NOTE 3 – PLANNED DIVESTITURE OF AVEDA

As part of the overall operational and cost improvement plan of the Company, management and the board of directors had been evaluating how the Aveda business fits into the overall business strategy. In March 2020, the Company’s board of directors approved a plan for the sale of certain Aveda terminals located in Texas and Oklahoma.

The planned divestiture does not meet the quantitative and qualitative criteria to be classified as discontinued operations. As a result, the Aveda operations will continue to be reported in the Specialized Solutions segment results until the sale is finalized.

Effective with the designation as held for sale on March 31, 2020, the Company discontinued recording depreciation on property and equipment of this business and performed an impairment analysis of long-lived assets, as required by ASC 350 and 360. As a result of the analysis, impairment charges of $13.4 million were recorded for the three months ended March 31, 2020 consisting of property and equipment of $4.0 million, right-of-use assets of $3.2 million and tradename intangible assets of $6.2 million. The Company separately classified the related assets and liabilities of the business as held for sale in the consolidated balance sheet. Included in held for sale assets is $8.1 million of revenue equipment to be sold related to closed terminals. See Note 6 and 7 for details.

The principal components of the assets and liabilities held for sale are as follows as of March 31, 2020 (in millions):


	March 31,
	2020
Assets
Accounts receivable	$	28.3
Prepaid and other current assets		8.8
Property and equipment, net		30.1
Right-of-use assets		2.6
Total assets held for sale	$	69.8

Liabilities
Accounts payable	$	5.2
Accrued expenses and other liabilities		9.4
Other liabilities		4.2
Deferred tax liabilities		(5.7)
Total liabilities held for sale	$	13.1

The following table reflects revenues, operating income (loss) and net loss of Aveda’s held for sale operations for the three months ended March 31, 2020 and 2019 (in millions):


	Three Months Ended March 31,
	2020		2019

Total revenue	$	32.2	$	42.0
Operating income (loss)	$	(11.9)	$	0.1
Net loss	$	(12.2)	$	(0.6)