What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-24 compared with 2024-03-15 · 627 added, 512 removed, 1058 unchanged (52% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in this annual report on Form 10-K has been appropriately recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

Our management, including our principal executive and principal financial officers, have evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in this annual report on Form 10-K has been appropriately recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures are not effective as of December 31, 2024 due to the material weakness in internal control over financial reporting described below.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above.

However, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud.

Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.

Notwithstanding the foregoing conclusion, and notwithstanding the material weakness in our internal control over financial reporting described below, management, including our Chief Executive Officer and Chief Financial Officer, believes the consolidated financial statements included in this Annual Report on Form 10-K fairly represent in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in accordance with U.S.

Generally Accepted Accounting Principles.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance to management and the Board of Directors regarding the preparation and fair presentation of financial statements.

Our internal control over financial reporting is designed to provide reasonable assurance to management and the Board regarding the preparation and fair presentation of financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.

2 unchanged sentences

In making this assessment, management used the framework set forth by the Committee on Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (“2013 Framework”).

Based on our assessment, we have concluded, as of December 31, 2023, that our internal control over financial reporting was effective based on those criteria.

Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements for the year ended December 31, 2023, has issued an attestation report on the Company’s internal control over financial reporting.

During 2024, we acquired Omni.

Management's evaluation and conclusion as to the effectiveness of the design and operation of the Company's internal control over financial reporting as of the end of the period covered by this report excludes any evaluation of the internal control over financial reporting of Omni.

SEC guidance permits the exclusion of an evaluation of the effectiveness of the registrant's internal control over financial reporting for an acquired business during the first year following such acquisition.

The Omni business (excluding intangible assets and goodwill) constitutes approximately 19% of total assets and 47% of net revenue of the consolidated financial statement amounts as of and for the year ended December 31, 2024.

Through its assessment, management identified a material weakness in our internal control over financial reporting.

As a result of the complexities of the acquisition structure of Omni, our controls were not sufficiently precise over the Omni business combination, related income taxes, and the Omni impairment process.

Because of the material weakness, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2024.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which appears herein.

Ongoing Remediation Plan

Management is committed to remediating the material weakness in a timely manner.

Actions and steps we have already taken include enhancing the skill set and competencies of the accounting and finance team through new management since the close of the Omni Acquisition.

These actions include the hiring of qualified internal tax experts, the engagement of qualified external tax experts to assist with complex accounting matters for taxes, and we will engage qualified external subject matter experts on a timely basis as required in future transactions with significant complexity.

We have and will continue to implement more timely and enhanced review procedures to strengthen our non-routine and income tax control activities with improved documentation and technical oversight.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Subsequent to the Omni Acquisition, we have begun integration and controls assessment activities.

In accordance with the SEC’s published guidance, because we acquired these operations during the fiscal year, we excluded these operations from our efforts to comply with Section 404 Rules for fiscal 2024.

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

We have audited Forward Air Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

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 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.

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Forward Air Corporation (the Company) has not maintained effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in the Company’s internal control over financial reporting as the result of ineffective design and operation of controls related to the accounting for the Omni Newco LLC (Omni) business combination within the following processes:

(i) initial purchase accounting (ii) accounting for the related income taxes, and (iii) accounting for impairment related to the Omni business.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Omni, which is included in the 2024 consolidated financial statements of the Company and constituted 19% of total assets as of December 31, 2024 and 47% of revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Omni.

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, 2024 and 2023, the related consolidated statements of comprehensive (loss) income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “financial statements”).

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated March 24, 2025 which expressed an unqualified opinion thereon.

Basis for Opinion

56 unchanged sentences

10.3 Form of Director Indemnification Agreement (incorporated herein by reference to Exhibit 10.4 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission on February 23, 2018 (File No.

10.4 * Form of Non-Qualified Stock Option Agreement under the registrant's Amended and Restated Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.16 to the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission on February 24, 2011 (File No.

* Forward Air Corporation Amended and Restated Stock Option and Incentive Plan, as further amended and restated on February 7, 2013 (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 February 13, 2013 (File No.

First Amendment to the Forward Air Corporation Amended and Restated Stock Option and Incentive Plan (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, 2016, filed with the Securities and Exchange Commission on April 27, 2016 (File No.

10.7 * Form of Nonqualified Stock Option Agreement under the registrant’s Amended and Restated Stock Option and Incentive Plan (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 February 12, 2016 (File No.

10.8 * Form of CEO Nonqualified Stock Option Agreement under the registrant’s Amended and Restated Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2016 (File No.

10.9 * Form of Non-Employee Director Restricted Stock Units Agreement under the registrant’s Amended and Restated Non- Employee Director Stock Plan (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 May 10, 2016 (File No.

10.10 * Form of Non-Employee Director Restricted Stock Agreement under the registrant’s Amended and Restated Non-Employee Director Stock Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 10, 2016 (File No.

10.11 * Form of Employee Restricted Share Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016 filed with the Securities and Exchange Commission on July 27, 2016))

10.12 * Form of CEO Nonqualified Stock Option Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.41 to the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2017)

* Form of Nonqualified Stock Option Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.44 to the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2017)

2 unchanged sentences

* Forward Air Corporation 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 27, 2017 (File No.

10.10 * Amendment No.

1 to the 2016 Omnibus Incentive Compensation Plan (incorporated by reference to Annex A in the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 20, 2024).

* Amended and Restated Non-Employee Director Stock Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 27, 2017 (File No.

1 unchanged sentence

Bank National Association and the other lenders party thereto (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 October 3, 2017)

10.18A First Amendment dated April 16, 2020 to Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

First Amendment dated April 16, 2020 to Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

Bank National Association, as lender, and the other lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 1, 2020)

10.18B Second Amendment dated July 20, 2021 to Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

Second Amendment dated July 20, 2021 to Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

Bank National Association, as lender and the other lenders part thereto (incorporated herein by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 10, 2021)

10.18C Third Amendment, dated December 29, 2021, to the Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

Third Amendment, dated December 29, 2021, to the Credit Agreement dated September 29, 2017 by and among Forward Air Corporation and Forward Air, Inc., as borrowers, certain subsidiaries of the borrowers as guarantors, Bank of America, N.A., as administrative agent and lender, U.S.

Bank National Association, as lender and the other lenders part thereto (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 January 5, 2022)

10.19 * Form of CEO Nonqualified Stock Option Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 26, 2018)

10.20 * Form of CEO Performance Share Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 26, 2018)

10.21 * Form of CEO Restricted Stock Agreement under the registrant’s 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 26, 2018)

* Employment Agreement, dated June 6, 2018, between Forward Air Corporation and Thomas Schmitt (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 June 12, 2018)

* Restrictive Covenants Agreement, dated June 6, 2018, between Forward Air Corporation and Thomas Schmitt (incorporated herein by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2018)

10.24 * Waiver and Acknowledgment, dated June 11, 2018 between Forward Air Corporation and Bruce Campbell (incorporated herein by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 12, 2018)

10.25 Consulting Agreement effective May 7, 2019, between Forward Air Corporation and Bruce A.

Campbell (incorporated herein by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 25, 2019)

Form of Performance Share Agreement (Total Shareholder Return) under the registrant's 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 25, 2019)

Form of Performance Share Agreement (EBITDA per Share) under the registrant's 2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 25, 2019)

10.28 * Scott E.

Schara Offer Letter, dated as of July 23, 2020 (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 July 27, 2020)

10.29 * Amended and Restated Consulting Agreement effective July 28, 2020, between Forward Air Corporation and Matthew J.

Jewell (incorporated herein by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 31, 2020)

10.30 Advisory Agreement effective April 5, 2021, between Forward Air Corporation and Michael J.

Morris (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 4, 2021)

10.31 Amendment No.

1 dated October 29, 2021 to Advisory Agreement, dated October 29, 2021, between Forward Air Corporation and Michael J.

Morris (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2021)

10.32 Rebecca J.

Garbrick Offer Letter dated as of June 21, 2021 (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 June 25, 2021 (File No.

3 unchanged sentences

* Forward Air Corporation Executive Severance and Change in Control Plan Amended and Restated, effective as of October 25, 2021 (incorporated herein by reference to Exhibit 10.38 to the registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022)

10.37 Separation and General Release Agreement between Scott E.

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)

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 )

(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 December 27, 2023)

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.

14 unchanged sentences

(incorporated herein by reference to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2024).

10.34 * Release and Separation Agreement, by and between the registrant and Thomas Schmitt, dated March 19, 2024 (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and filed with the Securities and Exchange Commission on May 15, 2024)

10.35 * Shawn Stewart Employment Agreement dated as of April 28, 2024 (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and filed with the Securities and Exchange Commission on May 15, 2024)

10.36 * Participation and Restrictive Covenants Agreement, by and between the registrant and Shawn Stewart, dated April 22, 2024 (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and filed with the Securities and Exchange Commission on May 15, 2024)

10.37 Term Sheet for Opco LLC Agreement (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and filed with the Securities and Exchange Commission on May 15, 2024)

10.38 * Consulting Agreement, by and between the Company and Mr.

Pierson, dated May 20, 2024 (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 May 21, 2024).

10.39 * James Faught Offer Letter, dated as of June 11, 2024 (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.40 * Jamie Pierson Offer Letter, dated as of July 3, 2024 (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.41 * Participation and Restrictive Covenants Agreement, by and between the registrant and Jamie Pierson, dated July 3, 2024 (incorporated herein by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.42 Form of Non-Employee Director Annual Compensation Agreements (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.43 * Form of Restricted Share Retention Award Agreement under the registrant's 2016 Omnibus Compensation Plan (incorporated herein by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.44 * Form of Enhanced Severance Program (incorporated herein by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

Form of Executive Retention Bonus Agreement (incorporated herein by reference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission on August 9, 2024).

10.46 # S eparation and General Release Agreement between Kyle Mitchin and Forward Air Corporation

10.47 # Separation and General Release Agreement between Chris Ruble and Forward Air Corporation

19.1 # Insider Trading Policy

Subsidiaries of the registrant

14 unchanged sentences

*Denotes a management contract or compensatory plan or arrangement.

# Filed herewith

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

1 unchanged sentence

March 24, 2025 By:

/s/ Rebecca J.

Chief Financial Officer and Treasurer

(Principal Financial Officer, Principal Accounting Officer

and Duly Authorized Officer)

/s/ Jamie Pierson

Jamie Pierson

Chief Financial Officer

(Principal Financial 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/ 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 and Principal Accounting Officer)

/s/ Shawn Stewart

Chief Executive Officer

March 24, 2025

Shawn Stewart

(Principal Executive Officer)

/s/ Jamie Pierson

Chief Financial Officer

March 24, 2025

Jamie Pierson

(Principal Financial Officer)

/s/ James Faught Chief Accounting Officer March 24, 2025

James Faught (Principal Accounting Officer)

/s/ George Mayes Chairman and Director March 24, 2025

/s/ Ronald W.

Allen Director March 15, 2024

Amicarella Director March 24, 2025

1 unchanged sentence

Charles Anderson

/s/ Valerie A.

Bonebrake Director March 15, 2024

Robert Campbell Director March 15, 2024

Robert Campbell

Craig Carlock Director March 15, 2024

Craig Carlock

/s/ Valerie Bonebrake Director March 24, 2025

Valerie Bonebrake

Director March 24, 2025

/s/ Robert Edwards, Jr.

1 unchanged sentence

Robert Edwards, Jr.

/s/ Christine Gorjanc Director March 24, 2025

Christine Gorjanc

/s/ Michael Hodge Director March 24, 2025

Michael Hodge

Michael Lynch Director March 15, 2024

Michael Lynch

/s/ Chitra Nayak Director March 15, 2024

/s/ Jerome Lorrain Director March 24, 2025

Jerome Lorrain

/s/ Javier Polit Director March 24, 2025

/s/ Christopher Schmachtenberger Director March 15, 2024

Christopher Schmachtenberger

/s/ Laurie A.

Tucker Director March 24, 2025

Gil West Director March 15, 2024

Annual Report on Form 10-K

12 unchanged sentences

Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets — December 31, 202 3 and 20 22

Consolidated Statements of Comprehensive Income — Years Ended December 31, 202 3 , 202 2 and 20 21

Consolidated Statements of Shareholders’ Equity — Years Ended December 31, 202 3 , 202 2 and 20 21

Consolidated Statements of Cash Flows — Years Ended December 31, 202 3 , 202 2 and 202 1

Con solidated Balance Sheets — December 31, 202 4 and 202 3

Consolidated Statements of Comprehensive (Loss) Income — Years Ended December 31, 202 4 , 202 3 and 202 2

C onsolidated Statements of Shareholders’ Equity — Years Ended December 31, 202 4 , 202 3 and 202 2

Cons olidated Statements of Cash Flows — Years Ended December 31, 202 4 , 202 3 and 202 2

Notes to Consolidated Financial Statements — December 31, 202 4

5 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Forward Air Corporation (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 “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Forward Air Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive (loss) income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 15, 2024 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 Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 24, 2025 expressed an adverse opinion thereon.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Accounting for the Omni Newco LLC (Omni) Acquisition Customer Relationships

Description of the Matter During 2024, the Company completed its acquisition of Omni for total consideration of $2.3 billion as disclosed in Note 3 to the consolidated financial statements.

The transaction was accounted for as a business combination.

The consideration paid in the acquisition must be allocated to the acquired assets and liabilities assumed generally based on their fair value with the excess of the purchase price over those fair values allocated to goodwill.

Auditing the Company’s accounting for its acquisition of Omni was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of the identified customer relationships, which totaled $903.8 million.

The significant estimation uncertainty was primarily due to the sensitivity of fair value to the significant underlying assumptions.

The significant assumptions used to estimate the value of the customer relationships are forecasted results (i.e., revenue, revenue growth and EBITDA margin), attrition rate, and discount rate.

These significant assumptions include forward-looking considerations and were based on expectations of future economic and market conditions.

How We Addressed the Matter in Our Audit To test the estimated fair value of the acquired customer relationships, we performed audit procedures that included, among others, evaluating the selection of the valuation methodology used, evaluating the significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

We also involved our valuation specialists to assist with our evaluation of the methodology used by the company and significant assumptions used in the fair value estimates.

Goodwill Impairment Assessment of the Omni Logistics Reporting Unit

Description of the Matter As more fully described in Note 1 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level.

As of December 31, 2024, the Company’s goodwill balances totaled $522.7 million of which $244.0 million related to the Omni Logistics reporting unit.

The Company recorded total impairment of $1.03 billion related to the Omni Logistics reporting unit in 2024 based on both a discounted cash flow model and guideline public company approach to calculating fair value, with the estimated fair value less than carrying value.

Auditing management’s goodwill impairment test of the Omni Logistics reporting unit involved especially subjective judgements due to the significant estimation required in determining the fair value of the reporting unit.

In particular, the estimates of the fair value of the Company’s reporting unit were sensitive to assumptions such as the discount rate and expected future projected financial information (i.e., revenue, revenue growth, and EBITDA margin), which are affected by expectations about future market and economic conditions.

How We Addressed the Matter in Our Audit To test the estimated fair value of the Company’s reporting unit, our audit procedures included, among others, assessing the valuation methodology and the underlying data used by the Company in its analysis, including testing the significant assumptions discussed above.

We compared the significant assumptions used by management to current industry and economic trends and other relevant factors.

We also evaluated the reasonableness of the guidelines public companies used to develop the fair value estimate of the Omni Logistics reporting unit.

We involved valuation specialists to assist in our evaluation of the valuation methodology and the significant assumptions, including the discount rate used in determining the fair value of the reporting unit.

We also tested the reconciliation of the aggregate estimated fair value of all the Company’s reporting units to the market capitalization of the Company.

Self-Insurance Loss Reserves

25 unchanged sentences

Other current assets 15,685 1,098

Current assets held for sale — 34,942

Total current assets 472,500 347,028

7 unchanged sentences

Other assets 71,941 58,863

Noncurrent assets held for sale — 101,027

Total assets $ 2,802,641 $ 2,979,533

6 unchanged sentences

Current portion of operating lease liabilities 96,440 44,344

Current liabilities held for sale — 13,861

Total current liabilities 384,046 237,094

Non-current liabilities:

Finance lease obligations, less current portion 30,858 26,736

1 unchanged sentence

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

Liability from tax receivable agreement 13,295 —

Operating lease liabilities, less current portion 325,640 71,598

1 unchanged sentence

Deferred income taxes 38,169 42,200

Noncurrent liabilities held for sale — 6,095

Total non-current liabilities 2,132,727 1,978,178

Shareholders’ equity:

2 unchanged sentences

no shares issued or outstanding in 2024 and 2023

Preferred stock, Class B, $ 0.01 par value:

Authorized shares - 15,000 ;

issued and outstanding shares - 10,088 in 2024 and none in 2023

Common stock, $ 0.01 par value:

2 unchanged sentences

Additional paid-in capital 542,392 283,684

Retained earnings 480,320 436,124

Retained (deficit) earnings

( 338,230 ) 480,320

Accumulated other comprehensive loss ( 2,732 ) —

Total Forward Air shareholders equity

201,728 764,261

Noncontrolling interest 84,140 —

Total shareholders’ equity 285,868 764,261

2 unchanged sentences

Forward Air Corporation

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive (Loss) Income

(In thousands, except per share data)

9 unchanged sentences

Other operating expenses 309,508 191,809 196,596

Impairment of goodwill

1,028,397 — —

Total operating expenses 3,537,198 1,282,525 1,432,043

Income from continuing operations 88,210 247,591 147,025

Income (loss) from continuing operations

( 1,062,936 ) 88,210 247,591

Other expense:

Interest expense, net ( 189,215 ) ( 31,571 ) ( 5,138 )

Foreign exchange gain

Other income, net

Total other expense

Income before income taxes 56,639 242,453 142,687

Income tax expense 13,836 63,039 35,808

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

( 186,896 ) ( 31,571 ) ( 5,138 )

Income (loss) before income taxes

( 1,249,832 ) 56,639 242,453

Income tax (benefit) expense

( 124,991 ) 13,836 63,039

Net income (loss) from continuing operations ( 1,124,841 ) 42,803 179,414

Income (loss) from discontinued operations, net of tax ( 6,387 ) 124,548 13,777

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

Net (loss) income $ ( 1,131,228 ) $ 167,351 $ 193,191

Net (loss) attributable to noncontrolling interest

( 314,259 ) — —

Net (loss) income attributable to Forward Air $ ( 816,969 ) $ 167,351 $ 193,191

Basic net income (loss) per share:

9 unchanged sentences

$ — $ 0.96 $ 0.96

Net (loss) income

$ ( 1,131,228 ) $ 167,351 $ 193,191

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 2,732 ) — —

Comprehensive (loss) income ( 1,133,960 ) 167,351 193,191

Comprehensive loss attributable to noncontrolling interest ( 314,259 ) — —

Comprehensive (loss) income attributable to Forward Air $ ( 819,701 ) $ 167,351 $ 193,191

1 Rounding may impact summation of amounts.

3 unchanged sentences

(In thousands)

Common Stock Additional

Capital Retained Earnings Total

Common Stock Preferred Stock - Class B Amount Preferred Stock - Class C Amount Additional

Capital Accumulated Other Comprehensive Loss Retained (Deficit) Earnings Non-controlling Interest Total

Shareholders’

Shares Amount

Shares Amount Shares Amount Shares Amount

Balance at December 31, 2021 26,969 $ 270 — $ — — $ — $ 258,474 $ — $ 334,910 $ — $ 593,654

9 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

5 unchanged sentences

Balance at December 31, 2023 25,671 $ 257 — $ — — $ — $ 283,684 $ — $ 480,320 $ — $ 764,261

Net income — — — 167,351 167,351

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

Net loss — — — — — — — — ( 816,969 ) ( 314,259 ) ( 1,131,228 )

Foreign currency translation adjustments — — — — — — — ( 2,732 ) — — ( 2,732 )

Shares issued - acquisition 700 7 4 — — — 205,510 — — 411,611 617,128

Share-based compensation expense — — — — — — 10,188 — — — 10,188

Payment of dividends to shareholders — — 18 ( 25,013 ) ( 24,995 )

Payment of minimum tax withholdings on share-based awards ( 43 ) — — — — — — — ( 1,442 ) — ( 1,442 )

Repurchases and retirement of common stock ( 883 ) ( 9 ) — ( 93,802 ) ( 93,811 )

Issuance of share-based awards 170 2 — — — — ( 2 ) — — — —

Common stock issued under employee stock purchase plan 44 — — — — — 753 — — — 753

Conversion of preferred C series 1,210 12 8 — — — ( 12 ) — — — —

Tax receivable agreement liability and other adjustment — — — — — — ( 25 ) — ( 139 ) — ( 164 )

Series B - Conversions and other 2,009 20 ( 2 ) — — — 42,296 — — ( 13,212 ) 29,104

Balance at December 31, 2024 29,761 $ 298 10 $ — — $ — $ 542,392 $ ( 2,732 ) $ ( 338,230 ) $ 84,140 $ 285,868

5 unchanged sentences

Operating activities:

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

Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations:

Net income (loss) from continuing operations $ ( 1,124,841 ) $ 42,803 $ 179,414

Adjustments to reconcile net income (loss) of continuing operations to net cash provided by operating activities of continuing operations:

Depreciation and amortization 143,978 57,405 42,552

Impairment of goodwill 1,028,397 — —

Change in fair value of earn-out liability — — ( 294 )

1 unchanged sentence

Provision for revenue adjustments 3,635 5,091 6,426

Deferred income tax expense ( 8,893 ) 7,686 1,421

Deferred income tax expense (benefit) ( 133,510 ) ( 8,893 ) 7,686

Other 14,917 ( 1,180 ) ( 1,279 )

3 unchanged sentences

Other current and noncurrent assets ( 15,085 ) 30,683 ( 13,280 )

Accounts payable, accrued expenses and other long-term liabilities 36,661 12,766 18,252

Net cash provided by operating activities of continuing operations 199,212 250,161 120,608

Accounts payable and accrued expenses ( 15,917 ) 36,661 12,766

Net cash (used in) provided by operating activities of continuing operations ( 69,015 ) 199,212 250,161

Investing activities:

2 unchanged sentences

Purchase of businesses, net of cash acquired ( 1,576,219 ) ( 56,703 ) ( 66,105 )

Other ( 444 ) — —

Net cash used in investing activities of continuing operations ( 1,608,586 ) ( 83,687 ) ( 102,987 )

Financing activities:

Repayments of finance lease obligations ( 18,425 ) ( 9,500 ) ( 6,108 )

Proceeds from credit facility 75,000 70,000 —

Payments on credit facility

( 155,000 ) ( 178,500 ) ( 49,000 )

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

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

Payment of debt issuance costs ( 52,471 ) — —

7 unchanged sentences

Net cash provided by (used in) financing activities of continuing operations

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

( 163,832 ) 1,790,726 ( 138,668 )

Effect of exchange rate changes on cash 1,013 — —

Net (decrease) increase in cash, cash equivalents and restricted cash equivalents from continuing operations ( 1,840,420 ) 1,906,251 8,506

Forward Air Corporation

Consolidated Statements of Cash Flows

(In thousands)

December 31, 2024 December 31, 2023 December 31, 2022

Cash from discontinued operation:

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

Net (used in) cash provided by operating activities of discontinued operations ( 6,387 ) ( 17,824 ) 8,929

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

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

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

Net (decrease) increase in cash, cash equivalents and restricted cash equivalents

( 1,846,807 ) 1,906,251 8,506

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

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 — — —

Net (decrease) increase in cash, cash equivalents and restricted cash equivalents ( 1,846,807 ) 1,906,251 8,506

Cash, cash equivalents, and restricted cash equivalents at end of period of continuing operations $ 105,266 $ 1,952,073 $ 45,822

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:

14 unchanged sentences

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

The Company has two reportable segments:

Expedited Freight and Intermodal.

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

The Company has three reportable segments:

Expedited Freight, Omni Logistics ("Omni") and Intermodal.

The Company conducts business in North and South America, Europe, and Asia.

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.

The Omni Logistics segment provides a full suite of global logistics services.

Services include air and ocean freight consolidation and forwarding, custom brokerage, warehousing and distribution, time-definite transportation services and other supply chain solutions.

The Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.

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

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

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

Opco, a Variable Interest Entity ("VIE") resulting from the Omni Acquisition, is consolidated into Forward Air Corporation.

Intercompany accounts and transactions have been eliminated in consolidation.

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.

A noncontrolling interest in a consolidated subsidiary represents the portion of equity (net assets) in a subsidiary, not attributable, directly or indirectly, to the Company.

Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheet and the presentation of net loss presents losses attributable to controlling and noncontrolling interests.

In the fourth quarter of 2023, the Company held interests in two wholly-owned subsidiaries of GN Bondco, LLC and GN Loanco, LLC, that were considered VIEs.

These 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.

Interests 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.

The Company concluded that the VIEs should be consolidated as of December 31, 2023 because the Company had (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.

On January 25, 2024 (“the Closing”), the Company completed the acquisition of Omni (“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”).

The VIEs were acquired as part of the Omni Acquisition and assumed into the Company's consolidated subsidiaries as of January 25, 2024.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

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.

5 unchanged sentences

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)

Foreign Currency

Foreign currency amounts attributable to foreign operations have been translated into United States dollars.

Assets and liabilities are translated to United States dollars at period-end exchange rates and income and expense items are translated at average rates of exchange prevailing during the period.

Translation adjustments are included in “Accumulated other comprehensive loss” in stockholders’ equity within the Consolidated Balance Sheets and gains and losses, which result from foreign currency transactions, are included in the Consolidated Statements of Comprehensive (Loss) Income.

Cash and Cash Equivalents

3 unchanged sentences

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.

For the year ended December 31, 2024, we held $ 363 of restricted cash as collateral for Omni letters of credit.

Restricted cash equivalents and noncurrent restricted cash equivalents for the year ended December 31, 2023 totaled $ 39,604 which related to the amounts held in escrow in connection with the financing of the acquisition of Omni.

Allowance for Doubtful Accounts and Revenue Adjustments

5 unchanged sentences

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

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

Adjustments arise:

(a) when small rate changes (“spot quotes”) are granted to customers that differ from the standard rates in the billing system;

(b) when freight requires dimensionalization or is reweighed which results in a different rate;

(3) when billing errors occur;

and (4) when data entry errors occur.

In 2023, average revenue adjustments per month were approximately $ 424 on average revenue per month of approximately $ 114,228 ( 0.4 % of monthly revenue).

The Company estimates an allowance for revenue adjustments based on historical experience, trends and current information.

The average amount of revenue adjustments per month can vary in relation to the level of revenue or as a result of other factors.

Both the average monthly revenue adjustments and the average lag assumptions are continually evaluated for appropriateness.

Inventories are valued at the lower of cost or net realizable value, using first-in, first-out method.

Net realizable value is the estimated selling price in the ordinary course of business.

Replacement parts are expensed when placed in service, while tires are capitalized and amortized over their estimated useful life.

Expenses related to the utilization of inventories are recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Property and Equipment

6 unchanged sentences

Capitalized software also includes software acquired for internal use.

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, 2024 and 2023 consisted of the following:

9 unchanged sentences

Total property and equipment, net $ 326,188 $ 258,095

As of December 31, 2023 and 2022, the net book value of computer software included in property and equipment, net was $ 7,361 and $ 8,737 , respectively.

As of December 31, 2024 and 2023, the net book value of computer software included in property and equipment, net w as $ 13,876 and $ 7,361 , respectively.

For the years ended December 31, 2024, 2023 and 2022, amortization expense of computer software was $ 3,377 , $ 2,909 and $ 2,558 , respectively.

7 unchanged sentences

The Company’s reporting units are not its reportable segments.

Goodwill is evaluated annually as of June 30 for impairment using a qualitative assessment or a quantitative one-step assessment.

If the Company elects to perform a qualitative assessment and determines the fair value of its reporting units more likely than not exceed the carrying value of their net assets, no further evaluation is necessary.

For reporting units where the Company performs a one-step quantitative assessment, the Company compares the estimated fair value of each reporting unit, which is determined based on a combination of an income approach using a discounted cash flow model, and a market approach, which considers comparable companies, to its respective carrying value of net assets, including goodwill.

If the estimated fair value of the reporting unit exceeds its carrying value of net assets, the goodwill is not considered impaired.

If the carrying value of net assets is higher than the estimated fair value of the reporting unit, the impairment charge is the amount by which the carrying value exceeds the reporting unit’s estimated fair value.

The Company reviews its long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group.

If the Company determines that the carrying amount of an asset or asset group is not recoverable based on the expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated fair value of the long-lived assets.

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

The Company also evaluates the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives.

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

2 unchanged sentences

(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.

The annual test of goodwill was performed for each of the reporting units with goodwill balances as of June 30, 2024.

As a result of the annual test, a goodwill impairment charge totaling $ 1,028,397 was recorded which all relates to the Omni reporting unit.

This reporting unit was acquired on January 25, 2024.

Primarily due to a decrease in the market value of the Company’s common stock during the second quarter of 2024, as a result of many factors including, but not limited to, general market factors, credit rating downgrades, and changes in executive leadership, and the inherent uncertainty associated with the combined enterprise, the Omni reporting unit’s fair value was determined to be less than its carrying value.

As a result, the Company recorded a non-cash impairment charge of $ 1,092,741 during the three and six months ended June 30, 2024.

Subsequent retrospective adjustments made during the three months ended September 30, 2024 and December 31, 2024, of $ 14,751 additional impairment and $ 79,095 reduction, respectively, resulted in $ 1,028,397 total goodwill impairment expense for the year ended December 31, 2024.

The goodwill impairment expense was recorded in the Impairment of goodwill caption on the Consolidated Statement of Comprehensive (Loss) Income.

To complete the Omni goodwill test, we determined the fair value of the reporting unit using the DCF model and a guideline public company approach with 50% of the value determined using the DCF and 50% of the value using the market approach.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

Finite-Lived Intangible Assets and Other Long-Lived Assets

The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group.

The analysis differs from our goodwill impairment test in that an intangible or other long-lived asset is only deemed to have occurred if the sum of the forecasted undiscounted cash flows related to the assets being evaluated is less than the carrying value of the assets.

If the forecasted net cash flows are less than the carrying value, then the assets are written down to estimated value.

We did not identify any impairments of definite-lived assets for the year ended December 31, 2024 and 2023.

Changes in the estimates of forecasted net cash flows may result in future asset impairments that could be material to our results of operations.

Changes in the carrying amount of goodwill during the years ended December 31, 2024, 2023 and 2022 are summarized as follows:

Expedited Freight Intermodal Consolidated

Expedited Freight Omni Logistics

Intermodal Consolidated

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

3 unchanged sentences

Acquisition — 1,272,403 — 1,272,403

Acquisition adjustment — 90 90

Impairment — ( 1,028,397 ) — ( 1,028,397 )

Balance as of December 31, 2024 $ 141,720 $ 244,006 $ 136,986 $ 522,712

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 Company’s accum ulated goodwill impairment is $ 1,054,083 related to impairment charges the Company recorded during 2016 pertaining to its Truckload Services ("TLS") reporting unit of $ 25,686 , and $ 1,028,397 from the Omni transaction.

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

As of December 31, 2024, approximate ly $ 336,600 of goodwill is deductible for tax purposes.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

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.

11 unchanged sentences

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

1 unchanged sentence

Acquisition 903,800 23,400 23,100 950,300

Acquisition adjustment 45 1 — 46

Balance as of December 31, 2024 $ 1,157,714 $ 29,807 $ 24,600 $ 1,212,121

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Accumulated Amortization

6 unchanged sentences

1 Carrying value as of December 31, 2024, 2023 and 2022 is inclusive of $ 16,501 of accumulated impairment.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Accrued Expenses

5 unchanged sentences

Accrued interest payable

31,009 17,452

Accrued expenses $ 119,836 $ 62,948

¹ Amounts held in escrow by the VIEs.

Other Current Liabilities

1 unchanged sentence

December 31, 2024 December 31, 2023

Income taxes payable $ 31,190 $ —

Tax liabilities

$ 5,946 $ 31,190

Accrued legal and professional fees 11,041 34,721

Other 5,816 2,650

Deferred revenue

Accrued payables non-trade 18,262 5,816

Other current liabilities $ 45,148 $ 71,727

40 unchanged sentences

A contract exists once the Company enters into a contractual agreement with a customer.

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

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

Forward Air Corporation

10 unchanged sentences

Upon delivery of a shipment or related service, customers are billed according to the applicable payment terms.

Related services are a separate performance obligation and include accessorial charges such as terminal handling, storage, equipment rentals and customs brokerage.

Related services are a separate performance obligation and include accessorial charges such as terminal handling, storage, equipment rentals.

We also provide certain value-added logistics services, such as customs brokerage, fee-based managed services, and warehousing services.

These services may include one or more performance obligations, which are generally satisfied over the service period as we perform our obligations.

The service period may be a very short duration, in the case of customs brokerage, or it may be longer in the case of warehousing, managed services, and supply chain consulting and optimization services.

Pricing for our services is established in the customer contract and is dependent upon the specific needs of the customer but may be agreed upon at a fixed fee per transaction, labor hour, or service period.

Revenue is classified based on the line of business as the Company believes that best depicts the nature, timing and amount of revenue and cash flows.

16 unchanged sentences

For tangible assets, significant judgements include, but are not limited to, current market values, physical and functional obsolescence of the assets, and remaining useful lives.

Consideration is typically paid in the form of cash paid upon closing while contingent consideration is paid upon the satisfaction of a future obligation.

Consideration is paid in the form of cash, and at times equity, and paid upon closing while contingent consideration is paid upon the satisfaction of a future obligation.

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

8 unchanged sentences

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

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Net Income (Loss) Per Common Share

4 unchanged sentences

2024 2023 2022

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

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

Net income (loss) $ ( 1,131,228 ) $ 167,351 $ 193,191

Less, net income (loss) from discontinued operations ( 6,387 ) 124,548 13,777

Less, net loss attributable to noncontrolling interest ( 314,259 ) — —

Adjustments to net (loss) attributable to the Company

Net (loss) income attributable to common shareholders $ ( 837,134 ) $ 42,803 $ 179,414

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

1 unchanged sentence

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

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 continuing operations $ ( 837,134 ) $ 42,583 $ 178,421

Numerator for basic and diluted net (loss) income per share for discontinued operations $ ( 6,387 ) $ 123,909 $ 13,700

Denominator for basic net income per share - weighted-average number of common shares outstanding 27,540 25,913 26,783

Dilutive stock options and performance share awards 90 143 137

Dilutive effect of stock awards — 90 143

Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding 27,540 26,003 26,926

30 unchanged sentences

Refer to Note 6, Stock Incentive Plan , for further discussion.

Ransomware Incident

In December 2020, the Company detected a ransomware incident impacting its operational and information technology systems, which caused service delays for many of its customers (“Ransomware Incident”).

Promptly upon its detection of the incident, the Company initiated response protocols, launched an investigation and engaged the services of cybersecurity and forensics professionals.

The Company also engaged with the appropriate law enforcement authorities.

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 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

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

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

New Accounting Standards Adopted

In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker.

The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this guidance for the year ended December 31, 2024.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The guidance in this ASU expands the disclosure requirements for income taxes by requiring greater disaggregation of information in the income tax rate reconciliation and disaggregation of income taxes paid by jurisdiction.

The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the effects adoption of this guidance will have on our consolidated financial statements.

Discontinued Operations and Held for Sale

1 unchanged sentence

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 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.

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.

The sale agreement for Pool included an earn-out based on the achievement of certain earnings before interest, taxes, depreciation and amortization attainment over an eleven-month period, beginning February 1, 2021.

The estimated fair value of the earn-out asset on the date of sale was $ 6,967 .

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.

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.

The financial performance of the Pool business significantly deteriorated during the third quarter of 2021.

As a result, an evaluation of the earn-out asset for impairment was completed, which included a review of revised forecasts, updated strategic operating decisions and current market conditions.

The revised forecasts indicated an impairment of the entire earn-out asset was necessary.

A non-cash charge of $ 6,967 was recorded as an “Impairment charge ” in the summarized discontinued operation financial information for the year ended December 31, 2021.

Transition Services Agreement

On February 12, 2021, the Company entered into a Transition Services Agreement (“TSA”) with TOG FAS Holdings LLC, the buyer of the Pool business.

Under the TSA, the Company performed certain services on an interim basis in order to facilitate the orderly transition of the Pool business.

The effective date of the TSA was February 12, 2021 and remained in effect until the date all services were completed, but no more than six months following the effective date.

The TSA provided the right to extend the term of the TSA with no limit on the number of the mutually agreed upon extensions.

In exchange for the services performed by the Company under the TSA, the Company received a monthly service charge.

For the year ended December 31, 2021, the Company recognized $ 747 , in “Other operating expenses ” in the Consolidated Statements of Comprehensive Income, for the services performed under the TSA.

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

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

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

The results of operations of Final Mile, have been presented under the caption “Income (loss) from discontinued operations, net of tax” in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022.

A final net working capital settlement of $ 6,387 was the only activity during the year ended December 31, 2024.

Forward Air Corporation

3 unchanged sentences

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 and 2022 is as follows:

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

December 31, 2023 December 31, 2022

Operating revenue $ 273,873 $ 293,769

7 unchanged sentences

Other operating expenses 36,842 34,490

Impairment charge — — 6,967

Total operating expenses 266,807 275,384

8 unchanged sentences

(In thousands, except per share data)

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.

The estimated fair value of the earn-out liability on the date of acquisition was immaterial.

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.

The acquisition of Edgmon marks the Company’s first Intermodal location on the West Coast, a key area of expansion in the Intermodal strategic growth plan.

The acquisition was funded using cash flows from operations.

The results of Edgmon 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.

Acquisition of Omni Newco, LLC

Acquisition of Omni

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.

2 unchanged sentences

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

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

(i) 1,910 shares of common stock (of which 1,210 were issued upon conversion of the Series C Preferred Units upon approval of the Company’s shareholders at the 2024 Annual Shareholders Meeting held on June 3, 2024 (the “Conversion Approval”)) and (ii) 12,105 Opco Class B Units (as defined below) and corresponding Series B Preferred Units (as defined below), which are exchangeable into shares of Common Stock (of which 7,670 units were issued upon conversion of the units of Opco (defined below) designated as “Opco Series C-2 Preferred Units” upon the Conversion Approval.

The Equity Consideration represents, as of December 31, 2024, 34 % of the Company’s outstanding common stock on a fully-diluted and as-exchanged basis.

Please refer to sections hereinafter in relation to Series B, Series C, and Series C-2.

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”).

Opco has been structured as an umbrella partnership C corporation through which the existing direct and certain indirect equity holders of Omni (“Omni Holders”) hold a portion of the Equity Consideration in the form of units of Opco designated as “Class B Units” (“Opco Class B Units”) and corresponding Series B 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.

The Omni Acquisition enables the Company to provide a differentiated service offering and expanded geographic footprint to customers.

In addition, the combination of these complementary businesses positions the Company to deliver integrated global supply chain solutions for customers’ most service-sensitive logistics needs.

Goodwill recognized related to the purchase represents planned operational synergies, expanded geographic reach of our services, and strategic market positioning.

The results of Omni have been included in the Consolidated Financial Statements as of and from the date of acquisition.

The associated goodwill has been included in the Omni reportable segment and is not expected to be deductible for tax purposes.

Details of consideration paid are included in the Purchase Price Allocation table within this footnote.

Details of debt related items for the transaction are included in the debt footnote.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

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.

Series C Preferred Stock

3 unchanged sentences

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.

Series C-2 units carried consistent economic terms as Series C.

All shares were converted in June of 2024.

Due Diligence, Transaction and Integration Costs

For the year ended December 31, 2024 and 2023, the Company recorded $ 81,467 and $ 57,490 , respectively, of due diligence, transaction and integration costs incurred in connection with the acquisition of Omni.

These 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, 2024

(In thousands, except per share data)

Business Combination Accounting - Omni Logistics

We accounted for the Omni purchase using the acquisition method of accounting under U.S.

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

January 26, 2024 Opening Balance Sheet as Reported at March 31, 2024 Adjustments

January 26, 2024 Opening Balance Sheet as Reported at December 31, 2024

Consideration Transferred

Cash consideration paid $ 100,499 $ — $ 100,499

Liabilities under tax receivable agreement 13,270 — 13,270

Common shares 32,795 ( 1,967 ) 30,828

Series B preferred shares 207,880 ( 12,473 ) 195,407

Series C preferred shares 56,713 ( 3,403 ) 53,310

Opco C-2 preferred units 359,493 ( 21,570 ) 337,923

Extinguishment of Omni's indebtedness 1,543,003 — 1,543,003

Total purchase price (fair value of consideration) 2,313,653 ( 39,413 ) 2,274,240

Fair Value of Assets Acquired and Liabilities Assumed

Cash and cash equivalents acquired 78,260 ( 10,977 ) 67,283

Accounts receivable 181,570 10,441 192,011

Property and equipment 75,292 14,082 89,374

Other assets 35,639 ( 3,084 ) 32,555

Operating lease right-of-use assets 234,025 13,665 247,690

Customer relationships 1,062,729 ( 158,929 ) 903,800

Non-compete agreements 42,509 ( 19,109 ) 23,400

Trademarks and other 42,510 ( 19,410 ) 23,100

Total assets acquired 1,752,534 ( 173,321 ) 1,579,213

Current liabilities 156,408 ( 368 ) 156,040

Finance lease obligations 14,606 2,977 17,583

Operating lease liabilities 234,025 13,844 247,869

Other liabilities 643 ( 559 ) 84

Deferred income taxes 133,673 22,127 155,800

Total liabilities assumed 539,355 38,021 577,376

Goodwill $ 1,100,474 $ 171,929 $ 1,272,403

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

Customer relationships 14 years

Non-compete agreements 4 years

Trademarks and other

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Supplemental Pro Forma Information

The following table represents the pro forma financial information as if Omni had been included in the consolidated results of the Company since January 1, 2023 (unaudited and in thousands):

2024 December 31,

Pro forma revenue

$ 2,556,262 $ 2,659,431

Pro forma net loss from continuing operations

( 1,190,392 ) ( 159,425 )

The pro forma financial information adjusts the net loss for amortization of the intangible assets and the fair value adjustments of the assets acquired in connection with the Omni Acquisition as if the Closing had occurred on January 1, 2023.

The one year acquisition measurement period closed on the anniversary of the transaction.

Acquisition of Land Air Express

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

(“Land Air”) for $ 56,567 .

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.

January 31, 2023

Tangible assets:

Property and equipment $ 738

Total tangible assets 738

Intangible assets:

Customer relationships 1

Goodwill 20,629

Total intangible assets 55,829

Total assets acquired 56,567

Net assets acquired 2

1 Estimated useful life of 15 years

2 No liabilities were assumed in relation to the Land Air transaction.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Long-term debt consisted of the following as of December 31, 2024 and 2023:

December 31, 2024 December 31, 2023

Term Loan, expiring 2030 1

$ 1,045,000 $ —

Senior Secured Notes, maturing 2031 1

Debt issuance discount ( 54,067 ) —

Debt issuance costs

Total long-term debt

$ 1,675,930 $ —

1 On December 31, 2023 the debt instruments and related proceeds were consolidated but were restricted under an escrow agreement contingent upon the Closing of the Omni Acquisition.

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.

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Bondco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Issuer” and consolidated VIE) launched 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 the 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.

The 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.

8 unchanged sentences

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”).

In order to finance a portion of the cash consideration payable for the Omni Acquisition and the costs and expenses incurred in connection therewith, GN Loanco, LLC, a Delaware limited liability company and wholly owned subsidiary of Omni (the “Escrow Loan Borrower”), entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A., as administrative agent and collateral agent and as initial term loan lender.

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

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:

The base rate is equal 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 %.

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

The applicable margin for 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.

4 unchanged sentences

(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 %.

Until delivery of a compliance certificate in respect of the fiscal quarter ending June 30, 2024, the applicable margin for SOFR loans was 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.

Upon the 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).

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.

On January 25, 2024, the date of the Omni Acquisition, both GN Bondco, LLC and GN Loanco, LLC ceased operations and their debt and related funds were transferred to Opco, a consolidated subsidiary of the Company.

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

2 unchanged sentences

Amendment No.

2 also amends certain other terms of the Credit Agreement.

2 also amends certain other terms of the Credit Agreement in connection with the foregoing.

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.

On December 30, 2024, Opco and the parties to the Credit Agreement entered into Amendment No.

3 (“Amendment No.

3”) to the Credit Agreement, which (a) modifies the financial performance covenant in the Credit Agreement by temporarily increasing the 5.50 :1.00 maximum consolidated first lien net leverage ratio permitted by the covenant to (i) 6.75 :1.00 (for the first, second and third quarters of 2025), (ii) 6.50 :1.00 (for the fourth quarter of 2025), (iii) 6.25 :1.00 (for the first quarter of 2026), (iv) 6.00 :1.00 (for the second quarter of 2026), (v) 5.75 :1.00 (for the third quarter of 2026), (vi) 5.50 :1.00 (for the third quarter of 2026 and thereafter) and (b) reduces the revolving credit commitments available under the Credit Agreement from an aggregate principal amount of $ 340,000 to an aggregate principal amount of $ 300,000 .

Amendment No.

3 also amends certain other terms of the Credit Agreement in connection with the foregoing.

Both the Notes and Revolving Credit 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.

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:

Edgmon Land Air

May 31, 2022 January 31, 2023

Tangible assets:

Accounts receivable $ 4,963 $ —

Property and equipment 613 738

Total tangible assets 5,576 738

Intangible assets:

Customer relationships 13,051 35,200

Non-compete agreements 172 —

Goodwill 22,195 20,629

Total intangible assets 35,418 55,829

Total assets acquired 40,994 56,567

Liabilities assumed:

Current liabilities 1 —

Total liabilities assumed 1 —

Net assets acquired $ 40,993 $ 56,567

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

Estimated Useful Lives

Edgmon Land Air

Customer relationships 9 years 15 years

Non-compete agreements 5 years —

As of December 31, 2024, the Company was in compliance with all aforementioned covenants.

As of December 31, 2024 the Company had no outstanding borrowings under the Facility.

No borrowings were made under the Facility prior to the extinguishment upon the Closing.

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

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

December 31, 2023 December 31, 2022

Credit facility, expires 2026 $ — $ 108,500

Debt issuance costs — ( 418 )

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

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

Former Credit Facility

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.

5 unchanged sentences

In connection with the third amendment, the Company borrowed $ 150,000 under the term loan and simultaneously repaid $ 150,000 on the revolving line of credit from the borrowings received.

Under the third amendment, the Facility may be increased by up to $ 75,000 to a maximum aggregate principal amount of $ 525,000 pursuant to the terms of the amended credit agreement, subject to the lenders’ agreement to increase their commitments or the addition of new lenders extending such commitments.

Such increases to the Facility may be in the form of additional revolving credit loans, term loans or a combination thereof, and are contingent upon there being no events of default under the Facility.

As of December 31, 2023 and December 31, 2022, the Company had $ 280,166 and $ 279,966 respectively, of available borrowing capacity under the Facility.

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.

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 %.

The base rate is the highest of (i) the federal funds rate, which cannot be less than zero , plus 0.50 %, (ii) the administrative agent ’s prime rate and (iii) the BSBY Rate, which cannot be less than zero , plus 1.00 %, plus a margin ranging from 0.00 % to 0.50 % based on the Company ’s leverage ratio.

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

Under the third amendment, the Facility could have been increased by up to $ 75,000 to a maximum aggregate principal amount of $ 525,000 pursuant to the terms of the amended credit agreement, subject to the lenders’ agreement to increase their commitments or the addition of new lenders extending such commitments.

Such increases to the Facility could have been in the form of additional revolving credit loans, term loans or a combination thereof, and were contingent upon there being no events of default under the Facility.

Letters of Credit

1 unchanged sentence

As of December 31, 2024 and December 31, 2023, outstanding letters of credit totaled $ 23,474 and $ 19,834 , respectively.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

Under the Revolving Credit Facility, the outstanding letter of credit totaled $ 23,111 as of December 31, 2024.

Interest Payments

1 unchanged sentence

No interest was capitalized during the year ended December 31, 2024, 2023 and 2022.

Interest Income

In connection with the Omni acquisition, funds held in escrow earned interest prior to their release.

Interest income for the year ended totaled $ 9,152 .

Shareholders’ Equity

2 unchanged sentences

Cash Dividends

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.

During the year ended December 31, 2024, no dividends were declared or paid during the year.

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

Share Repurchase Program

1 unchanged sentence

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, 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.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

During the year ended December 31, 2024, the Company did not repurchase any shares.

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.

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.

As of December 31, 2024, the remaining shares permitted to be repurchased under the 2019 Repurchase Plan were approximately 1,349 shar es.

Stock Incentive Plan

8 unchanged sentences

As of December 31, 2024, approximately 1,280 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

13 unchanged sentences

Expected life of awards (years) 0 5.6 5.6

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Stock option transactions during the year ended December 31, 2024 on a continuing operations basis were as follows:

1 unchanged sentence

Outstanding as of January 1 $ 370 $ 76.83

Granted 54 115.42

Exercised — —

1 unchanged sentence

Outstanding as of December 31 $ 280 $ 77.08

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 .

As of December 31, 2024, the weighted average remaining contractual life of stock options outstanding was approximately two years and exercisable was approximately two years .

The total fair value of stock options vested during 2024, 2023, 2022 was $ 0 , $ 0 , and $ 855 , 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

Notes to Consolidated Financial Statements (Continued)

December 31, 2023

(In thousands, except per share data)

As of December 31, 2024, the total share-based compensation expense related to unvested stock options not yet recognized was $ 161 , and the weighted average period over which it is expected to be recognized is approximately one year .

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, 2024:

Stock Options Outstanding Stock Options Exercisable

Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Exercisable as of December 31, 2023 Weighted Average Exercise Price

Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Exercisable as of December 31, 2024

Weighted Average Exercise Price

$ 58.40 - $ 59.89 33 0.1 $ 58.54 33 $ 58.54

4 unchanged sentences

The total intrinsic value of stock options exercised during 2024, 2023 and 2022 was $ 0 , $ 0 and $ 142 , 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

1 unchanged sentence

Shares granted under the restricted share award plan are restricted from sale or transfer until vesting, and the restrictions lapse in three equal installments beginning one year after the date of grant.

Dividends are paid in cash on a current basis throughout the vesting period.

As of December 31, 2024, there were no dividends paid on a current basis throughout the vesting period.

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

All forfeitures are recognized as incurred.

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

Number of Shares Weighted Average Grant Date Fair Value

Outstanding as of January 1 138 $ 87.81

Granted 74 114.46

Vested ( 70 ) 81.32

Forfeited ( 9 ) 104.68

Outstanding as of December 31 133 $ 104.87

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:

Restricted share transactions on a continuing operations basis for the year ended December 31, 2024 were as follows:

Number of Shares Weighted Average Grant Date Fair Value

5 unchanged sentences

The weighted average grant-date fair value of the restricted shares granted under the Omnibus Plan during the years ended December 31, 2024 , 2023 and 2022 were $ 30.66 , $ 114.46 and $ 105.52 , respectively.

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

The total fair value of restricted shares that vested during 2024, 2023 and 2022 was $ 4,088 , $ 7,833 , and $ 9,246 , respectively.

As of December 31, 2024, the total share-based compensation expense related to restricted shares not yet recognized was $ 9,243 , and the weighted average period over which it is expected to be recognized is approxi mately two ye ars .

Performance Shares

28 unchanged sentences

Outstanding as of December 31 339 $ 15.88

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 .

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.

As of December 31, 2024, 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 $ 3,507 , and the weighted average period over which it is expected to be recognized is approximately 2 years.

Total tax shortfall realized for tax deductions in the United S tates related to the exercise of stock options, vesting of restricted stock and vesting of performance awards under the Omnibus Plan was $ 4,660 , $ 2,518 , and $ 1,012 for the years ended December 31, 2024, 2023 and 2022, respectively.

Employee Stock Purchase Plan

10 unchanged sentences

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

Employee stock purchase plan activity and related information was as follows on a discontinued operation basis:

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

Shares purchased by participants under the ESPP 1 1 1

Average purchase price $ 69.81 $ 82.48 $ 75.71

Weighted average fair value of each purchase under the ESPP granted 1

$ 7.76 $ 9.17 $ 30.68

Share-based compensation expense for ESPP $ 13 $ 9 $ 25

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

17 unchanged sentences

Outstanding as of December 31 18 $ 18.67

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

2024 December 31,

2023 December 31,

Share-based compensation expense for restricted shares $ 984 $ 1,329 $ 1,387

Excess tax benefit for the vesting of restricted shares $ 40 $ 12 $ 342

The total fair value of restricted shares that vested during 2024, 2023 and 2022 was $ 488 , $ 1,424 , and $ 1,436 , respectively.

As of December 31, 2024, the total share-based compensation expense related to the restricted shares not yet recognized was $ 198 , and the weighted average period over which it is expected to be recognized is less than one year .

The Company or one of its subsidiaries files income tax returns in the U.S.

federal jurisdiction, various states and Canada.

With a few exceptions, the Company is no longer subject to U.S.

federal, state and local, or Canadian examinations by tax authorities for years before 2016.

The provision for income taxes by location of the taxing jurisdiction for the years ended December 31, 2023, 2022 and 2021 consisted of the following:

The Company is taxed as a corporation and pays corporate federal and state taxes on income allocated to it from Opco based on the Company’s economic interest in Opco.

Opco’s members, including the Company, are liable for federal, state and local income taxes based on their share of Opco’s pass-through taxable income.

Opco is not a taxable entity for federal income tax purposes.

In addition, certain subsidiaries of Opco are corporations that are subject to federal, state and non-U.S income taxes.

The earliest period the Company is subject to examination of federal income tax returns by the Internal Revenue Service is 2021.

The state income tax returns and non-U.S.

tax filings of the Company are subject to examination by the applicable taxing authorities for various periods, generally up to four years after they are filed.

The Company's income tax (benefit) expense for continuing operations during the years ended December 31, 2024, 2023 and 2022 were the following:

2024 2023 2022

1 unchanged sentence

State 178 4,285 12,026

22,729 55,353 34,387

Foreign 4,716 — —

Total Current Tax Expense 8,519 22,729 55,353

Federal ( 113,588 ) ( 6,268 ) 6,317

State ( 19,922 ) ( 2,625 ) 1,369

( 8,893 ) 7,686 1,421

$ 13,836 $ 63,039 $ 35,808

Total Deferred Taxes ( 133,510 ) ( 8,893 ) 7,686

Total Income Tax Expense (Benefit) $ ( 124,991 ) $ 13,836 $ 63,039

Forward Air Corporation

10 unchanged sentences

Non-deductible compensation 156 1,190 1,435

Change in income tax contingency reserves — — ( 260 )

Non-controlling interest 65,772 — —

Federal income tax credits — ( 34 ) ( 107 )

Foreign Tax Rate Differential ( 1,019 ) — —

Impairment 42,081 — —

Change in Valuation Allowance 57,614 — —

Other ( 9,318 ) ( 202 ) 1,477

9 unchanged sentences

Accruals for income tax contingencies 42 129

Capital loss carryforwards — 4,253

Capital Contributions 1 —

Net operating loss carryforwards 12,617 634

Foreign Tax Credit 894 —

Interest Disallowance 23,827 —

Unrealized Gain/Loss 14 —

Investment in Partnership 36,179 —

Total gross deferred tax assets 77,236 61,940

9 unchanged sentences

Net deferred tax liabilities $ ( 38,169 ) $ ( 42,200 )

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)

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 Company paid income taxes, net o f refunds, of $ 38,757 , $ 20,842 and $ 65,388 for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, 2023 and 2022 the Company had state net operating loss carryforwards of $ 90,747 , $ 13,240 and $ 13,574 , respectively, that expire between 2024 and 2035.

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.

The Company maintains a valuation allowance to reserve against its state net operating loss carryforwards of $ 5,877 and $ 395 as of both December 31, 2024 and 2023, respectively.The Company’s state net operating loss valuation allowance increased in 2024 due to additional NOLs generated.

The Company has a federal net operating loss carryforward of $ 38,499 .

The Company’s federal net operating loss carryforward can be carried forward indefinitely.

The Company also recorded a valuation allowance against its U.S.

Federal deferred tax assets, including its outside basis difference in Opco, Federal net operating loss carryforward, and IRC section 163(j) interest limitation carryforward.

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.

1 unchanged sentence

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, 2024 and 2023 is as follows:

4 unchanged sentences

Reductions for settlement with state taxing authorities ( 66 )

Additions for tax positions of current year 21

Reductions for tax positions of prior years ( 213 )

Additions from acquisition of Omni Newco, LLC 2,257

Balance at December 31, 2024

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

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

As of December 31, 2024 and 2023, the Company had $ 2,131 and $ 153 , 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.

At December 31, 2024 and 2023, the Company had accrued interest and penalties related to unrecognized tax benefits of $ 394 an d $ 82 , respectively.

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

In connection with the Omni Acquisition, the Company entered into a Tax Receivable Agreement with certain Omni Holders.

As of December 31, 2024, the Company recognized a Tax Receivable Agreement liability of $ 13,295 , which equals the amount of Tax Receivable Agreement liability included in the Omni Purchase Price Allocation.

The Company generated additional tax benefits subject to the Tax Receivable Agreement of $ 74,217 during 2024.

The Company recorded a valuation allowance against any deferred tax assets associated with those tax benefits.

Consequently, the Company concluded additional Tax Receivable Agreement payments related to current year tax benefits would not be probable based on estimates of future taxable income over the term of the Tax Receivable Agreement.

If other tax attributes subject to the Tax Receivable Agreement are determined to be payable, additional Tax Receivable Agreement liabilities may be considered probable at that time.

The determination of the Tax Receivable Agreement liability requires the Company to make judgments in estimating the amount of tax attributes as of the date of exchanges (such as cash to be received by the Company on a hypothetical sale of assets and allocation of gain or loss to the Company at the time of the exchanges taking into consideration partnership tax rules).

The amounts payable under the Tax Receivable Agreement will also vary depending upon a number of factors, including tax rates in effect, as well as the amount, character, and timing of the taxable income of Opco in the future and the expected realization of tax benefits with respect to deferred tax assets related to tax attributes subject to Tax Receivable Agreement.

The Organization for Economic Co-operation and Development (“OECD”), continues to put forth various initiatives, including Pillar Two rules which include the introduction of a global minimum tax at a rate of 15%.

European Union member states agreed to implement the OECD’s Pillar Two rules with effective dates of January 1, 2024 and January 1, 2025, for

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

different aspects of the directive and most have already enacted legislation.

A number of other countries are also implementing similar legislation.

As of December 31, 2024, based on the countries in which we do business that have enacted legislation effective January 1, 2024, the impact of these rules to our financial statements was not material.

This may change as other countries enact similar legislation and further guidance is released.

We continue to closely monitor regulatory developments to assess potential impacts.

In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S.

subsidiaries in those operations.

As of December 31, 2024, the Company has not recorded a provision for U.S.

or additional foreign withholding taxes on investments in foreign subsidiaries that are indefinitely reinvested.

Generally, such amounts become subject to U.S.

taxation upon the remittance of dividends and under certain other circumstances.

The Company leases certain land, buildings, equipment and office equipment under finance and operating leases.

4 unchanged sentences

Sublease rental income was $ 5,457 , $ 2,991 and $ 2,762 in 2024, 2023 and 2022, respectively.

In 2024, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $ 1,859 .

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.

11 unchanged sentences

Since the contracts explicitly identify the tractors operated by the Leased Capacity Providers, the Company determined the contracts contain an embedded lease.

The compensation of Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipment and a rate per mile.

The compensation of Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipm ent and a rate per mile.

The variable amounts are excluded from the calculation of the right-of-use lease asset and corresponding operating lease liability and are disclosed as variable lease costs.

Variable lease costs related to the embedded leases were $ 434,689 , $ 409,080 and $ 440,756 , for the years ended December 31, 2024, 2023, and 2022, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Total lease assets and liabilities as of December 31, 2024 and 2023 were as follows:

10 unchanged sentences

Total leased liabilities $ 469,868 $ 155,323

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)

1 Finance lease assets are recorded net of accumulated depreciation of $ 30,805 a nd $ 22,051 as of December 31, 2024 and 2023, respectively.

Total lease cost for 2024 and 2023 was as follows:

9 unchanged sentences

Total lease cost $ 590,286 $ 506,167

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(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, 2024 were as follows:

4 unchanged sentences

2028 64,976 4,509

2028 5,854 2,123

Thereafter 81,821 184

12 unchanged sentences

Finance leases 5.8 % 5.5 %

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 2024 and 2023:

4 unchanged sentences

Financing cash flows from finance leases 18,323 11,074

Right-of-use assets obtained in exchange for finance lease liabilities $ — $ —

Right-of-use assets obtained in exchange for operating lease liabilities 153,009 29,884

1 unchanged sentence

Commitments and Contingencies

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

As of December 31, 2024, the Company had unconditional purchase obligations of $ 3,260 to pu rchase forklifts and other equipment during 2025.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(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.

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

The Shareholder Complaint alleges, among other things, that the Company’s shareholders had 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 .

Thereafter, the parties to the Amended Merger Agreement completed the Omni Acquisition.

On May 2, 2024, Plaintiff Michael Roberts, together with the Cambria County Employees Retirement System filed a stipulation and proposed order seeking leave of court to file an amended class action complaint seeking damages, among other forms of relief.

Upon receiving leave of the court, on May 15, 2024, the Plaintiffs filed the amended complaint (“Second Amended Complaint”).

Like the earlier complaints, the Second Amended Complaint challenges the directors’ determination not to subject the Omni Acquisition to a shareholder vote and alleges that, in so doing, the Company and certain of its current and former directors violated Tennessee corporate law.

The Second Amended Complaint further alleges that certain of the Company’s current and former directors breached their fiduciary duties to shareholders by depriving them of the right to vote on the Omni Acquisition.

Thereafter, on June 14, 2024, defendants removed the case to the United States District Court for the Eastern District of Tennessee, Greeneville Division.

Plaintiffs have filed a motion to remand the case to the Third District Chancer Court, and the federal court’s determination on plaintiffs’ motion remains pending.

Defendants contest the merits of the Second Amended Complaint and are in the process of defending the matter.

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.

3 unchanged sentences

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.

14 unchanged sentences

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

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

Insurance coverage in excess of the self-insured retention limit is an important part of the Company’s risk management process.

8 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.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2024 and December 31, 2023 are summarized below:

As of December 31, 2024

Level 1 Level 2 Level 3 Total

Liabilities under tax receivable agreement $ — $ — $ 13,295 $ 13,295

As of December 31, 2023

Level 1 Level 2 Level 3 Total

Liabilities under tax receivable agreement $ — $ — $ — $ —

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, 2024, the estimated fair value of the Company’s finance lease obligation, based on current borrowing rates, was $ 46,606 , compared to its carrying value of $ 47,788 .

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.

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

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

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

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.

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

2023 2022 2021

Earn-out asset impairment charge 1

$ — $ — $ 6,967

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

Segment Reporting

The Company has two reportable segments:

Expedited Freight and Intermodal.

The Company evaluates segment performance based on income from operations.

Segment results include intersegment revenues and shared costs.

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 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.

Our chief operating decision-maker, who is our Chief Executive Officer, analyzes the results of our business through the following reportable segments:

Expedited Freight, Omni, and Intermodal.

Our chief operating decision-maker evaluates the operating results and performance of our segments through segment profit.

These financial metrics are used to view operating trends, perform analytical comparisons and benchmark performance between periods and to monitor budget-to-actual variances on a monthly basis.

To manage operations and make decisions regarding resource allocations, our chief operating decision-maker is regularly provided and reviews expense information necessary to make decisions to meet customer demand for our services.

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.

2 unchanged sentences

No single customer accounted for more than 10% of the Company’s consolidated revenues from continuing operations for the years ended December 31, 2024, 2023 and 2022.

Year Ended December 31, 2024 Expedited Freight Omni Logistics Intermodal Corporate

External revenues $ 1,044,938 $ 1,196,841 $ 232,319 $ 164 $ 2,474,262

Intersegment revenues 70,225 — 513 — 70,738

1,115,163 1,196,841 232,832 164 2,545,000

Reconciliation of revenue

Elimination of intersegmental revenues ( 70,738 )

Total consolidated revenues $ 2,474,262

Purchase transportation 546,458 701,035 73,814 —

Salaries, wages and employee benefits 242,411 215,518 58,714 19,764

Operating leases 63,398 96,500 21,599 699

Depreciation and amortization 41,858 83,542 18,440 139

Insurance and claims 43,716 12,297 10,251 ( 1,582 )

Fuel expense 9,733 3,149 8,578 —

Other operating expenses 99,638 101,206 22,511 86,153

Impairment of goodwill — 1,028,397 — —

Segment profit (loss) 67,951 ( 1,044,803 ) 18,925 ( 105,009 ) ( 1,062,936 )

Reconciliation of segment profit or loss

Interest expense, net 189,215

Foreign exchange loss (gain) ( 1,093 )

Other operations ( 1,226 )

Loss before income taxes $ ( 1,249,832 )

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

Segment results from operations for the years ended December 31, 2023, 2022 and 2021 were as follows:

Year Ended December 31, 2023 Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

External revenues $ 1,096,484 $ 273,925 $ — $ — $ 1,370,409

Intersegment revenues 474 118 — ( 266 ) 326

Depreciation 31,626 9,740 — — 41,366

Amortization 5,788 10,251 — — 16,039

Income (loss) from continuing operations 116,040 25,327 ( 53,157 ) — 88,210

Purchases of property and equipment 29,928 797 — — 30,725

Year Ended December 31, 2022 Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

External revenues $ 1,260,414 $ 419,698 $ — $ — $ 1,680,112

Intersegment revenues ( 293 ) 20 — ( 205 ) ( 478 )

Depreciation 23,597 6,641 101 — 30,339

Amortization 3,461 8,752 — — 12,213

Income (loss) from continuing operations 192,583 56,874 ( 1,866 ) — 247,591

Purchases of property and equipment 37,984 1,270 — — 39,254

Year Ended December 31, 2021 Expedited Freight Intermodal Corporate Eliminations Consolidated - Continuing Operations

Year Ended December 31, 2023 Expedited Freight Intermodal Corporate

External revenues $ 1,096,810 $ 273,925 $ — $ 1,370,735

Intersegment revenues 148 118 — 266

Depreciation 20,826 3,538 63 — 24,427

Amortization 3,430 7,109 — — 10,539

Income (loss) from continuing operations 127,045 30,117 ( 10,137 ) — 147,025

Purchases of property and equipment 35,630 2,745 — — 38,375

As of December 31, 2023 $ 661,270 $ 270,421 $ 2,047,901 $ ( 59 ) $ 2,979,533

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

1,096,958 274,043 — 1,371,001

Reconciliation of revenue

Elimination of intersegmental revenues ( 266 )

Total consolidated revenues $ 1,370,735

Purchase transportation 511,254 74,941 —

Salaries, wages and employee benefits 226,528 66,925 ( 5,621 )

Operating leases 61,728 25,685 —

Depreciation and amortization 37,414 19,991 —

Insurance and claims 38,294 10,320 1,519

Fuel expense 10,884 11,121 —

Other operating expenses 94,545 39,733 57,530

Segment profit (loss) 116,311 25,327 ( 53,428 ) 88,210

Reconciliation of segment profit or loss

Interest expense, net ( 31,571 )

Foreign exchange loss (gain) —

Other operations —

Income before income taxes $ 56,639

Forward Air Corporation

2 unchanged sentences

(In thousands, except per share data)

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

Year Ended December 31, 2022 Expedited Freight Intermodal Corporate

External revenues $ 1,259,936 $ 419,698 $ — $ 1,679,634

Intersegment revenues 185 20 — 205

1,260,121 419,718 — 1,679,839

Reconciliation of revenue

Elimination of intersegmental revenues ( 205 )

Total consolidated revenues 1,679,839

Purchase transportation 624,994 105,656 34

Salaries, wages and employee benefits 233,876 73,406 4,523

Operating leases 53,339 31,950 ( 1 )

Depreciation and amortization 27,058 15,393 ( 101 )

Insurance and claims 33,924 9,087 ( 4,468 )

Fuel expense 10,962 15,993 —

Other operating expenses 83,385 111,359 ( 1,853 )

Segment profit (loss) 192,583 56,874 ( 1,866 ) 247,591

Reconciliation of segment profit or loss

Interest expense, net ( 5,138 )

Foreign exchange loss (gain) —

Other operations —

Income before income taxes $ 242,453

Revenue from the individual services within the Expedited Freight segment for the years ended December 31, 2024, 2023 and 2022 were as follows:

5 unchanged sentences

Total $ 1,115,163 $ 1,096,958 $ 1,260,121

Assets from each segment for the years ended December 31, 2024, 2023 were as follows:

2024 December 31,

Expedited Freight

$ 691,369 $ 661,270

Omni Logistics

257,323 270,421

127,861 2,047,901

Consolidated total assets $ 2,802,641 $ 2,979,533

Forward Air Corporation

8 unchanged sentences

Income from discontinued operations, net of tax — ( 4,876 ) ( 1,137 ) ( 374 )

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

Net (loss) income attributable to noncontrolling interest $ ( 27,082 ) $ ( 325,914 ) $ 38,073 $ 664

Net (loss) income attributable to Forward Air $ ( 61,712 ) $ ( 645,433 ) $ ( 73,408 ) $ ( 36,416 )

Basic net income (loss) per share:

8 unchanged sentences

$ ( 2.81 ) $ ( 23.47 ) $ ( 2.66 ) $ ( 1.24 )

The Company’s December 31, 2024 interim period includes an immaterial correction of an error that increases net loss from continuing operations by $ 30,300 , primarily as a result of recording a decrease to recorded goodwill impairment of $ 44,900 and a decrease in the recorded tax benefit of $ 65,500 .

These amounts relate to correcting adjustments made to the acquired Omni deferred tax liabilities as of January 25, 2024 and the related impact on the June 30th goodwill impairment charge.

Additionally, the net loss from continuing operations includes a correction of an error related to increased amortization expense for certain software service agreements.

The Company has evaluated the effects of the corrections described above, in accordance with guidance in ASC 250, "Accounting Change and Error Correction".

The Company concluded such corrections to be immaterial to previously issued interim financial statements.

Forward Air Corporation

Notes to Consolidated Financial Statements (Continued)

December 31, 2024

(In thousands, except per share data)

March 31 June 30 September 30 December 31

7 unchanged sentences

Net income per share1 $ 1.37 $ 0.76 $ 0.36 $ 3.93

$ 1.57 $ 2.05 $ 1.94 $ 1.61

Diluted net income per share:

32 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