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, 2022~~March 31, 2023

☐ 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 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: (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

☐

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 27, 2022,~~April 26, 2023, the number of shares outstanding of the registrant’s Common Stock, par value $0.10 per share, was ~~123,883,299.~~116,438,842.

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~~ 3 0 ~~, 2022,~~ March 31, 2023, and December 31, ~~2021~~2022	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three ~~and S~~ix Months Ended ~~June 30~~,March 31, 2023 and 2022 ~~and 2021~~	4
	Condensed Consolidated Statements of Stockholders' Investment for the Three Months Ended March 31, 2023 and S ~~ix Mon~~t h s ~~Ended~~ ~~June~~, 2022 ~~and 2021~~	5
	Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended Ju ~~ne 30~~,March 31, 2023 and 2022 ~~and 2021~~	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1918
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3027
Item 4.	Controls and Procedures	3027

	PART II. Other Information

Item 1.	Legal Proceedings	3128
Item 1A.	Risk Factors	3128
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3128
Item 3.	Defaults Up on Senior Securities	3128
Item 4.	Mine Safety Disclosures	3128
Item 5.	Other Information	3128
Item 6.	Exhibits	3229
	Signatures	3330

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, 2022		December 31, 2021			March 31, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	238,925	$	257,413	Cash and cash equivalents	$	239,160	$	217,482
Receivables, net of allowance for credit loss of $37,518 and $41,542		4,302,321		3,963,487
Receivables, net of allowance for credit loss of $18,567 and $28,749						Receivables, net of allowance for credit loss of $18,567 and $28,749	2,681,580		2,991,753
Contract assets, net of allowance for credit loss	Contract assets, net of allowance for credit loss	518,752		453,660		Contract assets, net of allowance for credit loss	191,711		257,597
Prepaid expenses and other	Prepaid expenses and other	108,258		129,593		Prepaid expenses and other	122,195		122,406

Total current assets	Total current assets	5,168,256		4,804,153		Total current assets	3,234,646		3,589,238
Property and equipment, net of accumulated depreciation and amortization	Property and equipment, net of accumulated depreciation and amortization	155,829		139,831		Property and equipment, net of accumulated depreciation and amortization	160,864		159,432
Goodwill	Goodwill	1,472,855		1,484,754		Goodwill	1,470,686		1,470,813
Other intangible assets, net of accumulated amortization	Other intangible assets, net of accumulated amortization	75,789		89,606		Other intangible assets, net of accumulated amortization	58,397		64,026
Right-of-use lease assets	Right-of-use lease assets	338,223		292,559		Right-of-use lease assets	357,044		372,141
Deferred tax assets	Deferred tax assets	134,404		124,900		Deferred tax assets	190,919		181,602
Other assets	Other assets	112,083		92,309		Other assets	123,028		117,312
Total assets	Total assets	$	7,457,439	$	7,028,112	Total assets	$	5,595,584	$	5,954,564

LIABILITIES AND STOCKHOLDERS’ INVESTMENT	LIABILITIES AND STOCKHOLDERS’ INVESTMENT					LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,872,497	$	1,813,473	Accounts payable	$	1,411,371	$	1,466,998
Outstanding checks	Outstanding checks	54,360		105,828		Outstanding checks	71,876		103,561
Accrued expenses:	Accrued expenses:					Accrued expenses:
Compensation	Compensation	190,428		201,421		Compensation	108,069		242,605
Transportation expense	Transportation expense	405,284		342,778		Transportation expense	145,210		199,092
Income taxes	Income taxes	38,850		100,265		Income taxes	9,333		15,210
Other accrued liabilities	Other accrued liabilities	177,645		171,266		Other accrued liabilities	176,292		168,009
Current lease liabilities	Current lease liabilities	72,686		66,311		Current lease liabilities	72,958		73,722
Current portion of debt	Current portion of debt	674,000		525,000		Current portion of debt	952,759		1,053,655
Total current liabilities	Total current liabilities	3,485,750		3,326,342		Total current liabilities	2,947,868		3,322,852

Long-term debt	Long-term debt	1,594,055		1,393,649		Long-term debt	920,272		920,049
Noncurrent lease liabilities	Noncurrent lease liabilities	281,319		241,369		Noncurrent lease liabilities	301,168		313,742
Noncurrent income taxes payable	Noncurrent income taxes payable	26,291		28,390		Noncurrent income taxes payable	27,009		28,317
Deferred tax liabilities	Deferred tax liabilities	16,521		16,113		Deferred tax liabilities	15,330		14,256
Other long-term liabilities	Other long-term liabilities	1,088		315		Other long-term liabilities	2,549		1,926
Total liabilities	Total liabilities	5,405,024		5,006,178		Total liabilities	4,214,196		4,601,142
Stockholders’ investment:	Stockholders’ investment:					Stockholders’ investment:
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	—		—		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		12,512		12,919
Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,204 shares issued, 116,437 and 116,323 outstanding						Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,204 shares issued, 116,437 and 116,323 outstanding	11,644		11,632
Additional paid-in capital	Additional paid-in capital	709,163		673,628		Additional paid-in capital	730,363		743,288
Retained earnings	Retained earnings	5,411,346		4,936,861		Retained earnings	5,631,750		5,590,440
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(87,860)		(61,134)		Accumulated other comprehensive loss	(86,383)		(88,860)
Treasury stock at cost (54,088 and 50,020 shares)		(3,992,746)		(3,540,340)
Treasury stock at cost (62,767 and 62,881 shares)						Treasury stock at cost (62,767 and 62,881 shares)	(4,905,986)		(4,903,078)
Total stockholders’ investment	Total stockholders’ investment	2,052,415		2,021,934		Total stockholders’ investment	1,381,388		1,353,422
Total liabilities and stockholders’ investment	Total liabilities and stockholders’ investment	$	7,457,439	$	7,028,112	Total liabilities and stockholders’ investment	$	5,595,584	$	5,954,564

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 March 31,
		2022		2021		2022		2021				2023		2022
Revenues:	Revenues:									Revenues:
Transportation	Transportation	$	6,465,642	$	5,240,448	$	12,993,993	$	9,800,675	Transportation		$	4,327,965	$	6,528,351
Sourcing	Sourcing	332,833		292,278		620,435		535,920		Sourcing		283,705		287,602
Total revenues	Total revenues	6,798,475		5,532,726		13,614,428		10,336,595		Total revenues		4,611,670		6,815,953
Costs and expenses:	Costs and expenses:									Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874		4,519,305		11,117,098		8,400,590		Purchased transportation and related services		3,671,031		5,650,224
Purchased products sourced for resale	Purchased products sourced for resale	299,988		264,245		559,521		484,449		Purchased products sourced for resale		254,999		259,533
Personnel expenses	Personnel expenses	444,764		362,901		858,125		723,736		Personnel expenses		383,106		413,361
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	117,184		125,671		264,545		243,887		Other selling, general, and administrative expenses		141,501		147,361
Total costs and expenses	Total costs and expenses	6,328,810		5,272,122		12,799,289		9,852,662		Total costs and expenses		4,450,637		6,470,479
Income from operations	Income from operations	469,665		260,604		815,139		483,933		Income from operations		161,033		345,474
Interest and other income/expense, net	Interest and other income/expense, net	(27,395)		(13,497)		(41,569)		(24,757)		Interest and other income/expense, net		(28,265)		(14,174)
Income before provision for income taxes	Income before provision for income taxes	442,270		247,107		773,570		459,176		Income before provision for income taxes		132,768		331,300
Provision for income taxes	Provision for income taxes	94,085		53,318		155,037		92,082		Provision for income taxes		17,877		60,952
Net income	Net income	348,185		193,789		618,533		367,094		Net income		114,891		270,348
Other comprehensive loss, net of tax		(33,596)		(162)		(26,726)		(7,448)
Other comprehensive income										Other comprehensive income		2,477		6,870
Comprehensive income	Comprehensive income	$	314,589	$	193,627	$	591,807	$	359,646	Comprehensive income		$	117,368	$	277,218

Basic net income per share	Basic net income per share	$	2.71	$	1.45	$	4.78	$	2.74	Basic net income per share		$	0.97	$	2.07
Diluted net income per share	Diluted net income per share	$	2.67	$	1.44	$	4.71	$	2.71	Diluted net income per share		$	0.96	$	2.05

Basic weighted average shares outstanding	Basic weighted average shares outstanding	128,405		133,275		129,447		133,888		Basic weighted average shares outstanding		118,636		130,499
Dilutive effect of outstanding stock awards	Dilutive effect of outstanding stock awards	1,933		1,581		1,771		1,388		Dilutive effect of outstanding stock awards		1,273		1,656
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	130,338		134,856		131,218		135,276		Diluted weighted average shares outstanding		119,909		132,155

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, 2021		129,186	$	12,919	$	673,628	$	4,936,861	$	(61,134)	$	(3,540,340)	$	2,021,934
Balance December 31, 2022															Balance December 31, 2022	116,323	$	11,632	$	743,288	$	5,590,440	$	(88,860)	$	(4,903,078)	$	1,353,422
Net income	Net income						270,348						270,348		Net income						114,891						114,891
Foreign currency adjustments	Foreign currency adjustments								6,870				6,870		Foreign currency adjustments								2,477				2,477
Dividends declared, $0.55 per share							(72,542)						(72,542)
Dividends declared, $0.61 per share															Dividends declared, $0.61 per share						(73,581)						(73,581)
Stock issued for employee benefit plans	Stock issued for employee benefit plans	418	42		(17,377)						26,239		8,904		Stock issued for employee benefit plans	430	44		(28,532)						28,113		(375)
Stock-based compensation expense	Stock-based compensation expense	—	—		24,606						—		24,606		Stock-based compensation expense	—	—		15,607						—		15,607
Repurchase of common stock	Repurchase of common stock	(1,593)	(160)								(164,458)		(164,618)		Repurchase of common stock	(316)	(32)								(31,021)		(31,053)
Balance March 31, 2022		128,011	$	12,801	$	680,857	$	5,134,667	$	(54,264)	$	(3,678,559)	$	2,095,502
Net income							348,185						348,185
Foreign currency adjustments									(33,596)				(33,596)
Dividends declared, $0.55 per share							(71,506)						(71,506)
Stock issued for employee benefit plans		316	31		377						20,478		20,886
Stock-based compensation expense		—	—		27,929						—		27,929
Repurchase of common stock		(3,211)	(320)								(334,665)		(334,985)
Balance June 30, 2022		125,116	$	12,512	$	709,163	$	5,411,346	$	(87,860)	$	(3,992,746)	$	2,052,415
Balance March 31, 2023															Balance March 31, 2023	116,437	$	11,644	$	730,363	$	5,631,750	$	(86,383)	$	(4,905,986)	$	1,381,388


		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)
Stock issued for employee benefit plans		357	36		(21,805)						18,766		(3,003)
Issuance of restricted stock, net of forfeitures		(26)	(3)		3								—
Stock-based compensation expense		—	—		23,989						—		23,989
Repurchase of common stock		(1,386)	(139)								(129,006)		(129,145)
Balance March 31, 2021		133,243	$	13,324	$	568,209	$	4,476,532	$	(53,284)	$	(3,136,594)	$	1,868,187
Net income							193,789						193,789
Foreign currency adjustments									(162)				(162)
Dividends declared, $0.51 per share							(69,094)						(69,094)
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	250	25		418						16,151		16,594		Stock issued for employee benefit plans	418	42		(17,377)						26,239		8,904
Stock-based compensation expense	Stock-based compensation expense	—	—		29,161						—		29,161		Stock-based compensation expense	—	—		24,606						—		24,606
Repurchase of common stock	Repurchase of common stock	(1,358)	(136)								(132,169)		(132,305)		Repurchase of common stock	(1,593)	(160)								(164,458)		(164,618)
Balance June 30, 2021		132,135	$	13,213	$	597,788	$	4,601,227	$	(53,446)	$	(3,252,612)	$	1,906,170
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

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,					Three Months Ended March 31,
		2022		2021			2023		2022
OPERATING ACTIVITIES	OPERATING ACTIVITIES					OPERATING ACTIVITIES
Net income	Net income	$	618,533	$	367,094	Net income	$	114,891	$	270,348
Adjustments to reconcile net income to net cash 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	45,748		46,215		Depreciation and amortization	24,380		22,486
Provision for credit losses	Provision for credit losses	(2,142)		(36)		Provision for credit losses	(6,637)		1,672
Stock-based compensation	Stock-based compensation	52,535		53,150		Stock-based compensation	15,607		24,606
Deferred income taxes	Deferred income taxes	(5,844)		(2,474)		Deferred income taxes	(10,272)		(2,916)
Excess tax benefit on stock-based compensation	Excess tax benefit on stock-based compensation	(7,553)		(9,367)		Excess tax benefit on stock-based compensation	(7,011)		(4,965)
Other operating activities	Other operating activities	(26,356)		933		Other operating activities	942		42
Changes in operating elements, net of acquisitions:	Changes in operating elements, net of acquisitions:					Changes in operating elements, net of acquisitions:
Receivables	Receivables	(378,641)		(717,340)		Receivables	326,244		(424,025)
Contract assets	Contract assets	(65,362)		(96,154)		Contract assets	66,124		(51,439)
Prepaid expenses and other	Prepaid expenses and other	(14,170)		(38,971)		Prepaid expenses and other	433		(11,924)
Accounts payable and outstanding checks	Accounts payable and outstanding checks	37,207		406,875		Accounts payable and outstanding checks	(90,724)		143,980
Accrued compensation	Accrued compensation	(9,673)		12,115		Accrued compensation	(134,795)		(79,885)
Accrued transportation expense	Accrued transportation expense	62,506		73,167		Accrued transportation expense	(53,882)		42,825
Accrued income taxes	Accrued income taxes	(54,964)		(4,431)		Accrued income taxes	(40)		48,502
Other accrued liabilities	Other accrued liabilities	1,391		210		Other accrued liabilities	8,169		8,099
Other assets and liabilities	Other assets and liabilities	(1,886)		1,612		Other assets and liabilities	1,115		(1,334)
Net cash provided by operating activities		251,329		92,598
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	254,544		(13,928)

INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Purchases of property and equipment	Purchases of property and equipment	(36,781)		(12,856)		Purchases of property and equipment	(11,371)		(10,046)
Purchases and development of software	Purchases and development of software	(32,622)		(16,981)		Purchases and development of software	(15,579)		(16,183)
Acquisitions, net of cash acquired		—		(14,749)

Other investing activities		63,208		—

Proceeds from sale of property and equipment						Proceeds from sale of property and equipment	—		2,250
Net cash used for investing activities	Net cash used for investing activities	(6,195)		(44,586)		Net cash used for investing activities	(26,950)		(23,979)

FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans	Proceeds from stock issued for employee benefit plans	53,574		36,674		Proceeds from stock issued for employee benefit plans	19,673		25,366
Stock tendered for payment of withholding taxes	Stock tendered for payment of withholding taxes	(23,784)		(23,083)		Stock tendered for payment of withholding taxes	(20,048)		(16,462)
Repurchase of common stock	Repurchase of common stock	(490,699)		(262,904)		Repurchase of common stock	(31,182)		(161,279)
Cash dividends	Cash dividends	(145,268)		(139,756)		Cash dividends	(73,435)		(72,855)
Proceeds from long-term borrowings	Proceeds from long-term borrowings	200,000		—		Proceeds from long-term borrowings	—		200,000

Proceeds from short-term borrowings	Proceeds from short-term borrowings	2,735,000		1,661,000		Proceeds from short-term borrowings	739,000		1,062,000
Payments on short-term borrowings	Payments on short-term borrowings	(2,586,000)		(1,390,038)		Payments on short-term borrowings	(840,000)		(1,015,000)

Net cash used for financing activities		(257,177)		(118,107)
Net cash (used for) provided by financing activities						Net cash (used for) provided by financing activities	(205,992)		21,770

Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(6,445)		(898)		Effect of exchange rates on cash and cash equivalents	76		1,533
Net change in cash and cash equivalents	Net change in cash and cash equivalents	(18,488)		(70,993)		Net change in cash and cash equivalents	21,678		(14,604)
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	257,413		243,796		Cash and cash equivalents, beginning of period	217,482		257,413
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	238,925	$	172,803	Cash and cash equivalents, end of period	$	239,160	$	242,809

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

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, South America, and ~~South America.~~the Middle East. 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~~North American Surface Transportation (“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 9,8, 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, ~~2021.~~2022.

~~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

For the three months ended ~~June 30, 2022,~~March 31, 2023, there were no recently issued or newly adopted accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022 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, 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


	NAST		Global Forwarding		All Other and Corporate		Total
Balance, December 31, 2022	$	1,188,076	$	206,189	$	76,548	$	1,470,813

Foreign currency translation	(865)		408		330		(127)
Balance, March 31, 2023	$	1,187,211	$	206,597	$	76,878	$	1,470,686

Goodwill is tested at least annually for impairment on November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. 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”). As part of our Step Zero Analysis, we determined that more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of ~~June 30, 2022.~~March 31, 2023.

Table of Contents

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


		June 30, 2022						December 31, 2021							March 31, 2023						December 31, 2022
		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	$	163,580	$	(96,391)	$	67,189	$	169,308	$	(88,302)	$	81,006	Customer relationships	$	161,844	$	(112,047)	$	49,797	$	162,358	$	(106,932)	$	55,426

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	$	172,180	$	(96,391)	$	75,789	$	177,908	$	(88,302)	$	89,606	Total intangibles	$	170,444	$	(112,047)	$	58,397	$	170,958	$	(106,932)	$	64,026

Amortization expense for other intangible assets is as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Amortization expense $ 5,957 $ 6,200 $ 11,991 $ 13,286


	Three Months Ended March 31,
		2023		2022
Amortization expense		$	5,815	$	6,034

Finite-lived intangible assets, by reportable segment, as of ~~June 30, 2022,~~March 31, 2023, 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 2022		$	4,048	$	7,107	$	529	$	11,684
2023		8,096		11,685		1,058		20,839
Remainder of 2023										Remainder of 2023	$	6,063	$	7,986	$	823	$	14,872
2024	2024	7,990		3,521		1,058		12,569		2024	8,008		3,539		1,097		12,644
2025	2025	7,857		2,606		1,058		11,521		2025	7,857		2,322		1,097		11,276
2026	2026	7,857		—		723		8,580		2026	7,857		377		751		8,985
2027										2027	1,310		—		503		1,813
Thereafter	Thereafter	1,310		—		686		1,996		Thereafter	—		—		207		207
Total	Total							$	67,189	Total							$	49,797

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 no Level 3 assets or liabilities as of and during the periods ended ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. There were no transfers between levels during the period.

Table of Contents

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, 2022		December 31, 2021		Maturity	June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022		Maturity	March 31, 2023		December 31, 2022
Revolving credit facility	Revolving credit facility	2.82	%	1.23	%	October 2023	$	174,000	$	525,000	Revolving credit facility	5.97	%	—	%	November 2027	$	4,000	$	—
364-day revolving credit facility	364-day revolving credit facility	2.03	%	—		May 2023	500,000		—		364-day revolving credit facility	5.62	%	5.12	%	May 2023	274,000		379,000
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
Receivables securitization facility (1)		2.26	%	0.73	%	November 2023	499,448		299,481
Receivables Securitization Facility (1)											Receivables Securitization Facility (1)	5.57	%	5.01	%	November 2023	499,759		499,655
Senior Notes (1)	Senior Notes (1)	4.20	%	4.20	%	April 2028	594,607		594,168		Senior Notes (1)	4.20	%	4.20	%	April 2028	595,272		595,049
Total debt	Total debt						2,268,055		1,918,649		Total debt						1,873,031		1,973,704
Less: Current maturities and short-term borrowing	Less: Current maturities and short-term borrowing						(674,000)		(525,000)		Less: Current maturities and short-term borrowing						(952,759)		(1,053,655)
Long-term debt	Long-term debt						$	1,594,055	$	1,393,649	Long-term debt						$	920,272	$	920,049

(1) Net of unamortized discounts and issuance costs.

SENIOR UNSECURED REVOLVING CREDIT FACILITY

We have a senior unsecured revolving credit facility (the “Credit Agreement”) with a total availability of $1 billion and a maturity date of ~~October 24, 2023.~~November 19, 2027. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of ~~applicable LIBOR~~one-month SOFR plus ~~1.13 percent)~~a specified margin). As of March 31, 2023, the variable rate equaled SOFR and a Credit Spread Adjustment of 0.10 percent plus 1.0 percent. In addition, there is a commitment fee on the average daily undrawn stated amount under ~~each letter of credit issued under~~ the facility ranging from ~~0.075~~0.07 percent to ~~0.200~~0.15 percent. The recorded amount of borrowings outstanding, if any, approximates fair value because of the short maturity period of the ~~debt.~~debt; therefore, we consider these borrowings to be a Level 2 financial liability.

The Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of ~~3.50~~3.75 to 1.00. The Credit Agreement also contains customary events of default. ~~On November 19, 2021, we amended the Credit Agreement to among other things, facilitate the terms of the Receivables Securitization Facility and include provisions for benchmark replacements to LIBOR.~~

364-DAY UNSECURED REVOLVING CREDIT FACILITY

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, there is a commitment fee on the aggregate unused commitments under the 364-day Credit Agreement ranging from 0.05 percent to 0.175 percent per annum. The recorded amount of borrowings outstanding ~~if any,~~ approximates fair value because of the short maturity period of the debt.

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

Table of Contents

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 ~~$477.9~~$476.5 million on ~~June 30, 2022.~~March 31, 2023. We estimate the fair value of the Notes primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities and considering our own risk. If the Notes were recorded at fair value, they would be classified as Level 2. Series A matures in August 2023 and is classified as current portion of debt in our Condensed Consolidated Balance Sheets as of March 31, 2023.

The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of ~~3.00~~3.50 to 1.00, a minimum interest coverage ratio of 2.00 to 1.00, and a maximum consolidated priority debt to consolidated total asset ratio of 1510 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. On November ~~19, 2021,~~21, 2022, we ~~amended~~executed a third amendment to the Note Purchase Agreement to among other things, facilitate the terms of the ~~Receivables Securitization Facility.~~Credit Agreement.

U.S. TRADE ACCOUNTS RECEIVABLE SECURITIZATION

On November 19, 2021, we entered into a 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 (the “Receivables Securitization Facility”). The Receivables Securitization Facility is based on the securitization of our U.S. trade accounts receivable with a total availability of $500 million as of ~~June 30, 2022.~~March 31, 2023. The interest rate on borrowings under the Receivables Securitization Facility is based on Bloomberg Short Term Bank Yield Index (“BSBY”) plus a margin. There is also a commitment fee we are required to pay on any unused portion of the facility. The Receivables Securitization Facility expires on November 17, 2023, unless extended by the ~~parties and is recorded as a noncurrent liability as of June 30, 2022.~~parties. The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest rate floats. We consider these borrowings to be a Level 2 financial liability. Borrowings on the Receivables Securitization Facility are included within proceeds on ~~long-term~~current borrowings on the consolidated statement of cash flows.

The Receivables Securitization Facility contains various customary affirmative and negative covenants, and it also contains customary default and termination provisions, which provide for acceleration of amounts owed under the Receivables Securitization Facility upon the occurrence of certain specified events.

On February 1, 2022, we amended the Receivables Securitization Facility primarily to increase the total availability from $300 million to $500 million pursuant to the provisions of the existing agreement. On July 7, 2022, we amended the Receivables Securitization Facility to effectively increase the receivables pool available with respect to the Receivables Securitization Facility.

SENIOR NOTES

On April 9, 2018, we issued senior unsecured notes (“Senior 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 ~~$577.0~~$578.0 million as of ~~June 30, 2022,~~March 31, 2023, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was ~~$594.6~~$595.3 million as of ~~June 30, 2022.~~March 31, 2023.

We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes. 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.

Table of Contents

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 U.S. Bank of which ~~$7.9~~$9.9 million is currently utilized for standby letters of credit related to insurance collateral as of ~~June 30, 2022.~~March 31, 2023. These standby letters of credit are renewed annually and were undrawn as of ~~June 30, 2022.~~March 31, 2023.

NOTE 5. INCOME TAXES

A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate ~~for the three and six months ended June 30, 2022 and 2021,~~ is as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Federal statutory rate	Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	Federal statutory rate		21.0	%	21.0	%
State income taxes, net of federal benefit	State income taxes, net of federal benefit	2.0		2.0		1.7		2.1		State income taxes, net of federal benefit		2.3		1.2
Share based payment awards	Share based payment awards	(0.6)		(0.1)		(0.9)		(1.5)		Share based payment awards		(5.0)		(1.3)
Foreign tax credits	Foreign tax credits	(1.4)		(1.2)		(1.1)		(0.5)		Foreign tax credits		(0.7)		(0.8)
Other U.S. tax credits and incentives	Other U.S. tax credits and incentives	(0.3)		(0.8)		(1.0)		(0.9)		Other U.S. tax credits and incentives		(3.8)		(1.9)
Foreign	Foreign	(0.5)		2.0		(0.5)		0.2		Foreign		(1.0)		(0.6)
Other	Other	1.1		(1.3)		0.8		(0.3)		Other		0.7		0.8
Effective income tax rate	Effective income tax rate	21.3	%	21.6	%	20.0	%	20.1	%	Effective income tax rate		13.5	%	18.4	%

~~We have asserted~~In the quarter ended March 31, 2023, management made the determination that it is no longer indefinitely reinvested with regard to the unremitted earnings of ~~a limited number of our~~any foreign subsidiaries ~~are permanently~~although it remains indefinitely reinvested related to ~~support expansion of our international business. If we repatriated all foreign earnings~~other taxable differences that ~~are considered~~may exist with regard to ~~be permanently reinvested, the estimated effect on income taxes payable would be an~~these subsidiaries. The change results in a one-time increase to tax expense of approximately $2.0 ~~million as of June 30, 2022.~~

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic. The CARES Act allowed for a deferral of the employer share of federal payroll taxes. We have recognized a payroll deferral of $14.7 million under the CARES Act due on December 31, 2022.

million.

As of ~~June 30, 2022,~~March 31, 2023, we have ~~$41.0~~$42.0 million of unrecognized tax benefits and related interest and penalties. It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations and settlements with taxing authorities. The total liability for unrecognized tax benefits is expected to decrease by approximately ~~$2.4~~$1.3 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 2015. We are currently under ana limited Internal Revenue Service audit for the 2015 ~~2016 and~~to 2017 tax ~~years.~~years, while the 2018 U.S. Federal statute of limitations is closed.

Table of Contents

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,
2022 2021 2022 2021
Stock options $ 3,263 $ 4,027 $ 6,482 $ 7,994
Stock awards 23,887 24,401 43,950 43,349
Company expense on ESPP discount 779 733 2,103 1,807
Total stock-based compensation expense $ 27,929 $ 29,161 $ 52,535 $ 53,150


	Three Months Ended March 31,
		2023		2022
Stock options		$	2,218	$	3,219
Stock awards		12,012		20,063
Company expense on ESPP discount		1,377		1,324
Total stock-based compensation expense		$	15,607	$	24,606

On May 5, 2022, our shareholders approved a 2022 Equity Incentive Plan (the “Plan”) and authorized an initial 4,261,884 shares for issuance of awards thereunder. ~~Upon approval of the Plan, no new awards may be made under our 2013 Equity Incentive Plan.~~ The Plan allows us to grant certain stock awards, including stock options at fair market value, performance-based restricted stock units and shares, and time-based restricted stock units, to our key employees and non-employee directors. ~~Approximately 4,424,631 shares were available for stock awards under the Plan as of June 30, 2022.~~ Shares subject to awards under the Plan or certain of our prior plans that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the Plan. There were 3,227,872 shares available for stock awards under the Plan as of March 31, 2023.

Stock Options - We have awarded stock options to certain key employees ~~through 2020.~~that vest primarily based on their continued employment. The fair value of these options was established based on the market price on the date of grant calculated using the Black-Scholes option pricing model. 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, 2022,~~March 31, 2023, unrecognized compensation expense related to stock options was ~~$20.0~~$11.2 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, performance-based restricted stock units (“PSUs”), and time-based restricted stock units. Nearly all of our awards contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. 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 1211 percent to 24 percent and are calculated using the Black-Scholes option pricing model-protective put method. The duration of the restriction period to sell or transfer vested awards, changes in the measured stock price volatility and changes in interest rates are the primary reasons for changes in the ~~discounts.~~discount. These grants are being expensed based on the terms of the awards.

Performance-based Awards

We have awarded performance-based restricted shares through 2020 to certain key ~~employees and non-employee directors.~~employees. These awards vest over a five-year period based on the company’s dilutive earnings per share growth. Beginning in 2021, we have awarded annually PSUs to certain key employees. These PSUs vest over a three-year period based ~~on the company's cumulative three-year~~achieving certain dilutive earnings per share, ~~growth and annual~~ adjusted gross ~~profit growth.~~profits, and adjusted operating margin targets. 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.~~targets mentioned above over their respective performance period.

Time-based Awards

We award time-based restricted stock units to certain key ~~employees and non-employee directors.~~employees. 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~~272,455 PSUs at target and ~~634,118~~688,341 time-based restricted stock units onin February ~~9, 2022.~~2023. The PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of ~~$76.74~~$92.15 and ~~$74.67, respectively. Time-based awards are eligible to~~$92.74, respectively, and vest over a three-year period ~~with a first vesting date of December 31, 2022.~~as described above.

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

~~Table~~date of ~~Contents~~

grant.

As of ~~June 30, 2022,~~March 31, 2023, there was unrecognized compensation expense of ~~$144.3~~$226.3 million related to previously granted stock awards assuming maximum achievement is obtained on our ~~performance-based awards.~~PSUs. The amount of future expense to be recognized will be based

Table of Contents

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

Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan (“ESPP”) allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. 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, 2022
Shares purchased
by employees
Aggregate cost
to employees
Expense recognized
by the company
51,276 $ 4,419 $ 779


Three Months Ended March 31, 2023
Shares purchased by employees	Aggregate cost to employees		Expense recognized by the company
92,373	$	7,802	$	1,377

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 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.

~~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 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.

NOTE 9.8. 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 2two 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, Europe, Asia, ~~Europe,~~ Oceania, ~~and~~ South America, and the Middle East and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

~~Table of Contents~~

•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 our Europe Surface ~~Transportation.~~Transportation segment. Europe Surface Transportation provides transportation and logistics services including truckload and groupage services across Europe.

The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Interim Chief Executive Officer. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies located in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments. Reportable segment information is as follows (dollars in thousands):

1413

Table of Contents

~~Reportable segment information as of, and for the three and six months ended June 30, 2022 and 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			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
Three Months Ended March 31, 2023										Three Months Ended March 31, 2023
Total revenues	Total revenues	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595	Total revenues	$	3,304,187	$	789,978	$	517,505	$	4,611,670
Income (loss) from operations	Income (loss) from operations	287,876		198,801		(2,744)		483,933		Income (loss) from operations	134,022		30,116		(3,105)		161,033
Depreciation and amortization	Depreciation and amortization	13,159		11,925		21,131		46,215		Depreciation and amortization	5,651		5,480		13,249		24,380
Total assets(1)	Total assets(1)	3,278,540		1,852,473		775,551		5,906,564		Total assets(1)	3,240,898		1,194,575		1,160,111		5,595,584
Average headcount		6,578		4,832		3,823		15,233
Average employee headcount										Average employee headcount	6,870		5,471		4,561		16,902

											NAST		Global Forwarding		All Other and Corporate		Consolidated
Three Months Ended March 31, 2022										Three Months Ended March 31, 2022
Total revenues										Total revenues	$	4,114,889	$	2,194,397	$	506,667	$	6,815,953
Income (loss) from operations										Income (loss) from operations	182,354		167,638		(4,518)		345,474
Depreciation and amortization										Depreciation and amortization	6,239		5,555		10,692		22,486
Total assets(1)										Total assets(1)	3,701,164		2,940,486		879,688		7,521,338
Average employee headcount										Average employee headcount	7,348		5,610		4,300		17,258

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

~~Table of Contents~~

NOTE ~~10.~~9. 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, 2022 and 2021~~ (in thousands):

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


		Six Months Ended June 30, 2022									Three Months Ended March 31, 2023
		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)	$	8,261,935	$	4,287,587	$	444,471	$	12,993,993	Transportation and logistics services(1)	$	3,304,187	$	789,978	$	233,800	$	4,327,965
Sourcing(2)	Sourcing(2)	—		—		620,435		620,435		Sourcing(2)	—		—		283,705		283,705
Total	Total	$	8,261,935	$	4,287,587	$	1,064,906	$	13,614,428	Total	$	3,304,187	$	789,978	$	517,505	$	4,611,670

		Six Months Ended June 30, 2021									Three Months Ended March 31, 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)	$	4,114,889	$	2,194,397	$	219,065	$	6,528,351
Sourcing(2)	Sourcing(2)	—		—		535,920		535,920		Sourcing(2)	—		—		287,602		287,602
Total	Total	$	6,796,904	$	2,606,833	$	932,858	$	10,336,595	Total	$	4,114,889	$	2,194,397	$	506,667	$	6,815,953

(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~~customers prior to the completion of our performance obligation and as such contract liabilities, as of ~~June 30, 2022,~~March 31, 2023, and revenue recognized in the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 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 and the timing of customer invoicing.

Table of Contents

NOTE ~~11.~~10. 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.

~~Table of Contents~~

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 on ~~the~~ commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance and parking charges. Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents. As our leases typically do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. 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, 2022.~~

March 31, 2023.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of ~~June 30,~~March 31, 2023 and December 31, 2022, and for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ is as follows (dollars in thousands):


	Three Months Ended March 31,
Lease Costs		2023		2022
Operating lease expense		$	24,653	$	21,645
Short-term lease expense		1,414		2,460
Total lease expense		$	26,067	$	24,105


	Three Months Ended March 31,
Other Lease Information	2023		2022
Operating cash flows from operating leases	$	24,815	$	21,381
Right-of-use lease assets obtained in exchange for new lease liabilities	6,739		23,646


Lease Term and Discount Rate	As of March 31, 2023		As of December 31, 2022
Weighted average remaining lease term (in years)	6.3		6.4
Weighted average discount rate	3.5	%	3.5	%

Table of Contents

Three Months Ended June 30, Six Months Ended June 30,
Lease Costs 2022 2021 2022 2021
Operating lease expense $ 23,082 $ 21,459 $ 44,727 $ 43,021
Short-term lease expense 1,137 1,462 3,597 3,063
Total lease expense $ 24,219 $ 22,921 $ 48,324 $ 46,084

Six Months Ended June 30,
Other Lease Information 2022 2021
Operating cash flows from operating leases $ 43,937 $ 42,495
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, 2022~~
~~Weighted average remaining lease term (in years)(1)~~	~~6.5~~
~~Weighted average discount rate~~	~~3.0~~	%

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

The maturities of lease liabilities as of ~~June 30, 2022,~~March 31, 2023, were as follows (in thousands):


Maturity of Lease Liabilities	Maturity of Lease Liabilities	Operating Leases		Maturity of Lease Liabilities	Operating Leases
Remaining 2022		$	38,669
2023		84,653
Remaining 2023				Remaining 2023	$	63,212
2024	2024	63,944		2024	80,204
2025	2025	47,866		2025	65,986
2026	2026	38,314		2026	54,217
2027				2027	43,301
Thereafter	Thereafter	121,832		Thereafter	115,175
Total lease payments	Total lease payments	395,278		Total lease payments	422,095
Less: Interest	Less: Interest	(41,273)		Less: Interest	(47,969)
Present value of lease liabilities	Present value of lease liabilities	$	354,005	Present value of lease liabilities	$	374,126

~~Table of Contents~~

NOTE ~~12.~~11. 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 factors. We have also considered recent trends and developments related to the current macroeconomic environment in determining our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on contract assets was not ~~significant.~~significant as of March 31, 2023.

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


Balance, December 31, ~~2021~~2022	$	~~41,542~~28,749
Provision	~~(2,411)~~(6,400)
Write-offs	~~(1,613)~~(3,782)
Balance, ~~June 30, 2022~~March 31, 2023	$	~~37,518~~18,567

Recoveries of amounts previously written off were not significant for the three ~~and six~~ months ended ~~June 30, 2022.~~March 31, 2023.

NOTE ~~13.~~12. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss is included in Stockholders' ~~investment~~Investment on our condensed consolidated balance sheets. The recorded balance on ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, was ~~$87.9~~$86.4 million and ~~$61.1~~$88.9 million, respectively. The recorded balance on ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 is comprised solely of foreign currency adjustments, including foreign currency translation.

Other comprehensive ~~loss~~income was ~~$33.6 million compared to other comprehensive loss of $0.2~~$2.5 million for the three months ended ~~June 30, 2022 and 2021, respectively. Both periods were~~March 31, 2023, primarily driven ~~primarily~~ by fluctuations in the ~~Singapore Dollar,~~Euro. Other comprehensive income was $6.9 million for the three months ended March 31, 2022, primarily driven by fluctuations in the Australian Dollar and Singapore Dollar.

NOTE 13: RESTRUCTURING

In 2022, we announced organizational changes to support our enterprise strategy of accelerating our digital transformation and productivity initiatives. We continued to execute upon these digital transformation and productivity initiatives in 2023, which resulted in further restructuring charges to better align our workforce as a result of these initiatives and in consideration of the ~~Yuan.~~changing freight transportation market. We recognized additional restructuring charges of $3.7 million in the first quarter of 2023 primarily related to workforce reductions. We expect to complete our restructuring actions by the end of 2023.

~~Other comprehensive loss was $26.7~~For severance and other operating expenses related to restructuring activities, we paid $15.2 million ~~compared~~in cash in the first quarter of 2023 with the majority of the remaining $7.5 million accrued as of March 31, 2023 expected to be paid by the end of 2023.

Table of Contents

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


	Three Months Ended March 31,
	2023
Severance(1)	$	3,138
Other personnel expenses(1)	460
Other selling, general, and administrative expenses(2)	124
Total	$	3,722

________________________________

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

(2) Amounts are included within other ~~comprehensive loss~~selling, general, and administrative expenses in our consolidated statements of ~~$7.4 million for the six months ended June 30, 2022 and 2021, respectively. Other comprehensive income and loss consisted of foreign currency adjustments, including foreign currency translation,~~operations.

The following table summarizes restructuring charges by reportable segment for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 (dollars in thousands):


	NAST		Global Forwarding		All Other and Corporate		Consolidated
Personnel expenses	$	829	$	1,538	$	1,231	$	3,598
Other selling, general, and administrative expenses	—		124		—		124

The following table summarizes activity related to our restructuring initiatives and reserves included in our consolidated balance sheets as of December 31, 2022 and ~~2021. Both periods were driven~~March 31, 2023:


	Accrued Severance and Other Personnel Expenses		Accrued Other Selling, General, and Administrative Expenses		Total
Balance, December 31, 2022	$	18,976	$	—	$	18,976
Restructuring charges	3,598		124		3,722
Cash payments	(15,178)		—		(15,178)
Accrual adjustments(1)	5		—		5
Balance, March 31, 2023	$	7,401	$	124	$	7,525

________________________________

(1) Accrual adjustments primarily ~~by fluctuations~~relate to changes in ~~the Singapore Dollar, Yuan,~~estimates for certain employee termination costs, including those settling for an amount different than originally estimated and ~~the Australian Dollar.~~foreign currency adjustments.

1817

Table of Contents

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 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 related to our search for a permanent CEO and retention of key management personnel; climate change related risks; risks associated with our indebtedness; interest rate related risks; risks associated with litigation, including contingent auto liability and insurance coverage; 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,~~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, ~~2021,~~2022, filed with the Securities and Exchange Commission on February ~~23, 2022~~17, 2023 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.

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~~We bring together customers, carriers, and suppliers to connect and grow supply chains. We are grounded in our customer promise to use our technology, which 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~~experts and powered by our information advantage, to deliver smarter solutions. These global ~~network~~solutions, combined with the expertise of ~~supply chain experts work with~~our people, deliver value–from improved cost reductions and reliability to sustainability and visibility–that our customers ~~to drive better supply chain outcomes by leveraging our experience, data, digital solutions,~~ and ~~scale.~~carriers can rely on.

1918

Table of Contents

Our adjusted gross ~~profit~~profits and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross ~~profit~~profits is calculated as gross ~~profit~~profits 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~~profits divided by total revenues. We believe adjusted gross ~~profit~~profits 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~~profits to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross ~~profit~~profits and adjusted gross profit margin. The reconciliation of gross ~~profit~~profits to adjusted gross ~~profit~~profits 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,									Three Months Ended March 31,
		2022				2021				2022				2021						2023			2022
Revenues:	Revenues:																	Revenues:
Transportation	Transportation	$	6,465,642			$	5,240,448			$	12,993,993			$	9,800,675			Transportation			$	4,327,965		$	6,528,351
Sourcing	Sourcing	332,833				292,278				620,435				535,920				Sourcing			283,705			287,602
Total revenues	Total revenues	6,798,475				5,532,726				13,614,428				10,336,595				Total revenues			4,611,670			6,815,953
Costs and expenses:	Costs and expenses:																	Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874				4,519,305				11,117,098				8,400,590				Purchased transportation and related services			3,671,031			5,650,224
Purchased products sourced for resale	Purchased products sourced for resale	299,988				264,245				559,521				484,449				Purchased products sourced for resale			254,999			259,533
Direct internally developed software amortization	Direct internally developed software amortization	6,640				4,802				12,374				9,449				Direct internally developed software amortization			7,317			5,734
Total direct costs	Total direct costs	5,773,502				4,788,352				11,688,993				8,894,488				Total direct costs			3,933,347			5,915,491
Gross profit / Gross profit margin		1,024,973		15.1	%	744,374		13.5	%	1,925,435		14.1	%	1,442,107		14.0	%
Gross profits / Gross profit margin																		Gross profits / Gross profit margin			678,323		14.7%	900,462		13.2%
Plus: Direct internally developed software amortization	Plus: Direct internally developed software amortization	6,640				4,802				12,374				9,449				Plus: Direct internally developed software amortization			7,317			5,734
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	%
Adjusted gross profits / Adjusted gross profit margin																		Adjusted gross profits / Adjusted gross profit margin			$	685,640	14.9%	$	906,196	13.3%

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross ~~profit.~~profits. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross ~~profit,~~profits, 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 March 31,
		2022			2021			2022			2021					2023		2022

Total revenues	Total revenues	$	6,798,475		$	5,532,726		$	13,614,428		$	10,336,595		Total revenues		$	4,611,670	$	6,815,953
Operating income		469,665			260,604			815,139			483,933
Income from operations														Income from operations		161,033		345,474
Operating margin	Operating margin	6.9		%	4.7		%	6.0		%	4.7		%	Operating margin		3.5%		5.1%

Adjusted gross profit		$	1,031,613		$	749,176		$	1,937,809		$	1,451,556
Operating income		469,665			260,604			815,139			483,933
Adjusted gross profits														Adjusted gross profits		$	685,640	$	906,196
Income from operations														Income from operations		161,033		345,474
Adjusted operating margin	Adjusted operating margin	45.5		%	34.8		%	42.1		%	33.3		%	Adjusted operating margin		23.5%		38.1%

2019

Table of Contents

MARKET TRENDS

The ~~cost~~balance of ~~purchased transportation~~supply and demand in the North American surface transportation market ~~remains elevated compared~~continued to ~~pre-pandemic levels and compared to~~shift towards a market with excess carrier capacity in the ~~prior year but it began to decline within the second~~first quarter of ~~2022. The decline~~2023. As shippers continue to manage through elevated inventories amidst slowing economic growth, surface transportation rates have continued to decline. As surface transportation spot rates approach the breakeven cost per mile to operate a truck the market is likely at, or nearing, the bottom of ~~purchased transportation is~~ the ~~result of an increasingly balanced freight market compared to~~industry cycle which typically results in capacity exiting the ~~tight capacity market conditions seen in recent periods. In~~market. Conversely, the ~~second~~first quarter of 2022 ~~moderating consumer demand and~~exhibited tight carrier capacity ~~entering~~for much of the period until the signs of market ~~has better aligned the overall demand with available carrier capacity.~~softening began to appear which have continued into 2023. Industry freight volumes, as measured by the Cass Freight Index, ~~decreased 2 percent during~~were approximately flat in the ~~second~~first quarter of ~~2022~~2023 compared to the ~~second~~first quarter of ~~2021.~~2022. 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 average number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender in the first quarter of 2023 declined to 1.2, which is the lowest level we have seen since the pandemic impacted the second quarter of ~~2022 declined~~2020, compared to ~~1.4, representing~~1.7 average routing guide depth in the first quarter of 2022. The average routing guide depth in the first quarter of 2023 represents that on average, the first carrier in a shipper's routing guide was executing the shipment in most cases. ~~This average routing guide penetration is reflective of a more balanced freight market compared to the 1.7 average routing guide depth in both the first quarter of 2022 and the second quarter of 2021.~~

The global forwarding market ~~also began~~continues to ~~show signs of softening as shippers continue to work through~~be negatively impacted by elevated inventory levels and ~~cautiously approach~~ the ~~upcoming peak season due to macroeconomic uncertainty and declining import~~weak consumer demand experienced in the ~~United States. The cost~~second half of ~~purchased transportation remains elevated compared to pre-pandemic levels~~2022. This has resulted in ocean freight rates and ~~compared to~~volumes declining even further following the ~~prior year but it began to decline within~~period of significant declines experienced in the second ~~quarter~~half of ~~2022 as~~2022. Several consecutive quarters of weak consumer demand has nearly eliminated the challenges from port congestion and transportation equipment shortages that were impacting the global forwarding market in recent years. In an effort to adapt to weak consumer demand, steamship lines continue rationalizing services by reducing capacity where possible with blank sailings and slow steaming. The slowdown of global demand also continues to significantly impact the air freight market. Air freight pricing and volumes have 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 moderatingsignificantly driven by shippers maintaining higher inventory levels, declining consumer 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 evidence of it edging back up again in addition to increased congestion on the United States East Coast due to a higher percentage of freight being routed to their ports. Air freight conversions back to ocean freight have continued with more shippers seeking lower supply chain costs by tolerating the longer durationdeclining price of ocean freight ~~transit. Air~~resulting in less ocean freight converting into air freight. There continues to be more than sufficient air freight capacity ~~has improved~~to support the weak demand which continues to drive rates lower in ~~certain~~many trade ~~lanes due to increased belly capacity as commercial flights become more frequent after being significantly reduced during the COVID-19 pandemic.~~lanes.

BUSINESS TRENDS

Our ~~second~~first quarter of ~~2022~~2023 surface transportation results ~~benefited from~~were largely consistent with the ~~softening~~trends discussed in the market ~~conditions, as periods where~~trends section. The excess carrier capacity in the ~~cost~~market led to significant declines in transportation rates. This resulted in declines in both our total revenues and adjusted gross profits in the first quarter of ~~purchased transportation begins~~2023 compared to ~~decline often result~~the strong results achieved in ~~improved~~the first quarter of 2022. The weak consumer demand combined with excess carrier capacity in the first quarter of 2023 resulted in lower adjusted gross profits per transaction, most significantly in our ~~portfolio.~~transactional or spot market opportunities. Industry freight volumes as measured by the Cass Freight Index ~~decreased 2 percent~~were approximately flat in the ~~second~~first quarter of ~~2022~~2023 compared to the ~~second~~first quarter of ~~2021.~~2022. Our combined NAST truckload and less than truckload (“LTL”) volume decreased ~~2.5~~4.5 percent during the ~~second~~first quarter of 2022. As a result of the softening market conditions, our contractual rates negotiated in prior quarters contributed to an increase in our adjusted gross profit per shipment and significantly reduced the percentage of shipments with negative adjusted gross profit margins.2023. Our average truckload linehaul cost per mile, excluding fuel ~~costs,~~surcharges, decreased ~~5.0~~approximately 28.5 percent during the ~~second~~first quarter of ~~2022.~~2023. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, ~~increased~~decreased approximately ~~1.5~~27.5 percent during the ~~second~~first quarter of ~~2022 due to our contractual rates negotiated in prior quarters.~~2023.

~~In our~~Our first quarter of 2023 global forwarding ~~business, we continued to experience elevated purchased transportation costs for ocean freight, which resulted~~results were largely consistent with the trends discussed in ~~growth~~the market trends section. We experienced a significant decline in both total ~~revenue~~revenues and ~~cost of purchased transportation~~adjusted gross profits in our ocean and air freight businesses compared to the ~~second~~levels achieved in the first quarter of ~~2021. The cost of purchased transportation began to moderate within~~2022. These declines were driven by the ~~second quarter of 2022 as softening~~elevated inventory levels and weak consumer demand ~~better aligned with the industry’s overall capacity. This change~~that have resulted in ~~market dynamics was most evident on the Transpacific trade lane where we experienced a decline~~significant declines in ~~Asia Pacific~~both ocean and air freight rates and volumes. Our ocean volumes ~~in the second quarter of 2022 compared to the second quarter of 2021. Despite this decline,~~decreased 14.5 percent while our ~~total ocean volumes increased 2.5 percent due to strong growth in other regions where we operate. Air~~air freight 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 market.~~

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.

~~Table of Contents~~

18.5 percent.

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select ~~second~~first quarter ~~2022~~2023 year-over-year operating comparisons to the ~~second~~first quarter ~~2021:~~2022:

•Total revenues ~~increased 22.9~~decreased 32.3 percent to ~~$6.8~~$4.6 billion, driven primarily by ~~higher pricing across most of our services~~lower ocean and ~~higher~~ truckload ~~and ocean volume.~~pricing.

•Gross profits ~~and~~decreased 24.7 percent to $678.3 million. Adjusted gross profits decreased 24.3 percent to $685.6 million, primarily driven by lower adjusted gross profits ~~increased 37.7 percent to $1.0 billion, primarily driven by higher adjusted gross profit~~ per transaction ~~across most of our services~~in ocean and ~~higher truckload and ocean volume.~~truckload.

•Personnel expenses ~~increased 22.6~~decreased 7.3 percent to ~~$444.8~~$383.1 million, primarily due to ~~higher~~cost optimization efforts, including lower average employee headcount, which decreased 2.1 percent, and ~~higher incentive compensation costs. Average headcount increased 16.2 percent.~~lower variable compensation.

•Other selling, general, and administrative (“SG&A”) expenses decreased ~~6.8~~4.0 percent to ~~$117.2~~$141.5 million, ~~and included a $25.3 million gain on the sale-leaseback~~primarily driven by decreased credit losses.

Table of ~~a facility in Kansas City. This was partially offset by higher purchased and contracted services and increased travel expenses.~~Contents

•Income from operations ~~totaled $469.7~~decreased 53.4 percent to $161.0 million, ~~up 80.2 percent due to the increase in~~driven by decreased adjusted gross profits, partially offset by the ~~increase~~decline in operating expenses.

•Adjusted operating margin of ~~45.5~~23.5 percent ~~increased 1,070~~declined 1,460 basis points.

•Interest and other income/expenses, net totaled ~~$27.4~~$28.3 million, consisting primarily of ~~$17.0~~$23.5 million of interest expense, which increased ~~$4.3~~$9.0 million versus last year due primarily to higher variable interest rates, and a ~~higher average debt balance, and $10.3~~$9.6 million ofunfavorable impact from foreign currency revaluation and realized foreign currency gains and losses ~~which increased $8.4 million versus last year due~~ primarily related to ~~a strengthening of the U.S. Dollar versus the Euro~~foreign currency impacts on intercompany assets and ~~Yuan.~~liabilities.

•The effective tax rate in the quarter was ~~21.3~~13.5 percent compared to ~~21.6~~18.4 percent in the ~~second~~first quarter last year.

•Net income totaled ~~$348.2~~$114.9 million, ~~up 79.7%~~down 57.5 percent from a year ago.

•Diluted earnings per share (EPS) ~~increased 85.4~~decreased 53.2 percent to ~~$2.67.~~$0.96.

•Cash flow from operations improved ~~$158.7~~$268.5 million in the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 driven by ~~the increase~~changes in ~~net income, partially offset by a small unfavorable change in~~operating working capital.

~~Table of Contents~~

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 March 31,
		2022			2021			% change		2022			2021			% change				2023			2022			% change
Revenues:	Revenues:																	Revenues:
Transportation	Transportation	$	6,465,642		$	5,240,448		23.4	%	$	12,993,993		$	9,800,675		32.6	%	Transportation		$	4,327,965		$	6,528,351		(33.7)	%
Sourcing	Sourcing	332,833			292,278			13.9	%	620,435			535,920			15.8	%	Sourcing		283,705			287,602			(1.4)	%
Total revenues	Total revenues	6,798,475			5,532,726			22.9	%	13,614,428			10,336,595			31.7	%	Total revenues		4,611,670			6,815,953			(32.3)	%
Costs and expenses:	Costs and expenses:																	Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	5,466,874			4,519,305			21.0	%	11,117,098			8,400,590			32.3	%	Purchased transportation and related services		3,671,031			5,650,224			(35.0)	%
Purchased products sourced for resale	Purchased products sourced for resale	299,988			264,245			13.5	%	559,521			484,449			15.5	%	Purchased products sourced for resale		254,999			259,533			(1.7)	%
Personnel expenses	Personnel expenses	444,764			362,901			22.6	%	858,125			723,736			18.6	%	Personnel expenses		383,106			413,361			(7.3)	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	117,184			125,671			(6.8)	%	264,545			243,887			8.5	%	Other selling, general, and administrative expenses		141,501			147,361			(4.0)	%
Total costs and expenses	Total costs and expenses	6,328,810			5,272,122			20.0	%	12,799,289			9,852,662			29.9	%	Total costs and expenses		4,450,637			6,470,479			(31.2)	%
Income from operations	Income from operations	469,665			260,604			80.2	%	815,139			483,933			68.4	%	Income from operations		161,033			345,474			(53.4)	%
Interest and other income/expense, net	Interest and other income/expense, net	(27,395)			(13,497)			103.0	%	(41,569)			(24,757)			67.9	%	Interest and other income/expense, net		(28,265)			(14,174)			99.4	%
Income before provision for income taxes	Income before provision for income taxes	442,270			247,107			79.0	%	773,570			459,176			68.5	%	Income before provision for income taxes		132,768			331,300			(59.9)	%
Provision for income taxes	Provision for income taxes	94,085			53,318			76.5	%	155,037			92,082			68.4	%	Provision for income taxes		17,877			60,952			(70.7)	%
Net income	Net income	$	348,185		$	193,789		79.7	%	$	618,533		$	367,094		68.5	%	Net income		$	114,891		$	270,348		(57.5)	%

Diluted net income per share	Diluted net income per share	$	2.67		$	1.44		85.4	%	$	4.71		$	2.71		73.8	%	Diluted net income per share		$	0.96		$	2.05		(53.2)	%

Average headcount		17,893			15,405			16.2	%	17,554			15,233			15.2	%
Average employee headcount																		Average employee headcount		16,902			17,258			(2.1)	%

Adjusted gross profit margin percentage(1)	Adjusted gross profit margin percentage(1)																	Adjusted gross profit margin percentage(1)
Transportation	Transportation	15.4		%	13.8		%	160 bps		14.4		%	14.3		%	10 bps		Transportation		15.2		%	13.5		%	170 bps
Sourcing	Sourcing	9.9		%	9.6		%	30 bps		9.8		%	9.6		%	20 bps		Sourcing		10.1		%	9.8		%	30 bps
Total adjusted gross profit margin	Total adjusted gross profit margin	15.2		%	13.5		%	170 bps		14.2		%	14.0		%	20 bps		Total adjusted gross profit margin		14.9		%	13.3		%	160 bps

________________________________

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

Table of Contents

A reconciliation of our reportable segments to our consolidated results can be found in Note 9,8, Segment Reporting, in Part I, Financial Information of this Quarterly Report on Form 10-Q.

Consolidated Results of Operations—Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022

Total revenues and direct costs. Total transportation revenues and ~~purchased transportation and related services increased~~direct costs decreased significantly primarily due to ~~higher~~lower pricing ~~across most of our services, most notably~~and purchased transportation costs in ocean ~~truckload,~~ and ~~LTL~~truckload services, in addition to ~~increased volumes~~volume declines in ~~truckload and ocean services. While prices remain elevated compared to pre-pandemic levels and~~nearly all service lines compared to the strong results in the prior year. The declines in pricing and purchased transportation costs were driven by the slowing global demand and excess carrier capacity discussed in the market trends and business trends sections above. This compared to the historically elevated pricing and volumes in the prior year ~~due to driver availability challenges and~~driven by the continued supply chain disruptions ~~including port congestion~~that impacted the global forwarding and ~~equipment shortages, prices began to decline within~~surface transportation markets in the ~~second~~first 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 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 as a result of higher~~direct costs decreased driven by declining pricing and cost ~~and pricing~~ per case ~~and~~with retail customers, partially offset by increased case volume ~~across all customer verticals.~~with foodservice customers.

~~Table of Contents~~

Gross profits and adjusted gross profits. Our transportation adjusted gross profits ~~increased due to elevated pricing compared to the prior year across most of our services, most notably in truckload,~~decreased driven by lower ocean and ~~LTL services, resulting~~air freight adjusted gross profits in ~~higher~~our global forwarding business driven by the slowing global demand discussed in the market trends and business trends sections above. Lower adjusted gross profits per ~~transaction. Our surface transportation~~transaction in truckload and LTL services from decreased pricing and lower volume in nearly all service lines also contributed to the decline in adjusted gross profit per transaction increased significantly driven by 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.profits. Sourcing adjusted gross profits increased driven by ~~an increase in case volume~~integrated supply chain solutions within the foodservice and ~~higher adjusted gross profits per case across all customer~~retail verticals.

Operating expenses. Personnel expenses ~~increased~~decreased primarily due to ~~an increase~~lower variable compensation reflecting the decline in ~~salaries~~results relative to the prior year and ~~incentive compensation driven by an increase in~~lower average employee headcount. SG&A expenses decreased due to ~~a $23.5 million gain on the sale-leaseback of a facility in Kansas City~~lower credit losses and lower ~~credit losses. This was partially offset by higher~~expenditures for purchased ~~and contracted~~ services ~~and increased travel expenses.~~including temporary labor.

Interest and other income/~~expense.~~expense, net. Interest and other income/expense, net primarily consisted of interest expense of ~~$17.0~~$23.5 million ~~in the second quarter of 2022~~ and a ~~$10.3~~$9.6 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses primarily ~~due~~related to ~~a strengthening of the U.S. Dollar versus the Euro~~foreign currency impacts on intercompany assets and ~~Yuan.~~liabilities. Interest expense increased $9.0 million during the first quarter of 2023, driven by a higher ~~average debt balance in the second~~variable interest rates. The first quarter of 2022 ~~compared to the second quarter of 2021. The second quarter of 2021~~ included a ~~$1.9~~$1.5 million 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~~13.5 percent for the ~~second~~first quarter of ~~2022~~2023 compared to ~~21.6~~18.4 percent for the ~~second~~first quarter of ~~2021.~~2022. The effective income tax rate for the ~~second~~first quarter of ~~2022~~2023 was ~~higher~~lower than the statutory federal income tax rate primarily due to the tax benefits of share-based payment awards, which reduced the effective tax rate by 5.0 percentage points, and U.S. tax credits and incentives, which decreased the effective income tax rate by 3.8 percentage points. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by ~~2.0~~2.3 percentage ~~points. This impact was partially offset by~~points during the ~~tax impact~~first quarter of ~~foreign tax credits, which reduced the effective tax rate by 1.4 percentage points.~~2023. The effective income tax rate for the ~~second~~first 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 by 2.0 percentage points. These impacts on the effective income tax rate were partially offset by the tax impact of foreign tax credits, which reduced the effective tax rate by 1.2 percentage points.

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

~~Total revenues and direct costs.~~ Total transportation revenues and purchased transportation and related services increased driven by higher pricing in all of our service lines, most notably in ocean and truckload services. Volumes also increased in ocean and truckload services. Purchased transportation and related service 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 the period we did see evidence that the market may be softening as demand has better aligned with available capacity within the second quarter of 2022. Our sourcing total revenue and purchased products sourced for resale increased as a result of higher cost and pricing per case and increased case volume across all customer verticals.

~~Gross profits and adjusted gross profits.~~ Our transportation adjusted gross profits increased due to increased pricing compared to the prior year across most of our services, most notably in truckload, ocean and LTL services resulting in higher adjusted gross profits per transaction. Our surface transportation adjusted gross profit 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 profits increased driven by an increase in case volume and higher adjusted gross profits per case across all customer verticals.

~~Operating expenses.~~ Personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average headcount. SG&A expenses increased primarily due to increases in purchased and contracted services, travel, and warehouse expenses, partially offset by a $23.5 million gain on the sale-leaseback of a facility in Kansas City.

~~Interest and other income/expense.~~ Interest and other income/expense primarily consisted of interest expense of $31.5 million and 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. 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.

~~Table of 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. The effective income tax rate for the six months ended June 30, 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, which reduced the effective tax rate by 1.9 percentage points, and the tax ~~impact~~benefits of share-based payment awards, which reduced the effective tax rate by ~~1.1~~1.3 percentage ~~points, 1.0 percentage points, and 0.9 percentage points, respectively.~~points. These impacts were partially offset by a higher tax rate on state income ~~tax expense,~~taxes, 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, U.S. tax credits and incentives, and the tax impact of foreign tax credits, which reduced the effective tax rate by 1.51.2 percentage points ~~0.9 percentage points, and 0.5 percentage points, respectively. These impacts were partially offset by state income tax expense, net~~in the first quarter of ~~federal benefit, which increased the effective income tax rate by 2.1 percentage points.~~2022.

Table of Contents

NAST Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)		2023		2022		% change
Total revenues	Total revenues	$	4,147,046	$	3,585,481	15.7	%	$	8,261,935	$	6,796,904	21.6	%	Total revenues		$	3,304,187	$	4,114,889	(19.7)	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	3,522,495		3,148,885		11.9	%	7,131,284		5,939,200		20.1	%	Purchased transportation and related services		2,877,532		3,608,789		(20.3)	%
Personnel expenses	Personnel expenses	225,210		185,253		21.6	%	426,012		369,182		15.4	%	Personnel expenses		176,012		200,802		(12.3)	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	122,842		100,251		22.5	%	245,786		200,646		22.5	%	Other selling, general, and administrative expenses		116,621		122,944		(5.1)	%
Total costs and expenses	Total costs and expenses	3,870,547		3,434,389		12.7	%	7,803,082		6,509,028		19.9	%	Total costs and expenses		3,170,165		3,932,535		(19.4)	%
Income from operations	Income from operations	$	276,499	$	151,092	83.0	%	$	458,853	$	287,876	59.4	%	Income from operations		$	134,022	$	182,354	(26.5)	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2022		2021		% change		2022		2021		% change				2023		2022		% change
Average headcount		7,552		6,580		14.8	%	7,442		6,578		13.1	%
Average employee headcount														Average employee headcount		6,870		7,348		(6.5)	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Truckload	Truckload					2.0	%					3.0	%	Truckload						(3.5)	%
LTL	LTL					(5.0)	%					(3.0)	%	LTL						(5.0)	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Truckload	Truckload	$	432,048	$	286,574	50.8	%	$	766,958	$	566,878	35.3	%	Truckload		$	261,519	$	334,910	(21.9)	%
LTL	LTL	166,868		128,155		30.2	%	317,610		248,272		27.9	%	LTL		137,078		150,742		(9.1)	%
Other	Other	25,635		21,867		17.2	%	46,083		42,554		8.3	%	Other		28,058		20,448		37.2	%
Total adjusted gross profits	Total adjusted gross profits	$	624,551	$	436,596	43.1	%	$	1,130,651	$	857,704	31.8	%	Total adjusted gross profits		$	426,655	$	506,100	(15.7)	%

________________________________

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

Three Months Ended ~~June 30, 2022 compared~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022

Total revenues and direct costs. NAST total revenues and ~~purchased transportation and related services increased~~direct costs decreased primarily due to ~~higher~~significantly lower pricing and purchased transportation costs in truckload services, reflecting the excess carrier capacity and slowing economic growth discussed above in the market trends section. These conditions resulted in continued significant declines in surface transportation rates in the current quarter versus the historically elevated levels of truckload pricing in ~~truckload~~the first quarter of 2022. The elevated pricing and ~~LTL services,~~purchased transportation cost environment in ~~addition to higher truckload volumes. These increases were partially offset by a decline in LTL volumes. While prices remain elevated compared to pre-pandemic levels and compared to~~ the prior year was due to the tight carrier capacity caused by driver availability challenges and the supply chain disruptions ~~including port congestion and equipment shortages, they began to decline within~~facing the ~~second~~industry in the first 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.~~

~~Table of Contents~~

Gross profits and adjusted gross profits. NAST adjusted gross profits ~~increased~~decreased due to ~~increased~~lower pricing ~~compared to the prior year~~ in truckload ~~and LTL~~ services, resulting in ~~higher~~lower adjusted gross profits per ~~transaction in addition to higher truckload volumes. These increases were partially offset by a~~shipment most notably on transactional volume. A decline in ~~LTL volumes. Our~~truckload volumes also contributed to the decline in NAST adjusted gross profit per transaction increased significantly driven by the declining costs 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.profits. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, ~~increased~~decreased approximately ~~1.5~~27.5 percent in the ~~second~~first quarter of ~~2022~~2023 compared to the ~~second~~first quarter of ~~2021.~~2022. Our truckload ~~transportation costs,~~linehaul cost per mile, excluding fuel surcharges, decreased approximately ~~5.0~~28.5 percent.

NAST LTL adjusted gross profits decreased due to lower adjusted gross profits per transaction and a decline in LTL volumes. NAST other adjusted gross profits increased primarily driven by ~~an increase in~~increased warehousing ~~services and an increase in intermodal adjusted gross profits.~~services.

Operating expenses. NAST personnel expenses ~~increased~~decreased primarily due to ~~an increase in salaries~~lower variable compensation and ~~incentive compensation driven by an increase in~~lower average employee headcount. NAST SG&A expenses ~~increased~~decreased primarily due to ~~increased investments~~a decrease in ~~technology, increased~~credit losses and lower expenditures for purchased services including temporary ~~labor, and increased warehouse expense.~~labor. 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 expenses, and are 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 7.5 percent.

~~NAST other adjusted gross profits increased driven by an increase in warehousing services.~~

~~Operating expenses.~~ NAST personnel expense 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, increased warehouse expense, and a non-recurring legal expense.

2623

Table of Contents

Global Forwarding Segment Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)		2023		2022		% change
Total revenues	Total revenues	$	2,093,190	$	1,450,794	44.3	%	$	4,287,587	$	2,606,833	64.5	%	Total revenues		$	789,978	$	2,194,397	(64.0)	%
Costs and expenses:	Costs and expenses:													Costs and expenses:
Purchased transportation and related services	Purchased transportation and related services	1,768,747		1,212,040		45.9	%	3,641,296		2,153,779		69.1	%	Purchased transportation and related services		612,059		1,872,549		(67.3)	%
Personnel expenses	Personnel expenses	106,096		82,936		27.9	%	207,372		163,945		26.5	%	Personnel expenses		92,263		101,276		(8.9)	%
Other selling, general, and administrative expenses	Other selling, general, and administrative expenses	50,790		47,606		6.7	%	103,724		90,308		14.9	%	Other selling, general, and administrative expenses		55,540		52,934		4.9	%
Total costs and expenses	Total costs and expenses	1,925,633		1,342,582		43.4	%	3,952,392		2,408,032		64.1	%	Total costs and expenses		759,862		2,026,759		(62.5)	%
Income from operations	Income from operations	$	167,557	$	108,212	54.8	%	$	335,195	$	198,801	68.6	%	Income from operations		$	30,116	$	167,638	(82.0)	%

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2022		2021		% change		2022		2021		% change				2023		2022		% change
Average headcount		5,759		4,909		17.3	%	5,690		4,832		17.8	%
Average employee headcount														Average employee headcount		5,471		5,610		(2.5)	%
Service line volume statistics	Service line volume statistics													Service line volume statistics
Ocean	Ocean					2.5	%					4.5	%	Ocean						(14.5)	%
Air	Air					(6.0)	%					1.5	%	Air						(18.5)	%
Customs	Customs					10.5	%					8.0	%	Customs						(14.0)	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Ocean	Ocean	$	228,093	$	150,916	51.1	%	$	449,494	$	286,312	57.0	%	Ocean		$	110,121	$	221,401	(50.3)	%
Air	Air	56,112		52,179		7.5	%	116,679		97,426		19.8	%	Air		30,902		60,567		(49.0)	%
Customs	Customs	27,820		25,512		9.0	%	55,315		49,735		11.2	%	Customs		23,334		27,495		(15.1)	%
Other	Other	12,418		10,147		22.4	%	24,803		19,581		26.7	%	Other		13,562		12,385		9.5	%
Total adjusted gross profits	Total adjusted gross profits	$	324,443	$	238,754	35.9	%	$	646,291	$	453,054	42.7	%	Total adjusted gross profits		$	177,919	$	321,848	(44.7)	%

________________________________

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

Three Months Ended ~~June 30, 2022 compared~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022

Total revenues and direct costs. Global ~~forwarding~~Forwarding total revenues and ~~purchased transportation~~direct costs decreased driven by weak consumer demand resulting in significant declines in both ocean and ~~related services increased due to higher pricing~~air freight rates and ~~higher~~ volumes discussed in ~~our ocean services.~~the market and business trends sections above. The ~~cost of purchased transportation and pricing continues to be elevated compared to pre-pandemic levels and compared to the~~ prior year ~~driven~~included strong ocean freight volumes and air freight tonnage and was significantly impacted by ~~the continued~~ supply chain disruptions ~~impacting the global forwarding market. The market did begin to show signs of softening which~~caused by port congestion and transportation equipment shortages that resulted in prices beginning to moderate within the second quarter of 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 conversions back to ocean freight and the impact of increased air freight capacity on purchased transportation costs in certain trade lanes due to the increased frequency of commercial flights which were significantly reduced at the onset of the COVID-19 pandemic.

~~Gross profits and adjusted gross profits.~~ ~~Ocean freight transportation adjusted gross profits increased due to higher~~elevated 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 due to an increase in transaction volume.

~~Operating expenses.~~ Personnel expenses increased primarily due to an increase in salaries and incentive compensation driven by an increase in average headcount. SG&A expenses increased due to increased investments in technology and travel expenses, partially offset by favorable credit losses.

~~Table of Contents~~

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

~~Total revenues~~ and direct costs.Total revenues and 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 cost of purchased transportation and pricing continues to be elevated compared to pre-pandemic levels and compared to the prior year driven by the continued supply chain disruptions impacting the global forwarding market.

Gross profits and adjusted gross profits. Ocean and air freight transportation adjusted gross profits ~~increased driven by higher pricing resulting in increased~~decreased due to lower adjusted gross profits per transaction in addition to ~~increased volumes.~~a decrease in volume for both services. Customs adjusted gross profits ~~increased~~decreased driven by ~~an increase~~a decrease in transaction ~~volumes.~~volume.

Operating expenses. Personnel expenses ~~increased~~decreased primarily due to ~~an increase~~lower variable compensation and a decrease in ~~salaries and incentive compensation driven by an increase in~~ average employee headcount. SG&A expenses increased due to increased investments in technology, ~~increased purchased services including temporary labor, and travel expenses. These increases were~~ partially offset by ~~favorable~~lower credit losses.

Table of Contents

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 March 31,
(dollars in thousands)	(dollars in thousands)	2022		2021		% change		2022		2021		% change		(dollars in thousands)		2023		2022		% change
Total revenues	Total revenues	$	558,239	$	496,451	12.4	%	$	1,064,906	$	932,858	14.2	%	Total revenues		$	517,505	$	506,667	2.1	%
Income (loss) from operations	Income (loss) from operations	25,609		1,300		N/M		21,091		(2,744)		N/M		Income (loss) from operations		(3,105)		(4,518)		(31.3)	%

Adjusted gross profits(1)	Adjusted gross profits(1)													Adjusted gross profits(1)
Robinson Fresh	Robinson Fresh	34,981		29,940		16.8	%	65,486		54,888		19.3	%	Robinson Fresh		31,145		30,505		2.1	%
Managed Services	Managed Services	27,618		26,234		5.3	%	55,700		51,790		7.5	%	Managed Services		28,970		28,082		3.2	%
Other Surface Transportation	Other Surface Transportation	20,020		17,652		13.4	%	39,681		34,120		16.3	%	Other Surface Transportation		20,951		19,661		6.6	%
Total adjusted gross profits	Total adjusted gross profits	$	82,619	$	73,826	11.9	%	$	160,867	$	140,798	14.3	%	Total adjusted gross profits		$	81,066	$	78,248	3.6	%

________________________________

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

Three Months Ended ~~June 30, 2022 compared~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022

Total revenues and direct costs. ~~Robinson Fresh total~~Total revenues and direct costs increased ~~due to~~driven by higher ~~pricing per case and increased case~~truckload volume ~~across all customer verticals. In addition, total revenues~~ in Europe within our Other Surface Transportation ~~increased due to higher Europe truckload pricing.~~business.

Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased driven by ~~an increase in case volume~~integrated supply chain solutions for foodservice and ~~higher adjusted gross profits per case across all customer verticals.~~retail customers. Managed Services adjusted gross profits increased due to ~~an increase in freight under management, which was driven by~~ growth ~~in business~~ with ~~both~~existing and new ~~and existing~~ customers. Other Surface Transportation adjusted gross profits increased ~~due to increased~~driven by higher Europe truckload adjusted gross ~~profits per transaction.~~profits.

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

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

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

~~Table of Contents~~

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 (in thousands):


Description	Description	Carrying Value as of June 30, 2022		Borrowing Capacity		Maturity	Description	Carrying Value as of March 31, 2023		Borrowing Capacity		Maturity
Revolving credit facility	Revolving credit facility	$	174,000	$	1,000,000	October 2023	Revolving credit facility	$	4,000	$	1,000,000	November 2027
364-day revolving credit facility	364-day revolving credit facility	500,000		500,000		May 2023	364-day revolving credit facility	274,000		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

Receivables securitization facility (1)		499,448		500,000		November 2023
Receivables Securitization Facility (1)							Receivables Securitization Facility (1)	499,759		500,000		November 2023
Senior Notes (1)	Senior Notes (1)	594,607		600,000		April 2028	Senior Notes (1)	595,272		600,000		April 2028
Total debt	Total debt	$	2,268,055	$	3,100,000		Total debt	$	1,873,031	$	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 ~~$238.9~~$239.2 million as of ~~June 30, 2022~~March 31, 2023 and ~~$257.4~~$217.5 million as of December 31, ~~2021.~~2022. Cash and cash equivalents held outside the United States totaled ~~$204.4~~$223.2 million as of ~~June 30, 2022~~March 31, 2023 and ~~$217.1~~$204.7 million as of December 31, ~~2021.~~2022.

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.

Table of Contents

The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):


		Six Months Ended June 30,							Three Months Ended March 31,
		2022		2021		% change			2023		2022		% change
Sources (uses) of cash:	Sources (uses) of cash:							Sources (uses) of cash:
Cash provided by operating activities		$	251,329	$	92,598	171.4	%
Cash provided by (used for) operating activities								Cash provided by (used for) operating activities	$	254,544	$	(13,928)	N/M

Capital expenditures	Capital expenditures	(69,403)		(29,837)				Capital expenditures	(26,950)		(26,229)
Acquisitions, net of cash acquired		—		(14,749)
Other investing activities		63,208		—

Sale of property and equipment								Sale of property and equipment	—		2,250
Cash used for investing activities	Cash used for investing activities	(6,195)		(44,586)		(86.1)	%	Cash used for investing activities	(26,950)		(23,979)		12.4	%

Repurchase of common stock	Repurchase of common stock	(490,699)		(262,904)				Repurchase of common stock	(31,182)		(161,279)
Cash dividends	Cash dividends	(145,268)		(139,756)				Cash dividends	(73,435)		(72,855)
Net borrowings on debt		349,000		270,962
Net (payments) borrowings on debt								Net (payments) borrowings on debt	(101,000)		247,000
Other financing activities	Other financing activities	29,790		13,591				Other financing activities	(375)		8,904
Cash used for financing activities		(257,177)		(118,107)		117.7	%
Cash (used for) provided by financing activities								Cash (used for) provided by financing activities	(205,992)		21,770		N/M
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(6,445)		(898)				Effect of exchange rates on cash and cash equivalents	76		1,533
Net change in cash and cash equivalents	Net change in cash and cash equivalents	$	(18,488)	$	(70,993)			Net change in cash and cash equivalents	$	21,678	$	(14,604)

Cash flow from operating activities. Cash provided by (used for) operating activities improved in the ~~six months ended June 30, 2022~~first quarter of 2023 compared to the ~~six months ended June 30, 2021~~first quarter of 2022 due to ~~increased~~a decrease in net ~~income,~~operating working capital driven by declining freight rates, most notably in our ocean and truckload services as discussed in the market and business trends sections. This impact was partially offset by a ~~small unfavorable change~~decline in net income in the first quarter of 2023. The prior year was impacted by increasing net operating working ~~capital.~~capital due to increasing pricing and volumes in nearly all services, most notably in global forwarding, which resulted in a net use of cash for operating activities in the first quarter of 2022. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as ~~working~~work with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.

~~Table of Contents~~

Cash used for investing activities. Capital expenditures consisted primarily of investments in software, which are intended to ~~increase employee productivity, automate interactions with~~develop and deliver scalable solutions by transforming our ~~customers~~processes, accelerate the pace of development and ~~contracted carriers, and~~prioritizing data integrity, improve our ~~internal workflows~~customer and carrier experience, and increase efficiency to help expand our adjusted operating margins and grow the business.

During the second quarter, we sold an office building in Kansas City, Missouri, 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.

Cash used for financing activities. Net ~~borrowings~~payments on debt in the ~~six months ended June 30, 2022 and June 30, 2021~~first quarter of 2023 were to reduce the current portion of our debt outstanding. Net borrowings in the first quarter of 2022 were primarily to fund share repurchases and working capital ~~needs and share repurchases.~~needs. The ~~increase~~decrease in cash used for share repurchases was primarily due to ~~an increase~~a decrease in the number of shares repurchased ~~and a higher average price per share~~ during the ~~six months ended June 30, 2022.~~first quarter of 2023. 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. Our 364-day revolving credit facility, Senior Notes, Series A, and Receivables Securitization Facility all have maturity dates in 2023. To the extent we reduce our outstanding debt on these facilities or our other debt facilities, it may reduce the number of shares we repurchase in 2023. 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.

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 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, 2022,~~March 31, 2023, we were in compliance with all of the covenants under ~~the Credit Agreement, 364-day Credit Agreement, Note Purchase Agreement, Senior Notes, and Receivables Securitization.~~our debt agreements.

Recently Issued Accounting Pronouncements

Refer to Note 1, Basis of Presentation, contained in this Quarterly Report and in the company's ~~2021~~2022 Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements.

Table of Contents

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the company's ~~2021~~2022 Annual Report on Form 10-K for a complete discussion regarding our critical accounting policies and estimates. As of ~~June 30, 2022,~~March 31, 2023, 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 ~~2021~~2022 Annual Report on Form 10-K for a discussion on the company’s market risk. As of ~~June 30, 2022,~~March 31, 2023, there were no material changes in market risk from those disclosed in the company’s ~~2021~~2022 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our management, including our Interim 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) as of ~~June 30, 2022.~~March 31, 2023. Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~June 30, 2022.~~March 31, 2023.

(b) Changes in internal ~~controls~~control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended ~~June 30, 2022,~~March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3027

Table of Contents

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.~~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 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 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, ~~2021,~~2022, 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,~~March 31, 2023, there were no material changes to the risk factors set forth in the ~~Company’s 2021~~company’s 2022 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 of common stock during the quarter ended ~~June 30, 2022:~~March 31, 2023:
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


	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)
January 1, 2023 - January 31, 2023	119,613	$	94.06	111,497	7,297,701
February 1, 2023 - February 28, 2023	261,636	104.01		89,750	7,207,951
March 1, 2023 - March 31, 2023	127,628	99.02		115,250	7,092,701
First Quarter 2023	508,877	$	100.42	316,497	7,092,701

(1) The total number of shares purchased based on trade date includes: (i) ~~3,212,624~~316,497 shares of common stock purchased under the authorization described below; and (ii) ~~69,078~~192,380 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) In December 2021, the Board of Directors increased the number of shares authorized for repurchase by 20,000,000 shares. As of ~~June 30, 2022,~~March 31, 2023, there were ~~16,831,321~~7,092,701 shares remaining for future repurchases. 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 UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

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.

None.

3128

Table of Contents

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 Quarterly Report:




10.1			~~C.H. Robinson Worldwide, Inc. 2022 Equity Incentive Plan, effective May 5, 2022~~Form of 2023 Interim CEO Restricted Stock Unit Award Agreement (incorporated by reference to ~~Appendix A~~Exhibit 10.1 to the ~~Company’s definitive proxy statement on Schedule 14A~~company’s Form 8-K filed on ~~March 22, 2022).~~January 3, 2023)

10.2			~~Credit~~Form of 2023 Retention Restricted Stock Unit Award 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 Exhibit 10.2 to the ~~Company’s Current Form on~~company’s Form 8-K filed on ~~May 11, 2022)~~January 3, 2023)

10.3*10.3+			Cooperation Agreement, dated January 6, 2023, by and among C.H. Robinson ~~Executive Separation~~Worldwide, Inc., Ancora Catalyst Institutional, LP, Pacific Point Wealth Advisors, LLC and ~~Change in Control Pla~~the other entities and natural persons party thereto (incorporated by reference to Exhibit 10.1 to the company’s Form 8-K filed on January 6, 2023)

10.4*+			Form of 2023 Performance Stock Unit Award Agreement

10.5*			F norm of 2023 Restricted Stock Unit Award Agreement

10.6*			F orm of 2023 Non-Employee Director Restricted Stock Unit Award Agreement

31.1			Certification of the Interim 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 Interim 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, 2022~~March 31, 2023 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, 2022~~March 31, 2023 formatted in Inline XBRL (embedded within the Inline XBRL document)


*			Filed herewith
+			Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company agrees to furnish supplementary a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission (the “SEC”) upon request.

3229

Table of Contents

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 29, 2022.~~April 28, 2023.


C.H. ROBINSON WORLDWIDE, INC.

By:						/s/ ~~Robert C. Biesterfeld, Jr.~~Scott P. Anderson
						~~Robert C. Biesterfeld, Jr.~~Scott P. Anderson
						Interim Chief Executive Officer


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

3330


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