What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-30 · 86 added, 65 removed, 499 unchanged (23% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Current assets:

47 unchanged sentences

(unaudited, in thousands except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

48 unchanged sentences

Balance June 30, 2021 132,135 $ 13,213 $ 597,788 $ 4,601,227 $ ( 53,446 ) $ ( 3,252,612 ) $ 1,906,170

Net income 247,053 247,053

Foreign currency adjustments ( 12,034 ) ( 12,034 )

Dividends declared, $ 0.51 per share

( 68,316 ) ( 68,316 )

Stock issued for employee benefit plans 91 9 ( 1,418 ) 5,755 4,346

Stock-based compensation expense — — 40,812 — 40,812

Repurchase of common stock ( 1,850 ) ( 184 ) ( 167,047 ) ( 167,231 )

Balance September 30, 2021 130,376 $ 13,038 $ 637,182 $ 4,779,964 $ ( 65,480 ) $ ( 3,413,904 ) $ 1,950,800

ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Stockholders’ Investment, continued

(unaudited, in thousands, except per share data)

Outstanding Amount Additional

Capital Retained

Earnings Accumulated Other Comprehensive Loss Treasury

Earnings Accumulated Other Comprehensive Income (Loss) Treasury

Stockholders’

16 unchanged sentences

Balance June 30, 2020 134,724 $ 13,472 $ 543,608 $ 4,227,257 $ ( 84,091 ) $ ( 2,995,918 ) $ 1,704,328

Net income 136,529 136,529

Foreign currency adjustments 13,236 13,236

Dividends declared, $ 0.51 per share

( 70,188 ) ( 70,188 )

Stock issued for employee benefit plans 1,176 118 1,032 77,528 78,678

Stock-based compensation expense — — 10,776 — 10,776

Balance September 30, 2020 135,900 $ 13,590 $ 555,416 $ 4,293,598 $ ( 70,855 ) $ ( 2,918,390 ) $ 1,873,359

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES

29 unchanged sentences

Cash dividends ( 208,926 ) ( 207,428 )

Payments on long-term borrowings ( 2,048 ) —

Proceeds from short-term borrowings 2,768,000 1,043,600

Payments on short-term borrowings ( 2,136,251 ) ( 1,126,600 )

Net cash used for financing activities ( 118,107 ) ( 343,338 )

Net cash provided by (used for) financing activities 9,911 ( 274,984 )

Effect of exchange rates on cash and cash equivalents ( 2,844 ) 612

24 unchanged sentences

The amendments in this ASU are effective for all entities beginning on March 12, 2020, and companies may elect to apply the amendments prospectively through December 31, 2022.

As of June 30, 2021, we have not utilized any of the expedients discussed within this ASU.

As of September 30, 2021, we have not utilized any of the expedients discussed within this ASU.

We will continue to assess our agreements to determine if LIBOR is included and if the expedients will be utilized during the allowed period through December 31, 2022.

7 unchanged sentences

Foreign currency translation ( 7,894 ) ( 2,668 ) ( 1,423 ) ( 11,985 )

Balance June 30, 2021 $ 1,201,267 $ 213,222 $ 79,222 $ 1,493,711

Balance September 30, 2021 $ 1,196,321 $ 211,314 $ 78,564 $ 1,486,199

Goodwill is tested at least annually for impairment on November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

1 unchanged sentence

If the Step Zero Analysis indicates it is more likely than not that the fair value of our reporting units is less than their respective carrying value, an additional impairment assessment is performed (“Step One Analysis”).

We considered whether there were any changes in circumstances indicating that our goodwill might be impaired, including consideration of the impacts of the novel coronavirus

(“COVID-19”) on financial markets and our business operations, and determined the more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of June 30, 2021.

We considered whether there were any changes in circumstances indicating that our goodwill might be impaired, including consideration of the ongoing impacts of the COVID-19

pandemic on financial markets and our business operations, and determined the more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of September 30, 2021.

Identifiable intangible assets consisted of the following (in thousands):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Cost Accumulated Amortization Net Cost Accumulated Amortization Net

7 unchanged sentences

Amortization expense for other intangible assets is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Amortization expense $ 6,130 $ 9,937 $ 19,416 $ 27,968

Finite-lived intangible assets, by reportable segment, as of June 30, 2021, will be amortized over their remaining lives as follows (in thousands):

Finite-lived intangible assets, by reportable segment, as of September 30, 2021, will be amortized over their remaining lives as follows (in thousands):

NAST Global Forwarding All Other and Corporate Total

12 unchanged sentences

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.

We had no Level 3 assets or liabilities as of and during the periods ended June 30, 2021 and December 31, 2020.

We had no Level 3 assets or liabilities as of and during the periods ended September 30, 2021 and December 31, 2020.

There were no transfers between levels during the period.

2 unchanged sentences

Average interest rate as of Carrying value as of

June 30, 2021 December 31, 2020 Maturity June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020 Maturity September 30, 2021 December 31, 2020

Revolving credit facility 1.20 % — % October 2023 $ 632,000 $ —

2 unchanged sentences

Senior Notes, Series C 4.60 % 4.60 % August 2033 175,000 175,000

Combinex credit facility 2.14 % — % January 2027 2,280 —

Senior Notes (1)

18 unchanged sentences

Interest on the Notes is payable semi-annually in arrears.

The fair value of the Notes approximated $ 549.3 million at June 30, 2021.

The fair value of the Notes approximated $ 546.0 million at September 30, 2021.

The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.00 to 1.00, a minimum interest coverage ratio of 2.00 to 1.00, and a maximum consolidated priority debt to consolidated total asset ratio of 15 percent.

8 unchanged sentences

(“Combinex”) with total availability of approximately $ 3.6 million and a maturity date of January 18, 2027.

Borrowings under the Combinex credit facility bear interest at 2.14 percent.

We paid off the $ 2.2 million balance of this facility in September 2021.

For more information regarding the Combinex acquisition, refer to Note 8, Acquisitions .

2 unchanged sentences

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the Senior Notes have an effective yield to maturity of approximately 4.39 percent per annum.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 686.0 million as of June 30, 2021, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 593.7 million as of June 30, 2021.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 680.2 million as of September 30, 2021, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 594.0 million as of September 30, 2021.

We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes.

6 unchanged sentences

The indenture does not contain any financial ratios or specified levels of net worth or liquidity to which we must adhere.

In addition to the above financing agreements, we have a $ 15 million discretionary line of credit with US Bank of which $ 8 million is currently utilized for standby letters of credit related to insurance collateral as of June 30, 2021.

These standby letters of credit are renewed annually and were undrawn as of June 30, 2021.

These standby letters of credit are renewed annually and were undrawn as of September 30, 2021.

We estimate the fair value of our financing arrangements primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering our risk.

9 unchanged sentences

There was also a commitment fee we were required to pay on any unused portion of the facility.

Our effective tax rate for the three months ended June 30, 2021 and 2020 was 21.6 percent and 19.4 percent, respectively, and our effective tax rate for the six months ended June 30, 2021 and 2020 was 20.1 percent and 18.6 percent, respectively.

The effective income tax rate for the three months ended June 30, 2021 was higher than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit which increased our effective tax rate by 2.0 percentage points.

This impact on the tax rate was partially offset by foreign tax impacts.

The effective income tax rate for the six months ended June 30, 2021 was lower than the statutory federal income tax rate primarily due to share-based payment awards, which reduced the effective tax rate by 1.5 percentage points, the combined tax impact of Global Intangible Low-tax Income ("GILTI") and Foreign Derived Intangible Income ("FDII"), which reduced the effective tax rate by 0.6 percentage points, and foreign tax impacts, which reduced the effective tax rate by 0.5 percentage points.

These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective tax rate.

For the three and six months ended June 30, 2020, our effective tax rate was lower than the statutory federal income tax rate primarily due to the tax impact of share-based payment awards, including the tax benefit from the delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in 2000, which reduced the effective tax rate by 4.5 percentage points and 4.2 percentage points, respectively.

This impact was partially offset by state income tax expense, net of federal benefit, which increased the effective tax rate.

A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate for the three and nine months ended September 30, 2021and 2020, is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

State income taxes, net of federal benefit 0.6 2.0 1.5 2.4

Share based payment awards 0.4 ( 3.8 ) ( 0.8 ) ( 4.1 )

Foreign tax credits ( 0.1 ) ( 5.2 ) ( 0.3 ) ( 3.1 )

Foreign ( 4.2 ) 0.3 ( 1.5 ) 1.2

Other ( 1.7 ) 0.8 ( 1.4 ) ( 0.1 )

Effective income tax rate 16.0 % 15.1 % 18.5 % 17.3 %

We have asserted that the unremitted earnings of a limited number of our foreign subsidiaries are permanently reinvested to support expansion of our international business.

If we repatriated all foreign earnings that are considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $ 2.0 million as of June 30, 2021.

On March 27, 2020, the U.S.

5 unchanged sentences

The Consolidated Appropriations Act signed into law on December 27, 2020, extended the tax credit through June 30, 2021, and increased the maximum credit per employee from $5,000 per year in 2020 to $7,000 per quarter in 2021.

Through June 30, 2021, we have recognized a payroll deferral and tax credit of $ 28.5 million and $ 0.7 million, respectively, under the CARES Act and The Consolidated Appropriations Act.

Through September 30, 2021, we have recognized a payroll deferral and tax credit of $ 28.5 million and $ 0.7 million, respectively, under the CARES Act and The Consolidated Appropriations Act.

We will continue evaluating the impact of both acts over the remainder of 2021.

As of June 30, 2021, we have $ 43.0 million of unrecognized tax benefits and related interest and penalties.

As of September 30, 2021, we have $ 40.0 million of unrecognized tax benefits and related interest and penalties.

It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities.

7 unchanged sentences

A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

A maximum of 17,041,803 shares can be granted under this plan following the amendment and restatement.

Approximately 1,798,328 shares were available for stock awards under the plan as of June 30, 2021.

Shares subject to awards

that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan.

Approximately 1,765,322 shares were available for stock awards under the plan as of September 30, 2021.

Shares subject to

awards that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan.

Stock Options - We have awarded stock options to certain key employees through 2020.

2 unchanged sentences

These grants are being expensed based on the terms of the awards.

As of June 30, 2021, unrecognized compensation expense related to stock options was $ 34.8 million.

As of September 30, 2021, unrecognized compensation expense related to stock options was $ 30.6 million.

The amount of future expense to be recognized will be based on the passage of time and the employees' continued employment.

15 unchanged sentences

These grants have been expensed during the year they were earned.

As of June 30, 2021, there was unrecognized compensation expense of $ 131.9 million related to previously granted full value awards.

As of September 30, 2021, there was unrecognized compensation expense of $ 99.9 million related to previously granted full value awards.

The amount of future expense to be recognized will be based on the passage of time, the company’s earnings and adjusted gross profit growth, and certain other conditions.

3 unchanged sentences

The following is a summary of the employee stock purchase plan activity (dollars in thousands):

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Shares purchased

55 unchanged sentences

We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments.

Reportable segment information as of, and for the three and six months ended June 30, 2021 and 2020, is as follows (dollars in thousands):

Reportable segment information as of, and for the three and nine months ended September 30, 2021 and 2020, is as follows (dollars in thousands):

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Total revenues $ 3,814,988 $ 1,978,901 $ 469,806 $ 6,263,695

Income from operations 151,092 108,212 1,300 260,604

Income (loss) from operations 149,035 165,155 ( 3,421 ) 310,769

Depreciation and amortization 6,620 5,427 10,359 22,406

3 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Total revenues $ 2,923,842 $ 831,957 $ 469,001 $ 4,224,800

5 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Total revenues $ 10,611,892 $ 4,585,734 $ 1,402,664 $ 16,600,290

5 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Total revenues $ 8,222,879 $ 2,070,161 $ 1,364,614 $ 11,657,654

7 unchanged sentences

REVENUE FROM CONTRACTS WITH CUSTOMERS

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended June 30, 2021

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30, 2021

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 3,814,988 $ 1,978,901 $ 469,806 $ 6,263,695

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 2,923,842 $ 831,957 $ 469,001 $ 4,224,800

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 10,611,892 $ 4,585,734 $ 1,402,664 $ 16,600,290

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

NAST Global Forwarding All Other and Corporate Total

7 unchanged sentences

(2) Sourcing performance obligations are completed at a point in time.

We typically do not receive consideration and amounts are not due from our customer prior to the completion of our performance obligation and as such contract liabilities, as of June 30, 2021, and revenue recognized in the three and six months ended June 30, 2021 and 2020 resulting from contract liabilities, were not significant.

We typically do not receive consideration and amounts are not due from our customer prior to the completion of our performance obligation and as such contract liabilities, as of September 30, 2021, and revenue recognized in the three and nine months ended September 30, 2021 and 2020 resulting from contract liabilities, were not significant.

Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon shipments in-transit at period end.

6 unchanged sentences

Accordingly, these agreements are not considered leases.

In addition, we have made a policy election to not apply the guidance of ASC 842 to leases with a term of 12 months or less as allowed by the standard.

In addition, we have made a policy election to not apply the guidance of ASC 842, Leases , to leases with a term of 12 months or less as allowed by the standard.

These leases are recognized as expense on a straight-line basis over the lease term.

9 unchanged sentences

We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component.

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of June 30, 2021.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of June 30, 2021, and for the three and six months ended June 30, 2021 (dollars in thousands):

Three Months Ended June 30, Six Months Ended June 30,

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of September 30, 2021.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of September 30, 2021, and for the three and nine months ended September 30, 2021 (dollars in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

Lease Costs 2021 2020 2021 2020

2 unchanged sentences

Total lease expense $ 24,091 $ 25,999 $ 70,175 $ 74,080

Six Months Ended June 30,

Nine Months Ended September 30,

Other Lease Information 2021 2020

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 38,028 88,857

Lease Term and Discount Rate As of June 30, 2021

Lease Term and Discount Rate As of September 30, 2021

Weighted average remaining lease term (in years) (1)

3 unchanged sentences

Excluding this lease, the weighted average remaining lease term of our agreements is 4.4 years.

The maturities of lease liabilities as of June 30, 2021, were as follows (in thousands):

The maturities of lease liabilities as of September 30, 2021, were as follows (in thousands):

Maturity of Lease Liabilities Operating Leases

10 unchanged sentences

The allowance for credit losses on contract assets was not significant.

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the six months ended June 30, 2021:

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the nine months ended September 30, 2021:

Balance, December 31, 2020 $ 38,113

1 unchanged sentence

Write-offs ( 3,884 )

Balance, June 30, 2021 $ 35,430

Recoveries of amounts previously written off were not significant for the three and six months ended June 30, 2021.

Balance, September 30, 2021 $ 37,114

Recoveries of amounts previously written off were not significant for the three and nine months ended September 30, 2021.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss is included in Stockholders' investment on our condensed consolidated balance sheets.

The recorded balance at June 30, 2021 and December 31, 2020, was $ 53.4 million and $ 46.0 million, respectively.

Accumulated other comprehensive loss is comprised solely of foreign currency adjustments at June 30, 2021 and December 31, 2020.

Other comprehensive loss and income was $ 0.2 million and $ 24.3 million for the three months ended June 30, 2021 and 2020, respectively.

Other comprehensive loss was $ 7.4 million and $ 7.9 million for the six months ended June 30, 2021 and 2020, respectively.

Other comprehensive loss and income consisted of foreign currency adjustments, including foreign currency translation, for the three and six months ended June 30, 2021 and 2020.

The recorded balance at September 30, 2021 and December 31, 2020, was $ 65.5 million and $ 46.0 million, respectively.

Accumulated other comprehensive loss is comprised solely of foreign currency adjustments at September 30, 2021 and December 31, 2020.

Other comprehensive loss was $ 12.0 million compared to other comprehensive income of $ 13.2 million for the three months ended September 30, 2021 and 2020, respectively.

Other comprehensive loss was $ 19.5 million compared to other comprehensive income of $ 5.3 million for the nine months ended September 30, 2021 and 2020, respectively.

Other comprehensive loss and income consisted of foreign currency adjustments, including foreign currency translation, for the three and nine months ended September 30, 2021 and 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements