PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

IN THOUSANDS, except per share amounts

IN THOUSANDS, except per share amounts
For the three months ended September 30, 2017 2016
(Unaudited) (Unaudited)
Revenues $ 983,394
$ 929,855
Costs and expenses:
Direct costs 924,091
864,203
General and administrative expenses 64,999
53,150
Operating (loss) income (5,696 ) 12,502
Interest income 5,840
3,437
Interest expense (76,454 ) (104,781 )
Loss on debt extinguishment —
(15,682 )
(Loss) gain on derivatives (19,930 ) 516
Other (expense) income, net (718 ) 353
Foreign currency exchange gain, net 7,327
26,329
Gain on sales of subsidiaries, net —
155,151
(Loss) income from continuing operations before income taxes (89,631 ) 77,825
Income tax (expense) benefit (13,859 ) 3,105
Net (loss) income (103,490 ) 80,930
Net loss attributable to noncontrolling interests 5,531
5,387
Net (loss) income attributable to Laureate Education, Inc. $ (97,959 ) $ 86,317

Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity (84,060 ) 2,160
Net (loss) income available to common stockholders $ (182,019 ) $ 88,477




For the three months ended September 30,	2019			2018
	(Unaudited)			(Unaudited)
Revenues	$	773,699		$	778,255
Costs and expenses:
Direct costs	655,627			665,549
General and administrative expenses	72,342			73,680
Loss on impairment of assets	—			10,030
Operating income	45,730			28,996
Interest income	3,154			3,502
Interest expense	(40,319		)	(58,319		)
Loss on debt extinguishment	(200		)	—
Gain (loss) on derivatives	284			(144		)
Other income, net	1,038			8,312
Foreign currency exchange loss, net	(14,777		)	(26,443		)
Loss on disposal of subsidiaries	(1,474		)	—
Loss from continuing operations before income taxes	(6,564		)	(44,096		)
Income tax (expense) benefit	(21,962		)	3,743
Loss from continuing operations	(28,526		)	(40,353		)
Loss from discontinued operations, including tax (expense) benefit of ($2,062) and $2,939, respectively	(27,137		)	(37,905		)
Loss on sales of discontinued operations, including tax expense of $3,591 and $2,694, respectively	(41,131		)	(18,426		)
Net loss	(96,794		)	(96,684		)
Net loss attributable to noncontrolling interests	1,568			1,895
Net loss attributable to Laureate Education, Inc.	$	(95,226	)	$	(94,789	)

Accretion of redeemable noncontrolling interests and equity	(193		)	324
Net loss available to common stockholders	$	(95,419	)	$	(94,465	)

Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share $ (1.02 ) $ 0.66
Diluted (loss) earnings per share $ (1.02 ) $ 0.66



Basic and diluted loss per share:
Loss from continuing operations	$	(0.13	)	$	(0.18	)
Loss from discontinued operations	(0.30		)	(0.24		)
Basic and diluted loss per share	$	(0.43	)	$	(0.42	)

~~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, 2017 2016
(Unaudited) (Unaudited)
Revenues $ 3,116,766
$ 3,068,299
Costs and expenses:
Direct costs 2,719,569
2,697,820
General and administrative expenses 221,909
158,566
Operating income 175,288
211,913
Interest income 14,994

13,305
Interest expense (278,049 )
(314,383 )
Loss on debt extinguishment (8,425 )
(17,363 )
Gain (loss) on derivatives 19,187

(8,235 )
Other expense, net (667 )
(964 )
Foreign currency exchange (loss) gain, net (109 )
80,263
(Loss) gain on sales of subsidiaries, net (172 ) 398,412
(Loss) income from continuing operations before income taxes and equity in net income of affiliates (77,953 ) 362,948
Income tax expense (28,793 ) (35,246 )
Equity in net income of affiliates, net of tax 1
20
Net (loss) income (106,745 ) 327,722
Net loss attributable to noncontrolling interests 2,365
2,817
Net (loss) income attributable to Laureate Education, Inc. $ (104,380 ) $ 330,539

Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity (192,141 ) 3,233
Net (loss) income available to common stockholders $ (296,521 ) $ 333,772

Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share $ (1.77 ) $ 2.50
Diluted (loss) earnings per share $ (1.77 ) $ 2.49

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of ~~Comprehensive Income~~Operations

IN THOUSANDS, except per share amounts

IN THOUSANDS
For the three months ended September 30, 2017 2016
(Unaudited) (Unaudited)
Net (loss) income $ (103,490 ) $ 80,930
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $0 for both periods 64,742
(15,893 )
Unrealized gain on derivative instruments, net of tax of $0 for both periods 525
2,386
Minimum pension liability adjustment, net of tax of $0 for both periods —
63
Total other comprehensive income (loss) 65,267
(13,444 )
Comprehensive (loss) income (38,223 ) 67,486
Net comprehensive loss attributable to noncontrolling interests 4,065
4,506
Comprehensive (loss) income attributable to Laureate Education, Inc. $ (34,158 ) $ 71,992




For the nine months ended September 30,	2019			2018
	(Unaudited)			(Unaudited)
Revenues	$	2,367,174		$	2,397,762
Costs and expenses:
Direct costs	2,002,180			2,044,159
General and administrative expenses	193,658			194,184
Loss on impairment of assets	470			10,030
Operating income	170,866			149,389
Interest income	9,552			9,358
Interest expense	(136,438		)	(181,746		)
Loss on debt extinguishment	(26,417		)	(7,481		)
Gain on derivatives	8,099			92,112
Other income, net	9,138			10,815
Foreign currency exchange loss, net	(10,643		)	(43,959		)
Loss on disposal of subsidiaries	(1,474		)	—
Income from continuing operations before income taxes and equity in net income of affiliates	22,683			28,488
Income tax expense	(60,677		)	(65,129		)
Equity in net income of affiliates, net of tax	219			—
Loss from continuing operations	(37,775		)	(36,641		)
Income from discontinued operations, net of tax expense of $15,926 and $40,406, respectively	66,472			23,551
Gain on sales of discontinued operations, including tax benefit of $31,153 and $18,097, respectively	848,390			311,904
Net income	877,087			298,814
Net loss (income) attributable to noncontrolling interests	522			(315		)
Net income attributable to Laureate Education, Inc.	$	877,609		$	298,499

Accretion of other redeemable noncontrolling interests and equity and Series A convertible redeemable preferred stock	264			(61,403		)
Gain upon conversion of Series A convertible redeemable preferred stock	—			74,110
Net income available to common stockholders	$	877,873		$	311,206

~~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, 2017 2016
(Unaudited) (Unaudited)
Net (loss) income $ (106,745 ) $ 327,722
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $0 for both periods 196,593
(45,005 )
Unrealized gain on derivative instruments, net of tax of $0 for both periods 6,625
5,509
Minimum pension liability adjustment, net of tax of $0 and $1,900, respectively —
8,948
Total other comprehensive income (loss) 203,218
(30,548 )
Comprehensive income 96,473
297,174
Net comprehensive loss attributable to noncontrolling interests 10
1,817
Comprehensive income attributable to Laureate Education, Inc. $ 96,483
$ 298,991



Basic earnings (loss) per share:
Loss from continuing operations	$	(0.17	)	$	(0.11	)
Income from discontinued operations	4.08			1.60
Basic earnings per share	$	3.91		$	1.49
Diluted earnings (loss) per share:
Loss from continuing operations	$	(0.17	)	$	(0.17	)
Income from discontinued operations	4.08			1.60
Diluted earnings per share	$	3.91		$	1.43

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated ~~Balance Sheets~~Statements of Comprehensive Income

IN THOUSANDS

IN THOUSANDS, except per share amounts
September 30, 2017 December 31, 2016
Assets (Unaudited)
Current assets:
Cash and cash equivalents (includes VIE amounts of $265,494 and $169,074, see Note 2) $ 504,962
$ 464,965
Restricted cash and investments 199,300
189,319
Receivables:
Accounts and notes receivable 771,597
494,646
Other receivables 22,446
23,758
Related party receivables 4,863
6,931
Allowance for doubtful accounts (199,759 ) (190,499 )
Receivables, net 599,147
334,836
Income tax receivable 59,866
29,447
Prepaid expenses and other current assets 104,376
97,234
Current assets held for sale 92,248
—
Total current assets (includes VIE amounts of $549,721 and $322,210, see Note 2) 1,559,899
1,115,801
Notes receivable, net 12,713
61,157
Property and equipment:
Land 376,000
396,821
Buildings 1,162,800
1,219,783
Furniture, equipment and software 1,206,392
1,160,350
Leasehold improvements 440,134
399,555
Construction in-progress 72,526
103,205
Accumulated depreciation and amortization (1,227,618 ) (1,128,081 )
Property and equipment, net 2,030,234
2,151,633
Land use rights, net 44,470
45,275
Goodwill 2,028,286
1,934,464
Other intangible assets:
Tradenames 1,330,302
1,307,633
Other intangible assets, net 43,206
46,700
Deferred costs, net 62,043
57,748
Deferred income taxes 152,241
142,130
Derivative instruments 29,721
4,464
Other assets 209,648
195,465
Long-term assets held for sale 279,801
—
Total assets (includes VIE amounts of $1,558,050 and $1,309,113, see Note 2) $ 7,782,564
$ 7,062,470




For the three months ended September 30,	2019			2018
	(Unaudited)			(Unaudited)
Net loss	$	(96,794	)	$	(96,684	)
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $0 for both periods	(82,580		)	(52,750		)
Unrealized loss on derivative instruments, net of tax of $0	—			(560		)
Minimum pension liability adjustment, net of tax of $0	4,531			—
Total other comprehensive loss	(78,049		)	(53,310		)
Comprehensive loss	(174,843		)	(149,994		)
Net comprehensive loss attributable to noncontrolling interests	2,078			1,683
Comprehensive loss attributable to Laureate Education, Inc.	$	(172,765	)	$	(148,311	)

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, 2017 December 31, 2016
Liabilities and stockholders' equity (Unaudited)
Current liabilities:
Accounts payable $ 88,122
$ 86,699
Accrued expenses 367,560
368,973
Accrued compensation and benefits 244,440
239,495
Deferred revenue and student deposits 729,855
362,891
Current portion of long-term debt 185,848
178,989
Current portion of due to shareholders of acquired companies 28,881
118,679
Income taxes payable 31,074
30,371
Derivative instruments —
5,218
Other current liabilities 60,919
48,917
Current liabilities held for sale 158,280
—
Total current liabilities (includes VIE amounts of $504,325 and $320,922, see Note 2) 1,894,979
1,440,232
Long-term debt, less current portion 3,024,560
3,629,375
Due to shareholders of acquired companies, less current portion 52,294
92,269
Deferred compensation 13,032
14,128
Income taxes payable 120,029
135,140
Deferred income taxes 450,718
452,084
Derivative instruments 8,094
7,750
Other long-term liabilities 246,522
270,267
Long-term liabilities held for sale 73,199
—
Total liabilities (includes VIE amounts of $606,896 and $424,297, see Note 2) 5,883,427
6,041,245
Series A convertible redeemable preferred stock, par value $0.001 per share – 512 shares authorized, 400 and 343 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 302,693

332,957
Redeemable noncontrolling interests and equity 14,215
23,876
Stockholders' equity:
Preferred stock, par value $0.001 per share – 49,488 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016 —
—
Class A common stock, par value $0.004 per share – 700,000 shares authorized, 54,749 shares issued and outstanding as of September 30, 2017 and no shares authorized, issued and outstanding as of December 31, 2016 219
—
Class B common stock, par value $0.004 per share – 175,000 shares authorized, 132,575 shares issued and outstanding as of September 30, 2017 and no shares authorized, issued and outstanding as of December 31, 2016 531
—
Common stock, par value $0.004 per share – no shares authorized, issued and outstanding as of September 30, 2017 and 175,000 shares authorized, 133,376 shares issued and outstanding as of December 31, 2016 —
534
Additional paid-in capital 3,545,365
2,721,432
Accumulated deficit (1,142,081 ) (1,037,701 )
Accumulated other comprehensive loss (852,356 ) (1,052,055 )
Total Laureate Education, Inc. stockholders' equity 1,551,678
632,210
Noncontrolling interests 30,551
32,182
Total stockholders' equity 1,582,229
664,392
Total liabilities and stockholders' equity $ 7,782,564
$ 7,062,470

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

LAUREATE EDUCATION, INC. AND SUBSIDIARIES

Consolidated Statements of ~~Cash Flows~~Comprehensive Income

IN THOUSANDS

IN THOUSANDS
For the nine months ended September 30, 2017 2016
Cash flows from operating activities (Unaudited) (Unaudited)
Net (loss) income $ (106,745 ) $ 327,722
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 199,394
202,735
Loss (gain) on sale of subsidiary and disposal of property and equipment 3,050
(398,499 )
(Gain) loss on derivative instruments (19,621 ) 7,211
Loss on debt extinguishment 8,425
17,363
Payment of redemption and call premiums and fees on debt modification (65,225 ) —
Non-cash interest expense 29,809
36,892
Interest paid on deferred purchase price for acquisitions (39,419 ) —
Non-cash share-based compensation expense 43,969
28,939
Bad debt expense 88,677
76,141
Deferred income taxes (21,787 ) (12,309 )
Unrealized foreign currency exchange loss (gain) 4,852
(73,641 )
Non-cash loss from non-income tax contingencies 4,032
6,016
Other, net 1,637
1,574
Changes in operating assets and liabilities:
Restricted cash (1,743 ) (6,826 )
Receivables (344,661 ) (350,078 )
Prepaid expenses and other assets (69,843 ) (28,236 )
Accounts payable and accrued expenses 14,624
(10,655 )
Income tax receivable/payable, net (19,815 ) (23,550 )
Deferred revenue and other liabilities 435,173
395,171
Net cash provided by operating activities 144,783
195,970
Cash flows from investing activities
Purchase of property and equipment (134,629 ) (132,904 )
Expenditures for deferred costs (12,712 ) (13,996 )
Receipts from sale of subsidiary and property and equipment 1,180
553,860
Property insurance recoveries 370
1,431
Settlement of derivatives related to sale of subsidiaries —
(5,663 )
Business acquisitions, net of cash acquired (835 ) —
Payments from related parties 349
1,634
Change in restricted cash and investments (3,921 ) (12,032 )
Net cash (used in) provided by investing activities (150,198 ) 392,330
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of original issue discount 2,349,673
513,014
Payments on long-term debt (2,695,511 ) (1,037,591 )
Payments of deferred purchase price for acquisitions (93,813 ) (9,574 )
Payments to purchase noncontrolling interests —
(25,665 )
Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs 55,290
—
Payment of dividends on Series A Preferred Stock and to noncontrolling interests (5,252 ) (550 )
Proceeds from initial public offering, net of issuance costs 456,359
—
Proceeds from exercise of stock options —
252
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options (1,725 ) (1,346 )
Payments of debt issuance costs (11,298 ) (10,593 )
Noncontrolling interest holder's loan to subsidiaries 943
816
Distributions to noncontrolling interest holders (847 ) (1,447 )
Net cash provided by (used in) financing activities 53,819
(572,684 )
Effects of exchange rate changes on cash 26,127
7,182
Change in cash included in current assets held for sale (34,534 ) —
Net change in cash and cash equivalents 39,997
22,798
Cash and cash equivalents at beginning of period 464,965
458,673
Cash and cash equivalents at end of period $ 504,962
$ 481,471




For the nine months ended September 30,	2019			2018
	(Unaudited)			(Unaudited)
Net income	$	877,087		$	298,814
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax of $0 for both periods	(22,841		)	(166,052		)
Unrealized (loss) gain on derivative instruments, net of tax of $0 for both periods	(7,950		)	11,776
Minimum pension liability adjustment, net of tax of $0 for both periods	4,531			376
Total other comprehensive loss	(26,260		)	(153,900		)
Comprehensive income	850,827			144,914
Net comprehensive loss (income) attributable to noncontrolling interests	1,089			(719		)
Comprehensive income attributable to Laureate Education, Inc.	$	851,916		$	144,195

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, 2019			December 31, 2018
Assets	(Unaudited)			(Unaudited)
Current assets:
Cash and cash equivalents (includes VIE amounts of $163,413 and $158,387, see Note 2)	$	323,930		$	387,780
Restricted cash	183,819			195,792
Receivables:
Accounts and notes receivable	533,000			373,855
Other receivables	11,066			11,357
Allowance for doubtful accounts	(172,677		)	(159,931		)
Receivables, net	371,389			225,281
Income tax receivable	49,439			18,515
Prepaid expenses and other current assets	64,016			52,079
Current assets held for sale	131,606			337,686
Total current assets (includes VIE amounts of $414,476 and $483,613, see Note 2)	1,124,199			1,217,133
Notes receivable, net	12,823			2,397
Property and equipment:
Land	228,457			234,826
Buildings	654,126			645,177
Furniture, equipment and software	972,864			952,117
Leasehold improvements	316,468			356,660
Construction in-progress	49,101			60,919
Accumulated depreciation and amortization	(1,029,619		)	(974,358		)
Property and equipment, net	1,191,397			1,275,341
Operating lease right-of-use assets, net	871,746			—
Land use rights, net	1,578			1,552
Goodwill	1,677,392			1,707,089
Other intangible assets:
Tradenames	1,116,189			1,126,244
Other intangible assets, net	1,697			25,429
Deferred costs, net	69,841			66,835
Deferred income taxes	134,074			136,487
Derivative instruments	—			3,259
Other assets	175,204			172,673
Long-term assets held for sale	448,573			1,035,197
Total assets (includes VIE amounts of $1,053,534 and $1,196,813, see Note 2)	$	6,824,713		$	6,769,636

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, 2019			December 31, 2018
Liabilities and stockholders' equity	(Unaudited)			(Unaudited)
Current liabilities:
Accounts payable	$	69,887		$	65,357
Accrued expenses	260,102			222,162
Accrued compensation and benefits	166,430			194,678
Deferred revenue and student deposits	464,340			193,226
Current portion of operating leases	91,919			—
Current portion of long-term debt and finance leases	119,932			100,818
Current portion of due to shareholders of acquired companies	11,502			23,820
Income taxes payable	29,038			17,864
Derivative instruments	11			4,021
Other current liabilities	26,413			46,621
Current liabilities held for sale	136,634			321,520
Total current liabilities (includes VIE amounts of $221,910 and $207,977, see Note 2)	1,376,208			1,190,087
Long-term operating leases, less current portion	800,828			—
Long-term debt and finance leases, less current portion	1,158,350			2,593,094
Due to shareholders of acquired companies, less current portion	9,956			21,571
Deferred compensation	11,697			12,778
Income taxes payable	82,182			90,087
Deferred income taxes	224,907			217,558
Derivative instruments	—			6,656
Other long-term liabilities	159,260			213,600
Long-term liabilities held for sale	158,501			358,863
Total liabilities (includes VIE amounts of $344,301 and $274,744, see Note 2)	3,981,889			4,704,294
Redeemable noncontrolling interests and equity	11,944			14,396
Stockholders' equity:
Preferred stock, par value $0.001 per share – 49,889 shares authorized as of September 30, 2019 and December 31, 2018, respectively, no shares issued and outstanding as of September 30, 2019 and December 31, 2018	—			—
Class A common stock, par value $0.004 per share – 700,000 shares authorized, 133,904 shares issued and 127,754 shares outstanding as of September 30, 2019 and 107,450 shares issued and outstanding as of December 31, 2018	535			430
Class B common stock, par value $0.004 per share – 175,000 shares authorized, 90,864 shares issued and outstanding as of September 30, 2019 and 116,865 shares issued and outstanding as of December 31, 2018	363			467
Additional paid-in capital	3,710,145			3,703,796
Retained earnings (accumulated deficit)	375,634			(530,919		)
Accumulated other comprehensive loss	(1,138,388		)	(1,112,695		)
Treasury stock at cost	(104,849		)	—
Total Laureate Education, Inc. stockholders' equity	2,843,440			2,061,079
Noncontrolling interests	(12,560		)	(10,133		)
Total stockholders' equity	2,830,880			2,050,946
Total liabilities and stockholders' equity	$	6,824,713		$	6,769,636

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,	2019			2018
Cash flows from operating activities	(Unaudited)			(Unaudited)
Net income	$	877,087		$	298,814
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	146,284			189,961
Amortization of operating lease right-of-use assets	95,566			—
Loss on impairment of assets	25,470			10,030
Gain on sales of subsidiaries and disposal of property and equipment, net	(814,202		)	(292,999		)
Gain on derivative instruments	(8,260		)	(92,749		)
(Payments for) proceeds from settlement of derivative contracts	(8,233		)	14,117
Loss on debt extinguishment	26,901			7,481
Non-cash interest expense	3,386			14,651
Non-cash share-based compensation expense	9,581			10,492
Bad debt expense	80,957			83,029
Deferred income taxes	(3,107		)	(389		)
Unrealized foreign currency exchange loss	8,434			53,731
Non-cash loss (gain) from non-income tax contingencies	5,196			(843		)
Other, net	(6,849		)	(11,607		)
Changes in operating assets and liabilities:
Receivables	(273,830		)	(288,747		)
Prepaid expenses and other assets	(56,726		)	(50,919		)
Accounts payable and accrued expenses	(14,102		)	(6,263		)
Income tax receivable/payable, net	(39,734		)	(10,084		)
Deferred revenue and other liabilities	258,449			428,664
Net cash provided by operating activities	312,268			356,370
Cash flows from investing activities
Purchase of property and equipment	(102,147		)	(150,458		)
Expenditures for deferred costs	(12,086		)	(13,182		)
Receipts from sales of discontinued operations, net of cash sold, property and equipment and other	1,141,695			375,792
Settlement of derivatives related to sale of discontinued operations and net investment hedge	12,866			(9,960		)
Proceeds from corporate-owned life insurance and property insurance recoveries	—			24,641
Business acquisitions, net of cash acquired	(1,205		)	—
Payments from (to) related parties	84			(8		)
Proceeds from sale of investment	11,473			—
Net cash provided by investing activities	1,050,680			226,825
Cash flows from financing activities
Proceeds from issuance of long-term debt, net of original issue discount	724,074			383,594
Payments on long-term debt	(2,189,779		)	(838,542		)
Payments of deferred purchase price for acquisitions	(19,787		)	(17,588		)
Payments to purchase noncontrolling interests	(5,761		)	(127		)
Payment of dividends on Series A Preferred Stock	—			(11,103		)
Proceeds from exercise of stock options	1,714			—
Payments to repurchase common stock	(87,921		)	—
Withholding of shares to satisfy tax withholding for vested stock awards and exercised stock options	(1,509		)	(1,744		)
Payments of debt issuance costs	(6,557		)	(490		)
Distributions to noncontrolling interest holders	(2,032		)	(912		)
Net cash used in financing activities	(1,587,558		)	(486,912		)
Effects of exchange rate changes on Cash and cash equivalents and Restricted cash	(8,808		)	(4,534		)
Change in cash included in current assets held for sale	157,595			(41,233		)
Net change in Cash and cash equivalents and Restricted cash	(75,823		)	50,516
Cash and cash equivalents and Restricted cash at beginning of period	583,572			525,745
Cash and cash equivalents and Restricted cash at end of period	$	507,749		$	576,261

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

Laureate Education, Inc. and Subsidiaries

Notes to Consolidated Financial Statements ~~(Unaudited)~~

(Dollars and shares in thousands)

Note 1. Description of Business

Laureate Education, Inc. and subsidiaries (hereinafter Laureate, we, us, our, or the Company) provide higher education programs and services to students through an international network of licensed universities and higher education institutions (institutions). Laureate's programs are provided through institutions that are campus-based and internet-based, or through electronically distributed educational programs (online). On October 1, 2015, we redomiciled in Delaware as a public benefit corporation as a demonstration of our long-term commitment to our mission to benefit our students and society.

~~On February 6, 2017, the~~ The Company completed anits initial public offering (IPO) ofon February 6, 2017 and its shares ~~of its Class A common stock, a newly established class of the Company’s common stock of which 700,000 shares were authorized and, as of February 1, 2017, the Company's shares became~~are listed on the Nasdaq Global Select Market under the symbol ‘‘~~LAUR’~~LAUR.’~~. The Company sold 35,000 shares of its Class A common stock in the IPO at a price of $14.00 per share, resulting in net proceeds to~~’

Discontinued Operations

On August 9, 2018, the Company ~~after deducting underwriting discounts~~announced the divestiture of additional subsidiaries located in Europe, Asia and commissions and offering expenses payable by us, of $456,359. On January 31, 2017, in connection with our IPO, our Amended and Restated Certificate of Incorporation was accepted for filing by the Secretary of State of the State of Delaware, and effective upon such filing, a 4 to 1 reverse stock split for our common stock was consummated and each share of our common stock then outstanding was automatically reclassified into one fourth of one share of Class B Common Stock, a newly established class of the Company’s common stock, with any resulting fractional shares rounded down to the next whole share. These financial statements reflect the reverse stock split.

As previously disclosed in our Quarterly Report on Form 10-Q for the period ended June 30, 2017, and as further discussed in Note 6, Business and Geographic Segment Information, effective August 1, 2017, we changed our operating segments in order to realign our segments according to how our chief operating decision maker now allocates resources and assesses performance. The segment changes resulted in Laureate increasing its number of operating segments from three to six, and is consistent with our goal of flattening our organizational structure to improve decision speed and operating effectiveness.

The change includes the creation of three operating segments (Brazil, Mexico and Andean & Iberian) from the previous Latin America (LatAm) segment. Our institutions in Spain and Portugal (Iberian) have moved from the Europe, Middle East, Africa and Asia Pacific (EMEAA) segment and combined with our institutions in Chile and Peru to form the Andean & Iberian segment. In addition, our institutions in Central America, which ~~were previously part of the LatAm segment, have combined with our campus-based institutions~~are included in the ~~United States, which were previously part~~Rest of ~~the GPS segment, to form the~~World (formerly called EMEAA), Andean (formerly called Andean & Iberian), and Central America ~~and~~& U.S. Campuses ~~segment. The~~segments. Previously, the Company had announced the divestiture of certain subsidiaries in the Rest of World and Central America & U.S. Campuses segments. After completing all of these announced divestitures, the Company’s remaining principal markets will be Brazil, Chile, Mexico and Peru, along with the Online & Partnerships segment ~~consists~~and the institutions in Australia and New Zealand. This represents a strategic shift that has a major effect on the Company's operations and financial results. Accordingly, all of the ~~online institutions~~divestitures that are part of this strategic shift, including the divestitures announced on August 9, 2018 and those announced previously, as well as the Company's operations in the Kingdom of Saudi Arabia that were ~~previously part of~~managed under a contract that expired on August 31, 2019 and was not renewed, are now accounted for as discontinued operations for all periods presented in accordance with Accounting Standards Codification (ASC) 205-20, ‘‘Discontinued Operations’’ (ASC 205). See Note 4, Discontinued Operations and Assets Held for Sale, for more information. Unless indicated otherwise, the ~~GPS segment. In summary, our six operating segments are as follows:~~

~~Brazil;~~

~~Mexico;~~

~~Andean & Iberian;~~

~~Central America & U.S. Campuses;~~

~~EMEAA; and~~

~~Online & Partnerships.~~

~~This change has been reflected~~information in the ~~quarterly segment information beginning in~~footnotes to the ~~third quarter of 2017, the period in which the change occurred. As required, the 2016 segment information that is presented for comparative purposes has also been revised~~Consolidated Financial Statements relates to ~~reflect this change.~~continuing operations.

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, these financial statements include all adjustments considered necessary to present a fair statement of our consolidated results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. These unaudited Consolidated Financial Statements should be read in conjunction with Laureate's audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2018 (the ~~2016~~2018 Form 10-K).

Note 2. Significant Accounting Policies

The Variable Interest Entity (VIE) Arrangements

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

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

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

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Selected Statements of Operations information:
Revenues, by segment:
Brazil $ 11
$ —
$ 57
$ —
Mexico —
—
—
—
Andean & Iberian 114,494
116,839
300,385
257,327
Central America & U.S. Campuses 16,350
15,113
47,362
44,088
EMEAA 42,662
41,919
176,177
187,454
Revenues 173,517
173,871
523,981
488,869

Depreciation and amortization 12,697
13,422
38,171
39,190

Operating (loss) income, by segment:
Brazil (23 ) (17 ) (30 ) (60 )
Mexico (163 ) (105 ) (516 ) (492 )
Andean & Iberian 6,584
12,365
(3,567 ) (29,625 )
Central America & U.S. Campuses 910
406
1,873
212
EMEAA (11,510 ) (14,606 ) 8,377
5,075
Operating (loss) income (4,202 ) (1,957 ) 6,137
(24,890 )

Net income (loss) 378
1,563
23,418
(18,517 )
Net income (loss) attributable to Laureate Education, Inc. 1,265
2,707
22,284
(18,474 )



	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019			2018
Selected Statements of Operations information:
Revenues, by segment:
Brazil	$	—		$	—		$	—		$	—
Mexico	—			4			—			89
Andean	120,746			119,884			325,668			325,423
Revenues	120,746			119,888			325,668			325,512

Depreciation and amortization	6,521			6,163			19,507			19,398

Operating income (loss), by segment:
Brazil	81			(16		)	46			(56		)
Mexico	(96		)	(121		)	(292		)	(349		)
Andean	23,576			12,954			40,875			7,714
Operating income	23,561			12,817			40,629			7,309

Net income	25,510			18,812			43,094			22,860
Net income attributable to Laureate Education, Inc.	25,510			18,812			43,094			22,860

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


	For the three months ended September 30,					For the nine months ended September 30,						For the three months ended September 30,						For the nine months ended September 30,
	2017			2016		2017			2016			2019			2018			2019		2018
Net (loss) income attributable to Laureate Education, Inc.:
Net income (loss) attributable to Laureate Education, Inc.:
Variable interest entities	$	1,265		$	2,707	$	22,284		$	(18,474	)	$	25,510		$	18,812		$	43,094	$	22,860
Other operations	49,968			61,132		264,644			387,008			33,432			21,564			687,966		241,920
Corporate and eliminations	(149,192		)	22,478		(391,308		)	(37,995		)	(154,168		)	(135,165		)	146,549		33,719
Net (loss) income attributable to Laureate Education, Inc.	$	(97,959	)	$	86,317	$	(104,380	)	$	330,539		$	(95,226	)	$	(94,789	)	$	877,609	$	298,499

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

Selected Consolidated Balance Sheet amounts for these VIEs were as follows:



	September 30, 2019				December 31, 2018
	VIE		Consolidated		VIE		Consolidated
Balance Sheets data:
Cash and cash equivalents	$	163,413	$	323,930	$	158,387	$	387,780
Current assets held for sale	17,586		131,606		183,880		337,686
Other current assets	233,477		668,663		141,346		491,667
Total current assets	414,476		1,124,199		483,613		1,217,133

Goodwill	162,833		1,677,392		168,473		1,707,089
Tradenames	63,731		1,116,189		66,929		1,126,244
Other intangible assets, net	—		1,697		—		25,429
Operating lease right-of-use assets, net	69,934		871,746		—		—
Long-term assets held for sale	69,603		448,573		165,087		1,035,197
Other long-term assets	272,957		1,584,917		312,711		1,658,544
Total assets	1,053,534		6,824,713		1,196,813		6,769,636

Current liabilities held for sale	12,337		136,634		101,320		321,520
Other current liabilities	209,573		1,239,574		106,657		868,567
Long-term operating leases, less current portion	59,948		800,828		—		—
Long-term liabilities held for sale	30,833		158,501		42,265		358,863
Long-term debt and other long-term liabilities	31,610		1,646,352		24,502		3,155,344
Total liabilities	344,301		3,981,889		274,744		4,704,294

Total stockholders' equity	709,233		2,830,880		922,069		2,050,946
Total stockholders' equity attributable to Laureate Education, Inc.	709,233		2,843,440		921,747		2,061,079

On January 24, 2018, a new Higher Education Law (the New Law) was passed by the Chilean Congress. Among other things, the New Law prohibits conflicts of interests and related party transactions involving universities and their controlling parties, with certain exceptions. These exceptions include the provision of services that are educational in nature or essential for the university’s purposes.

September 30, 2017 December 31, 2016
VIE Consolidated VIE Consolidated
Balance Sheets data:
Cash and cash equivalents $ 265,494
$ 504,962
$ 169,074
$ 464,965
Current assets held for sale 2,723
92,248
—
—
Other current assets 281,504
962,689
153,136
650,836
Total current assets 549,721
1,559,899
322,210
1,115,801

Goodwill 193,669
2,028,286
181,669
1,934,464
Tradenames 109,394
1,330,302
104,117
1,307,633
Other intangible assets, net —
43,206
—
46,700
Long-term assets held for sale 28,306
279,801
—
—
Other long-term assets 676,960
2,541,070
701,117
2,657,872
Total assets 1,558,050
7,782,564
1,309,113
7,062,470

Current liabilities held for sale 6,855
158,280
—
—
Current liabilities 497,470
1,736,699
320,922
1,440,232
Long-term liabilities held for sale 11,239
73,199
—
—
Long-term debt and other long-term liabilities 91,332
3,915,249
103,375
4,601,013
Total liabilities 606,896
5,883,427
424,297
6,041,245

Total stockholders' equity 951,154
1,582,229
884,816
664,392
Total stockholders' equity attributable to Laureate Education, Inc. 932,384
1,551,678
866,997
632,210

The ~~amounts classified as held-for-sale assets~~New Law established a Superintendency of Higher Education, with authority to regulate institutions of higher education and ~~liabilities at September 30, 2017~~promulgate regulations and procedures implementing the New Law. As of May 29, 2019, the New Law’s provisions regarding related party transactions came into force; however, the Superintendent has not issued any further interpretive guidance or regulations. Immediately prior to these provisions coming into force, each of the Chilean non-profit universities and the relevant Laureate services provider reached an agreement to terminate the prior network services agreement in favor of an open bidding process, wherein unrelated third parties and Laureate-related providers were invited to compete in the ~~table above relate to VIEs~~provision of the range of services that are ~~included~~essential to the fulfillment of each of their academic missions. The Chilean non-profit universities have completed substantially all of the bidding and contractual processes subsequent to the May 2019 contract terminations. The Company participated in these open bid processes, conducted by a third party, and was judged to have submitted the superior bid in many of them. Awarded contracts that do not need any approval by the Superintendent should enter into force during the fourth quarter, and contracts that need approval of the Superintendent may also enter into force during the fourth quarter. Within the ordinary regulatory course of supervision, the Company and the Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law. We do not believe that the New Law will change our relationship with our two tech/voc institutions in Chile that are for-profit entities. Additionally, we will continue to evaluate our accounting treatment of the Chilean non-profit universities to determine whether we can continue to consolidate them. Our continuing evaluation of the impact of the New Law may result in changes to our expectations due to changes in our ~~EMEAA segment~~interpretations of the law, assumptions used, and ~~are subject to finalization. Refer to Note 4, Assets Held for Sale, for further discussion.~~additional guidance that may be issued.

Recently Issued Accounting Standards Not Yet Adopted

Accounting Standards Update (ASU) No. ~~2017-12(~~2016-13 (ASU 2016-13), Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-13, which sets forth a “current expected credit loss” (CECL) model and requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 applies to financial instruments that are not measured at fair value, including receivables that result from revenue transactions. This ASU is effective for Laureate beginning on January 1, 2020. While we are currently evaluating the effect that ASU 2016-13 will have on our Consolidated Financial Statements, we do not expect this guidance to have a material impact.

Recently Adopted Accounting Standards

ASU No. 2016-02 (ASU 2016-02), Leases (Topic 842)

On February 25, 2016, the FASB issued ASU 2016-02, which requires lessees to recognize on their balance sheet a right-of-use (ROU) asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of the lease payments. The asset is based on the liability, subject to adjustment, such as for initial direct costs and uneven rent payments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases result in straight-line expense (similar to operating leases prior to adoption of ASU 2016-02) while finance leases will result in a front-loaded expense pattern (similar to capital leases prior to adoption of ASU 2016-02).

Laureate adopted ASU 2016-02 as of January 1, 2019 under a modified retrospective method. The standard provided companies with an additional, optional transition method that allowed entities to prospectively apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We elected this optional transition method. In accordance with ASC Topic 842 we also elected the package of practical expedients, which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment. We elected the practical expedient to combine our lease and related nonlease components for our building leases.

Adopting ASU 2016-02 had a material impact on our Consolidated Balance Sheet as we recorded significant asset and liability balances in connection with our leased properties. The most significant impacts to our Consolidated Financial Statements of adopting this standard are as follows:

The recognition of ROU assets and lease liabilities for operating leases, which totaled $871,746 and $892,747, respectively, as of September 30, 2019;

An increase in 2019 rent expense of approximately $13,000 for continuing operations primarily related to build-to-suit arrangements where Laureate was deemed to be the owner of the construction. Upon adoption of this standard, these arrangements were classified on the balance sheet as operating leases and the related ROU asset is being amortized to rent expense rather than depreciation expense; and

A cumulative-effect adjustment to retained earnings upon adoption of $28,944, which is primarily attributable to the reclassification into retained earnings of deferred gain liabilities related to sale-leaseback transactions that were classified as operating leases upon adoption.

ASU No. 2017-12 (ASU 2017-12), Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities

On August 28, 2017, the ~~Financial Accounting Standards Board (FASB)~~FASB issued ASU 2017-12, which contains significant amendments to the hedge accounting model. The new guidance is intended to simplify the application of hedge accounting and should allow for more hedging strategies to qualify for hedge accounting. ASU 2017-12 also amends the presentation and disclosure requirements and changes how companies assess effectiveness. Public business entities like Laureate will have until the end of the first quarter in which a hedge is designated to perform an initial assessment of a hedge’s effectiveness. After initial qualification, the new guidance permits a qualitative effectiveness assessment for certain hedges instead of a quantitative test, such as a regression analysis, if the company can reasonably support an expectation of high effectiveness throughout the term of the hedge. An initial quantitative test to establish that the hedge relationship is highly effective is still required. ~~The effective date of~~We adopted this ASU ~~for Laureate is~~on January 1, ~~2019. Early adoption is permitted in any interim period or fiscal year before~~2019 and the effective date. However, if the guidance is early adopted in an interim period, any adjustments would be reflected as of the beginning of the fiscal year that includes that interim period. Laureate is evaluating whether to early adopt this ASU as of January 1, 2018.impact was not material.

ASU No. ~~2017-04~~2018-15 (ASU ~~2017-04), Intangibles - Goodwill~~2018-15) Intangibles-Goodwill and ~~Other (Topic 350): Simplifying the Test for Goodwill Impairment~~Other-Internal-Use Software (Subtopic 350-40)

In ~~January 2017,~~August 2018, the FASB issued ASU ~~2017-04~~2018-15, which addresses the accounting for implementation costs associated with a hosted service. The standard provides amendments to align the requirements for capitalizing implementation costs incurred in ~~order to simplify the test for goodwill impairment by eliminating Step 2, which measures~~ a ~~goodwill impairment loss by comparing the implied fair value of~~hosting arrangement that is a ~~reporting unit's goodwill~~service contract with the ~~carrying amount~~

ofrequirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that ~~goodwill. Under the amendments in this~~include an internal use software license). Laureate elected to early adopt ASU an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for Laureate beginning2018-15 on January 1, ~~2020~~2019, and ~~early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are still evaluating~~ the impact ~~of ASU 2017-04~~ on our Consolidated Financial Statements was not material.

Note 3. Revenue

Revenue Recognition

Laureate's revenues primarily consist of tuition and ~~whether we will early adopt this ASU for goodwill impairment tests performed on testing dates after January 1, 2018.~~

~~ASU No. 2016-02 (ASU 2016-02), Leases (Topic 842)~~

~~On February 25, 2016, the FASB issued ASU 2016-02. Lessees will need~~educational service revenues. We also generate other revenues from student fees, dormitory/residency fees and other education-related activities. These other revenues are less material to ~~recognize on their balance sheet~~our overall financial results and have a ~~right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal~~tendency to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs and uneven rent payments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Classification will be based on criteria thattrend with tuition revenues. Revenues are largely similar to those applied in current lease accounting, but without explicit bright lines. The standard is effective for Laureate beginning January 1, 2019. The new standard must be adopted using a modified retrospective transition and provides for certain practical expedients. Transition will require applicationrecognized when control of the new guidance at the beginning of the earliest comparative period presented. We have completed our diagnostic assessment and have established a cross-functional implementation team which is in the process of identifying changes to our accounting policies, business processes, systems and internal controls in preparation for the implementation. We anticipate that ASU 2016-02 will have a material impact on our Consolidated Balance Sheets, as we will record significant asset and liability balances in connection with our leased properties. We are still evaluating the impact to our Consolidated Statements of Operations. We do not currently plan to early adopt this ASU.

~~ASU No. 2014-09, (ASU 2014-09), Revenue from Contracts with Customers (Topic 606)~~

~~On May 28, 2014, the FASB issued ASU 2014-09, which supersedes the revenue recognition requirements in ASC 605,~~ ~~‘‘Revenue Recognition’’~~ ~~and most industry-specific guidance. The core principle of ASU 2014-09 is that a company will recognize revenue when it transfers~~ promised goods or services is transferred to our customers in an amount that reflects the consideration ~~to which the company expects~~we expect to be entitled to in exchange for those goods or services. ~~On July 9, 2015,~~These revenues are recognized net of scholarships and other discounts, refunds, waivers and the ~~FASB deferred~~fair value of any guarantees made by Laureate related to student financing programs. Laureate's institutions have various billing and academic cycles.

We determine revenue recognition through the effective date of ASU 2014-09. The new revenue standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 (January 1, 2018 for Laureate) and allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approachfive-step model prescribed by ASC Topic 606, Revenue from Contracts with ~~the cumulative effect of initial application~~Customers, as follows:

•Identification of the revised guidance recognized at the date of initial application. We have completed our diagnostic assessment and are finalizing policies and processes relating to this ASU, which we plan to adopt effective January 1, 2018. We do not expect the adoption of this ASU to result incontract, or contracts, with a ~~significant change to our method of recognizing tuition revenues; however, we are still evaluating and quantifying the potential impact of other aspects~~customer;

•Identification of the ~~standard, including variable consideration~~performance obligations in the contract;

•Determination of the transaction price;

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

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

We assess collectibility on a portfolio basis prior to ~~obtain~~recording revenue. Generally, students cannot re-enroll for the next academic session without satisfactory resolution of any past-due amounts. If a ~~contract.~~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 ~~plan to elect modified retrospective adoption of this new standard.~~

~~Recently Adopted Accounting Standards~~

~~ASU No. 2015-17 (ASU 2015-17), Income Taxes (Topic 740)~~

~~In November 2015, the FASB issued ASU 2015-17~~record refunds as a ~~part~~reduction of deferred revenue as applicable.

The following table shows the ~~Simplification Initiative~~components of Revenues by reportable segment and ~~in response to concerns that~~as a percentage of total net revenue for the current requirement that entities separate deferred income tax liabilities and assets into current and noncurrent amounts results in little or no benefit to users of the financial statements. The amendments in this ASU aim to simplify this presentation by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. ASU 2015-17 was effective for Laureate beginning January 1, 2017 and we adopted this guidance on a retrospective basis. Accordingly, as of September 30, 2017 all deferred tax assets and liabilities are classified as noncurrent and we reclassified current deferred tax assets and liabilities of approximately $110,000 and $6,000, respectively, as of December 31, 2016 to noncurrent.

~~ASU No. 2016-09 (ASU 2016-09), Compensation—Stock compensation (Topic 718): Improvements to Employee Share-based Payment Accounting~~

On March 30, 2016, the FASB issued ASU 2016-09 as part of its initiative to reduce complexity in accounting standards. The areas for simplification in this ASU involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement

of cash flows. The guidance was effective for Laureate beginning January 1, 2017. Laureate has elected to continue estimating forfeitures when determining the amount of share-based compensation expense to be recognized each period. The Company adopted this standard prospectively in the first quarter of 2017 and it did not have a material impact on our Consolidated Financial Statements.

~~Note 3. Acquisitions~~

~~During the nine~~three months ended September 30, ~~2017, Laureate consummated~~2019 and 2018:



	Brazil			Mexico			Andean			Rest of World			Online & Partnerships			Corporate⁽¹⁾			Total
2019
Tuition and educational services	$	200,876		$	156,123		$	322,918		$	56,277		$	173,351		$	—		$	909,545		118	%
Other	2,384			27,539			23,767			1,720			12,384			(1,502		)	66,292			9	%
Gross revenue	203,260			183,662			346,685			57,997			185,735			(1,502		)	975,837			126	%
Less: Discounts / waivers / scholarships	(89,205		)	(37,872		)	(39,415		)	(5,412		)	(30,234		)	—			(202,138		)	(26	)%
Total	$	114,055		$	145,790		$	307,270		$	52,585		$	155,501		$	(1,502	)	$	773,699		100	%
2018
Tuition and educational services	$	196,670		$	158,602		$	312,274		$	49,829		$	180,063		$	—		$	897,438		115	%
Other	2,272			23,676			22,594			2,204			13,767			(3,694		)	60,819			8	%
Gross revenue	198,942			182,278			334,868			52,033			193,830			(3,694		)	958,257			123	%
Less: Discounts / waivers / scholarships	(77,853		)	(33,953		)	(35,255		)	(4,332		)	(28,609		)	—			(180,002		)	(23	)%
Total	$	121,089		$	148,325		$	299,613		$	47,701		$	165,221		$	(3,694	)	$	778,255		100	%

⁽¹⁾ Includes the ~~business acquisition outlined below, which is included in our Consolidated Financial Statements commencing from~~elimination of intersegment revenues.

The following table shows the ~~date~~components of ~~acquisition.~~

~~Australia~~

~~In June 2017, our EMEAA~~Revenues by reportable segment ~~acquired the assets~~ and business of the nursing division of Careers Australia (CA Nursing), a vocational institution in Australia, for a cash purchase price of AUD 1,107 (US $835 at the date of acquisition) plus debt assumed of AUD 9,850 (US $7,433 at the acquisition date). We account~~ed for this acquisition~~ as a ~~business combination. For this acquisition, Revenues,~~ ~~Operating income~~ ~~and~~ ~~Net (loss) income attributable to Laureate Education, Inc.~~ ~~were immaterial~~percentage of total net revenue for the nine months ended September 30, ~~2017.~~

~~The following table summarizes the estimated fair value of all assets acquired~~2019 and ~~the liabilities assumed at the date of acquisition:~~2018:

CA Nursing
Australia
Property and equipment $ 9,581
Goodwill 3,099
Other intangible assets 3,293
Total assets acquired 15,973
Current portion of long-term debt 166
Other current liabilities 5,960
Long-term debt, less current portion 7,267
Other long-term liabilities 1,745
Total liabilities 15,138
Net assets acquired attributable to Laureate Education, Inc. 835
Debt assumed 7,433
Net assets acquired attributable to Laureate Education, Inc. plus debt assumed $ 8,268

Net assets acquired $ 835
Net cash paid at acquisition $ 835



	Brazil			Mexico			Andean			Rest of World			Online & Partnerships			Corporate⁽¹⁾			Total
2019
Tuition and educational services	$	735,889		$	499,013		$	909,292		$	145,143		$	531,990		$	—		$	2,821,327		119	%
Other	6,751			75,201			62,377			5,662			37,713			(2,066		)	185,638			8	%
Gross revenue	742,640			574,214			971,669			150,805			569,703			(2,066		)	3,006,965			127	%
Less: Discounts / waivers / scholarships	(321,511		)	(109,505		)	(102,462		)	(13,601		)	(92,712		)	—			(639,791		)	(27	)%
Total	$	421,129		$	464,709		$	869,207		$	137,204		$	476,991		$	(2,066	)	$	2,367,174		100	%
2018
Tuition and educational services	$	741,945		$	499,876		$	889,290		$	137,138		$	541,681		$	—		$	2,809,930		117	%
Other	7,974			68,905			59,523			6,652			40,500			(9,418		)	174,136			7	%
Gross revenue	749,919			568,781			948,813			143,790			582,181			(9,418		)	2,984,066			124	%
Less: Discounts / waivers / scholarships	(280,439		)	(104,913		)	(104,600		)	(12,378		)	(83,974		)	—			(586,304		)	(24	)%
Total	$	469,480		$	463,868		$	844,213		$	131,412		$	498,207		$	(9,418	)	$	2,397,762		100	%

⁽¹⁾ Includes the elimination of intersegment revenues.

Contract Balances

The ~~amounts~~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 ~~2017 acquisition are provisional~~accompanying Consolidated Balance Sheets. Total accounts receivable from our contracts with students were $533,000 and ~~Laureate is~~$373,855 as of September 30, 2019 and December 31, 2018, respectively. The increase in the ~~process~~contract assets balance at September 30, 2019 compared to December 31, 2018 is primarily driven by our 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 ~~finalizing~~$464,340 and $193,226 were included within the ~~amounts recorded~~Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018, respectively. The increase in the contract liability balance during the period ended September 30, 2019 is the result of semester billings and cash payments received in advance of satisfying performance obligations, offset by revenue recognized during that period. Revenue recognized for the ~~assets and liabilities primarily related to goodwill, intangible assets and deferred revenue. None~~nine months ended September 30, 2019 that was included in the contract liability balance at the beginning of the ~~goodwill related to the 2017 acquisition is expected to be deductible for income tax purposes.~~year was approximately $175,611.

Note 4. Discontinued Operations and Assets Held for Sale

As discussed in Note 1, Description of Business, on August 9, 2018, the Company announced that it planned to focus on its principal markets and would divest certain of its other markets. The ~~Company has identified certain subsidiaries that may not reach a scale~~principal markets that will ~~be meaningful~~remain (the Continuing Operations) include Brazil, Chile, Mexico, and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand. At the time of the announcement on August 9, 2018, the markets being divested by sale (the Discontinued Operations) included the institutions in Portugal and Spain, which were part of the Andean segment, all remaining institutions in the Central America & U.S. Campuses segment, and all remaining institutions in the Rest of World segment, except for ~~Laureate,~~Australia, New Zealand and ~~has undertaken~~the managed institutions in the Kingdom of Saudi Arabia and China. The institutions in the Kingdom of Saudi Arabiawere managed under a ~~process to sell~~contract that expired at the end of August 2019 and was not renewed. Accordingly, these ~~entities.~~institutions were disposed of other than by sale on August 31, 2019 and, beginning in the third quarter of 2019, have been included in Discontinued Operations for all periods presented. As of September 30, ~~2017, several subsidiaries~~2019, 1 VIE institution in ~~our EMEAA segment met~~Honduras is included in the ~~criteria~~Discontinued Operations.

The divestitures are expected to create a more focused and simplified business model and generate proceeds that have been and will be used for ~~classification as held for sale under ASC 360-10-45-9, "Long-Lived Assets Classified as Held for Sale,"~~further repayment of long-term debt. The timing and ability to complete any of these transactions is uncertain and will be subject to market and other conditions, which may include regulatory approvals and consents of third parties.

Summarized operating results and cash flows of the Discontinued Operations are presented in ~~addition to an asset group at a for-profit real estate subsidiary in our Andean & Iberian segment. Accordingly, as of September 30, 2017,~~ the following tables:



For the three months ended September 30,	2019			2018
Revenues	$	65,316		$	160,278
Depreciation and amortization	339			6,991
Share-based compensation expense	119			173
Loss on impairment of assets	25,000			—
Other direct costs	64,681			188,284
Operating loss	(24,823		)	(35,170		)
Other non-operating expense	(252		)	(5,674		)
Pretax loss of discontinued operations	(25,075		)	(40,844		)
Income tax (expense) benefit	(2,062		)	2,939
Loss from discontinued operations, net of tax	$	(27,137	)	$	(37,905	)


For the nine months ended September 30,	2019			2018
Revenues	$	446,002		$	673,975
Depreciation and amortization	1,176			28,776
Share-based compensation expense	387			920
Loss on impairment of assets	25,000			—
Other direct costs	343,317			561,528
Operating income	76,122			82,751
Other non-operating income (loss)	6,276			(18,794		)
Pretax income of discontinued operations	82,398			63,957
Income tax expense	(15,926		)	(40,406		)
Income from discontinued operations, net of tax	$	66,472		$	23,551

Operating cash flows of discontinued operations	$	45,237		$	155,367
Investing cash flows of discontinued operations	$	(16,007	)	$	(40,043	)
Financing cash flows of discontinued operations	$	(44,984	)	$	(17,306	)

The assets and liabilities of ~~these disposal groups were~~the Discontinued Operations, which are subject to finalization, have been classified as held for sale as of September 30, 2019 and December 31, 2018, in accordance with ASC 205. The assets and liabilities are recorded at the lower of their carrying values ~~which were lower than~~or their estimated ~~'fair~~‘fair values less costs to ~~sell'. The Company expects~~sell.’ In addition to ~~begin receiving final offers on these entities~~the Discontinued Operations, Centro Universitário do Norte (UniNorte), a traditional higher education institution located in the ~~fourth quarter~~city of ~~2017,~~Manaus, Brazil, has also been classified as held for sale as of September 30, 2019 and ~~estimates that closing~~December 31, 2018. UniNorte is included in Continuing Operations as it is not part of the strategic shift described above. As described below, on April 16, 2019, the Company entered into an agreement to divest UniNorte and the sale ~~transactions will begin to occur in the first quarter~~ of ~~2018.~~UniNorte closed on November 1, 2019. See Note 21, Subsequent Events.

~~The amounts classified as held-for-sale assets and liabilities are subject to finalization.~~ The carrying amounts of the major classes of ~~long-lived~~ assets and liabilities that were ~~reclassified to~~classified as held for sale ~~as of September 30, 2017~~ are presented in the following tables:


			September 30, 2019		December 31, 2018
Assets of Discontinued Operations
Cash and cash equivalents			$	62,194	$	215,644
Receivables, net			42,277		62,576
Property and equipment, net	$	213,593	259,884		671,121
Goodwill	32,330		9,613		131,329
Tradenames	16,534		6,893		124,932
Operating lease right-of-use assets, net			66,673		—
Other assets	17,344		61,056		106,326
Long-term assets held for sale	$	279,801
Subtotal: assets of Discontinued Operations			$	508,590	$	1,311,928

Other assets classified as held for sale: UniNorte Brazil
Receivables, net			$	6,969	$	6,983
Property and equipment, net			13,193		16,726
Goodwill			14,083		15,165
Tradenames			7,565		8,146
Operating lease right-of-use assets, net			15,244		—
Other assets			6,161		13,935

Other land and buildings classified as held for sale
Property and equipment, net			8,374		—
Subtotal: other assets classified as held for sale			$	71,589	$	60,955

Total assets held for sale			$	580,179	$	1,372,883

Long-term debt, including current portion $ 34,798
Other liabilities 196,681
Total liabilities held for sale $ 231,479



	September 30, 2019		December 31, 2018
Liabilities of Discontinued Operations
Deferred revenue and student deposits	$	53,885	$	115,969
Operating leases, including current portion	71,411		—
Long-term debt and finance leases, including current portion	56,054		279,612
Other liabilities	91,094		269,558
Subtotal: liabilities of Discontinued Operations	$	272,444	$	665,139

Other liabilities classified as held for sale: UniNorte Brazil
Deferred revenue and student deposits	$	1,768	$	469
Operating leases, including current portion	10,119		—
Long-term debt and finance leases, including current portion	2,250		5,370
Other liabilities	8,554		9,405
Subtotal: other liabilities classified as held for sale	$	22,691	$	15,244

Total liabilities held for sale	$	295,135	$	680,383

Sale Agreements Signed in 2019 and Pending Closure as of September 30, 2019

Agreement to Sell UniNorte

On April 16, 2019, Rede Internacional de Universidades Laureate Ltda., a limited business company organized under the ~~aggregate, revenues~~laws of Brazil (the UniNorte Seller), which is an indirect wholly owned subsidiary of the ~~disposal groups represented~~Company, entered into a Quota Assignment and Transfer Agreement (the UniNorte Agreement) with Cenesup - Centro Nacional de Ensino Superior Ltda., a limited liability company organized under the laws of Brazil (the UniNorte Purchaser), which is an indirect wholly owned subsidiary of Ser Educacional S.A., a company organized under the laws of Brazil (Ser). Pursuant to the UniNorte Agreement, the UniNorte Purchaser will purchase from the UniNorte Seller 100% of the quota capital of Sodecam - Sociedade de Desenvolvimento Cultural do Amazonas Ltda., a limited liability company organized under the laws of Brazil, which is the maintaining entity of UniNorte. The Company and Ser are also parties to the Agreement as guarantors of certain obligations of their respective subsidiaries.

The transaction enterprise value under the UniNorte Agreement is 194,800 Brazilian Reais (BRL) (or approximately ~~$159,000~~$46,600 as of September 30, 2019), which includes the assumption of net debt in the amount of approximately BRL 9,800 (or approximately $2,300 as of September 30, 2019). The transaction closed on November 1, 2019, following the completion of customary closing conditions, including approval by the Brazilian competition authorities.

Agreement to Sell NewSchool of Architecture and ~~$154,000~~Design, LLC (NSAD)

On June 14, 2019, the Company and Exeter Street Holdings, LLC, an indirect wholly owned subsidiary of ~~Laureate's~~the Company, entered into a membership interests purchase agreement with Ambow NSAD, Inc. and Ambow Education Holding, Ltd. (the NSAD Buyers) to sell 100% of the outstanding membership interests of NSAD to the NSAD Buyers for a purchase price of one dollar, subject to certain adjustments. In addition, under the terms of the agreement, the Company estimates that it will pay subsidies to the NSAD Buyers for continued operations and campus facilities of up to approximately $5,800. The closing of the sale is subject to regulatory approvals and other conditions precedent, which could take approximately six months from the date of the purchase agreement. NSAD is a higher education institution located in California that offers undergraduate and graduate degrees and non-degree certificates in design and construction management.

Other Matters

Inti Education Holdings Sdn. Bhd. (Inti Holdings)

As previously reported, on December 11, 2017, Exeter Street Holdings Sdn. Bhd., a Malaysia corporation (Exeter Street), and Laureate Education Asia Limited, a Hong Kong corporation (Laureate Asia), both of which are indirect wholly owned subsidiaries of the Company, entered into a sale purchase agreement (as amended on January 17, 2019, the Inti Agreement) with Comprehensive Education Pte. Ltd., a Singapore corporation (Comprehensive, the purchaser) that is an affiliate of Affinity Equity Partners, a private equity firm based in Hong Kong. Pursuant to the Inti Agreement, Comprehensive agreed to purchase from Exeter Street

all of the issued and outstanding shares in the capital of Inti Holdings, and Laureate Asia agreed to guarantee certain obligations of Exeter Street. Inti Holdings is the indirect owner of INTI University and Colleges, a higher education institution with 5 campuses in Malaysia.

The closing of the transaction under the Inti Agreement was subject to certain conditions, including approval by regulators in Malaysia, which approval was obtained on June 24, 2019. On June 25, 2019, the Company notified Comprehensive that the conditions precedent had been duly satisfied and scheduled closing for July 12, 2019. On July 9, 2019, Comprehensive notified the Company that it disagreed with the Company’s position that the conditions precedent had been satisfied and formally moved to terminate the Inti Agreement, an act viewed by the Company as a repudiatory breach of the Inti Agreement. The Company is currently evaluating all options and continues to classify Inti Holdings as a discontinued operation.

Note 5. Dispositions

Sale of the University of St. Augustine for Health Sciences, LLC (St. Augustine)

As previously disclosed in our 2018 Form 10-K, the sale of St. Augustine was completed on February 1, 2019. The total ~~revenues during~~transaction value under the sale agreement was $400,000. Upon completion of the sale, the Company received net proceeds of approximately $346,400, which included $11,700 of customary closing adjustments, and was net of $58,100 of debt assumed by the purchaser and fees of $7,200. The proceeds net of cash sold were approximately $301,800, which the Company used to repay outstanding indebtedness under its U.S. term loan and revolving credit facility. The Company recognized a gain on the sale of approximately $223,000, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, ~~2017~~2019.

Sale of Thailand Operations

As previously disclosed in our 2018 Form 10-K, on February 12, 2019, the Company completed the sale of its interests in Thai Education Holdings Company Limited, a Thailand corporation (TEDCO), and ~~2016, respectively.~~Far East Stamford International Co. Ltd. (FES), a Thailand corporation. TEDCO was the owner of a controlling interest in FES, which was the license holder for Stamford International University, which had 3 campuses in Thailand. The total purchase price was approximately $35,300, and net proceeds were approximately $26,400, net of debt assumed by the buyer and other customary closing adjustments and fees. Of the $26,400 in net proceeds, $22,200, or $18,800 net of cash sold, was received at closing. The balance of $4,200 was payable upon satisfaction of certain post-closing requirements; the first post-closing requirement was satisfied in May 2019 and the Company received $2,800, leaving a remaining receivable of $1,400. The Company recognized a gain on the sale of approximately $10,800, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, 2019.

Additional Gain on Sale of China Operations

As previously disclosed in our 2018 Form 10-K, on January 25, 2018, the Company completed the sale of LEI Lie Ying Limited (LEILY). A portion of the purchase price was held back and subject to deduction of any indemnifiable losses payable to the buyer pursuant to the sale purchase agreement. On January 25, 2019, Laureate received HKD 71,463 (approximately US $9,100 at date of receipt) for the second and final holdback payment, net of legal fees. Also, as of December 31, 2018, the Company had recorded a liability of approximately $14,300 related to loss contingencies for which the Company had indemnified the buyer. During the first quarter of 2019, the legal matter that this loss contingency related to was settled, with no cost to the Company. Accordingly, during the first quarter of 2019, the Company reversed the loss contingency and recognized additional gain on the sale of LEILY of approximately $13,700, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, 2019. The remaining liability recorded relates to certain legal fees. Additionally, at the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account and will be distributed to the Company pursuant to the terms and conditions of the escrow agreement. As of both September 30, 2019 and December 31, 2018, the Company has recorded a receivable of approximately $25,900 for the portion of the escrowed amount that the Company expects to receive.

Sale of Monash South Africa

On April 8, 2019, the Company completed the sale of its institution in South Africa, Monash South Africa, as well as the sale of the real estate associated with that institution. The transactions consisted of: (i) the transfer by Monash South Africa Limited (MSA), an Australia limited company that is an indirect 75%-owned subsidiary of the Company, to The Independent Institute of Education Limited (IIE), a South Africa limited company that is a subsidiary of ADvTECH Limited, of all of MSA’s assets and

certain of its operational liabilities for a sale price of 15,000 South African Rand (ZAR) (subject to customary adjustments) (or approximately $1,100 at the closing date) and (ii) the sale by LEI AMEA Investments B.V., a Netherlands limited company that is an indirect wholly owned subsidiary of the Company, of all of the shares of Laureate South Africa Pty. Ltd. (LSA), a South Africa limited company, to IIE for a net sale price of approximately ZAR 99,000 (subject to customary adjustments) (or approximately $7,000 at the closing date). In addition, IIE assumed debt of approximately $20,200. In the aggregate, including working capital adjustments, the Company received approximately $9,000 from the buyer, which approximated the amount of cash sold with the business. The Company recognized a gain for these transactions of approximately $2,300, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, 2019.

Sale of India Operations

On May 9, 2019, LEI Singapore Holdings Pte Limited, a Singapore corporation, Laureate I B.V., a Netherlands private limited company (Laureate I), and Laureate International B.V., a Netherlands private limited company (collectively, the India Sellers), all of which are indirect wholly owned subsidiaries of the Company, closed a transaction pursuant to the share purchase agreement (the India Agreement), among the India Sellers, Global University Systems India Bidco B.V., a Netherlands private limited liability company (the India Purchaser) and Global University Systems Holding B.V. (the India Purchaser Guarantor), a Netherlands private limited liability company. Pursuant to the India Agreement, the India Purchaser acquired from the India Sellers all of the issued and outstanding shares in the capital of Pearl Retail Solutions Private Limited, an India corporation (PRS), M-Power Energy India Private Limited (M-Power), an India corporation, and Data Ram Sons Private Limited (Data Ram), an India corporation. As a result of the closing of the transaction, the Company no longer consolidates its network institutions in India, including Creative Arts Education Society (CAES), the operator of Pearl Academy, and University of Petroleum and Energy Studies (UPES). In connection with the India Agreement, certain of the India Sellers also closed a separate transaction with the minority owners of PRS relating to the purchase by them of the minority owners’ 10% interest in PRS.

The total purchase price under the India Agreement was $145,600. The net proceeds received by the India Sellers, before the payment to the 10% minority owners and after transaction fees and taxes, including receipt in July 2019 of certain taxes withheld at closing, were approximately $145,800, or approximately $77,300 net of cash sold, which the Company used to repay indebtedness under its term loan that had a maturity date of April 2024 (the 2024 Term Loan). The Company recognized a gain for these transactions of approximately $19,500, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, 2019.

Sale of Spain and Portugal Operations

On May 31, 2019, Iniciativas Culturales de España S.L., a Spanish private limited liability company (ICE), and Laureate I, both of which are indirect wholly owned subsidiaries of the Company, closed a previously announced transaction pursuant to the sale and purchase agreement (the Spain and Portugal Sale Agreement) with Samarinda Investments, S.L., a Spanish limited liability company (Samarinda). Pursuant to the Spain and Portugal Sale Agreement, Samarinda acquired from ICE all of the issued and outstanding shares in the capital of each of Universidad Europea de Madrid, S.L.U., Iniciativas Educativas de Mallorca, S.L.U., Iniciativa Educativa UEA, S.L.U., Universidad Europea de Canarias, S.L.U., and Universidad Europea de Valencia, S.L.U. (together, the Spain Companies), and Samarinda acquired from Laureate I all of the issued and outstanding shares in the capital of Ensilis—Educação e Formação, Unipessoal, Lda. (the Portugal Company). Three of the Spain Companies are the entities that operate Universidad Europea de Madrid, Universidad Europea de Canarias, and Universidad Europea de Valencia. The Portugal Company is the entity that operates Universidade Europeia, a comprehensive university in Portugal, and Instituto Português de Administração de Marketing (IPAM Lisbon and IPAM Porto), post-secondary schools of marketing in Portugal.

The total purchase price under the Spain and Portugal Sale Agreement was EUR 770,000 (or approximately $857,000 at the date of closing), subject to customary closing adjustments. After payment of transaction fees, receipt of working capital and other adjustments, as well as settlement of foreign currency swaps, the total net proceeds received by ICE and Laureate I were approximately $906,000, or approximately $760,000 net of cash sold, which the Company used to repay indebtedness, including full repayment of the remaining balance outstanding under the 2024 Term Loan. Additionally, the buyer assumed debt of approximately $109,000. The Company recognized a gain for these transactions of approximately $615,000, including a tax benefit of approximately $30,000 that relates to the reversal of net deferred tax liabilities, which is included in gain on sales of discontinued operations on the consolidated statement of operations for the nine months ended September 30, 2019.

Sale of Turkey Operations

On August 27, 2019, Laureate I B.V. and Can Uluslararasi Yatirim Holding A.Ş.(Can Holding), a Turkish company, executed and closed a Sale and Purchase Agreement (the Turkey SPA). Pursuant to the Turkey SPA, Can Holding purchased from Laureate I B.V. 100% of the share capital of Education Turkey B.V. (ET), a private limited liability company incorporated under the laws of the Netherlands. ET and certain of its direct and indirect subsidiaries and affiliates together have the right to appoint a majority of the Trustees of Bilgi Eğitim ve Kültür Vakfı (Bilgi Foundation). Bilgi Foundation is the sponsor of Istanbul Bilgi University (Bilgi), an institution located in Turkey that the Company previously consolidated under the variable interest entity model. As a result of the closing of the Turkey SPA on August 27, 2019, the Company no longer consolidates Bilgi.

The total purchase price was $90,000, which consisted of cash proceeds of $75,000 and deferred purchase price of $15,000 in the form of an instrument payable one year after closing. The deferred purchase price carries no stated interest rate. At the date of sale, Bilgi had approximately $89,000 of cash and restricted cash on its balance sheet. The Company recognized a loss for this transaction of approximately $37,000, which is included in gain/(loss) on sales of discontinued operations on the Consolidated Statements of Operations for the three and nine months ended September 30, 2019.

Note 56. Due to Shareholders of Acquired Companies

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


	September 30, 2017		December 31, 2016		Nominal Currency	Interest Rate %	September 30, 2019		December 31, 2018		Nominal Currency	Interest Rate %
Universidade Anhembi Morumbi (UAM Brazil)	$	46,475	$	52,043	BRL	CDI + 2%	$	20,145	$	30,912	BRL	CDI + 2%
IADE Group							1,096		1,141		EUR	3%
Faculdade Porto-Alegrense (FAPA)							217		1,943		BRL	IGP-M
University of St. Augustine for Health Sciences, LLC (St. Augustine)	11,550		11,550		USD	7%	—		11,395		USD	7%
Monash South Africa (MSA)	9,591		27,462		AUD	n/a, 6.75%
Universidad Tecnologica Centroamericana (UNITEC Honduras)	4,184		5,196		HNL	IIBC
CH Holding Netherlands B.V. (CH Holding)	3,885		8,587		USD	n/a
Faculdade Porto-Alegrense (FAPA)	3,132		2,973		BRL	IGP-M
IADE Group	2,358		2,755		EUR	3%
Faculdades Metropolitanas Unidas Educacionais (FMU)	—		100,382		BRL	CDI
Total due to shareholders of acquired companies	81,175		210,948				21,458		45,391
Less: Current portion of due to shareholders of acquired companies	28,881		118,679				11,502		23,820
Due to shareholders of acquired companies, less current portion	$	52,294	$	92,269			$	9,956	$	21,571

Note 9. Debt

~~Note~~ 8. ~~Debt~~

Outstanding long-term debt was as follows:



	September 30, 2019		December 31, 2018
Senior long-term debt:
Senior Secured Credit Facility (stated maturity dates of April 2022 as of September 30, 2019 and April 2022 and April 2024 as of December 31, 2018), net of discount	$	59,000	$	1,321,629
Senior Notes (stated maturity date May 2025)	800,000		800,000
Total senior long-term debt	859,000		2,121,629
Other debt:
Lines of credit	28,850		37,899
Notes payable and other debt	358,138		503,182
Total senior and other debt	1,245,988		2,662,710
Finance lease obligations and sale-leaseback financings	99,706		119,443
Total long-term debt and finance leases	1,345,694		2,782,153
Less: total unamortized deferred financing costs	67,412		88,241
Less: current portion of long-term debt and finance leases	119,932		100,818
Long-term debt and finance leases, less current portion	$	1,158,350	$	2,593,094

September 30, 2017 December 31, 2016
Senior long-term debt:
Senior Secured Credit Facility (stated maturity dates April 2022 and April 2024 as of September 30, 2017; stated maturity dates June 2018, June 2019 and March 2021 as of December 31, 2016), net of discount $ 1,576,845
$ 1,497,869
Senior Notes (stated maturity dates May 2025 as of September 30, 2017 and September 2019 as of December 31, 2016), net of discount 800,000
1,388,036
Total senior long-term debt 2,376,845
2,885,905
Other debt:
Lines of credit 51,065
66,081
Notes payable and other debt 626,687
650,184
Total senior and other debt 3,054,597
3,602,170
Capital lease obligations and sale-leaseback financings 261,650
250,842
Total long-term debt 3,316,247
3,853,012
Less: total unamortized deferred financing costs 105,839
44,648
Less: current portion of long-term debt 185,848
178,989
Long-term debt, less current portion $ 3,024,560
$ 3,629,375

~~Approximately $34,798 of long-term debt, including the current portion, is included in the~~ ~~held-for-sale liabilities recorded on the Consolidated Balance Sheet as of September 30, 2017. For further description of the held-for-sale amounts see Note 4,~~ ~~Assets Held for Sale.~~

~~Debt Refinancing~~

During the second quarter of 2017, the Company completed refinancing transactions that resulted in repayment of the previous senior credit facility and the redemption of the 9.250% Senior Notes due 2019 (the Senior Notes due 2019) (other than $250,000 in aggregate principal amount of the Senior Notes due 2019 that the Company exchanged on April 21, 2017 for substantially identical but non-redeemable notes issued under a new indenture (the Exchanged Notes)).

~~Senior Notes~~

On April 26, 2017, we completed an offering of $800,000 aggregate principal amount of 8.250% Senior Notes due 2025 (the Senior Notes due 2025). The Senior Notes due 2025 were issued at par and will mature on May 1, 2025. Interest on the Senior Notes due 2025 is payable semi-annually on May 1 and November 1, and the first interest payment date is November 1, 2017.We may redeem the Senior Notes due 2025, in whole or in part, at any time on or after May 1, 2020, at redemption prices starting at 106.188% of the principal amount thereof and decreasing from there each year thereafter until May 1, 2023, plus accrued and unpaid interest. From and after May 1, 2023, we may redeem all or part of the Senior Notes due 2025 at a redemption price of 100%, plus accrued and unpaid interest. We may also redeem up to 40% of the Senior Notes due 2025 using the proceeds of certain equity offerings completed before May 1, 2020, at a redemption price equal to 108.250% of the principal amount thereof, plus accrued and unpaid interest. In addition, at any time prior to May 1, 2020, we may redeem the Senior Notes due 2025, in whole or in part, at a price equal to 100% of the principal amount, plus a ‘‘make-whole’’ premium, plus accrued and unpaid interest.

On April 28, 2017, the Company elected to redeem all of its outstanding Senior Notes due 2019 (other than the Exchanged Notes) and on May 31, 2017 (the Redemption Date), the Senior Notes due 2019 (other than the Exchanged Notes) were redeemed. As described further below, the Exchanged Notes were redeemed on August 11, 2017. The aggregate principal amount outstanding of the Senior Notes due 2019 (excluding the Exchanged Notes) was $1,125,443. The redemption price for the Senior Notes due 2019 that were redeemed was equal to 104.625% of the principal amount thereof, for a total redemption price of $1,177,495, plus accrued and unpaid interest and special interest to the Redemption Date, for an aggregate payment to holders of the Senior Notes of $1,205,630. As of September 30, 2017, the outstanding balance of our senior notes was $800,000, which consisted entirely of the Senior Notes due 2025. As of December 31, 2016, the outstanding balance under our Senior Notes due 2019 was $1,388,036, net of a debt discount.

~~Senior Secured Credit Facility~~

Substantially concurrently with the issuance of the Senior Notes due 2025, we consummated a refinancing of our Senior Secured Credit Facility by means of an amendment and restatement of the existing amended and restated credit agreement (the Second Amended and Restated Credit Agreement) to provide a new revolving credit facility of $385,000 maturing in April 2022 (the Revolving Credit Facility) and a new syndicated term loan of $1,600,000 maturing in April 2024 (the 2024 Term Loan). The old senior credit facility was fully repaid, and that repayment amount is included in Payments on long-term debt in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2017, with the exception of approximately $283,000 of loan principal related to the old term loan that was rolled over by certain lenders into the 2024 Term Loan. Accordingly, that rollover amount was a non-cash transaction.

As a subfacility under the Revolving Credit Facility, the Second Amended and Restated Credit Agreement provides for letter of credit commitments in the aggregate amount of $141,000. The Second Amended and Restated 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 $300,000 plus additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Second Amended and Restated Credit Agreement, on a pro forma basis, does not exceed 2.75x.

The maturity date for the Revolving Credit Facility is April 26, 2022 and the maturity date for the 2024 Term Loan is April 26, 2024. The Revolving Credit Facility bears interest at a per annum interest rate, at the option of the Borrower, at either the LIBOR rate or the ABR rate plus an applicable margin of 3.75% per annum or 3.50% per annum for LIBOR rate loans, and 2.75% per annum or 2.50% per annum for ABR rate loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Second Amended and Restated Credit Agreement. As of September 30, 2017, there was no balance outstanding under the Revolving Credit Facility.

The 2024 Term Loan bears interest at a per annum rate, at the option of the Borrower, at either the LIBOR rate or the ABR rate plus an applicable margin of 4.50% per annum or 4.25% per annum for LIBOR rate loans, and 3.50% per annum or 3.25% per annum for ABR rate loans, in each case, based on the Company’s Consolidated Total Debt to Consolidated EBITDA ratio. As of September 30, 2017, all loans outstanding under the 2024 Term Loan were LIBOR loans and had a total interest rate of 5.73%. A discount equal to 1% of the 2024 Term Loan's original principal amount, or $16,000, was paid at issuance and will be amortized to interest expense over the term of the loan. The 2024 Term Loan amortizes at an annual amount equal to 1% of the original principal amount of the 2024 Term Loan, which annual amount is payable in quarterly payments, with the remaining unpaid principal amount payable on the maturity date. Quarterly principal payments on the 2024 Term Loan commenced June 30, 2017. On or prior to October 26, 2017, except for prepayments made from transactions expressly permitted, the 2024 Term Loan can be prepaid at price equal to 101% of the principal amount prepaid. After October 26, 2017, the 2024 Term Loan can be prepaid at price equal to 100% of the principal amount prepaid.

~~Loss on Debt Extinguishment, Debt Modification and Debt Issuance Costs~~

As a result of the refinancing transactions described above and the note exchange transaction described below, Laureate recorded a Loss on debt extinguishment of $8,425 during the nine months ended September 30, 2017 related primarily to the write off of unamortized deferred financing costs associated with certain lenders that did not participate in the new debt instruments. In addition, approximately $22,800 was charged to General and administrative expenses related to new third-party costs paid in connection with the portion of the refinancing transactions that was deemed to be a modification. Also in connection with the refinancing transactions, approximately $70,800 of new deferred financing costs were capitalized, which related primarily to the excess of the redemption price over the principal amount of the Senior Notes due 2019 that were redeemed and the call premium that applied to a portion of the repaid senior credit facilities.

Estimated Fair Value of Debt

The estimated fair value of our debt was determined using observable market prices, as the majority of our securities, including the Senior ~~Secured Credit Facility and the Senior~~ Notes due 2025 ~~are~~and the 2024 Term Loan, prior to its repayment in 2019, were traded in a brokered ~~market, as were the Senior Notes due 2019 prior to their redemption.~~market. The fair value of our remaining debt instruments approximates carrying value based on their terms. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, our long-term debt was classified as Level 2 within the fair value hierarchy, based on the frequency and volume of trading in the brokered market. The estimated fair value of our debt was as follows:

September 30, 2017 December 31, 2016
Carrying amount Estimated fair value Carrying amount Estimated fair value
Total senior and other debt $ 3,054,597
$ 3,118,539
$ 3,602,170
$ 3,632,853



	September 30, 2019				December 31, 2018
	Carrying amount		Estimated fair value		Carrying amount		Estimated fair value
Total senior and other debt	$	1,245,988	$	1,316,988	$	2,662,710	$	2,675,684

~~Senior Notes due 2019 - Note Exchange Transaction~~Loss on Debt Extinguishment

On April 15, 2016, Laureate entered into separate, privately negotiated note exchange agreements (the Note Exchange Agreements) with certain existing holders (the Existing Holders) of the Senior Notes due 2019 pursuant to which we agreed to exchange (the Note Exchange) $250,000 in aggregate principal amount of Senior Notes due 2019 for shares of the Company's Class A common stock. The exchange was to be completed within one year and one day after the consummation of an initial public offering of our common stock that generates gross proceeds of at least $400,000 or 10% of the equity value of the Company (a Qualified Public Offering). As discussed in Note ~~1, Description of Business, on February 6, 2017,~~5, Dispositions, the Company completed ~~an initial public offering~~the sale of St. Augustine on February 1, 2019 and used approximately $340,000 of the total $346,400 of net proceeds to repay a portion of the 2024 Term Loan under its Senior Secured Credit Facility, with the remaining proceeds utilized to repay borrowings outstanding for the revolver under its Senior Secured Credit Facility. In addition, during the first quarter of 2019, the Company elected to repay approximately $35,000 of the approximately $51,700 principal balance outstanding for certain notes payable at a real estate subsidiary in Chile.

During the second quarter of 2019, the Company fully repaid the remaining balance outstanding under its 2024 Term Loan, using the proceeds received from the sales of its ~~Class A common stock at a price per share~~operations in India, Spain and Portugal, as discussed in Note 5, Dispositions. The remaining proceeds were used to repay borrowings outstanding for the revolver under its Senior Secured Credit Facility.

During the third quarter of ~~$14.00 that qualified as a Qualified Public Offering.~~

~~On August 2, 2017, we sent notices to the holders of these notes indicating that~~2019, following the closing of the ~~exchange contemplated by the~~Turkey transaction described in Note Exchange Agreements would be consummated on Friday, August 11, 2017. On August 11, 2017, Laureate issued 18,683 shares of Class A common stock, which was equal to 104.625% of the aggregate principal amount of Senior Notes due 2019 to be exchanged, or $261,600, divided by $14.00, the initial public offering price per share of Class A common stock in the Qualified Public Offering. Upon completion of the Note Exchange,5, Dispositions, the Company ~~also paid~~fully repaid a note payable at Universidad del Valle de México (UVM Mexico) that had a remaining balance outstanding of approximately ~~$11,100 to~~$103,000.

In connection with these debt repayments, the exchanging holders, an amount equal to the interest and special interest accrued with respect to the Exchanged Notes to, but excluding, the date of consummation of the Note Exchange. Shares of our Class A common stock issued in the Note Exchange are listed on the Nasdaq Global Select Market.

~~The Note Exchange Agreements also provided that, within 60 days after the consummation of~~Company recorded a Qualified Public Offering, at the option of the Existing Holders or their transferees, we would repurchase up to an additional $62,500 aggregate principal amount of Senior Notes due 2019 at the redemption price set forth in Section 3.07 of the indenture governing the Senior Notes due 2019 that is applicable as of the date of pricing of the Qualified Public Offering, plus accrued and unpaid interest and special interest. On March 1, 2017, in accordance with the terms of the Note Exchange Agreements, we repurchased Senior Notes due 2019 with an aggregate principal amount of $22,556 at a repurchase price of 104.625% of the aggregate principal amount, for a total payment of $23,599; the difference was recognized as Loss on debt extinguishment ~~along~~of $200 and $26,417 for the three and nine months ended September 30, 2019, respectively, related to the write off of a pro-rata portion of the unamortized deferred financing costs associated with the ~~portion of unamortized~~repaid debt ~~issuance costs that were written off.~~balances, as well as the debt discount associated with the 2024 Term Loan.

Certain Covenants

As of September 30, ~~2017,~~2019, our senior long-term debt contained certain negative covenants including, among others: (1) limitations on additional indebtedness; (2) limitations on dividends; (3) limitations on asset sales, including the sale of ownership interests in subsidiaries and sale-leaseback transactions; and (4) limitations on liens, guarantees, loans or investments. The Second Amended and Restated Credit Agreement provides, solely with respect to the ~~Revolving Credit Facility,~~revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Second Amended and Restated Credit Agreement, to exceed ~~4.50x as of the last day of each quarter ending June 30, 2017 through September 30, 2017, 3.75x as of the last day of each quarter ending December 31, 2017 through March 31, 2018, and~~ 3.50x as of the last day of each quarter ending June 30, 2018 and thereafter. However, the agreement also provides that if (i) the Company’s Consolidated Total Debt to Consolidated EBITDA ratio, as defined in the Second Amended and Restated Credit Agreement, is not greater than 4.75x as of such date and (ii) less than 25% of the ~~Revolving Credit Facility~~revolving credit facility is utilized as of that date, then such financial covenant shall not apply. As of September 30, ~~2017,~~2019, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant. In addition, notes payable at some of our locations contain financial maintenance covenants. We are in compliance with these covenants.

As described further in Note 21, Subsequent Events, the Company completed an amendment and restatement of its Senior Secured Credit Facility on October 7, 2019.

Note 10. Leases

Laureate conducts a significant portion of its operations at leased facilities. These facilities include our corporate headquarters, other office locations, and many of Laureate's higher education facilities. Laureate analyzes each lease agreement to determine whether it should be classified as a finance lease or an operating lease. As a result of adopting ASC Topic 842, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below.

Operating Leases

Our operating lease agreements are primarily for real estate space and are included within operating lease ROU assets and operating lease liabilities on the 2019 consolidated balance sheet. 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 based on the present value of lease payments over the lease term. Our variable lease payments consist of non-lease services related to the lease. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Many of our lessee agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. On occasion, Laureate has entered into sublease agreements for certain leased office space; however, the sublease income from these agreements is immaterial.

Supplemental balance sheet information related to leases was as follows:



Leases	Classification	September 30, 2019
Assets:
Operating	Operating lease right-of-use assets, net	$	871,746
Finance	Buildings, Furniture, equipment and software, net	55,073
Total leased assets		$	926,819

Liabilities:
Current
Operating	Current portion of operating leases	$	91,919
Finance	Current portion of long-term debt and finance leases	4,838
Non-current
Operating	Long-term operating leases, less current portion	800,828
Finance	Long-term debt and finance leases, less current portion	53,820
Total lease liabilities		$	951,405



Lease Term and Discount Rate	September 30, 2019
Weighted average remaining lease terms
Operating leases	9.4 years
Finance leases	11.9 years

Weighted average discount rate
Operating leases	9.50	%
Finance leases	8.50	%

The components of lease cost were as follows:



Lease Cost	Classification	For the three months ended September 30, 2019			For the nine months ended September 30, 2019
Operating lease cost	Direct costs	$	42,032		$	132,546
Finance lease cost
Amortization of leased assets	Direct costs	1,880			4,518
Interest on leased assets	Interest expense	1,264			2,741
Short-term lease costs	Direct costs	810			2,800
Variable lease costs	Direct costs	4,483			11,056
Sublease income	Revenues	(1,049		)	(3,260		)
Total lease cost		$	49,420		$	150,401

As of September 30, 2019, maturities of lease liabilities were as follows:



Maturity of Lease Liability	Operating Leases			Finance Leases
Year 1	$	169,383		$	9,473
Year 2	159,432			9,180
Year 3	149,816			8,834
Year 4	140,692			8,354
Year 5	133,134			6,288
Thereafter	571,234			51,095
Total lease payments	$	1,323,691		$	93,224
Less: interest and inflation	(430,944		)	(34,566		)
Present value of lease liabilities	$	892,747		$	58,658

Supplemental cash flow information related to leases was as follows for the nine months ended September 30, 2019:



Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	139,010
Operating cash flows from finance leases	$	2,742
Financing cash flows from finance leases	$	3,128
Leased assets obtained for new finance lease liabilities	$	38,217
Leased assets obtained for new operating lease liabilities	$	6,394

As disclosed in our 2018 Form 10-K, future minimum lease payments at December 31, 2018, prior to the adoption of ASC Topic 842, by year and in the aggregate, under all noncancellable operating leases were as follows:



	Lease Payments
2019	$	151,795
2020	142,995
2021	135,426
2022	128,441
2023	119,955
Thereafter	482,220
Total	$	1,160,832

Note 911. Commitments and Contingencies

Noncontrolling Interest Holder Put Arrangements ~~and Company Call Arrangements~~

The following section provides a summary table and description of ~~the various~~our noncontrolling interest holder put arrangements, which relate to Discontinued Operations, that Laureate had outstanding as of September 30, ~~2017.~~2019. Laureate has elected to accrete changes in the arrangements’ redemption values over the period from the date of issuance to the earliest redemption date. The redeemable noncontrolling interests are recorded at the greater of the accreted redemption value or the traditional noncontrolling interest. Until the first exercise date, the put instruments’ reported values may be lower than the final amounts that will be required to settle the minority put arrangements. As of September 30, ~~2017,~~2019, the carrying value of all noncontrolling interest holder put arrangements was ~~$11,911, which includes accreted incremental value of $14,441 in excess of traditional noncontrolling interests.~~$10,230.

If the minority put arrangements were all exercised at September 30, ~~2017,~~2019, Laureate would be obligated to pay the noncontrolling interest holders an estimated amount of ~~$11,911,~~$10,230, as summarized in the following table:


	Nominal Currency	First Exercisable Date	Estimated Value as of September 30, 2017 redeemable within 12-months:		Reported Value		Nominal Currency	First Exercisable Date	Estimated Value as of September 30, 2019 redeemable within 12-months		Reported Value
Noncontrolling interest holder put arrangements
INTI Education Holdings Sdn Bhd (INTI) - 10%	MYR	Current	$	10,016	$	10,016
Pearl Retail Solutions Private Limited and Creative Arts Education Society (Pearl) - 10%	INR	Current	1,835		1,835
Stamford International University (STIU) - Puttable preferred stock of TEDCO	THB	Current	60		60
INTI Education Holdings Sdn Bhd (Inti Holdings) - 10.10%							MYR	Current	$	10,230	$	10,230
Total noncontrolling interest holder put arrangements			11,911		11,911				10,230		10,230
Puttable common stock - currently redeemable	USD	Current	4		4
Puttable common stock - not currently redeemable	USD	*	—		2,300		USD	*	—		1,714
Total redeemable noncontrolling interests and equity			$	11,915	$	14,215			$	10,230	$	11,944

* Contingently redeemable

MYR: Malaysian Ringgit

~~INR: Indian Rupee~~

~~THB: Thai Baht~~

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

~~Commitments and contingencies are generally denominated in foreign currencies.~~

~~Pearl~~

As part of the acquisition of Pearl, the minority owners had a put option to require Laureate to purchase the remaining 45% noncontrolling interest, and Laureate has a call option to require the minority owners to sell to Laureate up to 35% of the total equity of Pearl that is still owned by the noncontrolling interest holders (i.e. approximately 78% of the remaining 45% noncontrolling interest). On June 19, 2017, Laureate and the noncontrolling interest holders of Pearl amended the put and call option agreements in order to clarify certain aspects of the formula for determining the purchase price of the noncontrolling interests. The modifications to the agreement resulted in the exclusion of certain campus costs and liabilities in the purchase price calculation.

On July 11, 2017, the noncontrolling interest holders of Pearl notified Laureate of their election to exercise their put option for a portion of their total noncontrolling interest, which requires Laureate to purchase an additional 35% equity interest in Pearl. The purchase price for the 35% equity interest, which has been agreed to by the parties, is approximately $11,400 and has been recorded in Other current liabilities in the Consolidated Balance Sheet as of September 30, 2017. This liability was paid in October 2017. The remaining 10% puttable equity interest that is still held by the minority owners is recorded at its estimated redemption value of $1,835.

~~Series A Convertible Redeemable Preferred Stock Offering~~

As disclosed in our 2016 Form 10-K, on December 4, 2016, we signed a subscription agreement with six investors, including Kohlberg, Kravis and Roberts Co. L.P. and Snow Phipps Group LLC, both of which are affiliates of ours, pursuant to which we agreed to issue and sell to those investors an aggregate of 400 shares of a new series of our convertible redeemable preferred stock (the Series A Preferred Stock), consisting of 23 shares of Series A-1 Preferred Stock and 377 shares of Series A-2 Preferred Stock, in a private offering for total net proceeds of approximately $383,000. The closing of this transaction, for 343 shares, occurred on December 20, 2016 and we received net proceeds, after issuance costs, of approximately $328,000. One investor funded a portion of its purchase price for 57 shares, equal to $57,000 (approximately $55,000 net of issuance costs), in January 2017. The issuance costs are being accreted to the carrying value of the Series A Preferred Stock over the five-year redemption period.

The Series A Preferred Stock includes a Beneficial Conversion Feature (BCF) that was contingent on a qualified IPO (as defined in the Certificate of Designations governing the terms of the Series A Preferred Stock), which was consummated on February 6, 2017. Accordingly, during the first quarter of 2017, the Company recorded the BCF at its estimated fair value of $261,794 as a reduction of the carrying value of the Series A Preferred Stock and an increase to Additional Paid-In Capital. Beginning in the first quarter of 2017, the accretion of this BCF reduces net income available to common stockholders in the calculation of earnings per share, as shown in Note 15, Earnings (Loss) Per Share. During the nine months ended September 30, 2017, the Company recorded additional BCF of $3,574 related to the paid-in-kind dividends. The total BCF of $265,368 will be accreted using a constant yield approach over a one-year period. For the nine months ended September 30, 2017, we have recorded total accretion on the Series A Preferred Stock of $185,149, and as of September 30, 2017 the Series A Preferred Stock had a carrying value of $302,693. As of December 31, 2016, prior to the January 2017 funding of purchase price for the additional 57 shares of Series A Preferred Stock, and prior to the IPO and the recording of the IPO-contingent BCF, the Series A Preferred Stock had a carrying value of $332,957.

~~Other~~ Loss Contingencies

Laureate is subject to legal actions arising in the ordinary course of its business. In management's opinion, we have adequate legal defenses, insurance coverage and/or accrued liabilities with respect to the eventuality of such actions. We do not believe that any settlement would have a material impact on our Consolidated Financial Statements.

Contingent Liabilities for Taxes

As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, Laureate has recorded cumulative liabilities totaling ~~$58,046~~$50,644 and ~~$67,192,~~$52,880, respectively, for taxes other-than-income tax, principally payroll-tax-related uncertainties recorded at the time of an ~~acquisition.~~acquisition, of which $3,259 and $4,999, respectively, were classified as held for sale. The changes in this recorded liability are related to acquisitions, interest and penalty accruals, changes in tax laws, expirations of statutes of limitations, settlements and changes in foreign currency exchange rates. The terms of the statutes of limitations on these contingencies vary but can be up to 10 years. ~~This liability is~~These liabilities were included in ~~Other~~current and long-term liabilities on the Consolidated Balance Sheets. ~~We have also~~Changes in the recorded ~~current liabilities~~values of non-income tax contingencies impact operating income and interest expense, while changes in the related indemnification assets impact only operating income. The total (decrease) increase to operating income for ~~taxes other-than-income~~adjustments to non-income tax ~~of $248~~contingencies and ~~$1,896,~~indemnification assets was $(5,196) and $843, respectively, ~~as of~~for the nine months ended September 30, ~~2017~~2019 and December 31, 2016, in Other current liabilities on the Consolidated Balance Sheets. The recorded value of contingent liabilities is reduced when they are extinguished or the related statutes of limitations expire.2018.

In addition, as of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, Laureate has recorded cumulative liabilities for income tax contingencies of ~~$110,513~~$53,907 and ~~$103,471, respectively.~~ $64,157, respectively, of which $7,569 and $14,582, respectively, were classified as held for sale. As of September 30, 2019 and December 31, 2018, indemnification assets primarily related to acquisition contingencies were $75,383 and $82,061. These indemnification assets primarily cover contingencies for income taxes and taxes other-than-income taxes. We have also recorded receivables of approximately $18,700 and $19,000 as of September 30, 2019 and December 31,

2018, respectively, from the former owner of one of our Brazil institutions which is guaranteed by future rental payments to the former owner.

In addition, we have identified certain contingencies, primarily tax-related, ~~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 most cases, Laureate has received indemnifications from the former owners and/or noncontrolling interest holders of the acquired businesses for contingencies, and therefore, we do not believe we will sustain an economic loss even if we are required to pay these additional amounts. ~~As of September 30, 2017~~In cases where we are not indemnified, the unrecorded contingencies are not individually material and ~~December 31, 2016, indemnification assets~~are primarily ~~related~~in Brazil. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies in Brazil could be up to ~~acquisition contingencies~~approximately $46,000 if the outcomes were ~~$90,576 and $97,607, respectively. These indemnification assets primarily covered contingencies for income taxes and taxes other-than-income taxes.~~unfavorable in all cases.

Other Loss Contingencies

Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities. Laureate intends to vigorously defend against these matters. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, approximately ~~$23,000~~$32,130 and ~~$18,000~~, $29,000, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets. ~~Laureate intends to vigorously defend against these lawsuits.~~

Hunan International Economics University (HIEU), our institution in China, is named as one of five defendants in a civil case involving a loan transaction that was entered into by certain noncontrolling interest holders of HIEU as borrowers, and was allegedly guaranteed by HIEU. The amount of the loan is approximately $29,000, including interest and penalties. The noncontrolling interest holders are the primary defendants in this civil case, with HIEU added in its alleged role as guarantor. Due to developments in the case that occurred during the second quarter of 2017, we determined that the probability of incurring a loss in this legal matter is reasonably possibleIn addition, as of September 30, ~~2017, but not probable,~~2019 and ~~therefore~~December 31, 2018, $194 and $18,000, respectively, of loss contingencies for Discontinued Operations were classified as liabilities held for sale. The decrease is primarily related to the reversal of loss contingencies recorded in 2018 in connection with the sale of LEILY in China, as discussed in Note 5, Dispositions. During the first quarter of 2019, loss contingencies were reversed following the settlement of a ~~liability has not been recorded. On November 4, 2017, HIEU was informed by~~legal matter related to LEILY with no cost to the ~~court that the case against it would be dismissed, although no formal judgment has been received. Until it receives the formal judgment of dismissal, HIEU will continue to vigorously defend this case.~~Company, resulting in additional gain on sale.

Material Guarantees – Student Financing

~~Chile~~

The accredited Chilean institutions in the Laureate network also participate in a government-sponsored student financing program known as Crédito con Aval del Estado (the CAE Program). The CAE Program was formally implemented by the Chilean government in 2006 to promote higher education in Chile for lower socio-economic level students in good academic standing. The CAE Program involves tuition financing and guarantees that are provided by our institutions and the government. As part of the CAE Program, these institutions provide guarantees which result in contingent liabilities to third-party financing institutions, beginning at 90% of the tuition loans made directly to qualified students enrolled through the CAE Program and declining to 60% over time. The guarantees by these institutions are in effect during the period in which the student is enrolled, and the guarantees are assumed entirely by the government upon the student’s graduation. When a student leaves one of Laureate's institutions and enrolls in another CAE-qualified institution, the Laureate institution will remain guarantor of the tuition loans that have been granted up to the date of transfer, and until the student's graduation from a CAE-qualified institution. The maximum potential amount of payments our institutions could be required to make under the CAE Program was approximately ~~$515,000~~$484,000 and ~~$479,000~~$499,000 at September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively. This maximum potential amount assumes that all students in the CAE Program do not graduate, so that our guarantee would not be assigned to the government, and that all students default on the full amount of the CAE-qualified loan balances. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we recorded ~~$27,900~~$34,138 and ~~$20,636,~~$28,254, respectively, as estimated long-term guarantee liabilities for these obligations.

Material Guarantees – Other

In conjunction with the purchase of ~~UNP,~~Universidade Potiguar in Brazil (UNP), Laureate pledged all of the acquired shares as a guarantee of our payments of rents as they become due. In the event that we default on any payment, the pledge agreement provides for a forfeiture of the relevant pledged shares. In the event of forfeiture, Laureate may be required to transfer the books and management of UNP to the former owners.

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

In connection with the purchase of FMU Education Group on September 12, 2014, Laureate pledged ~~75% of the~~its acquired shares to third-party lenders as a guarantee of our payment obligations under the loans that financed a portion of the purchase price. ~~Laureate~~The shares are pledged the remaining 25% of the acquired shares to the sellers as a guarantee of our payment obligations under the purchase agreement for the seller notes. In the event that we default on any payment of the loans or seller notes, the purchase agreement provides for a forfeiture of the relevant pledged shares. After the payment of the seller notes in September 2017, the shares pledged to the sellers were pledged to the third-party lenders until full ~~payment~~repayment of the loans, which mature in April 2021. ~~See Note 5, Due~~

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 ~~Shareholders~~the third-party lender as a guarantee of ~~Acquired Companies.~~the payment obligations under the loan.

Standby Letters of Credit, Surety Bonds and Other Commitments

As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, Laureate's outstanding letters of credit (LOCs) and surety bonds primarily consisted of the items discussed below.

As of ~~both~~ September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had approximately ~~$105,600~~$127,000 and $139,000, respectively, posted as LOCs in favor of the ~~United States Department of Education (DOE).~~DOE. These LOCs were required to allow Walden, ~~Kendall, NewSchool,~~NSAD and, in 2018, St. Augustine to continue participating in the DOE Title IV program. These LOCs are recorded on Walden and Laureate and are fully collateralized with cash equivalents and certificates of deposit, which are classified as Restricted cash ~~and investments~~ on our September 30, ~~2017~~2019 and December 31, 2018 Consolidated Balance ~~Sheet.~~Sheets.

We received a letter dated October 12, 2017 from the DOE stating that, based on Laureate’s failure to meet standards of financial responsibility for the fiscal year ended December 31, 2016, we are required to either: 1) increase our LOC to an amount equal to 50% of the Title IV, Higher Education Act (HEA) funds received by Laureate in the fiscal year ended December 31, 2016 (calculated by the DOE to be $456,293) and qualify as a financially responsible institution; or 2) increase our LOC to an amount equal to 15% of the Title IV, HEA funds received by Laureate in the fiscal year ended December 31, 2016 (calculated by the DOE to be $136,888) and remain provisionally certified for a period of up to three complete award years. In the letter, the DOE also has required us to continue to comply with additional notification and reporting requirements. We have chosen the second option, to increase our LOC to $136,888 and to remain provisionally certified for a period of up to three complete award years, and we are in the process of obtaining one or more LOCs for such amount. We also chose that option in 2016, resulting in our letter of credit balance of $105,600 that is posted as of September 30, 2017.

As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had ~~$39,236 and $34,746, respectively,~~EUR 5,036 (approximately US $5,500 at September 30, 2019) posted as ~~cash-collateral~~cash collateral for LOCs related to the ~~Spain Tax Audits. The cash collateral for these LOCs~~Spanish tax audits, which was recorded in Continuing Operations and classified as Restricted cash ~~and investments~~ on our September 30, ~~2017~~2019 and December 31, 2018 Consolidated Balance ~~Sheet.~~Sheets. The cash collateral is related to the final assessment issued by the Spanish Taxing Authority (STA) in October 2018 for the 2011 to 2013 tax audit period.

As part of our normal operations, our insurers issue surety bonds on our behalf, as required by various state education authorities in the United States. We are obligated to reimburse our insurers for any payments made by the insurers under the surety bonds. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the total face amount of these surety bonds was ~~$13,980~~$23,036 and ~~$12,162,~~$22,204, respectively. These bonds are fully collateralized with cash, which iswas classified as Restricted cash ~~and investments~~ on our September 30, ~~2017~~2019 and December 31, 2018 Consolidated Balance ~~Sheet.~~Sheets.

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

Note 1012. Financing Receivables

Laureate’s financing receivables consist primarily of trade receivables related to student tuition financing programs with an initial term in excess of one year. We have offered long-term financing through the execution of note receivable agreements with students at some of our institutions. Our disclosures include financing receivables that are classified in our Consolidated Balance Sheets as both current and long-term, reported in accordance with ASC 310, “Receivables.”

Laureate’s financing receivables balances were as follows:



	September 30, 2019			December 31, 2018
Financing receivables	$	33,126		$	16,531
Allowance for doubtful accounts	(6,064		)	(6,395		)
Financing receivables, net of allowances	$	27,062		$	10,136

September 30, 2017 December 31, 2016
Financing receivables $ 36,501
$ 29,776
Allowance for doubtful accounts (8,289 ) (9,175 )
Financing receivables, net of allowances $ 28,212
$ 20,601

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

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



	Chile		Other		Total
As of September 30, 2019
Amounts past due less than one year	$	9,798	$	509	$	10,307
Amounts past due one year or greater	3,038		140		3,178
Total past due (on non-accrual status)	12,836		649		13,485
Not past due	17,895		1,746		19,641
Total financing receivables	$	30,731	$	2,395	$	33,126

As of December 31, 2018
Amounts past due less than one year	$	7,618	$	644	$	8,262
Amounts past due one year or greater	2,879		192		3,071
Total past due (on non-accrual status)	10,497		836		11,333
Not past due	4,980		218		5,198
Total financing receivables	$	15,477	$	1,054	$	16,531

Chile Other Total
As of September 30, 2017
Amounts past due less than one year $ 11,317
$ 843
$ 12,160
Amounts past due one year or greater 3,850
1,424
5,274
Total past due (on non-accrual status) 15,167
2,267
17,434
Not past due 16,564
2,503
19,067
Total financing receivables $ 31,731
$ 4,770
$ 36,501

As of December 31, 2016
Amounts past due less than one year $ 8,711
$ 834
$ 9,545
Amounts past due one year or greater 3,899
1,482
5,381
Total past due (on non-accrual status) 12,610
2,316
14,926
Not past due 11,758
3,092
14,850
Total financing receivables $ 24,368
$ 5,408
$ 29,776

The following is a rollforward of the Allowance for doubtful accounts related to financing receivables for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, grouped by country portfolio:



	Chile			Other			Total
Balance at December 31, 2018	$	(6,108	)	$	(287	)	$	(6,395	)
Charge-offs	1,438			501			1,939
Recoveries	—			—			—
Reclassifications	—			—			—
Provision	(1,245		)	(646		)	(1,891		)
Currency adjustments	280			3			283
Balance at September 30, 2019	$	(5,635	)	$	(429	)	$	(6,064	)

Balance at December 31, 2017	$	(6,107	)	$	(365	)	$	(6,472	)
Charge-offs	1,338			37			1,375
Recoveries	—			—			—
Reclassifications	—			—			—
Provision	(1,233		)	18			(1,215		)
Currency adjustments	434			2			436
Balance at September 30, 2018	$	(5,568	)	$	(308	)	$	(5,876	)

Chile Other Total
Balance at December 31, 2016 $ (6,209 ) $ (2,966 ) $ (9,175 )
Charge-offs 2,798
330
3,128
Recoveries —
(36 ) (36 )
Reclassifications —
69
69
Provision (2,089 ) 93
(1,996 )
Currency adjustments (360 ) 81
(279 )
Balance at September 30, 2017 $ (5,860 ) $ (2,429 ) $ (8,289 )

Balance at December 31, 2015 $ (7,240 ) $ (3,336 ) $ (10,576 )
Charge-offs 3,525
104
3,629
Recoveries —
(46 ) (46 )
Reclassifications —
—
—
Provision (2,152 ) 181
(1,971 )
Currency adjustments (387 ) 97
(290 )
Balance at September 30, 2016 $ (6,254 ) $ (3,000 ) $ (9,254 )

Restructured Receivables

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

The number of financing receivable accounts and the pre- and post-modification account balances modified under the terms of a TDR during the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were as follows:

Number of Financing Receivable Accounts Pre-Modification Balance Outstanding Post-Modification Balance Outstanding
2017 355
$ 1,838
$ 1,655
2016 559
$ 8,615
$ 5,986



	Number of Financing Receivable Accounts	Pre-Modification Balance Outstanding		Post-Modification Balance Outstanding
2019	358	$	1,153	$	1,020
2018	435	$	1,345	$	1,262

The preceding table represents accounts modified under the terms of a TDR during the nine months ended September 30, ~~2017,~~2019, whereas the following table represents accounts modified as a TDR between January 1, ~~2016~~2018 and September 30, ~~2017~~2019 that subsequently defaulted during the nine months ended September 30, ~~2017:~~2019:

Number of Financing Receivable Accounts Balance at Default
Total 156
$ 721

The following table represents accounts modified as a TDR between January 1, ~~2015~~2017 and September 30, ~~2016~~2018 that subsequently defaulted during the nine months ended September 30, ~~2016:~~2018:

Number of Financing Receivable Accounts Balance at Default
Total 355
$ 1,089

Note 1113. Share-based Compensation

Share-based compensation expense was as follows:



	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Continuing operations
Stock options, net of estimated forfeitures	$	708	$	1,932	$	2,871	$	(3,333	)
Restricted stock awards	751		4,456		6,323		12,905
Total continuing operations	$	1,459	$	6,388	$	9,194	$	9,572

Discontinued operations
Share-based compensation expense for discontinued operations	119		173		387		920
Total continuing and discontinued operations	$	1,578	$	6,561	$	9,581	$	10,492

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Stock options, net of estimated forfeitures $ 4,590
$ 5,578
$ 33,421
$ 21,527
Restricted stock awards 4,042
2,235
10,548
6,897
Total non-cash stock compensation 8,632
7,813
43,969
28,424
Deferred compensation arrangement —
216
—
515
Total $ 8,632
$ 8,029
$ 43,969
$ 28,939

~~Stock Option Grant~~

~~On January 31, 2017, in connection with the Executive Profits Interests (EPI) agreement, we granted our CEO~~The negative stock options (the EPI Options) to purchase 2,773 shares of our Class B common stock. The EPI Options vested upon consummation of the IPO on February 6, 2017. The exercise price of the EPI Options is equal to (i) $17.00 with respect to 50% of the shares of Class B common stock subject to the EPI Option and (ii) $21.32 with respect to 50% of the shares of Class B common stock subject to the EPI Option. The EPI Options are exercisable until December 31, 2019. The Company recorded approximately $14,600 of share-based compensation expense for the ~~EPI Options in the first quarter of 2017.~~

~~Amendment to 2013 Long-Term Incentive Plan~~

On June 19, 2017, the Company’s Board of Directors (the Board) approved, subject to stockholder approval, an amendment and restatement of the Laureate Education, Inc. 2013 Long-Term Incentive Plan (as amended and restated, the 2013 Plan). Among other things, the amendment (i) increases the number of shares of Class A common stock that may be issued pursuant to awards under the 2013 Plan to 14,714; (ii) adds performance metrics, the ability to grant cash awards, and annual limits on grants, intended to qualify awards as performance-based awards that are not subject to certain limits on tax deductibility of compensation payable to certain executives; and (iii) extends the term of the 2013 Plan to June 18, 2027, the day before the 10th anniversary of the date of adoption of the amendment. On June 19, 2017, the holder of the majority of the voting power of the Company's outstanding stock (the Majority Holder) approved by written consent the amended and restated 2013 Plan and it became effective.

~~Stock Option Repricing~~

~~On June 19, 2017, the Board and the Majority Holder approved a stock option repricing (the Option Repricing). Pursuant~~nine months ended September 30, 2018 relates to the ~~Option Repricing, the exercise price~~correction of each Relevant Option (as defined below) was amended to reduce such exercise price to the average closing price of a share of the Company's Class A common stock as reported on the Nasdaq Global Select Market over the 20 calendar-day period following the mailing of the Notice and Information Statement to our stockholders. The average closing price of the Company's Class A common stock over such 20-day period was $17.44; accordingly, the exercise price of the Relevant Options was adjusted to $17.44.an immaterial error.

Relevant Options were all outstanding stock options as of June 19, 2017 (vested or unvested) to acquire shares of Class B common stock granted under the 2013 Plan during calendar years 2013 through 2016, and totaled approximately 5,300 options. Since the modification of the terms of the awards occurred on June 19, 2017, the Company recorded incremental stock compensation expense during the second quarter of 2017 of approximately $5,100 for options that were vested at the modification date. Additionally, approximately $2,500 of incremental stock compensation expense related to options that were not yet vested at the modification date is being recognized over the remaining vesting period.

Note ~~12.~~14. Stockholders' Equity

The components of net changes in stockholders' equity ~~were~~for the fiscal quarters of 2019 are as follows:



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock					Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost		Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount
Balance at December 31, 2018	107,450	$	430	116,865		$	467		$	3,703,796		$	(530,919	)	$	(1,112,695	)	$	—	$	(10,133	)	$	2,050,946
Adoption of accounting standards	—	—		—		—			—			28,944			—			—		—			28,944
Balance at January 1, 2019	107,450	430		116,865		467			3,703,796			(501,975		)	(1,112,695		)	—		(10,133		)	2,079,890
Non-cash stock compensation	—	—		—		—			3,149			—			—			—		—			3,149
Conversion of Class B shares to Class A shares	8	—		(8	)	—			—			—			—			—		—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	325	1		—		—			(1,421		)	—			—			—		—			(1,420		)
Distributions to noncontrolling interest holders	—	—		—		—			—			—			—			—		(625		)	(625		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—			263			—			—			—		—			263
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—			—			—			—			—		224			224
Net income	—	—		—		—			—			191,243			—			—		3,022			194,265
Foreign currency translation adjustment, net of tax of $0	—	—		—		—			—			—			49,521			—		30			49,551
Unrealized gain on derivatives, net of tax of $0	—	—		—		—			—			—			2,609			—		—			2,609
Balance at March 31, 2019	107,783	$	431	116,857		$	467		$	3,705,787		$	(310,732	)	$	(1,060,565	)	$	—	$	(7,482	)	$	2,327,906
Non-cash stock compensation	—	—		—		—			4,854			—			—			—		—			4,854
Conversion of Class B shares to Class A shares	10,991	44		(10,991	)	(44		)	—			—			—			—		—			—
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	32	—		—		—			170			—			—			—		—			170
Distributions to noncontrolling interest holders	—	—		—		—			—			—			—			—		(731		)	(731		)
Change in noncontrolling interests	—	—		—		—			(3,700		)	—			—			—		—			(3,700		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—			194			—			—			—		—			194
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—			—			—			—			—		(855		)	(855		)
Net income	—	—		—		—			—			781,592			—			—		(1,976		)	779,616
Foreign currency translation adjustment, net of tax of $0	—	—		—		—			—			—			10,275			—		(87		)	10,188
Unrealized loss on derivatives, net of tax of $0	—	—		—		—			—			—			(10,559		)	—		—			(10,559		)
Balance at June 30, 2019	118,806	$	475	105,866		$	423		$	3,707,305		$	470,860		$	(1,060,849	)	$	—	$	(11,131	)	$	3,107,083

Laureate Education, Inc. Stockholders

Class A
Common Stock
Class B
Common Stock
Common Stock Additional paid-in capital (Accumulated deficit) retained earnings Accumulated other comprehensive (loss) income Non-controlling interests Total stockholders' equity
Shares Amount Shares Amount Shares Amount
Balance at December 31, 2016 —
$ —
—
$ —
133,376
$ 534
$ 2,721,432
$ (1,037,701 ) $ (1,052,055 ) $ 32,182
$ 664,392
Non-cash stock compensation —
—
—
—
—
—
43,969
—
—
—
43,969
Reclassification of Common stock into Class B common stock on January 31, 2017 —
—
133,376
534
(133,376 ) (534 ) —
—
—
—
—
Issuance of Class A common stock in initial public offering 35,000
140
—
—
—
—
456,219
—
—
—
456,359
Conversion of Class B shares to Class A shares 1,032
4
(1,032 ) (4 ) —
—
—
—
—
—
—
Note exchange transaction 18,683
75
—
—
—
—
245,672
—
—
—
245,747
Vesting of restricted stock and exercise of stock options, net of shares withheld to satisfy tax withholding 34
—
231
1
—
—
(1,726 ) —
—
—
(1,725 )
Reclassification to equity upon expiration of put right on share-based awards —
—
—
—
—
—
5,500
—
—
—
5,500
Dividends to noncontrolling interests —
—
—
—
—
—
(889 ) —
—
—
(889 )
Distributions to noncontrolling interest holders —
—
—
—
—
—
—
—
—
(847 ) (847 )
Change in noncontrolling interests —
—
—
—
—
—
1,104
—
(1,164 ) 60
—
Accretion of redeemable noncontrolling interests and equity —
—
—
—
—
—
(6,135 ) —
—
—
(6,135 )
Accretion of Series A Convertible Redeemable Preferred Stock —
—
—
—
—
—
(185,149 ) —
—
—
(185,149 )
Beneficial conversion feature for Series A Convertible Redeemable Preferred Stock —
—
—
—
—
—
265,368
—
—
—
265,368
Reclassification of redeemable noncontrolling interests and equity —
—
—
—
—
—
—
—
—
(834 ) (834 )
Net loss —
—
—
—
—
—
—
(104,380 ) —
(2,365 ) (106,745 )
Foreign currency translation adjustment, net of tax of $0 —
—
—
—
—
—
—
—
194,238
2,355
196,593
Unrealized gain on derivatives, net of tax of $0 —
—
—
—
—
—
—
—
6,625
—
6,625
Balance at September 30, 2017 54,749
$ 219
132,575
$ 531
—
$ —
$ 3,545,365
$ (1,142,081 ) $ (852,356 ) $ 30,551
$ 1,582,229



	Laureate Education, Inc. Stockholders
	Class A Common Stock				Class B Common Stock					Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost			Non-controlling interests			Total stockholders' equity
	Shares		Amount		Shares		Amount			Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost			Non-controlling interests			Total stockholders' equity
Balance at June 30, 2019	118,806		$	475	105,866		$	423		$	3,707,305		$	470,860		$	(1,060,849	)	$	—		$	(11,131	)	$	3,107,083
Non-cash stock compensation	—		—		—		—			1,578			—			—			—			—			1,578
Conversion of Class B shares to Class A shares	15,002		60		(15,002	)	(60		)	—			—			—			—			—			—
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	96		—		—		—			1,455			—			—			—			—			1,455
Purchases of treasury stock at cost	(6,150	)	—		—		—			—			—			—			(104,849		)	—			(104,849		)
Accretion of redeemable noncontrolling interests and equity	—		—		—		—			(193		)	—			—			—			—			(193		)
Reclassification of redeemable noncontrolling interests and equity	—		—		—		—			—			—			—			—			649			649
Net loss	—		—		—		—			—			(95,226		)	—			—			(1,568		)	(96,794		)
Foreign currency translation adjustment, net of tax of $0	—		—		—		—			—			—			(82,070		)	—			(510		)	(82,580		)
Minimum pension liability adjustment, net of tax of $0	—		—		—		—			—			—			4,531			—			—			4,531
Balance at September 30, 2019	127,754		$	535	90,864		$	363		$	3,710,145		$	375,634		$	(1,138,388	)	$	(104,849	)	$	(12,560	)	$	2,830,880

As described in Note 2, Significant Accounting Policies, the change in beginning retained earnings resulting from the adoption of accounting standards represents the cumulative impact of adopting ASU 2016-02.

Stock Repurchase Program

As previously disclosed, on August 8, 2019, the Company announced that its board of directors had authorized a stock repurchase program to acquire up to $150,000 of the Company’s Class A common stock. The Company’s repurchases were made in a block trade and pursuant to a Rule 10b5-1 stock repurchase plan, in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). During the quarter ended September 30, 2019, the Company repurchased 6,150 shares of its outstanding Class A common stock for a total purchase price of $104,849, of which 5,130 shares totaling $87,921 had settled by close of business on September 30, 2019. The remaining shares settled during the first several days of October 2019 and their purchase price of $16,928 is recorded as a liability as of September 30, 2019. In early October 2019, the Company's stock repurchases reached the authorized limit of $150,000.

As discussed in Note 21, Subsequent Events, on October 14, 2019, the Company's board of directors approved the increase of its existing authorization to repurchase shares of the Company's Class A common stock by $150,000 for a total authorization (including the previously authorized repurchases) of up to $300,000 of the Company's Class A common stock.

The components of net changes in stockholders' equity for the fiscal quarters of 2018 are as follows:



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock				Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount
Balance at December 31, 2017	55,052	$	220	132,443		$	530	$	3,446,206		$	(946,236	)	$	(925,556	)	$	12,118		$	1,587,282
Adoption of accounting standards	—	—		—		—		—			5,074			—			—			5,074
Balance at January 1, 2018	55,052	220		132,443		530		3,446,206			(941,162		)	(925,556		)	12,118			1,592,356
Non-cash stock compensation	—	—		—		—		(3,756		)	—			—			—			(3,756		)
Conversion of Class B shares to Class A shares	59	—		(59	)	—		—			—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	145	1		59		—		(804		)	—			—			—			(803		)
Distributions from noncontrolling interest holders	—	—		—		—		—			—			—			581			581
Change in noncontrolling interests	—	—		—		—		(468		)	—			—			(20,575		)	(21,043		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		(76		)	—			—			—			(76		)
Accretion of Series A Convertible Redeemable Preferred Stock	—	—		—		—		(57,324		)	—			—			—			(57,324		)
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—			—			—			38			38
Net income	—	—		—		—		—			168,879			—			2,666			171,545
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—			—			83,648			(279		)	83,369
Unrealized gain on derivatives, net of tax of $0	—	—		—		—		—			—			2,210			—			2,210
Minimum pension liability adjustment, net of tax of $0	—	—		—		—		—			—			376			—			376
Balance at March 31, 2018	55,256	$	221	132,443		$	530	$	3,383,778		$	(772,283	)	$	(839,322	)	$	(5,451	)	$	1,767,473
Non-cash stock compensation	—	—		—		—		7,687			—			—			—			7,687
Conversion of Class B shares to Class A shares	27	—		(27	)	—		—			—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	188	1		—		—		(942		)	—			—			—			(941		)
Distributions to noncontrolling interest holders	—	—		—		—		—			—			—			(1,473		)	(1,473		)
Change in noncontrolling interests	—	—		—		—		—			—			—			(2,730		)	(2,730		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		882			—			—			—			882
Accretion of Series A Preferred Stock	—	—		—		—		(4,650		)	—			—			—			(4,650		)
Gain upon conversion of Series A Preferred Stock	—	—		—		—		74,110			—			—			—			74,110
Reclassification of Series A Preferred Stock upon conversion	36,143	144		—		—		237,957			—			—			—			238,101
Other	—	—		—		—		—			(744		)	—			—			(744		)
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—			—			—			(19		)	(19		)
Net income	—	—		—		—		—			224,412			—			(456		)	223,956
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—			—			(197,143		)	471			(196,672		)
Unrealized gain on derivatives, net of tax of $0	—	—		—		—		—			—			10,126			—			10,126
Balance at June 30, 2018	91,614	$	366	132,416		$	530	$	3,698,822		$	(548,615	)	$	(1,026,339	)	$	(9,658	)	$	2,115,106



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock				Additional paid-in capital		(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount		Additional paid-in capital		(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
Balance at June 30, 2018	91,614	$	366	132,416		$	530	$	3,698,822	$	(548,615	)	$	(1,026,339	)	$	(9,658	)	$	2,115,106
Non-cash stock compensation	—	—		—		—		6,561		—			—			—			6,561
Conversion of Class B shares to Class A shares	29	—		(29	)	—		—		—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	11	—		—		—		—		—			—			—			—
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		324		—			—			—			324
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—		—			—			(328		)	(328		)
Net loss	—	—		—		—		—		(94,789		)	—			(1,895		)	(96,684		)
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—		—			(52,961		)	211			(52,750		)
Unrealized loss on derivatives, net of tax of $0	—	—		—		—		—		—			(560		)	—			(560		)
Balance at September 30, 2018	91,654	$	366	132,387		$	530	$	3,705,707	$	(643,404	)	$	(1,079,860	)	$	(11,670	)	$	1,971,669

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



	September 30, 2019									December 31, 2018
	Laureate Education, Inc.			Noncontrolling Interests			Total			Laureate Education, Inc.			Noncontrolling Interests		Total
Foreign currency translation adjustment	$	(1,149,993	)	$	(108	)	$	(1,150,101	)	$	(1,127,719	)	$	459	$	(1,127,260	)
Unrealized gain on derivatives	10,416			—			10,416			18,366			—		18,366
Minimum pension liability adjustment	1,189			—			1,189			(3,342		)	—		(3,342		)
Accumulated other comprehensive loss	$	(1,138,388	)	$	(108	)	$	(1,138,496	)	$	(1,112,695	)	$	459	$	(1,112,236	)

September 30, 2017 December 31, 2016
Laureate Education, Inc. Noncontrolling Interests Total Laureate Education, Inc. Noncontrolling Interests Total
Foreign currency translation loss $ (851,148 ) $ 51
$ (851,097 ) $ (1,044,222 ) $ (2,304 ) $ (1,046,526 )
Unrealized gain (loss) on derivatives 1,407
—
1,407
(5,218 ) —
(5,218 )
Minimum pension liability adjustment (2,615 ) —
(2,615 ) (2,615 ) —
(2,615 )
Accumulated other comprehensive (loss) income $ (852,356 ) $ 51
$ (852,305 ) $ (1,052,055 ) $ (2,304 ) $ (1,054,359 )

Secondary Offerings

In June 2019, Wengen Alberta, Limited Partnership (Wengen), our controlling stockholder, converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 10,955 shares of Class A common stock in a secondary offering at a price of $15.3032 per share. Wengen received all of the net proceeds from this offering and 0 shares of Class A common stock were sold by the Company.

In September 2019, Wengen converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 15,000 shares of Class A common stock in a secondary offering at a price of $16.85 per share, prior to underwriting discounts and commissions. Wengen received all of the net proceeds from this offering and 0 shares of Class A common stock were sold by the Company.

Note 1315. Derivative Instruments

In the normal course of business, our operations are exposed to fluctuations in foreign currency values and interest rate changes. We may seek to control a portion of these risks through a risk management program that includes the use of derivative instruments.

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

We do not enter into speculative or leveraged transactions, nor do we hold or issue derivatives for trading purposes. ~~We generally intend to hold our derivatives until maturity.~~

Laureate reports all derivatives at fair value. These contracts are recognized as either assets or liabilities, depending upon the derivative’s fair value. Gains or losses associated with the change in the fair value of these swaps are recognized in our Consolidated Statements of Operations on a current basis over the term of the contracts, unless designated and effective as a hedge. For swaps that are designated and effective as cash flow hedges, gains or losses associated with the change in fair value of the swaps are recognized in our Consolidated Balance Sheets as a component of AOCI and amortized into earnings as a component of Interest expense over the term of the related hedged items. Upon early termination of an effective interest rate swap designated as a cash flow hedge, unrealized gains or losses are deferred in our Consolidated Balance Sheets as a component of AOCI and are amortized as an adjustment to Interest expense over the period during which the hedged forecasted transaction affects earnings. For derivatives that are both designated and effective as net investment hedges, gains or losses associated with the change in fair value of the derivatives are recognized on our Consolidated Balance Sheets as a component of AOCI.

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



	September 30, 2019		December 31, 2018
Derivatives designated as hedging instruments:
Long-term assets:
Net investment cross currency swaps	$	—	$	3,259
Derivatives not designated as hedging instruments:
Current assets:
Cross currency swaps	295		—
Current liabilities:
Cross currency swaps	11		4,021
Long-term liabilities:
Cross currency and interest rate swaps	—		6,656
Total derivative instrument assets	$	295	$	3,259
Total derivative instrument liabilities	$	11	$	10,677

September 30, 2017 December 31, 2016
Derivatives designated as hedging instruments:
  Long-term assets:
Interest rate swaps $ 1,407
$ —
  Current liabilities:
Interest rate swaps —
5,218
Derivatives not designated as hedging instruments:
Long-term assets:
Contingent redemption features - Series A Preferred Stock 28,314
4,464
  Long-term liabilities:
Cross currency and interest rate swaps 7,864
7,420
Interest rate swaps 230
330
Total derivative instrument assets $ 29,721
$ 4,464
Total derivative instrument liabilities $ 8,094
$ 12,968

Derivatives Designated as Hedging Instruments

Cash Flow Hedge - 2024 Term Loan Interest Rate Swaps

In May 2017, Laureate entered into, and designated as cash flow hedges, ~~four~~4 pay-fixed, receive-floating amortizing interest rate swaps with notional amounts of $100,000, $100,000, $200,000 and $300,000, respectively. These notional amounts ~~match~~matched the corresponding principal of the 2024 Term Loan borrowings of which these swaps ~~are~~were effectively hedging the interest payments. As such, the notional values ~~amortize~~amortized annually based on the terms of the agreements to match the principal borrowings as they ~~are~~were repaid. ~~Refer to Note 8, Debt, for further information regarding the underlying borrowings.~~ These swaps effectively ~~fix~~fixed the floating interest rate on the term loan to reduce exposure to variability in cash flows attributable to changes in the USD-LIBOR-BBA swap rate. All ~~four~~4 swaps ~~have~~were fully settled on August 21, 2018, prior to their May 31, 2022 maturity date, with the remaining AOCI to be ratably reclassified into income through Interest expense over the remaining maturity period of the 2024 Term Loans. The cash received at settlement from the swap counterparties was $14,117. During the second quarter of 2019, the Company accelerated the reclassification of amounts in AOCI to earnings as a result of the hedged forecasted transactions becoming probable not to occur, due to the full repayment of the 2024 Term Loan in June 2019 using proceeds from the sale of our institutions in Portugal and Spain. The accelerated amounts were a gain of approximately $9,800 and were recorded as a decrease to Interest expense. Prior to settlement of the swaps, they were determined to be 100% effective; therefore, the amount of gain or loss recognized in income on the ineffective portion was $0.

Net Investment Hedge - Cross Currency Swaps

In December 2017, Laureate entered into 2 EUR-USD cross currency swaps (net investment hedges) to hedge the foreign currency exchange volatility on operations of our Euro functional currency subsidiaries and better match our cash flows with the currencies in which our debt obligations are denominated. Both swaps had an effective date of ~~May 31,~~December 22, 2017 and ~~mature~~a maturity date of November 2, 2020, and were designated at inception as effective net investment hedges. In April 2019, the Company terminated both EUR-USD cross currency swaps for a net settlement received of $7,679, which is included in Settlement of derivatives related to sale of discontinued operations and net investment hedge on ~~May 31, 2022.~~our consolidated statement of cash flows. The terms of the swaps ~~require~~specified that at maturity on the first swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $59,210 at an implied exchange rate of 1.1842 and at maturity on the second swap, Laureate would deliver the notional amount of EUR 50,000 and receive USD $59,360 at an implied exchange rate of 1.1872. Semiannually until maturity, Laureate was obligated to pay ~~interest~~5.63% and receive 8.25% on EUR 50,000 and USD $59,210, respectively, on the ~~basis of fixed rates of 1.756%, 1.796%, 1.796%~~first swap and ~~1.763%~~pay 5.6675% and receive 8.25% on EUR 50,000 and USD $59,360, respectively, on the ~~$100,000, $100,000, $200,000 and $300,000 notional values, respectively. Laureate will receive interest for all four~~second swap. The swaps were determined to be 100% effective; therefore, the amount of gain or loss recognized in income on the ~~basis~~ineffective portion of ~~one-month USD-LIBOR-BBA, with a floor~~derivative instruments designated as hedging instruments was $0. The accumulated gain recognized in AOCI will be deferred from earnings until the sale or liquidation of ~~1%.~~the hedged investee. As of ~~September 30, 2017,~~December 31, 2018, these ~~interest rate~~ swaps had an estimated fair value of ~~$1,407.~~

~~Interest Rate Swaps~~

In September 2011, Laureate entered into two forward interest rate swap agreements that were designated as cash flow hedges. The swaps effectively fixed interest rates on existing variable-rate borrowings$3,259, which was recorded in order to manage our exposure to future interest rate volatility. Both swaps had an effective date of June 30, 2014 and matured on June 30, 2017. The gain or loss on these swaps was deferred in AOCI and then reclassified into earningsDerivative Instruments as a component of Interest expense in the same periods during which the hedged forecasted transactions affected earnings. During the second quarter of 2017, all of the gain or loss previously deferred in AOCI had been recognized in earnings since the swaps had matured. As of December 31, 2016, these interest rate swaps had an estimated fair value of $5,218.long-term asset.

The table below shows the total recorded unrealized ~~gain~~ (loss) ~~of these swaps~~gain in Comprehensive income ~~(loss).~~for the derivatives designated as hedging instruments. The impact of these derivative ~~instruments designated as hedging~~ instruments on Comprehensive income, ~~(loss),~~ Interest expense and AOCI were as follows:

For the three months ended September 30:

Gain Recognized in Comprehensive Income
(Effective Portion) Income Statement Location Loss Reclassified
from AOCI to Income
(Effective Portion)
2017 2016 2017 2016
Interest rate swaps $ 525
$ 2,386
Interest expense $ (972 ) $ (2,687 )



	(Loss) Gain Recognized in Comprehensive Income (Effective Portion)					Income Statement Location	Gain Reclassified from AOCI to Income (Effective Portion)				Total Consolidated Interest Expense
	2019		2018				2019		2018		2019			2018
Cash flow hedge
Interest rate swaps	$	—	$	(1,938	)	Interest expense	$	—	$	950
Net investment hedge
Cross currency swaps	—		1,378			N/A	—		—
Total	$	—	$	(560	)		$	—	$	950	$	(40,319	)	$	(58,319	)

For the nine months ended September 30:



	(Loss) Gain Recognized in Comprehensive Income (Effective Portion)					Income Statement Location	Gain Reclassified from AOCI to Income (Effective Portion)				Total Consolidated Interest Expense
	2019			2018			2019		2018		2019			2018
Cash flow hedge
Interest rate swaps	$	(11,818	)	$	7,307	Interest expense	$	11,818	$	912
Net investment hedge
Cross currency swaps	3,868			4,469		N/A	—		—
Total	$	(7,950	)	$	11,776		$	11,818	$	912	$	(136,438	)	$	(181,746	)

Gain Recognized in Comprehensive Income (Effective Portion) Income Statement Location Loss Reclassified
from AOCI to Income
(Effective Portion)
2017 2016 2017 2016
Interest rate swaps $ 6,625
$ 5,509
Interest expense $ (6,705 ) $ (8,002 )

Derivatives Not Designated as Hedging Instruments

~~Derivatives related~~MXN to ~~Series A Preferred Stock Offering~~USD Foreign Currency Swaps

~~The Company identified several derivatives associated~~In September 2019, Laureate entered into 3 MXN to USD swap agreements with a combined notional amount of MXN 453,146. During the ~~issuance~~fourth quarter of 2019, Laureate will deliver the ~~Series A Preferred Stock as discussed in Note 9, Commitments~~notional amount and ~~Contingencies. The embedded derivatives are related to certain contingent redemption features~~receive USD $23,000 at a rate of ~~the Series A Preferred Stock.~~exchange of 0.0508. As of September 30, ~~2017 and December 31, 2016, the~~2019, these swaps had an estimated fair values of these derivatives were assets of $28,314 and $4,464, respectively, and were recorded in Derivative instruments as noncurrent assets on the Consolidated Balance Sheets. During the first quarter of 2017, $4,382 was bifurcated from the carrying value of ~~the Series A Preferred Stock and recorded as derivative assets. The increase in estimated fair value during the nine months ended September 30, 2017 of $19,468~~$295 which was recorded ~~as an unrealized gain on derivatives~~ in ~~the Consolidated Statement of Operations.~~ Prepaid expenses and other current assets. These ~~derivatives are~~swaps were not designated as hedges for accounting ~~purposes thus~~purposes.

AUD to USD Foreign Currency Swaps

In September 2019, Laureate entered into 2 AUD to USD swap agreements with a combined notional amount of AUD 11,000. During the ~~changes~~fourth quarter ended 2019, Laureate will receive the notional amount and deliver USD $7,443 at a rate of exchange of 0.6766 USD per 1 AUD. As of September 30, 2019, these swaps had an estimated value of $11which was recorded in Derivative instruments as a current liability. These swaps were not designated as hedges for accounting purposes.

EUR to USD Foreign Currency Swaps - Spain and Portugal

As disclosed in the 2018 Form 10-K, in December 2018, Laureate entered into 2 EUR to USD swap agreements in connection with the signing of the sale agreement for the subsidiaries in Spain and Portugal. The purpose of the swaps was to mitigate the risk of foreign currency exposure on the sale proceeds. The first swap was deal contingent, with the settlement date occurring on the second business day following the completion of the sale. On the settlement date, Laureate delivered the notional amount of EUR 275,000 and received USD $314,573 at a rate of exchange of 1.1439, which resulted in a realized gain of $5,088. The second swap was a put/call option with a maturity date of April 8, 2019, where Laureate could put the notional amount of EUR 275,000 and call the USD amount of $310,750 at an exchange rate of 1.13. Based on expected timing of the sale transaction, the swap was terminated on April 2, 2019, resulting in a payment to the counterparty of $980 that included a deferred premium payment net of proceeds received. The realized gain of $5,088 and the payment of $980 are included in Settlement of derivatives related to sale of discontinued operations and net investment hedge in the consolidated statement of cash flows. As of December 31, 2018, these swaps had an aggregate estimated fair value ~~are recognized~~of $4,021, which was recorded in Derivative instruments as a ~~component~~current liability through a charge to unrealized loss on derivatives. These swaps were not designated as hedges for accounting purposes.

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

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

The cross currency and interest rate swap agreements are intended to provide a better correlation between our debt obligations and operating currencies. In 2010, one of our subsidiaries in Chile entered into ~~four~~4 cross currency and interest rate swap agreements. One of the swaps matures on December 1, 2024, and the remaining three mature on July 1, 2025 (the CLP to UF cross currency and interest rate swaps). The UF is a Chilean inflation-adjusted unit of account. The four swaps haveagreements with an aggregate notional amount of approximately $31,000, and convert CLP-denominated, floating-rate debt to fixed-rate UF-denominated debt. The UF is a Chilean inflation-adjusted unit of account. NaN of the swaps was scheduled to mature on December 1, 2024, and the remaining 3 were scheduled to mature on July 1, 2025 (the CLP to UF cross currency and interest rate swaps); however, during the first quarter 2019, the Company elected to settle all 4 swaps for a net cash payment of approximately USD $8,200. In addition, Chile also elected to repay a portion of the principal balance outstanding for certain notes payable, as discussed in Note 9, Debt. This payment is included in (Payments for) proceeds from settlement of derivative contracts on the consolidated statement of cash flows. The CLP to UF cross currency and interest rate swaps were not designated as hedges for accounting purposes. As of ~~September 30, 2017 and~~ December 31, ~~2016,~~2018, these swaps had an estimated fair value of ~~$7,864 and $7,420, respectively,~~$6,656 which was recorded in Derivative instruments as a long-term liability.

~~THINK Interest Rate~~

EUR to USD Foreign Currency Swaps - Cyprus and Italy

~~Laureate acquired THINK on~~As disclosed in the 2018 Form 10-K, in December ~~20, 2013,~~2017, the Company entered into a total of 6 EUR to USD forward exchange swap agreements in connection with the sale of its institutions in Cyprus and ~~financed a portion~~Italy. The purpose of the ~~purchase price by borrowing AUD 45,000 (US $35,415 at September 30, 2017) under a syndicated facility agreement in~~swaps was to mitigate the ~~form~~risk of two term loans of AUD 22,500 each. The terms of the syndicated facility agreement required THINK to enter into an interest rate swap within 45 days from the agreement's December 20, 2013 effective date, in order to convert at least 50% of the AUD 45,000 of term loan debt from a variable interest rate basedforeign currency exposure on the ~~BBSY bid rate,~~sale proceeds. The swaps had an ~~Australia bank rate, to a fixed interest rate. Accordingly, on January 31, 2014, THINK executed an interest rate swap agreement with an original~~aggregate notional amount of ~~AUD 22,500~~EUR 200,000 and matured on January 16, 2018, resulting in a total realized loss on derivatives of $9,960, which was included in Settlement of derivatives related to ~~satisfy this requirement~~sale of discontinued operations and ~~converted AUD 22,500 (US $17,708 at~~net investment hedge on the consolidated statement of cash flows for the nine months ended September 30, ~~2017) of the variable rate component of the term loan debt to a fixed interest rate of 3.86%.~~2018. The ~~notional amount of the swap decreases quarterly based on the terms of the agreement, and the swap matures on December 20, 2018. This interest rate swap was~~swaps were not designated as ~~a hedge~~hedges for accounting purposes.

Derivatives related to Series A Preferred Stock Offering

As disclosed in the 2018 Form 10-K, in December 2016 and January 2017, the Company issued shares of convertible redeemable preferred stock (the Series A Preferred Stock) and identified several embedded derivatives related to certain contingent redemption features of the Series A Preferred Stock. These derivatives were not designated as hedges for accounting purposes and ~~had an~~therefore the changes in estimated fair value were recognized as a component of earnings. The Series A Preferred Stock was converted into Class A common stock on April 23, 2018. The estimated fair value of ~~$230~~these derivatives at the conversion date was approximately $140,300; accordingly, the derivative assets were recorded at their estimated fair values through a corresponding gain on derivatives, a component of non-operating income. The increase in the fair value of the derivatives can be attributed to the use of the Monte Carlo Simulation Method to value the derivatives prior to the April 23, 2018 conversion date, when the probability of conversion increased to 100% and ~~$330 at September 30, 2017 and December 31, 2016, respectively, which~~the valuation inputs became definitive. In connection with the conversion of the Series A Preferred Stock into Class A common stock, the carrying value of the derivative assets was ~~recorded~~reclassified into equity in ~~Derivative instruments as a long-term liability.~~April 2018.

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



	For the three months ended September 30,					For the nine months ended September 30,
	2019		2018			2019		2018
Unrealized Gain (Loss)
Contingent redemption features - Series A Preferred Stock	$	—	$	—		$	—	$	(42,140	)
Cross currency and interest rate swaps	284		33			4,305		4,391
Interest rate swaps	—		36			—		138
	284		69			4,305		(37,611		)
Realized (Loss) Gain
Contingent redemption features - Series A Preferred Stock	—		—			—		140,320
Cross currency and interest rate swaps	—		(213		)	3,794		(10,597		)
	—		(213		)	3,794		129,723
Total Gain (Loss)
Contingent redemption features - Series A Preferred Stock	—		—			—		98,180
Cross currency and interest rate swaps	284		(180		)	8,099		(6,206		)
Interest rate swaps	—		36			—		138
Gain (loss) on derivatives, net	$	284	$	(144	)	$	8,099	$	92,112

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

2017 2016 2017 2016
Unrealized (Loss) Gain
Contingent redemption features - Series A Preferred $ (19,974 ) $ —
$ 19,468
$ —
Cross currency and interest rate swaps 151
(3,979 ) 24
(1,514 )
Interest rate swaps 58
17
129
(34 )
(19,765 ) (3,962 ) 19,621
(1,548 )
Realized (Loss) Gain
Cross currency and interest rate swaps (165 ) 4,539
(434 ) (6,530 )
Interest rate swaps —
(61 ) —
(157 )
(165 ) 4,478
(434 ) (6,687 )
Total (Loss) Gain
Contingent redemption features - Series A Preferred (19,974 ) —
19,468
—
Cross currency and interest rate swaps (14 ) 560
(410 ) (8,044 )
Interest rate swaps 58
(44 ) 129
(191 )
(Loss) gain on derivatives, net $ (19,930 ) $ 516
$ 19,187
$ (8,235 )

The realized gain on derivatives during the three months ended September 30, 2016 was from foreign exchange forward contracts related to the sale of institutions in France that matured in July 2016. The realized loss on derivatives during the nine months ended September 30, 2016 was from a deal-contingent forward exchange swap agreement related to the sale of our Swiss and associated institutions, less the gain from the aforementioned foreign exchange forward contracts.

Credit Risk and Credit-Risk-Related Contingent Features

Laureate’s derivatives expose us to credit risk to the extent that the counterparty may possibly fail to perform its contractual obligation. The amount of our credit risk exposure is equal to the fair value of the derivative when any of the derivatives are in a net gain position. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the estimated fair values of derivatives in a gain position were ~~$29,721~~$295 and $4,464, respectively; however, this carrying value relates almost entirely to the redemption rights of the holders of the Series A Preferred Stock, which do not expose us to credit risk. Our counterparty credit risk is currently limited to the 2024 Term Loan Interest Rate Swaps with aggregate fair values in a gain position of $1,407 as of September 30, 2017.$3,259, respectively.

Laureate has limited its credit risk by only entering into derivative transactions with highly rated major financial institutions. We have not entered into collateral agreements with our derivatives' counterparties. At September 30, ~~2017, one~~2019, 1 institution ~~which~~ was ~~rated Aa3, four institutions which were~~ rated A1 and ~~one~~1 institution ~~which was~~as rated A3A2 by the global rating agency of Moody's Investors ~~Service~~Service. These financial institutions accounted for all of Laureate's derivative credit risk exposure.

Laureate's agreements with its derivative counterparties contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to a default on the indebtedness. As of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, we had not breached any default provisions and had not posted any collateral related to these agreements. If we had breached any of these provisions, we could have been required to settle the obligations under the derivative agreements for an amount that we believe would approximate their estimated fair value of ~~$8,094~~$11 as of September 30, ~~2017~~2019 and ~~$12,968~~$10,677 as of December 31, ~~2016.~~2018.

Note ~~14.~~16. Income Taxes

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

Laureate's income tax provisions for all periods consist of federal, state and foreign income taxes. The tax provisions for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 were based on estimated full-year effective tax rates, after giving effect to significant

items related specifically to the interim periods, including the mix of income for the period between higher-taxed and lower-taxed jurisdictions. Laureate has operations in multiple countries ~~many of which have~~at various statutory tax rates ~~lower than the United States~~ or which are tax-exempt entities, and other operations that are loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss. ~~Generally, lower~~

Laureate records interest and penalties related to uncertain tax ~~rates in these foreign jurisdictions along with~~positions as a component of Income tax expense. During the nine months ended September 30, 2019, Laureate recognized interest and penalties related to income taxes of $3,571. Laureate had $29,420of accrued interest and penalties as of September 30, 2019. During the nine months ended September 30, 2019, Laureate derecognized $8,482of previously accrued interest and penalties. Approximately $24,882of unrecognized tax benefits, if recognized, will affect the effective income tax rate. It is reasonably possible that Laureate’s ~~intent and ability~~unrecognized tax benefits may decrease within the next 12 months by up to ~~indefinitely reinvest foreign earnings outside~~approximately $13,449as a result of the ~~United States results~~lapse of statutes of limitations and as a result of the final settlement and resolution of outstanding tax matters in ~~an effective tax rate significantly lower than the statutory rate in the United States.~~various jurisdictions.

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

~~As discussed in Note 1, Description~~We have two classes of ~~Business, on January 31, 2017 our~~ common stock, ~~was reclassified into shares of~~ Class BA common stock and ~~on February 6, 2017, we completed our IPO of~~ Class AB common stock. Other than voting rights, the Class B common stock has the same rights as the Class A common stock and therefore both are treated as the same class of stock for purposes of the earnings per share calculation. Laureate computes basic earnings per share (EPS) by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that would occur if share-based compensation ~~awards/arrangements or~~awards, contingently issuable shares, or convertible securities were exercised or converted into common stock. To calculate the diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock, restricted stock units, and ~~other share-based compensation arrangements~~contingently issuable shares determined using the treasury stock method, and convertible securities using the if-converted method.

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

For the three months ended September 30, 2017 2016
Numerator used in basic and diluted (loss) earnings per common share:
(Loss) income from continuing operations attributable to Laureate Education, Inc. $ (97,959 ) $ 86,317

Accretion of redemption value of redeemable noncontrolling interests and equity (105 ) 1,426
Adjusted for: accretion related to noncontrolling interests and equity redeemable at fair value —
756
Accretion of Series A convertible redeemable preferred stock (83,955 ) —
Distributed and undistributed earnings to participating securities —
(22 )
Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity (84,060 ) 2,160
Net (loss) income available to common stockholders $ (182,019 ) $ 88,477

Denominator used in basic and diluted (loss) earnings per common share:
Basic weighted average shares outstanding 178,871
133,303
Effect of dilutive stock options —
828
Effect of dilutive restricted stock units —
98
Dilutive weighted average shares outstanding 178,871
134,229

Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share $ (1.02 ) $ 0.66
Diluted (loss) earnings per share $ (1.02 ) $ 0.66



For the three months ended September 30,	2019			2018
Numerator used in basic and diluted earnings (loss) per common share for continuing operations:
Loss from continuing operations	$	(28,526	)	$	(40,353	)
Net (income) loss attributable to noncontrolling interests	(12		)	12
Loss from continuing operations attributable to Laureate Education, Inc.	(28,538		)	(40,341		)

Accretion of redemption value of redeemable noncontrolling interests and equity	(193		)	324
Net loss from continuing operations available to common stockholders for basic and diluted earnings (loss) per share	(28,731		)	(40,017		)

Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:
Loss from discontinued operations, net of tax	$	(27,137	)	$	(37,905	)
Loss on sales of discontinued operations, net of tax	(41,131		)	(18,426		)
Loss attributable to noncontrolling interests	1,580			1,883
Net loss from discontinued operations for basic and diluted earnings (loss) per share	$	(66,688	)	$	(54,448	)

Denominator used in basic and diluted earnings (loss) per common share:
Basic and diluted weighted average shares outstanding	224,193			224,037

Basic and diluted loss per share:
Loss from continuing operations	$	(0.13	)	$	(0.18	)
Loss from discontinued operations	(0.30		)	(0.24		)
Basic and diluted loss per share	$	(0.43	)	$	(0.42	)

For the nine months ended September 30, 2017 2016
Numerator used in basic and diluted (loss) earnings per common share:
(Loss) income from continuing operations attributable to Laureate Education, Inc. $ (104,380 ) $ 330,539

Accretion of redemption value of redeemable noncontrolling interests and equity (635 ) 3,538
Adjusted for: accretion related to noncontrolling interests and equity redeemable at fair value (6,357 ) (201 )
Accretion of redemption value of Series A Preferred Stock (185,149 ) —
Distributed and undistributed earnings to participating securities —
(104 )
Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity (192,141 ) 3,233
Net (loss) income available to common stockholders $ (296,521 ) $ 333,772

Denominator used in basic and diluted (loss) earnings per common share:
Basic weighted average shares outstanding 167,261
133,291
Effect of dilutive stock options —
858
Effect of dilutive restricted stock units —
68
Dilutive weighted average shares outstanding 167,261
134,217

Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share $ (1.77 ) $ 2.50
Diluted (loss) earnings per share $ (1.77 ) $ 2.49



For the nine months ended September 30,	2019			2018
Numerator used in basic and diluted earnings (loss) per common share for continuing operations:
Loss from continuing operations	$	(37,775	)	$	(36,641	)
Net income attributable to noncontrolling interests	(61		)	(78		)
Loss from continuing operations attributable to Laureate Education, Inc.	(37,836		)	(36,719		)

Accretion of redemption value of redeemable noncontrolling interests and equity	264			1,130
Adjusted for: accretion related to noncontrolling interests and equity redeemable at fair value	—			(559		)
Accretion of Series A Preferred Stock	—			(61,974		)
Gain upon conversion of Series A Preferred Stock	—			74,110
Subtotal: accretion of other redeemable noncontrolling interests and equity and Series A Preferred Stock, net	264			12,707
Net loss available to common stockholders for basic earnings (loss) per share	$	(37,572	)	$	(24,012	)
Adjusted for: accretion of Series A Preferred Stock	—			61,974
Adjusted for: gain upon conversion of Series A Preferred Stock	—			(74,110		)
Net loss from continuing operations available to common stockholders for diluted earnings (loss) per share	$	(37,572	)	$	(36,148	)

Numerator used in basic and diluted earnings (loss) per common share for discontinued operations:
Income from discontinued operations, net of tax	$	66,472		$	23,551
Gain on sales of discontinued operations, net of tax	848,390			311,904
Loss (income) attributable to noncontrolling interests	583			(237		)
Net income from discontinued operations for basic and diluted earnings (loss) per share	$	915,445		$	335,218

Denominator used in basic and diluted earnings (loss) per common share:
Basic and diluted weighted average shares outstanding	224,498			209,129

Basic earnings (loss) per share:
Loss from continuing operations	$	(0.17	)	$	(0.11	)
Income from discontinued operations	4.08			1.60
Basic earnings per share	$	3.91		$	1.49
Diluted earnings (loss) per share:
Loss from continuing operations	$	(0.17	)	$	(0.17	)
Income from discontinued operations	4.08			1.60
Diluted earnings per share	$	3.91		$	1.43

The shares of Class A common stock that would be issued upon completion of the conversion of the Series A Preferred Stock are not included in the calculation of diluted EPS as the effect would have been antidilutive. The following table summarizes the number of stock options, ~~and~~ shares of restricted stock and restricted stock units (RSUs) that were excluded from the diluted EPS calculations because the effect would have been antidilutive:



	For the three months ended September 30,		For the nine months ended September 30,
	2019	2018	2019	2018
Stock options	8,650	9,328	8,956	9,628
Restricted stock and RSUs	733	931	854	1,034

For the three months
ended September 30, For the nine months
ended September 30,
2017 2016 2017 2016
Stock options 13,443
5,414
12,957
2,931
Restricted stock 843
168
730
131

~~Note~~ 16. ~~Related Party Transactions~~

~~Corporate~~

~~Santa Fe University of Arts and Design (SFUAD)~~

SFUAD is owned by Wengen Alberta, Limited Partnership (Wengen), our controlling stockholder. Laureate is affiliated with SFUAD, but does not own or control it and, accordingly, SFUAD is not included in the financial results of Laureate. On May 18, 2016, SFUAD announced that it had signed an agreement to be acquired by a private education provider with a global network of colleges and universities that focus on art and design education. This agreement was terminated by the parties thereto on March 29, 2017. On April 12, 2017, SFUAD announced that it plans to close after the end of the 2017-2018 academic year and will work with its students on a phased teach-out and transfer process for students who are eligible to complete their degrees by May 2018 and appropriate transfer opportunities for other students. The teach-out plan has been approved by the Higher Learning Commission (HLC).

~~Transactions between Laureate and Affiliates, Directors and a Former Executive~~

During the first quarter of 2017, Laureate made a charitable contribution of $2,000 to the Sylvan Laureate Foundation, a non-profit foundation that supports programs designed to promote education and best practices and principles in teaching. The payment was accrued in prior periods.

~~An affiliate of one of the Wengen investors acted as a financial adviser in connection with our IPO and we paid this affiliate $2,768 for its services during the nine months ended September 30, 2017.~~

~~During the nine months ended September 30, 2017, we made payments of approximately $803 in the aggregate to members of our Board for their services as directors.~~

During the first quarter of 2017, the Company paid in full a note payable to a former executive of approximately $4,280, which represented the original note payable of $3,771 plus accrued interest. As previously disclosed in our 2016 Form 10-K, the note payable was issued in 2014 in exchange for vested share-based compensation and was payable upon consummation of the IPO.

~~EMEAA~~

~~Morocco~~

~~Transactions between Laureate and Noncontrolling Interest Holder of Laureate Somed Education Holding SA (LSEH)~~

LSEH is 60% owned and consolidated by Laureate and is the entity that operates Université Internationale de Casablanca, our institution in Morocco. The 40% noncontrolling interest holder of LSEH has made loans to LSEH, and as of December 31, 2016, we had a related party payable of $7,936 to the noncontrolling interest holder for the outstanding balance of and accrued interest on these loans, all of which was recorded as current.

During the nine months ended September 30, 2017, the maturity dates of five loans made by the noncontrolling interest holder were extended. The first loan was made by the noncontrolling interest holder in December 2013 and the maturity date was extended from December 2016 to December 2018. The second loan was made by the noncontrolling interest holder in March 2015 and the maturity date was extended from September 2016 to September 2019. The third loan was made by the noncontrolling interest holder in June 2015 and the maturity date was extended from December 2016 to December 2018. The fourth loan was made by the noncontrolling interest holder in April 2014 and the maturity date was extended from April 2017 to April 2019. The fifth loan was made by the noncontrolling interest holder in October 2015 and the maturity date was extended from April 2017 to October 2019. The total outstanding balance of these five loans, including accrued interest, at the extension dates was Moroccan Dirham (MAD) 74,262 (US $7,858 at September 30, 2017). Each of these loans bears an interest rate of 4.5% per annum.

As of September 30, 2017, we had total related party payables of $8,841 to the noncontrolling interest holder of LSEH for the outstanding balance on these loans plus accrued interest, of which $881 and $7,960 was recorded as current and noncurrent, respectively.

~~China~~

~~Transactions between China businesses and Noncontrolling Interest Holders of HIEU~~

A portion of real property that HIEU has paid for, including land and buildings, is mortgaged as collateral for corporate loans that the entity controlled by certain noncontrolling interest holders of HIEU has entered into with third-party banks. In December 2013, the noncontrolling interest holders of HIEU signed an agreement with Laureate and committed to: (1) remove all encumbrances on HIEU’s real property no later than September 30, 2014 and (2) cause the entity to complete the transfer of title relating to the encumbered real property to HIEU no later than December 31, 2014. Under the terms of this agreement, the noncontrolling interest holders also agreed to pay any and all transfer taxes, fees and other costs that are required in connection with the removal of the encumbrances and the transfer of titles, which are estimated to be approximately $2,000. As collateral for their performance under the agreement, the noncontrolling interest holders pledged to Laureate their 30% equity interest in the sponsoring entity of HIEU. The noncontrolling interest holders of HIEU have not completed their commitment to remove the encumbrances over the real property or completed the transfer of the real property. Under the terms of the agreement, Laureate has the right to receive the sale proceeds of the noncontrolling interest holders' 30% equity interest, up to the amount owing to it under the equity pledge, in priority to other creditors of the noncontrolling interest holders.

On February 22, 2016, certain creditors of the noncontrolling interest holders initiated an enforcement process against the noncontrolling interest holders and requested the court to auction a portion of the equity interest of the noncontrolling interest holders (being a 22.8% interest in the sponsoring entity of HIEU). The most recent round of the court auction process was held on August 21, 2017. At that auction, Guangdong Nanbo Education Investment Co. Ltd successfully bid approximately RMB 508,000 (approximately $77,000 as of September 30, 2017) for the shares being auctioned. It is expected that the sale of these

shares will be completed before the end of 2017. As the registered pledgee, Laureate has the right to receive the sale proceeds of the noncontrolling interest holders' equity interest, up to the amount owing to it under the equity pledge, in priority to other creditors of the noncontrolling interest holders. As of both September 30, 2017 and December 31, 2016, Laureate’s net carrying value of the encumbered real property was approximately $12,000.

~~South Africa~~

~~Transactions between Laureate and Noncontrolling Interest Holder of Monash South Africa (MSA)~~

During the first quarter of 2017, we received an additional loan from the noncontrolling interest holder of MSA in the amount of $943. The loan matures in January 2026 and bears interest at a rate of 10.5% per annum.

Note ~~17.~~18. 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. ~~For further description, see~~In addition, our ~~2016 Form 10-K. Discussed below~~institutions are ~~those matters that had material developments during the nine months ended September 30, 2017.~~

~~Turkish Regulation - Bilgi Annual Audit~~

The Company previously disclosed in its 2016 Form 10-K that the Turkish Higher Education Council (the YÖK), which regulates Istanbul Bilgi University (Bilgi), a member of the Laureate International Universities network located in Istanbul, Turkey, was conducting its annual audit of Bilgi’s operations (the Annual Audit). On April 18, 2017, Bilgi received from the YÖK the results of the Annual Audit. The Annual Audit report requires, among other things, that (i) with respectsubject to ~~the 2017-2018 academic year, there be a reduction in the quota for the number of new students permitted to be admitted into Bilgi’s degree programs~~uncertain and (ii) Bilgi be reimbursed, not later than October 18, 2017, approximately $29,000 for payments previously made by Bilgi to a subsidiary of the Company for certain management, operational and student services, and intellectual property. The Company and Bilgi believe the charges to Bilgi for these services were at fair value and Bilgi has contested the findings of the Annual Audit that they constituted an improper wealth transfer. Demands also were made in the Annual Audit for the return or payment to Bilgi, by October 18, 2017, of other amounts involving approximately $8,000.

~~The Company believes that Bilgi is in compliance with all~~varying laws and ~~regulations. Bilgi exercised its right~~regulations, and any changes to ~~appeal this decision~~these laws or regulations or their application to the YÖK to demonstrate the validity and value of the services procured from the Company subsidiary but the YÖK has rejected that appeal. Bilgi has appealed the YÖK’s rejection of its appeal to the Turkish court system and has not been reimbursed for any of the payments made to the Company’s subsidiary for the services described above. As a result, as of October 18, 2017, Bilgi is in non-compliance with certain requirements of the Annual Audit report. As the Company currently consolidates Bilgi under the variable interest entity model, if the Company is unable to provide services under its contracts with Bilgi and receive the economic benefits from those contracts as a result of the determinations in the Annual Audit, deconsolidation of Bilgi could be required. Deconsolidation, if required, could have a material adverse effect on the Company’sus may materially adversely affect our business, financial condition and results of operations, including possible write-off of all or a portion of the Company’s investment in Bilgi and a reduction in operating income. At September 30, 2017 and December 31, 2016, Bilgi had total assets of approximately $134,000 and $83,000, respectively, and total liabilities of $117,000 and $63,000, respectively. Total liabilities include approximately $32,000 and $19,000 of net intercompany liabilities as of September 30, 2017 and December 31, 2016, respectively. During fiscal year 2016, Bilgi generated approximately $106,000 of the Company’s consolidated revenue and approximately $26,000 of the Company’s consolidated operating income and incurred approximately $6,000 of depreciation and amortization expense.

~~Chilean Regulation - Higher Education Bill~~

~~On July 5, 2016, the Chilean President submitted~~operations. There have been no material changes to the Chilean Congress a bill (the “2016 Higher Education Bill”) that was intended to change the entire regulatory landscape of higher education in Chile by, among other things, creating new special government administrative agencieslaws and enhancing the requirements for institutional accreditation of higher education institutions. Following its submission to the Chilean Congress, the 2016 Higher Education Bill was subject to national debate among different constituencies in the higher education system. As a result of these discussions, the Chilean executive branch decided to replace the 2016 Higher Education Bill with a new submission that would take into consideration the main concerns that were raised during those discussions. These discussions identified, among other things, (i) the need to reinforce, improve and enhance the state-owned universities, separating their regulation from the regulation applicable to other educational institutions, (ii) the need

~~to develop special~~ regulations for technical education, (iii) the need to improve regulations concerning the compliance by private universities with the requirement that they not be operated for profit, and (iv) the need to grant universal access to educational institutions.

In furtherance of these goals, on April 7, 2017, the Chilean executive branch submitted to the Chilean Congress a new bill (the “2017 Higher Education Bill”), which entirely supersedes the 2016 Higher Education Bill. The 2017 Higher Education Bill represents a simplified version of the 2016 Higher Education Bill and was based on the same principles and ideas as the earlier bill, as informed by the subsequent national debate on that bill. The 2017 Higher Education Bill considers the higher education system to be a mixed system composed of two subsystems, one for university education (including both state-owned institutions and private universities recognized by the state) and another for technical education (both state-owned technical training centers and private technical training centers and professional institutes).

Among other things, the 2017 Higher Education Bill would create the Undersecretary of Higher Education, who would propose policies on higher education to the Ministry of Education and policies regarding access, inclusion, retention and graduation of higher education students. The Undersecretary of Higher Education would also propose the allocation and management of public funds and manage the procedures relating to the granting and revocation of the official recognition of higher education institutions. The Undersecretary of Higher Education would also generate and coordinate instances of participation and dialogue with and amongaffecting our higher education institutions ~~promoting the connection between these institutions and the secondary education system.~~that are described in our 2018 Form 10-K.

The 2017 Higher Education Bill also includes new regulations applicable to not‑for‑profit educational institutions that would: (i) provide that their controllers and members can only be individuals, other not‑for‑profits or state‑owned entities; (ii) create the obligation to use their resources and reinvest their surplus or profits in the pursuit of their objectives and in enhancing the quality of the education they provide; (iii) create the obligation to have a board of directors, which cannot delegate its functions, and whose members cannot be removed unless approved by the majority of the board and for serious reasons; and (iv) prohibit related party transactions with their founders, controllers, members of the board, rector and their relatives or related entities, unless the counterparty to the transaction is another not‑for‑profit entity, or if the transaction involves entering into a labor agreement to carry out academic work for the educational institution. The bill provides further that in the event the educational institution enters into a related party transaction consistent with the above, or if such educational institution enters into a related party transaction with a different entity than those described above, such transaction also comply with the following requirements: (i) that it contribute to the best interests of the educational institution and to its mission and purpose; (ii) that the transaction be agreed under market conditions as to the price and general terms and conditions prevailing for such types of transactions; and (iii) that it be approved by a majority of the institution’s board of directors. The 2017 Higher Education Bill also would establish a new criminal felony of incompatible negotiations for those persons who, in their capacity of managing the educational institution’s assets, enter into any transaction with related parties having any personal interest or granting benefits to third parties without complying with the foregoing requirements. Among the sanctions for breaching such regulations, the person may be subject to imprisonment plus a fine of double the amount of the benefit that such person or entity had obtained.

On July 17, 2017, the Chamber of Deputies, which is the lower house of the Chilean Congress, passed the 2017 Higher Education Bill, substantially in the form described above. The 2017 Higher Education Bill has now moved to the Chilean Senate, where it has been referred for consideration by the Senate Education Commission. Members of the Chamber of Deputies have announced that they intend to bring constitutional challenges to 16 provisions of the bill passed by the Chamber of Deputies. If the 2017 Higher Education Bill is passed by the Chilean Senate without resolving the challenged provisions, those provisions would be referred to the Chilean Constitutional Court for resolution prior to the bill taking effect.

~~We are currently evaluating the effect the proposed 2017 Higher Education Bill would have on the Chilean institutions in the~~ ~~Laureate International Universities~~ network if it is adopted in the form introduced in the Chilean Congress and approved by the Chamber of Deputies. We cannot predict whether or not the proposed 2017 Higher Education Bill will be adopted in this form or if it, or any part of it, will survive constitutional challenge, or if any higher education legislation will be adopted that would affect the institutions in the ~~Laureate International Universities~~ ~~network. However, if any such legislation is adopted, it could have a material adverse effect on our results of operations and financial condition.~~

As the Company currently consolidates certain of its institutions in Chile under the variable interest entity model, the Company will review such consolidation upon passage of any new higher education bill. Deconsolidation of one or more of our Chilean institutions, if required, could have a material adverse effect on our financial condition and results of operations. At September 30, 2017 and December 31, 2016, the Chilean VIEs had total assets of approximately $806,000 and $687,000, respectively, and total liabilities of $186,000 and $93,000, respectively. Total assets include approximately $20,000 and $11,000 of net intercompany assets as of September 30, 2017 and December 31, 2016, respectively, as well as goodwill balances that could be reallocated among the VIE and non-VIE businesses within the Chile reporting unit if deconsolidation of the VIEs were required.

Note 1819. Fair Value Measurement

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

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

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

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

These levels are not necessarily an indication of the risk of liquidity associated with the financial assets or liabilities disclosed. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement, as required under ASC 820-10, ~~"Fair~~‘‘Fair Value Measurement."’’

Derivative instruments –

Laureate uses derivative instruments as economic hedges for bank debt, foreign exchange fluctuations and interest rate risk. Their values are derived using valuation models commonly used for derivatives. These valuation models require a variety of inputs, including contractual terms, market prices, forward-price yield curves, notional quantities, measures of volatility and correlations of such inputs. Our valuation models also reflect measurements for credit risk. Laureate concluded that the fair values of our derivatives are based on unobservable inputs, or Level 3 assumptions. The significant unobservable input used in the fair value measurement of the Company's derivative instruments is our own credit risk. Holding other inputs constant, a significant increase (decrease) in our own credit risk would result in a significantly lower (higher) fair value measurement for the Company's derivative instruments.

Equity securities - preferred stock investment

In 2013, Laureate purchased approximately 1,020 shares (the Shares) of preferred stock of a private education company for $5,000. This equity security did not have a readily determinable fair value. In June 2019, based on interest expressed by an investor to purchase the Shares, Laureate recorded this investment at its estimated fair value and recorded a non-operating gain of approximately $6,100. In September 2019, Laureate sold the Shares and received cash proceeds of $11,473, resulting in a total non-operating gain of $6,473 for the nine months ended September 30, 2019. The proceeds are included in Proceeds from sale of investment in the consolidated statement of cash flows.

Laureate’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, ~~2017~~2019 were as follows:


	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets
Derivative instruments	$	29,721	$	—	$	—	$	29,721	$	295	$	—	$	—	$	295
Liabilities
Derivative instruments	$	8,094	$	—	$	—	$	8,094	$	11	$	—	$	—	$	11

Introduction

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (the ‘‘MD~~&A’’)~~&A) is provided to assist readers of the financial statements in understanding the results of operations, financial condition and cash flows of Laureate Education, Inc. This MD&A should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. 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 Issued Accounting ~~Pronouncements.~~Standards.

Overview

Our Business

We are the largest ~~global~~international network of degree-granting higher education ~~institutions. As of September 30, 2017, we had more than one million~~institutions, primarily focused in Latin America, with 895,000 students enrolled at our 6830 institutions in 259 countries on more than ~~200~~150 campuses included in our continuing operations as of September 30, 2019, which we collectively refer to as the Laureate International Universities network. ~~We participate in the global higher education market, which was estimated to account for revenues of approximately $1.5 trillion in 2015, according to Global Silicon Valley (GSV).~~ We believe the global higher education market presents an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for quality higher education around the world. Advanced education opportunities drive higher earnings potential, and we believe the projected growth in the middle-class population worldwide and limited government resources dedicated to higher education create substantial opportunities for high-quality private institutions to meet this growing and unmet demand. Our outcomes-driven strategy is focused on enabling ~~millions of~~ students ~~globally~~ to prosper and thrive in the dynamic and evolving knowledge economy.

In 1999, we made our first investment in higher education and, since that time, we have developed into the global leader in higher education, based on the number of students, institutions and countries making up our network. As of September 30, ~~2017,~~2019, our ~~global~~international network of 6830 institutions comprised 56 29 institutions we owned or controlled, and ~~an additional12 institutions~~ one additional institution that we managed ~~or with which we had other relationships.~~through a joint venture arrangement. We have six ~~reporting~~operating segments as described below. We group our institutions by geography in: 1)1) Brazil; 2) Mexico; 3) ~~Andean & Iberian;~~Andean; 4) Central America & U.S. Campuses; and 5) ~~Europe, Middle East, Africa and Asia Pacific (EMEAA)~~Rest of World for reporting purposes.Our sixth segment, Online & Partnerships, includes fully online institutions that operate globally.

Discontinued Operations

~~Our Segments~~

~~As previously disclosed~~In 2017, the Company announced the divestiture of certain subsidiaries in our Rest of World and Central America & U.S. Campuses segments. On August 9, 2018, the Company announced the divestiture of additional subsidiaries located in Europe, Asia and Central America. After completing all of the announced divestitures, the Company’s remaining principal markets will be Brazil, Chile, Mexico and Peru, along with the Online and Partnerships segment and the institutions in Australia and New Zealand. At the time of the announcement on August 9, 2018, the markets being divested by sale (the Discontinued Operations) included the institutions in Portugal and Spain, which were part of the Andean segment, all remaining institutions in the Central America & U.S. Campuses segment, and all remaining institutions in the Rest of World segment except for Australia, New Zealand and the managed institutions in the Kingdom of Saudi Arabia and China. The institutions in the Kingdom of Saudi Arabia were managed under a contract that expired at the end of August 2019 and was not renewed. Accordingly, these institutions were disposed of other than by sale on August 31, 2019 and, beginning in the third quarter of 2019, have been included in Discontinued Operations for all periods presented. The divestitures represent a strategic shift that has a major effect on the Company's operations and financial results.Accordingly, in accordance with Accounting Standard Codification (ASC) 205-20, ‘‘Discontinued Operations,’’ the results of the divestitures that are part of the strategic shift are presented as discontinued operations in our consolidated financial statements included elsewhere in our Quarterly Report on Form 10-Q for all periods. Since our entire Central America & U.S. Campuses operating segment is included in Discontinued Operations, it no longer meets the ~~period ended June 30, 2017, effective August 1, 2017, we changed our operating segments in order to realign our segments according to how our chief operating decision maker now allocates resources~~criteria for a reportable segment under ASC 280, ‘‘Segment Reporting,’’ and, ~~assesses performance. The change includes the creation of three operating segments (Brazil, Mexico and Andean & Iberian)~~therefore, it is excluded from the ~~previous Latin America (LatAm) segment. Our institutions~~segments information for all periods presented. In addition, the portions of the Andean and Rest of World reportable segments that are included in ~~Spain and Portugal (Iberian)~~Discontinued Operations have ~~moved~~also been excluded from the ~~Europe, Middle East,~~segment information for all periods presented. Unless indicated otherwise, the information in the MD&A relates to continuing operations.

The Company has entered into sale agreements for a number of these entities and closing of sale transactions began in the first quarter of 2018. To date, we have completed the sales of subsidiaries in Cyprus, Italy, China, Germany, Morocco, Thailand, South Africa, India, Spain, Portugal, Turkey, and ~~Asia Pacific (EMEAA) segment and combined with our institutions in Chile and Peru to form~~Panama, as well as Kendall College, LLC (Kendall), the ~~Andean & Iberian segment. In addition, our institutions in Central America, which were previously part~~University of ~~the LatAm segment, have combined with our campus-based institutions~~St. Augustine for Health Sciences, LLC (St. Augustine) in the United States ~~which were previously~~and UniNorte, an institution in the Brazil segment that is included in continuing operations as it is not part of the ~~GPS segment, to form~~strategic shift. We have not yet completed the ~~Central America~~divestitures of our subsidiaries in Costa Rica, Honduras, and ~~U.S. Campuses segment. The Online & Partnerships segment consists~~Malaysia, as well as NewSchool of ~~the online institutions that were previously part of the GPS segment. This change has been reflected~~Architecture and Design, LLC (NSAD), a small campus-based institution in the ~~quarterly segment information beginning~~United States. We have a signed sale agreement for NSAD. See also Note 4, Discontinued Operations and Assets Held for Sale and Note 21, Subsequent Events, of our consolidated financial statements included elsewhere in ~~the third quarter of 2017, the period in which the change occurred. As required, the 2016 segment information that is presented for comparative purposes has also been revised to reflect~~ this ~~change.~~Form 10-Q.

Our Segments

Our campus-based segments generate revenues by providing an education that emphasizes professional-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. Our educational offerings are increasingly utilizing online and hybrid (a combination of online and in-classroom) courses and programs to deliver their curriculum. Many of our largest campus-based operations are in developing markets which are experiencing a growing demand for higher education based on favorable demographics and increasing secondary completion rates, driving increases in participation rates and resulting in continued growth in the number of higher education students. Traditional higher education students (defined as 18-24 year olds) have historically been served by public universities, which have limited capacity and are often underfunded, resulting in an inability to meet the growing student demand and employer requirements. This supply and demand imbalance has created a market opportunity for private sector participants. Most students finance their own education. However, there are some government-sponsored student financing programs which are discussed below. ~~These~~The campus-based segments include Brazil, Mexico, Andean, ~~& Iberian,~~ Central America & U.S. Campuses and ~~EMEAA.~~Rest of World. Specifics related to each of these campus-based segments and our Online & Partnerships segment are discussed below:

In Brazil, approximately 75% of post-secondary students are enrolled in private higher education institutions. While the federal government defines the national curricular guidelines, institutions are licensed to operate by city. Laureate owns 13 institutions in eight states throughout Brazil, with a particularly strong presence in the competitive São Paulo market. Many students finance their own education while others rely on the government-sponsored programs such as Prouni and FIES. As described in Note 4, Discontinued Operations and Assets Held for Sale, of our consolidated financial statements included elsewhere in this Form 10-Q, on April 16, 2019, the Company entered into an agreement to divest UniNorte, a traditional higher education institution in Manaus, Brazil. This transaction closed on November 1, 2019. See also Note 21, Subsequent Events, of our consolidated financial statements included elsewhere in this Form 10-Q.

Public universities in Mexico enroll approximately ~~two-thirds~~two thirds of students attending post-secondary education. However, many public institutions are faced with capacity constraints or the quality of the education is considered low. Laureate owns two

institutions and is present throughout the country with a footprint of over 40 campuses. Each institution in Mexico has a national license. Students in our Mexican institutions typically finance their own education.

The Andean ~~& Iberian~~ segment includes institutions in Chile ~~Peru, Portugal~~ and ~~Spain and has contractual relationships with a licensed institution in Ecuador.~~Peru. In Chile, private universities enroll approximately 80% of post-secondary ~~students.~~students and there are government-sponsored student financing programs. In Peru, the public sector plays a significant role, but private universities are increasingly providing the capacity to meet growing demand. In Spain and Portugal, the high demand for post-secondary education places capacity constraints on the public sector, pushing students to turn to the private sector for high-quality education. Chile has government-sponsored student financing programs, while in the other countries students generally finance their own education.

The Central America & U.S. Campuses segment includes institutions in Costa Rica, Honduras, Panama and the United States. Students in Central America typically finance their own education while students in the United States finance their education in a variety of ways, including U.S. Department of Education (DOE) Title IV programs. The entire Central America & U.S. Campuses segment is included in Discontinued Operations. As discussed in Note 21, Subsequent Events, of our consolidated financial statements included elsewhere in this Form 10-Q, we completed the sale of Panama in early October 2019.

The ~~EMEAA~~Rest of World segment includes campus-based institutions in ~~the European countries of Cyprus, Germany, Italy and Turkey, as well as locations in the Middle East, Africa and~~ Asia Pacific ~~consisting of campus-based institutions~~ with operations in Australia, ~~China, India,~~ Malaysia ~~Morocco,~~and New ~~Zealand, South Africa and Thailand.~~Zealand. Additionally, ~~EMEAA manages nine licensed institutions in~~ the ~~Kingdom~~Rest of ~~Saudi Arabia and~~World segment manages one ~~additional~~ institution in China through a joint venture arrangement. The institutions in Malaysia are included in Discontinued Operations.

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

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;~~standards, implementing strategic ~~initiatives;~~initiatives, and monitoring compliance with policies and controls throughout our operations. Our Corporate segment is an internal source of capital and provides financial, human resource, information technology, insurance, legal and tax compliance services. The Corporate segment also contains the eliminations of ~~inter-segment~~intersegment revenues and expenses.

The following information for our ~~operating~~reportable segments in continuing operations is presented as of September 30, ~~2017:~~2019:

Countries ⁽²⁾
Institutions Enrollment
2017 YTD Revenues ($ in millions) ⁽¹⁾
% Contribution to 2017 YTD Revenues
Brazil 1
13
275,000
$ 548.0
17 %
Mexico 1
2
212,300
452.0
14 %
Andean & Iberian 5
16
329,800
930.3
30 %
Central America & U.S. Campuses ⁽²⁾
4
8
71,000
219.1
7 %
EMEAA ⁽³⁾
13
26
126,900
468.3
15 %
Online & Partnerships ⁽²⁾
2
3
64,700
521.0
17 %
Total ^{(1) (2)}
25
68
1,079,700
$ 3,116.8
100 %



	Countries	Institutions	Enrollment	2019 YTD Revenues ($ in millions) ⁽¹⁾		% Contribution to 2019 YTD Revenues
Brazil	1	13	282,700	$	421.1	18	%
Mexico	1	2	206,500	464.7		19	%
Andean	2	8	331,900	869.2		37	%
Rest of World	3	4	15,600	137.2		6	%
Online & Partnerships ⁽²⁾	2	3	58,300	477.0		20	%
Total ⁽¹⁾	9	30	895,000	$	2,367.2	100	%

⁽¹⁾The ~~elimination of inter-segment revenues and~~ amounts related to Corporate, net of elimination of intersegment revenues, which total ~~$21.9~~$2.1 million, isare not separately presented.

⁽²⁾~~Our Central America & U.S. Campuses~~ We no longer accept new enrollments at the University of Liverpool and ~~Online & Partnerships segments both have institutions located in~~ the ~~United States. The total reflects the elimination~~University of ~~this duplication.~~Roehampton.

⁽³⁾~~Effective October 2017, Blue Mountains International Hotel Management School Pty Ltd has transferred its course offerings to Torrens University, another institution in the~~ ~~Laureate International Universities~~ ~~network.~~

Challenges

Our ~~global~~international operations are subject to complex business, economic, legal, regulatory, political, tax and foreign currency risks, which may be difficult to adequately address. The majority of our operations are outside the United States. As a result, we face risks that are inherent in international operations, including: fluctuations in exchange rates, possible currency devaluations, inflation and hyper-inflation; price controls and foreign currency exchange restrictions; potential economic and political instability in the countries in which we operate; expropriation of assets by local governments; key political elections and changes in government policies; multiple and possibly overlapping and conflicting tax laws; and compliance with a wide variety of foreign laws. There are also risks associated with our decision to divest certain operations. See ‘‘Risk Factors—Risks Relating to Our Continuing Business—Our divestiture activities and the ongoing strategic shift in our business may disrupt our ongoing business, involve increased expenses and present risks not contemplated at the time of the transactions,” in our 2018 Form 10-K. We plan to ~~continue~~

to grow our ~~business globally by acquiring or establishing private higher education institutions.~~continuing operations organically by: 1) adding new programs and course offerings; 2) expanding target student demographics; and 3) increasing capacity at existing and new campus locations. Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries.

Regulatory Environment and Other Matters

Our business is subject to regulation by various agencies based on the requirements of local jurisdictions. These agencies continue to review and update regulations as they deem necessary. 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 regulations. ~~For a detailed discussion~~See ‘‘Item 1A—Risk Factors—Risks Relating to Our Continuing Business—Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of ~~our different regulatory environments, see~~operations,” ‘‘Risk Factors—Risks Relating to Our Continuing Business—Political and regulatory developments in Chile may materially adversely affect us,” ‘‘Risk Factors—Risks Relating to Our Highly Regulated Industry in the United States,’’ and ‘‘Item 1—Business—Industry Regulation,’’ in our 2018 Form 10-K.

Chilean Regulatory Developments

The New Law established a Superintendency of Higher Education, with authority to regulate institutions of higher education and promulgate regulations and procedures implementing the New Law. As of May 29, 2019, the New Law’s provisions regarding related party transactions came into force; however, the Superintendent has not issued any further interpretive guidance or

regulations. Immediately prior to these provisions coming into force, each of the Chilean non-profit universities and the relevant Laureate services provider reached an agreement to terminate the prior network services agreement in favor of an open bidding process, wherein unrelated third parties and Laureate-related providers were invited to compete in the provision of the range of services that are essential to the fulfillment of each of their academic missions. The Chilean non-profit universities have completed substantially all of the bidding and contractual processes subsequent to the May 2019 contract terminations. The Company participated in these open bid processes, conducted by a third party, and was judged to have submitted the superior bid in many of them. Awarded contracts that do not need any approval by the Superintendent should enter into force during the fourth quarter, and contracts that need approval of the Superintendent may also enter into force during the fourth quarter. Within the ordinary regulatory course of supervision, the Company and the Chilean non-profit universities will continue to interact with the Superintendent to maintain compliance with the New Law. We do not believe that the New Law will change our relationship with our two tech/voc institutions in Chile that are for-profit entities. Additionally, we will continue to evaluate our accounting treatment of the Chilean non-profit universities to determine whether we can continue to consolidate them. Our continuing evaluation of the impact of the New Law may result in changes to our expectations due to changes in our interpretations of the law, assumptions used, and additional guidance that may be issued.

U.S. Regulatory Developments

On September 8, 2016, ~~Form 10-K,~~the Minnesota Office of Higher Education (MOHE) sent to Walden University an information request regarding its doctoral programs and ~~‘‘Item 1A—Risk Factors’’~~complaints filed by doctoral students as part of ~~this Quarterly Report on Form 10-Q.~~a program review that MOHE was conducting. On October 23, 2019, MOHE completed its program review and issued a final report that indicated no findings of noncompliance. As part of its report, MOHE made recommendations for Walden University to develop certain goals and benchmarks with respect to its doctoral programs.

Key Business Metrics

Enrollment

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

Each of our institutions has an enrollment cycle that varies by geographic region and academic program. During each academic year, each institution has a ~~"Primary Intake"~~‘‘Primary Intake’’ period in which the majority of the enrollment occurs. Most institutions also have one or more smaller ~~"Secondary Intake"~~‘‘Secondary Intake’’ periods. The first calendar quarter generally coincides with the Primary Intakes for our institutions in the Brazil, ~~the~~ Andean ~~Region, Central America, Australia, New Zealand, South Africa~~ and ~~Saudi Arabia.~~Rest of World segments. The third calendar quarter generally coincides with the Primary Intakes for our institutions in the Mexico ~~the Iberian Region, U.S. Campuses, Europe, China, India, Malaysia, Thailand~~ and ~~the~~ Online & Partnerships ~~segment.~~segments.

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

Pricing

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 ensure that we remain competitive in all the markets in which we operate.

Principal Components of Income Statement

Revenues

~~Tuition is the largest component~~The majority of our ~~revenues~~revenue is derived from tuition and ~~we recognize tuition revenues on a weekly basis as classes are being taught.~~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. Deferred revenue and student deposits on our consolidated balance sheets consist of tuition paid prior to the start of academic sessions and unearned tuition amounts recorded as accounts receivable after an academic session begins. 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 ~~reported~~recognized net of scholarships, other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. In addition to tuition revenues, we generate other revenues from ~~ancillary product sales,~~student fees, dormitory/residency ~~fees, student~~ fees and other education-related ~~services.~~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.

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, ~~for institution employees,~~ depreciation and amortization, rent, utilities, bad debt expenses and marketing and promotional costs to grow future enrollments. In general, a significant portion of our direct costs tend to be variable in nature and trend with enrollment, and management continues to monitor and improve the efficiency of instructional delivery. Conversely, as campuses expand, direct costs may grow faster than enrollment growth as infrastructure investments are made in anticipation of future enrollment growth.

General and Administrative Expenses

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

Factors Affecting Comparability

Acquisitions

Our past experiences provide us with the expertise to further our mission of providing high-quality, accessible and affordable higher education to students by expanding into new markets if opportunities arise, primarily through acquisitions. Acquisitions affect the comparability of our financial statements from period to period. Acquisitions completed during one period impact comparability to a prior period in which we did not own the acquired entity. Therefore, changes related to such entities are considered ~~"incremental~~‘‘incremental impact of ~~acquisitions"~~acquisitions’’ for the first 12 months of our ownership. We have made noonly small acquisitions in ~~2016~~2019 and ~~only one very small acquisition in 2017~~2018 that had essentially no impact on the comparability of the ~~2017 and 2016~~ periods presented.

Dispositions

~~Certain strategic initiatives may include the sale of institutions such as the 2016 sales~~Any dispositions of our Swiss and French institutions. In June 2016, we completed the sale of our Swiss and associated institutions for total net proceeds of approximately $339 million, and in July 2016 we completed the sale of our French institutions for total net proceeds of approximately $207 million. Such dispositionscontinuing operations affect the comparability of our financial statements from period to period. Dispositions completed during one period impact comparability to a prior period in which we owned the divested entity. Therefore, changes related to such entities are considered ~~"incremental~~‘‘incremental impact of ~~dispositions"~~dispositions’’ for the first 12 months subsequent to the disposition. As discussed above, all of the divestitures that are part of the strategic shift announced in August 2018 are included in Discontinued Operations for all periods presented. Following the completion of its sale, UniNorte, which is part of continuing operations, will be included in the incremental impact of dispositions beginning in the fourth quarter of 2019.

Foreign Exchange

The majority of our institutions are located outside the United States. These institutions enter into transactions in currencies other than USD and keep their local financial records in a functional currency other than the USD. We monitor the impact of foreign currency movements and the correlation between the local currency and the USD. Our revenues and expenses are generally denominated in local currency. The USD is our reporting currency and our subsidiaries operate in various other functional currencies, including: Australian Dollar, Brazilian Real, Chilean Peso, ~~Chinese Renminbi, Costa Rican Colon,~~ Euro, ~~Honduran Lempira, Indian Rupee, Malaysian Ringgit,~~ Mexican Peso, ~~Moroccan Dirham,~~ New Zealand Dollar, and Peruvian Nuevo ~~Sol, Polish Złoty, Saudi Riyal, South African Rand, Thai Baht and Turkish Lira.~~Sol. The principal foreign exchange exposure is the risk related to the translation of revenues and expenses incurred in each country from the local currency into USD. See ‘‘Item 1A—Risk Factors—Risks Relating to Our Continuing Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates’’ in our 2018 Form 10-K. In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we presentorganic 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.

Seasonality

Most of the institutions in our network have a summer break during which classes are generally not in session and minimal revenues are recognized. In addition to the timing of summer breaks, holidays such as Easter also have an impact on our academic calendar. Operating expenses, however, do not fully correlate to the enrollment and revenue cycles, as the institutions continue to incur expenses during summer breaks. Given the geographic diversity of our institutions and differences in timing of summer breaks, our second and fourth quarters are stronger revenue quarters as the majority of our institutions are in session for most of these respective quarters. Our first and third fiscal quarters are weaker revenue quarters because the majority of our institutions have summer breaks for some portion of one of these two quarters. Due to this seasonality, revenues and profits in any one quarter are not necessarily indicative of results in subsequentquarters and may not be correlated to new enrollment in any one quarter.

Income Tax Expense

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes. Laureate has operations in multiple countries, many of which have statutory tax rates lower than the United States. Generally, lower tax rates in these foreign jurisdictions, along with Laureate's intent and ability to indefinitely reinvest foreign earnings outside of the United States, results in an effective tax rate lower than the statutory rate in the United States. Further,Also, discrete items can arise in the course of our operations that can further impact the ~~Company's~~Company’s effective tax rate for the period. Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities, our tax-exempt entities and our loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss.

Results from the Discontinued Operations

The results of operations at our discontinued subsidiaries were as follows:



	For the three months ended						For the nine months ended
	September 30,						September 30,
(in millions)	2019			2018			2019			2018
Revenues	$	65.3		$	160.3		$	446.0		$	674.0
Depreciation and amortization	0.3			7.0			1.2			28.8
Share-based compensation expense	0.1			0.2			0.4			0.9
Other direct costs	64.7			188.3			343.3			561.5
Loss on impairment of assets	25.0			—			25.0			—
Operating (loss) income	(24.8		)	(35.2		)	76.1			82.8
Other non-operating (expense) income	(0.3		)	(5.7		)	6.3			(18.8		)
Pretax (loss) income of discontinued operations	(25.1		)	(40.8		)	82.4			64.0
Income tax (expense) benefit	(2.1		)	2.9			(15.9		)	(40.4		)
(Loss) income from discontinued operations, net of tax	(27.1		)	(37.9		)	66.5			23.6
(Loss) gain on sales of discontinued operations, net of tax	(41.1		)	(18.4		)	848.4			311.9
Net (loss) income from discontinued operations	$	(68.3	)	$	(56.3	)	$	914.9		$	335.5

Enrollments at our discontinued operations as of September 30, 2019 and September 30, 2018 were 83,400 and 166,400, respectively.

Sales Completed during the Nine Months Ended September 30, 2019

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

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

As previously disclosed in our 2018 Form 10-K, on January 25, 2018, we completed the sale of LEI Lie Ying Limited (LEILY). During the first quarter of 2019, a legal matter, for which the Company had indemnified the buyer and recorded a contingent liability, was settled with no cost to the Company. Accordingly, the Company reversed the liability and recognized additional gain on the sale of LEILY of approximately $13.7 million.

On April 8, 2019, we sold Monash South Africa as well as the real estate associated with that institution, which resulted in a gain of approximately $2.3 million.

On May 9, 2019, we sold our operations in India, which resulted in a gain of approximately $19.5 million.

On May 31, 2019, we sold our institutions in Spain and Portugal, which resulted in a gain of approximately $615.0 million.

On August 27, 2019, we sold our operations in Turkey, which resulted in a loss of approximately $37.0 million.

Sales Completed during the Nine Months Ended September 30, 2018

On January 11, 2018, we sold the operations of European University-Cyprus Ltd (EUC) and Laureate Italy S.r.L. (Laureate Italy), which resulted in a gain on sale of approximately $218.0 million.

On January 25, 2018, we sold the operations of LEI Lie Ying Limited (LEILY), which resulted in an initial gain on sale of approximately $100.0 million, including tax benefit, during the first quarter of 2018.

On April 12, 2018, we sold the operations of Laureate Germany, which resulted in a loss on sale of approximately $5.5 million.

On April 13, 2018, we sold the operations of Laureate Somed. Laureate Somed was the operator of Université Internationale de Casablanca, a comprehensive campus-based university in Casablanca, Morocco and recognized a gain on the sale of Laureate Somed of approximately $17.4 million.

On August 6, 2018, we sold the operations of Kendall College, LLC (Kendall), which resulted in a loss on sale of approximately $17.0 million.

Results of Operations

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

Summary Comparison of Consolidated Results;

Non-GAAP Financial Measure; and

Segment Results.

Summary Comparison of Consolidated Results

Discussion of Significant Items Affecting the Consolidated Results for the Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~2018

Nine Months Ended September 30, ~~2017~~2019

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

During the second quarter of ~~2017,~~2019, we fully repaid the remaining balance outstanding under our 2024 Term Loan, using the proceeds received from the sales of our operations in India, Spain and Portugal. The remaining proceeds were used to repay borrowings outstanding under the senior secured revolving credit facility. In connection with these debt repayments, the Company completed refinancing transactions that resulted in repayment of the previous senior credit facility and the redemption of the 9.250% Senior Notes due 2019 (the Senior Notes due 2019) (other than $250.0 million in aggregate principal amount of the Senior Notes due 2019 that the Company exchanged on April 21, 2017 for substantially identical but non-redeemable notes issued underrecorded a new indenture (the Exchanged Notes)). As a result of the refinancing transactions, during the quarter ended June 30, 2017, we recorded approximately $22.8 million in General and administrative expenses related to new third-party costs, as well as a Lossloss on debt extinguishment of ~~$6.9 million.~~

~~On August 11, 2017,~~$15.6 million related to the ~~remaining Senior Notes due 2019 were exchanged for~~write off of a ~~total of 18.7 million shares~~pro-rata portion of the ~~Company's Class A common stock and~~unamortized deferred financing costs associated with the ~~Senior Notes due 2019 were canceled.~~repaid debt balances, as well as the debt discount associated with the 2024 Term Loan. This loss is included in other non-operating (expense) income in the year-to-date table below.

Nine Months Ended September 30, ~~2016~~2018

On ~~June 14, 2016,~~February 1, 2018, we ~~sold~~amended our Senior Secured Credit Facility to reduce the ~~operations~~interest rate on our 2024 Term Loan. In connection with this transaction, we also repaid $350.0 million of ~~Glion in Switzerland and~~ the ~~United Kingdom, and~~principal balance of the ~~operations~~2024 Term Loan. As a result of ~~Les Roches in Switzerland and~~this transaction, the ~~United States, as well as Haute école spécialisée Les Roches-Gruyère SA(LRG) in Switzerland, Les Roches Jin Jiang in China, Royal Academy~~Company recorded a $7.5 million loss on debt extinguishment related to the pro-rata write-off of ~~Culinary Arts (RACA) in Jordan and Les Roches Marbella in Spain, which resulted in a gain on sale of approximately $249.0 million.~~the term loan's remaining deferred financing costs. This ~~gain~~loss is included in other non-operating (expense) income in the ~~tables below.~~

On July 20, 2016, we sold the operations of École Supérieure du Commerce Extérieur (ESCE), Institut Français de Gestion (IFG), European Business School (EBS), École Centrale d’Electronique (ECE), and Centre d’Études Politiques et de la Communication (CEPC), which resulted in a gain on sale of approximately $149.0 million. This gain is included in other non-operating income in the tablesyear-to-date table below.

Effective September 30, 2018, the University of Liverpool (Liverpool), an institution in our Online & Partnerships segment, began a teach-out process that is expected to be completed in April 2021. As a result, during the third quarter of 2018, we recorded an impairment charge of $10.0 million related to fixed assets of this entity that are no longer recoverable based on expected future cash flows.

Comparison of Consolidated Results for the Three Months Ended September 30, ~~2017~~2019 and ~~2016~~

2018


							% Change								% Change
							Better/(Worse)								Better/(Worse)
(in millions)	2017			2016			2017 vs. 2016		2019			2018			2019 vs. 2018
Revenues	$	983.4		$	929.9		6	%	$	773.7		$	778.3		(1	)%
Direct costs	924.1			864.2			(7	)%	655.6			665.5			1	%
General and administrative expenses	65.0			53.2			(22	)%	72.3			73.7			2	%
Operating (loss) income	(5.7		)	12.5			(146	)%
Loss on impairment of assets									—			10.0			100	%
Operating income									45.7			29.0			58	%
Interest expense, net of interest income	(70.6		)	(101.3		)	30	%	(37.1		)	(54.8		)	32	%
Other non-operating (expense) income	(13.3		)	166.7			(108	)%
(Loss) income from continuing operations before income taxes	(89.6		)	77.8			nm
Other non-operating expense									(15.2		)	(18.2		)	16	%
Loss from continuing operations before income taxes									(6.6		)	(44.1		)	85	%
Income tax (expense) benefit	(13.9		)	3.1			nm		(22.0		)	3.7			nm
Net (loss) income	(103.5		)	80.9			nm
Loss from continuing operations									(28.5		)	(40.4		)	29	%
Loss from discontinued operations, net of tax									(27.1		)	(37.9		)	28	%
Loss on sales of discontinued operations, net of tax									(41.1		)	(18.4		)	(123	)%
Net loss									(96.8		)	(96.7		)	—	%
Net loss attributable to noncontrolling interests	5.5			5.4			(2	)%	1.6			1.9			16	%
Net (loss) income attributable to Laureate Education, Inc.	$	(98.0	)	$	86.3		nm
Net loss attributable to Laureate Education, Inc.									$	(95.2	)	$	(94.8	)	—	%

nm - percentage changes not meaningful

For further details on certain discrete items discussed below, see ~~"Discussion~~‘‘Discussion of Significant Items Affecting the Consolidated Results."’’

Comparison of Consolidated Results for the Three Months Ended September 30, ~~2017~~2019 to the Three Months Ended September 30, ~~2016~~2018

Revenues ~~increased~~decreasedby$~~53.5~~4.6 million to ~~$983.4~~$773.7 million for the three months ended September 30, ~~2017~~2019 (the ~~2017~~2019 fiscal quarter) from ~~$929.9~~$778.3 million for the three months ended September 30, ~~2016~~2018 (the ~~2016~~2018 fiscal quarter). ~~This revenue increase was driven~~The effect of a net change in ~~part by higher average total enrollment at a majority of our institutions, which increased~~foreign currency exchange rates decreased revenues by ~~$17.9 million. The~~$20.7 million, mainly due to weakening of the Chilean Peso relative to the USD compared to the 2018 fiscal quarter. Additionally, the effect of changes in tuition rates and enrollments in programs at varying price points ("(‘‘product ~~mix"~~mix’’), pricing and timing ~~resulted in a $13.7~~decreased revenues by $4.9 million ~~increase in revenues~~ compared to the ~~2016~~2018 fiscal ~~quarter, which can be partially attributable to price increases at certain institutions. Also included~~quarter. These decreases in product mix, pricing and timing is the net effect of the following items: (1) approximately $11.7 million of revenue was deferred at our Mexico institutions during the 2017 fiscal quarter due to class disruptions resulting from the September 2017 Mexico City earthquake and is expected to be recognized in the fourth quarter of 2017; (2) approximately $12.0 million of revenue that was deferred during the second quarter of 2016 at two of our Chilean institutions as a result of a nationwide student protest was recognized during the third quarter of 2016; (3) the first two itemsrevenues were partially offset by ~~approximately $11.9 million~~the effects of ~~revenue that was recognized during the 2017 fiscal quarter that had been deferred from the first and second quarters~~higher average total organic enrollment at a majority of ~~2017 at~~ our ~~three Peruvian~~ institutions, ~~as a result of a period of heavy rains and floods that occurred during the first quarter of 2017. The effect of a net change in foreign currency exchange rates~~which increased revenues by ~~$23.3~~$18.8 million ~~for the 2017 fiscal quarter~~ compared to the 2016 fiscal quarter. Partially offsetting these increases in revenues was the incremental impact of dispositions in 2016, which reduced revenues by $2.4 million for the 2017 fiscal quarter compared to the 20162018 fiscal quarter. Other Corporate and Eliminations changes accounted for an increase in revenues of ~~$1.0~~$2.2 million.

Direct costs and general and administrative expenses combined ~~increased~~ decreased by ~~$71.7~~$11.3 million to ~~$989.1~~$727.9 million for the ~~2017~~2019 fiscal quarter from ~~$917.4~~$739.2 million for the ~~2016~~2018 fiscal quarter. This ~~increase in direct costs~~decrease was ~~driven by~~due to the ~~result of overall higher average total enrollments and expanded operations, which increased direct costs by $48.5 million. The~~ effect of a net change in foreign currency exchange rates, ~~increased direct~~which decreased costs by ~~$19.3~~$15.5 million for the ~~2017~~2019 fiscal quarter compared to the ~~2016~~2018 fiscal ~~quarter. Acquisition-contingent~~quarter and other Corporate and Eliminations expenses, which accounted for a decrease in costs of $2.6 million. Partially offsetting these direct costs decreases were overall higher organic enrollments, which increased costs by $5.4 million for the 2019 fiscal quarter compared to the 2018 fiscal quarter and changes in acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets, ~~decreased~~which resulted in a year-over-year increase in direct costs of $1.4 million.

Operating income increased by $0.1 million in the 2017 fiscal quarter and by $1.2 million in the 2016 fiscal quarter, increasing net expenses by $1.1 million. Offsetting these direct cost increases was the incremental impact of dispositions, which decreased costs by $4.8 million in the 2017 fiscal quarter. Other Corporate and Eliminations expenses accounted for an increase in costs of $7.6 million in the 2017 fiscal quarter.

~~Operating (loss) income~~ ~~changed by $18.2~~$16.7 million to ~~an operating loss of $5.7~~$45.7 million for the ~~2017~~2019 fiscal quarter from ~~operating income of $12.5~~$29.0 million for the ~~2016~~2018 fiscal ~~quarter. This decrease in income is~~quarter, primarily ~~driven by an~~as a result of increased operating ~~loss~~income in our ~~Mexico segment, where revenue was deferred due to the earthquake.~~Andean and Online & Partnerships segments.

Interest expense, net of interest income decreased by ~~$30.7~~$17.7 million to ~~$70.6~~$37.1 million for the ~~2017~~2019 fiscal quarter from ~~$101.3~~$54.8 million for the ~~2016~~2018 fiscal quarter. The decrease in interest expense was primarily attributable to lower average debt ~~balances and lower interest rates during the 2017 fiscal quarter resulting from the 2017 debt refinancing transactions.~~balances.

Other non-operating ~~(expense) income~~ ~~changed~~expense decreased by ~~$180.0~~$3.0 million to ~~an expense of $13.3~~$15.2 million for the ~~2017~~2019 fiscal quarter from ~~an income of $166.7~~$18.2 million for the ~~2016~~2018 fiscal quarter. This ~~change~~decrease was primarily attributable to ~~the 2016~~a decrease in loss on foreign currency exchange of $11.6 million and a gain on ~~the sale of our French subsidiaries of $155.2 million; a loss on derivatives~~derivative instruments in the ~~2017~~2019 fiscal quarter compared to a ~~gain~~loss in the ~~2016~~2018 fiscal quarter, for a change of ~~$20.4 million; and a decrease in gain on foreign currency exchange of $19.0 million, combined with a change~~$0.4 million. These decreases in other non-operating ~~(expense)~~ income ~~of $1.1 million in the 2017 fiscal quarter compared to the 2016 fiscal quarter. These decreases~~ were partially offset by a period-over-period decrease in other non-operating income of $7.3 million, primarily related to corporate-owned life insurance proceeds in the 2018 fiscal quarter, and a loss on debt extinguishment of $0.2 million in the ~~2016~~2019 fiscal quarter. In addition, during the 2019 fiscal quarter, we recognized a loss on disposal of ~~$15.7 million.~~subsidiaries of $1.5 million related to the release of accumulated foreign currency translation upon the dissolution of two dormant subsidiaries in Australia.

Income tax (expense) benefit changed by ~~$17.0~~$25.7 million to an expense of ~~$13.9~~$(22.0) million for the ~~2017~~2019 fiscal quarter from a benefit of ~~$3.1~~$3.7 million for the ~~2016~~2018 fiscal quarter. This increase in income tax expense was primarily ~~attributable to a discrete benefit in the 2016 fiscal quarter from the release of a contingent liability in Peru of $21.5 million, partially offset by an increase in income tax expense attributable~~due to changes in the mix of pre-tax book income attributable to taxable and non-taxable entities in various taxing ~~jurisdictions.~~jurisdictions and a tax benefit related to changes in reserves on uncertain tax positions due to statute expirations and divestitures.

Loss from discontinued operations, net of tax decreased by $10.8 million to $27.1 million for the 2019 fiscal quarter from $37.9 million for the 2018 fiscal quarter. Included in the loss from discontinued operations for the 2019 fiscal quarter is an impairment charge of $25.0 million related to assets that are held for sale.

Loss on sales of discontinued operations, net of tax increased by $22.7 million to $41.1 million for the 2019 fiscal quarter, primarily related to the sale of our Turkey operations, compared to $18.4 million in the 2018 fiscal quarter, which was primarily related to the sale of Kendall.

Comparison of Consolidated Results for the Nine Months Ended September 30, ~~2017~~2019 and ~~2016~~

2018

% Change
Better/(Worse)
(in millions) 2017 2016 2017 vs. 2016
Revenues $ 3,116.8
$ 3,068.3
2 %
Direct costs 2,719.6
2,697.8
(1 )%
General and administrative expenses 221.9
158.6
(40 )%
Operating income 175.3
211.9
(17 )%
Interest expense, net of interest income (263.1 ) (301.1 ) 13 %
Other non-operating income 9.8
452.1
(98 )%
(Loss) income from continuing operations before income taxes and equity in net income of affiliates (78.0 ) 362.9
(121 )%
Income tax expense (28.8 ) (35.2 ) 18 %
Equity in net income of affiliates, net of tax —
—
nm
Net (loss) income (106.7 ) 327.7
(133 )%
Net loss attributable to noncontrolling interests 2.4
2.8
14 %
Net (loss) income attributable to Laureate Education, Inc. $ (104.4 ) $ 330.5
(132 )%



							% Change
							Better/(Worse)
(in millions)	2019			2018			2019 vs. 2018
Revenues	$	2,367.2		$	2,397.8		(1	)%
Direct costs	2,002.2			2,044.2			2	%
General and administrative expenses	193.7			194.2			—	%
Loss on impairment of assets	0.5			10.0			95	%
Operating income	170.9			149.4			14	%
Interest expense, net of interest income	(126.9		)	(172.4		)	26	%
Other non-operating (expense) income	(21.3		)	51.5			(141	)%
Income from continuing operations before income taxes and equity in net income of affiliates	22.7			28.5			(20	)%
Income tax expense	(60.7		)	(65.1		)	7	%
Equity in net income of affiliates, net of tax	0.2			—			nm
Loss from continuing operations	(37.8		)	(36.6		)	(3	)%
Income from discontinued operations, net of tax	66.5			23.6			182	%
Gain on sales of discontinued operations, net of tax	848.4			311.9			172	%
Net income	877.1			298.8			194	%
Net loss (income) attributable to noncontrolling interests	0.5			(0.3		)	nm
Net income attributable to Laureate Education, Inc.	$	877.6		$	298.5		194	%

nm - percentage changes not meaningful

For further details on certain discrete items discussed below, see ~~"Discussion~~‘‘Discussion of Significant Items Affecting the Consolidated Results."’’

Comparison of Consolidated Results for the Nine Months Ended September 30, ~~2017~~2019 to the Nine Months Ended September 30, ~~2016~~2018

Revenues ~~increased~~decreasedby$~~48.5~~30.6 million to ~~$3,116.8~~$2,367.2 million for the nine months ended September 30, ~~2017~~2019 (the ~~2017~~2019 fiscal period) from ~~$3,068.3~~$2,397.8 million for the nine months ended September 30, ~~2016~~2018 (the ~~2016~~2018 fiscal period). This ~~revenue increase~~decrease in revenues primarily resulted from the effect of a net change in foreign currency exchange rates, which decreased revenues by $105.4 million, mainly

due to weakening of the Chilean Peso and the Brazilian Real relative to the USD compared to the 2018 fiscal period. This decrease in revenues was ~~driven~~partially offset by a higher average total organic enrollment at a majority of our institutions, which increased revenues by ~~$70.5 million. The~~$64.0 million, the effect of product mix, pricing and timing, ~~resulted in~~which increased revenues by $3.5 million, and other Corporate and Eliminations changes, which accounted for an ~~$85.4 million~~ increase in revenues ~~compared~~of $7.3 million.

Direct costs and general and administrative expenses combined decreased by $42.5 million to $2,195.9 million for the ~~2016~~2019 fiscal period from $2,238.4 million for the 2018 fiscal period. This ~~increase includes approximately $18.0 million of revenues that were deferred during the 2016 fiscal period and recognized~~decrease in the fourth quarter of 2016 as a result of class disruptions at two of our Chilean institutions during a nationwide student protest that lasted several weeks. The overall increase in product mix, pricing and timing was partially offset by a negative impact to 2017 revenues of approximately $11.7 million that occurred as a result of class disruptions at our Mexican institutions due to the earthquake. The disrupted classes have resumed and are expected to be completed in the fourth quarter. For the 2017 fiscal period,direct costs primarily resulted from the effect of a net change in foreign currency exchange rates, ~~increased revenues~~which decreased costs by ~~$31.3~~$94.4 million, ~~compared to 2016 fiscal period. The incremental impact of dispositions decreased revenues by $141.9 million. Other~~and other Corporate and Eliminations ~~changes~~expenses, which accounted for ~~an increase~~a decrease in ~~revenues~~costs of ~~$3.2 million.~~

~~Direct costs and general and administrative expenses combined~~ ~~increased by $85.1~~$2.4 million ~~to $2,941.5 million for~~in the ~~2017 fiscal period from $2,856.4 million for the 2016~~2019 fiscal period. ~~The~~Partially offsetting these direct costs ~~increase was due to~~decreases were the effect of overall higher organic enrollments, ~~and expanded operations~~ which increased costs by ~~$82.3 million compared to the 2016 fiscal period. The effect of a net change in foreign currency exchange rates increased costs by $45.0~~$50.7 million for the ~~2017~~2019 fiscal period compared to the ~~2016 fiscal period. For the 2017~~2018 fiscal period, ~~share-based compensation expense and EiP implementation expense also increased direct costs by $36.2 million. Other Corporate and Eliminations expenses accounted for an increase~~ in ~~costs of $44.5 million~~addition to changes in the 2017 fiscal period, which included an expense of $22.8 million related to the portion of the refinancing transactions that was deemed to be a debt modification. Offsetting these direct cost increases was the incremental impact of dispositions, which decreased costs by $118.3 million for the 2017 fiscal period compared to the 2016 fiscal period. Acquisition-contingentacquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets, ~~increased~~which resulted in a year-over-year increase in direct costs by $4.2 million in the 2017 fiscal period and increased direct costs by $8.8 million in the 2016 fiscal period, decreasing expenses by $4.6 million in the 2017 fiscal period compared to the 2016 fiscal period.of $3.6 million.

Operating income ~~decreased~~ increased by ~~$36.6~~$21.5 million to ~~$175.3~~$170.9 million for the ~~2017~~2019 fiscal period from ~~$211.9~~$149.4 million for the ~~2016~~2018 fiscal period. ~~The decrease in operating income was~~This increase primarily ~~the result of higher 2017 operating expenses at Corporate, an operating loss at our Mexico segment due to the deferral of revenue resulting~~results from ~~the earthquake and~~ increased ~~operating losses in our EMEAA segment. Increased~~ operating income in our Andean and Online & ~~Iberian segment~~Partnerships segments, combined with decreased operating loss in our Rest of World segment. These changes were partially offset ~~these decreases~~by operating loss in our Brazil and Mexico segments in the 2019 fiscal period compared to operating ~~income.~~income in the 2018 fiscal period.

Interest expense, net of interest income decreased by ~~$38.0~~$45.5 million to ~~$263.1~~$126.9 million for the ~~2017~~2019 fiscal period from ~~$301.1~~$172.4 million for the ~~2016~~2018 fiscal period. The decrease in interest expense was primarily attributable to lower average debt ~~balances and lower interest rates during the 2017 fiscal period resulting from the 2017 debt refinancing transactions.~~balances.

Other non-operating (expense) income~~decreased~~ changed by ~~$442.3~~$72.8 million, to ~~$9.8~~an expense of $(21.3) million for the ~~2017~~2019 fiscal period from ~~$452.1~~income of $51.5 million for the ~~2016~~2018 fiscal period. This change was primarily attributable to: (1) decreased gain on derivative instruments of $84.0 million, related to a gain recorded in the 2018 fiscal period upon the conversion of the Series A Preferred Stock; (2) an increase in loss on debt extinguishment of $18.9 million related to the repayment of the 2024 Term Loan during the 2019 fiscal period; (3) a decrease of $1.7 million in other non-operating income compared to the 2018 fiscal period, primarily related to proceeds from corporate-owned life insurance during the 2018 fiscal period, partially offset by an increase in the estimated fair value of an equity security held at Corporate during the 2019 fiscal period; and (4) a loss of $1.5 million on disposal of subsidiaries in the 2019 fiscal period related to the release of accumulated foreign currency translation upon the dissolution of two dormant subsidiaries in Australia. These increases in other non-operating expense were partially offset by a decrease in loss on foreign currency exchange of $33.3 million.

Income tax expense decreased by $4.4 million to $60.7 million for the 2019 fiscal period from $65.1 million for the 2018 fiscal period. This decrease was primarily attributable to the gain on the sale of our Swiss and French subsidiaries in the 2016 fiscal period, for a change of $398.6 million, and a gain on foreign currency exchange in the 2016 fiscal period for a change of $80.4 million. These decreases were partially offset by a gain on derivative instruments in the 2017 fiscal period compared to a loss in the 2016 fiscal period for a change of $27.4 million and a decrease in loss on debt extinguishment of $8.9 million, combined with a change in other non-operating expense of $0.4 million in the 2017 fiscal period compared to the 2016 fiscal period.

~~Income tax expense~~ ~~decreased by $6.4 million to $28.8 million for the 2017 fiscal period from $35.2 million for the 2016 fiscal period. This decrease in expense was primarily~~ due to management's decision to redesignate certain intercompany loans from temporary to permanent, which caused a discrete benefit of approximately $30.0 million during the 2017 fiscal period, partially offset by a discrete benefit in the 2016 fiscal period from deferred taxes of $7.9 million related to the sale of the hospitality management schools and a release of a contingent liability related to Peru of $21.5 million. Changeschanges in the mix of pre-tax book income attributable to taxable and non-taxable entities in various taxing jurisdictions ~~also contributed~~and a tax benefit related to changes in reserves on uncertain tax positions due to statute expirations and divestitures.

Income from discontinued operations, net of tax increased by $42.9 million to $66.5 million for the 2019 fiscal period from $23.6 million for the 2018 fiscal period. Included in income from discontinued operations for the 2019 fiscal period is an impairment charge of $25.0 million related to assets that are held for sale.

Gain on sales of discontinued operations, net of tax increased by $536.5 million to $848.4 million for the 2019 fiscal period related to the ~~overall decrease.~~sales of our St. Augustine, Thailand, South Africa, India, Spain, Portugal and Turkey operations, compared to $311.9 million for the 2018 fiscal period related to the sales of our Cyprus, Italy, China, Germany, Morocco and Kendall College operations.

Non-GAAP Financial Measure

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

Adjusted EBITDA is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, Adjusted EBITDA is a key financial measure used by the compensation committee

of our board of directors and our Chief Executive Officer in connection with the payment of incentive compensation to our executive officers and other members of our management team. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

The following table presents Adjusted EBITDA and reconciles ~~net (loss) income~~loss from continuing operations to Adjusted EBITDA for the three months ended September 30, ~~2017~~2019 and ~~2016~~:2018:


							% Change								% Change
							Better/(Worse)								Better/(Worse)
(in millions)	2017			2016			2017 vs. 2016		2019			2018			2019 vs. 2018
Net (loss) income	$	(103.5	)	$	80.9		nm
Loss from continuing operations									$	(28.5	)	$	(40.4	)	29	%
Plus:
Equity in net income of affiliates, net of tax	—			—			nm
Income tax expense (benefit)	13.9			(3.1		)	nm		22.0			(3.7		)	nm
(Loss) income from continuing operations before income taxes and equity in net income of affiliates	(89.6		)	77.8			nm
Loss from continuing operations before income taxes									(6.6		)	(44.1		)	85	%
Plus:
Gain on sale of subsidiaries, net	—			(155.2		)	(100	)%
Foreign currency exchange gain, net	(7.3		)	(26.3		)	(72	)%
Other expense (income), net	0.7			(0.4		)	nm
Loss (gain) on derivatives	19.9			(0.5		)	nm
Loss on disposal of subsidiaries, net									1.5			—			nm
Foreign currency exchange loss, net									14.8			26.4			44	%
Other income, net									(1.0		)	(8.3		)	(88	)%
(Gain) loss on derivatives									(0.3		)	0.1			nm
Loss on debt extinguishment	—			15.7			100	%	0.2			—			nm
Interest expense	76.5			104.8			27	%	40.3			58.3			31	%
Interest income	(5.8		)	(3.4		)	71	%	(3.2		)	(3.5		)	(9	)%
Operating (loss) income	(5.7		)	12.5			(146	)%
Operating income									45.7			29.0			58	%
Plus:
Depreciation and amortization	67.9			66.8			(2	)%	48.6			52.8			8	%
EBITDA	62.2			79.3			(22	)%	94.3			81.8			15	%
Plus:
Share-based compensation expense^(a)	8.6			8.0			(8	)%	1.5			6.4			77	%
Loss on impairment of assets	—			—			nm
EiP implementation expenses ^(b)	15.7			11.2			(40	)%
Loss on impairment of assets ^(b)									—			10.0			100	%
EiP implementation expenses ^(c)									38.0			25.0			(52	)%
Adjusted EBITDA	$	86.5		$	98.5		(12	)%	$	133.8		$	123.2		9	%

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~~consolidated financial statements included in our ~~2016~~2018 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 ~~2016~~2018 Form 10-K. During the nine months ended September 30, ~~2017,~~2019, there were no significant changes to our critical accounting policies.

Recently Issued Accounting ~~Pronouncements~~Standards

Refer to Note 2,, Significant Accounting Policies,, in our consolidated financial statements included elsewhere in this ~~Quarterly Report on~~ Form 10-Q for recently issued accounting ~~pronouncements.~~standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our ~~2016~~2018 Form 10-K. There have been no significant changes in our market risk exposures since our December 31, ~~2016~~2018 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)~~(‘‘CEO’’) and Chief Financial Officer ~~(CFO)~~(‘‘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)~~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 not effective due to the four material weaknesses, which we view as an integral part of our disclosure controls and procedures, previously disclosed in Item 7 of our 2016 Form 10-K. We have commenced the remediation of these material weaknesses; however, as of September 30, 2017 the material weaknesses had not yet been remediated. Nevertheless, we believe that the consolidated financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with GAAP.effective.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, ~~2017~~2019 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

~~We are party~~Please refer to ~~various claims and legal proceedings from time to time. Except as described~~Part I, ‘‘Item 3. Legal Proceedings’’ in our ~~2016~~2018 Form 10-K ~~as updated~~and Part II, “Item 1. Legal Proceedings” in our Quarterly Reports on Form ~~10-Q's~~10-Q for the quarters ended March 31, ~~2017,~~2019 and June 30, ~~2017~~2019 for information regarding material pending legal proceedings. Except as set forth therein and below, there have been no new material legal proceedings and no material developments in the legal proceedings previously disclosed.

On September 11, 2019, the People’s Court of Tianxin District, Changsha City, in the People’s Republic of China issued a Notice of Assistance in Enforcement addressed to Lei Lie Ying Limited, a private limited company formerly indirectly owned by us (“LEILY”), and Hunan International Economics University, our former network institution in China (“HIEU”), requesting that (i) the pending disposition of certain land owned by HIEU be frozen, (ii) such land be disposed of instead pursuant to the terms of a series of agreements allegedly entered into in 2009 and (iii) the proceeds thereof be deposited with the court pending final resolution of the dispute. Under the agreements entered into for the sale of our interest in LEILY, we are ~~not aware of any legal proceedings that we believe could have, individually or in the aggregate, a material adverse effect on our business, results of operations or financial condition.~~

~~On October 5, 2016, a student filed suit against us and Walden University in the United States District Court for the Southern District of Ohio in the matter of~~ ~~Latonya Thornhill v. Walden University, et. al.,~~ claiming that her progress in her program was delayed by Walden University and seeking class action status to represent a nationwide class of purportedly similarly situated doctoral students. The claims include fraud in the inducement, breach of contract, consumer fraud under the laws of Maryland and Ohio, and unjust enrichment. We and Walden University were served on October 17, 2016. On December 16, 2016, we and Walden University filed a motion to dismiss the claims and a motion to strike the class action certification request. On January 12, 2017, the plaintiff filed an amended complaint, making modifications to supplement some of the factual allegations and seeking to change the governing law of the case to the law of Minnesota. A substantive response to the amended complaint was filed on February 9, 2017. After the parties fully briefed motions to dismiss the complaint as well as the request for class certification, the ~~Thornhill~~ court ruled on October 10, 2017 that the plaintiff could file a further amended complaint. A Second Amended Complaint was filed on October 13, 2017 supplementing some of the factual allegations and on October 27, 2017 we filed motions to dismiss the complaint and strike the request for class certification. Further, the Court has temporarily stayed discovery in this case in its entirety, other than with respect to plaintiff Thornhill individually, until at least January 10, 2018, pending the outcome of the various motions to dismiss noted above. Walden University and we intendrequired to defend this action and to indemnify the purchaser against ~~this case vigorously, including the request~~any liabilities which arise from these claims, subject to ~~certify a nationwide class.~~

~~During 2010, we were notified by the Spanish Taxing Authorities (“STA”) (in this case, by the Regional Inspection Office~~an aggregate cap on liability of the Special Madrid Tax Unit) that an audit of some of our Spanish subsidiaries was being initiated for 2006 and 2007. On June 29, 2012, the STA issued a final assessment to Iniciativas Culturales de España, S.L. (“ICE”), our Spanish holding company, for approximately EUR 11.1RMB 400 million ~~($13.1~~(approximately $56 million at September 30, 2017), including interest, for those two years based on its rejection of the tax deductibility of financial expenses related to certain intercompany acquisitions and the application of the Spanish ETVE regime. On July 25, 2012, we filed a claim with the Regional Economic‑Administrative Court challenging this assessment and, in the same month, we issued a cash‑collateralized letter of credit for the assessment amount, in order to suspend the payment of the tax due. Further, in July 2013, we were notified by the STA (in this case, by the Central Inspection Office for Large Taxpayers) that an audit of ICE was also being initiated for 2008 through 2010. On October 19, 2015, the STA issued a final assessment to ICE for approximately EUR 17.2 million ($20.3 million at September 30, 2017), including interest, for those three years. We have appealed this assessment and, in order to suspend the payment of the tax assessment until the court decision, we issued a cash‑collateralized letter of credit for the assessment amount plus interest and surcharges.2019). We believe the ~~assessments in this case~~claims are without merit and intend to defend vigorously against them. During the second quarter of 2016, we were notified by the STA that tax audits of the Spanish subsidiaries were also being initiated for 2011 and 2012; no assessments have yet been issued for these years. Also during the second quarter of 2016, the Regional Administrative Court issued a decision against the Company on its appeal. The Company has further appealed at the Highest Administrative Court level. The Company plans to continue the appeals process for the periods already audited and assessed. During the second quarter of 2017, we were notified by the STA that tax audits of the Spanish subsidiaries for 2011 and 2012 were being extended to include 2013; no assessments have yet been issued for 2013.

In June 2016, Li Shihong and Hunan Lieying Education Investment Management Co Ltd commenced civil proceedings in the Changsha Intermediary Court in the People’s Republic of China against Zhang Jiangbo, Zhang Jianbo, Chin Zhingxian, Hunan New Lieying Science and Education Co Ltd and Hunan International Economics University, our network institution in China (“HIEU”). Zhang Jiangbo, Zhang Jianbo and Chin Zhingxian are the minority shareholders in the HIEU group. The plaintiffs claim that the defendants are liable to pay an amount of RMB 170 million (approximately $25.6 million at September 30, 2017) based on a debt repayment document executed in 2014. The document was signed by the minority shareholders and Hunan New Lieying Science and Education Co Ltd and Zhang Jiangbo, allegedly on behalf of HIEU, in effect as a guarantor and a seal was affixed, allegedly being that of HIEU. The plaintiffs also claim interest and litigation expenses. HIEU has filed a defense and evidence in this matter contending that Zhang Jiangbo was not authorized to execute the document on behalf of HIEU, nor to affix any HIEU seal, and contending further that in any event an education institution is not permitted to guarantee a loan for non-educational purposes. Zhang Jiangbo has admitted to the court that he lacked such authorization. The court has requested that further evidence be submitted. On November 4, 2017, HIEU was informed by the court that the case against it would be dismissed,

~~although no formal judgment has been received. Until it receives the formal judgment of dismissal, HIEU will continue to vigorously defend this case.~~

Item 1A. Risk Factors

~~Except as set forth below, there~~There have been no material changes in the Risk Factors included in Item 1A of our ~~2016~~2018 Form ~~10-K, as updated in Item 1A of our Form 10-Q's for the quarters ended March 31, 2017 and June 30, 2017.~~10-K.

~~Political and regulatory developments in Turkey may materially adversely affect us.~~

~~Istanbul Bilgi University (“Bilgi”), a member of the~~ ~~Laureate International Universities~~ network located in Turkey, is established as a Foundation University under the Turkish higher education law, sponsored by the Bilgi Foundation. As such, it is subject to regulation, supervision and inspection by Turkish Higher Education Council (the “YÖK”). In 2014, the Turkish parliament amended the higher education law to provide expanded authority to the YÖK with respect to Foundation Universities, including authorizing additional remedies for violations of the higher education law and of regulations adopted by the YÖK. On November 19, 2015, the YÖK promulgated an “Ordinance Concerned with Amendment to Foundation High Education Institutions” (the “Ordinance”), the principal effects of which relate to the supervision and inspection of Foundation Universities by the YÖK. Under the Ordinance, the YÖK has expanded authority to inspect accounts, transactions, activities and assets of Foundation Universities, as well as their academic units, programs, projects and subjects. The Ordinance establishes a progressive series of five remedies that the YÖK can take in the event it finds a violation of the Ordinance, ranging from (1) a warning and request for correction to (2) the suspension of the Foundation University’s ability to establish new academic units or programs to (3) limiting the number of students the Foundation University can admit, including ceasing new admissions, to (4) provisional suspension of the Foundation University’s license to (5) cancellation of the Foundation University’s license. Since the promulgation of the Ordinance, the YÖK has canceled the licenses of 15 Foundation Universities.

The Ordinance specifies that Foundation Universities cannot be established by foundations in order to gain profit for themselves, and prohibits specified types of fund transfers from Foundation Universities to their sponsoring foundation, with certain exceptions for payments made under contractual arrangements for various goods and services that are provided at or below current market rates. Bilgi has entered into contractual arrangements with a subsidiary of the Company to provide Bilgi with management, operational and student services and certain intellectual property at fair market rates, and certain affiliates of the Company are members of the board of trustees of the Bilgi Foundation. The YÖK conducts annual audits of the operations of Bilgi. If the YÖK were to determine that any of these contracts or the payments made by Bilgi to this Company subsidiary, or any other activities of Bilgi, including the donation of 40.0 million Turkish Liras made by the university to a charitable foundation that was subsequently reimbursed to the university by certain Company‑owned entities, violate the Ordinance or other applicable law, the YÖK could take actions against Bilgi up to and including cancellation of its license.

On April 18, 2017, Bilgi received from the YÖK the results of the most recent annual audit (the “Annual Audit”). The Annual Audit report requires, among other things, that (i) with respect to the 2017-2018 academic year, there be a reduction in the quota for the number of new students permitted to be admitted into Bilgi’s degree programs and (ii) Bilgi be reimbursed, not later than October 18, 2017, approximately $29 million for payments previously made by Bilgi to a subsidiary of the Company for certain management, operational and student services, and intellectual property. The Company and Bilgi believe the charges to Bilgi for these services were at fair value and Bilgi has contested the findings of the Annual Audit that they constituted an improper wealth transfer. Demands also were made in the Annual Audit for the return or payment to Bilgi, by October 18, 2017, of other amounts involving approximately $8 million.

Bilgi exercised its right to appeal this decision to the YÖK to demonstrate the validity and value of the services procured from the Company subsidiary but the YÖK has rejected that appeal. Bilgi has appealed the YÖK’s rejection of its appeal to the Turkish court system and has not been reimbursed for any of the payments made to the Company’s subsidiary for the services described above. As a result, as of October 18, 2017, Bilgi is in non-compliance with certain requirements of the Annual Audit report. As the Company currently consolidates Bilgi under the variable interest entity model, if the Company is unable to provide services under its contracts with Bilgi and receive the economic benefits from those contracts as a result of the determinations in the Annual Audit, deconsolidation of Bilgi could be required. Deconsolidation, if required, could have a material adverse effect on the Company’s business, financial condition and results of operations, including possible write-off of all or a portion of the Company’s investment in Bilgi and a reduction in operating income. At September 30, 2017 and December 31, 2016, Bilgi had total assets of approximately $134 million and $83 million, respectively, and total liabilities of $117 million and $63 million, respectively. Total liabilities include approximately $32 million and $19 million of net intercompany liabilities as of September 30, 2017 and December 31, 2016, respectively. During fiscal year 2016, Bilgi generated approximately $106 million of the Company’s consolidated revenue and approximately $26 million of the Company’s consolidated operating income and incurred approximately $6 million of depreciation and amortization expense.

If the YÖK were to determine that any administrators of Bilgi have directly taken any actions or supported any activities that are intended to harm the integrity of the state, the license of the university could be canceled. In July 2016, a coup attempt increased

political instability in Turkey, and the uncertainties arising from the failed coup in Turkey could lead to changes in laws affecting Bilgi or result in modifications to the current interpretations and enforcement of the Ordinance or other laws and regulations by the YÖK. Any such actions by the YÖK, including the actions in relation to the conduct of the Annual Audit and the reimbursement of amounts described above, could have a material adverse impact on Bilgi's future growth or its ability to remain in operation, and could have a material adverse effect on our business, financial condition and results of operations.

~~Political and regulatory developments in Chile may materially adversely affect us.~~

As a consequence of student protests and political disturbances during 2011 and 2012, the former Chilean government announced several proposed reforms to the higher education system. The reforms, if they had been adopted, could have included changing the current accreditation system to make it more demanding, revising the student financing system to provide a single financing system for students in all higher education institutions (replacing the CAE Program), establishing a system of information transparency for higher education, creating an agency to promote accountability by higher education institutions, changing certain corporate governance rules for universities (such as the need for a minimum number of independent directors), and establishing procedures for the approval of, or otherwise limiting, transactions between higher education institutions and related parties. Other legislative reforms were promoted by members of the Chilean Congress but were not supported by the previous Chilean government, including proposals to restrict related party transactions between higher education institutions and entities that control them. In November and December 2013, Chile held national elections. The presidential election was won by former president Michelle Bachelet, who assumed office on March 11, 2014, and a political coalition led by Ms. Bachelet won the elections for both houses of the Chilean Congress, in each case for four years beginning on March 11, 2014. Although the election platform of the new government mentioned that stronger regulation of higher education was required, it did not contain specific commitments with respect to the abovementioned reforms, other than the creation of a special agency to oversee higher education institutions’ compliance with law and regulations. In the second quarter of 2014, the new government announced the withdrawal of all of the prior administration’s higher education proposals and its intent to submit new bills to the Chilean Congress.

~~In April 2016, the Chilean Congress made reforms to specific career disciplines, including pedagogy. Law 20,903 created the teaching professional development system (Sistema de Desarrollo Profesional Docente~~), which aims to improve the quality of training for those who choose to study pedagogy by setting new program admission requirements and mandatory institutional accreditation standards for pedagogy career programs. For the first enrollment intake of 2017 in the entire sector of private universities in the Chilean market, the new admissions standards caused a roughly 40% reduction in total new enrollment for the covered programs. UNAB, UDLA and UVM Chile, three of our network institutions in Chile, experienced reduced new enrollments in their education programs above the reduction in enrollments in the overall market of private universities. Although such reductions in the first 2017 intake were significant, they did not result in a material negative impact on the projected total new enrollment of our Chilean institutions, and we will have to continue to monitor the situation to take steps to mitigate the effects of the law.

On July 5, 2016, the Chilean President submitted to the Chilean Congress a bill (the “2016 Higher Education Bill”) that was intended to change the entire regulatory landscape of higher education in Chile by, among other things, creating new special government administrative agencies and enhancing the requirements for institutional accreditation of higher education institutions. Following its submission to the Chilean Congress, the 2016 Higher Education Bill was subject to national debate among different constituencies in the higher education system. As a result of these discussions, the Chilean executive branch decided to replace the 2016 Higher Education Bill with a new submission that would take into consideration the main concerns that were raised during those discussions. These discussions identified, among other things, (i) the need to reinforce, improve and enhance the state-owned universities, separating their regulation from the regulation applicable to other educational institutions, (ii) the need to develop special regulations for technical education, (iii) the need to improve regulations concerning the compliance by private universities with the requirement that they not be operated for profit, and (iv) the need to grant universal access to educational institutions.

The Undersecretary of Higher Education would also generate and coordinate instances of participation and dialogue with and among higher education institutions, promoting the connection between these institutions and the secondary education system.

As the Company currently consolidates certain of its institutions in Chile under the variable interest entity model, the Company will review such consolidation upon passage of any new higher education bill. Deconsolidation of one or more of our Chilean institutions, if required, could have a material adverse effect on our financial condition and results of operations. At September 30, 2017 and December 31, 2016, the Chilean VIEs had total assets of approximately $806 million and $687 million, respectively, and total liabilities of $186 million and $93 million, respectively. Total assets include approximately $20 million and $11 million of net intercompany assets as of September 30, 2017 and December 31, 2016, respectively, as well as goodwill balances that could be reallocated among the VIE and non-VIE businesses within the Chile reporting unit if deconsolidation of the VIEs were required.

While we believe that all of our institutions in Chile are operating in full compliance with Chilean law, we cannot predict the extent or outcome of any educational reforms that may be implemented in Chile. Depending upon how these reforms are defined and implemented, there could be a material adverse effect on our financial condition and results of operations. Any disruption to our operations in Chile would have a material adverse effect on our financial condition and results of operations. Similar reforms in other countries in which we operate could also have a material adverse effect on our financial condition and results of operations.

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

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

~~On February 6, 2017, we completed our IPO~~The following table provides a summary of the Company’s purchases of its Class A common stock during the three months ended September 30, 2019 pursuant to the Company’s authorized stock repurchase program:



Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares yet to be purchased under the plans or programs ⁽¹⁾
7/1/19 - 7/31/19	—	$	—	—	$	150,000
8/1/19 - 8/31/19	—	—		—	150,000
9/1/19 - 9/30/19	6,150	$	17.05	6,150	45,151
Total	6,150	$	17.05	6,150	$	45,151

⁽¹⁾On August 8, 2019, the Company announced that its board of directors had authorized a ~~registration statement on Form S-1 (File No. 333-207243), which~~stock repurchase program to acquire up to $150,000 of the SEC declared effective on January 31, 2017, and a registration statement on Form S-1MEF (File No. 333-215845), which became effective on January 31, 2017. We registered a total of 40.25 million shares of ourCompany’s Class A common stock. In ~~our IPO, we issued~~early October 2019, the Company's stock repurchases reached the previously authorized limit of $150,000 and, ~~sold 35.0 million~~on October 14, 2019, the Company's board of directors approved the increase of its existing authorization to repurchase shares of ~~our~~the Company's Class A common stock ~~to the public at a price of $14.00 per share.~~

~~As previously disclosed, on March 1, 2017, in accordance with the~~by $150,000. See Note Exchange Agreements, we used a portion of the proceeds from our IPO to redeem Senior Notes due 2019 with an aggregate principal amount of $22.6 million at a repurchase price of 104.625% of the aggregate principal amount for a total payment of $23.6 million, which is consistent with the use of proceeds from our IPO as described in our final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) on February 2, 2017 (Final Prospectus).

~~As previously disclosed, on May 31, 2017, we used approximately $333 million of the proceeds from our IPO, together with proceeds from the refinancing~~21, Subsequent Events, of our credit facility, to redeem our outstanding Senior Notes due 2019 (other than the Exchanged Notes). The aggregate principal amount outstanding of the Senior Notes due 2019 (excluding the Exchanged Notes) was $1,125.4 million. The redemption price for the Senior Notes due 2019 was equal to 104.625% of the principal amount thereof, plus accrued and unpaid interest and special interest to the redemption date, for an aggregate payment to holders of the Senior Notes of approximately $1,205.6 million. Ofconsolidated financial statements included elsewhere in this approximately $1,205.6 million, approximately $64.8 million in the aggregate was paid to Douglas L. Becker, our Chairman and CEO, and R. Christopher Hoehn-Saric, an affiliate of the Company, as holders of redeemed Senior Notes due 2019.Form 10-Q.

On September 12, 2017, we used the remaining proceeds from our IPO, together with cash from operations, to repay the seller notes that were used to partially finance the acquisition of the FMU group. The total payment, including interest, was approximately $114.6 million.

~~This is consistent with the use of proceeds from our IPO as described in our Final Prospectus.~~

Item 6. Exhibits

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

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
2.5#
Sale and Purchase Agreement, dated as of March 15, 2016, by and between Laureate International B.V. and Graduate S.A.

S‑1/A 333‑207243 2.5 05/20/2016
2.6#
Share Purchase Agreement, dated as of April 15, 2016, by and between Laureate I B.V. and Insignis
S‑1/A 333‑207243 2.6 05/20/2016
3.1
Amended and Restated Certificate of Incorporation
S‑1/A 333‑207243 3.1 01/31/2017
3.2
Amended and Restated Bylaws
S‑1/A 333‑207243 3.2 01/31/2017
3.3
Certificate of Designations of Convertible Redeemable Preferred Stock, Series A of Laureate Education, Inc.
S‑1/A 333‑207243 3.3 12/15/2016
4.6
Indenture, dated as of April 21, 2017, between Laureate Education, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee, governing the 9.250% Replacement Senior Notes due 2019
8-K 001-38002 4.1 04/27/2017
4.7
Form of Global Note governing the 9.250% Replacement Senior Notes due 2019 (included as Exhibit A to Exhibit 4.6)

8-K 001-38002 4.1 04/27/2017
4.8
Indenture, dated as of April 26, 2017, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 8.250% Senior Notes due 2025

8-K 001-38002 4.3 04/27/2017
4.9
Form of 8.250% Senior Note due 2025 (included as Exhibit A to Exhibit 4.8)
8-K 001-38002 4.3 04/27/2017
10.1†
2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries
S‑1/A 333‑207243 10.31 11/20/2015
10.2†
2007 Stock Incentive Plan Form of Stock Option Agreement, as amended on August 31, 2010
S‑1/A 333‑207243 10.32 11/20/2015
10.3†
2013 Long-Term Incentive Plan Form of Stock Option Agreement effective as of September 11, 2013
S‑1/A 333‑207243 10.34 11/20/2015
10.4†
Laureate Education, Inc. Deferred Compensation Plan, as amended and restated effective January 1, 2009
S‑1/A 333‑207243 10.35 11/20/2015
10.5†
Form of Management Stockholder’s Agreement for equityholders
S‑1/A 333‑207243 10.36 11/20/2015
10.6†
Deferred Compensation Letter Agreement, dated August 16, 2007, by and among L Curve Sub Inc., Laureate Education, Inc. and Douglas L. Becker
S‑1/A 333‑207243 10.38 12/23/2015
10.7†
Deferred Compensation Letter Agreement, dated December 24, 2015, between Laureate Education, Inc. and Douglas L. Becker
S‑4/A 333‑208758 10.37 01/20/2016
10.8†
2nd Amended and Restated Executive Interest Subscription Agreement, dated August 31, 2010, between Wengen Alberta, Limited Partnership and Douglas L. Becker
S‑1/A 333‑207243 10.39 11/20/2015
10.9†
Employment Offer Letter, dated July 21, 2008, between Laureate Education, Inc. and Eilif Serck‑Hanssen
S‑1/A 333‑207243 10.40 11/20/2015
10.10†
Amendment to Employment Offer Letter, dated December 9, 2010, between Laureate Education, Inc. and Eilif Serck‑Hanssen
S‑1/A 333‑207243 10.41 11/20/2015
10.11†
Time‑Based Restricted Stock Agreement, effective August 5, 2008, between Laureate Education, Inc. and Eilif Serck‑Hanssen
S‑1/A 333‑207243 10.42 11/20/2015
10.12†
Form of Time‑Based Restricted Stock Units Agreement, for grants from and after September 11, 2013
S‑1/A 333‑207243 10.43 11/20/2015
10.13
Support Services Agreement between Santa Fe University of Art and Design, LLC and Laureate Education, Inc. dated October 1, 2014
S‑1/A 333‑207243 10.44 11/20/2015



Exhibit No.	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
2.1#	Amended and Restated Sale and Purchase Agreement, dated as of November 22, 2017 and amended and restated on January 11, 2018, by and among LEI European Investments B.V., Laureate International B.V. and Galileo Global Education Luxco S.À R.L.	10-K	001-38002	2.7	03/20/2018
2.2#	Sale and Purchase Agreement, dated April 12, 2018, among LEI European Investments B.V., Laureate International B.V. and Global University Systems Germany B.V.	8-K	001-38002	2.1	04/18/2018
2.3#	Asset Purchase Agreement, dated January 15, 2018, among Kendall College, LLC, The Dining Room at Kendall NFP, National Louis University and Laureate Education, Inc.	8-K	001-38002	2.1	08/07/2018
2.4#	Membership Interest Purchase Agreement, dated April 24, 2018, by and among Laureate Education, Inc., Exeter Street Holdings, LLC, University of St. Augustine for Health Sciences, LLC and University of St. Augustine Acquisition Corp.	10-Q	001-38002	2.4	08/09/2018
2.5#	Sale and Purchase Agreement, dated December 12, 2018, by and among Iniciativas Culturales de España S.L., Laureate I B.V. and Samarinda Investments, S.L.	10-K	001-38002	2.5	02/28/2019
2.6#	Share Purchase Agreement relating to the sale and purchase of equity shares of Pearl Retail Solutions Private Limited, M-Power Energy India Private Limited and Data Ram Sons Private Limited	8-K	001-38002	2.1	05/13/2019
2.7#	Share Purchase Agreement relating to all the shares in the capital of Education Turkey B.V.	8-K	001-38002	2.1	08/29/2019
3.1	Amended and Restated Certificate of Incorporation	S‑1/A	333‑207243	3.1	01/31/2017
3.2	Amended and Restated Bylaws	S‑1/A	333‑207243	3.2	01/31/2017
3.3	Certificate of Retirement of Convertible Redeemable Preferred Stock, Series A	8-K	001-38002	3.1	07/20/2018
4.3	Indenture, dated as of April 26, 2017, by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association, as trustee, governing the 8.250% Senior Notes due 2025	8-K	001-38002	4.3	04/27/2017
4.4	Form of 8.250% Senior Note due 2025 (included as Exhibit A to Exhibit 4.3)	8-K	001-38002	4.3	04/27/2017
10.1†	2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries	S‑1/A	333‑207243	10.31	11/20/2015
10.2†	2007 Stock Incentive Plan Form of Stock Option Agreement, as amended on August 31, 2010	S‑1/A	333‑207243	10.32	11/20/2015
10.3†	2013 Long-Term Incentive Plan Form of Stock Option Agreement effective as of September 11, 2013	S‑1/A	333‑207243	10.34	11/20/2015
10.4†	Laureate Education, Inc. Deferred Compensation Plan, as amended and restated effective January 1, 2009	S‑1/A	333‑207243	10.35	11/20/2015
10.5†	Form of Management Stockholder’s Agreement for equityholders	S‑1/A	333‑207243	10.36	11/20/2015
10.6†	Employment Offer Letter, dated July 21, 2008, between Laureate Education, Inc. and Eilif Serck‑Hanssen	S‑1/A	333‑207243	10.40	11/20/2015
10.7†	Amendment to Employment Offer Letter, dated December 9, 2010, between Laureate Education, Inc. and Eilif Serck‑Hanssen	S‑1/A	333‑207243	10.41	11/20/2015
10.8†	Time‑Based Restricted Stock Agreement, effective August 5, 2008, between Laureate Education, Inc. and Eilif Serck‑Hanssen	S‑1/A	333‑207243	10.42	11/20/2015
10.9†	Form of Time‑Based Restricted Stock Units Agreement, for grants from and after September 11, 2013	S‑1/A	333‑207243	10.43	11/20/2015

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
10.14
Master Service and Confidentiality Agreement, dated April 28, 2014, by and between Laureate Education, Inc. and Accenture LLP
S‑1/A 333‑207243 10.45 11/20/2015
10.15‡
System Wide Master Agreement, dated April 10, 2015, between Blackboard Inc. and Laureate Education, Inc.
S‑1/A 333‑207243 10.46 11/20/2015
10.16†
Form of Stockholders’ Agreement for Entity‑Appointed Directors
S‑1/A 333‑207243 10.47 11/20/2015
10.17†
Form of Stockholders’ Agreement for Individual Directors
S‑1/A 333‑207243 10.48 11/20/2015
10.18†
2013 Long-Term Incentive Plan Form of Restricted Stock Units Agreement
S‑1/A 333‑207243 10.49 11/20/2015
10.19†
2013 Long-Term Incentive Plan Form of Performance Share Units Agreement
S‑1/A 333‑207243 10.50 11/20/2015
10.20
Form of Laureate Education, Inc. Note Exchange Agreement dated as of April 15, 2016
S‑1/A 333‑207243 10.53 05/20/2016
10.21†
Executive Retention Agreement, dated February 25, 2016, by and between Ricardo Berckemeyer and Laureate Education, Inc., effective as of September 1, 2015
S‑1/A 333‑207243 10.54 05/20/2016
10.22†
2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for 2016 for Named Executive Officers
S‑1/A 333‑207243 10.55 05/20/2016
10.23†
2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for 2016
S‑1/A 333‑207243 10.56 05/20/2016
10.24†
2013 Long‑Term Incentive Plan Form of Stock Option Agreement for 2016 for Named Executive Officers
S‑1/A 333‑207243 10.57 05/20/2016
10.25†
2013 Long‑Term Incentive Plan Form of Stock Option Agreement for 2016
S‑1/A 333‑207243 10.58 05/20/2016
10.26†
2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for 2016 for Named Executive Officers
S‑1/A 333‑207243 10.59 05/20/2016
10.27†
2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for 2016
S‑1/A 333‑207243 10.60 05/20/2016
10.28
Subscription Agreement, dated as of December 4, 2016, by and among Laureate Education, Inc., Macquarie Sierra Investment Holdings Inc., and each of the other Persons listed on Schedule A and Schedule B thereto.
S‑1/A 333‑207243 10.63 12/15/2016
10.29
Form of Registration Rights Agreement by and among Laureate Education, Inc., each of the Investors set forth on Schedule A thereto, Douglas L. Becker and Wengen Alberta, Limited Partnership
S‑1/A 333‑207243 10.64 12/15/2016
10.30
Form of Investors’ Stockholders Agreement by and among Laureate Education, Inc., Wengen Alberta, Limited Partnership and the Investors set forth on Schedule A thereto
S‑1/A 333‑207243 10.65 12/15/2016
10.31†
Deferred Compensation Letter Agreement, dated December 30, 2016, between Laureate Education, Inc. and Douglas L. Becker
S‑1/A 333‑207243 10.68 01/10/2017
10.32
Exchange and Registration Rights Agreement, dated as of December 30, 2016, among Laureate Education, Inc., the guarantors listed on the signature pages thereto and the initial holders listed on the signature pages thereto
S‑1/A 333‑207243 10.69 01/10/2017
10.33†
2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for October 2016
S‑1/A 333‑207243 10.70 01/10/2017
10.34†
2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for Named Executive Officers for October 2016
S‑1/A 333‑207243 10.71 01/10/2017
10.35†
2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for October 2016
S‑1/A 333‑207243 10.72 01/10/2017
10.36†
Form of Cash Long‑Term Incentive Plan Agreement
S‑1/A 333‑207243 10.73 01/10/2017



Exhibit No.	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
10.10	Master Service and Confidentiality Agreement, dated April 28, 2014, by and between Laureate Education, Inc. and Accenture LLP	S‑1/A	333‑207243	10.45	11/20/2015
10.11‡	System Wide Master Agreement, dated April 10, 2015, between Blackboard Inc. and Laureate Education, Inc.	S‑1/A	333‑207243	10.46	11/20/2015
10.12†	Form of Stockholders’ Agreement for Entity‑Appointed Directors	S‑1/A	333‑207243	10.47	11/20/2015
10.13†	Form of Stockholders’ Agreement for Individual Directors	S‑1/A	333‑207243	10.48	11/20/2015
10.14†	2013 Long-Term Incentive Plan Form of Restricted Stock Units Agreement	S‑1/A	333‑207243	10.49	11/20/2015
10.15†	2013 Long-Term Incentive Plan Form of Performance Share Units Agreement	S‑1/A	333‑207243	10.50	11/20/2015
10.17†	Executive Retention Agreement, dated February 25, 2016, by and between Ricardo Berckemeyer and Laureate Education, Inc., effective as of September 1, 2015	S‑1/A	333‑207243	10.54	05/20/2016
10.18†	2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for 2016 for Named Executive Officers	S‑1/A	333‑207243	10.55	05/20/2016
10.19†	2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for 2016	S‑1/A	333‑207243	10.56	05/20/2016
10.20†	2013 Long‑Term Incentive Plan Form of Stock Option Agreement for 2016 for Named Executive Officers	S‑1/A	333‑207243	10.57	05/20/2016
10.21†	2013 Long‑Term Incentive Plan Form of Stock Option Agreement for 2016	S‑1/A	333‑207243	10.58	05/20/2016
10.22†	2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for 2016 for Named Executive Officers	S‑1/A	333‑207243	10.59	05/20/2016
10.23†	2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for 2016	S‑1/A	333‑207243	10.60	05/20/2016
10.24	Subscription Agreement, dated as of December 4, 2016, by and among Laureate Education, Inc., Macquarie Sierra Investment Holdings Inc., and each of the other Persons listed on Schedule A and Schedule B thereto.	S‑1/A	333‑207243	10.63	12/15/2016
10.25	Registration Rights Agreement by and among Laureate Education, Inc., each of the Investors set forth on Schedule A thereto, Douglas L. Becker and Wengen Alberta, Limited Partnership	10-K	001-38002	10.29	03/20/2018
10.26	Investors’ Stockholders Agreement by and among Laureate Education, Inc., Wengen Alberta, Limited Partnership and the Investors set forth on Schedule A thereto	10-K	001-38002	10.30	03/20/2018
10.28†	2013 Long‑Term Incentive Plan Form of Restricted Stock Units Agreement for October 2016	S‑1/A	333‑207243	10.70	01/10/2017
10.29†	2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for Named Executive Officers for October 2016	S‑1/A	333‑207243	10.71	01/10/2017
10.30†	2013 Long‑Term Incentive Plan Form of Performance Share Units Agreement for October 2016	S‑1/A	333‑207243	10.72	01/10/2017
10.31†	Form of Cash Long‑Term Incentive Plan Agreement	S‑1/A	333‑207243	10.73	01/10/2017
10.32	Amended and Restated Securityholders Agreement by and among Wengen Alberta, Limited Partnership, Laureate Education, Inc. and the other parties thereto	8‑K	001‑38002	10.1	02/06/2017

Exhibit
No.
Exhibit Description Form File Number
Exhibit
Number
Filing Date
10.37
Amended and Restated Securityholders Agreement by and among Wengen Alberta, Limited Partnership, Laureate Education, Inc. and the other parties thereto
8‑K 001‑38002 10.1 02/06/2017
10.38
Amended and Restated Registration Rights Agreement by and among Wengen Alberta, Limited Partnership, Wengen Investments Limited, Laureate Education, Inc. and the other parties thereto
8‑K 001‑38002 10.2 02/06/2017
10.39†
Amendment to the 2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries
10-K 001-38002 10.76 03/29/2017
10.40†
CEO Option Award Agreement, $17.00 per share exercise price
8-K 001-38002 10.3 02/06/2017
10.41†
CEO Option Award Agreement, $21.32 per share exercise price
8-K 001-38002 10.4 02/06/2017
10.42
Form of Confirmation Letter, dated April 21, 2017, between Laureate Education, Inc. and the other party thereto
8-K 001-38002 10.1 04/27/2017
10.43†
Separation Agreement and General Release, dated March 28, 2017, between Enderson Guimarães and Laureate Education, Inc., effective as of March 23, 2017
10-Q 001-38002 10.80 05/11/2017
10.44
Seventh Amendment to Amended and Restated Credit Agreement, Amendment to Security Documents, and Release of Foreign Obligations and Certain Credit Parties, dated April 26, 2017, among Laureate Education, Inc., Iniciativas Culturales de España S.L., as the foreign subsidiary borrower, certain domestic subsidiaries of Laureate Education, Inc., Citibank, N.A., as administrative agent and collateral agent, certain financial institutions, and others party thereto
10-Q 001-38002 10.81 05/11/2017
10.45
Second Amended and Restated Credit Agreement, dated as of April 26, 2017, among Laureate Education, Inc., the lending institutions party thereto from time to time, and Citibank, N.A., as administrative agent and collateral agent
10-Q 001-38002 10.82 05/11/2017
10.46
Amended and Restated Guarantee, dated as of April 26, 2017, by Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as guarantors, in favor of Citibank, N.A., as collateral agent
10-Q 001-38002 10.83 05/11/2017
10.47
Amended and Restated Pledge Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as pledgors, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.84 05/11/2017
10.48
Amended and Restated Security Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as grantors, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.85 05/11/2017
10.49
Second Amended and Restated Collateral Agreement, dated as of April 26, 2017, between Walden University, LLC, certain other domestic subsidiaries of Laureate Education, Inc. from time to time, and Citibank, N.A., as collateral agent
10-Q 001-38002 10.86 05/11/2017
10.50†
Laureate Education, Inc. Amended and Restated 2013 Long-Term Incentive Plan

8-K 001-38002 10.1 06/20/2017
10.51†
Amended and Restated 2013 Long‑Term Incentive Plan Form of Annual Performance Share Units Notice and Agreement for 2017

10-Q 001-38002 10.51 08/08/2017
10.52†
Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017
10-Q 001-38002 10.52 08/08/2017
10.53†
Amended and Restated 2013 Long‑Term Incentive Plan Form of Time-based Stock Option Agreement for 2017
10-Q 001-38002 10.53 08/08/2017
10.54†
Amended and Restated 2013 Long‑Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017
10-Q 001-38002 10.54 08/08/2017
10.55†
Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance Share Units Notice and Agreement for 2017

10-Q 001-38002 10.55 08/08/2017



Exhibit No.	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
10.33	Amended and Restated Registration Rights Agreement by and among Wengen Alberta, Limited Partnership, Wengen Investments Limited, Laureate Education, Inc. and the other parties thereto	8‑K	001‑38002	10.2	02/06/2017
10.34†	Amendment to the 2007 Stock Incentive Plan for Key Employees of Laureate Education, Inc. and its Subsidiaries	10-K	001-38002	10.76	03/29/2017
10.36	Seventh Amendment to Amended and Restated Credit Agreement, Amendment to Security Documents, and Release of Foreign Obligations and Certain Credit Parties, dated April 26, 2017, among Laureate Education, Inc., Iniciativas Culturales de España S.L., as the foreign subsidiary borrower, certain domestic subsidiaries of Laureate Education, Inc., Citibank, N.A., as administrative agent and collateral agent, certain financial institutions, and others party thereto	10-Q	001-38002	10.81	05/11/2017
10.37	Second Amended and Restated Credit Agreement, dated as of April 26, 2017, among Laureate Education, Inc., the lending institutions party thereto from time to time, and Citibank, N.A., as administrative agent and collateral agent	10-Q	001-38002	10.82	05/11/2017
10.38	Amended and Restated Guarantee, dated as of April 26, 2017, by Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as guarantors, in favor of Citibank, N.A., as collateral agent	10-Q	001-38002	10.83	05/11/2017
10.39	Amended and Restated Pledge Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as pledgors, and Citibank, N.A., as collateral agent	10-Q	001-38002	10.84	05/11/2017
10.40	Amended and Restated Security Agreement, dated as of April 26, 2017, among Laureate Education, Inc. and certain domestic subsidiaries of Laureate Education, Inc. party thereto from time to time, as grantors, and Citibank, N.A., as collateral agent	10-Q	001-38002	10.85	05/11/2017
10.41	Second Amended and Restated Collateral Agreement, dated as of April 26, 2017, between Walden University, LLC, certain other domestic subsidiaries of Laureate Education, Inc. from time to time, and Citibank, N.A., as collateral agent	10-Q	001-38002	10.86	05/11/2017
10.42†	Laureate Education, Inc. Amended and Restated 2013 Long-Term Incentive Plan	8-K	001-38002	10.1	06/20/2017
10.43†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Annual Performance Share Units Notice and Agreement for 2017	10-Q	001-38002	10.51	08/08/2017
10.44†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017	10-Q	001-38002	10.52	08/08/2017
10.45†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Time-based Stock Option Agreement for 2017	10-Q	001-38002	10.53	08/08/2017
10.46†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017	10-Q	001-38002	10.54	08/08/2017
10.47†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance Share Units Notice and Agreement for 2017	10-Q	001-38002	10.55	08/08/2017
10.48†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017 for Certain Executives	10-Q	001-38002	10.56	08/08/2017
10.49†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Time-based Stock Option Agreement for 2017 for Certain Executives	10-Q	001-38002	10.57	08/08/2017



Exhibit No.	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
10.50†	Amended and Restated 2013 Long‑Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017 for Certain Executives	10-Q	001-38002	10.58	08/08/2017
10.51†	Form of 2017-2018 Laureate Executive Cash Long-Term Bonus Plan for Certain Executives	10-Q	001-38002	10.59	08/08/2017
10.52†	Employment Offer Letter, dated August 15, 2017, between Laureate Education, Inc. and Victoria Silbey	10-Q	001-38002	10.61	11/08/2017
10.53†	Form of Stock Option Agreement with exercise price of $18.36 for certain executives	10-Q	001-38002	10.64	11/08/2017
10.54†	Form of Stock Option Agreement with exercise price of $21.00 for certain executives	10-Q	001-38002	10.65	11/08/2017
10.55	First Amendment to Second Amended and Restated Credit Agreement, dated as of February 1, 2018 among Laureate Education, Inc., Citibank, N.A., as administrative agent and collateral agent, the other parties and financial institutions party thereto	8-K	001-38002	10.1	02/01/2018
10.56†	Employment Offer Letter, dated November 6, 2017, between Laureate Education, Inc. and Jean-Jacques Charhon	10-K	001-38002	10.67	03/20/2018
10.57†	Transitional Employment Agreement, effective as of November 9, 2017, between Paula Singer and Laureate Education, Inc.	10-K	001-38002	10.68	03/20/2018
10.58	Stock Option Agreement, dated as of January 2, 2018, between Jean-Jacques Charhon and Laureate Education, Inc.	10-Q	001-38002	10.71	05/09/2018
10.59†	Employment Offer Letter, dated May 3, 2018, between Timothy Grace and Laureate Education, Inc.	10-Q	001-38002	10.72	08/09/2018
10.60†	Amended and Restated International Letter of Assignment, dated July 12, 2017, between Neel Broker and Laureate Education, Inc.	10-K	001-38002	10.73	02/28/2019
10.61†	Addendum, dated December 18, 2018, to the Amended and Restated International Letter of Assignment between Neel Broker and Laureate Education, Inc.	10-K	001-38002	10.74	02/28/2019
10.62†	Form of 2019 Annual Incentive Plan	10-Q	001-38002	10.62	08/08/2019
10.63†	Laureate Education, Inc. Severance Policy for Executives	10-Q	001-38002	10.63	08/08/2019
10.64†	Form of Director Indemnity Agreement	10-Q	001-38002	10.64	08/08/2019
10.65†	Separation Agreement, dated July 14, 2019, between Ricardo Berckemeyer and Laureate Education, Inc., effective as of July 15, 2019	10-Q	001-38002	10.65	08/08/2019
10.66†	Separation Agreement and General Release, dated July 25, 2019, between Jose Roberto Loureiro and Laureate Education, Inc., effective as of July 29, 2019	10-Q	001-38002	10.66	08/08/2019
10.67#	Third Amended and Restated Credit Agreement, dated as of October 7, 2019, among Laureate Education, Inc., the lending institutions from time to time parties thereto, and Citibank, N.A., as administrative agent and collateral agent	8-K	001-38002	10.1	10/11/2019
21.1*	List of Subsidiaries of the Registrant
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
32*	Certifications pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002



Exhibit No.	Exhibit Description	Form	File Number	Exhibit Number	Filing Date
~~10.56†~~	~~Amended and Restated 2013 Long‑Term Incentive Plan Form of Performance-based Stock Option Agreement for 2017 for Certain Executives~~	~~10-Q~~	~~001-38002~~	~~10.56~~	~~08/08/2017~~
~~10.57†~~	~~Amended and Restated 2013 Long‑Term Incentive Plan Form of Time-based Stock Option Agreement for 2017 for Certain Executives~~	~~10-Q~~	~~001-38002~~	~~10.57~~	~~08/08/2017~~
~~10.58†~~	~~Amended and Restated 2013 Long‑Term Incentive Plan Form of Restricted Stock Units Notice and Agreement for 2017 for Certain Executives~~	~~10-Q~~	~~001-38002~~	~~10.58~~	~~08/08/2017~~
~~10.59†~~	~~Form of 2017-2018 Laureate Executive Cash Long-Term Bonus Plan for Certain Executives~~	~~10-Q~~	~~001-38002~~	~~10.59~~	~~08/08/2017~~
~~10.60†~~	~~Separation Agreement and General Release, dated May 30, 2017, between Alfonso Martinez and Laureate Education, Inc., effective as of May 31, 2017~~	~~10-Q~~	~~001-38002~~	~~10.60~~	~~08/08/2017~~
~~10.61*†~~	~~Employment Offer Letter, dated August 15, 2017, between Laureate Education, Inc. and Victoria Silbey~~
~~10.62*†~~	~~Separation Agreement and General Release, dated July 11, 2017, between Timothy F. Daniels and Laureate Education, Inc., effective December 31, 2017~~
~~10.63*†~~	~~Separation Agreement and General Release, dated August 28, 2017, between Robert W. Zentz and Laureate Education, Inc., effective December 31, 2017~~
~~10.64*†~~	~~Form of Stock Option Agreement with exercise price of $18.36 for certain executives~~
~~10.65*†~~	~~Form of Stock Option Agreement with exercise price of $21.00 for certain executives~~
21.1*	~~List of Subsidiaries of the Registrant~~
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~~
32*	~~Certifications pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002~~
Ex. 101.INS*	~~XBRL Instance Document~~
Ex. 101.SCH*	XBRL Taxonomy Extension Schema Document
Ex. 101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
Ex. 101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
Ex. 101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
Ex. 101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

*	Filed herewith.
#	Laureate Education, Inc. hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request.
†	Indicates a management contract or compensatory plan or arrangement.
‡	Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the U.S. Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November ~~8, 2017.~~6, 2019.

/s/ ~~EILIF SERCK-HANSSEN~~JEAN-JACQUES CHARHON

~~Eilif Serck-Hanssen~~Jean-Jacques Charhon

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

~~Administrative Officer~~

/s/ TAL DARMON

Tal Darmon

Senior Vice President, Chief Accounting Officer

and Global Controller

8185



Delaware			52-1492296
(State or other jurisdiction of			~~(I.R.S. Employer~~
incorporation or organization)		(I.R.S. Employer Identification No.)

650 S. Exeter Street,	Baltimore,	Maryland	21202
(Address of principal executive offices)			(Zip Code)



~~AUD: Australian Dollar~~BRL: Brazilian Real		CDI: Certificados de Depósitos Interbancários (Brazil)
~~BRL: Brazilian Real~~		~~IIBC: Índice de Inflación del Banco Central (Honduras)~~
EUR: European Euro		IGP-M: General Index of Market Prices (Brazil)
~~HNL: Honduran Lempira~~
USD: United States Dollar



	For the three months ended September 30,							For the nine months ended September 30,
	2017			2016				2017			2016
Revenues
Brazil	$	170,497		$	152,768			$	547,971		$	479,628
Mexico	141,175			140,400				451,993			455,130
Andean & Iberian	314,788			289,182				930,335			835,477
Central America & U.S. Campuses	69,598			65,602				219,081			207,142
EMEAA	126,353			116,967				468,339			584,979
Online & Partnerships	168,375			173,303				520,982			531,063
Corporate	(7,392		)	(8,367		)		(21,935		)	(25,120		)
Revenues	$	983,394		$	929,855			$	3,116,766		$	3,068,299
Adjusted EBITDA of reportable segments
Brazil	$	9,138		$	11,856		��	$	61,289		$	63,174
Mexico	6,465			24,775				78,590			89,292
Andean & Iberian	74,983			63,979				240,273			179,846
Central America & U.S. Campuses	9,731			7,472				38,480			31,657
EMEAA	(13,655		)	(24,365		)		54,166			67,951
Online & Partnerships	42,883			51,250				145,753			149,097
Total Adjusted EBITDA of reportable segments	129,545			134,967				618,551			581,017
Reconciling items:
Corporate	(42,976		)	(36,379		)		(141,556		)	(100,255		)
Depreciation and amortization expense	(67,930		)	(66,824		)		(199,394		)	(202,735		)
Loss on impairment of assets	—			—				—			—
Share-based compensation expense	(8,632		)	(8,030		)		(43,969		)	(28,939		)
EiP expenses	(15,703		)	(11,232		)		(58,344		)	(37,175		)
Operating (loss) income	(5,696		)	12,502				175,288			211,913
Interest income	5,840			3,437				14,994			13,305
Interest expense	(76,454		)	(104,781		)		(278,049		)	(314,383		)
Loss on debt extinguishment	—			(15,682		)		(8,425		)	(17,363		)
(Loss) gain on derivatives	(19,930		)	516				19,187			(8,235		)
Other (expense) income, net	(718		)	353				(667		)	(964		)
Foreign currency exchange gain (loss), net	7,327			26,329				(109		)	80,263
Gain (loss) on sales of subsidiaries, net	—			155,151				(172		)	398,412
(Loss) income from continuing operations before income taxes and equity in net income of affiliates	$	(89,631	)	$	77,825			$	(77,953	)	$	362,948



	September 30, 2019		December 31, 2018
Assets
Brazil	$	1,072,447	$	1,011,391
Mexico	1,284,743		971,309
Andean	1,922,829		1,608,406
Rest of World	203,881		196,370
Online & Partnerships	1,227,428		1,308,854
Corporate and Discontinued Operations	1,113,385		1,673,306
Total assets	$	6,824,713	$	6,769,636



	September 30, 2017		December 31, 2016
Assets
Brazil	$	1,288,014	$	1,245,264
Mexico	1,087,323		972,171
Andean & Iberian	2,264,689		1,951,864
Central America & U.S. Campuses	339,816		345,238
EMEAA	1,147,354		958,883
Online & Partnerships	1,215,107		1,297,798
Corporate	440,261		291,252
Total assets	$	7,782,564	$	7,062,470



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.004 per share	LAUR	The NASDAQ Stock Market LLC
Class A common stock, par value $0.004 per share	LAUR	Nasdaq Global Select Market



Class		Outstanding at September 30, ~~2017~~2019
Class A common stock, par value $0.004 per share		~~54,749,449~~127,753,927 shares
Class B common stock, par value $0.004 per share		~~132,574,979~~90,864,186 shares



INDEX
PART I. - FINANCIAL INFORMATION		Page No.

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Operations - Three months ended September 30, ~~2017~~2019 and ~~and~~ September 30, ~~2016~~2018	2

	Consolidated Statements of Operations - Nine months ended September 30, ~~2017~~2019 and ~~and~~ September 30, ~~2016~~2018	3

	Consolidated Statements of Comprehensive Income - Three months ended September 30, ~~2017~~2019 and ~~and~~ September 30, ~~2016~~2018	4

	Consolidated Statements of Comprehensive Income - Nine months ended September 30, ~~2017~~2019 and ~~and~~ September 30, ~~2016~~2018	5

	Consolidated Balance Sheets - September 30, ~~2017~~2019 and December 31, ~~2016~~2018	6

	Consolidated Statements of Cash Flows - Nine months ended September 30, ~~2017~~2019 and ~~and~~ September 30, ~~2016~~2018	8

	Notes to Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4048

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7076

Item 4.	Controls and Procedures	7076

PART II. - OTHER INFORMATION

Item 1.	Legal Proceedings	7178

Item 1A.	Risk Factors	7378

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7579

Item 6.	Exhibits	7780

SIGNATURES		8185



Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share	$	(1.02	)	$	0.66
Diluted (loss) earnings per share	$	(1.02	)	$	0.66



Basic and diluted (loss) earnings per share:
Basic (loss) earnings per share	$	(1.77	)	$	2.50
Diluted (loss) earnings per share	$	(1.77	)	$	2.49



	CA Nursing Australia
Property and equipment	$	9,581
Goodwill	3,099
Other intangible assets	3,293
Total assets acquired	15,973
Current portion of long-term debt	166
Other current liabilities	5,960
Long-term debt, less current portion	7,267
Other long-term liabilities	1,745
Total liabilities	15,138
Net assets acquired attributable to Laureate Education, Inc.	835
Debt assumed	7,433
Net assets acquired attributable to Laureate Education, Inc. plus debt assumed	$	8,268

Net assets acquired	$	835
Net cash paid at acquisition	$	835



Long-term debt, including current portion	$	34,798
Other liabilities	196,681
Total liabilities held for sale	$	231,479



	Gain Recognized in Comprehensive Income (Effective Portion)				Income Statement Location	Loss Reclassified from AOCI to Income (Effective Portion)
	2017		2016		Income Statement Location	2017			2016
Interest rate swaps	$	525	$	2,386	Interest expense	$	(972	)	$	(2,687	)



	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016
Unrealized (Loss) Gain
Contingent redemption features - Series A Preferred	$	(19,974	)	$	—		$	19,468		$	—
Cross currency and interest rate swaps	151			(3,979		)	24			(1,514		)
Interest rate swaps	58			17			129			(34		)
	(19,765		)	(3,962		)	19,621			(1,548		)
Realized (Loss) Gain
Cross currency and interest rate swaps	(165		)	4,539			(434		)	(6,530		)
Interest rate swaps	—			(61		)	—			(157		)
	(165		)	4,478			(434		)	(6,687		)
Total (Loss) Gain
Contingent redemption features - Series A Preferred	(19,974		)	—			19,468			—
Cross currency and interest rate swaps	(14		)	560			(410		)	(8,044		)
Interest rate swaps	58			(44		)	129			(191		)
(Loss) gain on derivatives, net	$	(19,930	)	$	516		$	19,187		$	(8,235	)



	Total Assets (Liabilities)
Balance December 31, 2016	$	(8,504	)
Gain (loss) included in earnings:
Unrealized gains, net	19,621
Realized losses, net	(434		)
Included in other comprehensive income	6,625
Included in issuance of Series A convertible redeemable Preferred Stock	4,382
Settlements	434
Currency translation adjustment	(497		)
Balance September 30, 2017	$	21,627
Unrealized gain, net relating to derivatives held at September 30, 2017	$	19,621



Balance at December 31, 2018	$	(7,418	)
Gain included in earnings:
Unrealized gains, net	4,305
Realized gains, net	3,794
Included in other comprehensive income	(7,950		)
Settlements	(4,634		)
Reclassification, currency translation adjustment and other	12,187
Balance at September 30, 2019	$	284



	Fair Value at September 30, 2019		Valuation Technique	Unobservable Input	Range/Input Value
Derivative instruments - cross currency swaps	$	284	Discounted Cash Flow	Credit Risk	3.50%



	September 30, 2019		September 30, 2018		December 31, 2018
Cash and cash equivalents	$	323,930	$	384,980	$	387,780
Restricted cash	183,819		191,281		195,792
Total Cash and cash equivalents and Restricted cash shown in the Consolidated Statements of Cash Flows	$	507,749	$	576,261	$	583,572



	Fair Value at September 30, 2017			Valuation Technique	Unobservable Input	Range/Input Value
Contingent redemption features - Series A Preferred Stock	$	28,314		Monte Carlo Simulation Method	Credit Risk	5.05	%
Derivative instruments - cross currency and interest rate swaps	$	(6,687	)	Discounted Cash Flow	Credit Risk	4.45	%



	Countries ⁽²⁾	Institutions	Enrollment	2017 YTD Revenues ($ in millions) ⁽¹⁾		% Contribution to 2017 YTD Revenues
Brazil	1	13	275,000	$	548.0	17	%
Mexico	1	2	212,300	452.0		14	%
Andean & Iberian	5	16	329,800	930.3		30	%
Central America & U.S. Campuses ⁽²⁾	4	8	71,000	219.1		7	%
EMEAA ⁽³⁾	13	26	126,900	468.3		15	%
Online & Partnerships ⁽²⁾	2	3	64,700	521.0		17	%
Total ^{(1) (2)}	25	68	1,079,700	$	3,116.8	100	%

Number of Financing Receivable Accounts

Balance at Default