Additional

Common Stock

Paid-in

Retained


Shares

Par Value

Capital

Earnings

Total

Balance at December 31, 2015

11,027,177

$
110

$
24,738

$
118,008

$
142,856

Tax shortfall associated with stock-based compensation arrangements

—

—

(51)

—

(51)

Restricted stock grants, net of forfeitures

66,781

1

(1)

—

—

Stock-based compensation

—

—

7,330

—

7,330

Net income

—

—

—

23,084

23,084

Balance at September 30, 2016

11,093,958

$
111

$
32,016

$
141,092

$
173,219

Additional

Common Stock

Paid-in

Retained

Shares

Par Value

Capital

Earnings

Total

Balance at December 31, 2016

11,093,489

$
111

$
35,453

$
152,810

$
188,374

Restricted stock grants, net of forfeitures

73,936

1

(1)

—

—

Stock-based compensation

—

—

8,569

—

8,569

Common stock dividends

—

—

—

(8,561)

(8,561)

Net income

—

—

—

27,107

27,107

Balance at September 30, 2017

11,167,425

$
112

$
44,021

$
171,356

$
215,489


	For the three months ended March 31, 2021
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares	Par Value
Balance at December 31, 2020	24,418,939	$	244	$	1,519,549	$	179,646	$	48,880	$	1,748,319
Stock-based compensation	—	—		3,868		32		—		3,900
Exercise of stock options, net	799	—		70		—		—		70
Issuance of restricted stock, net	231,467	3		(2,342)		—		—		(2,339)
Common stock dividends ($0.60 per share)	—	—		—		(14,786)		—		(14,786)
Foreign currency translation adjustment	—	—		—		—		(8,712)		(8,712)
Unrealized losses on marketable securities, net of tax	—	—		—		—		(104)		(104)
Net income	—	—		—		9,577		—		9,577
Balance at March 31, 2021	24,651,205	$	247	$	1,521,145	$	174,469	$	40,064	$	1,735,925

The Fair Value Measurement Topic, ASC 820-10 (“ASC 820-10”), establishes a framework for measuring fair value, establishes a fair value hierarchy based upon the observability of inputs used to measure fair value, and expands disclosures about fair value measurements. Assets and liabilities are classified in their entirety within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Under ASC 820-10, fair value of an investment is the price that would be received to sell an asset or to transfer a liability to an entity in an orderly transaction between market participants at the measurement date. The hierarchy gives the highest priority to assets and liabilities with readily available quoted prices in an active market and lowest priority to unobservable inputs which require a higher degree of judgment when measuring fair value, as follows:

The Company’s assets and liabilities that are subject to fair value measurement are categorized in one of the three levels above. Fair values are based on the inputs available at the measurement dates, and may rely on certain assumptions that may affect the valuation of fair value for certain assets or liabilities.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations is a supplement to and should be read in conjunction with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2021.

Cautionary Notice Regarding Forward-Looking Statements

Certain of the statements included in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as elsewhere in this Quarterly Report on Form 10-Q are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 (“Reform Act”). Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” "may," “will,” “forecast,” “outlook,” “plan,” “project,” “potential” or similar words, and include, without limitation, statements relating to future enrollment, revenues, revenues per student, earnings growth, operating expenses, capital expenditures and ~~capital expenditures.~~the ultimate effect of the COVID-19 pandemic on the Company's business and results. These statements are based on the Company’s current expectations and are subject to a number of assumptions, risks and uncertainties. In accordance with the Safe Harbor provisions of the Reform Act, the Company has identified important factors that could cause the actual results to differ materially from those expressed in or implied by such statements. The assumptions, risks and uncertainties include the pace of ~~growth of~~ student enrollment, our continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as ~~regional~~other federal laws and regulations, institutional accreditation standards and state regulatory requirements, rulemaking by the Department ~~of Education~~ and increased focus by the ~~U. S.~~U.S. Congress on for-profit education institutions, competitive factors, risks associated with the further spread of COVID-19, including the ultimate impact of COVID-19 on people and economies, the impact of regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including restrictions on business operations or social distancing requirements, risks associated with the opening of new campuses, risks associated with the offering of new educational programs and adapting to other changes, risks associated with the acquisition of existing educational institutions including our acquisition of Torrens University and associated assets in Australia and New Zealand, the risk that the benefits of our acquisition of Torrens University and associated assets in Australia and New Zealand may not be fully realized or may take longer to realize than expected, the risk that our acquisition of Torrens University and associated assets in Australia and New Zealand may not advance our business strategy and growth strategy, risks ~~relating~~related to the timing of regulatory approvals, our ability to implement our growth strategy, the risk that the combined company may experience difficulty integrating employees or operations, risks associated with the ability of our students to finance their education in a timely manner, and general economic and market conditions. You should not put undue reliance on any forward-looking statements. Further information about these and other relevant risks and uncertainties may be found in Part II, “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q, Part I, “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K and ~~its~~in the Company’s other filings with the Securities and Exchange Commission, including in Part II, “Item 1A. Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, and in this Quarterly Report on Form 10-Q.Commission. The Company undertakes no obligation to update or revise forward-looking ~~statements.~~

statements, except as required by law.

Additional Information

We maintain a website at http://~~www.strayereducation.com.~~www.strategiceducation.com. The information on our website is not incorporated by reference in this Quarterly Report on Form 10-Q, and our web address is included as an inactive textual reference only. We make available, free of charge through our website, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

Background ~~and Overview~~

~~We are~~

Strategic Education, Inc. (“SEI,” “we”, “us” or “our”) is an education services ~~holding~~ company that ~~owns~~provides access to high-quality education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills for high-demand markets. We operate primarily through our wholly-owned subsidiaries Strayer University ~~(the “University”)~~ and asCapella University, both accredited post-secondary institutions of ~~January 13, 2016,~~higher education located in the ~~New York Code~~United States, and ~~Design Academy (“NYCDA”). The~~Torrens University, is an accredited post-secondary institution of higher education ~~which offers undergraduate and graduate degree programs at physical campuses, predominantly~~ located in Australia. Our operations emphasize relationships through our Education Technology Services segment with employers to build employee education benefits programs that provide employees with access to affordable and industry relevant training, certificate, and degree programs.

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Company Response to COVID-19

The ongoing COVID-19 pandemic has caused significant volatility and disruption to the ~~eastern~~ United States and ~~online. NYCDA~~international economies. SEI took early action to protect the health and well-being of our students and employees in accordance with government mandates and informed by guidance from the Centers for Disease Control and Prevention. Specifically, we instituted a work-from-home policy for the vast majority of our workforce, closed physical campus locations, moved our on-ground courses at Strayer University online, postponed large events such as graduation ceremonies, and prohibited non-essential employee travel. As guidance has evolved, we have begun to reopen campus and office locations and permit business travel, after instituting a mandatory vaccination policy for all employees who may be required to be on-site at a Company facility or at a Company-sponsored event, subject to medical and religious accommodations (any employee receiving an accommodation is required to test at least weekly before being on-site).

We have taken measures to provide financial relief to our students and employer partners negatively affected by the COVID-19 crisis, including payment flexibility, scholarship opportunities, and other pricing relief. We expect that these measures will enable more students to continue pursuing their education during and after the COVID-19 pandemic. In the third quarter of 2020, we began implementing a restructuring plan that included both voluntary and involuntary employee terminations in an effort to reduce ongoing operating costs to align with changes in enrollment. Our restructuring efforts have also included the consolidation of underutilized facilities in response to changes in enrollment trends and as a result of our work-from-home policies.

As the pandemic has continued, we have seen sustained weakness in demand, especially in the United States, where total enrollment in our U.S. Higher Education segment declined 13% in the first quarter of 2022, compared to the same period in 2021. Enrollment in ANZ also has been impacted by the pandemic and the related closure of international borders in Australia and New Zealand.

We believe our current financial position and expected operating results, and ability to further control costs, are sufficient to support the ongoing operation of SEI in a manner that protects the health and well-being of our employees, students, and partners.

Company Overview

As of March 31, 2022, we had the following reportable segments:

U.S. Higher Education Segment

•The USHE segment provides flexible and affordable certificate and degree programs to working adults primarily through Strayer University and Capella University, including the Jack Welch Management Institute MBA, which is a unit of Strayer University. USHE also operates non-degree ~~courses in~~ web and mobile application ~~software~~ development courses through Hackbright Academy and Devmountain, which are units of Strayer University.

•Strayer University is accredited by the Middle States Commission on Higher Education and Capella University is accredited by the Higher Learning Commission, both higher education institutional accrediting agencies recognized by the Department of Education. The USHE segment provides academic offerings both online and in physical classrooms, helping working adult students develop specific competencies they can apply in their workplace.

•In the first quarter of 2022, USHE enrollment decreased 13% to 78,172 compared to 89,482 for the same period in 2021.

•Trailing 4-quarter student persistence within USHE was 86.8% in the fourth quarter of 2021 compared to 86.7% for the same period in 2020. Student persistence is calculated as the rate of students continuing from one quarter to the next, adjusted for graduates, on a trailing 4-quarter basis. Student persistence is reported one quarter in arrears. The table below summarizes USHE trailing 4-quarter student persistence for the past 8 quarters.


Q1 2020		Q2 2020		Q3 2020		Q4 2020		Q1 2021		Q2 2021		Q3 2021		Q4 2021
87.2	%	86.6	%	86.8	%	86.7	%	86.5	%	87.0	%	86.9	%	86.8	%

Education Technology Services Segment

•Our Education Technology Services segment is primarily ~~at campuses in New York City~~focused on developing and ~~Philadelphia, PA. NYCDA’s results~~maintaining relationships with employers to build employee education benefits programs that provide employees with access to affordable and industry relevant training, certificate, and degree programs. The employer relationships developed by the Education Technology Services division are an important source of ~~operations are included in our results from~~student enrollment for Strayer University and Capella University, and the ~~acquisition date.~~

Most of our revenue comes from the University, which derives approximately 96% of its revenue from tuition for educational programs, whether delivered in person at a physical campus or delivered online. The academic yearmajority of the ~~University~~revenue attributed to the Education Technology Services division is ~~divided into four quarters, which approximately coincide with~~driven by the ~~four quarters~~volume of the calendar year. Students at the University and at NYCDA make payment arrangements for the tuition for each course at the time of enrollment. Tuition revenue is recognized ratably over the course of instruction. If a student withdraws from a course prior to completion, the University refunds a portion of the tuition depending on when the withdrawal occurs. Tuition revenue is shown net of any refunds, withdrawals, corporate discounts, employee tuition discounts and scholarships. The University also derives revenue from other sources such as textbook-related income, certificate revenue, certain academic fees, licensing revenue, and other income, which are all recognized when earned.

Tuition receivable and deferred revenue for our students are recorded upon the start of the course, which for the University is the start of the academic term. Because the University’s academic quarters coincide with the calendar quarters, at the end of the fiscal quarter (and academic term), tuition receivable generally represents amounts due from students for educational services already provided and deferred revenue generally represents advance payments for academic services to be provided in the future. Based upon past experience and judgment, the University establishes an allowance for doubtful accounts with respect to accounts

enrollment

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~~receivable. Any uncollected account more than one year past due is charged against the allowance. Accounts less than one year past due are reserved according~~derived from these employer relationships. Enrollments attributed to the ~~length of time the balance has been outstanding. In establishing reserve amounts, we also consider the status of students as to whether or not they~~Education Technology Services segment are ~~currently enrolled for the next term, as well as the likelihood of recovering balances that have previously been written off,~~determined based on ~~historical experience. Bad debt expense~~a student’s employment status and the existence of a corporate partnership arrangement with SEI. All enrollments attributed to the Education Technology Services division continue to be attributed to the division until the student graduates or withdraws, even if his or her employment status changes or if the partnership contract expires.

•In the first quarter of 2022, employer affiliated enrollment as a percentage of ~~revenues~~USHE enrollment was 23.0% compared to 20.7% for the ~~third~~same period in 2021.

•Education Technology Services also supports employer partners through Workforce Edge, a platform which provides employers a full-service education benefits administration solution, and Sophia Learning, which enables lower cost education benefits programs through the use of low-cost online general education courses recommended by the American Council on Education for credit at other colleges and universities.

Australia/New Zealand Segment

•Torrens University is the only investor-funded university in Australia. Torrens University offers undergraduate, graduate, higher degree by research, and specialized degree courses primarily in five fields of study: business, design and creative technology, health, hospitality, and education. Courses are offered both online and at physical campuses. Torrens University is registered with the Tertiary Education Quality and Standards Agency (“TEQSA”), the regulator for higher education providers and universities throughout Australia, as an Australian University that is authorized to self-accredit its courses.

•Think Education is a vocational registered training organization and accredited higher education provider in Australia. Think Education delivers education at several campuses in Sydney, Melbourne, Brisbane, and Adelaide as well as through online study. Think Education and its colleges are accredited in Australia by the TEQSA and the Australian Skills Quality Authority, the regulator for vocational education and training organizations that operate in Australia.

•Media Design School is a private tertiary institution for creative and technology qualifications in New Zealand. Media Design School offers industry-endorsed courses in 3D animation and visual effects, game art, game programming, graphic and motion design, digital media artificial intelligence, and creative advertising. Media Design School is accredited in New Zealand by the New Zealand Qualifications Authority, the organization responsible for the quality assurance of non-university tertiary training providers.

•In the first quarter of ~~2016~~2022, Australia/New Zealand enrollment decreased 4% to 20,575 compared to 21,469 for the same period in 2021.

We believe we have the right operating strategies in place to provide the most direct path between learning and ~~2017 was 3.8% and 4.9%, respectively.~~

~~Below is a description of the nature of the consolidated costs included~~employment for our students. We are constantly innovating to differentiate ourselves in our ~~operating expense categories:~~

~~Instruction and educational support expenses~~ generally contain items of expense directly attributable to educational activities. This expense category includes salaries and benefits of faculty and academic administrators, as well as administrative personnel who support faculty and students. Instruction and educational support expenses also include costs of educational supplies and facilities, including rent for campus facilities, certain costs of establishing and maintaining computer laboratories and all other physical plant and occupancy costs, with the exception of costs attributable to the corporate offices. Bad debt expense incurred on delinquent student account balances is also included in instruction and educational support expenses.

~~Marketing expenses~~ ~~include the costs of advertising and production of marketing materials and related personnel costs.~~

~~Admissions advisory expenses~~ ~~include salaries, benefits and related costs of personnel engaged in admissions.~~

~~General and administration expenses~~ include salaries and benefits of management and employees engaged in accounting, human resources, legal, regulatory compliance, and other corporate functions, along with the occupancy and other related costs attributable to such functions.

~~Investment income consists primarily~~markets and drive growth by supporting student success, producing affordable degrees, optimizing our comprehensive marketing strategy, serving a broader set of ~~earnings~~our students’ professional needs, and ~~realized gains or losses on investments~~establishing new growth platforms. The talent of our faculty and ~~interest expense consists~~employees, supported by market leading technology, enable these strategies. We believe our strategy will allow us to continue to deliver high quality, affordable education, resulting in continued growth over the long-term. We will continue to invest in this strategy to strengthen the foundation and future of ~~interest incurred on~~ our ~~outstanding borrowings, unused revolving credit facility fees, and amortization of deferred financing costs.~~

business.

Critical Accounting Policies and Estimates

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates and judgments related to its allowance for ~~doubtful accounts;~~credit losses; income tax provisions; the useful lives of property and ~~equipment;~~equipment and intangible assets; redemption rates for scholarship ~~programs;~~programs and valuation of contract liabilities; fair value of ~~future contractual operating~~right-of-use lease ~~obligations~~assets for facilities that have been ~~closed;~~vacated; incremental borrowing rates; valuation of deferred tax assets, goodwill, and intangible assets; forfeiture rates and achievability of performance targets for stock-based compensation plans; and accrued expenses. Management bases its estimates and judgments on historical experience and various other factors and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates and judgments for reasonableness and may modify them in the future. Actual results may differ from these estimates under different assumptions or conditions.

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Management believes that the following critical accounting policies are its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue recognition — Like many traditional institutions, ~~the~~Strayer University ~~offers its~~and Capella University offer educational programs primarily on a quarter system having four academic terms, which generally coincide with our quarterly financial reporting periods. ~~NYCDA’s revenues are recognized as services are provided, generally ratably over~~Torrens University offers the ~~length~~majority of its education programs on a ~~course.~~trimester system having three primary academic terms, which all occur within the calendar year. Approximately 96% of ~~the University’s~~our revenues during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 consisted of tuition revenue. Capella University offers monthly start options for new students, who then transition to a quarterly schedule. Capella University also offers its FlexPath program, which allows students to determine their 12-week billing session schedule after they complete their first course. Tuition revenue for all students is recognized ratably over the course of instruction as the ~~University provides~~universities provide academic services, ~~in a given term,~~ whether delivered in person at a physical campus or online. Tuition revenue is shown net of any refunds, withdrawals, corporate discounts, scholarships, and employee tuition discounts. The ~~University~~universities also ~~derives~~derive revenue from other sources such as textbook-related income, certificate revenue, certain academic fees, licensing revenue, accommodation revenue, food and beverage fees, and other income, which are all recognized when earned. In accordance with ASC 606, materials provided to students in connection with their enrollment in a course are recognized as revenue when control of those materials transfers to the student. At the start of each academic term or program, a contract liability ~~(deferred revenue)~~ is recorded for academic services to be provided, and a tuition receivable is recorded for

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the portion of the tuition not paid in advance. Any cash received prior to the start of an academic term or program is recorded as ~~deferred revenue.~~

a contract liability.

Students ~~of the~~at Strayer University and Capella University finance their education in a variety of ways, and historically about ~~three quarters~~75% of our students have participated in one or more financial aid ~~programs~~program provided through Title IV of the Higher Education Act. In addition, many of our working adult students finance their own education or receive full or partial tuition reimbursement from their employers. Those students who are veterans or active duty military personnel have access to various additional government-funded educational benefit programs.

In Australia, domestic students attending an ANZ institution finance their education themselves or by taking a loan through the government’s Higher Education Loan Program or Vocational Student Loan Program. In New Zealand, domestic students may utilize government loans to fund tuition, and in addition may be eligible for a period of “fees free” study funded by the government. International students attending an ANZ institution are not eligible for funding from the Australian or New Zealand government.

A typical class is offered in weekly increments over a ~~ten-week~~six- to twelve-week period, depending on the university and course type, and is followed by an exam. ~~Students who withdraw from a course may be eligible for a refund of tuition charges based on the timing of the withdrawal. We use the student’s last date of attendance for this purpose.~~ Student attendance is based on physical presence in class for on-ground classes. For online classes, attendance consists of logging into one’s course shell and performing an academically-related activity (e.g., engaging in a discussion post or taking a quiz).

If a student withdraws from a course prior to completion, a portion of the tuition may be refundable depending on when the withdrawal occurs. We use the student’s withdrawal date or last date of attendance for this purpose. Our specific refund policies vary across the universities and non-degree programs. For students attending Strayer University, our refund policy typically permits students who complete less than half of a course to receive a partial refund of tuition for that course. For students attending Capella University, our refund policy varies based on course format. GuidedPath students are allowed a 100% refund through the first five days of the course, a 75% refund from six to twelve days, and 0% refund for the remainder of the period. FlexPath students receive a 100% refund through the 12th calendar day of the course for their first billing session only and a 0% refund after that date and for all subsequent billing sessions. For domestic students attending an ANZ institution, refunds are typically provided to students that withdraw within the first 20% of a course term. For international students attending an ANZ institution, refunds are provided to students that withdraw prior to the course commencement date. In limited circumstances refunds to student attending an ANZ institution may be granted after these cut-offs subject to an application for special consideration by the student and approval of that application by the institution. Refunds reduce the tuition revenue that otherwise would have ~~otherwise~~ been recognized for that student. Since the ~~University’s~~ academic terms coincide with our financial reporting periods for most programs, nearly all refunds are processed and recorded in the same quarter as the corresponding revenue. For certain programs where courses may overlap a quarter-end date, we estimate a refund or withdrawal rate and do not recognize the related revenue until the uncertainty related to the refund is resolved. The ~~amount~~portion of tuition revenue refundable to students may vary based on the student’s state of residence.

For undergraduate students who withdraw from all their courses during the quarter of instruction, we reassess collectibility of tuition and fees for revenue recognition purposes. In addition, we cease revenue recognition when a student fully withdraws from all of his or her courses in the academic term. Tuition charges billed in accordance with our billing schedule may be greater than the pro rata revenue amount, but the additional amounts are not recognized as revenue unless they are collected in cash.

~~For~~U.S. students who receive funding under Title IV and withdraw, funds are subject to return provisions as defined by the Department of Education. The ~~University~~university is responsible for returning Title IV funds to the Department ~~of Education~~ and then may seek payment from the withdrawn student of prorated tuition or other amounts charged to him or her. Loss of financial aid eligibility during an academic term is rare and would normally coincide with the student’s withdrawal from the institution. ~~As discussed above, we cease revenue recognition upon~~In Australia and New Zealand, government funding for eligible students is provided directly to the institution on an estimated basis annually. The

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amount of government funding provided is based on a ~~student’s withdrawal~~course-by-course forecast of enrollments that the institution submits for the upcoming calendar year. Using the enrollment forecast provided as well as the requesting institution's historical enrollment trends, the government approves a fixed amount, which is then funded to the institution evenly on a monthly basis. Periodic reconciliation and true-ups are undertaken between the relevant government authority and the institution based on actual eligible enrollments, which may result in a net amount being due to or from ~~all of his or her classes in an academic term.~~

~~New students~~the government.

Students at Strayer University registering in credit-bearing courses in any undergraduate program ~~for~~beginning in the summer 2013 term or graduate program beginning in the summer 2020 term (fiscal third quarter), and subsequent terms qualify for the Graduation Fund, whereby qualifying students earn tuition credits that are redeemable in the final year of a student’s course of study if he or she successfully remains in the program. Students must meet all of ~~the~~Strayer University’s admission requirements and not be eligible for any previously offered scholarship program. Our employees and their dependents are not eligible for the program. To maintain eligibility, students must be enrolled in a bachelor’s or master's degree program. Students who have more than one consecutive term of non-attendance lose any Graduation Fund credits earned to date, but may earn and accumulate new credits if the student is reinstated or readmitted by ~~the~~Strayer University in the future. In response to the COVID-19 pandemic, Strayer University temporarily allowed students to miss three consecutive terms without losing their Graduation Fund credits. In their final academic year, qualifying students will receive one free course for every three courses that ~~were~~the student successfully ~~completed. Revenue and the value of the benefit earned by students participating~~completed in prior years. Strayer University's performance obligation associated with free courses that may be redeemed in the ~~Graduation Fund~~future is ~~recognized~~valued based on a systematic and rational allocation of the cost of honoring the benefit earned to each of the underlying revenue transactions that result in progress by the student toward earning the benefit. The estimated value of awards under the Graduation Fund that will be recognized in the future is based on historical experience of students’ persistence in completing their course of study and earning a ~~degree.~~degree and the tuition rate in effect at the time it was associated with the transaction. Estimated redemption rates of eligible students vary based on their term of enrollment. As of ~~September 30, 2017,~~March 31, 2022, we had deferred ~~$34.4~~$51.2 million for estimated redemptions earned under the Graduation Fund, as compared to ~~$29.5~~$52.0 million at December 31, ~~2016.~~2021. Each quarter, we assess our ~~methodologies and~~ assumptions underlying our estimates for persistence and estimated redemptions based on actual experience. To date, any adjustments to our estimates have not been material. However, if actual persistence or redemption rates change, adjustments to the reserve may be necessary and could be material.

Tuition receivable — We record estimates for our allowance for ~~doubtful accounts for~~credit losses related to tuition receivable from students primarily based on our historical collection rates by age of receivable and adjusted for reasonable expectations of future collection performance, net of ~~recoveries, and consideration of other relevant factors.~~recoveries. Our experience is that payment of outstanding balances is influenced by whether the student returns to the institution, as we require students to make payment arrangements for their outstanding balances prior to enrollment. Therefore, we monitor outstanding tuition receivable balances through subsequent terms, increasing the reserve on such balances over time as the likelihood of returning to the institution diminishes and our historical experience indicates collection is less likely. We periodically assess our

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methodologies for estimating ~~bad debts~~credit losses in consideration of actual experience. If the financial condition of our students were to deteriorate based on current or expected future events resulting in evidence of impairment of their ability to make required payments for tuition payable to us, additional allowances or write-offs may be required. For the ~~third~~first quarter of ~~2017,~~2022, our bad debt expense was ~~4.9%~~2.8% of revenue, compared to ~~3.8%~~3.7% for the same period in ~~2016.~~2021. A change in our allowance for ~~doubtful accounts~~credit losses of 1% of gross tuition receivable as of ~~September 30, 2017~~March 31, 2022 would have changed our income from operations by approximately ~~$0.4~~$1.1 million.

~~Accrued lease~~

Goodwill and intangible assets — Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Indefinite-lived intangible assets, which include trade names, are recorded at fair market value on their acquisition date. At the time of acquisition, goodwill and indefinite-lived intangible assets are allocated to reporting units. Management identifies its reporting units by assessing whether the components of its operating segments constitute businesses for which discrete financial information is available and management regularly reviews the operating results of those components. Goodwill and indefinite-lived intangible assets are assessed at least annually for impairment. No events or circumstances occurred in the three months ended March 31, 2022 to indicate an impairment to goodwill or indefinite-lived intangible assets. Accordingly, no impairment charges related ~~costs~~ ~~— We estimate potential sublease income and vacancy periods for space that is not in use, adjusting our estimates when circumstances change. If our estimates change~~to goodwill or ~~if we enter into subleases at rates~~indefinite-lived intangible assets were recorded during the three month period ended March 31, 2022.

Finite-lived intangible assets that are ~~substantially different than~~acquired in business combinations are recorded at fair value on their acquisition dates and are amortized on a straight-line basis over the estimated useful life of the asset. Finite-lived intangible assets consist of student relationships. We review our ~~current estimates, we will adjust our liability~~finite-lived intangible assets for ~~lease and~~impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. No impairment charges related ~~costs. During~~to finite-lived intangible assets were recorded during the ~~nine months~~three month period ended ~~September 30, 2017 and 2016, we reduced our liability for leases by approximately $0.3 million and $2.0 million, respectively.~~

March 31, 2022.

Other estimates — We record estimates for ~~contingent consideration,~~ certain of our accrued expenses and for income tax liabilities. We estimate the useful lives of our property and equipment ~~assess goodwill~~ and intangible assets ~~for impairment,~~ and periodically review our assumed forfeiture rates and ability to

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achieve performance targets for stock-based awards and adjust them as necessary. Should actual results differ from our estimates, revisions to our ~~contingent consideration,~~ accrued expenses, carrying amount of goodwill and intangible assets, stock-based compensation expense, and income tax liabilities may be required.

Results of Operations

In the ~~third~~first quarter of ~~2017,~~2022, we generated ~~$108.5~~$258.9 million in revenue ~~a 6% increase~~ compared to ~~2016, principally~~$290.3 million in 2021. Our income from operations was $13.4 million for the first quarter of 2022 compared to $12.0 million in 2021, primarily due to ~~a 7% increase in total enrollment~~lower restructuring costs and amortization expense of intangible assets, partially offset by a 1% decline in revenue per student. Income from operations was $8.2 million for the third quarter of 2017. During the third quarter of 2017, we recorded approximately $2.1 million in net benefits related to a reductionlower earnings in the value of contingent consideration payable under the NYCDA acquisition, partially offset by nonrecurring personnel costs associated with a one-time staff reduction program. Income from operations for the third quarter of 2016 was $4.8 million, which includes a $0.2 million noncash benefit to reduce our liability for leases on facilities no longer in use.USHE segment. Net income in the ~~third~~first quarter of ~~2017~~2022 was ~~$6.2~~$7.0 million ~~including approximately $2.4 million in after-tax benefits from the nonrecurring adjustments described above,~~ compared to ~~$2.9~~$9.6 million for the same period in ~~2016, which reflected approximately $0.1 million in after-tax benefits from the nonrecurring adjustments described above.~~2021. Diluted earnings per share was ~~$0.56~~$0.29 compared to ~~$0.27~~$0.40 for the same period in ~~2016.~~2021.

In the accompanying analysis of financial information for 2022 and 2021, we use certain financial measures including Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted ~~earnings~~Earnings per ~~share~~Share that are not required by or prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These measures, which are considered “non-GAAP financial measures” under SEC rules, are defined by us to exclude the following:

•purchase accounting adjustments to record acquired contract liabilities at fair value as a result of our acquisition of Torrens University and associated assets in Australia and New Zealand and to record amortization and depreciation expense related to intangible assets and software assets acquired through our merger with Capella Education Company and our acquisition of Torrens University and associated assets in Australia and New Zealand;

•transaction and integration expenses associated with our merger with Capella Education Company and our acquisition of Torrens University and associated assets in Australia and New Zealand;

•severance costs and right-of-use lease asset impairment charges associated with our restructuring;

•income/loss from partnership and other investments that are not part of our core operations;

•discrete tax adjustments related to stock-based compensation and other adjustments; and

To illustrate currency impacts to operating results, Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted Earnings per Share for the ~~third quarter~~three months ended March 31, 2022 are also presented on a constant currency basis utilizing an exchange rate of ~~2017 and 2016~~0.7728 Australian Dollars to U.S. Dollars, which was ~~$0.34 and $0.25 per share, respectively, after~~ the ~~nonrecurring adjustments~~

~~Key enrollment trends by quarter~~average exchange rate for the ~~University were~~same period in 2021.

When considered together with GAAP financial results, we believe these measures provide management and investors with an additional understanding of our business and operating results, including underlying trends associated with our ongoing operations.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures may be considered in addition to, but not as ~~follows:~~

~~Enrollment~~

~~% Change vs Prior Year~~

~~Table~~a substitute for or superior to, GAAP results. A reconciliation of ~~Contents~~

~~Since 2013, we have introduced a number of initiatives in response~~these measures to the ~~variability in our enrollment. Recognizing that affordability~~most directly comparable GAAP measures is ~~an important factor in a prospective student’s decision~~provided below.

Adjusted results for 2021 exclude foreign currency exchange impacts and are therefore not directly comparable to seek a college degree, we reduced the University undergraduate tuition for new students by 20% beginning in our 2014 winter academic term. We also introduced the Graduation Fund in mid-2013, whereby qualifying students can receive one free course for every three courses successfully completed. The free courses are redeemable in the student’s final academic year. In 2015, we launched Strayer@Work, which works with Fortune 1000 companies to structure customized education and training programs for their employees, often with significant discounts to our published tuition rates. In January 2016, we acquired NYCDA, which charges variable tuition by program based on the number of hours of instruction. These initiatives had a net negative impact on revenue per student, which declined 1% in 2016, and is expected to decrease slightly in 2017, by approximately 2%.

~~Three Months Ended September 30, 2017 Compared to Three Months Ended September 30, 2016~~

~~Enrollment. Total enrollments at the University~~adjusted results previously reported for the ~~summer term 2017 increased to 41,679 students,~~three months ended March 31, 2021. Adjusted income from ~~38,813 for the summer term 2016. New student enrollments increased by 7%, and continuing student enrollments increased by 8%.~~

~~Revenues. Revenues increased 6% to $108.5~~operations was $19.4 million in the third quarter of 2017 from $102.2 million in the third quarter of 2016, principally due to total enrollment growth of 7%, partially offset by a decline in revenue per student of 1%. The decline in revenue per student is largely attributable to a new pricing structure which was implemented for the first quarter of ~~2014 which reduced tuition~~2022 compared to $52.9 million in 2021. Adjusted net income was $13.1 million in the first quarter of 2022 compared to $37.0 million in 2021, and adjusted diluted earnings per share was $0.54 in the first quarter of 2022 compared to $1.53 in 2021.

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The tables below reconcile our reported results of operations to adjusted results (amounts in thousands, except per share data):

Reconciliation of Reported to Adjusted Results of Operations for ~~new undergraduate students by approximately 20%, and gave eligible students access to the Graduation Fund. Revenues for undergraduate students increased 11% in~~ the three months ended ~~September 30, 2017, driven by~~March 31, 2021


			Non-GAAP Adjustments
	As Reported (GAAP)		Purchase accounting adjustments(1)		Merger and integration costs(2)		Restructuring costs(3)		Income from other investments(4)		Tax adjustments(5)		As Adjusted (Non-GAAP)
Revenues	$	290,336	$	2,223	$	—	$	—	$	—	$	—	$	292,559
Total costs and expenses	$	278,336	$	(19,407)	$	(1,012)	$	(18,267)	$	—	$	—	$	239,650
Income from operations	$	12,000	$	21,630	$	1,012	$	18,267	$	—	$	—	$	52,909
Operating margin	4.1%												18.1%
Income before income taxes	$	14,167	$	21,630	$	1,012	$	18,267	$	(2,783)	$	—	$	52,293
Net income	$	9,577	$	21,630	$	1,012	$	18,267	$	(2,783)	$	(10,688)	$	37,015

Diluted earnings per share	$	0.40											$	1.53
Weighted average diluted shares outstanding	24,153												24,153

Reconciliation of Reported to Adjusted Results of Operations for the three months ended March 31, 2022


			Non-GAAP Adjustments
	As Reported (GAAP)		Purchase accounting adjustments(1)		Merger and integration costs(2)		Restructuring costs(3)		Loss from other investments(4)		Tax adjustments(5)		As Adjusted (Non-GAAP)
Revenues	$	258,855	$	—	$	—	$	—	$	—	$	—	$	258,855
Total costs and expenses	$	245,414	$	(3,738)	$	(410)	$	(1,858)	$	—	$	—	$	239,408
Income from operations	$	13,441	$	3,738	$	410	$	1,858	$	—	$	—	$	19,447
Operating margin	5.2%												7.5%
Income before income taxes	$	12,270	$	3,738	$	410	$	1,858	$	387	$	—	$	18,663
Net income	$	7,029	$	3,738	$	410	$	1,858	$	387	$	(358)	$	13,064

Diluted earnings per share	$	0.29											$	0.54
Weighted average diluted shares outstanding	24,114												24,114

__________________________________________________________________________________________

(1)Reflects a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company's acquisition of Torrens University and associated assets in Australia and New Zealand, and amortization and depreciation expense of intangible assets and software assets acquired through the Company’s merger with Capella Education Company and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand.

(2)Reflects transaction and integration expenses associated with the Company's merger with Capella Education Company, including premerger litigation settlement, and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand.

(3)Reflects severance costs and right-of-use lease asset impairment charges associated with the Company's restructuring.

(4)Reflects income/loss recognized from the Company's investments in partnership interests and other investments.

(5)Reflects tax impacts of the adjustments described above and discrete tax adjustments related to stock-based compensation and other adjustments, utilizing an ~~increase~~adjusted effective tax rate of 30.0% and 29.2% for the three months ended March 31, 2022 and 2021, respectively.

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The table below presents our adjusted results of operations on a constant currency basis for the three months ended March 31, 2022 (amounts in ~~total undergraduate enrollment~~thousands, except per share data):


	As Adjusted (Non-GAAP)		Constant currency adjustment(1)		As Adjusted with Constant Currency (Non-GAAP)
Revenues	$	258,855	$	2,886	$	261,741
Total costs and expenses	$	239,408	$	3,150	$	242,558
Income from operations	$	19,447	$	(264)	$	19,183
Operating margin	7.5%				7.3%
Income before income taxes	$	18,663	$	(268)	$	18,395
Net income	$	13,064	$	(210)	$	12,854

Diluted earnings per share	$	0.54			$	0.53
Weighted average diluted shares outstanding	24,114				24,114

(1)Reflects an adjustment to translate foreign currency results for the three months ended March 31, 2022 at a constant exchange rate of ~~13%, partially offset by a decline~~0.7728 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2021.

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Revenues. Consolidated revenue ~~per student of 2%. We expect this decline in revenue per student~~decreased to ~~continue at the undergraduate level as we enroll more new undergraduate students. For graduate students, revenues decreased 5% in 2017, driven by a decline in total graduate enrollment of 6%.~~

~~Instruction and educational support expenses.~~ ~~Instruction and educational support expenses increased $0.7~~$258.9 million, compared to ~~$57.0~~$290.3 million in the ~~third quarter~~same period in the prior year, primarily due to declines in enrollment. In the USHE segment for the three months ended March 31, 2022, total enrollment decreased 13% to 78,172 from 89,482 for the same period in 2021. USHE segment revenue decreased 13.6% to $195.8 million compared to $226.5 million in 2021 primarily as a result of ~~2017~~declines in enrollment. Near term revenue in the USHE segment is expected to continue to be impacted negatively by the ongoing COVID-19 pandemic with weaker demand for enrollments. In the Australia/New Zealand segment for the three months ended March 31, 2022, total enrollment decreased 4% to 20,575 from ~~$56.3~~21,469 for the same period in 2021. Australia/New Zealand segment revenue decreased 5.4% to $48.5 million compared to $51.3 million in 2021 as a result of declines in enrollment and revenue-per-student. In the Education Technology Services segment, revenue for the three months ended March 31, 2022 increased 16.4% to $14.6 million compared to $12.5 million in 2021 as a result of growth in Sophia Learning and higher employer affiliated enrollment.

Instructional and support costs. Consolidated instructional and support costs decreased to $144.6 million, compared to $152.8 million in the ~~third quarter of 2016,~~same period in the prior year, principally due to ~~increases in~~lower facility costs and bad debt ~~expense~~expense. Consolidated instructional and ~~nonrecurring personnel~~support costs associated with a one-time staff reduction program, offset by a noncash adjustment to reduce the value of contingent consideration related to our acquisition of NYCDA. Instruction and educational support expenses as a percentage of revenues ~~decreased~~increased to ~~52.5%~~55.9% in the ~~third~~first quarter of ~~2017~~2022 from ~~55.1%~~52.6% in the ~~third~~first quarter of ~~2016.~~

~~Marketing~~2021.

General and administration expenses. ~~Marketing~~Consolidated general and administration expenses increased ~~$1.4 million, or 6%,~~ to ~~$26.8~~$94.8 million in the ~~third~~first quarter of ~~2017 from $25.4~~2022 compared to $86.8 million in the ~~third quarter of 2016,~~prior year, principally due to increased investments in branding ~~initiatives. Marketing expenses as a percentage of revenues decreased to 24.7% in 2017 from 24.9% in 2016.~~

~~Admissions advisory expenses~~. Admissions advisory expenses increased $0.6 million, or 13%, to $5.3 million in the third quarter of 2017 from $4.7 million in the third quarter of 2016 due primarily to increased personnel costs. Admissions advisory expenses as a percentage of revenues increased to 4.9% in the third quarter of 2017 from 4.6% in the third quarter of 2016.

~~General~~initiatives and ~~administration expenses~~. General and administration expenses increased $0.2 million to $11.2 million in the third quarter of 2017 from $11.0 million in the third quarter of 2016, related primarily to increased personnel and corporate compliance costs. General and administration expenses as a percentage of revenues decreased to 10.3% in the third quarter of 2017 from 10.7% in the third quarter of 2016.

~~Income from operations. Income from operations increased $3.4 million, or 70%, to $8.2 million in the third quarter of 2017 from $4.8 million in the third quarter of 2016.~~

~~Investment income and interest expense~~. Investment income increased to $0.3 million in the third quarter of 2017 compared to $0.1 million in the third quarter of 2016 as a result of higher yields and an increase in our cash balances. Interest expense was $0.2 million in the third quarter of both 2017 and 2016. We have $150.0 million available under our revolving credit facility and no borrowings outstanding as of September 30, 2017.

~~Provision for income taxes~~. Income tax expense was $2.1 million in the third quarter of 2017, compared to $1.9 million in the third quarter of 2016. Our effective tax rate for the quarter was 25.6% and was favorably impacted by the reduction in the value of contingent consideration related to the NYCDA acquisition, which is not subject to income tax. We expect our effective tax rate, including the effect of tax benefits associatedpartnerships with ~~the vesting of restricted stock and the impacts of the contingent consideration adjustments referenced above, to be approximately 34.0% for 2017.~~

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~~Net income. Net income increased $3.3 million to $6.2 million in the third quarter of 2017 from $2.9 million in the third quarter of 2016 due to the factors discussed above.~~

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Enrollment. Average enrollments at the University increased 6% to 42,826 students for the nine months ended September 30, 2017 compared to 40,238 students for the same period in 2016.~~

~~Revenues~~. Revenues increased 4% to $336.1 million in the nine months ended September 30, 2017 from $321.8 million in the nine months ended September 30, 2016, principally due to total enrollment growth of 6%, partially offset by a decline in revenue per student of 2%. The decline in revenue per student is largely attributable to a new pricing structure which was implemented for the first quarter of 2014 which reduced tuition for new undergraduate students by approximately 20%, and gave eligible students access to the Graduation Fund. Revenues for undergraduate students increased 10% in the nine months ended September 30, 2017, driven by an increase in total undergraduate enrollment of 13%, partially offset by a decline in revenue per student of 3%. We expect this decline in revenue per student to continue at the undergraduate level as we enroll more new undergraduate students. For graduate students, revenues decreased 7% in 2017, driven by a decline in total graduate enrollment of 8%, partially offset by an increase in revenue per student of 1%. The increase in graduate revenue per student was due primarily to increased average tuition per class compared to 2016.

~~Instruction and educational support expenses.~~ Instruction and educational support expenses increased $3.9 million, or 2%, to $180.1 million in the nine months ended September 30, 2017 from $176.2 million in the nine months ended September 30, 2016. The increase primarily resulted from increases in personnel costs associated with a one-time staff reduction program and increased bad debt expense, offset by adjustments to reduce the value of contingent consideration related to our acquisition of NYCDA. Instruction and educational support expenses as a percentage of revenues decreased to 53.6% in the nine months ended September 30, 2017 from 54.7% in the nine months ended September 30, 2016.

~~Marketing expenses~~. Marketing expenses increased $3.3 million, or 5%, to $64.7 million in the nine months ended September 30, 2017 from $61.4 million in the nine months ended September 30, 2016, principally due to increased investments in branding initiatives. Marketing expenses as a percentage of revenues increased to 19.3% in the nine months ended September 30, 2017 from 19.1% in the nine months ended September 30, 2016.

~~Admissions advisory expenses~~. Admissions advisory expenses increased $1.6 million, or 12%, to $14.8 million in the nine months ended September 30, 2017 from $13.2 million in the nine months ended September 30, 2016, primarily due to increased personnel costs. Admissions advisory expenses as a percentage of revenues increased to 4.4% in the nine months ended September 30, 2017 from 4.1% in the nine months ended September 30, 2016.

~~General and administration expenses~~. General and administration expenses increased $2.8 million to $36.0 million in the nine months ended September 30, 2017 from $33.2 million in the nine months ended September 30, 2016. During the nine months ended September 30, 2016, we recorded a $2.0 million noncash benefit associated with adjustments to our reserve for leases on facilities no longer in use. Generalbrand ambassadors. Consolidated general and administration expenses as a percentage of revenues increased to ~~10.7%~~36.6% in the ~~nine months ended September 30, 2017~~first quarter of 2022 from ~~10.3%~~29.9% in the ~~nine months ended September 30, 2016.~~

first quarter of 2021.

Amortization of intangible assets. Amortization of intangible assets decreased to $3.7 million in the first quarter of 2022 compared to $19.4 million in 2021, due to the finite-lived intangible assets acquired through the merger with Capella Education Company being fully amortized as of the third quarter of 2021.

Merger and integration costs. Merger and integration costs decreased to $0.4 million in the first quarter of 2022 compared to $1.0 million for the same period in 2021, as a result of lower integration expenses associated with the acquisition of ANZ.

Restructuring costs. Restructuring costs decreased to $1.9 million in the first quarter of 2022 compared to $18.3 million in 2021, primarily due to $16.4 million of right-of-use lease asset and fixed asset impairment charges associated with vacating leased space in the first quarter of 2021.

Income from operations. ~~Income~~Consolidated income from operations increased ~~$2.7 million, or 7%,~~ to ~~$40.5~~$13.4 million in the ~~nine months ended September 30, 2017 from $37.8~~first quarter of 2022 compared to $12.0 million in the ~~nine months ended September 30, 2016.~~

~~Investment~~first quarter of 2021, principally due to lower restructuring costs and amortization expense of intangible assets, partially offset by lower earnings in the USHE segment. USHE segment income from operations decreased 67.6% to $15.5 million in the first quarter of 2022, compared to $47.8 million in the first quarter of 2021, primarily due to lower enrollments and ~~interest expense.~~ ~~Investment income~~ increased toinvestments in marketing initiatives. In the Australia/New Zealand segment, loss from operations was $0.7 million in the ~~nine~~first quarter of 2022, compared to a $2.9 million loss in the first quarter of 2021, primarily driven by a $2.2 million purchase

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accounting reduction in 2021 related to contract liabilities acquired in the acquisition. In the Education Technology Services segment, income from operations for the three months ended ~~September 30, 2017~~March 31, 2022 decreased 19.9% to $4.7 million compared to ~~$0.3~~$5.9 million in ~~the nine months ended September 30, 2016,~~2021 as a result of ~~higher yields~~increased investment in outreach to corporate partners, partially offset by growth in Sophia Learning and an increase in employer affiliated enrollment.

Other income (expense). Other income (expense) decreased to $1.2 million of expense in the first quarter of 2022 compared to $2.2 million of income in the first quarter of 2021, as a result of a decrease in investment income from our ~~cash balances. Interest~~limited partnership investments. We incurred $0.9 million of interest expense ~~was $0.5 million~~ in ~~both of~~ the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016. We have $150.0 million available under our revolving credit facility and no borrowings outstanding as of September 30, 2017.~~

2021.

Provision for income taxes.Income tax expense ~~decreased to $13.7~~was $5.2 million in the ~~nine months ended September 30, 2017 from $14.6~~first quarter of 2022, compared to $4.6 million in the ~~nine months ended September 30, 2016. This decrease reflects a tax surplus recorded in the current year associated with the vesting~~first quarter of ~~certain shares of restricted stock. In addition, we recognized tax benefits resulting from the reduction in the value of contingent consideration related to the NYCDA acquisition. We expect our~~2021. Our effective tax rate ~~including~~for the ~~effect of tax benefits associated with the vesting of restricted stock and the impacts of the contingent consideration adjustments referenced above, to be approximately 34.0% for 2017~~quarter was 42.7%, compared to ~~39.3%~~32.4% for the same period in ~~2016.~~

2021. The

increase in the effective tax rate in 2022 was primarily due to a $1.3 million tax shortfall recognized through share-based payment arrangements.

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Net income. Net income ~~increased $4.0 million~~decreased to ~~$27.1~~$7.0 million in the ~~nine months ended September 30, 2017 from $23.1~~first quarter of 2022 compared to $9.6 million in the ~~nine months ended September 30, 2016~~first quarter of 2021 due to the factors discussed above.

Liquidity and Capital Resources

At ~~September 30, 2017,~~March 31, 2022, we had cash, ~~and~~ cash equivalents, and marketable securities of ~~$150.5~~$321.5 million compared to ~~$129.2~~$298.8 million at December 31, ~~2016~~2021 and ~~$120.5~~$274.0 million at ~~September 30, 2016.~~March 31, 2021. At ~~September 30, 2017,~~March 31, 2022, most of our cash was held in demand deposit accounts at high credit quality financial institutions.

We are party to a credit ~~agreement~~facility (the “Amended Credit Facility”), which provides for a ~~$150 million~~senior secured revolving credit facility ~~and~~(the “Revolving Credit Facility”) in an aggregate principal amount of up to $350 million. The Amended Credit Facility provides us with an option, subject to obtaining additional loan commitments and satisfaction of certain conditions, to increase the commitments under the Revolving Credit Facility or establish one or more incremental term loans ~~under certain conditions. The credit agreement has a maturity date~~(each, an “Incremental Facility”) in an amount up to the sum of ~~July 2, 2020. We had no borrowings outstanding under~~(x) the ~~revolving credit facility during each~~greater of (A) $300 million and (B) 100% of the ~~nine months ended September 30, 2016~~Company’s consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, and ~~2017,~~noncash charges, such as stock-based compensation) calculated on a trailing four-quarter basis and on a pro forma basis, and (y) if such Incremental Facility is incurred in connection with a permitted acquisition or other permitted investment, any amounts so long as the Company's leverage ratio (calculated on a trailing four-quarter basis) on a pro forma basis will be no greater than 1.75:1.00. In addition, the Amended Credit Facility provides for a subfacility for borrowings in certain foreign currencies in an amount equal to the U.S. dollar equivalent of ~~September 30, 2017.~~

$150 million. Borrowings under the ~~revolving credit facility~~Revolving Credit Facility bear interest at a per annum rate equal to LIBOR or a base rate, plus a margin ranging from ~~1.75%~~1.50% to ~~2.25%~~2.00%, depending on our leverage ratio. An unused commitment fee ranging from ~~0.25%~~0.20% to ~~0.35%,~~0.30% per annum, depending on our leverage ratio, accrues on unused ~~amounts under the revolving credit facility. During each of the nine months ended September 30, 2017 and 2016, we paid unused commitment fees of $0.3 million.~~amounts. We were in compliance with all applicable covenants related to the ~~credit agreement~~Amended Credit Facility as of ~~September 30, 2017.~~

March 31, 2022. As of March 31, 2022 and 2021, we had $141.7 million and $141.8 million, respectively, outstanding under our Revolving Credit Facility. During the three months ended March 31, 2022 and 2021, we paid $0.4 million and $0.7 million, respectively, of interest and unused commitment fees related to our Revolving Credit Facility.

Our net cash ~~from~~provided by operating activities for the ~~nine~~three months ended ~~September 30, 2017 increased to $44.4~~March 31, 2022 was $56.6 million, as compared to ~~$30.1~~$78.8 million for the same period in ~~2016.~~2021. The ~~increase~~decrease in net cash from operating activities was ~~largely due to~~primarily driven by lower earnings in the ~~payment of retention agreements in connection with the NYCDA acquisition in January 2016, cash provided~~USHE segment, partially offset by ~~changes in working capital, and the~~favorable timing of ~~income tax~~ payments ~~in 2017 compared to 2016.~~

of working capital.

Capital expenditures ~~were $14.6~~decreased to $9.7 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2022, compared to ~~$7.5~~$12.7 million for the same period in ~~2016.~~

2021, due to the timing of capital projects.

The Board of Directors declared ~~an annual~~a regular, quarterly cash dividend of ~~$1.00~~$0.60 per share of common ~~share, payable quarterly.~~stock in February 2022. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2022, we ~~have~~ paid a total of ~~$8.6~~$15.0 million in cash dividends on our common stock. ~~For~~During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2022, we ~~did not~~paid $4.0 million to repurchase ~~any~~common shares in the open market under our repurchase program. As of ~~common stock and, at September 30, 2017,~~March 31, 2022, we had ~~$70~~$246.0 million inof share repurchase authorization remaining to use through December 31, ~~2017.~~

2022.

For the ~~third~~first quarter of ~~2017,~~2022 and 2021, bad debt expense as a percentage of revenue was ~~4.9% compared to 3.8% for the third quarter of 2016.~~

2.8% and 3.7%, respectively.

We believe that existing cash and cash equivalents, cash generated from operating activities, and if necessary, cash borrowed under our ~~revolving credit facility,~~Amended Credit Facility will be sufficient to meet our requirements for at least the next 12 months. Currently, we maintain our cash primarily in ~~mostly~~ demand deposit bank accounts and money market funds, which isare included in cash and cash equivalents at ~~September 30, 2017~~March 31, 2022 and ~~2016.~~2021. We also hold marketable securities, which primarily include tax-exempt municipal

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securities and corporate debt securities. During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2022 and ~~2016,~~2021, we earned interest income of ~~$0.7~~$0.2 million and $0.3 million, respectively.

~~The table below sets forth our contractual commitments associated with operating leases, excluding subleases as of September 30, 2017 (in thousands):~~

Payments Due By Period




Less than 1

1-3

3-5

More than

Total

Year

Years

Years

5 Years

Operating leases

$
119,061

$
31,782

$
49,750

$
26,384

$
11,145

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are subject to the impact of interest rate changes and may be subject to changes in the market values of our future investments. We invest our excess cash in bank overnight deposits, money market funds and marketable securities. We have not used derivative financial instruments in our investment portfolio. Earnings from investments in bank overnight deposits, money market mutual funds, and marketable securities may be adversely affected in the future should interest rates decline, although such a decline may reduce the interest rate payable on any borrowings under our ~~revolving credit facility.~~Revolving Credit Facility. Our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if forced to sell securities that have declined in market value due to changes in interest rates. As of ~~September 30, 2017,~~March 31, 2022, a 1% increase or decrease in interest rates would not have a material impact on our future earnings, fair values, or cash flows related to investments in cash equivalents or interest earning marketable securities.

~~Changing interest rates could also have a negative impact on the amount of interest expense~~

At March 31, 2022, we ~~incur. On July 2, 2015, we used approximately $116~~had $141.7 million of our existing cash and cash equivalents to prepay our term loan and terminate an interest rate swap as part of an amendment to our credit and term loan agreement. The credit agreement provides for a $150 million revolving credit facility and an option to establish incremental term loans under certain conditions. The credit agreement has a maturity date of July 2, 2020. We had no borrowings outstanding under ~~the revolving credit facility after prepayment of the term loan facility, and as of September 30, 2017.~~our Amended Credit Facility. Borrowings under the ~~revolving credit facility~~Amended Credit Facility bear interest at LIBOR or a base rate, plus a margin ranging from ~~1.75%~~1.50% to ~~2.25%~~2.00%, depending on our leverage ratio. An unused commitment fee ranging from ~~0.25%~~0.20% to ~~0.35%~~0.30%, depending on our leverage ratio, accrues on unused amounts under the ~~revolving credit facility.~~Amended Credit Facility. An increase in LIBOR would affect interest expense on any outstanding balance of the ~~revolving credit facility.~~Revolving Credit Facility. For every 100 basis points increase in LIBOR, we would incur an incremental ~~$1.5~~$3.5 million in interest expense per year assuming the entire ~~$150~~$350 million ~~revolving credit facility~~Revolving Credit Facility was utilized.

In March 2021, the administrator of LIBOR announced that the publication of certain LIBOR settings would cease after December 2021 and publication of the remainder of the LIBOR settings will cease after June 2023. At March 31, 2022, we had no exposure to the discontinued LIBOR settings and had approximately $141.7 million of LIBOR-based debt outstanding on our Revolving Credit Facility. Our Revolving Credit Facility includes mechanisms for replacing the applicable reference rate, which we do not expect to be materially different from LIBOR.

Foreign Currency Risk

The United States Dollar (“USD”) is our reporting currency. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Revenues denominated in currencies other than the USD accounted for 18.7% of our consolidated revenues for the three months ended March 31, 2022. We therefore have foreign currency risk related to these currencies, which is primarily the Australian dollar. Accordingly, changes in exchange rates, and in particular a weakening of foreign currencies relative to the USD may negatively affect our revenue and operating income as expressed in the USD. For the three months ended March 31, 2022, a hypothetical 10% adverse change in the average foreign currency exchange rates would have decreased our consolidated revenues by approximately $4.9 million. In addition, the effect of exchange rate changes on cash, cash equivalents, and restricted cash for the three months ended March 31, 2022 was an increase of $2.1 million. We do not use foreign exchange contracts or derivatives to hedge any foreign currency exposures.

ITEM 4: CONTROLS AND PROCEDURES

~~Disclosure Controls and Procedures.~~ The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2017. Based upon such review, the Chief Executive Officer and Chief Financial Officer have concluded that the Company had in place, as of September 30, 2017, effective disclosure controls and procedures designed to ensure that information required to be disclosed by the Company (including consolidated subsidiaries) in the reports it files or submits under the Securities Exchange Act of 1934, as amended, and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

~~Internal Control Over Financial Reporting~~. There have not been any changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

a)Disclosure Controls and Procedures. The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2022. Based upon such review, the Chief Executive Officer and Chief Financial Officer have concluded that the Company had in place, as of March 31, 2022, effective disclosure controls and procedures designed to ensure that information required to be disclosed by the Company (including consolidated subsidiaries) in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in reports it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

b)Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

~~From time to time, we~~

We are involved in litigation and other legal proceedings arising out of the ordinary course of our business. ~~There~~From time to time, certain matters may arise that are ~~no pending~~other than ordinary and routine. The outcome of such matters is uncertain, and we may incur costs in the future to defend, settle, or otherwise resolve them. We currently believe that the ultimate outcome of such matters will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could materially affect future results of operations in a particular period. See Note 15, Litigation, in the condensed consolidated financial statements appearing in Part I, Item 1 of this report for additional information regarding our legal proceedings toand related matters, which ~~we or our property are subject.~~

information is incorporated herein by reference.

Item 1A. Risk Factors

You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016, and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017,~~2021, which could materially affect our business, adversely affect the market price of our common stock and could cause you to suffer a partial or complete loss of your investment. There have been no material changes to the risk factors previously described in Part I, “Item 1A. Risk Factors” included in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016, and in our Quarterly Reports on Form 10-Q for~~2021, other than the ~~quarters ended March 31, 2017 and June 30, 2017, except that we have updated two of the~~revised risk ~~factors to reflect recent developments occurring after the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.~~factor included below. The risks described below and in our Annual Report on Form 10-K ~~as updated by our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, and this Quarterly Report on Form 10-Q,~~ are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also could materially adversely affect our business. See “Cautionary Notice Regarding Forward-Looking Statements.”

~~The following risk factors update~~

If Strayer University and ~~supersede the risk factors~~Capella University fail to comply with the ~~same captions in our Annual Report on Form 10-K~~extensive legal and regulatory requirements for ~~the year ended December 31, 2016, as updated by our Quarterly Reports on Form 10-Q~~higher education institutions, they could face significant monetary or other liabilities and penalties, including loss of access to federal student loans and grants for ~~the quarters ended March 31, 2017~~their students.

As providers of higher education, Strayer University and ~~June 30, 2017.~~

WeCapella University are subject to ~~compliance reviews, which, if they resulted~~extensive laws and regulation on both the federal and state levels and by accrediting agencies. In particular, the Higher Education Act and related regulations subject Strayer University, Capella University, and all other higher education institutions that participate in ~~a material finding~~the various Title IV programs to significant regulatory scrutiny.

The Higher Education Act mandates specific regulatory responsibilities for each of the following components of the higher education regulatory triad: (1) the federal government through the Department of Education; (2) the accrediting agencies recognized by the Secretary of Education; and (3) state education regulatory bodies.

In addition, other federal agencies such as the Consumer Financial Protection Bureau (“CFPB”), Federal Trade Commission (“FTC”), and Federal Communications Commission and various state agencies and state attorneys general enforce consumer protection, calling and texting, marketing, privacy and data security, and other laws applicable to post-secondary educational institutions. Findings of noncompliance could ~~affect~~result in monetary damages, fines, penalties, injunctions, or restrictions or obligations that could have a material adverse effect on our ~~ability to participate in Title IV programs.~~

~~Because we operate in a highly regulated industry, we are subject to compliance reviews and claims~~business. Some of ~~noncompliance and related lawsuits by government agencies, accrediting agencies and third parties, including claims brought by third parties on behalf~~these laws also include private rights of ~~the federal government. For example,~~action.

On October 8, 2021, the Department of Education ~~regularly conducts program reviews~~announced establishment of ~~educational institutions~~an Office of Enforcement within the Department’s Office of Federal Student Aid, designed to strengthen oversight over and enforcement against postsecondary schools that participate in federal student loan, grant, and work-study programs. The Office of Enforcement restores an office first established by the Department in 2016. The Office of Enforcement will be comprised of four existing divisions: Administrative Actions and Appeals Services Group, Borrower Defense Group, Investigations Group, and Resolution and Referral Management Group. The Department intends the Office of Enforcement to coordinate with other state and federal partners, including the Department of Justice, Consumer Financial Protection Bureau, Federal Trade Commission, and state attorneys general.

On October 6, 2021 the FTC announced that it is resurrecting Penalty Offense Authority under Section 5(m) of the FTC Act (the “Act”). Under the Act, the FTC may secure penalties against entities not a party to an original proceeding if the FTC can show that the entity had actual knowledge that the conduct in question was found to be unfair or deceptive. In an effort to establish actual knowledge and create a pathway for penalties in the event of post-notice acts or practices, the FTC issued that same day an informational notice to the 70 largest for-profit schools based on enrollment and revenues. The notice included a list of acts and practices that the FTC has determined are ~~participating~~unfair or deceptive, including but not limited to acts relating to misrepresentation of employment opportunities and other benefits, together with citation to various prior determinations from cases previously litigated by the FTC. Strayer University and Capella University received the FTC’s notice on October 7, 2021, although the FTC made

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clear that receipt of the notice itself does not reflect any assessment as to whether Strayer University or Capella University has engaged in deceptive or unfair conduct.

On April 4, 2022, the Company received correspondence from the Consumer Financial Protection Bureau (“CFPB”), in which the CFPB took the position that it has supervisory authority over the Company as a covered person that offers or provides private education loans pursuant to 12 U.S.C. 5514(a)(1)(D) and further indicated the CFPB is considering whether to cite violations based on preliminary findings that the Company may have violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 U.S.C. 5301 et seq., due to alleged student loan servicing and collections practices or policies. Specifically, the CFPB referred to Capella University and Strayer University’s historical practice of withholding official transcripts from students who were delinquent in paying amounts due, a practice which both universities discontinued prior to receipt of the correspondence. While the Company disagrees with CFPB’s position as to its supervisory authority and disputes any alleged legal or regulatory violations, SEI is cooperating with CFPB’s inquiry and responded to CFPB as requested on April 25, 2022.

The laws, regulations, standards, and policies applicable to our business frequently change, and changes in, or new interpretations of, applicable laws, regulations, standards, or policies could have a material adverse effect on our accreditation, authorization to operate in various states, permissible activities, ability to communicate with prospective students, receipt of funds under Title IV programs, ~~and~~or costs of doing business. The Department of Education periodically engages in negotiated rulemaking sessions to revise regulations that govern the ~~Office~~federal Title IV student financial aid programs. As discussed in Note 16, Regulation, in the condensed consolidated financial statements appearing in Part I, Item 1 of ~~Inspector General of~~this report under “Current Negotiated Rulemaking,” the Department of Education regularly conducts audits and investigations of such institutions. The Department of Education could limit, suspend, or terminate our participation in Title IV programs, place us on a more restrictive, slower payment method for receipt of Title IV program funds, or impose other penaltieshas convened negotiated rulemaking committees to address issues such as ~~requiring us~~borrower defense to ~~make refunds, pay liabilities,~~repayment, misrepresentation, mandatory arbitration agreements, gainful employment rules, and federal government oversight into changes in ownership for institutions of higher education. Certain proposals related to these issues could raise the cost of compliance for Strayer University or ~~pay an administrative fine upon a material finding of noncompliance.~~

~~The Department of Education conducted four campus-based program reviews of~~Capella University or require changes in the educational programs offered by Strayer ~~University’s administration of Title IV programs~~University and Capella University in ~~three states and the District of Columbia,~~order to comply with ~~one on-site review conducted August 18-20, 2014; one on-site review conducted September 8-11, 2014; and two on-site reviews conducted September 22-26, 2014. On October 21, 2014,~~new rules. We cannot predict whether the Department of Education issued an Expedited Final Program Review Determination Letter for one of the program reviews conducted the week of September 22, 2014, closing the program review with no further action required by us. On November 17, 2014, we received a Program Review Report for the program review conducted in August 2014, and provided a response to the Department of Education on December 15, 2014. On January 7, 2015, we received a Final Program Review Determination letter fromwill promulgate any regulations that August 2014 review, closing the program review with no further action required by us. On March 24, 2015, the Company received a Program Review Report for another program review, and provided a response to the Department on April 21, 2015. On April 29, 2015, the Company received a Final Program Review Determination Letter closing the review and identifying a payment of less than $500 due to the Department of Education based on an underpayment on a return to would negatively affect Strayer University or Capella University.

Title IV calculation. The Company remitted payment, and received a letter from the Department on May 26, 2015, indicating that no further action was required and that the matter was closed. On September 15, 2015, the Company received a Program Review Report for the final program review, and provided a response to the Department on October 5, 2015. On January 5, 2016, the Company received a Final Program Review Determination Letter for the final program review, indicating that this program review was closed and no further action was required.

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~~If we fail to obtain recertification~~requirements are enforced by the Department of Education ~~when required, we would~~and, in some instances, by private plaintiffs. If Strayer University and Capella University are found not to be in compliance with these laws, regulations, standards, or policies, they could lose ~~our ability~~access to ~~participate in Title IV programs.~~

An institution generally must seek recertification from the Department of Education at least every six years and possibly more frequently depending on various factors, such as whether it is provisionally certified. The Department of Education may also review an institution’s continued eligibility and certification to participate in Title IV programs, or scope of eligibility and certification, in the event the institution undergoes a change in ownership resulting in a change of control or expands its activities in certain ways, such as the addition of certain types of new programs, or, in certain cases, changes to the academic credentials that it offers. In certain circumstances, the Department of Education must provisionally certify an institution. The Department of Education may withdraw our certification if it determines that we are not fulfilling material requirements for continued participation in Title IV programs. If the Department of Education does not renew, or withdraws our certification to participate in Title IV programs, our students would no longer be able to receive Title IV program funds, which would have a material adverse effect on ~~our business.~~

~~Each institution participating in Title IV programs must enter into a Program Participation Agreement with~~ the Department of Education. Under the agreement, the institution agrees to follow the Department of Education’s rules and regulations governing Title IV programs. On October 13, 2017, the Department informed the University that it was approved to participate in Title IV programs with full certification through June 30, 2021.

Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended ~~September 30, 2017, we did not~~March 31, 2022, the Company paid $4.0 million to repurchase ~~any~~ shares of common stock under ~~our~~its repurchase program. The Company's remaining authorization for ~~our~~ common stock repurchases was ~~$70.0~~$246.0 million as of ~~September 30, 2017,~~March 31, 2022, and is available for use through December 31, ~~2017.~~2022. A summary of the Company's share repurchases during the quarter is set forth below:


	Total number of shares purchased(1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs ($ mil)
Beginning Balance (at 12/31/21)					$	250.0
January	—	$	—	—	250.0
February	—	—		—	250.0
March	66,502	59.56		66,502	246.0
Total (at 03/31/22)	66,502	$	59.56	66,502	$	246.0

(1)The Company's repurchase program was announced on November 3, 2003 for repurchases up to an aggregate amount of $15 million in value of common stock through December 31, 2004. The Board of Directors amended the program on various dates increasing the amount authorized and extending the authorization date. On November 3, 2021, the Board of Directors increased the amount authorized to $250.0 million for use through December 31, 2022.

Item 3. Defaults Upon Senior Securities

None

Item 4.Mine Safety Disclosures

Not applicable

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Item 5. Other Information

~~None~~

None

~~Table of Contents~~

Item 6. Exhibits


3.1
~~3.1~~	Amended Articles of Incorporation and Articles Supplementary of the Company (incorporated by reference to Exhibit 3.01 of the Company’s Annual Report on Form 10-K (File No. 000-21039) filed with the Commission on March 28, 2002).
~~3.2~~	Amended and Restated ~~Bylaws~~Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on ~~November 4, 2010)~~August 1, 2018).
~~3.3~~ 3.2		~~First Amendment to the~~ Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit ~~3.1~~3.2 of the ~~Company’s Current~~Company's Quarterly Report on Form ~~8-K~~10-Q filed with the Commission on ~~April 17, 2017)~~July 29, 2021).
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.		INS Inline XBRL Instance Document
101.		SCH Inline XBRL Schema Document
101.		CAL Inline XBRL Calculation Linkbase Document
101.		DEF Inline XBRL Definition Linkbase Document
101.		LAB Inline XBRL Label Linkbase Document
101.		PRE XBRL Presentation Linkbase Document
104.		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			~~STRAYER~~STRATEGIC EDUCATION, INC.

			By:			/s/ Daniel W. Jackson
			Daniel W. Jackson
			Executive Vice President and Chief Financial Officer
			Date: ~~October 30, 2017~~ May 10, 2022


Maryland		52-1975978
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2303 Dulles Station Boulevard ~~Herndon, VA~~		~~20171~~
Herndon,	VA	20171
(Address of principal executive offices)		(Zip Code)



	December 31, 2016		September 30, 2017			December 31, 2021		March 31, 2022
ASSETS					ASSETS
Current assets:					Current assets:
Cash and cash equivalents	$	129,245	$	150,483	Cash and cash equivalents	$	268,918	$	293,419
Marketable securities					Marketable securities	6,501		6,785
Tuition receivable, net		20,532		20,626	Tuition receivable, net	51,277		64,798
Income taxes receivable		—		2,734	Income taxes receivable	313		—
Other current assets		10,766		12,917	Other current assets	40,777		52,846
Total current assets		160,543		186,760	Total current assets	367,786		417,848
Property and equipment, net		73,124		74,335	Property and equipment, net	150,589		152,742
Deferred income taxes		31,096		34,609
Right-of-use lease assets					Right-of-use lease assets	149,587		146,508
Marketable securities, non-current					Marketable securities, non-current	23,377		21,277
Intangible assets, net					Intangible assets, net	276,380		276,267
Goodwill		20,744		20,744	Goodwill	1,285,864		1,303,175
Other assets		13,189		12,127	Other assets	52,297		50,066
Total assets	$	298,696	$	328,575	Total assets	$	2,305,880	$	2,367,883

LIABILITIES & STOCKHOLDERS’ EQUITY					LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:					Current liabilities:
Accounts payable and accrued expenses	$	41,132	$	50,514	Accounts payable and accrued expenses	$	95,518	$	103,934
Income taxes payable		1,883		—	Income taxes payable	—		9,422
Deferred revenue		16,691		21,784
Other current liabilities		133		—
Contract liabilities					Contract liabilities	73,232		115,647
Lease liabilities					Lease liabilities	27,005		25,833
Total current liabilities		59,839		72,298	Total current liabilities	195,755		254,836
Long-term debt					Long-term debt	141,630		141,743
Deferred income tax liabilities					Deferred income tax liabilities	44,595		39,974
Lease liabilities, non-current					Lease liabilities, non-current	162,821		158,930
Other long-term liabilities		50,483		40,788	Other long-term liabilities	47,089		48,087
Total liabilities		110,322		113,086	Total liabilities	591,890		643,570

Commitments and contingencies					Commitments and contingencies	0		0
Stockholders’ equity:					Stockholders’ equity:
Common stock, par value $0.01; 20,000,000 shares authorized; 11,093,489 and 11,167,425 shares issued and outstanding at December 31, 2016 and September 30, 2017, respectively		111		112
Common stock, par value $0.01; 32,000,000 shares authorized; 24,592,098 and 24,963,542 shares issued and outstanding at December 31, 2021 and March 31, 2022, respectively					Common stock, par value $0.01; 32,000,000 shares authorized; 24,592,098 and 24,963,542 shares issued and outstanding at December 31, 2021 and March 31, 2022, respectively	246		250
Additional paid-in capital		35,453		44,021	Additional paid-in capital	1,529,969		1,528,328
Accumulated other comprehensive income					Accumulated other comprehensive income	9,203		29,185
Retained earnings		152,810		171,356	Retained earnings	174,572		166,550
Total stockholders’ equity		188,374		215,489	Total stockholders’ equity	1,713,990		1,724,313
Total liabilities and stockholders’ equity	$	298,696	$	328,575	Total liabilities and stockholders’ equity	$	2,305,880	$	2,367,883



	For the three months ended				For the nine months ended
	September 30,				September 30,					For the three months ended March 31,
	2016		2017		2016		2017			2021		2022
Revenues	$	102,156	$	108,512	$	321,809	$	336,144	Revenues	$	290,336	$	258,855
Costs and expenses:									Costs and expenses:
Instruction and educational support		56,295		56,987		176,175		180,059
Marketing		25,388		26,790		61,434		64,734
Admissions advisory		4,691		5,318		13,171		14,813
Instructional and support costs									Instructional and support costs	152,805		144,624
General and administration		10,952		11,193		33,211		36,017	General and administration	86,845		94,784
Amortization of intangible assets									Amortization of intangible assets	19,407		3,738
Merger and integration costs									Merger and integration costs	1,012		410
Restructuring costs									Restructuring costs	18,267		1,858
Total costs and expenses		97,326		100,288		283,991		295,623	Total costs and expenses	278,336		245,414
Income from operations		4,830		8,224		37,818		40,521	Income from operations	12,000		13,441
Investment income		115		303		327		737
Interest expense		161		162		481		481
Other income (expense)									Other income (expense)	2,167		(1,171)
Income before income taxes		4,784		8,365		37,664		40,777	Income before income taxes	14,167		12,270
Provision for income taxes		1,906		2,138		14,580		13,670	Provision for income taxes	4,590		5,241
Net income	$	2,878	$	6,227	$	23,084	$	27,107	Net income	$	9,577	$	7,029
Earnings per share:									Earnings per share:
Basic	$	0.27	$	0.58	$	2.18	$	2.54	Basic	$	0.40	$	0.29
Diluted	$	0.27	$	0.56	$	2.14	$	2.43	Diluted	$	0.40	$	0.29
Weighted average shares outstanding:									Weighted average shares outstanding:
Basic		10,616		10,701		10,608		10,671	Basic	23,974		23,948
Diluted		10,828		11,210		10,803		11,174	Diluted	24,153		24,114


	For the Nine Months Ended
	September 30,					For the three months ended March 31,
	2016		2017			2021		2022
Cash flows from operating activities:					Cash flows from operating activities:
Net income	$	23,084	$	27,107	Net income	$	9,577	$	7,029
Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of gain on sale of assets		(211)		(133)
Amortization of deferred rent		(919)		(1,351)
Amortization of deferred financing costs		197		197	Amortization of deferred financing costs	138		138
Amortization of investment discount/premium					Amortization of investment discount/premium	24		15
Depreciation and amortization		13,276		13,718	Depreciation and amortization	34,571		16,272
Deferred income taxes		(5,543)		(3,728)	Deferred income taxes	(8,898)		(4,955)
Stock-based compensation		7,330		8,569	Stock-based compensation	3,900		5,068
Impairment of right-of-use lease assets					Impairment of right-of-use lease assets	14,388		—
Changes in assets and liabilities:					Changes in assets and liabilities:
Tuition receivable, net		425		(454)	Tuition receivable, net	(13,417)		(12,669)
Other current assets		(3,895)		(2,151)
Other assets		(2,264)		1,200	Other assets	(9,897)		(6,374)
Accounts payable and accrued expenses		2,825		9,711	Accounts payable and accrued expenses	(10,276)		2,972
Income taxes payable and income taxes receivable		(4,854)		(4,401)	Income taxes payable and income taxes receivable	12,777		9,660
Deferred revenue		5,940		5,386
Other long-term liabilities		(5,284)		(9,298)
Contract liabilities					Contract liabilities	46,872		41,012
Other liabilities					Other liabilities	(978)		(1,573)
Net cash provided by operating activities		30,107		44,372	Net cash provided by operating activities	78,781		56,595

Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment		(7,501)		(14,573)	Purchases of property and equipment	(12,650)		(9,686)
Cash used in acquisition, net of cash acquired		(7,635)		—
Proceeds from marketable securities					Proceeds from marketable securities	1,930		1,100
Other investments					Other investments	(72)		(175)
Net cash used in investing activities		(15,136)		(14,573)	Net cash used in investing activities	(10,792)		(8,761)

Cash flows from financing activities:					Cash flows from financing activities:
Payments of contingent consideration		(1,358)		—
Common dividends paid		—		(8,561)	Common dividends paid	(14,778)		(15,018)
Net payments for stock awards					Net payments for stock awards	(2,326)		(2,849)
Repurchase of common stock					Repurchase of common stock	—		(3,961)
Net cash used in financing activities		(1,358)		(8,561)	Net cash used in financing activities	(17,104)		(21,828)
Net increase in cash and cash equivalents		13,613		21,238
Cash and cash equivalents — beginning of period		106,889		129,245
Cash and cash equivalents — end of period	$	120,502	$	150,483
Noncash transactions:
Purchases of property and equipment included in accounts payable	$	112	$	749
Effect of exchange rate changes on cash, cash equivalents, and restricted cash					Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(866)		2,097
Net increase in cash, cash equivalents, and restricted cash					Net increase in cash, cash equivalents, and restricted cash	50,019		28,103
Cash, cash equivalents, and restricted cash — beginning of period					Cash, cash equivalents, and restricted cash — beginning of period	202,020		279,212
Cash, cash equivalents, and restricted cash — end of period					Cash, cash equivalents, and restricted cash — end of period	$	252,039	$	307,315
Non-cash transactions:					Non-cash transactions:
Non-cash additions to property and equipment					Non-cash additions to property and equipment	$	7,526	$	5,111
Right-of-use lease assets obtained in exchange for operating lease liabilities					Right-of-use lease assets obtained in exchange for operating lease liabilities	$	46,147	$	418


	September 30,		September 30,
	2016		2017
Balance at beginning of period	$	20,937	$	29,499
Revenue deferred		14,753		17,494
Benefit redeemed		(9,139)		(12,551)
Balance at end of period	$	26,551	$	34,442



PART I — FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Unaudited Condensed Consolidated Balance Sheets at December 31, ~~2016~~202 1 and ~~September 30, 2017~~ March 31, 2022	3 3

		Unaudited Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 30, 2016~~March 3 1 , 202 1 and ~~2017~~202 2	4 4

		Unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 3 1 , 202 1 and 202 2	4

		Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the ~~nine~~ three months ended ~~September 30, 2016~~March 3 1 , 202 1 and ~~2017~~202 2	5 5

		Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2016~~March 3 1 , 202 1 and ~~2017~~202 2	6 6

		Notes to Unaudited Condensed Consolidated Financial Statements	7 7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29 22

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38 29

	Item 4.	Controls and Procedures	38 29

PART II — OTHER INFORMATION

	Item 1.	Legal Proceedings	39 30

	Item 1A.	Risk Factors	39 30

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40 31

	Item 3.	Defaults Upon Senior Securities	40 31

	Item 4.	Mine Safety Disclosures	40 31

	Item 5.	Other Information	41 31

	Item 6.	Exhibits	41 32

SIGNATURES			42 33

~~CERTIFICATIONS~~



				Additional
	Common Stock			Paid-in		Retained
	Shares	Par Value		Capital		Earnings		Total
Balance at December 31, 2015	11,027,177	$	110	$	24,738	$	118,008	$	142,856
Tax shortfall associated with stock-based compensation arrangements	—		—		(51)		—		(51)
Restricted stock grants, net of forfeitures	66,781		1		(1)		—		—
Stock-based compensation	—		—		7,330		—		7,330
Net income	—		—		—		23,084		23,084
Balance at September 30, 2016	11,093,958	$	111	$	32,016	$	141,092	$	173,219


				Additional
	Common Stock			Paid-in		Retained
	Shares	Par Value		Capital		Earnings		Total
Balance at December 31, 2016	11,093,489	$	111	$	35,453	$	152,810	$	188,374
Restricted stock grants, net of forfeitures	73,936		1		(1)		—		—
Stock-based compensation	—		—		8,569		—		8,569
Common stock dividends	—		—		—		(8,561)		(8,561)
Net income	—		—		—		27,107		27,107
Balance at September 30, 2017	11,167,425	$	112	$	44,021	$	171,356	$	215,489


	As of March 31,
	2021		2022
Cash and cash equivalents	$	238,290	$	293,419
Restricted cash included in other current assets	13,249		13,396
Restricted cash included in other assets	500		500
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	252,039	$	307,315


		~~Purchase~~
		~~Price~~
		~~Allocation~~	~~Useful Life~~
~~Cash~~	$	~~790~~
~~Other assets~~		~~1,265~~
~~Intangibles:~~
~~Trade name~~		~~5,660~~	~~Indefinite~~
~~Goodwill~~		~~13,944~~
~~Liabilities assumed~~		~~(4,734)~~
~~Total assets acquired and liabilities assumed, net~~		~~16,925~~
~~Less: contingent consideration~~		~~(14,500)~~
~~Less: cash acquired~~		~~(790)~~
~~Cash paid for acquisition, net of cash acquired~~	$	~~1,635~~


	CEC Integration Plan(1)		2020 Restructuring Plan		Total
Balance at December 31, 2020	$	1,835	$	1,287	$	3,122
Restructuring and other charges	—		1,190		1,190
Payments	(733)		(2,123)		(2,856)
Balance at March 31, 2021	$	1,102	$	354	$	1,456

Balance at December 31, 2021(2)	$	—	$	1,612	$	1,612
Restructuring and other charges	—		1,462		1,462
Payments	—		(2,382)		(2,382)
Balance at March 31, 2022(2)	$	—	$	692	$	692


	Amortized Cost		Gross Unrealized Gain		Gross Unrealized (Losses)		Estimated Fair Value
Tax-exempt municipal securities	$	18,572	$	31	$	(232)	$	18,371
Corporate debt securities	9,758		5		(72)		9,691
Total	$	28,330	$	36	$	(304)	$	28,062


	December 31, 2021		March 31, 2022
Due within one year	$	6,501	$	6,785
Due after one year through five years	23,377		21,277
Total	$	29,878	$	28,062


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	September 30,		Assets/Liabilities		Inputs		Inputs					Fair Value Measurements at Reporting Date Using
	2017		(Level 1)		(Level 2)		(Level 3)			March 31, 2022		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:									Assets:
Money market funds	$	15,199	$	15,199	$	—	$	—	Money market funds	$	5,346	$	5,346	$	—	$	—

Liabilities:
Deferred payments	$	4,424	$	—	$	—	$	4,424
Marketable securities:									Marketable securities:
Tax-exempt municipal securities									Tax-exempt municipal securities	18,371		—		18,371		—
Corporate debt securities									Corporate debt securities	9,691		—		9,691		—
Total assets at fair value on a recurring basis									Total assets at fair value on a recurring basis	$	33,408	$	5,346	$	28,062	$	—


						As of March 31,
	September 30, 2016		September 30, 2017			2021		2022
Balance at beginning of period	$	3,278	$	11,741
Balance as of the beginning of period					Balance as of the beginning of period	$	1,658	$	658
Amounts paid		(7,358)		(1,133)	Amounts paid	(730)		(658)
Contingent consideration in connection with NYCDA acquisition		14,500		—
Other adjustments to fair value		1,920		(6,184)	Other adjustments to fair value	418		—
Balance at end of period	$	12,340	$	4,424	Balance at end of period	$	1,346	$	—


	U.S. Higher Education		Australia / New Zealand		Education Technology Services		Total
Balance as of December 31, 2021	$	632,075	$	553,789	$	100,000	$	1,285,864
Additions	—		—		—		—
Impairments	—		—		—		—
Currency translation adjustments	—		17,311		—		17,311
Adjustments to prior acquisitions	—		—		—		—
Balance as of March 31, 2022	$	632,075	$	571,100	$	100,000	$	1,303,175


	September 30,		September 30,
	2016		2017
Balance at beginning of period(1)	$	20,055	$	11,985
Adjustments(2)		(1,695)		375
Payments		(4,434)		(2,884)
Balance at end of period(1)	$	13,926	$	9,476


	December 31, 2021						March 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Subject to amortization
Student relationships	$	201,309	$	(180,007)	$	21,302	$	201,875	$	(182,903)	$	18,972
Not subject to amortization
Trade names	255,078		—		255,078		257,295		—		257,295
Total	$	456,387	$	(180,007)	$	276,380	$	459,170	$	(182,903)	$	276,267


	December 31, 2021		March 31, 2022
Prepaid expenses, net of current portion	$	19,852	$	20,011
Equity method investments	15,582		13,887
Cloud computing arrangements	5,957		6,547
Other investments	3,576		3,677
Tuition receivable, non-current	2,466		2,062
Other	4,864		3,882
Other assets	$	52,297	$	50,066


	December 31, 2021		March 31, 2022
Trade payables	$	45,340	$	49,481
Accrued compensation and benefits	27,424		31,565
Accrued student obligations and other	22,754		22,888
Accounts payable and accrued expenses	$	95,518	$	103,934


	December 31, 2021		March 31, 2022
Contract liabilities, net of current portion	$	34,704	$	35,259
Asset retirement obligations	9,122		9,423
Other	3,263		3,405
Other long-term liabilities	$	47,089	$	48,087


	Number of shares or units	Weighted- average Grant price
Balance, December 31, 2016	727,100	$	97.53
Grants	75,140		82.18
Vested shares	(84,718)		66.60
Forfeitures	(1,204)		62.28
Balance, September 30, 2017	716,318	$	99.64


				Weighted-
				average
		Weighted-		remaining	Aggregate
	Number of	average		contractual	intrinsic value(1)
	shares	exercise price		life (years)	(in thousands)
Balance, December 31, 2016	100,000	$	51.95	4.1	$	2,868
Grants	—		—
Exercises	—		—
Forfeitures/Expirations	—		—
Balance, September 30, 2017	100,000	$	51.95	3.3	$	3,532
Exercisable, September 30, 2017	100,000	$	51.95	3.3	$	3,532


	December 31, 2016		September 30, 2017
Deferred revenue, net of current portion	$	17,981	$	18,274
Deferred rent and other facility costs		8,251		7,406
Loss on facilities not in use		7,813		6,227
Deferred payments related to acquisitions		13,754		5,979
Lease incentives		2,684		2,902
Other long-term liabilities	$	50,483	$	40,788


	Payments Due By Period
			Less than 1		1-3		3-5		More than
	Total		Year		Years		Years		5 Years
Operating leases	$	119,061	$	31,782	$	49,750	$	26,384	$	11,145