Table of Contents

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


ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended SeptemberJune 30, 20172023
¨☐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

CHR_Logomark_299CP_CMYK (003).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 offices, including zip code)

952-937-8500
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each 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 registrantregistrant: (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 filer☒ýAccelerated filer☐¨Emerging growth companyEmerging 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,August 2, 2023, the number of shares outstanding of the registrant’s Common Stock, par value $.10$0.10 per share, was 139,405,298.116,431,364.



Table of Contents

C.H. ROBINSON WORLDWIDE, INC.
TABLE OF CONTENTS
PART I. Financial Information
PART I. Financial Information
Item 1.
3
3
4
5
56
67
Item 2.
1719
Item 3.
2930
Item 4.
2930
PART II. Other Information
Item 1.
3031
Item 1A.
3031
Item 2.
3031
Item 3.
3031
Item 4.
3132
Item 5.
3132
Item 6.
3132
33







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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

C.H. ROBINSON WORLDWIDE, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)September 30, 2017 December 31, 2016
ASSETS(unaudited)  
Current assets:   
Cash and cash equivalents$297,307
 $247,666
Receivables, net of allowance for doubtful accounts of $44,364 and $39,5432,104,314
 1,711,191
Prepaid expenses and other53,225
 49,245
Total current assets2,454,846
 2,008,102
    
Property and equipment, net232,905
 232,953
Goodwill1,275,550
 1,232,796
Other intangible assets, net160,595
 167,525
Deferred tax asset5,917
 2,250
Other assets45,775
 44,132
Total assets$4,175,588
 $3,687,758
    
LIABILITIES AND STOCKHOLDERS’ INVESTMENT   
Current liabilities:   
Accounts payable$1,033,726
 $839,736
Outstanding checks70,334
 82,052
Accrued expenses:   
Compensation92,005
 98,107
Income taxes11,477
 15,472
Other accrued liabilities59,760
 70,351
Current portion of debt719,000
 740,000
Total current liabilities1,986,302
 1,845,718
    
Long-term debt750,000
 500,000
Noncurrent income taxes payable17,774
 18,849
Deferred tax liabilities66,396
 65,122
Other long-term liabilities241
 222
Total liabilities2,820,713
 2,429,911
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
Additional paid-in capital427,032
 419,280
Retained earnings3,349,994
 3,190,578
Accumulated other comprehensive loss(22,880) (61,442)
Treasury stock at cost (39,132 and 37,748 shares)(2,413,258) (2,304,695)
Total stockholders’ investment1,354,875
 1,257,847
Total liabilities and stockholders’ investment$4,175,588
 $3,687,758
(unaudited, in thousands, except per share data)
 June 30, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$210,155 $217,482 
Receivables, net of allowance for credit loss of $14,461 and $28,7492,505,130 2,991,753 
Contract assets, net of allowance for credit loss188,207 257,597 
Prepaid expenses and other147,993 122,406 
Total current assets3,051,485 3,589,238 
Property and equipment, net of accumulated depreciation and amortization159,222 159,432 
Goodwill1,469,407 1,470,813 
Other intangible assets, net of accumulated amortization52,591 64,026 
Right-of-use lease assets343,734 372,141 
Deferred tax assets201,858 181,602 
Other assets126,964 117,312 
Total assets$5,405,261 $5,954,564 
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable$1,358,619 $1,466,998 
Outstanding checks90,969 103,561 
Accrued expenses:
Compensation112,421 242,605 
Transportation expense142,568 199,092 
Income taxes9,763 15,210 
Other accrued liabilities159,065 168,009 
Current lease liabilities72,223 73,722 
Current portion of debt815,863 1,053,655 
Total current liabilities2,761,491 3,322,852 
Long-term debt920,495 920,049 
Noncurrent lease liabilities288,960 313,742 
Noncurrent income taxes payable28,104 28,317 
Deferred tax liabilities15,099 14,256 
Other long-term liabilities3,005 1,926 
Total liabilities4,017,154 4,601,142 
Stockholders’ investment:
Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding— — 
Common stock, $0.10 par value, 480,000 shares authorized; 179,204 and 179,204 shares issued, 116,335 and 116,323 outstanding11,633 11,632 
Additional paid-in capital734,244 743,288 
Retained earnings5,655,489 5,590,440 
Accumulated other comprehensive loss(92,919)(88,860)
Treasury stock at cost (62,869 and 62,881 shares)(4,920,340)(4,903,078)
Total stockholders’ investment1,388,107 1,353,422 
Total liabilities and stockholders’ investment$5,405,261 $5,954,564 
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,
(In thousands, except per share data)2017 2016 2017 2016
Revenues:       
Transportation$3,433,701
 $2,998,583
 $9,855,739
 $8,593,767
Sourcing350,750
 357,171
 1,053,855
 1,135,671
Total revenues3,784,451
 3,355,754
 10,909,594
 9,729,438
Costs and expenses:  
    
Purchased transportation and related services2,869,616
 2,469,939
 8,214,856
 6,974,556
Purchased products sourced for resale320,989
 327,353
 958,537
 1,038,870
Personnel expenses293,204
 256,883
 867,928
 804,631
Other selling, general, and administrative expenses106,177
 90,312
 304,030
 267,415
Total costs and expenses3,589,986
 3,144,487
 10,345,351
 9,085,472
Income from operations194,465
 211,267
 564,243
 643,966
Interest and other expense(10,484) (7,426) (29,154) (22,463)
Income before provision for income taxes183,981
 203,841
 535,089
 621,503
Provision for income taxes64,795
 74,813
 182,752
 230,422
Net income119,186

129,028
 352,337
 391,081
        
Other comprehensive gain14,426
 518
 38,562
 491
Comprehensive income$133,612
 $129,546
 $390,899
 $391,572
        
Basic net income per share$0.85
 $0.90
 $2.50
 $2.73
Diluted net income per share$0.85
 $0.90
 $2.49
 $2.73
        
Basic weighted average shares outstanding140,422
 142,611
 140,962
 143,040
Dilutive effect of outstanding stock awards600
 272
 441
 205
Diluted weighted average shares outstanding141,022
 142,883
 141,403
 143,245
        
Cash dividends declared per share$0.45
 $0.43
 $1.35
 $1.29
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Revenues:
Transportation$4,084,827 $6,465,642 $8,412,792 $12,993,993 
Sourcing337,029 332,833 620,734 620,435 
Total revenues4,421,856 6,798,475 9,033,526 13,614,428 
Costs and expenses:
Purchased transportation and related services3,453,560 5,466,874 7,124,591 11,117,098 
Purchased products sourced for resale302,800 299,988 557,799 559,521 
Personnel expenses377,277 444,764 760,383 858,125 
Other selling, general, and administrative expenses155,596 117,184 297,097 264,545 
Total costs and expenses4,289,233 6,328,810 8,739,870 12,799,289 
Income from operations132,623 469,665 293,656 815,139 
Interest and other income/expense, net(18,259)(27,395)(46,524)(41,569)
Income before provision for income taxes114,364 442,270 247,132 773,570 
Provision for income taxes17,048 94,085 34,925 155,037 
Net income97,316 348,185 212,207 618,533 
Other comprehensive loss(6,536)(33,596)(4,059)(26,726)
Comprehensive income$90,780 $314,589 $208,148 $591,807 
Basic net income per share$0.82 $2.71 $1.79 $4.78 
Diluted net income per share$0.81 $2.67 $1.77 $4.71 
Basic weighted average shares outstanding118,500 128,405 118,567 129,447 
Dilutive effect of outstanding stock awards1,307 1,933 1,253 1,771 
Diluted weighted average shares outstanding119,807 130,338 119,820 131,218 
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
Loss		Treasury
Stock		Total
Stockholders’
Investment
Balance December 31, 2022116,323 $11,632 $743,288 $5,590,440 $(88,860)$(4,903,078)$1,353,422 
Net income114,891 114,891 
Foreign currency adjustments2,477 2,477 
Dividends declared, $0.61 per share(73,581)(73,581)
Stock issued for employee benefit plans430 44 (28,532)28,113 (375)
Stock-based compensation expense— — 15,607 — 15,607 
Repurchase of common stock(316)(32)(31,021)(31,053)
Balance March 31, 2023116,437 11,644 730,363 5,631,750 (86,383)(4,905,986)1,381,388 
Net income97,316 97,316 
Foreign currency adjustments(6,536)(6,536)
Dividends declared, $0.61 per share(73,577)(73,577)
Stock issued for employee benefit plans228 22 (2,154)17,338 15,206 
Stock-based compensation expense— — 6,035 — 6,035 
Repurchase of common stock(330)(33)(31,692)(31,725)
Balance June 30, 2023116,335 $11,633 $734,244 $5,655,489 $(92,919)$(4,920,340)$1,388,107 
Common
Shares
Outstanding		AmountAdditional
Paid-in
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Treasury
Stock		Total
Stockholders’
Investment
Balance December 31, 2021129,186 $12,919 $673,628 $4,936,861 $(61,134)$(3,540,340)$2,021,934 
Net income270,348 270,348 
Foreign currency adjustments6,870 6,870 
Dividends declared, $0.55 per share(72,542)(72,542)
Stock issued for employee benefit plans418 42 (17,377)26,239 8,904 
Stock-based compensation expense— — 24,606 — 24,606 
Repurchase of common stock(1,593)(160)(164,458)(164,618)
Balance March 31, 2022128,011 12,801 680,857 5,134,667 (54,264)(3,678,559)2,095,502 
Net income348,185 348,185 
Foreign currency adjustments(33,596)(33,596)
Dividends declared, $0.55 per share(71,506)(71,506)
Stock issued for employee benefit plans316 31 377 20,478 20,886 
Stock-based compensation expense— — 27,929 — 27,929 
Repurchase of common stock(3,211)(320)(334,665)(334,985)
Balance June 30, 2022125,116 $12,512 $709,163 $5,411,346 $(87,860)$(3,992,746)$2,052,415 
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
 Six Months Ended June 30,
20232022
OPERATING ACTIVITIES
Net income$212,207 $618,533 
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization50,355 45,748 
Provision for credit losses(8,397)(2,142)
Stock-based compensation21,642 52,535 
Deferred income taxes(21,825)(5,844)
Excess tax benefit on stock-based compensation(8,645)(7,553)
Other operating activities3,080 (26,356)
Changes in operating elements, net of acquisitions:
Receivables501,210 (378,641)
Contract assets69,662 (65,362)
Prepaid expenses and other(23,834)(14,170)
Accounts payable and outstanding checks(125,090)37,207 
Accrued compensation(130,197)(9,673)
Accrued transportation expense(56,524)62,506 
Accrued income taxes3,308 (54,964)
Other accrued liabilities(9,611)1,391 
Other assets and liabilities2,035 (1,886)
Net cash provided by operating activities479,376 251,329 
INVESTING ACTIVITIES
Purchases of property and equipment(21,679)(36,781)
Purchases and development of software(29,622)(32,622)
Proceeds from sale of property and equipment— 63,208 
Net cash used for investing activities(51,301)(6,195)
FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans36,684 53,574 
Stock tendered for payment of withholding taxes(21,853)(23,784)
Repurchase of common stock(62,754)(490,699)
Cash dividends(146,195)(145,268)
Proceeds from long-term borrowings— 200,000 
Proceeds from short-term borrowings1,861,750 2,735,000 
Payments on short-term borrowings(2,099,750)(2,586,000)
Net cash used for financing activities(432,118)(257,177)
Effect of exchange rates on cash and cash equivalents(3,284)(6,445)
Net change in cash and cash equivalents(7,327)(18,488)
Cash and cash equivalents, beginning of period217,482 257,413 
Cash and cash equivalents, end of period$210,155 $238,925 
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, South America, and South America.the Middle East. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.
Our reportable segments are North American Surface Transportation (“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 9.8, Segment Reporting.
The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2016.2022.
Recently Issued Accounting Standards - In May 2014,RECENTLY ISSUED ACCOUNTING STANDARDS
For the Financial Accounting Standards Board (“FASB”)six months ended June 30, 2023, there were no recently issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, and in August 2015 issued ASU 2015-14, which amended the standard as 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 isor newly adopted accounting pronouncements that a company will recognize revenue when it transfers promised goodshad, 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. We plan to adopt 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.
We anticipate the adoption of this standard will change the timing of revenue recognition for most of our transportation business from at delivery to over the transit period as our performance obligation is completed. Due to the short transit period of many of our performance obligations, we do not expect this changeare expected to have, a material impact on our 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. 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, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing, and uncertainty 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 provisions in the first quarter of 2019 using a modified retrospective approach. Early adoption is permitted, although we do not plan to adopt early. We have obligations under lease agreements for facilities and equipment, which are classified as operating leases under 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). 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 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.
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 asstatements.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Note 1 of the fair valueNotes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 includes a summary of the significant accounting policies and methods used in the preparation of our reporting units is substantially in excess of their respective carrying values.consolidated financial statements.
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
Balance, December 31, 2022$1,188,076 $206,189 $76,548 $1,470,813 
Foreign currency translation(1,853)224 223 (1,406)
Balance, June 30, 2023$1,186,223 $206,413 $76,771 $1,469,407 
 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
Acquisitions3,673
 24,902
 —
 —
 28,575
Translation10,320
 1,970
 1,583
 306
 14,179
September 30, 2017$921,223
 $185,922
 $141,141
 $27,264
 $1,275,550
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”). As part of our Step Zero Analysis, we determined that 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 portionJune 30, 2023.
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Table of a reporting unit.Contents

Identifiable intangible assets consisted of the following (in thousands):
June 30, 2023December 31, 2022
CostAccumulated AmortizationNetCostAccumulated AmortizationNet
Finite-lived intangibles
Customer relationships$161,078 $(117,087)$43,991 $162,358 $(106,932)$55,426 
Indefinite-lived intangibles
Trademarks8,600 — 8,600 8,600 — 8,600 
Total intangibles$169,678 $(117,087)$52,591 $170,958 $(106,932)$64,026 
 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 June 30,Six Months Ended June 30,
2023202220232022
Amortization expense$5,773 $5,957 $11,588 $11,991 
 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 SeptemberJune 30, 2017,2023, will be amortized over their remaining lives as follows (in thousands):
NASTGlobal ForwardingAll Other and CorporateTotal
Remainder of 2023$4,042 $4,482 $547 $9,071 
20248,008 3,552 1,094 12,654 
20257,857 2,314 1,094 11,265 
20267,857 377 748 8,982 
20271,310 — 501 1,811 
Thereafter— — 208 208 
Total$43,991 

 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 no Level 3 assets or liabilities as of and during the periods ended SeptemberJune 30, 2017,2023 and December 31, 2016.2022. There were no transfers between levels during the period.



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Table of Contents
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
June 30, 2023December 31, 2022MaturityJune 30, 2023December 31, 2022
Revolving credit facility6.22 %— %November 2027$141,000 $— 
364-day revolving credit facility— %5.12 %May 2023— 379,000 
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)
5.87 %5.01 %November 2023499,863 499,655 
Senior Notes (1)
4.20 %4.20 %April 2028595,495 595,049 
Total debt1,736,358 1,973,704 
Less: Current maturities and short-term borrowing(815,863)(1,053,655)
Long-term debt$920,495 $920,049 

(1) Net of unamortized discounts and issuance costs.

SENIOR UNSECURED REVOLVING CREDIT FACILITY
We have a senior unsecured revolving credit facility (the "Credit Agreement"“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.
November 19, 2027. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of one-month LIBORSOFR plus a specified margin). As of SeptemberJune 30, 2017,2023, the variable rate equaled LIBORSOFR and a Credit Spread Adjustment of 0.10 percent plus 1.131.0 percent. In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility. The weighted average interest rate incurred on borrowings during the three and nine months ended September 30, 2017, was approximately 2.4facility ranging from 0.07 percent and 2.2 percent, respectively. At September 30, 2017, the interest rate incurred on borrowings was approximately 2.4to 0.15 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 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 3.003.75 to 1.00.
The Credit Agreement also contains customary events of default. If
364-DAY UNSECURED REVOLVING CREDIT FACILITY
On May 6, 2022, we entered into an eventunsecured revolving credit facility (the “364-day Credit Agreement”) with a total availability of default$500 million and a maturity date of May 5, 2023. The interest rate on borrowings under the 364-day Credit Agreement occurs and is continuing, thenwas based an alternate base rate plus a margin or a term SOFR-based rate plus a margin. There was also a commitment fee on the administrative agent may declare any outstanding obligationsaggregate unused commitments under the Credit Agreement to be immediately duefacility. The facility expired on May 5, 2023, 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.it was not renewed.
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 $472.4 million on June 30, 2023. We estimate the fair value of the Notes primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for 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 Level 2. Series A matures in August 2023 and is classified as current portion of debt in our Condensed Consolidated Balance Sheets as of June 30, 2023.
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 Indebtedness3.50 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 end10 percent.
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Table of each of our fiscal quarters, Consolidated Priority Debt to exceed 15 percent of Consolidated Total Assets.Contents
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 On November 21, 2022, we executed a third amendment to the initial purchasers in a private placement in reliance on Section 4(a)(2)Note Purchase Agreement to, among other things, facilitate the terms 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.
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.Credit Agreement.
U.S. Trade Accounts Receivable SecuritizationTRADE ACCOUNTS RECEIVABLE SECURITIZATION
On April 26, 2017,November 19, 2021, we entered into a receivables purchase agreement and related transaction documents with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York BranchAmerica, N.A. and Wells Fargo Bank, National AssociationN.A. to provide a receivables securitization facility (the “Receivables Securitization Facility”). The Receivables Securitization Facility is based on the securitization of our U.S. trade accounts receivable and provides fundingwith a total availability of up to $250 million. The borrowings outstanding under the Receivables Securitization Facility were $250$500 million as of SeptemberJune 30, 2017 and are classified as long-term debt on the condensed consolidated balance sheets. The borrowings under the Receivables Securitization Facility were used to pay down amounts previously outstanding on the Credit Agreement.2023. The interest rate on borrowings under the Receivables Securitization Facility is based on the asset-backed commercial paper rateBloomberg Short Term Bank Yield Index (“BSBY”) plus a margin or 30 day 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.margin. There is also a commitment fee we are required to pay on any unused portion of the facility. The Receivables Securitization Facility expires on November 17, 2023, unless extended by the parties. The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest rate floats. We consider these borrowings to be a Level 2 financial liability. Borrowings on the Receivables Securitization Facility are included within proceeds on current borrowings on the consolidated statement of cash flows.
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.events.
As of September 30, 2017,On February 1, 2022, 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 onamended the Receivables Securitization Facility approximatesprimarily to increase the total availability from $300 million to $500 million pursuant to the provisions of the existing agreement. On July 7, 2022, we amended the Receivables Securitization Facility to effectively increase the receivables pool available with respect to the Receivables Securitization Facility.
SENIOR NOTES
On April 9, 2018, we issued senior unsecured notes (“Senior Notes”) through a public offering. The Senior Notes bear an annual interest rate of 4.20 percent payable semi-annually on April 15 and October 15, until maturity on April 15, 2028. Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the Senior Notes have an effective yield to maturity of approximately 4.39 percent per annum. The fair value because it canof the Senior Notes, excluding debt discounts and issuance costs, approximated $575.9 million as of June 30, 2023, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was $595.5 million as of June 30, 2023.
We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes. Upon the occurrence of a “change of control triggering event” as defined in the Senior Notes (generally, a change of control of us accompanied by a reduction in the credit rating for the Senior Notes), we will generally be redeemedrequired 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 short noticeour ability to incur liens or enter into sale and leaseback transactions above certain limits; and consolidate, or merge or transfer substantially all of our assets and those of our subsidiaries on a consolidated basis. It also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include, among other things nonpayment, breach of covenants in the indenture, and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing with respect to the Senior Notes, the trustee or holders of at least 25 percent in principal amount outstanding of the Senior Notes may declare the principal and the accrued and unpaid interest, rate floats, therefore, we consider these borrowingsif any, on all of the outstanding Senior Notes to be due and payable. These covenants and events of default are subject to a Level 2number of important qualifications, limitations, and exceptions that are described in the indenture. The indenture does not contain any financial liability.ratios or specified levels of net worth or liquidity to which we must adhere.
In addition to the above financing agreements, we have a $15 million discretionary line of credit with U.S. Bank of which $9.9 million is currently utilized for standby letters of credit related to insurance collateral as of June 30, 2023. These standby letters of credit are renewed annually and were undrawn as of June 30, 2023.
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Table of Contents
NOTE 5. INCOME TAXES
C.H. Robinson Worldwide, Inc.A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Federal statutory rate21.0 %21.0 %21.0 %21.0 %
State income taxes, net of federal benefit2.4 2.0 2.3 1.7 
Share based payment awards(0.9)(0.6)(3.1)(0.9)
Foreign tax credits(6.2)(1.4)(3.3)(1.1)
Other U.S. tax credits and incentives(3.9)(0.3)(3.9)(1.0)
Foreign0.6 (0.5)(0.3)(0.5)
Other1.9 1.1 1.4 0.8 
Effective income tax rate14.9 %21.3 %14.1 %20.0 %
During the first quarter of 2023, management made the determination that the company is no longer indefinitely reinvested with regard to the unremitted earnings of any foreign subsidiaries although it remains indefinitely reinvested related to other taxable differences that may exist with regard to these subsidiaries. The change resulted in a one-time increase to tax expense of approximately $2.0 million in the six months ended June 30, 2023.
As of June 30, 2023, we have $43.3 million of unrecognized tax benefits and its 80 percent (or more) owned U.S. subsidiaries filerelated interest and penalties. It is possible the amount of unrecognized tax benefit could change in the next 12 months as a consolidated federal return. We file unitaryresult of a lapse of the statute of limitations, new information, or separate state returns based on state filing requirements.settlements with taxing authorities. The total liability for unrecognized tax benefits is expected to decrease by approximately $1.3 million in the next 12 months due to the lapsing of statutes of limitations. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income tax returns before 2010. During the first quarter of 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718). This adoption resulted in2015. We are currently under a decrease in our provision for income taxeslimited Internal Revenue Service audit for the three and nine months ended September 30,2015 to 2017 tax years, while the 2018 U.S. Federal statute 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.limitations is closed.
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,
 2017 2016 2017 2016
Stock options$1,715
 $603
 $5,341
 $5,818
Stock awards5,427
 3,747
 17,149
 22,768
Company expense on ESPP discount525
 491
 2,019
 2,040
Total stock-based compensation expense$7,667
 $4,841
 $24,509
 $30,626
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Stock options$2,242 $3,263 $4,460 $6,482 
Stock awards2,980 23,887 14,992 43,950 
Company expense on ESPP discount813 779 2,190 2,103 
Total stock-based compensation expense$6,035 $27,929 $21,642 $52,535 
On May 12, 2016,5, 2022, our shareholders approved an amendment to and restatement of our 2013a 2022 Equity Incentive Plan which(the “Plan”) and authorized an initial 4,261,884 shares for issuance of awards thereunder. The Plan allows us to grant certain stock awards, including stock options at fair market value, performance-based restricted stock units and performance shares, and time-based restricted stock units, to our key employees and outsidenon-employee directors. A maximum of 13,041,803 shares can be granted under this plan. Approximately 4,928,988 shares were available for stockShares subject to awards under the plan asPlan or certain of September 30, 2017. Shares subject to awardsour prior plans that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan.Plan. There were 3,283,750 shares available for stock awards under the Plan as of June 30, 2023.
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 periodemployees that vest primarily 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.
their continued employment. The fair value of these options iswas 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 arewere the primary reasons for changes in the discount.fair value. These grants are being expensed based on the terms of the awards. As of SeptemberJune 30, 2017,2023, unrecognized compensation expense related to stock options was $51.0$8.9 million. The amount
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Table of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and certain other conditions.Contents
Full ValueStock Awards - We have awarded performanceperformance-based restricted shares, andperformance-based restricted stock units to certain key employees(“PSUs”), and non-employee directors. Thesetime-based restricted stock units. Nearly all of our awards are subject to certain vesting requirements over a five-year period, based on the company’s earnings growth. The awards also contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for any post-vesting holding restrictions. The discounts on outstanding grants with post-vesting holding restrictions vary from 1511 percent to 2224 percent and are calculated using the Black-Scholes option pricing model-protective put method. ChangesThe duration of the restriction period to sell or transfer vested awards, changes in the measured stock price volatility and changes in interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards.
Performance-based Awards
We have awarded performance-based restricted shares through 2020 to certain key employees. These awards vest over a five-year period based on the company’s dilutive earnings per share growth. Beginning in 2021, we have awarded annually PSUs to certain key employees. These PSUs vest over a three-year period based achieving certain dilutive earnings per share, adjusted gross profits, and adjusted operating margin targets. These PSUs contain an upside opportunity of up to 200 percent of target contingent upon obtaining certain targets mentioned above over their respective performance period.
Time-based Awards
We award time-based restricted stock units to certain key employees. Time-based awards granted through 2020 vest over a five-year period. Beginning in 2021, we have granted annually time-based awards that vest over a three-year period. These awards vest primarily based on the passage of time and the employee’s continued employment.
We granted 272,455 PSUs at target and 688,341 time-based restricted stock units in February 2023. The PSUs and time-based restricted stock unit awards had a weighted average grant date fair value of $92.15 and $92.74, respectively, and vest over a three-year period as described above.
We have also awarded restricted shares and 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.date of grant. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grantsawards have been expensed duringon the year they were earned.date of grant.
As of SeptemberJune 30, 2017,2023, there was unrecognized compensation expense of $119.3$242.7 million related to previously granted full value awards.stock awards assuming maximum achievement is obtained on our PSUs. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and contingent upon obtaining certain other conditions.targets mentioned above over their respective performance period.

Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan ("ESPP"(“ESPP”) allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. PurchaseThe 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(dollars in thousands):
Three Months Ended June 30, 2023
Shares purchased
by employees
Aggregate cost
to employees
Expense recognized
by the company
57,425 $4,605 $813 
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.


NOTE 8. ACQUISITIONS
On August 31, 2017, we acquired the outstanding shares of Milgram & Company Ltd. ("Milgram") for the purpose 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.
Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands):
12
 Estimated Life (years)  
Customer relationships7 $14,004
The Milgram goodwill is a result
Table of acquiring and retaining the Milgram existing 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. The goodwill is not deductible for tax purposes. The results of operations of Milgram have been included in our consolidated financial statements since September 1, 2017.
On September 30, 2016, we acquired all of the outstanding stock of APC Logistics ("APC"). Total purchase consideration was $229.4 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):
Contents
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
The APC goodwill is a result of acquiring and retaining the APC existing workforce and expected synergies from integrating their business into ours. The goodwill is not deductible for tax purposes. The results of operations of APC have been included in our consolidated financial statements since October 1, 2016. Pro forma financial information for prior periods is not presented because we believe the acquisition to be not material to 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.


NOTE 9.8. SEGMENT REPORTING
Our reportable segments are based on our method of internal reporting, which generally segregates the segments by service line and the primary services they provide to our customers. Beginning with the fourth quarter of 2016, based on certain internal reporting changes, we identified threeWe identify two 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, and intermodal.
less than truckload (“LTL”) transportation services.
•Global Forwarding-GlobalForwarding—Global Forwarding provides global logistics services through an international network of offices in North America, Europe, Asia, Europe, Australia, New Zealand, andOceania, South America, and the Middle East and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, airfreightair freight 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 worldManaged Services provides Transportation Management Services, or Managed TMS®. Other Surface Transportation revenues are primarily earned by our Europe Surface Transportation segment. Europe Surface Transportation provides transportation and has a physical presence in North America, Europe, Asia,logistics services including truckload and South America. This segment often provides the logistics and transportation of the products they sell, in addition to temperature controlled transportationgroupage services for its customers.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 located in Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2016. Segment2022. We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments. Reportable segment information for prior years has been retroactively recast to align with current year presentation. Segment information as of, and for the three and nine months ended September 30, 2017 and 2016, is as follows (dollars in thousands):

NASTGlobal ForwardingAll Other and CorporateConsolidated
Three Months Ended June 30, 2023
Total revenues$3,079,268 $779,867 $562,721 $4,421,856 
Income (loss) from operations117,859 29,647 (14,883)132,623 
Depreciation and amortization5,856 5,484 14,635 25,975 
Total assets(1)
3,106,092 1,149,091 1,150,078 5,405,261 
Average employee headcount6,497 5,225 4,363 16,085 
NASTGlobal ForwardingAll Other and CorporateConsolidated
Three Months Ended June 30, 2022
Total revenues$4,147,046 $2,093,190 $558,239 $6,798,475 
Income from operations276,499 167,557 25,609 469,665 
Depreciation and amortization6,123 5,471 11,668 23,262 
Total assets(1)
3,688,215 2,851,114 918,110 7,457,439 
Average employee headcount7,552 5,759 4,582 17,893 
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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 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
Six Months Ended June 30, 2023
Total revenues$6,383,455 $1,569,845 $1,080,226 $9,033,526 
Income (loss) from operations251,881 59,763 (17,988)293,656 
Depreciation and amortization11,507 10,964 27,884 50,355 
Total assets(1)
3,106,092 1,149,091 1,150,078 5,405,261 
Average employee headcount6,713 5,356 4,454 16,523 
NASTGlobal ForwardingAll Other and CorporateConsolidated
Six Months Ended June 30, 2022
Total revenues$8,261,935 $4,287,587 $1,064,906 $13,614,428 
Income from operations458,853 335,195 21,091 815,139 
Depreciation and amortization12,362 11,026 22,360 45,748 
Total assets(1)
3,688,215 2,851,114 918,110 7,457,439 
Average employee headcount7,442 5,690 4,422 17,554 

(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 September 30, 2016.



14
 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
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NOTE 9. REVENUE FROM CONTRACTS WITH CUSTOMERS
A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments (in thousands):
Three Months Ended June 30, 2023
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$3,079,268 $779,867 $225,692 $4,084,827 
Sourcing(2)
— — 337,029 337,029 
Total$3,079,268 $779,867 $562,721 $4,421,856 
Three Months Ended June 30, 2022
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$4,147,046 $2,093,190 $225,406 $6,465,642 
Sourcing(2)
— — 332,833 332,833 
Total$4,147,046 $2,093,190 $558,239 $6,798,475 
Six Months Ended June 30, 2023
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$6,383,455 $1,569,845 $459,492 $8,412,792 
Sourcing(2)
— — 620,734 620,734 
Total$6,383,455 $1,569,845 $1,080,226 $9,033,526 
Six Months Ended June 30, 2022
NASTGlobal ForwardingAll Other and CorporateTotal
Major Service Lines
Transportation and logistics services(1)
$8,261,935 $4,287,587 $444,471 $12,993,993 
Sourcing(2)
— — 620,435 620,435 
Total$8,261,935 $4,287,587 $1,064,906 $13,614,428 

(1) Transportation and logistics services performance obligations are completed over time.
(2) Sourcing performance obligations are completed at a point in time.
We typically do not receive consideration and amounts are not due from our customers prior to the completion of our performance obligation and as such contract liabilities, as of June 30, 2023, and revenue recognized in the three and six months ended June 30, 2023 and 2022 resulting from contract liabilities, were not significant. Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon changes in transportation pricing and costs and shipments in-transit at period end and the timing of customer invoicing.
(1) Intersegment revenues representNOTE 10. 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, trailers, and a small number of intermodal containers. We do not have material financing leases. Frequently, we enter into contractual relationships with a wide variety of transportation companies for freight capacity and utilize those relationships to efficiently and cost-effectively arrange the transport of our 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 eliminated to reconcile to our consolidated results.not considered leases.
(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 on commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance and parking charges. Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents. As our leases typically do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in All Otherdetermining the present value of lease payments. The incremental borrowing rate is influenced by market interest rates, our credit rating, and Corporate.lease term and as such, may differ for individual leases.
(3) Average headcount doesOur 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 addedthe option to renew for a period of months to several years. The term of our leases may include the option to renew when it is reasonably certain that we will exercise that option although these occurrences are seldom. We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component.
We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of June 30, 2023.
Information regarding lease expense, remaining lease term, discount rate, and other select lease information are presented below (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Lease Costs2023202220232022
Operating lease expense$24,773 $23,082 $49,426 $44,727 
Short-term lease expense1,486 1,137 2,900 3,597 
Total lease expense$26,259 $24,219 $52,326 $48,324 
Six Months Ended June 30,
Other Lease Information20232022
Operating cash flows from operating leases$47,360 $43,937 
Right-of-use lease assets obtained in exchange for new lease liabilities14,204 87,554 
Lease Term and Discount RateAs of June 30, 2023As of December 31, 2022
Weighted average remaining lease term (in years)6.26.4
Weighted average discount rate3.6 %3.5 %

The maturities of lease liabilities as of June 30, 2023, were as follows (in thousands):
Maturity of Lease LiabilitiesOperating Leases
Remaining 2023$39,817 
202482,873 
202567,812 
202655,842 
202744,317 
Thereafter116,071 
Total lease payments406,732 
Less: Interest(45,549)
Present value of lease liabilities$361,183 
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NOTE 11. ALLOWANCE FOR CREDIT LOSSES
Our allowance for credit losses is computed using a number of factors including our past credit loss experience and our customers' credit ratings, in addition to other customer-specific factors. We have also considered recent trends and developments related to the current macroeconomic environment in determining our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on Septembercontract assets was not significant as of June 30, 2016.2023.
A rollforward of our allowance for credit losses on our accounts receivable balance is presented below (in thousands):
Balance, December 31, 2022$28,749 
Provision(8,124)
Write-offs(6,164)
Balance, June 30, 2023$14,461 
Recoveries of amounts previously written off were not significant for the three and six months ended June 30, 2023.
NOTE 10.12. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive loss is included in Stockholders' investmentInvestment on our condensed consolidated balance sheets. The recorded balance at Septemberon June 30, 2017,2023 and December 31, 2016,2022, was $22.9$92.9 million and $61.4$88.9 million, respectively. Accumulated other comprehensive lossThe recorded balance on June 30, 2023 and December 31, 2022, is comprised solely of foreign currency translation adjustments, at Septemberincluding foreign currency translation.
Other comprehensive loss was $6.5 million for the three months ended June 30, 20172023, primarily driven by fluctuations in the Yuan and Singapore Dollar. Other comprehensive loss was $33.6 million for the three months ended June 30, 2022, primarily driven by fluctuations in the Singapore Dollar, Australian Dollar and the Yuan.
Other comprehensive loss was $4.1 million for the six months ended June 30, 2023, primarily driven by fluctuations in the Singapore Dollar, Yuan, and Australian Dollar partially offset by the Euro. Other comprehensive loss was $26.7 million for the six months ended June 30, 2022, primarily driven by fluctuations in the Singapore Dollar, Yuan, and Australian Dollar.
NOTE 13: RESTRUCTURING
In 2022, we announced organizational changes to support our enterprise strategy of accelerating our digital transformation and productivity initiatives. We continued to execute upon these digital transformation and productivity initiatives in 2023, which resulted in further restructuring charges to better align our workforce as a result of these initiatives and in consideration of the changing freight transportation market. We recognized additional restructuring charges of $14.1 million in the second quarter of 2023 primarily related to workforce reductions. We expect to complete our restructuring actions by the end of 2023.
For severance and other operating expenses related to restructuring activities, we paid $12.0 million in cash in the second quarter of 2023 with the majority of the remaining $8.7 million accrued as of June 30, 2023 expected to be paid by the end of 2023.
A summary of the restructuring charges recognized is presented below (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
20232023
Severance(1)
$11,681 $14,819 
Other personnel expenses(1)
1,446 1,906 
Other selling, general, and administrative expenses(2)
1,005 1,129 
Total$14,132 $17,854 
________________________________ 
(1) Amounts are included within personnel expenses in our condensed consolidated statements of operations and comprehensive income.
(2) Amounts are included within other selling, general, and administrative expenses in our condensed consolidated statements of operations and comprehensive income.
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The following table summarizes restructuring charges by reportable segment (dollars in thousands):
Three Months Ended June 30, 2023
NASTGlobal ForwardingAll Other and CorporateConsolidated
Personnel expenses$327 $691 $12,109 $13,127 
Other selling, general, and administrative expenses4 39 962 1,005 
Six Months Ended June 30, 2023
NASTGlobal ForwardingAll Other and CorporateConsolidated
Personnel expenses$1,156 $2,229 $13,340 $16,725 
Other selling, general, and administrative expenses4 163 962 1,129 
The following table summarizes activity related to our restructuring initiatives and reserves included in our consolidated balance sheets as of December 31, 2016.2022 and June 30, 2023:

Accrued Severance and Other Personnel ExpensesAccrued Other Selling, General, and Administrative ExpensesTotal
Balance, December 31, 2022$18,976 $— $18,976 
  Restructuring charges16,725 1,129 17,854 
  Cash payments(26,906)(310)(27,216)
  Settled non-cash— (819)(819)
  Accrual adjustments(1)
(122)— (122)
Balance, June 30, 2023$8,673 $— $8,673 
________________________________ 
(1) Accrual adjustments primarily relate to changes in estimates for certain employee termination costs, including those settling for an amount different than originally estimated and foreign currency adjustments.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read theThe following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.
FORWARD-LOOKING INFORMATION
Our quarterly reportQuarterly 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; fuel price increases or decreases, or fuel shortages; competition and growth rates within the third partyglobal logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with significant disruptions in the transportation industry; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers,customers; risks with reliance on technology to operate our business; cyber-security related risks; risks associated with operations outside of the United States; our ability to identify or for other reasons; complete suitable acquisitions;our ability to successfully integrate the operations of acquired companies with our historic operations; climate change related risks; risks associated with our indebtedness; interest rate related risks; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with operations outsidethe potential impact of the U.S.; changes in government regulations;risks associated with the potential impacts of changes in governmentto income tax 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; riskchanges due to catastrophic events including pandemics such as COVID-19; risks associated with the use of unanticipated events or opportunities that might require additional capital expenditures or alter the timing of such expenditures;machine learning and artificial intelligence; 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, 2016,2022, filed with the Securities and Exchange Commission on March 1, 2017.February 17, 2023, as well as the updates to these risk factors included in Part II—“Item 1A, Risk Factors,” herein.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.
OVERVIEW
Our company.C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the world's largest logistics platforms. We bring together customers, carriers, and suppliers to connect and grow supply chains. We are agrounded in our customer promise to use our technology, which is built by and for supply chain experts and powered by our information advantage, to deliver smarter solutions. These global provider of transportation services and logistics solutions, operating through a network of offices in North America, Europe, Asia, Australia, New Zealand, and South America. As a third party logistics provider, we enter into contractual relationshipscombined with a wide variety of transportation companies, and utilize those relationships to efficiently and cost effectively transport our customers’ freight. We have contractual relationships with approximately 107,000 transportation companies, including motor carriers, railroads (primarily intermodal service providers), air freight, and ocean carriers. Depending on the needsexpertise of our customerpeople, deliver value–from improved cost reductions and their supply chain requirements, we selectreliability to sustainability and hire the appropriate transportation for each shipment. Our model enables us to be flexible, provide solutions visibility–that optimize service for our customers and minimize our asset utilization risk.carriers can rely on.
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 segmentsadjusted gross profits and adjusted gross profit margin are North American Surface Transportation (“NAST”), Global Forwarding, Robinson Fresh,non-GAAP financial measures. Adjusted gross profits is calculated as gross profits excluding amortization of internally developed software utilized to directly serve our customers and All Othercontracted carriers. Adjusted gross profit margin is calculated as adjusted gross profits divided by total revenues. We believe adjusted gross profits 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. Weadjusted gross profit margin 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 our total revenues less purchased transportation and related services, including contracted motor carrier, rail, ocean, air, and other costs, and the purchase price and services related to the products we source. Our net revenues are the primary indicatoruseful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider themadjusted gross profits to be oura primary performance measurement. Accordingly, the discussion of our results of operations belowoften focuses on the changes in our net revenues.adjusted gross profits and adjusted gross profit margin. The reconciliation of gross profits to adjusted gross profits and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenues:
Transportation$4,084,827 $6,465,642 $8,412,792 $12,993,993 
Sourcing337,029 332,833 620,734 620,435 
Total revenues4,421,856 6,798,475 9,033,526 13,614,428 
Costs and expenses:
Purchased transportation and related services3,453,560 5,466,874 7,124,591 11,117,098 
Purchased products sourced for resale302,800 299,988 557,799 559,521 
Direct internally developed software amortization8,749 6,640 16,066 12,374 
Total direct costs3,765,109 5,773,502 7,698,456 11,688,993 
Gross profits / Gross profit margin656,747 14.9%1,024,973 15.1%1,335,070 14.8%1,925,435 14.1%
Plus: Direct internally developed software amortization8,749 6,640 16,066 12,374 
Adjusted gross profits / Adjusted gross profit margin$665,496 15.1%$1,031,613 15.2%$1,351,136 15.0%$1,937,809 14.2%
Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profits. We keepbelieve adjusted operating margin is a useful measure of our business model as variable as possible to allow us to be flexible and adapt to changing economic and industry conditions. We sell transportation services and produceprofitability in comparison to our customers with varied pricing arrangements. Some prices are committedadjusted gross profits, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Total revenues$4,421,856 $6,798,475 $9,033,526 $13,614,428 
Income from operations132,623 469,665 293,656 815,139 
Operating margin3.0%6.9%3.3%6.0%
Adjusted gross profits$665,496 $1,031,613 $1,351,136 $1,937,809 
Income from operations132,623 469,665 293,656 815,139 
Adjusted operating margin19.9%45.5%21.7%42.1%
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MARKET TRENDS
Carrier capacity in the North America surface transportation market has remained plentiful relative to demand which has resulted in suppressed transportation rates for much of the second quarter of 2023. As surface transportation spot rates continued to approximate the breakeven cost per mile to operate a truck, it is likely that the market is at, or near, the bottom of the industry cycle which typically results in capacity exiting the market. Conversely, the second quarter of 2022 exhibited elevated transportation rates, moderating consumer demand, and capacity entering the market. Industry freight volumes decreased in the second quarter of 2023 compared to the second quarter of 2022. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the average number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender in the second quarter of 2023 declined to 1.1, which is the lowest level we have seen since the pandemic impacted the second quarter of 2020, compared to a 1.4 average routing guide depth in the second quarter of 2022. The average routing guide depth in the second quarter of 2023 represents that on average, the first carrier in a shipper's routing guide is accepting the shipment most of the time.
Ocean vessel and air freight capacity continues to trend higher than demand in the global forwarding market, which has kept ocean and air freight rates low during this 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 when 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 importantsignificant decline that started in the second half of 2022 and into 2023. Several consecutive quarters of weak consumer demand have nearly eliminated the challenges from port congestion and transportation industry because it isequipment shortages that were impacting the global forwarding market driven and very dynamic.
Our people. Because we are a service company, our continued success is dependent on our ability toin recent years. Despite the weak demand, new vessel deliveries continue to hireadd capacity to the market, which suggests excess capacity may persist for several periods despite steamship lines continuing to rationalize services by reducing capacity where possible with blank sailings and retain talented, productive people,slow steaming. The air freight market has also seen an increase of capacity resulting from increased commercial flight activity to support elevated consumer travel. Although consumer demand showed a modest sign of improvement sequentially, the low price of ocean freight continues to result in less ocean freight converting to air freight and to properly align our headcount and personnel expense with our business. more than sufficient air freight capacity which has kept air freight rates suppressed.
BUSINESS TRENDS
Our headcount increased by 191 employees during the thirdsecond quarter of 2017, primarily related2023 surface transportation results were largely consistent with the trends discussed in the market trends section. The excess carrier capacity in the market led to significant declines in transportation rates versus the acquisition of Milgram. Most network management compensation is dependent onelevated levels experienced in the profitability 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 with more than 113,000 active customers. We work with a wide variety of companies, rangingprior year. This resulted in size from Fortune 100 companies to small family businesses,declines in many different industries. Our customer base is very diverse and unconcentrated. In 2016, our top 100 customers represented approximately 30 percent ofboth our total revenues and adjusted gross profits in the second quarter of 2023 compared to the strong results achieved in the second quarter of 2022. The softening market conditions in the second quarter of 2022 resulted in an elevated adjusted gross profit per shipment as the cost of transportation decreased relative to our contractual rates. Conversely, the suppressed transportation rates in the second quarter of 2023 have resulted in a decline in adjusted gross profit per shipment and a higher percentage of contractual shipments as efficient routing guide performance has resulted in fewer loads moving on the transactional market. Industry freight volumes decreased in the second quarter of 2023 compared to the second quarter of 2022. Our combined NAST truckload and less than truckload (“LTL”) volume decreased 2.5 percent during the second quarter of 2023. Our average truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 2619.0 percent during the second quarter of 2023. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, decreased approximately 23.0 percent during the second quarter of 2023.
Our second quarter of 2023 global forwarding results were largely consistent with the trends discussed in the market trends section. We experienced a significant decline in both total revenues and adjusted gross profits in our ocean and air freight businesses compared to the strong results achieved in the second quarter of 2022. Our ocean volumes decreased 7.0 percent while our air freight tonnage decreased 2.0 percent.
SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS
The following summarizes select second quarter 2023 year-over-year operating comparisons to the second quarter 2022:
•Total revenues decreased 35.0 percent to $4.4 billion, driven primarily by lower ocean and truckload pricing.
•Gross profits decreased 35.9 percent to $656.7 million. Adjusted gross profits decreased 35.5 percent to $665.5 million, primarily driven by lower adjusted gross profit per transaction in truckload and ocean.
•Personnel expenses decreased 15.2 percent to $377.3 million, primarily due to cost optimization efforts and lower variable compensation, including lower average employee headcount, which decreased 10.1 percent.
•Other selling, general, and administrative (“SG&A”) expenses increased 32.8 percent to $155.6 million, primarily due to the $23.5 million gain on the sale-leaseback of our Kansas City regional center recorded in the prior year and increased claims and higher warehouse expenses in the current year.
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•Income from operations decreased 71.8 percent to $132.6 million, driven by decreased adjusted gross profits, partially offset by the decline in operating expenses.
•Adjusted operating margin of 19.9 percent declined 2,560 basis points.
•Interest and other income/expenses, net revenues. Our largest customertotaled $18.3 million, consisting primarily of $23.2 million of interest expense, which increased $6.3 million versus last year due primarily to higher variable interest rates. This was approximately twopartially offset by a $3.5 million gain of foreign currency revaluation and realized foreign currency gains and losses, compared to a $10.3 million loss last year, both driven by foreign currency impacts on intercompany assets and liabilities.
•The effective tax rate in the quarter was 14.9 percent of our total revenues.compared to 21.3 percent in the second quarter last year.
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•Net income totaled $97.3 million, down 72.1 percent from approximately 68,000a year ago.
•Diluted earnings per share (EPS) decreased 69.7 percent to $0.81.
•Cash flow from operations improved $228.0 million in 2015. Motor carriers that had fewer than 100 tractors transported approximately 81 percent of our truckload shipmentsthe six months ended June 30, 2023, driven by changes in 2016. In our transportation business, no single contracted carrier represents more than approximately 1.6 percent of our contracted carrier capacity.net operating working capital, offset in part by a decrease in net income.


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 June 30,Six Months Ended June 30,
20232022% change20232022% change
Revenues:
Transportation$4,084,827$6,465,642(36.8)%$8,412,792$12,993,993(35.3)%
Sourcing337,029332,8331.3 %620,734620,435— %
Total revenues4,421,8566,798,475(35.0)%9,033,52613,614,428(33.6)%
Costs and expenses:
Purchased transportation and related services3,453,5605,466,874(36.8)%7,124,59111,117,098(35.9)%
Purchased products sourced for resale302,800299,9880.9 %557,799559,521(0.3)%
Personnel expenses377,277444,764(15.2)%760,383858,125(11.4)%
Other selling, general, and administrative expenses155,596117,18432.8 %297,097264,54512.3 %
Total costs and expenses4,289,2336,328,810(32.2)%8,739,87012,799,289(31.7)%
Income from operations132,623469,665(71.8)%293,656815,139(64.0)%
Interest and other income/expense, net(18,259)(27,395)(33.3)%(46,524)(41,569)11.9 %
Income before provision for income taxes114,364442,270(74.1)%247,132773,570(68.1)%
Provision for income taxes17,04894,085(81.9)%34,925155,037(77.5)%
Net income$97,316$348,185(72.1)%$212,207$618,533(65.7)%
Diluted net income per share$0.81 $2.67 (69.7)%$1.77$4.71(62.4)%
Average employee headcount16,085 17,893 (10.1)%16,52317,554(5.9)%
Adjusted gross profit margin percentage(1)
Transportation15.5 %15.4 %10 bps15.3 %14.4 %90 bps
Sourcing10.2 %9.9 %30 bps10.1 %9.8 %30 bps
Total adjusted gross profit margin15.1 %15.2 %(10 bps)15.0 %14.2 %80 bps
________________________________ 
(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

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

 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 SeptemberJune 30, 20172023 Compared to the Three Months Ended SeptemberJune 30, 20162022
Total revenues and direct costs. Our consolidated total Total transportation revenues increased 12.8 percentand direct costs decreased significantly primarily due to lower pricing and purchased transportation costs in the third quarter of 2017ocean and truckload services, in addition to volume declines in nearly all service lines compared to the third quarter of 2016. Total transportation revenues increased 14.5 percentstrong results in the third quarter of 2017prior year. The declines in pricing and purchased transportation costs were driven by the excess carrier capacity and continued weak consumer demand discussed in the market trends and business trends sections above. This compared to the third quarter of 2016. The increase waselevated pricing and tight carrier capacity caused by driver availability challenges and the supply chain disruptions, including port congestion and equipment shortages, facing the industry in the prior year. Our sourcing total revenue and direct costs increased driven by increased case volume with foodservice customers, partially offset by lower average pricing per case with retail customers.
Gross profits and volume growth in nearly all of our transportation services. Total purchased transportation and related services increased 16.2 percent in the third quarter of 2017 compared to the third quarter of 2016. The increase was due to increased cost of transportation, including fuel, and volume growth in nearly all of our transportation services. Our sourcing revenue decreased 1.8 percent to $350.8 million in the third quarter of 2017 from $357.2 million in the third quarter of 2016. Purchased products sourced for resale decreased 1.9 percent in the third quarter 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.
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.adjusted gross profits. Our transportation net revenue marginadjusted gross profits decreased driven by lower truckload and ocean adjusted gross profits per transaction in addition to 16.4 percent in the third quarter of 2017 from 17.6 percent in the third quarter of 2016 primarily due to the cost of transportation increasing more than customer pricing, including fuel,volume declines 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.service lines. The increase in personnel expense was due to an increase of 8.7 percent in average headcount and an increase 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 administrative expenses increased 17.6 percent to $106.2 million in 2017 from $90.3 million in the third quarter of 2016. This increaselower adjusted gross profit per transaction was driven by costs relatedthe excess capacity and weak demand in the surface transportation and global forwarding markets discussed in the market trends and business trends sections above, which have suppressed freight rates in the second quarter of 2023. The prior year period benefited from softening market conditions as the cost of purchased transportation decreased relative to our contractual rates resulting in elevated adjusted gross profits per transaction in the second quarter of 2022. Sourcing adjusted gross profits increased driven by integrated supply chain solutions for foodservice and wholesale customers.
Operating expenses. Personnel expenses decreased primarily due to lower variable compensation reflecting the decline in results relative to the additionprior year and lower average employee headcount. Other SG&A expenses increased due to a $23.5 million gain on the sale-leaseback of the APC and Milgram businesses, and increasesour Kansas City regional center recorded in the provision for bad debt,prior year and increased claims, higher warehouse expenses, and warehouse costs.

Income from operations. Income from operations decreased 8.0 percent to $194.5 millionhigher depreciation and amortization in the third quarter of 2017 from $211.3 million in the third quarter of 2016. This decreasecurrent year, which was primarily driven by declines in income from operations in NAST and Robinson Fresh, partially offset by an increase in income from operations in Global Forwarding. Income from operations as a percentage of net revenues decreased to 32.7 percent in the third quarter of 2017 from 37.8 percent in the third quarter of 2016.lower contracted services, including temporary labor.
Interest and other expense.income/expense, net. Interest and other income/expense, was $10.5net primarily consisted of interest expense of $23.2 million inand a $3.5 million favorable impact of foreign currency revaluation and realized foreign currency gains and losses primarily related to foreign currency impacts on intercompany assets and liabilities. Interest expense increased $6.3 million during the thirdsecond quarter of 2017 compared to $7.4 million in the third2023, driven by higher variable interest rates. The second quarter of 2016. The increase was due primarily to2022 included a higher average debt balance$10.3 million unfavorable impact of foreign currency revaluation and higher interest rates during the quarter ended September 30, 2017, compared to the same period ended September 30, 2016. Increased borrowings were related to the acquisition of Milgramrealized foreign currency gains and increased working capital needs.losses.
Provision for income taxes. Our effective income tax rate was 35.214.9 percent for the thirdsecond quarter of 2017 and 36.72023 compared to 21.3 percent for the thirdsecond quarter of 2016. During2022. The effective income tax rate for the thirdsecond quarter of 2017,2023 was lower than the provisionstatutory federal income tax rate primarily due to the tax impact of foreign tax credits and U.S. tax credits and incentives, which reduced the effective tax rate by 6.2 percentage points and 3.9 percentage points, respectively. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.4 percentage points during the second quarter of 2023. The effective income tax rate for the second quarter of 2022 was slightly higher than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit, which increased the effective income tax rate by 2.0 percentage points. This impact was partially offset by the tax impact of foreign tax credits, which reduced the effective tax rate by 1.4 percentage points.
Consolidated Results of Operations—Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
Total revenues and direct costs. Total transportation revenues and direct costs decreased driven by lower pricing and purchased transportation costs in nearly all of our service lines, most notably in ocean and truckload services. In addition, volumes declined in nearly all transportation services compared to the strong results in the prior year. Our sourcing total revenue and direct costs increased driven by increased case volume with foodservice customers partially offset by lower average pricing per case with retail customers.
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Gross profits and adjusted gross profits. Our transportation adjusted gross profits decreased due to lower adjusted gross profit per transaction in truckload and ocean services, and to a lesser extent air and LTL services, in addition to decreased volumes in nearly all service lines. The lower adjusted gross profit per transaction was driven by the excess capacity and weak demand in the surface transportation and global forwarding markets discussed in the market trends and business trends sections above, which have suppressed freight rates in the six months ended June 30, 2023. The prior year period benefited from the softening market conditions as the cost of purchased transportation decreased relative to our contractual rates resulting in elevated adjusted gross profits per transaction in the six months ended June 30, 2022. Sourcing adjusted gross profits increased driven by integrated supply chain solutions for foodservice and wholesale customers.
Operating expenses. Personnel expenses decreased primarily due to cost optimization efforts including lower average employee headcount in addition to lower variable compensation reflecting the decline in results relative to the prior year. Other SG&A expenses increased due to a $23.5 million gain from a sale-leaseback of a facility in Kansas City in the prior year and increased depreciation and amortization, travel and warehouse expenses in the current year, which was partially offset by decreased contracted services, including temporary labor.
Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $46.8 million and a $6.0 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses in the six months ended June 30, 2023, primarily due to foreign currency impacts on intercompany assets and liabilities. Interest expense increased $15.3 million driven by a higher variable interest rates compared to the prior year. The prior year included an $11.8 million unfavorable impact of foreign currency revaluation and realized foreign currency gains and losses due to the strengthening of the U.S. Dollar versus the Euro and Yuan.
Provision for income taxes decreased by $2.7 milliontaxes. Our effective income tax rate was 14.1 percent for the six months ended June 30, 2023 and 20.0 percent for the six months ended June 30, 2022. The effective income tax rate for the six months ended June 30, 2023 was lower than the statutory federal income tax rate primarily due to U.S. tax credits associated withand incentives, foreign earnings deemed to be subject to U.S. taxation. Duringtax credits, and the first quartertax impact 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 consolidatedwhich reduced the effective tax rate by 3.9 percentage points, 3.3 percentage points, and 3.1 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by 2.3 percentage points. The effective income tax rate for the six months ended June 30, 2022 was lower than the statutory federal income tax rate primarily due to foreign tax credits, U.S. tax credits and incentives and the tax impact of share-based payment awards, which reduced the effective tax rate by 1.1 percentage points, 1.0 percentage points, and 0.9 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by 1.7 percentage points.
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NAST Segment Results of Operations
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20232022% change20232022% change
Total revenues$3,079,268 $4,147,046 (25.7)%$6,383,455 $8,261,935 (22.7)%
Costs and expenses:
Purchased transportation and related services2,678,736 3,522,495 (24.0)%5,556,268 7,131,284 (22.1)%
Personnel expenses163,289 225,210 (27.5)%339,301 426,012 (20.4)%
Other selling, general, and administrative expenses119,384 122,842 (2.8)%236,005 245,786 (4.0)%
Total costs and expenses2,961,409 3,870,547 (23.5)%6,131,574 7,803,082 (21.4)%
Income from operations$117,859 $276,499 (57.4)%$251,881 $458,853 (45.1)%
Three Months Ended June 30,Six Months Ended June 30,
20232022% change20232022% change
Average employee headcount6,497 7,552 (14.0)%6,713 7,442 (9.8)%
Service line volume statistics
Truckload(6.5)%(5.0)%
LTL— %(2.5)%
Adjusted gross profits(1)
Truckload$236,094 $432,048 (45.4)%$497,613 $766,958 (35.1)%
LTL135,427 166,868 (18.8)%272,505 317,610 (14.2)%
Other29,011 25,635 13.2 %57,069 46,083 23.8 %
Total adjusted gross profits$400,532 $624,551 (35.9)%$827,187 $1,130,651 (26.8)%
________________________________ 
(1) Adjusted gross profit margin is a non-GAAP 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 $1.3 million the third quarter of 2017.
Net income. Net income decreased 7.6 percent to $119.2 million in the third quarter of 2017 from $129.0 million in the third quarter 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.
SEGMENT RESULTS OF OPERATIONSmeasure explained above.
Three Months Ended SeptemberJune 30, 2017,2023 Compared to the Three Months Ended SeptemberJune 30, 20162022
North American Surface Transportation. Total revenues and direct costs.NAST total revenues including intersegment revenues, increased 10.9 percentand direct costs decreased primarily due to $2.6 billionsignificantly lower pricing and purchased transportation costs in truckload services, reflecting the excess carrier capacity and slowing economic growth discussed above in the thirdmarket trends section. Our combined NAST truckload and LTL volume decreased 2.5 percent. These conditions resulted in significant declines in surface transportation rates versus the historically elevated levels of truckload pricing in the second quarter of 2017 from $2.3 billion2022. The elevated pricing and purchased transportation cost environment in the thirdprior year was due to the tight carrier capacity caused by driver availability challenges and the supply chain disruptions, including port congestion and equipment shortages, facing the industry in the second quarter of 2016. This increase was driven by2022.
Gross profits and adjusted gross profits. NAST adjusted gross profits decreased due to lower pricing andin truckload services, resulting in lower adjusted gross profits per shipment most notably on transactional volume, increases in most services. NAST cost of transportation and related services increased 13.0 percentaddition to $2.2 billion in the third quarter 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. NAST net revenues decreased 0.2 percent to $377.4 million in the third quarter of 2017 from $378.1 million in the third quarter of 2016. This decrease was driven by a decline in truckload net revenues, discussed below.
NAST truckload net revenues decreased 2.1 percent to $266.6 millionvolumes. The lower adjusted gross profit per transaction was driven by the excess capacity and weak demand in the thirdsurface transportation market discussed in the market and business trends sections above which has suppressed freight rates in the second quarter of 20172023. The prior year period benefited from $272.4 millionsoftening market conditions as the cost of purchased transportation decreased relative to our contractual rates resulting in elevated adjusted gross profits per transaction in the thirdsecond quarter of 2016. NAST2022. Our average 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, increased 6.5which excludes fuel surcharges, decreased approximately 23.0 percent in the thirdsecond quarter of 20172023 compared to the thirdsecond quarter of 2016.2022. Our truckload transportation costs increasedlinehaul cost per mile, excluding fuel surcharges, decreased 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.
19.0 percent. NAST LTL net revenues increased 4.8 percentadjusted gross profits decreased due to $97.6 millionlower adjusted gross profits per transaction. NAST LTL volumes were flat in the thirdsecond quarter of 2017 from $93.1 million in2023 compared to the thirdsecond quarter of 2016. This increase was2022. NAST other adjusted gross profits increased primarily driven by increased warehousing services.
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Operating expenses. NAST personnel expenses decreased primarily due to a volume increase of 6.5 percent in the third quarter of 2017 comparedlower variable compensation and lower average employee headcount. NAST other SG&A expenses decreased primarily due to the third quarter of 2016,lower allocated corporate expenses, partially offset by a decrease in net revenue margin resulting from increased purchased transportation costs.
NAST intermodal net revenues decreased 1.4 percent to $7.1 million in the third quarter of 2017 from $7.2 million in the third quarter of 2016. NAST intermodal net revenues and net revenue margin decreased while volume increased in the third quarter of 2017 compared to the third quarter of 2016 due to lower-margin contractual volume growth, partially offset by a decrease in transactional business.

NAST operating expenses increased 9.5 percent in the third quarter 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 primarily due to an increase in the provision for bad debt andhigher claims expense. The increase in personnel expense is related to an increase in average headcount of 1.9 percent. The operating expenses of NAST and all other segments include allocated corporate expenses. Allocated personnel expenses consist primarily of stock-based compensation allocated based upon segment participation levels in our equity plans. Remaining corporate allocations, including corporate functions and technology related expenses, are primarily included within each segment’s other SG&A expenses, and are allocated based upon relevant segment operating metrics.
Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
Total revenues and direct costs.NAST income from operationstotal revenues and direct costs decreased 11.8 percentdue to $151.4 millionlower pricing and purchased transportation costs in truckload and LTL services compared to the prior year. Truckload pricing reached historic levels in the third quarterfirst half of 2017 from $171.7 million in2022 due to tight carrier capacity caused by driver availability challenges and the third quarter of 2016. This wassupply chain disruptions that were facing the industry. In addition, truckload volume decreased during the six months ended June 30, 2023, compared to the six months ended June 30, 2022.
Gross profits and adjusted gross profits. NAST adjusted gross profits decreased primarily due to lower adjusted gross profit per transaction in both truckload and LTL services in addition to a declinedecrease in net revenues causedvolume for both. The lower adjusted gross profit per transaction was driven by the excess capacity and weak demand in the surface transportation market discussed in the market trends and business trends sections above which has suppressed freight rates in the six months ended June 30, 2023. The prior year period benefited from the softening market conditions as the cost of purchased transportation decreased relative to our contractual rates resulting in elevated adjusted gross profits per transaction in the six months ended June 30, 2022. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, decreased approximately 25.5 percent. Our truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 23.5 percent. NAST other adjusted gross profits increased driven by an increase in transportation costs.
Global Forwarding. Global Forwarding total revenues, including intersegment revenues, increased 40.2 percent to $560.0 million in the third quarter of 2017 compared to $399.6 million in the third quarter of 2016. Global Forwarding costs of transportation and relatedwarehousing services increased 40.5 percent to $430.2 million in the third quarter of 2017 from $306.2 million in the third quarter of 2016. Global Forwarding net revenues increased 39.1 percent to $129.8 million in the third quarter of 2017 compared to $93.4 million in the third quarter of 2016. The acquisitions of APC and Milgram accounted for approximately 18 percentage points of the net revenue growth in Global Forwarding.
Global Forwarding ocean transportation 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 was driven by an average headcount increase of 20.8 percent. The acquisitions of APC and Milgram added approximately 18 percent to the Global Forwarding average headcount. The selling, general, and administrative expense increase was primarily driven by the acquisition amortization related to APC and Milgram.
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.intermodal adjusted gross profits.

Robinson Fresh income from operationsOperating expenses. NAST personnel expense 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 increasedecreased variable compensation and a decrease in operatingaverage employee headcount. NAST other SG&A expenses decreased primarily due to lower allocated corporate expenses and a decrease in credit losses and lower contracted services, including temporary labor.
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Global Forwarding Segment Results of Operations
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20232022% change20232022% change
Total revenues$779,867 $2,093,190 (62.7)%$1,569,845 $4,287,587 (63.4)%
Costs and expenses:
Purchased transportation and related services600,636 1,768,747 (66.0)%1,212,695 3,641,296 (66.7)%
Personnel expenses92,937 106,096 (12.4)%185,200 207,372 (10.7)%
Other selling, general, and administrative expenses56,647 50,790 11.5 %112,187 103,724 8.2 %
Total costs and expenses750,220 1,925,633 (61.0)%1,510,082 3,952,392 (61.8)%
Income from operations$29,647 $167,557 (82.3)%$59,763 $335,195 (82.2)%
Three Months Ended June 30,Six Months Ended June 30,
20232022% change20232022% change
Average employee headcount5,2255,759(9.3)%5,3565,690(5.9)%
Service line volume statistics
Ocean(7.0)%(11.0)%
Air(2.0)%(10.0)%
Customs(14.5)%(14.5)%
Adjusted gross profits(1)
Ocean$107,423 $228,093 (52.9)%$217,544 $449,494 (51.6)%
Air33,479 56,112 (40.3)%64,381 116,679 (44.8)%
Customs25,128 27,820 (9.7)%48,462 55,315 (12.4)%
Other13,201 12,418 6.3 %26,763 24,803 7.9 %
Total adjusted gross profits$179,231 $324,443 (44.8)%$357,150 $646,291 (44.7)%
________________________________ 
(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.
Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022
Total revenues and direct costs. Global Forwarding total revenues and direct costs decreased driven by lower pricing and purchased transportation costs in ocean and air freight services, net revenues.in addition to volume declines in both service lines compared to the strong results in the prior year. The declines in pricing and purchased transportation costs were driven by the excess carrier capacity and continued weak consumer demand discussed in the market trends and business trends sections above. The prior year was impacted by elevated pricing and cost of purchased transportation driven by the supply chain disruptions that impacted the global forwarding market in the second quarter of 2022.
Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits decreased due to lower ocean and air freight adjusted gross profits per transaction, in addition to volume decline in both service lines compared to the strong results in the prior year. The lower adjusted gross profit per transaction was driven by the excess capacity and weak demand in the global forwarding markets discussed in the market trends and business trends sections above, which have suppressed freight rates in the second quarter of 2023. Customs adjusted gross profits decreased driven by a decrease in transaction volume.
Operating expenses. Personnel expenses decreased primarily due to lower variable compensation and a decrease in average employee headcount. Other SG&A expenses increased driven by higher credit losses.
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Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
Total revenues and direct costs. Global Forwarding total revenues and direct costs decreased driven by lower pricing and purchased transportation costs in both ocean and air freight and, to a lesser extent, decreased volumes in both service lines. The cost of purchased transportation and pricing began to moderate within the second quarter of 2022 and continued to decline into 2023 driven by the excess carrier capacity and continued weak demand discussed in the market and business trends sections above. Purchased transportation costs and pricing have remained suppressed in 2023 due to the continued weak demand and excess carrier capacity in the market.
Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits decreased due to lower adjusted gross profits per transaction, and to a lesser extent, decreased volumes in ocean and air freight compared to the strong results in the prior year. The lower adjusted gross profit per transaction was driven by the excess capacity and weak demand in the global forwarding markets discussed in the market trends and business trends sections above, which have suppressed freight rates in the six months ended June 30, 2023. Customs adjusted gross profits decreased driven by a decrease in transaction volume.
Operating expenses. Personnel expenses decreased primarily due to lower variable compensation and a decrease in average employee headcount. Other SG&A expenses increased due to increased investments in technology and other miscellaneous expenses. These increases were partially offset by a decrease in contracted services, including temporary labor and lower credit losses.
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 to NAST across Europe.
Managed Services net revenues increased 10.8 percent in the third quarter of 2017 to $18.5 million compared to $16.7 million in the third quarter of 2016. This increase was
Three Months Ended June 30,Six Months Ended June 30,
(dollars in thousands)20232022% change20232022% change
Total revenues$562,721 $558,239 0.8 %$1,080,226 $1,064,906 1.4 %
Income (loss) from operations(14,883)25,609 N/M(17,988)21,091 N/M
Adjusted gross profits(1)
Robinson Fresh37,895 34,981 8.3 %69,040 65,486 5.4 %
Managed Services28,953 27,618 4.8 %57,923 55,700 4.0 %
Other Surface Transportation18,885 20,020 (5.7)%39,836 39,681 0.4 %
Total adjusted gross profits$85,733 $82,619 3.8 %$166,799 $160,867 3.7 %
________________________________ 
(1) Adjusted gross profit margin is a result of new business with new and 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.non-GAAP financial measure explained above.
NineThree Months Ended SeptemberJune 30, 20172023 Compared to Ninethe Three Months Ended SeptemberJune 30, 20162022
Total revenues and direct costs. Our consolidated totalTotal revenues and direct costs 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 ourwith foodservice 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 growthlower pricing with retail customers in our organic operations.Robinson Fresh business.
Global Forwarding ocean transportation net revenuesGross profits and adjusted gross profits. Robinson Fresh adjusted gross profits 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.
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 percentcase volume and the acquisition amortization expense related to the acquisitions of APC.
Global Forwarding income from operationsintegrated supply chain solutions for foodservice and wholesale customers. Managed Services adjusted gross profits 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,growth with existing and new customers. Other Surface Transportation adjusted gross profits decreased driven by lower Europe truckload adjusted gross profits per transaction, partially offset by an increase in operating expenses.volumes.
Robinson Fresh.
Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
Total revenues and direct costs. Total revenues and direct costs increased driven by higher European truckload volume in our Other Surface Transportation business.
Gross profits and adjusted gross profits.Robinson Fresh total revenues, including intersegment revenues,adjusted gross profits 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 transportationdriven by integrated supply chain solutions for foodservice and related services and purchased products sourced for resalewholesale customers. Managed Services adjusted gross profits 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 togrowth with existing and new customers. Other Surface Transportation adjusted gross profits 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,European truckload volumes, partially offset by a decrease in expenses related to variable incentive compensation plans.lower adjusted gross profits per transaction.
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.
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All Other and Corporate. All Other and Corporate includes our Managed Services segment, as well as Other Surface Transportation outside
Table 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.Contents
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,addition, we entered into a senior unsecured revolving credit facility to partially fund an acquisition. In December 2014, we amendedmaintain the revolving credit facility to increase the amount available from $500 million to $900 millionfollowing debt facilities as described in Note 4, Financing Arrangements (in thousands):
DescriptionCarrying Value as of June 30, 2023Borrowing CapacityMaturity
Revolving credit facility$141,000 $1,000,000 November 2027
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)
499,863 500,000 November 2023
Senior Notes (1)
595,495 600,000 April 2028
Total debt$1,736,358 $2,600,000 

(1) Net of unamortized discounts 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. issuance costs.
We also expect to use the revolving credit facility, the receivables securitization facility,our current debt facilities and potentially other indebtedness incurred in the future to assist us in continuing to fund working capital, capital expenditures, possible acquisitions, dividends, and share repurchases.
Cash and cash equivalents totaled $297.3$210.2 million as of SeptemberJune 30, 2017,2023 and $247.7$217.5 million as of December 31, 2016.2022. Cash and cash equivalents held outside the United States totaled $233.3$203.3 million as of SeptemberJune 30, 2017,2023 and $172.2$204.7 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.2022.
We prioritize our investments to grow the business, as we require some working capital and a relatively small amount of capital expenditures to grow. We are continually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.
The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):
Six Months Ended June 30,
20232022% change
Sources (uses) of cash:
Cash provided by operating activities$479,376 $251,329 90.7 %
Capital expenditures(51,301)(69,403)
Sale of property and equipment— 63,208 
Cash used for investing activities(51,301)(6,195)N/M
Repurchase of common stock(62,754)(490,699)
Cash dividends(146,195)(145,268)
Net (payments) borrowings on debt(238,000)349,000 
Other financing activities14,831 29,790 
Cash used for financing activities(432,118)(257,177)68.0 %
Effect of exchange rates on cash and cash equivalents(3,284)(6,445)
Net change in cash and cash equivalents$(7,327)$(18,488)
Cash flow from operating activities. We generated $218.3 million and $376.8 million of cash flow from operations during Cash provided by operating activities increased in the ninesix months ended SeptemberJune 30, 2017 and September 30, 2016, respectively, a decrease of $158.5 million2023 compared to the ninesix months ended SeptemberJune 30, 2016. The increase2022 due to a decrease in net operating working capital driven by declining freight rates, most notably in our ocean and truckload services in addition to lower volumes customer rates, and costs of transportation, including fuel prices,in nearly all service lines as discussed in the first ninemarket and business trends sections. This impact was partially offset by a decline in net income in the six months ended June 30, 2023. We continue to closely monitor credit and collections activities and the quality of 2017 comparedour accounts receivable balance to minimize risk as well as work with our customers to facilitate the first nine monthsmovement of 2016 resulted in increased growth in working capital and led to decreased operating cash flow.goods across their supply chains while also ensuring timely payment.
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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 Capital expenditures consisted primarily of investments in facilities, office equipment, and information technology,software, which are intended to develop and deliver scalable solutions by transforming our processes, accelerate the pace of development and prioritizing data integrity, improve efficienciesour customer and carrier experience, and increase efficiency to help expand our adjusted operating margins and 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 Net payments on debt in the ninesix months ended SeptemberJune 30, 2017 and September 30, 2016.
During2023 were to reduce the ninecurrent portion of our debt outstanding. Net borrowings in the six months ended SeptemberJune 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.2022 were primarily to fund share repurchases and working capital needs. 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 weredecrease in compliance with all of the covenants under the Credit Agreement, Note Purchase Agreement, and Receivables Securitization Facility as of September 30, 2017.
Wecash 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 increasefor share repurchases 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 ninesix months ended SeptemberJune 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.2023. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Our Senior Notes, Series A and Receivables Securitization Facility have maturity dates remaining in 2023. To the extent we reduce our outstanding debt on these facilities or our other debt facilities, it may reduce the number of shares we repurchase in 2023. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.
We 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 believesbelieve that, assuming no change in our current business plan, our available cash, together with expected future cash generated from operations, the amount available under our credit facilities, and credit available in the market, will be sufficient to satisfy our anticipated needs for working capital, capital expenditures, and cash dividends infor at least the next 12 months and the foreseeable future. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.
As of June 30, 2023, we were in compliance with all of the covenants under our debt agreements.
Recently Issued Accounting Pronouncements 
Refer to Note 1, Basis of Presentation, contained in this Quarterly Report and in the company's 2022 Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements.
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 2022 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 ofJune 30, 2023, 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
We had $297.3 million of cash and cash equivalentsRefer to the company’s 2022 Annual Report on September 30, 2017. Substantially all of the cash equivalents are in demand accounts with financial institutions. The primary market risks associated with these investments are liquidity risks.
We areForm 10-K for a party to a credit agreement with various lenders consisting of a $900 million revolving loan facility. Interest accruesdiscussion on the revolving loan at variable rates based on LIBOR or "prime" plus the applicable add-on percentage as defined therein. At Septembercompany’s market risk. As of June 30, 2017,2023, there was $719 million outstanding on the revolving loan.
We are a party to the Note Purchase Agreement, as amended, with various institutional investors with fixed rates consisting of: (i) $175,000,000 ofwere no material changes in market risk from those disclosed in 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 outstanding2022 Annual Report on the notes.Form 10-K.
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-point change in the interest rate would not have 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 value of our investments. Market risk arising from changes in foreign currency exchange rates are not material due to the size of our international operations.

ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures.
UnderWe maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the supervisionSecurities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and withreported within the participation oftime periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.
Our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in RuleRules 13a-15(e) and 15d-15(e) under the Securities Exchange ActAct) as of 1934 (the “Exchange Act”).June 30, 2023. Based upon that evaluation, theour Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.effective at the reasonable assurance level as of June 30, 2023.
(b) Changes in internal controlscontrol over financial reporting.
There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the most recent fiscal quarterthree months ended June 30, 2023, 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.operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report,Quarterly 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, 2016,2022, which could materially affect our business, financial condition, or future results. Except for the updates to this risk factors set forth below, there have not been material changes in our risk factors set forth in the company’s 2022 Annual Report on Form 10-K. 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 concluded our search for a new Chief Executive Officer with the appointment of David Bozeman as our President and Chief Executive Officer and a director, effective June 26, 2023.

We use, and may continue to expand our use of, machine learning and artificial intelligence (AI) technologies to deliver our services and operate our business. If we fail to successfully integrate AI into our platform and business processes, or if we fail to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers and programmers, we may face a competitive disadvantage. At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality, reputational harm and security risks. It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect our ability to develop and use AI or subject us to legal liability. The cost of complying with laws and regulations governing AI could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our processes.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information about company purchases by the companyof common stock during the quarter ended SeptemberJune 30, 2017, of shares of the company's common stock.2023:
Total Number
of Shares
(or Units)
Purchased (1)
Average Price
Paid Per
Share
(or Unit)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Maximum Number of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or Programs (2)
April 1, 2023 - April 30, 2023111,642 $96.12 100,000 6,992,701 
May 1, 2023 - May 31, 2023110,469 100.69 107,456 6,885,245 
June 1, 2023 - June 30, 2023125,663 92.92 121,800 6,763,445 
Second Quarter 2023347,774 $96.41 329,256 6,763,445 

 
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 based on trade date includes: (i) 877,054329,256 shares of common stock purchased under the authorization described below; and (ii) 16,19518,518 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.
(b)(2) In August 2013,December 2021, the Board of Directors increased the number of shares authorized for repurchase by 15,000,00020,000,000 shares. As of SeptemberJune 30, 2017,2023, there were 2,654,3016,763,445 shares remaining for future repurchases. PurchasesRepurchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.

ITEM 3. DEFAULTS ONUPON SENIOR SECURITIES
NoneNone.

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ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5. OTHER INFORMATION
NoneDuring the three months ended June 30, 2023, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS    
Exhibits filed with, or incorporated by reference into, this report:
Quarterly Report:
31.1
10.1
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 SeptemberJune 30, 2017,2023 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 June 30, 2023 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.August 4, 2023.
 

C.H. ROBINSON WORLDWIDE, INC.
C.H. ROBINSON WORLDWIDE, INC.By:/s/ David P. Bozeman
David P. Bozeman
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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