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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income before Income Tax

Income from continuing operations before income taxes, classified by source of income, were as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2021		​	2020		​	2019
Domestic	​	$	62,397	​	$	160,334	​	$	80,209
Foreign	​		64,453	​		76,845	​		59,538
Total	​	$	126,850	​	$	237,179	​	$	139,747

Income Tax Provisions (Benefits)

The components of the provision for (benefit from) income taxes were as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2021		​	2020		​	2019
Current tax provision (benefit):		​	​	​	​	​	​	​	​
U.S. federal	​	$	17,516	​	$	(3,097)	​	$	15,912
State and local	​		4,389	​		735	​		1,749
Foreign	​		1,856	​		519	​		2,224
Total current	​		23,761	​		(1,843)	​		19,885
Deferred tax provision (benefit):	​	​	​	​	​	​	​	​	​
U.S. federal	​		(2,097)	​		(4,197)	​		4,066
State and local	​		1,641	​		(104)	​		9,028
Foreign	​		1,943	​		(214)	​		(101)
Total deferred	​		1,487	​		(4,515)	​		12,993
Provision for (benefit from) income taxes	​	$	25,248	​	$	(6,358)	​	$	32,878

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

The effective tax rate differs from the statutory tax rates as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2021				​	2020				​	2019
Income tax at statutory rate	​	$	26,639	​	21.0	%	$	49,807	​	21.0	%	$	29,347	​	21.0	%
Lower rates on foreign operations	​		(12,171)		(9.6)	%		(16,210)		(6.8)	%		(12,738)		(9.1)	%
State income taxes	​		4,390		3.5	%		3,072		1.3	%		5,825		4.2	%
Loss on investment in subsidiary	​		(374)		(0.3)	%		(25,688)		(10.8)	%		1,797		1.3	%
Gain on derivative	​	​	—	​	—	%		(23,252)	​	(9.8)	%		—	​	—	%
Permanent non-deductible items	​		1,086		0.9	%		(236)		(0.1)	%		469		0.3	%
Foreign tax provisions under GILTI	​	​	6,084	​	4.8	%		6,502	​	2.7	%		3,231	​	2.3	%
Other	​		(406)		(0.3)	%		(353)		(0.1)	%		4,947		3.5	%
Provision for (benefit from) income taxes	​	$	25,248		19.9	%	$	(6,358)		(2.7)	%	$	32,878		23.5	%

Deferred Tax Assets (Liabilities)

The components of the deferred income tax assets and liabilities were as follows (in thousands):

​

​	​	​	​	​	​	​
​	​	June 30,
​	​	2021		​	2020
Employee benefits	​	$	13,434	​	$	10,818
Stock-based compensation	​		6,895	​		6,924
Receivable reserve	​		2,920	​		2,530
Operating lease liabilities	​	​	50,808	​	​	48,110
Other reserves	​		4,116	​		4,748
Loss and credit carryforwards, net	​		18,756	​		23,695
Less: valuation allowance	​		(8,000)	​		(9,937)
Gross deferred tax assets	​		88,929	​		86,888
Depreciation	​		(2,916)	​		(177)
Deferred taxes on unremitted foreign earnings	​	​	(733)	​	​	(525)
Amortization of intangible assets	​		(53,465)	​		(54,864)
Operating lease assets	​	​	(35,513)	​	​	(33,279)
Other accruals	​	​	(814)	​	​	(741)
Gross deferred tax liability	​		(93,441)	​		(89,586)
Net deferred tax asset (liability)	​	$	(4,512)	​	$	(2,698)

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, 2021 (in thousands):

​

​	​	​	​	​	​	​	​
​	​	June 30,		​	Years of Expiration
​	​	2021		​	Beginning	​	Ending
U.S. interest expense carryforwards	​	$	112	​	no expiration
U.S. credit carryforwards	​	​	672		2027		2030
State net operating loss carryforwards	​		14,398		2023		2040
Foreign net operating loss carryforwards	​		2,483		2022		2041
Foreign net operating loss carryforwards	​		1,091		no expiration
Total loss and credit carryforwards, net	​	$	18,756		​	​	​

Changes in Unrecognized Tax Benefits

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

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2021		​	2020		​	2019
Balance at beginning of period	​	$	11,481	​	$	31,818	​	$	32,804
Increases from positions taken during prior periods	​		47	​		—	​		582
Decreases from positions taken during prior periods	​		(906)	​		(26,489)	​		(660)
Increases from positions taken during the current period	​		43	​		6,456	​		606
Reductions due to lapse of statute	​		(264)	​		(231)	​		(1,390)
Reductions due to settlement	​		(3)	​		(73)	​		(124)
Balance at end of period	​	$	10,398	​	$	11,481	​	$	31,818

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