ASSETS HELD FOR SALE |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ASSETS HELD FOR SALE | ASSETS HELD FOR SALE As previously disclosed, on January 24, 2021, we entered into a definitive agreement to divest our UPS Freight business to TFI International Inc. ("TFI") for $800 million, subject to working capital and other adjustments.
As of December 31, 2020, we classified the UPS Freight business as held for sale and, as a result, recognized a total pre-tax impairment charge of $686 million ($629 million after tax), comprised of a goodwill impairment charge of $494 million and a valuation allowance of $192 million to adjust the carrying value of the disposal group to fair value less cost to sell. As of March 31, 2021, we increased the valuation allowance by $66 million ($50 million after tax) to adjust the carrying value of the disposal group to our revised estimate of fair value less cost to sell.
On April 30, 2021, we completed the divestiture of UPS Freight for cash proceeds of $848 million, which includes our current estimate of working capital and other adjustments. In connection therewith, we recorded a pre-tax gain of $101 million ($77 million after tax) for the three months ended June 30, 2021. For the six months ended June 30, 2021, we recorded a net pre-tax gain of $35 million ($27 million after tax). The activity was recognized within Other expenses in the statements of consolidated income.
Self-insurance reserves for the UPS Freight business and obligations for benefits earned within UPS-sponsored pension and postretirement medical benefit plans have been retained by us and remain on our consolidated balance sheets. In connection with the sale of UPS Freight, we remeasured and amended certain of our company-sponsored U.S. pension and postretirement medical benefit plans in the second quarter, resulting in a $2.1 billion reduction in the obligations included in our consolidated balance sheet at June 30, 2021. The impacts of the plan remeasurements and plan amendments on the statements of consolidated income are included in the gains on sale recorded for the quarter and year-to-date periods ended June 30, 2021. See further discussion in note 8.
At transaction close, UPS and TFI entered into an agreement for UPS Freight to continue to utilize our U.S. Domestic Package network to fulfill shipments for an initial period of five years. UPS also agreed to provide certain other services to TFI for a transitional period. We recognize our performance under commercial agreements as revenue in the statements of consolidated income. Expenses associated with commercial agreements are presented in the respective line items of operating expenses in the statements of consolidated income.
The following table summarizes the carrying values of the assets and liabilities classified as held for sale in our consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in millions):
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