Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
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 | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Trading Symbol | CHRW | |
Entity Common Stock, Shares Outstanding | 140,928,814 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 229,794 | $ 247,666 |
Receivables, net of allowance for doubtful accounts of $39,508 and $39,543 | 1,802,777 | 1,711,191 |
Prepaid expenses and other | 60,039 | 49,245 |
Total current assets | 2,092,610 | 2,008,102 |
Property and equipment, net | 235,059 | 232,953 |
Goodwill | 1,240,950 | 1,232,796 |
Other intangible assets, net | 162,945 | 167,525 |
Deferred tax asset | 3,527 | 2,250 |
Other assets | 40,653 | 44,132 |
Total assets | 3,775,744 | 3,687,758 |
Current liabilities: | ||
Accounts payable | 893,237 | 839,736 |
Outstanding checks | 74,020 | 82,052 |
Accrued expenses: | ||
Compensation | 60,243 | 98,107 |
Income taxes | 59,007 | 15,472 |
Other accrued liabilities | 50,860 | 70,351 |
Current portion of debt | 740,000 | 740,000 |
Total current liabilities | 1,877,367 | 1,845,718 |
Long-term debt | 500,000 | 500,000 |
Noncurrent income taxes payable | 17,919 | 18,849 |
Deferred tax liabilities | 64,351 | 65,122 |
Other long-term liabilities | 233 | 222 |
Total liabilities | 2,459,870 | 2,429,911 |
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; 179,003 and 179,006 shares issued, 141,164 and 141,258 outstanding | 14,116 | 14,126 |
Additional paid-in capital | 417,624 | 419,280 |
Retained earnings | 3,248,014 | 3,190,578 |
Accumulated other comprehensive loss | (44,037) | (61,442) |
Treasury stock at cost (37,839 and 37,748 shares) | (2,319,843) | (2,304,695) |
Total stockholders’ investment | 1,315,874 | 1,257,847 |
Total liabilities and stockholders’ investment | $ 3,775,744 | $ 3,687,758 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for doubtful accounts | $ 39,508 | $ 39,543 |
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) | 179,003,000 | 179,006,000 |
Common stock shares outstanding (shares) | 141,164,000 | 141,258,000 |
Treasury stock (shares) | 37,839,000 | 37,748,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Transportation | $ 3,102,043 | $ 2,713,688 |
Sourcing | 313,082 | 360,255 |
Total revenues | 3,415,125 | 3,073,943 |
Costs and expenses: | ||
Purchased transportation and related services | 2,563,885 | 2,179,622 |
Purchased products sourced for resale | 282,674 | 330,986 |
Personnel expenses | 290,504 | 277,497 |
Other selling, general, and administrative expenses | 90,104 | 86,886 |
Total costs and expenses | 3,227,167 | 2,874,991 |
Income from operations | 187,958 | 198,952 |
Interest and other expense | (9,302) | (8,772) |
Income before provision for income taxes | 178,656 | 190,180 |
Provision for income taxes | 56,576 | 71,217 |
Net income | 122,080 | 118,963 |
Other comprehensive income | 17,405 | 3,550 |
Comprehensive income | $ 139,485 | $ 122,513 |
Basic net income per share (in dollars per share) | $ 0.86 | $ 0.83 |
Diluted net income per share (in dollars per share) | $ 0.86 | $ 0.83 |
Basic weighted average shares outstanding (shares) | 141,484 | 143,525 |
Dilutive effect of outstanding stock awards (shares) | 374 | 133 |
Diluted weighted average shares outstanding (shares) | 141,858 | 143,658 |
Cash dividends declared per common share (in dollars per share) | $ 0.45 | $ 0.43 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 122,080 | $ 118,963 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 22,431 | 16,875 |
Provision for doubtful accounts | 3,618 | 85 |
Stock-based compensation | 12,318 | 15,179 |
Deferred income taxes | (2,048) | 15,350 |
Excess tax benefit on stock-based compensation | (9,344) | (13,827) |
Loss on sale/disposal of assets | 485 | 180 |
Changes in operating elements (net of acquisitions): | ||
Receivables | (95,204) | 42,295 |
Prepaid expenses and other | (6,049) | (7,378) |
Other non-current assets | (1,016) | 0 |
Accounts payable and outstanding checks | 47,201 | (22,783) |
Accrued compensation | (37,864) | (84,431) |
Accrued income taxes | 51,949 | 32,732 |
Other accrued liabilities | (15,861) | (9,090) |
Net cash provided by operating activities | 92,696 | 104,150 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (13,537) | (13,121) |
Purchases and development of software | (3,183) | (4,704) |
Acquisitions, net of cash acquired | 1,780 | 0 |
Other | 56 | (770) |
Net cash used for investing activities | (18,444) | (18,595) |
FINANCING ACTIVITIES | ||
Proceeds from stock issued for employee benefit plans | 15,823 | 6,990 |
Stock tendered for payment of withholding taxes | (18,955) | (32,270) |
Repurchase of common stock | (28,999) | (21,249) |
Cash dividends | (64,597) | (63,888) |
Excess tax benefit on stock-based compensation | 0 | 13,827 |
Proceeds from short-term borrowings | 2,450,000 | 1,480,000 |
Payments on short-term borrowings | (2,450,000) | (1,460,000) |
Net cash used for financing activities | (96,728) | (76,590) |
Effect of exchange rates on cash | 4,604 | 2,212 |
Net (decrease)/increase in cash and cash equivalents | (17,872) | 11,177 |
Cash and cash equivalents, beginning of period | 247,666 | 168,229 |
Cash and cash equivalents, end of period | 229,794 | 179,406 |
Noncash transactions from investing and financing activities: | ||
Accrued share repurchases held in other accrued liabilities | 3,000 | 3,000 |
Accrued purchases of property and equipment | $ 1,404 | $ 0 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2017 | |
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, Australia, New Zealand, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. Our reportable segments are North American Surface Transportation ("NAST"), Global Forwarding, Robinson Fresh, and All Other and Corporate. The All Other and Corporate segment includes Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. We group offices primarily by services they provide. For financial information concerning our reportable segments, refer to Note 9. 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, 2016. Recently Issued Accounting Standards - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, and in August 2015 issued ASU No. 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 is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. For the majority of our revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU and generally consist of a single performance obligation to transfer promised goods or services. This standard is effective for us as of January 1, 2018, and permits the use of either a retrospective or a cumulative effect transition method. In preparation for our adoption of the new standard in the quarter beginning January 1, 2018, management assembled a project management team, which has obtained representative samples of contracts and other forms of agreements with our customers and is evaluating the provisions contained within those documents based on the new guidance. We do not expect this change to have a material impact on our results of operations, financial position, and cash flows once implemented. We are still evaluating the disclosure requirements under these standards. As we complete our overall evaluation, we are also identifying and preparing to implement changes to our accounting policies, practices, and controls to support the new standards. 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 have 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 of $9.3 million in the first quarter of 2017. 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 nor have we determined the effect of the standard on our ongoing financial reporting. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was allocated to each of our segments based on the relative fair value at November 30, 2016. The change in carrying amount of goodwill is as follows (in thousands): 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 Translation 6,001 1,052 923 178 8,154 March 31, 2017 balance $ 913,231 $ 160,102 $ 140,481 $ 27,136 $ 1,240,950 We will allocate goodwill resulting from future business combinations to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on a continual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of 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 disposition of a significant portion of a reporting unit. Identifiable intangible assets consisted of the following (in thousands): March 31, 2017 December 31, 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Finite-lived intangibles Customer relationships $ 248,530 $ (96,248 ) $ 152,282 $ 244,036 $ (87,199 ) $ 156,837 Non-competition agreements 500 (312 ) 188 500 (287 ) 213 Total finite-lived intangibles 249,030 (96,560 ) 152,470 244,536 (87,486 ) 157,050 Indefinite-lived intangibles Trademarks 10,475 — 10,475 10,475 — 10,475 Total intangibles $ 259,505 $ (96,560 ) $ 162,945 $ 255,011 $ (87,486 ) $ 167,525 Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended March 31, 2017 2016 Amortization expense $ 8,874 $ 6,093 Definite-lived intangible assets, by reportable segment, as of March 31, 2017 , will be amortized over their remaining lives as follows (in thousands): NAST Global Forwarding Robinson Fresh All Other and Corporate Total Remainder of 2017 $ 5,670 $ 20,640 $ — $ 375 $ 26,685 2018 7,560 27,476 — — 35,036 2019 7,560 27,476 — — 35,036 2020 — 24,772 — — 24,772 2021 — 11,251 — — 11,251 Thereafter — 19,690 — — 19,690 Total $ 152,470 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 , and December 31, 2016 . There were no transfers between levels during the period. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS Senior Unsecured Revolving Credit Facility We have a senior unsecured revolving credit facility (the "Credit Agreement") with total availability of $900 million which expires in December 2019. As of both March 31, 2017 , and December 31, 2016 , we had $740 million respectively, in borrowings outstanding under the Credit Agreement, which is classified as a current liability on the condensed consolidated balance sheets. At March 31, 2017 , we had remaining borrowing availability of $160 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. 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 March 31, 2017 , the variable rate equaled LIBOR plus 1.13 percent. In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility. The weighted average interest rate incurred on borrowings during the quarter ended March 31, 2017 , was approximately 1.9 percent and at March 31, 2017 , was approximately 2.1 percent . The weighted average interest rate incurred on borrowings during the quarter ended March 31, 2016 , was approximately 1.5 percent and at March 31, 2016 , was approximately 1.4 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 under the Credit Agreement as of March 31, 2017 . The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent may declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. Note Purchase 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, 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 under the Note Purchase Agreement as of March 31, 2017 . 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 $533.3 million at March 31, 2017 . 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 | 3 Months Ended |
Mar. 31, 2017 | |
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 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 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718). This adoption resulted in a decrease in our provision for income taxes of $9.3 million in the first quarter of 2017. 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 $19.6 million as of March 31, 2017 . Our effective tax rate for the three months ended March 31, 2017 and 2016 was 31.7 percent and 37.4 percent , respectively. The effective income tax rate for the three months ended March 31, 2017 was lower than the statutory federal income tax rate due to the adoption of ASU 2016-09. It is possible the amount of unrecognized tax benefit could change in the next twelve months as a result of a lapse of the statute of limitations and settlements with taxing authorities; however, we do not anticipate the change will have a material impact on our condensed consolidated results of operations or condensed consolidated financial position. |
STOCK AWARD PLANS
STOCK AWARD PLANS | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Stock options $ 3,002 $ 3,337 Stock awards 8,410 10,840 Company expense on ESPP discount 906 1,002 Total stock-based compensation expense $ 12,318 $ 15,179 On May 12, 2016, our shareholders approved an amendment to and restatement of our 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 13,041,803 shares can be granted under this plan. Approximately 4,969,608 shares were available for stock awards as of March 31, 2017 . 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) on the grants. The fair value of these options is established based on the market price on the date of grant, discounted for post-vesting holding restrictions, calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. As of March 31, 2017 , unrecognized compensation expense related to stock options was $53.6 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 15 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 March 31, 2017 , there was unrecognized compensation expense of $131.3 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 ("ESPP") allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of each quarter discounted by 15 percent . Shares vest immediately. The following is a summary of the employee stock purchase plan activity (dollar amounts in thousands): Three Months Ended March 31, 2017 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 78,180 $ 5,136 $ 906 |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2017 | |
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 17 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. In February 2017, we resolved an outstanding legal claim. The outcome of the resolution was an $8.75 million decrease in other selling, general, and administrative expenses, creating an increase in income from operations in the first quarter of 2017. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On September 30, 2016, we acquired all of the outstanding stock of APC Logistics ("APC") for the purpose of expanding our global presence and bringing additional capabilities and expertise to our portfolio. 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 preliminary summary of the allocation of purchase price consideration to the estimated fair value of net assets for the acquisition of APC Logistics (in thousands): Cash $ 10,181 Receivables 37,190 Inventory and other current assets 2,609 Property and equipment 1,696 Identifiable intangible assets 78,842 Goodwill 132,797 Other noncurrent assets 70 Long term deferred tax asset 814 Total assets 264,199 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 relationships 7 $ 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. Purchase accounting is considered preliminary, subject to revision, mainly with respect to certain potential post-closing and working capital adjustments, as final information was not available as of March 31, 2017 . The goodwill will not be 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. We paid $1.8 million resulting from a working capital adjustment due to the sellers per the terms of the agreement. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 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 three reportable segments as follows: • North American Surface Transportation -NAST provides freight transportation services across North America through a network of offices in the United States, Canada, and Mexico. The primary services provided by NAST include truckload, LTL, and intermodal. • Global Forwarding -Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Australia, New Zealand, and South America and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, airfreight services, and customs brokerage. • Robinson Fresh -Robinson Fresh provides sourcing services under the trade name of Robinson Fresh. Our sourcing services primarily include the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items. Robinson Fresh sources products from around the world and has a physical presence in North America, Europe, Asia, and South America. This segment often provides the logistics and transportation of the products they sell, in addition to temperature controlled transportation services for its customers. • 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, our Chief Executive Officer. The accounting policies of our reporting segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2016. Segment information for prior years has been retroactively recast to align with current year presentation. Segment information as of, and for the quarters ended, March 31, 2017 and 2016, is as follows (dollars in thousands): NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated Three Months Ended March 31, 2017 Revenues $ 2,259,252 $ 468,788 $ 550,445 $ 136,640 $ — $ 3,415,125 Intersegment revenues 101,154 8,143 33,340 6,878 (149,515 ) — Total Revenues $ 2,360,406 $ 476,931 $ 583,785 $ 143,518 $ (149,515 ) $ 3,415,125 Net Revenues $ 372,440 $ 106,546 $ 56,837 $ 32,743 — $ 568,566 Income from Operations 155,877 16,206 14,652 1,223 — 187,958 Depreciation and amortization 5,590 8,020 1,146 7,675 — 22,431 Total assets (1) 2,126,900 699,139 409,972 539,733 $ — 3,775,744 Average headcount 6,844 3,926 961 2,548 — 14,279 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated Three Months Ended March 31, 2016 Revenues $ 2,045,479 $ 351,112 $ 564,093 $ 113,259 $ — $ 3,073,943 Intersegment revenues 60,269 6,080 23,896 313 (90,558 ) — Total Revenues $ 2,105,748 $ 357,192 $ 587,989 $ 113,572 $ (90,558 ) $ 3,073,943 Net Revenues $ 383,798 $ 92,866 $ 58,185 $ 28,486 $ — $ 563,335 Income from Operations 162,351 16,857 17,733 2,011 — 198,952 Depreciation and amortization 5,502 5,079 768 5,526 — 16,875 Total assets (1) 1,854,240 514,958 370,319 422,728 — 3,162,245 Average headcount 6,666 3,488 922 2,175 — 13,251 (1) All cash and cash equivalents and debt are included in All Other and Corporate. Goodwill was allocated to each segment based on relative fair value as of November 30, 2016. |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 , and December 31, 2016 , was $44.0 million and $61.4 million , respectively. Accumulated other comprehensive loss is comprised solely of foreign currency translation adjustments at March 31, 2017 and December 31, 2016 . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On April 26, 2017, the company, as initial master servicer and performance guarantor, C.H. Robinson Receivables, LLC, a wholly-owned subsidiary of the company and bankruptcy-remote entity (“CHRR”), as seller, Gotham Funding Corporation, as conduit purchaser, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (“BTMU”) and Wells Fargo Bank, National Association (“Wells Fargo”), as committed purchasers (conduit purchasers and committed purchasers collectively, the “Purchasers”), BTMU and Wells Fargo, as purchaser agents , and BTMU, as administrative agent (in such capacity, the “Agent”), entered into a Receivables Purchase Agreement (the “Receivables Purchase Agreement”). The Receivables Purchase Agreement and related transaction documents provide a receivables securitization facility (the “Receivables Securitization Facility”). The documentation for the Receivables Securitization Facility includes (i) the Receivables Purchase Agreement, (ii) a Receivables Sale Agreement (the “RSA”) by and among C.H. Robinson Company Inc., a wholly‑owned subsidiary of the company (the “Originator”), CHRR, and the company, as initial master servicer; and (iii) a Performance Guaranty by the company for the benefit of the Agent, the Purchasers, and other affected parties (the “Performance Guaranty”). CHRR was formed for the purpose of acquiring rights to payment arising from the sale of goods or services by the Originator (the “Receivables”). Under the Receivables Securitization Facility, on an ongoing basis the Originator will sell Receivables to CHRR on a non-recourse basis or transfer Receivables to CHRR as capital contributions. CHRR in turn may obtain funding of up to $250 million from time to time from the conduit purchaser or the committed purchasers by requesting purchases of interests in Receivables owned by CHRR, related assets and collections. The purchase price for Receivables sold by the Originator to CHRR will be paid in cash to the extent available to pay the price of Receivables each day, with the balance being evidenced by one or more subordinated notes from CHRR. The subordinated note obligations will be satisfied from collections of the Receivables available after payment of other amounts owed by CHRR under the Receivables Purchase Agreement. For as long as the company is the master servicer, the company will service, administer, and collect the Receivables on behalf of CHRR and the Purchasers. The Performance Guaranty is a customary undertaking by the company guaranteeing the performance of the obligations of the Originator and any master servicer under the Receivables Purchase Agreement and the RSA, as applicable. The Receivables Purchase Agreement requires CHRR to pay yield based on the rate for commercial paper issued by a conduit purchaser, in the case of purchases by a conduit purchaser, and based on 30 day LIBOR plus a margin, in the case of other purchases. A different default rate may be used to calculate yield in the case of certain defaults. Different rates may be used to calculate yield with respect to specific tranches if an appropriate LIBOR rate is not available or if the Agent does not receive required notice that the tranche is not to be funded through the issuance of commercial paper notes. In addition, CHRR will pay the Purchasers upfront fees, commitment fees, and fees based on facility use, and will pay an administrative agent fee. The Receivables Purchase Agreement 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 Purchase Agreement upon the occurrence of certain specified events with respect to the company, the Originator, or CHRR, 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. The Receivables Securitization Facility will terminate on April 26, 2019 unless extended by the parties. We used the proceeds from the Receivables Securitization Facility to pay down the balance on the Credit Agreement. |
GENERAL (Policies)
GENERAL (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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, Australia, New Zealand, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. Our reportable segments are North American Surface Transportation ("NAST"), Global Forwarding, Robinson Fresh, and All Other and Corporate. The All Other and Corporate segment includes Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. We group offices primarily by services they provide. For financial information concerning our reportable segments, refer to Note 9. 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, 2016. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, and in August 2015 issued ASU No. 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 is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The standard requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. For the majority of our revenue arrangements, no significant impacts are expected as these transactions are not accounted for under industry-specific guidance that will be superseded by the ASU and generally consist of a single performance obligation to transfer promised goods or services. This standard is effective for us as of January 1, 2018, and permits the use of either a retrospective or a cumulative effect transition method. In preparation for our adoption of the new standard in the quarter beginning January 1, 2018, management assembled a project management team, which has obtained representative samples of contracts and other forms of agreements with our customers and is evaluating the provisions contained within those documents based on the new guidance. We do not expect this change to have a material impact on our results of operations, financial position, and cash flows once implemented. We are still evaluating the disclosure requirements under these standards. As we complete our overall evaluation, we are also identifying and preparing to implement changes to our accounting policies, practices, and controls to support the new standards. 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 have 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 of $9.3 million in the first quarter of 2017. 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 nor have we determined the effect of the standard on our ongoing financial reporting. |
Goodwill and Intangible Assets | We will allocate goodwill resulting from future business combinations to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on a continual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of 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 disposition of a significant portion of a reporting unit. |
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. |
GOODWILL AND OTHER INTANGIBLE18
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in carrying amount of goodwill is as follows (in thousands): 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 Translation 6,001 1,052 923 178 8,154 March 31, 2017 balance $ 913,231 $ 160,102 $ 140,481 $ 27,136 $ 1,240,950 |
Schedule of Intangible Assets | Identifiable intangible assets consisted of the following (in thousands): March 31, 2017 December 31, 2016 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Finite-lived intangibles Customer relationships $ 248,530 $ (96,248 ) $ 152,282 $ 244,036 $ (87,199 ) $ 156,837 Non-competition agreements 500 (312 ) 188 500 (287 ) 213 Total finite-lived intangibles 249,030 (96,560 ) 152,470 244,536 (87,486 ) 157,050 Indefinite-lived intangibles Trademarks 10,475 — 10,475 10,475 — 10,475 Total intangibles $ 259,505 $ (96,560 ) $ 162,945 $ 255,011 $ (87,486 ) $ 167,525 |
Schedule of Amortization Expense | Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended March 31, 2017 2016 Amortization expense $ 8,874 $ 6,093 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Definite-lived intangible assets, by reportable segment, as of March 31, 2017 , will be amortized over their remaining lives as follows (in thousands): NAST Global Forwarding Robinson Fresh All Other and Corporate Total Remainder of 2017 $ 5,670 $ 20,640 $ — $ 375 $ 26,685 2018 7,560 27,476 — — 35,036 2019 7,560 27,476 — — 35,036 2020 — 24,772 — — 24,772 2021 — 11,251 — — 11,251 Thereafter — 19,690 — — 19,690 Total $ 152,470 |
STOCK AWARD PLANS (Tables)
STOCK AWARD PLANS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 2016 Stock options $ 3,002 $ 3,337 Stock awards 8,410 10,840 Company expense on ESPP discount 906 1,002 Total stock-based compensation expense $ 12,318 $ 15,179 |
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 March 31, 2017 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 78,180 $ 5,136 $ 906 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is a preliminary summary of the allocation of purchase price consideration to the estimated fair value of net assets for the acquisition of APC Logistics (in thousands): Cash $ 10,181 Receivables 37,190 Inventory and other current assets 2,609 Property and equipment 1,696 Identifiable intangible assets 78,842 Goodwill 132,797 Other noncurrent assets 70 Long term deferred tax asset 814 Total assets 264,199 Accounts payable (22,147 ) Accrued expenses (12,700 ) Estimated net assets acquired $ 229,352 |
Schedule of Finite-Lived Intangible Assets by Major Class | Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 78,842 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Segment information as of, and for the quarters ended, March 31, 2017 and 2016, is as follows (dollars in thousands): NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated Three Months Ended March 31, 2017 Revenues $ 2,259,252 $ 468,788 $ 550,445 $ 136,640 $ — $ 3,415,125 Intersegment revenues 101,154 8,143 33,340 6,878 (149,515 ) — Total Revenues $ 2,360,406 $ 476,931 $ 583,785 $ 143,518 $ (149,515 ) $ 3,415,125 Net Revenues $ 372,440 $ 106,546 $ 56,837 $ 32,743 — $ 568,566 Income from Operations 155,877 16,206 14,652 1,223 — 187,958 Depreciation and amortization 5,590 8,020 1,146 7,675 — 22,431 Total assets (1) 2,126,900 699,139 409,972 539,733 $ — 3,775,744 Average headcount 6,844 3,926 961 2,548 — 14,279 NAST Global Forwarding Robinson Fresh All Other and Corporate Eliminations Consolidated Three Months Ended March 31, 2016 Revenues $ 2,045,479 $ 351,112 $ 564,093 $ 113,259 $ — $ 3,073,943 Intersegment revenues 60,269 6,080 23,896 313 (90,558 ) — Total Revenues $ 2,105,748 $ 357,192 $ 587,989 $ 113,572 $ (90,558 ) $ 3,073,943 Net Revenues $ 383,798 $ 92,866 $ 58,185 $ 28,486 $ — $ 563,335 Income from Operations 162,351 16,857 17,733 2,011 — 198,952 Depreciation and amortization 5,502 5,079 768 5,526 — 16,875 Total assets (1) 1,854,240 514,958 370,319 422,728 — 3,162,245 Average headcount 6,666 3,488 922 2,175 — 13,251 (1) All cash and cash equivalents and debt are included in All Other and Corporate. Goodwill was allocated to each segment based on relative fair value as of November 30, 2016. |
GENERAL (Details)
GENERAL (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Effective income tax rate reconciliation, share-based compensation, excess tax benefit amount | $ 9.3 |
GOODWILL AND OTHER INTANGIBLE23
GOODWILL AND OTHER INTANGIBLE ASSETS - Change in the Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill [Roll Forward] | |
December 31, 2016 balance | $ 1,232,796 |
Translation | 8,154 |
March 31, 2017 balance | 1,240,950 |
NAST | |
Goodwill [Roll Forward] | |
December 31, 2016 balance | 907,230 |
Translation | 6,001 |
March 31, 2017 balance | 913,231 |
Global Forwarding | |
Goodwill [Roll Forward] | |
December 31, 2016 balance | 159,050 |
Translation | 1,052 |
March 31, 2017 balance | 160,102 |
Robinson Fresh | |
Goodwill [Roll Forward] | |
December 31, 2016 balance | 139,558 |
Translation | 923 |
March 31, 2017 balance | 140,481 |
All Other and Corporate | |
Goodwill [Roll Forward] | |
December 31, 2016 balance | 26,958 |
Translation | 178 |
March 31, 2017 balance | $ 27,136 |
GOODWILL AND OTHER INTANGIBLE24
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Finite-lived intangibles | ||
Finite-lived intangibles | $ 249,030 | $ 244,536 |
Accumulated amortization | (96,560) | (87,486) |
Net | 152,470 | 157,050 |
Indefinite-lived intangibles | ||
Total intangibles, Cost | 259,505 | 255,011 |
Total intangibles, Net | 162,945 | 167,525 |
Trademarks | ||
Indefinite-lived intangibles | ||
Indefinite-lived intangibles, Gross | 10,475 | 10,475 |
Customer relationships | ||
Finite-lived intangibles | ||
Finite-lived intangibles | 248,530 | 244,036 |
Accumulated amortization | (96,248) | (87,199) |
Net | 152,282 | 156,837 |
Non-competition agreements | ||
Finite-lived intangibles | ||
Finite-lived intangibles | 500 | 500 |
Accumulated amortization | (312) | (287) |
Net | $ 188 | $ 213 |
GOODWILL AND OTHER INTANGIBLE25
GOODWILL AND OTHER INTANGIBLE ASSETS - Estimated Amortization Expense on Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Amortization expense | $ 8,874 | $ 6,093 | |
Estimated amortization expense | |||
Remainder of 2017 | 26,685 | ||
2,018 | 35,036 | ||
2,019 | 35,036 | ||
2,020 | 24,772 | ||
2,021 | 11,251 | ||
Thereafter | 19,690 | ||
Net | 152,470 | $ 157,050 | |
NAST | |||
Estimated amortization expense | |||
Remainder of 2017 | 5,670 | ||
2,018 | 7,560 | ||
2,019 | 7,560 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | 0 | ||
Global Forwarding | |||
Estimated amortization expense | |||
Remainder of 2017 | 20,640 | ||
2,018 | 27,476 | ||
2,019 | 27,476 | ||
2,020 | 24,772 | ||
2,021 | 11,251 | ||
Thereafter | 19,690 | ||
Robinson Fresh | |||
Estimated amortization expense | |||
Remainder of 2017 | 0 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | 0 | ||
All Other and Corporate | |||
Estimated amortization expense | |||
Remainder of 2017 | 375 | ||
2,018 | 0 | ||
2,019 | 0 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | $ 0 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Disclosures [Abstract] | ||
Liability at fair value | $ 0 | $ 0 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) | Aug. 23, 2013USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||
Long-term debt, fair value | $ 533,300,000 | ||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 900,000,000 | ||||
Borrowing availability | $ 160,000,000 | ||||
Debt instrument, interest rate during period | 1.90% | 1.50% | |||
Debt, weighted average interest rate | 2.10% | 1.40% | |||
Debt instrument, covenant, leverage ratio, maximum | 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 | 1.13% | ||||
Unsecured Debt | Senior Unsecured Revolving Credit Facility 2019 Term Loan | Current Liability | |||||
Debt Instrument [Line Items] | |||||
Borrowing outstanding | $ 740,000,000 | $ 740,000,000 | |||
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 | ||||
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Contingency [Line Items] | ||
Estimated effect on income taxes payable from foreign earnings repatriated | $ 19.6 | |
Effective income tax | 31.70% | 37.40% |
Accounting Standards Update 2016-09 | ||
Income Tax Contingency [Line Items] | ||
Deferred Income Tax Liabilities, Net | $ (9.3) |
STOCK AWARD PLANS - Summary of
STOCK AWARD PLANS - Summary of Total Compensation Expense Recognized in Statements of Operations for Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 12,318 | $ 15,179 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 3,002 | 3,337 |
Stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 8,410 | 10,840 |
Company expense on ESPP discount | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 906 | $ 1,002 |
STOCK AWARD PLANS - Additional
STOCK AWARD PLANS - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | May 12, 2016 | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Maximum employee contribution to purchase company stock | $ 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) | 13,041,803 | |
Shares available for stock awards (shares) | 4,969,608 | |
Stock award, vesting period | 5 years | |
Unrecognized compensation expense | $ 53,600,000 | |
Restricted Stock Awards | ||
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||
Stock award, vesting period | 5 years | |
Unrecognized compensation expense | $ 131,300,000 | |
Restricted stock awards, discount for post-vesting holding restriction, lower limit | 15.00% | |
Restricted stock awards, discount for post-vesting holding restriction, upper limit | 22.00% |
STOCK AWARD PLANS - Summary o31
STOCK AWARD PLANS - Summary of Employee Stock Purchase Plan Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares purchased by employees (shares) | 78,180 | |
Aggregate cost to employees | $ 5,136 | |
Expense recognized by the company | 12,318 | $ 15,179 |
Company expense on ESPP discount | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expense recognized by the company | $ 906 | $ 1,002 |
LITIGATION (Details)
LITIGATION (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)case | Mar. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | ||
Decrease in other selling, general, and administrative expenses | $ (90,104) | $ (86,886) |
Contingent Auto Liability Claim | ||
Loss Contingencies [Line Items] | ||
Contingency auto liability cases (case) | case | 17 | |
Resolved Litigation | ||
Loss Contingencies [Line Items] | ||
Decrease in other selling, general, and administrative expenses | $ 8,750 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Business Acquisition [Line Items] | |||
Payments related to working capital adjustment | $ (1,780) | $ 0 | |
APC Logistics | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 229,400 |
ACQUISITIONS - Schedule of Reco
ACQUISITIONS - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,240,950 | $ 1,232,796 | |
APC Logistics | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 10,181 | ||
Receivables | 37,190 | ||
Inventory and other current assets | 2,609 | ||
Property and equipment | 1,696 | ||
Identifiable intangible assets | 78,842 | ||
Goodwill | 132,797 | ||
Other noncurrent assets | 70 | ||
Long term deferred tax asset | 814 | ||
Total assets | 264,199 | ||
Accounts payable | (22,147) | ||
Accrued expenses | (12,700) | ||
Estimated net assets acquired | $ 229,352 |
ACQUISITIONS - Schedule of Fini
ACQUISITIONS - Schedule of Finite-Lived Intangible Assets by Major Class (Details) - APC Logistics $ in Thousands | Sep. 30, 2016USD ($) |
Business Acquisition [Line Items] | |
Identifiable intangible assets | $ 78,842 |
Customer relationships | |
Business Acquisition [Line Items] | |
Estimated Life (years) | 7 years |
Identifiable intangible assets | $ 78,842 |
SEGMENT REPORTING - Additional
SEGMENT REPORTING - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)employee | Mar. 31, 2016USD ($)employee | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 3,415,125 | $ 3,073,943 | |
Net Revenues | 568,566 | 563,335 | |
Operating Income | 187,958 | 198,952 | |
Depreciation and amortization | 22,431 | 16,875 | |
Total assets | $ 3,775,744 | $ 3,162,245 | $ 3,687,758 |
Weighted Average | |||
Segment Reporting Information [Line Items] | |||
Average headcount | employee | 14,279 | 13,251 | |
NAST | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 2,360,406 | $ 2,105,748 | |
Net Revenues | 372,440 | 383,798 | |
Operating Income | 155,877 | 162,351 | |
Depreciation and amortization | 5,590 | 5,502 | |
Total assets | $ 2,126,900 | $ 1,854,240 | |
NAST | Weighted Average | |||
Segment Reporting Information [Line Items] | |||
Average headcount | employee | 6,844 | 6,666 | |
Global Forwarding | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 476,931 | $ 357,192 | |
Net Revenues | 106,546 | 92,866 | |
Operating Income | 16,206 | 16,857 | |
Depreciation and amortization | 8,020 | 5,079 | |
Total assets | $ 699,139 | $ 514,958 | |
Global Forwarding | Weighted Average | |||
Segment Reporting Information [Line Items] | |||
Average headcount | employee | 3,926 | 3,488 | |
Robinson Fresh | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 583,785 | $ 587,989 | |
Net Revenues | 56,837 | 58,185 | |
Operating Income | 14,652 | 17,733 | |
Depreciation and amortization | 1,146 | 768 | |
Total assets | $ 409,972 | $ 370,319 | |
Robinson Fresh | Weighted Average | |||
Segment Reporting Information [Line Items] | |||
Average headcount | employee | 961 | 922 | |
All Other and Corporate | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 143,518 | $ 113,572 | |
Net Revenues | 32,743 | 28,486 | |
Operating Income | 1,223 | 2,011 | |
Depreciation and amortization | 7,675 | 5,526 | |
Total assets | $ 539,733 | $ 422,728 | |
All Other and Corporate | Weighted Average | |||
Segment Reporting Information [Line Items] | |||
Average headcount | employee | 2,548 | 2,175 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 3,415,125 | $ 3,073,943 | |
Operating Segments | NAST | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 2,259,252 | 2,045,479 | |
Operating Segments | Global Forwarding | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 468,788 | 351,112 | |
Operating Segments | Robinson Fresh | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 550,445 | 564,093 | |
Operating Segments | All Other and Corporate | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 136,640 | 113,259 | |
Intersegment revenues | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | (149,515) | (90,558) | |
Intersegment revenues | NAST | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 101,154 | 60,269 | |
Intersegment revenues | Global Forwarding | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 8,143 | 6,080 | |
Intersegment revenues | Robinson Fresh | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | 33,340 | 23,896 | |
Intersegment revenues | All Other and Corporate | |||
Segment Reporting Information [Line Items] | |||
Total Revenues | $ 6,878 | $ 313 |
CHANGES IN ACCUMULATED OTHER 38
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity Note [Abstract] | ||
Accumulated other comprehensive loss | $ (44,037) | $ (61,442) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 26, 2017USD ($) |
Receivables Securitization Facility | Subordinated Debt | CHRR | Subsequent Event | |
Subsequent Event [Line Items] | |
Maximum funding that may be obtained | $ 250,000,000 |