What changed in this filing

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Item 1. Financial Statements

2022-04-29 compared with 2021-10-29 · 105 added, 201 removed, 384 unchanged (44% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets:

47 unchanged sentences

(unaudited, in thousands except per share data)

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

2021 2020 2021 2020

Three Months Ended March 31,

Transportation $ 6,528,351 $ 4,560,227

8 unchanged sentences

Income from operations 345,474 223,329

Interest and other expense ( 16,662 ) ( 7,465 ) ( 41,419 ) ( 32,904 )

Interest and other income/expense, net ( 14,174 ) ( 11,260 )

Income before provision for income taxes 331,300 212,069

1 unchanged sentence

Net income 270,348 173,305

Other comprehensive (loss) income, net of tax ( 12,034 ) 13,236 ( 19,482 ) 5,294

Other comprehensive income (loss), net of tax 6,870 ( 7,286 )

Comprehensive income $ 277,218 $ 166,019

20 unchanged sentences

Stock issued for employee benefit plans 418 42 ( 17,377 ) 26,239 8,904

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

Stock-based compensation expense — — 24,606 — 24,606

1 unchanged sentence

Balance March 31, 2022 128,011 $ 12,801 $ 680,857 $ 5,134,667 $ ( 54,264 ) $ ( 3,678,559 ) $ 2,095,502

Net income 193,789 193,789

Foreign currency adjustments ( 162 ) ( 162 )

Dividends declared, $ 0.51 per share

( 69,094 ) ( 69,094 )

Stock issued for employee benefit plans 250 25 418 16,151 16,594

Stock-based compensation expense — — 29,161 — 29,161

Repurchase of common stock ( 1,358 ) ( 136 ) ( 132,169 ) ( 132,305 )

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 Income (Loss) Treasury

Earnings Accumulated Other Comprehensive Loss Treasury

Stockholders’

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Balance March 31, 2021 133,243 $ 13,324 $ 568,209 $ 4,476,532 $ ( 53,284 ) $ ( 3,136,594 ) $ 1,868,187

Net income 143,939 143,939

Foreign currency adjustments 24,253 24,253

Dividends declared, $ 0.51 per share

( 69,791 ) ( 69,791 )

Stock issued for employee benefit plans 138 13 ( 1,165 ) 9,007 7,855

Stock-based compensation expense — — 10,954 — 10,954

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)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

Net income $ 270,348 $ 173,305

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Adjustments to reconcile net income to net cash used for operating activities:

Depreciation and amortization 22,486 23,278

14 unchanged sentences

Other assets and liabilities ( 1,334 ) 1,099

Net cash provided by operating activities 19,100 337,049

Net cash used for operating activities ( 13,928 ) ( 56,692 )

INVESTING ACTIVITIES

1 unchanged sentence

Purchases and development of software ( 16,183 ) ( 8,071 )

Acquisitions, net of cash acquired ( 14,749 ) ( 223,230 )

Other investing activities 2,250 —

5 unchanged sentences

Cash dividends ( 72,855 ) ( 70,030 )

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

Proceeds from long-term borrowings 200,000 —

Proceeds from short-term borrowings 1,062,000 816,000

Payments on short-term borrowings ( 1,015,000 ) ( 566,000 )

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

Net cash provided by financing activities 21,770 46,763

Effect of exchange rates on cash and cash equivalents 1,533 ( 2,750 )

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RECENTLY ISSUED ACCOUNTING STANDARDS

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional practical expedients to simplify accounting for reference rate reform.

Amongst other practical expedients, the update allows for contract modifications due to reference rate reform for certain receivables and debt contracts to be accounted for by prospectively adjusting the effective interest rate.

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 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.

For the three months ended March 31, 2022, there were no recently issued or newly adopted accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Balance, December 31, 2021 $ 1,196,333 $ 210,391 $ 78,030 $ 1,484,754

Acquisitions 243 — 10,754 10,997

Foreign currency translation 3,323 634 ( 95 ) 3,862

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

Balance March 31, 2022 $ 1,199,656 $ 211,025 $ 77,935 $ 1,488,616

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.

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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 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.

As part of our Step Zero Analysis, we determined that more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of March 31, 2022.

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Cost Accumulated Amortization Net Cost Accumulated Amortization Net

1 unchanged sentence

Customer relationships $ 171,902 $ ( 96,491 ) $ 75,411 $ 169,308 $ ( 88,302 ) $ 81,006

Trademarks — — — 1,875 ( 937 ) 938

Total finite-lived intangibles 169,540 ( 82,115 ) 87,425 173,559 ( 68,249 ) 105,310

Indefinite-lived intangibles

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

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

2021 2020 2021 2020

Three Months Ended March 31,

Amortization expense $ 6,034 $ 7,086

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

Finite-lived intangible assets, by reportable segment, as of March 31, 2022, will be amortized over their remaining lives as follows (in thousands):

NAST Global Forwarding All Other and Corporate Total

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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 September 30, 2021 and December 31, 2020.

We had no Level 3 assets or liabilities as of and during the periods ended March 31, 2022 and December 31, 2021.

There were no transfers between levels during the period.

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Average interest rate as of Carrying value as of

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

March 31, 2022 December 31, 2021 Maturity March 31, 2022 December 31, 2021

Revolving credit facility 1.34 % 1.23 % October 2023 $ 572,000 $ 525,000

2 unchanged sentences

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

Receivables securitization facility (1)

0.82 % 0.73 % November 2023 499,369 299,481

Senior Notes (1)

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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

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

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

The fair value of the Notes approximated $ 503.5 million on March 31, 2022.

We estimate the fair value of the Notes 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 own risk.

If the Notes were recorded at fair value, they would be classified as Level 2.

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.

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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.

COMBINEX CREDIT FACILITY

On June 3, 2021, we assumed a credit facility as part of our acquisition of Combinex Holding B.V.

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

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 .

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 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”).

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

trade accounts receivable with a total availability of $ 500 million as of March 31, 2022.

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 March 31, 2022.

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 9, 2018, we issued senior unsecured notes ("Senior Notes") through a public offering.

1 unchanged sentence

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 $ 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.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 618.8 million as of March 31, 2022, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 594.4 million as of March 31, 2022.

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.

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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 September 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.

These are considered Level 2 financial liabilities.

TRADE ACCOUNTS RECEIVABLE SECURITIZATION

We had a receivables securitization facility (the “Receivables Securitization Facility”) that expired on December 17, 2020 and was not renewed.

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

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

The trade accounts receivable under the facility were owned by C.H.

Robinson Receivables LLC and were not available to the creditors of C.H.

Robinson Worldwide, Inc., and our subsidiaries.

The interest rate on borrowings under the Receivables Securitization Facility was based on one-month LIBOR plus 0.65 percent.

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

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

In addition to the above financing agreements, we have a $ 15 million discretionary line of credit with US Bank of which $ 7.9 million is currently utilized for standby letters of credit related to insurance collateral as of March 31, 2022.

These standby letters of credit are renewed annually and were undrawn as of March 31, 2022.

A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate for the three months ended March 31, 2022 and 2021, is as follows:

Three Months Ended March 31,

Federal statutory rate 21.0 % 21.0 %

1 unchanged sentence

Share based payment awards ( 1.3 ) ( 3.2 )

tax credits and incentives ( 1.9 ) ( 1.1 )

Foreign tax credits ( 0.8 ) 0.4

3 unchanged sentences

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 September 30, 2021.

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic.

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

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

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

The CARES Act also provided for a tax credit related to wages and health benefits provided to an employee whose work from March 17, 2020 through June 30, 2021 was impacted by COVID-19.

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

The CARES Act allowed for a deferral of the employer share of federal payroll taxes.

We have recognized a payroll deferral of $ 14.7 million under the CARES Act due on December 31, 2022.

As of March 31, 2022, we have $ 43.3 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.

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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 September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Stock options $ 3,219 $ 3,967

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

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.

Approximately 415,630 shares were available for stock awards under the plan as of March 31, 2022.

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.

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

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

As of March 31, 2022, unrecognized compensation expense related to stock options was $ 23.3 million.

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

Stock Awards - We have awarded performance-based restricted shares through 2020.

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

Performance-based awards are subject to certain vesting requirements based on our earnings and adjusted gross profit growth.

Time-based awards vest primarily based on 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.

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.

Differences in post-holding restrictions, measured stock price volatility and interest rates are the primary reasons for changes in the discount.

Stock Awards - We have awarded performance-based restricted shares, performance-based restricted stock units (“PSUs”), and time-based restricted stock units.

Nearly 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 any post-vesting holding restrictions.

The discounts on outstanding grants with post-vesting holding restrictions varies from 12 percent to 24 percent and are calculated using the Black-Scholes option pricing model-protective put method.

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.

We granted 280,255 performance-based restricted stock units and 619,689 time-based restricted stock units on February 3, 2021.

The performance-based and time-based awards had a weighted average grant date fair value of $ 74.76 and $ 71.28 , respectively, and are eligible to vest over a three-year period with a first vesting date of December 31, 2021.

The performance-based awards vest based on our earnings and adjusted gross profit growth and include an upside opportunity of 200 percent upon attaining established earnings and adjusted gross profit growth targets.

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.

Beginning in 2021, we have awarded annually PSUs to certain key employees.

These PSUs 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 PSUs contain an upside opportunity of 200 percent contingent upon obtaining certain earnings per share and adjusted gross profit targets.

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 period.

Beginning in 2021, we have granted annually time-based awards that vest over a three-year period.

These awards vest primarily based on the passage of time and the employee’s continued employment.

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

We granted 330,072 PSUs and 634,118 time-based restricted stock units on February 9, 2022.

The performance-based and time-based awards had a weighted average grant date fair value of $ 76.74 and $ 74.67 , respectively.

Time-based awards are eligible to vest over a three-year period with a first vesting date of December 31, 2022.

We have also issued restricted stock units to certain key employees and non-employee directors, which are fully vested upon issuance.

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

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

As of March 31, 2022, there was unrecognized compensation expense of $ 168.0 million related to previously granted stock awards assuming maximum achievement is obtained on our performance-based 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.

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

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

Shares purchased

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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 preliminary.

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

On March 2, 2020, we acquired all of the outstanding shares of Prime Distribution Services (“Prime Distribution”), a leading provider of retail consolidation services in North America, for $ 222.7 million in cash.

This acquisition adds scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services.

The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the acquisition of Prime Distribution.

Current assets $ 8,879

Property and equipment 7,356

Right-of-use lease assets 35,017

Other intangible assets 55,000

Goodwill 176,727

Total assets 282,979

Current liabilities 12,243

Lease liabilities 35,017

Deferred tax liabilities 13,001

Net assets acquired $ 222,718

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

Estimated Life (years)

Customer relationships 7 $ 55,000

There was $ 176.7 million of goodwill recorded related to the acquisition of Prime Distribution.

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 complete.

The goodwill will not be deductible for tax purposes.

The acquisition was effective as of February 29, 2020, and therefore the results of operations of Prime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since March 1, 2020.

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.

SEGMENT REPORTING

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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 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 September 30, 2021

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

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

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

Total assets (1)

3,437,461 2,438,106 727,039 6,602,606

Average headcount 6,764 5,167 4,037 15,968

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended September 30, 2020

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

Income (loss) from operations 122,526 46,299 ( 586 ) 168,239

Depreciation and amortization 7,095 9,385 10,436 26,916

Total assets (1)

3,041,974 1,148,118 884,746 5,074,838

Average headcount 6,702 4,607 3,595 14,904

Reportable segment information as of, and for the three months ended March 31, 2022 and 2021, is as follows (dollars in thousands):

NAST Global Forwarding All Other and Corporate Consolidated

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

Total revenues $ 4,114,889 $ 2,194,397 $ 506,667 $ 6,815,953

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NAST Global Forwarding All Other and Corporate Consolidated

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Total revenues $ 3,211,423 $ 1,156,039 $ 436,407 $ 4,803,869

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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 nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended September 30, 2021

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 3,814,988 $ 1,978,901 $ 206,012 $ 5,999,901

— — 263,794 263,794

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

Three Months Ended September 30, 2020

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 2,923,842 $ 831,957 $ 189,182 $ 3,944,981

— — 279,819 279,819

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

Nine Months Ended September 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 months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31, 2022

NAST Global Forwarding All Other and Corporate Total

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Total $ 4,114,889 $ 2,194,397 $ 506,667 $ 6,815,953

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

NAST Global Forwarding All Other and Corporate Total

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(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 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.

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 March 31, 2022, and revenue recognized in the three months ended March 31, 2022 and 2021 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.

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Accordingly, these agreements are not considered leases.

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.

Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities.

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 at 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 at commencement date as the total lease liability plus prepaid rents and less any deferred rent liability that existed under ASC 840, Leases, upon transition.

As most of our leases 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.

The incremental borrowing rate is influenced by our credit rating and lease term and as such may differ for individual leases.

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 and parking charges.

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.

The incremental borrowing rate is influenced by market interest rates, our credit rating, and lease term and as such, may differ for individual leases.

Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants.

2 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 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,

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of March 31, 2022.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of March 31, 2022, and for the three months ended March 31, 2022 (dollars in thousands):

Three Months Ended March 31,

Lease Costs 2022 2021

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Total lease expense $ 24,105 $ 23,163

Nine Months Ended September 30,

Three Months Ended March 31,

Other Lease Information 2022 2021

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 23,646 15,253

Lease Term and Discount Rate As of September 30, 2021

Lease Term and Discount Rate As of March 31, 2022

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

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

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

The maturities of lease liabilities as of March 31, 2022, were as follows (in thousands):

Maturity of Lease Liabilities Operating Leases

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Present value of lease liabilities $ 312,809

In addition to minimum lease payments, we are typically responsible under our lease agreements to pay our pro rata share of maintenance expenses, common charges, and real estate taxes of the buildings in which we lease space.

Under ASC 842, we have elected to account for non-lease components such as common area maintenance and parking as a single lease component.

ALLOWANCE FOR CREDIT LOSSES

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.

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

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the three months ended March 31, 2022:

Balance, December 31, 2021 $ 41,542

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Write-offs ( 254 )

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.

Balance, March 31, 2022 $ 42,465

Recoveries of amounts previously written off were not significant for the three months ended March 31, 2022.

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 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.

The recorded balance on March 31, 2022 and December 31, 2021, was $ 54.3 million and $ 61.1 million, respectively.

The recorded balance on March 31, 2022 and December 31, 2021 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive income was $ 6.9 million compared to other comprehensive loss of $ 7.3 million for the three months ended March 31, 2022 and 2021, respectively.

Other comprehensive income and loss consisted of foreign currency adjustments, including foreign currency translation, for the three months ended March 31, 2022 and 2021.

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

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