Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 04, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | C H ROBINSON WORLDWIDE INC | |
Entity Central Index Key | 1,043,277 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Trading Symbol | CHRW | |
Entity Common Stock, Shares Outstanding | 142,707,477 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 207,083 | $ 168,229 |
Receivables, net of allowance for doubtful accounts of $40,693 and $43,455 | 1,602,631 | 1,505,620 |
Deferred tax asset | 10,261 | 16,788 |
Prepaid expenses and other | 59,127 | 40,061 |
Total current assets | 1,879,102 | 1,730,698 |
Property and equipment, net | 211,905 | 190,874 |
Goodwill | 1,108,761 | 1,108,337 |
Other intangible assets, net | 108,072 | 120,242 |
Other assets | 41,230 | 34,207 |
Total assets | 3,349,070 | 3,184,358 |
Current liabilities: | ||
Accounts payable | 757,792 | 697,585 |
Outstanding checks | 78,929 | 86,298 |
Accrued expenses: | ||
Compensation and profit-sharing contribution | 84,648 | 146,666 |
Income taxes | 42,094 | 12,573 |
Other accrued liabilities | 62,994 | 55,475 |
Current portion of debt | 465,000 | 450,000 |
Total current liabilities | 1,491,457 | 1,448,597 |
Long-term debt | 500,000 | 500,000 |
Noncurrent income taxes payable | 18,615 | 19,634 |
Deferred tax liabilities | 75,937 | 65,460 |
Other long-term liabilities | 221 | 217 |
Total liabilities | 2,086,230 | 2,033,908 |
Stockholders’ investment: | ||
Preferred stock, $ .10 par value, 20,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $ .10 par value, 480,000 shares authorized; 178,783 and 178,784 shares issued, 142,833 and 143,455 outstanding | 14,283 | 14,345 |
Additional paid-in capital | 404,784 | 379,444 |
Retained earnings | 3,057,158 | 2,922,620 |
Accumulated other comprehensive loss | (37,973) | (37,946) |
Treasury stock at cost (35,950 and 35,329 shares) | (2,175,412) | (2,128,013) |
Total stockholders’ investment | 1,262,840 | 1,150,450 |
Total liabilities and stockholders’ investment | $ 3,349,070 | $ 3,184,358 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 40,693 | $ 43,455 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (shares) | 480,000,000 | 480,000,000 |
Common stock, shares issued (shares) | 178,783,000 | 178,784,000 |
Common stock shares outstanding (shares) | 142,833,000 | 143,455,000 |
Treasury stock (shares) | 35,950,000 | 35,329,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Transportation | $ 2,881,496 | $ 3,130,722 | $ 5,595,184 | $ 6,077,979 |
Sourcing | 418,245 | 414,366 | 778,500 | 767,999 |
Total revenues | 3,299,741 | 3,545,088 | 6,373,684 | 6,845,978 |
Costs and expenses: | ||||
Purchased transportation and related services | 2,324,995 | 2,582,374 | 4,504,617 | 5,034,486 |
Purchased products sourced for resale | 380,531 | 378,696 | 711,517 | 702,364 |
Personnel expenses | 270,251 | 263,999 | 547,748 | 519,143 |
Other selling, general, and administrative expenses | 90,217 | 90,924 | 177,103 | 178,965 |
Total costs and expenses | 3,065,994 | 3,315,993 | 5,940,985 | 6,434,958 |
Income from operations | 233,747 | 229,095 | 432,699 | 411,020 |
Interest and other expense | (6,265) | (5,894) | (15,037) | (15,499) |
Income before provision for income taxes | 227,482 | 223,201 | 417,662 | 395,521 |
Provision for income taxes | 84,392 | 85,993 | 155,609 | 151,837 |
Net income | 143,090 | 137,208 | 262,053 | 243,684 |
Other comprehensive (loss) gain | (3,577) | 4,130 | (27) | (9,068) |
Comprehensive income | $ 139,513 | $ 141,338 | $ 262,026 | $ 234,616 |
Basic net income per share (in dollars per share) | $ 1 | $ 0.94 | $ 1.83 | $ 1.67 |
Diluted net income per share (in dollars per share) | $ 1 | $ 0.94 | $ 1.83 | $ 1.67 |
Basic weighted average shares outstanding (shares) | 142,998 | 145,515 | 143,259 | 145,856 |
Dilutive effect of outstanding stock awards (shares) | 218 | 164 | 178 | 164 |
Diluted weighted average shares outstanding (shares) | 143,216 | 145,679 | 143,437 | 146,020 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 262,053 | $ 243,684 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 35,059 | 32,682 |
Provision for doubtful accounts | 2,144 | 9,053 |
Stock-based compensation | 25,785 | 31,019 |
Deferred income taxes | 17,004 | (1,780) |
Loss on sale/disposal of assets | 366 | 438 |
Changes in operating elements (net of acquisitions): | ||
Receivables | (94,030) | (87,663) |
Prepaid expenses and other | (19,066) | (19,802) |
Other non-current assets | (1,615) | 736 |
Accounts payable and outstanding checks | 52,843 | 56,891 |
Accrued compensation and profit-sharing contribution | (61,029) | (32,027) |
Accrued income taxes | 28,502 | 21,230 |
Other accrued liabilities | (755) | (3,265) |
Net cash provided by operating activities | 247,261 | 251,196 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (33,483) | (11,542) |
Purchases and development of software | (10,493) | (8,063) |
Acquisitions, net of cash acquired | 0 | (369,143) |
Restricted cash | 0 | 359,388 |
Other | (405) | 361 |
Net cash used for investing activities | (44,381) | (28,999) |
FINANCING ACTIVITIES | ||
Proceeds from stock issued for employee benefit plans | 12,132 | 9,858 |
Stock tendered for payment of withholding taxes | (33,133) | (10,190) |
Repurchase of common stock | (45,248) | (89,923) |
Cash dividends | (127,520) | (114,517) |
Excess tax benefit on stock-based compensation | 15,104 | 6,040 |
Proceeds from short-term borrowings | 2,840,000 | 3,893,000 |
Payments on short-term borrowings | (2,825,000) | (3,868,000) |
Net cash used for financing activities | (163,665) | (173,732) |
Effect of exchange rates on cash | (361) | (5,954) |
Net increase in cash and cash equivalents | 38,854 | 42,511 |
Cash and cash equivalents, beginning of period | 168,229 | 128,940 |
Cash and cash equivalents, end of period | 207,083 | 171,451 |
Noncash transactions from investing activities: | ||
Accrued purchases of property and equipment | $ 5,359 | $ 0 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | GENERAL 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, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. 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 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, 2015. Recently Issued Accounting Standards - In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. 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, which will require us to adopt these provisions in the first quarter of 2017. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The change in the carrying amount of goodwill is as follows (in thousands): Balance, December 31, 2015 $ 1,108,337 Foreign currency translation 424 Balance, June 30, 2016 $ 1,108,761 A summary of our other intangible assets, with finite lives, which include primarily customer relationships and non-competition agreements, is as follows (in thousands): June 30, 2016 December 31, 2015 Gross $ 171,172 $ 171,172 Accumulated amortization (73,575 ) (61,405 ) Net $ 97,597 $ 109,767 Other intangible assets, with indefinite lives, are as follows (in thousands): June 30, 2016 December 31, 2015 Trademarks $ 10,475 $ 10,475 Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Amortization expense $ 6,095 $ 6,093 $ 12,188 $ 12,189 Intangible assets at June 30, 2016 , will be amortized over the next five years, and that expense is as follows: Remainder of 2016 $ 12,183 2017 24,324 2018 23,785 2019 23,785 2020 13,520 Thereafter — Total $ 97,597 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: • Level 1 — Quoted market prices in active markets for identical assets or liabilities. • Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data. • Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. We had no Level 3 assets or liabilities as of and during the periods ended June 30, 2016 , and December 31, 2015 . |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS On October 29, 2012, we entered into a senior unsecured revolving credit facility for up to $500 million with a $500 million accordion feature (the "Credit Agreement") with a syndicate of financial institutions led by U.S. Bank. The purpose of this facility was to partially fund the acquisition of Phoenix International Freight Services, Ltd. ("Phoenix") and to allow us to continue to fund working capital, capital expenditures, dividends, and share repurchases. In December 2014, we amended the credit facility to increase the amount available from $500 million to $900 million and to extend the expiration date from October 2017 to December 2019. As of June 30, 2016 , and December 31, 2015 , we had $465 million and $450 million , respectively, in borrowings outstanding under the Credit Agreement, which is classified as a current liability on the condensed consolidated balance sheets. 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. 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 LIBOR plus a specified margin). As of June 30, 2016 , the variable rate equaled LIBOR plus 1.00 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 quarter ended June 30, 2016 , was approximately 1.5 percent and at June 30, 2016 , was approximately 1.5 percent . The weighted average interest rate incurred on borrowings during the quarter ended June 30, 2015 , was approximately 1.3 percent and at June 30, 2015 , was approximately 1.3 percent . The Credit Agreement contains various restrictions and covenants. Among other requirements, we may not permit our leverage ratio, determined as of the end of each of our fiscal quarters, of (i) Consolidated Funded Indebtedness to (ii) EBITDA (earnings before interest, taxes, depreciation, and amortization), to exceed 3.00 to 1.00 . We were in compliance with all of the financial debt covenants as of June 30, 2016 . The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent may declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. 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, the Purchasers purchased, on August 27, 2013, (i) $175,000,000 aggregate principal amount of the company’s 3.97 percent 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, the “Notes”). Interest on the Notes is payable semi-annually in arrears. We applied the proceeds of the sale of the Notes for share repurchases. The Note Purchase Agreement contains customary provisions for transactions of this type, including representations and warranties regarding the company and its subsidiaries and various covenants, including covenants that require us to maintain specified financial ratios. The Note Purchase Agreement includes the following financial covenants: we will not permit our leverage ratio, determined as of the end of each of our fiscal quarters, of (i) Consolidated Funded Indebtedness to (ii) EBITDA (earnings before interest, taxes, depreciation, and amortization), to exceed 3.00 to 1.00 ; we will not permit the 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 ; and we will not permit, as of the end of each of our fiscal quarters, Consolidated Priority Debt to exceed 15 percent of Consolidated Total Assets. We were in compliance with all of the financial debt covenants as of June 30, 2016 . 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. The occurrence of an event of default would permit certain Purchasers to declare certain Notes then outstanding to be immediately due and payable. Under the terms of the Note Purchase Agreement, the Notes are redeemable, in whole or in part, at 100 percent of the principal amount being redeemed together with a “make-whole amount” (as defined in the Note Purchase Agreement), and accrued and unpaid interest with respect to each Note. The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed by C.H. Robinson Company, a Delaware corporation and a wholly-owned subsidiary of the company, and by C.H. Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company. The Notes were issued by the company to the initial purchasers in a private placement in reliance on Section 4(a)(2) 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 approximated $570.2 million at June 30, 2016 . We estimate the fair value of our 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. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES C.H. Robinson Worldwide, Inc. and its 80 percent (or more) owned U.S. subsidiaries file a consolidated federal income tax return. We file unitary or separate state returns based on state filing requirements. 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 2009. During the first quarter of 2016, we asserted that we will indefinitely reinvest earnings of foreign subsidiaries to support expansion of our international businesses. The assertion decreased deferred income taxes related to undistributed foreign earnings by $1.3 million in the second quarter of 2016 and reduced the effective tax rate compared to the second quarter of 2015 . Our effective tax rate for the three months ended June 30, 2016 and 2015 was 37.1 percent and 38.5 percent , respectively. The effective income tax rate for both periods is greater than the statutory federal income tax rate due to state income taxes, net of federal benefit. |
STOCK AWARD PLANS
STOCK AWARD PLANS | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK AWARD PLANS | STOCK AWARD PLANS Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests. A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Stock options $ 1,878 $ 4,109 $ 5,215 $ 7,873 Stock awards 8,181 11,057 19,021 21,736 Company expense on ESPP discount 547 517 1,549 1,410 Total stock-based compensation expense $ 10,606 $ 15,683 $ 25,785 $ 31,019 On May 12, 2016, our shareholders approved our amended 2013 Equity Incentive Plan, which allows us to grant certain stock awards, including stock options at fair market value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 6,000,000 shares plus the shares remaining available for future grants under the 2013 Equity Incentive Plan as of May 12, 2016, can be granted under this plan. Approximately 6,751,919 shares were available for stock awards as of June 30, 2016 . Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan. Stock Options - We have awarded performance-based stock options to certain key employees. These options are subject to certain vesting requirements over a five -year period based on the company’s earnings growth. Any options remaining unvested at the end of the five -year vesting period are forfeited to the company. Although participants can exercise options via a stock swap exercise, we do not issue reloads (restoration options). The fair value of these options is established based on the market price on the date of grant, discounted for post-vesting holding restrictions, calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. As of June 30, 2016 , unrecognized compensation expense related to stock options was $48.0 million . The amount of future expense to be recognized will be based on the company’s earnings growth and certain other conditions. Full Value Awards - We have awarded performance shares and restricted stock units to certain key employees and non-employee directors. These 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 post-vesting holding restrictions. The discounts on outstanding grants vary from 17 percent to 22 percent and are calculated using the Black-Scholes option pricing model-protective put method. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. We 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. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned. As of June 30, 2016 , there was unrecognized compensation expense of $108.5 million related to previously granted full value awards. The amount of future expense to be recognized will be based on the company’s earnings growth and certain other conditions. Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of each quarter discounted by 15 percent . Shares vest immediately. The following is a summary of the employee stock purchase plan activity (dollar amounts in thousands): Three Months Ended June 30, 2016 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 48,943 $ 3,094 $ 547 |
LITIGATION
LITIGATION | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | 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 23 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. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On January 1, 2015, we completed the acquisition of Freightquote.com, Inc. ("Freightquote") for the purpose of enhancing our less than truckload and truckload businesses and expanding our eCommerce capabilities. Total purchase consideration was $398.6 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 consideration to the estimated fair value of net assets for the acquisition of Freightquote (in thousands): Cash and cash equivalents $ 29,302 Receivables 56,228 Other current assets 2,395 Property and equipment 43,687 Identifiable intangible assets 37,800 Goodwill 287,220 Trademarks 8,600 Other noncurrent assets 3,421 Total assets 468,653 Accounts payable (44,622 ) Accrued expenses (5,485 ) Other liabilities (19,939 ) Estimated net assets acquired $ 398,607 Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 5 $ 37,500 Noncompete agreements 5 300 Total identifiable intangible assets $ 37,800 We also acquired a trademark valued at $8.6 million which has been determined to be indefinite-lived. The Freightquote goodwill is a result of acquiring and retaining the Freightquote existing workforce and expected synergies from integrating their business into C.H. Robinson. Purchase accounting is considered final. The goodwill will not be deductible for tax purposes. |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS Accumulated other comprehensive loss is included in Stockholders' investment on our condensed consolidated balance sheets. The recorded balance, at June 30, 2016 , and December 31, 2015 , was $38.0 million and $37.9 million , respectively. Accumulated other comprehensive loss is comprised solely of foreign currency translation adjustment at June 30, 2016 , and December 31, 2015 . |
GENERAL (Policies)
GENERAL (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis 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, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. 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 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, 2015. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards - In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. 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, which will require us to adopt these provisions in the first quarter of 2017. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. |
GOODWILL AND OTHER INTANGIBLE16
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in the carrying amount of goodwill is as follows (in thousands): Balance, December 31, 2015 $ 1,108,337 Foreign currency translation 424 Balance, June 30, 2016 $ 1,108,761 |
Schedule of Finite-Lived Intangible Assets by Major Class | A summary of our other intangible assets, with finite lives, which include primarily customer relationships and non-competition agreements, is as follows (in thousands): June 30, 2016 December 31, 2015 Gross $ 171,172 $ 171,172 Accumulated amortization (73,575 ) (61,405 ) Net $ 97,597 $ 109,767 Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 5 $ 37,500 Noncompete agreements 5 300 Total identifiable intangible assets $ 37,800 |
Schedule of Indefinite-lived Intangible Assets by Major Class | Other intangible assets, with indefinite lives, are as follows (in thousands): June 30, 2016 December 31, 2015 Trademarks $ 10,475 $ 10,475 |
Schedule of Amortization Expense | Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Amortization expense $ 6,095 $ 6,093 $ 12,188 $ 12,189 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Intangible assets at June 30, 2016 , will be amortized over the next five years, and that expense is as follows: Remainder of 2016 $ 12,183 2017 24,324 2018 23,785 2019 23,785 2020 13,520 Thereafter — Total $ 97,597 |
STOCK AWARD PLANS (Tables)
STOCK AWARD PLANS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Stock options $ 1,878 $ 4,109 $ 5,215 $ 7,873 Stock awards 8,181 11,057 19,021 21,736 Company expense on ESPP discount 547 517 1,549 1,410 Total stock-based compensation expense $ 10,606 $ 15,683 $ 25,785 $ 31,019 |
Schedule of Share-based Compensation, Employee Stock Purchase Plan, Activity | The following is a summary of the employee stock purchase plan activity (dollar amounts in thousands): Three Months Ended June 30, 2016 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 48,943 $ 3,094 $ 547 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the acquisition of Freightquote (in thousands): Cash and cash equivalents $ 29,302 Receivables 56,228 Other current assets 2,395 Property and equipment 43,687 Identifiable intangible assets 37,800 Goodwill 287,220 Trademarks 8,600 Other noncurrent assets 3,421 Total assets 468,653 Accounts payable (44,622 ) Accrued expenses (5,485 ) Other liabilities (19,939 ) Estimated net assets acquired $ 398,607 |
Schedule of Finite-Lived Intangible Assets by Major Class | A summary of our other intangible assets, with finite lives, which include primarily customer relationships and non-competition agreements, is as follows (in thousands): June 30, 2016 December 31, 2015 Gross $ 171,172 $ 171,172 Accumulated amortization (73,575 ) (61,405 ) Net $ 97,597 $ 109,767 Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 5 $ 37,500 Noncompete agreements 5 300 Total identifiable intangible assets $ 37,800 |
GOODWILL AND OTHER INTANGIBLE19
GOODWILL AND OTHER INTANGIBLE ASSETS Change in the Carrying Amount of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 1,108,337 |
Foreign currency translation | 424 |
Ending Balance | $ 1,108,761 |
GOODWILL AND OTHER INTANGIBLE20
GOODWILL AND OTHER INTANGIBLE ASSETS Summary of Other Intangible Assets, with Finite Lives (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Net | $ 97,597 | |
Other Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 171,172 | $ 171,172 |
Accumulated amortization | (73,575) | (61,405) |
Net | $ 97,597 | $ 109,767 |
GOODWILL AND OTHER INTANGIBLE21
GOODWILL AND OTHER INTANGIBLE ASSETS Other Intangible Assets, with Indefinite Lives (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trademarks | $ 10,475 | $ 10,475 |
GOODWILL AND OTHER INTANGIBLE22
GOODWILL AND OTHER INTANGIBLE ASSETS Amortization Expense of Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 6,095 | $ 6,093 | $ 12,188 | $ 12,189 |
GOODWILL AND OTHER INTANGIBLE23
GOODWILL AND OTHER INTANGIBLE ASSETS Estimated Amortization Expense on Intangible Assets (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Estimated amortization expense | |
Remainder of 2016 | $ 12,183 |
2,017 | 24,324 |
2,018 | 23,785 |
2,019 | 23,785 |
2,020 | 13,520 |
Thereafter | 0 |
Net | $ 97,597 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Liability at fair value | $ 0 | $ 0 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) | Aug. 23, 2013USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015 | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 29, 2012USD ($) |
Debt Instrument [Line Items] | |||||||
Long-term debt, fair value | $ 570,200,000 | $ 570,200,000 | |||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 900,000,000 | $ 500,000,000 | |||||
Additional borrowing capacity credit facility | $ 500,000,000 | ||||||
Debt instrument, interest rate during period | 1.50% | 1.30% | |||||
Debt, weighted average interest rate | 1.50% | 1.30% | 1.50% | ||||
Debt instrument, covenant, leverage ratio, maximum | 3 | 3 | |||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | Current Liability | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing outstanding | $ 465,000,000 | $ 465,000,000 | $ 450,000,000 | ||||
Senior Notes | Series A Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 175,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 3.97% | ||||||
Senior Notes | Series B Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 150,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 4.26% | ||||||
Senior Notes | Series C Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 175,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 4.60% | ||||||
Senior Notes | Note Purchase Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, covenant, leverage ratio, maximum | 3 | 3 | |||||
Debt instrument, covenant, interest expense ratio, maximum | 2 | ||||||
Debt instrument, covenant, priority debt, percentage | 15.00% | ||||||
Debt instrument, redemption price, percentage | 100.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Decrease in deferred income taxes related to undistributed foreign earnings | $ 1.3 | |
Effective income tax | 37.10% | 38.50% |
STOCK AWARD PLANS Summary of To
STOCK AWARD PLANS Summary of Total Compensation Expense Recognized in Statements of Operations for Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 10,606 | $ 15,683 | $ 25,785 | $ 31,019 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1,878 | 4,109 | 5,215 | 7,873 |
Stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 8,181 | 11,057 | 19,021 | 21,736 |
Company expense on ESPP discount | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 547 | $ 517 | $ 1,549 | $ 1,410 |
STOCK AWARD PLANS - Additional
STOCK AWARD PLANS - Additional Information (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Maximum employee contribution to purchase company stock | $ 10,000 | $ 10,000 |
Discount rate used to determine the purchase price | 15.00% | |
Stock Option | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Maximum shares that can be granted under stock plan (shares) | shares | 6,000,000 | 6,000,000 |
Shares available for stock awards (shares) | shares | 6,751,919 | 6,751,919 |
Stock award, vesting period (in years) | 5 years | |
Unrecognized compensation expense | $ 48,000,000 | $ 48,000,000 |
Restricted Stock Awards | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Stock award, vesting period (in years) | 5 years | |
Unrecognized compensation expense | $ 108,500,000 | $ 108,500,000 |
Restricted stock awards, discount for post-vesting holding restriction, lower limit | 17.00% | |
Restricted stock awards, discount for post-vesting holding restriction, upper limit | 22.00% |
STOCK AWARD PLANS Summary of Em
STOCK AWARD PLANS Summary of Employee Stock Purchase Plan Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares purchased by employees (shares) | 48,943 | |||
Aggregate cost to employees | $ 3,094 | |||
Expense recognized by the company | 10,606 | $ 15,683 | $ 25,785 | $ 31,019 |
Company expense on ESPP discount | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expense recognized by the company | $ 547 | $ 517 | $ 1,549 | $ 1,410 |
LITIGATION (Details)
LITIGATION (Details) | 6 Months Ended |
Jun. 30, 2016case | |
Contingent Auto Liability Claim | |
Loss Contingencies [Line Items] | |
Contingency auto liability cases (case) | 23 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - Freightquote $ in Thousands | Jan. 01, 2015USD ($) |
Business Acquisition [Line Items] | |
Total purchase price | $ 398,600 |
Identifiable intangible assets | 37,800 |
Trademarks | |
Business Acquisition [Line Items] | |
Acquired trademarks value | $ 8,600 |
Customer relationships | |
Business Acquisition [Line Items] | |
Estimated life | 5 years |
Identifiable intangible assets | $ 37,500 |
Noncompete agreements | |
Business Acquisition [Line Items] | |
Estimated life | 5 years |
Identifiable intangible assets | $ 300 |
ACQUISITIONS Business Combinati
ACQUISITIONS Business Combinations (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jan. 01, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,108,761 | $ 1,108,337 | |
Freightquote | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 29,302 | ||
Receivables | 56,228 | ||
Other current assets | 2,395 | ||
Property and equipment | 43,687 | ||
Identifiable intangible assets | 37,800 | ||
Goodwill | 287,220 | ||
Trademarks | 8,600 | ||
Other noncurrent assets | 3,421 | ||
Total assets | 468,653 | ||
Accounts payable | (44,622) | ||
Accrued expenses | (5,485) | ||
Other liabilities | (19,939) | ||
Estimated net assets acquired | $ 398,607 |
CHANGES IN ACCUMULATED OTHER 33
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Stockholders' Equity Note [Abstract] | ||
Accumulated other comprehensive loss | $ (37,973) | $ (37,946) |