LAUREATE EDUCATION, INC.

Previous wording

You should read the following discussion of our results of operations and financial condition with the audited historical consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K (Form 10-K). This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Item 1A. Risk Factors” section of this Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. See “Forward-Looking Statements” on page 2 of this Form 10-K.

Current wording

You should read the following discussion of our financial condition and results of operations with the audited historical consolidated financial statements and related notes included elsewhere in this Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Item 1A. Risk Factors” section of this Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. See “Forward-Looking Statements” on page 2 of this Form 10-K.

Previous wording

We operate a portfolio of degree-granting higher education institutions in Mexico and Peru. Collectively, we have approximately 472,000 students enrolled at five institutions in these two countries. We believe that the higher education markets in Mexico and Peru present an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for affordable, quality higher education in those markets. We believe that the combination of the projected growth in the middle class, limited government resources dedicated to higher education, and a clear value proposition demonstrated by the higher earnings potential afforded by higher education, creates substantial opportunities for high-quality private institutions to meet this growing and unmet demand. By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy. We have two reportable segments as described below. We group our institutions by geography in Mexico and Peru for reporting purposes.

Current wording

We operate a portfolio of degree-granting higher education institutions in Mexico and Peru. Collectively, we have approximately 497,700 students enrolled at five institutions in these two countries. We believe that the higher education markets in Mexico and Peru present an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for affordable, quality higher education in those markets. We believe that the combination of the projected growth in the middle class, limited government resources dedicated to higher education, and a clear value proposition demonstrated by the higher earnings potential afforded by higher education, creates substantial opportunities for high-quality private institutions to meet this growing and unmet demand. By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy. We have two reportable segments as described below. We group our institutions by geography in Mexico and Peru for reporting purposes.

Previous wording

•Private education providers in Mexico constitute approximately 39% of the total higher-education market. The private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities. Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses. Students in our Mexican institutions typically finance their own education.

Current wording

•Private education providers in Mexico constitute approximately 39% of the total higher-education market. The private sector plays a meaningful role in higher education, bridging supply and demand imbalances created by a lack of capacity at public universities. Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses.

Previous wording

•In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market. Laureate owns three institutions in Peru, with a footprint of 19 campuses.

Current wording

•In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market. Laureate owns three institutions in Peru, with a footprint of 20 campuses.

Previous wording

(1)Amounts related to Corporate totaled $0.2 million and are not separately presented.

Current wording

(1)Amounts related to Corporate totaled $0.1 million and are not separately presented.

Previous wording

Our operations are outside of the United States and are subject to complex business, economic, legal, regulatory, political, tax and foreign currency risks, which may be difficult to adequately address. As a result, we face risks that are inherent in international operations, including: fluctuations in exchange rates, possible currency devaluations, inflation and hyper-inflation; price controls and foreign currency exchange restrictions; potential economic and political instability in the countries in which we operate; expropriation of assets by local governments; key political elections and changes in government policies; multiple and possibly overlapping and conflicting tax laws; and compliance with a wide variety of foreign laws. See “Item 1A—Risk Factors—Risks Relating to Our Business—We operate a portfolio of degree-granting higher education institutions in Mexico and Peru and are subject to complex business, economic, legal, political, tax and foreign currency risks, which risks may be difficult to adequately address.” We plan to grow organically by: 1) adding new programs and course offerings; 2) expanding target student demographics; and 3) increasing capacity at existing and new campus locations. Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries.

Current wording

price controls and foreign currency exchange restrictions; potential economic and political instability in both countries in which we operate; expropriation of assets by local governments; key political elections and changes in government policies; subsequent changes to laws and regulatory regimes; multiple and possibly overlapping and conflicting tax laws; and compliance with a wide variety of foreign laws. See “Item 1A—Risk Factors—Risks Relating to Our Business—We operate a portfolio of degree-granting higher education institutions in Mexico and Peru and are subject to complex business, economic, legal, political, tax and foreign currency risks, which risks may be difficult to adequately address.” We plan to grow our operations organically by: 1) adding new programs and course offerings; 2) expanding target student demographics; and 3) increasing capacity at existing and new campus locations. Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries. See “Item IA—Risk Factors—Risks Relating to Our Business—If we do not effectively manage our growth and business, our results of operations may be materially adversely affected.”

Previous wording

The majority of our revenue is derived from tuition and educational services. The amount of tuition generated in a given period depends on the price per credit hour and the total credit hours or price per program taken by the enrolled student population. The price per credit hour varies by program, by market and by degree level. Additionally, varying levels of discounts and scholarships are offered depending on market-specific dynamics and individual achievements of our students. Revenues are recognized net of scholarships and other discounts, refunds and waivers. In addition to tuition revenues, we generate other revenues from student fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. The main drivers of changes in revenues between periods are student enrollment and price. We continually monitor market conditions and carefully adjust our tuition rates to meet local demand levels. We proactively seek the best price and content combinations to remain competitive in all the markets in which we operate.

Current wording

The majority of our revenue is derived from tuition revenue from enrolled students. The amount of tuition generated in a given period depends on the price per credit hour and the total credit hours or price per program taken by the enrolled student population. The price per credit hour varies by program, by market and by degree level. Additionally, varying levels of discounts and scholarships are offered depending on market-specific dynamics and individual achievements of our students. Revenues are recognized net of scholarships and other discounts, refunds and waivers. In addition to tuition revenues, we generate other revenues from student fees, short courses, and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. The main drivers of changes in revenues between periods are student enrollment and price. We continually monitor market conditions and carefully adjust our tuition rates to meet local demand levels. We proactively seek the best price and content combinations to remain competitive in all the markets in which we operate.

Previous wording

While the USD is our reporting currency, our institutions are located in Mexico and Peru and operate in other functional currencies, namely the Mexican peso and Peruvian nuevo sol. We monitor the impact of foreign currency movements and the correlation between the local currency and the USD. Our revenues and expenses are generally denominated in local currency. The principal foreign exchange exposure is the risk related to the translation of revenues and expenses incurred in each country from the local currency into USD. See “Item 1A—Risk Factors—Risks Relating to Our Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates.” In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and then excludes the impact of other items, as described in the segment results.

Current wording

While the USD is our reporting currency, our institutions are located in Mexico and Peru and operate in other functional currencies, namely the Mexican peso and Peruvian nuevo sol. We monitor the impact of foreign currency movements and the correlation between the local currency and the USD. Our revenues and expenses are generally denominated in local currency. The principal foreign exchange exposure is the risk related to the translation of revenues and expenses incurred in each country from the local currency into USD. See “Item 1A—Risk Factors—Risks Relating to Our Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S. dollar and currency exchange rates.” In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and then excludes the impact of any acquisitions and divestitures.

Previous wording

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes. Also, discrete items can arise in the course of our operations that can further affect the Company’s effective tax rate for the period. Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities and our loss-making entities for which it is not ‘more likely than not’ that a tax benefit will be realized on the loss. See “Item 1A—Risk Factors—Risks Relating to Our Business—We may have exposure to greater-than-anticipated tax liabilities.”

Current wording

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes. Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities and our loss-making entities for which it is not ‘more likely than not’ that a tax benefit will be realized on the loss. See “Item 1A—Risk Factors—Risks Relating to Our Business—We may have exposure to greater-than-anticipated tax liabilities.”

Previous wording

Many countries have enacted legislation and adopted policies to implement the global minimum tax resulting from the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting project. Significant details and guidance around the global minimum tax provisions are still pending. For countries that have enacted the global minimum tax, such taxes generally became effective for the Company beginning in 2024. Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business. We will continue to monitor pending legislation and implementation by individual countries in which we operate, and we do not expect the global minimum tax provisions to have a material impact on our results of operations, financial position or cash flows.

Current wording

Many countries have enacted legislation and adopted policies to implement the global minimum tax resulting from the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting project. Significant details and guidance around compliance with the global minimum tax are still pending. For countries that have enacted the global minimum tax, such taxes generally became effective for the Company beginning in 2024, with filing requirements expected to begin in 2026. Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business. We continue to monitor pending legislation and implementation by individual countries in which we operate, and we do not expect the global minimum tax provisions to have a material impact on our results of operations, financial position or cash flows.

Previous wording

Revenues increased by $242.0 million to $1,484.3 million for 2023 from $1,242.3 million for 2022. The increase was attributable to: (1) the effect of a net change in foreign currency exchange rates, which increased revenues by $108.9 million, mainly driven by the strengthening of the Mexican peso against the USD compared to 2022; (2) higher average total organic enrollment at our institutions, which increased revenues by $79.3 million compared to 2022; and (3) the effect of changes in product mix, pricing and timing, which increased revenues by $57.9 million compared to 2022. These increases in revenues were partially offset by other Corporate and Eliminations changes, which accounted for a decrease in revenues of $4.1 million.

Current wording

Revenues increased by $135.3 million to $1,701.9 million for 2025 from $1,566.6 million for 2024. The increase was attributable to: (1) higher average total organic enrollment at our institutions, which increased revenues by $92.4 million compared to 2024; (2) the effect of changes in tuition rates and enrollments in programs at varying price points (“product mix”), pricing and timing, which increased revenues by $40.5 million compared to 2024; and (3) the net effect of changes in foreign currency exchange rates, which increased revenues by $2.5 million. This net effect was the result of an increase in revenues of $45.4 million caused by the strengthening of the Peruvian nuevo sol against the USD compared to 2024, almost entirely offset by a decrease in revenues of $42.9 million caused by the weakening of the Mexican peso against the USD compared to 2024. These increases were partially offset by changes in Other Corporate and Eliminations which accounted for a decrease in revenues of $0.1 million.

Previous wording

Direct costs and general and administrative expenses combined increased by $170.2 million to $1,142.4 million for 2023 from $972.2 million for 2022. The effect of operational changes, mostly attributable to the effect of higher enrollments at our institutions as well as return-to-campus expenses, increased direct costs by $94.0 million compared to 2022. Additionally, the effect of a net change in foreign currency exchange rates increased costs by $86.3 million. These increases in direct costs were partially offset by a decrease in costs of $10.1 million in 2023 related to other Corporate expenses.

Current wording

Direct costs and general and administrative expenses combined increased by $78.2 million to $1,270.9 million for 2025 from $1,192.7 million for 2024. This increase in direct costs was driven by the effect of operational changes, which increased direct costs by $85.4 million compared to 2024, mostly attributable to the effect of higher enrollments at our institutions. This increase was partially offset by the net effect of changes in foreign currency exchange rates which decreased costs by $6.4 million. This net effect was the result of a decrease in costs of $33.3 million caused by the weakening of the Mexican peso against the USD compared to 2024, partially offset by an increase in costs of $26.9 million caused by the strengthening of the Peruvian nuevo sol against the USD compared to 2024. Additionally, other Corporate expenses decreased by $0.8 million.

Previous wording

Operating income increased by $68.8 million to $338.8 million for 2023 from $270.0 million for 2022. This increase in operating income was a result of higher operating income at our Mexico and Peru segments, combined with lower operating costs at Corporate, as compared to 2022.

Current wording

Operating income increased by $57.1 million to $431.1 million for 2025 from $374.0 million for 2024. This increase was primarily a result of higher operating income at our Mexico and Peru segments as compared to 2024.

Previous wording

Interest expense, net of interest income increased by $3.0 million to $11.9 million for 2023 from $8.9 million for 2022. The increase in interest expense was primarily attributable to higher average debt balances compared to 2022.

Current wording

Interest expense, net of interest income decreased by $6.4 million to $3.6 million for 2025 from $10.0 million for 2024. The decrease in interest expense was primarily attributable to lower average debt balances compared to 2024.

Previous wording

Other non-operating expense increased by $57.2 million to $72.5 million for 2023 from $15.3 million for 2022. This increase was attributable to a higher loss on foreign currency exchange of $58.3 million compared to 2022, mainly related to intercompany loan arrangements. Additionally, other income was lower by $1.1 million compared to 2022. These increases in non-operating expense were partially offset by a higher gain on disposal of subsidiaries of $2.2 million, primarily attributable to the release of accumulated foreign currency translation gains upon the liquidation of certain subsidiaries.

Current wording

Other non-operating (expense) income changed by $77.1 million to an expense of $(26.6) million for 2025 from income of $50.5 million for 2024. This change in other non-operating (expense) income was primarily attributable to a loss on foreign currency exchange for 2025 compared to a gain for 2024 for a change of $85.2 million, mainly related to intercompany loan arrangements. This change was partially offset by: (1) an increase in other income of $6.8 million compared to 2024 due to the settlement of an insurance claim for business interruption events that occurred in 2019 and early 2020 at an operation that we have subsequently divested; and (2) a $1.3 million change in loss on disposal of subsidiaries attributable to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries in 2024.

Previous wording

Revenues increased by $82.3 million to $1,566.6 million for 2024 from $1,484.3 million for 2023. This increase was attributable to higher average total organic enrollment at our institutions, which increased revenues by $73.6 million compared to 2023. In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (“product mix”), pricing and timing increased revenues by $34.8 million compared to 2023. These increases in revenues were partially offset by the effect of a net change in foreign currency exchange rates, which decreased revenues by $26.3 million, mainly driven by the weakening of the Mexican peso against the USD compared to 2023. Other Corporate and Eliminations changes accounted for an increase in revenues of $0.2 million.

Current wording

Revenues increased by $82.3 million to $1,566.6 million for 2024 from $1,484.3 million for 2023. This increase was attributable to higher average total organic enrollment at our institutions, which increased revenues by $73.6 million compared to 2023. In addition, the effect of changes in product mix, pricing and timing increased revenues by $34.8 million compared to 2023. These increases in revenues were partially offset by the effect of a net change in foreign currency exchange rates, which decreased revenues by $26.3 million, mainly driven by the weakening of the Mexican peso against the USD compared to 2023. Other Corporate and Eliminations changes accounted for an increase in revenues of $0.2 million.

Previous wording

Other non-operating income (expense)changed by $123.0 million to income of $50.5 million for 2024 from expense of $(72.5) million for 2023. This change in other non-operating income was attributable to a gain on foreign currency exchange for 2024 compared to a loss for 2023 for a change of $126.4 million, mainly related to intercompany loan arrangements. Additionally, other income was higher by $1.5 million compared to 2023. These increases in non-operating income were partially offset by a loss on disposal of subsidiaries for 2024 compared to a gain for 2023 for a change of $4.9 million, primarily attributable to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries.

Current wording

Other non-operating income (expense) changed by $123.0 million to an income of $50.5 million for 2024 from an expense of $(72.5) million for 2023. This change in other non-operating income was attributable to a gain on foreign currency exchange for 2024 compared to a loss for 2023 for a change of $126.4 million, mainly related to intercompany loan arrangements. Additionally, other income was higher by $1.5 million compared to 2023. These increases in non-operating income were partially offset by a loss on disposal of subsidiaries for 2024 compared to a gain for 2023 for a change of $4.9 million, primarily attributable to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries.

Previous wording

Income tax expensedec reased by $18.6 million to $119.0 million for 2024 from $137.6 million for 2023. This decrease was primarily attributable to a discrete tax benefit of approximately $37.9 million that was recorded during 2024 related to an entity restructuring, partially offset by a tax benefit recorded in 2023 of approximately $11.5 million for the release of valuation allowances in Mexico.

Current wording

Income tax expense decreased by $18.6 million to $119.0 million for 2024 from $137.6 million for 2023. This decrease was primarily attributable to a discrete tax benefit of approximately $37.9 million that was recorded during 2024 related to an entity restructuring, partially offset by a tax benefit recorded in 2023 of approximately $11.5 million for the release of valuation allowances in Mexico.

Previous wording

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense, interest income, and loss on debt extinguishment, plus depreciation and amortization, share-based compensation expense, loss on impairment of assets and expenses related to our Excellence-in-Process (EiP) initiative. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

Current wording

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense, interest income, and loss on debt extinguishment, plus depreciation and amortization, share-based compensation expense and loss on impairment of assets. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

Previous wording

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the years ended December 31, 2024,2023 and 2022:

Current wording

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the years ended December 31, 2025,2024 and 2023:

Previous wording

We have two reportable segments: Mexico and Peru, as discussed in Overview. For purposes of the following comparison of results discussion, “segment direct costs” represent direct costs incurred by the segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets, share-based compensation expense and EiP implementation expenses have been excluded. Organic enrollment is based on average total enrollment for the period. For a further description of our segments, see Overview.

Current wording

We have two reportable segments: Mexico and Peru, as discussed in Overview. For purposes of the following comparison of results discussion, “segment direct costs” represent direct costs incurred by the segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets and share-based compensation expense have been excluded. Organic enrollment is based on average total enrollment for the period. For a further description of our segments, see Overview.

Previous wording

•Revenues from our Mexico segment represented 53% of our consolidated total revenues for 2023 compared to 50% for 2022.

Current wording

•Revenues from our Mexico segment represented 52% of our consolidated total revenues for 2025 compared to 54% for 2024.

Previous wording

Adjusted EBITDA increased by $29.5 million, a 17% increase from 2023, mainly driven by higher revenues.

Current wording

Adjusted EBITDA increased by $29.5 million, a 17% increase from 2023.

Previous wording

•Revenues from our Peru segment represented 47% of our consolidated total revenues for 2023 compared to 50% for 2022.

Current wording

•Revenues from our Peru segment represented 48% of our consolidated total revenues for 2025 compared to 46% for 2024.

Previous wording

Adjusted EBITDA decreased by $3.5 million, a 1% decrease from 2023, primarily due to higher marketing and bad debt expenses.

Current wording

Adjusted EBITDA decreased by $3.5 million, a 1% decrease from 2023.

Previous wording

Corporate revenues primarily represent miscellaneous other revenues, net of the elimination of intersegment revenues. In 2022, corporate revenues also included transition services agreements related to previous divestitures.

Current wording

Corporate revenues primarily represent miscellaneous other revenues, net of the elimination of intersegment revenues.

Previous wording

As of December 31, 2024, our cash and cash equivalents were $91.4 million. Our cash accounts are maintained with high-quality financial institutions. The Company also maintains a revolving credit facility (the "Senior Secured Credit Facility") with a syndicate of financial institutions as a source of liquidity. The Senior Secured Credit Facility, pursuant to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”, as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022, and, as further amended by the Third Amendment, dated as of September 18, 2023, the “Amended Credit Agreement”), provided for borrowings of$145.0 million of revolving credit loans, which matured on October 7, 2024 (the“Series 2024 Tranche”) and $155.0 million of revolving credit loans maturing in September 2028 (the "Series 2028 Tranche") for a $300.0 million aggregate revolving credit facility (the“Revolving Credit Facility”). Given the maturity date of the Series 2024 Tranche, as of December 31, 2024, the borrowing capacity of the Revolving Credit Facility was $155.0 million. As a subfacility under the Revolving Credit Facility, the Amended Credit Agreement provides for letter of credit commitments in the aggregate amount of $10.0 million. From time to time, we draw down on the Revolving Credit Facility, and, in accordance with the terms of the credit agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes. As of December 31, 2024, the Company had no outstanding balance borrowed under the Revolving Credit Facility. In addition to the Revolving Credit Facility, our subsidiaries had approximately $80.3 million of available borrowing capacity under lines of credit and short-term borrowing arrangements as of December 31, 2024.

Current wording

As of December 31, 2025, our cash and cash equivalents were $146.7 million. Our cash accounts are maintained with high-quality financial institutions. The Company also maintains a revolving credit facility (the "Senior Secured Credit Facility") with a syndicate of financial institutions as a source of liquidity. The Senior Secured Credit Facility, pursuant to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”, as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022, and, as further amended by the Third Amendment, dated as of September 18, 2023, the “Amended Credit Agreement”), provides for borrowings of $155.0 million of revolving credit loans maturing in September 2028 (the“Revolving Credit Facility”). As a subfacility under the Revolving Credit Facility, the Amended Credit Agreement provides for letter of credit commitments in the aggregate amount of $10.0 million. From time to time, we draw down on the Revolving Credit Facility, and, in accordance with the terms of the credit agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes. As of December 31, 2025, the Company had no outstanding balance borrowed under the Revolving Credit Facility. In addition to the Revolving Credit Facility, our subsidiaries had approximately $64.7 million of available borrowing capacity under lines of credit and short-term borrowing arrangements as of December 31, 2025.

Previous wording

If certain conditions are satisfied, the Amended Credit Agreement also provides for incremental revolving and term loan facilities, at the request of the Company and subject to lender approval, not to exceed (i) the greater of (a)$172.5 million and (b)50%of the Company's Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25x, plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

Current wording

If certain conditions are satisfied, the Amended Credit Agreement also provides for incremental revolving and term loan facilities, at the request of the Company and subject to lender approval, not to exceed (i) the greater of (a)$172.5 million and (b)50%of the Company's Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25 to 1.00, plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

Previous wording

Our liquidity is affected by restricted cash balances, which totaled $6.5 million and $7.5 million as of December 31, 2024 and 2023, respectively. Restricted cash consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Current wording

Our liquidity is affected by restricted cash balances, which totaled $5.4 million and $6.5 million as of December 31, 2025 and 2024, respectively. Restricted cash consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Previous wording

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As of December 31, 2024, $80.1 million of our total $91.4 million of cash and cash equivalents were held by foreign subsidiaries. As of December 31, 2023, $82.7 million of our total $89.4 million of cash and cash equivalents were held by foreign subsidiaries. As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Current wording

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As of December 31, 2025, $130.4 million of our total $146.7 million of cash and cash equivalents were held by foreign subsidiaries. As of December 31, 2024, $80.1 million of our total $91.4 million of cash and cash equivalents were held by foreign subsidiaries. As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Previous wording

Our short-term liquidity requirements include: funding for debt service (including finance leases); operating lease obligations; payments of deferred compensation; working capital; operating expenses; capital expenditures; stock repurchases; and business development activities.

Current wording

Our liquidity requirements include: funding for debt service (including finance leases); operating lease obligations; payments of deferred compensation; working capital; operating expenses; capital expenditures; stock repurchases; business development activities; and payments of other third-party obligations.

Previous wording

As of December 31, 2024, our debt obligations consisted of lines of credit and short-term borrowing arrangements of subsidiaries and notes payable, which totaled $53.8 million. In addition, our finance lease obligations and sale-leaseback financings were $48.4 million.

Current wording

As of December 31, 2025, our debt obligations consisted of lines of credit and short-term borrowing arrangements of subsidiaries and notes payable, which totaled $65.6 million. In addition, our finance lease obligations were $63.5 million.

Previous wording

As of December 31, 2024, there was no balance outstanding under our Senior Secured Credit Facility. As of December 31, 2023, there was a $59.0 million balance outstanding under our Senior Secured Credit Facility.

Current wording

As of December 31, 2025 and 2024, there was no balance outstanding under our Senior Secured Credit Facility.

Previous wording

As of December 31, 2024 and 2023, the aggregate outstanding balances on our lines of credit were $30.0 million and $10.9 million, respectively.

Current wording

As of December 31, 2025 and 2024, the aggregate outstanding balances on our lines of credit were $43.3 million and $30.0 million, respectively.

Previous wording

One of our subsidiaries in Mexico holds an unsecured term loan which was scheduled to mature in June 2024. During the second quarter of 2024, we entered into a loan modification, which extended the maturity of the loan to June 2029. The loan carries a variable interest rate, plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement (11.74% as of December 31, 2024). Under the loan modification agreement, the current quarterly payments on the loan total MXN $4.3 million ($0.2 million at December 31, 2024) and increase over the remaining term of the loan to MXN $23.4 million ($1.2 million at December 31, 2024), with a balloon payment of MXN 170.0 million ($8.4 million at December 31, 2024) due at maturity. As of December 31, 2024 and 2023, the outstanding balance of this loan was $20.8 million and $29.5 million, respectively.

Current wording

One of our subsidiaries in Mexico holds an unsecured term loan which was scheduled to mature in June 2024. During the second quarter of 2024, we entered into a loan modification, which extended the maturity of the loan to June 2029. The loan carries a variable interest rate, plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement (8.85% as of December 31, 2025). Under the loan modification agreement, the current quarterly payments on the loan total MXN $4.3 million ($0.2 million at December 31, 2025) and increase over the remaining term of the loan to MXN $23.4 million ($1.3 million at December 31, 2025), with a balloon payment of MXN 170.0 million ($9.5 million at December 31, 2025) due at maturity. As of December 31, 2025 and 2024, the outstanding balance of this loan was $22.3 million and $20.8 million, respectively.

Previous wording

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations. As discussed in Note 9, Leases, in our consolidated financial statements included elsewhere in this Form 10-K, we have significant operating lease liabilities recorded related to our leased facilities, which will require future cash payments. As of December 31, 2024 and 2023, the present value of operating lease liabilities was $327.1 million and $417.6 million, respectively. Based on the operating leases outstanding at December 31, 2024, $86.5 million of minimum lease payments will be required during 2025. In addition, we had finance lease obligations and sale-leaseback financings of $48.4 million and $57.6 million as of December 31, 2024 and 2023, respectively.

Current wording

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations. As discussed in Note 9, Leases, in our consolidated financial statements included elsewhere in this Form 10-K, we have significant operating lease liabilities recorded related to our leased facilities, which will require future cash payments. As of December 31, 2025 and 2024, the present value of operating lease liabilities was $387.8 million and $327.1 million, respectively. Based on the operating leases outstanding at December 31, 2025, $98.8 million of minimum lease payments will be required during 2026. In addition, we had finance lease obligations of $63.5 million and $48.4 million as of December 31, 2025 and 2024, respectively.

Previous wording

Capital expenditures primarily consist of purchases of property and equipment. Our capital expenditure program is a component of our liquidity and capital management strategy. This program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment, to grow our network through the following: (1) capacity expansion at institutions to support enrollment growth; (2) new campuses for institutions in our existing markets; and (3) information technology to increase efficiency and controls. Our non-discretionary spending includes the maintenance of existing facilities. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. We believe that our internal sources of cash and our ability to obtain additional third-party financing, subject to market conditions, will be sufficient to fund our investing activities.

Current wording

Capital expenditures primarily consist of purchases of property and equipment. Our capital expenditure program is a component of our liquidity and capital management strategy. This program includes discretionary spending, which we can adjust in response to economic and other changes in our business environment, to grow our network through the following: (1) capacity expansion at institutions to support enrollment growth; (2) new programs and campuses for institutions in our existing markets; and (3) information technology to increase efficiency and controls. Our non-discretionary spending includes the maintenance of existing facilities. We typically fund our capital expenditures through cash flow from operations and external financing. In the event that we are unable to obtain the necessary funding for capital expenditures, our long-term growth strategy could be significantly affected. We believe that our internal sources of cash and our ability to obtain additional third-party financing, subject to market conditions, will be sufficient to fund our investing activities.

Previous wording

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $71.9 million, $56.5 million and $53.1 million during 2024, 2023 and 2022, respectively. The 27% increase in capital expenditures for 2024 compared to 2023 was primarily due to the purchase of a parcel of land and a new campus construction project that began in 2024, combined with higher spending in Mexico for campus consolidation related to the implementation of a real estate optimization plan. The 6% increase in capital expenditures for 2023 compared to 2022 was primarily due to investment in equipment for health science programs in Peru as well as campus expansion and digital innovation in Mexico.

Current wording

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $103.0 million, $71.9 million and $56.5 million during 2025, 2024 and 2023, respectively. The 43% increase in capital expenditures for 2025 compared to 2024 was primarily driven by the purchase of land and construction costs for new campuses in Peru as well as an increase in equipment purchases and campus improvements in Mexico. The 27% increase in capital expenditures for 2024 compared to 2023 was primarily due to the purchase of a parcel of land and a new campus construction project that began in 2024, combined with higher spending in Mexico for campus consolidation related to the implementation of a real estate optimization plan.

Previous wording

On September 13, 2024, the Company announced that its Board of Directors had approved a new stock repurchase program to acquire up to $100 million of the Company’s common stock. The Company’s repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. As of December 31, 2024, the approximate dollar value of shares yet to be purchased under this stock repurchase program was $98.0 million. The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility.

Current wording

The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility. The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act. Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.

Previous wording

Cash provided by operating activities increased by $72.6 million to $250.8 million for 2023, compared to $178.2 million for 2022. This increase in operating cash flows was attributable to higher operating income, combined with the net effect of changes in operating assets and liabilities, which increased operating cash by $93.6 million compared to 2022. This increase in cash inflows was offset in part by an increase in cash paid for taxes of $17.5 million, from $153.8 million in 2022 to $171.3 million in 2023, which was a result of higher tax prepayments during the 2023 period in Mexico and Peru, partially offset by tax refunds in the United States. Additionally, cash paid for interest increased by $3.5 million, from $16.8 million in 2022 to $20.3 million in 2023, attributable to higher average debt balances in 2023.

Current wording

Cash provided by operating activities increased by $133.5 million to $366.2 million for 2025, compared to $232.7 million for 2024. This increase in operating cash flows was attributable to: (1) higher operating income combined with the net effect of changes in operating assets and liabilities increased operating cash flows by $94.5 million compared to 2024; (2) lower cash paid for taxes of $31.4 million, from $194.8 million in 2024 to $163.4 million in 2025, which was primarily driven by taxes paid during 2024 as a result of the distribution of certain intercompany loans; and (3) lower cash paid for interest of $7.6 million, from $16.6 million in 2024 to $9.0 million in 2025, mostly due to lower average debt balances in 2025 compared to 2024.