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
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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.
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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.
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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.
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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
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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
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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
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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%
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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.
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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
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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.
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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 $28.61 for PSUs. Also see Note 17: Stock-
Based Compensation to our audited financial statements in Adtalem’s Annual Report on Form 10-K for the year ended
June 30, 2021 for an explanation of the assumptions made by Adtalem in the valuation of stock option awards.
(9) These RSUs were granted in connection with Mr. Phelan’s appointment as Interim Chief Financial Officer.
(10) These RSUs were granted in connection with Mr. Beck’s onboarding package when joining Adtalem to replace awards
he forfeited when he resigned from his former employer.
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2021 Proxy Statement Executive Compensation Tables
2021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
This table sets forth information for each NEO with respect to stock options, RSUs and PSUs held by the NEOs as of
June 30, 2021.
Option Awards
Stock Awards
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(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 $35.64
(the closing market price of Adtalem’s Common Stock on June 30, 2021). The value provided assumes a PSU payout at
target value.
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2021 Proxy Statement Executive Compensation Tables
2021 OPTIONS EXERCISES AND STOCK VESTED
This table provides information for the NEOs concerning stock options that were exercised and PSUs and RSUs that
vested during fiscal year 2021.
Name
Lisa W. Wardell
Robert J. Phelan
Stephen W. Beard
Douglas G. Beck
Kathy Boden Holland
Michael O. Randolfi
Option Awards
Stock Awards
Number of
Shares Acquired
on Exercise
(#)
26,237
Value Realized
on Exercise
($)(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.
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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.
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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
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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
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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.
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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
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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
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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
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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);
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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,
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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
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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.
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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.
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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.
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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
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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.
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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.
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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
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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
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77
78
79
80
81
122
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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
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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
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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.
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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
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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-
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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
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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.
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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
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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
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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
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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.
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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.