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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income before Income Tax

The components of income from continuing operations before income taxes are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2020		​	2019		​	2018
U.S.	​	$	160,334	​	$	80,209	​	$	63,353
Foreign	​		76,845	​		59,538	​		92,826
Total	​	$	237,179	​	$	139,747	​	$	156,179

Income Tax Provisions (Benefits)

The income tax provisions related to the above results are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2020			2019			2018
Current tax provision (benefit):		​			​			​
U.S. federal	​	$	(3,097)	​	$	15,912	​	$	68,525
State and local	​		735	​		1,749	​		(762)
Foreign	​		519	​		2,224	​		5,785
Total current	​		(1,843)	​		19,885	​		73,548
Deferred tax provision (benefit):	​			​			​
U.S. federal	​		(4,197)	​		4,066	​		19,019
State and local	​		(104)	​		9,028	​		(1,173)
Foreign	​		(214)	​		(101)	​		(3,287)
Total deferred	​		(4,515)	​		12,993	​		14,559
(Benefit from) provision for income taxes	​	$	(6,358)	​	$	32,878	​	$	88,107

Income Tax Provisions Computed using Statutory U.S. Federal Rate

The income tax provisions differ from those that would be computed using the statutory U.S. federal rate as a result of the following items (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2020					2019					2018
Income tax at statutory rate	​	$	49,807		21.0	%	$	29,347		21.0	%	$	43,823		28.1	%
Lower rates on foreign operations	​		(16,210)		(6.8)	%		(12,738)		(9.1)	%		(21,777)		(13.9)	%
State income taxes	​		3,072		1.3	%		5,825		4.2	%		3,648		2.3	%
Impact of Tax Cuts and Jobs Act of 2017	​		—		—	%		—		—	%		103,878		66.5	%
Loss on investment in subsidiary	​		(25,688)		(10.8)	%		1,797		1.3	%		(48,903)		(31.3)	%
Gain on derivative	​	​	(23,252)	​	(9.8)	%	​	—	​	—	%	​	—	​	—	%
Permanent non-deductible items	​		(236)		(0.1)	%		469		0.3	%		5,976		3.8	%
Foreign tax provisions under GILTI	​	​	6,502	​	2.7	%	​	3,231	​	2.3	%	​	—	​	—	%
Other	​		(353)		(0.1)	%		4,947		3.5	%		1,462		0.9	%
(Benefit from) provision for income taxes	​	$	(6,358)		(2.7)	%	$	32,878		23.5	%	$	88,107		56.4	%

Deferred Tax Assets (Liabilities)

These assets and liabilities are composed of the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	June 30,
​		2020			2019			2018
Employee benefits	​	$	10,818	​	$	10,504	​	$	11,956
Stock-based compensation	​		6,924	​		6,549	​		7,577
Deferred rent	​		—	​		7,620	​		9,841
Receivable reserve	​		2,530	​		1,542	​		7,170
Restructuring costs	​		—	​		6,185	​		8,705
Depreciation	​		—	​		6	​		3,395
Operating lease liabilities	​	​	48,110	​	​	—	​	​	—
Other reserves	​		4,748	​		1,473	​		3,634
Loss and credit carryforwards, net	​		23,695	​		33,061	​		35,221
Less: valuation allowance	​		(9,937)	​		(9,943)	​		(11,496)
Gross deferred tax assets	​		86,888	​		56,997	​		76,003
Depreciation	​		(177)	​		—	​		—
Deferred taxes on unremitted foreign earnings	​	​	(525)	​	​	(3,146)	​	​	(2,346)
Amortization of intangible assets	​		(54,864)	​		(66,257)	​		(65,482)
Operating lease assets	​	​	(33,279)	​	​	—	​	​	—
Other accruals	​	​	(741)	​	​	(187)	​	​	—
Gross deferred tax liability	​		(89,586)	​		(69,590)	​		(67,828)
Net deferred tax (liability) asset	​	$	(2,698)	​	$	(12,593)	​	$	8,175

Net Operating Loss and Credit Carryforwards

Adtalem has the following tax net operating loss (tax effected), interest (tax effected), and credit carryforwards as of June 30, 2020 (in thousands):

​	​	​	​	​	​	​	​
​	​	June 30,		​	Years of Expiration
​		2020			Beginning		Ending
U.S. interest expense carryforwards	​	$	99	​	No expiration
U.S. credit carryforwards	​	​	518		2027		2029
State net operating loss carryforwards	​		17,623		2022		2039
Foreign net operating loss carryforwards	​		4,361		2021		2038
Foreign net operating loss carryforwards	​		1,094		No expiration
Total loss and credit carryforwards, net	​	$	23,695

Changes in Unrecognized Tax Benefits

The changes in our unrecognized tax benefits were (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2020			2019			2018
Balance at beginning of period	​	$	31,818	​	$	32,804	​	$	7,901
Increases from positions taken during prior periods	​		—	​		582	​		1,151
Decreases from positions taken during prior periods	​		(26,489)	​		(660)	​		(3,501)
Increases from positions taken during the current period	​		6,456	​		606	​		29,463
Reductions due to lapse of statute	​		(231)	​		(1,390)	​		(559)
Reductions due to settlement	​		(73)	​		(124)	​		(1,651)
Balance at end of period	​	$	11,481	​	$	31,818	​	$	32,804

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