Timothy D. Gagnon - Director-Investor Relations & Business Analytics John P. Wiehoff - Chairman, President & Chief Executive Officer Andrew C. Clarke - Chief Financial Officer

Good morning, ladies and gentlemen, and welcome to the C.H. Robinson Second Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. Following today's presentation, Tim Gagnon will facilitate a review of previously submitted questions. As a reminder, this conference is being recorded Wednesday, July 29, 2015. I would now like to turn the conference over to Tim Gagnon, the Director of Investor Relations. Please, go ahead sir. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thank you, and good morning, everyone. On our call this morning will be John Wiehoff, Chief Executive Officer; and Andy Clarke, our new Chief Financial Officer. Andy joined us in June and has extensive experience in our industry. Prior to joining Robinson, he served as the President and CEO of Panther Expedited Services and the CFO of Forward Air after rolled in investment banking and corporate finance. John and Andy will provide some prepared comments on the highlights of our second quarter and we will follow that with a response to the pre-submitted questions we received after earnings release yesterday. Please note that there are presentation slides that accompany our call to facilitate the discussion. These slides can be accessed in the Investor Relations section of our website, which is located at chrobinson.com. John and Andy will be referring to these slides in their prepared comments. I'd like to remind you that comments made by John, Andy or others representing C.H. Robinson may contain forward-looking statements which are subject to risks and uncertainties. Our SEC filings contain additional information about factors that could cause actual results to differ from management's expectations. With that, I'll turn it over to John to begin his prepared comments on slide three with a review of our second quarter results. John P. Wiehoff -…

That you, John. I appreciate the kind words. Robinson is a great company and I'm really excited to be on the team. For nearly 20 years I've had the good fortune to interact with a number of Robinson people and I've always been impressed. Now being on the inside, I can tell you that the reputation, the accolades and the awards like the Inbound Logistics #1 3PL for the fifth year in a row are well-deserved. And now to the numbers, I'm starting on slide 11 with our summarized income statement. As John mentioned earlier, our net revenue accelerated during the quarter. Net revenue per day for April, ended up 7.5% as we saw performance improving, going into the last week of the month. That trend continued in May and June as net revenue per day increased 15% and 14%, respectively. Month-to-date in July, our total company net revenue per day is up just over 12% from the same period last year. I'd like to now spend a little time on our operating ratios and some of the expense categories contributing to the excellent bottom line results our people deliver. We improved operating income as a percent of net revenue by 70 basis points during the quarter to 39.2%. We focused quite a bit on this metric and these results represent our best performance in the past 10 quarters. Personnel expenses, our largest expense item were up 10.5% in the quarter. Almost the entire amount of the dollar increase is attributable to the additional head count related to Freightquote. Both historical Robinson as well as Freightquote operated more efficiently this quarter than in the same quarter last year. A majority of the rest of the increase in expenses is related to our variable incentive plans. Congratulations to the Robinson team…

Yeah. It was very strong quarter for our operating margin in most of our key metrics. We had really good results in all of our business units, including Phoenix and Freightquote. It has been and will continue to be our goal to grow operating expenses less than net revenues and we were able to accomplish that in the second quarter. John talked just before about balanced growth, and I think this shows we can do it. We're focused on growing our market share profitably with an ongoing commitment to optimization and efficiency. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. Can you discuss what the company saw in terms of spot freight availability? Do you agree that there is less spot freight available due to shippers moving more freight under contractual arrangements, as a result of concern about capacity availability? If yes, what percentage of lower spot freight was the result of economic conditions and what percent was the result of shipper actions? John P. Wiehoff - Chairman, President & Chief Executive Officer: We do see a trend in marketplace in our business reviews. I think it's been fairly well-established and we would agree with the notion that transportation, particularly full truckload transportation is ripe for higher than inflation price increases in the future due to driver shortages and the increasing cost of equipment and emissions control and all the rest of those things. So it is a pervasive practice and something that we agree with that more and more of the larger customers are trying to contract out or get committed pricing on more of their freight to make certain that they can protect themselves and plan their own supply chain against a marketplace that has more and more uncertainty. So that…

Yeah. Our outlook for capacity overall remains positive. Congratulations to our team. They signed up, as John mentioned, 3,000 brand new carriers in the quarter. What's interesting is that those carriers on average ran eight loads each for us. So not only did we sign them up, but we immediately put them to work. With respect to ELDs, the final rules are scheduled to come out later this year and based on our time spent with the regulators, the implementation will extend over the next couple of years. The impact on capacity just like in any of the other regulatory chains will be felt over time. Again very similar with other regulatory changes, we would expect that certain industry groups will contest the current state of the rule and where things ultimately end up, quite frankly, will be different than where they are now, but it'll also be different than many of us can quite frankly predict. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay. Thanks, Andy. Next question for John. Please discuss any updated thoughts with respect to M&A. Are there any verticals, geographies that are more attractive for CHRW? What is management's current view with respect to consolidation in the brokerage space and longer term implications for growth and returns? John P. Wiehoff - Chairman, President & Chief Executive Officer: No change on the overall strategy. And just to repeat it quickly is that, we are primarily focused on high quality M&A opportunities with more focus on the service offerings or regions where we lack the scale and the market leadership that we have in many of our services. So, things like intermodal, things like managed services, I referenced airfreight and other regions of the world in terms of global forwarding where we believe we could…

Yeah. No, during the quarter we had a one-time credit of just under $1 million that impacted that number. However, going forward our interest expense will be approximately $7 million per quarter. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay. Thanks, Andy. Next question for John. Can you clarify what was behind the 10% decline in sourcing gross revenue, particularly given that the case volume was up? John P. Wiehoff - Chairman, President & Chief Executive Officer: I think I drifted into answering this question in the prepared comments which is the fact that we do source and distribute, take title to a variety of commodities in that perishable area. And a number of the items that we deal with do have ultimate market prices that fluctuate rather meaningfully based on market conditions and crop output. And really the gross revenues in that service line being down are just a reflection of across many categories just across-the-board reduction in the price of those commodities compared to a year ago. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Next question for Andy. It sounds like Freightquote.com has better net revenue margins than your traditional LTL business. Can you remind us why this dynamic exists?

Yeah. Following up on John's earlier comments, it's the difference in customer mix between Freightquote and traditional C.H. Robinson LTL business. Freightquote has a high concentration of small transactional customers, which is quite frankly it's great for us, because it's an area we're focusing on. Typically this is a higher margin business, whereas the traditional Robinson customer profile tends to be larger high volume shippers with outsource agreements while it's higher volume, it's lower margin, we can execute it very efficiently. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. The next question again for you, what was the driver of the business trend acceleration in May, June, and July? It seems like the rest of the freight market has seen sluggishness?

Yeah. The faster growth in these three months is primarily the result of increased truckload net revenue per shipment. Usually at this time in the peak season, we have a bit more pressure with our purchase transportation costs, but right now, there's enough available capacity that we are able to manage our costs effectively. We would agree that with the comment that the market seems to be a bit sluggish, but again, we've been able to hold our volume growth pretty steady thus far in July. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. Please discuss your thoughts around the source of the 7% North America truckload volume growth during the quarter, specifically the 4% excluding Freightquote. I am assuming it's a combination of many factors, but are you seeing more contractual commitments driving this growth or is it from employee efficiencies as your recent head count additions become more productive or something else? John P. Wiehoff - Chairman, President & Chief Executive Officer: I think this question ties back to a number of the earlier comments that I've made really under the umbrella of our balanced growth culture and mentality that we are very focused on longer-term goals of gaining market share, but are also balanced on not trying to do that at the expense of making commitments that aren't sustainable or below market pricing that we know we're going to have to adjust at a different time. So, we have the sales force that we're investing in, dedicated account managers that we're investing in. And we are responding to the changes in the marketplaces that I discussed earlier around a greater prevalence of desire for commitments and pricing and committed freight. So we're pursuing all of that and what we think…

It really relates to the timing of the repurchases and the impact it's had on the weighted shares. So, the difference in the weighted average share count between Q1 and Q2 was just over 700,000 shares. And again, we repurchased 766,000 shares in the quarter, so it really just relates to the timing of when we did those purchases. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay, thanks, Andy. Back to John here. What's the outlook for both the air and ocean freight markets in the second half of 2015 and beyond? John P. Wiehoff - Chairman, President & Chief Executive Officer: So, drilling a little deeper into our Global Forwarding division and kind of where our heads are at, I talked about our investments the last three years and how we like our operational capabilities and our go-to-market strategies today in that Global Forwarding business. We are very confident that we're going to continue to be able to create value and grow that business in the long term. If you recap some of the events over the last year or so, the port strike on the West Coast was a big deal in terms of some of the disruption. We've recently published some whitepaper thoughts around the Panama Canal and all the investment that's happening to change the flow of freight, talked earlier about our airfreight investments and the dynamics between air and ocean. When we kind of put that all together, we've had a great run the last three years with growing our net revenues pretty meaningfully every quarter since the acquisition of Phoenix three years ago. And while we still feel great about the long term, we did comment last year that our comparisons in the third quarter and fourth quarter for the Global Forwarding business will probably be a little bit more challenging because we're comparing to periods of pretty meaningful disruption a year ago. I commented about airfreight and how that becomes very reactive to the current marketplace and supply chains. So, we're investing in the long-term capabilities and market share gains there, but those results could be a little bit more volatile going forward as well, too. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay. Thanks, John. Next question for Andy. Given the plethora of rapidly growing truck brokerage-based logistics companies in the U.S., would you say the competitive intensity is the same or greater than it was five years ago? How would you see the competitive landscape playing out over the next five years?

Yeah, we do see some of the competitors growing and pursuing scale through acquisition, as John mentioned, there are more larger competitors today than five years ago. And quite frankly, we welcome the competition; it makes us better. Our approach, however, which we happen to believe is the right one, has been to focus on our customers by helping them improve their supply chain and drive better results. We know we will always have competitors that can offer brokerage services, but we also know, and quite frankly this is where we're focused, is that there are very few non-asset based competitors that have the people, the network, the processes and the technology to offer the same breadth of services on a global scale. I happened to have the good fortune of sitting in on a customer presentation yesterday, it's a multibillion-dollar global manufacturer with 26 facilities located across the globe, and they had their entire senior leadership team in on the logistics side for some strategic planning. And our ability to show them the global scale, the in-transit visibility across all different modes of transportation, I think they quickly realized, and we're doing business with them right now, that they can't get that service from any other competitor that's out there. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. LTL volumes excluding Freightquote look to be up 13% year-over-year. This seems well above the market. Can you elaborate? John P. Wiehoff - Chairman, President & Chief Executive Officer: Yes, this is probably drilling down a little bit into our LTL service line, and I started to go there in the prepared comments. We do believe we're the market leader in terms of 3PL services in the LTL space. And we're investing significantly in…

Yeah, we would expect personnel expenses to grow equal to or slightly less than net revenue growth. That's always been our objective. Typically, we would expect head count to grow more in line with volume, though over the past six quarters, we've been able to grow volume at a faster pace than head count. As far as variable compensation accelerating, we don't expect that as we had a good growth in the third quarter and fourth quarter last year. And finally, we don't have any additional – pardon me, we do have additional head count – Freightquote, but the base Robinson business should not see an acceleration. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. Given the excellent first half performance against a mediocre economic backdrop, have you considered changing the 7% to 12% EPS growth rate targets laid out at your last Analyst Day in New York? With 200 basis points of that growth coming from share repurchases, is the core 5% to 10% growth objective now too conservative? John P. Wiehoff - Chairman, President & Chief Executive Officer: When we delivered that long-term, double-digit EPS growth goal, we talked about the fact that that really did not factor into significant acquisitions, really. We have some history of smaller acquisitions supplementing our growth, but I think some of our enhanced performance more recently has come from a couple of good investments that have really paid off and that our comments and the transparency that we're giving you to the legacy business and those trends, I think, probably do support may be more the Investor Day, longer-range guidance that we gave. So, I think that still is the right long-term message that we're sticking with and the comments I shared earlier about the GDP, the marketplace and customer outlook probably weighs into that a little bit. When you put it all together, we will continue to look for opportunities to exceed our long-term guidance and hopefully create more value. But I think that's an appropriate message for us to keep our investors and potential investors focused on for now. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. This will be the last question for Andy. When do you plan to conduct your next Analyst Day? It seems that they should be more frequent than they have been.

Yes, we've had two Investor Days since becoming a public company. And I like the approach that John, Chad, Angie, and Tim have taken in the past about holding Investor Day when there are important topics to present to investors and gaining feedback. And going forward, I'll be working with John and Tim to build the current RR (59:44) program and I would not rule out an Investor Day in 2016. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. So unfortunately, we're out of time and we apologize that we couldn't get to all of the questions today. Thank you for participating in our Second Quarter 2015 Conference Call. This call will be available for replay in the Investor Relations section of the C.H. Robinson website at www.chrobinson.com. It will also be available by dialing 888-203-1112 and entering the passcode 3923556#. The replay will be available at approximately 11:30 Eastern Time today. If you have additional questions please call me, Tim Gagnon at 952-683-5007 or by email at tim.gagnon@chrobinson.com. Thank you, everybody. Have a great day.

And that does conclude today's conference. Again, thank you for your participation.