What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-03 compared with 2023-08-04 · 162 added, 76 removed, 490 unchanged (33% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

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,

2023 2022 2023 2022

47 unchanged sentences

Balance June 30, 2023 116,335 11,633 734,244 5,655,489 ( 92,919 ) ( 4,920,340 ) 1,388,107

Net income 81,949 81,949

Foreign currency adjustments ( 14,891 ) ( 14,891 )

Dividends declared, $ 0.61 per share

( 73,724 ) ( 73,724 )

Stock issued for employee benefit plans 130 14 ( 2,411 ) 9,873 7,476

Stock-based compensation expense — — 15,667 — 15,667

Balance September 30, 2023 116,465 $ 11,647 $ 747,500 $ 5,663,714 $ ( 107,810 ) $ ( 4,910,467 ) $ 1,404,584

Outstanding Amount Additional

21 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

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

6 unchanged sentences

Excess tax benefit on stock-based compensation ( 9,899 ) ( 12,440 )

Loss on disposal group held for sale 21,113 —

Other operating activities 3,740 ( 24,011 )

Changes in operating elements, net of acquisitions:

Changes in operating elements:

Receivables 525,761 66,536

23 unchanged sentences

Effect of exchange rates on cash and cash equivalents ( 6,708 ) ( 15,206 )

Net change in cash and cash equivalents ( 7,327 ) ( 18,488 )

Net change in cash and cash equivalents, including cash and cash equivalents classified within assets held for sale ( 40,263 ) ( 69,881 )

net increase in cash and cash equivalents within assets held for sale ( 2,486 ) —

Cash and cash equivalents, beginning of period 217,482 257,413

20 unchanged sentences

RECENTLY ISSUED ACCOUNTING STANDARDS

For the six months ended June 30, 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.

For the nine months ended September 30, 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 ( 4,416 ) ( 710 ) ( 368 ) ( 5,494 )

Balance, June 30, 2023 $ 1,186,223 $ 206,413 $ 76,771 $ 1,469,407

Balance, September 30, 2023 $ 1,183,660 $ 205,479 $ 76,180 $ 1,465,319

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, 2023.

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, 2023.

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

June 30, 2023 December 31, 2022

September 30, 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

Amortization expense $ 5,724 $ 5,782 $ 17,312 $ 17,773

Finite-lived intangible assets, by reportable segment, as of June 30, 2023, will be amortized over their remaining lives as follows (in thousands):

Finite-lived intangible assets, by reportable segment, as of September 30, 2023, 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, 2023 and December 31, 2022.

Assets and Liabilities Held for Sale - As a result of the planned divestiture of our Argentine operations classified as held for sale as of September 30, 2023, the Company measured the disposal group at its fair value less costs to sell and recorded an impairment charge of $ 21.1 million in the three and nine months ended September 30, 2023.

The fair value of these assets and liabilities held for sale is classified as a Level 3 measurement in the fair value hierarchy because it is determined using significant unobservable inputs such as management assumptions about anticipated proceeds from the sale of our Argentine operations to a third-party, which is anticipated to be complete by the end of 2023.

Refer to Note 13, Restructuring for additional detail on our restructuring program to divest of our operations in Argentina.

We had no other Level 3 assets or liabilities as of and during the periods ended September 30, 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

June 30, 2023 December 31, 2022 Maturity June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022 Maturity September 30, 2023 December 31, 2022

Revolving credit facility 6.42 % — % November 2027 $ 163,000 $ —

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

Senior Notes, Series A 3.97 % 3.97 % August 2023 175,000 175,000

364-day revolving credit facility N/A 5.12 % May 2023 — 379,000

Senior Notes, Series A N/A 3.97 % August 2023 — 175,000

Senior Notes, Series B 4.26 % 4.26 % August 2028 150,000 150,000

12 unchanged sentences

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 one-month SOFR plus a specified margin).

As of June 30, 2023, the variable rate equaled SOFR and a Credit Spread Adjustment of 0.10 percent plus 1.0 percent.

As of September 30, 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.

5 unchanged sentences

On May 6, 2022, we entered into an unsecured revolving credit facility (the “364-day Credit Agreement”) with a total availability of $ 500 million and a maturity date of May 5, 2023.

The interest rate on borrowings under the 364-day Credit Agreement was based an alternate base rate plus a margin or a term SOFR-based rate plus a margin.

The interest rate on borrowings under the 364-day Credit Agreement was based on an alternate base rate plus a margin or a term SOFR-based rate plus a margin.

There was also a commitment fee on the aggregate unused commitments under the facility.

4 unchanged sentences

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

The fair value of the Notes approximated $ 472.4 million on June 30, 2023.

The fair value of the Notes approximated $ 294.4 million on September 30, 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 June 30, 2023.

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

Senior Notes Series A matured in August 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.

10 unchanged sentences

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 June 30, 2023.

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

trade accounts receivable with a total availability of $ 500 million as of September 30, 2023.

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

10 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 $ 575.9 million as of June 30, 2023, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 595.5 million as of June 30, 2023.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 561.0 million as of September 30, 2023, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 595.7 million as of September 30, 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.

7 unchanged sentences

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

Bank of which $ 9.9 million is currently utilized for standby letters of credit related to insurance collateral as of June 30, 2023.

These standby letters of credit are renewed annually and were undrawn as of June 30, 2023.

Bank of which $ 9.9 million is currently utilized for standby letters of credit related to insurance collateral as of September 30, 2023.

These standby letters of credit are renewed annually and were undrawn as of September 30, 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

5 unchanged sentences

Foreign 8.4 2.8 2.1 0.3

Basis difference - South American restructuring program ( 5.9 ) — ( 1.6 ) —

Other 1.1 ( 1.7 ) 1.3 0.2

Effective income tax rate 11.7 % 16.9 % 13.5 % 19.2 %

During the first quarter of 2023, management made the determination that the company 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 resulted in a one-time increase to tax expense of approximately $ 2.0 million in the six months ended June 30, 2023.

As of June 30, 2023, we have $ 43.3 million of unrecognized tax benefits and related interest and penalties.

During the first quarter of 2023, management made the determination that the company is no longer indefinitely reinvested with regard to the unremitted earnings of any foreign subsidiaries.

The change resulted in a one-time increase to tax expense of approximately $ 2.0 million in the nine months ended September 30, 2023.

The company remains indefinitely reinvested related to other taxable differences that may exist with regard to these subsidiaries, with the exception of our Argentina operations held for sale.

During the third quarter of 2023, the company recognized a decrease to tax expense of approximately $ 5.5 million with regard to taxable differences related to our Argentina operations held for sale.

Refer to Note 13, Restructuring for additional detail on our restructuring program to divest of our operations in Argentina.

As of September 30, 2023, we have $ 44.7 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, new information, or settlements with taxing authorities.

3 unchanged sentences

income tax returns before 2015.

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.

We are currently under a limited Internal Revenue Service audit for the 2014 to 2017 tax years, while the 2018 and 2019 U.S.

federal statute of limitations are 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

6 unchanged sentences

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.

There were 3,283,750 shares available for stock awards under the Plan as of June 30, 2023.

There were 3,317,410 shares available for stock awards under the Plan as of September 30, 2023.

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

2 unchanged sentences

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

As of June 30, 2023, unrecognized compensation expense related to stock options was $ 8.9 million.

As of September 30, 2023, unrecognized compensation expense related to stock options was $ 6.6 million.

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

8 unchanged sentences

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

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 vest over a three-year period based on the achievement of 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.

10 unchanged sentences

These awards have been expensed on the date of grant.

As of June 30, 2023, there was unrecognized compensation expense of $ 242.7 million related to previously granted stock awards assuming maximum achievement is obtained on our PSUs.

As of September 30, 2023, there was unrecognized compensation expense of $ 227.6 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 targets mentioned above over their respective performance period.

3 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Shares purchased

18 unchanged sentences

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.

Europe Surface Transportation provides transportation and logistics services including truckload and LTL or 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.

3 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Total revenues $ 3,086,970 $ 719,045 $ 535,015 $ 4,341,030

5 unchanged sentences

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

3 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Total revenues $ 9,470,425 $ 2,288,890 $ 1,615,241 $ 13,374,556

5 unchanged sentences

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

8 unchanged sentences

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 June 30, 2023

Three Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Total

3 unchanged sentences

— — 311,623 311,623

Total $ 3,079,268 $ 779,867 $ 562,721 $ 4,421,856

Three Months Ended June 30, 2022

Total revenues $ 3,086,970 $ 719,045 $ 535,015 $ 4,341,030

Three Months Ended September 30, 2022

NAST Global Forwarding All Other and Corporate Total

3 unchanged sentences

— — 291,012 291,012

Total $ 4,147,046 $ 2,093,190 $ 558,239 $ 6,798,475

Six Months Ended June 30, 2023

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

Nine Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Total

3 unchanged sentences

— — 932,357 932,357

Total $ 6,383,455 $ 1,569,845 $ 1,080,226 $ 9,033,526

Six Months Ended June 30, 2022

Total revenues $ 9,470,425 $ 2,288,890 $ 1,615,241 $ 13,374,556

Nine Months Ended September 30, 2022

NAST Global Forwarding All Other and Corporate Total

3 unchanged sentences

— — 911,447 911,447

Total $ 8,261,935 $ 4,287,587 $ 1,064,906 $ 13,614,428

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

____________________________________________

1 unchanged sentence

(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 June 30, 2023, and revenue recognized in the three and six months ended June 30, 2023 and 2022 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, 2023, and revenue recognized in the three and nine months ended September 30, 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 changes in transportation pricing and costs and 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 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 the 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.

5 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, 2023.

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, 2023.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information are presented below (dollars in thousands):

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

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

Lease Costs 2023 2022 2023 2022

2 unchanged sentences

Total lease expense $ 26,631 $ 25,085 $ 78,957 $ 73,409

Six Months Ended June 30,

Nine Months Ended September 30,

Other Lease Information 2023 2022

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 44,184 122,869

Lease Term and Discount Rate As of June 30, 2023 As of December 31, 2022

Lease Term and Discount Rate As of September 30, 2023 As of December 31, 2022

Weighted average remaining lease term (in years) 6.0 6.4

Weighted average discount rate 3.8 % 3.5 %

The maturities of lease liabilities as of June 30, 2023, were as follows (in thousands):

The maturities of lease liabilities as of September 30, 2023, were as follows (in thousands):

Maturity of Lease Liabilities Operating Leases

7 unchanged sentences

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 as of June 30, 2023.

The allowance for credit losses on contract assets was not significant as of September 30, 2023.

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

2 unchanged sentences

Write-offs ( 7,356 )

Balance, June 30, 2023 $ 14,461

Recoveries of amounts previously written off were not significant for the three and six months ended June 30, 2023.

Balance, September 30, 2023 $ 17,312

Recoveries of amounts previously written off were not significant for the three and nine months ended September 30, 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 June 30, 2023 and December 31, 2022, was $ 92.9 million and $ 88.9 million, respectively.

The recorded balance on June 30, 2023 and December 31, 2022, is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 6.5 million for the three months ended June 30, 2023, primarily driven by fluctuations in the Yuan and Singapore Dollar.

Other comprehensive loss was $ 33.6 million for the three months ended June 30, 2022, primarily driven by fluctuations in the Singapore Dollar, Australian Dollar and the Yuan.

Other comprehensive loss was $ 4.1 million for the six months ended June 30, 2023, primarily driven by fluctuations in the Singapore Dollar, Yuan, and Australian Dollar partially offset by the Euro.

Other comprehensive loss was $ 26.7 million for the six months ended June 30, 2022, primarily driven by fluctuations in the Singapore Dollar, Yuan, and Australian Dollar.

The recorded balance on September 30, 2023, and December 31, 2022, was $ 107.8 million and $ 88.9 million, respectively.

The recorded balance on September 30, 2023, and December 31, 2022, is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 14.9 million for the three months ended September 30, 2023, primarily driven by fluctuations in the Euro and Singapore Dollar.

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 $ 19.0 million for the nine months ended September 30, 2023, primarily driven by fluctuations in the Singapore Dollar, Australian Dollar, Yuan, and Euro.

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.

RESTRUCTURING

2022 Restructuring Program :

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 $ 14.1 million in the second 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 $ 12.0 million in cash in the second quarter of 2023 with the majority of the remaining $ 8.7 million accrued as of June 30, 2023 expected to be paid by the end of 2023.

We recognized additional restructuring charges of $ 17.7 million in 2023 primarily related to workforce reductions.

We expect to complete our 2022 restructuring program by the end of 2023.

For severance and other operating expenses related to the 2022 restructuring program, we paid $ 2.2 million in cash in the third quarter of 2023 with the majority of the remaining $ 5.7 million accrued as of September 30, 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 June 30, Six Months Ended June 30,

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

Severance (1)

5 unchanged sentences

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

Amounts recognized in the three months ended September 30, 2023, primarily relate to accrual adjustments for amounts settling for an amount different than originally estimated.

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

The following table summarizes restructuring charges by reportable segment (dollars in thousands):

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

Other selling, general, and administrative expenses 4 67 122 193

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

Other selling, general, and administrative expenses 8 230 1,084 1,322

The following table summarizes activity related to our restructuring initiatives and reserves included in our consolidated balance sheets as of December 31, 2022 and June 30, 2023:

The following table summarizes activity related to our 2022 restructuring program and reserves included in our consolidated balance sheets:

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

5 unchanged sentences

( 622 ) — ( 622 )

Balance, June 30, 2023 $ 8,673 $ — $ 8,673

Balance, September 30, 2023 $ 5,737 $ — $ 5,737

________________________________

(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.

South American Restructuring Program:

In the third quarter of 2023, we announced a restructuring program (“South American restructuring program”) to divest our operations in Argentina to mitigate our exposure to the deteriorating economic conditions and increasing political instability there.

The Central Bank of Argentina maintains certain currency controls that limit our ability to access U.S.

dollars in Argentina and remit cash from our Argentine operations.

As conditions worsened in the third quarter of 2023, management began the process of divesting and identifying local independent agent relationships to continue serving our customers in the region.

As a result of these actions, we recognized restructuring charges related to disposal and exit activities including asset impairments and workforce reductions.

We have determined that this planned divestiture does not represent a strategic shift that will have a major effect on our consolidated results of operations, and therefore the results of operations in Argentina are not reported as discontinued operations.

We expect the sale to be completed near the end of 2023 and our restructuring program to be completed by the end of the first quarter of 2024.

The assets and liabilities associated with the planned divestiture (the “disposal group”) are presented as held for sale at fair value less any estimated costs to sell as of September 30, 2023.

We recognized a $ 21.1 million loss on the disposal group classified as held for sale in the three and nine months ended September 30, 2023, which is included within other selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

The assets and liabilities of the disposal group are primarily related to our Global Forwarding segment.

A summary of the restructuring charges recognized related to our South American restructuring program is presented below (in thousands):

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

Severance and other personnel expenses (1)

$ 3,350 $ 3,350

Other selling, general, and administrative expenses (2)

21,252 21,252

Income tax benefits (3)

( 5,501 ) ( 5,501 )

Total $ 19,101 $ 19,101

________________________________

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

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

(3) Amounts are included within provision for income taxes in our condensed consolidated statements of operations and comprehensive income.

The following table summarizes restructuring charges related to our South American restructuring program by reportable segment (dollars in thousands):

Three Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ — $ 2,600 $ 750 $ 3,350

Other selling, general, and administrative expenses — 21,012 240 21,252

Income tax benefits — ( 5,501 ) — ( 5,501 )

Nine Months Ended September 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ — $ 2,600 $ 750 $ 3,350

Other selling, general, and administrative expenses — 21,012 240 21,252

Income tax benefits — ( 5,501 ) — ( 5,501 )

The following table summarizes activity related to our South American restructuring program and reserves included in our consolidated balance sheets:

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

Balance, December 31, 2022 $ — $ — $ —

Restructuring charges 3,350 21,252 24,602

Settled non-cash — ( 21,187 ) ( 21,187 )

Balance, September 30, 2023 $ 3,350 $ 65 $ 3,415

We have recorded a deferred tax asset of $ 5.5 million related to income tax benefits we expect to realize as a result of our South American restructuring activities.

A summary of assets and liabilities associated with the disposal group that are held for sale as of September 30, 2023, is presented below (in thousands):

September 30, 2023

Assets held for sale:

Cash and cash equivalents $ 2,486

Receivables 23,710

Property and equipment 431

Right-of-use lease assets 128

Other assets 415

Valuation allowance ( 21,113 )

Total assets held for sale (1)

Liabilities held for sale:

Accounts payable $ 5,115

Lease liabilities 566

Other liabilities 376

Total liabilities held for sale (2)

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(1) Amounts are included within other assets in our condensed consolidated balance sheet.

(2) Amounts are included within other accrued liabilities in our condensed consolidated balance sheet.

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