C.H. Robinson Worldwide (CHRW) 8-K C.H. Robinson Reports Third Quarter Results

Earnings Conference Call –

Third Quarter 2013

November 6, 2013

John Wiehoff, Chairman & CEO

Chad Lindbloom, CFO

Tim Gagnon, Director, Investor Relations

Exhibit 99.2

2

Safe Harbor Statement

Except for the historical information contained herein, the matters set forth in this presentation and the

accompanying earnings release are forward-looking statements that represent our expectations, beliefs,

intentions or strategies concerning future events. These forward-looking statements are subject to certain risks

and uncertainties that could cause actual results to differ materially from our historical experience or our present

expectations, including, but not limited to such factors as changes in economic conditions, including uncertain

consumer demand; changes in market demand and pressures on the pricing for our services; competition and

growth rates within the third party logistics industry; freight levels and increasing costs and availability of truck

capacity or alternative means of transporting freight, and changes in relationships with existing truck, rail, ocean

and air carriers; changes in our customer base due to possible consolidation among our customers; our ability to

integrate the operations of acquired companies with our historic operations successfully; risks associated with

litigation and insurance coverage; risks associated with operations outside of the U.S.; risks associated with the

potential impacts of changes in government regulations; risks associated with the produce industry, including

food safety and contamination issues; fuel prices and availability; changes to our capital structure and

termination of our accelerated share repurchase program; and the impact of war on the economy; and other

risks and uncertainties detailed in our Annual and Quarterly Reports.

We have included herein certain non-GAAP financial information, including certain fiscal 2012 information

adjusted to reflect an acquisition and a divestiture that occurred during 2012.  In addition to helping us assess

our operating performance, we believe that these non-GAAP financial measures assist investors in

understanding our operations and results.  However, non-GAAP results should not be regarded as a substitute

for corresponding GAAP measures, and should be viewed in conjunction with our consolidated financial

statements prepared in accordance with GAAP.  Reconciliations of such non-GAAP information to actual results

are set forth in Appendices A, B and C.

3

Q3 2013 Results

2013

2012

% Change

2013

2012

% Change

Total revenues

$3,316,665

$2,880,409

15.1%

$9,599,194

$8,388,237

14.4%

Total net revenues

$463,306

$432,670

7.1%

$1,391,630

$1,272,939

9.3%

Income from operations

$176,355

$187,257

-5.8%

$527,537

$541,716

-2.6%

Net income

$107,737

$116,330

-7.4%

$322,952

$337,412

-4.3%

Earnings per share

(diluted)

$0.69

$0.72

-4.2%

$2.03

$2.08

-2.4%

Three months ended September 30

Nine months ended September 30

In thousands, except per share amounts

•

Total revenue growth is primarily a result of acquired business and market share gains

•

Net revenue margin compression continues to be a challenge

•

We

continue

to

invest

in

the

business

and

have

confidence

in

our

long

term

strategy

•

Accelerated Share Repurchases, made in late August 2013, had no EPS impact in the third

quarter. We expect an approximate $.02 per quarter EPS impact in

the future

4

In thousands

2013 Actual

2012

Actual

T-Chek

Operations

Phoenix

Operations

2012 Pro

Forma

% Change

Pro Forma

Total revenues

$3,316,665

$2,880,409

-$13,204

$216,219

$3,083,424

7.6%

Total net revenues

$463,306

$432,670

-$13,204

$42,323

$461,789

0.3%

Personnel expenses

204,388

179,342

-3,470

20,799

196,671

3.9%

Selling, general & admin

77,523

65,112

-2,855

7,602

69,859

11.0%

Acquisition amortization

5,040

959

-

4,067

5,026

0.3%

Total operating expenses

286,951

245,413

-6,325

32,468

271,556

5.7%

Income from operations

$176,355

$187,257

-$6,879

$9,855

$190,233

-7.3%

Percent of net revenue

38.1%

43.3%

52.1%

23.3%

41.2%

-7.5%

Q3 2013 Actual Compared to Q3 2012 Pro Forma

•

2012 Pro Forma includes the effects of the disposition of T-Chek and acquisition of Phoenix as if they had occurred

at the beginning of our 2012 fiscal year. A reconciliation of actual results for the third quarter of 2012 to pro forma

appears in Appendix A

•

Excluding the employees of Phoenix, Apreo and T-Chek, average headcount increased approximately eight percent

in the third quarter of 2013 compared to the third quarter of 2012. Headcount increases were partially offset by

declines in variable incentive plans based on earnings growth

•

Income from operations as a percent of net revenue has been generally consistent through the first three quarters of

2013

•

(Q1 2013 37.0%, Q2 2013 38.6%, Q3 2013 38.1%)

•

See Appendix B for the nine months ending September 30, 2012.

Three months ended September 30

5

Transportation Results Q3 2013

•

Total revenue growth is primarily attributed to the Phoenix acquisition and Truckload volume growth

•

Significant net revenue margin compression in Truckload, partially offset by margin expansion in

the Global Forwarding services

2013

2012

% Change

2013

2012

% Change

Total revenues

$2,880,901

$2,445,883

17.8%

$8,302,160

$7,099,485

16.9%

Total net revenues

$429,978

$382,774

12.3%

$1,282,375

$1,118,996

14.6%

Net revenue margin

14.9%

15.6%

-4.6%

15.4%

15.8%

-2.0%

Three months ended September 30

Nine months ended September 30

TRANSPORTATION  in thousands

TRANSPORTATION NET REVENUE MARGIN PERCENTAGE

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Q1

17.7%

17.8%

16.8%

17.4%

18.3%

20.2%

18.2%

22.6%

17.4%

17.2%

16.9%

16.2%

Q2

16.1%

15.9%

15.4%

16.3%

17.1%

17.9%

15.4%

20.6%

15.8%

16.2%

14.9%

15.3%

Q3

15.6%

16.0%

15.9%

16.3%

17.5%

18.0%

15.9%

19.8%

16.6%

16.4%

15.6%

14.9%

Q4

16.2%

15.8%

16.0%

15.7%

18.3%

17.7%

19.0%

18.3%

17.6%

16.3%

15.8%

6

Truckload Results Q3 2013

2013

2012

% Change

2013

2012

% Change

$265,509

$269,097

-1.3%

$798,448

$788,872

1.2%

Three months ended September 30

Nine months ended September 30

TRUCKLOAD NET REVENUES in thousands

Quarter

Year to

Date

Volume

13%

10%

Pricing *

2%

1%

Net revenue margin

TRUCKLOAD

Year over year change

*Excluding estimated impact of fuel

•

North America Truckload volumes grew approximately nine percent in the third quarter when

compared to the third quarter of 2012

•

North America Truckload cost per mile, excluding the impact of fuel, increased approximately four

percent in the third quarter of 2013 when compared to the third quarter of 2012

•

North America Truckload price per mile, excluding the impact of fuel, increased approximately two

percent in the third quarter of 2013 when compared to the third quarter of 2012

7

LTL Results Q3 2013

2013

2012

% Change

2013

2012

% Change

$61,436

$58,863

4.4%

$180,638

$167,135

8.1%

Three months ended September 30

Nine months ended September 30

LTL NET REVENUES in thousands

Quarter

Year to Date

Volume

5%

8%

Pricing

Net revenue margin

LTL

Year over year change

•

Net revenue growth rate slowed in the third quarter when compared to the growth rate in the first

two quarters of 2013

•

LTL experienced net revenue margin compression in the third quarter of 2013 when compared to

the third quarter of 2012

•

Carrier

costs

are

increasing

industry

wide,

customer

pricing

has

not

kept

up

with

the

increase in carrier costs

•

LTL marketplace remains very competitive

8

Intermodal Results Q3 2013

•

Net revenues up slightly based on price increases and slightly higher margins offset by reduced

volume from customers.

•

The

mix

of

business

was

improved

in

the

third

quarter

of

2013

by

eliminating

some

low

or

unprofitable lanes and added volume from truckload conversion.

2013

2012

% Change

2013

2012

% Change

$10,202

$10,074

1.3%

$29,223

$29,804

-1.9%

Three months ended September 30

Nine months ended September 30

INTERMODAL NET REVENUES  in thousands

Quarter

Year to

Date

Volume

Pricing

Net revenue margin

Year over year change

9

Global Forwarding Results Q3 2013

Ocean, Air and Customs

2013

2012

% Change

2013

2012

% Change

Ocean

$49,692

$18,498

168.6%

$141,304

$51,217

175.9%

Air

$18,137

$9,046

100.5%

$55,107

$28,496

93.4%

Customs

$8,932

$4,109

117.4%

$27,307

$11,443

138.6%

Three months ended September 30

Nine months ended September 30

NET REVENUES  in thousands

Quarter

Year to Date

Volume

Pricing

Net revenue margin

OCEAN

Quarter

Year to Date

Volume

Pricing

Net revenue margin

AIR

Year over year change

Year over year change

•

Significant

net

revenue

increases

resulting

from

the

acquisition

of

Phoenix

International

•

In the third quarter, CHRW was the #1 NVOCC from China, Eastbound (ranking based on

TEU’s shipped in the third quarter of 2013)

10

Phoenix Integration Update

•

Global Forwarding results through three quarters on track with the acquisition plan

•

Year one integration plan, on track with good results to date

•

Year two integration initiatives include, systems conversions and sales activities from the combined

global forwarding network

2013

2012

% Change

Actual C.H. Robinson

net revenue

$76,761

$31,653

142.5%

Phoenix net revenue *

$42,323

Total *

$76,761

$73,976

3.8%

Three months ended September 30

OCEAN, AIR, AND CUSTOMS NET REVENUE

In thousands

* See Appendices A and C for

reconciliation information for

2012 periods

2013

2012

% Change

$223,718

$91,156

145.4%

$125,243

$223,718

$216,399

3.4%

Nine months ended September 30

11

Other Logistics Services Results Q3 2013

•

Other Logistics Services net revenues include transportation management services, warehousing

and small parcel

•

These services continue to perform well and the sales pipeline is strong  

2013

2012

% Change

2013

2012

% Change

$16,070

$13,087

22.8%

$50,348

$42,029

19.8%

Three months ended September 30

Nine months ended September 30

NET REVENUES  in thousands

12

Sourcing Results Q3 2013

•

Low crop yields due primarily to weather drove higher cost of goods sold and a disruption in planned

supply

•

Lost certain commodity business with a significant customer

•

Case volume decreased approximately one percent in the third quarter of 2013 compared to the third

quarter of 2012

•

Our foodservice business segment experiencing growth with existing customers and through the

addition of new customers in the third quarter of 2013 compared to the third quarter of 2012 

2013

2012

% Change

2013

2012

% Change

Total revenues

$432,373

$418,377

3.3%

$1,287,036

$1,240,704

3.7%

Total net revenues

$30,553

$33,747

-9.5%

$101,151

$105,895

-4.5%

Net revenue margin

7.1%

8.1%

-12.4%

7.9%

8.5%

-7.9%

Three months ended September 30

Nine months ended September 30

SOURCING  in thousands

13

2013

2012

% Change

2013

2012

% Change

Net cash provided by operating

activities

$124,658

$157,128

-20.7%

$182,929

$267,156

-31.5%

Capital expenditures, net

$11,659

$13,921

-16.2%

$34,236

$38,891

-12.0%

Three months ended September 30

Nine months ended September 30

September 30, 2013

Cash &

investments

$129,723

Current assets

$1,753,441

Total assets

$2,891,568

Debt

$850,000

Current liabilities

$1,306,231

Stockholders’

investment

$988,563

CASH FLOW DATA

BALANCE SHEET DATA

Other Financial Information

In thousands, except share and per share amounts

•

Strong operating cash flow quarter

•

Total debt $850 million

•

Borrowed $500 million during the

quarter

•

Average duration 15 years

•

Average coupon 4.28%

14

Repurchases of Common Stock

in thousands except per share

Q3 2013

YTD through Sept. 30, 2013

ASR

Other  Activity

Total

ASR

Other Activity

Total

Shares

6,119

1,219

7,338

6,119

3,671

9,790

Average price per share

$59.24

$59.80

Total cost of shares

$72,198

$219,556

•

Year to date total includes the shares withheld on the delivery of restricted shares to employees

•

$500 million Accelerated Share Repurchase (ASR) initiated on August 26, 2013

•

6.1 million shares delivered upon initial purchase, approximately 70% of total expected shares

•

Share repurchases under the ASR program will terminate between December 11, 2013 and April 16,

2014 at the discretion of the participating banks

•

Final number of shares acquired will be based upon the average of the daily VWAP, less and agreed

to discount, during the duration or the share repurchase program

•

Balance of shares purchased, will be delivered upon termination of the program

15

A look ahead

•

The truckload environment remains challenging and it will be difficult to grow our

earnings in the fourth quarter of 2013

•

We will continue to invest in our business, including our focus on;

•

Market Share Gains

•

Global Forwarding network

•

European Network

•

Management Services

•

Share repurchases and evaluation of potential M&A opportunities

•

We have confidence in our long term strategy and will discuss key initiatives during the

Investor Day event on November 19

16

Appendix A: Q3 2012 Actual to Pro Forma Reconciliation

In thousands

Three months ended September 30

1.

Adjustments have been made to historical Phoenix operations for addition of amortization expense of finite-

lived intangible assets recorded in connection with the acquisition ($4.1 million), rent expense for lease

agreements entered into in connection with the acquisition ($84 thousand), and depreciation on a building

acquired in the acquisition ($37 thousand). An adjustment has also been made to reduce purchased

transportation and related services ($7.3 million) and other selling, general, and administrative expenses

($13.5 million) and to increase personnel expenses ($20.8 million) to conform to C.H. Robinson’s historical

financial reporting presentation. There were no pro forma adjustments to the T-Chek historical results.

2.

Net revenues are our total revenues less purchased transportation and related services, including

contracted

motor

carrier,

rail,

ocean,

air,

and

other

costs,

and

the

purchased

price

and

services

related

to

the products we source.

17

In thousands

2013 Actual

2012

Actual

T-Chek

Operations

Phoenix

Operations

2012 Pro

Forma

% Change

Pro Forma

Total net revenues

$1,391,630

$1,272,939

-$39,333

$125,243

$1,358,849

2.4%

Personnel expenses

623,042

539,964

-11,176

61,899

590,687

5.5%

Selling, general & admin

225,938

188,622

-8,781

26,352

206,193

9.6%

Acquisition amortization

15,113

2,637

-

12,200

14,837

1.9%

Total operating expenses

864,093

731,223

-19,957

100,451

811,717

6.5%

Income from operations

$527,537

$541,716

-$19,376

$24,792

$547,132

-3.6%

Percent of net revenue

37.9%

42.6%

49.3%

19.8%

40.3%

-6.0%

Appendix B: Nine Month 2013 Actual Compared to Nine Month 2012 Pro Forma

•

2012 Pro Forma includes the effects of the disposition of T-Chek and acquisition of

Phoenix as if they had occurred at the beginning of our 2012 fiscal year. A

reconciliation of actual 2012 results to pro forma appears in Appendix C

Nine months ended September 30

18

Appendix C: Nine Month 2012 Actual to Pro Forma Reconciliation

In thousands

Nine months ended September 30

1.

Adjustments have been made to historical Phoenix operations for addition of amortization expense

of finite-lived intangible assets recorded in connection with the acquisition ($12.2 million), rent

expense for lease agreements entered into in connection with the acquisition ($252 thousand), and

depreciation on a building acquired in the acquisition ($111 thousand). An adjustment has also been

made for the elimination of contractual changes in compensation ($5.1 million). An adjustment has

also been made to reduce purchased transportation and related services ($21.9 million) and other

selling, general, and administrative expenses ($45.1 million) and to increase personnel expenses

($67.0 million) to conform to C.H. Robinson’s historical financial reporting presentation. There were

no pro forma adjustments to the T-Chek historical results.

2.

Net revenues are our total revenues less purchased transportation and related services, including

contracted motor carrier, rail, ocean, air, and other costs, and the purchased price and services

related to the products we source.