UNIVERSAL TECHNICAL INSTITUTE INCUTI
UNIVERSAL TECHNICAL INSTITUTE INC Leases Disclosure
Note 12 - Leases
As of September 30, 2025, we have facility leases at 30 of our 32 operating campuses and two non-campus locations under non-cancelable operating or finance leases. During the year ended September 30, 2025, we commenced and recorded facility leases for: the new Concorde co-branded Heartland Dental campus in Fort Myers, Florida which is expected to open in fiscal 2026; an additional building near our existing UTI Dallas, Texas campus to further expand our program offerings during 2026; the new UTI Atlanta, Georgia and UTI San Antonio, Texas campuses both of which are slated to open during fiscal 2026; and the relocation of the Concorde Denver, Colorado campus which is expected to be complete in fiscal 2026. We also renewed our existing lease at our Concorde San Diego, California campus for an additional 10 years.
Some of our leases contain escalation clauses and requirements to pay other fees associated with the leases. Our facility leases have original lease terms ranging from 5 to 20 years and expire at various dates through 2037. 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 September 30, 2025, 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 consolidated balance sheets.
The components of lease expense during the years ended September 30, 2025, 2024, and 2023 are presented below. The operating lease expense excludes expense for short-term leases not accounted for under ASC 842, which was not significant for the years ended September 30, 2025, 2024, or 2023.
| Year ended September 30, | ||||||||||||||||||||
| Lease Expense | 2025 | 2024 | 2023 | |||||||||||||||||
| Operating lease expense | $ | 32,379 | $ | 30,394 | $ | 29,450 | ||||||||||||||
| Finance lease expense: | ||||||||||||||||||||
| Amortization of leased assets | 908 | 908 | 779 | |||||||||||||||||
| Interest on lease liabilities | 256 | 311 | 296 | |||||||||||||||||
| Variable lease expense | 10,584 | 10,805 | 8,725 | |||||||||||||||||
| Sublease income | (118) | (118) | (114) | |||||||||||||||||
| Total net lease expense | $ | 44,009 | $ | 42,300 | $ | 39,136 | ||||||||||||||
Supplemental balance sheet, cash flow and other information related to our leases was as follows:
| September 30, | ||||||||||||||||||||
| Leases | Classification | 2025 | 2024 | |||||||||||||||||
| Assets: | ||||||||||||||||||||
| Operating lease assets | Right-of-use assets for operating leases | $ | 178,861 | $ | 158,778 | |||||||||||||||
| Finance lease assets | 3,028 | 3,937 | ||||||||||||||||||
| Total leased assets | $ | 181,889 | $ | 162,715 | ||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating lease liabilities | Operating lease liability, current portion | $ | 16,967 | $ | 22,210 | |||||||||||||||
| Finance lease liabilities | 1,029 | 934 | ||||||||||||||||||
| Noncurrent | ||||||||||||||||||||
| Operating lease liabilities | Operating lease liability | 174,838 | 146,831 | |||||||||||||||||
| Finance lease liabilities | 2,805 | 3,834 | ||||||||||||||||||
| Total lease liabilities | $ | 195,639 | $ | 173,809 | ||||||||||||||||
(1) The finance lease assets and liabilities as of September 30, 2025 consisted of one facility lease. Finance lease assets are recorded net of accumulated amortization of $2.6 million and $1.7 million as of September 30, 2025 and 2024, respectively.
| September 30, | ||||||||||||||
| Lease Term and Discount Rate | 2025 | 2024 | ||||||||||||
| Weighted-average remaining lease term (in years): | ||||||||||||||
| Operating leases | 7.44 | 7.14 | ||||||||||||
| Finance leases | 3.33 | 4.33 | ||||||||||||
| Weighted average discount rate: | ||||||||||||||
| Operating leases | 5.09 | % | 4.87 | % | ||||||||||
| Finance leases | 6.02 | % | 6.02 | % | ||||||||||
| Year ended September 30, | ||||||||||||||||||||
| Supplemental Disclosure of Cash Flow Information and Other Information | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
| Operating cash flows from operating leases | $ | 22,141 | $ | 22,449 | $ | 20,474 | ||||||||||||||
| Financing cash flows from finance leases | 934 | 845 | 696 | |||||||||||||||||
| Non-cash activity related to lease liabilities: | ||||||||||||||||||||
Lease assets obtained in exchange for new operating lease liabilities(1) | $ | 43,911 | $ | 3,982 | $ | 4,568 | ||||||||||||||
(1) During the twelve months ended September 30, 2025, we recorded facility leases for the new Concorde co-branded Heartland campus in Fort Myers, Florida, the new UTI Atlanta, Georgia campus, the new UTI San Antonio, Texas campus, the expansion of the UTI Dallas, Texas Campus, and the relocation of the Concorde Denver, Colorado campus. Additionally, we executed a ten year lease extension for our Concorde San Diego, California campus.
Maturities of lease liabilities were as follows:
| As of September 30, 2025 | ||||||||||||||
| Years ending September 30, | Operating Leases | Finance Leases | ||||||||||||
| 2026 | $ | 25,539 | $ | 1,226 | ||||||||||
| 2027 | 34,713 | 1,263 | ||||||||||||
| 2028 | 33,243 | 1,301 | ||||||||||||
| 2029 | 32,532 | 439 | ||||||||||||
| 2030 | 29,620 | — | ||||||||||||
| 2031 and thereafter | 79,363 | — | ||||||||||||
| Total future minimum lease payments | 235,010 | 4,229 | ||||||||||||
| Less: interest | (43,205) | (395) | ||||||||||||
| Present value of lease liabilities | 191,805 | 3,834 | ||||||||||||
| Less: current lease liabilities | (16,967) | (1,029) | ||||||||||||
| Long-term lease liabilities | $ | 174,838 | $ | 2,805 | ||||||||||
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.