UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, ~~2020~~2021

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to __________.

Commission File Number: 001-38002

Laureate Education, Inc.

(Exact name of registrant as specified in its charter)

Delaware

52-1492296

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

650 S. Exeter Street,

Baltimore,

Maryland

21202

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (410) 843-6100

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.004 per share

LAUR

The NASDAQ Stock Market LLC

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). �� Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Class						Outstanding at March 31, ~~2020~~2021
Class A common stock, par value $0.004 per share						~~119,074,637~~122,213,324 shares
Class B common stock, par value $0.004 per share						~~90,813,257~~73,544,083 shares

INDEX

PART I. - FINANCIAL INFORMATION

Page No.

Item 1.

Financial Statements (Unaudited)

Consolidated Statements of Operations - Three months ended March 31, ~~2020~~2021 and

March 31, ~~2019~~2020

Consolidated Statements of Comprehensive Income - Three months ended March 31, ~~2020~~2021 and

March 31, ~~2019~~2020

Consolidated Balance Sheets - March 31, ~~2020~~2021 and December 31, ~~2019~~2020

Consolidated Statements of Cash Flows - Three months ended March 31, ~~2020~~2021 and

March 31, ~~2019~~2020

Notes to Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

3528

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

5847

Item 4.

Controls and Procedures

5847

PART II. - OTHER INFORMATION

Item 1.

Legal Proceedings

5948

Item 1A.

Risk Factors

5948

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

6149

Item 6.

Exhibits

6249

SIGNATURES

6650

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

IN THOUSANDS, except per share amounts


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
		(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)
Revenues	Revenues	$	528,557	$	601,072	Revenues	$	194,701	$	192,319
Costs and expenses:	Costs and expenses:					Costs and expenses:
Direct costs	Direct costs	588,987		639,190		Direct costs	181,848		220,568
General and administrative expenses	General and administrative expenses	52,937		53,911		General and administrative expenses	42,594		45,069
Loss on impairment of assets	Loss on impairment of assets	3,768		—		Loss on impairment of assets	56,650		3,768
Operating loss	Operating loss	(117,135)		(92,029)		Operating loss	(86,391)		(77,086)
Interest income	Interest income	2,667		3,553		Interest income	711		622
Interest expense	Interest expense	(36,110)		(54,653)		Interest expense	(23,518)		(25,290)
Loss on debt extinguishment	Loss on debt extinguishment	—		(10,622)		Loss on debt extinguishment	(13)		0
Gain on derivatives	Gain on derivatives	802		5,183		Gain on derivatives	29,330		802
Other (expense) income, net		(102)		397
Foreign currency exchange gain (loss), net		35,944		(4,746)
Gain on sales of subsidiaries, net		2,729		—
Other income (expense), net						Other income (expense), net	34		(81)
Foreign currency exchange gain, net						Foreign currency exchange gain, net	28,183		78,716
Loss on disposal of subsidiaries, net						Loss on disposal of subsidiaries, net	0		(1,800)
Loss from continuing operations before income taxes and equity in net income of affiliates	Loss from continuing operations before income taxes and equity in net income of affiliates	(111,205)		(152,917)		Loss from continuing operations before income taxes and equity in net income of affiliates	(51,664)		(24,117)
Income tax benefit		235,102		35,848
Income tax (expense) benefit						Income tax (expense) benefit	(112,861)		230,028
Equity in net income of affiliates, net of tax	Equity in net income of affiliates, net of tax	185		—		Equity in net income of affiliates, net of tax	0		185
Income (loss) from continuing operations		124,082		(117,069)
(Loss) income from discontinued operations, net of tax expense of $1,482 and $10,141, respectively		(3,804)		63,329
(Loss) gain on sales of discontinued operations, including tax benefit of $1,591 and $287, respectively		(21,962)		248,005
Net income		98,316		194,265
Net loss (income) attributable to noncontrolling interests		1,299		(3,022)
Net income attributable to Laureate Education, Inc.		$	99,615	$	191,243
(Loss) income from continuing operations						(Loss) income from continuing operations	(164,525)		206,096
Loss from discontinued operations, net of tax (expense) benefit of $(9,665) and $5,183, respectively						Loss from discontinued operations, net of tax (expense) benefit of $(9,665) and $5,183, respectively	(418)		(107,780)
Net (loss) income						Net (loss) income	(164,943)		98,316
Net loss attributable to noncontrolling interests						Net loss attributable to noncontrolling interests	15		1,299
Net (loss) income attributable to Laureate Education, Inc.						Net (loss) income attributable to Laureate Education, Inc.	$	(164,928)	$	99,615

Basic and diluted earnings (loss) per share:
Income (loss) from continuing operations $ 0.59 $ (0.52)
(Loss) income from discontinued operations (0.12) 1.37
Basic and diluted earnings per share $ 0.47 $ 0.85


Basic and diluted earnings (loss) per share:
(Loss) income from continuing operations	$	(0.82)	$	0.98
Loss from discontinued operations	0		(0.51)
Basic and diluted (loss) earnings per share	$	(0.82)	$	0.47

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

IN THOUSANDS

For the three months ended March 31, 2020 2019
(Unaudited) (Unaudited)
Net income $ 98,316 $ 194,265
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $0 for both periods (330,116) 49,551
Unrealized gain on derivative instruments, net of tax of $0 — 2,609
Minimum pension liability adjustment, net of tax of $0 (932) —
Total other comprehensive (loss) income (331,048) 52,160
Comprehensive (loss) income (232,732) 246,425
Net comprehensive loss (income) attributable to noncontrolling interests 540 (3,052)
Comprehensive (loss) income attributable to Laureate Education, Inc. $ (232,192) $ 243,373



For the three months ended March 31,	2021		2020
	(Unaudited)		(Unaudited)
Net (loss) income	$	(164,943)	$	98,316
Other comprehensive loss:
Foreign currency translation adjustment, net of tax of $0 for both periods	(59,761)		(330,116)

Minimum pension liability adjustment, net of tax of $0 for both periods	(168)		(932)
Total other comprehensive loss	(59,929)		(331,048)
Comprehensive loss	(224,872)		(232,732)
Net comprehensive loss attributable to noncontrolling interests	33		540
Comprehensive loss attributable to Laureate Education, Inc.	$	(224,839)	$	(232,192)

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

IN THOUSANDS, except per share amounts


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets	(Unaudited)				Assets	(Unaudited)
Current assets:	Current assets:					Current assets:
Cash and cash equivalents (includes VIE amounts of $145,502 and $157,003, see Note 2)		$	546,675	$	339,629
Cash and cash equivalents						Cash and cash equivalents	$	561,330	$	750,147
Restricted cash	Restricted cash	196,385		186,921		Restricted cash	106,633		117,151
Receivables:	Receivables:					Receivables:
Accounts and notes receivable	Accounts and notes receivable	535,408		432,910		Accounts and notes receivable	110,504		138,738
Other receivables	Other receivables	20,785		18,350		Other receivables	70,223		49,835
Allowance for doubtful accounts	Allowance for doubtful accounts	(173,173)		(190,785)		Allowance for doubtful accounts	(65,602)		(76,694)
Receivables, net	Receivables, net	383,020		260,475		Receivables, net	115,125		111,879

Income tax receivable	Income tax receivable	39,948		22,416		Income tax receivable	14,801		14,564
Derivative instruments						Derivative instruments	21,800		0
Prepaid expenses and other current assets	Prepaid expenses and other current assets	73,582		49,686		Prepaid expenses and other current assets	23,795		15,079
Current assets held for sale	Current assets held for sale	72,415		83,800		Current assets held for sale	467,786		434,966
Total current assets (includes VIE amounts of $422,752 and $346,125, see Note 2)		1,312,025		942,927

Total current assets						Total current assets	1,311,270		1,443,786
Notes receivable, net	Notes receivable, net	12,296		9,882		Notes receivable, net	1,197		1,321
Property and equipment:	Property and equipment:					Property and equipment:
Land	Land	205,826		229,663		Land	121,699		126,228
Buildings	Buildings	597,641		662,376		Buildings	338,961		351,480
Furniture, equipment and software	Furniture, equipment and software	855,607		952,599		Furniture, equipment and software	479,551		494,079
Leasehold improvements	Leasehold improvements	286,184		329,011		Leasehold improvements	118,463		121,683
Construction in-progress	Construction in-progress	63,064		57,393		Construction in-progress	5,070		7,254
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(937,277)		(1,031,823)		Accumulated depreciation and amortization	(520,782)		(522,240)
Property and equipment, net	Property and equipment, net	1,071,045		1,199,219		Property and equipment, net	542,962		578,484

Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	768,747		861,878		Operating lease right-of-use assets, net	428,183		462,767
Land use rights, net	Land use rights, net	1,329		1,628		Land use rights, net	1,485		1,548
Goodwill	Goodwill	1,501,042		1,701,495		Goodwill	551,753		574,832
Other intangible assets:

Tradenames	Tradenames	1,069,084		1,119,454		Tradenames	164,059		225,573
Other intangible assets, net		1,045		1,431

Deferred costs, net	Deferred costs, net	64,156		69,998		Deferred costs, net	16,271		17,623
Deferred income taxes	Deferred income taxes	333,325		125,417		Deferred income taxes	90,649		130,567

Other assets	Other assets	146,672		176,326		Other assets	37,959		51,924
Long-term assets held for sale	Long-term assets held for sale	216,316		305,973		Long-term assets held for sale	1,338,260		1,482,469
Total assets (includes VIE amounts of $981,102 and $948,632, see Note 2)		$	6,497,082	$	6,515,628
Total assets						Total assets	$	4,484,048	$	4,970,894

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (continued)

IN THOUSANDS, except per share amounts


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Liabilities and stockholders' equity	Liabilities and stockholders' equity	(Unaudited)				Liabilities and stockholders' equity	(Unaudited)
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	91,285	$	119,523	Accounts payable	$	30,013	$	41,073
Accrued expenses	Accrued expenses	211,347		214,808		Accrued expenses	103,171		95,743
Accrued compensation and benefits	Accrued compensation and benefits	112,672		182,080		Accrued compensation and benefits	45,496		64,089
Deferred revenue and student deposits	Deferred revenue and student deposits	505,716		216,816		Deferred revenue and student deposits	85,881		47,180
Current portion of operating leases	Current portion of operating leases	84,241		91,558		Current portion of operating leases	45,095		44,631
Current portion of long-term debt and finance leases	Current portion of long-term debt and finance leases	191,254		118,822		Current portion of long-term debt and finance leases	62,805		95,818
Current portion of due to shareholders of acquired companies		8,587		11,523

Income taxes payable	Income taxes payable	24,085		25,501		Income taxes payable	72,829		29,682

Derivative instruments						Derivative instruments	0		17,680
Other current liabilities	Other current liabilities	21,572		25,969		Other current liabilities	16,252		15,109
Current liabilities held for sale	Current liabilities held for sale	60,602		64,204		Current liabilities held for sale	335,964		353,550
Total current liabilities (includes VIE amounts of $267,151 and $142,343, see Note 2)		1,311,361		1,070,804
Total current liabilities						Total current liabilities	797,506		804,555
Long-term operating leases, less current portion	Long-term operating leases, less current portion	712,564		792,358		Long-term operating leases, less current portion	430,950		474,507
Long-term debt and finance leases, less current portion	Long-term debt and finance leases, less current portion	1,411,686		1,260,317		Long-term debt and finance leases, less current portion	888,181		899,898
Due to shareholders of acquired companies, less current portion		8,282		9,995

Deferred compensation	Deferred compensation	12,839		12,744		Deferred compensation	13,493		13,425
Income taxes payable	Income taxes payable	53,675		62,200		Income taxes payable	48,775		36,078
Deferred income taxes	Deferred income taxes	190,563		218,378		Deferred income taxes	99,601		86,368

Derivative instruments						Derivative instruments	0		8,144
Other long-term liabilities	Other long-term liabilities	143,353		147,472		Other long-term liabilities	32,563		33,555
Long-term liabilities held for sale	Long-term liabilities held for sale	70,988		124,914		Long-term liabilities held for sale	277,746		348,706
Total liabilities (includes VIE amounts of $395,516 and $257,199, see Note 2)		3,915,311		3,699,182
Total liabilities						Total liabilities	2,588,815		2,705,236
Redeemable noncontrolling interests and equity	Redeemable noncontrolling interests and equity	11,963		12,295		Redeemable noncontrolling interests and equity	1,744		1,724
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, par value $0.001 per share – 49,889 shares authorized as of March 31, 2020 and December 31, 2019, respectively, 0 shares issued and outstanding as of March 31, 2020 and December 31, 2019		—		—
Class A common stock, par value $0.004 per share – 700,000 shares authorized, 136,702 shares issued and 119,075 shares outstanding as of March 31, 2020 and 135,583 shares issued and 119,575 shares outstanding as of December 31, 2019		546		542
Class B common stock, par value $0.004 per share – 175,000 shares authorized, 90,813 shares issued and outstanding as of March 31, 2020 and 90,831 shares issued and outstanding as of December 31, 2019		363		363
Preferred stock, par value $0.001 per share – 49,889 shares authorized as of March 31, 2021 and December 31, 2020, respectively, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020						Preferred stock, par value $0.001 per share – 49,889 shares authorized as of March 31, 2021 and December 31, 2020, respectively, 0 shares issued and outstanding as of March 31, 2021 and December 31, 2020	0		0
Class A common stock, par value $0.004 per share – 700,000 shares authorized, 154,657 shares issued and 122,213 shares outstanding as of March 31, 2021 and 137,162 shares issued and 115,119 shares outstanding as of December 31, 2020						Class A common stock, par value $0.004 per share – 700,000 shares authorized, 154,657 shares issued and 122,213 shares outstanding as of March 31, 2021 and 137,162 shares issued and 115,119 shares outstanding as of December 31, 2020	618		548
Class B common stock, par value $0.004 per share – 175,000 shares authorized, 73,544 shares issued and outstanding as of March 31, 2021 and 90,792 shares issued and outstanding as of December 31, 2020						Class B common stock, par value $0.004 per share – 175,000 shares authorized, 73,544 shares issued and outstanding as of March 31, 2021 and 90,792 shares issued and outstanding as of December 31, 2020	294		363
Additional paid-in capital	Additional paid-in capital	3,752,186		3,724,636		Additional paid-in capital	3,760,362		3,760,029
Retained earnings		536,124		436,509
Accumulated deficit						Accumulated deficit	(341,851)		(176,822)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,405,788)		(1,073,981)		Accumulated other comprehensive loss	(1,001,897)		(941,986)
Treasury stock at cost (17,627 shares held at March 31, 2020 and 16,008 shares held at December 31, 2019)		(300,309)		(271,106)
Treasury stock at cost (32,444 shares held at March 31, 2021 and 22,043 shares held at December 31, 2020)						Treasury stock at cost (32,444 shares held at March 31, 2021 and 22,043 shares held at December 31, 2020)	(511,122)		(365,316)
Total Laureate Education, Inc. stockholders' equity	Total Laureate Education, Inc. stockholders' equity	2,583,122		2,816,963		Total Laureate Education, Inc. stockholders' equity	1,906,404		2,276,816
Noncontrolling interests	Noncontrolling interests	(13,314)		(12,812)		Noncontrolling interests	(12,915)		(12,882)
Total stockholders' equity	Total stockholders' equity	2,569,808		2,804,151		Total stockholders' equity	1,893,489		2,263,934
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	6,497,082	$	6,515,628	Total liabilities and stockholders' equity	$	4,484,048	$	4,970,894

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

IN THOUSANDS


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
Cash flows from operating activities	Cash flows from operating activities	(Unaudited)		(Unaudited)		Cash flows from operating activities	(Unaudited)		(Unaudited)
Net income		$	98,316	$	194,265
Net (loss) income						Net (loss) income	$	(164,943)	$	98,316
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	44,161		47,644		Depreciation and amortization	22,672		44,161
Amortization of operating lease right-of-use assets	Amortization of operating lease right-of-use assets	23,257		33,374		Amortization of operating lease right-of-use assets	15,688		23,257
Loss on impairment of assets	Loss on impairment of assets	3,768		—		Loss on impairment of assets	57,714		3,768
Loss (gain) on sales of subsidiaries and disposal of property and equipment, net		21,175		(246,803)
Loss on sales and disposal of subsidiaries and property and equipment, net						Loss on sales and disposal of subsidiaries and property and equipment, net	16,461		21,175
Gain on derivative instruments	Gain on derivative instruments	(802)		(5,343)		Gain on derivative instruments	(29,330)		(802)
Payments for settlement of derivative contracts		—		(8,233)

Loss on debt extinguishment	Loss on debt extinguishment	—		10,622		Loss on debt extinguishment	73		0
Non-cash interest expense	Non-cash interest expense	5,091		5,076		Non-cash interest expense	4,592		5,091

Non-cash share-based compensation expense	Non-cash share-based compensation expense	1,984		3,149		Non-cash share-based compensation expense	1,576		1,984
Bad debt expense	Bad debt expense	22,912		23,650		Bad debt expense	3,273		22,912
Deferred income taxes	Deferred income taxes	(248,701)		8,835		Deferred income taxes	84,409		(248,701)
Unrealized foreign currency exchange (gain) loss		(29,720)		5,458
Unrealized foreign currency exchange gain						Unrealized foreign currency exchange gain	(23,687)		(29,720)
Non-cash loss from non-income tax contingencies	Non-cash loss from non-income tax contingencies	6,514		4,561		Non-cash loss from non-income tax contingencies	11,995		6,514
Other, net	Other, net	3,982		1,537		Other, net	1,909		3,982
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	(173,760)		(264,944)		Receivables	5,111		(173,760)
Prepaid expenses and other assets	Prepaid expenses and other assets	(32,084)		(62,433)		Prepaid expenses and other assets	(14,133)		(32,084)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(64,924)		(47,929)		Accounts payable and accrued expenses	(30,733)		(64,924)
Income tax receivable/payable, net	Income tax receivable/payable, net	2,709		(45,012)		Income tax receivable/payable, net	(16,731)		2,709
Deferred revenue and other liabilities	Deferred revenue and other liabilities	312,593		387,500		Deferred revenue and other liabilities	65,367		312,593
Net cash (used in) provided by operating activities		(3,529)		44,974
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	11,283		(3,529)
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchase of property and equipment	Purchase of property and equipment	(24,582)		(32,319)		Purchase of property and equipment	(11,743)		(24,582)
Expenditures for deferred costs	Expenditures for deferred costs	(3,500)		(3,488)		Expenditures for deferred costs	(1,896)		(3,500)
Receipts from sales of discontinued operations, net of cash sold, and property and equipment	Receipts from sales of discontinued operations, net of cash sold, and property and equipment	4,032		330,998		Receipts from sales of discontinued operations, net of cash sold, and property and equipment	30,845		4,032
Payments on derivatives related to sale of discontinued operations						Payments on derivatives related to sale of discontinued operations	(18,294)		0

Business acquisitions, net of cash acquired		—		(1,194)

Payments from related parties		87		87
Receipts from related parties						Receipts from related parties	0		87

Net cash (used in) provided by investing activities		(23,963)		294,084
Net cash used in investing activities						Net cash used in investing activities	(1,088)		(23,963)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance of long-term debt, net of original issue discount	Proceeds from issuance of long-term debt, net of original issue discount	499,479		90,630		Proceeds from issuance of long-term debt, net of original issue discount	996		499,479
Payments on long-term debt	Payments on long-term debt	(226,505)		(532,592)		Payments on long-term debt	(53,670)		(226,505)
Payments of deferred purchase price for acquisitions	Payments of deferred purchase price for acquisitions	(1,488)		(369)		Payments of deferred purchase price for acquisitions	0		(1,488)

Proceeds from exercise of stock options	Proceeds from exercise of stock options	26,754		—		Proceeds from exercise of stock options	0		26,754
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options						Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options	(1,222)		(1,140)
Payments to repurchase common stock	Payments to repurchase common stock	(29,203)		—		Payments to repurchase common stock	(145,244)		(29,203)
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options		(1,140)		(1,420)
Payments of debt issuance costs	Payments of debt issuance costs	—		(5,226)		Payments of debt issuance costs	(14)		0

Distributions to noncontrolling interest holders		—		(625)
Net cash provided by (used in) financing activities		267,897		(449,602)

Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(199,154)		267,897
Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	(33,613)		2,042		Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	(6,850)		(7,706)
Change in cash included in current assets held for sale	Change in cash included in current assets held for sale	9,718		(2,825)		Change in cash included in current assets held for sale	(3,526)		10,092
Net change in Cash and cash equivalents and Restricted cash	Net change in Cash and cash equivalents and Restricted cash	216,510		(111,327)		Net change in Cash and cash equivalents and Restricted cash	(199,335)		242,791
Cash and cash equivalents and Restricted cash at beginning of period	Cash and cash equivalents and Restricted cash at beginning of period	526,550		583,572		Cash and cash equivalents and Restricted cash at beginning of period	867,298		97,817
Cash and cash equivalents and Restricted cash at end of period	Cash and cash equivalents and Restricted cash at end of period	$	743,060	$	472,245	Cash and cash equivalents and Restricted cash at end of period	$	667,963	$	340,608

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

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 ~~an international portfolio of~~ licensed universities and higher education institutions (institutions). Laureate's programs are provided through institutions that are campus-based and internet-based, or through electronically distributed educational programs (online). In response to the COVID-19 pandemic, we ~~have~~have temporarily ~~transitioned~~transitioned the educational delivery method at all of our campus-based institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside of the traditional classroom setting.

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

~~On August 9,~~In 2017 and 2018, the Company announced the divestiture of ~~additional~~certain subsidiaries located in Europe, Asia and Central America, which were included in the ~~Rest of World, Andean, and~~following segments: Peru (formerly Andean), Central America (formerly Central America & U.S. Campuses) ~~segments. Previously, the Company had announced the divestiture of certain subsidiaries in the~~, and Rest of ~~World~~World. The goal of the divestitures was to create a more focused and ~~Central America segments. After completing all~~simplified business model and generate proceeds to be used for further repayment of these announced divestitures, the Company’s remaining principal markets would be Brazil, Chile, Mexico and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand.long-term debt. This represented a strategic shift that had a major effect on the Company’s operations and financial results. Accordingly, all of the divestitures that were part of this strategic shift, ~~including the divestitures announced on August 9, 2018 and those announced previously,~~ as well as the Company's operations in the Kingdom of Saudi Arabia that were managed under a contract that expired on August 31, 2019 and was not renewed, ~~are~~were accounted for as ~~discontinued operations~~Discontinued Operations for all periods presented in accordance with Accounting Standards Codification (ASC) 205-20, “Discontinued Operations” (ASC 205).

On January 27, 2020, we announced that our board of directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value. As a result of these efforts to explore strategic alternatives, during the third quarter of 2020, the Company announced that it had completed a sale of its operations in Chile and had signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University, its fully online higher education institution in the United States. This also represented a strategic shift that had a major effect on the Company’s operations and financial results. As such, Chile, Brazil, Australia and New Zealand, and Walden also have been accounted for as Discontinued Operations for all periods presented in accordance with ASC 205. The sale of our operations in Australia and New Zealand was completed on November 3, 2020. For Laureate’s institutions in Mexico and Peru, the board decided after a thorough evaluation of all strategic options, including a potential sale, to continue to operate these assets under Laureate management. Accordingly, Mexico and Peru represent our Continuing Operations. The decision to focus on a regional operating model in Mexico and Peru at this time does not preclude further engagement with potential buyers for those businesses. 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.~~

Continuing Operations.

~~Exploration of Strategic Alternatives~~

On January 27, 2020, Laureate announced that its Board of Directors had authorized the Company to explore strategic alternatives for each of its businesses to unlock shareholder value. As part of this process, the Company will evaluate all potential options for its remaining businesses, including sales, spin-offs or business combinations. There can be no assurance as to the outcome of this process, including whether it will result in the completion of any transaction, as to the values that may be realized from any potential transaction or as to how long the review process will take. The rationale for embarking on the strategic review process has not changed. However, as a result of the COVID-19 pandemic and its continuing effect on market conditions, the strategic review is progressing at a slower pace than anticipated. During the quarter ended March 31, 2020, no additional entities met the held-for-sale criteria and therefore, there were no changes to the entities classified as Discontinued Operations.

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, these financial statements include all adjustments considered necessary to present a fair statement of our consolidated results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited Consolidated Financial Statements should be read in conjunction with Laureate's audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 (the ~~2019~~2020 Form 10-K).

Note 2. Significant Accounting Policies

~~The Variable Interest Entity (VIE) Arrangements~~

Laureate consolidates in its financial statements certain internationally based educational organizations that do not have shares or other equity ownership interests. Although these educational organizations may be considered not-for-profit entities in their home countries and they are operated in compliance with their respective not-for-profit legal regimes, we believe they do not meet the definition of a not-for-profit entity under GAAP, and therefore we treat them as “for-profit” entities for accounting purposes. These entities generally cannot declare dividends or distribute their net assets to the entities that control them.

Under ASC 810-10, “Consolidation,” we have determined that these institutions are VIEs and that Laureate is the primary beneficiary of these VIEs because we have, as further described herein: (1) the power to direct the activities of the VIEs that most significantly affect their educational and economic performance and (2) the right to receive economic benefits from contractual and other arrangements with the VIEs that could potentially be significant to the VIEs. We account for the acquisition of the right to control a VIE in accordance with ASC 805, “Business Combinations.”

The VIEs in Brazil, for 2019, and Mexico include several not-for-profit foundations that had insignificant revenues and operating expenses. Selected Consolidated Statements of Operations information for VIEs that are included in continuing operations was as follows, net of the charges related to the above-described contractual arrangements:

For the three months ended March 31, 2020 2019
Selected Statements of Operations information:
Revenues, by segment:
Brazil $ — $ —
Mexico 5 —
Andean 36,466 56,450
Revenues 36,471 56,450
Depreciation and amortization 5,924 6,096
Operating loss, by segment:
Brazil — (18)
Mexico (168) (97)
Andean (32,305) (27,220)
Operating loss (32,473) (27,335)
Net loss attributable to Laureate Education, Inc. (30,675) (24,200)

~~The following table reconciles the Net loss attributable to Laureate Education, Inc. as presented in the table above, to the amounts in our Consolidated Statements of Operations:~~

For the three months ended March 31, 2020 2019
Net (loss) income attributable to Laureate Education, Inc.:
Variable interest entities $ (30,675) $ (24,200)
Other operations (82,630) (45,211)
Corporate and eliminations 212,920 260,654
Net income (loss) attributable to Laureate Education, Inc. $ 99,615 $ 191,243

The following table presents selected assets and liabilities of the consolidated VIEs. Except for Goodwill, the assets in the table below include the assets that can be used only to settle the obligations for the VIEs. The liabilities in the table are liabilities for which the creditors of the VIEs do not have recourse to the general credit of Laureate.

March 31, 2020 December 31, 2019
VIE Consolidated VIE Consolidated
Balance Sheets data:
Cash and cash equivalents $ 145,502 $ 546,675 $ 157,003 $ 339,629
Current assets held for sale 18,900 72,415 16,050 83,800
Other current assets 258,350 692,935 173,072 519,498
Total current assets 422,752 1,312,025 346,125 942,927
Goodwill 140,673 1,501,042 159,957 1,701,495
Tradenames 55,434 1,069,084 61,691 1,119,454
Other intangible assets, net — 1,045 — 1,431
Operating lease right-of-use assets, net 62,851 768,747 65,761 861,878
Long-term assets held for sale 62,257 216,316 52,519 305,973
Other long-term assets 237,135 1,628,823 262,579 1,582,470
Total assets 981,102 6,497,082 948,632 6,515,628
Current liabilities held for sale 11,784 60,602 11,741 64,204
Other current liabilities 255,367 1,250,759 130,602 1,006,600
Long-term operating leases, less current portion 53,156 712,564 56,571 792,358
Long-term liabilities held for sale 39,199 70,988 29,666 124,914
Long-term debt and other long-term liabilities 36,010 1,820,398 28,619 1,711,106
Total liabilities 395,516 3,915,311 257,199 3,699,182
Total stockholders' equity 585,586 2,569,808 691,433 2,804,151
Total stockholders' equity attributable to Laureate Education, Inc. 585,586 2,583,122 691,433 2,816,963

~~The amounts classified as held-for-sale assets and liabilities in the table above relate to a VIE that is included in our Central America segment.~~

~~Chile - Higher Education Law~~

On May 29, 2018, a new Higher Education Law (the New Law) was enacted. Among other things, the New Law prohibits conflicts of interests and related party transactions involving universities and their controlling parties, with certain exceptions. These exceptions include the provision of services that are educational in nature or essential for the university’s purposes.

The New Law established a Superintendency of Higher Education, with authority to regulate institutions of higher education and promulgate regulations and procedures implementing the New Law. As of May 29, 2019, the New Law’s provisions regarding related party transactions came into force and the Superintendent has since issued further interpretive guidance and regulations. Immediately prior to these provisions coming into force, each of the Chilean non-profit universities and the relevant Laureate services provider reached an agreement to terminate the prior network services agreement in favor of an open bidding process, wherein unrelated third parties and Laureate-related providers were invited to compete in the provision of the range of services that are essential to the fulfillment of each of their academic missions. Each of the Chilean non-profit universities has completed all of the bidding and contractual processes subsequent to the May 2019 contract terminations. The Company participated in these open bid processes, conducted by a third party, and was judged to have submitted the superior bid in many of them. Awarded contracts entered into force once the applicable university’s board approved them or in January 2020, in the case of some of the educational services, due to the academic calendar. Within the ordinary regulatory course of supervision, the Company and the Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law. We do not believe that the New Law will change our relationship with our two technical-vocational institutions in Chile that are for-profit entities. Additionally, we will continue to evaluate our accounting treatment of the Chilean non-profit universities to determine whether we can continue to consolidate them.

COVID-19

The outbreak of COVID-19 has caused domestic and global disruption in operations for institutions of higher education. The long-term effect to the Company of the COVID-19 pandemic depends on numerous factors, including, but not limited to, the effect on student enrollment, tuition pricing, and collections in future periods, which cannot be fully quantified at this time. As of March 31, ~~2020~~2021 and through the date of this Form 10-Q, the Company evaluated its accounting estimates that require consideration of forecasted financial information, based on current information reasonably available to us. The forecast also includes certain estimates and assumptions around macroeconomic conditions and the timing of campuses reopening. While this evaluation did not result in a material effect to the Company’s Consolidated Financial Statements as of and for the three months ended March 31, ~~2020,~~2021, future evaluations could result in a material effect, including potential impairments, depending on the eventual impact to the Company of the COVID-19 pandemic ~~including but not limited to,~~and its effect on student enrollment, tuition pricing, and collections in future periods.

Recently Adopted Accounting Standards

Accounting Standards Update (ASU) No. ~~2016-13 (ASU 2016-13), Financial Instruments~~2019-12, Income Taxes (Topic 740) - ~~Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~Simplifying the Accounting for Income Taxes

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board ~~(FASB)~~(“FASB”) issued ASU ~~2016-13,~~2019-12, which ~~sets forth a “current expected credit loss” (CECL) model~~removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and ~~requires companies to measure all expected credit losses~~calculating income taxes in interim periods. The guidance also simplifies the accounting for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivablesfranchise taxes, transactions that result ~~from revenue transactions. This~~in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. The Company adopted ASU ~~was effective for Laureate beginning on January 1, 2020~~2019-12 in the first quarter of 2021 and ~~did not have a~~the adoption had no material impact onto our Consolidated Financial Statements. Laureate adopted this ASU using the modified retrospective transition method. Under this transition method, the new standard is applied from January 1, 2020 without restatement of comparative period amounts. The impact of transitioning to the new standard was immaterial and no adjustment was recorded to retained earnings for the cumulative effect of adopting this ASU on January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under Topic 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

~~ASU No. 2017-04 (ASU 2017-04), Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~

In January 2017, the FASB issued ASU 2017-04 in order to simplify the test for goodwill impairment by eliminating Step 2, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. Under the amendments in this ASU, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU was effective for Laureate beginning on January 1, 2020 and the adoption of this guidance did not have a material impact on our Consolidated Financial Statements. The Company's next annual goodwill impairment test will occur as of October 1, 2020.

Note 3. Revenue

Revenue Recognition

Laureate's revenues primarily consist of tuition and educational service revenues. We also generate other revenues from student fees, dormitory/residency fees and other education-related activities. 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, waivers and the fair value of any guarantees made by Laureate related to student financing programs. 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 collectibility 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.

The following table shows the components of Revenues by reportable segment and as a percentage of total ~~net~~ revenue for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


		Brazil		Mexico		Andean		Rest of World		Online & Partnerships		Corporate⁽¹⁾		Total							Mexico		Peru			Corporate(1)		Total
2021																		2021
Tuition and educational services																		Tuition and educational services	$	166,024	$	51,452		$	0	$	217,476	112	%
Other																		Other	23,522		9,583			1,806		34,911		18	%
Gross revenue																		Gross revenue	189,546		61,035			1,806		252,387		130	%
Less: Discounts / waivers / scholarships																		Less: Discounts / waivers / scholarships	(54,149)		(3,537)			0		(57,686)		(30)	%
Total																		Total	$	135,397	$	57,498		$	1,806	$	194,701	100	%
2020	2020																	2020
Tuition and educational services	Tuition and educational services	$	155,144	$	164,165	$	89,260	$	46,581	$	174,359	$	—	$	629,509	119	%	Tuition and educational services	$	164,165	$	31,295		$	0	$	195,460	101	%
Other	Other	1,983		27,216		11,693		1,770		11,786		1,080		55,528		11	%	Other	27,217		7,382			1,585		36,184		19	%
Gross revenue	Gross revenue	157,127		191,381		100,953		48,351		186,145		1,080		685,037		130	%	Gross revenue	$	191,382	$	38,677		$	1,585	$	231,644	120	%
Less: Discounts / waivers / scholarships	Less: Discounts / waivers / scholarships	(73,446)		(37,174)		(11,445)		(4,775)		(29,640)		—		(156,480)		(30)	%	Less: Discounts / waivers / scholarships	(37,175)		(2,150)			0		(39,325)		(20)	%
Total	Total	$	83,681	$	154,207	$	89,508	$	43,576	$	156,505	$	1,080	$	528,557	100	%	Total	$	154,207	$	36,527		$	1,585	$	192,319	100	%
2019
Tuition and educational services		$	201,254	$	164,802	$	137,403	$	34,589	$	181,050	$	—	$	719,098	120	%
Other		1,925		26,496		15,847		1,945		12,008		491		58,712		9	%
Gross revenue		203,179		191,298		153,250		36,534		193,058		491		777,810		129	%
Less: Discounts / waivers / scholarships		(93,210)		(34,834)		(14,308)		(3,102)		(31,284)		—		(176,738)		(29)	%
Total		$	109,969	$	156,464	$	138,942	$	33,432	$	161,774	$	491	$	601,072	100	%

⁽¹⁾ Includes the elimination of intersegment revenues.

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 ~~$535,408~~$110,504 and ~~$432,910~~$138,738 as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The ~~increase~~decrease in the contract assets balance at March 31, ~~2020~~2021 compared to December 31, ~~2019 is~~2020 was primarily driven by ~~our enrollment cycles.~~collections, in particular the repayment of past-due 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 ~~$505,716~~$85,881 and ~~$216,816~~$47,180 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, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The increase in the contract liability balance during the period ended March 31, ~~2020 is~~2021 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period. Revenue recognized for the three months ended March 31, ~~2020~~2021 that was included in the contract liability balance at the beginning of the year was approximately ~~$149,300.~~$30,948.

Note 4. Discontinued Operations and Assets Held for Sale

As discussed in Note 1, Description of Business, ~~on August 9, 2018,~~ the ~~Company announced that it planned to focus on its~~Company’s remaining principal markets are Mexico and ~~would divest certain of its other markets~~Peru~~. The principal markets that would remain~~ (the Continuing Operations)~~included~~ ~~Brazil, Chile, Mexico, and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand. At the time of the announcement on~~ ~~August 9, 2018, the~~. All remaining markets are being divested ~~by sale (~~(the Discontinued Operations). In the tables below, certain classification changes have been made to the prior year amounts in order to conform to the current year presentation. On the Consolidated Statements of Operations, the results from the Discontinued ~~Operations)~~ ~~included the institutions in Portugal and Spain,~~Operations, which ~~were part of the Andean segment, all remaining institutions~~ in the ~~Central America segment, and all remaining institutions~~prior year were presented in ~~the Rest of World segment, except for Australia, New Zealand and the managed institutions in the Kingdom of Saudi Arabia and China. The institutions in the Kingdom of Saudi Arabia~~ were managed under a contract that expired at the end of August 2019 and was not renewed. Accordingly, these institutions were disposed of other than by sale on August 31, 2019 and, beginning in the third quarter of 2019,two lines, have been ~~included in Discontinued Operations~~combined into one line labeled Loss from discontinued operations, net of tax, for all periods presented. ~~As of March 31, 2020, 1 VIE institution in Honduras is included in the Discontinued Operations.~~

The goal of the divestitures was to create a more focused and simplified business model and generate proceeds to be used for further repayment of long-term debt. As described in Note 5, Dispositions, a number of sale transactions closed during 2019 and 2020. The timing and ability to complete any of the remaining transactions is uncertain and will be subject to market and other conditions, which may include regulatory approvals and consents of third parties.

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


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
Revenues	Revenues	$	33,246	$	223,340	Revenues	$	239,750	$	369,484
Depreciation and amortization		—		435
Depreciation and amortization expense						Depreciation and amortization expense	0		(24,511)
Share-based compensation expense	Share-based compensation expense	3		162		Share-based compensation expense	(242)		(445)
Other direct costs						Other direct costs	(201,197)		(378,881)
Loss on impairment of assets	Loss on impairment of assets	—		—		Loss on impairment of assets	(1,064)		0
Other direct costs		27,548		152,437
Operating income		5,695		70,306
Other non-operating (loss) income		(8,017)		3,164
Pretax (loss) income of discontinued operations		(2,322)		73,470
Income tax expense		(1,482)		(10,141)
(Loss) income from discontinued operations, net of tax		$	(3,804)	$	63,329
Other non-operating expense						Other non-operating expense	(11,163)		(55,057)
Loss on sale of discontinued operations before taxes, net						Loss on sale of discontinued operations before taxes, net	(16,837)		(23,553)
Pretax income (loss) of discontinued operations						Pretax income (loss) of discontinued operations	9,247		(112,963)
Income tax (expense) benefit						Income tax (expense) benefit	(9,665)		5,183
Loss from discontinued operations, net of tax						Loss from discontinued operations, net of tax	$	(418)	$	(107,780)

Operating cash flows of discontinued operations	Operating cash flows of discontinued operations	$	5,911	$	19,197	Operating cash flows of discontinued operations	$	31,117	$	47,381
Investing cash flows of discontinued operations	Investing cash flows of discontinued operations	$	(200)	$	(7,873)	Investing cash flows of discontinued operations	$	(4,858)	$	(14,158)
Financing cash flows of discontinued operations	Financing cash flows of discontinued operations	$	(691)	$	(15,507)	Financing cash flows of discontinued operations	$	(13,559)	$	20,797

Loss Recognized on Brazil Held-For-Sale 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 discussed further below.

The assets and liabilities of the Discontinued Operations, which are subject to finalization, have been classified as held for sale as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, in accordance with ASC 205. The assets and liabilities are recorded at the lower of their carrying values or their estimated ~~‘fair~~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 tables:

March 31, 2020 December 31, 2019
Assets of Discontinued Operations
Cash and cash equivalents $ 46,839 $ 55,401
Receivables, net 18,652 14,762
Property and equipment, net 131,058 182,530
Goodwill 9,447 9,753
Tradenames 6,810 6,890
Operating lease right-of-use assets, net 26,547 59,231
Other assets 42,456 52,730
Subtotal: assets of Discontinued Operations $ 281,809 $ 381,297
Other assets classified as held for sale
Property and equipment, net 6,922 8,476
Total assets held for sale $ 288,731 $ 389,773

March 31, 2020 December 31, 2019
Liabilities of Discontinued Operations
Deferred revenue and student deposits $ 14,396 14,287
Operating leases, including current portion 27,589 63,304
Long-term debt and finance leases, including current portion 34,420 55,495
Other liabilities 55,185 56,032
Total liabilities held for sale $ 131,590 $ 189,118

~~Sale Agreement Pending Closure as of March 31, 2020~~

~~Inti Education Holdings Sdn. Bhd. (Inti Holdings)~~

On February 28, 2020, Exeter Street Holdings Sdn. Bhd., a Malaysia corporation (the Malaysia Seller), and LEI Holdings, LTD., a Hong Kong corporation (the Malaysia Seller Guarantor), each of which is an indirect wholly owned subsidiary of Laureate, entered into a Share Sale & Purchase Agreement (the Malaysia Sale Agreement) with HOPE Education Group (Hong Kong) Company Limited (the Malaysia Purchaser) and HOPE Education Group Co. Ltd. (the Malaysia Purchaser Guarantor). Pursuant to the Malaysia Sale Agreement, the Malaysia Purchaser will purchase from the Malaysia Seller all of the issued and outstanding shares in the capital of Inti Education Holdings Sdn. Bhd., a Malaysia corporation (Inti Holdings), the Malaysia Seller’s Guarantor will guarantee certain obligations of the Malaysia Seller and the Malaysia Purchaser’s Guarantor will guarantee certain obligations of the Malaysia Purchaser. Inti Holdings is the indirect owner of INTI University and Colleges, a higher education institution with 5 campuses in Malaysia. In connection with the Malaysia Sale Agreement, the Malaysia Seller entered into a separate agreement with the current minority owner of the equity of Inti Holdings relating to the purchase by the Malaysia Seller of the minority owner’s 10.10% interest in Inti Holdings, the closing of which is a precondition to the closing of the transaction under the Agreement.

The total purchase price, including the payment to the current minority owner, will be $140,000. The closing of the transaction is subject to customary closing conditions, including approval by regulators in Malaysia. In connection with the signing of the Malaysia Sale Agreement, the Malaysia Purchaser paid to the Malaysia Seller a cash deposit of $5,000, which the Company has recorded as a liability pending the closing of the sale and is included in Receipts from sales of discontinued operations, net of cash sold, and property and equipment within investing activities in the Consolidated Statement of Cash Flows for the three months ended March 31, 2020.


	March 31, 2021		December 31, 2020
Assets of Discontinued Operations
Cash and cash equivalents	$	272,108	$	270,164
Receivables, net	101,962		113,386
Property and equipment, net	171,840		259,471
Goodwill and Tradenames	1,163,536		1,202,496
Operating lease right-of-use assets, net	101,572		136,806
Other assets	217,545		183,742
Valuation allowance on held-for-sale disposal groups	(222,517)		(248,630)






Total assets held for sale	$	1,806,046	$	1,917,435

1310

~~Note 5. Dispositions~~


	March 31, 2021		December 31, 2020
Liabilities of Discontinued Operations
Deferred revenue and student deposits	$	116,489	$	87,793
Operating leases, including current portion	114,582		151,413
Long-term debt, seller notes and finance leases, including current portion	116,646		171,451
Other liabilities	265,993		291,599
Total liabilities held for sale	$	613,710	$	702,256

Discontinued Operations with Signed Sale ~~of Costa Rica~~Agreements Pending Closure at March 31, 2021

Brazil Operations

On ~~January 10,~~November 2, 2020, the Company announced that it had entered into a definitive agreement with Ânima Holding S.A. (Anima) for the sale of its Brazilian operations. The transaction value is approximately 4,400,000 Brazilian Reals (approximately $765,000 at the time of signing), including 3,800,000 Brazilian Reals (approximately $660,700 at the time of signing) in cash consideration, which is subject to certain adjustments, and the assumption of net indebtedness. Under the agreement with Anima, the Company will be entitled to receive up to 203,000 Brazilian Reals (approximately $35,300 at the time of signing) in additional cash consideration if certain metrics are achieved following the closing. The transaction is targeted to close during the second quarter of 2021, subject to regulatory approval.

Walden

On September 11, 2020, Laureate ~~International B.V.~~entered into a Membership Interest Purchase Agreement (the Walden Sale Agreement) with Adtalem Global Education Inc., a ~~Netherlands private~~Delaware corporation (the Walden Purchaser). Pursuant to the Walden Sale Agreement, the Company has agreed to sell to the Walden Purchaser all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company ~~(Laureate International),~~and a wholly owned subsidiary of the Company and its subsidiary, Walden University, LLC, a Florida limited liability company and an indirect wholly owned subsidiary of the Company ~~entered into, and consummated~~(together with Walden e-Learning, LLC, the ~~transactions contemplated by, an Equity Purchase Agreement (the Costa Rica Agreement) with SP Costa Rica Holdings, LLC,~~Walden Group), in exchange for a ~~Delaware limited liability company (the Costa Rica Buyer).~~purchase price of $1,480,000 in cash, subject to certain adjustments set forth in the Walden Sale Agreement.

~~Pursuant~~The closing of this transaction is expected to occur toward the end of 2021 and is subject to customary closing conditions, including regulatory approval by the U.S. Department of Education and the Higher Learning Commission and required antitrust approvals. Under certain specified circumstances, the Walden Purchaser may be required to pay the Company a termination fee of $88,000, including if the Walden Purchaser terminates the Walden Sale Agreement ~~the Costa Rica Buyer purchased from Laureate International (i) all~~as a result of the ~~equity units~~imposition by the U.S. Department of Education ~~Holding Costa Rica, S.R.L., which owned, directly~~of certain specified restrictions, or ~~indirectly, all~~if Laureate terminates the Walden Sale Agreement as a result of the ~~equity units of Lusitania S.R.L., Universidad ULatina, S.R.L. (ULatina) and Universidad Americana UAM, S.R.L. (collectively, Laureate Costa Rica) and (ii) a note due from ULatina~~Walden Purchaser’s failure to ~~Laureate International. Consideration for~~consummate the transaction ~~consisted~~upon satisfaction of ~~$15,000 paid at~~the closing conditions.

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), and ~~up to $7,000 to be paid within the next two years if Laureate Costa Rica meets certain performance metrics. The~~received proceeds ~~received at closing,~~of approximately $26,000, net of cash sold and closing costs. Under the transaction ~~fees, were approximately $3,300. Additionally, Laureate Costa Rica retained obligations~~terms, additional consideration of $2,000 was paid into an escrow account at closing and, assuming certain conditions are met, will be released to ~~pay approximately $30,000 in finance lease indebtedness for which the Costa Rica Buyer has no recourse to Laureate International. During the third quarter of 2019,~~ the Company ~~recorded an impairment loss of approximately $25,000~~based on the ~~long-lived assets at the Costa Rica institutions, in order to write down the carrying value of those assets to their estimated fair value, per ASC 360-10. Upon completion of the sale in January 2020,~~following schedule: 50% after 18 months, 25% after 24 months and 25% after 36 months. At closing, the Company recognized ~~a pre-tax loss~~an after-tax gain of approximately ~~$17,200,~~$500, which ~~related to subsequent changes in net carrying values and~~ is included in ~~loss on sales of~~Loss from discontinued operations, onnet of tax in the Consolidated Statement of Operations for the three months ended March 31, ~~2020.~~2021.

~~The Costa Rica Buyer is controlled by certain affiliates~~Receipt of Sterling Capital Partners II, L.P. (Sterling II). Sterling II has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement, and Steven Taslitz currently serves as the Sterling-designated director. Mr. Taslitz did not participate in the Laureate Board of Directors’ consideration of the transaction, which was approved by Laureate's Audit Committee as a related party transaction.

Remaining Escrow Receivable from Sale of ~~NewSchool of Architecture and Design, LLC (NSAD)~~China Operations

On ~~March 6, 2020,~~January 25, 2018, the Company completed the sale of ~~NSAD. Under~~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 ~~membership interests purchase agreement, Exeter Street Holdings, LLC, an indirect wholly owned subsidiary~~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 ~~sold 100%~~received 168,284 Hong Kong Dollars

(approximately $21,650 at the date of receipt), which represented payment in full for the remainder of the outstanding membership interests of NSAD to Ambow NSAD, Inc. and Ambow Education Holding, Ltd. (the NSAD Buyers) for a purchase price of one dollar, subject to certain adjustments. NSAD is a higher education institution located in California that offers undergraduate and graduate degrees and non-degree certificates in design and construction management. Underescrow account. Accordingly, the terms of the agreement, the Company agreed to pay subsidies to the NSAD Buyers totaling approximately $7,300, of which all but $2,800 was settled at the closing date. The remaining subsidy of $2,800 will be paid to the NSAD Buyers ratably on a quarterly basis over the next four years. The Company recognized a ~~pre-tax loss on the sale~~gain of approximately ~~$5,700,~~$13,600, which is included in ~~loss on sales of~~Loss from discontinued operations, onnet of tax in the Consolidated Statement of Operations for the three months ended March 31, ~~2020.~~

~~Note 6. Due to Shareholders of Acquired Companies~~

The amounts due to shareholders of acquired companies generally arise in connection with Laureate’s acquisition of a majority or all of the ownership interest of these companies. Promissory notes payable to the sellers of acquired companies, referred to as “seller notes,” are commonly used as a means of payment for business acquisitions. Seller note payments are classified as Payments of deferred purchase price for acquisitions within financing activities in our Consolidated Statements of Cash Flows. The amounts due to shareholders of acquired companies, currencies, and interest rates applied were as follows:

March 31, 2020 December 31, 2019 Nominal Currency Interest
Rate %
Universidade Anhembi Morumbi (UAM Brazil) $ 16,678 $ 20,179 BRL CDI + 2%
Faculdade Porto-Alegrense (FAPA) 191 230 BRL IGP-M
IADE Group — 1,109 EUR 3%
Total due to shareholders of acquired companies 16,869 21,518
Less: Current portion of due to shareholders of acquired companies 8,587 11,523
Due to shareholders of acquired companies, less current portion $ 8,282 $ 9,995


~~BRL: Brazilian Real~~						~~CDI: Certificados de Depósitos Interbancários (Brazil)~~
~~EUR: European Euro~~						~~IGP-M: General Index of Market Prices (Brazil)~~

2021.

Note 7.6. Business and Geographic Segment Information

Laureate’s educational services are offered through ~~6 operating~~2 reportable segments: ~~Brazil,~~ Mexico ~~Andean, Central America, Rest of World~~ and ~~Online & Partnerships.~~Peru (formerly Andean). Following the ~~March~~September 2020 sale of ~~NSAD, Laureate’s last remaining U.S. campus-based institution,~~Chile, the ~~Central America & U.S. Campuses~~former Andean segment is now called the ~~Central America~~Peru segment. Laureate determines its ~~operating~~ segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.

Our ~~campus-based~~ 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 are increasingly utilizing online and hybrid (a combination of ~~online~~online and in-classroom) courses and programs to deliver their curriculum. In response to the COVID-19 pandemic, we ~~have~~have temporarily ~~transitioned~~transitioned the educational delivery method at all of our ~~campus-based~~ institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside of the traditional classroom setting. ~~Many of our largest campus-based operations~~The Mexico and Peru markets are ~~in developing markets which are experiencing~~characterized by what we believe is a ~~growing~~significant imbalance between supply and demand. The demand for higher education ~~based on favorable demographics~~is large and ~~increasing secondary completion rates, driving increases in participation rates~~growing and ~~resulting in continued~~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 ~~number~~significant personal and economic benefits gained by graduates of higher education ~~students. Traditional~~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 ~~students (defined~~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 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 ~~18-24 year olds) have historically been served by public universities, which have limited capacity~~the Mexican and ~~are often underfunded, resulting in an inability to meet the growing student demand and employer requirements. This supply and demand imbalance has created a market opportunity for~~Peruvian markets mature. Essentially all of our revenues were generated from private ~~sector participants. Most students finance their own education. However,~~pay sources as there are ~~some~~no material government-sponsored ~~student financing~~loan programs ~~which are discussed below. These campus-based segments include Brazil,~~in Mexico ~~Andean, Central America, and Rest of World.~~or Peru. Specifics related to ~~each~~both of ~~these campus-based~~our reportable segments ~~and our Online & Partnerships segment~~ are discussed below.

~~In Brazil, approximately 73%~~Private education providers in Mexico constitute 35% of ~~post-secondary students are enrolled~~the total higher-education market. The private sector plays a meaningful role in ~~private~~ higher education, ~~institutions. While the federal government defines the national curricular guidelines, institutions are licensed to operate~~bridging supply and demand imbalances created by ~~city. Laureate owns 12 institutions in seven states throughout Brazil, with~~ a particularly strong presence in the competitive São Paulo market. Many students finance their own education while others rely on the government-sponsored programs such as Prouni and Fundo de Financiamento Estudantil (FIES).

~~Public universities in Mexico enroll approximately two-thirds~~lack of ~~students attending post-secondary education. However, many~~capacity at public ~~institutions are faced with capacity constraints or the quality of the education is considered low.~~universities. Laureate owns 2 institutions and is present throughout the country with a footprint of over 4035 campuses. Each institution in Mexico has a national license. Students in our Mexican institutions typically finance their own education.

The Andean segment includes institutions in Chile and Peru. In Chile, private universities enroll approximately 72% of post-secondary students and there are government-sponsored student financing programs. In Peru, ~~the public sector plays a significant role, but~~ private universities are increasingly providing the capacity to meet growing ~~demand.~~

~~The Central America segment includes an institution in Honduras, which is included in Discontinued Operations. Students in Central America typically finance their own education~~

~~The Rest~~demand and constitute 72% of ~~World segment includes campus-based~~the total higher-education market. Laureate owns 3 institutions in Asia Pacific with operations in Australia, Malaysia and New Zealand. Additionally, the Rest of World segment manages 1 institution in China through a joint venture arrangement. The institution in Malaysia is included in Discontinued Operations.

The Online & Partnerships segment includes fully online institutions that offer profession-oriented degree programs in the United States through Walden University (Walden), a U.S.-based accredited institution, and through the University of Liverpool and the University of Roehampton in the United Kingdom. These online institutions primarily serve working adults with undergraduate and graduate degree program offerings. Students in the United States finance their education in a variety of ways, including Title IV programs. We no longer accept new enrollments at the University of Liverpool and the University of Roehampton, which are in a teach-out process.Peru.

As discussed in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale, a number of our subsidiaries have met the requirements to be classified as ~~discontinued operations, including the entire~~ ~~Central America segment~~.Discontinued Operations. As a result, the ~~operations of the~~ ~~Central America segment~~ ~~has been excluded from the segment information for all periods presented. In addition, the portion of the Rest of World reportable segment that is included in~~ Discontinued Operations ~~has also~~have been excluded from the segment information for all periods presented.

Intersegment 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 intersegment 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: ~~Gain (loss)~~Loss on ~~sale or~~ disposal of subsidiaries, net, Foreign currency exchange gain, ~~(loss),~~ net, Other income (expense) ~~income,~~, net, Gain on derivatives, Loss on debt extinguishment, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, Share-based compensation expense and expenses related to our Excellence-in-Process (EiP) initiative. EiP is an enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs incurred in connection with the planned dispositions described in Note 4, Discontinued Operations and Assets Held for Sale, and the completed dispositions described in Note 5, Dispositions. ~~Beginning in the third quarter of 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.~~

When we review Adjusted EBITDA on a segment basis, we exclude intercompany revenues and expenses related to network

fees and royalties between our segments, which eliminate in consolidation. We use total assets as the measure of assets for reportable segments.

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


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
Revenues	Revenues					Revenues
Brazil		$	83,681	$	109,969
Mexico	Mexico	154,207		156,464		Mexico	$	135,397	$	154,207
Andean		89,508		138,942
Rest of World		43,576		33,432
Online & Partnerships		156,505		161,774
Peru						Peru	57,498		36,527
Corporate	Corporate	1,080		491		Corporate	1,806		1,585
Revenues	Revenues	$	528,557	$	601,072	Revenues	$	194,701	$	192,319
Adjusted EBITDA of reportable segments	Adjusted EBITDA of reportable segments					Adjusted EBITDA of reportable segments
Brazil		$	(19,199)	$	(30,656)
Mexico	Mexico	23,310		25,828		Mexico	$	17,269	$	23,310
Andean		(62,150)		(33,243)

Rest of World		4,837		(3,359)
Online & Partnerships		43,281		48,576
Peru						Peru	11,594		(26,667)
Total Adjusted EBITDA of reportable segments	Total Adjusted EBITDA of reportable segments	(9,921)		7,146		Total Adjusted EBITDA of reportable segments	28,863		(3,357)
Reconciling items:	Reconciling items:					Reconciling items:
Corporate	Corporate	(26,953)		(36,720)		Corporate	(19,202)		(25,993)
Depreciation and amortization expense	Depreciation and amortization expense	(44,161)		(47,209)		Depreciation and amortization expense	(22,761)		(19,650)
Loss on impairment of assets	Loss on impairment of assets	(3,768)		—		Loss on impairment of assets	(56,650)		(3,768)
Share-based compensation expense	Share-based compensation expense	(1,981)		(2,987)		Share-based compensation expense	(1,334)		(1,539)
EiP expenses	EiP expenses	(30,351)		(12,259)		EiP expenses	(15,307)		(22,779)
Operating loss	Operating loss	(117,135)		(92,029)		Operating loss	(86,391)		(77,086)
Interest income	Interest income	2,667		3,553		Interest income	711		622
Interest expense	Interest expense	(36,110)		(54,653)		Interest expense	(23,518)		(25,290)
Loss on debt extinguishment	Loss on debt extinguishment	—		(10,622)		Loss on debt extinguishment	(13)		0
Gain on derivatives	Gain on derivatives	802		5,183		Gain on derivatives	29,330		802
Other (expense) income, net		(102)		397
Foreign currency exchange gain (loss), net		35,944		(4,746)
Gain on sales of subsidiaries, net		2,729		—
Other income (expense), net						Other income (expense), net	34		(81)
Foreign currency gain, net						Foreign currency gain, net	28,183		78,716
Loss on disposal of subsidiaries, net						Loss on disposal of subsidiaries, net	0		(1,800)
Loss from continuing operations before income taxes and equity in net income of affiliates	Loss from continuing operations before income taxes and equity in net income of affiliates	$	(111,205)	$	(152,917)	Loss from continuing operations before income taxes and equity in net income of affiliates	$	(51,664)	$	(24,117)


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets					Assets
Brazil		$	883,050	$	1,068,362
Mexico	Mexico	1,077,325		1,315,377		Mexico	$	1,186,678	$	1,278,198
Andean		1,815,876		1,715,145

Rest of World		209,778		194,409
Online & Partnerships		1,253,547		1,303,811
Peru						Peru	623,988		623,294
Corporate and Discontinued Operations	Corporate and Discontinued Operations	1,257,506		918,524		Corporate and Discontinued Operations	2,673,382		3,069,402
Total assets	Total assets	$	6,497,082	$	6,515,628	Total assets	$	4,484,048	$	4,970,894

Note 8.7. Goodwill and Loss on Impairment of Assets

The change in the net carrying amount of Goodwill from December 31, ~~2019~~2020 through March 31, ~~2020~~2021 was composed of the following items:

Brazil Mexico Andean Rest of World Online & Partnerships Total
Balance at December 31, 2019 $ 388,160 $ 525,256 $ 241,327 $ 86,012 $ 460,740 $ 1,701,495
Acquisitions — — — — — —
Dispositions — — — — — —
Impairments — — — — — —
Currency translation adjustments (71,706) (99,375) (19,300) (10,072) — (200,453)
Adjustments to prior acquisitions — — — — — —
Balance at March 31, 2020 $ 316,454 $ 425,881 $ 222,027 $ 75,940 $ 460,740 $ 1,501,042


	Mexico		Peru		Total
Balance at December 31, 2020	$	500,250	$	74,582	$	574,832




Currency translation adjustments	(20,522)		(2,557)		(23,079)

Balance at March 31, 2021	$	479,728	$	72,025	$	551,753

Impairment of Laureate Tradename

During the three months ended March 31, 2021, the Company recognized an impairment charge of $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 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 of $18,700 will be amortized prospectively over the remainder of 2021, which is its estimated useful life.

Note 9.8. Debt

Outstanding long-term debt was as follows:


		March 31, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Senior long-term debt:	Senior long-term debt:					Senior long-term debt:
Senior Secured Credit Facility (stated maturity date October 2024)	Senior Secured Credit Facility (stated maturity date October 2024)	$	409,147	$	202,400	Senior Secured Credit Facility (stated maturity date October 2024)	$	0	$	0
Senior Notes (stated maturity date May 2025)	Senior Notes (stated maturity date May 2025)	800,000		800,000		Senior Notes (stated maturity date May 2025)	798,725		798,725
Total senior long-term debt	Total senior long-term debt	1,209,147		1,002,400		Total senior long-term debt	798,725		798,725
Other debt:	Other debt:					Other debt:
Lines of credit	Lines of credit	57,237		14,542		Lines of credit	23,016		59,014
Notes payable and other debt	Notes payable and other debt	307,548		328,153		Notes payable and other debt	129,480		138,630
Total senior and other debt	Total senior and other debt	1,573,932		1,345,095		Total senior and other debt	951,221		996,369
Finance lease obligations and sale-leaseback financings	Finance lease obligations and sale-leaseback financings	91,604		100,113		Finance lease obligations and sale-leaseback financings	50,357		52,639
Total long-term debt and finance leases	Total long-term debt and finance leases	1,665,536		1,445,208		Total long-term debt and finance leases	1,001,578		1,049,008
Less: total unamortized deferred financing costs	Less: total unamortized deferred financing costs	62,596		66,069		Less: total unamortized deferred financing costs	50,592		53,292
Less: current portion of long-term debt and finance leases	Less: current portion of long-term debt and finance leases	191,254		118,822		Less: current portion of long-term debt and finance leases	62,805		95,818
Long-term debt and finance leases, less current portion	Long-term debt and finance leases, less current portion	$	1,411,686	$	1,260,317	Long-term debt and finance leases, less current portion	$	888,181	$	899,898

~~In March 2020, we fully drew down the $410,000~~The Company maintains a revolving credit facility under our Senior Secured Credit Facility that has a borrowing capacity of $410,000 and has a maturity date of October 7, 2024. As of March 31, 2021 and December 31, 2020, 0 amounts were borrowed on this facility.

As described in ~~order to increase our cash position and preserve financial flexibility in light~~Note 19, Subsequent Events, on May 4, 2021, the Company redeemed $500,000 aggregate principal amount of its 8.250% Senior Notes due 2025 (the Senior Notes) at a redemption price of 104.125% of the ~~COVID-19 pandemic.~~principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date. Additionally, the Company has notified the holders of its Senior Notes of its election to redeem the remaining $298,725 aggregate principal amount of the Senior Notes. Among other conditions, the redemption is contingent on the sale of Brazil operations, which is targeted to close during the second quarter of 2021. As of March 31, 2021, the amount of unamortized deferred financing costs associated with the Senior Notes was approximately $45,700. Following completion of these redemptions, the Company will have repaid the entire outstanding principal amount of the Senior Notes.

Estimated Fair Value of Debt

The estimated fair value of our debt was determined using observable market prices as the majority of our securities, including the Senior Secured Credit Facility and the Senior Notes due 2025, are traded in a brokered market. The fair value of our remaining debt instruments approximates carrying value based on their terms. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~ 2020,

our long-term debt was classified as Level 2 within the fair value hierarchy, based on the frequency and volume of trading in the brokered market. The estimated fair value of our debt was as follows:

March 31, 2020 December 31, 2019
Carrying amount Estimated fair value Carrying amount Estimated fair value
Total senior and other debt $ 1,573,932 $ 1,566,932 $ 1,345,095 $ 1,406,954


	March 31, 2021				December 31, 2020
	Carrying amount		Estimated fair value		Carrying amount		Estimated fair value
Total senior and other debt	$	951,221	$	988,162	$	996,369	$	1,043,294

Certain Covenants

As of March 31, ~~2020,~~2021, our senior long-term debt 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 Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement) provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, to exceed 3.50x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter. The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, is not greater than 4.75x 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 March 31, ~~2020,~~2021, these conditions were satisfied and, therefore, we were ~~in compliance with~~not subject to the leverage ~~ratio covenant.~~ratio. In addition, ~~notes payable~~indebtedness at some of our locations contain financial maintenance covenants. We ~~are~~were in compliance with these ~~covenants.~~covenants as of March 31, 2021.

Note ~~10.~~9. Leases

Laureate conducts a significant portion of its operations at leased facilities. These facilities include our corporate headquarters, other office locations, and many of Laureate's higher education facilities. 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. ~~As a result of adopting ASC Topic 842 on January 1, 2019, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below.~~

Finance Leases

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 sheet.~~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 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. 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.

Corporate Office Lease Termination

In March 2021, the Company exercised its one-time right under the operating lease agreement for its 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 is required to pay an early termination fee of approximately $1,200, half of which was paid in March 2021, and half of which is due by June 30, 2022. Accordingly, during the first quarter of 2021, the Company remeasured the

operating lease liability, including the early termination fee, and recorded a reduction in the ROU asset and the operating lease liability of approximately $14,900.

Note ~~11.~~10. Commitments and Contingencies

~~Noncontrolling Interest Holder Put Arrangements~~

The following section provides a summary table and description of our noncontrolling interest holder put arrangements, which relate to Discontinued Operations, that Laureate had outstanding as of March 31, 2020. Laureate has elected to accrete changes in the arrangements’ redemption values over the period from the date of issuance to the earliest redemption date. The redeemable noncontrolling interests are recorded at the greater of the accreted redemption value or the traditional noncontrolling interest. Until the first exercise date, the put instruments’ reported values may be lower than the final amounts that will be required to settle the minority put arrangements.

If the minority put arrangements were all exercised at March 31, 2020, Laureate would be obligated to pay the noncontrolling interest holders an estimated amount of $10,249, as summarized in the following table:

Nominal Currency First Exercisable Date Estimated Value as of March 31, 2020 redeemable within 12-months Reported
Value
Noncontrolling interest holder put arrangements
INTI Education Holdings Sdn Bhd (Inti Holdings) - 10.10% MYR Current $ 10,249 $ 10,249
Total noncontrolling interest holder put arrangements 10,249 10,249
Puttable common stock - not currently redeemable USD * — 1,714
Total redeemable noncontrolling interests and equity $ 10,249 $ 11,963

* Contingently redeemable

~~MYR: Malaysian Ringgit~~

Laureate’s noncontrolling interest put arrangements are specified in agreements with each noncontrolling interest holder. The terms of these agreements determine the measurement of the redemption value of the put options based on a non-GAAP measure of earnings before interest, taxes, depreciation and amortization (EBITDA, or recurring EBITDA), the definition of which varies for each particular contract.

Loss 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.

Contingent Liabilities for Taxes

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Laureate has recorded cumulative liabilities totaling ~~$37,245~~$35,030 and ~~$44,595,~~$38,355, respectively, for taxes other-than-income tax, principally payroll-tax-related uncertainties recorded at the time of an acquisition, of which ~~$637~~$34,514 and ~~$2,893,~~$37,794, respectively, were classified as held for sale. The changes in this recorded liability are related to acquisitions, interest and penalty accruals, changes in tax laws, expirations of statutes of limitations, settlements and changes in foreign currency exchange rates. The terms of the statutes of limitations on these contingencies vary but can be up to 10 years. These liabilities were included in current and long-term liabilities on the Consolidated Balance Sheets. Changes in the recorded values of non-income tax contingencies impact operating income and interest expense, while changes in the related indemnification assets impact only operating income. ~~The~~For Continuing Operations, the total decrease to operating income for adjustments to non-income tax contingencies and indemnification assets was ~~$6,514~~$13,349 and ~~$4,561,~~$6,607, respectively, for the three months ended March 31, ~~2020~~2021 and ~~2019.~~2020.

In addition, as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Laureate has recorded cumulative liabilities for income tax contingencies of ~~$42,929~~$53,162 and ~~$51,442,~~$40,668, respectively, of which ~~$7,009~~$9,493 and ~~$6,996,~~$11,752, respectively, were classified as held for sale. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, indemnification assets primarily related to acquisition contingencies were ~~$52,512~~$38,471 and ~~$69,040.~~$55,940, respectively, of which $37,340 and $40,877, respectively, were classified as held for sale. These indemnification assets primarily cover contingencies for income taxes and taxes other-than-income taxes. We have also recorded receivables, which are classified as held for sale, of approximately ~~$17,000~~$13,000 and ~~$19,000~~$14,000 as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, from the former owner of ~~one~~1 of our Brazil institutions which is guaranteed by future rental payments to the former owner.

We have identified certain contingencies, primarily tax-related, that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable. In most cases, Laureate has received indemnifications from the former owners and/or noncontrolling interest holders of the acquired businesses for contingencies, and therefore, we do not believe we will sustain an economic loss even if we are required to pay these additional amounts. In cases where we are not indemnified, the unrecorded contingencies are not individually material and are primarily in ~~Brazil.~~Brazil, which is now classified in Discontinued Operations. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies in Brazil could be up to approximately ~~$42,000~~$50,000 if the outcomes were unfavorable in all cases.

Other 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 March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, approximately ~~$31,100~~$8,000 and ~~$31,400,~~ $8,300, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets. In addition, as of March 31, 2021 and December 31, 2020, approximately $22,200 and $23,800, respectively, of loss contingencies were classified as held for sale.

~~Material~~ Guarantees ~~– Student Financing~~

The accredited Chilean institutions in the Laureate network also participate in a government-sponsored student financing program known as Crédito con Aval del Estado (the CAE Program). The CAE Program was formally implemented by the Chilean government in 2006 to promote higher education in Chile for lower socio-economic level students in good academic standing. The CAE Program involves tuition financing and guarantees that are provided by our institutions and the government. As part of the CAE Program, these institutions provide guarantees which result in contingent liabilities to third-party financing institutions, beginning at 90% of the tuition loans made directly to qualified students enrolled through the CAE Program and declining to 60% over time. The guarantees by these institutions are in effect during the period in which the student is enrolled, and the guarantees are assumed entirely by the government upon the student’s graduation. When a student leaves one of Laureate's institutions and enrolls in another CAE-qualified institution, the Laureate institution will remain guarantor of the tuition loans that have been granted up to the date of transfer, and until the student's graduation from a CAE-qualified institution. The maximum potential amount of payments our institutions could be required to make under the CAE Program was approximately $430,000 and $474,000 at March 31, 2020 and December 31, 2019, respectively. This maximum potential amount assumes that all students in the CAE Program do not graduate, so that our guarantee would not be assigned to the government, and that all students default on the full amount of the CAE-qualified loan balances. As of March 31, 2020 and December 31, 2019, we recorded $37,969 and $30,887, respectively, as estimated long-term guarantee liabilities for these obligations. In accordance with Topic 326, the provision includes an estimated expected credit loss over the contractual period in which the Company is exposed to credit risk, and is recorded at inception.

~~Material Guarantees – Other~~

Laureate acquired the remaining 49% ownership interest in UAM Brazil in April 2013. As part of the agreement to purchase the 49% ownership interest, Laureate pledged 49% of its total shares in UAM Brazil as a guarantee of our payment obligations under the purchase agreement. In the event that we default on any payment, the agreement provides for a forfeiture of the pledged shares.

In connection with the purchase of FMU Education Group on September 12, 2014, Laureate pledged its acquired shares to third-party lenders as a guarantee of our payment obligations under the loans that financed a portion of the purchase price. The shares are pledged until full repayment of the loans, which mature in April 2021.

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 the amount of PEN 23,764 (approximately $6,364 at March 31, 2021) in order to appeal a preliminary tax assessment received related to tax audits of 2014 and 2015.

Standby Letters of Credit, Surety Bonds and Other Commitments

As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, Laureate's outstanding letters of credit (LOCs) and surety bonds primarily consisted of the items discussed below.

As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, we had approximately ~~$125,800 and $127,300, respectively,~~$83,600 posted as ~~LOCs~~an LOC in favor of the DOE. ~~These LOCs were~~This LOC was required to allow Walden ~~and NSAD, until it was sold in March 2020,~~ to ~~continue participating~~participate in the DOE Title IV program. ~~These LOCs are recorded on Walden and Laureate and are fully collateralized with~~The restricted cash ~~equivalents and certificates~~used to collateralize this letter of ~~deposit, which are classified as Restricted cash on our March 31, 2020 and December 31, 2019 Consolidated Balance Sheets.~~

As of March 31, 2020 and December 31, 2019, we had EUR 9,443 (approximately $10,500 at March 31, 2020) and EUR 5,036 (approximately $5,500 at December 31, 2019), respectively, posted as cash collateral for LOCs related to the Spanish tax audits. Thiscredit was recorded in Continuing Operations and classified as Restricted cash on our March 31, 2020 and December 31, 2019 Consolidated Balance Sheets. The cash collateral is related to final assessments issuedheld by ~~the Spanish Taxing Authority (STA) in October 2018 and January 2020 to Iniciativas Culturales de Españ~~a ~~S.L. (ICE), our Spanish holding company. In addition, on March 11, 2020, ICE received a preliminary assessment of approximately EUR 21,600 (approximately $23,900 at~~

March 31, 2020), related to the STA’s extension of their audit to review withholding taxes on income earned by nonresidents. This assessment is not final, and ICE intends to challenge the assessment before the STA.corporate entity.

As part of our normal operations, our insurers issue surety bonds on our behalf, as required by various state education authorities in the United States. We are obligated to reimburse our insurers for any payments made by the insurers under the surety bonds. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the total face amount of these surety bonds, ~~was $26,069 and $25,852, respectively. These bonds~~which are fully collateralized with cash, ~~which~~ was ~~classified as Restricted cash on our March 31, 2020~~$16,929 and ~~December 31, 2019 Consolidated Balance Sheets.~~$17,094, respectively.

In November 2016, in order to continue participating in Prouni, a federal program that offers tax benefits designed to increase higher education participation rates in Brazil, UAM Brazil posted a guarantee in the amount of $15,300. In connection with the issuance of the guarantee, UAM Brazil obtained a non-collateralized surety bond from a third party in order to secure the guarantee. The cost of the surety bond was $1,400, of which half was reimbursed by the former owner of UAM Brazil, and is being amortized over a five-year term. The Company believes that this matter will not have a material impact on our Consolidated Financial Statements.

~~Note 12. Financing Receivables~~Spanish Tax Audits

~~Laureate’s financing receivables consist primarily~~As of ~~trade receivables~~March 31, 2021 and December 31, 2020, we had approximately $11,100 and $11,500, respectively, posted as cash collateral for LOCs related to ~~student tuition financing programs with an initial term~~the Spanish tax audits. This was recorded in ~~excess of one year. We have offered long-term financing through the execution of note receivable agreements with students at some of~~Continuing Operations and classified as Restricted cash on our ~~institutions. Our disclosures include financing receivables that are classified in our~~March 31, 2021 and December 31, 2020 Consolidated Balance ~~Sheets as both current~~Sheets. The cash collateral is related to final assessments issued by the Spanish Taxing Authority (STA) in October 2018 and ~~long-term, reported in accordance with ASC 310, “Receivables.”~~January 2020 to Iniciativas Culturales de España, S.L. (ICE). ICE was formerly our Spanish holding company; during the second quarter of 2020, ICE was migrated to the Netherlands and its name was changed to Laureate Netherlands Holding B.V.

~~Laureate’s financing receivables balances were as follows:~~

March 31, 2020 December 31, 2019
Financing receivables $ 30,860 $ 28,856
Allowance for doubtful accounts (6,123) (5,909)
Financing receivables, net of allowances $ 24,737 $ 22,947
In addition, on March 11, 2020, ICE received a preliminary assessment of approximately EUR 21,600 (approximately $25,500 at March 31, 2021), related to the STA’s extension of their audit to review withholding taxes on income earned by nonresidents. This assessment was not final, and ICE challenged the assessment. On March 30, 2021, in response to our allegations, the STA issued a final assessment to Laureate Netherlands Holding B.V. in which the Chief Tax Auditor challenged the preliminary assessment and found that the STA could not claim the withholding tax obligation in this case. At this time, we consider the matter resolved.

We do not purchase financing receivables in the ordinary course of our business. We may sell certain receivables that are significantly past due. NaN material amounts of financing receivables were sold during the periods reported herein.

2217

Delinquency is the primary indicator of credit quality for our financing receivables. Receivable balances are considered delinquent when contractual payments on the loan become past due. Delinquent financing receivables are placed on non-accrual status for interest income. The accrual of interest is resumed when the financing receivable becomes contractually current and when collection of all remaining amounts due is reasonably assured. We record an Allowance for doubtful accounts to reduce our financing receivables to their net realizable value. The Allowance for doubtful accounts is based on the age of the receivables, the status of past-due amounts, historical collection trends, current economic conditions, and reasonable supportable forecasts of student attrition. Each of our institutions evaluates its balances for potential impairment. We consider impaired loans to be those that are past due one year or greater, and those that are modified as a troubled debt restructuring (TDR).

~~The aging of financing receivables grouped by country portfolio was as follows:~~

Chile Other Total
As of March 31, 2020
Amounts past due less than one year $ 8,289 $ 343 $ 8,632
Amounts past due one year or greater 2,550 237 2,787
Total past due (on non-accrual status) 10,839 580 11,419
Not past due 17,563 1,878 19,441
Total financing receivables $ 28,402 $ 2,458 $ 30,860
As of December 31, 2019
Amounts past due less than one year $ 10,687 $ 1,556 $ 12,243
Amounts past due one year or greater 3,295 62 3,357
Total past due (on non-accrual status) 13,982 1,618 15,600
Not past due 12,556 700 13,256
Total financing receivables $ 26,538 $ 2,318 $ 28,856

~~The following is a rollforward of the Allowance for doubtful accounts related to financing receivables for the three months ended March 31, 2020 and 2019, grouped by country portfolio:~~

Chile Other Total
Balance at December 31, 2019 $ (5,654) $ (255) $ (5,909)
Charge-offs 583 3 586
Recoveries — — —
Reclassifications — — —
Provision (1,345) (79) (1,424)
Currency adjustments 608 16 624
Balance at March 31, 2020 $ (5,808) $ (315) $ (6,123)
Balance at December 31, 2018 $ (6,108) $ (287) $ (6,395)
Charge-offs 414 76 490
Recoveries — — —
Reclassifications — — —
Provision (361) (72) (433)
Currency adjustments (124) (15) (139)
Balance at March 31, 2019 $ (6,179) $ (298) $ (6,477)

~~Restructured Receivables~~

A TDR is a financing receivable in which the borrower is experiencing financial difficulty and Laureate has granted an economic concession to the student debtor that we would not otherwise consider. When we modify financing receivables in a TDR, Laureate typically offers the student debtor an extension of the loan maturity and/or a reduction in the accrued interest balance. In certain situations, we may offer to restructure a financing receivable in a manner that ultimately results in the forgiveness of contractually specified principal balances. Our only TDRs are in Chile.

~~The number of financing receivable accounts and the pre- and post-modification account balances modified under the terms of a TDR during the three months ended March 31, 2020 and 2019 were as follows:~~

Number of Financing Receivable Accounts Pre-Modification Balance Outstanding Post-Modification Balance Outstanding
2020 166 $ 421 $ 393
2019 296 $ 898 $ 867

The preceding table represents accounts modified under the terms of a TDR during the three months ended March 31, 2020, whereas the following table represents accounts modified as a TDR between January 1, 2019 and March 31, 2020 that subsequently defaulted during the three months ended March 31, 2020:

Number of Financing Receivable Accounts Balance at Default
Total 75 $ 147

~~The following table represents accounts modified as a TDR between January 1, 2018 and March 31, 2019 that subsequently defaulted during the three months ended March 31, 2019:~~

Number of Financing Receivable Accounts Balance at Default
Total 155 $ 251

Note ~~13.~~11. Share-based Compensation

Share-based compensation expense was as follows:


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
Continuing operations	Continuing operations					Continuing operations
Stock options, net of estimated forfeitures	Stock options, net of estimated forfeitures	$	439	$	823	Stock options, net of estimated forfeitures	$	176	$	345
Restricted stock awards	Restricted stock awards	1,542		2,164		Restricted stock awards	1,158		1,194
Total continuing operations	Total continuing operations	$	1,981	$	2,987	Total continuing operations	$	1,334	$	1,539

Discontinued operations	Discontinued operations					Discontinued operations
Share-based compensation expense for discontinued operations	Share-based compensation expense for discontinued operations	3		162		Share-based compensation expense for discontinued operations	242		445
Total continuing and discontinued operations	Total continuing and discontinued operations	$	1,984	$	3,149	Total continuing and discontinued operations	$	1,576	$	1,984

Note ~~14.~~12. Stockholders’ Equity

The components of net changes in stockholders’ equity for the three months ended March 31, ~~2020~~2021 are as follows:


		Laureate Education, Inc. Stockholders																																				Laureate Education, Inc. Stockholders
		Class A Common Stock				Class B Common Stock						Additional paid-in capital		Retained earnings		Accumulated other comprehensive (loss) income		Treasury stock at cost		Non-controlling interests			Total stockholders’ equity					Class A Common Stock			Class B Common Stock				Additional paid-in capital			Accumulated deficit		Accumulated other comprehensive loss		Treasury stock at cost		Non-controlling interests	Total stockholders’ equity
		Shares	Amount		Shares	Amount																						Accumulated other comprehensive loss	Treasury stock at cost		Non-controlling interests		Total stockholders’ equity
Balance at December 31, 2019		119,575	$	542	90,831	$	363	$	3,724,636	$	436,509									$	(1,073,981)		$	(271,106)		$	(12,812)									$	2,804,151
Balance at December 31, 2020																				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

Beginning retained earnings adjustment																				Beginning retained earnings adjustment		—			—			—	—		—		(101)		—			—		—		(101)
Non-cash stock compensation	Non-cash stock compensation	—	—		—	—		1,984		—		—		—		—		1,984		Non-cash stock compensation		—			—			—	—		1,576		—		—			—		—		1,576
Conversion of Class B shares to Class A shares	Conversion of Class B shares to Class A shares	18	—		(18)	—		—		—		—		—		—		—		Conversion of Class B shares to Class A shares		17,248			69			(17,248)	(69)		—		—		—			—		—		0
Purchase of treasury stock at cost	Purchase of treasury stock at cost	(1,619)	—		—	—		—		—		—		(29,203)		—		(29,203)		Purchase of treasury stock at cost		(10,401)			—			—	—		—		—		—			(145,806)		—		(145,806)
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	1,101	4		—	—		25,610		—		—		—		—		25,614		Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding		247			1			—	—		(1,223)		—		—			—		—		(1,222)

Accretion of redeemable noncontrolling interests and equity	Accretion of redeemable noncontrolling interests and equity	—	—		—	—		(44)		—		—		—		—		(44)		Accretion of redeemable noncontrolling interests and equity		—			—			—	—		(20)		—		—			—		—		(20)

Reclassification of redeemable noncontrolling interests and equity		—	—		—	—		—		—		—		—		38		38
Net income (loss)		—	—		—	—		—		99,615		—		—		(1,299)		98,316

Net loss																				Net loss		—			—			—	—		—		(164,928)		—			—		(15)		(164,943)
Foreign currency translation adjustment, net of tax of $0	Foreign currency translation adjustment, net of tax of $0	—	—		—	—		—		—		(330,875)		—		759		(330,116)		Foreign currency translation adjustment, net of tax of $0		—			—			—	—		—		—		(59,743)			—		(18)		(59,761)

Minimum pension liability adjustment, net of tax of $0	Minimum pension liability adjustment, net of tax of $0	—	—		—	—		—		—		(932)		—		—		(932)		Minimum pension liability adjustment, net of tax of $0		—			—			—	—		—		—		(168)			—		—		(168)
Balance at March 31, 2020		119,075	$	546	90,813	$	363	$	3,752,186	$	536,124	$	(1,405,788)	$	(300,309)	$	(13,314)	$	2,569,808
Balance at March 31, 2021																				Balance at March 31, 2021		122,213			$	618		73,544	$	294	$	3,760,362	$	(341,851)	$	(1,001,897)		$	(511,122)	$	(12,915)	$	1,893,489

The components of net changes in stockholders’ equity for the three months ended March 31, ~~2019~~2020 are as follows:

Laureate Education, Inc. Stockholders
Class A
Common Stock Class B
Common Stock Additional paid-in capital (Accumulated deficit) retained earnings Accumulated other comprehensive (loss) income Treasury stock at cost Non-controlling interests Total stockholders’ equity
Shares Amount Shares Amount
Balance at December 31, 2018 107,450 $ 430 116,865 $ 467 $ 3,703,796 $ (530,919) $ (1,112,695) $ — $ (10,133) $ 2,050,946
Adoption of accounting standards — — — — — 28,944 — — — 28,944
Balance at January 1, 2019 107,450 430 116,865 467 3,703,796 (501,975) (1,112,695) — (10,133) 2,079,890
Non-cash stock compensation — — — — 3,149 — — — — 3,149
Conversion of Class B shares to Class A shares 8 — (8) — — — — — — —
Vesting of restricted stock, net of shares withheld to satisfy tax withholding 325 1 — — (1,421) — — — — (1,420)
Distributions to noncontrolling interest holders — — — — — — — — (625) (625)
Accretion of redeemable noncontrolling interests and equity — — — — 263 — — — — 263
Reclassification of redeemable noncontrolling interests and equity — — — — — — — — 224 224
Net income — — — — — 191,243 — — 3,022 194,265
Foreign currency translation adjustment, net of tax of $0 — — — — — — 49,521 — 30 49,551
Unrealized gain on derivatives, net of tax of $0 — — — — — — 2,609 — — 2,609
Balance at March 31, 2019 107,783 $ 431 116,857 $ 467 $ 3,705,787 $ (310,732) $ (1,060,565) $ — $ (7,482) $ 2,327,906


	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock at cost		Non-controlling interests		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	119,575	$	542	90,831	$	363	$	3,724,636	$	436,509	$	(1,073,981)	$	(271,106)	$	(12,812)	$	2,804,151


Non-cash stock compensation	—	—		—	—		1,984		—		—		—		—		1,984
Conversion of Class B shares to Class A shares	18	—		(18)	—		—		—		—		—		—		0
Purchase of treasury stock at cost	(1,619)	—		—	—		—		—		—		(29,203)		—		(29,203)
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	1,101	4		—	—		25,610		—		—		—		—		25,614



Accretion of redeemable noncontrolling interests and equity	—	—		—	—		(44)		—		—		—		—		(44)

Reclassification of redeemable noncontrolling interests and equity	—	—		—	—		—		—		—		—		38		38
Net income	—	—		—	—		—		99,615		—		—		(1,299)		98,316
Foreign currency translation adjustment, net of tax of $0	—	—		—	—		—		—		(330,875)		—		759		(330,116)

Minimum pension liability adjustment, net of tax of $0	—	—		—	—		—		—		(932)		—		—		(932)
Balance at March 31, 2020	119,075	$	546	90,813	$	363	$	3,752,186	$	536,124	$	(1,405,788)	$	(300,309)	$	(13,314)	$	2,569,808

Stock Repurchase Program

~~As previously disclosed, on August 8, 2019, the Company announced that its~~On November 5, 2020, Laureate’s board of directors ~~had authorized~~announced a new stock repurchase program to acquire up to $150,000 of the Company’s Class A common stock. In early October 2019, the Company’s stock repurchases reached the authorized limit of $150,000. On October 14, 2019, the Company’s board of directors approved the increase of its existing authorization to repurchase shares of the Company’s Class A common stock by $150,000 for a total authorization (including the previously authorized repurchases) of up to $300,000 of the Company’s Class A common stock. The

Company’s repurchases ~~were~~may be made ~~in a block trade, as well as~~ 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 ~~pursuant to a Rule 10b5-1 stock repurchase plan,~~ in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). ~~In January 2020,~~Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s board of directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. The Company expects to finance the repurchases with free cash flow and excess cash and liquidity on-hand. During the first quarter of 2021, the Company repurchased ~~1,619~~10,401 shares of its outstanding Class A common stock for a total purchase price of ~~$29,203 and reached~~$145,806. As discussed in Note 19, Subsequent Events, on April 30, 2021, the Company’s board of directors approved an increase of its existing authorization to repurchase shares of the Company’s Class A common stock by $200,000, for a total authorization (including the previously authorized ~~limit~~repurchases) of ~~$300,000.~~up to $500,000 of the Company’s Class A common stock.

Accumulated Other ~~Comprehensive~~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 gains on derivatives designated as cash flow hedges, and the accumulated net gains or losses that are not recognized as components of net periodic benefit cost for our minimum pension liability. The change in AOCI includes the removal of the cumulative translation adjustment related to subsidiaries that were sold during the period. The components of these balances were as follows:

March 31, 2020 December 31, 2019
Laureate Education, Inc. Noncontrolling Interests Total Laureate Education, Inc. Noncontrolling Interests Total
Foreign currency translation adjustment $ (1,415,526) $ 1,085 $ (1,414,441) $ (1,084,651) $ 326 $ (1,084,325)
Unrealized gain on derivatives 10,416 — 10,416 10,416 — 10,416
Minimum pension liability adjustment (678) — (678) 254 — 254
Accumulated other comprehensive loss $ (1,405,788) $ 1,085 $ (1,404,703) $ (1,073,981) $ 326 $ (1,073,655)


	March 31, 2021						December 31, 2020
	Laureate Education, Inc.		Noncontrolling Interests		Total		Laureate Education, Inc.		Noncontrolling Interests		Total
Foreign currency translation adjustment	$	(1,011,199)	$	941	$	(1,010,258)	$	(951,456)	$	958	$	(950,498)
Unrealized gain on derivatives	10,416		0		10,416		10,416		0		10,416
Minimum pension liability adjustment	(1,114)		0		(1,114)		(946)		0		(946)
Accumulated other comprehensive loss	$	(1,001,897)	$	941	$	(1,000,956)	$	(941,986)	$	958	$	(941,028)

Note ~~15.~~13. 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.

The interest and principal payments for Laureate’s senior long-term debt arrangements are to be paid primarily in USD. Our ability to make debt payments is subject to fluctuations in the value of the USD against foreign currencies, since a majority of our operating cash used to make these payments is generated by subsidiaries with functional currencies other than USD. As part of our overall risk management policies, Laureate has at times entered into foreign currency swap contracts and floating-to-fixed interest rate swap contracts. In addition, we occasionally enter into foreign exchange forward contracts to reduce the impact of other non-functional currency-denominated receivables and payables. 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 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 investment hedges, gains or losses associated with the change in fair value of the derivatives are recognized on our Consolidated Balance Sheets as a component of AOCI.

The reported fair values of our derivatives, which are classified in ~~Prepaid expenses and other current assets~~Derivative instruments on our Consolidated Balance Sheets, were as follows:


	~~March 31, 2020~~		~~December 31, 2019~~










~~Derivatives not designated as hedging instruments:~~
~~Current assets:~~
~~Cross currency swaps~~	$	~~802~~	$	—








~~Total derivative instrument assets~~	$	~~802~~	$	—


	March 31, 2021		December 31, 2020








Derivatives not designated as hedging instruments:
Current assets:
Cross currency swaps	$	21,800	$	0


Current liabilities:

Cross currency swaps	0		17,680
Long-term liabilities:
Cross currency swaps	0		8,144

Total derivative instrument assets	$	21,800	$	0
Total derivative instrument liabilities	$	0	$	25,824

The table below shows the total recorded unrealized (loss) gain in Comprehensive income for the derivatives designated as hedging instruments. The impact of these derivative instruments on Comprehensive income, Interest expense and AOCI for the three months ended March 31, 2020 and 2019 were as follows:

(Loss) Gain Recognized in Comprehensive Income (Effective Portion) Income Statement Location Gain Reclassified
from AOCI to Income
(Effective Portion) Total Consolidated Interest Expense
2020 2019 2020 2019 2020 2019
Cash flow hedge
Interest rate swaps $ — $ (1,212) Interest expense $ — $ 1,212
Net investment hedge
Cross currency swaps — 3,821 N/A — —
Total $ — $ 2,609 $ — $ 1,212 $ (36,110) $ (54,653)
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 6 BRL-to-USD swap agreements. The purpose of these swaps is to mitigate the risk of foreign currency exposure on the expected proceeds from the sale. NaN of the swaps are put/call options with a maturity date of May 13, 2021, where Laureate can 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 include deferred premium payments from Laureate to the counterparties of $18,294, which were paid in full in January 2021. The remaining 2 swaps are deal contingent, with the settlement date occurring on the second business day following the completion of the aforementioned sale. On the settlement date, Laureate will 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. For one of the swaps, the contract rate of exchange has a possible range of 5.484143 - 5.678624 BRL per 1 USD, and the maturity date is December 31, 2021. For the other swap, the contract rate of exchange has a possible range of 5.44706 - 5.63255 BRL per 1 USD, and the maturity date is January 3, 2022. As of March 31, 2021, these swaps were in an asset position and had an aggregate fair value of $21,800, which was recorded in Derivative instruments as a current asset. As of December 31, 2020, these swaps were in a liability position and had an aggregate fair value of $25,824, of which $17,680 was recorded in Derivative instruments as a current liability and $8,144 was recorded in Derivative instruments as a long-term liability. These swaps are not designated as hedges for accounting purposes.

AUD to USD Foreign Currency ~~Swaps~~Swap

In March 2020, Laureate entered into an ~~AUD to USD~~AUD-to-USD swap agreement with a maturity date of April 15, 2020, in connection with an intercompany funding transaction. The terms of the swap stated that on the maturity date, Laureate would deliver the notional amount of AUD 21,000 and receive USD $13,713 at a rate of exchange of 0.6530 USD per 1 AUD. On April 8, 2020, Laureate entered into a net settlement agreement for this swap to deliver USD $12,999 and receive the notional amount of AUD 21,000 at a rate of exchange of 0.6190 USD per 1 AUD. This net settlement was executed on April 15, 2020, which resulted in a realized gain and proceeds received of $714. ~~As of March 31, 2020, this swap had an estimated value of $802 which was recorded in Prepaid expenses and other current assets on our Consolidated Balance Sheets.~~ This swap was not designated as a hedge for accounting purposes.

On April 8, 2020, Laureate entered into a new AUD to USD swap agreement with a notional amount of AUD 21,000. On the maturity date of June 15, 2020, Laureate will deliver the notional amount and receive USD $12,921 at a rate of exchange of 0.6153 USD per 1 AUD. This swap was not designated as a hedge for accounting purposes.

~~EUR to USD Foreign Currency Swaps—Spain and Portugal~~

In December 2018, Laureate entered into 2 EUR to USD swap agreements in connection with the signing of the sale agreement for the subsidiaries in Spain and Portugal. The purpose of the swaps was to mitigate the risk of foreign currency exposure on the sale proceeds. The first swap was deal contingent, with the settlement date occurring on the second business day following the completion of the sale. On the settlement date, Laureate delivered the notional amount of EUR 275,000 and received USD $314,573 at a rate of exchange of 1.1439, which resulted in a realized gain of $5,088. The second swap was a put/call option with a maturity date of April 8, 2019, where Laureate could put the notional amount of EUR 275,000 and call the USD amount of $310,750 at an exchange rate of 1.13. Based on expected timing of the sale transaction, the swap was terminated on April 2, 2019, resulting in a payment to the counterparty of $980 that included a deferred premium payment net of proceeds received. These swaps were not designated as hedges for accounting purposes.

In addition to the swaps above, in order to continue to mitigate the risk of foreign currency exposure on the expected sale proceeds for Spain and Portugal in advance of the May 31, 2019 sale closing date, in April 2019, Laureate also entered into 7 EUR to USD swap agreements with a combined notional amount of EUR 375,000. On the maturity date of May 15, 2019, Laureate paid the EUR notional amount and received a combined total of USD $423,003 at a rate of exchange of 1.128007, resulting in a gain of $1,644. In May 2019, Laureate entered into nine EUR to USD swap agreements with a combined notional amount of EUR 532,000. On the maturity date of June 4, 2019, Laureate paid the EUR notional amount and received a combined total of $597,149 at a rate of exchange of 1.122461, resulting in a realized loss of approximately $565. These swaps were not designated as hedges for accounting purposes.

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

The cross currency and interest rate swap agreements are intended to provide a better correlation between our debt obligations and operating currencies. In 2010, one of our subsidiaries in Chile entered into 4 cross currency and interest rate swap agreements with an aggregate notional amount of approximately $31,000, and convert CLP-denominated, floating-rate debt to fixed-rate UF-denominated debt. The UF is a Chilean inflation-adjusted unit of account. NaN of the swaps was scheduled to mature on December 1, 2024, and the remaining 3 were scheduled to mature on July 1, 2025 (the CLP to UF cross currency and interest rate swaps); however, during the first quarter 2019, the Company elected to settle all 4 swaps for a net cash payment of approximately USD $8,200. In addition, at that time, Chile also elected to repay a portion of the principal balance outstanding for certain notes payable. This payment was included in Payments for settlement of derivative contracts on the consolidated statement of cash flows for the three months ended March 31, 2019. The CLP to UF cross currency and interest rate swaps were not designated as hedges for accounting purposes.

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

For the three months ended March 31, 2020 2019
Unrealized Gain
Cross currency and interest rate swaps $ 802 $ 6,576
802 6,576
Realized Loss
Cross currency and interest rate swaps — (1,393)
— (1,393)
Total Gain
Cross currency and interest rate swaps 802 5,183
Gain on derivatives, net $ 802 $ 5,183



For the three months ended March 31,	2021		2020
Cross currency swaps
Unrealized gain	$	47,624	$	802
Realized loss	(18,294)		0
Gain on derivatives, net	$	29,330	$	802

Credit Risk and Credit-Risk-Related Contingent Features

Laureate’s derivatives expose us to credit risk to the extent that the counterparty may possibly fail to perform its contractual obligation. 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. As of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the estimated fair values of derivatives in a gain position were ~~$802~~$21,800 and $0, respectively.

Laureate has limited 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’~~derivatives' counterparties. At March 31, ~~2020, 1~~2021, two institutions which were rated A1 and one institution which was rated ~~A1 and~~A2 by the global rating agency of Moody's Investors Service accounted for all of ~~Laureate’s~~Laureate's derivative credit risk exposure.

Laureate’s agreements with its derivative counterparties contain a provision under which wethe 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 March 31, ~~2020~~2021 and December 31, ~~2019, we did~~2020, the Company had not ~~hold~~breached any ~~derivatives in~~default provisions and had not posted any collateral related to these agreements. If the Company had breached any of these provisions, it could have been required to settle the obligations under the derivative agreements for an amount that, at a ~~net loss position,~~maximum, the Company believes would approximate their estimated fair values as of March 31, 2021 and ~~thus had no derivative obligations.~~December 31, 2020 of $0 and $25,824, respectively.

Note ~~16.~~14. Income Taxes

Laureate uses the liability method to account for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. For interim purposes, we also apply ASC 740-270, “Income Taxes—Interim Reporting.”

Laureate's income tax provisions for all periods consist of federal, state and foreign income taxes. The tax provisions for the three months ended March 31, ~~2020~~2021 and ~~2019 were~~2020 are based on estimated full-year effective tax rates, ~~after giving effect to significant~~adjusted for discrete income tax items related specifically to the interim ~~periods, including the mix of income for the period between higher-taxed and lower-taxed jurisdictions.~~periods. Laureate has operations in multiple countries at various statutory tax rates ~~or which are tax-exempt entities,~~ 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.

~~Laureate records interest and penalties related~~For the three months ended March 31, 2021, the Company recognized income tax (expense) from continuing operations of $(112,861), as compared to ~~uncertain~~income tax ~~positions as a component~~benefit from continuing operations of $230,028 in the prior year period. Income tax ~~expense. During~~expense for the three months ended March 31, 2021 was primarily driven by changes in income tax reserves, withholding taxes and jurisdictional mix of earnings offset by the benefit for pretax loss for the period. Income tax benefit for the three months ended March 31, 2020 was primarily driven by the benefit recorded due to the change in tax status of a Netherlands subsidiary, the pretax loss for the period and jurisdictional mix of earnings.

During the three months ended March 31, 2021, Laureate recognized additional tax expense of $46,493 related to prior year tax positions and tax expense for interest and penalties related to income taxes of ~~$647. Laureate had $17,210 of accrued interest and penalties as of March 31, 2020.~~ $802.

During the three months ended March 31, ~~2020, Laureate derecognized $4,320~~2021, the Company recorded an out-of-period adjustment of ~~previously accrued interest and penalties. Approximately $18,709 of unrecognized tax benefits, if recognized, will affect the effective~~approximately $12,400 for income tax ~~rate. It is reasonably possible~~expense that Laureate’s unrecognized tax benefits may decrease within the next 12 months by up to approximately $16,291 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.

~~As of January 1, 2020, the~~should have been recorded during 2016 through 2020. The Company ~~amended the partnership agreement of one of its subsidiaries that owned intellectual property, such~~concluded that the ~~subsidiary became subject~~adjustment was immaterial to ~~tax in~~ the ~~Netherlands. The result was a discrete tax benefit of approximately $222,000 that represents~~consolidated financial statements for both the ~~book-and-tax basis difference of the intellectual property, measured based on the intellectual property’s~~ current ~~fair value~~ and ~~applicable Dutch statutory tax rate. Determining the fair value of the intellectual~~prior-periods.

~~property, which serves as the tax basis of the deferred tax asset, required management to make assumptions and estimates that are inherently uncertain.~~

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act did not have a significant impact on Laureate’s consolidated financial statements for the three months ended March 31, 2020. We continue to monitor any effects that may result from the CARES Act as well as any similar stimulus legislation enacted in other jurisdictions where Laureate has material operations.

3022

Note ~~17.~~15. Earnings (Loss) Per Share

~~We have two classes of~~Our common stock has a dual class structure, consisting of Class A common stock and Class B common stock. Other than voting rights, the Class B common stock has the same rights as the Class A common stock, and therefore both are 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, contingently issuable shares, or convertible securities were exercised or converted into common stock. To calculate the diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock, restricted stock units, and any contingently issuable shares determined using the treasury stock method, and any convertible securities using the if-converted method.

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


For the three months ended March 31,	For the three months ended March 31,	2020		2019		For the three months ended March 31,	2021		2020
Numerator used in basic and diluted earnings (loss) per common share for continuing operations:	Numerator used in basic and diluted earnings (loss) per common share for continuing operations:					Numerator used in basic and diluted earnings (loss) per common share for continuing operations:
Income (loss) from continuing operations		$	124,082	$	(117,069)
Net loss (income) attributable to noncontrolling interests		8		(42)
Loss from continuing operations attributable to Laureate Education, Inc.		124,090		(117,111)
(Loss) income from continuing operations						(Loss) income from continuing operations	$	(164,525)	$	206,096
Net loss attributable to noncontrolling interests						Net loss attributable to noncontrolling interests	24		12
(Loss) income from continuing operations attributable to Laureate Education, Inc.						(Loss) income from continuing operations attributable to Laureate Education, Inc.	(164,501)		206,108

Accretion of redemption value of redeemable noncontrolling interests and equity	Accretion of redemption value of redeemable noncontrolling interests and equity	(44)		263		Accretion of redemption value of redeemable noncontrolling interests and equity	(20)		(44)

Net income (loss) from continuing operations available to common stockholders for basic and diluted earnings (loss) per share		124,046		(116,848)
Net (loss) income from continuing operations for basic and diluted earnings (loss) per share						Net (loss) income from continuing operations for basic and diluted earnings (loss) per share	$	(164,521)	$	206,064

Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:	Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:					Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:
(Loss) income from discontinued operations, net of tax		$	(3,804)	$	63,329
(Loss) gain on sales of discontinued operations, net of tax		(21,962)		248,005
Loss (income) attributable to noncontrolling interests		1,291		(2,980)
Loss from discontinued operations, net of tax						Loss from discontinued operations, net of tax	$	(418)	$	(107,780)
(Income) loss attributable to noncontrolling interests						(Income) loss attributable to noncontrolling interests	(9)		1,287

Net (loss) income from discontinued operations for basic and diluted earnings (loss) per share		$	(24,475)	$	308,354
Net loss from discontinued operations for basic and diluted earnings (loss) per share						Net loss from discontinued operations for basic and diluted earnings (loss) per share	$	(427)	$	(106,493)

Denominator used in basic and diluted earnings (loss) per common share:	Denominator used in basic and diluted earnings (loss) per common share:					Denominator used in basic and diluted earnings (loss) per common share:
Basic weighted average shares outstanding	Basic weighted average shares outstanding	209,801		224,655		Basic weighted average shares outstanding	200,224		209,801

Dilutive effect of stock options	Dilutive effect of stock options	83		—		Dilutive effect of stock options	0		83
Dilutive effect of restricted stock units	Dilutive effect of restricted stock units	342		—		Dilutive effect of restricted stock units	0		342
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	210,226		224,655		Diluted weighted average shares outstanding	200,224		210,226

Basic and diluted earnings (loss) per share:	Basic and diluted earnings (loss) per share:					Basic and diluted earnings (loss) per share:
Loss from continuing operations		$	0.59	$	(0.52)
(Loss) income from discontinued operations		(0.12)		1.37
(Loss) income from continuing operations						(Loss) income from continuing operations	$	(0.82)	$	0.98
Loss from discontinued operations						Loss from discontinued operations	0		(0.51)
Basic and diluted (loss) earnings per share	Basic and diluted (loss) earnings per share	$	0.47	$	0.85	Basic and diluted (loss) earnings per share	$	(0.82)	$	0.47

The following table summarizes the number of stock options and 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 three months ended March 31,	For the three months ended March 31,	2020	2019	For the three months ended March 31,	2021	2020
Stock options	Stock options	4,167	8,970	Stock options	3,394	4,167
Restricted stock and RSUs		—	983
Restricted stock units				Restricted stock units	586	0

3123

Note ~~18.~~16. Legal and Regulatory Matters

Laureate is subject to legal proceedings arising in the ordinary course of business. In ~~management's~~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 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. Except as set forth below, there have been no material changes to the laws and regulations affecting our higher education institutions that are described in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

~~Australian Regulation~~

Since March 16, 2020, in response to the COVID-19 pandemic, with limited exceptions, courses at our two post-secondary educational institutions in Australia have been delivered online and are in compliance with all local regulations.

~~Brazilian Regulation~~

Since the declaration of a public health emergency by the Ministry of Health on February 3, 2020, there have been a number of legislative initiatives at the federal and local levels in Brazil to address the COVID-19 pandemic. As a result of regulatory and operational restrictions created by social distancing mandates, no face-to-face classes may be conducted in any state in which we operate until each of the relevant government measures is lifted. The Ministry of Education, however, authorized higher education institutions to transition from face-to-face classes to online classes within established limits. Accordingly, all face-to-face campus activities at our Brazilian institutions have been suspended and transitioned to online instruction.

Subsequently, Provisional Presidential Act n. 934/2020 (the “Act”) waived legal requirements to observe an annual minimum of 200 school days. The Act also permits institutions to shorten the duration of Medicine, Nursery, Pharmacy and Physiotherapy course lengths and accelerate student graduation after 75% completion of the normal required course and practicum work in order to quickly establish a contingent of available healthcare professionals.

~~Chilean Regulation~~

There have been a number of initiatives in Chile to address the COVID-19 pandemic, including a declaration of a State of Constitutional Exception of Catastrophe, effective March 19, 2020, for 90 days, which provides broad powers to the government, including the power to limit free movement (quarantine, curfew measures and social isolation). While authorities have not suspended educational activities, higher education institutions, including our institutions in Chile, have transitioned from face-to-face classes to online classes in order to comply with social distancing restrictions.Continuing Operations

Mexican Regulation

On March 30, 2020, the Ministry of Health declared a national sanitary emergency in response to the COVID-19 pandemic. On March 31, 2020, the Ministry of Health suspended all non-essential activities, includingA new higher education ~~and urged people~~bill was enacted into law effective April 21, 2021. The new law, which, among other things, confirms the guaranteed right to ~~stay home from March 31, 2020 through April 30, 2020, which has now been extended through May 30, 2020 for~~higher education, is not expected to materially impact the business.

COVID-19 Update

Administrative activities have resumed at most of our campuses. Limited face-to-face educational activities have resumed at 10 campuses (in seven states), but such activities will not be permitted to resume at any other campus until the region (municipality or state) in which such campus is located is assigned a green color code under the country’s ~~municipalities. Accordingly, all face-to-face campus activities at our Mexican institutions have been suspended and transitioned to online instruction.~~color-coded sanitary alert system, which is updated on a biweekly basis.

Peruvian Regulation – COVID-19 Update

~~On March 9, 2020, Peru declared a~~Peru’s national sanitary emergency has been extended until June 2021, and may be extended again after the second round of presidential elections on June 6, 2021. Due to the more aggressive and deadly second wave of COVID-19, Peru has extended its region-by-region confinement plan until May 9, ~~2020 and subsequently enacted a number of decrees~~2021, subject to ~~address~~continuing review. Lima has been qualified as “in extreme status,” which severely limits or prohibits economic activities, including presential gatherings like in-person instruction. Nevertheless, the ~~COVID-19 pandemic. As a result of the regulatory and operational restrictions created by social distancing mandates, no~~government has announced that face-to-face classes may ~~be conducted in any~~resume this year, initially semi-presential. The actual resumption of ~~our~~classes will depend upon COVID-19 infection rates at such time.

Discontinued Operations

Brazilian Regulation – COVID-19 Update

As of August 2020, Provisional Presidential Act n. 934/2020 has been converted to Law n. 14,040. Accordingly, institutions ~~until each~~remain authorized to substitute face-to-face classes with remote activities and adjust the academic calendar. By the end of 2020, the ~~relevant government measures is lifted. The~~National Board of Education had issued an opinion concerning the continuity of remote activities for an additional year. While the Ministry of Education ~~however, authorized~~originally had insisted on a gradual return to face-to-face classes, beginning on March 1, 2021, for higher education, ~~institutions~~this effort was affected by a second wave of COVID-19 infections and the consequent increase of local sanitary restrictive measures. As such, remote activities will continue until either a safety standard is sustained or mass vaccination reaches the students’ main age groups.

As of now, decisions to ~~substitute online for~~resume face-to-face educational activities in Brazil are being implemented on a state-by-state and city-by-city basis. Laboratory and professional practice activities have resumed, with short interruptions due to local sanitary statistics, at most of our Brazilian campuses. Despite being authorized to gradually return to face-to-face classes ~~lifting temporarily~~in some locations, academic planners still consider a larger contingent of remote activities to be the ~~50% limit in force for both universities and technical-vocational institutes. Accordingly, all three institutions in Peru transitioned to online delivery of classes.~~

most suitable option given the current circumstances.

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U.S. Regulation

The “90/10 Rule.”

As part of the American Rescue Plan Act of 2021 (“ARPA”) signed into law on March 11, 2021, Congress amended certain provisions of the U.S. Higher Education Act (the “HEA”) pertaining to a requirement of the HEA commonly referred to as the “90/10 Rule”. Specifically, the 90/10 Rule currently provides that a for-profit educational institution loses its eligibility to participate in federal student financial aid programs under Title IV of the HEA (“Title IV programs”) if, under a complex regulatory formula that requires cash basis accounting and other adjustments to the calculation of revenues, the institution derives more than 90% of its revenues from Title IV program funds for any two consecutive fiscal years. The ARPA amended the HEA to require that all “federal education assistance funds,” rather than only Title IV program funds, be included in the numerator of the 90/10 Rule. While the phrase “federal education assistance funds” was not defined by the statutory change, it presumably will include funds derived from student assistance programs administered by the U.S. Department of Veteran’s Affairs and the U.S. Department of Defense, among others. The ARPA requires the U.S. Department of Education to conduct a negotiated rulemaking to develop regulations needed to implement the revisions to the 90/10 Rule, with such negotiated rulemaking not permitted to begin before October 1, 2021. The revision to the 90/10 Rule to include all “federal education assistance funds” will take effect with institutional fiscal years beginning on or after January 1, 2023.

Department of Justice Notice of Election to Decline Intervention

On April 28, 2021, the Company was notified that the Civil Division of the United States Department of Justice (the “DOJ”), on behalf of the United States, had filed a Notice of Election to Decline Intervention (the “Notice”) with respect to a civil qui tam action filed by third-party relators (the “Relators”) against Walden University and the Company. It was this action that prompted the DOJ’s examination of Walden University’s Masters of Science in Nursing program. The DOJ’s investigation into this matter has now concluded. Further, as previously disclosed by the Company, the Higher Learning Commission (“HLC”) had informed Walden University that a public “Governmental Investigation” designation would be assigned to Walden University due to the DOJ inquiry; such designation became effective on November 9, 2020. Effective as of May 3, 2021, the HLC removed such designation.

Per the court order related to the Notice, the Relators may elect to continue to pursue the action. The Company cannot predict how long it may take to resolve this matter. The Company believes that the Relators’ claims are without merit and intends to defend vigorously against them.

Note ~~19.~~17. Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels, which are described below:

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

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

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

These levels are not necessarily an indication of the risk of liquidity associated with the financial assets or liabilities disclosed. ~~Assets and liabilities are classified~~In instances where the determination of fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in ~~their entirety~~the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety, as required under ASC 820-10, ~~“Fair~~"Fair Value Measurement.”" Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Derivative instruments

Laureate uses derivative instruments as economic hedges for bank debt, foreign exchange fluctuations and interest rate risk. Their values are derived using valuation models commonly used for derivatives. These valuation models require a variety of inputs, including contractual terms, market prices, forward-price yield curves, notional quantities, measures of volatility and correlations of such inputs. ~~Our valuation models also reflect measurements for credit risk. Laureate concluded~~Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair ~~values~~value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourself and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives ~~are based on unobservable inputs, or~~held as of March 31, 2021 and December 31, 2020 were classified as Level ~~3 assumptions. The significant unobservable input used in~~2 of the fair value measurement of the Company's derivative instruments is our own credit risk. Holding other inputs constant, a significant increase (decrease) in our own credit risk would result in a significantly lower (higher) fair value measurement for the Company's derivative instruments.hierarchy.

~~Laureate’s~~Laureate's financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, ~~2020~~2021 were as follows:


		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3
Assets	Assets									Assets
Derivative instruments	Derivative instruments	$	802	$	—	$	—	$	802	Derivative instruments	$	21,800	$	0	$	21,800	$	0

Liabilities										Liabilities
Derivative instruments										Derivative instruments	$	0	$	0	$	0	$	0

~~As of December 31, 2019, Laureate did not hold any~~Laureate's financial assets orand liabilities that are measured at fair value on a recurring ~~basis.~~

~~The changes in our Level 3 Derivative instruments measured at fair value on a recurring~~ basis ~~for the three months ended March~~as of December 31, 2020 were as follows:


~~Balance at December 31, 2019~~	$	—
~~Gain included in earnings:~~
~~Unrealized gain, net~~	~~802~~





~~Balance at March 31, 2020~~	$	~~802~~


	Total		Level 1		Level 2		Level 3
Assets
Derivative instruments	$	0	$	0	$	0	$	0
Liabilities
Derivative instruments	$	25,824	$	0	$	25,824	$	0

The following table presents quantitative information regarding the significant unobservable inputs and valuation techniques utilized in the fair value measurements of the Company's assets/(liabilities) classified as Level 3 as of March 31, 2020:

Fair Value at March 31, 2020 Valuation Technique Unobservable Input Range/Input Value
Derivative instruments - cross currency swaps $ 802 Discounted Cash Flow Credit Risk 8.08%

Note ~~20.~~18. 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 March 31, ~~2019~~2020 balance. The March 31, ~~2020~~2021 and March 31, ~~2019~~2020 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


		March 31, 2020		March 31, 2019		December 31, 2019			March 31, 2021		March 31, 2020		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	546,675	$	274,122	$	339,629	Cash and cash equivalents	$	561,330	$	299,686	$	750,147
Restricted cash	Restricted cash	196,385		198,123		186,921		Restricted cash	106,633		40,922		117,151
Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows	Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows	$	743,060	$	472,245	$	526,550	Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows	$	667,963	$	340,608	$	867,298

Restricted cash includes cash equivalents held to collateralize standby letters of ~~credit in favor of the DOE.~~credit. In addition, Laureate may at times hold a United States deposit for a letter of credit in lieu of a surety bond, or otherwise have cash that is not immediately available for use in current operations. See also Note ~~11,~~10, Commitments and Contingencies.

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Note 19. Subsequent Events

Redemption of Senior Notes

On May 4, 2021, the Company redeemed $500,000 aggregate principal amount of its 8.250% Senior Notes due 2025 (the Senior Notes), at a redemption price of 104.125% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date. The total payment made was $520,969. The redemption of the Senior Notes was made pursuant to the indenture governing the Senior Notes as a result of the Company’s decision to exercise its right to optionally redeem any part of the Senior Notes. The source of the funds was cash on hand from the proceeds of the sale of the Company’s operations in Australia and New Zealand.

The Company has also notified the holders of its Senior Notes of its election to redeem the remaining $298,725 aggregate principal amount of the Senior Notes at a price of 104.125% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date. Among other conditions, the redemption is contingent on the sale of our operations in Brazil, which is targeted to close during the second quarter of 2021.

Following completion of the above redemptions, the Company will have repaid the entire outstanding principal amount of the Senior Notes.

Stock Repurchase Program

On April 30, 2021, the Company’s board of directors approved an increase of its existing authorization to repurchase shares of the Company’s Class A common stock by $200,000, for a total authorization (including the previously authorized repurchases) of up to $500,000 of the Company’s Class A common stock.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this Form 10-Q) contains “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or similar expressions that concern our strategy, plans or intentions. All statements we make relating to estimated and projected earnings, costs, expenditures, cash flows, growth rates and financial results, and all statements we make relating to (i) our exploration of strategic alternatives and potential future plans, strategies or transactions that may be identified, explored or implemented as a result of such review process, (ii) our planned divestitures, the expected proceeds generated therefrom, ~~and~~ the expected reduction in revenue resulting therefrom and any resulting litigation or dispute therewith, (iii) anticipated share repurchases, and (iv) the potential impact of the COVID-19 pandemic on our business or the global economy as a whole, are ~~forward-looking~~forward‑looking statements. In addition, we, through our senior management, from time to time make ~~forward-looking~~forward‑looking public statements concerning our expected future operations and performance and other developments. All of these ~~forward-looking~~forward‑looking statements are subject to risks and uncertainties that may change at any time, including, with respect to our exploration of strategic alternatives, risks and uncertainties as to the terms, timing, structure, benefits and costs of any divestiture or separation transaction and whether one will be consummated at all, and the impact of any divestiture or separation transaction on our remaining businesses. Accordingly, our actual results may differ materially from those we expected. We derive most of our ~~forward-looking~~forward‑looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, including, without limitation, in conjunction with the forward-looking statements included in this Form 10-Q, are disclosed in “Item 1—Business,” and “Item 1A—Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~2020 (the ~~2019~~2020 Form 10-K)~~, as updated in Part II, “Item 1A—Risk Factors” in this Form 10-Q.~~. Some of the factors that we believe could affect our results include:

•the risks and uncertainties related to the long-term effect to the Company of the COVID-19 pandemic, including, but not limited to, its effect on student enrollment, tuition pricing, and collections in future periods;

•~~the risks~~ associated with ~~conducting~~operating our ~~global operations,~~portfolio of degree-granting higher education institutions in Mexico and Peru, including complex business, foreign currency, political, legal, regulatory, tax and economic risks;

•our ability to maintain and, subsequently, increase tuition rates and student enrollments in our institutions;

•our ability to successfully complete previously announced divestitures;

•the risks associated with our exploration of strategic alternatives, including possible disruption to our ongoing businesses and increased transaction-related expenses;

•the risks and uncertainties related to the long-term effect to the Company of the COVID-19 pandemic and its resurgence, including, but not limited to, its effect on student enrollment, tuition pricing, and collections in future periods;

•our ability to effectively manage the growth of our business ~~implement common operating models within our country networks~~ and increase our operating leverage;

•~~the development and expansion of our operations and the effect of new technology applications in the educational services industry;~~

•~~our ability to successfully complete previously announced divestitures;~~

•the effect of existing international and U.S. laws and regulations governing our business or changes to those laws and regulations or in their application to our business;

•changes in the political, economic and business climate in the ~~international or the U.S.~~ markets ~~where~~in which we operate;

•risks of downturns in general economic conditions and in the educational services and education technology industries that could, among other things, impair our goodwill and intangible assets;

•possible increased competition from other educational service providers;

•market acceptance of new service offerings by us or our competitors and our ability to predict and respond to changes in the markets for our educational services;

•the effect on our business and results of operations from fluctuations in the value of foreign currencies;

•our ability to attract and retain key personnel;

•the fluctuations in revenues due to seasonality;

•our ability to maintain proper and effective internal controls necessary to produce accurate financial statements on a timely basis;

•our focus on a specific public benefit purpose and producing a positive effect for society may negatively influence our financial performance; and

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•the future trading prices of our Class A common stock and the impact of any securities analysts’ reports on these ~~prices; and~~

•~~our ability to maintain and, subsequently, increase tuition rates and student enrollments in our institutions.~~

prices.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Form 10-Q may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Introduction

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (the MD&A) is provided to assist readers of the financial statements in understanding the results of operations, financial condition and cash flows of Laureate Education, Inc. This MD&A should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this ~~Quarterly Report on~~ Form ~~10-Q (Form 10-Q).~~10-Q. The consolidated financial statements included elsewhere in this Form 10-Q are presented in U.S. dollars (USD) rounded to the nearest thousand, with the amounts in MD&A rounded to the nearest tenth of a million. Therefore, discrepancies in the tables between totals and the sums of the amounts listed may occur due to such rounding. Our MD&A is presented in the following sections:

•Overview;

•Results of Operations;

•Liquidity and Capital Resources;

•Critical Accounting Policies and Estimates; and

•Recently Adopted Accounting Standards.

Overview

Our Business

We ~~have built the largest international~~operate a portfolio of degree-granting higher education institutions ~~primarily focused~~ in ~~Latin America, with 873,300~~Mexico and Peru. Collectively, we have approximately 366,000 students enrolled at ~~our 29~~five institutions in ~~nine~~these two countries, ~~on more than 150 campuses included in~~which represent our ~~continuing operations~~Continuing Operations as of March 31, ~~2020, which we collectively refer to as the~~ ~~Laureate International Universities~~ ~~network.~~2021. We believe that the ~~global~~ higher education ~~market presents~~markets in Mexico and Peru present an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for affordable, quality higher education ~~around~~in those markets. We believe that the ~~world. Advanced education opportunities drive higher earnings potential, and we believe~~combination of the projected growth in the ~~middle-class population worldwide and~~middle class, limited government resources dedicated to higher education, ~~create~~and a clear value proposition demonstrated by the higher earnings potential afforded by higher education, creates substantial opportunities for high-quality private institutions to meet this growing and unmet demand. ~~Our outcomes-driven strategy is focused on enabling~~By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy.

~~As of March 31, 2020, our international portfolio of 29 institutions comprised 28~~ ~~institutions we owned or controlled, and~~ ~~one~~ ~~addition~~al ~~institution that we managed through a joint venture arrangement.~~ We have ~~six operating~~two reportable segments as described below. We group our institutions by geography in: 1~~) Brazil;~~1) Mexico; and 2) ~~Mexico; 3) Andean; 4) Central America (formerly Central America & U.S. Campuses); and 5) Rest of World~~Peru (formerly Andean) for reporting purposes.~~Our sixth segment, Online & Partnerships, includes fully online institutions that operate globally.~~

COVID-19

In response to the COVID-19 pandemic, we ~~have~~have temporarily ~~transitioned~~transitioned the educational delivery method at all of our campus-based institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside of the traditional classroom setting.

full impact of COVID-19 and the scope of any adverse effect on the Company’s operations, including any potential impairments, which could be material, cannot be fully determined at this time. See also ~~“Part II, Item 1A–~~“Item 1A—Risk ~~Factors–~~Factors—An epidemic, pandemic or other public health emergency, such as the recent outbreak of a novel strain of coronavirus (COVID-19), could have a material adverse effect on our business, financial condition, cash flows and results of ~~operations.”~~operations” in our 2020 Form 10-K.

Discontinued Operations

In 2017 and 2018, the Company announced the divestiture of certain subsidiaries ~~in our Rest of World and Central America segments. In August 2018, the Company announced the divestiture of additional subsidiaries~~ located in Europe, Asia and Central ~~America. After completing all~~America, which were included in the following segments: Peru (formerly Andean), Central America (formerly Central America & U.S. Campuses), and Rest of World. The goal of the ~~announced~~ divestitures ~~the Company’s remaining principal markets would~~was to create a more focused and simplified business model and generate proceeds to be ~~Brazil, Chile, Mexico and Peru, along with the Online and Partnerships segment and the institutions in Australia and New Zealand. At the time~~used for further repayment of the August 2018 announcement, the markets being divested by sale (the Discontinued Operations) included the institutions in Portugal and Spain, which were part of the Andean segment, all remaining institutions in the Central America segment, and all remaining institutions in the Rest of World segment, except for Australia, New Zealand and the managed institutions in the Kingdom of Saudi Arabia and China. The institutions in the Kingdom of Saudi Arabia were managed under a contract that expired at the end of August 2019 and was not renewed. Accordingly, these institutions were disposed of other than by sale on August 31, 2019, and, beginning in the third quarter of 2019, have been included in Discontinued Operations for all periods presented. The divestitureslong-term debt. This represented a strategic shift that had a major effect on the ~~Company's~~Company’s operations and financial results. Accordingly, all of the divestitures that were part of this strategic shift, as well as the Company's operations in the Kingdom of Saudi Arabia that were managed under a contract that expired on August 31, 2019 and was not renewed, were accounted for as Discontinued Operations for all periods presented in accordance with Accounting ~~Standard~~Standards Codification (ASC) 205-20, “Discontinued ~~Operations,”~~Operations” (ASC 205).

On January 27, 2020, we announced that our board of directors had authorized the ~~results~~Company to explore strategic alternatives for each of its businesses to unlock shareholder value. As a result of these efforts to explore strategic alternatives, during the ~~divestitures~~third quarter of 2020, the Company announced that ~~are part~~it had completed a sale of its operations in Chile and had signed agreements to sell its operations in Brazil, Australia and New Zealand, as well as Walden University, its fully online higher education institution in the United States. This also represented a strategic shift ~~are presented~~that had a major effect on the Company’s operations and financial results. As such, Chile, Brazil, Australia and New Zealand, and Walden also have been accounted for as ~~discontinued operations~~Discontinued Operations for all periods presented in accordance with ASC 205. The sale of our ~~consolidated financial statements included elsewhere~~operations in Australia and New Zealand was completed on November 3, 2020. For Laureate’s institutions in Mexico and Peru, the board decided after a thorough evaluation of all strategic options, including a potential sale, to continue to operate these assets under Laureate management. Accordingly, Mexico and Peru represent our Continuing Operations. The decision to focus on a regional operating model in Mexico and Peru at this ~~Form 10-Q. Since~~time does not preclude further engagement with potential buyers for those businesses. 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.

Because a number of our ~~entire Central America operating segment is~~subsidiaries are included in Discontinued Operations, itthey no longer ~~meets~~meet the criteria for a reportable segment under ASC 280, “Segment Reporting,” and, therefore, ~~it is~~are excluded from the segments information for all periods presented. In addition, the portions of the Andean and Rest of World reportable segments that are included in Discontinued Operations have also been excluded from the segment information for all periods presented. Unless indicated otherwise, the information in the MD&A relates to ~~continuing operations.~~Continuing Operations.

The Company began closing sale transactions in the first quarter of 2018. To date, we have completed the sales of subsidiaries in Cyprus, Italy, China, Germany, Morocco, Thailand, South Africa, India, Spain, Portugal, Turkey, Panama, and Costa Rica, as well as Kendall College, LLC (Kendall), the University of St. Augustine for Health Sciences, LLC (St. Augustine) and NewSchool of Architecture and Design, LLC (NSAD) in the United States, and Centro Universitário do Norte (UniNorte), an institution in the Brazil segment that was included in continuing operations as it was not part of the strategic shift. We have not yet completed the divestitures of ~~our subsidiaries in Honduras~~Brazil and ~~Malaysia.~~Walden University, both of which have signed sale agreements pending closure. See also Note 4, Discontinued Operations and Assets Held for Sale, and Note 5, Dispositions, in our consolidated financial statements included elsewhere in this Form 10-Q.

~~Exploration of Strategic Alternatives~~

~~On January 27, 2020, Laureate announced that its Board of Directors had authorized~~If the Company to explore strategic alternatives for each of its businesses to unlock shareholder value. As part of this process, the Company will evaluate all potential options for its remaining businesses, including sales, spin-offs or business combinations. There can be no assurance as to the outcome of this process, including whether it will result in the completion of any transaction, as to the values that may be realized from any potential transaction or as to how long the review process will take. The rationale for embarking on the strategic review process has not changed. However, as a result of the COVID-19 pandemic and its continuing effect on market conditions, the strategic review is progressing at a slower pace than anticipated. During the quarter ended March 31, 2020, no additional entities met the held-for-sale criteria and therefore, there were no changes to the entities classified as Discontinued Operations.

~~During this process of exploring strategic alternatives, if the Company should determine~~determines that the estimated fair value of any ~~of its remaining businesses~~business is less than its carrying value, the Company will be required to record ~~impairment charges~~a charge to write down the carrying value to fair value and the amount of that charge could be material. ~~In accordance with ASC 360, while~~See Note 4, Discontinued Operations and Assets Held for Sale, in our consolidated financial statements included elsewhere in this Form 10-Q for disclosure of the valuation allowance that the Company ~~explores these strategic alternatives and until~~recorded on the ~~held-for-sale criteria are met, the long-lived assets~~Brazil disposal group in ~~these businesses~~order to write down its carrying value to fair value.

The Company’s Continuing Operations continue to be classified as held and used and are evaluated for impairment under that model, based on the cash flows expected to be generated by the use of those asset groups in operations. ~~Once~~Should the held-for-sale criteria ~~are~~be met, the long-lived assets ~~are~~will be recorded at the lower of their carrying value or fair value, less cost to sell. Because completing a sale, spin-off, or other transaction may be challenging due to the regulatory environment, market conditions and other factors, the values that may be realized from any potential transactions could be less than if these businesses remained held and used.

If the held-for-sale criteria are met, the carrying value used to evaluate a business for potential write down and to determine the gain or loss on sale will include any accumulated foreign currency translation (FX) losses associated with that business. In recent years, the U.S. dollar has strengthened against many international currencies, including the Brazilian real and the Mexican peso. As a result, the Company has significant FX losses recorded within stockholders’ equity, as a component of accumulated other comprehensive income. As of both March 31, 2021 and December 31, 2020, the Company’s consolidated FX loss totaled approximately $1.0 billion. Upon the sale of a business, any FX loss related to that business would be recognized as part of the gain or loss on sale.

Presented in the table below are the Company’s businesses, by asset group/reporting unit, that carry the most significant FX losses:



Asset Group/ Reporting Unit	Foreign Currency Translation Losses as of
(in millions)	March 31, 2021		December 31, 2020
Brazil	$	494	$	479
Mexico	551		509
Total Brazil and Mexico	$	1,045	$	988

As discussed in Note 4, Discontinued Operations and Assets Held for Sale, in our consolidated financial statements included elsewhere in this Form 10-Q, the Company decided to sell its Brazil operations during the third quarter of 2020. The Company recorded losses in both the third and fourth quarters of 2020 to write down the carrying value of the Brazil disposal group to its estimated fair value less costs to sell. During the first quarter of 2021, the Company recorded an additional loss of approximately $32.4 million in order to write down the carrying value of the Brazil disposal group to its estimated fair value less costs to sell as of March 31, 2021. The sale of Brazil operations is targeted to close during the second quarter of 2021. While the Company plans to continue operating its institutions in Mexico, the substantial amounts of FX losses attributable to the Mexico business would have a material effect on the amount of gain or loss that would result from a sale.

Our Segments

Our ~~campus-based~~ 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 are increasingly utilizing online and hybrid (a combination of online and in-classroom) courses and programs to deliver their curriculum. ~~As noted above, in~~In response to the COVID-19 pandemic, we have temporarily transitioned the educational delivery method at all of our ~~campus-based~~ institutions to be ~~online. Many~~online and are leveraging our existing technologies and learning platforms to serve students outside of ~~our largest campus-based operations~~the traditional classroom setting. The Mexico and Peru markets are ~~in developing markets which are experiencing~~characterized by what we believe is a ~~growing~~significant imbalance between supply and demand. The demand for higher education ~~based on favorable demographics~~is large and ~~increasing secondary completion rates, driving increases in participation rates~~growing and ~~resulting in continued~~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 ~~number~~significant personal and economic benefits gained by graduates of higher education ~~students. Traditional~~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 ~~students (defined~~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 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 ~~18-24 year olds) have historically been served by public universities, which have limited capacity~~the Mexican and ~~are often underfunded, resulting in an inability to meet the growing student demand and employer requirements. This supply and demand imbalance has created a market opportunity for~~Peruvian markets mature. Essentially all of our revenues were generated from private ~~sector participants. Most students finance their own education. However,~~pay sources as there are ~~some~~no material government-sponsored ~~student financing~~loan programs ~~which are discussed below. These campus-based segments include Brazil,~~in Mexico ~~Andean, Central America, and Rest of World.~~or Peru. Specifics related to ~~each~~both of ~~these campus-based~~our reportable segments ~~and our Online & Partnerships segment~~ are discussed below:

•~~In Brazil, approximately 73%~~Private education providers in Mexico constitute 35% of ~~post-secondary students are enrolled~~the total higher-education market. The private sector plays a meaningful role in ~~private~~ higher education, ~~institutions. While the federal government defines the national curricular guidelines, institutions are licensed to operate~~bridging supply and demand imbalances created by ~~city. Laureate owns 12 institutions in seven states throughout Brazil, with~~ a particularly strong presence in the competitive São Paulo market. Many students finance their own education while others rely on the government-sponsored programs such as Prouni and Fundo de Financiamento Estudantil (FIES).

•~~Public universities in Mexico enroll approximately two-thirds~~lack of ~~students attending post-secondary education. However, many~~capacity at public ~~institutions are faced with capacity constraints or the quality of the education is considered low.~~universities. Laureate owns two institutions and is present throughout the country with a footprint of over 4035 campuses. Each institution in Mexico has a national license. Students in our Mexican institutions typically finance their own education.

•The Andean segment includes institutions in Chile and Peru. In Chile, private universities enroll approximately 72% of post-secondary students and there are government-sponsored student financing programs. In Peru, ~~the public sector plays a significant role, but~~ private universities are increasingly providing the capacity to meet growing ~~demand.~~

•~~The Central America segment includes an institution in Honduras, which is included in Discontinued Operations. Students in Central America typically finance their own education.~~

•~~The Rest~~demand and constitute 72% of ~~World segment includes campus-based~~the total higher-education market. Laureate owns three institutions in Asia Pacific with operations in Australia, Malaysia and New Zealand. Additionally, the Rest of World segment manages one institution in China through a joint venture arrangement. The institutions in Malaysia are included in Discontinued Operations.

•The Online & Partnerships segment includes fully online institutions that offer profession-oriented degree programs in the United States through Walden University (Walden), a U.S.-based accredited institution, and through the University of Liverpool and the University of Roehampton in the United Kingdom. These online institutions primarily serve working adults with undergraduate and graduate degree program offerings. Students in the United States finance their education in a variety of ways, including Title IV programs. We no longer accept new enrollments at the University of Liverpool and the University of Roehampton, which are in a teach-out process.Peru.

Corporate is a non-operating business unit whose purpose is to support operations. Its departments are responsible for establishing operational policies and internal control standards, implementing strategic initiatives, and monitoring compliance with policies and controls throughout our operations. Our Corporate segment is an internal source of capital and provides financial, human resource, information technology, insurance, legal, and tax compliance services. The Corporate segment also contains the eliminations of intersegment revenues and expenses.

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The following information for our reportable segments in continuing operations is presented as of March 31, ~~2020:~~2021:

Countries Institutions Enrollment
2020 YTD Revenues ($ in millions) ⁽¹⁾
% Contribution to 2020 YTD Revenues
Brazil 1 12 268,100 $ 83.7 16 %
Mexico 1 2 193,800 154.2 29 %
Andean 2 8 335,300 89.5 17 %
Rest of World 3 4 19,200 43.6 8 %
Online & Partnerships ⁽²⁾
2 3 56,900 156.5 30 %
Total ⁽¹⁾
9 29 873,300 $ 528.6 100 %


	Institutions	Enrollment	2021 YTD Revenues ($ in millions)(1)		% Contribution to 2021 YTD Revenues
Mexico	2	183,700	$	135.4	70	%
Peru	3	182,300	57.5		30	%
Total (1)	5	366,000	$	194.7	100	%

⁽¹⁾Amounts related to Corporate, partially offset by the elimination of intersegment revenues, ~~total $1.1~~totaled $1.8 million and are not separately presented.

⁽²⁾ ~~We no longer accept new enrollments at the University of Liverpool and the University of Roehampton.~~

Challenges

Our ~~international~~ operations are subject to complex business, economic, legal, regulatory, political, tax and foreign currency risks, which may be difficult to adequately address. The majority of our operations are outside the United States. As a result, we face risks that are inherent in international operations, including: fluctuations in exchange rates, possible currency devaluations, inflation and hyper-inflation; price controls and foreign currency exchange restrictions; potential economic and political instability in the countries in which we operate; expropriation of assets by local governments; key political elections and changes in government policies; multiple and possibly overlapping and conflicting tax laws; and compliance with a wide variety of foreign laws. See “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—We ~~are~~operate a ~~multinational business with continuing operations~~portfolio of degree-granting higher education institutions in ~~nine countries around the world, predominantly in Latin America,~~Mexico and Peru and are subject to complex business, economic, legal, political, tax and foreign currency risks, which risks may be difficult to adequately address,” in our ~~2019~~2020 Form 10-K. There are also risks associated with our decision to divest certain operations. See “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—Our exploration of strategic alternatives and our activities related to previously announced divestitures may disrupt our ongoing businesses, result in increased expenses and present certain risks to the ~~Company,”~~Company” in our ~~2019~~2020 Form 10-K. We plan to grow our continuing operations organically by: 1) adding new programs and course offerings; 2) expanding target student demographics; and 3) increasing capacity at existing and new campus locations. Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries.

Regulatory Environment and Other Matters

Our business is subject to varying laws and regulations based on the requirements of local jurisdictions. These laws and regulations are subject to updates and changes. We cannot predict the form of the rules that ultimately may be adopted in the future or what effects they might have on our business, financial condition, results of operations and cash flows. We will continue to develop and implement necessary changes that enable us to comply with such laws and regulations. See Part II, “Item 1A—Risk Factors—An epidemic, pandemic or other public health emergency, such as the recent outbreak of a novel strain of coronavirus (COVID-19), could have a material adverse effect on our business, financial condition, cash flows and results of operations.”See also “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—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,” “Risk Factors—Risks Relating to ~~Our Continuing Business—Political~~Walden University, which is included in our Discontinued Operations, and ~~regulatory developments in Chile may materially adversely affect us,” “Risk Factors—Risks Relating to Our~~the Highly Regulated Higher Education Industry in the United States,” and “Item 1—Business—Industry ~~Regulation,”~~Regulation” in our ~~2019~~2020 Form 10-K for a detailed discussion of our different regulatory environments.

~~Chilean Regulatory Developments~~Department of Justice Notice of Election to Decline Intervention

Per the court order related to the Notice, the Relators may elect to continue to pursue the action. The ~~New Law established a Superintendency of Higher Education, with authority~~Company cannot predict how long it may take to ~~regulate institutions of higher education~~resolve this matter. The Company believes that the Relators’ claims are without merit and promulgate regulations and procedures implementing the New Law. As of May 29, 2019, the New Law’s provisions regarding related party transactions came into force and the Superintendent has since issued further interpretive guidance andintends to defend vigorously against them.

3932

regulations. Immediately prior to these provisions coming into force, each of the Chilean non-profit universities and the relevant Laureate services provider reached an agreement to terminate the prior network services agreement in favor of an open bidding process, wherein unrelated third parties and Laureate-related providers were invited to compete in the provision of the range of services that are essential to the fulfillment of each of their academic missions. Each of the Chilean non-profit universities has completed all of the bidding and contractual processes subsequent to the May 2019 contract terminations. The Company participated in these open bid processes, conducted by a third party, and was judged to have submitted the superior bid in many of them. Awarded contracts entered into force once the applicable university’s board approved them or in January 2020, in the case of some of the educational services, due to the academic calendar. Within the ordinary regulatory course of supervision, the Company and the Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law. We do not believe that the New Law will change our relationship with our two technical-vocational institutions in Chile that are for-profit entities. Additionally, we will continue to evaluate our accounting treatment of the Chilean non-profit universities to determine whether we can continue to consolidate them.

Key Business Metric

Enrollment

Enrollment is our lead revenue indicator and represents our most important non-financial metric. We define “enrollment” as the number of students registered in a course on the last day of the enrollment reporting period. New enrollments provide an indication of future revenue trends. Total enrollment is a function of continuing student enrollments, new student enrollments and enrollments from acquisitions, offset by graduations, attrition and enrollment decreases due to dispositions. Attrition is defined as a student leaving the institution before completion of the program. To minimize attrition, we have implemented programs that involve assisting students in remedial education, mentoring, counseling and student financing.

Each of our institutions has an enrollment cycle that varies by geographic region and academic program. ~~During each academic year, each~~Each institution has a “Primary Intake” period during each academic year in which the majority of the enrollment occurs. Most institutions also have one or more smaller “Secondary Intake” periods. ~~The~~Our Peruvian institutions have their Primary Intake during the first calendar quarter ~~generally coincides with~~and a Secondary Intake during the third calendar quarter. Institutions in our Mexico segment have their Primary ~~Intakes for our institutions in~~Intake during the ~~Brazil, Andean and Rest of World segments. The~~ third calendar quarter ~~generally coincides with~~and a Secondary Intake during the ~~Primary Intakes for our~~first calendar quarter. Our institutions in ~~the~~Peru are generally out of session in January, February and July, while institutions in Mexico ~~and Online & Partnerships segments.~~

~~The following chart shows our enrollment cycles at our continuing operations. Shaded areas~~are generally out of session in ~~the chart represent periods~~May through July. Revenues are recognized when classes are ~~generally~~ in session and revenues are recognized. Areas that are not shaded represent summer breaks during which revenues are not typically recognized. The large circles indicate the Primary Intake start dates of our institutions, and the small circles represent Secondary Intake start dates.

session.

Principal Components of Income Statement

Revenues

The majority of our revenue is derived from tuition and educational services. The amount of tuition generated in a given period depends on the price per credit hour and the total credit hours or price per program taken by the enrolled student population. The price per credit hour varies by program, by market and by degree level. Additionally, varying levels of discounts and scholarships are offered depending on market-specific dynamics and individual achievements of our students. Revenues are recognized net of scholarships, other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. In addition to tuition revenues, we generate other revenues from student fees, dormitory/residency 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. The main drivers of changes in revenues between periods are student enrollment and price. We continually monitor market conditions and carefully adjust our tuition rates to meet local demand levels. We proactively seek the best price and content combinations to remain competitive in all the markets in which we operate.

Direct Costs

Our direct costs include labor and operating costs associated with the delivery of services to our students, including the cost of wages, payroll taxes and benefits, depreciation and amortization, rent, utilities, bad debt expenses, and marketing and promotional costs to grow future enrollments. In general, a significant portion of our direct costs tend to be variable in nature and trend with enrollment, and management continues to monitor and improve the efficiency of instructional delivery. Conversely, as campuses expand, direct costs may grow faster than enrollment growth as infrastructure investments are made in anticipation of future enrollment growth.

General and Administrative Expenses

Our general and administrative expenses primarily consist of costs associated with corporate departments, including executive management, finance, legal, business development and other departments that do not provide direct operational services.

Factors Affecting Comparability

Acquisitions

Our past experiences provide us with the expertise to further our mission of providing high-quality, accessible and affordable higher education to students by expanding into new markets if opportunities arise, primarily through acquisitions. Acquisitions ~~affect~~have historically affected the comparability of our financial statements from period to period. Acquisitions completed during one period impact comparability to a prior period in which we did not own the acquired entity. Therefore, changes related to

such entities are considered “incremental impact of acquisitions” for the first 12 months of our ownership. We have not made noany acquisitions thus far in ~~2020. We made only a small acquisition~~2021, and we did not make any acquisitions in ~~2019, which had essentially no impact on the comparability of the periods presented.~~2020 related to our Continuing Operations.

Dispositions

Any dispositions of our ~~continuing operations~~Continuing Operations affect the comparability of our financial statements from period to period. Dispositions completed during one period impact comparability to a prior period in which we owned the divested entity. Therefore, changes related to such entities are considered “incremental impact of dispositions” for the first 12 months subsequent to the disposition. As discussed above, all of the divestitures that are part of the strategic ~~shift announced in August 2018~~shifts are included in Discontinued Operations for all periods presented. ~~In November 2019, we completed the sale of UniNorte, which is part of continuing operations, and is, therefore, included in the incremental impact of dispositions.~~

Foreign Exchange

~~The majority of~~Institutions in our ~~institutions~~Continuing Operations are located outside the United States. These institutions enter into transactions in currencies other than USD and keep their local financial records in a functional currency other than the USD. We monitor the impact of foreign currency movements and the correlation between the local currency and the USD. Our revenues and expenses are generally denominated in local currency. The USD is our reporting currency and our subsidiaries operate in ~~various~~ other

functional currencies, ~~including: Australian Dollar, Brazilian Real, Chilean Peso, Euro,~~namely the Mexican ~~Peso, New Zealand Dollar,~~peso and Peruvian ~~Nuevo Sol.~~nuevo sol. The principal foreign exchange exposure is the risk related to the translation of revenues and expenses incurred in each country from the local currency into USD. See “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates” in our ~~2019~~2020 Form 10-K. In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and then excludes the impact of acquisitions, divestitures and other items, as described in the segments results.

Seasonality

~~Most of the institutions~~Institutions in our network have a summer break during which classes are generally not in session and minimal revenues are recognized. In addition to the timing of summer breaks, holidays such as Easter also have an impact on our academic calendar. Operating expenses, however, do not fully correlate to the enrollment and revenue cycles, as the institutions continue to incur expenses during summer breaks. Given the geographic diversity of our institutions and differences in timing of summer breaks, our second and fourth quarters are stronger revenue quarters as the majority of our institutions are in session for most of these respective quarters. Our first and third fiscal quarters are weaker revenue quarters because ~~the majority of~~ our institutions have summer breaks for some portion of one of these two quarters. However, our primary enrollment intakes occur during the first and third quarters. Due to this seasonality, revenues and profits in any one quarter are not necessarily indicative of results in subsequent quarters and may not be correlated to new enrollment in any one quarter. Additionally, seasonality may be affected due to other events, such as the COVID-19 pandemic, which changed the academic calendar at many of our institutions. See “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—We experience seasonal fluctuations in our results of operations” in our ~~2019~~2020 Form 10-K.

Income Tax Expense

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes. Also, discrete items can arise in the course of our operations that can further impact the Company’s effective tax rate for the period. Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities, our tax-exempt entities and our loss-making entities for which it is not 'more likely than not' that a tax benefit will be realized on the loss. See “Item 1A—Risk Factors—Risks Relating to Our ~~Continuing~~ Business—We may have exposure to greater-than-anticipated tax liabilities” in our ~~2019~~2020 Form 10-K.

Results from the Discontinued Operations

The results of operations of our Discontinued Operations for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

(in millions) 2020 2019
Revenues $ 33.2 $ 223.3
Depreciation and amortization — 0.4
Share-based compensation expense — 0.2
Other direct costs 27.5 152.4
Operating income 5.7 70.3
Other non-operating (expense) income (8.0) 3.2
Pretax (loss) income of discontinued operations (2.3) 73.5
Income tax expense (1.5) (10.1)
(Loss) income from discontinued operations, net of tax (3.8) 63.3
(Loss) gain on sales of discontinued operations, net of tax (22.0) 248.0
Net (loss) income from discontinued operations $ (25.8) $ 311.3




(in millions)	2021		2020
Revenues	$	239.8	$	369.5
Depreciation and amortization expense	—		(24.5)
Share-based compensation expense	(0.2)		(0.4)
Other direct costs	(201.2)		(378.9)
Loss on impairment of assets	(1.1)		—
Other non-operating expense	(11.2)		(55.1)
Loss on sale of discontinued operations before taxes, net	(16.8)		(23.6)
Pretax income (loss) of discontinued operations	9.2		(113.0)
Income tax (expense) benefit	(9.7)		5.2
Loss from discontinued operations, net of tax	$	(0.4)	$	(107.8)

Enrollments at our ~~discontinued operations~~Discontinued Operations as of March 31, ~~2020~~2021 and March 31, ~~2019~~2020 were ~~74,000~~365,800 and ~~161,400,~~559,900, respectively.

~~Sales Completed during~~Three Months Ended March 31, 2021

On March 8, 2021, we sold our operations in Honduras, which resulted in an after-tax gain of $0.5 million.

On January 25, 2018, we completed the sale of LEI Lie Ying Limited in China. At the closing of the sale, 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. During the first quarter of 2021, the Company adjusted the final receivable balance from the escrow account of 168.3 million Hong Kong Dollars (approximately $21.7 million at the date of receipt in April 2021), which resulted in a pre-tax gain of approximately $13.6 million.

During the first quarter of 2021, we recorded a loss of approximately $32.4 million in order to adjust the carrying value of our Brazil disposal group to its estimated fair value less costs to sell as of March 31, 2021. This loss is included in Loss on sale of discontinued operations before taxes, net.

Three Months Ended March 31, 2020

On January 10, 2020, we sold our operations in Costa Rica, which resulted in a pre-tax loss of approximately $17.2 million.

On March 6, 2020, we sold the operations of ~~NSAD,~~NewSchool of Architecture and Design, LLC (NSAD), which resulted in a pre-tax loss of approximately $5.7 million.

~~Sales Completed during the Three Months Ended March 31, 2019~~

~~On February 1, 2019, we sold the operations of St. Augustine, which resulted in a gain of approximately $223.0 million.~~

~~On February 12, 2019, we sold our operations in Thailand, which resulted in a gain of approximately $10.8 million.~~

As previously disclosed, on January 25, 2018, we completed the sale of LEI Lie Ying Limited (LEILY). During the first quarter of 2019, a legal matter, for which the Company had indemnified the buyer and recorded a contingent liability, was settled with no cost to the Company. Accordingly, the Company reversed the liability and recognized additional gain on the sale of LEILY of approximately $13.7 million.

Results of Operations

The following discussion of the results of our operations is organized as follows:

•Summary Comparison of Consolidated Results;

•Non-GAAP Financial Measure; and

•Segment Results.

Summary Comparison of Consolidated Results

Discussion of Significant Items Affecting the Consolidated Results for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

Three Months Ended March 31, ~~2020~~2021

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 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 $51.4 million and recorded an impairment charge for that amount.

Three Months Ended March 31, 2020

During the first quarter of 2020, the Company recorded an impairment charge of $3.8 million primarily related to the write-off of capitalized curriculum development costs for a program that the Company decided to stop developing.

~~Three Months Ended March 31, 2019~~

During the first quarter of 2019, we used approximately $340.0 million of the net proceeds from the sale of St. Augustine to repay a portion of our term loan that had a maturity date of April 2024 (the 2024 Term Loan). In addition, the Company elected to repay approximately $35.0 million of the approximately $51.7 million principal balance outstanding for certain notes payable at a real estate subsidiary in Chile. In connection with these debt repayments, the Company recorded a loss on debt extinguishment of $10.6 million, primarily related to the write off of a pro-rata portion of the unamortized deferred financing costs associated with the repaid debt balances. This loss is included in other non-operating income (expense) in the table below.

Comparison of Consolidated Results for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020


						% Change							% Change
						Better/(Worse)							Better/(Worse)
(in millions)	(in millions)	2020		2019		2020 vs. 2019		(in millions)	2021		2020		2021 vs. 2020
Revenues	Revenues	$	528.6	$	601.1	(12)	%	Revenues	$	194.7	$	192.3	1	%
Direct costs	Direct costs	589.0		639.2		8	%	Direct costs	181.8		220.6		18	%
General and administrative expenses	General and administrative expenses	52.9		53.9		2	%	General and administrative expenses	42.6		45.1		6	%
Loss on impairment of assets	Loss on impairment of assets	3.8		—		nm		Loss on impairment of assets	56.7		3.8		nm
Operating loss	Operating loss	(117.1)		(92.0)		(27)	%	Operating loss	(86.4)		(77.1)		(12)	%
Interest expense, net of interest income	Interest expense, net of interest income	(33.4)		(51.1)		35	%	Interest expense, net of interest income	(22.8)		(24.7)		8	%
Other non-operating income (expense)		39.4		(9.8)		nm
Other non-operating income								Other non-operating income	57.5		77.6		(26)	%
Loss from continuing operations before income taxes and equity in net income of affiliates	Loss from continuing operations before income taxes and equity in net income of affiliates	(111.2)		(152.9)		27	%	Loss from continuing operations before income taxes and equity in net income of affiliates	(51.7)		(24.1)		(115)	%
Income tax benefit		235.1		35.8		nm
Income tax (expense) benefit								Income tax (expense) benefit	(112.9)		230.0		(149)	%
Equity in net income of affiliates, net of tax	Equity in net income of affiliates, net of tax	0.2		—		nm		Equity in net income of affiliates, net of tax	—		0.2		(100)	%
Income (loss) from continuing operations		124.1		(117.1)		nm
(Loss) income from discontinued operations, net of tax		(3.8)		63.3		(106)	%
(Loss) gain on sales of discontinued operations, net of tax		(22.0)		248.0		(109)	%
Net income		98.3		194.3		(49)	%
Net loss (income) attributable to noncontrolling interests		1.3		(3.0)		(143)	%
Net income attributable to Laureate Education, Inc.		$	99.6	$	191.2	(48)	%
(Loss) income from continuing operations								(Loss) income from continuing operations	(164.5)		206.1		(180)	%
Loss from discontinued operations, net of tax								Loss from discontinued operations, net of tax	(0.4)		(107.8)		100	%
Net (loss) income								Net (loss) income	(164.9)		98.3		nm
Net loss attributable to noncontrolling interests								Net loss attributable to noncontrolling interests	—		1.3		100	%
Net (loss) income attributable to Laureate Education, Inc.								Net (loss) income attributable to Laureate Education, Inc.	$	(164.9)	$	99.6	nm

nm - percentage changes not meaningful

For further details on certain discrete items discussed below, see “Discussion of Significant Items Affecting the Consolidated Results.”

Comparison of Consolidated Results for the Three Months Ended March 31, ~~2020~~2021 to the Three Months Ended March 31, ~~2019~~2020

Revenues ~~decreased~~increased by $~~72.5~~2.4 million to ~~$528.6~~$194.7 million for the three months ended March 31, 2021 (the 2021 fiscal quarter) from $192.3 million for the three months ended March 31, 2020 (the 2020 fiscal quarter) ~~from $601.1 million for the three months ended March 31, 2019 (the 2019 fiscal quarter)~~. The effect of a net change in foreign currency exchange rates decreased revenues by $40.5 million. The incremental impact of disposition decreased revenues by $7.4 million, related to the sale of UniNorte during the fourth quarter of 2019. Average total organic enrollment at a majority of our institutions decreased during the 2020 fiscal quarter, decreasing revenues by $3.4 million compared to the 2019 fiscal quarter. The overall decrease in organic enrollment was partially offset by an increase in our Rest of World segment. The effect of changes in tuition rates and enrollments in programs at varying price points (“product mix”), pricing and timing ~~decreased~~increased revenues by ~~$21.8~~$19.2 million for the ~~2020~~2021 fiscal quarter, attributable primarily to the academic calendar and the ~~timing~~delay of semester start dates in the ~~Andean segment. These decreases~~Peru segment in ~~revenues were partially offset by other~~2020 as a result of the COVID-19 pandemic. Other Corporate and Eliminations changes ~~which~~ accounted for an increase in revenues of ~~$0.6~~$0.2 million. These increases in revenues were partially offset by lower average total organic enrollment at a majority of our institutions during the 2021 fiscal quarter, which decreased revenues by $10.4 million compared to the 2020 fiscal quarter.

Additionally, the effect of a net change in foreign currency exchange rates decreased revenues by $6.6 million, driven by the weakening of the Mexican Peso and the Peruvian Nuevo Sol against the USD.

Direct costs and general and administrative expenses combined decreased by ~~$51.2~~$41.3 million to ~~$641.9~~$224.4 million for the 2021 fiscal quarter from $265.7 million for the 2020 fiscal ~~quarter from $693.1 million for the 2019 fiscal~~ quarter. ~~This decrease in~~The effect of operational changes decreased direct costs ~~was due~~by $33.7 million, mainly driven by cost-saving initiatives to ~~the~~preserve liquidity. The effect of a net change in foreign currency exchange rates ~~which~~ decreased costs by $44.8 million; the incremental impact of the disposition of UniNorte, which decreased direct costs by $9.9 million; the effect of operational changes, which decreased direct costs by $6.5 million; and other$7.8 million. Other Corporate and Eliminations expenses ~~which~~ accounted for a decrease in costs of ~~$9.1~~$6.6 million in the ~~2020~~2021 fiscal ~~quarter.~~quarter, related to cost-reduction efforts. Partially offsetting these decreases in direct costs were ~~Excellence-in-Process (EiP) implementation expense, which increased costs by $18.1 million for the 2020 fiscal quarter compared to the 2019 fiscal quarter, in addition to~~ changes in acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets, which resulted in a year-over-year increase in direct costs of ~~$1.0~~$6.8 million.

Operating loss increased by ~~$25.1~~$9.3 million to ~~$117.1~~$86.4 million for the 2021 fiscal quarter from $77.1 million for the 2020 fiscal ~~quarter from $92.0 million for the 2019 fiscal~~ quarter. This increase ~~in operating loss~~ was primarily ~~the~~a result of ~~a higher operating loss in our Andean segment, a change from operating income to operating loss in our Mexico segment, and~~the impairment charges of $56.7 million recorded during the 2021 fiscal quarter, partially offset by a lower operating ~~income in~~loss at our ~~Online & Partnerships~~Peru segment.

segment, combined with an impairment loss of $3.8 million at Corporate during the 2020 fiscal quarter. These increases in operating loss were partially offset by decreased loss in our Brazil and Rest of World segments in the 2020 fiscal quarter compared to the 2019 fiscal quarter.

Interest expense, net of interest income decreased by ~~$17.7~~$1.9 million to ~~$33.4~~$22.8 million for the ~~2020~~2021 fiscal quarter from ~~$51.1~~$24.7 million for the ~~2019~~2020 fiscal quarter. The decrease in interest expense was primarily attributable to lower average debt balances.

Other non-operating income ~~(expense)~~ ~~changed~~decreased by ~~$49.2~~$20.1 million to ~~an income of $39.4~~$57.5 million for the 2021 fiscal quarter from $77.6 million for the 2020 fiscal ~~quarter from~~quarter. This decrease was attributable to less gain on foreign currency exchange of $50.5 million, partially offset by: (1) an increase in gain on derivative instruments of $28.5 million; (2) a loss on disposal of subsidiaries of $1.8 million during the 2020 fiscal quarter; and (3) other non-operating expense of $0.1 million during the 2020 fiscal quarter.

Income tax (expense) benefit changed by $342.9 million to an expense of ~~$(9.8)~~$(112.9) million for the ~~2019~~2021 fiscal quarter from a benefit of $230.0 million for the 2020 fiscal quarter. This change was primarily attributable ~~to: (1) a gain on foreign currency exchange during the 2020 fiscal quarter compared~~ to a loss during the 2019 fiscal quarter, for a change of $40.7 million; (2) a decrease in loss on debt extinguishment of $10.6 million related to the partial repayment of the 2024 Term Loan during the 2019 fiscal quarter; and (3) a gain on sale of subsidiaries of $2.7 million related primarily to a sale price adjustment for UniNorte. These increases in non-operating income were partially offset by a decrease in gain on derivative instruments of $4.4 million compared to the 2019 fiscal quarter, and other non-operating expense in the 2020 fiscal quarter compared to income in the 2019 fiscal quarter, for a change of $0.4 million.

~~Income tax benefit~~ ~~increased by $199.3 million to $235.1 million for the 2020 fiscal quarter from $35.8 million for the 2019 fiscal quarter. This increase was attributable to a~~nonrecurring discrete tax benefit of approximately $222 million that was recognized during the 2020 fiscal quarter related to the tax-basis step up of certain intellectual property that became subject to Dutch taxation in the ~~Netherlands.~~Netherlands as well as additional tax expense of approximately $46.5 million related to increases to income tax reserves in the 2021 fiscal quarter, with the majority of the remaining difference attributable to the change in pretax earnings.

~~(Loss) income~~Loss from discontinued operations, net of tax ~~changed~~decreased by ~~$67.1~~$107.4 million to ~~a loss of $(3.8)~~$0.4 million for the 2021 fiscal quarter from $107.8 million for the 2020 fiscal ~~quarter from income of $63.3 million for the 2019 fiscal~~ quarter. This change was ~~the~~a result of the sales during ~~2019~~2020 of ~~discontinued operations~~certain Discontinued Operations that generated ~~income~~losses during the ~~2019~~2020 fiscal quarter. See Overview for further detail on results of the Discontinued Operations.

~~(Loss) gain on sales of discontinued operations, net of tax~~ changed by $270.0 million to a loss of $(22.0) million for the 2020 fiscal quarter, related to the sales of our Costa Rica and NSAD operations, compared to a gain of $248.0 million for the 2019 fiscal quarter related to the sales of our St. Augustine and Thailand operations, along with an adjustment to the gain on the sale of our China operation.

~~Net loss (income) attributable to noncontrolling interests~~ changed by $4.3 million to a loss of $1.3 million for the 2020 fiscal quarter from an income of $(3.0) million for the 2019 fiscal quarter. This change was primarily related to our previous joint venture in Saudi Arabia.

Non-GAAP Financial Measure

We define Adjusted EBITDA as income (loss) from continuing operations, before equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on sale or disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, loss (gain) on derivatives, loss on debt extinguishment, interest expense and interest income, plus depreciation and amortization, share-based compensation expense, loss on impairment of assets and expenses related to implementation of our Excellence-in-Process (EiP) initiative. When we review Adjusted EBITDA on a segment basis, we exclude inter-segment revenues and expenses that eliminate in consolidation. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

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.

The following table presents Adjusted EBITDA and reconciles (loss) income ~~(loss)~~ from continuing operations to Adjusted EBITDA for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


						% Change							% Change
						Better/(Worse)							Better/(Worse)
(in millions)	(in millions)	2020		2019		2020 vs. 2019		(in millions)	2021		2020		2021 vs. 2020
Income (loss) from continuing operations		$	124.1	$	(117.1)	nm
(Loss) income from continuing operations								(Loss) income from continuing operations	$	(164.5)	$	206.1	(180)	%
Plus:	Plus:							Plus:
Equity in net income of affiliates, net of tax	Equity in net income of affiliates, net of tax	(0.2)		—		nm		Equity in net income of affiliates, net of tax	—		(0.2)		(100)	%
Income tax benefit		(235.1)		(35.8)		nm
Income tax expense (benefit)								Income tax expense (benefit)	112.9		(230.0)		(149)	%
Loss from continuing operations before income taxes and equity in net income of affiliates	Loss from continuing operations before income taxes and equity in net income of affiliates	(111.2)		(152.9)		27	%	Loss from continuing operations before income taxes and equity in net income of affiliates	(51.7)		(24.1)		(115)	%
Plus:	Plus:							Plus:
Gain on disposal of subsidiaries, net		(2.7)		—		nm
Foreign currency exchange (gain) loss, net		(35.9)		4.7		nm
Other expense (income), net		0.1		(0.4)		(125)	%
Loss on disposal of subsidiaries, net								Loss on disposal of subsidiaries, net	—		1.8		100	%
Foreign currency exchange gain, net								Foreign currency exchange gain, net	(28.2)		(78.7)		(64)	%
Other expense, net								Other expense, net	—		0.1		100	%
Gain on derivatives	Gain on derivatives	(0.8)		(5.2)		(85)	%	Gain on derivatives	(29.3)		(0.8)		nm
Loss on debt extinguishment		—		10.6		100	%

Interest expense	Interest expense	36.1		54.7		34	%	Interest expense	23.5		25.3		7	%
Interest income	Interest income	(2.7)		(3.6)		(25)	%	Interest income	(0.7)		(0.6)		17	%
Operating loss	Operating loss	(117.1)		(92.0)		(27)	%	Operating loss	(86.4)		(77.1)		(12)	%
Plus:	Plus:							Plus:
Depreciation and amortization	Depreciation and amortization	44.2		47.2		6	%	Depreciation and amortization	22.8		19.7		(16)	%
EBITDA	EBITDA	(72.9)		(44.8)		(63)	%	EBITDA	(63.6)		(57.4)		(11)	%
Plus:	Plus:							Plus:
Share-based compensation expense^(a)	Share-based compensation expense^(a)	2.0		3.0		33	%	Share-based compensation expense (a)	1.3		1.5		13	%
Loss on impairment of assets ^(b)	Loss on impairment of assets ^(b)	3.8		—		nm		Loss on impairment of assets (b)	56.7		3.8		nm
EiP implementation expenses ^(c)	EiP implementation expenses ^(c)	30.4		12.3		(147)	%	EiP implementation expenses (c)	15.3		22.8		33	%
Adjusted EBITDA	Adjusted EBITDA	$	(36.9)	$	(29.6)	(25)	%	Adjusted EBITDA	$	9.7	$	(29.4)	133	%

nm - percentage changes not meaningful

^(a) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC 718, “Stock Compensation.”

^(b)Represents non-cash charges related to impairments of long-lived assets. For further details, see “Discussion of Significant Items Affecting the Consolidated Results for the Three Months Ended March 31, ~~2020.~~2021.”

^(c)EiP implementation expenses are related to our 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) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs incurred in connection with the planned and completed dispositions. ~~Beginning in the third quarter of 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.~~

Comparison of Depreciation and Amortization, Share-based Compensation and EiP Implementation Expenses for the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020

Depreciation and amortization ~~decreased~~increased by ~~$3.0~~$3.1 million to ~~$44.2~~$22.8 million for the 2021 fiscal quarter from $19.7 million for the 2020 fiscal quarter. This increase was primarily attributable to amortization of Laureate’s tradename which, during the third quarter of 2020, changed from ~~$47.2 million for~~being an indefinite-lived intangible asset to being a finite-lived intangible asset. When combined with other items, this change increased depreciation and amortization by $3.9 million. Partially offsetting this increase was the ~~2019 fiscal quarter. The effects~~effect of foreign currency exchange, which decreased depreciation and amortization expense by ~~$3.4~~$0.8 million for the ~~2020~~2021 fiscal quarter. In addition, the incremental impact of the disposition of UniNorte decreased depreciation and amortization expense by $0.1 million for the 2020 fiscal quarter. These decreases were partially offset by other items, which increased depreciation and amortization by $0.5 million.

Share-based compensation expense decreased by ~~$1.0~~$0.2 million to ~~$2.0~~$1.3 million for the 2021 fiscal quarter from $1.5 million for the 2020 fiscal ~~quarter from $3.0 million for the 2019 fiscal~~ quarter.

~~EiP implementation expenses~~ increased by $18.1 million to $30.4 million for the 2020 fiscal quarter from $12.3 million for the 2019 fiscal quarter. This increase is primarily attributable to the inclusion in EiP of expenses associated with an enterprise-wide program aimed at revenue growth.

4738

EiP implementation expenses decreased by $7.5 million to $15.3 million for the 2021 fiscal quarter from $22.8 million for the 2020 fiscal quarter. This decrease was primarily attributable to lower severance costs and lower legal and consulting fees related to our divestiture activity.

Segment Results

We have ~~five~~two reportable segments: ~~Brazil,~~ Mexico ~~Andean, Rest of World~~ and ~~Online & Partnerships. As~~Peru (formerly Andean), as discussed in ~~“Overview,” the entire Central America segment is included in Discontinued Operations and therefore is excluded from segment results.~~Overview. For purposes of the following comparison of results discussion, “segment direct costs” represent direct costs incurred by the segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets, share-based compensation expense and our EiP implementation expenses have been excluded. Organic enrollment is based on average total enrollment for the period. For a further description of our segments, see ~~“Overview.”~~Overview.

The following ~~tables,~~table, derived from our consolidated financial statements included elsewhere in this Form 10-Q, presents selected financial information of our segments:

(in millions) % Change
Better/(Worse)
For the three months ended March 31, 2020 2019 2020 vs. 2019
Revenues:
Brazil $ 83.7 $ 110.0 (24) %
Mexico 154.2 156.5 (1) %
Andean 89.5 138.9 (36) %
Rest of World 43.6 33.4 31 %
Online & Partnerships 156.5 161.8 (3) %
Corporate 1.1 0.5 120 %
Consolidated Total Revenues $ 528.6 $ 601.1 (12) %
Adjusted EBITDA:
Brazil $ (19.2) $ (30.7) 37 %
Mexico 23.3 25.8 (10) %
Andean (62.2) (33.2) (87) %
Rest of World 4.8 (3.4) nm
Online & Partnerships 43.3 48.6 (11) %
Corporate (27.0) (36.7) 26 %
Consolidated Total Adjusted EBITDA $ (36.9) $ (29.6) (25) %

~~nm - percentage change not meaningful~~

~~Brazil~~

~~Financial Overview~~

~~Comparison of Brazil Results for the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019~~

(in millions) Revenues Direct Costs Adjusted EBITDA
March 31, 2019 $ 110.0 $ 140.7 $ (30.7)
Organic enrollment ⁽¹⁾
—
Product mix, pricing and timing ⁽¹⁾
(1.0)
Organic constant currency (1.0) (10.3) 9.3
Foreign exchange (17.9) (16.8) (1.1)
Acquisitions — — —
Dispositions (7.4) (9.8) 2.4
Other ⁽²⁾
— (0.9) 0.9
March 31, 2020 $ 83.7 $ 102.9 $ (19.2)

⁽¹⁾ Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.

⁽²⁾ ~~Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.~~

~~Revenues decreased by $26.3 million, a 24% decrease from the 2019 fiscal quarter.~~

•~~Organic enrollment remained flat during the 2020 fiscal quarter compared to the 2019 fiscal quarter.~~

•~~Revenues represented 16% of our consolidated total revenues for the 2020 fiscal quarter compared to 18% for the 2019 fiscal quarter.~~

~~Adjusted EBITDA increased by $11.5 million, a 37% increase from the 2019 fiscal quarter.~~


(in millions)					% Change
					Better/(Worse)
For the three months ended March 31,	2021		2020		2021 vs. 2020
Revenues:
Mexico	$	135.4	$	154.2	(12)	%
Peru	57.5		36.5		58	%
Corporate	1.8		1.6		13	%
Consolidated Total Revenues	$	194.7	$	192.3	1	%

Adjusted EBITDA:
Mexico	$	17.3	$	23.3	(26)	%
Peru	11.6		(26.7)		143	%
Corporate	(19.2)		(26.0)		26	%
Consolidated Total Adjusted EBITDA	$	9.7	$	(29.4)	133	%

4939

Mexico

Financial Overview

Comparison of Mexico Results for the Three Months Ended March 31, ~~2020~~2021 to the Three Months Ended March 31, ~~2019~~2020

(in millions) Revenues Direct Costs Adjusted EBITDA
March 31, 2019 $ 156.5 $ 130.7 $ 25.8
Organic enrollment ⁽¹⁾
(4.1)
Product mix, pricing and timing ⁽¹⁾
7.4
Organic constant currency 3.3 0.7 2.6
Foreign exchange (5.6) (2.4) (3.2)
Acquisitions — — —
Dispositions — — —
Other ⁽²⁾
— 1.9 (1.9)
March 31, 2020 $ 154.2 $ 130.9 $ 23.3

⁽²⁾ ~~Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.~~


(in millions)	Revenues		Direct Costs		Adjusted EBITDA
March 31, 2020	$	154.2	$	130.9	$	23.3
Organic enrollment (1)	(9.1)
Product mix, pricing and timing (1)	(7.1)
Organic constant currency	(16.2)		(15.9)		(0.3)
Foreign exchange	(2.6)		(3.7)		1.1

Dispositions	—		—		—
Other (2)	—		6.8		(6.8)
March 31, 2021	$	135.4	$	118.1	$	17.3

(1)

~~Revenues decreased by $2.3 million, a 1% decrease from the 2019 fiscal quarter.~~

��~~Revenue increases from product mix, pricing and timing were partially offset by a decrease in organic enrollment of 2% during the 2020 fiscal quarter, which decreased revenues by $4.1 million.~~

•~~Revenues represented 29% of our consolidated total revenues for the 2020 fiscal quarter compared to 26% for the 2019 fiscal quarter.~~

~~Adjusted EBITDA decreased by $2.5 million, a 10% decrease from the 2019 fiscal quarter.~~

~~Andean~~

~~Financial Overview~~

~~Comparison of Andean Results for the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019~~

(in millions) Revenues Direct Costs Adjusted EBITDA
March 31, 2019 $ 138.9 $ 172.1 $ (33.2)
Organic enrollment ⁽¹⁾
0.6
Product mix, pricing and timing ⁽¹⁾
(37.5)
Organic constant currency (36.9) (1.4) (35.5)
Foreign exchange (12.5) (19.0) 6.5
Acquisitions — — —
Dispositions — — —
Other — — —
March 31, 2020 $ 89.5 $ 151.7 $ (62.2)

(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.

Revenues decreased by ~~$49.4~~$18.8 million, a ~~36%~~12% decrease from the ~~2019~~2020 fiscal quarter.

•~~Revenue decreases~~Organic enrollment decreased during the ~~2020 fiscal quarter were due primarily to the academic calendar and the timing of semester start dates.~~

•~~Organic enrollment increased during the 2020~~2021 fiscal quarter by 1%7%, ~~increasing~~decreasing revenues by ~~$0.6~~$9.1 million.

•~~Revenue~~The decrease in revenues from product mix, pricing and timing was mainly due to an increase in discounts and scholarships as a percentage of revenues.

•Revenues represented ~~17%~~70% of our consolidated total revenues for the ~~2020~~2021 fiscal quarter, compared to ~~23%~~80% for the ~~2019~~2020 fiscal quarter.

Adjusted EBITDA decreased by ~~$29.0~~$6.0 million, ~~an 87%~~a 26% decrease from the ~~2019~~2020 fiscal quarter.

•~~Foreign exchange affected the results for the 2020 fiscal quarter, primarily due to weakening of the Chilean Peso relative to the USD.~~

5140

~~Rest of World~~Peru

Financial Overview

Comparison of ~~Rest of World~~Peru Results for the Three Months Ended March 31, ~~2020~~2021 to the Three Months Ended March 31, ~~2019~~2020


(in millions)	(in millions)	Revenues		Direct Costs		Adjusted EBITDA		(in millions)	Revenues		Direct Costs		Adjusted EBITDA
March 31, 2019		$	33.4	$	36.8	$	(3.4)
March 31, 2020								March 31, 2020	$	36.5	$	63.2	$	(26.7)
Organic enrollment ⁽¹⁾	Organic enrollment ⁽¹⁾	7.1						Organic enrollment (1)	(1.3)
Product mix, pricing and timing ⁽¹⁾	Product mix, pricing and timing ⁽¹⁾	7.6						Product mix, pricing and timing (1)	26.3
Organic constant currency	Organic constant currency	14.7		5.2		9.5		Organic constant currency	25.0		(14.0)		39.0
Foreign exchange	Foreign exchange	(4.5)		(3.2)		(1.3)		Foreign exchange	(4.0)		(3.3)		(0.7)
Acquisitions		—		—		—

Dispositions	Dispositions	—		—		—		Dispositions	—		—		—
Other	Other	—		—		—		Other	—		—		—
March 31, 2020		$	43.6	$	38.8	$	4.8
March 31, 2021								March 31, 2021	$	57.5	$	45.9	$	11.6

Revenues increased by ~~$10.2~~$21.0 million, a ~~31%~~58% increase from the ~~2019~~2020 fiscal quarter.

•~~Organic enrollment increased during~~The increase in revenues from product mix, pricing and timing was mainly due to the effect of the COVID-19 pandemic on the academic calendar timing, which decreased revenues for the 2020 fiscal quarter.

•Organic enrollment decreased during the 2021 fiscal quarter by ~~22%~~4%, ~~increasing~~decreasing revenues by ~~$7.1~~$1.3 million.

•~~Revenues~~Revenue represented 8%30% of our consolidated total revenues for the ~~2020~~2021 fiscal quarter compared to 6%20% for the ~~2019~~2020 fiscal quarter.

Adjusted EBITDA increased by ~~$8.2~~$38.3 million, a 143% increase from ~~the 2019 fiscal quarter.~~

•~~Foreign exchange affected the results for~~ the 2020 fiscal ~~quarter, primarily due to the weakening of the Australian Dollar relative to the USD.~~quarter.

5241

~~Online & Partnerships~~

~~Financial Overview~~

~~Comparison of Online & Partnerships Results for the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019~~

(in millions) Revenues Direct Costs Adjusted EBITDA
March 31, 2019 $ 161.8 $ 113.2 $ 48.6
Organic enrollment ⁽¹⁾
(7.0)
Product mix, pricing and timing ⁽¹⁾
1.7
Organic constant currency (5.3) — (5.3)
Foreign exchange — — —
Acquisitions — — —
Dispositions — — —
Other — — —
March 31, 2020 $ 156.5 $ 113.2 $ 43.3

⁽¹⁾Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.

~~Revenues decreased by $5.3 million, a 3% decrease from the 2019 fiscal quarter.~~

•~~Organic enrollment decreased during the 2020 fiscal quarter by 6%, decreasing revenues by $7.0 million.~~

•~~Revenues represented 30% of our consolidated total revenues for the 2020 fiscal quarter compared to 27% for the 2019 fiscal quarter.~~

~~Adjusted EBITDA decreased by $5.3 million, a 11% decrease compared to the 2019 fiscal quarter.~~

Corporate

Corporate revenues ~~represent amounts from~~primarily include our ~~consolidated joint venture with the University of Liverpool, as well as~~transition services agreements related to divestitures and centralized IT costs charged to ~~various segments,~~other business units, partially offset by the elimination of intersegment revenues.

~~Operating results for Corporate for the three months ended March 31, 2020 and 2019:~~

% Change
Better/(Worse)
(in millions) 2020 2019 2020 vs. 2019
Revenues $ 1.1 $ 0.5 120 %
Expenses 28.1 37.2 24 %
Adjusted EBITDA $ (27.0) $ (36.7) 26 %

Comparison of Corporate Results for the Three Months Ended March 31, ~~2020~~2021 to the Three Months Ended March 31, ~~2019~~2020


					% Change
					Better/(Worse)
(in millions)	2021		2020		2021 vs. 2020
Revenues	$	1.8	$	1.6	13	%
Expenses	21.0		27.6		24	%
Adjusted EBITDA	$	(19.2)	$	(26.0)	26	%

Adjusted EBITDA increased by ~~$9.7~~$6.8 million, a 26% increase from the ~~2019~~2020 fiscal quarter.

•~~Labor~~Cost-reduction efforts led to reduced labor costs and other professional fees, ~~decreased~~decreasing expenses by ~~$10.7~~$8.6 million ~~for~~compared to the 2020 fiscal ~~quarter compared to the 2019 fiscal quarter, related to cost-reduction efforts.~~quarter.

•Other items accounted for a decrease in Adjusted EBITDA of ~~$1.0~~$1.8 million.

Liquidity and Capital Resources

Liquidity Sources

We anticipate that cash flow from operations and available cash will be sufficient to meet our current operating requirements and manage our liquidity needs, including any effects on the Company’s business operations that arise from the COVID-19 pandemic, for at least the next 12 months from the date of issuance of this report. ~~In addition, we are controlling discretionary expenses and reviewing our capital spending projects.~~

~~However, as the impact of the COVID-19 pandemic on the economy and our operations evolves, we will~~We continue to assess our liquidity ~~needs.~~needs as a result of the COVID-19 pandemic. A continued worldwide disruption could materially affect our future access to liquidity sources, particularly our cash flows from operations, as well as our financial condition and capitalization. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions, such as obtaining additional financing. The Company will continue to evaluate its financial position in light of future developments, particularly those relating to ~~COVID-19.~~the COVID-19 pandemic.

Our primary source of cash is revenue from tuition charged to students in connection with our various education program offerings. ~~The majority~~Essentially all of our ~~students finance the cost of their own education and/~~revenues are generated from private pay sources as there are no material government-sponsored loan programs in Mexico or ~~seek third-party financing programs.~~Peru. We anticipate generating sufficient cash flow from operations in the ~~majority of~~ countries ~~where~~in which we operate to satisfy the working capital and financing needs of our organic growth plans for each country. If our educational institutions within one country were unable to maintain sufficient liquidity, we would consider using internal cash resources or reasonable short-term working capital facilities to accommodate any short- to medium-term shortfalls.

As of March 31, ~~2020,~~2021, our secondary source of liquidity was cash and cash equivalents of ~~$546.7~~$561.3 million, which does not include ~~$46.8~~$272.1 million of cash recorded at subsidiaries that are classified as held for sale at March 31, ~~2020.~~2021. Our cash accounts are maintained with high-quality financial institutions with no significant concentration in any one institution.

The Company also maintains a revolving credit facility with a syndicate of financial institutions as a source of liquidity. The revolving credit facility provides for borrowings of $410.0 million and a maturity date of October 7, 2024. From time to time, we draw down on the revolver and, in accordance with the terms of the credit agreement, any proceeds drawn on the revolving credit facility may be used for general corporate purposes.

If certain conditions are satisfied, the Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement) also provides for an incremental revolving and term loan facilities not to exceed $565.0 million plus additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Third A&R Credit Agreement, on a pro forma basis, does not exceed 2.75x. From time to time, we draw down on the revolver and, in accordance with the terms of the credit agreement, any proceeds drawn on the revolving credit facility may be used for general corporate purposes. In March 2020, we fully drew down our $410.0 million revolving credit facility in order to increase our cash position and preserve financial flexibility in light of the COVID-19 pandemic.

~~Sale Transactions~~

On January 10, 2020, we completed the sale of our Costa Rica operations and received net proceeds of approximately $15.0 million (approximately $3.3 million net of cash sold and transaction fees). The Company will also receive up to $7.0 million within two years after the sale if Laureate Costa Rica meets certain performance metrics.

On March 6, 2020, we completed the sale of NSAD, a higher education institution located in California. At closing, the Company paid subsidies to the buyers of approximately $4.5 million. Under the terms of the sale agreement, the Company will pay additional subsidies to the buyers of approximately $2.8 million ratably on a quarterly basis over the next four years, beginning on March 31, 2020.

5442

Completed Sale Transactions

On March 8, 2021, we completed the divestiture of our operations in Honduras and received proceeds of approximately $26.0 million, net of cash sold and closing costs.

On January 25, 2018, we Completed the sale of LEI Lie Ying Limited in China. At the closing of the sale, 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 April 2021, the Company received the final balance from the escrow account of $168.3 million Hong Kong Dollars (approximately $21.7 million at the date of receipt).

Pending Sale Transactions

On September 11, 2020, the Company entered into a sale agreement to sell its operation of Walden University, LLC, (Walden University) for a purchase price of $1,480.0 million in cash, subject to certain adjustments set forth in the sale agreement. The closing of this transaction is expected to occur toward the end of 2021 and is subject to customary closing conditions, including regulatory approval by the U.S. Department of Education and the Higher Learning Commission and required antitrust approvals. Under certain specified circumstances, the purchaser may be required to pay the Company a termination fee of $88.0 million, including if the purchaser terminates the sale agreement as a result of the imposition by the U.S. Department of Education of certain specified restrictions, or if Laureate terminates the sale agreement as a result of the purchaser’s failure to consummate the transaction upon satisfaction of the closing conditions. Upon completion of the sale, the restricted cash that is held to collateralize the letters of credit in favor of the DOE will be released and reclassified to cash and cash equivalents.

On November 2, 2020, the Company entered into a definitive agreement with Ânima Holding S.A., one of the largest private higher education organizations in Brazil, for the sale of its Brazilian operations. The transaction value is approximately 4,400.0 million Brazilian Reals (approximately $765.0 million at the time of signing), including 3,800.0 million Brazilian Reals (approximately $660.7 million at the time of signing) in cash consideration, which is subject to certain adjustments, and assumption of net indebtedness. Pursuant to the agreement, the Company will be entitled to receive up to 203.0 million Brazilian Reals (approximately $35.3 million at the time of signing) in additional cash consideration if certain metrics are achieved following the closing. The transaction is targeted to close during the second quarter of 2021, subject to regulatory approval.

Liquidity Restrictions

Our liquidity is affected by restricted cash balances, which totaled $~~196.4~~106.6 million and ~~$186.9~~$117.2 million as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Indefinite Reinvestment of Foreign Earnings

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As part of our business strategies, we have determined that, except for one of our institutions in Peru, all earnings from our foreign continuing operations will be deemed indefinitely reinvested outside of the United States. As of March 31, ~~2020, $347.7~~2021, $142.9 million of our total ~~$546.7~~$561.3 million of cash and cash equivalents were held by foreign ~~subsidiaries, including $145.5 million held by VIEs.~~subsidiaries. These amounts above do not include ~~$46.8~~$272.1 million of cash recorded at subsidiaries that are classified as held for sale at March 31, ~~2020,~~2021, of which ~~$46.6~~$39.5 million was held by foreign subsidiaries. As of December 31, ~~2019, $275.6~~2020, $127.7 million of our total ~~$339.6~~$750.1 million of cash and cash equivalents were held by foreign ~~subsidiaries, including $157.0 million held by VIEs.~~subsidiaries. These amounts above do not include ~~$55.4~~$270.2 million of cash recorded at subsidiaries that were classified as held for sale at December 31, ~~2019,~~2020, of which ~~$49.5~~$66.4 million was held by foreign subsidiaries. ~~The VIEs' cash and cash equivalents balances are generally required to be used only for the operations of these VIEs.~~

Liquidity Requirements

Our short-term liquidity requirements include: funding for debt service (including finance leases); operating lease obligations; payments due to shareholders of acquired ~~companies;~~companies (seller notes); payments of deferred compensation; working capital; operating expenses; capital expenditures; and business development activities.

Long-term liquidity requirements include: payments on long-term debt (including finance leases); operating lease obligations; payments of ~~long-term amounts due to shareholders of acquired companies; payments of~~ deferred compensation; and payments of other third-party obligations.

Debt

As of March 31, ~~2020,~~2021, senior long-term borrowings totaled ~~$1,209.1~~$798.7 million, ~~and~~which consisted entirely of ~~$409.1 million of borrowings~~the balance outstanding under our ~~revolving credit facility and $800.0 million in~~ Senior Notes due 2025 that mature in May 2025. As discussed above, in March 2020, we fully drew down our $410.0 million revolving credit facility in order to increase our cash position and preserve financial flexibility in light of the COVID-19 pandemic.

As of March 31, ~~2020,~~2021, other debt balances totaled ~~$364.8~~$152.5 million and our finance lease obligations and sale-leaseback financings were ~~$91.6~~$50.4 million. Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries, mortgages payable and notes payable.

Approximately ~~$34.4~~$116.6 million of long-term debt, seller notes and finance leases, including the current portion, is included in the held-for-sale liabilities recorded on the consolidated balance sheet as of March 31, ~~2020.~~2021. For further description of the held-for-sale amounts see Note 4, Discontinued Operations and Assets Held for Sale, in our consolidated financial statements included elsewhere in this Form 10-Q.

Senior Secured Credit Facility

Our Senior Secured Credit Facility consist of the revolving credit facility, which provides for borrowings of $410.0 million. As of both March 31, ~~2020~~2021 and December 31, ~~2019, the~~2020, there was no balance outstanding ~~balance~~ under our Senior Secured Credit ~~Facility was $409.1 million and $202.4 million, respectively, which consisted entirely of balances outstanding under our $410.0 million revolving credit facility.~~Facility.

Covenants

Under the Third A&R Credit Agreement, we are subject to a Consolidated Senior Secured Debt to Consolidated EBITDA financial maintenance covenant (a leverage ratio covenant), as defined in the Third A&R Credit Agreement, unless certain conditions are satisfied. As of March 31, ~~2020,~~2021, those conditions were satisfied and, therefore, we were ~~in compliance with~~not subject to the leverage ~~ratio covenant.~~ratio. The maximum ratio, as defined, is 3.50x as of ~~March~~the last day of each quarter commencing with the quarter ending December 31, ~~2020~~2019 and thereafter. In addition, ~~notes payable~~indebtedness at some of our locations contain financial maintenance covenants and we were in compliance with those ~~covenants.~~covenants as March 31, 2021.

Senior Notes

As of both March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the outstanding balance under our Senior Notes due 2025 was ~~$800.0~~$798.7 million.

As described in Note 19, Subsequent Events, in our consolidated financial statements included elsewhere in this Form 10-Q, on May 4, 2021, we redeemed $500.0 million aggregate principal amount of our Senior Notes due 2025 at a redemption price of 104.125% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date. The total payment made was $521.0 million. The source of the funds was cash on hand from the proceeds of the sale of our operations in Australia and New Zealand.

Additionally, we notified holders of our Senior Notes due 2025 of our election to redeem the remaining $298.7 million aggregate principal amount at a price of 104.125% of the principal amount thereof plus accrued and unpaid interest thereon to, but excluding the redemption date. The redemption is contingent on completion of the sale of our Brazil operations, which is targeted to close by the end of the second quarter of 2021.

Following completion of the above redemptions, we will have repaid the entire outstanding principal amount of the Senior Notes due 2025. As of March 31, 2021, the amount of unamortized deferred financing costs associated with the Senior Notes was approximately $45.7 million. This amount will be charged to loss on debt extinguishment upon the repayment of the Senior Notes due 2025, which is expected to occur during the second quarter of 2021.

Leases

We conduct a significant portion of our operations from leased facilities. These facilities include our corporate headquarters, other office locations, and many of our higher education facilities. As discussed in Note ~~10,~~9, Leases, in our consolidated financial statements included elsewhere in this Form 10-Q, we have significant liabilities recorded related to our leased facilities, which will require future cash payments.

~~Due to Shareholders of Acquired Companies~~

~~In the past, one method of payment for acquisitions was the use of promissory notes payable to the sellers of acquired companies.~~ As of March 31, ~~2020~~2021 and December 31, ~~2019, we recorded $16.9~~2020, the present value of operating lease liabilities was $476.0 million and ~~$21.5~~$519.1 million, ~~respectively,~~respectively. These amounts exclude operating lease liabilities for ~~these liabilities. See also Note 6, Due to Shareholders~~our Discontinued Operations of ~~Acquired Companies, in our consolidated financial statements included elsewhere in this Form 10-Q.~~$114.6 million and $151.4 million as of March 31, 2021 and December 31, 2020, respectively.

Capital Expenditures

Capital expenditures consist of purchases of property and equipment and expenditures for deferred costs. Our capital expenditure program is a component of our liquidity and capital management strategy. This program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment, to grow our network through the following: (1) capacity expansion at institutions to support enrollment growth; (2) new campuses for institutions in our existing markets; (3) information technology to increase efficiency and controls; and (4) online content development. Our non-discretionary spending includes the maintenance of existing facilities. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. We believe that our internal sources of cash and our ability to obtain additional third-party financing, subject to market conditions, will be sufficient to fund our investing activities.

Our total capital expenditures for our ~~continuing~~Continuing and ~~discontinued operations,~~Discontinued Operations, excluding receipts from the sale of subsidiaries and property equipment, were ~~$28.1~~$13.6 million and ~~$35.8~~$28.1 million during the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~22%~~52% decrease in capital expenditures ~~for~~was primarily due to a targeted reduction and deferral across all business lines to preserve cash amid the ~~2020 fiscal quarter compared to the 2019 fiscal quarter was~~COVID-19 pandemic, as well as a result of the executed divestitures.

~~Derivatives~~Laureate Education, Inc. Deferred Compensation Plan

InDuring the ~~normal course~~first quarter of ~~business,~~2021, the Company’s board of directors approved the termination of a deferred compensation plan for certain executive employees and members of our ~~operations are exposed~~board of directors, with such termination effective April 1, 2021. The Company expects that the participants will receive a distribution payout of their account balances under the terms of the plan in April 2022. As of March 31, 2021, the total plan assets were $1.9 million and the total plan liabilities were $5.1 million. The Company plans to ~~fluctuations in foreign currency values~~fund the difference between the assets and ~~interest rate changes. We mitigate a portion of these risks through a risk-management program that includes~~ the ~~use of derivatives. For further information on our derivatives, see Note 15, Derivative Instruments, in our consolidated financial statements included elsewhere in this Form 10-Q.~~liabilities with operating cash flows.

~~Redeemable Noncontrolling Interests and Equity~~Stock Repurchase Program

~~In connection with certain acquisitions, we have entered into put/call arrangements with certain minority shareholders, and we~~On November 5, 2020, Laureate’s board of directors approved a new stock repurchase program to acquire up to $300 million of the Company’s Class A common stock. The Company’s repurchases may be ~~required~~ made on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or ~~elect~~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 ~~purchase~~a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s board of directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. The Company expects to finance the repurchases with free cash flow and excess cash and liquidity on-hand. As of March 31, 2021, the approximate dollar value of shares yet to be purchased under this stock repurchase program was $89.5 million.

On April 30, 2021, the Laureate’s board of directors approved an increase of the above authorization to repurchase shares of the Company’s Class A common stock by $200.0 million, for a total authorization (including the above authorized repurchases) of up to $500.0 million of the Company’s Class A common stock. The Company expects to finance the additional ~~ownership interests in~~$200.0 million of repurchases with proceeds received from the ~~associated entities within~~sale of the Company’s Brazil operations, from cash on-hand or from its revolving credit facility, or a specified timeframe. In certain cases, call rights may contain minimum payment provisions. If we exercise such call rights, or negotiate the purchase of additional ownership interests, the consideration required could be higher than the estimated put values.combination thereof.

Cash Flows

In the consolidated statements of cash flows, the changes in operating assets and liabilities are presented excluding the effects of exchange rate changes, acquisitions, and reclassifications, as these effects do not represent operating cash flows. Accordingly, the amounts in the consolidated statements of cash flows do not agree with the changes of the operating assets and liabilities as presented in the consolidated balance sheets. The effects of exchange rate changes on cash are presented separately in the consolidated statements of cash flows.

5645

The following table summarizes our cash flows from operating, investing, and financing activities for ~~each of~~ the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


(in millions)	(in millions)	2020		2019		(in millions)	2021		2020
Cash (used in) provided by:
Cash provided by (used in):						Cash provided by (used in):
Operating activities	Operating activities	$	(3.5)	$	45.0	Operating activities	$	11.3	$	(3.5)
Investing activities	Investing activities	(24.0)		294.1		Investing activities	(1.1)		(24.0)
Financing activities	Financing activities	267.9		(449.6)		Financing activities	(199.2)		267.9
Effects of exchange rates changes on cash	Effects of exchange rates changes on cash	(33.6)		2.0		Effects of exchange rates changes on cash	(6.9)		(7.7)
Change in cash included in current assets held for sale	Change in cash included in current assets held for sale	9.7		(2.8)		Change in cash included in current assets held for sale	(3.5)		10.1
Net change in cash and cash equivalents and restricted cash	Net change in cash and cash equivalents and restricted cash	$	216.5	$	(111.3)	Net change in cash and cash equivalents and restricted cash	$	(199.3)	$	242.8

Comparison of Cash Flows for the Three Months Ended March 31, ~~2020~~2021 to the Three Months Ended March 31, ~~2019~~2020

Operating Activities

Cash flows from operating activities ~~decreased~~increased by ~~$48.5~~$14.8 million to anoperating cash inflow of $11.3 million for the 2021 fiscal quarter from operating cash outflow of $(3.5) million for the 2020 fiscal ~~quarter from an operating cash inflow of $45.0 million for the 2019 fiscal~~ quarter. This ~~decrease~~increase in operating cash was primarily attributable to the higher operating loss as well as the year-over-year effect of the divestitures that occurred in 2019, as certain of the divested institutions, such as St. Augustine, contributed positive operating cash flows during the first quarter of 2019. When combined with changes in working capital, ~~these factors~~which accounted for ~~a decrease~~an increase in operating cash flows of approximately ~~$92.2 million. This decrease was partially offset by: (1) a decrease in~~$47.9 million, primarily driven by collections. In addition, cash paid for interest ~~of $33.1~~decreased by $3.0 million, from ~~$47.7 million for the 2019 fiscal quarter to~~ $14.6 million for the 2020 fiscal quarter to $11.6 million for the 2021 fiscal quarter, attributable to lower average debt ~~balances; (2) a decrease~~balances. These increases in operating cash were partially offset by an increase in cash paid for taxes of ~~$2.4~~$36.1 million, from ~~$18.7 million for the 2019 fiscal quarter to~~ $16.3 million for the 2020 fiscal ~~quarter; and (3) a positive year-over-year effect~~quarter to ~~operating cash of $8.2~~$52.4 million for the 2021 fiscal quarter, primarily related to ~~a cash~~the payment of withholding taxes for intercompany loans that were capitalized during the ~~2019~~2021 fiscal ~~quarter to settle cross currency and interest rate swaps in Chile.~~quarter.

Investing Activities

Cash ~~flows from~~used in investing activities decreased by ~~$318.1~~$22.9 million to ~~an investing cash outflow of $(24.0)~~$1.1 million for the ~~2020~~2021 fiscal quarter from ~~an investing cash inflow of $294.1~~$24.0 million for the ~~2019~~2020 fiscal quarter. This decrease was primarily attributable to ~~lower~~higher cash receipts from the sales of ~~discontinued operations~~Discontinued Operations of ~~$327.0~~$26.8 million, from ~~$331.0 million during the 2019 fiscal quarter (for the sales of our St. Augustine and Thailand operations) to~~ $4.0 million ~~net,~~ during the 2020 fiscal quarter (for the net effect of the sales of NSAD and our operations in Costa ~~Rica and NSAD~~Rica) to $30.8 million, net, during the 2021 fiscal quarter (primarily for the sale our operations in Honduras and the receipt of a ~~deposit~~portion of the purchase price that was withheld in connection to the 2020 sale of our Malaysia operations). In addition, cash used for ~~INTI Malaysia). This decrease~~capital expenditures decreased $14.4 million compared to the 2020 fiscal quarter. These increases in investing cash ~~was~~were partially offset by ~~a decrease in capital expenditures~~payments of ~~$7.7 million. Additionally, during the 2019 fiscal quarter, we made a payment of $1.2~~$18.3 million for ~~a small acquisition in Brazil.~~derivative instruments related to foreign exchange swap agreements associated with the planned sale of our Brazil operations.

Financing Activities

Cash flows from financing activities ~~increased~~decreased by ~~$717.5~~$467.1 million to a financing cash outflow of $(199.2) million for the 2021 fiscal quarter from a financing cash inflow of $267.9 million for the 2020 fiscal ~~quarter from a financing cash outflow of $(449.6) million for the 2019 fiscal~~ quarter. This ~~increase~~decrease in financing cash ~~inflows~~ was primarily attributable to: (1) net payments of long-term debt during the 2021 fiscal quarter, compared to net proceeds ~~from~~of long-term debt during the 2020 fiscal quarter, related to the full draw down on our $410.0 million revolving credit facility in the first quarter of 2020 in order to increase our cash position and preserve financial flexibility in response to the COVID-19 pandemic, ~~compared to net payments of long-term debt during the 2019 fiscal quarter,~~ for a change of ~~$714.9~~$325.6 million; (2) ~~proceeds from exercise of common stock options of $26.8 million~~higher payments during the ~~2020 fiscal quarter; and (3) a payment for a debt redemption in Chile during the 2019~~2021 fiscal quarter of ~~$5.2 million. These increases in financing cash inflows were partially offset by payments of $29.2~~$116.0 million ~~made during the 2020 fiscal quarter~~ to repurchase shares of our Class A common stock under our stock repurchase ~~program.~~program; and (3) a year-over-year decrease in proceeds from the exercise of common stock options of $26.8 million. These decreases in financing cash were partially offset by payments of deferred purchase price for acquisitions during the 2020 fiscal quarter of $1.5 million. Other items accounted for the remaining difference of $0.2 million.

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Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements in conformity with 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. Our significant accounting policies are discussed in Note 2, Significant Accounting Policies, of the audited consolidated financial statements included in our ~~2019~~2020 Form 10-K. Our critical accounting policies require the most significant judgments and estimates about the effect of matters that are inherently uncertain. As a result, these accounting policies and estimates could materially affect our financial statements and are critical to the understanding of our results of operations and financial condition. For a complete discussion of our critical accounting policies, see the “Critical Accounting Policies and Estimates” section of the MD&A in our ~~2019~~2020 Form 10-K. During the three months ended March 31, ~~2020,~~2021, there were no significant changes to our critical accounting policies. We will continue to monitor the effect to the Company of the COVID-19 pandemic and assess whether any changes to our accounting estimates are warranted as additional information becomes available.

Recently Adopted Accounting Standards

Refer to Note 2, Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Form 10-Q for recently adopted accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our ~~2019~~2020 Form 10-K. There have been no significant changes in our market risk exposures since our December 31, ~~2019~~2020 fiscal year end.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. The purpose of disclosure controls and procedures is to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our CEO and CFO, to allow timely decisions regarding required disclosures. Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5847

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, ~~2019 (the “2019~~2020 (our “2020 Form 10-K”) for information regarding material pending legal proceedings. Except as set forth below, there have been no new material legal proceedings and no material developments in the legal proceedings previously disclosed.

As previously disclosed in the ~~2019~~2020 Form 10-K, in ~~May~~June 2019, Laureate was notified by the Spanish Taxing Authorities (“STA”) that a tax audit was opened for ~~some of~~ our Spanish ~~subsidiaries for fiscal years 2014-2015 for corporate income tax based on the STA’s rejection of the tax deductibility of financial expenses related~~subsidiary with respect to the same intercompany acquisitions as the previous tax audits. Iniciativas Culturales de España, S.L. (“ICE”), our Spanish holding company, received the final assessment on January 27, 2020, in which the STA rejected the allegation writ submitted by ICE and confirmed the assessment issued by the tax audit, amounting to approximately EUR 4.3 million ($4.8 million at March 31, 2020). ICE intends to appeal the referred assessment before the Administrative Central Court, and, in order to do so, ICE has posted a cash-collateralized letter of credit of approximately EUR 4.3 million ($4.8 million at March 31, 2020).

~~Finally, the referred tax audit was extended in June 2019 to the~~ non-resident income tax for the second semester of fiscal year 2015. On March ~~11, 2020, ICE received~~30, 2021, in response to our allegations, the STA issued a final assessment to Laureate Netherlands Holding B.V. (f/k/a Iniciativas Culturales de España, S.L.) in which the Chief Tax Auditor challenged the preliminary assessment ~~of approximately EUR 21.6 million ($23.9 million at March 31, 2020). This assessment is~~and found that the STA could not ~~final, and~~claim the withholding tax obligation in this case. At this time, we ~~intend to challenge~~consider the ~~referred assessment before the STA.~~matter resolved.

Item 1A. Risk Factors

~~Except as stated below, there~~There have been no material changes to ~~our~~the risk factors as previously disclosed in ~~Part I, Item 1A “Risk~~“Item 1A. Risk Factors” ~~included~~ in our ~~2019~~2020 Form 10-K.

In addition to the information ~~contained herein,~~set forth in this report, you should consider the risk factors disclosed in our ~~2019~~2020 Form 10-K. Furthermore, the impact of COVID-19 may ~~also~~ exacerbate other risks discussed in our ~~2019~~2020 Form 10-K, any one of which could have a material adverse effect on our business, financial condition, cash flows and results of operations. The situation ~~is changing rapidly,~~continues to evolve and additional impacts may arise ~~that~~of which we are not ~~aware of currently.~~

An epidemic, pandemic or other public health emergency, such as the recent outbreak of a novel strain of coronavirus (COVID-19), could have a material adverse effect on our business, financial condition, cash flows and results of operations.

A novel strain of coronavirus, COVID-19, first identified in China in late 2019, has spread globally, including to the United States and each country in which we operate. The Company may face risks related to COVID-19, which was declared a global pandemic by the World Health Organization on March 11, 2020. The extent to which COVID-19, like any other rapidly spreading contagious illness, may impact our operations will depend upon the evolution of the outbreak, which is highly speculative at this time and cannot be predicted with any level of confidence. The Company cannot predict the duration of the outbreak, the severity of the illness or the scope, breadth or depth of the actions that may be taken by governmental authorities and/or other third parties in response to the outbreak.

We believe that the continued spread of COVID-19 and any resulting preventative or protective actions could adversely impact our operations. While we have acted quickly to leverage our existing technologies and learning platforms to serve students outside of the traditional classroom setting—and each of our affected institutions has now transitioned most, if not all, of our face-to-face students to an online learning environment—our ability to retain students, enroll new students and maintain tuition levels, as well as the ability of our students to pay tuition and other fees, may be materially adversely affected by, among other things, (i) the health of our students, our faculty and their families; (ii) decreases in our students’ and/or their families’ level of disposable income; (iii) the performance and reliability of our online program infrastructure; (iv) the ability of our recruiters to conduct outreach with prospective students during the student recruitment season; and (v) adverse legislative and regulatory actions. If we are unable to retain students, enroll new students, maintain tuition levels and collect student accounts receivables, we may be required to record impairments and our business, financial condition, cash flows and results of operations may be materially adversely affected.

In addition, an epidemic, pandemic or other public health emergency could adversely affect, and, in the case of COVID-19, has adversely affected, global economies and financial markets. The depth and duration of the global economic and market downturn resulting from COVID-19 remain highly uncertain, particularly given the lack of appropriate historical benchmarks. Reduced economic activity, increased unemployment and, in some countries, economic recession, may reduce the demand for our programs among students, which could materially adversely affect our business, financial condition, cash flows and results of operations. These adverse economic developments also may result in a reduction in the number of jobs available to our graduates and lower salaries being offered in connection with available employment, which, in turn, may result in declines in our placement and retention rates. As a result, any general economic slowdown or recession that disproportionately impacts the countries in which our institutions operate could have a material adverse effect on our business, financial condition, cash flowscurrently aware.

and results of operations. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. Additionally, the COVID-19 pandemic has resulted in severe disruption and volatility in the U.S. financial markets. The trading price of our Class A common stock has declined dramatically since the beginning of March 2020 and may continue to experience volatility and declines.

The COVID-19 pandemic continues to evolve rapidly. The ultimate impact of COVID-19—like any other major epidemic, pandemic or public health emergency—is highly uncertain and subject to change. We do not yet know the full extent of potential impacts on our business or the global economy as a whole. We intend to continue to monitor the situation.

6048

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities (in thousands, except per share amounts)

The following table provides a summary of the Company’s purchases of its Class A common stock during the three months ended March 31, ~~2020~~2021 pursuant to the Company’s authorized stock repurchase program:

Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs
Approximate dollar value of shares yet to be purchased under the plans or programs ⁽¹⁾
1/1/20 - 1/31/20 1,619 $ 18.02 1,619 $ —
2/1/20 - 2/29/20 — — — —
3/1/20 - 3/31/20 — — — —
Total 1,619 $ 18.02 1,619 $ —


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares yet to be purchased under the plans or programs (1)
1/1/21 - 1/31/21	6,133	$	14.09	6,133	$	148,648
2/1/21 - 2/28/21	1,787	13.99		1,787	123,649
3/1/21 - 3/31/21	2,481	13.77		2,481	89,482
Total	10,401	$	14.00	10,401	$	89,482

⁽¹⁾On ~~August 8, 2019,~~November 5, 2020, the Company announced that its board of directors had authorized a stock repurchase program to acquire up to ~~$150,000~~$300,000 of the Company’s Class A common stock. ~~In early October 2019,~~See further description of the ~~Company's~~ stock ~~repurchases reached~~repurchase program in “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

On April 30, 2021, the ~~previously authorized limit of $150,000 and, on October 14, 2019, the Company's~~Company’s board of directors approved ~~the~~an increase of ~~its existing~~the above authorization to repurchase shares of the ~~Company's~~Company’s Class A common stock by ~~$150,000. In January 2020,~~$200,000, for a total authorization (including the ~~Company's stock repurchases reached~~above authorized repurchases) of up to $500,000 of the ~~authorized limit.~~Company’s Class A common stock.

Item 6. Exhibits

~~(a) Exhibits filed with this report or, where indicated, previously filed and incorporated by reference:~~

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
2.1#
Amended and Restated Sale and Purchase Agreement, dated as of November 22, 2017 and amended and restated on January 11, 2018, by and among LEI European Investments B.V., Laureate International B.V. and Galileo Global Education Luxco S.À R.L.
10-K 001-38002 2.7 03/20/2018
2.2#
Sale and Purchase Agreement, dated April 12, 2018, among LEI European Investments B.V., Laureate International B.V. and Global University Systems Germany B.V.
8-K 001-38002
2.1 04/18/2018
2.3#
Asset Purchase Agreement, dated January 15, 2018, among Kendall College, LLC, The Dining Room at Kendall NFP, National Louis University and Laureate Education, Inc.
8-K 001-38002 2.1 08/07/2018
2.4#
Membership Interest Purchase Agreement, dated April 24, 2018, by and among Laureate Education, Inc., Exeter Street Holdings, LLC, University of St. Augustine for Health Sciences, LLC and University of St. Augustine Acquisition Corp.
10-Q 001-38002 2.4 08/09/2018
2.5#
Sale and Purchase Agreement, dated December 12, 2018, by and among Iniciativas Culturales de España S.L., Laureate I B.V. and Samarinda Investments, S.L.
10-K 001-38002 2.5 02/28/2019
2.6#
Share Purchase Agreement relating to the sale and purchase of equity shares of Pearl Retail Solutions Private Limited, M-Power Energy India Private Limited and Data Ram Sons Private Limited
8-K 001-38002 2.1 05/13/2019
2.7#
Share Purchase Agreement relating to all the shares in the capital of Education Turkey B.V.
8-K 001-38002 2.1 08/29/2019
2.8#
Equity Purchase Agreement, dated January 10, 2020, by and among SP Costa Rica Holdings, LLC, Laureate International B.V. and Laureate Education, Inc.
10-K 001-38002 2.8 02/27/2020
3.1
Amended and Restated Certificate of Incorporation
S-1/A 333-207243 3.1 01/31/2017
3.2
Amended and Restated Bylaws
S-1/A 333-207243 3.2 01/31/2017
3.3
Certificate of Retirement of Convertible Redeemable Preferred Stock, Series A
8-K 001-38002 3.1 07/20/2018
4.1
Description of Capital Stock of Laureate Education, Inc.
10-K 001-38002 4.1 02/27/2020
4.2
Indenture, dated as of April 26, 2017, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 8.250% Senior Notes due 2025
8-K 001-38002 4.3 04/27/2017
4.3
Form of 8.250% Senior Note due 2025 (included as Exhibit A to Exhibit 4.3)
8-K 001-38002 4.3 04/27/2017
10.1†
2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries
S-1/A 333-207243 10.31 11/20/2015
10.2†
2007 Stock Incentive Plan Form of Stock Option Agreement, as amended on August 31, 2010
S-1/A 333-207243 10.32 11/20/2015
10.3†
2013 Long-Term Incentive Plan Form of Stock Option Agreement effective as of September 11, 2013
S-1/A 333-207243 10.34 11/20/2015
10.4†
Laureate Education, Inc. Deferred Compensation Plan, as amended and restated effective January 1, 2009
S-1/A 333-207243 10.35 11/20/2015
10.5†
Form of Management Stockholder’s Agreement for equityholders
S-1/A 333-207243 10.36 11/20/2015
10.6†
Employment Offer Letter, dated July 21, 2008, between Laureate Education, Inc. and Eilif Serck‑Hanssen
S-1/A 333-207243 10.40 11/20/2015
10.7†
Amendment to Employment Offer Letter, dated December 9, 2010, between Laureate Education, Inc. and Eilif Serck -Hanssen
S-1/A 333-207243 10.41 11/20/2015
10.8†
Form of Time -Based Restricted Stock Units Agreement, for grants from and after September 11, 2013
S-1/A 333-207243 10.43 11/20/2015

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
10.9
Master Service and Confidentiality Agreement, dated April 28, 2014, by and between Laureate Education, Inc. and Accenture LLP
S-1/A 333-207243 10.45 11/20/2015
10.10‡
System Wide Master Agreement, dated April 10, 2015, between Blackboard Inc. and Laureate Education, Inc.
S-1/A 333-207243 10.46 11/20/2015
10.11†
Form of Stockholders’ Agreement for Entity -Appointed Directors
S-1/A 333-207243 10.47 11/20/2015
10.12†
Form of Stockholders’ Agreement for Individual Directors
S-1/A 333-207243 10.48 11/20/2015
10.13†
Executive Retention Agreement, dated February 25, 2016, by and between Ricardo Berckemeyer and Laureate Education, Inc., effective as of September 1, 2015
S-1/A 333-207243 10.54 05/20/2016
10.14†
2013 Long -Term Incentive Plan Form of Stock Option Agreement for 2016 for Named Executive Officers
S-1/A 333-207243 10.57 05/20/2016
10.15†
2013 Long -Term Incentive Plan Form of Stock Option Agreement for 2016
S-1/A 333-207243 10.58 05/20/2016
10.16†
2013 Long -Term Incentive Plan Form of Restricted Stock Units Agreement for 2016 for Named Executive Officers
S-1/A 333-207243 10.59 05/20/2016
10.17†
2013 Long -Term Incentive Plan Form of Restricted Stock Units Agreement for 2016
S-1/A 333-207243 10.60 05/20/2016
10.18
Subscription Agreement, dated as of December 4, 2016, by and among Laureate Education, Inc., Macquarie Sierra Investment Holdings Inc., and each of the other Persons listed on Schedule A and Schedule B thereto.
S-1/A 333-207243 10.63 12/15/2016
10.19
Registration Rights Agreement by and among Laureate Education, Inc., each of the Investors set forth on Schedule A thereto, Douglas L. Becker and Wengen Alberta, Limited Partnership
10-K 001-38002
10.29 03/20/2018
10.20
Investors’ Stockholders Agreement by and among Laureate Education, Inc., Wengen Alberta, Limited Partnership and the Investors set forth on Schedule A thereto
10-K 001-38002
10.30 03/20/2018
10.21†
Form of Cash Long -Term Incentive Plan Agreement
S-1/A 333-207243 10.73 01/10/2017
10.22
Amended and Restated Securityholders Agreement by and among Wengen Alberta, Limited Partnership, Laureate Education, Inc. and the other parties thereto
8-K 001-38002 10.1 02/06/2017
10.23
Amended and Restated Registration Rights Agreement by and among Wengen Alberta, Limited Partnership, Wengen Investments Limited, Laureate Education, Inc. and the other parties thereto
8-K 001-38002 10.2 02/06/2017
10.24†
Amendment to the 2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries
10-K 001-38002 10.76 03/29/2017
10.25
Amended and Restated Guarantee, dated as of April 26, 2017, by Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as guarantors, in favor of Citibank, N.A., as collateral agent
10-Q 001-38002 10.83 05/11/2017
10.26
Amended and Restated Pledge Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as pledgors, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.84 05/11/2017
10.27
Amended and Restated Security Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as grantors, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.85 05/11/2017
10.28
Second Amended and Restated Collateral Agreement, dated as of April 26, 2017, between Walden University, LLC, certain other domestic subsidiaries of Laureate Education, Inc. from time to time, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.86 05/11/2017

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
10.29†
Laureate Education, Inc. Amended and Restated 2013 Long-Term Incentive Plan
8-K 001-38002 10.1 06/20/2017
10.30†
Amended and Restated 2013 Long -Term Incentive Plan Form of Annual Performance Share Units Notice and Agreement for 2017
10-Q 001-38002 10.51 08/08/2017
10.31†
Amended and Restated 2013 Long -Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017
10-Q 001-38002 10.52 08/08/2017
10.32†
Amended and Restated 2013 Long -Term Incentive Plan Form of Time-based Stock Option Agreement for 2017
10-Q 001-38002 10.53 08/08/2017
10.33†
Amended and Restated 2013 Long -Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017
10-Q 001-38002 10.54 08/08/2017
10.34†
Amended and Restated 2013 Long -Term Incentive Plan Form of Performance Share Units Notice and Agreement for 2017
10-Q 001-38002 10.55 08/08/2017
10.35†
Amended and Restated 2013 Long -Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017 for Certain Executives
10-Q 001-38002 10.56 08/08/2017
10.36†
Amended and Restated 2013 Long -Term Incentive Plan Form of Time-based Stock Option Agreement for 2017 for Certain Executives
10-Q 001-38002 10.57 08/08/2017
10.37†
Amended and Restated 2013 Long -Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017 for Certain Executives
10-Q 001-38002 10.58 08/08/2017
10.38†
Form of 2017-2018 Laureate Executive Cash Long-Term Bonus Plan for Certain Executives
10-Q 001-38002 10.59 08/08/2017
10.39†
Employment Offer Letter, dated August 15, 2017, between Laureate Education, Inc. and Victoria Silbey
10-Q 001-38002 10.61 11/08/2017
10.40†
Form of Stock Option Agreement with exercise price of $18.36 for certain executives
10-Q 001-38002 10.64 11/08/2017
10.41†
Form of Stock Option Agreement with exercise price of $21.00 for certain executives
10-Q 001-38002 10.65 11/08/2017
10.42†
Employment Offer Letter, dated November 6, 2017, between Laureate Education, Inc. and Jean-Jacques Charhon
10-K 001-38002 10.67 03/20/2018
10.43†
Transitional Employment Agreement, effective as of November 9, 2017, between Paula Singer and Laureate Education, Inc.
10-K 001-38002 10.68 03/20/2018
10.44
Stock Option Agreement, dated as of January 2, 2018, between Jean-Jacques Charhon and Laureate Education, Inc.
10-Q 001-38002 10.71 05/09/2018
10.45†
Employment Offer Letter, dated May 3, 2018, between Timothy Grace and Laureate Education, Inc.
10-Q 001-38002 10.72 08/09/2018
10.46†
Amended and Restated International Letter of Assignment, dated July 12, 2017, between Neel Broker and Laureate Education, Inc.
10-K 001-38002 10.73 02/28/2019
10.47†
Addendum, dated December 18, 2018, to the Amended and Restated International Letter of Assignment between Neel Broker and Laureate Education, Inc.
10-K 001-38002 10.74 02/28/2019
10.48†
Form of 2019 Annual Incentive Plan
10-Q 001-38002 10.62 08/08/2019
10.49†
Form of Director Indemnity Agreement
10-Q 001-38002 10.64 08/08/2019
10.50†
Separation Agreement, dated July 14, 2019, between Ricardo Berckemeyer and Laureate Education, Inc., effective as of July 15, 2019
10-Q 001-38002 10.65 08/08/2019
10.51†
Separation Agreement and General Release, dated July 25, 2019, between Jose Roberto Loureiro and Laureate Education, Inc., effective as of July 29, 2019
10-Q 001-38002 10.66 08/08/2019
10.52#
Third Amended and Restated Credit Agreement, dated as of October 7, 2019, among Laureate Education, Inc., the lending institutions from time to time parties thereto, and Citibank, N.A., as administrative agent and collateral agent
8-K 001-38002 10.1 10/11/2019

Exhibit

No.

Exhibit Description

~~Form~~

~~File Number~~

~~Exhibit~~

~~Number~~

~~Filing Date~~

~~10.53*†◊~~

~~Form of Retention Letter for Certain Corporate Executives~~

~~10.54*†~~

~~Form of Retention/Transaction Bonus Letter for Certain Regional Executives~~

~~10.55*†~~

~~Form of Named Executive Officer Temporary Salary Reduction Letter~~

31.1*31.1

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32*32

Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ex. 101.INS*101.INS

XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document

Ex. 101.SCH*101.SCH

XBRL Taxonomy Extension Schema Document

Ex. 101.CAL*101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Ex. 101.LAB*101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Ex. 101.PRE*101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Ex. 101.DEF*101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

~~Filed herewith.~~

~~Laureate Education, Inc. hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request.~~

†

~~Indicates a management contract or compensatory plan or arrangement.~~

‡

~~Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the U.S. Securities and Exchange Commission.~~

◊

~~Certain identified information has been omitted from this exhibit because it is both (1) not material, and (2) would be competitively harmful if publicly disclosed.~~

6549

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly ~~authorized, on May 7, 2020.~~

authorized.

/s/ ~~JEAN-JACQUES CHARHON~~RICHARD M. BUSKIRK

~~Jean-Jacques Charhon~~Richard M. Buskirk

~~Executive~~Senior Vice President and Chief Financial Officer

Date: May 6, 2021

/s/ ~~TAL DARMON~~GERARD M. KNAUER

~~Tal Darmon~~Gerard M. Knauer

~~Chief Accounting Officer, Senior~~ Vice President,

Accounting and Global ~~Corporate~~ Controller

Date: May 6, 2021

6650


	March 31, 2020						December 31, 2019
	VIE		Consolidated		VIE		Consolidated
Balance Sheets data:
Cash and cash equivalents	$	145,502	$	546,675	$	157,003	$	339,629
Current assets held for sale	18,900		72,415		16,050		83,800
Other current assets	258,350		692,935		173,072		519,498
Total current assets	422,752		1,312,025		346,125		942,927

Goodwill	140,673		1,501,042		159,957		1,701,495
Tradenames	55,434		1,069,084		61,691		1,119,454
Other intangible assets, net	—		1,045		—		1,431
Operating lease right-of-use assets, net	62,851		768,747		65,761		861,878
Long-term assets held for sale	62,257		216,316		52,519		305,973
Other long-term assets	237,135		1,628,823		262,579		1,582,470
Total assets	981,102		6,497,082		948,632		6,515,628

Current liabilities held for sale	11,784		60,602		11,741		64,204
Other current liabilities	255,367		1,250,759		130,602		1,006,600
Long-term operating leases, less current portion	53,156		712,564		56,571		792,358
Long-term liabilities held for sale	39,199		70,988		29,666		124,914
Long-term debt and other long-term liabilities	36,010		1,820,398		28,619		1,711,106
Total liabilities	395,516		3,915,311		257,199		3,699,182

Total stockholders' equity	585,586		2,569,808		691,433		2,804,151
Total stockholders' equity attributable to Laureate Education, Inc.	585,586		2,583,122		691,433		2,816,963


	March 31, 2020		December 31, 2019		Nominal Currency	Interest Rate %
Universidade Anhembi Morumbi (UAM Brazil)	$	16,678	$	20,179	BRL	CDI + 2%
Faculdade Porto-Alegrense (FAPA)	191		230		BRL	IGP-M
IADE Group	—		1,109		EUR	3%





















Total due to shareholders of acquired companies	16,869		21,518
Less: Current portion of due to shareholders of acquired companies	8,587		11,523
Due to shareholders of acquired companies, less current portion	$	8,282	$	9,995


	Nominal Currency	First Exercisable Date	Estimated Value as of March 31, 2020 redeemable within 12-months		Reported Value
Noncontrolling interest holder put arrangements
INTI Education Holdings Sdn Bhd (Inti Holdings) - 10.10%	MYR	Current	$	10,249	$	10,249

Total noncontrolling interest holder put arrangements			10,249		10,249
Puttable common stock - not currently redeemable	USD	*	—		1,714
Total redeemable noncontrolling interests and equity			$	10,249	$	11,963


	March 31, 2020		December 31, 2019
Financing receivables	$	30,860	$	28,856
Allowance for doubtful accounts	(6,123)		(5,909)
Financing receivables, net of allowances	$	24,737	$	22,947


	Chile		Other		Total
As of March 31, 2020
Amounts past due less than one year	$	8,289	$	343	$	8,632
Amounts past due one year or greater	2,550		237		2,787
Total past due (on non-accrual status)	10,839		580		11,419
Not past due	17,563		1,878		19,441
Total financing receivables	$	28,402	$	2,458	$	30,860

As of December 31, 2019
Amounts past due less than one year	$	10,687	$	1,556	$	12,243
Amounts past due one year or greater	3,295		62		3,357
Total past due (on non-accrual status)	13,982		1,618		15,600
Not past due	12,556		700		13,256
Total financing receivables	$	26,538	$	2,318	$	28,856


	Number of Financing Receivable Accounts	Pre-Modification Balance Outstanding		Post-Modification Balance Outstanding
2020	166	$	421	$	393
2019	296	$	898	$	867


	Number of Financing Receivable Accounts	Balance at Default


Total	75	$	147


	(Loss) Gain Recognized in Comprehensive Income (Effective Portion)					Income Statement Location		Gain Reclassified from AOCI to Income (Effective Portion)						Total Consolidated Interest Expense
	2020		2019			2020		2019		2020		2019
Cash flow hedge
Interest rate swaps	$	—	$	(1,212)	Interest expense	$	—	$	1,212
Net investment hedge
Cross currency swaps	—		3,821		N/A	—		—
Total	$	—	$	2,609		$	—	$	1,212	$	(36,110)	$	(54,653)


	Countries	Institutions	Enrollment	2020 YTD Revenues ($ in millions) ⁽¹⁾		% Contribution to 2020 YTD Revenues
Brazil	1	12	268,100	$	83.7	16	%
Mexico	1	2	193,800	154.2		29	%
Andean	2	8	335,300	89.5		17	%
Rest of World	3	4	19,200	43.6		8	%
Online & Partnerships ⁽²⁾	2	3	56,900	156.5		30	%
Total ⁽¹⁾	9	29	873,300	$	528.6	100	%