Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Contingencies

Laureate is subject to legal actions arising in the ordinary course of its business. In management's opinion, we have adequate legal defenses, insurance coverage and/or accrued liabilities with respect to the eventuality of such actions. We do not believe that any settlement would have a material impact on our Consolidated Financial Statements.

Income Tax Contingencies

As of December 31, 2022 and 2021, Laureate has recorded cumulative liabilities for income tax contingencies of $130,323 and $91,585, respectively.

Non-Income Tax Loss Contingencies

Laureate has accrued liabilities for certain civil actions against our institutions, a portion of which existed prior to our acquisition of these entities. Laureate intends to vigorously defend against these matters. As of December 31, 2022 and 2021, approximately $11,400 and $7,200, respectively, of loss contingencies were included in Other long-term liabilities and Other current liabilities on the Consolidated Balance Sheets.

We have also identified certain loss contingencies that we have assessed as being reasonably possible of loss, but not probable of loss, and could have an adverse effect on the Company’s results of operations if the outcomes are unfavorable. In the aggregate, we estimate that the reasonably possible loss for these unrecorded contingencies could be up to approximately $11,900 if the outcomes were unfavorable.

Guarantees    

In connection with a loan agreement entered into by a Laureate subsidiary in Peru, all of the shares of Universidad Privada del Norte, one of our universities, were pledged to the third-party lender as a guarantee of the payment obligations under the loan.

During the first quarter of 2021, one of our Peruvian institutions issued a bank guarantee in order to appeal a preliminary tax assessment received related to tax audits of 2014 and 2015. As of December 31, 2022 and 2021, the amount of the guarantee was $7,076 and $5,885, respectively.

Standby Letters of Credit (LOCs)

Spanish Tax Audits

As of December 31, 2021, we had approximately $10,700 posted as cash collateral for LOCs related to the Spanish tax audits. This was recorded in continuing operations and classified as Restricted cash on our December 31, 2021 Consolidated Balance Sheet. The cash collateral is related to final assessments issued by the Spanish Taxing Authority (STA) in October 2018 and January 2020 to Iniciativas Culturales de España, S.L. (ICE), our former Spanish holding company. During the second quarter of 2020, ICE was migrated to the Netherlands and its name was changed to Laureate Netherlands Holding B.V. In October 2021, the Company paid to the STA the final assessments of approximately $9,300, in order to reduce the amount of future interest that could be incurred as the appeal process continues. Following the payment, the letter of credit was no longer required and the cash was subsequently released in October 2022. The Company has paid all of the final assessments that were issued as a result of the Spanish tax audits and does not expect that the matter will have a material effect on its consolidated financial statements.