What changed in this filing

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Item 1. Financial Statements

2022-11-04 compared with 2022-07-29 · 89 added, 71 removed, 484 unchanged (25% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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,

2022 2021 2022 2021

13 unchanged sentences

Net income 225,798 247,053 844,331 614,147

Other comprehensive loss, net of tax ( 33,596 ) ( 162 ) ( 26,726 ) ( 7,448 )

Other comprehensive loss ( 49,790 ) ( 12,034 ) ( 76,516 ) ( 19,482 )

Comprehensive income $ 176,008 $ 235,019 $ 767,815 $ 594,665

31 unchanged sentences

Balance June 30, 2022 125,116 12,512 709,163 5,411,346 ( 87,860 ) ( 3,992,746 ) 2,052,415

Net income 225,798 225,798

Foreign currency adjustments ( 49,790 ) ( 49,790 )

Dividends declared, $ 0.55 per share

( 69,552 ) ( 69,552 )

Stock issued for employee benefit plans 555 56 ( 3,478 ) 40,450 37,028

Stock-based compensation expense — — 25,811 — 25,811

Repurchase of common stock ( 5,077 ) ( 509 ) ( 543,640 ) ( 544,149 )

Balance September 30, 2022 120,594 $ 12,059 $ 731,496 $ 5,567,592 $ ( 137,650 ) $ ( 4,495,936 ) $ 1,677,561

Outstanding Amount Additional

20 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

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

22 unchanged sentences

Acquisitions, net of cash acquired — ( 14,749 )

Other investing activities 63,208 —

Proceeds from sale of property and equipment 63,208 —

Net cash used for investing activities ( 37,446 ) ( 67,314 )

5 unchanged sentences

Proceeds from long-term borrowings 200,000 —

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

Proceeds from short-term borrowings 3,674,000 2,768,000

Payments on short-term borrowings ( 3,595,000 ) ( 2,136,251 )

Net cash used for financing activities ( 257,177 ) ( 118,107 )

Net cash (used for) provided by financing activities ( 894,018 ) 9,911

Effect of exchange rates on cash and cash equivalents ( 15,206 ) ( 2,844 )

11 unchanged sentences

All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Our reportable segments are NAST and Global Forwarding with all other segments included in All Other and Corporate.

Our reportable segments are North American Surface Transportation (“NAST”) and Global Forwarding, with all other segments included in All Other and Corporate.

The All Other and Corporate reportable segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses.

6 unchanged sentences

PROPERTY AND EQUIPMENT

During the second quarter, we sold an office building in Kansas City, Missouri, that had been previously classified as held-for-sale assets, for a sales price of $ 55 million and recognized a gain of $ 23.5 million on the sale of the building in the three months ended June 30, 2022.

During the second quarter of 2022, we sold an office building in Kansas City, Missouri, which had been previously classified as held-for-sale assets, for a sales price of $ 55 million and recognized a gain of $ 23.5 million on the sale of the building in the nine months ended September 30, 2022.

We simultaneously entered into an agreement to lease the office building for 10 years.

RECENTLY ISSUED ACCOUNTING STANDARDS

For the three months ended June 30, 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.

For the nine months ended September 30, 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

5 unchanged sentences

Foreign currency translation ( 15,180 ) ( 7,839 ) ( 3,432 ) ( 26,451 )

Balance, June 30, 2022 $ 1,189,014 $ 207,484 $ 76,357 $ 1,472,855

Balance, September 30, 2022 $ 1,181,153 $ 202,552 $ 74,598 $ 1,458,303

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”).

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 June 30, 2022.

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 September 30, 2022.

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cost Accumulated Amortization Net Cost Accumulated Amortization Net

5 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,

2022 2021 2022 2021

Amortization expense $ 5,782 $ 6,130 $ 17,773 $ 19,416

Finite-lived intangible assets, by reportable segment, as of June 30, 2022, will be amortized over their remaining lives as follows (in thousands):

Finite-lived intangible assets, by reportable segment, as of September 30, 2022, 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, 2022 and December 31, 2021.

We had no Level 3 assets or liabilities as of and during the periods ended September 30, 2022 and December 31, 2021.

There were no transfers between levels during the period.

2 unchanged sentences

Average interest rate as of Carrying value as of

June 30, 2022 December 31, 2021 Maturity June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021 Maturity September 30, 2022 December 31, 2021

Revolving credit facility 4.27 % 1.23 % October 2023 $ 104,000 $ 525,000

33 unchanged sentences

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

The fair value of the Notes approximated $ 477.9 million on June 30, 2022.

The fair value of the Notes approximated $ 459.5 million on September 30, 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.

Series A matures in August 2023 and is classified as current portion of debt in our Condensed Consolidated Balance Sheets as of September 30, 2022.

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 20 percent.

3 unchanged sentences

The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed by C.H.

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

Robinson Company, LLC, a Delaware limited liability company 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.

5 unchanged sentences

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 June 30, 2022.

trade accounts receivable with a total availability of $ 500 million as of September 30, 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 June 30, 2022.

The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties and is recorded as a noncurrent liability as of September 30, 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.

7 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 $ 577.0 million as of June 30, 2022, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 594.6 million as of June 30, 2022.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 558.5 million as of September 30, 2022, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 594.8 million as of September 30, 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.

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.

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 or enter into sale and leaseback transactions above certain limits;

5 unchanged sentences

In 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 June 30, 2022.

These standby letters of credit are renewed annually and were undrawn as of June 30, 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 and six months ended June 30, 2022 and 2021, is as follows:

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

Bank of which $ 7.9 million is currently utilized for standby letters of credit related to insurance collateral as of September 30, 2022.

These standby letters of credit are renewed annually and were undrawn as of September 30, 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 and nine months ended September 30, 2022 and 2021, is as follows:

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

2022 2021 2022 2021

8 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 June 30, 2022.

On March 27, 2020, the U.S.

1 unchanged sentence

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 June 30, 2022, we have $ 41.0 million of unrecognized tax benefits and related interest and penalties.

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

As of September 30, 2022, we have $ 41.6 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,

2022 2021 2022 2021

6 unchanged sentences

The Plan allows us to grant certain stock awards, including stock options at fair market value, performance-based restricted stock units and shares, and time-based restricted stock units, to our key employees and non-employee directors.

Approximately 4,424,631 shares were available for stock awards under the Plan as of June 30, 2022.

There were 4,432,184 shares available for stock awards under the Plan as of September 30, 2022.

Shares subject to awards under the Plan or certain of our prior plans that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the Plan.

3 unchanged sentences

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

As of June 30, 2022, unrecognized compensation expense related to stock options was $ 20.0 million.

As of September 30, 2022, unrecognized compensation expense related to stock options was $ 16.7 million.

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

6 unchanged sentences

Performance-based Awards

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

We have awarded performance-based restricted shares through 2020 to certain key employees.

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

3 unchanged sentences

Time-based Awards

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

We award time-based restricted stock units to certain key employees.

Time-based awards granted through 2020 vest over a five-year period.

9 unchanged sentences

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

As of June 30, 2022, there was unrecognized compensation expense of $ 144.3 million related to previously granted stock awards assuming maximum achievement is obtained on our performance-based awards.

As of September 30, 2022, there was unrecognized compensation expense of $ 122.7 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.

3 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Shares purchased

5 unchanged sentences

For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our condensed consolidated financial position, results of operations, or cash flows.

Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible losses.

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.

25 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, 2022 and 2021, is as follows (dollars in thousands):

R eportable segment information as of, and for the three and nine months ended September 30, 2022 and 2021, is as follows (dollars in thousands):

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Total revenues $ 4,002,461 $ 1,511,115 $ 501,800 $ 6,015,376

Income from operations 276,499 167,557 25,609 469,665

Income (loss) from operations 211,899 85,953 ( 10,243 ) 287,609

Depreciation and amortization 5,739 5,368 11,868 22,975

1 unchanged sentence

3,624,333 2,266,923 904,274 6,795,530

Average headcount 7,552 5,759 4,582 17,893

Average employee headcount 7,493 5,861 4,691 18,045

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

1 unchanged sentence

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

Average headcount 6,580 4,909 3,916 15,405

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

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Total revenues $ 12,264,396 $ 5,798,702 $ 1,566,706 $ 19,629,804

3 unchanged sentences

3,624,333 2,266,923 904,274 6,795,530

Average headcount 7,442 5,690 4,422 17,554

Average employee headcount 7,420 5,735 4,497 17,652

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

3 unchanged sentences

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

Average headcount 6,578 4,832 3,823 15,233

Average employee headcount 6,650 4,951 3,881 15,482

_________________________________________

1 unchanged sentence

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, 2022 and 2021 (in thousands):

Three Months Ended June 30, 2022

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, 2022 and 2021 (in thousands):

Three Months Ended September 30, 2022

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 4,002,461 $ 1,511,115 $ 501,800 $ 6,015,376

Three Months Ended June 30, 2021

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 12,264,396 $ 5,798,702 $ 1,566,706 $ 19,629,804

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

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, 2022, and revenue recognized in the three and six months ended June 30, 2022 and 2021 resulting from contract liabilities, were not significant.

We typically do not receive consideration and amounts are not due from our customers prior to the completion of our performance obligation and as such contract liabilities, as of September 30, 2022, and revenue recognized in the three and nine months ended September 30, 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 and the timing of customer invoicing.

16 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, 2022.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of June 30, 2022, and for the three and six months ended June 30, 2022 and 2021, is as follows (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, 2022.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of September 30, 2022, and for the three and nine months ended September 30, 2022 and 2021, is as follows (dollars in thousands):

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

Lease Costs 2022 2021 2022 2021

2 unchanged sentences

Total lease expense $ 25,085 $ 24,091 $ 73,409 $ 70,175

Six Months Ended June 30,

Nine Months Ended September 30,

Other Lease Information 2022 2021

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 122,869 38,028

Lease Term and Discount Rate As of June 30, 2022

Lease Term and Discount Rate As of September 30, 2022

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

3 unchanged sentences

Excluding this lease, the weighted average remaining lease term of our agreements is 5.3 years.

The maturities of lease liabilities as of June 30, 2022, were as follows (in thousands):

The maturities of lease liabilities as of September 30, 2022, were as follows (in thousands):

Maturity of Lease Liabilities Operating Leases

8 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, 2022 (in thousands):

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the nine months ended September 30, 2022 (in thousands):

Balance, December 31, 2021 $ 41,542

1 unchanged sentence

Write-offs ( 6,174 )

Balance, June 30, 2022 $ 37,518

Recoveries of amounts previously written off were not significant for the three and six months ended June 30, 2022.

Balance, September 30, 2022 $ 33,480

Recoveries of amounts previously written off were not significant for the three and nine months ended September 30, 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 on June 30, 2022 and December 31, 2021, was $ 87.9 million and $ 61.1 million, respectively.

The recorded balance on June 30, 2022 and December 31, 2021 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 33.6 million compared to other comprehensive loss of $ 0.2 million for the three months ended June 30, 2022 and 2021, respectively.

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

Other comprehensive loss was $ 26.7 million compared to other comprehensive loss of $ 7.4 million for the six months ended June 30, 2022 and 2021, respectively.

Other comprehensive income and loss consisted of foreign currency adjustments, including foreign currency translation, for the three and six months ended June 30, 2022 and 2021.

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

The recorded balance on September 30, 2022 and December 31, 2021, was $ 137.7 million and $ 61.1 million, respectively.

The recorded balance on September 30, 2022 and December 31, 2021 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 49.8 million for the three months ended September 30, 2022 primarily driven by fluctuations in the Euro, Singapore Dollar, Yuan, and Australian Dollar.

Other comprehensive loss was $ 12.0 million for the three months ended September 30, 2021 primarily driven by fluctuations in the Singapore Dollar and Australian Dollar.

Other comprehensive loss was $ 76.5 million for the nine months ended September 30, 2022 primarily driven by fluctuations in the Singapore Dollar, Euro, Yuan, and Australian Dollar.

Other comprehensive loss was $ 19.5 million for the nine months ended September 30, 2021 primarily driven by fluctuations in the Singapore Dollar and Australian 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