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, 2006

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:	Common Stock, par value $.10 per share
	Preferred Share Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:	None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  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, 2006 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $9,121,857,000 (based on the last sale price of such stock as quoted on The NASDAQ National Market ($53.50) on such date).

As of February 26, 2007, the number of shares outstanding of the registrant’s Common Stock, par value $.10 per share, was 173,096,332.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Annual Report to Stockholders for the year ended December 31, 2006 (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 17, 2007 (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 the world with 2006 gross revenues of $6.6 billion. We provide freight transportation services and logistics solutions to companies of all sizes, in a wide variety of industries. During 2006, we handled approximately 5.2 million shipments for more than 25,000 customers. We operate through a network of 214 offices, which we call branches, in North America, Europe, Asia, and South America. 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 45,000 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 other 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 funds transfer. 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.

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Our business model has been the main driver of our strong historical results and has positioned us for continued growth. One of our competitive advantages is our large branch network of 214 offices, staffed by approximately 5,200 salespeople. These branch employees are in close proximity to both customers and transportation providers, which gives them broad knowledge of their local markets and enables them to respond quickly to customers’ and transportation providers’ 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 large multi-location customers, we often coordinate our efforts in one branch and rely on multiple branch locations to deliver specific geographic or modal needs. 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 May, 2006, we acquired certain assets of Payne, Lynch & Associates, Inc. (“Payne Lynch”), a non-asset based third party logistics company that specializes in flatbed and over dimensional freight brokerage. Payne Lynch had annual gross revenues of approximately $35 million in 2005. During the fourth quarter, we acquired certain assets of Triune Freight Private Ltd. and Triune Logistics Private Ltd., (collectively “Triune”), a third party logistics provider based in India. Triune has annual gross revenues of approximately $11 million.

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 hire the appropriate carrier for our 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.

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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 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 key providers to 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, 2006, 2005, and 2004 and our long-lived assets as of December 31, 2006 and 2005, in the United States and in foreign locations.

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

Transportation Gross Profits

(in thousands)

	Year Ended December 31,
	2006		2005		2004		2003		2002
Truck(1)	$	822,954	$	666,605	$	501,940	$	401,709	$	361,353
Intermodal		36,176		31,392		29,960		28,103		21,111
Ocean		37,150		29,182		20,558		19,027		17,007
Air		21,533		13,321		8,570		4,891		3,068
Miscellaneous(2)		28,152		19,824		14,709		10,973		8,772
Total	$	945,965	$	760,324	$	575,737	$	464,703	$	411,311

(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 2006, 2005, and 2004.

Sourcing

Throughout our 101-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.

For several years, 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 have a proprietary brand of produce, The Fresh 1^®, which includes a wide range of fruits and vegetables that are uniform in quality and top grade, and 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 branded and preferred supplier 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 2006 and 2005, and approximately 8% of our gross profits in 2004.

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 2006 and 2005 and 5% of our gross profits in 2004.

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Organization

To keep us close to our customers and markets, we operate through a network of offices, which we call “branches.” We currently have 214 offices, up from 196 in 2005. 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. Over one-third 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 to 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 centralized 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 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, Europe, Asia, and South America. 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 performance-based 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 401(k) 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. Within that plan, in 2003 we began regularly issuing restricted stock and restricted stock units as our primary equity awards because we believe these awards are an effective tool for creating long term ownership and alignment between employees and our shareholders. For most restricted stock awards, restricted shares and units are available to vest over five calendar years, based on company performance.

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.

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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 executives 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	45	chief executive officer and chairman of the board
James E. Butts	51	vice president
Linda U. Feuss	50	vice president, general counsel and secretary
James P. Lemke	39	vice president, produce
Chad M. Lindbloom	42	vice president and chief financial officer
Thomas K. Mahlke	35	corporate controller
Scott A. Satterlee	38	vice president
Mark A. Walker	49	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 and was elected chairman of the board effective December 31, 2006. 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. John also serves on the Board of Directors of Donaldson Company, Inc., a leading worldwide provider of filtration systems and replacement parts. He holds a Bachelor of Science degree from St. John’s University.

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 and a Masters of Business Administration from Phoenix 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 and president of T-Chek Systems 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, 2006, we had a total of 6,768 employees, of whom approximately 6,000 were located in our branch offices. Services such as accounting, information technology, legal, marketing communications, human resource support, credit and claims management, and carrier services are supported centrally.

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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 2006, we served over 25,000 customers worldwide, ranging from Fortune 100 companies to small businesses in a wide variety of industries. During 2006, no customer accounted for more than 7% of gross revenues or 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 Transportation Providers

We continually work on establishing relationships with good transportation providers 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. 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. We rely on them to provide us with information regarding the status of shipments during transit and upon delivery.

As of December 31, 2006, we had qualified approximately 45,000 transportation providers worldwide, of which the vast majority are motor carriers. To strengthen and maintain our relationships with motor carriers, our salespeople regularly communicate with carriers 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, along with offering in-trip advances through our T-Chek subsidiary.

These motor 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 1% of our total cost of transportation in 2006. Approximately 75% of our shipments in 2006 were transported by motor carriers that had less than 100 tractors. 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.

We also have 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.

In our non-asset based ocean transportation (NVOCC) and freight forwarding business, we have contracts with most of the major ocean carriers which support a variety of service and rate needs for our customers. We negotiate annual contracts that establish the predetermined rates we agree to pay our ocean carriers. The rates are negotiated based on expected volumes from our customers, specific trade lane requirements, and anticipated growth in the international shipping marketplace. These contracts are often amended throughout the year to reflect changes in market conditions for our business, such as additional trade lanes.

In our international air freight forwarding business, we purchase transportation services from approximately 200 air carriers through charter services, block space agreements, and transactional spot market negotiations. Through charter services we contract part or all of an airplane to meet customer requirements. Our block space agreements are annual contracts that include fixed allocations for predetermined flights at agreed upon rates that are reviewed annually or throughout the year. The transactional negotiations afford us the ability to capture excess capacity at prevailing market rates for a specific shipment.

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 that compete with us.

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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. This network also offers customers higher service as responsibility for shipments is commonly shared across branches, to provide nationwide coverage and local market knowledge,

• our 45,000 carrier relationships,

• our size, relative to other providers. Because of the large number of transactions we do annually, 5.2 million in 2006, 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 non-asset based model, which enables us to remain flexible in our service offerings to our customers,

• 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 5.2 million shipments annually, 25,000 customer relationships, and 45,000 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 CHRWtrucks.com, customers and carriers can contract for shipments or equipment as well as 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 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

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 a non-vessel operating common carrier for which we maintain separate bonds and licenses for each. 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 as required by the Perishable Agricultural Commodities Act (“PACA”). Other sourcing and distribution activities may be subject to various federal and state food and drug statutes and regulations. 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

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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 auto and general liability insurance and $25,000 in cargo insurance. Many carriers have insurance exceeding these minimum requirements. 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 for the years 2004 through 2006 and a retention of $3 million per incident for 2007.

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 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 United States; risks associated with the produce industry including food safety and contamination use; 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.

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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 gross profits 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,

• 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.

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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.

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 our 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 for years 2004 through 2006 and a retention of $3 million per incident for 2007. 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.

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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.

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. Our top 100 customers comprise approximately one-third of consolidated gross profits with none of them individually exceeding 3 percent. 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. We have begun construction of an additional 105,000 square feet of office space in Eden Prairie, Minnesota for expansion of our corporate headquarters.

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 largest location in Chicago listed below. Our branch offices range in space from 1,000 to 153,000 square feet. The following table lists our largest U.S. locations:

City/State	Approximate Square Feet
Eden Prairie, MN	153,000
Chicago, IL	80,000
Atlanta, GA	27,350
Chicago, IL	20,847
Coralville, IA	19,182

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Southfield, MI	18,464
Woodridge, IL	16,914
Elizabeth, NJ	16,500
Elk Grove Village, IL	13,163
Monterrey, CA	12,712
Cordova, TN	11,617
Lisle, IL	11,613
Los Angeles, CA	10,695
Tampa, FL	10,641
Phoenix, AZ	10,294
Paulsboro, NJ	10,046

We also lease approximately 287,000 square feet of warehouse space throughout the United States. The following table lists our largest warehouses:

City/State	Approximate Square Feet
Rochester, NY	54,000
Medley, FL	53,500
Edinburg, TX	48,000
Vancouver, WA	42,700
Bolingbrook, IL	36,000
Elk Grove Village, IL	30,200

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

As we previously disclosed, during 2002 we were named as a defendant in two lawsuits brought by a number of present and former employees. The first lawsuit alleged a hostile working environment, unequal pay, promotions, and opportunities for women, and failure to pay overtime (“FLSA”). The second lawsuit alleges a failure to pay overtime. The plaintiffs in both lawsuits 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 certain claims of gender discrimination in pay and promotion. 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.

The gender discrimination class claims and the remaining two hostile work environment claims were settled in principle on April 11, 2006 and received final approval by the Court on September 18, 2006. The settlement consists of $15 million for all damages, costs, and attorneys’ fees, to be allocated as determined by the Court. The proposed settlement also includes programmatic relief offered by us. As a condition of the settlement, we made no admission of liability. The $15 million is within our insurance coverage limits, and has been fully funded by the insurance carriers. Although it has been fully funded by the insurance carriers, those carriers reserved the right to seek a court ruling that a portion of the settlement was not covered under their policies, and also to dispute payment of certain defense costs incurred in that litigation. These insurance issues are discussed below as “Class Coverage Issues.”

The settlement of the gender discrimination class claims did not include the overtime pay lawsuits, or the claims of putative class members who subsequently filed individual EEOC charges after the denial of class status on March 31, 2005. Currently, fifty-two of those claimants have filed lawsuits. Of those, one was tried to a jury and resulted in a defense verdict, one was voluntarily dismissed, and one was dismissed on our Motion for Summary Judgment. An appeal of that dismissal is pending. We are vigorously defending the remaining charges and lawsuits, and have been advised by plaintiffs’ counsel that no further lawsuits are expected to be filed.

Insurance coverage litigation has been commenced between us and one of our insurance carriers concerning the above-referenced Class Coverage Issues and also concerning insurance coverage for the individual lawsuits. Countersuits seeking a declaratory judgment on these insurance issues are currently pending in Minnesota State Court. We are vigorously asserting its claims for maximum insurance coverage both for the Class Coverage Issues and for the defense and indemnity of the individual suits.

With respect to the FLSA overtime claims, the judge issued an order granting in full our Motion to Decertify the FLSA collective action on September 26, 2006. The judge retained jurisdiction over the named plaintiffs’ FLSA overtime claims and

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dismissed the claims of the opt-in plaintiffs, without prejudice to their right to bring their own claims in separate lawsuits in appropriate venues. Approximately 525 of the dismissed opt-in plaintiffs either filed or joined in lawsuits asserting individual FLSA claims for failure to pay overtime. Approximately five of those individuals have filed voluntary dismissals of their claims. We are vigorously defending the remaining lawsuits in various federal courts.

Currently, the amount of any loss from the individual gender or FLSA claims 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 subject to any other 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

None.

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.

2006	High		Low
Fourth Quarter	$	45.67	$	39.44
Third Quarter		55.18		41.75
Second Quarter		53.56		42.06
First Quarter		50.44		35.55

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

On February 26, 2007, the closing sales price per share of our Common Stock as quoted on the NASDAQ National Market was $52.40 per share. On February 26, 2007, there were approximately 250 holders of record and approximately 55,000 beneficial owners of our Common Stock.

During 1999, our Board of Directors authorized a stock repurchase plan, allowing for the repurchase of 8,000,000 shares. We purchased approximately 1,926,500 shares of our Common Stock in 2006 under this plan. There are approximately 3,220,000 shares remaining for purchase under this plan. We intend to fund any future repurchases with internally generated funds.

We declared quarterly dividends during 2005 for an aggregate of $.355 per share and quarterly dividends during 2006 of $.57 per share. We have declared a quarterly dividend of $.18 per share payable to shareholders of record as of March 9, 2007, payable on April 2, 2007. 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 all company 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, Wachovia, purchases shares of our Common Stock on the open market and holds those shares beneficially for plan participants. During the quarter ended December 31, 2006, plan participants elected to invest plan contributions in a total of approximately 18,536 shares of our Common Stock having an approximate aggregate purchase price of $820,000. 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, 2006 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
10/01/06-10/31/06	—	$	—	—	3,817,000
11/01/06- 11/30/06	277,500		42.87	277,500	3,539,500
12/01/06- 12/31/06	320,000		42.06	320,000	3,219,500
Total:	597,500	$	42.45	597,500	3,219,500

(1) We repurchased an aggregate of 597,500 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.

The graph below compares the cumulative 5-year total return of holders of C.H. Robinson Worldwide, Inc.’s common stock with the cumulative total returns of the S & P 500 index and the S & P Midcap 400 index. The graph assumes that the value of the investment in the company’s common stock and in each of the indexes (including reinvestment of dividends) was $100 on 12/31/2001 and tracks it through 12/31/2006.

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	12/01		12/02		12/03		12/04		12/05		12/06
C.H. Robinson Worldwide, Inc.	$	100.00	$	108.82	$	133.53	$	197.81	$	266.82	$	298.52
S & P 500		100.00		77.90		100.24		111.15		116.61		135.03
S & P Midcap 400		100.00		85.49		115.94		135.05		152.00		167.69
NASDAQ Transportation		100.00		102.88		137.80		179.97		204.78		229.97

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

ITEM 6. SELECTED FINANCIAL DATA

Selected consolidated financial and operating data on page 17 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 18 through 27 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.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Disclosure about Market Risk on page 27 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 28 through 46 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 2005 and 2006, 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.

(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, 2006.

During the fourth quarter, we acquired freight forwarding businesses, Triune Freight Private Ltd. and Triune Logistics Private Ltd. (collectively “Triune”), which are 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, 2006 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

There have not been any 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”.

18

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

The following table summarizes share and exercise price information about our equity compensation plans as of December 31, 2006:

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	5,360,758	$	13.62	17,741,867
Equity compensation plans not approved by security holders	—		—	—
Total	5,360,758	$	13.62	17,741,867

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, 46,258 shares remain available under our Directors’ Stock Plan and 5,729,134 shares remain available under our Employee Stock Purchase Plan. Under our 1997 Omnibus Stock Plan, 11,966,475 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 28 through 43 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, 2006 and 2005

Consolidated Statements of Operations for the years ended December 31, 2006, 2005, and 2004

Consolidated Statements of Stockholders’ Investment for the years ended December 31, 2006, 2005, and 2004

19

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005, and 2004

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 24 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.

(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 24, 2006, filed in connection with our release of earnings for the three months ended September 30, 2006.

Report on Form 8-K, dated November 16, 2006, announced that its Board of Directors today declared an increase to the regular quarterly cash dividend from 13 cents ($0.13) per share to 18 cents ($0.18) per share, payable on January 2, 2007, to shareholders of record on December 8, 2006

Report on Form 8-K, dated December 1, 2006, filed in connection with our acquisition of certain assets of Triune Freight Private Ltd. and Triune Logistics Private Ltd., collectively (“Triune”), a third party logistics provider based in India.

(c) See Item 15(a)(3) above.

(d) See Item 15(a)(2) above.

20

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 1, 2007.

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 1, 2007.

Signature	Title
/s/ John P. Wiehoff	Chief Executive Officer and Chairman of the Board (Principal
John P. Wiehoff	Executive Officer)
/s/ Chad M. Lindbloom	Vice President and Chief Financial Officer
Chad M. Lindbloom	(Principal Financial Officer)
/s/ Thomas K. Mahlke	Corporate Controller (Principal Accounting Officer)
Thomas K. Mahlke
*	Director
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

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

21

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, 2006 and 2005, and for each of the three years in the period ended December 31, 2006, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006, and have issued our reports thereon dated March 1, 2007; such consolidated financial statements and reports are included in your 2006 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 1, 2007

22

Schedule II. Valuation and Qualifying Accounts

Allowance for Doubtful Accounts

The transactions in the allowance for doubtful accounts for the years ended December 31, 2006, 2005, and 2004 were as follows (in thousands):

	December 31, 2006			December 31, 2005			December 31, 2004
Balance, beginning of year	$	29,439		$	25,204		$	23,569
Provision		7,084			8,878			8,823
Write-offs		(7,490	)		(4,643	)		(7,188	)
Balance, end of year	$	29,033		$	29,439		$	25,204

23

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 Plan (Incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005)
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, 2006
*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

24

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

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

C. H. Robinson Worldwide, Inc. and Subsidiaries

(Dollars in thousands, except per share data)
STATEMENT OF OPERATIONS DATA(1)
For the years ended December 31	2006		2005		2004		2003		2002
Gross revenues	$	6,556,194	$	5,688,948	$	4,341,538	$	3,613,645	$	3,294,473
Gross profits		1,082,544		879,750		660,991		544,848		483,778
Income from operations		417,845		326,361		222,768		176,046		148,932
Net income		266,925		203,358		137,254		107,369		89,798
Net income per share
Basic	$	1.56	$	1.20	$	.81	$	.64	$	.53
Diluted	$	1.53	$	1.16	$	.79	$	.62	$	.52
Weighted average number of shares outstanding (in thousands)
Basic		170,888		170,052		169,228		168,774		168,736
Diluted		174,787		174,698		173,144		172,138		171,514
Dividends per share	$	.570	$	.355	$	.255	$	.180	$	.130
BALANCE SHEET DATA
As of December 31
Working capital	$	569,199	$	472,298	$	393,168	$	336,128	$	245,098
Total assets		1,631,693		1,395,068		1,080,696		908,149		777,151
Total long-term debt		—		—		—		—		—
Stockholders’ in vestment		943,722		780,037		620,856		518,747		427,469
OPERATING DATA
As of December 31
Branches		214		196		176		158		150
Employees		6,768		5,776		4,806		4,112		3,814
Average gross profits per employee(2)	$	172	$	166	$	149	$	137	$	128

⁽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.

⁽²⁾ 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.

2006 ANNUAL REPORT 17

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,	2006		2005		2004
Transportation	17.8	%	16.3	%	16.0	%
Sourcing	7.9		8.2		7.3
Information Services	100.0		100.0		100.0
Total	16.5	%	15.5	%	15.2	%

The following table summarizes our gross profits by service line:

For the years ended December 31,
(Dollars in thousands)	2006		2005		Change		2004		Change
Gross profits:
Transportation
Truck	$	822,954	$	666,605	23.5	%	$	501,940	32.8	%
Intermodal		36,176		31,392	15.2			29,960	4.8
Ocean		37,150		29,182	27.3			20,558	41.9
Air		21,533		13,321	61.6			8,570	55.4
Miscellaneous		28,152		19,824	42.0			14,709	34.8
Total Transportation		945,965		760,324	24.4			575,737	32.1
Sourcing		94,229		81,459	15.7			51,772	57.3
Information Services		42,350		37,967	11.5			33,482	13.4
Total	$	1,082,544	$	879,750	23.1	%	$	660,991	33.1	%

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

For the years ended December 31,	2006		2005		2004
Gross profits	100.0	%	100.0	%	100.0	%
Selling, general, and administrative expenses:
Personnel expenses	47.7		48.6		50.5
Other selling, general, and administrative expenses	13.7		14.3		15.8
Total selling, general, and administrative expenses	61.4		62.9		66.3
Income from operations	38.6		37.1		33.7
Investment and other income	1.1		0.7		0.5
Income before provision for income taxes	39.7		37.8		34.2
Provision for income taxes	15.0		14.7		13.4
Net income	24.7	%	23.1	%	20.8	%

18 C. H. ROBINSON WORLDWIDE, INC.

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, risks associated with the produce industry, including food safety and contamination issues, 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, 2006.

OVERVIEW

Our Company

We are a global provider of multimodal transportation services and logistics solutions, operating through a network of branch offices in North America, Europe, Asia, and South America. We are a non-asset based transportation provider, meaning we do not own the transportation equipment that is used to transport our customers’ freight. We work with approximately 45,000 transportation companies worldwide, and through those relationships we select and hire the appropriate transportation providers to meet 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 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 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 funds transfer, driver payroll services, fuel management services, and fuel and use tax reporting.

Our Business Model

We are a service company. We act principally to add value and expertise in the procurement and execution of transportation and logistics, including sourcing of produce products for our customers. Our gross revenues represent the total dollar value of services and goods we sell to our customers. Our gross profits are our gross revenues less the direct costs of transportation, products, and handling, including motor carrier, rail, ocean, air, and other costs, and the purchase price of the products we source. Our gross profits are the primary indicator of our ability to source, add value, and sell services and products that are provided by third parties, and we consider them to be our primary performance measurement. Accordingly, the discussion of our results of operations below focuses on the changes in our gross profits.

We keep our business model as variable as possible to allow 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.

2006 ANNUAL REPORT 19

In addition, we do not have pre-committed targets for headcount growth. Our personnel decisions are decentralized. Our branch managers determine the appropriate number of employees for their offices, within productivity guidelines, based on their branch’s volume of business. This helps keep our personnel expense as variable as possible with the business.

Our Branch Network

Our branch network is a major competitive advantage. Building local customer and carrier relationships has been an important part of our success, and 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.

Our branches work together to complete transactions and collectively meet the needs of our customers. Over 30 percent of our transactions are shared transactions between branches. For many of our significant customer relationships, we 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.

During 2006, we increased the size of our branch network by 18 branches, to 214 offices. We opened 9 new branches and added 9 branches through acquisitions. We are planning to open five to seven branches during 2007. 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.

Our People

We are a service company, and our continued success is dependent on our ability to continue to hire and retain talented, productive people. Our headcount grew by 992 employees during 2006, including 214 employees added by acquisitions. Branch 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 our key employees with the interests of our shareholders, and to motivate and retain them for the long-term. These restricted stock awards vest based on the performance of the company over a five year period, and have been awarded annually since 2003.

Our Customers

In 2006, we worked with approximately 25,000 customers, up from 20,500 in 2005. We work with a wide variety of companies, ranging in size from Fortune 100 companies to small family businesses, in many different industries. Our customer base is very fragmented. Our top 100 customers represented approximately one-third of our total gross profits, and our largest customer was approximately 3 percent of our total gross profits.

Our Carriers

Our carrier base includes motor carriers, railroads (primarily intermodal service providers), airfreight, and ocean carriers. In 2006, we increased our carrier base to approximately 45,000, up from approximately 40,000 in 2005. Approximately 75 percent of our shipments in 2006 were transported by motor carriers that had less than 100 tractors. While our volume 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. No single carrier represents more than 1 percent of our carrier capacity.

20 C. H. ROBINSON WORLDWIDE, INC.

Our Goals

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. Although there have been periods where we have not achieved these goals, since 1997 we have exceeded this compounded growth goal in all three categories. Our expectation is that over time, we will continue to achieve our long-term target of 15 percent growth, but that we will have periods in which we exceed that goal and periods in which we fall short. We expect to reach our long-term growth primarily through internal growth but acquisitions that fit our growth criteria and culture may also augment our growth. In 2006, we exceeded our long-term growth goal in gross profits, income from operations, and earnings per share. Our gross profits grew 23.1 percent to $1.1 billion. Our income from operations increased 28.0 percent to $417.8 million and our diluted earnings per share increased 31.9 percent to $1.53.

2006 COMPARED TO 2005

REVENUES. Gross revenues for 2006 were $6.56 billion, an increase of 15.2% over $5.69 billion in 2005. Gross profits in 2006 were $1.08 billion, an increase of 23.1% over $879.8 million in 2005. This was the result of an increase in Transportation gross profits of 24.4% to $946.0 million, an increase in Sourcing gross profits of 15.7% to $94.2 million, and an increase in Information Services gross profits of 11.5% to $42.4 million.

During 2006, our gross profit margin, or gross profits as a percentage of gross revenues, increased to 16.5% from 15.5% in 2005. Transportation gross profit margin increased to 17.8% in 2006 from 16.3% in 2005. Sourcing gross profit margin decreased to 7.9% in 2006 from 8.2% in 2005. Information Services business is a fee-based business which generates 100% gross profit margin.

Transportation gross profits increased 24.4% to $946.0 million in 2006 from $760.3 million in 2005. Transportation revenues are generated through several transportation services, including truck, intermodal, ocean, air, and miscellaneous services.

Truck gross profits, including less-than-truckload (LTL), increased 23.5% to $823.0 million in 2006. This increase was generated by transaction volume growth, increased profit margin, and pricing increases. While demand for truck services increased in 2006 and we experienced volume growth of over 10% for the year in our truck business year-over-year, volume growth slowed as the year progressed. Our margins expanded as slowing demand in the overall truckload market created a looser truck market.

Intermodal gross profits increased 15.2% to $36.2 million from $31.4 million in 2005. 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.

In our international forwarding business, ocean gross profits increased 27.3% to $37.2 million in 2006. Air gross profits increased 61.6% to $21.5 million in 2006. During the third quarter of 2005, we acquired two freight forwarding companies based in Europe. In 2006, these acquisitions contributed approximately 45% of our growth in air and 10% of our growth in ocean.

Miscellaneous transportation gross profits consist of customs brokerage fees, transportation management fees, and other miscellaneous transportation related services. The increase of 42.0% to $28.2 million in 2006 was driven by increases in transportation management fees and customs brokerage business.

2006 ANNUAL REPORT 21

Sourcing gross profits increased 15.7% to $94.2 million in 2006. In mid-February 2005, we acquired three produce sourcing and distribution companies, collectively named “FoodSource.” Excluding the impacts of this acquisition, our sourcing gross profits would have increased approximately 9% in 2006. Our Sourcing business is the buying and selling of fresh fruits and vegetables. For several years, we have actively sought to expand our Sourcing customer base, 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 2006, Information Services gross profits increased by 11.5% to $42.4 million due to transaction volume growth and an increase in pricing related to certain truck stop services.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.

Many of our selling, general, and administrative expenses are variable in relation to gross profits. However, we do gain leverage in certain expenses especially when our gross profits grow faster than our long-term growth target of 15%.

Personnel expenses increased by 20.7% to $515.9 million in 2006, and decreased as a percentage of gross profits to 47.7% in 2006 from 48.8% in 2005. Personnel expenses account for nearly 80% of our total selling, general and administrative expenses. Stock-based compensation and profit sharing expense, both of which are determined primarily based on our annual consolidated earnings growth, increased by 37% in 2006 to $75.4 million, and increased as a percentage of gross profits to 7.0% in 2006 from 6.3% in 2005. These expenses have a significant role in keeping our personnel expenses variable based on earnings growth.

We focus on keeping personnel expenses as variable as possible while looking for opportunities to be more efficient. Gross profits per employee increased 3.6% in 2006 over 2005. This increase was driven primarily by transaction pricing increases.

Other selling, general, and administrative expenses for 2006 were $148.8 million, an increase of 18.0% from $126.1 million in 2005. As a percentage of gross profits, other selling, general, and administrative expenses decreased to 13.7% compared to 14.3% in 2005. We strive to keep our expenses as variable as possible. With our revenue growth in 2006, we did gain leverage in our other selling, general, and administrative expenses.

INCOME FROM OPERATIONS. Income from operations increased 28.0% to $417.8 million for 2006. This increase was primarily driven by the growth in our gross profits. Income from operations as a percentage of gross profits was 38.6% and 37.1% for 2006 and 2005.

INVESTMENT AND OTHER INCOME. Investment and other income increased 85.3% to $11.8 million in 2006. Our cash and cash equivalents as of December 31, 2006 increased $118.0 million over the balance as of December 31, 2005, which contributed to our increased investment income. In addition, our portfolio yield also increased due to increases in short-term interest rates.

PROVISION FOR INCOME TAXES. Our effective income tax rate was 37.9% for 2006 and 38.9% for 2005. The decrease in the effective income tax rate is primarily due to the decline in our effective foreign tax rate and an increase in our tax-exempt municipal interest income. 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 increased 31.3% to $266.9 million for 2006. Basic net income per share increased 30.0% to $1.56 for 2006. Diluted net income per share increased 31.9% to $1.53 for 2006.

22 C. H. ROBINSON WORLDWIDE, INC.

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 in 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 2005 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 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 acquisitions, 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, 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 FoodSource in the first quarter of 2005, Sourcing gross profits increased 5.7% in 2005. For several years, we have actively sought to expand our Sourcing customer base, 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 especially when our gross profits grow faster than our long-term growth target of 15%.

2006 ANNUAL REPORT 23

Personnel expenses account for nearly 80% of total selling, general, and administrative expenses. 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.

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 expenses. We continued to make investments for the future, including improving our technology infrastructure.

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.

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 $348.6 million and $230.6 million as of December 31, 2006 and 2005. Available-for-sale securities consisting primarily of highly liquid investments totaled $124.8 million and $122.6 million as of December 31, 2006 and 2005. Working capital at December 31, 2006 and 2005 was $569.2 million and $472.3 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 expect to return more of the cash to our shareholders if our cash balance continues to increase and there are no significant attractive acquisition opportunities.

CASH FLOW FROM OPERATING ACTIVITIES. We generated $343.4 million, $224.1 million, and $153.4 million of cash flow from operations in 2006, 2005 and 2004. Our cash from operations generally grows in relation to our net income, adjusted for working capital needs related to growing the business.

24 C. H. ROBINSON WORLDWIDE, INC.

During 2006, our cash flow from operations grew 53.2% compared to a 31.3% increase in net income. The primary factors which caused the improvement in 2006 were an increase of non-cash expenses related to stock-based compensation of 66.3% or $18.9 million, and improvements in our accounts receivable aging.

CASH FLOW FROM INVESTING ACTIVITIES. We used $81.2 million, $86.7 million and $54.8 million of cash flow for investing activities in 2006, 2005, and 2004. Our investing activities consist primarily of cash paid for acquisitions and our capital expenditures.

We used $39.7 million, $60.2 million and $19.1 million of cash flow on acquisitions in 2006, 2005, and 2004. The amount paid in 2006 included $29.5 million related to the closing of two acquisitions and $10.2 million related to earn-out payments and holdbacks from prior year acquisitions. As of December 31, 2006, we have approximately $19.2 million of potential remaining earn-out payments through 2008 and $4.5 million of potential remaining purchase price holdbacks through 2007.

We also used $43.3 million, $21.8 million, and $34.7 million of net capital expenditures in 2006, 2005, and 2004. We have invested in real estate in Chicago, Illinois, and Eden Prairie, Minnesota, related to office space in these two heavily employee-concentrated cities. We have spent $22.5 million, $5.7 million, and $18.3 million in 2006, 2005, and 2004 on these facilities. The remaining capital expenditures of $20.8 million, $16.1 million, and $16.4 million in 2006, 2005, and 2004 relate primarily to annual investments in information technology equipment to support our operating systems.

CASH FLOW FROM FINANCING ACTIVITIES. We used $145.8 million, $69.8 million, and $57.5 million of cash flow for financing activities in 2006, 2005, and 2004. This was primarily quarterly dividends and share repurchases.

We used $90.8 million, $51.5 million, and $40.9 million to pay cash dividends in 2006, 2005, and 2004, with the increase in 2006 due to a 63% increase in our quarterly dividend rate from $0.08 per share in 2005 to $0.13 per share in 2006.

We also used $85.3 million, $38.8 million, and $29.6 million of cash flow on share repurchases in 2006, 2005, and 2004, with the increase in 2006 due to a 55% increase in the number of shares repurchased and an increase in the stock price related to those purchases. We will continue to use share repurchases as a variable way to return excess capital to shareholders, and also to manage the impacts of our equity incentives.

We have 3.5 million euros available under a line of credit at an interest rate of Euribor plus 45 basis points (4.08% at December 31, 2006). This discretionary line of credit has no expiration date. During 2006, we borrowed 20.7 million euros, or $26.0 million, all of which was repaid during the year. During 2005, we borrowed 6.5 million euros, or $7.1 million, all of which was repaid during the year. As of December 2006 and 2005, 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, 2006.

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 additional lines of credit on short notice, if needed.

2006 ANNUAL REPORT 25

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 do not 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 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.

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, 2006:

  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)	$	99,464	$	19,430	$	46,299	$	6,924	$	26,811
Purchase Obligations(b)		25,276		24,067		1,096		113		—
Total	$	124,740	$	43,497	$	47,395	$	7,037	$	26,811

^(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, 2006, such obligations include telecommunications services, maintenance contracts, and an obligation to complete construction on our corporate headquarters building.

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 air and 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.

26 C. H. ROBINSON WORLDWIDE, INC.

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 $29.0 million as of December 31, 2006, decreased compared to the allowance of $29.4 million as of December 31, 2005. 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 our annual analysis in accordance with SFAS No. 142, we have determined that there is no indication of goodwill impairment as of December 31, 2006.

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 $473.4 million of cash and investments on December 31, 2006, consisting of $348.6 million of cash and cash equivalents and $124.8 million of available-for-sale securities. Although these investments are subject to the credit risk of the issuer, we manage our investment portfolio to limit our exposure to anyone issuer or industry. Substantially all of the cash equivalents are money market securities from domestic issuers. All of our available-for-sale securities are highquality bonds. Because of the credit risk criteria of our investment policies and practices, 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.

2006 ANNUAL REPORT 27

CONSOLIDATED BALANCE SHEETS

C.H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data)

As of December 31,

ASSETS	2006			2005
Current assets:
Cash and cash equivalents	$	348,592		$	230,628
Available-for-sale securities		124,767			122,551
Receivables, net of allowance for doubtful accounts of $29,033 and $29,439		764,995			716,725
Deferred tax asset		7,614			5,999
Prepaid expenses and other		10,180			8,878
Total current assets		1,256,148			1,084,781
Property and equipment		145,262			113,815
Accumulated depreciation and amortization		(63,191	)		(53,094	)
Net property and equipment		82,071			60,721
Goodwill		261,766			223,137
Other intangible assets, net of accumulated amortization of $9,086 and $7,064		15,957			18,520
Deferred tax asset		6,668			—
Other assets		9,083			7,909
Total assets	$	1,631,693		$	1,395,068
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable	$	468,499		$	410,744
Outstanding checks		71,630			63,138
Accrued expenses –
Compensation and profit-sharing contribution		98,408			94,333
Income taxes and other		48,412			44,268
Total current liabilities		686,949			612,483
Deferred tax liability		—			1,469
Nonqualified deferred compensation obligation		1,022			1,079
Total liabilities		687,971			615,031
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; 174,161 and 174,111 shares issued, 172,656 and 173,030 outstanding		17,266			17,303
Additional paid-in capital		184,462			157,074
Retained earnings		807,983			640,551
Accumulated other comprehensive loss		(202	)		(1,901	)
Treasury stock at cost (1,504 and 1,081 shares)		(65,787	)		(32,990	)
Total stockholders’ investment		943,722			780,037
Total liabilities and stockholders’ investment	$	1,631,693		$	1,395,068

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

28 C. H. ROBINSON WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data)
For the years ended December 31,	2006		2005		2004(1)
Gross revenues:
Transportation	$	5,321,547	$	4,655,746	$	3,597,249
Sourcing		1,192,297		995,235		710,807
Information Services		42,350		37,967		33,482
Total gross revenues		6,556,194		5,688,948		4,341,538
Cost of transportation, products, and handling:
Transportation		4,375,582		3,895,422		3,021,512
Sourcing		1,098,068		913,776		659,035
Total cost of transportation, products, and handling		5,473,650		4,809,198		3,680,547
Gross profits		1,082,544		879,750		660,991
Selling, general, and administrative expenses:
Personnel		515,947		427,311		334,118
Other selling, general, and administrative expenses		148,752		126,078		104,105
Total selling, general, and administrative expenses		664,699		553,389		438,223
Income from operations		417,845		326,361		222,768
Investment and other income		11,843		6,392		3,270
Income before provision for income taxes		429,688		332,753		226,038
Provision for income taxes		162,763		129,395		88,784
Net income	$	266,925	$	203,358	$	137,254
Basic net income per share	$	1.56	$	1.20	$	.81
Diluted net income per share	$	1.53	$	1.16	$	.79
Basic weighted average shares outstanding		170,888		170,052		169,228
Dilutive effect of outstanding stock awards		3,899		4,646		3,916
Diluted weighted average shares outstanding		174,787		174,698		173,144

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

⁽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.

2006 ANNUAL REPORT 29

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ INVESTMENT

C. H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands, except per share data)
For the years ended December 31, 2006, 2005, and 2004
.	Common Shares Outstanding (1)		Amount			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Stockholders’ Investment
Balance, December 31, 2003	170,608		$	8,530		$	121,724		$	404,750		$	(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
Dividends declared, $.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	50			3			(3	)		—			—			—			—
Stock-based compensation expense	40			2			22,354			—			—			—			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			137,770			498,406			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	)		—			—			—			—
Dividends declared, $.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			(218	)		—			—			—			—
Stock-based compensation expense	14			1			27,425			—			—			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			157,074			640,551			(1,901	)		(32,990	)		780,037
Net income	—			—			266,925			—			—						266,925
Other comprehensive income –
Foreign currency translation adjustment	—			—			—			—			1,699			—			1,699
Comprehensive income	—			—			—			—			—			—			268,624
Dividends declared, $.57 per share	—			—			—			(99,493	)		—			—			(99,493	)
Stock issued for employee benefit plans	1,503			150			(34,195	)		—			—			52,229			18,184
Issuance of restricted stock	48			5			6,858			—			—			—			6,863
Stock-based compensation expense	3			1			41,613			—			—			51			41,665
Excess tax benefit on deferred compensation and employee stock plans	—			—			13,112			—			—			—			13,112
Repurchase of common stock	(1,927	)		(193	)		—			—			—			(85,077	)		(85,270	)
Balance, December 31, 2006	172,656		$	17,266		$	184,462		$	807,983		$	(202	)	$	(65,787	)	$	943,722

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

⁽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.

30 C. H. ROBINSON WORLDWIDE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

C.H. Robinson Worldwide, Inc. and Subsidiaries

(In thousands)

For the years ended December 31,

OPERATING ACTIVITIES	2006			2005			2004
Net income	$	266,925		$	203,358		$	137,254
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,932			18,500			11,814
Gain on insurance proceeds		—			—			(1,200	)
Provision for doubtful accounts		7,084			8,878			8,823
Stock-based compensation		47,292			28,436			22,356
Deferred income taxes		(8,882	)		(503	)		588
Loss on sale/disposal of assets		80			177			168
Changes in operating elements, net of effects of acquisitions:
Receivables		(55,489	)		(150,788	)		(90,262	)
Prepaid expenses and other		(1,303	)		(2,366	)		643
Accounts payable and outstanding checks		57,590			78,857			39,863
Accrued compensation and profit-sharing contribution		5,044			31,527			13,629
Accrued income taxes and other		1,104			8,029			9,697
Net cash provided by operating activities		343,377			224,105			153,373
INVESTING ACTIVITIES
Purchases of property and equipment		(43,243	)		(21,824	)		(34,741	)
Insurance proceeds		—			—			1,590
Sales of property and equipment		1,700			—			—
Cash paid for acquisitions, net of cash acquired		(39,724	)		(60,153	)		(19,112	)
Purchases of available-for-sale securities		(119,864	)		(114,696	)		(70,139	)
Sales/maturities of available-for-sale securities		118,838			113,747			69,366
Other		1,056			(3,748	)		(1,780	)
Net cash used for investing activities		(81,237	)		(86,674	)		(54,816	)
FINANCING ACTIVITIES
Proceeds from stock issued for employee benefit plans		18,184			15,549			10,496
Repurchase of common stock		(85,270	)		(38,842	)		(29,616	)
Cash dividends		(90,837	)		(51,458	)		(40,902	)
Excess tax benefit on stock-based compensation		12,078			4,983			2,568
Proceeds from short-term borrowings		25,984			7,066			31,658
Payments on short-term borrowings		(25,984	)		(7,066	)		(31,658	)
Net cash used for financing activities		(145,845	)		(69,768	)		(57,454	)
Effect of exchange rates on cash		1,669			(3,511	)		1,960
Net increase in cash and cash equivalents		117,964			64,152			43,063
Cash and cash equivalents, beginning of year		230,628			166,476			123,413
Cash and cash equivalents, end of year	$	348,592		$	230,628		$	166,476
Cash paid for income taxes	$	163,103		$	121,168		$	79,747
Cash paid for interest	$	180		$	303		$	104
Supplemental disclosure of noncash activities:
Restricted stock awarded	$	14,014		$	79,840		$	6,800
Stock issued for acquisition	$	—		$	10,419		$	—

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

2006 ANNUAL REPORT 31

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 214 branch offices operating in North America, Europe, Asia, and South America. 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 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.

32 C. H. ROBINSON WORLDWIDE, INC.

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. Our branches work together to complete transactions and collectively meet the needs of our customers. Over 30% of our transactions are shared transactions between branches. For many of our significant customer relationships, we 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):

	2006		2005		2004
Gross revenues
United States	$	6,066,186	$	5,269,526	$	4,022,795
Other locations		490,008		419,422		318,743
	$	6,556,194	$	5,688,948	$	4,341,538
	2006		2005
Long-lived assets
United States	$	99,096	$	82,475
Other locations		8,015		4,675
	$	107,111	$	87,150

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.

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 the straight-line method 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 $16.5 million in 2006, $12.7 million in 2005, and $9.3 million in 2004. A summary of our property and equipment as of December 31 is as follows (in thousands):

	2006			2005
Furniture, fixtures, and equipment	$	92,950		$	78,136
Building		17,020			16,937
Corporate aircraft		9,000			9,000
Leasehold improvements		8,305			5,852
Land		13,374			3,500
Construction in progress		4,613			390
Less accumulated depreciation		(63,191	)		(53,094	)
Net property and equipment	$	82,071		$	60,721

2006 ANNUAL REPORT 33

INTANGIBLE ASSETS – Goodwill is the difference between the purchase price of a company and the fair market value of the acquired company’s net identifiable 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 include 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 $3.4 million in 2006, $1.9 million in 2005, and $1.8 million in 2004. Amortization expense is computed using the straight-line method over three years.

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

	2006			2005
Purchased software	$	14,333		$	11,525
Internally developed software		2,894			4,364
Less accumulated amortization		(11,604	)		(11,197	)
Net software	$	5,623		$	4,692

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 non-owner sources. Our two components of other 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 2005 and 2004 financial statements and footnotes to conform to the presentation used in 2006.

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.

34 C. H. ROBINSON WORLDWIDE, INC.

NOTE 2: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that we recognize in our financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective for us as of January 1, 2007. We have evaluated the impact of the adoption of FIN 48. The cumulative effect of applying the provisions of FIN 48, while immaterial, will be reported as an adjustment to beginning retained earnings in 2007.

In September 2006, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 is effective for fiscal years ending after November 15, 2006. The provisions of SAB No. 108 are effective for us as of January 1, 2007. We have evaluated the provisions of SAB No. 108 and believe we have no prior year misstatements that need to be corrected in the current year.

In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies to other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for us as of January 1, 2007. There is no impact to our consolidated financial position or results of operations with the adoption of this statement.

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, some of 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, 2006, 2005, and 2004. As of December 31, 2006 and 2005, we had $124.8 million and $122.6 million in available-for-sale securities.

The fair value of available-for-sale debt securities at December 31, 2006, by contractual maturity, is shown below (in thousands):

	Cost basis		Estimated fair value
Due in one year or less	$	30,800	$	31,244
Due after one year through five years		4,260		4,310
Due after five years through ten years		2,500		2,507
Due after 10 years		86,229		86,706
Total	$	123,789	$	124,767

2006 ANNUAL REPORT 35

NOTE 4: GOODWILL AND OTHER INTANGIBLE ASSETS

The fair value of available-for-sale debt securities at December 31, 2006, by contractual maturity, is shown below (in thousands):

	Unamortizable intangible assets			Amortizable intangible assets
December 31, 2005
Gross	$	235,066		$	25,584
Accumulated amortization		(11,929	)		(7,064	)
Net	$	223,137		$	18,520
December 31, 2006
Gross	$	273,695		$	25,043
Accumulated amortization		(11,929	)		(9,086	)
Net	$	261,766		$	15,957

In accordance with SFAS No. 142, we annually complete an impairment test on these assets. This impairment test did not result in any impairment losses.

The change in the carrying amount of goodwill for the year ended December 31, 2006, is as follows (in thousands):

Balance December 31, 2005	$	223,137
Goodwill associated with acquisitions		38,629
Balance December 31, 2006	$	261,766

Amortization expense for other intangible assets was $4.8 million in 2006, $3.9 million in 2005, and $0.8 million in 2004. Estimated amortization expense for each of the five succeeding fiscal years based on the intangible assets at December 31, 2006, is as follows (in thousands):

2007	$	4,892
2008		4,873
2009		4,729
2010		1,125
2011		338
Total	$	15,957

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 (4.08% at December 31, 2006). This discretionary line of credit has no expiration date. During 2006, we borrowed 20.7 million euros, or $26.0 million, all of which was repaid during the year. During 2005, we borrowed 6.5 million euros, or $7.1 million, all of which was repaid during the year. As of December 2006 and 2005, 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, 2006.

36 C. H. ROBINSON WORLDWIDE, INC.

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 years ended December 31 (in thousands):

	2006			2005			2004
Tax provision:
Federal	$	142,142		$	104,759		$	73,459
State		24,238			19,031			11,495
Foreign		6,135			6,108			3,920
		172,515			129,898			88,874
Deferred benefit		(9,752	)		(503	)		(90	)
Total provision	$	162,763		$	129,395		$	88,784

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:

	2006		2005		2004
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	3.6		3.5		3.4
Stock-based compensation	0.2		0.4		0.6
Other	(0.9	)	0.0		0.3
	37.9	%	38.9	%	39.3	%

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

	2006			2005
Deferred tax assets :
Compensation	$	35,764		$	21,570
Receivables		10,584			10,932
Other		2,232			2,694
Deferred tax liabilities:
Intangible assets		(24,136	)		(18,479	)
Prepaid assets		(5,533	)		(6,280	)
Long-lived assets		(3,552	)		(5,890	)
Other		(1,077	)		(17	)
Net deferred tax assets	$	14,282		$	4,530

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.

2006 ANNUAL REPORT 37

NOTE 7: CAPITAL STOCK AND STOCK AWARD PLANS

Effective January 1, 2006, we adopted SFAS 123R, Share-Based Payment. Under SFAS 123R, 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. We had previously adopted the fair value recognition provisions of SFAS 123 in January 2004, using he retroactive restatement method. Total compensation expense recognized in our statements of operations for stock based compensation awards was $47.3 million in 2006, $34.7 million in 2005, and $22.4 million in 2004.

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 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 28,000,000 shares can be granted under this plan; 11,966,000 shares were available for stock awards as of December 31, 2006, which cover stock options and restricted stock awards. Awards that expire or are cancelled without delivery of shares generally become available for issuance under the plans.

STOCK OPTIONS – The contractual lives of all options as originally 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. Recipients are able to exercise options using a stock swap which results in a new, fullyvested restoration option with a grant price established based on the date of the swap, and a remaining contractual life equal to the remaining life of the original option. Options issued to non-employee directors vest immediately. The fair value per option is established using the Black-Scholes option pricing model, with the resulting expense being recorded over the vesting period of the award. Other than restoration options, we have not issued any new stock options since 2003. As of December 31, 2006, approximately $2.3 million of deferred compensation related to stock options remains to be expensed.

38 C. H. ROBINSON WORLDWIDE, INC.

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

	2006 Grants			2005 Grants			2004 Grants
Risk-free interest rate		4.6-5.0	%		2.5-4.3	%		2.0-2.5	%
Expected dividend yield		1.0	%		1.0	%		1.0	%
Expected volatility factor		20.0-25.8	%		19.9-23.3	%		22.3-23.7	%
Expected option term		1-6 years			2-8 years			2-6 years
Fair value per option	$	3.86-14.05		$	4.08-13.59		$	4.98-9.23

The following schedule summarizes stock option activity in the plan.

	Shares		Weighted Average Exercise Price
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	(1,055,5 33	)		10.29
Terminated	(29,047	)		14.66
Outstanding at December 31, 2005	6,656,634			12.42
Granted	136,780			45.69
Exercised	(1,432,656	)		11.21
Outstanding at December 31, 2006	5,360,758		$	13.62
Exercisable at December 31, 2004	3,752,692		$	10.09
Exercisable at December 31, 2005	4,452,511		$	11.29
Exercisable at December 31, 2006	4,313,941		$	13.32

Significant option groups outstanding at December 31, 2006, 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	629,215	$	5.93	1.9	629,215	$	5.93
10.17	921,753		10.17	3.1	921,753		10.17
13.31-14.82	3,491,951		14.55	5.4	2,462,634		14.46
15.37-17.50	45,000		15.61	4.9	42,500		15.50
19.34	30,000		19.34	6.8	15,000		19.34
32.09	242,839		32.09	3.2	242,839		32.09
	5,360,758	$	13.62	4.5	4,313,941	$	13.32

2006 ANNUAL REPORT 39

RESTRICTED STOCK GRANTS – We have awarded to certain key employees and non-employee directors restricted shares and restricted units, which are subject to certain vesting requirements based on the operating performance of the company over a five year period. The awards also contain restrictions on the awardees’ ability to sell or transfer vested shares or units for a specified period of time. The fair value of these shares is established based on the market price on the date of grant discounted for post-vesting holding restrictions. The discount has ranged from 12% to 13% based on the different post-vesting holding restrictions. These grants are recorded as deferred compensation within stockholders’ investment in the accompanying financial statements and are being expensed based on the terms of the awards.

The following table summarizes our performance based restricted stock grants as of December 31, 2006:

Grant Year	Granted	Unvested
2006	315,046	203,936
2005	2,394,290	1,625,659
2004	293,850	—
2003	1,732,050	—

We have also awarded restricted shares and units to certain key employees that vest primarily based on their continued employment. The value of these awards is established by the market price on the date of the grant and is being expensed over the vesting period of the award.

As of December 31, 2006, $60.6 million of deferred compensation related to restricted stock grants remains to be expensed.

We have also issued to certain key employees restricted units which are fully vested upon issuance and contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these shares is established using the same method discussed above. These grants have been expensed during the year they were earned by employees.

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 206,000, 238,000, and 238,000 shares of our Common Stock under this plan at an aggregate cost of $8.3 million, $6.1 million, and $4.6 million in 2006, 2005, and 2004.

SHARE REPURCHASE PROGRAMS – During 1999, the Board of Directors authorized a stock repurchase plan that allows management to repurchase 8,000,000 shares for reissuance upon the exercise of employee stock options and other stock plans. We purchased 1,926,500 and 1,240,000 of our common stock for the treasury at an aggregate cost of $85.3 million in 2006 and $38.8 million in 2005 under this stock repurchase plan. There are 3,221,000 shares remaining for repurchase under this plan.

40 C. H. ROBINSON WORLDWIDE, INC.

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 $28.1 million in 2006, $26.6 million in 2005, and $15.6 million in 2004.

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 $1.3 million and $2.7 million as of December 31, 2006 and 2005, respectively. We have purchased investments to fund the future liability. The investments had an aggregate market value of $1.3 million as of December 31, 2006 and $2.7 million in 2005, respectively, and are included in other assets in the consolidated balance sheets. In addition, all restricted shares granted but not yet delivered are also held within this plan.

LEASE COMMITMENTS – We lease certain facilities and equipment under operating leases. Lease expense was $22.2 million for 2006, $19.4 million for 2005, and $16.3 million for 2004.

Minimum future lease commitments under noncancelable lease agreements in excess of one year as of December 31, 2006, are as follows (in thousands):

2007		19,430
2008		17,553
2009		17,437
2010		11,309
2011		6,924
Thereafter		26,811
Total	$	99,464

LITIGATION – As we previously disclosed, during 2002 we were named as a defendant in two lawsuits brought by a number of present and former employees. The first lawsuit alleged a hostile working environment, unequal pay, promotions, and opportunities for women, and failure to pay overtime (“FLSA”). The second lawsuit alleges a failure to pay overtime. The plaintiffs in both lawsuits 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 certain claims of gender discrimination in pay and promotion. The gender discrimination class claims were settled for $15 million, including costs and attorneys’ fees. The settlement also includes programmatic relief offered by us. As a condition of the settlement, we made no admission of liability. While the $15 million is within our insurance coverage limits and was fully funded by the insurance carriers, those carriers reserved the right to seek a court ruling that a portion of the settlement was not covered under their policies, and also to dispute payment of certain defense costs incurred in that litigation. The settlement of the gender discrimination class claims did not include the overtime pay lawsuits, or the claims of putative class members who subsequently filed individual EEOC charges after the denial of class status on March 31, 2005. Fifty-two of those claimants have filed lawsuits. We are vigorously defending the remaining charges and lawsuits.

2006 ANNUAL REPORT 41

With respect to the FLSA overtime claims, the judge issued an order granting in full our Motion to Decertify the FLSA collective action on September 26, 2006. The judge retained jurisdiction over the named plaintiffs’ FLSA overtime claims and dismissed the claims of the opt-in plaintiffs, without prejudice to their right to bring their own claims in separate lawsuits in appropriate venues. Approximately 525 of the dismissed opt-in plaintiffs either filed or joined in lawsuits asserting individual FLSA claims for failure to pay overtime. We are vigorously defending the remaining lawsuits in various federal courts.

Currently, the amount of any loss from the individual gender or FLSA claims 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 subject to any other 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.

NOTE 9: ACQUISITIONS

In May 2006, we acquired certain assets of Payne Lynch, and Associates, Inc. “Payne Lynch”, a non-asset based third party logistics company that specializes in flatbed and over dimensional freight brokerage. The purchase price was $30.0 million, of which $26.0 million in cash was paid at closing, with the remaining $4.0 million to be paid if certain conditions are met.

In December 2006, we acquired certain assets of Triune Freight Private Ltd. and Triune Logistics Private Ltd., collectively “Triune”, a third party logistics provider based in India. The purchase price for Triune was $4.0 million, of which $3.5 million in cash was paid at closing, with the remaining $0.5 million to be paid if certain conditions are met.

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 $30.7 million. Other intangible assets related to these transactions amounted to $2.3 million.

42 C. H. ROBINSON WORLDWIDE, INC.

NOTE 10: SUPPLEMENTARY DATA (UNAUDITED)

Our results of operations for each of the quarters in the years ended December 31, 2006 and 2005 are summarized below (in thousands, except per share data).

2006	March 31		June 30		September 30		December 31
Gross revenues:
Transportation	$	1,215,909	$	1,363,246	$	1,394,979	$	1,347,413
Sourcing		273,422		326,853		307,384		284,638
Information Services		9,784		10,898		11,128		10,540
Total gross revenues		1,499,115		1,700,997		1,713,491		1,642,591
Cost of transportation, products, and handling:
Transportation		992,942		1,130,324		1,151,063		1,101,253
Sourcing		251,116		300,054		284,082		262,816
Total cost of transportation, products, and handling		1,244,058		1,430,378		1,435,145		1,364,069
Gross profits		255,057		270,619		278,346		278,522
Income from operations		92,434		103,918		111,118		110,375
Net income	$	58,114	$	66,594	$	70,390	$	71,827
Basic net income per share	$	.34	$	.39	$	.41	$	.42
Diluted net income per share	$	.33	$	.38	$	.40	$	.41
Basic weighted average shares outstanding		171,219		171,215		170,925		170,555
Dilutive effect of outstanding stock awards		4,048		3,983		3,851		3,549
Diluted weighted average shares outstanding		175,267		175,198		174,776		174,104

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

⁽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.

2006 ANNUAL REPORT 43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

C. H. Robinson Worldwide, Inc. and Subsidiaries

Eden Prairie, Minnesota

We have audited the accompanying consolidated balance sheets of C. H. Robinson Worldwide, Inc. and subsidiaries (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ investment, and cash flows for each of the three years in the period ended December 31, 2006. 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, 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, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, 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, 2006, 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 1, 2007, 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 1, 20071

44 C. H. ROBINSON WORLDWIDE, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

C. H. Robinson Worldwide, Inc. and Subsidiaries

Eden Prairie, Minnesota

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, 2006, 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, management excluded from their assessment the internal control over financial reporting at Triune Freight Private Ltd. and Triune Logistics Private Ltd. (collectively “Triune”), which were acquired during the fourth quarter of 2006, 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, 2006. Accordingly, our audit did not include the internal control over financial reporting at Triune. 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, 2006, 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, 2006, 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, 2006, of the Company and our report dated March 1, 2007 expressed an unqualified opinion on those financial statements.

Minneapolis, Minnesota

March 1, 2007

2006 ANNUAL REPORT 45

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, 2006.

During the fourth quarter, we acquired freight forwarding businesses Triune Freight Private Ltd. and Triune Logistics Private Ltd., which are 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, 2006 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	Chad M. Lindbloom
Chief Executive Officer and Chairman of the Board	Vice President and Chief Financial Officer

46 C. H. ROBINSON WORLDWIDE, INC.

EX-21

EXHIBIT 21

SUBSIDIARIES OF C.H. ROBINSON WORLDWIDE, INC.

The following is a list of subsidiaries of the Company as of December 31, 2006, omitting some subsidiaries which, considered in aggregate, would not constitute a significant subsidiary.

Name	Where incorporated
C.H. Robinson International, Inc.	Minnesota, USA
C.H. Robinson Worldwide Chile, S.A.	Chile
C.H. Robinson Venezuela, C.A.	Venezuela
Spica Servicios Logisticos, C.A.	Venezuela
R.C. Aduanas, C.A.	Venezuela
C.H. Robinson de Mexico, S.A. de C.V.	Mexico
C.H. Robinson Company (Canada) Ltd.	Canada
C.H. Robinson Company	Delaware, USA
C.H. Robinson Company LP	Minnesota, USA
C.H. Robinson Company, Inc.	Minnesota, USA
CHR Aviation LLC	Minnesota, USA
Robinson Holding Company	Minnesota, USA
Wagonmaster Transportation Co.	Minnesota, USA
Payment & Logistics Services, Inc.	Minnesota, USA
T-Chek Systems, Inc./Les Sytemes T-Chek, Inc.	Minnesota, USA
C.H. Robinson Worldwide Foundation	Minnesota, USA
C.H. Robinson Worldwide Logistics (Dalian) Co. Ltd	China
C.H. Robinson Worldwide (Hong Kong) Ltd	Hong Kong
C.H. Robinson Worldwide Argentina, S.A.	Argentina
Robinson Logistrica Do Brasil Ltda	Brazil
C.H. Robinson Czech Republic s.r.o.	Czech Republic

C.H. Robinson SAS	France
C.H. Robinson France SARL.	France
C.H. Robinson Worldwide GmbH	Germany
C.H. Robinson Deutschland GmbH	Germany
C.H. Robinson Hungary, LLC (C.H. Robinson Hungaria Kft)	Hungary
C.H. Robinson Europe BV Ireland	Ireland
Robinson Italia S.r.l.	Italy
C.H. Robinson International Italy, SRL	Italy
C.H. Robinson Europe B.V.	Netherlands
C.H. Robinson Poland Sp. z.o.o.	Poland
C.H. Robinson Iberica	Spain
C.H. Robinson (UK) Ltd	England
C.H. Robinson Worldwide Freight India Private Limited	India
C.H. Robinson Worldwide Singapore Pte. Ltd	Singapore

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 1, 2007, 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, 2006.

Minneapolis, Minnesota

March 1, 2007

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, 2006, 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/ ReBecca Koenig Roloff	March 1, 2007
ReBecca Koenig Roloff
/s/ Robert Ezrilov	March 1, 2007
Robert Ezrilov
/s/ Gerald A. Schwalbach	March 1, 2007
Gerald A. Schwalbach
/s/ Wayne M. Fortun	March 1, 2007
Wayne M. Fortun
/s/ Kenneth E. Keiser	March 1, 2007
Kenneth E. Keiser
/s/ Brian P. Short	March 1, 2007
Brian P. Short
/s/ Michael W. Wickham	March 1, 2007
Michael W. Wickham

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.

March 1, 2007

Signature	/s/ JOHN P. WIEHOFF
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 M. Lindbloom, certify that:

1. I have reviewed this annual report on Form 10-K of C.H. Robinson Worldwide, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the 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.

March 1, 2007

Signature	/s/ CHAD M. LINDBLOOM
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, 2006 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 1, 2007

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 Annual Report of C.H. Robinson Worldwide, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2007 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 1, 2007