What changed in this filing

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Item 1. Financial Statements

2024-05-03 compared with 2023-11-03 · 131 added, 223 removed, 429 unchanged (45% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

47 unchanged sentences

(unaudited, in thousands except per share data)

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

2023 2022 2023 2022

Three Months Ended March 31,

Transportation $ 4,082,588 $ 4,327,965

12 unchanged sentences

Net income 92,904 114,891

Other comprehensive loss ( 14,891 ) ( 49,790 ) ( 18,950 ) ( 76,516 )

Other comprehensive (loss) income ( 19,490 ) 2,477

Comprehensive income $ 73,414 $ 117,368

21 unchanged sentences

Stock-based compensation expense — — 22,673 — 22,673

Repurchase of common stock ( 316 ) ( 32 ) ( 31,021 ) ( 31,053 )

Balance March 31, 2024 117,000 $ 11,700 $ 746,998 $ 5,639,629 $ ( 100,436 ) $ ( 4,867,897 ) $ 1,429,994

Net income 97,316 97,316

Foreign currency adjustments ( 6,536 ) ( 6,536 )

Dividends declared, $ 0.61 per share

( 73,577 ) ( 73,577 )

Stock issued for employee benefit plans 228 22 ( 2,154 ) 17,338 15,206

Stock-based compensation expense — — 6,035 — 6,035

Repurchase of common stock ( 330 ) ( 33 ) ( 31,692 ) ( 31,725 )

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

13 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

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES

Net income $ 92,904 $ 114,891

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

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

Depreciation and amortization 23,878 24,380

3 unchanged sentences

Excess tax benefit on stock-based compensation ( 1,570 ) ( 7,011 )

Loss on disposal group held for sale 21,113 —

Other operating activities 5,596 942

3 unchanged sentences

Prepaid expenses and other ( 11,409 ) 433

Right of use asset ( 13,933 ) 13,841

Accounts payable and outstanding checks 84,966 ( 90,724 )

3 unchanged sentences

Other accrued liabilities 5,446 8,169

Lease liability 14,347 ( 14,003 )

Other assets and liabilities 429 1,277

Net cash provided by operating activities 684,615 876,789

Net cash (used for) provided by operating activities ( 33,323 ) 254,544

INVESTING ACTIVITIES

1 unchanged sentence

Purchases and development of software ( 13,854 ) ( 15,579 )

Proceeds from sale of property and equipment 1,324 63,208

Net cash used for investing activities ( 22,474 ) ( 26,950 )

4 unchanged sentences

Cash dividends ( 74,580 ) ( 73,435 )

Proceeds from long-term borrowings — 200,000

Proceeds from short-term borrowings 912,000 739,000

Payments on short-term borrowings ( 792,000 ) ( 840,000 )

Net cash used for financing activities ( 651,519 ) ( 894,018 )

Net cash provided by (used for) financing activities 34,695 ( 205,992 )

Effect of exchange rates on cash and cash equivalents ( 2,584 ) 76

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 ) —

Net change in cash and cash equivalents ( 23,686 ) 21,678

Cash and cash equivalents, beginning of period 145,524 217,482

1 unchanged sentence

See accompanying notes to the condensed consolidated financial statements.

1 The three months ended March 31, 2023 have been adjusted to conform to current year presentation.

ROBINSON WORLDWIDE, INC.

17 unchanged sentences

RECENTLY ISSUED ACCOUNTING STANDARDS

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.

In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses regularly provided to the chief operating decision maker.

The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The guidance in this ASU expands the disclosure requirements for income taxes by requiring greater disaggregation of information in the income tax rate reconciliation and disaggregation of income taxes paid by jurisdiction.

The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

5 unchanged sentences

Foreign currency translation ( 4,261 ) ( 1,681 ) ( 640 ) ( 6,582 )

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

Balance, March 31, 2024 $ 1,184,552 $ 205,918 $ 76,548 $ 1,467,018

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, 2023.

As part of our 2023 annual impairment test, we

determined that the fair value of our reporting units exceeded their respective carrying values and our goodwill balance was not impaired.

No changes in circumstances or events in the first quarter of 2024 indicated that an interim impairment test was required as of March 31, 2024.

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

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,

2023 2022 2023 2022

Three Months Ended March 31,

Amortization expense $ 3,313 $ 5,815

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

Finite-lived intangible assets, by reportable segment, as of March 31, 2024, will be amortized over their remaining lives as follows (in thousands):

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

2028 — — 207 207

Thereafter — — 203 203

Total $ 31,527

5 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.

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.

We had no Level 3 assets or liabilities as of and during the periods ended March 31, 2024, and December 31, 2023.

There were no transfers between levels during the period.

2 unchanged sentences

Average interest rate as of Carrying value as of

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

March 31, 2024 December 31, 2023 Maturity March 31, 2024 December 31, 2023

Revolving credit facility 6.43 % 6.45 % November 2027 $ 280,000 $ 160,000

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

364-day revolving credit facility — % — % May 2023 — —

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

10 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 November 19, 2027.

We have a senior unsecured revolving credit facility (the “Credit Agreement”) with a total availability of $ 1 billion, which may be reduced by standby letters of credit.

The Credit Agreement has a maturity date of November 19, 2027.

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

As of March 31, 2024, 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.

12 unchanged sentences

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

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

The fair value of the Notes approximated $ 300.2 million on March 31, 2024.

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.

4 unchanged sentences

The occurrence of an event of default would permit certain Purchasers to declare certain Notes then outstanding to be immediately due and payable.

Under the terms of the Note Purchase Agreement, the Notes are redeemable, in whole or in part, at 100 percent of the principal amount being redeemed together with a “make-whole amount” (as defined in the Note Purchase Agreement), and accrued and unpaid interest with respect to each Note.

Under the terms of the Note

Purchase Agreement, the Notes are redeemable, in whole or in part, at 100 percent of the principal amount being redeemed together with a “make-whole amount” (as defined in the Note Purchase Agreement), and accrued and unpaid interest with respect to each Note.

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

7 unchanged sentences

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.

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.

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.

trade accounts receivable with a total availability of $ 500 million as of March 31, 2024.

The interest rate on borrowings under the Receivables Securitization Facility is based on SOFR plus a credit spread adjustment of 0.10 percent plus 0.80 percent.

In addition, there is a commitment fee on the average daily undrawn stated amount under the facility of 0.20 percent.

The recorded amount of borrowings outstanding under 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 current borrowings on the consolidated statement of cash flows.

Borrowings on the Receivables Securitization Facility, if any, 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.

1 unchanged sentence

On July 7, 2022, we amended the Receivables Securitization Facility to effectively increase the receivables pool available with respect to the Receivables Securitization Facility.

On November 7, 2023, we amended the Receivables Securitization Facility to extend the termination date of the facility to November 7, 2025.

The total available remains $ 500 million, and we have the option to utilize an accordion feature, if needed, of an additional $ 250 million pursuant to the provisions of the Receivables Purchase Agreement, amended by the Receivables Purchase Amendment.

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

1 unchanged sentence

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the Senior Notes have an effective yield to maturity of approximately 4.39 percent per annum.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 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.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 583.2 million as of March 31, 2024, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 596.2 million as of March 31, 2024.

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 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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Bank of which $ 15.0 million is utilized for standby letters of credit related to insurance collateral as of March 31, 2024.

These standby letters of credit are renewed annually and were undrawn as of March 31, 2024.

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

The three months ended March 31, 2023 have been adjusted to conform to the current year presentation.

Three Months Ended March 31,

Federal statutory rate 21.0 % 21.0 %

4 unchanged sentences

Foreign 0.5 ( 1.0 )

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

Section 162(m) limitation on compensation 1.2 1.1

Other 0.9 0.2

Effective income tax rate 15.8 % 13.5 %

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.

In 2021, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15 percent.

Subsequently, multiple sets of administrative guidance have been issued.

Many non-U.S.

tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years.

We are continuing to evaluate the impact of enacted legislation and pending legislation to enact Pillar Two Model Rules in the tax jurisdictions we operate in.

As of March 31, 2024, we have $ 20.6 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, new information, or settlements with taxing authorities.

3 unchanged sentences

income tax returns before 2019.

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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Stock options $ 1,082 $ 2,218

5 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 3,317,410 shares available for stock awards under the Plan as of September 30, 2023.

There were 2,686,067 shares available for stock awards under the Plan as of March 31, 2024.

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

As of March 31, 2024, unrecognized compensation expense related to stock options was $ 3.3 million.

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

5 unchanged sentences

Performance-based Awards

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 dilutive earnings per share growth.

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

Beginning in 2021, we have awarded PSUs on an annual basis to certain key employees.

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.

3 unchanged sentences

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

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

Beginning in 2021, we have granted time-based awards on an annual basis which vest over a three-year period.

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

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 granted 318,801 PSUs at target and 604,468 time-based restricted stock units in February 2024 that vest over a three-year period.

The PSUs will vest upon achieving cumulative three-year dilutive earnings per share targets and contain an upside opportunity of up to 200 percent.

The PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of $ 73.66 and provide for two-years of post-termination vesting upon a qualified retirement.

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

2 unchanged sentences

These awards have been expensed on the date of grant.

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.

As of March 31, 2024, there was unrecognized compensation expense of $ 233.8 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 September 30, 2023

Three Months Ended March 31, 2024

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 LTL or groupage services across Europe.

Europe Surface Transportation provides transportation and logistics services including truckload and LTL 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 September 30, 2023

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

Income (loss) from operations 112,121 3,491 ( 2,090 ) 113,522

Depreciation and amortization 5,882 5,446 14,216 25,544

Total assets (1)

3,162,720 1,081,262 1,073,685 5,317,667

Average employee headcount 6,278 5,082 4,217 15,577

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended September 30, 2022

Three Months Ended March 31, 2024

Total revenues $ 3,000,313 $ 858,637 $ 553,361 $ 4,412,311

5 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2023

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

4 unchanged sentences

Average employee headcount 6,870 5,471 4,561 16,902

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)

_________________________________________

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

_________________________________________

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

1 unchanged sentence

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 September 30, 2023

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 3,086,970 $ 719,045 $ 223,392 $ 4,029,407

— — 311,623 311,623

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

Major Service Lines

Transportation and logistics services (1)

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

— — 291,012 291,012

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

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total revenues $ 3,000,313 $ 858,637 $ 553,361 $ 4,412,311

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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, 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.

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, 2024, and revenue recognized in the three months ended March 31, 2024, and 2023 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.

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

A lease is identified when a contract allows us the right to control an identified asset for a period of time in exchange for consideration.

Our lease agreements consist primarily of operating leases for office space, warehouses, office equipment, trailers, and a small number of intermodal containers.

Our lease agreements consist primarily of operating leases for office space, warehouses, office equipment, and trailers.

We do not have material financing leases.

Frequently, we enter into contractual relationships with a wide variety of transportation companies for freight capacity and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight.

These contracts typically have a term of 12 months or less and do not allow us to direct the use or obtain substantially all of the economic benefits of a specifically identified asset.

These contracts typically have a term of twelve months or less and do not allow us to direct the use or obtain substantially all of the economic benefits of a specifically identified asset.

Accordingly, these agreements are not considered leases.

2 unchanged sentences

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.

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

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

2 unchanged sentences

Many of our leases include the option to renew for a period of months to several years.

The term of our leases may include the option to renew when it is reasonably certain that we will exercise that option, although these occurrences are seldom.

The term of our leases may include the option to renew when it is reasonably certain we will exercise that option, although these occurrences are seldom.

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, 2023.

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, 2024.

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

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

Three Months Ended March 31,

Lease Costs 2024 2023

2 unchanged sentences

Total lease expense $ 26,799 $ 26,067

Nine Months Ended September 30,

Three Months Ended March 31,

Other Lease Information 2024 2023

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 36,810 6,739

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

Lease Term and Discount Rate As of March 31, 2024 As of December 31, 2023

Weighted average remaining lease term (in years) 5.8 5.9

Weighted average discount rate 4.0 % 3.9 %

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

The maturities of lease liabilities as of March 31, 2024, 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 September 30, 2023.

The allowance for credit losses on contract assets was not significant as of March 31, 2024.

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

2 unchanged sentences

Write-offs ( 542 )

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.

Balance, March 31, 2024 $ 16,351

Recoveries of amounts previously written off were not significant for the three months ended March 31, 2024.

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, 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.

The recorded balance on March 31, 2024 and December 31, 2023 was $ 100.4 million and $ 80.9 million, respectively.

The recorded balance on March 31, 2024 and December 31, 2023 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 19.5 million for the three months ended March 31, 2024, primarily driven by fluctuations in the Singapore Dollar, Euro, and Australian Dollar.

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

RESTRUCTURING

2024 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 $ 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 September 30, Nine Months Ended September 30,

The Company began a restructuring program (the “2024 Restructuring Program”) during the three months ended March 31, 2024 to drive our enterprise strategy and reduce our cost structure.

The 2024 Restructuring Program will be executed in phases, focusing on waste reduction, reprioritizing our product and technology teams on fewer strategic initiatives, driving synergies across our portfolio of services, and unifying the go to market strategy of our divisions.

The major initiatives of the first phase, which commenced in the three months ended March 31, 2024, include:

1) optimizing our management hierarchy, which includes a reduction in workforce;

and 2) reprioritizing the efforts of our product and technology teams, resulting in the impairment of certain internally developed software projects.

We have realigned our product and technology teams on fewer strategic initiatives to accelerate the capabilities of our platform to deliver market-leading outcomes for our customers, carriers, and employees.

The primary initiatives of the second phase will commence in the second quarter of 2024.

These initiatives include the rationalization of our facilities footprint including the consolidation, early termination, or abandonment of office buildings under operating leases.

The second phase may also include other initiatives yet to be identified that will drive our enterprise

strategy and improve our cost structure.

We expect all activities under the 2024 Restructuring program to be completed by the end of 2024.

We recognized restructuring charges of $ 12.9 million in the first quarter of 2024 primarily related to workforce reductions and the impairment of certain capitalized internally developed software projects.

Based upon the initiatives identified to date, we anticipate recognizing a total of approximately $ 25 million of restructuring charges related to the 2024 Restructuring Program in 2024.

The amount of restructuring charges we recognize, and the timing of recognition, will depend upon the nature and scope of initiatives we identify and our ability to enact changes to our real estate footprint under existing operating leases.

A summary of charges related to our 2024 Restructuring Program recognized in the three months ended March 31, 2024 are presented below (in thousands):

Three Months Ended March 31,

Severance (1)

$ ( 265 ) $ 14,554

Other personnel expenses (1)

3 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 September 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ ( 73 ) $ ( 87 ) $ ( 172 ) $ ( 332 )

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

Nine Months Ended September 30, 2023

Amounts recognized in the three months ended March 31, 2024 primarily relate to the impairment of certain capitalized internally developed software projects.

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

Three Months Ended March 31, 2024

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

Other selling, general, and administrative expenses 1,877 232 2,860 4,969

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

The following table summarizes activity related to our 2024 restructuring program and reserves included in our consolidated balance sheets (in thousands):

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

3 unchanged sentences

Settled non-cash — ( 4,923 ) ( 4,923 )

Accrual adjustments (1)

( 622 ) — ( 622 )

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

Balance, March 31, 2024 $ 5,496 $ — $ 5,496

2022 Restructuring Program :

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

The initiatives under our 2022 Restructuring Program were completed in 2023.

We had $ 3.8 million of accrued severance and other personnel expenses remaining as of as December 31, 2023.

We paid $ 2.3 million of cash in the first quarter of 2024.

There is no further activity expected related to the 2022 Restructuring Program other than settling the remaining $ 1.3 million of accrued severance and other personnel expenses as of March 31, 2024.

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)

21,252 21,252

Income tax benefits (3)

( 5,501 ) ( 5,501 )

Total $ 3,722

2 unchanged sentences

(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

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

Three Months Ended March 31, 2023

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

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

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

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

Accrued Severance and Other Personnel Expenses

Balance, December 31, 2023 $ 3,783

Restructuring charges —

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)

Cash payments ( 2,323 )

Accrual adjustments (1)

Balance, March 31, 2024 $ 1,349

________________________________

(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