Discontinued Operations

3 Months Ended

Mar. 31, 2021

Discontinued Operations [Abstract]

Discontinued Operations

(2) Discontinued Operations

As discussed in Note 1, the Company sold substantially all of the assets of its logistics business for proceeds of $6.2 million and its remaining railcar assets for proceeds of $228.1 million during the quarters ended September 30, 2020 and December 31, 2020, respectively. The logistics and rail leasing businesses have been classified as discontinued operations in the accompanying unaudited consolidated statements of income and cash flows for the three months ended March 31, 2021 and 2020.

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The Company recognized an impairment charge of $19.2 million during the three months ended March 31, 2020 to reduce the book value of its railcar portfolio, on an individual basis, to its estimated fair value, or to its net book value had the assets not been classified as held for sale. To assist in the Company’s assessment of fair value, a third-party appraisal was carried out on the railcar fleet using a combination of cost and market approaches. The cost approach utilized the current replacement cost for a particular car type and calculated an estimated depreciation based on a railcar having a 40-year life and residual value being 10% of the estimated purchase price. The market approach estimated value based on recent market transactions involving similar railcars. The railcars were classified within Level 3 of the fair value hierarchy.

The following tables summarize the components of net income (loss) from discontinued operations in the accompanying unaudited consolidated statements of income for the three months ended March 31, 2021 and 2020 (in thousands). Revenue and operating expenses for the three months ended March 31, 2021 were a result of immaterial differences in the actual transactions from the amounts accrued prior to the sale of the logistics and railcar businesses in 2020.

	Three Months Ended March 31, 2021
	Rail		Logistics		Total
Revenue
Rail lease revenue	$	293	$	-	$	293
Total revenue		293		-		293
Operating expenses
Storage, handling and other expenses		(142)		-		(142)
Gain on sale of rental equipment		(33)		-		(33)
Administrative expenses		91		(240)		(149)
Total operating expenses		(84)		(240)		(324)
Operating income		377		240		617
Income before income taxes		377		240		617
Income tax (benefit) expense		(496)		50		(446)
Net income from discontinued operations	$	873	$	190	$	1,063

	Three Months Ended March 31, 2020
	Rail		Logistics		Total
Revenue
Rail lease revenue	$	5,803	$	-	$	5,803
Logistics revenue		-		30,106		30,106
Total revenue		5,803		30,106		35,909
Operating expenses
Impairment of rental equipment		19,167		-		19,167
Storage, handling and other expenses		1,319		-		1,319
Logistics transportation costs		-		26,815		26,815
Loss on sale of rental equipment		33		-		33
Administrative expenses		769		4,162		4,931
Total operating expenses		21,288		30,977		52,265
Operating loss		(15,485)		(871)		(16,356)
Interest expense (income)		2,105		(3)		2,102
Loss before income taxes		(17,590)		(868)		(18,458)
Income tax benefit		(4,255)		(204)		(4,459)
Net loss from discontinued operations	$	(13,335)	$	(664)	$	(13,999)