C. H. Robinson Worldwide
Annual Report 2013

Plain-text annual report

TO OUR FELLOW SHAREHOLDERS, IT WAS A CHALLENGING YEAR FOR C.H. ROBINSON. WHILE WE ACCOMPLISHED MANY OF OUR GOALS, WE FAILED TO GROW EARNINGS FOR THE FIRST TIME IN OUR 16 YEARS AS A PUBLIC COMPANY. WE ARE AS MOTIVATED AS EVER TO RETURN TO THE GROWTH OUTCOMES OUR SHAREHOLDERS EXPECT, AND WE REMAIN COMMITTED TO OUR SHORT AND LONG TERM INITIATIVES TO ACHIEVE SUSTAINABLE AND PROFITABLE GROWTH. THOUGH WE DID NOT ACHIEVE OUR PLANNED BOTTOM LINE RESULTS, OUR TOTAL REVENUES OF $12.8 BILLION REACHED A NEW HIGH, DRIVEN BY RECORD VOLUME IN THE TRUCKLOAD, LESS THAN TRUCKLOAD, OCEAN, AND AIR SERVICES. THE ENTERPRISE CUSTOMER COUNT GREW TO 46,000, AND WE NOW HAVE CONTRACTUAL RELATIONSHIPS WITH APPROXIMATELY 63,000 TRANSPORTATION COMPANIES AND OVER 2,000 FRESH PRODUCE GROWERS. WE ALSO RETURNED OVER A BILLION DOLLARS TO OUR SHAREHOLDERS THROUGH SHARE REPURCHASES AND DIVIDEND PAYMENTS, INCLUDING AN ACCELERATED SHARE REPURCHASE OF $500 MILLION. (CONTINUED) FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) 2013 2012 $12,752,076 $1,836,095 $682,650 TOTAL REVENUES 12.3 % NET REVENUES(1) 6.9 % INCOME FROM OPERATIONS % (5.3) $11,359,113 $1,717,571 $720,516(2) $415,904 $2.65 $2.65 NET INCOME % (7.0) BASIC NET INCOME PER SHARE % (4.3) DILUTED NET INCOME PER SHARE (4.0) % $447,002 (2) $2.77(2) $2.76(2) $1.40 32.4% 157,080 DIVIDENDS PER SHARE 4.5 % $1.34 RETURN ON AVERAGE STOCKHOLDERS INVESTMENT (28.3)% DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (3.0) % 45.2% 161,946 46,000 11,676 $1,027,706 NUMBER OF CUSTOMERS END OF YEAR 9.5 % NUMBER OF EMPLOYEES END OF YEAR 6.8 % 42,000 10,929 93.5 % TOTAL AMOUNT RETURNED TO SHAREHOLDERS(3) $531,202 (1) Our net revenues are our total revenues less purchased transportation and related services, including motor carrier, rail, ocean, air, and other costs, and the purchase price and services related to the products we source. Our net revenues are the primary indicator of our ability to source, add value, and sell services and products that are provided by third parties, and we consider them to be our primary performance measurement. (2) Continuing operations excluding non-recurring acquisition and divestiture expenses and excluding the gain on the divestiture of T-Chek Systems, Inc. (3) 2013 includes $500M of Accelerated Share Repurchase program. LETTER TO OUR SHAREHOLDERS (CONTINUED) Our employees, so critical to our successes and so central to all we aspire to do, diligently deliver exceptional value to customers and shareholders. Their efforts—combined with twelve years on the Best Place to Work list for large companies in the State of Minnesota and being named #1 on the list in 2013— attract the industry’s best talent. All this encourages job candidates to investigate the compelling career opportunities and professional development we offer. While 2013 was challenging, we remained committed to investing in our business for the long term benefit of customers, suppliers, employees, and shareholders. Our strategy—to grow market share, add new services, and expand and optimize our network—remain relevant and appropriate across our global business. We are confident that the talent and passion of over 11,000 employees will drive continued growth for many years to come. We have a strong history of adapting and evolving over the last 100-plus years, and with a flexible, variable cost business model and great culture, we will build an even stronger organization for our future. Thank you for believing in us and trusting our commitment to the long term priorities of our business. Thank you, John P. Wiehoff Chief Executive Officer and Chairman of the Board In addition to our record total revenue and volume results, we achieved significant strategic and operational milestones in 2013. We successfully integrated the operations of Phoenix International Freight Services, Ltd. (Phoenix) and Apreo Logistics; invested in our European network with new office openings in Istanbul, Basel, and Innsbruck; and we aligned our sales, account, and carrier management organizations in the North America Surface Transportation network. We expect the transportation industry will continue to be challenging in 2014 as supply chains evolve and the use of traditional long haul, dry van truckload shipments face more economic pressures. Regulatory factors—hours of service, compliance safety accountability, electronic on board recorders, and more—are increasing costs for all capacity providers. Competition remains fierce and formidable. All this drives the need to set ourselves apart through our strong network, technology, and service portfolio. At our Investor Day in November, we detailed our long term growth plans, including our top priority of growing revenues and profitability. To create compelling differentiation in the market, we will leverage our competitive advantages, delivering great outcomes to our clients, with the right services to the right customers at the right time. We will continue to invest in our global services and network, with a focus on systems integration, cross selling, and network optimization of the Phoenix International business. In Europe, our expanded footprint will help us grow Global Forwarding and Surface Transportation revenues. Our technology investments will further expand the capabilities of Navisphere®, our global technology platform, to enable employees, customers, and carriers to operate increasingly complex and integrated supply chains. Global visibility, strategic analytics, and customized solutions remain critical to all of our stakeholders. « FIND OUT MORE ABOUT OUR GLOBAL PRESENCE OUR GLOBAL PRESENCE We have an integrated service model, powered by skilled transportation experts, a worldwide office network, and one of the only truly global technology platforms in the world. This makes us uniquely qualified to connect companies in emerging and mature economies with all of their operations around the world. With offices in nearly every major and mid-sized market in North America, our smart, empowered problem-solvers provide local knowledge while leveraging the vast reach of our network. Customers responded with record-high Truckload and LTL volumes in 2013. More global companies want providers who can integrate the entire supply chain. We are one of the few transportation providers with the people, processes, and technology to do it all: Truckload across North America, Europe, and South America; Air and Ocean worldwide; and Global Control Tower® locations to manage global logistics needs. 189 BRANCHES EMPLOYEES 8,913 OF OUR NORTH AMERICAN CUSTOMERS, NORTH AMERICAN OF OUR NORTH AMERICAN CUSTOMERS, NORTH AMERICAN 5 BRANCHES 52 BRANCHES EMPLOYEES 1,105 2012-2013 TRUCKLOAD VOLUME GROWTH 39BRANCHES EMPLOYEES 1,491 #2NVOCC NON-VESSEL OCEAN COMMON CARRIER ASIA TO THE U.S. Significant opportunities exist to cross-sell Global Forwarding, Surface Based Transportation, Sourcing, and Management and other Logistics Services within the region to multinational, regional, and local organizations. 2012-2013 GLOBAL FORWARDING & SURFACE TRANSPORTATION FREIGHT VOLUME GROWTH EMPLOYEES 167 Freight shipments, and consistent rate negotiations and operations, are essentials in providing money-saving consolidations. The Phoenix acquisition more than doubled our Global Forwarding volumes. As we fully integrate under our single global technology platform, Navisphere®, we provide more consistent pricing, visibility, and speed to win customer loyalty. OUR GLOBAL PRESENCE We have an integrated service model, powered by skilled transportation experts, a worldwide office network, and one of the only truly global technology platforms in the world. This makes us uniquely qualified to connect companies in emerging and mature economies with all of their operations around the world. With offices in nearly every major and mid-sized market in North America, our smart, empowered problem-solvers provide local knowledge while leveraging the vast reach of our network. Customers responded with record-high Truckload and LTL volumes in 2013. More global companies want providers who can integrate the entire supply chain. We are one of the few transportation providers with the people, processes, and technology to do it all: Truckload across North America, Europe, and South America; Air and Ocean worldwide; and Global Control Tower® locations to manage global logistics needs. 52 BRANCHES 189 BRANCHES EMPLOYEES 8,913 OF OUR NORTH AMERICAN CUSTOMERS, NORTH AMERICAN OF OUR NORTH AMERICAN CUSTOMERS, NORTH AMERICAN 5 BRANCHES EMPLOYEES 1,105 2012-2013 TRUCKLOAD VOLUME GROWTH 39BRANCHES EMPLOYEES 1,491 #2NVOCC NON-VESSEL OCEAN COMMON CARRIER ASIA TO THE U.S. Significant opportunities exist to cross-sell Global Forwarding, Surface Based Transportation, Sourcing, and Management and other Logistics Services within the region to multinational, regional, and local organizations. 2012-2013 GLOBAL FORWARDING & SURFACE TRANSPORTATION FREIGHT VOLUME GROWTH EMPLOYEES 167 Freight shipments, and consistent rate negotiations and operations, are essentials in providing money-saving consolidations. The Phoenix acquisition more than doubled our Global Forwarding volumes. As we fully integrate under our single global technology platform, Navisphere®, we provide more consistent pricing, visibility, and speed to win customer loyalty. A STRATEGY WITH GLOBAL APPEAL In an increasingly global environment, a company’s supply chain gets their products to market and keeps them in business. That’s why it’s so essential to choose the right logistics provider, and why we are so qualified to supply the strategic support they seek. Customers gain a competitive edge through our industry- leading capacity, broad procurement options, and huge shipment volumes. They find unbeatable options in our strong portfolio of global services, relationships, and network. They gain knowledge, resources, and technology to develop consistency across countries and regions. All this helps companies increase efficiency, and manage spend, risk, and change so that ultimately, they can reach their business goals faster. PROCESS PEOPLE TECHNOLOGY W H A T W E INVEST IN NETWORK PORTFOLIO OF SERVICES H O W W E A P P R O A C H T H E M 4OUTCOMES FOR YOUR BUSINESS A R K E T RELATIONSHIPS A R E G E STABILITY WHAT W E L E V SCALE PROVEN TRACK RECORD We have had consistent, long term growth that shows steady, strong performance. KEY (IN MILLIONS OF DOLLARS) NET REVENUE 15.2% 20-YEAR CAGR(1) INCOME FROM OPERATIONS 17.4% 20-YEAR CAGR (1) COMPOUNDED ANNUAL GROWTH RATE (CAGR). 7 . 8 0 1 7 . 7 2 4 9 9 1 9 9 9 1 4 0 0 2 9 0 0 2 1 . 6 3 8 1 7 . 2 8 6 3 1 0 2 Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2013Commission File Number: 000-23189 C.H. ROBINSON WORLDWIDE, INC.(Exact name of registrant as specified in its charter)Delaware 41-1883630(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 14701 Charlson Road, Eden Prairie, Minnesota 55347-5088(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: 952-937-8500Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, par value $.10 per sharePreferred Share Purchase Rights The NASDAQ National MarketSecurities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No ¨Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90days. Yes  No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Date File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required tosubmit and post such files). Yes  No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “largeaccelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)Large accelerated filer  Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No The aggregate market value of voting stock held by non-affiliates of the registrant as of June 28, 2013 was approximately $8,934,214,988 (based upon the closing price of$56.31 per common share on that date as quoted on The NASDAQ Global Select Market).As of February 24, 2014, the number of shares outstanding of the registrant’s Common Stock, par value $.10 per share, was 148,457,275. DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s Proxy Statement relating to its Annual Meeting of Stockholders to be held May 8, 2014 (the “Proxy Statement”), are incorporated by reference inPart III.Table of ContentsC.H. ROBINSON WORLDWIDE, INC.ANNUAL REPORT ON FORM 10-KFor the year ended December 31, 2013TABLE OF CONTENTS Page PART I Item 1.Business3Item 1A.Risk Factors13Item 1B.Unresolved Staff Comments17Item 2.Properties18Item 3.Legal Proceedings18Item 4.Mine Safety Disclosures19 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities20Item 6.Selected Financial Data22Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations24Item 7A.Quantitative and Qualitative Disclosures about Market Risk32Item 8.Financial Statements and Supplementary Data33Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure57Item 9A.Controls and Procedures57 PART II Item 10.Directors and Executive Officers of the Registrant57Item 11.Executive Compensation58Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters58Item 13.Certain Relationships and Related Transactions, and Director Independence58Item 14.Principle Accounting Fees and Services58 PART IV Item 15.Exhibits, Financial Statement Schedules59 Signatures602Table of ContentsPART IITEM 1.BUSINESSOverviewC.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest third party logistics companies in the worldwith 2013 consolidated total revenues of $12.8 billion. We are a service company. We provide freight transportation services and logistics solutions tocompanies of all sizes, in a wide variety of industries. During 2013, we handled approximately 12.7 million shipments and worked with more than 46,000active customers. We operate through a network of 285 offices, which we call branches, in North America, Europe, Asia, South America, and Australia. Wehave developed global transportation and distribution networks to provide transportation and supply chain services worldwide. As a result, we have thecapability of facilitating most aspects of the supply chain on behalf of our customers.As a third party logistics provider, we enter into contractual relationships with a wide variety of transportation companies, and utilize those relationships toefficiently and cost effectively transport our customers’ freight. We have contractual relationships with approximately 63,000 transportation companies,including motor carriers, railroads (primarily intermodal service providers), and air freight and ocean carriers. Depending on the needs of our customer andtheir supply chain requirements, we select and hire the appropriate transportation for each shipment. Our model enables us to be flexible, provide solutionsthat optimize service for our customers, and minimize our asset utilization risk. As an integral part of our transportation services, we provide a wide range ofvalue-added logistics services, such as freight consolidation, supply chain consulting and analysis, optimization, and reporting.In addition to transportation, we provide sourcing services (“Sourcing”). Our Sourcing business is primarily the buying, selling, and marketing of freshproduce. It was our original business when we were founded in 1905. The foundation for much of our logistics expertise can be traced to our significantexperience in handling produce and temperature controlled commodities. We supply fresh produce through our network of independent produce growers andsuppliers. Our customers include grocery retailers and restaurants, produce wholesalers, and foodservice distributors. In many cases, we also arrange thelogistics and transportation of the products we sell and provide related supply chain services such as replenishment, category management, andmerchandising. We have developed proprietary brands of produce and have exclusive licensing agreements to distribute fresh produce under consumerrecognized brand names. The produce for these brands is sourced through our preferred grower network and packed to order through contract packingagreements. We have instituted quality assurance and monitoring procedures with each of these preferred growers.Historically, we provided fee-based payment services ("Payment Services") primarily through our subsidiary, T-Chek Systems, Inc., ("T-Chek"). T-Chekprovided a variety of payment management and business intelligence services primarily to motor carrier companies and to fuel distributors. Those servicesincluded funds transfer, fuel purchasing, and online expense management. For most of these services, T-Chek charged a fee per transaction. On October 16,2012, we sold substantially all of the assets and transferred certain liabilities of T-Chek to Electronic Funds Source, LLC ("EFS"). We expect to continue togenerate Payment Services revenues from the cash advance option we offer our contracted carriers through continued agreements with EFS.Our flexible business model has been the main driver of our historical results and has positioned us for continued growth. One of our competitive advantagesis our branch network of 285 offices. Our branch employees are in close proximity to both customers and transportation providers, which gives them broadknowledge of their local markets and enables them to respond quickly to customers’ and transportation providers’ changing needs. Branch employees act as ateam in their sales efforts, customer service, and operations. A significant portion of most branch employees’ compensation is performance-oriented, based onthe profitability of their branch and their contributions to the success of the branch. We believe this makes our employees more service-oriented and focused ondriving growth and maximizing office productivity.Our branches work together to complete transactions and collectively meet the needs of our customers. For large multi-location customers, we often coordinateour efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. As an example, approximately 46 percent of ourtruckload shipments are shared transactions between branches. Our methodology of providing services is very similar across all branches. The majority ofour global network operates on a common technology platform that is used to match customer needs with supplier capabilities, to collaborate with other branchlocations, and to utilize centralized support resources to complete all facets of the transaction.3Table of ContentsHistorically, we have grown primarily through internal growth, by increasing market share through the addition of new customers and expanding relationshipswith our current customers, adding new services, expanding our market presence and operations globally, and hiring additional branch employees. We haveaugmented our growth through selective acquisitions. In October 2012, we acquired all of the outstanding stock of the operating subsidiaries of Apreo LogisticsS.A. ("Apreo"), a leading freight forwarder based in Warsaw, Poland. This acquisition enhances our truckload capabilities in Europe. In November 2012, weacquired all of the outstanding stock of Phoenix International Freight Services, Ltd, ("Phoenix"), an international freight forwarder based in Chicago, Illinois.Phoenix has a strong track record and diverse customer base in the international freight forwarding industry. This acquisition expanded our global forwardingnetwork and market presence.Our net revenues are our total revenues less purchased transportation and related services, including contracted motor carrier, rail, ocean, air, and other costs,and the purchase price and services related to the products we source. Our net revenues are the primary indicator of our ability to source, add value, and sellservices and products that are provided by third parties, and we consider them to be our primary performance measurement. Accordingly, the discussion ofour results of operations focuses on the changes in our net revenues.Transportation and Logistics ServicesC.H. Robinson provides freight transportation and related logistics and supply chain services. Our services range from commitments on a specific shipment tomuch more comprehensive and integrated relationships. We execute these service commitments by hiring and training people, developing proprietary systemsand technology processes, and utilizing our network of subcontracted transportation providers, including, but not limited to, contract motor carriers,railroads, air freight carriers, and ocean carriers. We make a profit on the difference between what we charge to our customers for the totality of servicesprovided to them and what we pay to the transportation providers to handle or transport the freight. While industry definitions vary, given our extensivesubcontracting to create a flexible network of solutions, we are generally referred to in the industry as a third party logistics company.We provide all of the following transportation and logistics services:•Truckload-Through our contracts with motor carriers, we have access to dry vans, temperature controlled vans, flatbeds, and bulk capacity.We also offer time-definite and expedited truck transportation.•Less Than Truckload (“LTL”)-LTL transportation involves the shipment of single or multiple pallets of freight. We focus on shipments of asingle pallet or larger, although we handle any size shipment. Through our contracts with motor carriers and our operating system, weconsolidate freight and freight information to provide our customers with a single source of information on their freight. In many instances, wewill consolidate partial shipments for several customers into full truckloads.•Intermodal-Our intermodal transportation service is the shipment of freight in trailers or containers by a combination of truck and rail. We haveintermodal marketing agreements with container owners and all Class 1 railroads in North America, and we arrange local pickup and delivery(known as drayage) through local contracted motor carriers. In addition, we own approximately 1,000 intermodal containers.•Ocean-As a non-vessel ocean common carrier ("NVOCC") or freight forwarder, we consolidate shipments, determine routing, select oceancarriers, contract for ocean shipments, and provide for local pickup and delivery of shipments.•Air-As a certified indirect air carrier ("Indirect Air Carrier") or freight forwarder, we organize air shipments and provide door-to-door service.•Customs-Our customs brokers are licensed and regulated by U.S. Customs and Border Protection to assist importers and exporters in meetingfederal requirements governing imports and exports.•Other Logistics Services-We provide fee-based transportation management services, warehousing services, and other services.Customers communicate their freight needs, typically on a shipment-by-shipment basis, to the C.H. Robinson branch responsible for their account. Thebranch employee ensures that all appropriate information about each shipment is available in our proprietary operating system. This information is entered byour employees, by the customer through our web tools, or received electronically from the customers' systems. With the help of information provided by ouroperating system, the salesperson then selects a contracted carrier or carriers, based upon his or her knowledge of the carrier’s service capability, equipmentavailability, freight rates, and other relevant factors. Based on the information he or she has about the market and4Table of Contentsrates, the salesperson may either determine an appropriate price at that point or wait to communicate with a contracted carrier directly before setting a price. Inmany cases, employees from different branches collaborate to hire the appropriate contracted carrier for our customers’ freight, and the branch offices agree toan internal profit split.Once the contracted carrier is selected, the salesperson communicates with the contract carrier to agree on the cost for the transportation and the contractcarrier’s commitment to provide the transportation. We are in contact with the contract carrier through numerous means of communication to meet ourcustomers’ requirements as well as track the status of the shipment from origin to delivery.For most of our transportation and logistics services, we are a service provider. By accepting the customer’s order, we accept certain responsibilities fortransportation of the shipment from origin to destination. The carrier’s contract is with us, not the customer, and we are responsible for prompt payment offreight charges. In the cases where we have agreed (either contractually or otherwise) to pay for claims for damage to freight while in transit, we pursuereimbursement from the contracted carrier for the claims. In our management services business, we are acting as the shipper’s agent. In those cases, thecarrier’s contract is typically with the customer, and we collect a fee for our services.As a result of our logistics capabilities, some of our customers have us handle all, or a substantial portion, of their freight transportation requirements. Ourbranch employees price our services to provide a profit to us for the totality of services performed for the customer. In some cases, our services to the customerare priced on a spot market, or transactional, basis. In a number of instances, we have contracts with the customer in which we agree to handle an estimatednumber of shipments, usually to specified destinations, such as from the customer’s plant to a distribution center. Our commitments to handle the shipmentsare usually at pre-determined rates. Most of our rate commitments are for one year or less and allow for renegotiation. As is typical in the transportationindustry, most of these contracts do not include specific volume commitments. When we enter into prearranged rate agreements for truckload services with ourcustomers, we usually have fuel surcharge agreements, in addition to the underlying line-haul portion of the rate.We purchase the majority of our truckload services from our contract truckload carriers on a spot market or transactional basis, even when we are workingwith the customer on a contractual basis. When we enter into spot transactions with contract motor carriers, we generally negotiate a mutually agreed upon totalmarket rate that includes all costs, including any applicable fuel expense. However, if requested by the contract carrier, we will estimate and report fuelseparately. In a small number of cases, we may get advance commitments from one or more contract carriers to transport contracted shipments for the length ofour customer contract. In those cases, where we have prearranged rates with contract carriers, there is a calculated fuel surcharge based on a mutually agreed-upon formula.In the course of providing day-to-day transportation services, our branch employees often identify opportunities for additional logistics services as they becomemore familiar with our customers’ daily operations and the nuances of our customers’ supply chains. We offer a wide range of logistics services on aworldwide basis that reduce or eliminate supply chain inefficiencies. We will analyze the customers’ current transportation rate structures, modes of shipping,and carrier selection. We can identify opportunities to consolidate shipments for cost savings. We will suggest ways to improve operating and shippingprocedures and manage claims. We can help customers minimize storage through crossdocking and other flow-through operations. We may also examine thecustomers’ warehousing and dock procedures. Many of these services are bundled with underlying transportation services and are not typically pricedseparately. They are usually included as a part of the cost of transportation services provided by us, based on the nature of the customer relationship. Inaddition to these transportation services, we may provide additional logistics services such as contract warehousing, consulting, transportation management,and other services, for which we are usually paid separately.As we have emphasized integrated logistics solutions, our relationships with many customers have broadened, and we have become a key provider to them bymanaging a greater portion of their supply chains. We may serve our customers through specially created teams and through several branches. Ourtransportation services are provided to numerous international customers through our worldwide branch network. See Note 1 to our 2013 consolidatedfinancial statements included in Part II, Item 8 of this report for an allocation of our total revenues from domestic and foreign customers for the years endedDecember 31, 2013, 2012, and 2011 and our long-lived assets as of December 31, 2013, 2012, and 2011 in the United States and in foreign locations.5Table of ContentsThe table below shows our net revenues by transportation mode for the periods indicated:Transportation Net Revenues Year Ended December 31,(in thousands)2013 2012 2011 2010 2009Truckload$1,054,565 $1,060,120 $1,037,876 $919,787 $907,586LTL239,477 224,160 198,735 156,460 133,117Intermodal39,084 38,815 41,189 36,550 35,245Ocean187,671 84,924 66,873 60,763 54,188Air73,089 44,444 39,371 42,315 32,662Customs36,578 18,225 13,100 11,866 10,546Other Logistics Services67,931 57,449 46,772 45,388 34,238Total$1,698,395 $1,528,137 $1,443,916 $1,273,129 $1,207,582Transportation services accounted for approximately 93 percent of our net revenues in 2013, 89 percent of our net revenues in 2012, and 88 percent of our netrevenues in 2011. The increases in ocean, air, and customs revenues in 2012 and 2013 are primarily related to our acquisition of Phoenix on November 1,2012.SourcingSince we were founded in 1905, we have been in the business of sourcing fresh produce. Much of our logistics expertise can be traced to our significantexperience in handling produce and other perishable commodities. Because of its perishable nature, produce must be rapidly packaged, carefully transportedwithin tight timetables usually in temperature controlled equipment, and quickly distributed to replenish high-turnover inventories maintained by retailers,wholesalers, foodservice companies, and restaurants. In many instances, we consolidate individual customers’ produce orders into truckload quantities at thepoint of origin and arrange for transportation of the truckloads, often to multiple destinations.Our Sourcing customer base includes grocery retailers and restaurants, produce wholesalers, and foodservice distributors.Our Sourcing services have expanded to include forecasting and replenishment, brand management, and category development services. We have variousnational and regional branded produce programs, including both proprietary brands and national licensed brands. These programs contain a wide variety offresh bulk and value added fruits and vegetables that are high in quality. These brands have expanded our market presence and relationships with many ofour retail customers. We have also instituted quality assurance and monitoring programs as part of our branded and preferred grower programs.Sourcing accounted for approximately seven percent of our net revenues in 2013, and eight percent of our net revenues in 2012 and 2011. Payment ServicesOn October 16, 2012, we sold substantially all of the operations of T-Chek, which represented a majority of our Payment Services. However, we still earnPayment Services revenues when we advance money to our contract carriers.Payment Services accounted for less than one percent of our net revenues in 2013, three percent of our net revenues in 2012, and four percent of our netrevenues in 2011.6Table of ContentsOrganizationBranch Network. To keep us close to our customers and markets, we operate through a network of offices, which we call "branches". We currently have 285branches in the following areas of the world: RegionNumber ofBranchesNorth America189Europe52Asia38South America5Australia1Each branch is responsible for its own growth and profitability. Our branch employees are responsible for developing new business, negotiating and pricingservices, receiving and processing service requests from customers, and negotiating with carriers to provide the transportation requested. In addition to routinetransportation, branch employees are often called upon to handle customers’ unusual, seasonal, and emergency needs. Shipments to be transported by truckare priced at the branch level, and branches cooperate with each other to hire contract carriers to provide transportation. Branches may rely on expertise in otherbranches when contracting LTL, intermodal, ocean, and air shipments. Multiple branches may also work together to service larger, national accounts wherethe expertise and resources of more than one branch are required to meet the customer’s needs. Their efforts are usually coordinated by one “lead” branch onthe account.Employees in the branches both sell to and service their customers. Sales opportunities are identified through our internal database, referrals from currentcustomers, leads generated by branch personnel through knowledge of their local and regional markets, and company marketing efforts. Branch employees arealso responsible for recruiting new over the road contract carriers, who are referred to our centralized carrier services group to assure they are properly licensedand insured and have acceptable Federal Motor Carrier Safety Administration ("FMCSA") issued safety ratings.Branch Employees. Branch offices are responsible for their hiring and headcount decisions, based on the needs of their branch and balancing personnelresources with their business requirements. Because the quality of our employees is essential to our success, we are highly selective in our recruiting andhiring. To support our hiring processes, we have a corporate recruiting group that develops a pipeline of qualified candidates that managers can draw from.Our applicants typically have college degrees, and some have business experience, although not necessarily within the transportation industry.Early in their tenure, most newly-hired branch employees go through centralized training that emphasizes development of the skills necessary to becomeproductive members of a branch team, including technology training on our proprietary systems and our customer service philosophy. Centralized training isfollowed by ongoing, on-the-job training at the branch level. We expect most new branch employees to start contributing to the success of the branch in a matterof weeks.Employees at a branch operate and are compensated in large part on a team basis. The team structure is motivated by our performance-based compensationsystem, in which a significant portion of the cash compensation of most branch managers and branch employees is dependent on the profitability of theirparticular branch. Branch managers and most branch employees are paid a performance-based bonus, which is a portion of the branch’s earnings for thatcalendar year. The percentage they can potentially earn is predetermined in an annual bonus contract and is based on their productivity and contributions tothe overall success of the branch. Within our 401(k) plan, employees can also receive profit sharing contributions that depend on our overall profitability andother factors. In some special circumstances, such as opening new branches, we may guarantee a level of compensation to the branch manager and key branchemployees for a short period of time.All of our managers and certain other employees who have significant responsibilities are eligible to receive equity awards because we believe these awards arean effective tool for creating long-term ownership and alignment between employees and our shareholders. Generally, these awards are eligible to vest over five-year periods and also include financial performance-based requirements for management employees.Individual branch employees benefit both through the growth and profitability of individual branches and by achieving individual goals. They are motivatedby the opportunity to advance in a variety of career paths, including branch management, corporate sales, and account management. We have a “promote fromwithin” philosophy and fill nearly all branch management positions with current employees.7Table of ContentsShared ServicesOur branches are supported by our shared and centralized services. Approximately ten percent of our employees provide shared services in centralized centers.Approximately 44 percent of these shared services employees are information technology personnel who develop and maintain our proprietary operating systemsoftware and our wide area network.Executive OfficersThe Board of Directors designates the executive officers annually. Below are the names, ages, and positions of the executive officers: Name Age PositionJohn P. Wiehoff 52 Chief Executive Officer, President, and Chairman of the BoardBen G. Campbell 48 Vice President, General Counsel and SecretaryBryan D. Foe 46 Vice President, EuropeAngela K. Freeman 46 Vice President, Human ResourcesJames P. Lemke 46 Senior Vice PresidentChad M. Lindbloom 49 Senior Vice President and Chief Financial OfficerThomas K. Mahlke 42 Vice President, Chief Information OfficerChristopher J. O'Brien 46 Senior Vice PresidentStéphane D. Rambaud 49 Senior Vice PresidentScott A. Satterlee 45 Senior Vice PresidentMark A. Walker 56 Senior Vice PresidentJohn P. Wiehoff has been chief executive officer of C.H. Robinson since May 2002, president of the company since December 1999, a director since 2001,and became the chairman in January 2007. Previous positions with the company include senior vice president from October 1998, chief financial officer fromJuly 1998 to December 1999, treasurer from August 1997 to June 1998, and corporate controller from 1992 to June 1998. Prior to that, John wasemployed by Arthur Andersen LLP. John also serves on the Boards of Directors of Polaris Industries Inc. (NYSE: PII), a provider of off-road vehicles,snowmobiles, motorcycles and on-road electric/hybrid powered vehicles, and Donaldson Company, Inc. (NYSE: DCI), a provider of filtration systems. Heholds a Bachelor of Science degree from St. John’s University.Ben G. Campbell was named vice president, general counsel and secretary in January 2009. Ben joined C.H. Robinson in 2004 and most recently held theposition of assistant general counsel. Before coming to C.H. Robinson, Ben was a partner at Rider Bennett, LLP, in Minneapolis, Minnesota. Ben holds aBachelor of Science degree from St. John’s University and a Juris Doctor from William Mitchell College of Law.Bryan D. Foe was named vice president, Europe in July 2012. He has served as a vice president since 2005. Additional positions with C.H. Robinson includepresident of T-Chek Systems, Inc., and manager of the Valley Forge, Pennsylvania, and Grand Rapids, Michigan, branch offices. Bryan joined the companyin 1990. He also served as a Research Advisory Committee Member for the American Transportation Research Institute and was past treasurer of the DetroitIntermodal Association. He attended the Detroit College of Business.Angela K. Freeman was named vice president, human resources in September 2012, having served as vice president, investor relations and public affairssince 2009. In that role she oversaw all internal and external communications, including marketing. Prior to that time, she served as the director of investorrelations and as director of marketing communications. She also currently serves as the President of the C.H. Robinson Foundation. Angie joined the companyin 1998. She holds a Master of Science from the London School of Economics, and a Bachelor of Arts and a Bachelor of Science from the University ofNorth Dakota. Angie also serves as Chairperson of Community Health Charities of Minnesota.James P. Lemke was named senior vice president in December 2007, having served as vice president, Sourcing since 2003. Prior to that time, he served as thevice president and manager of C.H. Robinson’s Corporate Procurement and Distribution Services branch. Jim joined the company in 1989. Jim holds aBachelor of Arts degree in International Relations from the University of Minnesota. Jim also serves on the Foundation Board of the United Fresh ProduceAssociation.Chad M. Lindbloom was named a senior vice president in December 2007. He has served as an executive and as chief financial officer since 1999. From June1998 until December 1999, he served as corporate controller. Chad joined the company in 1990. Chad holds a Bachelor of Science degree and a Masters ofBusiness Administration from the Carlson School of Management at the University of Minnesota. Chad also served on the Board of Directors of XRSCorporation (NASDAQ: XRSC), a provider8Table of Contentsof vehicle data and fleet operations services to the trucking industry from February 2008 until March 2013, and the Board of Directors of Children's Hospitaland Clinics of Minnesota from January 2008 until January 2014.Thomas K. Mahlke was named vice president and chief information officer in August 2007. Prior to that time, he served as C.H. Robinson's corporatecontroller from December 1999 through August 2007. Tom joined the company in 1997 as an accounting manager. Before coming to C.H. Robinson, he wasa supervisory senior accountant of Arthur Andersen LLP. Tom holds Bachelor of Accountancy degree from the University of North Dakota.Christopher J. O'Brien was named a senior vice president in May 2012. He has served as a vice president since May 2003. Additional positions with C.H.Robinson include president of the company's European division and manager of the Raleigh, North Carolina, branch office. Chris joined the company in1993. He holds a Bachelor of Arts degree from Alma College in Alma, Michigan. Chris also serves on the Board of Trustees of the University of Minnesota'sLandscape Arboretum.Stéphane D. Rambaud was named a senior vice president in November 2012. Prior to that, he served as a chief executive officer for Phoenix International, aprivately-held international freight forwarder, which was acquired by C.H. Robinson in November 2012. Stéphane joined Phoenix in 1985 and prior tobecoming chief executive officer in 2007, he served as president from 2003 until 2007 and chief operating officer from 2000 until 2003. Stéphane completed hiseducation at Académie Commerciale Internationale in Paris, France.Scott A. Satterlee was named a senior vice president in December 2007. He has served as an executive and officer of C.H. Robinson since February 2002.Additional positions with C.H. Robinson include director of operations and manager of the Salt Lake City, Utah, branch. Scott joined the company in 1991.Scott holds a Bachelor of Arts degree from the University of St. Thomas. Scott also serves on the Board of Directors of Fastenal Company (NASDAQ:FAST), the largest fastener distributor in the nation.Mark A. Walker was named senior vice president in December 2007, after serving as a vice president and officer since December 1999. Additional positionswith C.H. Robinson include chief information officer from December 1999 to October 2001 and president of T-Chek. Mark joined the company in 1980.Mark holds a Bachelor of Science degree from Iowa State University and a Masters of Business Administration from the University of St. Thomas. Markhas announced that he will be retiring from the Company effective July 1, 2014.EmployeesAs of December 31, 2013, we had a total of 11,676 employees, 10,508 of whom were located in our branch offices. Services such as finance, informationtechnology, legal, marketing, and human resource support are supported centrally.Customer RelationshipsWe seek to establish long-term relationships with our customers and to increase the amount of business done with each customer by providing them with a fullrange of logistics services. During 2013, we served over 46,000 active customers worldwide, ranging from Fortune 100 companies to small businesses in awide variety of industries.During 2013, our largest customer accounted for approximately three percent of total revenues and approximately two percent of net revenues. In recent years,we have grown by adding new customers and by increasing our volumes with, and providing more services to, our existing customers.Branches seek additional business from existing customers and pursue new customers based on their knowledge of the marketplace and the range of logisticsservices that we can provide. We believe that our account management disciplines and decentralized structure enable our branch employees to better serve ourcustomers by combining a broad knowledge of logistics and market conditions with a deep understanding of the specific supply chain issues facingindividual customers and certain vertical industries. With the guidance of our executive team, branches are given significant latitude to pursue opportunitiesand to commit our resources to serve our customers.We have also expanded our corporate sales and marketing support to enhance branch sales capabilities. Branches also call on our executives and our corporatesales staff to support them in the pursuit of new business with companies that have more complex logistics requirements.9Table of ContentsRelationships with Transportation ProvidersWe continually work on establishing contractual relationships with qualified transportation providers that also meet our service requirements to assuredependable services, favorable pricing, and contract carrier availability during periods when demand for transportation equipment is greater than the supply.Because we own very little transportation equipment and do not employ the people directly involved with the delivery of our customers’ freight, theserelationships are critical to our success.In 2013, we worked with approximately 63,000 transportation providers worldwide, of which the vast majority are contracted motor carriers. To strengthenand maintain our relationships with motor carriers, our branch employees regularly communicate with carriers and try to assist them by increasing theirequipment utilization, reducing their empty miles, and repositioning their equipment. To make it easier for contract carriers to work with us, we have a policyof payment upon receipt of proof of delivery. For those contract carriers who would like a faster payment, we also offer payment within 48 hours of receipt ofproof of delivery in exchange for a discount, along with offering in-trip cash advances.Contracted motor carriers provide access to dry vans, temperature controlled vans, and flatbeds. These contract carriers are of all sizes, including owner-operators of a single truck, small and mid-size fleets, private fleets, and the largest national trucking companies. Consequently, we are not dependent on anyone contract carrier. Our largest truck transportation provider was approximately two percent of our total cost of transportation in 2013. Motor carriers that hadfewer than 100 tractors transported approximately 83 percent of our truckload shipments in 2013. Every motor carrier with which we do business is requiredto execute a contract that establishes that the carrier is acting as an independent contractor. At the time the contract is executed, and daily, through subscriptionswith a third party service, we assure that each motor carrier is properly licensed and insured, has the necessary federally-issued authority to providetransportation services, and has the ability to provide the necessary level of service on a dependable basis. Our motor carrier contracts require that the motorcarrier issue invoices only to and accept payment solely from us for the shipments that they transport under their contract with us, and allow us to withholdpayment to satisfy previous claims or shortages. Our standard contracts do not include volume commitments, and the initial contract rate is modified eachtime we confirm an individual shipment with a carrier.We also have intermodal marketing agreements with container owners and all Class 1 railroads in North America, giving us access to additional trailers andcontainers. Our contracts with railroads specify the transportation services and payment terms by which our intermodal shipments are transported by rail.Intermodal transportation rates are typically negotiated between us and the railroad on a customer-specific basis. We own approximately 1,000 53-footcontainers. We believe that these containers have helped us better serve our customers, and we will continue to analyze the strategy of controlling containers.In our NVOCC ocean transportation business, we have contracts with most of the major ocean carriers which support a variety of service and rate needs forour customers. We negotiate annual contracts that establish the predetermined rates we agree to pay the ocean carriers. The rates are negotiated based onexpected volumes from our customers in specific trade lanes. These contracts are often amended throughout the year to reflect changes in market conditions forour business, such as additional trade lanes.We operate both as a consolidator and as a transactional air freight forwarder internationally and in North America. We select air carriers and provide for localpickup and delivery of shipments. We execute our air freight services through our relationships with air carriers, through charter services, block spaceagreements, capacity space agreements, and transactional spot market negotiations. Through charter services, we contract part or all of an airplane to meetcustomer requirements. Our block space agreements and capacity space agreements are contracts for a defined time period. The contracts include fixedallocations for predetermined flights at agreed upon rates that are reviewed periodically throughout the year. The transactional negotiations afford us the abilityto capture excess capacity at prevailing market rates for a specific shipment.CompetitionThe transportation services industry is highly competitive and fragmented. We compete against a large number of logistics companies, trucking companies,property freight brokers, carriers offering logistics services, and freight forwarders. We also buy from and sell transportation services to companies thatcompete with us.In our Sourcing business, we compete with produce brokers, produce growers, produce marketing companies, produce wholesalers, and foodservice buyinggroups. We also buy from and sell produce to companies that compete with us.10Table of ContentsWe often compete with respect to price, scope of services, or a combination thereof, but believe that our most significant competitive advantages are:•People-Smart, dedicated, empowered people are an extension of our customers’ teams to innovate and execute their supply chain strategies;•Process-Proven processes and solutions combine strategy with practical experience for customized action plans that succeed in the real world;•Technology-A significant investment in our Navisphere® proprietary technology gives flexibility, global visibility, customized solutions, easyintegration, broad connectivity, and advanced security;•Network-Our customers gain local presence, regional expertise, and multiple global logistics options from one of the world’s largest providers oflogistics services;•Relationships-A large number of unique, strong relationships provide global connections and valuable market knowledge;•Portfolio of Services-A wide selection of services and products help provide our customers with consistent capacity and service levels;•Scale-Our customers leverage our industry-leading capacity, broad procurement options, and substantial shipment volumes for better efficiency,service, and marketplace advantages; and•Stability-Our financial strength, discipline, and consistent track record of success for strategic support of our customers’ supply chains.SeasonalityHistorically, our operating results have been subject to seasonal trends. In recent years, operating income and earnings have been lower in the first quarter thanin the other three quarters, although this was not our experience in 2013 or 2012. 2012 would have followed this pattern, but our fourth quarter results wereimpacted by certain significant event-specific charges and credits related to our acquisitions and divestitures. We believe this pattern has been the result of, orinfluenced by, numerous factors including national holidays, weather patterns, consumer demand, economic conditions, and other similar and subtleforces. Although seasonal changes in the transportation industry have not had a significant impact on our cash flow or results of operations, we expect thistrend to continue and we cannot guarantee that it will not adversely impact us in the future.Proprietary Information Technology and Intellectual PropertyOur information systems are essential to efficiently communicate, service our customers and contracted carriers, and manage our business. In 2013, weexecuted approximately 12.7 million shipments for more than 46,000 active customers and 63,000 contract carriers.We rely on a combination of trademarks, copyrights, trade secrets, and nondisclosure and non-competition agreements to establish and protect our intellectualproperty and proprietary technology. Additionally, we have numerous registered trademarks, trade names, and logos in the United States and internationallocations.In October 2012, we launched Navisphere®, a single platform that allows customers to communicate worldwide with every party in their supply chain acrosslanguages, currencies, and continents. Navisphere® offers sophisticated business analytics to help improve supply chain performance and meet increasingcustomer demands.The CHRWTrucks® web-based platform provides contracted carriers additional access to our systems. Contract carriers can access available freight, performon-line check calls, keep track of receivables, and upload scanned documentation. Many of our carriers favorite features from CHRWTrucks® are alsoavailable through our CHRWTrucks® mobile application available for Android and IOS mobile operating systems.Our systems help our branch employees service customer orders, select the optimal mode of transportation, build and consolidate shipments, and identifyappropriate carriers, all based on customer-specific service parameters. Our systems provide our vast organization the necessary business intelligence to allowfor real time scorecards and necessary decision support in all areas of our business.11Table of ContentsGovernment RegulationOur operations may be regulated and licensed by various federal, state, and local transportation agencies in the United States and similar governmentalagencies in foreign countries in which we operate.We are subject to licensing and regulation as a property freight broker and are licensed by the U.S. Department of Transportation (“DOT”) to arrange for thetransportation of property by motor vehicle. The DOT prescribes qualifications for acting in this capacity, including certain surety bonding requirements. Weare also subject to regulation by the Federal Maritime Commission as an ocean freight forwarder and a NVOCC and we maintain separate bonds and licensesfor each. We operate as a Department of Homeland Security certified Indirect Air Carrier, providing air freight services, subject to commercial standards setforth by the International Air Transport Association and federal regulations issued by the Transportation Security Administration. We provide customsbrokerage services as a customs broker under a license issued by the Bureau of U.S. Customs and Border Protection. We also have and maintain otherlicenses as required by law.Although Congress enacted legislation in 1994 that substantially preempts the authority of states to exercise economic regulation of motor carriers and brokersof freight, some intrastate shipments for which we arrange transportation may be subject to additional licensing, registration, or permit requirements. Wegenerally contractually require and/or rely on the carrier transporting the shipment to ensure compliance with these types of requirements. We, along with thecontracted carriers that we rely on in arranging transportation services for our customers, are also subject to a variety of federal and state safety andenvironmental regulations. Although compliance with the regulations governing licensees in these areas has not had a materially adverse effect on our operationsor financial condition in the past, there can be no assurance that such regulations or changes thereto will not adversely impact our operations in the future.Violation of these regulations could also subject us to fines as well as increased claims liability.We source fresh produce under licenses issued by the U.S. Department of Agriculture as required by the Perishable Agricultural Commodities Act (“PACA”).Other sourcing and distribution activities may be subject to various federal and state food and drug statutes and regulations.We are subject to a variety of other U.S. and foreign laws and regulations including, but not limited to, the Foreign Corrupt Practices Act and other similaranti-bribery and anti-corruption statutes.Risk Management and InsuranceWe contractually require all motor carriers we work with to carry at least $750,000 in automobile liability insurance and $25,000 in cargo insurance. We alsorequire all motor carriers to maintain workers compensation and other insurance coverage as required by law. Many carriers have insurance exceeding theseminimum requirements. Railroads, which are generally self-insured, provide limited common carrier liability protection, generally up to $250,000 pershipment.As a property freight broker, we are not legally liable for damage to our customers’ cargo. In our customer contracts, we may agree to assume cargo liability upto a stated maximum. We typically do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding,ocean transportation, and air freight businesses. We do offer our customers the option to purchase shippers interest coverage to insure goods in transit. Whenwe agree to store goods for our customers for longer terms, we provide limited warehouseman’s coverage to our customers and contract for warehousingservices from companies that provide us the same degree of coverage.We maintain a broad cargo liability insurance policy to help protect us against catastrophic losses that may not be recovered from the responsible contractedcarrier. We also carry various liability insurance policies, including automobile and general liability, with a $200 million umbrella. Our contingent automobileliability coverage has a retention of $5 million per incident.As a seller of produce, we may, under certain circumstances, have legal responsibility arising from produce sales. We carry product liability coverage underour general liability and umbrella policies to cover tort claims. In addition, in the event of a recall, we may be required to bear the costs of repurchasing,transporting, and destroying any allegedly contaminated product, as well as potential consequential damages which were generally not insured. Beginning in2012, we carry product recall insurance coverage of $50 million. This policy has a retention of $5 million per incident.Investor InformationWe were reincorporated in Delaware in 1997 as the successor to a business existing, in various legal forms, since 1905. Our corporate office is located at14701 Charlson Road, Eden Prairie, Minnesota, 55347-5088, and our telephone number is (952) 937-8500. Copies of our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of theSecurities Exchange Act of 193412Table of Contentsare available free of charge through our website (www.chrobinson.com) as soon as reasonably practicable after we electronically file the material with theSecurities and Exchange Commission.Cautionary Statement Relevant to Forward-Looking InformationThis Annual Report on Form 10-K and our financial statements, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”in Item 7 of Part II of this report and other documents incorporated by reference contain certain “forward-looking statements” within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Form 10-Kand in our other filings with the Securities and Exchange Commission, in our press releases, presentations to securities analysts or investors, in oralstatements made by or with the approval of any of our executive officers, the words or phrases “believes,” “may,” “could,” “will,” “expects,” “should,”“continue,” “anticipates,” “intends,” “will likely result,” “estimates,” “projects,” or similar expressions and variations thereof are intended to identify suchforward-looking statements.Except for the historical information contained in this Form 10-K, the matters set forth in this document may be deemed to be forward-looking statements thatrepresent our expectations, beliefs, intentions, or strategies concerning future events. These forward-looking statements are subject to certain risks anduncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, suchfactors such as changes in economic conditions including uncertain consumer demand; changes in market demand and pressures on the pricing for ourservices; competition and growth rates within the third party logistics industry; freight levels and increasing costs and availability of truck capacity oralternative means of transporting freight; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer basedue to possible consolidation among our customers; our ability to successfully integrate the operations of acquired companies with our historic operations;risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with operations outside of the U.S.; risksassociated with the potential impacts of changes in government regulations; risks associated with the produce industry, including food safety andcontamination issues; fuel price increases or shortages; the impact of war on the economy; changes to our capital structure and termination of our acceleratedshare repurchase program, and other risks and uncertainties, including those described below. Forward-looking statements speak only as of the date they weremade. We undertake no obligation to update these statements in light of subsequent events or developments. ITEM 1A.RISK FACTORSYou should consider carefully the following cautionary statements if you own our common stock or are planning to buy our common stock. We intend to takeadvantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) by providing this discussion.Economic recessions could have a significant, adverse impact on our business. The transportation industry historically has experienced cyclicalfluctuations in financial results due to economic recession, downturns in business cycles of our customers, interest rate fluctuations, and other economicfactors beyond our control. Deterioration in the economic environment subjects our business to various risks, which may have a material impact on ouroperating results and cause us to not reach our long-term growth goals:•Decrease in volumes-A reduction in overall freight volumes in the marketplace reduces our opportunities for growth. A significant portion of ourfreight is transactional or “spot” market opportunities. The transactional market may be more impacted than the freight market overall by theeconomic recession. In addition, if a downturn in our customers’ business cycles causes a reduction in the volume of freight shipped by thosecustomers, particularly among certain national retailers or in the food, beverage, retail, manufacturing, paper, or printing industries, our operatingresults could be adversely affected.•Credit risk and working capital-Some of our customers may face economic difficulties and may not be able to pay us, and some may go out ofbusiness. In addition, some customers may not pay us as quickly as they have in the past, causing our working capital needs to increase.•Transportation provider failures-A significant number of our transportation providers may go out of business and we may be unable to securesufficient equipment or other transportation services to meet our commitments to our customers.•Expense management-We may not be able to appropriately adjust our expenses to changing market demands. Personnel is our largest expense. In orderto maintain high variability in our business model, it is necessary to adjust staffing levels to changing market demands. In periods of rapid change,it is more difficult to match our staffing level13Table of Contentsto our business needs. In addition, we have other expenses that are fixed for a period of time, and we may not be able to adequately adjust them in aperiod of rapid change in market demand.Higher carrier prices may result in decreased net revenue margin. Carriers can be expected to charge higher prices if market conditions warrant, or tocover higher operating expenses. Our net revenues and income from operations may decrease if we are unable to increase our pricing to our customers.Increased demand for truckload services and pending changes in regulations may reduce available capacity and increase carrier pricing.Changing fuel costs may have an impact on our net revenue margins. In our truckload transportation business, which is the largest source of our netrevenues, rising fuel prices may result in a decreased net revenue margin. While our different pricing arrangements with customers and contracted carriersmake it very difficult to measure the precise impact, we believe that fuel costs essentially act as a pass-through cost to our truckload business. In times ofhigher fuel prices, our net revenue margin percentage declines.Our dependence on third parties to provide equipment and services may impact the delivery and quality of our transportation and logisticsservices. We do not employ the people directly involved in delivering our customers’ freight. We are dependent on independent third parties to provide truck,rail, ocean, and air services and to report certain events to us, including delivery information and freight claims. These independent third parties may notfulfill their obligations to us, preventing us from meeting our commitments to our customers. This reliance also could cause delays in reporting certain events,including recognizing revenue and claims. In addition, if we are unable to secure sufficient equipment or other transportation services from third parties to meetour commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitorstemporarily or permanently. Many of these risks are beyond our control including:•equipment shortages in the transportation industry, particularly among contracted truckload carriers;•interruptions in service or stoppages in transportation as a result of labor disputes;•changes in regulations impacting transportation; and•unanticipated changes in transportation rates.We are subject to negative impacts of changes in political conditions. All of our business operations are subject to the influences of significant politicalchanges and our ability to respond to them, including:•changes in economic and political conditions and in governmental policies;•changes in and compliance with international and domestic laws and regulations; and•wars, civil unrest, acts of terrorism, and other conflicts.We may be subject to negative impacts of catastrophic events. A disruption or failure of our systems or operations in the event of a major earthquake,weather event, cyber-attack, terrorist attack, strike, civil unrest, pandemic or other catastrophic event could cause delays in providing services or performingother critical functions. A catastrophic event that results in the destruction or disruption of any of our critical business or information systems could harm ourability to conduct normal business operations and adversely impact our operating results.Our international operations subject us to operational and financial risks. We provide services within and between continents on an increasing basis.Our business outside of the United States is subject to various risks, including:•changes in tariffs, trade restrictions, trade agreements, and taxations;•difficulties in managing or overseeing foreign operations and agents;•limitations on the repatriation of funds because of foreign exchange controls;•different liability standards; and•intellectual property laws of countries which do not protect our rights in our intellectual property, including, but not limited to, our proprietaryinformation systems, to the same extent as the laws of the United States.The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of ouroperations in that region.14Table of ContentsAs we expand our business in foreign countries, we will expose the company to increased risk of loss from foreign currency fluctuations and exchangecontrols as well as longer accounts receivable payment cycles. We have limited control over these risks, and if we do not correctly anticipate changes ininternational economic and political conditions, we may not alter our business practices in time to avoid adverse effects.Our ability to appropriately staff and retain employees is important to our variable cost model. Our continued success depends upon our ability toattract and retain a large group of motivated salespersons and other logistics professionals. In order to maintain high variability in our business model, it isnecessary to adjust staffing levels to changing market demands. In periods of rapid change, it is more difficult to match our staffing level to our businessneeds. We cannot guarantee that we will be able to continue to hire and retain a sufficient number of qualified personnel. Because of our comprehensiveemployee training program, our employees are attractive targets for new and existing competitors. Continued success depends in large part on our ability todevelop successful employees into managers.We face substantial industry competition. Competition in the transportation services industry is intense and broad-based. We compete against logisticscompanies as well as transportation providers that own equipment, third party freight brokers, internet matching services, internet freight brokers, andcarriers offering logistics services. We also compete against carriers’ internal sales forces. In addition, customers can bring in-house some of the services weprovide to them. We often buy and sell transportation services from and to many of our competitors. Increased competition could reduce our marketopportunity and create downward pressure on freight rates, and continued rate pressure may adversely affect our net revenue and income from operations.We are reliant on technology to operate our business. We have internally developed the majority of our operating systems. Our continued success isdependent on our systems continuing to operate and to meet the changing needs of our customers and users. We are reliant on our technology staff and vendorsto successfully implement changes to and maintain our operating systems in an efficient manner.As demonstrated by recent material and high-profile data security breaches, computer malware, viruses, and computer hacking and phishing attacks havebecome more prevalent, have occurred on our systems in the past, and may occur on our systems in the future. Previous attacks on our systems have not hada material financial impact on our operations, but we cannot guarantee that future attacks will have little to no impact on our business. Furthermore, given theinterconnected nature of the supply chain and our significant presence in the industry, we believe that we may be an attractive target for such attacks.Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, a significant impact on the performance,reliability, security and availability of our systems and technical infrastructure to the satisfaction of our users may harm our reputation, impair our ability toretain existing customers and attract new customers and expose us to legal claims and government action, each of which could have a material adverse impacton our financial condition, results of operations and growth prospects.Because we manage our business on a decentralized basis, our operations may be materially adversely affected by inconsistent managementpractices. We manage our business on a decentralized basis through a network of branch offices throughout North America, Europe, Asia, South America,and Australia, supported by executives and shared and centralized services, with branch management retaining responsibility for day-to-day operations,profitability, personnel decisions, the growth of the business in their branch, and adherence to applicable local laws. Our decentralized operating strategy canmake it difficult for us to implement strategic decisions and coordinated procedures throughout our global operations. In addition, some of our branchesoperate with management, sales, and support personnel that may be insufficient to support growth in their respective branch without significant centraloversight and coordination. Our decentralized operating strategy could result in inconsistent management practices and materially and adversely affect ouroverall profitability and expose us to litigation.Our earnings may be affected by seasonal changes in the transportation industry. Results of operations for our industry generally show a seasonalpattern as customers reduce shipments during and after the winter holiday season. In recent years, our operating income and earnings have been lower in thefirst quarter than in the other three quarters, although this was not our experience in 2013 or 2012. 2012 would have followed this pattern, but our fourthquarter results were impacted by certain significant event-specific charges and credits related to our acquisitions and divestitures. Although seasonal changesin the transportation industry have not had a significant impact on our cash flow or results of operations, we expect this trend to continue and we cannotguarantee that it will not adversely impact us in the future.15Table of ContentsWe are subject to claims arising from our transportation operations. We use the services of thousands of transportation companies in connection withour transportation operations. From time to time, the drivers employed and engaged by the carriers we contract with are involved in accidents which may resultin serious personal injuries. The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by thecontracted carrier. Although these drivers are not our employees and all of these drivers are employees, owner-operators, or independent contractors working forcarriers, from time to time, claims may be asserted against us for their actions, or for our actions in retaining them. Claims against us may exceed the amountof our insurance coverage, or may not be covered by insurance at all. In addition, our automobile liability policy has a retention of $5 million per incident in2011, 2012, and 2013. A material increase in the frequency or severity of accidents, liability claims or workers’ compensation claims, or unfavorableresolutions of claims could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability topurchase insurance as a result of these claims could reduce our profitability. Our involvement in the transportation of certain goods, including but not limitedto hazardous materials, could also increase our exposure in the event one of our contracted carriers is involved in an accident resulting in injuries orcontamination.Our Sourcing business is dependent upon the supply and price of fresh produce. The supply and price of fresh produce is affected by weather andgrowing conditions (such as drought, insects, and disease) and other conditions over which we have no control. Commodity prices can be affected byshortages or overproduction and are often highly volatile. If we are unable to secure fresh produce to meet our commitments to our customers, our operatingresults could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. To assure access to certaincommodities, we occasionally make advances to growers to finance their operations. Repayment of these advances is dependent upon the growers ability togrow and harvest marketable crops.Sourcing and reselling fresh produce exposes us to possible product liability. Agricultural chemicals used on fresh produce are subject to variousapprovals, and the commodities themselves are subject to regulations on cleanliness and contamination. This risk is mitigated in the majority of cases wherewe source produce, as we do not handle or package the product. Product recalls in the produce industry have been caused by concern about particularchemicals and alleged contamination, often leading to lawsuits brought by consumers of allegedly affected produce. Because we sell produce, we may faceclaims for a variety of damages arising from the sale which may include potentially uninsured consequential damages. While we are insured for up to $201million for product liability claims, settlement of class action claims is often costly, and we cannot guarantee that our liability coverage will be adequate andwill continue to be available. If we have to recall produce, we may be required to bear the cost of repurchasing, transporting, and destroying any allegedlycontaminated product, as well as consequential damages, which our insurance did not cover prior to 2012. Beginning in 2012, we carry product recallinsurance coverage of $50 million. This policy has a retention of $5 million per incident. Any recall or allegation of contamination could affect our reputation,particularly of our proprietary and/or licensed branded produce programs. Loss due to spoilage (including the need for disposal) is also a routine part of thesourcing business.Our business depends upon compliance with numerous government regulations. Our business operations are regulated and licensed by various federal,state, and local transportation agencies in the United States and similar governmental agencies in foreign countries in which we operate. We are licensed by theU.S. Department of Transportation as a property freight broker authorized to arrange for the transportation of general commodities by motor vehicle. We mustcomply with certain insurance and surety bond requirements to act in this capacity. We are also licensed by the Federal Maritime Commission as an oceanfreight forwarder, which requires us to maintain a NVOCC bond and by the Transportation Security Administration as an independent air carrier. We are alsolicensed by the Bureau of U.S. Customs and Border Protection. We source fresh produce under a license issued by the U.S. Department of Agriculture. We arealso subject to various regulations and requirements promulgated by other international, domestic, state, and local agencies and port authorities. Our failure tocomply with the laws and regulations applicable to entities holding these licenses could materially and adversely affect our results of operations or financialcondition.Legislative or regulatory changes can affect the economics of the transportation industry by requiring changes in operating practices or influencing the demandfor, and the cost of providing, transportation services. As part of our logistics services, we operate leased warehouse facilities. Our operations at these facilitiesinclude both warehousing and distribution services, and we are subject to various federal, state, and international environmental, work safety, and hazardousmaterials regulations. We may experience an increase in operating costs, such as costs for security, as a result of governmental regulations that have been andwill be adopted in response to terrorist activities and potential terrorist activities. No assurances can be given that we will be able to pass these increased costson to our customers in the form of rate increases or surcharges.Department of Homeland Security regulations applicable to our customers who import goods into the United States and our contracted ocean carriers canimpact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow andor prevent the delivery of shipments, which may negatively impact our operations.16Table of ContentsWe cannot predict what impact future regulations may have on our business. Our failure to maintain required permits or licenses, or to comply with applicableregulations, could result in substantial fines or revocation of our operating permits and licenses.A significant increase in fraud or theft could adversely affect our results. We have exposure to both internal and external fraud and theft. Unauthorizedor fraudulent requests for advances or payment can occur. A significant increase in fraudulent activity could adversely affect our results.We derive a significant portion of our total revenues and net revenues from our largest customers. Our top 100 customers comprise approximately 32percent of our consolidated total revenues and 28 percent of consolidated net revenues. Our largest customer comprises approximately three percent of ourconsolidated total revenues and approximately two percent of our consolidated net revenues. The sudden loss of many of our major clients could materially andadversely affect our operating results.We may be unable to identify or complete suitable acquisitions and investments. We may acquire or make investments in complementary businesses,products, services, or technologies. We cannot guarantee that we will be able to identify suitable acquisitions or investment candidates. Even if we identifysuitable candidates, we cannot guarantee that we will make acquisitions or investments on commercially acceptable terms, if at all. In addition, we may incurdebt or be required to issue equity securities to pay for future acquisitions or investments. The issuance of any equity securities could be dilutive to ourstockholders.We may have difficulties integrating acquired companies. For acquisitions, success is also dependent upon efficiently integrating the acquired businessinto our existing operations. These risks could be heightened if we complete a large acquisition or multiple acquisitions within a short period of time. We arerequired to integrate these businesses into our internal control environment, which may present challenges that are different than those presented by organicgrowth and that may be difficult to manage. If we are unable to successfully integrate and grow these acquisitions and to realize contemplated revenue synergiesand cost savings, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected.Our growth and profitability may not continue, which may result in a decrease in our stock price. Our long-term growth objective is to grow earningsper share by ten percent. There can be no assurance that our long-term growth objective will be achieved or that we will be able to effectively adapt ourmanagement, administrative, and operational systems to respond to any future growth. Future changes in and expansion of our business, or changes ineconomic or political conditions, could adversely affect our operating margins. Slower or less profitable growth or losses could adversely affect our stockprice. ITEM 1B.UNRESOLVED STAFF COMMENTSNone.17Table of ContentsITEM 2.PROPERTIESOur corporate headquarters is in Eden Prairie, Minnesota. The total square footage of our four buildings in Eden Prairie is 357,000. This total includesapproximately 221,000 square feet used for our corporate and shared services, our data center of approximately 18,000 square feet, and 118,000 square feetused for branch operations.Most of our branch offices are leased from third parties under leases with initial terms ranging from three to fifteen years. Our office locations range in spacefrom 1,000 to 153,000 square feet. The following table lists our office locations of greater than 20,000 square feet:LocationApproximateSquare FeetEden Prairie, MN153,000Eden Prairie, MN(1)105,000Eden Prairie, MN(1)81,000Chicago, IL(1)80,000Wood Dale, IL72,000Chicago, IL48,000Atlanta, GA27,000Elk Grove Village, IL25,000Woodridge, IL22,000Chicago, IL21,000 ____________________________(1)These properties are owned. All other properties in the table above are leased from third parties.We also own or lease warehouses totaling approximately 1.4 million square feet of warehouse space in 42 cities around the world. The following table lists ourwarehouses over 50,000 square feet:LocationApproximateSquare FeetLong Beach, CA223,000Elk Grove Village, IL107,000Wroclaw, Poland104,000Laredo, TX87,000Vancouver, WA79,000Miramar, FL75,000Blonie, Poland65,000Plant City, FL(1)65,000Doral, FL59,000Bethlehem, PA55,000Cobden, IL(1)52,000 ____________________________(1)These properties are owned. All other properties in the table above are leased from third parties.We consider our current office spaces and warehouse facilities adequate for our current level of operations. We have not had difficulty in obtaining sufficientoffice space and believe we can renew existing leases or relocate branches to new offices as leases expire.18Table of ContentsITEM 3.LEGAL PROCEEDINGSWe are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations. For such legalproceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidatedfinancial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining theapplicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predictingthe settlement value of many of these proceedings, we are not able to estimate an amount or range of any reasonably possible additional losses. However, basedupon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results ofoperations, or cash flows. ITEM 4.MINE SAFETY DISCLOSURESNot applicable. 19Table of ContentsPART IIITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUERPURCHASES OF EQUITY SECURITIESOur Common Stock began trading on The NASDAQ National Market under the symbol “CHRW” on October 15, 1997, and currently trades on theNASDAQ Global Select Market.Quarterly market information can be found in Part II, Item 8. Financial Statements and Supplementary Data, Note 11.On February 24, 2014, the closing sales price per share of our Common Stock as quoted on the NASDAQ Global Select Market was $53.34 per share. OnFebruary 24, 2014, there were approximately 165 holders of record and approximately 66,500 beneficial owners of our Common Stock.We declared quarterly dividends during 2012 for an aggregate of $1.34 per share and quarterly dividends during 2013 for an aggregate of $1.40 per share. Wehave declared a quarterly dividend of $0.35 per share payable to shareholders of record as of March 7, 2014, payable on March 31, 2014. Our declaration ofdividends is subject to the discretion of the Board of Directors. Any determination as to the payment of dividends will depend upon our results of operations,capital requirements and financial condition, and such other factors as the Board of Directors may deem relevant. Accordingly, there can be no assurance thatthe Board of Directors will declare or continue to pay dividends on the shares of Common Stock in the future.The following table provides information about company purchases of Common Stock during the quarter ended December 31, 2013: Total Numberof Shares(or Units)Purchased (a) Average PricePaid PerShare(or Unit) Total Number ofShares (or Units)Purchased as Part ofPublicly AnnouncedPlans or Programs (a) Maximum Number ofShares (or Units)That May Yet BePurchased Under thePlans or Programs (b)October 1, 2013-October 31, 2013768,487 $59.48 768,487 16,035,953November 1, 2013-November 30, 2013421,571 59.60 421,571 15,614,382December 1, 2013-December 31, 20131,544,457 61.57 1,544,457 14,069,925Fourth quarter 20132,734,515 $60.68 2,734,515 14,069,925________________________________ (a) The following shares were repurchased under the authorizations described below: (i) 1,194,481 shares of Common Stock purchased under the terms of theaccelerated share repurchase agreements entered into in August 2013 (see Note 9 to the consolidated financial statements included in Item 8 of Part II of thisreport); and (ii) 1,540,034 shares of Common Stock purchased.(b) In August 2013, the Board of Directors increased the number of shares authorized to be repurchased by 15,000,000 shares. As of December 31, 2013, therewere 14,069,925 shares remaining for future repurchases. Purchases can be made in the open market or in privately negotiated transactions, including Rule10b5-1 plans and accelerated share repurchase programs.20Table of ContentsThe graph below compares the cumulative 5-year total return of holders of C.H. Robinson Worldwide, Inc.’s Common Stock with the cumulative total returnsof the S&P 500 index, the NASDAQ Transportation index, and the S&P Midcap 400 index. The graph tracks the performance of a $100 investment in ourCommon Stock and in each index (with the reinvestment of all dividends) from December 31, 2008 to December 31, 2013. December 31, 2008 2009 2010 2011 2012 2013C.H. Robinson Worldwide, Inc.100.00 108.79 151.01 133.63 123.77 117.07S&P 500100.00 126.46 145.51 148.59 172.37 228.19S&P Midcap 400100.00 137.38 173.98 170.96 201.53 269.04NASDAQ Transportation100.00 102.37 131.79 113.27 123.81 162.78The stock price performance included in this graph is not necessarily indicative of future stock price performance.21Table of ContentsITEM 6.SELECTED FINANCIAL DATAThis table includes selected financial data for the last five years (amounts in thousands, except per share amounts and operating data for branches andemployees). This financial data should be read together with our consolidated financial statements and related notes, Management’s Discussion and Analysisof Financial Condition and Results of Operations, and other financial data appearing elsewhere in this report. STATEMENT OF OPERATIONS DATA Year Ended December 31,2013 2012 (1) 2011 2010 2009Total revenues$12,752,076 $11,359,113 $10,336,346 $9,274,305 $7,577,189Net revenues1,836,095 1,717,571 1,632,658 1,467,978 1,381,959Income from operations682,650 675,320 692,730 622,860 584,811Net income415,904 593,804 431,612 387,026 360,830Net income per share Basic$2.65 $3.68 $2.63 $2.35 $2.15Diluted$2.65 $3.67 $2.62 $2.33 $2.13Weighted average number of shares outstanding (inthousands) Basic156,915 161,557 164,114 164,909 167,695Diluted157,080 161,946 164,741 165,972 169,194Dividends per share$1.40 $1.34 $1.20 $1.04 $0.97 BALANCE SHEET DATA As of December 31, Working capital$394,504 $440,073 $734,911 $710,161 $575,462Total assets2,802,818 2,804,225 2,138,041 1,995,699 1,834,248Current portion of long term debt375,000 253,646 — — —Long-term notes payable500,000 — — — —Stockholders’ investment939,724 1,504,372 1,248,474 1,204,068 1,079,900 OPERATING DATA Branches285 276 235 231 235Employees11,676 10,929 8,353 7,628 7,347_________________________ (1)The Company's results for 2012 were effected by certain significant event-specific charges or credits related to our acquisitions and divestitures. See "Reported to AdjustedStatements of Operations Data" on the following page and Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of this report.22Table of ContentsNon-GAAP Data ReconciliationTo assist readers in understanding our financial performance and the impact of certain significant charges or credits related to our acquisitions anddivestitures in 2012, we supplement the financial results that are generated in accordance with the accounting principles generally accepted in the UnitedStates, or GAAP, with non-GAAP financial measures. These measures include non-GAAP income from operations, non-GAAP net income, and non-GAAPbasic and diluted net income per share. We believe that these non-GAAP measures provide meaningful insight into our operating performance excluding certainevent-specific charges, and provide an alternative perspective of our results of operations. We use non-GAAP measures, including those set forth in the tablebelow, to assess our operating performance for the year. Management believes that these non-GAAP financial measures reflect an additional way of analyzingaspects of our ongoing operations that, when viewed with our GAAP results, provides a more complete understanding of the factors and trends affecting ourbusiness. A reconciliation of adjusted results, reflecting the exclusion of certain non-recurring transaction impacts, to our GAAP results is set forth below.Reported to Adjusted Statements of Operations Data (in thousands, except per share amounts)Non-GAAP Financial Measures2013 2012 2011 2010 2009 Income from Operations$682,650 $675,320 $692,730 $622,860 $584,811 Adjustments to Income from Operations (1)— 45,196 — — —Income from Operations-Adjusted$682,650 $720,516 $692,730 $622,860 $584,811 Investment and Other (Expense) Income$(9,289) $283,142 $1,974 $1,242 $2,250 Adjustments to Investment and Other (Expense) Income (2)— (281,551) — — —Investment and Other Income-Adjusted$(9,289) $1,591 $1,974 $1,242 $2,250 Income before Income Taxes$673,361 $958,462 $694,704 $624,102 $587,061 Adjustments to Income before Income Taxes— (236,355) — — —Income before Income Taxes-Adjusted$673,361 $722,107 $694,704 $624,102 $587,061 Net Income$415,904 $593,804 $431,612 $387,026 $360,830 Adjustments to Net Income— (146,797) — — —Net Income-Adjusted$415,904 $447,007 $431,612 $387,026 $360,830 Net Income per Share (basic)-Adjusted$2.65 $2.77 $2.63 $2.35 $2.15Net Income per Share (diluted)-Adjusted$2.65 $2.76 $2.62 $2.33 $2.13_________________________ (1)The adjustment to income from operations includes $34.6 million of personnel expense and $10.6 million of other selling, general, and administrative expenses. Adjustments to personnel expense include $33.0million in incremental vesting expense of our equity awards triggered by the gain on the divestiture of T-Chek and $1.4 million of transaction-related bonuses. Adjustments to other selling, general, andadministrative expenses include amounts paid to third parties for investment banking, legal, and accounting fees related to acquisitions and divestitures.(2)The adjustment to investment and other income reflects the gain from the divestiture of T-Chek.23Table of ContentsITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSRESULTS OF OPERATIONSThe following table summarizes our total revenues by service line (in thousands):For the years ended December 31,2013 2012 Change 2011 ChangeTransportation$11,069,710 $9,685,415 14.3 % $8,740,524 10.8 %Sourcing1,669,134 1,620,183 3.0 1,535,528 5.5Payment Services13,232 53,515 (75.3) 60,294 (11.2)Total$12,752,076 $11,359,113 12.3 % $10,336,346 9.9 %The following table illustrates our net revenue margins by services and products: For the years ended December 31,2013 2012 2011Transportation15.3% 15.8% 16.5%Sourcing7.6 8.4 8.4Payment Services81.2 99.0 100.0Total14.4% 15.1% 15.8%The following table summarizes our net revenues by service line: For the years ended December 31,(Dollars in thousands)2013 2012 Change 2011 ChangeNet revenues: Transportation Truckload$1,054,565 $1,060,120 (0.5)% $1,037,876 2.1 %LTL239,477 224,160 6.8 198,735 12.8Intermodal39,084 38,815 0.7 41,189 (5.8)Ocean187,671 84,924 121.0 66,873 27.0Air73,089 44,444 64.5 39,371 12.9Customs36,578 18,225 100.7 13,100 39.1Other Logistics Services67,931 57,449 18.2 46,772 22.8Total Transportation1,698,395 1,528,137 11.1 1,443,916 5.8Sourcing126,950 136,438 (7.0) 128,448 6.2Payment Services10,750 52,996 (79.7) 60,294 (12.1)Total$1,836,095 $1,717,571 6.9 % $1,632,658 5.2 %24Table of ContentsThe following table represents certain statements of operations data, shown as percentages of our net revenues:For the years ended December 31,2013 2012 2011Net revenues100.0 % 100.0% 100.0%Operating expenses: Personnel expenses45.0 44.6 42.6Other selling, general, and administrative expenses17.8 16.1 14.9Total operating expenses62.8 60.7 57.6Income from operations37.2 39.3 42.4Investment and other income(0.5) 16.5 0.1Income before provision for income taxes36.7 55.8 42.6Provision for income taxes14.0 21.2 16.1Net income22.7 % 34.6% 26.4%OVERVIEWOur company. We are a global provider of transportation services and logistics solutions, operating through a network of branch offices in North America,Europe, Asia, South America, and Australia. As a third party logistics provider, we enter into contractual relationships with a wide variety of transportationcompanies, and utilize those relationships to efficiently and cost effectively transport our customers’ freight. We have contractual relationships withapproximately 63,000 transportation companies, including motor carriers, railroads (primarily intermodal service providers), air freight, and ocean carriers.Depending on the needs of our customer and their supply chain requirements, we select and hire the appropriate transportation for each shipment. Our modelenables us to be flexible, provide solutions that optimize service for our customers, and minimize our asset utilization risk.In addition to transportation and logistics services, we also offer fresh produce sourcing and fee-based payment services. Our Sourcing business is thebuying, selling, and marketing of fresh produce. We purchase fresh produce through our network of produce suppliers and sell it to retail grocers andrestaurant chains, produce wholesalers, and foodservice providers. In some cases, we also arrange the transportation of the produce we sell through ourrelationships with specialized transportation companies. Those revenues are reported as Transportation revenues. Historically, our Payment Services businessconsisted primarily of our former subsidiary T-Chek Systems, Inc. ("T-Chek"), which provided a variety of management and business intelligence servicesto motor carrier companies and to fuel distributors. On October 16, 2012, we sold substantially all of the assets and transferred certain liabilities of T-Chek toElectronic Funds Source ("EFS"). We continue to generate Payment Services revenues from the cash advance options we offer our contracted carriers.Our business model. We are primarily a service company. We add value and expertise in the procurement and execution of transportation and logistics,including sourcing of produce products for our customers. Our total revenues represent the total dollar value of services and goods we sell to our customers.Our net revenues are our total revenues less purchased transportation and related services, including contracted motor carrier, rail, ocean, air, and other costs,and the purchase price and services related to the products we source. Our net revenues are the primary indicator of our ability to source, add value, and sellservices and products that are provided by third parties, and we consider them to be our primary performance measurement. Accordingly, the discussion ofour results of operations below focuses on the changes in our net revenues.We keep our business model as variable as possible to allow us to be flexible and adapt to changing economic and industry conditions. We sell transportationservices and produce to our customers with varied pricing arrangements. Some prices are committed to for a period of time, subject to certain terms andconditions, and some prices are set on a spot market basis. We buy most of our truckload transportation capacity and produce on a spot market basis.Because of this, our net revenue per transaction tends to increase in times when there is excess supply and decrease in times when demand is strong relative tosupply. We also keep our personnel and other operating expenses as variable as possible. Compensation is performance-oriented and, for most employees in thebranch network, based on the profitability of their individual branch office.In addition, we do not have pre-committed targets for headcount. Our personnel decisions are decentralized. Our branch managers determine the appropriatenumber of employees for their offices, within productivity guidelines, based on their branch's volume of business. This helps keep our personnel expense asvariable as possible with the business.25Table of ContentsOur branch network. Our branch network is a competitive advantage. Building local customer and contract carrier relationships has been an important partof our success, and our worldwide network of offices supports our core strategy of serving customers locally, nationally, and globally. Our branch officeshelp us penetrate local markets, provide face-to-face service when needed, and recruit contract carriers. Our branch network also gives us knowledge of localmarket conditions, which is important in the transportation industry because it is market driven and very dynamic.In October 2012, we acquired all of the outstanding stock of the operating subsidiaries of Apreo Logistics S.A. ("Apreo"), a leading freight forwarder based inWarsaw, Poland. This acquisition enhances our truckload capabilities in Europe. In November 2012, we acquired all of the outstanding stock of PhoenixInternational Freight Services, Ltd, ("Phoenix"), an international freight forwarder based in Chicago, Illinois. Phoenix has a strong track record and diversecustomer base in the international freight forwarding industry. This acquisition expanded our global forwarding network.Our branches work together to complete transactions and collectively meet the needs of our customers. For large multi-location customers, we often coordinateour efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. As an example, approximately 46 percent of ourtruckload shipments are shared transactions between branches. Our methodology of providing services is very similar across all branches. The majority ofour global network operates on a common technology platform that is used to match customer needs with supplier capabilities, to collaborate with other branchlocations, and to utilize centralized support resources to complete all facets of the transaction.Our people. Because we are a service company, our continued success is dependent on our ability to continue to hire and retain talented, productive people,and to properly align our headcount and personnel expense with our business. Our headcount grew by 747 employees during 2013. Branch employees act as ateam in their sales efforts, customer service, and operations. A significant portion of many of our branch employees’ compensation is performance-oriented,based on individual performance and the profitability of their branch. We believe this makes our employees more service-oriented and focused on drivinggrowth and maximizing office productivity. All of our managers and certain other employees who have significant responsibilities are eligible to receive equityawards because we believe these awards are an effective tool for creating long-term ownership and alignment between employees and our shareholders.Generally, these awards are eligible to vest over five-year periods and also include financial performance-based requirements for management employees. In2012 and 2013, we also issued restricted equity awards that vest evenly over five years, starting on December 31, 2013 and December 31, 2014.Our customers. In 2013, we worked with more than 46,000 active customers, up from approximately 42,000 in 2012. We work with a wide variety ofcompanies, ranging in size from Fortune 100 companies to small family businesses, in many different industries. Our customer base is very diverse andunconcentrated. Our top 100 customers represented approximately 32 percent of our total revenues and approximately 28 percent of our net revenues. Ourlargest customer was approximately three percent of our total revenues and approximately two percent of our total net revenues.Our contracted carriers. Our contracted carrier base includes motor carriers, railroads (primarily intermodal service providers), air freight, and oceancarriers. In 2013, our carrier base was approximately 63,000, up from approximately 56,000 in 2012. Motor carriers that had fewer than 100 tractorstransported approximately 83 percent of our truckload shipments in 2013. In our Transportation business, no single contracted carrier represents more thanapproximately two percent of our contracted carrier capacity.2013 COMPARED TO 2012Total revenues and direct costs. Our consolidated total revenues increased 12.3 percent in 2013 compared to 2012. Total Transportation revenues increased14.3 percent to $11.1 billion in 2013 from $9.7 billion in 2012. This increase was driven by higher volumes in nearly all of our transportation modes, thePhoenix acquisition, and increased pricing to our customers, including the impacts of higher fuel costs. Total purchased transportation and related servicesincreased 14.9 percent in 2013 to $9.4 billion from $8.2 billion in 2012. This increase was due to higher volumes in nearly all of our transportation modes,the Phoenix acquisition, and higher transportation costs. Our Sourcing revenue increased 3.0 percent to $1.7 billion in 2013 from $1.6 billion in 2012. Thisincrease was primarily due to higher case volumes. Purchased products sourced for resale increased 3.9 percent in 2013 to $1.54 billion from $1.48 billion in2012. This increase was primarily due to higher case volumes and higher cost per case. Our Payment Services revenue decreased 75.3 percent to $13.2 millionin 2013 from $53.5 million in 2012. The decrease was due to the sale of substantially all of our Payment Services business, T-Chek, to EFS on October 16,2012.Net revenues. Total Transportation net revenues increased 11.1 percent to $1.70 billion in 2013 from $1.53 billion in 2012. Our Transportation net revenuemargin decreased to 15.3 percent in 2013 from 15.8 percent in 2012 largely driven by higher transportation costs, partially offset by an increase intransportation rates charged to our customers.26Table of ContentsOur truckload net revenues decreased 0.5 percent to $1.05 billion in 2013 from $1.06 billion in 2012. Truckload volumes increased approximately tenpercent in 2013. Truckload net revenue margin decreased in 2013 due to increased cost of capacity, partially offset by increased rates charged to ourcustomers. Excluding the estimated impact of the change in fuel, on average, our truckload rates increased approximately two percent in 2013. Our truckloadtransportation costs increased approximately three percent, excluding the estimated impacts of the change in fuel.LTL net revenues increased 6.8 percent to $239.5 million in 2013 from $224.2 million in 2012. The increase in net revenues was driven by an increase intotal shipments of seven percent, partially offset by decreased net revenue margin. Our LTL transportation costs are increasing, while customer pricing has notkept up with increases in carrier costs.Our intermodal net revenue increase of 0.7 percent to $39.1 million in 2013 from $38.8 million in 2012 was driven largely by a change in the mix of businessand improved customer pricing, partially offset by volume declines.Our ocean transportation net revenues increased 121.0 percent to $187.7 million in 2013 from $84.9 million in 2012. Our air transportation net revenuesincreased 64.5 percent to $73.1 million in 2013 from $44.4 million in 2012. Our customs net revenues increased 100.7 percent to $36.6 million in 2013 from$18.2 million in 2012. These increases were primarily driven by our acquisition of Phoenix.Other logistics services net revenues, which include transportation management services, warehousing, and small parcel, increased 18.2 percent to$67.9 million in 2013 from $57.4 million in 2012. This increase was primarily due to an increase in warehouse services.Sourcing net revenues decreased 7.0 percent to $127.0 million in 2013 from $136.4 million in 2012. This decrease was primarily due to a reduction inbusiness with a large customer and a decrease in net revenue per case, partially offset by increased volumes. We expect the revenue declines with this largecustomer to continue in 2014. Our net revenue margin decreased to 7.6 percent in 2013 compared to 8.4 percent in 2012.Historically, Payment Services was comprised primarily of revenue related to our former subsidiary, T-Chek. Payment Services net revenues decreased 79.7percent to $10.8 million in 2013 from $53.0 million in 2012. The decrease was due to the T-Chek divestiture on October 16, 2012. We continue to generatePayment Services revenues from the cash advance options we offer our contracted carriers.Operating expenses. Operating expenses increased 10.7 percent to $1.2 billion in 2013 from $1.0 billion in 2012. This was due to an increase of 7.9 percentin personnel expenses and an increase of 18.3 percent in other selling, general, and administrative expenses. As a percentage of net revenues, operating expensesincreased to 62.8 percent in 2013 from 60.7 percent in 2012. This increase was primarily due to increased personnel and other selling, general, andadministrative expenses as a result of our acquisitions in 2012.Our personnel expenses are driven by headcount and earnings growth. In 2013, personnel expenses increased to $826.7 million from $766.0 million in 2012.Our personnel expenses as a percentage of net revenue increased in 2013 to 45.0 percent from 44.6 percent in 2012. In 2013, our average headcount increasedapproximately 25 percent, related primarily to the acquisitions of Apreo and Phoenix. The increase in personnel expense from headcount growth was partiallyoffset by declines in expenses related to incentive plans that are designed to keep expenses variable with changes in net revenues and profitability.Other selling, general, and administrative expenses increased 18.3 percent to $326.8 million in 2013 from $276.2 million in 2012. The increase in our selling,general, and administrative expenses is primarily related to an increase in amortization of intangible assets acquired, occupancy, and travel, partially offset bya reduction in purchased professional services.Income from operations. Income from operations increased 1.1 percent to $682.7 million in 2013 from $675.3 million in 2012. Income from operations as apercentage of net revenues decreased to 37.2 percent in 2013 from 39.3 percent in 2012. This decrease was due to our expenses growing faster than our netrevenues. Additionally, Phoenix has a higher operating expense to net revenue ratio than C.H. Robinson has historically experienced.Investment and other (expense) income. Investment and other (expense) income was an expense of $9.3 million in 2013 compared to income of $283.1million in 2012. In 2013, we recorded interest expense on borrowings of $11.1 million. In 2012, we recorded a gain of $281.6 million on the divestiture ofsubstantially all of our T-Chek business.Provision for income taxes. Our effective income tax rate was 38.2 percent for 2013 and 38.0 percent for 2012. The effective income tax rate for both periodsis greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.27Table of ContentsNet income. Net income decreased 30.0 percent to $415.9 million in 2013 from $593.8 million in 2012. Basic net income per share decreased 28.0 percent to$2.65. Diluted net income per share decreased 27.8 percent to $2.65.2012 COMPARED TO 2011Total revenues and direct costs. Our consolidated total revenues increased 9.9 percent in 2012 compared to 2011. Total Transportation revenues increased10.8 percent to $9.69 billion in 2012 from $8.74 billion in 2011. This increase was driven by higher volumes in all of our transportation modes andincreased pricing to our customers, including the impacts of higher fuel costs. Total purchased transportation and related services increased 11.8 percent in2012 to $8.16 billion from $7.30 billion in 2011. This increase was due to higher volumes in all of our transportation modes and higher transportation costs,including the impacts of higher fuel costs. Our Sourcing revenue increased 5.5 percent to $1.62 billion in 2012 from $1.54 billion in 2011. Purchasedproducts sourced for resale increased 5.4 percent in 2012 to $1.48 billion from $1.41 billion in 2011. These increases were primarily due to higher casevolumes. Our Payment Services revenue decreased 11.2 percent to $53.5 million in 2012 from $60.3 million in 2011. The decrease was due to the sale ofsubstantially all of our Payment Services business, T-Chek, to Electronic Funds Source, LLC on October 16, 2012.Net revenues. Total Transportation net revenues increased 5.8 percent to $1.53 billion in 2012 from $1.44 billion in 2011. Our Transportation net revenuemargin decreased to 15.8 percent in 2012 from 16.5 percent in 2011 largely driven by higher transportation costs and higher fuel costs, partially offset by anincrease in transportation rates charged to our customers. While our different pricing arrangements with customers and contract carriers make it very difficultto measure the precise impact, we believe that fuel costs essentially act as a pass-through in our truckload business. Therefore, in times of higher fuel prices,our net revenue margin percentage decreases, as it did in 2012.Our truckload net revenues increased 2.1 percent to $1.06 billion in 2012 from $1.04 billion in 2011. Truckload volumes increased approximately ten percentin 2012. Truckload net revenue margin decreased in 2012 due to increased cost of capacity and an increase in fuel prices, partially offset by increased ratescharged to our customers. Excluding the estimated impact of the change in fuel, on average, our truckload rates increased approximately one percent in 2012.Our truckload transportation costs increased approximately two percent, excluding the estimated impacts of the change in fuel.During 2012, our LTL net revenues increased approximately 13 percent to $224.2 million from $198.7 million in 2011. The increase was driven primarilyby an increase in shipment volumes and increased pricing to our customers, partially offset by increased cost of capacity. Our LTL volumes increasedapproximately 16 percent compared to 2011.Our intermodal net revenue decrease of 5.8 percent to $38.8 million in 2012 from $41.2 million in 2011 was driven largely by increased cost of capacity.Our ocean transportation net revenues increased 27.0 percent to $84.9 million in 2012 from $66.9 million in 2011. Our air transportation net revenuesincreased 12.9 percent to $44.4 million in 2012 from $39.4 million in 2011. Our customs net revenues increased 39.1 percent to $18.2 million in 2012 from$13.1 million in 2011. These increases were primarily due to our acquisition of Phoenix on November 1, 2012.Other logistics services net revenues, which include transportation management services, warehousing, and small parcel, increased 22.8 percent to $57.4million in 2012 from $46.8 million in 2011. This increase was primarily due to transaction increases in our transportation management services.Sourcing net revenues increased 6.2 percent to $136.4 million in 2012 from $128.4 million in 2011. This increase was primarily due to increased volumesand a slight increase in net revenue per case. Our net revenue margin remained at 8.4 percent in 2012 compared to 2011.Historically, Payment Services was comprised primarily of revenue related to our former subsidiary, T-Chek. Payment Services net revenues decreased 12.1percent to $53.0 million in 2012 from $60.3 million in 2011. The decrease was due to the T-Chek divestiture on October 16, 2012. We recorded a gain of$281.6 million related to this divestiture in 2012. We continue to generate Payment Services revenues from the cash advance options we offer our contractedcarriers.Operating expenses. Operating expenses increased 10.9 percent to $1.04 billion in 2012 from $939.9 million in 2011. This was due to an increase of 10.0percent in personnel expenses and an increase of 13.4 percent in other selling, general, and administrative expenses. As a percentage of net revenues, operatingexpenses increased to 60.7 percent in 2012 from 57.6 percent in 2011. This increase was primarily due to increased personnel and other selling, general, andadministrative expenses incurred because of our acquisitions and divestitures in 2012.28Table of ContentsOur personnel expenses are driven by headcount and earnings growth. In 2012, personnel expenses increased to $766.0 million from $696.2 million in 2011.Our personnel expenses as a percentage of net revenue increased in 2012 to 44.6 percent from 42.6 percent in 2011. These increases were primarily due to anincrease in vesting expense of $33.0 million of our equity awards triggered by the gain on the divestiture of T-Chek. In 2012, our average headcount increasedapproximately 13.6 percent, due primarily to the acquisitions of Apreo and Phoenix. Personnel expenses related to our various incentive plans are designed tokeep expenses variable with changes in net revenues and profitability.Other selling, general, and administrative expenses increased 13.4 percent to $276.2 million in 2012 from $243.7 million in 2011. Approximately $10.6million of this increase is related to investment banking and other external legal and accounting fees paid for the acquisitions and divestitures in 2012. Theremaining increase in our selling, general, and administrative expenses is primarily related to an increase in travel, amortization of intangible assets acquired,temporary services, and warehouse expenses, partially offset by a reduction in claims.Income from operations. Income from operations decreased 2.5 percent to $675.3 million in 2012 from $692.7 million in 2011. Income from operations asa percentage of net revenues decreased to 39.3 percent in 2012 from 42.4 percent in 2011. These decreases were primarily related to the increases in operatingexpenses, offset partially by an increase in net revenues.Investment and other income. Investment and other income increased to $283.1 million in 2012 compared to $2.0 million in 2011. In 2012, we recorded again of $281.6 million on the divestiture of substantially all of our T-Chek business.Provision for income taxes. Our effective income tax rate was 38.0 percent for 2012 and 37.9 percent for 2011. The effective income tax rate for both periodsis greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.Net income. Net income increased 37.6 percent to $593.8 million in 2012 from $431.6 million in 2011. Basic net income per share increased 39.9 percent to$3.68. Diluted net income per share increased 40.1 percent to $3.67.LIQUIDITY AND CAPITAL RESOURCESWe have historically generated substantial cash from operations, which has enabled us to fund our growth while paying cash dividends and repurchasingstock. In 2012, we entered into a senior unsecured revolving credit facility to partially fund the acquisition of Phoenix. In 2013, we entered into a NotePurchase Agreement to fund the accelerated share repurchase agreements to repurchase $500.0 million worth of our common stock. We also expect to use therevolving credit facility, and potentially other indebtedness incurred in the future, to assist us in continuing to fund working capital, capital expenditures,dividends, and share repurchases. Cash and cash equivalents totaled $162.0 million and $210.0 million as of December 31, 2013 and 2012. Cash and cashequivalents held outside the United States totaled $80.2 million and $103.3 million as of December 31, 2013 and 2012. Working capital at December 31, 2013and 2012 was $394.5 million and $440.1 million.We prioritize our investments to grow the business, as we require some working capital and a relatively small amount of capital expenditures to grow. We arecontinually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.Cash flow from operating activities. We generated $347.8 million, $460.3 million, and $429.7 million of cash flow from operations in 2013, 2012, and2011. During 2013, our cash flow from operations decreased 24.5 percent compared to a 30.0 percent decrease in net income. During the first quarter of 2013,we used $111.8 million to fund the payment of income taxes, primarily related to the gain recognized on the divestiture of T-Chek.Cash used for investing activities. We used $28.9 million of cash in 2013, $359.1 million of cash in 2012, and $38.3 million of cash in 2011 forinvesting activities. Our investing activities consist primarily of capital expenditures and cash paid for acquisitions. In 2012, cash received for the divestitureof T-Chek, net of the cash we sold, was $274.8 million.We used $48.2 million, $50.7 million, and $52.8 million of cash for capital expenditures in 2013, 2012, and 2011. We spent $35.9 million, $42.0 million,and $39.8 million in 2013, 2012, and 2011 primarily for annual investments in information technology equipment to support our operating systems,including the purchase and development of software. These information technology investments are intended to improve efficiencies and help grow thebusiness. Additionally, we built a new office building on our corporate campus in Eden Prairie, Minnesota. This building was completed in the first quarter of2014 and it replaced space we previously leased in Eden Prairie. This building cost approximately $18.5 million. We have spent $14.0 million on the buildingthrough December 31, 2013. We expect to fund the balance of costs to complete the building in the first quarter of 2014.29Table of ContentsIn 2012, we purchased 500 intermodal containers for $5.2 million and funded the balance of the 2011 container purchases. In 2011, we also purchased a newcorporate aircraft for $7.3 million and 500 intermodal containers for $4.8 million.We anticipate capital expenditures in 2014 to be approximately $40 million to $50 million.During the second quarter of 2013, we received $19.1 million in cash from the settlement of post-closing and working capital adjustments, in accordance withthe Phoenix purchase agreement. We used cash of $583.6 million for acquisitions in 2012. On October 1, 2012, we acquired Apreo for $22.8 million, net ofcash acquired. On November 1, 2012, we paid $560.8 million in cash for Phoenix, net of cash acquired.In 2011, we sold our remaining available-for-sale securities, which generated $9.3 million of cash from investing activities.Cash used for financing activities. We used $364.9 million, $264.3 million, and $415.1 million, of cash flow for financing activities in 2013, 2012, and2011.In 2013 and 2012, we had net short-term borrowings of $121.4 million and $248.4 million, respectively. On October 29, 2012, we entered into a seniorunsecured revolving credit facility for up to $500 million with a $500 million accordion feature, of which $375.0 million was outstanding as of December 31,2013. The purpose of this facility was to partially fund the acquisition of Phoenix and will assist us in continuing to fund working capital, capitalexpenditures, dividends, and share repurchases. Advances under the facility carry an interest rate based on our total funded debt to total capitalization, asmeasured at the end of each quarter, and are based on a spread over LIBOR for outstanding balances. In addition, there is a commitment fee on the averagedaily undrawn stated amount under each letter of credit issued under the facility. We were in compliance with all of the credit facility's debt covenants as ofDecember 31, 2013.In 2013, we had long-term borrowings of $500.0 million. On August 23, 2013, we entered into a Note Purchase Agreement for $500.0 million, of which theentire balance was outstanding as of December 31, 2013. The primary purpose of this agreement was to fund the ASR Agreements that were entered into onAugust 24, 2013. We were in compliance with all the covenants in the Notes as of December 31, 2013.We used $220.3 million, $275.4 million, and $194.7 million, to pay cash dividends in 2013, 2012, and 2011. The decrease in 2013 was due to a fifthquarterly dividend paid in 2012 and a lower number of shares outstanding in 2013, partially offset by an increase in the dividend rate in 2013 to $0.35 pershare from $0.33 per share in 2012. The increase in 2012 compared to 2011 was due primarily to a fifth quarterly dividend paid at $0.35 per share. InDecember 2012, the Board of Directors modified the dividend payment date to be the last day of the quarter in which it is declared. This is a change from theprevious policy which was to pay the cash dividend on the first day of the following quarter from which the cash dividend was declared. We expect tocontinue to pay quarterly cash dividends on the last day of the quarter for which they were declared by the Board of Directors. Additionally, the rate for ourfirst four quarterly dividends increased to $0.33 per share in 2012 from $0.29 per share in 2011.We also used $757.3 million, $245.1 million, and $240.9 million, on share repurchases in 2013, 2012, and 2011. The increase in 2013 was due to the$500.0 million of shares repurchased as part of the ASR Agreements entered into during the third quarter of 2013. We received 6.1 million shares of CommonStock with a fair value of $350.0 million during the third quarter of 2013, which represented approximately 70 percent of the total shares expected to berepurchased under the agreements. In December 2013, one of the banks terminated their ASR Agreement and delivered 1.2 million shares. In February 2014,the remaining ASR agreement was terminated. Approximately 1.2 million shares were delivered as final settlement of the remaining agreement. In August 2013,the Board of Directors increased the number of shares authorized to be repurchased by 15,000,000 shares. As of December 31, 2013, there were 14,069,925shares remaining for future repurchases. The number of shares we repurchase, if any, during future periods will vary based on our cash position, potentialuses of our cash, and market conditions.Assuming no change in our current business plan, management believes that our available cash, together with expected future cash generated from operations,the amount available under our credit facility, and credit available in the market, will be sufficient to satisfy our anticipated needs for working capital, capitalexpenditures, and cash dividends in future periods. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice,if needed.30Table of ContentsCRITICAL ACCOUNTING POLICIES AND ESTIMATESOur consolidated financial statements include accounts of the company and all majority-owned subsidiaries. The preparation of financial statements inconformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. In certaincircumstances, those estimates and assumptions can affect amounts reported in the accompanying consolidated financial statements and related footnotes. Inpreparing our financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements, giving dueconsideration to materiality. We do not believe there is a great likelihood that materially different amounts would be reported related to the accounting policiesdescribed below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, asa result, actual results could differ from these estimates. Note 1 of the Notes to consolidated financial statements includes a summary of the significantaccounting policies and methods used in the preparation of our consolidated financial statements. The following is a brief discussion of our critical accountingpolicies and estimates.Revenue recognition. Total revenues consist of the total dollar value of goods and services purchased from us by customers. Net revenues are total revenuesless the direct costs of transportation, products, and handling. We act principally as the service provider for these transactions and recognize revenue as theseservices are rendered or goods are delivered. At that time, our obligations to the transactions are completed and collection of receivables is reasonably assured.Most transactions in our Transportation and Sourcing businesses are recorded at the gross amount we charge our customers for the service we provide andgoods we sell. In these transactions, we are the primary obligor, we have credit risk, we have discretion to select the supplier, and we have latitude in pricingdecisions.Additionally, in our Sourcing business, we take loss of inventory risk during shipment and have general inventory risk. Certain transactions in customsbrokerage, transportation management, and sourcing are recorded at the net amount we charge our customers for the service we provide because many of thefactors stated above are not present.Valuations for accounts receivable. Our allowance for doubtful accounts is calculated based upon the aging of our receivables, our historical experience ofuncollectible accounts, and any specific customer collection issues that we have identified. The allowance of $39.3 million as of December 31, 2013, increasedcompared to the allowance of $34.6 million as of December 31, 2012. This increase was primarily due to growth in our accounts receivable balance. Webelieve that the recorded allowance is sufficient and appropriate based on our customer aging trends, the exposures we have identified, and our historical lossexperience.Goodwill. We manage and report our operations as one operating segment. Our branches represent a series of components that are aggregated for the purpose ofevaluating goodwill for impairment on an enterprise-wide basis. The fair value of the enterprise-wide reporting unit substantially exceeds the book value;therefore we have determined that there is no goodwill impairment as of December 31, 2013.Stock-based compensation. The fair value of each share-based payment award is established on the date of grant. For grants of restricted shares andrestricted units, the fair value is established based on the market price on the date of the grant, discounted for post-vesting holding restrictions. The discountson outstanding grants vary from 18 percent to 22 percent and are calculated using the Black-Scholes option pricing model. Changes in the measured stockprice volatility and interest rates are the primary reason for changes in the discount. For grants of options, we use the Black-Scholes option pricing model toestimate the fair value of the awards. The determination of the fair value is affected by our stock price and a number of assumptions, including expectedvolatility, expected life, risk-free interest rate, and expected dividends.31Table of ContentsDISCLOSURES ABOUT CONTRACTUAL OBLIGATIONS AND COMMERCIAL CONTINGENCIESThe following table aggregates all contractual commitments and commercial obligations, due by period, that affect our financial condition and liquidityposition as of December 31, 2013 (dollars in thousands): 2014 2015 2016 2017 2018 Thereafter TotalBorrowings under credit agreements$375,000 $— $— $— $— $— $375,000Long-term notes payable(1)21,388 21,388 21,388 21,388 21,388 719,388 826,328Operating Leases(2)43,966 37,510 29,466 22,935 15,619 17,540 167,036Purchase Obligations(3)83,004 11,569 2,419 — — — 96,992Total$523,358 $70,467 $53,273 $44,323 $37,007 $736,928 $1,465,356_______________________ (1)Amounts payable relate to the semi-annual interest due on the long-term notes and the principal amount at maturity.(2)We have certain facilities and equipment under operating leases.(3)Purchase obligations include agreements for services that are enforceable and legally binding and that specify all significant terms. As of December 31, 2013, such obligations includeocean and air freight capacity, telecommunications services, and maintenance contracts.We have no capital lease obligations. Long-term liabilities consist of noncurrent income taxes payable, long-term notes payable, and the obligation under ournon-qualified deferred compensation plan. Due to the uncertainty with respect to the timing of future cash flows associated with our unrecognized tax benefitsat December 31, 2013, we are unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authority. Therefore,$21.5 million of unrecognized tax benefits have been excluded from the contractual obligations table above. See Note 5 to the consolidated financial statementsfor a discussion on income taxes. The obligation under our non-qualified deferred compensation plan has also been excluded from the above table as the timingof cash payment is uncertain. As of December 31, 2013, we did not have any off-balance sheet arrangements as defined in Item 303 (a)(4)(ii) of SECRegulation S-K.ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKWe had $162.0 million of cash and investments on December 31, 2013, consisting entirely of cash and cash equivalents. Although these investments aresubject to the credit risk of the issuer, we manage our investment portfolio to limit our exposure to any one issuer. Substantially all of the cash equivalents aremoney market securities from treasury and tax exempt money issuers. Because of the credit risk criteria of our investment policies and practices, the primarymarket risks associated with these investments are interest rate and liquidity risks.We are a party to a credit agreement with various lenders consisting of a $500 million revolving loan facility. Interest accrues on the revolving loan at variablerates based on LIBOR or "prime" plus the applicable add-on percentage as defined. At December 31, 2013, there was $375.0 million outstanding on therevolving loan.We are a party to the Note Purchase Agreement with various institutional investors with fixed rates consisting of: (i) $175,000,000 of the Company’s 3.97percent Senior Notes, Series A, due August 27, 2023, (ii) $150,000,000 of the Company’s 4.26 percent Senior Notes, Series B, due August 27, 2028, and(iii) $175,000,000 of the Company’s 4.60 percent Senior Notes, Series C, due August 27, 2033. At December 31, 2013, there was $500.0 million outstandingon the notes.A hypothetical 100-basis-point change in the interest rate would not have a material effect on our earnings. We do not use derivative financial instruments tomanage interest rate risk or to speculate on future changes in interest rates. A rise in interest rates could negatively affect the fair value of our investments.Market risk arising from changes in foreign currency exchange rates are not material due to the size of our international operations.32Table of ContentsITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofC.H. Robinson Worldwide, Inc.Eden Prairie, MNWe have audited the accompanying consolidated balance sheets of C.H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) as of December 31,2013 and 2012, and the related consolidated statements of operations and comprehensive income, stockholders’ investment, and cash flows for each of thethree years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15. These financialstatements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financialstatements and financial statement schedule based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of C.H. Robinson Worldwide, Inc. andsubsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financialstatement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, theinformation set forth therein.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal controlover financial reporting as of December 31, 2013, based on the criteria established in Internal Control-Integrated Framework (1992) issued by theCommittee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2014, expressed an unqualified opinion on theCompany’s internal control over financial reporting. Minneapolis, MinnesotaMarch 3, 201433Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofC.H. Robinson Worldwide, Inc.Eden Prairie, MNWe have audited the internal control over financial reporting of C.H. Robinson Worldwide, Inc. and subsidiaries (the "Company") as of December 31, 2013,based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the TreadwayCommission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Controls over Financial Reporting.Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principalfinancial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'sassets that could have a material effect on the financial statements.Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override ofcontrols, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of theeffectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changesin conditions, or that the degree of compliance with the policies or procedures may deteriorate.In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on thecriteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the TreadwayCommission.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financialstatements and financial statement schedule listed in the Index at Item 15 as of and for the year ended December 31, 2013 of the Company and our report datedMarch 3, 2014 expressed an unqualified opinion on those financial statements and financial statement schedule.Minneapolis, MinnesotaMarch 3, 201434Table of ContentsC.H. ROBINSON WORLDWIDE, INC.CONSOLIDATED BALANCE SHEETS December 31,(In thousands, except per share data)2013 2012ASSETS Current assets: Cash and cash equivalents$162,047 $210,019Receivables, net of allowance for doubtful accounts of $39,292 and $34,5601,449,581 1,412,136Deferred tax asset8,286 11,780Prepaid expenses and other44,571 38,355Total current assets1,664,485 1,672,290Property and equipment300,795 265,007Accumulated depreciation and amortization(140,092) (115,156)Net property and equipment160,703 149,851Goodwill829,073 822,215Other intangible assets, net of accumulated amortization of $33,325 and $14,108117,467 137,411Other assets31,090 22,458Total assets$2,802,818 $2,804,225LIABILITIES AND STOCKHOLDERS’ INVESTMENT Current liabilities: Accounts payable$685,890 $639,460Outstanding checks69,117 68,016Accrued expenses– Compensation and profit-sharing contribution85,247 103,343Income taxes11,681 121,581Other accrued liabilities43,046 46,171Current portion of debt375,000253,646Total current liabilities1,269,981 1,232,217 Long-term debt500,000 —Noncurrent income taxes payable21,584 20,590Deferred tax liabilities70,618 45,113Other long term liabilities911 1,933Total liabilities1,863,094 1,299,853 Commitments and contingencies Stockholders’ investment: Preferred stock, $ .10 par value, 20,000 shares authorized; no shares issued or outstanding— —Common stock, $ .10 par value, 480,000 shares authorized; 179,030 and 178,695 shares issued, 150,197and 161,327 outstanding15,020 16,133Additional paid-in capital217,894 303,479Retained earnings2,413,833 2,218,229Accumulated other comprehensive loss(10,620) (9,345)Treasury stock at cost (28,833 and 17,368 shares)(1,696,403) (1,024,124)Total stockholders’ investment939,724 1,504,372Total liabilities and stockholders’ investment$2,802,818 $2,804,225See accompanying notes to the consolidated financial statements.35Table of ContentsC.H. ROBINSON WORLDWIDE, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the years ended December 31,(In thousands, except per share data)2013 2012 2011Revenues: Transportation$11,069,710 $9,685,415 $8,740,524Sourcing1,669,134 1,620,183 1,535,528Payment Services13,232 53,515 60,294Total revenues12,752,076 11,359,113 10,336,346Costs and expenses: Purchased transportation and related services9,371,315 8,157,278 7,296,608Purchased products sourced for resale1,542,184 1,483,745 1,407,080Purchased payment services2,482 519 —Personnel expenses826,661 766,006 696,233Other selling, general, and administrative expenses326,784 276,245 243,695Total costs and expenses12,069,426 10,683,793 9,643,616Income from operations682,650 675,320 692,730Investment and other (expense) income(9,289) 283,142 1,974Income before provision for income taxes673,361 958,462 694,704Provision for income taxes257,457 364,658 263,092Net income415,904 593,804 431,612Other comprehensive loss(1,275) (230) (2,690)Comprehensive income$414,629 $593,574 $428,922 Basic net income per share$2.65 $3.68 $2.63Diluted net income per share$2.65 $3.67 $2.62 Basic weighted average shares outstanding156,915 161,557 164,114Dilutive effect of outstanding stock awards165 389 627Diluted weighted average shares outstanding157,080 161,946 164,741See accompanying notes to the consolidated financial statements.36Table of ContentsC.H. ROBINSON WORLDWIDE, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT(In thousands, except per share data)CommonSharesOutstanding Amount AdditionalPaid-inCapital RetainedEarnings AccumulatedOtherComprehensiveLoss TreasuryStock TotalStockholders’InvestmentBalance December 31, 2010166,048 $16,605 $178,087 $1,613,912 $(6,425) $(598,111) $1,204,068Net income 431,612 431,612Foreign currency translation adjustment (2,690) (2,690)Dividends declared, $1.20 per share (200,492) (200,492)Stock issued for employee benefit plans673 67 (24,717) 34,246 9,596Issuance of restricted stock244 24 (24) —Stock-based compensation expense16 2 37,193 865 38,060Excess tax benefit on deferred compensationand employee stock plans 15,255 15,255Repurchase of common stock(3,540) (354) (246,581) (246,935)Balance December 31, 2011163,441 16,344 205,794 1,845,032 (9,115) (809,581) 1,248,474Net income 593,804 593,804Foreign currency translation adjustment (230) (230)Dividends declared, $1.34 per share (220,607) (220,607)Stock issued for acquisition1,108 111 60,041 60,152Stock issued for employee benefit plans712 71 (32,435) 40,450 8,086Issuance of restricted stock276 28 (28) —Stock-based compensation expense28 3 57,813 1,647 59,463Excess tax benefit on deferred compensationand employee stock plans 12,294 12,294Repurchase of common stock(4,238) (424) (256,640) (257,064)Balance December 31, 2012161,327 16,133 303,479 2,218,229 (9,345) (1,024,124) 1,504,372Net income 415,904 415,904Foreign currency translation adjustment (1,275) (1,275)Dividends declared, $1.40 per share (220,300) (220,300)Stock issued for employee benefit plans263 26 (45,106) 10,102 (34,978)Issuance of restricted stock335 34 (34) —Stock-based compensation expense30 3 7,346 1,747 9,096Excess tax benefit on deferred compensationand employee stock plans 27,209 27,209Repurchase of common stock(11,758) (1,176) (75,000) (684,128) (760,304)Balance December 31, 2013150,197 $15,020 $217,894 $2,413,833 $(10,620) $(1,696,403) $939,724See accompanying notes to the consolidated financial statements.37Table of ContentsC.H. ROBINSON WORLDWIDE, INCCONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended December 31,(In thousands)2013 2012 2011OPERATING ACTIVITIES Net income$415,904 $593,804 $431,612Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization56,882 38,090 32,498Provision for doubtful accounts15,587 10,459 9,052Stock-based compensation9,094 59,381 38,601Gain on divestiture—(281,551)—Deferred income taxes25,226 (14,442) 5,750Loss on sale/disposal of assets314 3,208 848Other long-term liabilities5 513 765Changes in operating elements, net of effects of acquisitions: Receivables(87,316) (88,107) (162,688)Prepaid expenses and other(5,254) 5,260 (11,574)Accounts payable and outstanding checks47,488 61,732 68,039Accrued compensation and profit-sharing contribution(15,097) (19,064) 20,008Accrued income taxes(105,857) 104,542 (6,688)Other accrued liabilities(9,199)(13,483)3,489Net cash provided by operating activities347,777 460,342 429,712INVESTING ACTIVITIES Purchases of property and equipment(40,354) (36,096) (35,932)Purchases and development of software(7,852) (14,560) (16,874)Cash received for divestiture, net of cash sold— 274,802 —Acquisitions, net of cash acquired19,126 (583,631) —Sales/maturities of available-for-sale securities— — 9,311Restricted cash— — 5,000Other221 419 182Net cash used for investing activities(28,859) (359,066) (38,313)FINANCING ACTIVITIES Proceeds from stock issued for employee benefit plans15,166 18,868 18,936Stock tendered for payment of withholding taxes(50,144) (10,782) (9,340)Payment of contingent purchase price(927) (12,661) (4,318)Repurchase of common stock(757,305) (245,067) (240,934)Cash dividends(220,257) (275,353) (194,697)Excess tax benefit on stock-based compensation27,209 12,294 15,255Proceeds from short-term borrowings4,165,023 324,051 —Payments on short-term borrowings(4,043,669) (75,688) —Proceeds from long-term borrowings500,000 — —Net cash used for financing activities(364,904) (264,338) (415,098)Effect of exchange rates on cash(1,986) (588) (1,239)Net change in cash and cash equivalents(47,972) (163,650) (24,938)Cash and cash equivalents, beginning of year210,019 373,669 398,607Cash and cash equivalents, end of year$162,047 $210,019 $373,669 Stock issued for acquisition$— $60,152 $—Cash paid for income taxes$313,799 $257,580 $256,437Cash paid for interest$3,875 $518 $1,274See accompanying notes to the consolidated financial statements.38Table of ContentsC.H. ROBINSON WORLDWIDE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBASIS OF PRESENTATION. C.H. Robinson Worldwide, Inc. and our subsidiaries (“the company,” “we,” “us,” or “our”) are a global provider oftransportation services and logistics solutions through a network of 285 branch offices operating in North America, Europe, Asia, South America, andAustralia. 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 financialstatements.USE OF ESTIMATES. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities. We are also required to disclose contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our ultimate results coulddiffer from those estimates.REVENUE RECOGNITION. Total revenues consist of the total dollar value of goods and services purchased from us by customers. Our net revenues areour total revenues less purchased transportation and related services, including contracted motor carrier, rail, ocean, air, and other costs, and the purchaseprice and services related to the products we source. We act principally as the service provider for these transactions and recognize revenue as these services arerendered or goods are delivered. At that time, our obligations to the transactions are completed and collection of receivables is reasonably assured. Mosttransactions in our Transportation and Sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods wesell. In these transactions, we are the primary obligor, we have credit risk, we have discretion to select the supplier, and we have latitude in pricing decisions.Additionally, in our Sourcing business, we take loss of inventory risk during shipment and have general inventory risk. Certain transactions in customsbrokerage, transportation management services, and sourcing are recorded at the net amount we charge our customers for the service we provide because manyof the factors stated above are not present.ALLOWANCE FOR DOUBTFUL ACCOUNTS. Accounts receivable are reduced by an allowance for amounts that may become uncollectible in thefuture. We continuously monitor payments from our customers and maintain a provision for uncollectible accounts based upon our customer aging trends,historical loss experience, and any specific customer collection issues that we have identified.FOREIGN CURRENCY. Most balance sheet accounts of foreign subsidiaries are translated or remeasured at the current exchange rate as of the end of theyear. Statement of operations items are translated at average exchange rates during the year. The resulting translation adjustment is recorded as a separatecomponent of comprehensive income in our statement of operations and comprehensive income.SEGMENT REPORTING AND GEOGRAPHIC INFORMATION. We operate in the transportation and logistics industry. We provide a wide range ofproducts and services to our customers and contract carriers including transportation services, produce sourcing, freight consolidation, contract warehousing,and information services. Each of these is a significant component to optimizing logistics solutions for our customers.These services are performed throughout our branch offices, as an integrated offering for which our customers are typically provided a single invoice. Ourbranches work together to complete transactions and collectively meet the needs of our customers. For large multi-location customers, we often coordinate ourefforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. As an example, approximately 46 percent of ourtruckload transactions are shared transactions between branches. In addition, our methodology of providing services is very similar across all branches. Themajority of our global network operates on a common technology platform that is used to match customer needs with supplier capabilities, to collaborate withother branch locations, and to utilize centralized support resources to complete all facets of the transaction. Accordingly, our chief operating decision makeranalyzes our business as a single segment, relying on net revenues and operating income across our network of branch offices as the primary performancemeasures.39Table of ContentsThe following table presents our total revenues (based on location of the customer) and long-lived assets (including intangible and other assets) by geographicregions (in thousands): For the year ended December 31, 2013 2012 2011Total revenues United States$11,140,163 $10,183,596 $9,488,165Other locations1,611,913 1,175,517 848,181Total revenues$12,752,076 $11,359,113 $10,336,346 December 31, 2013 2012 2011Long-lived assets United States$284,693 $281,729 $156,471Other locations24,567 27,991 10,337Total long-lived assets$309,260 $309,720 $166,808CASH AND CASH EQUIVALENTS. Cash and cash equivalents consist of bank deposits.PREPAID EXPENSES AND OTHER. Prepaid expenses and other include such items as prepaid rent, software maintenance contracts, insurancepremiums, other prepaid operating expenses, and inventories, consisting primarily of produce and related products held for resale.PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost. Maintenance and repair expenditures are charged to expense as incurred.Depreciation is computed using the straight-line method over the estimated lives of the assets of 3 to 30 years. Amortization of leasehold improvements iscomputed over the shorter of the lease term or the estimated useful lives of the improvements.We recognized the following depreciation expense (in thousands): 2013$27,757201224,254201123,410A summary of our property and equipment as of December 31 is as follows (in thousands): 2013 2012Furniture, fixtures, and equipment$168,354 $145,746Buildings64,639 64,452Corporate aircraft11,334 11,334Leasehold improvements24,489 22,663Land15,008 15,004Construction in progress16,971 5,808Less accumulated depreciation(140,092) (115,156)Net property and equipment$160,703 $149,85140Table of ContentsGOODWILL AND OTHER INTANGIBLE ASSETS. Goodwill is the difference between the purchase price of a company and the fair market value of theacquired company’s net identifiable assets. Other intangible assets include customer lists, contract carrier lists, and non-competition agreements. Theseintangible assets are being amortized using the straight-line method over their estimated lives, ranging from 3 to 8 years. Goodwill is not amortized, but istested for impairment using a fair value approach. Goodwill is tested for impairment annually or more frequently if events warrant. Intangible assets areevaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. See Note 2.OTHER ASSETS. Other assets include such items as purchased and internally developed software, and the investments related to our nonqualified deferredcompensation plan. We amortize software using the straight-line method over 3 years. We recognized the following amortization expense of purchased andinternally developed software (in thousands): 2013 $8,7592012 7,5282011 5,180A summary of our purchased and internally developed software as of December 31 is as follows (in thousands): 2013 2012Purchased software$20,433 $15,524Internally developed software24,358 20,029Less accumulated amortization(29,802) (20,744)Net software$14,989 $14,809INCOME TAXES. Income taxes are accounted for using the asset and liability method. Under this method, deferred tax assets and liabilities are recognizedfor the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted rates.Annual tax provisions include amounts considered sufficient to pay assessments that may result from examination of prior year tax returns; however, theamount ultimately paid upon resolution of issues raised may differ from the amounts accrued.The financial statement benefits of an uncertain income tax position are recognized when more likely than not, based on the technical merits, the position willbe sustained upon examination. Unrecognized tax benefits are more likely than not owed to a taxing authority and the amount of the contingency can bereasonably estimated. Uncertain income tax positions are included in “Noncurrent income taxes payable” in the consolidated balance sheets.Provisions are made for U.S. taxes on undistributed earnings of foreign subsidiaries and related companies.COMPREHENSIVE INCOME. Comprehensive income includes any changes in the equity of an enterprise from transactions and other events andcircumstances from non-owner sources. Our only component of other comprehensive income is foreign currency translation adjustment. It is presented on ourconsolidated statements of operations and comprehensive income.STOCK-BASED COMPENSATION. The fair value of each share-based payment award is established on the date of grant. For grants of performanceshares and restricted stock units, the fair value is established based on the market price on the date of the grant,discounted for post-vesting holdingrestrictions. The discounts on outstanding grants vary from 18 percent to 22 percent and are calculated using the Black-Scholes option pricing model.Changes in measured stock volatility and interest rates are the primary reason for changes in the discount.For grants of options, we use the Black-Scholes option pricing model to estimate the fair value of share-based payment awards. The determination of the fairvalue of share-based awards is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate,and expected dividends.41Table of ContentsNOTE 2: GOODWILL AND OTHER INTANGIBLE ASSETSThe change in the carrying amount of goodwill is as follows (in thousands): 2013 2012Balance, beginning of year$822,215 $359,688Acquisitions5,331 462,232Translation1,527 295Balance, end of year$829,073 $822,215The additions to goodwill are related to our acquisitions discussed in more detail in Note 8. We complete an impairment test on goodwill annually. Thisimpairment test did not result in any impairment losses. There is no aggregate goodwill impairment for any of the periods presented.A summary of our other intangible assets, with finite lives, which include primarily customer relationships and non-competition agreements, as ofDecember 31 is as follows (in thousands): 2013 2012Gross$148,917 $149,644Accumulated amortization(33,325) (14,108)Net$115,592 $135,536Other intangible assets, with indefinite lives, are as follows (in thousands): 2013 2012Trademarks$1,875 $1,875Amortization expense for other intangible assets was (in thousands): 2013$20,12820126,30820113,908Intangible assets at December 31, 2013 will be amortized over the next seven years, and that expense is as follows (in thousands):2014$18,719201516,939201616,922201716,890201816,225Thereafter29,897Total$115,59242Table of ContentsNOTE 3: FAIR VALUE MEASUREMENTAccounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classifiedand disclosed in one of the following three categories:•Level 1-Quoted market prices in active markets for identical assets or liabilities.•Level 2-Observable market-based inputs or unobservable inputs that are corroborated by market data.•Level 3-Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair valuemeasurement.The following table presents information as of December 31, 2012, about our financial assets and liabilities that are measured at fair value on a recurringbasis, according to the valuation techniques we used to determine their fair values (in thousands). Level 1 Level 2 Level 3 Total FairValueContingent purchase price related to acquisitions$— $— $922 $922Total liabilities at fair value$— $— $922 $922In measuring the fair value of the contingent payment liability, we used an income approach that considers the expected future earnings of the acquiredbusinesses and the resulting contingent payments, discounted at a risk-adjusted rate.The table below sets forth a reconciliation of our beginning and ending Level 3 financial liability balance (in thousands). We had no Level 3 liabilities as ofDecember 31, 2013. 2013 2012 2011Balance, beginning of period$922 $13,070 $16,623Payments of contingent purchase price(927) (12,661) (4,318)Total unrealized losses included in earnings5 513 765Balance, end of period$— $922 $13,070NOTE 4. FINANCING ARRANGEMENTSOn October 29, 2012, we entered into a senior unsecured revolving credit facility for up to $500 million with a $500 million accordion feature (the "CreditAgreement"), with a syndicate of financial institutions led by U. S. Bank. The purpose of this facility was to partially fund the acquisition of Phoenix andwill allow us to continue to fund working capital, capital expenditures, dividends, and share repurchases. The Credit Agreement expires on October 29, 2017.As of December 31, 2013 and 2012, we had 375.0 million and $253.0 million in borrowings outstanding under the Credit Agreement which is classified as acurrent liability on the consolidated balance sheet. The recorded amount of borrowings outstanding approximates fair value because of the short maturityperiod of the debt, therefore, we consider these borrowings to be a Level 2 financial liability.Borrowings under the Credit Agreement generally bear interest at a variable rate determined by a pricing schedule or the base rate (which is the highest of (a) theadministrative agent's prime rate, (b) the federal funds rate plus 0.50 percent, or (c) the sum of 1.00 percent plus one-month LIBOR plus a specified margin).As of December 31, 2013, the variable rate equaled LIBOR plus 1.50 percent. In addition, there is a commitment fee on the average daily undrawn statedamount under each letter of credit issued under the facility. The weighted average interest rate incurred on borrowings during 2013 was approximately 1.2percent and at December 31, 2013 was approximately 1.7 percent. The weighted average interest rate incurred on borrowings during 2012 and at December 31,2012 was approximately 1.2 percent.43Table of ContentsThe Credit Agreement contains various restrictions and covenants. Among other requirements, we may not permit our leverage ratio, as of the end of each ofour fiscal quarters, of (i) Consolidated Funded Indebtedness to (ii) Consolidated Total Capitalization to be greater than 0.65 to 1.00. We were in compliancewith the financial debt covenants as of December 31, 2013.The Credit Agreement also contains customary events of default. If an event of default under the Credit Agreement occurs and is continuing, then theadministrative agent may declare any outstanding obligations under the Credit Agreement to be immediately due and payable. In addition, if we become thesubject of voluntary or involuntary proceedings under any bankruptcy, insolvency, or similar law, then any outstanding obligations under the CreditAgreement will automatically become immediately due and payable.On August 23, 2013, we entered into a Note Purchase Agreement with certain institutional investors (the “Purchasers”) named therein (the “Note PurchaseAgreement”). Pursuant to the Note Purchase Agreement, the Purchasers purchased, on August 27, 2013, (i) $175,000,000 aggregate principal amount of theCompany’s 3.97 percent Senior Notes, Series A, due August 27, 2023 (the “Series A Notes”), (ii) $150,000,000 aggregate principal amount of the Company’s4.26 percent Senior Notes, Series B, due August 27, 2028 (the “Series B Notes”) and (iii) $175,000,000 aggregate principal amount of the Company’s 4.60percent Senior Notes, Series C, due August 27, 2033 (the “Series C Notes” and, together with the Series A Notes and the Series B Notes, the “Notes”). Intereston the fixed-rate notes is payable semi-annually in arrears. We applied the proceeds of the sale of the Notes for share repurchases. See Note 9.The Note Purchase Agreement contains customary provisions for transactions of this type, including representations and warranties regarding the companyand its subsidiaries and various covenants, including covenants that require us to maintain specified financial ratios. The Note Purchase Agreement includesthe following financial covenants: we will not permit our leverage ratio, as of the end of each of our fiscal quarters, of (i) Consolidated Funded Indebtedness to(ii) Consolidated Total Capitalization to be greater than 0.65 to 1.00; we will not permit the interest coverage ratio, as of the end of each of our fiscal quartersand for the twelve-month period ending, of (i) Consolidated EBIT (earnings before income taxes) to (ii) Consolidated Interest Expense to be less than 2.00 to1.00; we will not permit, as of the end of each of our fiscal quarters, Consolidated Priority Debt to exceed 15% of Consolidated Total Assets. We were incompliance with all of the financial debt covenants as of December 31, 2013.The Note Purchase Agreement provides for customary events of default, generally with corresponding grace periods, including, without limitation, paymentdefaults with respect to the Notes, covenant defaults, cross-defaults to other agreements evidencing indebtedness of the company or its subsidiaries, certainjudgments against the Company or its subsidiaries, and events of bankruptcy involving the company or its material subsidiaries. The occurrence of an eventof 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% of the principal amount being redeemed together with a“make-whole amount”, and accrued and unpaid interest (as defined in the Note Purchase Agreement) with respect to each Note. The obligations of thecompany under the Note Purchase Agreement and the Notes are guaranteed by C.H. Robinson Company, a Delaware corporation and a wholly-ownedsubsidiary of the company, and by C.H. Robinson Company, Inc., a Minnesota corporation and an indirect wholly-owned subsidiary of the company.The Notes were issued by the company to such initial purchasers in a private placement in reliance on Section 4(2) of the Securities Act of 1933, as amended.The Notes will not be or have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or anapplicable exemption from registration requirements.The fair value of long-term debt approximated carrying value of $500.0 million at December 31, 2013, based on observable market-based inputs. If our long-term debt was recorded at fair value, it would be classified as Level 2.44Table of ContentsNOTE 5: INCOME TAXESC.H. Robinson Worldwide, Inc. and its 80 percent (or more) owned U.S. subsidiaries file a consolidated federal income tax return. We file unitary or separatestate returns based on state filing requirements. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income taxreturns before 2007.A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands): 2013 2012 2011Unrecognized tax benefits, beginning of period$16,788 $7,668 $7,595Additions based on tax positions related to the current year1,572 4,172 1,476Additions for tax positions of prior years1,105 6,911 290Reductions for tax positions of prior years(1,464) (1,061) (1,005)Lapse in statute of limitations(238) (286) (688)Settlements(866) (616) —Unrecognized tax benefits, end of the period$16,897 $16,788 $7,668As of December 31, 2013, we had $21.5 million of unrecognized tax benefits and related interest and penalties, all of which would affect our effective tax rateif recognized. We are not aware of any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefit will significantlyincrease or decrease in the next twelve months.Income tax expense considers amounts which may be needed to cover exposures for open tax years. We do not expect any material impact related to open taxyears; however, actual settlements may differ from amounts accrued.We recognize interest and penalties related to uncertain tax positions in the provision for income taxes. During the years ended December 31, 2013, 2012, and2011, we recognized approximately $1.2 million, and $0.8 million, and $0.8 million in interest and penalties. We had approximately $4.6 million and $3.8million for the payment of interest and penalties accrued within noncurrent taxes payable as of December 31, 2013 and 2012. These amounts are not includedin the reconciliation above.The components of the provision for income taxes consist of the following for the years ended December 31 (in thousands): 2013 2012 2011Tax provision: Federal$180,351 $326,708 $219,124State26,351 38,931 28,260Foreign25,529 13,461 9,958 232,231 379,100 257,342Deferred provision (benefit): Federal24,877 (11,674) 4,781State3,623 (1,334) 546Foreign(3,274) (1,434) 423 25,226 (14,442) 5,750Total provision$257,457 $364,658 $263,092A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate for the years ended December 31 isas follows: 2013 2012 2011Federal statutory rate35.0% 35.0% 35.0%State income taxes, net of federal benefit2.9 2.7 2.7Other0.3 0.3 0.2 38.2% 38.0% 37.9%45Table of ContentsDeferred tax assets (liabilities) are comprised of the following at December 31 (in thousands): 2013 2012Deferred tax assets: Compensation$71,751 $96,660Receivables11,780 11,836Other8,541 9,443Deferred tax liabilities: Intangible assets(113,518) (109,334)Prepaid assets(9,948) (7,825)Long-lived assets(20,310) (21,171)Undistributed earnings of foreign subsidiaries(10,600) (12,857)Other(28) (85)Net deferred tax (liabilities) assets$(62,332) $(33,333)We have foreign net operating loss carryforwards with a tax effect of $7.8 million. A full valuation allowance has been established for these net operating losscarryforwards due to the uncertainty of the use of the tax benefit in future periods.NOTE 6: CAPITAL STOCK AND STOCK AWARD PLANSPREFERRED STOCK. Our Certificate of Incorporation authorizes the issuance of 20,000,000 shares of Preferred Stock, par value $0.10 per share. Thereare no shares of Preferred Stock outstanding. The Preferred Stock may be issued by resolution of our Board of Directors at any time without any action of thestockholders. The Board of Directors may issue the Preferred Stock in one or more series and fix the designation and relative powers. These include votingpowers, preferences, rights, qualifications, limitations, and restrictions of each series. The issuance of any such series may have an adverse effect on therights of holders of Common Stock and may impede the completion of a merger, tender offer, or other takeover attempt.COMMON STOCK. Our Certificate of Incorporation authorizes 480,000,000 shares of Common Stock, par value $.10 per share. Subject to the rights ofPreferred Stock which may from time to time be outstanding, holders of Common Stock are entitled to receive dividends out of funds legally available, whenand if declared by the Board of Directors, and to receive their share of the net assets of the company legally available for distribution upon liquidation ordissolution.For each share of Common Stock held, stockholders are entitled to one vote on each matter to be voted on by the stockholders, including the election ofdirectors. Holders of Common Stock are not entitled to cumulative voting. The stockholders do not have preemptive rights. All outstanding shares of CommonStock are fully paid and nonassessable.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 itvests. A summary of our total compensation expense recognized in our consolidated statements of operations and comprehensive income for stock-basedcompensation is as follows (in thousands): 2013 2012 2011Stock options $5 $3,585 $61Stock awards 6,808 53,481 36,390Company expense on ESPP discount 2,281 2,315 2,150Total stock-based compensation expense $9,094 $59,381 $38,601On May 9, 2013, our shareholders approved our 2013 Equity Incentive Plan, which allows us to grant certain stock awards, including stock options at fairmarket value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 3,400,000 shares plus the sharesremaining available for future grants under the 1997 Plan as of May 9, 2013, can be granted under this plan. Approximately 4,838,000 shares were availablefor stock awards as of December 31, 2013. Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash, generallybecome available again for issuance under the plan.We have awarded performance-based stock options to certain key employees. These options are subject to certain vesting requirements over a five-year period,based on the company’s earnings growth. Any options remaining unvested at the end of46Table of Contentsthe five year vesting period are forfeited to the company. Although participants can exercise options via a stock swap exercise, we do not issue reloads(restoration options) on the grants made after 2003.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 usingthe 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 December 31, 2013, unrecognized compensation expense related to stock options was$43.0 million. The amount of future expense to be recognized will be based on the company’s earnings growth and certain other conditions.The following schedule summarizes stock option activity in the plan. All outstanding unvested options as of December 31, 2013, relate to the performance-based grants from 2011 through 2013. Options WeightedAverageExercisePrice AggregateIntrinsicValue(in thousands) AverageRemainingLife(years)Outstanding at December 31, 20122,295,097 $61.72 Grants1,443,016 58.24 Exercised(218,222) 30.45 Terminated(22,347) 66.01 Outstanding at December 31, 20133,497,544 $62.21 $— 9.08Vested at December 31, 2013218,932 $68.81 $— 7.94Exercisable at December 31, 2013218,932 $68.81 $— 7.94Additional potential dilutive stock options totaling 218,932 for 2013 and 127,323 for 2012 have been excluded from our diluted net income per sharecalculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock).Information on the intrinsic value of options exercised is as follows (in thousands):2013$7,640201215,516201120,097The following table summarizes performance-based options by year of grant:Year of grant First vesting date Last vesting date Optionsgranted, net offorfeitures Weightedaverage grantdate fair value Unvested options2011 December 31, 2012 December 31, 2016 912,217 $15.72 693,2852012 December 31, 2013 December 31, 2017 1,155,285 13.15 1,155,2852013 December 31, 2014 December 31, 2018 1,430,042 11.83 1,430,042 3,497,544 $13.28 3,278,612Determining Fair ValueWe estimated the fair value of stock options granted using the Black-Scholes option pricing model. We estimate the fair value of restricted shares and unitsusing the Black-Scholes option pricing model-protective put method. A description of significant assumptions used to estimate the expected volatility, risk-freeinterest rate, and expected terms is as follows:Expected Volatility-Expected volatility was determined based on implied volatility of our traded options and historical volatility of our stock price.Risk-Free Interest Rate-The risk-free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues at the date of grant with aterm equal to the expected term.47Table of ContentsExpected Term-Expected term represents the period that our stock-based awards are expected to be outstanding and was determined based on historicalexperience and anticipated future exercise patterns, giving consideration to the contractual terms of unexercised stock-based awards.The fair value per option was estimated using the Black-Scholes option pricing model with the following assumptions: 2013 Grants 2012 Grants 2011 GrantsRisk-free interest rate.18-1.94% .18-.89% .12-1.22%Dividend per share (quarterly amounts)$0.35 $0.33-0.35 $0.29-0.33Expected volatility factor25.0-27.5% 26.0-27.5% 27.5-29.93%Expected option term.01-6.3 years .01-6 years .01-6 yearsWeighted average fair value per option$11.73 $13.61 $15.58FULL VALUE AWARDS. We have awarded performance shares and restricted stock units to certain key employees and non-employee directors. Theseawards are subject to certain vesting requirements over a five-year period, based on the company’s earnings growth. The awards also contain restrictions onthe awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price onthe date of grant, discounted for post-vesting holding restrictions. The discounts on outstanding grants vary from 18 percent to 22 percent and are calculatedusing the Black-Scholes option pricing model-protective put method. Changes in measured stock price volatility and interest rates are the primary reasons forchanges in the discount. These grants are being expensed based on the terms of the awards.The following table summarizes our unvested performance shares and restricted stock unit grants as of December 31, 2013: Number of PerformanceShares and Restricted Stock Units Weighted AverageGrant Date Fair ValueUnvested at December 31, 20122,568,588 $48.26Granted398,086 46.49Vested— —Forfeitures(938,005) 40.40Unvested at December 31, 20132,028,669 $51.55The following table summarizes performance shares and restricted stock units by year of grant: Year of grant First vesting date Last vesting date Performanceshares and stock unitsgranted, net offorfeitures Weightedaverage grantdate fair value (1) Unvested performanceshares and restrictedstock units2009 December 31, 2010 December 31, 2014 863,744 $44.06 397,3222010 December 31, 2011 December 31, 2015 713,298 63.28 420,8452011 December 31, 2012 December 31, 2016 626,459 53.73 476,1092012 December 31, 2013 December 31, 2017 336,307 48.65 336,3072013 December 31, 2014 December 31, 2018 398,086 46.49 398,086 2,937,894 $51.64 2,028,669________________________ (1)Amount shown is the weighted average grant date fair value of performance shares and restricted stock units granted, net of forfeitures.48Table of ContentsWe have also awarded restricted shares and restricted stock units to certain key employees that vest primarily based on their continued employment. The valueof these awards is established by the market price on the date of the grant and is being expensed over the vesting period of the award. The following tablesummarizes these unvested restricted share and restrictedstock unit grants as of December 31, 2013: Number of RestrictedShares and Stock Units Weighted AverageGrant Date Fair ValueUnvested at December 31, 2012527,939 $44.26Granted457,917 46.51Vested(111,183) 41.72Forfeitures(23,188) 48.56Unvested at December 31, 2013851,485 $45.68We have also issued to certain key employees and non-employee directors restricted stock units which are fully vested upon issuance. These units containrestrictions 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 samemethod discussed above. These grants have been expensed during the year they were earned.A summary of the fair value of full value awards vested (in thousands): 2013$6,808201253,562201135,663As of December 31, 2013, there is unrecognized compensation expense of $177.3 million related to previously granted full value awards. The amount of futureexpense to be recognized will be based on the company’s earnings growth and certain other conditions.EMPLOYEE STOCK PURCHASE PLAN. Our 1997 Employee Stock Purchase Plan allows our employees to contribute up to $10,000 of their annualcash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of the quarter discounted by 15 percent.Shares are vested immediately. The following is a summary of the employee stock purchase plan activity (dollar amounts in thousands): Shares purchasedby employees Aggregate costto employees Expense recognizedby the company2013 259,730 $12,928 $2,2812012 248,405 13,116 2,3152011 196,332 12,183 2,150SHARE REPURCHASE PROGRAMS. During 2009 and 2012, our Board of Directors authorized stock repurchase programs that allow management torepurchase 10,000,000 shares under each authorization. The activity under those programs for each of the periods reported is as follows (dollar amounts inthousands): Shares repurchased Total value of sharesrepurchased2009 Program 2010 Purchases 1,394,831 $90,5002011 Purchases 3,540,171 246,9352012 Purchases 4,237,555 257,0642013 Purchases 827,443 48,048 Shares repurchased Total value of sharesrepurchased2012 Program 2013 Purchases 10,000,000 $579,85349Table of ContentsAs of December 31, 2013, there were no shares remaining for repurchase under the 2009 or 2012 authorization. During 2013, our Board of Directors increasedthe number of shares authorized to be repurchased by 15,000,000 shares. The activity under this authorization is as follows (dollar amounts in thousands): Shares repurchased Total value of sharesrepurchased2013 Program 2013 Purchases 930,075 $57,689As of December 31, 2013, there were 14,069,925 shares remaining for repurchase under the 2013 authorization.NOTE 7: COMMITMENTS AND CONTINGENCIESEMPLOYEE BENEFIT PLANS. We offer a defined contribution plan, which qualifies under section 401(k) of the Internal Revenue Code and covers alleligible U.S. employees. Annual profit-sharing contributions are determined by us, in accordance with the provisions of the plan. We can also elect to makematching contributions to the plan. Defined contribution plan expense, including matching contributions, was approximately (in thousands): 2013$19,907201224,769201130,550We have committed to a defined contribution match of four percent of eligible compensation in 2014.NONQUALIFIED DEFERRED COMPENSATION PLAN. The Robinson Companies Nonqualified Deferred Compensation Plan provided certainemployees the opportunity to defer a specified percentage or dollar amount of their cash and stock compensation. Participants could elect to defer up to 100percent of their cash compensation. The accumulated benefit obligation was $0.9 million as of both December 31, 2013 and 2012. We have purchasedinvestments to fund the future liability. The investments had an aggregate market value of $0.9 million as of both December 31, 2013 and 2012 and areincluded in other assets in the consolidated balance sheets. In addition, all restricted shares vested but not yet delivered, as well as a deferred share awardgranted to our CEO and vesting ratably over 15 years, are held within this plan.LEASE COMMITMENTS. We lease certain facilities and equipment under operating leases. Information regarding our lease expense is as follows (inthousands): 2013$54,753201241,689201140,375Minimum future lease commitments under noncancelable lease agreements in excess of one year as of December 31, 2013, are as follows (in thousands): 2014$43,966201537,510201629,466201722,935201815,619Thereafter17,540Total$167,036In addition to minimum lease payments, we are typically responsible under our lease agreements to pay our pro rata share of maintenance expenses, commoncharges, and real estate taxes of the buildings we lease space in.50Table of ContentsLITIGATION. We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations,including fifteen contingent auto liability cases as of December 31, 2013. For such legal proceedings, we have accrued an amount that reflects the aggregateliability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because ofthe preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistenttreatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are not able toestimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings isnot expected to have a material effect on our consolidated financial position, results of operations, or cash flows.NOTE 8: ACQUISITIONS AND DIVESTITURESOn November 1, 2012, we acquired all of the outstanding stock of Phoenix International Freight Services, Ltd. (“Phoenix”) for the purpose of expanding ourcurrent market presence and service offerings in international freight forwarding. Total purchase consideration was $677.3 million, net of post-closing cashand working capital adjustments, in accordance with the purchase agreement. The acquisition price was financed with $60.2 million in newly-issuedcommon stock (representing 1.1 million shares), borrowings under the revolving credit facility of approximately $173.0 million discussed in Note 4, and theremainder with cash onhand. The following is a summary of the allocation of purchase consideration to the estimated fair value of net assets for theacquisition of Phoenix (in thousands):Cash and cash equivalents$75,372Receivables125,595Other current assets7,209Property and equipment12,160Identifiable intangible assets130,000Goodwill453,208Other noncurrent assets13,542Total assets$817,086 Accounts payable$(45,367)Accrued expenses(14,340)Other liabilities(80,106)Estimated net assets acquired$677,273Identifiable intangible assets and estimated useful lives are as follows (dollars in thousands): Estimated Life (years) Customer relationships8 $129,800Noncompete agreements5 200Total identifiable intangible assets $130,000The Phoenix goodwill is a result of acquiring and retaining the Phoenix existing workforce and expected synergies from integrating their business into C.H.Robinson. The goodwill is not deductible for tax purposes.51Table of ContentsThe measurement period adjustments during the year ended December 31, 2013, to the previously recorded opening balances relate primarily to changes in theallocation of purchase consideration to certain accounts, based on resolution of certain working capital adjustments with the selling shareholders. Theadjustments during 2013 resulted in a $1.5 million increase in receivables, a $5.3 million increase in goodwill, a $1.7 million decrease in current deferredtaxes, a $2.1 million decrease in non-current deferred assets, a $3.0 million decrease in taxes payable, and a $10.6 million increase in other assets. The otherasset recorded is an indemnification asset that approximates the estimated contingencies related to uncertain tax positions. Any subsequent changes in theindemnification asset will be recorded in investment and other (expense) income in our consolidated statement of operations and comprehensive income. Theoffset to these adjustments was a reduction in the estimated receivable amount from the selling shareholders. The measurement period adjustments wererecorded prospectively, as they are not considered material to the financial statements for the year ended December 31, 2013.On October 16, 2012, we sold substantially all of the operations of our subsidiary, T-Chek Systems, Inc. ("T-Chek"), which represented a majority of ourPayment Services business, to Electronic Funds Source, LLC ("EFS") for $302.5 million in cash. EFS acquired the assets and assumed certain liabilities ofT-Chek. We recorded a gain on the sale of the assets and liabilities of approximately $281.6 million during the fourth quarter of 2012.On an unaudited pro forma basis, assuming the T-Chek divestiture and the Phoenix acquisition had closed on January 1, 2011, the results of C.H. Robinsonexcluding T-Chek and including Phoenix would have resulted in the following (in thousands): Twelve Months Ended December 31, 2012 C.H. Robinson AsReported T-Chek Operations Phoenix Operations Combined Pro Forma Total revenues$11,359,113 $(41,623) $692,836 $12,010,326Income from operations675,320 (20,578) 24,131 678,873Net income593,804 (12,804) 11,976 592,976 Twelve Months Ended December 31, 2011 C.H. Robinson AsReported T-Chek Operations Phoenix Operations Combined Pro Forma Total revenues$10,336,346 $(49,260) $803,358 $11,090,444Income from operations692,730 (24,569) 36,906 705,067Net income431,612 (15,299) 24,150 440,46352Table of ContentsPhoenix pro forma financial information includes the following adjustments for the twelve months ended December 31 (in thousands): 2012 2011 Eliminate personnel costs from purchased transportation and related services$(24,422) $(29,028)Eliminate personnel costs from selling, general, and administrative services(50,065) (54,209)Reclassify costs to personnel expenses74,487 83,237Contractual changes in compensation(5,080) (4,060)Additional amortization expense on identifiable intangible assets13,555 16,265Rent expense for new lease agreements280 329Depreciation on acquired building123 150Incremental interest expense(2,127) (2,574)Additional bonus paid by sellers(1,400) —Third party advisory fees paid by sellers(582) —Elimination of variable interest entities not acquired215 220Tax effect(1,487) (1,842)The pro forma consolidated financial information was prepared for comparative purposes only and includes certain adjustments, as noted above. Theadjustments are estimates based on currently available information and actual amounts may have differed materially from these estimates. They do not reflectthe effect of costs or synergies that would have been expected to result from the integration of the acquisition. The pro forma information does not purport to beindicative of the results of operations that actually would have resulted had the acquisition occurred at the beginning of each period presented or of futureresults of the consolidated entity. The results of operations and financial condition of Phoenix has been included in our consolidated financial statements sincetheir acquisition date of November 1, 2012.On October 1, 2012, we acquired all of the outstanding stock of the operating subsidiaries of Apreo Logistics S.A. ("Apreo"), a leading freight forwarderbased in Warsaw, Poland, for the purpose of expanding our current market presence and service offerings in Europe. The total purchase price of Apreo wasapproximately $26.5 million, which was paid in cash. We recorded $17.4 million of goodwill and other intangible assets related to this acquisition. Thegoodwill will not be deductible for tax purposes. The results of our operations for 2012 were not materially impacted by this acquisition.In September 2011, we acquired substantially all of the assets of Timco Worldwide in exchange for the assumption of approximately $3.8 million of liabilities.Timco Worldwide was a melon category provider in Davis, California. We recorded $2.4 million of goodwill and other intangible assets related to thisacquisition. All goodwill and other intangible assets related to this acquisition are tax deductible over 15 years. The results of our operations for 2011 were notmaterially impacted by this acquisition.The results of operations and financial condition of these acquisitions have been included in our consolidated financial statements since their acquisition dates.53Table of ContentsNOTE 9: ACCELERATED SHARE REPURCHASEOn August 24, 2013, we entered into two letter agreements with unrelated third party financial institutions to repurchase an aggregate of $500.0 million of ouroutstanding common stock (the "ASR Agreements"). The total aggregate number of shares to be repurchased pursuant to these agreements is determined basedon the volume-weighted average price of our common stock during the purchase period, less a fixed discount of 0.94%. Under the ASR Agreements, we paid$500.0 million to the financial institutions and received 6.1 million shares of common stock with a fair value of $350.0 million during the third quarter of2013, which represented approximately 70 percent of the total shares expected to be repurchased under the agreements. One of the two financial institutionsterminated their ASR Agreement and delivered 1.2 million shares on December 13, 2013. We recorded this transaction as an increase in treasury stock of$425.0 million, and recorded the remaining $75.0 million as a decrease to additional paid in capital on our consolidated balance sheet as of December 31,2013. In accordance with the terms of the remaining ASR Agreement, we had the option to settle our delivery obligation, if any, in cash or shares and we maybe required to settle in cash in very limited circumstances. We accounted for the variable component of shares to be delivered under the ASR Agreement as aforward contract indexed to our common stock which met all of the applicable criteria for equity classification, and therefore, was not accounted for as aderivative instrument, but instead was also accounted for as a component of equity. The remaining ASR Agreement continued to meet those requirements forequity classification as of December 31, 2013. Subsequent to December 31, 2013, in February 2014, the remaining ASR agreement was terminated.Approximately 1.2 million shares were delivered as final settlement of the remaining agreement. We will reclassify the $75.0 million recorded in additionalpaid in capital to treasury stock during the first quarter of 2014.The delivery of 7.3 million shares of our common stock reduced our outstanding shares used to determine our weighted average shares outstanding forpurposes of calculating basic and diluted earnings per share for the twelve months ended December 31, 2013. We have also evaluated the ASR Agreement forthe potential dilutive effects of any shares remaining to be received upon settlement and determined that the additional shares would be anti-dilutive andtherefore were not included in our EPS calculation for the three and twelve months ended December 31, 2013.NOTE 10: CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSSAccumulated other comprehensive loss is included in the Stockholders' investment on our consolidated balance sheet. The recorded balance, at December 31,2013, and December 31, 2012, was $10.6 million and $9.3 million, respectively. Accumulated other comprehensive loss is comprised solely of foreigncurrency translation adjustment at December 31, 2013 and 2012.In February 2013, the Financial Accounting Standards Board issued guidance on the reporting of amounts reclassified out of accumulated othercomprehensive income (loss). This guidance requires an entity to report the effect of significant reclassifications out of accumulated other comprehensiveincome on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. Entities may presentthis information either on the face of the statement where net income is presented or in the notes. This guidance was applied on January 1, 2013. The guidancerequired additional disclosures, however it did not impact our results of operations, financial position, or cash flows. During the year ended December 31,2013, no amounts of accumulated other comprehensive loss were reclassified into net income.54Table of ContentsNOTE 11: SUPPLEMENTARY DATAOur unaudited results of operations for each of the quarters in the years ended December 31, 2013 and 2012 are summarized below (in thousands, except pershare data). 2013 March 31 June 30 September 30 December 31Total revenues: Transportation $2,603,182 $2,818,077 $2,880,901 $2,767,550Sourcing 387,852 466,811 432,373 382,098Payment Services 3,233 3,374 3,391 3,234Total revenues 2,994,267 3,288,262 3,316,665 3,152,882Costs and expenses: Purchased transportation and related services 2,181,930 2,386,932 2,450,923 2,351,530Purchased products sourced for resale 356,006 428,059 401,820 356,299Purchased payment services 609 669 616 588Personnel expenses 212,645 206,009 204,388 203,619Other selling, general, and administrative expenses 74,371 84,117 82,563 85,733Total costs and expenses 2,825,561 3,105,786 3,140,310 2,997,769Income from operations 168,706 182,476 176,355 155,113Net income $103,343 $111,872 $107,737 $92,952Basic net income per share $0.64 $0.70 $0.69 $0.62Diluted net income per share $0.64 $0.70 $0.69 $0.62Basic weighted average shares outstanding 160,637 159,818 156,924 150,856Dilutive effect of outstanding stock awards 53 99 120 274Diluted weighted average shares outstanding 160,690 159,917 157,044 151,130Market price range of common stock: High $67.93 $61.91 $62.46 $61.94Low $55.81 $53.74 $55.26 $55.92 55Table of Contents2012 March 31 June 30 September 30 December 31 (1)Total revenues: Transportation $2,176,797 $2,476,805 $2,445,883 $2,585,930Sourcing 359,730 462,597 418,377 379,479Payment Services 15,587 16,312 16,149 5,467Total revenues 2,552,114 2,955,714 2,880,409 2,970,876Costs and expenses: Purchased transportation and related services 1,809,581 2,107,799 2,063,109 2,176,789Purchased products sourced for resale 327,787 422,392 384,630 348,936Purchased payment services — — — 519Personnel expenses 183,438 177,184 179,342 226,042Other selling, general, and administrative expenses 61,763 63,425 66,071 84,986Total costs and expenses 2,382,569 2,770,800 2,693,152 2,837,272Income from operations 169,545 184,914 187,257 133,604Net income $106,500 $114,582 $116,330 $256,392Basic net income per share $0.65 $0.71 $0.72 $1.59Diluted net income per share $0.65 $0.71 $0.72 $1.58Basic weighted average shares outstanding 162,693 161,887 160,782 160,880Dilutive effect of outstanding stock awards 330 313 221 919Diluted weighted average shares outstanding 163,023 162,200 161,003 161,799Market price range of common stock: High $71.76 $67.31 $61.97 $64.14Low $62.84 $55.35 $50.81 $57.16_________________________ (1)The Company's results for the fourth quarter of 2012 were effected by certain significant event-specific charges or credits related to our acquisitions and divestitures. See "Reportedto Adjusted Statements of Operations Data" in Selected Financial Data in Item 6 and Management's Discussion and Analysis of Financial Condition and Results of Operations inItem 7 of Part II of this report.56Table of ContentsITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A.CONTROLS AND PROCEDURESDisclosure Controls and ProceduresUnder the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated theeffectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the“Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered bythis report, our disclosure controls and procedures were effective.Management’s Report on Internal Controls Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f)under the Exchange Act. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to beeffective can provide only reasonable assurance with respect to financial statement preparation and presentation.Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted anevaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (1992)issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework (1992), our management concluded that our internal control over financial reporting was effective as of December 31, 2013.The effectiveness of our internal control over financial reporting as of December 31, 2013, has been audited by Deloitte & Touche LLP, an independentregistered public accounting firm, as stated in their report, which is included in Item 8.Changes in Internal Controls Over Financial ReportingThere have not been any changes to the company’s internal control over financial reporting during the fourth quarter, to which this report relates, that havematerially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting. PART IIIITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTInformation with respect to our Board of Directors contained under the heading “Proposal One: Election of Directors,” and information contained under theheading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement, are incorporated in this Form 10-K by reference. Informationwith respect to our executive officers is provided in Part I, Item 1.We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, directors, and all othercompany employees performing similar functions. This code of ethics, which is part of our corporate compliance program, is posted on the Investors page ofour website at www.chrobinson.com under the caption “Code of Ethics.”We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics byposting such information on our website, at the web address specified above. 57Table of ContentsITEM 11.EXECUTIVE COMPENSATIONThe information contained under the heading “Named Executive Compensation” in the Proxy Statement (except for the information set forth under thesubcaption “Compensation Committee Report on Executive Compensation”) is incorporated in this Form 10-K by reference.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS(a) Equity Compensation PlansThe following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2013:Plan Category Number of securities to beissued upon exercise ofoutstanding options,warrants and rights Weighted average exerciseprice of outstanding options,warrants and rights Number of securitiesremaining available forfuture issuance underequity compensation plans(excluding securitiesreflected in the first column)Equity compensation plans approved by security holders (1) 7,616,197 $62.21 4,837,808Equity compensation plans not approved by security holders — — —Total 7,616,197 $62.21 4,837,808______________________(1)Includes stock available for issuance under our Employee Stock Purchase Plan, as well as options, restricted stock granted and shares that may become subject to future awardsunder our 2013 Equity Incentive Plan. Specifically, 4,118,653 shares remain available under our Employee Stock purchase plan, and 3,497,544 options remain outstanding forfuture exercise. Under our 2013 Equity Incentive Plan, 4,837,808 shares may become subject to future awards in the form of stock option grants or the issuance of restrictedstock.(b) Security OwnershipThe information contained under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement is incorporated inthis Form 10-K by reference.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information contained under the heading “Related Party Transactions” in the Proxy Statement is incorporated in this Form 10-K by reference. ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information contained under the heading “Proposal Four: Ratification of Independent Auditors” in the Proxy Statement is incorporated in this Form 10-Kby reference.58Table of ContentsPART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)The following documents are filed as part of this report:(1) The Company’s 2013 Consolidated Financial Statements and the Report of Independent Registered Public Accounting Firm are included in Part II,Item 8. Financial Statements and Supplementary Data.(2) Financial Statement Schedules-The following Financial Statement Schedule should be read in conjunction with the Consolidated FinancialStatements and Report on Independent Registered Public Accounting Firm included in Part II, Item 8 of this Annual report on Form 10-K:Schedule II Valuation and Qualifying AccountsSchedules other than the one listed above are omitted due to the absence of conditions under which they are required or because the information called foris included in Consolidated Financial Statements or the Notes to the Consolidated Financial Statements.(b) Index to Exhibits-See Exhibit Index on page 61 for a description of the documents that are filed as Exhibits to this report on Form 10-K or incorporatedby reference herein. Any document incorporated by reference is identified by a parenthetical referencing the SEC filing which included the document. We willfurnish a copy of any Exhibit at no cost to a security holder upon request.SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTSAllowance for Doubtful AccountsThe transactions in the allowance for doubtful accounts for the years ended December 31 were as follows (in thousands): 2013 2012 2011Balance, beginning of year$34,560 $31,328 $30,945Provision15,587 10,459 9,052Write-offs(10,855) (7,227) (8,669)Balance, end of year$39,292 $34,560 $31,32859Table of ContentsSIGNATURESPursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on itsbehalf by the undersigned, thereunto duly authorized, in the City of Eden Prairie, State of Minnesota, on March 3, 2014. C.H. ROBINSON WORLDWIDE, INC. By: /s/ BEN G. CAMPBELL Ben G. Campbell Vice President, General Counsel and SecretaryPursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant andin the capacities indicated on March 3, 2014. Signature Title /s/ JOHN P. WIEHOFF Chief Executive Officer, President, and Chairman of the Board (PrincipalExecutive Officer)John P. Wiehoff /s/ CHAD M. LINDBLOOM Senior Vice President and Chief Financial Officer (Principal Financial Officerand Principal Accounting Officer)Chad M. Lindbloom * DirectorScott P. Anderson * DirectorRobert Ezrilov * DirectorWayne M. Fortun * DirectorMary J. Steele Guilfoile * DirectorJodee Kozlak * DirectorDavid W. MacLennan * DirectorReBecca Koenig Roloff * DirectorBrian P. Short * DirectorJames B. Stake *By: /s/ BEN G. CAMPBELL Ben G. Campbell Attorney-in-Fact60Table of ContentsINDEX TO EXHIBITS Number Description2.1 Asset Purchase Agreement by and among C.H. Robinson Worldwide, Inc., T-Chek Systems, Inc., and Electronic Funds Source LLC, dated as ofOctober 16, 2012 (Incorporated by reference to Exhibit 2.1 to the Registrant's Form 8-K filed on October 17, 2012) 2.2 Purchase Agreement dated as of September 24, 2012, among Phoenix International Freight Services, Ltd., the Selling Shareholders thereto, JamesWilliam McInerney and Emil Sanchez, solely in their respective capacities as Selling Shareholder Representatives, and C.H. Robinson Worldwide, Inc.(Incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on November 1, 2012) 3.1 Certificate of Incorporation of the Company (as amended on May 19, 2012 and incorporated by reference to Exhibit 3.1 to the Registrant's CurrentReport on Form 8-K, filed May 15, 2012) 3.2 Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1 filed on August 15, 1997,Registration No. 333-33731) 3.3 Certificate of Designation of Series A Junior Participating Preferred Stock of the Company (Incorporated by reference to Exhibit 3.3 to the Registrant’sRegistration Statement on Form S-1 filed on October 9, 1997, Registration No. 333-33731) 4.1 Form of Certificate for Common Stock (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 filed onOctober 9, 1997, Registration No. 333-33731, file no. 000-23189) 4.2 Amended and Restated Rights Agreement between the Company and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 4.1 tothe Registrant’s Current Report on Form 8-K, dated September 10, 2007) †10.1 1997 Omnibus Stock Plan (as amended May 18, 2006) (Incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A, filed onApril 6, 2006, file no. 000-23189) †10.2 C.H. Robinson Worldwide, Inc. 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-Kfiled on May 14, 2013) 10.3 Credit Agreement dated as of October 29, 2012, among C.H. Robinson Worldwide, Inc., the lenders party thereto, and U.S. Bank NationalAssociation, as Administrative Agent for the Lenders, as Swing Line Lender and as LC Issuer (Incorporated by reference to Exhibit 10.1 to theRegistrant's Current Report on Form 8-K, filed November 1, 2012) 10.4 Letter Agreement dated as of August 24, 2013, by and between C.H. Robinson Worldwide, Inc. and J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August26, 2013) 10.5 Letter Agreement dated as of August 24, 2013, by and between C.H. Robinson Worldwide, Inc. and Morgan Stanley & Co. LLC (incorporated byreference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on August 26, 2013) 10.6 Note Purchase Agreement dated as of August 23, 2013, by and among the Company and the Purchasers (incorporated by reference to Exhibit 10.3 tothe Company's Current Report on Form 8-K filed on August 26, 2013) †10.7 Form of Management-Employee Agreement (Key Employee) (Incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007, file no. 000-23189) †10.8 Form of Management Confidentiality and Noncompetition Agreement (Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2007, file no. 000-23189) †10.9 C.H. Robinson Worldwide, Inc. 2010 Non-Equity Incentive Plan (Incorporated by reference to Appendix A to the Proxy Statement on Form DEF 14A,filed on March 26, 2010) †10.10 Robinson Companies Nonqualified Deferred Compensation Plan (Incorporated by reference to Exhibit 10.8 to the Registrant's Annual Report on 10-K forthe year ended December 31, 2012) †10.11 Award of Deferred Shares into the Robinson Companies Nonqualified Deferred Compensation Plan, dated December 21, 2000, by and between C.H.Robinson Worldwide, Inc. and John P. Wiehoff (Incorporated by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for theyear ended December 31, 2000, file no. 000-23189) †10.12 Form of Restricted Stock Award for U.S. Managerial Employees (Incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report onForm 10-K for the year ended December 31, 2008, file no. 000-23189) †10.13 Form of Restricted Unit Award for U.S. Managerial Employees (Incorporated by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form10-K for the year ended December 31, 2008, file no. 000-23189) †10.14 2012 Form of Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.13 to the Registrant's Annual Report on Form 10-K for theyear ended December 31, 2011) †10.15 2012 Form of Restricted Stock Award for U.S. Managerial Employees (Incorporated by reference to Exhibit 10.14 to the Registrant's Annual Report onForm 10-K for the year ended December 31, 2011) 61Table of Contents Number Description †10.16 2012 Form of Restricted Stock Award for Officers (Incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-K for theyear ended December 31, 2011) †10.17 2012 Form of Time-Based Restricted Stock Unit Award (Incorporated by reference to Exhibit 10.15 to the Registrant's Annual Report on Form 10-Kfor the year ended December 31, 2012) *†10.18 Form of Incentive Stock Option Agreement *†10.19 Form of Performance Share Award for Officers *†10.20 Form of Performance Share Award for U.S. Managerial Employees *†10.21 Form of Time-Based Restricted Stock Unit Award *†10.22 Key Employee Agreement *†10.23 Employee Confidentiality and Protection of Business Agreement *21 Subsidiaries of the Company *23.1 Consent of Deloitte & Touche LLP *24 Powers of Attorney *31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *101 The following financial statements from our Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 3, 2014, formatted inXBRL: (i) Consolidated Statement of Operations for the years ended December 31, 2013, 2012, and 2011, (ii) Consolidated Balance Sheets as ofDecember 31, 2013 and 2012, (iii) Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012, (iv) ConsolidatedStatements of Stockholders’ Investment for the years ended 2013, 2012, and 2011, and (v) the Notes to the Consolidated Financial Statements, taggedas blocks of text*Filed herewith†Management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K pursuant to Item 15(c) of the Form 10-K Report62C.H. ROBINSON INCENTIVE STOCK OPTION (PERFORMANCE-BASED U.S.) AGREEMENTTHIS AGREEMENT (the “Agreement”), made on the Grant Date set forth in the C. H. Robinson Worldwide, Inc. Equity Awardletter dated December 4, 2013 by and between C.H. ROBINSON WORLDWIDE, INC., a Delaware corporation (the “Company”), and theemployee named on the C. H. Robinson Worldwide, Inc. Equity Award letter (“Employee”), pursuant to the Company’s 2013 Equity Incentive Plan(the “Plan”).Unless the context indicates otherwise, terms that are not defined in this Agreement shall have the meaning set forth in the Plan as itcurrently exists or as it is amended in the future. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,the Company and Employee hereby agree as follows:1. Grant of OptionThe Company hereby grants to Employee, on the Grant Date set forth in the C. H. Robinson Worldwide, Inc. Equity Award letter, the right and option(hereinafter called the “Option”) to purchase all or any part of an aggregate of the number of shares of Common Stock, par value $0.10 per share (the“Common Stock”), set forth on the C. H. Robinson Worldwide, Inc. Equity Award letter (the “Option Shares”) at the price per share set forth on theC. H. Robinson Worldwide, Inc. Equity Award letter on the terms and conditions set forth in this Agreement and in the Plan. This Option is intendedto be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The Option shallterminate at the close of business ten (10) years from the Award Date, or such shorter period as is prescribed herein. Employee shall not have any ofthe rights of a stockholder with respect to the shares subject to the Option until such shares shall be issued to Employee upon the proper exercise ofthe Option.2. Vesting and Exercisability(a) The Measurement Period for performance shall be January 1 through December 31 of a calendar/fiscal year during the years 2014 - 2018.Beginning on December 31, 2014, and on each December 31 thereafter through December 31, 2018, a portion of the Option will vest, but only ifand only to the extent that the Company’s Vesting Indicator (“VI”) is greater than zero for the respective Measurement Period, as determined by theCompensation Committee of the Company’s Board of Directors, and the applicable Service conditions set forth in this Agreement are satisfied. TheVI is defined as the sum of 10 percentage points plus the percentage increase (or decrease) in Company diluted net income per share for the applicableMeasurement Period over the prior year rounded to two decimal places. For purposes of calculating the VI for any year during the MeasurementPeriod, the growth for a year is the percentage the current year’s EPS exceeds the greater of the previous year’s diluted net income per share or thediluted net income per share for 2013. That sum, in turn, is rounded to the nearest whole percentage.Example: Prior Year Measurement Period Percentage IncreaseDiluted net income per share $2.00 $2.19 9.50%Add: 10 Percentage Points 19.50%Rounded to the Nearest Whole Percentage VI=20.00%In determining how many Option Shares are vested with respect to each Measurement Period, the VI is multiplied by the total number of OptionShares covered by the Option, with the result then rounded to the nearest whole share.Example: Option Grant: 1,000 Option Shares Year 1 Year 2 Year 3VI: 20% 12% 26%Rounded Number of Option Shares Vested as of Dec. 31: 200 120 260 OPTS 3.1December 2013(b) The Compensation Committee’s calculation of VI shall be final, and the Compensation Committee retains the discretion to eliminate unusual items,if any, for purposes of calculating the VI for any particular Measurement Period (including adjustments to the computation of diluted net income pershare).(c) Subject to the terms and conditions set forth herein and in the Plan, the vested portion of this Option shall be exercisable by Employee until thetermination of the Option. The vesting terms provided above shall be cumulative, meaning that to the extent the Option has not already been exercisedand has not expired, terminated or been forfeited, Employee or the person otherwise entitled to exercise the Option under the terms of this Agreementand the Plan may at any time purchase all or any portion of the then vested Option Shares. Any Option Shares not vested after the calculation of VIfor the Measurement Period ending December 31, 2018 shall be forfeited by the Employee and cancelled.(d) During the lifetime of Employee, the Option shall be exercisable only by Employee and shall not be assignable or transferable by Employee, otherthan by will or the laws of descent and distribution, as further provided in Section 6(c) of the Plan.(e) Notwithstanding Section 2(a), the vesting of this Option shall be accelerated, and this Option may be exercised as to all Option Shares remainingsubject to this Option Agreement, on the date of a Change in Control.(f) Employee understands that to the extent that the aggregate Fair Market Value (determined at the time the Option was granted) of the shares ofCommon Stock with respect to which all incentive stock options within the meaning of Section 422 of the Code are exercisable for the first time byEmployee during any calendar year exceed $100,000, in accordance with Section 422(d) of the Code such options shall be treated as options that donot qualify as incentive stock options.3. Effect of Termination of Employment(a) Except as otherwise provided herein, if Employee ceases to be an Employee (as defined in the Plan) prior to the termination of the Option, thenEmployee shall (i) forfeit the Option Shares that have not yet become vested, which shall be cancelled and be of no further force or effect, and (ii)subject to Section 3(b), retain the right to exercise any Option Shares that have previously become vested until the termination date of the Option. If,prior to any termination of Employment, Employee has executed and continues to adhere to a Management-Employee (“Key Employee”) Agreementin favor of the Company which contains a non-competition provision, then the Option shall not be terminated and vesting shall continue through theend of two (2) additional Measurement Periods following Employee’s termination of Employment with the Company. In addition, if prior to anytermination of Employment, Employee has executed and continues to adhere to a Management-Employee (“Key Employee”) Agreement in favor ofthe Company which contains a non-competition provision and if Employee has a minimum of five (5) consecutive years of service at the time ofsuch termination, then the Option shall not terminate and vesting shall continue through the end of additional Measurement Periods following suchtermination according to the following schedule:Sum of Age in Whole Years and Tenure in Whole Years Additional Years of Potential VestingAt least 50 and less than 60 3 yearsAt least 60 and less than 70 4 yearsAt least 70 and greater 5 yearsAge and Tenure are individually rounded up to the nearest whole number and Tenure is defined as the period of time between Employee’s date ofseparation from Service and Employee’s last date of hire (or in the case of an acquisition, the equivalent last date of hire with the acquired entity).Under no event, however, will any entitlement to continued vesting under this Section 3(a) cause the vesting period of this Option to exceed five (5)years. Employee understands that if the Option or any portion of the Option is exercised in accordance with the above later than three months from thedate of termination of employment, the Option or such portion of the Option may not qualify for treatment as an incentive stock option within themeaning of Section 422 of the Code.(b) Notwithstanding the foregoing, if Employee embezzles or misappropriates Company funds or property, or is determined by the Company to havefailed to comply with the terms and conditions of any of the following agreements which Employee may have executed in favor of the Company: i)Confidentiality and Noncompetition Agreement, ii) Management-Employee Agreement, iii) Sales-Employee Agreement, iv) Data Security Agreement,or v) any other agreement containing post-OPTS 3.1December 2013employment restrictions (collectively the “Obligations”), will immediately and automatically forfeit the Option, whether vested or unvested, and willretain no rights with respect to such Option.(c) If Employee shall die while this Option is still exercisable according to its terms, or if employment is terminated because Employee has died orbecome subject to a Disability while in the employ of the Company or a subsidiary, if any, and Employee shall not have fully exercised the Option,such Option shall immediately vest in full and may be exercised at any time up to the expiration of the Option after Employee’s death or date oftermination of employment for Disability by Employee, personal representatives or administrators, or guardians of Employee, as applicable, or by anyperson or persons to whom the Option is transferred by will or the applicable laws of descent and distribution.4. Manner of Exercise(a) The Option may be exercised only by Employee or as otherwise provided herein or in the Plan by delivering within the Option period written noticeto the Company at its principal office. The notice shall state the number of Option Shares as to which the Option is being exercised and beaccompanied by payment in full of the Option price for all Option Shares designated in the notice.(b) Employee may pay the Option price in cash, by check (bank check, certified check or personal check), by money order, or with the approval ofthe Company (i) by delivering to the Company for cancellation shares of Common Stock of the Company with a Fair Market Value as of the date theOption is exercised equal to the purchase price of the Option Shares being purchased or (ii) by delivering to the Company a combination of cash andshares of Common Stock of the Company with an aggregate Fair Market Value equal to the purchase price.5. Additional Forfeiture Provisions Employee and the Company have entered into one or more of the agreements included as Obligations under Section 3(b). Any shares of CommonStock of the Company acquired by Employee pursuant to the exercise of this Option shall be forfeited to the Company, in full, if Employee violatesany of the terms of the Obligations or embezzles or misappropriates Company funds or property. 6. Miscellaneous(a) This Option is issued pursuant to the Company’s 2013 Equity Incentive Plan, a copy of which has been provided to the Employee, and is subjectto its terms. This Agreement and the other documents governing the Option shall be subject to the choice of law provisions of Section 18(e) of thePlan.(b) This Agreement shall not confer on Employee any right with respect to continuance of employment by the Company or any of its affiliates, norwill it interfere in any way with the right of the Company to terminate such employment at any time for any reason. Employee shall have none of therights of a stockholder with respect to shares subject to this Option until such shares shall have been issued to Employee upon exercise of this Option.(c) The exercise of all or any parts of this Option shall only be effective at such time that the sale of Common Stock pursuant to such exercise willnot violate any state or federal securities or other laws.(d) If there shall be any change in the shares of Common Stock of the Company through merger, consolidation, reorganization, recapitalization,dividend in the form of stock (of whatever amount), stock split or other change in the corporate structure of the Company, and all or any portion ofthe Option shall then be unexercised and not yet expired, appropriate adjustments in the outstanding Option shall be made by the Company inaccordance with Section 12(a) of the Plan. Such adjustments shall include, where appropriate, changes in the number of shares of Common Stockand the price per share subject to the outstanding Option as further provided in Section 12(a) of the Plan.(e) The Company shall at all times during the term of the Option reserve and keep available such number of shares as will be sufficient to satisfy therequirements of this Agreement.(f) If Employee shall dispose of any of the shares of Common Stock of the Company acquired by Employee pursuant to the exercise of the Optionwithin two years from the date the Option was granted or within one year after the transfer of any such shares to Employee upon exercise of theOption, then in order to provide the Company with the opportunity to claim the benefit of any income tax deduction which may be available to it underthe circumstances, Employee shall promptly notify the Company of the dates of acquisition and disposition of such shares, the number of shares sodisposed of and theOPTS 3.1December 2013consideration, if any, received for such shares. In order to comply with all applicable federal or state income tax laws or regulations, the Companymay take such action as it deems appropriate to insure (i) notice to the Company of any disposition of the Common Stock of the Company within thetime periods described above and (ii) that, if necessary, all applicable federal or state payroll, withholding, income or other taxes are withheld orcollected from Employee.(g) In order to provide the Company with the opportunity to claim the benefit of any income tax deduction which may be available to it upon theexercise of the Option when the Option does not qualify as an incentive stock option within the meaning of Section 422 of the Code and in order tocomply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to insure that, ifnecessary, all applicable federal or state payroll, withholding, income or other taxes are withheld or collected from Employee. Employee may elect tosatisfy his federal and state income tax withholding obligations upon exercise of this option by (i) having the Company withhold a portion of theshares of Common Stock otherwise to be delivered upon exercise of such option having a Fair Market Value equal to the amount of federal and stateincome tax required to be withheld upon such exercise, in accordance with such rules as the Company may from time to time establish, or (ii)delivering to the Company shares of its Common Stock other than the shares issuable upon exercise of such option with a fair market value equal tosuch taxes, in accordance with such rules.C.H. ROBINSON WORLDWIDE, INC. OPTS 3.1December 2013C.H. ROBINSON 2013 PERFORMANCE SHARE PROGRAM FOR OFFICERSC.H. Robinson Worldwide, Inc. (the “Company”) is permitted under the terms of its 2013 Equity Incentive Plan (the “Plan”) to issue its shares and other derivativesecurities to employees at various times and in various forms. The Company’s Compensation Committee has approved a 2013 Performance Share Program forOfficers (the “Program”) pursuant to which performance share awards (the “Awards”) will be made to designated officers of the Company. Each such Award will besubject to the terms of a participant-specific award notice (a “Notice”), the general terms of the Program as contained in this Program Outline, and the terms of thePlan. Unless the context clearly indicates otherwise, any capitalized term used but not defined in this Program Outline will have the meaning set forth in the Plan asit currently exists or as it is amended in the future.Program Outline1.Each participant in the Program will be granted a number of performance shares as specified in the applicable Notice on the Grant Date specified in theNotice, and the performance shares will be credited to the participant’s account maintained by the Company. Each performance share that vests represents theright to receive one share of the Company’s common stock on the settlement date for the Award. Vesting of performance shares will be conditioned upon thesatisfaction of the performance and continued Service conditions described below.2.The Measurement Period for performance shall be January 1 through December 31 of each calendar/fiscal year during the years 2014 - 2018.Beginning on December 31, 2014, and on each December 31 thereafter through December 31, 2018, a portion of the Award will vest, but only if andonly to the extent that the Company’s Vesting Indicator (“VI”) is greater than zero for the respective year, as determined by the Compensation Committee,and the applicable Service conditions set forth below are satisfied. The VI is defined as the sum of 10 percentage points plus the percentage increase (ordecrease) in Company diluted net income per share for the applicable Measurement Period over the prior year rounded to two decimal places. Forpurposes of calculating the VI for any year during the Measurement Period, the growth for a year is the percentage the current year’s EPS exceeds thegreater of the previous year’s diluted net income per share or the diluted net income per share for 2013. That sum, in turn, is rounded to the nearest wholepercentage.Example Prior YearCurrent YearPercentage IncreaseDiluted net income per share$2.00$2.199.50%Add: 10 Percentage Points 19.50%Rounded to the Nearest Whole Percentage VI=20.00%3.In determining how many performance shares subject to an Award are vested with respect to each Measurement Period, the VI is multiplied by the total numberof performance shares subject to the Award, with the result then rounded to the nearest whole performance share.Example Grant of 1,000 Performance Shares Year 1 Year 2 Year 3 VI: 20% 12% 26% Rounded Number of Performance Shares Vested as of Dec. 31: 200 120 260 4.The Compensation Committee’s calculation of VI shall be final, and the Compensation Committee retains the discretion to eliminate unusual items, if any, forpurposes of calculating the VI for any particular Measurement Period (including adjustments to the computation of diluted net income per share). To the extentthat any Award is intended to be Performance-Based Compensation, the Compensation Committee’s exercise of this discretion shall be in accordance with therequirements of Section 162(m) of the Code.5.A participant’s performance shares may vest pursuant to paragraph 2 above with respect to this award for up to 5 years (and may vest in less than 5 years if theVI during such time period is sufficiently high enough). Any performance shares remaining unvested after the calculation of VI for the Measurement Periodending December 31, 2018 will be forfeited and deleted from participant’s account, and the participant will retain no rights with respect to the forfeitedperformance shares.SHR 19.1December 20136.Except as otherwise provided in this paragraph and in paragraphs 14 and 15, a participant’s performance shares will vest upon satisfaction of the performancecondition only while the participant remains a Service Provider. If, prior to any separation from Service, a participant has executed and continues to adhere to aManagement-Employee (“Key Employee”) Agreement in favor of the Company which contains a non-competition provision, then such participant’s Award shallnot be terminated and vesting shall continue (to the extent the performance condition has been satisfied) through the end of two (2) additional MeasurementPeriods following the participant’s separation from Service. In addition, if prior to any separation from Service, a participant has executed and continues toadhere to a Management-Employee (“Key Employee”) Agreement in favor of the Company which contains a non-competition provision, and if such participanthas a minimum of five (5) consecutive years of Service at the time of such separation, then such participant’s Award shall not be terminated and vesting shallcontinue (to the extent the performance condition has been satisfied) through the end of additional Measurement Periods following such separation fromService according to the following schedule:Sum of Age in Whole Years and Tenure in Whole Years Additional Years of Potential VestingAt least 50 and less than 60 3 yearsAt least 60 and less than 70 4 yearsAt least 70 or greater 5 yearsAge and Tenure are individually rounded up to the nearest whole number and Tenure is defined as the period of time between a participant’s date ofseparation from Service and the participant’s last date of hire (or in the case of an acquisition, the equivalent last date of hire with the acquired entity). Under noevent, however, will any entitlement to continued vesting under this paragraph cause the vesting period of any Award to exceed the five (5) year period specifiedin paragraph 5.7.Notwithstanding the foregoing, participants who embezzle or misappropriate Company funds or property, or who the Company has determined have failed tocomply with the terms and conditions of any of the following agreements which they may have executed in favor of the Company: (i) Confidentiality andNoncompetition Agreement, (ii) Management-Employee Agreement, (iii) Sales-Employee Agreement, (iv) Data Security Agreement, or (v) any otheragreement containing post-employment restrictions, will automatically forfeit all Awards, whether vested or unvested, and will retain no rights with respect tosuch performance shares.8.Unless a participant has elected a different time and form of settlement as provided in paragraph 17, and except as otherwise provided in paragraphs 14 and 15,shares of the Company’s common stock shall be delivered to a participant in settlement of vested performance shares in a single lump sum distribution of sharesupon the earlier of (i) two years after the participant’s separation from Service, or (ii) February 15, 2021. If a participant is entitled to continued vesting ofperformance shares following a separation from Service as provided in paragraph 6, shares of Company common stock shall be delivered in settlement of suchadditional vested performance shares at the time specified in clause (i) of the previous sentence to the extent that the shares relate to a Measurement Period thatended at least 75 days prior to the time specified in clause (i), and shall be delivered within 75 days of the end of any subsequent Measurement Period.9.Performance shares may not be sold, exchanged, assigned, transferred, discounted, pledged or otherwise disposed of at any time prior to delivery of thesettlement shares as described herein.10.A participant will be entitled to receive payments on the performance shares credited to the participant’s account, whether vested or unvested, when and ifdividends are declared by the Company’s Board of Directors on the Company’s common stock, in an amount of cash per performance share equal to the pershare dividend amount payable to common stockholders of the Company. Such payments will be payable on the next regularly occurring payroll date after thecorresponding dividend payment date. Such payments made before delivery of shares in settlement of performance shares will be paid through the Company’spayroll process and treated as compensation income for tax purposes and will be subject to income and payroll tax withholding by the Company.11.In order to comply with all applicable federal, state or local tax laws or regulations, at the time that shares are delivered to a participant in settlement ofperformance shares, the Company will withhold the minimum required statutory taxes based on the Fair Market Value of the shares at the time of delivery. Inorder to satisfy any such tax withholding obligation, the Company will withhold a portion of the shares otherwise to be delivered with a Fair Market Value equalto the amount of such taxes.12.A performance share Award shall confer no rights of continued Service to any participant, nor will it interfere in any way with the right of the Company toterminate such Service at any time. The Company retains all rights to enforce any other agreement or contract that the Company has with any participant.SHR 19.1December 2013 13.If there shall be any change in the Company’s common stock through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (ofwhatever amount), stock split or other change in the corporate structure of the Company, appropriate adjustments shall be made in the number of performanceshares that are vested or unvested under an Award as contemplated by Section 12(a) of the Plan.14.In the event of a Change in Control (as defined in the Plan after giving effect to the final sentence of Section 2(f) thereof), the vesting of outstandingperformance shares shall be accelerated and shares in settlement of such vested performance shares shall be delivered as soon as administratively practical, butin all events by the date that is 60 days after the date of the Change in Control.15.In the event a participant dies or is determined to be subject to a Disability while a Service Provider, vesting of outstanding performance shares shall beaccelerated and shares shall be delivered in settlement of such vested performance shares as soon as administratively practical, but in all events by the date thatis 60 days after the date of the death or Disability.16.The Awards are made pursuant to the Plan, a copy of which has been provided to each participant, and are subject to its terms. The terms of this ProgramOutline will be interpreted as to be consistent with the Plan, but if any provision in this Program Outline is inconsistent with the terms of the Plan, the terms ofthe Plan will prevail. By participating in the Company’s 2013 Performance Share Program for Officers, a participant shall be deemed to have accepted all theconditions of the Plan, the Notice, this Program Outline, and the terms and conditions of any rules adopted by the Compensation Committee pursuant to the Planand shall be fully bound thereby. The documents governing an Award shall be subject to the choice of law provisions of Section 18(e) of the Plan. To the extentan Award is subject to Code Section 409A, it shall be subject to and administered in accordance with Section 18(g) of the Plan, including subjecting any sharedelivery or amount payable to a “specified employee” as the result of a “separation from service” (as those terms are defined in Code Section 409A) to the six-month payment delay rule described there. If the six month payment delay rule is applicable, then any shares that would have otherwise have been deliveredduring that six-month period will be delivered upon completion of that six-month period, and any subsequent share deliveries shall be made as scheduled.Notwithstanding the foregoing, although the intent is to comply with Code Section 409A, a participant shall be responsible for all taxes and penalties that couldresult from a failure to comply (the Company and its employees shall not be responsible for such taxes and penalties).17.Using the election form that has been provided to each participant, and in accordance with the terms and conditions contained in that election form, a participantmay elect to receive delivery of shares of Company common stock in settlement of vested performance shares at such later time or times and in a lump sum orinstallments as may be specified in such election form.SHR 19.1December 2013 C.H. ROBINSON 2013 PERFORMANCE SHARE PROGRAM(U.S. Managers)C.H. Robinson Worldwide, Inc. (the “Company”) is permitted under the terms of its 2013 Equity Incentive Plan (the “Plan”) to issue its shares and other derivativesecurities to employees at various times and in various forms. The Company’s Compensation Committee has approved a 2013 Performance Share Program (the“Program”) pursuant to which performance share awards (the “Awards”) will be made to designated managerial employees of the Company and its Subsidiaries.Each such Award will be subject to the terms of a participant-specific award notice (a “Notice”), the general terms of the Program as contained in this ProgramOutline, and the terms of the Plan. Unless the context clearly indicates otherwise, any capitalized term used but not defined in this Program Outline will have themeaning set forth in the Plan as it currently exists or as it is amended in the future.Program Outline1.Each participant in the Program will be granted a number of performance shares as specified in the applicable Notice on the Grant Date specified in theNotice, and the performance shares will be credited to the participant’s account maintained by the Company. Each performance share that vests represents theright to receive one share of the Company’s common stock on the settlement date for the Award. Vesting of performance shares will be conditioned upon thesatisfaction of the performance and continued Service conditions described below.2.The Measurement Period for performance shall be January 1 through December 31 of each calendar/fiscal year during the years 2014 - 2018. Beginning onDecember 31, 2014, and on each December 31 thereafter through December 31, 2018, a portion of the Award will vest, but only if and only to the extent thatthe Company’s Vesting Indicator (“VI”) is greater than zero for the respective Measurement Period, as determined by the Compensation Committee, and theapplicable Service conditions set forth below are satisfied. The VI is defined as the sum of 10 percentage points plus the percentage increase (or decrease) inCompany diluted net income per share for the applicable Measurement Period over the prior year rounded to two decimal places. For purposes of calculatingthe VI for any year during the Measurement Period, the growth for a year is the percentage the current year’s EPS exceeds the greater of the previous year’sdiluted net income per share or the diluted net income per share for 2013. That sum, in turn, is rounded to the nearest whole percentage.Example Prior YearCurrent YearPercentage IncreaseDiluted net income per share$2.00$2.199.5%Add: 10 Percentage Points 19.50%Rounded to the Nearest Whole Percentage VI=20.00%3.In determining how many performance shares subject to an Award are vested with respect to each Measurement Period, the VI is multiplied by the total numberof performance shares subject to the Award, with the result then rounded to the nearest whole performance share.Example Grant of 1,000 Performance Shares Year 1 Year 2 Year 3 VI: 20% 12% 26% Rounded Number of Performance Shares Vested as of Dec. 31: 200 120 260 4.The Compensation Committee’s calculation of the VI shall be final, and the Compensation Committee retains the discretion to eliminate unusual items, if any,for purposes of calculating the VI for any particular Measurement Period (including adjustments to the computation of diluted net income per share).5.A participant’s performance shares may vest pursuant to paragraph 2 above with respect to this award for up to 5 years (and may vest in less than 5 years if theVI during such time period is sufficiently high enough). Any performance shares remaining unvested after the calculation of VI for the Measurement Periodending December 31, 2018 will be forfeited and deleted from participant’s account, and the participant will retain no rights with respect to the forfeitedperformance shares.6.Except as otherwise provided in this paragraph and in paragraphs 14 and 15, a participant’s performance shares will vest upon satisfaction of the performancecondition only while the participant remains a Service Provider. If, prior to any separation from Service, a participant has executed and continues to adhere to aManagement-Employee (“Key Employee”) Agreement in favor ofSHR 18.1December 2013 the Company which contains a non-competition provision, then such participant’s Award shall not be terminated and vesting shall continue (to the extent theperformance condition has been satisfied) through the end of two (2) additional Measurement Periods following the participant’s separation from Service. Inaddition, if prior to any separation from Service, a participant has executed and continues to adhere to a Management-Employee (“Key Employee”) Agreementin favor of the Company which contains a non-competition provision, and if such participant has a minimum of five (5) consecutive years of Service at thetime of such separation, then such participant’s Award shall not be terminated and vesting shall continue (to the extent the performance condition has beensatisfied) through the end of additional Measurement Periods following such separation from Service according to the following schedule:Sum of Age in Whole Years and Tenure in Whole Years Additional Years of Potential VestingAt least 50 and less than 60 3 yearsAt least 60 and less than 70 4 yearsAt least 70 or greater 5 yearsAge and Tenure are individually rounded up to the nearest whole number and Tenure is defined as the period of time between a participant’s date ofseparation from Service and the participant’s last date of hire (or in the case of an acquisition, the equivalent last date of hire with the acquired entity). Under noevent, however, will any entitlement to continued vesting under this paragraph cause the vesting period of any Award to exceed the five (5) year period specifiedin paragraph 5.7.Notwithstanding the foregoing, participants who embezzle or misappropriate Company funds or property, or who the Company has determined have failed tocomply with the terms and conditions of any of the following agreements which they may have executed in favor of the Company: (i) Confidentiality andNoncompetition Agreement, (ii) Management-Employee Agreement, (iii) Sales-Employee Agreement, (iv) Data Security Agreement, or (v) any otheragreement containing post-employment restrictions, will automatically forfeit all Awards, whether vested or unvested, and will retain no rights with respect tosuch performance shares. 8.Except as otherwise provided in paragraphs 14 and 15, shares of the Company’s common stock shall be delivered to a participant in settlement of vestedperformance shares in a single lump sum distribution of shares upon the earlier of (i) two years after the participant’s separation from Service, or (ii) February15, 2021.9.Performance shares may not be sold, exchanged, assigned, transferred, discounted, pledged or otherwise disposed of at any time prior to delivery of thesettlement shares as described herein.10.A participant will be entitled to receive payments on the performance shares credited to the participant’s account, whether vested or unvested, when and ifdividends are declared by the Company’s Board of Directors on the Company’s common stock, in an amount of cash per performance share equal to the pershare dividend amount payable to common stockholders of the Company. Such payments will be payable on the next regularly occurring payroll date after thecorresponding dividend payment date. Such payments made before delivery of shares in settlement of performance shares will be paid through the Company’spayroll process and treated as compensation income for tax purposes and will be subject to income and payroll tax withholding by the Company.11.In order to comply with all applicable federal, state or local tax laws or regulations, at the time that shares are delivered to a participant in settlement ofperformance shares, the Company will withhold the minimum required statutory taxes based on the Fair Market Value of the shares at the time of delivery. Inorder to satisfy any such tax withholding obligation, the Company will withhold a portion of the shares otherwise to be delivered with a Fair Market Value equalto the amount of such taxes.12.A performance share Award shall confer no rights of continued Service to any participant, nor will it interfere in any way with the right of the Company toterminate such Service at any time. The Company retains all rights to enforce any other agreement or contract that the Company has with any participant.13.If there shall be any change in the Company’s common stock through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (ofwhatever amount), stock split or other change in the corporate structure of the Company, appropriate adjustments shall be made in the number of performanceshares that are vested or unvested under an Award as contemplated by Section 12(a) of the Plan.14.In the event of a Change in Control (as defined in the Plan after giving effect to the final sentence of Section 2(f) thereof), the vesting of outstandingperformance shares shall be accelerated and shares in settlement of such vested performance shares shall be delivered as soon as administratively practical, butin all events by the date that is 60 days after the date of the Change in Control.SHR 18.1December 201315.In the event a participant dies or is determined to be subject to a Disability while a Service Provider, vesting of outstanding performance shares shall beaccelerated and shares shall be delivered in settlement of such vested performance shares as soon as administratively practical, but in all events by the date thatis 60 days after the date of the death or Disability.16.The Awards are made pursuant to the Plan, a copy of which has been provided to each participant, and are subject to its terms. The terms of this ProgramOutline will be interpreted as to be consistent with the Plan, but if any provision in this Program Outline is inconsistent with the terms of the Plan, the terms ofthe Plan will prevail. By participating in the Company’s 2013 Performance Share Program, a participant shall be deemed to have accepted all the conditions ofthe Plan, the Notice, this Program Outline, and the terms and conditions of any rules adopted by the Compensation Committee pursuant to the Plan and shall befully bound thereby. The documents governing an Award shall be subject to the choice of law provisions of Section 18(e) of the Plan. To the extent an Award issubject to Code Section 409A, it shall be subject to and administered in accordance with Section 18(g) of the Plan, including subjecting any share delivery oramount payable to a “specified employee” as the result of a “separation from service” (as those terms are defined in Code Section 409A) to the six-monthpayment delay rule described there. If the six month payment delay rule is applicable, then any shares that would have otherwise have been delivered duringthat six-month period will be delivered upon completion of that six-month period, and any subsequent share deliveries shall be made as scheduled.Notwithstanding the foregoing, although the intent is to comply with Code Section 409A, a participant shall be responsible for all taxes and penalties that couldresult from a failure to comply (the Company and its employees shall not be responsible for such taxes and penalties).SHR 18.1December 2013C.H. ROBINSON 2013 RESTRICTED STOCK UNIT PROGRAM(U.S. EMPLOYEES)C.H. Robinson Worldwide, Inc. (the “Company”) is permitted under the terms of its 2013 Equity Incentive Plan (the “Plan”) to issue its shares and other derivativesecurities to employees at various times and in various forms. The Company’s Compensation Committee has approved a 2013 Restricted Stock Unit Program (the“Program”) pursuant to which restricted stock unit awards (the “Awards”) will be made to designated employees of the Company and its U.S. Subsidiaries. Each suchAward will be subject to the terms of a participant-specific award notice (a “Notice”), the general terms of the Program as contained in this Program Outline, and theterms of the Plan. Unless the context clearly indicates otherwise, any capitalized term used but not defined in this Program Outline will have the meaning set forth inthe Plan as it currently exists or as it is amended in the future.Program Outline1.Each participant in the Program will be granted a number of restricted stock units (the “Units”) as specified in the applicable Notice on the Grant Date specifiedin the Notice, and the Units will be credited to the participant’s account maintained on the books and records of the Company until the Units are settled in sharesof the Company’s common stock as provided below. Each Unit that vests represents the right to receive one share of the Company’s common stock on thesettlement date for the Award. Vesting of Units will be conditioned upon the satisfaction of the continued Service conditions described below.2.Except as otherwise provided in paragraphs 11 and 12, Units granted to a participant will vest in equal annual installments over a five (5) year period contingenton the participant’s continued Service. Beginning on December 31, 2014, and on each December 31 thereafter through December 31, 2018, an equal portion(20%) of the Units will vest and become a right to receive an equal number of shares of the Company’s common stock.3.A participant’s Units vest only while the participant remains a Service Provider. A participant must be a Service Provider on December 31 of a particular yearin order to vest in any Units for that year. If a participant is separated from Service, whether voluntarily or involuntarily, prior to vesting of any Units, the Unitsremaining unvested as of the date of separation will be forfeited, and the participant will retain no rights with respect to the forfeited Units.4.Notwithstanding the foregoing, participants who embezzle or misappropriate Company funds or property, or who the Company has determined have failed tocomply with the terms and conditions of any of the following agreements which they may have executed in favor of the Company: (i) Confidentiality andNoncompetition Agreement, (ii) Management-Employee Agreement, (iii) Sales-Employee Agreement, (iv) Data Security Agreement, or (v) any otheragreement containing post-employment restrictions, will automatically forfeit all Awards, whether vested or unvested, and will retain no rights with respect tosuch Units.5.Except as otherwise provided in paragraphs 11 and 12, shares of the Company’s common stock shall be delivered to a participant in settlement of vested Units ina single lump sum distribution of shares upon the earlier of (i) two years after the participant’s separation from Service, or (ii) February 15, 2021.6.Units may not be sold, exchanged, assigned, transferred, discounted, pledged or otherwise disposed of at any time prior to delivery of the settlement shares asdescribed herein.7.A participant will be entitled to receive payments on the Units credited to the participant’s account, whether vested or unvested, when and if dividends aredeclared by the Company’s Board of Directors on the Company’s common stock, in an amount of cash per Unit equal to the per share dividend amount payableto common stockholders of the Company. Such payments will be payable on the next regularly occurring payroll date after the corresponding dividend paymentdate. Such payments made before delivery of shares in settlement of Units will be paid through the Company’s payroll process and treated as compensationincome for tax purposes and will be subject to income and payroll tax withholding by the Company.8.In order to comply with all applicable federal, state or local tax laws or regulations, at the time that shares are delivered to a participant in settlement ofperformance shares, the Company will withhold the minimum required statutory taxes based on the Fair Market Value (as defined in the Plan) of the shares atthe time of delivery. In order to satisfy any such tax withholding obligation, the Company will withhold a portion of the shares otherwise to be delivered with aFair Market Value equal to the amount of such taxes.9.A restricted stock unit Award shall confer no rights of continued Service to any participant, nor will it interfere in any way with the right of the Company toterminate such Service at any time. The Company retains all rights to enforce any other agreement or contract that the Company has with any participant.10.If there shall be any change in the Company’s common stock through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (ofwhatever amount), stock split or other change in the corporate structure of the Company, appropriate adjustments shall be made in the number of Units that arevested or unvested under an Award as contemplated by Section 12(a) of the Plan.11.In the event of a Change in Control (as defined in the Plan after giving effect to the final sentence of Section 2(f) thereof), the Compensation Committee may,in its discretion, accelerate the vesting of all outstanding Units, and shares in settlement of any such vested Units shall be delivered as soon as administrativelypractical, but in all events by the date that is 60 days after the date of the Change in Control.12.In the event a participant dies or is determined to be subject to a Disability while a Service Provider, vesting of outstanding Units shall be accelerated and sharesshall be delivered in settlement of such vested Units as soon as administratively practical, but in all events by the date that is 60 days after the date of the death orDisability.13.The Awards are made pursuant to the Plan, a copy of which has been provided to each participant, and are subject to its terms. The terms of this ProgramOutline will be interpreted as to be consistent with the Plan, but if any provision in this Program Outline is inconsistent with the terms of the Plan, the terms ofthe Plan will prevail. By participating in the Company’s 2013 Restricted Stock Unit Program, a participant shall be deemed to have accepted all the conditions ofthe Plan, the Notice, this Program Outline, and the terms and conditions of any rules adopted by the Compensation Committee pursuant to the Plan and shall befully bound thereby. The documents governing an Award shall be subject to the choice of law provisions of Section 18(e) of the Plan. To the extent an Award issubject to Code Section 409A, it shall be subject to and administered in accordance with Section 18(g) of the Plan, including subjecting any share delivery oramount payable to a “specified employee” as the result of a “separation from service” (as those terms are defined in Code Section 409A) to the six-monthpayment delay rule described there. If the six month payment delay rule is applicable, then any shares that would have otherwise have been delivered duringthat six-month period will be delivered upon completion of that six-month period, and any subsequent share deliveries shall be made as scheduled.Notwithstanding the foregoing, although the intent is to comply with Code Section 409A, a participant shall be responsible for all taxes and penalties that couldresult from a failure to comply (the Company and its employees shall not be responsible for such taxes and penalties).RSU 21.2December 2013 C. H. ROBINSON WORLDWIDE, INC.and Subsidiaries and AffiliatesMANAGEMENT-EMPLOYEE AGREEMENT(Key Employee)This Management-Employee Agreement, dated as of (“Agreement”), is made and entered into between C. H. Robinson Worldwide,Inc., a Delaware corporation, and its subsidiaries and affiliated companies (collectively referred to as “CHRW”) and (“KeyEmployee”).WHEREAS, in return for the benefits provided by this Agreement, Key Employee will be employed by C.H. Robinson Worldwide, Inc. and/orone of its subsidiaries or affiliated companies, such company or companies employing Key Employee being referred to herein as Employer.WHEREAS, CHRW and Key Employee agree that the position in which Key Employee will work is of critical importance to the operation ofEmployer’s and/or CHRW’s business.WHEREAS, Key Employee acknowledges and agrees that Key Employee’s position will require Key Employee to exercise significantresponsibility and maintain the utmost trust and fiduciary duty to Employer and/or CHRW;WHEREAS Key Employee and CHRW agree that Employer and/or CHRW will give Key Employee access to CHRW’s highly sensitive,confidential, and proprietary information and provide Key Employee opportunities to represent Employer and/or CHRW in importantrelationships with customers and other business partners; andWHEREAS, as a condition of employment or continued employment, Key Employee agrees to be bound by and act in accordance with thisAgreement.NOW, THEREFORE, in consideration of the mutual obligations incurred and benefits obtained hereunder and other good and valuableconsideration (including, without limitation, access to CHRW’s confidential information, customers, and other business partners,opportunities for learning and experience, opportunities for increased compensation and other benefits, restricted stock opportunities, bonusopportunities, and opportunities for advancement) which would not be available to Key Employee except in return for entering into thisAgreement and the sufficiency of such valuable consideration Key Employee hereby acknowledges, CHRW and Key Employee agree asfollows:1. Employment. Employer hereby employs Key Employee, and Key Employee accepts such employment and agrees to perform servicesfor Employer, upon the terms and conditions set forth in this Agreement.2. Term. Employer and Key Employee mutually agree that this Agreement shall become effective when executed by Key Employee andshall remain in full force and effect until terminated in accordance with Section 6. Upon termination, Key Employee shall remain obligated tocomply with all of the post-employment obligations contained in the Agreement, including, but not limited to, the restrictions and limitationscontained in Sections 7, 8, and 9 of this Agreement.3. Performance of Duties. Key Employee agrees to serve Employer faithfully and to the best of Key Employee’s ability and to devote KeyEmployee’s full time, attention and efforts to the business and affairs of Employer during the term of Key Employee’s employment. KeyEmployee hereby confirms that Key Employee has no obligations or commitments, whether by contract or otherwise, inconsistent with KeyEmployee’s obligations set forth in this Agreement. During the term of this Agreement, Key Employee shall not render or perform anyservices (whether or not Key Employee receives any compensation) for any other corporation, firm, entity, or person that are inconsistentwith the provisions of this Agreement or that would1otherwise impair Key Employee’s ability to perform Key Employee’s duties to CHRW, including, without limitation, the duties set forthunder this Agreement. Key Employee shall not use or disclose any data, information, opportunities, or documents which Key Employee hasa duty not to use or disclose, including, without limitation, confidential information belonging to any prior employer or any other person orentity.4. Compensation.4.01 Base Salary. As compensation for all services to be rendered by Key Employee under this Agreement, Employer shall pay to KeyEmployee an annualized salary which shall be set on an annual basis in accordance with Employer’s standard practices and procedures. KeyEmployee’s salary shall be paid in accordance with Employer’s normal payroll procedures and policies, as such procedures and policies maybe modified from time to time.4.02 Annual Bonus. Key Employee may also be eligible to receive an annualized bonus in an amount to be determined in the solediscretion of Employer’s management or the Compensation Committee of the Board of Directors of CHRW, if applicable.4.03 Participation in Benefits. During the term of Key Employee’s employment by Employer, Key Employee shall be entitled to participatein the employee benefit plans offered generally by Employer to its employees, to the extent that Key Employee’s position, tenure, salary,health, and other qualifications make Key Employee eligible to participate. Key Employee’s participation in such benefit plans shall be subjectto the terms of the applicable plans, as the same may be amended from time to time. Employer does not guarantee the adoption orcontinuance of any particular employee benefit plan during Key Employee’s employment, and nothing in this Agreement is intended to, orshall in any way restrict the right of Employer, to amend, modify or terminate any of its benefit plans during the term of Key Employee’semployment.4.04 Equity Grants. Key Employee shall be eligible to participate in the 1997 Omnibus Stock Plan and any successor plans adopted byC.H. Robinson Worldwide, Inc. Grants made under such 1997 Omnibus Stock Plan and any successor plans are made in the solediscretion of Employer. The nature and amount of any equity grants made by Employer to Key Employee shall be determined in the solediscretion of Employer’s management or the Compensation Committee of the Board of Directors of C.H. Robinson Worldwide, Inc., ifapplicable. The terms and conditions of Key Employee’s entitlement to any equity compensation shall be determined by the terms of theequity grant.4.05 Expenses. In accordance with Employer’s normal policies for expense reimbursement, Employer will reimburse Key Employee for allreasonable and necessary expenses incurred by Key Employee in the performance of Key Employee’s duties under this Agreement, subjectto the presentment of receipts or other documentation acceptable to Employer.5. Other Employment Policies. As a condition precedent to Employer’s hiring or continued employment of Key Employee and Employer’sperformance of its obligations hereunder, Key Employee shall comply with all of applicable state and federal laws and regulations, and all thepolicies, rules, or codes of conduct generally in effect for employees of Employer during the Term.6. Termination.6.01 Termination Due to Key Employee’s Death or Total Disability. This Agreement shall terminate automatically in the event of KeyEmployee’s death, or in the event of Key Employee’s failure or inability to perform the essential functions of Key Employee’s position,subject to any legal obligations to provide reasonable accommodation, provided Key Employee has exhausted Key Employee’s entitlement toany applicable leave or short term disability, if Key Employee desires to take and satisfies all eligibility requirements for such leave.6.02 Termination by Employer for Cause. Key Employee’s employment pursuant to this Agreement shall terminate immediately in theevent Employer shall determine, in its sole discretion, that there is “cause” to terminate Key Employee’s employment, included but notlimited to any of the following:2(i) Key Employee’s material breach of any contractual obligation to Employer under the terms of this Agreement or any other agreementbetween Key Employee and Employer, or of any fiduciary duty to Employer;(ii) Key Employee’s indictment, charge, or conviction for any crime involving moral turpitude or any felony;(iii) Key Employee’s failure to carry out any reasonable directive of Employer;(iv) Key Employee’s embezzlement or misappropriation of funds or other assets of Employer;(v) Any failure by Key Employee to comply with any policy, rule or code of conduct generally applicable to Employer’s employees or toEmployer’s management employees such as Key Employee; or(vi) A demonstrated lack of commitment of Key Employee to Employer, or conduct by Key Employee which is detrimental to Employer, orKey Employee’s failure to perform the assigned duties of his position at a level of individual performance adequate to Employer; providedthat, in the case of any conduct that is reasonably susceptible of cure, Key Employee shall have thirty (30) days to cure any such lack ofcommitment or failure after Employer provides Key Employee written notice of the actions or omissions constituting the lack of commitment,detrimental conduct or failure.6.03 Termination by Employer without Cause. Employer may immediately terminate Key Employee’s employment at any time and forany reason.6.04 Termination by Key Employee. Key Employee may terminate this Agreement at any time by giving fifteen (15) days written noticethereof to Employer. Upon notice of termination by Key Employee, Employer may at its option elect to have Key Employee cease to provideservices immediately, provided that during such 15-day notice period, Key Employee shall be entitled to earn and be paid his base salary.6.05 Effect of and Compensation Upon Termination.A. If this Agreement is terminated in accordance with Section 6.01, 6.02, or 6.04, Key Employee shall not be entitled to receive anyadditional compensation under this Agreement after the effective date of such termination.B. If this Agreement is terminated in accordance with Section 6.03, Key Employee will be entitled to receive his base salary for fifteen (15)days, provided that Key Employee has complied with all his obligations to CHRW, including but not limited to, Key Employee’s obligationsunder this Agreement and further provided that Key Employee signs and does not rescind a separation agreement and release in a formacceptable to Employer.C. Notwithstanding any other provision in this Agreement, should Key Employee’s employment be terminated for any reason, KeyEmployee shall not earn and will have no right to receive any compensation except as expressly provided in this Agreement or in the termsand conditions of a compensation plan or program expressly referenced herein.D. Notwithstanding any termination of Key Employee’s employment with Employer, Key Employee, in consideration of Key Employee’semployment hereunder to the date of such termination, shall remain bound by the provisions of this Agreement which specifically relate toperiods, activities or obligations upon or subsequent to the termination of Key Employee’s employment, including, but not limited to, thecovenants contained in Sections 7, 8, and 9 hereof.6.06 Surrender of Records and Property. Upon termination of Key Employee’s employment with Employer for any reason, or wheneverrequested by Employer or CHRW, Key Employee shall deliver promptly to Employer all records, manuals, books, blank forms, documents,letters, memoranda, notes, notebooks, reports, computer disks, computer software, computer programs (including source code, object code,on-line files, documentation, testing materials and plans and reports) designs, drawings, formulae, data, tables3or calculations or copies, summaries or abstracts thereof, which are the property of Employer or CHRW or which relate in any way to thebusiness, products, practices or techniques of Employer or CHRW, and all other property, trade secrets and confidential information ofEmployer or CHRW, including, but not limited to, all tangible, written, graphical, machine readable and other materials (including all copies,summaries, and abstracts) which in whole or in part contain any trade secrets or confidential information of Employer or CHRW which inany of these cases are in Key Employee's possession or under Key Employee’s control.7. Restrictive Covenants.7.01 Noncompetition. In consideration of Key Employee’s employment or continued employment with Employer, and the significantbenefits, financial and otherwise, which Key Employee will receive in return for signing this Agreement, including, but not limited to, thebenefits under the 1997 Omnibus Stock Plan, and any successor plans, Key Employee agrees that, during the “Restricted Period” (ashereinafter defined), Key Employee shall not, except as otherwise agreed in writing, directly or indirectly, engage in any “CompetingBusiness Activity” (as hereinafter defined), in any manner or capacity, including but not limited to as an advisor, principal, agent, consultant,partner, officer, director, shareholder, employee, or member of any association.(i) Geographical Extent of Covenant. Except as otherwise agreed in writing signed by Key Employee and an officer of Employer, theobligations of Key Employee under this Section 7 shall apply anywhere within the United States or any other country in which KeyEmployee has worked for Employer within the last twelve (12) months of employment with Employer.(ii) Limitation on Covenant as It Relates to Passive Stock Ownership. Ownership by Key Employee, as a passive investment, of less thanfive (5) percent of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in theover-the-counter market shall not constitute a breach of this Section 7.01.(iii) Competing Business Activity. As used in this Agreement, “Competing Business Activity” shall mean any business activities that arecompetitive with the business conducted by CHRW at or prior to the date of the termination of Key Employee’s employment, or anyprospective business activity or relationship of CHRW of which Key Employee was aware prior to termination, including, but not limited to:(a) freight contracting, freight brokerage, contract logistics, freight forwarding or backhauling, or custom house brokerage business; or(b) contracting, arranging, providing, procuring, furnishing or soliciting of distributors, freight contracting, freight brokerage, contractlogistics, freight forwarding or backhauling, custom house brokerage or transportation services; or(c) any activities that involve offering or providing products or services that are the same or similar to products or services offered by CHRWor which could be used in place of products or services offered by CHRW; or(d) any activity conducted by a business engaged in the transportation or logistics industries as a shipper, receiver or carrier; or(e) the provision of payment, financing, and information services to entities engaged in the transportation industry, or(f) the purchase, sale and/or sourcing of fresh fruits and vegetables.7.02 Nonsolicitation, Non-hire and Noninterference. During the Restricted Period, Key Employee shall not (a) induce or attempt to induceany employee or agent of CHRW to leave the employ or service of CHRW, or in any way interfere adversely with the relationship betweenany such employee or agent and CHRW; (b) induce or attempt to induce any employee or agent of CHRW to work for, render services to,provide advice to, or supply confidential business information or trade secrets of CHRW to any person or entity engaged in4a Competing Business Activity; (c) recruit, employ, or otherwise engage the services any employee or agent of CHRW in any businessactivity with which Key Employee may be associated, connected or affiliated; or (d) induce or attempt to induce any customer, supplier,consultant, vendor, licensee, licensor or other person or entity with whom CHRW has done business or sought to do business within thelast two (2) years to cease, limit, or reduce business with CHRW, or in any way interfere with the existing or prospective businessrelationship between any such person or entity and CHRW.7.03 Indirect Competition or Solicitation. Key Employee agrees that, during the Restricted Period, Key Employee shall not, directly orindirectly, assist, solicit or encourage any other person in carrying out, directly or indirectly, any activity that would be prohibited by theprovisions of this Section 7 if such activity were carried out by Key Employee, either directly or indirectly; and, in particular, Key Employeeagrees that Key Employee will not, directly or indirectly, induce any employee of Employer to carry out, directly or indirectly, any such activity.7.04 Notification of Employment. If at any time during the Restricted Period Key Employee accepts new employment or becomes affiliatedwith a third party, Key Employee shall immediately notify Employer of the identity and business of the new Employer or affiliation. Withoutlimiting the foregoing, Key Employee’s obligation to give notice under this Section 7.04 shall apply to any business ventures in which KeyEmployee proposes to engage, even if not with a third-party employer (such as, without limitation, a joint venture, partnership or soleproprietorship). Key Employee hereby consents to Employer notifying any such new employer or business venture of this Agreement or anyportion of it. .7.05 Restricted Period. As used in this Section 7, “Restricted Period” shall mean the period between the Effective Date and two (2) yearsafter the termination of Key Employee’s employment with Employer for any reason (whether such termination is occasioned by KeyEmployee or Employer).7.06 Set-Off Right. In the event Key Employee breaches any of the covenants set forth in this Section 7 or in Section 8 or 9, KeyEmployee acknowledges and agrees that Employer may set-off any loss, cost, damage, liability or expense (including, without limitation,lost profits and reasonable attorneys’ fees and expenses) against amounts otherwise payable under this Agreement or any other amount thatCHRW may owe to Key Employee. Neither the exercise of nor failure to exercise such right of set-off or to give notice of a claim therefor willconstitute an election of remedies or limit Employer in any manner in the enforcement of any other remedies available to it.7.07 Opportunity to Request Modification. In the event that Key Employee has an employment or other opportunity that may conflict withthe provisions of this Section 7, Key Employee is encouraged to bring that situation to the attention of the Vice President of HumanResources or General Counsel for C.H. Robinson Worldwide, Inc. Depending upon the circumstances, it may be possible to agree to anamendment of the restrictions contained in this Agreement, so long as CHRW’s interests can still be protected and preserved.8. Confidential Information. In consideration of Key Employee’s employment or continued employment with Employer, and the significantbenefits, financial and otherwise, which Key Employee will receive in return for signing this Agreement, including, but not limited to, thebenefits under the 1997 Omnibus Stock Plan, and any successor plans, and because Key Employee’s duties as a high-level managementemployee will necessitate his having access to and being entrusted with confidential and proprietary information relating to CHRW’sbusiness, customers, and persons or entities with whom CHRW does business, Key Employee shall not at any time, whether during orafter employment with Employer, disclose to a third party or use for any purpose other than to benefit CHRW, any Confidential Information ofCHRW. “Confidential Information” means all information written (or generated/stored on magnetic, digital, photographic or other media) ororal, relating to any aspect of CHRW’s existing or reasonably foreseeable business which is disclosed to Key Employee, to which KeyEmployee was given access, or which was conceived, discovered or developed by Key Employee (alone or jointly with others), and which isnot generally known or which is proprietary to CHRW. Confidential Information includes, without limitation: Employer’s strategic and otherbusiness plans; designs; information relating to employees, consultants, vendors, customers, carriers, suppliers, and/or any other person orentity with whom CHRW does business; customer and/or carrier lists, marketing information, aids, or materials; accounting information;merchandising information; rate and/or pricing information;5information-gathering techniques and methods; all accumulated data, listings, or similar recorded matter used or useful in food sales(including the purchase, sale, and sourcing of fresh fruits and vegetables), freight brokerage and contracting, contracting logistics, freightforwarding and backhauling (all modes), customs house brokerage operations, all aspects of the logistics or transportation industries,including but not limited to, business forms, weekly loading lists, service contracts, all contract terms (including all pricing and costinformation), and tariff information, and computer programs, software, and/or code.Key Employee agrees that all the following Information shall be presumed to be Confidential Information and, unless otherwise directed orauthorized by an officer of CHRW, Key Employee agrees to treat all the following information as Confidential: (a) all information contained onany computer or computer system of Employer and/or CHRW; and (b) all information which has been disclosed to Key Employee or to whichKey Employee has access during the period of employment with Employer which Employer and CHRW do not intentionally disclose to thegeneral public. If Key Employee has any uncertainty or question about whether any information is or should be treated as ConfidentialInformation, Key Employee agrees to inquire with the Vice President of Human Resources or the General Counsel of C.H. RobinsonWorldwide, Inc. before taking any action with respect to such information which would involvement treatment of such information in any wayinconsistent with its status as Confidential Information. In addition, Key Employee shall comply with the terms of any ConfidentialityAgreement by which Employer or CHRW is bound to a third party. Key Employee’s disclosure to attorneys, accountants and other advisorsat the Employer’s or CHRW’s request, or in the performance of Key Employee’s duties, shall not be treated as a violation of this Agreement.9. Inventions.9.01 Key Employee shall communicate to Employer as promptly and fully as practicable all Inventions (as defined below) which are (orwere) conceived or reduced to practice by Key Employee (alone or jointly with others) (1) during Key Employee’s employment with Employer,or (2) within one (1) year following the termination of Key Employee’s employment with Employer for any reason (and whether occasionedby Key Employee or Employer). Key Employee hereby assigns to Employer and/or its nominees, all of Key Employee’s right, title, andinterest in such Inventions, and all of Key Employee’s right, title, and interest in any patents, copyrights, patent applications or copyrightapplications based thereon. Key Employee shall assist Employer and/or its nominees (without charge but at no expense to Key Employee) atany time and in every proper way to obtain for Employer and/or its nominees the benefits, patents and copyrights for all such Inventionsanywhere in the world and to enforce its and/or their rights in legal proceedings. To the extent any materials prepared by Key Employee(alone or jointly with others) during Key Employee’s employment with Employer include material subject to copyright protection (or otherintellectual property protection), it is understood and agreed that such materials have been specially commissioned by Employer and theyshall be deemed "work for hire" as such term is defined under U.S. copyright law. Key Employee acknowledges and agrees that alldocuments, digitally, magnetically or optically encoded media, and other tangible materials created by Key Employee (alone or jointly withothers) during Key Employee’s employment with Employer shall be owned by CHRW. Key Employee irrevocably acknowledges CHRW'ssole ownership in all right, title, and interest to all work created by Key Employee during Key Employee’s employment with Employer andfurther agrees to engage in no conduct and take no position inconsistent with such sole ownership by CHRW.9.02 As used in this Section, the term “Invention” includes, but is not limited to, all inventions, discoveries, improvements, processes,developments, designs, know-how, data, computer programs and formulae, whether patentable or unpatentable or protectable by copyright,trademark, or other intellectual property law.9.03 Any provision in this Section requiring Key Employee to assign Key Employee’s rights in any Invention does not apply to an Inventionwhich qualifies for exclusion under the provisions of Minnesota Statute Section 181.78. That section provides that the requirement to assign“shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and whichwas developed entirely on the employee’s own time, and (1) which does not relate (a) directly to the business of the employer or (b) to theemployer’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by theemployee for the employer.” Key Employee understands and agrees that Key Employee bears the burden of proving that an Inventionqualifies for exclusion under Minnesota Statute Section 181.78.69.04 Notwithstanding any of the foregoing, Key Employee also assigns to Employer (or to any of its nominees) all rights which KeyEmployee may have or acquire in any Invention, full title to which is required to be in the United States by a contract between Employer andthe United States or any of its agencies.9.05 Key Employee hereby irrevocably designates and appoints Employer and each of its duly authorized officers and agents as KeyEmployee’s agent and attorney-in-fact to act for and in Key Employee’s behalf and stead to execute and file any document and to do all otherlawfully permitted acts to further the prosecution, issuance, and enforcement of patents, copyrights and other proprietary rights with the sameforce and effect as if executed and delivered by Key Employee.10 Disputes.10.01 Except as provided below, all Claims the Employer might bring against Key Employee and all Claims Key Employee might bringagainst CHRW and/or any officers, directors, employees, or agents of CHRW shall be deemed waived unless submitted to mediation, andthereafter, if mediation is unsuccessful, to final and binding arbitration in accordance with the Employment Arbitration Rules and MediationProcedures of the American Arbitration Association, modified as follows: (1) the arbitration need not actually be administered by the AmericanArbitration Association; (2) the parties shall share equally in the fees and costs for the arbitrator and the arbitration process, except that thearbitrator may award such fees and costs to the prevailing party as part of a final decision; (3) any mediation or arbitration shall be governedby the Company’s Employment Dispute Mediation/Arbitration Procedure, which is available on the Company Intranet; (4) dispositivemotions shall be permissible and not disfavored in any arbitration, and the standard for deciding such motions shall be the same as underRule 56 of the Federal Rules of Civil Procedure; (5) except on a substantial showing of good cause, discovery will be limited to the exchangeof relevant documents and three depositions per side; and (6) except as mutually agreed at the time between Key Employee and CHRW,neither Key Employee nor CHRW may bring any Claim combined with or on behalf of any other person or entity, whether on a collective,representative, or class action basis or any other basis. In the case of any conflict between the rules and procedures for either mediation orarbitration, the priority and order of precedence shall be as follows: (1) the rules and procedures stated herein; (2) the Company’sEmployment Dispute Mediation/Arbitration Procedure; (3) the Employment Arbitration Rules and Mediation Procedures of the AmericanArbitration Association.10.02 For purposes of this Agreement, “Claims” shall include, but not limited to, all claims directly or indirectly related to Key Employee’srecruitment, employment, compensation or benefits (except that for any claims under an employee benefit or pension plan that specifies aclaim procedure, such claim procedure must first be exhausted before a claim, if any, may be pursued under this Agreement) or terminationof Key Employee’s employment with Employer, including, but not limited to, alleged violations of Title VII of the Civil Rights Act of 1964,sections 1981 through 1988 of Title 42 of the United States Code and all amendments thereto, the Employee Retirement Income SecurityAct of 1974 (“ERISA”), the Americans with Disabilities Act of 1990 (“ADA”), the Age Discrimination in Employment Act of 1967 (“ADEA”),the Older Workers Benefits Protection Act of 1990 (“OWBPA”), the Fair Labor Standards Act (“FLSA”), the Occupational Safety and HealthAct (“OSHA”), the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and any and all claims under federal, state, andlocal laws or regulations (including all such laws and regulations pertaining to employment or prohibiting discrimination). This DisputeResolution Agreement shall not apply to any of the following: (1) Worker's Compensation claims; (2) claims related to unemploymentinsurance; (3) any claims by CHRW to enforce Sections 6.06, 7, 8, or 9 of this Agreement; (4) any claims by CHRW that include a requestfor injunctive or equitable relief, including, without limitation, claims related to its enforcement of any restrictive covenants, non-competitionobligations, non-solicitation obligations and/or confidential information provisions contained in any CHRW policy and/or employmentagreement(s) entered into between Key Employee and Employer or CHRW; and/or (5) any claims to protect the CHRW’s trade secrets,confidential or proprietary information, trademarks, copyrights, patents, or other intellectual property.10.03 This dispute resolution provision shall continue in full force and effect during Key Employee’s entire employment with Employer andafter such employment has terminated, regardless of the reason for such termination and whether termination was voluntary or involuntary.This dispute resolution provision shall be binding upon the heirs, successors, and assigns of Key Employee and CHRW, and any person orentity7asserting Claims or seeking relief of any kind on behalf of Key Employee or CHRW shall be bound by this Agreement to the fullest extentpermitted by law.10.04 If any portion of this dispute resolution provision is determined to be void or unenforceable, then the remaining portions of thisAgreement shall continue in full force and effect, and this Agreement may be modified to the extent necessary, consistent with itsfundamental purpose and intent, in order to make it enforceable.11. Miscellaneous.11.01 Governing Law and Venue Selection. This Agreement is made under and shall be governed by and construed in accordance with thelaws of the State of Minnesota without regard to conflicts of law principles thereof. The parties agree that any claim or dispute between themshall be adjudicated or arbitrated exclusively in the State of Minnesota, Hennepin County District Court, or the United States District Courtfor the District of Minnesota. Key Employee and Employer hereby consent to the personal jurisdiction of these courts and waive any objectionthat such venue is inconvenient or improper.11.02 Prior Agreements. This Agreement (including other agreements specifically mentioned in this Agreement) contains the entireagreement of the parties relating to the employment of Key Employee by Employer and the other matters discussed herein and supersedesall prior promises, contracts, agreements and understandings of any kind, whether express or implied, oral or written, with respect to suchsubject matter (including, but not limited to, any promise, contract or understanding, whether express or implied, oral or written, by andbetween Employer and Key Employee) and the parties hereto have made no agreements, representations or warranties relating to thesubject matter of this Agreement which are not set forth herein or in the other agreements mentioned herein.11.03 Withholding Taxes. Employer may take such action as it deems appropriate to insure that all applicable federal, state, city and otherpayroll, withholding, income or other taxes arising from any compensation, benefits or any other payments made pursuant to thisAgreement or any other contract, agreement or understanding which relates, in whole or in part, to Key Employee’s employment withEmployer are withheld or collected from Key Employee.11.04 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing.11.05 No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforceany provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel issought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term orcondition waived, and shall not constitute a waiver of such term or condition for the future or as to any act other than as specifically set forth inthe waiver.11.06 Assignment. Key Employee may not assign any right, interest, or obligation under this Agreement, in whole or in part, without thewritten consent of Employer. Employer will be free to assign its rights, interests, and obligations under this Agreement without the consent ofKey Employee. After any such assignment by Employer, Employer shall be discharged from all further liability hereunder and such assigneeshall thereafter be deemed to be Employer for the purposes of all provisions of this Agreement including this Section 11.06.11.07 Injunctive Relief. Key Employee acknowledges and agrees that the services to be rendered by Key Employee hereunder are of aspecial, unique and extraordinary character, that it would be difficult to replace such services and that any violation of Sections 6.06, 7, 8, or 9hereof would be highly injurious to Employer and/or CHRW, and that it would be extremely difficult to compensate Employer and/or CHRWfully for damages for any such violation. Accordingly, Key Employee specifically agrees that Employer or CHRW, as the case may be, shallbe entitled to temporary and permanent injunctive relief to enforce the provisions of Sections 6.06, 7, 8, or 9 hereof, and that such relief maybe granted without the necessity of proving actual damages. Key Employee further agrees that a reasonable and proper bond for any suchinjunctive relief would be five hundred dollars ($500.00). CHRW and/or Employer shall be entitled to recover attorneys’ fees8and costs incurred in enforcing Section 6.06, 7, 8, or 9 of this Agreement. This provision with respect to injunctive relief shall not, however,diminish the right of Employer or CHRW to claim and recover damages, or to seek and obtain any other relief available to it at law or inequity, in addition to injunctive relief.11.08 Severability. To the extent any provision of this Agreement shall be determined to be invalid or unenforceable in any jurisdiction, suchprovision shall be either equitably modified or deemed to be deleted from this Agreement as to that jurisdiction only, and the validity andenforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of theforegoing, Key Employee expressly agrees that should a court of competent jurisdiction determine that the duration, geographic scope, orbusiness activities contained in the restrictions and limitations of Section 7 are in excess of that which is valid or enforceable under applicablelaw, then such provision, as to such jurisdiction only, shall be equitably modified or construed to cover only that duration, geographic scope oractivities that would be permissible under applicable law. Key Employee acknowledges the uncertainty of the law in this respect andexpressly stipulates and agrees that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to themaximum extent (not exceeding its express terms) possible under applicable law in each applicable jurisdiction.IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the first paragraph. By: C. H. ROBINSON WORLDWIDE, INC., President and Chief Executive Officer EMPLOYEE: 9C. H. ROBINSON WORLDWIDE, INC.and Subsidiaries and AffiliatesCONFIDENTIALITY AND PROTECTION OF BUSINESS AGREEMENTThis Confidentiality and Protection of Business Agreement (“Agreement”) is made and entered into between C. H. Robinson Worldwide, Inc., a Delawarecorporation, and its subsidiaries and affiliated companies (collectively referred to as “Company”) and _______________________________________, hereinafterreferred to as “employee,” or “I,” or “me.”(PRINT NAME)I.RECITALSEmployee agrees and acknowledges that Employee wishes to be employed or continue to be employed by C.H Robinson Worldwide, Inc., or one of itssubsidiary or affiliated companies in a significant position involving important contact and relationships with the Company’s customers, carriers, vendors, and otherbusiness partners in which Employee will represent the Company and have access to the Company’s confidential and proprietary business information. Employeewishes to enter into and/or continue such employment with the potential of increased responsibility and knowledge about the Company's affairs.Employee and Company agree that Company will give Employee access to Company’s highly sensitive, confidential, and proprietary information andprovide Employee opportunities to represent the Company in important relationships with customers, carriers, vendors and/or other business partners.Employee hereby confirms that Employee has no obligations or commitments, whether by contract or otherwise, inconsistent with Employee’s obligationsto the Company.As a condition of employment or continued employment, Employee agrees to be bound by and act in accordance with this Agreement. In consideration ofthe mutual obligations incurred and benefits obtained hereunder and other good and valuable consideration (including, without limitation, access to Company’sconfidential information, customers, carriers, and other business partners, opportunities for learning and experience, opportunities for increased compensation andother benefits, restricted stock opportunities, bonus opportunities, and opportunities for advancement) which would not be available to Employee except in return forentering into this Agreement and the sufficiency of such valuable consideration Employee hereby acknowledges, Company and Employee agree as follows:II.DEFINITIONSIn this Agreement:A. “Business Partner” means any Customer, Carrier, consultant, contractor, supplier, vendor, or any other person, company, organization, or entity thathas conducted business with or potentially could conduct business with the Company in any of the Company Businesses.B. “Carrier” means any person, company or organization that the Company has engaged or potentially could engage for transportation services in any ofthe Company Businesses.C. The "Company" means C.H. Robinson Worldwide, Inc., and all existing or future affiliated corporations including all subsidiaries, divisions andenterprises owned or controlled by those corporations.D. The “Company Businesses” shall mean freight brokerage and contracting, contract logistics, freight forwarding or backhauling, transportation logistics,transportation-related payment and information systems, custom house brokerage businesses, the purchase, sale and sourcing of fresh fruits and vegetables, andother businesses the Company may become involved in now or in the future during Employee’s employment with Company (collectively referred to as the“Company Businesses”),E. "Confidential Information"11. "Confidential Information" shall mean all information written (or generated/stored on magnetic, digital, photographic or other media) or oral, relatingto any aspect of the Company Businesses, existing or reasonably foreseeable, which is disclosed to Employee, to which Employee was given access, or which wasconceived, discovered or developed by Employee (alone or jointly with others), and which is not generally known or which is proprietary to Company, including butnot limited to: Company’s strategic and other business plans, designs, information relating to employees or Business Partners, customer and/or carrier lists, andmarketing information, aids or materials, accounting information, merchandising information, rate and/or pricing information, and information-gatheringtechniques and methods, and all accumulated data, listings, or similar recorded matter used or useful in freight brokerage and contracting, contract logistics, freightforwarding and backhauling (all modes), transportation logistics, transportation-related payment and information systems, custom house brokerage businesses, and/orthe purchase, sale and sourcing of fresh fruits and vegetables including, but not limited to, the Business Partner, customer and carrier lists, business forms, weeklyloading lists, service contracts, all pricing information, all contract terms, tariff information, and computer programs, software and/or code.2. All information disclosed to me, or to which I have access during the period of my employment, for which there is any reasonable basis to be believedis, or which appears to be treated by the Company as, Confidential Information, shall be presumed to be Confidential Information hereunder, and Employee agreesto treat all the following as Confidential: (a) all information contained on any computer or computer system of Company; and (b) all information which has beendisclosed to Employee or to which Employee has access during the period of employment with Company which Company does not intentionally disclose to thegeneral public.F. "Competing Business" means any person, business, firm, entity, undertaking, company or organization, other than the Company, which:1.is engaged in, or is about to become engaged in a business or businesses the same or similar to the Company Businesses, or2.regardless of the nature of its business, either competes directly or indirectly with the Company in any of the Company Businesses, including butnot limited to any activities that involve offering or providing products or services that are the same or similar to products or services offered bythe Company or which could be used in place of products or services offered by the Company, or3.any person, company or organization engaged in the produce or transportation or logistics industries as a shipper, receiver or carrier, or4.the provision of payment, financing, and information services to entities engaged in the transportation or logistics industries.G. "Customer" means any person, company or organization that has engaged or potentially could engage the Company's services in any of the CompanyBusinesses.III.NATURE OF EMPLOYEE'S ACTIVITIESA. I am aware and acknowledge that the Company has developed a special competence in the Company Businesses, and has accumulated as proprietaryinformation (not generally known to others) Confidential Information and more and better information about Business Partners, shippers, carriers, truckers, truckingequipment, railroads, ocean carriers, foreign agents, customers, purchasing agents and similar matters which are of unique value in the conduct and growth of theCompany's Businesses. This proprietary pool of information has enabled the Company to conduct the Company Businesses with unusual success and has thusafforded unusual job opportunities and potential to its employees.B. In the course of my employment, I wish to be employed in a position or positions with the Company in which I may receive or contribute toConfidential Information. It is my desire to continue progressing in the Company, which could include sales, operations, management, carrier, and customer-relatedcapacities, and I recognize that optimum progression and specialization cannot take place unless Confidential Information, including information relating totechnology, processes, plans, development, activity, Business Partners, other employees, and the like, is entrusted to me.C. In exchange for my promises and commitments in this Agreement, the Company will provide me with Confidential Information to permit me to carryout, perform, and fulfill my job responsibilities and have greater opportunities to advance in my career. I acknowledge that the Company may provide me with suchConfidential Information, and I further acknowledge that in the course of carrying out, performing and fulfilling my responsibilities for the Company, I have beengiven Confidential Information relating to the Company's Businesses, and I recognize that disclosure of any such Confidential Information to a Competing Business,to the general public, or for any2reason or under any circumstance other than to further the Company’s business would be highly detrimental to the Company. I further acknowledge that, in thecourse of performing my obligations to the Company, I will be a representative of the Company to many of the Company's Business Partners and, in some instances,may be the Company's sole and exclusive contact with a Business Partner. In this capacity, I will be given significant responsibility for maintaining or enhancing thebusiness relationship and/or goodwill of the Company with such Business Partners.IV.PROTECTION OF BUSINESSTherefore, in consideration of the Company’s entrusting me with Confidential Information and the opportunity to represent the Company in dealings withBusiness Partners, in consideration of my employment by the Company, in consideration of the compensation, benefits, and opportunities available to me throughsuch employment, and in consideration of the other benefits and covenants provided to me by this Agreement,I hereby agree as follows:A. Except as may be required in the performance of my employment duties with the Company, I will never at any time (whether during or afteremployment with Company) use, disclose, copy or assist any other person, entity, or organization in the use, disclosure or copying of any Confidential Information.B. Upon the termination of my employment with the Company or at any other time requested by the Company, all Confidential Information, includingfiles, records, data, copies, summaries, or abstracts containing or reflecting Confidential Information, in my possession, custody, or control, whether prepared by meor others, and regardless of how the same came into my possession, custody, or control, will be turned over to the Company by me.C. For a period of two (2) years after the termination of my employment with the Company, however occasioned and for whatever reason, I will not:1. Directly or indirectly, for the benefit of any Competing Business (including a business which I may own in whole or in part), solicit, engage, sell orrender services to, or do business with any Business Partner or prospective Business Partner of the Company with whom I worked or had regular contact, on whoseaccount I worked, or with respect to which I had access to Confidential Information about such Business Partner at any time during the last two years of myemployment with the Company; or2. Directly or indirectly recruit, hire or solicit any employee or agent of the Company for employment or service with or on behalf of any CompetingBusiness or attempt to interfere with the contract or relationship between the Company and any of its employees or agents, or directly or indirectly cause or attempt tocause any employee or agent of the Company to terminate or reduce such person’s employment or service with the Company.3. Directly or indirectly cause or attempt to cause any Business Partner of the Company with whom the Company has done business or sought to dobusiness within the last two (2) years of my employment to divert, terminate, limit or in any manner modify, decrease or fail to enter into any actual or potentialbusiness relationship with the Company.4.It is understood by me and agreed to by the Company that upon the termination of my employment hereunder, I will not be restrictedterritorially from competing with the Company so long as I comply with the provisions of Part IV herein.5.It is further understood and agreed that the running of the two (2) year period of restriction set forth in Part IV C shall be tolled during any timeperiod in which I violate the provisions of Part IV C.D. I will devote my entire time, attention, and energies to the business of the Company and shall not, during the period of my employment, be engagedin any other employment or business activity whether or not such activity is pursued for gain, profit or other pecuniary advantage. This restriction, however, shall notbe construed as preventing me from investing my assets in such form or manner as will not require any services on my part in the day-to-day operation of the affairsof the companies in which such investments are made.E. I will comply with all applicable state and federal laws and regulations, and all the policies, rules, or codes of conduct generally in effect foremployees of Company during my employment.3V.INVENTIONA. Employee shall communicate to Company as promptly and fully as practicable all Inventions (as defined below) which are (or were) conceived orreduced to practice by Employee (alone or jointly with others) (1) during Employee’s employment with Company, (2) within one (1) year following the terminationof Employee’s employment with Company for any reason (and whether occasioned by Employee or Company). Employee hereby assigns to Company and/or itsnominees, all of Employee’s right, title, and interest in such Inventions, and all of Employee’s right, title, and interest in any patents, copyrights, patent applications,or copyright applications based thereon. Employee shall assist Company and/or its nominees (without charge but at no expense to Employee) at any time and inevery proper way to obtain for Company and/or its nominees the benefits, patents and copyrights for all such Inventions anywhere in the world and to enforce itsand/or their rights in legal proceedings. To the extent any materials prepared by Employee (alone or jointly with others) during Employee’s employment withCompany include material subject to copyright protection (or other intellectual property protection), it is understood and agreed that such materials have beenspecially commissioned by Company and they shall be deemed "work for hire" as such term is defined under U.S. copyright law. Employee acknowledges andagrees that all documents, digitally, magnetically or optically encoded media, and other tangible materials created by Employee (alone or jointly with others) duringEmployee’s employment with Company shall be owned by Company. Employee irrevocably acknowledges Company's sole ownership in all right, title, and interest toall work created by Employee during Employee’s employment with Company and further agrees to engage in no conduct and take no position inconsistent with suchsole ownership by Company.B. As used in this Section, the term “Invention” includes, but is not limited to, all inventions, discoveries, improvements, processes, developments,designs, know-how, data, computer programs and formulae, whether patentable or unpatentable or protectable by copyright, trademark, or other intellectual propertylaw.C. Any provision in this Section requiring Employee to assign Employee’s rights in any Invention does not apply to an Invention which qualifies forexclusion under the provisions of Minnesota Statute Section 181.78. That section provides that the requirement to assign “shall not apply to an invention for which noequipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee’s own time, and (1) whichdoes not relate (a) directly to the business of the employer or (b) to the employer’s actual or demonstrably anticipated research or development, or (2) which does notresult from any work performed by the employee for the employer.” Employee understands that Employee bears the burden of proving that an Invention qualifies forexclusion under Minnesota Statute Section 181.78.D. Employee also assigns to Company (or to any of its nominees) all rights which Employee may have or acquire in any Invention, full title to which isrequired to be in the United States by a contract between Company and the United States or any of its agencies.E. Employee hereby irrevocably designates and appoints Company and each of its duly authorized officers and agents as Employee’s agent and attorney-in-fact to act for and on Employee’s behalf and stead to execute and file any document and to do all other lawfully permitted acts to further the prosecution, issuance,and enforcement of patents, copyrights and other proprietary rights with the same force and effect as if executed and delivered by Employee.VI.EXIT INTERVIEWTo ensure a clear understanding of this Agreement and my post-employment obligations to the Company, I agree to engage in an Exit Interview with theCompany at a time and place designated by the Company. The Company, at its option, may elect to conduct the Exit Interview either at the Company's principalheadquarters in Minneapolis, Minnesota, or through written correspondence, or by phone; provided, however, that the Company shall pay all reasonable travel andlodging expenses incurred by me in attending such Exit Interview if the Company requires my personal attendance.VII.INJUNCTIVE RELIEFEmployee acknowledges and agrees that any violation of Part IV above would be highly injurious to Company, and that it would be extremely difficult tofully compensate Company for damages for any such violation. Accordingly, Employee specifically agrees that in the event of a breach or threatened breach of PartIV above, the Company shall be entitled to a temporary and/or permanent injunction restraining such breach, without the necessity of proving actual damages.Employee further agrees that a reasonable and proper bond for any such injunctive relief would be five hundred dollars ($500.00). Company shall further beentitled to recover all attorneys’ fees reasonably incurred in establishing such violations of this Agreement; but nothing herein shall be construed as prohibiting theCompany from pursuing damages or any other remedy available to it at law or in equity, in addition to injunctive relief, for such breach or threatened breach.4VIII.SEPARATE AND DIVISIBLE COVENANTSThe covenants contained in this Agreement are intended to be separate and divisible covenants, and if, for any reason, any one or more thereof shall beheld to be invalid or unenforceable, in whole or in part, it is agreed that the same shall not be held to affect the validity or enforceability of any other covenant or partof this Agreement. To the extent any of the terms or time periods set forth in Part IV are determined by a Court of competent jurisdiction to exceed the restrictionspermitted by law, then any such term or time period shall be equitably modified to the extent necessary to comply with the applicable law, but the parties understandand agree that they intend such terms to be enforced to the maximum permitted by the law.IX.DISPUTESA.Except as provided below, all Claims the Company might bring against Employee and all Claims Employee might bring against Companyand/or any officers, directors, employees, or agents of Company shall be deemed waived unless submitted to mediation, and thereafter, if mediation is unsuccessful,to final and binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association, modified asfollows: (1) the arbitration need not actually be administered by the American Arbitration Association; (2) the parties shall share equally in the fees and costs for thearbitrator and the arbitration process, except that the arbitrator may award such fees and costs to the prevailing party as part of a final decision; (3) any mediation orarbitration shall be governed by the Company’s Employment Dispute Mediation/Arbitration Procedure, which is available on the Company Intranet; (4) dispositivemotions shall be permissible and not disfavored in any arbitration, and the standard for deciding such motions shall be the same as under Rule 56 of the FederalRules of Civil Procedure; (5) except on a substantial showing of good cause, discovery will be limited to the exchange of relevant documents and three depositionsper side; and (6) except as mutually agreed at the time between Employee and Company, neither Employee nor Company may bring any Claim combined with oron behalf of any other person or entity, whether on a collective, representative, or class action basis or any other basis. In the case of any conflict between the rulesand procedures for either mediation or arbitration, the priority and order of precedence shall be as follows: (1) the rules and procedures stated herein; (2) theCompany’s Employment Dispute Mediation/Arbitration Procedure; (3) the Employment Arbitration Rules and Mediation Procedures of the American ArbitrationAssociation.B.For purposes of this Agreement, “Claims” shall include, but not limited to, all claims directly or indirectly related to Employee’s recruitment,employment, compensation or benefits (except that for any claims under an employee benefit or pension plan that specifies a claim procedure, such claimprocedure must first be exhausted before a claim, if any, may be pursued under this Agreement) or termination of Employee’s employment with Company,including, but not limited to, alleged violations of Title VII of the Civil Rights Act of 1964, sections 1981 through 1988 of Title 42 of the United States Code and allamendments thereto, the Employee Retirement Income Security Act of 1974 (“ERISA”), the Americans with Disabilities Act of 1990 (“ADA”), the Age Discriminationin Employment Act of 1967 (“ADEA”), the Older Workers Benefits Protection Act of 1990 (“OWBPA”), the Fair Labor Standards Act (“FLSA”), the Occupational Safetyand Health Act (“OSHA”), the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), and any and all claims under federal, state, and local laws orregulations (including all such laws and regulations pertaining to employment or prohibiting discrimination). This Section shall not apply to any of the following:(1) Worker's Compensation claims; (2) claims related to unemployment insurance; (3) any claims by Company to enforce Parts IV or V of this Agreement; (4) anyclaims by Company that include a request for injunctive or equitable relief, including, without limitation, claims related to its enforcement of any restrictivecovenants, non-solicitation obligations, and/or confidential information provisions contained in any Company policy and/or agreement(s) entered into betweenEmployee and Company; and/or (5) any claims to protect the Company’s trade secrets, confidential or proprietary information, trademarks, copyrights, patents, orother intellectual property.C.This Section shall continue in full force and effect during Employee’s entire employment with Company and after such employment hasterminated, regardless of the reason for such termination and whether termination was voluntary or involuntary. This Section shall be binding upon the heirs,successors, and assigns of Employee and Company, and any person or entity asserting Claims or seeking relief of any kind on behalf of Employee or Companyshall be bound by this Agreement to the fullest extent permitted by law.D.If any portion of this Section is determined to be void or unenforceable, then the remaining portions of this Section shall continue in full forceand effect, and this Agreement may be modified to the extent necessary, consistent with its fundamental purpose and intent, in order to make it enforceable.5X.GOVERNING LAW AND VENUEI agree that all of my obligations hereunder shall be binding upon my heirs, beneficiaries, and legal representatives and that the law of the State ofMinnesota shall govern as to the interpretation and enforceability of this Agreement without regard to conflicts of law principles. Employee and Company agree thatany claim or dispute between them shall be adjudicated or arbitrated exclusively in the State of Minnesota, Hennepin County District Court, or the United StatesDistrict Court for the District of Minnesota. Employee and Company hereby consent to the personal jurisdiction of these courts and waive any objection that suchvenue is inconvenient or improper.XI.MISCELLANEOUSA. Withholding Taxes. Company may take such action as it deems appropriate to insure that all applicable federal, state, city and other payroll,withholding, income or other taxes arising from any compensation, benefits or any other payments made pursuant to this Agreement or any other contract,agreement or understanding which relates, in whole or in part, to Employee’s employment with Company are withheld or collected from Employee.B. Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing.C. No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provisions ofthis Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not bedeemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived, and shall not constitute a waiver of such term orcondition for the future or as to any act other than as specifically set forth in the waiver.D. Assignment. Employee may not assign any right, interest, or obligation under this Agreement, in whole or in part, without the written consent ofCompany. Company will be free to assign its rights, interests, and obligations under this Agreement without the consent of Employee. After any such assignment byCompany, Company shall be discharged from all further liability hereunder and such assignee shall thereafter be deemed to be Company for the purposes of allprovisions of this Agreement including this Section.Executed at Eden Prairie, Minnesota, this _______ day of ___________________, 20_____. By: C. H. ROBINSON WORLDWIDE, INC., President and Chief Executive Officer EMPLOYEE: 6Exhibit 21SUBSIDIARIES OF C.H. ROBINSON WORLDWIDE, INC.The following is a list of subsidiaries of the Company as of December 31, 2013, omitting some subsidiaries which, considered in aggregate, would not constitute a significant subsidiary. Name Where incorporated C.H. Robinson International, Inc. Minnesota, USA C.H. Robinson Worldwide Chile, S.A. Chile C.H. Robinson de Mexico, S.A. de C.V. Mexico C.H. Robinson Company (Canada) Ltd. Canada C.H. Robinson Company Delaware, USA C.H. Robinson Company, Inc. Minnesota, USA CHRW Oldco, Inc. (formerly known as T-Chek Systems, Inc./Les Sytemes T-Chek, Inc.). Minnesota, USA C.H. Robinson Worldwide Foundation Minnesota, USA C.H. Robinson Worldwide Logistics (Dalian) Co. Ltd. China C.H. Robinson Worldwide (Hong Kong) Ltd. Hong Kong C.H. Robinson Worldwide Argentina, S.A. Argentina C.H. Robinson Worldwide Logistica Do Brasil Ltda. Brazil C.H. Robinson Worldwide Colombia SAS Colombia C.H. Robinson Worldwide Uruguay S.A. Uruguay C.H. Robinson Czech Republic s.r.o. Czech Republic C.H. Robinson France SAS France C.H. Robinson Worldwide GmbH Germany C.H. Robinson Hungary Transport, LLC (C.H. Robinson Hungaria Kft) Hungary C.H. Robinson Europe B.V. Netherlands C.H. Robinson Iberica SL Spain C.H. Robinson Austria GmbH Austria C.H. Robinson Switzerland GmbH Switzerland CHROBINSON Logistics and Transport Services Limited (Turkey) Turkey C.H. Robinson Worldwide Freight India Private Limited India C.H. Robinson Belgium BVBA Belgium C.H Robinson Worldwide (Shanghai) Co. Ltd. China C.H. Robinson Worldwide Singapore Pte. Ltd Singapore C.H. Robinson Project Logistics Ltd. Canada CH Robinson Project Logistics Sdn. Bhd. Malaysia C.H. Robinson Worldwide (Australia) Pty. Ltd. Australia C.H. Robinson Worldwide (Ireland) Ltd. Ireland C.H. Robinson Worldwide (UK) Ltd. United Kingdom C.H. Robinson International Puerto Rico, Inc. Puerto Rico C.H. Robinson Luxembourg, SARL Luxembourg C.H. Robinson Worldwide Peru SA Peru C.H. Robinson Worldwide (Malaysia) Sdn. Bhd. Malaysia C.H. Robinson Project Logistics Pte. Ltd. Singapore C.H. Robinson Sourcing SAS France C.H. Robinson Sweden AB Sweden C.H. Robinson International Italy, SRL Italy C.H. Robinson Project Logistics, Inc. Texas, USA Rosemont Farms, LLC Minnesota, USA C.H. Robinson Worldwide SA de CV Mexico Robinson Holding Company Minnesota, USA FoodSource, LLC Minnesota, USA C.H. Robinson Polska S.A. (fka Apreo Logistics S.A.) Poland Apreo Logistics GmbH Germany C.H. Robinson Freight Services, Ltd.(USA) - fka Phoenix International Freight Services Ltd. Illinois, USA C.H. Robinson Freight Services (Ireland) Ltd. Ireland CH Robinson Freight Services (Malaysia) Sdn. Bhd. Malaysia C.H. Robinson Freight Services (Korea) Ltd. Korea C.H. Robinson Freight Services (Taiwan) Ltd. Taiwan C.H. Robinson Freight Services (China) Ltd. China Phoenix International Freight Services Ltd. (UK) UK C.H. Robinson Freight Services (Singapore) Pte. Ltd. Singapore C.H. Robinson Freight Services (Thailand) Ltd. Thailand C.H. Robinson International (India) Private Ltd. India C.H. Robinson Freight Services Lanka (Private) Limited Sri Lanka Phoenix International Freight Services SAS France Phoenix International Tahiti SARL French Polynesia CHR Holdings (Hong Kong) Limited Hong Kong C.H. Robinson Freight Services (Hong Kong) Limited Hong KongCONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-41027, 333-53047, 333- 47080, 333-110396, 333-155166,and 333-191235 on Form S-8 of our reports dated March 3, 2014, relating to the consolidated financial statements and financial statementschedule of C.H. Robinson Worldwide, Inc. and subsidiaries, and the effectiveness of C.H. Robinson Worldwide, Inc.’s internal control overfinancial reporting, appearing in this Annual Report on Form 10-K of C.H. Robinson Worldwide, Inc. for the year ended December 31, 2013.Minneapolis, MNMarch 3, 2014Exhibit 24POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of John P. Wiehoff andBen G. Campbell (with full power to act alone), as his or her true and lawful attorneys-in-fact and agent, with full power of substitution and resubstitution,for him or her and in his or her name, place and stead, in any and all capacities, to sign the Annual Report on Form 10-K of C.H. Robinson Worldwide, Inc.for the fiscal year ended December 31, 2013, and any and all amendments to said Annual Report, and to file the same, with all exhibits thereto, and otherdocuments in connection therewith, with the Securities and Exchange Commission, and to file the same with such other authorities as necessary, granting untosaid attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about thepremises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent,or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.IN WITNESS WHEREOF, this Power of Attorney has been signed by the following persons on the dates indicated. Signature Date /s/ SCOTT P. ANDERSON February 13, 2014Scott P. Anderson /s/ ROBERT EZRILOV February 13, 2014Robert Ezrilov /s/ WAYNE M. FORTUN February 13, 2014Wayne M. Fortun /s/ MARY J. STEELE GUILFOILE February 13, 2014Mary J. Steele Guilfoile /s/ JODEE KOZLAK February 13, 2014Jodee Kozlak /s/ DAVID W. MACLENNAN February 13, 2014David W. MacLennan  /s/ REBECCA KOENIG ROLOFF February 13, 2014ReBecca Koenig Roloff /s/ BRIAN P. SHORT February 13, 2014Brian P. Short /s/ JAMES B. STAKE February 13, 2014James B. Stake Exhibit 31.1Certification of Chief Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, John P. Wiehoff, certify that:1. I have reviewed this annual report on Form 10-K of C.H. Robinson Worldwide, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.March 3, 2014 /s/ JOHN P. WIEHOFFSignature: Name: John P. WiehoffTitle: Chief Executive OfficerExhibit 31.2Certification of Chief Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, Chad M. Lindbloom, certify that:1. I have reviewed this annual report on Form 10-K of C.H. Robinson Worldwide, Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting.March 3, 2014 Signature: /s/ CHAD M. LINDBLOOMName: Chad M. LindbloomTitle: Chief Financial OfficerExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. §1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of C.H. Robinson Worldwide, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Wiehoff, Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ JOHN P. WIEHOFFJohn P. WiehoffChief Executive OfficerMarch 3, 2014Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. §1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of C.H. Robinson Worldwide, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Chad M. Lindbloom, Chief Financial Officer of the Company, certify,pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ CHAD M. LINDBLOOMChad M. LindbloomChief Financial OfficerMarch 3, 2014CORPORATE & SHAREHOLDER INFORMATION BOARD OF DIRECTORS John P. Wiehoff, 52 Chief Executive Officer, President, and Chairman of the Board C.H. Robinson Worldwide, Inc. Director since 2001 Scott P. Anderson, 47 President, Chief Executive Officer, and Chairman Patterson Companies, Inc. Director since 2012 Jodee Kozlak, 51 Executive Vice President, Human Resources of Target Corporation Director since 2013 David W. MacLennan, 54 President, Chief Executive Officer, and Member of the Board of Directors Cargill Incorporated Director since 2010 Robert Ezrilov, 69 Chief Executive Officer Cogel Management Company Director since 1995 ReBecca Koenig Roloff, 59 Chief Executive Officer YWCA of Minneapolis Director since 2004 Wayne M. Fortun, 65 Chairman of the Board Hutchinson Technology, Inc. Director since 2001 Brian P. Short, 64 Chief Executive Officer Leamington Co. Director since 2002 Mary J. Steele Guilfoile, 60 Chairman of MG Advisors, Inc. Director Since 2012 James B. Stake, 61 Retired Executive Vice President 3M Corporation Director since 2009 Thomas K. Mahlke, 42 Vice President and Chief Information Officer Christopher J. O’Brien, 46 Senior Vice President Stephane Rambaud, 49 Senior Vice President Scott A. Satterlee, 45 Senior Vice President Mark A. Walker, 56 Senior Vice President EXECUTIVE OFFICERS John P. Wiehoff, 52 Chief Executive Officer, President, and Chairman of the Board Ben G. Campbell, 48 Vice President, General Counsel and Secretary Bryan D. Foe, 46 Vice President, Europe Angela K. Freeman, 46 Vice President, Human Resources James P. Lemke, 47 Senior Vice President Chad M. Lindbloom, 49 Senior Vice President and Chief Financial Officer INVESTOR RELATIONS CONTACT SEC FILINGS Timothy D. Gagnon Director, Investor Relations 952-683-5007 tim.gagnon@chrobinson.com ANNUAL MEETING Copies of the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, are available to shareholders without charge on request from C.H. Robinson Worldwide, Inc., 14701 Charlson Road, Eden Prairie, Minnesota 55347-5088, attention Timothy D. Gagnon, and are also available on our website, www.chrobinson.com. The annual meeting of shareholders is scheduled for May 8, 2014, 1:00 p.m. U.S. Central Time, at our offices located at 14800 Charlson Road, Eden Prairie, Minnesota. INDEPENDENT AUDITORS Deloitte & Touche LLP Minneapolis, Minnesota TRANSFER AGENT & REGISTRAR Wells Fargo Bank Minnesota, N.A. South St. Paul, Minnesota 800-468-9716 14701 Charlson Road | Eden Prairie, MN 55347-5076 | 952.937.8500 | chrobinson.com 

Continue reading text version or see original annual report in PDF format above