XML 40 R15.htm IDEA: XBRL DOCUMENT
v3.22.2

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | 7. Income Taxes Income from continuing operations before income taxes, classified by source of income, were as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2022 | ​ | 2021 | ​ | 2020
Domestic | ​ | $ | (111,001) | ​ | $ | 12,471 | ​ | $ | 129,532
Foreign | ​ |  | 65,937 | ​ |  | 70,948 | ​ |  | 75,454
Total | ​ | $ | (45,064) | ​ | $ | 83,419 | ​ | $ | 204,986
​ The components of the (benefit from) provision for income taxes were as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ |  | 2022 | ​ | 2021 | ​ | 2020
Current tax provision (benefit): |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. federal | ​ | $ | (6,465) | ​ | $ | 10,631 | ​ | $ | (9,572)
State and local | ​ |  | 4,154 | ​ |  | 1,691 | ​ |  | (601)
Foreign | ​ |  | 725 | ​ |  | 547 | ​ |  | 519
Total current | ​ |  | (1,586) | ​ |  | 12,869 | ​ |  | (9,654)
Deferred tax provision (benefit): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. federal | ​ |  | (6,425) | ​ |  | (2,970) | ​ |  | (4,114)
State and local | ​ |  | (6,597) | ​ |  | 996 | ​ |  | (271)
Foreign | ​ |  | (629) | ​ |  | 2,194 | ​ |  | (900)
Total deferred | ​ |  | (13,651) | ​ |  | 220 | ​ |  | (5,285)
(Benefit from) provision for income taxes | ​ | $ | (15,237) | ​ | $ | 13,089 | ​ | $ | (14,939)
​ The effective tax rate differs from the statutory tax rates as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, |
​ | ​ | 2022 | ​ | ​ | 2021 | ​ | ​ | 2020 |
Income tax at statutory rate | ​ | $ | (9,463) | ​ | 21.0 | % | ​ | $ | 17,518 | ​ | 21.0 | % | ​ | $ | 43,047 | ​ | 21.0 | %
Lower rates on foreign operations | ​ |  | (14,040) |  | 31.2 | % | ​ |  | (12,219) |  | (14.6) | % | ​ |  | (16,182) |  | (7.9) | %
State income taxes | ​ |  | (607) |  | 1.3 | % | ​ |  | 1,199 |  | 1.4 | % | ​ |  | 1,338 |  | 0.7 | %
Loss on investment in subsidiary | ​ |  | (1,669) |  | 3.7 | % | ​ |  | — |  | — | % | ​ |  | (25,688) |  | (12.5) | %
Deferred tax benefit from acquisitions and divestitures | ​ |  | (1,153) |  | 2.6 | % | ​ |  | — |  | — | % | ​ |  | — |  | — | %
Gain on derivative | ​ | ​ | — | ​ | — | % | ​ |  | — | ​ | — | % | ​ |  | (23,252) | ​ | (11.3) | %
Permanent non-deductible items | ​ |  | 2,788 |  | (6.2) | % | ​ |  | 796 |  | 1.0 | % | ​ |  | (707) |  | (0.3) | %
Foreign tax provisions under GILTI | ​ | ​ | 8,639 | ​ | (19.2) | % | ​ |  | 5,506 | ​ | 6.6 | % | ​ |  | 6,440 | ​ | 3.1 | %
Other | ​ |  | 268 |  | (0.6) | % | ​ |  | 289 |  | 0.3 | % | ​ |  | 65 |  | — | %
(Benefit from) provision for income taxes | ​ | $ | (15,237) |  | 33.8 | % | ​ | $ | 13,089 |  | 15.6 | % | ​ | $ | (14,939) |  | (7.3) | %
​ 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): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2022 | ​ | 2021
Employee benefits | ​ | $ | 9,936 | ​ | $ | 12,643
Stock-based compensation | ​ |  | 6,675 | ​ |  | 6,895
Receivable reserve | ​ |  | 6,919 | ​ |  | 2,598
Operating lease liabilities | ​ | ​ | 44,089 | ​ | ​ | 50,234
Other reserves | ​ |  | 1,865 | ​ |  | 4,117
Loss and credit carryforwards, net | ​ |  | 21,206 | ​ |  | 15,334
Less: valuation allowance | ​ |  | (10,390) | ​ |  | (4,985)
Gross deferred tax assets | ​ |  | 80,300 | ​ |  | 86,836
Depreciation | ​ |  | (5,314) | ​ |  | (1,696)
Deferred taxes on unremitted foreign earnings | ​ | ​ | (397) | ​ | ​ | (733)
Amortization of intangible assets | ​ |  | (18,975) | ​ |  | (22,161)
Operating lease assets | ​ | ​ | (30,075) | ​ | ​ | (35,106)
Other accruals | ​ | ​ | — | ​ | ​ | 169
Gross deferred tax liability | ​ |  | (54,761) | ​ |  | (59,527)
Net deferred tax asset (liability) | ​ | $ | 25,539 | ​ | $ | 27,309
​ As of June 30, 2022, Adtalem has $259.9 million of gross, post apportioned state net operating loss carryforwards, and $15.7 million of foreign net operating loss carryforwards in St. Maarten and other jurisdictions. As of June 30, 2021, Adtalem has $208.9 million of gross, post apportioned state net operating loss carryforwards, and $10.1 million of foreign net operating loss carryforwards in St. Maarten and other jurisdictions. Adtalem has the following tax net operating loss (tax effected), interest (tax effected), and credit carryforwards as of June 30, 2022 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | Years of Expiration
​ | ​ | 2022 | ​ | Beginning | ​ | Ending
U.S. credit carryforwards | ​ | $ | 672 |  | 2027 |  | 2030
State net operating loss carryforwards | ​ |  | 16,006 |  | 2024 |  | 2042
Foreign net operating loss carryforwards | ​ |  | 4,528 |  | 2023 |  | 2032
Total loss and credit carryforwards, net | ​ | $ | 21,206 |  | ​ | ​ | ​
​ Three of Adtalem’s businesses 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. Adtalem does not assert that the accumulated undistributed earnings of its foreign subsidiaries are indefinitely reinvested in foreign jurisdictions. Adtalem has accrued applicable state income and foreign withholding taxes on such distributed earnings. 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 $10.4 million and $5.0 million as of June 30, 2022 and 2021, respectively, and mainly relates to other foreign and state net operating loss carryforwards. Insufficient projected taxable income in certain jurisdictions gives rise to the need for 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 income tax provisions or benefits from continuing operations were $15.2 million tax benefit, $13.1 million tax provision, and $14.9 million tax benefit in fiscal year 2022, 2021, and 2020, respectively. The income tax benefits in fiscal years 2022 and 2020 and the income tax expense in fiscal year 2021 reflect the U.S. federal tax rate of 21% adjusted for taxes related to global intangible low-taxed income (“GILTI”), state and local taxes, foreign rate differences, benefits associated with local tax incentives, changes in valuation allowances and liabilities for uncertain tax positions, tax credits, and tax benefits on stock-based compensation awards. The increase in the fiscal year 2022 income tax provision benefit is the result of the loss incurred for fiscal year 2022. The effective tax rate also includes a tax benefit of $1.7 million from a loss for certain uncollectible subsidiary receivables as well as a benefit of $1.2 million to adjust deferred state tax balances for the acquisition of Walden and the sale of ACAMS, Becker, and OCL, offset by $3.0 million for limitations on deductions for executive compensation. As of June 30, 2022 and 2021, the total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, was $10.7 million and $9.9 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 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, 2022 and 2021 was $1.8 million and $1.5 million, respectively. Interest and penalties expense recognized during the years ended June 30, 2022, 2021, and 2020 were $0.3 million, $0.4 million, and a benefit of $0.1 million, respectively. The changes in our unrecognized tax benefits were (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2022 | ​ | 2021 | ​ | 2020
Balance at beginning of period | ​ | $ | 9,926 | ​ | $ | 11,001 | ​ | $ | 31,303
Increases from positions taken during prior periods | ​ |  | 1,074 | ​ |  | 47 | ​ |  | —
Decreases from positions taken during prior periods | ​ |  | (2,815) | ​ |  | (904) | ​ |  | (26,476)
Increases from positions taken during the current period | ​ |  | 2,845 | ​ |  | 42 | ​ |  | 6,454
Reductions due to lapse of statute | ​ |  | (373) | ​ |  | (257) | ​ |  | (206)
Reductions due to settlement | ​ |  | — | ​ |  | (3) | ​ |  | (74)
Balance at end of period | ​ | $ | 10,657 | ​ | $ | 9,926 | ​ | $ | 11,001
​ 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, 2018; in various states for years beginning on or after July 1, 2016; and in our significant foreign jurisdictions for years beginning on or after July 1, 2016.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration