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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2019
OR
☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to __________.
Commission File Number: 001-38002
Laureate Education, Inc.
(Exact name of registrant as specified in its charter)

Delaware |  | 52-1492296
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
650 S. Exeter Street, | Baltimore, | Maryland |  | 21202
(Address of principal executive offices) |  | (Zip Code)

Registrant’s telephone number, including area code: (410) 843-6100
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer ☐ Non-accelerated filer ☐ (Do not check if a smaller reporting company)
Smaller reporting company ☐ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class |  | Outstanding at September 30, 2019
Class A common stock, par value $0.004 per share |  | 127,753,927 shares
Class B common stock, par value $0.004 per share |  | 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, 2019 and September 30, 2018 |  | 2
| Consolidated Statements of Operations - Nine months ended September 30, 2019 and September 30, 2018 |  | 3
| Consolidated Statements of Comprehensive Income - Three months ended September 30, 2019 and September 30, 2018 |  | 4
| Consolidated Statements of Comprehensive Income - Nine months ended September 30, 2019 and September 30, 2018 |  | 5
| Consolidated Balance Sheets - September 30, 2019 and December 31, 2018 |  | 6
| Consolidated Statements of Cash Flows - Nine months ended September 30, 2019 and September 30, 2018 |  | 8
| Notes to Consolidated Financial Statements |  | 9
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 48
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |  | 76
Item 4. | Controls and Procedures |  | 76
PART II. - OTHER INFORMATION
Item 1. | Legal Proceedings |  | 78
Item 1A. | Risk Factors |  | 78
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |  | 79
Item 6. | Exhibits |  | 80
SIGNATURES |  | 85

1

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
IN THOUSANDS, except per share amounts

For the three months ended September 30, | 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 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.
2

LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
IN THOUSANDS, except per share amounts

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 |

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.
3

LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
IN THOUSANDS

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.
4

LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
IN THOUSANDS

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.
5

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.
6

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.
7

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.
8

Laureate Education, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars and shares in thousands)
Note 1. Description of Business
Laureate Education, Inc. and subsidiaries (hereinafter Laureate, we, us, our, or the Company) provide higher education programs and services to students through an international 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. The Company completed its initial public offering (IPO) on February 6, 2017 and its shares are listed on the Nasdaq Global Select Market under the symbol ‘‘LAUR.’’
Discontinued Operations
On August 9, 2018, the Company announced the divestiture of additional subsidiaries located in Europe, Asia and Central America, which are included in the Rest of World (formerly called EMEAA), Andean (formerly called Andean & Iberian), and Central America & U.S. Campuses 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 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 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 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 information in the footnotes to the Consolidated Financial Statements relates to 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, 2018 (the 2018 Form 10-K).
9

Note 2. Significant Accounting Policies
The Variable Interest Entity (VIE) Arrangements
Laureate consolidates in its financial statements certain internationally based educational organizations that do not have shares or other equity ownership interests. Although these educational organizations may be considered not-for-profit entities in their home countries and they are operated in compliance with their respective not-for-profit legal regimes, we believe they do not meet the definition of a not-for-profit entity under GAAP, and therefore we treat them as ‘‘for-profit’’ entities for accounting purposes. These entities generally cannot declare dividends or distribute their net assets to the entities that control them.
Under ASC 810-10, ‘‘Consolidation,’’ we have determined that these institutions are VIEs and that Laureate is the primary beneficiary of these VIEs because we have, as further described herein: (1) the power to direct the activities of the VIEs that most significantly affect their educational and economic performance and (2) the right to receive economic benefits from contractual and other arrangements with the VIEs that could potentially be significant to the VIEs. We account for the acquisition of the right to control a VIE in accordance with ASC 805, ‘‘Business Combinations.’’
The VIEs in Brazil and Mexico comprise several not-for-profit foundations that have insignificant revenues and operating expenses. Selected Consolidated Statements of Operations information for VIEs that are included in continuing operations was as follows, net of the charges related to the above-described contractual arrangements:

| For the three months ended 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 |

10

The following table reconciles the Net 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,
| 2019 |  | 2018 |  | 2019 |  | 2018
Net income (loss) attributable to Laureate Education, Inc.: |  |  |  |  |  |  |
Variable interest entities | $ | 25,510 |  |  | $ | 18,812 |  |  | $ | 43,094 |  |  | $ | 22,860 |
Other operations | 33,432 |  |  | 21,564 |  |  | 687,966 |  |  | 241,920 |
Corporate and eliminations | (154,168 | ) |  | (135,165 | ) |  | 146,549 |  |  | 33,719 |
Net (loss) income attributable to Laureate Education, Inc. | $ | (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.
11

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.
Recently Issued Accounting Standards Not Yet Adopted
Accounting Standards Update (ASU) No. 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;

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• | 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 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. We adopted this ASU on January 1, 2019 and the impact was not material.
ASU No. 2018-15 (ASU 2018-15) Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)
In August 2018, the FASB issued ASU 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 a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). Laureate elected to early adopt ASU 2018-15 on January 1, 2019, and the impact on our Consolidated Financial Statements was not material.
Note 3. Revenue
Revenue Recognition
Laureate's revenues primarily consist of tuition and educational service revenues. We also generate other revenues from student fees, dormitory/residency fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. Revenues are recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. Laureate's institutions have various billing and academic cycles.
We determine revenue recognition through the five-step model prescribed by ASC Topic 606, Revenue from Contracts with Customers, as follows:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when, or as, we satisfy a performance obligation.
We assess collectibility on a portfolio basis prior to recording revenue. Generally, students cannot re-enroll for the next academic session without satisfactory resolution of any past-due amounts. If a student withdraws from an institution, Laureate's obligation to issue a refund depends on the refund policy at that institution and the timing of the student's withdrawal. Generally, our refund obligations are reduced over the course of the academic term. We record refunds as a reduction of deferred revenue as applicable.
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The following table shows the components of Revenues by reportable segment and as a percentage of total net revenue for the three months ended September 30, 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 elimination of intersegment revenues.
The following table shows the components of Revenues by reportable segment and as a percentage of total net revenue for the nine months ended September 30, 2019 and 2018:

| 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.
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Contract Balances
The timing of billings, cash collections and revenue recognition results in accounts receivable (contract assets) and deferred revenue and student deposits (contract liabilities) on the Consolidated Balance Sheets. We have various billing and academic cycles and recognize student receivables when an academic session begins, although students generally enroll in courses prior to the start of the academic session. Receivables are recognized only to the extent that it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the goods and services that will be transferred to the student. We receive advance payments or deposits from our students before revenue is recognized, which are recorded as contract liabilities in deferred revenue and student deposits. Payment terms vary by university with some universities requiring payment in advance of the academic session and other universities allowing students to pay in installments over the term of the academic session.
All of our contract assets are considered accounts receivable and are included within the Accounts and notes receivable balance in the accompanying Consolidated Balance Sheets. Total accounts receivable from our contracts with students were $533,000 and $373,855 as of September 30, 2019 and December 31, 2018, respectively. The increase in the 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 $464,340 and $193,226 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of September 30, 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 nine months ended September 30, 2019 that was included in the contract liability balance at the beginning of the year was approximately $175,611.
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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 principal markets that will 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 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. As of September 30, 2019, one VIE institution in Honduras is included in the 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 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 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 | )

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The assets and liabilities of 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 or their estimated ‘fair values less costs to sell.’ In addition to the Discontinued Operations, Centro Universitário do Norte (UniNorte), a traditional higher education institution located in the city of Manaus, Brazil, has also been classified as held for sale as of September 30, 2019 and 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 of UniNorte closed on November 1, 2019. See Note 21, Subsequent Events.
The carrying amounts of the major classes of assets and liabilities that were classified as held for sale 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 | 259,884 |  |  | 671,121 |
Goodwill | 9,613 |  |  | 131,329 |
Tradenames | 6,893 |  |  | 124,932 |
Operating lease right-of-use assets, net | 66,673 |  |  | — |
Other assets | 61,056 |  |  | 106,326 |
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 |

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| 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 laws of Brazil (the UniNorte Seller), which is an indirect wholly owned subsidiary of the 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 $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 Design, LLC (NSAD)
On June 14, 2019, the Company and Exeter Street Holdings, LLC, an indirect wholly owned subsidiary of 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
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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 five 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 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, 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 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 three 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
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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.
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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 6. Due to Shareholders of Acquired Companies
The amounts due to shareholders of acquired companies generally arise in connection with Laureate’s acquisition of a majority or all of the ownership interest of these companies. Promissory notes payable to the sellers of acquired companies, referred to as “seller notes,” are commonly used as a means of payment for business acquisitions. Seller note payments are classified as Payments of deferred purchase price for acquisitions within financing activities in our Consolidated Statements of Cash Flows. The amounts due to shareholders of acquired companies, currencies, and interest rates applied were as follows:

| September 30, 2019 | December 31, 2018 | Nominal Currency | Interest Rate %
Universidade Anhembi Morumbi (UAM Brazil) | $ | 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) | — |  | 11,395 |  | USD | 7%
Total due to shareholders of acquired companies | 21,458 |  | 45,391 |  |  |
Less: Current portion of due to shareholders of acquired companies | 11,502 |  | 23,820 |  |  |
Due to shareholders of acquired companies, less current portion | $ | 9,956 |  | $ | 21,571 |  |  |

BRL: Brazilian Real |  | CDI: Certificados de Depósitos Interbancários (Brazil)
EUR: European Euro |  | IGP-M: General Index of Market Prices (Brazil)
USD: United States Dollar |  |

FAPA
In August 2019, the FAPA seller note matured and was settled, with an amount of $217 withheld from the payment. This amount relates to certain contingencies for which we are indemnified by the seller. This amount will remain until the contingencies have been resolved.
St. Augustine
During the second quarter of 2019, the Company fully repaid the St. Augustine seller note, following the resolution of certain legal matters for which the Company was indemnified by the former owner, as previously disclosed in our 2018 10-K.
Note 7. Business and Geographic Segment Information
Laureate’s educational services are offered through six operating segments: Brazil, Mexico, Andean, Central America & U.S. Campuses, Rest of World and Online & Partnerships. Laureate determines its operating segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.
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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. The campus-based segments include Brazil, Mexico, Andean, Central America & U.S. Campuses and 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, 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.
Public universities in Mexico enroll approximately 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 segment includes institutions in Chile and Peru. In Chile, private universities enroll approximately 80% of post-secondary students and there are government-sponsored student financing programs. In Peru, the public sector plays a significant role, but private universities are increasingly providing the capacity to meet growing demand.
The Central America & 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.
The Rest of World segment includes campus-based institutions in Asia Pacific with operations in Australia, Malaysia and New Zealand. Additionally, the Rest of World segment manages one institution in China through a joint venture arrangement and, until August 31, 2019 when the contract expired, the Rest of World segment also managed eight licensed institutions in the Kingdom of Saudi Arabia. The institutions in Malaysia and the Kingdom of Saudi Arabia are included in Discontinued Operations.
The Online & Partnerships segment includes fully online institutions that offer 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.
As discussed in Note 1, Description of Business, and Note 4, Discontinued Operations and Assets Held for Sale, a number of our subsidiaries have met the requirements to be classified as discontinued operations, including the entire Central America & U.S. Campuses segment. As a result, the operations of the Central America & U.S. Campuses segment have been excluded from the segment information for all periods presented. In addition, the portion of the Rest of World reportable segment that is included in Discontinued Operations has also been excluded from the segment information for all periods presented.
Intersegment transactions are accounted for in a similar manner as third-party transactions and are eliminated in consolidation. The Corporate amounts presented in the following tables include corporate charges that were not allocated to our reportable segments and adjustments to eliminate intersegment items.
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We evaluate segment performance based on Adjusted EBITDA, which is a non-GAAP performance measure defined as Income (loss) from continuing operations before income taxes and equity in net income of affiliates, adding back the following items: Loss on sale or disposal of subsidiaries, Foreign currency exchange loss, net, Other income, net, Gain on derivatives, Loss on debt extinguishment, Interest expense, Interest income, Depreciation and amortization expense, Loss on impairment of assets, Share-based compensation expense and expenses related to our Excellence-in-Process (EiP) initiative. EiP is an enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure and certain non-recurring costs incurred in connection with the planned dispositions described in Note 4, Discontinued Operations and Assets Held for Sale, and the completed dispositions described in Note 5, Dispositions. Beginning in 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.
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When we review Adjusted EBITDA on a segment basis, we exclude intercompany revenues and expenses related to network fees and royalties between our segments, which eliminate in consolidation. We use total assets as the measure of assets for reportable segments.
The following tables provide financial information for our reportable segments, including a reconciliation of Adjusted EBITDA to (Loss) income from continuing operations before income taxes and equity in net income of affiliates, as reported in the Consolidated Statements of Operations:

| For the three months ended |  | For the nine months ended
| September 30, |  | September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Revenues |  |  |  |  |  |  |
Brazil | $ | 114,055 |  |  | $ | 121,089 |  |  | $ | 421,129 |  |  | $ | 469,480 |
Mexico | 145,790 |  |  | 148,325 |  |  | 464,709 |  |  | 463,868 |
Andean | 307,270 |  |  | 299,613 |  |  | 869,207 |  |  | 844,213 |
Rest of World | 52,585 |  |  | 47,701 |  |  | 137,204 |  |  | 131,412 |
Online & Partnerships | 155,501 |  |  | 165,221 |  |  | 476,991 |  |  | 498,207 |
Corporate | (1,502 | ) |  | (3,694 | ) |  | (2,066 | ) |  | (9,418 | )
Revenues | $ | 773,699 |  |  | $ | 778,255 |  |  | $ | 2,367,174 |  |  | $ | 2,397,762 |
Adjusted EBITDA of reportable segments |  |  |  |  |  |  |
Brazil | $ | 3,134 |  |  | $ | 682 |  |  | $ | 31,334 |  |  | $ | 52,600 |
Mexico | 23,064 |  |  | 23,715 |  |  | 80,476 |  |  | 81,965 |
Andean | 92,604 |  |  | 90,610 |  |  | 246,095 |  |  | 235,376 |
Rest of World | 11,455 |  |  | 8,046 |  |  | 20,205 |  |  | 11,968 |
Online & Partnerships | 44,320 |  |  | 45,725 |  |  | 142,755 |  |  | 136,126 |
Total Adjusted EBITDA of reportable segments | 174,577 |  |  | 168,778 |  |  | 520,865 |  |  | 518,035 |
Reconciling items: |  |  |  |  |  |  |
Corporate | (40,827 | ) |  | (45,562 | ) |  | (117,895 | ) |  | (127,567 | )
Depreciation and amortization expense | (48,557 | ) |  | (52,806 | ) |  | (145,108 | ) |  | (161,185 | )
Loss on impairment of assets | — |  |  | (10,030 | ) |  | (470 | ) |  | (10,030 | )
Share-based compensation expense | (1,459 | ) |  | (6,388 | ) |  | (9,194 | ) |  | (9,572 | )
EiP expenses | (38,004 | ) |  | (24,996 | ) |  | (77,332 | ) |  | (60,292 | )
Operating income | 45,730 |  |  | 28,996 |  |  | 170,866 |  |  | 149,389 |
Interest income | 3,154 |  |  | 3,502 |  |  | 9,552 |  |  | 9,358 |
Interest expense | (40,319 | ) |  | (58,319 | ) |  | (136,438 | ) |  | (181,746 | )
Loss on debt extinguishment | (200 | ) |  | — |  |  | (26,417 | ) |  | (7,481 | )
Gain (loss) on derivatives | 284 |  |  | (144 | ) |  | 8,099 |  |  | 92,112 |
Other income, net | 1,038 |  |  | 8,312 |  |  | 9,138 |  |  | 10,815 |
Foreign currency exchange loss, net | (14,777 | ) |  | (26,443 | ) |  | (10,643 | ) |  | (43,959 | )
Loss on disposal of subsidiaries | (1,474 | ) |  | — |  |  | (1,474 | ) |  | — |
(Loss) income from continuing operations before income taxes and equity in net income of affiliates | $ | (6,564 | ) |  | $ | (44,096 | ) |  | $ | 22,683 |  |  | $ | 28,488 |

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| 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 |

Note 8. Goodwill
The change in the net carrying amount of Goodwill from December 31, 2018 through September 30, 2019 was composed of the following items:

| Brazil | Mexico | Andean | Rest of World | Online & Partnerships | Total
Balance at December 31, 2018 | $ | 406,452 |  | $ | 498,219 |  | $ | 254,259 |  | $ | 87,419 |  | $ | 460,740 |  | $ | 1,707,089 |
Acquisitions | 1,333 |  | — |  | — |  | — |  | — |  | 1,333 |
Dispositions | — |  | — |  | — |  | — |  | — |  | — |
Impairments | — |  | — |  | — |  | — |  | — |  | — |
Currency translation adjustments | (29,194 | ) | 10,143 |  | (8,366 | ) | (3,613 | ) | — |  | (31,030 | )
Adjustments to prior acquisitions | — |  | — |  | — |  | — |  | — |  | — |
Balance at September 30, 2019 | $ | 378,591 |  | $ | 508,362 |  | $ | 245,893 |  | $ | 83,806 |  | $ | 460,740 |  | $ | 1,677,392 |

In March 2019, the Company's indirect, wholly owned subsidiary, UAM Brazil, acquired a company in Brazil that, prior to the acquisition, was a vendor providing distance-learning and marketing services to the Company's Brazil operations. The total purchase price was BRL 5,022 ($1,333 at the date of purchase), which was recorded as Goodwill given the immaterial nature of the acquisition. The acquiree was merged into UAM Brazil.
Note 9. 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 |

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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 Notes due 2025 and the 2024 Term Loan, prior to its repayment in 2019, were traded in a brokered market. The fair value of our remaining debt instruments approximates carrying value based on their terms. As of September 30, 2019 and December 31, 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, 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 |

Loss on Debt Extinguishment
As discussed in Note 5, Dispositions, the Company completed 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 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 2019, following the closing of the Turkey transaction described in Note 5, Dispositions, the Company fully repaid a note payable at Universidad del Valle de México (UVM Mexico) that had a remaining balance outstanding of approximately $103,000.
In connection with these debt repayments, the Company recorded a Loss on debt extinguishment 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 repaid debt balances, as well as the debt discount associated with the 2024 Term Loan.
Certain Covenants
As of September 30, 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, 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 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 4.75 x as of such date and (ii) less than 25% of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply. As of September 30, 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.
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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 | %

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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 |

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Note 11. Commitments and Contingencies
Noncontrolling Interest Holder Put Arrangements
The following section provides a summary table and description of our noncontrolling interest holder put arrangements, which relate to Discontinued Operations, that Laureate had outstanding as of September 30, 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, 2019, the carrying value of all noncontrolling interest holder put arrangements was $10,230.
If the minority put arrangements were all exercised at September 30, 2019, Laureate would be obligated to pay the noncontrolling interest holders an estimated amount of $10,230, as summarized in the following table:

| 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 Holdings) - 10.10% | MYR | Current | $ | 10,230 |  |  | $ | 10,230 |
Total noncontrolling interest holder put arrangements |  |  | 10,230 |  |  | 10,230 |
Puttable common stock - not currently redeemable | USD | * | — |  |  | 1,714 |
Total redeemable noncontrolling interests and equity |  |  | $ | 10,230 |  |  | $ | 11,944 |

* Contingently redeemable
MYR: Malaysian Ringgit
Laureate’s noncontrolling interest put arrangements are specified in agreements with each noncontrolling interest holder. The terms of these agreements determine the measurement of the redemption value of the put options based on a non-GAAP measure of earnings before interest, taxes, depreciation and amortization (EBITDA, or recurring EBITDA), the definition of which varies for each particular contract.
Loss Contingencies
Laureate is subject to legal actions arising in the ordinary course of its business. In management's opinion, we have adequate legal defenses, insurance coverage and/or accrued liabilities with respect to the eventuality of such actions. We do not believe that any settlement would have a material impact on our Consolidated Financial Statements.
Contingent Liabilities for Taxes
As of September 30, 2019 and December 31, 2018, Laureate has recorded cumulative liabilities totaling $50,644 and $52,880, respectively, for taxes other-than-income tax, principally payroll-tax-related uncertainties recorded at the time of an 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. These liabilities were included in current and long-term liabilities on the Consolidated Balance Sheets. Changes in the recorded values of non-income tax contingencies impact operating income and interest expense, while changes in the related indemnification assets impact only operating income. The total (decrease) increase to operating income for adjustments to non-income tax contingencies and indemnification assets was $(5,196) and $843, respectively, for the nine months ended September 30, 2019 and 2018.
In addition, as of September 30, 2019 and December 31, 2018, Laureate has recorded cumulative liabilities for income tax contingencies of $53,907 and $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,
29

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, that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable. In most cases, Laureate has received indemnifications from the former owners and/or noncontrolling interest holders of the acquired businesses for contingencies, and therefore, we do not believe we will sustain an economic loss even if we are required to pay these additional amounts. In cases where we are not indemnified, the unrecorded contingencies are not individually material and are primarily in Brazil. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies in Brazil could be up to approximately $46,000 if the outcomes were unfavorable in all cases.
Other Loss Contingencies
Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities. Laureate intends to vigorously defend against these matters. As of September 30, 2019 and December 31, 2018, approximately $32,130 and $29,000, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets. In addition, as of September 30, 2019 and 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 legal matter related to LEILY with no cost to the Company, resulting in additional gain on sale.
Material Guarantees – Student Financing
The accredited Chilean institutions in the Laureate network also participate in a government-sponsored student financing program known as Crédito con Aval del Estado (the CAE Program). The CAE Program was formally implemented by the Chilean government in 2006 to promote higher education in Chile for lower socio-economic level students in good academic standing. The CAE Program involves tuition financing and guarantees that are provided by our institutions and the government. As part of the CAE Program, these institutions provide guarantees which result in contingent liabilities to third-party financing institutions, beginning at 90% of the tuition loans made directly to qualified students enrolled through the CAE Program and declining to 60% over time. The guarantees by these institutions are in effect during the period in which the student is enrolled, and the guarantees are assumed entirely by the government upon the student’s graduation. When a student leaves one of Laureate's institutions and enrolls in another CAE-qualified institution, the Laureate institution will remain guarantor of the tuition loans that have been granted up to the date of transfer, and until the student's graduation from a CAE-qualified institution. The maximum potential amount of payments our institutions could be required to make under the CAE Program was approximately $484,000 and $499,000 at September 30, 2019 and December 31, 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, 2019 and December 31, 2018, we recorded $34,138 and $28,254, respectively, as estimated long-term guarantee liabilities for these obligations.
Material Guarantees – Other
In conjunction with the purchase of 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 its acquired shares to third-party lenders as a guarantee of our payment obligations under the loans that financed a portion of the purchase price. The shares are pledged until full repayment of the loans, which mature in April 2021.
In connection with a loan agreement entered into by a Laureate subsidiary in Peru, all of the shares of Universidad Privada del Norte, one of our universities, were pledged to the third-party lender as a guarantee of the payment obligations under the loan.
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Standby Letters of Credit, Surety Bonds and Other Commitments
As of September 30, 2019 and December 31, 2018, Laureate's outstanding letters of credit (LOCs) and surety bonds primarily consisted of the items discussed below.
As of September 30, 2019 and December 31, 2018, we had approximately $127,000 and $139,000, respectively, posted as LOCs in favor of the DOE. These LOCs were required to allow Walden, 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 on our September 30, 2019 and December 31, 2018 Consolidated Balance Sheets.
As of September 30, 2019 and December 31, 2018, we had EUR 5,036 (approximately US $5,500 at September 30, 2019) posted as cash collateral for LOCs related to the Spanish tax audits, which was recorded in Continuing Operations and classified as Restricted cash on our September 30, 2019 and December 31, 2018 Consolidated Balance 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, 2019 and December 31, 2018, the total face amount of these surety bonds was $23,036 and $22,204, respectively. These bonds are fully collateralized with cash, which was classified as Restricted cash on our September 30, 2019 and December 31, 2018 Consolidated Balance 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 a five-year term. The Company believes that this matter will not have a material impact on our Consolidated Financial Statements.
Note 12. Financing Receivables
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 |

We do not purchase financing receivables in the ordinary course of our business. We may sell certain receivables that are significantly past due. No material amounts of financing receivables were sold during the periods reported herein.
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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 |

The following is a rollforward of the Allowance for doubtful accounts related to financing receivables for the nine months ended September 30, 2019 and 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 | )

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.
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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, 2019 and 2018 were as follows:

| 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, 2019, whereas the following table represents accounts modified as a TDR between January 1, 2018 and September 30, 2019 that subsequently defaulted during the nine months ended September 30, 2019:

| Number of Financing Receivable Accounts |  | Balance at Default
Total | 183 |  |  | $ | 415 |

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

| Number of Financing Receivable Accounts |  | Balance at Default
Total | 128 |  |  | $ | 455 |

Note 13. 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 |

The negative stock options expense for the nine months ended September 30, 2018 relates to the correction of an immaterial error.
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Note 14. Stockholders' Equity
The components of net changes in stockholders' equity 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 |

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| 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 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.
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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 |

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| 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 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 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 | )

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 no 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 no shares of Class A common stock were sold by the Company.
Note 15. 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.
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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.
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 |

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 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 matched the corresponding principal of the 2024 Term Loan borrowings of which these swaps were effectively hedging the interest payments. As such, the notional values amortized annually based on the terms of the agreements to match the principal borrowings as they were repaid. These swaps effectively 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 swaps 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.
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Net Investment Hedge - Cross Currency Swaps
In December 2017, Laureate entered into two 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 December 22, 2017 and 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 our consolidated statement of cash flows. The terms of the swaps 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 5.63% and receive 8.25% on EUR 50,000 and USD $59,210, respectively, on the first swap and pay 5.6675% and receive 8.25% on EUR 50,000 and USD $59,360, respectively, on the second swap. The swaps were determined to be 100% effective; therefore, the amount of gain or loss recognized in income on the ineffective portion of 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 the hedged investee. As of December 31, 2018, these swaps had an estimated fair value of $3,259, which was recorded in Derivative Instruments as a long-term asset.
The table below shows the total recorded unrealized (loss) gain in Comprehensive income for the derivatives designated as hedging instruments. The impact of these derivative instruments on Comprehensive income, Interest expense and AOCI were as follows:
For the three 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 | $ | — |  |  | $ | (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 | )

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Derivatives Not Designated as Hedging Instruments
MXN to USD Foreign Currency Swaps
In September 2019, Laureate entered into three MXN to USD swap agreements with a combined notional amount of MXN 453,146. During the fourth quarter of 2019, Laureate will deliver the notional amount and receive USD $23,000 at a rate of exchange of 0.0508. As of September 30, 2019, these swaps had an estimated value of $295 which was recorded in Prepaid expenses and other current assets. These swaps were not designated as hedges for accounting purposes.
AUD to USD Foreign Currency Swaps
In September 2019, Laureate entered into two AUD to USD swap agreements with a combined notional amount of AUD 11,000. During the 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 $11 which 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 two 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 of $4,021, which was recorded in Derivative instruments as a 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 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 seven 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 cross currency and interest rate swap agreements with an aggregate notional amount of approximately $31,000, and convert CLP-denominated, floating-rate debt to fixed-rate UF-denominated debt. The UF is a Chilean inflation-adjusted unit of account. One of the swaps was scheduled to mature on December 1, 2024, and the remaining three 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 four 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 December 31, 2018, these swaps had an estimated fair value of $6,656 which was recorded in Derivative instruments as a long-term liability.
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EUR to USD Foreign Currency Swaps - Cyprus and Italy
As disclosed in the 2018 Form 10-K, in December 2017, the Company entered into a total of six EUR to USD forward exchange swap agreements in connection with the sale of its institutions in Cyprus and Italy. The purpose of the swaps was to mitigate the risk of foreign currency exposure on the sale proceeds. The swaps had an aggregate notional amount of 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 sale of discontinued operations and net investment hedge on the consolidated statement of cash flows for the nine months ended September 30, 2018. The swaps were not designated as 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 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 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 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 reclassified into equity in April 2018.
Components of the reported Gain on derivatives not designated as hedging instruments in the Consolidated Statements of Operations were as follows:

| For the three months ended 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 |

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, 2019 and December 31, 2018, the estimated fair values of derivatives in a gain position were $295 and $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, 2019, one institution was rated A1 and one institution as rated A2 by the global rating agency of Moody's Investors Service. These financial institutions accounted for all of Laureate's derivative credit risk exposure.
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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, 2019 and December 31, 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 $11 as of September 30, 2019 and $10,677 as of December 31, 2018.
Note 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 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, 2019 and 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 at various statutory tax rates or which are tax-exempt entities, and other operations that are loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss.
Laureate records interest and penalties related to uncertain tax 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 $29,420 of accrued interest and penalties as of September 30, 2019. During the nine months ended September 30, 2019, Laureate derecognized $8,482 of previously accrued interest and penalties. Approximately $24,882 of unrecognized tax benefits, if recognized, will affect the effective income tax rate. It is reasonably possible that Laureate’s unrecognized tax benefits may decrease within the next 12 months by up to approximately $13,449 as a result of the lapse of statutes of limitations and as a result of the final settlement and resolution of outstanding tax matters in various jurisdictions.
Note 17. Earnings (Loss) Per Share
We have two classes of common stock, Class A common stock and Class B common stock. Other than voting rights, the Class B common stock has the same rights as the Class A common stock and therefore both are treated as the same class of stock for purposes of the earnings per share calculation. Laureate computes basic earnings per share (EPS) by dividing income available to common shareholders by the weighted average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that would occur if share-based compensation awards, contingently issuable shares, or convertible securities were exercised or converted into common stock. To calculate the diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options, restricted stock, restricted stock units, and contingently issuable shares determined using the treasury stock method, and convertible securities using the if-converted method.
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The following tables summarize the computations of basic and diluted earnings (loss) per share:

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 | )

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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 following table summarizes the number of stock options, 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 |

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Note 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. In addition, our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations. There have been no material changes to the laws and regulations affecting our higher education institutions that are described in our 2018 Form 10-K.
Note 19. 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 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, 2019 were as follows:

| Total |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Derivative instruments | $ | 295 |  |  | $ | — |  |  | $ | — |  |  | $ | 295 |
Liabilities |  |  |  |  |  |  |
Derivative instruments | $ | 11 |  |  | $ | — |  |  | $ | — |  |  | $ | 11 |

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Laureate’s financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2018 were as follows:

| Total |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Derivative instruments | $ | 3,259 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,259 |
Liabilities |  |  |  |  |  |  |
Derivative instruments | $ | 10,677 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,677 |

The changes in our Level 3 Derivative instruments measured at fair value on a recurring basis for the nine months ended September 30, 2019 were as follows:

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 |

The following table presents quantitative information regarding the significant unobservable inputs and valuation techniques utilized in the fair value measurements of the Company's assets/(liabilities) classified as Level 3 as of September 30, 2019:

| 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%

Note 20. Supplemental Cash Flow Information
Reconciliation of Cash and cash equivalents and Restricted cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets, as well as the September 30, 2018 balance. The September 30, 2019 and September 30, 2018 balances sum to the amounts shown in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018:

|  | 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 |

Restricted cash includes cash equivalents held to collateralize standby letters of credit in favor of the DOE. In addition, Laureate may at times hold a United States deposit for a letter of credit in lieu of a surety bond, or otherwise have cash that is not immediately available for use in current operations. See also Note 11, Commitments and Contingencies.
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Note 21. Subsequent Events
Sale of Universidad Interamericana de Panamá (UIP)
In early October 2019, the Company closed on the previously announced sale of UIP, in addition to real estate which serves as the campus of UIP, to Universal Knowledge Systems, Inc. and Global Education Services, Inc. (the UIP Buyers). Pursuant to the sale and purchase agreement (the UIP Agreement), the UIP Buyers purchased from the Universidad U Latina, SRL and Education Holding Costa Rica EHCR, SRL (the UIP Sellers) 100% of the ownership interests of UIP, a higher education institution in Panama. Excelencia y Superacion S.A. (EXSUSA), an affiliate of the UIP Buyers, was also party to the UIP Agreement as a guarantor of the UIP Sellers’ obligations under the UIP Agreement. In addition, Desarrollos Urbanos Educativos S. de R.L. (DUE), an indirect wholly owned subsidiary of the Company, entered into and closed a real estate purchase agreement (the DUE Real Estate Purchase Agreement) with EXSUSA, pursuant to which EXSUSA or its designees purchased the campus real estate. The total enterprise value under the UIP Agreement and the DUE Real Estate Purchase Agreement was approximately $86,750, and the net proceeds received were approximately $80,000.
Amendment of Senior Secured Credit Facility
On October 7, 2019, the Company entered into a Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement). Among other things, the Third A&R Credit Agreement increases the borrowing capacity of our revolving credit facility from $385,000 to $410,000 and extends the maturity date from April 26, 2022 to October 7, 2024.
Under the Third A&R Credit Agreement, the revolving credit facility bears interest at a per annum interest rate, at the option of the Company, at either the LIBO rate or the ABR rate, as defined in the agreement, plus an applicable margin of 2.50% per annum, 2.25% per annum, 2.00% per annum or 1.75% per annum for LIBOR loans, and 1.50% per annum, 1.25% per annum, 1.00% per annum or 0.75% per annum for ABR loans, in each case, based on the Company’s consolidated total debt to consolidated EBITDA ratio, as defined in the agreement. The financial covenant described in Note 9, Debt, remains unchanged under the Third A&R Credit Agreement. Specifically, the Third A&R Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its consolidated senior secured debt to consolidated EBITDA ratio to exceed 3.50 x as of the last day of each quarter commencing with the quarter ending December 31, 2019; provided, that if (i) the Company’s consolidated total debt to consolidated EBITDA ratio is not greater than 4.75 x as of such date and (ii) less than 25% of the revolving credit facility is utilized, then such financial covenant shall not apply.
Stock Repurchase Program
On October 14, 2019, the Company's board of directors approved the increase of its existing authorization to repurchase shares of the Company's Class A common stock by $150,000 for a total authorization (including the previously authorized repurchases) of up to $300,000 of the Company's Class A common stock. The Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act. Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company's board of directors will review the stock repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. As disclosed in Note 14, Stockholders' Equity, in early October 2019, the Company's stock repurchases reached the previously authorized limit of $150,000.
Sale of UniNorte
On November 1, 2019, the Company closed on the previously announced sale of its institution UniNorte, a traditional higher education institution in Manaus, Brazil, to Ser Educational. The Company received proceeds of approximately $46,000, prior to the payment of estimated closing costs and fees.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this Form 10-Q) contains ‘‘forward-looking statements’’ within the meaning of the federal securities laws, which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as ‘‘believes,’’ ‘‘expects,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates’’ or ‘‘anticipates’’ or similar expressions that concern our strategy, plans or intentions. All statements we make relating to estimated and projected earnings, costs, expenditures, cash flows, growth rates and financial results, and all statements we make relating to our planned divestitures, the expected proceeds generated therefrom and the expected reduction in revenue resulting therefrom, 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, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, including, without limitation, in conjunction with the forward-looking statements included in this Form 10-Q, are disclosed in ‘‘Item 1—Business,’’ and ‘‘Item 1A—Risk Factors’’ of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the 2018 Form 10-K). Some of the factors that we believe could affect our results include:

• | the risks associated with conducting our global operations, including complex business, foreign currency, political, legal, regulatory, tax and economic risks;

• | our ability to effectively manage the growth of our business, implement a common operating model and platform, and increase our operating leverage;

• | the development and expansion of our global education network and programs and the effect of new technology applications in the educational services industry;

• | our ability to successfully complete planned divestitures and make strategic acquisitions, and to successfully integrate and operate acquired businesses;

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

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

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

• | possible increased competition from other educational service providers;

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

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

• | our ability to attract and retain key personnel;

• | the fluctuations in revenues due to seasonality;

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

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

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

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

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Form 10-Q may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
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Introduction
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (the MD&A) is provided to assist readers of the financial statements in understanding the results of operations, financial condition and cash flows of Laureate Education, Inc. This MD&A should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. 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 Standards.

Overview
Our Business
We are the largest international network of degree-granting higher education institutions, primarily focused in Latin America, with 895,000 students enrolled at our 30 institutions in 9 countries on more than 150 campuses included in our continuing operations as of September 30, 2019, which we collectively refer to as the Laureate International Universities network. 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 students to prosper and thrive in the dynamic and evolving knowledge economy.
As of September 30, 2019, our international network of 30 institutions comprised 29 institutions we owned or controlled, and one addition al institution that we managed through a joint venture arrangement. We have six operating segments as described below. We group our institutions by geography in: 1) Brazil; 2) Mexico; 3) Andean; 4) Central America & U.S. Campuses; and 5) Rest of World for reporting purposes. Our sixth segment, Online & Partnerships, includes fully online institutions that operate globally.
Discontinued Operations
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 criteria for a reportable segment under ASC 280, ‘‘Segment Reporting,’’ and, therefore, it is excluded from the segments information for all periods presented. In addition, the portions of the Andean and Rest of World reportable segments that are included in Discontinued Operations have also been excluded from the segment information for all periods presented. Unless indicated otherwise, the information in the MD&A relates to continuing operations.
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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 Panama, as well as Kendall College, LLC (Kendall), the University of St. Augustine for Health Sciences, LLC (St. Augustine) in the United States and UniNorte, an institution in the Brazil segment that is included in continuing operations as it is not part of the strategic shift. We have not yet completed the divestitures of our subsidiaries in Costa Rica, Honduras, and Malaysia, as well as NewSchool of Architecture and Design, LLC (NSAD), a small campus-based institution in the 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 this 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. The campus-based segments include Brazil, Mexico, Andean, Central America & U.S. Campuses and 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 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 segment includes institutions in Chile and Peru. In Chile, private universities enroll approximately 80% of post-secondary students and there are government-sponsored student financing programs. In Peru, the public sector plays a significant role, but private universities are increasingly providing the capacity to meet growing demand.

• | The Central America & 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 Rest of World segment includes campus-based institutions in Asia Pacific with operations in Australia, Malaysia and New Zealand. Additionally, the Rest of World segment manages one institution in China through a joint venture arrangement. The institutions in Malaysia are included in Discontinued Operations.

• | The Online & Partnerships segment includes fully online institutions that offer 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.

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Corporate is a non-operating business unit whose purpose is to support operations. Its departments are responsible for establishing operational policies and internal control standards, implementing strategic initiatives, and monitoring compliance with policies and controls throughout our operations. Our Corporate segment is an internal source of capital and provides financial, human resource, information technology, insurance, legal and tax compliance services. The Corporate segment also contains the eliminations of intersegment revenues and expenses.
The following information for our reportable segments in continuing operations is presented as of September 30, 2019:

| 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 amounts related to Corporate, net of elimination of intersegment revenues, which total $2.1 million, are not separately presented.
(2) We no longer accept new enrollments at the University of Liverpool and the University of Roehampton.
Challenges
Our international operations are subject to complex business, economic, legal, regulatory, political, tax and foreign currency risks, which may be difficult to adequately address. The majority of our operations are outside the United States. As a result, we face risks that are inherent in international operations, including: fluctuations in exchange rates, possible currency devaluations, inflation and hyper-inflation; price controls and foreign currency exchange restrictions; potential economic and political instability in the countries in which we operate; expropriation of assets by local governments; key political elections and changes in government policies; multiple and possibly overlapping and conflicting tax laws; and compliance with a wide variety of foreign laws. 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 grow our continuing operations organically by: 1) adding new programs and course offerings; 2) expanding target student demographics; and 3) increasing capacity at existing and new campus locations. Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries.
Regulatory Environment and Other Matters
Our business is subject to 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. 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 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
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.
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
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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, the Minnesota Office of Higher Education (MOHE) sent to Walden University an information request regarding its doctoral programs and complaints filed by doctoral students as part of 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’’ period in which the majority of the enrollment occurs. Most institutions also have one or more smaller ‘‘Secondary Intake’’ periods. The first calendar quarter generally coincides with the Primary Intakes for our institutions in the Brazil, Andean and Rest of World segments. The third calendar quarter generally coincides with the Primary Intakes for our institutions in the Mexico and Online & Partnerships segments.
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The following chart shows our enrollment 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
The majority of our revenue is derived from tuition and educational services. The amount of tuition generated in a given period depends on the price per credit hour and the total credit hours or price per program taken by the enrolled student population. The price per credit hour varies by program, by market and by degree level. Additionally, varying levels of discounts and scholarships are offered depending on market-specific dynamics and individual achievements of our students. Revenues are recognized net of scholarships, other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. In addition to tuition revenues, we generate other revenues from student fees, dormitory/residency fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. The main drivers of changes in revenues between periods are student enrollment and price.
Direct Costs
Our direct costs include labor and operating costs associated with the delivery of services to our students, including the cost of wages, payroll taxes and benefits, depreciation and amortization, rent, utilities, bad debt expenses and marketing and promotional costs to grow future enrollments. In general, a significant portion of our direct costs tend to be variable in nature and trend with enrollment, and management continues to monitor and improve the efficiency of instructional delivery. Conversely, as campuses expand, direct costs may grow faster than enrollment growth as infrastructure investments are made in anticipation of future enrollment growth.
General and Administrative Expenses
Our general and administrative expenses primarily consist of costs associated with corporate departments, including executive management, finance, legal, business development and other departments that do not provide direct operational services.
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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 impact of acquisitions’’ for the first 12 months of our ownership. We have made only small acquisitions in 2019 and 2018 that had essentially no impact on the comparability of the periods presented.
Dispositions
Any dispositions of our continuing operations affect the comparability of our financial statements from period to period. Dispositions completed during one period impact comparability to a prior period in which we owned the divested entity. Therefore, changes related to such entities are considered ‘‘incremental impact of dispositions’’ for the first 12 months subsequent to the disposition. As discussed above, all of the divestitures that are part of the strategic shift announced in August 2018 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, Euro, Mexican Peso, New Zealand Dollar, and Peruvian Nuevo Sol. The principal foreign exchange exposure is the risk related to the translation of revenues and expenses incurred in each country from the local currency into USD. See ‘‘Item 1A—Risk Factors—Risks Relating to Our Continuing Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates’’ in our 2018 Form 10-K. In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year.
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 subsequent quarters 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. Also, discrete items can arise in the course of our operations that can further impact the Company’s effective tax rate for the period. Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities, our tax-exempt entities and our loss-making entities for which it is not more likely than not that a tax benefit will be realized on the loss.
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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.
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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, 2019 and 2018
Nine Months Ended September 30, 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 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 recorded a loss on debt extinguishment of $15.6 million related to the write off of a pro-rata portion of the unamortized deferred financing costs associated with the 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, 2018
On February 1, 2018, we amended our Senior Secured Credit Facility to reduce the interest rate on our 2024 Term Loan. In connection with this transaction, we also repaid $350.0 million of the principal balance of the 2024 Term Loan. As a result of this transaction, the Company recorded a $7.5 million loss on debt extinguishment related to the pro-rata write-off of the term loan's remaining deferred financing costs. This loss is included in other non-operating (expense) income in the year-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.
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Comparison of Consolidated Results for the Three Months Ended September 30, 2019 and 2018

|  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
(in millions) | 2019 |  | 2018 |  | 2019 vs. 2018
Revenues | $ | 773.7 |  |  | $ | 778.3 |  |  | (1 | )%
Direct costs | 655.6 |  |  | 665.5 |  |  | 1 | %
General and administrative expenses | 72.3 |  |  | 73.7 |  |  | 2 | %
Loss on impairment of assets | — |  |  | 10.0 |  |  | 100 | %
Operating income | 45.7 |  |  | 29.0 |  |  | 58 | %
Interest expense, net of interest income | (37.1 | ) |  | (54.8 | ) |  | 32 | %
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 | (22.0 | ) |  | 3.7 |  |  | 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 | 1.6 |  |  | 1.9 |  |  | 16 | %
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 of Significant Items Affecting the Consolidated Results.’’
Comparison of Consolidated Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018
Revenues decreased by $4.6 million to $773.7 million for the three months ended September 30, 2019 (the 2019 fiscal quarter) from $778.3 million for the three months ended September 30, 2018 (the 2018 fiscal quarter). The effect of a net change in foreign currency exchange rates decreased revenues by $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’’), pricing and timing decreased revenues by $4.9 million compared to the 2018 fiscal quarter. These decreases in revenues were partially offset by the effects of higher average total organic enrollment at a majority of our institutions, which increased revenues by $18.8 million compared to the 2018 fiscal quarter. Other Corporate and Eliminations changes accounted for an increase in revenues of $2.2 million.
Direct costs and general and administrative expenses combined decreased by $11.3 million to $727.9 million for the 2019 fiscal quarter from $739.2 million for the 2018 fiscal quarter. This decrease was due to the effect of a net change in foreign currency exchange rates, which decreased costs by $15.5 million for the 2019 fiscal quarter compared to the 2018 fiscal 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, which resulted in a year-over-year increase in direct costs of $1.4 million.
Operating income increased by $16.7 million to $45.7 million for the 2019 fiscal quarter from $29.0 million for the 2018 fiscal quarter, primarily as a result of increased operating income in our Andean and Online & Partnerships segments.
Interest expense, net of interest income decreased by $17.7 million to $37.1 million for the 2019 fiscal quarter from $54.8 million for the 2018 fiscal quarter. The decrease in interest expense was primarily attributable to lower average debt balances.
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Other non-operating expense decreased by $3.0 million to $15.2 million for the 2019 fiscal quarter from $18.2 million for the 2018 fiscal quarter. This decrease was primarily attributable to a decrease in loss on foreign currency exchange of $11.6 million and a gain on derivative instruments in the 2019 fiscal quarter compared to a loss in the 2018 fiscal quarter, for a change of $0.4 million. These decreases in other non-operating income 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 2019 fiscal quarter. In addition, during the 2019 fiscal quarter, we recognized a loss on disposal of 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 $25.7 million to an expense of $(22.0) million for the 2019 fiscal quarter from a benefit of $3.7 million for the 2018 fiscal quarter. This increase in income tax expense was primarily due to changes in the mix of pre-tax book income attributable to taxable and non-taxable entities in various taxing 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, 2019 and 2018

|  |  |  |  | % 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 of Significant Items Affecting the Consolidated Results.’’
Comparison of Consolidated Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018
Revenues decreased by $30.6 million to $2,367.2 million for the nine months ended September 30, 2019 (the 2019 fiscal period) from $2,397.8 million for the nine months ended September 30, 2018 (the 2018 fiscal period). This 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
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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 partially offset by a higher average total organic enrollment at a majority of our institutions, which increased revenues by $64.0 million, the effect of product mix, pricing and timing, which increased revenues by $3.5 million, and other Corporate and Eliminations changes, which accounted for an increase in revenues of $7.3 million.
Direct costs and general and administrative expenses combined decreased by $42.5 million to $2,195.9 million for the 2019 fiscal period from $2,238.4 million for the 2018 fiscal period. This decrease in direct costs primarily resulted from the effect of a net change in foreign currency exchange rates, which decreased costs by $94.4 million, and other Corporate and Eliminations expenses, which accounted for a decrease in costs of $2.4 million in the 2019 fiscal period. Partially offsetting these direct costs decreases were the effect of overall higher organic enrollments, which increased costs by $50.7 million for the 2019 fiscal period compared to the 2018 fiscal period, in addition to changes in acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets, which resulted in a year-over-year increase in direct costs of $3.6 million.
Operating income increased by $21.5 million to $170.9 million for the 2019 fiscal period from $149.4 million for the 2018 fiscal period. This increase primarily results from increased operating income in our Andean and Online & Partnerships segments, combined with decreased operating loss in our Rest of World segment. These changes were partially offset by operating loss in our Brazil and Mexico segments in the 2019 fiscal period compared to operating income in the 2018 fiscal period.
Interest expense, net of interest income decreased by $45.5 million to $126.9 million for the 2019 fiscal period from $172.4 million for the 2018 fiscal period. The decrease in interest expense was primarily attributable to lower average debt balances.
Other non-operating (expense) income changed by $72.8 million, to an expense of $(21.3) million for the 2019 fiscal period from income of $51.5 million for the 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 due to changes in the mix of pre-tax book income attributable to taxable and non-taxable entities in various taxing jurisdictions 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 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 income (loss) from continuing operations, before equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on sale or disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, (gain) loss on derivatives, loss on debt extinguishment, interest expense and interest income, plus depreciation and amortization, share-based compensation expense, loss on impairment of assets and expenses related to implementation of our Excellence-in-Process (EiP) initiative. When we review Adjusted EBITDA on a segment basis, we exclude inter-segment revenues and expenses that eliminate in consolidation. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.
Adjusted EBITDA is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, Adjusted EBITDA is a key financial measure used by the compensation committee
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of our board of directors and our Chief Executive Officer in connection with the payment of incentive compensation to our executive officers and other members of our management team. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
The following table presents Adjusted EBITDA and reconciles loss from continuing operations to Adjusted EBITDA for the three months ended September 30, 2019 and 2018:

|  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
(in millions) | 2019 |  | 2018 |  | 2019 vs. 2018
Loss from continuing operations | $ | (28.5 | ) |  | $ | (40.4 | ) |  | 29 | %
Plus: |  |  |  |  |
Income tax expense (benefit) | 22.0 |  |  | (3.7 | ) |  | nm |
Loss from continuing operations before income taxes | (6.6 | ) |  | (44.1 | ) |  | 85 | %
Plus: |  |  |  |  |
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 | 0.2 |  |  | — |  |  | nm |
Interest expense | 40.3 |  |  | 58.3 |  |  | 31 | %
Interest income | (3.2 | ) |  | (3.5 | ) |  | (9 | )%
Operating income | 45.7 |  |  | 29.0 |  |  | 58 | %
Plus: |  |  |  |  |
Depreciation and amortization | 48.6 |  |  | 52.8 |  |  | 8 | %
EBITDA | 94.3 |  |  | 81.8 |  |  | 15 | %
Plus: |  |  |  |  |
Share-based compensation expense (a) | 1.5 |  |  | 6.4 |  |  | 77 | %
Loss on impairment of assets (b) | — |  |  | 10.0 |  |  | 100 | %
EiP implementation expenses (c) | 38.0 |  |  | 25.0 |  |  | (52 | )%
Adjusted EBITDA | $ | 133.8 |  |  | $ | 123.2 |  |  | 9 | %

nm - percentage changes not meaningful
(a) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC 718, ‘‘Stock Compensation.’’
(b) Represents non-cash charges related to impairments of long-lived assets. For further details, see ‘‘Discussion of Significant Items Affecting the Consolidated Results for the Nine Months Ended September 30, 2018.’’
(c) EiP implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure 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.
Comparison of Depreciation and Amortization, Share-based Compensation and EiP Implementation Expenses for the Three Months Ended September 30, 2019 and 2018
Depreciation and amortization decreased by $4.2 million to $48.6 million for the 2019 fiscal quarter from $52.8 million for the 2018 fiscal quarter. The effects of foreign currency exchange decreased depreciation and amortization expense by $1.1 million for the 2019 fiscal quarter. In addition, the cessation of depreciation expense at UniNorte following its classification as held for sale during the third quarter of 2018 decreased depreciation and amortization expense by $0.7 million for the 2019 fiscal quarter. Other items decreased depreciation and amortization by $2.4 million.
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Share-based compensation expense decreased by $4.9 million to $1.5 million for the 2019 fiscal quarter from $6.4 million for the 2018 fiscal quarter. This decrease was primarily due to the forfeiture of stock awards by a former executive in connection with his separation from the Company.
EiP implementation expenses increased by $13.0 million to $38.0 million for the 2019 fiscal quarter from $25.0 million for the 2018 fiscal quarter. The year-over-year increase in EiP expenses is primarily attributable to the inclusion in EiP of expenses associated with an enterprise-wide program aimed at revenue growth.
The following table presents Adjusted EBITDA and reconciles loss from continuing operations to Adjusted EBITDA for the nine months ended September 30, 2019 and 2018:

|  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
(in millions) | 2019 |  | 2018 |  | 2019 vs. 2018
Loss from continuing operations | $ | (37.8 | ) |  | $ | (36.6 | ) |  | (3 | )%
Plus: |  |  |  |  |
Equity in net income of affiliates, net of tax | (0.2 | ) |  | — |  |  | nm |
Income tax expense | 60.7 |  |  | 65.1 |  |  | 7 | %
Income from continuing operations before income taxes and equity in net income of affiliates | 22.7 |  |  | 28.5 |  |  | (20 | )%
Plus: |  |  |  |  |
Loss on disposal of subsidiaries, net | 1.5 |  |  | — |  |  | nm |
Foreign currency exchange loss, net | 10.6 |  |  | 44.0 |  |  | 76 | %
Other income, net | (9.1 | ) |  | (10.8 | ) |  | (16 | )%
Gain on derivatives | (8.1 | ) |  | (92.1 | ) |  | (91 | )%
Loss on debt extinguishment | 26.4 |  |  | 7.5 |  |  | nm |
Interest expense | 136.4 |  |  | 181.7 |  |  | 25 | %
Interest income | (9.6 | ) |  | (9.4 | ) |  | 2 | %
Operating income | 170.9 |  |  | 149.4 |  |  | 14 | %
Plus: |  |  |  |  |
Depreciation and amortization | 145.1 |  |  | 161.2 |  |  | 10 | %
EBITDA | 316.0 |  |  | 310.6 |  |  | 2 | %
Plus: |  |  |  |  |
Share-based compensation expense (a) | 9.2 |  |  | 9.6 |  |  | 4 | %
Loss on impairment of assets (b) | 0.5 |  |  | 10.0 |  |  | 95 | %
EiP implementation expenses (c) | 77.3 |  |  | 60.3 |  |  | (28 | )%
Adjusted EBITDA | $ | 403.0 |  |  | $ | 390.5 |  |  | 3 | %

nm - percentage changes not meaningful
(a) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC 718, ‘‘Stock Compensation.’’
(b) Represents non-cash charges related to impairments of long-lived assets. For further details, see ‘‘Discussion of Significant Items Affecting the Consolidated Results for the Nine Months Ended September 30, 2018.’’
(c) EiP implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs) around the world, as well as improvements to the Company's system of internal controls over financial reporting. The EiP initiative also includes other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure 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.
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Comparison of Depreciation and Amortization, Share-based Compensation and EiP Implementation Expenses for the Nine Months Ended September 30, 2019 and 2018
Depreciation and amortization decreased by $16.1 million to $145.1 million for the 2019 fiscal period from $161.2 million for the 2018 fiscal period. The effects of foreign currency exchange decreased depreciation and amortization expense by $6.3 million for the 2019 fiscal period. In addition, the cessation of depreciation expense at UniNorte following its classification as held for sale in the third quarter of 2018 decreased depreciation and amortization expense by $2.6 million for the 2019 fiscal period. Other items decreased depreciation and amortization by $7.2 million.
Share-based compensation expense decreased by $0.4 million to $9.2 million for the 2019 fiscal period from $9.6 million for the 2018 fiscal period. This decrease is attributable to the forfeiture of stock options by a former executive in connection with his separation from the Company during the third quarter of 2019, partially offset by the effect of a correction of an immaterial error in the first quarter of 2018, which reduced share-based compensation expense for the 2018 fiscal period.
EiP implementation expenses increased by $17.0 million to $77.3 million for the 2019 fiscal period from $60.3 million for the 2018 fiscal period. The year-over-year increase in EiP expenses is primarily attributable to the inclusion in EiP of expenses associated with an enterprise-wide program aimed at revenue growth, in addition to higher costs for severance and retention bonuses related to our divestiture activity and severance related to streamlining our organizational structure.
Segment Results
We have five reportable segments: Brazil, Mexico, Andean, Rest of World and Online & Partnerships. As discussed in ‘‘Overview,’’ the entire Central America & U.S. Campuses segment is included in Discontinued Operations and therefore is excluded from segment results. For purposes of the following comparison of results discussion, ‘‘segment direct costs’’ represent direct costs by segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets, share-based compensation expense and our EiP implementation expenses have been excluded. Organic enrollment is based on average total enrollment for the period. For a further description of our segments, see ‘‘Overview.’’
The following tables, derived from our consolidated financial statements included elsewhere in this Form 10-Q, presents selected financial information of our segments:

(in millions) |  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
For the three months ended September 30, | 2019 |  | 2018 |  | 2019 vs. 2018
Revenues: |  |  |  |  |
Brazil | $ | 114.1 |  |  | $ | 121.1 |  |  | (6 | )%
Mexico | 145.8 |  |  | 148.3 |  |  | (2 | )%
Andean | 307.3 |  |  | 299.6 |  |  | 3 | %
Rest of World | 52.6 |  |  | 47.7 |  |  | 10 | %
Online & Partnerships | 155.5 |  |  | 165.2 |  |  | (6 | )%
Corporate | (1.5 | ) |  | (3.7 | ) |  | 59 | %
Consolidated Total Revenues | $ | 773.7 |  |  | $ | 778.3 |  |  | (1 | )%
Adjusted EBITDA: |  |  |  |  |
Brazil | $ | 3.1 |  |  | $ | 0.7 |  |  | nm |
Mexico | 23.1 |  |  | 23.7 |  |  | (3 | )%
Andean | 92.6 |  |  | 90.6 |  |  | 2 | %
Rest of World | 11.5 |  |  | 8.0 |  |  | 44 | %
Online & Partnerships | 44.3 |  |  | 45.7 |  |  | (3 | )%
Corporate | (40.8 | ) |  | (45.6 | ) |  | 11 | %
Consolidated Total Adjusted EBITDA | $ | 133.8 |  |  | $ | 123.2 |  |  | 9 | %

nm - percentage changes not meaningful
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(in millions) |  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
For the nine months ended September 30, | 2019 |  | 2018 |  | 2019 vs. 2018
Revenues: |  |  |  |  |
Brazil | $ | 421.1 |  |  | $ | 469.5 |  |  | (10 | )%
Mexico | 464.7 |  |  | 463.9 |  |  | — | %
Andean | 869.2 |  |  | 844.2 |  |  | 3 | %
Rest of World | 137.2 |  |  | 131.4 |  |  | 4 | %
Online & Partnerships | 477.0 |  |  | 498.2 |  |  | (4 | )%
Corporate | (2.1 | ) |  | (9.4 | ) |  | 78 | %
Consolidated Total Revenues | $ | 2,367.2 |  |  | $ | 2,397.8 |  |  | (1 | )%
Adjusted EBITDA: |  |  |  |  |
Brazil | $ | 31.3 |  |  | $ | 52.6 |  |  | (40 | )%
Mexico | 80.5 |  |  | 82.0 |  |  | (2 | )%
Andean | 246.1 |  |  | 235.4 |  |  | 5 | %
Rest of World | 20.2 |  |  | 12.0 |  |  | 68 | %
Online & Partnerships | 142.8 |  |  | 136.1 |  |  | 5 | %
Corporate | (117.9 | ) |  | (127.6 | ) |  | 8 | %
Consolidated Total Adjusted EBITDA | $ | 403.0 |  |  | $ | 390.5 |  |  | 3 | %

Brazil
Financial Overview
*Percentage change considered not meaningful and, therefore, not shown
63

Comparison of Brazil Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 121.1 |  |  | $ | 120.4 |  |  | $ | 0.7 |
Organic enrollment (1) | 1.2 |  |  |  |  |
Product mix, pricing and timing (1) | (7.3 | ) |  |  |  |
Organic constant currency | (6.1 | ) |  | (10.4 | ) |  | 4.3 |
Foreign exchange | (0.9 | ) |  | — |  |  | (0.9 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other (2) | — |  |  | 1.0 |  |  | (1.0 | )
September 30, 2019 | $ | 114.1 |  |  | $ | 111.0 |  |  | $ | 3.1 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.
Revenues decreased by $7.0 million, a 6% decrease from the 2018 fiscal quarter.

• | Product mix, pricing and timing decreased revenues due to an increase in discounts and scholarships as a percentage of revenue, combined with a reduction in the number of students participating in the Brazilian government student loan program (FIES).

• | Organic enrollment remained relatively flat compared to the 2018 fiscal quarter, increasing revenues by $1.2 million.

• | Revenues represented 15% of our consolidated total revenues for the 2019 fiscal quarter compared to 16% for the 2018 fiscal quarter.

Adjusted EBITDA increased by $2.4 million compared to the 2018 fiscal quarter.
Comparison of Brazil Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 469.5 |  |  | $ | 416.9 |  |  | $ | 52.6 |
Organic enrollment (1) | 15.8 |  |  |  |  |
Product mix, pricing and timing (1) | (26.1 | ) |  |  |  |
Organic constant currency | (10.3 | ) |  | 6.7 |  |  | (17.0 | )
Foreign exchange | (38.1 | ) |  | (35.9 | ) |  | (2.2 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other (2) | — |  |  | 2.1 |  |  | (2.1 | )
September 30, 2019 | $ | 421.1 |  |  | $ | 389.8 |  |  | $ | 31.3 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.
64

Revenues decreased by $48.4 million, a 10% decrease from the 2018 fiscal period.

• | Product mix, pricing and timing decreased revenues due to an increase in discounts and scholarships as a percentage of revenue, combined with a reduction in the number of students participating in the Brazilian government student loan program (FIES).

• | Organic enrollment increased during the 2019 fiscal period by 3%, increasing revenues by $15.8 million. The increase in enrollments for the 2019 fiscal period is attributable to growth in distance learning, which has a lower average revenue per student than our campus-based programs.

• | Revenues represented 18% of our consolidated total revenues for the 2019 fiscal period compared to 20% for the 2018 fiscal period.

Adjusted EBITDA decreased by $21.3 million, a 40% decrease from the 2018 fiscal period, primarily due to the impact of increased discounts and scholarships on revenues.
Mexico
Financial Overview
Comparison of Mexico Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 148.3 |  |  | $ | 124.6 |  |  | $ | 23.7 |
Organic enrollment (1) | (2.7 | ) |  |  |  |
Product mix, pricing and timing (1) | 3.5 |  |  |  |  |
Organic constant currency | 0.8 |  |  | 0.3 |  |  | 0.5 |
Foreign exchange | (3.3 | ) |  | (2.6 | ) |  | (0.7 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other (2) | — |  |  | 0.4 |  |  | (0.4 | )
September 30, 2019 | $ | 145.8 |  |  | $ | 122.7 |  |  | $ | 23.1 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.
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Revenues decreased by $2.5 million, a 2% decrease from the 2018 fiscal quarter.

• | Organic enrollment decreased during the fiscal quarter 1%, decreasing revenues by $2.7 million.

• | Revenues represented 19% of our consolidated total revenues for both the 2019 and the 2018 fiscal quarters.

Adjusted EBITDA decreased by $0.6 million, a 3% decrease from the 2018 fiscal quarter.
Comparison of Mexico Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 463.9 |  |  | $ | 381.9 |  |  | $ | 82.0 |
Organic enrollment (1) | (11.8 | ) |  |  |  |
Product mix, pricing and timing (1) | 19.1 |  |  |  |  |
Organic constant currency | 7.3 |  |  | 5.4 |  |  | 1.9 |
Foreign exchange | (6.5 | ) |  | (4.6 | ) |  | (1.9 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other (2) | — |  |  | 1.5 |  |  | (1.5 | )
September 30, 2019 | $ | 464.7 |  |  | $ | 384.2 |  |  | $ | 80.5 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.
Revenues increased by $0.8 million from the 2018 fiscal period.

• | Revenues increase from product mix, pricing and timing was partially offset by a decrease in organic enrollment of 2% during the 2019 fiscal period, which decreased revenues by $11.8 million.

• | Revenues represented 19% of our consolidated total revenues for both the 2019 and 2018 fiscal periods.

Adjusted EBITDA decreased by $1.5 million, a 2% decrease from the 2018 fiscal period.
Andean
Financial Overview
66

Comparison of Andean Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 299.6 |  |  | $ | 209.0 |  |  | $ | 90.6 |
Organic enrollment (1) | 15.6 |  |  |  |  |
Product mix, pricing and timing (1) | 5.2 |  |  |  |  |
Organic constant currency | 20.8 |  |  | 14.9 |  |  | 5.9 |
Foreign exchange | (13.1 | ) |  | (9.2 | ) |  | (3.9 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 307.3 |  |  | $ | 214.7 |  |  | $ | 92.6 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues increased by $7.7 million, a 3% increase from the 2018 fiscal quarter.

• | Organic enrollment increased during the 2019 fiscal quarter by 6%, increasing revenues by $15.6 million.

• | Revenue represented 39% of our consolidated total revenues for the 2019 fiscal quarter compared to 38% for the 2018 fiscal quarter.

Adjusted EBITDA increased by $2.0 million, a 2% increase from the 2018 fiscal quarter.

• | Foreign exchange affected the results for the 2019 fiscal quarter, primarily due to the weakening of the Chilean Peso relative to the USD.

Comparison of Andean Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 844.2 |  |  | $ | 608.8 |  |  | $ | 235.4 |
Organic enrollment (1) | 48.9 |  |  |  |  |
Product mix, pricing and timing (1) | 26.0 |  |  |  |  |
Organic constant currency | 74.9 |  |  | 52.3 |  |  | 22.6 |
Foreign exchange | (49.9 | ) |  | (38.0 | ) |  | (11.9 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 869.2 |  |  | $ | 623.1 |  |  | $ | 246.1 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues increased by $25.0 million, a 3% increase from the 2018 fiscal period.

• | Organic enrollment increased during the 2019 fiscal period by 6%, increasing revenues by $48.9 million.

• | Revenue represented 37% of our consolidated total revenues for the 2019 fiscal period compared to 35% for the 2018 fiscal period.

Adjusted EBITDA increased by $10.7 million, a 5% increase from the 2018 fiscal period.

• | Foreign exchange affected the results for the 2019 fiscal period, primarily due to weakening of the Chilean Peso relative to the USD.

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Rest of World
Financial Overview
Comparison of Rest of World Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 47.7 |  |  | $ | 39.7 |  |  | $ | 8.0 |
Organic enrollment (1) | 6.2 |  |  |  |  |
Product mix, pricing and timing (1) | 2.1 |  |  |  |  |
Organic constant currency | 8.3 |  |  | 4.0 |  |  | 4.3 |
Foreign exchange | (3.4 | ) |  | (2.6 | ) |  | (0.8 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 52.6 |  |  | $ | 41.1 |  |  | $ | 11.5 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues increased by $4.9 million, a 10% increase from the 2018 fiscal quarter.

• | Organic enrollment increased during the 2019 fiscal quarter by 13%, increasing revenues by $6.2 million.

• | Revenues represented 7% of our consolidated total revenues for the 2019 fiscal quarter compared to 6% for the 2018 fiscal quarter.

Adjusted EBITDA increased by $3.5 million, a 44% increase from the 2018 fiscal quarter.

• | Foreign exchange affected the results for the 2019 fiscal quarter, primarily due to the weakening of the Australian Dollar relative to the USD.

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Comparison of Rest of World Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 131.4 |  |  | $ | 119.4 |  |  | $ | 12.0 |
Organic enrollment (1) | 14.0 |  |  |  |  |
Product mix, pricing and timing (1) | 2.7 |  |  |  |  |
Organic constant currency | 16.7 |  |  | 7.2 |  |  | 9.5 |
Foreign exchange | (10.9 | ) |  | (9.6 | ) |  | (1.3 | )
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 137.2 |  |  | $ | 117.0 |  |  | $ | 20.2 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues increased by $5.8 million, a 4% increase from the 2018 fiscal period.

• | Organic enrollment increased during the 2019 fiscal period by 11%, increasing revenues by $14.0 million.

• | Revenues represented 6% of our consolidated total revenues for the 2019 fiscal period compared to 5% for the 2018 fiscal period.

Adjusted EBITDA increased by $8.2 million, a 68% increase from the 2018 fiscal period.

• | Foreign exchange affected the results for the 2019 fiscal period, primarily due to the weakening of the Australian Dollar relative to the USD.

Online & Partnerships
Financial Overview
69

Comparison of Online & Partnerships Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 165.2 |  |  | $ | 119.5 |  |  | $ | 45.7 |
Organic enrollment (1) | (1.5 | ) |  |  |  |
Product mix, pricing and timing (1) | (8.2 | ) |  |  |  |
Organic constant currency | (9.7 | ) |  | (8.3 | ) |  | (1.4 | )
Foreign exchange | — |  |  | — |  |  | — |
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 155.5 |  |  | $ | 111.2 |  |  | $ | 44.3 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues decreased by $9.7 million, a 6% decrease from the 2018 fiscal quarter.

• | Organic enrollment decreased during the 2019 fiscal quarter by 3%, decreasing revenues by $1.5 million. This decrease was attributable to a decrease in organic enrollment at the University of Liverpool and the University of Roehampton as we no longer accept new enrollments at those institutions, partially offset by organic growth at Walden University.

• | A portion of the product mix, pricing and timing decrease was due to higher discounts and scholarships.

• | Revenues represented 20% of our consolidated total revenues for the 2019 fiscal quarter compared to 21% for the 2018 fiscal quarter.

Adjusted EBITDA decreased by $1.4 million, a 3% decrease compared to the 2018 fiscal quarter.
Comparison of Online & Partnerships Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018

(in millions) | Revenues |  | Direct Costs |  | Adjusted EBITDA
September 30, 2018 | $ | 498.2 |  |  | $ | 362.1 |  |  | $ | 136.1 |
Organic enrollment (1) | (2.9 | ) |  |  |  |
Product mix, pricing and timing (1) | (18.3 | ) |  |  |  |
Organic constant currency | (21.2 | ) |  | (27.9 | ) |  | 6.7 |
Foreign exchange | — |  |  | — |  |  | — |
Acquisitions | — |  |  | — |  |  | — |
Dispositions | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |
September 30, 2019 | $ | 477.0 |  |  | $ | 334.2 |  |  | $ | 142.8 |

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.
Revenues decreased by $21.2 million, a 4% decrease from the 2018 fiscal period.

• | Organic enrollment decreased during the 2019 fiscal period by 3%, decreasing revenues by $2.9 million. This decrease was attributable to a decrease in organic enrollment at the University of Liverpool and the University of Roehampton as we no longer accept new enrollments at those institutions, partially offset by organic growth at Walden University.

• | A portion of the product mix, pricing and timing decrease was due to higher discounts and scholarships.

• | Revenues represented 20% of our consolidated total revenues for the 2019 fiscal period compared to 21% for the 2018 fiscal period.

Adjusted EBITDA increased by $6.7 million, a 5% increase compared to the 2018 fiscal period.
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Corporate
Corporate revenues represent amounts from our consolidated joint venture with the University of Liverpool, as well as centralized IT costs charged to various segments, offset by the elimination of intersegment revenues.
Operating results for Corporate for the three months ended September 30, 2019 and 2018:

|  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
(in millions) | 2019 |  | 2018 |  | 2019 vs. 2018
Revenues | $ | (1.5 | ) |  | $ | (3.7 | ) |  | 59 | %
Expenses | 39.3 |  |  | 41.9 |  |  | 6 | %
Adjusted EBITDA | $ | (40.8 | ) |  | $ | (45.6 | ) |  | 11 | %

Comparison of Corporate Results for the Three Months Ended September 30, 2019 to the Three Months Ended September 30, 2018
Adjusted EBITDA increased by $4.8 million, a 11% increase from the 2018 fiscal quarter.

• | Labor costs and other professional fees decreased by $7.3 million for the 2019 fiscal quarter compared to the 2018 fiscal quarter, related to cost-reduction efforts.

• | Other items accounted for a decrease in Adjusted EBITDA of $2.5 million.

Operating results for Corporate for the nine months ended September 30, 2019 and 2018:

|  |  |  |  | % Change
|  |  |  |  | Better/(Worse)
(in millions) | 2019 |  | 2018 |  | 2019 vs. 2018
Revenues | $ | (2.1 | ) |  | $ | (9.4 | ) |  | 78 | %
Expenses | 115.8 |  |  | 118.2 |  |  | 2 | %
Adjusted EBITDA | $ | (117.9 | ) |  | $ | (127.6 | ) |  | 8 | %

Comparison of Corporate Results for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018
Adjusted EBITDA increased by $9.7 million, an 8% increase from the 2018 fiscal quarter.

• | Labor costs and other professional fees decreased expenses by $22.7 million for the 2019 fiscal period compared to the 2018 fiscal period, related to cost-reduction efforts.

• | Other items accounted for a decrease in Adjusted EBITDA of $13.0 million. This decrease is primarily attributable to the year-over-year impact of the resolution of an earnout liability during 2018 that was related to the 2014 acquisition of Monash South Africa; the reversal of the earnout liability increased Adjusted EBITDA during the 2018 fiscal period.

Liquidity and Capital Resources
Liquidity Sources
We anticipate that cash flow from operations and available cash will be sufficient to meet our current operating requirements for at least the next 12 months from the date of issuance of this report.
Our primary source of cash is revenue from tuition charged to students in connection with our various education program offerings. The majority of our students finance the cost of their own education and/or seek third-party financing programs. We anticipate generating sufficient cash flow from operations in the majority of countries where we operate to satisfy the working capital and financing needs of our organic growth plans for each country. If our educational institutions within one country were unable to maintain sufficient liquidity, we would consider using internal cash resources or reasonable short-term working capital facilities to accommodate any short- to medium-term shortfalls.
71

As of September 30, 2019, our secondary source of liquidity was cash and cash equivalents of $323.9 million, which does not include $64.0 million of cash recorded at subsidiaries that are classified as held for sale at September 30, 2019. Our cash accounts are maintained with high-quality financial institutions with no significant concentration in any one institution.
Sale Transactions
On February 1, 2019, we completed the sale of St. Augustine and received net proceeds of approximately $346.4 million (approximately $301.8 million net of cash sold). The Company used $340.0 million of the net proceeds to repay a portion of the 2024 Term Loan, with the remaining proceeds utilized to repay borrowings outstanding under our revolving credit facility.
On February 12, 2019, we completed the sale of our Thailand operations. The total purchase price was approximately $35.3 million, resulting in net proceeds of approximately $26.4 million. Of the $26.4 million in net proceeds, $22.2 million (approximately $18.8 million net of cash sold) was received at closing. Of the remaining balance, $2.8 million was received in May 2019 and the remainder is payable upon satisfaction of certain post-closing requirements.
On April 8, 2019, we completed the sale of our institution in South Africa, Monash South Africa, as well as the sale of the real estate associated with that institution. Including working capital adjustments, the Company received approximately $9.0 million from the buyer, which approximated the amount of cash sold with the business.
On May 9, 2019, we completed the sale of our operations in India for net proceeds of approximately $145.8 million (approximately $77.3 million net of cash sold) after the payment to the 10% minority owners, transaction fees and taxes, as well as receipt in July 2019 of certain taxes that were withheld at closing. The Company used the proceeds to repay a portion of the 2024 Term Loan.
On May 31, 2019, we completed the sale of our institutions in Spain and Portugal and received net proceeds of approximately $906.0 million (approximately $760.0 million net of cash sold). The Company used the net proceeds to repay indebtedness, including full repayment of the remaining balance outstanding under the 2024 Term Loan. Additionally, the buyer assumed debt of approximately $109.0 million.
On August 27, 2019, we completed the sale of our institution in Turkey at a total purchase price of $90.0 million, which consisted of cash proceeds of $75.0 million and deferred purchase price of $15.0 million in the form of an instrument payable one year after closing. At the date of sale, Bilgi had approximately $89.0 million of cash and restricted cash on its balance sheet.
In early October 2019, we completed the previously announced sale of our institution in Panama, in addition to real estate that serves as the institution's campus, and received net proceeds of approximately $80.0 million.
On November 1, 2019, the Company closed on the previously announced sale of its institution UniNorte, a traditional higher education institution in Manaus, Brazil, to Ser Educational. The Company received net cash proceeds of approximately $46.0 million, prior to the payment of estimated closing costs and fees.
Liquidity Restrictions
Our liquidity is affected by restricted cash balances, which totaled $183.8 million and $195.8 million as of September 30, 2019 and December 31, 2018, respectively.
Indefinite Reinvestment of Foreign Earnings
We earn a significant portion of our income from subsidiaries located in countries outside the United States. As part of our business strategies, we have determined that, except for one of our institutions in Peru, all earnings from our foreign continuing operations will be deemed indefinitely reinvested outside of the United States. As of September 30, 2019, $316.9 million of our total $323.9 million of cash and cash equivalents were held by foreign subsidiaries, including $163.4 million held by VIEs. These amounts above do not include $64.0 million of cash recorded at subsidiaries that are classified as held for sale at September 30, 2019, of which $62.8 million was held by foreign subsidiaries. As of December 31, 2018, $327.2 million of our total $387.8 million of cash and cash equivalents were held by foreign subsidiaries, including $158.4 million held by VIEs. These amounts above do not include $217.1 million of cash recorded at subsidiaries that were classified as held for sale at December 31, 2018, of which $209.1 million was held by foreign subsidiaries. The VIEs' cash and cash equivalents balances are generally required to be used only for the operations of these VIEs.
72

Liquidity Requirements
Our short-term liquidity requirements include: funding for debt service (including finance leases); operating lease obligations; payments due to shareholders of acquired companies; payments of deferred compensation; working capital; operating expenses; capital expenditures; payments under our stock repurchase programs; and business development activities.
Long-term liquidity requirements include: payments on long-term debt (including finance leases); operating lease obligations; payments of long-term amounts due to shareholders of acquired companies; payments of deferred compensation; and payments of other third-party obligations.
Debt
As of September 30, 2019, senior long-term borrowings totaled $859.0 million and consisted of $59.0 million of borrowings under our revolving credit facility and $800.0 million in Senior Notes due 2025 that mature in May 2025. As discussed further below, in October 2019, the maturity date of our revolving credit facility was extended from April 2022 to October 2024.
As of September 30, 2019, other debt balances totaled $387.0 million and our finance lease obligations and sale-leaseback financings were $99.7 million. Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries, mortgages payable and notes payable.
Approximately $58.3 million 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, 2019. For further description of the held-for-sale amounts see Note 4, Discontinued Operations and Assets Held for Sale, in our consolidated financial statements included elsewhere in this Form 10-Q.
Senior Secured Credit Facility
As of September 30, 2019, the outstanding balance under our Senior Secured Credit Facility was $59.0 million, which consisted entirely of the balance outstanding under our $385.0 million revolving credit facility. As of December 31, 2018, the outstanding balance under our Senior Secured Credit Facility was $1,321.6 million, which consisted of $93.5 million outstanding under our $385.0 million revolving credit facility and an aggregate outstanding balance of $1,228.1 million, net of a debt discount, under the 2024 Term Loan. As described above, during the second quarter of 2019, the Company used proceeds from the sales of discontinued operations to fully repay the outstanding balance under the 2024 Term Loan.
Covenants
Under our Second Amended and Restated Credit Agreement we are subject to a Consolidated Senior Secured Debt to Consolidated EBITDA financial maintenance covenant, as defined in the Second Amended and Restated Credit Agreement, unless certain conditions are satisfied. As of September 30, 2019, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant. The maximum ratio, as defined, is 3.50x as of September 30, 2019 and thereafter. In addition, notes payable at some of our locations contain financial maintenance covenants.
Amendment of Senior Secured Credit Facility
On October 7, 2019, the Company entered into a Third Amended and Restated Credit Agreement (the Third A&R Credit Agreement). Among other things, the Third A&R Credit Agreement increases the borrowing capacity of our revolving credit facility from $385.0 million to $410.0 million and extends the maturity date from April 26, 2022 to October 7, 2024.
Under the Third A&R Credit Agreement, the revolving credit facility bears interest at a per annum interest rate, at the option of the Company, at either the LIBO rate or the ABR rate, as defined in the agreement, plus an applicable margin of 2.50% per annum, 2.25% per annum, 2.00% per annum or 1.75% per annum for LIBOR loans, and 1.50% per annum, 1.25% per annum, 1.00% per annum or 0.75% per annum for ABR loans, in each case, based on the Company’s consolidated total debt to consolidated EBITDA ratio, as defined in the agreement. The Third A&R Credit Agreement did not change the Company's Consolidated Senior Secured Debt to Consolidated EBITDA financial maintenance covenant.
Senior Notes
As of both September 30, 2019 and December 31, 2018, the outstanding balance under our Senior Notes due 2025 was $800.0 million.
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Leases
We conduct a significant portion of our operations from leased facilities. These facilities include our corporate headquarters, other office locations, and many of our higher education facilities. As discussed in Note 10, Leases, in our consolidated financial statements included elsewhere in this Form 10-Q, we have significant liabilities recorded related to our leased facilities, which will require future cash payments.
Due to Shareholders of Acquired Companies
One method of payment for acquisitions is the use of promissory notes payable to the sellers of acquired companies. As of September 30, 2019 and December 31, 2018, we recorded $21.5 million and $45.4 million, respectively, for these liabilities. See also Note 6, Due to Shareholders of Acquired Companies, in our consolidated financial statements included elsewhere in this Form 10-Q.
Capital Expenditures
Capital expenditures consist of purchases of property and equipment and expenditures for deferred costs. Our capital expenditure program is a component of our liquidity and capital management strategy. This program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment, to grow our network through the following: (1) capacity expansion at institutions to support enrollment growth; (2) new campuses for institutions in our existing markets; (3) information technology to increase efficiency and controls; and (4) online content development. Our non-discretionary spending includes the maintenance of existing facilities. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. We believe that our internal sources of cash and our ability to obtain additional third-party financing, subject to market conditions, will be sufficient to fund our investing activities.
Our total capital expenditures for our continuing and discontinued operations, excluding receipts from the sale of subsidiaries and property equipment, were $114.2 million and $163.6 million during the nine months ended September 30, 2019, and 2018, respectively. The 30% decrease in capital expenditures for the 2019 fiscal period compared to the 2018 fiscal period was driven by lower spending in Costa Rica, Peru and Brazil due to significant capital expenditures made in prior periods to launch several new campuses in these geographies, as well as reduced equipment expenditures in Mexico, combined with reduced capital expenditures as a result of divestitures.
Derivatives
In the normal course of business, our operations are exposed to fluctuations in foreign currency values and interest rate changes. We mitigate a portion of these risks through a risk-management program that includes the use of derivatives. For further information on our derivatives, see Note 15, Derivative Instruments, in our consolidated financial statements included elsewhere in this Form 10-Q.
Redeemable Noncontrolling Interests and Equity and Payments Related to Divestitures
In connection with certain acquisitions, we have entered into put/call arrangements with certain minority shareholders, and we may be required or elect to purchase additional ownership interests in the associated entities within a specified timeframe. In certain cases, call rights may contain minimum payment provisions. If we exercise such call rights, or negotiate the purchase of additional ownership interests, the consideration required could be higher than the estimated put values.
In connection with the sale of NSAD, the Company estimates that it will pay subsidies to the NSAD Buyers for continued operations and campus facilities of up to approximately $5.8 million.
Stock Repurchase Program
On August 8, 2019, the Company announced that its board of directors had authorized a stock repurchase program to acquire up to $150 million of the Company’s Class A common stock. The Company financed the repurchases with operating cash flows and excess cash and liquidity on hand. During the quarter ended September 30, 2019, the Company repurchased 6.2 million shares of its outstanding Class A common stock for a total purchase price of $104.8 million, of which 5.1 million shares totaling $87.9 million had settled by close of business on September 30, 2019. The remaining shares settled in early October 2019 and their
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purchase price of $16.9 million is recorded as a liability as of September 30, 2019. In early October 2019, the Company's stock repurchases reached the authorized limit of $150.0 million.
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 $150.0 million for a total authorization (including the previously authorized repurchases) of up to $300.0 million of the Company's Class A common stock. The Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act. Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company's board of directors will review the stock repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.
Cash Flows
In the consolidated statements of cash flows, the changes in operating assets and liabilities are presented excluding the effects of exchange rate changes, acquisitions, and reclassifications, as these effects do not represent operating cash flows. Accordingly, the amounts in the consolidated statements of cash flows do not agree with the changes of the operating assets and liabilities as presented in the consolidated balance sheets. The effects of exchange rate changes on cash are presented separately in the consolidated statements of cash flows.
The following table summarizes our cash flows from operating, investing, and financing activities for each of the nine months ended September 30, 2019 and 2018:

(in millions) | 2019 |  | 2018
Cash provided by (used in): |  |  |
Operating activities | $ | 312.3 |  |  | $ | 356.4 |
Investing activities | 1,050.7 |  |  | 226.8 |
Financing activities | (1,587.6 | ) |  | (486.9 | )
Effects of exchange rates changes on cash | (8.8 | ) |  | (4.5 | )
Change in cash included in current assets held for sale | 157.6 |  |  | (41.2 | )
Net change in cash and cash equivalents and restricted cash | $ | (75.8 | ) |  | $ | 50.5 |

Comparison of Cash Flows for the Nine Months Ended September 30, 2019 to the Nine Months Ended September 30, 2018
Operating Activities
Cash provided by operating activities decreased by $44.1 million to $312.3 million for the 2019 fiscal period from $356.4 million for the 2018 fiscal period. This decrease in operating cash was primarily due to changes in operating assets and liabilities and other working capital, which decreased operating cash by $77.7 million, due largely to the year-over-year effect of cash received during the fall intake cycle of 2018 for entities that were subsequently divested in 2019. In addition, approximately $22.3 million of the decrease is the year-over-year change related to cash payments for derivatives. During the 2019 fiscal period, the Company made a cash payment $8.2 million to settle cross currency and interest rate swaps in Chile, whereas in the 2018 fiscal period the Company had received $14.1 million of cash proceeds from settlement of derivative contracts.
These decreases in operating cash were partially offset by a decrease in cash paid for taxes of $25.6 million, from $105.6 million for the 2018 fiscal period, which included approximately $34.5 million of payments to the Spanish Tax Authorities, to $80.0 million for the 2019 fiscal period. Additionally, cash paid for interest decreased by $30.3 million, from $168.0 million for the 2018 fiscal period to $137.7 million for the 2019 fiscal period, due to decreased interest attributable to lower average debt balances resulting from reductions in debt principal balances.
Investing Activities
Cash provided by investing activities increased by $823.9 million to $1,050.7 million for the 2019 fiscal period from $226.8 million for the 2018 fiscal period. This increase is primarily attributable to: (1) higher cash receipts from the sales of discontinued operations of $765.9 million, from $375.8 million during the 2018 fiscal period (for the sales of our operations in Cyprus, Italy, China, Germany, Morocco and Kendall) to $1,141.7 million during the 2019 fiscal period (for the sales of our St. Augustine, Thailand, South Africa, India, Spain, Portugal and Turkey operations); (2) a decrease in capital expenditures of $49.4 million; (3)
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a year-over-year change in cash from derivative settlements for the sale transactions of $22.9 million, related to the foreign exchange swap agreements associated with the sale of the Cyprus and Italy institutions during the 2018 fiscal period and the Spain and Portugal institutions during the 2019 fiscal period; and (4) proceeds of $11.5 million in the 2019 fiscal period from the sale of shares of a preferred stock investment in a private education company, as discussed in Note 19, Fair Value Measurement, in our consolidated financial statements included e lsewhere in this Quarterly Report on Form 10-Q. Partially offsetting these increases in investing cash flows was the effect of proceeds received from corporate-owned life insurance policies during the 2018 fiscal period, resulting in a year-over-year decrease of $24.6 million. Additionally, during the 2019 fiscal period, we made a payment of $1.2 million for a small acquisition in Brazil.
Financing Activities
Cash used in financing activities increased by $1,100.7 million to $1,587.6 million for the 2019 fiscal period from $486.9 million for the 2018 fiscal period. This increase in financing cash outflows was primarily attributable to higher net payments of long-term debt during the 2019 fiscal period as compared to the 2018 fiscal period of $1,010.8 million, as well as higher payments for debt issuance costs and redemption and call premiums during the 2019 fiscal period than in the 2018 fiscal period of $6.1 million, which was mostly related to a debt repayment in Chile. Payments to purchase noncontrolling interest were higher by $5.7 million, primarily attributable to the payment made during the 2019 fiscal period to acquire the remaining 10% noncontrolling interest of one of our operations in India, immediately prior to the sale of those operations. In addition, during the 2019 fiscal period, we made payments of $87.9 million to repurchase shares of our Class A common stock, as discussed above.
These increases in financing cash outflows were partially offset by a $11.1 million reduction in dividend payments for the Series A Preferred Stock (no further dividend payments were required following the April 2018 conversion of the Series A Preferred Stock into Class A common stock). Other items accounted for the remaining difference of $1.3 million.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Our significant accounting policies are discussed in Note 2, Significant Accounting Policies, of the audited consolidated financial statements included in our 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 2018 Form 10-K. During the nine months ended September 30, 2019, there were no significant changes to our critical accounting policies.
Recently Issued Accounting Standards
Refer to Note 2, Significant Accounting Policies, in our consolidated financial statements included elsewhere in this Form 10-Q for recently issued accounting standards.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding our exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our 2018 Form 10-K. There have been no significant changes in our market risk exposures since our December 31, 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’’) and Chief Financial Officer (‘‘CFO’’), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’)), as of the end of the period covered by this Quarterly Report on Form 10-Q. The purpose of disclosure controls and procedures is to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our CEO and CFO, to allow timely decisions regarding required disclosures. Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective.
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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, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Please refer to Part I, ‘‘Item 3. Legal Proceedings’’ in our 2018 Form 10-K and Part II, “Item 1. Legal Proceedings” in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 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 required to defend this action and to indemnify the purchaser against any liabilities which arise from these claims, subject to an aggregate cap on liability of RMB 400 million (approximately $56 million at September 30, 2019). We believe the claims are without merit and intend to defend vigorously against them.
Item 1A. Risk Factors
There have been no material changes in the Risk Factors included in Item 1A of our 2018 Form 10-K.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities (in thousands, except per share amounts)
The following table provides a summary of the Company’s purchases of its Class A common stock during the three months ended 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 stock repurchase program to acquire up to $150,000 of the Company’s Class A common stock. In early October 2019, the Company's stock repurchases reached the previously authorized limit of $150,000 and, 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. See Note 21, Subsequent Events, of our consolidated financial statements included elsewhere in this Form 10-Q.
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Item 6. Exhibits
(a) Exhibits filed with this report or, where indicated, previously filed and incorporated by reference:

Exhibit No. | Exhibit Description | Form | File Number | Exhibit Number | Filing Date
2.1# | Amended and Restated Sale and Purchase Agreement, dated as of November 22, 2017 and amended and restated on January 11, 2018, by and among LEI European Investments B.V., Laureate International B.V. and Galileo Global Education Luxco S.À R.L. | 10-K | 001-38002 | 2.7 | 03/20/2018
2.2# | Sale and Purchase Agreement, dated April 12, 2018, among LEI European Investments B.V., Laureate International B.V. and Global University Systems Germany B.V. | 8-K | 001-38002 | 2.1 | 04/18/2018
2.3# | Asset Purchase Agreement, dated January 15, 2018, among Kendall College, LLC, The Dining Room at Kendall NFP, National Louis University and Laureate Education, Inc. | 8-K | 001-38002 | 2.1 | 08/07/2018
2.4# | Membership Interest Purchase Agreement, dated April 24, 2018, by and among Laureate Education, Inc., Exeter Street Holdings, LLC, University of St. Augustine for Health Sciences, LLC and University of St. Augustine Acquisition Corp. | 10-Q | 001-38002 | 2.4 | 08/09/2018
2.5# | Sale and Purchase Agreement, dated December 12, 2018, by and among Iniciativas Culturales de España S.L., Laureate I B.V. and Samarinda Investments, S.L. | 10-K | 001-38002 | 2.5 | 02/28/2019
2.6# | Share Purchase Agreement relating to the sale and purchase of equity shares of Pearl Retail Solutions Private Limited, M-Power Energy India Private Limited and Data Ram Sons Private Limited | 8-K | 001-38002 | 2.1 | 05/13/2019
2.7# | Share Purchase Agreement relating to all the shares in the capital of Education Turkey B.V. | 8-K | 001-38002 | 2.1 | 08/29/2019
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

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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

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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

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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 |  |  |  |

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Exhibit No. | Exhibit Description | Form | File Number | Exhibit Number | Filing Date
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.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 6, 2019.
/s/ JEAN-JACQUES CHARHON
Jean-Jacques Charhon
Executive Vice President and Chief Financial Officer
/s/ TAL DARMON
Tal Darmon
Senior Vice President, Chief Accounting Officer
and Global Controller
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