What changed in this filing

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Item 9A. Controls and Procedures

2024-03-15 compared with 2023-03-01 · 497 added, 338 removed, 1073 unchanged (44% of the section changed)

14 unchanged sentences

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2022, we implemented a new enterprise resource planning (“ERP”) system that replaced legacy systems in which our financial transactions were processed and recorded.

The new ERP system is a significant component of our disclosure controls and procedures.

As a result of this implementation, we modified certain existing internal controls over financial reporting and will continue to evaluate the operating effectiveness of related controls in subsequent periods.

Except for the implementation of the new ERP system, there were no changes in our internal control over financial reporting identified in connection with the evaluation described above that occurred during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

In our opinion, Forward Air Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2022 and 2021, the related consolidated statements of comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “financial statements”) and our report dated March 1, 2023 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “financial statements”) and our report dated March 15, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

17 unchanged sentences

Other Information

Not applicable.

During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading agreement” or “non-Rule 10b5-1 trading agreement,” as each term is defined in Item 408(a) of Regulation S-K.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

21 unchanged sentences

EXHIBIT INDEX

2.1 Agreement and Plan of Merger, dated as of August 10, 2023 by and among, among others, Forward Air Corporation and Omni Newco LLC (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023).

2.2 Amendment No.

1 to the Original Merger Agreement, dated January 22, 2024, by and among Forward Air Corporation and Omni Newco, LLC (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 2 4, 202 4 ).

3.1 Restated Charter of the registrant (incorporated herein by reference to Exhibit 3 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 28, 1999 (File No.

3.2 Amended and Restated Bylaws of the registrant

3.2 Amended and Restated Bylaws of the registrant (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13 , 202 3 ).

3.3 Articles of Amendment to the Restated Charter of Forward Air Corporation (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31 , 2024).

4.1 Form of Forward Air Corporation Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1998 filed with the Securities and Exchange Commission on November 16, 1998 (File No.

4.2 Description of Capital Stock

4.3 Indenture, dated as of October 2, 2023, by and among Clue Opco LLC (as successor to GN Bondco, LLC), as issuer, and U.S.

Bank Trust Company, National Association, as trustee and notes collateral agent (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

4.4 First Supplemental Indenture, dated as of January 25, 2024, by and among Clue Opco LLC, as issuer, Forward Air Corporation and the other guarantors party thereto, as guarantors, and U.S.

10.1 * Forward Air Corporation 2005 Employee Stock Purchase Plan (incorporated herein by reference to the registrant's Proxy Statement filed with the Securities and Exchange Commission on April 20, 2005 (File No.

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Schara and Forward Air Corporation (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 filed with the Securities and Exchange Commission on May 09, 2022)

10.38 Equity Purchase Agreement, dated December 20, 2023 by and between Forward Air Corporation, Forward Air Final Mile, LLC, FFM, LLC, Forward Air, Inc., FAF, Inc., and Hub Group, Inc.

(incorporated herein by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on Decem ber 27 , 20 23 )

10.39 Credit Agreement, dated as of December 19, 2023, by and among, GN Loanco, LLC, the other credit parties party thereto from time to time, Citibank, N.A.

and the lenders and L/C issuers party thereto from time to time (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.40 Escrow Release Date Assumption and Joinder Agreement, dated as of January 25, 2024, among GN Loanco, LLC, Clue Opco LLC, Forward Air Corporation, the subsidiary guarantors party thereto and Citibank, N.A.

(incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.41 Escrow Release Date Incremental Revolving Amendment, dated as of January 25, 2024, among Clue Opco LLC, the credit parties party thereto from time to time, the lenders party thereto from time to time and Citibank, N.A.

(incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.42 Shareholder Agreement, dated as of January 25, 2024, by and among, Forward Air Corporation, REP Omni Holdings, L.P.

and the other parties thereto (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.43 Shareholder Agreement, dated as of January 25, 2024, by and among, Forward Air Corporation, EVE Omni Investor, LLC and Omni Investor Holdings, LLC and the other parties thereto (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.44 Investor Rights Agreement, dated as of January 25, 2024, by and among Forward Air Corporation, REP Omni Holdings, L.P.

and Omni Investor Holdings L.P.

(incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.45 Tax Receivable Agreement, dated as of January 25, 2024, by and among Forward Air Corporation, Central States Logistics, Inc., Clue Opco LLC and the members from time to time party thereto (incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 31, 2024).

10.46 Amendment No.

2, dated as of February 12, 2024, among Clue Opco LLC, the revolving lenders party thereto and Citibank, N.A.

(incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1 5 , 2024).

21.1 Subsidiaries of the registrant

23.1 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

31.1 Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))

31.2 Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))

32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.

31.1 Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))

31.2 Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a) (17 CFR 240.13a-14(a))

32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.

32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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Chief Financial Officer and Treasurer

(Principal Financial Officer and Duly Authorized Officer)

(Principal Financial Officer, Principal Accounting Officer

and Duly Authorized Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Thomas Schmitt Chairman, President and Chief Executive Officer March 1, 2023

Thomas Schmitt (Principal Executive Officer)

/s/ Michael L.

Hance Interim Chief Executive Officer, Chief Legal Officer and Secretary March 15, 2024

Hance (Principal Executive Officer)

/s/ Rebecca J.

Garbrick Chief Financial Officer and Treasurer March 15, 2024

Garbrick (Principal Financial Officer)

Craig Carlock Lead Director March 1, 2023

Craig Carlock

Garbrick (Principal Financial Officer and Principal Accounting Officer)

/s/ George Mayes Chairman and Director March 15, 2024

/s/ Ronald W.

1 unchanged sentence

Amicarella Director March 15, 2024

/s/ Charles Anderson Director March 15, 2024

Charles Anderson

/s/ Valerie A.

2 unchanged sentences

Robert Campbell

/s/ George Mayes Director March 1, 2023

Craig Carlock Director March 15, 2024

Craig Carlock

/s/ Robert Edwards, Jr.

Director March 15, 2024

Robert Edwards, Jr.

/s/ Michael Hodge Director March 15, 2024

Michael Hodge

Michael Lynch Director March 15, 2024

Michael Lynch

/s/ Laurie A.

Tucker Director March 1, 2023

/s/ Chitra Nayak Director March 15, 2024

/s/ Scott Niswonger Director March 1, 2023

Scott Niswonger

/s/ Javier Polit Director March 15, 2024

/s/ Richard Roberts Director March 1, 2023

Richard Roberts

/s/ Christopher Schmachtenberger Director March 15, 2024

Christopher Schmachtenberger

/s/ Laurie A.

Tucker Director March 15, 2024

Gil West Director March 15, 2024

Annual Report on Form 10-K

44 unchanged sentences

Description of the Matter The liability for self-insurance loss reserves totaled $66.4 million at December 31, 2023 which includes self-insurance reserves for vehicle liability claims.

The long-term portion of this liability was included in “Other long-term liabilities,” and the remainder was included in “Insurance and claims accruals” on the Company’s Consolidated Balance Sheet.

The long-term portion of this liability was included in “Other long-term liabilities,” and the remainder was included in “Accrued expenses” on the Company’s Consolidated Balance Sheet.

As more fully described in Note 1 to the consolidated financial statements, the self-insurance reserves include estimates for both known claims and future claims development and are based on company-specific and industry data, as well as general economic information.

13 unchanged sentences

(In thousands, except share data)

2022 December 31,

December 31, 2023 December 31, 2022

Current assets:

Cash and cash equivalents $ 121,969 $ 45,822

Restricted cash equivalents 39,604 —

Accounts receivable, less allowance of $ 2,206 in 2023 and $ 3,129 in 2022

153,267 188,229

Other receivables, less allowance of $ — in 2022 and $ — in 2021

Other receivables 5,408 —

Prepaid expenses 25,682 24,769

Other current assets 1,098 10,553

Current assets held for sale — 34,942

Total current assets 347,028 304,315

Noncurrent restricted cash equivalents 1,790,500 —

Property and equipment, net of accumulated depreciation and amortization of $ 250,185 in 2023 and $ 218,145 in 2022

5 unchanged sentences

Other assets 58,863 51,739

Noncurrent assets held for sale — 101,027

Total assets $ 2,979,533 $ 1,208,076

6 unchanged sentences

Current portion of operating lease liabilities 44,344 42,266

Current liabilities held for sale — 13,861

Total current liabilities 237,094 169,398

1 unchanged sentence

Long-term debt, less current portion and debt issuance costs — 106,588

Long-term debt held in escrow 1,790,500 —

Operating lease liabilities, less current portion 71,598 92,903

1 unchanged sentence

Deferred income taxes 42,200 51,093

Noncurrent liabilities held for sale — 6,095

Shareholders’ equity:

13 unchanged sentences

(In thousands, except per share data)

2022 December 31,

2021 December 31,

December 31, 2023 December 31, 2022 December 31, 2021

Operating revenue $ 1,370,735 $ 1,679,634 $ 1,387,227

11 unchanged sentences

Interest expense, net ( 31,571 ) ( 5,138 ) ( 4,338 )

Other, net — — ( 3 )

Total other expense ( 31,571 ) ( 5,138 ) ( 4,338 )

2 unchanged sentences

Net income from continuing operations 42,803 179,414 106,879

(Loss) income from discontinued operation, net of tax — ( 10,232 ) ( 29,034 )

Income (loss) from discontinued operations, net of tax 124,548 13,777 ( 1,020 )

Net income and comprehensive income $ 167,351 $ 193,191 $ 105,859

Basic net income per share:

Basic net income (loss) per share:

Continuing operations $ 1.64 $ 6.66 $ 3.91

Discontinued operation — ( 0.37 ) ( 1.05 )

Discontinued operations 4.78 0.51 ( 0.04 )

Net income per basic share $ 6.42 $ 7.17 $ 3.87

$ 7.17 $ 3.87 $ 0.84

Diluted net income per share:

Diluted net income (loss) per share:

Continuing operations $ 1.64 $ 6.63 $ 3.89

Discontinued operation — ( 0.37 ) ( 1.05 )

Discontinued operations 4.77 0.51 ( 0.04 )

Net income per diluted share 1

$ 6.40 $ 7.14 $ 3.85

Dividends per share:

29 unchanged sentences

Net income — — — 167,351 167,351

Stock options exercised 3 — 206 — 206

Common stock issued under employee stock purchase plan 11 — 800 — 800

9 unchanged sentences

(In thousands)

2022 December 31,

2021 December 31,

December 31, 2023 December 31, 2022 December 31, 2021

Operating activities:

21 unchanged sentences

Payments on credit facility ( 178,500 ) ( 49,000 ) ( 150,000 )

Proceeds from long-term debt held in escrow 1,790,500 — —

Repayments of finance lease obligations ( 9,500 ) ( 6,108 ) ( 2,423 )

7 unchanged sentences

Contributions from subsidiary held for sale 240,572 7,508 6,939

Net cash used in financing activities of continuing operations ( 146,122 ) ( 31,502 ) ( 39,094 )

Net increase (decrease) in cash and cash equivalents of continuing operations 8,506 ( 2,938 ) ( 24,495 )

Net cash provided by (used in) financing activities of continuing operations 1,790,726 ( 138,668 ) ( 27,948 )

Net increase in cash, cash equivalents and restricted cash equivalents from continuing operations 1,906,251 8,506 ( 2,938 )

Cash from discontinued operation:

Net cash used in operating activities of discontinued operation — ( 4,635 ) ( 11,439 )

Net cash provided by (used in) investing activities of discontinued operation — 8,020 ( 1,201 )

Net cash (used in) provided by financing activities of discontinued operation — ( 3,385 ) 12,640

Net increase (decrease) in cash and cash equivalents 8,506 ( 2,938 ) ( 24,495 )

Cash and cash equivalents at beginning of period of continuing operations 37,316 40,254 64,749

Cash at beginning of period of discontinued operation — — —

Net increase (decrease) in cash and cash equivalents 8,506 ( 2,938 ) ( 24,495 )

cash at end of period of discontinued operation — — —

Cash and cash equivalents at end of period of continuing operations $ 45,822 $ 37,316 $ 40,254

Net cash (used in) provided by operating activities of discontinued operations ( 17,824 ) 8,929 ( 347 )

Net cash provided by (used in) investing activities of discontinued operations 258,525 ( 1,475 ) 7,286

Net cash used in financing activities of discontinued operations ( 240,701 ) ( 7,454 ) ( 6,939 )

Net increase (decrease) in cash, cash equivalents and restricted cash equivalents 1,906,251 8,506 ( 2,938 )

Cash, cash equivalents, and restricted cash equivalents at beginning of period of continuing operations 45,822 37,316 40,254

Cash at beginning of period of discontinued operations — — —

Net increase (decrease) in cash, cash equivalents, and restricted cash equivalents 1,906,251 8,506 ( 2,938 )

cash at end of period of discontinued operations — — —

Cash, cash equivalents, and restricted cash equivalents at end of period of continuing operations $ 1,952,073 $ 45,822 $ 37,316

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

December 31, 2023 December 31, 2022 December 31, 2021

Reconciliation of cash, cash equivalents, and restricted cash equivalents:

Cash and cash equivalents $ 121,969 $ 45,822 $ 37,316

Restricted cash equivalents 39,604 — —

Noncurrent restricted cash equivalents 1,790,500 — —

Total cash, cash equivalents, and restricted cash equivalents shown in the statement of cash flow:

$ 1,952,073 $ 45,822 $ 37,316

Non-cash activity:

Equipment acquired under finance leases $ 25,217 $ 14,422 $ 6,758

The accompanying notes are an integral part of the consolidated financial statements

5 unchanged sentences

Basis of Presentation and Principles of Consolidation

Forward Air Corporation and its subsidiaries (“Forward Air ” or the “Company ” ) is a leading asset-light freight and logistics company.

Forward Air Corporation and its subsidiaries (the “Company ” ) is a leading asset-light freight and logistics company.

The Company has two reportable segments:

1 unchanged sentence

The Company conducts business in the United States, Canada, and Mexico.

The Expedited Freight segment provides expedited regional, inter-regional and national less-than-truckload (“LTL ” ), truckload and final mile services.

The Expedited Freight segment provides expedited regional, inter-regional and national less-than-truckload (“LTL ” ) and truckload services.

Expedited Freight also offers customers local pick-up and delivery and other services including shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services.

1 unchanged sentence

Intermodal also offers dedicated contract and container freight station (“CFS ” ) warehouse and handling services.

The Company’s consolidated financial statements include Forward Air Corporation and its wholly-owned subsidiaries.

The Company’s consolidated financial statements includes the Company and its wholly-owned subsidiaries.

Intercompany accounts and transactions have been eliminated in consolidation.

On April 23, 2020, the Board of Directors (the “Board ”) of the Company approved a strategy to divest of the Pool Distribution business (“Pool ” ), and the sale of Pool was completed on February 12, 2021.

Pool provided high-frequency handling and distribution of time sensitive products to numerous destinations within a specific geographic region.

As a result of the strategy to divest of Pool, the results of operations for Pool were presented as a discontinued operation in the Consolidated Statements of Comprehensive Income for the prior periods.

The Company holds interests in certain wholly-owned subsidiaries of Omni Newco, LLC (“Omni”) that are considered Variable Interest Entities (“VIEs”).

VIEs are legal entities in which equity investors do not have sufficient equity at risk for the entity to independently finance its activities, or as a group, the holders of the equity investment at risk lack the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the expected losses of the entity or the right to receive expected residual returns of the entity.

Consolidation of a VIE is required if a reporting entity is the primary beneficiary of the VIE.

Investments in these VIEs are evaluated to determine if the Company is the primary beneficiary.

This evaluation gives appropriate consideration to the design of the entity and the variability that the entity was designed to create and pass along, the relative power of each party, and to the Company’s obligation to absorb losses or receive residual returns of the entity.

The Company concluded that the VIEs should be consolidated because the Company has (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses and the right to receive benefits, which could potentially be significant.

For changes in facts and circumstances, the Company re-assesses whether or not it is a primary beneficiary of a VIE.

Refer to Note 3, Acquisitions, for additional disclosures regarding the Company’s VIEs.

In December 2023, the Board of Directors (the “Board ”) of the Company approved a strategy to divest of the Final Mile business (“Final Mile ” ), and the sale of Final Mile was completed on December 20, 2023.

Final Mile provided delivery and installation of heavy bulky appliances such as washing machines, dryers, dishwashers and refrigerators throughout the United States.

As a result of the divestiture of the Final Mile business, the results of operations for Final Mile are presented as a discontinued operation in the Consolidated Statements of Comprehensive Income for all periods presented.

In addition, assets and liabilities were reflected as “assets and liabilities held for sale ” in the Consolidated Balance Sheets for the prior period.

Unless otherwise noted, amounts, percentages and discussion for all periods reflect the results of operations, financial condition and cash flows from the Company’s continuing operations.

2 unchanged sentences

The preparation of the consolidated financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and expenses during the reporting period.

generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and expenses during the reporting period.

Actual results could differ from those estimates.

Certain prior period amounts have been reclassified to conform to the current period presentation.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Cash and Cash Equivalents

2 unchanged sentences

The Company considers all investments with an original maturity of three months or less to be cash and cash equivalents.

Restricted Cash and Cash Equivalents

Restricted cash equivalents and noncurrent restricted cash equivalents are related to the amounts held in escrow in connection with the financing of the acquisition of Omni.

Amounts are restricted until the acquisition of Omni is closed.

Refer to Note 3, Acquisitions , for additional disclosures regarding the amounts held in escrow.

Allowance for Doubtful Accounts and Revenue Adjustments

The Company has a broad range of customers, including freight forwarders, third-party logistics (“3PL”) companies, passenger and cargo airlines, steamship lines, and retailers, located across a diverse geography.

The Company has a broad range of customers, including freight forwarders, third-party logistics companies, passenger and cargo airlines, steamship lines, and retailers, located across a diverse geography.

In circumstances in which the Company is aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a specific reserve in order to reduce the net recognized accounts receivable to the amount the Company reasonably believes will be collected.

3 unchanged sentences

Accounts are written off after all means of collection, including legal action, have been exhausted.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

The Company records an allowance for revenue adjustments as result of future billing rate changes.

20 unchanged sentences

Capitalized software also includes software acquired for internal use.

Property and equipment as of December 31, 2022 and 2021 consisted of the following:

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Property and equipment as of December 31, 2023 and 2022 consisted of the following:

December 31, 2023 December 31, 2022

Land $ 26,479 $ 26,479

12 unchanged sentences

Costs incurred in the preliminary project stage and post-implementation stage, which includes maintenance and training costs, are expensed as incurred.

Capitalized software costs are amortized over the straight-line method over three to five years and are recorded in “Prepaid expenses” and "Other assets" in the Consolidated Balance Sheets.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Capitalized software costs are amortized using the straight-line method over three to five years and are recorded in “Prepaid expenses” and “Other assets” in the Consolidated Balance Sheets.

Goodwill, Intangible Assets and Other Long-Lived Assets

13 unchanged sentences

Assets to be disposed of by sale are reported at the lower of the carrying amount or estimated fair value, less estimated costs to sell.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

The results of the Company’s goodwill impairment analyses conducted as of June 30, 2023, 2022 and 2021 indicated that no reduction in the carrying amount of the Company’s goodwill was required.

3 unchanged sentences

Acquisitions — 34,754 34,754

Acquisition adjustment — 4,678 4,678

Balance as of December 31, 2022 $ 121,091 $ 136,896 $ 257,987

Acquisitions — 34,754 34,754

Acquisition 20,629 — 20,629

Acquisition adjustment — 90 90

Balance as of December 31, 2023 $ 141,720 $ 136,986 $ 278,706

The Company’s accumulated goodwill impairment is $ 25,686 related to impairment charges the Company recorded during 2016 pertaining to its TLS reporting unit.

The Company’s accumulated goodwill impairment is $ 25,686 related to impairment charges the Company recorded during 2016 pertaining to its Truckload Services ("TLS") reporting unit.

The TLS reporting unit operates within the Expedited Freight reportable segment.

As of December 31, 2022, approximately $ 227,041 of goodwill is deductible for tax purposes.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

As of December 31, 2023, approximate ly $ 247,760 of goodwill is deductible for tax purposes.

The Company amortizes certain acquired identifiable intangible assets on a straight-line basis over their estimated useful lives, which range from one year to 20 years.

12 unchanged sentences

Acquisitions 21,655 272 — 21,927

Acquisition adjustment ( 5,162 ) ( 692 ) — ( 5,854 )

Balance as of December 31, 2022 $ 218,669 $ 6,406 $ 1,500 $ 226,575

Acquisitions 21,655 272 — 21,927

Acquisition 35,200 — — 35,200

Acquisition adjustment 45 1 — 46

Balance as of December 31, 2023 $ 253,914 $ 6,407 $ 1,500 $ 261,821

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Accumulated Amortization

Customer Relationships 1

Non-Compete Agreements Trade Names Total

Customer Relationships Non-Compete Agreements Trade Names Total

Balance as of December 31, 2021 $ 91,713 $ 5,567 $ 1,500 $ 98,780

6 unchanged sentences

Accrued expenses as of December 31, 2023 and 2022 consisted of the following:

2022 December 31,

December 31, 2023 December 31, 2022

Accrued payroll and related items $ 15,267 $ 21,919

1 unchanged sentence

Payables to Leased Capacity Providers 10,663 8,832

Accrued interest payable 1

Accrued expenses $ 62,948 $ 49,918

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

¹ Amounts held in escrow by the VIEs.

Other Current Liabilities

Other current liabilities as of December 31, 2023 and 2022 consisted of the following:

December 31, 2023 December 31, 2022

Income taxes payable $ 31,190 $ —

Accrued legal and professional fees 34,721 1,294

Other 5,816 2,650

Other current liabilities $ 71,727 $ 3,944

Self-Insurance Loss Reserves

1 unchanged sentence

The Company’s independent contractor fleet owners and owner-operators lease their equipment to the Company (“Leased Capacity Providers”) and own, operate and maintain their own tractors and employ their own drivers.

Department of Transportation (“DOT”) regulations, the Company is liable for bodily injury and property damage caused by the Leased Capacity Providers and employee drivers while they are operating equipment under the Company’s various motor carrier authorities.

Department of Transportation regulations, the Company is liable for bodily injury and property damage caused by the Leased Capacity Providers and employee drivers while they are operating equipment under the Company’s various motor carrier authorities.

The potential liability associated with any accident can be severe and occurrences are unpredictable.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

For vehicle liability, the Company retains a portion of the risk.

10 unchanged sentences

10/1/2023 to 10/1/2024

¹ Excluding the Final Mile business, which is primarily a brokered service.

¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident.

² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.

Also, from time to time, when brokering freight, the Company may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and the Company maintains third-party liability insurance coverage with a $ 100 deductible per occurrence for most of its brokered services.

Additionally, the Company maintains workers’ compensation insurance with a self-insured retention of $ 500 per occurrence.

1 unchanged sentence

The amount of self-insurance loss reserves and loss adjustment expenses is determined based on an estimation process that uses information obtained from both Company-specific and industry data, as well as general economic information.

The most significant assumptions used in the estimation process include determining the trend in loss costs, the expected consistency in the frequency and severity of claims incurred but not yet reported, changes in the timing of the reporting of losses from the loss date to the notification date, and expected costs to settle unpaid claims.

The Company estimates its self-insurance loss exposure by evaluating the merits and circumstances surrounding individual known claims and through actuarial analysis to determine an estimate of probable losses on claims incurred but not reported.

3 unchanged sentences

As of December 31, 2023 and 2022, the Company recorded self-insurance loss reserves of $ 66,374 and $ 67,860 , respectively, inclusive of reserves in excess of the self-insured retention limit that are expected to be reimbursed from insurance carriers.

As of December 31, 2022, $ 19,961 was recorded in “Insurance and claims accruals” and $ 48,693 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets.

As of December 31, 2021, $ 21,172 was recorded in “Insurance and claims accruals” and $ 44,477 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

As of December 31, 2023, $ 19,566 was recorded in “Accrued expenses” and $ 46,808 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets.

As of December 31, 2022, $ 19,167 was recorded in “Accrued expenses” and $ 48,693 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets.

As of December 31, 2023 and 2022, the Company recognized a receivable for insurance proceeds and a corresponding claims payable for vehicle liability and workers’ compensation claims in excess of the self-insured retention limit.

1 unchanged sentence

Revenue Recognition

Revenue is recognized when the Company satisfies the performance obligation by the delivery of a shipment in accordance with contractual agreements, bills of lading (“BOLs”) and general tariff provisions.

Revenue is recognized when the Company satisfies the performance obligation by the delivery of a shipment in accordance with contractual agreements, bills of lading and general tariff provisions.

The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those services pursuant to a contract with a customer.

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The Company does not recognize revenue in cases where collectibility is not probable, and defers recognition until collection is probable or payment is received.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

The Company generates revenue from the delivery of a shipment and the completion of related services.

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The incremental borrowing rate is estimated based on the contractual lease term and the Company’s applicable borrowing rate.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Business Combinations

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If contingent consideration is included as a component of the consideration, the Company values the consideration as of the acquisition date.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Income taxes are accounted for under the asset and liability method.

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Refer to Note 7, Income Taxes , for further discussion.

Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during each period.

Restricted shares have non-forfeitable rights to dividends and as a result, are considered participating securities for purposes of computing net income (loss) per common share pursuant to the two-class method.

Net income allocated to participating securities was $ 1,070 in 2022, $ 737 in 2021 and $ 385 in 2020.

Diluted net income (loss) per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

A reconciliation of net income (loss) attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the years ended December 31, 2022, 2021 and 2020 is as follows:

Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during each period.

A reconciliation of net income attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the years ended December 31, 2023, 2022 and 2021 is as follows:

2023 2022 2021

Net income and comprehensive income from continuing operations $ 42,803 $ 179,414 $ 106,879

Net (loss) income and comprehensive (loss) income from discontinued operation — ( 10,232 ) ( 29,034 )

Net income and comprehensive income from discontinued operations 124,548 13,777 ( 1,020 )

Net income attributable to Forward Air $ 167,351 $ 193,191 $ 105,859

Income allocated to participating securities from continuing operations ( 220 ) ( 993 ) ( 737 )

Loss allocated to participating securities from discontinued operation — 70 —

Income allocated to participating securities from discontinued operations ( 639 ) ( 77 ) —

Income allocated to participating securities ( 859 ) ( 1,070 ) ( 737 )

Numerator for basic and diluted net income per share for continuing operations $ 42,583 $ 178,421 $ 106,142

Numerator for basic and diluted net (loss) income per share for discontinued operation $ — $ ( 10,162 ) $ ( 29,034 )

Numerator for basic and diluted net (loss) income per share for discontinued operations $ 123,909 $ 13,700 $ ( 1,020 )

Denominator for basic net income per share - weighted-average number of common shares outstanding 25,913 26,783 27,155

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Continuing operations $ 1.64 $ 6.66 $ 3.91

Discontinued operation — ( 0.37 ) ( 1.05 )

Discontinued operations 4.78 0.51 ( 0.04 )

Net income per basic share $ 6.42 $ 7.17 $ 3.87

$ 7.17 $ 3.87 $ 0.84

Diluted net income (loss) per share:

Continuing operations $ 1.64 $ 6.63 $ 3.89

Discontinued operation — ( 0.37 ) ( 1.05 )

Discontinued operations 4.77 0.51 ( 0.04 )

Net income per diluted share 1

$ 6.40 $ 7.14 $ 3.85

1 Rounding may impact summation of amounts.

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Share-Based Compensation

The Company grants awards under the stock-based compensation plans to certain employees of the Company.

The Company grants awards under the stock incentive plans to certain employees of the Company.

The awards include stock options, restricted shares and performance shares.

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For certain performance shares, the fair value is the quoted market value of the Company’s common stock on the grant date less the present value of the expected dividends not received during the relevant period.

For these performance shares, the share-based compensation expense is recognized on a straight-line basis over the three-year vesting period based on the projected assessment of the level of performance that will be achieved.

For these performance shares, the share-based compensation expense is recognized on a straight-line basis over the vesting period based on the projected assessment of the level of performance that will be achieved.

The fair value of other performance shares that have a financial target of the Company’s total shareholder return as compared to the total shareholder return of a selected peer group, is estimated on the grant date using a Monte Carlo simulation model.

The share-based compensation expense is recognized on a straight-line basis over the three-year vesting period.

The share-based compensation expense is recognized on a straight-line basis over the vesting period.

All share-based compensation expense is recognized in salaries, wages and employee benefits in the Consolidated Statements of Comprehensive Income.

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The Company continued to cooperate with law enforcement in connection with the criminal investigation into those responsible for the Ransomware Incident.

For the year ended December 31, 2022 and 2021, expenses related to the Ransomware Incident were zero and $ 434 , respectively, which were recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income.

For the year ended 2021 expenses related to the Ransomware Incident were $ 434 , which were recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income.

No expenses were incurred for the years ended December 31, 2023 and 2022.

Expenses include costs to investigate and remediate the Ransomware Incident and legal and other professional services related to the incident.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The standard simplifies the accounting for income taxes by removing certain exceptions to the general principles of accounting for income taxes and improving consistent application of the principles.

ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted.

The Company adopted this standard as of January 1, 2021.

The adoption of the standard did not have a material impact on the Company’s results of operations, financial condition, or cash flows.

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the financial condition or the results of operations of the Company.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

New Accounting Pronouncements to be Adopted

In October 2021, FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The standard addresses the recognition of an acquired contract liability in a business combination and the recognition and measurement of contract assets and contract liabilities from revenue contracts acquired in a business combination.

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the adoption of ASU 2021-08 and the impact, if any, adoption will have on its operations, financial condition, or cash flows.

Discontinued Operation and Held for Sale

Discontinued Operations and Held for Sale

Sale of Final Mile

On December 20, 2023, the Company completed the sale of the Final Mile business for estimated total cash consideration of $ 260,916 .

As a result, the assets and liabilities of Final Mile have been presented separately under the captions “Current assets held for sale,” “Noncurrent assets held for sale,” “Current liabilities held for sale” and “Noncurrent liabilities held for sale” in the Consolidated Balance Sheets as of December 31, 2022.

The results of operations of Final Mile, as well as the gain realized on the sale of $ 155,829 , have been presented under the caption “ Income from discontinued operations, net of tax ” in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021.

As previously disclosed, on April 23, 2020, the Company made a decision to divest of Pool and the sale was completed on February 12, 2021.

As a result, the results of Pool were classified to “Loss from discontinued operation, net of tax” in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2021 and 2020.

As a result, the results of Pool were classified to “Loss from discontinued operations, net of tax” in the Consolidated Statements of Comprehensive Income for the year ended December 31, 2021.

Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and were allocated to continuing operations.

These costs were classified to the eliminations column in the segment reconciliation in Note 12, Segment Reporting.

Held for Sale

Upon meeting the criteria for held for sale classification and in each subsequent reporting period, the Company evaluated whether Pool’s estimated fair value, less costs to sell, exceeded the net carrying value.

The annual goodwill impairment analysis conducted as of June 30, 2020 indicated that the fair value in excess of the carrying value related to the Pool reporting unit was approximately 5 % and in the third quarter of 2020, the Company concluded the estimated fair value, less costs to sell, exceeded the net carrying value and there were no indicators of impairment for the Pool reporting unit.

However, in response to the longer than expected macroeconomic conditions caused by the COVID-19 pandemic and status of negotiations to sell the Pool business, a strategic review of the business was completed in the fourth quarter of 2020 along with revised forecasts to include updated market conditions and strategic operating decisions.

The revised forecasts indicated an impairment of the entire goodwill balance of the Pool reporting unit was necessary as of December 31, 2020.

A non-cash charge of approximately $ 5,406 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020.

In addition, the Company recorded a valuation allowance against the net assets held for sale to write down the carrying value to the estimated fair value less costs to sell.

A non-cash valuation allowance of approximately $ 22,978 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020.

The fair value was estimated based on a combination of an income approach using a discounted cash flow model, and a market approach, which considers comparable companies.

Estimates of future cash flows are based on various factors, including current operating results, expected market trends and competitive influences.

Refer to Note 1, Operations and Summary of Significant Accounting Policies , for further discussion about the estimation of fair value.

On February 12, 2021, the Company completed the sale of the Pool business for $ 8,000 in cash and up to a $ 12,000 earn-out based on earnings before interest, taxes, depreciation and amortization.

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The fair value was based on the estimated eleven-month period of the earnings before interest, taxes, depreciation and amortization and was calculated using a Monte Carlo simulation model.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

The weighted average assumptions under the Monte Carlo simulation model were as follows:

February 12, 2021

Counterparty credit spread 1.2 %

Earnings before interest, taxes, depreciation and amortization discount rate 15.0 %

Asset volatility 55.0 %

Subsequent to the date of sale, the Company recognized any increases in the carrying value of the earn-out asset when the change was realized and evaluated the earn-out asset for impairment at each reporting period.

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The TSA ended in October 2021 when all services were completed.

Additionally, under the TSA, the Company remitted payments to outside vendors on behalf of TOG FAS Holdings LLC for expenses incurred by the Pool business up to a limit of $ 18,000 .

The Company is reimbursed by TOG FAS Holdings LLC within 60 days from the end of the month in which the payment is remitted.

As of December 31, 2021, the Company recorded a receivable in the amount o f $ 8,097 in “Other receivables ” in the Consolidated Balance Sheets for the reimbursement due to the Company.

The Company evaluated the collectability of the receivable at least quarterly and if the Company was aware of the inability of TOG FAS Holdings LLC to meet its financial obligations to the Company, the Company recorded a specific reserve in order to reduce the receivable to the amount the Company reasonably believes will be collected.

As of December 31, 2022, the outstanding receivable balance was collected in full.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

Summarized Discontinued Operation Financial Information

A summary of the results of operations classified as a discontinued operation, net of tax, in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 is as follows:

Summarized Held for Sale and Discontinued Operation Financial Information

A summary of the carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities held for sale in the Consolidated Balance Sheets, is as follows:

December 31, 2022

Current assets:

Accounts receivable, less allowance of $ 29 in 2022

Prepaid expenses 5

Other current assets 2,138

Total current assets held for sale $ 34,942

Property and equipment, net of accumulated depreciation and amortization of $ 2,524

Operating lease right-of-use assets 10,768

Goodwill 48,197

Other acquired intangibles, net of accumulated amortization of $ 12,332 in 2022

Other assets 92

Total noncurrent assets held for sale $ 101,027

Current liabilities:

Accounts payable $ 4,507

Accrued expenses 4,373

Other current liabilities 13

Current portion of debt and finance lease obligations 128

Current portion of operating lease liabilities 4,840

Total current liabilities held for sale $ 13,861

Finance lease obligations, less current portion $ 133

Operating lease liabilities, less current portion 5,962

Total noncurrent liabilities held for sale $ 6,095

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

A summary of the results of operations classified as a discontinued operations, net of tax, in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 is as follows:

December 31, 2023 December 31, 2022 December 31, 2021

Operating revenue $ 273,873 $ 293,769 $ 292,976

9 unchanged sentences

Total operating expenses 266,807 275,384 288,083

Loss from discontinued operation — ( 7,383 ) ( 38,335 )

Loss on sale of business — ( 2,860 ) —

Loss from discontinued operation before income taxes — ( 10,243 ) ( 38,335 )

Income tax (benefit) expense — ( 11 ) ( 9,301 )

Loss from discontinued operation, net of tax $ — $ ( 10,232 ) $ ( 29,034 )

Expedited Freight

In May 2021, the Company acquired certain assets and liabilities of J&P Hall Express Delivery (“J&P”) for $ 7,670 .

J&P is headquartered in Atlanta, Georgia with a second terminal in Albany, Georgia.

The acquisition of J&P supports the Company’s strategic growth plan by expanding pickup and delivery, less-than-truckload, truckload, less than container load, container freight station warehousing, and airport transfer services across the Southeastern United States.

The acquisition was funded using cash flows from operations.

The results of J&P have been included in the Company’s Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Expedited Freight reportable segment.

In February 2021, the Company acquired certain assets and liabilities of Proficient Transport Incorporated and Proficient Trucking, Inc.

(together “Proficient Transport ” ) for $ 16,339 and a potential earn-out up to $ 2,000 .

Proficient Transport is an intermodal drayage company headquartered in Chicago, Illinois.

The acquisition of Proficient Transport supports the Company’s strategic growth plan by expanding the intermodal footprint in Georgia, Illinois, North Carolina, and Texas, and introduces a new location in Ohio.

The acquisition was funded using cash flows from operations.

The results of Proficient Transport have been included in the Company’s Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Intermodal reportable segment.

The purchase agreement for Proficient Transport included an earn-out up to $ 2,000 based on the achievement of certain revenue milestones over a one-year period, beginning March 1, 2021.

The estimated fair value of the earn-out liability

Income from discontinued operations 7,066 18,385 4,893

Gain (loss) on sale of business 155,829 — ( 2,860 )

Income from discontinued operations before income taxes 162,895 18,385 2,033

Income tax expense 38,347 4,608 3,053

Income (loss) from discontinued operations, net of tax $ 124,548 $ 13,777 $ ( 1,020 )

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

on the date of acquisition was $ 829 .

The fair value was based on the estimated one-year performance of the acquired customer revenue and was calculated using the option pricing method.

The assumptions used to calculate the estimated fair value of the earn-out under the option pricing method were as follows:

December 31, 2021 February 28, 2021

Risk-free rate 0.1 % 0.1 %

Revenue discount rate 9.8 % 8.3 %

Revenue volatility 24.2 % 27.3 %

The fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the option pricing method.

During the years ended December 31, 2022 and 2021, the fair value of the earn-out changed by ($ 294 ) and ($ 444 ), respectively , and the change in the fair value was recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income.

The one-year period ended in the first quarter of 2022 and the Company paid $ 91 in the second quarter of 2022 based on the terms of the purchase agreement.

As of December 31, 2021, the fair value of the earn-out liabili ty was $ 385 , which was reflected in “Other current liabilities” in the Consolidated Balance Sheets.

In November 2021, the Company acquired certain assets and liabilities of BarOle Trucking, Inc.

( “BarOle”) for $ 35,436 .

BarOle is an intermodal drayage company headquartered in Roseville, Minnesota.

The acquisition of BarOle provides additional capacity and resources to meet customer demands in the intermodal market, and extends the service footprint to the Minneapolis-Saint Paul, Minnesota area.

In addition, BarOle has a larger terminal location, which allows for further expansion in the future.

The acquisition was funded using cash flows from operations.

The results of BarOle have been included in the Company’s Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Intermodal reportable segment.

Expedited Freight

In January 2023, the Company acquired certain assets of Land Air Express, Inc.

(“Land Air”) for $ 56,567 .

Land Air, headquartered in Bowling Green, Kentucky, offers a variety of less-than-truckload services including guaranteed, standard, exclusive, same day, hot shot and pickup and delivery, and operates in over 25 terminals across the United States.

The acquisition of Land Air is expected to accelerate the expansion of the Company’s national terminal footprint, particularly in the middle part of the United States, and strategically position the Company to better meet the current and future needs of customers.

The acquisition was funded using cash flow from operations and proceeds from the Company’s credit facility.

The results of Land Air have been included in the Company’s Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company’s Expedited Freight reportable segment.

In May 2022, the Company acquired certain assets and liabilities of Edgmon Trucking, LLC (“Edgmon”) for $ 40,993 and a potential earn-out of up to $ 5,000 , based on the achievement of certain profit contribution milestones over a nineteen month period, beginning May 31, 2022.

1 unchanged sentence

The fair value was based on the estimated certain profit contribution during the nineteen month period and was calculated using the option pricing method.

The nineteen month period ended on December 31, 2023 and the certain profit contribution milestones were not achieved during that period.

Edgmon, headquartered in Kent, Washington, operates a terminal in Kent and a yard in Seattle, servicing both the Port of Seattle and the Port of Tacoma.

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The associated goodwill has been included in the Company’s Intermodal reportable segment.

Acquisition of Omni Newco, LLC

On January 25, 2024, (the “Closing”) the Company completed the acquisition of Omni Newco, LLC (the "Omni Acquisition") pursuant to the Agreement and Plan of Merger, dated as of August 10, 2023 (the “Merger Agreement”, and amended by Amendment No.

1, dated as of January 22, 2024, the “Amended Merger Agreement”).

Omni, headquartered in Dallas, Texas, is an asset-light, high-touch logistics and supply chain management company with customer relationships in high-growth end markets.

Omni delivers domestic and international freight forwarding, fulfillment services, customs brokerage, distribution, and value-added services for time-sensitive freight to U.S.-based customers operating both domestically and internationally.

Pursuant to the Amended Merger Agreement, through a series of transactions involving the Company’s direct and indirect subsidiaries (collectively, with the other transactions contemplated by the Amended Merger Agreement and the other Transaction Agreements referred to therein, the “Transactions”), acquired Omni for a combination of (a) $ 20,000 in cash and (b) (i) common equity consideration representing 5,135 shares of the Company’s outstanding common stock, par value $ 0.01 per share on an as-converted and as-exchanged basis (the “Common Equity Consideration”) and (ii) non-voting, convertible perpetual preferred equity consideration representing, if the Company’s shareholders give the Conversion Approval (as defined below), an additional 8,880 shares of common stock on an as-exchanged basis (the “Convertible Preferred Equity Consideration”).

The Common Equity Consideration represents, as of the Closing and before any Conversion Approval, approximately 16.5 % of the Company’s common stock, on a fully diluted, as-exchanged basis.

If the Company’s shareholders approve the conversion of the Convertible Preferred Equity Consideration to Forward Common Stock in accordance with the listing rules of NASDAQ (the “Conversion Approval”), the Common Equity Consideration and the Convertible Preferred Equity Consideration together will represent as of the Closing 35.0 % of the Company’s common stock on a fully diluted and as-exchanged basis.

Forward Air Corporation

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(In thousands, except per share data)

Prior to the consummation of the Transactions, the Company completed a restructuring, pursuant to which, among other things, the Company contributed all of its operating assets to Clue Opco LLC, a newly formed subsidiary of the Company (“Opco”).

Opco has been structured as an umbrella partnership C corporation through which the existing direct and certain indirect equityholders of Omni (“Omni Holders”), as of Closing, hold (i) a portion of the Common Equity Consideration in the form of units of Opco designated as “Class B Units” (“Opco Class B Units”) and corresponding Series B Preferred Units (as defined below) and (ii) a portion of the Convertible Preferred Equity Consideration in the form of units of Opco designated as “Series C-2 Preferred Units” (“Opco Series C-2 Preferred Units”).

Effective as of the Closing, the Company operates its business through Opco, which indirectly holds all of the assets and operations of the Company and Omni.

Opco is governed by an amended and restated limited liability company agreement of Opco that became effective at the Closing (“Opco LLCA”).

The portion of the transaction consideration paid to Omni Holders that is Common Equity Consideration consists of (a) shares of the Company’s common stock and (b) Opco Class B Units and corresponding Series B Preferred Units that are exchangeable at the option of the holders thereof into shares of the Company’s common stock pursuant to the Opco LLCA.

The portion of the transaction consideration paid to Omni Holders that is Convertible Preferred Equity Consideration consists of (a) Series C Preferred Units that will automatically convert into shares of the Company’s common stock upon the receipt of the Conversion Approval and (b) Opco Series C-2 Preferred Units that will be economically equivalent to Series C Preferred Units and will automatically convert into Opco Class B Units and corresponding Series B Preferred Units upon receipt of the Conversion Approval pursuant to the Opco LLCA.

If the Conversion Approval is obtained, the Convertible Preferred Equity Consideration will convert into (i) the Company’s common stock and (ii) Opco Class B Units and corresponding Series B Preferred Units.

In connection with the Transactions, the Company has agreed to use its reasonable best efforts to obtain the Conversion Approval at the first annual meeting of the Company’s shareholders following the Closing.

If the Company does not obtain the Conversion Approval at such annual meeting, then, so long as any Series C Preferred Units remain outstanding, the Company has agreed to continue to use its reasonable best efforts to obtain the Conversion Approval at each annual meeting of shareholders thereafter until the Conversion Approval is obtained.

At the Closing, the Company, Opco, Omni Holders and certain other parties entered into a tax receivable agreement (the “Tax Receivable Agreement”), which sets forth the agreement among the parties regarding the sharing of certain tax benefits realized by the Company as a result of the Transactions.

Pursuant to the Tax Receivable Agreement, the Company is generally obligated to pay certain Omni Holders 83.5 % of (a) the total tax benefit that the Company realizes as a result of increases in tax basis in Opco’s assets resulting from certain actual or deemed distributions and the future exchange of units of Opco for shares of securities of the Company (or cash) pursuant to the Opco LLCA, (b) certain pre-existing tax attributes of certain Omni Holders that are corporate entities for tax purposes, (c) the tax benefits that the Company realizes from certain tax allocations that correspond to items of income or gain required to be recognized by certain Omni Holders, and (d) other tax benefits attributable to payments under the Tax Receivable Agreement.

Series B Preferred Stock

Pursuant to Articles of Amendment to the Restated Charter of the Company filed with the Secretary of State of the State of Tennessee at the Closing (the “Charter Amendment”), the Company established the terms of a new series of preferred stock of the Company designated as “Series B Preferred Stock” (the “Series B Preferred Stock”), and, at the Closing, certain Omni Holders received fractional units (the “Series B Preferred Units”) each representing one one-thousandth of a share of the Company Series B Preferred Stock.

Each Series B Preferred Unit will, together with a corresponding Opco Class B Unit, be exchangeable at the option of the holder thereof into one share of the Company’s common stock.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Series C Preferred Stock

Pursuant to the Charter Amendment, the Company established the terms of a new series of convertible preferred stock of the Company designated as “Series C Preferred Stock” (the “Series C Preferred Stock”), and, at Closing, certain Omni Holders received fractional units (each, a “Series C Preferred Unit”) each representing one one-thousandth of a share of Series C Preferred Stock.

The liquidation preference of Series C Preferred Unit is equal to $ 110.00 per unit, subject to adjustment for any in-kind payment of the Annual Coupon as described below (the “Liquidation Preference”).

In addition, the Series C Preferred Units accrue on each anniversary of issuance a cumulative annual dividend (without any interim accrual) equal to the product of (a) a rate to be fixed at Closing (which equals the rate per annum equal to a spread of 3.50 % above the yield payable on the most junior tranche of debt issued in connection with the Transactions, rounded to the nearest 0.25%) multiplied by (b) the Liquidation Preference (the “Annual Coupon”).

The Annual Coupon will be paid, at the Company’s option, in cash or in-kind by automatically increasing the Liquidation Preference in an equal amount.

Senior Secured Notes

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection with the transaction, GN Bondco, LLC, a wholly owned subsidiary of Omni, (the “Escrow Issuer” and consolidated VIE) commenced a private offering of $ 725,000 aggregate principal amount of its 9.5 % senior secured notes due 2031 (the “Notes”) in a transaction exempt from registration under the Securities Act.

Upon closing of the Omni Acquisition, Opco assumed the Escrow Issuer’s obligations under the Notes.

The Notes bear interest at a rate of 9.5 % per annum, payable semiannually in cash in arrears on April 15 and October 15 of each year, commencing April 15, 2024.

The Notes were issued at 98.0 % of the face amount and will mature on October 15, 2031.

Notes were issued pursuant to an indenture dated as of October 2, 2023, between the Escrow Issuer and U.S.

Bank Trust Company, National Association, as trustee and notes collateral agent.

The Notes are guaranteed on a senior secured basis in an aggregate principal amount in excess of $ 100,000 .

Prior to October 15, 2026, Opco may redeem some or all of the Notes at any time and from time to time at a redemption price equal to 100.000 % of the principal amount thereof plus the applicable “make-whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

On or after October 15, 2026, Opco may redeem some or all of the Notes at the following prices (expressed as a percentage of principal), plus in each case accrued and unpaid interest, if any, to, but excluding, the redemption date:

(a) in the case of a redemption occurring during the 12-month period commencing October 15, 2026, at a redemption price of 104.750 %;

(b) in the case of a redemption occurring during the 12-month period commencing on October 15, 2027, at a redemption price of 102.375 %;

and (c) in the case of a redemption occurring on or after October 15, 2028, at a redemption price of 100.000 %.

In addition, at any time prior to October 15, 2026, Opco may redeem up to 40.000 % of the original aggregate principal amount of the Notes in an amount not to exceed the amount of net cash proceeds from one or more equity offerings at a redemption price equal to 109.5 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Upon the occurrence of a “change of control”, Opco will be required to offer to repurchase all of the outstanding principal amount of the Notes at a purchase price of 101.000 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Senior Secured Term Loan Facility

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection with the transaction.

GN Loanco, LLC, a wholly owned subsidiary of Omni, (the “Escrow Loan Borrower” and consolidated VIE), entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender on December 19, 2023.

Pursuant to the Credit Agreement, the Escrow Loan Borrower obtained senior secured term B loans in an aggregate principal amount of $ 1,125,000 (the “New Term Loans”) and the ability to draw down up to $ 400,000 under a line of credit (the “Revolving Credit Facility”).

The New Term Loans bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.

The base rate is equal to the highest of the following:

(i) the prime rate;

(ii) 0.50 % above the overnight federal funds rate;

and (iii) the one-month Term SOFR plus 1.00 %.

The applicable margin for Term SOFR loans is 4.50 % and the applicable margin for base rate loans is 3.50 %.

The New Term Loans are subject to customary amortization of 1.00 % per year.

The New Term Loans were issued at 96.0 % of the face amount and will mature on December 19, 2030.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

No borrowings under the Revolving Credit Facility were made in connection with the Omni Acquisition.

The Revolving Credit Facility will mature on January 25, 2029.

Loans made under the Revolving Credit Facility bear interest based, at Opco’s election, on (a) SOFR plus an applicable margin or (b) the base rate plus an applicable margin.

Until delivery of a compliance certificate in respect of the fiscal quarter ending June 30, 2024, the applicable margin for SOFR loans is 4.25 % and the applicable margin for base rate loans is 3.25 %.

Thereafter, the applicable margin can range from 3.75 % to 4.25 % for SOFR loans and from 2.75 % to 3.25 % for base rate loans, in each case depending on Opco’s first lien net leverage ratio, as set forth in the Credit Agreement.

Upon closing of the Omni Acquisition, Opco assumed the Escrow Loan Borrower’s obligations under the Credit Agreement, which were further secured by certain guarantors.

Opco’s obligations under the Credit Agreement are guaranteed on a senior secured basis by the Company and each of Opco’s existing and future domestic subsidiaries (subject to customary exceptions).

On February 12, 2024, Opco and the parties to the Credit Agreement entered into Amendment No.

2 (“Amendment No.

2”) to the Credit Agreement, which (a) modifies the financial performance covenant in the Credit Agreement by temporarily increasing the 4.50 :1.00 maximum consolidated first lien net leverage ratio permitted by the covenant to (i) 6.00 :1.00 (for the second and third quarters of 2024), (ii) 5.50 :1.00 (for the fourth quarter of 2024), (iii) 5.25 :1.00 (for the first quarter of 2025), (iv) 5.00 :1.00 (for the second quarter of 2025) and (v) 4.75 :1.00 (for the third quarter of 2025) and (b) reduces the revolving credit commitments available under the Credit Agreement from an aggregate principal amount of $ 400,000 to an aggregate principal amount of $ 340,000 .

Amendment No.

2 also amends certain other terms of the Credit Agreement.

Prior to the effectiveness of Amendment No.

2, on February 12, 2024, Opco repaid $ 80,000 aggregate principal amount of the New Term Loans outstanding under the Credit Agreement, together with all accrued and unpaid interest thereon.

Both the Notes and Revolving Facility contain covenants that, among other things, restrict the ability of the Company, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the credit agreement.

The Revolving Credit Facility's terms also include a financial covenant which requires the Company to maintain a specific leverage ratio.

As of the date of this report, the Company was in compliance with these aforementioned covenants.

As of December 31, 2023, the Company consolidated the activities of GN Bondco, LLC (VIE) and GN Loanco, LLC (VIE) with the proceeds from the Notes and New Term Loan recorded in “Noncurrent restricted cash equivalents” and the corresponding long-term debt recorded in “Long-term debt held in escrow” on the Consolidated Balance Sheets.

Pursuant to the Merger Agreement, the Company deposited the appropriate funds into escrow on behalf of GN Bondco, LLC and GN Loanco, LLC in connection with the interest accrued through the Closing Date.

For the interest funded but unpaid as of December 31, 2023, the corresponding amounts were recorded in “Restricted cash equivalents” and “Accrued expenses” on the Consolidated Balance Sheets.

Additionally, while held in escrow, the proceeds from the Notes and New Term Loan were invested in a liquid, short-term instrument.

The receivable for the interest earned through December 31, 2023 was recorded in “Restricted cash equivalents” and “Other receivables” on the Consolidated Balance Sheets.

Due to the timing of the Closing, the Company is evaluating the impact of this acquisition on its consolidated financial statements.

Therefore, the accounting for the acquisition is incomplete and disclosures including the pro forma consolidated results and adjustments, amounts of major assets acquired and liabilities assumed, fair value of the noncontrolling interest, valuation method used to determine the fair value of the consideration transferred, qualitative factors about the goodwill recognized, goodwill expected to be deductible for tax purposes and the amount of goodwill by reportable segment are not yet available.

Further disclosures regarding the impact of the acquisition will be provided in subsequent filings as the evaluation is finalized.

Due Diligence, Transaction and Integration Costs

For the year ended December 31, 2023, the Company recorded $ 57,490 of due diligence and transactions costs incurred in connection with the acquisition of Omni.

The due diligence, transaction and integration costs were recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Fair Value of Assets Acquired and Liabilities Assumed

Assets acquired and liabilities assumed as of the acquisition date are presented in the following table:

Proficient Transport J&P BarOle Edgmon

February 28, 2021 May 30, 2021 November 30, 2021 May 31, 2022

Edgmon Land Air

May 31, 2022 January 31, 2023

Tangible assets:

Cash $ — $ — $ — $ —

Accounts receivable $ 4,963 $ —

Prepaid expenses and other current assets — 32 — —

Property and equipment 613 738

Other assets 24 3 — —

Operating lease right-of-use assets — 1,355 — —

Total tangible assets 5,576 738

7 unchanged sentences

Current liabilities 1 —

Other liabilities — — — —

Finance lease obligations — — — —

Operating lease liabilities — 1,355 — —

Total liabilities assumed 1 —

Net assets acquired $ 40,993 $ 56,567

The preliminary purchase price for Edgmon has been allocated to assets acquired and liabilities assumed based on the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing.

The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to this acquisition, is subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation, including third-party valuations.

During the year ended December 31, 2022, the Company recorded measurement period adjustments to the provisional amounts initially recorded for acquired net working capital, acquired property and equipment and acquired customer relationships and non-compete agreements related to the BarOle acquisition.

The measurement period adjustment resulted in a $ 63 increase to net working capital, a $ 1,113 increase to acquired property and equipment and a combined $ 5,854 decrease to acquired customer relationships and non-compete agreements, with a corresponding net increase to goodwill.

The Company expects to finalize the Edgmon valuation as soon as practicable, but no later than one year from the acquisition date.

The estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:

Estimated Useful Lives

Proficient Transport J&P BarOle Edgmon

Customer relationships 8 years 12 years 9 years 9 years

Non-compete agreements 1 year 5 years 5 years 5 years

Edgmon Land Air

Customer relationships 9 years 15 years

Non-compete agreements 5 years —

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

In November 2022, the Company acquired certain assets and liabilities of Chickasaw Container Services, Inc.

(“CCS”), a privately held intermodal drayage provider.

The acquisition included two operating terminals in Mobile, Alabama and Memphis, Tennessee and will allow the company to expand intermodal drayage operations in the Mobile market while bolstering an already strong presence in the Memphis market.

In addition to drayage services, CCS also provides container storage and sales.

The Company paid $ 25,733 using cash on hand from operations.

The preliminary purchase price was allocated based on the estimated fair values as of the acquisition date.

The Company recorded $ 21,262 related to intangible assets and $ 4,471 related to tangible assets.

The Company expects to finalize the valuations as soon as practicable, but no later than one year from the respective acquisition date.

The results of CCS have been included in the Company's Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Company's Intermodal reportable segment.

Long-term debt consisted of the following as of December 31, 2023 and 2022:

2 unchanged sentences

Debt issuance costs — ( 418 )

108,082 156,966

Current portion of long-term debt — ( 1,494 )

Total long-term debt, less current portion $ — $ 106,588

As of December 31, 2022, the aggregate scheduled maturities of long-term debt, excluding the current portion of long-term debt are as follows:

In September 2017, the Company entered into a five-year senior unsecured revolving credit facility (the “Facility”) with a maximum aggregate principal amount of $ 150,000 , with a sublimit of $ 30,000 for letters of credit and a sublimit of $ 30,000 for swing line loans.

9 unchanged sentences

The Facility contains covenants that, among other things, restrict the ability of the Company, without the approval of the required lenders, to engage in certain mergers, consolidations, asset sales, dividends and stock repurchases, investments, and other transactions or to incur liens or indebtedness in excess of agreed thresholds, as set forth in the credit agreement.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Company also has to fulfill financial covenants with respect to a leverage ratio and an interest coverage ratio.

As of December 31, 2022, the Company was in compliance with the aforementioned covenants.

The Company also has to fulfill financial covenants with respect to a leverage ratio and an interest coverage ratio.

Under the amended Facility, interest accrues on the amounts outstanding under the Facility at the Company ’s option, at either (1) Bloomberg Short-Term Bank Yield Index rate (the “BSBY Rate ”), which cannot be less than zero , plus a margin ranging from 1.25 % to 1.75 % based on the Company ’s leverage ratio, or (2) the base rate, which cannot be less than 2.00 %.

1 unchanged sentence

Interest is payable in arrears for each loan that is based on the BSBY rate on the last day of the interest period applicable to each loan, and interest is payable in arrears on loans not based on the BSBY rate on the last day of each quarter.

The interest rate on the outstanding borrowings under the revolving credit facility was 4.85 % and 1.43 % as of December 31, 2022 and 2021, respectively.

The interest rate on the borrowings outstanding under the credit facility was — % and 4.85 % as of December 31, 2023 and December 31, 2022, respectively.

Letters of Credit

The Company has an arrangement under the Facility to issue letters of credit, which guarantee the Company’s obligations for potential claims exposure for insurance coverage.

As of both December 31, 2022 and December 31, 2021, outstanding letters of credit totaled $ 20,034 .

As of December 31, 2023 and December 31, 2022, outstanding letters of credit totaled $ 19,834 and $ 20,034 , respectively.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Interest Payments

5 unchanged sentences

Cash Dividends

For each quarter of 2022, the Company’s Board of Directors declared and the Company has paid a quarterly cash dividend of $ 0.24 per common share.

For each quarter of 2021, the Company’s Board of Directors declared and the Company paid a quarterly cash dividend of $ 0.21 per common share.

On February 7, 2023, the Company’s Board of Directors declared a quarterly cash dividend o f $ 0.24 per common share that will be paid in the first quarter of 2023.

For each quarter of 2023 and 2022, the Board declared and the Company has paid a quarterly cash dividend of $ 0.24 per common share.

For each quarter of 2021, the Board declared and the Company paid a quarterly cash dividend of $ 0.21 per common share.

Share Repurchase Program

On February 5, 2019, the Board of Directors approved a stock repurchase plan authorizing the repurchase of up to 5,000 shares of the Company’s common stock (the “2019 Repurchase Plan”).

On February 5, 2019, the Board approved a stock repurchase plan authorizing the repurchase of up to 5,000 shares of the Company’s common stock (the “2019 Repurchase Plan”).

The 2019 Repurchase Plan expires when the shares authorized for repurchase are exhausted or the 2019 Repurchase Plan is canceled.

During the year ended December 31, 2022, the Company repurchased through open market transactions 600 s hares of common stock for $ 62,771 , or an average of $ 104.53 per share, and during the year ended December 31, 2021, the Company repurchased through open market transactions 535 shares of common stock for $ 48,989 , or an average of $ 91.46 per share.

All shares received wer e retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in the Consolidated Balance Sheets.

During the year ended December 31, 2023, the Company repurchased through open market transactions 883 shares of common stock for $ 93,811 , or an average of $ 106.21 per share, and during the year ended December 31, 2022, the Company repurchased through open market transactions 600 shares of common stock for $ 62,771 , or an average of $ 104.53 per share.

All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in the Consolidated Balance Sheets.

As of December 31, 2023, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 1,349 shares.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Stock Incentive Plan

8 unchanged sentences

As of December 31, 2023, approximately 581 shares remain available for grant under the Omnibus Plan.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Stock Options

2 unchanged sentences

Stock options vest over a three-year period from the date of grant.

For stock option awards, under the Plan, the exercise price is equal to the price of the Company’s common stock on the date of grant.

For stock option awards, under the Omnibus Plan, the exercise price is equal to the price of the Company’s common stock on the date of grant.

Share-based compensation expense associated with these awards is amortized ratably over the vesting period.

The Company estimated the fair value of the grants using the Black-Scholes option-pricing model.

The weighted average grant-date fair value of the stock option awards granted under the Plan and the weighted average assumptions under the Black-Scholes option-pricing model were as follows for the years ended December 31, 2022, 2021 and 2020.

2022 December 31,

2021 December 31,

The weighted average grant-date fair value of the stock option awards granted under the Omnibus Plan and the weighted average assumptions under the Black-Scholes option-pricing model were as follows for the years ended December 31, 2023, 2022 and 2021.

December 31, 2023 December 31, 2022 December 31, 2021

Weighted average grant-date fair value $ 39.75 $ 28.91 $ 18.36

11 unchanged sentences

Outstanding as of December 31 370 $ 76.83

As of December 31, 2023 , the weighted average remaining contractual life of stock options outstanding was approximately three years and exercisable was approximatel y two years .

The total fair value of stock options vested during 2023, 2022, 2021 was $ — , $ 855 , and $ 922 , respectively.

As of December 31, 2023, the total share-based compensation expense related to unvested stock options not yet recog nized was $ 2,148 , and the weighted average period over which it is expected to be recognized is approximately two years .

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

As of December 31, 2022 , the weighted average remaining contractual life of stock options outstanding was approximately three years and exercisable was approximately two years .

The total fair value of stock options vested during 2022, 2021, 2020 was $ 855 , $ 922 , and $ 1,377 , respectively.

As of December 31, 2022, the total share-based compensation expense related to unvested stock options not yet recognized was $ 1,444 , and the weighted average period over which it is expected to be recognized is approximately two years .

The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives by groups of similar price on a continuing operations basis as of December 31, 2023:

4 unchanged sentences

100.93 - 115.42 112 5.6 110.64 19 106.11

As of December 31, 2022 , the total intrinsic value of outstanding and exercisable stock options was $ 14,642 and $ 13,390 , respectively.

370 $ 76.83 264 $ 64.74

As of December 31, 2023 , the total intrinsic value of both outstanding and exercisable stock options was $ 900 .

The total intrinsic value of stock options exercised during 2023, 2022 and 2021 was $ — , $ 142 and $ 2,137 , respectively.

Stock option transactions during the year ended December 31, 2023 on a discontinued operation basis were as follows:

Number of Shares Weighted Average Exercise Price

Outstanding as of January 1 — $ —

Granted 1 115.42

Exercised — —

Forfeited or Canceled ( 1 ) 115.42

Outstanding as of December 31 — $ —

Restricted Shares

11 unchanged sentences

Outstanding as of December 31 133 $ 104.87

The weighted average grant-date fair value of the restricted shares granted under the Plan during the years ended December 31, 2022 , 2021 and 2020 were $ 105.64 , $ 75.35 and $ 65.88 , respectively.

The total fair value of restricted shares that vested during 2022, 2021 and 2020 was $ 9,804 , $ 8,487 , and $ 9,180 , respectively.

As of December 31, 2022, the total share-based compensation expense related to restricted shares not yet recognized was $ 7,729 , and the weighted average period over which it is expected to be recognized is approximately two years .

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

The weighted average grant-date fair value of the restricted shares granted under the Omnibus Plan during the years ended December 31, 2023 , 2022 and 2021 were $ 114.46 , $ 105.52 and $ 75.37 , respectively.

The total fair value of restricted shares that vested during 2023, 2022 and 2021 was $ 7,833 , $ 9,246 , and $ 8,232 , respectively.

As of December 31, 2023, the total share-based compensation expense related to restricted shares not yet recognized was $ 8,207 , and the weighted average period over which it is expected to be recognized is approxi mately two ye ars .

Restricted share transactions on a discontinued operation basis for the year ended December 31, 2023 were as follows:

Number of Shares Weighted Average Grant Date Fair Value

Outstanding as of January 1 13 $ 87.96

Granted 5 115.42

Vested ( 6 ) 82.07

Forfeited ( 12 ) 103.38

Outstanding as of December 31 — $ —

The weighted average grant-date fair value of the restricted shares granted under the Omnibus Plan during the years ended December 31, 2023 , 2022 and 2021 were $ 115.42 , $ 106.29 and $ 75.05 , respectively.

The total fair value of restricted shares that vested during 2023, 2022 and 2021 wa s $ 701 , $ 558 , and $ 619 , respectively.

Performance Shares

Certain executives and key employees are eligible to receive grants of performance awards.

The performance share agreement provides for awards based on achieving certain financial targets, such as targets for earnings before interest, taxes, depreciation and amortization, and the Company’s total shareholder return as compared to the total shareholder return of a selected peer group, as determined by the Company’s Board of Directors.

Performance targets are set at the beginning of each three-year measurement period.

7 unchanged sentences

The grant-date fair value of performance shares granted with a financial target based on the Company’s total shareholder return was estimated using a Monte Carlo simulation model.

The weighted average grant-date fair value of performance awards granted under the Plan and the weighted average assumptions under the Monte Carlo simulation model were as follows for the years ended December 31, 2022, 2021 and 2020:

2022 December 31,

2021 December 31,

The weighted average grant-date fair value of performance awards granted under the Omnibus Plan and the weighted average assumptions under the Monte Carlo simulation model were as follows for the years ended December 31, 2023, 2022 and 2021:

December 31, 2023 December 31, 2022 December 31, 2021

Weighted average grant-date fair value $ 120.27 $ 127.29 $ 87.33

2 unchanged sentences

Weighted average risk-free interest rate 4.2 % 1.6 % 0.2 %

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Performance award transactions for the year ended December 31, 2023 on a continuing operations basis were as follows assuming target levels of performance:

2 unchanged sentences

Granted 18 120.27

Additional shares awarded based on actual performance level achieved 4 68.75

Earned ( 31 ) 69.10

2 unchanged sentences

As of December 31, 2023, the total share-based compensation expense related to unearned performance awards not yet recognized, assuming the Company ’ s current projected assessment of the level of performance will be achieved, was $ 2,434 , and the weighted average period over which it is expected to be recognized is approximately two years .

The excess tax benefit realized for tax deductions in the United States related to the exercise of stock options, vesting of restricted stock and vesting of performance awards under the Pl an was $ 1,012 , $ 911 , and $ 2,340 for the years ended December 31, 2022, 2021 and 2020, respectively, on a continuing operations basis.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Total excess tax benefit realized for tax deductions in the United States related to the exercise of stock options, vesting of restricted stock and vesting of performance awards under the Omnibus Pl an was $ 2,518 , $ 1,012 , and $ 1,006 for the years ended December 31, 2023, 2022 and 2021, respectively.

Employee Stock Purchase Plan

18 unchanged sentences

1 Equal to the discount from the market value of the common stock at the end of each six month purchase period

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Director Restricted Shares

3 unchanged sentences

The restricted shares vest on the earlier of (a) the day immediately prior to the first annual shareholder meeting that occurs after the grant date or (b) one year after the grant date.

Each director may elect to defer receipt of the common shares until the director departs from the Company’s Board of Directors.

Each director may elect to defer receipt of the common shares until the director departs from the Board.

If a director elects to defer receipt, the Company will issue deferred stock units in which the director does not have voting rights or other incidents of ownership until the shares are issued.

11 unchanged sentences

Outstanding as of December 31 14 $ 96.10

2022 December 31,

2021 December 31,

December 31, 2023 December 31, 2022 December 31, 2021

Share-based compensation expense for restricted shares $ 1,329 $ 1,387 $ 1,436

20 unchanged sentences

A reconciliation of income taxes computed at the U.S.

federal statutory income tax rate (21.0% for 2022, 2021 and 2020) to the provision for income taxes reflected in the Company’s Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020 is as follows:

federal statutory income tax r ate (21.0% for 2023, 2022 and 2021) to the provision for income taxes reflected in the Company’s Consolidated Statements of Co mprehensive Income for the years ended December 31, 2023, 2022 and 2021 is as follows:

2023 2022 2021

14 unchanged sentences

Operating lease liabilities 29,658 37,599

Due diligence and transaction costs 13,953 —

Share-based compensation 4,995 4,458

13 unchanged sentences

Net deferred tax liabilities $ ( 42,200 ) $ ( 51,093 )

The Company paid income taxes, net of refunds, of $ 65,388 , $ 35,766 and $ 13,463 for the years ended December 31, 2022, 2021 and 2020, respectively.

The sale of Pool resulted in a capital loss in the amount of $ 4,253 , which expires in 2026.

The Company concluded that it was more likely than not that the capital loss carryforward will not be realized and therefore, established a valuation allowance of $ 4,253 to reserve against its capital loss carryforward.

The Company also maintains a valuation allowance to reserve against its state net operating loss carryforwards of $ 395 .

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and available tax planning strategies.

In making this assessment, all available evidence was considered including economic climate, as well as reasonable tax planning

The Company paid income taxes, net of refund s, of $ 20,842 , $ 65,388 and $ 35,766 for the years ended December 31, 2023, 2022 and 2021, respectively.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

The Company believes it is more likely than not that it will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

As a result of the Towne acquisition, the Company had approximately $ 2,000 of federal net operating losses which the Company fully utilized in 2020.

As of December 31, 2022, 2021 and 2020 the Company had state net operating loss carryforwards of $ 13,574 , $ 13,819 and $ 16,926 , respectively, that expire between 2022 and 2033.

In 2021, the sale of Pool resulted in a capital loss in the amount of $ 4,253 , which expires in 2026.

A valuation allowance of $ 4,253 was recorded against the capital loss carryforward as of both December 31, 2022 and 2021.

As of each reporting date, the Company considers new evidence, both positive and negative, that could affect the future realization of its deferred tax assets.

As of December 31, 2023, the Company determined that there is sufficient evidence based on the capital gain realized from the sale of Final Mile to conclude that it is more likely than not that the capital loss carryforward of $ 4,253 is realizable.

As a result, the Company realized a valuation allowance benefit in 2023, which was allocated to “ Income from discontinued operations, net of tax.” Therefore, the change in the valuation allowance recorded against the capital loss carryforward for the years ended December 31 2023, 2022 and 2021 was ($ 4,253 ), $ 23 and $ 4,230 , respectively.

As of December 31, 2023, 2022 and 2021 the Company had state net operating loss carryforw ards of $ 13,240 , $ 13,574 and $ 13,819 , respectively, that expire between 2023 and 2034.

The state net operating loss carryforwards are limited to the future taxable income of separate legal entities.

The Company maintains a valuation allowance to reserve against its state net operating loss carryforwards of $ 395 as of both December 31, 2023 and 2022.

There was no change in the valuation allowance for the state net operating loss carryforwards in 2023, 2022 and 2021.

A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company assessed the likelihood that its deferred tax assets would be recovered from estimated future taxable income and available tax planning strategies.

In making this assessment, all available evidence was considered including economic climate, as well as reasonable tax planning strategies.

The Company believes it is more likely than not that it will realize its remaining net deferred tax assets, net of the valuation allowance, in future years.

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of and during the years ended December 31, 2023 and 2022 is as follows:

7 unchanged sentences

The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain.

At December 31, 2022 and 2021, the Company had $ 198 and $ 241 , respectively, of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

At December 31, 2022 and 2021, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 85 and $ 88 , respectively.

As of December 31, 2023 and 2022, the Company had $ 153 and $ 198 , respectively, of unrecognized income tax benefits, all of which would affect the Company’s effective tax rate if recognized.

At December 31, 2023 and 2022, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 82 a nd $ 85 , respectively.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in “Interest expense, net” and “Other operating expenses”, respectively.

7 unchanged sentences

Noncancelable subleases expire between 2024 and 2028.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

The Company does not recognize a right-of-use asset or lease liability with respect to operating leases with an initial lease term of 12 months or less, and recognizes expense on such leases on a straight-line basis over the lease term.

6 unchanged sentences

In addition, the Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority.

The Company ’ s leases generally do not provide an implicit rate, and therefore, the Company applies its incremental borrowing rate using information available at lease commencement or modification to determine the present value of lease payments.

The incremental borrowing rate is an estimate based on the interest rate the Company would pay to borrow an amount equal to the lease payments on a collateralized basis and over a similar term, within a similar economic environment.

The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

The Company has contracts with Leased Capacity Providers.

16 unchanged sentences

1 Finance lease assets are recorded net of accumulated depreciation of $ 22,051 and $ 10,949 as of December 31, 2023 and 2022, respectively.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Total lease cost for 2023 and 2022 was as follows:

9 unchanged sentences

Total lease cost $ 506,167 $ 533,228

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2023 were as follows:

19 unchanged sentences

Finance leases 5.5 % 4.2 %

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

The following table summarizes the supplemental cash flow information for 2023 and 2022:

8 unchanged sentences

As of December 31, 2023, the Company had unconditional purchase obligations of $ 7,100 to purchase forklifts and other equipment during 2024.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Contingencies

On September 26, 2023, Rodney Bell, Michael A.

Roberts and Theresa Woods, three shareholders of the Company, filed a complaint (the “Shareholder Complaint”) against the Company and certain of its directors and officers in the Third District Chancery Court sitting in Greeneville, Tennessee.

The Shareholder Complaint alleges, among other things, that the Company’s shareholders have the right to vote on certain transactions contemplated by the Merger Agreement and sought an injunction against the consummation of the transaction until a shareholder vote was held.

The court initially granted a temporary restraining order enjoining the transactions contemplated by the Merger Agreement but later dissolved it on October 25, 2023.

Thereafter and as described below, on January 25, 2024, the parties to the Amended Merger Agreement completed the Omni Acquisition.

The case remains pending.

On October 31, 2023, Omni filed a complaint (the “Omni Complaint”) against the Company and certain of its direct and indirect subsidiaries in the Court of Chancery in the State of Delaware.

The Omni Complaint alleged, among other things, that the Company breached its obligation to close the transactions contemplated by the Merger Agreement and sought specific performance to compel the Company to close and related declaratory relief.

On January 22, 2024, the Company, Omni, and certain other parties entered into a Settlement and Release Agreement (the “Settlement Agreement”), settling all litigation claims that were the subject of proceedings pending in the matter of Omni Newco, LLC v Forward Air Corporation, et al, No.

2023-1104 (Del.

Ch.) (the “Transaction Litigation”) asserted under the Merger Agreement among the Company, Omni and the other parties thereto, and stipulating to the dismissal of the Transaction Litigation.

Pursuant to the Settlement Agreement, the parties agreed to enter into Amendment No.

On January 25, 2024, the Company, Omni, and certain other parties completed the Omni Acquisition as discussed in Note 3, Acquisitions .

The Company is party to various legal claims and actions incidental to its business, including claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits.

The Company accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Based on the knowledge of the facts, the Company believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our consolidated financial statements.

Based on the knowledge of the facts, the Company believes the resolution of such incidental claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our consolidated financial statements.

Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and related events unfold.

Insurance coverage provides the Company with primary and excess coverage for claims related to vehicle liability, workers’ compensation, property damage and employee medical benefits.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

For vehicle liability, the Company retains a portion of the risk.

10 unchanged sentences

10/1/2023 to 10/1/2024

¹ Excluding the Final Mile business, which is primarily a brokered service.

¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident.

³ During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Risk Retention before insurance will contribute.

² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.

Additionally, the Company maintains workers’ compensation insurance with a self-insured retention of $ 500 per occurrence.

4 unchanged sentences

Since the ultimate resolution of outstanding claims as well as claims incurred but not reported is uncertain, it is possible that the reserves recorded for these losses could change materially in the near term.

Although, an estimate cannot be made of the range of additional loss that is at least reasonably possible.

On December 15, 2020, the Company detected a Ransomware Incident impacting the Company’s operational and information technology systems, which caused service delays for the Company’s customers.

We incurred u nexpected costs and impacts from the Ransomware Incident, and may in the future, incur costs in connection with this Ransomware Incident.

Any failure to comply with data privacy, security or other laws and regulations could result in claims, legal or regulatory proceedings, inquires or investigations.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2022

(In thousands, except per share data)

Employee Benefit Plan

3 unchanged sentences

Fair Value of Financial Instruments

The Company categorizes its assets and liabilities into one of three levels based on the assumptions used in valuing the asset or liability.

Estimates of fair value financial assets and liabilities are based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.

In accordance with this guidance, fair value measurements are classified under the following hierarchy:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in markets that are not active;

and model-derived valuations in which all significant inputs are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 - Model-derived valuations in which one or more significant inputs are unobservable.

As previously discussed in Note 3, Acquisitions, the estimated fair value of the earn-out liability was determined using the option pricing method.

The significant inputs used to calculate the estimated fair value are derived from a combination of observable and unobservable market data.

Observable inputs used in the option pricing method include the risk-free rate and the revenue volatility while unobservable inputs include the revenue discount rate and the estimated revenue projections.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and 2021 are summarized below:

As of December 31, 2022

Level 1 Level 2 Level 3 Total

Earn-out liability $ — $ — $ — $ —

As of December 31, 2021

Level 1 Level 2 Level 3 Total

Earn-out liability $ — $ — $ 385 $ 385

Cash and cash equivalents, accounts receivable, other receivables, and accounts payable are valued at their carrying amounts in the Company’s Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

The carrying amount of long-term debt under the Company’s credit facility approximates fair value based on the borrowing rates currently available to the Company for a loan with similar terms and average maturity.

Cash, cash equivalents and restricted cash equivalents, accounts receivable, other receivables, and accounts payable are valued at their carrying amounts in the Company’s Consolidated Balance Sheets, due to the immediate or short-term maturity of these financial instruments.

As of December 31, 2023, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 38,926 , compared to its carrying value of $ 39,381 .

As of December 31, 2022, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 22,957 , compared to its carrying value of $ 23,531 .

The carrying value of the long-term debt held in escrow approximates fair value based on the borrowing rates currently available for a loan with similar terms and average maturity.

Forward Air Corporation

3 unchanged sentences

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis.

Assets are recorded at fair value on a nonrecurring basis as a result of an impairment charge or assets held for sale.

Assets are recorded at fair value on a nonrecurring basis as a result of an impairment charge.

The losses on assets measured at fair value on a nonrecurring, discontinued operation basis are summarized below:

2 unchanged sentences

$ — $ — $ 6,967

Goodwill impairment charge 1

Valuation allowance on assets held for sale 1

1 See Note 2, Discontinued Operation and Held for Sale .

1 See Note 2, Discontinued Operations and Held for Sale .

Segment Reporting

4 unchanged sentences

Costs related to the corporate headquarters, shared services and shared assets, such as trailers, are allocated to each segment based on usage.

Shared assets are not allocated to each segment, but rather the shared assets, such as trailers, are allocated to the Expedited Freight segment.

Shared assets are not allocated to each segment, but rather the shared assets, such as trailers, are allocated to the Expedited Freight reportable segment.

Corporate includes revenues and expenses as well as assets that are not attributable to any of the Company’s reportable segments.

The Company is currently evaluating potential changes to its reportable segments, which may be reflected in future filings to more accurately align businesses within the segments.

The accounting policies applied to each segment are the same as those in Note 1, Operations and Summary of Significant Accounting Policies , except for certain self-insurance loss reserves related to vehicle liability and workers’ compensation.

1 unchanged sentence

Any self-insurance loss exposure beyond the deductible allocated to each segment is recorded in Corporate.

For the year ended December 31, 2020, the Company recognized revenue of approximately $ 138,669 from one customer, which accounted for more than 10 % of the Company’s consolidated revenues from continuing operations in the Consolidated Statements of Comprehensive Income and was included in the Expedited Freight reportable segment.

No single customer accounted for more than 10% of the Company’s consolidated revenues from continuing operations for the years ended December 31, 2022 or December 31, 2021.

No single customer accounted for more than 10% of the Company’s consolidated revenues from continuing operations for the years ended December 31, 2023, 2022 and 2021.

Forward Air Corporation

26 unchanged sentences

As of December 31, 2022 547,417 322,001 202,756 ( 67 ) 1,072,107

A reconciliation from the segment information to the consolidated balances for revenues is set forth below:

2022 December 31,

2021 December 31,

Intersegment revenues - continuing operations $ — $ ( 57 ) $ ( 100 )

Intersegment revenues - discontinued operation — 57 100

Consolidated intersegment revenues $ — $ — $ —

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

Revenue from the individual services within the Expedited Freight segment for the years ended December 31, 2022, 2021 and 2020 were as follows:

A reconciliation from the segment information to the consolidated balances for revenues and total assets is set forth below:

2023 December 31,

2022 December 31,

Intersegment revenues - continuing operations $ 326 $ ( 478 ) $ ( 791 )

Intersegment revenues - discontinued operations ( 326 ) 478 791

Consolidated intersegment revenues $ — $ — $ —

2023 December 31,

Segment assets - continuing operations $ 2,979,533 $ 1,072,107

Current assets held for sale — 34,942

Noncurrent assets held for sale — 101,027

Consolidated total assets $ 2,979,533 $ 1,208,076

Revenue from the individual services within the Expedited Freight segment for the years ended December 31, 2023, 2022 and 2021 were as follows:

December 31, 2023 December 31, 2022 December 31, 2021

Expedited Freight revenues:

1 unchanged sentence

Truckload 159,513 221,979 223,026

Final Mile 293,769 275,201 224,475

Other 91,496 90,325 71,029

1 unchanged sentence

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Quarterly Results of Operations (Unaudited)

The following is a summary of the quarterly results of operations for the years ended December 31, 2023 and 2022:

March 31 June 30 September 30 December 31

Operating revenue $ 357,709 $ 333,622 $ 340,976 $ 338,428

Net income (loss) from continuing operations $ 33,904 $ 17,127 $ 6,493 $ ( 14,721 )

Income from discontinued operations, net of tax 2,464 2,824 2,795 116,465

Net income and comprehensive income $ 36,368 $ 19,951 $ 9,288 $ 101,744

Basic net income (loss) per share:

Continuing operations $ 1.28 $ 0.66 $ 0.25 $ ( 0.58 )

Discontinued operations 0.09 0.11 0.11 4.51

Net income per share 1

$ 1.37 $ 0.76 $ 0.36 $ 3.94

Diluted net income (loss) per share:

Continuing operations $ 1.27 $ 0.65 $ 0.25 $ ( 0.58 )

Discontinued operations 0.09 0.11 0.11 4.51

Net income per share 1

$ 1.37 $ 0.76 $ 0.36 $ 3.93

March 31 June 30 September 30 December 31

Operating revenue $ 401,203 $ 442,191 $ 433,201 $ 403,039

Net income from continuing operations $ 40,463 $ 51,434 $ 48,508 $ 39,009

Income from discontinued operations, net of tax 2,223 3,996 3,625 3,933

Net income and comprehensive income $ 42,686 $ 55,430 $ 52,133 $ 42,942

Basic net income per share:

Continuing operations $ 1.49 $ 1.90 $ 1.80 $ 1.46

Discontinued operations 0.08 0.15 0.13 0.15

Net income per share 1

$ 1.57 $ 2.05 $ 1.94 $ 1.61

Diluted net income per share:

Continuing operations $ 1.48 $ 1.89 $ 1.80 $ 1.45

Discontinued operations 0.08 0.15 0.13 0.15

Net income per share 1

$ 1.57 $ 2.04 $ 1.93 $ 1.60

1 Rounding may impact summation of amounts.

Forward Air Corporation

Schedule II — Valuation and Qualifying Accounts

25 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures