LAUREATE EDUCATION, INC. 10-K

Item 8. Financial Statements and Supplementary Data Report of Management on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. We conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based on our evaluation, we have concluded that our internal control over financial reporting was effective as of December 31, 2023. The effectiveness of our internal control over financial reporting as of December 31, 2023, has been audited by PricewaterhouseCoopers LLP (PCAOB No. 238 ), an independent registered public accounting firm, as stated in their report which appears herein. Date: February 22, 2024 /s/ EILIF SERCK-HANSSEN Eilif Serck-Hanssen President and Chief Executive Officer /s/ RICHARD M. BUSKIRK Richard M. Buskirk Senior Vice President and Chief Financial Officer 55 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Laureate Education, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Laureate Education, Inc. and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 56 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue recognition As described in Notes 2 and 3 to the consolidated financial statements, the Company’s revenue was $1,484.3 million for the year ended December 31, 2023. The Company’s revenues primarily consist of tuition and educational services revenues. Other revenues, such as revenues from student fees and other education-related activities, are less material to the overall financial results and have a tendency to trend with tuition revenues. Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration that management expects to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds and waivers. The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others, (i) testing the completeness, accuracy, and occurrence of revenue recognized for samples of revenue transactions by obtaining and inspecting source documents, such as student contracts and registration, transcripts, the universities’ academic calendar and academic catalogue, and subsequent cash receipts, where applicable; (ii) testing samples of outstanding student balances as of December 31, 2023 by obtaining and inspecting subsequent cash receipts and for balances not paid, obtaining and inspecting source documents, such as student contracts and registration and transcripts, where applicable; and (iii) testing deferred revenue, on a sample basis, by obtaining and inspecting source documents, such as student contracts and registration and the academic calendar, where applicable. /s/ PricewaterhouseCoopers LLP Baltimore, Maryland February 22, 2024 We have served as the Company’s auditor since 2007, which includes periods before the Company became subject to SEC reporting requirements. 57 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Operations IN THOUSANDS, except per share amounts For the years ended December 31, 2023 2022 2021 Revenues $ 1,484,288 $ 1,242,271 $ 1,086,701 Costs and expenses: Direct costs 1,089,781 907,365 814,490 General and administrative expenses 52,612 64,750 204,370 Loss on impairment of assets 3,073 144 72,488 Operating income (loss) 338,822 270,012 ( 4,647 ) Interest income 9,085 7,567 4,378 Interest expense ( 20,986 ) ( 16,418 ) ( 46,275 ) Other (expense) income, net ( 325 ) 770 ( 1,695 ) Foreign currency exchange (loss) gain, net ( 75,702 ) ( 17,444 ) 13,791 Gain (loss) on disposals of subsidiaries, net 3,567 1,364 ( 602 ) Loss on debt extinguishment — — ( 77,940 ) Loss on derivatives, net — — ( 24,517 ) Income (loss) from continuing operations before income taxes and equity in net income of affiliates 254,461 245,851 ( 137,507 ) Income tax expense ( 137,603 ) ( 185,391 ) ( 145,573 ) Equity in net income of affiliates, net of tax 171 258 — Income (loss) from continuing operations 117,029 60,718 ( 283,080 ) (Loss) income from discontinued operations, net of tax benefit (expense) of $ 0 , $ 508 and $( 234,326 ), respectively ( 9,762 ) 8,260 486,865 Net income 107,267 68,978 203,785 Net loss (income) attributable to noncontrolling interests 323 595 ( 11,339 ) Net income attributable to Laureate Education, Inc. $ 107,590 $ 69,573 $ 192,446 Basic earnings per share: Income (loss) from continuing operations $ 0.75 $ 0.37 $ ( 1.56 ) (Loss) income from discontinued operations ( 0.06 ) 0.05 2.57 Basic earnings per share $ 0.69 $ 0.42 $ 1.01 Diluted earnings per share: Income (loss) from continuing operations $ 0.74 $ 0.36 $ ( 1.56 ) (Loss) income from discontinued operations ( 0.06 ) 0.05 2.57 Diluted earnings per share $ 0.68 $ 0.41 $ 1.01 The accompanying notes are an integral part of these consolidated financial statements. 58 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income IN THOUSANDS For the years ended December 31, 2023 2022 2021 Net income $ 107,267 $ 68,978 $ 203,785 Other comprehensive income (loss): Foreign currency translation adjustment, net of tax of $ 0 for all years 170,201 77,233 421,972 Minimum pension liability adjustment, net of tax of $ 206 , $ 140 and $ 0 , respectively 82 560 ( 202 ) Total other comprehensive income 170,283 77,793 421,770 Comprehensive income 277,550 146,771 625,555 Net comprehensive loss (income) attributable to noncontrolling interests 320 582 ( 11,327 ) Comprehensive income attributable to Laureate Education, Inc. $ 277,870 $ 147,353 $ 614,228 The accompanying notes are an integral part of these consolidated financial statements. 59 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets IN THOUSANDS, except per share amounts December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 89,392 $ 85,167 Restricted cash 7,505 8,617 Receivables: Accounts and notes receivable 173,571 133,105 Other receivables 3,509 9,486 Allowance for doubtful accounts ( 84,967 ) ( 61,882 ) Receivables, net 92,113 80,709 Income tax receivable 15,224 32,261 Prepaid expenses and other current assets 19,284 19,445 Current assets held for sale 889 — Total current assets 224,407 226,199 Property and equipment: Land 129,229 127,154 Buildings 377,954 348,931 Furniture, equipment and software 556,134 494,004 Leasehold improvements 137,171 117,820 Construction in-progress 22,673 11,871 Accumulated depreciation and amortization ( 660,935 ) ( 576,373 ) Property and equipment, net 562,226 523,407 Operating lease right-of-use assets, net 371,611 389,565 Goodwill 661,482 583,493 Tradenames, net 169,183 151,645 Deferred costs, net 4,981 5,310 Deferred income taxes 71,426 51,941 Other assets 44,896 40,677 Long-term assets held for sale 15,404 — Total assets $ 2,125,616 $ 1,972,237 The accompanying notes are an integral part of these consolidated financial statements. 60 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets (continued) IN THOUSANDS, except per share amounts December 31, 2023 December 31, 2022 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 43,239 $ 42,842 Accrued expenses 69,464 50,563 Accrued compensation and benefits 96,652 85,215 Deferred revenue and student deposits 69,351 51,264 Current portion of operating leases 57,514 38,994 Current portion of long-term debt and finance leases 52,828 56,184 Income taxes payable 40,204 38,738 Other current liabilities 22,714 17,587 Current liabilities held for sale 1,248 — Total current liabilities 453,214 381,387 Long-term operating leases, less current portion 360,120 376,898 Long-term debt and finance leases, less current portion 112,241 175,929 Deferred compensation 9,511 10,379 Income taxes payable 140,492 131,301 Deferred income taxes 56,490 89,765 Other long-term liabilities 34,151 30,823 Long-term liabilities held for sale 10,259 — Total liabilities 1,176,478 1,196,482 Redeemable noncontrolling interests and equity 1,398 1,398 Stockholders' equity: Preferred stock, par value $ 0.001 per share – 50,000 shares authorized and no shares issued and outstanding as of December 31, 2023 and December 31, 2022 — — Common stock, par value $ 0.004 per share – 700,000 shares authorized, 157,586 shares issued and outstanding as of December 31, 2023 and 230,779 shares issued and 157,013 shares outstanding as of December 31, 2022 630 923 Additional paid-in capital 1,179,721 2,204,755 Retained earnings 41,862 39,244 Accumulated other comprehensive loss ( 272,144 ) ( 442,424 ) Treasury stock at cost ( 0 shares held at December 31, 2023 and 73,766 shares held at December 31, 2022) — ( 1,026,272 ) Total Laureate Education, Inc. stockholders' equity 950,069 776,226 Noncontrolling interests ( 2,329 ) ( 1,869 ) Total stockholders' equity 947,740 774,357 Total liabilities and stockholders' equity $ 2,125,616 $ 1,972,237 The accompanying notes are an integral part of these consolidated financial statements. 61 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity IN THOUSANDS Laureate Education, Inc. Stockholders Class A Common Stock Class B 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, 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 Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 581 2 — — 296 2 638 — — — — 642 Conversion of Class A and Class B common stock to Common Stock ( 90,497 ) ( 550 ) ( 90,792 ) ( 363 ) 181,289 913 — — — — — — Purchase of treasury stock at cost ( 25,203 ) — — — ( 974 ) — — — — ( 378,858 ) — ( 378,858 ) Special cash distributions and equitable adjustments to stock-based compensation awards — — — — — — ( 1,381,787 ) — — — — ( 1,381,787 ) Change in noncontrolling interests — — — — — — ( 181 ) — — — 271 90 Accretion of redeemable noncontrolling interests and equity — — — — — — ( 88 ) — — — — ( 88 ) Reclassification of redeemable noncontrolling interests and equity — — — — — — — — — — ( 1 ) ( 1 ) Net income — — — — — — — 192,446 — — 11,339 203,785 Foreign currency translation adjustment, net of tax of $ 0 — — — — — — — — 421,984 — ( 12 ) 421,972 Minimum pension liability adjustment, net of tax of $ 0 — — — — — — — — ( 202 ) — — ( 202 ) Balance at December 31, 2021 — $ — — $ — 180,611 $ 915 $ 2,388,783 $ 15,523 $ ( 520,204 ) $ ( 744,174 ) $ ( 1,285 ) $ 1,139,558 The accompanying notes are an integral part of these consolidated financial statements. 62 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity (continued) IN THOUSANDS Laureate Education, Inc. Stockholders 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 Balance at December 31, 2021 180,611 $ 915 $ 2,388,783 $ 15,523 $ ( 520,204 ) $ ( 744,174 ) $ ( 1,285 ) $ 1,139,558 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 Purchase of treasury stock at cost ( 25,546 ) — — — — ( 282,098 ) — ( 282,098 ) 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 ) — Reclassification of redeemable equity to non-redeemable equity — — 316 — — — — 316 Net income — — — 69,573 — — ( 595 ) 68,978 Foreign currency translation adjustment, net of tax of $ 0 — — — — 77,220 — 13 77,233 Minimum pension liability adjustment, net of tax of $ 140 — — — — 560 — — 560 Balance at December 31, 2022 157,013 $ 923 $ 2,204,755 $ 39,244 $ ( 442,424 ) $ ( 1,026,272 ) $ ( 1,869 ) $ 774,357 Non-cash stock compensation — — 7,114 — — — — 7,114 Exercise of stock options and vesting of restricted stock and restricted stock units, net of shares withheld to satisfy tax withholding 573 2 ( 270 ) — — — — ( 268 ) Retirement of treasury stock ( 295 ) ( 1,025,977 ) — — 1,026,272 — — Special cash dividend and equitable adjustments to stock-based compensation awards — — ( 5,917 ) ( 104,972 ) — — — ( 110,889 ) Change in noncontrolling interests — — 16 — — — ( 140 ) ( 124 ) Net income — — — 107,590 — — ( 323 ) 107,267 Foreign currency translation adjustment, net of tax of $ 0 — — — — 170,198 — 3 170,201 Minimum pension liability adjustment, net of tax of $ 206 — — — — 82 — — 82 Balance at December 31, 2023 157,586 $ 630 $ 1,179,721 $ 41,862 $ ( 272,144 ) $ — $ ( 2,329 ) $ 947,740 The accompanying notes are an integral part of these consolidated financial statements. 63 LAUREATE EDUCATION, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows IN THOUSANDS For the years ended December 31, 2023 2022 2021 Cash flows from operating activities Net income $ 107,267 $ 68,978 $ 203,785 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 69,618 59,132 101,178 Amortization of operating lease right-of-use assets 33,235 29,394 44,078 Loss on impairment of assets 3,073 144 73,756 Loss (gain) on sales and disposal of subsidiaries, property and equipment and leases, net 9,603 ( 11,146 ) ( 609,529 ) Non-cash interest expense 1,018 1,591 6,761 Non-cash share-based compensation expense 7,114 8,776 10,172 Bad debt expense 43,733 21,972 34,370 Deferred income taxes ( 55,856 ) ( 530 ) 195,563 Unrealized foreign currency exchange loss (gain) 75,488 13,907 ( 7,033 ) Non-cash loss from non-income tax contingencies — 743 12,150 Other, net 283 6,086 1,106 Loss on derivative instruments — — 24,517 Loss on debt extinguishment — — 77,999 Payments for lease settlements — — ( 46,804 ) Changes in operating assets and liabilities: Receivables ( 51,738 ) ( 27,524 ) ( 15,986 ) Prepaid expenses and other assets 2,621 4,800 ( 17,433 ) Accounts payable and accrued expenses ( 4,260 ) ( 10,464 ) ( 45,329 ) Income tax receivable/payable, net 23,298 31,330 ( 101,126 ) Deferred revenue and other liabilities ( 13,717 ) ( 18,959 ) ( 98,277 ) Net cash provided by (used in) operating activities 250,780 178,230 ( 156,082 ) Cash flows from investing activities Purchase of property and equipment ( 56,437 ) ( 52,756 ) ( 50,444 ) Expenditures for deferred costs ( 20 ) ( 312 ) ( 5,843 ) Receipts from sales of discontinued operations, net of cash sold, property and equipment 4,539 83,414 2,150,820 Settlement of derivatives related to sale of discontinued operations and net investment hedge — — ( 50,341 ) Net cash (used in) provided by investing activities ( 51,918 ) 30,346 2,044,192 Cash flows from financing activities Proceeds from issuance of long-term debt, net of original issue discount 153,772 496,253 46,493 Payments on long-term debt ( 243,438 ) ( 433,705 ) ( 942,030 ) Payments to purchase noncontrolling interests ( 123 ) — — Payments of special dividends, special cash distributions, and dividend equivalent rights ( 112,478 ) ( 253,188 ) ( 1,374,855 ) Proceeds from exercise of stock options 2,308 13,216 3,411 Payments to repurchase common stock — ( 282,151 ) ( 380,505 ) Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options ( 623 ) ( 1,994 ) ( 2,769 ) Payment of debt issuance costs ( 1,306 ) — ( 32,980 ) Net cash used in financing activities ( 201,888 ) ( 461,569 ) ( 2,683,235 ) Effects of exchange rate changes on Cash and cash equivalents and Restricted cash 6,641 1,202 ( 14,724 ) Change in cash included in current assets held for sale ( 502 ) — 288,126 Net change in Cash and cash equivalents and Restricted cash 3,113 ( 251,791 ) ( 521,723 ) Cash and cash equivalents and Restricted cash at beginning of period 93,784 345,575 867,298 Cash and cash equivalents and Restricted cash at end of period $ 96,897 $ 93,784 $ 345,575 The accompanying notes are an integral part of these consolidated financial statements. 64 Laureate Education, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Dollars and shares in thousands) Note 1. Description of Business Laureate Education, Inc. and subsidiaries (hereinafter Laureate, we, us, our, or the Company) provide higher education programs and services to students through licensed universities and higher education institutions (institutions). Laureate's programs are provided through institutions that are campus-based and through electronically distributed educational programs (online). We are domiciled in Delaware as a public benefit corporation, a demonstration of our long-term commitment to our mission to benefit our students and society. The Company completed its initial public offering (IPO) on February 6, 2017, and its shares are listed on the Nasdaq Global Select Market under the symbol “LAUR.” Discontinued Operations 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. Unless indicated otherwise, the information in the footnotes to the Consolidated Financial Statements relates to continuing operations. Note 2. Significant Accounting Policies The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (GAAP) requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Principles of Consolidation General Our Consolidated Financial Statements include all accounts of Laureate and our majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Noncontrolling Interests A noncontrolling interest is the portion of a subsidiary that is not attributable to us either directly or indirectly. A noncontrolling interest can also be referred to as a minority interest. We recognize noncontrolling interest holders’ share of equity and net income or loss separately in Noncontrolling interests in the Consolidated Balance Sheets and Net loss (income) attributable to noncontrolling interests in the Consolidated Statements of Operations. Foreign Currency Translation and Transaction Gains and Losses The United States Dollar (USD) is the reporting currency of Laureate. Our subsidiaries’ financial statements are maintained in their functional currencies. The functional currency of each of our foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into USD using the exchange rates applicable to the dates of the financial statements. 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. Equity accounts are translated at historical exchange rates. The effects of these translation adjustments 65 are reported as a component of Accumulated other comprehensive income (loss) included in the Consolidated Statements of Stockholders’ Equity. In the past, Laureate has had certain intercompany loans that were deemed to have the characteristics of a long-term investment. That is, the settlement of the intercompany loan was not planned or anticipated in the foreseeable future. Transaction gains and losses related to these types of loans were recorded as a component of Accumulated other comprehensive income (loss) included in the Consolidated Statements of Stockholders’ Equity. Transaction gains and losses related to all other intercompany loans are included in Foreign currency exchange gain (loss), net in the Consolidated Statements of Operations. For any transaction that is in a currency different from the entity’s functional currency, Laureate records a gain or loss based on the difference between the exchange rate at the transaction date and the exchange rate at the transaction settlement date (or rate at period end, if unsettled) as Foreign currency exchange gain (loss), net in the Consolidated Statements of Operations. Cash and Cash Equivalents Laureate considers all highly liquid investments that are purchased with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash includes cash equivalents held as assets for a supplemental employment retention agreement for a former executive. In addition, Laureate may at times have restricted cash in escrow or otherwise have cash that is not available for use in current operations. Financial Instruments 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. Accounts and Notes Receivable We recognize student receivables when an academic session begins, although students generally enroll in courses prior to the start of the academic session. Receivables are recognized only to the extent that it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the goods and services that will be transferred to the student. Occasionally, certain of our institutions have sold certain student receivables to local financial institutions without recourse. These transactions were deemed sales of receivables and the receivables were derecognized from our Consolidated Balance Sheets. Allowance for Doubtful Accounts Receivables are deemed to be uncollectible when they have been outstanding for two years , or earlier when collection efforts have ceased, at which time they are written off. Prior to that, Laureate records an allowance for doubtful accounts to reduce our receivables to their net realizable value. Our allowance estimation methodology is based on the age of the receivables, the status of past-due amounts, historical collection trends, current economic conditions and student enrollment status. In the event that current collection trends differ from historical trends, an adjustment is made to the allowance account and bad debt expense. 66 The reconciliations of the beginning and ending balances of the Allowance for doubtful accounts were as follows: For the years ended December 31, 2023 2022 2021 Balance at beginning of period $ 61,882 $ 62,226 $ 76,694 Additions: charges to bad debt expense 43,733 21,972 21,302 Deductions (a) ( 20,648 ) ( 22,316 ) ( 35,770 ) Balance at end of period $ 84,967 $ 61,882 $ 62,226 (a) Deductions include accounts receivable written off against the allowance (net of recoveries) and foreign currency translation. Property and Equipment, and Leased Assets Property and equipment includes land, buildings, furniture, equipment, software, library books, leasehold improvements, and construction in-progress. We record property and equipment at cost less accumulated depreciation and amortization. Software that is developed for internal use is classified within the line item titled Furniture, equipment and software in our Consolidated Balance Sheets. Repairs and maintenance costs are expensed as incurred. Assets under construction are recorded in Construction in-progress until they are available for use. Interest is capitalized as a component of the cost of projects during the construction period. We conduct a significant portion of our operations at leased facilities, including many of Laureate’s higher education facilities and other office locations. Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease. For operating leases, right-of-use (ROU) assets and lease liabilities are recognized at the commencement date of the lease based on the estimated present value of lease payments over the lease term. For finance leases, we initially record the assets and lease liabilities at the present value of the future minimum lease payments. As most of the Company’s leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The significant assumption used in estimating the present value of the lease payments is the incremental borrowing rate. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements, including structural improvements, are amortized using the straight-line method over the lesser of the estimated useful life of the asset or the lease term, including reasonably assured renewals or purchase options that are considered likely to be exercised. Laureate includes the amortization of assets recorded under finance leases within depreciation expense. Assets under finance leases are typically amortized over the related lease term using the straight-line method. We recognize operating lease rent expense on a straight-line basis over the lease term. Depreciation and amortization periods are as follows: Buildings 10 - 50 years Furniture, equipment and software 2 - 10 years Leasehold improvements 2 - 25 years Direct and Deferred Costs 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 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, 2023 and 2022, the unamortized balances of contract costs were $ 4,527 and $ 3,855 , respectively. 67 Debt Issuance Costs Debt issuance costs were paid as a result of certain debt transactions and are presented as a deduction from debt. These debt issuance costs are amortized over the term of the associated debt instruments. The amortization expense is recognized as a component of Interest expense in the Consolidated Statements of Operations. As of December 31, 2023 and 2022, the unamortized balances of deferred financing costs were $ 2,372 and $ 2,060 , respectively. Goodwill, Other Intangible Assets and Long-lived Assets Goodwill 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. Goodwill is impaired when the carrying amount of a reporting unit’s goodwill exceeds its implied fair value. A reporting unit is defined as a component of an operating segment for which discrete financial information is available and regularly reviewed by management of the segment. On January 1, 2020, the Company adopted Accounting Standards Update (ASU) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. This ASU requires entities to calculate goodwill impairment as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Under the updated guidance, the Company continues to have the option of first performing a qualitative goodwill impairment assessment (i.e., step zero) in order to determine if a quantitative impairment test is necessary. Based on the qualitative assessment, if we determine that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, the quantitative impairment test is not required. If we do not perform the qualitative assessment for a reporting unit or determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value-based test is performed. We estimate the fair value of each reporting unit, and, if the carrying amount of the reporting unit is less than the reporting unit’s estimated fair value, then there is no goodwill impairment. If the carrying amount of the reporting unit exceeds its estimated fair value, then goodwill is impaired and the difference between the reporting unit's carrying amount and its fair value is recognized as a loss on impairment of assets in the Consolidated Statements of Operations. We completed our annual impairment testing, and no impairments of goodwill were identified. Our valuation approach to estimate the fair value of a reporting unit 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. The discount rate is based on the generally accepted Weighted Average Cost of Capital methodology, and is derived using a cost of equity based on the generally accepted Capital Asset Pricing Model and a cost of debt based on the typical rate paid by market participants. The market multiples analysis utilizes multiples of business enterprise value to revenues, operating income and earnings before interest, taxes, depreciation and amortization of comparable publicly traded companies and multiples based on fair value transactions where public information is available. Significant assumptions used in estimating the fair value of each reporting unit include: (1) the revenue and profitability growth rates and (2) the discount rate. Other Intangible Assets Other intangible assets on the Consolidated Balance Sheets include acquired indefinite-lived tradenames, which are valued using the relief-from-royalty method. This method estimates the amount of royalty expense that we would expect to incur if the assets were licensed from a third party. We use publicly available information in determining certain assumptions to assist us in estimating fair value using market participant assumptions. 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 68 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. Other intangible assets also included the Laureate tradename, which in 2020 was determined to no longer have an indefinite life and was fully amortized as of December 31, 2021. Indefinite-lived tradenames are evaluated annually as of October 1st each year for impairment as well as on an interim basis if events or changes in circumstances between annual tests indicate that the asset may be impaired. The Company has the option of first performing a qualitative impairment test to determine if a quantitative impairment test is necessary. Based on the qualitative assessment, if we determine that it is more likely than not that the fair value of the indefinite-lived intangible is greater than its carrying amount, the quantitative impairment test is not required. If required, the quantitative impairment test for indefinite-lived tradenames generally requires a new determination of the fair value of the intangible asset using the relief-from-royalty method. If the fair value of the intangible asset is less than its carrying value, the intangible asset is adjusted to its new estimated fair value, and an impairment loss is recognized. Significant assumptions used in estimating the fair value of indefinite-lived tradenames include: (1) the revenue growth rates; (2) the discount rates; and (3) the estimated royalty rates. Long-lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include, but are not limited to, a significant deterioration of operating results, a change in regulatory environment, changes in business plans, or adverse changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to result from the use and eventual disposition of the assets. If the assets are determined to be impaired, the impairment recognized is the excess of the carrying amount over the fair value of the assets. Fair value is generally determined by the discounted cash flow method. The discount rate used in any estimate of discounted cash flows is the rate commensurate with a similar investment of similar risk. Derivative Instruments 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 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. For derivatives that are both designated and effective as cash flow 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 Accumulated other comprehensive income (loss) and amortized over the term of the related hedged items. 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 Accumulated other comprehensive income (loss). Revenue Recognition Our revenues primarily consist of tuition and educational service revenues. 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. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds and waivers. For further description, see Note 3, Revenue. 69 Advertising Laureate expenses advertising costs as incurred. Advertising expenses were $ 75,926 , $ 61,871 and $ 53,629 for the years ended December 31, 2023, 2022 and 2021, respectively, and are recorded in Direct costs in our Consolidated Statements of Operations. Share-based Compensation Share-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.” Laureate recognizes share-based compensation expense, less estimated forfeitures, on a straight-line basis over the requisite service period for time-based awards and on a graded-vesting basis for performance-based awards. Laureate estimates forfeitures based on historical activity, expected employee turnover, and other qualitative factors which are adjusted for changes in estimates and award vesting. All expenses for an award will be recognized by the time it becomes fully vested. We use the Black-Scholes-Merton option pricing model to calculate the fair value of stock options. This option valuation model requires the use of subjective assumptions, including the estimated fair value of the underlying common stock, the expected stock price volatility, and the expected term of the option. The estimated fair value of the underlying common stock is based on the closing price of our common stock on the grant date. Because we have only been publicly traded since February 2017, our volatility estimates for all previously granted stock options were based on an average of: (1) a peer group of companies and (2) Laureate's historical volatility. We estimate the expected term of awards to be the weighted average mid-point between the vesting date and the end of the contractual term. We used this method to estimate the expected term because we did not have sufficient historical exercise data. There were no stock options granted in 2023, 2022 and 2021. During the years ended December 31, 2023, 2022, and 2021, Laureate has granted, 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. The related compensation expense recognized is affected by our estimates of the vesting probability of these performance awards. Income Taxes Laureate records the amount of taxes payable or refundable for the current year. Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for GAAP financial reporting purposes and for income tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period in which the new rate is enacted. Where, based on the weight of all available evidence, it is more likely than not that some portion of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management's judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. 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. We earn substantially all of our income from subsidiaries located in countries outside the United States. Deferred tax liabilities have not been recognized for undistributed historical foreign earnings that would be subject to tax because management believes that the historical retained earnings will be indefinitely reinvested outside the United States under the Company's planned tax-neutral methods. Our assertion that earnings from our foreign operations will be indefinitely reinvested is supported by projected working capital and long-term capital plans in each foreign subsidiary location in which the earnings are generated. Additionally, we believe that we have the ability to indefinitely reinvest foreign earnings based on our domestic operation's cash repatriation strategies, projected cash flows, projected working capital and liquidity, and the expected availability of capital within the debt or equity markets. If our expectations change based on future developments, such that some or all of the undistributed earnings of our foreign subsidiaries may be remitted to the United States in the foreseeable future, we will be required to recognize deferred tax expense and liabilities on any amounts that we are unable to repatriate in a tax-free manner. 70 For additional information regarding income taxes and deferred tax assets and liabilities, see Note 13, Income Taxes. Contingencies Laureate accrues for contingent obligations when it is probable that a liability has been incurred and the amount or range of amounts is reasonably estimable. As new facts become known to management, the assumptions related to a contingency are reviewed and adjustments are made, as necessary. Any legal costs incurred related to contingencies are expensed as incurred. Recently Issued Accounting Standards Not Yet Adopted Accounting Standards Update (ASU) ASU No. 2023-07 (ASU 2023-07), Segment Reporting (Topic 280); Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07 in order to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories and amounts for each reportable segment. The new guidance is effective for the Company's 2024 year-end financial statements and should be adopted retrospectively unless impracticable. The guidance does not affect recognition or measurement in the Company's Consolidated Financial Statements. ASU No. 2023-09 (ASU 2023-09), Income Taxes (Topic 740); Improvements to Income Tax Disclosure In December 2023, the FASB issued ASU 2023-09, with the objective of improving the transparency of income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The new requirements will be effective for the Company's 2025 year-end financial statements and will be applied on a prospective basis with the option to apply the standard retrospectively. The guidance does not affect recognition or measurement in the Company's Consolidated Financial Statements. Note 3. Revenue Revenue Recognition Our revenues primarily consist of tuition and educational service revenues. 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. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds and waivers. Laureate's institutions have various billing and academic cycles. We determine revenue recognition through the five-step model prescribed by ASC Topic 606, Revenue from Contracts with Customers , as follows: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy a performance obligation. 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. If a student withdraws from an institution, Laureate's obligation to issue a refund depends on the refund policy at that institution and the timing of the student's withdrawal. Generally, our refund obligations are reduced over the course of the academic term. We record refunds as a reduction of deferred revenue as applicable. 71 The following table shows the components of Revenues by reportable segment and as a percentage of total net revenue for the years ended December 31, 2023, 2022 and 2021: Mexico Peru Corporate (1) Total 2023 Tuition and educational services $ 1,020,420 $ 687,642 $ — $ 1,708,062 115 % Other 133,913 68,901 ( 22 ) 202,792 14 % Gross revenue 1,154,333 756,543 ( 22 ) 1,910,854 129 % Less: Discounts / waivers / scholarships ( 371,722 ) ( 54,844 ) — ( 426,566 ) ( 29 ) % Total $ 782,611 $ 701,699 $ ( 22 ) $ 1,484,288 100 % 2022 Tuition and educational services $ 778,066 $ 613,379 $ — $ 1,391,445 112 % Other 112,294 58,087 4,091 174,472 14 % Gross revenue 890,360 671,466 4,091 1,565,917 126 % Less: Discounts / waivers / scholarships ( 276,418 ) ( 47,228 ) — ( 323,646 ) ( 26 ) % Total $ 613,942 $ 624,238 $ 4,091 $ 1,242,271 100 % 2021 Tuition and educational services $ 679,430 $ 526,987 $ — $ 1,206,417 111 % Other 92,719 48,363 9,216 150,298 14 % Gross revenue 772,149 575,350 9,216 1,356,715 125 % Less: Discounts / waivers / scholarships ( 231,720 ) ( 38,294 ) — ( 270,014 ) ( 25 ) % Total $ 540,429 $ 537,056 $ 9,216 $ 1,086,701 100 % (1) Includes the elimination of inter-segment revenues. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in Topic 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based on the relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate standalone selling price is the adjusted market assessment approach, under which we evaluate the market and estimate the price that a customer would be willing to pay for the goods and services we provide. Our performance obligations are primarily satisfied over time during the course of an academic semester or academic year. Laureate's transaction price is determined based on gross price, net of scholarships and other discounts, refunds and waivers. The majority of our revenue is derived from tuition and educational services agreements with students, and thus, is recognized over time on a weekly straight-line basis over each academic session. We view the knowledge gained by the student as the benefit which the student receives during the academic sessions. We use the output method to recognize tuition and educational services revenue as this method faithfully depicts our performance toward complete satisfaction of the performance obligation. Dormitory/residency revenues, which are included in the Other line item in the table above, are recognized over time throughout the occupancy period using the output method based on the proportional period of time elapsed which faithfully depicts our performance toward complete satisfaction of the performance obligation. We have elected the optional exemption to not disclose amounts where the performance obligation is part of a contract that has an original expected duration of one year or less. We expect to recognize substantially all revenue on these remaining performance obligations over the next 12 months. 72 Contract Balances The timing of billings, cash collections and revenue recognition results in accounts receivable (contract assets) and deferred revenue and student deposits (contract liabilities) on the Consolidated Balance Sheets. We have various billing and academic cycles and recognize student receivables when an academic session begins, although students generally enroll in courses prior to the start of the academic session. Receivables are recognized only to the extent that it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the goods and services that will be transferred to the student. We receive advance payments or deposits from our students before revenue is recognized, which are recorded as contract liabilities in deferred revenue and student deposits. Payment terms vary by university with some universities requiring payment in advance of the academic session and other universities allowing students to pay in installments over the term of the academic session. 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 $ 173,571 and $ 133,105 as of December 31, 2023 and 2022, respectively. All contract asset amounts are classified as current. Contract liabilities in the amount of $ 69,351 and $ 51,264 w ere included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively. Substantially all of the contract liability balance at the beginning of the year was recognized into revenue during the year ended December 31, 2023. Costs to Obtain a Contract Certain commissions and bonuses earned by third-party agents and our employees are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over the period of benefit which ranges from two to four years . We determined the expected period of benefit, by university, as the expected student enrollment period. As of December 31, 2023 and 2022, the asset balances were approximately $ 11,400 and $ 8,800 , respectively, and the accumulated amortization balances were approximately $ 6,900 and $ 4,900 , respectively, both of which are included in Deferred costs, net, in the accompanying Consolidated Balance Sheets. The associated operating costs of approximately $ 2,200 and $ 1,700 , respectively, were recorded in Direct costs in the accompanying Consolidated Statement of Operations for the years ended December 31, 2023 and 2022. We also pay certain commissions and bonuses where the period of benefit is one year or less . Practical Expedients We recognize the incremental costs of obtaining a contract with a student as an expense when incurred in instances where the amortization period of the asset that we would have recognized is one year or less . We have made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions and collected by the entity from our customers (e.g., sales, use, value added and excise taxes). 73 Note 4. Discontinued Operations and Assets Held for Sale Discontinued Operations As discussed in Note 1, Description of Business, the Company's principal markets are Mexico and Peru . All other markets have been divested. The divestitures were completed in 2021. In 2022 and 2023, the Company recorded certain adjustments to sale price and estimates of contingent items. Summarized operating results and cash flows of the Discontinued Operations are presented in the following table: For the years ended December 31, 2023 2022 2021 Revenues $ — $ — $ 542,979 Depreciation and amortization expense — — — Share-based compensation expense — — ( 1,277 ) Other direct costs — — ( 433,127 ) Loss on impairment of assets — — ( 1,268 ) Other non-operating expense — — ( 22,288 ) (Loss) gain on sale of discontinued operations before taxes, net ( 9,762 ) 7,752 636,172 Pretax (loss) income of discontinued operations ( 9,762 ) 7,752 721,191 Income tax benefit (expense) — 508 ( 234,326 ) (Loss) income from discontinued operations, net of tax $ ( 9,762 ) $ 8,260 $ 486,865 Operating cash flows of discontinued operations $ — $ — $ 39,544 Investing cash flows of discontinued operations $ — $ — $ ( 11,161 ) Financing cash flows of discontinued operations $ — $ — $ ( 18,054 ) 2021 Loss Recognized on Brazil Disposal Group During the first quarter of 2021, the Company recorded a loss of approximately $ 32,400 related to the Brazil disposal group, which was classified as a Discontinued Operation, in order to write down the carrying value of those assets to their estimated fair value less costs to sell as of March 31, 2021, in accordance with ASC 360-10, “Impairment and Disposal of Long-lived Assets” (ASC 360-10). The estimated fair value was based on the sale agreement for the disposal group that was announced on November 2, 2020, as previously disclosed. The sale of the Brazil disposal group closed on May 28, 2021. See Note 5, Dispositions, for more information. 74 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 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 2023, two parcels of land at campuses in Mexico met the criteria for classification as held for sale under ASC 360-10-45-9, as did a parcel of land in the United States. The assets and liabilities are recorded at the lower of their carrying values or their estimated fair values less costs to sell. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following table: December 31, 2023 December 31, 2022 Assets Held for Sale Cash and cash equivalents $ 502 $ — Receivables, net 376 — Property and equipment, net 6,310 — Operating lease right-of-use assets, net 9,094 — Other assets 11 — Total assets held for sale $ 16,293 $ — Liabilities Held for Sale Deferred revenue and student deposits $ 731 $ — Operating leases, including current portion 9,214 — Long-term debt, including current portion 859 — Other liabilities 703 — Total liabilities held for sale $ 11,507 $ — The long-term debt balance represents a finance lease for property. Note 5. Dispositions Honduras Divestiture On March 8, 2021, the Company completed the divestiture of its operations in Honduras to Fundación Nasser, a not-for-profit foundation in Honduras. In connection with the transaction, the Company transferred control of Fundaempresa, which manages Universidad Tecnológica Centroamericana (UNITEC), including Centro Universitario Tecnológico (CEUTEC). The proceeds received, net of cash sold, closing costs and a working capital adjustment that was completed during the second quarter of 2021, were approximately $ 24,000 . 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 % of the remaining escrow account after 24 months, and the remaining $ 750 after 36 months. During the third quarter of 2022 and the first quarter of 2023, the Company received the first two scheduled escrow payments of $ 1,000 and $ 250 , respectively. Receipt of Remaining Escrow Receivable from Sale of China Operations On January 25, 2018, the Company completed the sale of LEI Lie Ying Limited in China. At the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account, to be distributed to the Company pursuant to the terms and conditions of the escrow agreement. In June 2020, the Company received approximately one-half of the escrow account, and the remainder was due in January 2021. In April 2021, the Company received 168,284 Hong Kong Dollars (approximately $ 21,650 at the date of receipt), which represented payment in full for the remainder of the escrow account. Accordingly, the Company recognized a gain of approximately $ 13,600 , which is included in Income (loss) from discontinued operations, net of tax, in the Consolidated Statement of Operations for the year ended December 31, 2021. 75 Brazil Divestiture On May 28, 2021, the Company completed the sale of its operations in Brazil to Ânima Holding S.A. (Anima). 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. Additionally, the buyer assumed indebtedness, gross of cash sold, of approximately $ 121,000 . The Company recognized a pre-tax gain on the sale of approximately $ 33,000 , which included: i) the derecognition of the carrying value of the disposal group; ii) working capital and purchase price adjustments that were completed during the third and fourth quarters of 2021; and iii) contingent consideration of approximately $ 6,500 that was recognized during the fourth quarter of 2021, in accordance with the terms of the sale agreement. This gain is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the year ended December 31, 2021. Walden Divestiture On August 12, 2021, the Company closed the transaction pursuant to the Membership Interest Purchase Agreement (the Walden Purchase Agreement), dated September 11, 2020, with Adtalem Global Education Inc., a Delaware corporation (the Walden Purchaser). Pursuant to the Walden Purchase Agreement, the Company sold to the Walden Purchaser all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (Walden), and its subsidiary, Walden University, LLC, a Florida limited liability company and an indirect wholly owned subsidiary of the Company (together with Walden, the Walden Group). The cash proceeds received, net of cash sold, transaction fees, and certain closing adjustments, were approximately $ 1,403,500 . Also, at the closing date of August 12, 2021, the Walden Purchaser paid an additional $ 74,000 of the sale transaction value into an escrow account, which 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. In addition, approximately $ 83,600 of restricted cash that related to collateralized regulatory obligations was released during the fourth quarter of 2021. In 2021, the Company recognized a pre-tax gain on the sale of approximately $ 619,400 , as well as estimated tax expense of approximately $ 278,000 . The gain included the derecognition of the carrying value of Walden as well as a working capital settlement that was completed during the fourth quarter of 2021 and is included in Income (loss) from discontinued operations, net of tax in the Consolidated Statement of Operations for the year ended December 31, 2021. Under the Walden Purchase Agreement, the Company agreed to indemnify the Walden Purchaser under certain circumstances. In January 2024, the Walden Purchaser made a claim under these indemnification provisions and the Company expects to pay $ 5,500 to the Walden Purchaser. Accordingly, as of December 31, 2023, the Company has recorded a liability for this amount through loss on sale of discontinued operations, as it represents an adjustment to the sale price of the Walden Group. Collection of Note Receivable from Divestiture of Chilean Operations On September 10, 2020, the Company completed the divestiture of its operations in Chile. Under the terms of the agreement, the purchase price included a note receivable of $ 21,500 that was payable one year from the date of divestiture. In September 2021, the Company collected this receivable. Note 6. Business and Geographic Segment Information Laureate’s educational services are offered through two reportable segments: Mexico and Peru. Laureate determines its segments based on information utilized by the chief operating decision maker to allocate resources and assess performance. Our segments generate revenues by providing an education that emphasizes profession-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. Our educational offerings 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. The demand for higher education is large and growing and is fueled by several demographic and economic factors, including a growing middle class, global growth in services and technology-related industries and recognition of the significant personal and economic benefits gained by graduates of higher education institutions. The target demographics are primarily 18- to 24-year-olds in the countries in which we compete. We compete with other private higher education institutions on the basis of price, educational quality, reputation and location. We believe that we compare favorably with competitors because of our focus on quality, professional- 76 oriented curriculum and the competitive advantages provided by our network. There are a number of private and public institutions in both of the countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future. We expect competition to increase as the Mexican and Peruvian markets mature. Essentially all of our revenues were generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru. Specifics related to both of our reportable segments are discussed below. 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 nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses. Students in our Mexican institutions typically finance their own education. In Peru, private universities are increasingly providing the capacity to meet growing demand in the higher-education market. Laureate owns three institutions in Peru, with a footprint of 19 campuses. 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. Inter-segment transactions are accounted for in a similar manner as third-party transactions and are eliminated in consolidation. The Corporate amounts presented in the following tables include corporate charges that were not allocated to our reportable segments and adjustments to eliminate inter-segment items. We evaluate segment performance based on Adjusted EBITDA, which is a non-GAAP performance measure defined as Income (loss) from continuing operations before income taxes and equity in net income of affiliates, adding back the following items: Loss on derivatives, net, Loss on debt extinguishment, Gain (loss) on disposals of subsidiaries, net, Foreign currency exchange (loss) gain, 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. 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 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 previous 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. 77 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, 2023, 2022 and 2021: Mexico Peru Corporate Total 2023 Revenues $ 782,611 $ 701,699 $ ( 22 ) $ 1,484,288 Depreciation and amortization expense 39,421 27,951 2,246 69,618 Loss on impairment of assets 1,620 — 1,453 3,073 Total assets 1,396,605 559,428 169,583 2,125,616 Expenditures for long-lived assets 37,411 18,980 66 56,457 2022 Revenues $ 613,942 $ 624,238 $ 4,091 $ 1,242,271 Depreciation and amortization expense 31,369 23,953 3,810 59,132 Loss on impairment of assets 144 — — 144 Total assets 1,220,630 536,141 215,466 1,972,237 Expenditures for long-lived assets 36,045 16,777 246 53,068 2021 Revenues $ 540,429 $ 537,056 $ 9,216 $ 1,086,701 Depreciation and amortization expense 29,461 24,196 47,574 101,231 Loss on impairment of assets 9,319 — 63,169 72,488 Expenditures for long-lived assets 23,121 19,029 2,895 45,045 For the years ended December 31, 2023 2022 2021 Adjusted EBITDA of reportable segments: Mexico $ 176,954 $ 123,368 $ 95,812 Peru 286,850 266,660 245,677 Total Adjusted EBITDA of reportable segments 463,804 390,028 341,489 Reconciling items: Corporate ( 45,177 ) ( 51,151 ) ( 88,102 ) Depreciation and amortization expense ( 69,618 ) ( 59,132 ) ( 101,231 ) Loss on impairment of assets ( 3,073 ) ( 144 ) ( 72,488 ) Share-based compensation expense ( 7,114 ) ( 8,776 ) ( 8,895 ) EiP expenses — ( 813 ) ( 75,420 ) Operating income (loss) 338,822 270,012 ( 4,647 ) Interest income 9,085 7,567 4,378 Interest expense ( 20,986 ) ( 16,418 ) ( 46,275 ) Other (expense) income, net ( 325 ) 770 ( 1,695 ) Foreign currency exchange (loss) gain, net ( 75,702 ) ( 17,444 ) 13,791 Gain (loss) on disposals of subsidiaries, net 3,567 1,364 ( 602 ) Loss on debt extinguishment — — ( 77,940 ) Loss on derivatives, net — — ( 24,517 ) Income (loss) from continuing operations before income taxes and equity in net income of affiliates $ 254,461 $ 245,851 $ ( 137,507 ) 78 Geographic Information No individual customer accounted for more than 10% of Laureate’s consolidated revenues. Revenues from customers by geographic area, primarily generated by students enrolled at institutions in those areas, were as follows: For the years ended December 31, 2023 2022 2021 External Revenues (1) Mexico $ 782,046 $ 613,623 $ 539,549 Peru 701,443 624,167 537,056 United States 799 4,481 10,096 Consolidated total $ 1,484,288 $ 1,242,271 $ 1,086,701 (1) Excludes intercompany revenues and therefore does not agree to the table above Long-lived assets are composed of Property and equipment, net. Laureate’s long-lived assets by geographic area were as follows: December 31, 2023 2022 Long-lived assets Mexico $ 260,053 $ 225,346 Peru 300,655 289,482 United States 1,518 8,579 Consolidated total $ 562,226 $ 523,407 Note 7. Goodwill and Other Intangible Assets The change in the net carrying amount of Goodwill from December 31, 2021 through December 31, 2023 was composed of the following items: Mexico Peru Total Balance at December 31, 2021 $ 479,223 $ 67,572 $ 546,795 Currency translation adjustments 33,767 2,931 36,698 Balance at December 31, 2022 $ 512,990 $ 70,503 $ 583,493 Currency translation adjustments 75,441 2,548 77,989 Balance at December 31, 2023 $ 588,431 $ 73,051 $ 661,482 Tradenames and Other Intangible Assets Amortization expense for intangible assets included only the finite-lived tradename, which was fully amortized as of December 31, 2021. Amortization expense was $ 0 , $ 0 and $ 23,069 for the years ended December 31, 2023, 2022 and 2021, respectively. 79 The following table summarizes our identifiable intangible assets as of December 31, 2023: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (Yrs) Tradenames Finite-lived tradename $ 30,652 $ ( 30,652 ) $ — — Indefinite-lived tradenames 169,183 — 169,183 — Total tradenames 199,835 ( 30,652 ) 169,183 Other intangible assets Student rosters 23,001 ( 23,001 ) — — Other 1,938 ( 1,938 ) — — Total $ 224,774 $ ( 55,591 ) $ 169,183 The following table summarizes our identifiable intangible assets as of December 31, 2022: Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period (Yrs) Tradenames Finite-lived tradename $ 30,652 $ ( 30,652 ) $ — — Indefinite-lived tradenames 151,645 — 151,645 — Total tradenames 182,297 ( 30,652 ) 151,645 Other intangible assets Student rosters 20,455 ( 20,455 ) — — Other 1,720 ( 1,720 ) — — Total $ 204,472 $ ( 52,827 ) $ 151,645 Impairment Tests The following table summarizes the Loss on impairment of assets: For the years ended December 31, 2023 2022 2021 Impairments of Goodwill $ — $ — $ — Impairments of Tradenames — — 51,437 Impairments of long-lived assets 3,073 144 21,051 Total $ 3,073 $ 144 $ 72,488 We perform annual impairment tests of our non-amortizable intangible assets, which consist of goodwill and indefinite-lived tradenames, in the fourth quarter of each year. The impairment charges discussed below were recorded to reduce the assets' carrying values to fair value. For the purposes of our annual impairment testing of the Company's goodwill, fair value measurements 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. 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 are 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 above. 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 80 information and proprietary third-party arm’s length agreements that Laureate has entered into with various licensors in determining certain assumptions to assist us in estimating fair value using market participant assumptions. 2021 Loss on Impairment of Assets Impairment of Finite-Lived Tradename (Laureate Tradename) During the first quarter of 2021, the Company recognized an impairment charge of approximately $ 51,400 on the Laureate tradename, a finite-lived intangible asset. In March 2021, the Company decided that, during 2021, it would wind down certain support functions related to the Laureate network and would no longer invest in and support the Laureate tradename beyond 2021. As a result, the Company tested the asset for impairment and estimated the fair value of the tradename asset using the relief-from-royalty method, based on the projected revenues for each business over the estimated remaining useful life of the asset. As a result of the impairment test, the Company concluded that the estimated fair value of the Laureate tradename was less than its carrying value by approximately $ 51,400 and recorded an impairment charge for that amount. The significant assumptions used in estimating the fair value included: (1) the revenue growth rates and (2) the estimated royalty rates. The inputs used were not observable to active markets and are therefore deemed “Level 3” inputs in the fair value hierarchy. The decrease in the fair value of the tradename was attributable to the shortened duration of the estimated future revenues. The remaining carrying value of the tradename asset was fully amortized as of December 31, 2021. Note 8. Debt Outstanding long-term debt was as follows: December 31, 2023 December 31, 2022 Senior long-term debt: Senior Secured Credit Facility (stated maturity date of September 18, 2028 as of December 31, 2023; stated maturity date of October 7, 2024 as of December 31, 2022) $ 59,000 $ 100,000 Other debt: Lines of credit 10,864 13,778 Notes payable and other debt 40,009 72,209 Total senior and other debt 109,873 185,987 Finance lease obligations and sale-leaseback financings 57,568 48,186 Total long-term debt and finance leases 167,441 234,173 Less: total unamortized deferred financing costs 2,372 2,060 Less: current portion of long-term debt and finance leases 52,828 56,184 Long-term debt and finance leases, less current portion $ 112,241 $ 175,929 As of December 31, 2023 , aggregate annual maturities of the senior and other debt, excluding finance lease obligations and sale-leaseback financings, were as follows: Years Ended December 31, Senior and Other Debt 2024 $ 46,086 2025 4,787 2026 — 2027 — 2028 59,000 Thereafter — Total senior and other debt $ 109,873 81 Senior Secured Credit Facility Revolving Credit Facility 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 December 31, 2023 and December 31, 2022, the Senior Secured Credit Facility had a total outstanding balance of $ 59,000 and $ 100,000 , respectively. Guarantors of the Senior Secured Credit Facility Laureate Education, Inc. is the borrower under our Senior Secured Credit Facility. All of Laureate’s required United States legal entities, excluding certain subsidiaries that the Company considers dormant based on the lack of activity, are guarantors of the Senior Secured Credit Facility, and all of the guarantors’ assets, both real and intangible, are pledged as collateral. Additionally, not more than 65 % of the shares held directly by Laureate Education, Inc. or any guarantors in non-domestic subsidiaries are pledged as collateral. Estimated Fair Value of Debt As of December 31, 2023 and December 31, 2022, the estimated fair value of our debt approximated its carrying value. Certain Covenants As of December 31, 2023, our Amended Credit Agreement contained certain negative covenants including, among others: (1) limitations on additional indebtedness; (2) limitations on dividends; (3) limitations on asset sales, including the sale of ownership interests in subsidiaries and sale-leaseback transactions; and (4) limitations on liens, guarantees, loans or investments. 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 December 31, 2023, these conditions were satisfied and, therefore, we were not subject to the leverage ratio. In addition, indebtedness at some of our locations contain financial maintenance covenants. We were in compliance with these covenants as of December 31, 2023. 82 Debt Modification and Loss on Debt Extinguishment In connection with the repayment of the Senior Notes during the year ended December 31, 2021, the Company recorded a Loss on debt extinguishment of $ 77,940 , related to the redemption premium paid and the write off of the unamortized deferred financing costs associated with the repaid debt balances. 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 $ 1,241 , $ 1,561 and $ 4,628 for the years ended December 31, 2023, 2022 and 2021, respectively. Certain unamortized debt issuance costs were written off in 2021 in connection with early repayment of debt balances and debt agreement amendments, as discussed above. As of December 31, 2023 and 2022, our unamortized debt issuance costs were $ 2,372 and $ 2,060 , respectively. Other Debt Lines of Credit Individual Laureate subsidiaries have the ability to borrow pursuant to unsecured lines of credit and similar short-term borrowing arrangements (collectively, lines of credit). The lines of credit are available for working capital purposes and enable us to borrow and repay until those lines mature. At December 31, 2023 and 2022, the aggregate outstanding balances on our lines of credit were $ 10,864 and $ 13,778 , respectively. At December 31, 2023, we had approximately $ 68,800 additional available borrowing capacity under our outstanding lines of credit. Interest rates on our lines of credit ranged from 7.63 % to 7.70 % and 8.10 % to 9.34 % at December 31, 2023 and 2022, respectively. Our weighted-average short-term borrowing rate was 7.67 % and 8.61 % at December 31, 2023 and 2022, respectively. Notes Payable Notes payable include mortgages payable that are secured by certain fixed assets. The notes payable have varying maturity dates and repayment terms through 2025. Interest rates on notes payable ranged from 5.09 % to 13.00 % and 5.09 % to 12.26 % at December 31, 2023 and 2022, respectively. In December 2017, Universidad del Valle de México (UVM Mexico) entered into an agreement with a bank for a loan of MXN 1,700,000 (approximately $ 89,000 at the time of the loan). In 2019, this loan was reassigned to Estrater, S.A. de C.V., SOFOM ENR (Estrater). In 2021, Estrater was merged into Laureate Education Mexico S de RL de CV (LEM), a wholly owned Mexican subsidiary of the Company. Consequently, the loan was reassigned to LEM. The loan matures in June 2024 and carries a variable interest rate based on the 28-day Mexican Interbanking Offer Rate (TIIE), plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement ( 13.00 % and 12.26 % as of December 31, 2023 and 2022, respectively). The current quarterly payments on the loan total MXN 76,500 ($ 4,504 at December 31, 2023), with a balloon payment of MXN 425,000 ($ 25,024 at December 31, 2023) due at maturity. As of December 31, 2023 and December 31, 2022, the outstanding balance of this loan was $ 29,528 and $ 41,416 , 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, 2023 and 2022, 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, 2023 and 2022, the outstanding balance of this loan was $ 5,835 and $ 8,246 , 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). Quarterly payments in the amount of PEN 14,438 ($ 3,921 at December 31, 2023) were due through the loan's maturity in December 2023. As of December 31, 2023 and 2022, this loan had a balance of $ 0 and $ 15,142 , respectively. 83 Note 9. Leases Laureate conducts a significant portion of its operations at leased facilities, including many of Laureate's higher education facilities and other office locations. Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease. Finance Leases Our finance lease agreements are for property and equipment. The lease assets are included within buildings as well as furniture, equipment and software and the related lease liability is included within debt and finance leases on the consolidated balance sheets. Operating Leases Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. The terms of our operating leases vary and generally contain renewal options. Certain of these operating leases provide for increasing rent over the term of the lease. Laureate also leases certain equipment under noncancellable operating leases, which are typically for terms of 60 months or less. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. As discussed in Note 2, Significant Accounting Policies, ROU assets and lease liabilities are recognized at the commencement date of the lease based on the estimated present value of lease payments over the lease term. Our variable lease payments consist of non-lease services related to the lease. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Many of our lessee agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. On occasion, Laureate has entered into sublease agreements for certain leased office space; however, the sublease income from these agreements is immaterial. Supplemental balance sheet information related to leases as of December 31, 2023 and 2022 was as follows: Leases Classification 2023 2022 Assets: Operating Operating lease right-of-use assets, net $ 371,611 $ 389,565 Finance Buildings, Furniture, equipment and software, net 47,604 41,049 Total leased assets $ 419,215 $ 430,614 Liabilities: Current Operating Current portion of operating leases $ 57,514 $ 38,994 Finance Current portion of long-term debt and finance leases 6,742 6,173 Non-current Operating Long-term operating leases, less current portion 360,120 376,898 Finance Long-term debt and finance leases, less current portion 50,826 42,013 Total lease liabilities $ 475,202 $ 464,078 Lease Term and Discount Rate 2023 2022 2021 Weighted average remaining lease terms Operating leases 8.6 years 9.4 years 9.4 years Finance leases 13.7 years 14.6 years 14.9 years Weighted average discount rate Operating leases 9.50 % 9.40 % 8.90 % Finance leases 10.70 % 9.90 % 9.60 % 84 The components of lease cost for the years ended December 31, 2023, 2022 and 2021 were as follows: Lease Cost Classification 2023 2022 2021 Operating lease cost Direct costs $ 62,904 $ 58,701 $ 70,256 Finance lease cost Amortization of leased assets Direct costs 10,130 6,821 6,732 Interest on leased assets Interest expense 5,670 3,990 4,092 Short-term lease costs Direct costs 1,242 1,055 73 Variable lease costs Direct costs 13,165 9,806 5,575 Sublease income Revenues ( 934 ) ( 425 ) ( 187 ) Total lease cost $ 92,177 $ 79,948 $ 86,541 As of December 31, 2023, maturities of lease liabilities were as follows: Maturity of Lease Liability Operating Leases Finance Leases Year 1 $ 95,007 $ 11,526 Year 2 94,267 10,612 Year 3 86,116 7,710 Year 4 73,491 6,164 Year 5 51,889 5,305 Thereafter 229,945 93,903 Total lease payments $ 630,715 $ 135,220 Less: interest and inflation ( 213,081 ) ( 77,652 ) Present value of lease liabilities $ 417,634 $ 57,568 Supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021 was as follows: Other Information 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 63,959 $ 56,540 $ 75,164 Operating cash flows used for finance leases $ 5,670 $ 3,990 $ 4,107 Financing cash flows used for finance leases $ 6,905 $ 5,136 $ 4,874 Leased assets obtained for new finance lease liabilities $ 13,034 $ 5,226 $ 1,997 Leased assets obtained for new operating lease liabilities $ 20,920 $ 12,677 $ 7,674 Corporate Office Lease Termination In March 2021, the Company exercised its one-time right under the operating lease agreement for its former corporate headquarters in Baltimore, Maryland, to terminate the lease effective June 30, 2022. In connection with the exercise of this early termination option, the Company was required to pay an early termination fee of approximately $ 1,200 , half of which was paid in March 2021. In December 2021, the Company and the landlord agreed to a termination of the lease agreement, effective December 31, 2021. In connection with this lease termination, the Company made a total payment of approximately $ 2,750 , which included the second half of the early termination fee noted above, as well as all remaining amounts owed under the lease. Kendall Lease Termination In December 2021, the Company completed a lease termination agreement with the landlord of its Kendall property in Chicago, Illinois. In connection with the lease termination agreement, the Company made a total payment of approximately $ 44,050 and recorded a loss of approximately $ 25,800 , which is included in Operating (loss) income in the Consolidated Statement of Operations for the year ended December 31, 2022. 85 Note 10. Commitments and Contingencies Contingencies Laureate is subject to legal actions arising in the ordinary course of its business. In management's opinion, we have adequate legal defenses, insurance coverage and/or accrued liabilities with respect to the eventuality of such actions. We do not believe that any settlement would have a material impact on our Consolidated Financial Statements. Income Tax Contingencies As of December 31, 2023 and 2022, Laureate has recorded cumulative liabilities for income tax contingencies of $ 140,492 and $ 130,323 , 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. Laureate intends to vigorously defend against these matters. As of December 31, 2023 and 2022, approximately $ 19,800 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. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies could be up to approximately $ 23,500 if the outcomes were unfavorable. Guarantees and Commitments 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 As of December 31, 2023, all obligations under the loan were fully repaid. During the first quarter of 2021, one of our Peruvian institutions issued a bank guarantee in order to appeal a tax assessment received related to tax audits of 2014 and 2015. As of December 31, 2023 and 2022, the amount of the guarantee was $ 7,408 and $ 7,076 , respectively. In addition, during the fourth quarter of 2023, one of our Peruvian institutions issued a bank guarantee in the amount of $ 5,323 in order to appeal a tax assessment received related to the tax audit of 2009. Note 11. Share-based Compensation and Equity Share-based compensation expense was as follows: For the years ended December 31, 2023 2022 2021 Continuing operations Stock options, net of estimated forfeitures $ — $ — $ 468 Restricted stock awards 7,114 8,776 8,427 Total continuing operations $ 7,114 $ 8,776 $ 8,895 Discontinued operations Share-based compensation expense for discontinued operations — — 1,277 Total continuing and discontinued operations $ 7,114 $ 8,776 $ 10,172 2013 Long-Term Incentive Plan On June 13, 2013, the Board approved the Laureate Education, Inc. 2013 Long-Term Incentive Plan (2013 Plan). The 2013 Plan became effective in June 2013, following approval by the stockholders of Laureate. Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, unrestricted common stock or restricted stock, unrestricted stock units or restricted stock units, and other stock-based awards, to eligible individuals on the terms and subject to the conditions set forth in the 2013 Plan. As of the effective date in June 2013, the total number of shares of common stock issuable under the 2013 Plan 86 were 7,521 . In September 2015, the Board and Shareholders approved an amendment to increase the total number of shares of common stock issuable under the 2013 Plan by 1,219 , and in December 2016, the Board and Shareholders approved an amendment to increase the total number of shares of common stock issuable under the 2013 Plan by 3,884 . Shares that are forfeited, terminated, canceled, allowed to expire unexercised, withheld to satisfy tax withholding, or repurchased are available for re-issuance. Any awards that have not vested upon termination of employment for any reason are forfeited. Holders of restricted stock shall have all of the rights of a stockholder of common stock including, without limitation, the right to vote and the right to receive dividends. However, dividends declared payable on performance-based restricted stock shall be subjected to forfeiture at least until achievement of the applicable performance target related to such shares of restricted stock. Any accrued but unpaid dividends on unvested restricted stock shall be forfeited upon termination of employment. Holders of stock units do not have any rights of a stockholder of common stock and are not entitled to receive dividends. All awards outstanding under the 2013 Plan terminate upon the liquidation, dissolution or winding up of Laureate. Stock options, stock appreciation rights and restricted stock units granted under the 2013 Plan have provisions for accelerated vesting if there is a change in control of Laureate. As defined in the 2013 Plan, a change in control means the first of the following to occur: (i) a change in ownership of Laureate or Wengen or (ii) a change in the ownership of assets of Laureate. A change in ownership of Laureate or Wengen shall occur on the date that more than 50 % of the total voting power of the capital stock of Laureate is sold or more than 50 % of the partnership interests of Wengen is sold in a single or a series of related transactions. A change in the ownership of assets of Laureate would occur if 80 % or more of the total gross fair market value of all of the assets of Laureate are sold during a 12-month period. The gross fair market value of Laureate is determined without regard to any liabilities associated with such assets. 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; (b) those performance-based stock options and stock appreciation rights that would have vested and become exercisable had Laureate achieved the performance targets in the three fiscal years ending coincident with or immediately subsequent to the effective time of such change in control, excluding the portion of awards that would have vested only pursuant to any catch-up provisions, would become fully vested and immediately exercisable; (c) those time-based restricted stock awards that would have become vested and free of forfeiture risk and lapse restriction on or prior to the third anniversary of the effective time of such change in control would become fully vested and immediately exercisable; (d) those performance-based restricted stock awards that would have vested and become free of forfeiture risk and lapse restrictions had Laureate achieved the target performance in the three fiscal years ending coincident with or immediately subsequent to the effective time of such change in control would become fully vested and immediately exercisable; (e) those time-based restricted stock units that would have become vested or earned on or prior to the third anniversary of 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; 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. 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, 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 Stock option awards under the 2013 Plan generally have a contractual term of 10 years and are granted with an exercise price equal to or greater than the fair market value of Laureate’s stock at the date of grant. These options typically vest over a period of five or three years . There were no stock options granted in 2023, 2022 and 2021. The Performance Options previously granted under the 2013 Plan are eligible for vesting based on achieving annual predetermined Equity Value performance targets or Adjusted EBITDA targets, as defined in the plan, and the continued service of the employee. 87 Compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award, which is usually the vesting period. For Time Options, expense is recognized ratably over the five-year or three-year vesting period. For Performance Options, expense is recognized under a graded expense attribution method, to the extent that it is probable that the stated annual earnings target will be achieved and options will vest for any year. We assess the probability of each option tranche vesting throughout the life of each grant. As of December 31, 2023, all outstanding stock option awards that were granted under the 2013 Plan were fully vested. Amendment to 2013 Long-Term Incentive Plan On June 19, 2017, the Board approved, subject to stockholder approval, an amendment and restatement of the 2013 Plan. Among other things, the amendment (i) increases the number of shares of common stock that may be issued pursuant to awards under the 2013 Plan to 14,714 ; (ii) adds performance metrics, the ability to grant cash awards, and annual limits on grants, intended to qualify awards as performance-based awards that are not subject to certain limits on tax deductibility of compensation payable to certain executives; 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 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, 2023, 2022 and 2021: 2023 2022 2021 Options Weighted Average Exercise Price Aggregate Intrinsic Value Options Weighted Average Exercise Price Aggregate Intrinsic Value Options Weighted Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1 559 $ 7.00 $ 1,461 2,163 $ 9.89 $ 6,098 3,428 $ 17.85 $ 159 Granted — — — — — — Exercised ( 194 ) 8.00 1,044 ( 1,510 ) 9.43 4,080 ( 583 ) 12.25 883 Forfeited or expired ( 2 ) 8.34 ( 94 ) 23.17 ( 682 ) 20.14 Outstanding at December 31 363 5.74 2,890 559 7.00 1,461 2,163 9.89 6,098 Exercisable at December 31 363 5.74 2,890 559 7.00 1,461 2,163 9.89 6,098 Vested and expected to vest 363 5.74 2,890 559 7.00 1,461 2,163 9.89 6,098 Options Outstanding Options Exercisable Assumption Range* Exercise Prices Number of Shares Weighted Average Remaining Contractual Terms (Years) Number of Shares Weighted Average Remaining Contractual Terms (Years) Risk-Free Interest Rate Expected Terms in Years Expected Volatility Year Ended December 31, 2023 $ 4.17 - $ 8.09 363 3.98 363 3.98 1.45 % - 3.05 % 3.74 - 7.12 36.40 % - 58.84 % Year Ended December 31, 2022 $ 4.87 - $ 8.79 559 3.64 559 3.64 1.45 % - 3.05 % 3.20 - 7.12 36.40 % - 58.84 % Year Ended December 31, 2021 $ 6.38 - $ 7.96 414 5.98 414 5.98 2.68 % - 3.05 % 5.54 - 5.91 38.29 % - 57.25 % $ 8.79 - $ 10.30 1,655 1.53 1,655 1.53 1.45 % - 2.34 % 3.20 - 7.12 35.20 % - 58.84 % $ 15.27 - $ 24.33 94 0.44 94 0.44 0.76 % - 2.35 % 4.16 - 6.52 39.38 % - 53.80 % * The expected dividend yield is zero for all options in all years. As noted above, no stock options were granted in 2023, 2022 or 2021. As of December 31, 2023, Laureate had no unrecognized share-based compensation costs related to stock options outstanding. 88 Non-Vested Restricted Stock and Restricted Stock Units The following table summarizes the non-vested restricted stock and restricted stock units activity for the years ended December 31, 2023, 2022 and 2021: 2023 2022 2021 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Non-vested at January 1 660 $ 12.92 691 $ 14.82 1,000 $ 15.81 Granted 712 10.99 685 12.15 818 13.98 Vested ( 519 ) 12.72 ( 698 ) 14.05 ( 822 ) 15.01 Forfeited ( 47 ) 11.51 ( 18 ) 12.37 ( 305 ) 15.32 Non-vested at December 31 806 11.43 660 12.92 691 14.82 Restricted stock units granted under the 2013 Plan during the years ended December 31, 2023, 2022 and 2021 consisted of time-based restricted stock units (RSUs) and performance-based restricted stock units (PSUs) with vesting periods over three years . PSUs are eligible to vest annually upon the Board's determination that the annual performance targets are met. The vesting percentage for PSUs is based on Laureate's attainment of a performance target or targets, provided that continued employment is required through the date the attainment of target is approved by the Compensation Committee. The fair value of the non-vested restricted stock awards in the table above is measured using the fair value of Laureate’s common stock on the date of grant or the most recent modification date, whichever is later. As of December 31, 2023, unrecognized share-based compensation expense related to non-vested restricted stock and restricted stock unit awards was $ 4,963 . Of the total unrecognized cost, $ 3,565 relates to time-based RSUs and $ 1,398 relates to PSUs. This unrecognized expense for time-based restricted stock and restricted stock units will be recognized over a weighted-average expense period of 1.3 years. Other Stockholders' Equity Transactions Effective October 29, 2021, each share of Company Class A common stock and each share of Company Class B common stock automatically converted into one share of common stock of the Company. Following the conversion, the Company has only one class of common stock outstanding. 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. On May 24, 2023, the Company’s Board of Directors approved the retirement of all outstanding shares of treasury stock, which totaled 73,766 shares. The Company recorded the purchases of treasury stock at cost as a separate component within stockholders’ equity in the Consolidated Balance Sheets. Upon retirement of treasury stock, the Company allocates the excess of the purchase price over par value to additional paid-in capital, subject to certain limitations. 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 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 89 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 . Dividends and Distributions 2023 Special 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 2023 Special Dividend was paid on November 30, 2023, for an aggregate amount of $ 110,160 . In connection with the 2023 Special Dividend, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans. Upon payment of the 2023 Special Dividend, the exercise price of the Company’s options was reduced by $ 0.70 per share, and holders of restricted and performance stock units received 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 $ 756 . 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, were distributed to the Company’s stockholders before the end of calendar year 2022. 90 On September 15, 2021, after the adoption of the Partial Liquidation Plan, the Board approved the payment of a special cash distribution (the Distribution) pursuant to the Partial Liquidation Plan equal to $ 7.01 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on October 6, 2021. The Distribution was paid on October 29, 2021, based on the number of shares outstanding on October 6, 2021. The aggregate amount of the Distribution was approximately $ 1,270,000 . 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. Accordingly, on December 3, 2021, the Company announced that its Board of Directors approved, pursuant to the previously announced Partial Liquidation Plan, the payment of a special cash distribution (the Second Distribution) equal to $ 0.58 per each share of the Company's common stock, par value $ 0.004 per share, to each holder of record on December 14, 2021. The Second Distribution was paid on December 28, 2021 and totaled approximately $ 105,000 , based on the number of shares outstanding on December 14, 2021. The amount of the Second Distribution included the restricted cash that had been released, in addition to other net proceeds from the sale of Walden e-Learning LLC that had not yet been distributed to the Company’s stockholders. In connection with the Distribution, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans. These required equitable adjustments were effective on November 1, 2021 and were recorded in the consolidated financial statements during the fourth quarter of 2021. The exercise prices of the Company’s options were reduced by $ 7.01 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 7.01 per unvested stock unit, payable when such unit vests. In connection with the Second Distribution, the Board of Directors also approved the required adjustments under the Company’s equity award compensation plans. These required equitable adjustments also were effective during the fourth quarter of 2021 and were recorded in the consolidated financial statements. The exercise prices of the Company’s options were reduced by $ 0.58 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $ 0.58 per unvested stock unit, payable when such unit vests. As of December 31, 2021, the Company had recorded a payable of $ 6,932 related to the equitable adjustments for the equity award compensation plans. Dividend Payable As of December 31, 2023 and 2022, the Company had recorded a dividend payable of $ 2,345 and $ 3,930 , respectively, related to the expected dividend payments remaining for the equitable adjustments that were approved for the equity award compensation plans. During the years ended December 31, 2023 and 2022, the Company paid approximately $ 2,318 and $ 4,600 , respectively, of dividends related to equivalent rights for share-based awards that vested. Note 12. Derivative Instruments In the normal course of business, our operations are exposed to fluctuations in foreign currency values and interest rate changes. We may seek to control a portion of these risks through a risk management program that includes the use of derivative instruments. 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 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. We generally intend to hold our derivatives until maturity. Laureate reports all derivatives at fair value. These contracts are recognized as either assets or liabilities, depending upon the derivative’s fair value. Gains or losses associated with the change in the fair value of these swaps are recognized in our Consolidated Statements of Operations on a current basis over the term of the contracts, unless designated and effective as a hedge. For swaps that are designated and effective as cash flow hedges, gains or losses associated with the change in fair value of the swaps are recognized in our Consolidated Balance Sheets as a component of Accumulated Other Comprehensive Income (AOCI) and amortized into earnings as a component of Interest expense over the term of the related hedged items. 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 91 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 and are deferred from earnings until the sale or liquidation of the hedged investee. Laureate did not hold any derivatives as of December 31, 2023 and December 31, 2022. Derivatives Not Designated as Hedging Instruments BRL to USD Foreign Currency Swaps In November 2020, in connection with the signing of the sale agreement for its Brazilian operations, Laureate entered into six BRL-to-USD swap agreements. The purpose of these swaps was to mitigate the risk of foreign currency exposure on the expected proceeds from the sale. Two of the swaps were deal contingent, with the settlement date occurring on the second business day following the completion of the sale. On the settlement date, Laureate would deliver the combined notional amount of BRL 1,900,000 (BRL 950,000 for each swap) and receive an amount in USD equal to each swap's notional amount multiplied by each swap's contract rate of exchange at the settlement date. The remaining four swaps were originally put/call options with a maturity date of May 13, 2021, where Laureate could put the combined notional amount of BRL 1,875,000 and call a combined USD amount of $ 343,783 at an exchange rate of 5.4540 BRL per 1 USD. The terms of these options included deferred premium payments from Laureate to the counterparties of $ 18,294 , which were paid in full in January 2021. During the second quarter of 2021, all four of these swaps were converted to be deal contingent, with the settlement date occurring on the second business day following the aforementioned sale. This conversion resulted in cash proceeds to Laureate of $ 1,663 . On the settlement date, Laureate would deliver the combined notional amount of BRL 1,875,000 and receive an amount in USD equal to each swap’s notional amount multiplied by each swap’s contract rate of exchange at the settlement date. As discussed in Note 5, Dispositions, the sale of Laureate’s Brazilian operations closed on May 28, 2021. Per the terms of the agreements, the swaps were settled on June 2, 2021, which resulted in a realized loss and net settlement amount paid to the counterparties at closing of $ 33,710 . 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: For the years ended December 31, 2023 2022 2021 Cross currency and interest rate swaps Unrealized gain (loss) $ — $ — $ 25,824 Realized loss — — ( 50,341 ) Loss on derivatives, net $ — $ — $ ( 24,517 ) Credit Risk and Credit-Risk-Related Contingent Features 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. Laureate limits its credit risk by only entering into derivative transactions with highly rated major financial institutions. We have not entered into collateral agreements with our derivatives' counterparties. As of December 31, 2023 and December 31, 2022, we did not hold any derivatives in a net gain position, and thus had no credit risk. 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, 2023 and December 31, 2022, the Company did not have any outstanding derivative agreements. 92 Note 13. Income Taxes Significant components of the Income tax (expense) benefit on earnings from continuing operations were as follows: For the years ended December 31, 2023 2022 2021 Current: United States $ ( 5,488 ) $ ( 33,097 ) $ ( 48,523 ) Foreign ( 187,971 ) ( 152,931 ) ( 148,437 ) State — ( 273 ) — Total current ( 193,459 ) ( 186,301 ) ( 196,960 ) Deferred: United States — 4,663 87,310 Foreign 55,856 ( 3,794 ) ( 10,347 ) State — 41 ( 25,576 ) Total deferred 55,856 910 51,387 Total income tax expense $ ( 137,603 ) $ ( 185,391 ) $ ( 145,573 ) For the years ended December 31, 2023, 2022 and 2021, foreign income (loss) from continuing operations before income taxes was $ 310,589 , $ 319,515 , and $ 80,864 , respectively. For the years ended December 31, 2023, 2022 and 2021, domestic loss from continuing operations before income taxes was $( 56,128 ), $( 73,665 ), and $( 218,371 ), respectively. Significant components of deferred tax assets and liabilities arising from continuing operations were as follows: December 31, 2023 2022 Deferred tax assets: Net operating loss and tax credits carryforwards $ 213,222 $ 256,047 Operating leases 119,529 132,648 Depreciation 56,936 50,444 Interest 36,067 26,711 Deferred compensation 12,202 13,767 Deferred revenue 17,851 9,942 Nondeductible reserves 17,634 7,342 Allowance for doubtful accounts 8,661 6,781 Unrealized loss 8,362 — Total deferred tax assets 490,464 503,682 Deferred tax liabilities: Operating leases 107,879 123,430 Investment in subsidiaries 44,154 77,055 Amortization of intangible assets 52,073 45,635 Deferred gain on Walden 440 452 Unrealized gain — 3,212 Total deferred tax liabilities 204,546 249,784 Net deferred tax assets 285,918 253,898 Valuation allowance for deferred tax assets ( 270,982 ) ( 291,722 ) Net deferred tax assets (liabilities) $ 14,936 $ ( 37,824 ) 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, 2023, undistributed earnings from foreign subsidiaries totaled $ 442,000 . 93 If the Company were to remove its assertion and distribute the remaining unremitted earnings, we would record approximately $ 18,500 in additional deferred tax liabilities. The amount of additional deferred tax liabilities recognized could increase if our expectations change bas ed on future developments. The Company has recorded a deferred tax asset of $ 4,696 for US federal, $ 2,695 for US state net operating loss carryforwards that do not expire, and $ 26,557 for US state net operating loss carryforwards that will expire by 2040. The Company has a deferred tax asset of $ 6,274 for foreign net operating loss carryforwards that expire from 2024 to 2033 and $ 133,342 for foreign net operating loss carryforwards that do not expire. The Company also has $ 167,615 of tax credit carryforwards that do not expire and $ 50,473 of interest carryforwards that do not expire. The decrease in the deferred tax liability for Investment in subsidiaries is related to actions taken by the Company during the fourth quarter of 2023 to distribute certain intercompany loans that resulted in the reclassification of a portion of that deferred tax liability to current income taxes payable as of December 31, 2023. The Company assesses the realizability of deferred tax assets by examining all available evidence, both positive and negative. Accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets when a company is in a three-year cumulative loss position. A valuation allowance is recorded when the company is not able to identify a source of income to support realization of the deferred tax asset on a more-likely-than-not basis. The reconciliations of the beginning and ending balances of the valuation allowance on deferred tax assets were as follows: For the years ended December 31, 2023 2022 2021 Balance at beginning of period $ 291,722 $ 283,945 $ 320,858 Additions (deductions) from tax expense from continuing operations ( 20,740 ) 7,972 9,115 Charges to other accounts Additions — — — Deductions — ( 195 ) ( 46,028 ) Balance at end of period $ 270,982 $ 291,722 $ 283,945 The reconciliations of the reported Income tax (expense) benefit to the amount that would result by applying the United States federal statutory tax rate of 21% to income from continuing operations before income taxes were as follows: For the years ended December 31, 2023 2022 2021 Tax (expense) benefit at the United States statutory rate $ ( 53,437 ) $ ( 51,628 ) $ 28,877 Internal restructuring transaction ( 30,551 ) — — Permanent differences 1,004 ( 38,228 ) ( 8,217 ) Tax effect of foreign income taxed at higher rate ( 33,790 ) ( 40,579 ) ( 16,665 ) Change in valuation allowance ( 5,273 ) ( 11,241 ) 17,642 Effect of tax contingencies ( 6,352 ) ( 37,151 ) ( 12,573 ) Withholding taxes ( 9,204 ) ( 16,275 ) ( 43,578 ) Tax credits — 9,211 10,458 Global intangible low taxed income — — ( 30,616 ) Netherlands intellectual property restructuring — — ( 53,643 ) State income tax benefit (expense), net of federal tax effect — 669 ( 36,782 ) Other — ( 169 ) ( 476 ) Total income tax expense $ ( 137,603 ) $ ( 185,391 ) $ ( 145,573 ) The internal restructuring transaction in the 2023 rate reconciliation represents the write off of deferred tax assets as a result of the reorganization of a subsidiary. These deferred tax assets carried a full valuation allowance and the corresponding reduction in the valuation allowance is included in the change in valuation allowance line item in the table above. Included within permanent differences in the 2023 rate reconciliation was approximately $ 5,400 of tax benefit for a change in estimate related to unrealized foreign currency exchange that is fully offset by a corresponding change in the valuation 94 allowance, as well as approximately $ 3,800 of tax benefit related to the inflationary adjustment for monetary assets, partially offset by approximately $ 6,700 of non-deductible expenses. 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: For the years ended December 31, 2023 2022 2021 Beginning of the period $ 284,929 $ 257,587 $ 385,283 Additions for tax positions related to prior years 1,337 38,029 80,885 Decreases for tax positions related to prior years ( 30,550 ) ( 8,856 ) ( 227,051 ) Additions for tax positions related to current year — 498 21,993 Decreases for unrecognized tax benefits as a result of a lapse in the statute of limitations — ( 2,329 ) ( 3,523 ) End of the period $ 255,716 $ 284,929 $ 257,587 Laureate records interest and penalties related to uncertain tax positions as a component of Income tax expense. During the years ended December 31, 2023, 2022 and 2021, Laureate recognized net interest and penalties related to income taxes of $ 10,155 , $ 6,828 , and $( 6,479 ), respectively. Laureate had $ 32,434 and $ 21,355 of accrued interest and penalties at December 31, 2023 and 2022, 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 $ 117,237 of unrecognized tax benefits, if recognized, will affect the effective income tax rate. It is reasonably possible that Laureate’s unrecognized tax benefits may decrease within the next 12 months by up to approximately $ 5,568 as a result of the lapse of statutes of limitations and as a result of the final settlement and resolution of outstanding tax matters in various jurisdictions. Laureate and various subsidiaries file income tax returns in the United States federal jurisdiction, and in various states and foreign jurisdictions. With few exceptions, Laureate is no longer subject to United States federal, state and local, or foreign income tax examinations by tax authorities for years before 2014. United States federal and state statutes are generally open back to 2020; however, the Internal Revenue Service (the IRS) has the ability to challenge 2005 through 2019 net operating loss carryforwards. Statutes of other major jurisdictions are open back to 2010 for Chile, 2018 for Mexico, 2016 for Peru and 2018 for the Netherlands. Note 14. Earnings (Loss) Per Share Effective October 29, 2021, each share of the Company's Class A common stock and each share of the Company's Class B common stock automatically converted into one share of common stock of the Company. Following the conversion, the Company has only one class of common stock outstanding. Prior to that, our common stock had a dual class structure, consisting of Class A common stock and Class B common stock. Other than voting rights, the Class B common stock had the same rights as the Class A common stock and therefore both were treated as the same class of stock for purposes of the earnings per share calculation. Laureate computes basic earnings per share (EPS) by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that would occur if share-based compensation awards 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. 95 The following tables summarize the computations of basic and diluted earnings per share: For the years ended December 31, 2023 2022 2021 Numerator used in basic and diluted earnings (loss) per common share for continuing operations: Income (loss) from continuing operations $ 117,029 $ 60,718 $ ( 283,080 ) Net loss (income) attributable to noncontrolling interests 323 595 ( 11,839 ) Income (loss) from continuing operations attributable to Laureate Education, Inc. 117,352 61,313 ( 294,919 ) Accretion of redemption value of redeemable noncontrolling interests and equity — — ( 88 ) Net income (loss) from continuing operations available to common stockholders for basic and diluted earnings per share $ 117,352 $ 61,313 $ ( 295,007 ) Numerator used in basic and diluted earnings (loss) per common share for discontinued operations: (Loss) income from discontinued operations, net of tax $ ( 9,762 ) $ 8,260 $ 486,865 Loss attributable to noncontrolling interests — — 500 Net (loss) income from discontinued operations for basic and diluted earnings per share $ ( 9,762 ) $ 8,260 $ 487,365 Denominator used in basic and diluted earnings (loss) per common share: Basic weighted average shares outstanding 157,256 167,670 189,692 Effect of dilutive stock options 237 310 — Effect of dilutive restricted stock units 386 288 — Diluted weighted average shares outstanding 157,879 168,268 189,692 Basic earnings per share: Income (loss) from continuing operations $ 0.75 $ 0.37 $ ( 1.56 ) (Loss) income from discontinued operations ( 0.06 ) 0.05 2.57 Basic earnings per share $ 0.69 $ 0.42 $ 1.01 Diluted earnings per share: Income (loss) from continuing operations $ 0.74 $ 0.36 $ ( 1.56 ) (Loss) income from discontinued operations ( 0.06 ) 0.05 2.57 Diluted earnings per share $ 0.68 $ 0.41 $ 1.01 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: For the years ended December 31, 2023 2022 2021 Stock options — 40 2,953 Restricted stock and RSUs 4 237 899 96 Note 15. Related Party Transactions Approval of Payment to Wengen Alberta, Limited Partnership (Wengen) In December 2023, the Audit and Risk Committee of the Company's Board of Directors approved a payment of $ 850 to Wengen, a greater than 10% stockholder, in order to resolve a matter related to a previously terminated shared-services agreement between the Company and one of Wengen's wholly owned subsidiaries. In January 2024, the Company and Wengen signed a settlement and release agreement related to this matter and the amount was paid. Payment of Peruvian Capital Gains Tax As discussed further in Note 17, Legal and Regulatory Matters, holders who sell, exchange or otherwise dispose of Company shares may be subject to a Peruvian nonresident capital gains tax (the Peruvian Tax). During the fourth quarter of 2021, certain investors in Wengen elected to have their interests in Wengen redeemed in exchange for delivery by Wengen to such investors of the number of shares of Company common stock corresponding to the Wengen interests so redeemed. As a result of this transfer, Wengen paid Peruvian Tax of approximately PEN 95,062 (approximately $ 23,800 at the date of payment). For administrative convenience, Wengen advanced to Laureate the amount needed to pay the Peruvian Tax and Laureate paid the Peruvian Tax on Wengen's behalf. Note 16. Benefit Plans Domestic Defined Contribution Retirement Plan Laureate sponsors a defined contribution retirement plan in the United States under section 401(k) of the Internal Revenue Code. The plan offers employees a traditional “pre-tax” 401(k) option and an “after-tax” Roth 401(k) option, providing the employees with choices and flexibility for their retirement savings. All employees are eligible to participate in the plan after meeting certain service requirements. Participants may contribute up to a maximum of 80 % of their annual compensation and 100 % of their annual cash bonus, as defined and subject to certain annual limitations. Laureate may, at its discretion, make matching contributions that are allocated to eligible participants. The matching on the “after-tax” Roth contributions is the same as the matching on the traditional “pre-tax” contributions. Laureate made discretionary contributions in cash to this plan of $ 323 , $ 287 , and $ 4,138 for the years ended December 31, 2023, 2022 and 2021, respectively. Supplemental Employment Retention Agreement (SERA) In November 2007, Laureate established a SERA for one of its then-executive officers, under which this individual received an annual SERA payment of $ 1,500 . The SERA provided annuity payments to the former executive over the course of his lifetime, and, following the former executive's death in 2018, an annual payment of $ 1,500 will be made to his spouse for the remainder of her life. The SERA is administered through a Rabbi Trust, and its assets are subject to the claims of creditors. 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, 2023 and 2022, the total SERA assets were $ 7,039 and $ 8,161 , respectively, which were recorded on our Consolidated Balance Sheets in Restricted cash. As of December 31, 2023 and 2022, the total SERA liabilities recorded in our Consolidated Balance Sheets were $ 11,011 and $ 11,879 , respectively, of which $ 1,500 each year was recorded in Accrued compensation and benefits, and $ 9,511 and $ 10,379 , respectively, was recorded in Deferred compensation. Mexico Profit-Sharing The Fiscal Reform that was enacted in Mexico in December 2013 subjects Laureate's Mexico entities to corporate income tax and also requires them to comply with profit-sharing legislation, whereby 10% of the taxable income of Laureate's Mexican entities will be set aside as employee compensation. Note 17. Legal and Regulatory Matters Laureate is subject to legal proceedings arising in the ordinary course of business. In management’s opinion, we have adequate legal defenses, insurance coverage, and/or accrued liabilities with respect to the eventuality of these actions. Management believes that any settlement would not have a material impact on Laureate's financial position, results of operations, or cash 97 flows. 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. Peruvian Nonresident Capital Gains Tax Stockholders who sell, exchange, or otherwise dispose of Company shares may be subject to Peruvian tax at a rate of 30% on their gain realized in such transaction determined under certain Peruvian valuation rules regardless of whether the transaction is taxable for non-Peruvian purposes. In determining the amount of such gain subject to such tax, the gain is first multiplied by the percentage of the Company’s value that is represented by its Peruvian business determined under certain Peruvian valuation rules (the “Peru Ratio”). This tax applies if the value of stock determined under certain Peruvian valuation rules (calculated in PEN) transferred multiplied by the Peru Ratio exceeds approximately $53,000 applying the PEN/USD exchange rate of December 31, 2023 (the “Threshold”). The Threshold is calculated in PEN and changes with currency exchange rates. For purposes of determining whether the Threshold has been exceeded by any holder, all transfers made by such holder over any 12-month period are aggregated. For purposes of determining whether any tax is owed, the holder must have their basis “certified” by the Peruvian tax authorities in advance of such transaction. If the holder exceeds the Threshold and does not obtain a tax basis certificate before the transaction, the holder’s tax basis in the shares will be considered zero for Peruvian tax purposes. In the event that a direct or indirect sale, exchange, or other disposition of Company shares occurs and any resulting Peruvian tax is not paid, the Company’s Peruvian subsidiaries may be jointly and severally liable for such tax. Joint and several liability may be imposed if during any of the 12 months preceding the transaction, inter alia , the transferor of Company shares held an indirect or direct interest of more than 10% of the Company’s outstanding shares. If such a transaction were to occur and the Peruvian tax authorities sought to collect the Peruvian capital gains taxes from the Company’s Peruvian subsidiaries that were not paid by such transferor, it could have a material adverse effect on our business, financial condition or results of operations. Note 18. Other Financial Information 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: December 31, 2023 2022 Laureate Education, Inc. Noncontrolling Interests Total Laureate Education, Inc. Noncontrolling Interests Total Foreign currency translation loss $ ( 282,054 ) $ 962 $ ( 281,092 ) $ ( 452,252 ) $ 959 $ ( 451,293 ) Unrealized gains on derivatives 10,416 — 10,416 10,416 — 10,416 Minimum pension liability adjustment ( 506 ) — ( 506 ) ( 588 ) — ( 588 ) Accumulated other comprehensive loss $ ( 272,144 ) $ 962 $ ( 271,182 ) $ ( 442,424 ) $ 959 $ ( 441,465 ) Foreign Currency Exchange of Certain Intercompany Loans Laureate periodically reviews its investment and cash repatriation strategies in order to meet our liquidity requirements in the United States. Laureate recognized currency exchange adjustments attributable to intercompany loans that are not designated as indefinitely invested of $( 64,303 ), $( 27,198 ) and $ 27,292 as part of Foreign currency exchange (loss) gain, net, in the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, respectively. 98 Write Off of Accounts and Notes Receivable During the years ended December 31, 2023, 2022 and 2021, Laureate wrote off approximately $ 25,900 , $ 25,500 and $ 31,600 , respectively, of fully reserved accounts and notes receivable that were deemed uncollectible. Note 19. Supplemental Cash Flow Information Cash interest payments, prior to interest income, for continuing operations and Discontinued Operations were $ 20,264 , $ 16,752 and $ 63,153 for the years ended December 31, 2023, 2022 and 2021, respectively. Net cash payments for income taxes were $ 171,284 , $ 153,761 and $ 251,098 for the years ended December 31, 2023, 2022 and 2021, respectively. Reconciliation of Cash and cash equivalents and Restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the December 31, 2021 balance, to the amounts shown in the Consolidated Statements of Cash Flows: For the year ended December 31, 2023 2022 2021 Cash and cash equivalents $ 89,392 $ 85,167 $ 324,801 Restricted cash 7,505 8,617 20,774 Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows $ 96,897 $ 93,784 $ 345,575 Note 20. Subsequent Events New Stock Repurchase Program On February 15, 2024, Laureate’s Board of Directors approved a new stock repurchase program to acquire up to $ 100,000 of the Company’s common stock. The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility. 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 Securities Exchange Act of 1934, as amended (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 will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. 99 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.