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Leases
 9 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Leases Leases
As of June 30, 2022, we leased 11 of our 15 currently operating campuses, one future campus and our corporate headquarters under non-cancelable operating leases, some of which contain escalation clauses and requirements to pay other fees associated with the leases. The facility leases have original lease terms ranging from 8 to 20 years and expire at various dates through 2036. In addition, the leases commonly include lease incentives in the form of rent abatements and tenant improvement allowances. We sublease certain portions of unused building space to third parties, which as of June 30, 2022, resulted in minimal income. All of the leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on our condensed consolidated balance sheets.

As previously discussed in Note 7, in February 2022 we purchased the 2611 entity which owns the Lisle Campus. While the lease for the Lisle Campus remains in place between the 2611 and UTI of Illinois, LLC entities, at the UTI, Inc consolidated level, the right-of-use asset and the operating lease liability for this campus were settled, resulting in a gain on settlement of $1.6 million which has been included within “Educational services and facilities” on our condensed consolidated statement of operations for the nine months ended June 30, 2022.

Some of the facility leases are subject to annual changes in the Consumer Price Index (“CPI”). While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. There are no early termination with penalties, residual value guarantees, restrictions or covenants imposed by our facility leases.

The components of lease expense are included in “Educational services and facilities” and “Selling, general and administrative” on the condensed consolidated statement of operations, with the exception of interest on lease liabilities, which is included in “Interest expense.”

The components of lease expense during the three and nine months ended June 30, 2022 and 2021 were as follows:
Three Months Ended June 30,Nine Months Ended June 30,
Lease Expense2022202120222021
Operating lease expense(1)
$4,990 $5,547 $17,724 $17,137 
Finance lease expense:
Amortization of leased assets18 32 54 97 
Interest on lease liabilities1 2 2 5 
Variable lease expense1,586 947 4,059 2,804 
Sublease income(32)(119)(122)(365)
Total net lease expense$6,563 $6,409 $21,717 $19,678 
(1)     Excludes the expense for short-term leases not accounted for under ASC 842, which was not significant for the three and nine months ended June 30, 2022 and 2021.
Supplemental balance sheet, cash flow and other information related to our leases was as follows (in thousands, except lease term and discount rate):

LeasesClassificationJune 30, 2022September 30, 2021
Assets:
Operating lease assets
Right-of-use assets for operating leases(1)
$139,881 $159,075 
Finance lease assets
Property and equipment, net(2)
40 94 
Total leased assets$139,921 $159,169 
Liabilities:
Current
   Operating lease liabilities
Operating lease liability, current portion(1)
$13,197 $14,075 
   Finance lease liabilitiesLong-term debt, current portion42 73 
Noncurrent
   Operating lease liabilities
Operating lease liability(1)
136,824 153,228 
   Finance lease liabilitiesLong-term debt— 23 
Total lease liabilities$150,063 $167,399 

(1)     As noted above, during the nine months ended June 30, 2022, our right-of-use assets and operating lease liability decreased due to the purchase of the Lisle Campus and the settlement of the existing lease.
(2)     Finance lease assets are recorded net of accumulated amortization of $0.2 million and $0.1 million as of June 30, 2022 and September 30, 2021, respectively.

Lease Term and Discount RateJune 30, 2022September 30, 2021
Weighted-average remaining lease term (in years):
   Operating leases9.159.37
   Finance leases0.571.32
Weighted average discount rate:
   Operating leases3.92 %4.31 %
   Finance leases3.08 %3.08 %

Nine Months Ended June 30,
Supplemental Disclosure of Cash Flow Information and Other Information20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$9,174 $13,546 
Financing cash flows from finance leases55 96 
Non-cash activity related to lease liabilities:
   Lease assets obtained in exchange for new operating lease liabilities (1)
$7,899 $14,789 
(1) Excludes the operating leases recorded for the MIAT acquisition discussed in Note 4.
Maturities of lease liabilities were as follows:
As of June 30, 2022
Years ending September 30,Operating LeasesFinance Leases
Remainder of 2022$2,214 $19 
202319,853 23 
202419,656 — 
202519,917 — 
202619,674 — 
2027 and thereafter97,238 — 
Total lease payments178,552 42 
Less: interest(28,531)— 
Present value of lease liabilities150,021 42 
Less: current lease liabilities(13,197)(42)
Long-term lease liabilities$136,824 $— 
Leases Leases
As of June 30, 2022, we leased 11 of our 15 currently operating campuses, one future campus and our corporate headquarters under non-cancelable operating leases, some of which contain escalation clauses and requirements to pay other fees associated with the leases. The facility leases have original lease terms ranging from 8 to 20 years and expire at various dates through 2036. In addition, the leases commonly include lease incentives in the form of rent abatements and tenant improvement allowances. We sublease certain portions of unused building space to third parties, which as of June 30, 2022, resulted in minimal income. All of the leases, other than those that may qualify for the short-term scope exception of 12 months or less, are recorded on our condensed consolidated balance sheets.

As previously discussed in Note 7, in February 2022 we purchased the 2611 entity which owns the Lisle Campus. While the lease for the Lisle Campus remains in place between the 2611 and UTI of Illinois, LLC entities, at the UTI, Inc consolidated level, the right-of-use asset and the operating lease liability for this campus were settled, resulting in a gain on settlement of $1.6 million which has been included within “Educational services and facilities” on our condensed consolidated statement of operations for the nine months ended June 30, 2022.

Some of the facility leases are subject to annual changes in the Consumer Price Index (“CPI”). While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. There are no early termination with penalties, residual value guarantees, restrictions or covenants imposed by our facility leases.

The components of lease expense are included in “Educational services and facilities” and “Selling, general and administrative” on the condensed consolidated statement of operations, with the exception of interest on lease liabilities, which is included in “Interest expense.”

The components of lease expense during the three and nine months ended June 30, 2022 and 2021 were as follows:
Three Months Ended June 30,Nine Months Ended June 30,
Lease Expense2022202120222021
Operating lease expense(1)
$4,990 $5,547 $17,724 $17,137 
Finance lease expense:
Amortization of leased assets18 32 54 97 
Interest on lease liabilities1 2 2 5 
Variable lease expense1,586 947 4,059 2,804 
Sublease income(32)(119)(122)(365)
Total net lease expense$6,563 $6,409 $21,717 $19,678 
(1)     Excludes the expense for short-term leases not accounted for under ASC 842, which was not significant for the three and nine months ended June 30, 2022 and 2021.
Supplemental balance sheet, cash flow and other information related to our leases was as follows (in thousands, except lease term and discount rate):

LeasesClassificationJune 30, 2022September 30, 2021
Assets:
Operating lease assets
Right-of-use assets for operating leases(1)
$139,881 $159,075 
Finance lease assets
Property and equipment, net(2)
40 94 
Total leased assets$139,921 $159,169 
Liabilities:
Current
   Operating lease liabilities
Operating lease liability, current portion(1)
$13,197 $14,075 
   Finance lease liabilitiesLong-term debt, current portion42 73 
Noncurrent
   Operating lease liabilities
Operating lease liability(1)
136,824 153,228 
   Finance lease liabilitiesLong-term debt— 23 
Total lease liabilities$150,063 $167,399 

(1)     As noted above, during the nine months ended June 30, 2022, our right-of-use assets and operating lease liability decreased due to the purchase of the Lisle Campus and the settlement of the existing lease.
(2)     Finance lease assets are recorded net of accumulated amortization of $0.2 million and $0.1 million as of June 30, 2022 and September 30, 2021, respectively.

Lease Term and Discount RateJune 30, 2022September 30, 2021
Weighted-average remaining lease term (in years):
   Operating leases9.159.37
   Finance leases0.571.32
Weighted average discount rate:
   Operating leases3.92 %4.31 %
   Finance leases3.08 %3.08 %

Nine Months Ended June 30,
Supplemental Disclosure of Cash Flow Information and Other Information20222021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$9,174 $13,546 
Financing cash flows from finance leases55 96 
Non-cash activity related to lease liabilities:
   Lease assets obtained in exchange for new operating lease liabilities (1)
$7,899 $14,789 
(1) Excludes the operating leases recorded for the MIAT acquisition discussed in Note 4.
Maturities of lease liabilities were as follows:
As of June 30, 2022
Years ending September 30,Operating LeasesFinance Leases
Remainder of 2022$2,214 $19 
202319,853 23 
202419,656 — 
202519,917 — 
202619,674 — 
2027 and thereafter97,238 — 
Total lease payments178,552 42 
Less: interest(28,531)— 
Present value of lease liabilities150,021 42 
Less: current lease liabilities(13,197)(42)
Long-term lease liabilities$136,824 $—