LAUREATE EDUCATION, INC.LAUR
LAUREATE EDUCATION, INC. Income Taxes Disclosure
Income Taxes
Significant components of the Income tax (expense) benefit on earnings from continuing operations were as follows:
| For the years ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 51,939 | $ | (6,653) | $ | (5,488) | |||||||||||
| Foreign | (171,098) | (150,850) | (187,971) | ||||||||||||||
| State | — | — | — | ||||||||||||||
| Total current | (119,159) | (157,503) | (193,459) | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | — | — | — | ||||||||||||||
| Foreign | 1,849 | 38,524 | 55,856 | ||||||||||||||
| State | — | — | — | ||||||||||||||
| Total deferred | 1,849 | 38,524 | 55,856 | ||||||||||||||
| Total income tax expense | $ | (117,310) | $ | (118,979) | $ | (137,603) | |||||||||||
For the years ended December 31, 2025, 2024 and 2023, foreign income from continuing operations before income taxes was $457,503, $478,331, and $310,589, respectively. For the years ended December 31, 2025, 2024 and 2023, domestic loss from continuing operations before income taxes was $(56,594), $(63,847), and $(56,128), respectively.
Significant components of deferred tax assets and liabilities were as follows:
| December 31, | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss and tax credits carryforwards | $ | 60,833 | $ | 50,317 | |||||||
| Operating leases | 113,750 | 92,084 | |||||||||
| Depreciation | 49,301 | 46,236 | |||||||||
| Interest | 45,697 | 42,448 | |||||||||
| Deferred compensation | 20,666 | 11,275 | |||||||||
| Deferred revenue | 17,808 | 16,978 | |||||||||
| Nondeductible reserves | 7,503 | 13,879 | |||||||||
| Allowance for doubtful accounts | 14,304 | 10,399 | |||||||||
| Unrealized loss | 886 | — | |||||||||
| Total deferred tax assets | 330,748 | 283,616 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Operating leases | 100,877 | 82,421 | |||||||||
| Investment in subsidiaries | 2,050 | 2,358 | |||||||||
| Amortization of intangible assets | 51,700 | 45,141 | |||||||||
| Unrealized gain | — | 2,469 | |||||||||
| Total deferred tax liabilities | 154,627 | 132,389 | |||||||||
| Net deferred tax assets | 176,121 | 151,227 | |||||||||
| Valuation allowance for deferred tax assets | (119,552) | (102,837) | |||||||||
| Net deferred tax assets | $ | 56,569 | $ | 48,390 | |||||||
Laureate does not provide deferred taxes on the portion of its unremitted earnings attributable to foreign subsidiaries that have been considered indefinitely reinvested. If the Company were to remove its assertion and distribute the remaining unremitted earnings, we would record approximately $19,700 in additional deferred tax liabilities as of December 31, 2025. The amount of additional deferred tax liabilities recognized could increase if our expectations change based on future developments.
As of December 31, 2025, on tax-effected basis, the Company has $19,760 of U.S. federal net operating loss carryforwards, $4,081 of US state net operating loss carryforwards that do not expire and $22,811 of US state net operating loss carryforwards that will expire by 2040. In addition, on a tax-effected basis, the Company has $3,547 of foreign net operating loss carryforwards that expire from 2026 to 2034 and $6,082 of foreign net operating loss carryforwards that do not expire as well as $4,552 of tax credit carryforwards that do not expire and $45,697 of interest carryforwards that do not expire.
The Company assesses the realizability of deferred tax assets by examining all available evidence, both positive and negative. Accounting guidance restricts the amount of reliance the Company can place on projected taxable income to support the recovery of the deferred tax assets when a company is in a three-year cumulative loss position. A valuation allowance is recorded when a company is not able to identify a source of income to support realization of the deferred tax asset on a more-likely-than-not basis.
The reconciliations of the beginning and ending balances of the valuation allowance on deferred tax assets were as follows:
| For the years ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of period | $ | 102,837 | $ | 270,982 | $ | 291,722 | |||||||||||
| Additions (deductions) from tax expense from continuing operations | 15,193 | (166,396) | (22,815) | ||||||||||||||
| Charges to other accounts | |||||||||||||||||
| Currency translation adjustments | 1,522 | (1,749) | 2,075 | ||||||||||||||
| Balance at end of period | $ | 119,552 | $ | 102,837 | $ | 270,982 | |||||||||||
Pursuant to ASU 2023-09, for the year ended December 31, 2025, the reconciliation of the reported Income tax (expense) benefit to the amount that would result by applying the United States federal statutory tax rate of 21% to income from continuing operations before income taxes was as follows:
| For the year ended December 31, 2025 | $ Amount | % | |||||||||
| Tax expense at the United States statutory rate | $ | (84,191) | 21.0 | % | |||||||
| Non-taxable or non-deductible items | (6,965) | 1.7 | % | ||||||||
| Changes in valuation allowances | (5,125) | 1.3 | % | ||||||||
| Changes in unrecognized tax benefits | 56,625 | (14.1) | % | ||||||||
| Foreign tax effects | |||||||||||
| Mexico | |||||||||||
| Tax effect of foreign income taxed at higher rate | (18,921) | 4.7 | % | ||||||||
| Capital redemption cost | (5,062) | 1.3 | % | ||||||||
| Other | (856) | 0.2 | % | ||||||||
| Peru | |||||||||||
| Tax effect of foreign income taxed at higher rate | (28,761) | 7.2 | % | ||||||||
| Withholding taxes | (9,237) | 2.3 | % | ||||||||
| Other | (1,539) | 0.4 | % | ||||||||
| Netherlands | |||||||||||
| Changes in valuation allowances | (6,919) | 1.7 | % | ||||||||
| Other | 943 | (0.2) | % | ||||||||
| Switzerland | (5,057) | 1.3 | % | ||||||||
| Other | (2,245) | 0.6 | % | ||||||||
| Total income tax expense | $ | (117,310) | 29.3 | % | |||||||
Consistent with our presentation prior to the adoption of ASU 2023-09, for the years ended December 31, 2024 and 2023, the reconciliations of the reported Income tax (expense) benefit to the amount that would result by applying the United States federal statutory tax rate of 21% to income from continuing operations before income taxes were as follows:
| For the years ended December 31, | 2024 | 2023 | ||||||||||||
| Tax expense at the United States statutory rate | $ | (87,042) | $ | (53,437) | ||||||||||
| Internal restructuring transactions | (138,516) | (30,551) | ||||||||||||
| Permanent differences | (9,690) | 1,004 | ||||||||||||
| Tax effect of foreign income taxed at higher rate | (44,361) | (33,790) | ||||||||||||
| Change in valuation allowance | 167,152 | (5,273) | ||||||||||||
| Effect of tax contingencies | (6,394) | (6,352) | ||||||||||||
| Withholding taxes | (8,474) | (9,204) | ||||||||||||
| Tax credits | 8,346 | — | ||||||||||||
| Total income tax expense | $ | (118,979) | $ | (137,603) | ||||||||||
Internal restructuring transactions in the rate reconciliation includes the write off of approximately $176,000 and $30,600 of deferred tax assets as a result of subsidiary reorganizations that occurred during the years ended December 31, 2024 and 2023, respectively. These deferred tax assets carried a full valuation allowance and the corresponding reductions in the valuation allowance are included in the change in valuation allowance line item for 2024 and 2023 in the table above. In 2024, the internal restructuring transactions line item also includes the release of a deferred tax liability that was no longer required following the completion of an entity restructuring that received regulatory approval. This resulted in a net deferred tax benefit of approximately $37,900 during the year ended December 31, 2024.
Included within permanent differences in the 2023 rate reconciliation was approximately $5,400 of tax benefit for a change in estimate related to unrealized foreign currency exchange that is fully offset by a corresponding change in the valuation
allowance, as well as approximately $3,800 of tax benefit related to the inflationary adjustment for monetary assets, partially offset by approximately $6,700 of non-deductible expenses.
The reconciliations of the beginning and ending amount of unrecognized tax benefits were as follows:
| For the years ended December 31, | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning of the period | $ | 238,154 | $ | 255,716 | $ | 284,929 | |||||||||||
| Additions for tax positions related to prior years | 3,399 | 1,600 | 1,337 | ||||||||||||||
| Decreases for tax positions related to prior years | (5,155) | (17,324) | (30,550) | ||||||||||||||
| Additions for tax positions related to current year | — | — | — | ||||||||||||||
| Decreases as a result of a lapse in the statute of limitations | (53,035) | (1,838) | — | ||||||||||||||
| End of the period | $ | 183,363 | $ | 238,154 | $ | 255,716 | |||||||||||
Laureate records interest and penalties related to unrecognized tax benefits as a component of Income tax expense. During the years ended December 31, 2025, 2024 and 2023, net interest and penalties related to income taxes (decreased)/increased by $(9,248), $(739), and $10,155, respectively. Laureate had $22,447 and $31,695 of accrued interest and penalties at December 31, 2025 and 2024, respectively. Approximately $61,906 of unrecognized tax benefits, if recognized, will affect the effective income tax rate.
Laureate and various subsidiaries file income tax returns in the United States federal jurisdiction, and in various states and foreign jurisdictions. With few exceptions, Laureate is no longer subject to United States federal, state and local, or foreign income tax examinations by tax authorities for years before 2019. United States federal and state statutes are generally open back to 2022. Statutes of other major jurisdictions are open back to 2019 for Mexico, 2016 for Peru, 2018 for the Netherlands and 2023 for Switzerland.
During the year ended December 31, 2025, the Company paid income taxes in the jurisdictions of Mexico and Peru of $63,005 and $100,073, respectively, as well as total income taxes in other jurisdictions of $352, for a total of $163,430. During the years ended December 31, 2024 and 2023, the Company paid income taxes of $194,811 and $171,284, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.