Laureate Education Inc.

06/01/2021 | Press release | Distributed by Public on 06/01/2021 14:17

Pro Forma Financial Information (Form 8-K)

Pro Forma Financial Information.
The following supplemental pro forma information is presented for informational purposes only, to provide an understanding of the Company's historical financial results as adjusted for the disposition of Laureate Brazil. These pro forma financial statements should not be considered a substitute for the actual historical financial information prepared in accordance with generally accepted accounting principles, as presented in the Company's filings on Form 10-Q and 10-K. The unaudited pro forma condensed consolidated financial information disclosed in this report is for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the pro forma events taken place on the dates indicated, or our future consolidated results of operations.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2021 presents our condensed consolidated financial position giving pro forma effect to the disposition of Laureate Brazil as if it had occurred on March 31, 2021. The unaudited pro forma consolidated statements of operations for the year ended December 31, 2020 and the three months ended March 31, 2021 presents our condensed consolidated results of operations giving pro forma effect to the disposition of Laureate Brazil as if it had occurred on January 1, 2020. These pro forma financial statements should be read in connection with the Company's historical consolidated financial statements for the year ended December 31, 2020, which were included in the Form 10-K filed on February 25, 2021, and the Company's historical consolidated financial statements for the three months ended March 31, 2021, which were included in the Quarterly Report on Form 10-Q filed on May 6, 2021. In those historical consolidated financial statements, the entities included in this disposition were classified as discontinued operations for all periods presented.

The pro forma adjustments are based on currently available information, estimates and assumptions that the Company believes are reasonable in order to reflect, on a pro forma basis, the impact of this disposition on our historical financial information.

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LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidated Balance Sheet - Unaudited
IN THOUSANDS, except per share amounts
March 31, 2021
Laureate
Historical 		Transaction Accounting
Adjustments 		Pro Forma
Assets
Current assets:
Cash and cash equivalents
$ 561,330 $ 351,548 (a) $ 912,878
Restricted cash
106,633 - 106,633
Receivables:
Accounts and notes receivable
110,504 - 110,504
Other receivables
70,223 - 70,223
Allowance for doubtful accounts
(65,602) - (65,602)
Receivables, net
115,125 - 115,125
Other current assets 528,182 (137,111) (b) 391,071
Total current assets
1,311,270 214,437 1,525,707
Property and equipment:
Land, leasehold improvements and construction in-progress
245,232 - 245,232
Buildings
338,961 - 338,961
Furniture, equipment and software
479,551 - 479,551
Accumulated depreciation and amortization
(520,782) - (520,782)
Property and equipment, net
542,962 - 542,962
Goodwill
551,753 - 551,753
Operating lease right-of-use assets, net
428,183 - 428,183
Tradenames
164,059 - 164,059
Other non-current assets 1,485,821 (489,695) (b) 996,126
Total assets
$ 4,484,048 $ (275,258) $ 4,208,790
Liabilities and stockholders' equity
Total current liabilities
$ 797,506 $ (156,743) (b) $ 640,763
Long-term operating leases, less current portion
430,950 - 430,950
Long-term debt and finance leases, less current portion
888,181 (281,620) (c) 606,561
Other long-term liabilities 472,178 (336,990) (b) 135,188
Total liabilities
2,588,815 (775,353) 1,813,462
Redeemable noncontrolling interests and equity
1,744 - 1,744
Stockholders' equity:
Total Laureate Education, Inc. stockholders' equity
1,906,406 500,095 (d) 2,406,501
Noncontrolling interests
(12,917) - (12,917)
Total stockholders' equity
1,893,489 500,095 2,393,584
Total liabilities and stockholders' equity
$ 4,484,048 $ (275,258) $ 4,208,790

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LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statement of Operations - Unaudited
IN THOUSANDS, except per share amounts
For the year ended December 31, 2020
Laureate
Historical 		Transaction Accounting
Adjustments 		Pro Forma
Revenues
$ 1,024,917 $ - $ 1,024,917
Costs and expenses:
Direct costs
802,458 - 802,458
General and administrative expenses
199,790 - 199,790
Loss on impairment of assets
351,971 - 351,971
Operating loss
(329,302) - (329,302)
Interest expense, net of interest income
(98,725) 24,646 (e) (74,079)
Other losses, net of gains
(22,812) (29,427) (f) (52,239)
Loss from continuing operations before income taxes and equity in net income of affiliates
(450,839) (4,781) (455,620)
Income tax benefit
130,069 - 130,069
Equity in net income of affiliates, net of tax
172 - 172
Loss from continuing operations
(320,598) (4,781) (325,379)
Loss from discontinued operations, net of tax
(298,104) - (298,104)
Net loss
(618,702) (4,781) (623,483)
Net loss attributable to noncontrolling interests
5,371 - 5,371
Net loss attributable to Laureate Education, Inc.
$ (613,331) $ (4,781) $ (618,112)
Accretion of redeemable noncontrolling interests and equity
149 - 149
Net loss available to common stockholders
$ (613,182) $ (4,781) $ (617,963)
Basic and diluted earnings (loss) per share:
Loss from continuing operations $ (1.53) $ (0.02) $ (1.55)
Loss from discontinued operations (1.40) - (1.40)
Basic and diluted loss per share (weighted average shares outstanding 209,710)
$ (2.93) $ (0.02) $ (2.95)

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LAUREATE EDUCATION, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidated Statement of Operations - Unaudited
IN THOUSANDS, except per share amounts
For the three months ended March 31, 2021
Laureate
Historical 		Transaction Accounting
Adjustments 		Pro Forma
Revenues
$ 194,701 $ - $ 194,701
Costs and expenses:
Direct costs
181,848 - 181,848
General and administrative expenses
42,594 - 42,594
Loss on impairment of assets
56,650 - 56,650
Operating loss
(86,391) - (86,391)
Interest expense, net of interest income
(22,807) 6,161 (e) (16,646)
Other gains, net of losses
57,534 - 57,534
Loss from continuing operations before income taxes
(51,664) 6,161 (45,503)
Income tax expense
(112,861) - (112,861)
Equity in net income of affiliates, net of tax
- - -
Loss from continuing operations
(164,525) 6,161 (158,364)
Loss from discontinued operations, net of tax
(418) - (418)
Net loss
(164,943) 6,161 (158,782)
Net loss attributable to noncontrolling interests
15 - 15
Net income attributable to Laureate Education, Inc.
$ (164,928) $ 6,161 $ (158,767)
Accretion of redeemable noncontrolling interests and equity
(20) - (20)
Net loss available to common stockholders
$ (164,948) $ 6,161 $ (158,787)
Basic and diluted earnings (loss) per share:
Loss from continuing operations $ (0.82) $ 0.03 $ (0.79)
Loss from discontinued operations - - -
Basic and diluted loss per share (weighted average shares outstanding 200,224)
$ (0.82) $ 0.03 $ (0.79)
Notes to Unaudited Pro Forma Condensed Financial Information
(a)Represents the cash proceeds received, net of the intended use of the estimated cash proceeds for repayment of the remaining principal amount of the Senior Notes and transaction costs.
(b)Represents the elimination of the assets and liabilities associated with the business disposition. As of March 31, 2021, Laureate Brazil's total assets and total liabilities were classified as 'held for sale' on the Company's consolidated balance sheet that was included in the Form 10-Q for the quarter ended March 31, 2021, that was filed on May 6, 2021.
(c)Represents the intended use of a portion of the estimated net proceeds for repayment of the remaining principal amount of the Senior Notes. This amount represents the net amount of the outstanding principal amount of the Senior Notes and the associated unamortized deferred financing costs that are expected to be written off.
(d)Represents the net effect of the removal of the disposed net assets, offset by the net proceeds received, had the transaction closed on March 31, 2021. These amounts are subject to customary post-closing adjustments. An estimated gain/loss is not included in the adjustments in the unaudited pro forma consolidated statements of operations as this amount will be included in discontinued operations in the consolidated statement of operations of the Company following the disposition. We are not expecting a material gain or loss on sale.
(e)Represents the estimated interest expense savings resulting from the intended repayment of the remaining principal amount of the Senior Notes using a portion of the estimated net proceeds from the disposition as described herein. The estimated interest expense savings were derived using an interest rate of 8.250%, the interest rate in effect for the Senior Notes as of March 31, 2021.
(f)Represents the 4.125% redemption premium on the Senior Notes that are expected to be repaid using a portion of the estimated net proceeds, in addition to the write off of the remaining unamortized deferred financing costs associated with the Senior Notes.
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