In connection with the acquisitions of RU, HCN, and GSUSA, the Company applied FASB ASC 805, Business Combinations, using the acquisition method of accounting. The Company recorded $217.4 million and $38.6 million of goodwill in connection with the RU and HCN acquisitions, respectively, representing the excess of the purchase price over the fair value of assets acquired and liabilities assumed, including identifiable intangible assets. The Company subsequently recorded non-cash impairment charges in 2022 and 2023 for RU, and 2016 and 2019 for HCN, reducing the carrying value of RU and HCN goodwill to $33.0 million and $26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA.

The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill might be impaired. Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test. The quantitative test compares the fair value of the reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment.

During the second quarter of 2023, the Company concluded it was more likely than not that the fair value of the Company’s RU Segment was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value. Therefore, during the second quarter, the Company proceeded with an interim quantitative impairment test for the RU Segment. The implied fair value of RU Segment goodwill was calculated and compared to the recorded goodwill value. As a result, the Company recorded a non-cash impairment charge of $53.0 million, and the corresponding tax impact of $15.8 million, to reduce the carrying value of RU Segment goodwill to $33.0 million. The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements. The impairment charge eliminated the difference between the fair value and book value of RU Segment goodwill. During the fourth quarter of 2023, the Company completed its annual assessment of RU Segment goodwill for impairment and determined that the fair value was greater than the carrying value and therefore there was no impairment of RU Segment goodwill as of the valuation date which was October 31.

For the years ended December 31, 2024 and 2025, the Company completed its annual assessment of RU goodwill and concluded that RU’s fair value was more than the carrying value; consequently, there was no impairment. For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN goodwill and concluded that HCN’s fair value was more than the carrying value; consequently, there was no impairment.

The Company engaged an independent valuation firm to assist with the valuations. The independent valuation firm weights the results of two different valuation methods to determine fair value: (i) discounted cash flow and (ii) guideline public company. Under the discounted cash flow method, fair value was determined by discounting the estimated future cash flows of RU and HCN at their estimated weighted-average cost of capital. Under the guideline public company method, pricing multiples from other public companies in the public higher education market were used to determine the fair value of RU and HCN. Values derived under the two valuation methods were then weighted to estimate RU and HCN’s enterprise values. The income and cost approaches were used, as applicable, to value the RU and HCN’s indefinite-lived intangible assets.


	APUS Segment		RU Segment		HCN Segment		Total Goodwill

Goodwill as of December 31, 2023	$	—	$	33,030	$	26,563	$	59,593

Impairment	—		—		—		—

Goodwill as of December 31, 2024	$	—	$	33,030	$	26,563	$	59,593

Impairment	—		—		—		—

Goodwill as of December 31, 2025	$	—	$	33,030	$	26,563	$	59,593

In addition to goodwill, in connection with the acquisitions of RU and HCN, the Company recorded identified intangible assets with an indefinite useful life in the aggregate amount of $51.0 million and $3.7 million, respectively, which includes trade name, accreditation, licensing and Title IV, and affiliate agreements. The Company subsequently recorded non-cash impairment charges of $26.5 million in 2022 and 2023 to reduce the carrying value of RU indefinite-lived intangible assets to $24.5 million.

The Company recorded $35.5 million and $4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively. These identified intangible assets with a definite useful life were amortized on a straight-line basis over estimated useful lives, which were generally two to six years. All recorded identified intangible assets with a definite useful life were fully amortized as of December 31, 2024. During the years ended December 31, 2023 and 2024, the Company recorded amortization expense related to definite lived intangible assets of $12.2 million and $3.3 million, respectively.

During the second quarter of 2023, the Company concluded it was more likely than not the fair value of the Company’s RU Segment intangible assets was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value. As a result, the Company completed an impairment test related to the valuation of RU Segment intangible assets during the second quarter. The implied fair value of intangible assets was calculated and compared to the recorded value and it was determined the fair value of the RU Segment trade name was $18.5 million, or $8.0 million less than its carrying value, and RU Segment accreditation, licensing, and Title IV was $6.0 million, or $3.0 million less than the carrying value during the second quarter. As a result, the Company recorded a non-cash impairment charge of $11.0 million to reduce the carrying values of the RU Segment indefinite-lived intangible assets during 2023. The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements. The impairment charge recorded eliminated the difference between the fair value of the trade name and accreditation, licensing, and Title IV indefinite-lived intangible assets, and the book value.

For the years ended December 31, 2024 and 2025, the Company’s annual assessment concluded that the fair value of RU’s indefinite lived intangible assets was more than the carrying value; consequently, there was no impairment. For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN indefinite-lived intangible assets and concluded that the fair value was more than the carrying value; consequently, there was no impairment.