JOHN WILEY & SONS, INC.WLY
JOHN WILEY & SONS, INC. Income Taxes Disclosure
Income Taxes
The provision for income taxes were as follows:
| For the Years Ended April 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision | |||||||||||||||||
| US – Federal | $ | 5,497 | $ | 2,152 | $ | 2,857 | |||||||||||
| International | 50,300 | 49,357 | 48,694 | ||||||||||||||
| State and local | 1,981 | (337) | 1,797 | ||||||||||||||
| Total current provision | $ | 57,778 | $ | 51,172 | $ | 53,348 | |||||||||||
| Deferred provision (benefit) | |||||||||||||||||
| US – Federal | $ | 3,394 | $ | (25,026) | $ | (24,368) | |||||||||||
| International | 1,696 | (4,772) | (8,705) | ||||||||||||||
| State and local | (4,151) | (8,102) | (4,408) | ||||||||||||||
| Total deferred provision (benefit) | $ | 939 | $ | (37,900) | $ | (37,481) | |||||||||||
| Total provision | $ | 58,717 | $ | 13,272 | $ | 15,867 | |||||||||||
International and United States pretax income (loss) were as follows:
| For the Years Ended April 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| International | $ | 189,781 | $ | 109,616 | $ | 204,055 | |||||||||||
| United States | (46,903) | (296,663) | (170,955) | ||||||||||||||
| Total | $ | 142,878 | $ | (187,047) | $ | 33,100 | |||||||||||
Our effective income tax rate as a percentage of pretax income differed from the US federal statutory rate as shown below:
| For the Years Ended April 30, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| US federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
| Impact of foreign operations | 8.8 | % | (11.7) | % | (10.5) | % | |||||||||||
| Change in valuation allowance | 14.4 | % | (14.0) | % | (7.4) | % | |||||||||||
| State income taxes, net of US federal tax benefit | (1.5) | % | 4.6 | % | (7.2) | % | |||||||||||
| Tax credits and related net benefits | (2.7) | % | 1.8 | % | (12.1) | % | |||||||||||
| Impairment of goodwill | — | % | (10.9) | % | 66.7 | % | |||||||||||
| Return to provision | (1.9) | % | 6.1 | % | (13.7) | % | |||||||||||
| Other | 3.0 | % | (4.0) | % | 11.1 | % | |||||||||||
| Effective income tax rate | 41.1 | % | (7.1) | % | 47.9 | % | |||||||||||
The Company's effective tax rate for the fiscal year ended April 30, 2025, was primarily driven by the impact of the US valuation allowance, the rates of tax imposed on income earned in foreign jurisdictions, and state taxes.
Accounting for Uncertainty in Income Taxes:
As of April 30, 2025, and April 30, 2024, the total amount of unrecognized tax benefits was $9.8 million and $9.2 million, respectively, of which $0.4 million and $0.2 million represented accruals for interest and penalties recorded as additional tax expense in accordance with our accounting policy. As of April 30, 2025, and April 30, 2024, the total interest and penalties was $0.8 million and $0.6 million, respectively. We recorded net interest expense on reserves for unrecognized and recognized tax benefits of $0.2 million in each of the years ended April 30, 2025, and April 30, 2024. As of April 30, 2025, and April 30, 2024, the total amounts of unrecognized tax benefits that would reduce our income tax provision, if recognized, were approximately $9.8 million and $9.2 million, respectively. We do not expect any significant changes to the unrecognized tax benefits within the next twelve months.
A reconciliation of the unrecognized tax benefits included within the Other long-term liabilities on the Consolidated Statements of Financial Position is as follows:
| For the Years Ended April 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance at May 1 | $ | 9,151 | $ | 9,421 | |||||||
| Additions for current year tax positions | 1,423 | 1,607 | |||||||||
| Reductions for prior year tax positions | (337) | (181) | |||||||||
| Payments and settlements | — | (849) | |||||||||
| Reductions for lapse of statute of limitations | (440) | (847) | |||||||||
| Balance at April 30 | $ | 9,797 | $ | 9,151 | |||||||
Tax Audits:
We file income tax returns in the US and various states and non-US tax jurisdictions. Our major taxing jurisdictions are the United States, the United Kingdom, and Germany. We are no longer subject to income tax examinations for years prior to fiscal year 2014 in the major jurisdictions in which we are subject to tax.
Deferred Taxes:
Deferred taxes result from temporary differences in the recognition of revenue and expense for tax and financial reporting purposes.
The significant components of deferred tax assets and liabilities as of April 30 were as follows:
| 2025 | 2024 | ||||||||||
| Net operating losses | $ | 11,360 | $ | 22,587 | |||||||
| Reserve for sales returns and doubtful accounts | 2,095 | 2,363 | |||||||||
| Accrued employee compensation | 24,967 | 27,293 | |||||||||
| Foreign and federal credits | 28,835 | 33,742 | |||||||||
| Other accrued expenses | 1,009 | 3,822 | |||||||||
| Retirement and post-employment benefits | 8,282 | 10,203 | |||||||||
| Operating lease liabilities | 18,308 | 23,095 | |||||||||
| Interest expense disallowance | 14,919 | 10,676 | |||||||||
Impairment | 9,543 | — | |||||||||
Other | 415 | — | |||||||||
| Total gross deferred tax assets | $ | 119,733 | $ | 133,781 | |||||||
| Less valuation allowance | (77,309) | (53,498) | |||||||||
| Total deferred tax assets | $ | 42,424 | $ | 80,283 | |||||||
| Prepaid expenses and other assets | $ | (861) | $ | (5,352) | |||||||
| Unremitted foreign earnings | (2,220) | (3,115) | |||||||||
| Intangible and fixed assets | (130,077) | (155,862) | |||||||||
| Right-of-use assets | (10,848) | (12,685) | |||||||||
| Total deferred tax liabilities | $ | (144,006) | $ | (177,014) | |||||||
| Net deferred tax liabilities | $ | (101,582) | $ | (96,731) | |||||||
| Reported As | |||||||||||
Deferred tax assets excluding held-for-sale | 3,563 | 3,147 | |||||||||
Deferred tax assets held-for-sale | — | 6,176 | |||||||||
| Deferred tax assets | $ | 3,563 | $ | 9,323 | |||||||
Deferred tax liabilities excluding held-for-sale | (105,145) | (97,186) | |||||||||
Deferred tax liabilities held-for-sale | — | (8,868) | |||||||||
| Deferred tax liabilities | (105,145) | (106,054) | |||||||||
| Net deferred tax liabilities | $ | (101,582) | $ | (96,731) | |||||||
The change in net deferred taxes was primarily due to the decrease in net deferred tax liabilities primarily attributable to a decrease in tax liabilities in the capitalization of research and development (R&D) expenses. In addition, we had a decrease in net deferred tax assets related to an increase in the valuation allowance. In assessing the need for a valuation allowance, we take into account prior earnings history, expected future earnings, reversal of existing taxable temporary differences, carry back and carry forward periods and tax planning strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. Changes to tax laws and statutory tax rates can also have an impact on our valuation allowances. Changes in valuation allowances are included in the Company’s income tax provision in the period of change.
We have provided a $77.3 million valuation allowance as of April 30, 2025. This valuation allowance is increased by approximately $23.8 million from the valuation allowance as of April 30, 2024. In fiscal year 2024, due to temporary differences in the US, our deferred taxes reversed from a net deferred tax liability position to a net deferred tax asset position. Due to losses in the US resulting from impairments, restructuring, and acceleration of amortization expense on capitalized software, we concluded it was more-likely-than-not that all or a portion of our deferred tax asset may not be realized. As a result, we established a valuation allowance of $30.2 million. During fiscal year 2025 we increased this valuation allowance by $26.0 million, because of an increase in the US net deferred tax asset attributable primarily to interest expense disallowance and intangible and fixed assets.
As of April 30, 2025, we have apportioned state net operating loss carryforwards totaling approximately $126 million, with a tax effected value of $7.1 million net of federal benefits. We have foreign net operating loss carryforwards totaling approximately $0.1 million, and federal net operating loss carryforwards totaling $2.4 million, with a tax effected value of $0.5 million. Our state, foreign, and federal NOLs and credits, to the extent they expire, expire in various amounts from 1 year to indefinite.
We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we may be required to pay taxes in various US state and local jurisdictions and withholding or similar taxes in applicable non-US jurisdictions in the periods in which such repatriation occurs. As of April 30, 2025, we have recorded a $2.2 million liability related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jun 25, 2025 | Showing above |
| 2024 | Jun 26, 2024 | |
| 2023 | Jun 26, 2023 | |
| 2022 | Jun 24, 2022 | |
| 2021 | Jul 6, 2021 | |
| 2020 | Jun 26, 2020 | |
| 2019 | Jul 1, 2019 | |
| 2018 | Jun 29, 2018 | |
| 2017 | Jun 29, 2017 | |
| 2016 | Jun 29, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.