What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-25 compared with 2020-02-27 · 829 added, 1240 removed, 1365 unchanged (60% of the section changed)

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As discussed in Note 10 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

The adoption of the accounting standard for leases is also discussed below as a critical audit matter.

Basis for Opinions

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill and Indefinite-Lived Tradenames Impairment Assessments - Brazil Reporting Unit and the Tradename Associated with a Subsidiary in the Brazil Segment

As described in Notes 2 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $1.7 billion and tradenames balance was $1.1 billion as of December 31, 2019.

The goodwill associated with the Brazil reporting unit was $388 million, and a portion of the consolidated tradenames balance is associated with a subsidiary in the Brazil segment.

Management performs annual impairment tests of non-amortizable intangible assets, which consist of goodwill and indefinite-lived tradenames, as of October 1st each year or on an interim basis if events or changes in circumstances between annual tests indicate that the assets may be impaired.

Goodwill is impaired when the carrying amount of a reporting unit’s goodwill exceeds its implied fair value.

If management does not perform the qualitative assessment for a reporting unit or determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative two-step fair value-based test is performed.

In the first step, management estimates the fair value of each reporting unit utilizing a weighted combination of a discounted cash flow analysis that relies on historical data and internal estimates and a market multiples analysis.

The impairment test for indefinite-lived intangible assets generally requires a new determination of the fair value of the intangible asset using the relief-from-royalty method.

Significant assumptions used in estimating the fair value of each reporting unit include the revenue and profitability growth rates and the discount rate.

Significant assumptions used in estimating the fair value of indefinite-lived tradenames include the revenue growth rates, the discount rates, and the estimated royalty rates.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Brazil reporting unit and the indefinite-lived tradename impairment assessment associated with a subsidiary in the Brazil segment is a critical audit matter are (i) there was a high degree of auditor judgment and subjectivity involved in performing procedures relating to the fair value measurement of the Brazil reporting unit and the tradename associated with a subsidiary in the Brazil segment due to the significant amount of judgment by management when developing these estimates;

(ii) significant audit effort was necessary in performing procedures and evaluating audit evidence obtained relating to management’s significant assumptions, including the revenue and profitability growth rates and the discount rate for the fair value of the Brazil reporting unit, and the revenue growth rates, the discount rate, and the estimated royalty rate for the fair value of the tradename associated with a subsidiary in the Brazil segment;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Certain Reserves for Uncertain Tax Positions

As described in Notes 2 and 14 to the consolidated financial statements, the Company’s reserves for uncertain tax positions were $385.3 million as of December 31, 2020.

A tax position must meet a minimum probability threshold before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position and having full knowledge of all relevant information .

This involves the use of significant estimates and assumptions by management with respect to the potential outcome of positions taken on tax returns that may be reviewed by tax authorities.

The principal considerations for our determination that performing procedures relating to certain reserves for uncertain tax positions is a critical audit matter are (i) the significant judgment by management when determining certain reserves for uncertain tax positions, including a high degree of estimation uncertainty when measuring the reserves, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate management’s determination of certain reserves for uncertain tax positions, the technical merits of the tax positions, and the accurate measurement of the tax positions, (ii) the evaluation of audit evidence available to support certain reserves for the uncertain tax positions is complex and resulted in significant auditor judgment as the nature of the evidence is often highly subjective, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived tradenames impairment assessments, including controls over the valuation of the Brazil reporting unit and the tradename associated with a subsidiary in the Brazil segment.

These procedures also included, among others, testing management’s process for developing the fair value estimates;

evaluating the appropriateness of the discounted cash flow analysis and relief-from-royalty method;

testing the completeness, accuracy, and relevance of the underlying data used in the discounted cash flow analysis and relief-from-royalty method;

and evaluating the reasonableness of significant assumptions used by management in the discounted cash flow analysis and relief-from-royalty method, including the revenue and profitability growth rates, the discount rate, and the estimated royalty rate.

Evaluating management’s assumptions related to the revenue and profitability growth rates and the estimated royalty rate involved evaluating whether the assumptions used by management were reasonable considering the current and past performance of the reporting unit, consistency with external market data, and whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the discount rate in the discounted cash flow analysis used by management for developing the fair value of the Brazil reporting unit and the discount rate and the estimated royalty rate used by management in the relief-from-royalty method for developing the fair value measurement of the tradename associated with a subsidiary in the Brazil segment.

Adoption of the accounting standard on leases - Present value of operating lease payments

As described above and in Notes 2 and 11 to the consolidated financial statements, the Company adopted the new accounting standard on leases on January 1, 2019 and, as a result, the Company’s consolidated right-of-use assets, net and lease liabilities for operating leases were $862 million and $884 million, respectively, as of December 31, 2019.

For operating leases, right-of-use assets and lease liabilities are recognized at the commencement date of the lease based on the estimated present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, management uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The significant assumption used in estimating the present value of the lease payments is the incremental borrowing rate.

The principal considerations for our determination that performing procedures relating to the present value of operating lease payments upon adoption of the accounting standard on leases is a critical audit matter are there was significant judgment by management when determining the estimated present value of lease payments, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures to evaluate the incremental borrowing rate.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in the evaluation of the reasonableness of the incremental borrowing rate.

These procedures included testing the effectiveness of controls relating to the recognition and measurement of certain reserves for uncertain tax positions.

These procedures also included, among others (i) testing the information used in the calculation of certain reserves for uncertain tax positions, (ii) testing the calculation of certain reserves for uncertain tax positions, including management’s assessment of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained, as well as the likelihood of the possible estimated outcome, and (iii) testing the completeness of management’s assessment of possible outcomes of certain uncertain tax positions.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the measurement of certain of the Company’s reserves for uncertain tax positions, including evaluating the reasonableness of management’s assessment of whether certain tax positions are more-likely-than-not of being sustained and the amount of potential benefit to be realized, and the application of relevant tax laws.

Impairment Assessment - Laureate Tradename Intangible Asset

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s consolidated tradename balance was $225.6 million as of December 31, 2020, which includes the Laureate tradename of $74.5 million.

During the third quarter of 2020, the Company announced that it had completed a sale of its operations in Chile and that it had signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University.

Because of these events, management determined that the useful life of the Laureate tradename asset was no longer indefinite and tested the asset for impairment.

Management estimated the fair value of the tradename asset using the relief-from-royalty method.

As a result of the impairment test, management concluded that the estimated fair value of the Laureate tradename was less than its carrying value by approximately $320.0 million and recorded an impairment charge for that amount.

The significant assumptions used in estimating the fair value included:

(i) the estimates of revenue projections, including the period of those projections;

(ii) the discount rates;

and (iii) the estimated royalty rate.

The principal considerations for our determination that performing procedures relating to the impairment assessment for the Laureate tradename intangible asset is a critical audit matter are the significant judgment by management when determining that the useful life of the asset was no longer indefinite and determining the fair value of the tradename, which in turn led to a high

degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to estimates of revenue projections, including the period of those projections, and the estimated royalty rate.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s adoption of the accounting standard on leases, including controls over the estimated present value of lease payments.

These procedures also included, among others, testing the completeness, accuracy and relevance of the underlying data used in the estimated present value of lease payments;

and evaluating the appropriateness of the incremental borrowing rate used by management.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the incremental borrowing rate by developing an independent reasonable range of the incremental borrowing rate based on the financial information used by management and evaluating whether management’s estimate was within that reasonable range.

These procedures included testing the effectiveness of controls relating to management’s evaluation of triggering events and relief-from-royalty valuation of the Laureate tradename.

These procedures also included, among others, (i) testing management’s process for determining the fair value estimate of the tradename, (ii) evaluating the appropriateness of the relief-from-royalty method, (iii) testing the completeness and accuracy of underlying data used in the valuation, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the estimates of revenue projections, including the period of those projections, and the estimated royalty rate.

Evaluating management’s assumptions related to the estimates of revenue projections, including the period of those projections, involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Company’s institutions, (ii) the consistency with external market data, (iii) management’s planned future use of the tradename, and (iv) whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s relief-from-royalty method and evaluating the appropriateness of the estimated royalty rate assumption.

/s/ PricewaterhouseCoopers LLP

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For the years ended December 31, 2020 2019 2018

Revenues $ 1,024,917 $ 1,212,070 $ 1,144,574

Costs and expenses:

Direct costs 802,458 949,471 904,002

General and administrative expenses 199,790 226,331 267,364

Loss on impairment of assets 351,971 248 —

Operating income

Operating (loss) income ( 329,302 ) 36,020 ( 26,792 )

Interest income 2,169 3,294 2,814

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Loss on debt extinguishment ( 610 ) ( 22,601 ) ( 7,481 )

Gain on derivatives

Other income (expense), net

Foreign currency exchange (loss) gain, net

(Loss) gain on sales and disposals of subsidiaries, net

Income (loss) from continuing operations before income taxes and equity in net income (loss) of affiliates

Income tax (expense) benefit

Equity in net income (loss) of affiliates, net of tax

Income (loss) from continuing operations

Income from discontinued operations, net of tax expense of $17,539 for 2019, $48,771 for 2018 and $26,176 for 2017

Gain on sales of discontinued operations, net, including tax benefit of $33,472 for 2019, $3,466 for 2018 and $0 for 2017

(Loss) gain on derivatives ( 25,980 ) 8,300 88,476

Other (expense) income, net ( 2,420 ) 8,922 10,598

Foreign currency exchange gain (loss), net 13,474 ( 8,125 ) 695

Loss on disposals of subsidiaries, net ( 7,276 ) ( 20,429 ) —

Loss from continuing operations before income taxes and equity in net income of affiliates ( 450,839 ) ( 119,661 ) ( 120,121 )

Income tax benefit (expense) 130,069 ( 31,041 ) ( 71,196 )

Equity in net income of affiliates, net of tax 172 219 —

Loss from continuing operations ( 320,598 ) ( 150,483 ) ( 191,317 )

(Loss) income from discontinued operations, net of tax expense of $ 114,257 , $ 33,681 and $ 105,880 , respectively

( 298,104 ) 1,088,147 562,247

Net (loss) income ( 618,702 ) 937,664 370,930

Net loss (income) attributable to noncontrolling interests 5,371 820 ( 863 )

Net income attributable to Laureate Education, Inc.

Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity

Net (loss) income attributable to Laureate Education, Inc.

$ ( 613,331 ) $ 938,484 $ 370,067

Accretion of redeemable noncontrolling interests and equity and, for 2018, Series A convertible redeemable preferred stock $ 149 $ ( 208 ) $ ( 62,825 )

Gain upon conversion of Series A convertible redeemable preferred stock — — 74,110

Net income (loss) available to common stockholders

Basic earnings (loss) per share:

Income (loss) from continuing operations

Income from discontinued operations

Net (loss) income available to common stockholders $ ( 613,182 ) $ 938,276 $ 381,352

Basic earnings (loss) per share:

Diluted earnings (loss) per share:

Income (loss) from continuing operations

Income from discontinued operations

Loss from continuing operations $ ( 1.53 ) $ ( 0.68 ) $ ( 0.85 )

(Loss) income from discontinued operations ( 1.40 ) 4.91 2.64

Basic (loss) earnings per share $ ( 2.93 ) $ 4.23 $ 1.79

Diluted earnings (loss) per share:

Loss from continuing operations $ ( 1.53 ) $ ( 0.68 ) $ ( 0.91 )

(Loss) income from discontinued operations ( 1.40 ) 4.91 2.64

Diluted (loss) earnings per share $ ( 2.93 ) $ 4.23 $ 1.73

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

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For the years ended December 31, 2020 2019 2018

Net (loss) income $ ( 618,702 ) $ 937,664 $ 370,930

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax of $ 0 for all years

133,827 42,935 ( 200,006 )

Unrealized (loss) gain on derivative instruments, net of tax of $ 0 for all years

— ( 7,950 ) 13,709

Minimum pension liability adjustment, net of tax of $ 0 , $ 0 and $ 144 , respectively

( 1,200 ) 3,596 ( 350 )

Total other comprehensive income (loss) 132,627 38,581 ( 186,647 )

Comprehensive income

Comprehensive (loss) income ( 486,075 ) 976,245 184,283

Net comprehensive loss (income) attributable to noncontrolling interests 4,739 953 ( 1,355 )

Comprehensive income attributable to Laureate Education, Inc.

Comprehensive (loss) income attributable to Laureate Education, Inc.

$ ( 481,336 ) $ 977,198 $ 182,928

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

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IN THOUSANDS, except per share amounts

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Current assets:

Cash and cash equivalents (includes VIE amounts of $157,003 and $158,387, see Note 2)

Cash and cash equivalents $ 750,147 $ 61,576

Restricted cash 117,151 36,241

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Current assets held for sale 434,966 706,544

Total current assets (includes VIE amounts of $346,125 and $483,613, see Note 2)

Total current assets 1,443,786 916,066

Notes receivable, net 1,321 353

Property and equipment:

Land 126,228 135,813

Buildings 351,480 351,232

Furniture, equipment and software 494,079 494,713

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Land use rights, net 1,548 1,628

Other intangible assets:

Other intangible assets, net

Goodwill 574,832 606,483

Tradenames, net 225,573 562,137

Deferred costs, net 17,623 24,704

Deferred income taxes 130,567 49,422

Derivative instruments

Other assets 51,924 72,251

Long-term assets held for sale 1,482,469 3,100,985

Total assets (includes VIE amounts of $948,632 and $1,196,813, see Note 2)

Total assets $ 4,970,894 $ 6,496,423

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

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IN THOUSANDS, except per share amounts

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Liabilities and stockholders' equity

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Current liabilities held for sale 353,550 602,426

Total current liabilities (includes VIE amounts of $142,343 and $207,977, see Note 2)

Total current liabilities 804,555 1,045,055

Long-term operating leases, less current portion 474,507 516,979

Long-term debt and finance leases, less current portion 899,898 1,103,302

Due to shareholders of acquired companies, less current portion

Deferred compensation 13,425 12,744

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Long-term liabilities held for sale 348,706 752,467

Total liabilities (includes VIE amounts of $257,199 and $274,744, see Note 2)

Total liabilities 2,705,236 3,679,977

Redeemable noncontrolling interests and equity 1,724 12,295

Stockholders' equity:

Preferred stock, par value $0.001 per share – 49,889 shares authorized as of December 31, 2019 and December 31, 2018 respectively, no shares issued and outstanding as of December 31, 2019 and December 31, 2018

Class A common stock, par value $0.004 per share – 700,000 shares authorized, 119,575 shares issued and outstanding as of December 31, 2019 and 107,450 shares issued and outstanding as of December 31, 2018

Preferred stock, par value $ 0.001 per share – 49,889 shares authorized as of December 31, 2020 and December 31, 2019, no shares issued and outstanding as of December 31, 2020 and December 31, 2019

Class A common stock, par value $ 0.004 per share – 700,000 shares authorized, 137,162 shares issued and 115,119 shares outstanding as of December 31, 2020 and 135,583 shares issued and 119,575 outstanding as of December 31, 2019

Class B common stock, par value $ 0.004 per share – 175,000 shares authorized, 90,792 shares issued and outstanding as of December 31, 2020 and 90,831 shares issued and outstanding as of December 31, 2019

Additional paid-in capital 3,760,029 3,724,636

Retained earnings (accumulated deficit)

(Accumulated deficit) retained earnings ( 176,822 ) 436,509

Accumulated other comprehensive loss ( 941,986 ) ( 1,073,981 )

Treasury stock at cost ( 22,043 shares held at December 31, 2020 and 16,008 shares held at December 31, 2019)

( 365,316 ) ( 271,106 )

Total Laureate Education, Inc.

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Laureate Education, Inc.

Additional paid-in capital

(Accumulated deficit) retained earnings

Accumulated other comprehensive (loss) income

Non-controlling interests

Total stockholders' equity

Common Stock Class B

Common Stock Additional paid-in capital (Accumulated deficit) retained earnings Accumulated other comprehensive (loss) income Treasury stock at cost Non-controlling interests Total stockholders' equity

Shares Amount Shares Amount

Balance at December 31, 2017 55,052 $ 220 132,443 $ 530 $ 3,446,206 $ ( 946,236 ) $ ( 925,556 ) $ — $ 12,118 $ 1,587,282

Adoption of accounting standards — — — — — 45,250 — — — 45,250

Balance at January 1, 2018 55,052 220 132,443 530 3,446,206 ( 900,986 ) ( 925,556 ) — 12,118 1,632,532

Non-cash stock compensation — — — — 10,791 — — — — 10,791

Reclassification of Common stock into Class B common stock on January 31, 2017

Issuance of Class A common stock in initial public offering

Conversion of Class B shares to Class A shares 15,638 63 ( 15,638 ) ( 63 ) — — — — — —

Note exchange transaction

Vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 617 3 60 — ( 2,531 ) — — — — ( 2,528 )

Reclassification to equity upon expiration of put right on share-based awards

Dividends to noncontrolling interests

Distributions to noncontrolling interest holders

Distributions from noncontrolling interest holders — — — — — — — — 334 334

Change in noncontrolling interests — — — — ( 471 ) — — — ( 23,305 ) ( 23,776 )

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Accretion of Series A Preferred Stock — — — — ( 61,974 ) — — — — ( 61,974 )

Beneficial conversion feature for Series A Preferred Stock

Gain upon conversion of Series A Preferred Stock — — — — 74,110 — — — — 74,110

Reclassification of Series A Preferred Stock upon conversion 36,143 144 — — 237,957 — — — — 238,101

Reclassification of redeemable noncontrolling interests and equity — — — — — — — — ( 635 ) ( 635 )

Net income — — — — — 370,067 — — 863 370,930

Foreign currency translation adjustment, net of tax of $ 0

— — — — — — ( 200,498 ) — 492 ( 200,006 )

Unrealized gain on derivatives, net of tax of $ 0

— — — — — — 13,709 — — 13,709

Minimum pension liability adjustment, net of tax of $ 144

Balance at December 31, 2017

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

LAUREATE EDUCATION, INC.

AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (continued)

Laureate Education, Inc.

Additional paid-in capital

(Accumulated deficit) retained earnings

Accumulated other comprehensive (loss) income

Treasury stock at cost

Non-controlling interests

Total stockholders' equity

— — — — — — ( 350 ) — — ( 350 )

Balance at December 31, 2018 107,450 $ 430 116,865 $ 467 $ 3,703,796 $ ( 530,919 ) $ ( 1,112,695 ) $ — $ ( 10,133 ) $ 2,050,946

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Conversion of Class B shares to Class A shares 26,034 104 ( 26,034 ) ( 104 ) — — — — — —

Vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding

Distributions from noncontrolling interest holders

Purchase of treasury stock at cost ( 16,008 ) — — — — — — ( 271,106 ) — ( 271,106 )

Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 2,099 8 — — 11,754 — — — — 11,762

Distributions to noncontrolling interest holders — — — — — — — — ( 1,356 ) ( 1,356 )

Change in noncontrolling interests — — — — ( 3,700 ) — — — — ( 3,700 )

Accretion of redeemable noncontrolling interests and equity — — — — ( 208 ) — — — — ( 208 )

Accretion of Series A Preferred Stock

Gain upon conversion of Series A Preferred Stock

Reclassification of Series A Preferred Stock upon conversion

Reclassification of redeemable noncontrolling interests and equity — — — — — — — — ( 370 ) ( 370 )

Net income — — — — — 938,484 — — ( 820 ) 937,664

Foreign currency translation adjustment, net of tax of $ 0

Unrealized gain on derivatives, net of tax of $0

— — — — — — 43,068 — ( 133 ) 42,935

Unrealized loss on derivatives, net of tax of $ 0

— — — — — — ( 7,950 ) — — ( 7,950 )

Minimum pension liability adjustment, net of tax of $ 0

— — — — — — 3,596 — — 3,596

Balance at December 31, 2019 119,575 $ 542 90,831 $ 363 $ 3,724,636 $ 436,509 $ ( 1,073,981 ) $ ( 271,106 ) $ ( 12,812 ) $ 2,804,151

Adoption of accounting standards

Balance at January 1, 2019

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

LAUREATE EDUCATION, INC.

AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (continued)

Laureate Education, Inc.

Common Stock Class B

Shares Amount Shares Amount

Balance at December 31, 2019 119,575 $ 542 90,831 $ 363 $ 3,724,636 $ 436,509 $ ( 1,073,981 ) $ ( 271,106 ) $ ( 12,812 ) $ 2,804,151

Non-cash stock compensation — — — — 13,298 — — — — 13,298

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Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 1,540 6 — — 24,556 — — — — 24,562

Distributions to noncontrolling interest holders

Change in noncontrolling interests — — — — ( 2,610 ) — — — 3,471 861

1 unchanged sentence

Reclassification of redeemable noncontrolling interests and equity — — — — — — — — 1,198 1,198

Net loss — — — — — ( 613,331 ) — — ( 5,371 ) ( 618,702 )

Foreign currency translation adjustment, net of tax of $ 0

Unrealized loss on derivatives, net of tax of $0

— — — — — — 133,195 — 632 133,827

Minimum pension liability adjustment, net of tax of $ 0

— — — — — — ( 1,200 ) — — ( 1,200 )

Balance at December 31, 2020 115,119 $ 548 90,792 $ 363 $ 3,760,029 $ ( 176,822 ) $ ( 941,986 ) $ ( 365,316 ) $ ( 12,882 ) $ 2,263,934

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Cash flows from operating activities

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Net (loss) income $ ( 618,702 ) $ 937,664 $ 370,930

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization expense 143,516 193,356 239,998

Amortization of operating lease right-of-use assets 80,203 122,673 —

1 unchanged sentence

Gain on sales and disposal of subsidiaries and property and equipment, net ( 22,756 ) ( 753,519 ) ( 292,108 )

Gain on derivative instruments

Loss (gain) on derivative instruments 25,980 ( 7,438 ) ( 89,143 )

(Payments for) proceeds from settlement of derivative contracts ( 626 ) ( 8,772 ) 14,117

6 unchanged sentences

Unrealized foreign currency exchange loss 26,344 29,186 37,796

Non-cash loss (gain) from non-income tax contingencies

Non-cash loss from non-income tax contingencies 3,059 9,075 6,839

Other, net 408 ( 5,341 ) ( 10,297 )

Changes in operating assets and liabilities:

Receivables ( 323,036 ) ( 163,202 ) ( 83,316 )

Prepaid expenses and other assets ( 28,504 ) ( 42,047 ) ( 39,347 )

10 unchanged sentences

Business acquisitions, net of cash acquired — ( 1,205 ) ( 17,019 )

Payments from (to) related parties and investments in affiliates

Payments (to) from related parties and investments in affiliates ( 7 ) 84 ( 2,778 )

Proceeds from sale of investment — 11,473 —

Net cash provided by (used in) investing activities

Net cash provided by investing activities 587,400 1,116,760 115,494

Cash flows from financing activities

3 unchanged sentences

Payments to purchase noncontrolling interests ( 13,716 ) ( 5,761 ) ( 127 )

Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs

Payment of dividends on Series A Preferred Stock and to noncontrolling interests — — ( 11,103 )

Proceeds from initial public offering, net of issuance costs

Proceeds from exercise of stock options 25,716 14,007 —

1 unchanged sentence

Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options ( 1,154 ) ( 2,245 ) ( 2,528 )

Payments of debt issuance costs and redemption and call premiums for debt modification

Noncontrolling interest holder's loan to subsidiaries

Payments of debt issuance costs ( 779 ) ( 9,091 ) ( 587 )

Distributions (to) from noncontrolling interest holders ( 609 ) ( 2,026 ) 311

Net cash (used in) provided by financing activities

Net cash used in financing activities ( 272,716 ) ( 1,673,977 ) ( 410,129 )

Effects of exchange rate changes on Cash and cash equivalents and Restricted cash ( 546 ) 5,070 8,998

10 unchanged sentences

Laureate Education, Inc.

and subsidiaries (hereinafter Laureate, we, us, our, or the Company) provide higher education programs and services to students through an international portfolio of licensed universities and higher education institutions (institutions).

and subsidiaries (hereinafter Laureate, we, us, our, or the Company) provide higher education programs and services to students through licensed universities and higher education institutions (institutions).

Laureate's programs are provided through institutions that are campus-based and internet-based, or through electronically distributed educational programs (online).

On October 1, 2015, we redomiciled in Delaware as a public benefit corporation as a demonstration of our long-term commitment to our mission to benefit our students and society.

In response to the COVID-19 pandemic, we have temporarily transitioned the educational delivery method at all of our campus-based institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside the traditional classroom setting.

We are domiciled in Delaware as a public benefit corporation, a demonstration of our long-term commitment to our mission to benefit our students and society.

The Company completed its initial public offering (IPO) on February 6, 2017 and its shares are listed on the Nasdaq Global Select Market under the symbol ‘‘LAUR.’’

Discontinued Operations

On August 9, 2018 , the Company announced the divestiture of additional subsidiaries located in Europe, Asia and Central America, which are included in the Rest of World, Andean, and Central America & U.S.

Campuses segments.

Previously, the Company had announced the divestiture of certain subsidiaries in the Rest of World and Central America & U.S.

Campuses segments.

After completing all of these announced divestitures, the Company’s remaining principal markets would be Brazil, Chile, Mexico and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand.

In 2017 and 2018, the Company announced the divestiture of certain subsidiaries located in Europe, Asia and Central America, which were included in the following segments:

Peru (formerly Andean), Central America (formerly Central America & U.S.

Campuses), and Rest of World.

The goal of the divestitures was to create a more focused and simplified business model and generate proceeds to be used for further repayment of long-term debt.

This represented a strategic shift that had a major effect on the Company’s operations and financial results.

Accordingly, all of the divestitures that were part of this strategic shift, including the divestitures announced on August 9, 2018 and those announced previously, as well as the Company's operations in the Kingdom of Saudi Arabia that were managed under a contract that expired on August 31, 2019 and was not renewed, are accounted for as discontinued operations for all periods presented in accordance with Accounting Standards Codification (ASC) 205-20, ‘‘Discontinued Operations’’ (ASC 205).

See Note 4 , Discontinued Operations and Assets Held for Sale , for more information.

Accordingly, all of the divestitures that were part of this strategic shift, as well as the Company's operations in the Kingdom of Saudi Arabia that were managed under a contract that expired on August 31, 2019 and was not renewed, were accounted for as discontinued operations for all periods presented in accordance with Accounting Standards Codification (ASC) 205-20, “Discontinued Operations” (ASC 205).

On January 27, 2020, we announced that our board of directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value.

As a result of these efforts to explore strategic alternatives, d uring the third quarter of 2020, the Company announced that it had completed a sale of its operations in Chile and had signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University, its fully online higher education institution in the United States.

This also represented a strategic shift that had a major effect on the Company’s operations and financial results.

As such, Chile, Brazil, Australia and New Zealand, and Walden also have been accounted for as discontinued operations for all periods presented in accordance with ASC 205.

The sale of Australia and New Zealand was completed on November 3, 2020 .

For Laureate’s institutions in Mexico and Peru, the board decided after a thorough evaluation of all strategic options, including a potential sale, to continue to operate these assets under Laureate management.

Accordingly, Mexico and Peru represent our Continuing Operations.

The decision to focus on a regional operating model in Mexico and Peru at this time does not preclude further engagement with potential buyers for those businesses.

See Note 4, Discontinued Operations and Assets Held for Sale, and Note 6, Dispositions, for more information.

Unless indicated otherwise, the information in the footnotes to the Consolidated Financial Statements relates to Continuing Operations.

Exploration of Strategic Alternatives

As discussed in Note 25 , Subsequent Events , on January 27, 2020 , Laureate announced that its Board of Directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value.

As part of this process, the Company will evaluate all potential options for its remaining businesses, including sales, spin-offs or business combinations.

There can be no assurance as to the outcome of this process, including whether it will result in the completion of any transaction, as to the values that may be realized from any potential transaction or as to how long the review process will take.

Significant Accounting Policies

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Principles of Consolidation and Investments in Affiliates

Our Consolidated Financial Statements include all accounts of Laureate, our majority-owned subsidiaries, and educational institutions that are part of our network and, although not owned by Laureate, are variable interest entities (VIEs) pursuant to ASC Topic 810-10, "Consolidation." As of December 31, 2019 , the Laureate network includes five VIE institutions in three countries.

Of these five institutions, four are included in continuing operations and one is a discontinued operation.

Laureate has determined it is the “primary beneficiary” of these VIEs, as such term is defined in ASC 810-10-20, and has consolidated the financial results of operations, assets and liabilities, and cash flows of these VIEs in the Company's Consolidated Financial Statements.

Our Consolidated Financial Statements include all accounts of Laureate, our majority-owned subsidiaries, and an educational institution that is part of our network and, although not owned by Laureate, is a variable interest entity (VIE) pursuant to ASC Topic 810-10, "Consolidation." As of December 31, 2020, the Laureate network includes one VIE institution in Honduras, which is a discontinued operation.

Laureate has determined it is the “primary beneficiary” of this VIE, as such term is defined

in ASC 810-10-20, and has consolidated the financial results of operations, assets and liabilities, and cash flows of this VIE in the Company's Consolidated Financial Statements.

Intercompany accounts and transactions have been eliminated in consolidation.

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We recognize noncontrolling interest holders’ share of equity and net income or loss separately in Noncontrolling interests in the Consolidated Balance Sheets and Net loss (income) attributable to noncontrolling interests in the Consolidated Statements of Operations.

For the VIEs in our network, we generally do not recognize a noncontrolling interest.

A noncontrolling interest is only recognized when a VIE's economics are shared with a third party (e.g., when the transferor of the control of the VIE retained a portion of the economics associated with it).

The Variable Interest Entity (VIE) Arrangements

Laureate consolidates in its financial statements certain internationally based educational organizations that do not have shares or other equity ownership interests.

Although these educational organizations may be considered not-for-profit entities in their home countries and they are operated in compliance with their respective not-for-profit legal regimes, we believe they do not meet the definition of a not-for-profit entity under GAAP, and therefore we treat them as “for-profit” entities for accounting purposes.

These entities generally cannot declare dividends or distribute their net assets to the entities that control them.

Under ASC 810-10, “Consolidation,” we have determined that these institutions are VIEs and that Laureate is the primary beneficiary of these VIEs because we have, as further described herein:

(1) the power to direct the activities of the VIEs that most significantly affect their educational and economic performance and (2) the right to receive economic benefits from contractual and other arrangements with the VIEs that could potentially be significant to the VIEs.

We account for the acquisition of the right to control a VIE in accordance with ASC 805, “Business Combinations.”

As with all of our educational institutions, the VIE institutions' primary source of income is tuition fees paid by students, for which the students receive educational services and goods that are proportionate to the prices charged.

Laureate maintains control of these VIEs through our rights to designate a majority of the governing entities' board members, through which we have the legal ability to direct the activities of the entities.

Laureate maintains a variable interest in these VIEs through mutual contractual arrangements at market rates and terms that provide them with necessary products and services, and/or intellectual property, and has the ability to enter into additional such contractual arrangements at market rates and terms.

We also have the ability to transfer our rights to govern these VIEs, or the entities that possess those rights, to other parties, which could yield a return if and when these rights are transferred.

We generally do not have legal entitlement to distribute the net assets of the VIEs.

Generally, in the event of liquidation or the sale of the net assets of the VIEs, the net proceeds can only be transferred either to another VIE institution with similar purposes or to the government.

In the unlikely case of liquidation or a sale of the net assets of the VIE, we may be able to retain the residual value by naming another Laureate-controlled VIE resident in the same jurisdiction as the recipient, if one exists;

however, we generally cannot name a for-profit entity as the recipient.

Moreover, because the institution generally would be required to provide for the continued education of its students, liquidation would not be a likely course of action and would be unlikely to result in significant residual assets available for distribution.

However, we operate our VIEs as going concern enterprises, maintain control in perpetuity, and have the ability to provide additional contractual arrangements for educational and other services priced at up to market rates with Laureate-controlled service companies.

Typically, we are not legally obligated to make additional investments in the VIE institutions.

Laureate for-profit entities provide necessary products and services, and/or intellectual property, to all institutions in the Laureate International Universities network, including the VIE institutions, through contractual arrangements at market rates and terms, which are accretive to Laureate.

We periodically modify the rates we charge under these arrangements so that they are priced at or below fair market value and to add additional services.

If it is determined that contractual arrangements with any institution are not on market terms, it could have an adverse regulatory impact on such institution.

We believe that these arrangements improve the quality of the academic curriculum and the students' educational experience.

There are currently four types of contractual arrangements:

(i) intellectual property (IP) royalty arrangements;

(ii) network fee arrangements;

(iii) management service arrangements;

and (iv) lease arrangements.

Under the IP royalty arrangements, institutions in the Laureate International Universities network pay to Laureate royalty payments for the use of Laureate's tradename and best practice policies and procedures.

Institutions in the Laureate International Universities network gain access to other network resources, including academic content, support with curriculum design, online programs, professional development, student exchange and access to dual degree programs, through network fee arrangements whereby the institutions pay stipulated fees to Laureate for such access.

Institutions in the Laureate International Universities network contract with Laureate and pay fees under management services agreements for the provision of support and managerial services including access to management, legal, tax, finance, accounting, treasury and other services, which in some cases Laureate provides through shared service arrangements in certain jurisdictions.

Laureate for-profit entities own various campus real estate properties and have entered into long-term lease contracts with the respective institutions in the Laureate International Universities network, whereby they pay market-based rents for the use of the properties in the conduct of their educational operations.

Revenues recognized by Laureate's for-profit entities from these contractual arrangements with our consolidated VIEs, including those in continuing operations and discontinued operations, were $ 39,005 , $ 100,227 and $ 123,237 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

These revenues are eliminated in consolidation.

Under our accounting policy, we allocate all of the income or losses of these VIEs to Laureate unless there is a noncontrolling interest where the economics of the VIE are shared with a third party.

The income or losses of these VIEs allocated to Laureate represent the earnings after deducting charges related to contractual arrangements with our for-profit entities as described above.

We believe that the income remaining at the VIEs after these charges accretes value to our rights to control these entities.

Laureate's VIEs are generally exempt from income taxes.

As a result, the VIEs generally do not record deferred tax assets or liabilities or recognize any income tax expense in the Consolidated Financial Statements.

No deferred taxes are recognized by the for-profit service companies for the remaining income in these VIEs, as the legal status of these entities generally prevents them from declaring dividends or making distributions to their sponsors.

However, these for-profit service companies record income taxes related to revenues from their contractual arrangements with these VIEs.

Risks in relation to the VIEs

We believe that all of the VIE institutions in the Laureate network are operated in full compliance with local law and that the contractual arrangements with the VIEs are legally enforceable;

however, these VIEs are subject to regulation by various agencies based on the requirements of local jurisdictions.

These agencies, as well as local legislative bodies, review and update laws and regulations as they deem necessary or appropriate.

We cannot predict the form of any laws that may be enacted, or regulations that ultimately may be adopted in the future, or what effects they might have on our business, financial condition, results of operations and cash flows.

If local laws or regulations were to change, if the VIEs were found to be in violation of existing local laws or regulations, or if the regulators were to question the financial sustainability of the VIEs and/or whether the contractual arrangements were at fair value, local government agencies could, among other actions:

revoke the business licenses and/or accreditations of the VIE institutions;

void or restrict related-party transactions, such as the contractual arrangements between Laureate and the VIE institutions;

impose fines that significantly impact business performance or other requirements with which the VIEs may not be able to comply;

require Laureate to change the VIEs' governance structures, such that Laureate would no longer maintain control of the activities of the VIEs;

disallow a transfer of our rights to govern these VIEs, or the entities that possess those rights, to a third party for consideration.

Laureate's ability to conduct our business would be negatively affected if local governments were to carry out any of the aforementioned or other similar actions.

In any such case, Laureate may no longer be able to consolidate the VIEs.

The VIEs in Brazil and Mexico include several not-for-profit foundations that had insignificant revenues and operating expenses.

Selected Consolidated Statements of Operations information for VIEs that are included in continuing operations was as follows, net of the charges related to the above-described contractual arrangements:

For the years ended December 31,

Selected Statements of Operations information:

Revenues, by segment:

Depreciation and amortization

Operating income (loss), by segment:

Operating income (loss)

Net income attributable to Laureate Education, Inc.

Included in 2018 and 2017 net income for the VIEs in the table above is non-operating investment income that was recorded by three of the Chilean institutions relating to investments that these institutions had in a for-profit, education-related real estate subsidiary of Laureate in Chile.

This non-operating investment income, which eliminated in consolidation, totaled $ 14,331 and $ 11,696 for the years ended December 31, 2018 and 2017 , respectively.

Income attributable to Laureate Education, Inc.

related to VIEs that are included in discontinued operations totaled $ 9,577 , $ 86,887 and $ 30,145 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

The following table reconciles the Net income attributable to Laureate Education, Inc.

as presented in the table above, to the amounts in our Consolidated Statements of Operations:

For the years ended December 31,

Net income (loss) attributable to Laureate Education, Inc.:

Variable interest entities

Other operations including discontinued operations

Corporate and eliminations

Net income attributable to Laureate Education, Inc.

The following table presents selected assets and liabilities of the consolidated VIEs.

Except for Goodwill, the assets in the table below include the assets that can be used only to settle the obligations for the VIEs.

The liabilities in the table are liabilities for which the creditors of the VIEs do not have recourse to the general credit of Laureate.

December 31, 2019

December 31, 2018

Balance Sheets data:

Cash and cash equivalents

Current assets held for sale

Other current assets

Total current assets

Other intangible assets, net

Operating lease right-of-use assets, net

Long-term assets held for sale

Other long-term assets

Current liabilities held for sale

Other current liabilities

Long-term operating leases, less current portion

Long-term liabilities held for sale

Long-term debt and other long-term liabilities

Total liabilities

Total stockholders' equity

Total stockholders' equity attributable to Laureate Education, Inc.

The amounts classified as held-for-sale assets and liabilities at December 31, 2019 in the table above relate to a VIE that is included in our Central America & U.S.

Campuses segment.

The amounts classified as held-for-sale assets and liabilities at December 31, 2018 in the table above relate to VIEs that were included in our Rest of World, Andean and Central America & U.S.

Campuses segments.

Refer to Note 4 , Discontinued Operations and Assets Held for Sale , for further discussion.

The VIEs' cash balances are generally required to be used only for the benefit of the operations of these VIEs.

Chile - Higher Education Law

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.

These exceptions include the provision of services that are educational in nature or essential for the university’s purposes.

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 the

Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law.

We do not believe that the New Law will change our relationship with our two technical-vocational institutions in Chile that are for-profit entities.

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.

When Laureate exercises significant influence over an affiliated entity, but does not control the entity, we account for our investments using the equity method of accounting.

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Under the equity method of accounting, Laureate records the proportionate share of these investments in Other assets in the Consolidated Balance Sheets.

Our proportionate share of income or loss related to these investments is recorded in Equity in net income (loss) of affiliates, net of tax , in the Consolidated Statements of Operations.

Our proportionate share of income or loss related to these investments is recorded in Equity in net income of affiliates, net of tax, in the Consolidated Statements of Operations.

Business Combinations

Effective January 1, 2009, Laureate adopted the accounting guidance for business combinations as prescribed by ASC 805, “Business Combinations.” When we complete a business combination, all tangible and identifiable intangible assets acquired and all liabilities assumed are recorded at fair value.

Laureate accounts for business combinations as prescribed by ASC 805, “Business Combinations.” When we complete a business combination, all tangible and identifiable intangible assets acquired and all liabilities assumed are recorded at fair value.

Any excess purchase price is recorded as goodwill.

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Laureate generally obtains indemnification from the sellers of the higher education institutions upon acquisition for various contingent liabilities that may arise and are related to pre-acquisition events in order to protect itself from economic losses arising from such exposures.

Prior to January 1, 2009, we did not record indemnification assets related to any liabilities recorded as part of the purchase price allocation.

Instead, an indemnification asset was recorded when the seller was obligated to make a payment under the indemnification and the amount was determined to be reasonably assured of collection.

In cases in which the contingent liability was extinguished for an amount less than originally established or the related statute of limitations lapses such that the contingent amount was no longer required to be paid, the remaining liability was reversed, and any difference between the liability's carrying value and settlement amount was recognized in our Consolidated Statements of Operations.

For acquisitions consummated on or after January 1, 2009, we recognize an indemnification asset at the same time and on the same basis as the related indemnified item, subject to any contractual limitations and to the extent that collection is reasonably assured, in accordance with ASC 805.

At the date of acquisition, we recognize an indemnification asset at the same time and on the same basis as the related indemnified item, subject to any contractual limitations and to the extent that collection is reasonably assured, in accordance with ASC 805.

When indemnified, subsequent changes in the indemnified item are offset by changes in the indemnification asset.

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Changes in the principal portion of non-income tax contingencies, as well as changes in any related indemnification asset, are included in Operating income.

Redeemable Noncontrolling Interests and Equity

In certain cases, Laureate initially purchases a majority ownership interest in a company and uses various put and call arrangements with the noncontrolling interest holders that require or enable us to purchase all or a portion of the remaining minority ownership

at a later date.

The nature of these Minority Put Arrangements and our accounting for the redeemable noncontrolling interests are discussed below.

Minority Put Arrangements

Minority Put Arrangements give noncontrolling interest holders the right to require Laureate to purchase their shares (Put option).

The Put option price is generally established by multiplying an agreed-upon earnings measurement of the acquired company by a negotiated factor within a specified time frame.

The future earnings measurement is based on an agreed-upon set of rules that are not necessarily consistent with GAAP, which we refer to as “non-GAAP earnings.”

Laureate accounts for all of these Minority Put Arrangements as temporary equity in an account presented between liabilities and equity called Redeemable noncontrolling interests and equity on the Consolidated Balance Sheets.

This classification is appropriate because the instruments are contingently redeemable based on events outside Laureate’s control.

This accounting treatment is in accordance with ASC 480-10-S99, “Distinguishing Liabilities from Equity.”

Redeemable noncontrolling interests are accreted to their redemption value (Put value) over the period from the date of issuance to the first date on which the Put option is exercisable.

In a computation of earnings per share, the accretion of redeemable noncontrolling interests to their redemption value would be a reduction of earnings available to common stockholders.

Foreign Currency Translation and Transaction Gains and Losses

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Our subsidiaries’ financial statements are maintained in their functional currencies.

The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business.

The functional currency of each of our foreign

subsidiaries is the currency of the economic environment in which the subsidiary primarily does business.

Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements.

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Restricted Cash

Laureate’s United States institutions participate in the United States Department of Education (DOE) Title IV student financing assistance lending programs (Title IV programs).

Restricted cash includes cash equivalents held to collateralize standby letters of credit in favor of the DOE.

Letters of credit are required by the DOE in order to allow our United States institutions to participate in the Title IV program.

In addition, Laureate may at times have restricted cash in escrow pending potential acquisition transactions, hold a United States deposit for a letter of credit in lieu of a surety bond, or otherwise have cash that is not immediately available for use in current operations.

Restricted cash includes cash equivalents held to collateralize standby letters of credit.

In addition, Laureate may at times have restricted cash in escrow, hold a United States deposit for a letter of credit in lieu of a surety bond, or otherwise have cash that is not immediately available for use in current operations.

Laureate’s United States institution, Walden University (Walden), participates in the United States Department of Education (DOE) Title IV student financing assistance lending programs (Title IV programs).

A letter of credit is required by the DOE in order to allow Walden to participate in the Title IV program.

As of December 31, 2020, the restricted cash used to collateralize this letter of credit was held by a corporate entity.

As of December 31, 2019, the restricted cash used to collateralize the letter of credit was primarily held by Walden.

Because Walden is classified as a discontinued operation, its restricted cash balances were included in Current assets held for sale on the Consolidated Balance Sheets.

Financial Instruments

Laureate’s financial instruments consist of cash and cash equivalents, restricted cash, accounts and notes receivable, other receivables, accounts payable, amounts due to shareholders of acquired companies, derivative instruments, debt, operating and

finance lease obligations, and redeemable noncontrolling interests and equity.

Laureate’s financial instruments consist of cash and cash equivalents, restricted cash, accounts and notes receivable, other receivables, accounts payable, derivative instruments, debt, and operating and finance lease obligations.

The fair value of these financial instruments approximates their carrying amounts reported in the Consolidated Balance Sheets with the exception of debt, as discussed in Note 9, Debt.

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Our accounts receivable are not concentrated with any one significant customer.

Our United States institutions participate in the DOE Title IV program and certain Chilean institutions in the Laureate network participate in a government-sponsored student financing program known as the Crédito con Aval del Estado, the CAE Program.

In Brazil, our institutions participate in Fundo de Financiamento ao Estudante do Ensino Superior (FIES), a government-sponsored education subsidy program.

During the course of the year, Laureate could have material receivables related to Title IV, the CAE Program and FIES.

Accounts and Notes Receivable

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These transactions were deemed sales of receivables and the receivables were derecognized from our Consolidated Balance Sheets.

Certain Chilean institutions in the Laureate network also participate in the CAE Program.

In this program, these institutions provide guarantees to third-party financing institutions for tuition loans made to qualifying students.

Refer to Note 12 , Commitments and Contingencies , for further discussion of this program.

Allowance for Doubtful Accounts

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charges to bad debt expense 44,707 20,324 23,107

charges to other accounts (a)

Deductions (b)

Deductions (a)

( 28,478 ) ( 3,350 ) ( 18,792 )

Balance at end of period $ 76,694 $ 60,465 $ 43,491

(a) Charges to other accounts includes reclassifications.

(b) Deductions includes accounts receivable written off against the allowance (net of recoveries), reclassifications, and foreign currency translation.

(a) Deductions include accounts receivable written off against the allowance (net of recoveries), reclassifications, and foreign currency translation.

The beginning and ending balances of the Allowance for doubtful accounts include the current portion, as shown on the face of Consolidated Balance Sheets, in addition to the noncurrent portion that is included in Notes receivable, net on the Consolidated Balance Sheets.

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We record property and equipment at cost less accumulated depreciation and amortization.

Software that is developed for internal use is classified within the line item titled Furniture, equipment and software in our Consolidated Balance

Software that is developed for internal use is classified within the line item titled Furniture, equipment and software in our Consolidated Balance Sheets.

Repairs and maintenance costs are expensed as incurred.

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Depreciation and amortization periods are as follows:

Furniture, equipment and software

Leasehold improvements

Land Use Rights

Certain of our institutions have obtained land use rights for certain time periods from government authorities.

Land use rights allow us to use the land to build our campus facilities.

Upon expiry of a land use right, it will either be renewed or the land will be returned to the government authority.

Land use rights are stated at cost less accumulated amortization and any recognized impairment loss.

Amortization is provided on a straight-line basis over the respective term of the land use right agreement, and is recorded as rent expense within Direct costs in our Consolidated Statements of Operations.

Buildings 10 - 50 years

Furniture, equipment and software 2 - 10 years

Leasehold improvements 2 - 25 years

Direct and Deferred Costs

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Goodwill is evaluated annually as of October 1st each year for impairment at the reporting unit level, in accordance with ASC 350, “Intangibles - Goodwill and Other.” We also evaluate goodwill for impairment on an interim basis if events or changes in circumstances between annual tests indicate that the asset may be impaired.

For example, during the second quarter of 2020, we recorded an impairment of the goodwill that was part of the Chile reporting unit, as disclosed in Note 4, Discontinued Operations and Assets Held for Sale.

Goodwill is impaired when the carrying amount of a reporting unit’s goodwill exceeds its implied fair value.

A reporting unit is defined as a component of an operating segment for which discrete financial information is available and regularly reviewed by management of the segment.

We have not made material changes to the methodology used to assess impairment loss during the past three fiscal years.

We have the option of first performing a qualitative assessment (i.e., step zero) before calculating the fair value of the reporting unit (i.e., step one of the two-step fair value-based impairment test).

If we determine on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test is required.

If we do not perform the qualitative assessment for a reporting unit or determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative two-step fair value-based test is performed.

In the first step, we estimate the fair value of each reporting unit, utilizing a weighted combination of a discounted cash flow analysis and a market multiples analysis.

If the recorded net assets of the reporting unit are less than the reporting unit’s estimated fair value, then there is no goodwill deemed to be impaired.

If the recorded net assets of the reporting unit exceed its estimated fair value, then goodwill is potentially impaired and we perform the second step.

In the second step, we calculate the implied fair value of goodwill by deducting the estimated fair value of all tangible and identifiable intangible net assets of the reporting unit from the estimated fair value of the reporting unit.

If the recorded amount of goodwill exceeds this implied fair value, the difference is recognized as a loss on impairment of assets in the consolidated statements of operations.

Our valuation approach utilizes a weighted combination of a discounted cash flow analysis and a market multiples analysis.

On January 1, 2020, the Company adopted Accounting Standards Update (ASU) No.

2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Accounting for Goodwill Impairment.

This ASU requires entities to calculate goodwill impairment as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Under the updated guidance, the Company continues to have the option of first performing a qualitative goodwill impairment assessment (i.e., step zero) in order to determine if the quantitative impairment test is necessary.

The requirement to perform a qualitative assessment for a reporting unit with a zero or negative carrying amount is eliminated.

Based on the qualitative assessment, if we determine that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is not required.

We estimate the fair value of each reporting unit, and, if the carrying amount of the reporting unit is less than the reporting unit’s estimated fair value, then there is no goodwill impairment.

If the carrying amount of the reporting unit exceeds its estimated fair value, then goodwill is impaired and the difference between the reporting unit's carrying amount and its fair value is recognized as a loss on impairment of assets in the consolidated statements of operations.

We completed our annual impairment testing, and no impairments of goodwill were identified.

Our valuation approach to estimate the fair value of a reporting unit utilizes a weighted combination of a discounted cash flow analysis and a market multiples analysis.

The discounted cash flow analysis relies on historical data and internal estimates, which are developed as a part of our long-range plan process, and includes an estimate of terminal value based on these expected cash flows using the generally accepted Gordon Dividend Growth formula, which derives a valuation using an assumed perpetual annuity based on the reporting unit’s residual cash flows.

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The Company does not believe accreditations have significant value on their own due to the fact that they are neither exclusive nor scarce, and the direct costs associated with obtaining accreditations are not material.

Other intangible assets also include the Laureate tradename, which during the third quarter of 2020 was determined to no longer have an indefinite life and is being amortized over a five-year useful life.

Indefinite-lived tradenames are evaluated annually as of October 1st each year for impairment as well as on an interim basis if events or changes in circumstances between annual tests indicate that the asset may be impaired.

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and (3) the estimated royalty rates.

Other intangible assets on the Consolidated Balance Sheets also include intangible assets with finite useful lives such as acquired student rosters and non-compete agreements.

We use the income approach to establish the asset values of these intangible assets.

The cost of finite-lived intangible assets is amortized on a straight-line basis over the intangible assets’ estimated useful lives.

Long-lived Assets

Long-lived assets, including finite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable.

These events or changes in circumstances may include, but are not limited to, a significant deterioration of operating results, a change in regulatory environment, changes in business plans, or adverse changes in anticipated future cash flows.

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We do not engage in speculative or leveraged transactions, nor do we hold or issue derivatives for trading purposes.

Laureate reports all derivatives on our Consolidated Balance Sheets at fair value, including any identified embedded derivatives.

Laureate reports all derivatives

on our Consolidated Balance Sheets at fair value, including any identified embedded derivatives.

Realized and unrealized gains and/or losses resulting from derivatives are recognized in our Consolidated Statements of Operations, unless designated and effective as a hedge.

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This involves the use of significant estimates and assumptions by management with respect to the potential outcome of positions taken on tax returns that may be reviewed by tax authorities.

We earn a significant portion of our income from subsidiaries located in countries outside the United States.

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Contingencies

Laureate accrues for contingent obligations when it is probable that a liability has been incurred and the amount or range of amounts

is reasonably estimable.

Laureate accrues for contingent obligations when it is probable that a liability has been incurred and the amount or range of amounts is reasonably estimable.

As new facts become known to management, the assumptions related to a contingency are reviewed and adjustments are made, as necessary.

Any legal costs incurred related to contingencies are expensed as incurred.

Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update (ASU) No.

The outbreak of COVID-19 has caused domestic and global disruption in operations for institutions of higher education.

The long-term effect to the Company of the COVID-19 pandemic depends on numerous factors, including, but not limited to, the effect on student enrollment, tuition pricing, and collections in future periods, which cannot be fully quantified at this time.

As of December 31, 2020 and through the date of this Form 10-K, the Company evaluated its accounting estimates that require consideration of forecasted financial information, based on current information reasonably available to us.

The forecast also includes certain estimates and assumptions around macroeconomic conditions and the timing of campuses reopening.

While this evaluation did not result in a material effect to the Company’s Consolidated Financial Statements as of and for the year ended December 31, 2020, future evaluations could result in a material effect, including potential impairments, depending on the eventual impact to the Company of the COVID-19 pandemic and its effect on student enrollment, tuition pricing, and collections in future periods.

Recently Adopted Accounting Standards

2016-13 (ASU 2016-13), Financial Instruments - Credit Losses (Topic 326):

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ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions.

This ASU is effective for Laureate beginning on January 1, 2020.

We do not expect this guidance to have a material impact on our Consolidated Financial Statements.

This ASU was effective for Laureate beginning on January 1, 2020 and did not have a material impact on our Consolidated Financial Statements.

Laureate adopted this ASU using the modified retrospective transition method.

Under this transition method, the new standard is applied from January 1, 2020 without restatement of comparative period amounts.

No adjustment was recorded to retained earnings for the cumulative effect of adopting this ASU on January 1, 2020.

Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

2017-04 (ASU 2017-04), Intangibles - Goodwill and Other (Topic 350):

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However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

This ASU is effective for Laureate beginning on January 1, 2020 and we do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

The Company's next annual goodwill impairment test will occur as of October 1, 2020.

Recently Adopted Accounting Standards

2017-12 (ASU 2017-12), Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities

On August 28, 2017, the FASB issued ASU 2017-12, which contains significant amendments to the hedge accounting model.

The new guidance is intended to simplify the application of hedge accounting and should allow for more hedging strategies to qualify for hedge accounting.

ASU 2017-12 also amends the presentation and disclosure requirements and changes how companies assess effectiveness.

Public business entities like Laureate will have until the end of the first quarter in which a hedge is designated to perform an initial assessment of a hedge’s effectiveness.

After initial qualification, the new guidance permits a qualitative effectiveness assessment for certain hedges instead of a quantitative test, such as a regression analysis, if the company can reasonably support an expectation of high effectiveness throughout the term of the hedge.

An initial quantitative test to establish that the hedge relationship is highly effective is still required.

We adopted this ASU on January 1, 2019 and the impact was not material.

2016-02 (ASU 2016-02), Leases (Topic 842)

On February 25, 2016, the FASB issued ASU 2016-02, which requires lessees to recognize on their balance sheet a right-of-use (ROU) asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease).

The liability is equal to the present value of the lease payments.

The asset is based on the liability, subject to adjustment, such as for initial direct costs and uneven rent payments.

For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance.

Operating leases result in straight-line expense (similar to operating leases prior to adoption of ASU 2016-02) while finance leases result in a front-loaded expense pattern (similar to capital leases prior to adoption of ASU 2016-02).

Laureate adopted ASU 2016-02 as of January 1, 2019 under a modified retrospective method.

The standard provided companies with an additional, optional transition method that allowed entities to prospectively apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

We elected this optional transition method.

In accordance with ASC Topic 842 we also elected the package of practical expedients, which permits us to not reassess:

(1) whether any expired or existing contracts are or contain leases;

(2) the lease classification for any expired or existing leases;

and (3) any initial direct costs for any existing leases as of the effective date.

We did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment.

We elected the practical expedient to combine our lease and related nonlease components for our building leases.

Adopting ASU 2016-02 had a material impact on our Consolidated Balance Sheet as we recorded significant asset and liability balances in connection with our leased properties.

The most significant impacts to our Consolidated Financial Statements of adopting this standard are as follows:

The recognition of ROU assets, net, and lease liabilities for operating leases, which totaled $ 861,878 and $ 883,916 , respectively, as of December 31, 2019 ;

An increase in 2019 rent expense of approximately $ 13,000 for continuing operations primarily related to build-to-suit arrangements where Laureate was deemed to be the owner of the construction.

Upon adoption of this standard, these arrangements were classified on the balance sheet as operating leases and the related ROU asset is being amortized to rent expense rather than depreciation expense;

A cumulative-effect adjustment to retained earnings upon adoption of $ 28,944 , which is primarily attributable to the reclassification into retained earnings of deferred gain liabilities related to sale-leaseback transactions that were classified as operating leases upon adoption.

2018-15 (ASU 2018-15), Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40)

In August 2018, the FASB issued ASU 2018-15, which addresses the accounting for implementation costs associated with a hosted service.

The standard provides amendments to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).

Laureate elected to early adopt ASU 2018-15 on January 1, 2019.

The adoption did not have a material effect on our Consolidated Financial Statements.

This ASU was effective for Laureate beginning on January 1, 2020, and the adoption of this guidance did not have a material impact on our Consolidated Financial Statements.

Revenue Recognition

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We recorded a net increase to opening retained earnings of approximately $ 1,400 as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to the deferral of costs to obtain a contract which were previously expenses as incurred.

Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC Topic 605.

We determine revenue recognition through the five-step model prescribed by Topic 606 , as follows:

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The following table shows the components of Revenues by reportable segment and as a percentage of total net revenue for the years ended December 31, 2020, 2019 and 2018:

Rest of World

Online & Partnerships

Corporate (1)

Mexico Peru Corporate (1)

Tuition and educational services $ 634,956 $ 482,977 $ — $ 1,117,933 109 %

Other 81,764 41,869 7,432 131,065 13 %

Gross revenue 716,720 524,846 7,432 1,248,998 122 %

Discounts / waivers / scholarships ( 182,113 ) ( 41,968 ) — ( 224,081 ) ( 22 ) %

Total $ 534,607 $ 482,878 $ 7,432 $ 1,024,917 100 %

Tuition and educational services $ 715,817 $ 526,112 $ — $ 1,241,929 102 %

Other 101,224 54,020 12,473 167,717 14 %

Gross revenue 817,041 580,132 12,473 1,409,646 116 %

Discounts / waivers / scholarships ( 164,195 ) ( 33,381 ) — ( 197,576 ) ( 16 ) %

Total $ 652,846 $ 546,751 $ 12,473 $ 1,212,070 100 %

Tuition and educational services $ 701,223 $ 472,754 $ — $ 1,173,977 103 %

Other 99,015 51,485 2,072 152,572 13 %

Gross revenue 800,238 524,239 2,072 1,326,549 116 %

Discounts / waivers / scholarships ( 154,104 ) ( 27,871 ) — ( 181,975 ) ( 16 ) %

Total $ 646,134 $ 496,368 $ 2,072 $ 1,144,574 100 %

(1) Includes the elimination of intersegment revenues.

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All of our contract assets are considered accounts receivable and are included within the Accounts and notes receivable balance in the accompanying Consolidated Balance Sheets.

Total accounts receivable from our contracts with students were $ 432,910 and $ 373,855 as of December 31, 2019 and 2018 , respectively.

Total accounts receivable from our contracts with students were $ 138,738 and $ 123,132 a s of December 31, 2020 and 2019, respectively.

All contract asset amounts are classified as current.

Contract liabilities in the amount of $ 216,816 and $ 193,226 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of December 31, 2019 and 2018 , respectively.

Contract liabilities in the amount of $ 47,180 and $ 54,849 w ere included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of December 31, 2020 and 2019, respectively.

Substantially all of the contract liability balance at the beginning of the year was recognized into revenue during the year ended December 31, 2020.

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Discontinued Operations and Assets Held for Sale

As discussed in Note 1 , Description of Business , on August 9, 2018 , the Company announced that it planned to focus on its principal markets and would divest certain of its other markets .

The principal markets that would remain (the Continuing Operations) included Brazil, Chile, Mexico and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand.

At the time of the announcement on August 9, 2018 , the markets being divested by sale ( the Discontinued Operations) included the institutions in Portugal and Spain, which were part of the Andean segment, all remaining institutions in the Central America & U.S.

Campuses segment, and all remaining institutions in the Rest of World segment, except for Australia, New Zealand and the managed institutions in the Kingdom of Saudi Arabia and China.

The institutions in the Kingdom of Saudi Arabia were managed under a contract that expired at the end of August 2019 and was not renewed.

Accordingly, these institutions were disposed of other than by sale on August 31, 2019 and, beginning in the third quarter of 2019, have been included in Discontinued Operations for all periods presented.

As of December 31, 2019 , one VIE institution in Honduras is included in the Discontinued Operations.

The goal of the divestitures was to create a more focused and simplified business model and generate proceeds to be used for further repayment of long-term debt.

As described in Note 6 , Dispositions and Asset Sales , and Note 25 , Subsequent Events , a number of sale transactions closed during 2018, 2019 and 2020.

The timing and ability to complete any of the remaining transactions is uncertain and will be subject to market and other conditions, which may include regulatory approvals and consents of third parties.

Summarized operating results of the Discontinued Operations are presented in the following table:

For the year ended December 31,

Depreciation and amortization

As discussed in Note 1, Description of Business, the Company's remaining principal markets are Mexico and Peru (the Continuing Operations).

All remaining markets are being divested (the Discontinued Operations).

As described in Note 6, Dispositions, a number of sale transactions closed during 2020, 2019 and 2018.

In the tables below, certain classification changes have been made to the prior year amounts in order to conform to the current year presentation.

On the Consolidated Statements of Operations, the results from the Discontinued Operations, which in prior periods were presented in two lines, have been combined into one line called (Loss) income from discontinued operations, net of tax, for all periods presented.

Summarized operating results and cash flows of the Discontinued Operations are presented in the following table:

For the years ended December 31, 2020 2019 2018

Revenues $ 1,674,602 $ 2,539,995 $ 3,075,320

Depreciation and amortization expense ( 60,378 ) ( 111,376 ) ( 155,430 )

Share-based compensation expense ( 3,050 ) ( 2,669 ) ( 4,217 )

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Loss on impairment of assets ( 438,258 ) ( 691 ) ( 13,112 )

Operating income

Other non-operating income (expense)

Pretax income of discontinued operations

Other non-operating expense ( 68,553 ) ( 70,719 ) ( 91,132 )

Gain on sale of discontinued operations before taxes, net 25,048 793,475 293,114

Pretax (loss) income of discontinued operations ( 183,847 ) 1,121,828 668,127

Income tax expense ( 114,257 ) ( 33,681 ) ( 105,880 )

Income from discontinued operations, net of tax

(Loss) income from discontinued operations, net of tax $ ( 298,104 ) $ 1,088,147 $ 562,247

Operating cash flows of discontinued operations $ 288,271 $ 315,406 $ 396,042

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Financing cash flows of discontinued operations $ ( 969 ) $ ( 103,583 ) $ ( 61,622 )

2019 Loss on Impairment of Assets

Of the total impairment loss of $ 43,284 , approximately $ 25,000 relates to an impairment of long-lived assets at the Costa Rica institutions that was recorded during the third quarter of 2019, in order to write down the carrying value of those assets to their estimated fair value, per ASC 360-10.

As discussed in Note 25 , Subsequent Events , the Costa Rica institutions were sold on January 10, 2020 .

The remaining impairment loss primarily relates to an impairment of long-lived assets at our Honduras institution that was recorded during the fourth quarter of 2019, in order to write down the carrying value of those assets to their estimated fair value.

2020 Impairments and Losses Recognized on Held-For-Sale Disposal Groups

As described in Note 1, Description of Business, the Company is exploring strategic alternatives for each of its businesses and, as part of that process, the Company is evaluating all potential options for its remaining businesses, including sales, spin-offs or business combinations.

During the second quarter of 2020, the Company received and considered information regarding the market valuation for control of its Chilean operations, which was both a reporting unit and an asset group.

In a divestiture scenario, this market feedback revealed the range of values that could be expected to be offered by potential investors, and this range of values was lower than carrying value.

The reasons for this included uncertainties that market participants had around operating higher education institutions in Chile related to the challenging political and regulatory environment and the possibility that a new Chilean constitution could become effective as early as the summer of 2022.

These uncertainties particularly affected the views of market participants (as well as the views of the Company) about operating a not-for-profit education institution in Chile.

After assessing these factors, the Company concluded that it was more likely than not that the fair value of its Chile reporting unit was less than its carrying value.

Accordingly, the Company performed an impairment test of the long-lived assets that were part of the Chile reporting unit.

Because Chile had not yet met the held-for-sale criteria as of June 30, 2020, the long-lived assets other than goodwill were evaluated for impairment under the held-and-used model, based on the probability-weighted cash flows expected to be generated by the asset group.

Goodwill was also evaluated for impairment.

The projections used in the impairment testing included key assumptions around the effect of regulatory uncertainties on the future cash flows expected to be generated, reducing the estimates of those cash flows.

In addition, the projections incorporated assumptions around growth rates, tax rates and discount rates.

The inputs used were not observable to active markets and were therefore deemed “Level 3” inputs in the fair value hierarchy.

As a result of the impairment test, the Company determined that the carrying value

of the Chile asset group exceeded its fair value by approximately $ 418,000 and recorded an impairment charge in that amount during the second quarter of 2020, as follows:

Goodwill and tradenames $ 238,400

Land and buildings 80,600

Other long-lived assets 36,500

Operating lease right-of-use assets, net 62,500

Total Chile impairment $ 418,000

In addition, the Company had recorded within stockholders’ equity, as a component of accumulated other comprehensive income, approximately $ 293,000 of accumulated foreign currency translation losses associated with the Chilean operations.

As discussed further in Note 6, Dispositions, the Company completed the divestiture of its Chilean operations during the third quarter of 2020 and, as a result, these accumulated foreign currency translation losses were recognized as part of the loss on sale.

During the second quarter of 2020, the Company recorded a loss of approximately $ 10,000 related to the Honduras disposal group, which was classified as a Discontinued Operation, in order to write down the carrying value of those assets to their estimated fair value at that time, in accordance with ASC 360-10, “Impairment and Disposal of Long-lived Assets” (ASC 360-10).

During the third quarter of 2020, the Company recorded an additional loss of approximately $ 10,000 related to the Honduras disposal group, in order to adjust the carrying value of those assets to their estimated fair value based on the sale agreement for the institution that was signed in October 2020, as discussed further below.

As discussed further below, during the third quarter of 2020, the Company signed an agreement to sell its Brazil operations and, as a result, Brazil was classified as a Discontinued Operation for all periods presented.

In connection with this decision to sell Brazil, the Company recorded a loss of approximately $ 190,000 in order to write down the carrying value of the Brazil disposal group to its estimated fair value less costs to sell, as required by ASC 360-10.

The estimated fair value was based on an offer received from a market participant.

Because the held-for-sale criteria were met during the third quarter, the carrying value used to evaluate the Brazil business included the accumulated foreign currency translation losses associated with Brazil, resulting in this loss.

During the fourth quarter of 2020, the Company recorded an additional loss of approximately $ 15,000 in order to adjust the carrying value of the Brazil disposal group to its estimated fair value less costs to sell as of December 31, 2020.

2019 Losses Recognized on Held-For-Sale Disposal Groups

During 2019, the Company recognized total losses of approximately $ 43,000 related to the write-down of held-for-sale disposal groups.

Of this amount, approximately $ 25,000 relates to the Costa Rica disposal group and was recorded during the third quarter of 2019, in order to write down the carrying value of those assets to their estimated fair value, per ASC 360-10.

As discussed in Note 6, Dispositions, the Costa Rica institutions were sold on January 10, 2020 .

The remaining loss relates to a write down of the carrying value of our Honduras disposal group that was recorded during the fourth quarter of 2019, in order to reduce the carrying value of those assets to their estimated fair value at that time.

2018 Loss on Impairment of Assets

In connection with our goodwill impairment testing in the fourth quarter of 2018, we wrote off the remaining goodwill balance of $ 3,080 associated with our operations in the Kingdom of Saudi Arabia, which are now included in Discontinued Operations.

2017 Loss on Impairment of Assets

Of the total $ 33,476 of impairments shown in the table above, approximately $ 17,400 relates to impairment of tradenames and other long-lived assets at two subsidiaries in our Central America & U.S.

Campuses segment and approximately $ 16,100 relates

to impairment of other long-lived assets for several subsidiaries in our Rest of World segment which, per ASC 360-10, were required to be recorded at the lower of their carrying values or their estimated 'fair values less costs to sell' and were written down to a carrying value of $ 0 .

During 2018 we also recorded an impairment charge of $ 10,030 for the University of Liverpool (Liverpool), an institution in our Online & Partnerships segment that is now included in Discontinued Operations.

The impairment was caused by Liverpool's decision not to renew its institutional partnership agreement and to stop enrolling new students and begin a teach-out process.

As a result, we recorded an impairment charge related to the fixed assets of this entity that were no longer recoverable based on expected future cash flows.

The assets and liabilities of the Discontinued Operations, which are subject to finalization, have been classified as held for sale as of December 31, 2020 and 2019, in accordance with ASC 205.

The assets and liabilities are recorded at the lower of their carrying values or their estimated 'fair values less costs to sell.' In addition to the Discontinued Operations, Centro Universitário do Norte (UniNorte), an institution in the Brazil segment, was classified as held for sale as of December 31, 2018, and was then sold on November 1, 2019 .

UniNorte was included in Continuing Operations as it was not part of the strategic shift described above.

The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following table:

December 31, 2019

December 31, 2018

The assets and liabilities are recorded at the lower of their carrying values or their estimated 'fair values less costs to sell.' The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following table:

December 31, 2020 December 31, 2019

Assets of Discontinued Operations

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Property and equipment, net 259,471 784,198

Operating lease right-of-use assets, net

Goodwill and tradenames 1,202,496 1,668,971

Operating lease assets 136,806 399,345

Other assets 183,742 446,532

Valuation allowance on held-for-sale disposal groups ( 248,630 ) ( 43,079 )

assets of Discontinued Operations $ 1,917,435 $ 3,799,126

Other assets classified as Held for Sale

UniNorte Brazil

Receivables, net

Property and equipment, net — 8,403

Other land and buildings classified as held for sale

Property and equipment, net

other assets classified as held for sale $ — $ 8,403

Total assets held for sale $ 1,917,435 $ 3,807,529

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Liabilities of Discontinued Operations

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Operating leases, including current portion 151,413 388,202

Long-term debt, including current portion

Other liabilities

liabilities of Discontinued Operations

Other liabilities classified as held for sale:

UniNorte Brazil

Deferred revenue and student deposits

Long-term debt, including current portion

Long-term debt, seller notes and finance leases, including current portion 171,451 304,355

Other liabilities 291,599 486,081

other liabilities classified as held for sale

Total liabilities held for sale $ 702,256 $ 1,354,893

Discontinued Operations with Signed Sale Agreements Pending Closure at December 31, 2020

Agreement to Sell NewSchool of Architecture and Design, LLC (NSAD)

On June 14, 2019, the Company and Exeter Street Holdings, LLC, an indirect wholly owned subsidiary of the Company, entered into a membership interests purchase agreement with Ambow NSAD, Inc.

and Ambow Education Holding, Ltd.

(the NSAD Buyers) to sell 100 % of the outstanding membership interests of NSAD to the NSAD Buyers for a purchase price of one dollar, subject to certain adjustments.

In addition, the Company estimates that it will pay subsidies to the NSAD Buyers for continued operations and campus facilities of up to approximately $ 7,300 .

The closing of the sale is subject to regulatory approvals and other conditions precedent and is expected to close during the first half of 2020.

NSAD is a higher education institution located in California that offers undergraduate and graduate degrees and non-degree certificates in design and construction management.

Other Matters

Inti Education Holdings Sdn.

(Inti Holdings)

As previously reported, on December 11, 2017, Exeter Street Holdings Sdn.

Bhd., a Malaysia corporation (Exeter Street), and Laureate Education Asia Limited, a Hong Kong corporation (Laureate Asia), both of which are indirect wholly owned subsidiaries of the Company, entered into a sale purchase agreement (as amended on January 17, 2019, the Inti Agreement) with Comprehensive Education Pte.

Ltd., a Singapore corporation (Comprehensive, the purchaser) that is an affiliate of Affinity Equity Partners, a private equity firm based in Hong Kong.

Pursuant to the Inti Agreement, Comprehensive agreed to purchase from Exeter Street all of the issued and outstanding shares in the capital of Inti Holdings, and Laureate Asia agreed to guarantee certain obligations of Exeter Street.

Inti Holdings is the indirect owner of INTI University and Colleges, a higher education institution with five campuses in Malaysia.

The closing of the transaction under the Inti Agreement was subject to certain conditions, including approval by regulators in Malaysia, which approval was obtained on June 24, 2019.

On June 25, 2019, the Company notified Comprehensive that the conditions precedent had been duly satisfied and scheduled closing for July 12, 2019.

On July 9, 2019, Comprehensive notified the Company that it disagreed with the Company’s position that the conditions precedent had been satisfied and formally moved to terminate the Inti Agreement, an act viewed by the Company as a repudiatory breach of the Inti Agreement.

The Company is currently evaluating all options and continues to classify Inti Holdings as a discontinued operation.

We had no material acquisitions in 2019.

Brazil Operations

On November 2, 2020, the Company announced that it had entered into a definitive agreement with Ânima Holding S.A.

(Anima) for the sale of its Brazilian operations.

The transaction value is approximately 4,400,000 Brazilian Reals (approximately $ 765,000 at the time of signing), including 3,800,000 Brazilian Reals (approximately $ 660,700 at the time of signing) in cash consideration, which is subject to certain adjustments, and the assumption of net indebtedness.

Under the agreement with Anima, the Company will be entitled to receive up to 203,000 Brazilian Reals (approximately $ 35,300 at the time of signing) in additional cash consideration if certain metrics are achieved following the closing.

The transaction is targeted to close by the end of the second quarter of 2021.

On September 11, 2020, Laureate entered into a Membership Interest Purchase Agreement (the Walden Sale Agreement) with Adtalem Global Education Inc., a Delaware corporation (the Walden Purchaser).

Pursuant to the Walden Sale Agreement, the Company has agreed to sell to the Walden Purchaser all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company and its subsidiary, Walden University, LLC, a Florida limited liability company and an indirect wholly owned subsidiary of the Company (together with Walden e-Learning, LLC, the Walden Group), in exchange for a purchase price of $ 1,480,000 in cash, subject to certain adjustments set forth in the Walden Sale Agreement.

The closing of this transaction is expected to occur toward the end of 2021 and is subject to customary closing conditions, including regulatory approval by the U.S.

Department of Education and the Higher Learning Commission and required antitrust approvals.

Under certain specified circumstances, the Walden Purchaser may be required to pay the Company a termination fee of $ 88,000 , including if the Walden Purchaser terminates the Walden Sale Agreement as a result of the imposition by the U.S.

Department of Education of certain specified restrictions, or if Laureate terminates the Walden Sale Agreement as a result of the Walden Purchaser’s failure to consummate the transaction upon satisfaction of the closing conditions.

On October 13, 2020, the Company entered into a definitive agreement with Fundación Nasser, a not-for-profit foundation in Honduras, to transfer control of its operations in Honduras for total cash consideration of approximately $ 29,800 , prior to closing costs.

The buyer will also assume indebtedness which, as of December 31, 2020, was approximately $ 29,500 .

The transaction is subject to certain closing conditions, including regulatory approval, and is expected to be completed in the first half of 2021.

We had no material acquisitions in 2019 or 2020.

2018 Acquisition in Peru

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We account ed for this acquisition as a business combin ation.

For this acquisition, Revenues , Operating income and Net income attributable to Laureate Education, Inc.

For this acquisition, Revenues, Operating (loss) income and Net (loss) income attributable to Laureate Education, Inc.

were immaterial for the year ended December 31, 2018.

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Property and equipment 13,673

Goodwill 4,658

Other long-term assets 815

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Net assets acquired attributable to Laureate Education, Inc.

Debt assumed 874

Net assets acquired attributable to Laureate Education, Inc.

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Pro forma results of operations have not been presented because the effects of the acquisition were not material to the Company’s financial results.

2017 Acquisition in Australia

In June 2017, our Rest of World segment acquired the assets and business of the nursing division of Careers Australia (CA Nursing), a vocational institution in Australia, for a cash purchase price of Australian Dollar (AUD) 1,107 ( $ 835 at the date of acquisition) plus debt assumed of AUD 9,850 ($ 7,433 at the acquisition date).

We account ed for this acquisition as a business combin ation.

For this acquisition, Revenues , Operating income and Net income attributable to Laureate Education, Inc.

were immaterial for the year ended December 31, 2017.

The following table summarizes the estimated fair value of all assets acquired and the liabilities assumed at the date of acquisition:

Current assets

Property and equipment

Other intangible assets

Total assets acquired

Current portion of long-term debt

Other current liabilities

Long-term debt, less current portion

Other long-term liabilities

Total liabilities assumed

Net assets acquired attributable to Laureate Education, Inc.

plus debt assumed

Net assets acquired

Net cash paid at acquisition

The amounts recorded for the 2017 acquisition are considered final.

None of the goodwill related to the 2017 acquisition is expected to be deductible for income tax purposes.

Pro forma results of operations for the acquisition completed during 2017 have not been presented because the effects of that acquisition were not material to the Company’s financial results.

Dispositions and Asset Sales

2020 Dispositions

Sale of Costa Rica Operations

On January 10, 2020, Laureate International B.V., a Netherlands private limited liability company (Laureate International), an indirect, wholly owned subsidiary of the Company, entered into, and consummated the transactions contemplated by, an Equity Purchase Agreement (the Costa Rica Agreement) with SP Costa Rica Holdings, LLC, a Delaware limited liability company (the Costa Rica Buyer).

Pursuant to the Agreement, the Costa Rica Buyer purchased from Laureate International (i) all of the equity units of Education Holding Costa Rica, S.R.L., which owned, directly or indirectly, all of the equity units of Lusitania S.R.L., Universidad ULatina, S.R.L.

(ULatina) and Universidad Americana UAM, S.R.L.

(collectively, Laureate Costa Rica) and (ii) a note due from ULatina to Laureate International.

Consideration for the transaction consisted of $ 15,000 paid at closing and up to $ 7,000 to be paid within the next two years if Laureate Costa Rica met certain performance metrics.

One of the performance metrics was finalized during the second quarter of 2020 and did not result in any additional proceeds to the Company;

the maximum additional proceeds that the Company could receive if the remaining performance metric is met is $ 5,000 .

The proceeds received, net of cash sold, transaction fees and a working capital adjustment that was completed during the second quarter of 2020, were approximately $ 1,800 .

Additionally, Laureate Costa Rica retained obligations to pay approximately $ 30,000 in finance lease indebtedness for which the Costa Rica Buyer has no recourse to Laureate International.

During the third quarter of 2019, the Company recorded a loss of approximately $ 25,000 on the held-for-sale Costa Rica disposal group, in order to write down the carrying value of those assets to their estimated fair value, per ASC 360-10.

Upon completion of the sale in January 2020 and after including the working capital adjustment, the Company recognized additional pre-tax loss of approximately $ 18,600 , which related to subsequent changes in net carrying values.

Accordingly, the total loss on the sale of Costa Rica was approximately $ 43,600 and is included in loss from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2020.

The Costa Rica Buyer is controlled by certain affiliates of Sterling Capital Partners II, L.P.

(Sterling II).

Sterling II has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement, and Steven Taslitz currently serves as the Sterling-designated director.

Taslitz did not participate in the Laureate Board of Directors’ consideration of the transaction, which was approved by Laureate's Audit Committee as a related party transaction.

Sale of NewSchool of Architecture and Design, LLC (NSAD)

On March 6, 2020, the Company completed the sale of NSAD.

Under the terms of the membership interests purchase agreement, Exeter Street Holdings, LLC, an indirect wholly owned subsidiary of the Company, sold 100 % of the outstanding membership interests of NSAD to Ambow NSAD, Inc.

and Ambow Education Holding, Ltd.

(the NSAD Buyers) for a purchase price of one dollar, subject to certain adjustments.

NSAD is a higher education institution located in California that offers undergraduate and graduate degrees and non-degree certificates in design and construction management.

Under the terms of the agreement, the Company agreed to pay subsidies to the NSAD Buyers totaling approximately $ 7,300 , of which all but $ 2,800 was settled at the closing date.

The remaining subsidy of $ 2,800 is being paid to the NSAD Buyers ratably on a quarterly basis over the next four years .

The Company recognized a pre-tax loss on the sale of approximately $ 5,900 , which is included in loss from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2020.

Sale of China Operations-Receipt of Escrow

On January 25, 2018, the Company completed the sale of LEI Lie Ying Limited in China.

At the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account, to be distributed to the Company pursuant to the terms and conditions of the escrow agreement.

As of December 31, 2019, the Company had recorded a receivable of approximately $ 25,900 for the portion of the escrowed amount that the Company expected to receive.

Per the terms of the escrow agreement, in June 2020, the Company received approximately 141,647 Hong Kong Dollars (approximately $ 18,300 at the date of receipt) from the escrow, which was offset against the receivable recorded, and is included in receipts from sales of discontinued operations within investing activities on the Consolidated Statement of Cash Flows.

Under the terms of the agreement, the remaining escrow receivable amount was due in late January 2021.

The Company is pursuing collection and considers the net receivable remaining to be fully collectable.

Divestiture of Chilean Operations

On September 10, 2020, Laureate International and Laureate I, B.V., each a Netherlands private limited liability company (together, the LDES Sellers), and Servicios Regionales Universitarios LE, S.C., a Mexican company (sociedad civil) (together with the LDES Sellers, the Controlling Entities), all of which are indirect, wholly owned subsidiaries of the Company, entered into a Master Agreement (the Chile Agreement) with Fundación Educación y Cultura, a Chilean non-for-profit foundation (the Chile Buyer).

Pursuant to the Chile Agreement, as of September 11, 2020, Laureate completed the divestiture of its operations in Chile through the transfer of control of its not-for-profit institutions, Universidad Andrés Bello, Universidad de Las Américas and Universidad Viña del Mar, to the Chile Buyer, and the sale of its for-profit operations, which includes the sale of Instituto Profesional AIEP to Universidad Andrés Bello.

The not-for-profit institutions were consolidated by Laureate under the variable interest entity model.

The cash proceeds received at closing, prior to transaction fees, were approximately $ 195,300 .

In addition, the purchase price includes a note receivable of $ 21,500 that is payable one year from the date of divestiture.

At the closing date, the Chilean operations had a cash balance (cash sold) of approximately $ 288,000 that was transferred to the Chile Buyer as part of the transaction.

This divestiture resulted in a pre-tax loss of approximately $ 338,200 , which related primarily to the accumulated foreign currency translation losses associated with the Chilean operations.

The loss is recorded in loss from discontinued operations in the Consolidated Statements of Operations for the year ended December 31, 2020.

As discussed in Note 4, Discontinued Operations and Assets Held for Sale, during the second quarter of 2020, the Company recorded an impairment charge of approximately $ 418,000 related to the long-lived assets, indefinite-lived intangible assets and goodwill of the Chilean operations, in order to write down the carrying value of the Chilean operations assets to its estimated fair value.

Inti Education Holdings Sdn.

(Inti Holdings)

On February 28, 2020, Exeter Street Holdings Sdn.

Bhd., a Malaysia corporation (the Malaysia Seller), and LEI Holdings, LTD., a Hong Kong corporation (the Malaysia Seller Guarantor), each of which is an indirect wholly owned subsidiary of Laureate, entered into a Share Sale & Purchase Agreement (the Malaysia Sale Agreement) with HOPE Education Group (Hong Kong) Company Limited (the Malaysia Purchaser) and HOPE Education Group Co.

(the Malaysia Purchaser Guarantor).

Pursuant to the Malaysia Sale Agreement, the Malaysia Purchaser would purchase from the Malaysia Seller all of the issued and outstanding shares in the capital of Inti Education Holdings Sdn.

Bhd., a Malaysia corporation (Inti Holdings), the Malaysia Seller’s Guarantor would guarantee certain obligations of the Malaysia Seller and the Malaysia Purchaser’s Guarantor would guarantee certain obligations of the Malaysia Purchaser.

Inti Holdings was the indirect owner of INTI University and Colleges, a higher education institution with five campuses in Malaysia.

In connection with the Malaysia Sale Agreement, the Malaysia Seller entered into a separate agreement with the current minority owner of the equity of Inti Holdings relating to the purchase by the Malaysia Seller of the minority owner’s 10.10 % interest in Inti Holdings, the closing of which was a precondition to the closing of the transaction under the Malaysia Sale Agreement.

The sale of Inti Holdings was completed on September 29, 2020.

The total purchase price, including the payment to the current minority owner, was $ 140,000 .

The closing of the transaction was subject to customary closing conditions, including approval by regulators in Malaysia.

At the time of the signing of the Malaysia Sale Agreement in February 2020, the Malaysia Purchaser paid to the Malaysia Seller a cash deposit of $ 5,000 , which the Company initially recorded as a liability pending the closing of the sale, and which was recognized as part of the gain on sale upon the closing of the transaction in September 2020.

The cash proceeds received, prior to transaction fees and net of approximately $ 19,500 of cash sold, were approximately $ 116,300 and are included in Receipts from sales of discontinued operations, net of cash sold, property and equipment and other within investing activities in the Consolidated Statement of Cash Flows for the year ended December 31, 2020.

In addition, the Malaysia Purchaser withheld $ 4,200 for taxes that the Company collected in February 2021.

The payment to the minority owner for their 10.10 % interest in Inti Holdings, which totaled approximately $ 13,700 , was made in early October 2020.

An additional $ 420 , which represents the minority owner’s share of the taxes that were withheld as noted above, will be paid to the minority owner following receipt by the Company.

The Company recognized a pre-tax gain on sale of approximately $ 47,900 , which is included in income (loss) from discontinued operations in the Consolidated Statements of Operations for the year ended December 31, 2020.

Divestiture of Turkey Operations:

Receipt of Portion of Deferred Consideration

As previously disclosed, in August 2019, the Company completed the divestiture of its operations in Turkey.

The total consideration included a deferred payment of $ 15,000 in the form of an instrument that was payable one year after closing.

the time of the divestiture, the Company determined that this deferred amount would be recognized if collected.

In early October 2020, the Company received $ 8,436 of the deferred consideration and recognized this as a reduction to the loss on the sale of control of the Turkish operations.

The outstanding amount was due in January 2021, and the Company is pursuing collection.

Australia and New Zealand Operations

On July 29, 2020, LEI AMEA Investments B.V., a Netherlands private limited liability company (the ANZ Seller), an indirect, wholly owned subsidiary of the Company, and the Company, solely as guarantor of certain of the ANZ Seller’s obligations thereunder, entered into a Sale and Purchase Agreement (the ANZ Purchase Agreement) with SEI Newco Inc., a Delaware corporation (the ANZ Purchaser), and Strategic Education, Inc., a Maryland corporation (the ANZ Purchaser’s Guarantor).

Pursuant to the ANZ Purchase Agreement, the ANZ Seller has agreed to sell to the ANZ Purchaser all of the issued and outstanding shares in the capital of (i) LEI Higher Education Holdings Pty Ltd, an Australian private company and the direct owner of Torrens University Australia, (ii) LEI Australia Holdings Pty Ltd, an Australian private company and the indirect owner of Think Education, (iii) LESA Education Services Holdings Pty Ltd, an Australian private company, and (iv) LEI New Zealand, a New Zealand company and the indirect owner of Media Design School (collectively, the ANZ Target Companies).

The ANZ Purchaser’s Guarantor will guarantee the obligations of the ANZ Purchaser.

The closing of the transaction occurred on November 3, 2020, following completion of the required regulatory approvals and other customary closing conditions.

The proceeds received, net of cash sold and transaction fees, were approximately $ 624,200 .

The Company recognized a pre-tax gain on sale of approximately $ 555,800 , which is included in income (loss) from discontinued operations in the Consolidated Statements of Operations for the year ended December 31, 2020.

Campus Guadalajara Norte Sale

In November 2020, an agreement was signed between Universidad del Valle de Mexico, SC (UVM) and Grupo Dalton for the sale of the land and buildings of Campus Guadalajara Norte, after a decision was made to relocate all students from the Campus Guadalajara Norte to the nearby Campus Zapopan in Jalisco, Mexico.

The total purchase price was approximately $ 13,900 , prior to transaction fees.

As of December 31, 2020, the Company has received approximately $ 7,000 of the total purchase price, with the outstanding amount of approximately $ 6,900 to be paid before the one-year anniversary of the signing of the agreement.

The Company recognized a pre-tax operating gain on the sale of this property and equipment of approximately $ 5,800 , which is included in Direct costs in the Consolidated Statements of Operations for the year ended December 31, 2020.

2019 Dispositions

Sale of the University of St.

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term loan and revolving credit facility.

The Company recognized a gain on the sale of approximately $ 223,000 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a gain on the sale of approximately $ 223,000 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of Thailand Operations

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The second post-closing requirement was satisfied in February 2020 and the Company received approximately $ 1,400 .

For the year ended December 31, 2019 , the Company recognized a gain on the sale of approximately $ 10,800 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations .

For the year ended December 31, 2019, the Company recognized a gain on the sale of approximately $ 10,800 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations.

Additional Gain on Sale of China Operations

On January 25, 2018 , the Company completed the sale of LEI Lie Ying Limited (LEILY).

As discussed further below, on January 25, 2018, the Company completed the sale of LEI Lie Ying Limited (LEILY).

A portion of the purchase price was held back and subject to deduction of any indemnifiable losses payable to the buyer pursuant to the sale purchase agreement.

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During the first quarter of 2019, the legal matter that this loss contingency related to was settled, with no cost to the Company.

Accordingly, during the first quarter of 2019, the Company reversed the loss contingency and recognized additional gain on the sale of LEILY of approximately $ 13,700 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019.

Accordingly, during the first quarter of 2019, the Company reversed the loss contingency and recognized additional gain on the sale of LEILY of approximately $ 13,700 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

The remaining liability recorded relates to certain legal fees.

Additionally, at the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account and will be distributed to the Company pursuant to the terms and conditions of the escrow agreement.

As of December 31, 2019 , the Company has recorded a receivable of approximately $ 25,900 for the portion of the escrowed amount that the Company expects to receive.

As of December 31, 2019, the Company has recorded a receivable of approximately $ 25,900 for the portion of the escrowed amount that the Company expected to receive;

the majority of this receivable was collected in 2020, as described above.

Sale of Monash South Africa

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In the aggregate, including working capital adjustments, the Company received approximately $ 9,000 from the buyer, which approximated the amount of cash sold with the business.

The Company recognized a gain for these transactions of approximately $ 2,300 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a gain for these transactions of approximately $ 2,300 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of India Operations

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The net proceeds received by the India Sellers, before the payment to the 10 % minority owners and after transaction fees and taxes, including receipt in July 2019 of certain taxes withheld at closing, were approximately $ 145,800 , or approximately $ 77,300 net of cash sold, which the Company used to repay indebtedness under its term loan that had a maturity date of April 2024 (the 2024 Term Loan).

The Company recognized a gain for these transactions of approximately $ 19,500 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a gain for these transactions of approximately $ 19,500 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of Spain and Portugal Operations

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Additionally, the buyer assumed debt of approximately $ 109,000 .

The Company recognized a gain for these transactions of approximately $ 615,000 , including a tax benefit of approximately $ 30,000 that relates to the reversal of net deferred tax liabilities, which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a gain for these transactions of approximately $ 615,000 , including a tax benefit of approximately $ 30,000 that relates to the reversal of net deferred tax liabilities, which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of Turkey Operations

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At the date of sale, Bilgi had approximately $ 89,000 of cash and restricted cash on its balance sheet.

The Company recognized a loss for this transaction of approximately $ 37,700 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a loss for this transaction of approximately $ 37,700 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of Universidad Interamericana de Panamá (UIP)

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The total enterprise value under the UIP Agreement and the DUE Real Estate Purchase Agreement was approximately $ 86,750 , and the net proceeds received were approximately $ 82,000 .

The Company recognized a net gain for this transaction of approximately $ 21,000 , including

a tax benefit of approximately $ 1,500 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2019 .

The Company recognized a net gain for this transaction of approximately $ 21,000 , including a tax benefit of approximately $ 1,500 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2019.

Sale of UniNorte

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The Company and Ser Educacional S.A., the parent of the UniNorte Purchaser, are also parties to the Agreement as guarantors of certain obligations of their respective subsidiaries.

The Company received cash proceeds of approximately $ 43,000 , net of transaction costs, and recognized a loss on the transaction of approximately $ 300 , which is included in (Loss) gain on sales and disposals of subsidiaries, net in Continuing Operations as UniNorte was not part of the strategic shift described in Note 1 , Description of Business , and Note 4 , Discontinued Operations and Assets Held for Sale .

The Company received cash proceeds of approximately $ 43,000 , net of transaction costs, and recognized a total net loss on the transaction of approximately $ 300 .

UniNorte was not part of the strategic shift described in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale.

Dissolution of Dormant Subsidiaries

During the third and fourth quarters of 2019, the Company dissolved several dormant subsidiaries, resulting in the release of accumulated foreign currency translation loss of approximately $ 37,500 .

This loss is included in (Loss) gain on sales and disposals of subsidiaries, net in Continuing Operations, as these entities were not part of the strategic shift described in Note 1 , Description of Business , and Note 4 , Discontinued Operations and Assets Held for Sale .

This loss is included in Loss on disposals of subsidiaries, net in Continuing Operations, as these entities were not part of the strategic shift described in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale.

2018 Dispositions

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(Laureate Italy).

Upon closing, we received gross proceeds of approximately EUR 232,000 (approximately $ 275,500 , or approximately $ 244,300 net of cash sold and net of the approximately $ 4,100 working capital settlement between the Company and the buyer that was completed during the second quarter of 2018), and recognized a total gain on sale for the year ended December 31, 2018 of approximately $ 218,000 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations .

Upon closing, we received gross proceeds of approximately EUR 232,000 (approximately $ 275,500 , or approximately $ 244,300 net of cash sold and net of the approximately $ 4,100 working capital settlement between the Company and the buyer that was completed during the second quarter of 2018), and recognized a total gain on sale for the year ended December 31, 2018 of approximately $ 218,000 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations.

The Company used the proceeds from this transaction, along with borrowings on our revolving credit facility that were subsequently repaid with the China sale proceeds discussed below, to repay $ 350,000 of the principal balance on our syndicated term loan that had a maturity date of April 2024 (the 2024 Term Loan), as discussed in Note 9, Debt.

1 unchanged sentence

On January 25, 2018, we completed the sale of LEI Lie Ying Limited (LEILY) for a total transaction value of Chinese Renminbi (RMB) 1,430,000 (approximately $ 225,500 at the time of sale), of which RMB 50,000 (approximately $ 7,900 at the time of sale) will not be paid because certain conditions were not satisfied by the closing date.

At closing, the Company received initial gross proceeds totaling approximately $ 128,800 (approximately $ 110,800 net of cash sold), net of banker transaction fees and certain taxes and duties totaling approximately $ 16,000 .

At closing, the Company

received initial gross proceeds totaling approximately $ 128,800 (approximately $ 110,800 net of cash sold), net of banker transaction fees and certain taxes and duties totaling approximately $ 16,000 .

Six months after the closing date, the buyer was required to pay to the Company the Hong Kong Dollar (HKD) equivalent of RMB 120,000 (the First Holdback Payment).

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In addition, the Company had recorded a liability of approximately $ 14,300 related to loss contingencies for which we have indemnified the buyer.

The Company recognized a gain on the sale of LEILY for the year ended December 31, 2018 of approximately $ 84,000 , including tax effect, which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations .

The Company recognized a gain on the sale of LEILY for the year ended December 31, 2018 of approximately $ 84,000 , including tax effect, which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of German Operations

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In connection with this transaction, the Company contributed capital to Laureate Germany of approximately $ 3,600 .

The Company recognized a loss on the sale of Laureate Germany for the year ended December 31, 2018 of approximately $ 5,500 , which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations .

The Company recognized a loss on the sale of Laureate Germany for the year ended December 31, 2018 of approximately $ 5,500 , which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of Moroccan Operations

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Laureate Somed is the operator of Université Internationale de Casablanca, a comprehensive campus-based university in Casablanca, Morocco.

The Company recognized a gain on the sale of Laureate Somed of approximately $ 17,400 for the year ended December 31, 2018, which is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations .

The Company recognized a gain on the sale of Laureate Somed of approximately $ 17,400 for the year ended December 31, 2018, which is included in income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of Kendall College, LLC

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In addition, at closing Laureate paid approximately $ 2,100 to NLU for a working capital adjustment and other items provided for under the agreement.

This payment was included in the loss on sale, which totaled approximately $ 17,200 , including tax effect, and is included in Gain on sales of discontinued operations, net, on the Consolidated Statement of Operations for the year ended December 31, 2018.

This payment was included in the loss on sale, which totaled approximately $ 17,200 , including tax effect, and is included in income (loss) from discontinued operations on the Consolidated Statement of Operations for the year ended December 31, 2018.

Also, at the closing date of the sale, the cease-use criteria were met for a leased building that was not part of the sale transaction and that has a lease term ending in July 2028.

Accordingly, during the third quarter of 2018, the Company recorded a liability of approximately $ 24,000 for the present value of the remaining lease costs, less estimated sublease income, which was charged to loss from discontinued operations, net of tax, on the Consolidated Statements of Operations.

The transactions described below are included in Continuing Operations, since these 2017 transactions were not part of the strategic shift described in Note 1 , Description of Business , and Note 4 , Discontinued Operations and Assets Held for Sale .

2017 Asset Sale and Purchase Price Settlement Agreement

Ad Portas Asset Sale

In November 2017 , we completed the sale of an asset group at Ad Portas, a for-profit real estate subsidiary in our Andean segment, to UDLA Ecuador, a licensed institution in Ecuador that was formerly consolidated into Laureate.

This asset group included property and equipment and was previously classified as assets held for sale in our Quarterly Report on Form 10-Q for the period ended September 30, 2017.

We received total consideration of approximately $ 55,000 , which included cash proceeds of $ 17,784 , and recognized an operating gain on the sale of this property and equipment of approximately $ 20,300 .

Contemporaneous with this transaction, we also repurchased UDLA Ecuador's noncontrolling interest in a Chilean real estate subsidiary of Laureate for a purchase price of $ 36,247 , which included a cash payment of $ 6,085 .

The payment is included in Payments to purchase noncontrolling interests in the 2017 Consolidated Statement of Cash Flows.

During the year ended December 31, 2017 , the Chilean real estate subsidiary made dividend payments to UDLA Ecuador of $ 1,242 related to this investment.

Certain for-profit entities of Laureate provided services and/or intellectual property to UDLA Ecuador through contractual arrangements at market rates.

During the years ended December 31, 2018 and 2017, the total amounts recognized through these contractual arrangements, primarily as other revenues, were $ 864 and $ 13,927 , respectively.

Purchase Price Settlement Agreement for Swiss Hospitality Management Schools

In December 2017, we reached a final purchase price settlement agreement with Eurazeo, the buyer of our Swiss hospitality management schools in 2016, and made a payment to Eurazeo of approximately $ 9,300 .

This payment is included in Receipts from sales of discontinued operations, net of cash sold, property and equipment and other on the 2017 Consolidated Statements of Cash Flows.

The total settlement amount was approximately $ 10,300 , which is included in (Loss) gain on sales and disposals of subsidiaries, net , in the Consolidated Statement of Operations for the year ended December 31, 2017 , as it represented an adjustment of the sale purchase price.

Due to Shareholders of Acquired Companies

The amounts due to shareholders of acquired companies generally arise in connection with Laureate’s acquisition of a majority or all of the ownership interest of these companies.

Promissory notes payable to the sellers of acquired companies, referred to as “seller notes,” are commonly used as a means of payment for business acquisitions.

Seller note payments are classified as Payments of deferred purchase price for acquisitions within financing activities in our Consolidated Statements of Cash Flows.

The amounts due to shareholders of acquired companies, currencies, and interest rates applied were as follows:

December 31, 2019

December 31, 2018

Nominal Currency

Universidade Anhembi Morumbi (UAM Brazil)

Faculdade Porto-Alegrense (FAPA)

University of St.

Augustine for Health Sciences, LLC (St.

Total due to shareholders of acquired companies

Current portion of due to shareholders of acquired companies

Due to shareholders of acquired companies, less current portion

Brazilian Real

Certificados de Depósitos Interbancários (Brazil)

European Euro

General Index of Market Prices (Brazil)

United States Dollar

The aggregate maturities of Due to shareholders of acquired companies as of December 31, 2019 , were as follows:

Aggregate maturities

imputed interest discount

A portion of the UAM Brazil acquisition was financed with a seller note in the amount of BRL 200,808 ( $ 49,226 at December 31, 2019 ), which was scheduled to be paid in nine equal installments of BRL 22,312 ( $ 5,470 at December 31, 2019 ), adjusted for inflation based on CDI plus 200 basis points.

The initial seven installments were paid during the years ended December 31, 2013 through 2019 .

The remaining two installments are due annually on August 31st of each year.

On the acquisition date we recorded the note payable at its discounted present value, which is being accreted over the term of the note.

As of December 31, 2019 , the carrying value of the note was $ 20,179 .

In August 2019, the FAPA seller note matured and was settled, with an amount of $ 230 withheld from the payment.

This amount relates to certain contingencies for which we are indemnified by the seller.

This amount will remain until the contingencies have been resolved.

During the second quarter of 2019, the Company fully repaid the St.

Augustine seller note, following the resolution of certain legal matters for which the Company was indemnified by the former owner.

Business and Geographic Segment Information

Laureate’s educational services are offered through six operating segments:

Brazil, Mexico, Andean, Central America & U.S.

Campuses, Rest of World and Online & Partnerships.

Laureate determines its operating segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.

Our campus-based segments generate revenues by providing an education that emphasizes professional-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines.

Our educational offerings are increasingly utilizing online and hybrid (a combination of online and in-classroom) courses and programs to deliver their curriculum.

Many of our largest campus-based operations are in developing markets which are experiencing a growing demand for higher education based on favorable demographics and increasing secondary completion rates, driving increases in participation rates and resulting in continued growth in the number of higher education students.

Traditional higher education students (defined as 18-24 year olds) have historically been served by public universities, which have limited capacity and are often underfunded, resulting in an inability to meet the growing student demand and employer requirements.

This supply and demand imbalance has created a market opportunity for private sector participants.

Most students finance their own education.

However, there are some government-sponsored student financing programs which are discussed below.

These campus-based segments include Brazil, Mexico, Andean, Central America & U.S.

Campuses, and Rest of World.

Specifics related to each of these campus-based segments and our Online & Partnerships segment are discussed below .

In Brazil, approximately 73% of post-secondary students are enrolled in private higher education institutions.

While the federal government defines the national curricular guidelines, institutions are licensed to operate by city.

Laureate owns 12 institutions in seven states throughout Brazil, with a particularly strong presence in the competitive São Paulo market.

Many students finance their own education while others rely on the government-sponsored programs such as Prouni and FIES.

Public universities in Mexico enroll approximately two-thirds of students attending post-secondary education.

However, many public institutions are faced with capacity constraints or the quality of the education is considered low.

Laureate’s educational services are offered through two reportable segments:

Mexico and Peru (formerly Andean).

Following the September 2020 sale of Chile, the former Andean segment is now called the Peru segment.

Laureate determines its segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.

Our segments generate revenues by providing an education that emphasizes profession-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines.

Our educational offerings are increasingly utilizing online and hybrid (a combination of onli ne and in-classroom) courses and programs to deliver their curriculum.

In response to the COVID-19 pandemic, we h ave temporarily tran sitioned the educational delivery method at all of our institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside of the traditional classroom setting.

The Mexico and Peru markets are characterized by what we believe is a significant imbalance between supply and demand.

The demand for higher education is large and growing and is fueled by several demographic and economic factors, including a growing middle class, global growth in services and technology-related industries and recognition of the significant personal and economic benefits gained by graduates of higher education institutions.

The target demographics are primarily 18- to 24-year-olds in the countries in which we compete.

We compete with other private higher education institutions on the basis of price, educational quality, reputation and location.

We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our network.

There are a number of private and public institutions in both of the countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future.

We expect competition to increase as the Mexican and Peruvian markets mature.

Essentially all of our revenues were generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru.

Specifics related to both of our reportable segments are discussed below.

Private education providers in Mexico constitute 35 % of the total higher-education market.

The private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities.

Laureate owns two institutions and is present throughout the country with a footprint of over 35 campuses.

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Students in our Mexican institutions typically finance their own education.

The Andean segment includes institutions in Chile and Peru.

In Chile, private universities enroll approximately 72% of post-secondary students and there are government-sponsored student financing programs.

In Peru, the public sector plays a significant role, but private universities are increasingly providing the capacity to meet growing demand.

As of December 31, 2019, the Central America & U.S.

Campuses segment includes institutions in Costa Rica, Honduras and the United States.

Students in Central America typically finance their own education while students in the United States finance their education in a variety of ways, including U.S.

Department of Education (DOE) Title IV programs.

The entire Central America & U.S.

Campuses segment is included in Discontinued Operations.

As discussed in Note 25 , Subsequent Events , we completed the sale of our operations in Costa Rica on January 10, 2020.

The Rest of World segment includes campus-based institutions in Asia Pacific with operations in Australia, Malaysia, and New Zealand.

Additionally, the Rest of World segment manages one institution in China through a joint venture arrangement and, until August 31, 2019 when the contract expired, the Rest of World segment also managed eight licensed institutions in the Kingdom of Saudi Arabia.

The institutions in Malaysia and the Kingdom of Saudi Arabia are included in Discontinued Operations.

The Online & Partnerships segment includes fully online institutions that offer profession-oriented degree programs in the United States through Walden University (Walden), a U.S.-based accredited institution, and through the University of Liverpool and the University of Roehampton in the United Kingdom.

These online institutions primarily serve working adults with undergraduate and graduate degree program offerings.

Students in the United States finance their education in a variety of ways, including Title IV programs.

We no longer accept new enrollments at the University of Liverpool and the University of Roehampton , which are in a teach-out process.

As discussed in Note 1 , Description of Business , and Note 4 , Discontinued Operations and Assets Held for Sale , a number of our subsidiaries have met the requirements to be classified as discontinued operations, including the entire Central America & U.S.

Campuses segment .

As a result, the operations of the Central America & U.S.

Campuses segment have been excluded from the segment information for all periods presented.

In addition, the portion of the Rest of World reportable segment that is included in Discontinued Operations has also been excluded from the segment information for all periods presented.

In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute 72 % of the total higher-education market.

Laureate owns three institutions in Peru.

As discussed in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale, a number of our subsidiaries have met the requirements to be classified as discontinued operations.

As a result, the discontinued operations have been excluded from the segment information for all periods presented.

Intersegment transactions are accounted for in a similar manner as third-party transactions and are eliminated in consolidation.

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We evaluate segment performance based on Adjusted EBITDA, which is a non-GAAP performance measure defined as Income (loss) from continuing operations before income taxes and equity in net income of affiliates, adding back the following items:

(Loss) gain on sales and disposals of subsidiaries, net , Foreign currency exchange (loss) gain, net , Other income (expense), net , Gain on derivatives , Loss on debt extinguishment , Interest expense , Interest income , Depreciation and amortization expense, Loss on impairment of assets, Share-based compensation expense and expenses related to our Excellence-in-Process (EiP) initiative.

Loss on disposals of subsidiaries, net, Foreign currency exchange gain (loss), net, Other (expense) income, net, (Loss) gain on derivatives, Loss on debt extinguishment, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, Share-based compensation expense and expenses related to our Excellence-in-Process (EiP) initiative.

EiP is an enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources.

It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting.

The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned dispositions described in Note 4 , Discontinued Operations and Assets Held for Sale , and the completed dispositions described in Note 6 , Dispositions and Asset Sales .

The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned dispositions described in Note 4, Discontinued Operations and Assets Held for Sale, and the completed dispositions described in Note 6, Dispositions.

Beginning in 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.

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We use total assets as the measure of assets for reportable segments.

The following tables provide financial information for our reportable segments, including a reconciliation of Adjusted EBITDA to Income (loss) from continuing operations before income taxes and equity in net income (loss) of affiliates , as reported in the Consolidated Statements of Operations, for the years ended December 31, 2019 , 2018 and 2017 :

Rest of World

Online & Partnerships

The following tables provide financial information for our reportable segments, including a reconciliation of Adjusted EBITDA to Loss from continuing operations before income taxes and equity in net income of affiliates, as reported in the Consolidated Statements of Operations, for the years ended December 31, 2020, 2019 and 2018:

Mexico Peru Corporate Total

Revenues $ 534,607 $ 482,878 $ 7,432 $ 1,024,917

Adjusted EBITDA 112,917 189,488 ( 96,708 ) 205,697

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Loss on impairment of assets 989 — 350,982 351,971

Total assets 1,278,198 623,294 3,069,402 4,970,894

Expenditures for long-lived assets 13,377 18,505 8,376 40,258

Revenues $ 652,846 $ 546,751 $ 12,473 $ 1,212,070

Adjusted EBITDA 147,807 197,828 ( 142,014 ) 203,621

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Loss on impairment of assets — — 248 248

Total assets 1,315,377 643,473 4,537,573 6,496,423

Expenditures for long-lived assets 30,239 23,837 18,825 72,901

Revenues $ 646,134 $ 496,368 $ 2,072 $ 1,144,574

Adjusted EBITDA 143,221 169,213 ( 172,875 ) 139,559

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Expenditures for long-lived assets 31,376 28,847 27,279 87,502

As discussed in Note 4 , Discontinued Operations and Assets Held for Sale , a number of our entities have been classified as Discontinued Operations and their assets have been classified as assets held for sale and excluded from the segment information for all periods presented.

Accordingly, in order to reconcile to total consolidated assets as of December 31, 2019 and 2018 in the table above, assets held for sale related to Discontinued Operations of $ 381,297 and $ 1,311,928 , respectively, are included in the Corporate amounts.

In order to reconcile to total consolidated assets as of December 31, 2020 and 2019 in the table above, assets held for sale related to Discontinued Operations of $ 1,917,435 and $ 3,799,126 , respectively, are included in the Corporate amounts.

For the years ended December 31, 2020 2019 2018

Adjusted EBITDA of reportable segments:

Rest of World

Online & Partnerships

Mexico $ 112,917 $ 147,807 $ 143,221

Peru 189,488 197,828 169,213

Total Adjusted EBITDA of reportable segments 302,405 345,635 312,434

Reconciling items:

Corporate ( 96,708 ) ( 142,014 ) ( 172,875 )

Depreciation and amortization expense ( 83,133 ) ( 81,980 ) ( 84,567 )

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Share-based compensation expense ( 10,248 ) ( 10,325 ) ( 6,575 )

Operating income

EiP expenses ( 89,647 ) ( 75,048 ) ( 75,209 )

Operating loss ( 329,302 ) 36,020 ( 26,792 )

Interest income 2,169 3,294 2,814

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Loss on debt extinguishment ( 610 ) ( 22,601 ) ( 7,481 )

Gain on derivatives

Other income (expense), net

Foreign currency exchange (loss) gain, net

(Loss) gain on sales and disposals of subsidiaries, net

Income (loss) from continuing operations before income taxes and equity in net income (loss) of affiliates

(Loss) gain on derivatives ( 25,980 ) 8,300 88,476

Other (expense) income, net ( 2,420 ) 8,922 10,598

Foreign currency exchange gain (loss), net 13,474 ( 8,125 ) 695

Loss on disposals of subsidiaries, net ( 7,276 ) ( 20,429 ) —

Loss from continuing operations before income taxes and equity in net income of affiliates $ ( 450,839 ) $ ( 119,661 ) $ ( 120,121 )

Geographic Information

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External Revenues (1)

Mexico $ 532,530 $ 650,593 $ 643,348

Peru 482,819 545,291 493,008

United States 9,509 15,189 7,720

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Laureate’s long-lived assets of Continuing Operations by geographic area were as follows:

December 31, 2020 2019

Long-lived assets

Mexico $ 229,613 $ 232,380

Peru 323,020 354,100

United States 25,851 54,150

Other foreign countries

Consolidated total $ 578,484 $ 640,630

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The change in the net carrying amount of Goodwill from December 31, 2018 through December 31, 2020 was composed of the following items:

Rest of World

Online & Partnerships

Mexico Peru Total

Balance at December 31, 2018 $ 498,219 $ 80,300 $ 578,519

Reclassification to Long-term assets held for sale

Acquisitions — — —

Impairments — — —

Currency translation adjustments 27,037 927 27,964

Adjustments to prior acquisitions

Balance at December 31, 2019 $ 525,256 $ 81,227 $ 606,483

Reclassification to Long-term assets held for sale

Acquisitions — — —

Impairments — — —

Currency translation adjustments ( 25,006 ) ( 6,645 ) ( 31,651 )

Adjustments to prior acquisitions

Balance at December 31, 2020 $ 500,250 $ 74,582 $ 574,832

In March 2019, the Company's indirect, wholly owned subsidiary, UAM Brazil, acquired a company in Brazil that, prior to the acquisition, was a vendor providing distance-learning and marketing services to the Company's Brazil operations.

The total purchase price was BRL 5,022 ( $ 1,333 at the date of purchase), which was recorded as Goodwill given the immaterial nature of the acquisition.

The acquiree was merged into UAM Brazil.

Other Intangible Assets

Amortization expense for intangible assets subject to amortization was $ 1,352 , $ 5,780 and $ 11,514 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

The estimated future amortization expense for intangible assets for the years ending December 31, 2020 , 2021 , 2022 , 2023 , 2024 and beyond is $ 787 , $ 450 , $ 194 , $ 0 , $ 0 and $ 0 , respectively.

Tradenames and Other Intangible Assets

Amortization expense for intangible assets includes only the finite-lived tradename, as all other intangible assets subject to amortization were fully amortized as of December 31, 2020 and 2019.

Amortization expense was $ 7,583 , $ 0 and $ 0 for the years ended December 31, 2020, 2019 and 2018, respectively.

The estimated future amortization expense for the finite-lived tradename for the years ending December 31, 2021, 2022, 2023, 2024, 2025 and beyond is $ 25,928 , $ 12,954 , $ 12,954 , $ 12,954 , $ 9,715 and $ 0 , respectively.

The following table summarizes our identifiable intangible assets as of December 31, 2020:

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Weighted Average Amortization Period (Yrs)

Subject to amortization:

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (Yrs)

Finite-lived tradename $ 82,088 $ ( 7,583 ) $ 74,505 4.8

Indefinite-lived tradenames 151,068 — 151,068 —

Total tradenames 233,156 ( 7,583 ) 225,573

Other intangible assets

Student rosters 20,239 ( 20,239 ) — —

Not subject to amortization:

Other 1,699 ( 1,699 ) — —

Total $ 255,094 $ ( 29,521 ) $ 225,573

The following table summarizes our identifiable intangible assets as of December 31, 2019:

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Weighted Average Amortization Period (Yrs)

Subject to amortization:

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (Yrs)

Finite-lived tradename $ — $ — $ — —

Indefinite-lived tradenames 562,137 — 562,137 —

Total tradenames 562,137 — 562,137

Other intangible assets

Student rosters $ 21,358 $ ( 21,358 ) $ — —

Not subject to amortization:

The decrease in Other intangible assets in 2019 related primarily to our adoption of ASC Topic 842, which resulted in the reclassification of certain lease intangibles to operating lease ROU assets.

Other 1,792 ( 1,792 ) — —

Total $ 585,287 $ ( 23,150 ) $ 562,137

Impairment Tests

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For the years ended December 31, 2020 2019 2018

Impairments of Tradenames $ 320,000 $ — $ —

Impairments of Goodwill — — —

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Impairments of long-lived assets 31,971 248 —

We perform annual impairment tests of our non-amortizable intangible assets, which consist of goodwill and tradenames, in the fourth quarter of each year.

Total $ 351,971 $ 248 $ —

We perform annual impairment tests of our non-amortizable intangible assets, which consist of goodwill and indefinite-lived tradenames, in the fourth quarter of each year.

The impairment charges discussed below were recorded to reduce the assets' carrying values to fair value.

For the purposes of our annual impairment testing of the Company's goodwill, fair value measurements were determined primarily using the income approach, based largely on inputs that are not observable to active markets, which would be deemed “Level 3” fair value measurements as defined in Note 21 , Fair Value Measurement .

For the purposes of our annual impairment testing of the Company's goodwill, fair value measurements are determined primarily using the income approach, based largely on inputs that are not observable to active markets, which would be deemed “Level 3” fair value measurements as defined in Note 19, Fair Value Measurement.

These inputs include our expectations about future revenue growth and profitability, marginal income tax rates by jurisdiction, and the discount rate.

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We use publicly available information and proprietary third-party arm’s length agreements that Laureate has entered into with various licensors in determining certain assumptions to assist us in estimating fair value using market participant assumptions.

2018 Loss on Impairment of Assets

University of Liverpool

Effective September 30, 2018, the University of Liverpool (Liverpool), an institution in our Online & Partnerships segment, elected not to renew its institutional partnership agreement and therefore the existing agreement will terminate in April 2021.

Accordingly, Liverpool stopped enrolling new students and began a teach-out process that is expected to be completed in April 2021.

As a result, during the third quarter of 2018 we recorded an impairment charge of $ 10,030 related to fixed assets of this entity that are no longer recoverable based on expected future cash flows.

Since Liverpool does not meet the criteria to be classified as held-for-sale or a discontinued operation, its results are reported within continuing operations for all periods presented.

2017 Loss on Impairment of Assets

The 2017 impairment charges related to the impairment of a lease intangible, certain modular buildings and software development costs.

Impairment of Finite-Lived Tradename (Laureate Tradename)

During the third quarter of 2020, the Company recognized an impairment charge of $ 320,000 on the Laureate tradename, an intangible asset.

As described in Note 1, Description of Business, the Company had previously announced that it would explore strategic alternatives for each of its businesses, and, during the third quarter, the Company announced that it had completed a sale of its operations in Chile and that it had signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University.

Because of these events, the Company determined that the useful life of the Laureate tradename asset was no longer indefinite, and, in accordance with ASC 350-30-35-17, the Company tested the asset for impairment.

The Company estimated the fair value of the tradename asset using the relief-from-royalty method, based on the projected revenues for each business over the estimated period that each business would remain part of the Laureate network.

As a result of the impairment test, the Company concluded that the estimated fair value of the Laureate tradename was less than its carrying value by approximately $ 320,000 and recorded an impairment charge for that amount.

The significant assumptions used in estimating the fair value included:

(1) the estimates of revenue projections, including the period of those projections;

(2) the discount rates;

and (3) the estimated royalty rate.

The inputs used were not observable to active markets and are therefore deemed “Level 3” inputs in the fair value hierarchy.

The decrease in the fair value of the tradename was primarily caused by the shortened duration of the estimated future revenues.

As of December 31, 2020, the finite-lived Laureate tradename has a net carrying amount of $ 74,505 and is being amortized over five years , its estimated useful life.

New events or changes in circumstances, such as the signing of additional sale agreements, may be indicators of impairment that would require the Company to perform additional impairment tests.

Impairment of Brazil E2G Software Assets

As part of a transformation initiative for the enrollment to graduation cycle (E2G) that started several years ago, the Company began developing a solution to standardize the information systems and processes in Brazil.

During development, those costs that qualified for capitalization as internal-use software were classified within Construction in-progress on our Consolidated Balance Sheets.

In addition, a portion of the Brazil E2G project costs were deemed to be implementation costs of a hosting arrangement and were capitalized within Other assets on our Consolidated Balance Sheets.

These capitalized costs were recorded on our Brazil and Corporate segments, as most of the Brazil E2G expenditures were made by Corporate.

During the second qu arter of 2020, the Company determined that it was no longer probable that the Brazil E2G project would be completed and placed into service, and that the likelihood that a potential buyer of the Brazil business would utilize this system was low due to its cost and associated complexities.

As stated in ASC 350-40-35-3, there is a presumption that uncompleted software has a fair value of $ 0 .

Accordingly, during the second quarter of 2020, the Company recorded an impairment charge to fully write off the Brazil E2G project assets.

Approximately $ 23,800 of the impairment charge was related to assets recorded on the Corporate segment and is therefore included in Continuing Operations.

The remaining portion of the impairment charge, approximately $ 3,300 , related to assets recorded on the Brazil segment and is therefore included in Discontinued Operations.

Outstanding long-term debt was as follows:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Senior long-term debt:

Senior Secured Credit Facility (stated maturity dates of October 2024 as of December 31, 2019 and April 2022 and April 2024 as of December 31, 2018), net of discount

Senior Secured Credit Facility (stated maturity date October 2024) $ — $ 202,400

Senior Notes (stated maturity date May 2025) 798,725 800,000

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As of December 31, 2020 , aggregate annual maturities of the senior and other debt, excluding finance lease obligations and sale-leaseback financings, were as follows:

Senior and Other Debt

December 31, Senior and Other Debt

2021 $ 90,388

Total senior and other debt $ 996,369

Senior Secured Credit Facility

During the second quarter of 2017, we completed a refinancing of our Senior Secured Credit Facility by means of an amendment and restatement of the existing amended and restated credit agreement (the Second Amended and Restated Credit Agreement) to provide a revolving credit facility that had an original borrowing capacity of $ 385,000 and originally matured in April 2022 (the Revolving Credit Facility), as well as a syndicated term loan of $ 1,600,000 that had a maturity date of April 26, 2024 (the 2024

The prior senior credit facility was fully repaid, and that repayment amount is included in Payments on long-term debt in the Consolidated Statement of Cash Flows for the year ended December 31, 2017, with the exception of approximately $ 283,000 of loan principal related to the prior term loan that was rolled over by certain lenders into the 2024 Term Loan.

Accordingly, that rollover amount was a non-cash transaction.

2024 Term Loan

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The amendment effectively reduced the current interest rate margins applicable to the outstanding term loans, which prior to the amendment were based on the Company’s consolidated total debt to consolidated EBITDA ratio, by 100 basis points, from 4.50 % to 3.50 % for LIBOR term loans, and 3.50 % to 2.50 % for ABR term loans.

As of December 31, 2018 , all loans outstanding under the 2024 Term Loan were LIBOR loans and had a total interest rate of 6.03 % and the total balance outstanding was $ 1,228,129 .

As discussed in Note 6 , Dispositions and Asset Sales , the sale of St.

As discussed in Note 6, Dispositions, the sale of St.

Augustine was completed on February 1, 2019 and the Company used $ 340,000 of the net proceeds to repay a portion of the 2024 Term Loan.

During the second quarter of 2019, the Company fully repaid the remaining balance outstanding under its 2024 Term Loan, using the proceeds received from the sales of its operations in India, Spain and Portugal, as discussed in Note 6 , Dispositions and Asset Sales .

Revolving Credit Facility

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The Third A&R Credit Agreement also provides, subject to the satisfaction of certain conditions, for incremental revolving and term loan facilities, at the request of the Company, not to exceed the greater of (a) $ 565,000 or (b) 100% of the consolidated EBITDA of the Company, plus additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, on a pro forma basis, does not exceed 2.75 x.

In March 2020, we fully drew down the $ 410,000 Revolving Credit Facility, in order to increase our cash position and preserve financial flexibility in light of the COVID-19 pandemic.

During the fourth quarter of 2020, following the sale of our operations in Australia and New Zealand, the Company fully repaid the outstanding balance of the Revolving Credit Facility.

As such, as of December 31, 2020, the Revolving Credit Facility had a total outstanding balance of $ 0 .

As of December 31, 2019, the Revolving Credit Facility had a total outstanding balance of $ 202,400 , which consisted of $ 121,300 of LIBOR Loans that had an average interest rate of 3.61 % and $ 81,100 of ABR loans that had an interest rate of 5.75 %.

Prior to the Third A&R Credit Agreement , the Revolving Credit Facility bore interest at a per annum interest rate, at the option of the Company, at either the LIBO rate or the Alternate Base Rate (ABR) rate plus an applicable margin of 3.75 % per annum or 3.50 % per annum for LIBO rate loans, and 2.75 % per annum or 2.50 % per annum for ABR rate loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Second Amended and Restated Credit Agreement.

As of December 31, 2018 , the Revolving Credit Facility consisted entirely of ABR loans that had an interest rate of 8.25 % , with total outstanding balances of $ 93,500 .

Guarantors of the Senior Secured Credit Facility

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is the borrower under our Senior Secured Credit Facility.

All of Laureate’s required United States legal entities, excluding certain subsidiaries that the Company considers dormant based on the lack of activity, Walden University, LLC (Walden), Kendall, NewSchool of Architecture and Design (NewSchool), and National Hispanic University (NHU), are guarantors of the Senior Secured Credit Facility, and all of the guarantors’ assets, both real and intangible, are pledged as collateral.

All of Laureate’s required United States legal entities, excluding Walden, National Hispanic University (NHU), and certain subsidiaries that the Company considers dormant based on the lack of activity, are guarantors of the Senior Secured Credit Facility, and all of the guarantors’ assets, both real and intangible, are pledged as collateral.

Certain Walden assets are also pledged as collateral, including all of Walden’s United States receivables other than Title IV student loans, all of its copyrights, patents, and trademarks.

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On April 26, 2017, we completed an offering of $ 800,000 aggregate principal amount of 8.250 % Senior Notes due 2025 (the Senior Notes due 2025).The Senior Notes due 2025 were issued at par and will mature on May 1, 2025.

Interest on the Senior Notes due 2025 is payable semi-annually on May 1 and November 1, and the first interest payment date was November 1, 2017.

Interest on the Senior Notes due 2025 is payable semi-annually on May 1 and November 1.

We may redeem the Senior Notes due 2025, in whole or in part, at any time on or after May 1, 2020, at redemption prices starting at 106.188 % of the principal amount thereof and decreasing from there each year thereafter until May 1, 2023, plus accrued and unpaid interest.

From and after May 1, 2023, we may redeem all or part of the Senior Notes due 2025 at a redemption price of 100 %, plus accrued and unpaid interest.

We may also redeem up to 40 % of the Senior Notes due 2025 using the proceeds of certain equity offerings completed before May 1, 2020, at a redemption price equal to 108.250 % of the principal amount thereof, plus accrued and unpaid interest.

In addition, at any time prior to May 1, 2020, we may redeem the Senior Notes due 2025, in whole or in part, at a price equal to 100 % of the principal amount, plus a ‘‘make-whole’’ premium, plus accrued and unpaid interest.

As of December 31, 2019 , the outstanding balance of our Senior Notes due 2025 was $ 800,000 .

As of December 31, 2018 , the outstanding balance of our Senior Notes due 2025 was also $ 800,000 .

On October 13, 2020, the Company announced the commencement of a cash tender offer (the First Asset Sale Offer) to purchase up to $ 300,000 aggregate principal amount of the Senior Notes due 2025, at a purchase price of 100% of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date.

The First Asset Sale Offer was made pursuant to the indenture governing the Senior Notes due 2025 as a result of the Company's sale of its operations in Chile and Malaysia.

The First Asset Sale Offer expired on November 10, 2020.

On November 16, 2020, the Company purchased $ 775

aggregate principal amount, plus accrued and unpaid interest, of the Senior Notes due 2025 that were validly tendered as of the expiration of the First Asset Sale Offer.

On November 12, 2020, following the expiration of the First Asset Sale Offer, the Company announced the commencement of a cash tender offer (the Second Asset Sale Offer) to purchase up to $ 650,000 aggregate principal amount of the Senior Notes due 2025, at a purchase price of 100% of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date.

The Second Asset Sale Offer was made pursuant to the indenture governing the Senior Notes due 2025 as a result of the Company's sale of its operations in Australia and New Zealand.

The Second Asset Sale Offer expired on December 10, 2020.

On December 14, 2020, the Company purchased $ 500 aggregate principal amount, plus accrued and unpaid interest, of the Senior Notes due 2025 that were validly tendered as of the expiration of the Second Asset Sale Offer.

As of December 31, 2020 and 2019, our Senior Notes due 2025 had an outstanding balance of $ 798,725 and $ 800,000 , respectively.

Estimated Fair Value of Debt

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The estimated fair value of our debt was as follows:

December 31, 2019

December 31, 2018

Carrying amount

Estimated fair value

Carrying amount

Estimated fair value

December 31, 2020 December 31, 2019

Carrying amount Estimated fair value Carrying amount Estimated fair value

Total senior and other debt $ 996,369 $ 1,043,294 $ 1,186,250 $ 1,248,110

Senior Notes due 2019 - Note Exchange Transaction

On April 15, 2016 , Laureate entered into separate, privately negotiated note exchange agreements (the Note Exchange Agreements) with certain existing holders (the Existing Holders) of the then-outstanding 9.250 % Senior Notes due 2019 (the Senior Notes due 2019) pursuant to which we agreed to exchange (the Note Exchange) $ 250,000 in aggregate principal amount of Senior Notes due 2019 for shares of the Company's Class A common stock.

The exchange was to be completed within one year and one day after the consummation of an initial public offering of our common stock that generated gross proceeds of at least $ 400,000 or 10 % of the equity value of the Company (a Qualified Public Offering).

On February 6, 2017, the Company completed an initial public offering of its Class A common stock at a price per share of $ 14.00 that qualified as a Qualified Public Offering.

The Note Exchange Agreements provided that, within 60 days after the consummation of a Qualified Public Offering, at the option of the Existing Holders or their transferees, Laureate would repurchase up to an additional $ 62,500 aggregate principal amount of Senior Notes due 2019 at the redemption price set forth in Section 3.07 of the indenture governing the Senior Notes due 2019 that is applicable as of the date of pricing of the Qualified Public Offering, plus accrued and unpaid interest and special interest.

On March 1, 2017, in accordance with the terms of the Note Exchange Agreements, we repurchased Senior Notes due 2019 with an aggregate principal amount of $ 22,556 at a repurchase price of 104.625 % of the aggregate principal amount, for a total payment of $ 23,599 ;

the difference was recognized as Loss on debt extinguishment along with the portion of unamortized debt issuance costs that were written off.

On April 28, 2017, the Company elected to redeem all of its outstanding Senior Notes due 2019 (other than the Exchanged Notes) and on May 31, 2017 (the Redemption Date), the Senior Notes due 2019 (other than the Exchanged Notes) were redeemed.

As described further below, the Exchanged Notes were redeemed on August 11, 2017 .

The aggregate principal amount outstanding of the 9.250 % Senior Notes due 2019 (excluding the Exchanged Notes) was $ 1,125,443 .

The redemption price for the notes that were redeemed was equal to 104.625 % of the principal amount thereof, for a total redemption price of $ 1,177,495 , plus accrued and unpaid interest and special interest to the Redemption Date, for an aggregate payment to holders of the senior notes of $ 1,205,630 .

On August 2, 2017, we sent notices to the holders of these notes indicating that the closing of the exchange contemplated by the Note Exchange Agreements would be consummated on Friday, August 11, 2017 .

On August 11, 2017 , Laureate issued 18,683 shares of Class A common stock, which was equal to 104.625 % of the aggregate principal amount of Senior Notes due 2019 to be exchanged, or $ 261,600 , divided by $ 14.00 , the initial public offering price per share of Class A common stock in the Qualified Public Offering.

Upon completion of the Note Exchange, the Company also paid approximately $ 11,100 to the exchanging holders, an amount equal to the interest and special interest accrued with respect to the Exchanged Notes to, but excluding, the date of consummation of the Note Exchange.

Shares of our Class A common stock issued in the Note Exchange are listed on the Nasdaq Global Select Market.

Certain Covenants

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and (4) limitations on liens, guarantees, loans or investments.

The Third A&R Credit Agreement did not change the financial covenant that the Company was previously subject to under the Second Amended and Restated Credit Agreement.

The Third A&R Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its consolidated senior secured debt to consolidated EBITDA ratio to exceed 3.50x as of the last day of each quarter commencing with the quarter ending December 31, 2019;

provided, that if (i) the Company’s consolidated total debt to consolidated EBITDA ratio is not greater than 4.75 x as of such date and (ii) less than 25 % of the Revolving Credit Facility is utilized as of that date, then such financial covenant shall not apply.

As of December 31, 2019 , we were in compliance with the leverage ratio covenant.

The Third A&R Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, to exceed 3.50 x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter.

The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, is not greater than 4.75 x as of such date and (ii) less than 25 % of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply.

As of December 31, 2020, these conditions were satisfied and, therefore, we were not subject to the leverage ratio.

In addition, indebtedness at some of our locations contain financial maintenance covenants.

We were in compliance with these covenants as of December 31, 2020.

Debt Modification and Loss on Debt Extinguishment

In 2020, the Company recorded a Loss on debt extinguishment of $ 610 related primarily to the write off of a pro-rata portion of the unamortized deferred financing costs associated with repaid debt balances.

In 2019, the Company recorded a Loss on debt extinguishment of $ 22,601 related primarily to the write off of a pro-rata portion of the unamortized deferred financing costs associated with repaid debt balances, as well as the debt discount associated with the 2024 Term Loan.

In 2018, Laureate recorded a Loss on debt extinguishment of $ 7,481 related to the February 1, 2018 amendment of our Senior Secured Credit Facility and the write-off of a pro-rata portion of the term loan’s remaining deferred financing costs in connection with the $ 350,000 principal payment.

As a result of the 2017 refinancing transactions and the note exchange transaction described above, Laureate recorded a Loss on debt extinguishment of $ 8,392 during the year ended December 31, 2017 related primarily to the write off of unamortized deferred financing costs associated with certain lenders that did not participate in the new debt instruments.

In addition, approximately $ 22,800 was charged to General and administrative expenses related to new third-party costs paid in connection with the portion of the refinancing transactions that was deemed to be a modification.

Also in connection with the refinancing transactions, approximately $ 70,800 of new deferred financing costs were capitalized, which related primarily to the excess of the redemption price over the principal amount of the Senior Notes due 2019 that were redeemed and the call premium that applied to a portion of the repaid senior credit facilities.

Debt Issuance Costs

Amortization of debt issuance costs and accretion of debt discounts that are recorded in Interest expense in the Consolidated Statements of Operations totaled approximately $ 12,025 , $ 12,542 and $ 14,100 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Amortization of debt issuance costs and accretion of debt discounts that are recorded in Interest expense in the Consolidated Statements of Operations totaled approximately $ 10,103 , $ 10,370 and $ 11,187 for the years ended December 31, 2020, 2019

and 2018, respectively.

During the years ended December 31, 2020, 2019 and 2018, we paid and capitalized a total of $ 669 , $ 1,368 and $ 61 , respectively, in debt issuance costs.

Certain unamortized debt issuance costs were written off in 2019 , 2018 and 2017 in connection with debt agreement amendments as discussed above.

Certain unamortized debt issuance costs were written off in 2020, 2019 and 2018 in connection with early repayment of debt balances and debt agreement amendments, as discussed above.

As of December 31, 2020 and 2019, our unamortized debt issuance costs were $ 53,292 and $ 62,911 , respectively.

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At December 31, 2020 and 2019, the aggregate outstanding balances on our lines of credit were $ 59,014 and $ 14,542 , respectively.

At December 31, 2019 , we had additional available borrowing capacity under our outstanding lines of credit of $ 26,059 .

At December 31, 2019 , we had one line of credit outstanding that had an interest rate of 7.93 % .

At December 31, 2020, we had zero additional available borrowing capacity under our outstanding lines of credit.

At December 31, 2020, interest rates on our lines of credit ranged from 2.10 % to 7.93 %.

At December 31, 2019, we had one line of credit outstanding that had an interest rate of 7.93 %.

Our weighted-average short-term borrowing rate was 6.13 % and 7.93 % at December 31, 2020 and 2019, respectively.

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The notes payable have varying maturity dates and repayment terms through 2025.

These loans contain certain financial maintenance covenants and Laureate is in compliance with these covenants.

Interest rates on notes payable ranged from 2.10 % to 10.25 % and 5.75 % to 10.25 % at December 31, 2020 and 2019, respectively.

On May 12, 2016, two outstanding loans at Universidad del Valle de México (UVM Mexico) that originated in 2007 and 2012 and were both scheduled to mature in May 2021 were refinanced and combined into one loan.

The maturity date of the combined loan was extended to May 15, 2023 and principal repayments were suspended until May 15, 2018.

The new refinanced loan carried a variable interest rate based on the 28-day Mexican Interbanking Offer Rate (TIIE), plus the applicable margin.

The applicable margin for the interest calculation was established based on the ratio of debt to EBITDA, as defined in the agreement.

Beginning May 15, 2016, interest was paid monthly.

The outstanding balance of the loan on May 12, 2016 was MXN 2,224,600 ( $ 120,527 at that date).

During the year ended December 31, 2019 , this loan was fully repaid.

As of December 31, 2018 , the interest rate on the loan was 11.25 % and the outstanding balance on the loan was $ 102,239 .

In addition to the loans above, in August 2015, UVM Mexico entered into an agreement with a bank for a loan of MXN 1,300,000 (approximately $ 79,000 at the time of the loan).

The loan carried a variable interest rate based on TIIE plus an applicable margin and was scheduled to mature in August 2020.

In August 2015, Universidad del Valle de México (UVM Mexico) entered into an agreement with a bank for a loan of MXN 1,300,000 (approximately $ 79,000 at the time of the loan).

The loan carried a variable interest rate based on the 28-day Mexican Interbanking Offer Rate (TIIE) plus an applicable margin and was scheduled to mature in August 2020.

During December 2017, this loan was paid in full and a new loan in the amount of MXN 1,700,000 (approximately $ 89,000 at the time of the loan) was obtained.

The new loan matures in December 2023 and carries a variable interest rate based on TIIE, plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement ( 9.06 % and 10.50 % as of December 31, 2019 and 2018 , respectively).

Payments on the loan were deferred until December 2018, at which time quarterly principal payments were due, beginning at MXN 42,500 ( $ 2,242 at December 31, 2019 ) and increasing over the term of the loan to MXN 76,500 ( $ 4,035 at December 31, 2019 ), with a balloon payment of MXN 425,000 ( $ 22,419 at December 31, 2019 ) due at maturity.

During the year ended December 31, 2019 this loan was reassigned to another wholly owned subsidiary of the company within Mexico.

The new loan was scheduled to mature in December 2023.

During the year ended December 31, 2019, this loan was reassigned to Estrater, S.A.

de C.V., SOFOM ENR (Estrater), a wholly owned subsidiary of the Company within Mexico.

The loan carries a variable interest rate based on TIIE, plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement ( 5.98 % and 9.06 % as of December 31, 2020 and 2019, respectively).

Quarterly principal payments on the loan commenced in December 2018, beginning at MXN 42,500 ($ 2,139 at December 31, 2020) and increasing over the term of the loan to MXN 76,500 ($ 3,850 at December 31, 2020), with a balloon payment of MXN 425,000 ($ 21,388 at December 31, 2020) due at maturity.

In June 2020, during the COVID-19 pandemic, Esrater and the lender agreed to defer the quarterly loan payments for six months, until December 2020, after which, the principal and interest payments resumed in accordance to the original agreement.

Under the terms of the deferral agreement, the maturity date of the loan was extended by six months to June 22, 2024.

As of December 31, 2020 and December 31, 2019, the outstanding balance of this loan was $ 68,013 and $ 77,569 , respectively.

The Company obtained financing to fund the construction of two new campuses at one of our institutions in Peru, Universidad Peruana de Ciencias Aplicadas.

As of December 31, 2019 and 2018 , the loans had an outstanding balance of $ 14,542 and $ 32,886 , respectively, and a weighted average interest rate of 7.93 % and 7.97 % , respectively.

These loans have varying maturity dates with the final payment due in October 2022.

As of December 31, 2019 and 2018 , $ 0 and $ 14,409 , respectively, of the outstanding balances on the loans were payable to an institutional investor that is a minority shareholder of Laureate.

The Company obtained financing to fund the construction of two new campuses at one of our institutions in Peru, Universidad Peruana de Ciencias Aplicadas (UPC).

As of December 31, 2020 and 2019, one loan remained outstanding, and had an outstanding balance of $ 13,361 and $ 14,542 , respectively.

The remaining loan carries an interest rate of 7.93 % and was originally scheduled to mature in October 2022.

Principal payments, plus accrued and unpaid interest, are made semi-annually in April and October.

During the COVID-19 pandemic, UPC and the lending bank agreed to defer the scheduled 2020 principal payments for one year (the deferral period), and agreed to extend the loan maturity date by one year to October 2023.

During the deferral period, the quarterly interest payments will continue per the terms of the original agreement, and the quarterly principal payments will resume in April 2021.

Laureate has outstanding notes payable at Universidad Privada del Norte (UPN), one of our institutions in Peru.

These loans all have interest rates ranging from 7.85 % to 8.70 % and varying maturity dates through December 2024.

As of December 31, 2020 and 2019, these loans had interest rates ranging from 2.10 % to 7.85 % and 7.85 % to 8.70 %, respectively, and had varying maturity dates through January 2022 and December 2024, respectively.

As of December 31, 2020 and 2019, these loans had a balance of $ 12,694 and $ 23,480 , respectively.

On December 22, 2017, a Laureate subsidiary in Peru entered into an agreement to borrow PEN 247,500 (approximately $ 76,000 at the agreement date).

The loan bears interest at a fixed rate of 6.62 % per annum and matures in December 2022.

The loan bears interest at a fixed rate of 6.62 % per annum and was originally scheduled to mature in December 2022.

Quarterly payments in the amount of PEN 9,281 ($ 2,573 at December 31, 2020) were due from March 2018 through December 2019.

The quarterly payments increase to PEN 14,438 ( $ 4,357 at December 31, 2019 ) in March 2020 through the loan's maturity in December 2022.

As of December 31, 2019 and 2018 , this loan had a balance of $ 52,278 and $ 62,761 , respectively.

Laureate had outstanding notes payable at a real estate subsidiary in Chile.

As of December 31, 2018 , the outstanding balance on the loans was $ 51,700 .

The interest rates on these loans ranged from 3.97 % to 6.20 % per annum as of December 31, 2018 .

These notes were repayable in installments with the final installment due in August 2028.

In February 2019, the Company elected to repay approximately $ 35,000 of the outstanding principal balance of these notes, and the remaining balance was repaid during the fourth quarter of 2019.

On December 20, 2013, Laureate acquired THINK and financed a portion of the purchase price by borrowing AUD 45,000 ( $ 31,176 at December 31, 2019 ) under a syndicated facility agreement in the form of two term loans of AUD 22,500 each.

The syndicated facility agreement also provided for additional borrowings of up to AUD 20,000 ( $ 13,856 at December 31, 2019 ) under a capital expenditure facility and a working capital facility.

The first term loan (Facility A) had a term of five years and principal was payable in quarterly installments of AUD 1,125 ( $ 779 at December 31, 2019 ) beginning on March 31, 2014.

The second term loan (Facility B) had a term of five years and the total principal balance of AUD 22,500 was payable at its maturity date of December 20, 2018.

In June 2016, these loan facilities were amended and restated.

As a result of this amendment and a repayment of AUD 11,000 (approximately $ 8,100 at the date of payment), Facility A was amended to be a term loan of AUD 10,000 ( $ 6,928 at December 31, 2019 ), and principal was repayable in quarterly installments of AUD 833 ( $ 577 at December 31, 2019 ) beginning on September 30, 2016, with the final balance payable at its maturity date of December 20, 2018.

Facility B was amended to be a revolving facility of up to AUD 15,000 ( $ 10,392 at December 31, 2019 ) and any balance outstanding was repayable at its maturity date of December 20, 2018.

The capital expenditure facility and working capital facility provided for total additional borrowings of up to AUD 15,000 ( $ 10,392 at December 31, 2019 ).

In October 2017, these loan facilities were further amended to provide the lender a security interest in all of the assets of Laureate's Australian operations.

In addition, Facility A was converted from a term loan to a loan with a balloon payment due at maturity.

In December 2018, these loan facilities were again amended to extend the maturity date from December 20, 2018 to June 30, 2020.

Facility A bears interest at a variable rate plus a margin of 2.25 % and Facility B bears interest at a variable rate plus a margin of 2.50 % .

Prior to this amendment, Facilities A and B bore interest at variable rates plus margins of 2.50 % and 2.75 % , respectively.

The capital expenditure facility and working capital facility now provide for total additional borrowings of up to AUD 22,000 ( $ 15,242 as of December 31, 2019 ).

As of December 31, 2019 , the interest rates on Facility A and Facility B were 3.23 % and 3.48 % , respectively, and as of December 31, 2018 , the interest rates on Facility A and Facility B were 4.31 % and 4.56 % , respectively.

As of December 31, 2019 and 2018 , $ 14,433 and $ 14,673 , respectively, was outstanding under these loan facilities.

Laureate acquired Faculdades Metropolitanas Unidas Educacionais Ltda.

(FMU) on September 12, 2014 and financed a portion of the purchase price by borrowing amounts under two loans that totaled BRL 259,139 (approximately $ 110,310 at the borrowing date).

The loans require semi-annual principal payments that began at BRL 6,478 ( $ 1,588 at December 31, 2019 ) in October 2014 and increased to a maximum of BRL 22,027 ( $ 5,400 at December 31, 2019 ) beginning in October 2017 and continuing through their maturity dates in April 2021.

As of December 31, 2019 and 2018 , the outstanding balance of these loans was $ 16,199 and $ 28,356 , respectively.

Both loans mature on April 15, 2021 and bear interest at an annual variable rate of CDI plus 3.70 % (approximately 8.10 % and 10.10 % at December 31, 2019 and 2018 , respectively).

On December 20, 2017, a Laureate subsidiary in Brazil entered into an agreement to borrow BRL 360,000 (approximately $ 110,000 at the time of the loan).

The loan is collateralized by real estate and certain trade receivables in Brazil.

The loan bears interest at an annual variable rate of CDI plus 2.55 % per annum ( 6.95 % and 8.95 % at December 31, 2019 and 2018 , respectively) and matures on December 25, 2022.

Quarterly payments in the amount of BRL 13,500 ( $ 3,309 at December 31, 2019 ) are due from March 2019 through December 2019, at which point the quarterly payments increase to BRL 22,500 ( $ 5,516 at December 31, 2019 ) from March 2020 through December 2020, then to BRL 27,000 ( $ 6,619 at December 31, 2019 ) from March 2021 through maturity in December 2022.

The quarterly payments increased to PEN 14,438 ($ 4,003 at December 31, 2020) in March 2020 through the loan's maturity.

In June 2020, the Laureate subsidiary and the lender agreed to defer the quarterly principal payments for one year (the deferral period), and agreed to extend the maturity date of the loan by one year to December 2023.

During the deferral period, the quarterly interest payments will continue per the terms of the original agreement, and the quarterly principal payments will resume in June 2021.

As of December 31, 2020 and 2019, this loan had a balance of $ 44,029 and $ 52,278 , respectively.

In addition to this loan, the same Laureate subsidiary in Brazil entered into two additional loans during the year ended December 31, 2019 totaling BRL 190,000 (approximately $ 47,495 at the time of loan).

These loans have maturity dates of May 2021 and December 2021 and as of December 31, 2019 have an outstanding balance of $ 46,577 .

Laureate conducts a significant portion of its operations at leased facilities.

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Our finance lease agreements are for property and equipment.

The lease assets are included within buildings as well as furniture, equipment and software and the related lease liability is included within debt and finance leases on the consolidated balance sheet.

Operating Leases

Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the 2019 consolidated balance sheet.

Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the consolidated balance sheets.

The terms of our operating leases vary and generally contain renewal options.

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however, the sublease income from these agreements is immaterial.

Supplemental balance sheet information related to leases was as follows:

Classification

December 31, 2019

Operating lease right-of-use assets, net

Buildings, Furniture, equipment and software, net

Supplemental balance sheet information related to leases as of December 31, 2020 and 2019 was as follows:

Leases Classification 2020 2019

Operating Operating lease right-of-use assets, net $ 462,767 $ 521,764

Finance Buildings, Furniture, equipment and software, net 49,237 25,962

Total leased assets $ 512,004 $ 547,726

Current portion of operating leases

Current portion of long-term debt and finance leases

Long-term operating leases, less current portion

Long-term debt and finance leases, less current portion

Operating Current portion of operating leases 44,631 42,039

Finance Current portion of long-term debt and finance leases 5,430 2,314

Operating Long-term operating leases, less current portion 474,507 516,979

Finance Long-term debt and finance leases, less current portion 47,209 25,788

Total lease liabilities $ 571,777 $ 587,120

Lease Term and Discount Rate 2020 2019

December 31, 2019

Weighted average remaining lease terms

Operating leases

Finance leases

Operating leases 9.9 years 6.5 years

Finance leases 14.5 years 5.3 years

Weighted average discount rate

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Finance leases 9.50 % 4.50 %

The components of lease cost were as follows:

Classification

For the year ended December 31, 2019

Operating lease cost

The components of lease cost for the years ended December 31, 2020 and 2019 were as follows:

Lease Cost Classification 2020 2019

Operating lease cost Direct costs $ 68,488 $ 75,622

Finance lease cost

Amortization of leased assets

Interest on leased assets

Interest expense

Short-term lease costs

Variable lease costs

Sublease income

Amortization of leased assets Direct costs 4,484 2,609

Interest on leased assets Interest expense 2,750 1,831

Short-term lease costs Direct costs 1,121 904

Variable lease costs Direct costs ( 877 ) 2,595

Sublease income Revenues ( 890 ) ( 2,826 )

Total lease cost $ 75,076 $ 80,735

Rent Concessions

The Company has taken actions with respect to certain of its existing leases, including engaging with landlords to discuss rent deferrals, as well as other rent concessions.

Consistent with the updated guidance from the Financial Accounting Standards Board (FASB) in April 2020, the Company has elected the practical expedient for rent concessions where the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract.

In those cases, the Company treated the rent concessions as if there were no modification to the lease contract and accounted for these rent concessions as variable lease payments.

As of December 31, 2020, maturities of lease liabilities were as follows:

Maturity of Lease Liability

Operating Leases

Finance Leases

Maturity of Lease Liability Operating Leases Finance Leases

Year 1 $ 91,461 $ 9,724

Year 2 87,231 9,143

Year 3 84,988 8,448

Year 4 83,941 6,319

Year 5 82,191 4,915

Thereafter 338,167 85,403

Total lease payments $ 767,979 $ 123,952

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Present value of lease liabilities $ 519,138 $ 52,638

Supplemental cash flow information related to leases was as follows for the year ended December 31, 2019 :

Supplemental cash flow information related to leases for the years ended December 31, 2020 and 2019 was as follows:

Other Information 2020 2019

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Leased assets obtained for new operating lease liabilities $ 13,565 $ 10,038

As previously disclosed in our 2018 Form 10-K, prior to the adoption of ASC Topic 842, rent expense, net of sublease income, for all cancellable and noncancellable leases was $ 169,172 and $ 170,099 for the years ended December 31, 2018 and 2017, respectively.

Future minimum lease payments at December 31, 2018, by year and in aggregate, under all noncancellable operating leases were as follows:

Lease Payments

Commitments and Contingencies

Noncontrolling Interest Holder Put Arrangements

The following section provides a summary table and description of the various noncontrolling interest holder put arrangements, which relate to Discontinued Operations, that Laureate had outstanding as of December 31, 2019 .

Laureate has elected to accrete changes in the arrangements’ redemption values over the period from the date of issuance to the earliest redemption date.

The redeemable noncontrolling interests are recorded at the greater of the accreted redemption value or the traditional noncontrolling interest.

Until the first exercise date, the put instruments’ reported values may be lower than the final amounts that will be required to settle the minority put arrangements.

If the minority put arrangements were all exercised at December 31, 2019 , Laureate would be obligated to pay the noncontrolling interest holders an estimated amount of $ 10,581 , as summarized in the following table:

Nominal Currency

First Exercisable Date

Estimated Value as of December 31, 2019 redeemable within

Noncontrolling interest holder put arrangements

INTI Education Holdings Sdn Bhd (Inti Holdings) - 10.10%

Total noncontrolling interest holder put arrangements

Puttable common stock - not currently redeemable

Total redeemable noncontrolling interests and equity

* Contingently redeemable

Malaysian Ringgit

Laureate’s noncontrolling interest put arrangements are specified in agreements with each noncontrolling interest holder.

The terms of these agreements determine the measurement of the redemption value of the put options based on a non-GAAP measure

of earnings before interest, taxes, depreciation and amortization (EBITDA, or recurring EBITDA), the definition of which varies for each particular contract.

Commitments and contingencies are generally denominated in foreign currencies.

Inti Holdings

As part of the acquisition of INTI, formerly known as Future Perspective, Sdn Bhd, a higher education institution with five campuses in Malaysia, the noncontrolling interest holders of INTI had put options denominated in MYR to require the Company to purchase the remaining noncontrolling interest.

As of December 31, 2019 , there is one put option remaining for the holder of the 10.10 % minority interest.

The put option for the 10.10 % noncontrolling interest holder is exercisable for the 30 -day period commencing after issuance of the audited financial statements for each of the years ending December 31, 2012 through December 31, 2025.

The holder may exercise his option to sell all of his equity interest to the Company for a purchase price that is equal to defined multiples of recurring EBITDA.

Purchase price multiples have been defined as eight times up to the first MYR 40,000 (approximately $ 9,670 at December 31, 2019 ) of EBITDA plus six times EBITDA above this amount.

This put option expires after the 30 -day period related to delivery of the 2025 audited financial statements.

As of December 31, 2019 , the Company recorded $ 10,581 for this arrangement in Redeemable noncontrolling interests and equity on its Consolidated Balance Sheet.

Puttable Common Stock - Director Stockholder Put (Not Currently Redeemable)

Each of the individual director stockholders of Laureate has entered into a stockholder’s agreement with Laureate and Wengen.

The director stockholder's agreement makes all shares of common stock subject to a stockholder put option at the fair market value of the stock.

The stockholder put option is only exercisable upon the loss of capacity to serve as a director due to death or disability (as defined in the stockholder’s agreement).

The director stockholder put option expires only upon a change in control of Laureate.

Since the put option can only be exercised upon death or disability, we account for the common stock as contingently redeemable equity instruments that are not currently redeemable and for which redemption is not probable.

Accordingly, the redeemable equity instruments are presented in temporary equity based on their initial measurement amount, as required by ASC 480-10-S99, “Distinguishing Liabilities from Equity - SEC Materials.” No subsequent adjustment of the initial measurement amounts for these contingently redeemable securities is necessary unless the redemption of these securities becomes probable.

Accordingly, the amount presented as temporary equity for the contingently redeemable common stock outstanding is its issuance-date fair value.

As of December 31, 2019 and 2018 , $ 1,714 and $ 1,713 , respectively, of contingently redeemable common stock attributable to director stockholder puts was included in Redeemable noncontrolling interests and equity on the Consolidated Balance Sheets.

Loss Contingencies

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Changes in the recorded values of non-income tax contingencies impact operating income and interest expense, while changes in the related indemnification assets impact only operating income.

The total (decreases)/increases to operating income for adjustments to non-income tax contingencies and indemnification assets were $( 9,393 ) , $( 6,884 ) , and $ 2,586 for the years ended December 31, 2019 , 2018 and 2017 , respectively.

The total decrease to operating income for adjustments to non-income tax contingencies and indemnification assets was $ 5,619 , $ 6,381 , and $ 4,166 for the years ended December 31, 2020, 2019 and 2018, respectively.

In addition, as of December 31, 2020 and 2019, Laureate has recorded cumulative liabilities for income tax contingencies of $ 40,668 and $ 51,442 , respectively, of which $ 11,752 and $ 21,429 , respectively, were classified as held for sale.

Income tax contingencies are disclosed further in Note 14, Income Taxes.

As of December 31, 2019 and 2018 , indemnification assets primarily related to acquisition contingencies were $ 69,040 and $ 82,061 , respectively, of which $ 0 and $ 476 , respectively, were classified

as held for sale.

As of December 31, 2020 and 2019, indemnification assets primarily related to acquisition contingencies were $ 55,940 and $ 69,040 , respectively, of which $ 40,877 and $ 46,284 , respectively, were classified as held for sale.

These indemnification assets primarily cover contingencies for income taxes and taxes other-than-income taxes.

We have also recorded a receivable of approximately $ 19,000 as of December 31, 2019 and 2018 from the former owner of one of our Brazil institutions which is guaranteed by future rental payments to the former owner.

We have also recorded receivables, which are classified as held for sale, of approximately $ 14,000 and $ 19,000 as of December 31, 2020 and 2019, respectively, from the former owner of one of our Brazil institutions which is guaranteed by future rental payments to the former owner.

We have identified certain contingencies, primarily tax-related, that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable.

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In addition, as of December 31, 2020 and 2019, approximately $ 23,800 and $ 26,300 , respectively, of loss contingencies were classified as liabilities held for sale.

The decrease is primarily related to the reversal of loss contingencies recorded in 2018 in connection with the sale of LEILY in China, as discussed in Note 6 , Dispositions and Asset Sales .

During the first quarter of 2019, loss contingencies were reversed following the settlement of a legal matter related to LEILY with no cost to the Company, resulting in additional gain on sale.

Material Guarantees – Student Financing

The accredited Chilean institutions in the Laureate network participate in a government-sponsored student financing program known as Crédito con Aval del Estado (the CAE Program).

The CAE Program was formally implemented by the Chilean government in 2006 to promote higher education in Chile for lower socio-economic level students in good academic standing.

The CAE Program involves tuition financing and guarantees that are provided by our institutions and the government.

As part of the CAE Program, these institutions provide guarantees which result in contingent liabilities to third-party financing institutions, beginning at 90% of the tuition loans made directly to qualified students enrolled through the CAE Program and declining to 60% over time.

The guarantees by these institutions are in effect during the period in which the student is enrolled , and the guarantees are assumed entirely by the government upon the student’s graduation.

When a student leaves one of Laureate's institutions and enrolls in another CAE-qualified institution, the Laureate institution will remain guarantor of the tuition loans that have been granted up to the date of transfer, and until the student's graduation from a CAE-qualified institution.

The maximum potential amount of payments our institutions could be required to make under the CAE Program was approximately $ 474,000 and $ 499,000 at December 31, 2019 and 2018 , respectively.

This maximum potential amount assumes that all students in the CAE Program do not graduate, so that our guarantee would not be assigned to the government, and that all students default on the full amount of the CAE-qualified loan balances.

As of December 31, 2019 and 2018 , we recorded $ 30,887 and $ 28,254 , respectively, as estimated long-term guarantee liabilities for these obligations.

Material Guarantees – Other

In conjunction with the purchase of Universidade Potiguar (UNP) in Brazil, Laureate pledged all of the acquired shares as a guarantee of our payments of rents as they become due.

In the event that we default on any payment, the pledge agreement provides for a forfeiture of the relevant pledged shares.

In the event of forfeiture, Laureate may be required to transfer the books and management of UNP to the former owners.

Laureate acquired the remaining 49 % ownership interest in UAM Brazil in April 2013.

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As of December 31, 2020 and 2019, Laureate's outstanding letters of credit (LOCs) and surety bonds primarily consisted of the items discussed below.

As of December 31, 2019 and 2018 , we had approximately $ 127,300 and $ 139,000 , respectively, posted as LOCs in favor of the DOE.

As of December 31, 2019 , the amount required by the DOE to be posted was approximately $ 125,800 .

These LOCs were required to allow Walden and NewSchool, and, in 2018, St.

Augustine to participate in the DOE Title IV program.

These LOCs are recorded on Walden and a corporate entity and are fully collateralized with cash equivalents and certificates of deposit, which are classified as Restricted cash on our December 31, 2019 and 2018 Consolidated Balance Sheets.

As of December 31, 2019 and 2018 , we had EUR 5,036 (approximately $ 5,600 at December 31, 2019) posted as cash collateral for LOCs related to the Spain Tax Audits, which was recorded in Continuing Operations and classified as Restricted cash on our Consolidated Balance Sheets.

The cash collateral is related to the final assessment issued by the Spanish Taxing Authority (STA) in October 2018 for the 2011 to 2013 tax audit period.

As of December 31, 2020 and 2019, we had approximately $ 83,600 and $ 127,300 , respectively, posted as an LOC in favor of the DOE.

This LOC was required to allow Walden and, in 2019, NSAD, to participate in the DOE Title IV program.

As of December 31, 2020, the restricted cash used to collateralize this letter of credit was held by a corporate entity.

As of December 31, 2019, the restricted cash used to collateralize the letter of credit was primarily held by Walden.

Because Walden is classified as a discontinued operation, its restricted cash balances were included in Current assets held for sale on the Consolidated Balance Sheets.

As of December 31, 2020 and 2019, we had EUR 9,443 (approximately $ 11,500 at December 31, 2020) and EUR 5,036 (approximately $ 5,500 at December 31, 2019), respectively, posted as cash collateral for LOCs related to the Spain Tax Audits.

This was recorded in Continuing Operations and classified as Restricted cash on our December 31, 2020 and 2019 Consolidated Balance Sheets.

The cash collateral is related to final assessments issued by the Spanish Taxing Authority (STA) in October 2018 and January 2020 to Iniciativas Culturales de España, S.L.

In addition, on March 11, 2020, ICE received a preliminary assessment of approximately EUR 21,600 (approximately $ 26,400 at December 31, 2020), related to the STA’s extension of their audit to review withholding taxes on income earned by nonresidents.

This assessment is not final, and ICE intends to challenge the assessment before the STA.

ICE was formerly our Spanish holding company;

during the second quarter of 2020, ICE was migrated to the Netherlands and its name was changed to Laureate Netherlands Holding B.V.

As part of our normal operations, our insurers issue surety bonds on our behalf, as required by various state education authorities in the United States.

We are obligated to reimburse our insurers for any payments made by the insurers under the surety bonds.

As of December 31, 2019 and 2018 , the total face amount of these surety bonds was $ 25,582 and $ 22,204 , respectively.

These bonds are fully collateralized with cash, which is classified as Restricted cash on our December 31, 2019 and 2018 Consolidated Balance Sheets.

As of December 31, 2020 and 2019, the total face amount of these surety bonds, which are fully collateralized with cash, was $ 17,094 and $ 25,582 , respectively.

In November 2016, in order to continue participating in Prouni, a federal program that offers tax benefits designed to increase higher education participation rates in Brazil, UAM Brazil posted a guarantee in the amount of $ 15,300 .

In connection with the issuance of the guarantee, UAM Brazil obtained a non-collateralized surety bond from a third party in order to secure the guarantee.

In connection with the

issuance of the guarantee, UAM Brazil obtained a non-collateralized surety bond from a third party in order to secure the guarantee.

The cost of the surety bond was $ 1,400 , of which half was reimbursed by the former owner of UAM Brazil, and is being amortized over the five-year term.

The Company believes that this matter will not have a material impact on our Consolidated Financial Statements.

Financing Receivables

Laureate’s financing receivables consist primarily of trade receivables related to student tuition financing programs with an initial term in excess of one year.

We have offered long-term financing through the execution of note receivable agreements with students at some of our institutions.

Our disclosures include financing receivables that are classified in our Consolidated Balance Sheets as both current and long-term, reported in accordance with ASC 310, “Receivables.”

Laureate’s financing receivables balances were as follows:

December 31, 2019

December 31, 2018

Financing receivables

Allowance for doubtful accounts

Financing receivables, net of allowances

We do not purchase financing receivables in the ordinary course of our business.

We may sell certain receivables that are significantly past due.

No material amounts of financing receivables were sold during the periods reported herein.

Delinquency is the primary indicator of credit quality for our financing receivables.

Receivable balances are considered delinquent when contractual payments on the loan become past due.

Delinquent financing receivables are placed on non-accrual status for interest income.

The accrual of interest is resumed when the financing receivable becomes contractually current and when collection of all remaining amounts due is reasonably assured.

We record an Allowance for doubtful accounts to reduce our financing receivables to their net realizable value.

The Allowance for doubtful accounts is based on the age of the receivables, the status of past-due amounts, historical collection trends, current economic conditions, and student enrollment status.

Each of our institutions evaluates its balances for potential impairment.

We consider impaired loans to be those that are past due one year or greater, and those that are modified as a troubled debt restructuring (TDR).

The aging of financing receivables grouped by country portfolio was as follows:

As of December 31, 2019

Amounts past due less than one year

Amounts past due one year or greater

Total past due (on non-accrual status)

Total financing receivables

As of December 31, 2018

Amounts past due less than one year

Amounts past due one year or greater

Total past due (on non-accrual status)

Total financing receivables

The following is a rollforward of the Allowance for doubtful accounts related to financing receivables for the years ended December 31, 2019 , 2018 , and 2017 , grouped by country portfolio:

Balance at December 31, 2016

Currency adjustments

Balance at December 31, 2017

Currency adjustments

Balance at December 31, 2018

Currency adjustments

Balance at December 31, 2019

Restructured Receivables

A TDR is a financing receivable in which the borrower is experiencing financial difficulty and Laureate has granted an economic concession to the student debtor that we would not otherwise consider.

When we modify financing receivables in a TDR, Laureate typically offers the student debtor an extension of the loan maturity and/or a reduction in the accrued interest balance.

situations, we may offer to restructure a financing receivable in a manner that ultimately results in the forgiveness of contractually specified principal balances.

Our only TDRs are in Chile.

The number of financing receivable accounts and the pre- and post-modification account balances modified under the terms of a TDR during the years ended December 31, 2019 , 2018 and 2017 were as follows:

Number of Financing Receivable Accounts

Pre-Modification Balance Outstanding

Post-Modification Balance Outstanding

The preceding table represents accounts modified under the terms of a TDR during the year ended December 31, 2019 , whereas the following table represents accounts modified as a TDR between January 1, 2018 and December 31, 2019 that defaulted during the year ended December 31, 2019 :

Number of Financing Receivable Accounts

Balance at Default

The following table represents accounts modified as a TDR between January 1, 2017 and December 31, 2018 that defaulted during the year ended December 31, 2018 :

Number of Financing Receivable Accounts

Balance at Default

The following table represents accounts modified as a TDR between January 1, 2016 and December 31, 2017 that defaulted during the year ended December 31, 2017 :

Number of Financing Receivable Accounts

Balance at Default

Share-based Compensation and Equity

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The total shares authorized under the 2007 Plan were 9,232 .

Shares that were forfeited, terminated, canceled, allowed to

expire unexercised, withheld to satisfy tax withholding, or repurchased were available for re-issuance.

Shares that were forfeited, terminated, canceled, allowed to expire unexercised, withheld to satisfy tax withholding, or repurchased were available for re-issuance.

Any awards that were not vested upon termination of employment for any reason were forfeited.

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The 2007 Plan’s restricted stock awards have a claw-back feature whereby all vested shares, or the gross proceeds from the sale of those shares, must be returned to Laureate for no consideration if the employee does not abide by the agreed-upon restrictive covenants such as covenants not to compete and covenants not to solicit.

As of December 31, 2019 and 2018, all outstanding awards that were granted under the 2007 Plan are fully vested.

Stock Options Under 2007 Plan

Stock option awards under the 2007 Plan have a contractual life of 10 years and were granted with an exercise price equal to the fair market value of Laureate’s stock at the date of grant.

Our option agreements generally divided each option grant equally into options that were subject to time-based vesting (Time Options) and options that were eligible for vesting based on achieving pre-determined performance targets (Performance Options).

The Time Options generally vested ratably on the first through fifth grant date anniversary.

The Performance Options were divided into tranches and were eligible to vest annually upon the Board's determination that Laureate had attained the performance targets.

Compensation expense was recognized over the period during which the employee was required to provide service in exchange for the award, which was usually the vesting period.

For Time Options, expense was recognized ratably over the five -year vesting period.

For Performance Options, expense was recognized under a graded expense attribution method, to the extent that it was probable that the stated annual performance target would be achieved and options would vest for any year.

As of December 31, 2020, 2019 and 2018, all outstanding awards that were granted under the 2007 Plan are fully vested.

2013 Long-Term Incentive Plan

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Any accrued but unpaid dividends on unvested restricted stock shall be forfeited upon termination of employment.

Holders of stock units do not have any rights of a stockholder of common stock and are not entitled to receive dividends.

Holders of stock units do not have any rights of a stockholder of common stock and are not entitled

to receive dividends.

All awards outstanding under the 2013 Plan terminate upon the liquidation, dissolution or winding up of Laureate.

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(b) those performance-based stock options and stock appreciation rights that would have vested and become exercisable had Laureate achieved the performance targets in the three fiscal years ending coincident with or immediately subsequent to the effective time of such change in control, excluding the portion of awards that would have vested only pursuant to any catch-up provisions, would become fully vested and immediately exercisable;

(c) those time-based restricted stock awards that would have become vested and free of forfeiture risk and lapse restriction on or prior to the third anniversary

of the effective time of such change in control would become fully vested and immediately exercisable;

(c) those time-based restricted stock awards that would have become vested and free of forfeiture risk and lapse restriction on or prior to the third anniversary of the effective time of such change in control would become fully vested and immediately exercisable;

(d) those performance-based restricted stock awards that would have vested and become free of forfeiture risk and lapse restrictions had Laureate achieved the target performance in the three fiscal years ending coincident with or immediately subsequent to the effective time of such change in control would become fully vested and immediately exercisable;

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These options typically vest over a period of five or three years .

There were no stock options granted in 2020.

Of the options granted in 2019 and 2018, 698 and 690 , respectively, are Time Options and the remainder are Performance Options.

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We assess the probability of each option tranche vesting throughout the life of each grant.

Executive Profits Interests - Stock Option Grant

On January 31, 2017, in connection with the Executive Profits Interests (EPI) agreement, we granted our then-CEO options (the EPI Options) to purchase 2,773 shares of our Class B common stock.

The EPI Options vested upon consummation of the IPO on February 6, 2017 .

The exercise price of the EPI Options was equal to (i) $ 17.00 with respect to 50 % of the shares of Class B common stock subject to the EPI Option and (ii) $ 21.32 with respect to 50 % of the shares of Class B common stock subject to the EPI Option.

The Company recorded approximately $ 14,600 of share-based compensation expense for the EPI Options in the first quarter of 2017.

The EPI Options were exercisable until December 31, 2019.

Prior to their expiration, the EPI options with the exercise price of $ 17.00 were exercised.

The remaining EPI options expired unexercised.

Amendment to 2013 Long-Term Incentive Plan

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On June 19, 2017, the holder of the majority of the voting power of the Company's outstanding stock (the Majority Holder) approved by written consent the amended and restated 2013 Plan and it became effective.

Equity Award Modifications

Stock Option Repricings

On June 19, 2017 , the Board and the Majority Holder approved a stock option repricing (the Option Repricing).

Pursuant to the Option Repricing, the exercise price of each Relevant Option (as defined below) was amended to reduce such exercise price to the average closing price of a share of the Company's Class A common stock as reported on the Nasdaq Global Select Market over the 20 calendar-day period following the mailing of the Notice and Information Statement to our stockholders.

The average closing price of the Company's Class A common stock over such 20 -day period was $ 17.44 ;

accordingly, the exercise price of the Relevant Options was adjusted to $ 17.44 .

Relevant Options were all outstanding stock options as of June 19, 2017 (vested or unvested) to acquire shares of Class B common stock granted under the 2013 Plan during calendar years 2013 through 2016, and totaled approximately 5,300 options.

Since the modification of the terms of the awards occurred on June 19, 2017 , the Company recorded incremental stock compensation expense during the second quarter of 2017 of approximately $ 5,100 for options that were vested at the modification date.

Additionally, approximately $ 2,500 of incremental stock compensation expense related to options that were not yet vested at the modification date was recognized over the remaining vesting period.

Stock Option Modifications

During the third and fourth quarters of 2017, we extended the post-employment exercise periods of vested stock options for several executives in connection with their separation from the Company.

We accounted for the extension as a modification of an equity award under ASC 718.

Accordingly, we recognized incremental stock compensation expense of approximately $ 15,000 in 2017.

Stock Option Activity for 2007 and 2013 Plans

The following tables summarize the stock option activity and the assumptions used to record the related share-based compensation expense for the years ended December 31, 2020, 2019 and 2018:

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average Exercise Price

Aggregate Intrinsic Value

2020 2019 2018

Options Weighted Average Exercise Price Aggregate Intrinsic Value Options Weighted Average Exercise Price Aggregate Intrinsic Value Options Weighted Average Exercise Price Aggregate Intrinsic Value

Outstanding at January 1 5,388 $ 18.18 $ 3,396 9,020 $ 18.79 $ 744 9,903 $ 19.30 $ —

Granted — — 698 14.99 717 14.27

Exercised ( 860 ) 17.60 2,353 ( 1,569 ) 16.95 794 — — —

Forfeited or expired ( 1,100 ) 19.66 ( 2,761 ) 20.06 ( 1,600 ) 19.92

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Vested and expected to vest 3,426 17.85 159 5,274 18.20 3,344 8,990 18.80 722

Options Outstanding

Options Exercisable

Assumption Range*

Exercise Prices

Terms (Years)

Interest Rate

Options Outstanding Options Exercisable Assumption Range*

Exercise Prices Number

of Shares Weighted

Terms (Years) Number

of Shares Weighted

Terms (Years) Risk-Free

Interest Rate Expected

in Years Expected

Year Ended December 31, 2020

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39.03 % - 53.80 %

0.60% - 3.03%

36.93% - 53.80%

Year Ended December 31, 2019

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36.93 % - 53.80 %

$22.88 - $31.92

0.73% - 2.86%

39.03% - 53.80%

* The expected dividend yield is zero for all options in all years.

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The following table summarizes the non-vested restricted stock and restricted stock units activity for the years ended December 31, 2020, 2019 and 2018:

Weighted Average Grant Date Fair Value

2020 2019 2018

Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value

Non-vested at January 1 1,251 $ 14.69 1,895 $ 15.31 1,650 $ 19.74

Granted 969 15.80 1,003 15.10 1,306 14.11

Vested ( 861 ) 14.11 ( 765 ) 16.18 ( 853 ) 21.66

Forfeited ( 359 ) 15.95 ( 882 ) 15.20 ( 208 ) 17.41

Non-vested at December 31 1,000 15.81 1,251 14.69 1,895 15.31

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PSUs are eligible to vest annually upon the Board's determination that the annual performance targets are met.

The performance

targets are the same as for Performance Options, as defined in the 2013 Plan, except for targets set for certain PSUs granted in 2016.

The performance targets are the same as for Performance Options, as defined in the 2013 Plan, except for targets set for certain PSUs granted in 2016.

The vesting percentage for those PSUs is based on LEI’s attainment of a performance level:

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Of the total unrecognized cost, $ 5,331 relates to time-based RSUs, $ 2,967 relates to PSUs and $ 2 related to market-condition-based restricted stock units.

This unrecognized expense for time-based restricted stock and restricted stock units will be recognized over a weighted-average expense period of 1.7 years .

This unrecognized expense for time-based restricted stock and restricted stock units will be recognized over a weighted-average expense period of 1.0 year.

Other Stockholders' Equity Transactions

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The total BCF of $ 265,368 was accreted using a constant yield approach over a one-year period.

For the years ended December 31, 2018 and 2017 , we recorded total accretion of the BCF and dividends of $ 61,974 and $ 292,450 , respectively.

For the year ended December 31, 2018, we recorded total accretion of the BCF and dividends of $ 61,974 .

On April 23, 2018, all of the issued and outstanding shares of the Series A Preferred Stock were converted into 36,143 shares of the Company’s Class A common stock, par value $ 0.004 per share.

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Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.

In September 2019, Wengen converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 15,000 shares of Class A common stock in a secondary offering at a price

of $ 16.85 per share, prior to underwriting discounts and commissions.

Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.

Stock Repurchase Program

As previously disclosed, on August 8, 2019 , the Company announced that its board of directors had authorized a stock repurchase program to acquire up to $ 150,000 of the Company’s Class A common stock.

On August 8, 2019, the Company announced that its board of directors had authorized a stock repurchase program to acquire up to $ 150,000 of the Company’s Class A common stock.

In early October 2019, the Company's stock repurchases reached the authorized limit of $ 150,000 .

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The Company’s repurchases were made in a block trade, as well as on the open market at prevailing market prices and pursuant to a Rule 10b5-1 stock repurchase plan, in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act).

In January 2020, the Company's stock repurchases reached the total authorized limit of $ 300,000 .

In January 2020, the Company repurchased 1,619 shares of its outstanding Class A common stock for a total purchase price of $ 29,203 and reached the total authorized limit of $ 300,000 .

On November 5, 2020, Laureate’s board of directors announced a new stock repurchase program to acquire up to $ 300,000 of the Company’s Class A common stock.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act.

Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

The Company’s board of directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.

The Company intends to finance the repurchases with free cash flow and excess cash and liquidity on-hand.

Derivative Instruments

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The interest and principal payments for Laureate’s senior long-term debt arrangements are to be paid primarily in USD.

Our ability to make debt payments is subject to fluctuations in the value of the USD against foreign currencies, since a majority of our operating cash used to make these payments is generated by subsidiaries with functional currencies other than USD.

Our ability to make debt payments is subject to fluctuations in the value of the USD against foreign currencies, since a majority of

our operating cash used to make these payments is generated by subsidiaries with functional currencies other than USD.

As part of our overall risk management policies, Laureate has at times entered into foreign currency swap contracts and floating-to-fixed interest rate swap contracts.

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For derivatives that are both designated and effective as net investment hedges, gains or losses associated with the change in fair value of the derivatives are recognized on our Consolidated Balance Sheets as a component of AOCI.

As of December 31, 2019 , we held no derivatives.

The reported fair values of our derivatives, which are classified in Derivative instruments on our Consolidated Balance Sheets, were as follows:

December 31, 2019

December 31, 2018

Derivatives designated as hedging instruments:

Long-term assets:

Net investment cross currency swaps

December 31, 2020 December 31, 2019

Derivatives not designated as hedging instruments:

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Long-term liabilities:

Cross currency and interest rate swaps

Cross currency swaps 8,144 —

Total derivative instrument assets $ — $ —

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Both swaps had an effective date of December 22, 2017 and a maturity date of November 2, 2020, and were designated at inception as effective net investment hedges.

In April 2019, the Company terminated both EUR-USD cross currency swaps for a net settlement received of $ 7,679 , which is included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on our consolidated statement of cash flows.

The terms of the swaps specified that at maturity on the first swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $ 59,210 at an implied exchange rate of 1.1842 and at maturity on the second swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $ 59,360 at an implied exchange rate of 1.1872 .

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The accumulated gain recognized in AOCI will be deferred from earnings until the sale or liquidation of the hedged investee.

As of December 31, 2018 , these swaps had an estimated fair value of $ 3,259 , which was recorded in Derivative Instruments as a long-term asset.

Cash Flow Hedge - 2024 Term Loan Interest Rate Swaps

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These notional amounts matched the corresponding principal of the 2024 Term Loan borrowings of which these swaps were effectively hedging the interest payments.

As such, the notional values amortized annually based on the terms of the agreements to match the principal borrowings as they were repaid.

As such, the notional values amortized annually based on the terms of the agreements to match the principal

borrowings as they were repaid.

These swaps effectively fixed the floating interest rate on the term loan to reduce exposure to variability in cash flows attributable to changes in the USD-LIBOR-BBA swap rate.

All four swaps were fully settled on August 21, 2018, prior to their May 31, 2022 maturity date, with the remaining AOCI to be ratably reclassified into income through Interest expense over the remaining maturity period of the 2024 Term Loans.

The cash received at settlement from the swap counterparties was $ 14,117 , which is included in (Payments for) proceeds from settlement of derivative contracts on the consolidated statement of cash flows.

The cash received at settlement from the swap counterparties was $ 14,117 , which is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2018.

During the second quarter of 2019, the Company accelerated the reclassification of amounts in AOCI to earnings as a result of the hedged forecasted transactions becoming probable not to occur, due to the full repayment of the 2024 Term Loan in June 2019 using proceeds from the sale of our institutions in Portugal and Spain.

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The impact of these derivative instruments on Comprehensive income, Interest expense and AOCI for the years ended December 31, 2020, 2019 and 2018 were as follows:

(Loss) Gain Recognized in Comprehensive Income (Effective Portion)

Income Statement Location

Gain (Loss) Reclassified

(Loss) Gain Recognized in Comprehensive Income (Effective Portion) Income Statement Location Gain Reclassified

from AOCI to Income

(Effective Portion)

Total Consolidated Interest Expense

(Effective Portion) Total Consolidated Interest Expense

2020 2019 2018 2020 2019 2018 2020 2019 2018

Cash flow hedge

Interest rate swaps

Interest expense

Interest rate swaps $ — $ ( 11,818 ) $ 5,772 Interest expense $ — $ 11,818 $ 2,446

Net investment hedge

Cross currency swaps

Cross currency swaps — 3,868 7,937 N/A — — —

Total $ — $ ( 7,950 ) $ 13,709 $ — $ 11,818 $ 2,446 $ ( 100,894 ) $ ( 125,042 ) $ ( 188,431 )

Derivatives Not Designated as Hedging Instruments

BRL to USD Foreign Currency Swaps

In November 2020, in connection with the signing of the sale agreement for its Brazilian operations, Laureate entered into six BRL-to-USD swap agreements.

The purpose of these swaps is to mitigate the risk of foreign currency exposure on the expected proceeds from the sale.

Four of the swaps are put/call options with a maturity date of May 13, 2021, where Laureate can put the combined notional amount of BRL 1,875,000 and call a combined USD amount of $ 343,783 at an exchange rate of 5.4540 BRL per 1 USD.

The terms of these options include deferred premium payments from Laureate to the counterparties of $ 18,294 , which were paid in full in January 2021.

The remaining two swaps are deal contingent, with the settlement date occurring on the second business day following the completion of the aforementioned sale.

On the settlement date, Laureate will deliver the combined notional amount of BRL 1,900,000 (BRL 950,000 for each swap) and receive an amount in USD equal to each swap's notional amount multiplied by each swap's contract rate of exchange at the settlement date.

For one of the swaps, the contract rate of exchange has a possible range of 5.484143 - 5.678624 BRL per 1 USD, and the maturity date is December 31, 2021.

For the other swap, the contract rate of exchange has a possible range of 5.44706 - 5.63255 BRL per 1 USD, and the maturity date is January 3, 2022.

As of December 31, 2020, these swaps had an aggregate fair value of $ 25,824 , of which $ 17,680 was recorded in Derivative instruments as a current liability and $ 8,144 was recorded in Derivative instruments as a long-term liability through a charge to unrealized loss on derivatives.

These swaps are not designated as hedges for accounting purposes.

AUD to USD Foreign Currency Swaps

In March 2020, Laureate entered into an AUD-to-USD swap agreement with a maturity date of April 15, 2020, in connection with an intercompany funding transaction.

The terms of the swap stated that on the maturity date, Laureate would deliver the notional amount of AUD 21,000 and receive USD $ 13,713 at a rate of exchange of 0.6530 USD per 1 AUD.

On April 8, 2020, Laureate entered into a net settlement agreement for this swap to deliver USD $ 12,999 and receive the notional amount of AUD 21,000 at a rate of exchange of 0.6190 USD per 1 AUD.

This net settlement was executed on April 15, 2020, which resulted in a realized gain and proceeds received of $ 714 .

This amount is included in (Loss) gain on derivatives on the Consolidated Statement of Operations for the year ended December 31, 2020, and is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2020.

This swap was not designated as a hedge for accounting purposes.

On April 8, 2020, Laureate entered into a new AUD-to-USD swap agreement with a notional amount of AUD 21,000 .

On the maturity date of June 15, 2020, Laureate delivered the notional amount and received USD $ 12,921 at a rate of exchange of 0.6153 USD per 1 AUD, resulting in a realized loss of $ 1,340 .

This amount is included in (Loss) gain on derivatives on the Consolidated Statements of Operations for the year ended December 31, 2020 and is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2020.

This swap was not designated as a hedge for accounting purposes.

EUR to USD Foreign Currency Swaps - Spain and Portugal

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Based on expected timing of the sale transaction, the swap was terminated on April 2, 2019, resulting in a payment to the counterparty of $ 980 that included a deferred premium payment net of proceeds received.

The realized gain of $ 5,088 and the payment of $ 980 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge in the consolidated statement of cash flows.

As of December 31, 2018 , these swaps had an aggregate estimated fair value of $ 4,021 , which was recorded in Derivative instruments as a current liability through a charge to unrealized loss on derivatives.

The realized gain of $ 5,088 and the payment of $ 980 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

These swaps were not designated as hedges for accounting purposes.

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In May 2019, Laureate entered into nine EUR-to-USD swap agreements with a combined notional amount of EUR 532,000 .

On the maturity date of June 4, 2019, Laureate paid the EUR notional amount and received a combined total of USD $ 597,149 at a rate of exchange of 1.122461 , resulting in a realized loss of approximately $ 565 .

The realized gain of $ 1,644 and the realized loss of $ 565 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the consolidated statement of cash flows.

On the maturity date of June 4, 2019, Laureate paid the EUR notional amount and

received a combined total of USD $ 597,149 at a rate of exchange of 1.122461 , resulting in a realized loss of approximately $ 565 .

The realized gain of $ 1,644 and the realized loss of $ 565 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

These swaps were not designated as hedges for accounting purposes.

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however, during the first quarter 2019, the Company elected to settle all four swaps for a net cash payment of approximately USD $ 8,200 .

In addition, Chile also elected to repay a portion of the principal balance outstanding for certain notes payable, as discussed in Note 10 , Debt .

This payment is included in (Payments for) proceeds from settlement of derivative contracts on the consolidated statement of cash flows.

In addition, Chile also elected to repay a portion of the principal balance outstanding for certain notes payable.

This payment is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

The CLP to UF cross currency and interest rate swaps were not designated as hedges for accounting purposes.

As of December 31, 2018 , these swaps had an estimated fair value of $ 6,656 , which was recorded in Derivative instruments as a long-term liability.

MXN to USD Foreign Currency Swaps

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During the fourth quarter of 2019, Laureate delivered the notional amount and received USD $ 23,000 at a rate of exchange of 0.0508 , resulting in a realized loss of $ 583 .

The realized loss is included in (Payments for) proceeds from settlement of derivative contracts on the consolidated statement of cash flows.

The realized loss is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

These swaps were not designated as hedges for accounting purposes.

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During the fourth quarter ended 2019, Laureate received the notional amount and delivered USD $ 7,443 at a rate of exchange of 0.6766 USD per 1 AUD, resulting in a realized gain of $ 45 .

The realized gain is included in (Payments for) proceeds from settlement of derivative contracts on the consolidated statement of cash flows.

The realized gain is included in (Payments for) proceeds from settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

These swaps were not designated as hedges for accounting purposes.

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For the years ended December 31, 2020 2019 2018

Unrealized Gain (Loss)

Unrealized (Loss) Gain

Contingent redemption features - Series A Preferred $ — $ — $ ( 42,140 )

Cross currency and interest rate swaps ( 25,354 ) 4,022 257

Interest rate swaps

Realized Gain (Loss)

Total unrealized (loss) gain ( 25,354 ) 4,022 ( 41,883 )

Realized (Loss) Gain

Contingent redemption features - Series A Preferred — — 140,320

Cross currency and interest rate swaps ( 626 ) 4,278 ( 9,961 )

Total Gain (Loss)

Total realized (loss) gain ( 626 ) 4,278 130,359

Total (Loss) Gain

Contingent redemption features - Series A Preferred — — 98,180

Cross currency and interest rate swaps ( 25,980 ) 8,300 ( 9,704 )

Interest rate swaps

Gain on derivatives, net

(Loss) gain on derivatives, net $ ( 25,980 ) $ 8,300 $ 88,476

Credit Risk and Credit-Risk-Related Contingent Features

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We have not entered into collateral agreements with our derivatives' counterparties.

At December 31, 2019 , we held no derivatives and thus had no credit risk.

At December 31, 2020, two institutions which were rated A1 and one institution which was rated A2 by the global rating agency of Moody's Investors Service accounted for all of Laureate's derivative credit risk exposure.

Laureate's agreements with its derivative counterparties contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to a default on the indebtedness.

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United States $ 6,391 $ 17,493 $ ( 33,123 )

Foreign ( 72,660 ) ( 77,421 ) ( 72,667 )

Total current ( 66,269 ) ( 59,928 ) ( 105,790 )

United States 124,718 22,337 29,619

Foreign 25,612 6,265 4,814

State 46,008 285 161

Total deferred 196,338 28,887 34,594

Total income tax (expense) benefit

For the years ended December 31, 2019 , 2018 and 2017 , foreign income from continuing operations before income taxes was $ 242,017 , $ 664,298 , and $ 246,303 , respectively.

Total income tax benefit (expense) $ 130,069 $ ( 31,041 ) $ ( 71,196 )

For the years ended December 31, 2020, 2019 and 2018, foreign (loss) income from Continuing Operations before income taxes was $( 250,910 ), $ 2,358 , and $ 391,038 , respectively.

For the years ended December 31, 2020, 2019 and 2018, domestic loss from Continuing Operations before income taxes was $ 199,928 , $ 122,019 , and $ 511,159 , respectively.

Significant components of deferred tax assets and liabilities arising from Continuing Operations were as follows:

December 31, 2020 2019

Deferred tax assets:

Net operating loss and tax credits carryforwards $ 410,456 $ 335,325

Depreciation 45,717 38,532

Deferred revenue 10,913 13,587

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Nondeductible reserves 24,835 27,062

Interest 32,282 8,630

Operating lease asset 140,500 158,189

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Operating lease liability 127,131 148,436

Other 1,918 3,137

Total deferred tax liabilities 333,323 413,865

Net deferred tax assets 365,057 203,178

Valuation allowance for net deferred tax assets

Net deferred tax liabilities

In the table above, we have updated the prior year balances of the net operating loss and tax credits carryforwards and the valuation allowance for net deferred tax assets, to include certain foreign withholding tax credits that have a full valuation allowance.

The valuation allowance rollforward and the rate reconciliation schedule that follow have also been updated to reflect this item.

Laureate considered the potential impacts of the GILTI provision within the Tax Cuts & Jobs Act (TCJA) on deferred tax assets/liabilities.

Laureate elected to account for GILTI as period costs if and when incurred.

For the years ended December 31, 2019 and 2018, Laureate included in its taxable income GILTI of $ 182,000 and $ 165,000 , respectively, for continued operations.

Additionally, because there is no incremental cash tax impact of the GILTI inclusion, Laureate is electing to use the incremental cash tax savings approach when determining whether a valuation allowance needs to be recorded against the U.S.

NOL due to the GILTI inclusions.

Accordingly, the Company has maintained a full valuation allowance on its pre-2017 U.S.

Permanent Reinvestment:

Laureate also considered other impacts of the 2017 enactment of the TCJA including, but not limited to, effects on the Company’s indefinite-reinvestment assertion.

Valuation allowance for deferred tax assets ( 320,858 ) ( 324,119 )

Net deferred tax assets (liabilities) $ 44,199 $ ( 120,941 )

The 2019 column of the table above was recast to remove deferred taxes now classified as held for sale.

During 2020, the Company amended the partnership agreement of one of its subsidiaries that owned intellectual property, such that the s ubsidiary became subject to tax in the Netherlands, and conducted an internal restructuring of its Dutch subsidiaries.

Additionally, during the year there was an impairment event for book purposes in the Netherlands, affecting the value of its i ntellectual property .

The net result was a tax benefit of approximately $ 19,000 that represents the book-and-tax basis difference of the intellectual property, measured based on the intellectual property’s fair value.

In the effective tax rate reconciliation table below, this net benefit is reflected in two components.

The first component is simply a benefit from pretax loss at the United States statutory tax rate of $ 51,000 .

The second component of $ 32,000 is primarily the tax-effected difference between the book basis being impaired and the tax basis, net of uncertain tax positions, being established during the year.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.

The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments.

The CARES Act did not have a significant impact on Laureate’s Continuing Operations for the year ended December 31, 2020.

We continue to monitor any effects that may result from the CARES Act as well as any similar stimulus legislation enacted in other jurisdictions where Laureate has material operations.

In July 2020, the U.S.

Treasury Department released final regulations addressing global intangible low-taxed income (GILTI).

Among other changes, these regulations provide an election to exclude certain foreign income of foreign corporations from GILTI if such income is deemed high-taxed in a foreign jurisdiction.

These elective provisions may be applied retroactively and accordingly require significant analysis of the potential financial statement impacts.

During the third quarter of 2020, the Company recorded a discrete tax benefit of approximately $ 70,900 related to 2018 and 2019.

Laureate previously has not provided deferred taxes on unremitted earnings attributable to international companies that have been considered to be reinvested indefinitely.

Laureate analyzed the full effects of the TCJA, and maintained its indefinite-reinvestment assertions for the year ending December 31, 2017.

As of December 31, 2020, undistributed earnings from foreign subsidiaries totaled $ 610,800 .

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If the Company were to remove its assertion and distribute the remaining unremitted earnings, we would record approximately $ 18,800 in additional deferred tax liabilities.

The amount of additional deferred tax liabilities recognized could increase if our expectations change based on future developments, including as a result of the announcement on January 27, 2020 to explore strategic alternatives, such that some or all of the undistributed earnings of our foreign subsidiaries are remitted to the United States in the foreseeable future.

During 2018, certain entities and jurisdictions were designated as discontinued operations or held for sale.

These entities can no longer assert permanent reinvestment.

Thus, an analysis was performed to calculate any deferred taxes required to be recorded on the outside basis which will be recovered upon the sales of these entities.

In the third quarter of 2018, we estimated global deferred tax liabilities of $ 3,200 .

The majority of the basis differences can be recovered tax free due to our efficient investment structure, treaty benefits or tax exempt transactions.

In the fourth quarter of 2018, we refined this global estimate to $ 4,800 .

During 2019, this deferred tax liability was paid as a result of the sale of India group, for which this liability was previously recorded.

As of December 31, 2019 , we estimated $ 0 deferred tax liabilities on the outside basis for remaining entities designated as discontinued operations or held for sale.

Approximately 73.97 % our worldwide NOLs and tax credits carryforwards as of December 31, 2019 originated in foreign jurisdictions.

It includes withholding tax credits that the Company elected to carryforward in the Netherlands.

These credits can be carried forward indefinitely, but due to income available to utilize these credits, they are recorded net of a full valuation allowance.

The valuation allowance relates to the uncertainty surrounding the realization of tax benefits primarily attributable to NOLs of the parent company and of certain foreign subsidiaries, and future deductible temporary differences that are available only to offset future taxable income of subsidiaries in certain jurisdictions.

The amount of additional deferred tax liabilities recognized could increase if our expectations change based on future developments such that some or all of the undistributed earnings of our foreign subsidiaries are remitted to the United States in the foreseeable future.

The Company has $ 634,200 of US federal net operating loss carryforwards that expire from 2035 to 2036 and $ 67,600 of US federal net operating loss carryforwards that do not expire.

The Company has $ 168,100 of deferred tax asset for US state net operating loss carryforwards that expire from 2021 to 2040 and $ 7,500 of deferred tax asset for US state net operating loss carryforwards that do not expire.

The Company has $ 509,200 of foreign net operating loss carryforwards that expire from 2023 to 2030.

The Company has $ 152,700 of tax credit carryforwards that do not expire and $ 76,400 of interest carryforwards that do not expire.

The Company assesses the realizability of deferred tax assets by examining all available evidence, both positive and negative.

A valuation allowance is recorded if negative evidence outweighs positive evidence.

A company’s three -year cumulative loss position is significant negative evidence in considering whether deferred tax assets are realizable.

Accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets.

Accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets when a company is in a three-year cumulative loss position.

A valuation allowance is recorded when the company is not able to identify a source of income to support realization of the deferred tax asset on a more-likely-than-not basis.

The reconciliations of the beginning and ending balances of the valuation allowance on deferred tax assets were as follows:

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Balance at beginning of period $ 324,119 $ 562,944 $ 624,487

(Deductions) additions to costs and expenses (a)

(Deductions) additions from tax expense from continuing operations ( 19,879 ) 2,427 ( 61,373 )

Charges to other accounts

Deductions (b)

Additions 16,618 — —

Deductions — ( 241,252 ) ( 170 )

Balance at end of period $ 320,858 $ 324,119 $ 562,944

(a) (Deductions) additions to costs and expenses include amounts related to withholding tax credits recorded for the Netherlands.

(b) Deductions include reclassifications and foreign currency translation, and TCJA-related adjustments described in the section below.

The reconciliations of the reported Income tax (expense) benefit to the amount that would result by applying the United States federal statutory tax rate of 21% to income from Continuing Operations before income taxes were as follows:

For the years ended December 31, 2020 2019 2018

Tax (expense) benefit at the United States statutory rate

Tax benefit at the United States statutory rate $ 94,676 $ 19,566 $ 17,456

Permanent differences ( 24,184 ) ( 7,693 ) 6,008

Global Intangible Low Taxed Income 70,965 ( 38,305 ) ( 35,631 )

Netherlands intellectual property restructuring ( 32,425 ) — —

State income tax benefit, net of federal tax effect 36,343 5,783 4,445

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Effect of tax contingencies 2,706 11,635 2,215

Tax credits ( 2,302 ) 26,436 —

Withholding taxes ( 13,254 ) ( 869 ) ( 52,064 )

tax on repatriated earnings

Impact of Tax Cuts and Jobs Act:

Transition tax on unremitted earnings

Tax effect of rate changes

Change in valuation allowance

State income tax benefit, net of federal tax effect

Total income tax (expense) benefit

We have made certain adjustments to the 2017 rate reconciliation above in connection with the allocation of the effects of the TCJA to entities in discontinued operations.

The withholding tax amounts shown in the table above include a benefit for 2017 of approximately $ 30,000 and expense for 2018 of approximately ($ 27,000 ) related to the redesignation of certain intercompany loans to reflect the impact in changes in the Company's business, including divestitures and financing.

The tax credits amounts shown in the table above include withholding tax credits that the Company recorded in the Netherlands.

They are recorded net of a full valuation allowance.

Other ( 163 ) 2,971 ( 905 )

Total income tax benefit (expense) $ 130,069 $ ( 31,041 ) $ ( 71,196 )

The reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:

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Additions for tax positions related to current year 327,142 8,585 8,731

Decreases for unrecognized tax benefits

as a result of a lapse in the statute of limitations

Decreases for unrecognized tax benefits as a result of a lapse in the statute of limitations ( 1,836 ) ( 1,752 ) ( 1,500 )

Settlements for tax positions related to prior years — — ( 27,573 )

End of the period $ 385,283 $ 56,395 $ 50,900

In addition to the amounts shown in the table above, approximately $ 3,300 of principal was released during 2019 as a result of the sale of India, which was classified as a discontinued operation prior to the sale.

Laureate records interest and penalties related to uncertain tax positions as a component of Income tax expense.

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During the years ended December 31, 2020, 2019 and 2018, Laureate derecognized $ 4,458 , $ 6,920 , and $ 11,523 , respectively, of previously accrued interest and penalties.

Approximately $ 19,917 of unrecognized tax benefits, if recognized, will

affect the effective income tax rate.

Approximately $ 264,526 of unrecognized tax benefits, if recognized, will affect the effective income tax rate.

It is reasonably possible that Laureate’s unrecognized tax benefits may decrease within the next 12 months by up to approximately $ 13,265 as a result of the lapse of statutes of limitations and as a result of the final settlement and resolution of outstanding tax matters in various jurisdictions.

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however, the Internal Revenue Service (the IRS) has the ability to challenge 2005 through 2016 net operating loss carryforwards.

Except as discussed below, statutes of other major jurisdictions are open back to 2016 for Brazil, 2013 for Chile and Spain, and 2009 for Mexico.

Except as discussed below, statutes of other major jurisdictions are open back to 2014 for Spain and 2010 for Mexico.

During 2010 and 2013, Laureate was notified by the Spain Tax Authorities (STA) that two tax audits of our Spanish subsidiaries were being initiated for 2006 through 2007, and for 2008 through 2010, respectively.

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As of December 31, 2020, the Company has posted a cash-collateralized letter of credit of approximately $ 5,500 for the assessment, plus a surcharge.

In May 2019, the Company was notified by the STA that a new tax audit of fiscal years 2014 and 2015 was being initiated.

In May 2019, the Company was notified by the STA

that a new tax audit of fiscal years 2014 and 2015 was being initiated.

In January 2020, ICE received a final assessment from the STA for the 2014 to 2015 period totaling approximately EUR 4,300 (approximately $ 5,300 at December 31, 2020).

ICE plans to appeal this assessment and, in order to appeal, ICE will be required to issue a guarantee to cover the assessment amount.

The TCJA was enacted in December 2017.

Among other provisions, the TCJA reduced the U.S.

federal corporate tax rate from 35% to 21% beginning in 2018, required companies to pay a one-time transition tax on previously unremitted earnings of non-U.S.

subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings.

In connection with Laureate’s initial analysis of the impact of the enactment of the TCJA, the Company recorded a net tax benefit of $ 135,700 in the fourth quarter of 2017.

Of this amount, $ 82,392 related to the rate change and $ 53,300 related to the valuation allowance release, net of rate adjustment, on the deferred tax assets other than net operating loss carryforwards (NOLs) that, when realized, may become indefinite-lived NOLs.

In 2018, we made adjustments to line items within the 2017 rate reconciliation of approximately $ 3,600 in connection with the allocation of the effects of the TCJA to entities in discontinued operations.

Laureate has completed its accounting for the income tax effects of the TCJA, several of which are detailed immediately below.

Transition tax:

The transition tax is a tax on previously untaxed accumulated and current earnings and profits (E&P) at December 31, 2017 of certain of the Company’s non-U.S.

subsidiaries.

To determine the amount of the transition tax, Laureate determined,

in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S.

income taxes paid on such earnings.

Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets.

Laureate was able to make a reasonable estimate of the transition tax and recorded a provisional obligation resulting in additional tax expense of $ 149,800 in the fourth quarter of 2017.

However, Laureate was able to offset this liability with current year losses and, under alternative minimum tax, up to 90 % of the remaining liability, with pre-2017 net operating losses, resulting in a net liability of $ 3,200 .

Additionally, the TCJA repeals the corporate alternative minimum tax prospectively.

Thus, Laureate recorded a deferred tax asset for an amount equal to the payable under the alternative minimum tax, resulting in no net income tax expense related to the transition tax.

During the fourth quarter of 2018, Laureate updated the calculation of the transition tax for the income tax return filing and made adjustments to the 2017 amounts in connection with the allocation of the effects of the TCJA to entities in discontinued operations.

Remeasurement of deferred tax assets/liabilities:

Laureate remeasured certain deferred tax assets and liabilities in the fourth quarter of 2017 based on the rates at which they are expected to reverse in the future, which is generally 21% under the TCJA, and recorded a tax benefit in the amount of $ 82,392 .

Additionally, Laureate recorded a tax benefit in the fourth quarter of 2017 related to the valuation allowance release, net of rate adjustment, on the deferred tax assets other than NOLs that, when realized, will become indefinite-lived NOLs in the amount of $ 53,300 .

Laureate has analyzed certain aspects of the TCJA, including state conformity, considering additional technical guidance, and refining its calculations, which affected the measurement of these balances or gave rise to new deferred tax amounts.

The 2018 blended state tax rates for the U.S., 6.63 % (current) and 6.61 % (deferred), were calculated using the apportionment percentages from our most recently filed tax returns at that time (2017) and the highest applicable state tax rate.

This rate was applied to all items, except that the NOL utilization related to Global Intangibles Low-Taxed Income (GILTI) was 4.11 % (deferred) and was applied using the blended rate of only those states that conform to federal GILTI provisions.

Valuation Allowance:

In 2017, the Company's valuation allowance was changed due to the impact of the TCJA.

The major drivers of the change in balance were:

impact of the US rate change in the amount of $ 215,600 , utilization of the prior year NOLs against continued and discontinued operations in the amount of $ 53,600 and valuation allowance release, net of rate adjustment, on the deferred tax assets other than NOLs that when realized will become indefinite-lived NOLs in the amount of $ 53,300 .

In 2018, we made adjustments to line items within the 2017 rate reconciliation in connection with the allocation of the effects of the TCJA to entities in discontinued operations.

ICE intends to appeal the referred assessment before the Administrative Central Court, and, in order to do so, ICE has posted a cash-collateralized letter of credit of approximately EUR 4,300 ($ 5,300 at December 31, 2020).

Finally, the referred tax audit was extended in June 2019 to the non-resident income tax for the second semester of fiscal year 2015.

On March 11, 2020, ICE received a preliminary assessment of approximately EUR 21,600 (approximately $ 26,400 at December 31, 2020).

This assessment is not final, and we intend to challenge the referred assessment before the STA.

Earnings (Loss) Per Share

On January 31, 2017, our common stock was reclassified into shares of Class B common stock and, on February 6, 2017, we completed our IPO of Class A common stock.

Our common stock has a dual class structure, consisting of Class A common stock and Class B common stock.

Other than voting rights, the Class B common stock has the same rights as the Class A common stock and therefore both are treated as the same class of stock for purposes of the earnings per share calculation.

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Numerator used in basic and diluted earnings (loss) per common share for continuing operations:

Income (loss) from continuing operations

Net income attributable to noncontrolling interests

Income (loss) from continuing operations attributable to Laureate Education, Inc.

Loss from continuing operations $ ( 320,598 ) $ ( 150,483 ) $ ( 191,317 )

Net loss (income) attributable to noncontrolling interests 17 ( 98 ) ( 141 )

Loss from continuing operations attributable to Laureate Education, Inc.

( 320,581 ) ( 150,581 ) ( 191,458 )

Accretion of redemption value of redeemable noncontrolling interests and equity 149 ( 208 ) ( 292 )

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Gain upon conversion of Series A Preferred Stock — — 74,110

Distributed and undistributed earnings to participating securities

accretion of Series A Preferred Stock, net, and other redeemable noncontrolling interests and equity

Net income (loss) from continuing operations available to common stockholders for basic earnings per share

accretion of reedemable noncontrolling interests and equity, and, for 2018, Series A Preferred Stock, net 149 ( 208 ) 11,285

Net loss from continuing operations available to common stockholders for basic earnings per share ( 320,432 ) ( 150,789 ) ( 180,173 )

Adjusted for:

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gain upon conversion of Series A Preferred Stock — — ( 74,110 )

Net income (loss) from continuing operations available to common stockholders for diluted earnings per share

Net loss from continuing operations available to common stockholders for diluted earnings per share $ ( 320,432 ) $ ( 150,789 ) $ ( 192,309 )

Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:

Income from discontinued operations, net of tax

Gain on sale of discontinued operations, net of tax

(Loss) income from discontinued operations, net of tax ( 298,104 ) 1,088,147 562,247

Loss (income) attributable to noncontrolling interests 5,354 918 ( 722 )

Allocation of earnings from discontinued operations to participating securities

Net income from discontinued operations for basic and diluted earnings per share

Net (loss) income from discontinued operations for basic and diluted earnings per share $ ( 292,750 ) $ 1,089,065 $ 561,525

Denominator used in basic and diluted earnings (loss) per common share:

Basic weighted average shares outstanding

Effect of dilutive stock options

Effect of dilutive restricted stock units

Dilutive weighted average shares outstanding

Basic earnings (loss) per share:

Income (loss) from continuing operations

Income from discontinued operations

Basic and diluted weighted average shares outstanding 209,710 221,928 212,769

Basic earnings (loss) per share:

Diluted earnings (loss) per share:

Income (loss) from continuing operations

Income from discontinued operations

Loss from continuing operations $ ( 1.53 ) $ ( 0.68 ) $ ( 0.85 )

(Loss) income from discontinued operations ( 1.40 ) 4.91 2.64

Basic (loss) earnings per share $ ( 2.93 ) $ 4.23 $ 1.79

Diluted earnings (loss) per share:

Loss from continuing operations $ ( 1.53 ) $ ( 0.68 ) $ ( 0.91 )

(Loss) income from discontinued operations ( 1.40 ) 4.91 2.64

Diluted (loss) earnings per share $ ( 2.93 ) $ 4.23 $ 1.73

In the calculation of diluted EPS for 2018, the conversion of the Series A Preferred Stock, which occurred on April 23, 2018, was assumed to have occurred as of the beginning of the period;

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Related Party Transactions

Santa Fe University of Arts and Design (SFUAD) is owned by Wengen, our controlling stockholder.

Laureate is affiliated with SFUAD, but does not own or control it and, accordingly, SFUAD is not included in the financial results of Laureate.

On April 12, 2017, SFUAD announced that it planned to close after the end of the 2017-2018 academic year;

its teach-out plan was subsequently approved by the Higher Learning Commission (HLC) and completed in 2018.

As of December 31, 2017, Laureate had a payable to SFUAD of approximately $ 1,250 related to a surety bond issued to the New Mexico Higher Education Department that Laureate was maintaining on SFUAD's behalf.

The cash collateral for the bond, which was recorded in Restricted cash on our December 31, 2017 Consolidated Balance Sheet, was funded by SFUAD and therefore was recorded as a payable to SFUAD.

During the fourth quarter of 2018, this bond was released and SFUAD was fully repaid.

During the first quarter of 2017, Laureate made a charitable contribution of $ 2,000 to the Sylvan Laureate Foundation, a non-profit foundation that supports programs designed to promote education and best practices and principles in teaching.

The payment was accrued in prior periods.

An affiliate of one of the Wengen investors acted as a financial adviser in connection with our IPO and our 2017 debt refinancing and we paid this affiliate $ 2,768 during the year ended December 31, 2017 .

We have agreements in place with I/O Data Centers, LLC and affiliates (I/O) pursuant to which I/O provides modular data center solutions to the Company.

One of our directors was also a director of the parent of I/O.

Additionally, this director, along with our former CEO, and Sterling Partners (a private equity firm co-founded by the director, our former CEO, and others) maintained an ownership interest in I/O through 2017.

During the year ended December 31, 2017 we incurred costs for these agreements of approximately $ 500 .

As part of our initial public offering in February 2017, an affiliate of one of the Wengen investors purchased from the underwriters 3,571 shares of Class A common stock at the initial public offering price.

As part of the issuance and sale of shares of the Company’s Series A Preferred Stock in December 2016, KKR and Snow Phipps, affiliates of Wengen, purchased from the Company 60 and 15 shares of Series A Preferred Stock, respectively.

During the years ended December 31, 2018 and 2017 , the Company paid cash dividends on the Series A Preferred Stock totaling $ 11,103 and $ 18,052 , respectively, of which $ 1,822 and $ 3,644 , respectively, was paid to KKR and Snow Phipps.

During the year ended December 31, 2018, the Company paid cash dividends on the Series A Preferred Stock totaling $ 11,103 , of which $ 1,822 , was paid to KKR and Snow Phipps.

As discussed in Note 12, Share-based Compensation and Equity, on April 23, 2018, all of the issued and outstanding shares of the Series A Preferred Stock were converted into Class A common stock.

As further discussed in Note 25 , Subsequent Events , the buyer of our Costa Rica operations is controlled by certain affiliates of Sterling Capital Partners II, L.P., an entity that has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement.

As discussed in Note 6, Dispositions, the buyer of our Costa Rica operations is controlled by certain affiliates of Sterling Capital Partners II, L.P., an entity that has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement.

Benefit Plans

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Laureate made discretionary contributions in cash to this plan of $ 4,636 , $ 5,431 , and $ 5,345 for the years ended December 31, 2020, 2019 and 2018, respectively.

Non-United States Pension Benefit Plans

Laureate has a defined benefit (pension) plan at a non-United States institution.

The projected benefit obligation (PBO) is determined as the actuarial present value as of the measurement date of all benefits calculated by the pension benefit formula for employee service rendered.

The amount of benefits to be paid depends on a number of future events incorporated into the pension benefit formula, including estimates of the average life expectancy of employees/survivors and average years of service rendered.

The PBO is measured based on assumptions concerning future interest rates and future employee compensation levels.

The expected net periodic benefit cost in each year can vary from the subsequent year's actual net periodic benefit cost due to plan amendments and the impacts of foreign currency translation.

The unfunded status of this plan is reported as a component of Other current liabilities and Other long-term liabilities.

The net periodic benefit cost was as follows:

For the years ended December 31,

Expected return on assets

Amortization of prior service costs

Recognition of actuarial items

Curtailment gain

Net periodic benefit cost

As discussed in Note 2 , Significant Accounting Policies , on January 1, 2018 Laureate adopted ASU 2017-07.

Under the amendments in this ASU, the service cost component of net periodic benefit cost is disaggregated and reported in the same line item(s) as other compensation costs arising from services rendered during the period, and the remaining components are presented on the income statement separately from the service cost component and outside a subtotal of income from operations, if presented.

Because the effect of ASU 2017-07 on prior periods presented was insignificant, we did not revise prior periods.

Accordingly, for the years ended December 31, 2019 and 2018 , the service cost component of net periodic benefit cost is included in Direct costs on the Consolidated Statement of Operations and all other components of net periodic benefit cost are included in Other income (expense), net on the Consolidated Statement of Operations.

For the year ended December 31, 2017 , all components of net periodic benefit cost are included in Direct costs on the Consolidated Statements of Operations.

The estimated net periodic benefit cost for the year ending December 31, 2020 is approximately $ 242 .

The weighted average assumptions were as follows:

For the years ended December 31,

Discount rate for obligations

Discount rate for net periodic benefit costs

Rate of compensation increases

Expected return in plan assets

The change in PBO, change in plan assets and funded (unfunded) status for those entities with pension plans were as follows:

For the years ended December 31,

Change in PBO:

PBO at beginning of year

Actuarial loss (gain)

Benefits paid by plan

Curtailment gain

Foreign exchange

PBO at end of year

Fair value of assets at end of year

Unfunded status

Amount recognized in AOCI, pre-tax

Accumulated benefit obligation

The estimated future benefit payments for the next 10 fiscal years are as follows:

For the year ending December 31,

2025 through 2029

Laureate Education, Inc.

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As of December 31, 2020 and 2019, the total SERA assets were $ 11,037 and $ 12,494 , respectively, which were recorded on our Consolidated Balance Sheets in Restricted cash at December 31, 2020 and 2019.

As of December 31, 2019 and 2018 , the total

SERA liabilities recorded in our Consolidated Balance Sheets were $ 14,244 and $ 14,278 , respectively, of which $ 1,500 each year was recorded in Accrued compensation and benefits , and $ 12,744 and $ 12,778 , respectively, was recorded in Deferred compensation .

As of December 31, 2020 and 2019, the total SERA liabilities recorded in our Consolidated Balance Sheets were $ 14,925 and $ 14,244 , respectively, of which $ 1,500 each year was recorded in Accrued compensation and benefits, and $ 13,425 and $ 12,744 , respectively, was recorded in Deferred compensation.

Mexico Profit-Sharing

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Management believes that any settlement would not have a material impact on Laureate's financial position, results of operations, or cash flows.

United States Postsecondary Education Regulation

Through our Online & Partnerships and Central America & U.S.

Campuses segments, as of December 31, 2019 , we operate postsecondary educational institutions in the United States (U.S.

Institutions).

Institutions are subject to extensive regulation by federal and state governmental entities as well as accrediting bodies.

Higher Education Act (HEA), and the regulations promulgated thereunder by the DOE, subject the U.S.

Institutions to ongoing regulatory review and scrutiny.

Institutions must also comply with a myriad of requirements in order to participate in Title IV federal financial aid programs under the HEA (Title IV programs).

In particular, to participate in the Title IV programs under currently effective DOE regulations, an institution must be authorized to offer its educational programs by the relevant state agencies in the states in which it is located, accredited by an accrediting agency that is recognized by the DOE, and also certified by the DOE.

In determining whether to certify an institution, the DOE closely examines an institution’s administrative and financial capability to administer Title IV program funds.

Based on Laureate’s consolidated audited financial statements for its fiscal year ended December 31, 2018 , the DOE required us to post a letter of credit of approximately $ 125,800 (an amount equal to 15 % of the Title IV program funds received by Laureate in the fiscal year ended December 31, 2018 ) and remain subject to Heightened Cash Monitoring 1.

The DOE also required us to comply with additional notification and reporting requirements.

We have provided the DOE with a letter of credit in the amount required, and we are complying with the additional requirements.

See Note 12 , Commitments and Contingencies , for further description of the outstanding DOE letters of credit as of December 31, 2019 and 2018 .

In recent years, the DOE has proposed or promulgated a substantial number of new regulations that impact our U.S.

Institutions, including, but not limited to, borrower defense to repayment, state authorization and financial responsibility.

Changes in or new interpretations of applicable laws, DOE rules, or regulations could have a material adverse effect on the U.S.

Institutions’ eligibility to participate in the Title IV programs.

State Higher Education Agency Program Review for Walden University

On September 8, 2016, the Minnesota Office of Higher Education (MOHE) sent to Walden University an information request regarding its doctoral programs and complaints filed by doctoral students as part of a program review that MOHE was conducting.

On October 23, 2019, MOHE completed its program review and issued a final report that indicated no findings of noncompliance.

As part of its report, MOHE made recommendations for Walden University to develop certain goals and benchmarks with respect to its doctoral programs.

Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations.

Continuing Operations

Mexican Regulation– COVID-19 Update

Administrative activities have resumed at half of our campuses.

Face-to-face educational activities will not be permitted to resume at any campus until the region (municipality or state) in which it is located is assigned a green color code under the country’s color-coded sanitary alert system, which is updated on a biweekly basis.

Peruvian Regulation– COVID-19 Update

Peru’s national sanitary emergency has been extended until March 2021.

In addition, due to the second wave of COVID-19, effective from January 31 until February 28, 2021, Peru entered into a region-by-region confinement plan, which includes a total curfew of vehicles and individuals in the whole department of Lima, among others.

The economic reactivation plan has been suspended for many activities (mostly malls and restaurants presential attention) during the confinement period, including presential practices classes and some administrative tasks.

The government has announced that face-to-face classes may resume this year, initially semi-presential;

however, the actual resumption of classes will depend upon COVID-19 infection rates at such time.

Discontinued Operations

Brazilian Regulation

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increased access and improved academic quality outcomes.

As of December 31, 2019 , approximately 7 % of our total students in Brazil participated in FIES, representing approximately 13 % of our 2019 Brazil net revenue.

As of December 31, 2018 , approximately 11 % of our total students in Brazil participated in FIES, representing approximately 20 % of our 2018 Brazil net revenue.

As of December 31, 2020, approximately 4 % of our students in Brazil participated in FIES, representing approximately 8.5 % of our 2020 Brazil revenues.

As of December 31, 2019, approximately 7 % of our total students in Brazil participated in FIES, representing approximately 13 % of our 2019 Brazil revenues.

All of our Brazil HEIs adhere to Prouni, a federal program of tax benefits designed to increase higher education participation rates by making college more affordable.

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For the years ended December 31, 2020, 2019 and 2018, our HEIs granted Prouni scholarships of approximately $ 75,700 , $ 100,600 and $ 112,500 , respectively, that resulted in tax credits.

Chilean Regulation - Higher Education Bill

As discussed in Note 2 , Significant Accounting Policies , on January 24, 2018, the Chilean Congress passed the New Law, which was enacted in May 2018.

See Note 2 , Significant Accounting Policies , for further discussion about the New Law and its impact to Laureate.

COVID-19 Update

In response to the transition from face-to-face classes to online classes due to the COVID-19 pandemic, legislative assemblies in several Brazilian states passed laws requiring schools to discount tuition.

With respect to the states in which we operate, only Rio de Janeiro, Bahia and Paraiba passed such laws.

However, because injunctions were granted to suspend the effects of such laws in Rio de Janeiro and Paraiba, mandatory discounts only were applied to classes taken at our Bahia campuses.

The constitutionality of the aforementioned laws was challenged both in state courts and the Supreme Court.

By the end of 2020, the Supreme Court had ruled on the first round of cases – including the Bahia case –, declaring the mandatory discount laws to be at odds with the Brazilian constitution.

The same outcome is expected for the remaining cases.

As of August 2020, Provisional Presidential Act n.

934/2020 has been converted to Law n.

Accordingly, institutions remain authorized to substitute face-to-face classes with remote activities and adjust the academic calendar.

By the end of 2020, the National Board of Education had issued an opinion concerning the continuity of remote activities for an additional year.

The Ministry of Education, however, has insisted on a gradual return to face-to-face classes, beginning on March 1 st for higher education.

Nonetheless, this effort will be affected by local sanitary indicators and may effectively be delayed until either a safety standard is sustained or mass vaccination reaches the students’ main age groups.

As of now, government measures to resume face-to-face educational activities in Brazil are being implemented on a state-by-state and city-by-city basis.

Laboratory and professional practice activities have resumed at the vast majority of our Brazilian campuses.

Despite being authorized to gradually return to face-to-face classes in some locations, academic planners still consider a larger contingent of remote activities to be the most suitable option given the current circumstances.

United States Postsecondary Education Regulation

Walden University, our postsecondary educational institution in the United States, is subject to extensive regulation by federal and state governmental entities as well as accrediting bodies.

Higher Education Act (HEA), and the regulations promulgated thereunder by the U.S.

Department of Education (DOE), subject Walden University to ongoing regulatory review and scrutiny.

Walden University must also comply with a myriad of requirements in order to participate in Title IV federal financial aid programs under the HEA (Title IV programs).

In determining whether to certify an institution, the DOE closely examines an institution’s administrative and financial capability to administer Title IV program funds.

Based on Laureate’s consolidated audited financial statements for its fiscal year ended December 31, 2019, the DOE required us to post a letter of credit of approximately $ 83,600 (an amount equal to 10 % of the Title IV program funds received by Laureate in the most recently completed fiscal year) and remain subject to Heightened Cash Monitoring 1.

The DOE also required us to comply with additional notification and reporting requirements.

We have provided the DOE with a letter of credit in the amount required, and we are complying with the additional requirements.

See Note 11, Commitments and Contingencies, for further description of the outstanding DOE letters of credit as of December 31, 2020 and 2019.

In recent years, the DOE has proposed or promulgated a substantial number of new regulations that impact Walden University, including, but not limited to, borrower defense to repayment, state authorization and financial responsibility.

Changes in or new interpretations of applicable laws, DOE rules, or regulations could have a material adverse effect on Walden University’s eligibility to participate in the Title IV programs.

Department of Justice Voluntary Information Request for Walden University

Our institutions are subject to regulatory oversight and from time to time must respond to inquiries about their compliance with the various statutory requirements under which they operate.

On September 14, 2020, Walden University received a letter from the Civil Division of the United States Department of Justice (referred to herein as “DOJ”) indicating that the DOJ is examining whether Walden University, in the operation of its Masters of Science in Nursing program (referred to herein as the “Nursing Program”), may have violated the Federal False Claims Act by misrepresenting compliance with its program participation agreement with the DOE, which agreement covers Walden University’s participation in federal student financial aid programs under Title IV of the U.S.

Higher Education Act.

The letter invites Walden University to provide information regarding a number of specific areas primarily related to the practicum component of its Nursing Program, but it makes no allegations of any misconduct or wrongdoing by Walden University.

Further, on November 9, 2020, Walden University received notice from the Higher Learning Commission (“HLC”) that a public “Governmental Investigation” designation would be assigned to Walden University due to the DOJ inquiry and such designation became effective on November 9, 2020.

On November 24, 2020, representatives of Walden University met with individuals from the DOJ to present the information requested.

While Laureate is cooperating with the DOJ’s request to voluntarily provide information, it cannot predict the timing or outcome of this matter.

Laureate accrues for a liability when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated.

Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable.

The disclosures, accruals or estimates, if any, resulting from the foregoing analysis are reviewed and adjusted to reflect the effect of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter.

At this time, Laureate does not believe that this matter will have a material effect on its financial position, results of operations, or cash flows.

Further, consistent with the HLC’s policies and procedures, a Governmental Investigation designation by the HLC could delay or prevent the HLC’s approval of a substantive change application to approve the pending sale of Walden University.

We continue to evaluate these regulatory developments and the potential impact, if any, on the pending sale of Walden University.

Fair Value Measurement

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These levels are not necessarily an indication of the risk of liquidity associated with the financial assets or liabilities disclosed.

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement, as required under ASC 820-10, "Fair Value Measurement."

In instances where the determination of fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety, as required under ASC 820-10, "Fair Value Measurement." Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Derivative Instruments

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These valuation models require a variety of inputs, including contractual terms, market prices, forward-price yield curves, notional quantities, measures of volatility and correlations of such inputs.

Our valuation models also reflect measurements for credit risk.

Laureate concluded that the fair values of our derivatives are based on unobservable inputs, or Level 3 assumptions.

The significant unobservable input used in the fair value measurement of the Company's derivative instruments is our own credit risk.

Holding other inputs constant, a significant increase (decrease) in our own credit risk would result in a significantly lower (higher) fair value measurement for the Company's derivative instruments.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourself and our counterparties.

We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation.

As a result, all of our derivatives held as of December 31, 2020 were classified as Level 2 of the fair value hierarchy.

Equity securities - preferred stock investment

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In September 2019, Laureate sold the Shares and received cash proceeds of $ 11,473 , resulting in a total non-operating gain of $ 6,473 for the year ended December 31, 2019.

The proceeds are included in Proceeds from sale of investment in the consolidated statement of cash flows.

As of December 31, 2019 , Laureate did no t hold any financial assets or liabilities that are measured at fair value on a recurring basis.

The proceeds are included in Proceeds from sale of investment on the Consolidated Statement of Cash Flows.

Laureate's financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 were as follows:

Total Level 1 Level 2 Level 3

Derivative instruments $ — $ — $ — $ —

Derivative instruments $ 25,824 $ — $ 25,824 $ —

The changes in our Level 3 Derivative instruments measured at fair value on a recurring basis for the year ended December 31, 2019 were as follows:

Balance December 31, 2018

Gain included in earnings:

Unrealized gains, net

Realized gains, net

Loss included in other comprehensive income

Reclassification upon conversion of Series A Preferred Stock

Reclassification, currency translation adjustment and other

Balance December 31, 2019

Laureate had no fair value measurements classified as Level 3 as of December 31, 2019 .

The changes in our Level 3 Derivative instruments measured at fair value on a recurring basis for the year ended December 31, 2018 were as follows:

Balance December 31, 2017

(Loss) gain included in earnings:

Unrealized losses, net

Realized gains, net

Gain included in other comprehensive income

Reclassification upon conversion of Series A Preferred Stock

Currency translation adjustment and other

Balance December 31, 2018

As of December 31, 2019, Laureate did not hold any financial assets or liabilities that are measured at fair value on a recurring basis.

Quarterly Financial Data (Unaudited)

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2020 Quarters Ended

Per share amounts in whole dollars

Per share amounts in whole dollars December 31 September 30 June 30 March 31

Revenues $ 285,219 $ 243,523 $ 303,856 $ 192,319

Operating costs and expenses 248,343 561,758 274,713 269,405

Operating income (loss) $ 36,876 $ ( 318,235 ) $ 29,143 $ ( 77,086 )

Income (loss) from continuing operations

(Loss) income from discontinued operations, net of tax

Gain (loss) on sales of discontinued operations, net of tax

(Loss) income from continuing operations $ ( 244,095 ) $ ( 271,040 ) $ ( 11,559 ) $ 206,096

Income (loss) from discontinued operations, net of tax 623,135 ( 513,390 ) ( 300,069 ) ( 107,780 )

Net loss (income) attributable to noncontrolling interests 279 ( 12 ) 3,805 1,299

Net income (loss) attributable to Laureate Education, Inc.

Accretion of Series A Preferred Stock and other redeemable noncontrolling interests and equity

379,319 ( 784,442 ) ( 307,823 ) 99,615

Accretion of redeemable noncontrolling interests and equity ( 14 ) 6 201 ( 44 )

Net income (loss) available to common stockholders $ 379,305 $ ( 784,436 ) $ ( 307,622 ) $ 99,571

Basic earnings (loss) per share:

Income (loss) from continuing operations

Income (loss) from discontinued operations

Basic earnings (loss) per share

Diluted earnings (loss) per share:

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations $ ( 1.17 ) $ ( 1.29 ) $ ( 0.05 ) $ 0.98

Income (loss) from discontinued operations 2.98 ( 2.44 ) ( 1.41 ) ( 0.51 )

Diluted earnings (loss) per share

Basic and diluted earnings (loss) per share $ 1.81 $ ( 3.73 ) $ ( 1.46 ) $ 0.47

2019 Quarters Ended

Per share amounts in whole dollars

Per share amounts in whole dollars December 31 September 30 June 30 March 31

Revenues $ 351,846 $ 277,267 $ 370,938 $ 212,019

Operating costs and expenses 294,527 295,678 318,963 266,882

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Income (loss) from continuing operations $ 61,193 $ ( 86,649 ) $ 93,924 $ ( 218,951 )

Income (loss) from discontinued operations, net of tax

(Loss) gain on sales of discontinued operations, net of tax

Net income (loss) attributable to noncontrolling interests

(Loss) income from discontinued operations, net of tax ( 616 ) ( 10,145 ) 685,694 413,214

Net loss (income) attributable to noncontrolling interests 298 1,568 1,976 ( 3,022 )

Net income (loss) attributable to Laureate Education, Inc.

Accretion of Series A Preferred Stock and other redeemable noncontrolling interests and equity

Gain upon conversion of Series A convertible redeemable preferred stock

60,875 ( 95,226 ) 781,594 191,241

Accretion of redeemable noncontrolling interests and equity ( 472 ) ( 193 ) 194 263

Net income (loss) available to common stockholders $ 60,403 $ ( 95,419 ) $ 781,788 $ 191,504

Basic earnings (loss) per share:

Income (loss) from continuing operations

Income (loss) from discontinued operations

Basic earnings (loss) per share

Diluted earnings (loss) per share:

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations $ 0.28 $ ( 0.39 ) $ 0.42 $ ( 0.97 )

Income (loss) from discontinued operations — ( 0.04 ) 3.06 1.82

Diluted earnings (loss) per share

Basic and diluted earnings (loss) per share $ 0.28 $ ( 0.43 ) $ 3.48 $ 0.85

The Company has adjusted the September 30, 2020 and December 31, 2019 balances of deferred income tax liabilities and long-term liabilities held for sale that were previously reported in the Company’s quarterly report on Form 10-Q for the third quarter of 2020, in order to reflect Walden’s deferred income taxes in Continuing Operations.

Other Financial Information

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The components of these balances were as follows:

Laureate Education, Inc.

Noncontrolling Interests

December 31, 2020 2019

Laureate Education, Inc.

Noncontrolling Interests

Noncontrolling Interests Total Laureate Education, Inc.

Noncontrolling Interests Total

Foreign currency translation loss $ ( 951,456 ) $ 958 $ ( 950,498 ) $ ( 1,084,651 ) $ 326 $ ( 1,084,325 )

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Laureate reports changes in AOCI in our Consolidated Statements of Stockholders’ Equity.

See also Note 15 , Derivative Instruments , and Note 19 , Benefit Plans , for the effects of reclassifications out of AOCI into net income.

See also Note 13, Derivative Instruments, for the effects of reclassifications out of AOCI into net income.

Foreign Currency Exchange of Certain Intercompany Loans

Laureate periodically reviews its investment and cash repatriation strategies in order to meet our liquidity requirements in the United States.

Laureate recognized currency exchange adjustments attributable to intercompany loans that are not designated as indefinitely invested as Foreign currency exchange (loss) gain, net , of $( 32,433 ) , $( 30,272 ) and $ 289 in the Consolidated Statements of Operations for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Laureate recognized currency exchange adjustments attributable to intercompany loans that are not designated as indefinitely invested as Foreign currency exchange gain (loss), net, of $ 21,171 , $( 11,769 ) and $( 1,533 ) in the Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, respectively.

Supplemental Schedule for Transactions with Noncontrolling Interest Holders

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For the years ended December 31, 2020 2019 2018

Net income attributable to Laureate Education, Inc.

Net (loss) income attributable to Laureate Education, Inc.

$ ( 613,331 ) $ 938,484 $ 370,067

Decrease in equity for changes in noncontrolling interests ( 2,610 ) ( 3,700 ) ( 471 )

Change from net income attributable to Laureate Education, Inc.

Change from net (loss) income attributable to Laureate Education, Inc.

and net transfers to the noncontrolling interests $ ( 615,941 ) $ 934,784 $ 369,596

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Net income tax cash payments for Continuing Operations and Discontinued Operations were $ 91,371 , $ 119,682 and $ 143,000 for the years ended December 31, 2020, 2019 and 2018, respectively.

During the years ended December 31, 2018 and 2017 , the Company paid cash dividends on the Series A Preferred Stock in the amount of $ 11,103 and $ 18,052 , respectively.

During the year ended December 31, 2018, the Company paid cash dividends on the Series A Preferred Stock in the amount of $ 11,103 .

As discussed in Note 12, Share-based Compensation and Equity, on April 23, 2018, all of the issued and outstanding shares of the Series A Preferred Stock were converted into shares of the Company’s Class A common stock.

Accordingly, the Company did not pay any cash dividends during the year ended December 31, 2019 .

Accordingly, the Company did not pay any cash dividends during the years ended December 31, 2020 and 2019.

Reconciliation of Cash and cash equivalents and Restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the December 31, 2017 balance.

The December 31, 2019 and December 31, 2018 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the years ended December 31, 2019 and 2018 :

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the December 31, 2018 balance, to the amounts shown in the Consolidated Statements of Cash Flows:

For the year ended December 31, 2020 2019 2018

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Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows $ 867,298 $ 97,817 $ 125,617

Subsequent Events

Sale of Costa Rica Operations

On January 10, 2020 , Laureate International B.V., a Netherlands private limited liability company (Laureate International), an indirect, wholly owned subsidiary of the Company, entered into, and consummated the transactions contemplated by, an Equity Purchase Agreement (the Costa Rica Agreement) with SP Costa Rica Holdings, LLC, a Delaware limited liability company (the Costa Rica Buyer).

Pursuant to the Agreement, the Costa Rica Buyer purchased from Laureate International (i) all of the equity units of Education Holding Costa Rica, S.R.L., which owns, directly or indirectly, all of the equity units of Lusitania S.R.L., Universidad U Latina,

(ULatina) and Universidad Americana UAM, S.R.L.

(collectively, Laureate Costa Rica) and (ii) a note due from ULatina to Laureate International.

Consideration for the transaction consisted of $ 15,000 paid at closing and up to $ 7,000 to be paid within the next two years if Laureate Costa Rica meets certain performance metrics.

Additionally, Laureate Costa Rica retained obligations to pay approximately $ 30,000 in finance lease indebtedness for which the Costa Rica Buyer has no recourse to Laureate International.

The Costa Rica Buyer is controlled by certain affiliates of Sterling Capital Partners II, L.P.

(Sterling II).

Sterling II has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement, and Steven Taslitz currently serves as the Sterling-designated director.

Taslitz did not participate in the Laureate Board of Directors’ consideration of the transaction, which was approved by Laureate's Audit Committee as a related party transaction.

Exploration of Strategic Alternatives

On January 27, 2020 , Laureate announced that its Board of Directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value.

As part of this process, the Company will evaluate all potential options for its remaining businesses, including sales, spin-offs or business combinations.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data