Item 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition, or future results. Except for the updates to the risk factor set forth below, there have not been material changes in our risk factors set forth in the company’s 2025 Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

We are subject to claims arising from our transportation operations. We use the services of thousands of third-party transportation companies in connection with our transportation operations. From time to time, the drivers employed and engaged by the motor carriers with which we contract are involved in accidents, which may result in serious personal injuries. The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by the contracted motor carrier. Although these drivers are not our employees and are employees, owner-operators, or independent contractors working for the contracted motor carriers, claims may nevertheless be asserted against us for their actions or for our actions in selecting, retaining, or monitoring such carriers.

Recent legal developments, including the United States Supreme Court’s decision in Montgomery v. Caribe Transport II, LLC, have clarified that state-law negligence claims related to the selection of motor carriers by freight brokers are not preempted by federal law in certain circumstances. As a result, plaintiffs have pursued, and may increasingly pursue, allegations that we failed to exercise reasonable care in selecting or retaining third-party motor carriers, and courts may permit such claims to proceed under a range of state law standards that may vary by jurisdiction. Claims against us may exceed the amount of our insurance coverage or may not be covered by insurance at all. As discussed in Note 7, Litigation, we are currently facing a negligent hire claim of this nature related to our selection of an independent motor carrier. Further, this evolving legal landscape may result in increased litigation activity, greater scrutiny of our carrier selection and oversight practices, and higher defense and settlement costs.

A material increase in the frequency or severity of accidents, liability claims, workers’ compensation claims, or unfavorable resolutions of claims could materially and adversely affect our operating results. In addition, actual or perceived increases in our exposure to liability, including those arising from developments such as the Montgomery decision, may result in significant increases in insurance costs, higher deductibles or self-insured retentions, more restrictive coverage terms, or the inability to purchase insurance on commercially reasonable terms. Insurers may also revise underwriting standards applicable to freight brokers, including with respect to carrier vetting, compliance, and documentation practices. Our involvement in the transportation of certain goods, including but not limited to, hazardous materials, could also increase our exposure in the event one of our contracted motor carriers is involved in an accident resulting in injuries or contamination.

In North America, as a property freight broker, we are not legally liable for loss or damage to our customers’ cargo. In our customer contracts, we may agree to assume cargo liability up to a stated maximum. We typically do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding, ocean transportation, or air freight businesses on international or domestic air shipments. Although we are not legally liable for loss or damage to our customers’ cargo, from time to time, claims may be asserted against us for cargo losses. We maintain a broad cargo liability insurance policy to help protect us against catastrophic losses that may not be recovered from the responsible contracted carrier. Currently, we also carry various liability insurance policies, including automobile and general liability, with total automobile limits of $135 million subject to a $10 million per incident deductible, and total general liability limits of $87 million subject to a $500,000 per incident deductible.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about company purchases of common stock during the quarter ended June 30, 2026:

(1) The total number of shares purchased based on trade date includes: (i) 1,266,000 shares of common stock purchased under the authorization described below; and (ii) 85,265 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) In December 2021, the Board of Directors increased the number of shares authorized for repurchase by 20,000,000 shares. As of June 30, 2026, there were 1,171,930 shares remaining for future repurchases. Repurchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.

On October 28, 2025, the Board of Directors approved an additional $2.0 billion of authorization under the company’s share repurchase program. The stock repurchase program does not obligate the company to acquire any amount of common stock and shall expire or terminate at the Board's discretion.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.