Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

The VIEs in Brazil and Mexico include 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 years ended December 31,	2018			2017			2016
Selected Statements of Operations information:
Revenues, by segment:
Brazil	$	—		$	104		$	—
Mexico	94			—			—
Andean	441,294			418,019			380,111
Rest of World	—			—			20,206
Revenues	441,388			418,123			400,317

Depreciation and amortization	25,489			26,899			28,351

Operating income (loss), by segment:
Brazil	(71		)	(1		)	(80		)
Mexico	(489		)	(876		)	(967		)
Andean	9,692			(4,858		)	(17,120		)
Rest of World	—			—			4,201
Operating income (loss)	9,132			(5,735		)	(13,966		)

Net income attributable to Laureate Education, Inc.	33,199			13,035			3,309

Included in net income for the VIEs in the table above is non-operating investment income that was recorded by three of the Chilean institutions relating to investments that these institutions have in a for-profit, education-related real estate subsidiary of Laureate in Chile. This non-operating investment income, which eliminated in consolidation, totaled $14,331, $11,696 and $11,061 for the years ended December 31, 2018, 2017 and 2016, respectively. The 2016 revenues and operating income for the Rest of World segment represents activity for two VIE institutions in France that were sold in July 2016; for further description of these institutions see Note 6, Dispositions and Asset Sales.

Income attributable to Laureate Education, Inc. related to VIEs that are included in discontinued operations totaled $86,887, $30,145 and $29,724 for the years ended December 31, 2018, 2017 and 2016, respectively.

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



For the years ended December 31,	2018			2017			2016
Net income (loss) attributable to Laureate Education, Inc.:
Variable interest entities	$	33,199		$	13,035		$	3,309
Other operations including discontinued operations	503,149			513,205			550,058
Corporate and eliminations	(166,281		)	(434,775		)	(181,520		)
Net income attributable to Laureate Education, Inc.	$	370,067		$	91,465		$	371,847

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:



	December 31, 2018				December 31, 2017
	VIE		Consolidated		VIE		Consolidated
Balance Sheets data:
Cash and cash equivalents	$	158,387	$	388,490	$	100,971	$	320,567
Current assets held for sale	183,880		306,372		170,229		324,668
Other current assets	141,346		522,271		136,115		643,459
Total current assets	483,613		1,217,133		407,315		1,288,694

Goodwill	168,473		1,707,089		183,812		1,828,365
Tradenames	66,929		1,126,244		74,484		1,167,302
Other intangible assets, net	—		25,429		—		35,779
Long-term assets held for sale	165,087		1,031,459		369,375		1,224,672
Other long-term assets	312,711		1,662,282		384,593		1,846,473
Total assets	1,196,813		6,769,636		1,419,579		7,391,285

Current liabilities held for sale	101,320		308,391		183,166		451,569
Other current liabilities	106,657		881,696		157,981		923,020
Long-term liabilities held for sale	42,265		354,293		84,760		405,747
Long-term debt and other long-term liabilities	24,502		3,159,914		23,654		3,609,670
Total liabilities	274,744		4,704,294		449,561		5,390,006

Total stockholders' equity	922,069		2,050,946		970,018		1,587,282
Total stockholders' equity attributable to Laureate Education, Inc.	921,747		2,061,079		948,966		1,575,164

Schedule of balances of the allowance for doubtful accounts

The reconciliations of the beginning and ending balances of the Allowance for doubtful accounts were as follows:



For the years ended December 31,	2018			2017			2016
Balance at beginning of period	$	182,965		$	169,014		$	132,149
Additions: charges to bad debt expense	102,318			111,003			98,564
Additions: charges to other accounts ^(a)	—			—			6,589
Deductions ^(b)	(119,895		)	(97,052		)	(68,288		)
Balance at end of period	$	165,388		$	182,965		$	169,014

^(a) Charges to other accounts includes reclassifications.

^(b) Deductions includes accounts receivable written off against the allowance (net of recoveries), reclassifications, and foreign

currency translation. The beginning and ending balances of the Allowance for doubtful accounts include the current

portion, as shown on the face of Consolidated Balance Sheets, in addition to the noncurrent portion that is included in

Notes receivable, net on the Consolidated Balance Sheets.

Laureate’s financing receivables balances were as follows:



	December 31, 2018			December 31, 2017
Financing receivables	$	16,531		$	20,380
Allowance for doubtful accounts	(6,395		)	(6,472		)
Financing receivables, net of allowances	$	10,136		$	13,908

Schedule of depreciation and amortization periods

Depreciation and amortization periods are as follows:



Buildings	10-50 years
Furniture, equipment and software	2-10 years
Leasehold improvements	2-25 years

Schedule of new accounting pronouncements and changes in accounting principles

In accordance with the requirements under Topic 606, the impact of adoption on our Consolidated Statement of Operations and Consolidated Balance Sheet was as follows:



	For the year ended December 31, 2018
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Statement of Operations data:
Revenues	$	3,350,224		$	3,350,224		$	—

Costs and Expenses:
Direct costs	2,746,868			2,752,486			(5,618		)
Income tax expense	(133,160		)	(132,821		)	(339		)

Net income	370,930			365,651			5,279



	As of December 31, 2018
	As Reported			Balances Without Adoption of ASC 606			Effect of Change Higher/(Lower)
Balance Sheet data:
Assets:
Deferred costs, net	$	66,835		$	59,799		$	7,036

Liabilities:
Deferred revenue and student deposits	193,226			193,226			—
Deferred income taxes	217,558			217,219			339

Equity:
Accumulated deficit	(530,919		)	(537,616		)	6,697

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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