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 Fourth Quarter 2021 EPS Of $2.66 By: Expeditors International of Washington, Inc. via Business Wire February 22, 2022 at 08:30 AM EST Company Continues to Assess Impact of Cyberattack Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2021 financial results, including the following highlights compared to the same quarter of 2020: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 129% to $2.66 Net Earnings Attributable to Shareholders increased 128% to $453 million Operating Income increased 121% to $624 million Revenues increased 81% to $5.4 billion Airfreight tonnage volume increased 13% and ocean container volume decreased 4% “While the global supply chain remains stretched beyond recognizable limits, we continue to do all we can to secure carrier space for our customers and move their freight through and around the many bottlenecks in the air, over the ocean, and on land,” said Jeffrey S. Musser, President and Chief Executive Officer. “Roughly two years of pandemic-induced disruption have led to unprecedented conditions throughout our industry, with little relief in sight. There is still too little international air capacity, as travellers have been kept from flying abroad; the ocean ports are too congested to accommodate many of the ships that need to load and unload their containers; and worker shortages are severely limiting overland capacity to support the freight that is able to arrive in port. “We have worked our strong carrier relationships to secure as much capacity as we could get on behalf of all of the shippers looking for space during the quarter, but the severe imbalance between capacity and demand continues to heavily impact our industry. There is simply not enough carrier capacity in the air or on the oceans to accommodate the heavy demand for cargo space, particularly from China to the U.S., where historically high average buy and sell rates have been the most elevated. “Despite the lack of space, we experienced record-high air tonnage in the fourth quarter, as we used more air charters than at any other time in our company’s history, even with extremely elevated rates. Ocean container volumes, by contrast, declined during the quarter, as we were somewhat limited in our ability to secure necessary capacity from ocean carriers, and hampered by the time and resources required to process shipments and meet sharply growing customer demand. “Once again, I offer my sincere gratitude to our highly motivated and dedicated employees and thank them for their significant extra efforts all throughout 2021. While many companies are experiencing a decline in headcount during the so-called Great Resignation, we were able to grow our valuable employee base. That serves as testament to the culture at Expeditors: that we are a company where people are proud to work and one where unusually stressful times have inspired our very best execution aimed at outstanding customer service.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “In addition to our air and ocean products, we also experienced strong financial results in Customs Brokerage, Order Management, Transcon and Distribution. All of these areas saw growing business from both current customers and new ones as well. Our strong operating efficiency is a credit to the strength and resilience of our workforce, as our employees have been successfully able to secure the capacity needed to service our customers in these difficult conditions. While this has helped us produce strong financial results, we caution that should demand and rates return to pre-pandemic levels – whenever that may be – our revenues, expenses, and operating income are likely to decline from the all-time highs that we experienced in 2021.” COMPANY CONTINUES TO ASSESS IMPACT OF CYBERATTACK In a separate announcement on February 20, 2022, Expeditors determined that our company was the subject of a targeted cyberattack. Upon discovering the incident, we shut down most of our operating systems globally to manage the safety of our overall global systems environment. The situation is evolving, and we are working with global cybersecurity experts to manage the situation. Further communications will be shared as we manage through this significant event. Depending on the length of the shutdown of our operations, the impact of this cyberattack could have a material adverse impact on our business, revenues, results of operations and reputation. 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. Expeditors International of Washington, Inc. Fourth quarter 2021 Earnings Release, February 22, 2022 Financial Highlights for the three and twelve months ended December 31, 2021 and 2020 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2021 2020 % Change 2021 2020 % Change Revenues3 $ 5,396,343 $ 2,980,835 81 % $ 16,523,517 $ 9,584,393 72 % Directly related cost of transportation and other expenses 1, 3 $ 4,026,748 $ 2,152,249 87 % $ 12,058,155 $ 6,656,702 81 % Salaries and other operating expenses 2 $ 746,066 $ 546,775 36 % $ 2,556,036 $ 1,987,254 29 % Operating income $ 623,529 $ 281,811 121 % $ 1,909,326 $ 940,437 103 % Net earnings attributable to shareholders $ 452,832 $ 198,620 128 % $ 1,415,492 $ 696,140 103 % Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 129 % $ 8.27 $ 4.07 103 % Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 130 % $ 8.37 $ 4.14 102 % Diluted weighted average shares outstanding 170,293 171,692 171,250 170,896 Basic weighted average shares outstanding 168,393 169,473 169,145 168,333 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis. During the years ended December 31, 2021 and 2020, we repurchased 4.4 million and 4.6 million shares of common stock at an average price of $117.54 and $72.26 per share, respectively. In addition, during 2021 and 2020, we paid cash dividends of $1.16 and $1.04 per share, respectively. Employee Full-time Equivalents as of December 31, 2021 2020 North America 7,587 6,724 Europe 3,984 3,492 North Asia 2,487 2,398 South Asia 1,785 1,631 Middle East, Africa and India 1,511 1,497 Latin America 832 784 Information Systems 994 983 Corporate 408 399 Total 19,588 17,908 Disclaimer on Forward-Looking Statements: NOTE: See Disclaimer on Forward-Looking Statements in this release. Fourth quarter year-over-year percentage increase (decrease) in: Airfreight kilos Ocean freight FEU 2021 October 13% 2% November 13% (7)% December 12% (7)% Quarter 13% (4)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 25,2022 will be considered in management's 8-K “Responses to Selected Questions.” 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 continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. 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 belief that a decline in demand to pre-pandemic levels could lead to a decline in operating results; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; 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 where people want to work. These risks and uncertainties also include but are not limited to our ongoing investigation of the cyberattack, the length of time that our global operations are not fully functional, and the adverse material impact that this cyberattack may have on our business, revenues, results of operations and reputation. 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, and the ability of third-party providers to perform and potential litigation. 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. 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. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 31, 2021 December 31, 2020 Assets: Current Assets: Cash and cash equivalents $ 1,728,692 $ 1,527,791 Accounts receivable, less allowance for credit loss of $6,686 and $5,579 at December 31, 2021 and 2020, respectively 3,810,286 1,998,055 Deferred contract costs 987,266 327,448 Other 108,801 110,250 Total current assets 6,635,045 3,963,544 Property and equipment, net 487,870 506,425 Operating lease right-of-use assets 459,158 432,723 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 729 — Other assets, net 19,200 16,884 Total assets $ 7,609,929 $ 4,927,503 Liabilities: Current Liabilities: Accounts payable $ 2,012,461 $ 1,136,859 Accrued expenses, primarily salaries and related costs 403,625 257,021 Contract liabilities 1,142,026 379,722 Current portion of operating lease liabilities 82,019 74,004 Federal, state and foreign income taxes 86,166 45,437 Total current liabilities 3,726,297 1,893,043 Noncurrent portion of operating lease liabilities 385,641 364,185 Deferred federal and state income taxes, net — 7,048 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 167,210 shares and 169,294 shares at December 31, 2021 and 2020, respectively 1,672 1,693 Additional paid-in capital 3,160 157,496 Retained earnings 3,620,008 2,600,201 Accumulated other comprehensive loss (130,414 ) (99,753 ) Total shareholders’ equity 3,494,426 2,659,637 Noncontrolling interest 3,565 3,590 Total equity 3,497,991 2,663,227 Total liabilities and equity $ 7,609,929 $ 4,927,503 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Revenues: Airfreight services $ 2,293,803 $ 1,365,575 $ 6,771,402 $ 4,274,026 Ocean freight and ocean services 1,894,759 751,803 5,545,818 2,342,344 Customs brokerage and other services 1,207,781 863,457 4,206,297 2,968,023 Total revenues 5,396,343 2,980,835 16,523,517 9,584,393 Operating Expenses: Airfreight services 1,732,127 1,046,603 5,067,380 3,168,808 Ocean freight and ocean services 1,505,140 574,154 4,364,160 1,751,850 Customs brokerage and other services 789,481 531,492 2,626,615 1,736,044 Salaries and related 609,449 427,344 2,062,351 1,538,104 Rent and occupancy 48,911 43,480 186,287 169,863 Depreciation and amortization 12,897 14,339 51,312 56,959 Selling and promotion 5,547 4,135 16,026 18,436 Other 69,262 57,477 240,060 203,892 Total operating expenses 4,772,814 2,699,024 14,614,191 8,643,956 Operating income 623,529 281,811 1,909,326 940,437 Other Income (Expense): Interest income 2,211 1,545 8,807 10,415 Other, net 101 551 6,483 5,712 Other income, net 2,312 2,096 15,290 16,127 Earnings before income taxes 625,841 283,907 1,924,616 956,564 Income tax expense 171,830 84,382 505,771 258,350 Net earnings 454,011 199,525 1,418,845 698,214 Less net earnings attributable to the noncontrolling interest 1,179 905 3,353 2,074 Net earnings attributable to shareholders $ 452,832 $ 198,620 $ 1,415,492 $ 696,140 Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 $ 8.27 $ 4.07 Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 $ 8.37 $ 4.14 Weighted average diluted shares outstanding 170,293 171,692 171,250 170,896 Weighted average basic shares outstanding 168,393 169,473 169,145 168,333 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Operating Activities: Net earnings $ 454,011 $ 199,525 $ 1,418,845 $ 698,214 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,512 977 7,540 5,584 Deferred income tax (benefit) expense (6,033 ) 5,499 (3,690 ) 8,371 Stock compensation expense 12,087 17,407 69,385 62,498 Depreciation and amortization 12,897 14,339 51,312 56,959 Other, net 2,267 490 3,790 3,960 Changes in operating assets and liabilities: Increase in accounts receivable (491,830 ) (372,753 ) (1,869,827 ) (647,193 ) Increase in accounts payable and accrued expenses 272,280 228,523 1,041,805 430,452 Increase in deferred contract costs (149,701 ) (89,560 ) (700,273 ) (189,447 ) Increase in contract liabilities 168,551 105,455 803,837 217,699 Increase (decrease) in income taxes payable, net 25,845 19,146 57,867 8,502 Decrease (increase) in other, net 3,111 12,612 (12,097 ) (630 ) Net cash from operating activities 304,997 141,660 868,494 654,969 Investing Activities: Purchase of property and equipment (11,447 ) (10,124 ) (36,247 ) (47,543 ) Other, net (345 ) 553 (398 ) 1,516 Net cash from investing activities (11,792 ) (9,571 ) (36,645 ) (46,027 ) Financing Activities: Proceeds from borrowing on lines of credit, net (56 ) 32 7,512 43 Proceeds from issuance of common stock 6,672 12,329 106,105 186,345 Repurchases of common stock (289,530 ) (18,162 ) (514,594 ) (332,387 ) Dividends Paid (97,379 ) (88,114 ) (195,766 ) (174,929 ) Payments for taxes related to net share settlement of equity awards — — (15,172 ) (10,566 ) Distributions to noncontrolling interest — — (1,631 ) — Net cash from financing activities (380,293 ) (93,915 ) (613,546 ) (331,494 ) Effect of exchange rate changes on cash and cash equivalents (4,326 ) 24,107 (17,402 ) 19,852 Change in cash and cash equivalents (91,414 ) 62,281 200,901 297,300 Cash and cash equivalents at beginning of period 1,820,106 1,465,510 1,527,791 1,230,491 Cash and cash equivalents at end of period $ 1,728,692 $ 1,527,791 $ 1,728,692 $ 1,527,791 Taxes Paid: Income taxes $ 147,396 $ 59,607 $ 442,549 $ 239,849 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 December 31, 2021: Revenues $ 1,337,772 128,240 63,013 2,154,243 740,305 682,819 291,040 (1,089 ) 5,396,343 Directly related cost of transportation and other expenses1 $ 760,915 70,450 39,072 1,824,159 615,659 485,732 231,171 (410 ) 4,026,748 Salaries and other operating expenses2 $ 300,474 33,033 15,908 160,862 58,360 135,422 42,682 (675 ) 746,066 Operating income $ 276,383 24,757 8,033 169,222 66,286 61,665 17,187 (4 ) 623,529 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 7,596 549 171 594 595 1,599 343 — 11,447 Depreciation and amortization $ 7,476 439 270 1,269 508 2,333 602 — 12,897 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the three months ended December 31, 2020: Revenues3 $ 800,663 93,554 41,526 1,148,483 319,687 431,619 146,331 (1,028 ) 2,980,835 Directly related cost of transportation and other expenses1,3 $ 460,287 60,026 23,421 951,331 247,314 299,485 110,914 (529 ) 2,152,249 Salaries and other operating expenses2 $ 245,722 26,367 11,894 96,498 40,251 101,631 24,905 (493 ) 546,775 Operating income $ 94,654 7,161 6,211 100,654 32,122 30,503 10,512 (6 ) 281,811 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 3,328 194 66 417 1,229 2,976 1,914 — 10,124 Depreciation and amortization $ 9,235 498 284 1,283 493 2,091 455 — 14,339 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the twelve months ended December 31, 2021: Revenues3 $ 4,344,825 440,226 209,161 6,363,054 2,046,569 2,258,911 865,509 (4,738 ) 16,523,517 Directly related cost of transportation and other expenses1,3 $ 2,491,947 245,842 125,940 5,295,612 1,666,792 1,558,705 675,303 (1,986 ) 12,058,155 Salaries and other operating expenses2 $ 1,019,236 123,147 57,779 515,703 204,574 494,760 143,581 (2,744 ) 2,556,036 Operating income $ 833,642 71,237 25,442 551,739 175,203 205,446 46,625 (8 ) 1,909,326 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 19,527 983 471 1,786 2,057 9,507 1,916 — 36,247 Depreciation and amortization $ 29,826 1,780 1,079 5,047 1,965 9,228 2,387 — 51,312 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the twelve months ended December 31, 2020: Revenues3 $ 2,776,537 325,878 156,163 3,425,510 961,989 1,455,746 486,331 (3,761 ) 9,584,393 Directly related cost of transportation and other expenses1,3 $ 1,568,452 190,326 93,249 2,744,264 711,004 992,357 359,002 (1,952 ) 6,656,702 Salaries and other operating expenses2 $ 877,117 100,687 48,114 332,978 149,269 375,900 104,968 (1,779 ) 1,987,254 Operating income $ 330,968 34,865 14,800 348,268 101,716 87,489 22,361 (30 ) 940,437 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 31,604 1,886 564 2,202 2,264 6,394 2,629 — 47,543 Depreciation and amortization $ 37,081 1,946 1,194 4,961 1,876 8,029 1,872 — 56,959 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20220221005445/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 Fourth Quarter 2021 EPS Of $2.66 By: Expeditors International of Washington, Inc. via Business Wire February 22, 2022 at 08:30 AM EST Company Continues to Assess Impact of Cyberattack Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2021 financial results, including the following highlights compared to the same quarter of 2020: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 129% to $2.66 Net Earnings Attributable to Shareholders increased 128% to $453 million Operating Income increased 121% to $624 million Revenues increased 81% to $5.4 billion Airfreight tonnage volume increased 13% and ocean container volume decreased 4% “While the global supply chain remains stretched beyond recognizable limits, we continue to do all we can to secure carrier space for our customers and move their freight through and around the many bottlenecks in the air, over the ocean, and on land,” said Jeffrey S. Musser, President and Chief Executive Officer. “Roughly two years of pandemic-induced disruption have led to unprecedented conditions throughout our industry, with little relief in sight. There is still too little international air capacity, as travellers have been kept from flying abroad; the ocean ports are too congested to accommodate many of the ships that need to load and unload their containers; and worker shortages are severely limiting overland capacity to support the freight that is able to arrive in port. “We have worked our strong carrier relationships to secure as much capacity as we could get on behalf of all of the shippers looking for space during the quarter, but the severe imbalance between capacity and demand continues to heavily impact our industry. There is simply not enough carrier capacity in the air or on the oceans to accommodate the heavy demand for cargo space, particularly from China to the U.S., where historically high average buy and sell rates have been the most elevated. “Despite the lack of space, we experienced record-high air tonnage in the fourth quarter, as we used more air charters than at any other time in our company’s history, even with extremely elevated rates. Ocean container volumes, by contrast, declined during the quarter, as we were somewhat limited in our ability to secure necessary capacity from ocean carriers, and hampered by the time and resources required to process shipments and meet sharply growing customer demand. “Once again, I offer my sincere gratitude to our highly motivated and dedicated employees and thank them for their significant extra efforts all throughout 2021. While many companies are experiencing a decline in headcount during the so-called Great Resignation, we were able to grow our valuable employee base. That serves as testament to the culture at Expeditors: that we are a company where people are proud to work and one where unusually stressful times have inspired our very best execution aimed at outstanding customer service.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “In addition to our air and ocean products, we also experienced strong financial results in Customs Brokerage, Order Management, Transcon and Distribution. All of these areas saw growing business from both current customers and new ones as well. Our strong operating efficiency is a credit to the strength and resilience of our workforce, as our employees have been successfully able to secure the capacity needed to service our customers in these difficult conditions. While this has helped us produce strong financial results, we caution that should demand and rates return to pre-pandemic levels – whenever that may be – our revenues, expenses, and operating income are likely to decline from the all-time highs that we experienced in 2021.” COMPANY CONTINUES TO ASSESS IMPACT OF CYBERATTACK In a separate announcement on February 20, 2022, Expeditors determined that our company was the subject of a targeted cyberattack. Upon discovering the incident, we shut down most of our operating systems globally to manage the safety of our overall global systems environment. The situation is evolving, and we are working with global cybersecurity experts to manage the situation. Further communications will be shared as we manage through this significant event. Depending on the length of the shutdown of our operations, the impact of this cyberattack could have a material adverse impact on our business, revenues, results of operations and reputation. 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. Expeditors International of Washington, Inc. Fourth quarter 2021 Earnings Release, February 22, 2022 Financial Highlights for the three and twelve months ended December 31, 2021 and 2020 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2021 2020 % Change 2021 2020 % Change Revenues3 $ 5,396,343 $ 2,980,835 81 % $ 16,523,517 $ 9,584,393 72 % Directly related cost of transportation and other expenses 1, 3 $ 4,026,748 $ 2,152,249 87 % $ 12,058,155 $ 6,656,702 81 % Salaries and other operating expenses 2 $ 746,066 $ 546,775 36 % $ 2,556,036 $ 1,987,254 29 % Operating income $ 623,529 $ 281,811 121 % $ 1,909,326 $ 940,437 103 % Net earnings attributable to shareholders $ 452,832 $ 198,620 128 % $ 1,415,492 $ 696,140 103 % Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 129 % $ 8.27 $ 4.07 103 % Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 130 % $ 8.37 $ 4.14 102 % Diluted weighted average shares outstanding 170,293 171,692 171,250 170,896 Basic weighted average shares outstanding 168,393 169,473 169,145 168,333 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis. During the years ended December 31, 2021 and 2020, we repurchased 4.4 million and 4.6 million shares of common stock at an average price of $117.54 and $72.26 per share, respectively. In addition, during 2021 and 2020, we paid cash dividends of $1.16 and $1.04 per share, respectively. Employee Full-time Equivalents as of December 31, 2021 2020 North America 7,587 6,724 Europe 3,984 3,492 North Asia 2,487 2,398 South Asia 1,785 1,631 Middle East, Africa and India 1,511 1,497 Latin America 832 784 Information Systems 994 983 Corporate 408 399 Total 19,588 17,908 Disclaimer on Forward-Looking Statements: NOTE: See Disclaimer on Forward-Looking Statements in this release. Fourth quarter year-over-year percentage increase (decrease) in: Airfreight kilos Ocean freight FEU 2021 October 13% 2% November 13% (7)% December 12% (7)% Quarter 13% (4)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 25,2022 will be considered in management's 8-K “Responses to Selected Questions.” 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 continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. 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 belief that a decline in demand to pre-pandemic levels could lead to a decline in operating results; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; 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 where people want to work. These risks and uncertainties also include but are not limited to our ongoing investigation of the cyberattack, the length of time that our global operations are not fully functional, and the adverse material impact that this cyberattack may have on our business, revenues, results of operations and reputation. 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, and the ability of third-party providers to perform and potential litigation. 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. 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. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 31, 2021 December 31, 2020 Assets: Current Assets: Cash and cash equivalents $ 1,728,692 $ 1,527,791 Accounts receivable, less allowance for credit loss of $6,686 and $5,579 at December 31, 2021 and 2020, respectively 3,810,286 1,998,055 Deferred contract costs 987,266 327,448 Other 108,801 110,250 Total current assets 6,635,045 3,963,544 Property and equipment, net 487,870 506,425 Operating lease right-of-use assets 459,158 432,723 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 729 — Other assets, net 19,200 16,884 Total assets $ 7,609,929 $ 4,927,503 Liabilities: Current Liabilities: Accounts payable $ 2,012,461 $ 1,136,859 Accrued expenses, primarily salaries and related costs 403,625 257,021 Contract liabilities 1,142,026 379,722 Current portion of operating lease liabilities 82,019 74,004 Federal, state and foreign income taxes 86,166 45,437 Total current liabilities 3,726,297 1,893,043 Noncurrent portion of operating lease liabilities 385,641 364,185 Deferred federal and state income taxes, net — 7,048 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 167,210 shares and 169,294 shares at December 31, 2021 and 2020, respectively 1,672 1,693 Additional paid-in capital 3,160 157,496 Retained earnings 3,620,008 2,600,201 Accumulated other comprehensive loss (130,414 ) (99,753 ) Total shareholders’ equity 3,494,426 2,659,637 Noncontrolling interest 3,565 3,590 Total equity 3,497,991 2,663,227 Total liabilities and equity $ 7,609,929 $ 4,927,503 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Revenues: Airfreight services $ 2,293,803 $ 1,365,575 $ 6,771,402 $ 4,274,026 Ocean freight and ocean services 1,894,759 751,803 5,545,818 2,342,344 Customs brokerage and other services 1,207,781 863,457 4,206,297 2,968,023 Total revenues 5,396,343 2,980,835 16,523,517 9,584,393 Operating Expenses: Airfreight services 1,732,127 1,046,603 5,067,380 3,168,808 Ocean freight and ocean services 1,505,140 574,154 4,364,160 1,751,850 Customs brokerage and other services 789,481 531,492 2,626,615 1,736,044 Salaries and related 609,449 427,344 2,062,351 1,538,104 Rent and occupancy 48,911 43,480 186,287 169,863 Depreciation and amortization 12,897 14,339 51,312 56,959 Selling and promotion 5,547 4,135 16,026 18,436 Other 69,262 57,477 240,060 203,892 Total operating expenses 4,772,814 2,699,024 14,614,191 8,643,956 Operating income 623,529 281,811 1,909,326 940,437 Other Income (Expense): Interest income 2,211 1,545 8,807 10,415 Other, net 101 551 6,483 5,712 Other income, net 2,312 2,096 15,290 16,127 Earnings before income taxes 625,841 283,907 1,924,616 956,564 Income tax expense 171,830 84,382 505,771 258,350 Net earnings 454,011 199,525 1,418,845 698,214 Less net earnings attributable to the noncontrolling interest 1,179 905 3,353 2,074 Net earnings attributable to shareholders $ 452,832 $ 198,620 $ 1,415,492 $ 696,140 Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 $ 8.27 $ 4.07 Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 $ 8.37 $ 4.14 Weighted average diluted shares outstanding 170,293 171,692 171,250 170,896 Weighted average basic shares outstanding 168,393 169,473 169,145 168,333 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Operating Activities: Net earnings $ 454,011 $ 199,525 $ 1,418,845 $ 698,214 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,512 977 7,540 5,584 Deferred income tax (benefit) expense (6,033 ) 5,499 (3,690 ) 8,371 Stock compensation expense 12,087 17,407 69,385 62,498 Depreciation and amortization 12,897 14,339 51,312 56,959 Other, net 2,267 490 3,790 3,960 Changes in operating assets and liabilities: Increase in accounts receivable (491,830 ) (372,753 ) (1,869,827 ) (647,193 ) Increase in accounts payable and accrued expenses 272,280 228,523 1,041,805 430,452 Increase in deferred contract costs (149,701 ) (89,560 ) (700,273 ) (189,447 ) Increase in contract liabilities 168,551 105,455 803,837 217,699 Increase (decrease) in income taxes payable, net 25,845 19,146 57,867 8,502 Decrease (increase) in other, net 3,111 12,612 (12,097 ) (630 ) Net cash from operating activities 304,997 141,660 868,494 654,969 Investing Activities: Purchase of property and equipment (11,447 ) (10,124 ) (36,247 ) (47,543 ) Other, net (345 ) 553 (398 ) 1,516 Net cash from investing activities (11,792 ) (9,571 ) (36,645 ) (46,027 ) Financing Activities: Proceeds from borrowing on lines of credit, net (56 ) 32 7,512 43 Proceeds from issuance of common stock 6,672 12,329 106,105 186,345 Repurchases of common stock (289,530 ) (18,162 ) (514,594 ) (332,387 ) Dividends Paid (97,379 ) (88,114 ) (195,766 ) (174,929 ) Payments for taxes related to net share settlement of equity awards — — (15,172 ) (10,566 ) Distributions to noncontrolling interest — — (1,631 ) — Net cash from financing activities (380,293 ) (93,915 ) (613,546 ) (331,494 ) Effect of exchange rate changes on cash and cash equivalents (4,326 ) 24,107 (17,402 ) 19,852 Change in cash and cash equivalents (91,414 ) 62,281 200,901 297,300 Cash and cash equivalents at beginning of period 1,820,106 1,465,510 1,527,791 1,230,491 Cash and cash equivalents at end of period $ 1,728,692 $ 1,527,791 $ 1,728,692 $ 1,527,791 Taxes Paid: Income taxes $ 147,396 $ 59,607 $ 442,549 $ 239,849 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 December 31, 2021: Revenues $ 1,337,772 128,240 63,013 2,154,243 740,305 682,819 291,040 (1,089 ) 5,396,343 Directly related cost of transportation and other expenses1 $ 760,915 70,450 39,072 1,824,159 615,659 485,732 231,171 (410 ) 4,026,748 Salaries and other operating expenses2 $ 300,474 33,033 15,908 160,862 58,360 135,422 42,682 (675 ) 746,066 Operating income $ 276,383 24,757 8,033 169,222 66,286 61,665 17,187 (4 ) 623,529 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 7,596 549 171 594 595 1,599 343 — 11,447 Depreciation and amortization $ 7,476 439 270 1,269 508 2,333 602 — 12,897 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the three months ended December 31, 2020: Revenues3 $ 800,663 93,554 41,526 1,148,483 319,687 431,619 146,331 (1,028 ) 2,980,835 Directly related cost of transportation and other expenses1,3 $ 460,287 60,026 23,421 951,331 247,314 299,485 110,914 (529 ) 2,152,249 Salaries and other operating expenses2 $ 245,722 26,367 11,894 96,498 40,251 101,631 24,905 (493 ) 546,775 Operating income $ 94,654 7,161 6,211 100,654 32,122 30,503 10,512 (6 ) 281,811 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 3,328 194 66 417 1,229 2,976 1,914 — 10,124 Depreciation and amortization $ 9,235 498 284 1,283 493 2,091 455 — 14,339 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the twelve months ended December 31, 2021: Revenues3 $ 4,344,825 440,226 209,161 6,363,054 2,046,569 2,258,911 865,509 (4,738 ) 16,523,517 Directly related cost of transportation and other expenses1,3 $ 2,491,947 245,842 125,940 5,295,612 1,666,792 1,558,705 675,303 (1,986 ) 12,058,155 Salaries and other operating expenses2 $ 1,019,236 123,147 57,779 515,703 204,574 494,760 143,581 (2,744 ) 2,556,036 Operating income $ 833,642 71,237 25,442 551,739 175,203 205,446 46,625 (8 ) 1,909,326 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 19,527 983 471 1,786 2,057 9,507 1,916 — 36,247 Depreciation and amortization $ 29,826 1,780 1,079 5,047 1,965 9,228 2,387 — 51,312 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the twelve months ended December 31, 2020: Revenues3 $ 2,776,537 325,878 156,163 3,425,510 961,989 1,455,746 486,331 (3,761 ) 9,584,393 Directly related cost of transportation and other expenses1,3 $ 1,568,452 190,326 93,249 2,744,264 711,004 992,357 359,002 (1,952 ) 6,656,702 Salaries and other operating expenses2 $ 877,117 100,687 48,114 332,978 149,269 375,900 104,968 (1,779 ) 1,987,254 Operating income $ 330,968 34,865 14,800 348,268 101,716 87,489 22,361 (30 ) 940,437 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 31,604 1,886 564 2,202 2,264 6,394 2,629 — 47,543 Depreciation and amortization $ 37,081 1,946 1,194 4,961 1,876 8,029 1,872 — 56,959 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis. View source version on businesswire.com: https://www.businesswire.com/news/home/20220221005445/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 fourth quarter 2021 financial results, including the following highlights compared to the same quarter of 2020: Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 129% to $2.66 Net Earnings Attributable to Shareholders increased 128% to $453 million Operating Income increased 121% to $624 million Revenues increased 81% to $5.4 billion Airfreight tonnage volume increased 13% and ocean container volume decreased 4% “While the global supply chain remains stretched beyond recognizable limits, we continue to do all we can to secure carrier space for our customers and move their freight through and around the many bottlenecks in the air, over the ocean, and on land,” said Jeffrey S. Musser, President and Chief Executive Officer. “Roughly two years of pandemic-induced disruption have led to unprecedented conditions throughout our industry, with little relief in sight. There is still too little international air capacity, as travellers have been kept from flying abroad; the ocean ports are too congested to accommodate many of the ships that need to load and unload their containers; and worker shortages are severely limiting overland capacity to support the freight that is able to arrive in port. “We have worked our strong carrier relationships to secure as much capacity as we could get on behalf of all of the shippers looking for space during the quarter, but the severe imbalance between capacity and demand continues to heavily impact our industry. There is simply not enough carrier capacity in the air or on the oceans to accommodate the heavy demand for cargo space, particularly from China to the U.S., where historically high average buy and sell rates have been the most elevated. “Despite the lack of space, we experienced record-high air tonnage in the fourth quarter, as we used more air charters than at any other time in our company’s history, even with extremely elevated rates. Ocean container volumes, by contrast, declined during the quarter, as we were somewhat limited in our ability to secure necessary capacity from ocean carriers, and hampered by the time and resources required to process shipments and meet sharply growing customer demand. “Once again, I offer my sincere gratitude to our highly motivated and dedicated employees and thank them for their significant extra efforts all throughout 2021. While many companies are experiencing a decline in headcount during the so-called Great Resignation, we were able to grow our valuable employee base. That serves as testament to the culture at Expeditors: that we are a company where people are proud to work and one where unusually stressful times have inspired our very best execution aimed at outstanding customer service.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “In addition to our air and ocean products, we also experienced strong financial results in Customs Brokerage, Order Management, Transcon and Distribution. All of these areas saw growing business from both current customers and new ones as well. Our strong operating efficiency is a credit to the strength and resilience of our workforce, as our employees have been successfully able to secure the capacity needed to service our customers in these difficult conditions. While this has helped us produce strong financial results, we caution that should demand and rates return to pre-pandemic levels – whenever that may be – our revenues, expenses, and operating income are likely to decline from the all-time highs that we experienced in 2021.” COMPANY CONTINUES TO ASSESS IMPACT OF CYBERATTACK In a separate announcement on February 20, 2022, Expeditors determined that our company was the subject of a targeted cyberattack. Upon discovering the incident, we shut down most of our operating systems globally to manage the safety of our overall global systems environment. The situation is evolving, and we are working with global cybersecurity experts to manage the situation. Further communications will be shared as we manage through this significant event. Depending on the length of the shutdown of our operations, the impact of this cyberattack could have a material adverse impact on our business, revenues, results of operations and reputation. 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. Expeditors International of Washington, Inc. Fourth quarter 2021 Earnings Release, February 22, 2022 Financial Highlights for the three and twelve months ended December 31, 2021 and 2020 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2021 2020 % Change 2021 2020 % Change Revenues3 $ 5,396,343 $ 2,980,835 81 % $ 16,523,517 $ 9,584,393 72 % Directly related cost of transportation and other expenses 1, 3 $ 4,026,748 $ 2,152,249 87 % $ 12,058,155 $ 6,656,702 81 % Salaries and other operating expenses 2 $ 746,066 $ 546,775 36 % $ 2,556,036 $ 1,987,254 29 % Operating income $ 623,529 $ 281,811 121 % $ 1,909,326 $ 940,437 103 % Net earnings attributable to shareholders $ 452,832 $ 198,620 128 % $ 1,415,492 $ 696,140 103 % Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 129 % $ 8.27 $ 4.07 103 % Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 130 % $ 8.37 $ 4.14 102 % Diluted weighted average shares outstanding 170,293 171,692 171,250 170,896 Basic weighted average shares outstanding 168,393 169,473 169,145 168,333 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis. During the years ended December 31, 2021 and 2020, we repurchased 4.4 million and 4.6 million shares of common stock at an average price of $117.54 and $72.26 per share, respectively. In addition, during 2021 and 2020, we paid cash dividends of $1.16 and $1.04 per share, respectively. Employee Full-time Equivalents as of December 31, 2021 2020 North America 7,587 6,724 Europe 3,984 3,492 North Asia 2,487 2,398 South Asia 1,785 1,631 Middle East, Africa and India 1,511 1,497 Latin America 832 784 Information Systems 994 983 Corporate 408 399 Total 19,588 17,908 Disclaimer on Forward-Looking Statements: NOTE: See Disclaimer on Forward-Looking Statements in this release. Fourth quarter year-over-year percentage increase (decrease) in: Airfreight kilos Ocean freight FEU 2021 October 13% 2% November 13% (7)% December 12% (7)% Quarter 13% (4)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 25,2022 will be considered in management's 8-K “Responses to Selected Questions.” 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 continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. 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 belief that a decline in demand to pre-pandemic levels could lead to a decline in operating results; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; 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 where people want to work. These risks and uncertainties also include but are not limited to our ongoing investigation of the cyberattack, the length of time that our global operations are not fully functional, and the adverse material impact that this cyberattack may have on our business, revenues, results of operations and reputation. 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, and the ability of third-party providers to perform and potential litigation. 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. 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. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 31, 2021 December 31, 2020 Assets: Current Assets: Cash and cash equivalents $ 1,728,692 $ 1,527,791 Accounts receivable, less allowance for credit loss of $6,686 and $5,579 at December 31, 2021 and 2020, respectively 3,810,286 1,998,055 Deferred contract costs 987,266 327,448 Other 108,801 110,250 Total current assets 6,635,045 3,963,544 Property and equipment, net 487,870 506,425 Operating lease right-of-use assets 459,158 432,723 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 729 — Other assets, net 19,200 16,884 Total assets $ 7,609,929 $ 4,927,503 Liabilities: Current Liabilities: Accounts payable $ 2,012,461 $ 1,136,859 Accrued expenses, primarily salaries and related costs 403,625 257,021 Contract liabilities 1,142,026 379,722 Current portion of operating lease liabilities 82,019 74,004 Federal, state and foreign income taxes 86,166 45,437 Total current liabilities 3,726,297 1,893,043 Noncurrent portion of operating lease liabilities 385,641 364,185 Deferred federal and state income taxes, net — 7,048 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 167,210 shares and 169,294 shares at December 31, 2021 and 2020, respectively 1,672 1,693 Additional paid-in capital 3,160 157,496 Retained earnings 3,620,008 2,600,201 Accumulated other comprehensive loss (130,414 ) (99,753 ) Total shareholders’ equity 3,494,426 2,659,637 Noncontrolling interest 3,565 3,590 Total equity 3,497,991 2,663,227 Total liabilities and equity $ 7,609,929 $ 4,927,503 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Revenues: Airfreight services $ 2,293,803 $ 1,365,575 $ 6,771,402 $ 4,274,026 Ocean freight and ocean services 1,894,759 751,803 5,545,818 2,342,344 Customs brokerage and other services 1,207,781 863,457 4,206,297 2,968,023 Total revenues 5,396,343 2,980,835 16,523,517 9,584,393 Operating Expenses: Airfreight services 1,732,127 1,046,603 5,067,380 3,168,808 Ocean freight and ocean services 1,505,140 574,154 4,364,160 1,751,850 Customs brokerage and other services 789,481 531,492 2,626,615 1,736,044 Salaries and related 609,449 427,344 2,062,351 1,538,104 Rent and occupancy 48,911 43,480 186,287 169,863 Depreciation and amortization 12,897 14,339 51,312 56,959 Selling and promotion 5,547 4,135 16,026 18,436 Other 69,262 57,477 240,060 203,892 Total operating expenses 4,772,814 2,699,024 14,614,191 8,643,956 Operating income 623,529 281,811 1,909,326 940,437 Other Income (Expense): Interest income 2,211 1,545 8,807 10,415 Other, net 101 551 6,483 5,712 Other income, net 2,312 2,096 15,290 16,127 Earnings before income taxes 625,841 283,907 1,924,616 956,564 Income tax expense 171,830 84,382 505,771 258,350 Net earnings 454,011 199,525 1,418,845 698,214 Less net earnings attributable to the noncontrolling interest 1,179 905 3,353 2,074 Net earnings attributable to shareholders $ 452,832 $ 198,620 $ 1,415,492 $ 696,140 Diluted earnings attributable to shareholders per share $ 2.66 $ 1.16 $ 8.27 $ 4.07 Basic earnings attributable to shareholders per share $ 2.69 $ 1.17 $ 8.37 $ 4.14 Weighted average diluted shares outstanding 170,293 171,692 171,250 170,896 Weighted average basic shares outstanding 168,393 169,473 169,145 168,333 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Operating Activities: Net earnings $ 454,011 $ 199,525 $ 1,418,845 $ 698,214 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,512 977 7,540 5,584 Deferred income tax (benefit) expense (6,033 ) 5,499 (3,690 ) 8,371 Stock compensation expense 12,087 17,407 69,385 62,498 Depreciation and amortization 12,897 14,339 51,312 56,959 Other, net 2,267 490 3,790 3,960 Changes in operating assets and liabilities: Increase in accounts receivable (491,830 ) (372,753 ) (1,869,827 ) (647,193 ) Increase in accounts payable and accrued expenses 272,280 228,523 1,041,805 430,452 Increase in deferred contract costs (149,701 ) (89,560 ) (700,273 ) (189,447 ) Increase in contract liabilities 168,551 105,455 803,837 217,699 Increase (decrease) in income taxes payable, net 25,845 19,146 57,867 8,502 Decrease (increase) in other, net 3,111 12,612 (12,097 ) (630 ) Net cash from operating activities 304,997 141,660 868,494 654,969 Investing Activities: Purchase of property and equipment (11,447 ) (10,124 ) (36,247 ) (47,543 ) Other, net (345 ) 553 (398 ) 1,516 Net cash from investing activities (11,792 ) (9,571 ) (36,645 ) (46,027 ) Financing Activities: Proceeds from borrowing on lines of credit, net (56 ) 32 7,512 43 Proceeds from issuance of common stock 6,672 12,329 106,105 186,345 Repurchases of common stock (289,530 ) (18,162 ) (514,594 ) (332,387 ) Dividends Paid (97,379 ) (88,114 ) (195,766 ) (174,929 ) Payments for taxes related to net share settlement of equity awards — — (15,172 ) (10,566 ) Distributions to noncontrolling interest — — (1,631 ) — Net cash from financing activities (380,293 ) (93,915 ) (613,546 ) (331,494 ) Effect of exchange rate changes on cash and cash equivalents (4,326 ) 24,107 (17,402 ) 19,852 Change in cash and cash equivalents (91,414 ) 62,281 200,901 297,300 Cash and cash equivalents at beginning of period 1,820,106 1,465,510 1,527,791 1,230,491 Cash and cash equivalents at end of period $ 1,728,692 $ 1,527,791 $ 1,728,692 $ 1,527,791 Taxes Paid: Income taxes $ 147,396 $ 59,607 $ 442,549 $ 239,849 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 December 31, 2021: Revenues $ 1,337,772 128,240 63,013 2,154,243 740,305 682,819 291,040 (1,089 ) 5,396,343 Directly related cost of transportation and other expenses1 $ 760,915 70,450 39,072 1,824,159 615,659 485,732 231,171 (410 ) 4,026,748 Salaries and other operating expenses2 $ 300,474 33,033 15,908 160,862 58,360 135,422 42,682 (675 ) 746,066 Operating income $ 276,383 24,757 8,033 169,222 66,286 61,665 17,187 (4 ) 623,529 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 7,596 549 171 594 595 1,599 343 — 11,447 Depreciation and amortization $ 7,476 439 270 1,269 508 2,333 602 — 12,897 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the three months ended December 31, 2020: Revenues3 $ 800,663 93,554 41,526 1,148,483 319,687 431,619 146,331 (1,028 ) 2,980,835 Directly related cost of transportation and other expenses1,3 $ 460,287 60,026 23,421 951,331 247,314 299,485 110,914 (529 ) 2,152,249 Salaries and other operating expenses2 $ 245,722 26,367 11,894 96,498 40,251 101,631 24,905 (493 ) 546,775 Operating income $ 94,654 7,161 6,211 100,654 32,122 30,503 10,512 (6 ) 281,811 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 3,328 194 66 417 1,229 2,976 1,914 — 10,124 Depreciation and amortization $ 9,235 498 284 1,283 493 2,091 455 — 14,339 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the twelve months ended December 31, 2021: Revenues3 $ 4,344,825 440,226 209,161 6,363,054 2,046,569 2,258,911 865,509 (4,738 ) 16,523,517 Directly related cost of transportation and other expenses1,3 $ 2,491,947 245,842 125,940 5,295,612 1,666,792 1,558,705 675,303 (1,986 ) 12,058,155 Salaries and other operating expenses2 $ 1,019,236 123,147 57,779 515,703 204,574 494,760 143,581 (2,744 ) 2,556,036 Operating income $ 833,642 71,237 25,442 551,739 175,203 205,446 46,625 (8 ) 1,909,326 Identifiable assets at period end $ 3,699,748 265,872 122,327 1,587,659 572,980 1,089,963 350,843 (79,463 ) 7,609,929 Capital expenditures $ 19,527 983 471 1,786 2,057 9,507 1,916 — 36,247 Depreciation and amortization $ 29,826 1,780 1,079 5,047 1,965 9,228 2,387 — 51,312 Equity $ 2,599,804 111,952 41,743 224,765 140,129 294,348 123,598 (38,348 ) 3,497,991 For the twelve months ended December 31, 2020: Revenues3 $ 2,776,537 325,878 156,163 3,425,510 961,989 1,455,746 486,331 (3,761 ) 9,584,393 Directly related cost of transportation and other expenses1,3 $ 1,568,452 190,326 93,249 2,744,264 711,004 992,357 359,002 (1,952 ) 6,656,702 Salaries and other operating expenses2 $ 877,117 100,687 48,114 332,978 149,269 375,900 104,968 (1,779 ) 1,987,254 Operating income $ 330,968 34,865 14,800 348,268 101,716 87,489 22,361 (30 ) 940,437 Identifiable assets at period end $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503 Capital expenditures $ 31,604 1,886 564 2,202 2,264 6,394 2,629 — 47,543 Depreciation and amortization $ 37,081 1,946 1,194 4,961 1,876 8,029 1,872 — 56,959 Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227 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. 3 Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis. 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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