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 Fourth 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, February 3, 2016. I would now like to turn the conference over to Tim Gagnon, the Director of Investor Relations. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thank you, Mike, and good morning, everyone. On our call this morning will be John Wiehoff, our Chief Executive Officer; and Andy Clarke, Chief Financial Officer. John and Andy will provide some prepared comments on the highlights of our fourth quarter and full year of 2015. And we'll follow that with the response to pre-submitted questions we received after earnings release yesterday. Please note that there are presentation slides that accompany our call to facilitate the discussion. The 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 fourth quarter results. John P. Wiehoff - Chairman, President & Chief Executive Officer: Thank you, Tim, and thanks, for everybody taking the time to listen to the call this morning. I'm going to start by highlighting a few of the financial metrics that we look at, and then maybe…

Thank you, John. I also want to echo your comments about our fourth quarter and full year. 2015 was a great year for Robinson, and our people are and should be very proud of these results. While it was a different transportation market than 2014, our global network continues to prove that we can provide excellent service to our customers and deliver strong results for our shareholders in any condition. This industry continues to change and evolve and will do so at an increasing pace in the years to come. We like that, because we have been disrupting and innovating for years. Today, approximately 72% of our customer shipments originate from either an electronic or digital transaction or is web or mobile-based. We have connections with well over 150,000 organizations and execute over 5 million web or mobile interactions a month with customers and carriers. These customers and carriers rely on us to lead, and that is exactly what we are doing, and I think these results reflect that. So, I will start my review of the detailed result on slide four with our transportation. Transportation net revenues increased 13.8% to $544 million in the quarter. We finished the full year with a 13.5% net revenue growth, driven in part by our 14% growth in global shipment count to approximately 17 million shipments in 2015. Fourth quarter transportation net revenue margin increased 310 basis points from 2014's fourth quarter to 19%. From historical perspective, it is our best net revenue margin quarter since Q4 2008. This increase was a result of the impact of lower transportation costs in most of the transportation modes, including the decrease in fuel prices when compared to the fourth quarter of 2014. The chart in this page shows our transportation net revenue margin for the…

What we've seen in January is it has remained relatively the same. There's been no material change one way or the other from what we saw in the fourth quarter. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. The next question is for John. Trying to read the tea leaves; how are you feeling about the macro environment today? Any changes in your customer tone and any differentiation between large or small customers? John P. Wiehoff - Chairman, President & Chief Executive Officer: From a macro standpoint, I would say the softening of the market and the decrease in prices is probably the predominant theme that everybody is focused on, just how long will the market stay soft and what type of environment will we be in throughout the remainder of 2016. Listening to that question, I would say the other thing that probably comes to mind is that from a macro standpoint, we've been trying hard to analyze our business from a industry and vertical standpoint more and more, and probably not surprisingly, when you look across the vertical sectors in Robinson, is where you would see some of the higher correlations to the economy and where things are at. Anything energy or mining related obviously very soft, and even in those regions where that's focused, less activity going on. In the retail world, there's a lot of transition, a lot of increase in e-commerce, a lot of store closings, a lot of transition that's going on in the retail world. We're still fairly big in food and beverage, which is a little bit more stable than a lot of the other sectors. Our automotive business is still remaining pretty good in North America but that industry has continued to do fairly well, so again, not shocking or surprising given the headlines and the types of things that are happening in the U.S. and around the world, but I would say that our freight activities probably validate some of the headlines that you see about what's happening in the overall economy. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. The next question's for Andy around contractual pricing in truckload. Can you comment on the rate increases or decreases that you are seeing in your contractual book of business for 2016? Asked another way, are shippers demanding and getting rate concessions, or are you able to maintain or even modestly increase your rates as you go through the bid process?

Yeah, thanks. We are currently having a balanced discussion with our contractual customers in this area. On the one hand, you've got regulations such as ELD that'll drive up the cost of transportation later in the year and in 2017, and shippers are aware of that. At the same time, the current spot market has softened from a year ago and we are aware of that. Things such as origin-destination pairs as well as mix of freight are considered when deciding rates and our people are working every day to reach out and get the best solution for our customers and our company. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay , thanks, Andy. Next question for John. It appears you're still in hiring mode, which you promised to do in 2015 to regain some market share. With an uncertain macro picture, how do you see your hiring plans in 2016? John P. Wiehoff - Chairman, President & Chief Executive Officer: It is our current intention that we do plan to continue to hire in 2016. We have a lot of productivity initiatives and various focus points that we have to try to increase our productivity and build our business by being more productive and being more efficient, but as I said earlier, people are the core asset and we know that we're more successful when we go to market with good people who are talented and trained in what they need to do. So we are continuing to plan to hire in 2016, and we'll obviously adjust if the market conditions change significantly. But at this point, it's our intent that we'll be able to hire mid single digit increases of people and grow our network and strengthen our team. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Next question for Andy. With the implementation of ELDs, what is your outlook for longer term truckload pricing?

Thanks. As we referenced in our prepared remarks, our price to carriers has risen on average 2.5% since 2008, which includes different economic cycles and regulations. That rate of increase is reflective of what has happened in the industry overall and we would expect ELDs to cause long-term truckload pricing to rise and that increase to be influenced by many different factors, both positive and negative, such as GDP, capacity and the like. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. How does the current market environment compare to that seen in 2011 and 2012? Does it look like we are approaching a supply-demand equilibrium at the current tempered freight levels? And if so, how will this impact your net margins? John P. Wiehoff - Chairman, President & Chief Executive Officer: If you go back – and this question's around North American truckload – and if you go back and look at our activity over the last five years or six years, throughout 2010, 2011, 2012, 2013, we talked a lot about it being a little bit unusual in an extended period of time where there was a fairly balanced market. That balanced market ended with some weather and some meaningful price increases in late 2013, 2014, and now what we're seeing in 2015 is, towards the end of the year, some of that double digit price increase, especially in the transactional market, being given back. So, yeah, from a standpoint of 2014 being a tighter market and some aggressive price increases and now some of those coming back, we are probably moving back more towards a midpoint around the balance of supply and demand in the marketplace. What I think is different, though, is that a lot of the way we talked about our business back in 2011 and 2012 was during a sustained period of a balanced market. There became some different dynamics around route guides and how important it was to be near the top of the route guide and how we had to aggressively go after share in a fairly sustained balanced market for a long period of time. It's too early to know what the rest of even 2016 is going to be like, much less 2017 or 2018. So I don't think it's fair to conclude that we're back into a sustained balanced market. We'll have to see how the rest of 2016 plays out and what the next couple of years look like to know if we're going back into an environment like we saw in 2011 and 2012. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Next question for Andy. What is the outlook for share repurchases moving forward? And what is the hierarchy for uses of cash?

Yeah, the hierarchy for the uses of cash is number one, continue to invest in the business, as that capital generates significant ROI. Number two, strategic acquisitions. Between Phoenix and Freightquote, which have occurred over the last three years, we've invested over $1 billion and are very pleased with the returns on those investments. And, number three, return capital to shareholders, which we've done, over $3.1 billion since 2010. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question back to John. Can you discuss the current competitive environment in truck brokerage and are you concerned about other participants being willing to do the same business for a significantly smaller margin going forward? Who provides the greatest threat, other pure truck brokers or asset-intensive carriers with ancillary truck brokerage operation? Has the competitive environment improved with the acquisition of other competitors? John P. Wiehoff - Chairman, President & Chief Executive Officer: With regard to the competitive landscape, we've acknowledged, and there's been a lot of discussion over the last probably five years around the increase in competition. Almost every committed bid that we work on will have dozens of providers, and lots of carriers, lots of other 3PLs, and the market remains very competitive. So we continue to see a very competitive marketplace with a lot of people out there. I commented earlier in our prepared comments that we take a approach around sustainability and profitability, and whenever somebody is aggressively going after market share with a different attitude towards profitability or sustainability, it can have an impact that we have to try to understand that and make sure that we're not overreacting or mispricing our services, or doing things that we don't intend to do because others are taking a different go to market strategy in terms of what they're doing. So we do have to watch out for that. But I think, for the most part, the vast majority of the competitors have a similar attitude, and I've continued to work on that. We haven't seen a lot of change this year in the competitive landscape. Again, whenever the market is moving and it's softening like it has, there will be a lot of transition and a lot of bid activity. But with thousands of competitors in a very fragmented market, it's hard to see any unique changes in a short period of time. So I would say there's nothing really unusual about what we've experienced this year. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Next question for Andy. Can you discuss how North America year-over-year organic truckload volume growth trended on a monthly basis through the fourth quarter, and thus far into the first quarter?

Yes. Truckload volume for the quarter was pretty consistent throughout, up 2% per business day in each of the months. And January has continued at that same trend. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. Can you speak to the challenges facing your intermodal business in the current market? Would you expect your intermodal volumes to remain under pressure until truckload rates begin to rise? John P. Wiehoff - Chairman, President & Chief Executive Officer: Short answer is yes. We've talked a lot about our intermodal business and the competitive positioning of it over the past several years. What we have today is a capable team. We understand the service, and we compete primarily in that multimodal freight that can typically be served by either truck or intermodal services. We feel like we do a good job of making certain that our customers get exposure to intermodal opportunities and pricing when that's appropriate. What we've confessed in the past is that what we don't have is the density of high-volume, committed freight in all intermodal lanes, or the dedicated equipment that is sometimes the most effective way to serve those dense corridors and those more committed areas. That's something that we continue to work on and still aspire to be better at in the future. So as our business continues to transition and hopefully strengthen ourselves, in terms of dedicated and committed relationships on the intermodal front, we will continue to see more fluctuations in transactional shipments based upon the market conditions. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Next question for Andy. Air freight and ocean freight net revenue growth – around that net revenue growth. Cross-selling initiatives are noted in the prepared remarks, but are you disappointed in the rate of growth given their relative lack of size and the completion of Phoenix's integration?

We're not disappointed at all. In fact, we're very pleased. So as John mentioned, you go back three years ago when we acquired Phoenix and merged it with our global forwarding operation, particularly, I think if you look at any other acquisition that's been done in the space, there are a lot of examples of how not to do it. A lot of businesses that have been significantly disrupted. And we've continued to grow both what I'll call traditional Phoenix and traditional Robinson global forwarding business. And what we've tried to do, on a very thoughtful and deliberate basis, is merge those two entities across the globe in a way that was in no way, shape, or form disruptive to our organization. And so, today, we actually have a significantly stronger global forwarding operation located throughout the globe, with people all over the world doing pretty good things. So, again, we're really pleased with the progress of our global forwarding team, the results that we're making, and that cross-selling is really – it's already taken hold, but it's beginning to accelerate. And one of the key aspects of that as well, as John mentioned, is our global platform, Navisphere. So, when you bring everybody onto one platform, you're able to provide that visibility, end to end across the globe with all of our customers. And I would argue that there are very few people that can actually – a lot of people say they can do it, but very few people can actually back that up and do it. And I think what we've said and what we've done has been very deliberate in that regard, and the success we're seeing today, not only in 2015, but it's continuing into 2016, is there. Timothy D. Gagnon - Director-Investor Relations &…

We've added another 2,700 new carriers during the fourth quarter, which was up 13% from the fourth quarter of 2014. It's another great job by our network and carrier relations team throughout all of 2015, which brought in over 11,500 carriers, representing over 40,000 tractors. So no material change in terms of the fleet composition. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. For John, what is the best environment from a volume and capacity standpoint for Robinson operationally and financially? John P. Wiehoff - Chairman, President & Chief Executive Officer: I commented earlier about our commitment to both a transactional presence and a committed or contractual. And when you think about the years in our history where we've had really significant growth, it was environments where there was a lot of economic growth and a lot of continued opportunity in the marketplace, where, in those longer term committed relationships, we have a high degree of volume and we're able to take market share and expand those committed relationships. While at the same time, there's a very robust market of transactional opportunities and unexpected freight that we can help service in the marketplace as well, too. So, the very best performance years we've had, from a growth and profitability standpoint is when the economies are growing, the markets are very active, and there's healthy market share opportunities in both committed and transactional relationships that we have in the marketplace. There's a lot of other market environments like we talked about earlier, where demand will cycle and capacity will cycle, and so supply and demand will lead to price increases and price decreases. And as I've said a couple of times, we'll continue to add value and take market share, and apply our services in whatever environment the marketplace throws at us. But the optimum conditions, which is probably true for a lot of industries and a lot of companies, is overall economic growth and prosperity is a good thing for all of us, and when we see a sustained environment of that, it's probably the best thing. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. To Andy, with our next question. CHRW's leverage ratio ended 2015 at the lower end of its 1 times to 1.5 times debt-to-EBITDA target. How is management thinking about the company's current leverage ratio in light of a more uncertain demand outlook and weighing the potential uses of debt?

First, 2015 was a fantastic and record year in cash flow, generating nearly $720 million, with over $250 million coming in the fourth quarter alone. Obviously, this had a positive impact on our leverage ratio. Going forward, we would expect that ratio to be back in the 1 times to 1.5 times range. We continue to look at strategic acquisitions. We've done them in the past. We will continue to do them in the future. So, we believe that we are appropriately structured from a capital basis, going forward. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. To John, a truckload question. With the softer spot, are you starting to see any decreases in small carrier capacity? What is your insight into where capacity is headed, given the soft spot, macro uncertainty and pending ELD implementation? John P. Wiehoff - Chairman, President & Chief Executive Officer: We sort of touched on this in a couple different areas, but really, our – we have not seen any change in our carrier composition at this point. For the past several decades, there's been a lot of speculation around the extra strain on the small carrier, and whether or not that was going to impact the marketplace as a whole, and whether that would impact our relationships with them. Some of the regulation that's come into the marketplace over the last six years or seven years around safety and hours of service, and now, the electronic logs that are coming in, there is a cost factor that impacts that capacity in the marketplace. But I – we're pretty comfortable that similar to a lot of the previously implemented legislation, that it'll get absorbed over time, and that it'll get adapted to by the small carriers. And I think one of…

Certainly. Of the 310 basis point improvement during the quarter, approximately 140 basis points came from the improvement in net revenue per mile, approximately 110 basis points came from fuel, and the remaining 60 basis points came from all other, including Freightquote and air and ocean. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. Next question for John. What is your current spot versus contract mix in the truckload business? John P. Wiehoff - Chairman, President & Chief Executive Officer: For those of you who aren't as familiar with our history, if you go back 15 years, 20 years ago, we were almost entirely transactional in a brokerage role, and as we've grown our services and grown our company and have entered into more committed relationships, we've talked about that longer-term trend towards a better balance of committed and contractual relationships, along with our spot market. We continue to believe that there's probably a balance point of around 50/50. I think last year in 2014 we were probably closer to that 50/50 balance. In a market like this, in the fourth quarter of 2015, where things are softening, our best metrics would probably say that we're more 60/40 or a higher percentage of committed or contractual freight that's moving along pre-priced arrangements. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, John. Moving on to the next question around the truckload bid season to Andy. As trucking bidding season is now underway, can you talk a little about where customer pricing is settling in, and how does that compare to capacity cost? Any color to help understand the different moving parts in that net revenue margin number, and how it could trend in the coming quarters?

Yup. Following up on John's answer, and as a reminder, we buy almost all of our capacity in the spot market, where there is a lot of volatility. And over the last recent quarters, it's been down, but if you go back for all of 2015, and you look at it quarter-by-quarter basis: first quarter, up 6%; second quarter, up 3%; third quarter, down 1%; fourth quarter, down 5%. So, there is that volatility, and we're very familiar and comfortable in that environment. On the customer side, as John mentioned, about 60% of our business is committed. And we're having discussions right now, and continue to have discussions, about what price is doing over the longer term. So, capacity, when we buy, is very short-term. Pricing is done. The discussions are over a longer term, usually a one-year period. That being said, we feel really good about our ability to work with our customers to understand what that volatility is doing, and quite frankly, the ability to price into that volatility with them. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay, thanks, Andy. And staying on the topic of contractual business, to John, since CHRW has become increasingly reliant on contractual business, can you discuss how CHRW's bid season works with customers, namely, when it begins and ends? And is there any bellwether that set market expectations for pricing? John P. Wiehoff - Chairman, President & Chief Executive Officer: So, when we've talked about our committed relationships in the past, important to remember that the contracts are generally for a calendar year, but most of them will have evergreen clauses in them. And one of the things that virtually all shippers retain the privilege of deciding when and if they're going to rebid their committed or contractual pricing.…

Yeah, thanks. One of the great stories of Robinson, and there are many, is the office network. We currently have about 270 offices spread across the globe in global forwarding, North American Surface Trans, PMC, sourcing and the like. Inside each of those offices are great people and great leaders that manage productivity expenses at the local level. It helps that a majority of our compensation is variable and our people do an excellent job of managing for balanced growth on both the top and bottom line. So, the credit obviously goes to them for the great job and great work that they're doing of improving productivity, managing to balance growth across the network, and improving that ratio. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Thanks, Andy. To John, question about our sourcing business. The sourcing business was stronger than we were expecting. Is that business back on track, or was there anything unusual in the fourth quarter that we shouldn't assume will continue into 2016? John P. Wiehoff - Chairman, President & Chief Executive Officer: With regards to our Robinson Fresh business and the produce sourcing activity that we do, as a reminder, I think Andy stated earlier that there's a pretty concentrated customer base there, and we also have a fair amount of concentration in certain commodities like melons and others that we have unique expertise in, that we do a lot of activity. So what will happen in any period of time is that there will be some volatility in the results relative to the weather and the crop yields, and just the amount of freight and activity that comes out of it. That Fresh group also provides a lot of temperature-controlled transportation within the Robinson network. So, at any point in time, we're working…

Yeah, following up on John's earlier answer, the majority of that volume growth came from our committed business. And we've seen that number go from -- we've seen that number go from that 50/50 split to 60/40 during 2015, so the vast majority coming from committed business. Timothy D. Gagnon - Director-Investor Relations & Business Analytics: Okay. Thanks, Andy. And thank you again everybody for the submission of some great questions. And I know I didn't get time to ask all of them here. If there's any follow-up that you'd like to do with me, please reach out via email or a phone call, and we'll get some time scheduled to answer the rest of the questions. So, thank you for participating in our fourth quarter 2015 call. This call will be available for replay in the Investor Relations section of the C.H. Robinson web site at www.chrobinson.com. You can access the replay by dialing 888-203-1112, and entering the passcode, 4722702#. The replay will be available at approximately 11:30 this morning, Eastern Time. Thank you, everybody, and have a great day.

And thank you for joining us today, ladies and gentlemen. This does conclude today's program. We certainly appreciate everyone's participation. You may disconnect at any time.