Forward Air Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Subsequent Event (Notes)

Subsequent Event (Notes)

12 Months Ended

Dec. 31, 2013

12. Subsequent Event

On February 2, 2014 the Company acquired all of the stock of Central States Trucking Company and Central States Logistics, Inc. (collectively referred to as “CST”). CST provides industry leading container and intermodal drayage services primarily within the Midwest region of the United States. CST also provides linehaul service within the airport-to-airport space, as well as, dedicated contract and Container Freight Station (“CFS”) warehouse services. The purchase price will be $84,884. CST will be acquired on a cash-free, debt-free basis with an adjustment for working capital. The transaction was funded using the Company’s cash reserves.

The acquisition of CST provides the Company with a scalable platform for which to enter the intermodal drayage space and thereby continuing to expand and diversify the Company's service offering.

The following table presents a preliminary allocation of the CST purchase price to the assets acquired and liabilities assumed based on their estimated fair values and resulting residual goodwill:



	February 2, 2014
Tangible assets:
Accounts receivable	$	9,463
Property and equipment	1,051
Other assets	186
Total tangible assets	10,700
Intangible assets:
Non-compete agreements	850
Trade name	1,250
Customer relationships	42,500
Goodwill	44,892
Total intangible assets	89,492
Total assets acquired	100,192

Liabilities assumed:
Current liabilities	6,040
Other liabilities	123
Debt	9,145
Total liabilities assumed	15,308
Net assets acquired	$	84,884

The above estimated fair values of assets acquired and liabilities assumed are based on the information that was available as of the CST acquisition date through the date of this filing. The Company is still in the process of finalizing the valuation of the acquired assets and liabilities assumed as part of this acquisition. As of the time of this filing, the Company estimates the acquired trade names and non-compete agreements will be amortized on straight-line basis of 3.0 and 5.0 year lives, respectively. The Company further estimates the customer relationships acquired will be amortized on straight-line basis over a 12.0 year life. The goodwill assigned to the CST transaction will be deductible for tax purposes.

The following unaudited pro forma information presents a summary of the Company's consolidated results of operations as if the CST acquisition occurred as of January 1, 2012 (in thousands, except per share data).



	Year ended
	December 31, 2013		December 31, 2012
Operating revenue	$	717,027	$	639,936
Income from operations	91,789		89,284
Net income	59,091		56,205
Net income per share
Basic	$	1.96	$	1.94
Diluted	$	1.92	$	1.90