Forward Air Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Acquisitions and Long-Lived Assets (Tables)

Acquisitions and Long-Lived Assets (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

The initial weighted average assumptions used in the Monte Carlo simulation are summarized in the following table:



	FSA Earn-out
	April 21, 2019	December 31, 2019	June 30, 2020
Risk-free rate	2.9%	2.2%	2.2%
Revenue discount rate	4.4%	4.4%	3.2%
Revenue volatility	3.0%	5.0%	6.0%

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

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):




	FSA		OST		Linn Star
	April 21, 2019		July 14, 2019		January 12, 2020
Tangible assets:
Cash	$	202	$	—	$	1,308
Other receivables	1,491		—		—
Prepaid expenses and other current assets	—		—		1,182
Property and equipment	40		10,371		605
Operating lease right-of-use assets	3,209		1,672		10,011
Total tangible assets	4,942		12,043		13,106
Intangible assets:
Non-compete agreements	900		850		450
Customer relationships	17,900		5,700		29,800
Goodwill	19,963		2,050		25,234
Total intangible assets	38,763		8,600		55,484
Total assets acquired	43,705		20,643		68,590

Liabilities assumed:
Current liabilities	8,466		—		1,340
Other liabilities	5,030		—		—
Debt and finance lease obligations	—		6,971		—
Operating lease obligations	3,209		1,672		10,011
Total liabilities assumed	16,705		8,643		11,351
Net assets acquired	$	27,000	$	12,000	$	57,239

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

The acquired definite-lived intangible assets have the following useful lives:



	Useful Lives
	FSA	OST	Linn Star
Non-compete agreements	5 years	3 years	1 year
Customer relationships	15 years	10 years	15 years

Fair Value, Concentration of Risk [Table Text Block]

The significant assumptions used in this analysis were as follows:



	Expedited LTL		Truckload		Final Mile		Intermodal
Discount rate	10.5	%	13.5	%	13.5	%	13.5	%
Terminal growth rate	4.0	%	4.0	%	4.0	%	4.0	%

Schedule of Goodwill [Table Text Block]

The following is a summary of the Company's goodwill as of June 30, 2020. Approximately $161,789 of goodwill is deductible for tax purposes.



	Beginning balance, December 31, 2019			Linn Star Acquisition		Ending balance, June 30, 2020
Expedited LTL
Goodwill	$	97,593		$	—	$	97,593
Accumulated Impairment	—			—		—

Truckload
Goodwill	45,164			—		45,164
Accumulated Impairment	(25,686		)	—		(25,686		)

Final Mile
Goodwill	19,963			25,234		45,197
Accumulated Impairment	—			—		—

Intermodal
Goodwill	78,665			—		78,665
Accumulated Impairment	—			—		—

Total
Goodwill	241,385			25,234		266,619
Accumulated Impairment	(25,686		)	—		(25,686		)
	$	215,699		$	25,234	$	240,933

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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