We lease most of our administrative and educational facilities under non-cancelable operating or finance leases expiring at various dates through 2049. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the operating lease period, which are typically variable in nature.

We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.

Quantitative information related to leases for the years ended December 31, 2024, 2023 and 2022 is presented in the following table (dollars in thousands):


	For the Year Ended December 31,
	2024			2023			2022
Lease expenses (1)
Operating fixed lease expenses	$	5,213		$	6,410		$	11,033
Finance lease amortization expense		426			-			-
Finance lease interest expense		81			-			-
Variable lease expenses		986			1,401			3,726
Sublease income (2)		(32	)		(500	)		(1,087	)
Total lease expenses	$	6,674		$	7,311		$	13,672

Other information
Gross operating cash flows for operating leases (3)	$	(8,961	)	$	(9,845	)	$	(16,827	)
Gross operating cash flows for finance leases		(81	)		-			-
Gross financing cash flows for finance leases		(398	)		-			-
Operating cash flows from subleases (3)	$	32		$	488		$	1,108

	As of December 31, 2024			As of December 31, 2023			As of December 31, 2022
Weighted average remaining lease term (in months) – operating leases		92			55			63
Weighted average remaining lease term (in months) – finance leases		37			-			-

Weighted average discount rate – operating leases		6.1	%		4.9	%		4.8	%
Weighted average discount rate– finance leases		5.9	%		-			-

As of December 31, 2024, future minimum lease payments under leases which are included in lease liabilities on our consolidated balance sheet are as follows (dollars in thousands):


	Operating Leases Total		Finance Leases Total		Total Lease Liabilities

2025 (1)	$	11,118	$	6,280	$	17,398
2026		9,486		5,964		15,450
2027		10,365		5,325		15,690
2028		7,844		957		8,801
2029		7,113		-		7,113
2030 and thereafter		28,505		-		28,505
Total	$	74,431	$	18,526	$	92,957
Less: imputed interest		16,415		1,505		17,920
Present value of future minimum lease payments		58,016		17,021		75,037
Less: current lease liabilities		7,792		5,466		13,258
Non-current lease liabilities	$	50,224	$	11,555	$	61,779

_____________

(1)

Amounts provided are for unpaid lease obligations remaining as of December 31, 2024.

Upon construction commencement of its new St. Augustine campus in April 2023, the Company determined that it was the deemed owner for accounting purposes during the construction period under a BTS arrangement due to the extent of the Company’s involvement in the project. Accordingly, the Company has recognized all cash and non-cash assets contributed by the landlord to the project as of December 31, 2024 as a component of construction in progress with a corresponding construction financing liability. As of December 31, 2024, the Company has recognized $56.5 million in construction contributions made by the landlord as construction financing on the consolidated balance sheet. Lease commencement will begin upon substantial completion of the BTS arrangement with a stated lease term of 25 years from commencement date, with an estimated total lease obligation of $158.4 million over the term of the lease. The lease commenced in January 2025.

We use discount rates to determine the net present value of our gross lease obligations when calculating the lease liability and related ROU asset. In cases in which the rate implicit in the lease is readily determinable, we use that discount rate for purposes of the net present value calculation. In most cases, our lease agreements do not have a discount rate that is readily determinable and therefore we use an estimate of our incremental borrowing rate. Our incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

We have 17 leases related to our ongoing operations which consist of administrative offices and university locations, of which two are either month to month leases or had an initial lease term of less than one year and therefore are not included in the lease liability and ROU asset recorded within our consolidated balance sheet, one is related to a sale-leaseback transaction which is ending in March 2025, and one is related to a build to suit arrangement. For those leases that we are reasonably certain that we will extend or terminate the leases at lease conception or modification, we have taken those factors into account when determining the lease liability recorded within our consolidated balance sheet.

During the year ended December 31, 2024, we recorded $1.6 million of asset impairment charges related to certain ROU assets within the CTU segment and $2.0 million of asset impairment charges related to certain ROU assets within the AIUS segment. Management made the decision to no longer use the spaces associated with the ROU assets and as a result recorded an asset impairment charge in accordance with ASC Topic 360 for the remaining value that has been vacated, adjusted for any early lease termination options that the Company plans to execute.