Stockholders' Equity

9 Months Ended

Sep. 30, 2019

The components of net changes in stockholders' equity for the fiscal quarters of 2019 are as follows:



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock					Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost		Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount
Balance at December 31, 2018	107,450	$	430	116,865		$	467		$	3,703,796		$	(530,919	)	$	(1,112,695	)	$	—	$	(10,133	)	$	2,050,946
Adoption of accounting standards	—	—		—		—			—			28,944			—			—		—			28,944
Balance at January 1, 2019	107,450	430		116,865		467			3,703,796			(501,975		)	(1,112,695		)	—		(10,133		)	2,079,890
Non-cash stock compensation	—	—		—		—			3,149			—			—			—		—			3,149
Conversion of Class B shares to Class A shares	8	—		(8	)	—			—			—			—			—		—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	325	1		—		—			(1,421		)	—			—			—		—			(1,420		)
Distributions to noncontrolling interest holders	—	—		—		—			—			—			—			—		(625		)	(625		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—			263			—			—			—		—			263
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—			—			—			—			—		224			224
Net income	—	—		—		—			—			191,243			—			—		3,022			194,265
Foreign currency translation adjustment, net of tax of $0	—	—		—		—			—			—			49,521			—		30			49,551
Unrealized gain on derivatives, net of tax of $0	—	—		—		—			—			—			2,609			—		—			2,609
Balance at March 31, 2019	107,783	$	431	116,857		$	467		$	3,705,787		$	(310,732	)	$	(1,060,565	)	$	—	$	(7,482	)	$	2,327,906
Non-cash stock compensation	—	—		—		—			4,854			—			—			—		—			4,854
Conversion of Class B shares to Class A shares	10,991	44		(10,991	)	(44		)	—			—			—			—		—			—
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	32	—		—		—			170			—			—			—		—			170
Distributions to noncontrolling interest holders	—	—		—		—			—			—			—			—		(731		)	(731		)
Change in noncontrolling interests	—	—		—		—			(3,700		)	—			—			—		—			(3,700		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—			194			—			—			—		—			194
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—			—			—			—			—		(855		)	(855		)
Net income	—	—		—		—			—			781,592			—			—		(1,976		)	779,616
Foreign currency translation adjustment, net of tax of $0	—	—		—		—			—			—			10,275			—		(87		)	10,188
Unrealized loss on derivatives, net of tax of $0	—	—		—		—			—			—			(10,559		)	—		—			(10,559		)
Balance at June 30, 2019	118,806	$	475	105,866		$	423		$	3,707,305		$	470,860		$	(1,060,849	)	$	—	$	(11,131	)	$	3,107,083



	Laureate Education, Inc. Stockholders
	Class A Common Stock				Class B Common Stock					Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost			Non-controlling interests			Total stockholders' equity
	Shares		Amount		Shares		Amount			Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Treasury stock at cost			Non-controlling interests			Total stockholders' equity
Balance at June 30, 2019	118,806		$	475	105,866		$	423		$	3,707,305		$	470,860		$	(1,060,849	)	$	—		$	(11,131	)	$	3,107,083
Non-cash stock compensation	—		—		—		—			1,578			—			—			—			—			1,578
Conversion of Class B shares to Class A shares	15,002		60		(15,002	)	(60		)	—			—			—			—			—			—
Exercise of stock options and vesting of restricted stock, net of shares withheld to satisfy tax withholding	96		—		—		—			1,455			—			—			—			—			1,455
Purchases of treasury stock at cost	(6,150	)	—		—		—			—			—			—			(104,849		)	—			(104,849		)
Accretion of redeemable noncontrolling interests and equity	—		—		—		—			(193		)	—			—			—			—			(193		)
Reclassification of redeemable noncontrolling interests and equity	—		—		—		—			—			—			—			—			649			649
Net loss	—		—		—		—			—			(95,226		)	—			—			(1,568		)	(96,794		)
Foreign currency translation adjustment, net of tax of $0	—		—		—		—			—			—			(82,070		)	—			(510		)	(82,580		)
Minimum pension liability adjustment, net of tax of $0	—		—		—		—			—			—			4,531			—			—			4,531
Balance at September 30, 2019	127,754		$	535	90,864		$	363		$	3,710,145		$	375,634		$	(1,138,388	)	$	(104,849	)	$	(12,560	)	$	2,830,880

As described in Note 2, Significant Accounting Policies, the change in beginning retained earnings resulting from the adoption of accounting standards represents the cumulative impact of adopting ASU 2016-02.

Stock Repurchase Program

As previously disclosed, on August 8, 2019, the Company announced that its board of directors had authorized a stock repurchase program to acquire up to $150,000 of the Company’s Class A common stock. The Company’s repurchases were made in a block trade and pursuant to a Rule 10b5-1 stock repurchase plan, in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). During the quarter ended September 30, 2019, the Company repurchased 6,150 shares of its outstanding Class A common stock for a total purchase price of $104,849, of which 5,130 shares totaling $87,921 had settled by close of business on September 30, 2019. The remaining shares settled during the first several days of October 2019 and their purchase price of $16,928 is recorded as a liability as of September 30, 2019. In early October 2019, the Company's stock repurchases reached the authorized limit of $150,000.

As discussed in Note 21, Subsequent Events, on October 14, 2019, the Company's board of directors approved the increase of its existing authorization to repurchase shares of the Company's Class A common stock by $150,000 for a total authorization (including the previously authorized repurchases) of up to $300,000 of the Company's Class A common stock.

The components of net changes in stockholders' equity for the fiscal quarters of 2018 are as follows:



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock				Additional paid-in capital			(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount
Balance at December 31, 2017	55,052	$	220	132,443		$	530	$	3,446,206		$	(946,236	)	$	(925,556	)	$	12,118		$	1,587,282
Adoption of accounting standards	—	—		—		—		—			5,074			—			—			5,074
Balance at January 1, 2018	55,052	220		132,443		530		3,446,206			(941,162		)	(925,556		)	12,118			1,592,356
Non-cash stock compensation	—	—		—		—		(3,756		)	—			—			—			(3,756		)
Conversion of Class B shares to Class A shares	59	—		(59	)	—		—			—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	145	1		59		—		(804		)	—			—			—			(803		)
Distributions from noncontrolling interest holders	—	—		—		—		—			—			—			581			581
Change in noncontrolling interests	—	—		—		—		(468		)	—			—			(20,575		)	(21,043		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		(76		)	—			—			—			(76		)
Accretion of Series A Convertible Redeemable Preferred Stock	—	—		—		—		(57,324		)	—			—			—			(57,324		)
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—			—			—			38			38
Net income	—	—		—		—		—			168,879			—			2,666			171,545
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—			—			83,648			(279		)	83,369
Unrealized gain on derivatives, net of tax of $0	—	—		—		—		—			—			2,210			—			2,210
Minimum pension liability adjustment, net of tax of $0	—	—		—		—		—			—			376			—			376
Balance at March 31, 2018	55,256	$	221	132,443		$	530	$	3,383,778		$	(772,283	)	$	(839,322	)	$	(5,451	)	$	1,767,473
Non-cash stock compensation	—	—		—		—		7,687			—			—			—			7,687
Conversion of Class B shares to Class A shares	27	—		(27	)	—		—			—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	188	1		—		—		(942		)	—			—			—			(941		)
Distributions to noncontrolling interest holders	—	—		—		—		—			—			—			(1,473		)	(1,473		)
Change in noncontrolling interests	—	—		—		—		—			—			—			(2,730		)	(2,730		)
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		882			—			—			—			882
Accretion of Series A Preferred Stock	—	—		—		—		(4,650		)	—			—			—			(4,650		)
Gain upon conversion of Series A Preferred Stock	—	—		—		—		74,110			—			—			—			74,110
Reclassification of Series A Preferred Stock upon conversion	36,143	144		—		—		237,957			—			—			—			238,101
Other	—	—		—		—		—			(744		)	—			—			(744		)
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—			—			—			(19		)	(19		)
Net income	—	—		—		—		—			224,412			—			(456		)	223,956
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—			—			(197,143		)	471			(196,672		)
Unrealized gain on derivatives, net of tax of $0	—	—		—		—		—			—			10,126			—			10,126
Balance at June 30, 2018	91,614	$	366	132,416		$	530	$	3,698,822		$	(548,615	)	$	(1,026,339	)	$	(9,658	)	$	2,115,106



	Laureate Education, Inc. Stockholders
	Class A Common Stock			Class B Common Stock				Additional paid-in capital		(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
	Shares	Amount		Shares		Amount		Additional paid-in capital		(Accumulated deficit) retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interests			Total stockholders' equity
Balance at June 30, 2018	91,614	$	366	132,416		$	530	$	3,698,822	$	(548,615	)	$	(1,026,339	)	$	(9,658	)	$	2,115,106
Non-cash stock compensation	—	—		—		—		6,561		—			—			—			6,561
Conversion of Class B shares to Class A shares	29	—		(29	)	—		—		—			—			—			—
Vesting of restricted stock, net of shares withheld to satisfy tax withholding	11	—		—		—		—		—			—			—			—
Accretion of redeemable noncontrolling interests and equity	—	—		—		—		324		—			—			—			324
Reclassification of redeemable noncontrolling interests and equity	—	—		—		—		—		—			—			(328		)	(328		)
Net loss	—	—		—		—		—		(94,789		)	—			(1,895		)	(96,684		)
Foreign currency translation adjustment, net of tax of $0	—	—		—		—		—		—			(52,961		)	211			(52,750		)
Unrealized loss on derivatives, net of tax of $0	—	—		—		—		—		—			(560		)	—			(560		)
Balance at September 30, 2018	91,654	$	366	132,387		$	530	$	3,705,707	$	(643,404	)	$	(1,079,860	)	$	(11,670	)	$	1,971,669

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) (AOCI) in our Consolidated Balance Sheets includes the accumulated translation adjustments arising from translation of foreign subsidiaries' financial statements, the unrealized gains on derivatives designated as cash flow hedges, and the accumulated net gains or losses that are not recognized as components of net periodic benefit cost for our minimum pension liability. The change in AOCI includes the removal of the cumulative translation adjustment related to subsidiaries that were sold during the period. The components of these balances were as follows:



	September 30, 2019									December 31, 2018
	Laureate Education, Inc.			Noncontrolling Interests			Total			Laureate Education, Inc.			Noncontrolling Interests		Total
Foreign currency translation adjustment	$	(1,149,993	)	$	(108	)	$	(1,150,101	)	$	(1,127,719	)	$	459	$	(1,127,260	)
Unrealized gain on derivatives	10,416			—			10,416			18,366			—		18,366
Minimum pension liability adjustment	1,189			—			1,189			(3,342		)	—		(3,342		)
Accumulated other comprehensive loss	$	(1,138,388	)	$	(108	)	$	(1,138,496	)	$	(1,112,695	)	$	459	$	(1,112,236	)

Secondary Offerings

In June 2019, Wengen Alberta, Limited Partnership (Wengen), our controlling stockholder, converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 10,955 shares of Class A common stock in a secondary offering at a price of $15.3032 per share. Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.

In September 2019, Wengen converted owned shares of the Company's Class B common stock into an equal number of shares of the Company's Class A common stock and sold a total of 15,000 shares of Class A common stock in a secondary offering at a price of $16.85 per share, prior to underwriting discounts and commissions. Wengen received all of the net proceeds from this offering and no shares of Class A common stock were sold by the Company.