What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-02-24 compared with 2021-02-25 · 469 added, 757 removed, 1437 unchanged (46% of the section changed)

Financial Statements

Financial Statements and Supplementary Data

Report of Management on Internal Control over Financial Reporting

2 unchanged sentences

Based on our evaluation, we have concluded that our internal control over financial reporting was effective as of December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2020, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by PricewaterhouseCoopers LLP (PCAOB No.

238 ), an independent registered public accounting firm, as stated in their report which appears herein.

February 24, 2022

2 unchanged sentences

President and Chief Executive Officer

/s/ JEAN-JACQUES CHARHON

Jean-Jacques Charhon

Executive Vice President and Chief Financial Officer

/s/ RICHARD M.

Senior Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

24 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

2 unchanged sentences

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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.

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 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.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Dispositions - gain on sale

As described in Note 5 to the consolidated financial statements, the Company’s income from discontinued operations, net of tax expense, was approximately $486.9 million for the year ended December 31, 2021.

The income from discontinued operations includes i) a pre-tax gain on the sale of Walden e-Learning, LLC of approximately $619.4 million, as well as estimated tax expense of approximately $278.0 million, and ii) a pre-tax gain on the sale of the Company's operations in Brazil of approximately $33.0 million, which includes contingent consideration of approximately $6.5 million in accordance with the terms of the sales agreement.

The sale of Walden e-Learning, LLC closed on August 12, 2021 and the proceeds received were reduced by cash sold, transaction fees and certain closing adjustments.

The sale of the Company’s operations in Brazil closed on May 28, 2021 and the proceeds received were reduced by cash sold, transaction fees and settlement of foreign currency swaps.

The gain on sale of both Walden e-Learning, LLC and the operations in Brazil included the derecognition of the carrying value as of the closing date of the sales and a working capital settlement and price adjustments, as applicable.

The principal considerations for our determination that performing procedures relating to dispositions - gain on sale is a critical audit matter are the high degree of auditor subjectivity and effort in performing procedures and evaluating audit evidence related to the carrying value of each disposal group and contingent consideration relating to the gain on sale.

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 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.

These procedures included testing the effectiveness of controls relating to management’s accounting for the gain from the sale of Walden e-Learning, LLC and the operations in Brazil.

These procedures also included, among others, (i) evaluating the terms of the sale agreements, (ii) testing the cash proceeds and transaction fees recorded by management, (iii) testing the completeness and accuracy of the carrying value of the disposal groups, (iv) evaluating the contingent consideration and the reasonableness of the amounts recorded in accordance with the terms of the sales agreement, and (v) testing the mathematical accuracy of the gain on sale.

/s/ PricewaterhouseCoopers LLP

21 unchanged sentences

Loss from continuing operations before income taxes and equity in net income of affiliates ( 137,507 ) ( 450,839 ) ( 119,661 )

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

Income tax (expense) benefit ( 145,573 ) 130,069 ( 31,041 )

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

Loss from continuing operations ( 283,080 ) ( 320,598 ) ( 150,483 )

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

Income (loss) from discontinued operations, net of tax expense of $ 234,326 , $ 114,257 and $ 33,681 , respectively

486,865 ( 298,104 ) 1,088,147

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

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

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

Net income (loss) 203,785 ( 618,702 ) 937,664

Net (income) loss attributable to noncontrolling interests ( 11,339 ) 5,371 820

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

$ 192,446 $ ( 613,331 ) $ 938,484

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

Basic earnings (loss) per share:

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:

Basic and diluted earnings (loss) per share:

Loss from continuing operations $ ( 1.56 ) $ ( 1.53 ) $ ( 0.68 )

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

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

Income (loss) from discontinued operations 2.57 ( 1.40 ) 4.91

Basic and diluted earnings (loss) per share $ 1.01 $ ( 2.93 ) $ 4.23

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

3 unchanged sentences

For the years ended December 31, 2021 2020 2019

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

Net income (loss) $ 203,785 $ ( 618,702 ) $ 937,664

Other comprehensive income (loss):

1 unchanged sentence

421,972 133,827 42,935

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

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

— — ( 7,950 )

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

Minimum pension liability adjustment, net of tax of $ 0 for all years

( 202 ) ( 1,200 ) 3,596

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

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

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

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

Total other comprehensive income 421,770 132,627 38,581

Comprehensive income (loss) 625,555 ( 486,075 ) 976,245

Net comprehensive (income) loss attributable to noncontrolling interests ( 11,327 ) 4,739 953

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

$ 614,228 $ ( 481,336 ) $ 977,198

16 unchanged sentences

Total current assets 544,319 1,443,786

Notes receivable, net 1,321 353

Property and equipment:

7 unchanged sentences

Operating lease right-of-use assets, net 384,344 462,767

Land use rights, net 1,548 1,628

Goodwill 546,795 574,832

19 unchanged sentences

Current portion of long-term debt and finance leases 49,082 95,818

Current portion of due to shareholders of acquired companies — 1,109

Income taxes payable 29,682 14,737

Income taxes liabilities 38,705 29,682

Derivative instruments — 17,680

14 unchanged sentences

Preferred stock, par value $ 0.001 per share – 49,889 shares authorized as of December 31, 2021 and December 31, 2020, no shares issued and outstanding as of December 31, 2021 and December 31, 2020

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

Common stock, par value $ 0.004 per share – 875,000 shares authorized, 228,831 shares issued and 180,611 shares outstanding as of December 31, 2021 and no shares authorized, issued and outstanding as of December 31, 2020

Class A common stock, par value $ 0.004 per share – no shares authorized, issued and outstanding as of December 31, 2021 and 700,000 shares authorized, 137,162 shares issued and 115,119 outstanding as of December 31, 2020

Class B common stock, par value $ 0.004 per share – no shares authorized, issued and outstanding as of December 31, 2021 and 175,000 shares authorized, 90,792 shares issued and outstanding as of December 31, 2020

Additional paid-in capital 2,388,783 3,760,029

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

Retained earnings (accumulated deficit) 15,523 ( 176,822 )

Accumulated other comprehensive loss ( 520,204 ) ( 941,986 )

19 unchanged sentences

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 617 3 60 — ( 2,531 ) — — — — ( 2,528 )

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

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 — — — — ( 61,974 ) — — — — ( 61,974 )

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 — — — — — — — — ( 370 ) ( 370 )

7 unchanged sentences

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 — — — — — 28,944 — — — 28,944

Balance at January 1, 2019 107,450 430 116,865 467 3,703,796 ( 501,975 ) ( 1,112,695 ) — ( 10,133 ) 2,079,890

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

6 unchanged sentences

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

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

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

Foreign currency translation adjustment, net of tax of $ 0

— — — — — — 133,195 — 632 133,827

Unrealized loss on derivatives, net of tax of $ 0

— — — — — — ( 7,950 ) — — ( 7,950 )

Minimum pension liability adjustment, net of tax of $ 0

7 unchanged sentences

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

Common Stock 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 Shares Amount

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

Entity restructuring adjustment — — — — — — — ( 101 ) — — — ( 101 )

Non-cash stock compensation — — — — — — 10,172 — — — — 10,172

Conversion of Class B shares to Class A shares 39 — ( 39 ) — — — — — — —

Purchase of treasury stock at cost ( 6,035 ) — — — — — — ( 94,210 ) — ( 94,210 )

Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 581 2 — — 296 2 638 — — — — 642

Conversion of Class A and Class B common stock to Common Stock ( 90,497 ) ( 550 ) ( 90,792 ) ( 363 ) 181,289 913 — — — — — —

Purchase of treasury stock at cost ( 25,203 ) — — — ( 974 ) — — — — ( 378,858 ) — ( 378,858 )

Special cash distributions and equitable adjustments to stock-based compensation awards — — — — — — ( 1,381,787 ) — — — — ( 1,381,787 )

Change in noncontrolling interests — — — — — — ( 181 ) — — — 271 90

1 unchanged sentence

Reclassification of redeemable noncontrolling interests and equity — — — — — — — — — — ( 1 ) ( 1 )

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

Net income — — — — — — — 192,446 — — 11,339 203,785

Foreign currency translation adjustment, net of tax of $ 0

9 unchanged sentences

Cash flows from operating activities

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

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

Net income (loss) $ 203,785 $ ( 618,702 ) $ 937,664

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

Depreciation and amortization expense 101,178 143,516 193,356

1 unchanged sentence

Loss on impairment of assets 73,756 790,229 940

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

Gain on sales and disposal of subsidiaries, property and equipment and leases, net ( 609,529 ) ( 22,756 ) ( 753,519 )

Loss (gain) on derivative instruments 24,517 25,980 ( 7,438 )

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

Payments for settlement of derivative contracts — ( 626 ) ( 8,772 )

Loss on debt extinguishment 77,999 610 28,752

4 unchanged sentences

Deferred income taxes 195,563 ( 185,652 ) ( 29,813 )

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

Unrealized foreign currency exchange (gain) loss ( 7,033 ) 26,344 29,186

Non-cash loss from non-income tax contingencies 12,150 3,059 9,075

Payments for lease settlements ( 46,804 ) — —

Other, net 1,106 408 ( 5,341 )

5 unchanged sentences

Deferred revenue and other liabilities ( 98,277 ) 171,474 ( 53,152 )

Net cash provided by operating activities 259,556 339,769 396,858

Net cash (used in) provided by operating activities ( 156,082 ) 259,556 339,769

Cash flows from investing activities

1 unchanged sentence

Expenditures for deferred costs ( 5,843 ) ( 14,538 ) ( 17,701 )

Receipts from sales of discontinued operations, net of cash sold, property and equipment and other 676,569 1,266,042 375,807

Receipts from sales of discontinued operations, net of cash sold, property and equipment 2,150,820 676,569 1,266,042

Settlement of derivatives related to sale of discontinued operations and net investment hedge ( 50,341 ) — 12,866

Proceeds from property insurance recoveries and corporate-owned life insurance — 842 27,356

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

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

Proceeds from sale of investment — — 11,473

Other, net — ( 7 ) 926

Net cash provided by investing activities 2,044,192 587,400 1,116,760

4 unchanged sentences

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

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

Special cash distributions ( 1,374,855 ) — —

Proceeds from exercise of stock options 3,411 25,716 14,007

1 unchanged sentence

Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options ( 2,769 ) ( 1,154 ) ( 2,245 )

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

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

Payments of call premiums and debt issuance costs ( 32,980 ) ( 779 ) ( 9,091 )

Distributions to noncontrolling interest holders — ( 609 ) ( 2,026 )

Net cash used in financing activities ( 2,683,235 ) ( 272,716 ) ( 1,673,977 )

12 unchanged sentences

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).

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.

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

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

While our universities continue to deliver learning online, they also are focused on planning for a safe return to campus, when appropriate to do so.

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.

6 unchanged sentences

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, 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).

Accordingly, all of the divestitures that were part of this strategic shift, which have now been completed, 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.

As a result of these efforts to explore strategic alternatives, during 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 .

The sale of our operations in Australia and New Zealand was completed on November 3, 2020, the sale of our operations in Brazil was completed on May 28, 2021, and the sale of Walden University was completed on August 12, 2021.

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 5, Dispositions, for more information.

3 unchanged sentences

Actual results could differ from these estimates.

Principles of Consolidation and Investments in Affiliates

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.

Principles of Consolidation

Our Consolidated Financial Statements include all accounts of Laureate and our majority-owned subsidiaries.

Intercompany accounts and transactions have been eliminated in consolidation.

2 unchanged sentences

A noncontrolling interest can also be referred to as a minority interest.

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.

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.

Significant influence occurs generally through ownership, directly or indirectly, of at least 20% and up to 50% of the voting interests.

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 of affiliates, net of tax, in the Consolidated Statements of Operations.

Business Combinations

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.

Transaction costs associated with business combinations are expensed as incurred.

If Laureate acquires less than 100% of an entity (a partial acquisition) and consolidates the entity upon acquisition, all assets and liabilities, including noncontrolling interests, are recorded at their estimated fair value.

When a partial acquisition results in Laureate obtaining control of an entity, Laureate remeasures any previously existing investment in the entity at fair value and records a gain or loss.

Partial acquisitions in which Laureate’s control does not change are accounted for as equity transactions.

Revenues and the results of operations of the acquired business are included in the accompanying Consolidated Financial Statements commencing on the date of acquisition.

Laureate accounts for acquired businesses using the acquisition method of accounting.

Certain acquisitions require the payment of contingent amounts of purchase consideration if specified operating results are achieved in periods subsequent to the acquisition date.

For acquisitions consummated on or after January 1, 2009, we record such contingent consideration at fair value on the acquisition date, with subsequent adjustments recognized in Direct costs in our Consolidated Statements of Operations.

Cash payments of contingent consideration that are made soon after the consummation of a business combination are classified within investing activities.

Cash payments of contingent consideration that are made later than that are classified within financing and operating activities.

The portion of the cash payment up to the acquisition date fair value of the contingent consideration liability (including any measurement-period adjustments) will be classified as a financing outflow, and amounts paid in excess of the acquisition date fair value of that liability will be classified as an operating outflow.

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.

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.

We assess the realizability of the indemnification assets each reporting period.

The Company records changes in uncertain income tax positions as a component of Income tax expense, while related changes to the indemnification asset are included in Operating income in the Consolidated Statements of Operations.

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

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

Foreign Currency Translation and Transaction Gains and Losses

The United States Dollar (USD) is the functional currency of Laureate and our subsidiaries operating in the United States.

The United States Dollar (USD) is the reporting currency of Laureate.

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.

3 unchanged sentences

The effects of these translation adjustments are reported as a component of Accumulated other comprehensive income (loss) included in the Consolidated Statements of Stockholders’ Equity.

Laureate has certain intercompany loans that are deemed to have the characteristics of a long-term investment.

That is, the settlement of the intercompany loan is not planned or anticipated in the foreseeable future.

In the past, Laureate has had certain intercompany loans that were deemed to have the characteristics of a long-term investment.

That is, the settlement of the intercompany loan was not planned or anticipated in the foreseeable future.

Transaction gains and losses related to these types of loans are recorded as a component of Accumulated other comprehensive income (loss) included in the Consolidated Statements of Stockholders’ Equity.

4 unchanged sentences

Restricted Cash

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.

Restricted cash includes cash equivalents held to collateralize letters of credit and cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

In addition, Laureate may at times have restricted cash in escrow or otherwise have cash that is not available for use in current operations.

As of December 31, 2020, Laureate’s United States institution, Walden University (Walden), participated in the United States Department of Education (DOE) Title IV student financing assistance lending programs (Title IV programs), and a letter of credit was 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.

As discussed in Note 5, Dispositions, the Company completed the sale of Walden on August 12, 2021 and the DOE released the letter of credit during the fourth quarter of 2021.

Financial Instruments

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.

The fair value of these financial instruments approximates their carrying amounts reported in the Consolidated Balance Sheets with the exception of our prior-year debt, as discussed in Note 8, Debt.

Additional information about fair value is provided in Note 18, Fair Value Measurement.

4 unchanged sentences

Receivables are recognized only to the extent that it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the goods and services that will be transferred to the student.

Laureate offers long-term financing through note receivable agreements with students at certain of our institutions.

These notes receivable generally are not collateralized.

Non-interest bearing, long-term student receivables are recorded at present value using a discount rate approximating the unsecured borrowing rate for an individual.

Differences between the present value and the principal amount of long-term student receivables are accreted through Interest income over their terms.

Occasionally, certain of our institutions have sold certain long-term student receivables to local financial institutions without recourse.

Occasionally, certain of our institutions have sold certain student receivables to local financial institutions without recourse.

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

11 unchanged sentences

Balance at end of period $ 62,226 $ 76,694 $ 60,465

(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.

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

Property and Equipment, and Leased Assets

5 unchanged sentences

Interest is capitalized as a component of the cost of projects during the construction period.

We conduct a significant portion of our operations at leased facilities.

These facilities include our corporate headquarters, other office locations, and many of Laureate’s higher education facilities.

We conduct a significant portion of our operations at leased facilities, including many of Laureate’s higher education facilities and other office locations.

Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease.

35 unchanged sentences

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.

24 unchanged sentences

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.

Other intangible assets also included the Laureate tradename, which in 2020 was determined to no longer have an indefinite life and was fully amortized as of December 31, 2021.

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.

18 unchanged sentences

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.

2 unchanged sentences

Revenue Recognition

Laureate's revenues primarily consist of tuition and educational service revenues.

Our revenues primarily consist of tuition and educational service revenues.

We also generate other revenues from student fees, dormitory/residency fees and other education-related activities.

1 unchanged sentence

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

These revenues are recognized net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs.

These revenues are recognized net of scholarships and other discounts, refunds and waivers.

For further description, see Note 3, Revenue.

8 unchanged sentences

Prior to the IPO, the estimated fair value of the underlying common stock was based on third-party valuations.

After our IPO, the estimated fair value of the underlying common stock is based on the closing price of our Class A common stock on the grant date.

After our IPO, the estimated fair value of the underlying common stock is based on the closing price of our common stock on the grant date.

Because we have only been publicly traded since February 2017, our volatility estimates are based on an average of:

5 unchanged sentences

The related compensation expense recognized is affected by our estimates of the vesting probability of these performance awards.

In one case, Laureate granted a small number of restricted stock units where vesting is based on the fulfillment of both a service condition and a market condition;

a Monte Carlo simulation method was used to estimate the grant date fair value these awards.

Laureate records the amount of taxes payable or refundable for the current year.

6 unchanged sentences

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.

For all Continuing Operations except one institution in Peru, deferred tax liabilities have not been recognized for undistributed foreign earnings because management believes that the earnings will be indefinitely reinvested outside the United States under the Company's planned tax neutral methods.

We earn substantially all of our income from subsidiaries located in countries outside the United States.

Deferred tax liabilities have not been recognized for undistributed historical foreign earnings because management believes that the historical retained earnings will be indefinitely reinvested outside the United States under the Company's planned tax-neutral methods.

Our assertion that earnings from our foreign operations will be indefinitely reinvested is supported by projected working capital and long-term capital plans in each foreign subsidiary location in which the earnings are generated.

Additionally, we believe that we have the ability to indefinitely reinvest foreign earnings based on our domestic operation's cash repatriation strategies, projected cash flows, projected working capital and liquidity, and the expected availability of capital within the debt or equity markets.

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 may be remitted to the United States in the foreseeable future, we will be required to recognize deferred tax expense and liabilities on those amounts.

For Peru, we have recognized deferred tax liabilities of approximately $ 100 for the portion of the undistributed foreign earnings that are not expected to be indefinitely reinvested outside the United States.

If our expectations change based on future developments, such that some or all of the undistributed earnings of our foreign subsidiaries may be remitted to the United States in the foreseeable future, we will be required to recognize deferred tax expense and liabilities on any amounts that we are unable to repatriate in a tax-free manner.

For additional information regarding income taxes and deferred tax assets and liabilities, see Note 13, Income Taxes.

7 unchanged sentences

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.

While this evaluation did not result in a material effect to the Company’s Consolidated Financial Statements as of and for the years ended December 31, 2021 and 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):

Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, which sets forth a “current expected credit loss” (CECL) model and requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.

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

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):

Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued ASU 2017-04 in order to simplify the test for goodwill impairment by eliminating Step 2, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill.

Under the amendments in this ASU, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value.

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

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.

Accounting Standards Update (ASU) No.

2019-12 (ASU 2019-12), Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, which removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods.

The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods.

The Company adopted ASU 2019-12 in the first quarter of 2021, and the adoption had no material impact to our Consolidated Financial Statements.

Revenue Recognition

Laureate's revenues primarily consist of tuition and educational service revenues.

Our revenues primarily consist of tuition and educational service revenues.

We also generate other revenues from student fees, dormitory/residency fees and other education-related activities.

1 unchanged sentence

These revenues are recognized net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs.

These revenues are recognized net of scholarships and other discounts, refunds and waivers.

Laureate's institutions have various billing and academic cycles.

We adopted ASC Topic 606, “Revenue from Contracts with Customers” (Topic 606) as of January 1, 2018 using the modified retrospective transition method and elected to apply the standard only to contracts that were not completed as of that date.

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.

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

We determine revenue recognition through the five-step model prescribed by ASC Topic 606, Revenue from Contracts with Customers , as follows:

• Identification of the contract, or contracts, with a customer;

25 unchanged sentences

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

(1) Includes the elimination of intersegment revenues.

(1) Includes the elimination of inter-segment revenues.

Performance Obligations

3 unchanged sentences

Our performance obligations are primarily satisfied over time during the course of an academic semester or academic year.

Laureate's transaction price is determined based on gross price, net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs.

Laureate's transaction price is determined based on gross price, net of scholarships and other discounts, refunds and waivers.

The majority of our revenue is derived from tuition and educational services agreements with students, and thus, is recognized over time on a weekly straight-line basis over each academic session.

11 unchanged sentences

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 $ 138,738 and $ 123,132 a s of December 31, 2020 and 2019, respectively.

Total accounts receivable from our contracts with students were $ 117,987 and $ 138,738 as of December 31, 2021 and 2020, respectively.

All contract asset amounts are classified as current.

8 unchanged sentences

We also pay certain commissions and bonuses where the period of benefit is one year or less .

We have elected the practical expedient available in ASC 340-40 whereby any incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less .

Practical Expedients and Optional Exemptions

We elected to adopt this standard using the modified retrospective approach with the cumulative effect of adoption recognized at the initial date of application.

We have elected to apply the standard only to contracts that are not completed at the initial date of application.

As noted above, we recognize the incremental costs of obtaining a contract with a student as an expense when incurred in instances where the amortization period of the asset that we would have recognized is one year or less .

Practical Expedients

We recognize the incremental costs of obtaining a contract with a student as an expense when incurred in instances where the amortization period of the asset that we would have recognized is one year or less .

We have made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions and collected by the entity from our customers (e.g., sales, use, value added and excise taxes).

1 unchanged sentence

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.

All remaining markets have been divested (the Discontinued Operations).

As described in Note 5, Dispositions, a number of sale transactions closed during the three years ended December 31, 2021.

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

7 unchanged sentences

Gain on sale of discontinued operations before taxes, net 636,172 25,048 793,475

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

Pretax income (loss) of discontinued operations 721,191 ( 183,847 ) 1,121,828

Income tax expense ( 234,326 ) ( 114,257 ) ( 33,681 )

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

Income (loss) from discontinued operations, net of tax $ 486,865 $ ( 298,104 ) $ 1,088,147

Operating cash flows of discontinued operations $ 39,544 $ 288,271 $ 315,406

1 unchanged sentence

Financing cash flows of discontinued operations $ ( 18,054 ) $ ( 969 ) $ ( 103,583 )

2021 Loss Recognized on Held-For-Sale Disposal Group

During the first quarter of 2021, the Company recorded a loss of approximately $ 32,400 related to the Brazil 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 less costs to sell as of March 31, 2021, in accordance with ASC 360-10, “Impairment and Disposal of Long-lived Assets” (ASC 360-10).

The estimated fair value was based on the sale agreement for the disposal group that was announced on November 2, 2020, as previously disclosed.

The sale of the Brazil disposal group closed on May 28, 2021.

See Note 5, Dispositions, for more information.

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.

As described in Note 1, Description of Business, in January 2020, Laureate's Board of Directors authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value.

As part of that process, the Company evaluated 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.

3 unchanged sentences

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.

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:

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

5 unchanged sentences

As discussed further in Note 5, 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.

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.

7 unchanged sentences

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.

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, 2021 and 2020, in accordance with ASC 205.

9 unchanged sentences

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

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

Other assets classified as Held for Sale

Property and equipment, net — 8,403

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

Total assets held for sale $ 6,164 $ 1,917,435

December 31, 2020 December 31, 2019

Liabilities of Discontinued Operations

4 unchanged sentences

Total liabilities held for sale $ 10,849 $ 702,256

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

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

On November 5, 2018, Laureate Education Peru, SRL, an indirect wholly owned subsidiary of the Company, acquired all of the capital stock of Instituto de Educación Superior Tecnológico Privado Red Avansys SAC (Avansys), an institution in Peru, for a total purchase price of approximately 63,000 Peruvian Nuevo Sols (approximately $ 18,900 at the acquisition date), plus debt assumed.

The cash paid at acquisition, net of cash acquired, was $ 17,019 .

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

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.

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

Current assets $ 3,921

Property and equipment 13,673

Goodwill 4,658

Other long-term assets 815

Total assets acquired 23,067

Current portion of long-term debt 874

Other current liabilities 3,332

Total liabilities assumed 4,206

Net assets acquired attributable to Laureate Education, Inc.

Debt assumed 874

Net assets acquired attributable to Laureate Education, Inc.

plus debt assumed

Net assets acquired $ 18,861

Cash acquired ( 1,842 )

Net cash paid at acquisition $ 17,019

The amounts recorded for the 2018 acquisition are considered final.

None of the goodwill related to the 2018 acquisition is expected to be deductible for income tax purposes.

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

2021 Dispositions

Honduras Divestiture

On March 8, 2021, the Company completed the divestiture of its operations in Honduras to Fundación Nasser, a not-for-profit foundation in Honduras.

In connection with the transaction, the Company transferred control of Fundaempresa, which manages Universidad Tecnológica Centroamericana (UNITEC), including Centro Universitario Tecnológico (CEUTEC).

The proceeds received, net of cash sold, closing costs and a working capital adjustment that was completed during the second quarter of 2021, were approximately $ 24,000 .

Under the transaction terms, additional consideration of $ 2,000 was paid into an escrow account at closing and, assuming certain conditions are met, will be released to the Company based on the following schedule:

50 % after 18 months, 25 % after 24 months and 25 % after 36 months.

The Company recognized a pre-tax loss of approximately $ 1,700 , which is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the year ended December 31, 2021.

Receipt of Remaining Escrow Receivable from Sale of China Operations

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.

In June 2020, the Company received approximately one-half of the escrow account, and the remainder was due in January 2021.

In April 2021, the Company received 168,284 Hong Kong Dollars (approximately $ 21,650 at the date of receipt), which represented payment in full for the remainder of the escrow account.

Accordingly, the Company recognized a gain of approximately $ 13,600 , which is included in Income (loss) from discontinued operations, net of tax, in the Consolidated Statement of Operations for the year ended December 31, 2021.

Brazil Divestiture

On May 28, 2021, the Company completed the sale of its operations in Brazil to Ânima Holding S.A.

The proceeds received, net of cash sold, transaction fees and settlement of foreign currency swaps, were approximately $ 625,000 .

The Company used a portion of the proceeds to repay the remaining balance outstanding under its Senior Notes due 2025.

Additionally, the buyer assumed indebtedness, gross of cash sold, of approximately $ 121,000 .

The Company recognized a pre-tax gain on the sale of approximately $ 33,000 , which included:

i) the derecognition of the carrying value of the disposal group;

ii) working capital and purchase price adjustments that were completed during the third and fourth quarters of 2021;

and iii) contingent consideration of approximately $ 6,500 that was recognized during the fourth quarter of 2021, in accordance with the terms of the sale agreement.

This gain is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the year ended December 31, 2021.

Walden Divestiture

On August 12, 2021, the Company closed the transaction pursuant to the Membership Interest Purchase Agreement (the Walden Purchase Agreement), dated September 11, 2020, with Adtalem Global Education Inc., a Delaware corporation (the Walden Purchaser).

Pursuant to the Walden Purchase Agreement, the Company sold 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 (Walden), and its subsidiary, Walden University, LLC, a Florida limited liability company and an indirect wholly owned subsidiary of the Company (together with Walden, the Walden Group).

The cash proceeds received, net of cash sold, transaction fees, and certain closing adjustments, were approximately $ 1,403,500 .

Also, at the closing date of August 12, 2021, the Walden Purchaser paid an additional $ 74,000 of the sale transaction value into an escrow account, which will be released in full or in part to the Company one year following the closing of the transaction pursuant to the terms and conditions of the escrow agreement.

In addition, approximately $ 83,600 of restricted cash that related to collateralized regulatory obligations was released during the fourth quarter of 2021.

The Company recognized a pre-tax gain on the sale of approximately $ 619,400 , as well as estimated tax expense of approximately $ 278,000 .

The gain included the derecognition of the carrying value of Walden as well as a working capital settlement that was completed during the fourth quarter of 2021 and is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the year ended December 31, 2021.

Collection of Note Receivable from Divestiture of Chilean Operations

On September 10, 2020, the Company completed the divestiture of its operations in Chile.

Under the terms of the agreement, the purchase price included a note receivable of $ 21,500 that was payable one year from the date of divestiture.

In September 2021, the Company collected this receivable.

2020 Dispositions

Sale of Costa Rica Operations

4 unchanged sentences

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 relevant performance metrics were not met, and accordingly the Company did not receive any additional proceeds.

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 .

1 unchanged sentence

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.

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.

The Costa Rica Buyer was 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.

Previously, Sterling II had the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement, and Steven Taslitz served 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.

6 unchanged sentences

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.

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.

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

During the fourth quarter of 2021, the Company and the NSAD Buyers reached an agreement to offset the subsidy amount that remained at that time with amounts that the NSAD Buyers owed to the Company, resulting in a net payment to the NSAD Buyers of approximately $ 625 .

During the year ended December 31, 2020, 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.

Divestiture of Chilean Operations

3 unchanged sentences

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.

In addition, the purchase price included a note receivable of $ 21,500 that was payable one year from the date of divestiture and was subsequently collected by the Company in September 2021, as noted above.

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.

9 unchanged sentences

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.

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.

3 unchanged sentences

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.

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 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.

An additional $ 420 , which represented the minority owner’s share of the taxes that were withheld as noted above, was 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.

1 unchanged sentence

Receipt of Portion of Deferred Consideration

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

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.

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

Subsequently, the Company received a total of $ 11,436 in settlement of the deferred consideration and settlement of all future claims.

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).

Pursuant to the ANZ Purchase Agreement, the ANZ Seller 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.

5 unchanged sentences

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.

In 2020, the Company received approximately $ 7,000 of the total purchase price, and the remaining balance was collected in November 2021.

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.

27 unchanged sentences

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 expected to receive;

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

Sale of Monash South Africa

41 unchanged sentences

Sale of Universidad Interamericana de Panamá (UIP)

In early October 2019, the Company closed on the previously announced sale of UIP, in addition to real estate which serves as the campus of UIP, to Universal Knowledge Systems, Inc.

In October 2019, the Company closed on the previously announced sale of UIP, in addition to real estate which serves as the campus of UIP, to Universal Knowledge Systems, Inc.

and Global Education Services, Inc.

16 unchanged sentences

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

Sale of Cyprus and Italy Operations

On January 11, 2018, we completed the sale of European University-Cyprus Ltd (EUC) and Laureate Italy S.r.L.

(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 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.

Sale of China Operations

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 .

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).

On July 27, 2018, the Company received the First Holdback Payment from the buyer, net of withholding taxes and agreed-upon legal fees, for a net payment of HKD 142,221 or $ 18,117 at the date of receipt, prior to banker transaction fees.

Twelve months after the closing date, the buyer was required to pay to the Company the HKD equivalent of RMB 60,000 (the Second Holdback Payment).

On January 25, 2019, Laureate received HKD 71,463 (approximately $ 9,100 ) for the Second Holdback Payment, net of legal fees.

Both the First Holdback Payment and the Second Holdback Payment were subject to deduction of any indemnifiable losses payable by the Company to the buyer pursuant to the sale purchase agreement.

The remainder of the 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, 2018, the Company had recorded a receivable for the Second Holdback Payment that was collected in January 2019, as well as a receivable of approximately $ 25,900 for the portion of the escrowed amount that the Company expects to receive.

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 income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of German Operations

On April 12, 2018, LEI European Investments B.V., a Netherlands private limited liability company (LEI BV), and Laureate International B.V., a Netherlands private limited liability company (Laureate International), both of which are indirect, wholly owned subsidiaries of Laureate Education, Inc., executed and closed a Sale and Purchase Agreement (the Laureate Germany SPA) with Global University Systems Germany B.V., a Netherlands private limited liability company (Global University Systems).

Pursuant to the Laureate Germany SPA, Global University Systems purchased from LEI BV all of the issued and outstanding shares of capital stock of Laureate Germany Holding GmbH and its consolidated institutions, including the University of Applied Sciences Europe and Laureate Academies GmbH (collectively, Laureate Germany), and Laureate International guaranteed the obligations of LEI BV under the Laureate Germany SPA.

Upon completion of the sale, LEI BV received gross proceeds of EUR 1,000 (approximately $ 1,200 at the date of receipt).

At the date of sale, Laureate Germany had approximately $ 12,900 of cash and restricted cash on its balance sheet.

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 income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of Moroccan Operations

On November 29, 2017, Laureate Middle East Holdings B.V., a Netherlands private limited liability company and an indirect, wholly owned subsidiary of the Company (LMEH), and La Société Maroc Emirats Arabes Unis de Développement, a Morocco company (SOMED and, together with LMEH, the Morocco Sellers), Laureate I B.V., a Netherlands private limited liability company and an indirect, wholly owned subsidiary of the Company (the Morocco Guarantor), and UPM Pédagogique, a Morocco company (the Morocco Purchaser), entered into a Share Purchase Agreement (the Laureate Somed SPA), pursuant to which the Morocco Purchaser agreed to purchase from the Morocco Sellers all of the issued and outstanding capital shares of Laureate Somed Holding, a Morocco company (Laureate Somed), for a total transaction value of 500,000 Moroccan Dirhams, and the Morocco Guarantor agreed to guarantee certain obligations of LMEH under the Laureate Somed SPA.

The transaction closed on April 13, 2018, and LMEH received net proceeds of 300,000 Moroccan Dirhams (approximately $ 32,500 at the date of sale, or approximately $ 31,100 net of cash sold).

The proceeds were used for general debt repayment across the Company rather than repayment of a specific tranche.

Prior to the consummation of the sale, LMEH owned approximately 60 % of the capital shares of Laureate Somed, while SOMED owned the remaining approximately 40 % of the capital shares of Laureate Somed.

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 income (loss) from discontinued operations on the Consolidated Statement of Operations.

Sale of Kendall College, LLC

On January 15, 2018, Kendall College, LLC (Kendall), an Illinois limited liability company and indirect wholly owned subsidiary of Laureate, The Dining Room at Kendall NFP, an Illinois not-for-profit corporation, National Louis University, an Illinois not for profit corporation (NLU), and Laureate, solely as guarantor of certain of Kendall’s obligations thereunder, entered into an asset purchase agreement.

On August 6, 2018, we closed the transaction and Kendall transferred to NLU certain assets, including all of Kendall's education programs, subject to certain conditions, in exchange for consideration of one dollar.

Closing of the transaction was subject to prior receipt of regulatory consents, including those of the U.S.

Department of Education and the Higher Learning Commission.

As part of the agreement, at closing Laureate paid to NLU $ 14,000 to support NLU’s construction of facilities for the acquired culinary program on NLU’s campus, subject to possible partial recoupment under specified conditions during the 10-year post-closing period.

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 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.

Business and Geographic Segment Information

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.

Mexico and Peru.

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.

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

Our institutions are focused on planning for a safe return to campus when appropriate to do so.

We expect our educational offerings will utilize hybrid (a combination of onli ne and in-classroom) courses and programs to deliver their curriculum .

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

2 unchanged sentences

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.

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.

2 unchanged sentences

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.

In Mexico, 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.

1 unchanged sentence

Students in our Mexican institutions typically finance their own education.

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

In Peru, private universities are increasingly providing the capacity to meet growing demand in the higher-education market.

Laureate owns three institutions in Peru.

1 unchanged sentence

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.

The Corporate amounts presented in the following tables include corporate charges that were not allocated to our reportable segments and adjustments to eliminate intersegment items.

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

The Corporate amounts presented in the following tables include corporate charges that were not allocated to our reportable segments and adjustments to eliminate inter-segment items.

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:

1 unchanged sentence

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.

Beginning in 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.

It included the establishment of regional shared services organizations (SSOs), 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, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs incurred in connection with the dispositions described in Note 5, Dispositions.

When we review Adjusted EBITDA on a segment basis, we exclude intercompany revenues and expenses related to network fees and royalties between our segments, which eliminate in consolidation.

3 unchanged sentences

Revenues $ 540,429 $ 537,056 $ 9,216 $ 1,086,701

Adjusted EBITDA 112,917 189,488 ( 96,708 ) 205,697

Depreciation and amortization expense 29,461 24,196 47,574 101,231

3 unchanged sentences

Revenues $ 534,607 $ 482,878 $ 7,432 $ 1,024,917

Adjusted EBITDA 147,807 197,828 ( 142,014 ) 203,621

Depreciation and amortization expense 29,032 26,962 27,139 83,133

3 unchanged sentences

Revenues $ 652,846 $ 546,751 $ 12,473 $ 1,212,070

Adjusted EBITDA 143,221 169,213 ( 172,875 ) 139,559

Depreciation and amortization expense 31,132 27,703 23,145 81,980

13 unchanged sentences

EiP expenses ( 75,420 ) ( 89,647 ) ( 75,048 )

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

Operating (loss) income ( 4,647 ) ( 329,302 ) 36,020

Interest income 4,378 2,169 3,294

29 unchanged sentences

Balance at December 31, 2019 $ 525,256 $ 81,227 $ 606,483

Acquisitions — — —

Impairments — — —

Currency translation adjustments ( 25,006 ) ( 6,645 ) ( 31,651 )

Balance at December 31, 2020 $ 500,250 $ 74,582 $ 574,832

Acquisitions — — —

Impairments — — —

Currency translation adjustments ( 21,027 ) ( 7,010 ) ( 28,037 )

3 unchanged sentences

Amortization expense was $ 23,069 , $ 7,583 and $ 0 for the years ended December 31, 2021, 2020 and 2019, 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 finite-lived tradename was fully amortized as of December 31, 2021.

As such, the estimated future amortization expense for the finite-lived tradename for the years ending December 31, 2022 and beyond is $ 0 .

The following table summarizes our identifiable intangible assets as of December 31, 2021:

21 unchanged sentences

Impairments of Goodwill — — —

Impairments of Deferred costs and Other intangible assets, net — — —

Impairments of long-lived assets 31,971 248 —

Impairments of long-lived assets and deferred costs 21,051 31,971 248

Total $ 72,488 $ 351,971 $ 248

4 unchanged sentences

Where a market approach is used, the inputs also include publicly available data about our competitors' financial ratios and transactions.

For purposes of our annual impairment testing of the Company’s indefinite-lived tradenames, fair value measurements were determined 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.

deemed “Level 3” fair value measurements as defined in Note 18, Fair Value Measurement.

These inputs include our expectations about future revenue growth, marginal income tax rates by jurisdiction, the discount rate and the estimated royalty rate.

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.

2021 Loss on Impairment of Assets

Impairment of Finite-Lived Tradename (Laureate Tradename)

During the first quarter of 2021, the Company recognized an impairment charge of approximately $ 51,400 on the Laureate tradename, a finite-lived intangible asset.

In March 2021, the Company decided that, during 2021, it would wind down certain support functions related to the Laureate network and would no longer invest in and support the Laureate tradename beyond 2021.

As a result, the Company tested the asset for impairment and 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 remaining useful life of the asset.

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 $ 51,400 and recorded an impairment charge for that amount.

The significant assumptions used in estimating the fair value included:

(1) the revenue growth rates and (2) the estimated royalty rates.

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 attributable to the shortened duration of the estimated future revenues.

The remaining carrying value of the tradename asset was fully amortized as of December 31, 2021.

2020 Loss on Impairment of Assets

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.

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 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, 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.

7 unchanged sentences

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.

As of December 31, 2020, the finite-lived Laureate tradename had a net carrying amount of $ 74,505 and was being amortized over five years .

Impairment of Brazil E2G Software Assets

6 unchanged sentences

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.

Approximately $ 23,800 of the impairment charge was related to assets recorded on the Corporate segment and was therefore included in Continuing Operations.

The remaining portion of the impairment charge, approximately $ 3,300 , related to assets recorded on the Brazil segment and was therefore included in Discontinued Operations.

Outstanding long-term debt was as follows:

13 unchanged sentences

As of December 31, 2021 , aggregate annual maturities of the senior and other debt, excluding finance lease obligations and sale-leaseback financings, were as follows:

December 31, Senior and Other Debt

Years Ended December 31, Senior and Other Debt

2022 $ 43,826

1 unchanged sentence

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 Term Loan).

2024 Term Loan

On February 1, 2018, we amended our Senior Secured Credit Facility to reduce the interest rate on the 2024 Term Loan.

In connection with this transaction, we also repaid $ 350,000 of the principal balance of the 2024 Term Loan in addition to $ 1,239 of accrued interest using the proceeds from the sale of our Cyprus and Italy operations, along with borrowings on our revolving credit facility that were subsequently repaid with the China sale proceeds.

Pursuant to the February 1, 2018 amendment, the interest rate margins applicable to the 2024 Term Loan were amended to 3.50 % for LIBOR term loans and 2.50 % for ABR term loans and such interest rate margins were no longer based upon the Company’s consolidated total debt to consolidated EBITDA ratio.

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 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.

Revolving Credit Facility

Pursuant to terms of the Second Amended and Restated Credit Agreement in 2017, the maturity date for the Revolving Credit Facility was April 26, 2022.

On October 7, 2019, the Company entered into a Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement).

Among other things, the Third A&R Credit Agreement increased the borrowing capacity of our revolving credit facility from $ 385,000 to $ 410,000 and extended the maturity date from April 26, 2022 to October 7, 2024.

Under the Third A&R Credit Agreement, the revolving credit facility bears interest at a per annum interest rate, at the option of the Company, at either the LIBO rate or the ABR rate, as defined in the agreement, plus an applicable margin of 2.50 % per annum, 2.25 % per annum, 2.00 % per annum or 1.75 % per annum for LIBOR loans, and 1.50 % per annum, 1.25 % per annum, 1.00 % per annum or 0.75 % per annum for ABR loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the agreement.

As a subfacility under the Revolving Credit Facility, the Third A&R Credit Agreement provides for letter of credit commitments in the aggregate amount of $ 50,000 .

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 %.

On October 7, 2019, the Company entered into an amendment of its credit agreement (the Third A&R Credit Agreement).

Under the Third A&R Credit Agreement, the Company maintains a revolving credit facility (the Senior Secured Credit Facility) that has a borrowing capacity of $ 410,000 and has a maturity date of October 7, 2024.

The Senior Secured Credit Facility bears interest at a per annum interest rate, at the option of the Company, at either the LIBO rate or the ABR rate, as defined in the agreement, plus an applicable margin of 2.50 % per annum, 2.25 % per annum, 2.00 % per annum or 1.75 % per annum for LIBOR loans, and 1.50 % per annum, 1.25 % per annum, 1.00 % per annum or 0.75 % per annum for ABR loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the agreement.

The Senior Secured Credit Facility provides for letter of credit commitments in the aggregate amount of $ 50,000 .

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 (i) the greater of (a) $ 565,000 and (b) 100% of the consolidated EBITDA of the Company, plus (ii) 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, plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

As of December 31, 2021 and December 31, 2020 the Revolving Credit Facility had a total outstanding balance of $ 0 .

Guarantors of the Senior Secured Credit Facility

1 unchanged sentence

is the borrower under our Senior Secured Credit Facility.

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.

As of December 31, 2020 and 2019, the carrying value of the Walden receivables and intangibles pledged as collateral was $ 407,267 and $ 400,484 , respectively.

Additionally, not more than 65 % of the shares held directly by United States guarantors in non-domestic subsidiaries are pledged as collateral.

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.

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.

All of Laureate’s required United States legal entities, excluding 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.

Additionally, not more than 65 % of the shares held directly by Laureate Education, Inc.

or any guarantors in non-domestic subsidiaries are pledged as collateral.

Interest on the Senior Notes due 2025 was payable semi-annually on May 1 and November 1.

We could 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.

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.

1 unchanged sentence

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 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.

2 unchanged sentences

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.

As of December 31, 2020, our Senior Notes due 2025 had an outstanding balance of $ 798,725 .

The Senior Notes due 2025 were fully redeemed in 2021, as described below.

On May 4, 2021, the Company redeemed $ 500,000 aggregate principal amount of its Senior Notes due 2025 at a redemption price of 104.125 % of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date.

The Company used a portion of the proceeds from the sale of its operations in Australia and New Zealand, which was completed on November 3, 2020, to fund the redemption.

Additionally, on May 28, 2021, the Company completed the sale of its operations in Brazil and used a portion of the proceeds to redeem the remaining outstanding balance of the Senior Notes due 2025 of $ 298,725 at a redemption price of 104.125 % of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date of, June 3, 2021.

Estimated Fair Value of Debt

The estimated fair value of our debt was determined using observable market prices since the majority of our securities, including the Senior Secured Credit Facility and the Senior Notes due 2025, are traded in a brokered market.

The fair value of our remaining debt instruments approximates carrying value based on their terms.

As of December 31, 2020 and December 31, 2019, our long-term debt was classified as Level 2 within the fair value hierarchy, based on the frequency and volume of trading in the brokered market.

As of December 31, 2021, the estimated fair value of our debt approximated its carrying value.

As of December 31, 2020, the estimated fair value of our Senior Notes due 2025 was determined using observable market prices, as they were traded in a brokered market.

The fair value of the remaining debt instruments was approximated at the carrying value based on their terms.

As of December 31, 2020, our long-term debt was classified as Level 2 within the fair

value hierarchy, based on the frequency and volume of trading in the brokered market.

The estimated fair value of our debt was as follows:

December 31, 2020 December 31, 2019

Carrying amount Estimated fair value Carrying amount Estimated fair value

December 31, 2020

Carrying amount Estimated fair value

Total senior and other debt $ 996,369 $ 1,043,294

Certain Covenants

As of December 31, 2020, our senior long-term debt contained certain negative covenants including, among others:

As of December 31, 2021, our Third A&R Credit Agreement contained certain negative covenants including, among others:

(1) limitations on additional indebtedness;

8 unchanged sentences

Debt Modification and Loss on Debt Extinguishment

In connection with the repayment of the Senior Notes during the year ended December 31, 2021, the Company recorded a Loss on debt extinguishment of $ 77,940 , related to the redemption premium paid and the write off of the unamortized deferred financing costs associated with the repaid debt balances.

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.

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 and a debt discount associated with repaid debt balances.

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 $ 10,103 , $ 10,370 and $ 11,187 for the years ended December 31, 2020, 2019

and 2018, 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 $ 4,628 , $ 10,103 and $ 10,370 for the years ended December 31, 2021, 2020 and 2019, respectively.

During the years ended December 31, 2021, 2020 and 2019, we paid and capitalized a total of $ 0 , $ 669 and $ 1,368 , respectively, in debt issuance costs.

12 unchanged sentences

At December 31, 2021, interest rates on our lines of credit ranged from 2.30 % to 5.99 %.

At December 31, 2019, we had one line of credit outstanding that had an interest rate of 7.93 %.

At December 31, 2020, interest rates on our lines of credit ranged from 2.10 % to 7.93 %.

Our weighted-average short-term borrowing rate was 2.72 % and 6.13 % at December 31, 2021 and 2020, respectively.

3 unchanged sentences

Interest rates on notes payable ranged from 5.09 % to 10.25 % and 2.10 % to 10.25 % at December 31, 2021 and 2020, respectively.

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 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).

In December 2017, Universidad del Valle de México (UVM Mexico) entered into an agreement with a bank for a loan of MXN 1,700,000 (approximately $ 89,000 at the time of the loan).

In 2019, this loan was reassigned to Estrater, S.A.

de C.V., SOFOM ENR (Estrater).

In 2021, Estrater was merged into Laureate Education Mexico S de RL de CV (LEM), a wholly owned Mexican subsidiary of the Company.

Consequently, the loan was reassigned to LEM.

The loan matures in June 2024 and carries a variable interest rate based on the 28-day Mexican Interbanking Offer Rate (TIIE), plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement ( 8.12 % and 5.98 % as of December 31, 2021 and 2020, respectively).

Quarterly principal payments on the loan commenced in December 2018, beginning at MXN 42,500 ($ 2,052 at December 31, 2021) and increasing over the term of the loan to MXN 76,500 ($ 3,694 at December 31, 2021), with a balloon payment of MXN 425,000 ($ 20,521 at December 31, 2021) 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.

In June 2020, during the COVID-19 pandemic, 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.

2 unchanged sentences

As of December 31, 2021 and 2020, one loan remained outstanding, and had an outstanding balance of $ 10,284 and $ 13,361 , 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.

As of December 31, 2020, the remaining loan carried an interest rate of 7.93 % and was scheduled to mature in October 2022.

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.

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.

During the deferral period, the quarterly interest payments continued per the terms of the original agreement, and the quarterly principal payments resumed in April 2021.

In 2021, the loan's maturity date was extended to November 2025 and the interest rate was reduced to 5.09 %.

Principal payments, plus accrued and unpaid interest, are made semi-annually in April and October.

As of December 31, 2020, Laureate had outstanding notes payable at Universidad Privada del Norte (UPN), one of our institutions in Peru, with a balance of $ 12,694 .

Those loans had interest rates ranging from 2.10 % to 7.85 % and varying maturity dates through January 2022.

The loans were fully repaid during 2021.

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).

3 unchanged sentences

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.

During the deferral period, the quarterly interest payments continued per the terms of the original agreement, and the quarterly principal payments resumed in June 2021.

As of December 31, 2021 and 2020, this loan had a balance of $ 29,035 and $ 44,029 , respectively.

Laureate conducts a significant portion of its operations at leased facilities.

These facilities include our corporate headquarters, other office locations, and many of Laureate's higher education facilities.

Laureate conducts a significant portion of its operations at leased facilities, including many of Laureate's higher education facilities and other office locations.

Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease.

As a result of adopting ASC Topic 842 on January 1, 2019, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below.

As a result of adopting ASC Topic 842, "Leases," on January 1, 2019, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below.

Finance Leases

26 unchanged sentences

Weighted average remaining lease terms

Operating leases 9.9 years 6.5 years

Finance leases 14.5 years 5.3 years

Operating leases 9.4 years 9.9 years 6.5 years

Finance leases 14.9 years 14.5 years 5.3 years

Weighted average discount rate

29 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases $ 69,881 $ 75,196

Operating cash flows from finance leases $ 2,750 $ 1,831

Financing cash flows from finance leases $ 2,736 $ 1,267

Operating cash flows used for operating leases $ 75,164 $ 69,881 $ 75,196

Operating cash flows used for finance leases $ 4,107 $ 2,750 $ 1,831

Financing cash flows used for finance leases $ 4,874 $ 2,736 $ 1,267

Leased assets obtained for new finance lease liabilities $ 1,997 $ 27,757 $ 24,774

Leased assets obtained for new operating lease liabilities $ 7,674 $ 13,565 $ 10,038

Corporate Office Lease Termination

In March 2021, the Company exercised its one-time right under the operating lease agreement for its former corporate headquarters in Baltimore, Maryland, to terminate the lease effective June 30, 2022.

In connection with the exercise of this early termination option, the Company was required to pay an early termination fee of approximately $ 1,200 , half of which was paid in March 2021.

In December 2021, the Company and the landlord agreed to a termination of the lease agreement, effective December 31, 2021.

In connection with this lease termination, the Company made a total payment of approximately $ 2,750 , which included the second half of the early termination fee noted above, as well as all remaining amounts owed under the lease.

Kendall Lease Termination

In December 2021, the Company completed a lease termination agreement with the landlord of its Kendall property in Chicago, Illinois.

In connection with the lease termination agreement, the Company made a total payment of approximately $ 44,050 and recorded a loss of approximately $ 25,800 , which is included in Operating (loss) income in the Consolidated Statement of Operations for the year ended December 31, 2021.

Commitments and Contingencies

3 unchanged sentences

We do not believe that any settlement would have a material impact on our Consolidated Financial Statements.

Contingent Liabilities for Taxes, Indemnification Assets and Other

As of December 31, 2020 and 2019, Laureate has recorded cumulative liabilities totaling $ 38,355 and $ 44,595 , respectively, for taxes other-than-income tax, principally payroll-tax-related uncertainties recorded at the time of an acquisition.

Included in these amounts, as of December 31, 2020 and 2019, $ 37,794 and $ 41,560 , respectively, were classified as held for sale.

The changes in this recorded liability are related to acquisitions, interest and penalty accruals, changes in tax laws, expirations of statutes of limitations, settlements and changes in foreign currency exchange rates.

Contingent Liabilities for Taxes

As of December 31, 2021 and 2020, Laureate has recorded cumulative liabilities totaling $ 1,252 and $ 38,355 , respectively, for taxes other-than-income tax, principally payroll-tax-related uncertainties recorded at the time of an acquisition, of which $ 37,794 was classified as held for sale as of December 31, 2020.

The majority of the liability balance at December 31, 2020 related to our operations in Brazil which were sold on May 28, 2021.

See Note 5, Dispositions, for more information.

The terms of the statutes of limitations on these contingencies vary but can be up to 10 years.

These liabilities were included in current and long-term liabilities on the Consolidated Balance Sheets.

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 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, 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.

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.

For Continuing Operations, the total decrease to operating income for adjustments to non-income tax contingencies and indemnification assets was $ 13,613 , $ 5,619 , and $ 6,381 for the years ended December 31, 2021, 2020 and 2019, respectively.

In addition, as of December 31, 2021 and 2020, Laureate has recorded cumulative liabilities for income tax contingencies of $ 91,585 and $ 40,668 , respectively, of which $ 11,752 was classified as held for sale as of December 31, 2020.

As of December 31, 2021 and 2020, indemnification assets primarily related to acquisition contingencies were $ 82 and $ 55,940 , respectively, of which $ 40,877 was classified as held for sale as of December 31, 2020.

These indemnification assets primarily cover contingencies for income taxes and taxes other-than-income taxes.

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.

In most cases, Laureate has received indemnifications from the former owners and/or noncontrolling interest holders of the acquired businesses for contingencies, and therefore, we do not believe we will sustain an economic loss even if we are required to pay these additional amounts.

In cases where we are not indemnified, the unrecorded contingencies are not individually material and are primarily in Brazil.

In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies in Brazil could be up to approximately $ 49,000 if the outcomes were unfavorable in all cases.

The majority of the indemnification assets at December 31, 2020 related to our operations in Brazil, which were sold on May 28, 2021.

We have identified certain contingencies 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.

In most cases, Laureate has received indemnifications from the former owners of the acquired businesses for contingencies, and therefore, we do not believe we will sustain an economic loss even if we are required to pay these additional amounts.

In cases where we are not indemnified, the unrecorded contingencies are not material.

Other Loss Contingencies

2 unchanged sentences

As of December 31, 2021 and 2020, approximately $ 7,200 and $ 8,300 , respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

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.

Material Guarantees – Other

Laureate acquired the remaining 49 % ownership interest in UAM Brazil in April 2013.

As part of the agreement to purchase the 49% ownership interest, Laureate pledged 49 % of its total shares in UAM Brazil as a guarantee of our payment obligations under the purchase agreement.

In the event that we default on any payment, the agreement provides for a forfeiture of the pledged shares.

In connection with the purchase of FMU on September 12, 2014, Laureate pledged its acquired shares to third-party lenders as a guarantee of our payment obligations under the loans that financed a portion of the purchase price.

The shares are pledged until full payment of the loans, which mature in April 2021.

In connection with a loan agreement entered into by a Laureate subsidiary in Peru, all of the shares of UPN Peru, one of our universities, were pledged to the third-party lender as a guarantee of the payment obligations under the loan.

Standby Letters of Credit, Surety Bonds and Other Commitments

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, 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.

In connection with a loan agreement entered into by a Laureate subsidiary in Peru, all of the shares of Universidad Privada del Norte, one of our universities, were pledged to the third-party lender as a guarantee of the payment obligations under the loan.

During the first quarter of 2021, one of our Peruvian institutions issued a bank guarantee in order to appeal a preliminary tax assessment received related to tax audits of 2014 and 2015.

As of December 31, 2021, the amount of the guarantee was PEN 23,411 ($ 5,885 at December 31, 2021).

Standby Letters of Credit

As of December 31, 2021 and 2020, Laureate's outstanding letters of credit (LOCs) primarily consisted of the items discussed below.

As of December 31, 2020, we had approximately $ 83,600 posted as a LOC in favor of the DOE, and the restricted cash used to collateralize this LOC was held by a corporate entity.

Prior to the sale of Walden, this LOC was required to allow Walden to participate in the DOE Title IV program.

The Walden sale closed during the third quarter of 2021, and this restricted cash was released during the fourth quarter.

Spanish Tax Audits

As of December 31, 2021 and 2020, we had approximately $ 10,700 and $ 11,500 , respectively, posted as cash collateral for LOCs related to the Spanish tax audits.

This was recorded in Continuing Operations and classified as Restricted cash on our December 31, 2021 and 2020 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;

(ICE), our former 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, 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.

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.

In October 2021, the Company made a payment to the STA of approximately $ 9,300 , in order to reduce the amount of future interest that could be incurred as the appeals process continues.

Following the payment, the LOCs are no longer required and therefore are expected to be released during the first half of 2022.

Share-based Compensation and Equity

8 unchanged sentences

Total continuing and discontinued operations $ 10,172 $ 13,298 $ 12,994

The negative stock options expense in 2018 relates to the reversal of expense for a change in estimate related to certain performance-based stock option awards where the performance target became improbable of achievement, as well as the correction of an immaterial error.

2007 Stock Incentive Plan

In August 2007, Laureate's Board of Directors (the Board) approved the Laureate Education, Inc.

In 2007, Laureate's Board of Directors (the Board) approved the Laureate Education, Inc.

2007 Stock Incentive Plan (2007 Plan).

6 unchanged sentences

As of December 31, 2021, 2020 and 2019, all outstanding awards that were granted under the 2007 Plan are fully vested.

The 2007 Plan expired in 2017.

2013 Long-Term Incentive Plan

3 unchanged sentences

No awards have been made under the 2007 Plan since the 2013 Plan has been effective.

Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, unrestricted common stock or restricted stock (collectively, ‘‘stock awards’’), unrestricted stock units or restricted stock units, and other stock-based awards, to eligible individuals on the terms and subject to the conditions set forth in the 2013 Plan.

As of the effective date, the total number of shares of common stock issuable under the 2013 Plan were 7,521 , which is equal to the sum of (i) 7,074 shares plus (ii) 447 shares of common stock that were still available for issuance under Laureate’s 2007 Plan.

Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, unrestricted common stock or restricted stock, unrestricted stock units or restricted stock units, and other stock-based awards, to eligible individuals on the terms and subject to the conditions set forth in the 2013 Plan.

As of the effective date in June 2013, the total number of shares of common stock issuable under the 2013 Plan were 7,521 .

In September 2015, the Board and Shareholders approved an amendment to increase the total number of shares of common stock issuable under the 2013 Plan by 1,219 , and in December 2016, the Board and Shareholders approved an amendment to increase the total number of shares of common stock issuable under the 2013 Plan by 3,884 .

4 unchanged sentences

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.

6 unchanged sentences

Upon consummation of the change in control and an employee’s “qualifying termination” (as defined in the employee's award agreement):

(a) those time-based stock options and stock appreciation rights that would have vested and become exercisable on or prior to the third anniversary of the effective time of change in control would become fully vested and immediately exercisable;

(a) those time-based stock options and stock

appreciation rights that would have vested and become exercisable on or prior to the third anniversary of the effective time of change in control would become fully vested and immediately exercisable;

(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;

9 unchanged sentences

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.

The Performance Options granted under the 2013 Plan are eligible for vesting based on achieving annual pre-determined Equity Value performance targets or Adjusted EBITDA targets, as defined in the plan, and the continued service of the employee.

There were no stock options granted in 2021 and 2020.

All 698 of the options granted in 2019 were Time Options.

The Performance Options previously granted under the 2013 Plan are eligible for vesting based on achieving annual pre-determined Equity Value performance targets or Adjusted EBITDA targets, as defined in the plan, and the continued service of the employee.

Some of the performance-based awards include a catch-up provision, allowing the grantee to vest in any year in which a target is missed if a following year's target is achieved, as long as the following year is within eight years from the grant date.

3 unchanged sentences

We assess the probability of each option tranche vesting throughout the life of each grant.

As of December 31, 2021, all outstanding awards that were granted under the 2013 Plan are fully vested.

Amendment to 2013 Long-Term Incentive Plan

On June 19, 2017, the Board approved, subject to stockholder approval, an amendment and restatement of the 2013 Plan.

Among other things, the amendment (i) increases the number of shares of Class A common stock that may be issued pursuant to awards under the 2013 Plan to 14,714 ;

Among other things, the amendment (i) increases the number of shares of common stock that may be issued pursuant to awards under the 2013 Plan to 14,714 ;

(ii) adds performance metrics, the ability to grant cash awards, and annual limits on grants, intended to qualify awards as performance-based awards that are not subject to certain limits on tax deductibility of compensation payable to certain executives;

30 unchanged sentences

39.38 %- 53.80 %

39.03 % - 53.80 %

Year Ended December 31, 2020

9 unchanged sentences

39.03 % - 53.80 %

517 1.44 517 1.44 0.60 % - 3.03 %

36.93 % - 53.80 %

Year Ended December 31, 2019

12 unchanged sentences

* The expected dividend yield is zero for all options in all years.

The weighted-average estimated fair value of stock options granted was $ 0.00 , $ 6.05 and $ 7.67 per share for the years ended December 31, 2020, 2019 and 2018, respectively.

The weighted-average estimated fair value of stock options granted during 2019 was $ 6.05 per share.

As noted above, no stock options were granted in 2020 and 2021.

As of December 31, 2021, Laureate had $ 0 of unrecognized share-based compensation costs related to stock options outstanding.

Of the total unrecognized cost, $ 821 relates to Time Options and $ 0 relates to Performance Options.

The unrecognized Time Options expense is expected to be recognized over a weighted-average expense period of 0.1 years.

Non-Vested Restricted Stock and Restricted Stock Units

7 unchanged sentences

Non-vested at December 31 691 14.82 1,000 15.81 1,251 14.69

Restricted stock units granted under the 2013 Plan consist of time-based restricted stock units (RSU), performance-based restricted stock units (PSU) and market condition-based restricted stock units with various vesting periods over the next three to five years .

Restricted stock units granted under the 2013 Plan consist of time-based restricted stock units (RSU) and performance-based restricted stock units (PSU) with various vesting periods over the next three to five years .

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 vesting percentage for those PSUs is based on LEI’s attainment of a performance level:

threshold, target, maximum or a percentage between the “Threshold” and “Target;

Maximum” which is determined by linear interpolation, provided that continued employment is required through the date the attainment of target is approved by the Compensation Committee.

The PSUs granted from 2013 to February 2016 include a catch-up provision, allowing the grantee to vest in any year in which a target is missed if a following year's target is obtained as long as the following year is within eight years from the grant date.

During the fourth quarter of 2017, Laureate granted a small number of restricted stock units where vesting is based on the fulfillment of both a service condition and the achievement of a Laureate stock price hurdle during the performance period, which is considered to be a market condition.

The vesting percentage for PSUs is based on Laureate's attainment of a performance target or targets, provided that continued employment is required through the date the attainment of target is approved by the Compensation Committee.

The fair value of the non-vested restricted stock awards in the table above is measured using the fair value of Laureate’s common stock on the date of grant or the most recent modification date, whichever is later.

As of December 31, 2021, unrecognized share-based compensation expense related to non-vested restricted stock and restricted stock unit awards was $ 5,471 .

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 1.0 year.

Of the total unrecognized cost, $ 4,492 relates to time-based RSUs and $ 979 relates to PSUs.

This unrecognized expense for time-based restricted stock and restricted stock units will be recognized over a weighted-average expense period of 1.1 years.

Other Stockholders' Equity Transactions

Series A Convertible Redeemable Preferred Stock

In December 2016 and January 2017, the Company issued an aggregate of 400 shares of convertible redeemable preferred stock (the Series A Preferred Stock) for total gross proceeds of $ 400,000 .

The Series A Preferred Stock included a Beneficial Conversion Feature (BCF) that was contingent on a qualified IPO (as defined in the Certificate of Designations governing the terms of the Series A Preferred Stock), which was consummated on February 6, 2017.

Accordingly, during the first quarter of 2017, the Company recorded the BCF at its estimated fair value as a reduction of the carrying value of the Series A Preferred Stock and an increase to Additional paid-in capital.

The accretion of this BCF and dividends on the Series A Preferred Stock reduced net income available to common stockholders in the calculation of earnings per share, as shown in Note 15, Earnings (Loss) Per Share.

The total BCF of $ 265,368 was accreted using a constant yield approach over a one-year period.

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.

This conversion was treated as a redemption for accounting purposes and resulted in an increase in Additional paid-in capital upon reclassification of the carrying value of the Series A Preferred Stock.

A portion of the fair value of the shares of Class A common stock issued to redeem the Series A Preferred Stock was allocated to the BCF contained in the Series A Preferred Stock.

The difference between the remaining fair value of the shares of Class A common stock issued, the carrying value of the Series A Preferred Stock and fair value of the embedded derivatives resulted in a gain of 74,110 , which was recorded as Additional paid-in capital but included in income available to common stockholders in the calculation of earnings per share.

Secondary Offerings

In November 2018, Wengen, our controlling stockholder, converted 14,088 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 the 14,088 shares of Class A common stock to the public at a price of $ 14.00 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.

In the secondary offering, KKR Capital Markets, an affiliate of KKR who in turn is an affiliate of Wengen, bought approximately 757 shares of Class A common stock.

In June 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 10,955 shares of Class A common stock in a secondary offering at a price of $ 15.3032 per share.

2 unchanged sentences

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

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.

Effective October 29, 2021, each share of Company Class A common stock and each share of Company Class B common stock automatically converted into one share of common stock of the Company.

Following the conversion, the Company has only one class of common stock outstanding.

Stock Repurchase Programs

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 common stock.

In early October 2019, the Company's stock repurchases reached the authorized limit of $ 150,000 .

On October 14, 2019, the Company's board of directors approved the increase of its existing authorization to repurchase shares of the Company's Class A common stock by $ 150,000 for a total authorization (including the previously authorized repurchases) of up to $ 300,000 of the Company's Class A common stock.

On October 14, 2019, the Company's Board of Directors approved the increase of its existing authorization to repurchase shares of the Company's common stock by $ 150,000 for a total authorization (including the previously authorized repurchases) of up to $ 300,000 of the Company's common stock.

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 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.

In January 2020, the Company repurchased 1,619 shares of its outstanding 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 common stock.

On April 30, 2021, the Company’s Board of Directors approved an increase of the above authorization to repurchase shares of the Company’s common stock by $ 200,000 .

On December 14, 2021, the Company’s Board of Directors approved an increase of the authorization to repurchase shares of the Company’s common stock by $ 100,000 , for a total authorization (including the above authorized repurchases) of up to $ 600,000 of the Company’s 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.

1 unchanged sentence

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.

Special Cash Distributions

On September 15, 2021, the Board of Directors of the Company approved a plan of partial liquidation (the Partial Liquidation Plan) in connection with the sale of Walden e-Learning LLC.

Pursuant to the Partial Liquidation Plan, the gross proceeds from the sale of the Walden Group, less expenses related to the sale, are to be distributed to the Company’s stockholders before the end of calendar year 2022.

Notwithstanding the adoption of the Partial Liquidation Plan, the Company expects to continue operating as a going concern and a publicly traded company.

On September 15, 2021 after the adoption of the Partial Liquidation Plan, the Board approved the payment of a special cash distribution (the Distribution) pursuant to the Partial Liquidation Plan equal to $ 7.01 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on October 6, 2021.

The Distribution was paid on October 29, 2021, based on the number of shares outstanding on October 6, 2021.

The aggregate amount of the Distribution was approximately $ 1,270,000 .

Nasdaq determined that the Company’s common stock would trade with "due bills" representing an assignment of the right to receive the Distribution during the period from October 5, 2021 through and including October 29, 2021 (the Due Bill Period).

Stockholders who sold their shares during the Due Bill Period were not entitled to receive the Distribution.

The Company’s shares began trading ex-dividend on November 1, 2021, the first business day after the payment date.

Gross proceeds from the sale included $ 74,000 held in escrow and approximately $ 83,600 of restricted cash related to collateralized regulatory obligations associated with activities of the divested business.

Under the terms of the Partial Liquidation Plan, upon release of escrow amounts and restricted cash, the Company is required to distribute to stockholders any net proceeds from such amounts in the form of special distributions before December 31, 2022.

The restricted cash was released during the fourth quarter of 2021.

Accordingly, on December 3, 2021, the Company announced that its Board of Directors approved, pursuant to the previously announced Partial Liquidation Plan, the payment of a special cash distribution (the Second Distribution) equal to $ 0.58 per each share of the Company's common stock, par value $ 0.004 per share, to each holder of record on December 14, 2021.

The Second Distribution was paid on December 28, 2021 and totaled approximately $ 105,000 , based on the number of shares outstanding on December 14, 2021.

The amount of the Second Distribution included the restricted cash that had been released, in addition to other net proceeds from the sale of Walden e-Learning LLC that had not yet been distributed to the Company’s stockholders.

Gross proceeds remaining to be received from the sale include up to $ 74,000 held in escrow.

In accordance with the Partial Liquidation Plan, upon release of escrow amounts, the Company intends to distribute to stockholders such remaining net proceeds in the form of a final special distribution before the end of calendar year 2022.

In connection with the Distribution, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans.

These required equitable adjustments were effective on November 1, 2021 and were recorded in the consolidated financial statements during the fourth quarter of 2021.

The exercise prices of the Company’s options were reduced by $ 7.01 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 7.01 per unvested stock unit, payable when such unit vests.

In connection with the Second Distribution, the Board of Directors also approved the required adjustments under the Company’s equity award compensation plans.

These required equitable adjustments also were effective during the fourth quarter of 2021 and were recorded in the consolidated financial statements.

The exercise prices of the Company’s options were reduced by $ 0.58 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 0.58 per unvested stock unit, payable when such unit vests.

As of December 31, 2021, the Company had recorded a payable of $ 6,932 related to the equitable adjustments for the equity award compensation plans.

Derivative Instruments

1 unchanged sentence

We may seek to control a portion of these risks through a risk management program that includes the use of derivative instruments.

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.

Prior to their repayment, Laureate’s senior long-term debt arrangements were primarily in USD.

Our ability to make debt payments was subject to fluctuations in the value of the USD against foreign currencies, since a majority of our operating cash used to make these payments was 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.

30 unchanged sentences

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 for the year ended December 31, 2018.

The cash received at settlement from the swap counterparties was $ 14,117 .

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.

16 unchanged sentences

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.

The purpose of these swaps was to mitigate the risk of foreign currency exposure on the expected proceeds from the sale.

Two of the swaps were deal contingent, with the settlement date occurring on the second business day following the completion of the sale.

On the settlement date, Laureate would 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.

The remaining four swaps were originally put/call options with a maturity date of May 13, 2021, where Laureate could 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 included deferred premium payments from Laureate to the counterparties of $ 18,294 , which were paid in full in January 2021.

During the second quarter of 2021, all four of these swaps were converted to be deal contingent, with the settlement date occurring on the second business day following the aforementioned sale.

This conversion resulted in cash proceeds to Laureate of $ 1,663 .

On the settlement date, Laureate would deliver the combined notional amount of BRL 1,875,000 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.

As discussed in Note 5, Dispositions, the sale of Laureate’s Brazilian operations closed on May 28, 2021.

Per the terms of the agreements, the swaps were settled on June 2, 2021, which resulted in a realized loss and net settlement amount paid to the counterparties at closing of $ 33,710 .

As of December 31, 2020, these swaps were in a liability position and 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.

These swaps were not designated as hedges for accounting purposes.

AUD to USD Foreign Currency Swaps

3 unchanged sentences

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 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 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.

1 unchanged sentence

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 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 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.

8 unchanged sentences

These swaps were not designated as hedges for accounting purposes.

In addition to the swaps above, in order to continue to mitigate the risk of foreign currency exposure on the expected sale proceeds for Spain and Portugal in advance of the May 31, 2019 sale closing date, in April 2019, Laureate also entered into seven EUR-to-USD swap agreements with a combined notional amount of EUR 375,000 .

seven EUR-to-USD swap agreements with a combined notional amount of EUR 375,000 .

On the maturity date of May 15, 2019, Laureate paid the EUR notional amount and received a combined total of USD $ 423,003 at a rate of exchange of 1.128007 , resulting in a gain of $ 1,644 .

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 .

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.

7 unchanged sentences

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.

This payment is included in Payments for 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.

2 unchanged sentences

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 for the year ended December 31, 2019.

The realized loss is included in Payments for 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.

2 unchanged sentences

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 for the year ended December 31, 2019.

The realized gain is included in Payments for 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.

EUR to USD Foreign Currency Swaps - Cyprus and Italy

In December 2017, the Company entered into a total of six EUR to USD forward exchange swap agreements in connection with the sale of its institutions in Cyprus and Italy.

The purpose of the swaps was to mitigate the risk of foreign currency exposure on the sale proceeds.

The swaps had an aggregate notional amount of EUR 200,000 and matured on January 16, 2018, resulting in a total realized loss on derivatives of $ 9,960 , which was 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, 2018.

The swaps were not designated as hedges for accounting purposes.

Derivatives related to Series A Preferred Stock Offering

In December 2016 and January 2017, the Company issued shares of convertible redeemable preferred stock (the Series A Preferred Stock) and identified several embedded derivatives related to certain contingent redemption features of the Series A Preferred Stock.

These derivatives were not designated as hedges for accounting purposes and therefore the changes in estimated fair value were recognized as a component of earnings.

The Series A Preferred Stock was converted into Class A common stock on April 23, 2018.

The estimated fair value of these derivatives at the conversion date was approximately $ 140,300 ;

accordingly, the derivative assets were recorded at their estimated fair values through a corresponding gain on derivatives, a component of non-operating income.

The increase in fair value of the derivatives can be attributed to the use of the Monte Carlo Simulation Method to value the derivatives prior to the April 23, 2018 conversion date, when the probability of conversion increased to 100 % and the valuation inputs became definitive.

In connection with the conversion of the Series A Preferred Stock into Class A common stock, the carrying value of the derivative assets was reclassified into equity in April 2018.

Components of the reported Gain (loss) on derivatives not designated as hedging instruments in the Consolidated Statements of Operations were as follows:

For the years ended December 31, 2021 2020 2019

Unrealized (Loss) Gain

Contingent redemption features - Series A Preferred $ — $ — $ ( 42,140 )

Cross currency and interest rate swaps

Total unrealized (loss) gain ( 25,354 ) 4,022 ( 41,883 )

Unrealized gain (loss) $ 25,824 $ ( 25,354 ) $ 4,022

Realized (loss) gain ( 50,341 ) ( 626 ) 4,278

Contingent redemption features - Series A Preferred — — 140,320

Cross currency and interest rate swaps ( 626 ) 4,278 ( 9,961 )

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 )

(Loss) gain on derivatives, net $ ( 24,517 ) $ ( 25,980 ) $ 8,300

2 unchanged sentences

The amount of our credit risk exposure is equal to the fair value of the derivative when any of the derivatives are in a net gain position.

As of December 31, 2020, the estimated fair value of derivatives in a gain position was $ 0 .

Laureate has limited its credit risk by only entering into derivative transactions with highly rated major financial institutions.

Laureate limits its credit risk by only entering into derivative transactions with highly rated major financial institutions.

We have not entered into collateral agreements with our derivatives' counterparties.

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.

As of December 31, 2020, we had not breached any default provisions and had not posted any collateral related to these agreements.

If we had breached any of these provisions, we could have been required to settle the obligations under the derivative agreements for an amount that, at a maximum, we believe would approximate their estimated fair value of $ 25,824 as of December 31, 2020.

As of December 31, 2021 and December 31, 2020, we did not hold any derivatives in a net gain position, and thus had no credit risk.

Laureate's agreements with its derivative counterparties contain a provision under which the Company 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.

As of December 31, 2021, the Company did not have any outstanding derivative agreements.

Significant components of the Income tax (expense) benefit on earnings from Continuing Operations were as follows:

7 unchanged sentences

Total deferred 51,387 196,338 28,887

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.

Total income tax (expense) benefit $ ( 145,573 ) $ 130,069 $ ( 31,041 )

For the years ended December 31, 2021, 2020 and 2019, foreign income (loss) from Continuing Operations before income taxes was $ 80,864 , $( 250,910 ), and $ 2,358 , respectively.

For the years ended December 31, 2021, 2020 and 2019, domestic loss from Continuing Operations before income taxes was $( 218,371 ), $( 199,928 ), and $( 122,019 ), respectively.

3 unchanged sentences

Net operating loss and tax credits carryforwards $ 246,405 $ 410,456

Operating lease asset 135,365 140,500

Depreciation 45,702 45,717

Interest 25,029 32,282

Deferred compensation 23,219 16,997

Deferred revenue 11,432 10,913

Nondeductible reserves 9,470 24,835

Allowance for doubtful accounts 8,437 13,552

Deferred compensation 16,997 20,551

Unrealized loss — 3,128

Nondeductible reserves 24,835 27,062

Interest 32,282 8,630

Operating lease asset 140,500 158,189

Total deferred tax assets 505,059 698,380

Deferred tax liabilities:

Operating lease liability 122,728 127,131

Investment in subsidiaries 74,310 71,183

Amortization of intangible assets 41,776 133,091

Operating lease liability 127,131 148,436

Deferred gain on Walden 14,652 —

Unrealized Gain 2,559 —

Other — 1,918

2 unchanged sentences

Valuation allowance for deferred tax assets ( 283,945 ) ( 320,858 )

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.

Net deferred tax (liabilities) assets $ ( 34,911 ) $ 44,199

During the first quarter of 2021, the Company recorded an out-of-period adjustment of approximately $ 12,400 for income tax expense that should have been recorded during 2016 through 2020.

The Company concluded that the adjustment was immaterial to the consolidated financial statements for both the current and prior periods.

Laureate does not provide deferred taxes on the portion of its unremitted earnings attributable to international companies that have been considered to be reinvested indefinitely.

As of December 31, 2021, undistributed earnings from foreign subsidiaries totaled $ 679,813 .

Except as discussed below regarding Peru, all historical earnings are permanently reinvested.

A portion of the historical earnings of Peru are no longer needed to be retained in that market.

The Company has recorded a deferred tax liability of $ 100 on $ 2,000 USD of earnings to account for the withholding taxes on this eventual distribution.

The Company has recorded a deferred tax liability of $ 100 on $ 2,000 of earnings to account for the withholding taxes on a portion of unremitted earnings associated with one of its Peruvian subsidiaries.

If the Company were to remove its assertion and distribute the remaining unremitted earnings, we would record approximately $ 20,000 in additional deferred tax liabilities.

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 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 historical earnings of our foreign subsidiaries are remitted to the United States.

The Company has $ 53,700 of deferred tax asset for US state net operating loss carryforwards that expire from 2023 to 2042 and $ 2,400 of deferred tax asset for US state net operating loss carryforwards that do not expire.

7 unchanged sentences

Balance at beginning of period $ 320,858 $ 324,119 $ 562,944

(Deductions) additions from tax expense from continuing operations ( 19,879 ) 2,427 ( 61,373 )

Additions (deductions) from tax expense from continuing operations 9,115 ( 19,879 ) 2,427

Charges to other accounts

8 unchanged sentences

Netherlands intellectual property restructuring ( 53,643 ) ( 32,425 ) —

State income tax benefit, net of federal tax effect 36,343 5,783 4,445

State income tax (expense) benefit, net of federal tax effect ( 36,782 ) 36,343 5,783

Tax effect of foreign income taxed at lower rate ( 16,665 ) ( 5,534 ) ( 25,228 )

4 unchanged sentences

Other ( 476 ) ( 163 ) 2,971

Total income tax benefit (expense) $ 130,069 $ ( 31,041 ) $ ( 71,196 )

Total income tax (expense) benefit $ ( 145,573 ) $ 130,069 $ ( 31,041 )

The reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:

5 unchanged sentences

Decreases for unrecognized tax benefits as a result of a lapse in the statute of limitations ( 3,523 ) ( 1,836 ) ( 1,752 )

Settlements for tax positions related to prior years — — ( 27,573 )

End of the period $ 257,587 $ 385,283 $ 56,395

8 unchanged sentences

United States federal and state statutes are generally open back to 2018;

however, the Internal Revenue Service (the IRS) has the ability to challenge 2005 through 2016 net operating loss carryforwards.

however, the Internal Revenue Service (the IRS) has the ability to challenge 2005 through 2017 net operating loss

carryforwards.

Except as discussed below, statutes of other major jurisdictions are open back to 2015 for Spain and 2011 for Mexico.

Spanish Tax Audit

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.

On June 29, 2012, the STA issued a final assessment to ICE, our Spanish holding company, for EUR 11,051 ($ 13,500 at December 31, 2020), including interest, for the 2006 through 2007 period.

On June 29, 2012, the STA issued a final assessment to ICE, our former Spanish holding company, for EUR 11,051 ($ 13,500 at December 31, 2021), including interest, for the 2006 through 2007 period.

Laureate appealed this final assessment related to the 2006 through 2007 period and issued a cash-collateralized letter of credit in July 2012, in order to continue the appeal process.

12 unchanged sentences

In February 2019, the Company appealed this assessment to the Highest Administrative Court.

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, 2021).

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.

ICE has appealed the referred assessment before the Administrative Central Court, and, in order to do so, ICE posted a cash-collateralized letter of credit of approximately EUR 4,300 ($ 5,300 at December 31, 2021).

As of December 31, 2021, the Company has posted a total cash-collateralized letter of credit of approximately $ 10,700 .

On July 22, 2021, the Spanish National Court issued a decision on the Company’s appeal regarding the STA audits of ICE for the fiscal years 2006-2007 and 2008-2010.

Based on our understanding of the decision, the matter is not yet resolved in favor of either the Company or the STA.

During the third quarter of 2021, both the Company and the STA appealed the Spanish National Court decision.

The Spanish Supreme Court to date has not yet ruled on whether or not the appeals will be considered.

During the fourth quarter of 2021, the Company made payments to the STA totaling approximately $ 9,300 , for the final assessments that were issued in October 2018 and January 2020.

Following these payments, the Company expects that the related cash-collateralized letters of credit will be released during the first half of 2022.

The Company does not believe that this matter will have a material effect on its consolidated financial statements.

Other Matters

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.

In the year ended December 31, 2021, the Company recorded tax expense of approximately $ 35,700 for changes in estimate associated with provision-to-return adjustments for tax years 2018 through 2020, primarily related to the final regulations that were released by the U.S.

Treasury Department in July 2020 for the high-tax exception to global intangible low-taxed income.

During the year ended December 31, 2021, Laureate recognized income tax expense of $ 53,643 related to additional income tax reserves recorded associated with the intellectual property in the Netherlands.

Earnings (Loss) Per Share

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.

Effective October 29, 2021, each share of the Company's Class A common stock and each share of the Company's Class B common stock automatically converted into one share of common stock of the Company.

Following the conversion, the Company has only one class of common stock outstanding.

Prior to that, our common stock had a dual class structure, consisting of Class A common stock and Class B common stock.

Other than voting rights, the Class B common stock had the same rights as the Class A common stock and therefore both were treated as the same class of stock for purposes of the earnings per share calculation.

Laureate computes basic earnings per share (EPS) by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period.

5 unchanged sentences

Loss from continuing operations $ ( 283,080 ) $ ( 320,598 ) $ ( 150,483 )

Net loss (income) attributable to noncontrolling interests 17 ( 98 ) ( 141 )

Net (income) loss attributable to noncontrolling interests ( 11,839 ) 17 ( 98 )

Loss from continuing operations attributable to Laureate Education, Inc.

1 unchanged sentence

Accretion of redemption value of redeemable noncontrolling interests and equity ( 88 ) 149 ( 208 )

Adjusted for:

accretion related to noncontrolling interests and equity redeemable at fair value — — ( 559 )

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

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

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:

accretion of Series A Preferred Stock — — 61,974

Adjusted for:

gain upon conversion of Series A Preferred Stock — — ( 74,110 )

Net loss from continuing operations available to common stockholders for diluted earnings per share $ ( 320,432 ) $ ( 150,789 ) $ ( 192,309 )

Net loss from continuing operations available to common stockholders for basic and diluted earnings per share ( 295,007 ) ( 320,432 ) ( 150,789 )

Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:

(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 )

Net (loss) income from discontinued operations for basic and diluted earnings per share $ ( 292,750 ) $ 1,089,065 $ 561,525

Income (loss) from discontinued operations, net of tax 486,865 ( 298,104 ) 1,088,147

Loss attributable to noncontrolling interests 500 5,354 918

Net income (loss) from discontinued operations for basic and diluted earnings per share $ 487,365 $ ( 292,750 ) $ 1,089,065

Denominator used in basic and diluted earnings (loss) per common share:

Basic and diluted weighted average shares outstanding 189,692 209,710 221,928

Basic earnings (loss) per share:

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:

Basic and diluted earnings (loss) per share:

Loss from continuing operations $ ( 1.56 ) $ ( 1.53 ) $ ( 0.68 )

(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;

accordingly, the effects of the accretion and the gain upon conversion of the Series A Preferred Stock were removed from net income available to common stockholders for diluted earnings per share.

Income (loss) from discontinued operations 2.57 ( 1.40 ) 4.91

Basic and diluted earnings (loss) per share $ 1.01 $ ( 2.93 ) $ 4.23

The following table summarizes the number of stock options, shares of restricted stock and restricted stock units (RSUs) that were excluded from the diluted EPS calculations because the effect would have been antidilutive:

3 unchanged sentences

Related Party Transactions

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 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 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.

Payment of Peruvian Capital Gains Tax

As discussed further in Note 17, Legal and Regulatory Matters, holders who sell, exchange or otherwise dispose of Company shares may be subject to a Peruvian nonresident capital gains tax (the Peruvian Tax).

During the fourth quarter of 2021, certain investors in Wengen elected to have their interests in Wengen redeemed in exchange for delivery by Wengen to such investors of the number of shares of Company common stock corresponding to the Wengen interests so redeemed.

As a result of this transfer, Wengen paid Peruvian Tax of approximately PEN 95,062 (approximately $ 23,800 at the date of payment).

For administrative convenience, Wengen advanced to Laureate the amount needed to pay the Peruvian Tax and Laureate paid the Peruvian Tax on Wengen's behalf.

Sterling Capital Partners (Sterling)

As discussed in Note 5, Dispositions, at the time of the transaction related to the sale of our former Costa Rica operations, the buyer of our Costa Rica operations wa s controlled by certain affiliates of Sterling, an entity that previously had the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement.

Benefit Plans

9 unchanged sentences

Deferred Compensation Plan

Laureate maintains a deferred compensation plan to provide certain executive employees and members of our Board of Directors with the opportunity to defer their salaries, bonuses, and Board of Directors retainers and fees in order to accumulate funds for retirement on a pre-tax basis.

Laureate maintained a deferred compensation plan that provided certain executive employees and members of our Board of Directors with the opportunity to defer their salaries, bonuses, and Board of Directors retainers and fees in order to accumulate funds for retirement on a pre-tax basis.

Participants are 100 % vested in their respective deferrals and the earnings thereon.

Laureate does not make contributions to the plan or guarantee returns on the investments.

Laureate did not make contributions to the plan or guarantee returns on the investments.

Although plan investments and participant deferrals are kept in a separate trust account, the assets remain Laureate’s property and are subject to claims of general creditors.

During the first quarter of 2021, the Company’s Board of Directors approved the termination of this deferred compensation plan, with such termination effective April 1, 2021, and the participants will receive a distribution payout of their account balances in April 2022.

The plan assets are recorded at fair value with the earnings (losses) on those assets recorded in Other income (expense).

The plan liabilities are recorded at the contractual value, with the changes in value recorded in operating expenses.

As of December 31, 2020 and 2019, plan assets included in Other assets in our Consolidated Balance Sheets were $ 3,055 and $ 4,505 , respectively, and the total plan liabilities reported in our Consolidated Balance Sheets were $ 6,192 and $ 6,835 , respectively.

As of December 31, 2021 and 2020, plan assets included in Other assets in our Consolidated Balance Sheets were $ 1,924 and $ 3,055 , respectively, and the plan liabilities reported in our Consolidated Balance Sheets were $ 5,104 and $ 6,192 , respectively.

The Company will fund the difference between the assets and the liabilities with operating cash flows.

Supplemental Employment Retention Agreement (SERA)

In November 2007, Laureate established a SERA for one of its then-executive officers.

Because Laureate achieved certain Pro-rata EBITDA targets, as defined in the SERA, from 2007 to 2011 and this officer remained employed through December 31, 2012, this individual received an annual SERA payment of $ 1,500 .

In November 2007, Laureate established a SERA for one of its then-executive officers, under which this individual received an annual SERA payment of $ 1,500 .

The SERA provided annuity payments to the former executive over the course of his lifetime, and, following the former executive's death in 2018, an annual payment of $ 1,500 will be made to his spouse for the remainder of her life.

10 unchanged sentences

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

We operate 10 post-secondary education institutions in Brazil.

The responsibility of the federal government in regulating, monitoring and evaluating higher education institutions and undergraduate programs is exercised by the Brazilian Ministry of Education (the MEC), along with a number of related federal agencies and related offices.

The MEC is the highest authority of the higher education system in Brazil and has the power to issue implementing rules, (regulations, notices, and technical advisories governing the conduct of higher education), as well as to regulate and monitor the higher education segment, including aspects like adherence by higher education institutions (HEIs) to the rules for federal education programs like Prouni and the Fundo de Financiamento Estudantil (the FIES program, or FIES), through one or more of which all of our institutions enroll students.

Additionally, Brazilian law requires that almost all change-of-control transactions by Laureate receive the prior approval of the Brazilian antitrust authority, the Conselho Administrativo de Defesa Economico (CADE).

As noted, Laureate’s institutions in Brazil participate in the FIES program, which is a federal program established to provide financing to students enrolled in courses in private institutions of higher education that have achieved a minimum satisfactory evaluation according to the National Higher Education Evaluation System (SINAES) and receive a grade of 3 or higher out of 5 on the National Examination of Student Performance (ENADE).

Under this basic structure, FIES targets both of the government’s education policy goals:

increased access and improved academic quality outcomes.

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.

Prouni provides private HEIs with an exemption from certain federal taxes in exchange for granting partial and full scholarships to low-income students enrolled in traditional and technology undergraduate programs.

HEIs may join Prouni by signing a term of membership valid for ten years and renewable for the same period.

This term of membership shall include the number of scholarships to be offered in each program, unit and class, and a percentage of scholarships for degree programs to be given to indigenous and Afro-Brazilians.

To join Prouni, an educational institution must maintain a certain relationship between the number of scholarships granted and the number of regular paying students.

The relationship between the number of scholarships and regular paying students is tested annually.

If this relationship is not observed during a given academic year due to the departure of students, the institution must adjust the number of scholarships in a proportional manner the following academic year.

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.

Administrative activities and limited face-to-face educational activities have resumed at all campuses.

Education was determined to be an essential activity for the country and thus no longer restrained by the country’s color-coded sanitary alert system.

Peruvian Regulation

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 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, 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.

Peru’s national sanitary emergency has been extended until August 2, 2022;

however, curfews have been lifted with the exception of several regions in which Laureate does not operate.

In February 2022, the government approved several recommendations to begin presential classes at higher education institutions.

A plan is required to be presented to the Authorities by the end of March 2022.

Peruvian Nonresident Capital Gains Tax

Stockholders who sell, exchange, or otherwise dispose of Company shares may be subject to Peruvian tax at a rate of 30% on their gain realized in such transaction determined under certain Peruvian valuation rules regardless of whether the transaction is taxable for non-Peruvian purposes.

In determining the amount of such gain subject to such tax, the gain is first multiplied by the percentage of the Company’s value that is represented by its Peruvian business determined under certain Peruvian valuation rules (the “Peru Ratio”).

This tax applies if the value of stock determined under certain Peruvian valuation rules (calculated in PEN) transferred multiplied by the Peru Ratio exceeds approximately $44,000 applying the PEN/USD exchange rate of December 31, 2021 (the “Threshold”).

The Threshold is calculated in PEN and changes with currency exchange rates.

For purposes of determining whether the Threshold has been exceeded by any holder, all transfers made by such holder over any 12-month period are aggregated.

For purposes of determining whether any tax is owed, the holder must have their basis “certified” by the Peruvian tax authorities in advance of such transaction.

If the holder exceeds the Threshold and does not obtain a tax basis certificate before the transaction, the holder’s tax basis in the shares will be considered zero for Peruvian tax purposes.

In the event that a direct or indirect sale, exchange, or other disposition of Company shares occurs and any resulting Peruvian tax is not paid, the Company’s Peruvian subsidiaries may be jointly and severally liable for such tax.

Joint and several liability may be imposed if during any of the 12 months preceding the transaction, inter alia , the transferor of Company shares held an indirect or direct interest of more than 10% of the Company’s outstanding shares.

If such a transaction were to occur and the Peruvian tax authorities sought to collect the Peruvian capital gains taxes from the Company’s Peruvian subsidiaries that were not paid by such transferor, it could have a material adverse effect on our business, financial condition or results of operations.

Fair Value Measurement

13 unchanged sentences

As a result, all of our derivatives held as of December 31, 2020 were classified as Level 2 of the fair value hierarchy.

Laureate did not hold any derivatives as of December 31, 2021.

Equity securities - preferred stock investment

3 unchanged sentences

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 on the Consolidated Statement of Cash Flows.

The proceeds are included in Proceeds from sale of investment on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

As of December 31, 2021, Laureate did not hold any financial assets or liabilities that are measured at fair value on a recurring basis.

Laureate's financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 were as follows:

2 unchanged sentences

Derivative instruments $ 25,824 $ — $ 25,824 $ —

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)

The following quarterly financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods.

Earnings per share are computed independently for each of the quarters presented.

Per share amounts may not sum due to rounding.

Summarized quarterly operating data were as follows:

2020 Quarters Ended

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 )

(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.

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 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 )

Basic and diluted earnings (loss) per share $ 1.81 $ ( 3.73 ) $ ( 1.46 ) $ 0.47

2019 Quarters Ended

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

Operating income (loss) $ 57,319 $ ( 18,411 ) $ 51,975 $ ( 54,863 )

Income (loss) from continuing operations $ 61,193 $ ( 86,649 ) $ 93,924 $ ( 218,951 )

(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.

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 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

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

1 unchanged sentence

AOCI in our Consolidated Balance Sheets includes the accumulated translation adjustments arising from translation of foreign subsidiaries’ financial statements, the unrealized gains or losses on derivatives designated as effective hedges, and the accumulated net gains or losses that are not recognized as components of net periodic benefit cost for our minimum pension liability.

Laureate reports changes in AOCI in our Consolidated Statements of Stockholders’ Equity and the change in AOCI includes the removal of the cumulative translation adjustment related to subsidiaries that were sold during the period.

The components of these balances were as follows:

7 unchanged sentences

Accumulated other comprehensive loss $ ( 520,204 ) $ 946 $ ( 519,258 ) $ ( 941,986 ) $ 958 $ ( 941,028 )

Laureate reports changes in AOCI in our Consolidated Statements of Stockholders’ Equity.

See also Note 13, Derivative Instruments, for the effects of reclassifications out of AOCI into net income.

Foreign Currency Exchange of Certain Intercompany Loans

4 unchanged sentences

For the years ended December 31, 2021 2020 2019

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

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

$ 192,446 $ ( 613,331 ) $ 938,484

Decrease in equity for changes in noncontrolling interests ( 181 ) ( 2,610 ) ( 3,700 )

Change from net (loss) income attributable to Laureate Education, Inc.

Change from net income (loss) attributable to Laureate Education, Inc.

and net transfers to the noncontrolling interests $ 192,265 $ ( 615,941 ) $ 934,784

3 unchanged sentences

Cash interest payments, prior to interest income, for Continuing Operations and Discontinued Operations were $ 63,153 , $ 120,640 and $ 188,682 for the years ended December 31, 2021, 2020 and 2019, respectively.

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 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 years ended December 31, 2020 and 2019.

Net cash payments for income taxes for Continuing Operations and Discontinued Operations were $ 251,098 , $ 91,371 and $ 119,682 for the years ended December 31, 2021, 2020 and 2019, respectively.

Reconciliation of Cash and cash equivalents and Restricted cash

6 unchanged sentences

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