What changed in this filing

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Item 1. Financial Statements

2021-11-03 compared with 2021-08-05 · 111 added, 121 removed, 449 unchanged (34% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands, except per share data)

21 unchanged sentences

Consolidated Balance Sheets

September 30,

(In thousands, except par value)

28 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000 shares authorized;

0 shares issued and outstanding at June 30, 2021 and December 31, 2020

0 shares issued and outstanding at September 30, 2021 and December 31, 2020

Common stock, $ 0.01 par value, 100,000 shares authorized;

53,637 and 53,277 shares issued and 45,396 and 46,649 shares outstanding at June 30, 2021 and December 31, 2020, respectively

Treasury stock, at cost, 8,241 and 6,628 shares of common stock at June 30, 2021 and December 31, 2020, respectively

53,637 and 53,277 shares issued and 43,054 and 46,649 shares outstanding at September 30, 2021 and December 31, 2020, respectively

Treasury stock, at cost, 10,583 and 6,628 shares of common stock at September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

5 unchanged sentences

GRAND CANYON EDUCATION, INC.

Consolidated Statement of Other Comprehensive Income

Three Months Ended

Six Months Ended

(In thousands)

Other comprehensive income, net of tax:

Unrealized losses on available-for-sale securities, net of taxes of $ 22 for the three months ended June 30, 2021 and $ 57 for the six months ended June 30, 2021

Comprehensive income

GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Treasury Stock

10 unchanged sentences

Share-based compensation

Exercise of stock options

Balance at June 30, 2021

Six Months Ended June 30, 2020

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Balance at September 30, 2021

Nine Months Ended September 30, 2020

Treasury Stock

13 unchanged sentences

Balance at June 30, 2020

Comprehensive income

Common stock purchased for treasury

Restricted shares forfeited

Share-based compensation

Exercise of stock options

Balance at September 30, 2020

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

18 unchanged sentences

Funding to GCU

Repayment by GCU

Purchases of investments

3 unchanged sentences

Principal payments on notes payable

Net borrowings from revolving line of credit

Repurchase of common shares including shares withheld in lieu of income taxes

22 unchanged sentences

In the healthcare field, GCE, together with Orbis Education, works in partnership with a growing number of top universities and healthcare networks across the country, offering healthcare-related academic programs at off-campus classroom and laboratory sites located near healthcare providers and developing high-quality, career-ready graduates who enter the workforce ready to meet the demands of the healthcare industry.

As of June 30, 2021, GCE provides education services to 27 university partners across the United States.

As of September 30, 2021, GCE provides education services to 27 university partners across the United States.

Summary of Significant Accounting Policies

2 unchanged sentences

Intercompany transactions have been eliminated in consolidation.

The Company has no components of other comprehensive income (loss), and therefore, comprehensive income equals net income.

Unaudited Interim Financial Information

6 unchanged sentences

These consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 from which the December 31, 2020 balance sheet information was derived.

At June 30, 2021 and December 31, 2020, the Company considers its investments in corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations either as trading securities or available-for-sale securities based on the Company’s intent for the respective security.

Trading securities are carried at fair value determined using Level 1 and Level 2 of the hierarchy of valuation inputs, with the use of quoted market prices and inputs other than quoted prices that are observable for the assets.

Available-for-sale securities are carried at fair value, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets, with unrealized gains and losses, net of tax,

At December 31, 2020, the Company considered its investments in corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations as trading securities.

These securities were carried at fair value determined using Level 1 and Level 2 of the hierarchy of valuation inputs, with the use of quoted market prices and inputs other than quoted prices that are observable for the assets.

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

reported as a separate component of other comprehensive income.

Unrealized losses considered to be other-than-temporary are recognized currently in earnings.

Amortization of premiums, accretion of discounts, interest and dividend income and realized gains and losses are included in interest and other income.

Arrangements with GCU

3 unchanged sentences

The Secured Note provides for GCU to make interest only payments during the term, with all principal and accrued and unpaid interest due at maturity and also provides that we may loan additional amounts to GCU to fund approved capital expenditures.

As of June 30, 2021, the Company had loaned $ 289,815 to GCU, net of repayments, including $ 190,000 in June 2021.

The $ 190,000 that was borrowed in June 2021 was repaid in July 2021.

As of September 30, 2021, the Company had loaned $ 99,815 to GCU, net of repayments.

In connection with the closing of the Asset Purchase Agreement, the Company and GCU entered into a long-term master services agreement pursuant to which the Company provides identified technology and academic services, counseling services and support, marketing and communication services, and several back-office services to GCU in return for 60 % of GCU’s tuition and fee revenue.

16 unchanged sentences

Capitalized content development assets are included in other assets in our consolidated balance sheets.

The Company has concluded that the most appropriate method to amortize the deferred content assets is on a straight-line basis over the estimated life of the course, which is generally four years which

As of September 30, 2021 and December 31, 2020, $ 1,209 and $ 1,198 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

corresponds with course’s review and major revision cycle.

As of June 30, 2021 and December 31, 2020, $ 1,214 and $ 1,198 , respectively, net of amortization, of deferred content assets are included in other assets, long-term in the Company’s consolidated balance sheets and amortization is included in technical and academic services where the costs originated.

The Company determines if an arrangement is a lease at inception and evaluates the lease agreement to determine whether the lease is a finance or operating lease.

19 unchanged sentences

The Company reviews goodwill at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

Finite-lived intangible assets that are acquired in a business combination are recorded at fair value on their acquisition dates and are amortized on a straight-line basis over the estimated useful life of the intangible asset.

Finite-lived intangible assets that are acquired in a business combination are recorded at fair value on their acquisition dates and are amortized using a method that reflects the pattern in which the economic benefits of the intangible assets are consumed or on a straight-line basis over the estimated useful life of the intangible asset if the pattern of economic benefit cannot be reliability determined.

Finite-lived intangible assets consist of university partner relationships and trade names.

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of June 30, 2021.

There were no indicators that the carrying amount of the finite-lived intangible assets were impaired as of September 30, 2021.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets.

If such intangible assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amounts of the assets exceeds the fair value of the assets.

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

intangible assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amounts of the assets exceeds the fair value of the assets.

On January 22, 2019, GCE acquired Orbis Education for $ 361,184 (inclusive of closing date adjustments and net of cash acquired).

13 unchanged sentences

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued compensation and benefits and accrued liabilities expenses approximate their fair value based on the liquidity or the short-term maturities of these instruments.

As of June 30, 2021 and December 31, 2020 the fair value of the Company’s Secured Note was $ 1,231,524 and $ 1,049,458 , respectively.

As of June 30, 2021 and December 31, 2020 the carrying value of Secured Note receivable was $ 1,154,912 and $ 964,912 , respectively.

As of September 30, 2021 and December 31, 2020 the fair value of the Company’s Secured Note was $ 1,037,256 and $ 1,049,458 , respectively.

As of September 30, 2021 and December 31, 2020 the carrying value of Secured Note receivable was $ 964,912 for both periods.

The carrying value of notes payable approximates fair value as it is based on variable rate index.

7 unchanged sentences

Investments are comprised of corporate bonds, commercial paper, municipal securities, asset backed securities, municipal bonds, and collateralized mortgage obligations.

Revenue Recognition

The Company generates all of its revenue through services agreements with its university partners (“Services Agreements”), pursuant to which the Company provides integrated technology and academic services, marketing and communication services, and back office services to its university partners in return for a percentage of tuition and fee revenue.

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

Revenue Recognition

The Company’s Services Agreements have initial terms ranging from 7 - 15 years , subject to renewal options, although certain agreements may give the university partners the right to terminate early if certain conditions are met.

13 unchanged sentences

The Company evaluates the need for an allowance for credit losses using relevant available information about expected credit losses, including information about historical credit losses, past events, current conditions, and other factors which may affect the collectability of receivables.

There have been no amounts written off and no allowance for credit losses established as of June 30, 2021 given historical collection experience.

There have been no amounts written off and no allowance for credit losses established as of September 30, 2021 given historical collection experience.

The Company will continue to review and revise its allowance methodology based on its collection experience with its partners.

1 unchanged sentence

Billings for some university partners do not occur until after the service period has commenced and final enrollment information is available.

Our unbilled revenue of $ 8,811 and $ 294 as of June 30, 2021 and December 31, 2020, respectively, are included in accounts receivable in our consolidated balance sheets.

Our unbilled revenue of $ 11,604 and $ 294 as of September 30, 2021 and December 31, 2020, respectively, are included in accounts receivable in our consolidated balance sheets.

Deferred revenue represents the excess of amounts received as compared to amounts recognized in revenue on our consolidated statements of income as of the end of the reporting period, and such amounts are reflected as a current liability on our consolidated balance sheets.

1 unchanged sentence

These payments are recorded as deferred revenue until the services are delivered and revenue is recognized.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Allowance for Credit Losses

4 unchanged sentences

The Company determines the adequacy of the allowance by periodically evaluating each university partners balance, considering their financial condition and credit history, and considering current and forecasted economic conditions.

Since our transition to an education services company on July 1, 2018, and continued growth to 27 university partners, the Company has no credit losses with any of our university partners.

Since our transition to an education services company on July 1, 2018, and continued growth to 27 university partners,

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

the Company has no credit losses with any of our university partners.

In the first quarter of 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses:

19 unchanged sentences

Advertising costs are expensed as incurred.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

General and Administrative

1 unchanged sentence

This category also includes an allocation of depreciation, amortization, lease expense, and occupancy costs attributable to the provision of these services, primarily at the Company’s Phoenix, Arizona and Indianapolis, Indiana locations.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Commitments and Contingencies

7 unchanged sentences

The Company believes the credit risk related to cash equivalents and investments is limited due to its adherence to an investment policy that requires investments to have a minimum BBB rating, depending on the type of security, by one major rating agency at the time of purchase.

All of the Company’s cash equivalents and investments as of June 30, 2021 and December 31, 2020 consist of investments rated BBB or higher by at least one rating agency.

All of the Company’s cash equivalents and investments as of September 30, 2021 and December 31, 2020 consist of investments rated BBB or higher by at least one rating agency.

Additionally, the Company utilizes more than one financial institution to conduct initial and ongoing credit analysis on its investment portfolio to monitor and lower the potential impact of market risk associated with its cash equivalents and investment portfolio.

4 unchanged sentences

A significant deterioration in the financial viability of our counterparty and corresponding decline in the fair value of the collateralized assets could impact the collectability risk of the Secured Note.

Our dependence on our most significant university partner, which is also the counterparty to the Secured Note, with 85.7 % and 87.0 % of total service revenue for the six-month periods ended June 30, 2021 and 2020, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue and interest income on the Secured Note for the Company.

Our dependence on our most significant university partner, which is also the counterparty to the Secured Note, with 85.0 % and 86.5 % of total service revenue for the nine-month periods ended September 30, 2021 and 2020, respectively, subjects us to the risk that declines in our customer’s operations would result in a sustained reduction in service revenue and interest income on the Secured Note for the Company.

Use of Estimates

18 unchanged sentences

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting.

It provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022.

The Company plans to elect the optional expedient for its credit facility by prospectively adjusting the effective interest rate if the cessation of the London Interbank Offered Rate (LIBOR) occurs.

The Company does not believe the adoption of the reference rate reform will have a material impact on the Company’s financial condition, results of operations or statements of cash flows.

The Company has determined that no other recent accounting pronouncements apply to its operations or could otherwise have a material impact on its consolidated financial statements.

At June 30, 2021 and December 31, 2020, the Company had investments of $ 3,006 and $ 10,840 , respectively, classified as trading.

The trading investments are held in municipal and corporate securities as of June 30, 2021 and December 31, 2020 and are due in one year or less as of June 30, 2021.

At December 31, 2020, the Company had investments of $ 10,840 classified as trading.

The trading investments are held in municipal and corporate securities.

The cash flows of municipal securities are backed by the issuing municipality’s credit-worthiness.

At June 30, 2021, the Company had available-for-sale investments of $ 41,409 , comprised of the following:

As of June 30, 2021

Corporate bonds

Commercial paper

Municipal securities

Asset backed securities

Total investments

For the six months ended June 30, 2021, the net unrealized gains or (losses) were $ 185 , net of taxes.

As of September 30, 2021, there were no unrealized gains or losses for available-for sale debt securities as all matured or were sold by September 30, 2021.

Available-for-sale debt securities are carried at fair value on the consolidated balance sheets.

The Company estimates the lifetime

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

expected credit losses for all available-for sale debt securities in an unrealized loss position.

The Company estimates the lifetime expected credit losses for all available-for sale debt securities in an unrealized loss position.

If our assessment indicates that an expected credit loss exists, we determine the portion of the unrealized loss attributable to credit deterioration and record a reserve for the expected credit loss in the allowance for credit losses in technology and academic services in our consolidated income statements.

As of June 30, 2021, there were no credit losses for our available-for-sale debt securities.

Available-for-sale securities maturing as of December 31:

2021 (Remainder of year)

Net Income Per Common Share

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Basic weighted average shares outstanding

2 unchanged sentences

Diluted weighted average shares outstanding excludes the incremental effect of unvested restricted stock and shares that would be issued upon the assumed exercise of stock options in accordance with the treasury stock method.

For the three month periods ended June 30, 2021 and 2020, approximately 1 and 81 , respectively, and for the six month perioded ended June 30, 2021 and 2020, approximately 2 and 182 , respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

These restricted stock awards could be dilutive in the future.

Allowance for Credit Losses

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

For the three month periods ended September 30, 2021 and 2020, approximately 73 and 79 , respectively, and for the nine month periods ended September 30, 2021 and 2020, approximately 25 and 148 , respectively, of the Company’s restricted stock awards outstanding were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive.

These restricted stock awards could be dilutive in the future.

Allowance for Credit Losses

Transfers (2)

Allowance for credit losses

Six months ended June 30, 2021

Six months ended June 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

(1) Amount represents the cumulative effect of the adoption of ASU No.

3 unchanged sentences

Property and equipment consist of the following:

September 30,

Land improvements

8 unchanged sentences

Amortizable intangible assets consist of the following as of:

June 30, 2021

September 30, 2021

Average Useful

2 unchanged sentences

Total amortizable intangible assets, net

Amortization expense for university partner relationships and trade names for the years ending December 31:

Remainder of 2021

Grand Canyon Education, Inc.

1 unchanged sentence

(In thousands, except per share data)

Amortization expense for university partner relationships and trade names for the years ending December 31:

Remainder of 2021

The Company has operating leases for classroom site locations, office space, office equipment, and optical fiber communication lines.

These leases have terms that range from 7 months to 9.7 years.

These leases have terms that range from four months to ten years .

At lease inception, we determine the lease term by assuming no exercises of renewal options, due to the Company’s constantly changing geographical needs for its university partners.

Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company had operating lease costs of $ 4,862 and $ 3,055 for the six-month periods ended June 30, 2021 and 2020, respectively.

As of June 30, 2021, the Company had $ 4,183 of non-cancelable operating lease commitments for a classroom site location, that had not yet commenced.

The Company had operating lease costs of $ 7,371 and $ 5,244 for the nine-month periods ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, the Company had no non-cancelable operating lease commitments that had not yet commenced.

The Company’s weighted-average remaining lease term relating to its operating leases is 8.07 years, with a weighted-average discount rate of 3.1 %.

As of June 30, 2021, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at June 30, 2021, by year and in the aggregate, are as follows:

As of September 30, 2021, the Company had no financing leases.

Future payment obligations with respect to the Company’s operating leases, which were existing at September 30, 2021, by year and in the aggregate, are as follows:

Year Ending December 31,

7 unchanged sentences

Accordingly, the Company allocated the costs paid to the bank consortium based on the borrowing dollars and recorded an asset of $ 596 and a contra liability of $ 1,639 , which are related to our revolver and term loan, respectively, that is being amortized to interest expense over the five-year maturity date.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

The Company entered into a further amendment for the credit facility on October 31, 2019.

2 unchanged sentences

The amended and restated credit agreement contains standard covenants that, among other things, restrict the Company’s ability to incur additional debt or make certain investments, and require the Company to achieve certain financial ratios and maintain certain financial conditions.

The Company’s obligations under the credit facility are secured by its assets, including all rights,

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

benefits and payments under the Secured Note and the Master Services Agreement.

As of June 30, 2021, the Company is in compliance with its debt covenants and the note payable totals $ 92,049 , excluding the contra liability of $ 847 .

As of June 30,

The Company’s obligations under the credit facility are secured by its assets, including all rights, benefits and payments under the Secured Note and the Master Services Agreement.

As of September 30, 2021, the Company is in compliance with its financial covenants and the note payable totals $ 83,680 , excluding the contra liability of $ 765 .

As of September 30,

As of December 31,

1 unchanged sentence

Note payable, quarterly payment of $ 8,368 starting December 31, 2019;

interest at 30-Day LIBOR plus 2.00 % ( 2.09 % at June 30, 2021) through January 22, 2024

Revolving line of credit;

interest at Base Rate ( 4.0 % at June 30, 2021)

interest at 30-Day LIBOR plus 2.00 % ( 2.09 % at September 30, 2021) through January 22, 2024

Current portion

Payments due under the notes payable obligations are as follows as of December 31:

Remainder of 2021

Commitments and Contingencies

10 unchanged sentences

The Company reserve is not material for tax matters where its ultimate exposure is considered probable and the potential loss can be reasonably estimated.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Share-Based Compensation

1 unchanged sentence

The Company makes equity incentive grants pursuant to our 2017 Equity Incentive Plan (the “2017 Plan”) under which a maximum of 3,000 shares may be granted.

As of June 30, 2021, 1,414 shares were available for grants under the 2017 Plan.

As of September 30, 2021, 1,414 shares were available for grants under the 2017 Plan.

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Restricted Stock

During the six months ended June 30, 2021, the Company granted 180 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

During the nine months ended September 30, 2021, the Company granted 180 shares of common stock with a service vesting condition to certain of its executives, officers and employees.

The restricted shares have voting rights and vest in five annual installments of 20 %, with the first installment vesting in March of the calendar year following the date of grant (the “first vesting date”) and subsequent installments vesting on each of the four anniversaries of the first vesting date.

Upon vesting, shares will be withheld in lieu of taxes equivalent to the minimum statutory tax withholding required to be paid when the restricted stock vests.

During the six months ended June 30, 2021, the Company withheld 56 shares of common stock in lieu of taxes at a cost of $ 5,994 on the restricted stock vesting dates.

During the nine months ended September 30, 2021, the Company withheld 56 shares of common stock in lieu of taxes at a cost of $ 5,994 on the restricted stock vesting dates.

In June 2021, following the annual stockholders meeting, the Company granted 4 shares of common stock to the non-employee members of the Company’s Board of Directors.

8 unchanged sentences

Forfeited, canceled or expired

Outstanding as of June 30, 2021

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Outstanding as of September 30, 2021

Stock Options

During the six months ended June 30, 2021, no options were granted.

During the nine months ended September 30, 2021, no options were granted.

A summary of the activity since December 31, 2020 related to stock options granted under the Company’s Incentive Plan is as follows:

2 unchanged sentences

Forfeited, canceled or expired

Outstanding as of June 30, 2021

Exercisable as of June 30, 2021

Outstanding as of September 30, 2021

Exercisable as of September 30, 2021

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

Share-based Compensation Expense

The table below outlines share-based compensation expense for the six months ended June 30, 2021 and 2020 related to restricted stock granted:

The table below outlines share-based compensation expense for the nine months ended September 30, 2021 and 2020 related to restricted stock granted:

Technology and academic services

15 unchanged sentences

At inception of the ASR agreement, the Company recognized the initial delivery of shares as treasury stock of $ 28,000 , and recognized the remaining amount underlying the ASR agreement as a reduction of additional paid in capital of $ 7,000 .

The total number of shares that the Company repurchased under the ASR program was based on the volume-weighted average price of the common stock during the term of the ASR agreement, less a discount, and subject

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

to potential adjustments pursuant to the terms and conditions of the ASR agreement.

The final settlement of the share repurchases under the ASR agreement was completed on May 4, 2021 with additional delivery of 46 shares of common stock.

5 unchanged sentences

The total number of shares that the Company will repurchase under the ASR program will be based on the volume-weighted average price of the common stock during the term of the ASR agreement, less a discount, and subject to potential adjustments pursuant to the terms and conditions of the ASR agreement.

The final settlement of the share repurchases under the ASR agreement will be completed no later than September 9, 2021.

During the six months ended June 30, 2021 the Company repurchased 1,549 shares of common stock, which includes shares received as of June 30, 2021 under the ASR on March 10, 2021 and shares received under the ASR on May 17, 2021, at an aggregate cost of $ 151,679 .

At June 30, 2021, there remained $ 96,592 available under its current share repurchase authorization (which authorization was increased to $ 1,066,592 in July 2021).

The final settlement of the share repurchases under the ASR agreement was completed on August 13, 2021 with additional delivery of 139 shares of common stock.

At settlement of the ASR agreement, the Company recognized an increase to additional paid in capital and a decrease in treasury stock of $ 10,000

Grand Canyon Education, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

related to the remaining delivery of shares.

The ASR agreement resulted in a total of 558 shares repurchased at an average cost of $ 89.68 .

During the nine months ended September 30, 2021 the Company repurchased 3,873 shares of common stock, which includes shares received as of September 30, 2021 under the ASR on March 10, 2021 and shares received under the ASR on May 17, 2021, at an aggregate cost of $ 354,185 .

At September 30, 2021, there remained $ 864,085 available under its current share repurchase authorization.

Shares repurchased in lieu of taxes are not included in the repurchase plan totals as they were approved in conjunction with the restricted share awards.

Subsequent Events

Modification of Credit Agreement with Grand Canyon University.

On October 28, 2021, the Company received formal notice from GCU of GCU’s entry into a refinancing transaction (the “Refinancing”) the proceeds of which will be used to repay $ 500.0 million of the outstanding balance of the Secured Note on October 29, 2021.

In connection with the Refinancing and related partial repayment of the Secured Note, the Company entered into a Modification of Credit Agreement with GCU (the “Modification”).

The Modification provides that, in exchange for the partial repayment, (i) the Company will release its first priority lien on GCU’s assets, (ii) GCU will grant a first priority lien to a financial institution as master trustee under a master trust indenture (the “Master Trust Indenture”), and (iii) the Company will receive an obligation from the master trust evidencing the remaining balance of the Secured Note due to the Company (the “Trust Obligation”).

The Trust Obligation continues to bear interest at an annual rate of 6.0 %, has a maturity date of June 30, 2025, and is secured on an equal and proportional basis with all other obligations issued under the Master Trust Indenture by all of the assets of GCU.

Termination of GCE Credit Agreement .

The Company is a party to that certain Amended and Restated Credit Agreement, dated as of January 22, 2019, among the Company, Orbis Education Services, LLC, a wholly owned subsidiary of the Company, as guarantor, Bank of America, N.A.

as administrative agent, swing line lender and letter of credit issuers, and the other lenders names therein (as amended, the “GCE Credit Agreement”).

Upon its receipt of the proceeds from the Refinancing in partial payment of the Secured Note, the Company repaid all amounts due under the outstanding term loan and revolving credit facilities of, and terminated, the GCE Credit Agreement and plans to use the balance of such proceeds for general corporate purposes, including repurchases of shares under the Company’s share repurchase program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements