UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number: 000-23189

C.H. ROBINSON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware

41-1883630

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

14701 Charlson Road

Eden Prairie, MN 55347

(Address of principal executive ~~officers,~~offices, including zip code)

952-937-8500

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value	CHRW	Nasdaq Global Select Market

Indicate by check mark whether the ~~registrant~~registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Emerging ~~Growth Company~~growth company

☐

Non-accelerated filer

☐

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July ~~28, 2021,~~27, 2022, the number of shares outstanding of the registrant’s Common Stock, par value $0.10 per share, was ~~131,711,746.~~123,883,299.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

TABLE OF CONTENTS



	PART I. Financial Information

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30 3 0 , ~~2021,~~2022, and December 31, ~~2020~~2021	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and ~~Six~~ S ix Months Ended ~~June~~Jun e 30 , ~~2021~~2022 and ~~2020~~2021	4
	Condensed Consolidated Statements of Stockholders' Investment for the Three and ~~and Six~~ S ~~Months~~ ix Mon t h s Ended June 30 , ~~2021~~2022 and ~~2020~~2021	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended ~~June~~Ju ne 30 , 2022 and 2021 ~~and~~ 20 20	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3130
Item 4.	Controls and Procedures	3230

	PART II. Other Information

Item 1.	Legal Proceedings	3331
Item 1A.	Risk Factors	3331
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3331
Item 3.	Defaults Up on Senior Securities	3331
Item 4.	Mine Safety Disclosures	3331
Item 5.	Other Information	3331
Item 6.	Exhibits	3432
	Signatures	3533

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except per share data)


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	172,803	$	243,796	Cash and cash equivalents	$	238,925	$	257,413
Receivables, net of allowance for credit loss of $35,430 and $38,113		3,166,769		2,449,577
Receivables, net of allowance for credit loss of $37,518 and $41,542						Receivables, net of allowance for credit loss of $37,518 and $41,542	4,302,321		3,963,487
Contract assets, net of allowance for credit loss	Contract assets, net of allowance for credit loss	292,760		197,176		Contract assets, net of allowance for credit loss	518,752		453,660
Prepaid expenses and other	Prepaid expenses and other	90,230		51,152		Prepaid expenses and other	108,258		129,593

Total current assets	Total current assets	3,722,562		2,941,701		Total current assets	5,168,256		4,804,153
Property and equipment, net of accumulated depreciation and amortization	Property and equipment, net of accumulated depreciation and amortization	174,194		178,949		Property and equipment, net of accumulated depreciation and amortization	155,829		139,831
Goodwill	Goodwill	1,493,711		1,487,187		Goodwill	1,472,855		1,484,754
Other intangible assets, net of accumulated amortization	Other intangible assets, net of accumulated amortization	103,640		113,910		Other intangible assets, net of accumulated amortization	75,789		89,606
Right-of-use lease assets	Right-of-use lease assets	299,313		319,785		Right-of-use lease assets	338,223		292,559
Deferred tax assets	Deferred tax assets	26,057		18,640		Deferred tax assets	134,404		124,900
Other assets	Other assets	87,087		84,086		Other assets	112,083		92,309
Total assets	Total assets	$	5,906,564	$	5,144,258	Total assets	$	7,457,439	$	7,028,112

LIABILITIES AND STOCKHOLDERS’ INVESTMENT	LIABILITIES AND STOCKHOLDERS’ INVESTMENT					LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,622,947	$	1,195,099	Accounts payable	$	1,872,497	$	1,813,473
Outstanding checks	Outstanding checks	66,421		88,265		Outstanding checks	54,360		105,828
Accrued expenses:	Accrued expenses:					Accrued expenses:
Compensation	Compensation	150,393		138,460		Compensation	190,428		201,421
Transportation expense	Transportation expense	226,741		153,574		Transportation expense	405,284		342,778
Income taxes	Income taxes	29,711		43,700		Income taxes	38,850		100,265
Other accrued liabilities	Other accrued liabilities	153,092		154,460		Other accrued liabilities	177,645		171,266
Current lease liabilities	Current lease liabilities	65,859		66,174		Current lease liabilities	72,686		66,311
Current portion of debt	Current portion of debt	271,215		0		Current portion of debt	674,000		525,000
Total current liabilities	Total current liabilities	2,586,379		1,839,732		Total current liabilities	3,485,750		3,326,342

Long-term debt	Long-term debt	1,095,798		1,093,301		Long-term debt	1,594,055		1,393,649
Noncurrent lease liabilities	Noncurrent lease liabilities	249,068		268,572		Noncurrent lease liabilities	281,319		241,369
Noncurrent income taxes payable	Noncurrent income taxes payable	25,968		26,015		Noncurrent income taxes payable	26,291		28,390
Deferred tax liabilities	Deferred tax liabilities	28,642		22,182		Deferred tax liabilities	16,521		16,113
Other long-term liabilities	Other long-term liabilities	14,539		14,523		Other long-term liabilities	1,088		315
Total liabilities	Total liabilities	4,000,394		3,264,325		Total liabilities	5,405,024		5,006,178
Stockholders’ investment:	Stockholders’ investment:					Stockholders’ investment:
Preferred stock, $0.10 par value, 20,000 shares authorized; 0 shares issued or outstanding		0		0
Common stock, $0.10 par value, 480,000 shares authorized; 179,207 and 179,232 shares issued, 132,135 and 134,298 outstanding		13,213		13,430
Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding						Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding	—		—
Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,206 shares issued, 125,116 and 129,186 outstanding						Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,206 shares issued, 125,116 and 129,186 outstanding	12,512		12,919
Additional paid-in capital	Additional paid-in capital	597,788		566,022		Additional paid-in capital	709,163		673,628
Retained earnings	Retained earnings	4,601,227		4,372,833		Retained earnings	5,411,346		4,936,861
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(53,446)		(45,998)		Accumulated other comprehensive loss	(87,860)		(61,134)
Treasury stock at cost (47,072 and 44,934 shares)		(3,252,612)		(3,026,354)
Treasury stock at cost (54,088 and 50,020 shares)						Treasury stock at cost (54,088 and 50,020 shares)	(3,992,746)		(3,540,340)
Total stockholders’ investment	Total stockholders’ investment	1,906,170		1,879,933		Total stockholders’ investment	2,052,415		2,021,934
Total liabilities and stockholders’ investment	Total liabilities and stockholders’ investment	$	5,906,564	$	5,144,258	Total liabilities and stockholders’ investment	$	7,457,439	$	7,028,112

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(unaudited, in thousands except per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Transportation	Transportation	$	5,240,448	$	3,348,611	$	9,800,675	$	6,890,729	Transportation	$	6,465,642	$	5,240,448	$	12,993,993	$	9,800,675
Sourcing	Sourcing	292,278		279,235		535,920		542,125		Sourcing	332,833		292,278		620,435		535,920
Total revenues	Total revenues	5,532,726		3,627,846		10,336,595		7,432,854		Total revenues	6,798,475		5,532,726		13,614,428		10,336,595
Costs and expenses:	Costs and expenses:									Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	4,519,305		2,762,590		8,400,590		5,762,703		Purchased transportation and related services	5,466,874		4,519,305		11,117,098		8,400,590
Purchased products sourced for resale	Purchased products sourced for resale	264,245		250,803		484,449		487,745		Purchased products sourced for resale	299,988		264,245		559,521		484,449
Personnel expenses	Personnel expenses	362,901		300,483		723,736		630,703		Personnel expenses	444,764		362,901		858,125		723,736
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	125,671		125,183		243,887		253,476		Other selling, general, and administrative expenses	117,184		125,671		264,545		243,887
Total costs and expenses	Total costs and expenses	5,272,122		3,439,059		9,852,662		7,134,627		Total costs and expenses	6,328,810		5,272,122		12,799,289		9,852,662
Income from operations	Income from operations	260,604		188,787		483,933		298,227		Income from operations	469,665		260,604		815,139		483,933
Interest and other expense		(13,497)		(10,211)		(24,757)		(25,439)
Interest and other income/expense, net										Interest and other income/expense, net	(27,395)		(13,497)		(41,569)		(24,757)
Income before provision for income taxes	Income before provision for income taxes	247,107		178,576		459,176		272,788		Income before provision for income taxes	442,270		247,107		773,570		459,176
Provision for income taxes	Provision for income taxes	53,318		34,637		92,082		50,703		Provision for income taxes	94,085		53,318		155,037		92,082
Net income	Net income	193,789		143,939		367,094		222,085		Net income	348,185		193,789		618,533		367,094
Other comprehensive (loss) income, net of tax		(162)		24,253		(7,448)		(7,942)
Other comprehensive loss, net of tax										Other comprehensive loss, net of tax	(33,596)		(162)		(26,726)		(7,448)
Comprehensive income	Comprehensive income	$	193,627	$	168,192	$	359,646	$	214,143	Comprehensive income	$	314,589	$	193,627	$	591,807	$	359,646

Basic net income per share	Basic net income per share	$	1.45	$	1.07	$	2.74	$	1.64	Basic net income per share	$	2.71	$	1.45	$	4.78	$	2.74
Diluted net income per share	Diluted net income per share	$	1.44	$	1.06	$	2.71	$	1.64	Diluted net income per share	$	2.67	$	1.44	$	4.71	$	2.71

Basic weighted average shares outstanding	Basic weighted average shares outstanding	133,275		135,010		133,888		135,241		Basic weighted average shares outstanding	128,405		133,275		129,447		133,888
Dilutive effect of outstanding stock awards	Dilutive effect of outstanding stock awards	1,581		600		1,388		535		Dilutive effect of outstanding stock awards	1,933		1,581		1,771		1,388
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	134,856		135,610		135,276		135,776		Diluted weighted average shares outstanding	130,338		134,856		131,218		135,276

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Stockholders’ Investment

(unaudited, in thousands, except per share data)


		Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment			Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment
Balance December 31, 2020		134,298	$	13,430	$	566,022	$	4,372,833	$	(45,998)	$	(3,026,354)	$	1,879,933
Balance December 31, 2021															Balance December 31, 2021	129,186	$	12,919	$	673,628	$	4,936,861	$	(61,134)	$	(3,540,340)	$	2,021,934
Net income	Net income						173,305						173,305		Net income						270,348						270,348
Foreign currency adjustments	Foreign currency adjustments								(7,286)				(7,286)		Foreign currency adjustments								6,870				6,870
Dividends declared, $0.51 per share							(69,606)						(69,606)
Dividends declared, $0.55 per share															Dividends declared, $0.55 per share						(72,542)						(72,542)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	357	36		(21,805)						18,766		(3,003)		Stock issued for employee benefit plans	418	42		(17,377)						26,239		8,904
Issuance of restricted stock, net of forfeitures		(26)	(3)		3								0
Stock-based compensation expense	Stock-based compensation expense	0	0		23,989						0		23,989		Stock-based compensation expense	—	—		24,606						—		24,606
Repurchase of common stock	Repurchase of common stock	(1,386)	(139)								(129,006)		(129,145)		Repurchase of common stock	(1,593)	(160)								(164,458)		(164,618)
Balance March 31, 2021		133,243	13,324		568,209		4,476,532		(53,284)		(3,136,594)		1,868,187
Balance March 31, 2022															Balance March 31, 2022	128,011	$	12,801	$	680,857	$	5,134,667	$	(54,264)	$	(3,678,559)	$	2,095,502
Net income	Net income						193,789						193,789		Net income						348,185						348,185
Foreign currency adjustments	Foreign currency adjustments								(162)				(162)		Foreign currency adjustments								(33,596)				(33,596)
Dividends declared, $0.51 per share							(69,094)						(69,094)
Dividends declared, $0.55 per share															Dividends declared, $0.55 per share						(71,506)						(71,506)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	250	25		418						16,151		16,594		Stock issued for employee benefit plans	316	31		377						20,478		20,886

Stock-based compensation expense	Stock-based compensation expense	0	0		29,161						0		29,161		Stock-based compensation expense	—	—		27,929						—		27,929
Repurchase of common stock	Repurchase of common stock	(1,358)	(136)								(132,169)		(132,305)		Repurchase of common stock	(3,211)	(320)								(334,665)		(334,985)
Balance June 30, 2021		132,135	$	13,213	$	597,788	$	4,601,227	$	(53,446)	$	(3,252,612)	$	1,906,170
Balance June 30, 2022															Balance June 30, 2022	125,116	$	12,512	$	709,163	$	5,411,346	$	(87,860)	$	(3,992,746)	$	2,052,415


		Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment			Common Shares Outstanding	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Stockholders’ Investment
Balance December 31, 2019		134,895	$	13,490	$	546,646	$	4,144,834	$	(76,149)	$	(2,958,091)	$	1,670,730
Balance December 31, 2020															Balance December 31, 2020	134,298	$	13,430	$	566,022	$	4,372,833	$	(45,998)	$	(3,026,354)	$	1,879,933
Net income	Net income						78,146						78,146		Net income						173,305						173,305
Foreign currency adjustments	Foreign currency adjustments								(32,195)				(32,195)		Foreign currency adjustments								(7,286)				(7,286)
Dividends declared, $0.51 per share	Dividends declared, $0.51 per share						(69,871)						(69,871)		Dividends declared, $0.51 per share						(69,606)						(69,606)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	343	34		(24,192)						21,632		(2,526)		Stock issued for employee benefit plans	357	36		(21,805)						18,766		(3,003)
Issuance of restricted stock, net of forfeitures	Issuance of restricted stock, net of forfeitures	321	32		(32)								0		Issuance of restricted stock, net of forfeitures	(26)	(3)		3								—
Stock-based compensation expense	Stock-based compensation expense	0	0		11,397						0		11,397		Stock-based compensation expense	—	—		23,989						—		23,989
Repurchase of common stock	Repurchase of common stock	(973)	(97)								(68,466)		(68,563)		Repurchase of common stock	(1,386)	(139)								(129,006)		(129,145)
Balance March 31, 2020		134,586	13,459		533,819		4,153,109		(108,344)		(3,004,925)		1,587,118
Balance March 31, 2021															Balance March 31, 2021	133,243	$	13,324	$	568,209	$	4,476,532	$	(53,284)	$	(3,136,594)	$	1,868,187
Net income	Net income						143,939						143,939		Net income						193,789						193,789
Foreign currency adjustments	Foreign currency adjustments								24,253				24,253		Foreign currency adjustments								(162)				(162)
Dividends declared, $0.51 per share	Dividends declared, $0.51 per share						(69,791)						(69,791)		Dividends declared, $0.51 per share						(69,094)						(69,094)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	138	13		(1,165)						9,007		7,855		Stock issued for employee benefit plans	250	25		418						16,151		16,594
Stock-based compensation expense	Stock-based compensation expense	0	0		10,954						0		10,954		Stock-based compensation expense	—	—		29,161						—		29,161
Balance June 30, 2020		134,724	$	13,472	$	543,608	$	4,227,257	$	(84,091)	$	(2,995,918)	$	1,704,328
Repurchase of common stock															Repurchase of common stock	(1,358)	(136)								(132,169)		(132,305)
Balance June 30, 2021															Balance June 30, 2021	132,135	$	13,213	$	597,788	$	4,601,227	$	(53,446)	$	(3,252,612)	$	1,906,170

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)


		Six Months Ended June 30,					Six Months Ended June 30,
		2021		2020			2022		2021
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	367,094	$	222,085	Net income	$	618,533	$	367,094
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Adjustments to reconcile net income to net cash used for operating activities:						Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization	Depreciation and amortization	46,215		50,151		Depreciation and amortization	45,748		46,215
Provision for credit losses	Provision for credit losses	(36)		9,374		Provision for credit losses	(2,142)		(36)
Stock-based compensation	Stock-based compensation	53,150		22,351		Stock-based compensation	52,535		53,150
Deferred income taxes	Deferred income taxes	(2,474)		(729)		Deferred income taxes	(5,844)		(2,474)
Excess tax benefit on stock-based compensation	Excess tax benefit on stock-based compensation	(9,367)		(11,999)		Excess tax benefit on stock-based compensation	(7,553)		(9,367)
Other operating activities	Other operating activities	933		12,341		Other operating activities	(26,356)		933
Changes in operating elements, net of acquisitions:	Changes in operating elements, net of acquisitions:					Changes in operating elements, net of acquisitions:
Receivables	Receivables	(717,340)		(48,937)		Receivables	(378,641)		(717,340)
Contract assets	Contract assets	(96,154)		(22,451)		Contract assets	(65,362)		(96,154)
Prepaid expenses and other	Prepaid expenses and other	(38,971)		8,744		Prepaid expenses and other	(14,170)		(38,971)
Accounts payable and outstanding checks	Accounts payable and outstanding checks	406,875		220,276		Accounts payable and outstanding checks	37,207		406,875
Accrued compensation	Accrued compensation	12,115		12,312		Accrued compensation	(9,673)		12,115
Accrued transportation expense	Accrued transportation expense	73,167		20,284		Accrued transportation expense	62,506		73,167
Accrued income taxes	Accrued income taxes	(4,431)		14,423		Accrued income taxes	(54,964)		(4,431)
Other accrued liabilities	Other accrued liabilities	210		(6,345)		Other accrued liabilities	1,391		210
Other assets and liabilities	Other assets and liabilities	1,612		3,763		Other assets and liabilities	(1,886)		1,612
Net cash provided by operating activities	Net cash provided by operating activities	92,598		505,643		Net cash provided by operating activities	251,329		92,598

INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property and equipment	Purchases of property and equipment	(12,856)		(11,621)		Purchases of property and equipment	(36,781)		(12,856)
Purchases and development of software	Purchases and development of software	(16,981)		(13,418)		Purchases and development of software	(32,622)		(16,981)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(14,749)		(223,230)		Acquisitions, net of cash acquired	—		(14,749)

Other investing activities	Other investing activities	0		5,525		Other investing activities	63,208		—
Net cash used for investing activities	Net cash used for investing activities	(44,586)		(242,744)		Net cash used for investing activities	(6,195)		(44,586)

FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans	Proceeds from stock issued for employee benefit plans	36,674		20,295		Proceeds from stock issued for employee benefit plans	53,574		36,674
Stock tendered for payment of withholding taxes	Stock tendered for payment of withholding taxes	(23,083)		(14,966)		Stock tendered for payment of withholding taxes	(23,784)		(23,083)
Repurchase of common stock	Repurchase of common stock	(262,904)		(68,563)		Repurchase of common stock	(490,699)		(262,904)
Cash dividends	Cash dividends	(139,756)		(137,104)		Cash dividends	(145,268)		(139,756)

Proceeds from long-term borrowings						Proceeds from long-term borrowings	200,000		—

Proceeds from short-term borrowings	Proceeds from short-term borrowings	1,661,000		979,600		Proceeds from short-term borrowings	2,735,000		1,661,000
Payments on short-term borrowings	Payments on short-term borrowings	(1,390,038)		(1,122,600)		Payments on short-term borrowings	(2,586,000)		(1,390,038)

Net cash used for financing activities	Net cash used for financing activities	(118,107)		(343,338)		Net cash used for financing activities	(257,177)		(118,107)

Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(898)		(5,183)		Effect of exchange rates on cash and cash equivalents	(6,445)		(898)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(70,993)		(85,622)		Net change in cash and cash equivalents	(18,488)		(70,993)
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	243,796		447,858		Cash and cash equivalents, beginning of period	257,413		243,796
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	172,803	$	362,236	Cash and cash equivalents, end of period	$	238,925	$	172,803

See accompanying notes to the condensed consolidated financial statements.

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C.H. ROBINSON WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

C.H. Robinson Worldwide, Inc., and our subsidiaries (“the company,” “we,” “us,” or “our”) are a global provider of transportation services and logistics solutions operating through a network of offices located in North America, Europe, Asia, Oceania, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Our reportable segments are NAST and Global Forwarding with all other segments included in All Other and Corporate. The All Other and Corporate reportable segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. For financial information concerning our reportable segments, refer to Note 9, Segment Reporting.

The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

PROPERTY AND EQUIPMENT

During the second quarter, we sold an office building in Kansas City, Missouri, that had been previously classified as held-for-sale assets, for a sales price of $55 million and recognized a gain of $23.5 million on the sale of the building in the three months ended June 30, 2022. We simultaneously entered into an agreement to lease the office building for 10 years.

RECENTLY ISSUED ACCOUNTING STANDARDS

~~In March 2020,~~For the ~~Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,~~ which provides optional practical expedients to simplify accounting for reference rate reform. Amongst other practical expedients, the update allows for contract modifications due to reference rate reform for certain receivables and debt contracts to be accounted for by prospectively adjusting the effective interest rate. The amendments in this ASU are effective for all entities beginning on March 12, 2020, and companies may elect to apply the amendments prospectively through December 31, 2022. As ofthree months ended June 30, ~~2021, we~~2022, there were no recently issued or newly adopted accounting pronouncements that had, or are expected to have, ~~not utilized any of the expedients discussed within this ASU. We will continue~~a material impact to ~~assess~~ our ~~agreements to determine if LIBOR is included and if the expedients will be utilized during the allowed period through December 31, 2022.~~consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS

The change in carrying amount of goodwill is as follows (in thousands):
NAST Global Forwarding All Other and Corporate Total
Balance, December 31, 2020 $ 1,203,972 $ 213,982 $ 69,233 $ 1,487,187
Acquisitions 243 0 10,754 10,997
Foreign currency translation (2,948) (760) (765) (4,473)
Balance June 30, 2021 $ 1,201,267 $ 213,222 $ 79,222 $ 1,493,711


	NAST		Global Forwarding		All Other and Corporate		Total
Balance, December 31, 2021	$	1,196,333	$	210,391	$	78,030	$	1,484,754

Foreign currency translation	(7,319)		(2,907)		(1,673)		(11,899)
Balance, June 30, 2022	$	1,189,014	$	207,484	$	76,357	$	1,472,855

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. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units is less than their respective carrying value (“Step Zero Analysis”). 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”). ~~We considered whether there were any changes in circumstances indicating~~As part of our Step Zero Analysis, we determined that ~~our goodwill might be impaired, including consideration of the impacts of the novel coronavirus~~

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~~(“COVID-19”) on financial markets and our business operations, and determined the~~ more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of June 30, ~~2021.~~2022.

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


		June 30, 2021						December 31, 2020							June 30, 2022						December 31, 2021
		Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net			Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Finite-lived intangibles	Finite-lived intangibles													Finite-lived intangibles
Customer relationships	Customer relationships	$	173,571	$	(78,531)	$	95,040	$	171,684	$	(67,312)	$	104,372	Customer relationships	$	163,580	$	(96,391)	$	67,189	$	169,308	$	(88,302)	$	81,006
Trademarks		0		0		0		1,875		(937)		938
Total finite-lived intangibles		173,571		(78,531)		95,040		173,559		(68,249)		105,310

Indefinite-lived intangibles	Indefinite-lived intangibles													Indefinite-lived intangibles
Trademarks	Trademarks	8,600		—		8,600		8,600		—		8,600		Trademarks	8,600		—		8,600		8,600		—		8,600
Total intangibles	Total intangibles	$	182,171	$	(78,531)	$	103,640	$	182,159	$	(68,249)	$	113,910	Total intangibles	$	172,180	$	(96,391)	$	75,789	$	177,908	$	(88,302)	$	89,606

Amortization expense for other intangible assets is as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Amortization expense $ 6,200 $ 9,655 $ 13,286 $ 18,031


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Amortization expense	$	5,957	$	6,200	$	11,991	$	13,286

Finite-lived intangible assets, by reportable segment, as of June 30, ~~2021,~~2022, will be amortized over their remaining lives as follows (in thousands):


		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Remaining 2021		$	4,048	$	7,752	$	597	$	12,397
2022		8,096		15,505		1,195		24,796
Remaining 2022										Remaining 2022	$	4,048	$	7,107	$	529	$	11,684
2023	2023	8,096		12,744		1,195		22,035		2023	8,096		11,685		1,058		20,839
2024	2024	7,996		3,867		1,195		13,058		2024	7,990		3,521		1,058		12,569
2025	2025	7,857		2,530		1,195		11,582		2025	7,857		2,606		1,058		11,521
2026										2026	7,857		—		723		8,580
Thereafter	Thereafter	9,167		411		1,594		11,172		Thereafter	1,310		—		686		1,996
Total	Total							$	95,040	Total							$	67,189

NOTE 3. FAIR VALUE MEASUREMENT

Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

•Level 1 — Quoted market prices in active markets for identical assets or liabilities.

•Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data.

•Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

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 0no Level 3 assets or liabilities as of and during the periods ended June 30, ~~2021~~2022 and December 31, ~~2020.~~2021. There were no transfers between levels during the period.

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NOTE 4. FINANCING ARRANGEMENTS

The components of our short-term and long-term debt and the associated interest rates were as follows (dollars in thousands):


		Average interest rate as of					Carrying value as of					Average interest rate as of					Carrying value as of
		June 30, 2021		December 31, 2020		Maturity	June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021		Maturity	June 30, 2022		December 31, 2021
Revolving credit facility	Revolving credit facility	1.22	%	0	%	October 2023	$	271,000	$	0	Revolving credit facility	2.82	%	1.23	%	October 2023	$	174,000	$	525,000
364-day revolving credit facility											364-day revolving credit facility	2.03	%	—		May 2023	500,000		—
Senior Notes, Series A	Senior Notes, Series A	3.97	%	3.97	%	August 2023	175,000		175,000		Senior Notes, Series A	3.97	%	3.97	%	August 2023	175,000		175,000
Senior Notes, Series B	Senior Notes, Series B	4.26	%	4.26	%	August 2028	150,000		150,000		Senior Notes, Series B	4.26	%	4.26	%	August 2028	150,000		150,000
Senior Notes, Series C	Senior Notes, Series C	4.60	%	4.60	%	August 2033	175,000		175,000		Senior Notes, Series C	4.60	%	4.60	%	August 2033	175,000		175,000

Combinex credit facility		2.14	%	0	%	January 2027	2,280		0
Receivables securitization facility (1)											Receivables securitization facility (1)	2.26	%	0.73	%	November 2023	499,448		299,481
Senior Notes (1)	Senior Notes (1)	4.20	%	4.20	%	April 2028	593,733		593,301		Senior Notes (1)	4.20	%	4.20	%	April 2028	594,607		594,168
Total debt	Total debt						1,367,013		1,093,301		Total debt						2,268,055		1,918,649
Less: Current maturities and short-term borrowing	Less: Current maturities and short-term borrowing						(271,215)		0		Less: Current maturities and short-term borrowing						(674,000)		(525,000)
Long-term debt	Long-term debt						$	1,095,798	$	1,093,301	Long-term debt						$	1,594,055	$	1,393,649

(1) Net of unamortized discounts and issuance costs.

SENIOR UNSECURED REVOLVING CREDIT FACILITY

We have a senior unsecured revolving credit facility (the ~~"Credit Agreement"~~“Credit Agreement”) with a total availability of $1 billion and a maturity date of October 24, 2023. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of applicable LIBOR plus 1.13 percent). In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility ranging from 0.075 percent to 0.200 percent. The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt.

The Credit 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. The Credit Agreement also contains customary events of default. ~~If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent may declare any outstanding obligations under~~On November 19, 2021, we amended the Credit Agreement to ~~be immediately due~~among other things, facilitate the terms of the Receivables Securitization Facility and ~~payable.~~include provisions for benchmark replacements to LIBOR.

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. Borrowings under the 364-day Credit Agreement generally bear interest at an alternate base rate plus a margin or a term SOFR-based rate plus a margin of 0.625 percent to 1.25 percent. The alternate base rate is determined by a pricing schedule (which is the highest of (a) 0 percent, (b) U.S. Bank’s prime rate, (c) the federal funds effective rate plus 0.50 percent, or (d) a term SOFR-based rate plus 1.00 percent). In addition, ~~if we become~~there is a commitment fee on the ~~subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations~~aggregate unused commitments under the 364-day Credit Agreement ~~will automatically become immediately due~~ranging from 0.05 percent to 0.175 percent per annum. The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the debt.

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

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NOTE PURCHASE AGREEMENT

On August 23, 2013, we entered into a Note Purchase Agreement with certain institutional investors (the “Purchasers”). On August 27, 2013, the Purchasers purchased an aggregate principal amount of $500 million of our Senior Notes, Series A, Senior Notes Series B, and Senior Notes Series C (collectively, the “Notes”). Interest on the Notes is payable semi-annually in arrears. The fair value of the Notes approximated ~~$549.3~~$477.9 million aton June 30, ~~2021.~~2022. We estimate the fair value of the Notes primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering our own risk. If the Notes were recorded at fair value, they would be classified as Level 2.

The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.00 to 1.00, a minimum interest coverage ratio of 2.00 to 1.00, and a maximum consolidated priority debt to consolidated total asset ratio of 15 percent.

The Note Purchase Agreement provides for customary events of default. 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. The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed by C.H. Robinson Company, a Delaware corporation and a wholly-owned subsidiary of the company, and by C.H. Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company.

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~~COMBINEX CREDIT FACILITY~~

On ~~June 3,~~November 19, 2021, we ~~assumed~~amended the Note Purchase Agreement to among other things, facilitate the terms of the Receivables Securitization Facility.

U.S. TRADE ACCOUNTS RECEIVABLE SECURITIZATION

On November 19, 2021, we entered into a ~~credit~~receivables purchase agreement and related transaction documents with Bank of America, N.A. and Wells Fargo Bank, N.A. to provide a receivables securitization facility ~~as part~~(the “Receivables Securitization Facility”). The Receivables Securitization Facility is based on the securitization of our ~~acquisition of Combinex Holding B.V. (“Combinex”)~~U.S. trade accounts receivable with a total availability of ~~approximately $3.6~~$500 million ~~and a maturity date~~as of ~~January 18, 2027. Borrowings~~June 30, 2022. The interest rate on borrowings under the ~~Combinex credit facility bear~~Receivables Securitization Facility is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus a margin. There is also a commitment fee we are required to pay on any unused portion of the facility. The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties and is recorded as a noncurrent liability as of June 30, 2022. The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest ~~at 2.14 percent. For more information regarding~~rate floats. We consider these borrowings to be a Level 2 financial liability. Borrowings on the ~~Combinex acquisition, refer~~Receivables Securitization Facility are included within proceeds on long-term 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 ~~Note 8,~~ 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.

~~Acquisitions~~.

SENIOR NOTES

On April 9, 2018, we issued senior unsecured notes ("(“Senior ~~Notes"~~Notes”) through a public offering. The Senior Notes bear an annual interest rate of 4.20 percent payable semi-annually on April 15 and October 15, until maturity on April 15, 2028. 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 ~~$686.0~~$577.0 million as of June 30, ~~2021,~~2022, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was ~~$593.7~~$594.6 million as of June 30, ~~2021.~~2022.

We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes. Upon the occurrence of a “change of control triggering event” as defined in the Senior Notes (generally, a change of control of us accompanied by a reduction in the credit rating for the Senior Notes), we will generally be required to make an offer to repurchase the Senior Notes from holders at 101 percent of their principal amount plus accrued and unpaid interest to the date of repurchase.

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The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens or enter into sale and leaseback transactions above certain limits; and consolidate, or merge or transfer substantially all of our assets and those of our subsidiaries on a consolidated basis. It also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include among other things nonpayment, breach of covenants in the indenture, and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing with respect to the Senior Notes, the trustee or holders of at least 25 percent in principal amount outstanding of the Senior Notes may declare the principal and the accrued and unpaid interest, if any, on all of the outstanding Senior Notes to be due and payable. These covenants and events of default are subject to a number of important qualifications, limitations, and exceptions that are described in the indenture. The indenture does not contain any financial ratios or specified levels of net worth or liquidity to which we must adhere.

In addition to the above financing agreements, we have a $15 million discretionary line of credit with USU.S. Bank of which $8$7.9 million is currently utilized for standby letters of credit related to insurance collateral as of June 30, ~~2021.~~2022. These standby letters of credit are renewed annually and were undrawn as of June 30, ~~2021.~~2022.

We estimate the fair value of our financing arrangements 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 risk. These are considered Level 2 financial liabilities.

~~U.S. TRADE ACCOUNTS RECEIVABLE SECURITIZATION~~

We had a receivables securitization facility (the “Receivables Securitization Facility”) that expired on December 17, 2020 and was not renewed. The Receivables Securitization Facility was based on the securitization of certain of our U.S. trade accounts receivable and provided funding of up to $250 million. The trade accounts receivable under the facility were owned by C.H. Robinson Receivables LLC and were not available to the creditors of C.H. Robinson Worldwide, Inc., and our subsidiaries. The interest rate on borrowings under the Receivables Securitization Facility was based on one-month LIBOR plus 0.65 percent. There was also a commitment fee we were required to pay on any unused portion of the facility.

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NOTE 5. INCOME TAXES

~~Our effective tax rate~~A reconciliation of the provision for the three months ended June 30, 2021 and 2020 was 21.6 percent and 19.4 percent, respectively, and our effective tax rate for the six months ended June 30, 2021 and 2020 was 20.1 percent and 18.6 percent, respectively. The effective income ~~tax rate for the three months ended June 30, 2021 was higher than~~taxes using the statutory federal income tax rate ~~primarily due~~ to ~~state income taxes, net of federal benefit which increased~~ our ~~effective tax rate by 2.0 percentage points. This impact on the tax rate was partially offset by foreign tax impacts. The~~ effective income tax rate for the six months ended June 30, 2021 was lower than the statutory federal income tax rate primarily due to share-based payment awards, which reduced the effective tax rate by 1.5 percentage points, the combined tax impact of Global Intangible Low-tax Income ("GILTI") and Foreign Derived Intangible Income ("FDII"), which reduced the effective tax rate by 0.6 percentage points, and foreign tax impacts, which reduced the effective tax rate by 0.5 percentage points. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective tax rate. For the three and six months ended June 30, 2020, our effective tax rate was lower than the statutory federal income tax rate primarily due to the tax impact of share-based payment awards, including the tax benefit from the delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in 2000, which reduced the effective tax rate by 4.5 percentage points2022 and ~~4.2 percentage points, respectively. This impact was partially offset by state income tax expense, net of federal benefit, which increased the effective tax rate.~~2021, is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	2.0		2.0		1.7		2.1
Share based payment awards	(0.6)		(0.1)		(0.9)		(1.5)
Foreign tax credits	(1.4)		(1.2)		(1.1)		(0.5)
Other U.S. tax credits and incentives	(0.3)		(0.8)		(1.0)		(0.9)
Foreign	(0.5)		2.0		(0.5)		0.2
Other	1.1		(1.3)		0.8		(0.3)
Effective income tax rate	21.3	%	21.6	%	20.0	%	20.1	%

We have asserted that the unremitted earnings of a limited number of our foreign subsidiaries are permanently reinvested to support expansion of our international business. If we repatriated all foreign earnings that are considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $2.0 million as of June 30, ~~2021.~~2022.

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic. The CARES Act allowed for a deferral of the employer share of federal payroll taxes otherwise due through December 31, 2020. 50 percent of the deferred amount is due December 31, 2021 and the remaining 50 percent is due December 31, 2022. This provision allowed us to defer certain federal payroll deposits and invest this cash back into the business without any interest cost. The CARES Act also provided for a tax credit related to wages and health benefits provided to an employee whose work from March 17, 2020 through June 30, 2021 was impacted by COVID-19. The Consolidated Appropriations Act signed into law on December 27, 2020, extended the tax credit through June 30, 2021, and increased the maximum credit per employee from $5,000 per year in 2020 to $7,000 per quarter in 2021. Through June 30, 2021, wetaxes. We have recognized a payroll deferral ~~and tax credit~~ of ~~$28.5~~$14.7 million ~~and $0.7 million, respectively,~~ under the CARES Act ~~and The Consolidated Appropriations Act. We will continue evaluating the impact of both acts over the remainder of 2021.~~due on December 31, 2022.

As of June 30, ~~2021,~~2022, we have ~~$43.0~~$41.0 million of unrecognized tax benefits and related interest and penalties. It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities. The total liability for unrecognized tax benefits is expected to decrease by approximately ~~$6.2~~$2.4 million in the next 12 months due to the lapsing of statutes of limitations. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income tax returns before ~~2014.~~2015. We are currently under an Internal Revenue Service audit for 2015, 2016 and 2017 tax years.

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NOTE 6. STOCK AWARD PLANS

Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests. 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 June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Stock options	Stock options	$	4,027	$	5,025	$	7,994	$	10,038	Stock options	$	3,263	$	4,027	$	6,482	$	7,994
Stock awards	Stock awards	24,401		5,291		43,349		10,694		Stock awards	23,887		24,401		43,950		43,349
Company expense on ESPP discount	Company expense on ESPP discount	733		638		1,807		1,619		Company expense on ESPP discount	779		733		2,103		1,807
Total stock-based compensation expense	Total stock-based compensation expense	$	29,161	$	10,954	$	53,150	$	22,351	Total stock-based compensation expense	$	27,929	$	29,161	$	52,535	$	53,150

On May ~~9, 2019,~~5, 2022, our shareholders approved ~~an amendment and restatement of our 2013~~a 2022 Equity Incentive Plan (the “Plan”) ~~to increase~~and authorized an initial 4,261,884 shares for issuance of awards thereunder. Upon approval of the ~~number of shares authorized for award by 4,000,000 shares.~~Plan, no new awards may be made under our 2013 Equity Incentive Plan. The Plan allows us to grant certain stock awards, including stock options at fair market value, performance-based restricted stock units and ~~performance~~ shares, and time-based restricted stock units, to our key employees and ~~outside~~non-employee directors. ~~A maximum of 17,041,803 shares can be granted under this plan following the amendment and restatement.~~ Approximately ~~1,798,328~~4,424,631 shares were available for stock awards under the ~~plan~~Plan as of June 30, ~~2021.~~2022. Shares subject to awards

~~Table~~ under the Plan or certain of ~~Contents~~

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.~~Plan.

Stock Options - We have awarded stock options to certain key employees through 2020. The fair value of these options was established based on the market price on the date of grant calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates were the primary reasons for changes in the fair value. These grants are being expensed based on the terms of the awards. As of June 30, ~~2021,~~2022, unrecognized compensation expense related to stock options was ~~$34.8~~$20.0 million. The amount of future expense to be recognized will be based on the passage of time and the employees' continued employment.

Stock Awards - We have awarded performance-based restricted shares, ~~through 2020. We have also awarded~~ performance-based restricted stock units (“PSUs”), and time-based restricted stock ~~units to certain key employees and non-employee directors. Performance-based~~units. Nearly all of our awards ~~are subject to certain vesting requirements based on our earnings and adjusted gross profit growth. Time-based awards vest primarily based on the employee's continued employment. The awards also~~ contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for any post-vesting holding restrictions. The discounts on outstanding grants with post-vesting holding restrictions vary from 12 percent to 24 percent and are calculated using the Black-Scholes option pricing model-protective put method. ~~Differences~~The duration of the restriction period to sell or transfer vested awards, changes in ~~post-holding restrictions,~~the measured stock price volatility and changes in interest rates are the primary reasons for changes in the ~~discount.~~discounts. These grants are being expensed based on the terms of the awards.

Performance-based Awards

We ~~granted 280,255~~have awarded performance-based restricted shares through 2020 to certain key employees and non-employee directors. These awards vest over a five-year period based on the company’s earnings growth. Beginning in 2021, we have awarded annually PSUs to certain key employees. These PSUs vest over a three-year period based on the company's cumulative three-year earnings per share growth and annual adjusted gross profit growth. These PSUs contain an upside opportunity of up to 200 percent of target contingent upon obtaining certain earnings per share and adjusted gross profit growth targets.

Time-based Awards

We award time-based restricted stock units to certain key employees and ~~619,689~~non-employee directors. 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. These awards vest primarily based on the passage of time and the employee’s continued employment. These grants are being expensed based on the terms of the awards.

We granted 330,072 PSUs and 634,118 time-based restricted stock units on February ~~3, 2021.~~9, 2022. The ~~performance-based~~PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of ~~$74.76~~$76.74 and ~~$71.28, respectively, and~~$74.67, respectively. Time-based awards are eligible to vest over a three-year period with a first vesting date of December 31, 2021. The performance-based awards vest based on our earnings and adjusted gross profit growth and include an upside opportunity of 200 percent upon attaining established earnings and adjusted gross profit growth targets.2022.

We have also issued restricted stock units to certain key employees and non-employee directors, which are fully vested upon issuance. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned.

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As of June 30, ~~2021,~~2022, there was unrecognized compensation expense of ~~$131.9~~$144.3 million related to previously granted ~~full value~~stock awards assuming maximum achievement is obtained on our performance-based awards. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings and adjusted gross profit growth, and certain other conditions.

Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan ~~("ESPP"~~(“ESPP”) allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. ~~Purchase~~The purchase price is determined using the closing price on the last day of each quarter discounted by 15 percent. Shares vest immediately. The following is a summary of the employee stock purchase plan activity (dollars in thousands):

Three Months Ended June 30, 2021
Shares purchased
by employees
Aggregate cost
to employees
Expense recognized
by the company
52,157 $ 4,153 $ 733


Three Months Ended June 30, 2022
Shares purchased by employees	Aggregate cost to employees		Expense recognized by the company
51,276	$	4,419	$	779

NOTE 7. LITIGATION

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our condensed consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

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NOTE 8. ACQUISITIONS

Combinex Holding B.V.

On June 3, 2021, we acquired all of the outstanding shares of Combinex to strengthen our European road transportation presence. Total purchase consideration, net of cash acquired was $14.7 million, which was paid in cash.

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):


	Estimated Life (years)
Customer relationships	7	$	3,942

There was $10.8 million of goodwill recorded related to the acquisition of Combinex. The Combinex goodwill is a result of acquiring and retaining the Combinex workforce and expected synergies from integrating its business into ours. Purchase accounting is considered ~~preliminary.~~complete. The goodwill will not be deductible for tax purposes. The results of operations of Combinex have been included as part of the All Other and Corporate segment in our consolidated financial statements since June 3, 2021.

~~Prime Distribution Services~~

~~The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the acquisition of Prime Distribution.~~


~~Current assets~~	$	~~8,879~~
~~Property and equipment~~	~~7,356~~
~~Right-of-use lease assets~~	~~35,017~~
~~Other intangible assets~~	~~55,000~~
~~Goodwill~~	~~176,727~~
~~Total assets~~	~~282,979~~

~~Current liabilities~~	~~12,243~~
~~Lease liabilities~~	~~35,017~~
~~Deferred tax liabilities~~	~~13,001~~
~~Net assets acquired~~	$	~~222,718~~

~~Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):~~
Estimated Life (years)
Customer relationships 7 $ 55,000

There was $176.7 million of goodwill recorded related to the acquisition of Prime Distribution. The Prime Distribution goodwill is a result of acquiring and retaining the Prime Distribution workforce and expected synergies from integrating its business into ours. Purchase accounting is considered complete. The goodwill will not be deductible for tax purposes. The acquisition was effective as of February 29, 2020, and therefore the results of operations of Prime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since March 1, 2020.

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NOTE 9. SEGMENT REPORTING

Our reportable segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers. We identify 2 reportable segments in addition to All Other and Corporate as summarized below:

•North American Surface Transportation—NAST provides freight transportation services across North America through a network of offices in the United States, Canada, and Mexico. The primary services provided by NAST include truckload and less than truckload (“LTL”) transportation services.

•Global Forwarding—Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Oceania, and South America and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

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•All Other and Corporate—All Other and Corporate includes our Robinson Fresh and Managed Services segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses. Robinson Fresh provides sourcing services including the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items. Managed Services provides Transportation Management Services, or Managed TMS®. Other Surface Transportation revenues are primarily earned by Europe Surface Transportation. Europe Surface Transportation provides transportation and logistics services including truckload and groupage services across Europe.

The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Chief Executive Officer. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting ~~policies.~~policies located in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2021. We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments.

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Reportable segment information as of, and for the three and six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, is as follows (dollars in thousands):


	NAST		Global Forwarding		All Other and Corporate		Consolidated
Three Months Ended June 30, 2022
Total revenues	$	4,147,046	$	2,093,190	$	558,239	$	6,798,475
Income from operations	276,499		167,557		25,609		469,665
Depreciation and amortization	6,123		5,471		11,668		23,262
Total assets(1)	3,688,215		2,851,114		918,110		7,457,439
Average headcount	7,552		5,759		4,582		17,893

	NAST		Global Forwarding		All Other and Corporate		Consolidated
Three Months Ended June 30, 2021
Total revenues	$	3,585,481	$	1,450,794	$	496,451	$	5,532,726
Income from operations	151,092		108,212		1,300		260,604
Depreciation and amortization	6,534		6,276		10,127		22,937
Total assets(1)	3,278,540		1,852,473		775,551		5,906,564
Average headcount	6,580		4,909		3,916		15,405

NAST Global Forwarding All Other and Corporate Consolidated
Three Months Ended June 30, 2021
Total revenues $ 3,585,481 $ 1,450,794 $ 496,451 $ 5,532,726
Income from operations 151,092 108,212 1,300 260,604
Depreciation and amortization 6,534 6,276 10,127 22,937
Total assets(1)
3,278,540 1,852,473 775,551 5,906,564
Average headcount 6,580 4,909 3,916 15,405
NAST Global Forwarding All Other and Corporate Consolidated
Three Months Ended June 30, 2020
Total revenues $ 2,475,292 $ 707,820 $ 444,734 $ 3,627,846
Income (loss) from operations 136,846 58,775 (6,834) 188,787
Depreciation and amortization 7,201 9,206 9,351 25,758
Total assets(1)
2,793,290 1,029,203 1,003,196 4,825,689
Average headcount 6,960 4,726 3,608 15,294
NAST Global Forwarding All Other and Corporate Consolidated
Six Months Ended June 30, 2021
Total revenues $ 6,796,904 $ 2,606,833 $ 932,858 $ 10,336,595
Income (loss) from operations 287,876 198,801 (2,744) 483,933
Depreciation and amortization 13,159 11,925 21,131 46,215
Total assets(1)
3,278,540 1,852,473 775,551 5,906,564
Average headcount 6,578 4,832 3,823 15,233
NAST Global Forwarding All Other and Corporate Consolidated
Six Months Ended June 30, 2020
Total revenues $ 5,299,037 $ 1,238,204 $ 895,613 $ 7,432,854
Income (loss) from operations 235,372 70,734 (7,879) 298,227
Depreciation and amortization 12,455 18,355 19,341 50,151
Total assets(1)
2,793,290 1,029,203 1,003,196 4,825,689
Average headcount 6,981 4,763 3,594 15,338


	NAST		Global Forwarding		All Other and Corporate		Consolidated
Six Months Ended June 30, 2022
Total revenues	$	8,261,935	$	4,287,587	$	1,064,906	$	13,614,428
Income from operations	458,853		335,195		21,091		815,139
Depreciation and amortization	12,362		11,026		22,360		45,748
Total assets(1)	3,688,215		2,851,114		918,110		7,457,439
Average headcount	7,442		5,690		4,422		17,554

	NAST		Global Forwarding		All Other and Corporate		Consolidated
Six Months Ended June 30, 2021
Total revenues	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595
Income (loss) from operations	287,876		198,801		(2,744)		483,933
Depreciation and amortization	13,159		11,925		21,131		46,215
Total assets(1)	3,278,540		1,852,473		775,551		5,906,564
Average headcount	6,578		4,832		3,823		15,233

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

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NOTE 10. REVENUE FROM CONTRACTS WITH CUSTOMERS

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 (in thousands):


		Three Months Ended June 30, 2021									Three Months Ended June 30, 2022
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	3,585,481	$	1,450,794	$	204,173	$	5,240,448	Transportation and logistics services(1)	$	4,147,046	$	2,093,190	$	225,406	$	6,465,642
Sourcing(2)	Sourcing(2)	0		0		292,278		292,278		Sourcing(2)	—		—		332,833		332,833
Total	Total	$	3,585,481	$	1,450,794	$	496,451	$	5,532,726	Total	$	4,147,046	$	2,093,190	$	558,239	$	6,798,475

		Three Months Ended June 30, 2020									Three Months Ended June 30, 2021
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	2,475,292	$	707,820	$	165,499	$	3,348,611	Transportation and logistics services(1)	$	3,585,481	$	1,450,794	$	204,173	$	5,240,448
Sourcing(2)	Sourcing(2)	0		0		279,235		279,235		Sourcing(2)	—		—		292,278		292,278
Total	Total	$	2,475,292	$	707,820	$	444,734	$	3,627,846	Total	$	3,585,481	$	1,450,794	$	496,451	$	5,532,726


		Six Months Ended June 30, 2021									Six Months Ended June 30, 2022
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	6,796,904	$	2,606,833	$	396,938	$	9,800,675	Transportation and logistics services(1)	$	8,261,935	$	4,287,587	$	444,471	$	12,993,993
Sourcing(2)	Sourcing(2)	0		0		535,920		535,920		Sourcing(2)	—		—		620,435		620,435
Total	Total	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595	Total	$	8,261,935	$	4,287,587	$	1,064,906	$	13,614,428

		Six Months Ended June 30, 2020									Six Months Ended June 30, 2021
		NAST		Global Forwarding		All Other and Corporate		Total			NAST		Global Forwarding		All Other and Corporate		Total
Major Service Lines	Major Service Lines									Major Service Lines
Transportation and logistics services(1)	Transportation and logistics services(1)	$	5,299,037	$	1,238,204	$	353,488	$	6,890,729	Transportation and logistics services(1)	$	6,796,904	$	2,606,833	$	396,938	$	9,800,675
Sourcing(2)	Sourcing(2)	0		0		542,125		542,125		Sourcing(2)	—		—		535,920		535,920
Total	Total	$	5,299,037	$	1,238,204	$	895,613	$	7,432,854	Total	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595

(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 customer prior to the completion of our performance obligation and as such contract liabilities, as of June 30, ~~2021,~~2022, and revenue recognized in the three and six months ended June 30, ~~2021~~2022 and ~~2020~~2021 resulting from contract liabilities, were not significant. Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon shipments in-transit at period ~~end.~~end and the timing of customer invoicing.

NOTE 11. LEASES

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. 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. Accordingly, these agreements are not considered leases. In addition, we have made a policy election to not apply the guidance of ASC 842 to leases with a term of 12 months or less as allowed by the standard. These leases are recognized as expense on a straight-line basis over the lease term.

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Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities. 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 aton 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 aton the commencement date as the total lease liability plus prepaid ~~rents and less any deferred rent liability that existed under ASC 840,~~ ~~Leases,~~ ~~upon transition.~~rents. As ~~most of~~ 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. The incremental borrowing rate is influenced by market interest rates, our credit rating, and lease term and as such, may differ for individual leases.

Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants. 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. 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, ~~2021.~~2022.

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
Lease Costs	Lease Costs	2021		2020		2021		2020		Lease Costs	2022		2021		2022		2021
Operating lease expense	Operating lease expense	$	21,459	$	21,508	$	43,021	$	41,482	Operating lease expense	$	23,082	$	21,459	$	44,727	$	43,021
Short-term lease expense	Short-term lease expense	1,462		4,027		3,063		6,599		Short-term lease expense	1,137		1,462		3,597		3,063
Total lease expense	Total lease expense	$	22,921	$	25,535	$	46,084	$	48,081	Total lease expense	$	24,219	$	22,921	$	48,324	$	46,084


		Six Months Ended June 30,					Six Months Ended June 30,
Other Lease Information	Other Lease Information	2021		2020		Other Lease Information	2022		2021
Operating cash flows from operating leases	Operating cash flows from operating leases	$	42,495	$	38,655	Operating cash flows from operating leases	$	43,937	$	42,495
Right-of-use lease assets obtained in exchange for new lease liabilities	Right-of-use lease assets obtained in exchange for new lease liabilities	18,299		70,993		Right-of-use lease assets obtained in exchange for new lease liabilities	87,554		18,299


Lease Term and Discount Rate	As of June 30, ~~2021~~2022
Weighted average remaining lease term (in years)(1)	~~6.6~~6.5
Weighted average discount rate	~~3.1~~3.0	%

(1) The weighted average remaining lease term is significantly impacted by a 15-year lease related to office space in Chicago, IL, ~~that~~which commenced in 2018. Excluding this lease, the weighted average remaining lease term of our agreements is ~~4.5~~5.1 years.

The maturities of lease liabilities as of June 30, ~~2021,~~2022, were as follows (in thousands):
Maturity of Lease Liabilities Operating Leases
Remaining 2021 $ 35,276
2022 75,020
2023 61,688
2024 41,950
2025 31,565
Thereafter 107,570
Total lease payments 353,069
Less: Interest (38,142)
Present value of lease liabilities $ 314,927


Maturity of Lease Liabilities	Operating Leases
Remaining 2022	$	38,669
2023	84,653
2024	63,944
2025	47,866
2026	38,314
Thereafter	121,832
Total lease payments	395,278
Less: Interest	(41,273)
Present value of lease liabilities	$	354,005

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In addition to minimum lease payments, we are typically responsible under our lease agreements to pay our pro rata share of maintenance expenses, common charges, and real estate taxes of the buildings in which we lease space. Under ASC 842, we have elected to account for non-lease components such as common area maintenance and parking as a single lease component.

NOTE 12. ALLOWANCE FOR CREDIT LOSSES

Our allowance for credit losses is computed using a number of factors including our past credit loss experience, the aging of amounts due from our customers, ~~and~~ our customers' credit ratings, in addition to other ~~customer specific~~customer-specific factors. We have also ~~assessed~~considered recent trends and developments related to the current macroeconomic environment ~~including the impact of the COVID-19 pandemic, to determine~~in determining our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on contract assets was not significant.

A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the six months ended June 30, ~~2021:~~2022 (in thousands):


Balance, December 31, ~~2020~~2021	$	~~38,113~~41,542
Provision	~~(607)~~(2,411)
Write-offs	~~(2,076)~~(1,613)
Balance, June 30, ~~2021~~2022	$	~~35,430~~37,518

Recoveries of amounts previously written off were not significant for the three and six months ended June 30, ~~2021.~~2022.

NOTE 13. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss is included in Stockholders' investment on our condensed consolidated balance sheets. The recorded balance aton June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, was ~~$53.4~~$87.9 million and ~~$46.0~~$61.1 million, respectively. ~~Accumulated other comprehensive loss~~The recorded balance on June 30, 2022 and December 31, 2021 is comprised solely of foreign currency adjustments, ~~at June 30, 2021 and December 31, 2020.~~including foreign currency translation.

Other comprehensive loss ~~and income~~ was ~~$0.2~~$33.6 million ~~and $24.3~~compared to other comprehensive loss of $0.2 million for the three months ended June 30, 2022 and 2021, respectively. Both periods were driven primarily by fluctuations in the Singapore Dollar, the Australian Dollar, and ~~2020, respectively.~~ the Yuan.

Other comprehensive loss was ~~$7.4~~$26.7 million ~~and $7.9~~compared to other comprehensive loss of $7.4 million for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Other comprehensive ~~loss~~income and ~~income~~loss consisted of foreign currency adjustments, including foreign currency translation, for the three and six months ended June 30, ~~2021~~2022 and ~~2020.~~2021. Both periods were driven primarily by fluctuations in the Singapore Dollar, Yuan, and the Australian Dollar.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.

FORWARD-LOOKING INFORMATION

Our ~~quarterly report~~Quarterly Report on Form 10-Q, including this discussion and analysis of our financial condition and results of operations and our disclosures about market risk, contains certain “forward-looking statements.” These statements represent our expectations, beliefs, intentions, or strategies concerning future events that, by their nature, involve risks and uncertainties. Forward-looking statements include, among others, statements about our future performance, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions or dispositions, the expected impact of recently issued accounting pronouncements, and the outcome or effects of litigation. Risks that could cause actual results to differ materially from our current expectations include, but are not limited to, changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with significant disruptions in the transportation industry; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers; risks with reliance on technology to operate our business; cyber-security related risks; risks associated with operations outside of the United States; our ability to identify or complete suitable acquisitions;our ability to successfully integrate the operations of acquired companies with our historic operations; risks associated with litigation, including contingent auto liability and insurance coverage; risks ~~related to the elimination of LIBOR; risks~~ associated with the potential impact of changes in government regulations; our ability to hire and retain a sufficient number of qualified personnel;risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of war on the economy; changes to our capital structure; changes due to catastrophic events including pandemics such as COVID-19, and other risks and uncertainties, detailed in our Annual and Quarterly Reports. Therefore, actual results may differ materially from our expectations based on these and other risks and uncertainties, including those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the Securities and Exchange Commission on February ~~19, 2021~~23, 2022 as well as the updates to these risk factors included in Part II—“Item 1A, Risk Factors,” herein.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

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OVERVIEW

C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the world's largest logistics platforms. Our mission is to improve the world's supply chains through our people, processes, and technology by delivering exceptional value to our customers and suppliers. We provide freight transportation services and logistics solutions to companies of all sizes in a wide variety of industries. We operate through a network of offices in North America, Europe, Asia, Oceania, and South America. We offer a global suite of services using tailored, market-leading solutions built by and for supply chain experts. Our global network of supply chain experts work with our customers to drive better supply chain outcomes by leveraging our experience, data, digital solutions, and scale.

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Our adjusted gross profit and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profit is calculated as gross profit excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. Adjusted gross profit margin is calculated as adjusted gross profit divided by total revenues. We believe adjusted gross profit and adjusted gross profit margin are useful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profit to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profit and adjusted gross profit margin. The reconciliation of gross profit to adjusted gross profit and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Revenues:
Transportation $ 5,240,448 $ 3,348,611 $ 9,800,675 $ 6,890,729
Sourcing 292,278 279,235 535,920 542,125
Total revenues 5,532,726 3,627,846 10,336,595 7,432,854
Costs and expenses:
Purchased transportation and related services 4,519,305 2,762,590 8,400,590 5,762,703
Purchased products sourced for resale 264,245 250,803 484,449 487,745
Direct internally developed software amortization 4,802 3,991 9,449 7,736
Total direct costs 4,788,352 3,017,384 8,894,488 6,258,184
Gross profit / Gross profit margin 744,374 13.5 % 610,462 16.8 % 1,442,107 14.0 % 1,174,670 15.8 %
Plus: Direct internally developed software amortization 4,802 3,991 9,449 7,736
Adjusted gross profit / Adjusted gross profit margin $ 749,176 13.5 % $ 614,453 16.9 % $ 1,451,556 14.0 % $ 1,182,406 15.9 %


	Three Months Ended June 30,								Six Months Ended June 30,
	2022				2021				2022				2021
Revenues:
Transportation	$	6,465,642			$	5,240,448			$	12,993,993			$	9,800,675
Sourcing	332,833				292,278				620,435				535,920
Total revenues	6,798,475				5,532,726				13,614,428				10,336,595
Costs and expenses:
Purchased transportation and related services	5,466,874				4,519,305				11,117,098				8,400,590
Purchased products sourced for resale	299,988				264,245				559,521				484,449
Direct internally developed software amortization	6,640				4,802				12,374				9,449
Total direct costs	5,773,502				4,788,352				11,688,993				8,894,488
Gross profit / Gross profit margin	1,024,973		15.1	%	744,374		13.5	%	1,925,435		14.1	%	1,442,107		14.0	%
Plus: Direct internally developed software amortization	6,640				4,802				12,374				9,449
Adjusted gross profit / Adjusted gross profit margin	$	1,031,613	15.2	%	$	749,176	13.5	%	$	1,937,809	14.2	%	$	1,451,556	14.0	%

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profit. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profit, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2021			2020			2021			2020				2022			2021			2022			2021

Total revenues	Total revenues	$	5,532,726		$	3,627,846		$	10,336,595		$	7,432,854		Total revenues	$	6,798,475		$	5,532,726		$	13,614,428		$	10,336,595
Operating income	Operating income	260,604			188,787			483,933			298,227			Operating income	469,665			260,604			815,139			483,933
Operating margin	Operating margin	4.7		%	5.2		%	4.7		%	4.0		%	Operating margin	6.9		%	4.7		%	6.0		%	4.7		%

Adjusted gross profit	Adjusted gross profit	$	749,176		$	614,453		$	1,451,556		$	1,182,406		Adjusted gross profit	$	1,031,613		$	749,176		$	1,937,809		$	1,451,556
Operating income	Operating income	260,604			188,787			483,933			298,227			Operating income	469,665			260,604			815,139			483,933
Adjusted operating margin	Adjusted operating margin	34.8		%	30.7		%	33.3		%	25.2		%	Adjusted operating margin	45.5		%	34.8		%	42.1		%	33.3		%

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MARKET TRENDS

The cost of purchased transportation in the North American surface transportation market ~~continues~~remains elevated compared to ~~be impacted by~~pre-pandemic levels and compared to the prior year but it began to decline within the second quarter of 2022. The decline of purchased transportation is the result of an increasingly balanced freight market compared to the tight capacity market conditions seen in recent periods. In the second quarter of 2022, moderating consumer demand and carrier capacity ~~due to driver availability challenges and strong~~entering the market has better aligned the overall demand ~~resulting in historically high pricing for purchased transportation.~~with available carrier capacity. Industry freight volumes, as measured by the Cass Freight Index, ~~increased approximately 30~~decreased 2 percent during the second quarter of ~~2021~~2022 compared to the second quarter of 2020. The second quarter of 2020 was significantly impacted by the COVID-19 pandemic and restrictions in place to control the outbreak which drove down industry freight volumes by approximately 21 percent in the prior year.2021. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender in the second quarter of ~~2021 was 1.7,~~2022 declined to 1.4, representing that on average, the first ~~or second~~ carrier in a shipper's routing guide was executing the shipment in most cases. This average routing guide penetration ~~compares~~is reflective of a more balanced freight market compared to ~~1.2~~the 1.7 average routing guide depth in both the first quarter of 2022 and the second quarter of ~~2020 and is reflective of the tight carrier capacity in the second quarter of~~ 2021. ~~As capacity continues to tighten and routing guides continue to degrade more loads move to the spot market driving sharp increases in purchased transportation costs.~~

The global forwarding market ~~continues~~also began to ~~experience strong~~show signs of softening as shippers continue to work through elevated inventory levels and cautiously approach the upcoming peak season due to macroeconomic uncertainty and declining import demand ~~which~~in the United States. The cost of purchased transportation remains elevated compared to pre-pandemic levels and compared to the prior year but it began to decline within the second quarter of 2022 as global demand declined to better align with the industry’s overall capacity. Despite increasing activity from the ports in China reopening from their pandemic related shutdowns, the port congestion on the United States West Coast has improved due to moderating demand and the continued diversion of freight to ports in the Southern and Eastern United States. Shippers continue to divert freight away from the United States West Coast to mitigate risk from a potential dockworker labor dispute. Despite port congestion improving during the second quarter of 2022 on the United States West Coast there is ~~outpacing supply~~evidence of it edging back up again in addition to ~~unprecedented disruptions~~increased congestion on the United States East Coast due to port congestion and shipping container shortages. These disruptions combined with strong demand across most industries, most notably retail, have resulted in significant increases in purchased transportation costs for both ocean and air freight. Duea higher percentage of freight being routed to ~~the unprecedented challenges in the~~their ports. Air freight conversions back to ocean freight ~~market conversions to air~~have continued with more shippers seeking lower supply chain costs by tolerating the longer duration of ocean freight ~~have become increasingly common. This resulted in a continued increase in charter flights and larger than normal shipment sizes as traditional air~~transit. Air freight capacity ~~remains strained by a reduction of~~has improved in certain trade lanes due to increased belly capacity as commercial flights ~~since the beginning of~~become more frequent after being significantly reduced during the COVID-19 pandemic.

BUSINESS TRENDS

Our second quarter of ~~2021~~2022 surface transportation results ~~are largely consistent with~~benefited from the ~~overall~~softening market ~~trends summarized above, although~~conditions, as periods where the cost of purchased transportation begins to decline often result in improved adjusted gross profits per transaction in our ~~volume changes did not experience the significant volatility seen in the industry~~portfolio. Industry freight volumes as measured by the Cass Freight ~~Index. Industry freight volumes increased approximately 30~~Index decreased 2 percent ~~compared to a 21 percent decline~~ in the second quarter of ~~2020.~~2022 compared to the second quarter of 2021. Our combined NAST truckload and less than truckload ~~("LTL"~~(“LTL”) volume ~~increase of 16.0~~decreased 2.5 percent ~~compared to a 3.0 percent decrease in~~during the second quarter of ~~2020. We have continued to work with our customers to meet~~2022. As a result of the softening market conditions, our contractual ~~commitments since~~rates negotiated in prior quarters contributed to an increase in our adjusted gross profit per shipment and significantly reduced the ~~beginning of the COVID-19 pandemic which has resulted in a higher than normal~~ percentage of shipments with negative adjusted gross profit margins and less volatility in our combined NAST truckload and LTL volumes as compared to the Cass Freight Index. We continue to reshape our portfolio by adapting our pricing to reflect the rising cost environment and participating to a greater extent in the spot market. The strong demand and tight carrier capacity conditions resulted in ourmargins. Our average truckload linehaul cost per mile, excluding fuel costs, ~~increasing 47.5~~decreased 5.0 percent induring the second quarter of ~~2021.~~2022. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, increased approximately ~~42.0~~1.5 percent induring the second quarter of ~~2021.~~2022 due to our contractual rates negotiated in prior quarters.

In our global forwarding business, we continued to experience ~~significant increases in~~elevated purchased transportation costs for ~~both~~ ocean ~~and air~~ freight, ~~due to the disruptions and capacity shortages impacting the global forwarding market. This along with increased volumes has~~which resulted in ~~strong~~ growth in both total revenue and cost of purchased transportation for our ocean and air freight services. Ocean volumes increased 29.0 percent with strong growth in all regions we serve driven by higher award sizes from existing customers, new customer growth, and the adverse impact of the COVID-19 pandemic oncompared to the second quarter of ~~2020 results. In addition,~~2021. The cost of purchased transportation began to moderate within the second quarter of 2022 as softening demand better aligned with the industry’s overall capacity. This change in market dynamics was most evident on the Transpacific trade lane where we experienced a decline in Asia Pacific ocean volumes in the second quarter of 2022 compared to the second quarter of 2021. Despite this decline, our total ocean volumes increased 2.5 percent due to strong growth in ~~our air~~other regions where we operate. Air freight ~~services driven~~tonnage decreased 6.0 percent as we experienced more customers willing to accept longer transit times by converting their freight to the increasingly balanced ocean freight ~~conversions resulting from the significant disruptions experienced in the industry.~~market.

On March 2, 2020, we acquired all of the outstanding shares of Prime Distribution Services (“Prime Distribution”), a leading provider of retail consolidation services in North America for $222.7 million in cash. This acquisition adds scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services. The acquisition was effective as of February 29, 2020, and therefore the results of operations of Prime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since March 1, 2020. On June 3, 2021, we acquired Combinex Holding B.V. (“Combinex”) to further expand our European road transportation presence. Our consolidated results include the results of Combinex as of June 3, 2021.

~~SIGNIFICANT DEVELOPMENTS~~

During the three months ended June 30, 2021, our financial results and operations were impacted by the COVID-19 pandemic described above and discussed throughout Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations.” The extent to which the COVID-19 pandemic impacts our financial results and operations for the remainder of 2021 and going forward will depend on future developments which are highly uncertain and cannot be predicted, including fluctuations in the severity of the outbreak and the actions being taken to contain and treat it.

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We have taken a variety of measures to ensure the availability, continuity, and security of our critical infrastructure, ensure the health and safety of our employees around the globe, and provide service and supply chain continuity to our customers and contracted carriers in order to deliver critical and essential goods and services. We have also adopted work-from-home arrangements, and as of June 30, 2021, over 60 percent of our employees were working remotely executing their duties and responsibilities although many of our employees began returning to our physical offices under a more flexible work model in July 2021. We do not believe these policies and initiatives will adversely impact our operations.

Due to the ongoing uncertainty around the severity and duration of the outbreak, including the emergence of COVID-19 variants, we are not able at this time to estimate the impact COVID-19 may have on our financial results and operations for the remainder of 2021 and going forward. However, the impact could be material in all business segments and could be material during any future period affected either directly or indirectly by this pandemic. Many businesses have experienced and may continue to experience reduced production and output which has resulted and could continue to result in a decrease in freight volumes across a number of industries, reducing our contractual and spot-market opportunities. In addition, a significant number of our contracted carriers have reduced and may continue to reduce their capacity or charge higher prices in light of the volatile market conditions which has reduced and may continue to reduce our adjusted gross profit margins as we honor our contractual freight rates.

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select second quarter ~~2021~~2022 year-over-year operating comparisons to the second quarter ~~2020:~~2021:

•Total revenues increased ~~52.5~~22.9 percent to ~~$5.5~~$6.8 billion, driven primarily by higher pricing ~~and higher volume~~ across most of our ~~services.~~services and higher truckload and ocean volume.

•Gross profits ~~increased 21.9 percent to $744.4 million. Adjusted~~and adjusted gross profits increased ~~21.9~~37.7 percent to ~~$749.2 million,~~$1.0 billion, primarily driven by ~~higher volume in our ocean, truckload, LTL and air services and~~ higher adjusted gross profit per ~~shipment in~~transaction across most of our services and higher truckload and ocean ~~and truckload services.~~volume.

•Personnel expenses increased ~~20.8~~22.6 percent to ~~$362.9~~$444.8 million, primarily ~~driven by~~due to higher headcount and higher incentive compensation ~~costs and also due to the benefit realized in the second quarter of 2020 from our short-term cost reduction initiatives.~~costs. Average headcount increased ~~0.7~~16.2 percent.

•Other selling, general, and administrative (“SG&A”) expenses ~~increased 0.4~~decreased 6.8 percent to ~~$125.7 million.~~$117.2 million, and included a $25.3 million gain on the sale-leaseback of a facility in Kansas City. This was partially offset by higher purchased and contracted services and increased travel expenses.

•Income from operations totaled ~~$260.6~~$469.7 million, up ~~38.0~~80.2 percent due to the increase in adjusted gross ~~profits.~~profits, partially offset by the increase in operating expenses.

•Adjusted operating margin of ~~34.8~~45.5 percent increased ~~410~~1,070 basis points.

•Interest and other income/expenses totaled ~~$13.5~~$27.4 million, consisting primarily of ~~$12.7~~$17.0 million of interest expense, which increased ~~$0.4~~$4.3 million versus last year due to a higher average debt ~~balance. The second quarter also included a $1.9~~balance, and $10.3 million ~~unfavorable impact from~~of foreign currency revaluation and realized foreign currency gains and ~~losses.~~losses, which increased $8.4 million versus last year due primarily to a strengthening of the U.S. Dollar versus the Euro and Yuan.

•The effective tax rate in the quarter was ~~21.6~~21.3 percent compared to ~~19.4~~21.6 percent in the second quarter last year. ~~The rate increase was due primarily to~~

•Net income totaled $348.2 million, up 79.7% from a ~~tax benefit in the second quarter of 2020 from delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in 2000.~~year ago.

•Diluted earnings per share (EPS) increased ~~35.8~~85.4 percent to ~~$1.44.~~$2.67.

•Cash flow from operations ~~decreased $413.0~~improved $158.7 million ~~driven by a large increase~~ in ~~working capital during~~ the six months ended June 30, ~~2021.~~2022 driven by the increase in net income, partially offset by a small unfavorable change in working capital.

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CONSOLIDATED RESULTS OF OPERATIONS

The following table summarizes our results of operations (dollars in thousands, except per share data):


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended June 30,								Six Months Ended June 30,
		2021			2020			% change		2021			2020			% change			2022			2021			% change		2022			2021			% change
Revenues:	Revenues:																	Revenues:
Transportation	Transportation	$	5,240,448		$	3,348,611		56.5	%	$	9,800,675		$	6,890,729		42.2	%	Transportation	$	6,465,642		$	5,240,448		23.4	%	$	12,993,993		$	9,800,675		32.6	%
Sourcing	Sourcing	292,278			279,235			4.7	%	535,920			542,125			(1.1)	%	Sourcing	332,833			292,278			13.9	%	620,435			535,920			15.8	%
Total revenues	Total revenues	5,532,726			3,627,846			52.5	%	10,336,595			7,432,854			39.1	%	Total revenues	6,798,475			5,532,726			22.9	%	13,614,428			10,336,595			31.7	%
Costs and expenses:	Costs and expenses:																	Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	4,519,305			2,762,590			63.6	%	8,400,590			5,762,703			45.8	%	Purchased transportation and related services	5,466,874			4,519,305			21.0	%	11,117,098			8,400,590			32.3	%
Purchased products sourced for resale	Purchased products sourced for resale	264,245			250,803			5.4	%	484,449			487,745			(0.7)	%	Purchased products sourced for resale	299,988			264,245			13.5	%	559,521			484,449			15.5	%
Personnel expenses	Personnel expenses	362,901			300,483			20.8	%	723,736			630,703			14.8	%	Personnel expenses	444,764			362,901			22.6	%	858,125			723,736			18.6	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	125,671			125,183			0.4	%	243,887			253,476			(3.8)	%	Other selling, general, and administrative expenses	117,184			125,671			(6.8)	%	264,545			243,887			8.5	%
Total costs and expenses	Total costs and expenses	5,272,122			3,439,059			53.3	%	9,852,662			7,134,627			38.1	%	Total costs and expenses	6,328,810			5,272,122			20.0	%	12,799,289			9,852,662			29.9	%
Income from operations	Income from operations	260,604			188,787			38.0	%	483,933			298,227			62.3	%	Income from operations	469,665			260,604			80.2	%	815,139			483,933			68.4	%
Interest and other expense		(13,497)			(10,211)			32.2	%	(24,757)			(25,439)			(2.7)	%
Interest and other income/expense, net																		Interest and other income/expense, net	(27,395)			(13,497)			103.0	%	(41,569)			(24,757)			67.9	%
Income before provision for income taxes	Income before provision for income taxes	247,107			178,576			38.4	%	459,176			272,788			68.3	%	Income before provision for income taxes	442,270			247,107			79.0	%	773,570			459,176			68.5	%
Provision for income taxes	Provision for income taxes	53,318			34,637			53.9	%	92,082			50,703			81.6	%	Provision for income taxes	94,085			53,318			76.5	%	155,037			92,082			68.4	%
Net income	Net income	$	193,789		$	143,939		34.6	%	$	367,094		$	222,085		65.3	%	Net income	$	348,185		$	193,789		79.7	%	$	618,533		$	367,094		68.5	%

Diluted net income per share	Diluted net income per share	$	1.44		$	1.06		35.8	%	$	2.71		$	1.64		65.2	%	Diluted net income per share	$	2.67		$	1.44		85.4	%	$	4.71		$	2.71		73.8	%

Average headcount	Average headcount	15,405			15,294			0.7	%	15,233			15,338			(0.7)	%	Average headcount	17,893			15,405			16.2	%	17,554			15,233			15.2	%

Adjusted gross profit margin percentage(1)	Adjusted gross profit margin percentage(1)																	Adjusted gross profit margin percentage(1)
Transportation	Transportation	13.8		%	17.5		%	(3.7) pts		14.3		%	16.4		%	(2.1) pts		Transportation	15.4		%	13.8		%	160 bps		14.4		%	14.3		%	10 bps
Sourcing	Sourcing	9.6		%	10.2		%	(0.6) pts		9.6		%	10.0		%	(0.4) pts		Sourcing	9.9		%	9.6		%	30 bps		9.8		%	9.6		%	20 bps
Total adjusted gross profit margin	Total adjusted gross profit margin	13.5		%	16.9		%	(3.4) pts		14.0		%	15.9		%	(1.9) pts		Total adjusted gross profit margin	15.2		%	13.5		%	170 bps		14.2		%	14.0		%	20 bps

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

A reconciliation of our reportable segments to our consolidated results can be found in Note 9, Segment Reporting, in Part I, Financial Information of this Quarterly Report on Form 10-Q.

Consolidated Results of Operations—Three Months Ended June 30, ~~2021~~2022 Compared to the Three Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Total transportation revenues and purchased transportation and related services increased ~~driven by~~primarily due to higher pricing across most of our services, most notably in ocean, truckload, and ~~ocean,~~LTL services, in addition to increased volumes in ~~all~~truckload and ocean services. While prices remain elevated compared to pre-pandemic levels and compared to the prior year due to driver availability challenges and supply chain disruptions, including port congestion and equipment shortages, prices began to decline within the second quarter of 2022. The ~~higher~~decline in pricing ~~was driven by~~within the ~~tightening~~second quarter of 2022 is the result of softening market conditions as demand has better aligned with capacity ~~and increased demand discussed above~~available in the market ~~trends section.~~as shippers work through elevated inventory levels, and cautiously approach macroeconomic uncertainty and moderating consumer demand. Our sourcing total revenue and purchased products sourced for resale increased ~~due to~~as a result of higher cost and pricing per case and increased case volume ~~in the food service industry as~~ across all customer verticals.

~~the prior period experienced a significant decrease in demand resulting from the COVID-19 pandemic.~~Table of Contents

Gross profits and adjusted gross profits. Our transportation adjusted gross ~~profit~~profits increased due to ~~improved~~elevated pricing compared to the prior year across most of our services, most notably in truckload, ocean, and ~~ocean~~LTL services, resulting in ~~addition to volume increases in nearly all services.~~higher adjusted gross profits per transaction. Our surface transportation adjusted gross profit ~~margin decreased~~per transaction increased significantly driven by ~~declines across most services other than truckload.~~the declining cost of purchased transportation within the second quarter of 2022 relative to our contractual rates negotiated in prior quarters which significantly reduced the percentage of shipments with negative adjusted gross profit margins. Sourcing adjusted gross ~~profit decreased~~ profits increased driven by ~~lower~~an increase in case volume and higher adjusted gross profits per case ~~partially offset by an increase in case volumes.~~across all customer verticals.

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COVID-19 pandemic in the prior period, including furloughs, reduced work hours, and the temporary suspension of the company match to retirement plans for U.S. and Canadian employees and increased health insurance costs. Stock-based compensation expense recognized on performance-based equity awards granted prior to 2021 totaled $7.7 million in the current period compared to none in the prior period.headcount. SG&A expenses ~~increased slightly~~decreased due to ~~increased purchased services which was mostly offset by the impact of an $11.5~~a $23.5 million ~~loss~~gain on the sale-leaseback onof a ~~company owned data center~~facility in ~~the prior period.~~Kansas City and lower credit losses. This was partially offset by higher purchased and contracted services and increased travel expenses.

Interest and other income/expense. Interest and other income/expense primarily consisted of interest expense of ~~$12.7~~$17.0 million in the second quarter of ~~2021~~2022 and a ~~$1.9~~$10.3 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and ~~losses.~~losses primarily due to a strengthening of the U.S. Dollar versus the Euro and Yuan. Interest expense increased ~~$0.4 million~~ driven by a higher average debt balance in the second quarter of ~~2021~~2022 compared to the second quarter of ~~2020.~~2021. The second quarter of ~~2020~~2021 included a ~~$1.8~~$1.9 million ~~favorable~~unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses.

Provision for income taxes. Our effective income tax rate was 21.3 percent for the second quarter of 2022 compared to 21.6 percent for the second quarter of ~~2021 compared to 19.4 percent~~2021. The effective income tax rate for the second quarter of ~~2020.~~2022 was higher than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit, which increased the effective income tax rate by 2.0 percentage points. This impact was partially offset by the tax impact of foreign tax credits, which reduced the effective tax rate by 1.4 percentage points. The effective income tax rate for the second quarter of 2021 was higher than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit, and foreign income taxes which both increased our effective tax rate ~~in the second quarter~~ by 2.0 ~~percent. This impact~~percentage points. These impacts on the ~~tax rate was partially offset by foreign tax impacts. The~~ effective income tax rate ~~for the second quarter of 2020 was lower than the statutory federal income tax rate due to~~were partially offset by the tax impact of ~~share-based payment awards, including the~~foreign tax ~~benefit from the delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in 2000,~~credits, which reduced the effective tax rate by ~~4.5~~1.2 percentage ~~points, and foreign tax impacts recorded in the second quarter of 2020.~~points.

Consolidated Results of Operations—Six Months Ended June 30, ~~2021~~2022 Compared to the Six Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Total transportation revenues and purchased transportation and related services increased driven by higher pricing in ~~truckload and ocean services and volume increases~~all of our service lines, most notably in ~~our LTL,~~ ocean and ~~air freight~~truckload services. Volumes also increased in ocean and truckload services. Purchased transportation and related service~~s. The increased~~ costs remain elevated compared to pre-pandemic levels and compared to the prior year as supply chain disruptions continue to impact both the surface transportation and global forwarding markets. While supply chain disruptions continue to drive higher costs and pricing in ~~truckload and ocean~~the period we did see evidence that the market may be softening as demand has ~~been driven by strong demand in addition to tight truckload carrier~~better aligned with available capacity ~~and unprecedented disruptions in~~within the ~~ocean freight industry.~~second quarter of 2022. Our sourcing total revenue and purchased products sourced for resale ~~decreased due to lower~~increased as a result of higher cost and pricing ~~and costs~~ per case ~~which was partially offset by higher~~and increased case volume ~~in the foodservice industry as~~ ~~the prior year experienced a significant decrease in demand resulting from the COVID-19 pandemic.~~across all customer verticals.

Gross profits and adjusted gross ~~profits~~.profits. Our transportation adjusted gross profits increased ~~driven by~~due to increased pricing compared to the prior year across most of our services, most notably in truckload, ocean and ~~truckload~~LTL services resulting in ~~addition to volume increases in our LTL, ocean and air freight services.~~ higher adjusted gross profits per transaction. Our surface transportation adjusted gross profit ~~margin decreased driven by declines across most services.~~per transaction also benefited from the declining cost of purchased transportation within the second quarter of 2022 relative to our contractual rates negotiated in prior quarters which significantly reduced the percentage of shipments with negative adjusted gross profit margins. Sourcing adjusted gross ~~profit decreased~~ profits increased driven by ~~lower~~an increase in case volume and higher adjusted gross profits per case ~~partially offset by an increase in case volumes.~~across all customer verticals.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries and incentive compensation increases reflecting the strong results in the current year and the impact of steps taken to reduce costs in response to the COVID-19 pandemic in the prior year, including furloughs, reduced work hours, and the temporary suspension of the company match to retirement plans for U.S. and Canadian employees in addition to increased health insurance costs. Stock-based compensation expense recognized on performance-based equity awards granted prior to 2021 totaled $19.7 million in the current year compared to none in the prior year. Partially offsetting these increases was a 0.7 percent decreasedriven by an increase in average headcount. SG&A expenses ~~decreased~~increased primarily due to ~~lower credit losses~~increases in purchased and contracted services, travel, ~~expenses. The prior year also included an $11.5~~and warehouse expenses, partially offset by a $23.5 million ~~loss~~gain on the sale-leaseback of a ~~company owned data center.~~facility in Kansas City.

Interest and other income/expense. Interest and other income/expense primarily consisted of interest expense of ~~$24.9~~$31.5 million and ~~a $4.8~~an $11.8 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses in the six months ended June 30, 2022 primarily due to a strengthening of the U.S. Dollar versus the Euro and Yuan. Interest expense increased driven by a higher average debt balance compared to the six months ended June 30, 2021. ~~These expenses were~~The six months ended June 30, 2021 included a $4.8 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses that was partially offset by a $2.9 million local government subsidy in Asia for achieving specified performance criteria that was almost entirely offset by a reduction in foreign tax credits within the provision for income taxes. ~~Interest expense was essentially flat compared to the six months ended June 30, 2020. The six months ended June 30, 2020 included a $1.1 million unfavorable impact~~

Table of ~~foreign currency revaluation and realized foreign currency gains and losses.~~Contents

Provision for income taxes. Our effective income tax rate was 20.0 percent for the six months ended June 30, 2022 and 20.1 percent for the six months ended June 30, ~~2021 and 18.6 percent~~2021. The effective income tax rate for the six months ended June 30, ~~2020.~~2022 was lower than the statutory federal income tax rate primarily due to the tax impact of foreign tax credits, U.S. tax credits and incentives, and the tax impact of share-based payment awards, which reduced the effective tax rate by 1.1 percentage points, 1.0 percentage points, and 0.9 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by 1.7 percentage points. The effective income tax rate for the six months ended June 30, 2021 was lower than the statutory federal income tax rate primarily due to the tax impact of share-based payment awards, ~~which reduced~~U.S. tax credits and incentives, and the ~~rate by 1.5 percentage points, the combined~~ tax impact of ~~Global Intangible Low-tax Income ("GILTI") and Foreign Derived Intangible Income ("FDII"),~~foreign tax credits, which reduced the effective tax rate by ~~0.6~~1.5 percentage points, 0.9 percentage points, and ~~foreign tax impacts which reduced the effective tax rate by~~ 0.5 percentage ~~points.~~points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax ~~rate. The effective income tax rate for the six months ended June 30, 2020 was lower the statutory federal income tax rate primarily due to the tax impact of share-based payment awards,~~

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~~including the tax benefit from the delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in 2000, which reduced the rate lower than the statutory~~ rate by ~~4.2~~2.1 percentage ~~points, and foreign tax impacts in the six months ended June 30, 2020.~~points.

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NAST Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2021		2020		% change		2021		2020		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	3,585,481	$	2,475,292	44.9	%	$	6,796,904	$	5,299,037	28.3	%	Total revenues	$	4,147,046	$	3,585,481	15.7	%	$	8,261,935	$	6,796,904	21.6	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	3,148,885		2,095,736		50.3	%	5,939,200		4,546,703		30.6	%	Purchased transportation and related services	3,522,495		3,148,885		11.9	%	7,131,284		5,939,200		20.1	%
Personnel expenses	Personnel expenses	185,253		153,209		20.9	%	369,182		326,041		13.2	%	Personnel expenses	225,210		185,253		21.6	%	426,012		369,182		15.4	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	100,251		89,501		12.0	%	200,646		190,921		5.1	%	Other selling, general, and administrative expenses	122,842		100,251		22.5	%	245,786		200,646		22.5	%
Total costs and expenses	Total costs and expenses	3,434,389		2,338,446		46.9	%	6,509,028		5,063,665		28.5	%	Total costs and expenses	3,870,547		3,434,389		12.7	%	7,803,082		6,509,028		19.9	%
Income from operations	Income from operations	$	151,092	$	136,846	10.4	%	$	287,876	$	235,372	22.3	%	Income from operations	$	276,499	$	151,092	83.0	%	$	458,853	$	287,876	59.4	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2021		2020		% change		2021		2020		% change			2022		2021		% change		2022		2021		% change
Average headcount	Average headcount	6,580		6,960		(5.5)	%	6,578		6,981		(5.8)	%	Average headcount	7,552		6,580		14.8	%	7,442		6,578		13.1	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Truckload	Truckload					6.0	%					(0.5)	%	Truckload					2.0	%					3.0	%
LTL	LTL					23.5	%					19.0	%	LTL					(5.0)	%					(3.0)	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Truckload	Truckload	$	286,574	$	252,165	13.6	%	$	566,878	$	495,851	14.3	%	Truckload	$	432,048	$	286,574	50.8	%	$	766,958	$	566,878	35.3	%
LTL	LTL	128,155		105,428		21.6	%	248,272		217,758		14.0	%	LTL	166,868		128,155		30.2	%	317,610		248,272		27.9	%
Other	Other	21,867		21,963		(0.4)	%	42,554		38,725		9.9	%	Other	25,635		21,867		17.2	%	46,083		42,554		8.3	%
Total adjusted gross profits	Total adjusted gross profits	$	436,596	$	379,556	15.0	%	$	857,704	$	752,334	14.0	%	Total adjusted gross profits	$	624,551	$	436,596	43.1	%	$	1,130,651	$	857,704	31.8	%

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended June 30, ~~2021~~2022 compared to the Three Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. NAST total revenues ~~increased primarily driven by higher truckload pricing~~ and an increase in LTL and truckload volumes. Truckload pricing reached historic levels in the second quarter of 2021 driven by tight carrier capacity and strong demand as discussed above in the market trends section. Total purchased transportation and related services increased ~~driven by~~primarily due to higher ~~average truckload linehaul costs per mile and, to a lesser extent,~~pricing in truckload and LTL ~~volume~~services, in addition to higher truckload volumes. These increases ~~and higher purchased transportation costs per transaction~~were partially offset by a decline in LTL ~~services.~~volumes. While prices remain elevated compared to pre-pandemic levels and compared to the prior year due to driver availability challenges and supply chain disruptions, including port congestion and equipment shortages, they began to decline within the second quarter of 2022. The decline in pricing within the second quarter of 2022 is the result of softening market conditions as demand has better aligned with capacity available in the market.

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Gross profits and adjusted gross profits. NAST ~~truckload~~ adjusted gross profits increased ~~driven primarily~~due to increased pricing compared to the prior year in truckload and LTL services resulting in higher adjusted gross profits per transaction in addition to higher truckload volumes. These increases were partially offset by ~~increased volumes and improved pricing.~~a decline in LTL volumes. Our NAST ~~truckload~~ adjusted gross profit per ~~load~~transaction increased ~~7 percent in~~significantly driven by the declining costs of purchased transportation within the second quarter of ~~2021 compared~~2022 relative to ~~the second quarter of 2020. The improved pricing in truckload was the result of an increase in spot market opportunities and continued progress repricing~~ our contractual ~~truckload business to reflect~~rates negotiated in prior quarters which significantly reduced the ~~rising cost environment.~~percentage of shipments with negative adjusted gross profit margins. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately ~~42.0~~1.5 percent in the second quarter of ~~2021~~2022 compared to the second quarter of ~~2020.~~2021. Our truckload transportation costs, excluding fuel surcharges, decreased approximately 5.0 percent.

NAST other adjusted gross profits increased primarily driven by an increase in warehousing services and an increase in intermodal adjusted gross profits.

Operating expenses. NAST personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average headcount. NAST SG&A expenses increased due to increased investments in technology, increased expenditures for purchased services including temporary labor, and increased warehouse expense. The operating expenses of NAST and all other segments include allocated corporate expenses. Allocated personnel expenses consist primarily of stock-based compensation allocated based upon segment participation levels in our equity plans. Remaining corporate allocations, including corporate functions and technology related expenses, are primarily included within each segment’s other SG&A, and allocated based upon relevant segment operating metrics.

Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021

Total revenues and direct costs. NAST total revenues and purchased transportation and related services increased due to higher pricing in truckload and in LTL services, in addition to volume increases in truckload services. Truckload pricing reached historic levels during the first quarter of 2022 due to tight carrier capacity caused by driver availability challenges and the supply chain disruptions facing the industry, however, prices started to decline within the second quarter of 2022. The costs of purchased transportation also started to decline driven by moderating demand and capacity entering the market but remain elevated compared to the prior year.

Gross profits and adjusted gross profits. NAST adjusted gross profits increased due primarily to increased pricing resulting in higher adjusted gross profits per transaction, in addition to an increase in volume. The increased adjusted gross profit per transaction was the result of the softening market conditions resulting in moderating costs for purchased transportation relative to our contractual rates negotiated in prior quarters. This significant reduced the percentage of shipments with negative adjusted gross profit margins. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately 10.5 percent. Our truckload transportation costs, excluding fuel surcharges, increased approximately ~~47.5~~7.5 percent.

~~NAST LTL adjusted gross profits increased due to increased volumes, partially offset by a slight decrease in adjusted gross profits per transaction.~~

NAST other adjusted gross profits ~~decreased slightly as a small decrease in intermodal adjusted gross profits was mostly offset~~increased driven by an increase in warehousing services.

Operating expenses. NAST personnel expenses increased primarily due to incentive compensation increases reflecting the strong results in the current period and the impact of steps taken to reduce costs in response to the COVID-19 pandemic in the prior period, including furloughs, reduced work hours, and the temporary suspension of the company match to retirement plans for U.S. and Canadian employees. These increases were partially offset by a decrease in average headcount. NAST SG&A

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~~expenses increased driven by increased investments in technology. The operating expenses of NAST and all other segments include allocated corporate expenses.~~

~~Six Months Ended June 30, 2021 compared to the Six Months Ended June 30, 2020~~

~~Total revenues and direct costs.~~ NAST total revenues increased due to increased pricing in truckload and, to a lesser extent, increased volumes in LTL services. These increases were partially offset by a slight decrease in truckload volumes. The increased pricing in truckload has been driven by tight carrier capacity and strong demand in the current year. The prior year was adversely impacted by weakening demand during the early stages of the COVID-19 pandemic which resulted in a declining cost environment as industry volumes decreased. Total purchased transportation and related services increased, driven by higher average truckload linehaul costs per mile in addition to higher volumes in LTL services.

~~Gross profits and adjusted gross profits.~~ NAST truckload adjusted gross profits increased driven by improved pricing as discussed above. Our average truckload linehaul rate per mile charged to our customers increased approximately 37.5 percent. Our truckload transportation costs, excluding fuel costs, increased approximately 41.0 percent.

NAST LTL adjusted gross profits increased due to increased volumes partially offset by lower adjusted gross profit per transaction. The acquisition of Prime Distribution contributed 1.5 percentage points to LTL adjusted gross profit growth.

~~NAST other adjusted gross profits increased primarily due to incremental warehousing services related to the acquisition of Prime Distribution.~~

~~Operating expenses.~~ ~~NAST personnel~~ expense increased primarily due to an increase in salaries and incentive compensation increases reflecting the strong results in the current year and the impact of steps taken to reduce costs in response to the COVID-19 pandemic in the prior year, including furloughs, reduced work hours, and the temporary suspension of the company match to retirement plans for U.S. and Canadian employees. These increases were partially offsetdriven by ~~a decrease~~an increase in average headcount. NAST SG&A expenses increased ~~driven by~~due to increased investments in technology, increased expenditures for purchased services including temporary labor, increased warehouse expense, and ~~the ongoing expenses of Prime Distribution, partially offset by~~ a ~~reduction in credit loss.~~non-recurring legal expense.

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Global Forwarding Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2021		2020		% change		2021		2020		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	1,450,794	$	707,820	105.0	%	$	2,606,833	$	1,238,204	110.5	%	Total revenues	$	2,093,190	$	1,450,794	44.3	%	$	4,287,587	$	2,606,833	64.5	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	1,212,040		544,860		122.4	%	2,153,779		946,930		127.4	%	Purchased transportation and related services	1,768,747		1,212,040		45.9	%	3,641,296		2,153,779		69.1	%
Personnel expenses	Personnel expenses	82,936		63,322		31.0	%	163,945		134,215		22.2	%	Personnel expenses	106,096		82,936		27.9	%	207,372		163,945		26.5	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	47,606		40,863		16.5	%	90,308		86,325		4.6	%	Other selling, general, and administrative expenses	50,790		47,606		6.7	%	103,724		90,308		14.9	%
Total costs and expenses	Total costs and expenses	1,342,582		649,045		106.9	%	2,408,032		1,167,470		106.3	%	Total costs and expenses	1,925,633		1,342,582		43.4	%	3,952,392		2,408,032		64.1	%
Income from operations	Income from operations	$	108,212	$	58,775	84.1	%	$	198,801	$	70,734	181.1	%	Income from operations	$	167,557	$	108,212	54.8	%	$	335,195	$	198,801	68.6	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2021		2020		% change		2021		2020		% change			2022		2021		% change		2022		2021		% change
Average headcount	Average headcount	4,909		4,726		3.9	%	4,832		4,763		1.4	%	Average headcount	5,759		4,909		17.3	%	5,690		4,832		17.8	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Ocean	Ocean					29.0	%					28.0	%	Ocean					2.5	%					4.5	%
Air~~(1)~~	Air~~(1)~~					42.5	%					44.0	%	Air~~(1)~~					(6.0)	%					1.5	%
Customs	Customs					34.0	%					23.0	%	Customs					10.5	%					8.0	%

Adjusted gross profits~~(2)~~(1)	Adjusted gross profits~~(2)~~(1)													Adjusted gross profits~~(2)~~(1)
Ocean	Ocean	$	150,916	$	78,734	91.7	%	$	286,312	$	148,544	92.7	%	Ocean	$	228,093	$	150,916	51.1	%	$	449,494	$	286,312	57.0	%
Air	Air	52,179		51,541		1.2	%	97,426		78,418		24.2	%	Air	56,112		52,179		7.5	%	116,679		97,426		19.8	%
Customs	Customs	25,512		19,459		31.1	%	49,735		40,652		22.3	%	Customs	27,820		25,512		9.0	%	55,315		49,735		11.2	%
Other	Other	10,147		13,226		(23.3)	%	19,581		23,660		(17.2)	%	Other	12,418		10,147		22.4	%	24,803		19,581		26.7	%
Total adjusted gross profits	Total adjusted gross profits	$	238,754	$	162,960	46.5	%	$	453,054	$	291,274	55.5	%	Total adjusted gross profits	$	324,443	$	238,754	35.9	%	$	646,291	$	453,054	42.7	%

________________________________

(1) Beginning in the second quarter of 2021 reported air volumes represent metric tons shipped. Previously reported statistics were based on transactional volumes and have been restated to conform with the current period presentation.

~~(2)~~Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended June 30, ~~2021~~2022 compared to the Three Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Global ~~Forwarding~~forwarding total revenues and ~~direct costs~~purchased transportation and related services increased ~~driven by~~due to higher pricing and higher volumes in our ocean ~~services and, to a lesser extent, higher volumes in both our ocean and air freight~~ services. The ~~increased ocean~~cost of purchased transportation and pricing ~~was~~continues to be elevated compared to pre-pandemic levels and compared to the prior year driven by the ~~unprecedented~~continued supply chain disruptions impacting the ~~industry combined with strong demand as discussed above~~global forwarding market. The market did begin to show signs of softening which resulted in prices beginning to moderate within the ~~market trends section. The~~ second quarter of ~~2020 was also severely impacted~~2022, most notably on the Transpacific trade lane as we experienced a decline in Asia Pacific ocean volumes. Despite this decline, our total ocean volumes increased due to strong growth in other regions where we operate. Air freight total revenues and purchased transportation and related services decreased driven by ~~reduced demand~~conversions back to ocean freight and ~~production~~the impact of increased air freight capacity on purchased transportation costs in certain trade lanes due to the COVID-19 pandemic which led to significant volume declines all services in the prior year. Increased air freight volumes were driven by ocean freight conversions resulting from the significant disruptions experienced in the industry and the continued increase in charter flights and larger than normal shipment sizes as traditional air freight capacity remains strained by a reductionincreased frequency of commercial ~~flights.~~flights which were significantly reduced at the onset of the COVID-19 pandemic.

Gross profits and adjusted gross profits. Ocean ~~transportation adjusted gross profits increased driven by higher pricing and an increase in volumes. Air~~freight transportation adjusted gross profits increased due to higher pricing resulting in increased adjusted gross profits per transaction, in addition to an increase in total volumes. Air freight adjusted gross profits increased due to an increase in adjusted gross profits per transaction driven by the declining cost of purchased transportation, partially offset by a decrease in volume. Customs adjusted gross profits increased ~~driven by~~due to an increase in transaction volume.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries and incentive compensation ~~increases reflecting the strong results in the current period and~~driven by an increase in average headcount. ~~The prior period included the impact of steps taken to reduce costs in response to the COVID-19 pandemic, including furloughs and reduced work hours.~~ SG&A expenses increased ~~driven by~~due to increased investments in technology and travel expenses, partially offset by ~~a reduction of amortization expense due to the completion of amortization related to intangible assets from a prior acquisition.~~favorable credit losses.

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Six Months Ended June 30, ~~2021~~2022 compared to the Six Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Total revenues and ~~direct costs~~purchased transportation and related services increased driven by higher pricing and volumes in our ocean services and, to a lesser extent, higher pricing and volumes in our air freight services. The ~~increased ocean~~cost of purchased transportation and pricing ~~was~~continues to be elevated compared to pre-pandemic levels and compared to the prior year driven by the ~~unprecedented~~continued supply chain disruptions impacting the industry combined with strong demand. The first half of 2020 was also severely impacted by reduced demand and production due to the COVID-19 pandemic which led to significant volume declines in all services in the prior year.global forwarding market.

Gross profits and adjusted gross profits. Ocean and air freight transportation adjusted gross profits increased driven by higher pricing ~~and~~resulting in increased ~~volumes. Air transportation~~ adjusted gross profits ~~increased due~~per transaction, in addition to increased volumes. Customs adjusted gross profits increased driven by an increase in transaction volumes.

Operating expenses. Personnel expenses increased primarily due to an increase in salaries and incentive compensation ~~increases reflecting the strong results in the current period and~~driven by an increase in average headcount. ~~The prior year included the impact of steps taken to reduce costs in response to the COVID-19 pandemic, including furloughs and reduced work hours.~~ SG&A expenses increased ~~driven by~~due to increased investments in technology, increased purchased services including temporary labor, and travel expenses. These increases were partially offset by ~~a reduction of amortization expense due to the completion of amortization related to intangible assets from a prior acquisition.~~favorable credit losses.

All Other and Corporate Segment Results of Operations

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


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
(dollars in thousands)	(dollars in thousands)	2021		2020		% change		2021		2020		% change		(dollars in thousands)	2022		2021		% change		2022		2021		% change
Total revenues	Total revenues	$	496,451	$	444,734	11.6	%	$	932,858	$	895,613	4.2	%	Total revenues	$	558,239	$	496,451	12.4	%	$	1,064,906	$	932,858	14.2	%
Income from operations		1,300		(6,834)		N/M		(2,744)		(7,879)		N/M
Income (loss) from operations														Income (loss) from operations	25,609		1,300		N/M		21,091		(2,744)		N/M

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Robinson Fresh	Robinson Fresh	29,940		30,202		(0.9)	%	54,888		57,660		(4.8)	%	Robinson Fresh	34,981		29,940		16.8	%	65,486		54,888		19.3	%
Managed Services	Managed Services	26,234		23,503		11.6	%	51,790		46,030		12.5	%	Managed Services	27,618		26,234		5.3	%	55,700		51,790		7.5	%
Other Surface Transportation	Other Surface Transportation	17,652		18,232		(3.2)	%	34,120		35,108		(2.8)	%	Other Surface Transportation	20,020		17,652		13.4	%	39,681		34,120		16.3	%
Total adjusted gross profits	Total adjusted gross profits	$	73,826	$	71,937	2.6	%	$	140,798	$	138,798	1.4	%	Total adjusted gross profits	$	82,619	$	73,826	11.9	%	$	160,867	$	140,798	14.3	%

________________________________

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended June 30, ~~2021~~2022 compared to the Three Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Robinson Fresh total revenues increased ~~driven by~~due to higher ~~truckload~~ pricing per case and ~~volumes~~increased case volume across all customer verticals. In addition, total revenues in Other Surface Transportation ~~and~~ increased ~~case volume from customers in the food service industry in our Robinson Fresh business as the prior year period experienced a significant decrease in demand resulting from the COVID-19 pandemic.~~due to higher Europe truckload pricing.

Gross profits and adjusted gross profits.Robinson Fresh adjusted gross profits ~~declined slightly as lower adjusted gross profits per case were mostly offset~~increased driven by an increase in case volume ~~primarily from customers in the food service industry.~~and higher adjusted gross profits per case across all customer verticals. Managed Services adjusted gross profits increased ~~driven by increased transaction volumes resulting from~~due to an increase in freight under ~~management.~~management, which was driven by growth in business with both new and existing customers. Other Surface Transportation adjusted gross profits ~~decreased as a result of a~~ ~~decrease in~~increased due to increased Europe truckload adjusted gross profits per ~~transaction, partially offset by an increase in truckload volumes.~~transaction.

Six Months Ended June 30, ~~2021~~2022 compared to the Six Months Ended June 30, ~~2020~~2021

Total revenues and direct costs. Robinson Fresh total revenues increased driven by higher ~~truckload~~ pricing per case and ~~volumes~~increased case volume across all customer verticals. In addition, total revenues in Other Surface Transportation ~~partially offset by a decline~~increased due to higher to higher Europe truckload pricing and an increase in ~~Robinson Fresh driven by lower pricing.~~Europe truckload volumes.

Gross profits and adjusted gross profits.Robinson Fresh adjusted gross profits ~~decreased~~increased driven by ~~lower~~an increase in case volume and higher adjusted gross profits per case ~~partially offset by an increase in case volumes.~~across all customer verticals. Managed Services adjusted gross profits increased ~~driven by increased transaction volumes resulting from~~due to an increase in freight under ~~management.~~management, which was driven by growth in business with both new and existing customers. Other Surface Transportation adjusted gross profits ~~decreased as a result of a~~ ~~decrease in~~increased due to increased Europe truckload adjusted gross profits per transaction ~~partially offset by~~and an increase in Europe truckload volumes.

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LIQUIDITY AND CAPITAL RESOURCES

We have historically generated substantial cash from operations, which has enabled us to fund our organic growth while paying cash dividends and repurchasing stock. In addition, we maintain the following debt facilities as described in Note 4, Financing Arrangements ~~(dollars in~~(in thousands):


Description	Description	Carrying Value as of June 30, 2021		Borrowing Capacity		Maturity	Description	Carrying Value as of June 30, 2022		Borrowing Capacity		Maturity
Revolving credit facility	Revolving credit facility	$	271,000	$	1,000,000	October 2023	Revolving credit facility	$	174,000	$	1,000,000	October 2023
364-day revolving credit facility							364-day revolving credit facility	500,000		500,000		May 2023
Senior Notes, Series A	Senior Notes, Series A	175,000		175,000		August 2023	Senior Notes, Series A	175,000		175,000		August 2023
Senior Notes, Series B	Senior Notes, Series B	150,000		150,000		August 2028	Senior Notes, Series B	150,000		150,000		August 2028
Senior Notes, Series C	Senior Notes, Series C	175,000		175,000		August 2033	Senior Notes, Series C	175,000		175,000		August 2033
Combinex credit facility		2,280		3,565		January 2027

Receivables securitization facility (1)							Receivables securitization facility (1)	499,448		500,000		November 2023
Senior Notes (1)	Senior Notes (1)	593,733		600,000		April 2028	Senior Notes (1)	594,607		600,000		April 2028
Total debt	Total debt	$	1,367,013	$	2,103,565		Total debt	$	2,268,055	$	3,100,000

(1) Net of unamortized discounts and issuance costs.

We expect to use our current debt facilities and potentially other indebtedness incurred in the future to assist us in continuing to fund working capital, capital expenditures, possible acquisitions, dividends, and share repurchases.

Cash and cash equivalents totaled ~~$172.8~~$238.9 million as of June 30, ~~2021~~2022 and ~~$243.8~~$257.4 million as of December 31, ~~2020.~~2021. Cash and cash equivalents held outside the United States totaled ~~$160.1~~$204.4 million as of June 30, ~~2021~~2022 and ~~$230.9~~$217.1 million as of December 31, ~~2020.~~2021.

We prioritize our investments to grow the business, as we require some working capital and a relatively small amount of capital expenditures to grow. We are continually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.

The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):
Six Months Ended June 30,
2021 2020 % change
Sources (uses) of cash:
Cash provided by operating activities $ 92,598 $ 505,643 (81.7) %
Capital expenditures (29,837) (25,039)
Acquisitions, net of cash acquired (14,749) (223,230)
Other investing activities — 5,525
Cash used for investing activities (44,586) (242,744) (81.6) %
Repurchase of common stock (262,904) (68,563)
Cash dividends (139,756) (137,104)
Net borrowing (payments) on debt 270,962 (143,000)
Other financing activities 13,591 5,329
Cash used for financing activities (118,107) (343,338) (65.6) %
Effect of exchange rates on cash and cash equivalents (898) (5,183)
Net change in cash and cash equivalents $ (70,993) $ (85,622)

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	Six Months Ended June 30,
	2022		2021		% change
Sources (uses) of cash:
Cash provided by operating activities	$	251,329	$	92,598	171.4	%

Capital expenditures	(69,403)		(29,837)
Acquisitions, net of cash acquired	—		(14,749)
Other investing activities	63,208		—
Cash used for investing activities	(6,195)		(44,586)		(86.1)	%

Repurchase of common stock	(490,699)		(262,904)
Cash dividends	(145,268)		(139,756)
Net borrowings on debt	349,000		270,962
Other financing activities	29,790		13,591
Cash used for financing activities	(257,177)		(118,107)		117.7	%
Effect of exchange rates on cash and cash equivalents	(6,445)		(898)
Net change in cash and cash equivalents	$	(18,488)	$	(70,993)

Cash flow from operating activities. Cash ~~flow from~~provided by operating activities ~~decreased significantly during~~improved in the six months ended June 30, ~~2021~~2022 compared to the six months ended June 30, ~~2020~~2021 due to ~~unfavorable changes in working capital. The unfavorable changes in working capital were primarily related to a~~ ~~sequential increase in accounts receivable and contract assets~~increased net income, partially offset by a ~~related increase~~small unfavorable change in ~~accounts payable~~working capital. We continue to closely monitor credit and ~~accrued transportation expense. Both increases were driven by a sequential increase in pricing~~collections activities and ~~volumes in nearly all services in the second quarter of 2021. Despite the increase in accounts receivables, we are not experiencing a deterioration in~~ the quality of our accounts ~~receivables~~receivable balance and the results of the six months ended June 30, 2021 include sequential and year-over-year improvements in the percent of accounts receivable that are past due. Additionally, given the COVID-19 pandemic, we are closely monitoring credit and collections activities to minimize risk as well as working with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.

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Cash used for investing activities. Capital expenditures consisted primarily of investments in ~~hardware and~~ software, which are intended to increase employee productivity, automate interactions with our customers and contracted carriers, and improve our internal workflows to help expand our adjusted operating margins and grow the business. ~~We used $14.7~~

During the second quarter, we sold an office building in Kansas City, Missouri, for a sales price of $55 million ~~for~~and recognized a gain of $23.5 million on the ~~acquisition~~sale of ~~Combinex during~~ the ~~six~~building in the three months ended June 30, ~~2021.~~2022. We ~~used $222.7 million~~simultaneously entered into an agreement to lease the office building for ~~the acquisition of Prime Distribution during the six months ended June 30, 2020.~~10 years.

Cash used for financing activities. Net borrowings on debt in the six months ended June 30, 2022 and June 30, 2021 were to fund ~~share repurchases and~~ working capital ~~needs. Net repayments on debt in the six months ended June 30, 2020 were used to reduce the outstanding balance of the Receivables Securitization Facility.~~needs and share repurchases. The increase in cash used for share repurchases was due to an increase in the number of shares repurchased and a higher average price per share during the six months ended June 30, ~~2021 as we temporarily suspended our share repurchase activity in 2020 as we continued to assess the impacts of the COVID-19 pandemic.~~2022. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.

~~Although there is uncertainty related to the anticipated impact of the COVID-19 pandemic on our future results, we~~We believe that, assuming no change in our current business plan, our available cash, together with expected future cash generated from operations, the amount available under our credit facilities, and credit available in the market, will be sufficient to satisfy our anticipated needs for working capital, capital expenditures, and cash dividends for at least the next 12 ~~months.~~months and the foreseeable future. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.

As of June 30, ~~2021,~~2022, we were in compliance with all of the covenants under the Credit Agreement, 364-day Credit Agreement, Note Purchase Agreement, Senior Notes, and ~~Senior Notes.~~

Receivables Securitization.

Recently Issued Accounting Pronouncements

Refer to Note 1, Basis of Presentation, contained in this ~~quarterly report~~Quarterly Report and in the company's ~~2020~~2021 Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the company's ~~2020~~2021 Annual Report on Form 10-K for a complete discussion regarding our critical accounting policies and estimates. As of June 30, ~~2021,~~2022, there were no material changes to our critical accounting policies and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to the company’s ~~2020~~2021 Annual Report on Form 10-K for a discussion on the company’s market risk. As of June 30, ~~2021~~2022, there were no material changes in market risk from those disclosed in the company’s ~~2020~~2021 Annual Report on Form 10-K.

~~Table of Contents~~

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

~~Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our~~We maintain disclosure controls and procedures ~~(as~~as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ~~(the “Exchange~~(“Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or ~~our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)~~submit under the Exchange ~~Act) will prevent all errors~~Act is (i) recorded, processed, summarized and ~~all fraud. A control system, no matter how well designed~~reported within the time periods specified in SEC rules and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints,forms; and ~~the benefits of the controls must be considered relative~~(ii) accumulated and communicated to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of effectiveness of controls and procedures to future periods are subject to the risk that the controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the controls and procedures may have deteriorated.

~~As of June 30, 2021,~~ our management, ~~with the participation of~~including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)~~. Our management recognizes~~ as of June 30, 2022. Based upon that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Ourevaluation, our Chief Executive Officer and Chief Financial Officer ~~have~~ concluded ~~based upon the evaluation described above~~ that ~~as of June 30, 2021,~~ our disclosure controls and procedures were effective at the reasonable assurance ~~level.~~level as of June 30, 2022.

(b) Changes in internal controls over financial reporting.

There were no changes in our internal control over financial reporting (as ~~such term is~~ defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended June 30, ~~2021,~~2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this ~~report,~~Quarterly Report, you should carefully consider the factors disclosed in Part I, “Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. As of June 30, 2022, there were no material changes to the risk factors set forth in the Company’s 2021 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about company purchases ~~by the company~~of common stock during the quarter ended June 30, ~~2021 of shares of the company's common stock.~~2022:
Total Number
of Shares
(or Units)
Purchased (1)
Average Price
Paid Per
Share
(or Unit)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Maximum Number of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs (2)
April 2021 459,691 $ 97.88 445,017 5,958,517
May 2021 427,243 98.21 424,966 5,533,551
June 2021 496,001 96.21 488,396 5,045,155
Second Quarter 2021 1,382,935 $ 97.38 1,358,379 5,045,155


	Total Number of Shares (or Units) Purchased (1)	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (2)
April 1, 2022 - April 30, 2022	928,786	$	102.78	920,000	19,123,945
May 1, 2022 - May 31, 2022	1,074,372	106.47		1,015,000	18,108,945
June 1, 2022 - June 30, 2022	1,278,544	103.60		1,277,624	16,831,321
Second Quarter 2022	3,281,702	$	104.31	3,212,624	16,831,321

(1) The total number of shares purchased based on trade date includes: (i) ~~1,358,379~~3,212,624 shares of common stock purchased under the authorization described below; and (ii) ~~24,556~~69,078 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) In ~~May 2018,~~December 2021, the Board of Directors increased the number of shares authorized for repurchase by ~~15,000,000~~20,000,000 shares. As of June 30, ~~2021,~~2022, there were ~~5,045,155~~16,831,321 shares remaining for future repurchases. ~~Purchases~~Repurchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.

ITEM 3. DEFAULTS ONUPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~None.~~On July 27, 2022, the Talent and Compensation Committee (the “Committee”) of our Board of Directors approved the C.H. Robinson Executive Separation and Change in Control Plan (the “Executive Severance Plan”), to be effective as of July 27, 2022. The Executive Severance Plan is intended to provide severance benefits to our executives in the event of a qualifying involuntary termination of their employment under certain circumstances, including such a termination involving a change in control of the company.

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Certain of our executives, including all of our executive officers, are eligible to participate in the Executive Severance Plan. Executives who are parties to individual agreements providing for severance benefits are not eligible to participate in or receive benefits under the Executive Severance Plan. However, Messrs. Rajan and Zechmeister have agreed to waive the severance benefits provided under their employment agreements in order to be eligible for benefits under the Executive Severance Plan.

Under the Executive Severance Plan, following a termination by the company of an executive’s employment related to a reduction in staff, business reorganization, position elimination, closing of a business unit and other similar events, unless the executive’s employment is terminated for misconduct, failure to perform executive’s duties, actions which may harm the company, or any of the other reasons specified in the Executive Severance Plan (“cause”), an executive will be eligible to receive continuing base salary for 24 months (for the CEO), 18 months (for executive officers and presidents) or 12 months (for certain other vice presidents). A terminated employee will also be eligible to receive a lump-sum amount of the executive’s monthly COBRA premium payment multiplied by the same number of months as the continued base salary.

The Executive Severance Plan also provides that if an executive is terminated by the company for cause or by the executive for “good reason” (as defined in tour equity incentive plan) within 24 months after a “change in control” (as defined in our equity plan), the executive will be eligible to receive a lump sum payment equal to 2.5 (for the CEO), 2.0 (for executive officers and presidents) or 1.0 (for certain other vice presidents) times the executive’s (i) annual salary, (ii) annual target bonus, and (iii) annual cost of COBRA premiums. In addition, in connection with a termination following a change in control, all of an eligible executive’s outstanding equity awards will be fully vested (with performance awards vesting at the greater of actual or target performance levels). However, if the applicable equity incentive plan or the eligible executive’s outstanding equity award agreements provide more favorable terms than those provided by the Executive Severance Plan, the more favorable terms will apply. In addition, the Executive Severance Plan adopts a “net best benefit” approach with respect to addressing any potential parachute payments subject to Section 280G of the Internal Revenue Code.

To receive benefits under the Executive Severance Plan, an executive must sign and not revoke a separation agreement and general release of claims in the form we provide, including a non-disparagement agreement, comply with all other restrictive covenants, and the executive must work through the scheduled termination date. The Committee may amend the Executive Severance Plan from time to time to provide for different severance benefits and/or severance benefit terms and conditions, or to eliminate severance benefits entirely, for all or a portion of our executives.

The purpose of adopting the Executive Severance Plan is to provide for market competitive severance benefits for executives to aid in the attraction and retention of executive talent.

The Executive Severance Plan is attached as Exhibit 10.3 to this Quarterly Report on Form 10-Q.

ITEM 6. EXHIBITS

Exhibits filed with, or incorporated by reference into, this ~~report:~~Quarterly Report:




10.1			C.H. Robinson Worldwide, Inc. 2022 Equity Incentive Plan, effective May 5, 2022 (incorporated by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A filed on March 22, 2022).

10.2			Credit Agreement Dated as of May 6, 2022 Among C.H. Robinson Worldwide Inc., the Lenders, and U.S. Bank National Association, as Administrative Agent (incorporated by reference to the Company’s Current Form on Form 8-K filed on May 11, 2022)

10.3*			C.H. Robinson Executive Separation and Change in Control Pla n

31.1			Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1			Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2			Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101			Financial statements from the Quarterly Report on Form 10-Q of the company for the period ended June 30, ~~2021~~2022 formatted in Inline XBRL (embedded within the Inline XBRL document)

104			The cover page from the Quarterly Report on Form 10-Q of the company for the period ended June 30, ~~2021~~2022 formatted in Inline XBRL (embedded within the Inline XBRL document)

* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on July ~~30, 2021.~~29, 2022.


C.H. ROBINSON WORLDWIDE, INC.

By:						/s/ Robert C. Biesterfeld, Jr.
						Robert C. Biesterfeld, Jr.
						Chief Executive Officer


By:						/s/ Michael P. Zechmeister
						Michael P. Zechmeister
						Chief Financial Officer

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