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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 99 added, 270 removed, 348 unchanged (51% of the section changed)

4 unchanged sentences

IN THOUSANDS, except per share amounts

For the three months ended September 30, 2023 2022

(Unaudited) (Unaudited)

Revenues $ 361,533 $ 300,999

Costs and expenses:

Direct costs 291,052 229,361

General and administrative expenses 11,772 15,321

Operating income 58,709 56,317

Interest income 2,830 1,970

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

Other income, net 66 1,393

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

Gain on disposal of subsidiaries, net 3,260 —

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

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

Income from continuing operations 35,735 31,852

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

Net income 35,981 31,036

Net loss attributable to noncontrolling interests 177 81

Net income attributable to Laureate Education, Inc.

$ 36,158 $ 31,117

Basic and diluted earnings per share:

Income from continuing operations $ 0.23 $ 0.19

Income (loss) from discontinued operations — —

Basic and diluted earnings per share $ 0.23 $ 0.19

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

LAUREATE EDUCATION, INC.

AND SUBSIDIARIES

Consolidated Statements of Operations

IN THOUSANDS, except per share amounts

For the nine months ended September 30, 2023 2022

For the three months ended March 31, 2024 2023

(Unaudited) (Unaudited)

3 unchanged sentences

General and administrative expenses 10,265 10,314

Loss on impairment of assets 1,620 144

Operating income 11,129 15,629

1 unchanged sentence

Interest expense ( 4,661 ) ( 5,952 )

Other income, net 198 413

Other (expense) income, net ( 548 ) 261

Foreign currency exchange loss, net ( 5,607 ) ( 28,952 )

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

Income from continuing operations before income taxes and equity in net (loss) income of affiliates 170,719 184,994

(Loss) gain on disposal of subsidiaries, net ( 3,086 ) 306

Loss from continuing operations before income taxes and equity in net loss of affiliates ( 862 ) ( 16,550 )

Income tax expense ( 9,922 ) ( 10,195 )

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

Income from continuing operations 69,337 25,851

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

Equity in net loss of affiliates, net of tax ( 7 ) ( 3 )

Loss from continuing operations ( 10,791 ) ( 26,748 )

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

( 57 ) ( 14 )

Net income 65,532 29,915

Net loss ( 10,848 ) ( 26,762 )

Net loss attributable to noncontrolling interests 97 155

Net income attributable to Laureate Education, Inc.

$ 65,728 $ 30,329

Basic and diluted earnings per share:

Income from continuing operations $ 0.44 $ 0.15

(Loss) income from discontinued operations ( 0.02 ) 0.02

Basic and diluted earnings per share $ 0.42 $ 0.17

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

LAUREATE EDUCATION, INC.

AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended September 30, 2023 2022

(Unaudited) (Unaudited)

Net income $ 35,981 $ 31,036

Other comprehensive income:

Foreign currency translation adjustment, net of tax of $ 0 for both periods

( 46,371 ) ( 42,161 )

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

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

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

Net comprehensive loss attributable to noncontrolling interests 175 82

Comprehensive loss attributable to Laureate Education, Inc.

Net loss attributable to Laureate Education, Inc.

$ ( 10,751 ) $ ( 26,607 )

Basic and diluted earnings (loss) per share:

Loss from continuing operations $ ( 0.07 ) $ ( 0.17 )

Loss from discontinued operations — —

Basic and diluted loss per share $ ( 0.07 ) $ ( 0.17 )

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

2 unchanged sentences

Consolidated Statements of Comprehensive Income

For the nine months ended September 30, 2023 2022

For the three months ended March 31, 2024 2023

(Unaudited) (Unaudited)

Net income $ 65,532 $ 29,915

Net loss $ ( 10,848 ) $ ( 26,762 )

Other comprehensive income:

1 unchanged sentence

26,883 72,797

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

Total other comprehensive income 26,883 72,797

8 unchanged sentences

IN THOUSANDS, except per share amounts

September 30,

2024 December 31,

32 unchanged sentences

IN THOUSANDS, except per share amounts

September 30,

2024 December 31,

21 unchanged sentences

Stockholders' equity:

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

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

Common stock, par value $ 0.004 per share – 700,000 shares authorized, 155,160 shares issued and outstanding as of March 31, 2024 and 157,586 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 1,160,865 1,179,721

1 unchanged sentence

Accumulated other comprehensive loss ( 245,261 ) ( 272,144 )

Treasury stock at cost ( 73,766 shares held at December 31, 2022)

— ( 1,026,272 )

Total Laureate Education, Inc.

7 unchanged sentences

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2023 2022

For the three months ended March 31, 2024 2023

Cash flows from operating activities (Unaudited) (Unaudited)

Net income $ 65,532 $ 29,915

Net loss $ ( 10,848 ) $ ( 26,762 )

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

1 unchanged sentence

Amortization of operating lease right-of-use assets 9,765 7,189

Loss on impairment of assets 1,620 144

Loss (gain) on sales and disposal of subsidiaries and property and equipment, net 5,279 ( 5,797 )

Loss on sales and disposal of subsidiaries and property and equipment, net 3,251 1,524

Non-cash interest expense 324 245

2 unchanged sentences

Deferred income taxes 1,267 ( 607 )

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

Unrealized foreign currency exchange loss 4,964 28,949

Non-cash loss from non-income tax contingencies — 61

9 unchanged sentences

Purchase of property and equipment ( 15,884 ) ( 5,833 )

Expenditures for deferred costs — ( 363 )

Receipts from sales of discontinued operations and property and equipment 503 83,405

Net cash (used in) provided by investing activities ( 26,237 ) 66,288

Receipts from sales of property and equipment 48 4

Net (payments) receipts from sales of discontinued operations ( 154 ) 250

Net cash used in investing activities ( 15,990 ) ( 5,579 )

Cash flows from financing activities

7 unchanged sentences

Payments of debt issuance costs ( 9 ) —

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

Net cash provided by financing activities 18,381 21,144

Effects of exchange rate changes on Cash and cash equivalents and Restricted cash 1,123 3,462

37 unchanged sentences

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

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

Mexico Peru Corporate (1)

Tuition and educational services $ 240,329 $ 170,337 $ — $ 410,666 114 %

Other 36,972 20,293 ( 32 ) 57,233 15 %

Gross revenue 277,301 190,630 ( 32 ) 467,899 129 %

Discounts / waivers / scholarships ( 91,913 ) ( 14,453 ) — ( 106,366 ) ( 29 ) %

Total $ 185,388 $ 176,177 $ ( 32 ) $ 361,533 100 %

Tuition and educational services $ 178,733 $ 147,982 $ — $ 326,715 109 %

Other 32,750 15,493 670 48,913 16 %

Gross revenue 211,483 163,475 670 375,628 125 %

Discounts / waivers / scholarships ( 63,701 ) ( 10,928 ) — ( 74,629 ) ( 25 ) %

Total $ 147,782 $ 152,547 $ 670 $ 300,999 100 %

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

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

The following table shows the components of Revenues by reportable segment and as a percentage of total revenue for the three months ended March 31, 2024 and 2023:

Mexico Peru Corporate (1)

17 unchanged sentences

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

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

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

The first and third calendar

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

Total accounts receivable from our contracts with students were $ 159,145 and $ 173,571 as of March 31, 2024 and December 31, 2023, respectively.

The decrease in the contract assets balance at March 31, 2024 compared to December 31, 2023 was primarily driven by collections, in particular the repayment of outstanding amounts by students re-enrolling for the next academic session.

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

All contract asset amounts are classified as current.

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

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

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

Contract liabilities in the amount of $ 121,305 and $ 69,351 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively.

The increase in the contract liability balance during the period ended March 31, 2024 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period.

Revenue recognized during the three months ended March 31, 2024 that was included in the contract liability balance at the beginning of the year was approximately $ 51,701 .

Assets Held for Sale

1 unchanged sentence

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

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

In addition, during 2023, two parcels of land at campuses in Mexico and a parcel of land in the United States met the criteria for classification as held for sale under ASC 360-10-45-9.

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

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Assets Held for Sale

20 unchanged sentences

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 both countries in which we compete.

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-oriented curriculum and the competitive advantages provided by our network.

There are a number of private and

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

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

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

8 unchanged sentences

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 from continuing operations before income taxes and equity in net income of affiliates, adding back the following items:

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

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

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 that were incurred in connection with previous dispositions.

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

(Loss) gain on disposal of subsidiaries, net, Foreign currency exchange loss, net, Other (expense) income, net, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, and Share-based compensation expense.

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.

3 unchanged sentences

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

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

For the three months ended For the nine months ended

September 30, September 30,

2023 2022 2023 2022

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

For the three months ended March 31, 2024 2023

Mexico $ 214,080 $ 181,963

9 unchanged sentences

Depreciation and amortization expense ( 18,050 ) ( 16,721 )

Loss on impairment of assets — — ( 1,620 ) ( 144 )

Share-based compensation expense ( 1,409 ) ( 1,124 )

EiP expenses — ( 168 ) — ( 1,321 )

Operating income 11,129 15,629

1 unchanged sentence

Interest expense ( 4,661 ) ( 5,952 )

Other income, net

Other (expense) income, net

Foreign currency loss, net

( 5,607 ) ( 28,952 )

Foreign currency gain (loss), net

(Loss) gain on disposal of subsidiaries, net

( 3,086 ) 306

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

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

September 30, 2023 December 31, 2022

Loss from continuing operations before income taxes and equity in net loss of affiliates

$ ( 862 ) $ ( 16,550 )

March 31, 2024 December 31, 2023

Mexico $ 1,453,237 $ 1,396,605

2 unchanged sentences

Total assets $ 2,176,387 $ 2,125,616

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

The change in the net carrying amount of Goodwill from December 31, 2023 through March 31, 2024 was composed of the following items:

Mexico Peru Total

1 unchanged sentence

Currency translation adjustments 11,792 ( 772 ) 11,020

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

Balance at March 31, 2024 $ 600,223 $ 72,279 $ 672,502

Outstanding long-term debt was as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Senior long-term debt:

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

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

Senior Secured Credit Facility (stated maturity date September 18, 2028) $ 121,000 $ 59,000

Lines of credit 10,078 10,864

7 unchanged sentences

Senior Secured 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”).

Under its credit agreement (the Amended Credit Agreement), the Company maintains a revolving credit facility that provides for $ 145,000 of revolving credit loans maturing October 2024 (the Series 2024 Tranche) and $ 155,000 of revolving credit loans maturing September 2028 (the Series 2028 Tranche) for a $ 300,000 aggregate revolving credit facility (the Revolving Credit Facility).

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

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

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

The Amended Credit Agreement also provides, subject to the satisfaction of certain conditions, for incremental revolving and term loan facilities, at the request of the Company, not to exceed (i) the greater of (a) $ 172,500 and (b) 50 % of the Company’s Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, as defined in the agreement, on a pro forma basis, does not exceed 2.25 to 1.00, plus (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

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

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

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

As of March 31, 2024 and December 31, 2023, the Senior Secured Credit Facility had a total outstanding balance of $ 121,000 and $ 59,000 , respectively.

Estimated Fair Value of Debt

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

As of March 31, 2024 and December 31, 2023, the estimated fair value of our debt approximated its carrying value.

Certain Covenants

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

As of March 31, 2024, our Amended Credit Agreement contained certain negative covenants including, among others:

(1) limitations on additional indebtedness;

1 unchanged sentence

(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.

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

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

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

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

The agreement also provides that if less than 25 % of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply.

As of March 31, 2024, more than 25% of the revolving credit facility was utilized, and we were in compliance with the leverage ratio covenant.

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

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

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

In accordance with ASC Topic 842, “Leases,” 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 right-of-use (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.

ROU assets and lease liabilities are recognized at the commencement date of the lease based on the 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 lease 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.

Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term.

On occasion, Laureate has entered into sublease agreements for certain leased office space;

however, the sublease income from these agreements is immaterial.

We were in compliance with these covenants as of March 31, 2024.

Commitments and Contingencies

4 unchanged sentences

Income Tax Contingencies

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

As of March 31, 2024 and December 31, 2023, Laureate had recorded cumulative liabilities for income tax contingencies of $ 137,505 and $ 140,492 , respectively.

Non-Income Tax Loss Contingencies

1 unchanged sentence

Laureate intends to vigorously defend against these matters.

As of September 30, 2023 and December 31, 2022, approximately $ 15,800 and $ 11,400 , respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, approximately $ 20,100 and $ 19,800 , 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 $ 23,200 if the outcomes were unfavorable.

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

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

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

In addition, during the fourth quarter of 2023, the same institution issued a bank guarantee in order to appeal a tax assessment received related to the tax audit of 2009.

As of March 31, 2024 and December 31, 2023, the total amount of the guarantees was approximately $ 12,600 and $ 12,700 , respectively.

Stockholders’ Equity

The components of net changes in stockholders’ equity for the fiscal quarters of 2023 are as follows:

The components of net changes in stockholders’ equity for the three months ended March 31, 2024 are as follows:

Laureate Education, Inc.

Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock at cost Non-controlling interests Total stockholders’ equity

Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Non-controlling interests Total stockholders’ equity

Shares Amount

1 unchanged sentence

Non-cash share-based compensation — — 1,409 — — — 1,409

Purchase and retirement of common stock ( 2,607 ) ( 10 ) ( 19,512 ) ( 13,700 ) — — ( 33,222 )

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 181 1 ( 774 ) — — — ( 773 )

Equitable adjustments to stock-based awards — — 21 — — — 21

Change in noncontrolling interests — — 16 — — — ( 140 ) ( 124 )

Net loss — — — ( 10,751 ) — ( 97 ) ( 10,848 )

2 unchanged sentences

Balance at March 31, 2024 155,160 $ 621 $ 1,160,865 $ 17,411 $ ( 245,261 ) $ ( 2,426 ) $ 931,210

Non-cash share-based compensation — — 1,976 — — — — 1,976

Retirement of treasury stock — ( 295 ) ( 1,025,977 ) — — 1,026,272 — —

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 46 — 44 — — — — 44

Equitable adjustments to stock-based awards — — 24 — — — — 24

Net income — — — 56,177 — — 136 56,313

Foreign currency translation adjustment, net of tax of $ 0

— — — — 92,007 — ( 92 ) 91,915

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

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

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

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

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

Foreign currency translation adjustment, net of tax of $ 0

— — — — ( 46,373 ) — 2 ( 46,371 )

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

Retirement of Treasury Stock

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.

The components of net changes in stockholders’ equity for the fiscal quarters of 2022 are as follows:

Stock Repurchase

On March 5, 2024, the Company entered into a Stock Purchase Agreement with each of ILM Investments Limited Partnership, Torreal Sociedad de Capital Riesgo S.A., Pedro del Corro García-Lomas, a member of Laureate’s Board of Directors, Ana Gómez Cuesta and José Diaz-Rato Revuelta (together, the Sellers), pursuant to which the Company purchased an aggregate of 2,607 shares of our common stock from the Sellers at a purchase price of $ 12.62 per share for an aggregate purchase price of $ 32,894 .

This repurchase, which was approved as a related party transaction by the Audit and Risk Committee of the Company’s Board of Directors, was pursuant to the Company’s existing $ 100,000 stock purchase program that was announced on February 22, 2024 .

Under this stock repurchase program, all shares repurchased are immediately retired.

Upon retirement of repurchased stock, the excess of the purchase price plus excise tax over par value is allocated to additional paid-in capital, subject to certain limitations.

Any remainder is allocated to retained earnings.

The components of net changes in stockholders’ equity for the three months ended March 31, 2023 are as follows:

Laureate Education, Inc.

Common stock Additional paid-in capital Retained earnings (accumulated deficit) Accumulated other comprehensive loss Treasury stock at cost Non-controlling interests Total stockholders’ equity

Common stock Additional paid-in capital Retained earnings

Accumulated other comprehensive loss Treasury stock at cost Non-controlling interests Total stockholders’ equity

Shares Amount

1 unchanged sentence

Non-cash share-based compensation — — 1,124 — — — — 1,124

Purchase of treasury stock at cost ( 9,485 ) — — — — ( 112,874 ) — ( 112,874 )

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 161 1 ( 448 ) — — — — ( 447 )

Equitable adjustments to stock-based awards — — ( 13 ) — — — — ( 13 )

Change in noncontrolling interests — — 16 — — — (140) (124)

Net loss — — — ( 26,607 ) — — ( 155 ) ( 26,762 )

1 unchanged sentence

— — — — 72,791 — 6 72,797

Minimum pension liability adjustment, net of tax of $ 0

— — — — 14 — — 14

Balance at March 31, 2023 157,174 $ 924 $ 2,205,434 $ 12,637 $ ( 369,633 ) $ ( 1,026,272 ) $ ( 2,158 ) $ 820,932

Non-cash share-based compensation — — 2,360 — — — — 2,360

Purchase of treasury stock at cost ( 8,013 ) — — — — ( 93,362 ) — ( 93,362 )

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding 171 1 ( 472 ) — — — — ( 471 )

Equitable adjustments to stock-based awards — — ( 35 ) — — — — ( 35 )

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

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

Net income — — — 43,423 — — 136 43,559

Foreign currency translation adjustment, net of tax of $ 0

— — — — 17,969 — 3 17,972

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

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

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

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

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

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

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

Foreign currency translation adjustment, net of tax of $ 0

— — — — ( 42,160 ) — ( 1 ) ( 42,161 )

Minimum pension liability adjustment, net of tax of $ 0

— — — — 983 — — 983

Balance at September 30, 2022

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

2022 Special Cash Distribution

As previously disclosed in the 2022 Form 10-K, on September 14, 2022, the Company announced that its Board approved, pursuant to the previously announced adoption of a Partial Liquidation Plan related to the distribution of net proceeds from the Company’s sale of Walden e-Learning LLC (the Walden Sale), the payment of a special cash distribution (the October 2022 Distribution) equal to $ 0.83 per each share of the Company’s common stock, par value $ 0.004 per share, to each holder of record on September 28, 2022.

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

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

Share-based Compensation Expense

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

During the three months ended March 31, 2024 and 2023, the Company recorded share-based compensation expense for restricted stock unit awards of $ 1,409 and $ 1,124 , respectively.

Accumulated Other Comprehen sive Income (Loss)

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The components of these balances were as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Laureate Education, Inc.

6 unchanged sentences

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

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

The tax provisions for the three months ended March 31, 2024 and 2023 are based on estimated full-year effective tax rates, adjusted for discrete income tax items related specifically to the interim periods.

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

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

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

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

For the three months ended March 31, 2024, the Company recognized income t ax expense of $ 9,922 , as compared to $ 10,195 in the prior year period.

Income tax expense for the three months ended March 31, 2024 and 2023 was attributable to pretax income, the jurisdictional mix of earnings, and pretax losses for which the Company cannot recognize a tax benefit.

In addition, the Company benefited from changes in reserves for uncertain tax provisions in both periods.

Earnings (Loss) Per Share

2 unchanged sentences

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

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

For the three months ended September 30, 2023 2022

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

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

Loss attributable to noncontrolling interests 177 81

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

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

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

Denominator used in basic and diluted earnings per common share:

Basic weighted average shares outstanding 157,268 164,645

Dilutive effect of stock options 226 221

Dilutive effect of restricted stock units 310 149

Diluted weighted average shares outstanding 157,804 165,015

Basic and diluted earnings per share:

Income from continuing operations $ 0.23 $ 0.19

Income (loss) from discontinued operations — —

Basic and diluted earnings per share $ 0.23 $ 0.19

For the nine months ended September 30, 2023 2022

The following table summarizes the computations of basic and diluted earnings (loss) per share:

For the three months ended March 31, 2024 2023

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

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

Loss from continuing operations $ ( 10,791 ) $ ( 26,748 )

Loss attributable to noncontrolling interests 97 155

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

Net loss from continuing operations for basic and diluted loss per share $ ( 10,694 ) $ ( 26,593 )

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

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

Net loss from discontinued operations for basic and diluted loss per share $ ( 57 ) $ ( 14 )

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

Basic weighted average shares outstanding 157,217 169,885

Dilutive effect of stock options 219 302

Dilutive effect of restricted stock units 234 173

Diluted weighted average shares outstanding 157,670 170,360

Basic and diluted earnings per share:

Income from continuing operations $ 0.44 $ 0.15

(Loss) income from discontinued operations ( 0.02 ) 0.02

Basic and diluted earnings per share $ 0.42 $ 0.17

Basic and diluted weighted average shares outstanding 157,011 157,197

Basic and diluted earnings (loss) per share:

Loss from continuing operations $ ( 0.07 ) $ ( 0.17 )

Loss from discontinued operations — —

Basic and diluted loss per share $ ( 0.07 ) $ ( 0.17 )

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

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

2023 2022 2023 2022

For the three months ended March 31, 2024 2023

Stock options 359 551

Restricted stock units 722 692

Related Party Transactions

Stock Repurchase

As discussed in Note 8, Stockholders’ Equity, on March 5, 2024 , the Company entered into a Stock Purchase Agreement with the Sellers pursuant to which the Company purchased an aggregate of 2,607 shares of our common stock from the Sellers at a purchase price of $ 12.62 per share for an aggregate purchase price of $ 32,894 .

This repurchase, which was approved as a related party transaction by the Audit and Risk Committee of the Company’s Board of Directors, was pursuant to the Company’s existing $ 100,000 share repurchase program that was announced on February 22, 2024 .

Legal and Regulatory Matters

3 unchanged sentences

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

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

Peru Regulation

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

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

On March 30, 2023, Cibertec, the Company’s technical-vocational institute, was granted a higher education colleges license for a six-year period.

This license will now allow Cibertec to offer four-year programs for professional bachelor degrees.

There have been no material changes to the laws and regulations affecting our higher education institutions that are described in our 2023 Form 10‑K.

Supplemental Cash Flow Information

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 September 30, 2022 balance.

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

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

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the March 31, 2023 balance.

The March 31, 2024 and March 31, 2023 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023:

March 31, 2024 March 31, 2023 December 31, 2023

Cash and cash equivalents $ 126,226 $ 130,636 $ 89,392

2 unchanged sentences

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

Subsequent Events

Special Cash Dividend

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

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

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

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

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

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

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

What changed 10-Q

Item 1. Financial Statements