UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 8, 2017
Laureate Education, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
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001-38002 |
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52-1492296 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
650 South Exeter Street
Baltimore, MD 21202
(Address of principal executive offices, including zip code)
(410) 843-6100
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
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
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2017, Laureate Education, Inc. (the Company) issued an earnings release announcing its financial results for the quarter ended September 30, 2017. A copy of the earnings release is attached as Exhibit 99.1.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended (the Securities Act), or the Exchange Act.
Item 7.01 Regulation FD Disclosure.
On November 8, 2017, the Company made available certain supplemental financial information. A copy of this supplemental information is attached as Exhibit 99.2.
The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed to be filed for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that Section, and shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) |
Exhibits. |
Exhibit No. |
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Description |
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99.1 |
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99.2 |
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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 hereunto duly authorized.
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LAUREATE EDUCATION, INC. | |
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By: |
/s/ Eilif Serck-Hanssen |
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Eilif Serck-Hanssen |
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President, Chief Financial Officer and Chief Administrative Officer |
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Date: November 8, 2017 |
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LAUREATE EDUCATION REPORTS THIRD QUARTER AND NINE MONTHS ENDED
SEPTEMBER 30, 2017 FINANCIAL RESULTS
BALTIMORE, MARYLAND - November 8, 2017 - Laureate Education, Inc. (NASDAQ: LAUR), the global leader in higher education, today announced financial results for the third quarter and the nine months ended September 30, 2017.
Third Quarter 2017 Highlights (compared to third quarter 2016):
· Revenue increased 6% to $983.4 million; up 4% on an organic constant currency basis.
· Operating (loss) income decreased by $18.2 million to an operating loss of $(5.7) million in the 2017 fiscal quarter from operating income of $12.5 million in the 2016 fiscal quarter, due in part to the impact from the earthquake in Mexico which resulted in the deferral of approximately $11.7 million of revenue (due to class disruptions) from the third to fourth quarter as well as approximately $2.7 million of operating expenses incurred related to repairs. Results for the quarter were also affected by seasonality and timing of expenses.
· Net (loss) income for the quarter was $(103.5) million, as compared to net income of $80.9 million in the third quarter of 2016 which included a $155.2 million gain from the sale of our French institutions.
· Adjusted EBITDA decreased 12% to $86.5 million due in part to the impact from the Mexico earthquake, as well as seasonality and timing items. On an organic constant currency basis, Adjusted EBITDA was down 19% versus the prior year.
· The third quarter represents a large enrollment intake period, but is seasonally low from an earnings perspective as many of our institutions are out of session during a portion of the quarter (summer in the northern hemisphere, winter in the southern hemisphere).
Nine Months Ended September 30, 2017 Highlights (compared to nine months ended September 30, 2016):
· New enrollments increased 3%.
· Total enrollments increased 3%.
· Revenue increased by $48.5 million to $3,116.8 million; up 5% on an organic constant currency basis.
· Operating income decreased by $36.6 million to $175.3 million, due primarily to a $22.8 million one-time charge related to the debt refinancing transactions that were completed during the second quarter of 2017 and the deferral of approximately $11.7 million of revenue from class disruptions caused by the earthquake in Mexico and approximately $2.7 million of operating expense for related repairs.
· Net (loss) income for the nine months was a net loss of $(106.7) million, as compared to net income of $327.7 million in the nine months ended September 30, 2016 which included a $398.4 million gain related to the sale of our Swiss and French institutions.
· Adjusted EBITDA decreased 1% to $477.0 million; however, on an organic constant currency basis, Adjusted EBITDA was up 12% excluding the $22.8 million one-time charge associated with our debt refinancing transactions in the second quarter of 2017.
We are pleased to report favorable enrollment growth in many of our key markets during our intake for the period, including particularly strong results in Brazil, said Douglas Becker, Laureate founder, Chairman, and Chief Executive Officer. Current President, and incoming Chief Executive Officer, Eilif Serck-Hanssen added, We continue to make good progress on our key strategic initiatives, looking to leverage scale and technology to further improve student experiences and drive stronger returns for our shareholders.
Reporting Segments
Effective August 1, 2017, we changed our operating segments in order to align them with how our chief operating decision maker allocates resources and assesses performance. The segments changes resulted in Laureate increasing its number of operating segments from three to six, and is consistent with our goal of flattening our organizational structure to improve decision speed and operating effectiveness.
The change includes the creation of three operating segments (Brazil, Mexico and Andean & Iberian) from the previous Latin America (LatAm) segment. Our institutions in Spain and Portugal (Iberian) have moved from the Europe, Middle East, Africa and Asia Pacific (EMEAA) segment and combined with our institutions in Chile and Peru to form the Andean & Iberian segment. In addition, our institutions in Central America, which were previously part of the LatAm segment, have combined with our campus-based institutions in the United States, which were previously part of the GPS segment, to form the Central America and U.S. Campuses segment. The Online & Partnerships segment consists of the online institutions that were previously part of the GPS segment.
Third Quarter 2017 Results
Revenue in the third quarter of 2017 was $983.4 million, a 6% increase compared to the third quarter of 2016. Operating (loss) income decreased by $18.2 million to an operating loss of $(5.7) million from operating income of $12.5 million in the third quarter of 2016, due in part to the impact from the earthquake in Mexico which resulted in the deferral of approximately $11.7 million of revenue (due to class disruptions) from the third to fourth quarter as well as approximately $2.7 million of operating expenses incurred related to repairs. Results for the quarter were also affected by seasonality and timing of expenses. Net (loss) income was a net loss of $(103.5) million for the third quarter, compared to a net income of $80.9 million in the third quarter of the prior year which included a gain of approximately $155.2 million related to the sale of our French institutions. Diluted loss per share was $(1.02) for the third quarter of 2017.
Adjusted EBITDA was $86.5 million in the third quarter of 2017, a 12% decrease compared to the third quarter of 2016. On an organic (i.e., excluding acquisitions and asset dispositions) constant currency basis, revenue increased 4% and Adjusted EBITDA decreased 19% compared to the third quarter of 2016, due in part to the impact from the Mexico earthquake, as well as seasonality and timing of expenses.
Nine Months Ended September 30, 2017 Results
New enrollments through year-to-date September 2017, excluding asset dispositions, increased 3% compared to our new enrollment activity through year-to-date September 2016. New enrollment growth reflects favorable performance in many of our largest markets including Brazil which is up 11% versus prior year-to-date. New enrollment growth was positive in Peru as well, and Mexico was essentially flat versus prior year due to an estimated loss of 4,000 - 5,000 enrollments as a result of the earthquake (roughly half in the third quarter, and half in the fourth quarter). EMEAA new enrollments reflect a planned strategic shift to longer length-of-stay students with higher revenue and contribution margins. This strategy is resulting in favorable growth in organic constant currency revenue versus prior year-to-date September in that segment. Both Chile and Online & Partnerships experienced new enrollment declines year-over-year. Chile was affected by regulatory challenges during 2016 in that market. Online & Partnerships reflected a planned shift for our international fully online enrollments to longer length-of-stay students with higher revenue and contribution margins, combined with recent softness in the U.S. related to lower lead volume and conversion rates. Total enrollments at September 30, 2017 grew 3% compared to September 30, 2016.
For the nine months ended September 30, 2017, revenue was $3,116.8 million, an increase of $48.5 million compared to the fiscal period 2016. Operating income decreased $36.6 million compared to the 2016 fiscal period, due primarily to a $22.8 million one-time charge related to the debt refinancing transactions that were completed during the second quarter of 2017, the deferral of approximately $11.7 million of revenue from class disruptions caused by the earthquake in Mexico and approximately $2.7 million of operating expense for related repairs. Net
loss for the 2017 fiscal period was $(106.7) million compared to a net income of $327.7 million in the 2016 fiscal period which included a gain of approximately $398.4 million in the 2016 fiscal period related to the sale of the Swiss and French schools. Diluted loss per share was $(1.77) for the 2017 fiscal period.
Adjusted EBITDA was $477.0 million in the 2017 fiscal period, a 1% decrease compared to the 2016 fiscal period. On an organic (i.e., excluding acquisitions and asset dispositions) constant currency basis, revenue increased 5% and Adjusted EBITDA increased 12% compared to the 2016 fiscal period, excluding the $22.8 million one-time charge associated with our debt refinancing transactions in the second quarter of 2017.
Balance Sheet and Capital Structure
Laureate ended the third quarter of 2017 with $505.0 million of cash on hand and $890.0 million in liquidity, including our undrawn revolver. In April 2017, Laureate completed a refinancing of its corporate debt obligations, extending the maturity and reducing the cost of those obligations.
On April 15, 2016, the Company entered into note exchange agreements pursuant to which we agreed to exchange $250.0 million in aggregate principal amount of 9.250% Replacement Senior Notes due 2019 for shares of the Companys Class A common stock. On August 11, 2017, the senior notes were exchanged for a total of 18.7 million shares of the Companys Class A common stock and these senior notes were canceled.
Outlook for Fiscal 2017
Laureate is updating its financial guidance for full-year 2017. The guidance for 2017 reflects the impact from the sale of our French and Swiss assets in 2016, which will unfavorably impact both year-over-year Revenue and Adjusted EBITDA by approximately (3%). Additionally, currency translation from foreign exchange rates, based on current rates, is now expected to have a slightly negative year-over-year impact in 2017 for Adjusted EBITDA following the recent strengthening of the US dollar versus some of our key currencies in a high earnings quarter, but a slightly favorable impact on Revenue is still expected for the year following the foreign exchange gains in prior periods.
Based on the current foreign exchange spot rates(1), Laureate currently expects its organic (i.e., excluding acquisitions and asset dispositions) performance for full-year 2017 to be as follows:
· Total enrollments in the range of 1,059,000 to 1,064,000, representing 1.5-2.0% growth as compared to December 31, 2016, reflecting an estimated 4,000-5,000 student loss in Mexico from the earthquake, and the enrollment declines experienced in the U.S. for the most recent intake;
· Revenues to be approximately $4,345 million, the bottom end of the previous range reflecting the impact from the Mexico earthquake and recent U.S. intake, representing approximately 5.0% organic (pro forma for asset dispositions in 2016) constant currency growth, and including a benefit of $38 million from foreign currency;
· No change in Adjusted EBITDA on an organic constant currency basis due to tighter cost controls although we are reducing the foreign exchange impact by ($6) million from previous guidance, reflecting the recent strengthening of the US dollar. We anticipate Adjusted EBITDA in the range of $780 million to $789 million, inclusive of the $23 million charge for debt refinancing that affected us during the second quarter. Excluding that one-time impact, we expect Adjusted EBITDA in the range of $803 million to $812 million, representing 8.5%-9.5% organic (pro forma for asset dispositions in 2016) constant currency growth;
· Capex spending at 6% to 7% of revenues to support growth initiatives and ongoing maintenance, down one percentage point from previous guidance due partially to timing (versus 2018 spend) and improved results from our hybridity initiative; and
· Reported earnings per share in 2017 to be affected by a $290-$300 million non-cash charge to earnings per share related to accounting for the non-cash beneficial redemption and conversion features due to the terms of the shares of our Series A Preferred Stock.
(1) Based on actual FX rates for January-October 2017, and current spot FX rates (local currency per US dollar) of MXN 19.02, BRL 3.27, CLP 631.00, PEN 3.63, EUR 0.86 for November - December 2017. FX impact may change based on fluctuations in currency rates in future periods.
An outlook for 2017 net income and a reconciliation of the forward-looking 2017 Adjusted EBITDA outlook to net income are not being provided as Laureate does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation.
Please see the Forward-Looking Statements section in this release for a discussion of certain risks related to this outlook.
Conference Call
Laureate will host an earnings conference call today at 5:00 pm ET. Interested parties are invited to listen to the earnings call by dialing 1-855-307-2849 (for U.S.- based callers) or 1-703-639-1262 (for international callers), and request to join the Laureate conference call. Replays of the entire call will be available through November 15, 2017 at 1-855-859-2056 (for U.S.- based callers) and at 1-404-537-3406 (for international callers), conference ID 6380978. The webcast of the conference call, including replays, and a copy of this press release and the related slides will be made available through the Investor Relations section of Laureates web site at www.laureate.net.
Forward-Looking Statements
This press release includes statements that express Laureates opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Laureates actual results may vary significantly from the results anticipated in these forward-looking statements. You can identify forward-looking statements because they contain words such as believes, expects, may, will, should, seeks, approximately, intends, plans, estimates or anticipates or similar expressions that concern our strategy, plans or intentions. All statements we make relating to guidance, including total enrollments, estimated and projected Adjusted EBITDA and earnings, costs, expenditures (including capital expenditures), cash flows, growth rates, our hedging strategy, potential asset sales, currency rates and financial results 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 are disclosed in our Annual Report on Form 10-K filed with the SEC on March 29, 2017, our Quarterly Reports on Form 10-Q filed and to be filed with the SEC and other filings made with the SEC. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.
Presentation of Non-GAAP Measures
In addition to the results provided in accordance with U.S. generally accepted accounting principles (GAAP) throughout this press release, Laureate has provided a non-GAAP measurement of Adjusted EBITDA. We have included Adjusted EBITDA because it 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 input into the formula used by the compensation committee of our board of directors and our Chief Executive Officer in connection with the payment of incentive compensation to our
executive officers and other members of our management team. Accordingly, we believe that Adjusted EBITDA 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. Adjusted EBITDA is reconciled from the respective measures under GAAP in the attached table Non-GAAP Reconciliations.
About Laureate Education, Inc.
Laureate Education, Inc. is the largest global network of degree-granting higher education institutions, with more than one million students enrolled across nearly 70 institutions in 25 countries at campuses and online. Laureate offers high-quality, undergraduate, graduate and specialized degree programs in a wide range of academic disciplines that provide attractive employment prospects. Laureate believes that when our students succeed, countries prosper and societies benefit. This belief is expressed through the companys philosophy of being Here for Good and is represented by its status as a certified B Corporation® and conversion in 2015 to a Delaware public benefit corporation, a new class of corporation committed to creating a positive impact on society.
Key Metrics and Financial Tables
(Dollars in millions, except per share amounts, and may not sum due to rounding)
New and Total Enrollments by segment
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New Enrollments |
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Total Enrollments |
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YTD 3Q |
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YTD 3Q |
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Change |
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As of |
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As of |
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Change |
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2017 |
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2016 |
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Total |
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Organic |
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9/30/2017 |
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9/30/2016 |
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Total |
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Organic |
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Brazil |
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143,700 |
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129,600 |
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11 |
% |
11 |
% |
275,000 |
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262,100 |
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5 |
% |
5 |
% |
Mexico |
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105,800 |
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105,800 |
|
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% |
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% |
212,300 |
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212,500 |
|
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% |
|
% |
Andean & Iberian |
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121,900 |
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121,800 |
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% |
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% |
329,800 |
|
314,600 |
|
5 |
% |
5 |
% |
Central America & U.S. Campuses |
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40,800 |
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39,200 |
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4 |
% |
4 |
% |
71,000 |
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69,200 |
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3 |
% |
3 |
% |
EMEAA (1) |
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42,400 |
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42,300 |
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% |
2 |
% |
126,900 |
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119,200 |
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6 |
% |
6 |
% |
Online & Partnerships |
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27,700 |
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31,100 |
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(11 |
)% |
(11 |
)% |
64,700 |
|
69,800 |
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(7 |
)% |
(7 |
)% |
Laureate |
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482,300 |
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469,800 |
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3 |
% |
3 |
% |
1,079,700 |
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1,047,400 |
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3 |
% |
3 |
% |
(1) New enrollments affected by the sale of two business units in France and Switzerland (EMEAA segment) during 2016.
Consolidated Statements of Operations
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For the three months ended |
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For the nine months ended |
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September 30, |
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September 30, |
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IN MILLIONS |
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2017(2) |
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2016 |
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Change |
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2017(2) |
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2016 |
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Change |
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Revenues |
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$ |
983.4 |
|
$ |
929.9 |
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$ |
53.5 |
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$ |
3,116.8 |
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$ |
3,068.3 |
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$ |
48.5 |
|
Costs and expenses: |
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|
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Direct costs |
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924.1 |
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864.2 |
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59.9 |
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2,719.6 |
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2,697.8 |
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21.8 |
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General and administrative expenses |
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65.0 |
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53.2 |
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11.8 |
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221.9 |
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158.6 |
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63.3 |
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Operating (loss) income |
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(5.7 |
) |
12.5 |
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(18.2 |
) |
175.3 |
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211.9 |
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(36.6 |
) | ||||||
Interest income |
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5.8 |
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3.4 |
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2.4 |
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15.0 |
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13.3 |
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1.7 |
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Interest expense |
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(76.5 |
) |
(104.8 |
) |
28.3 |
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(278.0 |
) |
(314.4 |
) |
36.4 |
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Loss on debt extinguishment |
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(15.7 |
) |
15.7 |
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(8.4 |
) |
(17.4 |
) |
9.0 |
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Gain (loss) on derivatives |
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(19.9 |
) |
0.5 |
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(20.4 |
) |
19.2 |
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(8.2 |
) |
27.4 |
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Other (expense) income, net |
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(0.7 |
) |
0.4 |
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(1.1 |
) |
(0.7 |
) |
(1.0 |
) |
0.3 |
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Foreign currency exchange gain (loss), net |
|
7.3 |
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26.3 |
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(19.0 |
) |
(0.1 |
) |
80.3 |
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(80.4 |
) | ||||||
Gain (loss) on sales of subsidiaries, net |
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|
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155.2 |
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(155.2 |
) |
(0.2 |
) |
398.4 |
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(398.6 |
) | ||||||
(Loss) income from continuing operations before income taxes and equity in net income of affiliates |
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(89.6 |
) |
77.8 |
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(167.4 |
) |
(78.0 |
) |
362.9 |
|
(440.9 |
) | ||||||
Income tax (expense) benefit |
|
(13.9 |
) |
3.1 |
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(17.0 |
) |
(28.8 |
) |
(35.2 |
) |
6.4 |
| ||||||
Equity in net income of affiliates, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net (loss) income |
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(103.5 |
) |
80.9 |
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(184.4 |
) |
(106.7 |
) |
327.7 |
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(434.4 |
) | ||||||
Net loss attributable to noncontrolling interests |
|
5.5 |
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5.4 |
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0.1 |
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2.4 |
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2.8 |
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(0.4 |
) | ||||||
Net (loss) income attributable to Laureate Education, Inc. |
|
$ |
(98.0 |
) |
$ |
86.3 |
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$ |
(184.3 |
) |
$ |
(104.4 |
) |
$ |
330.5 |
|
$ |
(434.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity |
|
$ |
(84.1 |
) |
$ |
2.2 |
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$ |
(86.3 |
) |
$ |
(192.1 |
) |
$ |
3.2 |
|
$ |
(195.3 |
) |
Net (loss) income available to common stockholders |
|
$ |
(182.0 |
) |
$ |
88.5 |
|
$ |
(270.5 |
) |
$ |
(296.5 |
) |
$ |
333.8 |
|
$ |
(630.3 |
) |
Basic and diluted (loss) earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Basic weighted average shares outstanding |
|
178,871 |
|
133,303 |
|
45,568 |
|
167,261 |
|
133,291 |
|
33,970 |
| ||||||
Dilutive weighted average shares outstanding |
|
178,871 |
|
134,229 |
|
44,642 |
|
167,261 |
|
134,217 |
|
33,044 |
| ||||||
Basic (loss) earnings per share |
|
$ |
(1.02 |
) |
$ |
0.66 |
|
$ |
(1.68 |
) |
$ |
(1.77 |
) |
$ |
2.50 |
|
$ |
(4.27 |
) |
Diluted (loss) earnings per share |
|
$ |
(1.02 |
) |
$ |
0.66 |
|
$ |
(1.68 |
) |
$ |
(1.77 |
) |
$ |
2.49 |
|
$ |
(4.26 |
) |
(2) Financial results for 2017 as compared to 2016 were affected by the sale of two business units in France (EMEAA segment) and Switzerland (GPS segment) during 2016.
Revenue and Adjusted EBITDA by segment
IN MILLIONS
|
|
|
|
|
|
% Change |
|
$ Variance Components |
| |||||||||||||||||
For the quarter ended |
|
2017 |
|
2016 |
|
Reported |
|
Organic |
|
Total |
|
Organic |
|
One- |
|
Acq/ |
|
FX |
| |||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Brazil |
|
$ |
170.5 |
|
$ |
152.8 |
|
12 |
% |
8 |
% |
$ |
17.7 |
|
$ |
12.7 |
|
$ |
|
|
$ |
|
|
$ |
5.0 |
|
Mexico |
|
141.2 |
|
140.4 |
|
1 |
% |
(5 |
)% |
0.8 |
|
(6.4 |
) |
|
|
|
|
7.2 |
| |||||||
Andean & Iberian |
|
314.8 |
|
289.2 |
|
9 |
% |
5 |
% |
25.6 |
|
15.4 |
|
|
|
|
|
10.2 |
| |||||||
Central America & U.S. Campuses |
|
69.6 |
|
65.6 |
|
6 |
% |
8 |
% |
4.0 |
|
5.2 |
|
|
|
|
|
(1.2 |
) | |||||||
EMEAA |
|
126.4 |
|
117.0 |
|
8 |
% |
9 |
% |
9.4 |
|
10.3 |
|
|
|
(2.4 |
) |
1.5 |
| |||||||
Online & Partnerships |
|
168.4 |
|
173.3 |
|
(3 |
)% |
(3 |
)% |
(4.9 |
) |
(5.5 |
) |
|
|
|
|
0.6 |
| |||||||
Corporate & Eliminations |
|
(7.4 |
) |
(8.4 |
) |
12 |
% |
12 |
% |
1.0 |
|
1.0 |
|
|
|
|
|
|
| |||||||
Total Revenues |
|
$ |
983.4 |
|
$ |
929.9 |
|
6 |
% |
4 |
% |
$ |
53.5 |
|
$ |
32.6 |
|
$ |
|
|
$ |
(2.4 |
) |
$ |
23.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Brazil |
|
$ |
9.1 |
|
$ |
11.9 |
|
(24 |
)% |
(32 |
)% |
$ |
(2.8 |
) |
$ |
(3.8 |
) |
$ |
|
|
$ |
|
|
$ |
1.0 |
|
Mexico |
|
6.5 |
|
24.8 |
|
(74 |
)% |
(77 |
)% |
(18.3 |
) |
(19.0 |
) |
|
|
|
|
0.7 |
| |||||||
Andean & Iberian |
|
75.0 |
|
64.0 |
|
17 |
% |
13 |
% |
11.0 |
|
8.4 |
|
|
|
|
|
2.6 |
| |||||||
Central America & U.S. Campuses |
|
9.7 |
|
7.5 |
|
29 |
% |
32 |
% |
2.2 |
|
2.4 |
|
|
|
|
|
(0.2 |
) | |||||||
EMEAA |
|
(13.7 |
) |
(24.4 |
) |
44 |
% |
32 |
% |
10.7 |
|
7.1 |
|
|
|
2.4 |
|
1.2 |
| |||||||
Online & Partnerships |
|
42.9 |
|
51.3 |
|
(16 |
)% |
(16 |
)% |
(8.4 |
) |
(8.3 |
) |
|
|
|
|
(0.1 |
) | |||||||
Corporate & Eliminations |
|
(43.0 |
) |
(36.4 |
) |
(18 |
)% |
(18 |
)% |
(6.6 |
) |
(6.6 |
) |
|
|
|
|
|
| |||||||
Total Adjusted EBITDA |
|
$ |
86.5 |
|
$ |
98.5 |
|
(12 |
)% |
(19 |
)% |
$ |
(12.0 |
) |
$ |
(19.6 |
) |
$ |
|
|
$ |
2.4 |
|
$ |
5.2 |
|
(3) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures. The Organic Constant Currency % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures.
Revenue and Adjusted EBITDA by segment
IN MILLIONS
|
|
|
|
|
|
% Change |
|
$ Variance Components |
| |||||||||||||||||
For the nine months |
|
2017 |
|
2016 |
|
Reported |
|
Organic |
|
Total |
|
Organic |
|
One- |
|
Acq/ |
|
FX |
| |||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Brazil |
|
$ |
548.0 |
|
$ |
479.6 |
|
14 |
% |
4 |
% |
$ |
68.4 |
|
$ |
18.9 |
|
$ |
|
|
$ |
|
|
$ |
49.5 |
|
Mexico |
|
452.0 |
|
455.1 |
|
(1 |
)% |
3 |
% |
(3.1 |
) |
13.0 |
|
|
|
|
|
(16.1 |
) | |||||||
Andean & Iberian |
|
930.3 |
|
835.5 |
|
11 |
% |
9 |
% |
94.8 |
|
77.3 |
|
|
|
|
|
17.5 |
| |||||||
Central America & U.S. Campuses |
|
219.1 |
|
207.1 |
|
6 |
% |
8 |
% |
12.0 |
|
16.3 |
|
|
|
|
|
(4.3 |
) | |||||||
EMEAA |
|
468.3 |
|
585.0 |
|
(20 |
)% |
9 |
% |
(116.7 |
) |
40.2 |
|
|
|
(141.9 |
) |
(15.0 |
) | |||||||
Online & Partnerships |
|
521.0 |
|
531.1 |
|
(2 |
)% |
(2 |
)% |
(10.1 |
) |
(9.8 |
) |
|
|
|
|
(0.3 |
) | |||||||
Corporate & Eliminations |
|
(21.9 |
) |
(25.1 |
) |
13 |
% |
13 |
% |
3.2 |
|
3.2 |
|
|
|
|
|
|
| |||||||
Total Revenues |
|
$ |
3,116.8 |
|
$ |
3,068.3 |
|
2 |
% |
5 |
% |
$ |
48.5 |
|
$ |
159.1 |
|
$ |
|
|
$ |
(141.9 |
) |
$ |
31.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Brazil |
|
$ |
61.3 |
|
$ |
63.2 |
|
(3 |
)% |
(4 |
)% |
$ |
(1.9 |
) |
$ |
(2.3 |
) |
$ |
|
|
$ |
|
|
$ |
0.4 |
|
Mexico |
|
78.6 |
|
89.3 |
|
(12 |
)% |
(7 |
)% |
(10.7 |
) |
(6.2 |
) |
|
|
|
|
(4.5 |
) | |||||||
Andean & Iberian |
|
240.3 |
|
179.8 |
|
34 |
% |
33 |
% |
60.5 |
|
60.1 |
|
|
|
|
|
0.4 |
| |||||||
Central America & U.S. Campuses |
|
38.5 |
|
31.7 |
|
21 |
% |
24 |
% |
6.8 |
|
7.5 |
|
|
|
|
|
(0.7 |
) | |||||||
EMEAA |
|
54.2 |
|
68.0 |
|
(20 |
)% |
46 |
% |
(13.8 |
) |
19.2 |
|
|
|
(26.6 |
) |
(6.4 |
) | |||||||
Online & Partnerships |
|
145.8 |
|
149.1 |
|
(2 |
)% |
(2 |
)% |
(3.3 |
) |
(3.3 |
) |
|
|
|
|
|
| |||||||
Corporate & Eliminations |
|
(141.6 |
) |
(100.3 |
) |
(41 |
)% |
(18 |
)% |
(41.3 |
) |
(18.5 |
) |
(22.8 |
) |
|
|
|
| |||||||
Total Adjusted EBITDA |
|
$ |
477.0 |
|
$ |
480.7 |
|
(1 |
)% |
12 |
% |
$ |
(3.7 |
) |
$ |
56.5 |
|
$ |
(22.8 |
) |
$ |
(26.6 |
) |
$ |
(10.8 |
) |
(3) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures. The Organic Constant Currency % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures and the one-time charge associated with our debt refinancing transactions in the second quarter of 2017.
Consolidated Balance Sheets
IN MILLIONS |
|
September 30, 2017 |
|
December 31, 2016 |
|
Change |
| |||
Assets |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
$ |
505.0 |
|
$ |
465.0 |
|
$ |
40.0 |
|
Receivables (current), net |
|
599.1 |
|
334.8 |
|
264.3 |
| |||
Other current assets |
|
363.6 |
|
316.0 |
|
47.6 |
| |||
Current assets held for sale |
|
92.2 |
|
|
|
92.2 |
| |||
Property and equipment, net |
|
2,030.2 |
|
2,151.6 |
|
(121.4 |
) | |||
Goodwill and other intangible assets |
|
3,401.8 |
|
3,288.8 |
|
113.0 |
| |||
Other long-term assets |
|
510.7 |
|
506.3 |
|
4.4 |
| |||
Long-term assets held for sale |
|
279.8 |
|
|
|
$ |
279.8 |
| ||
Total assets |
|
$ |
7,782.6 |
|
$ |
7,062.5 |
|
$ |
720.1 |
|
|
|
|
|
|
|
|
| |||
Liabilities and stockholders equity |
|
|
|
|
|
|
| |||
Accounts payable and accrued expenses |
|
$ |
700.1 |
|
$ |
695.2 |
|
$ |
4.9 |
|
Deferred revenue and student deposits |
|
729.9 |
|
362.9 |
|
367.0 |
| |||
Total long-term debt, including current portion |
|
3,210.4 |
|
3,808.4 |
|
(598.0 |
) | |||
Total due to shareholders of acquired companies, including current portion |
|
81.2 |
|
211.0 |
|
(129.8 |
) | |||
Other liabilities |
|
930.3 |
|
963.7 |
|
(33.4 |
) | |||
Current and long-term liabilities held for sale |
|
231.5 |
|
|
|
231.5 |
| |||
Total liabilities |
|
5,883.4 |
|
6,041.2 |
|
(157.8 |
) | |||
Convertible redeemable preferred stock |
|
302.7 |
|
333.0 |
|
(30.3 |
) | |||
Redeemable noncontrolling interests and equity |
|
14.2 |
|
23.9 |
|
(9.7 |
) | |||
Total stockholders equity |
|
1,582.2 |
|
664.4 |
|
917.8 |
| |||
Total liabilities and stockholders equity |
|
$ |
7,782.6 |
|
$ |
7,062.5 |
|
$ |
720.1 |
|
Consolidated Statements of Cash Flows
|
|
For the nine months ended September 30, |
| |||||||
IN MILLIONS |
|
2017 |
|
2016 |
|
Change |
| |||
Cash flows from operating activities |
|
|
|
|
|
|
| |||
Net (loss) income |
|
$ |
(106.7 |
) |
$ |
327.7 |
|
$ |
(434.4 |
) |
Depreciation and amortization |
|
199.4 |
|
202.7 |
|
(3.3 |
) | |||
Loss (gain) on sale of subsidiary and disposal of property and equipment |
|
3.1 |
|
(398.5 |
) |
401.6 |
| |||
(Gain) loss on derivative instruments |
|
(19.6 |
) |
7.2 |
|
(26.8 |
) | |||
Loss on debt extinguishment |
|
8.4 |
|
17.4 |
|
(9.0 |
) | |||
Payment of redemption and call premiums and fees on debt modification |
|
(65.2 |
) |
|
|
(65.2 |
) | |||
Interest paid on deferred purchase price for acquisitions |
|
(39.4 |
) |
|
|
(39.4 |
) | |||
Unrealized foreign currency exchange loss (gain) |
|
4.9 |
|
(73.6 |
) |
78.5 |
| |||
Income tax receivable/payable, net |
|
(19.8 |
) |
(23.6 |
) |
3.8 |
| |||
Working capital, excluding tax accounts |
|
33.6 |
|
(0.6 |
) |
34.2 |
| |||
Other non-cash adjustments |
|
146.3 |
|
137.2 |
|
9.1 |
| |||
Net cash provided by operating activities |
|
144.8 |
|
196.0 |
|
(51.2 |
) | |||
Cash flows from investing activities |
|
|
|
|
|
|
| |||
Purchase of property and equipment |
|
(134.6 |
) |
(132.9 |
) |
(1.7 |
) | |||
Expenditures for deferred costs |
|
(12.7 |
) |
(14.0 |
) |
1.3 |
| |||
Receipts from sale of subsidiary and property and equipment |
|
1.2 |
|
553.9 |
|
(552.7 |
) | |||
Investing other, net |
|
(4.0 |
) |
(14.7 |
) |
10.7 |
| |||
Net cash (used in) provided by investing activities |
|
(150.2 |
) |
392.3 |
|
(542.5 |
) | |||
Cash flows from financing activities |
|
|
|
|
|
|
| |||
(Decrease) increase in long-term debt, net |
|
(345.8 |
) |
(524.6 |
) |
178.8 |
| |||
Payments of deferred purchase price for acquisitions |
|
(93.8 |
) |
(9.6 |
) |
(84.2 |
) | |||
Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs |
|
55.3 |
|
|
|
55.3 |
| |||
Proceeds from initial public offering, net of issuance costs |
|
456.4 |
|
|
|
456.4 |
| |||
Payments of debt issuance costs |
|
(11.3 |
) |
(10.6 |
) |
(0.7 |
) | |||
Financing other, net |
|
(6.9 |
) |
(27.9 |
) |
21.0 |
| |||
Net cash provided by (used in) financing activities |
|
53.8 |
|
(572.7 |
) |
626.5 |
| |||
Effects of exchange rate changes on cash |
|
26.1 |
|
7.2 |
|
18.9 |
| |||
Change in cash included in current assets held for sale |
|
(34.5 |
) |
|
|
(34.5 |
) | |||
Net change in cash and cash equivalents |
|
40.0 |
|
22.8 |
|
17.2 |
| |||
Cash and cash equivalents at beginning of period |
|
465.0 |
|
458.7 |
|
6.3 |
| |||
Cash and cash equivalents at end of period |
|
$ |
505.0 |
|
$ |
481.5 |
|
$ |
23.5 |
|
Liquidity (including Undrawn Revolver) |
|
$ |
890.0 |
|
$ |
748.0 |
|
$ |
142.0 |
|
Non-GAAP Reconciliation
|
|
For the three months ended |
|
For the nine months ended |
| ||||||||||||||
|
|
September 30, |
|
September 30, |
| ||||||||||||||
IN MILLIONS |
|
2017 |
|
2016 |
|
Change |
|
2017 |
|
2016 |
|
Change |
| ||||||
Net (loss) income |
|
$ |
(103.5 |
) |
$ |
80.9 |
|
$ |
(184.4 |
) |
$ |
(106.7 |
) |
$ |
327.7 |
|
$ |
(434.4 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Equity in net income of affiliates, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Income tax expense (benefit) |
|
13.9 |
|
(3.1 |
) |
17.0 |
|
28.8 |
|
35.2 |
|
(6.4 |
) | ||||||
(Loss) income from continuing operations before income taxes and equity in net income of affiliates |
|
(89.6 |
) |
77.8 |
|
(167.4 |
) |
(78.0 |
) |
362.9 |
|
(440.9 |
) | ||||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(Gain) loss on sale of subsidiaries, net |
|
|
|
(155.2 |
) |
155.2 |
|
0.2 |
|
(398.4 |
) |
398.6 |
| ||||||
Foreign currency exchange (gain) loss, net |
|
(7.3 |
) |
(26.3 |
) |
19.0 |
|
0.1 |
|
(80.3 |
) |
80.4 |
| ||||||
Other expense (income), net |
|
0.7 |
|
(0.4 |
) |
1.1 |
|
0.7 |
|
1.0 |
|
(0.3 |
) | ||||||
Loss (gain) on derivatives |
|
19.9 |
|
(0.5 |
) |
20.4 |
|
(19.2 |
) |
8.2 |
|
(27.4 |
) | ||||||
Loss on debt extinguishment |
|
|
|
15.7 |
|
(15.7 |
) |
8.4 |
|
17.4 |
|
(9.0 |
) | ||||||
Interest expense |
|
76.5 |
|
104.8 |
|
(28.3 |
) |
278.0 |
|
314.4 |
|
(36.4 |
) | ||||||
Interest income |
|
(5.8 |
) |
(3.4 |
) |
(2.4 |
) |
(15.0 |
) |
(13.3 |
) |
(1.7 |
) | ||||||
Operating (loss) income |
|
(5.7 |
) |
12.5 |
|
(18.2 |
) |
175.3 |
|
211.9 |
|
(36.6 |
) | ||||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Depreciation and amortization |
|
67.9 |
|
66.8 |
|
1.1 |
|
199.4 |
|
202.7 |
|
(3.3 |
) | ||||||
EBITDA |
|
62.2 |
|
79.3 |
|
(17.1 |
) |
374.7 |
|
414.6 |
|
(39.9 |
) | ||||||
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Share-based compensation expense (4) |
|
8.6 |
|
8.0 |
|
0.6 |
|
44.0 |
|
28.9 |
|
15.1 |
| ||||||
Loss on impairment of assets |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
EiP implementation expenses (5) |
|
15.7 |
|
11.2 |
|
4.5 |
|
58.3 |
|
37.2 |
|
21.1 |
| ||||||
Adjusted EBITDA |
|
$ |
86.5 |
|
$ |
98.5 |
|
$ |
(12.0 |
) |
$ |
477.0 |
|
$ |
480.7 |
|
$ |
(3.7 |
) |
(4) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718.
(5) EiP implementation expenses are related to our enterprise-wide initiative to optimize and standardize our processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. The first wave of EiP, which began in 2014, is expected to be substantially completed by 2017 and includes the establishment of regional SSOs around the world, as well as improvements to our system of internal controls over financial reporting. Given the success of the first wave of EiP, we now anticipate expanding the initiative into other back- and mid-office areas in order to generate additional efficiencies and create a more efficient organizational structure. Also included in EiP are certain non-recurring costs incurred in connection with the planned dispositions.
Investor Relations Contact:
ir@laureate.net
Media Contacts:
Laureate Education |
|
Ruder Finn |
Esther Benjamin |
|
Maryam Ayromlou |
Esther.Benjamin@laureate.net |
|
ayromloum@ruderfinn.com |
U.S.: +1 (443) 301 3091 |
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U.S.: +1 (703) 474 5685 |
Source: Laureate Education, Inc. |
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Forward Looking Statements This presentation includes statements that express Laureate's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements" within the meaning of the federal securities laws, which involve risks and uncertainties. Laureates actual results may vary significantly from the results anticipated in these forward-looking statements. You can identify forward-looking statements because they contain words such as believes, expects, may, will, should, seeks, approxim ately, intends, plans, estimates or anticipates or similar expressions that concern our strategy, plans or intentions. All statements we make relating to gui dance, including total enrollments, estimated and projected Adjusted EBITDA and earnings, costs, expenditures (including capital expenditures), cash flows, growth rates, our hedging strategy, potential asset sales, currency rates and financial results 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 expecte d. 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 ou r 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 anticipa te all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations are disclosed in our Annual Repo rt on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on March 29, 2017, our Quarterly Report on Form 10-Q filed with the SEC on May 11, 2017, and on August 8, 2017, and our Quarterly Report on Form 10-Q to be filed with the SEC on the date of this presentation and other filings made with the SEC. These forward-looking statements speak only as of the time of this presentation and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law. In addition, this presentation contains various operating data, including mar ket share and market position, that are based on internal company data and management estimates. While management believes our internal company research is reliable and the definitions of our markets which are used herein are appropriate, neither such research nor these definitions have been verified by an independent sourc e and there are inherent challenges and limitations involved in compiling data across various geographies and from various sources, including those discussed under Market and Industry Data in Laureates filings with the SEC. Presentation of Non-GAAP Measures This presentation contains certain non-GAAP measures which are provided to assist in an understanding of the business and performance of Laureate Education Inc. These measures should always be considered in conjunction with the appropriate GAAP measure. Reconciliations of non -GAAP measures to the relevant GAAP measures are provided in our SEC filings. 2 © 2017 Laureate Education, Inc.
Q32017 PERFORMANCE HIGHLIGHTS 3 © 2017 Laureate Education, Inc.
Q3 and YTD Q3 2017 Financial Performance Highlights Adj. EBITDA $87M (19%) Organic constant currency growth (1) Adj. EBITDA $477M +12% Organic constant currency growth (1) Revenue $983M +4% Organic constant currency growth (1) Revenue $3,117M +5% Organic constant currency growth (1) (1) Excludes impacts from FX, 2016 Divestitures and one-time expense associated with the debt refinancing in Q2 2017 Note: For Adjusted EBITDA, please refer to the EBITDA reconciliation as shown on our Quarterly Report on Form 10-Q 4 © 2017 Laureate Education, Inc. Total Enrollment: 1,079,700 3% organic growth vs. Sep 30, 2016 New Enrollment: 482,300 3% organic growth vs. YTD Q3 2016 3rd Quarter 2017 YTD 2017
Q3 17 Revenue and Adjusted EBITDA by Segment Organic Constant Currency (1) B/(W) vs Q3'16 (USD millions) B/(W) vs Q3'16 Q3'17 Q3'16 $ % $ % Revenues Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Revenues 170.5 141.2 314.8 69.6 126.4 168.4 (7.4) 152.8 140.4 289.2 65.6 117.0 173.3 (8.4) 17.7 0.8 25.6 4.0 9.4 (4.9) 1.0 12% 1% 9% 6% 8% (3%) 12% 12.7 (6.4) 15.4 5.2 10.3 (5.5) 1.0 8% (5%) 5% 8% 9% (3%) 12% 983.4 929.9 53.5 6% 32.6 4% Adjusted EBITDA Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Adjusted EBITDA 9.1 6.5 75.0 9.7 (13.7) 42.9 (43.0) 11.9 24.8 64.0 7.5 (24.4) 51.3 (36.4) (2.8) (18.3) 11.0 2.2 10.7 (8.4) (6.6) (24%) (74%) 17% 29% 44% (16%) (18%) (3.8) (19.0) 8.4 2.4 7.1 (8.3) (6.6) (32%) (77%) 13% 32% 32% (16%) (18%) 86.5 98.5 (12.0) (12%) (19.6) (19%) (1) Excludes impacts from FX and 2016 Divestitures. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures. 5 © 2017 Laureate Education, Inc.
YTD Q3 17 Revenue and Adjusted EBITDA by Segment Organic Constant Currency (1) B/(W) vs YTD Q3'16 (USD millions) B/(W) vs YTD Q3'16 YTD Q3'17 YTD Q3'16 $ % $ % Revenues Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Revenues 548.0 452.0 930.3 219.1 468.3 521.0 (21.9) 479.6 455.1 835.5 207.1 585.0 531.1 (25.1) 68.4 (3.1) 94.8 12.0 (116.7) (10.1) 3.2 14% (1%) 11% 6% (20%) (2%) 13% 18.9 13.0 77.3 16.3 40.2 (9.8) 3.2 4% 3% 9% 8% 9% (2%) 13% 3,116.8 3,068.3 48.5 2% 159.1 5% Adjusted EBITDA Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Adjusted EBITDA 61.3 78.6 240.3 38.5 54.2 145.8 (141.6) 63.2 89.3 179.8 31.7 68.0 149.1 (100.3) (1.9) (10.7) 60.5 6.8 (13.8) (3.3) (41.3) (3%) (12%) 34% 21% (20%) (2%) (41%) (2.3) (6.2) 60.1 7.5 19.2 (3.3) (18.5) (4%) (7%) 33% 24% 46% (2%) (18%) 477.0 480.7 (3.7) (1%) 56.5 12% (1) Excludes impacts from FX, 2016 Divestitures and one-time expense associated with the debt refinancing in Q2 2017. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures and the one-time charge associated with the debt refinancing in Q2 2017. 6 © 2017 Laureate Education, Inc.
YTD Q3 2017 Enrollment by Segment New Enrollments for YTD Q3 2017 increased 3% and Total Enrollments increased 3% versus on an organic basis (excluding 2016 divestitures(1)) YTD Q3 2016 New Enrollments Total Enrollments As of 9/30/2017 As of 9/30/2016 YTD Q3 2017 YTD Q3 2016 B/(W) YoY B/(W) YoY Total Organic Total Organic Brazil 143,700 129,600 11% 11% 275,000 262,100 5% 5% Mexico 105,800 105,800 0% 0% 212,300 212,500 0% 0% Andean & Iberian 121,900 121,800 0% 0% 329,800 314,600 5% 5% Central America & U.S. Campuses 40,800 39,200 4% 4% 71,000 69,200 3% 3% EMEAA 42,400 42,300 0% 2% 126,900 119,200 6% 6% Online & Partnerships 27,700 31,100 (11%) (11%) 64,700 69,800 (7%) (7%) (1) The divestiture of our Swiss institutions was completed in June 2016, and in July 2016 we completed the divestiture of our French institutions 7 © 2017 Laureate Education, Inc. Laureate482,300469,8003%3%1,079,7001,047,4003%3%
SEGMENT RESULTS OVERVIEW 8 © 2017 Laureate Education, Inc.
Significant Timing Items Impacting Year-over-Year Comparability Timing adjusted results presented on the following segment pages include the following impacts: Mexico: Magnitude 7.1 earthquake struck on September 19th with its epicenter in Puebla, which heavily impacted Mexico City as well as 7 other Mexican states Delaying classes and shifting of Revenue from Q3 to Q4 2017, plus additional expenses for repairs Peru: Severe flooding hit Lima in March 2017 Shifting classes and Revenue from Q1 to Q3 2017 Chile: Student class disruptions in Q2 2016 Shifting Revenue from Q2 to Q3 & Q4 2016 (prior year) Total Timing Items (11.7) (18.0) 6.3 (11.7) (18.0) 6.3 Enrollment timing: Timing of summer intake in Walden shifted new enrollment activity from Q2 2016 to Q3 2017 (1,200 students); EMEAA shifted new enrollments intake of 1,600 students from Q4 in 2016 to Q3 in 2017 due to timing intake at one institution; see segment pages that follow for timing adjusted enrollment results © 2017 Laureate Education, Inc. 9 Favorable/(Unfavorable) (in USD millions)Q3 '17Q3 '16 $Q3 '17Q3 '16 $ 2017 Mexico Earthquake (Q3 shift to Q4 2017)(11.7)-(11.7)(11.7)-(11.7) 2016 Chile Class Disruption (Q2 2016 shift to Q3 & Q4 2016)-12.0(12.0)-12.0(12.0) 2017 Peru Floods (Q1 shift to Q3 2017) 11.9 - 11.9 11.9 - 11.9 Total Timing Items0.212.0(11.8)0.212.0(11.8) 2017 Mexico Earthquake (one-time repairs)---(2.7)-(2.7) (in USD millions)YTD Q3 '17YTD Q3 '16 $YTD Q3 '17YTD Q3 '16 $ 2017 Mexico Earthquake (Q3 shift to Q4 2017)(11.7)-(11.7)(11.7)-(11.7) 2016 Chile Class Disruption (Q2 2016 shift to Q3 & Q4 2016) - (18.0) 18.0 - (18.0) 18.0 2017 Mexico Earthquake (one-time repairs)---(2.7)-(2.7) YTD Q3 Q3 Adj. EBITDA Timing Items Revenue Timing Items
Segment Results Overview Total Company For Laureate, Q1 and Q3 represent our two largest intake periods, accounting for approximately 80% of total new enrollment activity for the year, but are seasonally low from a P&L perspective - Q3 new enrollments increased 4% vs. prior year Q3 On an organic constant currency(1) basis, Q3 17 Revenue increased $33M or 4% vs. prior year. Adjusted for $12M of net unfavorable timing impacts, Q3 17 Revenue increased 5% Shaded cells represents timing adjusted results Q3 17 Adjusted EBITDA decreased ($20M) or (19%) vs. prior year. Adjusted for $12M of unfavorable timing and $3M of expenses incurred related to the Mexico earthquake, Q3 17 Adjusted EBITDA decreased (5%) on an organic constant currency(1) basis during a seasonally low earnings quarter, mainly due to various expense timing items YTD Q3 17 results reflect solid performance - On an organic constant currency(1) basis, YTD Q3 17 Revenue increased $159M or 5% vs. prior year YTD Q3 17 Adjusted EBITDA increased $57M or 12% on an organic constant currency(1) basis. Earthquake in Mexico resulted in an estimated loss of 4,000 5,000 enrollments for 2H 2017 (1) Excludes impacts from FX, 2016 Divestitures and one-time expense associated with the debt refinancing in Q2 2017 10 © 2017 Laureate Education, Inc. New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 +4% +3% +5% (5%) YTD Q3 +3% +3% +5% 12% Organic (1) Y-o-Y Results (Timing Adjusted) New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 +4% +3% +4% (19%) YTD Q3 +3% +3% +5% 12% Organic (1) Y-o-Y Results
Segment Results Overview Brazil Third quarter results reflect strong secondary intake (especially in distance learning DL) with some timing impacting Revenue and Adjusted EBITDA in a seasonally low quarter - EBITDA Q3 new enrollments increased 22% vs. prior year; +12% in face-to-face and +90% in DL (1) On an organic constant currencybasis, Q3 17 Revenue increased $13M or 8% vs. prior year Q3 17 Adjusted EBITDA decreased ($4M) or (32%) vs. prior year, due to timing impacts and seasonality YTD Q3 17 results reflect strong performance in enrollments with mix impacting growth in revenue per student - On an organic constant currency(1) basis, YTD Q3 17 Revenue increased $19M or 4% vs. prior year YTD Q3 17 Adjusted EBITDA decreased ($2M) or (4%) vs. prior year on an organic constant currency(1) basis, skewed by some timing impacts as well as additional marketing expenses that helped drive the strong secondary intake; we expect to see growth in margins and EBITDA following the revenue performance trends to-date, as that market is performing well for us (1) Excludes impact from FX 11 © 2017 Laureate Education, Inc. Porto Alegre Porto Alegre São Paulo Rio de Janeiro São Paulo João Pessoa Jaboatão dos Guararapes Salvador São Paulo Manaus Natal / Mossoró New Enroll. Total Enroll. Rev. Adj. Q3 +22% +5% +8% (32%) YTD Q3 +11% +5% +4% (4%) Organic (1) Y-o-Y Results
Segment Results Overview Mexico Mexico results were impacted by the September 19 earthquake th - Earthquake shifted revenues and classes from Q3 2017 to Q4 2017, and resulted in an estimated loss of 4,000 5,000 total enrollments for 2H 2017 Q3 new enrollment intake decreased (4%) vs. prior year Q3, impacted by the earthquake and low consumer sentiment Shaded cells represents timing adjusted results On an organic constant currency(1) basis, Q3 17 Revenue decreased ($6M) or (5%). Adjusted for $12M in unfavorable revenue timing, Q3 17 revenue increased 4% during a largely out-of-session quarter Q3 17 Adjusted EBITDA decreased ($19M) or (77%), on an organic constant currency(1) basis. Adjusted for $12M of unfavorable timing and $3M of expenses incurred related to the earthquake, Q3 17 Adjusted EBITDA decreased (19%) in a seasonally weak quarter YTD Q3 17 results reflect the impact from the earthquake as well as continued fatigue in consumer sentiment in Mexico - On an organic constant currency(1) basis, YTD Q3 17 Revenue increased $13M or 3%. Adjusted for $12M of unfavorable revenue, Revenue increase 5% YTD Q3 17 Adjusted EBITDA decreased ($6M) or (7%) on an organic constant currency(1) basis. Adjusted for $12M of unfavorable timing and $3M of expenses incurred related to the earthquake, YTD Q3 17 Adjusted EBITDA increased 9% (1) Excludes impact from FX 12 © 2017 Laureate Education, Inc. National Presence Mainly in Mexico City New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 (4%) 0% +4% (19%) YTD Q3 +0% 0% +5% +9% Organic (1) Y-o-Y Results (Timing Adjusted) New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 (4%) 0% (5%) (77%) YTD Q3 +0% 0% +3% (7%) Organic (1) Y-o-Y Results
Segment Results Overview Andean & Iberian Third quarter results reflect solid trends in all markets except Chile, which was impacted by the 2016 regulatory changes - Q3 new enrollment intake increased 4% vs. prior year On an organic constant currency(1) basis, Q3 17 Revenue increased $15M or 5% vs. prior year Shaded cells represents timing adjusted results Q3 17 Adjusted EBITDA increased $8M or 13% on an organic constant currency(1) basis vs. prior year YTD Q3 17 comparability impacted by the timing of 2016 Chile class disruption - YTD Q3 new enrollment intake was essentially flat vs. prior year. Excluding Chile, YTD Q3 new enrollment for the other markets was up 4% On an organic constant currency(1) basis, YTD Q3 17 Revenue increased $77M or 9%. Adjusted for ($18M) of 2016 Chile class disruption timing, Revenue increased 7% YTD Q3 17 Adjusted EBITDA increased $60M or 33% on an organic constant currency(1) basis. Adjusted for the 2016 Chile class disruption timing, YTD Q3 17 Adjusted EBITDA increased 23% Trujillo and Arequipa (1) Excludes impact from FX 13 © 2017 Laureate Education, Inc. Presence in Lima, National Presence National Presence Viña del Mar National Presence Presence in Lima Presence in Lima, Trujillo and Cajamarca New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 +4% +5% +5% +13% YTD Q3 0% +5% +7% +23% Organic (1) Y-o-Y Results (Timing Adjusted) New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 +4% +5% +5% +13% YTD Q3 0% +5% +9% +33% Organic (1) Y-o-Y Results
(1) Segment Results Overview Central America & U.S. Campuses Low single digit enrollment growth driving mid-high single digit revenue growth, with faster growth in higher price point markets. Margins have improved through scaling of smaller assets in the segment - EBITDA Q3 new enrollment increased 3% vs. prior year Q3 On an organic constant currency(2) basis, Q3 17 Revenue increased $5M or 8% vs. prior year Q3 17 Adjusted EBITDA increased $2M or 32% vs. prior year, on an organic constant currency(2) basis YTD Q3 17 results in line with quarter performance - On an organic constant currency(2) basis, YTD Q3 17 Revenue increased $16M or 8% vs. prior year YTD Q3 17 Adjusted EBITDA increased $8M or 24% vs. prior year on an organic constant currency(2) basis (1) Includes Kendall College and NewSchool of Architecture & Design (not shown in map) (2) Excludes impact from FX 14 © 2017 Laureate Education, Inc. New Enroll. Total Enroll. Rev. Adj. Q3 +3% +3% +8% 32% YTD Q3 +4% +3% +8% 24% Organic (2) Y-o-Y Results
Segment Results Overview EMEAA EBITDA Q3 financial results remain strong - Q3 new enrollment intake increased 7% vs. prior year impacted by timing. Adjusted for timing, new enrollments would be flat year over year, consistent with prior quarters and the continued planned strategic shift to longer length of stay and more profitable programs in certain markets Shaded cells represents timing adjusted results On an organic constant currency(1) basis, Q3 17 Revenue increased $10M or 9% vs. prior year Q3 17 Adjusted EBITDA increased $7M or 32% on an organic constant currency(1) basis vs. prior year YTD results reflect strong revenue performance and margin expansion - On an organic constant currency(1) basis, YTD Q3 17 Revenue increased $40M or 9% vs. prior year YTD Q3 17 Adjusted EBITDA increased $19M or 46% on an organic constant currency(1) basis vs. prior year due to robust margin expansion and favorable expense timing items (1) Excludes impacts from FX and 2016 Divestitures. 15 © 2017 Laureate Education, Inc. leges of Excellence Col New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 0% +6% +9% 32% YTD Q3 (1%) +6% +9% 46% Organic (1) Y-o-Y Results (Timing Adjusted) New Enroll. Total Enroll. Rev. Adj. Q3 +7% +6% +9% 32% YTD Q3 +2% +6% +9% 46% Organic (1) Y-o-Y Results
Segment Results Overview Online & Partnerships Third quarter results were significantly unfavorably impacted by the decision to focus on marketing efficiency versus volume, causing us to have insufficient leads for our Walden brand. We also continued our planned discontinuation of certain lower margin programs to rebalance student enrollments to longer length of stay with higher contribution margins - Shaded cells represents timing adjusted results Q3 new enrollment decreased (22%) adjusted for the timing shift in the intake at Walden from Q2 to Q3 2017 Q3 17 Revenue decreased ($6M) or (3%) and Q3 17 Adjusted EBITDA decreased ($8M) or (16%) on an organic constant currencybasis, primarily due to reduced volumes (1) YTD Q3 17 results reflect better pricing and cost controls - YTD Q3 new enrollment decreased (11%) and total enrollment decreased (7%) On an organic constant currency(1) basis, YTD Q3 17 Revenue decreased ($10M) or (2%) vs. prior year YTD Q3 17 Adjusted EBITDA decreased only ($3M) or (2%) on an organic constant currency(1) basis, due to tight expense management (1) Excludes impact from FX (2) University of Miami is not consolidated; partnership model 16 © 2017 Laureate Education, Inc. (2) New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 (22%) (7%) (3%) (16%) YTD Q3 (11%) (7%) (2%) (2%) Organic (1) Y-o-Y Results (Timing Adjusted) New Enroll. Total Enroll. Rev. Adj. EBITDA Q3 (13%) (7%) (3%) (16%) YTD Q3 (11%) (7%) (2%) (2%) Organic (1) Y-o-Y Results
2017 OUTLOOK 17 © 2017 Laureate Education, Inc.
FY 2017 Updated Guidance earthquake (estimated loss of 4,000-5,000 students) and weak performance in our domestic online business Total Enrollments: lowering range to 1.5% - 2.0% organic growth to 1,059,000 to 1,064,000 total enrollments due to Mexico Revenue: narrowing guidance to 5.0% growth on an organic constant currency basis Adjusted EBITDA: maintaining range of 8.5% - 9.5% growth on an organic constant currency basis; plus incremental uplift from accelerator plan FX: recent strengthening of US dollar versus key currencies in high earnings quarter results in slight FX deterioration Capex: reducing range to 6.0% - 7.0% of organic constant currency revenue, due primarily to timing shift to 2018 Revenue Adjusted EBITDA ($ millions, rounded) (1) Represents the contribution from France and Switzerland to Revenue and Adjusted EBITDA during 2016 (2) Based on actual FX rates for Jan Oct 2017, and current spot FX rates (local currency per U.S. dollar) of MXN 19.02, BRL 3.27, CLP 631.00, PEN 3.63, EUR 0.86 for Nov Dec 2017. FX impact may change based on fluctuations in currency rates in future periods Note: An outlook for 2017 net income and reconciliation of the forward-looking 2017 Adjusted EBITDA outlook to net income are not being provided as the company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. 18 © 2017 Laureate Education, Inc. Prior Guidance Revised Guidance Prior Guidance Revised Guidance 2016 Reported Results$4,244 $4,244 $766 $766 2016 Asset Dispositions (1) ($142) PF 2016 Baseline$4,102 2017 Forecasted Constant Currency Growth$205 - $246 % organic constant currency growth5.0% - 6.0% FX Impact y-o-y (2) $38 Accelerator Plan-($142) $4,102 $38 - ($27) $739 $63 - $70 8.5% - 9.5% ($3) $10 -$12 ($27) $739 $63 - $70 8.5% - 9.5% $10 -$12 2017 Guidance @spot FX (ex-Debt Refi charges)$4,345 - $4,386 $4,345 $809 - $818 $803 - $812 Debt Refinancing Cost (One-time)-- ($23) ($23) 2017 Expected Reported$4,345 - $4,386 $4,345 $786 - $795 $780 - $789 ($9) $205 5.0%
Q4 2017 Guidance Revenue Adjusted EBITDA ($ millions, rounded) 4Q 2017 Forecasted Constant Currency Growth including Accelerator Plan $45 $16 - $25 FX Impact y-o-y (1) $7 $2 (1) Based on current spot FX rates (local currency per U.S. dollar) of MXN 19.02, BRL 3.27, CLP 631.00, PEN 3.63, EUR 0.86 for Nov Dec 2017. FX impact may change based on fluctuations in currency rates in future periods Note: An outlook for 2017 net income and reconciliation of the forward-looking 2017 Adjusted EBITDA outlook to net income are not being provided as the company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlook and reconciliation. 19 © 2017 Laureate Education, Inc. 4Q 2017 Guidance @spot FX $1,228 $303 - $312 4Q 2016 Reported Results $1,176 $285
OTHER UPDATES 20 © 2017 Laureate Education, Inc.
Share Count and Capital Structure For Q4 2017, assuming no conversion of the Series A Preferred - - Basic shares: 187.3M - Series A Preferred charge to EPS: ($107M) Expected issuance of up to 36M shares related to the Series A Preferred when converted to common stock - Following the refinancing of the Corporate debt in April of this year, the Company is actively engaged in a hedging strategy to better match its currencies of debt liabilities and cash flow producing markets - The Company is continuing to make progress on its project to swap US Dollar denominated debt into local currency debt either through local borrowing used to repay US debt, or through synthetic hedging instruments - Term sheets have been agreed to in multiple markets and we anticipate completion of a significant portion of the project before year-end - 21 © 2017 Laureate Education, Inc. Capital Structure Update Share Count & Beneficial Conversion Reminder
APPENDIX 22 © 2017 Laureate Education, Inc.
Seasonality: Main Enrollment Intakes Q1 and Q3 are peak intake quarters, but seasonally weak earnings quarters as institutions are largely out of session during the summer season Q1 represents the large intake for our Southern Hemisphere institutions (Brazil, Andean & Iberian) Q3 represents the large intake for our Northern Hemisphere institutions (Mexico, CentAm &US Campus Based, EMEAA, Online & Partnerships) 23 © 2017 Laureate Education, Inc.
Intra-Year Seasonality Trends Large intake cycles at end of Q1 (Southern Hemisphere) and end of Q3 (Northern Hemisphere) drive seasonality of earnings (Q2 and Q4 are our strongest earnings quarters) Academic Calendar Academic Calendar 46% 46% 29% 30% 29% 28% 30% 29% 42% 42% 42% 40% 28% 27% 37% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2013 2014 2015 2016 Factors Affecting Seasonality 47% 45% 45% Intake cycles - 43% 36% 37% 35% 35% Q1 Southern Hemisphere Q3 Northern Hemisphere 7% 7% Academic calendar 6% 7% - FX trends - Q1 Q2 Q3 Q4 2013 2014 2015 2016 24 © 2017 Laureate Education, Inc. 12% 14% 11% 12% New Enrollments Seasonality 23% 20% 20% 21% 21% 22% 22%22% 7% 10% 17% 13% 4% 5% 32% 9% 9% Adj. EBITDA Seasonality Revenue Seasonality
Financial Tables Consolidated Statements of Operations For the three months ended For the nine months ended September 30, September 30, IN MILLIONS 2017(2) 2016 Change 2017(2) 2016 Change Revenues $983.4 $929.9 $53.5 $3,116.8 $3,068.3 $48.5 Costs and expenses: Direct costs 924.1 864.2 59.9 2,719.6 2,697.8 21.8 General and administrative expenses 65.0 53.2 11.8 221.9 158.6 63.3 Operating (loss) income (5.7) 12.5 (18.2) 175.3 211.9 (36.6) Interest income 5.8 3.4 2.4 15.0 13.3 1.7 Interest expense (76.5) (104.8) 28.3 (278.0) (314.4) 36.4 Loss on debt extinguishment (15.7) 15.7 (8.4) (17.4) 9.0 Gain (loss) on derivatives (19.9) 0.5 (20.4) 19.2 (8.2) 27.4 Other (expense) income, net (0.7) 0.4 (1.1) (0.7) (1.0) 0.3 Foreign currency exchange gain (loss), net 7.3 26.3 (19.0) (0.1) 80.3 (80.4) Gain (loss) on sales of subsidiaries, net 155.2 (155.2) (0.2) 398.4 (398.6) (Loss) income from continuing operations before income taxes and equity in net income of affiliates (89.6) 77.8 (167.4) (78.0) 362.9 (440.9) Income tax (expense) benefit (13.9) 3.1 (17.0) (28.8) (35.2) 6.4 Equity in net income of affiliates, net of tax Net (loss) income (103.5) 80.9 (184.4) (106.7) 327.7 (434.4) Net loss attributable to noncontrolling interests 5.5 5.4 0.1 2.4 2.8 (0.4) Net (loss) income attributable to Laureate Education, Inc. $(98.0) $86.3 $(184.3) $(104.4) $330.5 $(434.9) Accretion of Series A convertible redeemable preferred stock and other redeemable noncontrolling interests and equity $(84.1) $2.2 $(86.3) $(192.1) $3.2 $(195.3) Net (loss) income available to common stockholders $(182.0) $88.5 $(270.5) $(296.5) $333.8 $(630.3) Basic and diluted (loss) earnings per share: Basic weighted average shares outstanding 178,871 133,303 45,568 167,261 133,291 33,970 Dilutive weighted average shares outstanding 178,871 134,229 44,642 167,261 134,217 33,044 Basic (loss) earnings per share $(1.02) $0.66 $(1.68) $(1.77) $2.50 $(4.27) Diluted (loss) earnings per share $(1.02) $0.66 $(1.68) $(1.77) $2.49 $(4.26) (2) Financial results for 2017 as compared to 2016 were affected by the sale of two business units in France (EMEAA segment) and Switzerland (GPS segment) during 2016.
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components For the quarter ended September 30, 2017 2016 Reported Organic Constant
Currency(3) Total Organic Constant
Currency One-time items Acq/Div. FX Revenues Brazil $170.5 $152.8 12% 8% $17.7 $12.7 $ $ $5.0 Mexico 141.2 140.4 1% (5)% 0.8 (6.4) 7.2 Andean & Iberian 314.8 289.2 9% 5% 25.6 15.4 10.2 Central America & U.S. Campuses 69.6 65.6 6% 8% 4.0 5.2 (1.2) EMEAA 126.4 117.0 8% 9% 9.4 10.3 (2.4) 1.5 Online & Partnerships 168.4 173.3 (3)% (3)% (4.9) (5.5) 0.6 Corporate & Eliminations (7.4) (8.4) 12% 12% 1.0 1.0 Total Revenues $983.4 $929.9 6% 4% $53.5 $32.6 $ $(2.4) $23.3 Adjusted EBITDA Brazil $9.1 $11.9 (24)% (32)% $(2.8) $(3.8) $ $ $1.0 Mexico 6.5 24.8 (74)% (77)% (18.3) (19.0) 0.7 Andean & Iberian 75.0 64.0 17% 13% 11.0 8.4 2.6 Central America & U.S. Campuses 9.7 7.5 29% 32% 2.2 2.4 (0.2) EMEAA (13.7) (24.4) 44% 32% 10.7 7.1 2.4 1.2 Online & Partnerships 42.9 51.3 (16)% (16)% (8.4) (8.3) (0.1) Corporate & Eliminations (43.0) (36.4) (18)% (18)% (6.6) (6.6) Total Adjusted EBITDA $86.5 $98.5 (12)% (19)% $(12.0) $(19.6) $ $2.4 $5.2 (3) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures.
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components For the nine months ended September 30, 2017 2016 Reported Organic Constant
Currency(3) Total Organic Constant
Currency One-time items Acq/Div. FX Revenues Brazil $548.0 $479.6 14% 4% $68.4 $18.9 $ $ $49.5 Mexico 452.0 455.1 (1)% 3% (3.1) 13.0 (16.1) Andean & Iberian 930.3 835.5 11% 9% 94.8 77.3 17.5 Central America & U.S. Campuses 219.1 207.1 6% 8% 12.0 16.3 (4.3) EMEAA 468.3 585.0 (20)% 9% (116.7) 40.2 (141.9) (15.0) Online & Partnerships 521.0 531.1 (2)% (2)% (10.1) (9.8) (0.3) Corporate & Eliminations (21.9) (25.1) 13% 13% 3.2 3.2 Total Revenues $3,116.8 $3,068.3 2% 5% $48.5 $159.1 $ $(141.9) $31.3 Adjusted EBITDA Brazil $61.3 $63.2 (3)% (4)% $(1.9) $(2.3) $ $ $0.4 Mexico 78.6 89.3 (12)% (7)% (10.7) (6.2) (4.5) Andean & Iberian 240.3 179.8 34% 33% 60.5 60.1 0.4 Central America & U.S. Campuses 38.5 31.7 21% 24% 6.8 7.5 (0.7) EMEAA 54.2 68.0 (20)% 46% (13.8) 19.2 (26.6) (6.4) Online & Partnerships 145.8 149.1 (2)% (2)% (3.3) (3.3) Corporate & Eliminations (141.6) (100.3) (41)% (18)% (41.3) (18.5) (22.8) Total Adjusted EBITDA $477.0 $480.7 (1)% 12% $(3.7) $56.5 $(22.8) $(26.6) $(10.8) (3) Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures. The "Organic Constant Currency" % changes are calculated by dividing the Organic Constant Currency amounts by the 2016 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures and the one-time charge associated with our debt refinancing transactions in the second quarter of 2017.
Financial Tables Consolidated Balance Sheets IN MILLIONS September 30, 2017 December 31, 2016 Change Assets Cash and cash equivalents $505.0 $465.0 $40.0 Receivables (current), net 599.1 334.8 264.3 Other current assets 363.6 316.0 47.6 Current assets held for sale 92.2 92.2 Property and equipment, net 2,030.2 2,151.6 (121.4) Goodwill and other intangible assets 3,401.8 3,288.8 113.0 Other long-term assets 510.7 506.3 4.4 Long-term assets held for sale 279.8 $279.8 Total assets $7,782.6 $7,062.5 $720.1 Liabilities and stockholders' equity Accounts payable and accrued expenses $700.1 $695.2 $4.9 Deferred revenue and student deposits 729.9 362.9 367.0 Total long-term debt, including current portion 3,210.4 3,808.4 (598.0) Total due to shareholders of acquired companies, including current portion 81.2 211.0 (129.8) Other liabilities 930.3 963.7 (33.4) Current and long-term liabilities held for sale 231.5 231.5 Total liabilities 5,883.4 6,041.2 (157.8) Convertible redeemable preferred stock 302.7 333.0 (30.3) Redeemable noncontrolling interests and equity 14.2 23.9 (9.7) Total stockholders' equity 1,582.2 664.4 917.8 Total liabilities and stockholders' equity $7,782.6 $7,062.5 $720.1
Financial Tables Consolidated Statements of Cash Flows For the nine months ended September 30, IN MILLIONS 2017 2016 Change Cash flows from operating activities Net (loss) income $(106.7) $327.7 $(434.4) Depreciation and amortization 199.4 202.7 (3.3) Loss (gain) on sale of subsidiary and disposal of property and equipment 3.1 (398.5) 401.6 (Gain) loss on derivative instruments (19.6) 7.2 (26.8) Loss on debt extinguishment 8.4 17.4 (9.0) Payment of redemption and call premiums and fees on debt modification (65.2) (65.2) Interest paid on deferred purchase price for acquisitions (39.4) (39.4) Unrealized foreign currency exchange loss (gain) 4.9 (73.6) 78.5 Income tax receivable/payable, net (19.8) (23.6) 3.8 Working capital, excluding tax accounts 33.6 (0.6) 34.2 Other non-cash adjustments 146.3 137.2 9.1 Net cash provided by operating activities 144.8 196.0 (51.2) Cash flows from investing activities Purchase of property and equipment (134.6) (132.9) (1.7) Expenditures for deferred costs (12.7) (14.0) 1.3 Receipts from sale of subsidiary and property and equipment 1.2 553.9 (552.7) Investing other, net (4.0) (14.7) 10.7 Net cash (used in) provided by investing activities (150.2) 392.3 (542.5) Cash flows from financing activities (Decrease) increase in long-term debt, net (345.8) (524.6) 178.8 Payments of deferred purchase price for acquisitions (93.8) (9.6) (84.2) Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs 55.3 55.3 Proceeds from initial public offering, net of issuance costs 456.4 456.4 Payments of debt issuance costs (11.3) (10.6) (0.7) Financing other, net (6.9) (27.9) 21.0 Net cash provided by (used in) financing activities 53.8 (572.7) 626.5 Effects of exchange rate changes on cash 26.1 7.2 18.9 Change in cash included in current assets held for sale (34.5) (34.5) Net change in cash and cash equivalents 40.0 22.8 17.2 Cash and cash equivalents at beginning of period 465.0 458.7 6.3 Cash and cash equivalents at end of period $505.0 $481.5 $23.5 Liquidity (including Undrawn Revolver) $890.0 $748.0 $142.0
Financial Tables Non-GAAP Reconciliation For the three months ended For the nine months ended September 30, September 30, IN MILLIONS 2017 2016 Change 2017 2016 Change Net (loss) income $(103.5) $80.9 $(184.4) $(106.7) $327.7 $(434.4) Plus: Equity in net income of affiliates, net of tax Income tax expense (benefit) 13.9 (3.1) 17.0 28.8 35.2 (6.4) (Loss) income from continuing operations before income taxes and equity in net income of affiliates (89.6) 77.8 (167.4) (78.0) 362.9 (440.9) Plus: (Gain) loss on sale of subsidiaries, net (155.2) 155.2 0.2 (398.4) 398.6 Foreign currency exchange (gain) loss, net (7.3) (26.3) 19.0 0.1 (80.3) 80.4 Other expense (income), net 0.7 (0.4) 1.1 0.7 1.0 (0.3) Loss (gain) on derivatives 19.9 (0.5) 20.4 (19.2) 8.2 (27.4) Loss on debt extinguishment 15.7 (15.7) 8.4 17.4 (9.0) Interest expense 76.5 104.8 (28.3) 278.0 314.4 (36.4) Interest income (5.8) (3.4) (2.4) (15.0) (13.3) (1.7) Operating (loss) income (5.7) 12.5 (18.2) 175.3 211.9 (36.6) Plus: Depreciation and amortization 67.9 66.8 1.1 199.4 202.7 (3.3) EBITDA 62.2 79.3 (17.1) 374.7 414.6 (39.9) Plus: Share-based compensation expense (4) 8.6 8.0 0.6 44.0 28.9 15.1 Loss on impairment of assets EiP implementation expenses (5) 15.7 11.2 4.5 58.3 37.2 21.1 Adjusted EBITDA $86.5 $98.5 $(12.0) $477.0 $480.7 $(3.7) (4) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718. (5) EiP implementation expenses are related to our enterprise-wide initiative to optimize and standardize our processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. The first wave of EiP, which began in 2014, is expected to be substantially completed by 2017 and includes the establishment of regional SSOs around the world, as well as improvements to our system of internal controls over financial reporting. Given the success of the first wave of EiP, we now anticipate expanding the initiative into other back- and mid-office areas in order to generate additional efficiencies and create a more efficient organizational structure. Also included in EiP are certain non-recurring costs incurred in connection with the planned dispositions.
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