12/312020Q3FALSEfalse27,507,75000009127282,4482,05389,54079,2500.010.0150,000,00050,000,00027,258,49327,850,23327,258,49327,850,2330.180.180.180.180.180.181244912,67912,359233321210.180.180.180.180.180.180.180.2100009127282020-01-012020-09-30xbrli:shares00009127282020-10-27iso4217:USD00009127282020-09-3000009127282019-12-31iso4217:USDxbrli:shares00009127282020-07-012020-09-3000009127282019-07-012019-09-3000009127282019-01-012019-09-3000009127282018-12-3100009127282019-09-300000912728us-gaap:CommonStockMember2019-12-310000912728us-gaap:AdditionalPaidInCapitalMember2019-12-310000912728us-gaap:RetainedEarningsMember2019-12-310000912728us-gaap:RetainedEarningsMember2020-01-012020-03-3100009127282020-01-012020-03-310000912728us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310000912728us-gaap:CommonStockMember2020-01-012020-03-310000912728us-gaap:CommonStockMember2020-03-310000912728us-gaap:AdditionalPaidInCapitalMember2020-03-310000912728us-gaap:RetainedEarningsMember2020-03-3100009127282020-03-310000912728us-gaap:RetainedEarningsMember2020-04-012020-06-3000009127282020-04-012020-06-300000912728us-gaap:CommonStockMember2020-04-012020-06-300000912728us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300000912728us-gaap:CommonStockMember2020-06-300000912728us-gaap:AdditionalPaidInCapitalMember2020-06-300000912728us-gaap:RetainedEarningsMember2020-06-3000009127282020-06-300000912728us-gaap:RetainedEarningsMember2020-07-012020-09-300000912728us-gaap:CommonStockMember2020-07-012020-09-300000912728us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000912728us-gaap:CommonStockMember2020-09-300000912728us-gaap:AdditionalPaidInCapitalMember2020-09-300000912728us-gaap:RetainedEarningsMember2020-09-300000912728us-gaap:CommonStockMember2018-12-310000912728us-gaap:AdditionalPaidInCapitalMember2018-12-310000912728us-gaap:RetainedEarningsMember2018-12-310000912728us-gaap:RetainedEarningsMember2019-01-012019-03-3100009127282019-01-012019-03-310000912728us-gaap:CommonStockMember2019-01-012019-03-310000912728us-gaap:AdditionalPaidInCapitalMember2019-01-012019-03-310000912728us-gaap:CommonStockMember2019-03-310000912728us-gaap:AdditionalPaidInCapitalMember2019-03-310000912728us-gaap:RetainedEarningsMember2019-03-3100009127282019-03-310000912728us-gaap:RetainedEarningsMember2019-04-012019-06-3000009127282019-04-012019-06-300000912728us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-300000912728us-gaap:CommonStockMember2019-04-012019-06-300000912728us-gaap:CommonStockMember2019-06-300000912728us-gaap:AdditionalPaidInCapitalMember2019-06-300000912728us-gaap:RetainedEarningsMember2019-06-3000009127282019-06-300000912728us-gaap:RetainedEarningsMember2019-07-012019-09-300000912728us-gaap:CommonStockMember2019-07-012019-09-300000912728us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300000912728us-gaap:CommonStockMember2019-09-300000912728us-gaap:AdditionalPaidInCapitalMember2019-09-300000912728us-gaap:RetainedEarningsMember2019-09-30xbrli:pure0000912728fwrd:PoolDistributionMemberus-gaap:SegmentDiscontinuedOperationsMember2020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMember2020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMember2019-12-310000912728us-gaap:SegmentDiscontinuedOperationsMember2020-07-012020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMember2019-07-012019-09-300000912728us-gaap:SegmentDiscontinuedOperationsMember2020-01-012020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMember2019-01-012019-09-300000912728fwrd:LinnStarMember2020-01-120000912728fwrd:FSAMember2019-04-210000912728us-gaap:MeasurementInputRiskFreeInterestRateMemberfwrd:FSAMember2019-04-210000912728us-gaap:MeasurementInputRiskFreeInterestRateMemberfwrd:FSAMember2019-12-310000912728us-gaap:MeasurementInputRiskFreeInterestRateMemberfwrd:FSAMember2020-09-300000912728fwrd:FSAMemberus-gaap:MeasurementInputDiscountRateMember2019-04-210000912728fwrd:FSAMemberus-gaap:MeasurementInputDiscountRateMember2019-12-310000912728fwrd:FSAMemberus-gaap:MeasurementInputDiscountRateMember2020-09-300000912728fwrd:MeaurementInputRevenueVolatilityMemberfwrd:FSAMember2019-04-210000912728fwrd:MeaurementInputRevenueVolatilityMemberfwrd:FSAMember2019-12-310000912728fwrd:MeaurementInputRevenueVolatilityMemberfwrd:FSAMember2020-09-300000912728fwrd:FSAMember2020-04-012020-06-300000912728fwrd:FSAMember2020-07-012020-09-300000912728fwrd:FSAMember2020-09-300000912728fwrd:OSTMember2019-07-140000912728us-gaap:NoncompeteAgreementsMemberfwrd:FSAMember2019-04-210000912728us-gaap:NoncompeteAgreementsMemberfwrd:OSTMember2019-07-140000912728us-gaap:NoncompeteAgreementsMemberfwrd:LinnStarMember2020-01-120000912728us-gaap:CustomerRelationshipsMemberfwrd:FSAMember2019-04-210000912728us-gaap:CustomerRelationshipsMemberfwrd:OSTMember2019-07-140000912728us-gaap:CustomerRelationshipsMemberfwrd:LinnStarMember2020-01-120000912728us-gaap:NoncompeteAgreementsMemberfwrd:FSAMember2019-04-212019-04-210000912728us-gaap:NoncompeteAgreementsMemberfwrd:OSTMember2019-07-142019-07-140000912728us-gaap:NoncompeteAgreementsMemberfwrd:LinnStarMember2020-01-122020-01-120000912728us-gaap:CustomerRelationshipsMemberfwrd:FSAMember2019-04-212019-04-210000912728us-gaap:CustomerRelationshipsMemberfwrd:OSTMember2019-07-142019-07-140000912728us-gaap:CustomerRelationshipsMemberfwrd:LinnStarMember2020-01-122020-01-120000912728fwrd:ExpeditedLTLMember2019-12-310000912728fwrd:ExpeditedLTLMember2020-09-300000912728fwrd:TruckloadMember2019-12-310000912728fwrd:TruckloadMember2020-09-300000912728fwrd:FinalMileMember2019-12-310000912728fwrd:FinalMileMember2020-09-300000912728fwrd:IntermodalMember2019-12-310000912728fwrd:IntermodalMember2020-09-300000912728fwrd:LinnStarMember2020-09-300000912728fwrd:FSAMember2019-04-212019-04-210000912728us-gaap:EmployeeStockOptionMember2020-01-012020-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentContinuingOperationsMember2020-01-012020-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentContinuingOperationsMember2019-12-310000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentContinuingOperationsMember2020-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentContinuingOperationsMember2019-01-012019-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentContinuingOperationsMember2019-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentDiscontinuedOperationsMember2019-12-310000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentDiscontinuedOperationsMember2020-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentDiscontinuedOperationsMember2020-01-012020-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentDiscontinuedOperationsMember2019-01-012019-09-300000912728us-gaap:EmployeeStockOptionMemberus-gaap:SegmentDiscontinuedOperationsMember2019-09-300000912728fwrd:EmployeeNonVestedSharesMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-12-310000912728us-gaap:SegmentContinuingOperationsMemberfwrd:EmployeeNonVestedSharesMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:EmployeeNonVestedSharesMember2020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-01-012019-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-09-300000912728us-gaap:SegmentDiscontinuedOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-12-310000912728us-gaap:SegmentDiscontinuedOperationsMemberfwrd:EmployeeNonVestedSharesMember2020-01-012020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMemberfwrd:EmployeeNonVestedSharesMember2020-09-300000912728us-gaap:SegmentDiscontinuedOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-01-012019-09-300000912728us-gaap:SegmentDiscontinuedOperationsMemberfwrd:EmployeeNonVestedSharesMember2019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMember2020-01-012020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMember2019-01-012019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentContinuingOperationsMember2019-12-310000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentContinuingOperationsMember2020-01-012020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentContinuingOperationsMember2020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentContinuingOperationsMember2019-01-012019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentContinuingOperationsMember2019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentDiscontinuedOperationsMember2019-12-310000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentDiscontinuedOperationsMember2020-01-012020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentDiscontinuedOperationsMember2020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentDiscontinuedOperationsMember2019-01-012019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMemberus-gaap:SegmentDiscontinuedOperationsMember2019-09-300000912728fwrd:EmployeeStockPurchasePlanMember2020-09-300000912728fwrd:EmployeeStockPurchasePlanMember2020-01-012020-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentContinuingOperationsMember2020-01-012020-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentContinuingOperationsMember2019-01-012019-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentContinuingOperationsMember2020-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentContinuingOperationsMember2019-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentDiscontinuedOperationsMember2020-01-012020-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentDiscontinuedOperationsMember2019-01-012019-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentDiscontinuedOperationsMember2020-09-300000912728fwrd:EmployeeStockPurchasePlanMemberus-gaap:SegmentDiscontinuedOperationsMember2019-09-300000912728fwrd:NonemployeeDirectorNonvestedSharesGrantedMember2016-05-012016-05-310000912728fwrd:NonemployeeDirectorNonvestedSharesGrantedMember2020-09-300000912728fwrd:NonemployeeDirectorNonvestedSharesGrantedMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:NonemployeeDirectorNonvestedSharesGrantedMember2019-12-310000912728us-gaap:SegmentContinuingOperationsMemberfwrd:NonemployeeDirectorNonvestedSharesGrantedMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:NonemployeeDirectorNonvestedSharesGrantedMember2020-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:NonemployeeDirectorNonvestedSharesGrantedMember2019-01-012019-09-300000912728us-gaap:SegmentContinuingOperationsMemberfwrd:NonemployeeDirectorNonvestedSharesGrantedMember2019-09-300000912728us-gaap:RevolvingCreditFacilityMember2020-04-160000912728us-gaap:LetterOfCreditMember2020-04-160000912728fwrd:SwinglineloanMember2020-04-160000912728fwrd:FederalfundsMember2020-01-012020-09-300000912728us-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300000912728us-gaap:LetterOfCreditMember2020-09-300000912728us-gaap:RevolvingCreditFacilityMember2020-09-300000912728us-gaap:StockOptionMember2020-07-012020-09-300000912728us-gaap:StockOptionMember2019-07-012019-09-300000912728us-gaap:StockOptionMember2020-01-012020-09-300000912728us-gaap:StockOptionMember2019-01-012019-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMember2020-07-012020-09-300000912728fwrd:KeyEmployeePerformanceShareBasedPlanMember2019-07-012019-09-300000912728fwrd:NonvestedSharesandDeferredStockUnitsMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMember2020-01-012020-09-300000912728us-gaap:SegmentContinuingOperationsMember2019-01-012019-09-300000912728fwrd:FacilityLeaseMember2020-01-012020-09-300000912728fwrd:EquipmentLeaseMember2020-01-012020-09-300000912728us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300000912728fwrd:A2016StockRepurchasePlanMember2016-07-210000912728fwrd:A2019StockRepurchasePlanMember2019-02-050000912728fwrd:A2019StockRepurchasePlanMember2020-07-012020-09-300000912728fwrd:A2019StockRepurchasePlanMember2019-07-012019-09-300000912728fwrd:A2016StockRepurchasePlanMember2019-01-012019-09-300000912728fwrd:A2019StockRepurchasePlanMember2020-01-012020-09-300000912728fwrd:A2019StockRepurchasePlanMember2019-01-012019-09-300000912728fwrd:A2019StockRepurchasePlanMember2020-09-300000912728us-gaap:CommonStockMember2020-07-012020-09-300000912728us-gaap:CommonStockMember2020-04-012020-06-300000912728us-gaap:CommonStockMember2020-01-012020-03-310000912728us-gaap:CommonStockMember2019-10-012019-12-310000912728us-gaap:CommonStockMember2019-07-012019-09-300000912728us-gaap:CommonStockMember2019-04-012019-06-300000912728us-gaap:CommonStockMember2019-01-012019-03-310000912728us-gaap:SubsequentEventMemberus-gaap:CommonStockMember2020-10-012020-12-310000912728fwrd:Aggregatedeductibleforclaimsbetween3000and5000Member2020-07-012020-09-300000912728srt:MinimumMemberfwrd:Aggregatedeductibleforclaimsbetween3000and5000Member2020-07-012020-09-300000912728srt:MaximumMemberfwrd:Aggregatedeductibleforclaimsbetween3000and5000Member2020-07-012020-09-300000912728fwrd:Aggregatedeductibleforclaimsbetween5000and10000Member2020-07-012020-09-300000912728fwrd:Aggregatedeductibleforclaimsbetween5000and10000Membersrt:MinimumMember2020-07-012020-09-300000912728fwrd:Aggregatedeductibleforclaimsbetween5000and10000Membersrt:MaximumMember2020-07-012020-09-300000912728fwrd:ExpeditedFreightMember2020-07-012020-09-300000912728fwrd:IntermodalMember2020-07-012020-09-300000912728us-gaap:IntersegmentEliminationMember2020-07-012020-09-300000912728us-gaap:SegmentContinuingOperationsMember2020-07-012020-09-300000912728fwrd:ExpeditedFreightMember2020-09-300000912728us-gaap:IntersegmentEliminationMember2020-09-300000912728us-gaap:SegmentContinuingOperationsMember2020-09-300000912728fwrd:ExpeditedFreightMember2019-07-012019-09-300000912728fwrd:IntermodalMember2019-07-012019-09-300000912728us-gaap:SegmentContinuingOperationsMember2019-07-012019-09-300000912728us-gaap:IntersegmentEliminationMember2019-07-012019-09-300000912728fwrd:ExpeditedFreightMember2019-09-300000912728fwrd:IntermodalMember2019-09-300000912728us-gaap:IntersegmentEliminationMember2019-09-300000912728us-gaap:SegmentContinuingOperationsMember2019-09-300000912728fwrd:ExpeditedFreightMember2020-01-012020-09-300000912728fwrd:IntermodalMember2020-01-012020-09-300000912728us-gaap:IntersegmentEliminationMember2020-01-012020-09-300000912728fwrd:ExpeditedFreightMember2019-01-012019-09-300000912728fwrd:IntermodalMember2019-01-012019-09-300000912728us-gaap:IntersegmentEliminationMember2019-01-012019-09-300000912728fwrd:NetworkrevenueMember2020-07-012020-09-300000912728fwrd:NetworkrevenueMember2019-07-012019-09-300000912728fwrd:NetworkrevenueMember2020-01-012020-09-300000912728fwrd:NetworkrevenueMember2019-01-012019-09-300000912728fwrd:TruckloadrevenueMember2020-07-012020-09-300000912728fwrd:TruckloadrevenueMember2019-07-012019-09-300000912728fwrd:TruckloadrevenueMember2020-01-012020-09-300000912728fwrd:TruckloadrevenueMember2019-01-012019-09-300000912728fwrd:FinalMilerevenueMember2020-07-012020-09-300000912728fwrd:FinalMilerevenueMember2019-07-012019-09-300000912728fwrd:FinalMilerevenueMember2020-01-012020-09-300000912728fwrd:FinalMilerevenueMember2019-01-012019-09-300000912728fwrd:OtherrevenueMember2020-07-012020-09-300000912728fwrd:OtherrevenueMember2019-07-012019-09-300000912728fwrd:OtherrevenueMember2020-01-012020-09-300000912728fwrd:OtherrevenueMember2019-01-012019-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 000-22490
fwrd-20200930_g1.jpg
FORWARD AIR CORPORATION
(Exact name of registrant as specified in its charter)
Tennessee62-1120025
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)
1915 Snapps Ferry RoadBuilding NGreenevilleTN37745
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code: (423) 636-7000
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueFWRDThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes x  No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer¨Non-accelerated filer¨Smaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Yes ¨  No x

 The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of October 27, 2020 was 27,507,750.



Table of Contents
   
Forward Air Corporation
   
  Page
  Number
Part I.Financial Information 
   
Item 1.Financial Statements (Unaudited) 
   
 
   
 
   
 
   
 
   
Item 2.
   
Item 3.
   
Item 4.
   
Part II.Other Information 
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 3.
   
Item 4.
Item 5.
   
Item 6.
   

2

Table of Contents

Part I.Financial Information
  
Item 1.Financial Statements (Unaudited).
Forward Air Corporation
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
(Unaudited)
 September 30,
2020
December 31,
2019
Assets
Current assets:  
Cash and cash equivalents$42,990 $64,749 
Accounts receivable, less allowance of $2,448 in 2020 and $2,053 in 2019153,070 136,214 
Other current assets22,062 20,403 
Current assets held for sale16,925 14,952 
Total current assets235,047 236,318 
Property and equipment379,306 373,571 
Less accumulated depreciation and amortization189,042 180,815 
Total property and equipment, net190,264 192,756 
Operating lease right-of-use assets115,551 105,170 
Goodwill and other acquired intangibles:  
Goodwill240,933 215,699 
Other acquired intangibles, net of accumulated amortization of $89,540 in 2020 and $79,250 in 2019145,086 124,857 
Total goodwill and other acquired intangibles, net386,019 340,556 
Other assets43,266 39,374 
Noncurrent assets held for sale78,063 76,704 
Total assets$1,048,210 $990,878 
Liabilities and Shareholders’ Equity 
Current liabilities:  
Accounts payable$32,581 $25,411 
Accrued expenses52,454 44,154 
Other current liabilities4,277 5,318 
Current portion of debt and finance lease obligations1,557 1,421 
Current portion of operating lease obligations40,258 35,886 
Current liabilities held for sale26,006 24,974 
Total current liabilities157,133 137,164 
Debt and finance lease obligations, less current portion116,583 72,249 
Operating lease obligations, less current portion76,003 69,678 
Other long-term liabilities61,536 56,448 
Deferred income taxes45,532 41,214 
Noncurrent liabilities held for sale39,227 36,943 
Shareholders’ equity:  
Preferred stock  
Common stock, $0.01 par value: Authorized shares - 50,000,000, Issued and outstanding shares - 27,258,493 in 2020 and 27,850,233 in 2019273 279 
Additional paid-in capital237,497 226,869 
Retained earnings314,426 350,034 
Total shareholders’ equity552,196 577,182 
Total liabilities and shareholders’ equity$1,048,210 $990,878 
The accompanying notes are an integral part of the financial statements.
3

Table of Contents

    
Forward Air Corporation
Consolidated Statements of Comprehensive Income
(Dollars in thousands, except share and per share amounts)
(Unaudited)
 Three months endedNine months ended
 September 30,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Operating revenue$331,997 $313,683 $919,232 $895,531 
Operating expenses:  
Purchased transportation173,054 150,296 465,721 426,283 
Salaries, wages and employee benefits66,927 68,532 200,258 192,330 
Operating leases17,327 15,860 52,598 46,861 
Depreciation and amortization9,172 9,016 27,919 27,531 
Insurance and claims8,671 9,532 26,437 29,276 
Fuel expense2,715 4,637 9,247 13,219 
Other operating expenses30,621 26,624 83,854 78,071 
Total operating expenses308,487 284,497 866,034 813,571 
Income from continuing operations23,510 29,186 53,198 81,960 
Other expense:  
Interest expense(1,304)(761)(3,355)(1,917)
Other, net 1  (1)
Total other expense(1,304)(760)(3,355)(1,918)
Income before income taxes22,206 28,426 49,843 80,042 
Income tax expense5,214 7,372 12,209 20,055 
Net income from continuing operations16,992 21,054 37,634 59,987 
(Loss) income from discontinued operations, net of tax(345)1,141 (9,458)2,945 
Net income and comprehensive income $16,647 $22,195 $28,176 $62,932 
Basic net income (loss) per share:
Continuing operations$0.61 $0.74 $1.35 $2.10 
Discontinued operations(0.01)0.04 (0.34)0.10 
Net income per share$0.60 $0.78 $1.01 $2.20 
Diluted net income (loss) per share:
Continuing operations$0.61 $0.74 $1.35 $2.09 
Discontinued operations(0.01)0.04 (0.34)0.10 
Net income per share$0.60 $0.78 $1.01 $2.19 
Dividends per share:$0.18 $0.18 $0.54 $0.54 

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

4

Table of Contents

Forward Air Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Nine months ended
 September 30,
2020
September 30,
2019
 
Operating activities:
Net income from continuing operations$37,634 $59,987 
Adjustments to reconcile net income of continuing operations to net cash provided by operating activities of continuing operations
Depreciation and amortization27,919 27,531 
Change in fair value of earn-out liability(2,209)890 
Share-based compensation7,852 8,536 
Loss on disposal of property and equipment, net108 781 
Provision for loss on receivables606 819 
Provision for revenue adjustments2,972 2,239 
Deferred income tax expense4,317 5,881 
Changes in operating assets and liabilities
Accounts receivable(20,436)(3,778)
Prepaid expenses and other current assets(173)(4,380)
Income taxes1,426 (2,557)
Accounts payable and accrued expenses20,477 11,876 
Net cash provided by operating activities of continuing operations80,493 107,825 
Investing activities:
Proceeds from disposal of property and equipment1,415 1,693 
Purchases of property and equipment(16,439)(23,240)
Acquisition of business, net of cash acquired(55,931)(39,000)
Net cash used in investing activities of continuing operations(70,955)(60,547)
Financing activities:
Payments of finance lease obligations(529)(528)
Proceeds from senior credit facility65,000 20,000 
Payments on senior credit facility(20,000) 
Payments on earn-out liability(5,284) 
Proceeds from exercise of stock options1,901 2,063 
Payments of cash dividends(15,090)(15,421)
Repurchase of common stock (repurchase program)(45,248)(47,906)
Proceeds from common stock issued under employee stock purchase plan294 261 
Cash settlement of share-based awards for tax withholdings(3,444)(3,032)
(Distributions to) contributions from subsidiary held for sale(8,897)6,452 
Net cash used in financing activities from continuing operations(31,297)(38,111)
Net (decrease) increase in cash of continuing operations(21,759)9,167 
Cash from discontinued operations:
Cash (used in) provided by operating activities of discontinued operations, net(8,090)9,906 
Cash used in investing activities of discontinued operations, net(807)(3,454)
Cash provided by (used in) financing activities of discontinued operations, net8,897 (6,452)
Net (decrease) increase in cash(21,759)9,167 
Cash at beginning of period of continuing operations64,749 25,657 
Cash at beginning of period of discontinued operations/held for sale   
Net (decrease) increase in cash(21,759)9,167 
Less: cash at end of period of discontinued operations/held for sale   
Cash at end of period of continuing operations$42,990 $34,824 
 The accompanying notes are an integral part of the financial statements.
5

Table of Contents

Forward Air Corporation
Consolidated Statements of Shareholders' Equity
(In thousands)
(Unaudited)
 Common StockAdditional Paid-in
Capital
Retained EarningsTotal Shareholders' Equity
 SharesAmount
Balance at December 31, 201927,850 $279 $226,869 $350,034 $577,182 
Net income and comprehensive income— — — 8,375 8,375 
Share-based compensation— — 3,266 — 3,266 
Dividends ($0.18 per share)— — 2 (5,052)(5,050)
Cash settlement of share-based awards for tax withholdings(42)— — (2,672)(2,672)
Share repurchases(268)(3)— (15,256)(15,259)
Vesting of previously non-vested shares139 1 (2)— (1)
Balance at March 31, 202027,679 $277 $230,135 $335,429 $565,841 
Net income and comprehensive income— — — 3,155 3,155 
Common stock issued under employee stock purchase plan7 — 295 — 295 
Share-based compensation— — 2,654 — 2,654 
Dividends ($0.18 per share)— — 3 (5,042)(5,039)
Cash settlement of share-based awards for tax withholdings(13)— — (613)(613)
Vesting of previously non-vested shares56 — (1)— (1)
Balance at June 30, 202027,729 $277 $233,086 $332,929 $566,292 
Net income and comprehensive income— — — 16,647 16,647 
Exercise of stock options42 1 1,901 — 1,902 
Share-based compensation— — 2,507 — 2,507 
Dividends ($0.18 per share)— — 3 (5,008)(5,005)
Cash settlement of share-based awards for tax withholdings(3)— — (158)(158)
Share repurchases(519)(5)— (29,984)(29,989)
Vesting of previously non-vested shares9 — — — — 
Balance at September 30, 202027,258 273 237,497 314,426 552,196 
6

Table of Contents

Forward Air Corporation
Consolidated Statements of Shareholders' Equity, continued
(In thousands, except share data)
 Common StockAdditional Paid-in
Capital
Retained EarningsTotal Shareholders' Equity
 SharesAmount
Balance at December 31, 201828,535 $285 $210,296 $342,663 $553,244 
Net income and comprehensive income— — — 18,407 18,407 
Other— 2 — — 2 
Exercise of stock options18 — 830 — 830 
Share-based compensation— — 3,047 — 3,047 
Dividends ($0.18 per share)— — 1 (5,190)(5,189)
Cash settlement of share-based awards for tax withholdings(44)(1)— (2,720)(2,721)
Share repurchases(230)(2)— (14,179)(14,181)
Vesting of previously non-vested shares136 — — — — 
Balance at March 31, 201928,415 $284 $214,174 $338,981 $553,439 
Net income and comprehensive income— — — 22,330 22,330 
Other— — (2)(2)(4)
Exercise of stock options10 — 448 — 448 
Common stock issued under employee stock purchase plan5 — 261 — 261 
Share-based compensation— — 3,197 — 3,197 
Dividends ($0.18 per share)— — 2 (5,146)(5,144)
Cash settlement of share-based awards for tax withholdings(1)— — (49)(49)
Share repurchases(407)(4)— (24,432)(24,436)
Vesting of previously non-vested shares18 — — — — 
Balance at June 30, 201928,040 $280 $218,080 $331,682 $550,042 
Net income and comprehensive income— — — 22,195 22,195 
Exercise of stock options17 — 785 — 785 
Share-based compensation— — 2,762 — 2,762 
Dividends ($0.18 per share)— — 2 (5,090)(5,088)
Cash settlement of share-based awards for tax withholdings(4)— — (262)(262)
Share repurchases(152)(1)— (9,288)(9,289)
Vesting of previously non-vested shares14 — — — — 
Balance at September 30, 201927,915 279 221,629 339,237 561,145 
The accompanying notes are an integral part of the financial statements.
7

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020

1.    Description of Business and Basis of Presentation

Basis of Presentation and Principles of Consolidation

Forward Air Corporation ("the Company", "We", "Our") is a leading asset-light freight and logistics company. Prior to the Company’s Board of Directors’ (the "Board") approval of a strategy to divest the Company's Pool Distribution business (“Pool”), its services were classified into three principal reportable segments: Expedited Freight, Intermodal and Pool. As a result of the decision to divest Pool, which has been classified as a discontinued operation, the Company now has two principal reportable segments: Expedited Freight and Intermodal (see Note 14, Segment Reporting). See Note 4, Discontinued Operations and Held for Sale, for additional information regarding the decision to divest Pool.
Through the Expedited Freight segment, the Company operates a comprehensive national network to provide expedited regional, inter-regional and national less-than-truckload ("LTL") services. Expedited Freight offers customers local pick-up and delivery and other services including final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

The Company's 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. Today, Intermodal operates primarily in the Midwest and Southeast, with a smaller operational presence in the Southwest United States.

Pool, which has been classified as a discontinued operation, provides high-frequency handling and distribution of time sensitive product to numerous destinations within a specific geographic region. Pool offers this service throughout the Mid-Atlantic, Southeast, Midwest and Southwest United States.

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by United States generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company’s operating results are subject to seasonal trends (as described in the Company's 2019 Form 10-K) when measured on a quarterly basis; therefore operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. For further information, refer to the consolidated financial statements and notes thereto included in the Forward Air Corporation Annual Report on Form 10-K for the year ended December 31, 2019.

The accompanying unaudited consolidated financial statements of the Company include Forward Air Corporation and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior period financial information to conform to the current year presentation.

Discontinued Operations

On April 23, 2020, the Board approved a strategy to divest Pool within the next year and accordingly, has been classified as assets held for sale as of September 30, 2020 and for all prior periods presented. Pool assets and liabilities are reflected as “Assets and liabilities held for sale” on the Consolidated Balance Sheets in this report. In addition, the results of operations for Pool have been presented in this report as discontinued operations. Amounts for all periods discussed below reflect the results of operations, financial condition and cash flows from Forward Air’s continuing operations, unless otherwise noted. See Note 4, Discontinued Operations and Held for Sale.
8

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

In particular, management has made estimates and assumptions related to the impact of the novel coronavirus ("COVID-19") on its business. The current environment resulting from COVID-19 is unprecedented and comes with a great deal of uncertainty as discussed further throughout this document.

2.    Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss methodology previously employed to measure credit losses for most financial assets and requires the use of a forward-looking expected loss model. Under current accounting guidance, credit losses are recognized when it is probable a loss has been incurred. The updated guidance will require financial assets to be measured at amortized costs less a reserve, equal to the net amount expected to be collected. This standard is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard as of January 1, 2020, which resulted in the Company revising its allowance for doubtful accounts policy on a prospective basis. The adoption of this standard did not have a material impact on the Company's financial statements.

The Company has a broad range of customers, including freight forwarders, third-party logistics (“3PL”) companies, passenger and cargo airlines, steamship lines, and retailers, located across a diverse geography. In addition, the Company does not have a significant concentration of credit risk; no single customer accounts for more than 10% of its consolidated revenue. In circumstances in which the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (for example, bankruptcy filings, accounts turned over for collection, or litigation), the Company records a specific reserve for these bad debts against amounts due, in order to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes a general reserve based on a percentage of revenue to ensure accounts receivables are properly recorded at the net amount expected to be collected. Management evaluates the collectability of its accounts receivables at least quarterly and sets the reserve based on historical and current collection history and reasonable and supportable forecasts about any expected changes to our collection experience in the future due to changing economic conditions. If circumstances change (i.e., the Company experiences higher than expected defaults or an unexpected material adverse change in a customer’s ability to meet its financial obligations to the Company), the estimates of the recoverability of amounts due to the Company could be changed by a material amount. Accounts are written off after all means of collection, including legal action, have been exhausted.

3.     Revenue

The Company's revenue is generated from providing transportation and related services to customers in accordance with contractual agreements, bill of lading ("BOL") contracts and general tariff provisions. Related services include accessorial charges such as terminal handling, storage, equipment rentals and customs brokerage. These services are distinct and are accounted for as separate performance obligations. Generally, the Company's performance obligations begin when a customer's BOL is received and are satisfied when the delivery of a shipment and related services are completed. The Company generally recognizes revenue for its services over time to coincide with when its customers simultaneously receive and consume the benefits of these services. Performance obligations are short-term with transit days typically less than a week. Upon delivery of a shipment or related service, customers are billed and remit payment according to payment terms.

Excluding Pool, the Company's revenue from contracts with customers is disclosed within two reportable segments: Expedited Freight and Intermodal. This is consistent with disclosures in earnings releases and annual reports and with the information regularly reviewed by the Chief Operating Decision Maker ("CODM") for evaluating financial performance. See additional discussion in Note 14, Segment Reporting.


9

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
4.    Discontinued Operations and Held for Sale

On April 23, 2020, the Board approved a strategy to divest Pool within the next year. Accordingly, Pool has been classified as assets held for sale as of September 30, 2020 and for all prior periods presented. Pool assets and liabilities are reflected as “Assets and liabilities held for sale” on the Consolidated Balance Sheets in this report. In addition, the results of operations for Pool have been presented in this report as discontinued operations.
Upon meeting the assets held for sale criteria and during its annual goodwill impairment analysis, the Company evaluated whether Pool's estimated fair value, less costs to sell, exceeded the carrying value of its assets and liabilities. As a result of that assessment, we determined that the fair value of Pool exceeded its carrying value by approximately 5%. In addition, during the three months ended September 30, 2020, no indicators of goodwill impairment were identified, and the Company believes the fair value of Pool exceeds its carrying value.
The results of Pool were previously included in its own segment. The Company will continue to have two reporting segments: Expedited Freight and Intermodal, which is consistent with the way the CODM reviews operating results and makes resource decisions (See Note 14, Segment Reporting). Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. These costs have been reclassified to the eliminations and other column in the segment reconciliation that appears in Note 14, Segment Reporting.
10

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
Summarized Held for Sale and Discontinued Operations Financial Information
 
The following table provides a reconciliation of the carrying amounts of major classes of assets and liabilities which are included in assets and liabilities held for sale in the accompanying Consolidated Balance Sheets as of each of the periods presented below:
 September 30,
2020
December 31,
2019
Assets
Current assets:  
Accounts receivable, less allowance of $108 in 2020 and $49 in 2019$16,164 $13,983 
Other current assets761 969 
Total current assets held for sale$16,925 $14,952 
Property and equipment$51,199 $53,166 
Less accumulated depreciation and amortization31,480 32,891 
Total property and equipment, net19,719 20,275 
Operating lease right-of-use assets47,568 46,487 
Goodwill and other acquired intangibles: 
Goodwill5,406 5,406 
Other acquired intangibles, net of accumulated amortization of $12,679 in 2020 and $12,359 in 20192,621 2,941 
Total goodwill and other acquired intangibles, net8,027 8,347 
Other assets2,749 1,595 
Total noncurrent assets held for sale$78,063 $76,704 
Liabilities   
Current liabilities:  
Accounts payable$3,501 $4,575 
Accrued expenses5,720 5,668 
Other current liabilities 2 
Current portion of operating lease obligations16,785 14,729 
Total current liabilities held for sale$26,006 $24,974 
  Operating lease obligations, less current portion$30,851 $31,847 
  Other long-term liabilities4,192 2,368 
  Deferred income taxes4,184 2,728 
Total noncurrent liabilities held for sale$39,227 $36,943 
11

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020

The following table summarizes the results of operations classified as discontinued operations, net of tax, in the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019:
 Three months endedNine months ended
 September 30,
2020
September 30,
2019
September 30,
2020
September 30,
2019
Operating revenue$37,521 $47,980 $88,447 $133,359 
Operating expenses:  
Purchased transportation8,700 13,310 21,383 36,461 
Salaries, wages and employee benefits17,012 18,727 42,519 51,569 
Operating leases5,304 4,661 15,950 13,159 
Depreciation and amortization 1,512 1,657 4,505 
Insurance and claims1,525 1,398 4,538 4,254 
Fuel expense1,045 1,468 2,785 4,423 
Other operating expenses4,467 5,401 12,309 14,975 
Total operating expenses38,053 46,477 101,141 129,346 
(Loss) income from discontinued operations before income taxes(532)1,503 (12,694)4,013 
Income tax (benefit) expense(187)362 (3,236)1,068 
(Loss) income from discontinued operations, net of tax$(345)$1,141 $(9,458)$2,945 

5.    Acquisitions and Long-Lived Assets

Expedited Freight Acquisitions

As part of the Company's strategy to expand final mile pickup and delivery operations, in January 2020, the Company acquired certain assets and liabilities of Linn Star Holdings, Inc., Linn Star Transfer, Inc. and Linn Star Logistics, LLC (collectively, “Linn Star”) for $57,239. This acquisition increased the Company's Final Mile capabilities with an additional 20 locations. In addition, in April 2019, the Company acquired certain assets and liabilities of FSA Network, Inc., doing business as FSA Logistix (“FSA”), for $27,000 and a potential earnout of up to $15,000. Both transactions were funded using cash flows from operations. The assets, liabilities, and operating results of these acquisitions have been included in the Company's consolidated financial statements from the date of acquisition and have been assigned to the Expedited Freight reportable segment.

The FSA acquisition agreement provides the sellers an earnout opportunity of up to $15,000 based on the achievement of certain revenue milestones over two one-year periods, beginning May 1, 2019. Upon acquisition, the fair value of the earn-out liability was $11,803 and was included in other current and long-term liabilities in the opening consolidated balance sheet. The earn-out liability was classified as level 3 of the fair value hierarchy as defined in the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (“the FASB Codification”) and the value was determined based on estimated revenues and the probability of achieving them. The fair value was based on the two-year performance of FSA's acquired customer revenue and was estimated using a Monte Carlo simulation.

12

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
The initial weighted average assumptions used in the Monte Carlo simulation are summarized in the following table:
FSA Earn-out
April 21, 2019December 31, 2019September 30, 2020
Risk-free rate2.9%2.2%2.0%
Revenue discount rate4.4%4.4%3.2%
Revenue volatility3.0%5.0%7.0%

In June 2020, the Company paid the first period earn-out payment of $5,284; the second and final payment is expected to be paid in the second quarter of 2021. During the three months ended September 30, 2020, the earn-out fair value increased $493 to $4,277, which is classified as a current liability. The change in fair value is included in other operating expenses and is based on changes in expected cash flows and expected new business wins.

Intermodal Acquisitions

As part of the Company's strategy to expand its Intermodal operations, in July 2019, the Company acquired certain assets and liabilities of O.S.T. Logistics, Inc. and O.S.T. Trucking Co., Inc. (together referred to as “OST”) for $12,000. OST is a drayage company and expanded the Company's intermodal footprint on the East Coast, primarily in Baltimore, Maryland, with additional locations in Pennsylvania, Virginia, South Carolina and Georgia. This transaction was funded using cash flows from operations. The assets, liabilities, and operating results of the acquisition have been included in the Company's consolidated financial statements from the date of acquisition and have been included in the Intermodal reportable segment.

13

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
Allocations of Purchase Price

The following table presents the allocations of the previously discussed acquisition purchase prices to the assets acquired and liabilities assumed based on their estimated fair values and resulting residual goodwill (in thousands):
FSAOSTLinn Star
April 21, 2019July 14, 2019January 12, 2020
Tangible assets:
Cash$202 $— $1,308 
Other receivables1,491 — — 
Prepaid expenses and other current assets— — 1,182 
Property and equipment40 10,371 605 
Operating lease right-of-use assets3,209 1,672 10,011 
Total tangible assets4,942 12,043 13,106 
Intangible assets:
Non-compete agreements900 850 450 
Customer relationships17,900 5,700 29,800 
Goodwill19,963 2,050 25,234 
Total intangible assets38,763 8,600 55,484 
Total assets acquired43,705 20,643 68,590 
Liabilities assumed:
Current liabilities8,466 — 1,340 
Other liabilities5,030 — — 
Debt and finance lease obligations— 6,971 — 
Operating lease obligations3,209 1,672 10,011 
Total liabilities assumed16,705 8,643 11,351 
Net assets acquired$27,000 $12,000 $57,239 

The above purchase price allocation for Linn Star is preliminary as the Company is still in the process of finalizing the valuation of the acquired assets and liabilities assumed. The above estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date through the date of this filing. The acquired definite-lived intangible assets have the following useful lives:
Useful Lives
FSAOSTLinn Star
Non-compete agreements5 years3 years1 year
Customer relationships15 years10 years15 years

The fair value of the non-compete agreements and customer relationships were estimated using an income approach (level 3). Under this method, an intangible asset's fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To estimate fair value, the Company used cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believed the level and timing of cash flows appropriately reflected market participant assumptions. Cash flows were assumed to extend through the remaining economic useful life of each class of intangible asset.

14

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
Goodwill

Goodwill is allocated to reporting units that are expected to benefit from the business combinations generating the goodwill. Excluding Pool, the Company has four reporting units - Expedited LTL, Truckload, Final Mile and Intermodal. As discussed in Note 4, Discontinued Operations and Held for Sale, the carrying amounts of Pool's assets and liabilities, including goodwill, are classified as held for sale in the accompanying Consolidated Balance Sheets and its operating results are not part of the continuing operations of the Company.

In evaluating whether events or changes in circumstances indicate that an interim impairment assessment is required, management considers if there were any indicators that exist that may impair the carrying value of the Company’s goodwill. During the three months ended September 30, 2020, no indicators of goodwill impairment were identified and an interim impairment test was not required as the Company does not believe it is more likely than not that the carrying value of any of its reporting units exceeds its fair value.

The following is a summary of the Company's goodwill as of September 30, 2020. Approximately $161,789 of goodwill is deductible for tax purposes.
Beginning balance, December 31, 2019Linn Star AcquisitionEnding balance, September 30, 2020
Expedited LTL
Goodwill$97,593 $— $97,593 
Accumulated Impairment— — — 
Truckload
Goodwill45,164 — 45,164 
Accumulated Impairment(25,686)— (25,686)
Final Mile
Goodwill19,963 25,234 45,197 
Accumulated Impairment— — — 
Intermodal
Goodwill78,665 — 78,665 
Accumulated Impairment— — — 
Total
Goodwill241,385 25,234 266,619 
Accumulated Impairment(25,686)— (25,686)
$215,699 $25,234 $240,933 
Other Long-Lived Assets
The Company tests its long-lived assets (asset groups) for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Management evaluates long-lived assets for impairment at the lowest level for which cashflows are identifiable. In general, these assets are reviewed at the reporting unit level, discussed above, by significant asset category. Examples of significant asset categories include land, buildings, tractors, trailers, other equipment, leasehold improvements, right-of-use lease assets, customer relationships, non-compete agreements, software and inventory.

During the three months ended September 30, 2020, the Company determined no indicators of an impairment existed and all of its assets were recoverable. As such, no impairments to the Company's long-lived assets were identified.


15

Table of Contents
Forward Air Corporation
Notes to Consolidated Financial Statements
(In thousands, except per share data)
(Unaudited)
September 30, 2020
6.    Share-Based Payments

The Company’s general practice has been to make a single annual grant of share-based compensation in the first quarter to key employees and to make other employee grants only in connection with new employment or promotions.  Forms of share-based compensation granted to employees by the Company include stock options, non-vested shares of common stock (“non-vested shares”), and performance shares.  The Company also typically makes a single annual grant of non-vested shares to non-employee directors in conjunction with the annual election of non-employee directors to the Board of Directors. Share-based compensation is based on the grant date fair value of the instrument and is recognized ratably over the requisite service period or vesting period.  All share-based compensation expense is recognized in salaries, wages and employee benefits. Share-based compensation amounts below are disclosed on both a continuing and discontinuing basis.

Employee Activity - Stock Options
 
Stock option grants to employees generally expire seven years from the grant date and typically vest ratably over a three-year period.  All forfeitures were recognized as they occurred. The Company used the Black-Scholes option-pricing model to estimate the grant-date fair value of options granted.  On a continuing basis, there were no options granted during the nine months ended September 30, 2019. Further, there were no options granted to employees of the Company's discontinued operations during the nine months ended September 30, 2020 or 2019. The weighted-average fair value of options granted and assumptions used to estimate their fair value during the nine months ended September 30, 2020 were as follows (on a continuing basis):
Nine months ended
September 30, 2020
Expected dividend yield