What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-02-24 · 73 added, 99 removed, 229 unchanged (43% of the section changed)

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Unless otherwise indicated, the information in or incorporated by reference into this Form 10-K, including our segment information, relates only to our continuing operations.

COVID-19 Update

After the novel coronavirus (“COVID-19”) outbreak was declared a pandemic in March 2020, we closed all of our physical campuses in a matter of a few short weeks, and all of our students were effectively transitioned to an online learning environment, and our staff and faculty were effectively moved to a fully remote environment.

The vast majority of our campuses have remained closed throughout this ongoing pandemic.

We believe that our institutions have a competitive advantage in online and distance learning given the investments that we have made in digital learning platforms in prior years and believe that we are well-positioned to continue to serve our students during and after the pandemic.

We have recently commenced a return to campus where safe and appropriate to do so, implementing a range of precautions, in accordance with local laws, regulations and health guidelines, to protect the health and safety of our students, faculty and staff.

Most of our universities are expecting to adopt a phased approach, prioritizing classes that require in-person technical teaching (such as in our interactive labs).

We will continue to monitor the situation and adjust based on what is most appropriate for each market.

We operate a portfolio of degree-granting higher education institutions in Mexico and Peru.

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As of December 31, 2022, a vast majority of o ur students were enrolled at traditional, campus-based institutions offering multi-year degrees, similar to leading private and public higher education institutions in developed markets such as the United States and Europe.

Due to the COVID-19 pandemic, all of our students were effectively transitioned to an online learning environment in early 2020 and remained predominantly online through the end of 2021.

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

See “—CO VID-19 Update.”

Our programs are designed with a distinct emphasis on applied, professional-oriented content for growing career fields and are focused on academic disciplines that we believe offer strong employment opportun ities and high earnings potential for our students.

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

In addition, in many of these same markets, non-traditional students, such as working

adults and distance learners, have limited options for pursuing higher education.

With strong brands and highly reputed institutions in Mexico and Peru, we believe that we are uniquely positioned to address these market opportunities.

Country Institution Enrollment at December 31, 2021 Market Segment QS Stars™ Overall University Rating Ratings/Rankings

In addition, in many of these same markets, non-traditional students, such as working adults and distance learners, have limited options for pursuing higher education.

With strong brands and highly reputed i nstitutions in Mexico and Peru, we believe that we are uniquely positioned to address these market opportunities.

Country Institution Enrollment at December 31, 2022

Market Segment QS Stars™ Overall University Rating Ratings/Rankings

Mexico Universidad del Valle de México (UVM)

103,700 Premium/ Traditional «««« • Ranked Top 10 university in Mexico

• One of seven 4-Star rated universities in Mexico by QS Stars™

• 5-Star rated by QS Stars™ in categories of Employability & Inclusiveness

Mexico Universidad Tecnológica de México (UNITEC)

119,100 Value/Teaching ««« • Largest private university in Mexico

• 5-Stars rated by QS Stars™ in categories of Teaching & Employability

• 5-Stars rated by QS Stars™ in categories of Employability & Inclusiveness

Peru Universidad Peruana de Ciencias Aplicadas (UPC)

69,000 Premium/Traditional «««« • Ranked Top 5 university in Peru

• One of only two 4-Star rated universities in Peru by QS Stars™

Peru Universidad Privada del Norte (UPN) 102,000 Value/Teaching ««« • 2 nd largest private university in Peru

• 5-Stars rated by QS Stars™ in Employability, 4-Stars in Teaching

• 5-Star rated by QS Stars™ in categories of Employability & Inclusiveness

Peru Universidad Privada del Norte (UPN) 112,100 Value/Teaching «««« • 3rd largest private university in Peru

• 5-Stars rated by QS Stars™ in categories of Employability & Inclusiveness

Peru CIBERTEC

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We focus on optimizing our operations at the country level through our in-county networks.

While the countries in which we operate currently are affected by the COVID-19 pandemic, we do not presently believe that the pandemic will materially impact our long-term strategy and initiatives.

See “—COVID-19 Update” and “—Employees and Human Capital Management—Health and Safety” for information related to the impact of the COVID-19 pandemic on our students, faculty and staff.

That said, see “Item 1A—Risk Factors—Risks Relating to Our Business—An epidemic, pandemic or other public health emergency, such as the current global coronavirus (COVID-19) outbreak and the efficacy and distribution of COVID-19 vaccines in the locations in which we operate, could have a material adverse effect on our business, financial condition, cash flows and results of operations.”

The execution of our strategy will be enabled by the following initiatives:

Our mission is to deliver affordable, high-quality education to prepare students for successful careers and lifelong achievement, while building pride, trust, and respect in our communities.

To achieve our mission, we execute a strategy enabled by the following initiatives:

Integration of Campus-Based Operations in Mexico and Peru.

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We believe that this unification will enable us to be more nimble in our day-to-day operations and will allow us to extract valuable insights from more data across our network.

Further, we believe that

integration will enable further innovation and efficiency in our academic model and operations, and allow us to expand our market share.

Further, we believe that integration will enable further innovation and efficiency in our academic model and operations, and allow us to expand our market share.

Leverage and Expand Existing Portfolio.

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Our online initiative is designed to not only provide students with access to innovative programs and modern digital experiences, but also to diversify our offerings, increase our enrollments and expand our digital solutions in a capital efficient manner, leveraging current infrastructure and improving classroom utilization.

The percentage of student credit hours taken online in our campus-based institutions was approximately 28% at the end of 2019.

The percentage of student credit hours taken online in our campus-based institutions was approximately 27% for 2019.

During most of 2020 and 2021, due to the COVID-19 pandemic, all of our students were effectively transitioned to an online learning environment, at scale.

Once our students, faculty and staff are able to safely return to campus, we expect that our students will transition back to a more traditional campus-based environment, with blended learning modalities.

In 2022, our students, faculty and staff were able to safely return to campus and fully transitioned to blended learning modalities by the second half of the year.

As we return to face-to-face operations at our campuses, we are targeting to have 40% to 60% percent of our student credit hours taken online going forward.

With a common learning management system implemented across our universities, we believe that we have the expertise to continue to expand online and hybrid offerings to meet the growing demand for this market opportunity, allowing us to differentiate ourselves further from our competitors.

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Many students require flexible learning modules to accommodate work and personal responsibilities.

Often, these students are working adults who are looking to either complete an undergraduate or

post-graduate degree, or who want to gain a credential to accelerate or change careers.

Often, these students are working adults who are looking to either complete an undergraduate or post-graduate degree, or who want to gain a credential to accelerate or change careers.

Our fully online programs provide students with a high-quality curriculum experience to achieve their goals.

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Intellectual Property

We currently own, or have filed applications for, trademark registrations for the word “Laureate,” for “Laureate International Universities” and for the Laureate leaf logo in the trademark offices of all jurisdictions in which we operate institutions of higher learning.

We have also registered or filed applications in the applicable jurisdictions in which we operate for the marks “Laureate Online International” and “Laureate Online Education.” In addition, we have the rights to trade names, logos and other intellectual property specific to most of our higher education institutions, in the countries in which those institutions operate.

Employees and Human Capital Management

As of December 31, 2021, we had approximately 24,000 employees, of which approximately 1,800 were full-time academic teaching staff and 10,000 were part-time academic teaching staff.

Some of our employees outside the United States are represented by labor unions under collective bargaining agreements, as is customary or required under local law in those jurisdictions.

At various points throughout the year, we negotiate to renew collective bargaining agreements that have expired

or that will expire in the near term.

We consider ourselves to be in good standing with all of the labor unions of which our employees are members and believe that we have good relations with all of our employees.

Commitment to Ethics and Values

Acting ethically and in accordance with the law is at the very core of who we are.

Maintaining our integrity is more important than any financial gain.

We have incorporated as a benefit corporation and believe that long-term success is linked to the delivery of strong outcomes for all out stakeholders.

The Laureate Code of Conduct and Ethics (the “Code”) is central to that effort.

Our Code sets out principles of integrity and ethical behavior, and our responsibilities to each other, our students, suppliers, stockholders and the public.

We have also registered or filed applications in the applicable jurisdictions in which we operate for the trademarks “La ureate Online International” and “Laureate Online Education.” In addition, we have the rights to trade names, logos and other intellectual property specific to most of our higher education institutions, in the countries in which those institutions operate.

Human Capital

At Laureate Education, Inc., we employ approximately 35,000 people (including approximately 22,000 academic staff) and are committed to promoting a culture that is strengthened by its diversity, enriched through collaboration, and built upon a foundation of continuous learning and development.

Our workforce proudly serves a population of approximately 423,000 students across Mexico and Peru and is focused on delivering academic quality and a market-leading student experience, while ensuring the highest standards of accountability, governance, and reporting.

Leading an international workforce requires a combination of universal standards, expectations, and protocols, along with a deep understanding of local culture and context.

Regardless of geography, we establish and maintain the highest degree of ethical conduct, compliance, and transparency, and design and implement initiatives to promote engagement, performance, and collaboration.

In 2022, some of our company-wide initiatives included:

Ethics and Compliance

• The launch of a revised Code of Conduct, which sets out principles of integrity and ethical behavior, and our responsibilities to each other, our students, suppliers, stockholders, and the public.

The Code covers such topics as accurate records, proper use of assets and information, conflicts of interest, and bribery and corruption.

The Code sets a baseline:

it does not cover every issue that may arise, but it provides basic principles and a methodology to help guide us in the attainment of this common goal.

The Code establishes common standards for Laureate Education, Inc.

and all of our institutions.

We maintain an Ethics Hotline, which is a secure, confidential resource for Laureate employees, faculty members, students and others to ask a question or raise a concern related to the Code or other ethics or compliance issues.

Further, as a Company, we will continue to use our platform to actively be non-discriminatory in all we do, we continue to promote diversity, inclusion and equality across our workplace, and seek to inspire a generation of graduates to continue advancing these principles in their work and throughout their communities.

Health and Safety

The health and well-being of our students, faculty and staff continues to remain a high priority.

We are proud of the swift and comprehensive measures we have taken throughout the pandemic to transition all learning and working online, and we continue to provide a full range of support services in a virtual environment.

Throughout 2021, this also included providing access to Laureate’s COVID-19 Employee Relief Fund.

In the United States we are committed to maintaining the approach to flexible work that was accelerated during the pandemic.

We provide access to high-quality, secure co-working spaces for employees who prefer to work in this environment, and for those who prefer to remain entirely remote, we are committed to ensuring they have all they need to perform their roles safely and efficiently.

In Mexico and Peru, we have commenced a return to campus, where safe and appropriate to do so.

Priority continues to be given to programs which require in-person technical teaching (such as in our interactive labs), and all local rules, regulations and health guidelines continue to be followed.

We continue to plan for a safe return to campus for all students, faculty, and staff and will continue to evolve our campus and virtual support offerings to best meet their needs.

• Company-wide Ethics communication campaigns targeting all employees, including live, interactive town-halls.

• Ongoing mandatory training for all employees, in all geographies.

Employee Engagement Benchmarking

• We conducted a comprehensive employee engagement survey, with an overall response rate of 79%, and an overall engagement score well above the median within higher education.

• Our overall engagement score combines net promoter score, pride in the company, intention to stay, and discretionary effort to go above and beyond.

Specific areas of strength, company-wide, included productivity, engagement, and inclusion.

The survey also revealed areas in which we can improve, and a series of targeted actions are being developed for 2023.

Recognizing the Impact of our People

• Through the expertise, passion, and commitment of our people, we are making a positive impact within and beyond communities across Mexico, Peru, and the United States.

In 2022 we published our 2021 Impact Report which recognizes and celebrates the impact our people are creating.

The report is available on our website at laureate.net.

We plan to continue these efforts with publication of our 2022 Impact Report later this year.

Information contained on our website is not incorporated by reference herein and is not a part of this Annual Report on Form 10-K.

Diversity and Inclusion

• We are committed to strengthening our commitment to Diversity and Inclusion across our company.

In 2022, we established a Diversity and Equity Committee across both our universities in Mexico, and in Peru, we improved gender diversity in senior leadership by more than 20%.

Since making our first investment in global higher education in 1999, we have focused on expanding access to differentiated higher education and learning opportunities to traditionally underserved areas of the world.

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By doing so, we believe that we provide greater access to cost-effective, high-quality higher education that enables more students to achieve their academic and career aspirations.

Our operations are outside

the United States, where there is a large and growing imbalance between the supply and demand for quality higher education.

Our stated public benefit is firmly rooted in our company mission and our belief that when our students succeed, countries prosper and societies benefit.

Our operations are outside the United States, where there is a large and growing imbalance between the supply and demand for quality higher education.

Our stated public benefit is firmly rooted in our company mission and our belief that when our students succeed, countries

prosper and societies benefit.

Becoming a public benefit corporation underscores our commitment to our purpose and our stakeholders, including students, regulators, employers, local communities and stockholders.

Available Information

Our principal executive offices are located at 78 SW 7th Street, Suite 900, Miami, Florida 33130, telephone (786) 209-3368.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge to stockholders and other interested parties through the “Financials” portion of our investor relations website at http://investors.laureate.net as soon as reasonably practical after they are filed with the SEC.

Various corporate governance documents, including our Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter, Corporate Governance Guidelines and Code of Conduct and Ethics are available without charge through the “Leadership and Governance” portion of our investor relations website, listed above.

In addition, the Company may use its website as a distribution channel of material company information.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports are available free of charge through the “Financials” portion of our investor relations website at http://investors.laureate.net and on the SEC's website at www.sec.gov as soon as reasonably practical after they are filed with the SEC.

Various corporate governance documents, including o ur Audit Committee Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter, Corporate Governance Guidelines and Code of Conduct and Ethics are available without charge through the “Leadership and Governance” portion of our investor relations website, listed above.

In addition, we may use our website as a distribution channel of material company information, and we also webcast our earnings calls via our investor relations website.

Industry Regulation

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Some functions are exclusive to the Federal Ministry of Education, such as the establishment of study plans and programs for Basic and Mid-Superior education services.

There are also concurrent functions, such as the granting and withdrawal of governmental recognition of validity of studies ( Reconocimiento de Validez Oficial de Estudios ) (“REVOEs,” for its acronym in Spanish).

There are also concurrent functions, such as the granting and withdrawal of governmental recognition of validity of studies ( Reconocimiento de Validez Oficial de Estudios ) (“REVOEs”).

The General Law on Education ( Ley General de Educación ) in Mexico classifies studies in the following three categories:

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Acuerdo 17/11/17 regulates in detail the provisions contained under the General Law on Education to grant REVOEs for Superior Education studies, regarding faculty, plans and programs of studies, inspection visits, procedures, etc.

Acuerdo 17/11/17 also provides that private institutions that provide Superior Education services in accordance with presidential decrees or secretarial resolutions ( acuerdos secretariales ) issued specifically to them may maintain the obligations provided to them thereunder and may function under the simplified provisions of Acuerdo 17/11/17.

thereunder and may function under the simplified provisions of Acuerdo 17/11/17.

Currently, Universidad Tecnológica de México, S.C.

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Some of our high school programs and one of our medical programs are incorporated to UNAM.

A new higher education bill was enacted in April 2021 and secondary provisions for this bill are expected to be enacted during the third quarter of 2022.

No foreseeable material changes are expected to impact the business as a result of this bill.

A new higher education bill was enacted in April 2021, and expected secondary provisions for this bill have not yet been added to the legislative agenda.

No foreseeable material changes are expected to impact the business as a result of this bill and the expected secondary provisions.

Peruvian Regulation

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Peruvian law provides that universities and technical-vocational institutes can be operated as public or private entities, and that the private entities may be organized for profit.

The Ministry of Education has overall responsibility for the national education system.

In 2014, the Peruvian Congress enacted a new University Law to regulate the establishment, operation, monitoring and closure of universities.

The law also promotes continuous improvement of quality at Peruvian universities.

The law created a new agency, the Superintendencia Nacional de Educación Superior Universitaria (“SUNEDU”), which is responsible for carrying out the governmental role in university regulation, including ensuring quality.

The Ministry of Education (“MINEDU”) has overall responsibility for the national education system.

In 2014, the Peruvian Congress enacted a new law (the “University Law”) to regulate the establishment, operation, monitoring and closure of universities and to promote continuous improvement of quality at Peruvian universities.

The University Law created a new agency, the Superintendencia Nacional de Educación Superior Universitaria (“SUNEDU”), which is responsible for carrying out the governmental role in university regulation, including ensuring quality.

While institutional autonomy is still recognized, and universities are permitted to create their own internal governance rules and determine their own academic, management and economic systems, including curriculum design and entrance and graduation requirements, all of these matters are now subject to review and evaluation by SUNEDU through its periodic review of universities as part of a license renewal process.

Under the new law, university licenses are temporary but renewable, and are granted by SUNEDU for a maximum of eight years.

On November 24, 2015, the Board of SUNEDU promulgated regulations for the university licensing process.

For licenses to be renewed, universities have to demonstrate to SUNEDU that they comply with, at a minimum, certain Basic Quality Conditions (“BQCs”) (i.e., that they have specified academic goals and that the degrees granted and plans of study are aligned with those goals;

Under the University Law, university licenses are granted for specific time periods but are renewable, and are granted by SUNEDU.

Universities have to demonstrate to SUNEDU that they comply with, at a minimum, certain Basic Quality Conditions (“BQCs”) (i.e., that they have specified academic goals and that the degrees granted and plans of study are aligned with those goals;

that their academic offerings are compatible with their planning goals (e.g., there is sufficient labor demand for careers offered);

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and that they have transparency of institutional information).

Both UPC and UPN had their licenses renewed in 2017, in each case for a period of six years.

Technical-vocational institutes are regulated by the Ministry of Education, which grants operating licenses for not less than three nor more than six years, after which the Ministry conducts a revalidation process.

The approval of new institute licenses is

based on the evaluation by the Ministry of the institute’s institutional goals, the curricula of its education programs and their link with careers needed in the Peruvian economy, the availability of adequate qualified teachers, the institute’s infrastructure, the institute’s financial resources, and the favorable opinion of the National System of Assessment, Accreditation and Certification of Education Quality (“SINEACES”) regarding the appropriateness of the programs that the institute is offering.

SINEACES is also responsible for the accreditation of programs and careers at all higher education institutions.

On November 2, 2016, a new law regarding technical-vocational institutes (the “Institutes Law”) was enacted.

Under the Institutes Law, technical-vocational institutes are regulated by the Ministry of Education, which grants operating licenses.

Both UPC and UPN had their licenses renewed in 2017, in each case for a period of six years, extended one additional year due to COVID-19.

SUNEDU allows for the educational services to be provided by three modalities:

(i) face-to-face learning (with a maximum of 20% virtual credits), (ii) hybrid learning (with 20% to 70% of the total credits of the academic program allowed to be taken virtually) and (iii) virtual learning (credits taken virtually cannot exceed 80% of the total credits of undergraduate academic programs, with the exception of programs that are specially designed for an adult population over 24 years old - (WA programs)).

In December 2022, SUNEDU modified the possibility of having WA programs 100% virtual learning, leaving

only the possibility of reaching 80% of virtuality.

It does not apply to previously approved programs, as the case of UPC and UPN, which must be adapted to the new percentage at the time of re-licensing.

In January 2023, the Constitutional Court declared constitutional Law 31520 that was passed in July 2022, which modified the composition of the SUNEDU Board of Directors and reduced its powers for the approval of new careers, schools and faculties.

We are awaiting the appointment of the new members of SUNEDU.

Technical-vocational institutes are regulated by the MINEDU, which grants operating licenses for six years, after which the Ministry conducts a revalidation process.

Since 2016, a new law regarding technical-vocational institutes (the “Institutes Law”) was enacted.

The Institutes Law created two types of institutes:

Higher Education Institutes (“Institutes”) and Higher Education Colleges (“Colleges”).

Institutes are dedicated to technical careers and Colleges are devoted to technical careers related to education, as well as science and information technology.

Higher Education Institutes (“Institutes”) which are dedicated to technical careers and Higher Education Colleges (“Colleges”) which are devoted to technical careers related to education, as well as science and information technology.

Colleges grant Technical Bachelor Degrees and Professional Technical Degrees.

Institutes and Colleges are subject to a mandatory license granted by the Ministry of Education, based on an evaluation to determine compliance with BQCs.

Institutes and Colleges are subject to a mandatory license granted by the MINEDU, based on an evaluation to determine compliance with BQCs.

BQCs include:

an appropriate institutional management guaranteeing a proper relation with the educational model of the institution;

appropriate academic management and proper program studies aligned with the Ministry of Education norms;

appropriate academic management and proper program studies aligned with the MINEDU norms;

appropriate infrastructure and equipment to develop educational activities;

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and appropriate financial and economic provisions.

The Institutes Law provides that the process will last no more than 90 days and will grant a license for a five-year period to be renewed once expired.

Unlike licenses, quality accreditation is voluntary, except for certain careers for which it might be mandatory as determined by law.

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Private Institutes and Colleges may be organized as for-profit or not-for-profit entities under Peruvian law.

Not-for-profit Colleges’ and Institutes’ income is exempt from taxes on their educational activities.

For-profit Colleges and Institutes are subject to income taxes but may qualify for a tax credit on 30% of their reinvested income, subject to a reinvestment program to be filed with the Ministry of Education for a maximum term of five years.

The specific requirements of such programs were determined by regulations in August 2017.

According to the schedule determined by the regulations, in May 2018, Cibertec was granted a license by the Ministry of Education for a five-year period.

In November 2018, Laureate Education Peru SRL acquired Instituto de Educación Superior Tecnológico Privado Red Avansys S.A.C.

Avansys is an Institute that offers 25 degrees to approximately 3,000 students in a single campus located in downtown Lima in an educational cluster for Institutes.

Avansys obtained its license from the Ministry of Education in April 2018, for a five-year period.

Cibertec and Avansys merged from a corporate and tax perspective as of February 1, 2019 and changed its corporate name to Instituto de Educación Superior Cibertec SAC.

(“IES Cibertec”).

During November 2019, the Ministry of Education issued a license for both entities (like separate entities for regulatory purposes) to permit cross selling of degrees in campuses of both the former Avansys and/or Cibertec.

A merged license for IES Cibertec was granted in January 2022.

According to the schedule determined by the regulations, in 2018, Cibertec was granted a license by the MINEDU for a five-year period.

In November 2022, Cibertec’s license renewal was submitted, with a request for a renewal period of six years.

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 1. Business