14,550 49.05 8/22/2028 43.39 8/28/2029 26,775 32.03 8/26/2030 7,737 5,387 — 7,737 4,850 — 6,737 Name Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck Kathy Boden Holland Michael O Randolfi — 43.39 4/24/2022 17,451 — 621,954 — 32,670 — 1,164,359 — (1) The table below details the vesting schedule for stock option grants based on the termination date of the relevant grant. In general, option grants vest 25% on each of the first four anniversaries of the date of grant, except for Ms. Wardell’s August 23, 2027 expiration dated grant related to a double grant awarded that vests 50% on each of the third and fourth anniversaries of the date of grant. Ms. Wardell’s May 26, 2026 expiration dated grant relates to an option granted to her as part of an initial sign-on award granted upon her appointment as President and CEO to compensate for forgone compensation at her prior employer and to align her compensation with Adtalem’s performance. Option Expiration Dates Grant Dates Option Vesting Dates 8/22/2028 8/28/2029 8/26/2030 8/22/2018 8/22/2019 8/22/2020 8/22/2021 8/22/2022 8/28/2019 8/28/2020 8/28/2021 8/28/2022 8/28/2023 8/26/2020 8/26/2021 8/26/2022 8/26/2023 8/26/2024 66 Adtalem Global Education Inc.(2) The table below details the vesting schedule for RSUs, which vest 25% on each of the first four anniversaries of the date of grant, except for Mr. Phelan’s February 12, 2020 and May 12, 2021 dated grants. In addition to the annual grant, Mr. Phelan received a RSU grant on February 12, 2020 as part of an initial sign-on award granted upon his appointment as Chief Accounting Officer, which vests 33% on each of the first, second, and third anniversaries of the date of grant and a RSU grant on May 12, 2021 as part of compensation upon his appointment as Interim Chief Financial Officer, which vests 100% on the third anniversary of the date of grant. Executive Compensation Tables Name Lisa W. Wardell Lisa W. Wardell Robert J. Phelan Robert J. Phelan Robert J. Phelan Stephen W. Beard Stephen W. Beard Stephen W. Beard Stephen W. Beard Douglas G. Beck Kathy Boden Holland Kathy Boden Holland Kathy Boden Holland Kathy Boden Holland Grant Date Number of RSUs Vesting 8/28/2019 Year 1 — Year 2 5,415 Year 3 5,415 Year 4 5,415 8/26/2020 15,610 15,610 15,610 15,610 2/12/2020 8/26/2020 5/12/2021 2/13/2018 8/22/2018 8/28/2019 8/26/2020 6/14/2021 5/9/2018 8/22/2018 8/28/2019 — 417 — — — — 4,032 7,785 — — — 8/26/2020 2,862 2,923 418 — — — 1,153 4,033 7,785 — — 1,038 2,863 2,924 417 5,440 — 1,147 1,152 4,032 7,785 — 765 1,037 2,862 — 418 — 1,348 1,148 1,153 4,033 7,785 1,358 765 1,038 2,863 Total 16,245 62,440 5,847 1,670 5,440 1,348 2,295 3,458 16,130 31,140 1,358 1,530 3,113 11,450 (3) Represents the value derived by multiplying the number of shares of Common Stock covered by RSUs granted by $35.64 (the closing market price of Adtalem’s Common Stock on June 30, 2021). (4) The table below details the vesting schedule for PSUs. In general, PSUs vest following the third anniversary of their grant date. Name Lisa W. Wardell Lisa W. Wardell Robert J. Phelan Stephen W. Beard Stephen W. Beard Stephen W. Beard Kathy Boden Holland Kathy Boden Holland Kathy Boden Holland Kathy Boden Holland Grant Date Vesting Date Number of PSUs Vesting at Target 8/28/2019 8/28/2022 11/17/2020 8/26/2023 11/17/2020 8/26/2023 8/22/2018 8/22/2021 8/28/2019 8/28/2022 11/17/2020 8/26/2023 5/9/2018 8/22/2021 8/22/2018 8/22/2021 8/28/2019 8/28/2022 11/17/2020 8/26/2023 43,320 69,900 1,860 4,580 9,220 18,060 5,430 6,120 8,300 12,820 (5) Represents the value derived by multiplying the number of shares of Common Stock covered by the PSUs by $35.64 (the closing market price of Adtalem’s Common Stock on June 30, 2021). The value provided assumes a PSU payout at target value. 67 2021 Proxy StatementExecutive Compensation Tables 2021 OPTIONS EXERCISES AND STOCK VESTED This table provides information for the NEOs concerning stock options that were exercised and PSUs and RSUs that vested during fiscal year 2021. Name Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck Kathy Boden Holland Michael O. Randolfi Option Awards Stock Awards Number of Shares Acquired on Exercise (#) 26,237 Value Realized on Exercise ($)(1) 971,525 Number of Shares Acquired on Vesting (#) 141,120 Value Realized on Vesting ($)(2) 4,676,918 — — — — — — — — — — 2,923 3,647 — 3,159 17,572 118,849 131,325 — 110,073 587,081 (1) Value Realized on Exercise. If the exercise was executed as part of a cashless transaction where the shares acquired were immediately sold, this represents the difference between the sales price of the shares acquired and the option exercise price multiplied by the number of shares of Common Stock covered by the options exercised. If the exercise was executed as part of a buy and hold transaction, this represents the difference between the closing market price of the Common Stock for the date of exercise of the option and the option exercise price multiplied by the number of shares of Common Stock covered by the options held. (2) Value Realized on Vesting. For Ms. Wardell, this amount includes PSUs originally granted in August 2017 that vested in August 2020 and RSUs originally granted in August 2016 and August 2019 that vested in August 2020. For Mr. Phelan, this amount represents RSUs originally granted in February 2020 that vested in February 2021. For Mr. Beard, this amount represents RSUs originally granted in February 2018 that vested in February 2021 and RSUs originally granted in August 2018 and August 2019 that vested in August 2020. For Ms. Boden Holland, this amount represents RSUs originally granted in May 2018 that vested in May 2021 and RSUs originally granted in August 2018 and August 2019 that vested in August 2020. For Mr. Randolfi, this amount represents RSUs originally granted in August 2019 that vested in August 2020. 2021 NONQUALIFIED DEFERRED COMPENSATION This table sets forth information about activity for NEOs in our Nonqualified Deferred Compensation Plan during fiscal year ended June 30, 2021. Name Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck Kathy Boden Holland Michael O. Randolfi Executive Contributions in Last Fiscal Year ($)(1) 309,132 Registrant Contributions in Last Fiscal Year ($)(2) — Aggregate Earnings in Last Fiscal Year ($)(3) 360,967 — 144,477 — 263,714 — — — — — — Aggregate Balance at Last Fiscal Year End ($)(4) 1,803,407 — 155,720 — — 657 — 332,762 1,295,963 — — (1) Executive Contributions in Last Fiscal Year. The amount of executive contributions made by each NEO and reported in this column is included in each NEO’s compensation reported on the 2021 Summary Compensation Table, either in the “Salary” or “Non-Equity Incentive Plan Compensation” column. See footnotes 1 and 5 of the 2021 Summary Compensation Table for specific deferrals made by each NEO. (2) Registrant Contributions in Last Fiscal Year. The amount of Adtalem contributions made and reported in this column is included in each NEO’s compensation reported on the 2021 Summary Compensation Table in the “All Other Compensation” column. (3) Aggregate Earnings in Last Fiscal Year. These amounts represent the earnings in the Nonqualified Deferred Compensation Plan for fiscal year 2021. These amounts are not reported in the 2021 Summary Compensation Table. (4) Aggregate Balance at Last Fiscal Year End. The aggregate balance as of June 30, 2021 reported in this column for each NEO reflects amounts that either are currently reported or were previously reported as compensation in the 2021 Summary Compensation Table for current or prior years, except for the aggregate earnings on deferred compensation. 68 Adtalem Global Education Inc.Executive Compensation Tables DEFERRED COMPENSATION PLAN The Nonqualified Deferred Compensation Plan covers directors and selected key employees approved for participation by the Compensation Committee. All of the NEOs are eligible to participate in the Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan as it applies to employees, participants may make an advance election to defer up to 50% of salary and up to 100% of MIP compensation until termination of service with Adtalem or certain other specified dates. Adtalem credits matching contributions to participants’ accounts under the Nonqualified Deferred Compensation Plan to the extent they have elected to defer the maximum amount under Adtalem’s Retirement Plan, and their matching contributions to the Retirement Plan are limited by applicable Code provisions. Adtalem may also credit participants’ accounts with discretionary contributions. Participants are fully vested in their own deferral and matching contributions, plus earnings, and will vest in discretionary contributions, if any, as determined by the Compensation Committee. Participants may elect to have their Nonqualified Deferred Compensation Plan accounts credited with earnings based on various investment choices made available by the Compensation Committee for this purpose. Participants may elect to have account balances paid in a lump sum or in installments. Distributions are generally made or commence in January of the year following termination of employment (but not earlier than six months after termination) or January of the year in which the specified payment date occurs. In the event of death before benefits commence, participants’ accounts will be paid to their beneficiaries in a lump sum. 2021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL Adtalem provides benefits to the NEOs upon termination of employment from Adtalem in specific circumstances. These benefits are in addition to the benefits to which these NEOs would be generally entitled upon a termination of employment (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). In addition, Adtalem’s equity compensation plans and the stock award agreements used to implement them provide for accelerated vesting of outstanding stock awards in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control. Employment Agreements MS. WARDELL Adtalem entered into an employment agreement with Ms. Wardell effective as of her May 24, 2016 appointment as President and CEO. The employment agreement provides, among other things, that if her employment is terminated by Adtalem without “cause” or by Ms. Wardell with “good reason,” and if she executes a release of claims, she will be entitled to a lump sum payment equal to 12 months of base salary and a prorated MIP award based on actual performance for the fiscal year and paid in a lump sum at the same time MIP awards are paid to other employees. If such termination of employment occurs within 12 months of a “change-in-control,” and she executes a release of claims, she will be entitled to (i) a lump sum payment equal to two times base salary and the average of the MIP award paid to her for the prior two fiscal years; and (ii) accelerated vesting of all outstanding stock options. Effective September 8, 2021, Adtalem entered into a new employment agreement with Ms. Wardell in connection with her appointment as Executive Chairman. 3 Effective September 8, 2021, Adtalem entered into a new employment agreement in connection with Mr. Beard’s appointment as President and Chief Executive Officer. 69 2021 Proxy StatementExecutive Compensation Tables OTHER NEOs During 2021, Adtalem was party to similar employment arrangements with each of the other NEOs: Mr. Beard3, Mr. Beck, and Ms. Boden Holland. Adtalem and Mr. Phelan are parties to a Letter Agreement. Adtalem also had an employment agreement with Mr. Randolfi. These employment agreements provide, among other things, that if the NEO’s employment with Adtalem is terminated by Adtalem without “cause” or by the NEO with “good reason”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits: • One and one-half times the sum of their base salary plus target MIP award, payable in 18 equal monthly payments for Mr. Beard, Mr. Beck, and Ms. Boden Holland; • A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees; • 18 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and • Access to a senior executive level outplacement program for 9 months for Mr. Beard, Mr. Beck, and Ms. Boden Holland. In addition, the employment arrangements provide that if such termination occurs within 12 months of a “change-in- control”, and the NEO executes a release of claims, then the NEO will be entitled to the following benefits: • Two times the sum of their base salary plus target MIP award, payable in 24 equal monthly payments for Mr. Beard, Mr. Beck, and Ms. Boden Holland; • A pro-rated MIP award (if employed for at least six months in the fiscal year during which termination occurs) based on actual performance for the relevant fiscal year, paid in a lump sum at the time MIP awards are paid to other employees; • 24 months of continued health benefit plan coverage for Mr. Beard, Mr. Beck, and Ms. Boden Holland at active employee rates following the termination date; and • Access to a senior executive level outplacement program for 12 months for Mr. Beard, Mr. Beck, and Ms. Boden Holland. For purposes of all employment agreements: • “cause” means (i) the commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving misappropriation, dishonesty, fraud, illegal drug use or breach of fiduciary duty, (ii) willful failure to perform duties as reasonably directed by the CEO, (iii) the NEO’s gross negligence or willful misconduct with respect to the performance of the NEO’s duties under the employment agreement, (iv) obtaining any personal profit not fully disclosed to and approved by Adtalem’s Board in connection with any transaction entered into by, or on behalf of, Adtalem, or (v) any other material breach of the employment agreement or any other agreement between the NEO and Adtalem; • “change-in-control” shall have the meaning set forth in the 2013 Incentive Plan; and • “good reason” means, without the NEO’s consent, (i) material diminution in title, duties, responsibilities or authority, (ii) reduction of base salary, MIP target or employee benefits except for across-the-board changes for executives at the NEO’s level, (iii) exclusion from executive benefit/compensation plans, (iv) material breach of the employment agreement that Adtalem has not cured within 30 days after the NEO has provided Adtalem notice of the material breach which shall be given within 60 days of the NEO’s knowledge of the occurrence of the material breach, or (v) resignation in compliance with securities, corporate governance or other applicable law (such as the US Sarbanes-Oxley Act) as specifically applicable to the NEO. For Mr. Beard and Ms. Boden Holland, the definition of “good reason” also includes, without the NEO’s consent, requiring the NEO to relocate to an employment location more than 50 miles from the NEO’s current employment location. EQUITY AWARD PLANS The equity award agreements under which options, RSUs and PSUs are held by employees, including the NEOs, provide for the immediate vesting of unvested options and RSUs and of PSUs at the target levels in the event of a change-in-control of Adtalem, only in the event (a) Adtalem (or its successor) ceases to be publicly traded, (b) the successor to Adtalem fails to assume outstanding awards or to issue new awards in replacement of outstanding awards, or (c) if the participant is terminated without cause or resigns for good reason within two years following the change-in-control. 70 Adtalem Global Education Inc.Executive Compensation Tables The provisions of the equity award agreements under which options, RSUs and PSUs were granted to employees, including the NEOs, provide the following: • If the participant’s employment is terminated due to death or disability (as defined in the agreement), options will become fully vested and exercisable for the remaining term of the option, RSUs will fully vest, and PSUs will continue to vest in accordance with their terms. • If the participant’s employment terminates due to mutual agreement, the participant will be credited with one additional year of service for the purpose of determining vesting of options, RSUs and PSUs. The participant’s options will remain exercisable until the earlier of one year from termination or the expiration of the term of the option. PSUs that vest following a termination will be paid out when paid out to other PSU recipients. • If the participant’s employment terminates due to retirement, options will continue to vest and be exercisable, and RSUs and PSUs will continue to vest in accordance with their respective terms. Retirement means the participant’s termination without cause after age 55 when the sum of his or her age and full years of service equals or exceeds 65. In August 2017, the Board adopted double-trigger vesting of equity awards as part of the 2013 Incentive Plan. In November 2017, Adtalem’s shareholders approved the 4th Amended 2013 Incentive Plan. As a result, vesting of equity awards granted since November 2017 (the “Awards”) will accelerate upon a change-in-control only in the event Adtalem (or its successor) ceases to be publicly traded, or the successor to Adtalem fails to assume outstanding Awards or to issue new awards in replacement of outstanding Awards. Under the new double-trigger vesting rules, newly issued Awards will vest if a participant is terminated without cause or resigns for good reason within two years following a change-in-control. All Awards issued prior to shareholder approval in November 2017 will continue to have a single-trigger vesting rules as described above. 2021 Potential Severance Payments The tables set forth below quantify the additional benefits as described above that would be paid to each NEO under the following termination of employment or change-in-control events, had such an event occurred on June 30, 2021. TERMINATION OF EMPLOYMENT — NO CHANGE-IN-CONTROL Name: Salary: MIP Target Amount: Pro-Rated MIP: Lisa W. Wardell Robert J. Phelan $ 1,100,000 $ 33,654 Stephen W. Beard $ 900,030 Douglas G. Beck $750,000 Kathy Boden Holland $ 888,375 Michael O. Randolfi(1) $ — $ — $ — $ 720,024 $ 23,013 $ 621,863 $ 1,489,813 $242,104 $ 619,200 $ 17,490 $ 458,727 Continued Health Coverage: Outplacement Services: $ $ — $ 9,084 — $ 10,000 $ $ 27,252 15,000 $ 26,694 $ 11,250 $ $ 26,694 11,250 TOTAL $ 2,589,813 $294,842 $ 2,281,506 $828,447 $ 2,006,909 (1) Mr. Randolfi received no compensation in connection with his voluntary separation from the Company in April 2021. TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE-IN-CONTROL $ — $ — $ — $ — $ — Name: Salary: MIP Target Amount: Pro-Rated MIP: Continued Health Coverage: Outplacement Services: Value of Vesting of Unvested Stock Options, RSUs, and PSUs(1) Lisa W. Wardell Robert J. Phelan $ 2,200,000 $ 33,654 Stephen W. Beard Douglas G. Beck $ 1,200,040 $ 1,000,000 Kathy Boden Holland $ 1,184,500 $ 1,343,947 $ — $ 960,032 $ 30,684 $ 829,150 $ $ $ — $242,104 $ 619,200 $ 17,490 $ 458,727 — $ 9,084 — $ 10,000 $ $ 36,336 $ 35,592 20,000 $ 15,000 $ $ 35,592 15,000 $ 7,658,851 $ — $ 2,099,630 $ 1,109,830 $ 1,882,970 TOTAL $11,202,798 $294,842 $ 4,935,238 $ 2,208,596 $ 4,405,939 (1) The value of the unvested stock options is based on the difference between the exercise price and $35.64 (the closing market price of the Common Stock on June 30, 2021). The value of the RSUs and PSUs is based on the closing market price of the Common Stock on June 30, 2021. PSUs vest at the target level. 71 2021 Proxy StatementExecutive Compensation Tables CHANGE-IN-CONTROL — NO TERMINATION OF EMPLOYMENT Name: Value of Vesting of Unvested Stock Options, RSUs, and PSUs(1) Lisa W. Wardell $ 7,658,851 Robert J. Phelan Douglas G. Stephen W. Beard Beck $ — $ 2,099,630 $ 1,109,830 Kathy Boden Holland $ 1,882,970 (1) The value of the unvested stock options is based on the difference between the exercise price and $35.64 (the closing market price of the Common Stock on June 30, 2021). The value of RSUs and PSUs is based on the closing market price of the Common Stock on June 30, 2021. PSUs vest at target level. CEO PAY RATIO Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of all our employees (except our CEO) and the ratio of the annual total compensation of our President and CEO, Ms. Wardell, as disclosed in the 2021 Summary Compensation Table, to the annual total compensation of our median employee. In 2021, we identified the median employee by comparing the annual salary rate of pay for all individuals, excluding our CEO, who were employed by Adtalem on June 30, 2021 using information from our company payroll system. We included all full-time and part-time employees, including adjunct faculty and federal work-study student workers, but did not include independent contractors and leased workers. Compensation was annualized for all employees who were hired by us in fiscal year 2021 but did not work for us for the entire year. No annualization was applied to any adjunct faculty or federal work-study student workers as permitted under the rules. Fiscal year 2021 annual total compensation for the median employee was calculated in the same manner as reflected in the 2021 Summary Compensation Table for our CEO. Based on the methodology described above, we have determined that our estimation of the fiscal year 2021 annual total compensation of our median employee was $76,663. The annual total compensation of our CEO for fiscal year 2021 was $8,528,433, which is the same amount reported for 2021 as Total Compensation in the Summary Compensation Table. Our estimation of the ratio of our CEO’s fiscal year 2021 annual total compensation to the fiscal year 2021 annual total compensation of our median employee is 111:1. This CEO pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The CEO pay ratio reported by other companies may not be comparable to our CEO pay ratio reported above, because SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their compensation practices. 72 Adtalem Global Education Inc.Voting Securities and Principal Holders EQUITY COMPENSATION PLAN INFORMATION Adtalem currently maintains two equity compensation plans: the Amended and Restated Incentive Plan of 2005 (the “2005 Incentive Plan”) and the Fourth Amended 2013 Incentive Plan. Adtalem’s shareholders have approved each of these plans. The following table summarizes information, as of June 30, 2021, relating to these equity compensation plans under which Adtalem’s Common Stock is authorized for issuance. Number of securities to be issued upon exercise of outstanding options, awards, warrants and rights (a)(1) 2,449,054 Weighted-average exercise price of outstanding options, awards, warrants and rights (b) $32.05 Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(2) 3,688,061 — — — Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total 2,449,054 $32.05 3,688,061 (1) The number shown in column (a) is the number of shares that may be issued upon exercise of outstanding options and other equity awards granted under the shareholder-approved Amended and Restated Incentive Plan of 2005 (78,427 shares) and the Fourth Amended 2013 Incentive Plan (2,370,627 shares). (2) The number shown in column (c) is the number of shares that may be issued upon exercise of options or stock appreciation rights and other equity awards granted in the future under the Fourth Amended 2013 Incentive Plan. All of the shares remaining available for the grant of future awards of options, warrants, and rights are available under the Fourth Amended 2013 Incentive Plan. No new awards may be granted under the Amended and Restated Incentive Plan of 2005. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by each person known by Adtalem to own beneficially more than 5% of our Common Stock, in each case as of September 24, 2021, except as otherwise noted. Name BlackRock, Inc. The Vanguard Group Dimensional Fund Advisors LP WEDGE Capital Management L.L.P. Amount and Nature of Beneficial Ownership 5,750,474(2) Percentage Ownership(1) 11.5% 4,480,054(3) 3,974,832(4) 2,622,070(5) 9.0% 7.9% 5.3% (1) The percentage of beneficial ownership is based on 49,750,810 shares of Common Stock outstanding as of September 24, 2021. (2) The information shown was provided by BlackRock, Inc. in a Schedule 13G/A it filed with the SEC on January 27, 2021, indicating its beneficial ownership as of December 31, 2020 of 5,750,474 shares. BlackRock reported that it has sole voting power over 5,663,595 of these shares and sole dispositive power over all of these shares. The address of the principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. (3) The information shown was provided by The Vanguard Group in a Schedule 13G/A it filed with the SEC on February 10, 2021, indicating its beneficial ownership as of December 31, 2020 of 4,480,054 shares. The Vanguard Group reported that it did not have sole voting power over any of these shares, shared voting power over 56,445 of these shares, sole dispositive power over 4,378,312 of these shares and shared dispositive power over 101,742 of these shares. The address of the principal business office of The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. 73 2021 Proxy StatementVoting Securities and Principal Holders (4) The information shown was provided by Dimensional Fund Advisors LP in a Schedule 13G/A it filed with the SEC on February 12, 2021, indicating its beneficial ownership as of December 31, 2020 of 3,974,832 shares. Dimensional Fund Advisers reported that it has sole voting power over 3,878,079 of these shares and sole dispositive power over all of these shares. The address of the principal business office of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746. (5) The information shown was provided by WEDGE Capital Management L.L.P. in a Schedule 13G/A it filed with the SEC on January 29, 2021, indicating its beneficial ownership as of December 31, 2010 of 2,622,070 shares. WEDGE Capital Management L.L.P. reported that it has sole voting power over 2,049,391 of these shares and sole dispositive power over all of these shares. The address of the principal business office of WEDGE Capital Management L.L.P. is 301 S. College Street, Suite 3800, Charlotte, North Carolina 28202. SECURITY OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS The table below sets forth the number and percentage of outstanding shares of Common Stock beneficially owned by (1) each director of Adtalem, (2) each NEO listed on page 42, and (3) all directors and executive officers of Adtalem as a group, in each case as of September 24, 2021. Adtalem believes that each individual named has sole investment and voting power with respect to the shares of Common Stock indicated as beneficially owned by such person, except as otherwise noted. Unless otherwise indicated, the address of each beneficial owner in the table below is care of Adtalem Global Education Inc. 500 West Monroe Street, Suite 2800, Chicago, Illinois 60661. Common Stock Beneficially Owned Excluding Options and RSUs(1) Stock Options Exercisable as of September 24, 2021 and PSUs and RSUs Scheduled to Vest within 60 days of September 24, 2021(1) Total Common Stock Beneficially Owned Percentage Ownership(2) 8,071 — — 5,010 4,925 23,416 22,200 — 2,500 8,782 239,906 2,233 9,682 — 19,363 70,007 504,609 4,370 — — 4,370 4,370 4,370 — 4,370 4,370 — 423,124 975 31,812 — 27,999 6,737 666,976 12,441 — — 9,380 9,295 27,786 22,200 4,370 6,870 8,782 761,830 17,298 175,253 36,080 60,148 76,744 1,369,333 * * * * * * * * 1.53 * * * * * 2.75 Name of Beneficial Owner Non-Employee Directors William W. Burke Charles DeShazer(3) Mayur Gupta(4) Donna J. Hrinak Georgette Kiser Lyle Logan Michael W. Malafronte Sharon L. O’Keefe Kenneth J. Phelan James D. White(5) Named Executive Officers Lisa W. Wardell Robert J. Phelan Stephen W. Beard Douglas G. Beck Kathy Boden Holland Michael O. Randolfi(6) All directors and executive officers as a group (23 Persons) * Represents less than 1% of the outstanding Common Stock. (1) “Common Stock Beneficially Owned Excluding Options and RSUs” includes stock held in joint tenancy, stock owned as tenants in common, stock owned or held by spouse or other members of the holder’s household, and stock in which the holder either has or shares voting and/or investment power, even though the holder disclaims any beneficial interest in such stock. Options exercisable as of September 24, 2021 and PSUs and RSUs that are scheduled to vest within 60 days after September 24, 2021 are shown separately in the “Stock Options Exercisable as of September 24, 2021 and PSUs and RSUs Scheduled to Vest within 60 days of September 24, 2021” column. In accordance with SEC rules, the securities reflected in the “Stock Options Exercisable as of September 24, 2021 and PSUs and RSUs Scheduled to Vest within 60 days of September 24, 2021” column are deemed to be outstanding for purposes of calculating the percentage of outstanding securities owned by such person but are not deemed to be outstanding for the purpose of calculating the percentage owned by any other person. The percentages of beneficial ownership set forth below are calculated as of September 24, 2021 based on outstanding shares of 49,750,810. (2) (3) Dr. DeShazer was appointed to the Board effective April 2, 2021. (4) Mr. Gupta was appointed to the Board effective August 10, 2021. (5) Mr. White resigned from the Board effective April 30, 2021. (6) Mr. Randolfi resigned effective April 23, 2021. 74 Adtalem Global Education Inc.Additional Information VOTING INSTRUCTIONS You may vote shares of Common Stock that you owned as of September 24, 2021, which is the record date for the Annual Meeting. You may vote the following ways: BY TELEPHONE In the United States or Canada, you can vote your shares by calling 1-800-690-6903 BY INTERNET You can vote your shares online at www.proxyvote.com VIRTUALLY Attend the Annual Meeting online at www.virtualshareholdermeeting. com/ATGE2021. BY MAIL You can vote by mail by marking, dating and signing your proxy card or voting instruction form and returning it in the accompanying postage-paid envelope For telephone and internet voting, you will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. Telephone and internet voting are available through 11:59 p.m. Eastern Time on Tuesday, November 9, 2021. Attending the Annual Meeting To join the Annual Meeting, login at www.virtualshareholdermeeting.com/ATGE2021. You will need the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. The Annual Meeting will begin at 8:30 a.m. Central Standard Time. Online check-in will be available beginning at 8:15 a.m. Central Standard Time to allow for shareholders to log in and test the computer audio system. Please allow ample time for the online check-in process. A replay of the Annual Meeting will also be posted on our website at for at least thirty (30) days after the meeting concludes. Voting at the Annual Meeting The way you vote your shares prior to the Annual Meeting will not limit your right to change your vote at the Annual Meeting if you attend virtually and vote by ballot. If you hold shares in street name and you want to vote at the Annual Meeting, you must obtain a valid legal proxy from the record holder of your shares at the close of business on the record date indicating that you were a beneficial owner of shares, as well as the number of shares of which you were the beneficial owner, on the record date, and appointing you as the record holder’s proxy to vote these shares. You should contact your bank, broker or other intermediary for specific instructions on how to obtain a legal proxy. Record Date You may vote all shares of Common Stock that you owned as of the close of business on September 24, 2021, which is the record date for the Annual Meeting. On the record date, we had 49,750,810 shares of Common Stock outstanding and entitled to vote. Each share of Common Stock is entitled to one vote on each matter properly brought before the Annual Meeting. Submitting A Question at the Annual Meeting You may submit a question before the meeting or during the meeting via our virtual shareholder meeting website, www.virtualshareholdermeeting.com/ATGE2021. If your question is properly submitted, we intend to respond to your question during the Annual Meeting. Questions on similar topics will be combined and answered together. 75 2021 Proxy StatementAdditional Information Technical Difficulties During the Annual Meeting If we experience technical difficulties during the Annual Meeting (e.g. a temporary or prolonged power outage), our Chairman will determine whether the meeting can be promptly reconvened (if the technical difficulty is temporary) or whether the meeting will need to be reconvened on a later date (if the technical difficulty is more prolonged). In any situation, we will promptly notify shareholders of the decision via www.virtualshareholdermeeting.com/ATGE2021. If you encounter technical difficulties accessing our Annual Meeting or asking questions during the Annual Meeting, a support line will be available on the login page of the virtual shareholder meeting website: www.virtualshareholdermeeting.com/ATGE2021. Ownership of Shares You may own shares of Common Stock in one or more of the following ways: • Directly in your name as the shareholder of record, including shares purchased through our Colleague Stock Purchase Plan or restricted stock unit awards issued to employees under our long-term incentive plans. • Indirectly through a broker, bank or other intermediary in “street name.” • Indirectly through the Adtalem Stock Fund of our Retirement Plan. Your shares are registered directly in your name, you are the holder of record of these shares and we are sending proxy materials directly to you. As the holder of record, you have the right to give your proxy directly to our tabulating agent. If you hold your shares in street name, your broker, bank, or other intermediary is sending proxy materials to you and you may direct them how to vote on your behalf by completing the voting instruction form that accompanies your proxy materials. Revocation of Proxies You can revoke your proxy at any time before your shares are voted at the Annual Meeting if you: • Submit a written revocation to our General Counsel and Corporate Secretary, • Submit a later-dated proxy or voting instruction form, • Provide subsequent telephone or Internet voting instructions, or • Vote virtually at the Annual Meeting. If you sign and return your proxy card or voting instruction form without any voting instructions with respect to a matter, your shares will be voted by the proxy committee appointed by the Board (and each of them, with full powers of substitution) in accordance with the Board’s recommendation. With respect to any other matters properly presented at the Annual Meeting, the proxy committee appointed by the Board (and each of them, with full powers of substitution) will vote in accordance with the Board’s recommendation, or if no recommendation is given, in their own discretion. VOTING INFORMATION Effect of Not Casting Your Vote If you hold your shares in street name, you will receive a voting instruction form that lets you instruct your bank, broker, or other nominee how to vote your shares. Under NYSE rules, brokers are permitted to exercise discretionary voting authority on “routine” matters when voting instructions are not received from a beneficial owner ten days prior to the shareholder meeting. The only “routine” matter on this year’s Annual Meeting agenda is Proposal No. 2 (Ratify selection of PwC as independent registered public accounting firm). If you hold your shares in street name, and you wish to have your shares voted on all matters in this Proxy Statement, please complete and return your voting instruction form. If you do not return your voting instruction form, your shares will not be voted on any matters with the exception that your broker may vote in its discretion on Proposal No. 2. If you are a shareholder of record and you do not cast your vote, your shares will not be voted on any of the proposals at the Annual Meeting, which will have no the effect on the outcome. 76 Adtalem Global Education Inc.Additional Information If you are the holder of record of your shares, if you return your proxy to us by any of these means outlined above under the heading “Voting Instructions” without choices for each proposal, the proxy committee appointed by the Board will vote your shares on the unmarked proposals in the same proportion as shares for which instructions have been received. Abstentions, directions to withhold authority and broker non-votes (where a named entity holds shares for a beneficial owner who has not provided voting instructions) will be considered present at the Annual Meeting for purposes of a quorum. Quorum and Required Vote We will have a quorum and will be able to conduct the business of the Annual Meeting if the holders of a majority of the votes that shareholders are entitled to cast are present at the Annual Meeting, either virtually or by proxy. For the 2021 Annual Meeting, to elect directors and adopt the other proposals, the following votes are required under our governing documents and Delaware corporate law: PROPOSAL 1 Election of directors 2 Ratify selection of PwC as independent registered public accounting firm* 3 Advisory vote to approve the compensation of our named executive officers** VOTE REQUIRED Approval of the majority of shares represented at the Annual Meeting Approval of the majority of shares represented at the Annual Meeting Approval of the majority of shares represented at the Annual Meeting EFFECT OF ABSTENTION Treated as vote against EFFECT OF BROKER NON-VOTE* No effect on the outcome Treated as vote against No effect on the outcome Treated as vote against No effect on the outcome * A broker non-vote occurs when a broker submits a proxy but does not vote for an item because it is not a “routine” item and the broker has not received voting instructions from the beneficial owner. As described under “Effect of Not Casting Your Vote” above, your broker may vote in its discretion only on Proposal No. 2, ratify selection of PwC as independent registered public accounting firm. Because brokers are entitled to vote on Proposal No. 2 without voting instructions from the beneficial owner, there will be no broker non-votes on this proposal. ** Advisory/Non-binding. In accordance with Adtalem’s Restated Certificate of Incorporation, a majority of the shares represented at the Annual Meeting must be voted “FOR.” Notwithstanding the foregoing, Adtalem will take into account the weight of investor support for the compensation for its NEOs based on the percentage of shares that are present at the meeting or represented by proxy at the meeting and entitled to vote on the proposal that have voted “FOR” the proposal. In evaluating the weight of investor support for the compensation of Adtalem’s NEOs, abstentions will be counted as shares present at the meeting and will have the effect of a vote against the proposal. Broker non-votes will not be counted as shares entitled to vote on the matter and will have no impact on the vote’s outcome. PROXY SOLICITATION Officers and other employees of Adtalem may solicit proxies by mail, personal interview, telephone, facsimile, electronic means, or via the Internet without additional compensation. None of these individuals will receive special compensation for soliciting votes, which will be performed in addition to their regular duties, and some of them may not necessarily solicit proxies. Adtalem also has made arrangements with brokerage firms, banks, record holders, and other fiduciaries to forward proxy solicitation materials to the beneficial owners of shares they hold on your behalf. Adtalem will reimburse these intermediaries for reasonable out-of-pocket expenses. We have hired Innisfree M&A Incorporated to help us distribute and solicit proxies. Adtalem will pay Innisfree $20,000 plus expenses for these services. Adtalem will pay the cost of all proxy solicitation. SHAREHOLDER PROPOSALS FOR 2022 ANNUAL MEETING Shareholder proposals intended to be presented at the 2022 Annual Meeting of Shareholders in reliance on Rule 14a-8 under the Exchange Act must be received by Adtalem no later than June 10, 2022, to be eligible for inclusion in the proxy statement and form of proxy for the meeting. Any such proposal also must meet the other requirements of the rules of the SEC relating to shareholder proposals. Also, under Adtalem’s By-Laws, other proposals and director nominations by shareholders that are not included in the proxy statement will be considered 77 2021 Proxy StatementAdditional Information timely and may be eligible for presentation at that meeting only if they are received by Adtalem in the form of a written notice, directed to the attention of Adtalem’s General Counsel and Corporate Secretary, not later than August 12, 2022. The notice must contain the information required by the By-Laws. AVAILABILITY OF FORM 10-K A copy of Adtalem’s 2021 Annual Report on Form 10-K (including the financial statements and financial statement schedules), as filed with the SEC, may be obtained without charge upon written request to the attention of Adtalem’s General Counsel and Corporate Secretary at Adtalem Global Education Inc., 500 West Monroe Street, Suite 2800, Chicago, IL 60661. A copy of Adtalem’s Form 10-K and other periodic filings also may be obtained on Adtalem’s investor relations website at investors.adtalem.com/financials/sec-filing and from the SEC’s EDGAR database at www.sec.gov. HOUSEHOLDING Adtalem delivers only one Notice of Annual Meeting and Proxy Statement and the 2021 Annual Report to multiple shareholders sharing the same address unless it has received different instructions from one or more of them. This method of delivery is known as “householding.” Householding reduces the number of mailings you receive, saves on printing and postage costs and helps the environment. Adtalem will, upon written or oral request, promptly deliver a separate copy of the Notice of Annual Meeting and Proxy Statement and 2021 Annual Report to a shareholder at a shared address. If you would like to change your householding election, request that a single copy of this or future proxy materials be sent to your address, or request a separate copy of this or future proxy materials, you should submit this request by writing Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or calling 1-866-540-7095. DELINQUENT SECTION 16(a) REPORTS Under U.S. securities laws, directors, certain officers and persons holding more than 10% of our common stock must report their initial ownership of our common stock and any changes in their ownership to the SEC. The SEC has designated specific due dates for these reports and we must identify in this Proxy Statement those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and executive officers, we believe that all reporting requirements for fiscal year 2021 were complied with by each person who at any time during the 2021 fiscal year was a director or an executive officer or held more than 10% of our common stock except for the following: Due to the late receipt of a report, Ms. Boden Holland inadvertently filed a Form 4 four days late on May 19, 2021 to report the vesting of a previously reported restricted stock award on May 9, 2021. Due to the late receipt of a report, Ms. Wardell, Ms. Jennings, Mr. Nash and Mr. Lau each inadvertently filed a Form 4 two days late on August 28, 2020 to report the vesting of a previously reported restricted stock award on August 23, 2020. In addition, following a review of our stock records, it was discovered that Mr. Robert Phelan did not report a transaction in which shares were withheld for taxes on vesting shares. Such transaction was subsequently reported in a Form 5 that was filed on August 16, 2021. OTHER BUSINESS The Board is aware of no other matter that will be presented for action at this Annual Meeting. If any other matter requiring a vote of the shareholders properly comes before the Annual Meeting, the proxy committee will vote and act according to their best judgment. By Order of the Board of Directors Douglas G. Beck Senior Vice President, General Counsel and Corporate Secretary 78 Adtalem Global Education Inc.Appendix A – Summary of Special Items Excluded for Performance Assessment The Compensation Committee has the discretion to adjust the financial inputs used in calculating the target award percentages for the MIP and long-term incentive plans. The Compensation Committee evaluates potential adjustments using the following framework: 1. Align treatment with shareholders’ view of results; 2. Encourage management to make the best long-term decisions for Adtalem’s stakeholders; and 3. Remain generally consistent with past practice. Return on Invested Capital (“ROIC”), which is used as a performance threshold for PSUs granted in fiscal years 2019, 2020 and 2021 and is expressed as a percentage, is calculated as Adjusted Net Income divided by the average of the beginning and ending balances of the summation of Long-term Debt and Shareholders’ Equity. RECONCILIATION OF FISCAL YEAR 2021 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE For fiscal year 2021, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Income and Earnings per Share for the following special items: • Exclusion of restructuring charges primarily related to Adtalem’s home office and ACAMS real estate consolidations, and a write-down of EduPristine’s assets; • Exclusion of business acquisition and integration expense, which includes expenses related to the Walden University acquisition; • Exclusion of pre-acquisition interest expense, which relates to financing arrangements in connection with the Walden University acquisition; and • Exclusion of discontinued operations including the operations of Adtalem Brazil, Carrington College and DeVry University. In addition, the amount of pre-acquisition debt was adjusted from the long-term debt and shareholders’ equity calculation. The following table reconciles these adjustments to the most directly comparable GAAP information: Net Income, as reported Exclusions: Restructuring charges (pretax) Business acquisition and integration expense (pretax) Pre-acquisition interest expense (pretax) Income tax impact of above exclusions Discontinued operations (after tax) Adjusted Net Income Long-term Debt and Shareholder’s Equity: Fiscal year 2021, as reported Exclusion of pre-acquisition debt Fiscal year 2021, as adjusted Fiscal year 2020, as reported Average for determination of ROIC ROIC in thousands 76,909 $ per share $ 1.49 $ $ $ $ $ 9,804 31,593 26,746 (16,501) 25,127 $ 153,678 $2,392,070 $ (800,000) $1,592,070 $1,604,421 $1,598,246 9.6% $ 0.19 $ 0.61 $ 0.52 $(0.32) $ 0.49 $ 2.98 A-1 2021 Proxy StatementAppendix A – Summary of Special Items Excluded for Performance Assessment For the fiscal year 2021 ROIC award only, Adtalem’s calculation of long-term debt and shareholders’ equity was further adjusted for the following items: • Exclusion of the net income impact from special items (as discussed above); and • Exclusion of share repurchases. The following table reconciles these adjustments to the most directly comparable GAAP information: Net Income, as reported Exclusions: Restructuring charges (pretax) Business acquisition and integration expense (pretax) Pre-acquisition interest expense (pretax) Income tax impact of above exclusions Discontinued operations (after tax) Adjusted Net Income Long-term Debt and Shareholder’s Equity: Fiscal year 2021, as reported Exclusion of pre-acquisition debt Exclusion of special items Exclusion of share repurchases Fiscal year 2021, as adjusted Fiscal year 2020, as reported Average for determination of ROIC ROIC in thousands 76,909 $ per share $ 1.49 $ 0.19 $ 0.61 $ 0.52 $(0.32) $ 0.49 $ 2.98 $ $ $ $ $ 9,804 31,593 26,746 (16,501) 25,127 $ 153,678 $2,392,070 $ (800,000) $ 76,769 $ 100,000 $1,768,839 $1,604,421 $1,686,630 9.1% FISCAL YEAR 2021 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS For fiscal year 2021, Adtalem’s calculation of Adjusted Free Cash Flow was adjusted for the cash impact from special items (as discussed above). Net cash provided by operating activities-continuing operations Capital Expenditures Free Cash Flow (“FCF”) Cash impact from special items FCF, as adjusted for determination of FCF Diluted shares FCF per Share (in thousands, except per share amounts) $223,158 $ (48,664) $174,494 $ 17,803 $192,297 51,645 $ 3.72 RECONCILIATION OF FISCAL YEAR 2020 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE For fiscal year 2020, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Loss and Loss per Share for the following special items: • Exclusion of restructuring charges primarily related to the sale of Becker Professional Education’s courses for healthcare students, Adtalem’s home office and ACAMS real estate consolidations and workforce reductions across the organization, which were not primarily related to COVID-19; • Exclusion of a gain related to the sale of Adtalem’s Columbus, Ohio campus facility; • Exclusion of a gain on the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk; A-2 Adtalem Global Education Inc.Appendix A – Summary of Special Items Excluded for Performance Assessment • Exclusion of adjustments to the income tax charges related to implementation of the Tax Cuts and Jobs Act of 2017; • Exclusion of a net tax benefit for a former subsidiary investment loss; • Exclusion of discontinued operations including the operations of Adtalem Brazil, Carrington College and DeVry University; and • Inclusion of the first three quarter of income for actual performance of Adtalem Brazil prior to its sale in April 2020 and three months of forecasted income of Adtalem Brazil to annualize Adtalem Brazil’s results (for ROIC payout only). The following table reconciles these adjustments to the most directly comparable GAAP information: Net Loss, as reported Exclusions: Restructuring charges (pretax) Gain from real estate sale (pretax) Gain on derivative (pretax) Tax Cuts and Jobs Act of 2017 Net tax benefit for a former subsidiary investment loss Income tax impact of above exclusions Discontinued operations (after tax) Net Income, as adjusted for determination of MIP payout Inclusion of Adtalem Brazil Net Income, as adjusted for determination of ROIC Long-term Debt and Shareholder’s Equity: Fiscal year 2021, as reported Fiscal year 2020, as reported Average for determination of ROIC ROIC FISCAL YEAR 2020 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS Net cash provided by operating activities-continuing operations Capital Expenditures Free Cash Flow (“FCF”) Inclusion of Adtalem Brazil FCF, as adjusted for determination of FCF Diluted shares FCF per Share in thousands (85,334) $ per share $(1.58) $ 0.53 $(0.09) $(2.05) $(0.04) $(0.47) $(0.10) $ 6.09 $ 2.28 $ $ 28,628 (4,779) $ (110,723) $ $ $ (2,230) (25,668) (5,648) $ 329,315 $ 123,541 $ 26,341 $ 149,882 $1,604,421 $1,798,530 $1,701,476 8.8% (in thousands, except per share amounts) $149,565 $ (44,137) $105,428 $ 34,714 $140,142 $ 54,094 $ 2.59 RECONCILIATION OF FISCAL YEAR 2019 ADJUSTED NET INCOME AND EARNINGS PER SHARE FOR PERFORMANCE ASSESSMENTS TO REPORTED NET INCOME AND EARNINGS PER SHARE For fiscal year 2019, Adtalem’s calculation of Adjusted Net Income, which is a performance metric factoring in ROIC and Adjusted Earnings per Share, which is a performance metric factoring in the determination of MIP payouts, were adjusted from reported Net Income and Earnings per Share for the following special items: • Exclusion of restructuring charges, including asset write-offs, primarily related to the closing of the Ross University School of Medicine campus in Dominica, and real estate consolidations and workforce reductions at Adtalem Brazil and Adtalem’s home office; • Exclusion of insurance settlement gain related to the final proceeds received for damages from Hurricanes Irma and Maria at American University of the Caribbean School of Medicine and Ross University School of Medicine; A-3 2021 Proxy StatementAppendix A – Summary of Special Items Excluded for Performance Assessment • Exclusion of a gain related to a lawsuit settlement against the Adtalem Board; • Exclusion of adjustments to the preliminary income tax charges related to implementation of the Tax Cuts and Jobs Act of 2017 and tax charges relating to the sale of DeVry University; • Exclusion of discontinued operations including the operations of Carrington College and DeVry University; and • Exclusion of the results of OCL acquired in the second half of fiscal year 2019 (for MIP payout only). The following table reconciles these adjustments to the most directly comparable GAAP information: Net Income, as reported Exclusions: Restructuring charges (pretax) Settlement gains (pretax) Tax Cuts and Jobs Act of 2017 and tax charges relating to divestiture of DeVry University Income tax impact of above exclusions Discontinued operations (after tax) Net Income, as adjusted for determination of ROIC Net Loss from OCL acquired in the second half of fiscal year 2019 Net Income, as adjusted for determination of MIP payout Long-term Debt and Shareholder’s Equity: Fiscal year 2020, as reported Fiscal year 2019, as reported Average for determination of ROIC ROIC FISCAL YEAR 2019 FCF PER SHARE FOR PERFORMANCE ASSESSMENTS Net cash provided by operating activities-continuing operations Capital Expenditures Free Cash Flow (“FCF”) Diluted shares FCF per Share in thousands 95,168 $ per share $ 1.60 $ 0.94 $(0.44) $ 0.06 $(0.03) $ 0.68 $ 2.82 $ 0.02 $ 2.84 $ $ $ $ $ 55,925 (26,178) 3,584 (1,732) 40,443 $ 167,210 $ 944 $ 168,154 $1,798,530 $1,819,286 $1,808,908 9.2% (in thousands, except per share amounts) $ 226,449 $ (64,751) $ 161,698 59,330 $ 2.73 A-4 Adtalem Global Education Inc.UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2021 or For the transition period from _____to _____ Commission file number: 001-13988 Adtalem Global Education Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 500 West Monroe Street Chicago, Illinois (Address of principal executive offices) 36-3150143 (I.R.S. Employer Identification No.) 60661 (Zip Code) Registrant’s telephone number; including area code (866) 374-2678 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common stock, $0.01 par value per share Trading Symbol(s) ATGE Name of each exchange on which registered New York Stock Exchange NYSE Chicago Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No  Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No  Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer   Non-accelerated filer Accelerated filer Smaller reporting company Emerging growth company  ☐ ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No  The aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 2020, was $1,698,122,114 based on the closing price of $33.95 per share of Common Stock as reported on the New York Stock Exchange. As of August 12, 2021, there were 49,620,608 shares of the registrant’s common stock, $0.01 par value per share outstanding. DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates information by reference to the registrant’s definitive proxy statement, to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended June 30, 2021. Adtalem Global Education Inc. Form 10-K Table of Contents Business PART I Item 1. Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Item 3. Item 4. Mine Safety Disclosures Properties Legal Proceedings Information About Our Executive Officers PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Item 6. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Item 9. Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure PART III Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accountant Fees and Services PART IV Item 15. Exhibits and Financial Statement Schedules Item 16. Form 10-K Summary Signatures Page 1 23 43 43 44 44 44 47 49 49 72 73 123 123 123 123 123 124 124 124 124 124 128 129 Forward-Looking Statements Certain statements in this Annual Report on Form 10-K are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding the future impact of the novel coronavirus (“COVID-19”) pandemic, and the efficacy and distribution of the vaccines. Forward-looking statements can also be identified by words such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Part I, Item 1A. “Risk Factors,” which should be read in conjunction with the forward-looking statements in this Annual Report on Form 10-K. These forward-looking statements are based on information available to us as of the date any such statements are made, and we do not undertake any obligation to update any forward-looking statement, except as required by law. PART I Item 1. Business Overview In this Annual Report on Form 10-K, Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references. Adtalem was incorporated under the laws of the State of Delaware in August 1987. Adtalem’s executive offices are located at 500 West Monroe Street, Chicago, Illinois, 60661, and the telephone number is (866) 374-2678. Adtalem is a leading workforce solutions provider. The purpose of Adtalem is to empower students and members to achieve their goals, find success, and make inspiring contributions to our global community. Adtalem’s institutions and companies offer a wide array of programs across medical and healthcare and financial services. Adtalem’s vision is to create a dynamic global community of lifelong learners who improve the world. Adtalem aims to create value for society and its stakeholders by offering responsive educational programs that are supported by exceptional services to its students and delivered with integrity and accountability. Towards this vision, Adtalem is proud to play a vital role in expanding access to higher education along with other institutions in the public, independent, and private sectors. Adtalem will continue to strive to achieve superior student outcomes by providing quality education and student services, growing and diversifying into new program areas and geographies, and building quality brands and the infrastructure necessary to compete in an increasingly competitive global market. On August 12, 2021, Adtalem acquired all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company (together with e-Learning, “Walden”), from Laureate Education, Inc. (“Laureate” or “Seller”) in exchange for a purchase price of $1.48 billion in cash, subject to certain adjustments set forth in the Membership Interest Purchase Agreement, as amended (the “Agreement) (the “Acquisition”). See Note 22 “Subsequent Event” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information. Segments Overview As of September 30, 2019, Adtalem eliminated its Business and Law reportable segment when Adtalem Education of Brazil (“Adtalem Brazil”) was classified as discontinued operations and assets held for sale. In addition to the sale of Adtalem Brazil, which was completed on April 24, 2020, during the second quarter of fiscal year 2019, Adtalem divested Carrington College (“Carrington”) and DeVry University. In accordance with U.S. generally accepted accounting principles (“GAAP”), we have classified the Adtalem Brazil, Carrington, and DeVry University entities as “Assets Held for Sale” and “Discontinued Operations” in all periods presented as applicable. As a result, all financial results, disclosures, and discussions of continuing operations in this Annual Report on Form 10-K exclude Adtalem Brazil, Carrington, and 1 2021 Form 10-KDeVry University operations, unless otherwise noted. See Note 4 “Discontinued Operations and Assets Held for Sale” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional discontinued operations information. 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 University (“Chamberlain”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“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 the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker”), OnCourse Learning (“OCL”), and EduPristine. On August 4, 2021, Adtalem announced we are exploring strategic alternatives for the Financial Services segment. “Home Office and Other” includes activities not allocated to a reportable segment. Financial and descriptive information about Adtalem’s reportable segments is presented in Note 21 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” Medical and Healthcare Chamberlain Chamberlain was founded in 1889 as Deaconess College of Nursing and acquired by Adtalem in 2005. In May 2017, Chamberlain College of Nursing broadened its reach in healthcare education through the establishment of Chamberlain University and now offers its programs through its College of Nursing and College of Health Professions. Nursing degree offerings include a three-year onsite Bachelor of Science in Nursing (“BSN”) degree, an online Registered Nurse (“RN”) to BSN (“RN-to-BSN”) degree completion option, an online Master of Science in Nursing (“MSN”) degree, including Family Nurse Practitioner (“FNP”) and other specialties, and the online Doctor of Nursing Practice (“DNP”) degree. Chamberlain offers an online Master of Public Health (“MPH”) degree program and an online Master of Social Work (“MSW”) degree program, which launched in July 2017 and September 2019, respectively, both of which are offered through its College of Health Professions. Chamberlain provides an educational experience distinguished by a high level of care for students, academic excellence, and integrity delivered through its 23 campuses and online. Chamberlain is committed to graduating health professionals who are empowered to transform healthcare worldwide. Chamberlain had 34,930 students enrolled in the May 2021 session, an increase of 4.6% over the prior year. Chamberlain’s pre-licensure BSN degree is a baccalaureate program offered at its campus locations as well as online in specific states. The BSN program enables students to complete their BSN degree in three years of full-time study as opposed to the typical four-year BSN program with summer breaks. Beginning in September 2019, Chamberlain also began offering an evening/weekend BSN option at select campuses. In September 2020, Chamberlain launched its online BSN option which offers a blend of flexibility, interactivity, and experiential learning. The program is available to students living in eleven states (Alaska, Hawaii, Illinois, Iowa, Maryland, Minnesota, New Mexico, Oklahoma, South Dakota, West Virginia, and Wisconsin). Chamberlain pre-licensure BSN students who completed the National Council Licensure Examination (“NCLEX”) had an overall pass rate of 91% in 2020 and 88% in 2019. The national NCLEX pass rate was 90% for 2020 and 91% for 2019. Students who already have passed their NCLEX exam and achieved RN designation through a diploma or associate degree can complete their BSN degree online through Chamberlain’s RN-to-BSN completion option in three semesters of full-time study, although most students enroll part-time while they continue working as nurses. 2 Adtalem Global Education Inc.The online MSN degree program offers five non-direct-care specialty tracks: Educator, Executive, Informatics, Population Health, and Healthcare Policy. These programs require 36 credit hours and are designed to be completed in approximately two years of part-time study. Chamberlain also offers three direct-care nurse practitioner tracks: FNP, Adult-Gerontology Acute Care Nurse Practitioner (“AGACNP”), and Adult-Gerontology Primary Care Nurse Practitioner (“AGPCNP”). The FNP and AGPCNP programs require 45 credit hours along with 650 lab and clinical hours and are designed to be completed in two and a half years of part-time study. The AGPCNP and AGACNP programs launched in July 2020. Chamberlain also offers an accelerated MSN option that students can complete in 30 credit hours and receive a generalist degree. The online DNP degree program is based on the eight essentials of doctoral education outlined by the American Association of Colleges of Nursing (“AACN”). The DNP program is designed for nurses seeking a terminal degree in nursing and offers an alternative to research-focused Ph.D. programs. The program requires 32 to 40 credit hours along with 1,000 clinical practicum hours. The program can be completed in five to six semesters of study. Chamberlain’s College of Health Professions MPH degree program focuses on preparing students to become public health practitioners to work with communities and populations globally to promote healthy communities and to prevent community health problems such as disease, poverty, health access disparities, and violence through interdisciplinary coursework. The program requires 43 credit hours. The MSW degree program aims to develop and empower students to be agents of social change in their communities and throughout the world. The MSW degree program prepares students for generalist or specialized practice and offers three specializations, including Crisis and Response Interventions, Trauma, and Medical Social Work. The program offers both a traditional and advanced standing option. The traditional option requires 60 credit hours while the advanced standing option requires 36 credit hours and is for students who have completed a baccalaureate degree in social work. Student Admissions and Admissions Standards Pre-Licensure BSN Program The Chamberlain undergraduate pre-licensure admission process is made up of two phases: Academic Eligibility and Clinical Clearance. Applicants must meet both sets of requirements to be eligible for admission. Academic Eligibility requires proof of graduation with a minimum grade point average of 2.75 from a recognized high school or other college, along with a minimum custom score on the A2 Admission Assessment test. The admissions committee reviews each application and selects the most qualified candidates. Applicants who are deemed Academically Eligible must receive Clinical Clearance, which includes a background check, fingerprint screen, and drug screen for acceptance to be granted. Chamberlain enrolls students in its pre-licensure program at least three times per year, during the January, May, and September sessions and select campuses may offer additional opportunities to start. RN-to-BSN Option Admission to the RN-to-BSN option requires a nursing diploma or Associate Degree in Nursing from an accredited institution, a minimum grade point average of 2.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the National Council of State Boards of Nursing (“NCSBN”). Chamberlain enrolls students in its RN-to-BSN program six times per year, during the January, March, May, July, September, and November sessions. Graduate Programs To enroll in the MSN program, a prospective student must possess a degree in nursing at the bachelor’s level or higher from an accredited institution, a minimum grade point average of 3.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the NCSBN. Provisional admission may be granted to students who have a grade point average of at least 2.75 but less than 3.0. The DNP program requires a degree at the master’s level or higher from an accredited institution, a minimum grade point average of 3.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the NCSBN. 3 2021 Form 10-KEnrollment in the MPH program requires a bachelor’s level degree or higher from an accredited institution and a minimum grade point average of 3.0. Students seeking to enroll in the MSW program must have a bachelor’s degree or higher from an accredited institution with a minimum grade point average of 2.5. Students must also pass a background and fingerprint check. Chamberlain enrolls students in its graduate programs six times per year, during the January, March, May, July, September, and November sessions. Medical and Veterinary Schools Together, the three schools, along with the Medical Education Readiness Program (“MERP”) and the Veterinary Preparation Program, had 5,126 students enrolled in the May 2021 semester, a 1.2% decrease compared to the same term last year. AUC AUC, founded in 1978 and acquired by Adtalem in 2011, provides medical education and confers the Doctor of Medicine degree. AUC is located in St. Maarten and is one of the most established international medical schools in the Caribbean, producing over 7,500 graduates from over 78 countries. The mission of AUC is to train tomorrow’s physicians, whose service to their communities and their patients is enhanced by international learning experiences, a diverse learning community, and an emphasis on social accountability and engagement. RUSM RUSM, founded in 1978 and acquired by Adtalem in 2003, provides medical education and confers the Doctor of Medicine degree. RUSM has graduated more than 15,000 physicians since inception. The mission of RUSM is to prepare highly dedicated students to become effective and successful physicians. RUSM seeks to accomplish this by focusing on imparting the knowledge, skills, and values required for its students to establish a successful and satisfying career as a physician. In January 2019, RUSM moved its basic science instruction from Dominica to Barbados. AUC’s and RUSM’s respective medical education programs are comparable to the educational programs offered at U.S. medical schools as evidenced by student performance on the U.S. Medical Licensing Examination (“USMLE”) tests and residency placement. AUC’s and RUSM’s programs consist of three academic semesters per year, which begin in January, May, and September, allowing students to begin their basic science instruction at the most convenient time for them. Initially, AUC and RUSM students complete a program of concentrated study of medical sciences after which they sit for Step 1 of the USMLE, which assesses whether students understand and can apply scientific concepts that are basic to the practice of medicine. Under AUC and RUSM direction, students then complete the remainder of their program by participating in clinical rotations conducted at over 40 affiliated teaching hospitals or medical centers connected with accredited medical education programs in the U.S., Canada, and the U.K. Successfully passing USMLE Step 2 Clinical Skills previously was a requirement for graduation and for certification by the Educational Commission for Foreign Medical Graduates (“ECFMG”) to enter the U.S. residency match. Due to COVID-19 restrictions, USMLE Step 2 Clinical Skills has been discontinued. ECFMG has developed alternative pathways to replace this requirement, for which AUC and RUSM are generally eligible. In addition, flexibility to use some online clinical training has been allowed by accreditors and other U.S. regulatory bodies. These alternatives are critical to keeping many students on track to graduate and enter the 2022 residency match. Upon successful completion of their medical degree requirements, students apply for a residency position in their area of specialty through the National Residency Matching Program (“NRMP”). This process is also known as “The Match”® and utilizes an algorithm to “match” applicants to programs using the certified rank order lists of the applicants and program directors. AUC students achieved a 94% and 93% first-time pass rate on the USMLE Step 1 exam in 2019 and 2020, respectively. Of first-time eligible AUC graduates, 92% attained residency positions in both 2020 and 2021. 4 Adtalem Global Education Inc.RUSM students achieved a 97% and 91% first-time pass rate on the USMLE Step 1 exam in 2019 and 2020, respectively. Of first-time eligible RUSM graduates, 95% and 92% attained residency positions in 2020 and 2021, respectively. In September 2019, AUC opened its medical education program in the U.K. in partnership with University of Central Lancashire (“UCLAN”). The program offers students a Post Graduate Diploma in International Medical Sciences from UCLAN, followed by their Doctor of Medicine degree from AUC. Students are eligible to do clinical rotations at AUC’s clinical sites, which include hospitals in the U.S., the U.K., and Canada. This program is aimed at preparing students for the USMLE. MERP is a 15-week medical school preparatory program focused on enhancing the academic foundation of prospective AUC and RUSM students and providing them with the skills they need to be successful in medical school and to achieve their goals of becoming physicians. Upon successful completion of the MERP program, students are guaranteed admission to AUC or RUSM. Data has shown that the performance of students who complete the MERP program are consistent with students who were admitted directly into medical school. RUSVM RUSVM, founded in 1982 and acquired by Adtalem in 2003, provides veterinary education and confers the Doctor of Veterinary Medicine, as well as Masters of Science and Ph.D. degrees. RUSVM is one of 54 American Veterinary Medical Association (“AVMA”) accredited veterinary education institutions in the world. RUSVM is located in St. Kitts and has graduated nearly 6,000 veterinarians since inception. The mission of RUSVM is to provide the best learning environment to prepare students to become members and leaders of the worldwide public and professional healthcare system and to advance human and animal health through research and knowledge exchange. The RUSVM program is structured to provide a veterinary education that is comparable to educational programs at U.S. veterinary schools. RUSVM students complete a seven-semester, pre-clinical curriculum at the campus in St. Kitts. After completing their pre-clinical curriculum, RUSVM students enter a clinical clerkship under RUSVM direction lasting approximately 45 weeks at one of 31 clinical affiliates located in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K. RUSVM offers a one-semester Veterinary Preparatory Program (“Vet Prep”) designed to enhance the pre-clinical science knowledge and study skills that are critical to success in veterinary school. The Vet Prep advancement rate for 2018-2019 is 92%, which represents the percent of Vet Prep students in 2018-2019 who started at RUSVM within one year. In 2020 and 2021, instruction for both the RUSVM and Vet Prep programs was partially offered online in response to COVID-19 travel restrictions. As of June 30, 2021, all students except those in Vet Prep had returned to full-time instruction in St. Kitts. Student Admissions and Admissions Standards AUC, RUSM, and RUSVM employ regional admissions representatives in locations throughout the U.S. and Canada who provide information to students interested in their respective programs. A successful applicant must have completed the required prerequisite courses and, for AUC and RUSM, taken the Medical College Admission Test (“MCAT”), while RUSVM applicants must have completed the Graduate Record Exam (“GRE”). Candidates for admission must interview with an admissions representative and all admission decisions are made by the admissions committees of the medical and veterinary schools. AUC allows several entrance examinations for its international students. The MCAT (and other entrance exams) requirement is currently waived due to lack of availability of testing caused by COVID-19 closures. The Department of Education (“ED”), which usually mandates that the schools require MCAT for U.S. citizens, has waived this requirement for the calendar 2021 because of limited testing availability due to COVID-19. Both AUC and RUSM waived MCAT requirements, and the first students with waived MCAT requirements began their education in September 2020. For classes starting in September 2021, AUC and RUSM will continue to waive the MCAT requirement. RUSVM waived GRE requirements for classes starting in January 2021 and May 2021 because of limited testing availability due to COVID-19. 5 2021 Form 10-KFinancial Services ACAMS ACAMS, founded in 2001 and acquired by Adtalem in July 2016, is the largest international membership organization dedicated to enhancing the knowledge, skills, and expertise of anti-financial crime prevention professionals globally. As of June 30, 2021, ACAMS has more than 83,000 members in 175 countries. Members include representatives from a wide range of financial institutions, regulatory bodies, law enforcement agencies, and industry sectors. ACAMS further strengthens Adtalem’s financial services offerings by providing professional education, best-in-class peer network and thought leadership for the global financial crime prevention community. ACAMS’ offerings include membership services, associate, professional and advanced-level certifications, including the gold standard Certified Anti-Money Laundering Specialist (“CAMS”) certification and the Certified Global Sanctions Specialist (“CGSS”) certification, professional development through virtual and in-person training, risk assessment, and publications. The CAMS credential and ACAMS advanced certifications like CAMS-Audit and CAMS-FCI (Financial Crimes Investigation) are recognized as industry-leading in anti-money laundering (“AML”) certifications worldwide. ACAMS continues to help its members safeguard their institutions with new training initiatives and certifications on such topics as the FinTech sector, transaction monitoring, risk management, and Know-Your-Customer requirements. ACAMS’ free Ending Modern Slavery and Human Trafficking certificate that was launched in June 2020 in partnership with Finance Against Slavery and Trafficking has seen close to 10,000 professionals enrolled within a year. ACAMS launched a similar initiative in September 2020 with the World Wide Fund for Nature to end illegal wildlife trade. Through webinars, other online training and thought leadership, ACAMS continues to inform industry thinking on the compliance risks and best practices associated with virtual currencies, digital ID, artificial intelligence, green crimes, and other emerging issues for financial institutions. ACAMS markets its training programs to AML and anti-financial crime professionals from a wide range of industries, including large financial institutions, brokerage firms, the FinTech sector and insurance companies. Direct mail, print, e- mail, digital, and social media advertising are used to enhance program awareness, distribute relevant content, and to attract new members and program participants. The ACAMS website is another source of information for prospective members and event attendees. Becker Becker, founded in 1957 as Becker CPA Review and acquired by Adtalem in 1996, is a global leader in professional education serving the accounting and finance professions. Becker prepares candidates for the Certified Public Accountant (“CPA”) and Certified Management Accountant (“CMA”) certification examinations and offers continuing professional education programs and seminars. Classes are taught online and live across the U.S. and in approximately 35 foreign countries. Classes are taught directly by Becker and through licensed affiliates. Nearly one million candidates have prepared for the Uniform CPA Examination (“CPA exam”) using Becker’s CPA Exam Review Course. The CPA exam is prepared and administered by the American Institute of Certified Public Accountants (“AICPA”). Becker also offers continuing professional education and training programs in the fields of accounting and finance to help individuals and organizations achieve superior performance through professional development. To meet the demands and learning preferences of today’s busy professionals, Becker’s classes are offered in two formats: live and self-study. Becker’s test preparation revenue is primarily derived from self-study materials. The self- study product is interactive and offers the same instructor-led lectures and materials available in the live classroom courses. Becker also provides access to a wide variety of services to support students including one-on-one tutoring, success coaching, academic support, and administrative support services for its university, firm, and corporate partners. Becker management believes that it has developed competitive advantages in its 60-plus year history and track record of successful customer achievements on the CPA exam. Becker offers experienced, highly qualified instructors for each area of specialty included in the exam, including industry renowned accounting experts. Becker’s materials are continuously and extensively updated and include practice simulations and software functionality similar to those used in the CPA exam. 6 Adtalem Global Education Inc.Becker markets its courses directly to potential customers and to select employers, including the large global, national, and regional public accounting firms. Becker drives new students to its website through a combination of alumni referrals, email, digital and social media advertising, affiliate marketing, and a network of student representatives at colleges and universities across the country. Becker has long-standing relationships with all of the top 100 largest public accounting firms, including each of the “Global 7” public accounting firms. In total, Becker has relationships with more than 1,500 public accounting firms, professional societies, and universities. OCL OCL, founded in 2007 and acquired by Adtalem in May 2019, is a leading provider of compliance training, mortgage licensure preparation, continuing education, and professional development in the banking and mortgage industries across the U.S. With multi-modal formats, including webinars, videos, micro-learning, and animation, financial institutions can easily provide training programs that work best for their workforce. OCL markets its governance, risk, and compliance training, as well as professional development courses to banks and credit unions. Its offerings include over 600 online courses and 450 webinars per year. Training and courses address the diverse education needs of the institution, including frontlines, compliance teams, commercial and retail lending, executive leadership, and board of directors. OCL markets its mortgage pre-licensing, exam preparation, continuing education, and professional development training to mortgage companies and professionals. Its mortgage pre-licensing and continuing education offerings are Nationwide Mortgage Licensing System & Registry (“NMLS”) approved in all 50 states. OCL markets its library of proprietary and industry-aligned accredited courses and training programs to banks, credit unions, mortgage brokerage companies and individuals. Direct mail, print, e-mail, digital, social media, and paid search advertising enhance program awareness, distribute relevant content, and attract new customers. OCL’s websites are another source of information for prospective customers. EduPristine EduPristine, founded in 2008, is based in Mumbai, India. Adtalem completed the acquisition of its majority interest in EduPristine in February 2018, with current ownership of 71%. EduPristine is a financial services provider in India offering online and classroom programs in the areas of finance, accounting, and analytics. Discontinued Operations In accordance with GAAP, the Adtalem Brazil, Carrington, and DeVry University entities are classified as “Discontinued Operations.” As a result, all financial results, disclosures, and discussions of continuing operations in this Annual Report on Form 10-K exclude Adtalem Brazil, Carrington, and DeVry University operations, unless otherwise noted. Adtalem Brazil On April 24, 2020, Adtalem completed the sale of Adtalem Brazil to Estácio Participações S.A. (“Estácio”) and Sociedade de Ensino Superior Estaćio de Sá Ltda, a wholly owned subsidiary of Estácio (“Purchaser”), pursuant to the Stock Purchase Agreement dated October 18, 2019. Adtalem received $345.9 million in sale proceeds and $56.0 million of Adtalem Brazil’s cash, for a combined $401.9 million upon the sale. In addition, Adtalem received $110.7 million from the settlement of a deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk. 7 2021 Form 10-KCarrington On December 4, 2018, Adtalem completed the sale of Carrington to San Joaquin Valley College, Inc. (“SJVC”) pursuant to the Membership Interest Purchase Agreement (the “MIPA”) dated June 28, 2018. To support Carrington’s future success, Adtalem made a capital contribution of $7.5 million to Carrington, based on an agreed working capital balance of $11.5 million at the closing date. DeVry University On December 11, 2018, Adtalem completed the sale of DeVry University to Cogswell Education, LLC (“Cogswell”) pursuant to the purchase agreement dated December 4, 2017. To support DeVry University’s future success, Adtalem transferred DeVry University with a working capital balance of $8.75 million at the closing date. In addition, Adtalem has agreed to indemnify Cogswell for certain losses including those related to certain pre-closing Defense to Repayment claims. The purchase agreement also includes an earn-out entitling Adtalem to payments of up to $20 million over a ten- year period payable based on DeVry University’s free cash flow. Overview of the Impact of COVID-19 On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. COVID-19 has had tragic consequences across the globe and altered business and consumer activity across many industries. Management initiated several changes to the operations of our institutions and administrative functions in order to protect the health of Adtalem employees, students, and customers and to mitigate the financial effects of COVID-19 and its resultant economic slowdown. We will continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students, customers, and employees. See also the COVID-19 section in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information, including the effects of COVID-19 on our operations.  Chamberlain: Approximately 30% of Chamberlain’s students are based at campus locations and pursuing their BSN degree; at the onset of the COVID-19 outbreak, all campus-based students transitioned to online learning for didactic and select clinical experiences. The remaining 70% of Chamberlain’s students are enrolled in online programs that may or may not have clinical components and those programs continued to successfully operate. For the September 2020 session, students and employees returned to several Chamberlain campuses for limited onsite instruction. COVID-19 did not result in significant revenue losses or increased costs at Chamberlain in fiscal year 2021 and 2020. The extent of the impact in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19, the efficacy and distribution of the vaccines, and whether any pandemic surge affects healthcare facilities’ ability to continue to provide clinical experiences, most of which have resumed. Chamberlain has clinical partnerships with healthcare facilities across the U.S., minimizing the risk of suspension of all onsite clinical education experiences.  AUC and RUSM: Medical students enrolled in the basic science portion of their program transitioned to online learning at the onset of the COVID-19 outbreak. Many students left St. Maarten and Barbados to continue their studies remotely from other locations. AUC and RUSM were able to provide remote learning and have students remain eligible for U.S. federal financial aid assistance under a waiver provided by the U.S. Secretary of Education that was included in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in March 2020. The waiver was dependent upon the host country’s coronavirus state of emergency declaration. The nation of St. Maarten lifted their declaration in June 2020, and as a result, AUC’s ability to offer distance education ended after the September 2020 semester, requiring all AUC students to return to St. Maarten for basic science instruction effective January 2021. A limited number of RUSM students began returning to Barbados in January and May 2021 with a full return expected for the September 2021 semester. The Consolidated Appropriations Act, 2021 (the “Appropriations Act”) was signed into law in December 2020, and corrected technical errors in the CARES Act, which clarified the authority to operate via distance learning due to a declaration of an emergency in an applicable country or a qualifying emergency in the U.S. This section also extends these flexibilities through the end of the qualifying emergency or June 30, 2022, whichever is later. The Appropriations Act provides Adtalem’s foreign institutions the ability to continue distance education without disruption to their students’ Title IV federal financial aid. COVID-19 did not result in significant revenue losses or increased costs within the basic science programs at the medical schools in fiscal year 2021 and 2020, except with respect to housing operations, as discussed below. COVID-19 will likely have minimal impact on basic science program revenue in fiscal 8 Adtalem Global Education Inc.year 2022, except with respect to housing operations, unless students choose to not continue or start their studies during this time of uncertainty. The extent of the impact in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19 and the efficacy and distribution of the vaccines. Students who have completed their basic science education progress to clinical rotations in the U.S. and the U.K. Clinical rotations for all students were temporarily suspended in March 2020; however, some students were able to participate in online clinical elective courses during this transition period and beyond. The COVID-19 surge experienced during the winter in fiscal year 2021 across the U.S. caused many partner hospitals to again reduce the hours available for clinical experiences. As a result, although many students were able to resume their clinical education during the second quarter of fiscal year 2021, not being able to offer a full clinical program reduced revenue and operating income of AUC and RUSM in fiscal year 2021 and 2020. As of June 2021, all clinical partners of AUC and RUSM have resumed their clinical programs; however, should future surges in COVID-19 again restrict the number of clinical hours available to our students, we could experience negative effects on revenue and operating income in fiscal year 2022 and beyond. Adtalem has clinical partnerships with hospitals across the U.S. and the U.K., minimizing the risk of suspension of all onsite clinical education experiences. In addition to the loss of clinical revenue and operating income at AUC and RUSM, housing and student transportation revenue and operating income losses in fiscal year 2021 and 2020 were also impacted due to students leaving the St. Maarten and Barbados campuses to continue basic science studies remotely.  RUSVM: All basic science veterinary students transitioned to online learning beginning in March 2020. Many students left St. Kitts in March 2020 to continue their studies remotely from other locations. As of May 2021, all basic science students have returned to St. Kitts where lectures continue to be delivered remotely and labs are in-person. COVID- 19 did not result in significant revenue losses or increased costs within the basic science program in fiscal year 2021 and 2020. We do not expect a significant impact from COVID-19 on the basic science program in fiscal year 2022, unless students choose to not continue or start their studies during this time of uncertainty. RUSVM continues to be able to provide remote learning during the pandemic and have students remain eligible for U.S. federal financial aid assistance under a waiver provided by the CARES Act and the Appropriations Act through the end of the qualifying emergency or June 30, 2022, whichever is later, as described above. Students who have completed their basic science education progress to clinical rotations at select universities in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K. A few universities initially suspended onsite clinical experiences and transitioned students to online education. All universities have since resumed onsite clinical courses. The initial suspensions did not significantly reduce revenue or operating income in fiscal year 2021 and 2020. While we do not expect a significant impact from COVID-19 at RUSVM, the extent of the impact on clinical experiences in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19 and the efficacy and distribution of the vaccines.  Financial Services: Most Financial Services content, including exam preparation, certification training, continuing education, and subscriptions is delivered online. Any classroom-based learning has been moved to online. No significant COVID-19 related cost increases were realized in Financial Services in fiscal year 2021 and 2020. COVID-19 did result in revenue losses and operating income losses in fiscal year 2021 and 2020, primarily driven by the cancellation of ACAMS live conferences. Fiscal year 2020 lost revenue and operating income was also impacted at Becker from Prometric, a global leader in the provision of technology-enabled testing and assessment solutions, closing CPA testing sites, along with a number of CPA firms either delaying start dates for, or rescinding altogether, offers of employment to recent college graduates. This dampened a key driver of demand in the fourth quarter of fiscal year 2020, which is normally a time of robust demand because of the influx of new college graduates looking to begin their CPA exam preparation. ACAMS live conference revenue is not expected to return to pre-pandemic levels until COVID-19 restrictions are fully lifted and customer apprehension dissipates. COVID-19 is expected to negatively impact Financial Services revenue and operating income in fiscal year 2022 and beyond driven by lower ACAMS live conference revenue and possible weakness in demand at Becker, primarily with CPA firm customers. Virtual conferences were conducted in late fiscal year 2020 and throughout fiscal year 2021, and additional conference revenue could be replaced with virtual or hybrid events in the future; however virtual conferences are unlikely to generate the same level of revenue and operating income as live conferences. Loss of conference revenue is likely in fiscal year 2022 as ACAMS has only recently been able to offer a limited number of live conferences, mostly overseas. Large live and hybrid conferences in the U.S. are not expected to resume until possibly September 2021, and management expects any such events will not initially generate pre-pandemic levels of revenue. Management believes that other than the ACAMS conferences, longer-term operating results in the Financial Services segment will not be significantly affected by COVID-19 unless there are major employment losses with accounting professionals and recent accounting graduates, or in the banking and mortgage sectors. This is not known and cannot be 9 2021 Form 10-Kpredicted at this time. At Becker, CPA, testing sites are operating with available capacity; however, management believes hiring at CPA firms has not yet fully recovered.  Administrative Operations: Most institution and home office administrative operations continue to principally be performed remotely. This includes operations in both the U.S. and all foreign locations. These remote work arrangements have not adversely affected Adtalem’s ability to maintain operations, financial reporting systems, internal control over financial reporting, or disclosure controls and procedures. The effectiveness of our remote technology enables our ability to maintain these systems and controls. Management does not anticipate Adtalem will be materially impacted by any constraints or other impacts on our human capital resources and productivity. Travel restrictions and border closures are not expected to have a material impact on our ability to operate and achieve operational goals. While recent travel expenditures have decreased, we would expect these costs to increase as the effects of COVID-19 dissipate. No significant home office costs were incurred related to COVID-19 in fiscal year 2021 and 2020, and no such costs are anticipated in fiscal year 2022, and beyond. Market Trends and Competition Medical and Healthcare Chamberlain Chamberlain competes in the U.S. nursing education market, which has more than 2,000 programs leading to RN licensure. These include four-year educational institutions, two-year community colleges, and diploma schools of nursing. The market consists of two distinct segments: pre-licensure nursing programs that prepare students to take the NCLEX- RN licensure exam and post-licensure nursing programs that allow existing RNs to advance their education. In the pre-licensure nursing market, capacity limitations and restricted new student enrollment are common among traditional four-year educational institutions and community colleges. Chamberlain has 23 campuses located in 15 states. In Fall 2020, according to data obtained from the American Association of Colleges of Nursing (“AACN”), Chamberlain had the largest pre-licensure program in the U.S. In post-licensure nursing education, there are more than 700 institutions offering RN-to-BSN programs and more than 600 institutions offering MSN programs. Chamberlain’s RN-to-BSN degree completion option has received three certifications from Quality Matters, an independent global organization leading quality assurance in online teaching and learning environments. Chamberlain has earned the Online Learning Support, Online Teaching Support, and Online Learner Success certifications. Chamberlain’s RN-to-BSN degree completion option, MSN degree program, and DNP degree program are approved in 50 states, the District of Columbia, and the U.S. Virgin Islands. The MSN FNP track is approved in 46 states and the U.S. Virgin Islands, while the AGACP and AGPCP tracks are approved in 42 states and the U.S. Virgin Islands. The MPH program is approved in 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The MSW program is approved in 37 states and Puerto Rico. In Fall 2020, according to AACN data, Chamberlain had the largest FNP and DNP programs in the U.S. Medical and Veterinary Schools AUC and RUSM compete with approximately 150 U.S. schools of medicine, 48 U.S. colleges of osteopathic medicine, and more than 40 Caribbean medical schools as well as with international medical schools recruiting U.S. students who may be eligible to receive funding from ED Title IV programs. RUSVM competes with AVMA accredited schools, of which 33 are U.S.-based, 5 are Canadian and 16 are other international veterinary schools. There has been some recent expansion in the U.S. medical education and veterinary education enrollment capacities because of the growing supply/demand imbalance for medical doctors and veterinarians. Despite this expansion, management believes the imbalance will continue to spur demand for medical and veterinary education. 10 Adtalem Global Education Inc.Financial Services ACAMS Money laundering and the financing of terrorism are financial crimes with significant economic impact. Money laundering can occur in various forms including corruption, drug trafficking, tax evasion, and cybercrime. AML is the set of procedures, laws, and regulations designed to combat the practice of generating income through illegal actions. Professionals who need effective AML procedures include financial institutions, insurers, asset managers, lawyers, broker- dealers, private equity firms, consultants, law enforcement, and credit institutions. This training protects companies against various costs, such as financial penalties from regulatory bodies, personal liability, financial action from shareholders or employees, and reputational damage. Organizations’ training methods are met by third-parties or internally developed informal training. Regulators are encouraging companies to maintain higher control standards. Due to frequent regulatory changes, internal training is being supplemented with third-party developed training programs to meet the higher regulatory standards. ACAMS is the largest AML certifier and is recognized as an industry leader in AML credentialing. As of June 30, 2021, more than 43,000 professionals have been certified, which is completed by passing the ACAMS CAMS certification examination, CGSS certification or other ACAMS certification examinations as a qualified applicant. Two of the highly regarded industry publications are ACAMS Today and ACAMS moneylaundering.com. Prior to COVID- 19, conferences and seminars are held in 32 countries and host approximately 10,000 attendees annually. ACAMS also has chapters in 60 countries around the world, led by professionals from the respective countries or geographic regions on a voluntary basis. Becker In 2018, the AICPA reported that there were approximately 76,000 accounting graduates combined across bachelor’s and master’s degree candidates and in 2018, approximately 37,000 new candidates began the CPA exam. The number of accounting graduates has increased at a compound annual growth rate of 1.4% over the last ten years. Over that same time period, the number of first-time CPA exam test takers has declined at a compound annual rate of 1.8%; although the number of test-takers may fluctuate in specific years based on the timing of student demand and exam changes. In 2018, the number of first-time CPA exam test takers fell 14% below the ten-year average (2008-2017). Further, 2018 employment of accounting graduates at U.S. public accounting firms, a key driver of CPA demand, declined 13% from the ten-year average as firms seek alternative skill sets to expand services. Becker competes with other purveyors of exam preparation, including courses offered by colleges, universities, and other public and private training companies. Becker is the industry leader in providing CPA exam review services and has been preparing candidates to pass the CPA exam for over 60 years. From 2007-2020, 90% of all Watt Sells Award winners, which are individuals who achieved the highest cumulative scores on the CPA exam, prepared with Becker. OCL Professionals in the financial services and mortgage industry require mandatory compliance training to meet regulatory requirements and internal compliance requirements; those in the mortgage industry have licensure and continuing education requirements. The regulatory environment for the financial services and mortgage industries continues to change at a rapid pace, which requires companies to maintain higher control standards. OCL’s offerings address these needs as well as the growing importance of specialized skills and up-skilling the workforce. Organizations meet their training needs by partnering with third-party training providers and internally developed informal training. Due to frequent regulatory changes, internal training is being supplemented with third-party developed training programs to meet higher regulatory standards. OCL is one of the largest national providers of training in both the bank, credit union, and mortgage industries. 11 2021 Form 10-KAccreditation and Other Regulatory Approvals Educational institutions and their individual programs are awarded accreditation by achieving a level of quality that entitles them to the confidence of the educational community and the public they serve. Accredited institutions are subject to periodic review by accrediting bodies to ensure continued high performance and institutional and program improvement and integrity, and to confirm that accreditation requirements continue to be satisfied. College and university administrators depend on the accredited status of an institution when evaluating transfer credit and applicants to their schools; employers rely on the accreditation status of an institution when evaluating a candidate’s credentials; parents and high school counselors look to accreditation for assurance that an institution meets quality educational standards; and many professions require candidates to graduate from an accredited program in order to obtain professional licensure in their respective fields. Moreover, in the U.S., accreditation is necessary for students to qualify for federal financial assistance and most scholarship commissions restrict their awards to students attending accredited institutions. Medical and Healthcare Chamberlain Chamberlain is institutionally accredited by the Higher Learning Commission (“HLC”), a regional accreditation agency recognized by ED. In addition to institutional accreditation, Chamberlain has also obtained, or is in the process of obtaining, programmatic accreditation for specific programs. BSN, MSN, DNP, and post-graduate Advanced Practice Registered Nurses (“APRN”) certificate programs are accredited by the Commission on Collegiate Nursing Education. Chamberlain’s MPH program has commenced the accreditation process with the Council on Education for Public Health, which accepted Chamberlain’s application in October 2017. Chamberlain’s MSW program has commenced the accreditation process with the Council on Social Work Education’s Commission on Accreditation, which accepted Chamberlain’s application in May 2019 and granted candidacy status in June 2020. Medical and Veterinary Schools The Government of St. Maarten authorizes AUC to confer the Doctor of Medicine degree. AUC is accredited by the Accreditation Commission on Colleges of Medicine (“ACCM”). The ACCM is an international medical school accrediting organization for countries that do not have a national medical school accreditation body. The U.S. Department of Education National Committee on Foreign Medical Education and Accreditation (“NCFMEA”) has affirmed that the ACCM has established and enforces standards of educational accreditation that are comparable to those promulgated by the U.S. Liaison Committee on Medical Education (“LCME”). In addition, AUC is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, and New York, where robust processes are in place to evaluate and approve an international medical school’s programs. AUC students can join residency training programs in all 50 states. AUC has also been approved by the Graduate Medical Council (“GMC”), the accrediting body in the U.K., which allows AUC graduates to apply for post-graduate (residency) programs in the U.K. RUSM’s primary accreditor is Caribbean Accreditation Authority for Education in Medicine and other Health Professions (“CAAM-HP”). CAAM-HP is authorized to accredit medical programs by the government of Barbados. On July 26, 2018, Barbados authorized RUSM to confer the Doctor of Medicine degree. The NCFMEA has affirmed that CAAM-HP has established and enforces standards of educational accreditation that are comparable to those promulgated by the LCME. In addition, RUSM is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, New Jersey, and New York, where robust processes are in place to evaluate and accredit an international medical school’s programs. RUSM students can join residency training programs in all 50 states. RUSVM has been recognized by the government of the Federation of St. Christopher and Nevis (“St. Kitts”) and is chartered to confer the Doctor of Veterinary Medicine degree. The Doctor of Veterinary Medicine degree is accredited by the American Veterinary Medical Association Council on Education (“AVMA COE”). RUSVM has affiliations with 31 AVMA-accredited U.S. and international colleges of veterinary medicine so that RUSVM students can complete their final three clinical semesters of study in the U.S. or abroad. RUSVM has received accreditation for its Postgraduate Studies program from the St. Christopher & Nevis Accreditation Board. The Postgraduate Studies program offers Master of Science and Ph.D. degrees in all research areas supported by RUSVM. Areas of emphasis are guided by RUSVM's themed research centers. 12 Adtalem Global Education Inc.Regulatory Environment Student Payments Adtalem’s primary source of liquidity is the cash received from payments for student tuition, books, other educational materials, and fees. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans (“private loans”), employer educational reimbursements, scholarships, and student and family financial resources. Adtalem continues to provide financing options for its students, including Adtalem’s credit extension programs. The following table, which excludes Adtalem Brazil, Carrington, and DeVry University revenue, summarizes Adtalem’s revenue by fund source as a percentage of total revenue for fiscal years 2020 and 2019. Final data for fiscal year 2021 is not yet available. Federal assistance (Title IV) program funding (grants and loans) Private loans Student accounts, cash payments, private scholarships, employer and military provided tuition assistance, and other Total Fiscal Year 2020 2019 59 % 2 % 59 % 2 % 39 % 39 % 100 % 100 % Financial Aid All financial aid and assistance programs are subject to political and governmental budgetary considerations. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. The HEA was last reauthorized by the U.S. Congress in July 2008 and was signed into law in August 2008. In the 117th Congress, a comprehensive HEA reauthorization bill has not been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress. Some of these bills could be included in a larger legislative package, which could include the HEA. When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions. Information about Particular U.S. and Canadian Government Financial Aid Programs Chamberlain, AUC, RUSM, and RUSVM students participate in many U.S. and Canadian financial aid programs. Each of these programs is briefly described below. U.S. Federal Financial Aid Programs Students in the U.S. rely on three types of ED student financial aid programs under Title IV of the HEA. 1. Grants. Chamberlain undergraduate students may participate in the Federal Pell Grant and Federal Supplemental Education Opportunity Grant programs.  Federal Pell Grants: These funds do not have to be repaid and are available to eligible undergraduate students who demonstrate financial need and who have not already received a baccalaureate degree. For the 2020-2021 school year, eligible students could receive Federal Pell Grants ranging from $320 to $9,517.  Federal Supplemental Educational Opportunity Grant (“FSEOG”): This is a supplement to the Federal Pell Grant and is only available to the neediest undergraduate students. Federal rules restrict the amount of FSEOG funds that may go to a single institution. The maximum individual FSEOG award is established by the institution but cannot exceed $4,000 per academic year. Educational institutions are required to supplement federal funds with a 25% matching contribution. Institutional matching contributions may be satisfied, in whole or in part, by state grants, scholarship funds (discussed below), or by externally provided scholarship grants. 13 2021 Form 10-K 2. Loans. Chamberlain, AUC, RUSM, and RUSVM students may participate in the Direct Unsubsidized and PLUS programs within the Federal Direct Student Loan Program. Chamberlain undergraduate students may also be eligible for Subsidized Loans within the Federal Direct Student Loan Program.  Direct Subsidized Loan: Awarded on the basis of student financial need, it is a low-interest loan (a portion of the interest is subsidized by the Federal government) available to undergraduate students with interest charges and principal repayment deferred until six months after a student no longer attends school on at least a half- time basis (the student is responsible for paying the interest charges during the six months after no longer attending school on at least a half-time basis for those loans with a first disbursement between July 1, 2012 and July 1, 2014). First time borrowers after July 1, 2013 are eligible for Direct Subsidized Loans only for 150% of the published length of their academic program. Loan limits per academic year range from $3,500 for students in their first and second academic year to $5,500 for students in their third or higher undergraduate academic year.  Direct Unsubsidized Loan: Awarded to students who do not meet the needs test or as an additional supplement to the Direct Subsidized Loan. These loans incur interest from the time funds are disbursed, but actual principal and interest payments may be deferred until six months after a student no longer attends school on at least a half-time basis. Direct Unsubsidized Loan limits per academic year range from $2,000 for students in their first and second academic year to $7,000 in later undergraduate years and increasing to $20,500 per academic year for graduate and professional program students. Additionally, a student without financial need may borrow an additional Direct Unsubsidized Loan amount up to the limit of the Direct Subsidized Loan at their respective academic grade level. The total Direct Subsidized and/or Direct Unsubsidized Loan aggregate borrowing limit for undergraduate students is $57,500 and $138,500 for graduate students, which is inclusive of Direct Subsidized and Direct Unsubsidized Loan amounts borrowed as an undergraduate.  Direct Grad PLUS and Direct Parent PLUS Loans: Enables a graduate student or parents of a dependent undergraduate student to borrow additional funds to meet the cost of the student’s education. These loans are not based on financial need, nor are they subsidized. These loans incur interest from the time funds are disbursed, but actual principal and interest payments may be deferred until a student no longer attends school on at least a half-time basis. Graduate students and parents may borrow funds up to the cost of attendance, which includes allowances for tuition, fees, and living expenses. Both Direct Grad PLUS and Direct Parent PLUS Loans are subject to credit approval, which generally requires the borrower to be free of any current adverse credit conditions. A co-borrower may be used to meet the credit requirements. 3. Federal Work-study. Chamberlain participates in this program, which offers work opportunities, both on or off campus, on a part-time basis to students who demonstrate financial need. Federal Work-study wages are paid partly from federal funds and partly from qualified employer funds. State Financial Aid Programs Certain states, including Arizona, California, Florida, Illinois, Indiana, Ohio, and Vermont, offer state grant or loan assistance to eligible undergraduate students attending Adtalem institutions. Canadian Government Financial Aid Programs Canadian citizens or permanent residents of Canada (other than students from the Northwest Territories, Nunavet, or Quebec) are eligible for loans under the Canada Student Loans Program, which is financed by the Canadian government. Eligibility and amount of funding vary by province. Students attending Chamberlain online while in the U.S., or attending AUC, RUSM, or RUSVM, may be eligible for the Canada Student Loan Program. The loans are interest-free while the student is in school, and repayment begins six months after the student leaves school. Qualified students also may benefit from Canada Study Grants (designed for students whose financial needs and special circumstances cannot otherwise be met), tax-free withdrawals from retirement savings plans, tax-free education savings plans, loan repayment extensions, and interest relief on loans. 14 Adtalem Global Education Inc.Information about Other Financial Aid Programs Private Loan Programs Some Chamberlain, AUC, RUSM, and RUSVM students rely on private (non-federal) loan programs borrowed from private lenders for financial assistance. These programs are used to finance the gap between a student’s educational and living costs and their financial aid awards. The amount of the typical loan varies significantly according to the student’s enrollment and financial aid awards. Most private loans are approved using the student’s or a co-borrower’s credit history. The cost of these loans varies, but in almost all cases will be more expensive than the federal programs. The application process is separate from the federal financial aid process. Student finance personnel at Adtalem’s degree-granting institutions coordinate these processes so that students generally receive assistance from the federal and state programs before utilizing private loans. Adtalem does not maintain a preferred lender list, but does list all of the lenders that it is aware of that made private loans to Adtalem students in the previous year and still offer loans to Adtalem students. Tax-Favored Programs The U.S. has a number of tax-favored programs aimed at promoting savings for future college expenses. These include state-sponsored “529” college savings plans, state-sponsored prepaid tuition plans, education savings accounts (formerly known as education IRAs), custodial accounts for minors, Hope and Lifetime Learning tax credits, and tax deductions for interest on student loans. Adtalem-Provided Financial Assistance Each of our institutions offer a variety of scholarships to assist with tuition and fee expenses, some of which are one- time awards while others are renewable. Some students may also qualify for more than one scholarship at a time. Chamberlain students are eligible for numerous institutional scholarships with awards up to $2,500 per semester. Students at AUC may be eligible for an institutional scholarship, ranging from $5,000 to $80,000 to cover expenses incurred from tuition and fees. Students at RUSM may be eligible for various institutional scholarships, ranging from $5,000 to $108,000, to cover expenses incurred from housing, tuition and fees. Students at RUSVM may be eligible for an institutional scholarship, ranging from $2,000 to $27,123 to cover expenses incurred from tuition and fees. Adtalem’s credit extension programs are available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, books, and fees, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM, and RUSVM allow students to finance their living expenses. Repayment plans for financing agreements are developed to address the financial circumstances of the particular student. Interest charges at rates from 3.0% to 12.0% per annum accrue each month on the unpaid balance once a student withdraws or graduates from a program. Most students are required to begin repaying their loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay, which reduces the possibility of over borrowing. Payments may increase upon completing or departing school. After a student leaves school, the student typically will have a monthly installment repayment plan. The finance agreements do not impose any origination fees, in general have a fixed rate of interest, and most carry annual and aggregate maximums that ensure that they are only a supplemental source of funding and not relied on as the main source. Borrowers must be current in their payments in order to be eligible for subsequent disbursements. Borrowers are advised about the terms of the financing agreements and counseled to utilize all other available private and federal funding options before securing financing through the institution. Adtalem financing agreements are carried on our balance sheet, net of related reserves, and there are no relationships with external parties that reduce Adtalem’s risk of collections. 15 2021 Form 10-KEmployer-Provided Tuition Assistance Chamberlain students who receive employer tuition assistance may choose from several deferred tuition payment plans. Students eligible for tuition reimbursement plans may have their tuition billed directly to their employers or payment may be deferred until after the end of the session. Educational expenses paid by an employer on behalf of an employee generally are excludable from the employee’s income if provided under a qualified educational assistance plan. At present, the maximum annual exclusion is $5,250. Becker Students taking the Becker review courses are not eligible for federal or state financial aid, but many receive partial or full tuition reimbursement from their employers. Private loans are also available to students to help meet the program costs. Legislative and Regulatory Requirements Government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Adtalem’s administration of these programs is periodically reviewed by various regulatory agencies and is subject to audit or investigation by other governmental authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding. U.S. Federal Regulations Our domestic postsecondary institutions are subject to extensive federal and state regulations. The HEA and the related ED regulations govern all higher education institutions participating in Title IV programs, and provide for a regulatory triad by mandating specific regulatory responsibilities for each of the following: (1) the federal government through ED, (2) the accrediting agencies recognized by ED, and (3) state higher education regulatory bodies. To be eligible to participate in Title IV programs, a postsecondary institution must be accredited by an accrediting body recognized by ED, must comply with the HEA and all applicable regulations thereunder, and must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution operates, as applicable. In addition to governance by the regulatory triad, there has been increased focus by members of the U.S. Congress and federal agencies, including ED, the Consumer Financial Protection Bureau (“CFPB”), and the Federal Trade Commission (“FTC”), on the role that proprietary educational institutions play in higher education. We expect that this challenging regulatory environment will continue for the foreseeable future. Changes in or new interpretations of applicable laws, rules, or regulations could have a material adverse effect on our eligibility to participate in Title IV programs, accreditation, authorization to operate in various states, permissible activities, and operating costs. The failure to maintain or renew any required regulatory approvals, accreditation, or state authorizations could have a material adverse effect on us. ED regulations regarding financial responsibility provide that, if any one of our Title IV participating institutions (“Title IV Institutions”) is unable to pay its obligations under its program participation agreement as a result of operational issues and/or an enforcement action, our other Title IV Institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. As a result, even though Adtalem’s Title IV Institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV Institutions and Adtalem as a whole and could result in the imposition of significant restrictions on the ability of Adtalem’s other Title IV Institutions and Adtalem as a whole to operate. For further information, see “A bankruptcy filing by us or by any of our Title IV Institutions, or a closure of one of our Title IV Institutions, would lead to an immediate loss of eligibility to participate in Title IV programs” under subsection “Risks Related to Adtalem’s Highly Regulated Industry” in Item 1A. “Risk Factors.” We have summarized the most significant regulatory requirements applicable to our domestic postsecondary operations. Adtalem has been impacted by these regulations and enforcement efforts and is currently facing multiple related lawsuits arising from the enhanced scrutiny facing the proprietary education sector. For information regarding such pending 16 Adtalem Global Education Inc.investigations and litigation, and the potential impact such matters could have on our institutions or on Adtalem, see in this Annual Report on Form 10-K: (1) Note 20 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data,” (2) the subsection of Item 1A. “Risk Factors” titled “Risks Related to Adtalem’s Highly Regulated Industry,” and (3) the subsection of Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” titled “Regulatory Environment.” Eligibility and Certification Procedures The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in the Title IV programs must be certified to participate and is required to periodically renew this certification. Institutions that violate certain ED Title IV regulations, including its financial responsibility and administrative capability regulations, may lose their eligibility to participate in Title IV programs or may only continue participation under provisional certification. Schools that do not meet financial responsibility requirements are required to submit a letter of credit equal to at least 10% of their prior fiscal year Title IV disbursements and submit to ED’s heightened cash monitoring process. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may withdraw an institution’s provisional certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution. Defense to Repayment Regulations Under the HEA, ED is authorized to specify in regulations, which acts or omissions of an institution of higher education a borrower may assert as a Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program. On July 1, 2020, new Defense to Repayment regulations went into effect that include a higher threshold for establishing misrepresentation, provides for a statute of limitation for claims submission, narrows the current triggers allowed for letter of credit requirements, and eliminates provisions for group discharges. The new regulations are effective with claims on loans disbursed on or after July 1, 2020. The “90/10 Rule” An ED regulation known as the “90/10 Rule” affects only proprietary postsecondary institutions, such as Chamberlain, AUC, RUSM, and RUSVM. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Title IV student financial assistance programs in two consecutive fiscal years loses eligibility to participate in these programs for at least two fiscal years. The American Rescue Plan Act of 2021 (the “Rescue Act”) enacted on March 11, 2021 amended the 90/10 rule to require that a proprietary institution derive no more than 90% of its revenue from federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs and military tuition assistance benefits. This change is subject to negotiated rulemaking, which will not begin prior to October 1, 2021. The amended rule will first apply to institutional fiscal years beginning on or after January 1, 2023. The following table details the percentage of revenue on a cash basis from federal financial assistance programs (excluding the U.S. Department of Veterans Affairs and military tuition assistance benefits) for each of Adtalem’s Title IV-eligible institutions for fiscal years 2020 and 2019. Final data for fiscal year 2021 is not yet available. Chamberlain University American University of the Caribbean School of Medicine Ross University School of Medicine Ross University School of Veterinary Medicine Fiscal Year 2020 2019 62 % 81 % 85 % 84 % 62 % 75 % 83 % 83 % In September 2016, Adtalem committed to voluntarily limit to 85% the amount of revenue that each of its Title IV- eligible institutions derive from federal funding, including the U.S. Department of Veterans Affairs and military tuition assistance benefits. As disclosed in the third-party review reports that have been made publicly available, Adtalem’s institutions have met this lower threshold for each fiscal year since the commitment was made. Adtalem is committed to implementing measures to promote responsible recruitment and enrollment, successful student outcomes, and informed student choice. Management believes students deserve greater transparency to make informed choices about their 17 2021 Form 10-K education. This commitment builds upon a solid foundation and brings Adtalem to a new self-imposed level of public accountability and transparency. Incentive Compensation An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid. The law and regulations governing this requirement have not established clear criteria for compliance in all circumstances, but, prior to 2011, there were 12 safe harbors that defined specific types of compensation that were deemed to constitute permissible incentive compensation. New rules effective in 2011 eliminated the 12 safe harbors. These changes increased the uncertainty about what constitutes incentive compensation and which employees are covered by the regulation. This makes the development of effective and compliant performance metrics more difficult to establish. As such, these changes have limited and are expected to continue to limit Adtalem’s ability to compensate our employees based on their performance of their job responsibilities, which could make it more difficult to attract and retain highly-qualified employees. Management believes that Adtalem has not been, nor is currently, involved in any activities that violate the restrictions on commissions, bonuses, or other incentive payments to any person involved in student recruitment, admissions, or awarding of Title IV program funds. Standards of Financial Responsibility A financial responsibility test is required for continued participation by an institution’s students in U.S. federal financial assistance programs. For Adtalem’s participating institutions, this test is calculated at the consolidated Adtalem level. The test is based upon a composite score of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A minimum score of 1.5 is necessary to meet ED’s financial standards. Institutions with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible, but require additional oversight. These institutions are subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is considered not financially responsible. However, an institution with a score of less than 1.0 may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year). For the past several years, Adtalem’s composite score has exceeded the required minimum of 1.5. Changes to the manner in which the composite score is calculated that were effective on July 1, 2020 has negatively affected Adtalem’s composite score for fiscal year 2021 and will continue to negatively affect future Adtalem scores. At this time, management does not believe these changes by themselves will result in the score falling below 1.5. However, as a result of the acquisition of Walden and the related transactions, Adtalem expects its consolidated composite score to fall below 1.5 at its next financial responsibility test. If Adtalem becomes unable to meet requisite financial responsibility standards within the regulations, management believes it will be able to otherwise demonstrate its ability to continue to provide educational services; however, our institutions could still be subject to heightened cash monitoring or be required to post a letter of credit to continue to participate in federal and state financial assistance programs. Administrative Capability The HEA directs ED to assess the administrative capability of each institution to participate in Title IV programs. The failure of an institution to satisfy any of the criteria used to assess administrative capability may cause ED to determine that the institution lacks administrative capability and, therefore, subject the institution to additional scrutiny or deny its eligibility for Title IV programs. State Authorization Institutions that participate in Title IV programs must be authorized to operate by the appropriate postsecondary regulatory authority in each state where the institution has a physical presence. Chamberlain is specifically authorized to operate in all of the domestic jurisdictions that require such authorizations. Some states assert authority to regulate all 18 Adtalem Global Education Inc.degree-granting institutions if their educational programs are available to their residents, whether or not the institutions maintain a physical presence within those states. Chamberlain has obtained licensure in states which require such licensure and where their students are enrolled and is an institutional participant in the National Council for State Authorization Reciprocity Agreements (“NC-SARA”) initiative. On December 19, 2016, ED published new rules concerning requirements for institutional eligibility to participate in Title IV programs. These regulations, which would have become effective beginning July 1, 2018, but were delayed until July 1, 2020, were subsequently renegotiated as part of the 2018-2019 Accreditation and Innovation rule-making sessions. The renegotiated rule went into effect on July 1, 2020 and requires an institution offering distance education or correspondence courses to be authorized by each state from which the institution enrolls students, if such authorization is required by the state. If an institution offers postsecondary education through distance education or correspondence courses in a state that participates in a state authorization reciprocity agreement, and the institution offering the program is located in a state where it is also covered by such an agreement, the institution would be considered legally authorized to offer postsecondary distance or correspondence education in the state where courses are offered via distance education, subject to any limitations in that agreement. The regulations also require an institution to document the state processes for resolving complaints from students enrolled in programs offered through distance education or correspondence courses. Lastly, the regulations require that an institution provide certain disclosures to enrolled and prospective students regarding its programs that lead to professional licensure. Cohort Default Rates ED has instituted strict regulations that penalize institutions whose students have high default rates on federal student loans. Depending on the type of loan, a loan is considered in default after the borrower becomes at least 270 or 360 days past due. For a variety of reasons, higher default rates are often found in private-sector institutions and community colleges, many of which tend to have a higher percentage of low-income students enrolled compared to four-year publicly supported and independent colleges and universities. Educational institutions are penalized to varying degrees under the Federal Direct Student Loan Program, depending on the default rate for the “cohort” defined in the statute. An institution with a cohort default rate that exceeds 20% for the year is required to develop a plan to reduce defaults, but the institution’s operations and its students’ ability to utilize student loans are not restricted. An institution with a cohort default rate of 30% or more for three consecutive years is ineligible to participate in these loan programs and cannot offer student loans administered by ED for the fiscal year in which the ineligibility determination is made and for the next two fiscal years. Students attending an institution whose cohort default rate has exceeded 30% for three consecutive years are also ineligible for Federal Pell Grants. Any institution with a cohort default rate of 40% or more in any year is subject to immediate limitation, suspension, or termination proceedings from all federal aid programs. According to ED, the three-year cohort default rate for all colleges and universities eligible for federal financial aid was 9.7% in fiscal year 2017 (the latest period for which data are available) and 10.1% in fiscal year 2016. The latest period for which final three-year data is available is fiscal year 2017. Default rates for Chamberlain, AUC, RUSM, and RUSVM students are as follows: Chamberlain University American University of the Caribbean School of Medicine Ross University School of Medicine Ross University School of Veterinary Medicine Satisfactory Academic Progress Cohort Default Rate 2017 2016 3.4 % 1.4 % 1.3 % 0.9 % 3.5 % 0.7 % 1.1 % 1.2 % In addition to the requirements that educational institutions must meet, student recipients of financial aid must maintain satisfactory academic progress toward completion of their program of study and an appropriate grade point average. 19 2021 Form 10-K Change of Ownership or Control Any material change of ownership or change of control of Adtalem, depending on the type of change, may have significant regulatory consequences for each of our Title IV Institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors and/or reauthorization by each institutions’ state licensing agencies. If Adtalem experiences a material change of ownership or change of control, then our Title IV Institutions may cease to be eligible to participate in Title IV programs until recertified by ED. There is no assurance that such recertification would be obtained on a timely basis. After a material change in ownership or change of control, most institutions will participate in Title IV programs on a provisional basis for a period of one to three years. In addition, each Title IV Institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, which evaluation may include a comprehensive review. In addition, some states in which our Title IV Institutions are licensed require approval (in some cases, advance approval) of changes in ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change in ownership or control. Refer to the risk factor titled “If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditation and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business” under subsection “Risks Related to Adtalem’s Highly Regulated Industry” in Item 1A. “Risk Factors.” State Approvals and Licensing Adtalem institutions require authorizations from many state higher education authorities to recruit students, operate schools, conduct exam preparation courses, and grant degrees. Generally, the addition of any new program of study or new operating location also requires approval by the appropriate licensing and regulatory agencies. In the U.S., each Chamberlain location is approved to grant degrees by the respective state in which it is located. Additionally, many states require approval for out-of-state institutions to recruit within their state or offer instruction through online modalities to residents of their states. Adtalem believes its institutions are in compliance with all state requirements as an out-of-state institution. AUC and RUSM clinical programs are accredited as part of their programs of medical education by their respective accrediting bodies, approved by the appropriate boards in those states that have a formal process to do so, and are reported to ED as required. Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted approximately $8.9 million of surety bonds with regulatory authorities on behalf of Chamberlain, AUC, RUSM, RUSVM, Becker, and OCL. Certain states have set standards of financial responsibility that differ from those prescribed by federal regulation. Adtalem believes its institutions are in compliance with state and Canadian provincial regulations. If Adtalem were unable to meet the tests of financial responsibility for a specific jurisdiction, and could not otherwise demonstrate financial responsibility, Adtalem could be required to cease operations in that state. To date, Adtalem has successfully demonstrated its financial responsibility where required. Seasonality The seasonal pattern of Adtalem’s enrollments and its educational programs’ starting dates affect the results of operations and timing of cash flows. 20 Adtalem Global Education Inc.Human Capital As of June 30, 2021, Adtalem had the following number of employees: Chamberlain University Medical and Veterinary Schools Financial Services Home Office Total Faculty and Staff 1,681 943 665 735 4,024 Temporary and Student Employees 324 24 37 17 402 Total 2,005 967 702 752 4,426 Adtalem also utilizes approximately 2,500 independent contractors who teach as adjunct faculty and instructors. These independent contractors are not included in the above table. Our management believes that Adtalem has good relations with its employees. We regularly gather feedback from our employees through our Engagement Survey to gain insight into how our employees perceive their work environment, the resources to do their job, the quality of communications within and across teams, and their commitment to the organization. Engagement is a part of our culture. We want to understand what is working well and where we have areas for improvement. Two important measures that we examine through the Engagement Survey are Engagement and Enablement. Engagement is the “want to” of work, or more specifically, whether employees are committed to the organization and if they are willing to put in extra effort for the good of the organization. Enablement is the “can do” of work, meaning employee skills and abilities are fully utilized in their roles and whether the organizational environment supports them in getting their work done. Where global benchmarks are available, we are typically 5-10% above the benchmark for overall Engagement and Enablement, illustrating our strong focus on the employee experience and eye towards continuous improvement. Over the last year, we have added dimensions to our Engagement Survey to gather feedback on our response to the COVID-19 pandemic, as well as the comfort level of our employees to return to the workplace. This feedback was invaluable when developing a thoughtful approach for returning to the workplace across all office locations. Selected results from our Engagement Surveys were as follows: Topic Pandemic Response November 2020 Engagement Survey favorability in the dimension of Pandemic (8 questions) Key Question - My organization is responding effectively to changes in the business environment caused by the pandemic Key Question - Assuming appropriate safeguards are followed, how comfortable do you feel about returning to the office? (Excludes those that have indicated they are already working in the office at least part-time) Engagement May 2021 Engagement Survey favorability in the dimension of Engagement Enablement May 2021 Engagement Survey favorability in the dimension of Enablement Respect and Recognition May 2021 Engagement Survey favorability in the dimension of Respect and Recognition Favorability (top 2 ratings) 73 % 89 % 52 % 71 % 75 % 78 % Diversity and inclusion are core tenets of our culture at Adtalem. Not only do we focus on ensuring a diverse workforce through our Talent First agenda, our leadership team participates in initiatives that further the advancement of historically 21 2021 Form 10-K under-represented groups in society. We have been highly intentional with our practices, programs, and policies to ensure that women and people of color are getting equitable access and experience to opportunities that can better position them for career growth. By doing this, we believe that we can strengthen our ability to better serve our students, members, and employer partners, as well as make a greater social and economic impact in our global communities. One important program around this initiative is Adtalem EDGE, which stands for Empowerment, Diversity, Growth, and Excellence. Adtalem EDGE is a network of leadership scholars and professionals that promotes the enhanced career experience and advancement of women in leadership roles, while also fostering a culture of diversity and overall inclusiveness at Adtalem and in the community. This mission is supported by providing educational resources, professional development and networking, and affording leadership opportunities that facilitates career advancement. We continuously measure representation amongst our employee population and also make it a focus in our aforementioned Engagement Survey to ensure there are no significant differences amongst groups in terms of engagement, enablement, and our employee’s view of their psychological safety within our organization. As of June 30, 2021, our employee diversity was as follows: Level All Levels Management Sr. Management Executive Female People of Color 79 % 67 % 65 % 48 % 36 % 33 % 28 % 13 % Selected results from our May 2021 Engagement Survey were as follows: Category Engagement Enablement Psychological Safety People of Color White Female Male 71 % 75 % 78 % 73 % 76 % 81 % 72 % 75 % 79 % 70 % 75 % 78 % Our focus on these initiatives, both as an organization and among our leadership team, has resulted in our recognition as a leader in diversity, equity, and inclusion in 2021 from multiple outlets, including:  Forbes: Best Employers for Diversity  Newsweek: America’s Most Responsible Companies  Ranked as a Top 5 Company in Illinois for Corporate Board Diversity  DiversityJobs.com: Top Employer in Higher Education  Inspiring Workplace Awards: Gold Award for the Diversity and Inclusion Category Finally, Adtalem offers a comprehensive benefits package for eligible employees. In addition to offering traditional health and welfare benefits, we also offer a generous paid-time off program, multiple vehicles to accumulated retirement savings, domestic partner benefits, adoption assistance, paid parental leave for both mothers and fathers, among others. To help mitigate the impact of rising healthcare costs, we have made numerous changes to our benefits programs to increase flexibility and enhance program offerings. Intellectual Property Adtalem owns and uses numerous trademarks and service marks, such as “Adtalem,” “American University of the Caribbean,” “Association of Anti-Money Laundering Specialists,” “ACAMS,” “Becker Professional Education,” “Becker CPA Review,” “Chamberlain College of Nursing,” “Ross University” and others. All trademarks, service marks, certification marks, patents, and copyrights associated with its businesses are owned in the name of Adtalem Global Education Inc. or a subsidiary of Adtalem Global Education Inc. Adtalem vigorously defends against infringements of its trademarks, service marks, certification marks, patents, and copyrights. 22 Adtalem Global Education Inc. Available Information We use our website (www.adtalem.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website in addition to following press releases, SEC filings, and public conference calls, and webcasts. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts. You may also access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the Securities and Exchange Commission (“SEC”), free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report. Item 1A. Risk Factors Summary of Risk Factors The summary of risks below provides an overview of the principal risks we are exposed to in the normal course of our business activities: Risks Related to Adtalem’s Highly Regulated Industry  We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry.  The ongoing regulatory effort aimed at proprietary postsecondary institutions of higher education could be a catalyst for additional legislative or regulatory restrictions, investigations, enforcement actions, and claims.  Adverse publicity arising from investigations, claims, or actions brought against us or other proprietary higher education institutions may negatively affect our reputation, business, or stock price, or attract additional investigations, lawsuits, or regulatory action.  Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions. The defense and resolution of these matters could require us to expend significant resources.  ED has issued regulations setting forth new standards and procedures related to borrower defenses to repayment of Title IV loan obligations, and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility. It is possible that a finding or allegation arising from current or future legal proceedings or governmental administrative actions may create significant liability under the proposed regulations.  Within the Defense to Repayment regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities.  We are subject to risks relating to regulatory matters. If we fail to comply with the extensive regulatory requirements for our operations, we could face fines and penalties, including loss of access to federal and state student financial aid for our students as well as significant civil liability.  Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments.  Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control.  ED rules prohibiting “substantial misrepresentation” are very broad. As a result, we face increased exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs.  Regulations governing the eligibility of our U.S. degree-granting institutions to participate in Title IV programs preclude us from compensating any employee or third-party involved in student recruitment, admissions, or the awarding of financial aid based on their success in those areas. These regulations could limit our ability to attract and 23 2021 Form 10-Kretain highly-qualified employees, to sustain and grow our business, or to develop or acquire businesses that would not otherwise be subject to such regulations.  A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to   participate in Title IV programs. If ED does not recertify any one of our institutions to continue participating in Title IV programs, students at that institution would lose their access to Title IV program funds. Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs. If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs.  A bankruptcy filing by us or by any of our Title IV Institutions, or a closure of one of our Title IV Institutions, would lead to an immediate loss of eligibility to participate in Title IV programs.  Student loan defaults could result in the loss of eligibility to participate in Title IV programs.  Our failure to comply with ED’s credit hour rule could result in sanctions and other liability.  If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state.  Our ability to place our medical schools’ students in hospitals in the U.S. may be limited by efforts of certain state government regulatory bodies, which may limit the growth potential of our medical schools, put our medical schools at a competitive disadvantage to other medical schools, or force our medical schools to substantially reduce their class sizes.  Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage.  We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program.  A failure of our vendors to comply with applicable regulations in the servicing of our students and institutions could subject us to fines or restrictions on or loss of our ability to participate in Title IV programs.  We provide financing programs to assist some of our students in affording our educational offerings. These programs are subject to various federal and state rules and regulations. Failure to comply with these regulations could subject us to fines, penalties, obligations to discharge loans, and other injunctive requirements.  Release of confidential information could subject us to civil penalties or cause us to lose our eligibility to participate in Title IV programs.  We could be subject to sanctions if we fail to accurately and timely report sponsored students’ tuition, fees, and enrollment to the sponsoring agency. Risks Related to Adtalem’s Business  Outbreaks of communicable infections or diseases, or other public health pandemics, such as the current global coronavirus outbreak and the efficacy and distribution of COVID-19 vaccines, in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business.  Natural disasters or other extraordinary events or political disruptions may cause us to close some of our schools.  Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively.  We are subject to risks relating to enrollment of students. If we are not able to continue to successfully recruit and  retain our students, our revenue may decline. If our graduates are unable to find appropriate employment opportunities or obtain professional licensure or certification, we may not be able to recruit new students.  We face heightened competition in the postsecondary education market from both public and private educational institutions.  The personal information that we collect may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations.  System disruptions and vulnerability from security risks to our computer network or information systems could severely impact our ability to serve our existing students and attract new students.  Our ability to open new campuses, offer new programs, and add capacity is dependent on regulatory approvals and requires financial and human resources. 24 Adtalem Global Education Inc. We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans.  We may not be able to successfully identify, pursue, or integrate acquisitions.  Proposed changes in, or lapses of, U.S. tax laws regarding earnings from international operations could adversely affect our financial results.  Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results. Risks Related to Acquisition  The Acquisition will involve substantial costs.  In connection with the Acquisition, we will incur additional indebtedness, which could adversely affect Adtalem, including our business flexibility and will increase our interest expense.  Despite current indebtedness levels, we may still be able to incur substantially more debt, including secured debt, which could further exacerbate the risks we face.  We and our subsidiaries may not be able to generate sufficient cash to service all of our indebtedness following the Acquisition, including the Notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.  The combined company may be unable to successfully integrate the business of Adtalem and the Walden business acquired in the Acquisition and realize the anticipated benefits of the Acquisition. Risks Related to Shareholder Activism  Shareholder activism, including public criticism of Adtalem or our management team, may adversely affect us. Adtalem’s business operations are subject to numerous risks and uncertainties, some of which are not entirely within our control. Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Adtalem’s common stock. If any of the following risks are realized, Adtalem’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Adtalem’s common stock could be materially and adversely affected. Management cannot predict all the possible risks and uncertainties that may arise. Risks and uncertainties that may affect Adtalem’s business include the following: Risks Related to Adtalem’s Highly Regulated Industry We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry. Due to the highly regulated nature of proprietary postsecondary institutions, we are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of non-compliance, and lawsuits by federal and state governmental agencies, regulatory agencies, accrediting agencies, present and former students and employees, shareholders, and other third parties, any of whom may allege violations of any of the legal and regulatory requirements applicable to us. If the results of any such claims or actions are unfavorable to us or one or more of our institutions, we may be required to pay monetary judgments, fines, or penalties, be required to repay funds received under Title IV programs or state financial aid programs, have restrictions placed on or terminate our schools’ or programs’ eligibility to participate in Title IV programs or state financial aid programs, have limitations placed on or terminate our schools’ operations or ability to grant degrees and certificates, have our schools’ accreditations restricted or revoked, or be subject to civil or criminal penalties. ED regulations regarding financial responsibility provide that, if any one of our Title IV Institutions is unable to pay its obligations under its Program Participation Agreement (“PPA”) as a result of operational issues and/or an enforcement action, our other Title IV Institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. As a result, even though Adtalem’s Title IV Institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV Institutions and Adtalem as a whole and could 25 2021 Form 10-Kresult in the imposition of significant restrictions on the ability for Adtalem’s other Title IV Institutions and Adtalem as a whole to operate. The ongoing regulatory effort aimed at proprietary postsecondary institutions of higher education could be a catalyst for additional legislative or regulatory restrictions, investigations, enforcement actions, and claims. The proprietary postsecondary education sector has at times experienced scrutiny from federal legislators, agencies, and state legislators and attorneys general. An adverse disposition of these existing inquiries, administrative actions, or claims, or the initiation of other inquiries, administrative actions, or claims, could, directly or indirectly, have a material adverse effect on our business, financial condition, result of operations, and cash flows and result in significant restrictions on us and our ability to operate. Adverse publicity arising from investigations, claims, or actions brought against us or other proprietary higher education institutions may negatively affect our reputation, business, or stock price, or attract additional investigations, lawsuits, or regulatory action. Adverse publicity regarding any past, pending, or future investigations, claims, settlements, and/or actions against us or other proprietary postsecondary education institutions could negatively affect our reputation, student enrollment levels, revenue, profit, and/or the market price of our common stock. Unresolved investigations, claims, and actions, or adverse resolutions or settlements thereof, could also result in additional inquiries, administrative actions or lawsuits, increased scrutiny, the withholding of authorizations, and/or the imposition of other sanctions by state education and professional licensing authorities, taxing authorities, our accreditors and other regulatory agencies governing us, which, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions. The defense and resolution of these matters could require us to expend significant resources. As described in Note 20 “Commitments and Contingencies,” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data,” Adtalem, and former subsidiaries DeVry University, Inc., and DeVry/New York Inc. are the subject of consumer lawsuits alleging facts similar to those alleged by the FTC and ED in previously resolved actions. On February 27, 2020, the Department of Justice (“DOJ”) notified the U.S. District Court for the District of Georgia that it would decline to intervene in two qui tam False Claims Act actions filed by former DeVry University employees related to the subject matter of the Civil Investigative Demands. Those actions were unsealed on March 2, 2020, and we cannot predict their outcome. Due to the regulatory and enforcement efforts at times directed at proprietary postsecondary higher education institutions and adverse publicity arising from such efforts, we may face additional government and regulatory investigations and actions, lawsuits from private plaintiffs, and shareholder class actions and derivative claims. We may incur significant costs and other expenses in connection with our response to, and defense, resolution, or settlement of, investigations, claims, or actions, or group of related investigations, claims, or actions, which, individually or in the aggregate, could be outside the scope of, or in excess of, our existing insurance coverage and could have a material adverse effect on our financial condition, results of operations, and cash flows. As part of our resolution of any such matter, or group of related matters, we may be required to comply with certain forms of injunctive relief, including altering certain business practices, or pay substantial damages, settlement costs, fines, and/or penalties. In addition, findings or claims or settlements thereof could serve as a basis for additional lawsuits or governmental inquiries or enforcement actions, including actions under ED’s Defense to Repayment regulations. Such actions, individually or combined with other proceedings, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain, or renew licenses, approvals, or accreditation, and maintain eligibility to participate in Title IV, Department of Defense and Veterans Affairs programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us under Defense to Repayment regulations, any of which could have a material 26 Adtalem Global Education Inc.adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. ED has issued regulations setting forth new standards and procedures related to borrower defenses to repayment of Title IV loan obligations, and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility. It is possible that a finding or allegation arising from current or future legal proceedings or governmental administrative actions may create significant liability under the proposed regulations. Under the HEA, ED is authorized to specify in regulations, which acts or omissions of an institution of higher education a borrower may assert as a Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program. On July 1, 2020, new Defense to Repayment regulations went into effect that include a higher threshold for establishing misrepresentation, provides for a statute of limitation for claims submission, narrows the current triggers allowed for letter of credit requirements, and eliminates provisions for group discharges. The new regulations are effective with claims on loans disbursed on or after July 1, 2020. Management is unable to predict how regulations will be revised, the result of any other current or future rulemakings, or the impact of such rulemakings on our business. The outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 20 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) could serve as the basis for claims by students or ED under the Defense to Repayment regulations, the posting of substantial letters of credit, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Regardless of the merits of our actions, while we intend to defend ourselves vigorously in all pending and future legal proceedings, we may settle certain matters for strategic reasons, as a part of a resolution of other matters, or in order to avoid potentially worse consequences arising from inherently uncertain judicial or administrative processes. Moreover, regardless of the merits of our defenses, if we are unable to resolve certain legal proceedings or regulatory actions, indirect consequences arising from unproven allegations or appealable regulatory findings may have adverse consequences to us. Despite the merits of our actions and defense, we may settle certain matters for strategic reasons, as a part of a resolution of other matters, or in order to avoid potentially worse consequences in inherently uncertain judicial or administrative processes. The terms of any such settlement could have a material adverse effect on our business, financial condition, operations, and cash flows, and result in the imposition of significant restrictions on us and our ability to operate. Additionally, although inconsistent with its usual practices, ED has broad discretion to impose significant limitations on us and our business operations arising from acts it determines are in violation of their regulations. As a result, foreseeable and unforeseeable consequences of prior and prospective adjudicated or settled legal proceedings and regulatory matters could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Within the Defense to Repayment regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities. The Defense to Repayment regulations could require Adtalem to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated. The aggregate amount of these letters of credit or other required security could materially and adversely limit our borrowing capacity under our credit agreement and our ability to make capital expenditures and other investments aimed at growing and diversifying our operations, sustain and fund our operations, and make dividend payments to shareholders. Adtalem’s credit agreement allows Adtalem to post up to $100 million in letters of credit. In the event Adtalem is required to post letters of credit in excess of the $100 million limit, Adtalem would be required to seek an amendment to its credit 27 2021 Form 10-Kagreement or seek an alternative means of providing security required by ED. Adtalem may not be able to obtain the excess letters of credit or security or may only be able to obtain such excess letters of credit or security at significant cost. This $100 million limit increased to $400 million under the New Credit Agreement (as defined in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”), which became effective and replaced the previous credit agreement on August 12, 2021. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the New Credit Agreement. We are subject to risks relating to regulatory matters. If we fail to comply with the extensive regulatory requirements for our operations, we could face fines and penalties, including loss of access to federal and state student financial aid for our students as well as significant civil liability. As a provider of higher education, we are subject to extensive regulation. These regulatory requirements cover virtually all phases and aspects of our U.S. postsecondary operations, including educational program offerings, facilities, civil rights, safety, public health, privacy, instructional and administrative staff, administrative procedures, marketing and recruiting, financial operations, payment of refunds to students who withdraw, acquisitions or openings of new schools or programs, addition of new educational programs, and changes in our corporate structure and ownership. In particular, in the U.S., the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes Chamberlain, AUC, RUSM, and RUSVM, to significant regulatory scrutiny. Adtalem’s Title IV Institutions collectively receive 71% of their revenue from Title IV programs. As a result, the suspension, limitation, or termination of the eligibility of any of our institutions to participate in Title IV programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. To participate in Title IV programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting commission recognized by ED, and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a PPA. Our institutions that participate in Title IV programs each do so pursuant to a PPA that, among other things, includes commitments to abide by all applicable laws and regulations, such as Incentive Compensation and Substantial Misrepresentation. Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years. Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments. Our Title IV Institutions collectively receive 71% of their revenue from Title IV programs. As a result, any reductions in funds available to our students or any delays in payments to us under Title IV programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Action by the U.S. Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Adtalem’s student enrollment and/or increase its costs of operation. Political and budgetary concerns significantly affect Title IV programs. The U.S. Congress enacted the HEA to be reauthorized on a periodic basis, which most recently occurred in August 2008. The 2008 reauthorization of the HEA made significant changes to the requirements governing Title IV programs, including changes that, among other things:  Regulated non-federal, private education loans;  Regulated the relationship between institutions and lenders that make education loans;  Revised the calculation of the student default rate attributed to an institution and the threshold rate at which sanctions will be imposed against an institution (as discussed above); 28 Adtalem Global Education Inc. Adjusted the types of revenue that an institution is deemed to have derived from Title IV programs and the sanctions imposed on an institution that derives too much revenue from Title IV programs;  Increased the types and amount of information that an institution must disclose to current and prospective students and the public; and  Increased the types of policies and practices that an institution must adopt and follow. Congress passed the Rescue Act, which was signed into law on March 11, 2021. It includes language permanently modifying the 90/10 Rule. This modification expands the rule to include additional federal aid programs, including GI Bill benefits, in the 90% calculation. The provision was modified in the Senate by a bipartisan amendment offered by Senators Morgan (R-KS) and Carper (D-DE). The Moran-Carper amendment requires ED to begin a negotiated rulemaking process by October 1, 2021. The amendment further clarifies that the penalties associated with the modified 90/10 Rule will not go into effect until at least 2023 and possibly 2024, giving ED time to complete the rulemaking process and schools time to comply with the new requirements. There is no direct impact to Adtalem or its institutions. In the 117th Congress, a comprehensive HEA reauthorization bill has not been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress. Some of these bills could be included in a larger legislative package, which could include the HEA. When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions. The U.S. Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations. At this time, Adtalem cannot predict any or all of the changes that the U.S. Congress may ultimately make. Since a significant percentage of Adtalem’s revenue is tied to Title IV programs, any action by the U.S. Congress that significantly reduces Title IV program funding or the ability of Adtalem’s degree-granting institutions or students to participate in Title IV programs could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Certain provisions in proposed legislation, if enacted, or implementation of existing or future law by a current or future administration, could have a material adverse effect on our business, including but not limited to legislation that limits the enrollment of U.S. citizens in foreign medical schools and legislation that could require institutions to share in the risk of defaulted federal student loans. Additionally, a shutdown of government agencies, such as ED, responsible for administering student financial aid programs under Title IV could lead to delays in student eligibility determinations and delays in origination and disbursement of government-funded student loans to our students. Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control. Our ability to comply with several ED regulations is not entirely within our control. In particular, our ability to participate in federal Title IV programs is dependent on the ability of our past students to avoid default on student loans, obtain employment, and pay for a portion of their education with private funds. These factors are heavily influenced by broader economic drivers, including the personal or family wealth of our students, the overall employment outlook for their area of study, and the availability of private financing sources. An economic downturn, or a worsening economic outlook resulting from COVID-19, among other things, could impact these factors, which could have a material adverse effect on our business, financial condition, results of operation, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. ED rules prohibiting “substantial misrepresentation” are very broad. As a result, we face increased exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs. ED regulations in effect for federal Stafford loans first disbursed between July 1, 2017 and July 1, 2020 prohibit any “substantial misrepresentation” by our Title IV Institutions, employees, and agents regarding the nature of the institution’s educational programs, its financial charges, or the employability of its graduates. These regulations may, among other things, subject us to sanctions for statements containing errors made to non-students, including any member of the public, 29 2021 Form 10-Kimpose liability on us for the conduct of others and expose us to liability even when no actual harm occurs. A “substantial misrepresentation” is any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person’s detriment. It is possible that despite our efforts to prevent misrepresentations, our employees or service providers may make statements that could be construed as substantial misrepresentations. As a result, we may face complaints from students and prospective students over statements made by us and our agents in advertising and marketing, during the enrollment, admissions and financial aid process, and throughout attendance at any of our Title IV Institutions, which would expose us to increased risk of enforcement action and applicable sanctions or other penalties, including potential Defense to Repayment liabilities, and increased risk of private qui tam actions under the Federal False Claims Act. If ED determines that an institution has engaged in substantial misrepresentation, ED may (1) fine the institution; (2) discharge students’ debt and hold the institution liable for the discharged debt under the HEA and the Defense to Repayment regulations; and/or (3) suspend or terminate an institution’s participation in Title IV programs. Alternatively, ED may impose certain other limitations on the institution’s participation in Title IV programs, which could include the denial of applications for approval of new programs or locations, a requirement to post a substantial letter of credit, or the imposition of one of ED’s heightened cash monitoring processes. Any of the forgoing actions could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Regulations governing the eligibility of our U.S. degree-granting institutions to participate in Title IV programs preclude us from compensating any employee or third-party involved in student recruitment, admissions, or the awarding of financial aid based on their success in those areas. These regulations could limit our ability to attract and retain highly-qualified employees, to sustain and grow our business, or to develop or acquire businesses that would not otherwise be subject to such regulations. An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid. We endeavor to ensure our compliance with these regulations and have numerous controls and procedures in place to do so, but cannot be sure that our regulators will not determine that the compensation that we have paid our employees do not violate these regulations. Our limited ability to compensate our employees based on their performance of their job responsibilities could make it more difficult to attract and retain highly-qualified employees. These regulations may also impair our ability to sustain and grow our business, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs. All of our Title IV Institutions are subject to meeting financial and administrative standards. These standards are assessed through annual compliance audits, periodic renewal of institutional PPAs, periodic program reviews, and ad hoc events which may lead ED to evaluate an institution’s financial responsibility or administrative capability. The administrative capability criteria require, among other things, that our institutions (1) have an adequate number of qualified personnel to administer Title IV programs, (2) have adequate procedures for disbursing and safeguarding Title IV funds and for maintaining records, (3) submit all required reports and consolidated financial statements in a timely manner, and (4) not have significant problems that affect the institution’s ability to administer Title IV programs. If ED determines, in its judgment, that one of our Title IV Institutions has failed to demonstrate either financial responsibility or administrative capability, we could be subject to additional conditions to participating, including, among other things, a requirement to post a letter of credit, suspension or termination of our eligibility to participate in Title IV programs, or repayment of funds received under Title IV programs, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. ED has considerable discretion under the regulations to impose the foregoing sanctions and, in some cases, such sanctions could be imposed without advance notice or any prior right of review or appeal. Although no definite calculations have been performed, as a result of the acquisition of Walden and the related transactions, Adtalem expects its consolidated composite score to fall below 1.5 at its next financial responsibility test. If Adtalem becomes unable to meet requisite financial responsibility standards within the regulations, management believes it will be able to otherwise demonstrate its ability to continue to provide educational services; however, our institutions could still be subject to heightened cash 30 Adtalem Global Education Inc.monitoring or be required to post a letter of credit to continue to participate in federal and state financial assistance programs. If ED does not recertify any one of our institutions to continue participating in Title IV programs, students at that institution would lose their access to Title IV program funds. Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs. ED certification to participate in Title IV programs lasts a maximum of six years, and institutions are thus required to seek recertification from ED on a regular basis in order to continue their participation in Title IV programs. An institution must also apply for recertification by ED if it undergoes a change in control, as defined by ED regulations. Each of our Title IV Institutions operates under a PPA. There can be no assurance that ED will recertify an institution after its PPA expires or that ED will not limit the period of recertification to participate in Title IV programs to less than six years, place the institution on provisional certification, or impose conditions or other restrictions on the institution as a condition of granting our application for recertification. If ED does not renew or withdraws the certification to participate in Title IV programs for one or more of our institutions at any time, students at such institution would no longer be able to receive Title IV program funds. Alternatively, ED could (1) renew the certifications for an institution, but restrict or delay receipt of Title IV funds, limit the number of students to whom an institution could disburse such funds, or place other restrictions on that institution, or (2) delay recertification after an institution’s PPA expires, in which case the institution’s certification would continue on a month-to-month basis, any of which could have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of the institution or Adtalem as a whole and could result in the imposition of significant restrictions on the ability of the institution or Adtalem as a whole to operate. During the fourth quarter of fiscal year 2020 and the first quarter of fiscal year 2021, ED provisionally recertified AUC, RUSM, and RUSVM’s Title IV PPAs with expiration dates of December 31, 2022, March 31, 2023, and June 30, 2023, respectively. The provisional nature of the agreements stemmed from increased and/or repeated Title IV compliance audit findings. No financial ramifications, such as a letter of credit, heightened cash monitoring, or student enrollment limitations, were imposed on any of these institutions. While corrective actions have been taken to resolve past compliance matters and eliminate the incidence of repetition, if AUC, RUSM, or RUSVM fail to maintain administrative capability as defined by ED while under provisional status or otherwise fail to comply with ED requirements, the institution(s) could lose eligibility to participate in Title IV programs or have that eligibility adversely conditioned, which could have a material adverse effect on the businesses, financial condition, results of operations, and cash flows. If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs. The loss of institutional accreditation by any of our Title IV Institutions would leave the affected institution ineligible to participate in Title IV programs and would have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. In addition, an adverse action by any of our institutional accreditors other than loss of accreditation, such as issuance of a warning, could have a material adverse effect on our business. Increased scrutiny of accreditors by the Secretary of Education in connection with ED’s recognition process may result in increased scrutiny of institutions by accreditors or have other consequences. If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditations and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business. Any material change of ownership or change of control of Adtalem, depending on the type of change, may have significant regulatory consequences for each of our Title IV Institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors and/or reauthorization by each institutions’ state licensing agencies. If Adtalem experiences a material change of ownership or change of control, then our Title IV Institutions may cease to be eligible to participate in Title IV programs until recertified by ED. The 31 2021 Form 10-Kcontinuing participation of each of our Title IV Institutions in Title IV programs is critical to our business. Any disruption in an institution’s eligibility to participate in Title IV programs would materially and adversely impact our business, financial condition, results of operations, and cash flow. In addition, each Title IV Institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, which evaluation may include a comprehensive review. If our accreditors determine that the change is such that prior approval was required, but was not obtained, many of our accreditors’ policies require the accreditor to consider withdrawal of accreditation. If certain accreditation is suspended or withdrawn with respect to any of our Title IV Institutions, they would not be eligible to participate in Title IV programs until the accreditation is reinstated or is obtained from another appropriate accrediting body. There is no assurance that reinstatement of accreditation could be obtained on a timely basis, if at all, and accreditation from a different qualified accrediting authority, if available, would require a significant amount of time. Any material disruption in accreditation would materially and adversely impact our business, financial condition, results of operations, and cash flow. In addition, some states in which our Title IV Institutions are licensed require approval (in some cases, advance approval) of changes in ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change in ownership or control. As of June 30, 2021, a substantial portion of our outstanding capital stock is owned by a small group of institutional shareholders. We cannot prevent a material change of ownership or change of control that could arise from a transfer of voting stock by any combination of those shareholders. A bankruptcy filing by us or by any of our Title IV Institutions, or a closure of one of our Title IV Institutions, would lead to an immediate loss of eligibility to participate in Title IV programs. In the event of a bankruptcy filing by Adtalem, all of our Title IV Institutions would lose their eligibility to participate in Title IV programs, pursuant to statutory provisions of the HEA, notwithstanding the automatic stay provisions of federal bankruptcy law, which would make any reorganization difficult to implement. Similarly, in the event of a bankruptcy filing by any of Adtalem’s subsidiaries that own a Title IV Institution, such institution would lose its eligibility to participate in Title IV programs. In the event of any bankruptcy affecting one or more of our Title IV Institutions, ED could hold our other Title IV Institutions jointly liable for any Title IV program liabilities, whether asserted or unasserted at the time of such bankruptcy, of the institution whose Title IV program eligibility was terminated. Further, in the event that an institution closes and fails to pay liabilities or other amounts owed to ED, ED can attribute the liabilities of that institution to other institutions under common ownership. If any one of our Title IV Institutions were to close or have unpaid ED liabilities, ED could seek to have those liabilities repaid by one of our other Title IV Institutions. Student loan defaults could result in the loss of eligibility to participate in Title IV programs. Our Title IV Institutions may lose their eligibility to participate in Title IV programs if their student loan default rates are greater than standards set by ED. An educational institution may lose its eligibility to participate in some or all Title IV programs, if, for three consecutive federal fiscal years, 30% or more of its students who were required to begin repaying their student loans in the relevant federal fiscal year default on their payment by the end of the next two federal fiscal years. In addition, an institution may lose its eligibility to participate in some or all Title IV programs if its default rate for a federal fiscal year was greater than 40%. If any of our Title IV Institutions lose eligibility to participate in Title IV programs because of high student loan default rates, it would have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. The latest period for which final three-year default rates data is available is fiscal year 2017. Default rates for Chamberlain, AUC, RUSM, and RUSVM students for fiscal year 2017 is 3.4%, 1.4%, 1.3%, and 0.9%, respectively. 32 Adtalem Global Education Inc.Our Title IV Institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenue derived from those programs were too high. Our Title IV Institutions may lose eligibility to participate in Title IV programs if, on a cash basis, the percentage of the institution’s revenue derived from Title IV programs for two consecutive fiscal years is greater than 90% (the “90/10 Rule”). Further, if an institution exceeds the 90% threshold for any single fiscal year, ED could place that institution on provisional certification status for the institution’s following two fiscal years. If any of our Title IV Institutions lose eligibility to participate in Title IV programs because they are unable to comply with ED’s 90/10 Rule, it could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Our failure to comply with ED’s credit hour rule could result in sanctions and other liability. In 2009 and 2010, ED’s Office of Inspector General criticized three accreditors, including the Higher Learning Commission (“HLC”), which is the accreditor for Chamberlain, for deficiency in their oversight of institutions’ credit hour allocations. In June 2010, the House Education and Labor Committee held a hearing concerning accrediting agencies’ standards for assessing institutions’ credit hour policies. The 2010 Program Integrity Regulations defined the term “credit hour” for the first time and required accrediting agencies to review the reliability and accuracy of an institution’s credit hour assignments. If an accreditor does not comply with this requirement, its recognition by ED could be jeopardized. If an accreditor identifies systematic or significant noncompliance in one or more of an institution’s programs, the accreditor must notify the Secretary of Education. If ED determines that an institution is out of compliance with the credit hour definition, ED could impose liabilities or other sanctions, which could have a material adverse effect on our business, financial conditions, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state. Our Title IV Institutions must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution is located. Campuses of our Title IV Institutions are authorized to operate and grant degrees, diplomas, or certificates by the applicable education agency of the state in which each such campus is located. Many states are currently reevaluating and revising their authorization regulations, especially as applied to distance education. The loss of state authorization would, among other things, render the affected institution ineligible to participate in Title IV programs, at least at those state campus locations, and otherwise limit that school’s ability to operate in that state. Loss of authorization in one or more states could increase the likelihood of additional scrutiny and potential loss of operating and/or degree-granting authority in other states in which we operate, which would further impact our business. If these pressures and uncertainty continue in the future, or if one or more of our institutions are unable to offer programs in one or more states, it could have a material adverse impact on our enrollment, revenue, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Our ability to place our medical schools’ students in hospitals in the U.S. may be limited by efforts of certain state government regulatory bodies, which may limit the growth potential of our medical schools, put our medical schools at a competitive disadvantage to other medical schools, or force our medical schools to substantially reduce their class sizes. AUC and RUSM enter into affiliation agreements with hospitals across the U.S. to place their third and fourth year students in clinical programs at such hospitals. Certain states with regulatory programs that require state approval of clinical education programs have in recent years precluded, limited, or imposed onerous requirements on Adtalem’s entry into affiliation agreements with hospitals in their states. If these or other states continue to limit access to affiliation arrangements, our medical schools may be at a competitive disadvantage to other medical schools, and our medical schools may be required to substantially restrict their enrollment due to limited clinical opportunities for enrolled students. The impact on enrollment, and the potential for enrollment growth, of such restrictions on our medical schools’ clinical placements could have a material adverse effect on our business, financial conditions, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. 33 2021 Form 10-KBudget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage. Some states are experiencing budget deficits and constraints. Some of these states have reduced or eliminated various student financial assistance programs or established minimum performance measures as a condition of participation, and additional states may do so in the future. If our students who receive this type of assistance cannot secure alternate sources of funding, they may be forced to withdraw, reduce the rate at which they seek to complete their education, or replace the source with more expensive forms of funding, such as private loans. Other students who would otherwise have been eligible for state financial assistance may not be able to enroll without such aid. This reduced funding could decrease our enrollment and adversely affect our business, financial condition, results of operations, and cash flows. In addition, the reduction or elimination of these non-Title IV sources of student funding may adversely affect our 90/10 Rule percentage. We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program. The HEA and ED regulations require us to calculate refunds of unearned Title IV program funds disbursed to students who withdraw from their educational program. If refunds are not properly calculated or timely paid, we may be required to post a letter of credit with ED or be subject to sanctions or other adverse actions by ED, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. A failure of our vendors to comply with applicable regulations in the servicing of our students and institutions could subject us to fines or restrictions on or loss of our ability to participate in Title IV programs. We contract with unaffiliated entities for student software systems and services related to the administration of portions of our Title IV and financing programs. Because each of our institutions may be jointly and severally liable for the actions of third-party servicers and vendors, failure of such servicers to comply with applicable regulations could have a material adverse effect on our institutions, including fines and the loss of eligibility to participate in Title IV programs, which could have a material adverse effect on our enrollment, revenue, and results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. If any of our third-party servicers discontinues providing such services to us, we may not be able to replace such third-party servicer in a timely, cost-efficient, or effective manner, or at all, and we could lose our ability to comply with collection, lending, and Title IV requirements, which could have a material adverse effect our enrollment, revenue, and results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. We provide financing programs to assist some of our students in affording our educational offerings. These programs are subject to various federal and state rules and regulations. Failure to comply with these regulations could subject us to fines, penalties, obligations to discharge loans, and other injunctive requirements. If we, or one of the companies that service our credit programs, do not comply with laws applicable to the financing programs that assist our students in affording our educational offerings, including Truth in Lending and Fair Debt Collections Practices laws and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act, we could be subject to fines, penalties, obligations to discharge the debts, and other injunctive requirements, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain or renew licenses, approvals or accreditation and maintain eligibility to participate in Title IV programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. 34 Adtalem Global Education Inc.Release of confidential information could subject us to civil penalties or cause us to lose our eligibility to participate in Title IV programs. As an educational institution participating in federal and state student assistance programs and collecting financial receipts from enrollees or their sponsors, we collect and retain certain confidential information. Such information is subject to federal and state privacy and security rules, including the Family Education Right to Privacy Act, the Health Insurance Portability and Accountability Act, and the Fair and Accurate Credit Transactions Act. Release or failure to secure confidential information or other noncompliance with these rules could subject us to fines, loss of our capacity to conduct electronic commerce, and loss of eligibility to participate in Title IV programs, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. We could be subject to sanctions if we fail to accurately and timely report sponsored students’ tuition, fees, and enrollment to the sponsoring agency. A significant portion of our enrollment is sponsored through various federal and state supported agencies and programs, including the U.S. Department of Defense, the U.S. Department of Labor, and the U.S. Department of Veterans Affairs. We are required to periodically report tuition, fees, and enrollment to the sponsoring agencies. As a recipient of funds, we are subject to periodic reviews and audits. Inaccurate or untimely reporting could result in suspension or termination of our eligibility to participate in these federal and state programs and have a material adverse impact on enrollment and revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our enrollment may be adversely affected by presentations of data that are not representative of actual educational costs for our prospective students. ED and other public policy organizations are concerned with the affordability of higher education and have developed various tools and resources to help students find low-cost educational alternatives. These resources primarily rely on and present data for first-time, full-time residential students, which is not representative of most of our prospective students. These presentations may influence some prospective students to exclude our institutions from their consideration, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Risks Related to Adtalem’s Business Outbreaks of communicable infections or diseases, or other public health pandemics, such as the current global coronavirus outbreak and the efficacy and distribution of COVID-19 vaccines, in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business. Disease outbreaks and other public health conditions, such as the current outbreak of the coronavirus currently being experienced and the efficacy and distribution of COVID-19 vaccines, in the locations in which we, our students, faculty, and employees live, work, and attend classes could have a significant negative impact on our revenue, profitability, and business. We have developed and continue to develop plans to help mitigate the negative impact of the coronavirus to our business including all classes having shifted to online learning, all employees working from home, practice containment, recovery and normalization scenario planning, and emergency succession planning. Students at AUC returned to campus in St. Maarten for the January 2021 semester. A limited number of RUSM students began returning to Barbados for the January and May 2021 semesters with a full return expected for the September 2021 semester. As of the May 2021 semester, all RUSVM basic science students have resumed classroom-based learning in St. Kitts. The coronavirus outbreak and the efficacy and distribution of COVID-19 vaccines continues to be fluid and uncertain, making it difficult to forecast the final impact it could have on our future operations. If our business experiences prolonged occurrences of adverse public health conditions, such as the coronavirus, and the attendant stay-at-home orders or reinstatement of stay-at-home orders, we believe it could have a material adverse effect on our business, financial condition, results of operations, and cash flows. We will continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students and employees. COVID-19 resulted in estimated revenue losses of approximately $29 million, operating income losses of approximately $19 million and loss of earnings per share of approximately $0.28 in fiscal year 2020. In addition, Adtalem implemented a workforce reduction of 32 positions in the fourth quarter of fiscal year 2020 to become more cost effective in response to COVID-19. The resulting severance charge in the fourth quarter of fiscal year 2020 was 35 2021 Form 10-Knot significant. COVID-19 resulted in estimated revenue losses of approximately $47 million, operating income losses of approximately $33 million and loss of earnings per share of approximately $0.50 in fiscal year 2021. Management anticipates further negative COVID-19 effects to consolidated revenue, net income, and earnings per share into fiscal year 2022 for as long as social distancing and other measures established to combat the virus continue. If our business results and financial condition were materially and adversely impacted, then assets such as accounts receivable, property and equipment, operating lease assets, intangible assets and goodwill could be impaired, requiring a possible write-off. As of June 30, 2021, intangible assets from business combinations totaled $276.2 million and goodwill totaled $686.4 million. Natural disasters or other extraordinary events or political disruptions may cause us to close some of our schools. We may experience business interruptions resulting from natural disasters, inclement weather, transit disruptions, political disruptions, or other events in one or more of the geographic areas in which we operate, particularly in the West Coast and Gulf States of the U.S., and the Caribbean. These events could cause us to close schools, temporarily or permanently, and could affect student recruiting opportunities in those locations, causing enrollment and revenue to decline, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively. Our future revenue and growth depend on a number of factors, including many of the regulatory risks discussed above and business risks discussed below. Despite ongoing efforts to provide more scholarships to prospective students, and to increase quality and build our reputation, negative perceptions of the value of a college degree, increased reluctance to take on debt, and the resulting lower student consumer confidence may continue to impact enrollment in the future. In addition, technological innovations in the delivery of low-cost education alternatives and increased competition could negatively affect enrollment. We are subject to risks relating to enrollment of students. If we are not able to continue to successfully recruit and retain our students, our revenue may decline. Our undergraduate and graduate educational programs are concentrated in selected areas of medical and healthcare. If applicant career interests or employer needs shift away from these fields, and we do not anticipate or adequately respond to that trend, future enrollment and revenue may decline and the rates at which our graduates obtain jobs involving their fields of study could decline. If our graduates are unable to find appropriate employment opportunities or obtain professional licensure or certification, we may not be able to recruit new students. If employment opportunities for our graduates in fields related to their educational programs decline or they are unable to obtain professional licenses or certifications in their chosen fields, future enrollment and revenue may decline as potential applicants choose to enroll at other educational institutions or providers. We face heightened competition in the postsecondary education market from both public and private educational institutions. Postsecondary education in our existing and new market areas is highly competitive and is becoming increasingly so. We compete with traditional public and private two-year and four-year colleges, other proprietary schools, and alternatives to higher education. Some of our competitors, both public and private, have greater financial and nonfinancial resources than us. Some of our competitors, both public and private, are able to offer programs similar to ours at a lower tuition level for a variety of reasons, including the availability of direct and indirect government subsidies, government and foundation grants, large endowments, tax-deductible contributions, and other financial resources not available to proprietary institutions, or by providing fewer student services or larger class sizes. An increasing number of traditional colleges and community colleges are offering distance learning and other online education programs, including programs that are geared towards the needs of working adults. This trend has been accelerated by private companies that provide and/or manage online learning platforms for traditional colleges and community colleges. As the proportion of traditional colleges providing alternative learning modalities increases, we will face increasing competition for students from traditional 36 Adtalem Global Education Inc.colleges, including colleges with well-established reputations for excellence. As the online and distance learning segment of the postsecondary education market matures, we believe that the intensity of the competition we face will continue to increase. This intense competition could make it more challenging for us to enroll students who are likely to succeed in our educational programs, which could adversely affect our new student enrollment levels and student persistence and put downward pressure on our tuition rates, any of which could materially and adversely affect our business, financial condition, results of operations, and cash flows. The personal information that we collect may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations. Possession and use of personal information in our operations subjects us to risks and costs that could harm our business. We collect, use, and retain large amounts of personal information regarding our students and their families, including social security numbers, tax return information, personal and family financial data, and credit card numbers. We also collect and maintain personal information of our employees and contractors in the ordinary course of our business. Some of this personal information is held and managed by certain of our vendors. Confidential information also may become available to third parties inadvertently when we integrate or convert computer networks into our network following an acquisition or in connection with system upgrades from time to time. Due to the sensitive nature of the information contained on our networks, such as students’ financial information and grades, our networks may be targeted by hackers. For example, in December 2020 it was widely reported that SolarWinds, an information technology company, was the subject of a cyberattack that created security vulnerabilities for thousands of its clients. We identified a single server in our environment with SolarWinds software installed. It is important to note that this single server was used only for IP address management and was not configured in a manner that could allow for system compromise. Out of an abundance of caution, we promptly took steps to deactivate the server after applying all vendor recommended patches and hotfixes. We also scanned the environment to validate that there were no indicators of compromise related to the software. While we believe there were no compromises to our operations as a result of this attack, other similar attacks could have a significant negative impact on our systems and operations. Anyone who circumvents security measures could misappropriate proprietary or confidential information or cause interruptions or malfunctions in our operations. Although we use security and business controls to limit access and use of personal information, a third-party may be able to circumvent those security and business controls, which could result in a breach of privacy. In addition, errors in the storage, use, or transmission of personal information could result in a breach of privacy. Possession and use of personal information in our operations also subjects us to legislative and regulatory burdens that could require notification of data breaches and restrict our use of personal information. We cannot assure that a breach, loss, or theft of personal information will not occur. A breach, theft, or loss of personal information regarding our students and their families, customers, employees, or contractors that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in liability under state and federal privacy statutes and legal actions by federal or state authorities and private litigants, any of which could have a material adverse effect on our business and result in the imposition of significant restrictions on us and our ability to operate. System disruptions and vulnerability from security risks to our computer network or information systems could severely impact our ability to serve our existing students and attract new students. The performance and reliability of our computer networks and system applications, especially online educational platforms and student operational and financial aid packaging applications, are critical to our reputation and ability to attract and retain students. System errors, disruptions or failures, including those arising from unauthorized access, computer hackers, computer viruses, denial of service attacks, and other security threats, could adversely impact our delivery of educational content to our students or result in delays and/or errors in processing student financial aid and related disbursements. Such events could have a material adverse effect on the reputation of our institutions, our financial condition, results of operations, and cash flows. We may be required to expend significant resources to protect against system errors, failures or disruptions, or the threat of security breaches, or to repair or otherwise mitigate problems caused by any actual errors, disruptions, failures, or breaches. We cannot ensure that these efforts will protect our computer networks, or fully mitigate the resulting impact of interruptions or malfunctions in our operations, despite our regular monitoring of our technology infrastructure security and business continuity plans. 37 2021 Form 10-KGovernment regulations relating to the internet could increase our cost of doing business and affect our ability to grow. The use of the internet and other online services has led to and may lead to the adoption of new laws and regulations in the U.S. or foreign countries and to new interpretations of existing laws and regulations. These new laws, regulations, and interpretations may relate to issues such as online privacy, copyrights, trademarks and service marks, sales taxes, value- added taxes, withholding taxes, cost of internet access, and services, allocation, and apportionment of income amongst various state, local, and foreign jurisdictions, fair business practices, and the requirement that online education institutions qualify to do business as foreign corporations or be licensed in one or more jurisdictions where they have no physical location or other presence. New laws, regulations, or interpretations related to doing business over the internet could increase our costs and materially and adversely affect our enrollment, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Our ability to open new campuses, offer new programs, and add capacity is dependent on regulatory approvals and requires financial and human resources. As part of our strategy, we intend to open new campuses, offer new educational programs, and add capacity to certain existing locations. Such actions require us to obtain appropriate federal, state, and accrediting agency approvals. In addition, adding new locations, programs, and capacity may require significant financial investments and human resource capabilities. The failure to obtain appropriate approvals or to properly allocate financial and human resources could adversely impact our future growth. We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans. We may be unable to attract, retain, and develop key employees with appropriate educational qualifications and experience. Regulatory and other legal actions and the claims contained in these actions may have diminished our reputation, and these actions and the resulting negative publicity may have decreased interest by potential employees. In addition, we may be unable to effectively plan and prepare for changes in key employees. Such matters may cause us to incur higher wage expense and/or provide less student support and customer service, which could adversely affect enrollment, revenue, and expense. A significant amount of our compensation for key employees is tied to our financial performance. We may require new employees in order to execute some of our strategic plans. Uncertainty regarding our future financial performance may limit our ability to attract new employees with competitive compensation or increase our cost of recruiting and retaining such new employees. We may not be able to successfully identify, pursue, or integrate acquisitions. As part of our strategy, we are actively considering acquisition opportunities primarily in the U.S. We have acquired and expect to acquire additional education institutions or education related businesses that complement our strategic direction, some of which could be material to our operations. Any acquisition involves significant risks and uncertainties, including, but not limited to:  Inability to successfully integrate the acquired operations and personnel into our business and maintain uniform standards, controls, policies, and procedures;  Failure to secure applicable regulatory approvals;  Assumption of known and unknown liabilities;  Diversion of significant attention of our senior management from day-to-day operations;  Issues not discovered in our due diligence process, including compliance issues, commitments, and/or contingencies; and  Financial commitments, investments in foreign countries, and compliance with debt covenants and ED financial responsibility scores. Expansion into new international markets will subject us to risks inherent in international operations. As part of our strategy, we may continue to expand internationally. To the extent that we expand internationally, we will face risks that are inherent in international operations including, but not limited to: 38 Adtalem Global Education Inc. Compliance with foreign laws and regulations;  Management of internal operations;  Foreign currency exchange rate fluctuations;  Ability to protect intellectual property;  Monetary policy risks, such as inflation, hyperinflation, and deflation;  Price controls or restrictions on exchange of foreign currencies;  Political and economic instability in the countries in which we operate;  Potential unionization of employees under local labor laws;  Multiple and possibly overlapping and conflicting tax laws;  Inability to cost effectively repatriate cash balances; and  Compliance with U.S. laws and regulations such as the Foreign Corrupt Practices Act. Proposed changes in, or lapses of, U.S. tax laws regarding earnings from international operations could adversely affect our financial results. Our effective tax rate could be subject to volatility or be adversely impacted by changes to federal tax laws governing the taxation of foreign earnings of U.S. based companies. For example, recent changes to U.S. tax laws significantly impacted how U.S. multinational corporations are taxed on foreign earnings. Numerous countries are evaluating their existing tax laws, due in part to recommendations made by the Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) project, including the imposition of a global minimum tax. In addition, the recent U.S. tax law changes, including the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), are subject to further interpretations from U.S. federal and state governments and regulatory organizations, such as the Treasury Department and/or Internal Revenue Service, and this could change the provisional tax liability or the accounting treatment of the provisional tax liability based on updated guidance and interpretations. A significant portion of the additional provisions for income taxes we have made due to the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) is payable by us over a period of up to eight years. As a result, our cash flows from operating activities will be adversely impacted until the additional tax provisions are paid in full. In addition, Adtalem has benefitted from the ability to enter into international intercompany arrangements without incurring U.S. taxation due to a law, which expires in fiscal year 2026, deferring U.S. taxation of “foreign personal holding company income” such as foreign income from dividends, interest, rents, and royalties. If this law is not extended, or a similar law adopted, our consolidated tax provision would be impacted beginning in our fiscal year 2027, and we may not be able to allocate international capital optimally without realizing U.S. income taxes, which would increase our effective income tax rate and adversely impact our earnings and cash flows. Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results. Our future effective tax rates could be subject to volatility or adversely affected by: earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated earnings in countries where we have higher statutory rates; changes in the valuation of our deferred tax assets and liabilities; expiration of or lapses in various tax law provisions; tax treatment of stock-based compensation; costs related to intercompany or other restructurings; or other changes in tax rates, laws, regulations, accounting principles, or interpretations thereof. In addition, we are subject to examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. Although we have accrued tax and related interest for potential adjustments to tax liabilities for prior years, there can be no assurance that the outcomes from these continuous examinations will not have a material effect, either positive or negative, on our business, financial condition, and results of operations. Our goodwill and intangible assets potentially could be impaired if our business results and financial condition were materially and adversely impacted by risks and uncertainties. Adtalem’s market capitalization can be affected by, among other things, changes in industry or market conditions, changes in results of operations, and changes in forecasts or market expectations related to future results. If our market capitalization were to remain below its carrying value for a sustained period of time or if such a decline becomes indicative 39 2021 Form 10-Kthat the fair values of our reporting units have declined below their carrying values, an impairment test may result in a non-cash impairment charge. As of June 30, 2021, intangible assets from business combinations totaled $276.2 million and goodwill totaled $686.4 million. Together, these assets equaled 32% of total assets as of such date. If our business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring a possible write-off of up to $276.2 million of intangible assets and up to $686.4 million of goodwill. Risks Related to Acquisition The Acquisition will involve substantial costs. We have incurred, and expect to continue to incur, a number of non-recurring costs associated with the Acquisition. The majority of the non-recurring expenses will consist of transaction and regulatory costs related to the Acquisition. We will also incur transaction fees and costs related to formulating and implementing integration plans, including system consolidation costs and employment-related costs. We continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred from the Acquisition and integration. Although we anticipate that the elimination of duplicative costs and the realization of other efficiencies and synergies related to the integration should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all. In connection with the Acquisition, we will incur additional indebtedness, which could adversely affect Adtalem, including our business flexibility and will increase our interest expense. We will have increased indebtedness following completion of the Acquisition in comparison to our recent historical basis, which could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing our interest expense. We will also incur various costs and expenses related to the financing of the Acquisition. The amount of cash required to pay interest on our increased indebtedness following completion of the Acquisition and thereby the demands on our cash resources will be greater than the amount of cash flow required to service our indebtedness prior to the Acquisition. The increased levels of indebtedness following completion of the Acquisition could also reduce funds available for working capital, capital expenditures, and other general corporate purposes, and may create competitive disadvantages for us relative to other companies with lower debt levels. If we do not achieve the expected synergies and cost savings from the Acquisition, or if our financial performance after the Acquisition does not meet our current expectations, then our ability to service the indebtedness may be adversely impacted. Despite current indebtedness levels, we may still be able to incur substantially more debt, including secured debt, which could further exacerbate the risks we face. After giving effect to (a) the consummation of the Acquisition, (b) the issuance of the 5.50% Senior Secured Notes due 2028 (the “Notes”), (c) the delivery of collateral to any escrow accounts and entry into commitment letters by Adtalem in connection therewith, (d) entry into and incurrence of borrowings under the New Credit Facility (as defined below) and the application of the net proceeds thereof, (e) the amendment of, repayment of and termination of Adtalem’s Credit Agreement (as defined below), (f) the merger of the Escrow Issuer (as defined below) with and into Adtalem, with Adtalem as the surviving entity, and (g) all other transactions related or incidental to, or in connection with, any of the foregoing (including, without limitation, the payment of fees and expenses in connection with each of the foregoing), we are a highly leveraged company. We and our subsidiaries may be able to incur substantial additional indebtedness in the future, including secured indebtedness secured by different collateral to which the Notes would be effectively junior and indebtedness of non- guarantor subsidiaries to which the Notes would be structurally subordinated. The expected terms of our New Credit Facility and the indenture that will govern the Notes will limit, but not prohibit, us or our subsidiaries from incurring additional indebtedness, including secured indebtedness, but these limits are subject to significant exceptions and do not limit liabilities that do not constitute debt. If we or the guarantors incur any additional indebtedness secured by the collateral on the same first priority basis, the holders of that indebtedness will be entitled to share ratably with the lenders under the New Credit Facility and holders of the Notes and the guarantees offered hereby in any proceeds of the collateral distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding-up of our company. In addition, our substantial indebtedness could have important consequences. For example, it could: 40 Adtalem Global Education Inc. limit our ability to borrow money for our working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes;  make it more difficult for us to satisfy our obligations with respect to our indebtedness, including the Notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indenture governing the Notes and the agreements governing other indebtedness;  require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for other purposes;  limit our flexibility in planning for, or reacting to, changes in our operations or business;  make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;  make us more vulnerable to downturns in our business or the economy; and  restrict us from making strategic acquisitions, engaging in development activities, introducing new technologies or exploiting business opportunities. If new indebtedness is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify. We and our subsidiaries may not be able to generate sufficient cash to service all of our indebtedness following the Acquisition, including the Notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. Our ability following the Acquisition to make scheduled payments on or to refinance our debt obligations, including payments expected on the Notes, depends on our and our subsidiaries’ financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, competitive, legislative, regulatory, and other factors beyond our control. As a result, we may not be able to maintain a level of cash flows from operating activities following the Acquisition sufficient to permit us to pay the principal and interest on our indebtedness. In addition, because we conduct a significant portion of our operations through our subsidiaries, repayment of our indebtedness is also dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us by dividend, debt repayment, or otherwise. Our subsidiaries are distinct legal entities and, other than the Escrow Issuer prior to the Escrow Merger (as defined below) and the Assumption (as defined below) and the guarantors thereafter, they do not have any obligation to pay amounts due on the Notes or to make funds available for that purpose or for other obligations. Pursuant to applicable state limited liability company laws and other laws and regulations, our non- guarantor subsidiaries may not be able to, or may not be permitted to, make distributions to us in order to enable us to make payments in respect of the Notes. In the event that we do not receive distributions from our non-guarantor subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. In addition, there can be no assurance that following the Acquisition our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our New Revolver (as defined below) in an amount sufficient to enable us to pay our indebtedness, including the Notes, or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the Notes. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt will depend on the condition of the capital markets, which are currently experiencing significant volatility during the ongoing COVID-19 pandemic, and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments and the indenture governing the Notes may restrict us from adopting some of these alternatives. If we cannot make scheduled payments on our indebtedness, we will be in default, and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the credit facilities could terminate their commitments to loan money, our secured lenders (including the lenders under the credit facilities and the holders of the Notes) could foreclose against the assets securing their loans and the Notes and we could be forced into bankruptcy or liquidation. 41 2021 Form 10-KThe combined company may be unable to successfully integrate the business of Adtalem and the Walden business acquired in the Acquisition and realize the anticipated benefits of the Acquisition. The success of the Acquisition will depend, in part, on the combined company’s ability to successfully combine the business of Adtalem and the Walden business acquired in the Acquisition, and realize the anticipated benefits, including synergies, cost savings, innovation, and operational efficiencies, from the combination. If the combined company is unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected and the combined company’s financial position, results of operations and cash flows, and the value of its common stock may be harmed. Additionally, rating agencies may take negative actions against the combined company. The Acquisition involves the integration of certain Walden assets of Laureate with Adtalem’s existing business, which is expected to be a complex, costly, and time-consuming process. The integration may result in material challenges, including, without limitation:  the diversion of management’s attention from ongoing business concerns and performance shortfalls at one or both of the companies as a result of the devotion of management’s attention to the Acquisition;  managing a larger combined company;  maintaining employee morale and retaining key management and other employees;  the possibility of faulty assumptions underlying expectations regarding the integration process;  retaining existing business and operational relationships and attracting new business and operational relationships;  consolidating corporate and administrative infrastructures and eliminating duplicative operations;  coordinating geographically separate organizations;  unanticipated issues in integrating information technology, communications, and other systems;  unanticipated changes in federal or state laws or regulations, including changes with respect to government financial aid programs and any regulations enacted thereunder;  unforeseen or worse than anticipated liabilities or risks related to Walden; and  unforeseen expenses or delays associated with the Acquisition. Many of these factors will be outside of the combined company’s control and any one of them could result in delays, increased costs, decreases in the amount of expected revenues, and diversion of management’s time and energy, which could materially affect the combined company’s financial position, results of operations, and cash flows. The integration of Walden with Adtalem’s business may result in unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. These integration matters could have an adverse effect on (i) each of Adtalem and Walden during this transition period and (ii) the combined company for an undetermined period after completion of the Acquisition. In addition, any actual cost savings of the Acquisition could be less than anticipated. Risks Related to Shareholder Activism Shareholder activism, including public criticism of Adtalem or our management team, may adversely affect us. In recent years, shareholder activism involving corporate governance, fiduciary duties of directors and officers, strategic direction and operations has become increasingly prevalent. Since December 2020, investors communications to our Board of Directors, among other things, urged our Board of Directors to focus on the following aspects of our business: (i) consider all options to terminate the Acquisition, (ii) sell the medical schools and the financial services assets, (iii) following the sale of the medical schools and the financial services assets, eliminate the holding company structure, (iv) rationalize the cost structure, (v) make changes to the composition of our management and board, (vi) separate the Chairman and CEO roles, and (vii) review the current management compensation structure. Other recent communications from the investors to our Board of Directors, among other things, urged our Board of Directors to execute the following initiatives: (a) investigate the allegations by the DOJ that Walden University may have violated the federal False Claims Act and explore all possible options for terminating the Acquisition, (b) make changes to the composition of our management to include persons with significant operational and industry experience, (c) separate the Chairman and CEO roles, (d) eliminate our holding company structure and divest the financial services division, and (e) take certain steps to 42 Adtalem Global Education Inc.reduce corporate overhead and redundancies. Additional investor communications to our Board of Directors shared concerns regarding the quality of the assets associated with the Acquisition. Responding to actions by activist shareholders could be costly and time-consuming, disrupt our operations and divert the attention of management and our employees. Additionally, any perceived uncertainties as to our future direction, strategy or leadership created as a consequence of these letters or other activist shareholder initiatives may adversely affect our business or cause our share price to experience periods of volatility or stagnation. Item 1B. Unresolved Staff Comments None. Item 2. Properties Adtalem’s leased facilities are occupied under leases whose remaining terms range from 1 to 11 years. A majority of these leases contain provisions giving Adtalem the right to terminate early or renew its lease for additional periods at various rental rates, although generally at rates higher than are currently being paid. Adtalem’s owned facilities total approximately 883,000 square feet worldwide. No facility that is owned by Adtalem is subject to a mortgage or other indebtedness. Adtalem is leasing space to DeVry University at three facilities owned by Adtalem. Adtalem is subleasing space, in full or in part, at an additional 12 facilities, of which 7 are subleased to DeVry University and/or Carrington. Adtalem remains the primary lessee on the 12 underlying leases. These lease and sublease agreements were entered into at comparable market rates and the terms range from one to five years. Medical and Healthcare Chamberlain Chamberlain’s home office is located in Chicago, Illinois. Chamberlain currently operates 23 campuses in various U.S. locations, of which 3 are in Adtalem owned locations and 20 in leased facilities. Chamberlain’s total portfolio of academic and administrative operations comprise approximately 1.0 million square feet. AUC AUC’s nine-acre campus is located in St. Maarten. The campus is owned and includes approximately 240,000 square feet of academic, student-life, and student residence facilities. In addition to classrooms and auditoriums, educational facilities include a gross anatomy lab, a multi-purpose learning lab, library and learning resource centers, offices, cafeteria, and recreational space facilities. The AUC campus is also supported by administrative staff located in office space in Miramar and Pembroke Pines, Florida. RUSM RUSM’s campus is located in Barbados and is comprised of approximately 474,000 square feet of leased facilities. Educational facilities include 102,000 square feet of classrooms, labs for anatomy and radiology imaging, simulation, physiology and pathology, exam rooms, private and group study, and faculty and administrative space. A residential village includes 5,000 square feet of administrative student services space surrounded by shopping and recreational facilities and over 400 multi-bedroom student units totaling 367,000 square feet. The RUSM campus is also supported by administrative staff located in office space in Miramar and Pembroke Pines, Florida. RUSVM RUSVM’s 50-acre campus is located in St. Kitts. The campus is owned and includes approximately 253,000 square feet. Educational facilities include an anatomy/clinical building, pathology building, research building with state-of-the- art necropsy lab, classroom buildings, administration building, bookstore, cafeteria, and a library/learning resource center. Animal care facilities include kennels, an aviary, and livestock barns. Student-life and student residence facilities are also 43 2021 Form 10-Klocated on the campus. The RUSVM campus is also supported by administrative staff located in office space in North Brunswick, New Jersey. Financial Services Financial Services leases approximately 40,000 square feet for its administrative operations in various U.S. and international locations. Becker classes are conducted in leased facilities, fewer than 10 of which are leased on a full-time basis. The remaining classes are conducted in facilities that are leased on an as-needed basis, allowing classes to be added, expanded, relocated, or closed as current enrollments require. Home Office Adtalem’s home office staff is located in a leased facility in Chicago, Illinois utilizing approximately 32,000 square feet of office space. Item 3. Legal Proceedings For a discussion of legal proceedings, see Note 20 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers Our executive officers are as follows, along with each executive officer’s position, age, and business experience as of for Business Experience Mr. Beard joined Adtalem in February 2018 as Senior Vice President, Secretary and General Counsel. In January 2019, Mr. Beard was appointed Chief Operating Officer and General Counsel. In February 2020, Mr. Beard assumed responsibilities the Financial Services segment and was relieved of his General Counsel responsibilities. On August 4, 2021, Adtalem announced, effective September 8, 2021, Mr. Beard will become Adtalem’s President and joining Chief Executive Officer. Prior Adtalem, Mr. Beard held a variety of leadership roles at Heidrick & Struggles, International from 2003 through 2018 and was most recently Executive Vice President, Chief Administrative Officer and General Counsel. to the date of this filing: Name and Current Position Stephen W. Beard Age 50 Chief Operating Officer, Adtalem Global Education 44 Adtalem Global Education Inc. Name and Current Position Douglas G. Beck Age 54 Senior Vice President, General Counsel and Corporate Secretary, Adtalem Global Education Kathy Boden Holland 54 Group President, Medical and Healthcare Education, Adtalem Global Education Dr. Karen Cox President, Chamberlain University Donna N. Jennings Senior Vice President, Chief Human Resources Officer, Adtalem Global Education Fernando Lau Senior Vice President, Chief Marketing Officer, Adtalem Global Education 61 59 45 Business Experience Mr. Beck joined Adtalem in June 2021 as Senior Vice President, General Counsel and Corporate Secretary. Prior to joining Adtalem, Mr. Beck held a variety of leadership roles at Hub Group from 2011 through 2021 and was most recently Executive Vice President, General Counsel and Secretary. Previously, Mr. Beck served in a legal capacity in a number of other companies across a variety of industries including Alberto Culver, Navistar, and Allegiance Healthcare. Ms. Boden Holland joined Adtalem in May 2018 as Group President, Medical and Healthcare Education. Previously, Ms. Boden Holland served on the Adtalem Board of Directors from January 2017 through May 2018. Prior to joining Adtalem, Ms. Boden Holland was Executive Vice President, Bank Products and in other executive leadership roles at Elevate Credit from 2014 through 2018. Previously, Ms. Boden Holland was Executive Vice President, Corporate Development at Think Finance Incorporated from 2012 to 2014 and President of RLJ Financial LLC from 2010 to 2012. Ms. Boden Holland is a National Association of Corporate Directors (NACD) fellow. Dr. Cox joined Adtalem in August 2018 as President of Chamberlain University. Prior to joining Adtalem, Dr. Cox served as Executive Vice President and Chief Operating Officer of Children’s Mercy – Kansas City an independent, academic medical center in Missouri, from 2006 through August 2018. Prior to that role, Dr. Cox was Senior Vice President for Patient Care Services and Chief Nursing Officer from 2004 through 2006. Ms. Jennings joined Adtalem in October 2006 as Senior Vice President of Human Resources and was promoted to Senior Vice President, Chief Human Resources Officer in November 2020. Prior to joining Adtalem, Ms. Jennings was Vice President, and Resources Communications, of Velsicol Chemical Corporation, a global chemical products manufacturer, from 1994 to 2006. Human Mr. Lau joined Adtalem in January 2010 as Vice President of Marketing and Admissions at Adtalem Brazil. In October 2016, Mr. Lau was appointed Senior Vice President and Chief Marketing Officer. Prior to joining Adtalem, Mr. Lau led the Trade Marketing departments of Motorola and Nokia in Brazil from 2007 to 2009. 45 2021 Form 10-K Name and Current Position Christopher C. Nash Senior Vice President, Chief Information Officer, Adtalem Global Education Robert J. Phelan Interim Chief Financial Officer, Adtalem Global Education Age 54 56 Lisa W. Wardell 51 Chairman of the Board, President and Chief Executive Officer, Adtalem Global Education Business Experience Mr. Nash joined Adtalem in 2010 as Chief Technology Officer and was promoted to Senior Vice President, Chief Information Officer in 2013. Prior to joining Adtalem, Mr. Nash was Chief Technology Officer at Millward Brown Group, a global market research organization and division of Kantar Group. Previously, Mr. Nash held technical leadership roles at Kraft Foods, Inc., Greenbrier & Russel, and Rand McNally. Mr. Phelan joined Adtalem in February 2020 as Vice President, Chief Accounting Officer. Effective April 24, 2021, Mr. Phelan has been serving as Interim Chief Financial Officer and is fulfilling the duties of Principal Financial Officer. Mr. Phelan continues to serve as Vice President, Chief Accounting Officer and Principal Accounting Officer. Prior to joining Adtalem, Mr. Phelan served as Senior Vice President, Finance - Corporate Controller / Risk / Asset Protection at Sears Management the parent Holdings Corporation (“Sears”), company of Kmart Holdings Corporation and Sears, Roebuck and Co., an integrated retailer with a national network of stores, since June 2018. Previously, Mr. Phelan was the Senior Vice President, Finance - Treasurer & Chief Audit Executive at Sears from July 2016 through May 2018. Mr. Phelan also served as Senior Vice President and President – Inventory & Space Management at Sears from September 2007 through June 2016. Ms. Wardell joined Adtalem in May 2016 as President and Chief Executive Officer and was appointed Chairman of the Board in July 2019. Ms. Wardell has served on the Adtalem Board of Directors since 2008 and previously chaired the audit and finance committee. On August 4, 2021, Adtalem announced, effective September 8, 2021, Mr. Beard will succeed Ms. Wardell as Adtalem’s Chief Executive Officer and Ms. Wardell will serve as Executive Chairman of the Board for a one-year term. Prior to joining Adtalem, Ms. Wardell was Executive Vice President and Chief Operating Officer of The RLJ Companies from 2004 through 2016. 46 Adtalem Global Education Inc. PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Adtalem’s common stock is listed on the New York Stock Exchange and NYSE Chicago under the symbol “ATGE.” The stock transfer agent and registrar for Adtalem’s common stock is Computershare Investor Services, L.L.C. Security Holders There were 322 current holders of record of Adtalem’s common stock as of August 12, 2021. The number of holders of record does not include beneficial owners of its securities whose shares are held by various brokerage firms, other financial institutions, Adtalem’s 401(k) Retirement Plan, and its Colleague Stock Purchase Plan. Dividends Adtalem did not pay any dividends in fiscal year 2020 or 2021. Adtalem does not expect to pay any cash dividends in the foreseeable future. Any future payment of dividends will be at the discretion of the Adtalem Board of Directors (the “Board”) and will be dependent on projections of future earnings, cash flow, financial requirements of Adtalem, and other factors as the Board deems relevant. Recent Sales of Unregistered Securities None. Securities Authorized for Issuance Under Equity Compensation Plans See Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in Part III of this Annual Report on Form 10-K. Issuer Purchases of Equity Securities The following information describes Adtalem’s stock repurchases during the fourth quarter of the fiscal year ended June 30, 2021. Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) 38.67 34.47 — 38.31 439,210 $ 41,950 — 481,160 $ Period 246,677,052 April 1, 2021 - April 30, 2021 245,231,124 May 1, 2021 - May 31, 2021 245,231,124 June 1, 2021 - June 30, 2021 Total 245,231,124 (1) On November 8, 2018, we announced that the Board authorized the eleventh share repurchase program, which allowed Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The eleventh share repurchase program commenced in January 2019 and was completed in January 2021. On February 4, 2020, we announced that the Board authorized Adtalem’s twelfth share repurchase program, which allows Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The twelfth and current share repurchase program commenced in January 2021. Repurchases under our share repurchase programs were suspended on March 12, 2020 due to the economic uncertainty caused by the COVID-19 pandemic. In November 2020, Adtalem resumed repurchases under its share repurchase programs. Repurchases were again suspended in May 2021 after achieving management’s target of $100 million in repurchases for fiscal year 2021. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. 439,210 $ 41,950 — 481,160 $ 47 2021 Form 10-K Other Purchases of Equity Securities Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Period April 1, 2021 - April 30, 2021 NA May 1, 2021 - May 31, 2021 NA June 1, 2021 - June 30, 2021 NA NA Total (1) Represents shares delivered back to Adtalem for payment of withholding taxes from employees for vesting restricted stock units and shares swapped for payment on exercise of incentive stock options pursuant to the terms of Adtalem's stock incentive plans. 388 $ 863 448 1,699 $ 34.31 36.83 35.77 35.98 NA NA NA NA Performance Graph The following graph compares the cumulative total returns of Adtalem’s common stock, the NYSE Composite Index (U.S. Companies), and the Peer Group (as defined below) for the period from June 30, 2016 through June 30, 2021, assuming an investment of $100 in each on June 30, 2016 and also assumes the reinvestment of dividends. The stock price performance on the following graph is not necessarily indicative of future stock performance. The following graph is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference in any of our filings under the Securities Act of 1933 or the Exchange Act of 1934, whether made before or after the data of this Form 10-K and irrespective of any general incorporation language in any such filing. 48 Adtalem Global Education Inc. Comparison of Five-Year Cumulative Total Return Among Adtalem Global Education Inc., NYSE Composite Index, and a Peer Group Adtalem Global Education Inc. NYSE Composite Index (U.S. Companies) Peer Group (1) Source data: Zacks Investment Research June 30, 2016 100 100 100 2017 214 115 159 2018 271 126 200 2019 254 135 235 2020 176 126 218 2021 201 179 243 (1) The self-determined “Peer Group” consists of the following companies selected on the basis of similarity in nature of their businesses: American Public Education, Inc., Chegg Inc., Graham Holdings Company, Grand Canyon Education, Inc., Laureate Education, Inc., Perdoceo Education Corporation (formerly known as Career Education Corporation), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.). Item 6. Selected Financial Data Not required. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references. Discussions within this MD&A may contain forward-looking statements. See the “Forward-Looking Statements” section preceding Part I of this Annual Report on Form 10-K for details about the uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements. Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally 49 2021 Form 10-K accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules. See the “Non-GAAP Financial Measures and Reconciliations” section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures. Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto. The following discussion is on the comparison between fiscal year 2020 and fiscal year 2021 results. For a discussion on the comparison between fiscal year 2019 and fiscal year 2020 results, see the MD&A included in Adtalem’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020, as filed with the SEC. Segments As of September 30, 2019, Adtalem eliminated its Business and Law reportable segment when Adtalem Education of Brazil (“Adtalem Brazil”) was classified as discontinued operations and assets held for sale. In addition to the sale of Adtalem Brazil, which was completed on April 24, 2020, during the second quarter of fiscal year 2019, Adtalem divested Carrington College (“Carrington”) and DeVry University. In accordance with GAAP, we have classified the Adtalem Brazil, Carrington, and DeVry University entities as “Assets Held for Sale” and “Discontinued Operations” in all periods presented as applicable. As a result, all financial results, disclosures, and discussions of continuing operations in this Annual Report on Form 10-K exclude Adtalem Brazil, Carrington, and DeVry University operations, unless otherwise noted. See Note 4 “Discontinued Operations and Assets Held for Sale” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional discontinued operations information. 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 University (“Chamberlain”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“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 the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker”), OnCourse Learning (“OCL”), and EduPristine. On August 4, 2021, Adtalem announced we are exploring strategic alternatives for the Financial Services segment. “Home Office and Other” includes activities not allocated to a reportable segment. Financial and descriptive information about Adtalem’s reportable segments is presented in Note 21 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” Walden University Acquisition On August 12, 2021, Adtalem completed the acquisition of all the issued and outstanding equity interest in Walden e- Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company (together with e-Learning, “Walden”), from Laureate Education, Inc. (“Laureate” or “Seller”) in exchange for a purchase price of $1.48 billion in cash, subject to certain adjustments set forth in the Membership Interest Purchase Agreement (the “Agreement) (the “Acquisition”). See the “Liquidity and Capital Resources” section of this MD&A for a discussion on the financing used to fund the Acquisition. The risks and uncertainties related to the Acquisition are described in Item 1A. “Risk Factors.” Refer to the Form 8-K filed with the SEC on August 12, 2021 and Note 22 “Subsequent Event” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Acquisition. 50 Adtalem Global Education Inc.Fiscal Year 2021 Highlights Financial and operational highlights for fiscal year 2021 include:  Adtalem revenue grew $60.4 million, or 5.7%, in fiscal year 2021 compared to the prior year. Both the Medical and Healthcare and Financial Services segments saw increased revenue.  Net income attributable to Adtalem was $76.9 million ($1.49 diluted earnings per share) in fiscal year 2021 compared to net loss attributable to Adtalem of $85.3 million ($1.58 diluted loss per share) in the prior year. This increase of $162.2 million was primarily driven by a pre-tax loss on the sale of Adtalem Brazil of $287.6 million recorded in fiscal year 2020 and a pre-tax legal settlement loss of $45.0 million recorded in fiscal year 2020 (see Note 20. “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”), partially offset by a pre-tax gain of $110.7 million recorded in fiscal year 2020 on the deal- contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil completed on April 24, 2020 to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk, and $31.6 million in business acquisition and integration expense and $26.7 million in pre-acquisition interest expense recorded in fiscal year 2021. Net income from continuing operations attributable to Adtalem excluding special items of $153.7 million ($2.98 diluted earnings per share) increased $30.1 million ($0.70 per share), or 24.4%, in fiscal year 2021 compared to the prior year. This increase was driven by revenue growth at Chamberlain, AUC, RUSVM, and OCL, which resulted in improved operating income for these businesses. The increase was partially offset by a revenue decrease at RUSM and increased costs for sales, marketing, and employee benefits, which resulted in lower operating income.  For the May 2021 session, new and total student enrollment at Chamberlain increased 3.6% and 4.6%, respectively, compared to the same session last year. Chamberlain continues to invest in its programs, student services, and campus locations.  For the May 2021 semester, new enrollment at the medical and veterinary schools increased 12.3% compared to the same semester last year.  ACAMS memberships have increased to more than 83,000 as of June 30, 2021 compared to more than 81,000 as of June 30, 2020.  OCL experienced strong revenue growth in its mortgage loan officer training and continuing education business, attributable to increased demand in the current strong mortgage market.  Adtalem repurchased a total of 2,929,906 shares of Adtalem’s common stock under its share repurchase programs at an average cost of $34.13 per share during fiscal year 2021. Repurchases were suspended on March 12, 2020 due to the economic uncertainty caused by COVID-19 pandemic. In November 2020, Adtalem resumed repurchases under its share repurchase programs. Repurchases were again suspended in May 2021 after achieving management’s target of $100 million in repurchases for fiscal year 2021. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. Overview of the Impact of COVID-19 On March 11, 2020, the novel coronavirus (“COVID-19”) outbreak was declared a pandemic by the World Health Organization. COVID-19 has had tragic consequences across the globe and altered business and consumer activity across many industries. Management initiated several changes to the operations of our institutions and administrative functions in order to protect the health of Adtalem employees, students, and customers and to mitigate the financial effects of COVID-19 and its resultant economic slowdown. We will continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students, customers, and employees. 51 2021 Form 10-KResults of Operations In fiscal year 2021, COVID-19 resulted in estimated revenue losses of approximately $47 million, operating income losses of approximately $33 million, and loss of earnings per share of approximately $0.50. In fiscal year 2020, COVID- 19 resulted in estimated revenue losses of approximately $29 million, operating income losses of approximately $19 million and loss of earnings per share of approximately $0.28. Management anticipates further negative COVID-19 effects to consolidated revenue, operating income, net income, and earnings per share in fiscal year 2022 and beyond or as long as social distancing and other measures established to combat COVID-19 continue to disrupt the normal business operations of our convention operations and Financial Services customers. We also expect higher variable expenses associated with bringing students back to campus and providing a safe environment in the context of COVID-19 as we continue to move back to in-person instruction across both segments. COVID-19 effects on fiscal year 2021 and 2020 results of operations of the Adtalem institutions are described below.  Chamberlain: Approximately 30% of Chamberlain’s students are based at campus locations and pursuing their Bachelor of Science in Nursing (“BSN”) degree; at the onset of the COVID-19 outbreak, all campus-based students transitioned to online learning for didactic and select clinical experiences. The remaining 70% of Chamberlain’s students are enrolled in online programs that may or may not have clinical components and those programs continued to successfully operate. For the September 2020 session, students and employees returned to several Chamberlain campuses for limited onsite instruction. COVID-19 did not result in significant revenue losses or increased costs at Chamberlain in fiscal year 2021 and 2020. The extent of the impact in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19, the efficacy and distribution of the vaccines, and whether any pandemic surge affects healthcare facilities’ ability to continue to provide clinical experiences, most of which have resumed. Chamberlain has clinical partnerships with healthcare facilities across the U.S., minimizing the risk of suspension of all onsite clinical education experiences. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) became law on March 27, 2020. It provided funding for higher education, which included emergency grants, known as Higher Education Emergency Relief Fund (“HEERF”) I, for students who experienced an unexpected expense or hardship as a result of the disruption of campus operations due to COVID-19. In June 2020, Chamberlain received a total of $8.0 million in HEERF I grant funding, for which distribution to eligible students commenced on July 7, 2020. The Consolidated Appropriations Act, 2021 (the “Appropriations Act”) became law on December 27, 2020. The Appropriations Act includes the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 and is referred to as HEERF II. In February 2021, Chamberlain was awarded $7.1 million in HEERF II grant funding, all of which was disbursed to students in fiscal year 2021. The American Rescue Plan Act of 2021 (the “Rescue Act”) became law on March 11, 2021 and authorized additional grant funds for students, known as HEERF III. Chamberlain was allocated $4.6 million in HEERF III grant funds that are dedicated solely to students who meet the institution’s eligibility criteria and which were disbursed to students in July 2021. HEERF I, II, and III funds have been a one-time emergency student financial aid resource associated with the COVID-19 pandemic and recovery, and thus are not anticipated to be renewed in the future. All of the funds received under HEERF I, II, and III were redistributed to eligible students who demonstrated exceptional need. As a result, these funds were recorded as zero net revenue in their respective periods and, thus, did not have a significant effect on the results of operations, financial position, or cash flows of Adtalem in fiscal year 2021 and 2020.  AUC and RUSM: Medical students enrolled in the basic science portion of their program transitioned to online learning at the onset of the COVID-19 outbreak. Many students left St. Maarten and Barbados to continue their studies remotely from other locations. AUC and RUSM were able to provide remote learning and have students remain eligible for U.S. federal financial aid assistance under a waiver provided by the U.S. Secretary of Education that was included in the CARES Act signed into law in March 2020. The waiver was dependent upon the host country’s coronavirus state of emergency declaration. The nation of St. Maarten lifted their declaration in June 2020, and as a result, AUC’s ability to offer distance education ended after the September 2020 semester, requiring all AUC students to return to St. Maarten for basic science instruction effective January 2021. A limited number of RUSM students began returning to Barbados in January and May 2021 with a full return expected for the September 2021 semester. The Appropriations Act was signed into law in December 2020, and corrected technical errors in the CARES Act, which clarified the authority to operate via distance learning due to a declaration of an emergency in an applicable country or a qualifying emergency in the U.S. This section also extends these flexibilities through the end of the qualifying emergency or June 30, 2022, whichever is later. The Appropriations Act provides Adtalem’s foreign institutions the ability to continue distance education without 52 Adtalem Global Education Inc.disruption to their students’ Title IV federal financial aid. COVID-19 did not result in significant revenue losses or increased costs within the basic science programs at the medical schools in fiscal year 2021 and 2020, except with respect to housing operations, as discussed below. COVID-19 will likely have minimal impact on basic science program revenue in fiscal year 2022, except with respect to housing operations, unless students choose to not continue or start their studies during this time of uncertainty. The extent of the impact in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19 and the efficacy and distribution of the vaccines. Students who have completed their basic science education progress to clinical rotations in the U.S. and the U.K. Clinical rotations for all students were temporarily suspended in March 2020; however, some students were able to participate in online clinical elective courses during this transition period and beyond. The COVID-19 surge experienced during the winter in fiscal year 2021 across the U.S. caused many partner hospitals to again reduce the hours available for clinical experiences. As a result, although many students were able to resume their clinical education during the second quarter of fiscal year 2021, management estimates that not being able to offer a full clinical program reduced combined revenue of AUC and RUSM by approximately $21 million and $13 million and operating income by approximately $14 million and $10 million in fiscal year 2021 and 2020, respectively. As of June 2021, all clinical partners of AUC and RUSM have resumed their clinical programs; however, should future surges in COVID-19 again restrict the number of clinical hours available to our students, we could experience negative effects on revenue and operating income in fiscal year 2022 and beyond. Adtalem has clinical partnerships with hospitals across the U.S. and the U.K., minimizing the risk of suspension of all onsite clinical education experiences. In addition to the loss of clinical revenue and operating income at AUC and RUSM, management estimates that housing and student transportation revenue of approximately $13 million and $4 million and operating income losses of approximately $10 million and $2 million in fiscal year 2021 and 2020, respectively, were also lost due to students leaving the St. Maarten and Barbados campuses to continue basic science studies remotely.  RUSVM: All basic science veterinary students transitioned to online learning beginning in March 2020. Many students left St. Kitts in March 2020 to continue their studies remotely from other locations. As of May 2021, all basic science students have returned to St. Kitts where lectures continue to be delivered remotely and labs are in-person. COVID- 19 did not result in significant revenue losses or increased costs within the basic science program in fiscal year 2021 and 2020. We do not expect a significant impact from COVID-19 on the basic science program in fiscal year 2022, unless students choose to not continue or start their studies during this time of uncertainty. RUSVM continues to be able to provide remote learning during the pandemic and have students remain eligible for U.S. federal financial aid assistance under a waiver provided by the CARES Act and the Appropriations Act through the end of the qualifying emergency or June 30, 2022, whichever is later, as described above. Students who have completed their basic science education progress to clinical rotations at select universities in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K. A few universities initially suspended onsite clinical experiences and transitioned students to online education. All universities have since resumed onsite clinical courses. The initial suspensions did not significantly reduce revenue or operating income in fiscal year 2021 and 2020. While we do not expect a significant impact from COVID-19 at RUSVM, the extent of the impact on clinical experiences in fiscal year 2022 and beyond will be determined based on the length and severity of the effects of COVID-19 and the efficacy and distribution of the vaccines.  Financial Services: Most Financial Services content, including exam preparation, certification training, continuing education, and subscriptions is delivered online. Any classroom-based learning has been moved to online. No significant COVID-19 related cost increases were realized in Financial Services in fiscal year 2021 and 2020. COVID-19 did result in estimated revenue losses of approximately $12 million and $12 million and operating income losses of approximately $8 million and $5 million in fiscal year 2021 and 2020, respectively, primarily driven by the cancellation of ACAMS live conferences. Fiscal year 2020 lost revenue and operating income was also impacted at Becker from Prometric, a global leader in the provision of technology-enabled testing and assessment solutions, closing CPA testing sites, along with a number of CPA firms either delaying start dates for, or rescinding altogether, offers of employment to recent college graduates. This dampened a key driver of demand in the fourth quarter of fiscal year 2020, which is normally a time of robust demand because of the influx of new college graduates looking to begin their CPA exam preparation. ACAMS live conference revenue is not expected to return to pre-pandemic levels until COVID-19 restrictions are fully lifted and customer apprehension dissipates. COVID-19 is expected to negatively impact Financial Services revenue and operating income in fiscal year 2022 and beyond driven by lower ACAMS live conference revenue and possible weakness in demand at Becker, primarily with CPA firm customers. Virtual conferences were conducted in late fiscal year 2020 and throughout fiscal year 2021, and additional conference revenue could be replaced with virtual or hybrid events in the future; however, virtual conferences are unlikely to generate the same level of revenue and operating income as live conferences. Loss of 53 2021 Form 10-Kconference revenue is likely in fiscal year 2022 as ACAMS has only recently been able to offer a limited number of live conferences, mostly overseas. Large live and hybrid conferences in the U.S. are not expected to resume until possibly September 2021, and management expects any such events will not initially generate pre-pandemic levels of revenue. Management believes that other than the ACAMS conferences, longer-term operating results in the Financial Services segment will not be significantly affected by COVID-19 unless there are major employment losses with accounting professionals and recent accounting graduates, or in the banking and mortgage sectors. This is not known and cannot be predicted at this time. At Becker, CPA testing sites are operating with available capacity; however, management believes hiring at CPA firms has not yet fully recovered.  Administrative Operations: Most institution and home office administrative operations continue to principally be performed remotely. This includes operations in both the U.S. and all foreign locations. These remote work arrangements have not adversely affected Adtalem’s ability to maintain operations, financial reporting systems, internal control over financial reporting, or disclosure controls and procedures. The effectiveness of our remote technology enables our ability to maintain these systems and controls. Management does not anticipate Adtalem will be materially impacted by any constraints or other impacts on our human capital resources and productivity. Travel restrictions and border closures are not expected to have a material impact on our ability to operate and achieve operational goals. While recent travel expenditures have decreased, we would expect these costs to increase as the effects of COVID-19 dissipate. No significant home office costs were incurred related to COVID-19 in fiscal year 2021 and 2020, and no such costs are anticipated in fiscal year 2022 and beyond. Although COVID-19 has had a negative effect on the operating results of all four reporting units that contain goodwill and indefinite-lived intangible assets as of June 30, 2021, at this time none of the effects are considered significant enough to create an impairment triggering event since our annual goodwill impairment assessment on May 31, 2021. While management has considered the effects of the COVID-19 pandemic in evaluating the existence of an impairment triggering event, it is possible that effects to revenue and cash flows will be more significant than currently expected if the effects of the COVID-19 pandemic and social distancing measures established to combat the virus continue for an extended period of time. Should economic conditions deteriorate beyond expectations in fiscal year 2022, an impairment triggering event could arise and require reassessment of the fair values of goodwill and intangible assets. Liquidity Adtalem’s cash and cash equivalents balance as of June 30, 2021, was $494.6 million. Adtalem generated $223.2 million in operating cash flow from continuing operations in fiscal year 2021. In the event of unexpected market conditions or negative economic changes, including those caused by COVID-19, that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintained a $300 million revolving credit facility with availability of $231.6 million as of June 30, 2021. As of August 12, 2021, Adtalem now maintains a $400 million revolving credit facility (as discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” Management currently projects that COVID-19 will continue to have an effect on operations; however, we believe the current balances of cash, cash generated from operations, and our New Credit Facility (as defined and discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) will be sufficient to fund both Adtalem’s current domestic and international operations and growth plans in the foreseeable future. See further discussion on the new financing executed to close the Acquisition in the section of this MD&A titled “Liquidity and Capital Resources.” 54 Adtalem Global Education Inc. Results of Operations The following table presents selected Consolidated Statements of Income (Loss) data as a percentage of revenue: Revenue Cost of educational services Student services and administrative expense Restructuring expense Business acquisition and integration expense Gain on sale of assets Settlement gains Total operating cost and expense Operating income Net other (expense) income Income from continuing operations before income taxes (Provision for) benefit from income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income (loss) Net loss (income) attributable to redeemable noncontrolling interest Net income (loss) attributable to Adtalem Revenue 2021 100.0 % 44.0 % 37.8 % 0.9 % 2.8 % 0.0 % 0.0 % 85.5 % 14.5 % (3.1) % 11.4 % (2.3) % 9.1 % (2.3) % 6.9 % 0.0 % 6.9 % Year Ended June 30, 2020 100.0 % 46.6 % 37.6 % 2.7 % 0.0 % (0.5)% 0.0 % 86.5 % 13.5 % 9.0 % 22.5 % 0.6 % 23.1 % (31.3)% (8.2)% 0.0 % (8.1)% 2019 100.0 % 46.5 % 35.4 % 5.2 % 0.0 % 0.0 % (2.6)% 84.6 % 15.4 % (1.6)% 13.8 % (3.2)% 10.5 % (1.1)% 9.4 % (0.0)% 9.4 % The following table presents revenue by segment detailing the changes from the prior year (in thousands): Fiscal year 2020 as reported Organic growth Fiscal year 2021 as reported Fiscal year 2021 % change: Organic growth Medical and Healthcare Medical and Healthcare Year Ended June 30, 2021 Financial Services Consolidated $ $ 866,428 40,473 906,901 $ $ 185,573 19,906 205,479 $ $ 1,052,001 60,379 1,112,380 4.7 % 10.7 % 5.7 % Revenue in the Medical and Healthcare segment increased 4.7%, or $40.5 million, to $906.9 million in fiscal year 2021 compared to the prior year. The increase in revenue in fiscal year 2021 is driven primarily by student enrollment increases at Chamberlain. This increase was partially offset by an estimated loss of approximately $13 million in housing and student transportation revenue in fiscal year 2021 (compared to $4 million in fiscal year 2020), primarily at RUSM as basic science students were not on campus for the full year due to COVID-19 remote learning. COVID-19 related clinical revenue losses at AUC and RUSM were approximately $21 million in fiscal year 2021 (compared to $13 million in fiscal year 2020) driven by limitations at partner hospitals, which although not as severe as earlier in the pandemic, were reinstituted when COVID-19 cases surged across the U.S. during the winter in fiscal year 2021. 55 2021 Form 10-K Chamberlain Chamberlain Student Enrollment: Session New students % change from prior year Total students % change from prior year Session New students % change from prior year Total students % change from prior year Fiscal Year 2021 July 2020 2,768 Sept. 2020 Nov. 2020 2,931 6,333 Jan. 2021 Mar. 2021 May 2021 4,363 3,283 5,202 15.5 % 13.2 % 8.1 % (1.7)% 6.8 % 3.6 % 32,198 35,525 34,387 35,750 35,702 34,930 12.2 % 11.9 % 10.2 % 5.6 % 5.8 % 4.6 % Fiscal Year 2020 July 2019 2,396 Sept. 2019 Nov. 2019 2,711 5,595 Jan. 2020 Mar. 2020 May 2020 4,213 3,073 5,293 (5.0)% 2.9 % 3.6 % 11.2 % 12.7 % 5.4 % 28,691 31,736 31,215 33,850 33,748 33,407 2.3 % 1.4 % 1.2 % 4.6 % 5.1 % 8.2 % Chamberlain revenue increased 10.2%, or $52.2 million, to $563.8 million in fiscal year 2021 compared to the prior year, driven by increases in total student enrollment during each of the fiscal year 2021 enrollment sessions compared to the same session from the prior year as well as select tuition and fee price increases. Management believes that the launch of new programs, the addition of weekend and evening classes, the scaling provided by our multi-campus model, and the effectiveness of recent marketing investments have contributed to the enrollment increases. Chamberlain admitted its largest class of campus students in September 2020. Chamberlain currently operates 23 campuses in 15 states, including Chamberlain’s newest campus in Irwindale, California, which began instruction in May 2021. Tuition Rates: Tuition for the Bachelor of Science in Nursing (“BSN”) onsite degree program ranges from $675 to $730 per credit hour. Tuition for the Registered Nurse to BSN (“RN-to-BSN”) online degree program is $590 per credit hour. Tuition for the online Master of Science in Nursing (“MSN”) degree program is $650 per credit hour. Tuition for the online Family Nurse Practitioner (“FNP”) degree program is $665 per credit hour. Tuition for the online Doctor of Nursing Practice (“DNP”) degree program is $775 per credit hour. Tuition for the online Master of Public Health (“MPH”) degree program is $550 per credit hour. Tuition for the online Master of Social Work (“MSW”) degree program is $695 per credit hour. These tuition rates do not include the cost of books, supplies, transportation, or living expenses. 56 Adtalem Global Education Inc. Medical and Veterinary Schools Medical and Veterinary Schools Student Enrollment: Semester New students % change from prior year Total students % change from prior year Semester New students % change from prior year Total students % change from prior year Fiscal Year 2021 Sept. 2020 Jan. 2021 May 2021 920 5.5 % 5,850 4.3 % 589 21.2 % 5,292 (6.2) % 611 12.3 % 5,126 (1.2)% Fiscal Year 2020 Sept. 2019 Jan. 2020 May 2020 872 (1.9)% 5,608 (4.7)% 486 3.2 % 5,643 1.7 % 544 9.7 % 5,186 (0.7)% The medical and veterinary schools’ revenue decreased 3.3%, or $11.7 million, to $343.1 million in fiscal year 2021 compared to the prior year. The principal drivers of the decrease were an estimated loss of approximately $13 million in fiscal year 2021 in housing and student transportation revenue (compared to $4 million in fiscal year 2020), primarily at RUSM as basic science students were not on campus for the full year due to COVID-19 remote learning. COVID-19 related clinical revenue losses at AUC and RUSM were approximately $21 million in fiscal year 2021 (compared to $13 million in fiscal year 2020) driven by limitations at partner hospitals, which although not as severe as earlier in the pandemic, were reinstituted when COVID-19 cases surged across the U.S. during the winter in fiscal year 2021. These decreases were partially offset with student enrollment increases in the basic science programs at AUC and RUSVM. In the May 2021 semester, total student enrollment increased at AUC and RUSVM but declined at RUSM while new student enrollment increased at AUC and RUSM but declined slightly at RUSVM. In the January 2021 semester, total student enrollment increased at AUC and RUSVM but declined at RUSM while new student enrollment increased at RUSM and RUSVM but declined slightly at AUC. The declines in total student enrollment at RUSM for the January 2021 and May 2021 semesters were partially driven by the inability to offer clinical experiences to all eligible students caused by the COVID-19 restrictions at partner hospitals and partially driven by an increase in students waiting to pass their USMLE Step 1 exam. In previous semesters during the COVID-19 pandemic, students were able to supplement their clinical experience with elective online courses; however, these electives are limited and most were completed. If a student has not yet started in a clinical program, is not eligible to be enrolled in a clinical program, or not participating in other educational experiences, they are not included in the enrollment count for that semester. In the September 2020 semester, total student enrollment increased at AUC, RUSM, and RUSVM while new student enrollment increased at AUC and RUSM but slightly declined at RUSVM due to the large cohort of May 2020 Vet Prep students progressing to September 2020, which was at maximum enrollment capacity. Management is executing its plan to differentiate the medical and veterinary schools from the competition, with a core goal of increasing international students, increasing affiliations with historically black colleges and universities (“HBCU”) and Hispanic-serving institutions (“HSI”), expanding AUC’s medical education program based in the U.K. in partnership with the University of Central Lancashire (“UCLAN”), and improving the effectiveness of marketing and enrollment investments. In September 2019, AUC opened its medical education program in the U.K. in partnership with UCLAN. The program offers students a Post Graduate Diploma in International Medical Sciences from UCLAN, followed by their Doctor of Medicine degree from AUC. Students are eligible to do clinical rotations at AUC’s clinical sites, which include hospitals in the U.S., the U.K., and Canada. This program is aimed at preparing students for the U.S. Medical Licensing Examination (“USMLE”). 57 2021 Form 10-K Tuition Rates:  Effective for semesters beginning in September 2020, tuition rates for the beginning basic sciences and final clinical rotation portions of AUC’s medical program are $23,240 and $26,000, respectively, per semester. These tuition rates are unchanged from the prior academic year.  Effective for semesters beginning in September 2020, tuition rates for the beginning basic sciences and final clinical rotation portions of RUSM’s medical program are $24,170 and $26,676, respectively, per semester. These tuition rates are unchanged from the prior academic year.  For students who entered the RUSVM program in September 2018 or later, the tuition rate for the pre-clinical (Semesters 1-7) and clinical curriculum (Semesters 8-10) is $20,873 per semester effective September 2020. For students who entered RUSVM before September 2018, tuition rates for the pre-clinical and clinical curriculum are $19,387 and $24,339, respectively, per semester effective September 2020. These tuition rates are unchanged from the prior academic year. The respective tuition rates for AUC, RUSM, and RUSVM do not include the cost of transportation, living expenses, or health insurance. Financial Services Revenue in the Financial Services segment increased 10.7%, or $19.9 million, to $205.5 million in fiscal year 2021 compared to the prior year. The principal driver of this increase was increased revenue at OCL, ACAMS, and Becker. At OCL, the revenue increase was driven by the mortgage loan officer training and continuing education business, attributable to increased demand in the current strong mortgage market. At ACAMS, lost conference revenue was offset by increases in certification and risk assessment revenue. ACAMS lost conference revenue of approximately $12 million in fiscal year 2021 (compared to $7 million in fiscal year 2020) from live conferences moving to a virtual format in response to COVID- 19 restrictions. ACAMS memberships have increased to more than 83,000 as of June 30, 2021 compared to more than 81,000 as of June 30, 2020, driven by strong growth in the European region. At Becker, the revenue increase was driven by growth in its continuing education product line and entry into the Certified Management Accountant exam preparation market. Cost of Educational Services The largest component of cost of educational services is the cost of faculty and staff who support educational operations. This expense category also includes the costs of facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and the provision for bad debts. The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands): Fiscal year 2020 as reported Cost increase (decrease) Fiscal year 2021 as reported Fiscal year 2021 % change: Cost increase (decrease) Medical and Healthcare Year Ended June 30, 2021 Financial Services Home Office and Other Consolidated $ $ 455,123 $ 662 455,785 $ 32,889 $ (1,561) 31,328 $ 2,042 $ 78 2,120 $ 490,054 (821) 489,233 0.1 % (4.7)% NM (0.2)% Cost of educational services decreased 0.2%, or $0.8 million, to $489.2 million in fiscal year 2021 compared to the prior year. Cost decreased in fiscal year 2021 primarily driven by decreased bad debt expense of $4.6 million primarily related to the credit extension programs at the medical and veterinary schools, cost control initiatives across all institutions, and lower costs of approximately $14 million in fiscal year 2021 (compared to $10 million in fiscal year 2020) associated with campus closure, reduced clinical rotations, lower services, including housing services, and ACAMS live conferences, due to the COVID-19 related revenue losses as noted above. These decreases were partially offset by increased costs at Chamberlain and the basic science programs at the medical and veterinary schools to support growth. 58 Adtalem Global Education Inc. As a percentage of revenue, cost of educational services was 44.0% in fiscal year 2021 compared to 46.6% in the prior year. The decrease in the percentage was primarily the result cost control and leveraging our infrastructure in both Medical and Healthcare and Financial Services, as well as decreased bad debt expense related to the credit extension programs at the medical and veterinary schools. Student Services and Administrative Expense The student services and administrative expense category includes expenses related to sales, student admissions, marketing and advertising, general and administrative, curriculum development, and amortization expense of finite-lived intangible assets related to business acquisitions. The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands): Year Ended June 30, 2021 Fiscal year 2020 as reported Cost increase Fiscal year 2021 as reported Fiscal year 2021 % change: Cost increase Medical and Healthcare $ $ 243,560 $ 10,854 254,414 $ Financial Services 130,221 $ 12,524 Home Office and Other 22,057 $ 1,051 142,745 $ 23,108 $ Consolidated 395,838 24,429 420,267 4.5 % 9.6 % NM 6.2 % Student services and administrative expense increased 6.2%, or $24.4 million, to $420.3 million in fiscal year 2021 compared to the prior year. Expense increased primarily due to increased sales and marketing expense of $17.9 million in fiscal year 2021 to support continued growth, and an increase in employee benefit costs of $7.9 million. These increased costs were partially offset with cost control initiatives across all institutions. As a percentage of revenue, student services and administrative expense was 37.8% in fiscal year 2021 compared to 37.6% in the prior year. Restructuring Expense Restructuring expense in fiscal year 2021 was $9.8 million compared to $28.6 million in fiscal year 2020. The primary driver of the decreased restructure expense in fiscal year 2021 was the result of the higher amount of charges in fiscal year 2020 related to real estate consolidations at Adtalem’s home office and the sale of Becker’s courses for healthcare students. See Note 6 “Restructuring Charges” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on restructuring charges. We have completed our current restructuring plans. However, we continue to incur restructuring charges or reversals related to exiting leased space from previous restructuring activities. Management may institute future restructuring plans. Business Acquisition and Integration Expense Business acquisition and integration expense in fiscal year 2021 was $31.6 million. These are transaction costs associated with entering into the Agreement to acquire Walden and costs associated with integrating Walden into Adtalem. We expect to incur additional integration costs in fiscal year 2022. There was no corresponding expense in fiscal year 2020. Gain on Sale of Assets On September 27, 2019, Adtalem closed on the sale of its Columbus, Ohio, campus facility. Net proceeds of $6.4 million from the sale of this facility resulted in a gain on the sale of $4.8 million in fiscal year 2020. This gain was recorded at Adtalem’s home office, which is classified as “Home Office and Other” in Note 21 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” There was no corresponding gain in fiscal year 2021. 59 2021 Form 10-K Operating Income The following table presents operating income by segment detailing the changes from the prior year (in thousands): Medical and Healthcare Year Ended June 30, 2021 Financial Services Home Office and Other Fiscal year 2020 as reported Organic change Restructuring expense change Business acquisition and integration expense change Gain on sale of assets change Fiscal year 2021 as reported $ $ 166,037 $ 28,959 1,707 — — 196,703 $ 17,622 $ 8,941 1,798 — — 28,361 $ (41,399) $ (1,129) 15,319 (31,593) (4,779) (63,581) $ Consolidated 142,260 36,771 18,824 (31,593) (4,779) 161,483 The following table presents a reconciliation of operating income (GAAP) to operating income excluding special items (non-GAAP) by segment (in thousands): Medical and Healthcare: Operating income (GAAP) Restructuring expense Operating income excluding special items (non-GAAP) Financial Services: Operating income (GAAP) Restructuring expense Operating income excluding special items (non-GAAP) Home Office and Other: Operating loss (GAAP) Restructuring expense Business acquisition and integration expense Gain on sale of assets Operating loss excluding special items (non-GAAP) Adtalem Global Education: Operating income (GAAP) Restructuring expense Business acquisition and integration expense Gain on sale of assets Operating income excluding special items (non-GAAP) Year Ended June 30, 2021 2020 Increase (Decrease) $ $ $ $ $ $ $ $ 196,703 — 196,703 28,361 3,044 31,405 (63,581) 6,760 31,593 — (25,228) 161,483 9,804 31,593 — 202,880 $ $ $ $ $ $ $ $ 166,037 1,707 167,744 17,622 4,842 22,464 (41,399) 22,079 — (4,779) (24,099) 142,260 28,628 — (4,779) 166,109 18.5 % 17.3 % 60.9 % 39.8 % (53.6)% (4.7)% 13.5 % 22.1 % Total consolidated operating income increased 13.5%, or $19.2 million, to $161.5 million in fiscal year 2021 compared to the prior year. Consolidated operating income excluding special items increased 22.1%, or $36.8 million, to $202.9 million in fiscal year 2021 compared to the prior year. The primary drivers of this increase were an increase in revenue of $60.4 million, primarily at Chamberlain, which generated higher incremental operating income than the lost revenue sources at other institutions due to COVID-19, decreased bad debt expense of $4.6 million, primarily related to the credit extension programs at the medical and veterinary schools, and efforts to manage salary, travel, and discretionary spending across the organization. The positive influences on operating income were partially offset by increased sales and marketing expense of $17.9 million in fiscal year 2021 to support continued growth, and an increase of $7.9 million in employee benefit costs. In addition, the effects of COVID-19 reduced operating income in fiscal year 2021 by approximately $33 million (compared to $19 million in fiscal year 2020), primarily driven by the loss of AUC and RUSM clinical revenue, RUSM housing and student transportation revenue, and ACAMS conference revenue. Medical and Healthcare Medical and Healthcare segment operating income increased 18.5%, or $30.7 million, to $196.7 million in fiscal year 2021 compared to the prior year. The primary driver of the increase in operating income is the increased revenue at 60 Adtalem Global Education Inc. Chamberlain of $52.2 million in fiscal year 2021, which generated higher incremental operating income than the lost revenue sources due to COVID-19, as discussed below. In addition, other drivers include decreased bad debt expense of $3.4 million in fiscal year 2021, primarily related to the credit extension programs at the medical and veterinary schools, and efforts to manage salary, travel, and discretionary spending at all institutions. The positive influences on operating income in fiscal year 2021 were partially offset by increased marketing expense of $7.6 million in fiscal year 2021 to support continued growth and increased employee benefit costs of $4.2 million. Estimated COVID-19 related loss of clinical revenue at AUC and RUSM contributed to approximately $14 million in lost operating income in fiscal year 2021 (compared to $10 million in fiscal year 2020). Lower COVID-19 related housing and student transportation revenue, primarily at RUSM as described above, resulted in approximately $10 million in lost operating income in the fiscal year 2021 (compared to $2 million in fiscal year 2020). Financial Services Financial Services segment operating income increased 60.9%, or $10.7 million, to $28.4 million in fiscal year 2021 compared to the prior year. Segment operating income excluding special items increased 39.8%, or $8.9 million, in fiscal year 2021 compared to the prior year. The primary driver of this increase was an increase in revenue at OCL, ACAMS, and Becker, which resulted in improved operating income. This increase was partially offset by increased sales and marketing expense of $10.3 million in fiscal year 2021. Conference revenue decreases at ACAMS due to COVID-19, as described above, drove approximately $8 million in lost operating income in fiscal year 2021 (compared to $5 million in fiscal year 2020); however, this decrease was fully offset by improved operating income from other ACAMS operations. Net Other (Expense) Income Net other expense in fiscal year 2021 was $34.6 million compared to net other income of $94.9 million in the prior year. The increase in net other expense was primarily the result of a pre-tax gain of $110.7 million in fiscal year 2020 on the deal-contingent foreign currency hedge arrangement entered into on October 18, 2019 in connection with the sale of Adtalem Brazil, which was completed on April 24, 2020, to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk (as discussed in Note 4 “Discontinued Operations and Assets Held for Sale” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”). The derivative associated with the hedge did not qualify for hedge accounting treatment under Accounting Standards Codification (“ASC”) 815, and as a result, all changes in fair value were recorded within the income statement. In addition, interest expense increased in fiscal year 2021 driven by $26.7 million in pre-acquisition interest expense, which partially offset our lower interest expense on our current Credit Facility driven by the repayment of debt in the fourth quarter of fiscal year 2020 using the proceeds from the sale of Adtalem Brazil. (Provision for) Benefit from Income Taxes Our effective income tax rate (“ETR”) from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, changes in valuation allowances, liabilities for uncertain tax positions, and tax benefits on stock-based compensation awards. Additionally, our ETR is impacted by the provisions from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which primarily includes a tax on global intangible low-taxed income (“GILTI”), a deduction for foreign derived intangible income (“FDII”), and a limitation of tax benefits on certain executive compensation. The impact of the Tax Act may be revised in future periods as we obtain additional data and consider any new regulations or guidance that may be released. The ETR from continuing operations in fiscal year 2021 was positive 19.9%, an increase from negative 2.7% in fiscal year 2020. This increase is primarily due to not recording a tax provision on the pre-tax gain of $110.7 million in fiscal year 2020 on the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil completed on April 24, 2020 (see Note 4 “Discontinued Operations and Assets Held for Sale” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information). Also, during fiscal year 2020, a net tax benefit special item of $25.7 million was recorded related to a former subsidiary investment loss claimed for the tax year ended June 30, 2018. Excluding the one-time effects of the derivative contract and the tax benefit on a former subsidiary investment loss in fiscal year 2020 (a non-GAAP financial measure), the ETR from continuing 61 2021 Form 10-Koperations in fiscal year 2021 and 2020 was 19.9% and 15.3%, respectively. This increase in the fiscal year 2021 rate was driven by a decrease in the percentage of earnings from foreign operations compared to the prior year. On December 27, 2020, the Appropriations Act was enacted in response to the COVID-19 pandemic. The Appropriations Act, among other things, temporarily extends through December 31, 2025, certain expiring tax provisions, including look-through treatment of payments of dividends, interest, rents, and royalties received or accrued from related controlled foreign corporations. Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the CARES Act, enacted on March 27, 2020, including an extension of time for repayment of the deferred portion of employees’ payroll tax through December 31, 2021, and a temporary allowance for full deduction of certain business meals. Adtalem has elected not to defer the employees’ portion of payroll tax. Management does not expect that the other provisions of the Appropriations Act would result in a material tax or cash benefit. On March 11, 2021, the Rescue Act was enacted in response to the COVID-19 pandemic. The Rescue Act, among other things, expands the number of employees subject to the tax deductibility limitation of employee compensation in excess of $1 million for tax years beginning after December 31, 2026 and repeals the election for U.S. affiliated groups to allocate interest expense on a worldwide basis. Management does not expect that the other provisions of the Rescue Act would result in a material tax or cash detriment. Discontinued Operations Beginning in the second quarter of fiscal year 2018, DeVry University operations were classified as discontinued operations. Beginning in the fourth quarter of fiscal year 2018, Carrington operations were classified as discontinued operations. Beginning in the first quarter of fiscal year 2020, Adtalem Brazil operations were classified as discontinued operations. The divestitures of Carrington and DeVry University operations were completed in the second quarter of fiscal year 2019 and the divestiture of Adtalem Brazil operations was completed in the fourth quarter of fiscal year 2020. We continue to incur costs, principally attorney fees, associated with ongoing litigation and settlements related to the DeVry University divestiture which is classified as expense within discontinued operations. Total loss from discontinued operations for the year ended June 30, 2021 was $25.1 million, which was the result of costs from the ongoing litigation and settlements related to the DeVry University divestiture. Total loss from discontinued operations for the year ended June 30, 2020 was $329.3 million. This loss consisted of the following: (i) a loss of $62.6 million driven by the operating results of Adtalem Brazil and ongoing litigation costs, settlements, and other divestiture costs related to the DeVry University, Carrington, and Adtalem Brazil divestitures; (ii) a loss on the sale of Adtalem Brazil of $287.6 million, which included a $293.4 million loss recognized from the reclassification of the cumulative foreign currency translation adjustments from other comprehensive income; and (iii) a benefit from income taxes of $20.8 million associated with the items listed above. Management no longer discloses other discussions of operating results of these entities as comparable results are no longer meaningful. Regulatory Environment Student Payments Adtalem’s primary source of liquidity is the cash received from payments for student tuition, books, other educational materials, and fees. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans (“private loans”), employer educational reimbursements, scholarships, and student and family financial resources. Adtalem continues to provide financing options for its students, including Adtalem’s credit extension programs. 62 Adtalem Global Education Inc.The following table, which excludes Adtalem Brazil, Carrington, and DeVry University revenue, summarizes Adtalem’s revenue by fund source as a percentage of total revenue for fiscal years 2020 and 2019. Final data for fiscal year 2021 is not yet available. Federal assistance (Title IV) program funding (grants and loans) Private loans Student accounts, cash payments, private scholarships, employer and military provided tuition assistance, and other Total Fiscal Year 2020 2019 59 % 2 % 59 % 2 % 39 % 39 % 100 % 100 % The pattern of cash receipts during the year is seasonal. Adtalem’s cash collections on accounts receivable peak at the start of each institution’s term. Accounts receivable reach their lowest level at the end of each institution’s term. Financial Aid Like other higher education companies, Adtalem is highly dependent upon the timely receipt of federal financial aid funds. All financial aid and assistance programs are subject to political and governmental budgetary considerations. In the U.S., the Higher Education Act (“HEA”) guides the federal government’s support of postsecondary education. If there are changes to financial aid programs that restrict student eligibility or reduce funding levels, Adtalem’s financial condition and cash flows could be materially and adversely affected. See Item 1A. “Risk Factors” for a discussion of student financial aid related risks. In addition, government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Adtalem’s administration of these programs is periodically reviewed by various regulatory agencies and is subject to audit or investigation by other governmental authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding. If the U.S. Department of Education (“ED”) determines that we have failed to demonstrate either financial responsibility or administrative capability in any pending program review, or otherwise determines that an institution has violated the terms of its Program Participation Agreement (“PPA”), we could be subject to sanctions including: fines, penalties, reimbursement for discharged loan obligations, a requirement to post a letter of credit and/or suspension or termination of our eligibility to participate in the Title IV programs. During the fourth quarter of fiscal year 2020 and the first quarter of fiscal year 2021, ED provisionally recertified AUC, RUSM, and RUSVM’s Title IV PPAs with expiration dates of December 31, 2022, March 31, 2023, and June 30, 2023, respectively. The provisional nature of the agreements stemmed from increased and/or repeated Title IV compliance audit findings. No financial ramifications, such as a letter of credit, heightened cash monitoring, or student enrollment limitations, were imposed on any of these institutions. While corrective actions have been taken to resolve past compliance matters and eliminate the incidence of repetition, if AUC, RUSM, or RUSVM fail to maintain administrative capability as defined by ED while under provisional status or otherwise fail to comply with ED requirements, the institution(s) could lose eligibility to participate in Title IV programs or have that eligibility adversely conditioned, which could have a material adverse effect on the businesses, financial condition, results of operations, and cash flows. On October 13, 2016, DeVry University and ED reached a negotiated agreement (the “ED Settlement”) to settle the claims asserted in a Notice of Intent to Limit from the Multi-Regional and Foreign School Participation Division of the Federal Student Aid office of the Department of Education (“ED FSA”). Under the terms of the ED Settlement, among other things, without admitting wrongdoing, DeVry University agreed to certain compliance requirements regarding its past and future advertising, that DeVry University’s participation in Title IV programs is subject to provisional certification for five years and that DeVry University is required to post a letter of credit equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. The posted letter of credit continues to be posted by Adtalem following the closing of the sale of DeVry University and reduces Adtalem’s borrowing capacity 63 2021 Form 10-K dollar-for-dollar under its Credit Facility (as defined in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”). An ED regulation known as the “90/10 Rule” affects only proprietary postsecondary institutions, such as Chamberlain, AUC, RUSM, and RUSVM. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Title IV student financial assistance programs in two consecutive fiscal years loses eligibility to participate in these programs for at least two fiscal years. The Rescue Act enacted on March 11, 2021 amended the 90/10 rule to require that a proprietary institution derive no more than 90% of its revenue from federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs and military tuition assistance benefits. This change is subject to negotiated rulemaking, which will not begin prior to October 1, 2021. The amended rule will first apply to institutional fiscal years beginning on or after January 1, 2023. The following table details the percentage of revenue on a cash basis from federal financial assistance programs (excluding the U.S. Department of Veterans Affairs and military tuition assistance benefits) for each of Adtalem’s Title IV-eligible institutions for fiscal years 2020 and 2019. Final data for fiscal year 2021 is not yet available. Chamberlain University American University of the Caribbean School of Medicine Ross University School of Medicine Ross University School of Veterinary Medicine Fiscal Year 2020 2019 62 % 81 % 85 % 84 % 62 % 75 % 83 % 83 % In September 2016, Adtalem committed to voluntarily limit to 85% the amount of revenue that each of its Title IV- eligible institutions derive from federal funding, including the U.S. Department of Veterans Affairs and military tuition assistance benefits. As disclosed in the third-party review reports that have been made publicly available, Adtalem’s institutions have met this lower threshold for each fiscal year since the commitment was made. Adtalem is committed to implementing measures to promote responsible recruitment and enrollment, successful student outcomes, and informed student choice. Management believes students deserve greater transparency to make informed choices about their education. This commitment builds upon a solid foundation and brings Adtalem to a new self-imposed level of public accountability and transparency. A financial responsibility test is required for continued participation by an institution’s students in U.S. federal financial assistance programs. For Adtalem’s participating institutions, this test is calculated at the consolidated Adtalem level. The test is based upon a composite score of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A minimum score of 1.5 is necessary to meet ED’s financial standards. Institutions with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible, but require additional oversight. These institutions are subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is considered not financially responsible. However, an institution with a score of less than 1.0 may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year). For the past several years, Adtalem’s composite score has exceeded the required minimum of 1.5. Changes to the manner in which the composite score is calculated that were effective on July 1, 2020 has negatively affected Adtalem’s composite score for fiscal year 2021 and will continue to negatively affect future Adtalem scores. At this time, management does not believe these changes by themselves will result in the score falling below 1.5. However, as a result of the acquisition of Walden and the related transactions, Adtalem expects its consolidated composite score to fall below 1.5 at its next financial responsibility test. If Adtalem becomes unable to meet requisite financial responsibility standards within the regulations, management believes it will be able to otherwise demonstrate its ability to continue to provide educational services; however, our institutions could still be subject to heightened cash monitoring or be required to post a letter of credit to continue to participate in federal and state financial assistance programs. 64 Adtalem Global Education Inc. Liquidity and Capital Resources Adtalem’s consolidated cash and cash equivalents balance of $494.6 million and $500.5 million as of June 30, 2021 and 2020, respectively, included cash and cash equivalents held at Adtalem’s international operations of $127.2 million and $70.1 million as of June 30, 2021 and 2020, respectively, which is available to Adtalem for general corporate purposes. Cash balances are currently being maintained to partially fund the proposed Acquisition, as discussed in the previous section “Walden University Acquisition” of this MD&A. Under the terms of Adtalem institutions’ participation in financial aid programs, certain cash received from state governments and ED is maintained in restricted bank accounts. Adtalem receives these funds either after the financial aid authorization and disbursement process for the benefit of the student is completed, or just prior to that authorization. Once the authorization and disbursement process for a particular student is completed, the funds may be transferred to unrestricted accounts and become available for Adtalem to use in operations. This process generally occurs during the academic term for which such funds have been authorized. Cash in the amount of $0.4 million and $0.6 million was held in restricted bank accounts as of June 30, 2021 and 2020, respectively. In addition, $818.6 million is recorded within restricted cash on the Consolidated Balance Sheet as of June 30, 2021, which represents cash held in an escrow account designated to fund the Acquisition and is not available to Adtalem for general corporate purposes (see Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information). Cash Flow Summary Operating Activities The following table provides a summary of cash flows from operating activities (in thousands): Income from continuing operations Non-cash items Changes in assets and liabilities Net cash provided by operating activities-continuing operations $ 101,602 $ 243,537 16,204 (110,176) $ 223,158 $ 149,565 129,034 (7,478) Year Ended June 30, 2020 2021 Net cash provided by operating activities from continuing operations in fiscal year 2021 was $223.2 million compared to $149.6 million in the prior year. The increase of $112.8 million in non-cash items between fiscal year 2021 and 2020 was principally driven by the gain of $110.7 million recorded in income from continuing operations in the prior year for the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil completed on April 24, 2020 to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk (as discussed in Note 4 “Discontinued Operations and Assets Held for Sale” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”). The increase of $73.6 million in cash generated from continuing operating activities between fiscal year 2021 and 2020 was primarily due to timing of prepaid expense, accounts payable, accrued expense disbursements, and deferred revenue. This includes changes in prepaid income taxes, accrued payroll taxes and benefits, accounts payable, accrued income taxes, accrued interest, and clinical partner payments. Investing Activities Capital expenditures in fiscal year 2021 were $48.7 million compared to $44.1 million in the prior year. The capital expenditures in fiscal year 2021 include spending for Chamberlain new campus development, maintenance, and Adtalem’s home office information technology investments. Capital spending for fiscal year 2022 will support continued investment for new campus development at Chamberlain, maintenance at the medical and veterinary schools, and Adtalem’s home office. Management anticipates fiscal year 2022 capital spending to be in the $50 to $60 million range, which excludes any capital spending related to Walden. The source of funds for this capital spending will be from operations or the New Credit Facility (as defined and discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”). 65 2021 Form 10-K On September 27, 2019, Adtalem closed on the sale of its Columbus, Ohio, campus facility. Net proceeds of $6.4 million from the sale of this facility resulted in a gain on the sale of $4.8 million in fiscal year 2020. This gain was recorded at Adtalem’s home office, which is classified as “Home Office and Other” in Note 21 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” On April 24, 2020, Adtalem completed the sale of Adtalem Brazil to Estácio Participações S.A. (“Estácio”) and Sociedade de Ensino Superior Estaćio de Sá Ltda, a wholly owned subsidiary of Estácio (“Purchaser”), pursuant to the Stock Purchase Agreement dated October 18, 2019. Adtalem received $345.9 million in sale proceeds and $56.0 million of Adtalem Brazil’s cash, for a combined $401.9 million upon the sale. Adtalem Brazil’s cash balance on the sale date was $88.4 million, resulting in $313.5 million of cash proceeds, net of this cash transferred. In addition, Adtalem received $110.7 million from the settlement of the deal-contingent foreign currency hedge arrangement to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk. Financing Activities The following table provides a summary of cash flows from financing activities (in thousands): Repurchases of common stock for treasury Net proceeds from (repayments of) long-term debt Payment of debt issuance costs Payment for purchase of redeemable noncontrolling interest of subsidiary Other Net cash provided by (used in) financing activities-continuing operations Year Ended June 30, 2021 (100,000) 797,000 (18,047) — (2,487) 676,466 $ $ 2020 (136,889) (113,000) — (6,247) 3,493 (252,643) $ $ On November 8, 2018, we announced that the Board authorized Adtalem’s eleventh share repurchase program, which allowed Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The eleventh share repurchase program commenced in January 2019 and was completed in January 2021. On February 4, 2020, we announced that the Board authorized Adtalem’s twelfth share repurchase program, which allows Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The twelfth and current share repurchase program commenced in January 2021. As of June 30, 2021, $245.2 million of authorized share repurchases were remaining under the current share repurchase program. Repurchases under our share repurchase programs were suspended on March 12, 2020 due to the economic uncertainty caused by the COVID-19 pandemic. In November 2020, Adtalem resumed repurchases under its share repurchase programs. Repurchases were again suspended in May 2021 after achieving management’s target of $100 million in repurchases for fiscal year 2021. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 15 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs. On March 24, 2020, we executed a pay-fixed, receive-variable interest rate swap agreement (the “Swap”) with a multinational financial institution to mitigate risks associated with the variable interest rate on our Term B Loan debt. We pay interest at a fixed rate of 0.946% and receive variable interest of one-month LIBOR (subject to a minimum of 0.00%), on a notional amount equal to the amount outstanding under the Term B Loan. The effective date of the Swap was March 31, 2020 and settlements with the counterparty occur on a monthly basis. The Swap was set to terminate on February 28, 2025. During the operating term of the Swap, the annual interest rate on the amount of the Term B Loan is fixed at 3.946% (including the impact of our current 3% interest rate margin on LIBOR loans) for the applicable interest rate period. The Swap is designated as a cash flow hedge and as such, changes in its fair value are recognized in accumulated other comprehensive loss on the Consolidated Balance Sheet and are reclassified into the Consolidated Statements of Income (Loss) within interest expense in the periods in which the hedged transactions affect earnings. As of June 30, 2021, the fair value of the Swap recorded within other liabilities was a loss of $8.9 million. On July 29, 2021, prior to refinancing our Credit Agreement (as discussed below), we settled and terminated the Swap for $4.5 million, which resulted in a charge to interest expense for this amount in the first quarter of fiscal year 2022. 66 Adtalem Global Education Inc. As discussed in the previous section of this MD&A titled “Walden University Acquisition,” on August 12, 2021, Adtalem acquired all of the issued and outstanding equity interest in Walden, in exchange for a purchase price of $1.48 billion in cash, subject to certain adjustments set forth in the Agreement. On March 1, 2021, Adtalem Escrow Corporation (the “Escrow Issuer”), a wholly-owned subsidiary of Adtalem, issued $800 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028, pursuant to an indenture, dated as of March 1, 2021 (the “Indenture”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee and notes collateral agent. On February 12, 2021, Adtalem placed a $850 million senior secured term loan (“New Term Loan”) into the loan market. Funding under the New Term Loan occurred at the same time as the closing of the Acquisition. In addition, Adtalem secured a $400 million senior secured revolving loan facility (“New Revolver”) based on the commitment letter (the “Commitment Letter”) Adtalem entered into on September 11, 2020 with Morgan Stanley Senior Funding, Inc. (“MSSF”), Barclays Bank PLC (“Barclays”), Credit Suisse AG, Cayman Islands Branch (“CS”) and Credit Suisse Loan Funding LLC (“CSLF” and, together with CS and their respective affiliates, “Credit Suisse”), and MUFG Bank, Ltd. (together with MSSF, Barclays and Credit Suisse, the “Commitment Parties”). We refer to the New Revolver and New Term Loan collectively as the “New Credit Facility.” The New Credit Facility closed on August 12, 2021. The proceeds of the Notes and the New Credit Facility were used, among other things, to finance the Acquisition, refinance Adtalem’s existing credit agreement, and pay fees and expenses related to the Acquisition. The New Revolver will be used to finance ongoing working capital and for general corporate purposes. As of June 30, 2021, the amount of debt outstanding under the then effective credit facility was $291.0 million. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit agreement and the financing agreements associated with the Acquisition. Management currently projects that COVID-19 will continue to have an effect on operations and, as a result, liquidity, as discussed in the previous section of this MD&A titled “Overview of the Impact of COVID-19”; however, we believe the current balances of cash, cash generated from operations, and our New Credit Facility (as defined and discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) will be sufficient to fund both Adtalem’s current domestic and international operations and growth plans for the foreseeable future. Material Cash Requirements Long-Term Debt – We have issued $800 million of Notes and maintain a $600 million credit facility, which requires principal and interest payments. As of June 30, 2021, the amount of debt outstanding under our Credit Facility was $291.0 million. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit agreement. As discussed in the previous section of this MD&A titled “Liquidity and Capital Resources,” on August 12, 2021, an $850 million senior secured term loan was funded to provide funding for the Acquisition and repay the then existing $291.0 million senior secured Term B loan. In addition, on August 12, 2021, Adtalem secured a $400 million senior secured revolving loan facility to replace the then existing $300 million revolving loan facility. Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheet. In addition, we sublease certain space to third parties, which partially offsets the lease obligations at these facilities. See Note 11 “Leases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our lease agreements. Contingencies For a discussion of legal proceedings, see Note 20 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8 “Financial Statements and Supplementary Data.” Critical Accounting Estimates We describe our significant accounting policies in the Notes to Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue 67 2021 Form 10-Kand expenses during the reporting period. Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Management has discussed our critical accounting estimates with the Audit and Finance Committee of the Board. Although management believes its assumptions and estimates are reasonable, actual results could differ from those estimates. Although our current estimates contemplate current conditions, including the impact of COVID-19, and how we anticipate them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and financial condition. On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization, which recommended containment and mitigation measures worldwide. COVID-19 and the response of governmental and public health organizations in dealing with the pandemic included restricting general activity levels within communities, the economy, and operations of our customers. While we have experienced an impact to our business, operations, and financial results as a result of the COVID-19 pandemic, it may have even more far-reaching impacts on many aspects of our operations including the impact on customer behaviors, business operations, our employees, and the market in general. The extent to which the COVID-19 pandemic ultimately impacts our business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of COVID-19, actions taken to contain the virus, the efficacy and distribution of the vaccines, as well as, how quickly and to what extent normal economic and operating conditions can resume. Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts receivable balances as of each balance sheet date. In evaluating the collectability of all our accounts receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to estimate the amount we will collect in the future on our account receivable balances. See Note 9 “Accounts Receivable and Credit Losses” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit losses. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. Future events could lead to future impairments of long-lived assets. Goodwill and Intangible Assets Goodwill and indefinite-lived intangibles are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31. Adtalem first assesses goodwill for impairment qualitatively for each reporting unit that contains goodwill. Management analyzes factors that include results of operations and business conditions, significant changes in cash flows at the reporting unit level, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the reporting units have been impaired. If there is reason to believe the carrying value of a reporting unit exceeds its fair value, then management performs a quantitative impairment review. Adtalem uses a discounted cash flow model to compute fair value. The estimated fair values of the reporting units are based on management’s projection of revenue, gross margin, operating costs, and cash flows considering planned business and operational strategies over a long- term planning horizon of five years. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit 68 Adtalem Global Education Inc.containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent of the excess, up to the amount of goodwill recorded. For indefinite-lived intangible assets, management first analyzes qualitative factors, including results of operations and business conditions of each reporting unit that contain indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. If there is reason to believe the carrying value of an intangible asset exceeds its fair value, then management performs a quantitative impairment review. In calculating fair value, Adtalem uses various valuation techniques including a royalty rate model for trade names and intellectual property and a discounted cash flow model for Title IV eligibility and accreditation. The estimated fair values of these indefinite-lived intangible assets are based on management’s projection of revenue, gross margin, operating costs, and cash flows considering planned business and operational strategies over a long-term planning horizon of five years. The assumed royalty rates and the growth rates used to project cash flows and operating results are based upon historical results and analysis of the economic environment in which the reporting units that record indefinite-lived intangible assets operate. The valuations employ present value techniques to measure fair value and consider market factors. Management believes the assumptions used for the impairment testing are consistent with those that would be utilized by a market participant in performing similar valuations of its indefinite-lived intangible assets. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess. For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Intangible assets with finite lives are amortized over their expected economic lives, ranging from 5 to 10 years. All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates, which could lead to future impairments of goodwill or intangible assets. See Note 12 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our goodwill and intangible assets impairment analysis. Income Taxes Adtalem accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Adtalem also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Adtalem’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Adtalem measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which Adtalem expects to recover or settle the temporary differences. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions Adtalem has taken. Contingencies Adtalem is subject to contingencies, such as various claims and legal actions that arise in the normal conduct of its business. We record an accrual for those matters where management believes a loss is probable and can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters. The valuation of liabilities for these contingencies is reviewed on a quarterly basis to ensure that we have accrued the proper level of expense. While we believe 69 2021 Form 10-Kthat the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 20 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our loss contingencies. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” Non-GAAP Financial Measures and Reconciliations We believe that certain non-GAAP financial measures provides investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations and is useful for period-over- period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in this Annual Report on Form 10-K: Net income from continuing operations attributable to Adtalem excluding special items (most comparable GAAP measure: net income (loss) attributable to Adtalem) – Measure of Adtalem’s net income (loss) attributable to Adtalem adjusted for restructuring expense, business acquisition and integration expense, pre-acquisition interest expense, gain on sale of assets, settlement gains, gain on derivative, tax charges related to the implementation of the Tax Act and the divestiture of DeVry University, a net tax benefit for a former subsidiary investment loss, and loss from discontinued operations. Earnings per share from continuing operations excluding special items (most comparable GAAP measure: earnings (loss) per share) – Measure of Adtalem’s diluted earnings (loss) per share adjusted for restructuring expense, business acquisition and integration expense, pre-acquisition interest expense, gain on sale of assets, settlement gains, gain on derivative, tax charges related to the implementation of the Tax Act and the divestiture of DeVry University, a net tax benefit for a former subsidiary investment loss, and loss from discontinued operations. Operating income excluding special items (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business acquisition and integration expense, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Effective income tax rate from continuing operations excluding special items (most comparable GAAP measure: effective income tax rate from continuing operations) – Measure of Adtalem’s effective tax rate adjusted for tax effect on gain on derivative and a net tax benefit for a former subsidiary investment loss. A description of special items in our non-GAAP financial measures described above are as follows:  Restructuring charges primarily related to real estate consolidations at Adtalem’s home office and ACAMS, the write-down of EduPristine’s assets, the sale of Becker’s courses for healthcare students, workforce reductions across the organization, and the closing of the RUSM campus in Dominica.  Business acquisition and integration expense include expenses related to the Walden University acquisition.  Pre-acquisition interest expense related to financing arrangements in connection with the Walden University acquisition.  Gain on the sale of Adtalem’s Columbus, Ohio, campus facility.  Settlement gains related to the final insurance settlement related to Hurricanes Irma and Maria at AUC and RUSM and a lawsuit settlement against the Adtalem Board of Directors.  Gain on the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil completed on April 24, 2020 to economically hedge the Brazilian Real denominated purchase price through mitigation of the currency exchange rate risk.  Tax charges related to the implementation of the Tax Act and the divestiture of DeVry University.  A net tax benefit for a former subsidiary investment loss. 70 Adtalem Global Education Inc. Loss from discontinued operations include the operations of Adtalem Brazil, Carrington, and DeVry University. The following tables provide a reconciliation from the most directly comparable GAAP measure to these non-GAAP financial measures. The operating income reconciliation is included in the results of operations section within this MD&A. Net income (loss) attributable to Adtalem reconciliation to net income from continuing operations attributable to Adtalem excluding special items (in thousands): 2021 76,909 $ 2019 95,168 53,067 — — — (26,178) — Year Ended June 30, 2020 (85,334) $ 28,628 — — (4,779) — (110,723) $ Net income (loss) attributable to Adtalem (GAAP) Restructuring expense Business acquisition and integration expense Pre-acquisition interest expense Gain on sale of assets Settlement gains Gain on derivative Tax Cuts and Jobs Act of 2017 and tax charges related to the divestiture of DeVry University Net tax benefit for a former subsidiary investment loss Income tax impact on non-GAAP adjustments (1) Loss from discontinued operations Net income from continuing operations attributable to Adtalem excluding special items (non-GAAP) 136,160 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP 9,804 31,593 26,746 — — — (2,230) (25,688) (5,648) 329,315 — — (16,501) 25,127 3,584 — (1,560) 12,079 153,678 $ 123,541 $ $ financial statements. Earnings (loss) per share reconciliation to earnings per share from continuing operations excluding special items (shares in thousands): Earnings (loss) per share, diluted (GAAP) Effect on diluted earnings per share: Restructuring expense Business acquisition and integration expense Pre-acquisition interest expense Gain on sale of assets Settlement gains Gain on derivative Tax Cuts and Jobs Act of 2017 and tax charges related to the divestiture of DeVry University Net tax benefit for a former subsidiary investment loss Income tax impact on non-GAAP adjustments (1) Loss from discontinued operations 2021 Year Ended June 30, 2020 2019 $ 1.49 $ (1.58) $ 1.60 0.19 0.61 0.52 - - - - - (0.32) 0.49 0.53 - - (0.09) - (2.05) (0.04) (0.47) (0.10) 6.09 0.89 - - - (0.44) - 0.06 - (0.03) 0.20 Earnings per share from continuing operations excluding special 2.29 items, diluted (non-GAAP) Diluted shares used in EPS calculation 59,330 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP 2.98 $ 2.28 $ 51,645 54,094 $ financial statements. 71 2021 Form 10-K Effective income tax rate from continuing operations reconciliation to effective income tax rate from continuing operations excluding special items (in thousands): Pre-tax results: Income from continuing operations before income taxes (GAAP) Gain on derivative Income from continuing operations before income taxes excluding special items (non-GAAP) $ 126,850 $ 237,179 $ 139,747 — (110,723) — $ 126,850 $ 126,456 $ 139,747 Year Ended June 30, 2020 2021 2019 Taxes: (Provision for) benefit from income taxes (GAAP) Net tax benefit for a former subsidiary investment loss Provision for income taxes excluding special items (non-GAAP) Tax rate: Effective income tax rate (GAAP) Effective income tax rate excluding special items (non-GAAP) $ (25,248) $ 6,358 $ (32,878) — $ (25,248) $ (19,330) $ (32,878) (25,688) — 19.9 % 19.9 % (2.7)% 15.3 % 23.5 % 23.5 % The calculation of the effective income tax rate from continuing operations excluding special items in this MD&A does not include all of the same special items used in our calculation of net income from continuing operations excluding special items because we do not include all the special item adjustments from our GAAP results in discussing our effective tax rates in this MD&A discussion. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Adtalem is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities. However, more than 50% of Adtalem’s costs are in the form of wages and benefits. Changes in employment market conditions or escalations in employee benefit costs could cause Adtalem to experience cost increases at levels beyond what it has historically experienced. The financial position and results of operations of AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. Substantially all of their financial transactions are denominated in the U.S. dollar. The interest rate on Adtalem’s Credit Facility is based upon LIBOR or a LIBOR-equivalent rate for Eurocurrency rate loans or a base rate for periods typically ranging from one to three months. As of June 30, 2021, Adtalem had $291.0 million in outstanding borrowings under the Term B Loan with an interest rate of 3.10%. Based upon borrowings of $291.0 million, a 100 basis point increase in short-term interest rates would result in $2.9 million of additional annual interest expense. Adtalem’s cash is held in accounts at various large, financially secure depository institutions. Although the amount on deposit at a given institution typically will exceed amounts subject to guarantee, Adtalem has not experienced any deposit losses to date, nor does management expect to incur such losses in the future. On March 24, 2020, we executed a pay-fixed, receive-variable interest rate swap agreement (the “Swap”) with a multinational financial institution to mitigate risks associated with the variable interest rate on our Term B Loan debt. We pay interest at a fixed rate of 0.946% and receive variable interest of one-month LIBOR (subject to a minimum of 0.00%), on a notional amount equal to the amount outstanding under the Term B Loan. The effective date of the Swap was March 31, 2020 and settlements with the counterparty occur on a monthly basis. The Swap was set to terminate on February 28, 2025. During the operating term of the Swap, the annual interest rate on the amount of the Term B Loan is fixed at 3.946% (including the impact of our current 3% interest rate margin on LIBOR loans) for the applicable interest rate period. The Swap is designated as a cash flow hedge and as such, changes in its fair value are recognized in accumulated other comprehensive loss on the Consolidated Balance Sheet and are reclassified into the Consolidated Statements of Income 72 Adtalem Global Education Inc. (Loss) within interest expense in the periods in which the hedged transactions affect earnings. As of June 30, 2021, the fair value of the Swap recorded within other liabilities was a loss of $8.9 million. As of June 30, 2021, a 100 basis point increase in short-term interest rates would result in a $10.6 million change in value of the Swap. On July 29, 2021, prior to refinancing our Credit Agreement, we settled and terminated the Swap for $4.5 million, which resulted in a charge to interest expense for this amount in the first quarter of fiscal year 2022. Interest on our Credit Facility and New Credit Facility is set based on LIBOR, which is based on observable market transactions. The U.K. Financial Conduct Authority, which regulates LIBOR, has announced that it has commitments from panel banks to continue to contribute to LIBOR through the end of calendar year 2021, but that it will not use its powers to compel contributions beyond such date. Various parties, including government agencies, are seeking to identify an alternative rate to replace LIBOR. Management is monitoring their efforts, and evaluating the need for an amendment to the Credit Agreement to accommodate a replacement rate. The Credit Agreement and New Credit Facility does not specify a replacement rate for LIBOR. Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements and Financial Statement Schedule Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of June 30, 2021 and 2020 Consolidated Statements of Income (Loss) for the years ended June 30, 2021, 2020, and 2019 Consolidated Statements of Comprehensive Income for the years ended June 30, 2021, 2020, and 2019 Consolidated Statements of Cash Flows for the years ended June 30, 2021, 2020, and 2019 Consolidated Statements of Shareholders’ Equity for the years ended June 30, 2021, 2020, and 2019 Notes to Consolidated Financial Statements Financial Statement Schedule - Schedule II, Valuation and Qualifying Accounts Page 74 76 77 78 79 80 81 122 73 2021 Form 10-K Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Adtalem Global Education Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Adtalem Global Education Inc. and its subsidiaries (the “Company”) as of June 30, 2021 and 2020, and the related consolidated statements of income (loss), comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended June 30, 2021, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended June 30, 2021 listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2020. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 74 Adtalem Global Education Inc. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for Income Taxes As described in Notes 2 and 7 to the consolidated financial statements, the Company is subject to income taxes in the U.S. federal jurisdiction and in various state and foreign jurisdictions based on existing tax laws and incentives. Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Management also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Management measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which management expects to recover or settle the temporary differences. Management reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions management has taken. The Company recorded a provision for income taxes of $25.2 million for the year ended June 30, 2021 and had net deferred income tax assets of $22.5 million and net deferred income tax liabilities of $27.0 million, as of June 30, 2021. The Company’s total amount of gross unrecognized tax benefits for uncertain tax positions was $10.4 million as of June 30, 2021. The principal considerations for our determination that performing procedures relating to accounting for income taxes is a critical audit matter are the significant audit effort in evaluating audit evidence relating to the accounting for income taxes. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the accounting for income taxes. These procedures also included, among others, (i) testing the income tax provision, including the effective tax rate reconciliation and application of relevant tax laws and incentives; (ii) testing the underlying data used in measuring and recognizing deferred income tax assets and liabilities; and (iii) evaluating the weight of available evidence for uncertain tax positions. /s/ PricewaterhouseCoopers LLP Chicago, Illinois August 19, 2021 We have served as the Company’s auditor since 1991. 75 2021 Form 10-KAdtalem Global Education Inc. Consolidated Balance Sheets (in thousands, except par value) Assets: Current assets: Cash and cash equivalents Restricted cash Accounts receivable, net Prepaid expenses and other current assets Total current assets Noncurrent assets: Property and equipment, net Operating lease assets Deferred income taxes Intangible assets, net Goodwill Other assets, net Total noncurrent assets Total assets Liabilities and shareholders' equity: Current liabilities: Accounts payable Accrued payroll and benefits Accrued liabilities Deferred revenue Current operating lease liabilities Current portion of long-term debt Total current liabilities Noncurrent liabilities: Long-term debt Long-term operating lease liabilities Deferred income taxes Other liabilities Total noncurrent liabilities Total liabilities Commitments and contingencies (Note 20) Redeemable noncontrolling interest Shareholders' equity: Common stock, $0.01 par value per share, 200,000 shares authorized; 49,253 and 51,871 shares outstanding as of June 30, 2021 and June 30, 2020, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 31,846 and 28,794 shares as of June 30, 2021 and June 30, 2020, respectively Total shareholders' equity Total liabilities and shareholders' equity $ $ $ June 30, 2021 2020 494,613 819,003 67,996 133,341 1,514,953 297,237 168,943 22,479 276,249 686,374 87,601 1,538,883 3,053,836 56,071 64,452 129,258 100,697 55,329 3,000 408,807 1,067,711 167,855 26,991 79,612 1,342,169 1,750,976 $ $ $ 500,516 589 87,042 104,619 692,766 286,102 174,935 22,277 287,514 686,214 78,879 1,535,921 2,228,687 46,484 48,835 104,431 91,589 51,644 3,000 345,983 286,115 176,032 24,975 82,309 569,431 915,414 1,790 2,852 811 519,826 2,005,105 (7,365) (1,217,307) 1,301,070 3,053,836 807 504,434 1,927,568 (9,055) (1,113,333) 1,310,421 2,228,687 $ $ See accompanying notes to consolidated financial statements. 76 Adtalem Global Education Inc. Adtalem Global Education Inc. Consolidated Statements of Income (Loss) (in thousands, except per share data) Revenue Operating cost and expense: Cost of educational services Student services and administrative expense Restructuring expense Business acquisition and integration expense Gain on sale of assets Settlement gains Total operating cost and expense Operating income Other income (expense): Interest and dividend income Interest expense Investment gain (loss) Gain on derivative Net other (expense) income Income from continuing operations before income taxes (Provision for) benefit from income taxes Income from continuing operations Discontinued operations: (Loss) income from discontinued operations before income taxes Loss on disposal of discontinued operations before income taxes (includes ($293,360) accumulated other comprehensive income reclassifications for realized loss on foreign currency translation adjustments for the year ended June 30, 2020) Benefit from income taxes Loss from discontinued operations Net income (loss) Net loss attributable to redeemable noncontrolling interest from continuing operations Net income attributable to redeemable noncontrolling interest from discontinued operations Net income (loss) attributable to Adtalem Global Education Amounts attributable to Adtalem Global Education: Net income from continuing operations Net loss from discontinued operations Net income (loss) attributable to Adtalem Global Education Earnings (loss) per share attributable to Adtalem Global Education: Basic: Continuing operations Discontinued operations Net Diluted: Continuing operations Discontinued operations Net Weighted-average shares outstanding: Basic shares Diluted shares 2021 $ 1,112,380 Year Ended June 30, 2020 $ 1,052,001 2019 $ 1,013,843 489,233 420,267 9,804 31,593 — — 950,897 161,483 4,094 (41,365) 2,638 — (34,633) 126,850 (25,248) 101,602 490,054 395,838 28,628 — (4,779) — 909,741 142,260 3,688 (19,510) 18 110,723 94,919 237,179 6,358 243,537 471,782 359,342 53,067 — — (26,178) 858,013 155,830 3,968 (19,898) (153) — (16,083) 139,747 (32,878) 106,869 (33,946) (62,578) 15,803 — 8,819 (25,127) 76,475 434 — 76,909 102,036 (25,127) 76,909 1.99 (0.49) 1.50 1.98 (0.49) 1.49 (287,560) 20,823 (329,315) (85,778) 444 — (85,334) 243,981 (329,315) (85,334) 4.55 (6.14) (1.59) 4.51 (6.09) (1.58) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ (33,604) 6,513 (11,288) 95,581 378 (791) 95,168 107,247 (12,079) 95,168 1.83 (0.21) 1.63 1.81 (0.20) 1.60 $ $ $ $ $ $ $ $ $ 51,322 51,645 53,659 54,094 58,540 59,330 See accompanying notes to consolidated financial statements. 77 2021 Form 10-K Adtalem Global Education Inc. Consolidated Statements of Comprehensive Income (in thousands) Net income (loss) Other comprehensive income (loss), net of tax Gain (loss) on foreign currency translation adjustments Unrealized (loss) gain on available-for-sale marketable securities Unrealized gain (loss) on interest rate swap Comprehensive income (loss) before reclassification Reclassification adjustment for unrealized gain on available-for-sale marketable securities Reclassification adjustment for realized loss on foreign currency translation adjustments Comprehensive income Comprehensive loss (income) attributable to redeemable noncontrolling interest Comprehensive income attributable to Adtalem Global Education Year Ended June 30, 2020 2021 2019 $ 76,475 $ (85,778) $ 95,581 713 (57) 1,160 78,291 (157,354) 84 (7,855) (250,903) 5,185 74 — 100,840 (126) — — — 78,165 293,360 42,457 — 100,840 434 $ 78,599 $ 444 (471) 42,901 $ 100,369 See accompanying notes to consolidated financial statements. 78 Adtalem Global Education Inc. Adtalem Global Education Inc. Consolidated Statements of Cash Flows (in thousands) 2021 Year Ended June 30, 2020 2019 $ $ 76,475 25,127 101,602 $ (85,778) 329,315 243,537 Operating activities: Net income (loss) Loss from discontinued operations Income from continuing operations Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation expense Amortization and adjustments to operating lease assets Depreciation Amortization of intangible assets Amortization of debt issuance costs Impairment of intangible assets Reclassification adjustment from other comprehensive income Provision for bad debts Deferred income taxes Loss on disposals, accelerated depreciation, and adjustments to property and equipment Realized and unrealized (gain) loss on investments Realized gain on sale of assets Insurance settlement gain Gain on derivative Changes in assets and liabilities: Accounts receivable Prepaid expenses and other current assets Accounts payable Accrued payroll and benefits Accrued liabilities Deferred revenue Operating lease liabilities Other assets and liabilities Net cash provided by operating activities-continuing operations Net cash (used in) provided by operating activities-discontinued operations Net cash provided by operating activities Investing activities: Capital expenditures Insurance proceeds received for damage to buildings and equipment Proceeds from sales of marketable securities Purchases of marketable securities Proceeds from sale of assets Cash received on settlement of derivative Cash received on purchase price adjustment Payment for purchase of businesses, net of cash acquired Loan to DeVry University Net cash (used in) provided by investing activities-continuing operations Net cash used in investing activities-discontinued operations Proceeds from sale of business, net of cash transferred Cash and restricted cash transferred in divestitures of discontinued operations Net cash (used in) provided by investing activities Financing activities: Proceeds from exercise of stock options Employee taxes paid on withholding shares Proceeds from stock issued under Colleague Stock Purchase Plan Repurchases of common stock for treasury Proceeds from long-term debt Repayments of long-term debt Payment of debt issuance costs Proceeds from down payment on seller loan Payment for purchase of redeemable noncontrolling interest of subsidiary Net cash provided by (used in) financing activities-continuing operations Net cash used in financing activities-discontinued operations Net cash provided by (used in) financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period Less: cash, cash equivalents and restricted cash of discontinued operations at end of period Cash, cash equivalents and restricted cash at end of period Supplemental cash flow disclosure: Cash paid during the year for: Interest Income taxes, net (Decrease) increase in redemption value of noncontrolling interest put option $ $ $ $ See accompanying notes to consolidated financial statements. 13,875 51,380 37,598 10,073 2,657 1,211 (126) 11,573 1,519 1,912 (2,638) — — — 13,259 (18,135) 8,530 15,646 29,740 9,108 (49,880) (15,746) 223,158 (30,959) 192,199 (48,664) — 2,721 (10,745) — — — — — (56,688) — — — (56,688) 1,457 (4,206) 262 (100,000) 800,000 (3,000) (18,047) — — 676,466 — 676,466 534 812,511 501,105 1,313,616 — 1,313,616 14,429 26,431 (628) $ $ $ $ 14,584 54,716 34,428 10,262 1,566 — — 16,152 (4,548) 4,564 (18) (4,779) — (110,723) (12,840) (17,612) (6,340) 2,173 (2,477) (4,355) (53,726) (14,999) 149,565 (41,873) 107,692 (44,137) — 2,829 (3,015) 6,421 110,723 92 — — 72,913 (3,908) 313,518 — 382,523 3,761 (5,485) 17 (136,889) 225,000 (338,000) — 5,200 (6,247) (252,643) (3,466) (256,109) (33,468) 200,638 300,467 501,105 — 501,105 20,156 12,442 — $ $ $ $ 95,581 11,288 106,869 13,217 — 33,759 6,947 1,566 — — 9,817 20,752 42,459 153 — (15,571) — (21,123) 1,276 8,104 (3,350) 7,719 (6,058) — (21,082) 185,454 19,404 204,858 (57,574) 35,706 1,841 (6,321) — — — (118,409) (10,000) (154,757) (9,010) — (50,069) (213,836) 16,994 (6,801) 421 (252,852) 135,000 (28,000) — — — (135,238) (2,295) (137,533) 2,573 (143,938) 444,405 300,467 95,243 205,224 20,410 3,230 20 79 2021 Form 10-K Adtalem Global Education Inc. Consolidated Statements of Shareholders’ Equity (in thousands) June 30, 2018 Cumulative effect adjustment upon the adoption of ASU 2016‑01 Net income attributable to Adtalem Global Education Other comprehensive income, net of tax Change in redeemable noncontrolling interest put option Stock-based compensation Net activity from stock-based compensation awards Proceeds from stock issued under Colleague Stock Purchase Plan Repurchases of common stock for treasury June 30, 2019 Net loss attributable to Adtalem Global Education Other comprehensive loss, net of tax Reclassification adjustment for realized loss on foreign currency translation adjustments Stock-based compensation Net activity from stock-based compensation awards Proceeds from stock issued under Colleague Stock Purchase Plan Repurchases of common stock for treasury June 30, 2020 Net income attributable to Adtalem Global Education Other comprehensive income, net of tax Reclassification adjustment for unrealized gain on available-for-sale marketable securities Change in redeemable noncontrolling interest put option Stock-based compensation Net activity from stock-based compensation awards Proceeds from stock issued under Colleague Stock Purchase Plan Repurchases of common stock for treasury June 30, 2021 Additional Paid-In Retained Comprehensive Accumulated Other Common Stock Shares Amount Capital Earnings 79,283 $ 793 $ 454,653 $ 1,917,373 $ Treasury Stock Loss (142,168) 19,390 $ (711,365) $ 1,519,286 Shares Amount Total 381 (381) 95,168 (20) 5,259 14,075 — 95,168 5,259 (20) 14,075 849 8 17,245 143 (7,060) 10,193 80,132 88 801 486,061 2,012,902 (85,334) (9) 5,306 (137,290) 24,830 421 333 (252,852) (252,852) (970,944) 1,391,530 (165,125) 293,360 14,713 (85,334) (165,125) 293,360 14,713 533 6 3,668 127 (5,527) (1,853) 80,665 (8) 807 504,434 1,927,568 76,909 13,880 628 19 (136,889) (9,055) 28,794 (1,113,333) 1,310,421 27 (136,889) (1) 3,838 1,816 (126) 76,909 1,816 (126) 628 13,880 434 4 1,561 131 (4,314) (2,749) (49) 811 $ 519,826 $ 2,005,105 $ 291 (100,000) (7,365) 31,846 $ (1,217,307) $ 1,301,070 340 (100,000) (9) 2,930 81,099 $ See accompanying notes to consolidated financial statements. 80 Adtalem Global Education Inc. Adtalem Global Education Inc. Notes to Consolidated Financial Statements Table of Contents Nature of Operations Summary of Significant Accounting Policies Acquisitions Discontinued Operations and Assets Held for Sale Revenue Restructuring Charges Income Taxes Earnings per Share Accounts Receivable and Credit Losses Property and Equipment, Net Leases Note 1 2 3 4 5 6 7 8 9 10 11 12 Goodwill and Intangible Assets 13 Debt 14 Redeemable Noncontrolling Interest 15 16 Accumulated Other Comprehensive Loss Stock-Based Compensation 17 Employee Benefit Plans 18 19 Fair Value Measurements 20 Commitments and Contingencies 21 22 Segment Information Subsequent Event Share Repurchases Page 82 82 87 88 89 92 93 97 97 100 100 102 105 109 110 111 111 113 114 116 118 121 81 2021 Form 10-K 1. Nature of Operations In this Annual Report on Form 10-K, Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references. Adtalem is a leading workforce solutions provider. 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 University (“Chamberlain”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“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 the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker”), OnCourse Learning (“OCL”), and EduPristine. On August 4, 2021, Adtalem announced we are exploring strategic alternatives for the Financial Services segment. “Home Office and Other” includes activities not allocated to a reportable segment. See Note 21 “Segment Information” for additional information. Adtalem Education of Brazil (“Adtalem Brazil”), Carrington College (“Carrington”), and DeVry University are presented as discontinued operations and assets held for sale in all periods presented as applicable. See Note 4 “Discontinued Operations and Assets Held for Sale” for additional information. On August 12, 2021, Adtalem acquired all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company (together with e-Learning, “Walden”), from Laureate Education, Inc. (“Laureate” or “Seller”) in exchange for a purchase price of $1.48 billion in cash, subject to certain adjustments set forth in the Membership Interest Purchase Agreement (the “Agreement) (the “Acquisition”). Business acquisition and integration costs incurred for this transaction in fiscal year 2021 was $31.6 million. See Note 22 “Subsequent Event” for additional information. 2. Summary of Significant Accounting Policies For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in the related note. Other significant accounting policies are described below. Principles of Consolidation The Consolidated Financial Statements include the accounts of Adtalem and its controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Where our ownership interest is less than 100%, but greater than 50%, the noncontrolling ownership interest is reported on our Consolidated Balance Sheets. The noncontrolling ownership interest earnings portion is classified as “net loss (income) attributable to redeemable noncontrolling interest” in our Consolidated Statements of Income (Loss). Unless indicated, or the context requires otherwise, references to years refer to Adtalem’s fiscal years. Certain prior periods amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 82 Adtalem Global Education Inc.Although our current estimates contemplate current conditions, including the impact of the novel coronavirus (“COVID- 19”) pandemic, and how we anticipate them to change in the future, as appropriate, it is reasonably possible that actual conditions could differ from what was anticipated in those estimates, which could materially affect our results of operations and financial condition. On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization, which recommended containment and mitigation measures worldwide. COVID-19 and the response of governmental and public health organizations in dealing with the pandemic included restricting general activity levels within communities, the economy, and operations of our customers. While we have experienced an impact to our business, operations, and financial results as a result of the COVID-19 pandemic, it may have even more far-reaching impacts on many aspects of our operations including the impact on customer behaviors, business operations, our employees, and the market in general. The extent to which the COVID-19 pandemic ultimately impacts our business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current estimates due to inherent uncertainties regarding the duration and further spread of COVID-19, actions taken to contain the virus, the efficacy and distribution of the vaccines, as well as, how quickly and to what extent normal economic and operating conditions can resume. Cash and Cash Equivalents Cash and cash equivalents consists of highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximate fair value. We maintain cash and cash equivalent balances that exceed federally-insured limits. We have not experienced any losses on our cash and cash equivalents. Restricted Cash Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in Adtalem’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized. See Note 13 “Debt” for information related to funds held in an escrow account to fund the Acquisition and is recorded within restricted cash on the Consolidated Balance Sheet as of June 30, 2021. Property and Equipment Property and equipment, net, is recorded at cost and is depreciated on the straight-line method. Cost includes additions and those improvements that enhance performance, increase the capacity, or lengthen the useful lives of the assets. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing computer software applications for internal use, are capitalized. Repairs and maintenance costs are expensed as incurred. Upon sale or retirement of an asset, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in income. Assets under construction are reflected in construction in progress until they are placed into service for their intended use. Leasehold improvements are amortized using the straight-line method over the term of the lease or the estimated useful life of the asset, whichever is shorter. Depreciation is computed using the straight-line method over estimated service lives. These lives range from 5 to 40 years for buildings and leasehold improvements, and from 3 to 8 years for computers, furniture, and equipment. See Note 10 “Property and Equipment, Net” for additional information. Goodwill and Intangible Assets Goodwill and indefinite-lived intangibles are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31. 83 2021 Form 10-KAdtalem first assesses goodwill for impairment qualitatively for each reporting unit that contains goodwill. Management analyzes factors that include results of operations and business conditions, significant changes in cash flows at the reporting unit level, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the reporting units have been impaired. If there is reason to believe the carrying value of a reporting unit exceeds its fair value, then management performs a quantitative impairment review. Adtalem uses a discounted cash flow model to compute fair value. The estimated fair values of the reporting units are based on management’s projection of revenue, gross margin, operating costs, and cash flows considering planned business and operational strategies over a long- term planning horizon of five years. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent of the excess, up to the amount of goodwill recorded. For indefinite-lived intangible assets, management first analyzes qualitative factors, including results of operations and business conditions of each reporting unit that contain indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. If there is reason to believe the carrying value of an intangible asset exceeds its fair value, then management performs a quantitative impairment review. In calculating fair value, Adtalem uses various valuation techniques including a royalty rate model for trade names and intellectual property and a discounted cash flow model for Title IV eligibility and accreditation. The estimated fair values of these indefinite-lived intangible assets are based on management’s projection of revenue, gross margin, operating costs, and cash flows considering planned business and operational strategies over a long-term planning horizon of five years. The assumed royalty rates and the growth rates used to project cash flows and operating results are based upon historical results and analysis of the economic environment in which the reporting units that record indefinite-lived intangible assets operate. The valuations employ present value techniques to measure fair value and consider market factors. Management believes the assumptions used for the impairment testing are consistent with those that would be utilized by a market participant in performing similar valuations of its indefinite-lived intangible assets. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess. For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Intangible assets with finite lives are amortized over their expected economic lives, ranging from 5 to 10 years. All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates, which could lead to future impairments of goodwill or intangible assets. See Note 12 “Goodwill and Intangible Assets” for additional information on our goodwill and intangible assets impairment analysis. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset, the amount of the impairment is the difference between the carrying amount and the fair value of the asset. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. For a discussion of long-lived asset impairments, see Note 10 “Property and Equipment, Net.” 84 Adtalem Global Education Inc.Treasury Stock Shares that are repurchased by Adtalem under its share repurchase programs are recorded as treasury stock at cost and result in a reduction in shareholders’ equity. See Note 15 “Share Repurchases” for additional information. From time to time, shares of our common stock are delivered back to Adtalem under a swap arrangement resulting from employees’ exercise of incentive stock options pursuant to the terms of the Adtalem Stock Incentive Plans (see Note 17 “Stock-Based Compensation”). In addition, shares of our common stock are delivered back to Adtalem for payment of withholding taxes from employees for vesting restricted stock units (“RSUs”). These shares are recorded as treasury stock at cost and result in a reduction in shareholders’ equity. Treasury shares are reissued at market value, less a 10% discount, to the Adtalem Colleague Stock Purchase Plan in exchange for employee payroll deductions. The 10% discount is considered compensatory and recorded as an expense in the income statement. When treasury shares are reissued, Adtalem uses an average cost method to reduce the treasury stock balance. Gains on the difference between the average cost and the reissuance price, less the amount recorded as expense, are credited to additional paid-in capital. Losses on the difference are charged to additional paid-in capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to retained earnings. Earnings per Common Share Basic earnings per share (“EPS”) is computed by dividing net income or loss attributable to Adtalem by the weighted- average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income or loss attributable to Adtalem by diluted weighted-average number of shares outstanding during the period. Diluted shares are computed using the treasury stock method and reflect the additional shares that would be outstanding if dilutive stock- based grants were exercised during the period. Diluted EPS considers the impact of potentially dilutive securities, except in periods in which there is a loss from continuing operations, because the inclusion of the potential common shares would have an antidilutive effect. Income Taxes Adtalem accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Adtalem also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Adtalem’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Adtalem measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which Adtalem expects to recover or settle the temporary differences. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions Adtalem has taken. Restructuring Charges Adtalem’s financial statements include charges related to severance and related benefits for workforce reductions. These charges also include impairments on operating lease assets, losses on disposals of property and equipment related to campus and administrative office consolidations, and a write-down of EduPristine’s assets (see Note 6 “Restructuring Charges”). When estimating the costs of exiting lease space, estimates are made which could differ materially from actual results and result in additional restructuring charges or reversals in future periods. Advertising Costs Advertising costs are expensed when incurred and totaled $92.9 million, $82.6 million, and $72.0 million for the years ended June 30, 2021, 2020, and 2019, respectively. Advertising costs are included in student services and administrative expense in the Consolidated Statements of Income (Loss). 85 2021 Form 10-KHurricane Expense In September 2017, Hurricanes Irma and Maria caused damage and disrupted operations at AUC and RUSM. Adtalem recorded expense of $12.5 million in the year ended June 30, 2019 associated with incremental costs of teaching at alternative sites. Insurance proceeds of $12.5 million were recorded in the year ended June 30, 2019. In total, no net expense related to the hurricanes was recorded in the year ended June 30, 2019, 2020, or 2021. During the second quarter of fiscal year 2019, Adtalem received the final insurance proceeds for damages from Hurricanes Irma and Maria and recorded a pre-tax gain of $15.6 million in the year ended June 30, 2019. The total proceeds received from insurance settlements were in excess of expense recorded for hurricane-related evacuation processes, temporary housing, and transportation of students, faculty and staff, and incremental costs of teaching at alternative sites, less deductibles. The resulting excess proceeds of $35.7 million were applied against asset damages and capital repairs and replacement in the second quarter of fiscal year 2019, which requires classification of the gain as an investing activity in the Consolidated Statements of Cash Flows. Settlement Gains Adtalem recorded a $10.6 million gain in the fourth quarter of fiscal year 2019 related to a lawsuit settlement against the Adtalem Board of Directors. Settlement gains in the Consolidated Statement of Income were $26.2 million for the year ended June 30, 2019, which includes the hurricane insurance settlement of $15.6 million discussed above. Foreign Currency Translation The financial position and results of operations of the AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. Adtalem Brazil’s and EduPristine’s operations and Becker’s and ACAMS’s international operations are measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resulting translation adjustments are recorded as foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income. Transaction gains or losses during each of the fiscal years presented were not material. Recent Accounting Standards Recently adopted accounting standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The guidance was issued to provide financial statement users with more decision-useful information about the expected losses on financial instruments by replacing the incurred loss impairment methodology with a methodology that reflects expected credit losses by requiring a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We adopted this guidance, along with the related clarifications and improvements, effective July 1, 2020 using the modified-retrospective approach without adjusting prior comparative periods. The adoption of this standard did not have a material impact on Adtalem’s Consolidated Financial Statements, and therefore, no adjustments were made to retained earnings. In February 2016, the FASB issued ASU No. 2016-02: “Leases (Topic 842).” This guidance was issued to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We adopted this guidance, along with the related clarifications and improvements, effective July 1, 2019 using the modified retrospective approach without adjusting prior comparative periods. The adoption of this standard significantly impacts our Consolidated Balance Sheets, but did not impact our Consolidated Statements of Income (Loss). We elected the practical expedients package which allows us to forego reassessing (i) whether any expired or existing contracts are or contain leases; (ii) the lease classification for any expired or expiring leases; and (iii) initial direct costs for any existing leases. 86 Adtalem Global Education Inc.We did not elect the hindsight practical expedient, which permits the use of hindsight when determining the lease term and impairment of operating lease assets. See Note 11 “Leases” for the disclosures related to this new accounting standard. Recently issued accounting standards not yet adopted We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our consolidated financial statements. 3. Acquisitions OnCourse Learning On May 31, 2019, Adtalem completed the acquisition of 100% of the equity interests of OCL for $118.3 million, net of cash of $1.2 million. Adtalem paid $118.4 million for this purchase during the fourth quarter of fiscal year 2019, and funded the purchase with available domestic cash balances and $100 million in borrowings under Adtalem’s revolving credit facility. Adtalem received $0.1 million related to a net working capital adjustment during the second quarter of fiscal year 2020. OCL is a leading provider of compliance training, licensure preparation, continuing education and professional development in the banking and mortgage industries across the U.S. The acquisition furthers Adtalem’s growth strategy into financial services. The operations of OCL are included in Adtalem’s Financial Services segment. The results of OCL’s operations have been included in the Consolidated Financial Statements of Adtalem since the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Current assets Property and equipment Intangible assets Goodwill Total assets acquired Liabilities assumed Net assets acquired May 31, 2019 5,260 1,197 63,100 59,427 128,984 9,445 119,539 $ $ Goodwill, which represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired, was all assigned to the Financial Services reporting unit and reportable segment. Factors that contributed to a purchase price resulting in the recognition of goodwill include OCL’s strategic fit into Adtalem’s expanding presence in financial services, the reputation of the OCL brand as a leader in the industry and potential future growth opportunity. Of the $63.1 million of acquired intangible assets, $18.4 million was assigned to trade names, which has been determined not to be subject to amortization. The remaining acquired intangible assets were determined to be subject to amortization with an average useful life of approximately nine years. The values and estimated useful lives by asset type at the date of acquisition are as follows (in thousands): Customer relationships Curriculum Course delivery technology May 31, 2019 Value Assigned $ 26,400 11,600 6,700 Estimated Useful Life 11 years 6 years 5 years 87 2021 Form 10-K The most significant identified intangible asset, customer relationships, was valued using the multi-period excess earnings method under the income approach. We applied judgment which involved the use of significant assumptions with respect to the discount rate and the terminal growth rate. There is no proforma presentation of operating results for this acquisition due to the insignificant effect on consolidated operations. 4. Discontinued Operations and Assets Held for Sale On December 4, 2018, Adtalem completed the sale of Carrington to San Joaquin Valley College, Inc. (“SJVC”) for de minimis consideration. As the sale represented a strategic shift that had a major effect on Adtalem’s operations and financial results, Carrington is presented in Adtalem’s financial reporting as a discontinued operation. Adtalem has retained certain leases associated with the Carrington operations. Adtalem remains the primary lessee on these leases and subleases to Carrington. Adtalem records the proceeds from these subleases as an offset to operating costs. Adtalem also assigned certain leases to Carrington but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $11.3 million on the sale of Carrington and transferred $9.9 million of cash and restricted cash balances to Carrington in fiscal year 2019. On December 11, 2018, Adtalem completed the sale of DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. As the sale represented a strategic shift that had a major effect on Adtalem’s operations and financial results, DeVry University is presented in Adtalem’s financial reporting as a discontinued operation. The purchase agreement includes an earn-out entitling Adtalem to payments of up to $20 million over a ten-year period payable based on DeVry University’s free cash flow. In connection with the closing of the sale, Adtalem loaned to DeVry University $10.0 million under the terms of the promissory note, dated as of December 11, 2018 (the “Note”). The Note bears interest at a rate of 4% per annum, payable annually in arrears and has a maturity date of January 1, 2022. Based on the terms of the Note, DeVry University may make prepayments and may be required to make prepayments on the Note. The Note is included on the Consolidated Balance Sheet in prepaid expenses and other current assets as of June 30, 2021 and other assets, net as of June 30, 2020. Adtalem has retained certain leases associated with DeVry University operations. Adtalem remains the primary lessee on these leases and subleases to DeVry University. In addition, Adtalem owns the buildings for certain DeVry University operating and administrative office locations and leases space to DeVry University under one-year operating leases, renewable annually at DeVry University’s option with the exception of one lease which expires in December 2023. Adtalem records the proceeds from these leases and subleases as an offset to operating costs. Adtalem also assigned certain leases to DeVry University but remains contingently liable under these leases. Adtalem recorded a pre-tax loss of $22.3 million on the sale of DeVry University and transferred $40.2 million of cash and restricted cash balances to DeVry University in fiscal year 2019. On April 24, 2020, Adtalem completed the sale of Adtalem Brazil to Estácio Participações S.A. (“Estácio”) and Sociedade de Ensino Superior Estaćio de Sá Ltda, a wholly owned subsidiary of Estácio (“Purchaser”), pursuant to the Stock Purchase Agreement dated October 18, 2019. As the sale represented a strategic shift that had a major effect on Adtalem’s operations and financial results, Adtalem Brazil is presented in Adtalem’s financial reporting as a discontinued operation. Pursuant to the terms and subject to the conditions set forth in the purchase agreement, Adtalem sold the issued and outstanding shares of Adtalem Brasil Holding S.A. (a/k/a Adtalem Brazil) to the Purchaser for R$1,920 million, subject to certain post-closing adjustments pursuant to the purchase agreement. Adtalem received $345.9 million in sale proceeds and $56.0 million of Adtalem Brazil’s cash, for a combined $401.9 million upon the sale. Adtalem Brazil’s cash balance on the sale date was $88.4 million, resulting in $313.5 million of cash proceeds, net of this cash transferred. In addition, Adtalem received $110.7 million from the settlement of a deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil to economically hedge the Brazilian Real sales price through the mitigation of the currency exchange rate risk. Adtalem recorded this settlement as a pre-tax gain on the hedge of $110.7 million in fiscal year 2020. The hedge agreement had a total notional amount of R$2,154 million. The derivative associated with the hedge agreement did not qualify for hedge accounting treatment under Accounting Standards Codification (“ASC”) 815, and as a result, all changes in fair value were recorded within the income statement. 88 Adtalem Global Education Inc.The following is a summary of income statement information of operations reported as discontinued operations, which includes Adtalem Brazil’s, Carrington’s, and DeVry University’s operations through the date of each respective sale (in thousands): Revenue Operating cost and expense: Cost of educational services Student services and administrative expense Restructuring expense Asset impairment charge - building and equipment Total operating cost and expense Operating (loss) income Other income (expense): Interest and dividend income Interest expense Net other (expense) income (Loss) income from discontinued operations before income taxes Loss on disposal of discontinued operations before income taxes Benefit from income taxes Loss from discontinued operations Net income attributable to redeemable noncontrolling interest Net loss from discontinued operations attributable to Adtalem 2021 Year Ended June 30, 2020 157,695 $ — $ $ — 33,946 — — 33,946 (33,946) 105,118 113,449 646 — 219,213 (61,518) — — — (33,946) — 8,819 (25,127) — (25,127) $ 1,862 (2,922) (1,060) (62,578) (287,560) 20,823 (329,315) — (329,315) $ $ 2019 421,560 261,175 142,516 388 1,953 406,032 15,528 4,008 (3,733) 275 15,803 (33,604) 6,513 (11,288) (791) (12,079) We continue to incur costs, principally attorney fees, associated with ongoing litigation and settlements related to the DeVry University divestiture, which was completed during fiscal year 2019, and are classified as expense within discontinued operations. 5. Revenue Revenue is recognized when control of the promised goods or services is transferred to our customers (students and members), in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The following tables disaggregate revenue by source (in thousands): Higher education Test preparation/certifications Conferences/seminars Memberships/subscriptions Other Total Medical and Healthcare Year Ended June 30, 2021 Financial Services Home Office and Other Consolidated $ $ 903,626 $ — — — 3,275 906,901 $ — $ 131,823 28,547 45,109 — 205,479 $ — $ — — — — — $ 903,626 131,823 28,547 45,109 3,275 1,112,380 89 2021 Form 10-K Higher education Test preparation/certifications Conferences/seminars Memberships/subscriptions Other Total Higher education Test preparation/certifications Conferences/seminars Memberships/subscriptions Other Total Medical and Healthcare Year Ended June 30, 2020 Financial Services Home Office and Other Consolidated 848,154 $ — — — 18,274 866,428 $ — $ 108,471 43,147 33,955 — 185,573 $ — $ — — — — — $ 848,154 108,471 43,147 33,955 18,274 1,052,001 Medical and Healthcare Year Ended June 30, 2019 Financial Services Home Office and Other Consolidated 835,908 $ — — — 13,953 849,861 $ — $ 119,325 27,794 20,092 — 167,211 $ — $ (3,229) — — — (3,229) $ 835,908 116,096 27,794 20,092 13,953 1,013,843 $ $ $ $ Certain prior periods amounts in the above tables have been reclassified for consistency with the current period presentation. In addition, see Note 21 “Segment Information” for a disaggregation of revenue by geographical region. Performance Obligations and Revenue Recognition Higher education: Higher education revenue consists of tuition, fees, books, and other educational products. The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the term as instruction is delivered. Books and other educational product revenue are recognized when products are shipped or students receive access to electronic materials. Under certain circumstances, we report revenue from these books and other educational products on a net basis because our performance obligation is to facilitate a transaction between the student and a vendor, which revenue was not significant for the years ended June 30, 2021, 2020, and 2019. Test preparation/certifications: Test preparation revenue consists of sales of self-study materials and test preparation course instruction. Becker test preparation revenue is primarily derived from self-study materials and is recognized when access to the materials is delivered to the customer. EduPristine test preparation revenue is primarily derived from course instruction and is recognized on a straight-line basis over the applicable instruction delivery period. Certification revenue consists of exam preparation guides, seminars, exam sitting fees, and recertification fees and is recognized when the applicable performance obligation is satisfied. Conferences/seminars: Conference revenue consists of revenue from attendees, sponsors, and exhibitors. We recognize revenue for all items related to conferences at the time of the conference. Seminar revenue consists of seminars delivered in live, live-online, or on-demand online formats. We recognize revenue for live and live-online seminars on the day of the seminar. We recognize revenue for on-demand online seminars when customers are granted access to a webcast of the seminar. Memberships/subscriptions: Membership revenue is recognized on a straight-line basis over the membership period. Subscription revenue is recognized on a straight-line basis over the subscription period. Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied. Customer contracts generally have separately stated prices for each performance obligation contained in the contract. Therefore, each performance obligation generally has its own standalone selling price. For higher education students, arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction 90 Adtalem Global Education Inc. price at the beginning of the academic term. Students utilizing private funding or funding through Adtalem’s credit extension programs (see Note 9 “Accounts Receivable and Credit Losses” for additional information) generally pay after the academic term is complete. For non-higher education customers, payment is typically due and collected at the time a customer places an order. Transaction Price Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services. For higher education, students may receive discounts, scholarships or refunds, which gives rise to variable consideration. The amounts of discounts or scholarships are applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is reduced directly by these discounts or scholarships from the amount of the standard tuition rate charged. Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Adtalem to retain only a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Adtalem in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Adtalem’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within accrued liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term. Management reassesses collectability on a student-by-student basis throughout the period revenue is recognized. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis. For test preparation and other Financial Services products, the transaction price is equal to the amount charged to the customer, which is the standard rate, less any discounts, and an estimate for refunds. We believe it is probable that no significant reversal will occur in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is subsequently resolved. Therefore, the estimate of variable consideration is not constrained. Contract Balances For our higher education institutions, students are billed at the beginning of each academic term and payment is due at that time. Adtalem’s performance obligation is to provide educational services in the form of instruction during the academic term. As instruction is provided, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Adtalem’s credit extension programs (see Note 9 “Accounts Receivable and Credit Losses”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts receivable is reduced. For our Financial Services businesses, customers are billed and payment is generally due at the time of order placement. In most cases, performance obligations are delivered subsequent to payments received. Delivering our performance obligations reduces deferred revenue, and accounts receivable is reduced upon payments received. In instances when customers are offered a flexible payment plan option, payment is received after satisfying the performance obligation. Revenue of $89.3 million was recognized during fiscal year 2021 that was included in the deferred revenue balance at the beginning of fiscal year 2021. Revenue recognized from performance obligations that were satisfied or partially satisfied in prior periods was not material. 91 2021 Form 10-KThe difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period, increases from charges related to the start of academic terms beginning during the period, increases from payments received related to academic terms commencing after the end of the reporting period, and increases from payments from customers in advance of Adtalem performing its applicable performance obligation. Practical Expedients As our performance obligations have an original expected duration of one year or less, we have applied the practical expedient (as provided in ASC 606-10-50-14) to not disclose the information in ASC 606-10-50-13, which requires disclosure of the amount of the transaction price allocated to our performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period and when the entity expects to recognize this amount as revenue. All consideration from contracts with customers is included in the transaction price. 6. Restructuring Charges During fiscal year 2021, Adtalem recorded restructuring charges primarily related to Adtalem’s home office and ACAMS real estate consolidations, and a write-down of EduPristine’s assets. During fiscal year 2020, Adtalem recorded restructuring charges primarily related to the sale of Becker’s courses for healthcare students, Adtalem’s home office and ACAMS real estate consolidations, and workforce reductions across the organization. During fiscal year 2019, Adtalem recorded restructuring charges primarily related to the impairment of the property and equipment at the Dominica campus of RUSM and severance related to workforce reductions in Dominica. In January 2019, RUSM relocated its campus operations to Barbados with no plans to return to Dominica. The property and equipment in Dominica have been fully impaired as management determined the market value less the costs to sell the facilities or move the equipment was zero. In addition, during fiscal year 2019, Adtalem recorded restructuring charges related to Adtalem’s home office real estate consolidations. When estimating costs of exiting lease space, estimates are made which could differ materially from actual results and result in additional restructuring charges or reversals in future periods. Termination benefit charges represented severance pay and benefits for these employees. Adtalem’s home office is classified as “Home Office and Other” in Note 21 “Segment Information.” Pre-tax restructuring charges by segment were as follows (in thousands): Financial Services Home Office and Other Total Medical and Healthcare Financial Services Home Office and Other Total Medical and Healthcare Financial Services Home Office and Other Total Real Estate and Other Year Ended June 30, 2021 Termination Benefits 3,044 $ 6,270 9,314 $ — $ 490 490 $ Real Estate and Other Year Ended June 30, 2020 Termination Benefits 1,129 4,366 20,160 25,655 $ $ 578 476 1,919 2,973 Real Estate and Other Year Ended June 30, 2019 Termination Benefits 40,372 1,304 9,581 51,257 $ $ 1,294 — 516 1,810 $ $ $ $ $ $ $ $ $ $ Total 3,044 6,760 9,804 Total 1,707 4,842 22,079 28,628 Total 41,666 1,304 10,097 53,067 92 Adtalem Global Education Inc. The following table summarizes the separation and restructuring plan activity for the fiscal years 2020 and 2021, for which cash payments are required (in thousands): Liability balance as of June 30, 2019 ASC 842 (leases) adjustment (1) Liability balance as of July 1, 2019 Increase in liability (separation and other charges) Reduction in liability (payments and adjustments) Liability balance as of June 30, 2020 Increase in liability (separation and other charges) Reduction in liability (payments and adjustments) $ 25,083 (25,030) 53 4,955 (3,573) 1,435 490 (1,925) — Liability balance as of June 30, 2021 (1) Reflects amounts reclassified out of the opening balance of restructuring reserve accruals as of June 30, 2019 to operating lease assets that was recorded with the adoption of ASC 842. $ We have completed our current restructuring plans. However, we continue to incur restructuring charges or reversals related to exiting leased space from previous restructuring activities. Management may institute future restructuring plans. 7. Income Taxes Income from continuing operations before income taxes, classified by source of income, were as follows (in thousands): Year Ended June 30, Domestic Foreign Total 2020 $ 2021 62,397 $ 160,334 $ 64,453 2019 80,209 59,538 $ 126,850 $ 237,179 $ 139,747 76,845 The components of the provision for (benefit from) income taxes were as follows (in thousands): Current tax provision (benefit): U.S. federal State and local Foreign Total current Deferred tax provision (benefit): U.S. federal State and local Foreign Total deferred Provision for (benefit from) income taxes $ Year Ended June 30, 2021 2020 2019 $ 17,516 $ 4,389 1,856 23,761 (3,097) $ 735 519 (1,843) 15,912 1,749 2,224 19,885 (2,097) 1,641 1,943 1,487 25,248 $ (4,197) (104) (214) (4,515) (6,358) $ 4,066 9,028 (101) 12,993 32,878 93 2021 Form 10-K The effective tax rate differs from the statutory tax rates as follows (in thousands): Income tax at statutory rate Lower rates on foreign operations State income taxes Loss on investment in subsidiary Gain on derivative Permanent non-deductible items Foreign tax provisions under GILTI Other Provision for (benefit from) income taxes Year Ended June 30, 2021 2020 2019 $ 26,639 (12,171) 4,390 (374) — 1,086 6,084 (406) $ 25,248 21.0 % $ 49,807 (9.6)% (16,210) 3.5 % 3,072 (0.3)% (25,688) — % (23,252) (236) 0.9 % 6,502 4.8 % (0.3)% (353) 19.9 % $ (6,358) 21.0 %$ 29,347 (6.8)% (12,738) 5,825 1.3 % 1,797 (10.8)% — (9.8)% 469 (0.1)% 3,231 2.7 % (0.1)% 4,947 (2.7)%$ 32,878 21.0 % (9.1)% 4.2 % 1.3 % — % 0.3 % 2.3 % 3.5 % 23.5 % Deferred income tax assets and liabilities result primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition of the tax benefits of net operating loss carryforwards. The components of the deferred income tax assets and liabilities were as follows (in thousands): Employee benefits Stock-based compensation Receivable reserve Operating lease liabilities Other reserves Loss and credit carryforwards, net Less: valuation allowance Gross deferred tax assets Depreciation Deferred taxes on unremitted foreign earnings Amortization of intangible assets Operating lease assets Other accruals Gross deferred tax liability Net deferred tax asset (liability) June 30, 2021 13,434 $ 6,895 2,920 50,808 4,116 18,756 (8,000) 88,929 (2,916) (733) (53,465) (35,513) (814) (93,441) (4,512) $ 2020 10,818 6,924 2,530 48,110 4,748 23,695 (9,937) 86,888 (177) (525) (54,864) (33,279) (741) (89,586) (2,698) $ $ As of June 30, 2021, Adtalem has $270.0 million of gross, post apportioned state net operating loss carryforwards, and $16.7 million of foreign net operating loss carryforwards in St. Maarten and other jurisdictions. As of June 30, 2020, Adtalem has $0.1 million of gross U.S. federal net operating loss carryforwards, $301.5 million of gross, post apportioned state net operating loss carryforwards, and $23.6 million of foreign net operating loss carryforwards in St. Maarten and other jurisdictions. 94 Adtalem Global Education Inc. Adtalem has the following tax net operating loss (tax effected), interest (tax effected), and credit carryforwards as of June 30, 2021 (in thousands): U.S. interest expense carryforwards U.S. credit carryforwards State net operating loss carryforwards Foreign net operating loss carryforwards Foreign net operating loss carryforwards Total loss and credit carryforwards, net June 30, 2021 Years of Expiration Beginning Ending $ $ 112 672 14,398 2,483 1,091 18,756 no expiration 2027 2023 2022 no expiration 2030 2040 2041 Three of Adtalem’s operating units benefit from local tax incentives: AUC, which operates in St. Maarten, RUSM, which operates in Barbados, and RUSVM, which operates in St. Kitts. AUC’s effective tax rate reflects benefits derived from investment incentives. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. RUSM has an exemption in Barbados until 2039. RUSVM has an exemption in St. Kitts until 2037. Valuation allowances are established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The valuation allowance on our deferred tax assets was $8.0 million and $9.9 million as of June 30, 2021 and 2020, respectively, and mainly relates to other foreign and state net operating loss carryforwards. Insufficient projected taxable income in certain jurisdictions gives rise to need of a valuation allowance. Based on Adtalem’s expectations for future taxable income, management believes that it is more likely than not that operating income in other respective jurisdictions will be sufficient to recognize fully all deferred tax assets. Our effective income tax rates from continuing operations was positive 19.9%, negative 2.7%, and positive 23.5% in fiscal year 2021, 2020, and 2019, respectively. The effective tax rates in fiscal years 2021, 2020, and 2019 reflect the U.S. federal tax rate of 21% adjusted for state and local taxes, foreign rate differences, benefits associated with local tax incentives, changes in valuation allowances and liabilities for uncertain tax positions, and tax benefits on stock-based compensation awards. Additionally, in fiscal year 2020, we did not record a tax provision on the pre-tax gain of $110.7 million on the deal-contingent foreign currency hedge arrangement entered into in connection with the sale of Adtalem Brazil sale completed on April 24, 2020 (see Note 4 “Discontinued Operations and Assets Held for Sale” for additional information) and we recorded a $25.7 million net tax benefit related to a former subsidiary investment loss claimed for the tax year ended June 30, 2018. The Tax Cuts and Jobs Act of 2017 (the “Tax Act”) includes significant changes to the U.S. corporate income tax system, which reduced the U.S. federal corporate tax rate from 35.0% to 21.0% as of January 1, 2018 and shifted to a modified territorial tax regime, which created new taxes on certain foreign-sourced earnings. More specifically, the Tax Act includes provisions for Global Intangible Low-Taxed Income (“GILTI”) wherein taxes are imposed on foreign income in excess of a deemed return on tangible assets of foreign corporations. This income will effectively be taxed in general at a 10.5% tax rate. The GILTI provision of the Tax Act became effective for Adtalem for the year ended June 30, 2019. We have elected to account for GILTI as a period cost. Prior to enactment of the Tax Act, Adtalem did not record a U.S. federal or state tax provision for the undistributed earnings of its international subsidiaries. As a result of the Tax Act, Adtalem has revised its prior intent to indefinitely reinvest accumulated undistributed earnings and profits in foreign operations, and no longer intends to indefinitely reinvest any of its accumulated undistributed earnings and profits in foreign operations. As of June 30, 2021 and 2020, the total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, was $10.4 million and $11.5 million, respectively, which if recognized, would impact the effective tax rate. We expect that our unrecognized tax benefits will decrease during the next 12 months due to the settlement of various audits and the lapsing of statutes of limitation. We estimate this decrease to not be material. Adtalem classifies interest 95 2021 Form 10-K   and penalties on tax uncertainties as a component of the provision for income taxes. The total amount of interest and penalties accrued as of June 30, 2021 and 2020 was $1.9 million and $1.5 million, respectively. Interest and penalties expense recognized during the years ended June 30, 2021, 2020, and 2019 were $0.4 million, $0.0 million, and $0.1 million, respectively. The changes in our unrecognized tax benefits were (in thousands): Balance at beginning of period Increases from positions taken during prior periods Decreases from positions taken during prior periods Increases from positions taken during the current period Reductions due to lapse of statute Reductions due to settlement Balance at end of period Year Ended June 30, 2021 11,481 47 (906) 43 (264) (3) 10,398 $ $ 2020 31,818 — (26,489) 6,456 (231) (73) 11,481 $ $ 2019 32,804 582 (660) 606 (1,390) (124) 31,818 $ $ Adtalem files tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions based on existing tax laws and incentives. Adtalem remains generally subject to examination in the U.S. for years beginning on or after July 1, 2017; in various states for years beginning on or after July 1, 2015; and in our significant foreign jurisdictions for years beginning on or after July 1, 2015. Adtalem is currently under audit in one state and local jurisdiction for tax years 2017 through 2019. The Internal Revenue Service (“IRS”) is currently conducting an examination of the tax year ended June 30, 2018. Although we have recorded tax reserves for potential adjustments to tax liabilities for prior years, we cannot provide assurance that a material adjustment, either positive or negative, will not result when the audits are concluded. On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, temporarily increases the amount of interest expense the company is allowed to deduct on its U.S. federal tax returns for fiscal years 2019 and 2020, modifies the Tax Credit and Jobs Act of 2017 to allow immediate expensing of qualified improvement property for U.S. federal income tax purposes retroactive to fiscal year 2018, and allows net operating losses incurred in fiscal years 2018, 2019, and 2020 to be carried back five-years and offset up to 100% of U.S. federal taxable income for tax years beginning before fiscal year 2021. Management does not expect that the provisions of the CARES Act would result in a material tax or cash benefit. On December 27, 2020, the Consolidated Appropriations Act, 2021 (the “Appropriations Act”) was enacted in response to the COVID-19 pandemic. The Appropriations Act, among other things, temporarily extends through December 31, 2025, certain expiring tax provisions, including look-through treatment of payments of dividends, interest, rents, and royalties received or accrued from related controlled foreign corporations. Additionally, the Appropriations Act enacts new provisions and extends certain provisions originated within the CARES Act, enacted on March 27, 2020, including an extension of time for repayment of the deferred portion of employees’ payroll tax through December 31, 2021, and a temporary allowance for full deduction of certain business meals. Adtalem has elected not to defer the employees’ portion of payroll tax. Management does not expect that the other provisions of the Appropriations Act would result in a material tax or cash benefit. On March 11, 2021, the American Rescue Plan Act of 2021 (the “Rescue Act”) was enacted in response to the COVID- 19 pandemic. The Rescue Act, among other things, expands the number of employees subject to the tax deductibility limitation of employee compensation in excess of $1 million for tax years beginning after December 31, 2026 and repeals the election for U.S. affiliated groups to allocate interest expense on a worldwide basis. Management does not expect that the other provisions of the Rescue Act would result in a material tax or cash detriment. 96 Adtalem Global Education Inc. 8. Earnings per Share The following table sets forth the computations of basic and diluted earnings per share and stock awards not included in the computation of diluted earnings per share when their effect is antidilutive (in thousands, except per share data): Numerator: Net income (loss) attributable to Adtalem: Continuing operations Discontinued operations Net Denominator: Weighted-average basic shares outstanding Effect of dilutive stock awards Weighted-average diluted shares outstanding Earnings (loss) per share attributable to Adtalem: Basic: Continuing operations Discontinued operations Net Diluted: Continuing operations Discontinued operations Net Weighted-average antidilutive stock awards 9. Accounts Receivable and Credit Losses 2021 Year Ended June 30, 2020 2019 $ $ 102,036 (25,127) 76,909 $ $ 243,981 (329,315) (85,334) $ $ 107,247 (12,079) 95,168 51,322 323 51,645 53,659 435 54,094 58,540 790 59,330 $ $ $ $ $ $ $ $ $ $ $ $ 1.99 (0.49) 1.50 1.98 (0.49) 1.49 1,143 $ $ $ $ $ $ 4.55 (6.14) (1.59) 4.51 (6.09) (1.58) 973 1.83 (0.21) 1.63 1.81 (0.20) 1.60 215 We categorize our accounts receivable balances as trade receivables or financing receivables. Our trade receivables relate to student or customer balances occurring in the normal course of business. Trade receivables have a term of less than one year and are included in accounts receivable, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs where the student is provided payment terms in excess of one year with their respective school and are included in accounts receivable, net and other assets, net on our Consolidated Balance Sheets. The classification of our accounts receivable balances was as follows (in thousands): Trade receivables, current Financing receivables, current Accounts receivable, current Financing receivables, current Financing receivables, noncurrent Total financing receivables $ $ $ $ June 30, 2021 Allowance Gross 79,062 $ 6,348 85,410 $ (13,154) $ (4,260) (17,414) $ Net 65,908 2,088 67,996 6,348 $ 39,665 46,013 $ (4,260) $ (12,572) (16,832) $ 2,088 27,093 29,181 Our financing receivables relate to credit extension programs available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, books, and fees, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM, and RUSVM allow students to finance their living expenses. 97 2021 Form 10-K Repayment plans for financing agreements are developed to address the financial circumstances of the particular student. Interest charges at rates from 3.0% to 12.0% per annum accrue each month on the unpaid balance once a student withdraws or graduates from a program. Most students are required to begin repaying their loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay, which reduces the possibility of over borrowing. Payments may increase upon completing or departing school. After a student leaves school, the student typically will have a monthly installment repayment plan. Credit Quality The primary credit quality indicator for our financing receivables is delinquency. Balances are considered delinquent when contractual payments on the loan become past due. We charge-off financing receivable balances after they have been sent to a third-party collector, the timing of which varies by the institution granting the loan, but in most cases is when the financing agreement is at least 181 days past due. Payments are applied first to outstanding interest and then to the unpaid principal balance. The credit quality analysis of financing receivables as of June 30, 2021 was as follows (in thousands): Prior 2017 2018 2019 2020 2021 Total Amortized Cost Basis by Origination Year $ 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due 121-150 days past due Greater than 150 days past due 135 $ 1,616 $ 2,934 1,082 660 692 95 494 13 613 108 15,138 872 20,953 3,364 25,060 12,805 Financing receivables, gross $ 12,829 $ 5,278 $ 5,361 $ 3,785 $ 2,591 $ 16,169 $ 46,013 297 $ 145 24 287 43 7,468 8,264 4,565 320 $ 165 92 131 133 1,919 2,760 2,601 7 $ 2 310 — 31 2,973 3,323 1,955 61 69 47 256 475 1,043 1,548 49 102 16 42 1,431 2,199 1,586 Total past due 559 $ Current Beginning in the third quarter of fiscal year 2021, we have refinanced loans, resulting in loans previously reported under an older origination year to now be categorized as a new loan under the 2021 origination year. The following table includes our financing receivables credit risk profile disclosures for the prior year before we adopted ASC 326 on July 1, 2020 (in thousands): 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Total Past Due Current Total Financing Receivables Financing receivables: June 30, 2020 $ 7,192 $ 1,755 $ 1,547 $ 13,782 $ 24,276 $ 25,749 $ 50,025 Allowance for Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts receivable balances as of each balance sheet date. In evaluating the collectability of all our accounts receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. For our trade receivables, we primarily use historical loss rates based on a student’s status to determine the allowance for credit losses. As these trade receivables are short-term in nature, management believes a student’s status provides the best credit loss estimate. Students still attending classes and recently graduated are more likely to pay than those who are inactive due to being on a leave of absence or withdrawing from school. For our financing receivables, we primarily use historical loss rates based on an aging schedule. As these financing receivables are based on long-term financing agreements offered by Adtalem, management believes that delinquency provides the best credit loss estimate. As the financing receivable balances become further past due, it is less likely we will receive payment, causing our estimate of credit losses to increase. 98 Adtalem Global Education Inc. The following tables provide a rollforward of the allowance for credit losses (in thousands): Beginning balance Write-offs Recoveries Provision for credit losses Ending balance Beginning balance Write-offs Recoveries Provision for credit losses Ending balance Trade Year Ended June 30, 2021 Financing Total 10,825 (4,994) 1,063 6,260 13,154 $ $ 15,690 $ (4,331) 160 5,313 16,832 $ 26,515 (9,325) 1,223 11,573 29,986 Trade Year Ended June 30, 2020 Financing Total 8,243 (4,531) 961 6,152 10,825 $ $ 6,289 $ (712) 113 10,000 15,690 $ 14,532 (5,243) 1,074 16,152 26,515 $ $ $ $ Allowance for bad debts on short-term and long-term receivables as of June 30, 2021 and 2020 were $30.0 million and $26.5 million, respectively. The increase in the reserve from the prior year is driven by an increase in our overall historical loss rates, primarily related to the credit extension programs at the medical and veterinary schools. Accounts receivable, net decreased with an offsetting increase in other assets, net on the Consolidated Balance Sheet as of June 30, 2021 compared to June 30, 2020 primarily due to a correction in the methodology on how we classify financing receivable balances between current and noncurrent assets. Other Financing Receivables In connection with the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the Note. The Note bears interest at a rate of 4% per annum, payable annually in arrears, and has a maturity date of January 1, 2022. The DeVry University loan receivable is included on the Consolidated Balance Sheet in prepaid expenses and other current assets as of June 30, 2021 and other assets, net as of June 30, 2020, and is estimated by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 4% per annum. Management has evaluated the collectability of this note and has determined no reserve is necessary. On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep Foundation (“DePaul College Prep”). In connection with the sale, Adtalem holds a mortgage from DePaul College Prep for $46.8 million. The mortgage is due on July 31, 2024 as a balloon payment and bears interest at a rate of 4% per annum, payable monthly. The carrying value of the DePaul College Prep loan receivable is included in other assets, net on the Consolidated Balance Sheet as of June 30, 2021 and 2020 is $42.7 million and $41.4 million, respectively, and was originally determined by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 7% per annum. Management has evaluated the collectability of this note and has determined no reserve is necessary. 99 2021 Form 10-K 10. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): Land Building Equipment Construction in progress Property and equipment, gross Accumulated depreciation Property and equipment, net June 30, 2021 44,331 327,539 254,994 21,467 648,331 (351,094) 297,237 $ $ 2020 43,246 313,068 248,359 12,449 617,122 (331,020) 286,102 $ $ Depreciation expense was $37.6 million, $34.4 million, and $33.8 million for the years ended June 30, 2021, 2020, and 2019, respectively. During the first quarter of fiscal year 2018, the campuses of AUC and RUSM were damaged from Hurricanes Irma and Maria, respectively. In the first quarter of fiscal year 2019, Adtalem announced its decision to relocate RUSM’s campus operations to Barbados and not return to RUSM’s Dominica campus. We recorded impairment charges of $39.1 million in fiscal year 2019 to fully impair the property and equipment in Dominica as management determined the market value less the costs to sell the facilities or move the equipment was zero. The impairment charges are included in restructuring expense in the Consolidated Statements of Income (Loss) (see Note 6 “Restructuring Charges” for additional information). In December 2018, AUC and RUSM received the final insurance settlement proceeds related to the property damage and disruption of operations caused by Hurricanes Irma and Maria. These proceeds produced a gain of $15.6 million, which was recorded in the second quarter of fiscal year 2019. On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and holds a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The $5.2 million received is classified as a financing activity on the Consolidated Statements of Cash Flows. The mortgage is due on July 31, 2024 as a balloon payment and bears interest at a rate of 4% per annum, payable monthly. The buyer has an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes. Adtalem continues to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheet. See Note 9 “Accounts Receivable and Credit Losses” for a discussion on the discounting of the note receivable. On September 27, 2019, Adtalem closed on the sale of its Columbus, Ohio, campus facility. Net proceeds from the sale of $6.4 million resulted in a gain on the sale of $4.8 million in fiscal year 2020. This gain was recorded at Adtalem’s home office, which is classified as “Home Office and Other” in Note 21 “Segment Information.” 11. Leases We determine if a contract contains a lease at inception. We have entered into operating leases for academic sites, housing facilities, and office space which expire at various dates through June 2032, most of which include options to terminate for a fee or extend the leases for an additional five-year period. The lease term includes the noncancelable period of the lease, as well as any periods for which we are reasonably certain to exercise extension options. We elected to account for lease and non-lease components (e.g., common-area maintenance costs) as a single lease component for all operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We have not entered into any financing leases. Operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets represent our right to use an underlying asset during the lease term. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. Operating lease 100 Adtalem Global Education Inc. assets are adjusted for any prepaid or accrued lease payments, lease incentives, initial direct costs, and impairments. Our incremental borrowing rate is utilized in determining the present value of the lease payments based upon the information available at the commencement date. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease. Operating lease expense is recognized on a straight-line basis over the lease term. As of June 30, 2021, we entered into one additional lease that has not yet commenced. The lease is expected to commence during the fourth quarter of fiscal year 2022, has a 12-year lease term, and will result in an additional lease asset and lease liability of approximately $18.9 million. During the fourth quarter of fiscal year 2021, we recorded an operating lease asset and operating lease liability of $15.2 million related to a lease that had commenced in the first quarter of fiscal year 2021. The impact of recording this lease later than its commencement date to our quarterly financial information of fiscal year 2021 was immaterial. The components of lease cost were as follows (in thousands): Operating lease cost Sublease income Total lease cost Year Ended June 30, 2021 55,974 $ (16,234) 39,740 $ 2020 56,136 (19,524) 36,612 $ $ Maturities of lease liabilities by fiscal year as of June 30, 2021 were as follows (in thousands): Fiscal Year 2022 2023 2024 2025 2026 Thereafter Total lease payments Less: tenant improvement allowance not yet received Less: imputed interest Present value of lease liabilities Lease term and discount rate were as follows: Weighted-average remaining operating lease term (years) Weighted-average operating lease discount rate Operating Leases 66,621 53,999 41,323 31,491 18,945 56,120 268,499 (4,886) (40,429) 223,184 $ $ June 30, 2021 5.6 5.6% Supplemental disclosures of cash flow information related to leases were as follows (in thousands): Cash paid for amounts in the measurement of operating lease liabilities (net of sublease receipts) Operating lease assets obtained in exchange for operating lease liabilities Year Ended June 30, 2021 2020 $ $ 47,415 45,388 $ $ 47,147 26,477 Adtalem maintains agreements to lease either a portion or the full space of three facilities owned by Adtalem to DeVry University with various expiration dates through December 2023. Adtalem maintains agreements to sublease either a portion or the full leased space at 12 of its operating lease locations. Most of these subleases are a result of Adtalem retaining leases associated with restructured lease activities at DeVry University and Carrington prior to their divestitures during fiscal year 2019. All sublease expirations with DeVry University and Carrington coincide with Adtalem’s original 101 2021 Form 10-K head lease expiration dates. At that time, Adtalem will be relieved of its obligations. In addition, Adtalem has entered into subleases with non-affiliated entities for vacated or partially vacated space from restructuring activities. Adtalem’s sublease agreements expire at various dates through December 2025. We record sublease income as an offset against our lease expense recorded on the head lease. For leases which Adtalem vacated or partially vacated space, we recorded estimated restructuring charges in prior periods. Actual results may differ from these estimates, which could result in additional restructuring charges or reversals. Future minimum lease and sublease rental income under these agreements as of June 30, 2021, were as follows (in thousands): Fiscal Year 2022 2023 2024 2025 2026 Total lease and sublease rental income Amount 17,564 16,078 10,261 5,121 2,038 51,062 $ $ Rent expense, adjusted to exclude Adtalem Brazil, for the year ended June 30, 2019 was $35.8 million. 12. Goodwill and Intangible Assets The table below summarizes goodwill balances by reporting unit (in thousands): Reporting Unit Chamberlain AUC RUSM and RUSVM Financial Services Total June 30, 2021 4,716 $ 68,321 237,173 376,164 686,374 $ 2020 4,716 68,321 237,173 376,004 686,214 $ $ The table below summarizes goodwill balances by reportable segment (in thousands): Reportable Segment Medical and Healthcare Financial Services Total June 30, 2021 310,210 $ 376,164 686,374 $ 2020 310,210 376,004 686,214 $ $ The table below summarizes the changes in goodwill balances by reportable segment (in thousands): Medical and Healthcare Financial Services Total June 30, 2019 Purchase accounting adjustments Foreign exchange rate changes June 30, 2020 Foreign exchange rate changes June 30, 2021 $ 310,210 $ 377,046 $ 687,256 (92) (950) 686,214 160 $ 310,210 $ 376,164 $ 686,374 — — 310,210 — (92) (950) 376,004 160 The foreign exchange rate changes in the Financial Services segment goodwill balance from June 30, 2020 is the result of a change in the foreign currency exchange rates on the EduPristine goodwill balance recorded in the Indian Rupee compared to the U.S. dollar. 102 Adtalem Global Education Inc. Intangible assets consisted of the following (in thousands): June 30, 2021 Gross Carrying Amount Accumulated Amortization Weighted-Average Amortization Period Amortizable intangible assets: Customer relationships Curriculum/software Course delivery technology Total Indefinite-lived intangible assets: Trade names Chamberlain Title IV eligibility and accreditations AUC Title IV eligibility and accreditations Ross Title IV eligibility and accreditations Intellectual property Total $ $ $ $ 68,900 $ 11,600 6,700 87,200 $ (27,844) (4,028) (2,791) (34,663) 10 Years 6 Years 5 Years 94,472 1,200 100,000 14,100 13,940 223,712 Amortizable intangible assets: Customer relationships Curriculum/software Course delivery technology Total Indefinite-lived intangible assets: Trade names Chamberlain Title IV eligibility and accreditations AUC Title IV eligibility and accreditations Ross Title IV eligibility and accreditations Intellectual property Total June 30, 2020 Gross Carrying Amount Accumulated Amortization 68,900 11,600 7,200 87,700 $ $ (21,044) (2,094) (1,952) (25,090) 95,664 1,200 100,000 14,100 13,940 224,904 $ $ $ $ The table below summarizes the indefinite-lived intangible asset balances by reportable segment (in thousands): Reportable Segment Medical and Healthcare Financial Services Total June 30, 2021 137,500 $ 86,212 223,712 $ 2020 137,500 87,404 224,904 $ $ During the fourth quarter of fiscal year 2021, EduPristine’s trade name intangible asset was considered to be impaired and written down by $1.2 million. This was recorded within restructuring expense on the Consolidated Statement of Income for the year ended June 30, 2021. 103 2021 Form 10-K Amortization expense for amortized intangible assets was $10.1 million, $10.3 million, and $6.9 million for the years ended June 30, 2021, 2020, and 2019, respectively. Estimated intangible asset amortization expense is as follows (in thousands): Fiscal Year 2022 2023 2024 2025 2026 Thereafter Total Financial Services 9,943 9,792 9,509 7,933 5,960 9,400 52,537 $ $ All amortizable intangible assets except ACAMS customer relationships are amortized on a straight-line basis. The amount amortized for ACAMS customer relationships is based on the estimated retention of the customers, giving consideration to the revenue and cash flow associated with these existing customers. Indefinite-lived intangible assets related to trade names, Title IV eligibility and accreditations, and intellectual property are not amortized, as there are no legal, regulatory, contractual, economic, or other factors that limit the useful life of these intangible assets to the reporting entity. Goodwill and indefinite-lived intangibles are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31. Adtalem has four reporting units that contained goodwill as of May 31, 2021. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management and the Board. If the carrying amount of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized to the extent the fair value of the reporting unit goodwill is less than the carrying amount of the goodwill, up to the amount of goodwill recorded. In analyzing the results of operations and business conditions of all four reporting units, it was determined that a quantitative impairment analysis was not necessary for any reporting unit to determine if the carrying values of the reporting unit exceeded their fair values as of the May 31, 2021 annual impairment review date because it was determined to be more likely than not that fair value exceeded carrying value. Adtalem has four reporting units that contained indefinite-lived intangible assets as of May 31, 2021. For indefinite- lived intangible assets, management first analyzes qualitative factors, including results of operations and business conditions of the four reporting units that contained indefinite-lived intangible assets, significant changes in cash flows at the individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceed carrying values to determine if it is more likely than not that the intangible assets associated with these reporting units have been impaired. In qualitatively assessing the indefinite-lived intangible assets of the four reporting units, it was determined that it was more likely than not that these assets’ fair values exceeded their carrying values as of the May 31, 2021 annual impairment review date. 104 Adtalem Global Education Inc. 13. Debt Long-term debt consisted of the following senior secured credit facilities (in thousands): Total debt: Senior Secured Notes due 2028 Term B Loan Total principal payments due Unamortized debt issuance costs Total amount outstanding Less current portion: Term B Loan Noncurrent portion June 30, 2021 2020 $ $ 800,000 291,000 1,091,000 (20,289) 1,070,711 — 294,000 294,000 (4,885) 289,115 (3,000) 1,067,711 $ $ (3,000) 286,115 Scheduled future maturities of long-term debt were as follows (in thousands): Fiscal Year 2022 2023 2024 2025 2026 Thereafter Total Credit Agreement Maturity Payments 3,000 3,000 3,000 282,000 — 800,000 1,091,000 $ $ On April 13, 2018, Adtalem entered into a credit agreement (the “Credit Agreement”) that provides for (1) a $300 million revolving facility (“Revolver”) with a maturity date of April 13, 2023 and (2) a $300 million senior secured Term B loan (“Term B Loan”) with a maturity date of April 13, 2025. We refer to the Revolver and Term B Loan collectively as the “Credit Facility.” The Revolver has availability for currencies other than U.S. dollars of up to $200 million and $100 million available for letters of credit. Subject to certain conditions set forth in the Credit Agreement, the Credit Facility may be increased by $250 million. On December 4, 2020, Adtalem entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement. The Amendment provides for, among other things, certain amendments to the Credit Agreement (i) to permit the issuance of up to $1 billion in debt securities by a newly formed wholly-owned “escrow” subsidiary of Adtalem, the proceeds of which issuance, if any, are expected to be held in escrow and used to finance a portion of the Acquisition and to pay transaction fees and expenses related thereto and (ii) to extend the time period Adtalem has to reinvest proceeds from the disposition of certain Brazilian assets of Adtalem before Adtalem is required to prepay the term loans under the Credit Agreement with such proceeds. The Acquisition would satisfy this reinvestment requirement. Interest on our Term B Loan and the Revolver is set based on LIBOR, which is based on observable market transactions. The U.K. Financial Conduct Authority, which regulates LIBOR, has announced that it has commitments from panel banks to continue to contribute to LIBOR through the end of calendar year 2021, but that it will not use its powers to compel contributions beyond such date. Various parties, including government agencies, are seeking to identify an alternative rate to replace LIBOR. Management is monitoring their efforts, and evaluating the need for an amendment to the Credit Agreement to accommodate a replacement rate. The Credit Agreement does not specify a replacement rate for LIBOR. 105 2021 Form 10-K Term B Loan For Eurocurrency rate loans, Term B Loan interest is equal to LIBOR or a LIBOR-equivalent rate plus 3%. For base rate loans, Term B Loan interest is equal to the base rate plus 2%. The Term B Loan requires quarterly installment payments of $750,000, with the balance due at maturity on April 13, 2025. As of June 30, 2021 and 2020, the interest rate for borrowings under the Term B Loan facility was 3.10% and 3.18%, respectively, which approximated the effective interest rate. On March 24, 2020, we executed a pay-fixed, receive-variable interest rate swap agreement (the “Swap”) with a multinational financial institution to mitigate risks associated with the variable interest rate on our Term B Loan debt. We pay interest at a fixed rate of 0.946% and receive variable interest of one-month LIBOR (subject to a minimum of 0.00%), on a notional amount equal to the amount outstanding under the Term B Loan. The effective date of the Swap was March 31, 2020 and settlements with the counterparty occur on a monthly basis. The Swap was set to terminate on February 28, 2025. The Swap does not specify a replacement rate for LIBOR. Various parties, including government agencies, are seeking to identify an alternative rate to replace LIBOR. Management is monitoring their efforts, and evaluating the need for an amendment to the Swap to accommodate a replacement rate. During the operating term of the Swap, the annual interest rate on the amount of the Term B Loan is fixed at 3.946% (including the impact of our current 3% interest rate margin on LIBOR loans) for the applicable interest rate period. The Swap is designated as a cash flow hedge and as such, changes in its fair value are recognized in accumulated other comprehensive loss on the Consolidated Balance Sheet and are reclassified into the Consolidated Statements of Income (Loss) within interest expense in the periods in which the hedged transactions affect earnings. On July 29, 2021, prior to refinancing our Credit Agreement (as discussed below), we settled and terminated the Swap for $4.5 million, which resulted in a charge to interest expense for this amount in the first quarter of fiscal year 2022. Revolver Revolver interest is equal to LIBOR or a LIBOR-equivalent rate for Eurocurrency rate loans or a base rate, plus an applicable margin based on Adtalem’s consolidated leverage ratio, as defined in the Credit Agreement. The applicable rate ranges from 1.75% to 2.75% for Eurocurrency rate loans and from 0.75% to 1.75% for base rate loans. There were no outstanding borrowings under the Revolver as of each of June 30, 2021 and 2020. Adtalem had a letter of credit outstanding of $68.4 million as of each of June 30, 2021 and 2020. This letter of credit was posted in the second quarter of fiscal year 2017 in relation to a settlement with the Federal Trade Commission (“FTC”) and requires the letter of credit to be equal to the greater of 10% of DeVry University’s annual Title IV disbursements or $68.4 million for a five-year period. As of June 30, 2021, Adtalem is charged an annual fee equal to 2.25% of the undrawn face amount of the outstanding letters of credit under the Revolver, payable quarterly. Adtalem continues to post the letter of credit in relation to the settlement with the FTC on behalf of DeVry University and is reimbursed by DeVry University for 2.00% of the outstanding amount of this letter of credit. The Credit Agreement also requires payment of a commitment fee equal to 0.40% as of June 30, 2021, of the undrawn portion of the Revolver. The amount undrawn under the Revolver, which includes the impact of the outstanding letters of credit, was $231.6 million as of June 30, 2021. The letter of credit fees and commitment fees are adjustable quarterly, based upon Adtalem’s achievement of certain financial ratios. Senior Secured Notes due 2028 On March 1, 2021, Adtalem Escrow Corporation (the “Escrow Issuer”), a wholly-owned subsidiary of Adtalem, issued $800 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028, pursuant to an indenture, dated as of March 1, 2021 (the “Indenture”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee and notes collateral agent. The Notes were sold within the U.S. only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the U.S. to non-U.S. persons in reliance on Regulation S under the Securities Act. 106 Adtalem Global Education Inc.The Escrow Issuer has deposited the net proceeds of the offering, along with certain additional funds, into a segregated depositary account (the “Escrow Account”). On August 12, 2021, Adtalem used the net proceeds of the offering, along with other financing sources, to finance the purchase price paid in connection with the Acquisition and to pay related fees and expenses. On August 12, 2021, the Escrow Issuer merged with and into Adtalem, with Adtalem continuing as the surviving corporation (the “Escrow Merger”), and Adtalem assumed all of the Escrow Issuer's obligations under the Notes, the Indenture, any supplemental indentures thereto, the applicable collateral documents, and the other applicable documents (the “Assumption”) and subject to the satisfaction of certain other conditions, the net proceeds from the offering and the other additional funds were released from the Escrow Account to the Issuer or its designee. The term “Issuer” refers (a) prior to the Assumption, to the Escrow Issuer and (b) from and after the Assumption, to Adtalem. The Notes were issued at 100.0% of their par value. The Notes bear interest at a rate of 5.50% per year, payable semi- annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2021, to holders of record on the preceding February 15 and August 15, as the case may be. The Notes were initially the senior secured obligations of the Escrow Issuer, secured only by the amounts deposited in the Escrow Account. As of August 12, 2021, the Notes are guaranteed by certain of Adtalem’s subsidiaries that are borrowers or guarantors under its senior secured credit facilities and certain of its other senior indebtedness, subject to certain exceptions (the “Guarantors”). As of August 12, 2021, the Notes are secured, subject to permitted liens and certain other exceptions, by first priority liens on the same collateral that secures the obligations under Adtalem’s senior secured credit facilities. At any time prior to March 1, 2024, the Issuer may redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus a make-whole premium set forth in the Indenture and accrued and unpaid interest, if any, to, but not including, the redemption date. The Issuer may redeem the Notes, in whole or in part, at any time on or after March 1, 2024 at redemption prices equal to 102.75%, 101.375% and 100% of the principal amount of the Notes redeemed if the redemption occurs during the twelve-month periods beginning on March 1 of the years 2024, 2025, and 2026 and thereafter, respectively, in each case plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date. In addition, at any time prior to March 1, 2024, the Issuer may redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 105.5% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds the Issuer receives from one or more qualifying equity offerings. The Notes contain covenants that limit the ability of the Issuer and each of the Guarantors to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the Guarantors to make dividends or other payments to Adtalem; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Indenture and the Notes also provide for certain customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become or be declared due and payable or would allow the trustee or the holders of at least 25% in principal amount of the then outstanding Notes to declare the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable by notice in writing to the Issuer and, upon such declaration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. In addition to the $800 million deposited in the Escrow Account, Adtalem was required to transfer an amount equal to the accrued interest related to the Notes on a monthly basis into the Escrow Account. The funds held in the Escrow Account to fund the Acquisition of $818.6 million is recorded within restricted cash on the Consolidated Balance Sheet as of June 30, 2021 and are not available to Adtalem for general corporate purposes. Accrued interest on the Notes of $14.7 million is recorded within accrued liabilities on the Consolidated Balance Sheet as of June 30, 2021. New Credit Facility On February 12, 2021, Adtalem placed a $850 million senior secured term loan (“New Term Loan”) into the loan market to provide future funding for the Acquisition. For 30 days beginning on March 15, 2021, Adtalem began accruing ticking fees at 50% of the applicable 4.5% margin. Beginning on April 14, 2021 and until the closing date of the New Term Loan, 107 2021 Form 10-KAdtalem is accruing ticking fees at a rate equal to LIBOR plus a 4.5% margin, subject to a LIBOR floor of 0.75%. Accrued ticking fees of $11.3 million is recorded within accrued liabilities on the Consolidated Balance Sheet as of June 30, 2021. All ticking fees were paid at the time of the New Term Loan closing date and are recorded within interest expense as accrued in the Consolidated Statements of Income (Loss). On August 12, 2021, Adtalem replaced the existing Credit Facility and Credit Agreement by entering into its new credit agreement (the “New Credit Agreement”) that provides for (1) a $850 million senior secured term loan with a maturity date of August 12, 2028 and (2) a $400 million senior secured revolving loan facility (“New Revolver”) with a maturity date of August 12, 2026. We refer to the New Term Loan and New Revolver collectively as the “New Credit Facility.” The Revolver has availability for letters of credit and currencies other than U.S. dollars of up to $400 million. The New Term Loan was issued at a price of 99% of its principal amount, resulting in an original issue discount of 1%. Borrowings under the New Term Loan bear interest at Adtalem’s option at a rate per annum equal to LIBOR, subject to a LIBOR floor of 0.75%, plus an applicable margin ranging from 4.00% to 4.50% for eurocurrency term loan borrowings or 3.00% to 3.50% for alternative base rate (“ABR”) borrowings and borrowings under the New Revolver bear interest at a rate per annum equal to LIBOR, subject to a LIBOR floor of 0.75%, plus an applicable margin ranging from 3.75% to 4.25% for LIBOR borrowings or 2.75% to 3.25% for ABR borrowings, in each case depending on Adtalem’s net first lien leverage ratio for such period. The New Term Loan requires quarterly installment payments of $2,125,000 beginning on March 31, 2022. As discussed above, management is monitoring the future need for a replacement rate for LIBOR. The proceeds of the New Credit Facility were used, among other things, to finance the Acquisition, refinance Adtalem’s existing credit agreement, pay fees and expenses related to the Acquisition, and in the case of the New Revolver, to finance ongoing working capital and for general corporate purposes. Debt Issuance Costs The debt issuance costs related to the Notes and Term B Loan are capitalized and presented as a direct deduction from the face amount of the debt, while the debt issuance costs related to the Revolver are classified as other assets, net on the Consolidated Balance Sheets. The debt issuance costs are amortized as interest expense over seven years for the Notes and Term B Loan and over five years for the Revolver. The following table summarizes the debt issuance costs activity for fiscal year 2021 (in thousands): Unamortized debt issuance costs as of June 30, 2020 Payment of debt issuance costs Amortization of debt issuance costs Unamortized debt issuance costs as of June 30, 2021 $ $ — $ 16,325 (777) 15,548 $ 4,885 $ 1,015 (1,159) 4,741 $ 1,516 $ 707 (721) 1,502 $ 6,401 18,047 (2,657) 21,791 Notes Term B Loan Revolver Total Covenants and Guarantees The Credit Agreement and the Notes contain customary covenants, including restrictions on our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interest on assets, make acquisitions, loans, advances or investments, or sell or otherwise transfer assets. The Credit Agreement contains covenants that, among other things, require maintenance of certain financial ratios. Maintenance of these financial ratios could place restrictions on Adtalem’s ability to pay dividends. Adtalem has not paid a dividend since December 2016. These financial ratios include a consolidated fixed charge coverage ratio, a consolidated leverage ratio, and a U.S. Department of Education financial responsibility ratio based upon a composite score of an equity ratio, a primary reserve ratio, and a net income ratio. Failure to maintain any of these ratios or to comply with other covenants contained in the Credit Agreement would constitute an event of default and could result in termination of the Credit Agreement and require payment of all outstanding borrowings and replacement of outstanding letters of credit. Adtalem was in compliance with the Credit Agreement debt covenants as of June 30, 2021. In addition, Adtalem was in compliance with the debt covenants related to the Notes as of June 30, 2021. The Term B Loan requires mandatory prepayments equal to a percentage of excess cash flow or equal to the net cash proceeds in excess of $50 million from a disposition which is not reinvested in assets within one-year from the date of disposition, among other mandatory prepayment terms (see the Credit Agreement, as filed under Form 8-K dated April 108 Adtalem Global Education Inc. 13, 2018, for additional information and term definitions). No mandatory prepayments have been required or made since the execution of the Credit Agreement. On December 4, 2020, Adtalem entered into the Amendment of the Credit Agreement, which extended the time period Adtalem has to reinvest proceeds from the disposition of certain Brazilian assets of Adtalem until March 25, 2022 before Adtalem is required to prepay the term loans under the Credit Agreement with such proceeds. The Acquisition would satisfy this reinvestment requirement. The stock of all U.S. and certain foreign subsidiaries of Adtalem is pledged as collateral for borrowings under the Credit Agreement. Our borrowings under the Credit Facility are guaranteed by us and all of our domestic subsidiaries (subject to certain exceptions) and secured by a first lien on our assets and the assets of our guarantor subsidiaries (excluding real estate), including capital stock of the subsidiaries. 14. Redeemable Noncontrolling Interest As of June 30, 2019, Adtalem maintained a 97.9% ownership interest in Adtalem Brazil with the remaining 2.1% owned by members of the Adtalem Brazil senior management group. Since July 1, 2015, Adtalem has had the right to exercise a call option and purchase any remaining Adtalem Brazil stock from Adtalem Brazil management. Likewise, Adtalem Brazil management has had the right to exercise a put option and sell its remaining ownership interest in Adtalem Brazil to Adtalem. In addition, Adtalem maintains a 71% ownership interest in EduPristine with the remaining 29% owned by Kaizen Management Advisors (“Kaizen”), an India-based private equity firm, as of June 30, 2021. Beginning on March 26, 2020, Adtalem has had the right to exercise a call option and purchase any remaining EduPristine stock from Kaizen. Likewise, Kaizen has had the right to exercise a put option and sell up to 33% of its remaining ownership interest in EduPristine to Adtalem. Beginning on March 26, 2022, Kaizen will have the right to exercise a put option and sell its remaining ownership interest in EduPristine to Adtalem. Since the put options are out of the control of Adtalem, authoritative guidance requires the noncontrolling interests, which includes the value of the put options, to be displayed outside of the equity section of the Consolidated Balance Sheets. On July 1, 2019, the Adtalem Brazil management noncontrolling members exercised their put option and sold their remaining ownership interest in Adtalem Brazil to Adtalem resulting in Adtalem owning 100% of Adtalem Brazil until the sale of Adtalem Brazil, which was completed on April 24, 2020. In the first quarter of fiscal year 2020, $6.2 million of redeemable noncontrolling interest was removed from the Consolidated Balance Sheet as a result of the put option exercise. The estimated fair value of Kaizen’s noncontrolling interest is $1.8 million as of June 30, 2021, resulting in a decrease in redemption value of Kaizen’s noncontrolling interest put option during the year ended June 30, 2021. The adjustment to increase or decrease the EduPristine noncontrolling interest for their respective proportionate share of EduPristine’s profit (loss) flows through the Consolidated Statements of Income (Loss) each reporting period based on Adtalem’s noncontrolling interest accounting policy. The adjustments to increase or decrease the put option to its expected redemption value each reporting period is recorded in retained earnings in accordance with GAAP. The following table shows the changes in redeemable noncontrolling interest balance (in thousands): Balance at beginning of period Net loss attributable to redeemable noncontrolling interest Decrease in redemption value of noncontrolling interest put option Payment for purchase of redeemable noncontrolling interest of subsidiary Balance at end of period Year Ended June 30, 2021 2020 2,852 $ (434) (628) — 1,790 $ 9,543 (444) — (6,247) 2,852 $ $ 109 2021 Form 10-K 15. Share Repurchases On November 8, 2018, we announced that the Board authorized Adtalem’s eleventh share repurchase program, which allowed Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The eleventh share repurchase program commenced in January 2019 and was completed in January 2021. On February 4, 2020, we announced that the Board authorized Adtalem’s twelfth share repurchase program, which allows Adtalem to repurchase up to $300 million of its common stock through December 31, 2021. The twelfth and current share repurchase program commenced in January 2021. Adtalem made share repurchases under its share repurchase programs as follows (in thousands, except shares and per share data): Total number of share repurchases Total cost of share repurchases Average price paid per share Year Ended June 30, Life-to-Date Current Share 2021 2,929,906 100,000 $ 34.13 $ 2020 3,838,275 136,889 $ 35.66 $ Repurchase Program 1,447,882 54,769 37.83 $ $ As of June 30, 2021, $245.2 million of authorized share repurchases were remaining under the current share repurchase program. Repurchases under our share repurchase programs were suspended on March 12, 2020 due to the economic uncertainty caused by the COVID-19 pandemic. In November 2020, Adtalem resumed repurchases under its share repurchase programs. Repurchases were again suspended in May 2021 after achieving management’s target of $100 million in repurchases for fiscal year 2021. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. These repurchases may be made through the open market, including block purchases, in privately negotiated transactions, or otherwise. Repurchases will be funded through available cash balances and/or borrowings and may be suspended or discontinued at any time. Shares of stock repurchased under the programs are held as treasury shares. These repurchased shares have reduced the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations. 110 Adtalem Global Education Inc. 16. Accumulated Other Comprehensive Loss The following table shows the changes in accumulated other comprehensive loss by component (in thousands): 2021 Year Ended June 30, 2020 2019 Foreign currency translation adjustments Beginning balance Gain (loss) on foreign currency translation Reclassification from other comprehensive income Ending balance Available-for-sale marketable securities Beginning balance, gross Beginning balance, tax effect Beginning balance, net of tax ASU 2016-01 cumulative effect adjustment Unrealized (loss) gain on available-for-sale marketable securities Tax effect Reclassification from other comprehensive income Ending balance $ $ $ $ (1,383) $ (137,389) $ (142,574) 5,185 — (1,383) $ (137,389) 713 — (670) $ (157,354) 293,360 242 $ (59) 183 — (75) 18 (126) — $ 131 $ (32) 99 — 111 (27) — 183 $ Interest rate swap Beginning balance, gross Beginning balance, tax effect Beginning balance, net of tax Unrealized gain (loss) on interest rate swap Tax effect Ending balance $ (10,399) $ 2,544 (7,855) 1,473 (313) (6,695) $ $ — $ — — (10,399) 2,544 (7,855) $ 537 (131) 406 (381) 98 (24) — 99 — — — — — — Total ending balance at June 30 $ (7,365) $ (9,055) $ (137,290) On April 24, 2020, Adtalem completed the sale of Adtalem Brazil. We recorded a reclassification from other comprehensive income of $293.4 million for the year ended June 30, 2020 due to the sale of Adtalem Brazil. This represents the cumulative foreign currency translation adjustments recorded in accumulated other comprehensive loss on the Consolidated Balance Sheet related to Adtalem Brazil as of April 24, 2020, which was recognized in net income in the Consolidated Statement of Loss for the year ended June 30, 2020. 17. Stock-Based Compensation Adtalem maintains two stock-based incentive plans: the Amended and Restated Incentive Plan of 2005 and the Fourth Amended and Restated Incentive Plan of 2013. Under these plans, directors, key executives, and managerial employees are eligible to receive incentive stock or nonqualified options to purchase shares of Adtalem’s common stock. The Fourth Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 also permit the granting of stock appreciation rights, restricted stock units (“RSUs”), performance-based RSUs, and other stock and cash- based compensation. Although options remain outstanding under the 2005 incentive plan, no further stock-based grants will be issued under this plan. The Fourth Amended and Restated Incentive Plan of 2013 and the Amended and Restated Incentive Plan of 2005 are administered by the Compensation Committee of the Board. Options are granted for terms of up to ten years and can vest immediately or over periods of up to five years. The requisite service period is equal to the vesting period. The option price under the plans is the fair market value of the shares on the date of the grant. Stock-based compensation expense is measured at the grant date based on the fair value of the award. Adtalem accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is 111 2021 Form 10-K recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized as expense over the employee requisite service period. We account for forfeitures of unvested awards in the period they occur. As of June 30, 2021, 3,688,061 shares were authorized for issuance but not issued or subject to outstanding awards under Adtalem’s stock-based incentive plans. The following is a summary of options activity for the year ended June 30, 2021: Number of Options Weighted-Average Exercise Price Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Weighted-Average Outstanding as of July 1, 2020 Granted Exercised Forfeited Expired Outstanding as of June 30, 2021 Exercisable as of June 30, 2021 1,439,630 $ 281,075 (72,673) (51,933) (35,050) 1,561,049 954,855 $ 31.95 32.03 18.01 36.87 41.84 32.05 29.43 6.1 $ 5.0 $ 8,862 7,640 The total intrinsic value of options exercised for the years ended June 30, 2021, 2020, and 2019 was $1.1 million, $1.2 million, and $4.4 million, respectively. The tax benefit from stock options exercised for the years ended June 30, 2021, 2020, and 2019 was $0.3 million, $0.3 million, and $1.0 million, respectively. The fair value of Adtalem’s stock option awards was estimated using a binomial model. This model uses historical cancellation and exercise experience of Adtalem to determine the option value. It also takes into account the illiquid nature of employee options during the vesting period. The weighted-average estimated grant date fair value of options granted at market price under Adtalem’s stock-based incentive plans during fiscal years 2021, 2020, and 2019 was $12.23, $16.98, and $20.96, per share, respectively. The fair value of Adtalem’s stock option grants was estimated assuming the following weighted-average assumptions: Expected life (in years) Expected volatility Risk-free interest rate Dividend yield 2021 6.54 39.27 % 0.45 % 0.00 % Fiscal Year 2020 6.51 37.66 % 1.40 % 0.00 % 2019 6.50 39.60 % 2.73 % 0.00 % The expected life of the options granted is based on the weighted-average exercise life with age and salary adjustment factors from historical exercise behavior. Adtalem’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant, and Adtalem’s long-term historical volatility. If factors change and different assumptions are employed in the valuation of stock-based grants in future periods, the stock-based compensation expense that Adtalem records may differ significantly from what was recorded in previous periods. During fiscal year 2021, Adtalem granted 620,000 RSUs to selected employees and directors. Of these, 191,850 are performance-based RSUs and 428,150 were non-performance-based RSUs. Performance-based RSUs are earned by the recipients over a three-year period based on achievement of return on invested capital and free cash flow per share. Certain awards are subject to achievement of a minimum level of Adtalem’s earnings before interest, taxes, depreciation, and amortization, calculated on a non-GAAP basis. Non-performance-based RSUs are subject to restrictions which lapse ratably over one, two, three, or four-year periods on the grant anniversary date based on the recipient’s continued service on the Board, employment with Adtalem, or upon retirement. During the restriction period, the recipient of the non- 112 Adtalem Global Education Inc. performance-based RSUs has the right to receive dividend equivalents, if any. This right does not pertain to the performance-based RSUs. The following is a summary of RSU activity for the year ended June 30, 2021: Outstanding as of July 1, 2020 Granted Vested Forfeited Outstanding as of June 30, 2021 Weighted-Average Number of RSUs 767,973 620,000 (372,096) (127,872) 888,005 $ $ Grant Date Fair Value 39.42 31.26 34.99 37.54 35.84 The weighted-average estimated grant date fair values of RSUs granted at market price under Adtalem’s stock-based incentive plans during fiscal years 2021, 2020, and 2019 were $31.26, $42.22, and $49.57, per share, respectively. Stock-based compensation expense, which is primarily included in student services and administrative expense, and the related income tax benefit were as follows (in thousands): Stock-based compensation Income tax benefit Stock-based compensation, net of income taxes 2021 13,875 $ (3,020) 10,855 $ Year Ended June 30, 2020 14,584 $ (4,611) 9,973 $ 2019 13,217 (4,685) 8,532 $ $ As of June 30, 2021, $20.9 million of total pre-tax unrecognized stock-based compensation expense related to unvested grants is expected to be recognized over a weighted-average period of 2.5 years. The total fair value of options and RSUs vested during the years ended June 30, 2021, 2020, and 2019 was $17.3 million, $14.5 million, and $14.9 million, respectively. There was no capitalized stock-based compensation cost as of each of June 30, 2021 and 2020. Adtalem has an established practice of issuing new shares of common stock to satisfy stock-based grant exercises. However, Adtalem also may issue treasury shares to satisfy stock-based grant exercises under certain of its stock-based incentive plans. 18. Employee Benefit Plans 401(k) Retirement Plan All U.S. employees who meet certain eligibility requirements can participate in Adtalem’s 401(k) Retirement Plan. Effective January 1, 2020, Adtalem makes a matching employer contribution into the 401(k) Retirement Plan of 100% up to the first 6% of the participant’s compensation and eliminated future discretionary contributions. Prior to January 1, 2020, Adtalem made matching employer contributions into the 401(k) Retirement Plan of 100% up to the first 4% of the participant’s compensation and made discretionary contributions in an amount determined annually. Expenses for the matching and discretionary contributions under the plan were $14.2 million, $11.2 million, and $10.6 million for the years ended June 30, 2021, 2020, and 2019, respectively. Colleague Stock Purchase Plan Under provisions of Adtalem’s current Colleague Stock Purchase Plan, any eligible employee may authorize Adtalem to withhold up to $25,000 of annual wages to purchase common stock of Adtalem. Adtalem implemented a new Colleague Stock Purchase Plan approved by stockholders at Adtalem’s annual meeting of stockholders held on November 6, 2019 which allows for the issuance of 500,000 shares. Adtalem terminated the ability to purchase shares of common stock under the old Colleague Stock Purchase Plan and the last purchase made through the old Colleague Stock Purchase Plan was on February 28, 2019. Currently, employees can purchase Adtalem’s common stock at 90% of the prevailing market price on 113 2021 Form 10-K the purchase date. Adtalem subsidizes the remaining 10% and pays all brokerage commissions and administrative fees associated with the plan. These expenses were insignificant for the years ended June 30, 2021, 2020, and 2019. Total shares issued under the plans were 8,857, 705, and 8,895 in fiscal years 2021, 2020, and 2019, respectively. These plans are intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. Currently, Adtalem is re-issuing treasury shares to satisfy colleague share purchases under this plan. Nonqualified Deferred Compensation Plan Adtalem has a nonqualified deferred compensation plan (“NDCP Plan”) for highly compensated employees and its Board members. The plan allows participants to make tax-deferred contributions that cannot be made under the 401(k) Retirement Plan because of Internal Revenue Service limitations. The plan permits the deferral of up to 50% of a participant’s salary, and up to 100% of a participant’s bonus or board fee. Adtalem currently matches up to 6% of the total eligible compensation of participants who make contributions under the plan. Amounts contributed and deferred under the plan are credited or charged with the performance of investment options offered under the plan as elected by the participants. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Total liabilities under the NDCP Plan of $20.3 million and $17.6 million as of June 30, 2021 and 2020, respectively, were included on the Consolidated Balance Sheet within accrued liabilities. The increase or decrease in the fair value of the liabilities under the NDCP Plan is included in student services and administrative expense in the Consolidated Statements of Income (Loss). We have elected to fund our NDCP Plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are placed in investments whose performance is consistent with the investments chosen by participants under their NDCP Plan accounts, which are designated as trading securities and carried at fair value. The fair value of the investments in the rabbi trust of $20.6 million and $9.0 million as of June 30, 2021 and 2020, respectively, were included on the Consolidated Balance Sheet within prepaid expenses and other current assets. We record trading gains and losses in investment gain (loss) in the Consolidated Statements of Income (Loss). 19. Fair Value Measurements Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets, and assets of businesses where the long-term value of the operations have been impaired. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Observable inputs other than prices included in Level 1, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model- derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, Adtalem uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In cases where market prices are not available, Adtalem makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3. 114 Adtalem Global Education Inc.Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. The carrying value of our cash and cash equivalents approximates fair value because of their short-term nature and is classified as Level 1. Adtalem maintains a rabbi trust with investments in stock and bond mutual funds to fund obligations under a nonqualified deferred compensation plan. The fair value of the investments in the rabbi trust of $20.6 million and $9.0 million as of June 30, 2021 and 2020, respectively, were included on the Consolidated Balance Sheet within prepaid expenses and other current assets. All investments in marketable securities are recorded at fair value based upon quoted market prices using Level 1 inputs. The fair value of the credit extension programs, which approximates its carrying value, included in accounts receivable, net and other assets, net on the Consolidated Balance Sheets as of June 30, 2021 and 2020 of $29.2 million and $34.3 million, respectively, is estimated by discounting the future cash flows using current rates for similar arrangements and is classified as Level 2. See Note 9 “Accounts Receivable and Credit Losses” for additional information on these credit extension programs. In connection with the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the Note. The Note bears interest at a rate of 4% per annum, payable annually in arrears, and has a maturity date of January 1, 2022. The fair value of the DeVry University loan receivable approximates its carrying value of $10.0 million for each reporting date. The carrying value is included on the Consolidated Balance Sheet in prepaid expenses and other current assets as of June 30, 2021 and in other assets, net as of June 30, 2020. Fair value is estimated by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 4% per annum and is classified as Level 2. On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep. In connection with the sale, Adtalem holds a mortgage from DePaul College Prep for $46.8 million. The mortgage is due on July 31, 2024 as a balloon payment and bears interest at a rate of 4% per annum, payable monthly. The carrying value of the DePaul College Prep loan receivable, which approximates its fair value, included in other assets, net on the Consolidated Balance Sheet as of June 30, 2021 is $42.7 million and $41.4 million, respectively. Fair value is estimated by discounting the future cash flows using an average of current rates for similar arrangements, which is estimated at 7% per annum and is classified as Level 2. Adtalem has a nonqualified deferred compensation plan for highly compensated employees and its Board members. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Changes in the fair value of the nonqualified deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. Total liabilities under the plan as of June 30, 2021 and 2020, were $20.3 million and $17.6 million, respectively, and are included in accrued liabilities on the Consolidated Balance Sheets. The fair value of the nonqualified deferred compensation obligation is classified as Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments. As of June 30, 2021 and 2020, borrowings under our long-term debt agreements were $1,091.0 million and $294.0 million, respectively. The carrying value of our long-term debt approximates fair value because the interest rates on these borrowings approximated the effective interest rate and is classified as Level 2. See Note 13 “Debt” for additional information on our long-term debt agreements. On March 24, 2020, we executed a pay-fixed, receive-variable interest rate swap agreement with a multinational financial institution to fully mitigate risks associated with the variable interest rate on our Term B Loan debt with an effective date of March 31, 2020. The fair value of our Swap is based in part on data received from the counterparty, and represents the estimated amount we would receive or pay to settle the Swap, taking into consideration current and projected future interest rates as well as the creditworthiness of the counterparty, all of which can be validated through readily observable data from external sources, in which case the measurements are classified within Level 2. The fair value of the Swap is represented within other liabilities on the Consolidated Balance Sheet with a balance of $8.9 million and $10.4 115 2021 Form 10-Kmillion as of June 30, 2021 and 2020, respectively. On July 29, 2021, prior to refinancing our Credit Agreement, we settled and terminated the Swap for $4.5 million, which resulted in a charge to interest expense for this amount in the first quarter of fiscal year 2022. See Note 13 “Debt” for additional information on the Swap. As of June 30, 2021 and 2020, there were no assets or liabilities measured at fair value using Level 3 inputs. Assets measured at fair value on a nonrecurring basis include goodwill and indefinite-lived intangibles arising from a business combination. These assets are not amortized and charged to expense over time. Instead, goodwill and indefinite- lived intangibles must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2021. See Note 12 “Goodwill and Intangible Assets” for additional information on the impairment review, including valuation techniques and assumptions. 20. Commitments and Contingencies Adtalem is subject to lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the normal conduct of its business. As of June 30, 2021, Adtalem believes it has adequately reserved for potential losses. The following is a description of pending legal and regulatory matters that may be considered other than ordinary, routine, and incidental to the business. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. We have recorded accruals for those matters where management believes a loss is probable and can be reasonably estimated as of June 30, 2021. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. The continued defense, resolution, or settlement of any of the following matters could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations, and cash flows, and result in the imposition of significant restrictions on us and our ability to operate. On April 13, 2018, a putative class action lawsuit was filed by Nicole Versetto, individually and on behalf of others similarly situated, against the Adtalem, DeVry University Inc., and DeVry/New York Inc. (collectively the “Adtalem Parties”) in the Circuit Court of Cook County, Illinois, Chancery Division. The complaint was filed on behalf of herself and three separate classes of similarly situated individuals who were citizens of the State of Illinois and who purchased or paid for a DeVry University program between January 1, 2008 and April 8, 2016. The plaintiff claims that defendants made false or misleading statements regarding DeVry University’s graduate employment rate and asserts causes of action under the Illinois Uniform Deceptive Trade Practices Act, Illinois Consumer Fraud and Deceptive Trade Practices Act, and Illinois Private Business and Vocational Schools Act, and claims of breach of contract, fraudulent misrepresentation, concealment, negligence, breach of fiduciary duty, conversion, unjust enrichment, and declaratory relief as to violations of state law. The plaintiff seeks compensatory, exemplary, punitive, treble, and statutory penalties and damages, including pre-judgment and post-judgment interest, in addition to restitution, declaratory and injunctive relief, and attorneys’ fees. The Adtalem Parties moved to dismiss this complaint on June 20, 2018. On March 11, 2019, the Court granted plaintiff’s motion for leave to file an amended complaint. The plaintiff filed an amended complaint that same day, asserting similar claims, with new lead plaintiff, Dave McCormick. The defendants filed a motion to dismiss plaintiff’s amended complaint on April 15, 2019 and the Court granted Defendants’ motion on July 29, 2019, with leave to amend. The plaintiff filed an amended complaint on August 26, 2019. On October 18, 2019, defendants moved to dismiss this complaint as it was substantially similar to the one the Court previously dismissed. The Court granted a Motion for Preliminary Approval of Class Action Settlement (the “Settlement”) on May 28, 2020. In conjunction with the Settlement, Adtalem was required to establish a settlement fund by placing $44.95 million into an escrow account, which is recorded within prepaid expenses and other current assets on the Consolidated Balance Sheet as of each of June 30, 2021 and 2020. Adtalem management determined a loss contingency was probable and reasonably estimable. As such, we also recorded a loss contingency accrual of $44.95 million on the Consolidated Balance Sheet as of June 30, 2020 and charged the contingency loss within discontinued operations in the Consolidated Statement of Income (Loss) for the year ended June 30, 2020. As of June 30, 2020, we had anticipated the potential payments related to this loss contingency to be made from the escrow account during fiscal year 2021. We now anticipate the potential payments related to this loss contingency to be made from the escrow account during fiscal year 2022. This loss contingency estimate could differ from actual results and result in additional charges or reversals in future periods. The Court issued an order approving the settlement on October 7, 2020, and dismissed the action with prejudice. On November 2, 2020, Stoltmann Law Offices filed on behalf of Jose David 116 Adtalem Global Education Inc.Valderrama, a class member who objected to the terms of the settlement, a notice to appeal the Court’s order approving the settlement. On November 5, 2020, Richard Peart, another class member who objected to the terms of the settlement, filed a notice to appeal the Court’s order approving the settlement. Those appeals have been consolidated before the Appellate Court of Illinois, First District and have been fully briefed. On January 25, 2018, the Carlson Law Firm (“Carlson”) filed a lawsuit against Adtalem and DeVry University, Inc., on behalf of 71 individual former DeVry University students in Rangel v. Adtalem and DeVry University, Inc. Carlson filed this lawsuit in the United States District Court for the Western District of Texas. Plaintiffs contend that DeVry University “made deceptive representations about the benefits of obtaining a degree from DeVry University” in violation of Texas state laws and seek full restitution of all monies paid to DeVry University and any student loan lenders, punitive damages, and attorneys’ fees. On May 8, 2018, Carlson filed an amended complaint asserting the same claims which dismissed the claims of 6 students and added claims for 2 other students. The defendants moved to dismiss this complaint on June 5, 2018. On June 27, 2018, Carlson filed a second lawsuit on behalf of 32 former DeVry University students against Adtalem and DeVry University, Inc. in Lindberg v. Adtalem and DeVry University, Inc. Carlson filed this lawsuit in the United States District Court for the Western District of Texas. The allegations are identical to the allegations in the lawsuit Carlson filed on January 25, 2018. Specifically, plaintiffs contend that DeVry University “made deceptive representations about the benefits of obtaining a degree from DeVry University” in violation of Texas state laws and seek full restitution of all monies paid to DeVry University and any student loan lenders, punitive damages, and attorneys’ fees. The defendants moved to dismiss this complaint on August 28, 2018. The court consolidated these two lawsuits on December 10, 2018. The defendants moved to dismiss the consolidated action on December 18, 2018. On January 2, 2019, Carlson filed a motion to intervene on behalf of 13 additional former DeVry University students seeking to join the consolidated lawsuit. The parties re-filed their briefing on the motions to dismiss so that the motion would apply to all three groups of plaintiffs. On April 24, 2019, the Court granted Adtalem’s and DeVry University’s motions to dismiss, with leave to amend. The plaintiffs filed a second amended complaint on June 7, 2019, that dismissed 3 plaintiffs and aggregated the claims of all remaining plaintiffs, now totaling 109, into a single pleading. Defendants moved to dismiss the complaint on July 5, 2019. The motion to dismiss was referred to a magistrate judge. On December 13, 2019, the magistrate judge issued a report and recommendation denying defendants’ motion to dismiss. On January 3, 2020, defendants filed their objections to the report and recommendation on the motion to dismiss, and plaintiffs filed a response to the objections on January 8, 2020. The District Court judge adopted the Magistrate Judge’s report and recommendations on March 12, 2020, and the defendants filed an answer to the complaint on April 10, 2020. In conjunction with the Alvarez v. Adtalem matter referenced below, the parties participated in a mediation on August 4, 2020. On October 14, 2020, through continued negotiations with the mediator, the parties reached a confidential agreement in principal to settle all claims other than for one plaintiff. After finalizing the settlement agreement, the parties filed on December 31, 2020 a joint stipulation of dismissal which dismissed 107 of the 109 plaintiffs. Counsel for plaintiffs moved to withdraw as counsel for one of the remaining two plaintiffs, and on January 4, 2021, the Court granted the motion to withdraw as counsel. On April 9, 2021, the Court dismissed this plaintiffs’ claims for failure to prosecute her claims. The last plaintiff reached a settlement agreement with defendants and the Court dismissed this plaintiff’s claims on April 22, 2021. On April 4, 2019, the Carlson Law Firm sent notice pursuant to California Legal Remedies Act, Civil Code § 1750, of 105 individuals who purportedly have claims against DeVry University and Adtalem based on allegedly deceptive comments made about the benefits of obtaining a DeVry University degree; specifically, that 90% of graduates obtained a job in their chosen field of study within six months of graduation, and that graduates were paid more than graduates of other universities. On July 16, 2019, the Carlson Law Firm filed a lawsuit in the United States District Court for the Northern District of California – San Jose Division against Adtalem and DeVry University on behalf of 102 individual former DeVry University students in Alvarez v. Adtalem and DeVry University, Inc. The plaintiffs contend that defendants misrepresented the benefits of graduating from DeVry University and falsely and misleadingly advertised the employment rate and income rate of their graduates to induce potential students to purchase educational products and services, and to remain students through graduation. The lawsuit seeks exemplary damages, restitution, economic damages, punitive damages, pre- and post-judgment interest, attorneys’ fees and the cost of suit. The plaintiffs brought claims for fraud by misrepresentation, fraud by concealment, negligent misrepresentation, civil theft, violation of the California Consumer Legal Remedies Act, violation of California’s Unfair Competition Law, and violation of California’s False Advertising Law. Defendants filed a motion to dismiss the complaint on October 1, 2019. On December 16, 2019, the Court granted in part and denied in part the motion to dismiss. Defendants filed an answer to the complaint on January 13, 2020. Plaintiffs filed an amended complaint on January 31, 2020, which added 12 additional plaintiffs and dismissed 2 others. Defendants filed an amended answer on March 2, 2020. The parties participated in a court-ordered mediation on August 4, 2020. On 117 2021 Form 10-KOctober 14, 2020, through continued negotiations with the mediator, the parties reached a confidential agreement in principal to settle all claims other than for three plaintiffs. After finalizing the settlement agreement, the parties filed on December 31, 2020 a joint stipulation of dismissal which dismissed 108 of the 112 plaintiffs. On January 19, 2021, the Court entered an order dismissing with prejudice all the claims for the 108 plaintiffs. Of the remaining four plaintiffs, one reached a settlement agreement with defendants and executed the necessary settlement documentation. On April 13, 2021, the Court dismissed this plaintiff’s claim with prejudice. On December 9, 2020, counsel for the final three plaintiffs moved to withdraw as their counsel, and the Court granted that motion on January 21, 2021. Defendants filed a motion to dismiss the last three plaintiffs on March 31, 2021. The last three plaintiffs did not timely respond to the motion to dismiss. As such, the Court issued an order to show cause why the claims of the last three remaining plaintiffs should not be dismissed. When the remaining three plaintiffs failed to file their responses, the Court dismissed the case on June 1, 2021. Stoltmann Law Offices is representing hundreds of individuals who have filed claims with the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) alleging fraud-based claims based on DeVry University’s graduate employment statistics. Stoltmann Law Offices has paid the filing fees for certain of these arbitrations to move forward. JAMS has sent commencement letters in several waves. Respondents have filed answers in response to certain of these arbitration demands. These arbitrations are in various stages of litigation. Adtalem believes the allegations in these arbitrations are without merit and intends to vigorously defend those claims. On January 19, 2021, a putative class action was filed in the United States District Court for the Northern District of Ohio against Chamberlain by Tanesia Dean on behalf of herself and similarly situated students of Chamberlain. The complaint alleged breach of contract and unjust enrichment claims against Chamberlain related to its decision to transition all classes online in March 2020, in light of the global pandemic, without altering tuition or fees. The putative class was defined to include all students, nationwide, who paid tuition and fees during the following academic sessions: May 2020, July 2020, September 2020, November 2020, and January 2021. Plaintiff sought monetary relief exceeding $5 million, and attorneys’ fees, costs, and expenses. On April 5, 2021, Chamberlain filed a motion to dismiss the complaint in its entirety. The motion to dismiss was granted in full on August 16, 2021 and the case was dismissed. Plaintiff has 30 days to appeal the ruling. On March 12, 2021, Travontae Johnson, a current student of Chamberlain, filed a putative class action against Chamberlain in the Circuit Court of Cook County, Illinois, Chancery Division. The plaintiff claims that Chamberlain’s use of Respondus Monitor, an online remote proctoring tool for student examinations violated the Illinois Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/15. More particularly, the plaintiff claims that Chamberlain required students to use Respondus Monitor, which collected, captured, stored, used, and disclosed students’ biometric identifiers and biometric information without written and informed consent. The plaintiff also alleges that Chamberlain lacked a legally compliant written policy establishing a retention schedule and guidelines for destroying biometric identifiers and biometric information. The potential class purportedly includes all students who took an assessment using the proctoring tool, as a student of Chamberlain in Illinois, at any time from March 12, 2016 through January 20, 2021. The plaintiff and the putative class seek damages in excess of $50,000, and attorneys’ fees and costs. The plaintiff and class also seek an unspecified amount of enhanced damages based on alleged negligent or reckless conduct by Chamberlain. On April 19, 2021 and May 5, 2021, Chamberlain filed a motion for extension of time to answer or otherwise plead, which resulted in an extension until June 16, 2021. On June 16, 2021, Chamberlain filed a motion to dismiss plaintiff’s complaint. On June 29, 2021, plaintiff filed an amended complaint. On July 19, 2021, Chamberlain filed its motion to dismiss the amended complaint. Chamberlain believes the allegations are without merit and intends to vigorously defend this case. 21. Segment Information 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. Discontinued operations assets are included in the table below to reconcile to total consolidated assets presented on the Consolidated Balance Sheets. 118 Adtalem Global Education Inc.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. On August 4, 2021, Adtalem announced we are exploring strategic alternatives for the Financial Services segment. 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, gain on sale of assets, and settlement gains. 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.” 119 2021 Form 10-KSummary financial information by reportable segment is as follows (in thousands): 2021 Year Ended June 30, 2020 2019 $ 906,901 $ 205,479 — 849,861 167,211 (3,229) $ 1,112,380 $ 1,052,001 $ 1,013,843 866,428 $ 185,573 — $ 196,703 $ 31,405 (25,228) 202,880 167,744 $ 22,464 (24,099) 166,109 181,217 35,467 (33,965) 182,719 (9,804) (31,593) — — 161,483 (34,633) (28,628) — 4,779 — 142,260 94,919 (53,067) — — 26,178 155,830 (16,083) $ 126,850 $ 237,179 $ 139,747 $ 1,257,278 $ 1,231,951 $ 814,728 582,327 263,242 582,399 $ 3,053,836 $ 2,228,687 $ 2,242,696 577,958 1,218,600 — 580,272 416,464 — $ $ $ $ $ $ 32,752 $ 8,783 7,129 48,664 $ 25,334 $ 4,532 14,271 44,137 $ 30,554 $ 3,568 3,476 37,598 $ 29,064 $ 2,010 3,354 34,428 $ 47,410 1,678 8,486 57,574 28,025 1,849 3,885 33,759 10,073 $ 10,073 $ 10,262 $ 10,262 $ 6,947 6,947 Revenue: Medical and Healthcare Financial Services Home Office and Other Total consolidated revenue Operating income excluding special items: Medical and Healthcare Financial Services Home Office and Other Total consolidated operating income excluding special items Reconciliation to Consolidated Financial Statements: Restructuring expense Business acquisition and integration expense Gain on sale of assets Settlement gains Total consolidated operating income Net other (expense) income Total consolidated income from continuing operations before income taxes Segment assets: Medical and Healthcare Financial Services Home Office and Other Discontinued Operations Total consolidated assets Capital expenditures: Medical and Healthcare Financial Services Home Office and Other Total consolidated capital expenditures Depreciation expense: Medical and Healthcare Financial Services Home Office and Other Total consolidated depreciation expense Intangible asset amortization expense: Financial Services Total consolidated intangible asset amortization expense 120 Adtalem Global Education Inc. 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): Revenue from unaffiliated customers: Domestic operations International operations: Barbados, St. Kitts, and St. Maarten Other Total international Total consolidated revenue Long-lived assets: Domestic operations International operations: Barbados, St. Kitts, and St. Maarten Other Total international Total consolidated long-lived assets 2021 Year Ended June 30, 2020 2019 $ 717,974 $ 651,342 $ 606,363 343,087 51,319 394,406 362,427 45,053 407,480 $ 1,112,380 $ 1,052,001 $ 1,013,843 354,773 45,886 400,659 $ 301,294 $ 273,921 $ 134,401 164,337 549 164,886 466,180 $ 185,362 1,754 187,116 461,037 $ 147,193 1,839 149,032 283,433 $ Prior period amounts in the above table for long-lived assets have changed to conform with the current period presentation. We have changed our methodology to include only property and equipment, net and operating lease assets as long-lived assets for this disclosure. We believe these changes better reflects the usefulness of this disclosure. The adoption of ASC 842 as of July 1, 2019, which required operating lease assets to be recorded on the Consolidated Balance Sheet, resulted in the increase in long-lived assets from fiscal year 2019 to fiscal year 2020. No one customer accounted for more than 10% of Adtalem’s consolidated revenue for all periods presented. 22. Subsequent Event On August 4, 2021, Adtalem announced the appointment of Stephen W. Beard as the President and Chief Executive Officer of Adtalem effective September 8, 2021. Mr. Beard is currently Adtalem’s Chief Operating Officer. On the effective date of Mr. Beard’s appointment, Lisa W. Wardell, Adtalem’s current Chairman of the Board, President and Chief Executive Officer, will transition to the role of Executive Chairman of the Board of Adtalem for a one-year term. On August 12, 2021, Adtalem completed the acquisition of Walden for $1.48 billion in cash, subject to certain adjustments set forth in the Agreement. Walden owns and operates Walden University, an online for-profit university headquartered in Minneapolis, Minnesota. The acquisition furthers Adtalem’s growth strategy into becoming a leading workforce solutions provider. We used the $800 million in Notes, the $850 million New Term Loan, and available cash on hand to fund the Acquisition, refinance our existing credit agreement, pay fees and expenses related to the Acquisition, and in the case of the New Revolver, to finance ongoing working capital and for general corporate purposes. In connection with refinancing our Term B Loan, we settled and terminated the Swap. See Note 13 “Debt” for additional information on the debt agreements used to finance the Acquisition. 121 2021 Form 10-K Adtalem Global Education Inc. Schedule II Valuation and Qualifying Accounts Years Ended June 30, 2021, 2020, and 2019 (in thousands) Balance at Charged to Charged to Beginning Costs and Other Expenses Accounts Deductions Balance at End of Year of Year Description of Allowances and Reserves Year Ended June 30, 2021 Credit losses deducted from accounts and notes receivable $ 26,515 $ 11,573 $ Valuation allowances deducted from deferred tax assets Restructuring reserve Year Ended June 30, 2020 Credit losses deducted from accounts and notes receivable $ 14,532 $ 16,152 $ Valuation allowances deducted from deferred tax assets Restructuring reserve Year Ended June 30, 2019 Refund allowance deducted from accounts receivable Credit losses deducted from accounts and notes receivable Valuation allowances deducted from deferred tax assets Restructuring reserve 18,838 11,496 38,927 9,817 6,767 8,870 9,943 25,083 9,937 1,435 71 4,955 (847) 490 387 $ — $ $ — $ 8,102 (a) $ 29,986 8,000 1,090 — — 1,925 (b) — — $ 4,169 (a) $ 26,515 9,937 — (77) 1,435 3,573 (b) (25,030)(e) — $ (387)(c) $ — 832 (d) 14,955 (a) 14,532 9,943 8,324 22,714 (b) 25,083 4 — (a) Write-offs of uncollectable amounts and cash recoveries. (b) Payments and/or adjustments of liabilities for restructuring reserve. (c) Reclassification between accounts. (d) OnCourse Learning’s acquired balance. (e) ASC 842 (leases) reclassification to operating lease liabilities. 122 Adtalem Global Education Inc.   Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Based on an evaluation under the supervision and with the participation of Adtalem’s management, Adtalem’s Chief Executive Officer and Chief Financial Officer have concluded that Adtalem’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of June 30, 2021 to ensure that information required to be disclosed by Adtalem in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to Adtalem’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management’s Annual Report on Internal Control Over Financial Reporting The management of Adtalem is responsible for establishing and maintaining adequate internal control over financial reporting, as defined by Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of June 30, 2021, Adtalem’s management has assessed the effectiveness of its internal control over financial reporting, using the criteria specified by the Committee of Sponsoring Organizations of the Treadway Commission’s 2013 report Internal Control — Integrated Framework. Based upon this assessment, Adtalem’s management concluded that as of June 30, 2021, its internal control over financial reporting was effective based upon these criteria. The effectiveness of Adtalem’s internal control over financial reporting as of June 30, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included herein. Changes in Internal Control Over Financial Reporting There were no changes in internal control over financial reporting that occurred during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, Adtalem’s internal control over financial reporting. Due to COVID-19, virtually all institution and home office administrative operations continue to be delivered and performed remotely. This includes operations both in the U.S. and in all foreign locations. These remote work arrangements have not adversely affected, and are not reasonably likely to adversely affect, Adtalem’s ability to maintain operations, financial reporting systems, internal control over financial reporting, or disclosure controls and procedures. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. Item 10. Directors, Executive Officers and Corporate Governance PART III The information required by Item 10 relating to Directors and Nominees for election to the Board of Directors is incorporated by reference to Adtalem’s definitive Proxy Statement to be filed in connection with the solicitation of proxies for the Annual Meeting of Stockholders to be held November 10, 2021 (the “Proxy Statement”). The information required 123 2021 Form 10-Kby Item 10 with respect to Executive Officers is set forth in “Information About Our Executive Officers” at the end of Part I of this Annual Report on Form 10-K. The information required by Item 10 with respect to Regulation S-K, Item 405 disclosure of delinquent Form 3, 4, or 5 filers is incorporated by reference to the Proxy Statement. In accordance with the information required by Item 10 relating to Regulation S-K, Item 406 disclosures about the Adtalem Code of Conduct and Ethics, Adtalem has a Code of Conduct and Ethics, which applies to its directors, officers (including the Chief Executive Officer, the Chief Financial Officer, and the Chief Accounting Officer), and all other employees. The full text of the Code is available on Adtalem’s website. Adtalem intends to satisfy the requirements of the Securities and Exchange Commission regarding amendments to, or waivers from, the Code by posting such information on its website. To date, there have been no waivers from the Code. The information required by Item 10 relating to Regulation S-K, Item 407(c)(3) disclosure of procedures by which security holders may recommend nominees to Adtalem’s Board of Directors is incorporated by reference to the Proxy Statement. The information called for by Item 10 relating to Regulation S-K, Item 407(d)(4) and (d)(5) disclosure of the Adtalem’s audit and finance committee financial experts and identification of the Adtalem’s audit committee is incorporated by reference to the Proxy Statement. Item 11. Executive Compensation The information required by Item 11 is incorporated by reference to the Proxy Statement (as defined in Item 10). Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 12 is incorporated by reference to the Proxy Statement (as defined in Item 10). Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 is incorporated by reference to the Proxy Statement (as defined in Item 10). Item 14. Principal Accountant Fees and Services The information required by Item 14 is incorporated by reference to the Proxy Statement (as defined in Item 10). PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this report: 1. Financial Statements Consolidated financial statements filed as part of this report are listed under Item 8. “Financial Statements and Supplementary Data.” 2. Financial Statement Schedules Schedule II – Valuation and Qualify Accounts is set forth under Item 8. “Financial Statements and Supplementary Data” of this Form 10-K. All other schedules have been omitted because they are not required, are not applicable, or the required information is included in the consolidated financial statements or the notes thereto. 124 Adtalem Global Education Inc.3. Exhibits Exhibit Number 2(a) Exhibit Description Agreement and Plan of Merger, dated May 18, 2016, by and among DeVry/Becker Education Development Corp., AGM Acquisition Corp., Cardinal Acquisition Merger Sub, Inc., Alert Global Media Holdings, LLC, and Registrant Filed Herewith Incorporated by Reference to: Exhibit 2.1 to the Registrant’s Form 8-K dated June 23, 2016 Exhibit 2.1 to the Registrant’s Form 8-K dated December 4, 2017 Exhibit 2.1 to the Registrant’s Form 8-K dated August 3, 2018 Exhibit 2.3 to the Registrant’s Form 8-K dated December 12, 2018 Exhibit 2.4 to the Registrant’s Form 8-K dated December 12, 2018 Exhibit 2.1 to the Registrant’s Form 8-K dated June 29, 2018 Exhibit 2.1 to the Registrant’s Form 8-K dated October 23, 2019 Exhibit 2.2 to the Registrant’s Form 8-K dated April 27, 2020 Exhibit 2.1 to the Registrant’s Form 8-K dated September 16, 2020 Exhibit 2.1 to the Registrant’s Form 8-K dated July 27, 2021 Exhibit 3.2 to the Registrant’s Form 8-K dated May 22, 2017 Exhibit 3.1 to the Registrant’s Form 8-K dated May 22, 2017 Exhibit 3.3 to the Registrant’s Form 8-K dated May 22, 2017 Exhibit 10.1 to the Registrant’s Form 8-K dated April 19, 2018 2(b) Stock Purchase Agreement, by and between the Registrant and Cogswell Education, LLC, dated December 4, 2017 (the “Stock Purchase Agreement”) 2(c) Amendment No. 1 to the Stock Purchase Agreement, dated 2(d) 2(e) 2(f) 2(g) August 2, 2018 Amendment No. 2 to the Stock Purchase Agreement dated as of December 11, 2018, by and between the Registrant and Cogswell Amendment No. 3 to the Stock Purchase Agreement, dated as of December 11, 2018, by and between the Registrant and Cogswell Membership Interest Purchase Agreement, by and between the Registrant and San Joaquin Valley College, Inc., dated June 28, 2018 Stock Purchase Agreement by and among Global Education International B.V., Sociedade de Ensino Superior Estácio de Sá Ltda., the Registrant, and Estácio Participações S.A., dated as of October 18, 2019 2(h) Letter Agreement, by and among, Global Education 2(i) 2(j) International B.V., Sociedade de Ensino Superior Estácio de Sá Ltda., the Registrant, and Estácio Participações S.A., dated as of April 24, 2020 Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of September 11, 2020 Waiver and Amendment to Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of July 21, 2021 3(a) Restated Certificate of Incorporation of the Registrant, dated May 23, 2017 3(b) Amendment to Restated Certificate of Incorporation of the Registrant, dated May 23, 2017 3(c) Amended and Restated By-Laws of the Registrant, as 4(a) amended as of May 23, 2017 Credit Agreement dated April 13, 2018, among the Registrant and certain subsidiaries of the Registrant identified therein, as the Borrowers, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Merrill Lynch, Pierce, Fenner & Smith, Bank of Montreal, Fifth Third Bank and PNC Bank, National Association, as Joint Lead Arrangers and Joint Bookrunners, Bank of Montreal, Fifth Third Bank and PNC Bank, National Association, as Co- Syndication Agents, The Northern Trust Company, as Documentation Agent, and The Other Lenders Party Thereto (the “Credit Agreement”) 4(b) Description of Registrant’s Securities X 125 2021 Form 10-K Exhibit Number 4(c) Exhibit Description Commitment Letter, dated as of September 11, 2020, by and among the Registrant as borrower, and Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, Credit Suisse AG, Cayman Islands Branch, Credit Suisse Loan Funding LLC and MUFG Bank, Ltd., as lead arrangers 4(d) Amendment No. 1, dated as of December 4, 2020, by and among the Registrant, as borrower, the financial institutions party thereto and Bank of America, N.A., as administrative agent 4(e) Indenture, dated as of March 1, 2021, by and between Adtalem Escrow Corporation, as escrow issuer, and U.S. Bank National Association, as trustee and notes collateral agent 4(f) Form of 5.500% Senior Notes due 2028 (included in Exhibit 4.1) 4(g) Supplemental Indenture, dated as of August 12, 2021, by and between the Registrant, as issuer, the parties that are signatories thereto as Subsidiary Guarantors, as subsidiary guarantors, and U.S. Bank National Association, as trustee and notes collateral agent 4(h) Credit Agreement, dated as of August 12, 2021, by and between the Registrant, as borrower, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent 10(a)* Registrant’s Amended and Restated Incentive Plan of 2005 10(b)* Registrant’s Fourth Amended and Restated Incentive Plan of 2013 10(c)* Form of Nonqualified Stock Option Agreement for Executive Officers under the Amended and Restated Incentive Plan of 2005 10(d)* Form of Nonqualified Stock Option Agreement for Employees under the Amended and Restated Incentive Plan of 2005 10(e)* Form of Incentive Stock Option Agreement for Executive Officers under the Amended and Restated Incentive Plan of 2005 10(f)* Form of Incentive Stock Option Agreement for Employees under the Amended and Restated Incentive Plan of 2005 10(g)* 10(h)* Form of Nonqualified Stock Option Agreement for Executive Officers under the Fourth Amended and Restated Incentive Compensation Plan of 2013 Form of Nonqualified Stock Option Agreement for Employees under the Fourth Amended and Restated Incentive Plan of 2013 10(i)* Form of Incentive Stock Option Agreement for Executive Officers under the Fourth Amended and Restated Incentive Plan of 2013 126 Filed Herewith Incorporated by Reference to: Exhibit 10.1 to the Registrant’s Form 8-K dated September 16, 2020 Exhibit 10.1 to the Registrant’s Form 8-K dated December 10, 2020 Exhibit 4.1 to the Registrant’s Form 8-K dated March 1, 2021 Exhibit 4.2 to the Registrant’s Form 8-K dated March 1, 2021 Exhibit 4.2 to the Registrant’s Form 8-K dated August 12, 2021 Exhibit 10.1 to the Registrant’s Form 8-K dated August 12, 2021 Exhibit 10.1 to the Registrant’s Form 8-K dated November 10, 2010 Appendix A of the Supplement to Proxy Statement dated October 10, 2017 Exhibit 10(e) to the Registrant’s Form 10-K for the year ended June 30, 2013 Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2013 Exhibit 10(g) to the Registrant’s Form 10-K for the year ended June 30, 2013 Exhibit 10(h) to the Registrant’s Form 10-K for the year ended June 30, 2013 Exhibit 10(o) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(p) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(q) to the Registrant’s Form 10-K for the year ended June 30, 2014 Adtalem Global Education Inc. Exhibit Number 10(j)* Exhibit Description Form of Incentive Stock Option Agreement for Employees under the Fourth Amended and Restated Incentive Plan of 2013 10(k)* 10(l)* 10(m)* 10(n)* Form of Full Value Share Award Agreement for Executive Officers under the Fourth Amended and Restated Incentive Plan of 2013 Form of Full Value Share Award Agreement for Directors under the Fourth Amended and Restated Incentive Plan of 2013 Form of Full Value Share Award Agreement for Employees under the Fourth Amended and Restated Incentive Plan of 2013 Form of Performance Share Award Agreement for Executive Officers under the Fourth Amended and Restated Incentive Plan of 2013 10(o)* Form of Performance Share Award Agreement for Employees under the Fourth Amended and Restated Incentive Plan of 2013 10(p)* Form of Restricted Cash Award Agreement for Employees under the Fourth Amended and Restated Incentive Plan of 2013 10(q)* Registrant’s Nonqualified Deferred Compensation Plan 10(r)* Registrant’s Success Sharing Retirement Plan 10(s)* Form of Indemnification Agreement between the Registrant and its Directors 10(t)* Senior Advisor Agreement between the Registrant and each of Ronald L. Taylor and Dennis J. Keller 10(u)* First Amendment to Senior Advisor Agreement between the Registrant and Ronald L. Taylor 10(v)* Employment Agreement between the Registrant and Lisa W. Wardell, dated May 24, 2016 10(w)* Executive Employment Agreement between the Registrant and Gregory S. Davis, dated July 7, 2016 10(x)* Executive Employment Agreement between the Registrant and Steven Riehs, dated May 17, 2013 10(y)* Executive Employment Agreement between the Registrant and Susan Groenwald, dated September 1, 2011 10(z)* Executive Employment Agreement between the Registrant and Donna N. Jennings-Howell, dated October 12, 2009 10(aa)* Executive Employment Agreement between the Registrant and Stephen W. Beard, dated February 1, 2018 10(bb)* Executive Employment Agreement between the Registrant and Kathy Boden Holland, dated May 9, 2018 Filed Herewith Incorporated by Reference to: Exhibit 10(r) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10.1 to the Registrant’s Form 8-K dated May 8, 2014 Exhibit 10(t) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(u) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(v) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(w) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(x) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 4.3 to the Registrant’s Form S-8 dated August 27, 2014 Exhibit 4.3 to the Registrant’s Form S-8 dated August 27, 2014 Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2010 Exhibit 10(b) to the Registrant’s Form 10-Q for the quarter ended December 31, 2002 Exhibit 10(r) to the Registrant’s Form 10-K for the year ended June 30, 2013 Exhibit 10.1 to the Registrant’s Form 8-K dated May 27, 2016 Exhibit 10.1 to the Registrant’s Form 8-K dated January 1, 2017 Exhibit 10.1 to the Registrant’s Form 8-K dated May 22, 2013 Exhibit 10(ii) to the Registrant’s Form 10-K for the year ended June 30, 2014 Exhibit 10(jj) to the Registrant’s Form 10-K for the year ended June 30, 2018 Exhibit 10(kk) to the Registrant’s Form 10-K for the year ended June 30, 2019 Exhibit 10(ll) to the Registrant’s Form 10-K for the year ended June 30, 2019 127 2021 Form 10-K Exhibit Number 10(cc) Exhibit Description Promissory Note, dated December 11, 2018, by and between the Registrant and DeVry University, Inc. 10(dd)* Executive Employment Agreement between the Registrant and Michael O. Randolfi 10(ee)* Offer Letter between the Registrant and Robert Phelan, dated January 27, 2020 10(ff)* Executive Employment Agreement between the Registrant and Karen S. Cox, dated June 15, 2018 Filed Herewith Incorporated by Reference to: Exhibit 2.5 to the Registrant’s Form 8-K dated December 12, 2018 Exhibit 10.1 to the Registrant’s Form 8-K dated August 27, 2019 Exhibit 10.1 to the Registrant’s Form 8-K dated February 18, 2020 Exhibit 10(nn) to the Registrant’s Form 10-K for the year ended June 30, 2020 Exhibit 10.1 to the Registrant’s Form 8-k dated August 6, 2021 10(gg)* Executive Employment Agreement between the Registrant X and Douglas G. Beck, dated May 6, 2021 10(hh) Executive Employment Agreement effective September 8, 21 23 2021, between the Registrant and Stephen W. Beard Subsidiaries of the Registrant Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm 31.1 Certification of Chief Executive Officer pursuant to Rule 31.2 32 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended Certification of Chief Financial Officer pursuant to Rule 13a- 14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Designates management contracts and compensatory plans or arrangements. X X X X X X X X X X ** Furnished herewith. Item 16. Form 10-K Summary None 128 Adtalem Global Education Inc. Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES Date: August 19, 2021 Adtalem Global Education Inc. By: /s/ Robert J. Phelan Robert J. Phelan Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title /s/ Lisa W. Wardell Lisa W. Wardell Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) Date August 19, 2021 /s/ Robert J. Phelan Robert J. Phelan Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) August 19, 2021 /s/ William W. Burke William W. Burke /s/ Charles DeShazer Charles DeShazer /s/ Donna J. Hrinak Donna J. Hrinak /s/ Georgette Kiser Georgette Kiser /s/ Lyle Logan Lyle Logan /s/ Michael W. Malafronte Michael W. Malafronte /s/ Sharon O’Keefe Sharon O’Keefe /s/ Kenneth J. Phelan Kenneth J. Phelan Lead Independent Director August 19, 2021 Director Director Director Director Director Director Director August 19, 2021 August 19, 2021 August 19, 2021 August 19, 2021 August 19, 2021 August 19, 2021 August 19, 2021 129 2021 Form 10-K CORPORATE INFORMATIONHome OfficeAdtalem Global Education Inc. 500 West Monroe Street, Suite 2800 Chicago, IL 60661 866‑374‑2678 www.adtalem.comTransfer Agent and RegistrarComputershare Investor Services, L.L.C. 462 South 4th Street Suite 1600 Louisville, KY 40202 312‑588‑4189Independent Registered Public Accounting FirmPricewaterhouseCoopers LLP One North Wacker Drive Chicago, Illinois 60606Financial Information and ReportsAdtalem routinely issues press releases and quarterly and annual financial reports. To receive this information please write to us at: Adtalem Global Education Inc., Investor Relations, 500 West Monroe Street, Suite 2800, Chicago, IL 60661, call 312‑588‑4189 or visit the “Investor Relations” section of our website at www.adtalem.com. A copy of Adtalem Global Education Inc. 2021 Annual Report on Form 10‑K filed with the U.S. Securities and Exchange Commission will be furnished to stockholders without charge (except charges for providing exhibits) upon request to the Company. Analysts and investors seeking additional information about the Company can contact Investor Relations at 312‑588‑4189.Investor RelationsJohn Kristoff Vice President, Global Communications 312‑651‑1437Annual MeetingThe annual meeting of shareholders of Adtalem Global Education Inc. will be held entirely online on Wednesday, November 10, 2021 at 8:30 a.m. Central Standard Time at: www.virtualshareholdermeeting.com/ATGE2021.Annual MailingHolders of common stock of record at the close of business on September 24, 2021 are entitled to vote at the meeting. A notice of meeting, proxy statement and proxy card and/or voting instructions were provided to shareholders with this Annual Report.Common StockAdtalem’s stock is traded on the New York Stock Exchange and the NYSE Chicago under the symbol ATGE.Corporate GovernanceTo review the Company’s corporate governance guidelines, Board committee charters and code of conduct and ethics, please visit the “Organizational Governance” section on the “Investor Relations” page of our website at www.adtalem.com.

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