Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q


ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 20172020
¨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
chrw-20200930_g1.jpg
C.H. ROBINSON WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
DelawareDelaware41-1883630
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
14701 Charlson Road, Eden Prairie, Minnesota55347-5088
(Address of principal executive offices)(Zip Code)
14701 Charlson Road
Eden Prairie, MN 55347
(Address of principal executive officers, 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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.10 par valueCHRWNasdaq 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  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Date File required to be submitted and posted 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 and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filerýAccelerated 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  ý
As of November 6, 2017,October 28, 2020, the number of shares outstanding of the registrant’s Common Stock, par value $.10$0.10 per share, was 139,405,298.135,946,127.





C.H. ROBINSON WORLDWIDE, INC.
TABLE OF CONTENTS
 
PART I. Financial Information
PART I. Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
PART II. Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.







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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except per share data)
September 30, 2020December 31, 2019
(In thousands, except per share data)September 30, 2017 December 31, 2016
ASSETS(unaudited)  ASSETS
Current assets:   Current assets:
Cash and cash equivalents$297,307
 $247,666
Cash and cash equivalents$252,569 $447,858 
Receivables, net of allowance for doubtful accounts of $44,364 and $39,5432,104,314
 1,711,191
Receivables, net of allowance for credit loss of $36,086 and $32,838Receivables, net of allowance for credit loss of $36,086 and $32,8382,346,384 1,974,381 
Contract assets, net of allowance for credit lossContract assets, net of allowance for credit loss187,973 132,874 
Prepaid expenses and other53,225
 49,245
Prepaid expenses and other65,773 85,005 
Total current assets2,454,846
 2,008,102
Total current assets2,852,699 2,640,118 
   
Property and equipment, net232,905
 232,953
Property and equipment, net183,244 208,423 
Goodwill1,275,550
 1,232,796
Goodwill1,473,440 1,291,760 
Other intangible assets, net160,595
 167,525
Other intangible assets, net118,741 90,931 
Deferred tax asset5,917
 2,250
Right-of-use lease assetsRight-of-use lease assets339,819 310,860 
Deferred tax assetsDeferred tax assets16,631 13,485 
Other assets45,775
 44,132
Other assets90,264 85,483 
Total assets$4,175,588
 $3,687,758
Total assets$5,074,838 $4,641,060 
   
LIABILITIES AND STOCKHOLDERS’ INVESTMENT   LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:   Current liabilities:
Accounts payable$1,033,726
 $839,736
Accounts payable$1,196,797 $984,604 
Outstanding checks70,334
 82,052
Outstanding checks72,108 78,231 
Accrued expenses:   Accrued expenses:
Compensation92,005
 98,107
Compensation130,958 112,784 
Transportation expenseTransportation expense147,590 101,194 
Income taxes11,477
 15,472
Income taxes12,074 12,354 
Other accrued liabilities59,760
 70,351
Other accrued liabilities74,781 62,706 
Current lease liabilitiesCurrent lease liabilities66,692 61,280 
Current portion of debt719,000
 740,000
Current portion of debt59,979 142,885 
Total current liabilities1,986,302
 1,845,718
Total current liabilities1,760,979 1,556,038 
   
Long-term debt750,000
 500,000
Long-term debt1,093,087 1,092,448 
Noncurrent lease liabilitiesNoncurrent lease liabilities279,212 259,444 
Noncurrent income taxes payable17,774
 18,849
Noncurrent income taxes payable22,981 22,354 
Deferred tax liabilities66,396
 65,122
Deferred tax liabilities44,942 39,776 
Other long-term liabilities241
 222
Other long-term liabilities278 270 
Total liabilities2,820,713
 2,429,911
Total liabilities3,201,479 2,970,330 
Stockholders’ investment:   Stockholders’ investment:
Preferred stock, $ .10 par value, 20,000 shares authorized; no shares issued or outstanding
 
Common stock, $ .10 par value, 480,000 shares authorized; 179,003 and 179,006 shares issued, 139,871 and 141,258 outstanding13,987
 14,126
Preferred stock, $0.10 par value, 20,000 shares authorized; 0 shares issued or outstandingPreferred stock, $0.10 par value, 20,000 shares authorized; 0 shares issued or outstanding
Common stock, $0.10 par value, 480,000 shares authorized; 179,700 and 179,380 shares issued, 135,900 and 134,895 outstandingCommon stock, $0.10 par value, 480,000 shares authorized; 179,700 and 179,380 shares issued, 135,900 and 134,895 outstanding13,590 13,490 
Additional paid-in capital427,032
 419,280
Additional paid-in capital555,416 546,646 
Retained earnings3,349,994
 3,190,578
Retained earnings4,293,598 4,144,834 
Accumulated other comprehensive loss(22,880) (61,442)Accumulated other comprehensive loss(70,855)(76,149)
Treasury stock at cost (39,132 and 37,748 shares)(2,413,258) (2,304,695)
Treasury stock at cost (43,800 and 44,485 shares)Treasury stock at cost (43,800 and 44,485 shares)(2,918,390)(2,958,091)
Total stockholders’ investment1,354,875
 1,257,847
Total stockholders’ investment1,873,359 1,670,730 
Total liabilities and stockholders’ investment$4,175,588
 $3,687,758
Total liabilities and stockholders’ investment$5,074,838 $4,641,060 
See accompanying notes to the condensed consolidated financial statements.

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C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(unaudited)(unaudited, in thousands except per share data)
 
Three Months Ended September 30,Nine Months Ended September 30,
Three Months Ended September 30, Nine Months Ended September 30, 2020201920202019
(In thousands, except per share data)2017 2016 2017 2016
Revenues:       Revenues:
Transportation$3,433,701
 $2,998,583
 $9,855,739
 $8,593,767
Transportation$3,944,981 $3,608,346 $10,835,710 $10,751,890 
Sourcing350,750
 357,171
 1,053,855
 1,135,671
Sourcing279,819 247,786 821,944 764,292 
Total revenues3,784,451
 3,355,754
 10,909,594
 9,729,438
Total revenues4,224,800 3,856,132 11,657,654 11,516,182 
Costs and expenses:  
    Costs and expenses:
Purchased transportation and related services2,869,616
 2,469,939
 8,214,856
 6,974,556
Purchased transportation and related services3,378,651 2,999,979 9,141,354 8,826,233 
Purchased products sourced for resale320,989
 327,353
 958,537
 1,038,870
Purchased products sourced for resale256,876 222,722 744,621 682,502 
Personnel expenses293,204
 256,883
 867,928
 804,631
Personnel expenses302,904 320,563 933,607 999,547 
Other selling, general, and administrative expenses106,177
 90,312
 304,030
 267,415
Other selling, general, and administrative expenses118,130 111,783 371,606 354,730 
Total costs and expenses3,589,986
 3,144,487
 10,345,351
 9,085,472
Total costs and expenses4,056,561 3,655,047 11,191,188 10,863,012 
Income from operations194,465
 211,267
 564,243
 643,966
Income from operations168,239 201,085 466,466 653,170 
Interest and other expense(10,484) (7,426) (29,154) (22,463)Interest and other expense(7,465)(13,180)(32,904)(36,935)
Income before provision for income taxes183,981
 203,841
 535,089
 621,503
Income before provision for income taxes160,774 187,905 433,562 616,235 
Provision for income taxes64,795
 74,813
 182,752
 230,422
Provision for income taxes24,245 41,011 74,948 138,373 
Net income119,186

129,028
 352,337
 391,081
Net income136,529 146,894 358,614 477,862 
       
Other comprehensive gain14,426
 518
 38,562
 491
Other comprehensive income (loss), net of taxOther comprehensive income (loss), net of tax13,236 (18,576)5,294 (18,967)
Comprehensive income$133,612
 $129,546
 $390,899
 $391,572
Comprehensive income$149,765 $128,318 $363,908 $458,895 
       
Basic net income per share$0.85
 $0.90
 $2.50
 $2.73
Basic net income per share$1.01 $1.08 $2.65 $3.48 
Diluted net income per share$0.85
 $0.90
 $2.49
 $2.73
Diluted net income per share$1.00 $1.07 $2.63 $3.45 
       
Basic weighted average shares outstanding140,422
 142,611
 140,962
 143,040
Basic weighted average shares outstanding135,671 136,380 135,385 137,274 
Dilutive effect of outstanding stock awards600
 272
 441
 205
Dilutive effect of outstanding stock awards1,457 1,096 752 1,099 
Diluted weighted average shares outstanding141,022
 142,883
 141,403
 143,245
Diluted weighted average shares outstanding137,128 137,476 136,137 138,373 
       
Cash dividends declared per share$0.45
 $0.43
 $1.35
 $1.29
See accompanying notes to the condensed consolidated financial statements.





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C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Statements of Stockholders’ Investment
(unaudited, in thousands, except per share data)

Common
Shares
Outstanding
AmountAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Total
Stockholders’
Investment
Balance December 31, 2019134,895 $13,490 $546,646 $4,144,834 $(76,149)$(2,958,091)$1,670,730 
Net income78,146 78,146 
Foreign currency adjustments, net of tax(32,195)(32,195)
Dividends declared, $0.51 per share(69,871)(69,871)
Stock issued for employee benefit plans343 34 (24,192)21,632 (2,526)
Issuance of restricted stock, net of forfeitures321 32 (32)
Stock-based compensation expense11,397 11,397 
Repurchase of common stock(973)(97)(68,466)(68,563)
Balance March 31, 2020134,586 13,459 533,819 4,153,109 (108,344)(3,004,925)1,587,118 
Net income143,939 143,939 
Foreign currency translation, net of tax24,253 24,253 
Dividends declared, $0.51 per share(69,791)(69,791)
Stock issued for employee benefit plans138 13 (1,165)9,007 7,855 
Stock-based compensation expense10,954 10,954 
Balance June 30, 2020134,724 13,472 543,608 4,227,257 (84,091)(2,995,918)1,704,328 
Net income136,529 136,529 
Foreign currency translation, net of tax13,236 13,236 
Dividends declared, $0.51 per share(70,188)(70,188)
Stock issued for employee benefit plans1,176 118 1,032 77,528 78,678 
Stock-based compensation expense10,776 10,776 
Balance September 30, 2020135,900 $13,590 $555,416 $4,293,598 $(70,855)$(2,918,390)$1,873,359 
See accompanying notes to the condensed consolidated financial statements.
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C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Statements of Stockholders’ Investment, continued
(unaudited, in thousands, except per share data)
Common
Shares
Outstanding
AmountAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive Income (Loss)
Treasury
Stock
Total
Stockholders’
Investment
Balance December 31, 2018137,284 $13,728 $521,486 $3,845,593 $(71,935)$(2,713,785)$1,595,087 
Net income161,788 161,788 
Foreign currency adjustments5,297 5,297 
Dividends declared, $0.50 per share(69,683)(69,683)
Stock issued for employee benefit plans342 34 (11,520)19,059 7,573 
Issuance of restricted stock, net of forfeitures(3)
Stock-based compensation expense17,123 17,123 
Repurchase of common stock(734)(73)(64,551)(64,624)
Balance March 31, 2019136,889 13,689 527,089 3,937,698 (66,638)(2,759,277)1,652,561 
Net income169,180 169,180 
Foreign currency translation(5,688)(5,688)
Dividends declared, $0.50 per share(69,268)(69,268)
Stock issued for employee benefit plans129 13 (681)8,367 7,699 
Issuance of restricted stock, net of forfeitures23 (2)
Stock-based compensation expense14,684 14,684 
Repurchase of common stock(1,310)(131)(109,726)(109,857)
Balance June 30, 2019135,731 13,573 541,090 4,037,610 (72,326)(2,860,636)1,659,311 
Net income146,894 146,894 
Foreign currency translation(18,576)(18,576)
Dividends declared, $0.50 per share(68,855)(68,855)
Stock issued for employee benefit plans194 20 (561)11,359 10,818 
Issuance of restricted stock, net of forfeitures(1)
Stock-based compensation expense8,850 8,850 
Repurchase of common stock(782)(79)(65,267)(65,346)
Balance September 30, 2019135,152 $13,515 $549,378 $4,115,649 $(90,902)$(2,914,544)$1,673,096 
See accompanying notes to the condensed consolidated financial statements.
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C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)(unaudited, in thousands)
 
 Nine Months Ended September 30,
(In thousands)2017 2016
OPERATING ACTIVITIES   
Net income$352,337
 $391,081
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization69,340
 52,716
Provision for doubtful accounts11,176
 2,738
Stock-based compensation24,509
 30,626
Deferred income taxes(6,779) 21,832
Excess tax benefit on stock-based compensation(11,908) (17,207)
Loss on sale/disposal of assets1,352
 566
Changes in operating elements (net of acquisitions):   
Receivables(377,280) (137,813)
Prepaid expenses and other677
 (12,148)
Other non-current assets(2,220) (2,793)
Accounts payable and outstanding checks166,152
 93,510
Accrued compensation(6,102) (50,105)
Accrued income taxes7,873
 14,048
Other accrued liabilities(10,778) (10,223)
Net cash provided by operating activities218,349
 376,828
    
INVESTING ACTIVITIES   
Purchases of property and equipment(32,132) (56,125)
Purchases and development of software(14,286) (14,986)
Acquisitions, net of cash acquired(48,446) (220,203)
Other204
 (735)
Net cash used for investing activities(94,660) (292,049)
    
FINANCING ACTIVITIES   
Proceeds from stock issued for employee benefit plans23,270
 16,003
Stock tendered for payment of withholding taxes(20,746) (36,220)
Repurchase of common stock(129,991) (109,085)
Cash dividends(192,765) (191,129)
Excess tax benefit on stock-based compensation
 17,207
Proceeds from long-term borrowings250,000
 
Proceeds from short-term borrowings6,448,000
 4,415,000
Payments on short-term borrowings(6,469,000) (4,140,000)
Net cash used for financing activities(91,232) (28,224)
    
Effect of exchange rates on cash17,184
 (335)
Net increase in cash and cash equivalents49,641
 56,220
Cash and cash equivalents, beginning of period247,666
 168,229
Cash and cash equivalents, end of period$297,307
 $224,449
Noncash transactions from investing and financing activities:   
Accrued share repurchases held in other accrued liabilities$4,000
 $2,985
Accrued purchases of property and equipment800
 4,332
 Nine Months Ended September 30,
20202019
OPERATING ACTIVITIES
Net income$358,614 $477,862 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization77,067 75,122 
Provision for credit losses12,701 642 
Stock-based compensation33,127 40,657 
Deferred income taxes(9,468)(3,360)
Excess tax benefit on stock-based compensation(17,127)(6,908)
Other operating activities13,104 (4,471)
Changes in operating elements, net of acquisitions:
Receivables(367,538)104,108 
Contract assets(56,131)9,067 
Prepaid expenses and other12,331 (18,940)
Accounts payable and outstanding checks186,755 3,871 
Accrued compensation16,458 (45,319)
Accrued transportation expense46,396 (5,323)
Accrued income taxes17,125 (7,042)
Other accrued liabilities8,907 5,210 
Other assets and liabilities4,728 (1,318)
Net cash provided by operating activities337,049 623,858 
INVESTING ACTIVITIES
Purchases of property and equipment(17,446)(26,661)
Purchases and development of software(22,815)(24,282)
Acquisitions, net of cash acquired(223,230)(59,188)
Other investing activities5,525 16,625 
Net cash used for investing activities(257,966)(93,506)
FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans100,542 40,442 
Stock tendered for payment of withholding taxes(16,535)(14,352)
Repurchase of common stock(68,563)(241,303)
Cash dividends(207,428)(207,865)
Proceeds from long-term borrowings929,000 
Payments on long-term borrowings(1,018,000)
Proceeds from short-term borrowings1,043,600 14,000 
Payments on short-term borrowings(1,126,600)(19,000)
Net cash used for financing activities(274,984)(517,078)
Effect of exchange rates on cash and cash equivalents612 (7,465)
Net change in cash and cash equivalents(195,289)5,809 
Cash and cash equivalents, beginning of period447,858 378,615 
Cash and cash equivalents, end of period$252,569 $384,424 
See accompanying notes to the condensed consolidated financial statements.

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C.H. ROBINSON WORLDWIDE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. GENERALBASIS OF PRESENTATION
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, Australia, New Zealand,Oceania, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.
Our reportable segments are North American Surface Transportation (“NAST”),NAST and Global Forwarding Robinson Fresh, andwith 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. We group offices primarily by services they provide. For financial information concerning our reportable segments, refer to Note 9.9, Segment Reporting.
The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Recently Issued Accounting Standards - RECENTLY ADOPTED ACCOUNTING STANDARDS
In May 2014,June 2016, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”("ASU") 2014-09, Revenue from Contracts with Customers, 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and in August 2015November 2018 issued a subsequent amendment, ASU 2015-14, which amended2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This update changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The update replaces the standard ashistorical “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to effective date. The new comprehensive revenue recognition standard will supersede all existing revenue recognition guidance under U.S. GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.receive cash. We plan to adoptadopted this new standard on January 1, 2018 under the modified retrospective transition method with a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods.
2020. We anticipate the adoption of this standard will change the timing of revenue recognitionhave updated our allowance for most of our transportation business from at delivery to over the transit periodcredit losses, formerly described as our performance obligation is completed. Dueallowance for doubtful accounts, significant accounting policy below as a result of adopting the new standard. The impact of adoption was not material to the short transit period of many of our performance obligations, we do not expect this change to have a material impact on ourconsolidated financial position, results of operations, financial position, or cash flows once implemented. We are in the final stages of implementing the necessary system, process, and internal control changes that will allow us to quantify the impact. The new standard will expand our existing revenue recognition disclosures upon adoption. flows.
RECENTLY ISSUED ACCOUNTING STANDARDS
In addition, we have identified certain customer contracts in our sourcing business that will change from a principal to an agent relationship under the new standard. This will cause the revenue associated with these contracts to be recognized at the net amount we charge our customers.
In February 2016,March 2020, the FASB issued ASU 2016-02, Leases2020-04, Reference Rate Reform (Topic 842). This848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional practical expedients to simplify accounting for reference rate reform. Amongst other practical expedients, the update requires a lesseeallows for contract modifications due to recognizereference rate reform for certain receivables and debt contracts to be accounted for by prospectively adjusting the effective interest rate. The amendments in this ASU are effective for all entities beginning on March 12, 2020, and companies may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effects that adoption of this guidance will have on the balance sheetconsolidated 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, 2019, includes a liabilitysummary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. We have updated these policies below to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures aboutgive effect to the amount, timing, and uncertaintyadoption of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018, which will require us to adopt these provisionsAccounting Standards Codification (“ASC”) 326 in the first quarter of 2019 using a modified retrospective approach. Early adoption2020.
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ALLOWANCE FOR CREDIT LOSSES. Accounts receivable and contract assets are reduced by an allowance for expected credit losses. We determine our allowance for expected credit losses by evaluating two approaches that consider our past credit loss experience, our customers' credit ratings, and other customer-specific and macroeconomic factors. The first approach is permitted, although we do not plan to adopt early. We have obligations under lease agreements for facilitiespooling our customers by credit rating and equipment, which are classified as operating leases underapplying an expected loss ratio based upon credit rating and number of days the existing lease standard. While we are still evaluating the impact ASU 2016-02 will have on our consolidated results of operations, financial condition, and cash flows, our financial statements will reflect an increase in both assets and liabilities due to the requirement to recognize right-of-use assets and lease liabilities on the consolidated balance sheets for our facility and equipment leases.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). This update was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, and accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification, and the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016. During the first quarter of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718)receivable has been outstanding, (i.e. aging approach). The adoptionsecond approach is to compute an expected loss ratio for each credit rating pool based upon our historical write-off experience and apply it to our accounts receivable, (i.e. loss ratio approach). These two approaches are evaluated in consideration of ASU 2016-09 prospectively impactsother known information and customer specific and macroeconomic factors, including the recordingprice of income taxes related to share-based payment awards in our consolidated statementdiesel fuel, for purposes of financial position and results of operations, as well asdetermining the operating and financing cash flows on the consolidated statements of cash flows. The magnitude of such impacts are dependent on our future grants of stock-based compensation, our future stock price in relation to the fair value of awards on grant date, and the exercise behavior of our option holders. We prospectively adopted these provisions in the first quarter of 2017. Prior periods have not been restated. This adoption resulted in a decrease in our provision for income taxes for the three and nine months ended September 30, 2017 of $1.3 million and $11.9 million, respectively.expected credit loss allowance.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, any impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment tests performed after January 1, 2017. We have not yet selected a transition date, although we do not expect the adoption of this guidance to have any impact on our consolidated financial statements as the fair value of our reporting units is substantially in excess of their respective carrying values.
In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. This update amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. The ASU is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The amendments in this update will be applied prospectively to awards modified on or after the adoption date. The future impact of ASU 2017-09 will be dependent on the nature of future stock award modifications.
NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS
The change in carrying amount of goodwill is as follows (in thousands):
NASTGlobal ForwardingAll Other and CorporateTotal
NAST Global Forwarding Robinson Fresh All Other and Corporate Total
December 31, 2016 balance$907,230
 $159,050
 $139,558
 $26,958
 $1,232,796
Balance, December 31, 2019Balance, December 31, 2019$1,015,570 $208,420 $67,770 $1,291,760 
Acquisitions3,673
 24,902
 
 
 28,575
Acquisitions176,840 507 177,347 
Translation10,320
 1,970
 1,583
 306
 14,179
Translation2,689 1,096 548 4,333 
September 30, 2017$921,223
 $185,922
 $141,141
 $27,264
 $1,275,550
Balance, September 30, 2020Balance, September 30, 2020$1,195,099 $210,023 $68,318 $1,473,440 
We evaluate our reporting units on a continual basis and, if necessary, reassign goodwill using a relative fair value allocation approach.
Goodwill is tested at least annually for impairment aton November 30, or more frequently if events or changes in circumstances indicate that the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that wouldasset might be impaired. We first perform a qualitative assessment to determine whether it is more likely than not reducethat the fair value of our reporting units is less than their respective carrying value (“Step Zero Analysis”). If the Step Zero Analysis indicates it is more likely than not that the fair value of our reporting units is less than their respective carrying value, an additional impairment assessment is performed (“Step One Analysis”). We considered whether there were any changes in circumstances indicating that our goodwill might be impaired, including consideration of the impacts of the novel coronavirus (“COVID-19”) on financial markets and our business operations, and determined the more likely than not criteria had not been met, and therefore a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or dispositionStep One Analysis was not required as of a significant portion of a reporting unit.September 30, 2020.

Identifiable intangible assets consisted of the following (in thousands):
September 30, 2020December 31, 2019
CostAccumulated AmortizationNetCostAccumulated AmortizationNet
Finite-lived intangibles
Customer relationships$294,200 $(185,934)$108,266 $237,335 $(156,879)$80,456 
Indefinite-lived intangibles
Trademarks10,475 — 10,475 10,475 — 10,475 
Total intangibles$304,675 $(185,934)$118,741 $247,810 $(156,879)$90,931 
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 September 30, 2017 December 31, 2016
 Cost Accumulated Amortization Net Cost Accumulated Amortization Net
Finite-lived intangibles           
Customer relationships$262,534
 $(112,552) $149,982
 $244,036
 $(87,199) $156,837
Non-competition agreements500
 (362) 138
 500
 (287) 213
Total finite-lived intangibles263,034
 (112,914) 150,120
 244,536
 (87,486) 157,050
            
Indefinite-lived intangibles           
Trademarks10,475
 
 10,475
 10,475
 
 10,475
Total intangibles$273,509
 $(112,914) $160,595
 $255,011
 $(87,486) $167,525
Amortization expense for other intangible assets is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Amortization expense$9,937 $9,731 $27,968 $28,699 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Amortization expense$9,157
 $6,094
 $26,875
 $18,282
Definite-livedFinite-lived intangible assets, by reportable segment, as of September 30, 2017,2020, will be amortized over their remaining lives as follows (in thousands):
NASTGlobal ForwardingAll Other and CorporateTotal
Remaining 2020$2,026 $5,056 $161 $7,243 
20218,105 14,603 638 23,346 
20228,105 14,603 638 23,346 
20238,105 11,977 638 20,720 
20247,984 4,174 638 12,796 
Thereafter17,024 2,891 900 20,815 
Total$108,266 

 NAST Global Forwarding Robinson Fresh All Other and Corporate Total
Remainder of 2017$1,955
 $7,267
 $
 $168
 $9,390
20187,820
 29,217
 
 
 37,037
20197,820
 29,217
 
 
 37,037
2020260
 26,513
 
 
 26,773
2021260
 12,992
 
 
 13,252
Thereafter706
 25,925
 
 
 26,631
Total
 
 
 
 $150,120

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 no0 Level 3 assets or liabilities as of and during the periods ended September 30, 2017,2020 and December 31, 2016.2019. There were no transfers between levels during the period.



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NOTE 4. FINANCING ARRANGEMENTS
Senior Unsecured Revolving Credit FacilityThe components of our short-term and long-term debt and the associated interest rates were as follows (dollars in thousands):
Average interest rate as ofCarrying value as of
September 30, 2020December 31, 2019MaturitySeptember 30, 2020December 31, 2019
Revolving credit facility%%October 2023$$
Senior Notes, Series A3.97 %3.97 %August 2023175,000 175,000 
Senior Notes, Series B4.26 %4.26 %August 2028150,000 150,000 
Senior Notes, Series C4.60 %4.60 %August 2033175,000 175,000 
Receivables securitization facility (1)
0.80 %2.41 %December 202059,979 142,885 
Senior Notes (1)
4.20 %4.20 %April 2028593,087 592,448 
Total debt1,153,066 1,235,333 
Less: Current maturities and short-term borrowing(59,979)(142,885)
Long-term debt$1,093,087 $1,092,448 

(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 $900 million which expires in December 2019. As$1 billion and a maturity date of September 30, 2017, and December 31, 2016, we had $719 million and $740 million, respectively, in borrowings outstanding under the Credit Agreement, which is classified as a current liability on the condensed consolidated balance sheets. As of September 30, 2017, we had remaining borrowing availability of $181 million. The recorded amount of borrowings outstanding approximates fair value because of the short maturity period of the debt; therefore, we consider these borrowings to be a Level 2 financial liability.
October 24, 2023. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of one-monthapplicable LIBOR plus a specified margin)1.125 percent). As of September 30, 2017, the variable rate equaled LIBOR plus 1.13 percent. In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility. The weighted average interest rate incurred on borrowings during the three and nine months ended September 30, 2017, was approximately 2.4facility ranging from 0.075 percent and 2.2 percent, respectively. At September 30, 2017, the interest rate incurred on borrowings was approximately 2.4to 0.200 percent. The weighted average interest rate incurred onrecorded amount of borrowings during eachoutstanding, if any, approximates fair value because of the three and nine months ended September 30, 2016, was approximately 1.4 percent and 1.5 percent, respectively. At September 30, 2016,short maturity period of the interest rate incurred on borrowing was approximately 1.5 percent.debt; therefore, we would consider these borrowings to be a Level 2 financial liability.
The Credit Agreement contains various restrictions and covenants. Among other requirements, we may not permit ourcovenants that require us to maintain certain financial ratios, including a maximum leverage ratio determined as of the end of each of our fiscal quarters, of (i) Consolidated Funded Indebtedness to (ii) EBITDA (earnings before interest, taxes, depreciation, and amortization), to exceed 3.003.50 to 1.00.
The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent may declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable.
Note Purchase AgreementNOTE PURCHASE AGREEMENT
On August 23, 2013, we entered into a Note Purchase Agreement with certain institutional investors (the “Purchasers”) named therein (the “Note Purchase Agreement”). Pursuant to the Note Purchase Agreement,On August 27, 2013, the Purchasers purchased on August 27, 2013, (i) $175,000,000an aggregate principal amount of the company’s 3.97 percent$500 million of our Senior Notes, Series A, due August 27, 2023 (the “Series A Notes”), (ii) $150,000,000 aggregate principal amount of the company’s 4.26 percent Senior Notes Series B, due August 27, 2028 (the “Series B Notes”), and (iii) $175,000,000 aggregate principal amount of the company’s 4.60 percent Senior Notes Series C due August 27, 2033 (the “Series C Notes” and, together with the Series A Notes and the Series B Notes,(collectively the “Notes”). Interest on the Notes is payable semi-annually in arrears. We applied the proceeds of the saleThe fair value of the Notes approximated $549.7 million at September 30, 2020. 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 share repurchases.similar terms and remaining maturities, and considering our own risk. If the Notes were recorded at fair value, they would be classified as a Level 2 financial liability.
The Note Purchase Agreement contains customary provisions for transactions of this type, including representationsvarious restrictions and warranties regarding the company and its subsidiaries and various covenants, including covenants that require us to maintain specifiedcertain financial ratios. The Note Purchase Agreement includes the following financial covenants: we will not permit ourratios, including a maximum leverage ratio determined as of the end of each of our fiscal quarters, of (i) Consolidated Funded Indebtedness to (ii) EBITDA (earnings before interest, taxes, depreciation, and amortization), to exceed 3.00 to 1.00; we will not permit the1.00, a minimum interest coverage ratio as of the end of each of our fiscal quarters and for the twelve-month period then ending, of (i) Consolidated EBIT (earnings before income taxes) to (ii) Consolidated Interest Expense to be less than 2.00 to 1.00;1.00, and we will not permit, asa maximum consolidated priority debt to consolidated total asset ratio of the end of each of our fiscal quarters, Consolidated Priority Debt to exceed 15 percent of Consolidated Total Assets.percent.
The Note Purchase Agreement provides for customary events of default, generally with corresponding grace periods, including, without limitation, payment defaults with respect to the Notes, covenant defaults, cross-defaults to other agreements evidencing indebtedness of the company or its subsidiaries, certain judgments against the company or its subsidiaries, and events of bankruptcy involving the company or its material subsidiaries.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.
The Notes were issued by the company to the initial purchasers in a private placement in reliance on Section 4(a)(2)
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Table of the Securities Act of 1933, as amended (the “Securities Act”). The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.Contents
The fair value of long-term debt under the Notes Purchase Agreement approximated $537.4 million at September 30, 2017. We estimate the fair value of our long-term debt 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 our long-term debt was recorded at fair value, it would be classified as Level 2.
U.S. Trade Accounts Receivable SecuritizationTRADE ACCOUNTS RECEIVABLE SECURITIZATION
On April 26, 2017, we entered into a receivables purchase agreement and related transaction documents with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Wells Fargo Bank, National Association to provideWe have a receivables securitization facility (the “Receivables Securitization Facility”). that currently expires on December 17, 2020, unless extended by the parties. The Receivables Securitization Facility is based on the securitization of certain of our U.S. trade accounts receivable and provides funding of up to $250 million. The borrowings outstandingtrade accounts receivable under the facility are owned by C.H. Robinson Receivables Securitization Facility were $250 million as of September 30, 2017LLC and are classified as long-term debt onnot available to the condensed consolidated balance sheets. The borrowings under the Receivables Securitization Facility were used to pay down amounts previously outstanding on the Credit Agreement.creditors of C.H. Robinson Worldwide, Inc., and our subsidiaries. The interest rate on borrowings under the Receivables Securitization Facility is based on the asset-backed commercial paper rate plus a margin or 30 dayone-month LIBOR plus a margin for a combined rate of 2.0 percent for the three months ended September 30, 2017 and 1.9 percent for the nine months ended September 30, 2017. The Receivables Securitization Facility expires on April 26, 2019 unless extended by the parties.0.65 percent. There is also a commitment fee we are required to pay on any unused portion of the facility.
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 including, but not limited to, the failure to pay yield, fees, and other amounts due, defaults on certain other indebtedness, failure to discharge certain judgments, insolvency events, change in control, and exceeding certain financial ratios designed to capture events negatively affecting the overall credit quality of the receivables.
As of September 30, 2017, we were in compliance with all of the covenants under the Credit Agreement, Note Purchase Agreement, and Receivables Securitization Facility.
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, therefore, we consider these borrowings to be a Level 2 financial liability.
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.
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 $703.0 million as of September 30, 2020, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was $593.1 million as of September 30, 2020. If the Senior Notes were measured at fair value in the financial statements, they would be classified as a Level 2 financial liability in the fair value hierarchy.
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.
The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens or enter into sales 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.
As of September 30, 2020, we were in compliance with all of the covenants under the Credit Agreement, Note Purchase Agreement, Receivables Securitization Facility, and Senior Notes.
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NOTE 5. INCOME TAXES
C.H. Robinson Worldwide, Inc.Our effective tax rate for the three months ended September 30, 2020 and its 802019 was 15.1 percent (or more) ownedand 21.8 percent, respectively, and our effective tax rate for the nine months ended September 30, 2020 and 2019 was 17.3 percent and 22.5 percent, respectively. The effective income tax rate for the three and nine months ended September 30, 2020 was lower than the statutory federal income tax rate primarily due to the tax impact of share-based payment awards, which reduced the effective tax rate by 3.8 percentage points and 4.1 percentage points, respectively. Foreign tax impacts also contributed to a lower federal income tax rate, reducing our effective tax rate in the three and nine months ended September 30, 2020 by 5.2 percentage points and 3.1 percentage points, respectively. This impact on the tax rate was partially offset by state income tax expense, which increased the effective income tax rate. The effective income tax rate for the three and nine months ended September 30, 2019 was higher than the statutory federal income tax rate due to state income taxes, net of federal benefit, and foreign income taxes, but was partially offset by the tax impact of share-based payment awards and the combined tax impact of Global Intangible Low-tax Income ("GILTI") and Foreign Derived Intangible Income ("FDII").

In 2019, we removed our assertion that the unremitted earnings of foreign subsidiaries were permanently reinvested with limited exceptions. If we repatriated all foreign earnings that are still considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $2.3 million as of September 30, 2020.

On March 27, 2020, the U.S. subsidiaries filegovernment enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) in response to the COVID-19 pandemic. The CARES Act allows for a consolidateddeferral of the employer share of federal return.payroll taxes otherwise due through December 31, 2020. 50 percent of the deferred amount is due December 31, 2021 and the remaining 50 percent is due December 31, 2022. This provision allows us to defer certain federal payroll deposits and invest this cash back into the business without any interest cost. The CARES Act also provides for a tax credit of up to $5,000 related to wages and health benefits provided to an employee whose work from March 17, 2020 through December 31, 2020 was impacted by COVID-19. Through September 30, 2020, we have recognized a payroll deferral and tax credit of $19.3 million and $0.7 million, respectively, under the CARES Act. We file unitary or separate state returns basedwill continue evaluating the impact of the CARES Act over the remainder of 2020.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including but not limited to, reducing the U.S. federal corporate tax rate from 35 percent to 21 percent and adding new rules for GILTI and FDII. We have included the tax impact of both GILTI and FDII in our income tax expense for the three and nine months ended September 30, 2020, and 2019. The Treasury Department issued final regulatory guidance related to both GILTI and FDII on state filing requirements.July 15, 2020. The effective date of these regulations is generally January 1, 2021, absent an election to apply these rules retroactively to a 2018 effective date. We are reviewing these regulations and the potential to elect a 2018 effective date. The impact of this new guidance is not expected to have a material impact on full-year 2020 results.

On September 29, 2020, the Treasury Department issued final and proposed regulations on determining the foreign tax credit, and allocating and apportioning deductions, under the Internal Revenue Code. We are still completing our review of these regulations, but they did not have a material impact on the third quarter of 2020 and we do not expect them to have a material impact on full-year 2020 results.

As of September 30, 2020, we have $39.0 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 $2.1 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 2010. During the first quarter2013. We are currently under an Internal Revenue Service audit for 2015, 2016 and 2017 tax years.
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Table of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718). This adoption resulted in a decrease in our provision for income taxes for the three and nine months ended September 30, 2017 of $1.3 million and $11.9 million, respectively. We have asserted that we will indefinitely reinvest earnings of foreign subsidiaries to support expansion of our international business. If we repatriated all foreign earnings, the estimated effect on income taxes payable would be an increase of approximately $29.0 million as of September 30, 2017.Contents
Our effective tax rate for the three months ended September 30, 2017 and 2016 was 35.2 percent and 36.7 percent, respectively, and our effective tax rate for the nine months ended September 30, 2017 and 2016 was 34.2 percent and 37.1 percent, respectively. The effective income tax rate for the three months ended September 30, 2017 was higher than the statutory federal income tax rate due to state income taxes, net of federal benefit. The effective income tax rate for the nine months ended September 30, 2017 was lower than the statutory federal income tax rate due to the adoption of ASU 2016-09.


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 September 30, Nine Months Ended September 30,Three Months Ended September 30,Nine Months Ended September 30,
2017 2016 2017 20162020201920202019
Stock options$1,715
 $603
 $5,341
 $5,818
Stock options$5,081 $4,829 $15,119 $13,539 
Stock awards5,427
 3,747
 17,149
 22,768
Stock awards5,042 3,470 15,736 24,798 
Company expense on ESPP discount525
 491
 2,019
 2,040
Company expense on ESPP discount653 551 2,272 2,320 
Total stock-based compensation expense$7,667
 $4,841
 $24,509
 $30,626
Total stock-based compensation expense$10,776 $8,850 $33,127 $40,657 

On May 12, 2016,9, 2019, our shareholders approved an amendment to and restatement of our 2013 Equity Incentive Plan which(the “Plan”) to increase the number of shares authorized for award by 4,000,000 shares. The Plan allows us to grant certain stock awards, including stock options at fair market value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 13,041,80317,041,803 shares can be granted under this plan.plan following the amendment and restatement. Approximately 4,928,9882,974,170 shares were available for stock awards under the plan as of September 30, 2017.2020. Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan.
Stock Options - We have awarded time-based and performance-based stock options to certain key employees. These options are subject to certain vesting requirements over a five-year period based on the company’s earnings growth. Any options remaining unvested at the end of the five-year vesting period are forfeited to the company. Although participants can exercise options via a stock swap exercise, we do not issue reloads (restoration options) on the grants.
The fair value of these options is established based on the market price on the date of grant, discounted for post-vesting holding restrictions, calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. As of September 30, 2017,2020, unrecognized compensation expense related to stock options was $51.0$48.0 million. The amount of future expense to be recognized will be based on the passage of time and the company’s earnings growth,employees' continued employment.
We granted 1,660,548 stock options on February 5, 2020. These awards had a weighted average exercise price of $72.74 and certain other conditions.a weighted average grant date fair value of $13.88. These awards are eligible to vest over a five-year period with a first vesting date of December 31, 2020.
Full ValueStock Awards - We have awarded performanceperformance-based restricted shares and restricted stock units and time-based restricted stock units to certain key employees and non-employee directors. ThesePerformance-based awards are subject to certain vesting requirements over a five-year period, based on the company’sour earnings growth. Time-based awards vest primarily based on the employee's continued employment. The awards also contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for post-vesting holding restrictions. The discounts on outstanding grants vary from 1512 percent to 22 percent and are calculated using the Black-Scholes option pricing model-protective put method. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards.
We granted 405,776 performance-based restricted shares and restricted stock units and 329,586 time-based restricted shares and restricted stock units on February 5, 2020. These awards had a weighted average grant date fair value of $59.34 and are eligible to vest over a five-year period with a first vesting date of December 31, 2020.
We have also awarded restricted shares andissued restricted stock units to certain key employees that vest primarily based on their continued employment. The value of these awards is established by the market price on the date of the grant and is being expensed over the vesting period of the award.
We have also issued to certain key employees and non-employee directors, restricted stock units which are fully vested upon issuance. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned.
As of September 30, 2017,2020, there was unrecognized compensation expense of $119.3$125.3 million related to previously granted full value awards. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and certain other conditions.

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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. 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 (dollar amounts in thousands):activity:
Three Months Ended September 30, 2020
Shares purchased
by employees
Aggregate cost
to employees
Expense recognized
by the company
42,445 $3,699,626 $652,875 
Three Months Ended September 30, 2017
Shares purchased
by employees
 
Aggregate cost
to employees
 
Expense recognized
by the company
45,986
 $2,975
 $525


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 17certain 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.



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NOTE 8. ACQUISITIONS
Prime Distribution Services
On August 31, 2017,March 2, 2020, we acquired all of the outstanding shares of Milgram & Company Ltd. ("Milgram"Prime Distribution Services (“Prime Distribution”), a leading provider of retail consolidation services in North America, for $222.7 million in cash. This acquisition adds scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services.
The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the purposeacquisition of expanding our global presence and bringing additional capabilities and expertise to our portfolio. Total purchase consideration, net of cash acquired, was $46.7 million, which was paid in cash. We used advances under the Credit Agreement to fund part of the cash consideration.Prime Distribution.
Current assets$8,879 
Property and equipment7,356 
Right-of-use lease assets35,017 
Other intangible assets55,000 
Goodwill176,840 
Total assets283,092 
Current liabilities12,243 
Lease liabilities35,017 
Deferred tax liabilities13,114 
Net assets acquired$222,718 

Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):
Estimated Life (years)
Customer relationships7$55,000 
 Estimated Life (years)  
Customer relationships7 $14,004
There was $176.8 million of goodwill recorded related to the acquisition of Prime Distribution. The MilgramPrime Distribution goodwill is a result of acquiring and retaining the Milgram existingPrime Distribution workforce and expected synergies from integrating its business into ours. Purchase accounting is considered preliminary, subject to revision primarily related to certain potential post-closing and working capital adjustments, as final information was not available as of September 30, 2017.substantially complete. The goodwill iswill not be deductible for tax purposes. The acquisition was effective as of February 29, 2020, and therefore the results of operations of MilgramPrime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since SeptemberMarch 1, 2017.2020.
Dema Service S.p.A
On September 30, 2016,May 22, 2019, we acquired all of the outstanding stockshares of APC Logistics ("APC"Dema Service S.p.A. (“Dema Service”). to strengthen our existing footprint in Italy. Total purchase consideration, net of cash acquired was $229.4$14.2 million, which was paid in cash. We used advances under the Credit Agreement to fund part of the cash consideration. The following is a summary of the allocation of purchase price consideration to the estimated fair value of net assets for the acquisition of APC (in thousands):
Cash$10,181
Receivables37,190
Inventory and other current assets2,609
Property and equipment1,696
Identifiable intangible assets78,842
Goodwill132,797
Other noncurrent assets70
Long term deferred tax asset814
Total assets264,199
  
Accounts payable(22,147)
Accrued expenses(12,700)
Estimated net assets acquired$229,352
Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):
 Estimated Life (years)  
Customer relationships7 $78,842
Estimated Life (years)
Customer relationships7$4,252 
There was $7.8 million of goodwill recorded related to the acquisition of Dema Service. The APCDema Service goodwill is a result of acquiring and retaining the APC existingDema Service workforce and expected synergies from integrating theirits business into ours. ThePurchase accounting is considered complete. NaN goodwill is not deductiblewas recognized for Italian tax purposes. Thepurposes from the acquisition. The results of operations of APCDema Service have been included as part of the All Other and Corporate segment in our consolidated financial statements since October 1, 2016. Pro forma financial informationMay 23, 2019.



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The Space Cargo Group
On February 28, 2019, we acquired all of the outstanding shares of The Space Cargo Group (“Space Cargo”) for prior periods is not presented because we believethe purpose of expanding our presence and capabilities in Spain and Colombia. Total purchase consideration, net of cash acquired, was $45.5 million, which was paid in cash.
Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):
Estimated Life (years)
Customer relationships7$16,439 
There was $26.4 million of goodwill recorded related to the acquisition to be not material toof Space Cargo. The Space Cargo goodwill is a result of acquiring and retaining the Space Cargo workforce and expected synergies from integrating its business into ours. Purchase accounting is considered complete. NaN goodwill was recognized for Spanish tax purposes from the acquisition. The results of operations of Space Cargo have been included as part of the Global Forwarding segment in our consolidated results. During the first quarter of 2017, we paid $1.8 million resulting from a working capital adjustment due to the sellers per the terms of the agreement.financial statements since March 1, 2019.


NOTE 9. SEGMENT REPORTING
Our reportable segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers. Beginning with the fourth quarter of 2016, based on certain internal reporting changes, we identified threeWe identify 2 reportable segments in addition to All Other and Corporate as follows:summarized below:
North American Surface Transportation-NASTTransportation—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, LTL,less than truckload (“LTL”), and intermodal.
Global Forwarding-GlobalForwarding—Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Australia, New Zealand,Oceania, and South America and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, airfreight services, and customs brokerage.
All Other and Corporate—All Other and Corporate includes our Robinson Fresh-Robinson 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 under the trade name of Robinson Fresh. Our sourcing services primarily includeincluding the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items. Robinson Fresh sources products from around the world and has a physical presence in North America,Managed Services provides Transportation Management Services, or Managed TMS®. Other Surface Transportation revenues are primarily earned by Europe Asia, and South America. This segment oftenSurface Transportation. Europe Surface Transportation provides the logistics and transportation of the products they sell, in additionservices similar to temperature controlled transportation services for its customers.NAST across Europe.
All Other and Corporate-All Other and Corporate includes our Managed Services segment, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses. Managed Services provides Transportation Management Services, or Managed TMS®. Other Surface Transportation revenues are primarily earned by Europe Surface Transportation. Europe Surface Transportation provides services similar to NAST across Europe.
The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Chief Executive Officer. The accounting policies of our reportingreportable segments are the same as those described in the summary of significant accounting policies inpolicies. We do not report our Annual Report on Form 10-Kintersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the year ended December 31, 2016. Segment information for prior years has been retroactively recast to align with current year presentation. Segmentperformance of our reportable segments.
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Reportable segment information as of, and for the three and nine months ended September 30, 20172020 and 2016,2019, is as follows (dollars in thousands):

NASTGlobal ForwardingAll Other and CorporateConsolidated
Three Months Ended September 30, 2020
Total revenues$2,923,842 $831,957 $469,001 $4,224,800 
Net revenues367,943 157,657 63,673 589,273 
Income (loss) from operations122,526 46,299 (586)168,239 
Depreciation and amortization7,095 9,385 10,436 26,916 
Total assets(1)
3,041,974 1,148,118 884,746 5,074,838 
Average headcount6,702 4,607 3,595 14,904 
NASTGlobal ForwardingAll Other and CorporateConsolidated
Three Months Ended September 30, 2019
Total revenues$2,826,308 $597,695 $432,129 $3,856,132 
Net revenues433,760 135,815 63,856 633,431 
Income from operations176,200 24,676 209 201,085 
Depreciation and amortization5,734 9,186 10,560 25,480 
Total assets(1)
2,649,259 995,137 992,153 4,636,549 
Average headcount7,448 4,790 3,544 15,782 

 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Three Months Ended September 30, 2017           
Revenues$2,469,420
 $552,134
 $613,646
 $149,251
 $
 $3,784,451
  Intersegment revenues(1)
115,796
 7,873
 43,272
 3,228
 (170,169) 
Total Revenues$2,585,216
 $560,007
 $656,918
 $152,479
 $(170,169) $3,784,451
Net Revenues$377,403
 $129,842
 $54,253
 $32,348
 $
 $593,846
Income from Operations151,392
 31,125
 11,586
 362
 
 194,465
Depreciation and amortization5,808
 8,455
 1,190
 8,510
 
 23,963
Total assets(2)
2,297,980
 840,762
 413,520
 623,326
 
 4,175,588
Average headcount6,998
 4,301
 970
 2,634
 
 14,903
            
            
            
 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Three Months Ended September 30, 2016           
Revenues$2,252,187
 $390,830
 $590,385
 $122,352
 $
 $3,355,754
  Intersegment revenues(1)
79,728
 8,742
 32,255
 100
 (120,825) 
Total Revenues$2,331,915
 $399,572
 $622,640
 $122,452
 $(120,825) $3,355,754
Net Revenues$378,073
 $93,368
 $57,036
 $29,985
 $
 $558,462
Income from Operations171,733
 17,047
 17,733
 4,754
 
 211,267
Depreciation and amortization5,547
 5,073
 983
 6,054
 
 17,657
Total assets(2)
2,115,467
 625,267
 405,832
 517,496
 
 3,664,062
Average headcount (3)
6,869
 3,559
 956
 2,322
 
 13,706
NASTGlobal ForwardingAll Other and CorporateConsolidated
Nine Months Ended September 30, 2020
Total Revenues$8,222,879 $2,070,161 $1,364,614 $11,657,654 
Net Revenues1,120,277 448,931 202,471 1,771,679 
Income (loss) from operations357,898 117,033 (8,465)466,466 
Depreciation and amortization19,550 27,740 29,777 77,067 
Total assets(1)
3,041,974 1,148,118 884,746 5,074,838 
Average headcount6,870 4,716 3,591 15,177 
NASTGlobal ForwardingAll Other and CorporateConsolidated
Nine Months Ended September 30, 2019
Total Revenues$8,495,145 $1,727,745 $1,293,292 $11,516,182 
Net Revenues1,406,728 404,987 195,732 2,007,447 
Income (loss) from operations592,215 65,497 (4,542)653,170 
Depreciation and amortization18,124 27,427 29,571 75,122 
Total assets(1)
2,649,259 995,137 992,153 4,636,549 
Average headcount7,436 4,748 3,398 15,582 

(1) Intersegment revenues represent the sales between our segments and are eliminated to reconcile to our consolidated results.
(2) All cash and cash equivalents are included in All Other and Corporate.
(3) Average headcount does not include employees from APC added on
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NOTE 10. REVENUE FROM CONTRACTS WITH CUSTOMERS

A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three and nine months ended September 30, 2016.2020 and 2019 (in thousands):

Three Months Ended September 30, 2020
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$2,923,842 $831,957 $189,182 $3,944,981 
Sourcing(2)
279,819 279,819 
Total$2,923,842 $831,957 $469,001 $4,224,800 
Three Months Ended September 30, 2019
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$2,826,308 $597,695 $184,343 $3,608,346 
Sourcing(2)
247,786 247,786 
Total$2,826,308 $597,695 $432,129 $3,856,132 


Nine Months Ended September 30, 2020
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$8,222,879 $2,070,161 $542,670 $10,835,710 
Sourcing(2)
821,944 821,944 
Total$8,222,879 $2,070,161 $1,364,614 $11,657,654 
Nine Months Ended September 30, 2019
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$8,495,145 $1,727,745 $529,000 $10,751,890 
Sourcing(2)
764,292 764,292 
Total$8,495,145 $1,727,745 $1,293,292 $11,516,182 

(1) Transportation and logistics services performance obligations are completed over time.
 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Nine Months Ended September 30, 2017           
Revenues$7,110,223
 $1,549,742
 $1,821,094
 $428,535
 $
 $10,909,594
  Intersegment revenues(1)
329,193
 23,456
 116,281
 13,776
 (482,706) 
Total Revenues$7,439,416
 $1,573,198
 $1,937,375
 $442,311
 $(482,706) $10,909,594
Net Revenues$1,109,749
 $357,411
 $171,936
 $97,105
 $
 $1,736,201
Income from Operations447,553
 75,006
 40,487
 1,197
 
 564,243
Depreciation and amortization17,104
 24,574
 3,534
 24,128
 
 69,340
Total assets(2)
2,297,980
 840,762
 413,520
 623,326
 
 4,175,588
Average headcount6,921
 4,113
 966
 2,590
 
 14,590
            
            
            
 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Nine Months Ended September 30, 2016           
Revenues$6,456,281
 $1,098,715
 $1,814,682
 $359,760
 $
 $9,729,438
  Intersegment revenues(1)
211,540
 23,585
 83,200
 642
 (318,967) 
Total Revenues$6,667,821
 $1,122,300
 $1,897,882
 $360,402
 $(318,967) $9,729,438
Net Revenues$1,161,074
 $283,458
 $183,041
 $88,439
 $
 $1,716,012
Income from Operations516,805
 56,300
 62,777
 8,084
 
 643,966
Depreciation and amortization16,551
 15,231
 2,590
 18,344
 
 52,716
Total assets(2)
2,115,467
 625,267
 405,832
 517,496
 
 3,664,062
Average headcount (3)
6,767
 3,523
 939
 2,249
 
 13,478
(2) Sourcing performance obligations are completed at a point in time.
We typically do not receive consideration and amounts are not due from our customer prior to the completion of our performance obligation and as such contract liabilities, as of September 30, 2020, and revenue recognized in the three and nine months ended September 30, 2020 and 2019 resulting from contract liabilities was not significant. Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon shipments in-transit at period end.
(1) Intersegment revenues representNOTE 11. LEASES

We determine if our contractual agreements contain a lease at inception. A lease is identified when a contract allows us the sales betweenright 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, 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 segmentscustomers’ 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 eliminatednot considered leases. In addition, we have made a policy election to reconcilenot apply the guidance of ASC 842 to our consolidated results.leases with a term of 12 months or less as allowed by the standard. These leases are recognized as expense on a straight-line basis over the lease term.
(2) All cash and cash equivalents
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Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities. A right-of-use lease asset represents our right to use an underlying asset over the term of a lease while a lease liability represents our obligation to make lease payments arising from the lease. Current and noncurrent lease liabilities are recognized at commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance charges. Right-of-use lease assets are also recognized at commencement date as the total lease liability plus prepaid rents and less any deferred rent liability that existed under ASC 840, Leases, upon transition. As most of our leases do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in All Otherdetermining the present value of lease payments. The incremental borrowing rate is influenced by our credit rating and Corporate.lease term and as such may differ for individual leases.
(3) Average headcount does
Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants. Many of our leases include employees from APC added onthe 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 September 30, 2016.2020.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of September 30, 2020, and for the three and nine months ended September 30, 2020 (dollars in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
Lease Costs2020201920202019
Operating lease expense$22,373 $16,905 $63,855 $50,684 
Short-term lease expense3,626 2,605 10,225 8,022 
Total lease expense$25,999 $19,510 $74,080 $58,706 

Nine Months Ended September 30,
Other Lease Information20202019
Operating cash flows from operating leases$60,569 $49,925 
Right-of-use lease assets obtained in exchange for new lease liabilities88,857 42,387 

Lease Term and Discount RateAs of September 30, 2020
Weighted average remaining lease term (in years)(1)
6.9
Weighted average discount rate3.2 %

(1) The weighted average remaining lease term is significantly impacted by a 15-year lease related to office space in Chicago, IL, that commenced in 2018. Excluding this lease, the weighted average remaining lease term of our agreements is 4.8 years.

The maturities of lease liabilities as of September 30, 2020, were as follows (in thousands):
Maturity of Lease LiabilitiesOperating Leases
Remaining 2020$14,997 
202180,817 
202268,698 
202355,810 
202438,087 
Thereafter132,101 
Total lease payments390,510 
Less: Interest(44,606)
Present value of lease liabilities$345,904 
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In addition to minimum lease payments, we are typically responsible under our lease agreements to pay our pro rata share of maintenance expenses, common charges, and real estate taxes of the buildings in which we lease space. Under ASC 842, we have elected to account for non-lease components such as common area maintenance and parking as a single lease component.
NOTE 12. ALLOWANCE FOR CREDIT LOSSES
We adopted ASU 2016-13, Financial Instruments (Topic 326), as of January 1, 2020. Prior period information was not restated and continues to be presented under guidance effective for those periods. This ASU changes how entities measure credit losses for certain financial assets including accounts receivable by replacing the historical “incurred loss” approach with an “expected loss” model. We have updated our significant accounting policy for allowance for credit losses as discussed in Note 1, Basis of Presentation.
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 assessed the current macroeconomic environment, including the impact of COVID-19, to determine our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on contract assets was not significant.
A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the nine months ended September 30, 2020:
Balance, December 31, 2019$32,838 
Provision11,670 
Write-offs(8,422)
Balance, September 30, 2020$36,086 

Recoveries of amounts previously written off were not significant for the three and nine months ended September 30, 2020.
NOTE 10.13. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive loss is included in Stockholders' investment on our condensed consolidated balance sheets. The recorded balance at September 30, 2017,2020 and December 31, 2016,2019, was $22.9$70.9 million and $61.4$76.1 million, respectively. Accumulated other comprehensive loss is comprised solely of foreign currency translation adjustments, net of related income tax effects at September 30, 20172020 and December 31, 2016.2019. Other comprehensive income was $13.2 million and $5.3 million for the three and nine months ended September 30, 2020, respectively. Other comprehensive income consisted of foreign currency adjustments, including foreign currency translation, net of related income tax effects of $1.0 million and $0.2 million for the three and nine months ended September 30, 2020, respectively.

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


You should read the following discussion of our financial condition and results of operations 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;conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; changes due to catastrophic events including pandemics such as COVID-19; competition and growth rates within the third party logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers, or for other reasons;customers; our ability to successfully integrate the operations of acquired companies with our historic operations; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with operations outside of the U.S.;United States; risks associated with the potential impactsimpact of changes in government regulations; risks associated with the produce industry, including food safety and contamination issues; fuel price increases or decreases, or fuel shortages; cyber-security related risks; the impact of war on the economy; changes to our capital structure; riskrisks related to the elimination of unanticipated events or opportunities that might require additional capital expenditures or alter the timing of such expenditures;LIBOR; 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, 2016,2019, filed with the Securities and Exchange Commission on March 1, 2017.February 19, 2020 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
Our company. We are a global providerC.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of transportation services andthe largest third party logistics solutions, operating through a network of officescompanies in North America, Europe, Asia, Australia, New Zealand, and South America.the world. As a third party logistics provider, we enter into contractual relationships with a wide variety of transportation companies and utilize those relationships to efficiently and cost effectivelycost-effectively arrange the transport of our customers’ freight. 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 have contractual relationships with approximately 107,000developed global transportation companies, including motor carriers, railroads (primarily intermodal service providers), air freight, and ocean carriers. Dependingdistribution networks to provide transportation and supply chain services worldwide. As a result, we have the capability of facilitating most aspects of the supply chain on the needsbehalf of our customer and their supply chain requirements, we select and hire the appropriate transportation for each shipment. Our model enables us to be flexible, provide solutions that optimize service for our customers, and minimize our asset utilization risk.customers.
In addition to transportation and logistics services, we also provide sourcing services. Our sourcing business consists
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Table of buying, selling, and marketing fresh produce. We purchase fresh produce through our network of produce suppliers and sell it to grocery retailers, restaurants, foodservice distributors, and produce wholesalers. In some cases, we also arrange the transportation of the produce we sell through our relationships with specialized transportation companies. Transportation revenues generated by Robinson Fresh are included in our transportation service line, but are included in Robinson Fresh.Contents
Our reportable segments are North American Surface Transportation (“NAST”), Global Forwarding, Robinson Fresh, and All Other and Corporate. The All Other and Corporate segment includes Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. We group offices primarily by services they provide. For financial information concerning our reportable segments and geographic regions, refer to Note 9 of our consolidated financial statements.
On August 31, 2017, we acquired Milgram & Company Ltd. ("Milgram"), a provider of freight forwarding, customs brokerage, and surface transportation primarily in Canada. The acquisition strengthens our global forwarding and customs brokerage offerings in Canada.

Our business model. We are primarily a service company. We add value and expertise in the procurement and execution of transportation and logistics, including sourcing of produce products for our customers. Our total revenues represent the total dollar value of services and goods we sell to our customers. Our net revenues are oura non-GAAP financial measure calculated as total revenues less the cost of purchased transportation and related services including contracted motor carrier, rail, ocean, air, and other costs, and the purchase price and services related to thecost of purchased products we source. Oursourced for resale. We believe net revenues are the primary indicatora useful measure of our ability to source, add value, and sell services and products that are provided by third parties, and we consider themnet revenues to be our primary performance measurement. Accordingly, the discussion of our results of operations belowoften focuses on the changes in our net revenues. The reconciliation of total revenues to net revenues is presented below (in thousands):
We keep our business model as variable as possible to allow us to be flexible and adapt to changing economic and industry conditions. We sell
 Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Revenues:
Transportation$3,944,981 $3,608,346 $10,835,710 $10,751,890 
Sourcing279,819 247,786 821,944 764,292 
Total revenues4,224,800 3,856,132 11,657,654 11,516,182 
Costs and expenses:
Purchased transportation and related services3,378,651 2,999,979 9,141,354 8,826,233 
Purchased products sourced for resale256,876 222,722 744,621 682,502 
Total costs and expenses3,635,527 3,222,701 9,885,975 9,508,735 
Net revenues$589,273 $633,431 $1,771,679 $2,007,447 

MARKET TRENDS
The North American surface transportation services and produce to our customers with varied pricing arrangements. Some prices are committed to for a period of time, subject to certain terms and conditions, and some prices are set on a spot market basis. We buy most of our truckload transportation capacity and produce on a spot market basis. Consequently, our net revenue per transaction tends to increase in times when there is excess supply and decrease in times whenexperienced increasing sequential demand is strong relative to supply.
We design our personnel and other operating expenses to be variable. Compensation is tied to productivity and performance. Each office is responsible for its hiring and headcount decisions, based on the needs of their office and to balance personnel resources with business requirements.
Our office network. Our office network is a competitive advantage. Building local customer and contract carrier relationships has been an important part of our success, and our worldwide network of offices supports our core strategy of serving customers locally, nationally, and globally. Our network offices help us penetrate local markets, provide face-to-face service when needed, and recruit contract carriers. Our network also gives us knowledge of local market conditions, which is important in the transportation industry because it is market driven and very dynamic.
Our people. Because we are a service company, our continued success is dependent on our ability to continue to hire and retain talented, productive people, and to properly align our headcount and personnel expense with our business. Our headcount increased by 191 employees during the third quarter of 2017,2020 despite many small to mid-sized companies and certain industries continuing to experience demand below historical levels due to the COVID-19 pandemic. The improving demand during the third quarter of 2020 was most pronounced with large companies and from the retail and food and beverage industries. The impact of increasing consumer demand and production resulted in tighter carrier capacity and led to an increase in purchased transportation pricing. Industry freight volumes, as measured by the Cass Freight Index, declined approximately 8 percent during the third quarter of 2020 compared to the third quarter of 2019 although they did increase sequentially during the third quarter of 2020. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the number of carriers contacted prior to an acceptance when procuring a transportation provider. The average routing guide depth of tender in the third quarter of 2020 was 1.6, representing that on average, the first or second carrier in a shipper's routing guide was executing the shipment in most cases. This routing guide penetration compares to 1.2 in both the first and second quarters of 2020 and is reflective of the increasing consumer demand and production and the tightening carrier capacity evident in the third quarter of 2020. This caused routing guides to rapidly degrade and more loads to move to the spot market driving sharp increases in transportation costs.
The global forwarding market also showed signs of improvement during the third quarter of 2020 after multiple quarters of reduced demand and production resulting in decreased volumes due to the COVID-19 pandemic. Many companies began to replenish low inventory levels amidst continued market uncertainty from the COVID-19 pandemic. Both the airfreight and ocean market experienced significant pricing increases in the third quarter of 2020 compared to the third quarter of 2019 resulting from reduced capacity. In the airfreight market, a reduction in commercial flights resulted in an increase in charter flights and larger than normal shipment sizes due to the COVID-19 pandemic. In the ocean freight market, sequential demand accelerated faster than carrier capacity returned to the market, resulting in significant pricing increases.
BUSINESS TRENDS
Our third quarter of 2020 surface transportation results are largely consistent with the overall market trends summarized above, although we did experience volume increases in excess of the industry trends as measured by the Cass Freight Index. Despite industry freight volumes declining approximately 8 percent, our NAST truckload and LTL volumes increased 0.5 percent and 13.5 percent, respectively, which is reflective of our pricing strategies to ensure we are near the top of our customers' routing guides. We continued to work with our customers to meet our contractual commitments during the third quarter of 2020 while adapting our pricing to reflect the volatile cost of transportation pricing seen since the beginning of the COVID-19 pandemic while also serving customers' needs in the spot market. This resulted in an increase in average truckload linehaul rates per mile, excluding fuel costs, charged to customers although our truckload transportation costs, excluding fuel prices, increased at a faster rate resulting in margin compression.

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In our global forwarding business, we continued to experience significant increases to the price of airfreight due to significant capacity shortages in the airfreight market. These shortages were caused by a reduction in commercial flights, which have resulted in an increase in charter flights and larger than normal shipment sizes. The increase in airfreight pricing more than offset a 19.0 percent decline in airfreight volumes. Ocean volumes increased 1.5 percent as many industries resumed or increased production. In addition, the accelerating sequential demand for ocean freight grew at a faster rate than ocean carrier capacity, which resulted in significantly higher pricing in the third quarter of 2020.
On March 2, 2020, we acquired all of the outstanding shares of Prime Distribution Services (“Prime Distribution”), a leading provider of retail consolidation services in North America for $222.7 million in cash. This acquisition adds scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services. The acquisition was effective as of February 29, 2020, and therefore the results of operations of Prime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since March 1, 2020.
SIGNIFICANT DEVELOPMENTS
During the three and nine months ended September 30, 2020, our financial results and operations were impacted by the COVID-19 pandemic described above and discussed throughout Item 2, “Management's Discussion and Analysis of Financial Condition and Results of Operations.” In addition, see Part II—“Item 1A, Risk Factors,” included herein for an update to the risk factors described in “Item 1A, Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on February 19, 2020. The extent to which the COVID-19 pandemic impacts our financial results and operations for the remainder of 2020 and going forward will depend on future developments which are highly uncertain and cannot be predicted, including fluctuations in the severity of the outbreak and the actions being taken to contain and treat it.
We have taken a variety of measures to ensure the availability, continuity, and security of our critical infrastructure, ensure the health and safety of our employees around the globe, and provide service and supply chain continuity to our customers and contracted carriers in order to deliver critical and essential goods and services. We continue to follow public and private sector policies and initiatives to reduce the transmission of COVID-19, such as requiring social distancing, wearing a mask, and limiting the number of employees to less than 50 percent capacity when in the office, in addition to the elimination of all non-essential travel. We have also adopted work-from-home arrangements, and as of September 30, 2020, over 80 percent of our employees were working remotely executing their duties and responsibilities. We do not believe these policies and initiatives will adversely impact our operations. In addition, we have taken steps across the organization to reduce costs, including the elimination of all non-essential travel, temporary salary reductions for company executive officers, temporary reductions in cash retainers for board members, temporary suspension of the company match to retirement plans for U.S. and Canadian employees, accelerating the use of paid time off, and furloughing approximately seven percent of our U.S and Canadian employees in the second quarter of 2020. As we continue to harness the benefits of our technology investment and network transformation, we have eliminated certain positions during the third quarter of 2020, and therefore, a portion of employees did not return from furlough. We recognized $4.4 million in severance during the third quarter of 2020 as a result of these reductions.
Due to the ongoing uncertainty around the severity and duration of the outbreak, we are not able at this time to estimate the impact COVID-19 may have on our financial results and operations for the remainder of 2020 and going forward. However, the impact could be material in all business segments and could be material during any future period affected either directly or indirectly by this pandemic. Many businesses continue to experience reduced production and output which could result in a decrease in freight volumes across a number of industries which may reduce our contractual and spot-market opportunities. In addition, a significant number of our contracted carriers may reduce their capacity or charge higher prices in light of the volatile market conditions which may reduce our net revenue margins as we honor our contractual freight rates.
SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS
The following summarizes select third quarter 2020 year-over-year operating comparisons to third quarter 2019:
Total revenues increased 9.6 percent to $4.2 billion, driven primarily relatedby higher pricing in most service lines, most notably in ocean and airfreight services, and higher volumes across most of our service lines.
Net revenues decreased 7.0 percent to $589.3 million, primarily driven by rising costs and lower margin in truckload services, partially offset by contributions from the acquisition of Prime Distribution and higher pricing in most of our service lines.
Personnel expenses decreased 5.5 percent to $302.9 million, driven primarily by cost reductions. Average headcount decreased5.6 percent, despite the Prime acquisition contributing approximately two percentage points of growth.
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Other selling, general, and administrative (“SG&A”) expenses increased 5.7 percent to $118.1 million due to the acquisition of Milgram. Most network management compensation is dependentPrime Distribution and the prior year period benefiting from a $5.8 million gain on the profitabilitysale of their particular office. We believe this makes our employees more service-oriented and focused on driving growth and maximizing office productivity. All of our managers and certain other employees who have significant responsibilities are eligible to receive equity awards because we believe these awards are an effective tool for creating long-term ownership and alignment between employees and our shareholders.
Our customers. In 2016, we worked witha facility in Chicago, Illinois. These increases more than 113,000 active customers. We work with a wide varietyoffset declines resulting from cost reductions including the elimination of companies, rangingall non-essential travel.
Income from operations totaled $168.2 million, down 16.3 percent due to declining net revenues.
Operating margin of 28.6 percent decreased 310 basis points.
The effective tax rate in sizethe quarter was 15.1 percent compared to 21.8 percent in the third quarter last year. The lower effective tax rate was due primarily to discrete benefits from Fortune 100 companiesforeign tax credit utilization and additional deductions from increased employee stock option activity in the third quarter of 2020.
Diluted earnings per share (EPS) decreased 6.5 percent to small family businesses, in many different industries. Our customer base is very diverse and unconcentrated. In 2016, our top 100 customers represented approximately$1.00.
Cash flow from operations decreased 46.0 percent to $337.0 million during the nine months ended September 30, percent of our total revenues and approximately 26 percent of our net revenues. Our largest customer was approximately two percent of our total revenues.2020.
Our contracted carriers. Our contracted carrier base includes motor carriers, railroads (primarily intermodal service providers), air freight, and ocean carriers. In 2016, we worked with approximately 71,000 transportation providers worldwide, up from approximately 68,000 in 2015. Motor carriers that had fewer than 100 tractors transported approximately 81 percent of our truckload shipments in 2016. In our transportation business, no single contracted carrier represents more than approximately 1.6 percent of our contracted carrier capacity.


CONSOLIDATED RESULTS OF OPERATIONS
The following table summarizes our total revenues by services and products (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 % change 2017 2016 % change
Transportation$3,433,701
 $2,998,583
 14.5 % $9,855,739
 $8,593,767
 14.7 %
Sourcing350,750
 357,171
 -1.8 % 1,053,855
 1,135,671
 -7.2 %
Total$3,784,451
 $3,355,754
 12.8 % $10,909,594
 $9,729,438
 12.1 %
The following table illustrates our net revenue margins by services and products:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Transportation16.4% 17.6% 16.6% 18.8%
Sourcing8.5% 8.3% 9.0% 8.5%
Total15.7% 16.6% 15.9% 17.6%

The following table summarizes our net revenues by service line. The service line net revenues in the table differ from the segment service line revenues discussed below as our segments have revenues from multiple service lines (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 % change 2017 2016 % change
Transportation           
Truckload$301,025
 $309,027
 -2.6 % $887,865
 $960,451
 -7.6 %
LTL(1)
101,870
 96,447
 5.6 % 301,706
 287,518
 4.9 %
Intermodal7,478
 7,676
 -2.6 % 23,278
 25,961
 -10.3 %
Ocean81,182
 56,506
 43.7 % 217,495
 175,243
 24.1 %
Air25,529
 19,897
 28.3 % 73,166
 58,424
 25.2 %
Customs17,421
 12,320
 41.4 % 49,810
 34,649
 43.8 %
Other Logistics Services29,580
 26,771
 10.5 % 87,563
 76,965
 13.8 %
Total Transportation564,085
 528,644
 6.7 % 1,640,883
 1,619,211
 1.3 %
Sourcing29,761
 29,818
 -0.2 % 95,318
 96,801
 -1.5 %
Total$593,846
 $558,462
 6.3 % $1,736,201
 $1,716,012
 1.2 %
(1) Less than truckload ("LTL").




The following table represents certain statements of operations data, shown as percentages of our net revenues:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net revenues100.0 % 100.0 % 100.0 % 100.0 %
Operating expenses:       
Personnel expenses49.4 % 46.0 % 50.0 % 46.9 %
Other selling, general, and administrative expenses17.9 % 16.2 % 17.5 % 15.6 %
Total operating expenses67.3 % 62.2 % 67.5 % 62.5 %
Income from operations32.7 % 37.8 % 32.5 % 37.5 %
Interest and other expense(1.8)% (1.3)% (1.7)% (1.3)%
Income before provision for income taxes31.0 % 36.5 % 30.8 % 36.2 %
Provision for income taxes10.9 % 13.4 % 10.5 % 13.4 %
Net income20.1 % 23.1 % 20.3 % 22.8 %

The following table summarizes our results by reportable segmentof operations (dollars in thousands)thousands, except per share data):
Three Months Ended September 30,Nine Months Ended September 30,
20202019% change20202019% change
Revenues:
Transportation$3,944,981$3,608,3469.3 %$10,835,710$10,751,8900.8 %
Sourcing279,819247,78612.9 %821,944764,2927.5 %
Total revenues4,224,8003,856,1329.6 %11,657,65411,516,1821.2 %
Costs and expenses:
Purchased transportation and related services3,378,6512,999,97912.6 %9,141,3548,826,2333.6 %
Purchased products sourced for resale256,876222,72215.3 %744,621682,5029.1 %
Personnel expenses302,904320,563(5.5)%933,607999,547(6.6)%
Other selling, general, and administrative expenses118,130111,7835.7 %371,606354,7304.8 %
Total costs and expenses4,056,5613,655,04711.0 %11,191,18810,863,0123.0 %
Income from operations168,239201,085(16.3)%466,466653,170(28.6)%
Interest and other expense(7,465)(13,180)(43.4)%(32,904)(36,935)(10.9)%
Income before provision for income taxes160,774187,905(14.4)%433,562616,235(29.6)%
Provision for income taxes24,24541,011(40.9)%74,948138,373(45.8)%
Net income$136,529$146,894(7.1)%$358,614$477,862(25.0)%
Diluted net income per share$1.00 $1.07 (6.5)%$2.63$3.45 (23.8)%
Net revenue margin percentage
Transportation14.4 %16.9 %(2.5) pts15.6 %17.9 %(2.3) pts
Sourcing8.2 %10.1 %(1.9) pts9.4 %10.7 %(1.3) pts
Total net revenue margin13.9 %16.4 %(2.5) pts15.2 %17.4 %(2.2) pts
Average headcount14,904 15,782 (5.6)%15,17715,582 (2.6)%

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

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 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Three Months Ended September 30, 2017           
Revenues$2,469,420
 $552,134
 $613,646
 $149,251
 $
 $3,784,451
  Intersegment revenues115,796
 7,873
 43,272
 3,228
 (170,169) 
Total Revenues$2,585,216
 $560,007
 $656,918
 $152,479
 $(170,169) $3,784,451
Net Revenues$377,403
 $129,842
 $54,253
 $32,348
 $
 $593,846
Income from Operations151,392
 31,125
 11,586
 362
 
 194,465
            
            
 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Three Months Ended September 30, 2016           
Revenues$2,252,187
 $390,830
 $590,385
 $122,352
 $
 $3,355,754
  Intersegment revenues79,728
 8,742
 32,255
 100
 (120,825) 
Total Revenues$2,331,915
 $399,572
 $622,640
 $122,452
 $(120,825) $3,355,754
Net Revenues$378,073
 $93,368
 $57,036
 $29,985
 $
 $558,462
Income from Operations171,733
 17,047
 17,733
 4,754
 
 211,267

 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Nine Months Ended September 30, 2017           
Revenues$7,110,223
 $1,549,742
 $1,821,094
 $428,535
 $
 $10,909,594
  Intersegment revenues329,193
 23,456
 116,281
 13,776
 (482,706) 
Total Revenues$7,439,416
 $1,573,198
 $1,937,375
 $442,311
 $(482,706) $10,909,594
Net Revenues$1,109,749
 $357,411
 $171,936
 $97,105
 $
 $1,736,201
Income from Operations447,553
 75,006
 40,487
 1,197
 
 564,243
            
            
 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated
Nine Months Ended September 30, 2016           
Revenues$6,456,281
 $1,098,715
 $1,814,682
 $359,760
 $
 $9,729,438
  Intersegment revenues211,540
 23,585
 83,200
 642
 (318,967) 
Total Revenues$6,667,821
 $1,122,300
 $1,897,882
 $360,402
 $(318,967) $9,729,438
Net Revenues$1,161,074
 $283,458
 $183,041
 $88,439
 $
 $1,716,012
Income from Operations516,805
 56,300
 62,777
 8,084
 
 643,966

Consolidated Results of Operations—Three Months Ended September 30, 20172020 Compared to Three Months Ended September 30, 20162019
Total revenues and direct costs. Our consolidated total revenues increased 12.8 percent in the third quarter of 2017 compared to the third quarter of 2016. Total transportation revenues increased, 14.5 percent in the third quarter of 2017 compared to the third quarter of 2016. The increase was driven by increased pricing in the ocean, airfreight and volume growthtruckload service lines in nearly all of our transportation services.addition to increased volumes across most service lines. These increases were partially offset by decreased pricing in LTL services and a decrease in airfreight volumes. Total purchased transportation and related services increased, 16.2 percentdriven by higher average truckload linehaul costs per mile and higher costs of capacity in the ocean and airfreight service lines, in addition to higher volumes across most service lines, most notably in LTL services. Our sourcing total revenue and purchased products sourced for resale increased due to higher pricing and costs per case, partially offset by lower case volume. Lower case volume was driven by decreased demand in the food service industry which has been significantly impacted by the COVID-19 pandemic.
Net revenues. Our transportation net revenue decreased due to lower margins in truckload, and to a lesser extent LTL services, partially offset by an increase in airfreight and ocean margins driven by increased pricing. Truckload and LTL margins declined in the third quarter of 20172020 as we continued to meet our customer commitments despite increases for the cost of capacity. Airfreight margins expanded driven by increased pricing caused by significant capacity shortages in the airfreight market due to a reduction in commercial flights resulting in an increase in charter flights and larger than normal shipment sizes. Sourcing net revenue declined due to a decrease in net revenue per case and lower case volumes.
Operating expenses. Personnel expenses decreased primarily due to short-term cost reductions, including the temporary suspension of retirement matching contributions for North American employees, furloughs and reduced work hours. Average headcount decreased 5.6 percent, despite acquisitions contributing approximately 2.0 percentage points of growth. SG&A expenses increased due to increased customer credit losses and the prior year period benefiting from a $5.8 million gain on the sale of a facility in Chicago, Illinois. These increases more than offset declines resulting from short-term cost reductions including the elimination of all non-essential travel.
Interest and other expense. Interest and other expense primarily consisted of interest expense of $11.9 million in the third quarter of 2020, partially offset by a $3.3 million favorable impact of foreign currency revaluation and realized foreign currency gains and losses. Interest expense decreased driven by a lower average debt balance in the third quarter of 2020 compared to the third quarter of 2016.2019. The increasethird quarter of 2019 included a $1.1 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses.
Provision for income taxes. Our effective income tax rate was due to increased cost of transportation, including fuel, and volume growth in nearly all of our transportation services. Our sourcing revenue decreased 1.815.1 percent to $350.8 million infor the third quarter of 2017 from $357.2 million in2020 compared to 21.8 percent for the third quarter of 2016. Purchased2019. The effective income tax rate for the third quarter ended September 30, 2020, was lower than the statutory federal income tax rate primarily due to foreign tax impacts and the tax impact of share-based payment awards, which reduced the effective tax rate by 5.2 percentage points and 3.8 percentage points, respectively. The effective income tax rate for the third quarter of 2019 was higher than the statutory federal income tax rate due to state income taxes, net of federal benefit, and foreign income taxes, but was partially offset by the tax impact of share-based payment awards and the combined tax impact of Global Intangible Low-tax Income (“GILTI”) and Foreign Derived Intangible Income (“FDII”).

Consolidated Results of Operations—Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019
Total revenues and direct costs. Total transportation revenues increased driven by higher pricing for airfreight and ocean services due to the impact of the COVID-19 pandemic on capacity. These increases were largely offset by the impact of the COVID-19 pandemic on the truckload market which has experienced lower pricing due to slowdowns of demand and production in many industry verticals. Despite industry freight volume declines, we achieved volume growth in both NAST truckload and LTL services which is reflective of our pricing strategies to ensure we are near the top of our customers' routing guides. Total purchased transportation and related services increased driven by the high cost for airfreight and ocean capacity in the marketplace due to the impact of the COVID-19 pandemic in addition to increased volume in truckload and LTL services. Our sourcing total revenue and purchased products sourced for resale decreased 1.9 percentincreased due to higher pricing and costs per case which was partially offset by lower case volume most notably in the third quarterfood service industry which has been significantly impacted by the COVID-19 pandemic.
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Table of 2017 to $321.0 million from $327.4 million in the third quarter of 2016. These decreases were due to decreased case volumes and lower pricing resulting from lower commodity costs. The hurricanes that impacted the southern United States had an impact on volumes and pricing during the third quarter of 2017. We estimate the impact on volumes was positive on our NAST division and negative on Robinson Fresh. The storms also impacted pricing in the North American truckload market due to the storm disruption.Contents
Net revenues. Total transportation net revenues increased 6.7 percent to $564.1 million in the third quarter of 2017 from $528.6 million in the third quarter of 2016. Our transportation net revenue margin decreased driven by margin compression in truckload services due to 16.4 percentthe tight carrier capacity in the third quartermarketplace and the significant transportation cost volatility resulting from the impact of 2017 from 17.6 percentthe COVID-19 pandemic relative to our contractual customer pricing. We have continued to meet our customer commitments despite moderating declines or, in some instances, increases for the cost of capacity, which has resulted in margin compression. Partially offsetting these declines was an increase in airfreight pricing resulting in margin expansion as we were able to leverage our contractual airfreight capacity despite significant shortages in the third quarterairfreight market. Sourcing net revenue margin declined as the costs of 2016purchased products sourced for resale increased at a faster rate than our sourcing total revenues.
Operating expenses. Personnel expenses decreased primarily due to the cost of transportation increasing more than customer pricing, including fuel, in nearly all transportation services. Sourcing net revenues were flat at $29.8 million in the third quarter of 2017 compared to the third quarter of 2016. Our sourcing net revenue margin was 8.5 percent in the third quarter of 2017 and 8.3 percent in the third quarter of 2016.
Operating expenses. Operating expenses increased 15.0 percent to $399.4 million in the third quarter of 2017 from $347.2 million in the third quarter of 2016. Operating expenses as a percentage of net revenues increased to 67.3 percent in the third quarter of 2017 from 62.2 percent in the third quarter of 2016.
For the third quarter, personnel expenses increased 14.1 percent to $293.2 million in 2017 from $256.9 million in 2016. The increase in personnel expense was due to an increase of 8.7 percent in average headcount and an increasedeclines in variable compensation in the third quarter of 2017 compared to the third quarter of 2016.
For the third quarter of 2017, other selling, general, and administrativeshort-term cost reductions, including furloughs and reduced work hours. Average headcount decreased 2.6 percent. SG&A expenses increased 17.6 percent to $106.2 million in 2017 from $90.3 million in the third quarter of 2016. This increase was driven primarily by costs related to the addition of the APC and Milgram businesses, and increases in occupancy expenses, including those attributable to acquisitions, and the provisionreserve for bad debt, claims expenses,credit losses, and warehouse costs.

Income from operations. Income from operations decreased 8.0 percent to $194.5an $11.5 million inloss on the third quartersale-leaseback of 2017 from $211.3 million in the third quarter of 2016. This decrease was primarily driven by declines in income from operations in NAST and Robinson Fresh,a company-owned data center, partially offset by an increase in income from operations in Global Forwarding. Income from operations as a percentagethe elimination of net revenues decreased to 32.7 percent in the third quarter of 2017 from 37.8 percent in the third quarter of 2016.non-essential travel.
Interest and other expense. Interest and other expense was $10.5primarily consisted of interest expense of $36.6 million partially offset by a $2.2 million favorable impact of foreign currency revaluation and realized foreign currency gains and losses in the third quarter of 2017 compared to $7.4 million in the third quarter of 2016. The increase was due primarily tonine months ended September 30, 2020. Interest expense decreased driven by a higherlower average debt balance and higherlower interest rates duringin the quarternine months ended September 30, 2017,2020 compared to the same periodnine months ended September 30, 2016. Increased borrowings were related2019. The nine months ended September 30, 2019 included a $3.3 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses in addition to the acquisitionapproximately $5.6 million of Milgram and increased working capital needs.miscellaneous other income.
Provision for income taxes. Our effective income tax rate was 35.217.3 percent for the third quarter of 2017nine months ended September 30, 2020 and 36.722.5 percent for the third quarter of 2016. Duringnine months ended September 30, 2019. The effective income tax rate for the third quarter of 2017,nine months ended September 30, 2020 was lower than the provision forstatutory federal income taxes decreased by $2.7 milliontax rate primarily due to the tax credits associated with foreign earnings deemed to be subject to U.S. taxation. During the first quarterimpact of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718). The adoption of ASU 2016-09 prospectively impacts the recording of income taxes related to share-based payment awards, including the tax benefit from the delivery of a one-time deferred stock award that was granted to the company's prior Chief Executive Officer in our consolidated financial position and results of operations, as well as2000, which reduced the operating and financing cash flows onrate by 4.1 percentage points in addition to foreign tax impacts which reduced the consolidated statements of cash flow. This adoption resulted in a decrease in our provisionrate by 3.1 percentage points. The effective income tax rate for the nine months ended September 30, 2019 was higher than the statutory federal income tax rate due to state income taxes, net of $1.3 millionfederal benefit, and foreign income taxes, but was partially offset by the third quartertax impact of 2017.share-based payment awards and the combined tax impact of GILTI and FDII.
Net income. Net income decreased 7.6 percent to $119.2 million in the third quarter
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Table of 2017 from $129.0 million in the third quarterContents
NAST Segment Results of 2016. Basic and diluted net income per share decreased 5.6 percent to $0.85 from $0.90 in the third quarter of 2017 compared to the third quarter of 2016.Operations
SEGMENT RESULTS OF OPERATIONS
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)20202019% change20202019% change
Total revenues$2,923,842 $2,826,308 3.5 %$8,222,879 $8,495,145 (3.2)%
Purchased transportation and related services2,555,899 2,392,548 6.8 %7,102,602 7,088,417 0.2 %
Net revenues
Truckload226,992 299,065 (24.1)%722,843 1,011,008 (28.5)%
LTL117,602 122,959 (4.4)%335,360 359,403 (6.7)%
Intermodal7,297 6,878 6.1 %22,197 18,875 17.6 %
Other16,052 4,858 230.4 %39,877 17,442 128.6 %
Total net revenues367,943 433,760 (15.2)%1,120,277 1,406,728 (20.4)%
Personnel expenses148,958 169,644 (12.2)%474,999 543,323 (12.6)%
Other selling, general, and administrative expenses96,459 87,916 9.7 %287,380 271,190 6.0 %
Income from operations$122,526 $176,200 (30.5)%$357,898 $592,215 (39.6)%
Three Months Ended September 30,Nine Months Ended September 30,
20202019% change20202019% change
Average headcount6,702 7,448 (10.0)%6,870 7,436 (7.6)%
Service line volume statistics
Truckload0.5 %1.0 %
LTL13.5 %6.5 %
Intermodal2.5 %3.5 %
Three Months Ended September 30, 2017, Compared2020 compared to Three Months Ended September 30, 20162019
North American Surface Transportation. NASTTotal revenues and direct costs. NAST total revenues including intersegment revenues,and direct costs increased 10.9 percentdue to $2.6 billion in the third quarter of 2017 from $2.3 billion in the third quarter of 2016. This increase was driven byincreased truckload pricing and volumeincreased volumes in LTL and truckload services. These increases were partially offset by lower pricing in mostLTL services. NASTThe increased pricing in truckload was the result of demand and production recovering at a faster rate than carrier capacity returning to the market leading to sharp increases to the cost of transportationpurchased transportation. Despite industry freight volume declines, we achieved volume growth in both truckload and relatedLTL services increased 13.0 percentwhich is reflective of our pricing strategies to $2.2 billion inensure we are near the third quartertop of 2017 from $2.0 billion in the third quarter of 2016. This increase was driven by an increase in costs of transportation and a volume increase in most services. our customers' routing guides.
Net revenues. NAST net revenues decreased 0.2 percentdriven primarily by margin compression in truckload services due to $377.4 millionthe tight carrier capacity in the third quarter of 2017 from $378.1 millionmarket leading to sharp increases in the third quartercost of 2016. This decrease was driven by a decline inpurchased transportation relative to our contractual customer pricing as we continued to meet our customer commitments despite increasing purchased transportation costs.
Our average truckload net revenues, discussed below.
NAST truckload net revenues decreased 2.1 percent to $266.6 million in the third quarter of 2017 from $272.4 million in the third quarter of 2016. NAST truckload volumes were flat in the third quarter of 2017 compared to the third quarter of 2016. NAST truckload net revenue margin decreased in the third quarter of 2017 compared to the third quarter of 2016, due primarily to higher transportation costs, including fuel costs.
NAST truckload net revenues accounted for approximately 93 percent of our total North American truckload net revenues in the third quarter of 2017 and approximately 92 percent in the third quarter of 2016. The majority of the remaining North American truckload net revenues are included in Robinson Fresh. Excluding the estimated impacts of the increase in fuel costs, our average truckloadlinehaul rate per mile charged to our customers, which excludes fuel surcharges, increased 6.5approximately 10.5 percent in the third quarter of 20172020 compared to the third quarter of 2016.2019. Previously, we had disclosed the change in average truckload linehaul rates compared to the total average truckload rate per mile, which included fuel surcharges. We believe comparing to average truckload linehaul rate per mile to be preferred because it completely eliminates any impact of fuel charges passed through to our customer. Our truckload transportation costs, excluding fuel surcharges, increased approximately 8.5 percent, excluding the estimated increase in fuel costs. While rapidly rising prices does often create incremental spot market activity, it can also create more margin compression on committed pricing arrangements. We experienced both of these impacts in our third quarter results. The pricing trends and required adjustments to market conditions that we discussed at length last quarter continued and were accelerated by the hurricane impacts.16.5 percent.
NAST LTL net revenues decreased primarily due to reduced margins, partially offset by increased 4.8 percentvolumes. The acquisition of Prime Distribution contributed 4.0 percentage points to $97.6 millionLTL net revenue growth in the third quarter of 2017 from $93.1 million in the third quarter of 2016. This increase was primarily due to a volume increase of 6.5 percent in the third quarter of 2017 compared to the third quarter of 2016, partially offset by a decrease in net revenue margin resulting from increased purchased transportation costs.2020.
NAST intermodal net revenues decreased 1.4 percent to $7.1 millionincreased driven by increased volumes and modest improvement in the third quarter of 2017 from $7.2 million in the third quarter of 2016. net revenue margins.
NAST intermodalother net revenues and net revenue margin decreased while volume increased in the third quarter of 2017 comparedprimarily due to incremental warehousing services related to the third quarteracquisition of 2016Prime Distribution.
Operating expenses. NAST personnel expense decreased primarily due to lower-margin contractual volume growth, partially offset byshort-term cost reductions, including furloughs and reduced work hours, in addition to declines in variable compensation and a decrease in transactional business.

average headcount. The acquisition of Prime Distribution contributed 4.5 percentage points of growth to NAST operatingaverage headcount. NAST SG&A expenses increased 9.5 percent in the third quarter
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Table of 2017 to $226.0 million compared to $206.3 million in the third quarter of 2016. This increase was due to increases in selling, general, and administrative expenses and an increase in personnel expenses. The increase in selling, general, and administrative expenses is Contents
primarily due to an increasethe acquisition of Prime, which contributed 9.5 percentage points in the provision for bad debt and claims expense. The increase in personnel expense is relatedaddition to an increase in average headcount of 1.9 percent.to the reserve for credit losses. The operating expenses of NAST and all other segments include allocated corporate expenses.
Nine Months Ended September 30, 2020 compared to Nine Months Ended September 30, 2019
Total revenues and direct costs.NAST income from operationsrevenues decreased 11.8 percent to $151.4 million in the third quarter of 2017 from $171.7 million in the third quarter of 2016. This was primarily due to lower pricing in truckload and, to a declinelesser extent, LTL services, which were partially offset by increases in net revenues caused by an increasetruckload and LTL volumes. Despite industry freight volume declines, we achieved volume growth in transportation costs.
Global Forwarding. Global Forwarding total revenues, including intersegment revenues, increased 40.2 percentboth truckload and LTL services which is reflective of our pricing strategies to $560.0 million inensure we are near the third quartertop of 2017 compared to $399.6 million in the third quarter of 2016. Global Forwarding costsour customers' routing guides. NAST cost of transportation and related services increased 40.5 percentdriven by increased transportation costs per mile in truckload services.
Net revenues. NAST net revenues decreased driven primarily by margin compression in truckload services due to $430.2 millionthe significant transportation cost pricing volatility experienced relative to our contractual customer pricing as we continued to meet our customer commitments despite moderating declines or, in some instances, increases for the cost of capacity. These decreases were partially offset by increased volumes in truckload and LTL. Our average truckload linehaul rate per mile charged to our customers decreased approximately 2.0 percent. Our truckload transportation costs, excluding fuel costs, increased approximately 3.5 percent.
NAST LTL net revenues decreased primarily due to reduced margins, partially offset by an increase in volumes. This decrease was partially offset by the acquisition of Prime Distribution which contributed 3.5 percentage points to LTL net revenue growth.
NAST intermodal net revenues increased primarily due to increased volume and improved net revenue margin.
NAST other net revenues increased primarily due to incremental warehousing services related to the acquisition of Prime Distribution.
Operating expenses. NAST personnel expense decreased primarily due to declines in performance-based and variable compensation, a decrease in average headcount, and short-term cost reductions, including furloughs and reduced work hours. The acquisition of Prime contributed 3.0 percentage points of growth to NAST average headcount. NAST SG&A expenses increased primarily due to our acquisition of Prime Distribution, which contributed 7.0 percentage points, partially offset by the elimination of non-essential travel and decreased claims.
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Table of Contents
Global Forwarding Segment Results of Operations
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)20202019% change20202019% change
Total revenues$831,957 $597,695 39.2 %$2,070,161 $1,727,745 19.8 %
Purchased transportation and related services674,300 461,880 46.0 %1,621,230 1,322,758 22.6 %
Net revenues
Ocean88,878 77,777 14.3 %237,422 234,623 1.2 %
Air33,836 26,195 29.2 %112,254 77,543 44.8 %
Customs22,463 23,719 (5.3)%63,115 68,892 (8.4)%
Other12,480 8,124 53.6 %36,140 23,929 51.0 %
Total net revenues157,657 135,815 16.1 %448,931 404,987 10.9 %
Personnel expenses71,095 69,085 2.9 %205,310 209,674 (2.1)%
Other selling, general, and administrative expenses40,263 42,054 (4.3)%126,588 129,816 (2.5)%
Income from operations$46,299 $24,676 87.6 %$117,033 $65,497 78.7 %
Three Months Ended September 30,Nine Months Ended September 30,
20202019% change20202019% change
Average headcount4,6074,790(3.8)%4,7164,748(0.7)%
Service line volume statistics
Ocean1.5 %(3.5)%
Air(19.0)%(21.5)%
Customs(2.5)%(7.5)%
Three Months Ended September 30, 2020 compared to Three Months Ended September 30, 2019
Total revenues and direct costs. The results of Global Forwarding were impacted by the COVID-19 pandemic during the three months ended September 30, 2020 as discussed in the market and business trends sections above. Global Forwarding total revenues and direct costs increased driven by significantly higher pricing and volumes in ocean services. As many industries resumed production in the third quarter of 2017 from $306.2 million2020 demand grew at a faster rate than ocean carrier capacity which resulted in significantly higher pricing for ocean services. In addition, airfreight pricing continued to be significantly impacted by reduced cargo capacity due to fewer commercial flights, an increase in charter flights, and larger than normal shipment sizes which has created an environment with unusually high pricing. These increases were partially offset by volume declines in airfreight.
Net revenues. Ocean transportation net revenues increased driven by higher pricing and an increase in volumes. Air transportation net revenues increased due to higher pricing which more than offset a decline in volumes. Customs net revenues decreased driven primarily by lower volumes.
Operating expenses. Personnel expenses increased slightly driven by an increase in variable compensation due to the strong net revenue growth in the third quarter of 2016. Global Forwarding2020. This increase was partially offset by short-term cost reductions and a decrease in average headcount. SG&A expenses decreased driven by the elimination of non-essential travel.
Nine Months Ended September 30, 2020 compared to Nine Months Ended September 30, 2019
Total revenues and direct costs. Total revenues and direct costs increased driven by the significant increase in airfreight and ocean pricing due to the impact of the COVID-19 pandemic. The airfreight market has been significantly impacted by reduced cargo capacity due to fewer commercial flights, an increase in charter flights, and larger than normal shipment sizes which has created an environment with unusually high pricing. The price for ocean services has also increased significantly due to tight ocean carrier capacity. These increases were partially offset by volume declines in all service lines, most notably airfreight.
Net revenues. Ocean transportation net revenues increased 39.1 percent to $129.8 millionslightly driven by increased pricing which was mostly offset by a decline in the third quartervolumes. The acquisition of 2017 compared to $93.4 million in the third quarter of 2016. The acquisitions of APC and Milgram accounted forSpace Cargo contributed approximately 182.0 percentage points of ocean net revenue growth for the nine months ended September 30, 2020. Air transportation net revenues increased significantly due to higher pricing, which more than offset a decline in volumes as we were able to leverage our contractual airfreight capacity despite
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Table of Contents
significant shortages in the airfreight market. The acquisition of Space Cargo contributed approximately 3.0 percentage points of net revenue growth in Global Forwarding.
Global Forwarding ocean transportationairfreight. Customs net revenues increased 44.0 percent to $81.1 million in the third quarter of 2017 from $56.3 million in the third quarter of 2016. This was primarily related to volume increases, including those from acquisitions. Ocean transportation volumes increased approximately 22 percent and customer rates also increased in the third quarter of 2017 compared to the same period of 2016.
Global Forwarding air transportation net revenues increased 32.7 percent to $24.0 million in the third quarter of 2017 from $18.1 million in the third quarter of 2016. This was primarily related to volume increases, including those from acquisitions. Air transportation volumes increased approximately 28 percent and customer rates also increased in the third quarter of 2017 compared to the same period of 2016.
Global Forwarding customs net revenues increased 41.4 percent to $17.4 million in the third quarter of 2017 from $12.3 million in 2016. The increase was primarily due to increased transaction volumes, primarily related to acquisitions. Customs transaction volumes increased approximately 52 percent in the third quarter of 2017 compared to the same period of 2016.
Global Forwarding operating expenses increased 29.3 percent in the third quarter of 2017 to $98.7 million from $76.3 million in the third quarter of 2016. This increase was due to increases in both personnel and selling, general, and administrative expenses. The personnel expense increase wasdecreased driven by andecreased volumes.
Operating expenses. Personnel expenses decreased driven by short-term cost reductions, including furloughs and reduced work hours, and a slight decrease in average headcount increase of 20.8 percent. The acquisitions of APC and Milgram added approximately 18 percentin addition to the Global Forwarding average headcount. The selling, general, and administrative expense increase was primarilydeclines in healthcare costs. SG&A expenses decreased driven by the acquisition amortization related to APC and Milgram.elimination of non-essential travel.
Global Forwarding income from operations increased 82.6 percent to $31.1 million in the third quarter of 2017 from $17.0 million in the third quarter of 2016. This was primarily due to an increase in net revenues.
Robinson Fresh. Robinson Fresh total revenues, including intersegment revenues, increased 5.5 percent to $656.9 million in the third quarter of 2017 from $622.6 million in the third quarter of 2016. Robinson Fresh costs of transportation and related services and purchased products sourced for resale increased 6.6 percent to $602.7 million in the third quarter of 2017 from $565.6 million in the third quarter of 2016. Robinson Fresh net revenues decreased 4.9 percent to $54.3 million in the third quarter of 2017 from $57.0 million in the third quarter of 2016, primarily as a result of declines in transportation net revenues. The hurricanes in both Texas and Florida had a negative impact on Robinson Fresh cases volumes and net revenue in the third quarter. We have service center facilities in both of these locations that were shut down for seven to ten days as a result of the storms.
Robinson Fresh net revenues from sourcing services were flat at $29.8 million in the third quarter of 2017 compared to the third quarter of 2016. A slight increase in net revenue margin was offset by a case volume decrease of one percent compared to the third quarter of 2016.
Robinson Fresh net revenues from transportation services decreased 10.0 percent to $24.5 million in the third quarter of 2017 compared to $27.2 million in the third quarter of 2016, primarily due to a decrease in truckload net revenue. Robinson Freshtransportation net revenue margin decreased in the third quarter of 2017 compared to the third quarter of 2016. Robinson Fresh transportation volumes increased 13 percent in the third quarter of 2017 compared to the third quarter of 2016.
Robinson Fresh operating expenses increased 8.6 percent in the third quarter of 2017 to $42.7 million from $39.3 million in the third quarter of 2016. This was primarily due to an increase in warehousing expenses related to expanding facilities and an increase in average headcount of 1.5 percent.

Robinson Fresh income from operations decreased 34.7 percent to $11.6 million in the third quarter of 2017 from $17.7 million in the third quarter of 2016. This was primarily due to an increase in operating expenses and a decrease in transportation services net revenues.
All Other and Corporate. 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. Managed Services provides Transportation Management Services, or Managed TMS. Europe Surface Transportation provides services similar
Three Months Ended September 30,Nine Months Ended September 30,
(dollars in thousands)20192018% change20202019% change
Total revenues$469,001 $432,129 8.5 %$1,364,614 $1,293,292 5.5 %
Net revenues
Robinson Fresh24,449 26,382 (7.3)%82,109 86,276 (4.8)%
Managed Services24,060 21,574 11.5 %70,090 61,985 13.1 %
Other Surface Transportation15,164 15,900 (4.6)%50,272 47,471 5.9 %
Total net revenues$63,673 $63,856 (0.3)%$202,471 $195,732 3.4 %

Three Months Ended September 30, 2020 compared to NAST across Europe.Three Months Ended September 30, 2019
Total revenues increased driven by increased pricing in our Robinson Fresh business which was partially offset by decreased demand from customers in the food service industry resulting from the COVID-19 pandemic.
Robinson Fresh net revenues declined due to a decrease in net revenue per case and lower case volumes. Managed Services net revenues increased 10.8 percentdriven by a combination of new customer wins and selling additional services to existing customers. Other Surface Transportation net revenues decreased driven by decreased margin in truckload services in Europe.
Nine Months Ended September 30, 2020 compared to Nine Months Ended September 30, 2019
Total revenues increased due to increased pricing in our Robinson Fresh business related to elevated demand at large grocers and retailers especially near the thirdend of the first quarter of 2017 to $18.5 million compared to $16.7 million in the third quarter of 2016.2020. This increase was partially offset by decreased demand from customers in the food service industry resulting from the COVID-19 pandemic. In addition, total revenues increased in Other Surface Transportation driven by the impact of the Dema Service acquisition.
Robinson Fresh net revenues decreased driven by reduced case volumes partially offset by increased net revenue per case. Managed Services net revenues increased driven by a resultcombination of new business with newcustomer wins and selling additional services to existing customers. Other Surface Transportation net revenues increased 4.2 percent in the third quarter of 2017 to $13.9 million compared to $13.3 million in the third quarter of 2016. This increase is primarily the result of increased volumes, partially offset by margin compression in the surface transportation business in Europe.
Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
Total revenues and direct costs. Our consolidated total revenues increased 12.1 percent in the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016. Total transportation revenues increased 14.7 percent to $9.9 billion in the nine months ended September 30, 2017, from $8.6 billion in the nine months ended September 30, 2016. The increase in total transportation revenues was driven by increased pricing and volumes in nearly all of our transportation services. Total purchased transportation and related services increased 17.8 percent in the nine months ended September 30, 2017, to $8.2 billion from $7.0 billion in the nine months ended September 30, 2016. The increase was due to increased volumes in all of our transportation services, and by increased costs of transportation, including fuel. Sourcing revenue decreased 7.2 percent in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Purchased products sourced for resale decreased 7.7 percent in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. These decreases were primarily due to lower pricing and commodity costs.
Net revenues. Total transportation net revenues increased 1.3 percent to $1.64 billion in the nine months ended September 30, 2017 from $1.62 billion in the nine months ended September 30, 2016. Our transportation net revenue margin decreased to 16.6 percent in the nine months ended September 30, 2017 from 18.8 percent in the nine months ended September 30, 2016, primarily due to the cost of transportation increasing more than customer pricing, including fuel, in nearly all transportation services. Sourcing net revenues decreased 1.5 percent to $95.3 million in the nine months ended September 30, 2017 from $96.8 million in the nine months ended September 30, 2016. This decrease was primarily the result of lower net revenue per case, as volumes were flat. Our sourcing net revenue margin increased in the nine months ended September 30, 2017 to 9.0 percent from 8.5 percent in the nine months ended September 30, 2016.
Operating expenses. Operating expenses increased 9.3 percent in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Operating expenses as a percentage of net revenues increased to 67.5 percent in the nine months ended September 30, 2017, from 62.5 percent in the nine months ended September 30, 2016.
Personnel expenses increased 7.9 percent to $867.9 million in the nine months ended September 30, 2017, from $804.6 million in the nine months ended September 30, 2016. For the nine months ended September 30, 2017, our average headcount increased 8.3 percent compared to the same period ended September 30, 2016, including 650 employees added through acquisitions. The increase in personnel expense was less than the increase in average headcount due to decreased expenses related to variable incentive plans.
Other selling, general, and administrative expenses increased 13.7 percent to $304.0 million in the nine months ended September 30, 2017 from $267.4 million in the nine months ended September 30, 2016. This increase was primarily driven by costs related to the addition of the APC and Milgram businesses, the provision for bad debt, and warehouse costs.
Income from operations. Income from operations decreased 12.4 percent to $564.2 million in the nine months ended September 30, 2017, from $644.0 million in the nine months ended September 30, 2016. Income from operations as a percentage of net revenues decreased to 32.5 percent in the nine months ended September 30, 2017, from 37.5 percent in the nine months ended September 30, 2016.
Interest and other expense. Interest and other expense increased to $29.2 million in the nine months ended September 30, 2017, from $22.5 million in the nine months ended September 30, 2016. The change was due primarily to a higher average debt balance and higher interest rates on our short-term debt during the nine months ended September 30, 2017, compared to the same period ended September 30, 2016.

Provision for income taxes. Our effective income tax rate was 34.2 percent for the nine months ended September 30, 2017, and 37.1 percent for the nine months ended September 30, 2016. During the first quarter of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718). The adoption of ASU 2016-09 prospectively impacts the recording of income taxes related to share-based payment awards in our consolidated statement of financial position and results of operations, as well as the operating and financing cash flows on the consolidated statements of cash flow. This adoption resulted in a decrease in our provision for income taxes of $11.9 million the nine months ended September 30, 2017. The effective income tax rate for the nine months ended September 30, 2017 was lower than the statutory federal income tax rate due to the adoption of ASU 2016-09.
Net income. Net income decreased 9.9 percent to $352.3 million in the nine months ended September 30, 2017, from $391.1 million in the nine months ended September 30, 2016. Basic net income per share decreased 8.4 percent to $2.50 in the nine months ended September 30, 2017 from $2.73 in the nine months ended September 30, 2016. Diluted net income per share decreased 8.8 percent to $2.49 in the nine months ended September 30, 2017 from $2.73 in the nine months ended September 30, 2016.
SEGMENT RESULTS OF OPERATIONS
Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
North American Surface Transportation. NAST total revenues, including intersegment revenues, increased 11.6 percent to $7.4 billion during the nine months ended September 30, 2017 from $6.7 billion during the nine months ended September 30, 2016. This increase was driven by volume and pricing increases in all services. NAST cost of transportation and related services increased 14.9 percent to $6.3 billion in the nine months ended September 30, 2017 from $5.5 billion in the nine months ended September 30, 2016. This was driven by increases in volumes and costs of transportation in all services. NAST net revenues decreased 4.4 percent to $1.1 billion in the nine months ended September 30, 2017 from $1.2 billion in the nine months ended September 30, 2016. This decrease was driven primarily by a decline in truckload net revenues.
NAST truckload net revenues decreased 7.4 percent to $784.3 million during the nine months ended September 30, 2017 from $847.2 million in the nine months ended September 30, 2016. NAST truckload volumes increased approximately six percent during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. NAST truckload net revenue margin decreased in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, due to increased transportation costs, excluding the change in fuel costs.
NAST truckload net revenues accounted for approximately 93 percent of our total North American truckload net revenues in the nine months ended September 30, 2017 and 92 percent in the nine months ended September 30, 2016. The majority of the remaining North American truckload net revenues are included in Robinson Fresh. Excluding the estimated impacts of the increase in fuel costs, our average truckload rate per mile charged to our customers increased approximately one percent in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. Our truckload transportation costs increased 3.5 percent, excluding the estimated increase in fuel costs.
NAST LTL net revenues increased 4.6 percent to $288.3 million in the nine months ended September 30, 2017 from $275.5 million in the nine months ended September 30, 2016. This increase was primarily due to a volume increase of approximately seven percent during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, partially offset by a decrease in net revenue margin.
NAST intermodal net revenues decreased 8.8 percent to $22.1 million in the nine months ended September 30, 2017 from $24.2 million in the nine months ended September 30, 2016. Net revenues decreased while volume increased in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 due to lower-margin contractual volume growth, partially offset by a decrease in transactional business.
NAST operating expenses increased 2.8 percent during the nine months ended September 30, 2017 to $662.2 million compared to $644.3 million during the nine months ended September 30, 2016. This increase was driven by increases in other selling, general, and administrative expenses and personnel expenses. The increase in selling, general, and administrative expenses were driven by investments in technology. The increase in personnel expense is related an increase in average headcount of 2.3 percent and an increase in expenses related to variable incentive plans. The operating expenses of NAST and all other segments include allocated corporate expenses.
NAST income from operations decreased 13.4 percent to $447.6 million during the nine months ended September 30, 2017 from $516.8 million in the nine months ended September 30, 2016. This was primarily due to a decline in net revenues caused by the increased cost of transportation services.

Global Forwarding. Global Forwarding total revenues, including intersegment revenues, increased 40.2 percent to $1.6 billion in the nine months ended September 30, 2017 compared to $1.1 billion in the nine months ended September 30, 2016. Global Forwarding costs of transportation and related services increased 44.9 percent to $1.2 billion in the nine months ended September 30, 2017 from $838.8 million in the nine months ended September 30, 2016. Global Forwarding net revenues increased 26.1 percent to $357.4 million in the nine months ended September 30, 2017 compared to $283.5 million in the nine months ended September 30, 2016. These increases were primarily driven by our acquisition of APC, and volume growth in our organic operations.
Global Forwarding ocean transportation net revenues increased 24.5 percent to $217.8 million in the nine months ended September 30, 2017 from $174.9 million in the nine months ended September 30, 2016. The increase in net revenues was primarily a result of our acquisition of APC, partially offset by margin compression.
Our air transportation net revenues increased 27.2 percent to $68.9 million in the nine months ended September 30, 2017 from $54.1 million in the nine months ended September 30, 2016. The increase was primarily the result of our acquisition of APC, partially offset by margin compression.
Our customs net revenues increased 43.8 percent to $49.8 million in the nine months ended September 30, 2017 from $34.6 million in 2016. The increase was due to increased transaction volumes, primarily related to the acquisition of APC.Dema Service, which contributed 4.5 percentage points of growth.
Global Forwarding operating expenses increased 24.3 percent in the nine months ended September 30, 2017 to $282.4 million from $227.2 million in the nine months ended September 30, 2016. This increase was driven by an increase in average headcount of 16.7 percent and the acquisition amortization expense related to the acquisitions of APC.
Global Forwarding income from operations increased 33.2 percent to $75.0 million in the nine months ended September 30, 2017 from $56.3 million in the nine months ended September 30, 2016. This was primarily due to an increase in net revenues, partially offset by an increase in operating expenses.
Robinson Fresh. Robinson Fresh total revenues, including intersegment revenues, increased 2.1 percent to $1.94 billion in the nine months ended September 30, 2017 compared to $1.90 billion in the nine months ended September 30, 2016. Robinson Fresh costs of transportation and related services and purchased products sourced for resale increased 3.0 percent to $1.8 billion in the nine months ended September 30, 2017 from $1.7 billion in the nine months ended September 30, 2016. Robinson Fresh net revenues decreased 6.1 percent to $171.9 million in the nine months ended September 30, 2017 from $183.0 million in the nine months ended September 30, 2016. This decrease was the result of declines in transportation and sourcing net revenues.
Robinson Fresh net revenues from sourcing services decreased 1.5 percent to $95.3 million in the nine months ended September 30, 2017 compared to $96.8 million in the nine months ended September 30, 2016. This was primarily the result of lower net revenue per case as case volumes were flat.
Robinson Fresh net revenues from transportation services decreased 11.2 percent to $76.6 million in the nine months ended September 30, 2017 compared to $86.2 million in the nine months ended September 30, 2016, primarily due to decreases in truckload net revenue. Robinson Fresh transportation net revenue margin decreased in the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, due primarily to increased transportation costs, including fuel.
Robinson Fresh operating expenses increased 9.3 percent in the nine months ended September 30, 2017 to $131.4 million from $120.3 million in the nine months ended September 30, 2016. This was primarily due to an increase in warehousing expenses related to expanding facilities, claims, and an increase in average headcount, partially offset by a decrease in expenses related to variable incentive compensation plans.
Robinson Fresh income from operations decreased 35.5 percent to $40.5 million in the nine months ended September 30, 2017 from $62.8 million in the nine months ended September 30, 2016. This was primarily due to decreases in transportation and sourcing net revenues, and an increase in operating expenses.
All Other and Corporate. All Other and Corporate includes our Managed Services segment, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses. Managed Services provides Transportation Management Services, or Managed TMS. Other Surface Transportation revenues are primarily earned by Europe Surface Transportation. Europe Surface Transportation provides services similar to NAST across Europe.
Managed Services net revenues increased 14.5 percent in the nine months ended September 30, 2017 to $53.8 million compared to $47.0 million in the nine months ended September 30, 2016. This increase was a result of volume growth from both new and existing customers. Other Surface Transportation increased 4.5 percent in the nine months ended September 30, 2017 to $43.3 million compared to $41.4 million in the nine months ended September 30, 2016, primarily the result of growth in Europe Surface Transportation.

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 2012, we entered into a senior unsecured revolving credit facility to partially fund an acquisition. In December 2014, we amended the revolving credit facility to increase the amount available from $500 million to $900 million and to extend the expiration date from October 2017 to December 2019, primarily to fund an acquisition. In 2013, we entered into a Note Purchase Agreement to fund the repurchase of $500 million worth of our common stock. The Note Purchase Agreement was amended in February 2015 to conform its financial covenants to be consistent with the amended revolving credit facility. In April 2017, we entered into an U.S. Trade Accounts Receivable Securitization facility to reduce the amount outstanding on our revolving credit facility. We also expect to use the revolving credit facility, the receivables securitization facility, 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 $297.3 million as of September 30, 2017, and $247.7 million as of December 31, 2016. Cash and cash equivalents held outside the United States totaled $233.3 million as of September 30, 2017, and $172.2 million as of December 31, 2016. If we repatriated all foreign earnings, the estimated effect on income taxes payable would be an increase of approximately $29.0 million as of September 30, 2017. Working capital at September 30, 2017, was $468.5 million and at December 31, 2016, was $162.4 million.
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.
Cash flow from operating activities. We generated $218.3 million and $376.8 million of cash flow from operations during the nine months ended September 30, 2017 and September 30, 2016, respectively, a decrease of $158.5 million compared to the nine months ended September 30, 2016. The increase in volumes, customer rates, and costs of transportation, including fuel prices, in the first nine months of 2017 compared to the first nine months of 2016 resulted in increased growth in working capital and led to decreased operating cash flow.
Cash used for investing activities. We used $94.7 million and $292.0 million of cash during the nine months ended September 30, 2017 and September 30, 2016 for investing activities.
We used $46.4 million and $71.1 million for capital expenditures during the nine months ended September 30, 2017 and September 30, 2016. During the nine months ended September 30, 2017, our capital expenditures consisted primarily of investments in facilities, office equipment, and information technology, which are intended to improve efficiencies and help grow the business.
During the nine months ended September 30, 2017, we used $48.4 million in connection with the acquisitions. We used $46.7 million in connection with the acquisition of Milgram. We used $1.8 million for a post-closing working capital adjustment due to the sellers of APC under the terms of the acquisition agreement.
Cash used for financing activities. We used $91.2 million and $28.2 million of cash flow for financing activities during the nine months ended September 30, 2017 and September 30, 2016.
During the nine months ended September 30, 2017, we had net short-term repayments of $21.0 million. During the nine months ended September 30, 2016, we had net short-term borrowings of $275.0 million. The outstanding balance on the revolving credit facility was $719.0 million as of September 30, 2017.
During the nine months ended September 30, 2017, we had long-term borrowings of $250.0 million on the Receivables Securitization Facility. The outstanding balance on the Receivables Securitization Facility was $250.0 million as of September 30, 2017. We were in compliance with all of the covenants under the Credit Agreement, Note Purchase Agreement, and Receivables Securitization Facility as of September 30, 2017.
We used $192.8 million and $191.1 million to pay cash dividends during the nine months ended September 30, 2017 and September 30, 2016. The increase was primarily due to a dividend rate increase in 2017 compared to 2016, partially offset by a decrease in weighted average shares outstanding during the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016.

We used $130.0 million and $109.1 million on share repurchases during the nine months ended September 30, 2017 and September 30, 2016. The change was due to an increase in the number of shares repurchased and the average price of the repurchased shares during the nine months ended September 30, 2017, compared to the same period of 2016. In August 2013, the Board of Directors increased the number of shares authorized for repurchase by 15,000,000 shares. As of September 30, 2017, there were 2,654,301 shares remaining for future repurchases under the repurchase authorization. The number of shares we repurchase, if any, during future periods will vary based on our cash position, potential uses of our cash, and market conditions.
We used $20.7 million and $36.2 million to acquire shares from employees through their withholding taxes resulting from the delivery of restricted equity during the nine months ended September 30, 2017 and September 30, 2016.
Management believes that 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 in the foreseeable future. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our condensed consolidated financial statements include accounts of the company and all majority-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. In certain circumstances, those estimates and assumptions can affect amounts reported in the accompanying condensed consolidated financial statements and related footnotes. In preparing our financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We do not believe there is a great likelihood that materially different amounts would be reported relatedRefer to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Note 1 of the Notes to Consolidated Financial Statements in ourcompany's 2019 Annual Report on Form 10-K for the year ended December 31, 2016, includes a summary of the significantcomplete discussion regarding our critical accounting policies and methods used in the preparationestimates. As of our consolidated financial statements. The following is a brief discussion ofSeptember 30, 2020, there were no material changes to our critical accounting policies and estimates.
Revenue recognition. Total revenues consist of the total dollar value of goods and services purchased from us by customers. Net revenues are total revenues less the direct costs of transportation, products, and handling. We act principally as the service provider for these transactions and recognize revenue as these services are rendered or goods are delivered. At that time, our obligations to the transactions are completed and collection of receivables is reasonably assured. Most transactions in our Transportation and Sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods we sell. In these transactions, we are the primary obligor, we have credit risk, we have discretion to select the supplier, and we have latitude in pricing decisions. Additionally, in our Sourcing business, we often take loss of inventory risk during shipment and have general inventory risk.
Certain transactions in customs brokerage, transportation management, and sourcing are recorded at the net amount we charge our customers for the service we provide because many of the factors stated above are not present.
Valuations for accounts receivable. Our allowance for doubtful accounts is calculated based upon the aging of our receivables, our historical experience of uncollectible accounts, and any specific customer collection issues that we have identified. The allowance was $44.4 million as of September 30, 2017 and $39.5 million as of December 31, 2016. We believe that the recorded allowance is sufficient and appropriate based on our customer aging trends, the exposures we have identified, and our historical loss experience.
Goodwill. Goodwill represents the excess of the cost of acquired businesses over the net of the fair value of identifiable tangible net assets and identifiable intangible assets purchased and liabilities assumed.
Goodwill is tested at least annually for impairment and is tested for impairment more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is performed using a two-step process. In the first step, the fair value of each reporting unit is compared with the carrying amount of the reporting unit, including goodwill. If the estimated fair value is less than the carrying amount of the reporting unit, there is an indication that goodwill impairment exists, and a second step must be completed to determine the amount of the goodwill impairment, if any, that should be recorded. In the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation.

The fair value of each reporting unit is determined using a discounted cash flow analysis and market approach. Projecting discounted future cash flows requires us to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital, and the appropriate discount rate. Use of the market approach consists of comparisons to comparable publicly-traded companies that are similar in size and industry. Actual results may differ from those used in our valuations.
Stock-based compensation. The fair value of each share-based payment award is established on the date of grant. For grants of restricted shares and restricted units, the fair value is established based on the market price on the date of the grant, discounted for post-vesting holding restrictions. The discounts on outstanding grants vary from 15 percent to 22 percent and are calculated using the Black-Scholes option pricing model. Changes in the measured stock price volatility and interest rates are the primary reason for changes in the discount. For grants of options, we use the Black-Scholes option pricing model to estimate the fair value of share-based payment awards. The determination of the fair value of share-based awards is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate, and expected dividends.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Refer to the company’s 2019 Annual Report on Form 10-K for a complete discussion on the company’s market risk. As of September 30, 2020 there were no material changes in market risk from those disclosed in the company’s 2019 Annual Report on Form 10-K.
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LIQUIDITY AND CAPITAL RESOURCES
We had $297.3have historically generated substantial cash from operations, which has enabled us to fund our organic growth while paying cash dividends and repurchasing stock. In addition, we maintain the following debt facilities as described in Note 4, Financing Arrangements (dollars in thousands):
DescriptionCarrying Value as of September 30, 2020Borrowing CapacityMaturity
Revolving credit facility$— $1,000,000 October 2023
Senior Notes, Series A175,000 175,000 August 2023
Senior Notes, Series B150,000 150,000 August 2028
Senior Notes, Series C175,000 175,000 August 2033
Receivables securitization facility (1)
59,979 250,000 December 2020
Senior Notes (1)
593,087 600,000 April 2028
Total debt$1,153,066 $2,350,000 

(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, although we temporarily suspended share repurchase activity as described below.
Cash and cash equivalents totaled $252.6 million as of September 30, 2020 and $447.9 million as of December 31, 2019. Cash and cash equivalents held outside the United States totaled $242.0 million as of September 30, 2020 and $405.1 million as of December 31, 2019. Working capital increased slightly from $1.08 billion at December 31, 2019, to $1.09 billion at September 30, 2020.
We prioritize our investments to grow the business, as we require some working capital and a relatively small amount of capital expenditures to grow. We are continually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.
The following table summarizes our major sources and uses of cash and cash equivalents on(dollars in thousands):
Nine Months Ended September 30,
20202019% change
Sources (uses) of cash:
Cash provided by operating activities$337,049 $623,858 (46.0)%
Capital expenditures(40,261)(50,943)
Acquisitions, net of cash acquired(223,230)(59,188)
Other investing activities5,525 16,625 
Cash used for investing activities(257,966)(93,506)175.9 %
Repurchase of common stock(68,563)(241,303)
Cash dividends(207,428)(207,865)
Net payments on debt(83,000)(94,000)
Other financing activities84,007 26,090 
Cash used for financing activities(274,984)(517,078)(46.8)%
Effect of exchange rates on cash and cash equivalents612 (7,465)
Net change in cash and cash equivalents$(195,289)$5,809 

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Cash flow from operating activities. Cash flow from operating activities decreased significantly during the nine months ended September 30, 2017. Substantially all2020 compared to the nine months ended September 30, 2019 due to unfavorable changes in working capital. The unfavorable changes in working capital were primarily related to a sequential increase in accounts receivable associated with increasing pricing in a number of service lines during the third quarter of 2020. Given the COVID-19 pandemic, we are closely monitoring credit and collections activities to minimize risk as well as working with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.
Cash used for investing activities. We used $222.7 million for the acquisition of Prime Distribution during the nine months ended September 30, 2020. We used $45.0 million for the acquisition of Space Cargo and $14.2 million for the acquisition of Dema Service during the nine months ended September 30, 2019. Capital expenditures consisted primarily of investments in information technology, which are intended to increase employee productivity, automate interactions with our customers and contracted carriers, and improve our internal workflows to help expand our operating margins and grow the business. During the nine months ended September 30, 2019, we sold a facility we owned in Chicago, Illinois for approximately $17.0 million.
Cash used for financing activities. Net repayments on debt in the nine months ended September 30, 2020 and 2019 were to reduce the outstanding balance of the Receivables Securitization Facility. The slight decrease in cash equivalents are in demand accounts with financial institutions. The primary market risks associated with these investments are liquidity risks.
We are a partydividends was due to a credit agreement with various lenders consistingdecrease in shares outstanding during the nine months ended September 30, 2020 and timing of dividends processed related to employee benefit plans, mostly offset by a $900 million revolving loan facility. Interest accrues on$0.01 per share dividend increase in 2020 compared to 2019. The decrease in cash used for share repurchases was due to a decrease in the revolving loan at variable ratesnumber of shares repurchased during the nine months ended September 30, 2020 as we temporarily suspended our share repurchase activity near the end of the first quarter of 2020 as we continue to assess the impacts of COVID-19. In addition, the average price paid per share decreased compared to the same period of 2019. The number of shares we repurchase, if any, during future periods will vary based on LIBORour cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value, and we expect to resume our opportunistic share repurchase program in the fourth quarter of this year. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We may seek to retire or "prime" plus the applicable add-on percentage as defined therein. At September 30, 2017,purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.
Although there was $719 million outstanding on the revolving loan.
We are a partyis uncertainty related to the Note Purchase Agreement, as amended, with various institutional investors with fixed rates consisting of: (i) $175,000,000anticipated impact of the company’s 3.97 percent Senior Notes, Series A, due August 27, 2023, (ii) $150,000,000 of the company’s 4.26 percent Senior Notes, Series B, due August 27, 2028, and (iii) $175,000,000 of the company’s 4.60 percent Senior Notes, Series C, due August 27, 2033. At September 30, 2017, there was $500 million outstandingCOVID-19 pandemic on the notes.
We are a party to a receivables securitization facility with various lenders and provides funding of up to $250 million. Interest accrues on the facility at variable rates based on the asset-backed commercial paper rate or the 30 day LIBOR plus the applicable add-on percentage as defined therein. At September 30, 2017, there was $250 million outstanding on the securitization facility.
A hypothetical 100-basis-pointour future results, we believe that, assuming no change in our current business plan, our available cash, together with expected future cash generated from operations, the interest rate would not haveamount 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. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.

Recently Issued Accounting Pronouncements 
Refer to Note 1, Basis of Presentation, contained in this quarterly report and in the company's 2019 Annual Report on Form 10-K for a material effect on our earnings. We do not use derivative financial instruments to manage interest rate risk or to speculate on future changes in interest rates. A rise in interest rates could negatively affect the fair valuediscussion of our investments. Market risk arising from changes in foreign currency exchange rates are not material due to the size of our international operations.recently issued accounting pronouncements.


ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of ourOur management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation ofdoes not expect that our disclosure controls and procedures (as defined in RuleRules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon) or our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of the controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of effectiveness of controls and procedures to future periods are subject to the risk that the controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the controls and procedures may have deteriorated.

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As of September 30, 2020, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded based upon the evaluation described above that, as of the end of the period covered by this report,September 30, 2020, our disclosure controls and procedures were effective.effective at the reasonable assurance level.
(b) Changes in internal controls over financial reporting.
There were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the most recent fiscal quarterthree months ended September 30, 2020, that have materially affected, or are reasonably likely to materially affect, the company'sour internal control over financial reporting.

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PART II-OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS
We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the factors discusseddisclosed in Part I, "ItemItem 1A. Risk Factors"Factors, in our Annual Report on Form 10-K for the year ended December 31, 2016,2019, which could materially affect our business, financial condition, or future results. We have updated our existing risk factor on catastrophic events below to include information associated with the current events related to COVID-19 that has significantly impacted global markets due to outbreaks occurring across the globe beginning in early 2020. Except for the updates to this risk factor set forth below, there have not been material changes in our risk factors from those disclosed in Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2019. 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.

We may be subject to negative impacts of catastrophic events. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic, or other catastrophic event could cause delays in providing services or performing other critical functions. A catastrophic event that results in the destruction or disruption of any of our critical business or information systems could harm our ability to conduct normal business operations and adversely impact our operating results.
In addition, the company is monitoring the ongoing COVID-19 pandemic, which has already caused a significant disruption to global financial markets and supply chains and has resulted in increased travel restrictions and extended shutdown of certain businesses across the globe. We have already experienced changes in demand, including declines in certain verticals and regions, that exacerbate the conditions we experienced in 2019, along with volatile pricing. The significance of the operational and financial impact to our business will likely depend on how long and widespread this outbreak proves to be. The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the outbreak and the international actions that are being taken to contain and treat it. While we currently expect this business disruption to be temporary, there is uncertainty around the duration and its broader impact on the economy, and therefore the effects it will have on our operations and financial results. If economic or market conditions in key global markets deteriorate further, we expect to continue experiencing material adverse effects on our business and results of operations and may experience material adverse effects on our financial positions.


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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about purchases by the company during the quarter ended September 30, 2017,2020 of shares of the company's common stock.
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)
July 20207,059 $80.88 — 9,022,073 
August 20203,447 95.74 — 9,022,073 
September 20206,770 98.55 — 9,022,073 
Third Quarter 202017,276 $90.77 — 9,022,073 
 
Total Number
of Shares
(or Units)
Purchased (a)
 
Average Price
Paid Per
Share
(or Unit)
 
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs (b)
 
Maximum Number of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs (b)
July 1, 2017-July 31, 2017306,403
 $67.48
 296,507
 3,234,848
August 1, 2017-August 31, 201763,559
 65.70
 60,926
 3,173,922
September 1, 2017-September 30, 2017523,287
 73.12
 519,621
 2,654,301
Third quarter 2017893,249
 $70.66
 877,054
 2,654,301
(a)(1) The total number of shares purchased includes: (i) 877,054 sharesconsists of common stock purchased under the authorization described below; and (ii) 16,19517,276 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.
(b)(2) In August 2013,May 2018, the Board of Directors increased the number of shares authorized for repurchase by 15,000,000 shares. As of September 30, 2017,2020, there were 2,654,3019,022,073 shares remaining for future repurchases. Purchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.


ITEM 3. DEFAULTS ON SENIOR SECURITIES
NoneNone.



ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.


ITEM 5. OTHER INFORMATION
NoneNone.


ITEM 6. EXHIBITS    
Exhibits filed with, or incorporated by reference into, this report:
31.1
31.2
32.1
32.2
101Financial statements from the Quarterly Report on Form 10-Q of the company for the period ended September 30, 2017,2020 formatted in Inline XBRL (embedded within the Inline XBRL document)
104The cover page from the Quarterly Report on Form 10-Q of the company for the period ended September 30, 2020 formatted in Inline XBRL (embedded within the Inline XBRL document)




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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on November 8, 2017.October 30, 2020.
 


C.H. ROBINSON WORLDWIDE, INC.
C.H. ROBINSON WORLDWIDE, INC.By:/s/ Robert C. Biesterfeld, Jr.
Robert C. Biesterfeld, Jr.
By:/s/ John P. Wiehoff
John P. Wiehoff
Chief Executive Officer
By:/s/ Andrew C. ClarkeMichael P. Zechmeister
Andrew C. ClarkeMichael P. Zechmeister
Chief Financial Officer (principal accounting officer)


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