What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-02-19 · 146 added, 147 removed, 885 unchanged (25% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of C.H.

6 unchanged sentences

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021 , based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 11 to the financial statements, effective January 1, 2019, the Company adopted the FASB Accounting Standards Update 2016-02, Leases (Topic 842), using the modified retrospective approach.

Basis for Opinion

17 unchanged sentences

At December 31, 2021 the Company recorded revenue of $453.7 million for services it provided while a shipment was still in-transit but for which it had not yet completed its performance obligation or had not yet invoiced the customer.

Table of Content

Auditing the estimate of the Company’s revenue recorded for contracts where the transit period is partially complete or completed and not yet invoiced as of the reporting date required a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

T able of Contents

How the Critical Audit Matter Was Addressed in the Audit

10 unchanged sentences

We have served as the Company's auditor since 2002.

Table of Content

T able of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

6 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statements as of and for the fiscal year ended December 31, 2020, of the Company and our report dated February 19, 2021, expressed an unqualified opinion on those consolidated financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended December 31, 2021, of the Company and our report dated February 23, 2022, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

17 unchanged sentences

February 23, 2022

Table of Content

T able of Contents

ROBINSON WORLDWIDE, INC.

56 unchanged sentences

See accompanying notes to the consolidated financial statements.

Table of Content

T able of Contents

ROBINSON WORLDWIDE, INC.

19 unchanged sentences

Net income 844,245 506,421 576,968

Other comprehensive income (loss) 30,151 ( 4,214 ) ( 53,475 )

Other comprehensive (loss) income ( 15,136 ) 30,151 ( 4,214 )

Comprehensive income

11 unchanged sentences

See accompanying notes to the consolidated financial statements.

Table of Content

T able of Contents

ROBINSON WORLDWIDE, INC.

9 unchanged sentences

Net income 576,968 576,968

Cumulative Effect Change - ASU 2014-09 9,239 9,239

Foreign currency translation

Foreign currency adjustments

( 4,214 ) ( 4,214 )

8 unchanged sentences

Net income 506,421 506,421

Foreign currency translation ( 4,214 ) ( 4,214 )

Foreign currency adjustments

30,151 30,151

Dividends declared, $ 2.04 per share

6 unchanged sentences

Net income 844,245 844,245

Foreign currency translation 30,151 30,151

Foreign currency adjustments ( 15,136 ) ( 15,136 )

Dividends declared, $ 2.08 per share

1 unchanged sentence

Stock issued for employee benefit plans 1,068 107 ( 22,374 ) 66,216 43,949

Issuance of restricted stock 192 19 ( 19 ) —

Issuance of restricted stock, net of forfeitures ( 26 ) ( 3 ) 3 —

Stock-based compensation expense — — 129,977 — 129,977

2 unchanged sentences

See accompanying notes to the consolidated financial statements.

Table of Content

T able of Contents

ROBINSON WORLDWIDE, INC.

40 unchanged sentences

Payments on short-term borrowings ( 3,203,251 ) ( 1,579,600 ) ( 90,000 )

Net cash used for financing activities

Net cash provided by (used for) financing activities

7,573 ( 440,667 ) ( 651,253 )

11 unchanged sentences

See accompanying notes to the consolidated financial statements.

Table of Content

T able of Contents

ROBINSON WORLDWIDE, INC.

18 unchanged sentences

When the customers’ freight reaches its intended destination our performance obligation is complete.

Pricing for our services is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation.

Pricing for our services is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation, but can vary based on the nature of the service provided and certain other factors .

We also provide certain value-added logistics services, such as customs brokerage, fee-based managed services, warehousing services, small parcel, and supply chain consulting and optimization services.

2 unchanged sentences

Pricing for our services is established in the customer contract and is dependent upon the specific needs of the customer but may be agreed upon at a fixed fee per transaction, labor hour, or service period.

Payment is typically due within 30 days upon completion of our performance obligation.

Sourcing Services - We contract with grocery retailers, restaurants, foodservice distributors, and produce wholesalers to provide sourcing services under the trade name Robinson Fresh.

Payment is typically due within 30 days upon completion of our performance obligation, but can vary based on the nature of the service provided and certain other factors.

Sourcing Services - We contract with grocery retailers, restaurants, foodservice distributors, and produce wholesalers to provide sourcing services under the trade name Robinson Fresh ® (“Robinson Fresh”).

Our primary service obligation under these contracts is the buying, selling, and/or marketing of produce including fresh fruits, vegetables, and other value-added perishable items.

Revenue is recognized when our performance obligations under these contracts is satisfied at a point in time, generally when the produce is received by our customer.

Pricing under these contracts is generally a fixed amount and is typically due within 20 to 30 days upon completion of our performance obligation.

Pricing under these contracts is generally a fixed amount and is typically due within 20 to 30 days upon completion of our performance obligation, but can vary based on the nature of the service provided and certain other factors.

In many cases, as additional performance obligations, we contract to arrange logistics and transportation of the products we buy, sell, and/or market.

1 unchanged sentence

The contract period is typically less than one year .

Pricing for our services is generally a fixed amount and is typically due within 30 days upon completion of our performance obligation.

Total revenues represent the total dollar value of revenue recognized from contracts with customers for the goods and services we provide.

2 unchanged sentences

Most transactions in our transportation and sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods we sell.

In these transactions, we are primarily responsible for fulfilling the promise to provide the specified good or service to our customer and we have discretion in establishing the price for the specified good or service.

T able of Contents

these transactions, we are primarily responsible for fulfilling the promise to provide the specified good or service to our customer and we have discretion in establishing the price for the specified good or service.

Additionally, in our sourcing business, in some cases we take inventory risk before the specified good has been transferred to our customer.

Table of Content

brokerage, managed services, freight forwarding, and sourcing managed procurement transactions are recorded at the net amount we charge our customers for the service we provide because many of the factors stated above are not present.

Customs brokerage, managed services, freight forwarding, and sourcing managed procurement transactions are recorded at the net amount we charge our customers for the service we provide because many of the factors stated above are not present.

CONTRACT ASSETS.

30 unchanged sentences

Amortization of leasehold improvements is computed over the shorter of the lease term or the estimated useful lives of the improvements.

T able of Contents

We recognized the following depreciation expense (in thousands):

2021 $ 39,790

Table of Content

A summary of our property and equipment as of December 31, is as follows (in thousands):

1 unchanged sentence

Buildings (1)

60,059 93,538

Corporate aircraft (1)

4 unchanged sentences

Net property and equipment $ 139,831 $ 178,949

________________________________

(1) Our corporate aircraft and an office building in Kansas City, Missouri, have been reclassified as held-for-sale assets as of December 31, 2021.

Held-for-sale assets of $ 35.0 million are expected to sell in the first half of 2022 and are included within Prepaid expenses and other current assets in our Consolidated Balance Sheet as of December 31, 2021.

The estimated fair value of the assets that are held for sale is $ 64.0 million.

Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible assets and identifiable intangible assets purchased and liabilities assumed.

9 unchanged sentences

OTHER ASSETS.

Other assets consist primarily of purchased and internally developed software, and the investments related to our nonqualified deferred compensation plan.

Other assets consist primarily of purchased and internally developed software.

We amortize software using the straight-line method over three years .

6 unchanged sentences

Net software $ 70,112 $ 59,614

T able of Contents

INCOME TAXES.

6 unchanged sentences

Uncertain income tax positions are included in “Accrued income taxes” or “Noncurrent income taxes payable” in the consolidated balance sheets.

Table of Content

COMPREHENSIVE INCOME (LOSS).

Comprehensive income (loss) consists primarily of foreign currency translation adjustments.

It is presented on our consolidated statements of operations and comprehensive income net of related income tax effects.

It is presented on our consolidated statements of operations and comprehensive income.

STOCK-BASED COMPENSATION.

We issue stock awards, including stock options, performance shares, and restricted stock units, to key employees and outside directors.

In general, the awards vest over five years , either based on the company’s earnings growth or the passage of time.

In general, the awards vest over three to five years , either based on the company’s earnings or adjusted gross profit growth or the passage of time.

The related compensation expense for each award is recognized over the appropriate vesting period.

21 unchanged sentences

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”).

As part of our Step Zero Analysis, we considered the impacts of the novel coronavirus (“COVID-19”) pandemic on financial markets and our business operations and determined that the more likely than not criteria had not been met, and therefore a Step One Analysis was not required.

As part of our Step Zero Analysis, we determined that the more likely than not criteria had not been met, and therefore a Step One Analysis was not required.

T able of Contents

No goodwill or intangible asset impairment has been recorded in any previous or current period presented.

8 unchanged sentences

Total intangibles $ 177,908 $ ( 88,302 ) $ 89,606 $ 182,159 $ ( 68,249 ) $ 113,910

Table of Content

Amortization expense for other intangible assets was (in thousands):

17 unchanged sentences

There were no transfers between levels during the period.

Table of Content

T able of Contents

FINANCING ARRANGEMENTS

7 unchanged sentences

Receivables securitization facility (1)

— % 2.41 % December 2020 — 142,885

0.73 % — % November 2023 299,481 —

Senior Notes (1)

16 unchanged sentences

In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable.

On November 19, 2021, we amended the Credit Agreement to among other things, facilitate the terms of the Receivables Securitization Facility and include provisions for benchmark replacements to LIBOR.

NOTE PURCHASE AGREEMENT

11 unchanged sentences

Robinson Company, a Delaware corporation and a wholly-owned subsidiary of the company, and by C.H.

Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company.

Table of Content

T able of Contents

Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company.

On November 19, 2021, we amended the Note Purchase Agreement to among other things, facilitate the terms of the Receivables Securitization Facility.

TRADE ACCOUNTS RECEIVABLE SECURITIZATION

On April 26, 2017, we entered into a receivables purchase agreement and related transaction documents with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Wells Fargo Bank, N.A.

On November 19, 2021, we entered into a receivables purchase agreement and related transaction documents with Bank of America, N.A.

and Wells Fargo Bank, N.A.

to provide a receivables securitization facility (the “Receivables Securitization Facility”).

On December 17, 2018, we entered into an amendment on the Receivables Securitization Facility, which changed the lending parties to Wells Fargo Bank, N.A.

The Receivables Securitization Facility is based on the securitization of our U.S.

trade accounts receivable with a total availability of $ 300 million as of December 31, 2021.

The interest rate on borrowings under the Receivables Securitization Facility is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus a margin.

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

The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties and is recorded as a noncurrent liability as of December 31, 2021.

The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest rate floats.

We consider these borrowings to be a Level 2 financial liability.

Borrowings on the Receivables Securitization Facility are included within proceeds on long-term borrowings on the consolidated statement of cash flows.

The Receivables Securitization Facility contains various customary affirmative and negative covenants, and it also contains customary default and termination provisions, which provide for acceleration of amounts owed under the Receivables Securitization Facility upon the occurrence of certain specified events.

On February 1, 2022, we amended the Receivables Securitization Facility primarily to increase the total availability from $ 300 million to $ 500 million pursuant to the provisions of the existing agreement.

On April 26, 2017, we entered into a receivables purchase agreement and related transaction documents with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Wells Fargo Bank, N.A.

to provide a receivables securitization facility with funding of up to $ 250 million.

On December 17, 2018, we entered into an amendment on this facility, which changed the lending parties to Wells Fargo Bank, N.A.

and Bank of America, N.A.

and extended the maturity date from April 26, 2019, to December 17, 2020.

The Receivables Securitization Facility was based on the securitization of our U.S.

trade accounts receivable and provided funding of up to $ 250 million.

The interest rate on borrowings under the Receivables Securitization Facility were based on 30 day LIBOR plus a margin.

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

The Receivables Securitization Facility expired on December 17, 2020, and it was not renewed.

The facility expired on December 17, 2020, and it was not renewed;

however, we entered into a new receivables securitization facility in November 2021 as described above.

On April 9, 2018, we issued senior unsecured notes (“Senior Notes”) through a public offering.

The Senior Notes bear an annual interest rate of 4.20 percent payable semi-annually on April 15 and October 15, until maturity on April 15, 2028.

The proceeds from the Senior Notes were utilized to pay down the balance on our Credit Agreement.

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.

4 unchanged sentences

Upon the occurrence of a “change of control triggering event” as defined in the Senior Notes (generally, a change of control of us accompanied by a reduction in the credit rating for the Senior Notes), we will generally be required to make an offer to repurchase the Senior Notes from holders at 101 percent of their principal amount plus accrued and unpaid interest to the date of repurchase.

The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens, enter into sales and leaseback transactions above certain limits;

The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens;

enter into sales and leaseback transactions above certain limits;

and consolidate, merge, or transfer substantially all of our assets and those of our subsidiaries on a consolidated basis.

3 unchanged sentences

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

I n addition to the above financing agreements we have a $ 15 million discretionary line of credit with US Bank of which $ 8.0 million is currently utilized for standby letters of credit related to insurance collateral as of December 31, 2020.

T able of Contents

I n addition to the above financing agreements we have a $ 15 million discretionary line of credit with U.S.

Bank of which $ 7.9 million is currently utilized for standby letters of credit related to insurance collateral as of December 31, 2021.

These standby letters of credit are renewed annually and were undrawn as of December 31, 2021.

As of December 31, 2020, we were in compliance with all of the covenants under the Credit Agreement, Note Purchase Agreement, and Senior Notes.

Robinson Worldwide, Inc., and its 80 percent (or more) owned U.S.

7 unchanged sentences

If we repatriated all foreign earnings that are still considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $ 2.0 million as of December 31, 2021.

Table of Content

On March 27, 2020, the U.S.

1 unchanged sentence

The CARES Act allows for a deferral of the employer share of federal payroll taxes otherwise due through December 31, 2020.

Under the act, 50 percent of the deferred amount is due December 31, 2021, and the remaining 50 percent is due December 31, 2022.

Under the act, 50 percent of the deferred amount was due December 31, 2021, and the remaining 50 percent is due December 31, 2022.

This provision allows us to defer certain federal payroll deposits and invest this cash back into the business without any interest cost.

1 unchanged sentence

Through December 31, 2021, we have recognized a payroll deferral and tax credit of $ 14.7 million and $ 0.7 million, respectively, under the CARES Act.

On December 22, 2017, the U.S.

government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

The Tax Act made broad and complex changes to the U.S.

tax code, including but not limited to, reducing the U.S.

federal corporate tax rate from 35 percent to 21 percent and adding new rules for Global Intangible Low-tax Income (“GILTI”) and Foreign Derived Intangible Income (“FDII”).

We have included the tax impact of both GILTI and FDII in our income tax expense for the twelve months ended December 31, 2020 and 2019.

The Treasury Department issued final regulatory guidance related to both GILTI and FDII on July 15, 2020.

The effective date of these regulations is generally January 1, 2021, absent an election to apply these rules retroactively to a 2018 effective date.

We are reviewing these regulations and the potential to elect a 2018 effective date.

The impact of this new guidance is not expected to have a material impact on full-year 2020 results.

On September 29, 2020, the Treasury Department issued final and proposed regulations on determining the foreign tax credit, and allocating and apportioning deductions, under the Internal Revenue Code.

We are still completing our review of these regulations, but the impact of this new guidance is not expected to have a material impact on our results.

On December 27, 2020, the U.S.

government enacted the Consolidated Appropriations Act, 2021.

The bill extends several CARES Act provisions, including the employee retention tax credit.

It also contains miscellaneous tax provisions effective for tax years beginning after December 31, 2020.

The impact of this new guidance does not have a material impact on full-year 2020 results.

On December 28, 2021, the Treasury Department released final regulations on determining the foreign tax credit, and allocating and apportioning deductions, under the Internal Revenue Code.

The impact of this finalized guidance is not expected to have a material impact on our results.

Income before provision for income taxes consisted of (in thousands):

16 unchanged sentences

As of December 31, 2021, we had $ 42.9 million of unrecognized tax benefits and related interest and penalties, all of which would affect our effective tax rate if recognized.

In the unlikely event these unrecognized tax benefits and related interest and penalties were recognized fully in 2021, the impact to the annual effective tax rate would have been 4.2 percent.

We are not aware of any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantly increase or decrease in the next 12 months.

The total liability for unrecognized tax benefits is expected to decrease by approximately $ 5.9 million in the next 12 months due to lapsing of statutes.

Table of Content

T able of Contents

We recognize interest and penalties related to uncertain tax positions in the provision for income taxes.

During the years ended December 31, 2020, 2019, and 2018, we recognized approximately $ 1.0 million in interest and penalties.

During the years ended December 31, 2021, 2020, and 2019, we recognized approximately $ 0.9 million, $ 1.0 million, and $ 1.0 million in interest and penalties.

We had approximately $ 5.6 million and $ 6.1 million for the payment of interest and penalties related to uncertain tax positions accrued within noncurrent income taxes payable as of December 31, 2021 and 2020, respectively.

17 unchanged sentences

State income taxes, net of federal benefit 1.7 2.5 2.8

Tax Act impact — — 0.4

Share-based payment awards ( 0.6 ) ( 2.8 ) ( 0.9 )

Excess foreign tax credits ( 0.4 ) ( 2.2 ) ( 1.5 )

tax credits and incentives ( 3.3 ) ( 1.4 ) ( 0.9 )

Foreign ( 1.2 ) 1.3 1.7

1 unchanged sentence

Effective income tax rate 17.4 % 19.4 % 22.3 %

Table of Content

T able of Contents

Deferred tax assets (liabilities) are comprised of the following at December 31 (in thousands):

3 unchanged sentences

Accrued expenses 92,936 39,987

Receivables 7,810 5,086

Tax credit carryforward 10,464 —

Foreign affiliate prepayment 88,399 —

Other 22,925 26,848

7 unchanged sentences

Other ( 9,267 ) ( 7,142 )

Net deferred tax liabilities $ ( 3,542 ) $ ( 26,291 )

Net deferred tax assets (liabilities) $ 108,787 $ ( 3,542 )

We had foreign net operating loss carryforwards with a tax effect of $ 8.6 million as of December 31, 2021, and $ 11.0 million as of December 31, 2020.

17 unchanged sentences

All outstanding shares of common stock are fully paid and nonassessable.

Table of Content

T able of Contents

STOCK AWARD PLANS.

Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests.

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

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

2021 2020 2019

8 unchanged sentences

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 that vest primarily based on their continued employment.

7 unchanged sentences

Outstanding at December 31, 2020 7,260,840 $ 76.37 $ 127,065 6.6

Grants 1,661,196 72.74

Exercised ( 748,198 ) 71.95

6 unchanged sentences

Additional potential dilutive stock options totaling 3,924 for 2021 have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock).

T able of Contents

Information on the intrinsic value of options exercised is as follows (in thousands):

2021 $ 20,427

Table of Content

The following table summarizes these unvested stock option grants as of December 31, 2021:

3 unchanged sentences

Average Grant

Date Fair Value Unvested Options

December 31, 2017 December 31, 2021 1,236,538 $ 12.59 236,978

Date Fair Value (1)

Unvested Options

December 31, 2018 December 31, 2022 1,441,636 $ 14.25 276,353

2 unchanged sentences

4,234,446 $ 15.70 1,704,187

________________________________

(1) Amount shown is the weighted average grant date fair value of options granted, net of forfeitures.

Determining Fair Value

8 unchanged sentences

The fair value per option was estimated using the Black-Scholes option pricing model with the following assumptions:

2020 Grants 2019 Grants 2018 Grants

2020 Grants 2019 Grants

Weighted-average risk-free interest rate 1.6 % 2.1 %

4 unchanged sentences

STOCK AWARDS.

We have awarded performance-based and time-based restricted shares and restricted stock units to certain key employees and non-employee directors.

Performance-based awards are subject to certain vesting requirements over a five-year period, based on the company’s earnings growth.

Time-based awards vest primarily based on the passage of time and the employee's continued employment.

The awards also contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time.

We have awarded performance-based restricted shares, performance-based restricted stock units, and time-based restricted stock units.

All of our awards contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time.

The fair value of these awards is established based on the market price on the date of grant, discounted for post-vesting holding restrictions.

The discounts on outstanding grants vary from 12 percent to 24 percent and are calculated using the Black-Scholes option pricing model-protective put method.

Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount.

The duration of the restriction period to sell or transfer vested awards, changes in the measured stock price volatility and changes in interest rates are the primary reasons for changes in the discount.

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

Table of Content

Performance-based Awards

We have awarded performance-based restricted shares through 2020 to certain key employees and non-employee directors.

These awards vest over a five-year period based on the company’s earnings growth.

In 2021, we have awarded performance-based restricted stock units to certain key employees and non-employee directors.

These awards vest over a three-year period based on the company's cumulative three-year earnings per share growth and annual adjusted gross profit growth.

These performance-based restricted stock unit awards contain an upside opportunity of 200 percent contingent upon obtaining certain earnings per share and adjusted gross profit targets.

T able of Contents

The following table summarizes our unvested performance-based restricted shares and restricted stock unit grants as of December 31, 2021:

2 unchanged sentences

Unvested at December 31, 2020 1,102,211 $ 67.29

Granted 405,915 59.34

292,993 74.92

Performance-based grant adjustment (2)

Vested ( 980,188 ) 67.37

Forfeitures ( 36,521 ) 71.10

Unvested at December 31, 2021 407,642 $ 72.21

The following table summarizes performance based restricted shares and restricted stock units by vesting period:

________________________________

(1) Amount represents performance-based restricted stock unit grants at target.

(2) Amount represents incremental shares issuable for achieving 200 percent upside upon meeting certain adjusted gross profit targets in 2021.

The following table summarizes unvested performance-based restricted shares and restricted stock units by vesting period:

First Vesting Date Last Vesting Date Performance Shares and Stock Units

7 unchanged sentences

December 31, 2021 December 31, 2025 285,765 74.91 256,618

December 31, 2020 December 31, 2024 404,424 59.34 404,424

1,041,318 $ 68.53 407,642

1 unchanged sentence

(1) Amount shown is the weighted average grant date fair value of performance-based restricted shares and restricted stock units granted, net of forfeitures.

We granted an additional 280,255 performance-based restricted stock units on February 3, 2021.

These awards had a weighted average grant date fair value of $ 74.76 and will vest over a three-year period with a first vesting date of December 31, 2021.

We granted an additional 330,072 performance-based restricted stock units at target on February 9, 2022.

These awards have a weighted average grant date fair value of $ 76.74 and will vest over a three-year period based upon our cumulative three-year earnings per share growth and annual adjusted gross profit growth.

Time-based Awards

We award time-based restricted stock units to certain key employees and non-employee directors.

Time-based awards granted through 2020 vest over a five-year while time-based awards granted in 2021 vest over a three-year period primarily based on the passage of time and the employee's continued employment.

The following table summarizes our unvested time-based restricted share and restricted stock unit grants as of December 31, 2021:

8 unchanged sentences

We granted an additional 634,118 time-based restricted stock units on February 9, 2022.

These awards had a weighted average grant date fair value of $ 71.28 and will vest over a three-year period with a first vesting date of December 31, 2021.

These awards have a weighted average grant date fair value of $ 74.67 and will vest over a three-year period with a first vesting date of December 31, 2022.

T able of Contents

A summary of the fair value of stock awards vested (in thousands):

2 unchanged sentences

The amount of future expense to be recognized will be based on the company’s earnings growth and the continued employment of certain key employees.

Table of Content

EMPLOYEE STOCK PURCHASE PLAN.

11 unchanged sentences

SHARE REPURCHASE PROGRAMS.

During 2013, our Board of Directors authorized a share repurchase program that allows the Company to repurchase 15,000,000 shares.

That program was completed in September 2018.

In May 2018, the Board of Directors authorized a share repurchase program that allows the Company to repurchase 15,000,000 shares of our common stock.

On December 9, 2021, the Board of Directors increased the company’s share repurchase authorization by an additional 20,000,000 shares of common stock.

As of December 31, 2021, we have 21,635,388 shares remaining under the share repurchase authorization.

The activity under these authorizations is as follows (dollar amounts in thousands):

3 unchanged sentences

2021 Repurchases 6,154,364 580,818

As of December 31, 2020, there were 7,789,752 shares remaining for repurchase under the current authorization.

COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

2021 $ 48,714

We contributed a defined contribution match of six percent in 2019 and four percent in 2018.

We contributed a defined contribution match of six percent in 2021 and 2019.

Effective May 22, 2020, we temporarily suspended the employer-matching contribution due to the impacts of the COVID-19 pandemic.

The employer-matching contribution was reinstated effective January 1, 2021.

We made a discretionary profit-sharing contribution of two percent of total recognized compensation for eligible participants in 2018.

No discretionary profit-sharing contributions were made subsequent to the 2018 contribution.

LEASE COMMITMENTS.

1 unchanged sentence

See Note 11, Leases , for further information.

T able of Contents

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, including certain contingent auto liability cases as of December 31, 2021.

2 unchanged sentences

However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

Table of Content

Combinex Holding B.V.

On June 3, 2021, we acquired all of the outstanding shares of Combinex Holding B.V.

(“Combinex”) to strengthen our European road transportation presence.

Total purchase consideration, net of cash acquired was $ 14.7 million, which was paid in cash.

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):

Estimated Life (years)

Customer relationships 7 $ 3,942

There was $ 10.8 million of goodwill recorded related to the acquisition of Combinex.

The Combinex goodwill is a result of acquiring and retaining the Combinex workforce and expected synergies from integrating its business into ours.

Purchase accounting is considered complete.

The goodwill will not be deductible for tax purposes.

The results of operations of Combinex have been included as part of the All Other and Corporate segment in our consolidated financial statements since June 3, 2021.

Prime Distribution Services

12 unchanged sentences

Net assets acquired $ 222,718

T able of Contents

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):

3 unchanged sentences

The Prime Distribution goodwill is a result of acquiring and retaining the Prime Distribution workforce and expected synergies from integrating its business into ours.

Purchase accounting is considered substantially complete.

Purchase accounting is considered complete.

The goodwill will not be deductible for tax purposes.

15 unchanged sentences

Total purchase consideration, net of cash acquired, was $ 45.5 million, which was paid in cash.

Table of Content

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):

6 unchanged sentences

The results of operations of Space Cargo have been included as part of the Global Forwarding segment in our consolidated financial statements since March 1, 2019.

T able of Contents

SEGMENT REPORTING

Our reportable segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers.

Our segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers.

The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Chief Executive Officer.

The accounting policies of our reporting segments are the same as those described in the summary of significant accounting policies.

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.

The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies.

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

We identify two reportable segments as follows:

7 unchanged sentences

All Other and Corporate includes our Robinson Fresh and Managed Services segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses.

Robinson Fresh provides sourcing services including the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items.

Robinson Fresh provides sourcing services including the buying, selling, and/or marketing of fresh fruits, vegetables, and other perishable items.

Managed Services provides Transportation Management Services, or Managed TMS ® .

10 unchanged sentences

Average headcount 6,764 5,071 3,926 15,761

________________________________

(1) All cash and cash equivalents and certain owned properties are included in All Other and Corporate.

Table of Content

NAST Global Forwarding All Other and Corporate Consolidated

6 unchanged sentences

Average headcount 6,811 4,708 3,600 15,119

T able of Contents

NAST Global Forwarding All Other and Corporate Consolidated

16 unchanged sentences

As of December 31,

2021 2020 2019

Long-lived assets

2 unchanged sentences

Total long-lived assets $ 739,205 $ 715,371 $ 695,696

________________________________

(1) Includes $ 253.4 million and $ 66.4 million of right-of-use lease assets within the United States and other locations, respectively.

(2) Includes $ 216.4 million and $ 94.4 million of right-of-use lease assets within the United States and other locations, respectively.

Table of Content

T able of Contents

REVENUE FROM CONTRACTS WITH CUSTOMERS

32 unchanged sentences

The transaction price for our performance obligation under these arrangements is generally fixed and readily determinable upon contract inception and is not contingent upon the occurrence or non-occurrence of another event.

Approximately seven percent, six percent, and seven percent of our total revenues for the twelve months ended December 31, 2020, 2019, and 2018, respectively, are attributable to buying, selling, and/or marketing of produce including fresh fruits, vegetables, and other value-added perishable items.

Approximately five percent, seven percent, and six percent of our total revenues for the twelve months ended December 31, 2021, 2020, and 2019, respectively, are attributable to buying, selling, and/or marketing of produce including fresh fruits, vegetables, and other value-added perishable items.

Total revenues for these transactions are recognized at a point in time upon completion of our performance obligation, which is generally when the produce is received by our customer.

Table of Content

T able of Contents

Approximately two percent of our total revenues for the twelve months ended December 31, 2021, 2020, and 2019, respectively, are attributable to value-added logistics services, such as customs brokerage, fee-based managed services, warehousing services, small parcel, and supply chain consulting and optimization services.

5 unchanged sentences

Finally, for certain of our performance obligations such as fee-based managed services, supply chain consulting and optimization services, and warehousing services, we have recognized revenue in the amount for which we have the right to invoice our customer as we have determined this amount corresponds directly with the value provided to the customer for our performance completed to date.

We adopted ASU 2016-02, Leases (Topic 842), as of January 1, 2019.

Prior period information was not restated and continues to be presented under ASC 840, Leases .

We elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to not reassess existing contracts to determine if they contain a lease and to carry forward their historical lease classification upon transition.

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.

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

Adoption of the new standard resulted in the recording of right-of-use lease assets and lease liabilities of $ 265.4 million and $ 273.3 million, respectively, as of January 1, 2019.

The adoption of this standard did not materially impact our consolidated statements of operations or consolidated statements of cash flows.

We determine if our contractual agreements contain a lease at inception.

7 unchanged sentences

A right-of-use lease asset represents our right to use an underlying asset over the term of a lease, while a lease liability represents our obligation to make lease payments arising from the lease.

Current and noncurrent lease liabilities are recognized on commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance charges.

Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents and less any deferred rent liability that existed under ASC 840, Leases, upon transition.

Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents.

As our leases typically do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

4 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.

Table of Content

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of December 31, 2021 and 2020, and for the twelve months ended December 31, 2021 and 2020 (dollars in thousands):

9 unchanged sentences

52,931 95,005

T able of Contents

As of December 31,

13 unchanged sentences

ALLOWANCE FOR CREDIT LOSSES

We adopted ASU 2016-13, Financial Instruments (Topic 326), as of January 1, 2020.

Prior period information was not restated and continues to be presented under guidance effective for those periods.

This ASU changes how entities measure credit losses for certain financial assets including accounts receivable by replacing the historical “incurred loss” approach with an “expected loss” model.

We have updated our significant accounting policy for allowance for credit losses as described in Note 1, Summary of Significant Accounting Policies.

Our allowance for credit losses is computed using a number of factors including our past credit loss experience, the aging of amounts due from our customers, and our customers' credit ratings, in addition to other customer specific factors.

We have also assessed the current macroeconomic environment, including the impact of the COVID-19 pandemic, to determine our ending allowance for credit losses for both accounts receivable and contract assets.

Our allowance for credit losses is computed using a number of factors including our past credit loss experience, the aging of amounts due from our customers, our customers' credit ratings, in addition to other customer specific factors.

We have also considered recent trends and developments related to the current macroeconomic environment in determining our ending allowance for credit losses for both accounts receivable and contract assets.

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

Table of Content

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the twelve months ended December 31, 2021:

6 unchanged sentences

Accumulated other comprehensive loss is included in the Stockholders’ investment on our consolidated balance sheets.

The recorded balance at December 31, 2020 and 2019, was $ 46.0 million and $ 76.1 million, respectively, and is comprised solely of foreign currency adjustments, net of related income tax effects.

Other comprehensive income was $ 30.2 million for the twelve months ended December 31, 2020, driven primarily by fluctuations in the Australian Dollar and Singapore Dollar, net of related income tax effects of $ 2.5 million.

Other comprehensive loss was $ 4.2 million for the twelve months ended December 31, 2019, driven primarily by fluctuations in the Chinese Yuan.

The recorded balance at December 31, 2021 and 2020, was $ 61.1 million and $ 46.0 million, respectively, and is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 15.1 million for the twelve months ended December 31, 2021, and consisted of foreign currency adjustments, including foreign currency translation.

Other comprehensive income was $ 30.2 million for the twelve months ended December 31, 2020.

Both periods were driven primarily by fluctuations in the Australian Dollar and Singapore Dollar.

T able of Contents

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ADOPTED ACCOUNTING STANDARDS

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses .

This update changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The update replaces the historical “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost.

The update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash.

We adopted this standard on January 1, 2020.

We have updated our allowance for credit losses, formerly described as our allowance for doubtful accounts, significant accounting policy as a result of adopting the new standard.

For additional information, see Note 1, Summary of Significant Accounting Policies .

The impact of adoption was not material to our consolidated financial position, results of operations, or cash flows.

RECENTLY ISSUED ACCOUNTING STANDARDS

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

3 unchanged sentences

The Company is currently evaluating the effects that adoption of this guidance will have on our consolidated financial statements.

Table of Content

T able of Contents

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data