What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 136 added, 98 removed, 482 unchanged (33% of the section changed)

4 unchanged sentences

IN THOUSANDS, except per share amounts

For the three months ended June 30, 2023 2022

For the three months ended September 30, 2023 2022

(Unaudited) (Unaudited)

3 unchanged sentences

General and administrative expenses 11,772 15,321

Loss on impairment of assets 1,620 —

Operating income 58,709 56,317

1 unchanged sentence

Interest expense ( 5,169 ) ( 3,694 )

Other (expense) income, net ( 129 ) 246

Foreign currency exchange loss, net ( 32,357 ) ( 14,451 )

Other income, net 66 1,393

Foreign currency exchange gain, net 9,755 15,146

Gain on disposal of subsidiaries, net 3,260 —

Income from continuing operations before income taxes and equity in net loss of affiliates 117,818 111,418

Income from continuing operations before income taxes 69,451 71,132

Income tax expense ( 33,716 ) ( 39,280 )

Equity in net loss of affiliates, net of tax — ( 38 )

Income from continuing operations 35,735 31,852

(Loss) income from discontinued operations, net of tax of $ 0 for both periods

( 4,037 ) 4,145

Income (loss) from discontinued operations, net of tax of $ 0 for both periods

Net income 35,981 31,036

Net income attributable to noncontrolling interests ( 136 ) ( 136 )

Net loss attributable to noncontrolling interests 177 81

Net income attributable to Laureate Education, Inc.

$ 36,158 $ 31,117

Basic earnings (loss) per share:

Income from continuing operations $ 0.38 $ 0.24

(Loss) income from discontinued operations ( 0.03 ) 0.02

Basic earnings per share $ 0.35 $ 0.26

Diluted earnings (loss) per share:

Basic and diluted earnings per share:

Income from continuing operations $ 0.23 $ 0.19

(Loss) income from discontinued operations ( 0.03 ) 0.02

Diluted earnings per share $ 0.35 $ 0.25

Income (loss) from discontinued operations — —

Basic and diluted earnings per share $ 0.23 $ 0.19

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

3 unchanged sentences

IN THOUSANDS, except per share amounts

For the six months ended June 30, 2023 2022

For the nine months ended September 30, 2023 2022

(Unaudited) (Unaudited)

7 unchanged sentences

Interest expense ( 17,258 ) ( 11,589 )

Other income (expense), net 132 ( 980 )

Other income, net 198 413

Foreign currency exchange loss, net ( 51,554 ) ( 2,906 )

3 unchanged sentences

Equity in net (loss) income of affiliates, net of tax ( 3 ) 70

Income (loss) from continuing operations 33,602 ( 6,001 )

Income from continuing operations 69,337 25,851

(Loss) income from discontinued operations, net of tax of $ 0 for both periods

( 3,805 ) 4,064

Net income (loss) 29,551 ( 1,121 )

Net income 65,532 29,915

Net loss attributable to noncontrolling interests 196 414

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

Net income attributable to Laureate Education, Inc.

$ 65,728 $ 30,329

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations $ 0.21 $ ( 0.03 )

Basic and diluted earnings per share:

Income from continuing operations $ 0.44 $ 0.15

(Loss) income from discontinued operations ( 0.02 ) 0.02

4 unchanged sentences

Consolidated Statements of Comprehensive Income

For the three months ended June 30, 2023 2022

For the three months ended September 30, 2023 2022

(Unaudited) (Unaudited)

3 unchanged sentences

( 46,371 ) ( 42,161 )

Total other comprehensive income 91,915 17,972

Comprehensive income 148,228 61,531

Net comprehensive income attributable to noncontrolling interests ( 44 ) ( 139 )

Comprehensive income attributable to Laureate Education, Inc.

Minimum pension liability adjustment, net of tax of $ 0 for both periods

Total other comprehensive loss ( 46,371 ) ( 41,178 )

Comprehensive loss ( 10,390 ) ( 10,142 )

Net comprehensive loss attributable to noncontrolling interests 175 82

Comprehensive loss attributable to Laureate Education, Inc.

$ ( 10,215 ) $ ( 10,060 )

3 unchanged sentences

Consolidated Statements of Comprehensive Income

For the six months ended June 30, 2023 2022

For the nine months ended September 30, 2023 2022

(Unaudited) (Unaudited)

Net income (loss) $ 29,551 $ ( 1,121 )

Net income $ 65,532 $ 29,915

Other comprehensive income:

12 unchanged sentences

IN THOUSANDS, except per share amounts

September 30,

2023 December 31,

32 unchanged sentences

IN THOUSANDS, except per share amounts

September 30,

2023 December 31,

21 unchanged sentences

Stockholders' equity:

Preferred stock, par value $ 0.001 per share – 50,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022

Common stock, par value $ 0.004 per share – 700,000 shares authorized, 157,220 shares issued and outstanding as of June 30, 2023 and 230,779 shares issued and 157,013 shares outstanding as of December 31, 2022

Preferred stock, par value $ 0.001 per share – 50,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022

Common stock, par value $ 0.004 per share – 700,000 shares authorized, 157,367 shares issued and outstanding as of September 30, 2023 and 230,779 shares issued and 157,013 shares outstanding as of December 31, 2022

Additional paid-in capital 1,184,329 2,204,755

12 unchanged sentences

Consolidated Statements of Cash Flows

For the six months ended June 30, 2023 2022

For the nine months ended September 30, 2023 2022

Cash flows from operating activities (Unaudited) (Unaudited)

Net income (loss) $ 29,551 $ ( 1,121 )

Net income $ 65,532 $ 29,915

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

7 unchanged sentences

Deferred income taxes ( 9,537 ) 8,152

Unrealized foreign currency exchange loss 61,264 15,115

Unrealized foreign currency exchange loss (gain) 51,100 ( 2,169 )

Non-cash loss from non-income tax contingencies — 419

Other, net ( 5,751 ) 120

19 unchanged sentences

Payments to repurchase common stock — ( 207,151 )

Payments of debt issuance costs ( 1,285 ) —

Net cash used in financing activities ( 120,213 ) ( 236,505 )

33 unchanged sentences

• Recognition of revenue when, or as, we satisfy a performance obligation.

We assess collectibility on a portfolio basis prior to recording revenue.

We assess collectability on a portfolio basis prior to recording revenue.

Generally, students cannot re-enroll for the next academic session without satisfactory resolution of any past-due amounts.

2 unchanged sentences

We record refunds as a reduction of deferred revenue as applicable.

The following table shows the components of Revenues by reportable segment and as a percentage of total revenue for the three months ended June 30, 2023 and 2022:

The following table shows the components of Revenues by reportable segment and as a percentage of total revenue for the three months ended September 30, 2023 and 2022:

Mexico Peru Corporate (1)

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

The following table shows the components of Revenues by reportable segment and as a percentage of total revenue for the six months ended June 30, 2023 and 2022:

The following table shows the components of Revenues by reportable segment and as a percentage of total revenue for the nine months ended September 30, 2023 and 2022:

Mexico Peru Corporate (1)

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

Total accounts receivable from our contracts with students were $ 186,729 and $ 133,105 as of June 30, 2023 and December 31, 2022, respectively.

The increase in the contract assets balance at June 30, 2023 compared to December 31, 2022 was primarily driven by enrollment cycles.

The first and third calendar quarters generally coincide with the primary and secondary intakes for our larger institutions.

Total accounts receivable from our contracts with students were $ 159,730 and $ 133,105 as of September 30, 2023 and December 31, 2022, respectively.

The increase in the contract assets balance at September 30, 2023 compared to December 31, 2022 was primarily driven by enrollment cycles.

The first and third calendar

quarters generally coincide with the primary and secondary intakes for our larger institutions.

All contract asset amounts are classified as current.

Contract liabilities in the amount of $ 57,526 and $ 51,264 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, respectively.

The increase in the contract liability balance during the period ended June 30, 2023 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period.

Revenue recognized for the six months ended June 30, 2023 that was included in the contract liability balance at the beginning of the year was approximately $ 49,400 .

Contract liabilities in the amount of $ 81,039 and $ 51,264 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively.

The increase in the contract liability balance during the period ended September 30, 2023 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period.

Substantially all of the contract liability balance at the beginning of the year was recognized as revenue during the nine months ended September 30, 2023.

Assets Held for Sale

During the second quarter of 2023, two of the Company’s subsidiaries that operate K-12 educational programs in Mexico met the criteria for classification as held for sale under ASC 360-10-45-9, “Long-Lived Assets Classified as Held for Sale.” The sale of the K-12 campuses is intended to allow the Mexico segment to focus on its core business.

The assets and liabilities of this disposal group are recorded at the lower of their carrying values or their estimated fair values less costs to sell.

The planned sale of this disposal group does not represent a strategic shift and therefore does not qualify for presentation as a discontinued operation in the Consolidated Financial Statements.

In addition, during the third quarter of 2023, a parcel of land at one of our campuses in Mexico met the criteria for classification as held for sale under ASC 360-10-45-9.

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:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Assets Held for Sale

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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 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.

There are a number of private and

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

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

9 unchanged sentences

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

Gain on disposal of subsidiaries, net, Foreign currency exchange loss, net, Other (expense) income, net, 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.

Gain on disposal of subsidiaries, net, Foreign currency exchange loss, net, Other income, net, 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 completion of programs that began in prior periods.

8 unchanged sentences

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

For the three months ended For the six months ended

June 30, June 30,

For the three months ended For the nine months ended

September 30, September 30,

2023 2022 2023 2022

16 unchanged sentences

Interest expense ( 5,169 ) ( 3,694 ) ( 17,258 ) ( 11,589 )

Other (expense) income, net ( 129 ) 246 132 ( 980 )

Foreign currency loss, net ( 32,357 ) ( 14,451 ) ( 61,309 ) ( 18,052 )

Other income, net

66 1,393 198 413

Foreign currency gain (loss), net

9,755 15,146 ( 51,554 ) ( 2,906 )

Gain on disposal of subsidiaries, net 3,260 — 3,567 1,461

Income from continuing operations before income taxes and equity in net income of affiliates $ 69,451 $ 71,132 $ 170,719 $ 184,994

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Mexico $ 1,333,563 $ 1,220,630

2 unchanged sentences

Total assets $ 2,097,274 $ 1,972,237

The change in the net carrying amount of Goodwill from December 31, 2022 through June 30, 2023 was composed of the following items:

The change in the net carrying amount of Goodwill from December 31, 2022 through September 30, 2023 was composed of the following items:

Mexico Peru Total

1 unchanged sentence

Currency translation adjustments 56,207 658 56,865

Balance at June 30, 2023 $ 584,679 $ 74,044 $ 658,723

Balance at September 30, 2023 $ 569,197 $ 71,161 $ 640,358

Outstanding long-term debt was as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Senior long-term debt:

Senior Secured Credit Facility (stated maturity date October 7, 2024) $ 88,000 $ 100,000

Senior Secured Credit Facility (stated maturity date of September 18, 2028 as of September 30, 2023;

stated maturity date of October 7, 2024 as of December 31, 2022) $ 28,000 $ 100,000

Lines of credit — 13,778

7 unchanged sentences

Senior Secured Credit Facility

Under our 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 a maturity date of October 7, 2024.

As of June 30, 2023 and December 31, 2022, the Senior Secured Credit Facility had a total outstanding balance of $ 88,000 and $ 100,000 , respectively.

On September 18, 2023, the Company entered into an amendment of its Senior Secured Credit Facility (as defined below) (the “Third Amendment”) to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”;

as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022 and, as further amended by the Third Amendment, the “Amended Credit Agreement”).

Among other things, the Company incurred a new tranche of revolving credit loans maturing September 2028 (the “Series 2028 Tranche”).

The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.”

The Amended Credit Agreement, among other things, provides for $ 145,000 of revolving credit loans maturing October 2024 (the “Series 2024 Tranche”) and $ 155,000 of revolving credit loans under the Series 2028 Tranche for a $ 300,000 aggregate revolving credit facility (the “Revolving Credit Facility”).

As a subfacility under the Revolving Credit Facility, the Amended Credit Agreement provides for letter of credit commitments in the aggregate amount of $ 10,000 .

The Amended 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) $ 172,500 and (b) 50 % of the Company’s Consolidated EBITDA, 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 agreement, on a pro forma basis, does not exceed 2.25 to 1.00, 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.

The maturity date for the Amended Credit Agreement is September 18, 2028.

The Revolving Credit Facility bears interest at a per annum interest rate, at the option of the Company, at either the EURIBOR rate, the Term SOFR rate or the ABR rate plus an applicable margin of 2.50 % per annum, 2.25 % per annum, 2.00 % per annum or 1.75 % per annum for EURIBOR loans or 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.

As of September 30, 2023 and December 31, 2022, the Senior Secured Credit Facility had a total outstanding balance of $ 28,000 and $ 100,000 , respectively.

Estimated Fair Value of Debt

As of June 30, 2023 and December 31, 2022, the estimated fair value of our debt approximated its carrying value.

As of September 30, 2023 and December 31, 2022, the estimated fair value of our debt approximated its carrying value.

Certain Covenants

As of June 30, 2023, our Third A&R Credit Agreement contained certain negative covenants including, among others:

As of September 30, 2023, our Amended Credit Agreement contained certain negative covenants including, among others:

(1) limitations on additional indebtedness;

2 unchanged sentences

and (4) limitations on liens, guarantees, loans or investments.

The Third A&R Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, to exceed 3.50 x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter.

The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, is not greater than 4.75 x as of such date and (ii) less than 25 % of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply.

As of June 30, 2023, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant.

The Amended Credit Agreement also provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, to exceed 3.00 x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter.

The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, is not greater than 3.00 x as of such date and (ii) less than 25 % of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply.

As of September 30, 2023, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant.

In addition, indebtedness at some of our locations contain financial maintenance covenants.

We were in compliance with these covenants as of June 30, 2023.

We were in compliance with these covenants as of September 30, 2023.

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

23 unchanged sentences

Income Tax Contingencies

As of June 30, 2023 and December 31, 2022, Laureate had recorded cumulative liabilities for income tax contingencies of $ 132,552 and $ 130,323 , respectively.

As of September 30, 2023 and December 31, 2022, Laureate had recorded cumulative liabilities for income tax contingencies of $ 135,805 and $ 130,323 , respectively.

Non-Income Tax Loss Contingencies

1 unchanged sentence

Laureate intends to vigorously defend against these matters.

As of June 30, 2023 and December 31, 2022, approximately $ 12,700 and $ 11,400 , respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

As of September 30, 2023 and December 31, 2022, approximately $ 15,800 and $ 11,400 , 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.

2 unchanged sentences

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 June 30, 2023 and December 31, 2022, the amount of the guarantee was $ 7,428 and $ 7,076 , respectively.

As of September 30, 2023 and December 31, 2022, the amount of the guarantee was $ 7,141 and $ 7,076 , respectively.

Stockholders’ Equity

20 unchanged sentences

Balance at June 30, 2023 157,220 $ 629 $ 1,181,501 $ 68,814 $ ( 277,626 ) $ — $ ( 2,114 ) $ 971,204

Non-cash share-based compensation — — 1,794 — — — — 1,794

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 147 — 1,032 — — — — 1,032

Equitable adjustments to stock-based awards — — 2 — — — — 2

Net income — — — 36,158 — — ( 177 ) 35,981

Foreign currency translation adjustment, net of tax of $ 0

— — — — ( 46,373 ) — 2 ( 46,371 )

Balance at September 30, 2023 157,367 $ 629 $ 1,184,329 $ 104,972 $ ( 323,999 ) $ — $ ( 2,289 ) $ 963,642

Retirement of Treasury Stock

27 unchanged sentences

Balance at June 30, 2022 164,663 $ 922 $ 2,404,243 $ 14,735 $ ( 452,648 ) $ ( 950,410 ) $ ( 1,615 ) $ 1,015,227

Non-cash share-based compensation — — 1,849 — — — — 1,849

Purchase of treasury stock at cost ( 77 ) — — — — ( 862 ) — ( 862 )

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 63 — 199 — — — — 199

Special cash distribution accrued on outstanding common stock — — ( 136,642 ) — — — — ( 136,642 )

Equitable adjustments to stock-based awards — — ( 770 ) — — — — ( 770 )

Net income — — — 31,117 — — ( 81 ) 31,036

Foreign currency translation adjustment, net of tax of $ 0

— — — — ( 42,160 ) — ( 1 ) ( 42,161 )

Minimum pension liability adjustment, net of tax of $ 0

— — — — 983 — — 983

Balance at September 30, 2022

164,649 $ 922 $ 2,268,879 $ 45,852 $ ( 493,825 ) $ ( 951,272 ) $ ( 1,697 ) $ 868,859

2022 Special Cash Distribution

As previously disclosed in the 2022 Form 10-K, on September 14, 2022, the Company announced that its Board 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.

On October 12, 2022, the Company paid approximately $ 136,600 related to the October 2022 Distribution, which was the final distribution pursuant to the Partial Liquidation Plan.

Share-based Compensation Expense

During the six months ended June 30, 2023 and 2022, the Company recorded share-based compensation expense for restricted stock unit awards of $ 3,100 and $ 5,122 , respectively.

During the three and nine months ended September 30, 2023 and 2022, the Company recorded share-based compensation expense for restricted stock unit awards of $ 1,794 and $ 1,849 , respectively, and $ 4,894 and $ 6,971 , respectively.

Accumulated Other Comprehen sive Income (Loss)

2 unchanged sentences

The components of these balances were as follows:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Laureate Education, Inc.

6 unchanged sentences

Laureate's income tax provisions for all periods consist of federal, state and foreign income taxes.

The tax provisions for the six months ended June 30, 2023 and 2022 are based on estimated full-year effective tax rates, adjusted for discrete income tax items related specifically to the interim periods.

The tax provisions for the nine months ended September 30, 2023 and 2022 are based on estimated full-year effective tax rates, adjusted for discrete income tax items related specifically to the interim periods.

Laureate has operations in multiple countries at various statutory tax rates and other operations that are loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss.

For the six months ended June 30, 2023, the Company recognized income t ax expense of $ 67,663 , as compared to $ 119,933 in the prior year period.

Income tax expense for the six months ended June 30, 2023 was attributable to pretax income, the jurisdictional mix of earnings, and pretax losses for which the Company cannot recognize a tax benefit.

Income tax expense for the six months ended June 30, 2022 was in part driven by discrete tax expense of approximately $ 32,500 that was recorded for income tax reserves related to the application of the high-tax exception to global intangible low-taxed income.

In addition, income tax expense for the six months ended June 30, 2022 was attributable to pretax income, the jurisdictional mix of earnings and pretax losses for which the Company cannot recognize a tax benefit, the tax effect of stock options that expired unexercised, and additional valuation allowance.

For the nine months ended September 30, 2023, the Company recognized income t ax expense of $ 101,379 , as compared to $ 159,213 in the prior year period.

Income tax expense for the nine months ended September 30, 2023 was attributable to pretax income, the jurisdictional mix of earnings, and pretax losses for which the Company cannot recognize a tax benefit.

Income tax expense for the nine months ended September 30, 2022 was attributable to pretax income, the jurisdictional mix of earnings, pretax losses for which the Company cannot recognize a tax benefit, and a discrete tax expense of approximately $ 32,500 that was recorded for income tax reserves related to the application of the high-tax exception to global intangible low-taxed income.

Earnings (Loss) Per Share

3 unchanged sentences

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

For the three months ended June 30, 2023 2022

For the three months ended September 30, 2023 2022

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

Income from continuing operations $ 35,735 $ 31,852

Income attributable to noncontrolling interests ( 136 ) ( 136 )

Loss attributable to noncontrolling interests 177 81

Net income from continuing operations for basic and diluted earnings per share $ 35,912 $ 31,933

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

Net (loss) income from discontinued operations for basic and diluted earnings (loss) per share $ ( 4,037 ) $ 4,145

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

Net income (loss) from discontinued operations for basic and diluted earnings per share $ 246 $ ( 816 )

Denominator used in basic and diluted earnings per common share:

Basic weighted average shares outstanding 157,268 164,645

2 unchanged sentences

Diluted weighted average shares outstanding 157,804 165,015

Basic earnings (loss) per share:

Income from continuing operations $ 0.38 $ 0.24

(Loss) income from discontinued operations ( 0.03 ) 0.02

Basic earnings per share $ 0.35 $ 0.26

Diluted earnings (loss) per share:

Basic and diluted earnings per share:

Income from continuing operations $ 0.23 $ 0.19

(Loss) income from discontinued operations ( 0.03 ) 0.02

Diluted earnings per share $ 0.35 $ 0.25

For the six months ended June 30, 2023 2022

Income (loss) from discontinued operations — —

Basic and diluted earnings per share $ 0.23 $ 0.19

For the nine months ended September 30, 2023 2022

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

Income (loss) from continuing operations $ 33,602 $ ( 6,001 )

Income from continuing operations $ 69,337 $ 25,851

Loss attributable to noncontrolling interests 196 414

Net income (loss) from continuing operations for basic and diluted earnings (loss) per share $ 33,621 $ ( 5,668 )

Net income from continuing operations for basic and diluted earnings per share $ 69,533 $ 26,265

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

Net (loss) income from discontinued operations for basic and diluted (loss) earnings per share $ ( 4,051 ) $ 4,880

Net (loss) income from discontinued operations for basic and diluted earnings per share $ ( 3,805 ) $ 4,064

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

3 unchanged sentences

Diluted weighted average shares outstanding 157,670 170,360

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations $ 0.21 $ ( 0.03 )

Basic and diluted earnings per share:

Income from continuing operations $ 0.44 $ 0.15

(Loss) income from discontinued operations ( 0.02 ) 0.02

1 unchanged sentence

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

For the three months ended June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2023 2022 2023 2022

6 unchanged sentences

Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations.

Except as set forth below, there have been no material changes to the laws and regulations affecting our higher education institutions that are described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Except as set forth below, there have been no material changes to the laws and regulations affecting our higher education institutions that are described in our 2022 Form 10-K.

Peru Regulation

Superintendencia Nacional de Educación Superior Universitaria (“SUNEDU”), the regulatory agency that supervises university standards and quality in Peru, is currently reviewing all regulations applicable to universities, with new regulations expected to be announced during 2023.

This follows the appointment of new members to the board of SUNEDU in the first quarter of 2023 in connection with the implementation of the July 2022 law that modified SUNEDU’s board representation and authority.

3 unchanged sentences

Reconciliation of Cash and cash equivalents and Restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the June 30, 2022 balance.

The June 30, 2023 and June 30, 2022 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022:

June 30, 2023 June 30, 2022 December 31, 2022

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the September 30, 2022 balance.

The September 30, 2023 and September 30, 2022 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022:

September 30, 2023 September 30, 2022 December 31, 2022

Cash and cash equivalents $ 130,862 $ 319,039 $ 85,167

2 unchanged sentences

Restricted cash represents cash that is not immediately available for use in current operations.

Subsequent Events

Special Cash Dividend

On October 30, 2023, the Board of Directors of the Company approved the payment of a special cash dividend (the 2023 Special Dividend) equal to $ 0.70 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on November 15, 2023.

The Special Dividend is scheduled to be paid on November 30, 2023.

Based on the current number of shares outstanding, the aggregate amount of the 2023 Special Dividend is expected to be approximately $ 110,000 .

In connection with the 2023 Special Dividend, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans.

Subject to the payment of the 2023 Special Dividend, the exercise price of the Company’s options will be reduced by $ 0.70 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 0.70 per unvested stock unit held payable when such unit vests.

If all outstanding stock units vest, the aggregate amount to be paid in respect of the units will be approximately $ 700 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements