As discussed in Note 1, Description of Business, the Company’s remaining principal markets are Mexico and Peru (the Continuing Operations). All other remaining markets are being divested (the Discontinued Operations). As described in Note 5, Dispositions, a number of sale transactions closed during 2019 and 2020. The assets and liabilities of the Discontinued Operations, which are subject to finalization, have been classified as held for sale as of September 30, 2020 and December 31, 2019, in accordance with ASC 205. The assets and liabilities are recorded at the lower of their carrying values or their estimated “fair values less costs to sell.”


For the three months ended September 30,	2020		2019
Revenues	$	459,442	$	561,748
Costs and expenses:
Depreciation and amortization	13,656		28,523
Share-based compensation expense	1,045		334
Loss on impairment of assets	208,040		25,000
Other direct costs	340,657		468,573
Operating (loss) income	(103,956)		39,318
Other non-operating loss	(14,731)		(32,402)
Pretax (loss) income of discontinued operations	(118,687)		6,916
Income tax (expense) benefit	(51,081)		24,070
(Loss) income from discontinued operations, net of tax	$	(169,768)	$	30,986


For the nine months ended September 30,	2020		2019
Revenues	$	1,342,298	$	1,952,952
Costs and expenses:
Depreciation and amortization	60,168		84,666
Share-based compensation expense	2,378		2,044
Loss on impairment of assets	639,319		25,222
Other direct costs	1,070,363		1,572,733
Operating (loss) income	(429,930)		268,287
Other non-operating loss	(79,807)		(45,278)
Pretax (loss) income of discontinued operations	(509,737)		223,009
Income tax (expense) benefit	(48,214)		17,364
(Loss) income from discontinued operations, net of tax	$	(557,951)	$	240,373

Operating cash flows of discontinued operations	$	248,972	$	313,647
Investing cash flows of discontinued operations	$	(40,578)	$	(69,653)
Financing cash flows of discontinued operations	$	8,725	$	(68,824)

As described in Note 1, Description of Business, the Company is exploring strategic alternatives for each of its businesses and, as part of that process, the Company is evaluating all potential options for its remaining businesses, including sales, spin-offs or business combinations. During the second quarter of 2020, the Company received and considered information regarding the market valuation for control of its Chilean operations, which was both a reporting unit and an asset group. In a divestiture scenario, this market feedback revealed the range of values that could be expected to be offered by potential investors, and this range of values was lower than carrying value. The reasons for this included uncertainties that market participants had around operating higher education institutions in Chile related to the challenging political and regulatory environment and the possibility that a new Chilean constitution could become effective as early as the summer of 2022. These uncertainties particularly affected the views of market participants (as well as the views of the Company) about operating a not-for-profit education institution in Chile.

After assessing these factors, the Company concluded that it was more likely than not that the fair value of its Chile reporting unit was less than its carrying value. Accordingly, the Company performed an impairment test of the long-lived assets that were part of the Chile reporting unit. Because Chile had not yet met the held-for-sale criteria as of June 30, 2020, the long-lived assets other than goodwill were evaluated for impairment under the held-and-used model, based on the probability-weighted cash flows expected to be generated by the asset group. Goodwill was also evaluated for impairment. The projections used in the impairment testing included key assumptions around the effect of regulatory uncertainties on the future cash flows expected to be generated, reducing the estimates of those cash flows. In addition, the projections incorporated assumptions around growth rates, tax rates and discount rates. The inputs used were not observable to active markets and were therefore deemed “Level 3” inputs in the fair value hierarchy. As a result of the impairment test, the Company determined that the carrying value of the Chile asset group exceeded its fair value by approximately $418,000 and recorded an impairment charge in that amount during the second quarter of 2020, as follows:

In addition, at the time of the sale, the Company had recorded within stockholders’ equity, as a component of accumulated other comprehensive income, approximately $293,000 of accumulated foreign currency translation losses associated with the Chilean operations that were sold. As discussed further in Note 5, Dispositions, the Company completed the divestiture of its Chilean operations during the third quarter of 2020 and, as a result, these accumulated foreign currency translation losses were recognized as part of the loss on sale.

During the second quarter of 2020, the Company recorded an impairment charge of approximately $10,000 related to long-lived assets of its institution in Honduras in order to write down the carrying value of those assets to their estimated fair value at that time. During the third quarter of 2020, the Company recorded an additional impairment charge of approximately $10,000 related to the long-lived assets of its Honduras institution, in order to write down the carrying value of those assets to their estimated fair value based on the sale agreement for the institution that was signed in October 2020, as discussed further below and in Note 19, Subsequent Events.

As discussed further below, during the third quarter of 2020, the Company signed an agreement to sell its Brazil operations and, as a result, Brazil was classified as a Discontinued Operation for all periods presented. In connection with this decision to sell Brazil, the Company recorded a goodwill impairment charge of approximately $190,000 in order to write down the carrying value of Brazil to its estimated ‘fair value less costs to sell’, as required by ASC 360-10. The estimated fair value was based on an offer received from a market participant. Because the held-for-sale criteria were met during the third quarter, the carrying value used to evaluate the Brazil business for impairment included the accumulated foreign currency translation losses associated with Brazil, resulting in the impairment.


	September 30, 2020		December 31, 2019
Assets of Discontinued Operations
Cash and cash equivalents	$	113,016	$	333,455
Receivables, net	152,557		209,704
Property and equipment, net	243,030		741,119
Goodwill	648,018		1,003,765
Tradenames	438,477		665,207
Operating lease right-of-use assets, net	169,991		399,345
Other assets	336,484		446,458
Subtotal: assets of Discontinued Operations	$	2,101,573	$	3,799,053

Other assets classified as held for sale
Property and equipment, net	7,127		8,476


Total assets held for sale	$	2,108,700	$	3,807,529


	September 30, 2020		December 31, 2019
Liabilities of Discontinued Operations
Deferred revenue and student deposits	$	203,865	$	176,255
Operating leases, including current portion	185,473		388,202
Long-term debt, seller notes and finance leases, including current portion	180,112		304,355
Other liabilities	400,437		581,329


Total liabilities held for sale	$	969,887	$	1,450,141

On July 29, 2020, LEI AMEA Investments B.V., a Netherlands private limited liability company (the ANZ Seller), an indirect, wholly owned subsidiary of the Company, and the Company, solely as guarantor of certain of the ANZ Seller’s obligations thereunder, entered into a Sale and Purchase Agreement (the ANZ Purchase Agreement) with SEI Newco Inc., a Delaware corporation (the ANZ Purchaser), and Strategic Education, Inc., a Maryland corporation (the ANZ Purchaser’s Guarantor).

Pursuant to the ANZ Purchase Agreement, the ANZ Seller has agreed to sell to the ANZ Purchaser all of the issued and outstanding shares in the capital of (i) LEI Higher Education Holdings Pty Ltd, an Australian private company and the direct owner of Torrens University Australia, (ii) LEI Australia Holdings Pty Ltd, an Australian private company and the indirect owner of Think Education, (iii) LESA Education Services Holdings Pty Ltd, an Australian private company, and (iv) LEI New Zealand, a New Zealand company and the indirect owner of Media Design School (collectively, the ANZ Target Companies). The ANZ Purchaser’s Guarantor will guarantee the obligations of the ANZ Purchaser.

The purchase price was $642,700, subject to certain closing adjustments based on the aggregate working capital and indebtedness of the ANZ Target Companies and their subsidiaries and the forecasted performance of the ANZ Target Companies and their subsidiaries. The closing of the transaction occurred on November 3, 2020, following completion of the required regulatory approvals and other customary closing conditions.

On September 11, 2020, Laureate and Rede Internacional de Universidades Laureate Ltda., a Brazilian limited liability company and an indirect wholly owned subsidiary of Laureate (Rede), entered into a transaction agreement (the Brazil Sale Agreement) with Ser Educacional S.A., a Brazilian publicly held company (SER), and, solely for the purposes of certain provisions thereof, José Janguiê Bezerra Diniz and certain of his family members.

Pursuant to the Brazil Sale Agreement, Laureate agreed to sell to SER all of the issued and outstanding equity interests of Rede, the direct or indirect owner of Laureate’s Brazilian operations, in exchange for 1,700,000 Brazilian Reals (or approximately $318,700 at the time of signing) in cash, subject to certain adjustments, and 101,138,369 newly issued shares of SER’s common stock (the Stock Consideration). Immediately following the closing of the transaction (the Brazil Closing), Laureate would own approximately 44% of SER’s outstanding common stock, unless SER were to issue additional common stock prior to the Brazil Closing to the extent permitted under the Brazil Sale Agreement. The transaction value is approximately 3,862,000 Brazilian Reals (or approximately $724,000 at the exchange rate and share value at the time of signing), including the assumption of indebtedness, net of cash (which, at the time of signing, was approximately $124,900). The closing of this transaction was targeted to occur toward the end of 2021 and was subject to certain specified closing conditions, including receipt of regulatory approval, receipt of required approvals by SER’s shareholders, establishment of a facility to issue American Depositary Shares (ADSs), the listing of the ADSs on a U.S. securities exchange, the effectiveness of registration statements to register the issuance of the Stock Consideration and other matters under U.S. federal securities laws and other customary closing conditions.

Under the terms of the Brazil Sale Agreement, during the period from September 11, 2020 and continuing until 12:01 A.M. (New York time) on October 13, 2020 (the Go-Shop Period), the Company had the right to solicit and engage in discussions with respect to a competing proposal for the acquisition of its Brazilian operations from third parties. Prior to the expiration of the Go-Shop Period, Laureate received a competing proposal from Ânima Holding S.A. (Anima), which on October 12, 2020, Laureate’s Board of Directors determined constituted a Superior Proposal as defined in the transaction agreement. On October 13, 2020, Laureate notified SER of the Superior Proposal, and SER had the right, for a period of five business days, to match Anima’s proposal. On October 20, 2020, instead of submitting a matching proposal before the expiration of the match period, SER informed the Company that it had obtained a partial and temporary injunction solely with respect to termination of the Brazil Sale Agreement and without a ruling on the merits of the superior proposal.

On November 2, 2020, the Company announced that it had entered into a definitive agreement with Anima for the sale of its Brazilian operations. Net of the termination fee payable to SER to be borne by Anima, the transaction value is approximately 4,400,000 Brazilian Reals (approximately $765,000 at the exchange rate at the time of signing), including 3,800,000 Brazilian Reals (approximately $660,700 at the exchange rate at the time of signing) in cash consideration, which is subject to certain adjustments, and the assumption of net indebtedness. Under the agreement with Anima, the Company will be entitled to receive up to 203,000 Brazilian Reals (approximately $35,300 at the time of signing) in additional cash consideration if certain metrics are achieved following the closing.

The Company and SER have agreed to terminate their previously announced transaction agreement and settle all legal proceedings related to such agreement. SER and Anima have agreed that Anima will bear the 180,000 Brazilian Reals (approximately $31,300 at the exchange rate at the time of signing) termination fee that the Company owes Ser in connection with the termination of the transaction agreement. The transaction is targeted to close by the end of the second quarter of 2021.

On September 11, 2020, Laureate entered into a Membership Interest Purchase Agreement (the Walden Sale Agreement) with Adtalem Global Education Inc., a Delaware corporation (the Walden Purchaser). Pursuant to the Walden Sale Agreement, the Company has agreed to sell to the Walden Purchaser all of the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company and its subsidiary, Walden University, LLC (Walden University), a Florida limited liability company and an indirect wholly owned subsidiary of the Company (together with Walden e-Learning, LLC, the Walden Group), in exchange for a purchase price of $1,480,000 in cash, subject to certain adjustments set forth in the Walden Sale Agreement.

The closing of this transaction is expected to occur toward the end of 2021 and is subject to customary closing conditions, including regulatory approval by the U.S. Department of Education and the Higher Learning Commission and required antitrust approvals. Under certain specified circumstances, the Walden Purchaser may be required to pay the Company a termination fee of $88,000, including if the Walden Purchaser terminates the Walden Sale Agreement as a result of the imposition by the U.S. Department of Education of certain specified restrictions, or if Laureate terminates the Walden Sale Agreement as a result of the Walden Purchaser’s failure to consummate the transaction upon satisfaction of the closing conditions.

On October 13, 2020, the Company entered into a definitive agreement with Fundación Nasser, a not-for-profit foundation in Honduras, to transfer control of its operations in Honduras for total cash consideration of approximately $29,800, prior to closing costs. The buyer will also assume indebtedness which, as of September 30, 2020, was approximately $30,000. The transaction is subject to certain closing conditions, including regulatory approval, and is expected to be completed in the first half of 2021.

On January 10, 2020, Laureate International B.V., a Netherlands private limited liability company (Laureate International), an indirect, wholly owned subsidiary of the Company, entered into, and consummated the transactions contemplated by, an Equity Purchase Agreement (the Costa Rica Agreement) with SP Costa Rica Holdings, LLC, a Delaware limited liability company (the Costa Rica Buyer).

Pursuant to the Agreement, the Costa Rica Buyer purchased from Laureate International (i) all of the equity units of Education Holding Costa Rica, S.R.L., which owned, directly or indirectly, all of the equity units of Lusitania S.R.L., Universidad ULatina, S.R.L. (ULatina) and Universidad Americana UAM, S.R.L. (collectively, Laureate Costa Rica) and (ii) a note due from ULatina to Laureate International. Consideration for the transaction consisted of $15,000 paid at closing and up to $7,000 to be paid within the next two years if Laureate Costa Rica met certain performance metrics. One of the performance metrics was finalized during the second quarter of 2020 and did not result in any additional proceeds to the Company; the maximum additional proceeds that the Company could receive if the remaining performance metric is met is $5,000. The proceeds received, net of cash sold, transaction fees and a working capital adjustment that was completed during the second quarter of 2020, were approximately $1,800. Additionally, Laureate Costa Rica retained obligations to pay approximately $30,000 in finance lease indebtedness for which the Costa Rica Buyer has no recourse to Laureate International. During the third quarter of 2019, the Company recorded an impairment loss of approximately $25,000 on the long-lived assets at the Costa Rica institutions, in order to write down the carrying value of those assets to their estimated fair value, per ASC 360-10. Upon completion of the sale in January 2020 and after including the working capital adjustment, the Company recognized a pre-tax loss of approximately $18,600, which related to subsequent changes in net carrying values and is included in loss on sales of discontinued operations on the Consolidated Statement of Operations for the nine months ended September 30, 2020.

On March 6, 2020, the Company completed the sale of NSAD. Under the terms of the membership interests purchase agreement, Exeter Street Holdings, LLC, an indirect wholly owned subsidiary of the Company, sold 100% of the outstanding membership interests of NSAD to Ambow NSAD, Inc. and Ambow Education Holding, Ltd. (the NSAD Buyers) for a purchase price of one dollar, subject to certain adjustments. NSAD is a higher education institution located in California that offers undergraduate and graduate degrees and non-degree certificates in design and construction management. Under the terms of the agreement, the Company agreed to pay subsidies to the NSAD Buyers totaling approximately $7,300, of which all but $2,800 was settled at the closing date. The remaining subsidy of $2,800 is being paid to the NSAD Buyers ratably on a quarterly basis over the next four years. The Company recognized a pre-tax loss on the sale of approximately $5,900, which is included in loss on sales of discontinued operations on the Consolidated Statement of Operations for the nine months ended September 30, 2020.

On January 25, 2018, the Company completed the sale of LEI Lie Ying Limited in China. At the closing of the sale on January 25, 2018, a portion of the total transaction value was paid into an escrow account, to be distributed to the Company pursuant to the terms and conditions of the escrow agreement. As of December 31, 2019, the Company had recorded a receivable of approximately $25,900 for the portion of the escrowed amount that the Company expected to receive. Per the terms of the escrow agreement, in June 2020, the Company received approximately 141,647 Hong Kong Dollars (approximately $18,300 at the date of receipt) from the escrow, which was offset against the receivable recorded, and is included in receipts from sales of discontinued operations within investing activities on the Consolidated Statement of Cash Flows. Under the terms of the agreement, the Company expects to receive the remaining escrow receivable amount in January 2021.

On September 10, 2020, Laureate International and Laureate I, B.V., each a Netherlands private limited liability company (together, the LDES Sellers), and Servicios Regionales Universitarios LE, S.C., a Mexican company (sociedad civil) (together with the LDES Sellers, the Controlling Entities), all of which are indirect, wholly owned subsidiaries of the Company, entered into a Master Agreement (the Chile Agreement) with Fundación Educación y Cultura, a Chilean non-for-profit foundation (the Chile Buyer).

Pursuant to the Chile Agreement, as of September 11, 2020, Laureate completed the divestiture of its operations in Chile through the transfer of control of its not-for-profit institutions, Universidad Andrés Bello, Universidad de Las Américas and Universidad Viña del Mar, to the Chile Buyer, and the sale of its for-profit operations, which includes the sale of Instituto Profesional AIEP to Universidad Andrés Bello. The not-for-profit institutions were consolidated by Laureate under the variable interest entity model. The cash proceeds received at closing, prior to transaction fees, were approximately $195,300. In addition, the purchase price includes a note receivable of $21,500 that is payable one year from the date of divestiture. At the closing date, the Chilean operations had a cash balance (cash sold) of approximately $288,000 that was transferred to the Chile Buyer as part of the transaction.

This divestiture resulted in a pre-tax loss of approximately $344,500, which relates primarily to the accumulated foreign currency translation losses associated with the Chilean operations. The loss is recorded in loss on sales of discontinued operations in the Consolidated Statements of Operations for the three and nine months ended September 30, 2020. As discussed in Note 4, Discontinued Operations and Assets Held for Sale, during the second quarter of 2020, the Company recorded an impairment charge of approximately $418,000 related to the long-lived assets, indefinite-lived intangible assets and goodwill of the Chilean operations, in order to write down the carrying value of the Chilean operations assets to its estimated fair value.

On February 28, 2020, Exeter Street Holdings Sdn. Bhd., a Malaysia corporation (the Malaysia Seller), and LEI Holdings, LTD., a Hong Kong corporation (the Malaysia Seller Guarantor), each of which is an indirect wholly owned subsidiary of Laureate, entered into a Share Sale & Purchase Agreement (the Malaysia Sale Agreement) with HOPE Education Group (Hong Kong) Company Limited (the Malaysia Purchaser) and HOPE Education Group Co. Ltd. (the Malaysia Purchaser Guarantor).

Pursuant to the Malaysia Sale Agreement, the Malaysia Purchaser would purchase from the Malaysia Seller all of the issued and outstanding shares in the capital of Inti Education Holdings Sdn. Bhd., a Malaysia corporation (Inti Holdings), the Malaysia Seller’s Guarantor would guarantee certain obligations of the Malaysia Seller and the Malaysia Purchaser’s Guarantor would guarantee certain obligations of the Malaysia Purchaser. Inti Holdings was the indirect owner of INTI University and Colleges, a higher education institution with five campuses in Malaysia. In connection with the Malaysia Sale Agreement, the Malaysia Seller entered into a separate agreement with the current minority owner of the equity of Inti Holdings relating to the purchase by the Malaysia Seller of the minority owner’s 10.10% interest in Inti Holdings, the closing of which was a precondition to the closing of the transaction under the Malaysia Sale Agreement.

The sale of Inti Holdings was completed on September 29, 2020. The total purchase price, including the payment to the current minority owner, was $140,000. The closing of the transaction was subject to customary closing conditions, including approval by regulators in Malaysia. At the time of the signing of the Malaysia Sale Agreement in February 2020, the Malaysia Purchaser paid to the Malaysia Seller a cash deposit of $5,000, which the Company initially recorded as a liability pending the closing of the sale, and which was recognized as part of the gain on sale upon the closing of the transaction in September 2020. The cash proceeds received, prior to transaction fees and net of approximately $19,500 of cash sold, were approximately $116,300 and are included in Receipts from sales of discontinued operations, net of cash sold, and property and equipment within investing activities in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2020. In addition, the Malaysia Purchaser withheld $4,200 for taxes that the Company expects to receive during the fourth quarter of 2020. The payment to the minority owner for their 10.10% interest in Inti Holdings, which totaled approximately $13,700, was made in early October 2020. An additional $420, which represents the minority owner’s share of the taxes that were withheld as noted above, will be paid to the minority owner once received by the Company. The Company recognized a pre-tax gain on sale of approximately $45,200, which is included in the total gain/loss on sales of discontinued operations in the Consolidated Statements of Operations for the three and nine months ended September 30, 2020.

As previously disclosed, in August 2019, the Company completed the divestiture of its operations in Turkey. The total consideration included a deferred payment of $15,000 in the form of an instrument that was payable one year after closing. At the time of the divestiture, the Company determined that this deferred amount would be recognized if collected. In early October 2020, the Company received $8,436 of the deferred consideration. Accordingly, as of September 30, 2020, the Company recorded a receivable of $8,436, through a reduction to the loss on the sale of control of the Turkish operations. The outstanding amount is due in January 2021.