laur-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

☐ 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 March 31, 2024
Common stock, par value $0.004 per share						155,160,367 shares


INDEX
PART I. - FINANCIAL INFORMATION		Page No.

Item 1.	Financial Statements (Unaudited)



	Consolidated Statements of Operations - Three months ended March 31, 2024 and March 31, 2023	2



	Consolidated Statements of Comprehensive Income - Three months ended March 31, 2024 and March 31, 2023	3

	Consolidated Balance Sheets - March 31, 2024 and December 31, 2023	4

	Consolidated Statements of Cash Flows - Three months ended March 31, 2024 and March 31, 2023	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II. - OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

SIGNATURES		34

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

IN THOUSANDS, except per share amounts


For the three months ended March 31,	2024		2023
	(Unaudited)		(Unaudited)
Revenues	$	275,372	$	251,255
Costs and expenses:
Direct costs	253,978		225,312
General and administrative expenses	10,265		10,314

Operating income	11,129		15,629
Interest income	1,911		2,158
Interest expense	(4,661)		(5,952)


Other (expense) income, net	(548)		261
Foreign currency exchange loss, net	(5,607)		(28,952)
(Loss) gain on disposal of subsidiaries, net	(3,086)		306
Loss from continuing operations before income taxes and equity in net loss of affiliates	(862)		(16,550)
Income tax expense	(9,922)		(10,195)
Equity in net loss of affiliates, net of tax	(7)		(3)
Loss from continuing operations	(10,791)		(26,748)
Loss from discontinued operations, net of tax of $0 for both periods	(57)		(14)
Net loss	(10,848)		(26,762)
Net loss attributable to noncontrolling interests	97		155
Net loss attributable to Laureate Education, Inc.	$	(10,751)	$	(26,607)






Basic and diluted earnings (loss) per share:
Loss from continuing operations	$	(0.07)	$	(0.17)
Loss from discontinued operations	—		—
Basic and diluted loss per share	$	(0.07)	$	(0.17)

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

IN THOUSANDS


For the three months ended March 31,	2024		2023
	(Unaudited)		(Unaudited)
Net loss	$	(10,848)	$	(26,762)
Other comprehensive income:
Foreign currency translation adjustment, net of tax of $0 for both periods	26,883		72,797


Total other comprehensive income	26,883		72,797
Comprehensive income	16,035		46,035
Net comprehensive loss attributable to noncontrolling interests	97		149
Comprehensive income attributable to Laureate Education, Inc.	$	16,132	$	46,184

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

IN THOUSANDS, except per share amounts


	March 31, 2024		December 31, 2023
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	126,226	$	89,392
Restricted cash	7,616		7,505
Receivables:
Accounts and notes receivable	159,145		173,571
Other receivables	8,417		3,509
Allowance for doubtful accounts	(85,418)		(84,967)
Receivables, net	82,144		92,113

Income tax receivable	12,278		15,224

Prepaid expenses and other current assets	33,427		19,284
Current assets held for sale	756		889
Total current assets	262,447		224,407
Property and equipment:
Land	139,289		129,229
Buildings	377,868		377,954
Furniture, equipment and software	559,968		556,134
Leasehold improvements	143,978		137,171
Construction in-progress	18,900		22,673
Accumulated depreciation and amortization	(672,538)		(660,935)
Property and equipment, net	567,465		562,226
Operating lease right-of-use assets, net	364,114		371,611
Goodwill	672,502		661,482
Tradenames, net	171,305		169,183
Deferred costs, net	4,781		4,981
Deferred income taxes	71,321		71,426

Other assets	46,430		44,896
Long-term assets held for sale	16,022		15,404
Total assets	$	2,176,387	$	2,125,616

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (continued)

IN THOUSANDS, except per share amounts


	March 31, 2024		December 31, 2023
Liabilities and stockholders' equity	(Unaudited)
Current liabilities:
Accounts payable	$	35,824	$	43,239
Accrued expenses	72,696		69,464
Accrued compensation and benefits	79,263		96,652
Deferred revenue and student deposits	121,305		69,351
Current portion of operating leases	59,086		57,514
Current portion of long-term debt and finance leases	49,411		52,828
Income taxes payable	29,027		40,204



Other current liabilities	26,352		22,714
Current liabilities held for sale	1,177		1,248
Total current liabilities	474,141		453,214
Long-term operating leases, less current portion	342,983		360,120
Long-term debt and finance leases, less current portion	176,551		112,241
Deferred compensation	9,636		9,511
Income taxes payable	137,505		140,492
Deferred income taxes	57,219		56,490

Other long-term liabilities	35,326		34,151
Long-term liabilities held for sale	10,418		10,259
Total liabilities	1,243,779		1,176,478
Redeemable equity	1,398		1,398
Stockholders' equity:

Common stock, par value $0.004 per share – 700,000 shares authorized, 155,160 shares issued and outstanding as of March 31, 2024 and 157,586 shares issued and outstanding as of December 31, 2023	621		630
Additional paid-in capital	1,160,865		1,179,721
Retained earnings	17,411		41,862
Accumulated other comprehensive loss	(245,261)		(272,144)

Total Laureate Education, Inc. stockholders' equity	933,636		950,069
Noncontrolling interests	(2,426)		(2,329)
Total stockholders' equity	931,210		947,740
Total liabilities and stockholders' equity	$	2,176,387	$	2,125,616

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

IN THOUSANDS


For the three months ended March 31,	2024		2023
Cash flows from operating activities	(Unaudited)		(Unaudited)
Net loss	$	(10,848)	$	(26,762)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	18,050		16,721
Amortization of operating lease right-of-use assets	9,765		7,189

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



Non-cash interest expense	324		245
Non-cash share-based compensation expense	1,409		1,124
Bad debt expense	6,307		2,788
Deferred income taxes	1,267		(607)
Unrealized foreign currency exchange loss	4,964		28,949
Non-cash loss from non-income tax contingencies	—		61
Other, net	3,221		3,724
Changes in operating assets and liabilities:
Receivables	2,301		4,224
Prepaid expenses and other assets	(14,475)		(12,152)
Accounts payable and accrued expenses	(26,597)		(26,159)
Income tax receivable/payable, net	(11,986)		(32,663)
Deferred revenue and other liabilities	46,200		58,263
Net cash provided by operating activities	33,153		26,469
Cash flows from investing activities
Purchase of property and equipment	(15,884)		(5,833)

Receipts from sales of property and equipment	48		4
Net (payments) receipts from sales of discontinued operations	(154)		250






Net cash used in investing activities	(15,990)		(5,579)
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of original issue discount	81,091		38,000
Payments on long-term debt	(26,545)		(15,227)
Payment of dividend equivalent rights for vested share-based awards	(1,598)		(2,318)
Payments to purchase noncontrolling interests	—		(123)
Proceeds from exercise of stock options	29		1,423
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options	(1,693)		(611)
Payments to repurchase common stock	(32,894)		—
Payments of debt issuance costs	(9)		—


Net cash provided by financing activities	18,381		21,144
Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	1,123		3,462
Change in cash included in current assets held for sale	278		—
Net change in Cash and cash equivalents and Restricted cash	36,945		45,496
Cash and cash equivalents and Restricted cash at beginning of period	96,897		93,784
Cash and cash equivalents and Restricted cash at end of period	$	133,842	$	139,280

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, 2023 (the 2023 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 March 31, 2024 and 2023:


	Mexico		Peru		Corporate(1)		Total
2024
Tuition and educational services	$	267,315	$	54,296	$	—	$	321,611	117	%
Other	47,168		11,974		47		59,189		21	%
Gross revenue	314,483		66,270		47		380,800		138	%
Less: Discounts / waivers / scholarships	(100,403)		(5,025)		—		(105,428)		(38)	%
Total	$	214,080	$	61,245	$	47	$	275,372	100	%
2023
Tuition and educational services	$	223,008	$	63,027	$	—	$	286,035	114	%
Other	34,694		11,073		59		45,826		18	%
Gross revenue	257,702		74,100		59		331,861		132	%
Less: Discounts / waivers / scholarships	(75,739)		(4,867)		—		(80,606)		(32)	%
Total	$	181,963	$	69,233	$	59	$	251,255	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 $159,145 and $173,571 as of March 31, 2024 and December 31, 2023, respectively. The decrease in the contract assets balance at March 31, 2024 compared to December 31, 2023 was primarily driven by collections, in particular the repayment of outstanding amounts by students re-enrolling for the next academic session. The first and third calendar quarters generally coincide with the primary and secondary intakes for our larger institutions. All contract asset amounts are classified as current.

Contract liabilities in the amount of $121,305 and $69,351 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively. The increase in the contract liability balance during the period ended March 31, 2024 was the result of semester billings and cash payments received in advance of satisfying performance obligations, partially offset by revenue recognized during that period. Revenue recognized during the three months ended March 31, 2024 that was included in the contract liability balance at the beginning of the year was approximately $51,701.

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 2023, two parcels of land at campuses in Mexico and a parcel of land in the United States met the criteria for classification as held for sale under ASC 360-10-45-9. The assets and liabilities are recorded at the lower of their carrying values or their estimated fair values less costs to sell. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following table:


	March 31, 2024		December 31, 2023
Assets Held for Sale
Cash and cash equivalents	$	228	$	502
Receivables, net	481		376
Property and equipment, net	6,787		6,310
Operating lease right-of-use assets, net	9,235		9,094
Other assets	47		11
Total assets held for sale	$	16,778	$	16,293


Liabilities Held for Sale
Deferred revenue and student deposits	$	771	$	731
Operating leases, including current portion	9,355		9,214
Long-term debt, including current portion	867		859
Other liabilities	602		703
Total liabilities held for sale	$	11,595	$	11,507

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 the countries in which we compete. We compete with other private higher education institutions on the basis of price, educational quality, reputation and location. We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our network. There are a number of private and public institutions in both countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future. We expect competition to increase as the Mexican and Peruvian markets mature. Essentially all of our revenues were generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru. Specifics related to both of our reportable segments are discussed below.

In Mexico, the private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities. Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses. Students in our Mexican institutions typically finance their own education.

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

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 Loss from continuing operations before income taxes and equity in net loss of affiliates, adding back the following items: (Loss) gain on disposal of subsidiaries, net, Foreign currency exchange loss, net, Other (expense) income, net, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, and Share-based compensation expense.

Adjusted EBITDA is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. 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 Loss from continuing operations before income taxes and equity in net loss of affiliates, as reported in the Consolidated Statements of Operations:




For the three months ended March 31,	2024		2023
Revenues
Mexico	$	214,080	$	181,963
Peru	61,245		69,233
Corporate	47		59
Total Revenues	$	275,372	$	251,255
Adjusted EBITDA of reportable segments
Mexico	$	59,916	$	48,946
Peru	(20,710)		(6,455)
Total Adjusted EBITDA of reportable segments	39,206		42,491
Reconciling items:
Corporate	(8,618)		(9,017)
Depreciation and amortization expense	(18,050)		(16,721)

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

Operating income	11,129		15,629
Interest income	1,911		2,158
Interest expense	(4,661)		(5,952)


Other (expense) income, net	(548)		261
Foreign currency loss, net	(5,607)		(28,952)
(Loss) gain on disposal of subsidiaries, net	(3,086)		306
Loss from continuing operations before income taxes and equity in net loss of affiliates	$	(862)	$	(16,550)


	March 31, 2024		December 31, 2023
Assets
Mexico	$	1,453,237	$	1,396,605
Peru	559,927		559,428
Corporate	163,223		169,583
Total assets	$	2,176,387	$	2,125,616

Note 5. Goodwill

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


	Mexico		Peru		Total
Balance at December 31, 2023	$	588,431	$	73,051	$	661,482




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

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

Note 6. Debt

Outstanding long-term debt was as follows:


	March 31, 2024		December 31, 2023
Senior long-term debt:
Senior Secured Credit Facility (stated maturity date September 18, 2028)	$	121,000	$	59,000

Other debt:
Lines of credit	10,078		10,864
Notes payable and other debt	35,094		40,009
Total senior and other debt	166,172		109,873
Finance lease obligations and sale-leaseback financings	62,024		57,568
Total long-term debt and finance leases	228,196		167,441
Less: total unamortized deferred financing costs	2,234		2,372
Less: current portion of long-term debt and finance leases	49,411		52,828
Long-term debt and finance leases, less current portion	$	176,551	$	112,241

Senior Secured Credit Facility

Under its credit agreement (the Amended Credit Agreement), the Company maintains a revolving credit facility that provides for $145,000 of revolving credit loans maturing October 2024 (the Series 2024 Tranche) and $155,000 of revolving credit loans maturing September 2028 (the Series 2028 Tranche) for a $300,000 aggregate revolving credit facility (the Revolving Credit Facility). The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.”

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

Estimated Fair Value of Debt

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

Certain Covenants

As of March 31, 2024, 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 less than 25% of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply. As of March 31, 2024, more than 25% of the revolving credit facility was utilized, and we were in compliance with the leverage ratio covenant. In addition, indebtedness at some of our locations contain financial maintenance covenants. We were in compliance with these covenants as of March 31, 2024.

Note 7. 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 March 31, 2024 and December 31, 2023, Laureate had recorded cumulative liabilities for income tax contingencies of $137,505 and $140,492, respectively.

Non-Income Tax Loss Contingencies

Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities. Laureate intends to vigorously defend against these matters. As of March 31, 2024 and December 31, 2023, approximately $20,100 and $19,800, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

We have also identified certain loss contingencies that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies could be up to approximately $23,200 if the outcomes were unfavorable.

Guarantees

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. In addition, during the fourth quarter of 2023, the same institution issued a bank guarantee in order to appeal a tax assessment received related to the tax audit of 2009. As of March 31, 2024 and December 31, 2023, the total amount of the guarantees was approximately $12,600 and $12,700, respectively.

Note 8. Stockholders’ Equity

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


	Laureate Education, Inc. Stockholders
	Common stock			Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Non-controlling interests		Total stockholders’ equity
	Shares	Amount
Balance at December 31, 2023	157,586	$	630	$	1,179,721	$	41,862	$	(272,144)	$	(2,329)	$	947,740


Non-cash share-based compensation	—	—		1,409		—		—		—		1,409
Purchase and retirement of common stock	(2,607)	(10)		(19,512)		(13,700)		—		—		(33,222)
Exercise of stock options and vesting of restricted stock units, net of shares withheld to satisfy tax withholding	181	1		(774)		—		—		—		(773)
Equitable adjustments to stock-based awards	—	—		21		—		—		—		21




Net loss	—	—		—		(10,751)		—		(97)		(10,848)
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		26,883		—		26,883


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

Stock Repurchase

On March 5, 2024, the Company entered into a Stock Purchase Agreement with each of ILM Investments Limited Partnership, Torreal Sociedad de Capital Riesgo S.A., Pedro del Corro García-Lomas, a member of Laureate’s Board of Directors, Ana Gómez Cuesta and José Diaz-Rato Revuelta (together, the Sellers), pursuant to which the Company purchased an aggregate of 2,607 shares of our common stock from the Sellers at a purchase price of $12.62 per share for an aggregate purchase price of $32,894. This repurchase, which was approved as a related party transaction by the Audit and Risk Committee of the Company’s Board of Directors, was pursuant to the Company’s existing $100,000 stock purchase program that was announced on February 22, 2024. Under this stock repurchase program, all shares repurchased are immediately retired. Upon retirement of repurchased stock, the excess of the purchase price plus excise tax over par value is allocated to additional paid-in capital, subject to certain limitations. Any remainder is allocated to retained earnings.

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


	Laureate Education, Inc. 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

SEC Form 10-Q filed by Laureate Education Inc.