What changed in this filing

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Item 1A. Risk Factors

2020-08-06 compared with 2020-05-07 · 228 added, 30 removed, 0 unchanged (100% of the section changed)

Except as stated below, there have been no material changes to our risk factors as previously disclosed in Part I, Item 1A “Risk Factors” included in our 2019 Form 10-K.

In addition to the information contained herein, you should consider the risk factors disclosed in our 2019 Form 10-K.

Furthermore, the impact of COVID-19 may also exacerbate other risks discussed in our 2019 Form 10-K, any of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

The situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

An epidemic, pandemic or other public health emergency, such as the recent outbreak of a novel strain of coronavirus (COVID-19), could have a material adverse effect on our business, financial condition, cash flows and results of operations.

A novel strain of coronavirus, COVID-19, first identified in China in late 2019, has spread globally, including to the United States and each country in which we operate.

The Company may face risks related to COVID-19, which was declared a global pandemic by the World Health Organization on March 11, 2020.

The extent to which COVID-19, like any other rapidly spreading contagious illness, may impact our operations will depend upon the evolution of the outbreak, which is highly speculative at this time and cannot be predicted with any level of confidence.

The Company cannot predict the duration of the outbreak, the severity of the illness or the scope, breadth or depth of the actions that may be taken by governmental authorities and/or other third parties in response to the outbreak.

We believe that the continued spread of COVID-19 and any resulting preventative or protective actions could adversely impact our operations.

While we have acted quickly to leverage our existing technologies and learning platforms to serve students outside of the traditional classroom setting—and each of our affected institutions has now transitioned most, if not all, of our face-to-face students to an online learning environment—our ability to retain students, enroll new students and maintain tuition levels, as well as the ability of our students to pay tuition and other fees, may be materially adversely affected by, among other things, (i) the health of our students, our faculty and their families;

(ii) decreases in our students’ and/or their families’ level of disposable income;

(iii) the performance and reliability of our online program infrastructure;

(iv) the ability of our recruiters to conduct outreach with prospective students during the student recruitment season;

and (v) adverse legislative and regulatory actions.

If we are unable to retain students, enroll new students, maintain tuition levels and collect student accounts receivables, we may be required to record impairments and our business, financial condition, cash flows and results of operations may be materially adversely affected.

In addition, an epidemic, pandemic or other public health emergency could adversely affect, and, in the case of COVID-19, has adversely affected, global economies and financial markets.

The depth and duration of the global economic and market downturn resulting from COVID-19 remain highly uncertain, particularly given the lack of appropriate historical benchmarks.

Reduced economic activity, increased unemployment and, in some countries, economic recession, may reduce the demand for our programs among students, which could materially adversely affect our business, financial condition, cash flows and results of operations.

These adverse economic developments also may result in a reduction in the number of jobs available to our graduates and lower salaries being offered in connection with available employment, which, in turn, may result in declines in our placement and retention rates.

As a result, any general economic slowdown or recession that disproportionately impacts the countries in which our institutions operate could have a material adverse effect on our business, financial condition, cash flows

and results of operations.

In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

Additionally, the COVID-19 pandemic has resulted in severe disruption and volatility in the U.S.

financial markets.

The trading price of our Class A common stock has declined dramatically since the beginning of March 2020 and may continue to experience volatility and declines.

The COVID-19 pandemic continues to evolve rapidly.

The ultimate impact of COVID-19—like any other major epidemic, pandemic or public health emergency—is highly uncertain and subject to change.

We do not yet know the full extent of potential impacts on our business or the global economy as a whole.

We intend to continue to monitor the situation.

Except as stated below, there have been no material changes to the risk factors previously disclosed in “Item 1A.

Risk Factors” in our 2019 Form 10-K, as updated in Part II, “Item 1A.

Risk Factors” in our Q1 2020 Form 10-Q.

In addition to the information set forth in this report, you should consider the risk factors disclosed in our 2019 Form 10-K, as updated in our Q1 2020 Form 10-Q.

Furthermore, the impact of COVID-19 also may exacerbate other risks discussed in our 2019 Form 10-K and Q1 2020 Form 10-Q, any one of which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

The situation is changing rapidly, and additional impacts may arise of which we are not currently aware.

Political and regulatory developments in Chile may materially adversely affect us .

On May 29, 2018, a new Higher Education Law (the “New Law”) was enacted.

Among other things, the New Law prohibits conflicts of interests and related party transactions involving universities and their controlling parties, with certain exceptions, including the provision of services that are educational in nature or essential for the university’s purposes.

While we have modified some of our relationships with the Chilean universities in our network, and may need to make further modifications, we do not believe that the New Law will change our relationship with our two technical-vocational institutes in Chile that are for-profit entities.

However, it is possible that the Chilean government will adopt additional laws that affect for-profit technical-vocational institutes and their relationships with their owners.

The New Law established a Superintendency of Higher Education, with authority to regulate institutions of higher education and promulgate regulations and procedures implementing the New Law.

As of May 29, 2019, the New Law’s provisions regarding related party transactions came into force, and the Superintendent has since issued further interpretive guidance and regulations.

Immediately prior to these provisions coming into force, each of the Chilean non-profit universities and the

relevant Laureate services provider reached an agreement to terminate the prior network services agreement in favor of an open bidding process, wherein unrelated third parties and Laureate-related providers were invited to compete in the provision of the range of services that are essential to the fulfillment of each of their academic missions.

Each of the Chilean non-profit universities has completed all of the bidding and contractual processes subsequent to the May 2019 contract terminations.

The Company participated in these open bid processes, conducted by a third party, and was judged to have submitted the superior bid in many of them.

Awarded contracts entered into force once the applicable university’s board approved them or in January 2020, in the case of some of the educational services, due to the academic calendar.

Within the ordinary regulatory course of supervision, the Company and its Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law.

Additionally, we will continue to evaluate our accounting treatment of the Chilean non-profit universities to determine whether we can continue to consolidate them.

Our continuing evaluation of the impact of the New Law may result in changes to our expectations due to changes in our interpretations of the law, assumptions used, and additional guidance that may be issued.

There is no assurance that the New Law will not have additional material adverse effects on our financial condition or results of operations.

In October 2020, Chileans are scheduled to vote on whether Chile should create a new constitution and, if so, whether it should be drafted by a popularly elected assembly or one mixed with current lawmakers.

According to the current timetable, a new constitution could become effective as early as the summer of 2022.

It is possible that a new constitution could include provisions that would have a material adverse effect on our financial condition or results of operations.

It is also possible that, as proposed reforms are considered, even the existence of the debate and accompanying uncertainty could have a similar effect.

The Company will continue to monitor developments in the constitutional process.

While we believe that all of our institutions in Chile are operating in full compliance with Chilean law, we cannot predict the extent or outcome of any additional educational or constitutional reforms that may be implemented in Chile.

Depending upon how these reforms are defined and implemented, there could be a material adverse effect on our financial condition and results of operations.

Any additional significant disruption to our operations in Chile would have a material adverse effect on our financial condition and results of operations.

Similar reforms in other countries in which we operate could also have a material adverse effect on our financial condition and results of operations.

(a) Exhibits filed with this report or, where indicated, previously filed and incorporated by reference:

Exhibit Description Form File Number Exhibit

2.1# Amended and Restated Sale and Purchase Agreement, dated as of November 22, 2017 and amended and restated on January 11, 2018, by and among LEI European Investments B.V., Laureate International B.V.

and Galileo Global Education Luxco S.À R.L.

10-K 001-38002 2.7 03/20/2018

2.2# Sale and Purchase Agreement, dated April 12, 2018, among LEI European Investments B.V., Laureate International B.V.

and Global University Systems Germany B.V.

8-K 001-38002

2.1 04/18/2018

2.3# Asset Purchase Agreement, dated January 15, 2018, among Kendall College, LLC, The Dining Room at Kendall NFP, National Louis University and Laureate Education, Inc.

8-K 001-38002 2.1 08/07/2018

2.4# Membership Interest Purchase Agreement, dated April 24, 2018, by and among Laureate Education, Inc., Exeter Street Holdings, LLC, University of St.

Augustine for Health Sciences, LLC and University of St.

Augustine Acquisition Corp.

10-Q 001-38002 2.4 08/09/2018

2.5# Sale and Purchase Agreement, dated December 12, 2018, by and among Iniciativas Culturales de España S.L., Laureate I B.V.

and Samarinda Investments, S.L.

10-K 001-38002 2.5 02/28/2019

2.6# Share Purchase Agreement relating to the sale and purchase of equity shares of Pearl Retail Solutions Private Limited, M-Power Energy India Private Limited and Data Ram Sons Private Limited

8-K 001-38002 2.1 05/13/2019

2.7# Share Purchase Agreement relating to all the shares in the capital of Education Turkey B.V.

8-K 001-38002 2.1 08/29/2019

2.8# Equity Purchase Agreement, dated January 10, 2020, by and among SP Costa Rica Holdings, LLC, Laureate International B.V.

and Laureate Education, Inc.

10-K 001-38002 2.8 02/27/2020

3.1 Amended and Restated Certificate of Incorporation

S-1/A 333-207243 3.1 01/31/2017

3.2 Amended and Restated Bylaws

S-1/A 333-207243 3.2 01/31/2017

3.3 Certificate of Retirement of Convertible Redeemable Preferred Stock, Series A

8-K 001-38002 3.1 07/20/2018

4.1 Description of Capital Stock of Laureate Education, Inc.

10-K 001-38002 4.1 02/27/2020

4.2 Indenture, dated as of April 26, 2017, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 8.250% Senior Notes due 2025

8-K 001-38002 4.3 04/27/2017

4.3 Form of 8.250% Senior Note due 2025 (included as Exhibit A to Exhibit 4.3)

8-K 001-38002 4.3 04/27/2017

10.1† 2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc.

and its Subsidiaries

S-1/A 333-207243 10.31 11/20/2015

10.2† 2007 Stock Incentive Plan Form of Stock Option Agreement, as amended on August 31, 2010

S-1/A 333-207243 10.32 11/20/2015

10.3† 2013 Long-Term Incentive Plan Form of Stock Option Agreement effective as of September 11, 2013

S-1/A 333-207243 10.34 11/20/2015

10.4† Laureate Education, Inc.

Deferred Compensation Plan, as amended and restated effective January 1, 2009

S-1/A 333-207243 10.35 11/20/2015

10.5† Form of Management Stockholder’s Agreement for equityholders

S-1/A 333-207243 10.36 11/20/2015

10.6† Employment Offer Letter, dated July 21, 2008, between Laureate Education, Inc.

and Eilif Serck - Hanssen

S-1/A 333-207243 10.40 11/20/2015

10.7† Amendment to Employment Offer Letter, dated December 9, 2010, between Laureate Education, Inc.

and Eilif Serck-Hanssen

S-1/A 333-207243 10.41 11/20/2015

10.8† Form of Time-Based Restricted Stock Units Agreement, for grants from and after September 11, 2013

S-1/A 333-207243 10.43 11/20/2015

Exhibit Description Form File Number Exhibit

10.9 Master Service and Confidentiality Agreement, dated April 28, 2014, by and between Laureate Education, Inc.

and Accenture LLP

S-1/A 333-207243 10.45 11/20/2015

10.10‡ System Wide Master Agreement, dated April 10, 2015, between Blackboard Inc.

and Laureate Education, Inc.

S-1/A 333-207243 10.46 11/20/2015

10.11† Form of Stockholders’ Agreement for Entity-Appointed Directors

S-1/A 333-207243 10.47 11/20/2015

10.12† Form of Stockholders’ Agreement for Individual Directors

S-1/A 333-207243 10.48 11/20/2015

10.13† Executive Retention Agreement, dated February 25, 2016, by and between Ricardo Berckemeyer and Laureate Education, Inc., effective as of September 1, 2015

S-1/A 333-207243 10.54 05/20/2016

10.14† 2013 Long-Term Incentive Plan Form of Stock Option Agreement for 2016 for Named Executive Officers

S-1/A 333-207243 10.57 05/20/2016

10.15† 2013 Long-Term Incentive Plan Form of Stock Option Agreement for 2016

S-1/A 333-207243 10.58 05/20/2016

10.16† 2013 Long-Term Incentive Plan Form of Restricted Stock Units Agreement for 2016 for Named Executive Officers

S-1/A 333-207243 10.59 05/20/2016

10.17† 2013 Long-Term Incentive Plan Form of Restricted Stock Units Agreement for 2016

S-1/A 333-207243 10.60 05/20/2016

10.18 Subscription Agreement, dated as of December 4, 2016, by and among Laureate Education, Inc., Macquarie Sierra Investment Holdings Inc., and each of the other Persons listed on Schedule A and Schedule B thereto.

S-1/A 333-207243 10.63 12/15/2016

10.19 Registration Rights Agreement by and among Laureate Education, Inc., each of the Investors set forth on Schedule A thereto, Douglas L.

Becker and Wengen Alberta, Limited Partnership

10-K 001-38002

10.29 03/20/2018

10.20 Investors’ Stockholders Agreement by and among Laureate Education, Inc., Wengen Alberta, Limited Partnership and the Investors set forth on Schedule A thereto

10-K 001-38002

10.30 03/20/2018

10.21† Form of Cash Long-Term Incentive Plan Agreement

S-1/A 333-207243 10.73 01/10/2017

10.22 Amended and Restated Securityholders Agreement by and among Wengen Alberta, Limited Partnership, Laureate Education, Inc.

and the other parties thereto

8-K 001-38002 10.1 02/06/2017

10.23 Amended and Restated Registration Rights Agreement by and among Wengen Alberta, Limited Partnership, Wengen Investments Limited, Laureate Education, Inc.

and the other parties thereto

8-K 001-38002 10.2 02/06/2017

10.24† Amendment to the 2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc.

and its Subsidiaries

10-K 001-38002 10.76 03/29/2017

10.25 Amended and Restated Guarantee, dated as of April 26, 2017, by Laureate Education, Inc.

and certain domestic subsidiaries of Laureate Education, Inc.

party thereto from time to time, as guarantors, in favor of Citibank, N.A., as collateral agent

10-Q 001-38002 10.83 05/11/2017

10.26 Amended and Restated Pledge Agreement, dated as of April 26, 2017, among Laureate Education, Inc.

and certain domestic subsidiaries of Laureate Education, Inc.

party thereto from time to time, as pledgors, and Citibank, N.A., as collateral agent

10-Q 001-38002 10.84 05/11/2017

10.27 Amended and Restated Security Agreement, dated as of April 26, 2017, among Laureate Education, Inc.

and certain domestic subsidiaries of Laureate Education, Inc.

party thereto from time to time, as grantors, and Citibank, N.A., as collateral agent

10-Q 001-38002 10.85 05/11/2017

10.28 Second Amended and Restated Collateral Agreement, dated as of April 26, 2017, between Walden University, LLC, certain other domestic subsidiaries of Laureate Education, Inc.

from time to time, and Citibank, N.A., as collateral agent

10-Q 001-38002 10.86 05/11/2017

Exhibit Description Form File Number Exhibit

10.29† Laureate Education, Inc.

Amended and Restated 2013 Long-Term Incentive Plan

8-K 001-38002 10.1 06/20/2017

10.30† Amended and Restated 2013 Long-Term Incentive Plan Form of Annual Performance Share Units Notice and Agreement for 2017

10-Q 001-38002 10.51 08/08/2017

10.31† Amended and Restated 2013 Long-Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017

10-Q 001-38002 10.52 08/08/2017

10.32† Amended and Restated 2013 Long-Term Incentive Plan Form of Time-based Stock Option Agreement for 2017

10-Q 001-38002 10.53 08/08/2017

10.33† Amended and Restated 2013 Long-Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017

10-Q 001-38002 10.54 08/08/2017

10.34† Amended and Restated 2013 Long-Term Incentive Plan Form of Performance Share Units Notice and Agreement for 2017

10-Q 001-38002 10.55 08/08/2017

10.35† Amended and Restated 2013 Long-Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017 for Certain Executives

10-Q 001-38002 10.56 08/08/2017

10.36† Amended and Restated 2013 Long-Term Incentive Plan Form of Time-based Stock Option Agreement for 2017 for Certain Executives

10-Q 001-38002 10.57 08/08/2017

10.37† Amended and Restated 2013 Long-Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017 for Certain Executives

10-Q 001-38002 10.58 08/08/2017

10.38† Form of 2017-2018 Laureate Executive Cash Long-Term Bonus Plan for Certain Executives

10-Q 001-38002 10.59 08/08/2017

10.39† Employment Offer Letter, dated August 15, 2017, between Laureate Education, Inc.

and Victoria Silbey

10-Q 001-38002 10.61 11/08/2017

10.40† Form of Stock Option Agreement with exercise price of $18.36 for certain executives

10-Q 001-38002 10.64 11/08/2017

10.41† Form of Stock Option Agreement with exercise price of $21.00 for certain executives

10-Q 001-38002 10.65 11/08/2017

10.42† Employment Offer Letter, dated November 6, 2017, between Laureate Education, Inc.

and Jean-Jacques Charhon

10-K 001-38002 10.67 03/20/2018

10.43† Transitional Employment Agreement, effective as of November 9, 2017, between Paula Singer and Laureate Education, Inc.

10-K 001-38002 10.68 03/20/2018

10.44 Stock Option Agreement, dated as of January 2, 2018, between Jean-Jacques Charhon and Laureate Education, Inc.

10-Q 001-38002 10.71 05/09/2018

10.45† Employment Offer Letter, dated May 3, 2018, between Timothy Grace and Laureate Education, Inc.

10-Q 001-38002 10.72 08/09/2018

10.48† Form of 2019 Annual Incentive Plan

10-Q 001-38002 10.62 08/08/2019

10.49† Form of Director Indemnity Agreement

10-Q 001-38002 10.64 08/08/2019

10.50† Separation Agreement, dated July 14, 2019, between Ricardo Berckemeyer and Laureate Education, Inc., effective as of July 15, 2019

10-Q 001-38002 10.65 08/08/2019

10.51† Separation Agreement and General Release, dated July 25, 2019, between Jose Roberto Loureiro and Laureate Education, Inc., effective as of July 29, 2019

10-Q 001-38002 10.66 08/08/2019

10.52# Third Amended and Restated Credit Agreement, dated as of October 7, 2019, among Laureate Education, Inc., the lending institutions from time to time parties thereto, and Citibank, N.A., as administrative agent and collateral agent

8-K 001-38002 10.1 10/11/2019

Exhibit Description Form File Number Exhibit

10.53†◊ Form of Retention Letter for Certain Corporate Executives

10-Q 001-38002 10.53 05/07/2020

10.54† Form of Retention/Transaction Bonus Letter for Certain Regional Executives

10-Q 001-38002 10.54 05/07/2020

10.55† Form of Named Executive Officer Temporary Salary Reduction Letter

10-Q 001-38002 10.55 05/07/2020

10.56*† 2013 Long-Term Incentive Plan Form of Restricted Stock Units Agreement for Non-Employee Directors for 2020

31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32* Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS* XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

* Filed herewith.

# Laureate Education, Inc.

hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S.

Securities and Exchange Commission upon request.

† Indicates a management contract or compensatory plan or arrangement.

‡ Confidential treatment has been granted with respect to certain portions of this exhibit.

Omitted portions have been filed separately with the U.S.

Securities and Exchange Commission.

◊ Certain identified information has been omitted from this exhibit because it is both (1) not material, and (2) would be competitively harmful if publicly disclosed.

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.

/s/ JEAN-JACQUES CHARHON

Jean-Jacques Charhon

Executive Vice President and Chief Financial Officer

August 6, 2020

/s/ TAL DARMON

Chief Accounting Officer, Senior Vice President

and Global Corporate Controller

August 6, 2020

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 1A. Risk Factors