Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 29, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-23189 | |
Entity Registrant Name | C.H. ROBINSON WORLDWIDE, INC. | |
Entity Central Index Key | 0001043277 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-1883630 | |
Entity Address, Address Line One | 14701 Charlson Road | |
Entity Address, City or Town | Eden Prairie | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55347 | |
City Area Code | 952 | |
Local Phone Number | 937-8500 | |
Title of 12(b) Security | Common Stock, $0.10 par value | |
Trading Symbol | CHRW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 134,609,978 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 294,572 | $ 447,858 |
Receivables, net of allowance for credit loss of $32,472 and $32,838 | 2,092,613 | 1,974,381 |
Contract assets, net of allowance for credit loss | 123,558 | 132,874 |
Prepaid expenses and other | 95,896 | 85,005 |
Total current assets | 2,606,639 | 2,640,118 |
Property and equipment, net | 211,799 | 208,423 |
Goodwill | 1,450,999 | 1,291,760 |
Other intangible assets, net | 132,013 | 90,931 |
Right-of-use lease assets | 345,908 | 310,860 |
Deferred tax assets | 14,605 | 13,485 |
Other assets | 86,357 | 85,483 |
Total assets | 4,848,320 | 4,641,060 |
Current liabilities: | ||
Accounts payable | 1,098,905 | 984,604 |
Outstanding checks | 51,649 | 78,231 |
Accrued expenses: | ||
Compensation | 88,528 | 112,784 |
Transportation expense | 93,900 | 101,194 |
Income taxes | 14,473 | 12,354 |
Other accrued liabilities | 65,930 | 62,706 |
Current lease liabilities | 70,423 | 61,280 |
Current portion of debt | 320,917 | 142,885 |
Total current liabilities | 1,804,725 | 1,556,038 |
Long-term debt | 1,092,660 | 1,092,448 |
Noncurrent lease liabilities | 286,210 | 259,444 |
Noncurrent income taxes payable | 21,576 | 22,354 |
Deferred tax liabilities | 55,766 | 39,776 |
Other long-term liabilities | 265 | 270 |
Total liabilities | 3,261,202 | 2,970,330 |
Stockholders’ investment: | ||
Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.10 par value, 480,000 shares authorized; 179,700 and 179,380 shares issued, 134,586 and 134,895 outstanding | 13,459 | 13,490 |
Additional paid-in capital | 533,819 | 546,646 |
Retained earnings | 4,153,109 | 4,144,834 |
Accumulated other comprehensive loss | (108,344) | (76,149) |
Treasury stock at cost (45,114 and 44,485 shares) | (3,004,925) | (2,958,091) |
Total stockholders’ investment | 1,587,118 | 1,670,730 |
Total liabilities and stockholders’ investment | $ 4,848,320 | $ 4,641,060 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Receivable, allowance for credit loss | $ 32,472 | $ 32,838 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (shares) | 480,000,000 | 480,000,000 |
Common stock, issued (shares) | 179,700,000 | 179,380,000 |
Common stock, outstanding (shares) | 134,586,000 | 134,895,000 |
Treasury stock (shares) | 45,114,000 | 44,485,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 3,805,008 | $ 3,751,210 |
Costs and expenses: | ||
Personnel expenses | 330,220 | 340,098 |
Other selling, general, and administrative expenses | 128,293 | 114,152 |
Total costs and expenses | 3,695,568 | 3,526,660 |
Income from operations | 109,440 | 224,550 |
Interest and other expense | (15,228) | (17,140) |
Income before provision for income taxes | 94,212 | 207,410 |
Provision for income taxes | 16,066 | 45,622 |
Net income | 78,146 | 161,788 |
Other comprehensive (loss) income, net of tax | (32,195) | 5,297 |
Comprehensive income | $ 45,951 | $ 167,085 |
Basic net income per share (in dollars per share) | $ 0.58 | $ 1.17 |
Diluted net income per share (in dollars per share) | $ 0.57 | $ 1.16 |
Basic weighted average shares outstanding (shares) | 135,474 | 137,854 |
Dilutive effect of outstanding stock awards (shares) | 495 | 1,101 |
Diluted weighted average shares outstanding (shares) | 135,969 | 138,955 |
Transportation | ||
Revenues: | ||
Total revenues | $ 3,542,118 | $ 3,504,932 |
Costs and expenses: | ||
Purchased products and services | 3,000,113 | 2,853,256 |
Sourcing | ||
Revenues: | ||
Total revenues | 262,890 | 246,278 |
Costs and expenses: | ||
Purchased products and services | $ 236,942 | $ 219,154 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Investment - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 1,670,730 | $ 1,595,087 |
Net income | 78,146 | 161,788 |
Foreign currency adjustments, net of tax | (32,195) | 5,297 |
Dividends declared | (69,871) | (69,683) |
Stock issued for employee benefit plans | (2,526) | 7,573 |
Issuance of restricted stock, net of forfeitures | 0 | 0 |
Stock-based compensation expense | 11,397 | 17,123 |
Repurchase of common stock | (68,563) | (64,624) |
Ending balance | $ 1,587,118 | $ 1,652,561 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 134,895 | 137,284 |
Beginning balance | $ 13,490 | $ 13,728 |
Stock issued for employee benefit plans (in shares) | 343 | 342 |
Stock issued for employee benefit plans | $ 34 | $ 34 |
Issuance of restricted stock, net of forfeitures (in shares) | 321 | |
Issuance of restricted stock, net of forfeitures (in shares) | (3) | |
Issuance of restricted stock, net of forfeitures | $ 32 | $ 0 |
Stock-based compensation expense (in shares) | 0 | 0 |
Stock-based compensation expense | $ 0 | $ 0 |
Repurchase of common stock (in shares) | (973) | (734) |
Repurchase of common stock | $ (97) | $ (73) |
Ending balance (in shares) | 134,586 | 136,889 |
Ending balance | $ 13,459 | $ 13,689 |
Additional Paid-in Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 546,646 | 521,486 |
Stock issued for employee benefit plans | (24,192) | (11,520) |
Issuance of restricted stock, net of forfeitures | (32) | 0 |
Stock-based compensation expense | 11,397 | 17,123 |
Ending balance | 533,819 | 527,089 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | 4,144,834 | 3,845,593 |
Net income | 78,146 | 161,788 |
Dividends declared | (69,871) | (69,683) |
Ending balance | 4,153,109 | 3,937,698 |
Accumulated Other Comprehensive Loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (76,149) | (71,935) |
Foreign currency adjustments, net of tax | (32,195) | 5,297 |
Ending balance | (108,344) | (66,638) |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | (2,958,091) | (2,713,785) |
Stock issued for employee benefit plans | 21,632 | 19,059 |
Stock-based compensation expense | 0 | 0 |
Repurchase of common stock | (68,466) | (64,551) |
Ending balance | $ (3,004,925) | $ (2,759,277) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Investment (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared, per share (in dollars per share) | $ 0.51 | $ 0.50 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
OPERATING ACTIVITIES | ||
Net income | $ 78,146 | $ 161,788 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 24,393 | 24,560 |
Provision for credit losses | 5,675 | 1,774 |
Stock-based compensation | 11,397 | 17,123 |
Deferred income taxes | 1,622 | (364) |
Excess tax benefit on stock-based compensation | (3,737) | (4,458) |
Other operating activities | 788 | 576 |
Changes in operating elements (net of acquisitions): | ||
Receivables | (133,142) | 117,720 |
Contract assets | 8,713 | (5,921) |
Prepaid expenses and other | (11,038) | (6,367) |
Accounts payable and outstanding checks | 98,946 | (10,742) |
Accrued compensation | (23,879) | (87,259) |
Accrued transportation expense | (7,294) | 7,331 |
Accrued income taxes | 5,196 | 39,078 |
Other accrued liabilities | 1,829 | 1,801 |
Other assets and liabilities | 884 | 291 |
Net cash provided by operating activities | 58,499 | 256,931 |
INVESTING ACTIVITIES | ||
Purchases of property and equipment | (7,841) | (8,619) |
Purchases and development of software | (6,862) | (5,246) |
Acquisitions, net of cash acquired | (223,617) | (44,143) |
Other investing activities | 0 | 8 |
Net cash used for investing activities | (238,320) | (58,000) |
FINANCING ACTIVITIES | ||
Proceeds from stock issued for employee benefit plans | 11,269 | 19,615 |
Stock tendered for payment of withholding taxes | (13,795) | (12,042) |
Repurchase of common stock | (68,563) | (67,624) |
Cash dividends | (69,871) | (69,742) |
Proceeds from short-term borrowings | 765,600 | 14,000 |
Payments on short-term borrowings | (587,600) | (19,000) |
Net cash used for financing activities | 37,040 | (134,793) |
Effect of exchange rates on cash | (10,505) | 2,720 |
Net change in cash and cash equivalents | (153,286) | 66,858 |
Cash and cash equivalents, beginning of period | 447,858 | 378,615 |
Cash and cash equivalents, end of period | $ 294,572 | $ 445,473 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
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, Oceania, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. Our reportable segments are NAST and Global Forwarding with all other segments included in All Other and Corporate. The All Other and Corporate reportable segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. For financial information concerning our reportable segments, refer to Note 9, Segment Reporting . The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2019. RECENTLY ADOPTED ACCOUNTING STANDARDS In June 2016, the FASB issued ASU (“Accounting Standards Update”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This update changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The update replaces the historical “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash. We adopted this standard on January 1, 2020. We have updated our allowance for credit losses, formerly described as our allowance for doubtful accounts, significant accounting policy below as a result of adopting the new standard. The impact of adoption was not material to our consolidated financial position, results of operations, or cash flows. RECENTLY ISSUED ACCOUNTING STANDARDS In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional practical expedients to simplify accounting for reference rate reform. Amongst other practical expedients, the update allows for contract modifications due to reference rate reform for certain receivables and debt contracts to be accounted for by prospectively adjusting the effective interest rate. The amendments in this ASU are effective for all entities beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effects that adoption of this guidance will have on the consolidated financial statements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2019, includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. We have updated these policies below to effect the adoption of Accounting Standards Codification (“ASC”) 326 in the first quarter of 2020. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS The change in carrying amount of goodwill is as follows (in thousands): NAST Global Forwarding All Other and Corporate Total Balance December 31, 2019 $ 1,015,570 $ 208,420 $ 67,770 $ 1,291,760 Acquisitions 176,397 507 — 176,904 Translation (12,592) (4,222) (851) (17,665) Balance March 31, 2020 $ 1,179,375 $ 204,705 $ 66,919 $ 1,450,999 Goodwill is tested at least annually for impairment on November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units is less than their respective carrying value (“Step Zero Analysis”). If the Step Zero Analysis indicates it is more likely than not that the fair value of our reporting units is less than their respective carrying value, an additional impairment assessment is performed (“Step One Analysis”). We considered whether there were any changes in circumstances indicating that our goodwill might be impaired, including consideration of the impacts of the novel coronavirus (“COVID-19”) on financial markets and our business operations, and determined the more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of March 31, 2020. Identifiable intangible assets consisted of the following (in thousands): March 31, 2020 December 31, 2019 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Finite-lived intangibles Customer relationships $ 282,180 $ (160,642) $ 121,538 $ 237,335 $ (156,879) $ 80,456 Indefinite-lived intangibles Trademarks 10,475 — 10,475 10,475 — 10,475 Total intangibles $ 292,655 $ (160,642) $ 132,013 $ 247,810 $ (156,879) $ 90,931 Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended March 31, 2020 2019 Amortization expense $ 8,376 $ 9,293 Finite-lived intangible assets, by reportable segment, as of March 31, 2020, will be amortized over their remaining lives as follows (in thousands): NAST Global Forwarding All Other and Corporate Total Remaining 2020 $ 6,070 $ 19,111 $ 450 $ 25,631 2021 8,092 13,076 600 21,768 2022 8,092 13,076 600 21,768 2023 8,092 10,969 600 19,661 2024 8,014 3,498 600 12,112 Thereafter 17,024 2,723 851 20,598 Total $ 121,538 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2020 | |
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. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS The components of our short-term and long-term debt and the associated interest rates were as follows (dollars in thousands): Average interest rate as of Carrying value as of March 31, 2020 December 31, 2019 Maturity March 31, 2020 December 31, 2019 Revolving credit facility 1.94 % — % October 2023 $ 71,000 $ — Senior Notes, Series A 3.97 % 3.97 % August 2023 175,000 175,000 Senior Notes, Series B 4.26 % 4.26 % August 2028 150,000 150,000 Senior Notes, Series C 4.60 % 4.60 % August 2033 175,000 175,000 Receivables securitization facility (1) 1.64 % 2.41 % December 2020 249,917 142,885 Senior Notes (1) 4.20 % 4.20 % April 2028 592,660 592,448 Total debt 1,413,577 1,235,333 Less: Current maturities and short-term borrowing (320,917) (142,885) Long-term debt $ 1,092,660 $ 1,092,448 ____________________________________________ (1) Net of unamortized discounts and issuance costs. SENIOR UNSECURED REVOLVING CREDIT FACILITY We have a senior unsecured revolving credit facility (the "Credit Agreement") with a total availability of $1 billion and a maturity date of October 24, 2023. Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of applicable LIBOR plus 1.125 percent. In addition, there is a commitment fee on the average daily undrawn stated amount under each letter of credit issued under the facility ranging from 0.075 percent to 0.200 percent. 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. The Credit Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.50 to 1.00. The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then the administrative agent may declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if we become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the Credit Agreement will automatically become immediately due and payable. NOTE PURCHASE AGREEMENT On August 23, 2013, we entered into a Note Purchase Agreement with certain institutional investors (the “Purchasers”). On August 27, 2013, the Purchasers purchased an aggregate principal amount of $500 million of our Senior Notes, Series A, Senior Notes Series B, and Senior Notes Series C, collectively (the “Notes”). Interest on the Notes is payable semi-annually in arrears. The fair value of the Notes approximated $511.7 million at March 31, 2020. We estimate the fair value of the Notes primarily using an expected present value technique, which is based on observable market inputs using interest rates currently available to companies of similar credit standing for similar terms and remaining maturities, and considering our own risk. If the Notes were recorded at fair value, they would be classified as Level 2. The Note Purchase Agreement contains various restrictions and covenants that require us to maintain certain financial ratios, including a maximum leverage ratio of 3.00 to 1.00, a minimum interest coverage ratio of 2.00 to 1.00, and a maximum consolidated priority debt to consolidated total asset ratio of 15 percent. The Note Purchase Agreement provides for customary events of default. The occurrence of an event of default would permit certain Purchasers to declare certain Notes then outstanding to be immediately due and payable. Under the terms of the Note Purchase Agreement, the Notes are redeemable, in whole or in part, at 100 percent of the principal amount being redeemed together with a “make-whole amount” (as defined in the Note Purchase Agreement), and accrued and unpaid interest with respect to each Note. The obligations of the company under the Note Purchase Agreement and the Notes are guaranteed by C.H. Robinson Company, a Delaware corporation and a wholly-owned subsidiary of the company, and by C.H. Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company. U.S. TRADE ACCOUNTS RECEIVABLE SECURITIZATION We have a receivables securitization facility (the “Receivables Securitization Facility”) that currently expires on December 17, 2020, unless extended by the parties. The Receivables Securitization Facility is based on the securitization of certain of our U.S. trade accounts receivable and provides funding of up to $250 million. The interest rate on borrowings under the Receivables Securitization Facility is based on one-month LIBOR plus 0.65 percent. There is also a commitment fee we are required to pay on any unused portion of the facility. The recorded amount of borrowings outstanding on the Receivables Securitization Facility approximates fair value because it can be redeemed on short notice and the interest rate floats, therefore, we consider these borrowings to be a Level 2 financial liability. The Receivables Securitization Facility contains various customary affirmative and negative covenants, and it also contains customary default and termination provisions which provide for acceleration of amounts owed under the Receivables Securitization Facility upon the occurrence of certain specified events. SENIOR NOTES On April 9, 2018, we issued senior unsecured notes ("Senior Notes") through a public offering. The Senior Notes bear an annual interest rate of 4.20 percent payable semi-annually on April 15 and October 15, until maturity on April 15, 2028. Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the Senior Notes have an effective yield to maturity of approximately 4.39 percent per annum. The fair value of the Senior Notes, excluding debt discounts and issuance costs, approximated $648.5 million as of March 31, 2020, based primarily on the market prices quoted from external sources. The carrying value of the Senior Notes was $592.7 million as of March 31, 2020. If the Senior Notes were measured at fair value in the financial statements, they would be classified as Level 2 in the fair value hierarchy. We may redeem the Senior Notes, in whole or in part, at any time and from time to time prior to their maturity at the applicable redemption prices described in the Senior Notes. Upon the occurrence of a “change of control triggering event” as defined in the Senior Notes (generally, a change of control of us accompanied by a reduction in the credit rating for the Senior Notes), we will generally be required to make an offer to repurchase the Senior Notes from holders at 101 percent of their principal amount plus accrued and unpaid interest to the date of repurchase. The Senior Notes were issued under an indenture that contains covenants imposing certain limitations on our ability to incur liens, enter into sales and leaseback transactions and consolidate, or merge or transfer substantially all of our assets and those of our subsidiaries on a consolidated basis. It also provides for customary events of default (subject in certain cases to customary grace and cure periods), which include among other things nonpayment, breach of covenants in the indenture, and certain events of bankruptcy and insolvency. If an event of default occurs and is continuing with respect to the Senior Notes, the trustee or holders of at least 25 percent in principal amount outstanding of the Senior Notes may declare the principal and the accrued and unpaid interest, if any, on all of the outstanding Senior Notes to be due and payable. These covenants and events of default are subject to a number of important qualifications, limitations, and exceptions that are described in the indenture. The indenture does not contain any financial ratios or specified levels of net worth or liquidity to which we must adhere. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate for the three months ended March 31, 2020, and 2019 was 17.1 percent and 22.0 percent, respectively. The effective income tax rate for the three months ended March 31, 2020, was lower than the statutory federal income tax rate primarily due to the tax impact of share-based payment awards, which reduced the effective tax rate by 3.6 percentage points, and foreign tax impacts recorded in the three months ended March 31, 2020. In 2019 we removed our assertion that the unremitted earnings of foreign subsidiaries were permanently reinvested with limited exceptions. If we repatriated all foreign earnings that are still considered to be permanently reinvested, the estimated effect on income taxes payable would be an increase of approximately $3.9 million as of March 31, 2020. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). This law included provisions which may benefit us in two primary ways. First, the CARES Act allows for a deferral of the employer share of federal payroll taxes otherwise due through December 31, 2020. 50 percent of the deferred amount is due December 31, 2021 and the remaining 50 percent is due December 31, 2022. This provision allows us to defer certain federal payroll deposits and invest this cash back into our business without any interest cost. We are in the process of determining the amount of cash to be made available as a result of this provision. Second, the CARES Act provides for a tax credit of up to $5,000 related to wages and health benefits provided to an employee whose work from March 17, 2020 through December 31, 2020 was impacted by COVID-19. We are in the process of determining the amount of any such credit. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code, including but not limited to, reducing the U.S. federal corporate tax rate from 35 percent to 21 percent and requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries and adding new rules for Global Intangible Low-tax Income (“GILTI”) and Foreign Derived Intangible Income (“FDII”). Although enacted more than two years ago, regulatory guidance on the application of FDII has not been finalized. We have included the tax impact of both GILTI and FDII in our income tax expense for the three months ended March 31, 2020, and 2019, based on our understanding of the rules available at the time of this filing. However, our calculations could be impacted by future regulations as guidance is finalized. We will continue to monitor any new guidance related to FDII and determine any impact it may have on our calculations. |
STOCK AWARD PLANS
STOCK AWARD PLANS | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [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, 2020 2019 Stock options $ 5,013 $ 4,249 Stock awards 5,403 11,744 Company expense on ESPP discount 981 1,130 Total stock-based compensation expense $ 11,397 $ 17,123 On May 9, 2019, our shareholders approved an amendment and restatement of our 2013 Equity Incentive Plan (the “Plan”) to increase the number of shares authorized for award by 4,000,000 shares. The Plan allows us to grant certain stock awards, including stock options at fair market value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 17,041,803 shares can be granted under this plan following the amendment and restatement. Approximately 2,940,625 shares were available for stock awards under the plan as of March 31, 2020. Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan. Stock Options - We have awarded stock options to certain key employees. 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, 2020, unrecognized compensation expense related to stock options was $58.3 million. The amount of future expense to be recognized will be based on the passage of time and the employees' continued employment. We granted 1,660,548 stock options on February 5, 2020. These awards had a weighted average exercise price of $72.74 and a weighted average grant date fair value of $13.88. These awards will vest over a five Stock Awards - We have awarded performance-based restricted shares and restricted stock units and time-based restricted stock units to certain key employees and non-employee directors. Performance-based awards are subject to certain vesting requirements over a five We granted 405,776 performance-based restricted shares and restricted stock units and 329,586 time-based restricted shares and restricted stock units on February 5, 2020. These awards had a weighted average grant date fair value of $59.34 and will vest over a five We have also issued restricted stock units to certain key employees and non-employee directors, 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, 2020, there was unrecognized compensation expense of $136.4 million related to previously granted full value awards. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and certain other conditions. 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: Three Months Ended March 31, 2020 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 98,839 $ 5,561,671 $ 981,471 |
LITIGATION
LITIGATION | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION | LITIGATIONWe are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our condensed consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Prime Distribution Services On March 2, 2020, we acquired all of the outstanding shares of Prime Distribution Services (“Prime Distribution”), a leading provider of retail consolidation services in North America for $223.1 million in cash. This acquisition adds scale and value-added warehouse capabilities to our retail consolidation platform, adding to our global suite of services. The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the acquisition of Prime Distribution. Current assets $ 8,197 Property and equipment 7,356 Right-of-use lease assets 35,017 Other intangible assets 55,000 Goodwill 176,397 Total assets 281,967 Current liabilities 10,470 Lease liabilities 35,017 Deferred tax liabilities 13,375 Net assets acquired $ 223,105 Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 55,000 There was $176.4 million of goodwill recorded related to the acquisition of Prime Distribution. The Prime Distribution goodwill is a result of acquiring and retaining the Prime Distribution workforce and expected synergies from integrating its business into ours. Purchase accounting is considered preliminary, subject to revision primarily related to certain potential post-closing and working capital adjustments, as final information was not available as of March 31, 2020. The goodwill will not be deductible for tax purposes. The acquisition was effective as of February 29, 2020, and therefore the results of operations of Prime Distribution have been included as part of the North American Surface Transportation segment in our consolidated financial statements since March 1, 2020. Dema Service S.p.A On May 22, 2019, we acquired all of the outstanding shares of Dema Service S.p.A. (“Dema Service”) to strengthen our existing footprint in Italy. Total purchase consideration, net of cash acquired was $14.2 million, which was paid in cash. Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 4,252 There was $7.8 million of goodwill recorded related to the acquisition of Dema Service. The Dema Service goodwill is a result of acquiring and retaining the Dema Service workforce and expected synergies from integrating its business into ours. Purchase accounting is considered complete. No goodwill was recognized for Italian tax purposes from the acquisition. Th e results of operations of Dema Service have been included as part of the All Other and Corporate segment in our consolidated financial statements since May 23, 2019. The Space Cargo Group On February 28, 2019, we acquired all of the outstanding shares of The Space Cargo Group (“Space Cargo”) for the purpose of expanding our presence and capabilities in Spain and Colombia. Total purchase consideration, net of cash acquired, was $45.5 million, which was paid in cash. Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 16,439 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2020 | |
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. We identify two reportable segments in addition to All Other and Corporate as summarized below: • North American Surface Transportation— NAST provides freight transportation services across North America through a network of offices in the United States, Canada, and Mexico. The primary services provided by NAST include truckload, less than truckload (“LTL”), and intermodal. • Global Forwarding— Global Forwarding provides global logistics services through an international network of offices in North America, Asia, Europe, Oceania, and South America and also contracts with independent agents worldwide. The primary services provided by Global Forwarding include ocean freight services, airfreight services, and customs brokerage. • All Other and Corporate— All Other and Corporate includes our Robinson Fresh and Managed Services segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses. Robinson Fresh provides sourcing services including the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items. Managed Services provides Transportation Management Services, or Managed TMS ® . Other Surface Transportation revenues are primarily earned by Europe Surface Transportation. Europe Surface Transportation provides services similar to NAST across Europe. The internal reporting of segments is defined, based in part, on the reporting and review process used by our chief operating decision maker (“CODM”), our Chief Executive Officer. The accounting policies of our reportable segments are the same as those described in the summary of significant accounting policies. We do not report our intersegment revenues by reportable segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments. Reportable segment information as of, and for the three months ended March 31, 2020, and 2019, is as follows (dollars in thousands): NAST Global Forwarding All Other and Corporate Consolidated Three Months Ended March 31, 2020 Total revenues $ 2,823,745 $ 530,384 $ 450,879 $ 3,805,008 Net revenues 372,778 128,314 66,861 567,953 Income (loss) from operations 98,526 11,959 (1,045) 109,440 Depreciation and amortization 5,254 9,149 9,990 24,393 Total assets (1) 2,942,719 934,625 970,976 4,848,320 Average headcount 7,038 4,824 3,588 15,450 NAST Global Forwarding All Other and Corporate Consolidated Three Months Ended March 31, 2019 Total revenues $ 2,796,784 $ 537,567 $ 416,859 $ 3,751,210 Net revenues 486,550 127,236 65,014 678,800 Income (loss) from operations 211,283 14,203 (936) 224,550 Depreciation and amortization 6,259 8,926 9,375 24,560 Total assets (1) 2,693,668 1,001,881 1,001,895 4,697,444 Average headcount 7,424 4,707 3,250 15,381 _________________________________________ |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 NAST Global Forwarding All Other and Corporate Total Major Service Lines Transportation and logistics services (1) $ 2,823,745 $ 530,384 $ 187,989 $ 3,542,118 Sourcing (2) — — 262,890 262,890 Total $ 2,823,745 $ 530,384 $ 450,879 $ 3,805,008 Three Months Ended March 31, 2019 NAST Global Forwarding All Other and Corporate Total Major Service Lines Transportation and logistics services (1) $ 2,796,784 $ 537,567 $ 170,581 $ 3,504,932 Sourcing (2) — — 246,278 246,278 Total $ 2,796,784 $ 537,567 $ 416,859 $ 3,751,210 ____________________________________________ (1) Transportation and logistics services performance obligations are completed over time. (2) Sourcing performance obligations are completed at a point in time. We typically do not receive consideration and amounts are not due from our customer prior to the completion of our performance obligation and as such contract liabilities as of March 31, 2020, and revenue recognized in the three months ended March 31, 2020 and 2019 resulting from contract liabilities was not significant. Contract assets and accrued expenses-transportation expense fluctuate from period to period primarily based upon shipments in-transit at period end. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES We determine if our contractual agreements contain a lease at inception. A lease is identified when a contract allows us the right to control an identified asset for a period of time in exchange for consideration. Our lease agreements consist primarily of operating leases for office space, warehouses, office equipment, and a small number of intermodal containers. We do not have material financing leases. Frequently, we enter into contractual relationships with a wide variety of transportation companies for freight capacity, and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight. These contracts typically have a term of 12 months or less and do not allow us to direct the use or obtain substantially all of the economic benefits of a specifically identified asset. Accordingly, these agreements are not considered leases. In addition, we have made a policy election to not apply the guidance of ASC 842 to leases with a term of 12 months or less as allowed by the standard. These leases are recognized as expense on a straight-line basis over the lease term. Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities. A right-of-use lease asset represents our right to use an underlying asset over the term of a lease while a lease liability represents our obligation to make lease payments arising from the lease. Current and noncurrent lease liabilities are recognized at commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance charges. Right-of-use lease assets are also recognized at commencement date as the total lease liability plus prepaid rents and less any deferred rent liability that existed under ASC 840, Leases, upon transition. As most of our leases do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is influenced by our credit rating and lease term and as such may differ for individual leases. Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants. Many of our leases include the option to renew for a period of months to several years. The term of our leases may include the option to renew when it is reasonably certain that we will exercise that option although these occurrences are seldom. We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component. We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of March 31, 2020. Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of March 31, 2020, and for the three months ended March 31, 2020 (dollars in thousands): Lease Costs Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating lease expense $ 19,974 $ 16,822 Short-term lease expense 2,572 2,341 Total lease expense $ 22,546 $ 19,163 Other Lease Information Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating cash flows from operating leases $ 19,112 $ 16,629 Right-of-use lease assets obtained in exchange for new lease liabilities 60,281 7,732 Lease Term and Discount Rate As of Weighted average remaining lease term (in years) (1) 7.2 Weighted average discount rate 3.3 % ____________________________________________ (1) The weighted average remaining lease term is significantly impacted by a 15-year lease related to office space in Chicago, IL, that commenced in 2018. Excluding this lease, the weighted average remaining lease term of our agreements is 4.9 years. The maturity of lease liabilities as of March 31, 2020, were as follows (in thousands): Maturity of Lease Liabilities Operating Leases Remaining 2020 $ 61,390 2021 74,485 2022 62,947 2023 49,726 2024 32,536 Thereafter 123,925 Total lease payments 405,009 Less: Interest (48,376) Present value of lease liabilities $ 356,633 |
ALLOWANCE FOR CREDIT LOSSES
ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES We adopted ASU 2016-13, Financial Instruments (Topic 326), as of January 1, 2020. Prior period information was not restated and continues to be presented under guidance effective for those periods. Topic 326 changes how entities measure credit losses for certain financial assets including accounts receivable by replacing the historical “incurred loss” approach with an “expected loss” model. We have updated our significant accounting policy for allowance for credit losses as discussed in Note 1, Basis of Presentation . Our allowance for credit losses is computed using a number of factors including our past credit loss experience, the aging of amounts due from our customers, our customers' credit ratings, in addition to other customer specific factors. We have also assessed the current macroeconomic environment, including the impact of COVID-19, to determine our ending allowance for credit losses for both accounts receivable and contract assets. The allowance for credit losses on contract assets was not significant. A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the three months ended March 31, 2020: Balance, December 31, 2019 $ 32,838 Provision 5,072 Write-offs (5,438) Balance, March 31, 2020 $ 32,472 |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSSAccumulated other comprehensive loss is included in Stockholders' investment on our condensed consolidated balance sheets. The recorded balance at March 31, 2020, and December 31, 2019, was $108.3 million and $76.1 million, respectively. Accumulated other comprehensive loss is comprised solely of foreign currency adjustments, net of related income tax effects at March 31, 2020, and December 31, 2019. Other comprehensive loss was $32.2 million for the three months ended March 31, 2020, which consisted of foreign currency adjustments, including foreign currency translation, net of related income tax effects of $1.5 million. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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, Oceania, and South America. The consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc., and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements. Our reportable segments are NAST and Global Forwarding with all other segments included in All Other and Corporate. The All Other and Corporate reportable segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses. For financial information concerning our reportable segments, refer to Note 9, Segment Reporting . The condensed consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Consistent with SEC rules and regulations, we have condensed or omitted certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States. You should read the condensed consolidated financial statements and related notes in conjunction with the consolidated financial statements and notes in our Annual Report on Form 10-K for the year ended December 31, 2019. |
RECENTLY ADOPTED AND ISSUED ACCOUNTING STANDARDS | RECENTLY ADOPTED ACCOUNTING STANDARDS In June 2016, the FASB issued ASU (“Accounting Standards Update”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses . This update changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The update replaces the historical “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. The update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash. We adopted this standard on January 1, 2020. We have updated our allowance for credit losses, formerly described as our allowance for doubtful accounts, significant accounting policy below as a result of adopting the new standard. The impact of adoption was not material to our consolidated financial position, results of operations, or cash flows. RECENTLY ISSUED ACCOUNTING STANDARDS In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting which provides optional practical expedients to simplify accounting for reference rate reform. Amongst other practical expedients, the update allows for contract modifications due to reference rate reform for certain receivables and debt contracts to be accounted for by prospectively adjusting the effective interest rate. The amendments in this ASU are effective for all entities beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effects that adoption of this guidance will have on the consolidated financial statements. |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES. Accounts receivable and contract assets are reduced by an allowance for expected credit losses. We determine our allowance for expected credit losses by evaluating two approaches that consider our past credit loss experience, our customers' credit ratings, and other customer specific and macroeconomic factors. The first approach is pooling our customers by credit rating and applying an expected loss ratio based upon credit rating and number of days the receivable has been outstanding, (i.e. aging approach). The second approach is to compute an expected loss ratio for each credit rating pool based upon our historical write-off experience and apply it to our accounts receivable, (i.e. loss ratio approach). These two approaches are evaluated in consideration of other known information and customer specific and macroeconomic factors, including the price of diesel fuel, for purposes of determining the expected credit loss allowance. |
GOODWILL | Goodwill is tested at least annually for impairment on November 30, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We first perform a qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units is less than their respective carrying value (“Step Zero Analysis”). If the Step Zero Analysis indicates it is more likely than not that the fair value of our reporting units is less than their respective carrying value, an additional impairment assessment is performed (“Step One Analysis”). We considered whether there were any changes in circumstances indicating that our goodwill might be impaired, including consideration of the impacts of the novel coronavirus (“COVID-19”) on financial markets and our business operations, and determined the more likely than not criteria had not been met, and therefore a Step One Analysis was not required as of March 31, 2020. |
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 INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in carrying amount of goodwill is as follows (in thousands): NAST Global Forwarding All Other and Corporate Total Balance December 31, 2019 $ 1,015,570 $ 208,420 $ 67,770 $ 1,291,760 Acquisitions 176,397 507 — 176,904 Translation (12,592) (4,222) (851) (17,665) Balance March 31, 2020 $ 1,179,375 $ 204,705 $ 66,919 $ 1,450,999 |
Schedule of Intangible Assets | Identifiable intangible assets consisted of the following (in thousands): March 31, 2020 December 31, 2019 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Finite-lived intangibles Customer relationships $ 282,180 $ (160,642) $ 121,538 $ 237,335 $ (156,879) $ 80,456 Indefinite-lived intangibles Trademarks 10,475 — 10,475 10,475 — 10,475 Total intangibles $ 292,655 $ (160,642) $ 132,013 $ 247,810 $ (156,879) $ 90,931 |
Schedule of Amortization Expense | Amortization expense for other intangible assets is as follows (in thousands): Three Months Ended March 31, 2020 2019 Amortization expense $ 8,376 $ 9,293 |
Schedule of Future Amortization of Finite-Lived Intangible Assets | Finite-lived intangible assets, by reportable segment, as of March 31, 2020, will be amortized over their remaining lives as follows (in thousands): NAST Global Forwarding All Other and Corporate Total Remaining 2020 $ 6,070 $ 19,111 $ 450 $ 25,631 2021 8,092 13,076 600 21,768 2022 8,092 13,076 600 21,768 2023 8,092 10,969 600 19,661 2024 8,014 3,498 600 12,112 Thereafter 17,024 2,723 851 20,598 Total $ 121,538 |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Components of Short-term and Long-term Debt | The components of our short-term and long-term debt and the associated interest rates were as follows (dollars in thousands): Average interest rate as of Carrying value as of March 31, 2020 December 31, 2019 Maturity March 31, 2020 December 31, 2019 Revolving credit facility 1.94 % — % October 2023 $ 71,000 $ — Senior Notes, Series A 3.97 % 3.97 % August 2023 175,000 175,000 Senior Notes, Series B 4.26 % 4.26 % August 2028 150,000 150,000 Senior Notes, Series C 4.60 % 4.60 % August 2033 175,000 175,000 Receivables securitization facility (1) 1.64 % 2.41 % December 2020 249,917 142,885 Senior Notes (1) 4.20 % 4.20 % April 2028 592,660 592,448 Total debt 1,413,577 1,235,333 Less: Current maturities and short-term borrowing (320,917) (142,885) Long-term debt $ 1,092,660 $ 1,092,448 ____________________________________________ (1) Net of unamortized discounts and issuance costs. |
STOCK AWARD PLANS (Tables)
STOCK AWARD PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation | 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, 2020 2019 Stock options $ 5,013 $ 4,249 Stock awards 5,403 11,744 Company expense on ESPP discount 981 1,130 Total stock-based compensation expense $ 11,397 $ 17,123 |
Schedule Employee Stock Purchase Plan Activity | The following is a summary of the employee stock purchase plan activity: Three Months Ended March 31, 2020 Shares purchased by employees Aggregate cost to employees Expense recognized by the company 98,839 $ 5,561,671 $ 981,471 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Acquisition [Line Items] | |
Schedule of Allocation of Purchase Consideration to Estimated Fair Value of Net Assets | The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for the acquisition of Prime Distribution. Current assets $ 8,197 Property and equipment 7,356 Right-of-use lease assets 35,017 Other intangible assets 55,000 Goodwill 176,397 Total assets 281,967 Current liabilities 10,470 Lease liabilities 35,017 Deferred tax liabilities 13,375 Net assets acquired $ 223,105 |
Prime Distribution Services | |
Business Acquisition [Line Items] | |
Schedule of Identifiable Intangible Assets and Estimated Useful Lives | Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 55,000 |
Dema Service | |
Business Acquisition [Line Items] | |
Schedule of Identifiable Intangible Assets and Estimated Useful Lives | Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 4,252 |
Space Cargo | |
Business Acquisition [Line Items] | |
Schedule of Identifiable Intangible Assets and Estimated Useful Lives | Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships 7 $ 16,439 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Reportable segment information as of, and for the three months ended March 31, 2020, and 2019, is as follows (dollars in thousands): NAST Global Forwarding All Other and Corporate Consolidated Three Months Ended March 31, 2020 Total revenues $ 2,823,745 $ 530,384 $ 450,879 $ 3,805,008 Net revenues 372,778 128,314 66,861 567,953 Income (loss) from operations 98,526 11,959 (1,045) 109,440 Depreciation and amortization 5,254 9,149 9,990 24,393 Total assets (1) 2,942,719 934,625 970,976 4,848,320 Average headcount 7,038 4,824 3,588 15,450 NAST Global Forwarding All Other and Corporate Consolidated Three Months Ended March 31, 2019 Total revenues $ 2,796,784 $ 537,567 $ 416,859 $ 3,751,210 Net revenues 486,550 127,236 65,014 678,800 Income (loss) from operations 211,283 14,203 (936) 224,550 Depreciation and amortization 6,259 8,926 9,375 24,560 Total assets (1) 2,693,668 1,001,881 1,001,895 4,697,444 Average headcount 7,424 4,707 3,250 15,381 _________________________________________ |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Total Revenues Disaggregated by Major Service Line and Timing of Revenue Recognition | A summary of our total revenues disaggregated by major service line and timing of revenue recognition is presented below for each of our reportable segments for the three months ended March 31, 2020 and 2019 (in thousands): Three Months Ended March 31, 2020 NAST Global Forwarding All Other and Corporate Total Major Service Lines Transportation and logistics services (1) $ 2,823,745 $ 530,384 $ 187,989 $ 3,542,118 Sourcing (2) — — 262,890 262,890 Total $ 2,823,745 $ 530,384 $ 450,879 $ 3,805,008 Three Months Ended March 31, 2019 NAST Global Forwarding All Other and Corporate Total Major Service Lines Transportation and logistics services (1) $ 2,796,784 $ 537,567 $ 170,581 $ 3,504,932 Sourcing (2) — — 246,278 246,278 Total $ 2,796,784 $ 537,567 $ 416,859 $ 3,751,210 ____________________________________________ (1) Transportation and logistics services performance obligations are completed over time. (2) Sourcing performance obligations are completed at a point in time. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Expense, Remaining Lease Terms, Discount Rate and Other Information | Information regarding lease expense, remaining lease term, discount rate, and other select lease information is presented below as of March 31, 2020, and for the three months ended March 31, 2020 (dollars in thousands): Lease Costs Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating lease expense $ 19,974 $ 16,822 Short-term lease expense 2,572 2,341 Total lease expense $ 22,546 $ 19,163 Other Lease Information Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Operating cash flows from operating leases $ 19,112 $ 16,629 Right-of-use lease assets obtained in exchange for new lease liabilities 60,281 7,732 Lease Term and Discount Rate As of Weighted average remaining lease term (in years) (1) 7.2 Weighted average discount rate 3.3 % ____________________________________________ |
Schedule of Maturity of Lease Liabilities | The maturity of lease liabilities as of March 31, 2020, were as follows (in thousands): Maturity of Lease Liabilities Operating Leases Remaining 2020 $ 61,390 2021 74,485 2022 62,947 2023 49,726 2024 32,536 Thereafter 123,925 Total lease payments 405,009 Less: Interest (48,376) Present value of lease liabilities $ 356,633 |
ALLOWANCE FOR CREDIT LOSSES (Ta
ALLOWANCE FOR CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Schedule of Allowance for Credit Loss on Accounts Receivable | A rollforward of our allowance for credit losses on our accounts receivable balance is presented below for the three months ended March 31, 2020: Balance, December 31, 2019 $ 32,838 Provision 5,072 Write-offs (5,438) Balance, March 31, 2020 $ 32,472 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 1,291,760 |
Acquisitions | 176,904 |
Translation | (17,665) |
Balance, end of period | 1,450,999 |
NAST | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 1,015,570 |
Acquisitions | 176,397 |
Translation | (12,592) |
Balance, end of period | 1,179,375 |
Global Forwarding | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 208,420 |
Acquisitions | 507 |
Translation | (4,222) |
Balance, end of period | 204,705 |
All Other and Corporate | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 67,770 |
Acquisitions | 0 |
Translation | (851) |
Balance, end of period | $ 66,919 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-lived intangibles | ||
Accumulated Amortization | $ (160,642) | $ (156,879) |
Finite-lived intangible assets, net | 121,538 | |
Indefinite-lived intangibles | ||
Total intangibles, Cost | 292,655 | 247,810 |
Total intangibles, Net | 132,013 | 90,931 |
Trademarks | ||
Indefinite-lived intangibles | ||
Indefinite-lived intangibles | 10,475 | 10,475 |
Customer relationships | ||
Finite-lived intangibles | ||
Finite-lived intangibles, Cost | 282,180 | 237,335 |
Accumulated Amortization | (160,642) | (156,879) |
Finite-lived intangible assets, net | $ 121,538 | $ 80,456 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 8,376 | $ 9,293 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Over Remaining Life (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Estimated amortization expense | |
Remaining 2020 | $ 25,631 |
2021 | 21,768 |
2022 | 21,768 |
2023 | 19,661 |
2024 | 12,112 |
Thereafter | 20,598 |
Finite-lived intangible assets, net | 121,538 |
NAST | |
Estimated amortization expense | |
Remaining 2020 | 6,070 |
2021 | 8,092 |
2022 | 8,092 |
2023 | 8,092 |
2024 | 8,014 |
Thereafter | 17,024 |
Global Forwarding | |
Estimated amortization expense | |
Remaining 2020 | 19,111 |
2021 | 13,076 |
2022 | 13,076 |
2023 | 10,969 |
2024 | 3,498 |
Thereafter | 2,723 |
All Other and Corporate | |
Estimated amortization expense | |
Remaining 2020 | 450 |
2021 | 600 |
2022 | 600 |
2023 | 600 |
2024 | 600 |
Thereafter | $ 851 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - Level 3 - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Level 3 Fair Value | ||
Assets at fair value | $ 0 | $ 0 |
Liabilities at fair value | $ 0 | $ 0 |
FINANCING ARRANGEMENTS - Compon
FINANCING ARRANGEMENTS - Components of Short-term and Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,413,577 | $ 1,235,333 |
Less: Current maturities and short-term borrowing | (320,917) | (142,885) |
Long-term debt | $ 1,092,660 | $ 1,092,448 |
Line of Credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 1.94% | 0.00% |
Total debt | $ 71,000 | $ 0 |
Senior Notes | Senior Notes, Series A | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 3.97% | 3.97% |
Total debt | $ 175,000 | $ 175,000 |
Senior Notes | Senior Notes, Series B | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 4.26% | 4.26% |
Total debt | $ 150,000 | $ 150,000 |
Senior Notes | Senior Notes, Series C | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 4.60% | 4.60% |
Total debt | $ 175,000 | $ 175,000 |
Secured Debt | Receivables securitization facility | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 1.64% | 2.41% |
Total debt | $ 249,917 | $ 142,885 |
Unsecured Debt | Senior Notes | ||
Debt Instrument [Line Items] | ||
Average interest rate (percent) | 4.20% | 4.20% |
Total debt | $ 592,660 | $ 592,448 |
FINANCING ARRANGEMENTS - Narrat
FINANCING ARRANGEMENTS - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Aug. 27, 2013USD ($) | |
Debt Instrument [Line Items] | |||
Long-term debt, fair value | $ 511,700,000 | ||
Long-term debt | 1,413,577,000 | $ 1,235,333,000 | |
Line of Credit | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 1,000,000,000 | ||
Maximum leverage ratio | 3.50 | ||
Long-term debt | $ 71,000,000 | 0 | |
Line of Credit | Revolving credit facility | Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 0.50% | ||
Line of Credit | Revolving credit facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 1.125% | ||
Line of Credit | Revolving credit facility | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee (percent) | 0.075% | ||
Line of Credit | Revolving credit facility | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee (percent) | 0.20% | ||
Unsecured Debt | Senior Notes Due 2028 | |||
Debt Instrument [Line Items] | |||
Long-term debt, fair value | $ 648,500,000 | ||
Debt instrument, redemption price (percent) | 101.00% | ||
Debt instrument, annual interest rate (percent) | 4.20% | ||
Debt instrument, effective yield (percent) | 4.39% | ||
Long-term debt | $ 592,660,000 | 592,448,000 | |
Threshold for holders of principal outstanding to declare principal and unpaid interest payable (percent) | 25.00% | ||
Senior Notes | Note Purchase Agreement | |||
Debt Instrument [Line Items] | |||
Maximum leverage ratio | 3 | ||
Minimum interest coverage ratio | 2 | ||
Debt instrument principal amount | $ 500,000,000 | ||
Maximum priority debt to total assets ratio (percent) | 15.00% | ||
Debt instrument, redemption price (percent) | 100.00% | ||
Secured Debt | Receivables Securitization Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 250,000,000 | ||
Long-term debt | $ 249,917,000 | $ 142,885,000 | |
Secured Debt | Receivables Securitization Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (percent) | 0.65% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax (percent) | 17.10% | 22.00% |
Effective income tax reduction due to tax impact of share-based awards (percent) | 3.60% | |
Estimated increase in income taxes payable if all foreign earnings were repatriated | $ 3.9 | |
Unrecognized tax benefits and related interest and penalties, all of which would affect our effective tax rate if recognized | 38.6 | |
Decrease in unrecognized tax benefits due to lapse of statute of limitations | $ 2.5 |
STOCK AWARD PLANS - Total Compe
STOCK AWARD PLANS - Total Compensation Expense Recognized (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 11,397,000 | $ 17,123,000 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 5,013,000 | 4,249,000 |
Stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 5,403,000 | 11,744,000 |
Company expense on ESPP discount | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 981,471 | $ 1,130,000 |
STOCK AWARD PLANS - Narrative (
STOCK AWARD PLANS - Narrative (Details) - USD ($) | Feb. 05, 2020 | May 09, 2019 | Mar. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of additional shares authorized (shares) | 4,000,000 | ||
Maximum shares that can be granted under stock plan (shares) | 17,041,803 | ||
Shares available for stock awards (shares) | 2,940,625 | ||
Stock options granted (shares) | 1,660,548 | ||
Weighted average exercise price (in dollars per share) | $ 72.74 | ||
Weighted average grant date fair value (in dollars per share) | $ 13.88 | ||
1997 Employee Stock Purchase Plan 1997 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum employee contribution to purchase company stock | $ 10,000 | ||
Discount rate used to determine the purchase price | 15.00% | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 58,300,000 | ||
Award vesting period | 5 years | ||
Stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 136,400,000 | ||
Award vesting period | 5 years | ||
Weighted average grant date fair value (in dollars per share) | $ 59.34 | ||
Stock awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discount on outstanding grants (percent) | 12.00% | ||
Stock awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discount on outstanding grants (percent) | 22.00% | ||
Performance-based restricted stock and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years | ||
Stock awards granted (shares) | 405,776 | ||
Time-based restricted stock and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock awards granted (shares) | 329,586 |
STOCK AWARD PLANS - Employee St
STOCK AWARD PLANS - Employee Stock Purchase Plan Activity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares purchased by employees (shares) | 98,839 | |
Aggregate cost to employees | $ 5,561,671 | |
Expense recognized by the company | 11,397,000 | $ 17,123,000 |
Company expense on ESPP discount | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expense recognized by the company | $ 981,471 | $ 1,130,000 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands | Mar. 02, 2020 | May 22, 2019 | Feb. 28, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Business Acquisition [Line Items] | |||||
Total purchase consideration net of cash acquired | $ 223,617 | $ 44,143 | |||
Goodwill recorded in acquisition | $ 176,904 | ||||
Prime Distribution Services | |||||
Business Acquisition [Line Items] | |||||
Cash consideration for acquisition | $ 223,100 | ||||
Goodwill recorded in acquisition | $ 176,400 | ||||
Dema Service | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration net of cash acquired | $ 14,200 | ||||
Goodwill recorded in acquisition | $ 7,800 | ||||
Space Cargo | |||||
Business Acquisition [Line Items] | |||||
Total purchase consideration net of cash acquired | $ 45,500 | ||||
Goodwill recorded in acquisition | $ 26,400 |
ACQUISITIONS - Allocation of Pu
ACQUISITIONS - Allocation of Purchase Consideration (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 02, 2020 | Dec. 31, 2019 |
Allocation of Purchase Consideration | |||
Goodwill | $ 1,450,999 | $ 1,291,760 | |
Prime Distribution Services | |||
Allocation of Purchase Consideration | |||
Current assets | $ 8,197 | ||
Property and equipment | 7,356 | ||
Right-of-use lease assets | 35,017 | ||
Other intangible assets | 55,000 | ||
Goodwill | 176,397 | ||
Total assets | 281,967 | ||
Current liabilities | 10,470 | ||
Lease liabilities | 35,017 | ||
Deferred tax liabilities | 13,375 | ||
Net assets acquired | $ 223,105 |
ACQUISITIONS - Identifiable Int
ACQUISITIONS - Identifiable Intangible Assets and Estimated Useful Lives (Details) - USD ($) $ in Thousands | Mar. 02, 2020 | May 22, 2019 | Feb. 28, 2019 |
Prime Distribution Services | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 55,000 | ||
Customer relationships | Prime Distribution Services | |||
Business Acquisition [Line Items] | |||
Estimated life (years) | 7 years | ||
Identifiable intangible assets | $ 55,000 | ||
Customer relationships | Dema Service | |||
Business Acquisition [Line Items] | |||
Estimated life (years) | 7 years | ||
Identifiable intangible assets | $ 4,252 | ||
Customer relationships | Space Cargo | |||
Business Acquisition [Line Items] | |||
Estimated life (years) | 7 years | ||
Identifiable intangible assets | $ 16,439 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (segment) | 2 |
SEGMENT REPORTING - Reportable
SEGMENT REPORTING - Reportable Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)employee | Mar. 31, 2019USD ($)employee | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Total revenues | $ 3,805,008 | $ 3,751,210 | |
Net revenues | 567,953 | 678,800 | |
Income (loss) from operations | 109,440 | 224,550 | |
Depreciation and amortization | 24,393 | 24,560 | |
Total assets | $ 4,848,320 | $ 4,697,444 | $ 4,641,060 |
Average headcount (employee) | employee | 15,450 | 15,381 | |
Operating Segments | NAST | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 2,823,745 | $ 2,796,784 | |
Net revenues | 372,778 | 486,550 | |
Income (loss) from operations | 98,526 | 211,283 | |
Depreciation and amortization | 5,254 | 6,259 | |
Total assets | $ 2,942,719 | $ 2,693,668 | |
Average headcount (employee) | employee | 7,038 | 7,424 | |
Operating Segments | Global Forwarding | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 530,384 | $ 537,567 | |
Net revenues | 128,314 | 127,236 | |
Income (loss) from operations | 11,959 | 14,203 | |
Depreciation and amortization | 9,149 | 8,926 | |
Total assets | $ 934,625 | $ 1,001,881 | |
Average headcount (employee) | employee | 4,824 | 4,707 | |
Operating Segments | All Other and Corporate | |||
Segment Reporting Information [Line Items] | |||
Total revenues | $ 450,879 | $ 416,859 | |
Net revenues | 66,861 | 65,014 | |
Income (loss) from operations | (1,045) | (936) | |
Depreciation and amortization | 9,990 | 9,375 | |
Total assets | $ 970,976 | $ 1,001,895 | |
Average headcount (employee) | employee | 3,588 | 3,250 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Total Revenues Disaggregated by Major Service Line and Timing of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 3,805,008 | $ 3,751,210 |
Operating Segments | NAST | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,823,745 | 2,796,784 |
Operating Segments | Global Forwarding | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 530,384 | 537,567 |
Operating Segments | All Other and Corporate | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 450,879 | 416,859 |
Transportation and logistics services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,542,118 | 3,504,932 |
Transportation and logistics services | Performance obligations completed over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 3,542,118 | 3,504,932 |
Transportation and logistics services | Operating Segments | NAST | Performance obligations completed over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,823,745 | 2,796,784 |
Transportation and logistics services | Operating Segments | Global Forwarding | Performance obligations completed over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 530,384 | 537,567 |
Transportation and logistics services | Operating Segments | All Other and Corporate | Performance obligations completed over time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 187,989 | 170,581 |
Sourcing | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 262,890 | 246,278 |
Sourcing | Performance obligations completed at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 262,890 | 246,278 |
Sourcing | Operating Segments | NAST | Performance obligations completed at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 0 |
Sourcing | Operating Segments | Global Forwarding | Performance obligations completed at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 0 |
Sourcing | Operating Segments | All Other and Corporate | Performance obligations completed at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 262,890 | $ 246,278 |
LEASES - Lease Data (Details)
LEASES - Lease Data (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | |
Lease Costs | |||
Operating lease expense | $ 19,974 | $ 16,822 | |
Short-term lease expense | 2,572 | 2,341 | |
Total lease expense | 22,546 | 19,163 | |
Other Lease Information | |||
Operating cash flows from operating leases | 19,112 | 16,629 | |
Right-of-use lease assets obtained in exchange for new lease liabilities | $ 60,281 | $ 7,732 | |
Lease Term and Discount Rate | |||
Weighted average remaining lease term (in years) | 7 years 2 months 12 days | ||
Weighted average discount rate (percent) | 3.30% | ||
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term, excluding Chicago office space (in years) | 4 years 10 months 24 days | ||
Chicago Office Space | |||
Lessee, Lease, Description [Line Items] | |||
Lease term (in years) | 15 years |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Maturity of Lease Liabilities | |
Remaining 2020 | $ 61,390 |
2021 | 74,485 |
2022 | 62,947 |
2023 | 49,726 |
2024 | 32,536 |
Thereafter | 123,925 |
Total lease payments | 405,009 |
Less: Interest | (48,376) |
Present value of lease liabilities | $ 356,633 |
ALLOWANCE FOR CREDIT LOSSES (De
ALLOWANCE FOR CREDIT LOSSES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | |
Rollforward of Allowance for Credit Loss | ||
Allowance for credit loss, beginning balance | $ 32,838 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 5,072 | |
Write-offs | (5,438) | |
Allowance for credit loss, ending balance | $ 32,838 | $ 32,472 |
CHANGES IN ACCUMULATED OTHER _2
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Accumulated other comprehensive loss | $ 108,344 | $ 76,149 | |
Other comprehensive (loss) income, net of tax | (32,195) | $ 5,297 | |
Other comprehensive loss, related income tax effects | $ 1,500 |