What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 161 added, 82 removed, 478 unchanged (34% of the section changed)

3 unchanged sentences

(unaudited, in thousands, except per share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

47 unchanged sentences

(unaudited, in thousands except per share data)

Three Months Ended March 31,

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

2024 2023 2024 2023

Transportation $ 4,121,930 $ 4,084,827 $ 8,204,518 $ 8,412,792

12 unchanged sentences

Net income 126,251 97,316 219,155 212,207

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

Other comprehensive loss ( 1,313 ) ( 6,536 ) ( 20,803 ) ( 4,059 )

Comprehensive income $ 124,938 $ 90,780 $ 198,352 $ 208,148

22 unchanged sentences

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

Net income 126,251 126,251

Foreign currency adjustments ( 1,313 ) ( 1,313 )

Dividends declared, $ 0.61 per share

( 74,006 ) ( 74,006 )

Stock issued for employee benefit plans 262 26 ( 10,435 ) 20,352 9,943

Stock-based compensation expense — — 19,572 — 19,572

Balance June 30, 2024 117,262 $ 11,726 $ 756,135 $ 5,691,874 $ ( 101,749 ) $ ( 4,847,545 ) $ 1,510,441

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 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

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

2024 2023 (1)

OPERATING ACTIVITIES

19 unchanged sentences

Other assets and liabilities 2,096 ( 30 )

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

Net cash provided by operating activities 133,099 479,376

INVESTING ACTIVITIES

9 unchanged sentences

Payments on short-term borrowings ( 1,625,000 ) ( 2,099,750 )

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

Net cash used for financing activities ( 120,065 ) ( 432,118 )

Effect of exchange rates on cash and cash equivalents ( 3,581 ) ( 3,284 )

2 unchanged sentences

Cash and cash equivalents, end of period $ 113,166 $ 210,155

_____________________________________________________

(1) The six months ended June 30, 2023 have been adjusted to conform to current year presentation.

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.

35 unchanged sentences

Foreign currency translation ( 2,486 ) ( 1,830 ) ( 679 ) ( 4,995 )

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

Balance, June 30, 2024 $ 1,186,327 $ 205,769 $ 76,509 $ 1,468,605

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 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.

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.

In the second quarter of 2024, we identified qualitative and quantitative factors indicating that the fair value of our Europe Surface Transportation reporting unit may not exceed its carrying value requiring an interim Step One Analysis.

As a result of our interim Step One Analysis, we determined that the fair value of our Europe Surface Transportation reporting unit exceeded its carrying value by less than 5 percent and its $ 29.2 million goodwill balance was not impaired.

Our interim Step One Analysis was completed using a combination of the market approach and a discounted cash flow analysis.

The market approach was completed to determine the fair value of the Europe Surface Transportation business, excluding its proprietary technology platform, and was based upon available third-party offers to acquire the business at the measurement date.

As the offers to acquire the business did not include the sale of a technology platform necessary to run the business, a discounted cash flow analysis was completed to determine the fair value of the Europe Surface Transportation proprietary technology platform.

The computed fair value of the reporting unit exceeded its carrying value by less than 5 percent and therefore the judgments, key assumptions, and third-party offers to acquire the business are inherently sensitive inputs to our interim Step One Analysis.

A negative change to the Europe Surface Transportation market could have negatively impacted the third-party offers to acquire the business used in our interim Step One Analysis although as noted in Note 14, Subsequent Events , the Company has entered into an agreement to sell the business excluding its proprietary technology platform.

A change to the timing or cash outflows needed for a market participant to implement a comparable technology platform and changes to our computed discount rate are the primary factors that could reasonably be expected to negatively affect the fair value determined by our discounted cash flow analysis.

We will continue to monitor any changes to the assumptions included in our discounted cash flow analysis in future periods as needed.

There were no changes in circumstances or events identified in the second quarter of 2024 indicating that an interim impairment analysis was required for any other reporting units as of June 30, 2024.

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

March 31, 2024 December 31, 2023

June 30, 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 March 31,

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

2024 2023 2024 2023

Amortization expense $ 3,303 $ 5,773 $ 6,616 $ 11,588

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

Finite-lived intangible assets, by reportable segment, as of June 30, 2024, will be amortized over their remaining lives as follows (in thousands):

NAST Global Forwarding All Other and Corporate Total

11 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 March 31, 2024, and December 31, 2023.

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

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

June 30, 2024 December 31, 2023 Maturity June 30, 2024 December 31, 2023

Revolving credit facility 6.57 % 6.45 % November 2027 $ 188,000 $ 160,000

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

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

13 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 March 31, 2024, the variable rate equaled SOFR and a credit spread adjustment of 0.10 percent plus 1.0 percent.

As of June 30, 2024, the variable rate equaled SOFR and a credit spread adjustment of 0.10 percent plus 1.13 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.

3 unchanged sentences

The Credit Agreement also contains customary events of default.

364-DAY UNSECURED REVOLVING CREDIT FACILITY

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 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.

The facility expired on May 5, 2023, and it was not renewed.

NOTE PURCHASE AGREEMENT

2 unchanged sentences

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

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

The fair value of the Notes approximated $ 294.1 million on June 30, 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 March 31, 2024.

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

2 unchanged sentences

We consider these borrowings to be a Level 2 financial liability.

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.

On February 1, 2022, we amended the Receivables Securitization Facility primarily to increase the total availability from $ 300 million to $ 500 million pursuant to the provisions of the existing agreement.

On 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.

3 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 $ 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.

The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $ 581.7 million as of June 30, 2024, based primarily on the market prices quoted from external sources.

The carrying value of the Senior Notes was $ 596.4 million as of June 30, 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 $ 20 million discretionary line of credit with U.S.

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.

Bank of which $ 16.9 million is utilized for standby letters of credit related to insurance collateral as of June 30, 2024.

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

The three and six months ended June 30, 2023, have been adjusted to conform to the current year presentation.

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

2024 2023 2024 2023

Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

3 unchanged sentences

tax credits and incentives ( 5.0 ) ( 3.9 ) ( 6.2 ) ( 3.9 )

Foreign 0.5 ( 1.0 )

Foreign tax rate differential 2.7 0.6 1.8 ( 0.3 )

Section 162(m) limitation on compensation 0.8 0.7 1.0 0.9

6 unchanged sentences

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.

As of June 30, 2024, we have $ 21.6 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.

6 unchanged sentences

A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands):

Three Months Ended March 31,

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

2024 2023 2024 2023

Stock options $ 1,082 $ 2,242 $ 2,164 $ 4,460

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.

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.

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

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

There were 2,734,585 shares available for stock awards under the Plan as of June 30, 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 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.

As of June 30, 2024, unrecognized compensation expense related to stock options was $ 2.2 million.

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

Nearly all of our awards contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time.

19 unchanged sentences

These awards have been expensed on the date of grant.

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.

As of June 30, 2024, there was unrecognized compensation expense of $ 211.1 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 March 31, 2024

Three Months Ended June 30, 2024

Shares purchased

24 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Total revenues $ 2,989,909 $ 921,223 $ 572,216 $ 4,483,348

5 unchanged sentences

NAST Global Forwarding All Other and Corporate Consolidated

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

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

6 unchanged sentences

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

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2024

Total revenues $ 5,990,222 $ 1,779,860 $ 1,125,577 $ 8,895,659

Income (loss) from operations 249,997 72,534 ( 17,308 ) 305,223

Depreciation and amortization 10,875 5,637 32,420 48,932

Total assets (1)

3,053,769 1,306,075 1,152,502 5,512,346

Average employee headcount 5,929 4,770 4,032 14,731

NAST Global Forwarding All Other and Corporate Consolidated

Six Months Ended June 30, 2023

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

Income (loss) from operations 251,881 59,763 ( 17,988 ) 293,656

Depreciation and amortization 11,507 10,964 27,884 50,355

Total assets (1)

3,106,092 1,149,091 1,150,078 5,405,261

Average employee headcount 6,713 5,356 4,454 16,523

_________________________________________

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

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 (in thousands):

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

Total revenues $ 2,989,909 $ 921,223 $ 572,216 $ 4,483,348

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

NAST Global Forwarding All Other and Corporate Total

4 unchanged sentences

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

Six Months Ended June 30, 2024

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 5,990,222 $ 1,779,860 $ 434,436 $ 8,204,518

— — 691,141 691,141

Total revenues $ 5,990,222 $ 1,779,860 $ 1,125,577 $ 8,895,659

Six Months Ended June 30, 2023

NAST Global Forwarding All Other and Corporate Total

Major Service Lines

Transportation and logistics services (1)

$ 6,383,455 $ 1,569,845 $ 459,492 $ 8,412,792

— — 620,734 620,734

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

____________________________________________

(1) Transportation and logistics services performance obligations are completed over time.

(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 March 31, 2024, and revenue recognized in the three months ended March 31, 2024, and 2023 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 June 30, 2024, and revenue recognized in the three and six months ended June 30, 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.

16 unchanged sentences

We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component.

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of March 31, 2024.

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, 2024.

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

Three Months Ended March 31,

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

Lease Costs 2024 2023 2024 2023

Operating lease expense (1)

$ 26,793 $ 24,773 $ 52,430 $ 49,426

Short-term lease expense 1,521 1,486 2,683 2,900

Total lease expense $ 28,314 $ 26,259 $ 55,113 $ 52,326

Three Months Ended March 31,

___________________________

(1) Operating lease expense for the three and six months ended June 30, 2024, includes $3.9 million of restructuring charges related to rationalization of our facilities footprint including the early termination or abandonment of select office buildings under operating leases.

Refer to Note 13, Restructuring , for further discussion related to our 2024 Restructuring Program.

Six Months Ended June 30,

Other Lease Information 2024 2023

1 unchanged sentence

Right-of-use lease assets obtained in exchange for new lease liabilities 46,526 14,204

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

Lease Term and Discount Rate As of June 30, 2024 As of December 31, 2023

Weighted average remaining lease term (in years) 5.8 5.9

Weighted average discount rate 4.1 % 3.9 %

The maturities of lease liabilities as of March 31, 2024, were as follows (in thousands):

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

The allowance for credit losses on contract assets was not significant as of June 30, 2024.

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

2 unchanged sentences

Write-offs ( 1,669 )

Balance, March 31, 2024 $ 16,351

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

Balance, June 30, 2024 $ 16,845

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

The recorded balance on June 30, 2024, and December 31, 2023, was $ 101.7 million and $ 80.9 million, respectively.

The recorded balance on June 30, 2024, and December 31, 2023, is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive loss was $ 1.3 million for the three months ended June 30, 2024, primarily driven by fluctuations in the Euro, Mexican Peso and Brazilian Real mostly offset by the Australian Dollar and Singapore Dollar.

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 $ 20.8 million for the six months ended June 30, 2024, primarily driven by fluctuations in the Euro, Singapore Dollar, and Australian Dollar.

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.

RESTRUCTURING

2024 Restructuring Program :

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.

In 2024, the Company began a restructuring program (the “2024 Restructuring Program”) 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:

The major initiatives of the first phase, which commenced in the first quarter of 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.

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 commenced 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.

The 2024 Restructuring Program 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.

We recognized restructuring charges of $ 15.2 million in the second quarter of 2024 primarily related to workforce reductions and charges to reduce our facilities footprint including early termination or abandonment of office buildings under operating leases.

Based upon the initiatives identified to date, we anticipate recognizing $ 30 million to $ 35 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,

We paid $ 10.7 million of cash related to the 2024 Restructuring Program in the six months ended June 30, 2024.

A summary of charges related to our 2024 Restructuring Program are presented below (in thousands):

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

Severance (1)

$ 8,799 $ 16,213

Other personnel expenses (1)

4 unchanged sentences

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

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

The charges recognized in the three months ended June 30, 2024, primarily resulted from the second phase of the 2024 Restructuring Program while the charges recognized in the six months ended June 30, 2024, also include initiatives under the first phase of the 2024 Restructuring Program as discussed above.

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

Other selling, general, and administrative expenses 3,776 1,327 637 5,740

Six Months Ended June 30, 2024

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ 7,784 $ 5,395 $ 4,232 $ 17,411

Other selling, general, and administrative expenses 5,654 1,559 3,496 10,709

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

4 unchanged sentences

Settled non-cash — ( 10,030 ) ( 10,030 )

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

Accrual adjustments (1)

( 449 ) — ( 449 )

Balance, June 30, 2024 $ 6,662 $ 285 $ 6,947

________________________________

(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.

2022 Restructuring Program :

1 unchanged sentence

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,

We paid $ 3.0 million of cash related to the 2022 Restructuring Program in the six months ended June 30, 2024.

There is no further activity expected related to the 2022 Restructuring Program other than settling the remaining $ 0.7 million of accrued severance and other personnel expenses as of June 30, 2024.

A summary of charges related to our 2022 Restructuring Program are presented below (in thousands):

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

Severance (1)

$ 11,681 $ 14,819

Other personnel expenses (1)

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

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

1 unchanged sentence

Other selling, general, and administrative expenses 4 39 962 1,005

Six Months Ended June 30, 2023

NAST Global Forwarding All Other and Corporate Consolidated

Personnel expenses $ 1,156 $ 2,229 $ 13,340 $ 16,725

Other selling, general, and administrative expenses 4 163 962 1,129

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

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Accrual adjustments (1)

Balance, March 31, 2024 $ 1,349

Balance, June 30, 2024 $ 652

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SUBSEQUENT EVENTS

Subsequent to June 30, 2024, we entered into an agreement to sell our Europe Surface Transportation business.

The sale is part of our enterprise strategy to drive focus on profitable growth in our four core modes—North American truckload and LTL and global ocean and air—as engines to ignite growth and create the most value for our stakeholders.

The sale will include all assets and liabilities of the business other than our proprietary technology platform (the “disposal group”).

The sale is expected to close in the fourth quarter of 2024, subject to certain customary conditions and regulatory approvals.

The Europe Surface Transportation disposal group will be presented as held for sale beginning in the third quarter of 2024 and adjusted to fair market value, less costs to sell, which will result in a loss on sale compared to carrying value in the third quarter of 2024.

As of June 30, 2024, we had not committed to a plan to sell the business and significant uncertainty remained as to whether a sale would take place.

The carrying value of the disposal group was approximately $ 115 million as of June 30, 2024, consisting primarily of $ 75 million of net operating working capital and $ 32 million of goodwill and other intangible assets.

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