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Acquisitions of Millis Transfer and Interstate Distributor Co. (Notes) | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | Acquisitions of Millis Transfer and Interstate Distributor Co. On August 26, 2019, Heartland Express, Inc. of Iowa (the “Buyer”) and Heartland Express, Inc., as guarantor, entered into an Acquisition and Merger Agreement with Millis Transfer. Millis Transfer is a truckload carrier headquartered in Black River Falls, Wisconsin, providing asset-based dry van truckload transportation services, including local, regional, and dedicated services. On July 6, 2017, Heartland Express Inc., of Iowa, (the "Buyer"), a wholly owned subsidiary of the "Company”, acquired IDC, a Washington corporation. In accordance with Internal Revenue Code Section 1361(b)(3)(C)(ii)(I) and (II), the transaction was treated for tax purposes as a sale of the assets of IDC by the seller to the Buyer, immediately followed by the Buyer’s contribution of such assets to IDC under Internal Revenue Code Section 351. The Stock Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. IDC was subsequently merged into the Buyer effective October 1, 2017. Pursuant to the Acquisition and Merger Agreement of the Millis Transfer acquisition, the Buyer acquired all of Millis Transfer’s outstanding equity (the “Transaction”). The Buyer paid $156.0 million of total consideration, including cash (net of working capital adjustment), restricted shares of the Company's common stock, and assumed indebtedness of Millis Transfer. With the Millis Transfer acquisition, total cash paid, net of working capital adjustment, and common stock issued of $62.7 million was funded out of the Company’s available cash and restricted shares of the Company's common stock issued from treasury stock. The transaction included the assumption of $93.3 million of Millis Transfer's indebtedness, of which no debt was outstanding at December 31, 2019. The Acquisition and Merger Agreement contains customary representations, warranties, covenants, escrow, and indemnification provisions. Pursuant to the acquisition of IDC in July of 2017, the company paid $93.0 million in cash, net of approximately $6.3 million of cash acquired. The following unaudited pro forma financial information for the years ended December 31, 2018 and December 31, 2019, assume that the acquisition of Millis occurred as of January 1, 2018. Pro forma adjustments reflected in the financial information below relate to accounting policy changes, such as changes in depreciation expense of revenue equipment, amortization of intangible assets, and accounting for certain operations and maintenance costs, along with other adjustments for terminal rent expense to align Millis results with those of the Company and income tax effects for the periods presented. The net effect of these pro forma adjustments increased net income by $3.0 million and $3.6 million for the periods ended December 31, 2019 and 2018, respectively.
| Year ended |  | Year ended
| December 31, 2019 |  | December 31, 2018
| (in thousands) |  |
Operating revenue | $694,672 |  |  | $760,917 |
Net income | $75,951 |  |  | $76,259 |
The Millis pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the periods presented or that may be obtained in the future. The following unaudited pro forma financial information for the year ended December 31, 2017, assumes that the acquisition of IDC occurred as of January 1, 2017. Pro forma adjustments reflected in the financial information below relate to accounting policy changes such as changes in depreciation expense of revenue equipment, amortization of intangible assets, and accounting for certain operations and maintenance costs, along with other adjustments for terminal rent expense to align IDC results with those of the Company and income tax effects for the periods presented. The net effect of these pro forma adjustments increased net income by $5.7 million for the year ended December 31, 2017.
| Year ended
| December 31, 2017
| (in thousands)
Operating revenue | $ | 756,498 |
Net income | $ | 72,752 |
The IDC pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the periods presented or that may be obtained in the future. The results of the acquired businesses have been included in the consolidated financial statements since the date of acquisition. Millis represented 21.1% of consolidated total assets as of December 31, 2019, and represented 8.8% of operating revenue for the twelve months ended December 31, 2019. Millis acquisition related expenses of $0.5 million are included in the consolidated statement of comprehensive income within the other operating expenses line item for the twelve months ended December 31, 2019. IDC acquisition related expenses of $0.9 million are included in the consolidated statement of comprehensive income for the year ended December 31, 2017. The allocation of the Millis purchase price is detailed in the tables below. The final purchase price allocation remains subject to other purchase accounting adjustments which may be identified, such as the final valuation of intangible assets, working capital adjustments, and income taxes, and therefore may differ materially from that reflected below. The goodwill recognized represents expected synergies from combining the operations of the Company with Millis Transfer, as well as other intangible assets that did not meet the criteria for separate recognition. Goodwill and intangible assets recognized in the transaction are not deductible for tax purposes. The assets and liabilities associated with Millis Transfer were recorded at their fair values as of the acquisition date and the amounts are as follows:
MILLIS TRANSFER ACQUISITION DATE FAIR MARKET VALUES | (in thousands)
Trade and other accounts receivable | $ | 14,474 |
Other current assets | 1,656 |
Property and equipment | 117,060 |
Other non-current assets | 802 |
Intangible assets | 15,300 |
Goodwill | 35,885 |
Total assets | 185,177 |
Accounts payable, accrued expenses, and current portion of long-term debt | (31,737) |
Insurance accruals | (4,371) |
Long-term debt | (70,191) |
Deferred taxes | (16,201) |
Total cash paid and common stock issued | $ | 62,677 |
MILLIS TRANSFER TOTAL PURCHASE PRICE CONSIDERATION | (in thousands)
Cash paid pursuant to Stock Purchase Agreement | $ | 61,927 |
Common stock issued pursuant to the Acquisition and Merger Agreement | 750 |
Total cash paid and common stock issued | $ | 62,677 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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