Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Expeditors Reports Third Quarter 2022 EPS of $2.54 By: Expeditors International of Washington, Inc. via Business Wire November 08, 2022 at 08:30 AM EST Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 22% to $2.54 Net Earnings Attributable to Shareholders increased 15% to $414 million Operating Income increased 8% to $527 million Revenues increased 1% to $4.4 billion Airfreight tonnage volume and ocean container volume decreased 13% and 10%, respectively “We continued to perform at a very high level, generating another strong quarter of financial performance and cash flow,” said Jeffrey S. Musser, President and Chief Executive Officer. “We accomplished this despite uncertain economic conditions that resulted in declines in tonnage and volumes, reductions in both buy and sell rates, and an overall rebalancing of capacity in the logistics freight markets. These conditions have continued in recent weeks and we believe that inflation, high energy costs, and government fiscal and monetary measures will continue to exert pressure on global supply chains. Additionally, many shippers are now looking to shrink retail inventories that were overstocked earlier in the year in reaction to COVID-related supply chain disruptions. “All of our people and products performed well during the quarter, as buy and sell rates remained volatile while declining from their pandemic peaks. Once again, we were able to adjust quickly to rapidly evolving operating conditions in which pandemic-induced demand and supply chain constraints gave way to falling demand, and while not completely eliminated, an easing of many of the labor and equipment shortages and the bottlenecks that had so severely constrained capacity and impeded throughput at the ports over the past two years. We are also seeing air capacity return to higher levels, with Hong Kong and other origins in Asia reopening. In addition, the largely land- and port-based constraints that had so severely impacted the ocean market have significantly improved to where carriers are once again starting to manage capacity in certain trade lanes in an effort to address declining demand while sustaining falling rates. “Based on what we currently see, these changing conditions that involve decelerating demand and an overall decline in rates are likely to continue for the remainder of 2022 and into 2023. Just as we quickly adapted to unprecedented operating conditions spurred by the pandemic, we are adjusting for this new operating environment and continue to make focused efforts to control costs. Most critically, we remain fully engaged with our customers to accommodate their needs for capacity and services, while looking forward to when the economy eventually reverses course and demand starts to increase again.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We believe we are now seeing a changing environment. While many concurrent disruptions continue to plague our industry, including the quarantines in China, the conflict in Ukraine, and the shortage of labor and certain equipment, conditions are starting to ease. We now believe we are seeing a shift towards slowing volumes and falling rates. We have been here before and know which levers to pull to enhance our efficiencies and control costs. We are ready to further align ourselves with a post-COVID environment of higher inflation and tapered demand. We do not know how long these new conditions will last. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand.” Mr. Powell noted that the Company benefitted from a favorable tax rate during the quarter and returned over $1 billion to shareholders via repurchased stock so far this year. Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions. _______________________ 1Diluted earnings attributable to shareholders per share. NOTE: See Disclaimer on Forward-Looking Statements in this release. Disclaimer on Forward-Looking Statements: Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to uncertain air and ocean capacity; volatile air and ocean pricing and uneven demand for such services; port congestion; equipment imbalances; labor shortages; uncertain availability of warehouse and pier space; trade disruptions; rising fuels costs; the conflict in Ukraine; inflation, high energy costs, government fiscal and monetary measures, and signs of a slowing economy and drop in demand; and the uneven lifting of the COVID-19 pandemic restrictions around the world. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance, rate volatility, and various on-shore bottlenecks may continue; our ability to control costs and continue to enhance our productivity; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The ongoing impact of the COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company’s most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law. Expeditors International of Washington, Inc. Third Quarter 2022 Earnings Release, November 8, 2022 Financial Highlights for the three and nine months ended September 30, 2022 and 2021 (Unaudited) (in 000's of US dollars except per share data) Three months ended September 30, Nine months ended September 30, 2022 2021 % Change 2022 2021 % Change Revenues $ 4,362,146 $ 4,319,261 1% $ 13,629,756 $ 11,127,174 22% Directly related cost of transportation and other expenses1 $ 3,194,273 $ 3,185,490 - $ 10,151,332 $ 8,031,407 26% Salaries and other operating expenses2 $ 640,950 $ 644,134 - $ 1,983,759 $ 1,809,970 10% Operating income $ 526,923 $ 489,637 8% $ 1,494,665 $ 1,285,797 16% Net earnings attributable to shareholders $ 414,209 $ 359,068 15% $ 1,138,123 $ 962,660 18% Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 22% $ 6.84 $ 5.61 22% Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 21% $ 6.90 $ 5.68 21% Diluted weighted average shares outstanding 163,250 171,565 (5)% 166,398 171,549 (3)% Basic weighted average shares outstanding 162,029 169,633 (4)% 164,944 169,398 (3)% _______________________ 1 Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2 Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings. Employee Full-time Equivalents as of September 30, 2022 2021 North America 7,799 7,315 Europe 4,194 3,860 North Asia 2,488 2,440 South Asia 1,845 1,740 Middle East, Africa and India 1,549 1,507 Latin America 851 801 Information Systems 1,144 976 Corporate 399 395 Total 20,269 19,034 Third quarter year-over-year percentage decrease in: 2022 Airfreight kilos Ocean freight FEU July (11)% (9)% August (14)% (11)% September (15)% (10)% Quarter (13)% (10)% During the three and nine months ended September 30, 2022, we repurchased 4.5 million and 9.5 million shares of common stock at $103.56 and $106.84 per share, respectively. During the three and nine months ended September 30, 2021, we repurchased 0.6 million and 2.0 million shares of common stock at an average price of $124.95 and $110.45 per share, respectively. Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 11, 2022 will be considered in management's 8-K “Responses to Selected Questions.” EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) September 30, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,154,534 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021 2,748,322 3,810,286 Deferred contract costs 499,935 987,266 Other 184,765 108,801 Total current assets 5,587,556 6,635,045 Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021 480,941 487,870 Operating lease right-of-use assets 486,980 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 27,295 729 Other assets, net 16,827 19,200 Total assets $ 6,607,526 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable 1,544,757 2,012,461 Accrued liabilities, primarily salaries and related costs 404,207 403,625 Contract liabilities 594,244 1,142,026 Current portion of operating lease liabilities 88,535 82,019 Federal, state and foreign income taxes 74,507 86,166 Total current liabilities 2,706,250 3,726,297 Noncurrent portion of operating lease liabilities 409,883 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021 1,591 1,672 Additional paid-in capital 118 3,160 Retained earnings 3,738,600 3,620,008 Accumulated other comprehensive loss (258,129 ) (130,414 ) Total shareholders’ equity 3,482,180 3,494,426 Noncontrolling interest 9,213 3,565 Total equity 3,491,393 3,497,991 Total liabilities and equity $ 6,607,526 $ 7,609,929 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,480,955 $ 1,628,115 $ 4,682,076 $ 4,477,599 Ocean freight and ocean services 1,684,579 1,598,597 5,420,471 3,651,059 Customs brokerage and other services 1,196,612 1,092,549 3,527,209 2,998,516 Total revenues 4,362,146 4,319,261 13,629,756 11,127,174 Operating Expenses: Airfreight services 1,104,812 1,244,381 3,459,861 3,335,253 Ocean freight and ocean services 1,343,355 1,254,334 4,345,963 2,859,020 Customs brokerage and other services 746,106 686,775 2,345,508 1,837,134 Salaries and related 499,341 519,611 1,546,503 1,452,902 Rent and occupancy 52,715 46,730 155,241 137,376 Depreciation and amortization 15,187 12,753 42,416 38,415 Selling and promotion 6,239 4,237 16,174 10,479 Other 67,468 60,803 223,425 170,798 Total operating expenses 3,835,223 3,829,624 12,135,091 9,841,377 Operating income 526,923 489,637 1,494,665 1,285,797 Other Income (Expense): Interest income 7,835 2,462 12,447 6,596 Other, net 98 733 7,731 6,382 Other income, net 7,933 3,195 20,178 12,978 Earnings before income taxes 534,856 492,832 1,514,843 1,298,775 Income tax expense 120,694 132,922 368,975 333,941 Net earnings 414,162 359,910 1,145,868 964,834 Less net (losses) earnings attributable to the noncontrolling interest (47 ) 842 7,745 2,174 Net earnings attributable to shareholders $ 414,209 $ 359,068 $ 1,138,123 $ 962,660 Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 $ 6.84 $ 5.61 Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 $ 6.90 $ 5.68 Weighted average diluted shares outstanding 163,250 171,565 166,398 171,549 Weighted average basic shares outstanding 162,029 169,633 164,944 169,398 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Operating Activities: Net earnings $ 414,162 $ 359,910 $ 1,145,868 $ 964,834 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 5,570 3,739 9,917 6,028 Deferred income tax (benefit) expense (3,070 ) (7,658 ) (14,928 ) 2,343 Stock compensation expense 14,175 15,204 51,296 57,298 Depreciation and amortization 15,187 12,753 42,416 38,415 Other, net 1,435 626 144 1,523 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 634,421 (714,300 ) 880,364 (1,377,997 ) (Decrease) increase in accounts payable and accrued expenses (350,922 ) 436,343 (343,902 ) 769,525 Decrease (increase) in deferred contract costs 226,087 (328,932 ) 437,155 (550,572 ) (Decrease) increase in contract liabilities (249,895 ) 381,192 (488,826 ) 635,286 (Decrease) increase in income taxes payable, net (31,397 ) 33,378 (78,568 ) 32,022 (Increase) decrease in other, net (5,369 ) (14,884 ) 2,040 (15,208 ) Net cash from operating activities 670,384 177,371 1,642,976 563,497 Investing Activities: Purchase of property and equipment (15,928 ) (9,870 ) (68,498 ) (24,800 ) Other, net (590 ) (157 ) (645 ) (53 ) Net cash from investing activities (16,518 ) (10,027 ) (69,143 ) (24,853 ) Financing Activities: Payments from borrowing on lines of credit (21,117 ) (1,045 ) (29,601 ) (2,570 ) Proceeds from borrowing on lines of credit — 8,524 56,545 10,138 Proceeds from issuance of common stock 61,885 56,965 73,318 99,433 Repurchases of common stock (469,041 ) (76,595 ) (1,018,106 ) (225,064 ) Dividends paid — — (109,828 ) (98,387 ) Payments for taxes related to net share settlement of equity awards — (4 ) (19,333 ) (15,172 ) Distribution to noncontrolling interest (543 ) (1,631 ) (543 ) (1,631 ) Net cash from financing activities (428,816 ) (13,786 ) (1,047,548 ) (233,253 ) Effect of exchange rate changes on cash and cash equivalents (47,487 ) (7,573 ) (100,443 ) (13,076 ) Change in cash and cash equivalents 177,563 145,985 425,842 292,315 Cash and cash equivalents at beginning of period 1,976,971 1,674,121 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,154,534 $ 1,820,106 $ 2,154,534 $ 1,820,106 Taxes Paid: Income taxes $ 150,960 $ 104,617 $ 465,711 $ 295,153 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited) UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the three months ended September 30, 2022: Revenues $ 1,244,515 140,622 68,057 1,489,331 518,780 637,411 264,518 (1,088 ) 4,362,146 Directly related cost of transportation and other expenses1 $ 742,826 80,116 41,638 1,250,872 416,817 453,248 209,248 (492 ) 3,194,273 Salaries and other operating expenses2 $ 314,442 30,151 15,057 98,758 37,577 109,308 36,181 (524 ) 640,950 Operating income $ 187,247 30,355 11,362 139,701 64,386 74,855 19,089 (72 ) 526,923 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 9,278 556 419 581 426 3,619 1,049 — 15,928 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the three months ended September 30, 2021: Revenues $ 1,134,096 116,404 54,303 1,690,381 538,780 564,810 221,777 (1,290 ) 4,319,261 Directly related cost of transportation and other expenses1 $ 661,515 63,031 34,216 1,417,283 445,970 389,208 174,733 (466 ) 3,185,490 Salaries and other operating expenses2 $ 238,943 33,077 14,759 141,109 54,003 126,475 36,598 (830 ) 644,134 Operating income $ 233,638 20,296 5,328 131,989 38,807 49,127 10,446 6 489,637 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 6,001 248 175 435 351 2,254 406 — 9,870 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the nine months ended September 30, 2022: Revenues $ 3,751,102 390,220 191,900 4,840,822 1,776,355 1,871,509 811,147 (3,299 ) 13,629,756 Directly related cost of transportation and other expenses1 $ 2,303,428 230,154 118,793 4,054,319 1,463,173 1,335,267 647,510 (1,312 ) 10,151,332 Salaries and other operating expenses2 $ 962,817 86,328 42,654 326,767 121,634 333,971 111,481 (1,893 ) 1,983,759 Operating income $ 484,857 73,738 30,453 459,736 191,548 202,271 52,156 (94 ) 1,494,665 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 45,149 2,672 705 1,878 1,152 13,343 3,599 — 68,498 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the nine months ended September 30, 2021: Revenues $ 3,007,053 311,986 146,148 4,208,811 1,306,264 1,576,092 574,469 (3,649 ) 11,127,174 Directly related cost of transportation and other expenses1 $ 1,731,032 175,392 86,868 3,471,453 1,051,133 1,072,973 444,132 (1,576 ) 8,031,407 Salaries and other operating expenses2 $ 718,762 90,114 41,871 354,841 146,214 359,338 100,899 (2,069 ) 1,809,970 Operating income $ 557,259 46,480 17,409 382,517 108,917 143,781 29,438 (4 ) 1,285,797 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 11,931 434 300 1,192 1,462 7,908 1,573 — 24,800 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 1Directly related cost of transportation and other expenses totals operating expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the Condensed Consolidated Statements of Earnings. View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006017/en/Contacts Jeffrey S. Musser President and Chief Executive Officer (206) 674-3433 Bradley S. Powell Senior Vice President and Chief Financial Officer (206) 674-3412 Geoffrey Buscher Director – Investor Relations (206) 892-4510 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Expeditors Reports Third Quarter 2022 EPS of $2.54 By: Expeditors International of Washington, Inc. via Business Wire November 08, 2022 at 08:30 AM EST Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 22% to $2.54 Net Earnings Attributable to Shareholders increased 15% to $414 million Operating Income increased 8% to $527 million Revenues increased 1% to $4.4 billion Airfreight tonnage volume and ocean container volume decreased 13% and 10%, respectively “We continued to perform at a very high level, generating another strong quarter of financial performance and cash flow,” said Jeffrey S. Musser, President and Chief Executive Officer. “We accomplished this despite uncertain economic conditions that resulted in declines in tonnage and volumes, reductions in both buy and sell rates, and an overall rebalancing of capacity in the logistics freight markets. These conditions have continued in recent weeks and we believe that inflation, high energy costs, and government fiscal and monetary measures will continue to exert pressure on global supply chains. Additionally, many shippers are now looking to shrink retail inventories that were overstocked earlier in the year in reaction to COVID-related supply chain disruptions. “All of our people and products performed well during the quarter, as buy and sell rates remained volatile while declining from their pandemic peaks. Once again, we were able to adjust quickly to rapidly evolving operating conditions in which pandemic-induced demand and supply chain constraints gave way to falling demand, and while not completely eliminated, an easing of many of the labor and equipment shortages and the bottlenecks that had so severely constrained capacity and impeded throughput at the ports over the past two years. We are also seeing air capacity return to higher levels, with Hong Kong and other origins in Asia reopening. In addition, the largely land- and port-based constraints that had so severely impacted the ocean market have significantly improved to where carriers are once again starting to manage capacity in certain trade lanes in an effort to address declining demand while sustaining falling rates. “Based on what we currently see, these changing conditions that involve decelerating demand and an overall decline in rates are likely to continue for the remainder of 2022 and into 2023. Just as we quickly adapted to unprecedented operating conditions spurred by the pandemic, we are adjusting for this new operating environment and continue to make focused efforts to control costs. Most critically, we remain fully engaged with our customers to accommodate their needs for capacity and services, while looking forward to when the economy eventually reverses course and demand starts to increase again.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We believe we are now seeing a changing environment. While many concurrent disruptions continue to plague our industry, including the quarantines in China, the conflict in Ukraine, and the shortage of labor and certain equipment, conditions are starting to ease. We now believe we are seeing a shift towards slowing volumes and falling rates. We have been here before and know which levers to pull to enhance our efficiencies and control costs. We are ready to further align ourselves with a post-COVID environment of higher inflation and tapered demand. We do not know how long these new conditions will last. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand.” Mr. Powell noted that the Company benefitted from a favorable tax rate during the quarter and returned over $1 billion to shareholders via repurchased stock so far this year. Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions. _______________________ 1Diluted earnings attributable to shareholders per share. NOTE: See Disclaimer on Forward-Looking Statements in this release. Disclaimer on Forward-Looking Statements: Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to uncertain air and ocean capacity; volatile air and ocean pricing and uneven demand for such services; port congestion; equipment imbalances; labor shortages; uncertain availability of warehouse and pier space; trade disruptions; rising fuels costs; the conflict in Ukraine; inflation, high energy costs, government fiscal and monetary measures, and signs of a slowing economy and drop in demand; and the uneven lifting of the COVID-19 pandemic restrictions around the world. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance, rate volatility, and various on-shore bottlenecks may continue; our ability to control costs and continue to enhance our productivity; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The ongoing impact of the COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company’s most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law. Expeditors International of Washington, Inc. Third Quarter 2022 Earnings Release, November 8, 2022 Financial Highlights for the three and nine months ended September 30, 2022 and 2021 (Unaudited) (in 000's of US dollars except per share data) Three months ended September 30, Nine months ended September 30, 2022 2021 % Change 2022 2021 % Change Revenues $ 4,362,146 $ 4,319,261 1% $ 13,629,756 $ 11,127,174 22% Directly related cost of transportation and other expenses1 $ 3,194,273 $ 3,185,490 - $ 10,151,332 $ 8,031,407 26% Salaries and other operating expenses2 $ 640,950 $ 644,134 - $ 1,983,759 $ 1,809,970 10% Operating income $ 526,923 $ 489,637 8% $ 1,494,665 $ 1,285,797 16% Net earnings attributable to shareholders $ 414,209 $ 359,068 15% $ 1,138,123 $ 962,660 18% Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 22% $ 6.84 $ 5.61 22% Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 21% $ 6.90 $ 5.68 21% Diluted weighted average shares outstanding 163,250 171,565 (5)% 166,398 171,549 (3)% Basic weighted average shares outstanding 162,029 169,633 (4)% 164,944 169,398 (3)% _______________________ 1 Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2 Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings. Employee Full-time Equivalents as of September 30, 2022 2021 North America 7,799 7,315 Europe 4,194 3,860 North Asia 2,488 2,440 South Asia 1,845 1,740 Middle East, Africa and India 1,549 1,507 Latin America 851 801 Information Systems 1,144 976 Corporate 399 395 Total 20,269 19,034 Third quarter year-over-year percentage decrease in: 2022 Airfreight kilos Ocean freight FEU July (11)% (9)% August (14)% (11)% September (15)% (10)% Quarter (13)% (10)% During the three and nine months ended September 30, 2022, we repurchased 4.5 million and 9.5 million shares of common stock at $103.56 and $106.84 per share, respectively. During the three and nine months ended September 30, 2021, we repurchased 0.6 million and 2.0 million shares of common stock at an average price of $124.95 and $110.45 per share, respectively. Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 11, 2022 will be considered in management's 8-K “Responses to Selected Questions.” EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) September 30, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,154,534 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021 2,748,322 3,810,286 Deferred contract costs 499,935 987,266 Other 184,765 108,801 Total current assets 5,587,556 6,635,045 Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021 480,941 487,870 Operating lease right-of-use assets 486,980 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 27,295 729 Other assets, net 16,827 19,200 Total assets $ 6,607,526 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable 1,544,757 2,012,461 Accrued liabilities, primarily salaries and related costs 404,207 403,625 Contract liabilities 594,244 1,142,026 Current portion of operating lease liabilities 88,535 82,019 Federal, state and foreign income taxes 74,507 86,166 Total current liabilities 2,706,250 3,726,297 Noncurrent portion of operating lease liabilities 409,883 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021 1,591 1,672 Additional paid-in capital 118 3,160 Retained earnings 3,738,600 3,620,008 Accumulated other comprehensive loss (258,129 ) (130,414 ) Total shareholders’ equity 3,482,180 3,494,426 Noncontrolling interest 9,213 3,565 Total equity 3,491,393 3,497,991 Total liabilities and equity $ 6,607,526 $ 7,609,929 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,480,955 $ 1,628,115 $ 4,682,076 $ 4,477,599 Ocean freight and ocean services 1,684,579 1,598,597 5,420,471 3,651,059 Customs brokerage and other services 1,196,612 1,092,549 3,527,209 2,998,516 Total revenues 4,362,146 4,319,261 13,629,756 11,127,174 Operating Expenses: Airfreight services 1,104,812 1,244,381 3,459,861 3,335,253 Ocean freight and ocean services 1,343,355 1,254,334 4,345,963 2,859,020 Customs brokerage and other services 746,106 686,775 2,345,508 1,837,134 Salaries and related 499,341 519,611 1,546,503 1,452,902 Rent and occupancy 52,715 46,730 155,241 137,376 Depreciation and amortization 15,187 12,753 42,416 38,415 Selling and promotion 6,239 4,237 16,174 10,479 Other 67,468 60,803 223,425 170,798 Total operating expenses 3,835,223 3,829,624 12,135,091 9,841,377 Operating income 526,923 489,637 1,494,665 1,285,797 Other Income (Expense): Interest income 7,835 2,462 12,447 6,596 Other, net 98 733 7,731 6,382 Other income, net 7,933 3,195 20,178 12,978 Earnings before income taxes 534,856 492,832 1,514,843 1,298,775 Income tax expense 120,694 132,922 368,975 333,941 Net earnings 414,162 359,910 1,145,868 964,834 Less net (losses) earnings attributable to the noncontrolling interest (47 ) 842 7,745 2,174 Net earnings attributable to shareholders $ 414,209 $ 359,068 $ 1,138,123 $ 962,660 Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 $ 6.84 $ 5.61 Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 $ 6.90 $ 5.68 Weighted average diluted shares outstanding 163,250 171,565 166,398 171,549 Weighted average basic shares outstanding 162,029 169,633 164,944 169,398 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Operating Activities: Net earnings $ 414,162 $ 359,910 $ 1,145,868 $ 964,834 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 5,570 3,739 9,917 6,028 Deferred income tax (benefit) expense (3,070 ) (7,658 ) (14,928 ) 2,343 Stock compensation expense 14,175 15,204 51,296 57,298 Depreciation and amortization 15,187 12,753 42,416 38,415 Other, net 1,435 626 144 1,523 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 634,421 (714,300 ) 880,364 (1,377,997 ) (Decrease) increase in accounts payable and accrued expenses (350,922 ) 436,343 (343,902 ) 769,525 Decrease (increase) in deferred contract costs 226,087 (328,932 ) 437,155 (550,572 ) (Decrease) increase in contract liabilities (249,895 ) 381,192 (488,826 ) 635,286 (Decrease) increase in income taxes payable, net (31,397 ) 33,378 (78,568 ) 32,022 (Increase) decrease in other, net (5,369 ) (14,884 ) 2,040 (15,208 ) Net cash from operating activities 670,384 177,371 1,642,976 563,497 Investing Activities: Purchase of property and equipment (15,928 ) (9,870 ) (68,498 ) (24,800 ) Other, net (590 ) (157 ) (645 ) (53 ) Net cash from investing activities (16,518 ) (10,027 ) (69,143 ) (24,853 ) Financing Activities: Payments from borrowing on lines of credit (21,117 ) (1,045 ) (29,601 ) (2,570 ) Proceeds from borrowing on lines of credit — 8,524 56,545 10,138 Proceeds from issuance of common stock 61,885 56,965 73,318 99,433 Repurchases of common stock (469,041 ) (76,595 ) (1,018,106 ) (225,064 ) Dividends paid — — (109,828 ) (98,387 ) Payments for taxes related to net share settlement of equity awards — (4 ) (19,333 ) (15,172 ) Distribution to noncontrolling interest (543 ) (1,631 ) (543 ) (1,631 ) Net cash from financing activities (428,816 ) (13,786 ) (1,047,548 ) (233,253 ) Effect of exchange rate changes on cash and cash equivalents (47,487 ) (7,573 ) (100,443 ) (13,076 ) Change in cash and cash equivalents 177,563 145,985 425,842 292,315 Cash and cash equivalents at beginning of period 1,976,971 1,674,121 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,154,534 $ 1,820,106 $ 2,154,534 $ 1,820,106 Taxes Paid: Income taxes $ 150,960 $ 104,617 $ 465,711 $ 295,153 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited) UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the three months ended September 30, 2022: Revenues $ 1,244,515 140,622 68,057 1,489,331 518,780 637,411 264,518 (1,088 ) 4,362,146 Directly related cost of transportation and other expenses1 $ 742,826 80,116 41,638 1,250,872 416,817 453,248 209,248 (492 ) 3,194,273 Salaries and other operating expenses2 $ 314,442 30,151 15,057 98,758 37,577 109,308 36,181 (524 ) 640,950 Operating income $ 187,247 30,355 11,362 139,701 64,386 74,855 19,089 (72 ) 526,923 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 9,278 556 419 581 426 3,619 1,049 — 15,928 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the three months ended September 30, 2021: Revenues $ 1,134,096 116,404 54,303 1,690,381 538,780 564,810 221,777 (1,290 ) 4,319,261 Directly related cost of transportation and other expenses1 $ 661,515 63,031 34,216 1,417,283 445,970 389,208 174,733 (466 ) 3,185,490 Salaries and other operating expenses2 $ 238,943 33,077 14,759 141,109 54,003 126,475 36,598 (830 ) 644,134 Operating income $ 233,638 20,296 5,328 131,989 38,807 49,127 10,446 6 489,637 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 6,001 248 175 435 351 2,254 406 — 9,870 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the nine months ended September 30, 2022: Revenues $ 3,751,102 390,220 191,900 4,840,822 1,776,355 1,871,509 811,147 (3,299 ) 13,629,756 Directly related cost of transportation and other expenses1 $ 2,303,428 230,154 118,793 4,054,319 1,463,173 1,335,267 647,510 (1,312 ) 10,151,332 Salaries and other operating expenses2 $ 962,817 86,328 42,654 326,767 121,634 333,971 111,481 (1,893 ) 1,983,759 Operating income $ 484,857 73,738 30,453 459,736 191,548 202,271 52,156 (94 ) 1,494,665 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 45,149 2,672 705 1,878 1,152 13,343 3,599 — 68,498 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the nine months ended September 30, 2021: Revenues $ 3,007,053 311,986 146,148 4,208,811 1,306,264 1,576,092 574,469 (3,649 ) 11,127,174 Directly related cost of transportation and other expenses1 $ 1,731,032 175,392 86,868 3,471,453 1,051,133 1,072,973 444,132 (1,576 ) 8,031,407 Salaries and other operating expenses2 $ 718,762 90,114 41,871 354,841 146,214 359,338 100,899 (2,069 ) 1,809,970 Operating income $ 557,259 46,480 17,409 382,517 108,917 143,781 29,438 (4 ) 1,285,797 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 11,931 434 300 1,192 1,462 7,908 1,573 — 24,800 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 1Directly related cost of transportation and other expenses totals operating expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the Condensed Consolidated Statements of Earnings. View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006017/en/Contacts Jeffrey S. Musser President and Chief Executive Officer (206) 674-3433 Bradley S. Powell Senior Vice President and Chief Financial Officer (206) 674-3412 Geoffrey Buscher Director – Investor Relations (206) 892-4510
Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 22% to $2.54 Net Earnings Attributable to Shareholders increased 15% to $414 million Operating Income increased 8% to $527 million Revenues increased 1% to $4.4 billion Airfreight tonnage volume and ocean container volume decreased 13% and 10%, respectively “We continued to perform at a very high level, generating another strong quarter of financial performance and cash flow,” said Jeffrey S. Musser, President and Chief Executive Officer. “We accomplished this despite uncertain economic conditions that resulted in declines in tonnage and volumes, reductions in both buy and sell rates, and an overall rebalancing of capacity in the logistics freight markets. These conditions have continued in recent weeks and we believe that inflation, high energy costs, and government fiscal and monetary measures will continue to exert pressure on global supply chains. Additionally, many shippers are now looking to shrink retail inventories that were overstocked earlier in the year in reaction to COVID-related supply chain disruptions. “All of our people and products performed well during the quarter, as buy and sell rates remained volatile while declining from their pandemic peaks. Once again, we were able to adjust quickly to rapidly evolving operating conditions in which pandemic-induced demand and supply chain constraints gave way to falling demand, and while not completely eliminated, an easing of many of the labor and equipment shortages and the bottlenecks that had so severely constrained capacity and impeded throughput at the ports over the past two years. We are also seeing air capacity return to higher levels, with Hong Kong and other origins in Asia reopening. In addition, the largely land- and port-based constraints that had so severely impacted the ocean market have significantly improved to where carriers are once again starting to manage capacity in certain trade lanes in an effort to address declining demand while sustaining falling rates. “Based on what we currently see, these changing conditions that involve decelerating demand and an overall decline in rates are likely to continue for the remainder of 2022 and into 2023. Just as we quickly adapted to unprecedented operating conditions spurred by the pandemic, we are adjusting for this new operating environment and continue to make focused efforts to control costs. Most critically, we remain fully engaged with our customers to accommodate their needs for capacity and services, while looking forward to when the economy eventually reverses course and demand starts to increase again.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “As we have commented previously, we did not expect the unprecedented COVID-related operating conditions to persist long-term. We believe we are now seeing a changing environment. While many concurrent disruptions continue to plague our industry, including the quarantines in China, the conflict in Ukraine, and the shortage of labor and certain equipment, conditions are starting to ease. We now believe we are seeing a shift towards slowing volumes and falling rates. We have been here before and know which levers to pull to enhance our efficiencies and control costs. We are ready to further align ourselves with a post-COVID environment of higher inflation and tapered demand. We do not know how long these new conditions will last. We will continue to invest appropriately for the long-term in our people, processes, and technology, and we believe we will be fully capable of meeting the eventual upturn in demand.” Mr. Powell noted that the Company benefitted from a favorable tax rate during the quarter and returned over $1 billion to shareholders via repurchased stock so far this year. Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions. _______________________ 1Diluted earnings attributable to shareholders per share. NOTE: See Disclaimer on Forward-Looking Statements in this release. Disclaimer on Forward-Looking Statements: Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to uncertain air and ocean capacity; volatile air and ocean pricing and uneven demand for such services; port congestion; equipment imbalances; labor shortages; uncertain availability of warehouse and pier space; trade disruptions; rising fuels costs; the conflict in Ukraine; inflation, high energy costs, government fiscal and monetary measures, and signs of a slowing economy and drop in demand; and the uneven lifting of the COVID-19 pandemic restrictions around the world. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance, rate volatility, and various on-shore bottlenecks may continue; our ability to control costs and continue to enhance our productivity; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The ongoing impact of the COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and the Company’s most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law. Expeditors International of Washington, Inc. Third Quarter 2022 Earnings Release, November 8, 2022 Financial Highlights for the three and nine months ended September 30, 2022 and 2021 (Unaudited) (in 000's of US dollars except per share data) Three months ended September 30, Nine months ended September 30, 2022 2021 % Change 2022 2021 % Change Revenues $ 4,362,146 $ 4,319,261 1% $ 13,629,756 $ 11,127,174 22% Directly related cost of transportation and other expenses1 $ 3,194,273 $ 3,185,490 - $ 10,151,332 $ 8,031,407 26% Salaries and other operating expenses2 $ 640,950 $ 644,134 - $ 1,983,759 $ 1,809,970 10% Operating income $ 526,923 $ 489,637 8% $ 1,494,665 $ 1,285,797 16% Net earnings attributable to shareholders $ 414,209 $ 359,068 15% $ 1,138,123 $ 962,660 18% Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 22% $ 6.84 $ 5.61 22% Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 21% $ 6.90 $ 5.68 21% Diluted weighted average shares outstanding 163,250 171,565 (5)% 166,398 171,549 (3)% Basic weighted average shares outstanding 162,029 169,633 (4)% 164,944 169,398 (3)% _______________________ 1 Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2 Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings. Employee Full-time Equivalents as of September 30, 2022 2021 North America 7,799 7,315 Europe 4,194 3,860 North Asia 2,488 2,440 South Asia 1,845 1,740 Middle East, Africa and India 1,549 1,507 Latin America 851 801 Information Systems 1,144 976 Corporate 399 395 Total 20,269 19,034 Third quarter year-over-year percentage decrease in: 2022 Airfreight kilos Ocean freight FEU July (11)% (9)% August (14)% (11)% September (15)% (10)% Quarter (13)% (10)% During the three and nine months ended September 30, 2022, we repurchased 4.5 million and 9.5 million shares of common stock at $103.56 and $106.84 per share, respectively. During the three and nine months ended September 30, 2021, we repurchased 0.6 million and 2.0 million shares of common stock at an average price of $124.95 and $110.45 per share, respectively. Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 11, 2022 will be considered in management's 8-K “Responses to Selected Questions.” EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) September 30, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,154,534 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021 2,748,322 3,810,286 Deferred contract costs 499,935 987,266 Other 184,765 108,801 Total current assets 5,587,556 6,635,045 Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021 480,941 487,870 Operating lease right-of-use assets 486,980 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 27,295 729 Other assets, net 16,827 19,200 Total assets $ 6,607,526 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable 1,544,757 2,012,461 Accrued liabilities, primarily salaries and related costs 404,207 403,625 Contract liabilities 594,244 1,142,026 Current portion of operating lease liabilities 88,535 82,019 Federal, state and foreign income taxes 74,507 86,166 Total current liabilities 2,706,250 3,726,297 Noncurrent portion of operating lease liabilities 409,883 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021 1,591 1,672 Additional paid-in capital 118 3,160 Retained earnings 3,738,600 3,620,008 Accumulated other comprehensive loss (258,129 ) (130,414 ) Total shareholders’ equity 3,482,180 3,494,426 Noncontrolling interest 9,213 3,565 Total equity 3,491,393 3,497,991 Total liabilities and equity $ 6,607,526 $ 7,609,929 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,480,955 $ 1,628,115 $ 4,682,076 $ 4,477,599 Ocean freight and ocean services 1,684,579 1,598,597 5,420,471 3,651,059 Customs brokerage and other services 1,196,612 1,092,549 3,527,209 2,998,516 Total revenues 4,362,146 4,319,261 13,629,756 11,127,174 Operating Expenses: Airfreight services 1,104,812 1,244,381 3,459,861 3,335,253 Ocean freight and ocean services 1,343,355 1,254,334 4,345,963 2,859,020 Customs brokerage and other services 746,106 686,775 2,345,508 1,837,134 Salaries and related 499,341 519,611 1,546,503 1,452,902 Rent and occupancy 52,715 46,730 155,241 137,376 Depreciation and amortization 15,187 12,753 42,416 38,415 Selling and promotion 6,239 4,237 16,174 10,479 Other 67,468 60,803 223,425 170,798 Total operating expenses 3,835,223 3,829,624 12,135,091 9,841,377 Operating income 526,923 489,637 1,494,665 1,285,797 Other Income (Expense): Interest income 7,835 2,462 12,447 6,596 Other, net 98 733 7,731 6,382 Other income, net 7,933 3,195 20,178 12,978 Earnings before income taxes 534,856 492,832 1,514,843 1,298,775 Income tax expense 120,694 132,922 368,975 333,941 Net earnings 414,162 359,910 1,145,868 964,834 Less net (losses) earnings attributable to the noncontrolling interest (47 ) 842 7,745 2,174 Net earnings attributable to shareholders $ 414,209 $ 359,068 $ 1,138,123 $ 962,660 Diluted earnings attributable to shareholders per share $ 2.54 $ 2.09 $ 6.84 $ 5.61 Basic earnings attributable to shareholders per share $ 2.56 $ 2.12 $ 6.90 $ 5.68 Weighted average diluted shares outstanding 163,250 171,565 166,398 171,549 Weighted average basic shares outstanding 162,029 169,633 164,944 169,398 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Operating Activities: Net earnings $ 414,162 $ 359,910 $ 1,145,868 $ 964,834 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 5,570 3,739 9,917 6,028 Deferred income tax (benefit) expense (3,070 ) (7,658 ) (14,928 ) 2,343 Stock compensation expense 14,175 15,204 51,296 57,298 Depreciation and amortization 15,187 12,753 42,416 38,415 Other, net 1,435 626 144 1,523 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 634,421 (714,300 ) 880,364 (1,377,997 ) (Decrease) increase in accounts payable and accrued expenses (350,922 ) 436,343 (343,902 ) 769,525 Decrease (increase) in deferred contract costs 226,087 (328,932 ) 437,155 (550,572 ) (Decrease) increase in contract liabilities (249,895 ) 381,192 (488,826 ) 635,286 (Decrease) increase in income taxes payable, net (31,397 ) 33,378 (78,568 ) 32,022 (Increase) decrease in other, net (5,369 ) (14,884 ) 2,040 (15,208 ) Net cash from operating activities 670,384 177,371 1,642,976 563,497 Investing Activities: Purchase of property and equipment (15,928 ) (9,870 ) (68,498 ) (24,800 ) Other, net (590 ) (157 ) (645 ) (53 ) Net cash from investing activities (16,518 ) (10,027 ) (69,143 ) (24,853 ) Financing Activities: Payments from borrowing on lines of credit (21,117 ) (1,045 ) (29,601 ) (2,570 ) Proceeds from borrowing on lines of credit — 8,524 56,545 10,138 Proceeds from issuance of common stock 61,885 56,965 73,318 99,433 Repurchases of common stock (469,041 ) (76,595 ) (1,018,106 ) (225,064 ) Dividends paid — — (109,828 ) (98,387 ) Payments for taxes related to net share settlement of equity awards — (4 ) (19,333 ) (15,172 ) Distribution to noncontrolling interest (543 ) (1,631 ) (543 ) (1,631 ) Net cash from financing activities (428,816 ) (13,786 ) (1,047,548 ) (233,253 ) Effect of exchange rate changes on cash and cash equivalents (47,487 ) (7,573 ) (100,443 ) (13,076 ) Change in cash and cash equivalents 177,563 145,985 425,842 292,315 Cash and cash equivalents at beginning of period 1,976,971 1,674,121 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,154,534 $ 1,820,106 $ 2,154,534 $ 1,820,106 Taxes Paid: Income taxes $ 150,960 $ 104,617 $ 465,711 $ 295,153 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited) UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the three months ended September 30, 2022: Revenues $ 1,244,515 140,622 68,057 1,489,331 518,780 637,411 264,518 (1,088 ) 4,362,146 Directly related cost of transportation and other expenses1 $ 742,826 80,116 41,638 1,250,872 416,817 453,248 209,248 (492 ) 3,194,273 Salaries and other operating expenses2 $ 314,442 30,151 15,057 98,758 37,577 109,308 36,181 (524 ) 640,950 Operating income $ 187,247 30,355 11,362 139,701 64,386 74,855 19,089 (72 ) 526,923 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 9,278 556 419 581 426 3,619 1,049 — 15,928 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the three months ended September 30, 2021: Revenues $ 1,134,096 116,404 54,303 1,690,381 538,780 564,810 221,777 (1,290 ) 4,319,261 Directly related cost of transportation and other expenses1 $ 661,515 63,031 34,216 1,417,283 445,970 389,208 174,733 (466 ) 3,185,490 Salaries and other operating expenses2 $ 238,943 33,077 14,759 141,109 54,003 126,475 36,598 (830 ) 644,134 Operating income $ 233,638 20,296 5,328 131,989 38,807 49,127 10,446 6 489,637 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 6,001 248 175 435 351 2,254 406 — 9,870 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the nine months ended September 30, 2022: Revenues $ 3,751,102 390,220 191,900 4,840,822 1,776,355 1,871,509 811,147 (3,299 ) 13,629,756 Directly related cost of transportation and other expenses1 $ 2,303,428 230,154 118,793 4,054,319 1,463,173 1,335,267 647,510 (1,312 ) 10,151,332 Salaries and other operating expenses2 $ 962,817 86,328 42,654 326,767 121,634 333,971 111,481 (1,893 ) 1,983,759 Operating income $ 484,857 73,738 30,453 459,736 191,548 202,271 52,156 (94 ) 1,494,665 Identifiable assets at period end $ 3,553,279 272,527 137,472 915,895 421,148 1,020,756 322,160 (35,711 ) 6,607,526 Capital expenditures $ 45,149 2,672 705 1,878 1,152 13,343 3,599 — 68,498 Equity $ 2,430,632 129,346 59,494 304,496 180,855 289,595 140,147 (43,172 ) 3,491,393 For the nine months ended September 30, 2021: Revenues $ 3,007,053 311,986 146,148 4,208,811 1,306,264 1,576,092 574,469 (3,649 ) 11,127,174 Directly related cost of transportation and other expenses1 $ 1,731,032 175,392 86,868 3,471,453 1,051,133 1,072,973 444,132 (1,576 ) 8,031,407 Salaries and other operating expenses2 $ 718,762 90,114 41,871 354,841 146,214 359,338 100,899 (2,069 ) 1,809,970 Operating income $ 557,259 46,480 17,409 382,517 108,917 143,781 29,438 (4 ) 1,285,797 Identifiable assets at period end $ 3,417,496 256,638 110,406 1,558,109 457,615 990,123 328,671 (42,675 ) 7,076,383 Capital expenditures $ 11,931 434 300 1,192 1,462 7,908 1,573 — 24,800 Equity $ 2,451,584 93,084 37,087 368,535 129,941 258,805 123,304 (41,748 ) 3,420,592 1Directly related cost of transportation and other expenses totals operating expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings. 2Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the Condensed Consolidated Statements of Earnings. 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Jeffrey S. Musser President and Chief Executive Officer (206) 674-3433 Bradley S. Powell Senior Vice President and Chief Financial Officer (206) 674-3412 Geoffrey Buscher Director – Investor Relations (206) 892-4510