XML 40 R21.htm IDEA: XBRL DOCUMENT
v3.24.2

Taxes | 12 Months Ended
--- | ---
May 31, 2024
Income Tax And Non Income Tax Disclosure [Abstract] |
Taxes | TAXES The components of Earnings (loss) before income taxes for the fiscal years ended May 31 were:
| 2024 |  | 2023 |  | 2022
United States | $ | 17.3 |  |  | $ | 106.3 |  |  | $ | 76.9 |
Non-United States |  | (1.1) |  |  |  | 6.1 |  |  |  | 12.8 |
Total | $ | 16.2 |  |  | $ | 112.4 |  |  | $ | 89.7 |
The provision (benefit) for income taxes for the fiscal years ended May 31 consisted of the following components:
| 2024 |  | 2023 |  | 2022
Current |  |  |  |  |  |  |  |
Federal | $ | 3.4 |  |  | $ | 26.4 |  |  | $ | (2.1) |
State and local |  | 1.2 |  |  |  | 1.6 |  |  |  | 0.6 |
Non-United States |  | 1.5 |  |  |  | 1.6 |  |  |  | 3.0 |
Total Current | $ | 6.1 |  |  | $ | 29.6 |  |  | $ | 1.5 |
Deferred |  |  |  |  |  |  |  |
Federal | $ | 0.5 |  |  | $ | (6.6) |  |  | $ | 6.1 |
State and local |  | (1.3) |  |  |  | 3.9 |  |  |  | 2.4 |
Non-United States |  | (1.2) |  |  |  | (1.0) |  |  |  | (1.3) |
Total Deferred | $ | (2.0) |  |  | $ | (3.7) |  |  | $ | 7.2 |
Total Current and Deferred | $ | 4.1 |  |  | $ | 25.9 |  |  | $ | 8.7 |
Effective Tax Rate Reconciliation A reconciliation of the significant differences between the effective income tax rate and the federal statutory rate on Earnings (loss) before income taxes for the fiscal years ended May 31 was as follows:
| 2024 |  | 2023 |  | 2022
Computed federal statutory provision |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income tax provision, net of federal income tax benefit |  | (3.0) |  |  |  | 4.6 |  |  |  | 3.1 |
Difference in effective tax rates on earnings of foreign subsidiaries |  | (0.1) |  |  |  | 0.0 |  |  |  | (0.2) |
GILTI inclusion |  | 0.1 |  |  |  | 0.4 |  |  |  | — |
Foreign derived intangible income deduction |  | — |  |  |  | (1.7) |  |  |  | — |
Various tax credits |  | (6.6) |  |  |  | (1.5) |  |  |  | (1.9) |
Valuation allowances |  | 2.9 |  |  |  | — |  |  |  | 0.2 |
Uncertain positions |  | 0.4 |  |  |  | (0.8) |  |  |  | (8.1) |
Transaction costs |  | 12.0 |  |  |  | — |  |  |  | — |
Equity and other compensation |  | 2.3 |  |  |  | 2.9 |  |  |  | 1.2 |
Return to provision adjustments |  | (5.1) |  |  |  | (1.3) |  |  |  | (4.4) |
Other, net |  | 1.4 |  |  |  | (0.6) |  |  |  | (1.2) |
Effective tax rates |  | 25.3 | % |  |  | 23.0 | % |  |  | 9.7 | %
Total provision (benefit) for income taxes | $ | 4.1 |  |  | $ | 25.9 |  |  | $ | 8.7 |
Unremitted Earnings The Company assesses foreign investment levels periodically to determine if all or a portion of the Company’s investments in foreign subsidiaries are indefinitely invested. The Company is permanently reinvested in certain foreign subsidiaries representing a portion of the Company's investments in foreign subsidiaries. Any required adjustment to the income tax provision would be reflected in the period that the Company changes this assessment. As of May 31, 2024, there have been no adjustments to the income tax provision related to unremitted earnings. Deferred Taxes The significant components for deferred income taxes for the fiscal years ended May 31 were as follows:
| 2024 |  | 2023
Deferred tax assets: |  |  |  |  |
Tax uniform capitalization | $ | 8.9 |  |  | $ | 18.0 |
Prepublication expenses |  | 2.0 |  |  |  | 1.4 |
Inventory reserves |  | 22.7 |  |  |  | 20.7 |
Allowance for credit losses |  | 1.8 |  |  |  | 2.2 |
Deferred revenue |  | 5.7 |  |  |  | 3.8 |
Stock based compensation |  | 4.8 |  |  |  | 4.5 |
Other reserves |  | 5.4 |  |  |  | 5.9 |
Postretirement, post employment and pension obligations |  | 1.9 |  |  |  | 2.2 |
Tax carryforwards |  | 30.1 |  |  |  | 25.2 |
Lease liabilities |  | 28.7 |  |  |  | 24.2 |
Other |  | 15.9 |  |  |  | 13.6 |
Gross deferred tax assets | $ | 127.9 |  |  | $ | 121.7 |
Valuation allowance |  | (19.9) |  |  |  | (18.1) |
Total deferred tax assets | $ | 108.0 |  |  | $ | 103.6 |
Deferred tax liabilities: |  |  |  |  |
Depreciation and amortization |  | (41.1) |  |  |  | (45.2) |
Lease right-of-use assets |  | (25.5) |  |  |  | (21.8) |
Research and development costs capitalized |  | (14.2) |  |  |  | (12.1) |
Other |  | (4.1) |  |  |  | (3.5) |
Total deferred tax liability | $ | (84.9) |  |  | $ | (82.6) |
Total net deferred tax assets | $ | 23.1 |  |  | $ | 21.0 |
The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, duration of statutory carryforward periods, tax planning strategies and historical experience. For the fiscal year ended May 31, 2024, the valuation allowance increased by $1.8 primarily due to the assessment of state net operating losses not expected to be realized. For the fiscal year ended May 31, 2023, the valuation allowance decreased $5.0 primarily due to the disposition of the direct sales business in Asia and the write-off of the related foreign net operating losses. The Company has tax effected state and foreign net operating loss carryforwards of $5.7 and $21.2, respectively, for the fiscal year ended May 31, 2024. In addition, the Company has certain tax carryforwards related to tax credits of $3.2 for the fiscal year ended May 31, 2024. Certain state net operating loss carryforwards, if not utilized, expire at various times, primarily between fiscal year 2025 and fiscal year 2044. Certain foreign net operating loss carryforwards, if not utilized, also expire at various times. Approximately half of the foreign net operating loss carryforwards expire between fiscal year 2025 and fiscal year 2044 and the remaining carryforwards do not have an expiration date. Unrecognized tax benefits The benefits of uncertain tax positions are recorded in the financial statements only after determining a more likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities, in which case such benefits are included in long-term income taxes payable and reduced by the associated federal deduction for state taxes and non-U.S. tax credits. The interest and penalties related to these uncertain tax positions are recorded as part of the Company’s income tax expense and constitute part of Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The total amount of unrecognized tax benefits at May 31, 2024, 2023, and 2022 were $1.8, excluding $0.3 accrued for interest and penalties, $2.0, excluding $0.1 accrued for interest and penalties, and $3.1, excluding $0.3 accrued for interest and penalties, respectively. Of the total amount of unrecognized tax benefits at May 31, 2024, 2023, and 2022, $1.8, $2.0 and $3.1, respectively, would impact the Company’s effective tax rate. During the years presented, the Company recognized interest and penalties related to unrecognized tax benefits in the provision for taxes in the Consolidated Financial Statements. The Company recognized an expense of $0.1, a benefit of $0.1, and a benefit of $2.3 for the years ended May 31, 2024, 2023, and 2022, respectively. The table below presents a reconciliation of the unrecognized tax benefits for the fiscal years indicated:
Gross unrecognized benefits at May 31, 2021 | $ | 12.3 |
Decreases related to prior year tax positions |  | (6.8) |
Increase related to prior year tax positions |  | 0.5 |
Increases related to current year tax positions |  | 0.6 |
Settlements during the period |  | (3.5) |
Lapse of statute of limitation |  | — |
Gross unrecognized benefits at May 31, 2022 | $ | 3.1 |
Decreases related to prior year tax positions |  | (1.7) |
Increase related to prior year tax positions |  | 0.1 |
Increases related to current year tax positions |  | 0.5 |
Settlements during the period |  | — |
Lapse of statute of limitation |  | — |
Gross unrecognized benefits at May 31, 2023 | $ | 2.0 |
Decreases related to prior year tax positions |  | (0.8) |
Increase related to prior year tax positions |  | 0.7 |
Increases related to current year tax positions |  | 0.1 |
Settlements during the period |  | (0.2) |
Lapse of statute of limitation |  | — |
Gross unrecognized benefits at May 31, 2024 | $ | 1.8 |
Income Tax Returns The Company, including its domestic subsidiaries, files a consolidated U.S. income tax return, and also files tax returns in various states and other local jurisdictions. Also, certain subsidiaries of the Company file income tax returns in foreign jurisdictions. The Company is routinely audited by various tax authorities. The Company was previously under audit for the fiscal 2015 through fiscal 2020 tax years and the examination was completed in fiscal 2023 with no impact to the financial results. The fiscal 2021, 2022 and 2023 tax years remain subject to audit. Tax Legislation Updates The Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules introducing a new global minimum tax of 15% on foreign profits of large multinational corporations intended to be effective in 2024. The United States has not yet adopted Pillar Two rules, however, many countries and jurisdictions have agreed to the proposal by the OECD. There remains uncertainty as to the final Pillar Two model rules. The Company will continue to monitor U.S. and global legislative action related to Pillar Two for potential impacts in the non-US tax jurisdictions in which it operates. Non-income Taxes The Company is subject to tax examinations for sales-based taxes. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from taxing authorities. The Company assesses sales tax contingencies for each jurisdiction in which it operates, considering all relevant facts including statutes, regulations, case law and experience. Where a sales tax liability in respect to a jurisdiction is probable and can be reliably estimated for such jurisdiction, the Company has made accruals for these matters which are reflected in the Company’s Consolidated Financial Statements. These amounts are included in the Consolidated Financial Statements in Selling, general and administrative expenses. Future developments relating to the foregoing could result in adjustments being made to these accruals. During fiscal 2023, the Company recognized a benefit of $1.8 related to a favorable settlement of certain legacy sales tax matters.

X
- Definition -- None. No documentation exists for this element. -- + References No definition available. + Details
Name: | schl_IncomeTaxAndNonIncomeTaxDisclosureTextBlockAbstract
Namespace Prefix: | schl_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Description containing the entire income tax and non-income tax disclosure. Examples 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 carry forward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carry back, and tax uncertainties information. Also, includes disclosure relating to non-income taxes such as sales based taxes etc. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. + References No definition available. + Details
Name: | schl_IncomeTaxAndNonIncomeTaxDisclosureTextBlockTextBlock
Namespace Prefix: | schl_
Data Type: | dtr-types1:textBlockItemType
Balance Type: | na
Period Type: | duration