Discontinued Operation and Held for Sale (Notes)

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operation and Held for Sale

As previously disclosed in Note 1, on April 23, 2020, the Company made a decision to divest of Pool. The Pool business met the criteria for held for sale classification. As a result, the assets and liabilities of Pool are presented separately under the captions “Current assets held for sale”, “Noncurrent assets held for sale”, “Current liabilities held for sale” and “Noncurrent liabilities held for sale” in the Consolidated Balance Sheets as of December 31, 2020 and 2019. The results of Pool were reclassified to “(Loss) income from discontinued operation, net of tax” in the Consolidated Statements of Comprehensive Income for the years ended December, 31, 2020, 2019 and 2018. Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and have been reallocated to continuing operations. These costs were reclassified to the eliminations and other column in the segment reconciliation in Note 11, Segment Reporting.

Upon meeting the criteria for held for sale classification and in each subsequent reporting period, the Company evaluated whether Pool’s estimated fair value, less costs to sell, exceeded the net carrying value. The annual goodwill impairment analysis conducted as of June 30, 2020 indicated that the fair value in excess of the carrying value related to the Pool reporting unit was approximately 5% and in the third quarter of 2020, the Company concluded the estimated fair value, less costs to sell, exceeded the net carrying value and there were no indicators of impairment for the Pool reporting unit.

However, in response to the longer than expected macroeconomic conditions caused by the COVID-19 pandemic and status of negotiations to sell the Pool business, a strategic review of the business was completed in the fourth quarter of 2020 along with revised forecasts to include updated market conditions and strategic operating decisions. The revised forecasts indicated an impairment of the entire goodwill balance of the Pool reporting unit was necessary as of December 31, 2020. A non-cash charge of approximately $5,406 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020. In addition, the Company recorded a valuation allowance against the net assets held for sale to write down the carrying value to the estimated fair value less costs to sell. A non-cash valuation allowance of approximately $22,978 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020.

The fair value was estimated based on a combination of an income approach using a discounted cash flow model, and a market approach, which considers comparable companies. Estimates of future cash flows are based on various factors, including current operating results, expected market trends and competitive influences. Refer to Note 3, Acquisitions, Goodwill, Intangible Assets and Other Long-Lived Assets for further discussion about the estimation of fair value.

On February 12, 2021, the Company completed the sale of the Pool business for $8,000 in cash and up to a $12,000 earn-out based on an earnings before interest, taxes, depreciation and amortization attainment. See Note 13, Subsequent Events, for further discussion.

Summarized Held for Sale and Discontinued Operation Financial Information

A summary of the carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities held for sale in the Consolidated Balance Sheets, is as follows:






	December 31, 2020		December 31, 2019
Assets
Current assets:

Accounts receivable, less allowance of $86 in 2020 and $48 in 2019	$	19,740	$	13,983
Other current assets	1,262		969

Total current assets held for sale	$	21,002	$	14,952

Property and equipment	$	48,905	$	53,166
Less accumulated depreciation and amortization	28,890		32,891
Net property and equipment	20,015		20,275
Operating lease right-of-use assets	46,865		46,487
Goodwill	—		5,406
Other acquired intangibles, net of accumulated amortization of $12,679 in 2020 and $12,359 in 2019	2,621		2,941

Deferred income taxes	3,253		—
Other assets	3,321		1,595
Valuation allowance on assets held for sale	(22,978)		—
Total noncurrent assets held for sale	$	53,097	$	76,704


Liabilities
Current liabilities:
Accounts payable	$	4,002	$	4,575
Accrued expenses	5,070		5,668
Other current liabilities	27		2

Current portion of operating lease liabilities	16,825		14,729
Total current liabilities held for sale	$	25,924	$	24,974


Operating lease liabilities, less current portion	$	30,024	$	31,847
Other long-term liabilities	4,551		2,368
Deferred income taxes	—		2,728
Total noncurrent liabilities held for sale	$	34,575	$	36,943

A summary of the results of operations classified as a discontinued operation, net of tax, in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018 is as follows:







	Year ended
	December 31, 2020		December 31, 2019		December 31, 2018






Operating revenue	$	141,433	$	195,208	$	183,273

Operating expenses:
Purchased transportation	33,979		52,867		49,323
Salaries, wages and employee benefits	65,695		77,162		70,596
Operating leases	21,982		18,918		17,488
Depreciation and amortization	1,657		5,715		6,352
Insurance and claims	6,205		6,707		5,611
Fuel expense	4,279		6,462		6,961
Other operating expenses	17,587		20,969		22,126
Impairment charge	28,384		—		—
Total operating expenses	179,768		188,800		178,457
(Loss) income from discontinued operation before income taxes	(38,335)		6,408		4,816






Income tax (benefit) expense	(9,301)		1,631		1,328

(Loss) income from discontinued operation, net of tax	$	(29,034)	$	4,777	$	3,488