Laureate Education(LAUR)2025-02-20 12:17Financial Performance and Risks - As of December 31, 2024, the net carrying value of goodwill and other intangible assets totaled approximately 156.6 million, 50.4 million, respectively[105]. - The company reported that essentially all of its revenues originated outside the United States in 2024, making it susceptible to currency exchange rate fluctuations[105]. - The company may experience volatility in earnings due to potential hyperinflation in countries where it operates[106]. - The company has identified certain tax-related contingencies that could have an adverse effect on its results of operations if outcomes are unfavorable[110]. - The company is subject to regular review and audit by tax authorities, which could negatively affect its operating results and financial condition[109]. - The company may face disruptions in credit and equity markets, potentially affecting access to capital and increasing borrowing costs under existing credit facilities[141]. - The potential for Peruvian tax liabilities could materially impact the company's business and results of operations if not managed properly[149]. Operational Risks - The company faces risks associated with maintaining and increasing tuition rates and student enrollments in its institutions[13]. - The company relies on its information technology systems, and any disruptions could materially affect its ability to attract and retain students[111]. - The company is exposed to risks associated with cybersecurity incidents, which could lead to reputational damage and operational interruptions[113]. - Political and social unrest, such as protests and strikes, could disrupt operations and student retention, potentially leading to increased security costs and adverse financial effects[121]. - Natural disasters, including those exacerbated by climate change, pose risks to the company's institutions in Mexico and Peru, which could lead to enrollment reductions and campus closures[122]. - The competitive market for attracting and retaining qualified faculty poses a risk to maintaining educational quality and could adversely affect the company's financial condition[127]. - Upgrading campus facilities is essential for attracting students, and failure to do so could lead to lower enrollment and adverse financial impacts[124]. Compliance and Governance Risks - The company is incorporating artificial intelligence technologies into its programs and processes, which may present business, compliance, and reputational risks[118]. - The company faces significant risks associated with AI applications, including potential inaccuracies and biases that could adversely affect its reputation and financial results[119]. - Compliance with anti-corruption laws is critical, as violations could result in significant penalties and harm the company's reputation and financial health[130]. - The company has previously experienced material weaknesses in internal controls over financial reporting, which could affect the accuracy of financial statements and investor confidence[133]. Shareholder and Market Risks - As a public benefit corporation, the company may prioritize actions benefiting students and communities over short-term financial performance, which could negatively impact stockholder interests[142]. - Long-term benefits from initiatives aimed at students and communities may take time to materialize, potentially adversely affecting the company's financial condition and stock price[143]. - Sales of a large number of shares could lead to a decline in the market price of the company's common stock, complicating future capital raising efforts[144]. - The trading price of the company's common stock is subject to volatility, influenced by factors beyond its control, including analyst coverage and market perception[145]. - The company's amended certificate of incorporation may limit stockholder lawsuits, potentially increasing costs if disputes arise in other jurisdictions[146]. - Stockholders selling shares may incur a 30% Peruvian tax on gains, applicable if the company's value exceeds approximately $57 million[147]. - The company may face joint and several liabilities for unpaid Peruvian taxes resulting from share transactions, which could adversely affect its financial condition[148].