What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-23 compared with 2022-02-24 · 291 added, 628 removed, 1278 unchanged (42% of the section changed)

20 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 9 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

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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

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.

4 unchanged sentences

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.

Certain Reserves for Uncertain Tax Positions

As described in Notes 2 and 13 to the consolidated financial statements, the Company’s reserves for uncertain tax positions were $284.9 million as of December 31, 2022.

Certain reserves for uncertain tax positions represent a portion of the consolidated balance.

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;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s determination of certain reserves for uncertain tax positions;

(iii) the evaluation of audit evidence available to support certain reserves for uncertain tax positions is complex and resulted in significant auditor judgment as the nature of the evidence is often highly subjective, and (iv) the audit effort involved the use of professionals with specialized skill and knowledge.

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

These procedures included testing the effectiveness of controls relating to management’s 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.

These procedures included testing the effectiveness of controls relating to the recognition of 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, such as international and federal filing positions, and the related final tax returns;

(ii) testing the calculation of certain reserves for uncertain tax positions;

and (iii) evaluating 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 outcome.

Professionals with specialized skill and knowledge were used to assist in evaluating the amount of potential benefit to be realized and the application of relevant tax laws.

/s/ PricewaterhouseCoopers LLP

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Loss on impairment of assets 144 72,488 351,971

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

Operating income (loss) 270,012 ( 4,647 ) ( 329,302 )

Interest income 7,567 4,378 2,169

1 unchanged sentence

Loss on debt extinguishment — ( 77,940 ) ( 610 )

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

Other (expense) income, net ( 1,695 ) ( 2,420 ) 8,922

Foreign currency exchange gain (loss), net 13,791 13,474 ( 8,125 )

Loss on disposals of subsidiaries, net ( 602 ) ( 7,276 ) ( 20,429 )

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

Loss on derivatives, net — ( 24,517 ) ( 25,980 )

Other income (expense), net 770 ( 1,695 ) ( 2,420 )

Foreign currency exchange (loss) gain, net ( 17,444 ) 13,791 13,474

Gain (loss) on disposals of subsidiaries, net 1,364 ( 602 ) ( 7,276 )

Income (loss) from continuing operations before income taxes and equity in net income of affiliates 245,851 ( 137,507 ) ( 450,839 )

Income tax (expense) benefit ( 185,391 ) ( 145,573 ) 130,069

Equity in net income of affiliates, net of tax 258 — 172

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

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

Income (loss) from continuing operations 60,718 ( 283,080 ) ( 320,598 )

Income (loss) from discontinued operations, net of tax benefit (expense) of $ 508 , $( 234,326 ) and $( 114,257 ), respectively

8,260 486,865 ( 298,104 )

Net income (loss) 68,978 203,785 ( 618,702 )

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

Net loss (income) attributable to noncontrolling interests 595 ( 11,339 ) 5,371

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

$ 69,573 $ 192,446 $ ( 613,331 )

Basic and diluted earnings (loss) per share:

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

Basic earnings (loss) per share:

Income (loss) from continuing operations $ 0.37 $ ( 1.56 ) $ ( 1.53 )

Income (loss) from discontinued operations 0.05 2.57 ( 1.40 )

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

Basic earnings (loss) per share $ 0.42 $ 1.01 $ ( 2.93 )

Diluted earnings (loss) per share:

Income (loss) from continuing operations $ 0.36 $ ( 1.56 ) $ ( 1.53 )

Income (loss) from discontinued operations 0.05 2.57 ( 1.40 )

Diluted earnings (loss) per share $ 0.41 $ 1.01 $ ( 2.93 )

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

7 unchanged sentences

77,233 421,972 133,827

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

— — ( 7,950 )

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

Minimum pension liability adjustment, net of tax of $ 140 , $ 0 and $ 0 , respectively

560 ( 202 ) ( 1,200 )

1 unchanged sentence

Comprehensive income (loss) 146,771 625,555 ( 486,075 )

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

Net comprehensive loss (income) attributable to noncontrolling interests 582 ( 11,327 ) 4,739

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

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Prepaid expenses and other current assets 19,445 16,280

Current assets held for sale — 434,966

Total current assets 226,199 544,319

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Income taxes liabilities 38,738 38,705

Derivative instruments — 17,680

Other current liabilities 17,587 18,097

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Deferred income taxes 89,765 73,624

Derivative instruments — 8,144

Other long-term liabilities 30,823 24,640

3 unchanged sentences

Stockholders' equity:

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

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

Preferred stock, par value $ 0.001 per share – 50,000 shares authorized and no shares issued and outstanding as of December 31, 2022 and December 31, 2021

Common stock, par value $ 0.004 per share – 700,000 shares authorized, 230,779 shares issued and 157,013 shares outstanding as of December 31, 2022 and 228,831 shares issued and 180,611 shares outstanding as of December 31, 2021

Additional paid-in capital 2,204,755 2,388,783

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

Retained earnings 39,244 15,523

Accumulated other comprehensive loss ( 442,424 ) ( 520,204 )

12 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 Retained earnings (accumulated deficit) 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, 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

2 unchanged sentences

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

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

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

1 unchanged sentence

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 gain on derivatives, net of tax of $ 0

— — — — — — ( 7,950 ) — — ( 7,950 )

Minimum pension liability adjustment, net of tax of $ 0

1 unchanged sentence

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

Distributions to noncontrolling interest holders — — — — — — — — — —

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

8 unchanged sentences

Laureate Education, Inc.

Common Stock Class B

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

Shares Amount

Balance at December 31, 2021 180,611 $ 915 $ 2,388,783 $ 15,523 $ ( 520,204 ) $ ( 744,174 ) $ ( 1,285 ) $ 1,139,558

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

Non-cash stock compensation — — 8,776 — — — — 8,776

Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 1,948 8 11,214 — — — — 11,222

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 ( 25,546 ) — — — — ( 282,098 ) — ( 282,098 )

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

Special cash distribution, special cash dividend, and equitable adjustments to stock-based compensation awards — — ( 204,336 ) ( 45,852 ) — — — ( 250,188 )

Change in noncontrolling interests — — 2 — — — ( 2 ) —

Accretion of redeemable noncontrolling interests and equity — — — — — — ( 88 ) — — — — ( 88 )

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

Reclassification of redeemable equity to non-redeemable equity — — 316 — — — — 316

Net income — — — 69,573 — — ( 595 ) 68,978

16 unchanged sentences

Gain on sales and disposal of subsidiaries, property and equipment and leases, net ( 11,146 ) ( 609,529 ) ( 22,756 )

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

Loss on derivative instruments — 24,517 25,980

Payments for settlement of derivative contracts — — ( 626 )

5 unchanged sentences

Deferred income taxes ( 530 ) 195,563 ( 185,652 )

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

Unrealized foreign currency exchange loss (gain) 13,907 ( 7,033 ) 26,344

Non-cash loss from non-income tax contingencies 743 12,150 3,059

7 unchanged sentences

Deferred revenue and other liabilities ( 18,959 ) ( 98,277 ) 171,474

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

Net cash provided by (used in) operating activities 178,230 ( 156,082 ) 259,556

Cash flows from investing activities

3 unchanged sentences

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

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

Proceeds from sale of investment — — 11,473

Other, net — — ( 7 )

5 unchanged sentences

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

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

Payments of special cash distributions, dividend, and dividend equivalent rights ( 253,188 ) ( 1,374,855 ) —

Proceeds from exercise of stock options 13,216 3,411 25,716

18 unchanged sentences

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.

1 unchanged sentence

Discontinued Operations

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

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

Campuses), and Rest of World.

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

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

Accordingly, all of the divestitures that were part of this strategic shift, 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, 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 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.

As a result of the strategic review first announced in January 2020, during the third quarter of 2020, the Company completed a sale of its operations in Chile and signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University in the United States.

These sales were completed during 2020 and 2021.

Additionally, prior to 2020, the Company had announced the divestiture of certain other subsidiaries in Europe, Asia and Central America, which has been completed.

These announcements represented strategic shifts that had a major effect on the Company’s operations and financial results.

Accordingly, all of the divestitures that were part of these strategic shifts were accounted for as Discontinued Operations for all periods presented in accordance with Accounting Standards Codification (ASC) 205-20, “Discontinued Operations” (ASC 205).

All planned divestitures have now been completed, and the Company has concluded its strategic review process.

The Company’s continuing operations are Mexico and Peru.

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

See Note 4, Discontinued Operations and Assets Held for Sale, and Note 5, Dispositions, for more information.

9 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 (income) loss attributable to noncontrolling interests in the Consolidated Statements of Operations.

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.

Foreign Currency Translation and Transaction Gains and Losses

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Assets and liabilities are translated into USD using the period-end spot foreign exchange rates.

Income and expenses are translated at the weighted-average exchange rates in effect during the period.

Income and expenses are translated at the weighted-average exchange rates in

effect during the period.

Equity accounts are translated at historical exchange rates.

8 unchanged sentences

Restricted Cash

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.

Restricted cash includes cash equivalents held as assets for a supplemental employment retention agreement for a former executive and, in 2021, cash equivalents held to collateralize letters of credit.

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 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 our prior-year debt, as discussed in Note 8, Debt.

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

Our cash accounts are maintained with high-quality financial institutions with no significant concentration in any one institution.

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

The fair value of these financial instruments approximates their carrying amounts reported in the Consolidated Balance Sheets, as discussed in Note 8, Debt.

Our cash accounts are maintained with high-quality financial institutions.

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

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Direct costs reported on the Consolidated Statements of Operations represent the cost of operations, including selling and administrative expenses, which are directly attributable to specific business units.

Deferred costs on the Consolidated Balance Sheets consist primarily of direct costs associated with online course development, accreditation and costs to obtain a contract.

Deferred costs associated with the development of online educational programs are capitalized after technological feasibility has been established.

Deferred online course development costs are amortized to Direct costs on a straight-line basis over the estimated period that the associated products are expected to generate revenues.

Deferred online course development costs are evaluated on a quarterly basis through review of the corresponding course catalog.

If a course is no longer listed or offered in the current course catalog, then the costs associated with its development are written off.

As of December 31, 2021 and 2020, the unamortized balances of online course development costs were $ 3,084 and $ 15,258 , respectively.

Laureate defers direct and incremental third-party costs incurred for obtaining initial accreditation and for the renewal of accreditations.

These accreditation costs are amortized to Direct costs over the life of the accreditation on a straight-line basis.

As of December 31, 2021 and 2020, the unamortized balances of accreditation costs were $ 219 and $ 241 , respectively.

As discussed in Note 3, Revenue, Laureate also defers certain commissions and bonuses earned by third-party agents and our employees that are considered incremental and recoverable costs of obtaining a contract with a customer.

Deferred costs on the Consolidated Balance Sheets consist primarily of direct costs associated with costs to obtain a contract.

As discussed in Note 3, Revenue, Laureate defers certain commissions and bonuses earned by third-party agents and our employees that are considered incremental and recoverable costs of obtaining a contract with a customer.

These costs are amortized over the period of benefit which ranges from two to four years .

As of December 31, 2022 and 2021, the unamortized balances of contract costs were $ 3,855 and $ 2,678 , respectively.

At December 31, 2021 and 2020, Laureate’s total Deferred costs were $ 27,108 and $ 33,361 , respectively, with accumulated amortization of $( 21,127 ) and $( 15,738 ), respectively.

Debt Issuance Costs

4 unchanged sentences

Goodwill, Other Intangible Assets and Long-lived Assets

Goodwill primarily represents the amounts paid by Wengen Alberta, Limited Partnership (Wengen), the Company's controlling stockholder, in excess of the fair value of the net assets acquired in the August 2007 leveraged buyout transaction (LBO) (see Note 7, Goodwill and Other Intangible Assets), plus the excess purchase price over fair value of net assets for businesses acquired after the LBO transaction.

Goodwill primarily represents the amounts paid by Wengen Alberta, Limited Partnership (Wengen) in excess of the fair value of the net assets acquired in the August 2007 leveraged buyout transaction (LBO), plus the excess purchase price over fair value of net assets for businesses acquired after the LBO transaction.

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.

12 unchanged sentences

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

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

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

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

8 unchanged sentences

Any costs incurred to internally develop new tradenames are expensed as incurred.

Accreditations are not considered a separate unit of account and their values are embedded in the cash flows generated by the institution, which are used to value its tradename.

Accreditations are not considered a separate unit of account and their values are embedded in the cash

flows generated by the institution, which are used to value its tradename.

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.

15 unchanged sentences

Derivative Instruments

In the normal course of business, our operations have significant exposure to fluctuations in foreign currency values and interest rate changes.

Accordingly, Laureate mitigates a portion of these risks through a risk-management program that includes the use of derivative financial instruments (derivatives).

Laureate selectively enters into foreign exchange forward contracts to reduce the earnings impact related to receivables and payables that are denominated in foreign currencies.

In addition, in certain cases Laureate uses interest rate swaps to mitigate certain risks associated with floating-rate debt arrangements.

In the normal course of business, our operations have exposure to fluctuations in foreign currency values and interest rate changes.

Accordingly, Laureate may seek to mitigate a portion of these risks through a risk-management program that includes the use of derivative financial instruments (derivatives).

In the past, Laureate has selectively entered into foreign exchange forward contracts to reduce the earnings impact related to receivables and payables that are denominated in foreign currencies.

In addition, in certain cases Laureate has used interest rate swaps to mitigate certain risks associated with floating-rate debt arrangements.

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 any 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.

3 unchanged sentences

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.

We also generate other revenues from student fees and other education-related activities.

These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues.

16 unchanged sentences

We use this method to estimate the expected term because we do not have sufficient historical exercise data.

Laureate has granted restricted stock, restricted stock units, stock options, and performance awards for which the vesting is based on annual performance metrics of the Company.

During the years ended,December 31, 2022, 2021, and 2020, Laureate has granted restricted stock, restricted stock units, and performance awards for which the vesting is based on annual performance metrics of the Company.

For interim periods, we use our year-to-date actual results, financial forecasts, and other available information to estimate the probability of the award vesting based on the performance metrics.

16 unchanged sentences

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

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

As new facts become known to management, the assumptions related to a contingency are

reviewed and adjustments are made, as necessary.

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

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

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

As of December 31, 2021 and through the date of this Form 10-K, the Company evaluated its accounting estimates that require consideration of forecasted financial information, based on current information reasonably available to us.

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

While this evaluation did not result in a material effect to the Company’s Consolidated Financial Statements as of and for the 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

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.

2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04 which provides optional expedients for a limited period of time for accounting for contracts, hedging relationships, and other transactions affected by the London Interbank Offered Rate (LIBOR) or other reference rates expected to be discontinued.

Specifically, to the extent the Company's debt and other agreements are modified to replace LIBOR with another interest rate index, ASU 2020-04 will permit the Company to account for the modification as a continuation of the existing contract without additional analysis.

These optional expedients can be applied from March 2020 through December 31, 2022 on a prospective basis.

In December 2022, the FASB issued ASU No.

2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, to extend the period the optional expedients can be applied from December 31, 2022 to December 31, 2024.

During the fourth quarter of 2022, the Company adopted the optional relief guidance provided under ASU 2020-04 in connection with the amendment of our revolving credit facility.

The amendment was done in response to the planned phase out of LIBOR and the only contractual change was to update the reference rate from LIBOR to the Secured Overnight Financing Rate (SOFR).

See Note 8, Debt, for further discussion.

There was no material impact to our consolidated financial statements during the year ended December 31, 2022 as a result of adoption of this standard.

Revenue Recognition

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.

We also generate other revenues from student fees and other education-related activities.

These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues.

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Discontinued Operations and Assets Held for Sale

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

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.

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

All other markets have been divested.

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

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Pretax income (loss) of discontinued operations 7,752 721,191 ( 183,847 )

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

Income tax benefit (expense) 508 ( 234,326 ) ( 114,257 )

Income (loss) from discontinued operations, net of tax $ 8,260 $ 486,865 $ ( 298,104 )

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Goodwill was also evaluated for impairment.

The projections used in the impairment testing included key assumptions around the effect of regulatory uncertainties on the future cash flows expected

to be generated, reducing the estimates of those cash flows.

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

The 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.

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

2019 Losses Recognized on Held-For-Sale Disposal Groups

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

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

As discussed in Note 5, Dispositions, the Costa Rica institutions were sold on January 10, 2020 .

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

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.

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

During the second quarter of 2022, the Company completed the transfer of the remaining assets and liabilities of the Discontinued Operations that were classified as held for sale as of December 31, 2021, which resulted in a gain of approximately $ 4,300 .

The carrying amounts of the major classes of assets and liabilities that were classified as held for sale as of December 31, 2021 are presented in the following table:

December 31, 2022 December 31, 2021

Assets of Discontinued Operations

Cash and cash equivalents $ — $ 270,164

Receivables, net — 113,386

Property and equipment, net — 259,471

Goodwill and tradenames — 1,202,496

Operating lease assets $ — $ 6,164

Other assets — 183,742

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

Total assets held for sale $ — $ 6,164

Liabilities of Discontinued Operations

Deferred revenue and student deposits $ — $ 87,793

Operating leases, including current portion $ — $ 10,849

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

Other liabilities — 291,599

Total liabilities held for sale $ — $ 10,849

2022 Receipt of Escrow Receivable from Sale of Walden

On August 12, 2021, pursuant to the Membership Interest Purchase Agreement (the Walden Purchase Agreement) with Adtalem Global Education Inc.

(the Walden Purchaser), 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).

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 was to 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.

On August 23, 2022, the Company received approximately $ 71,700 of the escrow amount.

2021 Dispositions

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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 .

As a result of the sale, 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.

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.

During the third quarter of 2022, the Company received the first scheduled escrow payment of $ 1,000 .

Receipt of Remaining Escrow Receivable from Sale of China Operations

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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 proceeds received at the date of sale, 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.

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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).

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.

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 was to 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.

As described above, on August 23, 2022, the Company received approximately $ 71,700 of the escrow amount.

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

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

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

Upon completion of the sale in January 2020 and after including the working capital adjustment, the Company recognized additional pre-tax loss of approximately $ 18,600 ,

which related to subsequent changes in net carrying values.

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

During 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 and is included in Income (loss) from discontinued operations, net of tax on the Consolidated Statement of Operations for the year ended December 31, 2020.

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

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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 was being paid to the NSAD Buyers ratably on a quarterly basis over the next four years .

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.

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

Divestiture of Chilean Operations

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

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

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

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

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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.

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

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

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

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

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

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

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

Campus Guadalajara Norte Sale

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

2019 Dispositions

Sale of the University of St.

Augustine for Health Sciences, LLC

On February 1, 2019, the Company completed the sale of the University of St.

Augustine for Health Sciences, LLC (St.

Augustine), in the United States.

The total transaction value under the sale agreement was $ 400,000 .

Upon completion of the sale, the Company received net proceeds of approximately $ 346,400 , which included $ 11,700 of customary closing adjustments, and was net of $ 58,100 of debt assumed by the purchaser and $ 7,200 of fees.

The proceeds net of cash sold were approximately $ 301,800 , which the Company used to repay outstanding indebtedness under its U.S.

term loan and revolving credit facility.

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

Sale of Thailand Operations

On February 12, 2019, the Company completed the sale of its interests in Thai Education Holdings Company Limited, a Thailand corporation (TEDCO), and Far East Stamford International Co.

(FES), a Thailand corporation.

TEDCO was the owner of a controlling interest in FES, which was the license holder for Stamford International University, which had three campuses in Thailand.

The total purchase price was approximately $ 35,300 , and net proceeds were approximately $ 26,400 , net of debt assumed by the buyer and other customary closing adjustments and fees.

Of the $ 26,400 in net proceeds, $ 22,200 , or $ 18,800 net of cash sold, was received at closing.

The balance of $ 4,200 was payable upon satisfaction of certain post-closing requirements;

the first post-closing requirement was satisfied in May 2019 and the Company received $ 2,800 .

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

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

Additional Gain on Sale of China Operations

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

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

On January 25, 2019, Laureate received HKD 71,463 (approximately $ 9,100 at date of receipt) for the second and final holdback payment, net of legal fees.

Also, as of December 31, 2018, the Company had recorded a liability of approximately $ 14,300 related to loss contingencies for which the Company had indemnified the buyer.

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

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

Sale of Monash South Africa

On April 8, 2019, the Company completed the sale of its institution in South Africa, Monash South Africa, as well as the sale of the real estate associated with that institution.

The transactions consisted of:

(i) the transfer by Monash South Africa Limited (MSA), an Australia limited company that is an indirect 75 %-owned subsidiary of the Company, to The Independent Institute of Education Limited (IIE), a South Africa limited company that is a subsidiary of ADvTECH Limited, of all of MSA’s assets and certain of its operational liabilities for a sale price of 15,000 South African Rand (ZAR) (subject to customary adjustments) (or approximately $ 1,100 at the closing date) and (ii) the sale by LEI AMEA Investments B.V., a Netherlands limited company that is an indirect wholly owned subsidiary of the Company, of all of the shares of Laureate South Africa Pty.

(LSA), a South Africa limited company, to IIE for a net sale price of approximately ZAR 99,000 (subject to customary adjustments) (or approximately $ 7,000 at the closing date).

In addition, IIE assumed debt of approximately $ 20,200 .

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

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

Sale of India Operations

On May 9, 2019, LEI Singapore Holdings Pte Limited, a Singapore corporation, Laureate I B.V., a Netherlands private limited company (Laureate I), and Laureate International B.V., a Netherlands private limited company (collectively, the India Sellers), all of which are indirect wholly owned subsidiaries of the Company, closed a transaction pursuant to the share purchase agreement (the India Agreement), among the India Sellers, Global University Systems India Bidco B.V., a Netherlands private limited liability company (the India Purchaser) and Global University Systems Holding B.V.

(the India Purchaser Guarantor), a Netherlands private limited liability company.

Pursuant to the India Agreement, the India Purchaser acquired from the India Sellers all of the issued and outstanding shares in the capital of Pearl Retail Solutions Private Limited, an India corporation (PRS), M-Power Energy India Private Limited (M-Power), an India corporation, and Data Ram Sons Private Limited (Data Ram), an India corporation.

As a result of the closing of the transaction, the Company no longer consolidates its network institutions in India, including Creative Arts Education Society (CAES), the operator of Pearl Academy, and University of Petroleum and Energy Studies (UPES).

In connection with the India Agreement, certain of the India Sellers also closed a separate transaction with the minority owners of PRS relating to the purchase by them of the minority owners’ 10 % interest in PRS.

The total purchase price under the India Agreement was $ 145,600 .

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

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

Sale of Spain and Portugal Operations

On May 31, 2019, Iniciativas Culturales de España S.L., a Spanish private limited liability company (ICE), and Laureate I, both of which are indirect wholly owned subsidiaries of the Company, closed a previously announced transaction pursuant to the sale and purchase agreement (the Spain and Portugal Sale Agreement) with Samarinda Investments, S.L., a Spanish limited liability company (Samarinda).

Pursuant to the Spain and Portugal Sale Agreement, Samarinda acquired from ICE all of the issued and outstanding shares in the capital of each of Universidad Europea de Madrid, S.L.U., Iniciativas Educativas de Mallorca, S.L.U., Iniciativa Educativa UEA, S.L.U., Universidad Europea de Canarias, S.L.U., and Universidad Europea de Valencia, S.L.U.

(together, the Spain Companies), and Samarinda acquired from Laureate I all of the issued and outstanding shares in the capital of Ensilis—Educação e Formação, Unipessoal, Lda.

(the Portugal Company).

Three of the Spain Companies are the entities that operate Universidad Europea de Madrid, Universidad Europea de Canarias, and Universidad Europea de Valencia.

The Portugal Company is the entity that operates Universidade Europeia, a comprehensive university in Portugal, and Instituto Português de Administração de Marketing (IPAM Lisbon and IPAM Porto), post-secondary schools of marketing in Portugal.

The total purchase price under the Spain and Portugal Sale Agreement was EUR 770,000 (or approximately $ 857,000 at the date of closing), subject to customary closing adjustments.

After payment of transaction fees, receipt of working capital and other adjustments, as well as settlement of foreign currency swaps, the total net proceeds received by ICE and Laureate I were approximately $ 906,000 , or approximately $ 760,000 net of cash sold, which the Company used to repay indebtedness, including full repayment of the remaining balance outstanding under the 2024 Term Loan.

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

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

Sale of Turkey Operations

On August 27, 2019, Laureate I B.V.

and Can Uluslararasi Yatirim Holding A.Ş.

(Can Holding), a Turkish company, executed and closed a Sale and Purchase Agreement (the Turkey SPA).

Pursuant to the Turkey SPA, Can Holding purchased from Laureate I B.V.

100 % of the share capital of Education Turkey B.V.

(ET), a private limited liability company incorporated under the laws of the Netherlands.

ET and certain of its direct and indirect subsidiaries and affiliates together have the right to appoint a majority of the Trustees of Bilgi Eğitim ve Kültür Vakfı (Bilgi Foundation).

Bilgi Foundation is the sponsor of Istanbul Bilgi University (Bilgi), an institution located in Turkey that the Company previously consolidated under the variable interest entity model.

As a result of the closing of the Turkey SPA on August 27, 2019, the Company no longer consolidates Bilgi.

The total purchase price was $ 90,000 , which consisted of cash proceeds of $ 75,000 and deferred purchase price of $ 15,000 in the form of an instrument payable one year after closing.

The deferred purchase price carries no stated interest rate.

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

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

Sale of Universidad Interamericana de Panamá (UIP)

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.

(the UIP Buyers).

Pursuant to the sale and purchase agreement (the UIP Agreement), the UIP Buyers purchased from the Universidad U Latina, SRL and Education Holding Costa Rica EHCR, SRL (the UIP Sellers) 100 % of the ownership interests of UIP, a higher education institution in Panama.

Excelencia y Superacion S.A.

(EXSUSA), an affiliate of the UIP Buyers, was also party to the UIP Agreement as a guarantor of the UIP Sellers’ obligations under the UIP Agreement.

In addition, Desarrollos Urbanos Educativos S.

(DUE), an indirect wholly owned subsidiary of the Company, entered into and closed a real estate purchase agreement (the DUE Real Estate Purchase Agreement) with EXSUSA, pursuant to which EXSUSA or its designees purchased the campus real estate.

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

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

Sale of UniNorte

On November 1, 2019, the Company closed on the previously announced sale of its institution UniNorte, a traditional higher education institution in Manaus, Brazil.

Under the sale agreement, Cenesup - Centro Nacional de Ensino Superior Ltda., a limited liability company organized under the laws of Brazil (the UniNorte Purchaser) purchased 100% of the quota capital of Sodecam - Sociedade de Desenvolvimento Cultural do Amazonas Ltda., a limited liability company organized under the laws of Brazil, which is the maintaining entity of UniNorte.

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

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

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

Dissolution of Dormant Subsidiaries

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

This loss is included in Loss 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.

Business and Geographic Segment Information

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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.

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 .

Our educational offerings utilize campus-based, online and hybrid (a combination of online 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.

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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.

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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.

Each institution in Mexico has a national license.

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

Students in our Mexican institutions typically finance their own education.

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Laureate owns three institutions in Peru.

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

As discussed in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale, in prior periods, a number of our subsidiaries met the requirements to be classified as Discontinued Operations and were subsequently sold.

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

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

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

EiP is an enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources.

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

Our EiP initiative was completed as of December 31, 2021, except for certain EiP expenses related to the run out of programs that began in prior periods.

EiP was 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), 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.

The EiP initiative also included 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 that are described in Note 5, Dispositions.

Adjusted EBITDA is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans.

In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.

Additionally, Adjusted EBITDA is a key financial measure used by the compensation committee of our Board of Directors and our Chief Executive Officer in connection with the payment of incentive compensation to our executive officers and other members of our management team.

Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

We use total assets as the measure of assets for reportable segments.

The following tables provide financial information for our reportable segments, including a reconciliation of Adjusted EBITDA to Loss from continuing operations before income taxes and equity in net income of affiliates, as reported in the Consolidated Statements of Operations, for the years ended December 31, 2021, 2020 and 2019:

The following tables provide financial information for our reportable segments, including a reconciliation of Adjusted EBITDA to Income (loss) from continuing operations before income taxes and equity in net income of affiliates, as reported in the Consolidated Statements of Operations, for the years ended December 31, 2022, 2021 and 2020:

Mexico Peru Corporate Total

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EiP expenses ( 813 ) ( 75,420 ) ( 89,647 )

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

Operating income (loss) 270,012 ( 4,647 ) ( 329,302 )

Interest income 7,567 4,378 2,169

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Loss on debt extinguishment — ( 77,940 ) ( 610 )

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

Other (expense) income, net ( 1,695 ) ( 2,420 ) 8,922

Foreign currency exchange gain (loss), net 13,791 13,474 ( 8,125 )

Loss on disposals of subsidiaries, net ( 602 ) ( 7,276 ) ( 20,429 )

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

Loss on derivatives, net — ( 24,517 ) ( 25,980 )

Other income (expense), net 770 ( 1,695 ) ( 2,420 )

Foreign currency exchange (loss) gain, net ( 17,444 ) 13,791 13,474

Gain (loss) on disposals of subsidiaries, net 1,364 ( 602 ) ( 7,276 )

Income (loss) from continuing operations before income taxes and equity in net income of affiliates $ 245,851 $ ( 137,507 ) $ ( 450,839 )

Geographic Information

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Long-lived assets are composed of Property and equipment, net.

Laureate’s long-lived assets of Continuing Operations by geographic area were as follows:

Laureate’s long-lived assets by geographic area were as follows:

December 31, 2022 2021

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Tradenames and Other Intangible Assets

Amortization expense for intangible assets includes only the finite-lived tradename, as all other intangible assets subject to amortization were fully amortized as of December 31, 2021 and 2020.

Amortization expense for intangible assets included only the finite-lived tradename, as all other intangible assets subject to amortization were fully amortized as of December 31, 2022 and 2021.

Amortization expense was $ 0 , $ 23,069 and $ 7,583 for the years ended December 31, 2022, 2021 and 2020, 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, 2022:

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For the years ended December 31, 2022 2021 2020

Impairments of Tradenames $ 51,437 $ 320,000 $ —

Impairments of Goodwill $ — $ — $ —

Impairments of Tradenames — 51,437 320,000

Impairments of long-lived assets and deferred costs 144 21,051 31,971

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The impairment charges discussed below were recorded to reduce the assets' carrying values to fair value.

For the purposes of our annual impairment testing of the Company's goodwill, fair value measurements are determined primarily using the income approach, based largely on inputs that are not observable to active markets, which would be deemed “Level 3” fair value measurements as defined in Note 18, Fair Value Measurement.

Level 3 inputs are defined as unobservable inputs that are supported by little or no market activity.

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

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 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.

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

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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 had a net carrying amount of $ 74,505 and was being amortized over five years .

Impairment of Brazil E2G Software Assets

As part of a transformation initiative for the enrollment to graduation cycle (E2G) that started several years ago, the Company began developing a solution to standardize the information systems and processes in Brazil.

As part of a transformation initiative for the enrollment to graduation cycle (E2G), the Company began developing a solution to standardize the information systems and processes in Brazil.

During development, those costs that qualified for capitalization as internal-use software were classified within Construction in-progress on our Consolidated Balance Sheets.

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Senior Secured Credit Facility (stated maturity date October 2024) $ 100,000 $ —

Senior Notes (stated maturity date May 2025) — 798,725

Total senior long-term debt — 798,725

Lines of credit 13,778 10,131

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Revolving Credit Facility

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.

Under the Company's Third Amended and Restated Credit Agreement (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.

On December 23, 2022, the Company entered into the Second Amendment of the Third A&R Credit Agreement.

This amendment was done in response to the planned phase out of LIBOR and the only contractual change was to update the reference rate from LIBOR to the Secured Overnight Financing Rate (SOFR).

As described in Note 2, Significant Accounting Policies, in connection with this amendment, the Company adopted the optional relief guidance provided under ASU 2020-04, which permits the Company to account for the modification as a continuation of the existing contract without additional analysis.

The Senior Secured Credit Facility bears interest at a per annum interest rate, at the option of the Company, at either the SOFR 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 Term SOFR 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 .

As of December 31, 2022 and December 31, 2021, the Senior Secured Credit Facility had a total outstanding balance of $ 100,000 and $ 0 , respectively.

During the fourth quarter of 2022, the Company borrowed on its Senior Secured Credit Facility primarily to fund the repurchase of shares that the Company completed in connection with the November 2022 secondary offering described in Note 11, Share-based Compensation and Equity.

Guarantors of the Senior Secured Credit Facility

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or any 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 would have matured on May 1, 2025.

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.

The First Asset Sale Offer was made pursuant to the indenture governing the Senior Notes due 2025 as a result of the Company's sale of its operations in Chile and Malaysia.

The First Asset Sale Offer expired on November 10, 2020.

On November 16, 2020, the Company purchased $ 775 aggregate principal amount, plus accrued and unpaid interest, of the Senior Notes due 2025 that were validly tendered as of the expiration of the First Asset Sale Offer.

On November 12, 2020, following the expiration of the First Asset Sale Offer, the Company announced the commencement of a cash tender offer (the Second Asset Sale Offer) to purchase up to $ 650,000 aggregate principal amount of the Senior Notes due 2025, at a purchase price of 100 % of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date.

The Second Asset Sale Offer was made pursuant to the indenture governing the Senior Notes due 2025 as a result of the Company's sale of its operations in Australia and New Zealand.

The Second Asset Sale Offer expired on December 10, 2020.

On December 14, 2020, the Company purchased $ 500 aggregate principal amount, plus accrued and unpaid interest, of the Senior Notes due 2025 that were validly tendered as of the expiration of the Second Asset Sale Offer.

As of December 31, 2020, 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

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

Carrying amount Estimated fair value

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

As of December 31, 2022 and December 31, 2021, the estimated fair value of our debt approximated its carrying value.

Certain Covenants

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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 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 $ 1,561 , $ 4,628 and $ 10,103 for the years ended December 31, 2022, 2021 and 2020, 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.

Certain unamortized debt issuance costs were written off in 2021 and 2020 in connection with early repayment of debt balances and debt agreement amendments, as discussed above.

As of December 31, 2022 and 2021, our unamortized debt issuance costs were $ 2,060 and $ 3,588 , respectively.

Currency and Interest Rate Swaps

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 service payments is subject to fluctuations in the value of the USD relative to foreign currencies, because a majority of our operating cash used to make these payments is generated by subsidiaries with functional currencies other than USD.

As part of our overall risk management policies, Laureate has at times entered into foreign currency swap contracts and interest rate swap contracts.

See also Note 12, Derivative Instruments.

Lines of Credit

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At December 31, 2022 and 2021, the aggregate outstanding balances on our lines of credit were $ 13,778 and $ 10,131 , respectively.

At December 31, 2021, we had zero additional available borrowing capacity under our outstanding lines of credit.

At December 31, 2022, we had approximately $ 63,700 additional available borrowing capacity under our outstanding lines of credit.

At December 31, 2022, interest rates on our lines of credit ranged from 8.10 % to 9.34 %.

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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 ( 12.26 % and 8.12 % as of December 31, 2022 and 2021, 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, 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.

The current quarterly payments on the loan total MXN 72,250 ($ 3,725 at December 31, 2022) and increase over the remaining term of the loan to MXN 76,500 ($ 3,944 at December 31, 2022), with a balloon payment of MXN 425,000 ($ 21,913 at December 31, 2022) due at maturity.

As of December 31, 2022 and December 31, 2021, the outstanding balance of this loan was $ 41,416 and $ 52,533 , respectively.

The Company obtained financing to fund the construction of two new campuses at one of our institutions in Peru, Universidad Peruana de Ciencias Aplicadas (UPC).

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

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 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 %.

As of December 31, 2022 and 2021, one loan remains outstanding, which matures in November 2025 and carries an interest rate of 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.

As of December 31, 2022 and 2021, the outstanding balance of this loan was $ 8,246 and $ 10,284 , respectively.

On December 22, 2017, a Laureate subsidiary in Peru entered into an agreement to borrow PEN 247,500 (approximately $ 76,000 at the agreement date).

The loan bears interest at a fixed rate of 6.62 % per annum and was originally scheduled to mature in December 2022.

Quarterly payments in the amount of PEN 9,281 ($ 2,333 at December 31, 2021) were due from March 2018 through December 2019.

The quarterly payments increased to PEN 14,438 ($ 3,629 at December 31, 2021) in March 2020 through the loan's maturity.

In June 2020, the Laureate subsidiary and the lender agreed to defer the quarterly principal payments for one year (the deferral period), and agreed to extend the maturity date of the loan by one year to December 2023.

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

The loan bears interest at a fixed rate of 6.62 % per annum and matures in December 2023.

Quarterly payments in the amount of PEN 14,438 ($ 3,786 at December 31, 2022) are due through the loan's maturity.

As of December 31, 2022 and 2021, this loan had a balance of $ 15,142 and $ 29,035 , respectively.

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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, "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

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Rent Concessions

The Company has taken actions with respect to certain of its existing leases, including engaging with landlords to discuss rent deferrals, as well as other rent concessions.

Consistent with the updated guidance from the Financial Accounting Standards Board (FASB) in April 2020, the Company has elected the practical expedient for rent concessions where the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract.

In 2020, the Company took actions with respect to certain of its existing leases, including engaging with landlords to discuss rent deferrals, as well as other rent concessions.

Consistent with the updated guidance from the FASB in April 2020, the Company has elected the practical expedient for rent concessions where the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract.

In those cases, the Company treated the rent concessions as if there were no modification to the lease contract and accounted for these rent concessions as variable lease payments.

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Commitments and Contingencies

Loss Contingencies

Contingencies

Laureate is subject to legal actions arising in the ordinary course of its business.

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

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.

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.

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

Income Tax Contingencies

As of December 31, 2022 and 2021, Laureate has recorded cumulative liabilities for income tax contingencies of $ 130,323 and $ 91,585 , respectively.

Non-Income Tax Loss Contingencies

Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities.

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As of December 31, 2022 and 2021, approximately $ 11,400 and $ 7,200 , respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

We have also identified certain loss 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 the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies could be up to approximately $ 11,900 if the outcomes were unfavorable.

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.

As of December 31, 2022 and 2021, the amount of the guarantee was $ 7,076 and $ 5,885 , respectively.

Standby Letters of Credit (LOCs)

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.

As of December 31, 2021, we had approximately $ 10,700 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 Consolidated Balance Sheet.

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.

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During the second quarter of 2020, ICE was migrated to the Netherlands and its name was changed to Laureate Netherlands Holding B.V.

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.

In October 2021, the Company paid to the STA the final assessments of approximately $ 9,300 , in order to reduce the amount of future interest that could be incurred as the appeal process continues.

Following the payment, the letter of credit was no longer required and the cash was subsequently released in October 2022.

The Company has paid all of the final assessments that were issued as a result of the Spanish tax audits and does not expect that the matter will have a material effect on its consolidated financial statements.

Share-based Compensation and Equity

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Total continuing and discontinued operations $ 8,776 $ 10,172 $ 13,298

2007 Stock Incentive Plan

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

2007 Stock Incentive Plan (2007 Plan).

The total shares authorized under the 2007 Plan were 9,232 .

Shares that were forfeited, terminated, canceled, allowed to expire unexercised, withheld to satisfy tax withholding, or repurchased were available for re-issuance.

Any awards that were not vested upon termination of employment for any reason were forfeited.

Upon voluntary or involuntary termination without cause (including death or disability), the grantee (or the estate) has a specified period of time after termination to exercise options vested on or prior to termination.

The 2007 Plan’s restricted stock awards have a claw-back feature whereby all vested shares, or the gross proceeds from the sale of those shares, must be returned to Laureate for no consideration if the employee does not abide by the agreed-upon restrictive covenants such as covenants not to compete and covenants not to solicit.

Stock option awards under the 2007 Plan have a contractual life of 10 years and were granted with an exercise price equal to the fair market value of Laureate’s stock at the date of grant.

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

On June 13, 2013, the Board approved the Laureate Education, Inc.

2013 Long-Term Incentive Plan (2013 Plan), as a successor plan to Laureate’s 2007 Plan.

2013 Long-Term Incentive Plan (2013 Plan).

The 2013 Plan became effective in June 2013, following approval by the stockholders of Laureate.

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, 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.

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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;

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and (f) those performance-based restricted stock units, performance shares and performance units that would have become vested or earned had Laureate achieved the target performance in the three fiscal years ending coincident with or immediately subsequent to the effective time of such change in control would become vested and earned and be settled in cash or shares of common stock as promptly as practicable.

After giving effect to the foregoing change in control acceleration, any remaining unvested time-based and performance-based stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance share units shall be forfeited for no consideration.

After giving effect to the foregoing

change in control acceleration, any remaining unvested time-based and performance-based stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance share units shall be forfeited for no consideration.

As discussed in Note 1, Description of Business, on January 27, 2020, the Company announced that it would explore strategic alternatives for each of its businesses to unlock shareholder value.

Also on January 27, 2020, in connection with such announcement, the Company's Board of Directors determined that any outstanding awards under the 2007 Plan and the 2013 Plan that are held by a participant at the time that such participant is terminated without cause as of and following January 27, 2020 and before a divestiture, sale, spin-off, or any other similar corporate transaction involving the participant's employing entity will receive the same treatment that such awards would have received upon a qualifying termination on or following a change in control ( i.e., accelerated vesting of unvested equity awards in accordance with the terms of such awards).

Also on January 27, 2020, in connection with such announcement, the Company's Board of Directors determined that, during the strategic alternatives process, any outstanding awards held by a participant at the time that such participant is terminated without cause as of and following January 27, 2020 and before a divestiture, sale, spin-off, or any other similar corporate transaction involving the participant's employing entity will receive the same treatment that such awards would have received upon a qualifying termination on or following a change in control ( i.e., accelerated vesting of unvested equity awards in accordance with the terms of such awards).

The strategic alternatives process ended in April 2022.

Stock Options Under 2013 Plan

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There were no stock options granted in 2022, 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.

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and (iii) extends the term of the 2013 Plan to June 18, 2027, the day before the 10th anniversary of the date of adoption of the amendment.

On June 19, 2017, the holder of the majority of the voting power of the Company's outstanding stock (the Majority Holder) approved by written consent the amended and restated 2013 Plan and it became effective.

Stock Option Activity for 2007 and 2013 Plans

On June 19, 2017, the holder of the majority of the voting power of the Company's outstanding stock at the time approved by written consent the amended and restated 2013 Plan and it became effective.

Stock Option Activity

The following tables summarize the stock option activity and the assumptions used to record the related share-based compensation expense for the years ended December 31, 2022, 2021 and 2020:

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36.40 % - 58.84 %

$ 8.79 - $ 10.30

1,655 1.53 1,655 1.53 1.45 % - 2.34 %

35.20 % - 58.84 %

$ 15.27 - $ 24.33

94 0.44 94 0.44 0.76 % - 2.35 %

39.38 %- 53.80 %

Year Ended December 31, 2021

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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 %

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

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.

As noted above, no stock options were granted in 2022, 2021 or 2020.

As of December 31, 2022, Laureate had no unrecognized share-based compensation costs related to stock options outstanding.

Non-Vested Restricted Stock and Restricted Stock Units

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Non-vested at December 31 660 12.92 691 14.82 1,000 15.81

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 .

Restricted stock units granted under the 2013 Plan during the years ended December 31, 2022, 2021 and 2020 consisted of time-based restricted stock units (RSU) and performance-based restricted stock units (PSU) with vesting periods over three years .

PSUs are eligible to vest annually upon the Board's determination that the annual performance targets are met.

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Other Stockholders' Equity Transactions

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.

Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.

In September 2019, Wengen converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 15,000 shares of Class A common stock in a secondary offering at a price of $ 16.85 per share, prior to underwriting discounts and commissions.

Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.

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.

Effective October 29, 2021, each share of Company Class A com mon 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 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 common stock for a total purchase price of $ 29,203 and reached the total authorized limit of $ 300,000 .

On November 17, 2022, the Company entered into an underwriting agreement by and among the Company, KKR 2006 Fund (Overseas), Limited Partnership (KKR Overseas) and KKR Partners II (International), L.P.

(together with KKR Overseas, the Selling Stockholders or KKR), and Goldman Sachs & Co.

LLC, as representative of the several underwriters named therein, relating to an underwritten offering (the Secondary Offering) of 32,842 shares of the Company’s common stock, par value $ 0.004 per share.

On November 22, 2022, the Secondary Offering was completed at a price of $ 9.40875 per share.

The Selling Stockholders received all of the net proceeds from this offering and no shares of common stock were sold by the Company.

Stock Repurchases

Repurchases Pursuant to an Authorized Repurchase Program

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.

Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.

On April 30, 2021, the Company’s Board of Directors approved an increase of the authorization by $ 200,000 ;

on December 14, 2021, the Company’s Board of Directors approved an increase of the authorization by $ 100,000 , and on March 14, 2022, the Company’s Board of Directors approved an increase of the authorization by $ 50,000 , for a total authorization (including the above authorized repurchases) of up to $ 650,000 of the Company’s common stock.

The Company’s repurchases could be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act.

Repurchases could be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

During the third quarter of 2022, the Company's repurchases reached the total authorized limit of $ 650,000 .

Repurchases Made In Connection with Secondary Offering

In connection with the Secondary Offering completed on November 22, 2022, the Company’s Board of Directors approved the Company's repurchase of 7,971 shares out of the 32,842 shares of common stock sold in the Secondary Offering, at a per share price of $ 9.40875 , for a total of approximately $ 75,000 .

2022 Special Cash Distribution

On September 14, 2022, the Company announced that its Board of Directors approved, pursuant to the previously announced adoption of a Partial Liquidation Plan related to the distribution of net proceeds from the Company’s sale of Walden e-Learning LLC (the Walden Sale), the payment of a special cash distribution (the October 2022 Distribution) equal to $ 0.83 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on September 28, 2022.

The proceeds that were distributed were attributable to the release during the third quarter of 2022 of $ 71,700 of escrowed funds from the Walden Sale, plus remaining net proceeds that had yet to be distributed.

This is anticipated to be the final distribution pursuant to the Partial Liquidation Plan.

On October 12, 2022, the Company paid approximately $ 136,600 related to the October 2022 Distribution.

In connection with the October 2022 Distribution, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans.

The exercise prices of the Company’s stock options were reduced by $ 0.83 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 0.83 per unvested stock unit, payable when such unit vests.

2022 Special Cash Dividend

On October 24, 2022, the Board of Directors of the Company approved a special cash dividend (the 2022 Special Cash Dividend) equal to $ 0.68 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on November 4, 2022.

On November 17, 2022, the Company paid approximately $ 112,000 related to the 2022 Special Cash Dividend.

In connection with the 2022 Special Cash Dividend, the Board approved certain required adjustments under the Company’s equity award compensation plans.

The exercise price of the Company’s options was reduced by $ 0.68 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 0.68 per unvested stock unit held payable when such unit vests.

2021 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.

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

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.

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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.

Gross proceeds from the sale included $ 74,000 that was initially held in escrow until it was released in 2022, as well as approximately $ 83,600 of restricted cash related to collateralized regulatory obligations associated with activities of the divested business.

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

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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.

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.

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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.

Dividend Payable

As of December 31, 2022 and 2021, the Company had recorded a dividend payable of $ 3,930 and $ 6,932 , respectively, related to the expected dividend payments remaining for the 2022 and 2021 equitable adjustments that were approved for the equity award compensation plans.

During the year ended December 31, 2022, the Company paid approximately $ 4,600 of dividends related to equivalent rights for share-based awards that vested.

Derivative Instruments

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

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

Historically, 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.

In addition, we occasionally enter into foreign exchange forward contracts to reduce the impact of other non-functional currency-denominated receivables and payables.

In addition, we occasionally entered into foreign exchange forward contracts to reduce the impact of other non-functional currency-denominated receivables and payables.

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

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Upon early termination of an effective interest rate swap designated as a cash flow hedge, unrealized gains or losses are deferred in our Consolidated Balance Sheets as a component of AOCI and are amortized as an adjustment to Interest expense over the period during which the hedged forecasted transaction affects earnings.

For derivatives that are both designated and effective as net investment hedges, gains or losses associated with the change in fair value of the derivatives are recognized on our Consolidated Balance Sheets as a component of AOCI.

The reported fair values of our derivatives, which are classified in Derivative instruments on our Consolidated Balance Sheets, were as follows:

December 31, 2021 December 31, 2020

Derivatives not designated as hedging instruments:

Current liabilities:

Cross currency swaps $ — $ 17,680

Long-term liabilities:

Cross currency swaps — 8,144

Total derivative instrument assets $ — $ —

Total derivative instrument liabilities $ — $ 25,824

Derivatives Designated as Hedging Instruments

Net Investment Hedge - Cross Currency Swaps

In December 2017, Laureate entered into two EUR-USD cross currency swaps (net investment hedges) to hedge the foreign currency exchange volatility on operations of our Euro functional currency subsidiaries and better match our cash flows with the currencies in which our debt obligations are denominated.

Both swaps had an effective date of December 22, 2017 and a maturity date of November 2, 2020, and were designated at inception as effective net investment hedges.

In April 2019, the Company terminated both EUR-USD cross currency swaps for a net settlement received of $ 7,679 , which is included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

The terms of the swaps specified that at maturity on the first swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $ 59,210 at an implied exchange rate of 1.1842 and at maturity on the second swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $ 59,360 at an implied exchange rate of 1.1872 .

Semiannually until maturity, Laureate was obligated to pay 5.63 % and receive 8.25 % on EUR 50,000 and USD $ 59,210 , respectively, on the first swap and pay 5.6675 % and receive 8.25 % on EUR 50,000 and USD $ 59,360 , respectively, on the second swap.

The swaps were determined to be 100 % effective;

therefore, the amount of gain or loss recognized in income on the ineffective portion of derivative instruments designated as hedging instruments was $ 0 .

The accumulated gain recognized in AOCI will be deferred from earnings until the sale or liquidation of the hedged investee.

Cash Flow Hedge - 2024 Term Loan Interest Rate Swaps

In May 2017, Laureate entered into, and designated as cash flow hedges, four pay-fixed, receive-floating amortizing interest rate swaps with notional amounts of $ 100,000 , $ 100,000 , $ 200,000 and $ 300,000 , respectively.

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.

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 .

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.

The accelerated amounts were a gain of approximately $ 9,800 and were recorded as a decrease to Interest expense.

Prior to settlement of the swaps, they were determined to be 100 % effective;

therefore, the amount of gain or loss recognized in income on the ineffective portion was $ 0 .

The table below shows the total recorded unrealized (loss) gain in Comprehensive income for the derivatives designated as hedging instruments.

The impact of these derivative instruments on Comprehensive income, Interest expense and AOCI for the years ended December 31, 2021, 2020 and 2019 were as follows:

(Loss) Gain Recognized in Comprehensive Income (Effective Portion) Income Statement Location Gain Reclassified

from AOCI to Income

(Effective Portion) Total Consolidated Interest Expense

2021 2020 2019 2021 2020 2019 2021 2020 2019

Cash flow hedge

Interest rate swaps $ — $ — $ ( 11,818 ) Interest expense $ — $ — $ 11,818

Net investment hedge

Cross currency swaps — — 3,868 N/A — — —

Total $ — $ — $ ( 7,950 ) $ — $ — $ 11,818 $ ( 46,275 ) $ ( 100,894 ) $ ( 125,042 )

Laureate did not hold any derivatives as of December 31, 2022 and December 31, 2021.

Derivatives Not Designated as Hedging Instruments

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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.

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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 settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2020.

This amount is included in Loss on derivatives, net on the Consolidated Statement of Operations for the year ended December 31, 2020.

This swap was not designated as a hedge for accounting purposes.

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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 settlement of derivative contracts on the Consolidated Statement of Cash Flows for the year ended December 31, 2020.

This amount is included in Loss on derivatives, net on the Consolidated Statements of Operations for the year ended December 31, 2020.

This swap was not designated as a hedge for accounting purposes.

EUR to USD Foreign Currency Swaps - Spain and Portugal

In December 2018, Laureate entered into two EUR-to-USD swap agreements in connection with the signing of the sale agreement for the subsidiaries in Spain and Portugal.

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

The first swap was deal contingent, with the settlement date occurring on the second business day following the completion of the sale.

On the settlement date, Laureate delivered the notional amount of EUR 275,000 and received USD $ 314,573 at a rate of exchange of 1.1439 , which resulted in a realized gain of $ 5,088 .

The second swap was a put/call option with a maturity date of April 8, 2019, where Laureate could put the notional amount of EUR 275,000 and call the USD amount of $ 310,750 at an exchange rate of 1.13 .

Based on expected timing of the sale transaction, the swap was terminated on April 2, 2019, resulting in a payment to the counterparty of $ 980 that included a deferred premium payment net of proceeds received.

The realized gain of $ 5,088 and the payment of $ 980 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

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 .

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 .

The realized gain of $ 1,644 and the realized loss of $ 565 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on the Consolidated Statement of Cash Flows for the year ended December 31, 2019.

These swaps were not designated as hedges for accounting purposes.

CLP to Unidad de Fomento (UF) Cross Currency and Interest Rate Swaps

The cross currency and interest rate swap agreements are intended to provide a better correlation between our debt obligations and operating currencies.

In 2010, one of our subsidiaries in Chile entered into four cross currency and interest rate swap agreements with an aggregate notional amount of approximately $ 31,000 , and converted CLP-denominated, floating-rate debt to fixed-rate UF-denominated debt.

The UF is a Chilean inflation-adjusted unit of account.

One of the swaps was scheduled to mature on December 1, 2024, and the remaining three were scheduled to mature on July 1, 2025 (the CLP to UF cross currency and interest rate swaps);

however, during the first quarter 2019, the Company elected to settle all four swaps for a net cash payment of approximately USD $ 8,200 .

In addition, Chile also elected to repay a portion of the principal balance outstanding for certain notes payable.

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.

MXN to USD Foreign Currency Swaps

In September 2019, Laureate entered into three MXN to USD swap agreements with a combined notional amount of MXN 453,146 .

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 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.

AUD to USD Foreign Currency Swaps

In September 2019, Laureate entered into two AUD to USD swap agreements with a combined notional amount of AUD 11,000 .

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 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.

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

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Unrealized gain (loss) $ — $ 25,824 $ ( 25,354 )

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

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

Realized loss — ( 50,341 ) ( 626 )

Loss on derivatives, net $ — $ ( 24,517 ) $ ( 25,980 )

Credit Risk and Credit-Risk-Related Contingent Features

Laureate’s derivatives expose us to credit risk to the extent that the counterparty may possibly fail to perform its contractual obligation.

Derivatives expose us to credit risk to the extent that the counterparty may possibly fail to perform its contractual obligation.

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.

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As of December 31, 2022 and December 31, 2021, 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.

Laureate's agreements with its derivative counterparties typically 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, 2022 and 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:

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Foreign ( 152,931 ) ( 148,437 ) ( 72,660 )

State ( 273 ) — —

Total current ( 186,301 ) ( 196,960 ) ( 66,269 )

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Net operating loss and tax credits carryforwards $ 256,047 $ 246,405

Operating lease asset 135,365 140,500

Operating leases 132,648 135,365

Depreciation 50,444 45,702

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Allowance for doubtful accounts 6,781 8,437

Unrealized loss — 3,128

Total deferred tax assets 503,682 505,059

Deferred tax liabilities:

Operating lease liability 122,728 127,131

Operating leases 123,430 122,728

Investment in subsidiaries 77,055 74,310

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Unrealized gain 3,212 2,559

Other — 1,918

Total deferred tax liabilities 249,784 256,025

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Valuation allowance for deferred tax assets ( 291,722 ) ( 283,945 )

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.

Net deferred tax liabilities $ ( 37,824 ) $ ( 34,911 )

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, 2022, undistributed earnings from foreign subsidiaries totaled $ 595,486 .

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 $ 16,375 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 historical earnings of our foreign subsidiaries are remitted to the United States.

The amount of additional deferred tax liabilities recognized could increase if our expectations change based on future developments.

The Company has $ 69,700 of deferred tax asset for US state net operating loss carryforwards that expire from 2023 to 2042 and $ 2,900 of deferred tax asset for US state net operating loss carryforwards that do not expire.

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For the years ended December 31, 2022 2021 2020

Tax benefit at the United States statutory rate $ 28,877 $ 94,676 $ 19,566

Tax (expense) benefit at the United States statutory rate $ ( 51,628 ) $ 28,877 $ 94,676

Permanent differences ( 38,228 ) ( 8,217 ) ( 24,184 )

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

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 )

State income tax benefit (expense), net of federal tax effect 669 ( 36,782 ) 36,343

Tax effect of foreign income taxed at higher rate ( 40,579 ) ( 16,665 ) ( 5,534 )

Change in valuation allowance ( 11,241 ) 17,642 3,241

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Total income tax (expense) benefit $ ( 185,391 ) $ ( 145,573 ) $ 130,069

Included within permanent differences in the 2022 rate reconciliation was approximately $ 7,700 of tax expense from stock option shortfalls, $ 13,700 of non-deductible scholarship expenses, and $ 4,200 of taxable income related to intercompany dividends, as well as $ 11,200 of expense for a change in estimate related to unrealized foreign currency exchange that is fully offset by a corresponding increase in the valuation allowance.

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

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Laureate records interest and penalties related to uncertain tax positions as a component of Income tax expense.

During the years ended December 31, 2021, 2020 and 2019, Laureate recognized interest and penalties related to income taxes of $ 6,182 , $ 1,402 , and $ 2,587 , respectively.

Laureate had $ 14,527 and $ 14,731 of accrued interest and penalties at December 31, 2021 and 2020, respectively.

During the years ended December 31, 2021, 2020 and 2019, Laureate derecognized $ 12,661 , $ 4,458 , and $ 6,920 , respectively, of previously accrued interest and penalties.

During the years ended December 31, 2022, 2021 and 2020, Laureate recognized net interest and penalties related to income taxes of $ 6,828 , $( 6,479 ), and $( 3,056 ), respectively.

L aureate had $ 21,355 and $ 14,527 of accrued interest and penalties at December 31, 2022 and 2021, respectively.

During the year ended December 31, 2022, the Company recognized approximately $ 32,500 of income tax reserves related to the application of the high-tax exception to global intangible low-taxed income.

Approximately $ 143,665 of unrecognized tax benefits, if recognized, will affect the effective income tax rate.

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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 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 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.

In October 2015, the STA issued a final assessment to ICE for the 2008 through 2010 period for approximately EUR 17,187 ($ 21,000 at December 31, 2021), including interest, for those three years.

In order to continue the appeals process, we issued cash-collateralized letters of credit for the 2008 to 2010 period assessment amount, plus interest and surcharges.

During the second quarter of 2015, the Company reassessed its position regarding the ICE tax audit matters as a result of recent adverse decisions from the Spanish Supreme Court and the Spanish National Court on cases for taxpayers with similar facts and determined that it could no longer support a more-likely-than-not position.

As a result, during 2015, the Company recorded a provision totaling EUR 37,610 (approximately $ 42,100 at that date).

The Company plans to continue the appeals process for the periods already audited and assessed.

During the second quarter of 2016, we were notified by the STA that tax audits of the Spanish subsidiaries were also being initiated for 2011 and 2012, and in July 2017 the tax audit was extended to include 2013.

Also, during the second quarter of 2016, the Regional Administrative Court issued a decision against the Company on its appeal.

The Company has further appealed at the Highest Administrative Court level, which appeal was rejected.

The Company has appealed both decisions to the National Court.

In the first quarter of 2018, the Company made payments to the Spanish Tax Authorities (STA) totaling approximately EUR 29,600 (approximately $ 36,800 at the time of payment) in order to reduce the amount of future interest that could be incurred as the appeals process continues.

The payments were made using the restricted cash that collateralized the letters of credit and reduced the liability that had been recorded for this income tax contingency.

In October of 2018, the STA issued a final assessment to ICE for the 2011 through 2013 period totaling approximately EUR 4,100 (approximately $ 5,000 at December 31, 2021), including interest.

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

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 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.

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

Statutes of other major jurisdictions are open back to 2011 for Mexico, 2009 for Peru and 2016 for the Netherlands..

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.

Inflation Reduction Act of 2022

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022, which implemented a 15% minimum tax on book income of certain large corporations, a 1% excise tax on stock repurchases and tax incentives to promote clean energy, among other provisions.

The Company does not believe that this legislation will have a material impact on the financial statements and will continue to monitor regulatory developments to assess potential impacts to the Company.

OECD Proposals

The Organization for Economic Co-operation and Development (OECD) has proposed changes to numerous long-standing tax principles.

These proposals, if finalized and adopted by the associated countries, will likely increase tax uncertainty, and may adversely affect our provision for income taxes.

The Company will continue to monitor regulatory developments to assess potential impacts to the Company.

Earnings (Loss) Per Share

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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.

Diluted EPS reflects the potential dilution that would occur if share-based compensation awards, contingently issuable shares, and convertible securities were exercised or converted into common stock.

To calculate the diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock, restricted stock units, and other share-based compensation arrangements determined using the treasury stock method, and convertible securities using the if-converted method.

Diluted EPS reflects the potential dilution that would occur if share-based compensation awards were exercised or converted into common stock.

The following tables summarize the computations of basic and diluted earnings per share:

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

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

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

Loss from continuing operations attributable to Laureate Education, Inc.

Income (loss) from continuing operations $ 60,718 $ ( 283,080 ) $ ( 320,598 )

Net loss (income) attributable to noncontrolling interests 595 ( 11,839 ) 17

Income (loss) from continuing operations attributable to Laureate Education, Inc.

61,313 ( 294,919 ) ( 320,581 )

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

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

Net income (loss) from continuing operations available to common stockholders for basic and diluted earnings per share 61,313 ( 295,007 ) ( 320,432 )

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

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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 and diluted earnings (loss) per share:

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

Basic weighted average shares outstanding 167,670 189,692 209,710

Effect of dilutive stock options 310 — —

Effect of dilutive restricted stock units 288 — —

Diluted weighted average shares outstanding 168,268 189,692 209,710

Basic earnings (loss) per share:

Income (loss) from continuing operations $ 0.37 $ ( 1.56 ) $ ( 1.53 )

Income (loss) from discontinued operations 0.05 2.57 ( 1.40 )

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

Basic earnings (loss) per share $ 0.42 $ 1.01 $ ( 2.93 )

Diluted earnings (loss) per share:

Income (loss) from continuing operations $ 0.36 $ ( 1.56 ) $ ( 1.53 )

Income (loss) from discontinued operations 0.05 2.57 ( 1.40 )

Diluted earnings (loss) per share $ 0.41 $ 1.01 $ ( 2.93 )

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:

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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.

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

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, 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.

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

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

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

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.

The plan participants received a distribution payout of their account balances in April 2022 and therefore there were no plan assets or liabilities remaining as of December 31, 2022.

As of December 31, 2021, plan assets included in Other assets in our Consolidated Balance Sheet were $ 1,924 and the plan liabilities reported in our Consolidated Balance Sheet were $ 5,104 .

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

Supplemental Employment Retention Agreement (SERA)

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At the inception of the plan, Laureate purchased annuities which provided funds for the SERA obligations until the former executive's death, at which point proceeds from corporate-owned life insurance policies were received and will be used to fund the future SERA obligations.

As of December 31, 2021 and 2020, the total SERA assets were $ 9,539 and $ 11,037 , respectively, which were recorded on our Consolidated Balance Sheets in Restricted cash at December 31, 2021 and 2020.

As of December 31, 2022 and 2021, the total SERA assets were $ 8,161 and $ 9,539 , respectively, which were recorded on our Consolidated Balance Sheets in Restricted cash.

As of December 31, 2022 and 2021, the total SERA liabilities recorded in our Consolidated Balance Sheets were $ 11,879 and $ 13,396 , respectively, of which $ 1,500 each year was recorded in Accrued compensation and benefits, and $ 10,379 and $ 11,896 , respectively, was recorded in Deferred compensation.

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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.

Mexican Regulation – COVID-19 Update

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

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

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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

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date.

Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

• Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2 – Observable inputs other than quoted prices that are either directly or indirectly observable for the asset or liability

• Level 3 – Unobservable inputs that are supported by little or no market activity

These levels are not necessarily an indication of the risk of liquidity associated with the financial assets or liabilities disclosed.

In instances where the determination of fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety, as required under ASC 820-10, "Fair Value Measurement." Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Derivative Instruments

Laureate uses derivative instruments as economic hedges for bank debt, foreign exchange fluctuations and interest rate risk.

Their values are derived using valuation models commonly used for derivatives.

These valuation models require a variety of inputs, including contractual terms, market prices, forward-price yield curves, notional quantities, measures of volatility and correlations of such inputs.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourself and our counterparties.

We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation.

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

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

Equity securities - preferred stock investment

In 2013, Laureate purchased approximately 1,020 shares (the Shares) of preferred stock of a private education company for $ 5,000 .

This equity security did not have a readily determinable fair value.

In June 2019, based on interest expressed by an investor to purchase the Shares, Laureate recorded this investment at its estimated fair value and recorded a non-operating gain of approximately $ 6,100 .

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 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:

Total Level 1 Level 2 Level 3

Derivative instruments $ — $ — $ — $ —

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

Other Financial Information

Accumulated Other Comprehensive Income

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.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) (AOCI) in our Consolidated Balance Sheets includes the accumulated translation adjustments arising from translation of foreign subsidiaries’ financial statements, the unrealized gain on a derivative designated as an effective net investment hedge, and the accumulated net gains or losses that are not recognized as components of net periodic benefit cost for our minimum pension liability.

The AOCI related to the net investment hedge will be deferred from earnings until the sale or liquidation of the hedged investee.

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

The components of these balances were as follows:

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Laureate periodically reviews its investment and cash repatriation strategies in order to meet our liquidity requirements in the United States.

Laureate recognized currency exchange adjustments attributable to intercompany loans that are not designated as indefinitely invested as Foreign currency exchange gain (loss), net, of $ 27,292 , $ 21,171 and $( 11,769 ) in the Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019, respectively.

Supplemental Schedule for Transactions with Noncontrolling Interest Holders

Transactions with noncontrolling interest holders had the following effects on the equity attributable to Laureate:

For the years ended December 31, 2021 2020 2019

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 income (loss) attributable to Laureate Education, Inc.

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

Laureate recognized currency exchange adjustments attributable to intercompany loans, that are not designated as indefinitely invested, of $( 27,198 ), $ 27,292 and $ 21,171 as part of Foreign currency exchange (loss) gain, net, in the Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020, respectively.

Write Off of Accounts and Notes Receivable

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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