Forward Air Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations and Held for Sale (Notes)

Discontinued Operations and Held for Sale (Notes)

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Held for Sale [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations and Held for Sale

On April 23, 2020, the Board approved a strategy to divest Pool within the next year. Accordingly, Pool met the criteria for assets held for sale as of June 30, 2020. Pool assets and liabilities are reflected as “Assets and liabilities held for sale” on the Consolidated Balance Sheets in this report. In addition, the results of operations for Pool have been presented in this report as discontinued operations.

Upon meeting the assets held for sale criteria and during its annual impairment analysis, the Company evaluated whether Pool's estimated fair value, less costs to sell, exceeded the carrying value of its assets and liabilities. As a result of that assessment, we determined that the fair value of Pool exceeded its carrying value by approximately 5%.

The results of Pool were previously included in its own segment. The Company will continue to have two reporting segments: Expedited Freight and Intermodal, which is consistent with the way the Chief Operating Decision Maker reviews operating results and makes resource decisions (See Note 14, Segment Reporting). Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. These costs have been reclassified to the eliminations and other column in the segment reconciliation that appears in Note 14, Segment Reporting.

Summarized Held for Sale and Discontinued Operations Financial Information

The following table provides a reconciliation of the carrying amounts of major classes of assets and liabilities which are included in assets and liabilities held for sale in the accompanying Consolidated Balance Sheets as of each of the periods presented below:



	June 30, 2020		December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	—	$	—
Accounts receivable, less allowance of $124 in 2020 and $49 in 2019	11,224		13,983
Other current assets	647		969
Total current assets held for sale	$	11,871	$	14,952

Property and equipment	$	52,046	$	53,166
Less accumulated depreciation and amortization	32,443		32,891
Total property and equipment, net	19,603		20,275
Operating lease right-of-use assets	44,110		46,487
Goodwill and other acquired intangibles:
Goodwill	5,406		5,406
Other acquired intangibles, net of accumulated amortization of $12,679 in 2020 and $12,359 in 2019	2,621		2,941
Total goodwill and other acquired intangibles, net	8,027		8,347
Other assets	2,853		1,595
Total noncurrent assets held for sale	$	74,593	$	76,704

Liabilities
Current liabilities:
Accounts payable	$	2,732	$	4,575
Accrued expenses	5,163		5,668
Other current liabilities	—		2
Current portion of operating lease obligations	15,897		14,729
Total current liabilities held for sale	$	23,792	$	24,974

Operating lease obligations, less current portion	$	28,385	$	31,847
Other long-term liabilities	3,989		2,368
Deferred income taxes	3,951		2,728
Total noncurrent liabilities held for sale	$	36,325	$	36,943

The following table summarizes the results of operations classified as discontinued operations, net of tax, in the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019:



	Three months ended					Six months ended
	June 30, 2020			June 30, 2019		June 30, 2020			June 30, 2019
Operating revenue	$	13,974		$	42,869	$	50,926		$	85,379

Operating expenses:
Purchased transportation	3,147			11,688		12,683			23,151
Salaries, wages and employee benefits	8,394			16,437		25,507			32,842
Operating leases	4,966			4,202		10,646			8,498
Depreciation and amortization	362			1,454		1,657			2,993
Insurance and claims	1,287			1,472		3,013			2,856
Fuel expense	413			1,462		1,740			2,955
Other operating expenses	3,495			4,674		7,841			9,572
Total operating expenses	22,064			41,389		63,087			82,867
(Loss) income from discontinued operations before income taxes	(8,090		)	1,480		(12,161		)	2,512
Income tax (benefit) expense	(2,019		)	394		(3,049		)	706
(Loss) income from discontinued operations, net of tax	$	(6,071	)	$	1,086	$	(9,112	)	$	1,806