What changed in this filing

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Item 1. Financial Statements

2023-04-28 compared with 2022-11-04 · 117 added, 179 removed, 394 unchanged (43% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Current assets:

47 unchanged sentences

(unaudited, in thousands except per share data)

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

2022 2021 2022 2021

Three Months Ended March 31,

Transportation $ 4,327,965 $ 6,528,351

12 unchanged sentences

Net income 114,891 270,348

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

Other comprehensive income 2,477 6,870

Comprehensive income $ 117,368 $ 277,218

23 unchanged sentences

Balance March 31, 2023 116,437 $ 11,644 $ 730,363 $ 5,631,750 $ ( 86,383 ) $ ( 4,905,986 ) $ 1,381,388

Net income 348,185 348,185

Foreign currency adjustments ( 33,596 ) ( 33,596 )

Dividends declared, $ 0.55 per share

( 71,506 ) ( 71,506 )

Stock issued for employee benefit plans 316 31 377 20,478 20,886

Stock-based compensation expense — — 27,929 — 27,929

Repurchase of common stock ( 3,211 ) ( 320 ) ( 334,665 ) ( 334,985 )

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

Capital Retained

Earnings Accumulated Other Comprehensive Loss Treasury

Earnings Accumulated

Comprehensive

Loss Treasury

Stockholders’

5 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

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

17 unchanged sentences

Other assets and liabilities 1,115 ( 1,334 )

Net cash provided by operating activities 876,789 19,100

Net cash provided by (used for) operating activities 254,544 ( 13,928 )

INVESTING ACTIVITIES

1 unchanged sentence

Purchases and development of software ( 15,579 ) ( 16,183 )

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

Proceeds from sale of property and equipment — 2,250

6 unchanged sentences

Proceeds from long-term borrowings — 200,000

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

Proceeds from short-term borrowings 739,000 1,062,000

9 unchanged sentences

BASIS OF PRESENTATION

Robinson Worldwide, Inc., and our subsidiaries (“the company,” “we,” “us,” or “our”) are a global provider of transportation services and logistics solutions operating through a network of offices located in North America, Europe, Asia, Oceania, and South America.

Robinson Worldwide, Inc.

and our subsidiaries (“the company,” “we,” “us,” or “our”) are a global provider of transportation services and logistics solutions operating through a network of offices located in North America, Europe, Asia, Oceania, South America, and the Middle East.

The consolidated financial statements include the accounts of C.H.

Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries.

Robinson Worldwide, Inc.

and our majority owned and controlled subsidiaries.

Our minority interests in subsidiaries are not significant.

8 unchanged sentences

You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2022.

PROPERTY AND EQUIPMENT

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 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.

For the three months ended March 31, 2023, 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 ( 865 ) 408 330 ( 127 )

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

Balance, March 31, 2023 $ 1,187,211 $ 206,597 $ 76,878 $ 1,470,686

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 September 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 March 31, 2023.

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Amortization expense $ 5,815 $ 6,034

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

Finite-lived intangible assets, by reportable segment, as of March 31, 2023, will be amortized over their remaining lives as follows (in thousands):

NAST Global Forwarding All Other and Corporate Total

Remaining 2022 $ 2,021 $ 3,326 $ 243 $ 5,590

Remainder of 2023 $ 6,063 $ 7,986 $ 823 $ 14,872

2024 8,008 3,539 1,097 12,644

10 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 September 30, 2022 and December 31, 2021.

We had no Level 3 assets or liabilities as of and during the periods ended March 31, 2023 and December 31, 2022.

There were no transfers between levels during the period.

2 unchanged sentences

Average interest rate as of Carrying value as of

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

March 31, 2023 December 31, 2022 Maturity March 31, 2023 December 31, 2022

Revolving credit facility 5.97 % — % November 2027 $ 4,000 $ —

364-day revolving credit facility 5.62 % 5.12 % May 2023 274,000 379,000

12 unchanged sentences

SENIOR UNSECURED REVOLVING CREDIT FACILITY

We have a senior unsecured revolving credit facility (the “Credit Agreement”) with a total availability of $ 1 billion and a maturity date of October 24, 2023.

Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of applicable LIBOR plus 1.13 percent).

In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility ranging from 0.075 percent to 0.200 percent.

We have a senior unsecured revolving credit facility (the “Credit Agreement”) with a total availability of $ 1 billion and a maturity date of November 19, 2027.

As of March 31, 2023, the variable rate equaled SOFR and a Credit Spread Adjustment of 0.10 percent plus 1.0 percent.

In addition, there is a commitment fee on the average daily undrawn stated amount under the facility ranging from 0.07 percent to 0.15 percent.

The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt;

therefore, we consider these borrowings to be a Level 2 financial liability.

The Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.75 to 1.00.

The Credit Agreement also contains customary events of default.

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.

364-DAY UNSECURED REVOLVING CREDIT FACILITY

4 unchanged sentences

In addition, there is a commitment fee on the aggregate unused commitments under the 364-day Credit Agreement ranging from 0.05 percent to 0.175 percent per annum.

The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt.

The recorded amount of borrowings outstanding approximates fair value because of the short maturity period of the debt.

The 364-day Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including an initial maximum leverage ratio of 3.00 to 1.00.

4 unchanged sentences

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

The fair value of the Notes approximated $ 459.5 million on September 30, 2022.

The fair value of the Notes approximated $ 476.5 million on March 31, 2023.

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.

Series A matures in August 2023 and is classified as current portion of debt in our Condensed Consolidated Balance Sheets as of March 31, 2023.

The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.50 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 10 percent.

3 unchanged sentences

The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed 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, 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.

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

On November 21, 2022, we executed a third amendment to the Note Purchase Agreement to among other things, facilitate the terms of the Credit Agreement.

TRADE ACCOUNTS RECEIVABLE SECURITIZATION

3 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 September 30, 2022.

trade accounts receivable with a total availability of $ 500 million as of March 31, 2023.

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 September 30, 2022.

The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties.

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.

Borrowings on the Receivables Securitization Facility are included within proceeds on current 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.

4 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 $ 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.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 578.0 million as of March 31, 2023, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 595.3 million as of March 31, 2023.

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.

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.

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 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 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

Bank of which $ 9.9 million is currently utilized for standby letters of credit related to insurance collateral as of March 31, 2023.

These standby letters of credit are renewed annually and were undrawn as of March 31, 2023.

A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate is as follows:

Three Months Ended March 31,

Federal statutory rate 21.0 % 21.0 %

6 unchanged sentences

Effective income tax rate 13.5 % 18.4 %

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, 2022.

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.

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.

In the quarter ended March 31, 2023, management made the determination that it is no longer indefinitely reinvested with regard to the unremitted earnings of any foreign subsidiaries although it remains indefinitely reinvested related to other taxable differences that may exist with regard to these subsidiaries.

The change results in a one-time increase to tax expense of approximately $ 2.0 million.

As of March 31, 2023, we have $ 42.0 million of unrecognized tax benefits and related interest and penalties.

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

3 unchanged sentences

income tax returns before 2015.

We are currently under an Internal Revenue Service audit for 2015, 2016 and 2017 tax years.

We are currently under a limited Internal Revenue Service audit for the 2015 to 2017 tax years, while the 2018 U.S.

Federal statute of limitations is closed.

STOCK AWARD PLANS

1 unchanged sentence

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,

2022 2021 2022 2021

Three Months Ended March 31,

Stock options $ 2,218 $ 3,219

3 unchanged sentences

On May 5, 2022, our shareholders approved a 2022 Equity Incentive Plan (the “Plan”) and authorized an initial 4,261,884 shares for issuance of awards thereunder.

Upon approval of the Plan, no new awards may be made under our 2013 Equity Incentive Plan.

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.

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.

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

There were 3,227,872 shares available for stock awards under the Plan as of March 31, 2023.

Stock Options - We have awarded stock options to certain key employees that vest primarily based on their continued employment.

The fair value of these options was established based on the market price on the date of grant calculated using the Black-Scholes option pricing model.

1 unchanged sentence

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

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.

As of March 31, 2023, unrecognized compensation expense related to stock options was $ 11.2 million.

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

2 unchanged sentences

The discounts on outstanding grants with post-vesting holding restrictions vary from 11 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 discounts.

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

1 unchanged sentence

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.

These awards vest over a five-year period based on the company’s dilutive earnings per share 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 up to 200 percent of target contingent upon obtaining certain earnings per share and adjusted gross profit growth targets.

These PSUs vest over a three-year period based achieving certain dilutive earnings per share, adjusted gross profits, and adjusted operating margin targets.

These PSUs contain an upside opportunity of up to 200 percent of target contingent upon obtaining certain targets mentioned above over their respective performance period.

Time-based Awards

3 unchanged sentences

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 PSUs and time-based restricted stock unit 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.

We granted 272,455 PSUs at target and 688,341 time-based restricted stock units in February 2023.

The PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of $ 92.15 and $ 92.74 , respectively, and vest over a three-year period as described above.

We have also awarded restricted stock units to certain key employees and non-employee directors, which are fully vested upon date of grant.

These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time.

The fair value of these units is established using the same method discussed above.

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

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.

These awards have been expensed on the date of grant.

As of March 31, 2023, there was unrecognized compensation expense of $ 226.3 million related to previously granted stock awards assuming maximum achievement is obtained on our PSUs.

The amount of future expense to be recognized will be based

on the passage of time, and contingent upon obtaining certain dilutive earnings per share, adjusted gross profits, and adjusted operating margin targets, and certain other conditions.

Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan (“ESPP”) allows our employees to contribute up to $ 10,000 of their annual cash compensation to purchase company stock.

2 unchanged sentences

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

Three Months Ended September 30, 2022

Three Months Ended March 31, 2023

Shares purchased

7 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.

Combinex Holding B.V.

On June 3, 2021, we acquired all of the outstanding shares of 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.

SEGMENT REPORTING

3 unchanged sentences

The primary services provided by NAST include truckload and less than truckload (“LTL”) transportation services.

• Global Forwarding— Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Oceania, and South America and also contracts with independent agents worldwide.

• Global Forwarding— Global Forwarding provides global logistics services through an international network of offices in North America, Europe, Asia, Oceania, South America, and the Middle East and also contracts with independent agents worldwide.

The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

2 unchanged sentences

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

Other Surface Transportation revenues are primarily earned by Europe Surface Transportation.

Other Surface Transportation revenues are primarily earned by our Europe Surface Transportation segment.

Europe Surface Transportation provides transportation and logistics services including truckload and groupage services across Europe.

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

The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies located in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

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.

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 September 30, 2022

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

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

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

Total assets (1)

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

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

Reportable segment information is as follows (dollars in thousands):

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended September 30, 2021

Three Months Ended March 31, 2023

Total revenues $ 3,304,187 $ 789,978 $ 517,505 $ 4,611,670

5 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Nine Months Ended September 30, 2022

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

Income from operations 670,752 421,148 10,848 1,102,748

Depreciation and amortization 18,101 16,394 34,228 68,723

Total assets (1)

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

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

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

7 unchanged sentences

REVENUE FROM CONTRACTS WITH CUSTOMERS

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and nine months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended September 30, 2022

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 4,002,461 $ 1,511,115 $ 210,788 $ 5,724,364

— — 291,012 291,012

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

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

Nine Months Ended September 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 (in thousands):

Three Months Ended March 31, 2023

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total $ 3,304,187 $ 789,978 $ 517,505 $ 4,611,670

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

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 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.

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 March 31, 2023, and revenue recognized in the three months ended March 31, 2023 and 2022 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.

8 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 the commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance and parking charges.

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.

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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, 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,

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, 2023.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of March 31, 2023 and December 31, 2022, and for the three months ended March 31, 2023 and 2022, is as follows (dollars in thousands):

Three Months Ended March 31,

Lease Costs 2023 2022

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Total lease expense $ 26,067 $ 24,105

Nine Months Ended September 30,

Three Months Ended March 31,

Other Lease Information 2023 2022

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 6,739 23,646

Lease Term and Discount Rate As of September 30, 2022

Lease Term and Discount Rate As of March 31, 2023 As of December 31, 2022

Weighted average remaining lease term (in years) 6.3 6.4

Weighted average discount rate 3.5 % 3.5 %

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(1) The weighted average remaining lease term is significantly impacted by a 15 -year lease related to office space in Chicago, IL, which commenced in 2018.

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

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

The maturities of lease liabilities as of March 31, 2023, were as follows (in thousands):

Maturity of Lease Liabilities Operating Leases

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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, our customers' credit ratings, in addition to other customer-specific factors.

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 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, 2022 (in thousands):

The allowance for credit losses on contract assets was not significant as of March 31, 2023.

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below (in thousands):

Balance, December 31, 2022 $ 28,749

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Write-offs ( 3,782 )

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.

Balance, March 31, 2023 $ 18,567

Recoveries of amounts previously written off were not significant for the three months ended March 31, 2023.

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 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.

The recorded balance on March 31, 2023 and December 31, 2022, was $ 86.4 million and $ 88.9 million, respectively.

The recorded balance on March 31, 2023 and December 31, 2022 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive income was $ 2.5 million for the three months ended March 31, 2023, primarily driven by fluctuations in the Euro.

Other comprehensive income was $ 6.9 million for the three months ended March 31, 2022, primarily driven by fluctuations in the Australian Dollar and Singapore Dollar.

RESTRUCTURING

In 2022, we announced organizational changes to support our enterprise strategy of accelerating our digital transformation and productivity initiatives.

We continued to execute upon these digital transformation and productivity initiatives in 2023, which resulted in further restructuring charges to better align our workforce as a result of these initiatives and in consideration of the changing freight transportation market.

We recognized additional restructuring charges of $ 3.7 million in the first quarter of 2023 primarily related to workforce reductions.

We expect to complete our restructuring actions by the end of 2023.

For severance and other operating expenses related to restructuring activities, we paid $ 15.2 million in cash in the first quarter of 2023 with the majority of the remaining $ 7.5 million accrued as of March 31, 2023 expected to be paid by the end of 2023.

A summary of the restructuring charges recognized is presented below (in thousands):

Three Months Ended March 31,

Severance (1)

Other personnel expenses (1)

Other selling, general, and administrative expenses (2)

Total $ 3,722

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(1) Amounts are included within personnel expenses in our consolidated statements of operations.

(2) Amounts are included within other selling, general, and administrative expenses in our consolidated statements of operations.

The following table summarizes restructuring charges by reportable segment for the three months ended March 31, 2023 (dollars in thousands):

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ 829 $ 1,538 $ 1,231 $ 3,598

Other selling, general, and administrative expenses — 124 — 124

The following table summarizes activity related to our restructuring initiatives and reserves included in our consolidated balance sheets as of December 31, 2022 and March 31, 2023:

Accrued Severance and Other Personnel Expenses Accrued Other Selling, General, and Administrative Expenses Total

Balance, December 31, 2022 $ 18,976 $ — $ 18,976

Restructuring charges 3,598 124 3,722

Cash payments ( 15,178 ) — ( 15,178 )

Accrual adjustments (1)

Balance, March 31, 2023 $ 7,401 $ 124 $ 7,525

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(1) Accrual adjustments primarily relate to changes in estimates for certain employee termination costs, including those settling for an amount different than originally estimated and foreign currency adjustments.

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