UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET | |||||||||||||||||||||||||||||
AS OF SEPTEMBER 30, 2023 | |||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||
Historical | Pro Forma Adjustments | ||||||||||||||||||||||||||||
Forward | Omni | Acquisition Accounting Adjustments | Financing Adjustments | Pro Forma Combined | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 18,843 | $ | 52,407 | $ | (150,000) | 2a. | $ | 151,792 | 3a. | $ | 73,042 | |||||||||||||||||
Accounts receivable, net | 191,758 | 186,747 | (5,782) | 2f. | — | 372,723 | |||||||||||||||||||||||
Other current assets | 27,129 | 31,740 | — | — | 58,869 | ||||||||||||||||||||||||
Total current assets | 237,730 | 270,894 | (155,782) | 151,792 | 504,634 | ||||||||||||||||||||||||
Property and equipment, net of accumulated depreciation and amortization | 258,248 | 76,745 | — | — | 334,993 | ||||||||||||||||||||||||
Operating lease right-of-use assets | 134,726 | 198,627 | (35,452) | 2b. | — | 297,901 | |||||||||||||||||||||||
Goodwill | 356,763 | 530,479 | 770,937 | 2c. | — | 1,658,179 | |||||||||||||||||||||||
Other acquired intangibles, net of accumulated amortization | 146,710 | 757,714 | 607,848 | 2c. | — | 1,512,272 | |||||||||||||||||||||||
Other assets | 56,404 | 12,092 | — | — | 68,496 | ||||||||||||||||||||||||
Total assets | $ | 1,190,581 | $ | 1,846,551 | $ | 1,187,551 | $ | 151,792 | $ | 4,376,475 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||||||||
Accounts payable | $ | 45,702 | $ | 33,205 | $ | (5,782) | 2f. | $ | — | $ | 73,125 | ||||||||||||||||||
Accrued expenses | 56,552 | 66,754 | 94,663 | 2e. | (69,450) | 3a. | 148,519 | ||||||||||||||||||||||
Other current liabilities | 21,619 | 8,618 | — | — | 30,237 | ||||||||||||||||||||||||
Current portion of debt and finance lease obligations | 15,053 | 16,718 | (363) | 2b. | (15,290) | 3b. | 16,118 | ||||||||||||||||||||||
Current portion of operating lease liabilities | 51,515 | 46,084 | (10,827) | 2b. | — | 86,772 | |||||||||||||||||||||||
Current portion of contingent consideration | — | 53,588 | — | — | 53,588 | ||||||||||||||||||||||||
Total current liabilities | 190,441 | 224,967 | 77,691 | (84,740) | 408,359 | ||||||||||||||||||||||||
Finance lease obligations, less current portion | 23,387 | 8,466 | (736) | 2b. | — | 31,117 | |||||||||||||||||||||||
Long-term debt, less current portion and debt issuance costs | 118,857 | 1,415,855 | 24,176 | 3b. | 236,862 | 3b. | 1,795,750 | ||||||||||||||||||||||
Operating lease liabilities, less current portion | 87,938 | 177,917 | (49,999) | 2b. | — | 215,856 | |||||||||||||||||||||||
Contingent consideration liability, less current portion | — | 1,284 | 12,670 | 2a. | — | 13,954 |
Other long-term liabilities | 50,966 | 2,906 | — | — | 53,872 | ||||||||||||||||||||||||
Deferred income taxes | 53,292 | 25,395 | 125,489 | 2b. | — | 204,176 | |||||||||||||||||||||||
Shareholders’ equity: | |||||||||||||||||||||||||||||
Preferred stock, $0.01 | — | — | — | — | — | ||||||||||||||||||||||||
Series B Preferred units, $10.00 par value | — | — | 44 | 2b. | — | 44 | |||||||||||||||||||||||
Series C Preferred units, $10.00 par value | — | — | 16 | 2b. | — | 16 | |||||||||||||||||||||||
Common stock, $0.01 par value | 257 | — | 7 | 2b. | — | 264 | |||||||||||||||||||||||
Additional paid-in capital | 280,640 | — | 520,675 | 2b. | — | 801,315 | |||||||||||||||||||||||
Members' equity | — | 153,365 | (153,365) | 2b. | — | — | |||||||||||||||||||||||
Accumulated other comprehensive loss | — | (5,792) | 5,792 | 2b. | — | — | |||||||||||||||||||||||
Retained earnings | 384,803 | (157,812) | 63,149 | 2b. | (330) | 3b. | 289,810 | ||||||||||||||||||||||
Total shareholders’ equity attributable to Forward Air Corporation | 665,700 | (10,239) | 436,318 | (330) | 1,091,449 | ||||||||||||||||||||||||
Noncontrolling interest | — | — | 561,942 | 2d. | 561,942 | ||||||||||||||||||||||||
Total shareholders’ equity | 665,700 | (10,239) | 998,260 | (330) | 1,653,391 | ||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,190,581 | $ | 1,846,551 | $ | 1,187,551 | $ | 151,792 | $ | 4,376,475 |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 | |||||||||||||||||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||||||||||||||
Historical | Pro Forma Adjustments | ||||||||||||||||||||||||||||
Forward | Omni | Acquisition Accounting Adjustments | Financing Adjustments | Pro Forma Combined | |||||||||||||||||||||||||
Operating revenues: | $ | 1,242,695 | $ | 999,090 | $ | (28,034) | 2f. | $ | — | $ | 2,213,751 | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Purchased transportation | 557,626 | 596,516 | (28,034) | 2f. | — | 1,126,108 | |||||||||||||||||||||||
Salaries, wages and employee benefits | 254,365 | 207,784 | — | — | 462,149 | ||||||||||||||||||||||||
Operating leases | 76,094 | 74,823 | — | — | 150,917 | ||||||||||||||||||||||||
Depreciation and amortization | 43,654 | 45,330 | 59,197 | 2c. | — | 148,181 | |||||||||||||||||||||||
Insurance and claims | 40,768 | — | — | — | 40,768 | ||||||||||||||||||||||||
Fuel expense | 16,975 | — | — | — | 16,975 | ||||||||||||||||||||||||
Change in fair value of contingent consideration | — | 12,320 | — | — | 12,320 | ||||||||||||||||||||||||
Other operating expenses | 157,000 | 111,316 | — | — | 268,316 | ||||||||||||||||||||||||
Total operating expenses | 1,146,482 | 1,048,089 | 31,163 | — | 2,225,734 | ||||||||||||||||||||||||
Income (loss) from operations: | 96,213 | (48,999) | (59,197) | — | (11,983) | ||||||||||||||||||||||||
Other expense: | |||||||||||||||||||||||||||||
Interest expense, net | (7,595) | (122,076) | — | (23,992) | 3c. | (153,663) | |||||||||||||||||||||||
Other income | — | 596 | — | — | 596 | ||||||||||||||||||||||||
Foreign exchange gain (loss) | — | (270) | — | — | (270) | ||||||||||||||||||||||||
Total other expense | (7,595) | (121,750) | — | (23,992) | (153,337) | ||||||||||||||||||||||||
Income (loss) before income taxes | 88,618 | (170,749) | (59,197) | (23,992) | (165,320) | ||||||||||||||||||||||||
Income tax expense (benefit) | 23,011 | 426 | (51,789) | 2g. | (4,813) | 2g. | (33,165) | ||||||||||||||||||||||
Net income (loss) | 65,607 | (171,175) | (7,408) | (19,179) | (132,155) | ||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | — | — | (42,723) | 2d. | — | (42,723) | |||||||||||||||||||||||
Net income (loss) attributable to Forward common shareholders | $ | 65,607 | $ | (171,175) | $ | 35,315 | $ | (19,179) | $ | (89,432) |
Net income per share | |||||||||||||||||||||||||||||
Basic | $ | 2.51 | $ | (3.35) | |||||||||||||||||||||||||
Diluted | $ | 2.50 | $ | (3.35) | |||||||||||||||||||||||||
Weighted-average number of common shares outstanding | |||||||||||||||||||||||||||||
Basic | 25,995 | 26,765 | |||||||||||||||||||||||||||
Diluted | 26,096 | 26,765 | |||||||||||||||||||||||||||
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS | |||||||||||||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 | |||||||||||||||||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||||||||||||||
Historical | Pro Forma Adjustments | ||||||||||||||||||||||||||||
Forward | Omni | Acquisition Accounting Adjustments | Financing Adjustments | Pro Forma Combined | |||||||||||||||||||||||||
Operating revenues: | $ | 1,492,203 | $ | 1,406,784 | $ | (28,176) | 2f. | $ | — | $ | 2,870,811 | ||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Purchased transportation | 693,648 | 954,296 | (28,176) | 2f. | — | 1,619,768 | |||||||||||||||||||||||
Salaries, wages and employee benefits | 263,194 | 190,667 | — | — | 453,861 | ||||||||||||||||||||||||
Operating leases | 71,097 | 53,274 | — | — | 124,371 | ||||||||||||||||||||||||
Depreciation and amortization | 34,994 | 37,267 | 63,477 | 2c. | — | 135,738 | |||||||||||||||||||||||
Insurance and claims | 37,257 | — | — | — | 37,257 | ||||||||||||||||||||||||
Fuel expense | 20,951 | — | — | — | 20,951 | ||||||||||||||||||||||||
Change in fair value of contingent consideration | — | 11,924 | — | — | 11,924 | ||||||||||||||||||||||||
Other operating expenses | 166,501 | 91,134 | 94,663 | 2e. | — | 352,298 | |||||||||||||||||||||||
Total operating expenses | 1,287,642 | 1,338,562 | 129,964 | — | 2,756,168 | ||||||||||||||||||||||||
Income (loss) from operations: | 204,561 | 68,222 | (158,140) | — | 114,643 | ||||||||||||||||||||||||
Other expense: | |||||||||||||||||||||||||||||
Interest expense, net | (3,521) | (66,130) | — | (83,888) | 3c. | (153,539) | |||||||||||||||||||||||
Other income | — | 3,045 | — | — | 3,045 | ||||||||||||||||||||||||
Foreign exchange gain (loss) | — | 5,871 | — | — | 5,871 | ||||||||||||||||||||||||
Total other expense | (3,521) | (57,214) | — | (83,888) | (144,623) | ||||||||||||||||||||||||
Income (loss) before income taxes | 201,040 | 11,008 | (158,140) | (83,888) | (29,980) | ||||||||||||||||||||||||
Income tax expense (benefit) | 50,791 | 2,500 | (43,760) | 2g. | (14,831) | 2g. | (5,300) | ||||||||||||||||||||||
Net income (loss) | 150,249 | 8,508 | (114,380) | (69,057) | (24,680) | ||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest | — | — | (7,978) | 2d. | — | (7,978) | |||||||||||||||||||||||
Net income (loss) attributable to Forward common shareholders | $ | 150,249 | $ | 8,508 | $ | (106,402) | $ | (69,057) | $ | (16,702) |
Net income per share: | |||||||||||||||||||||||||||||
Basic | $ | 5.56 | $ | (0.61) | |||||||||||||||||||||||||
Diluted | $ | 5.53 | $ | (0.61) | |||||||||||||||||||||||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||||||||||||
Basic | 26,864 | 27,634 | |||||||||||||||||||||||||||
Diluted | 26,999 | 27,634 | |||||||||||||||||||||||||||
Cash Consideration | $ | 150,000 | ||||||
Contingent consideration(1) | 12,670 | |||||||
Forward Common Stock issued | 770 | |||||||
Forward Series B Preferred Units issued and Opco Class B Units issued | 4,365 | |||||||
Forward Series C Preferred Units issued | 1,592 | |||||||
Opco Series C-2 Preferred Units Issued | 9,023 | |||||||
Total shares of Forward Common Stock issued on an as-converted and as-exchanged basis | 15,750 | |||||||
Forward's share price(2) | $ | 68.74 | ||||||
Equity portion of purchase price | $ | 1,082,684 | ||||||
Extinguishment of Existing Omni's Credit Facilities | 1,452,133 | |||||||
Less: cash acquired | (52,407) | |||||||
Total estimated purchase price consideration, net of cash acquired | $ | 2,645,080 | ||||||
(1) Represents the estimated fair value of the tax receivable liability. Estimated fair value was calculated using the estimated undiscounted cash flow payments payable by Forward under the Tax Receivable Agreement and a discount rate of 9.25%. | ||||||||
(2) Represents the share price of Forward Common Stock as of September 30, 2023. The equity portion of the purchase price consideration will depend on the market price of Forward Common Stock on the date of the Acquisition Closing. |
Accounts receivable | $ | 186,747 | ||||||
Other current and noncurrent assets | 43,832 | |||||||
Property and equipment | 76,745 | |||||||
Operating lease right-of-use assets(1) | 163,175 | |||||||
Identifiable intangible assets | 1,365,562 | |||||||
Goodwill | 1,301,416 | |||||||
Total assets acquired | 3,137,477 | |||||||
Accounts payable and accrued expenses | 99,959 | |||||||
Finance lease obligations(1) | 11,524 | |||||||
Operating lease liabilities(1) | 11,983 | |||||||
Contingent consideration(2) | 163,175 | |||||||
Deferred income taxes(1) | 54,872 | |||||||
Total liabilities assumed | 150,884 | |||||||
Net assets acquired | 492,397 | |||||||
$ | 2,645,080 | |||||||
(1) Reflects an adjustment to the book value based on preliminary estimates of fair value. | ||||||||
(2) Reflects the contingent consideration in the amount of $54,872 estimated at fair value in Omni’s historical financial statements. |
As of September 30, 2023 | ||||||||||||||||||||||||||
Eliminate Historical Omni Equity (1) | Record the Combination Consideration | Other Equity Adjustments (2) | Total Pro Forma Adjustment | |||||||||||||||||||||||
Preferred stock | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Series B Preferred units | — | 44 | — | 44 | ||||||||||||||||||||||
Series C Preferred units | — | 16 | — | 16 | ||||||||||||||||||||||
Common stock | — | 7 | — | 7 | ||||||||||||||||||||||
Additional paid-in capital | — | 520,675 | — | 520,675 | ||||||||||||||||||||||
Members'equity | (153,365) | — | — | (153,365) | ||||||||||||||||||||||
Accumulated other comprehensive loss | 5,792 | — | — | 5,792 | ||||||||||||||||||||||
(Accumulated deficit) retained earnings | 157,812 | — | (94,663) | 63,149 | ||||||||||||||||||||||
Subtotal-shareholders' (deficit) equity | $ | 10,239 | $ | 520,742 | $ | (94,663) | $ | 436,318 | ||||||||||||||||||
(1) Represents the elimination of historical Omni shareholders’ (deficit) equity. | ||||||||||||||||||||||||||
(2) Includes the estimated transaction costs that are not expected to recur beyond twelve months after the Acquisition Closing. |
Estimated Amortization Expense | ||||||||||||||||||||
Preliminary Estimated Fair Value | For the Nine Months Ended September 30, 2023 | For the Nine Months Ended September 30, 2022 | ||||||||||||||||||
Acquired identifiable intangible assets(1) | $ | 1,365,562 | $ | 94,199 | $ | 94,199 | ||||||||||||||
Goodwill | 1,301,416 | |||||||||||||||||||
Less: Omni's historical identifiable intangible assets | (757,714) | (35,002) | (30,722) | |||||||||||||||||
Less: Omni's historical goodwill | (530,479) | |||||||||||||||||||
Pro forma adjustment | $ | 1,378,785 | $ | 59,197 | $ | 63,477 | ||||||||||||||
(1) Adjustment to amortization expense was determined using the straight-line method over an estimated useful life of ranging from five to twelve years. |
Reclassifications in the unaudited pro forma condensed combined balance sheet | ||||||||||||||||||||
As of September 30, 2023 | ||||||||||||||||||||
Before Reclassification | Reclassification | After Reclassification | ||||||||||||||||||
Prepaid expenses and other assets | $ | 28,523 | $ | (28,523) | (i) | $ | — | |||||||||||||
Other current assets | — | 31,740 | (i) | 31,740 | ||||||||||||||||
Accrued expenses and other | 72,155 | (72,155) | (ii) | — | ||||||||||||||||
Accrued expenses | — | 66,754 | (ii) | 66,754 | ||||||||||||||||
Other current liabilities | — | 8,618 | (ii) | 8,618 | ||||||||||||||||
Long-term debt, less current portion | 1,424,321 | (1,424,321) | (iii) | — | ||||||||||||||||
Finance lease obligations, less current portion | — | 8,466 | (iii) | 8,466 | ||||||||||||||||
Long-term debt, less current portion and debt issuance costs | — | 1,415,855 | (iii) | 1,415,855 |
Reclassifications in the unaudited pro forma condensed combined statement of operations | ||||||||||||||||||||
For the Nine Months Ended September 30, 2023 | ||||||||||||||||||||
Before Reclassification | Reclassification | After Reclassification | ||||||||||||||||||
Operating revenues | $ | 998,858 | $ | 232 | (iv) | $ | 999,090 | |||||||||||||
Selling, general and administrative | 390,120 | (390,120) | (iv) | — | ||||||||||||||||
Salaries, wages and employee benefits | — | 207,784 | (iv) | 207,784 | ||||||||||||||||
Operating leases | — | 74,823 | (iv), (v) | 74,823 | ||||||||||||||||
Depreciation and amortization | 48,901 | (3,571) | (v) | 45,330 | ||||||||||||||||
Other operating expenses | — | 111,316 | (iv) | 111,316 |
Reclassifications in the unaudited pro forma condensed combined statement of operations | ||||||||||||||||||||
For the Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Before Reclassification | Reclassification | After Reclassification | ||||||||||||||||||
Selling, general and administrative | $ | 332,942 | $ | (332,942) | (vi) | $ | — | |||||||||||||
Salaries, wages and employee benefits | — | 190,667 | (vi) | 190,667 | ||||||||||||||||
Operating leases | — | 53,274 | (vi), (vii) | 53,274 | ||||||||||||||||
Depreciation and amortization | 39,400 | (2,133) | (vii) | 37,267 | ||||||||||||||||
Other operating expenses | — | 91,134 | (vi) | 91,134 |
(i) Represents the reclassification of Prepaid expenses and other assets as reflected in Omni’s historical balance sheet as of September 30, 2023 to Other current assets to conform to Forward’s historical balance sheet presentation. | ||||||||||||||||||||
(ii) Represents the reclassification of Accrued expenses and other as reflected in Omni's historical balance sheet as of September 30, 2023 to Accrued expenses and Other current liabilities to conform to Forward's historical balance sheet presentation. | ||||||||||||||||||||
(iii) Represents the reclassification of Prepaid expenses and other assets as reflected in Omni’s historical balance sheet as of September 30, 2023 to Other current assets to conform to Forward’s historical balance sheet presentation. | ||||||||||||||||||||
(iv) Represents the reclassification of Selling, general and administrative as reflected in Omni's historical statement of operations for the nine months ended September 30, 2023 to Operating revenues, Salaries, wages and employee benefits, Operating leases and Other operating expenses to conform to Forward's historical statement of operations presentation. | ||||||||||||||||||||
(v) Represents the reclassification of Amortization expense relating to the right of use assets from Depreciation and amortization as reflected in Omni's historical statement of operations for the nine months ended September 30, 2023 to Operating leases to conform to Forward's historical statement of operations presentation. | ||||||||||||||||||||
(vi) Represents the reclassification of Selling, general and administrative as reflected in Omni's historical statement of operations for the nine months ended September 30, 2022 to Salaries, wages and employee benefits, Operating leases and Other operating expenses to conform to Forward's historical statement of operations presentation. | ||||||||||||||||||||
(vii) Represents the reclassification of Amortization expense relating to the right of use assets from Depreciation and amortization as reflected in Omni's historical statement of operations for the nine months ended September 30, 2022 to Operating leases to conform to Forward's historical statement of operations presentation. |
As of September 30, 2023 | ||||||||
Repayment of Existing Omni Credit Facilities | $ | (1,452,133) | ||||||
Repayment of Existing Forward Credit Facilities | (122,375) | |||||||
Gross proceeds of Senior Secured Notes(1) | 710,500 | |||||||
Gross proceeds of borrowings under the New Term Facility(1) | 1,080,000 | |||||||
Gross proceeds of borrowings under the New Revolving Credit Facility | 59,500 | |||||||
Cash paid for fees related to the Senior Secured Notes, New Term Facility and New Revolving Credit Facility | (54,250) | |||||||
Cash paid for transaction costs | (69,450) | |||||||
Total adjustment to cash | $ | 151,792 | ||||||
(1) Assumes the Senior Secured Notes are issued with an original issue discount of 98.0%. To the extent the borrowings under the New Term Facility are issued with original issue discount, the amount of drawings on the New Revolving Credit Facility and/or the amount of cash on hand utilized to consummate the Transactions will increase by a corresponding amount. |
As of September 30, 2023 | ||||||||
Current portion of debt: | ||||||||
Extinguishment of Existing Omni Credit Facilities | $ | (12,102) | ||||||
Extinguishment of Existing Forward Credit Facilities | (3,188) | |||||||
Total adjustments to current portion of debt | $ | (15,290) | ||||||
Long-Term Debt, net of current portion: | ||||||||
Extinguishment of Existing Omni Credit Facilities | (1,440,031) | |||||||
Extinguishment of Existing Forward Credit Facilities | (119,187) | |||||||
Record noncurrent portion of the Senior Secured Notes(1) | 725,000 | |||||||
Record noncurrent portion of the New Term Facility(1) | 1,125,000 | |||||||
Record noncurrent portion of the New Revolving Credit Facility(1) | 59,500 | |||||||
Less: debt issuance costs and debt discount(2) | (113,420) | |||||||
Pro forma adjustment to interest expense | $ | 236,862 | ||||||
(1) Debt obligations are classified as noncurrent debt based on the average term of seven years. | ||||||||
(2) Amount reflects the extinguishment of the debt issuance costs of the Existing Forward Credit Facilities of $330 offset by the aggregate debt issuance costs incurred with the Senior Secured Notes, the New Term Facility and the New Revolving Credit Facility of $54,250 and issuance of discounts on the Senior Secured Notes and the borrowings under the New Term Facility of $14,500 and $45,000, respectively. |
Nine Months Ended | ||||||||||||||
September 30, 2023 | September 30, 2022 | |||||||||||||
Interest expense for the Senior Secured Notes, New Term Facility and New Revolving Credit Facility(1) | $ | 140,882 | $ | 140,882 | ||||||||||
Amortization of debt issuance costs(2) | 5,931 | 5,931 | ||||||||||||
Amortization of debt discount | 6,181 | 6,181 | ||||||||||||
Total interest expense | 152,994 | 152,994 | ||||||||||||
Less: Omni’s historical interest expense and amortization of debt issuance costs | (121,974) | (65,888) | ||||||||||||
Less: Forward’s historical interest expense and amortization of debt issuance costs | (7,028) | (3,218) | ||||||||||||
Pro forma adjustment to interest expense | $ | 23,992 | $ | 83,888 | ||||||||||
(1) Adjustment is based on a blended annual interest rate of 9.8% (based on the actual interest rate on the Senior Secured Notes and the estimated initial interest rate applicable to borrowings under the New Senior Secured Credit Facilities) and undrawn fee in respect of the New Revolving Credit Facility of 0.50% per annum. Approximately $340,500 of the New Revolving Credit Facility is assumed to be undrawn. | ||||||||||||||
(2) Debt issuance costs are amortized on a straight-line basis over a weighted-average period of seven years. |