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Dispositions | 6 Months Ended
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Jun. 30, 2020
Discontinued Operations and Disposal Groups [Abstract] |
Dispositions | Discontinued Operations and Assets Held for Sale As discussed in Note 1, Description of Business, on August 9, 2018, the Company announced that it planned to focus on its principal markets and would divest certain of its other markets. The principal markets that would remain (the Continuing Operations) included Brazil, Chile, Mexico, and Peru, along with the Online & Partnerships segment and the institutions in Australia and New Zealand. At the time of the announcement on August 9, 2018, the markets being divested by sale (the Discontinued Operations) included the institutions in Portugal and Spain, which were part of the Andean segment, all remaining institutions in the Central America segment, and all remaining institutions in the Rest of World segment, except for Australia, New Zealand and the managed institutions in the Kingdom of Saudi Arabia and China. The institutions in the Kingdom of Saudi Arabia were managed under a contract that expired at the end of August 2019 and was not renewed. Accordingly, these institutions were disposed of other than by sale on August 31, 2019 and, beginning in the third quarter of 2019, have been included in Discontinued Operations for all periods presented. As of June 30, 2020, one VIE institution in Honduras is included in Discontinued Operations. The goal of the divestitures was to create a more focused and simplified business model and generate proceeds to be used for further repayment of long-term debt. As described in Note 5, Dispositions, a number of sale transactions closed during 2019 and 2020. The timing and ability to complete any of the remaining transactions is uncertain and will be subject to market and other conditions, which may include regulatory approvals and consents of third parties. Summarized operating results and cash flows of the Discontinued Operations are presented in the following tables:
For the three months ended June 30, | 2020 |  | 2019
Revenues | $ | 25,550 |  |  | $ | 157,347 |
Depreciation and amortization | — |  |  | 399 |
Share-based compensation expense | 6 |  |  | 106 |
Other direct costs | 23,274 |  |  | 126,202 |
Loss on impairment of assets | 9,967 |  |  | — |
Operating (loss) income | (7,697) |  |  | 30,640 |
Other non-operating (loss) income | (2,565) |  |  | 3,362 |
Pretax (loss) income of discontinued operations | (10,262) |  |  | 34,002 |
Income tax expense | (1,909) |  |  | (3,722) |
(Loss) income from discontinued operations, net of tax | $ | (12,171) |  |  | $ | 30,280 |
For the six months ended June 30, | 2020 |  | 2019
Revenues | $ | 58,796 |  |  | $ | 380,686 |
Depreciation and amortization | — |  |  | 834 |
Share-based compensation expense | 9 |  |  | 269 |
Loss on impairment of assets | 9,967 |  |  | — |
Other direct costs | 50,822 |  |  | 278,639 |
Operating (loss) income | (2,002) |  |  | 100,944 |
Other non-operating (loss) income | (10,582) |  |  | 6,528 |
Pretax (loss) income of discontinued operations | (12,584) |  |  | 107,472 |
Income tax expense | (3,391) |  |  | (13,863) |
(Loss) income from discontinued operations, net of tax | $ | (15,975) |  |  | $ | 93,609 |
Operating cash flows of discontinued operations | $ | (4,708) |  |  | $ | 31,309 |
Investing cash flows of discontinued operations | $ | (551) |  |  | $ | (11,561) |
Financing cash flows of discontinued operations | $ | (1,856) |  |  | $ | (31,964) |
Loss on Impairment of Assets During the second quarter of 2020, we recorded an impairment charge of $9,967 related to long-lived assets of our institution in Honduras, in order to write down the carrying value of those assets to their estimated fair value. The assets and liabilities of the Discontinued Operations, which are subject to finalization, have been classified as held for sale as of June 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.’ The carrying amounts of the major classes of assets and liabilities that were classified as held for sale are presented in the following tables:
| June 30, 2020 |  | December 31, 2019
Assets of Discontinued Operations |  |  |
Cash and cash equivalents | $ | 34,246 |  |  | $ | 55,401 |
Receivables, net | 20,840 |  |  | 14,762 |
Property and equipment, net | 119,696 |  |  | 182,530 |
Goodwill | 9,427 |  |  | 9,753 |
Tradenames | 6,832 |  |  | 6,890 |
Operating lease right-of-use assets, net | 25,572 |  |  | 59,231 |
Other assets | 25,863 |  |  | 52,730 |
Subtotal: assets of Discontinued Operations | $ | 242,476 |  |  | $ | 381,297 |
Other assets classified as held for sale |  |  |
Property and equipment, net | 7,010 |  |  | 8,476 |
Total assets held for sale | $ | 249,486 |  |  | $ | 389,773 |
| June 30, 2020 |  | December 31, 2019
Liabilities of Discontinued Operations |  |  |
Deferred revenue and student deposits | $ | 15,149 |  |  | $ | 14,287 |
Operating leases, including current portion | 26,493 |  |  | 63,304 |
Long-term debt and finance leases, including current portion | 31,778 |  |  | 55,495 |
Other liabilities | 45,257 |  |  | 56,032 |
Total liabilities held for sale | $ | 118,677 |  |  | $ | 189,118 |
Sale Agreement Pending Closure as of June 30, 2020 Inti Education Holdings Sdn. Bhd. (Inti Holdings) 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 will 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 will guarantee certain obligations of the Malaysia Seller and the Malaysia Purchaser’s Guarantor will guarantee certain obligations of the Malaysia Purchaser. Inti Holdings is 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 is a precondition to the closing of the transaction under the Agreement. The total purchase price, including the payment to the current minority owner, will be $140,000. The closing of the transaction is subject to customary closing conditions, including approval by regulators in Malaysia. In connection with the signing of the Malaysia Sale Agreement, the Malaysia Purchaser paid to the Malaysia Seller a cash deposit of $5,000, which the Company has recorded as a liability pending the closing of the sale and is 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 six months ended June 30, 2020. Dispositions Sale of Costa Rica Operations 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 six months ended June 30, 2020. The Costa Rica Buyer is controlled by certain affiliates of Sterling Capital Partners II, L.P. (Sterling II). Sterling II has the right to designate a director to the Laureate Board of Directors pursuant to a securityholders agreement, and Steven Taslitz currently serves as the Sterling-designated director. Mr. Taslitz did not participate in the Laureate Board of Directors’ consideration of the transaction, which was approved by Laureate's Audit Committee as a related party transaction. Sale of NewSchool of Architecture and Design, LLC (NSAD) 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 will be 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 $5,700, which is included in loss on sales of discontinued operations on the Consolidated Statement of Operations for the six months ended June 30, 2020. Sale of China Operations-Receipt of Escrow 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.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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