Income Taxes (Tables)

12 Months Ended

Jun. 30, 2022

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,
	2022		2021		2020
Domestic	$	(111,001)	$	12,471	$	129,532
Foreign		65,937		70,948		75,454
Total	$	(45,064)	$	83,419	$	204,986

Income Tax Provisions (Benefits)

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)

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,
	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 Tax Assets (Liabilities)

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

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, 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

Changes in Unrecognized Tax Benefits

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