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Leases | 9 Months Ended
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Sep. 30, 2025
Leases [Abstract] |
Leases | 8. LEASES We lease most of our administrative and educational facilities under non-cancelable operating or finance leases expiring at various dates through 2050. In most cases, we are required to make additional payments under facility leases for taxes, insurance and other operating expenses incurred during the 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 is presented in the following table (dollars in thousands):
| For the Quarter Ended September 30, 2025 |  | For the Quarter Ended September 30, 2024 |
Lease expenses (1) |  |  |  |
Operating fixed lease expenses | $ | 2,557 |  | $ | 1,104 |
Finance lease and failed sale leaseback amortization expense |  | 1,573 |  |  | - |
Finance lease and failed sale leaseback interest expense |  | 1,542 |  |  | - |
Variable lease expenses |  | 1,076 |  |  | 207 |
Sublease income (2) |  | (109 | ) |  | - |
Total lease expenses | $ | 6,639 |  | $ | 1,311 |
Other information |  |  |  |
Gross operating cash flows for operating leases (3) | $ | (2,898 | ) | $ | (2,031 | )
Gross operating cash flows for finance leases and failed sale leasebacks |  | (1,432 | ) |  | - |
Gross financing cash flows for finance leases |  | (1,249 | ) |  | - |
Operating cash flows from subleases (3) |  | 109 |  |  | - |
| For the Year to Date Ended September 30, 2025 |  | For the Year to Date Ended September 30, 2024 |
Lease expenses (1) |  |  |  |
Operating fixed lease expenses | $ | 7,764 |  | $ | 3,670 |
Finance lease and failed sale leaseback amortization expense |  | 4,719 |  |  | - |
Finance lease and failed sale leaseback interest expense |  | 4,671 |  |  | - |
Variable lease expenses |  | 3,294 |  |  | 544 |
Sublease income (2) |  | (277 | ) |  | - |
Total lease expenses | $ | 20,171 |  | $ | 4,214 |
Other information |  |  |  |
Gross operating cash flows for operating leases (3) | $ | (9,617 | ) | $ | (6,513 | )
Gross operating cash flows for finance leases and failed sale leasebacks |  | (4,298 | ) |  | - |
Gross financing cash flows for finance leases |  | (3,681 | ) |  | - |
Gross financing cash flows for failed sale leaseback |  | (489 | ) |  | - |
Operating cash flows from subleases (3) |  | 277 |  |  | - |
| As of September 30, 2025 |  | As of September 30, 2024 |
Weighted average remaining lease term (in months) – operating leases |  | 87 |  |  | 68 |
Weighted average remaining lease term (in months) – finance leases |  | 28 |  |  | - |
Weighted average discount rate – operating leases |  | 6.2 | % |  | 5.2 | %
Weighted average discount rate– finance leases |  | 5.9 | % |  | - |
__________________ (1) Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. (2) For certain of our leased locations, we have vacated the facility and have fully or partially subleased the space. (3) Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs. Failed Sale-Leaseback Upon construction commencement of the 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 build to suit (“BTS”) arrangement due to the extent of the Company’s involvement in the project. Accordingly, the Company had 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 had recognized $56.5 million in construction contributions made by the landlord as construction financing on the consolidated balance sheet. Lease commencement began in January 2025 upon substantial completion of the BTS arrangement with a stated lease term of 25 years from commencement date. Upon lease commencement, the Company determined that it did not meet the criteria under ASC 606-10-25-30 to derecognize the asset as the Company retained control of the asset and the risks and rewards of ownership did not transfer to the landlord. As such, the transaction is considered a failed sale leaseback and the Company will retain the asset on its condensed consolidated balance sheet and depreciate the asset over its useful life. A financing obligation liability was recognized in the amount of the net proceeds received in the amount of $56.5 million. The Company will not recognize rent expense related to the leased asset. Instead, monthly rent payments under the lease agreement will be recorded as interest expense and a reduction of the outstanding financing obligation liability. Future minimum lease payments for failed sale-leaseback financing transactions as of September 30, 2025 are as follows:
|  | Sale Leaseback Payments |
2025 (1) |  | $ | 1,236 |
2026 |  |  | 5,043 |
2027 |  |  | 5,143 |
2028 |  |  | 5,246 |
2029 |  |  | 5,351 |
2030 and thereafter |  |  | 133,284 |
Total minimum lease payments |  | $ | 155,303 |
Less – Amount representing interest |  |  | (112,207 | )
Present value of minimum lease payments |  |  | 43,096 |
Plus - liability remaining at term end representing residual value of asset |  |  | 13,782 |
Failed sale leaseback liability |  |  | 56,878 |
__________________ (1) Liabilities remaining for the year ending December 31, 2025.

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