Fourth Quarter & Year-End 2020 Earnings Presentation

February 25, 2021

Forward Looking Statements

This presentation includes statements that express Laureate's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, ''forward-looking statements'' within the meaning of the federal securities laws, which involve risks and uncertainties. Laureate's actual results may vary significantly from the results anticipated in these forward-looking statements. You can identify forward-looking statements because they contain words such as ''believes,'' ''expects,'' ''may,'' ''will,'' ''should,'' ''seeks,'' ''approximately,'' ''intends,'' ''plans,'' ''estimates'' or ''anticipates'' or similar expressions that concern our strategy, plans or intentions. All statements we make relating to (i) guidance (including, but not limited to, total enrollments, revenues and Adjusted EBITDA), (ii) our planned divestitures, the expected proceeds generated therefrom and the expected reduction in revenue resulting therefrom, (iii) our exploration of strategic alternatives and potential future plans, strategies or transactions that may be identified, explored or implemented as a result of such review process and any resulting litigation or dispute therewith and (iv) the potential impact of the COVID-19 pandemic on our business or the global economy as a whole are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, including, with respect to our exploration of strategic alternatives, risks and uncertainties as to the terms, timing, structure, benefits and costs of any divestiture or separation transaction and whether one will be consummated at all, and the impact of any divestiture or separation transaction on our remaining businesses. Accordingly, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations are disclosed in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on February 25, 2021, and other filings made with the SEC. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

In addition, this presentation contains various operating data, including market share and market position, that are based on internal company data and management estimates. While management believes that our internal company research is reliable and the definitions of our markets which are used herein are appropriate, neither such research nor these definitions have been verified by an independent source and there are inherent challenges and limitations involved in compiling data across various geographies and from various sources, including those discussed under "Market and Industry Data" in Laureate's filings with the SEC.

Presentation of Non-GAAP Measures

In addition to the results provided in accordance with U.S. generally accepted accounting principles (GAAP) throughout this presentation, Laureate provides the non-GAAP measurements of Adjusted EBITDA, Adjusted EBITDA margin, total debt, net of cash (or net debt), and Free Cash Flow. We have included these non-GAAP measurements because they are key measures 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.

Adjusted EBITDA consists of income (loss) from continuing operations, adjusted for the items included in the accompanying reconciliation. 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 input into the formula 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 and Adjusted EBITDA margin, which is calculated by dividing Adjusted EBITDA by revenues, provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Total debt, net of cash (or net debt) consists of total gross debt, including seller notes, for Continuing Operations and Discontinued Operations, less total cash and cash equivalents for Continuing Operations and Discontinued Operations. Net debt provides a useful indicator about Laureate's leverage and liquidity.

Free Cash Flow consists of operating cash flow minus capital expenditures. Free Cash Flow provides a useful indicator about Laureate's ability to fund its operations and repay its debts.

Laureate's calculations of Adjusted EBITDA, Adjusted EBITDA margin, total debt, net of cash (or net debt), and Free Cash Flow are not necessarily comparable to calculations performed by other companies and reported as similarly titled measures. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Adjusted EBITDA is reconciled from the GAAP measure in the attached table "Non-GAAP Reconciliation."

We evaluate our results of operations on both an as reported and an organic constant currency basis. The organic constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates, acquisitions and divestitures, and other items. We believe that providing organic constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate organic constant currency amounts using the change from prior-period average foreign exchange rates to current-period average foreign exchange rates, as applied to local-currency operating results for the current period, and then exclude the impact of acquisitions and divestitures and other items described in the accompanying presentation.

SUMMARY OVERVIEW

Note: Throughout this presentation amounts may not sum to totals due to rounding

Amounts presented for enrollments, Revenue, Adjusted EBITDA and Adjusted EBITDA margin are for continuing operations only

Executive Summary

  • Fourth quarter Revenue & Adjusted EBITDA ahead of guidance

  • Net Income of $379M in Q4 driven by gain on sale of Australia/NZ business units

  • Strong Free Cash Flow performance in FY 2020; up 2% Vs. prior year despite COVID pandemic

  • Highly reputed institutions - continued recognition for quality of educational offerings

  • Closed sale of Australia/NZ for approx. $650M in November - Net Debt of $202M outstanding at year-end

  • Additional $1.95 billion of net proceeds from signed asset sales expected during 20211

  • Mexico & Peru to be retained in a focused organization - still open to further engagement with potential buyers if accretive

  • $167M in Share Repurchases completed to-date since November (total of 11.7M shares repurchased)

Strong Execution Against all Operating & Strategic Priorities

(1)Based on anticipated net proceeds (net of taxes, fees and other costs) for sales of Walden, Brazil, and Honduras. Includes assumed debt and anticipated release of restricted cash (collateral for letter of credit and bonds at Walden); assumes all pending asset sale transaction close on announced terms.

Laureate Portfolio Overview

  • (1) Based on 2020 actual results; amount shown is for just Mexico & Peru segments (i.e. excluding corporate segment G&A expense which were $97M in 2020). Corporate G&A expenses are expected to be reduced by 70-80% post completion of the pending asset sales.

  • (2) Based on anticipated net proceeds (net of taxes, fees and other costs) for sales of Walden, Brazil, and Honduras. Includes assumed debt, and anticipated release of restricted cash

(collateral for letter of credit and bonds at Walden); assumes all pending asset sale transaction close on announced terms.

Mexico & Peru Higher Education Market Overview

Mexico

Peru

Combined

Population (M)Higher Education Students (000s)

Sources: UNESCO, World Bank, SEP database

  • (1) Defined as total enrollments as compared to 18-24 year old population

    127M

    33M

    160M

    4,562

    1,896

    6,458

    30%

    47%

    34%

    44%

    72%

    56%

  • (2) Private institution market share in higher education; for Mexico and Combined includes all states in which UVM or UNITEC have operations (total private market share for all of Mexico is 35%); for Peru based on total country

Attractive Markets with Significant Growth Opportunities Participation Rates Growing and Still Well Below Developed Markets

Leading University Portfolio in Mexico & Peru

QS Stars™

Overall

Enrollments Market UniversityInstitution

@ 12/31/20 Segment RatingRatings/Ranking

  • Ranked #7 university in Mexico

    MexicoUniversidad del Valle de México (UVM)

    95,000

    Premium/ Traditional

  • One of only three 4-Star rated universities in Mexico by QS Stars™

    Universidad Tecnológica de México (UNITEC)

    Mexico

    99,000

    Value/ Teaching

  • Largest private university in Mexico

  • 5-Stars rated by QS Stars™ in categories of Teaching & Employability

Peru

Universidad Peruana de Ciencias Aplicadas

(UPC)

55,000

Premium/ Traditional

  • Ranked #3 university in Peru

  • Only 4-Star rated university in Peru by QS Stars™

    Universidad Privada del Norte (UPN)

    Peru

    73,700

    Value/ Teaching

  • 2nd largest private university in Peru

  • 5-Stars rated by QS Stars™ in categories of Teaching & Employability

    Peru

    CIBERTEC

    13,800

    Tech/VocN/A

  • 2nd largest private tech/voc institute in Peru

Sources: QS Stars™, Guía Universitaria (UVM), Scimago Institutions Rankings (UPC)

Operating Leading Brands in Multiple Attractive Market Segments

Q4 & FY 2020 PERFORMANCE RESULTS

CONTINUING OPERATIONS ONLY (I.E. MEXICO, PERU AND CORPORATE SEGMENTS)

2020 Fourth Quarter - Financial Summary

Q4 '20

Variance Vs. Q4 '19

Notes

($ in millions) (Enrollments in thousands)

ResultsAs Reported Organic/CC1

New Enrollment

4K

nm

nm

Not a material intake cycle

Total Enrollment

337K

(8%)

(8%)

Driven by lower NE volumes and

increased attrition from COVID

Revenue

285

(19%)

(13%)

Driven by lower enrollment

Adj. EBITDA

91

(9%)

(2%)

Benefitting from cost actions

Adj. EBITDA margin

31.8%

351 bps

379 bps

Tight Cost Management Mitigating Top Line Pressure Related to COVID

2020 FY - Financial Summary

FY '20

Variance Vs. FY'19

Notes

($ in millions)

(Enrollments in thousands)

New Enrollment

169K

(6%)

(6%)

Mexico (-5% vs PY)

Peru (-9% vs. PY)

Total Enrollment

337K

(8%)

(8%)

Driven by lower NE volumes and

increased attrition from COVID

Revenue

$1,025

(15%)

(9%)

Driven by lower enrollment

Adj. EBITDA

$206

1%

13%

Benefitting from cost actions

Adj. EBITDA margin

20.1%

327bps

398 bps

Continued margin progression

ResultsAs Reported Organic/CC1

Tight Cost Management Mitigating Top Line Pressure Related to COVID

SEGMENT RESULTS

CONTINUING OPERATIONS ONLY (I.E. MEXICO, PERU AND CORPORATE SEGMENTS)

Mexico Segment Results

Q4 Results

FY '20 Results

Organic/CC

Organic/CC

($ in millions)

(Enrollments in thousands)

Vs. Q4 '19 (1)

Vs. FY '19 (1)

Q4 '20

107K (5%)

Notes

FY '20

194K $150 $54

Total Enrollment

Adj. EBITDA

(5%)

194K (5%)

  • • Driven by lower NE volumes

$535 (9%)

(15%)

$113 (14%)

Acceleration of Mix Shift Towards Online Face-to-Face Operations Disproportionately Impacted by COVID

  • 36.4% (12 bps)21.1%

Peru Segment Results

Q4 Results

FY '20 Results

Organic/CC

Organic/CC

($ in millions)

(Enrollments in thousands)

Vs. Q4 '19 (1)

Vs. FY '19 (1)

Q4 '20

62K (9%)

143K $132 $61

Total Enrollment

Adj. EBITDA

(12%)

FY '20

Notes

143K (12%)

  • • Driven by lower NE volumes and increased attrition from COVID (primarily UPN)

$483 (7%)

2%

$190 1%

  • 46.0% 523 bps39.2%

Strong Operating Results Despite Significant Enrollment Pressure due to COVID

Corporate G&A Expense

($USD in millions)

Last Twelve Months Corporate Segment G&A Expenses

Further reductions of approx. 70-80% expected (run-rate) following completion of pending asset sales.1

$142 $133 $121

$104

$97

FY 2019

LTM Q1 '20

LTM Q2 '20

LTM Q3 '20

FY 2020

Significant Reductions in Corporate G&A Continuing Throughout 2020 Further Right-Sizing Expected Following Completion of Pending Asset Sales

(1)Estimated G&A reduction assumes completion of all pending asset sales (Walden, Brazil and Honduras).

FY 2020 Debt Capitalization - Adjusted for Pending Asset Sales

($ in millions)

AmountComments

$1,950

Net Proceeds - Pending Asset Sales1

Including assumed debt

Pro-Forma Net Cash Position of Approximately $1.75Bn

(1)Based on anticipated net proceeds (net of taxes, fees and other costs) for sales of Walden, Brazil and Honduras. Includes assumed debt and anticipated release of restricted cash (collateral for letter of credit and bonds at Walden); assumes all pending asset sale transaction close on announced terms.

OUTLOOK

Guidance Outlook

  • Mexico and Peru remain attractive market opportunities long term

  • 2021 will be a transition year for Laureate

    Enrollment expected to be impacted by the COVID pandemic for most of 2021

    Down-sizing of Corporate G&A by 70-80% to happen throughout the year - mostly in H2

  • 2021 dynamics by segment will be largely unchanged vs. 2020

  • 2022 Adjusted EBITDA expected to be up +51% Vs. 2021 after transition is completed

  • Financials expected to return to pre-COVID trends starting in 2022

Strong Outlook Expected for New Portfolio Post COVID

2021 Full Year Guidance Details

(USD millions, except enrollments in thousands)

Total Enrollment

Revenues

Adj. EBITDA

2020 Results

337K

$1,025

$206

Organic Growth

0K

($25) - $15

($17) - ($7)

Growth %

0%

(2%) - 2%

(8%) - (3%)

FAS 5 Expense/Indemnification Asset (non-cash)

-

-

($9)

2021 Guidance (Constant Currency)

337K

$1,000 - $1,040

$180 - $190

FX Impact (spot FX) (1)

-

-

-

2021 Guidance (@ spot FX) (1)

337K

$1,000 - $1,040

$180 - $190

Growth %

0%

(2%) - 2%

(13%) - (8%)

Continued COVID Headwinds Expected for Much of 2021

Recovery Anticipated in 2022

(1) Based on actual FX rates for January 2021, and current spot FX rates (local currency per US dollar) of MXN 19.93 & PEN 3.64 for February through December 2021. FX impact may change based on fluctuations in currency rates in future periods.

Note: An outlook for 2021 net income and reconciliation of the forward-looking 2021 Adjusted EBITDA outlook to projected net income are not being provided as the company

does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. Due to this uncertainty, the company cannot reconcile Adjusted EBITDA to projected net income without unreasonable effort.

Laureate Summary Outlook - 2020 to 2022E (As Reported)1

Total Enrollment (000s)

Revenue ($M)

350

337

337

2020

2021E

2022E

2020

2021E

2022E

Adjusted EBITDA ($M)

Adjusted EBITDA Margin %

2020

25.9

2021E

2022E

2020

2021E

2022E

Strong Rebound Expected for 2022

(1) 2021 and 2022 guidance based on actual FX rates for January 2021, and current spot FX rates (local currency per US dollar) of MXN 19.93 & PEN 3.64 for February 2021 through December 2022. FX impact may change based on fluctuations in currency rates in future periods. 2021 is based on mid-point of guidance.

Note: An outlook for 2021 & 2022 net income and reconciliation of the forward-looking 2021 & 2022 Adjusted EBITDA outlook to projected net income are not being provided

as the company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. Due to this uncertainty, the company cannot reconcile Adjusted EBITDA to projected net income without unreasonable effort.

2021 to 2022 Adjusted EBITDA Bridge (Guidance)1

($USD in millions)

G&A Reduction

2021 Guidance (2)

FAS 5 / Indemnification AssetOperational Improvement

2022 Guidance

Strong Rebound Expected for 2022

(1) Based on actual FX rates for January 2021, and current spot FX rates (local currency per US dollar) of MXN 19.93 & PEN 3.64 for February 2021 through December 2022. FX impact may change based on fluctuations in currency rates in future periods.

(2) Based on mid-point of 2021 guidance.

Note: An outlook for 2021 & 2022 net income and reconciliation of the forward-looking 2021 & 2022 Adjusted EBITDA outlook to projected net income are not being provided as the company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. Due to this uncertainty, the company cannot reconcile Adjusted EBITDA to projected net income without unreasonable effort.

Portfolio Outlook for 2022 & Beyond

(Normalized Continuing Operations1 )

COVID IMPACTED

PERIOD

2016 - 2019

CAGR

2019 - 2021E

CAGR 2

2022+ Expected CAGR 3

Total Enrollment

3%

(4%)

4% - 6%

Revenue

6%

(8%)

5% - 7%

Adjusted EBITDA

9%

(13%)

9% - 11%

Adjusted EBITDA Margin

+85bps/yr

(155)bps/yr

+100bps/yr

Expecting to Return to pre-COVID Trends Starting in 2022

  • (1) For 2021 and all historical periods, Normalized Continuing Operations is based on operations in Mexico & Peru plus $25M of corporate G&A expense per year

  • (2) Excludes impact from FAS 5 expenses / indemnification assets in 2019 - 2021E which are related to prior period acquisitions (non-cash)

  • (3) Based on $USD

Q1 2021 Guidance Details

Revenues

Adj. EBITDA

(USD millions)

2020 Q1 Results

$192

($29)

Organic Growth

($7) - $3

$11 - $15

Growth %

(4%) - 2%

37% - 52%

FAS 5 Expense/Indemnification Asset (non-cash)

-

($8)

2021 Q1 Guidance (Constant Currency)

$185 - $195

($26) - ($22)

FX Impact (spot FX) (1)

-

-

2021 Q1 Guidance (@ spot FX) (1)

$185 - $195

($26) - ($22)

Favorably Impacted by

timing of academic calendar

(1) Based on actual FX rates for January 2021, and current spot FX rates (local currency per US dollar) of MXN 19.93 & PEN 3.64 for February through March 2021. FX impact may change based on fluctuations in currency rates in future periods.

Note: An outlook for 2021 net income and reconciliation of the forward-looking 2021 Adjusted EBITDA outlook to net income are not being provided as the company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. Due to this uncertainty, the company cannot reconcile Adjusted EBITDA to projected net income without unreasonable effort.

APPENDIX

2020 Fourth Quarter - Net Income Reconciliation

Q4 '20B / (W) Vs. Q4 '19Notes

($ in millions)

Adjusted EBITDA

Reported91

$

%

  • (9) (9%)

    • • ($9M) impact from FX

      Depreciation & Amort.

      (27)

  • (7) (33%)

    • • Flat excluding amortization of tradename (moved to finite life asset in Q4)

    Interest Expense, net

    (25)

  • (2) (8%)

Impairments

(1)

(1)n.m.

Other

(119)

(61)

n.m.

  • • FX and derivatives

    Income Tax

    Income/(Loss) From Continuing Operations Discontinued Operations (Net of Tax)

    Net Income / (Loss)

    (163)

    (244)

    623

    (226)

    (305)

    624

    n.m.

  • • Tax effect from discrete items

n.m.

n.m.

  • • Driven by $556M gain on sale of Australia/NZ businesses

379

318

n.m.

Income from Continuing Operations Impacted by FX

2020 FY - Net Income Reconciliation

FY '20

B / (W) Vs. FY '19

($ in millions)

Adjusted EBITDA

Reported206

Notes

$

%

2 1%

($25M) impact from FX

Depreciation & Amort.

(83)

(1) (1%)

Interest Expense, net

(99)

23 19%

Lower average debt balances in 2020

Impairments

Other

Income Tax

Income/(Loss) From Continuing Operations Discontinued Operations (Net of Tax)

Net Income / (Loss)

(352)

(352)n.m.

130

  • • Loss on debt extinguishment in 2019 & FX impacts in 2020

    161

    n.m.

    (298)

  • • Primarily Laureate tradename impairment

  • • Tax effect from discrete items

  • • Driven by impairment charges

    (1,386)

    n.m.

  • • Business units sold in 2019 impacting y-o-y comparability; Chile impairment in Q2 2020

(619)

(1,556)n.m.

Income from Continuing Operations Impacted by Impairment Charges

FY 2020 Debt Capitalization

Gross Debt

$ - $799 $250 $1,049

Revolver

Sr. Notes

Local Debt / Seller Notes

$ -

$ -- $799

$173 $423

$173

$1,222

Cash

($750)

($270)

($1,020)

Net Debt / (Cash)

$299

($97)

$202

Net Debt of Only $202M as of Year-End 2020 Revolver Fully Repaid During Fourth Quarter ($410M Available)

Discontinued Operations - Q4 2020 vs. Q4 2019

Online1

Brazil1

Other2

Total Disc. Ops

($ in millions) (Enrollments in thousands)

Q4 '20

Vs. Q4 '19

Organic/ CC vs. Q4 '193

Q4 '20

Vs. Q4 '19

Organic/ CC vs. Q4 '193

Q4 '20

Vs. Q4 '19

12%2 (63%) (62%)32

6 23 11%Total Enrollment

58 256 (6%)

2%

2%

(6%) 21 (91%) (91%) 335

163121 (23%)

4% 48 (83%)

Adjusted EBITDA

43 (10%) (10%) 47 (8%)

17% 8 (87%) (87%) 98

Organic/ CC vs. Q4 '193

Vs.

Organic/

Q4

CC vs.

'19

Q4 '193

(5%)

(5%)

(42%)

(42%)

(83%)332

(43%)

(37%)

(38%)

(28%)

Q4 '20

  • (1) Sale of both Walden University and Brazilian operations expected to close in 2021.

  • (2) Other predominantly includes divestitures already closed and completed.

  • (3) Organic Constant Currency (CC) Operations excludes the period-over-period impact from currency fluctuations (if applicable), acquisitions and divestitures, and other items. Other items include the impact of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.

Discontinued Operations - FY 2020 vs. FY 2019

Online1

($ in millions) (Enrollments in thousands)

(6%)92

Brazil1

Vs. FY '19

Organic/

FY '20

CC vs.FY '20 FY '193

Vs. FY '19

  • 5% 5%174 (12%)

    Other2

    Total Disc. Ops

    Organic/ CC vs. FY '193

    Vs. FY '19

    Organic/

    FY '20

    CC vs.FY '20 FY '193

    (29%) (29%)298

    Vs. FY '19

    Organic/ CC vs. FY '193

    (17%) (14%)Total Enrollment

    58

  • 2% 2% 256 (6%)

    (6%) 21

    • (91%) (91%)

      335 (42%) (42%)

      185

      Adjusted EBITDA

  • 1% 1%386 (33%)

  • (3%) (3%) 68 (17%)

  • (1) Sale of both Walden University and Brazilian operations expected to close in 2021.

  • (2) Other predominantly includes divestitures already closed and completed.

    (8%)649

    11%

    • (51%) (45%)1,675

    139 (53%)

    (47%)

  • (3) Organic Constant Currency (CC) Operations excludes the period-over-period impact from currency fluctuations (if applicable), acquisitions and divestitures, and other items. Other items include the impact of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.

(34%) (26%)

392

(31%) (23%)

Q4 2020 vs. Q4 2019 - Adjusted EBITDA Reconciliation

$623 ($1)

(Loss) income from discontinued operations, net of tax Income tax expense

$19 $82

Other non-operating expense (income)

($11) $25

(Gain)/Loss on sale of discontinued operations before taxes, net

($341) $24

Operating income Depreciation and amortization Share-based compensation expense1 (Gain) on impairment of assets2

$290 $131

$0 $27

$1 $1

($201) ($25)

EiP implementation expenses3 Adjusted EBITDA (before allocations) Allocations, net

$8 $21

$98 $155

$0 $2

Adjusted EBITDA

$98 $157

  • (1) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718.

  • (2) Represents non-cash charges related to impairments of long-lived assets.

  • (3) Excellence-in-Process (EiP) implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate's processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned and completed dispositions. Beginning in the third quarter of 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue

FY 2020 vs. FY 2019 - Adjusted EBITDA Reconciliation

($298) $1,088

(Loss) income from discontinued operations, net of tax Income tax expense

$114 $34

Other non-operating expense

$69 $71

(Gain) on sale of discontinued operations before taxes, net

($25) ($793)

Operating (loss) income Depreciation and amortization Share-based compensation expense1 Loss on impairment of assets2

($140) $399

$60 $111

$3 $3

$438 $1

EiP implementation expenses3 Adjusted EBITDA (before allocations) Allocations, net

$30 $48

$391 $561

$1 $7

Adjusted EBITDA

$392 $569

  • (1) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718.

  • (2) Represents non-cash charges related to impairments of long-lived assets.

  • (3) Excellence-in-Process (EiP) implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate's processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned and completed dispositions. Beginning in the third quarter of 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue

Intra-Year Seasonality Trends

  • • Large intake cycles at end of Q1 (Peru) and end of Q3 (Mexico) drive seasonality of earnings

  • • Q2 and Q4 are typically Laureate's strongest earnings quarters

Revenue Seasonality

Adjusted EBITDA Seasonality

-24%

Q1

Q2

Q3

Q4

2018

2019

2020

New Enrollments Seasonality

50%

51%

48%

Q22018

Factors Affecting Seasonality

2018

  • Main intake cycles: - Q1 - Peru

    -

    Q3 - Mexico

  • Academic calendar

  • FX trends

2019

2020

Q1

Q32020

Q4

2019

Normalized Continuing Operations - Summary Results (Adjusted)1

Total Enrollment (000s)

2016

2016

2017

2018

2019

Adjusted EBITDA ($M)Revenue ($M)

2017

2018

2019

Adjusted EBITDA Margin %

2016

2017

2018

2019

2016

2017

2018

Strong Growth Track Record and Consistent Margin Expansion

(1) Defined as historical results for operations in Mexico & Peru, and including $25M of corporate G&A expense per year

2019

Financial Results & Tables

Consolidated Statements of Operations

For the three months ended December 31,

For the year ended December 31,

IN MILLIONS

2020

2019

Change

2020

2019

Change

Revenues

$

285.2$

351.8$

(66.6)$

1,024.9$

1,212.1$

(187.2)

Costs and expenses:

Direct costs

188.3

242.4

(54.1)

802.5

949.5

(147.0)

General and administrative expenses

59.0

52.1

6.9

199.8

226.3

(26.5)

Loss on impairment of assets

1.0

-

1.0

352.0

0.2

351.8

Operating income (loss)

36.9

57.3

(20.4)

(329.3)

36.0

(365.3)

Interest income

0.6

0.7

(0.1)

2.2

3.3

(1.1)

Interest expense

(25.2)

(23.5)

(1.7)

(100.9)

(125.0)

24.1

Loss on debt extinguishment

(0.6)

(0.5)

(0.1)

(0.6)

(22.6)

22.0

(Loss) gain on derivatives

(25.4)

(0.9)

(24.5)

(26.0)

8.3

(34.3)

Other (expense) income, net

(3.2)

(0.2)

(3.0)

(2.4)

8.9

(11.3)

Foreign currency exchange (loss) gain, net

(57.6)

(15.7)

(41.9)

13.5

(8.1)

21.6

Loss on disposals of subsidiaries, net

(6.1)

(19.0)

12.9

(7.3)

(20.4)

13.1

Loss from continuing operations before income taxes and

equity in net income of affiliates

(80.6)

(1.7)

(78.9)

(450.8)

(119.7)

(331.1)

Income tax (expense) benefit

(163.4)

62.9

(226.3)

130.1

(31.0)

161.1

Equity in net income of affiliates, net of tax

-

-

-

0.2

0.2

-

(Loss) income from continuing operations

(244.1)

61.2

(305.3)

(320.6)

(150.5)

(170.1)

Income (loss) from discontinued operations, net of tax

623.1

(0.6)

623.7

(298.1)

1,088.1

(1,386.2)

Net income (loss)

379.0

60.6

318.4

(618.7)

937.7

(1,556.4)

Net loss attributable to noncontrolling interests

0.3

0.3

-

5.4

0.8

4.6

Net income (loss) attributable to Laureate Education, Inc.

$

379.3$

60.9$

318.4$

(613.3)$

938.5$

(1,551.8)

interests and equity

$

0.3

Net income (loss) available to common stockholders

$

379.3$

60.4$

318.9$

(613.2)$

938.3$

(1,551.5)

Basic and diluted earnings (loss) per share:

Basic weighted average shares outstanding

209.1

214.3

(5.2)

209.7

221.9

(12.2)

Dilutive weighted average shares outstanding

209.1

214.9

(5.8)

209.7

221.9

(12.2)

Basic and diluted earnings (loss) per share

$

1.81$

0.28$

1.53$

(2.93)$

4.23$

(7.16)

Accretion of redemption value of redeemable noncontrolling- $

(0.5) $

0.5

$

0.1

$

(0.2) $

Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding

Revenue and Adjusted EBITDA by segment

IN MILLIONS

For the three months ended December 31,

2020

2019

Revenues

Mexico Peru

$

149.6$ 131.5

188.1155.7

Corporate & Eliminations

4.2

8.0

Total Revenues

  • $ 285.2$

    351.8(19)% (13)%$

    Adjusted EBITDA

    Mexico

    Peru

    Corporate & Eliminations

  • $ 54.4$ 60.5(24.3)

67.3(19)% (15)%$

63.8(31.7)

Total Adjusted EBITDA

$

90.6$

99.4

% Change

Organic

Constant

Reported Currency(1)

Total

FX

(38.5)$

(27.4)$

-$

-$

(11.1)

(24.2)

(15.0)

-

-

(9.2)

(3.8)

(3.8)

-

-

-

(66.6)$

(46.3)$

-$

-$

(20.3)

(12.9)$

(10.1)$

1.6$

-$

(4.4)

(3.3)

1.2

-

-

(4.5)

7.4

7.4

-

-

-

(8.8)$

(1.5)$

1.6$

-$

(8.9)

$ Variance Components

Organic

Constant

Currency Other Acq/Div.

(20)% (15)%$

(16)% (10)%

(48)% (48)%

(5)% 2%

23% 23%

(9)%

(2)%

$

(1) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures, and other items. Other items include the impact of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2019 Revenues and Adjusted EBITDA amounts.

Revenue and Adjusted EBITDA by segment

IN MILLIONS

For the year ended December 31, Revenues Mexico Peru

2020

2019

Corporate & Eliminations Total Revenues

Adjusted EBITDA Mexico

Peru

Corporate & Eliminations Total Adjusted EBITDA

1,212.1(15)% (9)%$

(18)% (9)%$

147.8(24)% (14)%$

% Change

Organic

Constant

Reported Currency(2)

Total

FX

(118.2)$

(59.8)$

-$

-$

(58.4)

(63.9)

(40.5)

-

-

(23.4)

(5.1)

(5.1)

-

-

-

(187.2)$

(105.4)$

-$

-$

(81.8)

(34.9)$

(21.0)$

0.8$

-$

(14.7)

(8.3)

2.1

-

-

(10.4)

45.3

45.3

-

-

-

2.1$

26.4$

0.8$

-$

(25.1)

$ Variance Components Organic

Constant

Currency Other Acq/Div.

(12)% (7)%

(41)% (41)%

(4)% 1%

32% 32%

1%

13%

$

(2) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures, and other items. Other items include the impact of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2019 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures.

Consolidated Balance Sheets

IN MILLIONS

December 31, 2020

December 31, 2019

Change

Assets

Cash and cash equivalents

$

688.5

Receivables (current), net

111.9

75.1

36.8

Other current assets

146.8

72.9

73.9

Current assets held for sale

435.0

706.5

(271.5)

Property and equipment, net

578.5

640.6

(62.1)

Operating lease right-of-use assets, net

462.8

521.8

(59.0)

Goodwill and other intangible assets

800.4

1,168.6

(368.2)

Deferred income taxes

130.6

49.4

81.2

Other long-term assets

72.4

98.9

(26.5)

Long-term assets held for sale

1,482.5

3,101.0

(1,618.5)

Total assets

$

4,970.9$

6,496.4$

(1,525.5)

Liabilities and stockholders' equity

Accounts payable and accrued expenses

$

200.9$

267.7$

(66.8)

Deferred revenue and student deposits

47.2

54.8

(7.6)

Total operating leases, including current portion

519.1

559.0

(39.9)

Total long-term debt, including current portion

995.7

1,151.4

(155.7)

Other liabilities

240.0

292.1

(52.1)

Current and long-term liabilities held for sale

702.3

1,354.9

(652.6)

Total liabilities

2,705.2

3,680.0

(974.8)

Redeemable noncontrolling interests and equity

1.7

12.3

(10.6)

Total stockholders' equity

2,263.9

2,804.2

(540.3)

Total liabilities and stockholders' equity

$

4,970.9$

6,496.4$

(1,525.5)

Note: Dollars in millions, and may not sum to total due to rounding

750.1$

61.6$

Consolidated Statements of Cash Flows

For the year ended December 31,

IN MILLIONS

Cash flows from operating activities Net (loss) income

Net cash provided by operating activities Cash flows from investing activities

Net cash provided by investing activities 587.4Cash flows from financing activities

Net cash used in by financing activities (272.7)

Effects of exchange rate changes on cash (0.5)

Change in cash included in current assets held for sale 195.8

Net change in cash and cash equivalents 769.5

Cash and cash equivalents at beginning of period 97.8

Depreciation and amortization 193.4

Amortization of operating lease right-of-use assets 122.7

Loss on impairment of assets 0.9 Gain on sales and disposal of subsidiaries and property and equipment, net

Loss (Gain) on derivative instruments

(Payments for) proceeds from settlement of derivative contracts Loss on debt extinguishment

Deferred income taxes

Unrealized foreign currency exchange loss Income tax receivable/payable, net Working capital, excluding tax accounts Other non-cash adjustments

Purchase of property and equipment (74.6)

Expenditures for deferred costs (14.5)

Receipts from sales of discontinued operations, net of cash sold, property and equipment and other 676.6

Settlement of derivatives related to sale of discontinued operations and net investment hedge Proceeds from sale of investment

Investing other, net

Decrease in long-term debt, net (177.0)

Payments of deferred purchase price for acquisitions (5.7)

Payments to purchase noncontrolling interests (13.7)

Proceeds from exercise of stock options 25.7

Payments to repurchase common stock (99.5)

Payments of debt issuance costs (0.8)

Financing other, net (1.8)

Cash and cash equivalents at end of period

Note: Dollars in millions, and may not sum to total due to rounding

$

$

2020

Change

(618.7)

(1,556.4)

143.5

(49.9)

80.2

(42.5)

790.2

789.3

(22.8)

(753.5)

730.7

26.0

(7.4)

33.4

(0.6)

(8.8)

8.2

0.6

28.8

(28.2)

(185.7)

(29.8)

(155.9)

26.3

29.2

(2.9)

99.6

(36.2)

135.8

(227.2)

(252.8)

25.6

148.1

115.8

32.3

259.6

339.8

(80.2)

(155.6)

81.0

(17.7)

3.2

1,266.0

(589.4)

12.9

(12.9)

11.5

(11.5)

(0.3)

0.3

1,116.8

(529.4)

(1,384.6)

1,207.6

(20.2)

14.5

(5.8)

(7.9)

14.0

11.7

(264.1)

164.6

(9.1)

8.3

(4.2)

2.4

(1,674.0)

1,401.3

5.1

(5.6)

184.6

11.2

(27.8)

797.3

125.6

(27.8)

97.8$

769.5

2019

$

937.7$

- - -

867.3$

Non-GAAP Reconciliation (1 of 2)

The following table reconciles (loss) income from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin:

For the three months ended December 31,For the year ended December 31,

IN MILLIONS

2020

2019

Change

2020

2019

Change

(Loss) income from continuing operations

$

(244.1)$

61.2$

(305.3)$

(320.6)$

(150.5)$

(170.1)

Plus:

Equity in net income of affiliates, net of tax

-

-

-

(0.2)

(0.2)

-

Income tax expense (benefit)

163.4

(62.9)

226.3

(130.1)

31.0

(161.1)

Loss from continuing operations before income taxes and

equity in net income of affiliates

(80.6)

(1.7)

(78.9)

(450.8)

(119.7)

(331.1)

Plus:

Loss on disposal of subsidiaries, net

6.1

19.0

(12.9)

7.3

20.4

(13.1)

Foreign currency exchange loss (gain), net

57.6

15.7

41.9

(13.5)

8.1

(21.6)

Other expense (income), net

3.2

0.2

3.0

2.4

(8.9)

11.3

Loss (gain) on derivatives

25.4

0.9

24.5

26.0

(8.3)

34.3

Loss on debt extinguishment

0.6

0.5

0.1

0.6

22.6

(22.0)

Interest expense

25.2

23.5

1.7

100.9

125.0

(24.1)

Interest income

(0.6)

(0.7)

0.1

(2.2)

(3.3)

1.1

Operating income (loss)

36.9

57.3

(20.4)

(329.3)

36.0

(365.3)

Plus:

Depreciation and amortization

27.2

20.4

6.8

83.1

82.0

1.1

EBITDA

64.1

77.7

(13.6)

(246.2)

118.0

(364.2)

Plus:

Share-based compensation expense (3)

2.3

2.8

(0.5)

10.2

10.3

(0.1)

Loss on impairment of assets (4)

1.0

-

1.0

352.0

0.2

351.8

EiP implementation expenses (5)

23.2

18.9

4.3

89.6

75.0

14.6

Adjusted EBITDA

$

90.6$

99.4$

(8.8)$

205.7$

203.6$

2.1

Revenues

$

285.2$

351.8$

(66.6)$

1,024.9$

1,212.1$

(187.2)

Adjusted EBITDA margin

31.8 %

28.3 %

351 bps

20.1 %

16.8 %

327 bps

  • (3) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718, "Stock Compensation."

  • (4) Represents non-cash charges related to impairments of long-lived assets.

  • (5) EiP implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate's processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned and

completed dispositions. Beginning in 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.

.

Non-GAAP Reconciliation (2 of 2)

The following table presents Free cash flow and reconciles Net cash flows from operating activities to Free cash flow:

For the year ended December 31,

IN MILLIONS

2020

2019

2018

Net cash provided by operating activities

Capital expenditures:

$

259.6$

339.8$ 396.9

Purchase of property and equipment Expenditures for deferred costs Free cash flow

(74.6)(14.5)

(155.6)(238.0)

(17.7)(19.9)

$

170.5$

166.5$ 139.0

Financial Tables (Historical Data)

Revenue and Adjusted EBITDA by segment (historical)

The following table presents segment information for the four quarters of 2020 and the years ended December 31, 2020, 2019 and 2018:

Three Months Ended

Years ended December 31,

(in millions except for enrollment)

New Enrollment:

Mexico

Peru

Total New Enrollment

Total Enrollment as of Reporting Date:

Mexico 194,000192,100

Peru 142,500143,500

Total Enrollment

Revenues: Mexico Peru

Corporate & Eliminations Consolidated Total Revenues

Adjusted EBITDA: Mexico

Peru

Corporate & Eliminations Consolidated Total Adjusted EBITDA

June 30,

March 31,

2020

2020

2020

2019

2018

12,100

28,400

107,200

112,400

109,000

24,500

18,300

61,800

67,900

58,300

36,600

46,700

169,000

180,300

167,300

168,400

193,800

194,000

204,200

206,300

152,800

163,500

142,500

162,200

147,700

321,200

357,300

336,500

366,400

354,000

$

149.6$

115.9$

114.9$

154.2$

534.6$

652.8$

646.1

131.5

127.3

187.6

36.5

482.9

546.8

496.4

4.2

0.3

1.4

1.6

7.4

12.5

2.1

$

285.2$

243.5$

303.9$

192.3$

1,024.9$

1,212.1$

1,144.6

$

54.4$

15.5$

19.7$

23.3$

112.9$

147.8$

143.1

60.5

56.5

99.2

(26.7)

189.5

197.5

169.2

(24.3)

(21.6)

(24.8)

(26.0)

(96.7)

(141.7)

(172.7)

$

90.6$

50.4$

94.1$

(29.4)$

205.7$

203.6$

139.6

December 31, September 30, 2020

2020

3,70063,000

50018,4004,20081,400

336,500

335,600

Attachments

  • Original document
  • Permalink

Disclaimer

Laureate Education Inc. published this content on 25 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 February 2021 15:42:00 UTC.