#1Forward Air. CORPORATION Forward Air Forward Air Bangor Business Moving Forward" 30016 419593 53 SM Investor Presentation February 2019 Keeping Your Business Moving Forward NASDAQ:FWRD www.ForwardAirCorp.com#2Forward Air.. CORPORATION Forward Looking Statements Disclosure Today's presentation and discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "estimates," or similar expressions are intended to identify these forward-looking statements. These statements, which include statements regarding our growth opportunities in LTL, Intermodal and adjacent modes, our plans regarding growth management and safety, future technology investments and expectations to pay dividends and execute share repurchases are based on Forward Air's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to Forward Air's reports and filings with the Securities and Exchange Commission. To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we have included the following non-GAAP financial information in this presentation: adjusted revenue, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted operating income, adjusted operating margin, adjusted income taxes, adjusted net income, adjusted EPS and free cash flow. The reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in the Appendix to this presentation. Because these non-GAAP financial measures exclude certain items as described herein, they may not be indicative of the results that the Company expects to recognize for future periods. As a result, these non-GAAP financial measures should be considered in addition to, and not a substitute for, financial information prepared in accordance with GAAP. 2#3I Forward Air.. CORPORATION Origins: Expedited Ground Alternative to Airline Linehaul 1981 Landair Services "Time definite Truckload services for the air cargo industry" • Asset-based Truckload • Asset-light LTL History 1990 Forward Air Operations of Landair Services 1993 Landair IPO "Scheduled LTL services to air freight forwarders, air cargo carriers & airlines" • 1.2M lbs/week 1998 Forward Air Separation (Landair spin-off) "Largest and most comprehensive surface transportation network for deferred air freight" Organic Growth + M&A • 17.3M lbs/week 2015 Towne Air Freight 2018 - Acquisition "Leading provider of time-definite surface transportation and related logistics services to the North American expedited ground freight market" "Asset-light freight and logistics company" . Expedited LTL: 50.2M lbs/week 3#4Forward Air.. CORPORATION Asset-Light Freight & Logistics Company 2018 Revenue = $1.3 Billion • EXPEDITED LTL Comprehensive national network • Provides expedited regional, inter-regional and national LTL services • Offers local pick-up and delivery, . warehousing and other services Growing e-commerce, 3PL, D2D and final mile solutions TRUCKLOAD Premium SerVICES • Expedited Truckload brokerage • Dedicated fleet services • Maximum security and temperature- controlled logistics services . Long-haul, regional and local services INTERMODAL • . High value intermodal container drayage Warehousing and other value-added services • Regional linehaul • Growing footprint from M&A and greenfield startups POOL DISTRIBUTION • Customized consolidation, final-mile handling and distribution of time-sensitive products • DC bypass, flow through, direct-to-store and reverse logistics services • Expanding beyond retail into new verticals 4#5Forward Air. CORPORATION Shareholder Value Creation Recently Celebrated Our 25th IPO Anniversary with Superior Returns FWRD US $ C64.64 +0.29 At 17:20 d Vol 103,442 0 64.36Q FWRD US Equity Buy Date 11/16/1993 B Buy Price 5 Adj. Price |CACS » 3.5556 1 Settings Sell Date 11/16/2018 Sell Price 16.00 62.51 23220.00 • Gross • Net 064. 64/64.66Q 19x1 H 65.28 B L 63.860 Val 6.689M Total Return Analysis Period Daily Shares 1000 Currency USD Total Dividends Holding Strategy Price Change Adj. Shares | CACS... 4500.0000 7) Commission Cost Total Return Annual Eq 1658.0938% 12.1422% Gain/Loss 265295.0000 Divs Reinvested In Security Divs Reinvested At 2.3583 1M 3M 6M YTD 1Y 2y Зу Shares Purchased Reinvested Income 5Y 10V 675.26 3.45k 1921.9094% 1824.7549% 12.7707% 307505.5060 12.54809 291960.7852 Show Dividend Even. Australia 61 2 9777 8500 Brazil 5511 2305 2000 Europe 44 20 7330 7500 Carmony 49 69 9204 1210 Hong Kong S52 2977 6000 Japon 0135201 0900 Зіпуароте 05.02.12 1000 U.5. 1 212 310 2000 Copyright 2010 Dlcombers Finance L.F. SN 180573 HOOB-4517-0 29-Nov-18 18:00:45 EST GMT-5:00 Forward Air Total Annualized DJI C 25338.84 -27.59 On 29 Nov 0 25343.65 H 25479.04 DJI Index Range 11/16/1993 25257.54/25422.44 L 25202.79 Prev 25338.84 D) Settings 11/16/2018 Price Open Close Dividends Gross Period Daily Net Holding Strategy Price Change Divs Reinvested In The Index Dividends Reinvested At 1.2943% 1M 3M 6M YTD 1Y Page 1 Total Return Analysis Currency USD 9131 Day Holding Period Total Return Annual Eq 584.8503% 7.9946% 1125.9262% 10.5376% 792.9060% 2Y 3Y 5Y 10Y Table Gain/Loss +21.7025k +41.7805k 9.1459% +29.4229k Show Dividends Dow Jones Total Australia 61 2 9777 8500 Brazil 5511 2305 9000 Europe 44 20 7330 7500 Cermony 49 69 9204 1210 Hong Kong $52 2977 6000 Japon 03 3201 0900 Singapore 65 0212 1000 U.5. 1 212 310 2000 Copyright 2010 Bloomberg Finance L.r. SN 180573 HO08-4517-3 29-Nov-18 18:01:32 EST GMT-5:00 25 Years: 11/16/93 to 11/16/18 Price Change Total Return* 1,658% 1,922% 12.1% 12.8% 585% 8.0% 1,126% 10.5% Annualized * Assumes dividends reinvested in underlying security 5#6$ millions (non-GAAP) 1,400 1,200 1,000 800 600 400 200 Forward Air.. CORPORATION 0 2010 2011 Double-Digit Revenue Growth This Decade 2012 Consolidated Revenue CAGR 13% Revenue Growth * 2013 2014 2015 2016 2017 2018 Note: Impact of ASC 606 (Revenue from Contracts with Customers) estimated for 2010 to 2013 Non-GAAP adjustment, see appendix ➤ Organic as well as acquisitive growth ➤ Expanded existing services and introduced new offerings (e.g., Intermodal) 6#7$ millions (non-GAAP) 140 120 100 80 60 40 20 Forward Air.. CORPORATION Operating Income Growth Double-Digit Operating Income Growth This Decade Consolidated Operating Income 0 2010 H 2011 2012 2013 Note: Impact of ASC 606 (Revenue from Contracts with Customers) estimated for 2010 to 2013 Non-GAAP adjustment, see appendix * CAGR 10% 2014 2015 2016 2017 2018 ➤ Organic as well as acquisitive growth ➤ Expedited LTL key contributor; Intermodal growing rapidly 7#8Forward Air.. CORPORATION Key Attributes Our Business Model Enables Our Growth Business Model Premium Solutions: expedited, time-definite, service-sensitive, etc. Benefits from secular growth in time-sensitive applications, such as e-commerce Wholesale Provider: Freight Forwarders, Airlines, 3PLs, etc. Expands our reach as we serve our customers' customer Asset-Light: Utilize independent owner-operators and third-party carriers ➤ Provides strong cash flow to finance expansion of capabilities and modes 8#9Forward Air.. CORPORATION Growth Opportunities Think "Parcel for the Big Stuff" LTL • E-commerce • B2B Door-to-Door • B2C Final Mile (Heavy Bulky) CST Intermodal • Network expansion • M&A • Value-Added (CFS, Dedicated, etc.) Adjacent Modes Expedited Truckload Forward • Pool Distribution (Scheduled B2B Final Mile) Forward Air Delivering Peace of Mind When It Really Matters Most 9#10SMF SFO Forward Air.. CORPORATION PDX O SEA Expedited LTL Network YUL MSP O TVC YYZ ALB O BOS SYR SWF GRR O ROC OBOLKAS MKE O MBS DTW JFK BUF ABE EWR CID CLE MDT O DSM ORD TOL O O SLC O DEN PIT PHL OMA O SBN O BRLO MLI FWA О IADO CMH DAY BWI о IND RIC MCI CVG EVV ORF LAS O SDF GSO STL O TRI O RDU BNA CLT LAX MEM TYS AMA PHX TUL O LIT O GSP о O 이 ABQ OKC SAN LBB O HSV O CAE CHS O TUS O DFW BHM ATL O MAF О O SHV MGM ELP AUS MOB O BTR National Hub Regional Hub Station JAX OPNS IAH LFT SAT O MSY CRP LRD MCO ΤΡΑ MIA O MFE 10#11Forward Air.. CORPORATION Oakland Seattle Los Angeles • CST Locations Minneapolis Dallas Milwaukee Intermodal Network Detroit Newark Chicago Cleveland Philadephia Joliet Columbus Rochelle Baltimore Indianapolis Cincinnati Kansas City Norfolk • FA Multi-Service Locations La Porte Houston Nashville Charlotte Memphis Atlanta Charleston Savannah Jacksonville 11#12Forward Air.. CORPORATION LAS VEGAS Pool Distribution Network DES MOINES CHICAGO KANSAS CITY ST. LOUIS ALBANY ROCHESTER DETROIT BALTIMORE COLUMBUS RICHMOND ALBURQUERQUE PHOENIX NASHVILLE LITTLE ROCK TULSA LUBBOCK LEGEND FAS Regional Hub FAS Station/Coverage Agent Station/Coverage Non-Serviced Area RALEIGH CHARLOTTE TYLER DALLAS ATLANTA MONTGOMERY BATON ROUGE HOUSTON JACKSONVILLE SAN ANTONIO MCALLEN LAKELAND MIAMI 12#13Forward Air.. CORPORATION Strong Foundation Strengthening Our Foundation for Growth Growth Management People • Implementing data-driven pricing analysis to drive profitable growth • Uncovering "untapped upside" • Establishing next generation HR (e.g., employee advisory board) Enhancing owner-operator recruiting (e.g., survivor-style driver contests) • Establishing goal to be world class Safety • Enhancing safety mindset IT • Improving operational systems & customer visibility • Implementing better data management to drive decisions Culture & Purpose Building on strong operational culture Expanding our mission beyond our legacy 13#14Forward Air.. CORPORATION Management Team Tom Schmitt President and CEO Glenn Adelaar SVP, Information Systems Matt Casey SVP, Safety Roger Gellis SVP, Pool Distribution Michael Hance Chief Legal Officer Matthew Jewell President, Intermodal Kyle Mitchin SVP, Human Resources Mike Morris CFO & Treasurer Chris Ruble COO, Expedited Services • As of September 1, 2018 • · • . · Previous: Schenker AG, Purolator, FedEx 18 years with Forward Air Previous: Sabre, American Airlines 1 year with Forward Air Previous: Forest City Technologies, Panther Premium Logistics 11 years with Forward Air • Previous: Velocity Express, FedEx • · 12 years with Forward Air Previous: Baker, Donelson, Bearman, Caldwell & Berkowitz PLC 18 years with Forward Air • Previous: Austin & Sparks, PC . . . • • 4 years with Forward Air Previous: Panther Premium Logistics 2 years with Forward Air Previous: XPO/Con-way 22 years with Forward Air Previous: FedEx 14#15Forward Air.. CORPORATION How High is Up? How Might Our "Victory Article" Read? - Forward Air – An American Icon Taking Off "The same way people think parcel when their package matters most, they think Forward Air LTL and Truckload for the heavy stuff." "Largest and best Intermodal business in North America by any metric." Frand Al For Forward Farwan "Industry safety leader. Fleet owners increasingly using Forward Air's training programs." "Recognized as a pragmatic adopter of leading technologies. Most recently implemented platooning on selected long haul lanes." "Back-to-back appearances as one of America's Best Employers" Hypothetical future magazine article provided for illustrative purposes only 15#16Forward Air. CORPORATION Forward Air Forward Air 30016 Bangor Business Moving Forward" 53 419593 Financial Overview#17Forward Air. CORPORATION 2018 was a record year across every major financial metric 2018 Results ($000s except per share) 2017 2018 % Change Revenue Operating Income Net Income 1,169,346 1,320,886 13.0% 108,757 122,031 12.2% 87,255 92,051 5.5% EPS $2.89 $3.12 8.0% EBITDA 149,081 164,212 10.1% Free Cash Flow 67,539 117,319 73.7% 17#18• Forward Air.. CORPORATION Financial Overview Goal to deliver superior returns to shareholders through profitable organic growth and disciplined acquisitions Commitment to return capital to shareholders through dividends and share repurchases Revenue 2016 $ 1,030 M 2017 $ 1,169 M 2018 $ 1,321 M Operating Income $ 102 M * $ 109 M $ 122 M Operating Margin 9.9% * EPS $2.08* 9.3% $ 2.89 9.2% $3.12 EBITDA $ 140 M* $ 150 M $ 164 M * EBITDA Margin 13.6% 12.8% 12.4% ROIC (w/o Goodwill & Intang.) 24.5% 26.2% 32.2% ROIC (w/Goodwill & Intang.) Capital to Shareholders 12.2% 13.4% 16.4% $ 56 M $ 67 M $ 85 M Debt/Adjusted EBITDA 0.2 x 0.3 x 0.3 x ROIC is calculated as Non Operating Profit After Tax (adjusted for the amortization of intangibles) divided by Operating Invested Capital * Non-GAAP adjustment, see appendix 18#19$1,400 $1,200 Forward Air.. CORPORATION ** Revenue* (CAGR = 13%) $1,000 825 $800 672 604 $600 557 494 $400 Revenue & Earnings History ** EBITDA (CAGR = 10%) EPS** (CAGR = 14%) $3.50 164 150 $3.00 143 140 127 $180 1,321 $160 1,169 1,030 $140 988 $120 108 105 98 $100 74 $80 $60 $2.50 2.08 2.07 $2.00 1.95 1.78 1.77 1.60 $1.50 1.10 $1.00 $40 $200 $0.50 $20 $0 $0 $0.00 10 11 12 13 14 15* 16 17 18 10 11 12 13 14 15 16 17 18 10 11 12 * Non-GAAP adjustment, see appendix ** Impact of ASC 606 (Revenue from Contracts with Customers) estimated for 2010-2013 Adjusted to exclude CST acquisition costs ($0.02) 3.12 2.89 13 14 15 16* 17 18 19#20($ in millions) Forward Air.. CORPORATION Strong Cash Flow Generation $180 $160 $140 $120 $100 $80 $60 $54 $40 $77 $69 $91 $92 $86 $130 $103 $153 $38 $39 $40 $36 $33 $35 $20 $20 $20 $14 $0 2010 2011 2012 2013 T 2014 2015 2016 T 2017 2018 Net Capex Cash Flow From Operations ך 20 20#21Forward Air. CORPORATION Forward Air Forward Air 30016 Bangor Business Moving Forward" 53 419593 Appendix#22Forward Air.. CORPORATION Expedited LTL Highlights • Nationwide time-definite service • • Pick-up and delivery covering 92% of continental US zip codes Offer variety of freight management services (warehousing, dedicated final- mile, consolidation/deconsolidation, etc.) Growth Areas • ⚫ E-commerce solutions for freight intermediaries (forwarders, airlines, etc.) • Expanding into 3PL market to supplement network density • Door-to-door offerings for B2B and B2C solutions • Heavy goods, white-glove final-mile service Forward Air Expedited LTL Revenue Being forward" 53 Operating Income EBITDA Lbs per Day Shipments per Day Lbs per Shipment Ford Air ward Air 2018 $ 748 M $ 96 M $ 119 M 10 M 16.4 K 614 Lbs 22 22#23Forward Air.. CORPORATION • • Highlights Premium intermodal drayage for forwarders, airlines and steamship lines Branded as CST (Central States Trucking) Growing Midwest, Southeast and Southwest footprint • Service partnerships with 20 of the top • 100 importers Offer dedicated contract and CFS warehouse services Intermodal Revenue Intermodal CST Growth Areas • M&A pipeline provides clear line of sight • to revenue growth and footprint expansion Greenfield startups where right M&A candidate is not available 2018 $ 201 M Operating Income $ 23 M EBITDA $ 30 M 305 K Drayage Shipments Drayage Revenue Per Shipment $ 567 23#24Forward Air.. CORPORATION Truckload Premium Services Highlights • Premium services (expedited, time- • • • definite, high value, etc.) for premium rates Dedicated owner-operator capacity drives competitive advantage Flexible capacity from qualified third party transportation providers Beneficial synergies through cross- utilization with Expedited LTL fleet Growth Areas • • Expedited linehaul for LTL carriers, airlines, Operating Income forwarders, etc. Refrigerated and temperature-controlled logistics solutions for pharmaceutical and life-science companies • Customized solutions for retail companies 51 Forward Air TRUCKLOAD SERVICES Aceping Your Business Moving Forward" Truckload Premium Services Revenue 2018 $ 193 M $5 M $ 12 M 78.9 M 5,130 315 EBITDA Total Miles Qualified 3rd Party Carriers Tractors (avg) Miles Per Tractor Per Week 2.2 K 24#25Forward Air.. CORPORATION Highlights . • High-frequency handling and distribution of time-sensitive products to multiple destinations for multiple consignees ("pooled" final-mile solution) Branded as Forward Air Solutions Pool Distribution Forvand • Mid-Atlantic, Midwest, Southeast and Southwest footprint • Leverages core competencies of Expedited LTL business Growth Areas Pool Distribution Revenue Operating Income • Expansion into vendor pickup and EBITDA Applications in new verticals, such as consolidation within current retail vertical Cartons Revenue Per Carton healthcare, hospitality and parts distribution Forward Air SOLUTIONS Keeping four Business Moving Forward" 2018 $ 194 M $ 6 M $ 13 M 93 M $ 2.09 25 25#26$ millions Forward Air.. CORPORATION Addressable Market 2018 Business Unit Revenue TAM TAM Comments Expedited LTL 748 3,500 $1,500 traditional airport-to-airport + $2,000 3PL Truckload Premium Services 193 3,000 Intermodal 201 7,000 $1,500 expedited + $1,500 medical+refrigerated Midwest + SE region Pool Distribution 194 4,000 $1,500 retail + $2,500 other verticals Intercompany Eliminations (15) Total 1,321 17,500 7.5% of estimated total addressable market Source: Studies performed by Tompkins International and SJ Consulting ➤ Currently serve approximately 7.5% of total addressable market (TAM) ➤ Significant opportunity for future growth 26#27Բ Forward Air. CORPORATION Reconciliations GAAP vs Non-GAAP Reconciliation ($ in millions, shares in 000s) Segment EBITDA Reconciliation GAAP Revenue Reconciliation 2018 GAAP Revenue 2017 2016 1,320.9 1,169.3 1,030.2 2015 2014 2013 2012 2011 2010 987.9 824.7 672.2 603.9 557.4 494.0 Towne Integration 0.6 Expedited LTL 2018 Adjusted Revenue GAAP Financials 1,320.9 1,169.3 1,030.2 987.3 824.7 672.2 603.9 557.4 494.0 GAAP Operating Income 96.4 (+) Depreciation & Amortization 22.5 2018 2017 2016 2015 2014 2013 2012 2011 2010 = EBITDA 118.9 Operating Income 122.0 108.8 59.7 81.7 96.3 84.4 83.5 77.1 53.7 Operating Margin 9.2% 9.3% 5.8% 8.3% 11.7% 12.6% 13.8% 13.8% 10.9% Truckload Premium Services 2018 Net Interest & Other Expense (1.8) (1.2) (1.6) (2.1) (0.3) (0.4) (0.3) (0.5) (0.6) Income Taxes 28.2 20.3 30.6 24.1 34.9 29.5 30.5 29.4 21.1 Net Income (Loss) 92.1 87.3 27.5 55.5 61.1 54.5 52.7 47.2 32.0 GAAP Operating Income (+) Depreciation & Amortization 5.1 6.4 Fully Diluted Share Count 29,190 29,964 30,444 31,040 31,072 30,762 29,536 29,435 29,111 = EBITDA 11.5 Income Allocated to Participating Securities (0.9) (0.7) (0.2) (0.4) (0.4) 0.0 0.0 0.0 0.0 Fully Diluted EPS 3.12 2.89 0.90 1.78 1.95 1.77 1.78 1.60 1.10 Intermodal 2018 GAAP Operating Income 23.3 Non GAAP Adjustments 2018 2017 2016 2015 2014 2013 2012 2011 2010 (+) Depreciation & Amortization 6.3 Towne Integration (24.3) = EBITDA 29.6 TQI Impairment (42.4) Operating Income (42.4) (24.3) Net Interest & Other Expense (0.4) Pool Distribution 2018 Income Taxes (6.4) (15.7) GAAP Operating Income 5.9 Net Income (Loss) (36.0) (9.0) (+) Depreciation & Amortization 6.9 Fully Diluted Share Count 29,190 29,964 30,444 31,040 31,072 30,762 29,536 29,435 29,111 = EBITDA 12.8 Fully Diluted EPS (1.18) (0.29) Non GAAP Financials 2018 2017 2016 2015 2014 2013 2012 2011 2010 Adjusted Operating Income 122.0 108.8 102.1 106.1 96.3 84.4 83.5 77.1 53.7 Adjusted Operating Margin 9.2% 9.3% 9.9% 10.7% 11.7% 12.6% 13.8% 13.8% 10.9% Net Interest & Other Expense (1.8) (1.2) (1.6) (1.7) (0.3) (0.4) (0.3) (0.5) (0.6) Adjusted Income Taxes 28.2 20.3 37.0 39.8 34.9 29.5 30.5 29.4 21.1 Adjusted Net Income (Loss) 92.1 87.3 63.5 64.5 61.1 54.5 52.7 47.2 32.0 Fully Diluted Share Count 29,190 29,964 30,444 31,040 31,072 30,762 29,536 29,435 29,111 Income Allocated to Participating Securities (0.9) (0.7) (0.2) (0.4) (0.4) 0.0 0.0 0.0 0.0 Adjusted EPS 3.12 2.89 2.08 2.07 1.95 1.77 1.78 1.60 1.10 Adjusted Operating Income 122.0 108.8 102.1 106.1 96.3 84.4 83.5 77.1 53.7 Depreciation & Amortization (Reported) 42.2 41.1 38.2 37.2 31.1 23.6 21.0 21.0 20.5 Adjusted EBITDA 164.2 149.9 140.4 143.3 127.4 108.0 104.5 98.1 74.2 Adjusted EBITDA Margin 12.4% 12.8% 13.6% 14.5% 15.5% 16.1% 17.3% 17.6% 15.0% 27#28Forward Air. CORPORATION Forward Air Forward Air 30016 Bangor Business Moving Forward" 53 419593 Thank You For Your Time Investor Relations Contact: Mike Morris, CFO & Treasurer [email protected] (404) 362-8933