XML 46 R17.htm IDEA: XBRL DOCUMENT v3.20.4
Business and Geographic Segment Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Business and Geographic Segment Information Business and Geographic Segment Information
Laureate’s educational services are offered through two reportable segments: Mexico and Peru (formerly Andean). Following the September 2020 sale of Chile, the former Andean segment is now called the Peru segment. Laureate determines its segments based on information utilized by the chief operating decision maker to allocate resources and assess performance.

Our segments generate revenues by providing an education that emphasizes profession-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines. Our educational offerings are increasingly utilizing online and hybrid (a combination of online and in-classroom) courses and programs to deliver their curriculum. In response to the COVID-19 pandemic, we have temporarily transitioned the educational delivery method at all of our institutions to be online and are leveraging our existing technologies and learning platforms to serve students outside of the traditional classroom setting. The Mexico and Peru markets are characterized by what we believe is a significant imbalance between supply and demand. The demand for higher education is large and growing and is fueled by several demographic and economic factors, including a growing middle class, global growth in services and technology-related industries and recognition of the significant personal and economic benefits gained by graduates of higher education institutions. The target demographics are primarily 18- to 24-year-olds in the countries in which we compete. We compete with other private higher education institutions on the basis of price, educational quality, reputation and location. We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our network. There are a number of private and public institutions in both of the countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future. We expect competition to increase as the Mexican and Peruvian markets mature. Essentially all of our revenues were generated from private pay sources as there are no material government-sponsored loan programs in Mexico or Peru. Specifics related to both of our reportable segments are discussed below.

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

In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute 72% of the total higher-education market. Laureate owns three institutions in Peru.

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. As a result, the discontinued operations have 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.

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 disposals of subsidiaries, net, Foreign currency exchange gain (loss), net, Other (expense) income, net, (Loss) 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 6, Dispositions. Beginning in 2019, EiP also includes expenses associated with an enterprise-wide program aimed at revenue growth.

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 from continuing operations before income taxes and equity in net income of affiliates, as reported in the Consolidated Statements of Operations, for the years ended December 31, 2020, 2019 and 2018:
MexicoPeruCorporateTotal
2020
Revenues$534,607 $482,878 $7,432 $1,024,917 
Adjusted EBITDA112,917 189,488 (96,708)205,697 
Depreciation and amortization expense29,032 26,962 27,139 83,133 
Loss on impairment of assets989 — 350,982 351,971 
Total assets1,278,198 623,294 3,069,402 4,970,894 
Expenditures for long-lived assets13,377 18,505 8,376 40,258 
2019
Revenues$652,846 $546,751 $12,473 $1,212,070 
Adjusted EBITDA147,807 197,828 (142,014)203,621 
Depreciation and amortization expense31,132 27,703 23,145 81,980 
Loss on impairment of assets— — 248 248 
Total assets1,315,377 643,473 4,537,573 6,496,423 
Expenditures for long-lived assets30,239 23,837 18,825 72,901 
2018
Revenues$646,134 $496,368 $2,072 $1,144,574 
Adjusted EBITDA143,221 169,213 (172,875)139,559 
Depreciation and amortization expense31,007 27,615 25,945 84,567 
Loss on impairment of assets— — — — 
Expenditures for long-lived assets31,376 28,847 27,279 87,502 

In order to reconcile to total consolidated assets as of December 31, 2020 and 2019 in the table above, assets held for sale related to Discontinued Operations of $1,917,435 and $3,799,126, respectively, are included in the Corporate amounts.
For the years ended December 31,202020192018
Adjusted EBITDA of reportable segments:
Mexico$112,917 $147,807 $143,221 
Peru189,488 197,828 169,213 
Total Adjusted EBITDA of reportable segments302,405 345,635 312,434 
Reconciling items:
Corporate(96,708)(142,014)(172,875)
Depreciation and amortization expense(83,133)(81,980)(84,567)
Loss on impairment of assets(351,971)(248)— 
Share-based compensation expense(10,248)(10,325)(6,575)
EiP expenses(89,647)(75,048)(75,209)
Operating loss(329,302)36,020 (26,792)
Interest income2,169 3,294 2,814 
Interest expense(100,894)(125,042)(188,431)
Loss on debt extinguishment(610)(22,601)(7,481)
(Loss) gain on derivatives(25,980)8,300 88,476 
Other (expense) income, net(2,420)8,922 10,598 
Foreign currency exchange gain (loss), net13,474 (8,125)695 
Loss on disposals of subsidiaries, net(7,276)(20,429)— 
Loss from continuing operations before income taxes and equity in net income of affiliates$(450,839)$(119,661)$(120,121)

Geographic Information

No individual customer accounted for more than 10% of Laureate’s consolidated revenues. Revenues from customers by geographic area, primarily generated by students enrolled at institutions in those areas, were as follows:
For the years ended December 31,202020192018
External Revenues(1)
Mexico $532,530 $650,593 $643,348 
Peru482,819 545,291 493,008 
United States9,509 15,189 7,720 
Other foreign countries59 997 498 
Consolidated total$1,024,917 $1,212,070 $1,144,574 
(1) Excludes intercompany revenues and therefore does not agree to the table above

Long-lived assets are composed of Property and equipment, net. Laureate’s long-lived assets of Continuing Operations by geographic area were as follows:
December 31,20202019
Long-lived assets
Mexico $229,613 $232,380 
Peru323,020 354,100 
United States25,851 54,150 
Consolidated total$578,484 $640,630