| Reconciliation of Weighted Average Shares Outstanding | Note 5 – Reconciliation of Weighted Average Shares Outstanding A reconciliation of the shares used in the computation of earnings (loss) per share follows (shares in thousands):
For the Years Ended April 30,
2021 2020 2019
Weighted average shares outstanding 55,931 56,224 57,240
Less: Unvested restricted shares (1 ) (15 ) (48 )
Shares used for basic earnings (loss) per share 55,930 56,209 57,192
Dilutive effect of unvested restricted stock units and other stock awards 531 — 648
Shares used for diluted earnings (loss) per share 56,461 56,209 57,840
Antidilutive options to purchase Class A common shares, restricted shares, warrants to purchase Class A common shares and contingently issuable restricted stock which are excluded from the table above 982 1,677 958 In calculating diluted net loss per common share for the year ended April 30, 2020, our diluted weighted average number of common shares outstanding excludes the effect of unvested restricted stock units and other stock awards as the effect was anti-dilutive. This occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive. The shares associated with performance-based stock awards are considered contingently issuable shares and will be included in the diluted weighted average number of common shares outstanding when they have met the performance conditions and when their effect is dilutive. Note 6 – Accumulated Other Comprehensive Loss Changes in Accumulated Other Comprehensive Loss by component, net of tax, for the years ended April 30, 2021, 2020, and 2019 were as follows:
Foreign Currency Translation Unamortized Retirement Costs Interest Rate Swaps Total
Balance at April 30, 2018 $ (251,573 ) $ (191,026 ) $ 3,019 $ (439,580 )
Other comprehensive (loss) income before reclassifications (60,534 ) (9,422 ) 1,121 (68,835 )
Amounts reclassified from Accumulated other comprehensive loss — 4,391 (4,714 ) (323 )
Total other comprehensive loss (60,534 ) (5,031 ) (3,593 ) (69,158 )
Balance at April 30, 2019 $ (312,107 ) $ (196,057 ) $ (574 ) $ (508,738 )
Other comprehensive loss before reclassifications (28,596 ) (36,965 ) (5,988 ) (71,549 )
Amounts reclassified from Accumulated other comprehensive loss — 5,102 (312 ) 4,790
Total other comprehensive loss (28,596 ) (31,863 ) (6,300 ) (66,759 )
Balance at April 30, 2020 $ (340,703 ) $ (227,920 ) $ (6,874 ) $ (575,497 )
Other comprehensive income (loss) before reclassifications 82,762 (6,273 ) (639 ) 75,850
Amounts reclassified from Accumulated other comprehensive loss — 6,047 2,810 8,857
Total other comprehensive income (loss) 82,762 (226 ) 2,171 84,707
Balance at April 30, 2021 $ (257,941 ) $ (228,146 ) $ (4,703 ) $ (490,790 ) For the years ended April 30, 2021, 2020 and 2019, pretax actuarial losses included in Unamortized Retirement Costs of approximately $7.8 million, $6.4 million, and $5.5 million respectively, were amortized from Accumulated Other Comprehensive Loss and recognized as pension and post-retirement benefit expense in Operating and administrative expenses and Other income on the Consolidated Statements of Income (Loss). Our policy for releasing the income tax effects from accumulated other comprehensive (loss) income is to release when the corresponding pretax accumulated other comprehensive (loss) income items are reclassified to earnings. Note 7 – Restructuring and Related Charges Business Optimization Program Beginning in fiscal year 2020, we initiated a multiyear Business Optimization Program (the Business Optimization Program) to drive efficiency improvement and operating savings. The following tables summarize the pretax restructuring charges related to this program:
For the Years Ended April 30,
2021 2020 Total Charges Incurred to Date
Charges by Segment:
Research Publishing & Platforms $ 99 $ 3,546 $ 3,645
Academic & Professional Learning 3,229 10,475 13,704
Education Services 531 3,774 4,305
Corporate Expenses 29,590 15,018 44,608
Total Restructuring and Related Charges $ 33,449 $ 32,813 $ 66,262
Charges (Credits) by Activity:
Severance and termination benefits $ 11,531 $ 26,864 $ 38,395
Impairment of operating lease ROU assets and property and equipment 14,918 161 15,079
Acceleration of expense related to operating lease ROU assets and property and equipment 3,378 — 3,378
Facility related charges 3,684 3,986 7,670
Other activities (62 ) 1,802 1,740
Total Restructuring and Related Charges $ 33,449 $ 32,813 $ 66,262 In November 2020 , in response to the COVID -19 pandemic and the Company’s successful transition to a virtual work environment, we increased use of virtual work arrangements for post-pandemic operations. As a result, we expanded the scope of the Business Optimization Program to include the exit of certain leased office space beginning in the three months ended January 31, 2021 , and the reduction of our occupancy at other facilities. We are reducing our real estate square footage occupancy by approximately . These actions resulted in a pretax restructuring charge of $ million in the three months ended January 31, 2021 . This restructuring charge primarily reflects the following noncash charges:
• impairment charges of $ million recorded in our corporate category, which included the impairment of operating lease ROU assets of $ million related to certain leases that will be subleased, and the related property and equipment of $ million described further below, and
• acceleration of expense of $ million, which included the acceleration of rent expense associated with operating lease ROU assets of $ million related to certain leases that will be abandoned or terminated and the related depreciation and amortization of property and equipment of $ million. Due to the actions taken above, we tested the operating lease ROU assets and the related property and equipment for those being subleased for recoverability by comparing the carrying value of the asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset groups were below the carrying values. Therefore, there was an indication of impairment. We then determined the fair value of the asset groups by utilizing the present value of the estimated future cash flows attributable to the assets. The fair value of these operating lease ROU assets and the property and equipment immediately subsequent to the impairment was $ million and is categorized as Level 3 within the FASB ASC Topic 820 , “Fair Value Measurements” fair value hierarchy. In addition, we also incurred ongoing facility-related costs associated with certain properties that resulted in additional restructuring charges of million in the year ended . Other Activities for the year ended April 30, 2020 primarily relate to reserves and costs associated with the cessation of certain offerings, and, to a lesser extent, a pension settlement, and the impairment of certain software licenses The following table summarizes the activity for the Business Optimization Program liability for the year ended April 30, 2021:
April 30, 2020 Charges (Credits) Payments Foreign Translation & Other Adjustments April 30, 2021
Severance and termination benefits $ 17,632 $ 11,531 $ (18,310 ) $ 612 $ 11,465
Other activities 430 (264 ) (262 ) 96 —
Total $ 18,062 $ 11,267 $ (18,572 ) $ 708 $ 11,465 The restructuring liability for accrued severance and termination benefits is reflected in Accrued employment costs in the Consolidated Statement of Financial Position as of April 30, 2021. Restructuring and Reinvestment Program Beginning in the year ended April 30, 2013, we initiated a global program (the Restructuring and Reinvestment Program) to restructure and realign our cost base with current and anticipated future market conditions. We are targeting a majority of the expected cost savings achieved to improve margins and earnings, while the remainder will be reinvested in high-growth digital business opportunities. The following tables summarize the pretax restructuring (credits) charges related to this program:
For the Years Ended April 30,
2021 2020 2019 Total Charges Incurred to Date
(Credits) Charges by Segment:
Research Publishing & Platforms $ (135 ) $ 340 $ 1,131 $ 26,749
Academic & Professional Learning 274 (5 ) 1,139 43,108
Education Services — (103 ) 389 3,764
Corporate Expenses (278 ) (438 ) 459 95,662
Total Restructuring and Related (Credits) Charges $ (139 ) $ (206 ) $ 3,118 $ 169,283
(Credits) Charges by Activity:
Severance and termination benefits $ (139 ) $ (250 ) $ 1,456 $ 115,870
Consulting and contract termination costs — (171 ) 526 20,984
Other activities — 215 1,136 32,429
Total Restructuring and Related (Credits) Charges $ (139 ) $ (206 ) $ 3,118 $ 169,283 Other activities for the year ended April 30, 2020 include facility related costs. Other activities for the year ended April 30, 2019 reflect lease impairment related costs. The following table summarizes the activity for the Restructuring and Reinvestment Program liability for the year ended April 30, 2021:
April 30, 2020 (Credits) Payments Foreign Translation & Other Adjustments April 30, 2021
Severance and termination benefits $ 1,360 $ (139 ) $ (888 ) $ 69 $ 402
Other activities 230 — (207 ) 239 262
Total $ 1,590 $ (139 ) $ (1,095 ) $ 308 $ 664 The restructuring liability as of April 30, 2021 for accrued severance and termination benefits is reflected in Accrued employment costs in the Consolidated Statement of Financial Position. The restructuring liability as of April 30, 2021 for other activities are reflected in Other accrued liabilities in the Consolidated Statement of Financial Position and mainly relate to facility relocation and lease impairment related costs. We currently do not anticipate any further material charges related to the Restructuring and Reinvestment Program. Note 8 – Inventories Inventories, net consisted of the following at April 30:
2021 2020
Finished goods $ 31,704 $ 36,014
Work-in-process 2,060 1,398
Paper and other materials 331 331
Total inventories before estimated sales returns and LIFO reserve 34,095 37,743
Inventory value of estimated sales returns 10,886 8,686
LIFO reserve (2,443 ) (2,815 )
Inventories, net $ 42,538 $ 43,614 See Note 2, “Summary of Significant Accounting Policies, Recently Issued and Recently Adopted Accounting Standards,” under the caption “Sales Return Reserves,” for a discussion of the Inventory value of estimated sales returns. Finished goods not recorded at LIFO have been recorded at the lower of cost or net realizable value, which resulted in a reduction of $14.0 million and $16.1 million as of April 30, 2021 and 2020, respectively. Note 9 – Product Development Assets Product development assets, net consisted of the following at April 30:
2021 2020
Book composition costs $ 20,474 $ 18,744
Software costs 23,262 28,995
Content development costs 5,781 5,904
Product development assets, net $ 49,517 $ 53,643 Product development assets include $6.3 million and $4.9 million of work-in-process as of April 30, 2021 and 2020, respectively. As of April 30, 2021 this is primarily for book composition costs and, to a lesser extent, software costs. As of April 30, 2020, this is primarily for book composition costs. Product development assets are net of accumulated amortization of $269.0 million and $244.1 million as of April 30, 2021 and 2020, respectively. Note 10 – Technology, Property and Equipment Technology, property and equipment, net consisted of the following at April 30:
2021 2020
Capitalized software $ 536,878 $ 471,844
Computer hardware 50,714 46,640
Buildings and leasehold improvements 99,636 99,230
Furniture, fixtures, and warehouse equipment 42,674 44,104
Land and land improvements 3,656 3,298
Technology, property and equipment, gross 733,558 665,116
Accumulated depreciation and amortization (451,288 ) (367,111 )
Technology, property and equipment, net $ 282,270 $ 298,005 The following table details our depreciation and amortization expense for technology, property and equipment, net:
For the Years Ended April 30,
2021 2020 2019
Capitalized software amortization expense $ 69,184 $ 55,685 $ 50,095
Depreciation and amortization expense, excluding capitalized software 21,955 21,031 19,323
Total depreciation and amortization expense for technology, property and equipment $ 91,139 $ 76,716 $ 69,418 Technology, property and equipment includes $0.6 million and $0.9 million of work-in-process as of April 30, 2021 and 2020, respectively, for capitalized software. The net book value of capitalized software costs was $202.8 million and $207.5 million as of April 30, 2021 and 2020, respectively. Note 11 – Goodwill and Intangible Assets Goodwill The following table summarizes the activity in goodwill by segment as of April 30:
2020 (1) Acquisitions (2) Foreign Translation Adjustment 2021
Research Publishing & Platforms $ 448,130 $ 136,789 $ 34,284 $ 619,203
Academic & Professional Learning 501,091 — 11,421 512,512
Education Services 167,569 — 5,056 172,625
Total $ 1,116,790 $ 136,789 $ 50,761 $ 1,304,340
(1) The Education Services goodwill balance as of April 30, 2020 includes a cumulative pretax noncash goodwill impairment of $ million.
(2) Refer to Note 4, “Acquisitions,” for more information related to the acquisitions that occurred in the year ended April 30, 2021. Annual Goodwill Impairment Test as of February 1, 2021 During the fourth quarter of 2021, we completed step one of our annual goodwill impairment test for our reporting units. We concluded that the fair values of our reporting units were above their carrying values and, therefore, there was no indication of impairment. We estimated the fair value of these reporting units using a weighting of fair values derived from an income and a market approach. Under the income approach, we determined the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on our best estimates of forecasted economic and market conditions over the period including growth rates, expected changes in operating cash flows and cash expenditures. The discount rate used is based on a weighted average cost of capital adjusted for the relevant risk associated with the characteristics of the business and the projected cash flows. The market approach estimates fair value based on market multiples of current and forward 12-month revenue or EBITDA, as applicable, derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting unit. As noted above, the fair value determined as part of the annual goodwill impairment test completed in the fourth quarter exceeded the carrying value for all of our reporting units. Therefore, there was no impairment of goodwill. However, if the fair value of these reporting units decrease in future periods, we could potentially have an impairment. The future occurrence of a potential indicator of impairment, such as a decrease in expected net earnings, changes in assumptions including the impact of COVID-19, adverse equity market conditions, a decline in current market multiples, a decline in our common stock price, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, unanticipated competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, could require an interim assessment for some or all of the reporting units before the next required annual assessment. Annual Goodwill Impairment Test as of February 1, 2020 As of February 1, 2020, we completed our annual goodwill impairment test for our reporting units. We concluded that the fair values of our Research Publishing & Platforms and Academic & Professional Learning reporting units were above their carrying values and, therefore, there was no indication of impairment. During our annual goodwill impairment test initiated on February 1, 2020 we identified indicators that the goodwill of the Education Services business was impaired due to underperformance as compared with our acquisition case projections for revenue growth and operating cash flow. Subsequently, during the fourth quarter of fiscal year 2020, we determined that our updated revenue and operating cash flow projections would be further impacted by anticipated near-term headwinds due to COVID-19, including adverse impacts on new student starts and student reenrollment. Therefore, we updated the impairment test as of March 31, 2020 to reflect this change in circumstances. As a result, we concluded that the carrying value was above the fair value which resulted in a pretax noncash goodwill impairment of $ million. This charge is reflected in Impairment of goodwill and intangible assets Prior to performing the goodwill impairment test for Education Services, we also evaluated the recoverability of long-lived assets of the reporting unit. The carrying value of the long-lived assets that were tested for impairment was $ million. When indicators of impairment are present, we test definite lived and long-lived assets for recoverability by comparing the carrying value of an asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We considered the lower than expected revenue and forecasted over a sustained period of time, and downward revisions to our cash flow forecasts for this reporting unit to be indicators of impairment for their long-lived assets. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group of the Education Services reporting unit exceeded the carrying value. Therefore, there was no impairment. Intangible Assets Intangible assets, net as of April 30 were as follows:
2021 2020
Cost Accumulated Amortization Net Cost Accumulated Amortization Accumulated Impairment Net
Intangible assets with definite lives, net
Content and publishing rights $ 1,062,072 $ (497,843 ) $ 564,229 $ 806,862 $ (444,756 ) $ — $ 362,106
Customer relationships 384,462 (117,985 ) 266,477 377,652 (87,234 ) — 290,418
Developed technology (1) 42,785 (7,824 ) 34,961 19,225 (3,273 ) (2,841 ) 13,111
Brands and trademarks 45,630 (26,094 ) 19,536 42,877 (22,689 ) — 20,188
Covenants not to compete 1,250 (1,192 ) 58 1,675 (1,429 ) — 246
Total (2) 1,536,199 (650,938 ) 885,261 1,248,291 (559,381 ) (2,841 ) 686,069
Intangible assets with indefinite lives
Brands and trademarks (1) 37,000 — 37,000 130,107 — (93,107 ) 37,000
Publishing rights 93,041 — 93,041 84,336 — — 84,336
Total 130,041 — 130,041 214,443 — (93,107 ) 121,336
Total intangible assets, net $ 1,666,240 $ (650,938 ) $ 1,015,302 $ 1,462,734 $ (559,381 ) $ (95,948 ) $ 807,405
(1) The developed technology balance as of April 30, 2021 is presented net of accumulated impairments and write-offs of $2.8 million. The indefinite-lived brands and trademarks cost balance as of April 30, 2021 is net of accumulated impairments of $93.1 million.
(2) Refer to Note 4, “Acquisitions,” for more information related to the acquisitions that occurred in 2021 and 2020. Based on the current amount of intangible assets subject to amortization and assuming current foreign exchange rates, the estimated amortization expense for the following years are as follows:
Fiscal Year Amount
2022 $ 82,401
2023 76,125
2024 71,367
2025 65,764
2026 63,410
Thereafter 526,194
Total $ 885,261 Annual Indefinite-Lived Intangibles Impairment Test as of February 1, 2021 We also review our indefinite-lived intangible assets for impairment annually, which consists of brands and trademarks and certain acquired publishing rights. As of February 1, 2021, we completed our annual impairment test related to the indefinite-lived intangible assets. We concluded that the fair values of these indefinite-lived intangible assets were above their carrying values and, therefore, there was no indication of impairment. Fiscal Year 2020 Impairment Annual Indefinite-Lived Intangibles Impairment Test as of February 1, 2020 During the fourth quarter of 2020, we completed our annual impairment test related to the indefinite-lived intangible assets. We concluded that the fair values of these indefinite-lived intangible assets were above their carrying values and, therefore, there was no indication of impairment, except for the Blackwell indefinite-lived trademark. For the year ended April 30, 2020, we recorded a pretax noncash impairment charge of $ million for our Blackwell trademark, which was acquired in 2007 and carried as an indefinite-lived intangible asset primarily related to our Research Publishing & Platforms segment. and unify our research journal content under one Wiley brand, which will sharply limit the use of the Blackwell trade name. This impairment resulted in writing off substantially all of the carrying value of the intangible trademark asset. This charge is reflected in Impairment of goodwill and intangible assets The resulting noncash impairment charge was entirely unrelated to COVID-19 or the expected future financial performance of the Research Publishing & Platforms segment . Intangible Assets with Definite Lives As a result of our decision to discontinue the use of certain technology offerings within the Research Publishing & Platforms segment, we recorded a pretax noncash impairment charge of $ million related to a certain developed technology intangible. This charge was included in Impairment of goodwill and intangible assets on Note 12 Operating Leases We have contractual obligations as a lessee with respect to offices, warehouses and distribution centers, automobiles, and office equipment. We determine if an arrangement is a lease at inception of the contract in accordance with guidance detailed in the lease standard and we perform the lease classification test as of the lease commencement date. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The present value of the lease payments is calculated using an incremental borrowing rate, which was determined based on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. We use an unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate. Under the new leasing standard, leases that are more than one year in duration are capitalized and recorded on the Consolidated Statements of Financial Position. Some of our leases offer an option to extend the term of such leases. We utilize the reasonably certain threshold criteria in determining which options we will exercise. Furthermore, some of our lease payments are based on index rates with minimum annual increases. These represent fixed payments and are captured in the future minimum lease payments calculation. For operating leases, the ROU assets and liabilities as of April 30 are presented in our Consolidated Statement of Financial Position as follows:
2021 2020
Operating lease ROU assets $ 121,430 $ 142,716
Short-term portion of operating lease liabilities 22,440 21,810
Operating lease liabilities, non-current $ 145,832 $ 159,782 During the year ended April 30, 2021, we added $6.1 million to the ROU assets and $5.7 million to the operating lease liabilities due to new leases, including due to acquisitions, as well as modifications and remeasurements to our existing operating leases. As a result of expanding the scope of the Business Optimization Program to include the exit of certain leased office space beginning in the third quarter of fiscal 2021, we incurred a pretax restructuring charge of $ million in the three months ended January 31, 2021. This charge included impairment charges and acceleration of expense associated with certain operating lease ROU assets. See Note 7, “Restructuring and Related Charges” for more information on this program and the charges incurred. Our total net lease costs were as follows:
For the Years Ended April 30,
2021 2020
Operating lease cost $ 24,862 $ 26,027
Variable lease cost 2,135 3,856
Short-term lease cost 248 86
Sublease income (722 ) (691 )
Total net lease cost (1) $ 26,523 $ 29,278
(1) Total net lease cost does not include those costs included in Restructuring and related charges on our Consolidated Statements of Income (Loss). See Note Other supplemental information includes the following:
For the Years Ended April 30,
2021 2020
Weighted-average remaining contractual lease term (years) 9 10
Weighted-average discount rate 5.89 % 5.89 %
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 32,344 $ 28,243 The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the Consolidated Statement of Financial Position as of April 30, 2021:
Fiscal Year Operating Lease Liabilities
2022 $ 30,674
2023 26,905
2024 24,799
2025 23,235
2026 20,584
Thereafter 95,000
Total future undiscounted minimum lease payments 221,197
Less: Imputed interest 52,925
Present value of minimum lease payments 168,272
Less: Current portion 22,440
Noncurrent portion $ 145,832 Prior to the Adoption of ASC Topic 842 The following schedule shows the composition of net rent expense for operating leases for the year ended April 30:
2019
Minimum rental $ 29,066
Less: sublease rentals (719 )
Total $ 28,347 Rent expense associated with operating leases that include scheduled rent increases and tenant incentives, such as rent holidays or leasehold improvement allowances, were recorded on a straight-line basis over the term of the lease. Note 13 –Income Taxes The provisions for income taxes were as follows:
For the Years Ended April 30,
2021 2020 2019
Current Provision
US – Federal $ (6,631 ) $ 1,145 $ 2,384
International 43,269 37,494 52,518
State and local 1,359 172 2,536
Total current provision $ 37,997 $ 38,811 $ 57,438
Deferred (benefit) provision
US – Federal $ (11,996 ) $ (8,476 ) $ 335
International 1,175 (15,022 ) (7,630 )
State and local 480 (4,118 ) (5,454 )
Total deferred (benefit) $ (10,341 ) $ (27,616 ) $ (12,749 )
Total provision $ 27,656 $ 11,195 $ 44,689 International and United States pretax income (loss) were as follows:
For the Years Ended April 30,
2021 2020 2019
International $ 202,490 $ 104,185 $ 204,326
United States (26,578 ) (167,277 ) 8,626
Total $ 175,912 $ (63,092 ) $ 212,952 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,
2021 2020 2019
US federal statutory rate 21.0 % 21.0 % 21.0 %
Cost of higher taxes on non-US income 1.1 4.8 0.9
State income taxes, net of US federal tax benefit 0.8 3.3 (1.3 )
US NOL carryback under CARES Act (8.0 ) — —
Deferred tax (benefit) from US Tax Act — — 0.1
Tax credits and related benefits (0.5 ) (1.1 ) (0.8 )
Impairment of goodwill and intangibles — (42.3 ) —
Other 1.3 (3.4 ) 1.1
Effective income tax rate 15.7 % (17.7 )% 21.0 % The effective tax rate was 15.7% for the year ended April 30, 2021, compared to a tax expense rate of 17.7% on a pretax loss for the year ended April 30, 2020. Our rate for the year ended April 30, 2021 benefitted by $14.0 million (8.0%) from the CARES Act and certain regulations issued in late July 2020, which enabled us to carry back certain US net operating losses (NOLs), reducing our tax for the year ended April 30, 2020 compared to prior estimates. This benefit was partially offset by (a) $3.5 million (2.0%) from an increase in the official UK statutory rate during our three months ended July 31, 2020, resulting in our taxes in non-US income increasing our effective income tax rate and (b) a $3.2 million (1.8%) increase in our state tax expense included in our state income tax expense above, due to increasing our deferred tax liabilities in connection with our expanded presence in additional states resulting from COVID-19 and employees working in additional locations. The 17.7% tax expense rate on a pretax loss for the year ended April 30, 2020 was primarily due to the non-deductible impairment of goodwill. In connection with the CARES Act and certain regulations, we carried back our April 30, 2020 US NOL to our year ended April 30, 2015 and claimed a $20.7 million refund. The refund plus interest was received in February 2021. The NOL was carried back to fiscal year 2015 when the US corporate tax rate was 35.0%. The carryback to a year with a higher rate, plus certain additional net permanent deductions included in the carryback resulted in a $14.0 million tax benefit. The benefit was partially offset by an increase in the UK statutory rate and an increase in our state tax expense. During the three months ended July 31, 2020, the UK officially enacted legislation that increased its statutory rate from 17% to 19%. This resulted in a $3.5 million noncash deferred tax expense from the re-measurement of our applicable UK net deferred tax liabilities. During the year ended April 30, 2021, as a result of COVID-19, we adjusted our policies to permit employees to work from home, resulting in an increased presence in many states. This resulted in a $3.2 million noncash deferred tax expense from the re-measurement of our applicable US net deferred tax liabilities. Accounting for Uncertainty in Income Taxes: As of April 30, 2021 and April 30, 2020, the total amount of unrecognized tax benefits were $9.1 million and $6.2 million, respectively, of which $0.7 million and $0.6 million represented accruals for interest and penalties recorded as additional tax expense in accordance with our accounting policy. We recorded net interest expense on reserves for unrecognized and recognized tax benefits of $0.2 million within each of the years ended April 30, 2021 and 2020. As of April 30, 2021, and April 30, 2020, the total amounts of unrecognized tax benefits that would reduce our income tax provision, if recognized, were approximately $7.4 million and $6.2 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 line item on the Consolidated Statements of Financial Position follows:
2021 2020
Balance at May 1 $ 6,194 $ 7,659
Additions for current year tax positions 3,626 694
Additions for prior year tax positions 511 —
Reductions for prior year tax positions (163 ) (655 )
Foreign translation adjustment 57 (15 )
Payments and settlements (215 ) (56 )
Reductions for lapse of statute of limitations (866 ) (1,433 )
Balance at April 30 $ 9,144 $ 6,194 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, United Kingdom and Germany. Except for one immaterial item, 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. We received a tax audit notice from the Internal Revenue Service with respect to our loss for our year ended April 30, 2020 and the carryback to the year ended April 30, 2015. We also received tax audit notices for our German entities for the fiscal years 2014-2017. The audit process in Germany has been delayed due to COVID-19. We have also addressed inquiries in other jurisdictions where we maintain a smaller presence. Deferred Taxes: Deferred taxes result from temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. We believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. The significant components of deferred tax assets and liabilities at April 30 were as follows:
2021 2020
Net operating losses $ 19,433 $ 17,966
Reserve for sales returns and doubtful accounts 3,838 2,638
Accrued employee compensation 32,835 20,114
Foreign and federal credits 5,129 31,487
Other accrued expenses 16,092 11,827
Retirement and post-employment benefits 30,039 37,927
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