10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission 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 of incorporation or organization)	(I.R.S. Employer Identification No.)
8100 Mitchell Road, Eden Prairie, Minnesota	55344-2248
(Address of principal executive offices)	(Zip Code)

(952) 937-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.10 per share

                                                                                        Preferred Share Purchase Rights

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    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  x

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 12 months (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 90 days.    Yes  x    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’s knowledge, 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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2005 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $4,595,358,000 (based on the last sale price of such stock as quoted on The NASDAQ National Market ($29.10) on such date).

As of March 6, 2006, the number of shares outstanding of the registrant’s Common Stock, par value $.10 per share, was 173,354,127.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Annual Report to Stockholders for the year ended December 31, 2005 (the “Annual Report”), are incorporated by reference in Part II.

Portions of the Registrant’s Proxy Statement relating to its Annual Meeting of Stockholders to be held May 18, 2006 (the “Proxy Statement”), are incorporated by reference in Part III.

PART I

ITEM 1. BUSINESS

Overview

C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest third party logistics companies in North America with 2005 gross revenues of $5.7 billion. We provide freight transportation services and logistics solutions to companies of all sizes, in a wide variety of industries. During 2005, we handled approximately 4.4 million shipments for more than 20,500 customers. We operate through a network of 196 offices, which we call branches, in North America, South America, Europe, and Asia. We have developed global multimodal transportation and distribution networks to provide seamless logistics services worldwide. As a result, we have the capability of managing most aspects of the supply chain on behalf of our customers.

We are a non-asset based transportation provider, meaning we do not own the transportation equipment that is used to transport our customers’ freight. Through our relationships with approximately 40,000 transportation companies, including motor carriers, railroads (primarily intermodal service providers), air freight and ocean carriers, we select and hire the appropriate transportation to manage our customers’ freight needs. Being non-asset based means we can be flexible and focus on seeking solutions that work for our customers, rather than focusing on asset utilization. As an integral part of our transportation services, we provide a wide range of value-added logistics services, such as supply chain analysis, freight consolidation, core carrier program management, and information reporting.

In addition to multimodal transportation services, we have two other logistics business lines: fresh produce sourcing and fee-based information services.

Sourcing (the buying, selling, and brokering of fresh produce) was our original business when we were founded in 1905. Much of our logistics expertise can be traced to our significant experience in handling perishable commodities. We purchase fresh produce through our network of produce suppliers. Our customers include large grocery retailers, produce wholesalers, restaurants, and foodservice distributors. In the majority of cases, we also arrange the transport of the fresh produce we sell through our relationships with owners of specialized transportation equipment. In response to demand and changing market conditions, we have developed our own brand of produce, The Fresh 1^®, and also have entered into licensing agreements to distribute produce under national brand names. The produce for these brands is sourced through various relationships and packed to order through contract packing agreements. We have also instituted quality assurance and monitoring procedures as part of our national brand programs.

Information Services, our third business line, is comprised of a C.H. Robinson subsidiary, T-Chek Systems, Inc. T-Chek’s customers are motor carriers, for which it provides a variety of management and information services such as fuel management services, funds transfer, fuel and use tax reporting, and driver payroll services. For several companies and truck stop chains, T-Chek captures sales and fuel cost data, provides management information to the seller, transfers funds to the truck stop, and invoices the carrier for fuel, cash advances, and our fee.

Our business model has been the main driver of our strong historical results and has positioned us for continued growth. Our principal competitive advantage is our large branch network of 196 offices, staffed by approximately 4,400 salespeople. These branch employees are in close proximity to both customers and carriers, which gives them broad knowledge of their local markets and enables them to respond quickly to customers’ and carriers’ changing needs. Employees act as a team in their sales efforts, customer service, and operations. Over 30% of our transactions are shared transactions between branches. Our branches work together to complete transactions and collectively meet the needs of our customers. For our top 100 customers (who comprise approximately one-third of our gross profits), we often coordinate our efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. In addition, our methodology of providing services is very similar across all branches. Our North American branches have a common technology platform that they use to match customer needs with supplier capabilities, to collaborate with other branch locations, and to utilize centralized support resources to complete all facets of the transaction. A significant portion of our branch employees’ compensation is performance-oriented, based on the profitability of their branch and their contributions to the success of the branch. We believe this makes our sales employees more service-oriented, focused, and creative.

Historically we have grown primarily through internal growth, by expanding current offices, opening new branch offices, and hiring additional salespeople. We have augmented our growth through selective acquisitions. In February 2005 we acquired the operations and certain assets of three produce sourcing and marketing companies, FoodSource, Inc., FoodSource Procurement, LLC, and Epic Roots, Inc (collectively, the “Foodsource entities”). These entities had annual revenues of approximately $270 million in 2004. During the third quarter, we acquired two freight forwarding businesses, in separate transactions: Hirdes Group Worldwide (“Hirdes”), and Bussini Transport S.r.l. (“Bussini”). The two companies combined had gross revenues of approximately $52 million in 2004.

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Hirdes provides air and ocean international forwarding with local cartage and operates in Germany and the United States. Bussini provides air and ocean international freight forwarding, customs brokerage, and domestic truck services. It is based in Milan, Italy. These companies now operate as nine different branches.

Multimodal Transportation Services

C.H. Robinson is a third party logistics company. We provide freight transportation and logistics services. We are a non-asset based provider, meaning we do not own the transportation equipment used to transport the freight. We make a profit or margin on the difference between what we charge to our customers for the totality of services provided to them, and what we pay to the transportation provider (also known as a “carrier”) to transport the freight.

We can arrange all of the following modes of transportation, on a worldwide basis:

• Truck — Through our contracts with motor carriers, we have access to dry vans, temperature-controlled units, and flatbeds. We also offer time-definite and expedited truck transportation. In many instances, we will consolidate partial shipments for several customers into full truckloads.

• Less Than Truckload (“LTL”) — LTL transportation involves the shipment of small packages and single or multiple pallets of freight, up to and including full trailer-load freight. We focus on shipments of a single pallet or larger, although we handle any size shipment. Through our contracts with motor carriers and our operating system, we consolidate freight and freight information to provide our customers with a single source of information on their freight.

• Intermodal – C.H. Robinson’s intermodal transportation service is the shipment of freight in trailers or containers, by a combination of truck and rail. We have intermodal marketing contracts with railroads, and we arrange local pickup and delivery (known as drayage) through local motor carriers.

• Ocean — As a non-asset based ocean carrier and freight forwarder, we consolidate shipments, determine routing, select ocean carriers, contract for ocean shipments, provide for local pickup and delivery of shipments, and arrange for customs clearance of shipments, including the payment of duties.

• Air — We provide door-to-door service as a full-service air freight forwarder, primarily internationally.

On a day-to-day basis, customers communicate their freight needs, typically on a shipment-by-shipment basis, to the branch salesperson responsible for their account. Customers communicate with us by means of telephone, fax, Internet, e-mail, or EDI (Electronic Data Interchange). The branch employee ensures that all appropriate information about each shipment is entered into our proprietary operating system. With the help of information provided by the operating system, the salesperson then determines the appropriate mode of transportation for the shipment and selects a carrier or carriers, based upon their knowledge of the carrier’s service capability, equipment availability, freight rates, and other relevant factors. Based on the information he or she has about the market and rates, the salesperson may either determine an appropriate price at that point, or wait to communicate with a carrier directly before setting a price. In many cases, employees from different branch offices collaborate to match the appropriate carrier to the customer’s freight, and the branch offices agree to an internal profit split.

Once the carrier is selected, the salesperson communicates with the carrier to agree on the price for the transportation and the carrier’s commitment to provide the transportation. At this point, the salesperson provides the carrier information to the customer. We then remain in contact with the carrier, mainly by phone calls with the driver, and rely on them to provide us status updates of the shipment through delivery. Our branch employees price our services to provide a profit to us for the totality of services performed for the customer.

We are a principal in the transaction. By accepting the customer’s order, we accept certain responsibilities for transportation of the shipment from origin to destination. The carrier’s contract is with us, not the customer, and we are responsible for prompt payment of carrier charges. In the cases where we have agreed to pay for claims for damage to freight while in transit, we pursue reimbursement from the carrier for the claims.

As a result of our logistics capabilities, some of our customers have us handle all, or a substantial portion, of their freight transportation requirements to or from a particular manufacturing facility or distribution center. In a number of instances, we have contracts with the customer in which we agree to handle an estimated, approximate number of shipments

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usually to specified destinations, such as from the customer’s plant to a distribution center. Our commitment to handle the shipments is usually at specific rates, subject to seasonal variation. Most of our rate commitments are for one year or less. As is typical in the transportation industry, most of these contracts do not include specific volume commitments or “must haul” requirements.

The majority of our truckload freight is priced to our carriers on a spot market, or transactional, basis, even when we are working with the customer on a contractual basis. In a small number of cases, we may get advance commitments from one or more carriers to transport contracted shipments, for the length of our customer contract.

In the course of providing day-to-day transportation services, our branch employees often identify opportunities for additional logistics services as they become more familiar with our customer’s daily operations and the nuances of its supply chain. We offer a wide range of logistics services on a worldwide basis that reduce or eliminate supply chain inefficiencies. We will analyze the customer’s current transportation rate structures, modes of shipping, and carrier selection. We can evaluate a customer’s core carrier program by establishing a program to measure and monitor key quality standards for those core carriers. We can identify opportunities to consolidate shipments for cost savings. We will suggest ways to improve operating and shipping procedures, and manage claims. We can help customers minimize storage through cross-docking and other flow-through operations. We may also examine the customer’s warehousing and dock procedures. Many of these services are bundled with underlying transportation services and are not typically priced separately. They are usually included as a part of the cost of transportation services provided by us, based on the nature of the customer relationship. In addition to these transportation services, we may supply sourcing, contract warehousing, consulting, 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 business partners with our customers, responsible for a greater portion of their supply chain management. We may serve our customers through specially created teams and through several branches. Our multimodal transportation services are provided to numerous international customers through our worldwide branch network. See Note 1 in the “Notes to Consolidated Financial Statements” included as part of our audited consolidated financial statements for an allocation of our gross revenues from domestic and foreign customers for the years ended December 31, 2005, 2004, and 2003 and our long-lived assets as of December 31, 2005 and 2004, in the United States and in foreign locations.

The table below shows our gross profits by transportation mode for the periods indicated:

Transportation Gross Profits

(in thousands)

	Year Ended December 31,
	2005		2004		2003		2002		2001
Truck(1)	$	666,605	$	501,940	$	401,709	$	361,353	$	347,991
Intermodal		31,392		29,960		28,103		21,111		16,119
Ocean		29,182		20,558		19,027		17,007		16,345
Air		13,321		8,570		4,891		3,068		2,699
Miscellaneous(2)		19,824		14,709		10,973		8,772		7,286
Total	$	760,324	$	575,737	$	464,703	$	411,311	$	390,440

(1) Includes LTL gross profits.

(2) Consists of fee-based transportation management services, customs clearance (Automated Brokerage Interface (ABI) and Automated Clearing House (ACH) capabilities with the Bureau of U.S. Customs and Border Protection), warehousing, and other miscellaneous services.

Transportation services accounted for approximately 87% of our gross profits in 2005 and 2004, and approximately 85% in 2003.

Sourcing

Throughout our 100-year history, we have been in the business of sourcing fresh produce. Much of our logistics expertise can be traced to our significant experience in handling perishable commodities. Because of its perishable nature, produce must be rapidly packaged, carefully transported within tight timetables in temperature controlled equipment, and quickly distributed to replenish high-turnover inventories maintained by retailers, wholesalers, foodservice companies, and restaurants. In most instances, we consolidate individual customers’ produce orders into truckload quantities at the point of origin and arrange for transportation of the truckloads, often to multiple destinations.

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During the past decade, we have actively sought to expand our sourcing customer base by focusing on large multistore grocery retailers, restaurant chains and foodservice providers. Traditionally, grocery retailers have relied mainly on regional or even local purchases from food wholesalers for produce sourcing and store-level distribution. As these retailers have expanded through store openings and industry consolidation, these methods have become inefficient. Our logistics and perishable commodities sourcing expertise can improve the retailers’ produce purchasing, and provide uniform quality from region to region and store to store.

Our sourcing services have expanded to include just-in-time replenishment, commodity management and business analysis. In response to demand and changing market conditions, we introduced our proprietary brand of produce, The Fresh 1^®, which includes a wide range of fruits and vegetables that are uniform in quality and top grade. Since 1998, we have entered into new branded produce programs, including licensing agreements to distribute produce under major national brands. These brands have expanded our market presence and relationships with some of our retail customers. We have also instituted quality assurance and monitoring programs as part of our national brand programs. Our acquisitions of the Foodsource entities in 2005 further expanded our service capabilities in sourcing.

Sourcing accounted for approximately 9% of our gross profits in 2005, 8% of our gross profits in 2004, and approximately 10% in 2003.

Information Services

Information Services is comprised of a subsidiary of C.H. Robinson, T-Chek Systems, Inc. T-Chek’s customers are motor carriers and truck stop chains. T-Chek provides its motor carrier customers with fuel management services, funds transfer, fuel and use tax reporting, driver payroll services, permits, and on-line access to custom-tailored information management reports, all through the use of its proprietary automated systems. These systems enable motor carriers to track equipment, manage fleets, and dictate where and when their drivers purchase fuel. For several companies and truck stop chains, T-Chek captures sales and fuel cost data, provides management information to the seller, and invoices the carrier for fuel, cash advances, and our fee.

Information Services accounted for approximately 4% of our gross profits in 2005 and 5% of our gross profits in 2004 and 2003.

Organization

To keep us close to our customers and markets, we have created and continue to expand a network of 196 offices, which we call “branches.” Our branches are supported by executives and other centralized, shared services. Approximately 11% of our employees are corporate employees who provide these centralized, shared services. Nearly half of the corporate employees are information technology personnel who develop and maintain our proprietary operating system software and our wide area network.

Branch Network

Each branch office is responsible for its own growth and profitability. Our branch salespeople are responsible for developing new business, negotiating and pricing services, receiving and processing service requests from customers, and contracting with carriers to provide the transportation requested. In addition to routine transportation, salespeople are often called upon to handle customers’ unusual, seasonal, and emergency needs. Shipments to be transported by truck are priced at the branch level, and branches cooperate with each other to hire carriers provide transportation. Branches may rely on expertise in other branches when contracting LTL, intermodal, international ocean and air shipments. Multiple branches may also work together to service larger, national accounts where the 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 on the account.

Salespeople in the branches both sell to and service their customers. Sales opportunities are identified through our database, referrals from current customers, leads generated by branch office personnel through knowledge of their local and regional markets, and third party sources such as industry directories. Salespeople are also responsible for recruiting new carriers, who are qualified by our carrier services group to make sure they are properly licensed and insured, and have the resources to provide the necessary level of service on a dependable basis.

Branch Expansion. We expect to continue to open new branch offices. New branch offices are viewed as a long-term contributor to overall company growth. In addition to market opportunity, a major consideration in opening a new branch is whether we have branch salespeople that are ready to manage a new branch. Additional branches are often opened within a

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territory previously served by another branch, such as within major cities, as the volume of business in a particular area warrants opening a separate branch. A modest amount of capital is required to open a new branch, usually involving a lease for a small amount of office space, communications and hardware, and often employee compensation guaranties for a short time. We have also augmented our growth through selective acquisitions.

Branch Employees. Because the quality of our employees is essential to our success, we are highly selective in our hiring. We recruit applicants from across North America, South America, Europe, and Asia. Our applicants typically have college degrees, and some have business experience, although not necessarily within the transportation industry.

Newly hired branch employees go through on-the-job training at the branch level, that emphasizes development of the necessary skills and customer service philosophy to become productive members of a branch team. We expect most new salespeople to start contributing to the success of the branch in a matter of weeks. In addition, each new salesperson attends a national training meeting to further their skills and have the opportunity to develop relationships with employees of other branches.

Employees at the branch level form a team. The team structure is motivated by our incentive compensation system, in which a significant portion of the cash compensation of most branch managers and salespeople is dependent on the profitability of their particular branch or business unit. Branch managers and salespeople who have been employed for at least one complete year are paid a portion of the branch’s earnings for that calendar year, based on a system of “points” awarded to the employees on the basis of their productivity and contributions. Employees can also receive profit sharing contributions that depend on our overall profitability and other factors in our Profit Sharing Plan. In some special circumstances, such as opening new branches, we may guarantee a level of compensation to the branch manager and key salespersons for a short period of time.

All of our managers and certain other employees who have significant responsibilities are eligible to participate in our amended 1997 Omnibus Stock Plan. To promote long-term share ownership, in 2005, 930 employees were awarded a total of 2,394,290 restricted stock units or shares. In 2004, 577 employees were awarded a total of 298,116 restricted stock units or shares. In 2003, 656 employees were awarded a total of 1,732,050 restricted stock units or shares. Employees at all levels, after a qualifying period of employment, are eligible to participate in our Employee Stock Purchase Plan.

Individual salespeople benefit both through the growth and profitability of individual branches and by achieving individual goals. They are motivated by the opportunity to advance in a variety of career paths, including branch management, national sales, and national account management. We have a “promote from within” philosophy, and fill nearly all branch management positions with current employees.

Executive Officers

Under our decentralized business structure, branch managers, while retaining autonomy for their branch performance, receive guidance and support from the executive officers at our central corporate office. Customers, carriers, managers, and employees have direct access to our chief executive officer, John Wiehoff, and all other executive officers. These executives provide training and education, develop new services and applications to be offered to customers, share operations and management guidance, and provide broad market analysis.

The executive are designated annually by the Board of Directors. Below are the names, ages, and positions of the executive officers:

Name	Age	Position
John P. Wiehoff	44	chief executive officer, president and director
James E. Butts	50	vice president
Linda U. Feuss	49	vice president, general counsel and secretary
James P. Lemke	38	vice president, produce
Chad M. Lindbloom	41	vice president and chief financial officer
Thomas K. Mahlke	34	corporate controller
Scott A. Satterlee	37	vice president
Mark A. Walker	48	vice president

John P. Wiehoff has been chief executive officer since May 2002, following a three-year succession process during which he was named president in December 1999. He has been a director of C.H. Robinson since December 2001. He was vice president and chief financial officer from June 1998 to December 1999. Previous positions with the company include treasurer and corporate controller. Prior to joining the company in 1992, he was employed by Arthur Andersen LLP. He holds a Bachelor of Science degree from St. John’s University.

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James E. Butts has been a vice president and officer of C.H. Robinson since April 2002. Previous positions with the company include transportation manager at the Chicago South and Detroit branches. Jim has been with C.H. Robinson since 1978, and holds a Bachelor of Arts degree from Wayne State University.

Linda U. Feuss joined C.H. Robinson in October 2003 as vice president, general counsel and secretary. Before joining the company, she was executive vice president, legal and human resources, for PEMSTAR Inc. Prior to that, she had served as vice president and general counsel at The Pillsbury Company, and associate general counsel of Siemens Corporation. Linda holds a Bachelor of Arts degree from Colgate University and a Juris Doctor from Emory University.

James P. Lemke has been a vice president, produce since January 2003. Prior to that, he served as the vice president and manager of C.H. Robinson’s Corporate Procurement and Distribution Services division. Jim joined the company in 1989. Jim holds a Bachelors of Arts degree in International Relations from the University of Minnesota.

Chad M. Lindbloom has been vice president and chief financial officer since December 1999. From June 1998 until December 1999, he served as corporate controller. Chad joined the company in 1990. Chad holds a Bachelor of Science degree and a Masters of Business Administration from the Carlson School of Management at the University of Minnesota.

Thomas K. Mahlke has been corporate controller of C.H. Robinson since December 1999. Tom joined the company in November 1997 as accounting manager. Prior to that, he was employed as a supervisory senior accountant by Arthur Andersen LLP. Tom holds a Bachelor of Accountancy degree from the University of North Dakota.

Scott A. Satterlee has been a vice president since February 2002. Additional positions with C.H. Robinson include director of operations and manager of the Salt Lake City branch office. Scott joined the company in 1991. Scott holds a Bachelor of Arts degree from the University of St. Thomas.

Mark A. Walker has been a vice president since December 1999. Additional positions with C.H. Robinson include chief information officer from December 1999 to October 2001, president of T-Chek Systems LLC, and president of Payment & Logistics Services LLC. 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.

Employees

As of December 31, 2005, we had a total of 5,776 employees, of whom 5,100 were located in our branch offices. Services such as accounting, information technology, legal, marketing communications, human resource support, credit and claims management are supported centrally.

Customers and Marketing

We 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 full range of logistics services. During 2005, we served over 20,500 customers worldwide, ranging from Fortune 100 companies to small businesses in a wide variety of industries. During 2005, no customer accounted for more than 6.5% of gross revenues or 3.3% of gross profits. In recent years, we have grown by adding new customers and by increasing our volumes with, and providing more services to, our existing customers.

We believe that our decentralized structure enables our salespeople to better serve our customers by developing a broad knowledge of logistics and local and regional market conditions, as well as the specific logistics issues facing individual customers. With the guidance of experienced branch managers (who have an average tenure of 11 years with us), branches are given significant latitude to pursue opportunities and to commit our resources to serve our customers.

Branches seek additional business from existing customers and pursue new customers based on their knowledge of local markets and the range and value of logistics services that we can provide. We have also expanded our national sales and marketing support to enhance branch sales capabilities. Increasingly, branches call on our executives, our global sales staff and a central logistics group to support them in the pursuit of multinational corporations and other companies with more complex logistics requirements.

Relationships with Carriers

We continually work on establishing relationships with good carriers to assure dependable services, favorable pricing, and carrier availability during peak shipping periods and periods when demand for transportation equipment is greater than the supply. To strengthen and maintain our relationships with carriers, our salespeople regularly communicate with carriers

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serving their region and try to assist them by increasing their equipment utilization, reducing their empty miles, and repositioning their equipment. To make it easier for carriers to work with us, we have a policy of prompt payment and offer payment within 48 hours in exchange for a discount.

As of December 31, 2005, we had qualified approximately 40,000 carriers worldwide, of which the vast majority are motor carriers. These carriers provide access to temperature controlled vans, dry vans and flatbeds. These 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 any one carrier. Our largest truckload carrier was less than 2% of our total cost of transportation in 2005. We qualify each carrier to make sure it is properly licensed and insured, has an adequate safety rating, and that it has the resources to provide the necessary level of service on a dependable basis. Our motor carrier contracts require that the carrier issue invoices only to and accept payment solely from us, and allow us to withhold payment to satisfy previous claims or shortages. To fulfill regulatory requirements, our motor carrier contracts commit to a series of three shipments and an initial transportation rate. Our standard contracts do not include volume commitments, and the initial contract rate is modified each time we confirm an individual shipment with a carrier.

As of December 31, 2005, we also had intermodal marketing contracts with railroads, including all of the major North American railroads, giving us access to additional trailers and containers. 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.

Because we don’t own any transportation equipment or employ the people directly involved with the delivery of our customers’ freight, these relationships are critical to our success and we rely on them to provide us with information regarding the status of shipments during transit and upon delivery. Delays in these communications could cause us to record transactions late because we recognize revenue when we know our services are completed. We have developed systems and controls to make these status updates as efficient and timely as possible for us and the carrier.

Competition

The transportation services industry is highly competitive and fragmented. We compete against a large number of other non-asset based logistics companies, asset-based logistics companies, third party freight brokers, carriers offering logistics services, and freight forwarders. We also compete against carriers’ internal sales forces and shippers’ own transportation departments. We also buy and sell transportation services from and to companies with which we compete.

We often compete with respect to price, scope of services, or a combination thereof, but believe that our most significant competitive advantages are:

• our branch network, which enables our salespersons to gain broad knowledge about individual customers, carriers and the local and regional markets they serve, and to provide superior customer service based on that knowledge,

• our 40,000 carrier relationships,

• our size, relative to other providers. Because of the large number of transactions we do annually, 4.4 million in 2005, we have greater opportunity to efficiently match available capacity with customer needs. Our scale is an advantage in attracting more carriers, which in turn enables us to service our customers more efficiently and earn more business,

• our dedicated employees and entrepreneurial culture, which are supported by our performance-based compensation system,

• our proprietary information systems,

• our ability to provide a broad range of logistics services, and

• our ability to provide door-to-door services on a worldwide basis.

Communications and Information Systems

Our information systems are essential to our ability to efficiently communicate, service our customers and carriers, and manage our business. Our proprietary information systems help our employees efficiently manage more than 4.4 million shipments annually, 20,500 customer relationships, and 40,000 carrier relationships. Our employees are linked with each other and with our customers and our carriers by telephone, fax, Internet, e-mail, and/or EDI to communicate shipment requirements and availability, and to confirm and bill orders. Through our Internet sites CHRWonline.com and

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CHRWtrucks.com, customers and carriers can contract shipments or equipment and track and trace shipments, including delivery confirmation. Customers and carriers also have access to other information in our operating systems through the Internet.

Our branch employees use our information systems to identify freight matching opportunities, communicate and coordinate activity with other branches, and “cross-cover” or find equipment for other branches’ freight. Our systems help our salespeople service customer orders, select the optimal modes of transportation, build and consolidate shipments, and select routes, all based on customer-specific service parameters. Our systems also make shipment data visible to the entire sales team as well as customers and carriers, enabling our salespeople to select carriers and track shipments in progress. Our systems automatically provide visible alerts to arising problems. Our systems use data captured from daily transactions to generate various management reports that are available to our customers. These reports provide them with information on traffic patterns, product mix, and production schedules, and support analysis of their own customer base, transportation expenditure trends, and the impact on out-of-route costs.

Government Regulation

The transportation industry has been subject to legislative and regulatory changes that have affected the economics of the industry by requiring changes in operating practices or influencing the demand for, and cost of providing, transportation services. We do not believe that these new regulations have had a material impact on our business and we cannot predict the effect, if any, that future legislative and regulatory changes may have on the transportation industry.

We are subject to licensing and regulation as a transportation broker and are licensed by the U.S. Department of Transportation (“DOT”) to arrange for the transportation of property by motor vehicle. The DOT prescribes qualifications for acting in this capacity, including certain surety bonding requirements. Under certain circumstances, one of our subsidiary companies provides limited motor carrier transportation services that require registration with the DOT and compliance with certain economic regulations administered by the DOT, including a requirement to maintain insurance coverage in minimum prescribed amounts. We are also subject to regulation by the Federal Maritime Commission as an ocean freight forwarder and we maintain a non-vessel operating common carrier bond. We operate as an indirect air cargo carrier subject to economic regulation by the DOT and provide customs brokerage services as a customs broker under a license issued 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. Other sourcing and distribution activities may be subject to various federal and state food and drug statutes and regulations. Our T-Chek operations are subject to federal and state money transfer regulations under the USA Patriot Act of 2001.

Although Congress enacted legislation in 1994 that substantially preempts the authority of states to exercise economic regulation of motor carriers and brokers of freight, some shipments for which we arrange transportation may be subject to licensing, registration or permit requirements. We generally rely on the carrier transporting the shipment to ensure compliance with these types of requirements. We, along with the carriers that we rely on in arranging transportation services for our customers, are also subject to a variety of federal and state safety and environmental regulations. Although compliance with the regulations governing licensees in these areas has not had a materially adverse effect on our operations or 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.

Risk Management and Insurance

We require all motor carriers we work with to carry at least $750,000 in general liability insurance and $25,000 in cargo insurance. Many carriers carry insurance limits exceeding these minimums. Railroads, which are generally self-insured, provide limited common carrier liability protection, generally up to $250,000 per shipment.

We do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding, ocean transportation, and air freight businesses. We offer our customers the option to purchase ocean marine cargo coverage to insure goods in transit. When we agree to store goods for our customers for longer terms, we provide limited warehouseman’s coverage to our customers and contract for warehousing services from companies that provide us the same degree of coverage.

We maintain a broad cargo liability insurance policy to protect us against catastrophic losses that may not be recovered from the responsible carrier. We also carry various liability insurance policies, including auto and general liability, with a $100 million umbrella. Our contingent auto liability coverage has a retention of $5 million per incident.

Agricultural chemicals used on agricultural commodities intended for human consumption are subject to various approvals, and the commodities themselves are subject to regulations on cleanliness and contamination. Concern about

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particular chemicals and alleged contamination can lead to product recalls, and tort claims may be brought by consumers of allegedly affected produce. As a seller of produce, we may, under certain circumstances, have legal responsibility arising from produce sales. We carry product liability coverage under our general liability and umbrella policies to cover this type of risk. In addition, in the event of a recall, we may be required to bear the cost of repurchasing, transporting, and destroying any allegedly contaminated product, which is generally not insured. Any recall or allegation of contamination could affect our reputation, particularly of our The Fresh 1^® and other licensed brands. Loss due to spoilage (including the need for disposal) is also a routine part of the sourcing business.

Cautionary Statement Relevant to Forward-Looking Information

This 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 this report and other documents incorporated by reference contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding our current assumptions about future financial performance; the continuation of historical trends; the sufficiency of our cash balances and cash generated from operating activities for future liquidity and capital resource needs; the effects, benefits or other aspects of current or future acquisitions or dispositions; the expected impact of changes in accounting policies on our results of operations, financial condition or cash flows; the results, timing, outcome or effect of litigation and our intentions or expectations of prevailing with respect thereto; anticipated problems and our plans for future operations; and the economy in general or the future of the third party logistics industry, all of which are subject to various risks and uncertainties.

When used in this Form 10-K and in our other filings with the Securities and Exchange Commission, in our press releases, presentations to securities analysts or investors, in oral statements 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 such forward-looking statements. However, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements.

We caution that these statements by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including, but not limited to such factors as market demand and pressures on the pricing for our services; changing market conditions, competition and growth rates within the third party logistics industry; availability of truck capacity or alternative means of transporting freight, and changes in relationships with existing truck, rail, ocean and air carriers; changes in our customer base due to possible consolidation among our customers; our ability to integrate the operations of acquired companies with our historic operations successfully; changes in accounting policies; risks associated with litigation and insurance coverage; risks associated with operations outside of the U.S.; changing economic conditions such as general economic slowdown, decreased consumer confidence, fuel shortages and the impact of war on the economy; and other risks and uncertainties, including those described below.

You should consider carefully the following cautionary statements if you own our common stock or are planning to buy our common stock. We intend to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) by providing this discussion. We are not undertaking to address or update each factor in future filings or communications regarding our business or results except to the extent required by law.

ITEM 1A. Risk Factors

Demand for our services may decrease during an economic recession. The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of our customers, fuel shortages, price increases by carriers, interest rate fluctuations, and other economic factors beyond our control. Carriers can be expected to charge higher prices to cover higher operating expenses, and our net revenues and income from operations may decrease if we are unable to pass through to our customers the full amount of higher transportation costs. If economic recession or a downturn in our customers’ business cycles causes a reduction in the volume of freight shipped by those customers, particularly among certain national retailers or in the food, beverage. Paper, or printing industries, our operating results could also be adversely affected.

We depend upon others to provide equipment and services. We do not own or control the transportation assets that deliver our customers freight and we do not employ the people directly involved in delivering the 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. This reliance could cause delays in reporting certain events, including recognizing revenue and claims. If we are unable to secure sufficient equipment or other transportation services to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. Many of these risks are beyond our control including:

• equipment shortages in the transportation industry, particularly among truckload carriers,

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• interruptions in service or stoppages in transportation as a result of labor disputes,

• changes in regulations impacting transportation, and

• unanticipated changes in transportation rates.

Our international business raises additional difficulties. 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 economic and political conditions and in governmental policies,

• changes in compliance with international and domestic laws and regulations,

• wars, civil unrest, acts of terrorism and other conflicts,

• natural disasters,

• changes in tariffs, trade restrictions, trade agreements and taxations,

• difficulties in managing or overseeing foreign operations,

• 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 intellectual property rights 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 our operations in that region.

As we expand our business in foreign countries we will expose the Company to increased risk of loss from foreign currency fluctuations and exchange controls as well as longer accounts receivable payment cycles. We have limited control over these risks, and if we do not correctly anticipate changes in international economic and political conditions, we may not alter our business practices in time to avoid adverse effects.

Our ability to hire additional people is important to the continued growth of our business. Our continued success depends upon our ability to attract and retain a large group of motivated salespersons and other logistics professionals. Our growth may be limited if we cannot recruit and retain a sufficient number of people. We cannot guarantee that we will be able to continue to hire and retain a sufficient number of qualified personnel. Because of our comprehensive employee training program, our employees are attractive targets for new and existing competitors. Our rapid expansion of operations has placed added demands on our management. Continued expansion depends in large part on our ability to develop successful employees into managers.

We face substantial industry competition. Competition in the transportation services industry is intense and broad based. We compete against other non-asset based logistics companies as well as logistics companies that own their own equipment, third party freight brokers, Internet matching services and Internet freight brokers, and carriers offering logistics services. We also compete against carriers’ internal sales forces and shippers’ transportation departments. We often buy and sell transportation services from and to many of our competitors. Increased competition could create downward pressure on freight rates, and continued rate pressure may adversely affect our gross profit 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 is dependent on our systems continuing to operate and to meet the changing needs of our customers. We are reliant on our technology staff to successfully implement changes to our operating systems in an efficient manner. Computer viruses could cause an interruption to the availability of our systems. Unauthorized access to our systems with malicious intent could result in the theft of proprietary information and in systems outages. An unplanned systems outage or unauthorized access to our systems could materially and adversely affect our business.

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Because we manage our business on a decentralized basis, our operations may be materially adversely affected by inconsistent management practices. We manage our business on a decentralized basis through a network of branch offices throughout North America, South America, Europe and Asia, supported by executives and services in a central corporate office, with branch management retaining responsibility for day-to-day operations, profitability, personnel decisions and the growth of the business in their branch. Our decentralized operating strategy can make it difficult for us to implement strategic decisions and coordinated procedures throughout our global operations. In addition, certain of our branches operate with management, sales and support personnel that may be insufficient to support growth in their respective branch without significant central oversight and coordination. Our decentralized operating strategy could result in inconsistent management practices and materially and adversely affect our overall 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 seasonal pattern as customers reduce shipments during and after the winter holiday season. In recent years, our operating income and earnings have been lower in the first quarter than in the other three quarters. Although seasonal changes in 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 cannot guarantee that it will not adversely impact us in the future.

We are subject to claims arising from our transportation operations. We use the services of thousands of transportation companies and their drivers in connection with our transportation operations. From time to time, these drivers are involved in accidents and the carrier may not have adequate insurance coverage. Although these drivers are not our employees and all of these drivers are employees, owner operators or independent contractors working for carriers, 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 amount of insurance coverage, or may not be covered by insurance at all. In addition, our auto liability policy has a retention of $5 million per incident. A material increase in the frequency or severity of accidents, liability claims or workers’ compensation claims, or unfavorable resolutions of claims, could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability.

Our sourcing business is dependent upon the supply and price of fresh produce. The supply and price of fresh produce is affected by government food safety regulation, growing conditions (such as drought, insects and disease), and other conditions over which we have no control. Commodity prices can be affected by shortages or overproduction and are often highly volatile. If we are unable to secure fresh produce to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently.

Sourcing and reselling fresh produce exposes us to possible product liability. Agricultural chemicals used on fresh produce are subject to various approvals, and the commodities themselves are subject to regulations on cleanliness and contamination. Product recalls in the produce industry have been caused by concern about particular chemicals and alleged contamination, often leading to lawsuits brought by consumers of allegedly affected produce. Because we sell produce, we may have legal responsibility arising from the sale. While we are insured for up to $100 million for product liability claims, settlement of class action claims is often costly, and we cannot guarantee that our liability coverage will be adequate and will continue to be available. If we have to recall produce, we may be required to bear the cost of repurchasing, transporting and destroying any allegedly contaminated product, which our insurance does not cover. Any recall or allegation of contamination could affect our reputation, particularly of our produce brand: The Fresh 1^® or one of our other licensed branded products. Loss due to spoilage (including the need for disposal) is also a routine part of the sourcing business.

Our business depends upon compliance with numerous government regulations. We are licensed by the U.S. Department of Transportation as a broker authorized to arrange for the transportation of general commodities by motor vehicle. We must comply with certain insurance and surety bond requirements to act in this capacity. We are also licensed by the Federal Maritime Commission as an ocean freight forwarder, which requires us to maintain a non-vessel operating common carrier bond. We are also licensed 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. Our failure to comply with the laws and regulations applicable to entities holding these licenses could materially and adversely affect our results of operations or financial condition.

Legislative or regulatory changes can affect the economics of the transportation industry by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services. As part of our logistics services, we operate leased warehouse facilities. Our operations at these facilities include both warehousing and distribution services, and we are subject to various federal and state environmental, work safety and hazardous materials regulations. We may experience an increase in operating costs, such as costs for security, as a result of governmental regulations that have been and will 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 costs on to our customers in the form of rate increases or surcharges.

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We cannot predict what impact future regulations may have on our business. Our failure to maintain required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation of our operating permits and licenses.

We derive a significant portion of our gross revenues and gross profit from our largest clients. The sudden loss of many of our major clients could materially and adversely 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 identify suitable candidates, we cannot guarantee that we will make acquisitions or investments on commercially acceptable terms, if at all. If we acquire a company, we may have difficulty integrating its businesses, products, services, technologies and personnel into our operations. Acquired companies or operations may have unexpected liabilities, and we may face challenges in retaining significant customers of acquired companies. These difficulties could disrupt our ongoing business, distract our management and workforce, increase our expenses and adversely affect our results of operations. In addition, we may incur debt or be required to issue equity securities to pay for future acquisitions or investments. The issuance of any equity securities could be dilutive to our stockholders.

Our growth and profitability may not continue, which may result in a decrease in our stock price. Historically, our long-term growth objective has been 15% for gross profits, operating income, and earnings per share. There can be no assurance that our long-term growth objective will be achieved or that we will be able to effectively adapt our management, administrative and operational systems to respond to any future growth. Our operating margins could be adversely affected by future changes in and expansion of our business or by changes in economic or political conditions. Slower or less profitable growth or losses could adversely affect our stock price.

Investor Information

We were reincorporated in Delaware in 1997 as the successor to a business existing, in various legal forms, since 1905. Our corporate office is located at 8100 Mitchell Road, Eden Prairie, Minnesota 55344-2248, 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 the Securities Exchange Act of 1934 are available free of charge through our website (www.chrobinson.com) as soon as reasonably practicable after we electronically file the material with the Securities and Exchange Commission.

ITEM 2. PROPERTIES

We lease approximately 67,000 square feet of office space in Eden Prairie, Minnesota as our corporate headquarters. Our corporate headquarters lease expires in 2014.

All but one of our branch offices are leased from third parties under leases with initial terms ranging from three to ten years. However, we do own the location in Chicago listed below. Our branch offices range in space from 1,000 to 80,000 square feet. The following table lists our largest U.S. locations:

City/State	Approximate Square Feet
Eden Prairie, MN	98,000
Chicago, IL	80,000
Coralville, IA	19,182
Southfield, MI	18,464
Chicago, IL	14,192
Monterrey, CA	12,712
Cordova, TN	11,617
Willowbrook, IL	11,352
Oak Brook, IL	10,749
Los Angeles, CA	10,695
Atlanta, GA	10,693
Elk Grove Village, IL	10,063
West Deptford, NJ	10,046
Phoenix, AZ	10,000
Ankeny, IA	9,196
Tampa, FL	8,721
Overland Park, KS	8,548
Plano, TX	8,276
Paulsboro, NJ	7,979
Knoxville, TN	7,733
Brooklyn Center, MN	7,615
Grand Rapids, MI	7,074

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We also lease approximately 312,000 square feet of warehouse space throughout the United States. The following table lists our largest warehouses:

City/State	Approximate Square Feet
Bollingbrook, IL	139,000
Rochester, NY	66,500
Medley, FL	53,500
Vancouver, WA	42,700

We consider our current office spaces and warehouse facilities adequate for our current level of operations. We have not had difficulty in obtaining sufficient office space and believe we can renew existing leases or relocate branches to new offices as leases expire.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are involved in litigation arising out of our employment relationships. As first reported in our Form 10-Q for the quarter ended September 30, 2002, we were named as a defendant in a lawsuit filed on October 2, 2002, in the United States District Court for the District of Minnesota by a number of our present and former female employees. The lawsuit alleged a hostile working environment, unequal pay, promotions and opportunities for women and failure to pay overtime. The plaintiffs sought unspecified monetary and non-monetary damages and class action certification. On March 31, 2005, the judge issued an order denying class certification for the hostile working environment claims, and allowing class certification for the claims of gender discrimination in pay and promotion. This is a procedural step, and we continue to deny all allegations and vigorously defend the suits. The judge also granted our motions for summary judgment as to the hostile working environment claims of ten of the named plaintiffs, and dismissed those claims. In addition, we have insurance coverage for some of the claims asserted in the lawsuit. Currently, the amount of any loss is not expected to be material to us; however, unfavorable developments could have a material adverse effect on our consolidated financial statements. Trial of the class claims is scheduled for April, 2006.

Also as first reported in our Form 10-Q for the quarter ended September 30, 2002, on November 7, 2002, we were named as a defendant in a lawsuit filed in the United States District Court for the District of Minnesota by former employees of the company. The lawsuit alleges systematic failure by the company to pay for overtime hours worked by our male employees under the federal Fair Labor Standards Act. The suit seeks payment of the overtime wages earned, as well as double damages and other relief, on behalf of the plaintiffs and potential collective members who join in the lawsuit. We deny all allegations and are vigorously defending the suit. Currently, the amount of any possible loss to the company cannot be estimated; however, an unfavorable result could have a material adverse effect on our financial condition, results of operations, and cash flows.

We are not otherwise subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, none of which is expected to have a material adverse effect on our financial condition, results of operations, or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On October 14, 2005, the shareholders approved an amendment which sought approval for a 2-for-1 stock split of the company’s Common Stock, effective October 14, 2005, by a vote as follows: 80,901,779 votes “For”, 395,681 votes “Against”, 17,807 votes “Abstained”, and 0 “Broker Non-Votes.”

At the meeting, shareholders approved an amendment which sought to increase the number of authorized shares of Common Stock from 130,000,000 shares to 480,000,000 shares, by a vote as follows: 57,802,828 votes “For”, 23,451,076 votes “Against”, 61,363 votes “Abstained”, and 0 “Broker Non-Votes”.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Our Common Stock began trading on The NASDAQ National Market under the symbol “CHRW” on October 15, 1997. On October 14, 2005, our shareholders approved a two-for-one stock split, effective at the end of the business the same day. All share and per share amounts in this Form 10-K have been restated to reflect our stock split.

The following table sets forth, for the periods indicated, the high and low sales prices of our Common Stock, as quoted on the NASDAQ National Market.

2005	High		Low
Fourth Quarter	$	41.70	$	30.15
Third Quarter		32.17		28.38
Second Quarter		29.81		23.60
First Quarter		28.05		25.21

2004	High		Low
Fourth Quarter	$	28.20	$	22.79
Third Quarter		23.38		20.57
Second Quarter		23.09		19.44
First Quarter		20.77		18.30

On March 6, 2006, the closing sales price per share of our Common Stock as quoted on the NASDAQ National Market was $44.89 per share. On March 6, 2006, there were approximately 188 holders of record and approximately 14,900 beneficial owners of our Common Stock.

During 1999, the Board of Directors authorized a second stock repurchase plan, allowing for the repurchase of 8,000,000 shares. We purchased approximately 1,240,000 shares of our Common Stock in 2005 under this plan. There are approximately 5,148,000 shares remaining for purchase under this plan. We intend to fund any future repurchases with internally generated funds.

We declared quarterly dividends during 2004 for an aggregate of $0.255 per share, and quarterly dividends during 2005 for an aggregate of $.355 per share. We have declared a quarterly dividend of $.13 per share payable to shareholders of record as of March 10, 2006, payable on April 3, 2006. Our declaration of dividends 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 that the Board of Directors will declare or continue to pay dividends on the shares of Common Stock in the future.

Participants in the Robinson Companies Retirement Plan may, among other investment options, elect to invest their contributions and our matching contributions in shares of our Common Stock. When plan participants elect to invest plan contributions in shares of our Common Stock, the plan trustee, American Express, purchases shares of our Common Stock on the open market and holds those shares beneficially for plan participants. During the quarter ended December 31, 2005, plan participants elected to invest plan contributions in a total of approximately 28,000 shares of our Common Stock having an approximate aggregate purchase price of $754,000. Because participants may elect to invest plan contributions in shares of our Common Stock, the plan is required to be registered under the Securities Act of 1933. There is no exemption from registration under the Securities Act available for the plan. On November 12, 2003, we registered the plan pursuant to a Form S-8 filed with the Securities and Exchange Commission.

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The following table provides information about purchases by the company during the quarter ended December 31, 2005 of equity securities that are registered by the company pursuant to Section 12 of the Exchange Act:

Period	Total Number of Shares (or Units) Purchased (1)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2)	(Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
10/01/05-10/31/05	4,000	$	35.02	4,000	5,470,000
11/01/05- 11/30/05	156,000		38.84	156,000	5,314,000
12/01/05- 12/31/05	168,000		38.32	168,000	5,146,000
Total:	328,000	$	38.50	328,000	5,146,000

(1) We repurchased an aggregate of 328,000 shares of our common stock pursuant to the repurchase program that was approved by our Board of Directors in February 1999 (the “Program”).

(2) Our board of directors approved the repurchase by us of up to an aggregate of 8,000,000 shares of our common stock pursuant to the Program. Unless terminated earlier by resolution of our board of directors, the Program will expire when we have repurchased all shares authorized for repurchase thereunder.

ITEM 6. SELECTED FINANCIAL DATA

Selected consolidated financial and operating data on page 34 of the Annual Report is incorporated in this Form 10-K by reference. This information is also included in Exhibit 13 to this Form 10-K, as filed with the SEC.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis on pages 35 through 47 of the Annual Report is incorporated in this Form 10-K by reference. This section is also included in Exhibit 13 to this Form 10-K, as filed with the SEC.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosure about Market Risk on page 47 of the Annual Report is incorporated in this Form 10-K by reference. This section is also included in Exhibit 13 to this Form 10-K, as filed with the SEC.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements and notes thereto on pages 48 through 68 of the Annual Report are incorporated in this Form 10-K by reference. These financial statements are also included in Exhibit 13 to this Form 10-K, as filed with the SEC.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

During 2004 and 2005, and through the date of this report, there were no disagreements with the independent public accountants on accounting principles or practices, financial statement disclosures, or auditing scope or procedures.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness 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 by this report, our disclosure controls and procedures were effective.

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(b) Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective 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 an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2005.

During the third quarter, we acquired two freight forwarding businesses in separate transactions, Hirdes Group Worldwide (“Hirdes”), and Bussini Transport S.r.l. (“Bussini”), which were not included in our assessment of the effectiveness of our internal control over financial reporting. As a result, management’s conclusion regarding the effectiveness of our internal control over financial reporting does not extend to these companies.

Our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c) Changes in Internal Controls Over Financial Reporting

During the fourth quarter, we implemented a new human resources and payroll software package. This package is licensed by a well known software vendor and is used to process payroll for U.S. and Canadian employees. There have not been any other changes to the company’s internal control over financial reporting during the fiscal year, to which this report relates, that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to our Board of Directors contained under the heading “Election of Directors,” and information contained under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement are incorporated in this Form 10-K by reference. Information with 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 other company employees performing similar functions. This code of ethics, which is one of several policies within our Corporate Compliance Program, is posted on the Investors page of our website at www.chrobinson.com under the caption “Corporate Compliance Program Reference Tool”.

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 by posting such information on our website, at the web address specified above.

ITEM 11. EXECUTIVE COMPENSATION

The information contained under the heading “Executive Compensation” in the Proxy Statement (except for the information set forth under the subcaption “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 RELATED STOCKHOLDER MATTERS

(a) Equity Compensation Plans

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The following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2005:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved by security holders1	6,656,634	$	12.41	8,663,075
Equity compensation plans not approved by security holders	—		—	—
Total	6,656,634	$	12.41	8,663,075

1 Includes stock available for issuance under our Directors’ Stock Plan and our Employee Stock Purchase Plan, as well as options and restricted stock granted and shares that may become subject of future awards under our 1997 Omnibus Stock Plan. Specifically, 57,086 shares remain available under our Directors’ Stock Plan and 5,934,799 shares remain available under our Employee Stock Purchase Plan. Under our 1997 Omnibus Stock Plan, 2,671,190 shares may become subject of future awards in the form of stock option grants or the issuance of restricted stock.

(b) Security Ownership

The information contained under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement is incorporated in this Form 10-K by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information contained under the heading “Proposal Two: Selection of Independent Auditors” in the Proxy Statement is incorporated in this Form 10-K by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1) Financial Statements.

Our consolidated financial statements listed below on pages 48 through 65 of the Annual Report are incorporated in this Form 10-K by reference. These financial statements are included in Exhibit 13 to this Form 10-K, as filed with the SEC.

Consolidated Balance Sheets as of December 31, 2005 and 2004

Consolidated Statements of Operations for the years ended December 31, 2005, 2004, and 2003

Consolidated Statements of Stockholders’ Investment for the years ended December 31, 2005, 2004, and 2003

Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004, and 2003

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules.

Schedule II. Valuation and Qualifying Accounts is included at the end of this Form 10-K. All schedules, other than Schedule II, are omitted because of the absence of the conditions under which they are required or because the information required is shown in the consolidated financial statements or the notes thereto.

(3) Index to Exhibits

See Exhibit Index on page 23 for a description of the documents that are filed as Exhibits to this report on Form 10-K or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical referencing the SEC filing which included the document. We will furnish to a security holder upon request a copy of any Exhibit at cost.

18

(b) Reports on Form 8-K

The following reports on Form 8-K were filed during the last quarter of the period covered by this report:

Report on Form 8-K, dated October 25, 2005, filed in connection with our release of earnings for the three months ended September 30, 2005.

(c) See Item 15(a)(3) above.

(d) See Item 15(a)(2) above.

19

SIGNATURES

Pursuant 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 its behalf by the undersigned, thereunto duly authorized, in the City of Eden Prairie, State of Minnesota, on March 16, 2006.

C.H. ROBINSON WORLDWIDE, INC.
By:	/s/ Linda U. Feuss
	Linda U. Feuss
	Vice President, General Counsel and Secretary

Pursuant 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 and in the capacities indicated on March 16, 2006.

Signature	Title
/s/ John P. Wiehoff John P. Wiehoff	Chief Executive Officer, President and Director (Principal Executive Officer)
/s/ Chad M. Lindbloom Chad M. Lindbloom	Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ Thomas K. Mahlke Thomas K. Mahlke	Corporate Controller (Principal Accounting Officer)
* D.R. Verdoorn	Chairman of the Board
* ReBecca Koenig Roloff	Director
* Robert Ezrilov	Director
* Gerald A. Schwalbach	Director
* Wayne M. Fortun	Director
* Brian P. Short	Director
* Michael W. Wickham	Director
* Kenneth E Keiser	Director

* By:	/s/ Linda U. Feuss
	Linda U. Feuss
	Attorney-in-Fact

20

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

C.H. Robinson Worldwide, Inc.

Eden Prairie, Minnesota

We have audited the consolidated financial statements of C.H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, and have issued our reports thereon dated March 16, 2006; such consolidated financial statements and reports are included in your 2005 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

Minneapolis, Minnesota

March 16, 2006

21

Schedule II. Valuation and Qualifying Accounts

Allowance for Doubtful Accounts

The transactions in the allowance for doubtful accounts for the years ended December 31, 2005, 2004, and 2003 were as follows (in thousands):

	December 31, 2005			December 31, 2004			December 31, 2003
Balance, beginning of year	$	25,204		$	23,569		$	24,155
Provision		8,878			8,823			5,180
Write-offs		(4,643	)		(7,188	)		(5,766	)
Balance, end of year	$	29,439		$	25,204		$	23,569

22

Index to Exhibits

Number	Description
3.1	Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-33731)
3.2	Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1, 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’s Registration Statement on Form S-1, 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, Registration No. 333-33731)
4.2	Rights Agreement between the Company and Wells Fargo Bank Minnesota, National Association (formerly Norwest Bank Minnesota, N.A.) (Incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-33731)
†10.1	1997 Omnibus Stock Plan (as amended May 1, 2001) (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001)
†10.2	Form of Stock Option Agreement (Incorporated by reference to Exhibit 10.22 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-33731)
†10.3	C.H. Robinson Worldwide, Inc. Directors’ Stock Plan (Incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998)
*10.4	Form of Management Employment and Noncompetition Agreement
10.5	Form of Management Confidentiality and Noncompetition Agreement (Incorporated by reference to Exhibit 10.21 to the Registrant’s Registration Statement on Form S-1, Registration No. 333-33731)
†10.6	Management Bonus Plan (Incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999)
10.7	Asset Purchase Agreement dated November 18, 1999, by and among the Company, C.H. Robinson Company, American Backhaulers, Inc., Paul L. Loeb, the Paul L. Loeb Family Trust and the Jodi Sue Loeb Family Trust (Incorporated by reference to Exhibit 2 to the Registrant’s Current Report on Form 8-K dated December 28, 1999)
†10.8	Robinson Companies Nonqualified Deferred Compensation Plan (Incorporated by reference to Exhibit 4 to the Registrant’s Registration Statement on Form S-8, Registration No. 333-47080)
10.9	Robinson Companies Nonqualified Deferred Compensation Plan Trust Agreement, dated January 1, 2001, by and between C. H. Robinson Worldwide, Inc. and American Express Trust Company (Incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000)
†10.10	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 the year ended December 31, 2000)
†*10.11	Form of Restricted Stock Award for U.S. Managerial Employees
*13	Selected pages of the Company’s Annual Report to Stockholders for the year ended December 31, 2005
*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

† 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 Report

* Filed herewith

23

EX-10.4

Exhibit 10.4

C. H. ROBINSON WORLDWIDE, INC.

and Subsidiaries

MANAGEMENT-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 (“Employer”) and                                          (“Key Employee”).

WHEREAS, Key Employee is currently employed by Employer in a position which both the Employer and Key Employee agree is of critical importance to the operation of Employer’s business; and

WHEREAS, as a condition of employment, Key Employee agrees to be bound by and conduct himself in accordance with this Agreement.

NOW, THEREFORE, in consideration of the mutual obligations incurred and benefits obtained hereunder, the sufficiency of which is hereby acknowledged, Employer and Key Employee agree as follows:

1. Employment. Employer hereby employs Key Employee, and Key Employee accepts such employment and agrees to perform services for 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 and shall remain in full force and effect until terminated in accordance with Section 6. Upon termination, Key Employee shall remain obligated to comply with all of the post-employment obligations contained in the Agreement, including, but not limited to, the restrictive covenants contained in Section 7 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 Key Employee’s full time, attention and efforts to the business and affairs of Employer during the term of Key Employee’s employment. Key Employee hereby confirms that Key Employee is under no contractual commitments inconsistent with Key Employee’s obligations set forth in this Agreement and that, during the term of this Agreement, Key Employee will not render or perform any services for any other corporation, firm, entity, or person that are inconsistent with the provisions of this Agreement or that would otherwise impair Key Employee’s ability to perform Key Employee’s duties hereunder.

4. Compensation.

4.01 Base Salary. As compensation for all services to be rendered by Key Employee under this Agreement, Employer shall pay to Key Employee an annualized salary which shall be set on an annual basis in accordance with Employer’s standard practices and procedures. Key Employee’s salary shall be paid in accordance with Employer’s normal payroll procedures and policies, as such procedures and policies may be 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 sole discretion of Employer’s management or the Compensation Committee of the Board of Directors of the Company, if applicable.

4.03 Participation in Benefits. During the term of Key Employee’s employment by Employer, Key Employee shall be entitled to participate in 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 subject to the terms of the applicable plans, as the same may be amended from time to time. Employer does not guarantee the adoption or continuance of any particular employee benefit plan during Key Employee’s employment, and nothing in this Agreement is intended to, or shall in any way restrict the right of Employer, to amend, modify or terminate any of its benefit plans during the term of Key Employee’s employment.

4.04 Equity Grants. Key Employee shall be eligible to participate in Employer’s 1997 Omnibus Stock Plan and any successor plans. Grants made under Employer’s 1997 Omnibus Stock Plan and any successor plans are made in the sole discretion of Employer. The nature and amount of any equity grants made by Employer to Key Employee shall be determined in the sole discretion of Employer’s management or the Compensation Committee of the Board of Directors of the Company, if applicable. The terms and conditions of Key Employee’s entitlement to any equity compensation shall be determined by the terms of the equity grant.

4.05 Expenses. In accordance with Employer’s normal policies for expense reimbursement, Employer will reimburse Key Employee for all reasonable and necessary expenses incurred by Key Employee in the performance of Key Employee’s duties under this Agreement, subject to 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’s performance of his obligations hereunder, Key Employee agrees that he shall comply with all of the applicable policies, 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 Key Employee’s death, or in the event of Key Employee’s total disability which results in Key Employee’s inability to perform the essential functions of Key Employee’s position with or without reasonable accommodation, provided Key Employee has exhausted Key Employee’s entitlement to any applicable leave, 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 the event Employer shall determine, in its sole discretion, that there is “cause” to terminate Key Employee’s employment, included but not limited to any of the following:

(i) Key Employee’s material breach of any contractual obligation to Employer under the terms of this Agreement or any other agreement between Key Employee and Employer, or of any fiduciary duty to Employer;

(ii) Key Employee’s indictment on 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 to Employer’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, or Key Employee’s failure to perform the assigned duties of his position at a level of individual performance adequate to Employer; provided that, Key Employee shall have thirty (30) days to cure any such lack of commitment 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 for any reason.

6.04 Termination by Key Employee. Key Employee may terminate this Agreement at any time by giving fifteen (15) days written notice thereof to Employer. Upon notice of termination by Key Employee, Employer may at its option elect to have Key Employee cease to provide services 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, 6.03 or 6.04, Key Employee shall not be entitled to receive any additional compensation under this Agreement after the effective date of such termination.

B. Notwithstanding any other provision in this Agreement, should Key Employee’s employment be terminated for any reason, he will not earn and will have no right to receive any compensation except as expressly provided in this Agreement or in the terms and conditions of a compensation plan or program expressly referenced herein.

C. Notwithstanding any termination of Key Employee’s employment with Employer, Key Employee, in consideration of Key Employee’s employment hereunder to the date of such termination, shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of Key Employee’s employment, including, but not limited to, the covenants contained in Section 7 hereof.

6.06 Surrender of Records and Property. Upon termination of Key Employee’s employment with Employer for any reason, 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, tables or calculations or copies thereof, which are the property of Employer or which relate in any way to the business, products, practices or techniques of Employer, and all other property, trade secrets and confidential information of Employer, including, but not limited to, all tangible, written, graphical, machine readable and other materials (including all copies) which in whole or in part contain any trade secrets or confidential information of employer which in any 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 hereunder, and the significant financial benefits Key Employee will receive under the Employees’ 1997 Omnibus Stock Plan, and any successor plans, Key

Employee agrees that, during the “Restricted Period” (as hereinafter defined), Key Employee shall not, directly or indirectly, engage in any “Competing Business 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. The obligations of Key Employee under this Section 7 shall apply anywhere within the continental United States.

(ii) Limitation on Covenant. Ownership by Key Employee, as a passive investment, of less than five percent of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this Section 7.01.

(iii) Competing Business Activity. As used in this Section 7.01, “Competing Business Activity” shall mean any business activities that are competitive with the business conducted by Employer at or prior to the date of the termination of Key Employee’s employment, or any prospective business activity or relationship 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) any activities that are carried out by a business that competes directly or indirectly with Employer in the contracting, arranging, providing, procuring, furnishing or soliciting of distributors, freight contracting, freight brokerage, contract logistics, freight forwarding or backhauling, custom house brokerage or transportation services; or

(c) any activity conducted by a business engaged in the transportation or logistics industries as a shipper, receiver or carrier; or

(d) the provision of payment, financing, and information services to entities engaged in the transportation industry, or

(e) the purchase, sale and 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 induce any employee of Employer to leave the employ of Employer, or in any way interfere adversely with the relationship between any such employee and Employer; (b) induce or attempt to induce any employee of Employer to work for, render services to, provide advice to, or supply confidential business information or trade secrets of Employer to any entity engaged in a Competing Business Activity; (c) recruit, employ, or otherwise pay for services rendered by, any employee of Employer in any business enterprise with which Key Employee may be associated,

connected or affiliated; or (d) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of Employer to cease doing business with Employer, or in any way interfere with the then existing business relationship between any such customer, supplier, licensee, licensor or other business relation and Employer.

7.03 Indirect Competition or Solicitation. Key Employee agrees that, during the Restricted Period, Key Employee will not, directly or indirectly, assist, solicit or encourage any other person in carrying out, directly or indirectly, any activity that would be prohibited by the provisions of this Section 7 if such activity were carried out by Key Employee, either directly or indirectly; and, in particular, Key Employee agrees 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 affiliated with a third party, Key Employee shall immediately notify Employer of the identity and business of the new Employer or affiliation. Without limiting the foregoing, Key Employee’s obligation to give notice under this Section 7.04 shall apply to any business ventures in which Key Employee proposes to engage, even if not with a third-party Employer (such as, without limitation, a joint venture, partnership or sole proprietorship). Key Employee hereby consents to Employer notifying any such new Employer or business venture of the terms of the covenants in this Section 7.04.

7.05 Restricted Period. As used in this Section 7, “Restricted Period” shall mean for the period between the Effective Date and two (2) years after the termination of Key Employee’s employment with Employer for any reason (whether such termination is occasioned by Key Employee 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, Key Employee 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 agreement between Employer and its affiliates and Key Employee. Neither the exercise of nor failure to exercise such right of set-off or to give notice of a claim therefor will constitute an election of remedies or limit Employer in any manner in the enforcement of any other remedies available to it.

7.07 Liquidated Damages. In addition, because determining damages with complete precision is difficult in the case of a breach of a covenant under Section 7 or in Section 8, Key Employee hereby agrees that if Key Employee breaches any of the covenants contained in this agreement, Employer is entitled to damages in the amount of five times the Key Employee’s Compensation for the most recent twelve month period of time. Compensation for this purpose shall include: salary, bonus, and an annualized amount for any equity or incentive compensation.

8. Confidential Information. In consideration for Employer’s promises under this Agreement and because Key Employee’s duties as a senior management employee will necessitate his having access to and being entrusted with confidential and proprietary information relating to Employer’s business and customers, Key Employee agrees that during his employment with Employer and thereafter, Key Employee shall not disclose to a third party or use for his personal benefit Confidential Information of Employer. “Confidential Information” means all information written (or generated/stored on magnetic, digital, photographic or other media) or oral, relating to any aspect of Employer’s existing or reasonably foreseeable business which is disclosed to Key Employee or conceived, discovered or developed by Key Employee, and which is not generally known or proprietary to Employer. Confidential Information includes, without limitation, Employer’s strategic and other business plans, designs, customers, suppliers, and Employer’s marketing, accounting, merchandising, and information-gathering techniques and methods, and all accumulated data, listings, or similar recorded matter used or useful in food sales, freight contracting and freight forwarding and backhauling (all modes), and customs house brokerage operations, including but not limited to the customer and carrier lists, business forms, weekly loading lists, service contracts, all pricing information, computer programs, tariff information and marketing aids.

All Information disclosed to Key Employee or to which Key Employee has access during the period of this employment, for which there is any reasonable basis to believe is, or which appears to be treated by Employer as Confidential Information, shall be presumed to be Confidential Information under this Agreement. In addition, Key Employee shall comply with the terms of any Confidentiality Agreement by which Employer is bound to a third party. Key Employee’s disclosure to attorneys, accountants and other advisors at the Employer’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 (or were) conceived or reduced to practice by Key Employee (alone or jointly with others) (1) during Key Employee’s employment with Employer, (2) within one (1) year following the termination of Key Employee’s employment with Employer for any reason (and whether occasioned by Key Employee or Employer). Key Employee hereby assigns to Employer and/or its nominees, all of Key Employee’s right, title, and interest in such Inventions, and all of Key Employee’s right, title, and interest in any patents, copyrights, patent applications or copyright applications based thereon. Key Employee shall assist Employer and/or its nominees (without

charge but at no expense to Key Employee) at any time and in every proper way to obtain for its and/or their own benefits, patents and copyrights for all such Inventions anywhere in the world and to enforce its and/or their rights in legal proceedings.

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 Invention which qualifies for exclusion under the provisions of Minnesota Statute Section 181.78. That section provides that the requirement to assign “does not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was 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 the employer’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer.” Key Employee understands that Key Employee bears the burden of proving that an Invention qualifies for exclusion under Minnesota Statute Section 181.78.

9.04 Notwithstanding any of the foregoing, Key Employee also assigns to Employer (or to any of its nominees) all rights which Key Employee may have or acquire in any Invention, full title to which is required to be in the United States by a contract between Employer and the 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 Key Employee’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 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 Key Employee.

10. Miscellaneous.

10.01 Disputes. The Compensation Committee of Employer’s Board of Directors, or its delegate, shall be the sole arbiter and judge regarding any disputes under this agreement.

10.02 Governing Law and Venue Selection. This Agreement is made under and shall be governed by and construed in accordance with the laws of the State of Minnesota without regard to conflicts of law principles thereof, or of any of the

United States of America. The parties agree that any litigation in any way relating to this Agreement or to Key Employee’s employment by Employer, including but not limited to the termination of this Agreement or of Key Employee’s employment, will be venued in the State of Minnesota, Hennepin County District Court, or the United States District Court for the District of Minnesota. Key Employee and Employer hereby consent to the personal jurisdiction of these courts and waive any objection that such venue is inconvenient or improper.

10.03 Prior Agreements. This Agreement (including other agreements specifically mentioned in this Agreement) contains the entire agreement of the parties relating to the employment of Key Employee by Employer and the other matters discussed herein and supersedes all prior promises, contracts, agreements and understandings of any kind, whether express or implied, oral or written, with respect to such subject matter (including, but not limited to, any promise, contract or understanding, whether express or implied, oral or written, by and between Employer and Key Employee) and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein or in the other agreements mentioned herein.

10.04 Withholding Taxes. Employer 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 Key Employee’s employment with Employer or any Employer Affiliate, are withheld or collected from Key Employee.

10.05 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by Key Employee and Employer.

10.06 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 of this 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 be deemed 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 or condition for the future or as to any act other than as specifically set forth in the waiver.

10.07 Assignment. This Agreement shall not be assignable, in whole or in part, by any party without the written consent of the other party, except that Employer may, without the consent of Key Employee, assign its rights and obligations under this Agreement to any Employer affiliate or to any corporation, firm or

other business entity with or into which Employer may merge or consolidate, or to which Employer may sell or transfer all or substantially all of its assets, or of which fifty percent (50%) or more of the equity investment and of the voting control is owned, directly or indirectly, by, or is under common ownership with, Employer. After any such assignment by Employer, Employer shall be discharged from all further liability hereunder and such assignee shall thereafter be deemed to be Employer for the purposes of all provisions of this Agreement including this Section 10.06.

10.08 Injunctive Relief. Key Employee acknowledges and agrees that the services to be rendered by Key Employee hereunder are of a special, unique and extraordinary character, that it would be difficult to replace such services and that any violation of Sections 6.06, 7, 8, or 9 hereof would be highly injurious to Employer and/or to any Employer Affiliate, and that it would be extremely difficult to compensate Employer and/or any Employer Affiliate fully for damages for any such violation. Accordingly, Key Employee specifically agrees that Employer or any Employer Affiliate, as the case may be, shall be entitled to temporary and permanent injunctive relief to enforce the provisions of Sections 6.06, 7, 8, or 9 hereof, and that such relief may be granted without the necessity of proving actual damages and without necessity of posting any bond. This provision with respect to injunctive relief shall not, however, diminish the right of Employer or any Employer Affiliate to claim and recover damages, or to seek and obtain any other relief available to it at law or in equity, in addition to injunctive relief.

10.09 Severability. To the extent any provision of this Agreement shall be determined to be invalid or unenforceable in any jurisdiction, such provision shall be deemed to be deleted from this Agreement as to that jurisdiction only, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, Key Employee expressly agrees that should the duration of, geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law in a given jurisdiction, then such provision, as to such jurisdiction only, shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. Key Employee acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law in each applicable jurisdiction. All gender references made herein are neutral, and references to “he,” “himself,” and “his” shall be deemed to mean “she,” “herself,” or “hers”.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in the first paragraph.

C. H. ROBINSON WORLDWIDE, INC.

By

Name:

Title:

KEY EMPLOYEE:

EX-10.11

Exhibit 10.11

CHRW Management Restricted Stock Program

C.H. Robinson Worldwide, Inc. (the “Company”) is permitted under the terms of its 1997 Omnibus Stock Plan to issue its shares and other derivative securities to employees at various times and in various forms. The Company has also established a nonqualified, defined contribution plan of deferred compensation for the benefit of certain eligible employees known as the “Robinson Companies Nonqualified Deferred Compensation Plan” (the “Deferred Compensation Plan”). The Deferred Compensation Plan provides, in part, that the Company may, in its sole discretion, make discretionary credits to the account of a participant, subject to such terms and conditions established by the Company.

Program Outline

1. Participant’s account in the Deferred Compensation Plan will be credited with restricted stock of the Company.

2. Beginning on December 31, 2006, and on each December 31 thereafter through December 31, 2010, a portion of the restricted shares will vest, but only if and only to the extent that the Company’s Vesting Indicator (VI) is greater than zero for the respective year, as determined by the Compensation Committee of the Company’s Board of Directors. The VI is defined as the sum of 5 percentage points plus the average of the following items (A) and (B) rounded to the nearest whole percentage: (A) the percentage increase of Company income from operations for the current year over the prior year rounded to two decimals and (B) the percentage increase in Company diluted net income per share for the current year over the prior year rounded to two decimals.

Example

	Prior Year		Current Year		Percentage Increase
Income from Operations (A)	$	156,580,000	$	178,501,200	14.00	%
Diluted EPS (B)		1.12		1.29	15.18	%
Average Percentage Increase of (A) and (B)					14.59	%
Add: 5 Percentage Points					19.59	%
Rounded to the Nearest Whole Percentage					VI=20.00	%

3. In determining how many shares are vested at the end of each year, the VI is multiplied by the original restricted stock grant and then rounded to the nearest whole share.

Example

	Year 1		Year 2		Year 3
Restricted Stock Grant: 1,333 shares VI:	20	%	12	%	26	%
Rounded Number of Shares Vested on Dec. 31:	267		160		347

4. 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 year.

CHRW Management Restricted Stock Program

5. Participant’s restricted stock will vest only while the Participant is employed by the Company. A Participant must be an employee of the Company on December 31 of a particular year in order to vest in any shares for that year. If a Participant’s employment is terminated, whether voluntarily or involuntarily, prior to vesting of any restricted stock, any shares remaining unvested as of the date of termination will be forfeited and deleted from Participant’s account, and the Participant will retain no rights with respect to the forfeited shares. Vesting will not be accelerated on account of death or disability.

6. Participant’s restricted stock 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 the VI during such time period is sufficiently high enough). Any shares remaining unvested after December 31, 2010 will be forfeited and deleted from Participant’s account, and the Participant will retain no rights with respect to the forfeited shares.

7. Notwithstanding the foregoing, Participants who embezzle or misappropriate Company funds or property, or who fail to comply with the terms and conditions of any of the following agreements which they 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-employment restrictions, will automatically forfeit all restricted stock awarded, whether vested or unvested, and will retain no rights with respect to such shares.

8. Vested shares shall be delivered to Participant from the Deferred Compensation Plan in a lump sum upon the earlier of: two years after termination of employment or January 2013.

9. Restricted stock may not be sold, exchanged, assigned, transferred, discounted, pledged or otherwise disposed of at any time prior to delivery of the vested shares from the Deferred Compensation Plan. Participant will be entitled to receive dividend equivalents on the shares of restricted stock credited to Participant’s account, whether vested or unvested, when and if dividends are declared by the Company’s Board of Directors on the Company’s common stock, in an amount of cash per share equal to and on the same payment dates as other common stockholders of the Company. Dividend equivalents paid before delivery of the shares from the Deferred Compensation Plan will be treated as compensation income for tax purposes and will be subject to income and payroll tax withholding by the Company.

10. In order to comply with all applicable federal or state income tax laws or regulations, at the time that the shares are delivered to the Participant, the Company will withhold taxes based on the Fair Market Value of the shares at the 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 a Fair Market Value equal to the amount of such taxes. “Fair Market Value” for a share shall mean the last sale price of a share of the Company’s common stock on the Nasdaq National Market (or other national securities exchange on which the Company’s common stock is then listed) on the trading date immediately preceding the date the shares are delivered to the Participant. If the Company’s common stock is not then traded in an established securities market, the Compensation Committee of the Board of Directors shall determine Fair Market Value in accordance with the 1997 Omnibus Stock Plan.

11. This restricted stock award shall confer no rights of continued employment to the Participant, nor will it interfere in any way with the right of the Company to terminate such employment at any time. The Company retains all rights to enforce any other agreement or contract that the Company has with the Participant.

CHRW Management Restricted Stock Program

12. If there shall be any change in the Company’s common stock 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, appropriate adjustments shall be made in the number of restricted shares that are vested or unvested under this agreement in order to prevent dilution or enlargement of rights.

13. In the event of a Change in Control, the Compensation Committee may, in its discretion, accelerate the vesting of the restricted shares. A “Change in Control” shall be deemed to occur on the date (i) a public announcement [which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended] is made by the Company or any Person (as defined below) that such Person beneficially owns more than 50% of the Common Stock outstanding, (ii) the Company consummates a merger, consolidation or statutory share exchange with any other Person in which the surviving entity would not have as its directors at least 60% of the Continuing Directors (as defined below) and would not have at least 60% of its common stock owned by the common shareholders of the Company prior to such merger, consolidation or statutory share exchange, (iii) a majority of the Board of Directors is not comprised of Continuing Directors or (iv) a sale or disposition of all or substantially all of the assets of the Company or the dissolution of the Company. A “Continuing Director” is a director recommended by the Board of Directors of the Company for election as a director of the Company by stockholders. “Person” means any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity.

14. This restricted stock award is made pursuant to the Deferred Compensation Plan and the Company’s 1997 Omnibus Stock Plan and is subject to the terms of such plans. Participant may request a copy of either or both plans from the Company. By participating in the CHRW Management Restricted Stock Program, Participant shall be deemed to have accepted all the conditions of the Deferred Compensation Plan and the 1997 Omnibus Stock Plan and this agreement, and the terms and conditions of any rules adopted by the Committee (as defined in the 1997 Omnibus Stock Plan) and shall be fully bound thereby. This agreement shall be construed under the laws of the state of Minnesota.

CHRW Management Restricted Stock Program

EX-13

Exhibit 13

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

C. H. Robinson Worldwide, Inc. and Subsidiaries

(Dollars in thousands, except per share data)

STATEMENT OF OPERATIONS DATA⁽²⁾

For the years ended December 31	2005		2004		2003		2002		2001
Gross revenues	$	5,688,948	$	4,341,538	$	3,613,645	$	3,294,473	$	3,090,072
Gross profits		879,750		660,991		544,848		483,778		456,572
Income from operations		326,361		222,768		176,046		148,932		128,402
Net income		203,358		137,254		107,369		89,798		80,428
Net income per share
Basic	$	1.20	$	.81	$	.64	$	.53	$	.48
Diluted	$	1.16	$	.79	$	.62	$	.52	$	.47
Weighted average number of shares outstanding (in thousands)
Basic		170,052		169,228		168,774		168,736		168,748
Diluted		174,698		173,144		172,138		171,514		171,548
Dividends per share	$	.355	$	.255	$	.180	$	.130	$	.105
BALANCE SHEET DATA
As of December 31
Working capital	$	472,298	$	393,168	$	336,128	$	245,098	$	179,687
Total assets		1,395,068		1,080,696		908,149		777,151		683,490
Total long-term debt		—		—		—		—		—
Stockholders’ investment		780,037		620,856		518,747		427,469		356,786
OPERATING DATA
As of December 31
Branches		196		176		158		150		139
Employees		5,776		4,806		4,112		3,814		3,770
Average gross profits per employee(1)	$	166	$	149	$	137	$	128	$	123

⁽¹⁾ Gross profits per employee is a key performance indicator used by management to analyze our productivity, to benchmark the financial performance of our branches, and to analyze impacts of technology and other investments in our business.

⁽²⁾ On October 14, 2005, the company’s shareholders approved a 2-for-1 stock split. All share and per share amounts have been restated to reflect the retroactive effect of the stock split.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

C. H. Robinson Worldwide, Inc. and Subsidiaries

RESULTS OF OPERATIONS

The following table illustrates our gross profit margins by services and products:

For the years ended December 31,	2005		2004		2003
Transportation	16.3	%	16.0	%	16.3	%
Sourcing	8.2		7.3		6.8
Information Services	100.0		100.0		100.0
Total	15.5	%	15.2	%	15.1	%

The following table summarizes our gross profits by service line:

For the years ended December 31, (Dollars in thousands)	2005		2004		Change		2003		Change
Gross profits:
Transportation
Truck	$	666,605	$	501,940	32.8	%	$	401,709	25.0	%
Intermodal		31,392		29,960	4.8			28,103	6.6
Ocean		29,182		20,558	41.9			19,027	8.0
Air		13,321		8,570	55.4			4,891	75.2
Miscellaneous		19,824		14,709	34.8			10,973	34.0
Total Transportation		760,324		575,737	32.1			464,703	23.9
Sourcing		81,459		51,772	57.3			50,373	2.8
Information Services		37,967		33,482	13.4			29,772	12.5
Total	$	879,750	$	660,991	33.1	%	$	544,848	21.3	%

The following table represents certain statements of operations data, shown as percentages of our gross profits:

For the years ended December 31,	2005		2004		2003
Gross profits	100.0	%	100.0	%	100.0	%
Selling, general, and administrative expenses:
Personnel expenses	48.6		50.5		51.2
Other selling, general, and administrative expenses	14.3		15.8		16.5
Total selling, general, and administrative expenses	62.9		66.3		67.7
Income from operations	37.1		33.7		32.3
Investment and other income	0.7		0.5		0.5
Income before provision for income taxes	37.8		34.2		32.8
Provision for income taxes	14.7		13.4		13.1
Net income	23.1	%	20.8	%	19.7	%

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   35

FORWARD-LOOKING INFORMATION

Our annual report, including the letter to our shareholders and this discussion and analysis of our financial condition and results of operations, contains certain “forward-looking statements.” These statements represent our expectations, beliefs, intentions, or strategies concerning future events and by their nature involve risks and uncertainties. Forward-looking statements include, among others, statements about our future performance, the continuation of historical trends, the sufficiency of our sources of capital for future needs, the effects of acquisitions, the expected impact of recently issued accounting pronouncements, and the outcome or effects of litigation. Risks that could cause actual results to differ materially from our current expectations include changes in market demand and pricing for our services, the impact of competition, changes in relationships with our customers, freight levels and our ability to source capacity to transport freight, our ability to source produce, the risks associated with litigation and insurance coverage, our ability to integrate acquisitions, the impacts of war, the risks associated with operations outside the United States, and changing economic conditions. Therefore, actual results may differ materially from our expectations based on these risks and uncertainties, including those described in the Business Description of our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2005.

OVERVIEW

We are a global provider of multimodal transportation services and logistics solutions, operating through a network of branch offices in North America, South America, Europe, and Asia. We are a non-asset based transportation provider, meaning we do not own the transportation equipment that is used to transport our customers’ freight. Through our relationships with transportation companies, we select and hire the appropriate transportation to manage our customers’ needs. As an integral part of our transportation services, we provide a wide range of value-added logistics services, such as supply chain analysis, freight consolidation, core carrier program management, and information reporting.

In addition to multimodal transportation services, we have two other logistics business lines: fresh produce sourcing and fee-based information services. Our Sourcing business line is the buying and selling of fresh produce. We purchase fresh produce through our network of produce suppliers, and sell it to wholesalers, grocery retailers, restaurants, and foodservice distributors. In the majority of cases, we also arrange the transportation of the produce we sell, through our relationships with specialized transportation companies. Our Information Services business line is our subsidiary, T-Chek Systems, Inc., which provides a variety of management and information services to motor carrier companies and to fuel distributors. Those services include fuel management services, funds transfer, fuel and use tax reporting, and driver payroll services.

Our gross revenues represent the total dollar value of services and goods we sell to our customers. Our costs of transportation, products, and handling include the direct costs of transportation, including motor carrier, rail, ocean, air, and other costs, and the purchase price of the products we source. We act principally as a service provider to add value and expertise

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   36

in the procurement and execution of these services and products for our customers. Our gross profits (gross revenues less the direct costs of transportation, products, and handling) are the primary indicator of our ability to source, add value, and resell services and products that are provided by third parties, and are considered by management to be our primary performance measurement. Accordingly, the discussion of our results of operations below focuses on the changes in our gross profits.

Our variable cost business model allows us to be flexible and adapt to changing economic and industry conditions. We buy most of our transportation capacity and produce on a spot-market basis. We also keep our personnel and other operating expenses as variable as possible. Compensation, our largest operating expense, is performance oriented and, for most employees in the branch network, based on the profitability of our branch offices.

We believe our branch network is a major competitive advantage. Our worldwide network of offices supports our core strategy of serving customers locally, nationally, and globally. Our branch offices help us penetrate local markets, provide face-to-face service when needed, and recruit carriers. Our branch network also gives us knowledge of local market conditions, which is important in transportation because it is so dynamic and market-driven. Over 30 percent of our transactions are shared transactions between branches. Our branches work together to complete transactions and collectively meet the needs of our customers. For our top 100 customers (who comprise approximately one-third of our gross profits), we often coordinate our efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. In addition, our methodology of providing services is very similar across all branches. Our North American branches have a common technology platform that they use to match customer needs with supplier capabilities, to collaborate with other branch locations, and to utilize centralized support resources to complete all facets of the transaction.

We increased the size of our branch network by 20 branches to 196 offices during 2005. We opened 10 new branches and are planning to open 6 to 10 branches during 2006. Because we usually open new offices with only two or three employees, we do not expect them to make a material contribution to our financial results in the first few years of their operation. We believe building local customer and carrier relationships has been an important part of our success. We also added 10 branches through acquisitions during 2005. Acquisitions that fit our growth criteria and culture may also augment our growth.

We are a service company, and our continued success is dependent on our ability to continue to hire and retain talented, productive people. Including the 170 employees added by acquisitions, our headcount grew by 970 employees during 2005. Employees act as a team in their sales efforts, customer service, and operations. A significant portion of our branch employees’ compensation is performance-oriented, based on individual performance and the profitability of their branch. We believe this makes our sales employees more service-oriented, focused, and creative. In 2003, we implemented a new restricted stock program to better align

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   37

our key employees with the interests of our shareholders, and to motivate and retain them for the long-term.

Since we became a publicly-traded company in 1997, our long-term compounded annual growth target has been 15 percent for gross profits, income from operations, and earnings per share. This goal was based on an analysis of our performance in the previous twenty years, during which our compounded annual growth rate was 15 percent. Our expectation has been that over time we will continue to achieve our target of 15 percent growth, but that we will have periods in which we exceed that goal, and periods in which we fall short. In 2005, we exceeded our long-term growth goal in gross profits, income from operations, and earnings per share. Our gross profits grew 33.1 percent in 2005 over 2004 to $879.8 million. Our income from operations increased 46.5 percent to $326.4 million and our diluted earnings per share increased 46.8 percent to $1.16.

Our strong gross profit growth was due, in part, to an increase in the number of shipments we handle to 4.4 million, an increase of 15.8 percent from 3.8 million shipments in 2004. We added approximately 2,500 new active customers. We believe that the continued growth of our customer base is evidence that we continue to penetrate the market and expand our reach. Our top 100 customers, which collectively account for approximately one-third of our consolidated gross profits, is becoming a smaller percentage of our consolidated gross profits as we continue to add new customers. However, our growth in gross profits with these top customers has exceeded our long-term compounded annual growth target in each of the last two years as we continue to expand the services we provide to them. Additionally, acquisitions accounted for approximately 6 percent of our gross profit growth in 2005.

During 2004 and 2005, the price of truckload transportation services charged by motor carriers increased significantly more than the rate of increase in prior years. The rate increases were driven by both increased operating costs for the carriers, including the price of fuel, insurance, and driver wages, and by pricing leverage as increased freight volumes drove an increase in the demand for capacity. Because of these marketplace conditions, a significant portion of our gross profit growth was also due to increased pricing. Our gross revenue per truckload increased approximately 15 percent in 2005.

The tight capacity conditions and higher rates created a very transactional, or spot market, transportation marketplace as shippers had to look for additional sources of capacity outside their planned transportation. While we have typically gained additional business due to these conditions, we have to be careful to manage our pricing correctly for both our spot and committed business to preserve our gross profit margins in a volatile pricing environment.

In our opinion, this is a normal cyclical pattern in the truck transportation industry. As truck transportation rates increase, it becomes more lucrative to provide those services, which causes new carriers and capacity to enter the marketplace. Over time, the supply of capacity and the demand for that capacity generally have become more balanced. These cycles can change

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   38

rapidly based on economic conditions and it is difficult to predict when, and at what pace that will happen.

In 2005, we increased our carrier base to approximately 40,000, up from approximately 35,000 in 2004. While our business with many of these new providers may still be small, we believe the growth in our contract carrier network shows that new transportation providers continue to enter the industry, and that we are well positioned to continue to meet our customers’ needs.

In the transportation industry, results of operations generally show a seasonal pattern as customers reduce shipments during and after the winter holiday season. In recent years, our income from operations has been lower in the first quarter than in the other three quarters, but it has not had a significant impact on our results of operations or our cash flows. Also, inflation has not materially affected our operations due to the short-term, transactional basis of our business. However, we cannot fully predict the impact seasonality and inflation may have in the future.

On October 14, 2005, our shareholders approved a two-for-one stock split. For shareholders of record as of the end of business on October 14, 2005, every share owned was exchanged for two shares of common stock. All prior period common shares and per share disclosures have been restated to reflect the split.

2005 COMPARED TO 2004

REVENUES. Gross revenues for 2005 were $5.69 billion, an increase of 31.0% over $4.34 billion in 2004. Gross profits in 2005 were $879.8 million, an increase of 33.1% over $661.0 million in 2004. This was the result of an increase Transportation gross profits of 32.1% to $760.3 million, an increase in Sourcing gross profits of 57.3% to $81.5 million, and an increase in Information Services gross profits of 13.4% to $38.0 million.

During 2005, our gross profit margin, or gross profits as a percentage of gross revenues, increased to 15.5% from 15.2% in 2004. Transportation gross profit margin increased slightly to 16.3% in 2004 from 16.0% in 2004. Sourcing gross profit margin increased to 8.2% in 2005 from 7.3% in 2004. This increase was primarily due to the acquisition of FoodSource in the first quarter of 2005. The FoodSource customer base is nearly all retail and foodservice customers to whom we provide more value-added services at a higher profit margin than our traditional produce business. Our Information Services business is a fee-based business, which generates 100% gross profit margin.

Transportation gross profits increased 32.1% to $760.3 million in 2005 from $575.7 million in 2004. Transportation revenues are generated through several transportation mode services, including truck, intermodal, ocean, air, and miscellaneous services.

Truck gross profits, including less-than-truckload (LTL), increased 32.8% to $666.6 million from $501.9 million in 2004. This increase was split equally between transaction volume growth and pricing increases. Demand for

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   39

truck services increased in 2005. This increase created opportunities for us to develop new customer relationships. This strong demand relative to available supply, as well as high fuel prices, led to increased pricing.

Intermodal gross profits increased 4.8% to $31.4 million in 2005 from $30.0 million in 2004. This increase was driven by an increase in gross profit margins, offset by a decrease in volume. Our gross profit margin expanded due to rate increases and the elimination of some lower margin business. Market conditions continued to drive business back to truck in certain lanes, impacting our volumes.

In our international forwarding business, ocean gross profits increased 41.9% to $29.2 million in 2005 from $20.6 million in 2004. Air gross profits increased 55.4% to $13.3 million in 2005 from $8.6 million in 2004. Excluding the impact of the acquisitions of Bussini and Hirdes, our ocean gross profits would have increased 27.9% and our air gross profits would have increased 13.1% in 2005.

Miscellaneous transportation gross profits consist of customs brokerage fees, transportation management fees, warehouse and crossdock services, and other miscellaneous transportation related services. The increase of 34.8% to $19.8 million in 2005 from $14.7 million in 2004 was driven by increases in transportation management fees and customs brokerage business. Excluding acquisitions, our miscellaneous transportation gross profits increased 31.5% in 2005.

Sourcing gross profits increased 57.3% to $81.5 million in 2005 from $51.8 million in 2004. Our Sourcing business is the buying and selling of fresh fruits and vegetables. Excluding the acquisition of FoodSoruce in the first quarter of 2005, Sourcing gross profits increased 5.7% in 2005. During the past decade, we have actively sought to expand our Sourcing customer base. We have been focusing on large retailers, restaurant chains, and foodservice providers. As a result, we continue to see the long-term trend of increases in volume and gross profits in our integrated relationships with these customers, offset by a decline in our business with produce wholesale customers.

Information Services is comprised entirely of revenue generated by our subsidiary, T-Chek Systems. For 2005, Information Services gross profits increased by 13.4% to $38.0 million from $33.5 million in 2004, primarily due to transaction growth.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Many of our selling, general, and administrative expenses are variable in relation to gross profits. However, we do gain some leverage when our gross profits grow.

Personnel expenses accounted for 77.2% of total selling, general, and administrative expenses in 2005 compared to 76.2% in 2004. Personnel expenses were $427.3 million in 2005, an increase of 27.9% over $334.1 million in 2004. Personnel expenses as a percentage of gross profits decreased to 48.6% in 2005 from 50.5% in 2004.

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We focus on keeping personnel expenses as variable as possible while looking for opportunities to be more efficient. Gross profit per employee increased 11.3% in 2005 over 2004. This increase was driven partially by transaction pricing increases and our continuous efforts to improve processes, including our investments in technology.

Other selling, general, and administrative expenses for 2005 were $126.1 million, an increase of 21.1% from $104.1 million in 2004. As a percentage of gross profits, other selling, general, and administrative expenses decreased to 14.3% compared to 15.8% in 2004. We strive to keep our expenses as variable as possible.

With our revenue growth during 2005, we did gain leverage in our other selling, general, and administrative expense.

INCOME FROM OPERATIONS. Income from operations was $326.4 million for 2005, an increase of 46.5% over $222.8 million in 2004. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 37.1% and 33.7% for 2005 and 2004.

INVESTMENT AND OTHER INCOME. Investment and other income was $6.4 million in 2005, an increase of 95.5% from $3.3 million in 2004. Our cash and cash equivalents as of December 31, 2005 increased $64.2 million over the balance as of December 31, 2004, which contributed to our increased investment income. Our portfolio yield also increased due to increases in short-term interest rates.

PROVISION FOR INCOME TAXES. Our effective income tax rate was 38.9% for 2005 and 39.3% for 2004. The decrease in the effective income tax rate is primarily due to the decline in our effective foreign tax rate and the tax effects of stock-based compensation. The effective income tax rate for both periods is greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.

NET INCOME. Net income was $203.4 million for 2005, an increase of 48.2% over $137.3 million for 2004. Basic net income per share increased 48.1% to $1.20 for 2005 compared to $0.81 for 2004. Diluted net income per share increased 46.8% to $1.16 for 2005 compared to $0.79 for 2004.

2004 COMPARED TO 2003

REVENUES. Gross revenues for 2004 were $4.34 billion, an increase of 20.1% over $3.61 billion in 2003. Gross profits in 2004 were $661.0 million, an increase of 21.3% over $544.8 million in 2003. This was the result of an increase in Transportation gross profits of 23.9% to $575.7 million, an increase in Sourcing gross profits of 2.8% to $51.8 million, and an increase in Information Services gross profits of 12.5% to $33.5 million.

During 2004, our gross profit margin, or gross profits as a percentage of gross revenues, increased to 15.2% from 15.1% in 2003. Transportation gross profit margin decreased to 16.0% in 2004 from 16.3% in 2003 due to market conditions. Sourcing gross profit margin increased to 7.3% in 2004 from 6.8% in 2003 primarily due to volatility in commodity pricing. In addition, we provided more value-added services to our customers

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as part of our produce sourcing business. Those new services are typically higher margin than our traditional produce business. Our Information Services business is a fee-based business, which generates 100% gross profit margin.

Transportation gross profits increased 23.9% to $575.7 million in 2004 from $464.7 million in 2003. Transportation revenues are generated through several transportation mode services, including truck, intermodal, ocean, air, and miscellaneous services.

Truck gross profits, including less-than-truckload (LTL), increased 25.0% to $501.9 million in 2004 from $401.7 million in 2003. This increase was driven by transaction volume growth and pricing increases, while our gross profit margin declined slightly. Volume growth was helped by increased freight demand in the marketplace. This increase in demand also created a tight capacity market and increased market transportation rates. These market dynamics increased the amount of transactional truckload freight available in the marketplace. Our growth in transactional business, coupled with increased business with our existing customers, provided our volume growth.

Intermodal gross profits increased 6.6% to $30.0 million in 2004 from $28.1 million in 2003. This increase was driven by transaction volume growth, while our margins declined slightly.

Ocean gross profits increased 8.0% to $20.6 million in 2004 from $19.0 million in 2003. This increase was the result of the acquisition and branch openings in China and volume increases with several large customers.

Air gross profits increased 75.2% to $8.6 million in 2004 from $4.9 million in 2003. This significant increase in our air gross profits was primarily due to increased volumes.

Miscellaneous transportation gross profits consist of customs brokerage fees, transportation management fees, warehouse and crossdock services, and other miscellaneous transportation related services. This increase of 34.0% to $14.7 million in 2004 from $11.0 million in 2003 was driven by increases in transportation management fees and customs brokerage business.

Sourcing gross profits increased 2.8% to $51.8 million in 2004 from $50.4 million in 2003. Our Sourcing business is primarily the buying and selling of fresh fruits and vegetables. During the past decade, we have actively sought to expand our Sourcing customer base, focusing on large multistore retailers. As a result, we continue to see the long-term trend of increases in volume and gross profits in our integrated relationships with large retailers, restaurant chains, and foodservice providers, offset by a decline in our business with produce wholesale customers.

Information Services is comprised entirely of revenue generated by our subsidiary, T-Chek Systems. For 2004, Information Services gross profits

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   42

increased by 12.5% to $33.5 million from $29.8 million in 2003, primarily due to transaction growth.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Many of our selling, general, and administrative expenses are variable in relation to gross profits. However, we do gain some leverage when our gross profits grow.

Personnel expenses accounted for 76.2% of total selling, general, and administrative expenses in 2004 compared to 75.7% in 2003. Personnel expenses were $334.1 million in 2004, an increase of 19.8% over $279.0 million in 2003. Personnel expenses as a percentage of gross profits decreased to 50.5% in 2004 from 51.2% in 2003.

We focus on keeping personnel expenses as variable as possible while looking for opportunities to be more efficient. Gross profit per employee increased 8.8% in 2004 over 2003. This increase was driven partially by transportation pricing increases, and our continuous efforts to improve processes, including our investments in technology.

Other selling, general, and administrative expenses for 2004 were $104.1 million, an increase of 15.9% from $89.8 million in 2003. As a percentage of gross profits, other selling, general, and administrative expenses decreased to 15.8% in 2004 compared to 16.5% in 2003. We strive to keep our expenses as variable as possible. With our revenue growth during 2004, we did gain leverage in our other selling, general, and administrative expense. We continued to make investments for the future, including improving our technology infrastructure.

INCOME FROM OPERATIONS. Income from operations was $222.8 million for 2004, an increase of 26.5% over $176.0 million in 2003. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 33.7% and 32.3% for 2004 and 2003.

INVESTMENT AND OTHER INCOME. Investment and other income was $3.3 million for 2004, an increase of 26.4% from $2.6 million in 2003. Our cash and cash equivalents as of December 31, 2004 increased $43.1 million over the balance as of December 31, 2003, which contributed to increased investment income.

PROVISION FOR INCOME TAXES. Our effective income tax rate was 39.3% for 2004 and 39.9% for 2003. The decrease in the effective income tax rate was primarily due to the decline in our effective foreign tax rate and the tax effects of stock-based compensation. The effective income tax rate for both periods was greater than the statutory federal income tax rate primarily due to state income taxes, net of federal benefit.

NET INCOME. Net income was $137.3 million for 2004, an increase of 27.8% over $107.4 million for 2003. Basic net income per share increased 27.6% to $0.81 for 2004 compared to $0.64 for 2003. Diluted net income per share increased 27.2% to $0.79 for 2004 compared to $0.62 for 2003.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   43

LIQUIDITY AND CAPITAL RESOURCES

We have historically generated substantial cash from operations, which has enabled us to fund our growth while paying cash dividends and repurchasing stock. Cash and cash equivalents totaled $230.6 million and $166.5 million as of December 31, 2005 and 2004. Available-for-sale securities consisting primarily of highly liquid investments totaled $122.6 million and $121.6 million as of December 31, 2005 and 2004. Working capital at December 31, 2005 and 2004 was $472.3 million and $393.2 million.

Our first priority for our cash is growing the business, as we do require some working capital and a small amount of capital expenditures to grow. We are continually looking for acquisitions to redeploy our cash, but those acquisitions must fit our culture and enhance our growth opportunities. We will return more of the cash to our shareholders if our cash balance continues to increase and there are no significant attractive acquisition opportunities.

We generated $229.1 million, $155.9 million, and $109.5 million of cash flow from operations in 2005, 2004, and 2003. This was due to net income generated, adjusted primarily for non-cash expenses, and the net change in accounts receivable and accounts payable.

We used $86.7 million, $54.8 million, and $38.2 million of cash flow for investing activities in 2005, 2004, and 2003. We closed three acquisitions for a total of $60.2 million in 2005. In February 2005, we acquired the ongoing operations and certain assets and assumed certain liabilities of three produce sourcing and marketing companies, FoodSource, Inc. and FoodSource Procurement, LLC and Epic Roots, Inc. We paid approximately $42.5 million in cash and $10.4 million (approximately 390,000 shares) in C.H. Robinson Worldwide, Inc. common stock for the three entities. During the third quarter, we acquired two freight forwarding businesses, in separate transactions: Hirdes Group Worldwide and Bussini Transport S.r.l. The purchase price for these two entities was $20.7 million. As of December 31, 2005, we had signed a purchase agreement to acquire land in Eden Prairie, Minnesota, for $11.0 million.

We had $21.8 million, $34.7 million, and $8.3 million of net capital expenditures in 2005, 2004, and 2003. We spent $3.6 million to complete our building in Chicago, which we occupied in February 2005. In 2005 and 2004 we had approximately $9.3 million and $7.4 million of investments in information technology equipment. For 2006, we plan to have total capital expenditures of approximately $50 million. Of that, we anticipate approximately $25 million for the land purchase mentioned above and office space expansion for our Eden Prairie headquarters and adjacent branch offices.

We used $74.8 million, $60.0 million, and $33.0 million of cash flow for financing activities in 2005, 2004, and 2003. This was primarily quarterly dividends and share repurchases. We declared quarterly dividends during 2005 for an aggregate of $0.355 per share, and quarterly dividends during 2004 for an aggregate of $0.255 per share. We declared a $0.13 per share dividend payable on April 3, 2006, to shareholders of record as of March 10, 2006.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   44

We have 3.5 million euros available under a line of credit at an interest rate of Euribor plus 45 basis points (2.85% at December 31, 2005). This discretionary line of credit has no expiration date. During 2005, we borrowed 6.5 million euros, or $7.1 million, all of which was repaid during the year. During 2004, we borrowed 25.4 million euros, or $31.7 million, all of which was repaid during the year. As of December 2005 and 2004, the outstanding balance was zero. Our credit agreement contains certain financial covenants, but does not restrict the payment of dividends. We were in compliance with all covenants of this agreement as of December 31, 2005.

Assuming no change in our current business plan, management believes that our available cash, together with expected future cash generated from operations and the amount available under our line of credit, will be sufficient to satisfy our anticipated needs for working capital, capital expenditures, and cash dividends for all future periods. We also believe we could obtain funds under a line of credit on short notice, if needed.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements include accounts of the company and all majority-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. In certain circumstances, those estimates and assumptions can affect amounts reported in the accompanying consolidated financial statements and related footnotes. In preparing our financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We don’t believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Note 1 of the “Notes to Consolidated Financial Statements” includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. The following is a brief discussion of our critical accounting policies and estimates.

REVENUE RECOGNITION. Gross revenues consist of the total dollar value of goods and services purchased from us by customers. Gross profits are gross revenues less the direct costs of transportation, products, and handling. We act principally as the service provider for these transactions and recognize revenue as these services are rendered or goods are delivered. At that time, our obligations to the transactions are completed and collection of receivables is reasonably assured. Emerging Issues Task Force (EITF) Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, establishes the criteria for recognizing revenues on a gross or net basis. Nearly all transactions in our Transportation and Sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods we sell. In these transactions, we are the primary obligor, we are a principal to the transaction, we have all credit risk, we maintain substantially all risks and rewards, we have discretion to select the supplier, and we have latitude in

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   45

pricing decisions. Additionally, in our Sourcing business, we take loss of inventory risk during shipment and have general inventory risk. Certain transactions in customs brokerage, transportation management, and all transactions in Information Services are recorded at the net amount we charge our customers for the service we provide because many of the factors 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 of uncollectible accounts, and any specific customer collection issues that we have identified. The allowance of $29.4 million as of December 31, 2005, increased compared to the allowance of $25.2 million as of December 31, 2004. We believe that the recorded allowance is sufficient and appropriate based on our customer aging trends, the exposures we have identified, and our historical loss experience.

GOODWILL. We manage and report our operations as one operating segment. Our branches represent a series of components that are aggregated for the purpose of evaluating goodwill for impairment on an enterprise wide basis. In the case where we have an acquisition that we feel has not yet become integrated into our branch network component, we will evaluate the impairment of any goodwill related to that specific acquisition and its results. Based on the substantial excess of our market capitalization over our book value, we have determined that there is no indication of goodwill impairment as of December 31, 2005.

DISCLOSURES ABOUT CONTRACTUAL OBLIGATIONS AND COMMERCIAL CONTINGENCIES

The following table aggregates all contractual commitments and commercial obligations that affect our financial condition and liquidity position as of December 31, 2005:

Payments Due by Period (dollars in thousands)

Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Operating Leases(a)	$	85,672	$	16,005	$	38,635	$	6,629	$	24,403
Purchase Obligations(b)		8,314		5,751		2,563		—		—
Total	$	93,986	$	21,756	$	41,198	$	6,629	$	24,403

^(a) We have certain facilities and equipment under operating leases.

^(b) Purchase obligations include agreements for services that are enforceable and legally binding and that specify all significant terms.

As of December 31, 2005, such obligations include telecommunications services, maintenance contracts, and an obligation to purchase land.

We have no long-term debt or capital lease obligations. Long-term liabilities consist of net long-term deferred income taxes and the obligation under our non-qualified deferred compensation plan. This liability has been excluded from the above table as the timing and/or the amount of any cash payment is uncertain. We also enter into ocean freight and produce purchase contracts which are all short-term in nature. These liabilities have been excluded from the table as the amount of any cash payment is uncertain.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   46

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 2 in the “Notes to Consolidated Financial Statements” for a discussion of the impact of recently issued accounting pronouncements on our financial condition and results of operations.

MARKET RISK

We had $353.2 million of cash and investments on December 31, 2005, consisting of $230.6 million of cash and cash equivalents and $122.6 million of available-for-sale securities. Substantially all of the cash equivalents are money market securities from domestic issuers. All of our available-for-sale securities are high-quality bonds. Because of the credit risk criteria of our investment policies, the primary market risk associated with these investments is interest rate risk. We do not use derivative financial instruments to manage 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. We believe a reasonable near-term change in interest rates would not have a material impact on our future investment earnings due to the short-term nature of our investments.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   47

CONSOLIDATED BALANCE SHEETS

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data) As of December 31,	2005			2004(1)
ASSETS
Current assets:
Cash and cash equivalents	$	230,628		$	166,476
Available-for-sale securities		122,551			121,600
Receivables, net of allowance for doubtful accounts of $29,439 and $25,204		716,725			544,274
Deferred tax asset		5,999			8,180
Prepaid expenses and other		8,878			5,457
Total current assets		1,084,781			845,987
Property and equipment		113,815			102,417
Accumulated depreciation and amortization		(53,094	)		(51,295	)
Net property and equipment		60,721			51,122
Goodwill		223,137			174,035
Other intangible assets, net of accumulated amortization of $7,064 and $3,202		18,520			2,852
Other assets		7,909			6,700
Total assets	$	1,395,068		$	1,080,696
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable	$	410,744		$	303,082
Outstanding checks		63,138			55,847
Accrued expenses –
Compensation and profit-sharing contribution		94,333			60,261
Income taxes and other		44,268			33,629
Total current liabilities		612,483			452,819
Deferred tax liability		1,469			4,153
Nonqualified deferred compensation obligation		1,079			2,868
Total liabilities		615,031			459,840
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 and 260,000 shares authorized; 174,111 and 171,610 shares issued, 173,029 and 170,480 outstanding		17,303			8,524
Additional paid-in capital		244,284			172,011
Retained earnings		640,551			498,406
Deferred compensation		(87,210	)		(34,241	)
Accumulated other comprehensive (loss) income		(1,901	)		1,608
Treasury stock at cost (1,081 and 1,130 shares)		(32,990	)		(25,452	)
Total stockholders’ investment		780,037			620,856
Total liabilities and stockholders’ investment	$	1,395,068		$	1,080,696

⁽¹⁾ On October 14, 2005, the company’s shareholders approved a 2-for-1 stock split. All share and per share amounts have been restated to reflect the retroactive effect of the stock split.

The accompanying notes are an integral part of these consolidated financial statements.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   48

CONSOLIDATED STATEMENTS OF OPERATIONS

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data) For the years ended December 31,	2005			2004 (1)		2003 (1)
Gross revenues:
Transportation	$	4,655,746		$	3,597,249	$	2,845,934
Sourcing		995,235			710,807		737,939
Information Services		37,967			33,482		29,772
Total gross revenues		5,688,948			4,341,538		3,613,645
Cost of transportation, products, and handling:
Transportation		3,895,422			3,021,512		2,381,231
Sourcing		913,776			659,035		687,566
Total cost of transportation, products, and handling		4,809,198			3,680,547		3,068,797
Gross profits		879,750			660,991		544,848
Selling, general, and administrative expenses:
Personnel		427,311			334,118		279,008
Other selling, general, and administrative expenses		126,078			104,105		89,794
Total selling, general, and administrative expenses		553,389			438,223		368,802
Income from operations		326,361			222,768		176,046
Investment and other income:
Interest income		6,308			2,824		2,246
Non-qualified deferred compensation investment gain		224			154		447
Other		(140	)		292		(105	)
Total investment and other income		6,392			3,270		2,588
Income before provision for income taxes		332,753			226,038		178,634
Provision for income taxes		129,395			88,784		71,265
Net income	$	203,358		$	137,254	$	107,369
Basic net income per share	$	1.20		$	.81	$	.64
Diluted net income per share	$	1.16		$	.79	$	.62
Basic weighted average shares outstanding		170,052			169,228		168,774
Dilutive effect of outstanding stock awards		4,646			3,916		3,364
Diluted weighted average shares outstanding		174,698			173,144		172,138

⁽¹⁾ On October 14, 2005, the company’s shareholders approved a 2-for-1 stock split. All share and per share amounts have been restated to reflect the retroactive effect of the split stock split.

The accompanying notes are an integral part of these consolidated financial statements.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   49

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data) For the years ended December 31, 2005, 2004, and 2003	Common Shares Outstanding(1)		Amount			Additional Paid-in Capital			Retained Earnings			Deferred Compen- sation			Accumulated Other Com- prehensive Income (Loss)			Treasury Stock			Total Stockholders’ Investment
Balance, December 31, 2002	169,012		$	8,451		$	137,510		$	327,912		$	(28,332	)	$	(2,439	)	$	(15,633	)	$	427,469
Net income	—			—			—			107,369			—			—			—			107,369
Other comprehensive income -
Unrealized loss on available-for-sale securities	—			—			—			—			—			(12	)		—			(12	)
Foreign currency translation adjustment	—			—			—			—			—			2,088			—			2,088
Comprehensive income	—			—			—			—			—			—			—			109,445
Cash dividends, $.180 per share	—			—			—			(30,531	)		—			—			—			(30,531	)
Stock issued for employee benefit plans	1,036			52			(5,699	)		—			—			—			15,784			10,137
Issuance of restricted stock	1,438			72			29,463			—			(29,535	)		—			—			—
Issuance of stock options	—			—			10,775			—			(10,775	)		—			—			—
Stock-based compensation expense	—			—			(338	)		—			16,357			—			—			16,019
Excess tax benefit on deferred compensation and employee stock plans	—			—			2,298			—			—			—			—			2,298
Repurchase of common stock	(878	)		(45	)		—			—			—			—			(16,045	)		(16,090	)
Balance, December 31, 2003	170,608			8,530			174,009			404,750			(52,285	)		(363	)		(15,894	)		518,747
Net income	—			—			—			137,254			—			—			—			137,254
Other comprehensive income -
Unrealized loss on available-for-sale securities	—			—			—			—			—			(7	)		—			(7	)
Foreign currency translation adjustment	—			—			—			—			—			1,978			—			1,978
Comprehensive income	—			—			—			—			—			—			—			139,225
Cash dividends, $.255 per share	—			—			—			(43,598	)		—			—			—			(43,598	)
Stock issued for employee benefit plans	1,080			54			(9,551	)		—			—			—			19,993			10,496
Issuance of restricted stock, net of terminations	50			3			5,848			—			(5,851	)		—			—			—
Stock-based compensation expense, net of terminations	40			2			(1,541	)		—			23,895			—			—			22,356
Excess tax benefit on deferred compensation and employee stock plans	—			—			3,246			—			—			—			—			3,246
Repurchase of common stock	(1,298	)		(65	)		—			—			—			—			(29,551	)		(29,616	)
Balance, December 31, 2004	170,480			8,524			172,011			498,406			(34,241	)		1,608			(25,452	)		620,856
Net income	—			—			—			203,358			—			—			—			203,358
Other comprehensive income -
Unrealized gains on available-for-sale securities	—			—			—			—			—			3			—			3
Foreign currency translation adjustment	—			—			—			—			—			(3,512	)		—			(3,512	)
Comprehensive income	—			—			—			—			—			—			—			199,849
Two-for-one stock split(1)	—			8,524			(8,524	)		—			—			—			—			—
Cash dividends, $.355 per share	—			—			—			(61,213	)		—			—			—			(61,213	)
Stock issued for employee benefit plans	1,217			122			(14,743	)		—			—			—			30,170			15,549
Stock issued for acquisitions	380			38			10,381			—			—			—			—			10,419
Issuance of restricted stock	2,178			218			79,622			—			(79,840	)		—			—			—
Stock-based compensation expense, net of terminations	14			1			554			—			26,871			—			1,010			28,436
Excess tax benefit on deferred compensation and employee stock plans	—			—			4,983			—			—			—			—			4,983
Repurchase of common stock	(1,240	)		(124	)		—			—			—			—			(38,718	)		(38,842	)
Balance, December 31, 2005	173,029		$	17,303		$	244,284		$	640,551		$	(87,210	)	$	(1,901	)	$	(32,990	)	$	780,037

⁽¹⁾ On October 14, 2005, the company’s shareholders approved a 2-for-1 stock split. All share and per share amounts have been restated to reflect the retroactive effect of the stock split.

The accompanying notes are an integral part of these consolidated financial statements.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   50

CONSOLIDATED STATEMENTS OF CASH FLOWS

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands) For the years ended December 31,	2005			2004			2003
OPERATING ACTIVITIES
Net income	$	203,358		$	137,254		$	107,369
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,500			11,814			10,992
Gain on insurance proceeds		—			(1,200	)		—
Provision for doubtful accounts		8,878			8,823			5,180
Stock-based compensation		28,436			22,356			16,019
Deferred income taxes and tax benefit on stock-based compensation		4,480			3,156			8,299
Loss on sale/disposal of assets		177			168			355
Changes in operating elements, net of effects of acquisitions:
Receivables		(150,788	)		(90,262	)		(70,965	)
Prepaid expenses and other		(2,366	)		643			(1,993	)
Accounts payable and outstanding checks		78,857			39,863			33,285
Accrued compensation and profit-sharing contribution		31,527			13,629			7,049
Accrued income taxes and other		8,029			9,697			(6,092	)
Net cash provided by operating activities		229,088			155,941			109,498
INVESTING ACTIVITIES
Purchases of property and equipment		(21,824	)		(34,741	)		(8,574	)
Insurance proceeds		—			1,590			—
Sales of property and equipment		—			—			309
Cash paid for acquisitions, net of cash acquired		(60,153	)		(19,112	)		(2,089	)
Purchases of available-for-sale securities		(114,696	)		(70,139	)		(155,820	)
Sales/maturities of available-for-sale securities		113,747			69,366			130,199
Other		(3,748	)		(1,780	)		(2,198	)
Net cash used for investing activities		(86,674	)		(54,816	)		(38,173	)
FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans		15,549			10,496			10,137
Repurchase of common stock		(38,842	)		(29,616	)		(16,090	)
Cash dividends		(51,458	)		(40,902	)		(27,046	)
Proceeds from short-term borrowings		7,066			31,658			26,357
Payments on short-term borrowings		(7,066	)		(31,658	)		(26,357	)
Net cash used for financing activities		(74,751	)		(60,022	)		(32,999	)
Effect of exchange rates on cash		(3,511	)		1,960			2,088
Net increase in cash and cash equivalents		64,152			43,063			40,414
Cash and cash equivalents, beginning of year		166,476			123,413			82,999
Cash and cash equivalents, end of year	$	230,628		$	166,476		$	123,413
Cash paid for income taxes	$	121,168		$	79,747		$	64,651
Cash paid for interest	$	303		$	104		$	65
Supplemental disclosure of noncash activities:
Restricted stock awarded	$	79,840		$	6,800		$	29,535
Stock issued for acquisition	$	10,419			—			—

The accompanying notes are an integral part of these consolidated financial statements.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

C. H. Robinson Worldwide, Inc. and Subsidiaries

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION – C. H. Robinson Worldwide, Inc. and our Subsidiaries (“the Company,” “we,” “us,” or “our”) is a global provider of multimodal transportation services and logistics solutions through a network of 196 branch offices operating in North America, South America, Europe, and Asia. The consolidated financial statements include the accounts of C. H. Robinson Worldwide, Inc. and our majority owned and controlled subsidiaries. Our minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.

USE OF ESTIMATES – The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. We are also required to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our ultimate results could differ from those estimates.

REVENUE RECOGNITION – Gross revenues consist of the total dollar value of goods and services purchased from us by customers. Gross profits are gross revenues less the direct costs of transportation, products, and handling. We act principally as the service provider for these transactions and recognize revenue as these services are rendered or goods are delivered. At that time, our obligations to the transactions are completed and collection of receivables is reasonably assured. EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, establishes the criteria for recognizing revenues on a gross or net basis. Nearly all transactions in our Transportation and Sourcing businesses are recorded at the gross amount we charge our customers for the service we provide and goods we sell. In these transactions, we are the primary obligor, we are a principal to the transaction, we have all credit risk, we maintain substantially all risks and rewards, 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 customs brokerage, transportation management, and all transactions in Information Services are recorded at the net amount we charge our customers for the service we provide because many of 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 the future. 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 at the current exchange rate as of the end of the year. Statement of operations items are translated at average exchange rates during the year. The resulting translation adjustment is recorded as a

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   52

separate component of comprehensive income in our statement of stockholders’ investment.

SEGMENT REPORTING AND GEOGRAPHIC INFORMATION – We have adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 131, Disclosure About Segments of an Enterprise and Related Information. SFAS No. 131 establishes accounting standards for segment reporting.

We operate in the third party logistics industry. We provide a wide range of products and services to our customers and carriers including transportation services, product sourcing, freight consolidation, contract warehousing, and information services. Each of these is a significant component to optimizing the logistics solution for our customers.

These services are performed throughout our branch offices by the same group of people, as an integrated offering for which our customers are provided a single invoice. Over 30% of our transactions are shared transactions between branches. Our branches work together to complete transactions and collectively meet the needs of our customers. For our top 100 customers (who comprise approximately one-third of our gross profits), we often coordinate our efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. In addition, our methodology of providing services is very similar across all branches. Our North American branches have a common technology platform that they use to match customer needs with supplier capabilities, to collaborate with other branch locations, and to utilize centralized support resources to complete all facets of the transaction. Accordingly, our chief operating decision maker analyzes our business as a single segment relying on gross profits and operating income for each of our branch offices as the primary performance measures.

The following table presents our gross revenues (based on location of the customer) for the years ended December 31 and our long-lived assets as of December 31 by geographic regions (in thousands):

	2005		2004		2003
Gross revenues
United States	$	5,269,526	$	4,022,795	$	3,437,269
Other locations		419,422		318,743		176,376
	$	5,688,948	$	4,341,538	$	3,613,645

	2005		2004
Long-lived assets
United States	$	82,475	$	56,617
Other locations		4,675		4,057
	$	87,150	$	60,674

CASH AND CASH EQUIVALENTS – Cash and cash equivalents consist primarily of highly liquid investments with an original maturity of three months or less. The carrying amount approximates fair value due to the short maturity of the instruments.

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PREPAID EXPENSES AND OTHER – Prepaid expenses and other include such items as prepaid rent, software maintenance contracts, insurance premiums, 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 straight-line methods over the estimated lives of the assets of 3 to 30 years.

Amortization of leasehold improvements is computed over the shorter of the lease term or the estimated useful lives of the improvements.

We recognized depreciation expense of $12.7 million in 2005, $9.3 million in 2004, and $8.8 million in 2003. A summary of our property and equipment as of December 31 is as follows (in thousands):

	2005			2004
Furniture, fixtures, and equipment	$	78,136		$	68,943
Building		16,937			—
Corporate aircraft		9,000			9,000
Leasehold improvements		5,852			6,057
Land		3,500			—
Construction in progress		390			18,417
Less accumulated depreciation		(53,094	)		(51,295	)
Net property and equipment	$	60,721		$	51,122

INTANGIBLE ASSETS – Goodwill is the difference between the purchase price of a company and the fair market value of the acquired company’s net assets. Other intangible assets include customer lists, carrier lists, and non-compete agreements. These intangible assets are being amortized using the straight-line method over their estimated lives, ranging from three to five years. Goodwill is no longer being amortized and is tested for impairment using a fair value approach. Goodwill is tested for impairment annually or more frequently if events warrant. Intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. See Note 4.

OTHER ASSETS – Other assets includes such items as purchased and internally developed software, and the investment related to our nonqualified deferred compensation plan. We recognized amortization expense of purchased and internally developed software of $1.9 million on 2005, $1.8 million in 2004, and $1.6 million in 2003. Amortization expense is computed using straight-line methods over three years.

A summary of our purchased and internally developed software as of December 31 is as follows (in thousands):

	2005			2004
Purchased software	$	11,525		$	9,056
Internally developed software		4,364			3,442
Less accumulated amortization		(11,197	)		(9,314	)
Net software	$	4,692		$	3,184

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INCOME TAXES – Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable. Changes in tax rates are reflected in the tax provision as they occur.

COMPREHENSIVE INCOME – Comprehensive income includes any changes in the equity of an enterprise from transactions and other events and circumstances from nonowner sources. Our two components of comprehensive income are foreign currency translation adjustment and unrealized gains and losses from investments. They are presented on our consolidated statements of stockholders’ investment.

RECLASSIFICATIONS – Certain reclassifications have been made to the 2004 and 2003 financial statements and footnotes to conform to the presentation used in 2005.

COMMON STOCK SPLIT – On October 14, 2005, our shareholders approved a two-for-one stock split. For shareholders of record as of the end of business on October 14, 2005, every share owned was exchanged for two shares of common stock. All prior period common shares and per share disclosures have been restated to reflect the split.

NOTE 2: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board (FASB) released its final revised standard, Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment. SFAS 123R requires that a public entity measure the cost of equity based service awards based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide service in exchange for the award or the vesting period. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. SFAS 123R also requires that the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as is currently required. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after the effective date. Adoption of SFAS 123R is required for interim or annual periods beginning after December 31, 2005. We adopted the fair value recognition provisions of SFAS 123 in the first quarter of 2004 through the provisions allowed in SFAS 148. The adoption of SFAS 123R in the first quarter of 2006 will not have a material impact on our consolidated financial position, results of operations, or cash flow.

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NOTE 3: AVAILABLE-FOR-SALE SECURITIES

Our investments consist of investment-grade marketable debt securities, auction rate preferred securities, and municipal auction rate notes. These investments, which have original maturities beyond one year, are classified as short-term based on their highly liquid nature and because these securities represent the investment of cash that is available for current operations. All are classified as available-for-sale and recorded at fair value. The carrying value of available-for-sale securities approximates fair market value due to interest rates that are reset frequently. Unrealized holding gains and losses are recorded, net of any tax effect, as a separate component of accumulated other comprehensive income. The gross realized gains and losses on sales of available-for-sale securities were not material for the years ended December 31, 2005, 2004, and 2003. As of December 31, 2005 and 2004, we had $122.6 million and $121.6 million in available-for-sale securities.

The fair value of available-for-sale debt securities at December 31, 2005, by contractual maturity, is shown below (in thousands):

	Cost basis		Estimated fair value
Due in one year or less	$	7,350	$	7,414
Due after one year through five years		4,700		4,735
Due after five years through ten years		6,850		6,868
Due after 10 years		103,125		103,534
Total	$	122,025	$	122,551

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NOTE 4: GOODWILL AND OTHER INTANGIBLE ASSETS

A summary of our intangible assets as of December 31 is as follows (in thousands):

	Unamortizable intangible assets			Amortizable intangible assets
December 31, 2004
Gross	$	185,964		$	6,054
Accumulated amortization		(11,929	)		(3,202	)
Net	$	174,035		$	2,852
December 31, 2005
Gross	$	235,066		$	25,584
Accumulated amortization		(11,929	)		(7,064	)
Net	$	223,137		$	18,520

We completed an impairment test to determine the impact of adopting SFAS No. 142 on our earnings and financial position. This impairment test did not result in any impairment losses.

The change in the carrying amount of goodwill for the year ended December 31, 2005, is as follows (in thousands):

Balance December 31, 2004	$	174,035
Goodwill associated with acquisitions		49,102
Balance December 31, 2005	$	223,137

Amortization expense for other intangible assets was $3.9 million in 2005, $0.8 million in 2004, and $0.6 million in 2003. Estimated amortization expense for each of the five succeeding fiscal years based on the intangible assets at December 31, 2005, is as follows (in thousands):

2006	$	4,616
2007		4,454
2008		4,442
2009		4,224
2010		784

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NOTE 5: LINES OF CREDIT

We have 3.5 million euros available under a line of credit at an interest rate of Euribor plus 45 basis points (2.85% at December 31, 2005). This discretionary line of credit has no expiration date. During 2005, we borrowed 6.5 million euros, or $7.1 million, all of which was repaid during the year. During 2004, we borrowed 25.4 million euros, or $31.7 million, all of which was repaid during the year. As of December 2005 and 2004, the outstanding balance was zero. Out credit agreement contains certain financial covenants, but does not restrict the payment of dividends. We were in compliance with all covenants of this agreement as of December 31, 2005.

NOTE 6: INCOME TAXES

C. H. Robinson Worldwide, Inc. and its 80% (or more) owned U.S. subsidiaries file a consolidated federal income tax return. We file unitary or separate state returns based on state filing requirements.

The components of the provision for income taxes consist of the following for the period ended December 31 (in thousands):

	2005			2004			2003
Tax provision:
Federal	$	104,759		$	73,459		$	53,573
State		19,031			11,495			9,387
Foreign		6,108			3,920			2,303
		129,898			88,874			65,263
Deferred provision (benefit)		(503	)		(90	)		6,002
Total provision	$	129,395		$	88,784		$	71,265

A 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 is as follows:

	2005		2004		2003
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	3.5		3.4		3.2
Stock-based compensation	0.4		0.6		1.0
Foreign and other	0.0		0.3		0.7
	38.9	%	39.3	%	39.9	%

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Deferred tax assets (liabilities) are comprised of the following at December 31 (in thousands):

	2005			2004
Deferred tax assets:
Accrued compensation	$	21,570		$	14,060
Receivables		10,932			8,087
Other		2,694			1,506
Deferred tax liabilities:
Intangible assets		(18,479	)		(14,417	)
Prepaid assets		(6,280	)		—
Long-lived assets		(5,890	)		(3,551	)
Other		(17	)		(1,658	)
Net deferred tax assets	$	4,530		$	4,027

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 tax years; however, actual settlements may differ from amounts accrued.

NOTE 7: CAPITAL STOCK AND STOCK AWARD PLANS

Effective January 1, 2004, we adopted the fair value recognition provisions of SFAS 123, Accounting for Stock-Based Compensation, using the retroactive restatement method described in SFAS 148, Accounting for Stock-Based Compensation – Transition and Disclosure. Under the fair value recognition provisions of SFAS 123, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. In connection with the use of the retroactive restatement method, income statement amounts have been restated for the year ending December 31, 2003, to reflect results as if the fair-value method of SFAS 123 had been applied from its original effective date. Total compensation cost recognized in income for stock based compensation awards was $34.7 million in 2005, $22.4 million in 2004, and $16.3 million in 2003.

PREFERRED STOCK – Our Certificate of Incorporation authorizes the issuance of 20,000,000 shares of Preferred Stock, par value $.10 per share. There are 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 the stockholders. The Board of Directors may issue the Preferred Stock in one or more series and fix the designation and relative powers. These include voting powers, preferences, rights, qualifications, limitations, and restrictions of each series. The issuance of

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any such series may have an adverse effect on the rights 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 of Preferred Stock which may from time to time be outstanding, holders of Common Stock are entitled to receive dividends out of funds legally available, when and 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 or dissolution.

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 of directors. Holders of Common Stock are not entitled to cumulative voting; the holders of more than 50% of the outstanding Common Stock can elect all of any class of directors if they choose to do so. The stockholders do not have preemptive rights. All outstanding shares of Common Stock are fully paid and nonassessable.

STOCK AWARD PLANS – Our 1997 Omnibus Stock Plan allows us to grant certain stock awards, including stock options at fair market value and restricted shares and units, to our key employees and outside directors. A maximum of 18,000,000 shares can be granted under this plan; 2,671,190 shares were available for stock awards as of December 31, 2005.

The contractual lives of all options granted are 10 years. Options vest over a five year period from the date of grant, with none vesting the first year and one quarter vesting each year after that. Options issued to non-employee directors vest immediately.

Significant option groups outstanding at December, 31, 2005 and related weighted-average exercise price and remaining life information follows:

Exercise Price Range	Options Outstanding	Weighted Average Exercise Prices		Weighted Average Remaining Life (years)	Options Exercisable	Weighted Average Exercise Price for Exercisable Shares
$ 4.50-6.30	983,077	$	5.86	2.8	983,077	$	5.86
10.17	1,331,957		10.17	4.8	1,331,957		10.17
13.31-14.82	4,127,652		14.51	6.3	1,969,779		14.37
15.37-17.50	183,948		15.59	9.3	160,198		15.57
19.34	30,000		19.34	7.8	7,500		19.34
	6,656,634	$	12.41	5.6	4,452,511	$	11.29

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The fair value per option was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	2005 Grants			2004 Grants			2003 Grants
Risk-free interest rate		2.5-4.3	%		2.0-2.5	%		2.85-3.5	%
Expected dividend yield		1.0	%		1.0	%		1.0	%
Expected volatility factor		19.9-23.3	%		22.3-23.7	%		24.3-38.2	%
Expected option term		2-8 years			2-6 years			7 years
Fair value per option	$	4.08-13.59		$	4.98-9.23		$	4.38-5.86

The following schedule summarizes stock option activity in the plan.

	Shares		Stock Options Weighted Average Exercise Price
Outstanding at
December 31, 2002	7,839,038		$	10.32
Granted	1,842,830			14.96
Exercised	(806,044	)		7.15
Terminated	(234,570	)		8.45
Outstanding at
December 31, 2003	8,641,254			11.66
Granted	70,624			22.00
Exercised	(946,598	)		7.98
Terminated	(72,728	)		14.74
Outstanding at
December 31, 2004	7,692,552			12.17
Granted	48,662			27.96
Exercised	(1,055,533	)		10.29
Terminated	(29,047	)		14.66
Outstanding at
December 31, 2005	6,656,634		$	12.42
Exercisable at
December 31, 2003	2,936,162		$	8.30
Exercisable at
December 31, 2004	3,752,692		$	10.09
Exercisable at
December 31, 2005	4,452,511		$	11.29

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During 2005, 2004, and 2003, we awarded to certain key employees restricted shares and restricted units, which were granted under the 1997 Omnibus Stock Plan. These shares and units are subject to certain vesting requirements based on the performance of the company over a five year period. The value of such stock was established by the market price on the date of grant. It is recorded as deferred compensation within stockholders’ investment in the accompanying financial statements and is being expensed over the estimated vesting period.

The following table summarizes our restricted stock grants awarded and vested:

Grant Year	Awards Granted	Awards vested at December 31, 2005
2005	2,394,290	130,650
2004	293,850	240,191
2003	1,732,050	1,660,720

During 2004, 2002, and 2000, we awarded to certain key employees 6,000, 68,900, and 474,584 restricted shares, which were granted under the 1997 Omnibus Stock Plan. The shares are subject to certain vesting requirements. The value of such stock was established by the market price on the date of grant, and was recorded as deferred compensation within stockholders investment in the accompanying financial statements and is being amortized ratably over the applicable restricted stock vesting period. Expense related to all restricted shares and units was $27.1 million in 2005, $12.7 million in 2004, and $7.7 million in 2003.

EMPLOYEE STOCK PURCHASE PLAN – Our 1997 Employee Stock Purchase Plan allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of the quarter discounted by 15%. Shares are vested immediately. Employees purchased approximately 238,000, 238,000, and 268,000 shares of our Common Stock under this plan at an aggregate cost of $6.1 million, $4.6 million, and $4.2 million in 2005, 2004, and 2003.

SHARE REPURCHASE PROGRAMS – In conjunction with our initial public offering in 1997, our Board of Directors authorized a stock repurchase plan that allows management to repurchase 4,000,000 common shares for reissuance upon the exercise of employee stock options and other stock plans There are no shares remaining to be repurchased under this original plan.

During 1999, the Board of Directors authorized a second stock repurchase plan, allowing for the repurchase of 8,000,000 shares. We purchased 1,240,000 and 1,297,600 of our common stock for the treasury at an aggregate cost of $38.8 million in 2005 and $29.6 million in 2004 under this stock repurchase plan. There are 5,148,000 shares remaining for repurchase under this plan.

We reissued shares totaling 1,217,000, 1,080,000, and 1,036,000 in 2005, 2004, and 2003 for stock award and employee benefit plans.

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NOTE 8: COMMITMENTS AND CONTINGENCIES

EMPLOYEE BENEFIT PLANS – We participate in a defined contribution profit-sharing and savings plan which qualifies under section 401(k) of the Internal Revenue Code and covers all eligible employees. Annual profit-sharing contributions are determined by our Board of Directors, in accordance with the provisions of the plan. We can also elect to make matching contributions to the plan at the discretion of our Board of Directors. Profit-sharing plan expense, including matching contributions, was approximately $26.6 million in 2005, $15.6 million in 2004, and $11.5 million in 2003.

NONQUALIFIED DEFERRED COMPENSATION PLAN – The Robinson Companies Nonqualified Deferred Compensation Plan provides certain employees the opportunity to defer a specified percentage or dollar amount of their cash and stock compensation. Participants may elect to defer up to 100% of their cash compensation. The accumulated benefit obligation was $2.7 million and $2.9 million as of December 31, 2005 and 2004, respectively. We have purchased investments to fund the future liability. The investments had an aggregate market value of $2.7 million as of December 31, 2005 and $2.9 million in 2004, respectively, and are included in other assets in the consolidated balance sheets.

LEASE COMMITMENTS – We lease certain facilities and equipment under operating leases. Lease expense was $19.4 million for 2005, and $16.3 million for 2004, and $16.3 million for 2003. Minimum future lease commitments under noncancelable lease agreements in excess of one year as of December 31, 2005 are as follows (in thousands):

2006	$	16,005
2007		14,858
2008		13,430
2009		10,347
2010		6,629
Thereafter		24,403
Total	$	85,672

LITIGATION – During 2002, we were named as a defendant in two lawsuits by a number of present and former employees. The first lawsuit alleges a hostile working environment, unequal pay, promotions, and opportunities for women, and failure to pay overtime. The second lawsuit alleges a failure to pay overtime. The plaintiffs in both lawsuits seek unspecified monetary and non-monetary damages and class action certification. On March 31, 2005, the judge issued an order denying class certification for the hostile working environment claims, and allowing class certification for the claims of gender discrimination in pay and promotion. This is a procedural step, and we continue to deny all allegations and vigorously defend the suits. In addition, we have insurance coverage for some of the claims asserted in the suits. The judge also granted our motions for summary judgement as to the hostile working environment claims of ten of the named plaintiffs, and dismissed those claims. Currently,

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the amount of any loss is not expected to be material to us; however, unfavorable developments could have a material adverse effect on our consolidated financial statements.

We are not otherwise subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, none of which is expected to have a material adverse effect on our financial condition, results of operations, and cash flows.

NOTE 9: ACQUISITIONS

In February 2005, we acquired the ongoing operations and certain assets and assumed certain liabilities of three produce sourcing and marketing companies, FoodSource, Inc. and FoodSource Procurement, LLC and Epic Roots, Inc. We paid approximately $42.5 million in cash and $10.4 million (approximately 390,000 shares) in C.H. Robinson Worldwide, Inc. common stock for the three entities. In addition, there are contingent additional cash payments to the sellers over a three year period based on the results of the acquired business up to a predetermined maximum amount of $27.2 million.

During the third quarter, we acquired two freight forwarding businesses, in separate transactions: Hirdes Group Worldwide and Bussini Transport S.r.l. The purchase price for these two entities was $20.7 million.

The results of operations and financial condition of these acquisitions have been included in our consolidated financial statements since their respective acquisition dates. Goodwill recognized in these transactions amounted to $49.1 million. Other intangible assets related to these transactions amounted to $2.2 million.

NOTE 10: SUBSEQUENT EVENTS

In January, 2006, we entered into a contract to purchase land in Eden Prairie, Minnesota. We expect that we could build office space up to 250,000 square feet to expand our operations as needed. The purchase of the land will close in late 2006, with a total purchase price of $11.0 million.

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NOTE 11: SUPPLEMENTARY DATA (UNAUDITED)

Our results of operations for each of the quarters in the years ended December 31, 2005 and 2004 are summarized below (in thousands, except per share data).

2005 (1)	March 31		June 30		September 30		December 31
Gross revenues:
Transportation	$	999,936	$	1,122,305	$	1,218,026	$	1,135,479
Sourcing		206,109		273,549		257,409		258,168
Information Services		8,895		9,288		9,934		9,850
Total gross revenues		1,214,940		1,405,142		1,485,369		1,583,497
Cost of transportation, products, and handling:
Transportation		826,090		938,737		1,020,051		1,109,544
Sourcing		189,468		249,993		236,444		237,871
Total cost of transportation, products, and handling		1,015,558		1,189,730		1,256,495		1,347,415
Gross profits		199,382		215,412		228,874		236,082
Income from operations		67,792		80,329		85,618		92,622
Net income	$	41,776	$	49,347	$	54,089	$	58,146
Basic net income per share	$	.25	$	.29	$	.32	$	.34
Diluted net income per share	$	.24	$	.28	$	.31	$	.33
Basic weighted average shares outstanding		169,876		170,236		170,105		169,990
Dilutive effect of outstanding stock awards		4,256		4,158		4,428		5,741
Diluted weighted average shares outstanding		174,132		174,394		174,533		175,731
2004(1)	March 31		June 30		September 30		December 31
Gross revenues:
Transportation	$	772,449	$	871,678	$	943,256	$	1,009,866
Sourcing		166,243		197,244		172,026		175,294
Information Services		7,918		8,179		8,524		8,861
Total gross revenues		946,610		1,077,101		1,123,806		1,194,021
Cost of transportation, products, and handling:
Transportation		642,609		737,462		793,108		848,333
Sourcing		154,417		181,584		158,525		164,509
Total cost of transportation, products, and handling		797,026		919,046		951,633		1,012,842
Gross profits		149,584		158,055		172,173		181,179
Income from operations		47,171		52,517		61,011		62,069
Net income	$	29,072	$	32,278	$	37,349	$	38,555
Basic net income per share	$	.17	$	.19	$	.22	$	.23
Diluted net income per share	$	.17	$	.18	$	.21	$	.22
Basic weighted average shares outstanding		169,242		169,354		169,232		169,086
Dilutive effect of outstanding stock awards		3,586		3,772		3,864		4,440
Diluted weighted average shares outstanding		172,828		173,126		173,096		173,526

⁽¹⁾ On October 14, 2005, the company’s shareholders approved a 2-for-1 stock split. All share and per share amounts have been restated to reflect the retroactive effect of the stock split.

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   65

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

C. H. Robinson Worldwide, Inc. and Subsidiaries

To the Board of Directors and Stockholders of C. H. Robinson Worldwide, Inc.:

We have audited the accompanying consolidated balance sheets of C. H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements 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 that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2006 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Minneapolis, Minnesota

March 16, 2006

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

C. H. Robinson Worldwide, Inc. and Subsidiaries

To the Board of Directors and Stockholders of C. H. Robinson Worldwide, Inc.:

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control, that C. H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from their assessment the internal control over financial reporting at Hirdes Group Worldwide (“Hirdes”), and Bussini Transport S.r.l. (“Bussini”), which were acquired during the third quarter of 2005 and whose financial statements reflect total assets and revenues constituting less than 1 percent of the related consolidated financial statement amounts as of and for the year ended December 31, 2005. Accordingly, our audit did not include the internal control over financial reporting at Hirdes and Bussini. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of 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 that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets 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 of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2005, of the Company and our report dated March 16, 2006 expressed an unqualified opinion on those financial statements.

Minneapolis, Minnesota

March 16, 2006

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   67

MANAGEMENT’S REPORT ON INTERNAL CONTROL

C. H. Robinson Worldwide, Inc. and Subsidiaries

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective 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 an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2005.

During the third quarter, we acquired two freight forwarding businesses in separate transactions, Hirdes Group Worldwide (“Hirdes”), and Bussini Transport S.r.l. (“Bussini”), which were not included in our assessment of the effectiveness of our internal control over financial reporting. As a result, management’s conclusion regarding the effectiveness of our internal control over financial reporting does not extend to these companies.

Our management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2005 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

John P. Wiehoff President and Chief Executive Officer	Chad M. Lindbloom Vice President and Chief Financial Officer

C. H. ROBINSON WORLDWIDE, INC. ANNUAL REPORT   |   68

EX-21

EXHIBIT 21

SUBSIDIARIES OF C.H. ROBINSON WORLDWIDE, INC.

The Company’s consolidated subsidiaries are shown below together with the percentage of voting securities owned and the state or jurisdiction of organization of each subsidiary. The names have been omitted for subsidiaries which, if considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary. Subsidiaries of subsidiaries are indented in the following table:

Subsidiaries	Percentage of Outstanding Voting Securities Owned
C.H. Robinson International, Inc. (Minnesota)	100	%
C.H. Robinson Worldwide Chile, S.A. (Santiago, Chile)	99.98	%
C.H. Robinson Venezuela, C.A. (Venezuela)	100	%
Spica Servicios Logisticos, C.A. (Venezuela)	100	%
R.C. Aduanas, C.A. (Venezuela)	100	%
C.H. Robinson de Mexico, S.A. de C.V. (Mexico)	100	%
C.H. Robinson Company (Canada) Ltd. (Ontario, Canada)	100	%
C.H. Robinson Company (Delaware)	100	%
C.H. Robinson Company LP (Minnesota)	100	%
C.H. Robinson Company, Inc. (Minnesota)	100	%
CHR Aviation LLC (Minnesota)	100	%
Robinson Holding Company (Minnesota)	100	%
Wagonmaster Transportation Co. (Minnesota)	100	%
Payment & Logistics Services, Inc. (Minnesota)	100	%
T-Chek Systems, Inc./Les Sytemes T-Chek, Inc. (Minnesota)	100	%
C.H. Robinson Worldwide Foundation (Minnesota)	100	%
C.H. Robinson Worldwide Logistics (Dalian) Co. Ltd (Dalian, China)	100	%

C.H. Robinson Worldwide (Hong Kong) Ltd (Hong Kong)	100	%
C.H. Robinson Worldwide Argentina, S.A. (Buenos Aires, Argentina)	100	%
Robinson Logistrica Do Brasil Ltda (Sao Paulo, Brazil)	100	%
C.H. Robinson Belgium BVBA (Antwerp, Belgium)	100	%
C.H. Robinson Czech Republic s.r.o. (Prague, Czech Republic)	100	%
C.H. Robinson SAS (Saint-Contest, France)	100	%
C.H. Robinson France SARL. (Caen, France)	100	%
C.H. Robinson / Hirdes International GmbH (Hamburg, Germany)	100	%
C.H. Robinson Deutschland GmbH (Hamburg, Germany)	100	%
C.H. Robinson Hungary, LLC (C.H. Robinson Hungaria Kft) (Budapest, Hungary)	100	%
C.H. Robinson Europe BV Ireland (Dublin, Republic of Ireland)	100	%
Robinson Italia S.r.l. (Baranzate di Bollate, Italy)	100	%
C.H. Robinson International Italy, SRL (Milano, Italy)	100	%
C.H. Robinson Europe B.V. (Valkenswaard, the Netherlands)	100	%
C.H. Robinson Poland Sp. z.o.o. (Warshaw, Poland)	100	%
C.H. Robinson Iberica (Madrid, Spain)	100	%
C.H. Robinson (UK) Ltd (Surrey, England)	100	%

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-53047 on Form S-8, No. 333-41027 on Form S-8, No. 333-41899 on Form S-8, No. 333-47080 on Form S-8, No. 333-67718 on Form S-8, and No. 333-110396 on Form S-8 of our reports dated March 16, 2006, relating to the financial statements and financial statement schedule of C.H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) and management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2005.

Minneapolis, Minnesota

March 16, 2006

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of John P. Wiehoff and Linda U. Feuss (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, 2005, and any and all amendments to said Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and to file the same with such other authorities as necessary, granting unto said 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 the premises, 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/ D.R. Verdoorn D.R. Verdoorn	March 16, 2006
/s/ ReBecca Koenig Roloff ReBecca Koenig Roloff	March 16, 2006
/s/ Robert Ezrilov Robert Ezrilov	March 16, 2006
/s/ Gerald A. Schwalbach Gerald A. Schwalbach	March 16, 2006
/s/ Wayne M. Fortun Wayne M. Fortun	March 16, 2006
/s/ Kenneth E. Keiser Kenneth E. Keiser	March 16, 2006
/s/ Brian P. Short Brian P. Short	March 16, 2006
/s/ Michael W. Wickham Michael W. Wickham	March 16, 2006

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, 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 statements made, 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 financial condition, 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 Exchange Act 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 registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the 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, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 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 the disclosure 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’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 to adversely 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 over financial reporting.

Date: March 16, 2006

/s/ JOHN P. WIEHOFF
Signature
Name:	John P. Wiehoff
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Chad 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 statements made, 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 financial condition, 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 Exchange Act 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 registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the 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, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 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 the disclosure 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’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’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 to adversely 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 over financial reporting.

Date: March 16, 2006

/s/ CHAD M. LINDBLOOM
Signature
Name:	Chad M. Lindbloom
Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of C.H. Robinson Worldwide, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2005 as filed with 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; and

2. 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. WIEHOFF

John P. Wiehoff

Chief Executive Officer

March 16, 2006

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of C.H. Robinson Worldwide, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2005 as filed with 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; and

2. 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. LINDBLOOM

Chad M. Lindbloom

Chief Financial Officer

March 16, 2006