XML 90 R20.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Leases | 12 Months Ended
--- | ---
Dec. 31, 2021
Leases [Abstract] |
Leases | Leases Laureate conducts a significant portion of its operations at leased facilities, including many of Laureate's higher education facilities and other office locations. 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, "Leases," on January 1, 2019, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below. Finance Leases Our finance lease agreements are for property and equipment. The lease assets are included within buildings as well as furniture, equipment and software and the related lease liability is included within debt and finance leases on the consolidated balance sheets. 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 Consolidated Balance Sheets. 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. As discussed in Note 2, Significant Accounting Policies, ROU assets and lease liabilities are recognized at the commencement date of the lease based on the estimated 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. 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 as of December 31, 2021 and 2020 was as follows:
Leases | Classification | 2021 | 2020
Assets: |  |  |
Operating | Operating lease right-of-use assets, net | $ | 384,344 |  | $ | 462,767 |
Finance | Buildings, Furniture, equipment and software, net | 39,756 |  | 49,237 |
Total leased assets |  | $ | 424,100 |  | $ | 512,004 |
Liabilities: |  |  |
Current |  |  |
Operating | Current portion of operating leases | 38,149 |  | 44,631 |
Finance | Current portion of long-term debt and finance leases | 5,258 |  | 5,430 |
Non-current |  |  |
Operating | Long-term operating leases, less current portion | 377,104 |  | 474,507 |
Finance | Long-term debt and finance leases, less current portion | 39,866 |  | 47,209 |
Total lease liabilities |  | $ | 460,377 |  | $ | 571,777 |
Lease Term and Discount Rate |  | 2021 | 2020 | 2019
Weighted average remaining lease terms |  |  |  |
Operating leases |  | 9.4 years | 9.9 years | 6.5 years
Finance leases |  | 14.9 years | 14.5 years | 5.3 years
Weighted average discount rate |  |  |  |
Operating leases |  | 8.90 | % | 9.20 | % | 6.13 | %
Finance leases |  | 9.60 | % | 9.50 | % | 4.50 | %
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were as follows:
Lease Cost | Classification | 2021 | 2020 | 2019
Operating lease cost | Direct costs | $ | 70,256 |  | $ | 68,488 |  | $ | 75,622 |
Finance lease cost |  |  |  |
Amortization of leased assets | Direct costs | 6,732 |  | 4,484 |  | 2,609 |
Interest on leased assets | Interest expense | 4,092 |  | 2,750 |  | 1,831 |
Short-term lease costs | Direct costs | 73 |  | 1,121 |  | 904 |
Variable lease costs | Direct costs | 5,575 |  | (877) |  | 2,595 |
Sublease income | Revenues | (187) |  | (890) |  | (2,826) |
Total lease cost |  | $ | 86,541 |  | $ | 75,076 |  | $ | 80,735 |
Rent Concessions The Company has taken actions with respect to certain of its existing leases, including engaging with landlords to discuss rent deferrals, as well as other rent concessions. Consistent with the updated guidance from the Financial Accounting Standards Board (FASB) in April 2020, the Company has elected the practical expedient for rent concessions where the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract. In those cases, the Company treated the rent concessions as if there were no modification to the lease contract and accounted for these rent concessions as variable lease payments. As of December 31, 2021, maturities of lease liabilities were as follows:
Maturity of Lease Liability | Operating Leases | Finance Leases
Year 1 | $ | 77,083 |  | $ | 9,131 |
Year 2 | 74,047 |  | 7,935 |
Year 3 | 73,583 |  | 6,031 |
Year 4 | 71,636 |  | 4,771 |
Year 5 | 66,525 |  | 3,583 |
Thereafter | 245,828 |  | 77,216 |
Total lease payments | $ | 608,702 |  | $ | 108,667 |
Less: interest and inflation | (193,449) |  | (63,543) |
Present value of lease liabilities | $ | 415,253 |  | $ | 45,124 |
Supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019 was as follows:
Other Information | 2021 | 2020 | 2019
Cash paid for amounts included in the measurement of lease liabilities |  |  |
Operating cash flows used for operating leases | $ | 75,164 |  | $ | 69,881 |  | $ | 75,196 |
Operating cash flows used for finance leases | $ | 4,107 |  | $ | 2,750 |  | $ | 1,831 |
Financing cash flows used for finance leases | $ | 4,874 |  | $ | 2,736 |  | $ | 1,267 |
Leased assets obtained for new finance lease liabilities | $ | 1,997 |  | $ | 27,757 |  | $ | 24,774 |
Leased assets obtained for new operating lease liabilities | $ | 7,674 |  | $ | 13,565 |  | $ | 10,038 |
Corporate Office Lease Termination In March 2021, the Company exercised its one-time right under the operating lease agreement for its former corporate headquarters in Baltimore, Maryland, to terminate the lease effective June 30, 2022. In connection with the exercise of this early termination option, the Company was required to pay an early termination fee of approximately $1,200, half of which was paid in March 2021. In December 2021, the Company and the landlord agreed to a termination of the lease agreement, effective December 31, 2021. In connection with this lease termination, the Company made a total payment of approximately $2,750, which included the second half of the early termination fee noted above, as well as all remaining amounts owed under the lease. Kendall Lease Termination In December 2021, the Company completed a lease termination agreement with the landlord of its Kendall property in Chicago, Illinois. In connection with the lease termination agreement, the Company made a total payment of approximately $44,050 and recorded a loss of approximately $25,800, which is included in Operating (loss) income in the Consolidated Statement of Operations for the year ended December 31, 2021.
Leases | Leases Laureate conducts a significant portion of its operations at leased facilities, including many of Laureate's higher education facilities and other office locations. 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, "Leases," on January 1, 2019, we recorded on our balance sheet significant asset and liability balances associated with the operating leases, as described further below. Finance Leases Our finance lease agreements are for property and equipment. The lease assets are included within buildings as well as furniture, equipment and software and the related lease liability is included within debt and finance leases on the consolidated balance sheets. 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 Consolidated Balance Sheets. 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. As discussed in Note 2, Significant Accounting Policies, ROU assets and lease liabilities are recognized at the commencement date of the lease based on the estimated 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. 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 as of December 31, 2021 and 2020 was as follows:
Leases | Classification | 2021 | 2020
Assets: |  |  |
Operating | Operating lease right-of-use assets, net | $ | 384,344 |  | $ | 462,767 |
Finance | Buildings, Furniture, equipment and software, net | 39,756 |  | 49,237 |
Total leased assets |  | $ | 424,100 |  | $ | 512,004 |
Liabilities: |  |  |
Current |  |  |
Operating | Current portion of operating leases | 38,149 |  | 44,631 |
Finance | Current portion of long-term debt and finance leases | 5,258 |  | 5,430 |
Non-current |  |  |
Operating | Long-term operating leases, less current portion | 377,104 |  | 474,507 |
Finance | Long-term debt and finance leases, less current portion | 39,866 |  | 47,209 |
Total lease liabilities |  | $ | 460,377 |  | $ | 571,777 |
Lease Term and Discount Rate |  | 2021 | 2020 | 2019
Weighted average remaining lease terms |  |  |  |
Operating leases |  | 9.4 years | 9.9 years | 6.5 years
Finance leases |  | 14.9 years | 14.5 years | 5.3 years
Weighted average discount rate |  |  |  |
Operating leases |  | 8.90 | % | 9.20 | % | 6.13 | %
Finance leases |  | 9.60 | % | 9.50 | % | 4.50 | %
The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were as follows:
Lease Cost | Classification | 2021 | 2020 | 2019
Operating lease cost | Direct costs | $ | 70,256 |  | $ | 68,488 |  | $ | 75,622 |
Finance lease cost |  |  |  |
Amortization of leased assets | Direct costs | 6,732 |  | 4,484 |  | 2,609 |
Interest on leased assets | Interest expense | 4,092 |  | 2,750 |  | 1,831 |
Short-term lease costs | Direct costs | 73 |  | 1,121 |  | 904 |
Variable lease costs | Direct costs | 5,575 |  | (877) |  | 2,595 |
Sublease income | Revenues | (187) |  | (890) |  | (2,826) |
Total lease cost |  | $ | 86,541 |  | $ | 75,076 |  | $ | 80,735 |
Rent Concessions The Company has taken actions with respect to certain of its existing leases, including engaging with landlords to discuss rent deferrals, as well as other rent concessions. Consistent with the updated guidance from the Financial Accounting Standards Board (FASB) in April 2020, the Company has elected the practical expedient for rent concessions where the total payments required by the modified contract are substantially the same or less than the total payments required by the original contract. In those cases, the Company treated the rent concessions as if there were no modification to the lease contract and accounted for these rent concessions as variable lease payments. As of December 31, 2021, maturities of lease liabilities were as follows:
Maturity of Lease Liability | Operating Leases | Finance Leases
Year 1 | $ | 77,083 |  | $ | 9,131 |
Year 2 | 74,047 |  | 7,935 |
Year 3 | 73,583 |  | 6,031 |
Year 4 | 71,636 |  | 4,771 |
Year 5 | 66,525 |  | 3,583 |
Thereafter | 245,828 |  | 77,216 |
Total lease payments | $ | 608,702 |  | $ | 108,667 |
Less: interest and inflation | (193,449) |  | (63,543) |
Present value of lease liabilities | $ | 415,253 |  | $ | 45,124 |
Supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019 was as follows:
Other Information | 2021 | 2020 | 2019
Cash paid for amounts included in the measurement of lease liabilities |  |  |
Operating cash flows used for operating leases | $ | 75,164 |  | $ | 69,881 |  | $ | 75,196 |
Operating cash flows used for finance leases | $ | 4,107 |  | $ | 2,750 |  | $ | 1,831 |
Financing cash flows used for finance leases | $ | 4,874 |  | $ | 2,736 |  | $ | 1,267 |
Leased assets obtained for new finance lease liabilities | $ | 1,997 |  | $ | 27,757 |  | $ | 24,774 |
Leased assets obtained for new operating lease liabilities | $ | 7,674 |  | $ | 13,565 |  | $ | 10,038 |
Corporate Office Lease Termination In March 2021, the Company exercised its one-time right under the operating lease agreement for its former corporate headquarters in Baltimore, Maryland, to terminate the lease effective June 30, 2022. In connection with the exercise of this early termination option, the Company was required to pay an early termination fee of approximately $1,200, half of which was paid in March 2021. In December 2021, the Company and the landlord agreed to a termination of the lease agreement, effective December 31, 2021. In connection with this lease termination, the Company made a total payment of approximately $2,750, which included the second half of the early termination fee noted above, as well as all remaining amounts owed under the lease. Kendall Lease Termination In December 2021, the Company completed a lease termination agreement with the landlord of its Kendall property in Chicago, Illinois. In connection with the lease termination agreement, the Company made a total payment of approximately $44,050 and recorded a loss of approximately $25,800, which is included in Operating (loss) income in the Consolidated Statement of Operations for the year ended December 31, 2021.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeFinanceLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration