LAUREATE EDUCATION, INC. - Quarter Report: 2023 September (Form 10-Q)

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 September 30, 2023

☐ 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.)

PMB 1158, 1000 Brickell Avenue, Suite 715,

Miami,

Florida

33131

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (786) 209-3368

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
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 September 30, 2023
Common stock, par value $0.004 per share						157,367,366 shares


INDEX
PART I. - FINANCIAL INFORMATION		Page No.

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Operations - Three months ended September 30, 2023 and September 30, 2022	2

	Consolidated Statements of Operations - Nine months ended September 30, 2023 and September 30, 2022	3

	Consolidated Statements of Comprehensive Income - Three months ended September 30, 2023 and September 30, 2022	4

	Consolidated Statements of Comprehensive Income - Nine months ended September 30, 2023 and September 30, 2022	5

	Consolidated Balance Sheets - September 30, 2023 and December 31, 2022	6

	Consolidated Statements of Cash Flows - Nine months ended September 30, 2023 and September 30, 2022	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	40

PART II. - OTHER INFORMATION

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41



Item 5.	Other Information	41

Item 6.	Exhibits	42

SIGNATURES		43

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 September 30,	2023		2022
	(Unaudited)		(Unaudited)
Revenues	$	361,533	$	300,999
Costs and expenses:
Direct costs	291,052		229,361
General and administrative expenses	11,772		15,321

Operating income	58,709		56,317
Interest income	2,830		1,970
Interest expense	(5,169)		(3,694)


Other income, net	66		1,393
Foreign currency exchange gain, net	9,755		15,146
Gain on disposal of subsidiaries, net	3,260		—
Income from continuing operations before income taxes	69,451		71,132
Income tax expense	(33,716)		(39,280)

Income from continuing operations	35,735		31,852
Income (loss) from discontinued operations, net of tax of $0 for both periods	246		(816)
Net income	35,981		31,036
Net loss attributable to noncontrolling interests	177		81
Net income attributable to Laureate Education, Inc.	$	36,158	$	31,117


Basic and diluted earnings per share:




Income from continuing operations	$	0.23	$	0.19
Income (loss) from discontinued operations	—		—
Basic and diluted earnings per share	$	0.23	$	0.19

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

IN THOUSANDS, except per share amounts


For the nine months ended September 30,	2023		2022
	(Unaudited)		(Unaudited)
Revenues	$	1,074,855	$	895,943
Costs and expenses:
Direct costs	810,362		655,055
General and administrative expenses	34,046		48,752
Loss on impairment of assets	1,620		144
Operating income	228,827		191,992
Interest income	6,939		5,623
Interest expense	(17,258)		(11,589)


Other income, net	198		413
Foreign currency exchange loss, net	(51,554)		(2,906)
Gain on disposal of subsidiaries, net	3,567		1,461
Income from continuing operations before income taxes and equity in net (loss) income of affiliates	170,719		184,994
Income tax expense	(101,379)		(159,213)
Equity in net (loss) income of affiliates, net of tax	(3)		70
Income from continuing operations	69,337		25,851
(Loss) income from discontinued operations, net of tax of $0 for both periods	(3,805)		4,064
Net income	65,532		29,915
Net loss attributable to noncontrolling interests	196		414
Net income attributable to Laureate Education, Inc.	$	65,728	$	30,329






Basic and diluted earnings per share:
Income from continuing operations	$	0.44	$	0.15
(Loss) income from discontinued operations	(0.02)		0.02
Basic and diluted earnings per share	$	0.42	$	0.17

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

IN THOUSANDS


For the three months ended September 30,	2023		2022
	(Unaudited)		(Unaudited)
Net income	$	35,981	$	31,036
Other comprehensive income:
Foreign currency translation adjustment, net of tax of $0 for both periods	(46,371)		(42,161)

Minimum pension liability adjustment, net of tax of $0 for both periods	—		983
Total other comprehensive loss	(46,371)		(41,178)
Comprehensive loss	(10,390)		(10,142)
Net comprehensive loss attributable to noncontrolling interests	175		82
Comprehensive loss attributable to Laureate Education, Inc.	$	(10,215)	$	(10,060)

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 nine months ended September 30,	2023		2022
	(Unaudited)		(Unaudited)
Net income	$	65,532	$	29,915
Other comprehensive income:
Foreign currency translation adjustment, net of tax of $0 for both periods	118,341		25,386

Minimum pension liability adjustment, net of tax of $0 for both periods	—		997
Total other comprehensive income	118,341		26,383
Comprehensive income	183,873		56,298
Net comprehensive loss attributable to noncontrolling interests	280		410
Comprehensive income attributable to Laureate Education, Inc.	$	184,153	$	56,708

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


	September 30, 2023		December 31, 2022
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	130,862	$	85,167
Restricted cash	7,587		8,617
Receivables:
Accounts and notes receivable	159,730		133,105
Other receivables	10,658		9,486
Allowance for doubtful accounts	(74,639)		(61,882)
Receivables, net	95,749		80,709

Income tax receivable	18,604		32,261

Prepaid expenses and other current assets	26,493		19,445
Current assets held for sale	738		—
Total current assets	280,033		226,199
Property and equipment:
Land	131,420		127,154
Buildings	370,220		348,931
Furniture, equipment and software	548,310		494,004
Leasehold improvements	129,698		117,820
Construction in-progress	16,016		11,871
Accumulated depreciation and amortization	(652,058)		(576,373)
Property and equipment, net	543,606		523,407
Operating lease right-of-use assets, net	356,351		389,565
Goodwill	640,358		583,493
Tradenames, net	164,055		151,645
Deferred costs, net	5,032		5,310
Deferred income taxes	58,054		51,941

Other assets	39,264		40,677
Long-term assets held for sale	10,521		—
Total assets	$	2,097,274	$	1,972,237

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


	September 30, 2023		December 31, 2022
Liabilities and stockholders' equity	(Unaudited)
Current liabilities:
Accounts payable	$	33,325	$	42,842
Accrued expenses	73,178		50,563
Accrued compensation and benefits	89,624		85,215
Deferred revenue and student deposits	81,039		51,264
Current portion of operating leases	56,265		38,994
Current portion of long-term debt and finance leases	49,053		56,184
Income taxes payable	16,427		38,738



Other current liabilities	31,201		17,587
Current liabilities held for sale	1,436		—
Total current liabilities	431,548		381,387
Long-term operating leases, less current portion	336,905		376,898
Long-term debt and finance leases, less current portion	83,059		175,929
Deferred compensation	9,313		10,379
Income taxes payable	136,709		131,301
Deferred income taxes	89,268		89,765

Other long-term liabilities	35,385		30,823
Long-term liabilities held for sale	10,047		—
Total liabilities	1,132,234		1,196,482
Redeemable equity	1,398		1,398
Stockholders' equity:
Preferred stock, par value $0.001 per share – 50,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022	—		—
Common stock, par value $0.004 per share – 700,000 shares authorized, 157,367 shares issued and outstanding as of September 30, 2023 and 230,779 shares issued and 157,013 shares outstanding as of December 31, 2022	629		923
Additional paid-in capital	1,184,329		2,204,755
Retained earnings	104,972		39,244
Accumulated other comprehensive loss	(323,999)		(442,424)
Treasury stock at cost (73,766 shares held at December 31, 2022)	—		(1,026,272)
Total Laureate Education, Inc. stockholders' equity	965,931		776,226
Noncontrolling interests	(2,289)		(1,869)
Total stockholders' equity	963,642		774,357
Total liabilities and stockholders' equity	$	2,097,274	$	1,972,237

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 nine months ended September 30,	2023		2022
Cash flows from operating activities	(Unaudited)		(Unaudited)
Net income	$	65,532	$	29,915
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	51,956		43,628
Amortization of operating lease right-of-use assets	24,117		22,200
Loss on impairment of assets	1,620		144
Loss (gain) on sales and disposal of subsidiaries and property and equipment, net	5,279		(5,797)



Non-cash interest expense	1,149		1,127
Non-cash share-based compensation expense	4,894		6,971
Bad debt expense	29,535		14,194
Deferred income taxes	(9,537)		8,152
Unrealized foreign currency exchange loss (gain)	51,100		(2,169)
Non-cash loss from non-income tax contingencies	—		419
Other, net	(5,751)		120
Changes in operating assets and liabilities:
Receivables	(41,021)		(22,011)
Prepaid expenses and other assets	(5,651)		(11)
Accounts payable and accrued expenses	1,040		(16,866)
Income tax receivable/payable, net	(6,708)		53,588
Deferred revenue and other liabilities	19,865		21,077
Net cash provided by operating activities	187,419		154,681
Cash flows from investing activities
Purchase of property and equipment	(26,740)		(16,754)
Expenditures for deferred costs	—		(363)
Receipts from sales of discontinued operations and property and equipment	503		83,405






Net cash (used in) provided by investing activities	(26,237)		66,288
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of original issue discount	48,122		235,181
Payments on long-term debt	(167,189)		(270,413)
Payment of dividend equivalent rights for vested share-based awards	(2,318)		(4,572)
Payments to purchase noncontrolling interests	(123)		—
Proceeds from exercise of stock options	3,196		11,888
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options	(616)		(1,438)
Payments to repurchase common stock	—		(207,151)
Payments of debt issuance costs	(1,285)		—


Net cash used in financing activities	(120,213)		(236,505)
Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	4,005		6,448
Change in cash included in current assets held for sale	(309)		—
Net change in Cash and cash equivalents and Restricted cash	44,665		(9,088)
Cash and cash equivalents and Restricted cash at beginning of period	93,784		345,575
Cash and cash equivalents and Restricted cash at end of period	$	138,449	$	336,487

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 licensed universities and higher education institutions (institutions). Laureate's programs are provided through institutions that are campus-based and through electronically distributed educational programs (online). We are domiciled in Delaware as a public benefit corporation, a demonstration of our long-term commitment to our mission to benefit our students and society. The Company completed its initial public offering (IPO) on February 6, 2017, and its shares are listed on the Nasdaq Global Select Market under the symbol “LAUR.”

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, 2022 (the 2022 Form 10-K).

Note 2. Revenue

Revenue Recognition

Laureate's revenues primarily consist of tuition and educational service revenues. We also generate other revenues from student fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. Revenues are recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds and waivers. Laureate's institutions have various billing and academic cycles.

We determine revenue recognition through the five-step model prescribed by ASC Topic 606, Revenue from Contracts with Customers, as follows:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

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

We assess collectability on a portfolio basis prior to recording revenue. Generally, students cannot re-enroll for the next academic session without satisfactory resolution of any past-due amounts. If a student withdraws from an institution, Laureate's obligation to issue a refund depends on the refund policy at that institution and the timing of the student's withdrawal. Generally, our refund obligations are reduced over the course of the academic term. We record refunds as a reduction of deferred revenue as applicable.

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


	Mexico		Peru		Corporate(1)		Total
2023
Tuition and educational services	$	240,329	$	170,337	$	—	$	410,666	114	%
Other	36,972		20,293		(32)		57,233		15	%
Gross revenue	277,301		190,630		(32)		467,899		129	%
Less: Discounts / waivers / scholarships	(91,913)		(14,453)		—		(106,366)		(29)	%
Total	$	185,388	$	176,177	$	(32)	$	361,533	100	%
2022
Tuition and educational services	$	178,733	$	147,982	$	—	$	326,715	109	%
Other	32,750		15,493		670		48,913		16	%
Gross revenue	211,483		163,475		670		375,628		125	%
Less: Discounts / waivers / scholarships	(63,701)		(10,928)		—		(74,629)		(25)	%
Total	$	147,782	$	152,547	$	670	$	300,999	100	%

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

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


	Mexico		Peru		Corporate(1)		Total
2023
Tuition and educational services	$	716,575	$	509,940	$	—	$	1,226,515	114	%
Other	99,355		47,679		(38)		146,996		14	%
Gross revenue	815,930		557,619		(38)		1,373,511		128	%
Less: Discounts / waivers / scholarships	(256,443)		(42,213)		—		(298,656)		(28)	%
Total	$	559,487	$	515,406	$	(38)	$	1,074,855	100	%
2022
Tuition and educational services	$	541,744	$	451,570	$	—	$	993,314	111	%
Other	80,869		41,841		3,848		126,558		14	%
Gross revenue	622,613		493,411		3,848		1,119,872		125	%
Less: Discounts / waivers / scholarships	(187,622)		(36,307)		—		(223,929)		(25)	%
Total	$	434,991	$	457,104	$	3,848	$	895,943	100	%

(1) Includes the elimination of inter-segment 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 $159,730 and $133,105 as of September 30, 2023 and December 31, 2022, respectively. The increase in the contract assets balance at September 30, 2023 compared to December 31, 2022 was primarily driven by enrollment cycles. The first and third calendar

quarters generally coincide with the primary and secondary intakes for our larger institutions. All contract asset amounts are classified as current.

Contract liabilities in the amount of $81,039 and $51,264 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively. The increase in the contract liability balance during the period ended September 30, 2023 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period. Substantially all of the contract liability balance at the beginning of the year was recognized as revenue during the nine months ended September 30, 2023.

Note 3. Assets Held for Sale

During the second quarter of 2023, two of the Company’s subsidiaries that operate K-12 educational programs in Mexico met the criteria for classification as held for sale under ASC 360-10-45-9, “Long-Lived Assets Classified as Held for Sale.” The sale of the K-12 campuses is intended to allow the Mexico segment to focus on its core business. The planned sale of this disposal group does not represent a strategic shift and therefore does not qualify for presentation as a discontinued operation in the Consolidated Financial Statements. In addition, during the third quarter of 2023, a parcel of land at one of our campuses in Mexico met the criteria for classification as held for sale under ASC 360-10-45-9. The assets and liabilities are recorded at the lower of their carrying values or their estimated fair values less costs to sell. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following table:


	September 30, 2023		December 31, 2022
Assets Held for Sale
Cash and cash equivalents	$	314	$	—
Receivables, net	408		—
Property and equipment, net	1,683		—
Operating lease right-of-use assets, net	8,839		—
Other assets	15		—
Total assets held for sale	$	11,259	$	—


Liabilities Held for Sale
Deferred revenue and student deposits	$	906	$	—
Operating leases, including current portion	8,956		—
Long-term debt, including current portion	840		—
Other liabilities	781		—
Total liabilities held for sale	$	11,483	$	—

The long-term debt balance represents a finance lease for property.

Note 4. Business and Geographic Segment Information

Laureate’s educational services are offered through two reportable segments: Mexico and Peru. Laureate determines its segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.

Our segments generate revenues by providing an education that emphasizes profession-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. Our educational offerings utilize campus-based, online and hybrid (a combination of online and in-classroom) courses and programs to deliver their curriculum. The Mexico and Peru markets are characterized by what we believe is a significant imbalance between supply and demand. The demand for higher education is large and growing and is fueled by several demographic and economic factors, including a growing middle class, global growth in services and technology-related industries and recognition of the significant personal and economic benefits gained by graduates of higher education institutions. The target demographics are primarily 18- to 24-year-olds in both countries in which we compete. We compete with other private higher education institutions on the basis of price, educational quality, reputation and location. We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our network. There are a number of private and

public institutions in both countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future. We expect competition to increase as the Mexican and Peruvian markets mature. Essentially all of our revenues were generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru. Specifics related to both of our reportable segments are discussed below.

In Mexico, the private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities. Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 35 campuses. Students in our Mexican institutions typically finance their own education.

In Peru, private universities are increasingly providing the capacity to meet growing demand in the higher-education market. Laureate owns three institutions in Peru, with a footprint of 19 campuses.

Inter-segment transactions are accounted for in a similar manner as third-party transactions and are eliminated in consolidation. The Corporate amounts presented in the following tables include corporate charges that were not allocated to our reportable segments and adjustments to eliminate inter-segment items.

We evaluate segment performance based on Adjusted EBITDA, which is a non-GAAP performance measure defined as Income from continuing operations before income taxes and equity in net income of affiliates, adding back the following items: Gain on disposal of subsidiaries, net, Foreign currency exchange loss, net, Other income, net, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, Share-based compensation expense and expenses related to our Excellence-in-Process (EiP) initiative. Our EiP initiative was completed as of December 31, 2021, except for certain EiP expenses related to the completion of programs that began in prior periods. EiP was an enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs), as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also included other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs that were incurred in connection with previous dispositions.

Adjusted EBITDA is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, Adjusted EBITDA is a key financial measure used by the compensation committee of our Board of Directors and our Chief Executive Officer in connection with the payment of incentive compensation to our executive officers and other members of our management team. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. We use total assets as the measure of assets for reportable segments.

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


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues
Mexico	$	185,388	$	147,782	$	559,487	$	434,991
Peru	176,177		152,547		515,406		457,104
Corporate	(32)		670		(38)		3,848
Total Revenues	$	361,533	$	300,999	$	1,074,855	$	895,943
Adjusted EBITDA of reportable segments
Mexico	$	21,925	$	23,442	$	109,068	$	79,848
Peru	66,349		61,223		207,062		201,363
Total Adjusted EBITDA of reportable segments	88,274		84,665		316,130		281,211
Reconciling items:
Corporate	(9,853)		(11,861)		(28,833)		(37,155)
Depreciation and amortization expense	(17,918)		(14,470)		(51,956)		(43,628)
Loss on impairment of assets	—		—		(1,620)		(144)
Share-based compensation expense	(1,794)		(1,849)		(4,894)		(6,971)
EiP expenses	—		(168)		—		(1,321)
Operating income	58,709		56,317		228,827		191,992
Interest income	2,830		1,970		6,939		5,623
Interest expense	(5,169)		(3,694)		(17,258)		(11,589)


Other income, net	66		1,393		198		413
Foreign currency gain (loss), net	9,755		15,146		(51,554)		(2,906)
Gain on disposal of subsidiaries, net	3,260		—		3,567		1,461
Income from continuing operations before income taxes and equity in net income of affiliates	$	69,451	$	71,132	$	170,719	$	184,994


	September 30, 2023		December 31, 2022
Assets
Mexico	$	1,333,563	$	1,220,630
Peru	581,619		536,141
Corporate	182,092		215,466
Total assets	$	2,097,274	$	1,972,237

Note 5. Goodwill

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


	Mexico		Peru		Total
Balance at December 31, 2022	$	512,990	$	70,503	$	583,493




Currency translation adjustments	56,207		658		56,865

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

Note 6. Debt

Outstanding long-term debt was as follows:


	September 30, 2023		December 31, 2022
Senior long-term debt:
Senior Secured Credit Facility (stated maturity date of September 18, 2028 as of September 30, 2023; stated maturity date of October 7, 2024 as of December 31, 2022)	$	28,000	$	100,000

Other debt:
Lines of credit	—		13,778
Notes payable and other debt	49,078		72,209
Total senior and other debt	77,078		185,987
Finance lease obligations and sale-leaseback financings	57,583		48,186
Total long-term debt and finance leases	134,661		234,173
Less: total unamortized deferred financing costs	2,549		2,060
Less: current portion of long-term debt and finance leases	49,053		56,184
Long-term debt and finance leases, less current portion	$	83,059	$	175,929

Senior Secured Credit Facility

On September 18, 2023, the Company entered into an amendment of its Senior Secured Credit Facility (as defined below) (the “Third Amendment”) to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement” as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022 and, as further amended by the Third Amendment, the “Amended Credit Agreement”). Among other things, the Company incurred a new tranche of revolving credit loans maturing September 2028 (the “Series 2028 Tranche”). The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.”

The Amended Credit Agreement, among other things, provides for $145,000 of revolving credit loans maturing October 2024 (the “Series 2024 Tranche”) and $155,000 of revolving credit loans under the Series 2028 Tranche for a $300,000 aggregate revolving credit facility (the “Revolving Credit Facility”). As a subfacility under the Revolving Credit Facility, the Amended Credit Agreement provides for letter of credit commitments in the aggregate amount of $10,000. The Amended Credit Agreement also provides, subject to the satisfaction of certain conditions, for incremental revolving and term loan facilities, at the request of the Company, not to exceed (i) the greater of (a) $172,500 and (b) 50% of the Company’s Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, as defined in the agreement, on a pro forma basis, does not exceed 2.25 to 1.00, plus (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

The maturity date for the Amended Credit Agreement is September 18, 2028. The Revolving Credit Facility bears interest at a per annum interest rate, at the option of the Company, at either the EURIBOR rate, the Term SOFR rate or the ABR rate plus an applicable margin of 2.50% per annum, 2.25% per annum, 2.00% per annum or 1.75% per annum for EURIBOR loans or Term SOFR loans, and 1.50% per annum, 1.25% per annum, 1.00% per annum or 0.75% per annum for ABR loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio as defined in the agreement.

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

Estimated Fair Value of Debt

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

Certain Covenants

As of September 30, 2023, our Amended Credit Agreement contained certain negative covenants including, among others: (1) limitations on additional indebtedness; (2) limitations on dividends; (3) limitations on asset sales, including the sale of ownership interests in subsidiaries and sale-leaseback transactions; and (4) limitations on liens, guarantees, loans or investments. The Amended Credit Agreement also provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, to exceed 3.00x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter. The agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, is not greater than 3.00x as of such date and (ii) less than 25% of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply. As of September 30, 2023, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant. In addition, indebtedness at some of our locations contain financial maintenance covenants. We were in compliance with these covenants as of September 30, 2023.

Note 7. Leases

Laureate conducts a significant portion of its operations at leased facilities, including many of Laureate's higher education facilities and other office locations. In accordance with ASC Topic 842, “Leases,” Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease.

Finance Leases

Our finance lease agreements are for property and equipment. The lease assets are included within buildings as well as furniture, equipment and software, and the related lease liability is included within debt and finance leases on the Consolidated Balance Sheets.

Operating Leases

Our operating lease agreements are primarily for real estate space and are included within operating lease right-of-use (ROU) assets and operating lease liabilities on the Consolidated Balance Sheets. The terms of our operating leases vary and generally contain renewal options. Certain of these operating leases provide for increasing rent over the term of the lease. Laureate also leases certain equipment under noncancellable operating leases, which are typically for terms of 60 months or less.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Our variable lease payments consist of non-lease services related to the lease. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. On occasion, Laureate has entered into sublease agreements for certain leased office space; however, the sublease income from these agreements is immaterial.

Note 8. Commitments and Contingencies

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.

Income Tax Contingencies

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

Non-Income Tax Loss Contingencies

Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities. Laureate intends to vigorously defend against these matters. As of September 30, 2023 and December 31, 2022, approximately $15,800 and $11,400, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

We have also identified certain loss contingencies that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies could be up to approximately $17,800 if the outcomes were unfavorable.

Guarantees

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

During the first quarter of 2021, one of our Peruvian institutions issued a bank guarantee in order to appeal a preliminary tax assessment received related to tax audits of 2014 and 2015. As of September 30, 2023 and December 31, 2022, the amount of the guarantee was $7,141 and $7,076, respectively.

Note 9. Stockholders’ Equity

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


	Laureate Education, Inc. Stockholders
	Common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock at cost		Non-controlling interests		Total stockholders’ equity
	Shares	Amount
Balance at December 31, 2022	157,013	$	923	$	2,204,755	$	39,244	$	(442,424)	$	(1,026,272)	$	(1,869)	$	774,357


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

Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	161	1		(448)		—		—		—		—		(447)
Equitable adjustments to stock-based awards	—	—		(13)		—		—		—		—		(13)
Change in noncontrolling interests	—	—		16		—		—		—		(140)		(124)



Net loss	—	—		—		(26,607)		—		—		(155)		(26,762)
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		72,791		—		6		72,797


Balance at March 31, 2023	157,174	$	924	$	2,205,434	$	12,637	$	(369,633)	$	(1,026,272)	$	(2,158)	$	820,932
Non-cash share-based compensation	—	—		1,976		—		—		—		—		1,976
Retirement of treasury stock	—	(295)		(1,025,977)		—		—		1,026,272		—		—
Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	46	—		44		—		—		—		—		44
Equitable adjustments to stock-based awards	—	—		24		—		—		—		—		24




Net income	—	—		—		56,177		—		—		136		56,313
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		92,007		—		(92)		91,915


Balance at June 30, 2023	157,220	$	629	$	1,181,501	$	68,814	$	(277,626)	$	—	$	(2,114)	$	971,204
Non-cash share-based compensation	—	—		1,794		—		—		—		—		1,794

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

Equitable adjustments to stock-based awards	—	—		2		—		—		—		—		2
Net income	—	—		—		36,158		—		—		(177)		35,981

Foreign currency translation adjustment, net of tax of $0	—	—		—		—		(46,373)		—		2		(46,371)


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

Retirement of Treasury Stock

On May 24, 2023, the Company’s Board of Directors approved the retirement of all outstanding shares of treasury stock, which totaled 73,766 shares. The Company recorded the purchases of treasury stock at cost as a separate component within stockholders’ equity in the Consolidated Balance Sheets. Upon retirement of treasury stock, the Company allocates the excess of the purchase price over par value to additional paid-in capital, subject to certain limitations.

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


	Laureate Education, Inc. Stockholders
	Common stock			Additional paid-in capital		Retained earnings (accumulated deficit)		Accumulated other comprehensive loss		Treasury stock at cost		Non-controlling interests		Total stockholders’ equity
	Shares	Amount
Balance at December 31, 2021	180,611	$	915	$	2,388,783	$	15,523	$	(520,204)	$	(744,174)	$	(1,285)	$	1,139,558


Non-cash share-based compensation	—	—		2,762		—		—		—		—		2,762
Purchase of treasury stock at cost	(9,485)	—		—		—		—		(112,874)		—		(112,874)
Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	1,379	6		10,716		—		—		—		—		10,722
Equitable adjustments to stock-based awards	—	—		(189)		—		—		—		—		(189)




Net loss	—	—		—		(44,211)		—		—		(469)		(44,680)
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		49,573		—		2		49,575

Minimum pension liability adjustment, net of tax of $0	—	—		—		—		14		—		—		14
Balance at March 31, 2022	172,505	$	921	$	2,402,072	$	(28,688)	$	(470,617)	$	(857,048)	$	(1,752)	$	1,044,888
Non-cash share-based compensation	—	—		2,360		—		—		—		—		2,360
Purchase of treasury stock at cost	(8,013)	—		—		—		—		(93,362)		—		(93,362)
Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	171	1		(472)		—		—		—		—		(471)
Equitable adjustments to stock-based awards	—	—		(35)		—		—		—		—		(35)
Change in noncontrolling interests	—	—		2		—		—		—		(2)		—
Reclassification of redeemable equity to non-redeemable equity	—	—		316		—		—		—		—		316


Net income	—	—		—		43,423		—		—		136		43,559
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		17,969		—		3		17,972


Balance at June 30, 2022	164,663	$	922	$	2,404,243	$	14,735	$	(452,648)	$	(950,410)	$	(1,615)	$	1,015,227
Non-cash share-based compensation	—	—		1,849		—		—		—		—		1,849
Purchase of treasury stock at cost	(77)	—		—		—		—		(862)		—		(862)
Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	63	—		199		—		—		—		—		199
Special cash distribution accrued on outstanding common stock	—	—		(136,642)		—		—		—		—		(136,642)
Equitable adjustments to stock-based awards	—	—		(770)		—		—		—		—		(770)

Net income	—	—		—		31,117		—		—		(81)		31,036
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		(42,160)		—		(1)		(42,161)
Minimum pension liability adjustment, net of tax of $0	—	—		—		—		983		—		—		983
Balance at September 30, 2022	164,649	$	922	$	2,268,879	$	45,852	$	(493,825)	$	(951,272)	$	(1,697)	$	868,859

2022 Special Cash Distribution

As previously disclosed in the 2022 Form 10-K, on September 14, 2022, the Company announced that its Board approved, pursuant to the previously announced adoption of a Partial Liquidation Plan related to the distribution of net proceeds from the Company’s sale of Walden e-Learning LLC (the Walden Sale), the payment of a special cash distribution (the October 2022 Distribution) equal to $0.83 per each share of the Company’s common stock, par value $0.004 per share, to each holder of record on September 28, 2022. The proceeds that were distributed were attributable to the release during the third quarter of 2022 of $71,700 of escrowed funds from the Walden Sale, plus remaining net proceeds that had yet to be distributed. On October 12, 2022, the Company paid approximately $136,600 related to the October 2022 Distribution, which was the final distribution pursuant to the Partial Liquidation Plan.

Share-based Compensation Expense

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

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) (AOCI) in our Consolidated Balance Sheets includes the accumulated translation adjustments arising from translation of foreign subsidiaries’ financial statements, the unrealized gain on a derivative designated as an effective net investment hedge, and the accumulated net gains or losses that are not recognized as components of net periodic benefit cost for our minimum pension liability. The AOCI related to the net investment hedge will be deferred from earnings until the sale or liquidation of the hedged investee. The components of these balances were as follows:


	September 30, 2023						December 31, 2022
	Laureate Education, Inc.		Noncontrolling Interests		Total		Laureate Education, Inc.		Noncontrolling Interests		Total
Foreign currency translation adjustment	$	(333,827)	$	875	$	(332,952)	$	(452,252)	$	959	$	(451,293)
Unrealized gain on derivatives	10,416		—		10,416		10,416		—		10,416
Minimum pension liability adjustment	(588)		—		(588)		(588)		—		(588)
Accumulated other comprehensive loss	$	(323,999)	$	875	$	(323,124)	$	(442,424)	$	959	$	(441,465)

Note 10. Income Taxes

Laureate's income tax provisions for all periods consist of federal, state and foreign income taxes. The tax provisions for the nine months ended September 30, 2023 and 2022 are based on estimated full-year effective tax rates, adjusted for discrete income tax items related specifically to the interim periods. Laureate has operations in multiple countries at various statutory tax rates and other operations that are loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss.

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

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

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

Note 11. Earnings (Loss) Per Share

Laureate computes basic earnings per share (EPS) by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that would occur if share-based compensation awards were exercised or converted into common stock. To calculate the diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock units, and any other share-based compensation arrangements determined using the treasury stock method.

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


For the three months ended September 30,	2023		2022
Numerator used in basic and diluted earnings (loss) per common share for continuing operations:
Income from continuing operations	$	35,735	$	31,852
Loss attributable to noncontrolling interests	177		81








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




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



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

Denominator used in basic and diluted earnings per common share:
Basic weighted average shares outstanding	157,268		164,645

Dilutive effect of stock options	226		221
Dilutive effect of restricted stock units	310		149
Diluted weighted average shares outstanding	157,804		165,015

Basic and diluted earnings per share:




Income from continuing operations	$	0.23	$	0.19
Income (loss) from discontinued operations	—		—
Basic and diluted earnings per share	$	0.23	$	0.19


For the nine months ended September 30,	2023		2022
Numerator used in basic and diluted earnings (loss) per common share for continuing operations:
Income from continuing operations	$	69,337	$	25,851
Loss attributable to noncontrolling interests	196		414








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




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



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

Denominator used in basic and diluted earnings (loss) per common share:
Basic weighted average shares outstanding	157,217		169,885
Dilutive effect of stock options	219		302
Dilutive effect of restricted stock units	234		173
Diluted weighted average shares outstanding	157,670		170,360





Basic and diluted earnings per share:
Income from continuing operations	$	0.44	$	0.15
(Loss) income from discontinued operations	(0.02)		0.02
Basic and diluted earnings per share	$	0.42	$	0.17

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


	For the three months ended September 30,		For the nine months ended September 30,
	2023	2022	2023	2022
Stock options	—	14	—	54
Restricted stock units	—	284	12	239

Note 12. Legal and Regulatory Matters

Laureate is subject to legal proceedings arising in the ordinary course of business. In management’s opinion, we have adequate legal defenses, insurance coverage, and/or accrued liabilities with respect to the eventuality of these actions. Management believes that any settlement would not have a material impact on Laureate’s financial position, results of operations, or cash 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 2022 Form 10-K.

Peru Regulation

Superintendencia Nacional de Educación Superior Universitaria (“SUNEDU”), the regulatory agency that supervises university standards and quality in Peru, is currently reviewing all regulations applicable to universities, with new regulations expected to be announced at a future time. This follows the appointment of new members to the board of SUNEDU in the first quarter of 2023 in connection with the implementation of the July 2022 law that modified SUNEDU’s board representation and authority.

On March 30, 2023, Cibertec, the Company’s technical-vocational institute, was granted a higher education colleges license for a six-year period. This license will now allow Cibertec to offer four-year programs for professional bachelor degrees.

Note 13. Supplemental Cash Flow Information

Reconciliation of Cash and cash equivalents and Restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the September 30, 2022 balance. The September 30, 2023 and September 30, 2022 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022:


	September 30, 2023		September 30, 2022		December 31, 2022
Cash and cash equivalents	$	130,862	$	319,039	$	85,167
Restricted cash	7,587		17,448		8,617
Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows	$	138,449	$	336,487	$	93,784

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

Note 14. Subsequent Events

Special Cash Dividend

On October 30, 2023, the Board of Directors of the Company approved the payment of a special cash dividend (the 2023 Special Dividend) equal to $0.70 per each share of the Company’s common stock, par value $0.004 per share, to each holder of record on November 15, 2023. The Special Dividend is scheduled to be paid on November 30, 2023. Based on the current number of shares outstanding, the aggregate amount of the 2023 Special Dividend is expected to be approximately $110,000.

In connection with the 2023 Special Dividend, the Board of Directors approved certain required adjustments under the Company’s equity award compensation plans. Subject to the payment of the 2023 Special Dividend, the exercise price of the Company’s options will be reduced by $0.70 per share, and holders of restricted and performance stock units will receive an amount in cash equal to $0.70 per unvested stock unit held payable when such unit vests. If all outstanding stock units vest, the aggregate amount to be paid in respect of the units will be approximately $700.

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 our current growth strategy and other future plans, strategies or transactions that may be identified, explored or implemented and any litigation or dispute resulting from any completed transaction are forward-looking statements. In addition, we, through our senior management, from time to time make forward‑looking public statements concerning our expected future operations and performance and other developments. All of these forward‑looking statements are subject to risks and uncertainties that may change at any time, including with respect to our current growth strategy and the impact of any completed 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 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 and risk factor 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, 2022 (the 2022 Form 10-K). Some of the factors that we believe could affect our results include:

•the risks associated with operating our portfolio of degree-granting higher education institutions in Mexico and Peru, including complex business, 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 effectively manage the growth of our business and increase our operating leverage;

•the risks associated with maintaining the value of our brands and our reputation;

•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 markets 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 of greater than anticipated tax liabilities;

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

•the fluctuations in revenues due to seasonality;

•the risks associated with disruptions to our computer networks and other cybersecurity incidents, including misappropriation of personal or proprietary information;

•the risks and uncertainties associated with an epidemic, pandemic or other public health emergency, such as the global coronavirus (COVID-19) pandemic, including, but not limited to, effects on student enrollment, tuition pricing, and collections in future periods;

•the risks associated with protests, strikes or natural or other disasters;

•our ability to attract and retain key personnel;

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

•the risks associated with indebtedness and disruptions to credit and equity markets;

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

•the future trading prices of our common stock and the impact of any securities analysts’ reports on these 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 Form 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 operate a portfolio of degree-granting higher education institutions in Mexico and Peru. Collectively, we have approximately 458,700 students enrolled at five institutions in these two countries. We believe that the higher education 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 in those markets. We believe that the combination of the projected growth in the middle class, limited government resources dedicated to higher education, 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. By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy. We have two reportable segments as described below. We group our institutions by geography in Mexico and Peru for reporting purposes.

Assets Held for Sale

As discussed in Note 3, Assets Held for Sale, of our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, the Company has undertaken a process to sell two of our subsidiaries in Mexico that operate K-12 educational programs. As such, these subsidiaries are classified as assets held for sale as of September 30, 2023. The planned sale does not represent a strategic shift and therefore does not qualify for presentation as a discontinued operation in the consolidated financial statements. The completion of the sale is not expected to have a material effect on our financial results.

Our Segments

•Private education providers in Mexico constitute approximately 36% of the total higher-education market. The private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities. Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 35 campuses. Students in our Mexican institutions typically finance their own education.

•In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 73% of the total higher-education market. Laureate owns three institutions in Peru, with a footprint of 19 campuses.

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 provides financial, human resource, information technology, insurance, legal, and tax compliance services. The Corporate segment also contains the eliminations of inter-segment revenues and expenses.

The following information for our reportable segments is presented as of September 30, 2023:


	Institutions	Enrollment	2023 YTD Revenues ($ in millions)		% Contribution to 2023 YTD Revenues
Mexico	2	248,500	$	559.5	52	%
Peru	3	210,200	515.4		48	%
Total	5	458,700	$	1,074.9	100	%

Challenges

Our operations are outside of the United States and are subject to complex business, economic, legal, regulatory, political, tax and foreign currency risks, which may be difficult to adequately address. 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 both 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 Business—We operate a portfolio of degree-granting higher education institutions in 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 2022 Form 10-K. We plan to grow our operations organically by: 1) adding new programs and course offerings, including online and hybrid 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 also “Item 1A—Risk Factors—Risks Relating to Our 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,” and “Item 1—Business—Industry Regulation” in our 2022 Form 10-K for a detailed discussion of our different regulatory environments.

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. Each institution has a “Primary Intake” period during each academic year in which the majority of the enrollment occurs. Each institution also has a smaller “Secondary Intake” period. Our Peruvian institutions have their Primary Intake during the first calendar quarter and a Secondary Intake during the third calendar quarter. Institutions in our Mexico segment have their Primary Intake during the third calendar quarter and a Secondary Intake during the first calendar quarter. Our institutions in Peru are generally out of session in January, February and July, while institutions in Mexico are generally out of session in May through July. Revenues are recognized when classes are in 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 and other discounts, refunds and waivers. In addition to tuition revenues, we generate other revenues from student fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. 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.

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

Foreign Exchange

While the USD is our reporting currency, our institutions are located in Mexico and Peru and operate in other functional currencies, namely the Mexican peso and Peruvian nuevo sol. 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 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 Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates” in our 2022 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 other items, as described in the segments’ results.

Seasonality

Our institutions 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 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 that could change the academic calendar at our institutions. See “Item 1A—Risk Factors—Risks Relating to Our Business—We experience seasonal fluctuations in our results of operations” in our 2022 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 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 Business—We may have exposure to greater-than-anticipated tax liabilities” in our 2022 Form 10-K.

The Organization for Economic Co-operation and Development (OECD) has proposed changes to numerous long-standing tax principles. These proposals, if finalized and adopted by its member countries, will likely increase tax uncertainty, and may adversely affect our provision for income taxes. The Company will continue to monitor regulatory developments to assess potential impacts to the Company.

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.

Comparison of Consolidated Results for the Three Months Ended September 30, 2023 and 2022


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Revenues	$	361.5	$	301.0	20	%
Direct costs	291.1		229.4		(27)	%
General and administrative expenses	11.8		15.3		23	%

Operating income	58.7		56.3		4	%
Interest expense, net of interest income	(2.4)		(1.7)		(41)	%
Other non-operating income	13.2		16.5		(20)	%
Income from continuing operations before income taxes	69.5		71.1		(2)	%
Income tax expense	(33.7)		(39.3)		14	%

Income from continuing operations	35.7		31.9		12	%
Income (loss) from discontinued operations, net of tax	0.2		(0.8)		125	%
Net income	36.0		31.0		16	%
Net loss attributable to noncontrolling interests	0.2		0.1		(100)	%
Net income attributable to Laureate Education, Inc.	$	36.2	$	31.1	16	%

Comparison of Consolidated Results for the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022

Revenues increased by $60.5 million to $361.5 million for the three months ended September 30, 2023 (the 2023 fiscal quarter) from $301.0 million for the three months ended September 30, 2022 (the 2022 fiscal quarter). This increase in revenues was attributable to: (1) the effect of a net change in foreign currency exchange rates, which increased revenues by $37.8 million, mainly due to the strengthening of the Mexican peso against the USD compared to the 2022 fiscal quarter; (2) higher average total organic enrollment at our institutions during the 2023 fiscal quarter, which increased revenues by $16.0 million compared to the 2022 fiscal quarter; and (3) the effect of changes in tuition rates and enrollments in programs at varying price points (product mix), pricing and timing, which increased revenues by $7.4 million compared to the 2022 fiscal quarter. These increases in revenues were partially offset by other Corporate changes, which accounted for a decrease in revenues of $0.7 million.

Direct costs and general and administrative expenses combined increased by $58.2 million to $302.9 million for the 2023 fiscal quarter from $244.7 million for the 2022 fiscal quarter. The increase in direct costs was primarily driven by the effect of a net change in foreign currency exchange rates, which increased costs by $33.0 million, mainly due to the strengthening of the Mexican peso against the USD compared to the 2022 fiscal quarter. In addition, the effect of operational changes increased costs by $27.9 million, primarily due to the result of higher enrollment at our institutions. These increases in direct costs were partially offset by a decrease of $2.7 million in Corporate expenses.

Operating income increased by $2.4 million to $58.7 million for the 2023 fiscal quarter from $56.3 million for the 2022 fiscal quarter. The increase in operating income was mainly driven by higher operating income at our Peru segment, combined with lower operating costs at Corporate, partially offset by lower operating income at our Mexico segment that was partly due to lease exit costs.

Interest expense, net of interest income increased by $0.7 million to $2.4 million for the 2023 fiscal quarter from $1.7 million for the 2022 fiscal quarter. The increase in interest expense was primarily attributable to higher average debt balances compared to the 2022 fiscal quarter.

Other non-operating income decreased by $3.3 million to $13.2 million for the 2023 fiscal quarter from $16.5 million for the 2022 fiscal quarter. This decrease was primarily attributable to a lower gain on foreign currency exchange of $5.3 million compared to the 2022 fiscal quarter, mainly related to intercompany loan arrangements. In addition, other income was lower by $1.3 million compared to the 2022 fiscal quarter. These decreases in other non-operating income were partially offset by a gain on disposal of subsidiaries of $3.3 million during the 2023 fiscal quarter, which was primarily attributable to the release of accumulated foreign currency translation gain upon the liquidation of a subsidiary.

Income tax expense decreased by $5.6 million to $33.7 million for the 2023 fiscal quarter from $39.3 million for the 2022 fiscal quarter. This decrease was primarily attributable to changes in the jurisdictional mix of earnings.

Summary Comparison of Consolidated Results

Comparison of Consolidated Results for the Nine Months Ended September 30, 2023 and 2022


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Revenues	$	1,074.9	$	895.9	20	%
Direct costs	810.4		655.1		(24)	%
General and administrative expenses	34.0		48.8		30	%
Loss on impairment of assets	1.6		0.1		nm
Operating income	228.8		192.0		19	%
Interest expense, net of interest income	(10.3)		(6.0)		(72)	%
Other non-operating expense	(47.8)		(1.0)		nm
Income from continuing operations before income taxes and equity in net income of affiliates	170.7		185.0		(8)	%
Income tax expense	(101.4)		(159.2)		36	%
Equity in net income of affiliates, net of tax	—		0.1		(100)	%
Income from continuing operations	69.3		25.9		168	%
(Loss) income from discontinued operations, net of tax	(3.8)		4.1		(193)	%
Net income	65.5		29.9		119	%
Net loss attributable to noncontrolling interests	0.2		0.4		50	%
Net income attributable to Laureate Education, Inc.	$	65.7	$	30.3	117	%

nm - percentage changes not meaningful

Comparison of Consolidated Results for the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

Revenues increased by $179.0 million to $1,074.9 million for the nine months ended September 30, 2023 (the 2023 fiscal period) from $895.9 million for the nine months ended September 30, 2022 (the 2022 fiscal period). This increase was attributable to: (1) the effect of a net change in foreign currency exchange rates, which increased revenues by $79.3 million, mostly driven by the strengthening of the Mexican peso against the USD compared to the 2022 fiscal period; (2) higher average total organic enrollment at our institutions, which increased revenues by $62.8 million compared to the 2022 fiscal period; and (3) the effect of product mix, pricing and timing, which increased revenues by $40.7 million for the 2023 fiscal period. These increases in revenues were partially offset by other Corporate changes, which accounted for a decrease in revenues of $3.8 million.

Direct costs and general and administrative expenses combined increased by $140.5 million to $844.4 million for the 2023 fiscal period from $703.9 million for the 2022 fiscal period. The effect of operational changes, mostly attributable to the effect of higher enrollments at our institutions as well as return-to-campus expenses, increased direct costs by $87.8 million compared to the 2022 fiscal period. Additionally, the effect of a net change in foreign currency exchange rates increased costs by $64.9 million compared to the 2022 fiscal period. These increases in direct costs were partially offset by other Corporate expenses, which accounted for a decrease in costs of $12.2 million in the 2023 fiscal period.

Operating income increased by $36.8 million to $228.8 million for the 2023 fiscal period from $192.0 million for the 2022 fiscal period. This increase was primarily a result of higher operating income at both our Mexico and Peru segments, combined with lower operating costs at Corporate, as compared to the 2022 fiscal period.

Interest expense, net of interest income increased by $4.3 million to $10.3 million for the 2023 fiscal period from $6.0 million for the 2022 fiscal period. The increase in interest expense was primarily attributable to higher average debt balances compared to the 2022 fiscal period.

Other non-operating expense increased by $46.8 million to $47.8 million for the 2023 fiscal period from $1.0 million for the 2022 fiscal period. This increase was attributable to a higher loss on foreign currency exchange of $48.7 million compared to the 2022 fiscal period, mainly related to intercompany loan arrangements. Additionally, other income was lower by $0.2 million compared to the 2022 fiscal period. These increases in other non-operating expense were partially offset by higher gain on disposal of subsidiaries of $2.1 million, primarily attributable to the release of accumulated foreign currency translation gains upon the liquidation of certain subsidiaries.

Income tax expense decreased by $57.8 million to $101.4 million for the 2023 fiscal period from $159.2 million for the 2022 fiscal period. This decrease was primarily attributable to a discrete tax expense recorded during the 2022 fiscal period of approximately $32.5 million for income tax reserves related to the application of the high-tax exception to global intangible low-taxed income. The remaining difference was primarily attributable to the change in the jurisdictional mix of earnings.

(Loss) income from discontinued operations, net of tax changed by $7.9 million to a loss of $(3.8) million for the 2023 fiscal period from income of $4.1 million for the 2022 fiscal period. This change was primarily attributable to changes in estimates during the 2023 fiscal period regarding the realizability of certain receivables from previous divestitures, combined with the year-over-year impact of a gain recognized during the 2022 fiscal period upon completion of the transfer of certain leases related to our former operations in Chile.

Non-GAAP Financial Measure

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense and interest income, plus depreciation and amortization, share-based compensation expense, loss on impairment of assets and expenses related to our Excellence-in-Process (EiP) initiative. 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.

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the three months ended September 30, 2023 and 2022:


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Net income	$	36.0	$	31.0	16	%
Plus:
(Income) loss from discontinued operations, net of tax	(0.2)		0.8		125	%
Income from continuing operations	35.7		31.9		12	%
Plus:

Income tax expense	33.7		39.3		14	%
Income from continuing operations before income taxes	69.5		71.1		(2)	%
Plus:
Gain on disposal of subsidiaries, net	(3.3)		—		nm
Foreign currency exchange gain, net	(9.8)		(15.1)		(35)	%
Other income, net	(0.1)		(1.4)		(93)	%


Interest expense	5.2		3.7		(41)	%
Interest income	(2.8)		(2.0)		40	%
Operating income	58.7		56.3		4	%
Plus:
Depreciation and amortization	17.9		14.5		(23)	%
EBITDA	76.6		70.8		8	%
Plus:
Share-based compensation expense (a)	1.8		1.8		—	%

EiP implementation expenses (b)	—		0.2		100	%
Adjusted EBITDA	$	78.4	$	72.8	8	%

nm - percentage changes not meaningful

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

(b) 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), as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also included other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs that were incurred in connection with previous dispositions. The EiP initiative was completed as of December 31, 2021, except for certain EiP expenses related to the run out of programs that began in prior periods.

Comparison of Depreciation and Amortization for the Three Months Ended September 30, 2023 and 2022

Depreciation and amortization increased by $3.4 million to $17.9 million for the 2023 fiscal quarter from $14.5 million for the 2022 fiscal quarter. The effects of foreign currency exchange increased depreciation and amortization expense by $2.1 million for the 2023 fiscal quarter. Other items increased depreciation and amortization by $1.3 million.

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the nine months ended September 30, 2023 and 2022:


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Net income	$	65.5	$	29.9	119	%
Plus:
Loss (income) from discontinued operations, net of tax	3.8		(4.1)		(193)	%
Income from continuing operations	69.3		25.9		168	%
Plus:
Equity in net income of affiliates, net of tax	—		(0.1)		(100)	%
Income tax expense	101.4		159.2		36	%
Income from continuing operations before income taxes and equity in net income of affiliates	170.7		185.0		(8)	%
Plus:
Gain on disposal of subsidiaries, net	(3.6)		(1.5)		140	%
Foreign currency exchange loss, net	51.6		2.9		nm
Other income, net	(0.2)		(0.4)		(50)	%


Interest expense	17.3		11.6		(49)	%
Interest income	(6.9)		(5.6)		23	%
Operating income	228.8		192.0		19	%
Plus:
Depreciation and amortization	52.0		43.6		(19)	%
EBITDA	280.8		235.6		19	%
Plus:
Share-based compensation expense (a)	4.9		7.0		30	%
Loss on impairment of assets (b)	1.6		0.1		nm
EiP implementation expenses (c)	—		1.3		100	%
Adjusted EBITDA	$	287.3	$	244.1	18	%

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.

(c) EiP implementation expenses were 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), as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also included other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs that were incurred in connection with previous dispositions. The EiP initiative was completed as of December 31, 2021, except for certain EiP expenses related to the run out of programs that began in prior periods.

Comparison of Depreciation and Amortization, and Share-based Compensation Expense for the Nine Months Ended September 30, 2023 and 2022

Depreciation and amortization increased by $8.4 million to $52.0 million for the 2023 fiscal period from $43.6 million for the 2022 fiscal period. The effects of foreign currency exchange increased depreciation and amortization expense by $4.0 million for the 2023 fiscal period. Other items increased depreciation and amortization by $4.4 million.

Share-based compensation expense decreased by $2.1 million to $4.9 million for the 2023 fiscal period from $7.0 million for the 2022 fiscal period. The decrease is primarily related to accelerated vesting of unvested equity awards that occurred during the 2022 fiscal period for employees terminated in connection with the now-completed strategic review process.

Segment Results

We have two reportable segments: Mexico and Peru, as discussed in 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.

The following tables, 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 September 30,	2023		2022		2023 vs. 2022
Revenues:
Mexico	$	185.4	$	147.8	25	%
Peru	176.2		152.5		16	%
Corporate	—		0.7		(100)	%
Consolidated Total Revenues	$	361.5	$	301.0	20	%

Adjusted EBITDA:
Mexico	$	21.9	$	23.4	(6)	%
Peru	66.3		61.2		8	%
Corporate	(9.9)		(11.9)		17	%
Consolidated Total Adjusted EBITDA	$	78.4	$	72.8	8	%


(in millions)					% Change
					Better/(Worse)
For the nine months ended September 30,	2023		2022		2023 vs. 2022
Revenues:
Mexico	$	559.5	$	435.0	29	%
Peru	515.4		457.1		13	%
Corporate	—		3.8		(100)	%
Consolidated Total Revenues	$	1,074.9	$	895.9	20	%

Adjusted EBITDA:
Mexico	$	109.1	$	79.8	37	%
Peru	207.1		201.4		3	%
Corporate	(28.8)		(37.2)		23	%
Consolidated Total Adjusted EBITDA	$	287.3	$	244.1	18	%

Mexico

Financial Overview

Comparison of Mexico Results for the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022


(in millions)	Revenues		Direct Costs		Adjusted EBITDA
September 30, 2022	$	147.8	$	124.4	$	23.4
Organic enrollment (1)	11.1
Product mix, pricing and timing (1)	(2.3)
Organic constant currency	8.8		14.2		(5.4)
Foreign exchange	28.8		25.2		3.6


Other (2)	—		(0.3)		0.3
September 30, 2023	$	185.4	$	163.5	$	21.9

(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 increased by $37.6 million, a 25% increase from the 2022 fiscal quarter.

•Organic enrollment increased during the fiscal quarter by 9%, increasing revenues by $11.1 million.

•Revenues from our Mexico segment represented 51% of our consolidated total revenues for the 2023 fiscal quarter, compared to 49% for the 2022 fiscal quarter.

Adjusted EBITDA decreased by $1.5 million, a 6% decrease from the 2022 fiscal quarter, partly due to lease exit costs.

Comparison of Mexico Results for the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022


(in millions)	Revenues		Direct Costs		Adjusted EBITDA
September 30, 2022	$	435.0	$	355.2	$	79.8
Organic enrollment (1)	40.0
Product mix, pricing and timing (1)	16.5
Organic constant currency	56.5		41.4		15.1
Foreign exchange	68.0		54.2		13.8


Other (2)	—		(0.4)		0.4
September 30, 2023	$	559.5	$	450.4	$	109.1

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

Revenues increased by $124.5 million, a 29% increase from the 2022 fiscal period.

•Organic enrollment increased during the 2023 fiscal period by 10%, increasing revenues by $40.0 million.

•Revenues from our Mexico segment represented 52% of our consolidated total revenues for the 2023 fiscal period, compared to 49% for the 2022 fiscal period.

Adjusted EBITDA increased by $29.3 million, a 37% increase from the 2022 fiscal period, mainly driven by higher revenues, partially offset by higher costs associated with return-to-campus expenses.

Peru

Financial Overview

Comparison of Peru Results for the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022


(in millions)	Revenues		Direct Costs		Adjusted EBITDA
September 30, 2022	$	152.5	$	91.3	$	61.2
Organic enrollment (1)	4.9
Product mix, pricing and timing (1)	9.8
Organic constant currency	14.7		12.9		1.8
Foreign exchange	9.0		5.7		3.3



September 30, 2023	$	176.2	$	109.9	$	66.3

Revenues increased by $23.7 million, a 16% increase from the 2022 fiscal quarter.

•Organic enrollment increased during the 2023 fiscal quarter by 5%, increasing revenues by $4.9 million.

•Revenues from our Peru segment represented 49% of our consolidated total revenues for the 2023 fiscal quarter, compared to 51% for the 2022 fiscal quarter.

Adjusted EBITDA increased by $5.1 million, an 8% increase from the 2022 fiscal quarter.

Comparison of Peru Results for the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022


(in millions)	Revenues		Direct Costs		Adjusted EBITDA
September 30, 2022	$	457.1	$	255.7	$	201.4
Organic enrollment (1)	22.8
Product mix, pricing and timing (1)	24.2
Organic constant currency	47.0		45.9		1.1
Foreign exchange	11.3		6.7		4.6



September 30, 2023	$	515.4	$	308.3	$	207.1

Revenues increased by $58.3 million, a 13% increase from the 2022 fiscal period.

•Organic enrollment increased during the 2023 fiscal period by 6%, increasing revenues by $22.8 million.

•Revenues from our Peru segment represented 48% of our consolidated total revenues for the 2023 fiscal period compared to 51% for the 2022 fiscal period.

Adjusted EBITDA increased by $5.7 million from the 2022 fiscal period, which was net of higher costs associated with return-to-campus expenses.

Corporate

Corporate revenues primarily represent miscellaneous other revenues, net of the elimination of intersegment revenues. In 2022, corporate revenues also included transition services agreements related to previous divestitures.

Comparison of Corporate Results for the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Revenues	$	—	$	0.7	(100)	%
Expenses	9.9		12.6		21	%
Adjusted EBITDA	$	(9.9)	$	(11.9)	17	%

Comparison of Corporate Results for the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022


					% Change
					Better/(Worse)
(in millions)	2023		2022		2023 vs. 2022
Revenues	$	—	$	3.8	(100)	%
Expenses	28.8		41.0		30	%
Adjusted EBITDA	$	(28.8)	$	(37.2)	23	%

Adjusted EBITDA increased by $8.4 million, a 23% increase from the 2022 fiscal period, mainly driven by a decrease in contract labor expenses and other professional fees, as well as a reduction in IT-related costs.

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 for at least the next 12 months from the date of issuance of this report.

Our primary source of cash is revenue from tuition charged to students in connection with our various education program offerings. Essentially all of our revenues are generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru. We anticipate generating sufficient cash flow from operations in both countries 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 September 30, 2023, our secondary source of liquidity was cash and cash equivalents of $130.9 million. Our cash accounts are maintained with high-quality financial institutions.

The Company also maintains a revolving credit facility (the Senior Secured Credit Facility) with a syndicate of financial institutions as a source of liquidity. The Senior Secured Credit Facility, pursuant to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”, as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022, and, as further amended by the Third Amendment, dated as of September 18, 2023, the “Amended Credit Agreement”), provides for borrowings of $145.0 million of revolving credit loans maturing October 2024 (the Series 2024 Tranche) and $155.0 million of revolving credit loans maturing in September 18, 2028 (the Series 2028 Tranche) for a $300.0 million aggregate revolving credit facility (the revolving credit facility). 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. As of September 30, 2023, the Company had borrowed $28.0 million of the $300.0 million of available capacity.

If certain conditions are satisfied, the Amended Credit Agreement also provides for an incremental revolving and term loan facilities, at the request of the Company, not to exceed (i) the greater of (a) $172.5 million and (b) 50% of the consolidated EBITDA of the Company, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25x, plus (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

Liquidity Restrictions

Our liquidity is affected by restricted cash balances, which totaled $7.6 million as of September 30, 2023 and $8.6 million as of December 31, 2022. Restricted cash consisted of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Indefinite Reinvestment of Historical Foreign Earnings

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As of September 30, 2023, $121.3 million of our total $130.9 million of cash and cash equivalents were held by foreign subsidiaries. As of December 31, 2022, $77.3 million of our total $85.2 million of cash and cash equivalents were held by foreign subsidiaries. As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Liquidity Requirements

Our short-term liquidity requirements include: funding for debt service (including finance leases); operating lease obligations; payments of deferred compensation; working capital; operating expenses; capital expenditures; payment of a special dividend; and business development activities.

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

Debt

As of September 30, 2023, our debt obligations consisted of $28.0 million of borrowings under the Senior Secured Credit Facility and $49.1 million of other debt. Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries and notes payable. In addition, our finance lease obligations and sale-leaseback financings were $57.6 million.

Covenants

Under the Amended Credit Agreement, we are subject to a Consolidated Senior Secured Debt to Consolidated EBITDA financial maintenance covenant that applies only to the revolving credit facility (a leverage ratio covenant), as defined in the Amended Credit Agreement, unless certain conditions are satisfied. As of September 30, 2023, those conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant. The maximum ratio, as defined, is 3.00x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter. In addition, indebtedness at some of our locations contain financial maintenance covenants. We were in compliance with those covenants as of September 30, 2023.

Leases

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations. As discussed in Note 7, Leases, of our consolidated financial statements included elsewhere in this Form 10-Q, we have significant operating lease liabilities. As of September 30, 2023 and December 31, 2022, the present value of operating lease liabilities was $393.2 million and $415.9 million, respectively.

Capital Expenditures

Capital expenditures primarily consist of purchases of property and equipment. 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 business through the following: (1) capacity expansion at institutions to support enrollment growth; (2) new programs and campuses for institutions in our existing markets; and (3) information technology to increase efficiency and controls. 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, excluding receipts from the sale of subsidiaries and property equipment, were $26.7 million and $17.1 million during the nine months ended September 30, 2023 and 2022, respectively. The 56% increase in capital expenditures was primarily due to investment in equipment for health science programs in Peru as well as campus expansion and digital innovation in Mexico.

Special Cash Dividend

On October 30, 2023, the Board of Directors of the Company approved the payment of a special cash dividend (the 2023 Special Dividend) equal to $0.70 per each share of the Company’s common stock, par value $0.004 per share, to each holder of record on November 15, 2023. The 2023 Special Dividend is scheduled to be paid on November 30, 2023. Based on the current number of shares outstanding, the aggregate amount of the 2023 Special Dividend is expected to be approximately $110.0 million.

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 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.

The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2023 and 2022:


(in millions)	2023		2022
Cash provided by (used in):
Operating activities	$	187.4	$	154.7
Investing activities	(26.2)		66.3
Financing activities	(120.2)		(236.5)
Effects of exchange rates changes on cash	4.0		6.4
Change in cash included in current assets held for sale	(0.3)		—
Net change in cash and cash equivalents and restricted cash	$	44.7	$	(9.1)

Comparison of Cash Flows for the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

Operating Activities

Cash provided by operating activities increased by $32.7 million to $187.4 million for the 2023 fiscal period from $154.7 million for the 2022 fiscal period. This increase in operating cash was attributable to higher operating income, combined with the net effect of changes in operating assets and liabilities, which increased operating cash by $80.9 million compared to the 2022 fiscal period. This increase in operating cash was partially offset by an increase in cash paid for taxes of $44.3 million, from $75.7 million for the 2022 fiscal period to $120.0 million for the 2023 fiscal period, which was a result of higher tax prepayments during the 2023 fiscal period in Mexico and Peru, partially offset by tax refunds in the United States. Additionally, cash paid for interest increased by $3.9 million, from $12.4 million for the 2022 fiscal period to $16.3 million for the 2023 fiscal period, primarily due to higher average debt balances.

Investing Activities

Cash flows from investing activities decreased by $92.5 million to a cash outflow of $(26.2) million for the 2023 fiscal period from a cash inflow of $66.3 million for the 2022 fiscal period. This decrease in investing cash flows was attributable to lower cash receipts from the sales of Discontinued Operations and property and equipment of $82.9 million, from $83.4 million, net, during the 2022 fiscal period (primarily related to the receipt of the escrow receivable in connection with the 2021 sale of Walden University and the collection of certain receivables from the 2021 sale of our Brazilian operations) to $0.5 million during the 2023 fiscal period. Additionally, cash used for capital expenditures increased by $9.6 million during the 2023 fiscal period, as compared to the 2022 fiscal period, mainly driven by investment in equipment for health science programs in Peru as well as campus expansion and digital innovation in Mexico.

Financing Activities

Cash used in financing activities decreased by $116.3 million to $(120.2) million for the 2023 fiscal period from $(236.5) million for the 2022 fiscal period. This decrease in financing cash outflows was attributable to the period-over-period effect of $207.2 million of payments made during the 2022 fiscal period for common stock repurchases. In addition, payments of dividend equivalent rights for vested share-based awards were lower by $2.3 million for the 2023 fiscal period compared to

2022 fiscal period. These decreases in financing cash outflows were partially offset by: (1) higher net payments of long-term debt during the 2023 fiscal period of $83.8 million; (2) lower proceeds from the exercise of stock options of $8.7 million compared to the 2022 fiscal period; and (3) payments of $1.3 million during the 2023 fiscal period in connection with the amendment of our Senior Secured Credit Facility. Other items accounted for the remaining difference of $0.6 million.

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 2022 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 2022 Form 10-K. During the nine months ended September 30, 2023, there were no significant changes to our critical accounting policies.

Recently Adopted Accounting Standards

None.

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 2022 Form 10-K. There have been no significant changes in our market risk exposures since our December 31, 2022 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

During the third quarter of 2023, the Company upgraded to a new cloud-based system for its planning and financial consolidation and close processes. This system implementation was not made in response to any identified deficiency or weakness in our internal control over financial reporting.

Except as noted above, there were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Please refer to “Item 3. Legal Proceedings” in our 2022 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, our former Spanish holding company, Laureate Netherlands Holding B.V. (f/k/a Iniciativas Culturales de España, S.L.), has been subject to ongoing tax audits by the Spanish Taxing Authority (“STA”), resulting in the issuance of final assessments based on the STA’s rejection of the tax deductibility of financial expenses related to certain intercompany acquisitions. Accordingly, we have paid assessments totaling approximately $40.8 million for tax years during the period 2006 to 2015. We filed various appeals of the assessments, which have been rejected, and in June 2023, the Spanish Supreme Court ruled in the favor of the STA on its appeal regarding these issues. As a result, the Company has no further recourse with respect to the related final assessments for tax years 2006 to 2010. This ruling does not have a material effect on the Company’s consolidated financial statements.

In May 2023, we were notified by the STA that an audit of our former Spanish holding company was being initiated in relation to corporate income tax for the period from January 2018 to May 2020 and withholding on account of non-resident income tax for the period from May 2019 to May 2020. At this time we cannot predict the outcome of this matter or the impact, if any, to the Company's consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in “Item 1A. Risk Factors” in our 2022 Form 10‑K.

Item 5. Other Information

During the three months ended September 30, 2023, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

Item 6. Exhibits

Exhibit

No.

Exhibit Description

10.1*

Third Amendment dated as of September 18, 2023 to Third Amended and Restated Credit Agreement by Laureate Education, Inc. and Citibank, N.A., as administrative agent

10.2*†

Fourth Amendment to Independent Contractor and Consultant Agreement as of September 18, 2023 between Laureate Education, Inc. and MC Consultoria and Assesoria Empresarial LTDA

31.1

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

31.2

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

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

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

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

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.

†

Indicates a management contract or compensatory plan or arrangement.

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.

/s/ RICHARD M. BUSKIRK

Richard M. Buskirk

Senior Vice President and Chief Financial Officer

Date: November 2, 2023

/s/ GERARD M. KNAUER

Gerard M. Knauer

Vice President, Accounting and Global Controller

Date: November 2, 2023