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 2022 EPS of $1.38 By: Expeditors International of Washington, Inc. via Business Wire February 21, 2023 at 08:30 AM EST Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 48% to $1.38 Net Earnings Attributable to Shareholders decreased 52% to $219 million Operating Income decreased 47% to $330 million Revenues decreased 36% to $3.4 billion Airfreight tonnage volume decreased 20% and ocean container volume decreased 15% “As pandemic-related bottlenecks eased and air and ocean supply/demand imbalances began to dissipate in the first half of the year, average buy and sell rates progressively declined to varying degrees, as they typically do – until they suddenly began to plummet simultaneously and faster than we would have expected in the fourth quarter,” said Jeffrey S. Musser, President and Chief Executive Officer. “The rapid turnaround in Q4 was stunning and unparalleled.” “Fourth quarter demand also was softer than we would have expected, particularly in retail and high tech,” Musser continued. “Many shippers had stockpiled inventory and pulled orders forward early in 2022, in a concerted effort to avoid the worst of the supply chain bottlenecks that materialized during the pandemic, when abrupt shutdowns and stay-at-home orders transformed how we live and do business. Those conditions, which were already starting to ease throughout the first three quarters of 2022, quickly reversed course as we entered the fourth quarter and shippers swiftly adapted to increased consumer caution and slowing demand for their products, while also battling inflation and tighter financing. We were especially impacted in North Asia, our second largest geography, as the lingering effects of the lockdowns contributed to the largest declines in our air tonnage and ocean volumes in at least a decade. “I am extremely grateful to our people, who continued to perform at their very best as they have throughout the many significant challenges we have faced over the past couple of years. We recognize that the pandemic tailwind is gone and we are now in a marketplace in which the supply chain appears to have largely normalized. Nevertheless, a level of uncertainty remains and shippers are prioritizing cost controls as they scramble to adapt to an increasingly fragile global economy. “While we remain very optimistic about the future, our short-term outlook is somewhat uncertain due to a difficult economic environment and the resetting of supply and demand, which has a direct impact on available capacity and pricing. We plan to move forward with a sharp eye on aligning expenses with revenues, particularly over the next one or two quarters. Our focus will be on maintaining our existing accounts and gaining new business, while reducing overall expenses. Just as we quickly configured our operations to accommodate unprecedented chaos and complexity during the pandemic, we now need to address our operations for a post-pandemic environment of soft demand and pressured pricing.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “This quarter was heavily impacted by a rapid reversal from the most robust operating environment we have ever seen. Economic uncertainty, government actions directed at trying to tame inflation, and severe challenges to the global supply chain gave way to sharply decelerating volumes along with a swift and simultaneous falloff in buy/sell rates. Such quickly evolving operating conditions impacted our results for the quarter, as did year-over-year comparisons to strong results in 2021. In addition, earnings before income taxes were impacted by an increase in discretionary field and branch bonuses that were awarded at year-end within our district incentive compensation program, as well as the recording of a non-income tax contingency, which on a combined basis totaled approximately $81 million. Our teams around the world worked well managing through significant challenges in 2022 always with careful attention to cash flow. Our cash flow from operations exceeded $2.1 billion in 2022 and we returned $1.8 billion to shareholders via repurchases of common stock and dividends.” Mr. Powell noted that the Company’s annual effective tax rate for 2022 was 25.9%, compared to 26.3% in 2021. The fourth quarter of 2022 effective tax rate was 33.1%, compared to 27.5% in the year-ago quarter. The increase is primarily due to a change in the amount of foreign taxes incurred net of available foreign tax credits. 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 our optimism regarding the future and our uncertain short-term outlook; a normalized supply chain; softening demand; pressure on buy and sell rates; the continued unsettled operating environment due to uncertain air and ocean capacity; an increasingly fragile global economy; 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 align expenses with revenues and to enhance our productivity; our ability to maintain our existing accounts and gain new business; 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. Fourth quarter 2022 Earnings Release, February 21, 2023 Financial Highlights for the three and twelve months ended December 31, 2022 and 2021 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2022 2021 % Change 2022 2021 % Change Revenues $ 3,441,528 $ 5,396,343 (36)% $ 17,071,284 $ 16,523,517 3% Directly related cost of transportation and other expenses 1 $ 2,425,565 $ 4,026,748 (40)% $ 12,576,897 $ 12,058,155 4% Salaries and other operating expenses 2 $ 686,257 $ 746,066 (8)% $ 2,670,016 $ 2,556,036 4% Operating income $ 329,706 $ 623,529 (47)% $ 1,824,371 $ 1,909,326 (4)% Net earnings attributable to shareholders $ 219,276 $ 452,832 (52)% $ 1,357,399 $ 1,415,492 (4)% Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 (48)% $ 8.26 $ 8.27 — Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 (48)% $ 8.33 $ 8.37 — Diluted weighted average shares outstanding 158,535 170,293 164,427 171,250 Basic weighted average shares outstanding 157,269 168,393 163,010 169,145 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. During the three and twelve months ended December 31, 2022, we repurchased 5.0 million and 14.5 million shares of common stock at an average price of $112.76 and $108.88 per share, respectively. During the three and twelve months ended December 31, 2021, we repurchased 2.3 million and 4.4 million shares of common stock at an average price of $123.71 and $117.54 per share, respectively. In addition, during 2022 and 2021, we paid cash dividends of $1.34 and $1.16 per share, respectively. Employee Full-time Equivalents as of December 31, 2022 2021 North America 7,778 7,613 Europe 4,228 3,961 North Asia 2,448 2,485 South Asia 1,851 1,783 Middle East, Africa and India 1,540 1,504 Latin America 859 833 Information Systems 1,173 994 Corporate 425 415 Total 20,302 19,588 Fourth quarter year-over-year percentage decrease in: Airfreight kilos Ocean freight FEU 2022 October (16)% (11)% November (20)% (15)% December (24)% (19)% Quarter (20)% (15)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 24, 2023 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) December 31, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,034,131 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,466 and $6,686 at December 31, 2022 and 2021, respectively 2,107,645 3,810,286 Deferred contract costs 257,545 987,266 Other 118,696 108,801 Total current assets 4,518,017 6,635,045 Property and equipment, net 501,916 487,870 Operating lease right-of-use assets 507,503 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 37,449 729 Other assets, net 17,622 19,200 Total assets $ 5,590,434 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable $ 1,108,996 $ 2,012,461 Accrued expenses, primarily salaries and related costs 479,262 403,625 Contract liabilities 323,101 1,142,026 Current portion of operating lease liabilities 95,621 82,019 Federal, state and foreign income taxes 47,075 86,166 Total current liabilities 2,054,055 3,726,297 Noncurrent portion of operating lease liabilities 422,844 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 154,313 shares and 167,210 shares at December 31, 2022 and 2021, respectively 1,543 1,672 Additional paid-in capital 139 3,160 Retained earnings 3,310,892 3,620,008 Accumulated other comprehensive loss (202,553 ) (130,414 ) Total shareholders’ equity 3,110,021 3,494,426 Noncontrolling interest 3,514 3,565 Total equity 3,113,535 3,497,991 Total liabilities and equity $ 5,590,434 $ 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 December 31, Twelve months ended December 31, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,204,810 $ 2,293,803 $ 5,886,886 $ 6,771,402 Ocean freight and ocean services 1,124,088 1,894,759 6,544,559 5,545,818 Customs brokerage and other services 1,112,630 1,207,781 4,639,839 4,206,297 Total revenues 3,441,528 5,396,343 17,071,284 16,523,517 Operating Expenses: Airfreight services 899,865 1,732,127 4,359,726 5,067,380 Ocean freight and ocean services 842,103 1,505,140 5,188,066 4,364,160 Customs brokerage and other services 683,597 789,481 3,029,105 2,626,615 Salaries and related 509,884 609,449 2,056,387 2,062,351 Rent and occupancy 54,291 48,911 209,532 186,287 Depreciation and amortization 14,922 12,897 57,338 51,312 Selling and promotion 8,119 5,547 24,293 16,026 Other 99,041 69,262 322,466 240,060 Total operating expenses 3,111,822 4,772,814 15,246,913 14,614,191 Operating income 329,706 623,529 1,824,371 1,909,326 Other Income (Expense): Interest income 13,107 2,211 25,554 8,807 Interest expense (22,245 ) (312 ) (23,277 ) (411 ) Other, net 480 413 9,243 6,894 Other income (expense), net (8,658 ) 2,312 11,520 15,290 Earnings before income taxes 321,048 625,841 1,835,891 1,924,616 Income tax expense 106,311 171,830 475,286 505,771 Net earnings 214,737 454,011 1,360,605 1,418,845 Less net (losses) earnings attributable to the noncontrolling interest (4,539 ) 1,179 3,206 3,353 Net earnings attributable to shareholders $ 219,276 $ 452,832 $ 1,357,399 $ 1,415,492 Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 $ 8.26 $ 8.27 Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 $ 8.33 $ 8.37 Weighted average diluted shares outstanding 158,535 170,293 164,427 171,250 Weighted average basic shares outstanding 157,269 168,393 163,010 169,145 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, 2022 2021 2022 2021 Operating Activities: Net earnings $ 214,737 $ 454,011 $ 1,360,605 $ 1,418,845 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,133 1,512 11,050 7,540 Deferred income tax benefit (18,312 ) (6,033 ) (33,240 ) (3,690 ) Stock compensation expense 13,101 12,087 64,397 69,385 Depreciation and amortization 14,922 12,897 57,338 51,312 Other, net 1,108 2,267 1,252 3,790 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 711,977 (491,830 ) 1,592,341 (1,869,827 ) (Decrease) increase in accounts payable and accrued expenses (454,221 ) 272,280 (798,123 ) 1,041,805 Decrease (increase) in deferred contract costs 277,805 (149,701 ) 714,960 (700,273 ) (Decrease) increase in contract liabilities (309,530 ) 168,551 (798,356 ) 803,837 Increase (decrease) in income taxes payable, net 23,439 25,845 (55,129 ) 57,867 Decrease (increase) in other, net 10,540 3,111 12,580 (12,097 ) Net cash from operating activities 486,699 304,997 2,129,675 868,494 Investing Activities: Purchase of property and equipment (18,326 ) (11,447 ) (86,824 ) (36,247 ) Other, net (245 ) (345 ) (890 ) (398 ) Net cash from investing activities (18,571 ) (11,792 ) (87,714 ) (36,645 ) Financing Activities: Payments from borrowing on lines of credit (688 ) 19 (30,289 ) (2,551 ) Proceeds from borrowing on lines of credit 25,211 (75 ) 81,756 10,063 Proceeds from issuance of common stock 7,662 6,672 80,980 106,105 Repurchases of common stock (563,802 ) (289,530 ) (1,581,908 ) (514,594 ) Dividends Paid (103,971 ) (97,379 ) (213,799 ) (195,766 ) Payments for taxes related to net share settlement of equity awards (2 ) — (19,335 ) (15,172 ) Distributions to noncontrolling interest (1,402 ) — (1,945 ) (1,631 ) Net cash from financing activities (636,992 ) (380,293 ) (1,684,540 ) (613,546 ) Effect of exchange rate changes on cash and cash equivalents 48,461 (4,326 ) (51,982 ) (17,402 ) Change in cash and cash equivalents (120,403 ) (91,414 ) 305,439 200,901 Cash and cash equivalents at beginning of period 2,154,534 1,820,106 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,034,131 $ 1,728,692 $ 2,034,131 $ 1,728,692 Taxes Paid: Income taxes $ 100,822 $ 147,396 $ 566,533 $ 442,549 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, 2022: Revenues $ 1,118,262 127,442 65,821 969,266 367,679 599,947 194,342 (1,231 ) 3,441,528 Directly related cost of transportation and other expenses1 $ 639,804 80,052 41,480 799,583 288,014 432,835 144,377 (580 ) 2,425,565 Salaries and other operating expenses2 $ (18,767 ) 101,864 29,523 178,038 117,024 239,627 39,588 (640 ) 686,257 Operating income (loss) $ 497,225 (54,474 ) (5,182 ) (8,355 ) (37,359 ) (72,515 ) 10,377 (11 ) 329,706 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 11,262 282 232 1,098 391 4,525 536 — 18,326 Depreciation and amortization $ 9,433 454 280 1,069 472 2,527 687 — 14,922 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 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 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, 2022: Revenues $ 4,869,364 517,662 257,721 5,810,088 2,144,034 2,471,456 1,005,489 (4,530 ) 17,071,284 Directly related cost of transportation and other expenses1 $ 2,943,232 310,206 160,273 4,853,902 1,751,187 1,768,102 791,887 (1,892 ) 12,576,897 Salaries and other operating expenses2 $ 944,050 188,192 72,177 504,805 238,658 573,598 151,069 (2,533 ) 2,670,016 Operating income $ 982,082 19,264 25,271 451,381 154,189 129,756 62,533 (105 ) 1,824,371 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 56,411 2,954 937 2,976 1,543 17,868 4,135 — 86,824 Depreciation and amortization $ 35,461 1,892 1,123 4,682 1,966 9,640 2,574 — 57,338 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 For the twelve months ended December 31, 2021: Revenues $ 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 $ 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 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. In 2022, certain intercompany fees were billed to our subsidiaries in the 4th quarter covering the entirety of 2022. This resulted in fourth quarter operating losses or reduced operating income for some of our business segments when compared to the prior year as in 2021 these amounts were billed monthly. View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005285/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 2022 EPS of $1.38 By: Expeditors International of Washington, Inc. via Business Wire February 21, 2023 at 08:30 AM EST Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 48% to $1.38 Net Earnings Attributable to Shareholders decreased 52% to $219 million Operating Income decreased 47% to $330 million Revenues decreased 36% to $3.4 billion Airfreight tonnage volume decreased 20% and ocean container volume decreased 15% “As pandemic-related bottlenecks eased and air and ocean supply/demand imbalances began to dissipate in the first half of the year, average buy and sell rates progressively declined to varying degrees, as they typically do – until they suddenly began to plummet simultaneously and faster than we would have expected in the fourth quarter,” said Jeffrey S. Musser, President and Chief Executive Officer. “The rapid turnaround in Q4 was stunning and unparalleled.” “Fourth quarter demand also was softer than we would have expected, particularly in retail and high tech,” Musser continued. “Many shippers had stockpiled inventory and pulled orders forward early in 2022, in a concerted effort to avoid the worst of the supply chain bottlenecks that materialized during the pandemic, when abrupt shutdowns and stay-at-home orders transformed how we live and do business. Those conditions, which were already starting to ease throughout the first three quarters of 2022, quickly reversed course as we entered the fourth quarter and shippers swiftly adapted to increased consumer caution and slowing demand for their products, while also battling inflation and tighter financing. We were especially impacted in North Asia, our second largest geography, as the lingering effects of the lockdowns contributed to the largest declines in our air tonnage and ocean volumes in at least a decade. “I am extremely grateful to our people, who continued to perform at their very best as they have throughout the many significant challenges we have faced over the past couple of years. We recognize that the pandemic tailwind is gone and we are now in a marketplace in which the supply chain appears to have largely normalized. Nevertheless, a level of uncertainty remains and shippers are prioritizing cost controls as they scramble to adapt to an increasingly fragile global economy. “While we remain very optimistic about the future, our short-term outlook is somewhat uncertain due to a difficult economic environment and the resetting of supply and demand, which has a direct impact on available capacity and pricing. We plan to move forward with a sharp eye on aligning expenses with revenues, particularly over the next one or two quarters. Our focus will be on maintaining our existing accounts and gaining new business, while reducing overall expenses. Just as we quickly configured our operations to accommodate unprecedented chaos and complexity during the pandemic, we now need to address our operations for a post-pandemic environment of soft demand and pressured pricing.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “This quarter was heavily impacted by a rapid reversal from the most robust operating environment we have ever seen. Economic uncertainty, government actions directed at trying to tame inflation, and severe challenges to the global supply chain gave way to sharply decelerating volumes along with a swift and simultaneous falloff in buy/sell rates. Such quickly evolving operating conditions impacted our results for the quarter, as did year-over-year comparisons to strong results in 2021. In addition, earnings before income taxes were impacted by an increase in discretionary field and branch bonuses that were awarded at year-end within our district incentive compensation program, as well as the recording of a non-income tax contingency, which on a combined basis totaled approximately $81 million. Our teams around the world worked well managing through significant challenges in 2022 always with careful attention to cash flow. Our cash flow from operations exceeded $2.1 billion in 2022 and we returned $1.8 billion to shareholders via repurchases of common stock and dividends.” Mr. Powell noted that the Company’s annual effective tax rate for 2022 was 25.9%, compared to 26.3% in 2021. The fourth quarter of 2022 effective tax rate was 33.1%, compared to 27.5% in the year-ago quarter. The increase is primarily due to a change in the amount of foreign taxes incurred net of available foreign tax credits. 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 our optimism regarding the future and our uncertain short-term outlook; a normalized supply chain; softening demand; pressure on buy and sell rates; the continued unsettled operating environment due to uncertain air and ocean capacity; an increasingly fragile global economy; 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 align expenses with revenues and to enhance our productivity; our ability to maintain our existing accounts and gain new business; 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. Fourth quarter 2022 Earnings Release, February 21, 2023 Financial Highlights for the three and twelve months ended December 31, 2022 and 2021 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2022 2021 % Change 2022 2021 % Change Revenues $ 3,441,528 $ 5,396,343 (36)% $ 17,071,284 $ 16,523,517 3% Directly related cost of transportation and other expenses 1 $ 2,425,565 $ 4,026,748 (40)% $ 12,576,897 $ 12,058,155 4% Salaries and other operating expenses 2 $ 686,257 $ 746,066 (8)% $ 2,670,016 $ 2,556,036 4% Operating income $ 329,706 $ 623,529 (47)% $ 1,824,371 $ 1,909,326 (4)% Net earnings attributable to shareholders $ 219,276 $ 452,832 (52)% $ 1,357,399 $ 1,415,492 (4)% Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 (48)% $ 8.26 $ 8.27 — Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 (48)% $ 8.33 $ 8.37 — Diluted weighted average shares outstanding 158,535 170,293 164,427 171,250 Basic weighted average shares outstanding 157,269 168,393 163,010 169,145 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. During the three and twelve months ended December 31, 2022, we repurchased 5.0 million and 14.5 million shares of common stock at an average price of $112.76 and $108.88 per share, respectively. During the three and twelve months ended December 31, 2021, we repurchased 2.3 million and 4.4 million shares of common stock at an average price of $123.71 and $117.54 per share, respectively. In addition, during 2022 and 2021, we paid cash dividends of $1.34 and $1.16 per share, respectively. Employee Full-time Equivalents as of December 31, 2022 2021 North America 7,778 7,613 Europe 4,228 3,961 North Asia 2,448 2,485 South Asia 1,851 1,783 Middle East, Africa and India 1,540 1,504 Latin America 859 833 Information Systems 1,173 994 Corporate 425 415 Total 20,302 19,588 Fourth quarter year-over-year percentage decrease in: Airfreight kilos Ocean freight FEU 2022 October (16)% (11)% November (20)% (15)% December (24)% (19)% Quarter (20)% (15)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 24, 2023 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) December 31, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,034,131 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,466 and $6,686 at December 31, 2022 and 2021, respectively 2,107,645 3,810,286 Deferred contract costs 257,545 987,266 Other 118,696 108,801 Total current assets 4,518,017 6,635,045 Property and equipment, net 501,916 487,870 Operating lease right-of-use assets 507,503 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 37,449 729 Other assets, net 17,622 19,200 Total assets $ 5,590,434 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable $ 1,108,996 $ 2,012,461 Accrued expenses, primarily salaries and related costs 479,262 403,625 Contract liabilities 323,101 1,142,026 Current portion of operating lease liabilities 95,621 82,019 Federal, state and foreign income taxes 47,075 86,166 Total current liabilities 2,054,055 3,726,297 Noncurrent portion of operating lease liabilities 422,844 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 154,313 shares and 167,210 shares at December 31, 2022 and 2021, respectively 1,543 1,672 Additional paid-in capital 139 3,160 Retained earnings 3,310,892 3,620,008 Accumulated other comprehensive loss (202,553 ) (130,414 ) Total shareholders’ equity 3,110,021 3,494,426 Noncontrolling interest 3,514 3,565 Total equity 3,113,535 3,497,991 Total liabilities and equity $ 5,590,434 $ 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 December 31, Twelve months ended December 31, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,204,810 $ 2,293,803 $ 5,886,886 $ 6,771,402 Ocean freight and ocean services 1,124,088 1,894,759 6,544,559 5,545,818 Customs brokerage and other services 1,112,630 1,207,781 4,639,839 4,206,297 Total revenues 3,441,528 5,396,343 17,071,284 16,523,517 Operating Expenses: Airfreight services 899,865 1,732,127 4,359,726 5,067,380 Ocean freight and ocean services 842,103 1,505,140 5,188,066 4,364,160 Customs brokerage and other services 683,597 789,481 3,029,105 2,626,615 Salaries and related 509,884 609,449 2,056,387 2,062,351 Rent and occupancy 54,291 48,911 209,532 186,287 Depreciation and amortization 14,922 12,897 57,338 51,312 Selling and promotion 8,119 5,547 24,293 16,026 Other 99,041 69,262 322,466 240,060 Total operating expenses 3,111,822 4,772,814 15,246,913 14,614,191 Operating income 329,706 623,529 1,824,371 1,909,326 Other Income (Expense): Interest income 13,107 2,211 25,554 8,807 Interest expense (22,245 ) (312 ) (23,277 ) (411 ) Other, net 480 413 9,243 6,894 Other income (expense), net (8,658 ) 2,312 11,520 15,290 Earnings before income taxes 321,048 625,841 1,835,891 1,924,616 Income tax expense 106,311 171,830 475,286 505,771 Net earnings 214,737 454,011 1,360,605 1,418,845 Less net (losses) earnings attributable to the noncontrolling interest (4,539 ) 1,179 3,206 3,353 Net earnings attributable to shareholders $ 219,276 $ 452,832 $ 1,357,399 $ 1,415,492 Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 $ 8.26 $ 8.27 Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 $ 8.33 $ 8.37 Weighted average diluted shares outstanding 158,535 170,293 164,427 171,250 Weighted average basic shares outstanding 157,269 168,393 163,010 169,145 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, 2022 2021 2022 2021 Operating Activities: Net earnings $ 214,737 $ 454,011 $ 1,360,605 $ 1,418,845 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,133 1,512 11,050 7,540 Deferred income tax benefit (18,312 ) (6,033 ) (33,240 ) (3,690 ) Stock compensation expense 13,101 12,087 64,397 69,385 Depreciation and amortization 14,922 12,897 57,338 51,312 Other, net 1,108 2,267 1,252 3,790 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 711,977 (491,830 ) 1,592,341 (1,869,827 ) (Decrease) increase in accounts payable and accrued expenses (454,221 ) 272,280 (798,123 ) 1,041,805 Decrease (increase) in deferred contract costs 277,805 (149,701 ) 714,960 (700,273 ) (Decrease) increase in contract liabilities (309,530 ) 168,551 (798,356 ) 803,837 Increase (decrease) in income taxes payable, net 23,439 25,845 (55,129 ) 57,867 Decrease (increase) in other, net 10,540 3,111 12,580 (12,097 ) Net cash from operating activities 486,699 304,997 2,129,675 868,494 Investing Activities: Purchase of property and equipment (18,326 ) (11,447 ) (86,824 ) (36,247 ) Other, net (245 ) (345 ) (890 ) (398 ) Net cash from investing activities (18,571 ) (11,792 ) (87,714 ) (36,645 ) Financing Activities: Payments from borrowing on lines of credit (688 ) 19 (30,289 ) (2,551 ) Proceeds from borrowing on lines of credit 25,211 (75 ) 81,756 10,063 Proceeds from issuance of common stock 7,662 6,672 80,980 106,105 Repurchases of common stock (563,802 ) (289,530 ) (1,581,908 ) (514,594 ) Dividends Paid (103,971 ) (97,379 ) (213,799 ) (195,766 ) Payments for taxes related to net share settlement of equity awards (2 ) — (19,335 ) (15,172 ) Distributions to noncontrolling interest (1,402 ) — (1,945 ) (1,631 ) Net cash from financing activities (636,992 ) (380,293 ) (1,684,540 ) (613,546 ) Effect of exchange rate changes on cash and cash equivalents 48,461 (4,326 ) (51,982 ) (17,402 ) Change in cash and cash equivalents (120,403 ) (91,414 ) 305,439 200,901 Cash and cash equivalents at beginning of period 2,154,534 1,820,106 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,034,131 $ 1,728,692 $ 2,034,131 $ 1,728,692 Taxes Paid: Income taxes $ 100,822 $ 147,396 $ 566,533 $ 442,549 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, 2022: Revenues $ 1,118,262 127,442 65,821 969,266 367,679 599,947 194,342 (1,231 ) 3,441,528 Directly related cost of transportation and other expenses1 $ 639,804 80,052 41,480 799,583 288,014 432,835 144,377 (580 ) 2,425,565 Salaries and other operating expenses2 $ (18,767 ) 101,864 29,523 178,038 117,024 239,627 39,588 (640 ) 686,257 Operating income (loss) $ 497,225 (54,474 ) (5,182 ) (8,355 ) (37,359 ) (72,515 ) 10,377 (11 ) 329,706 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 11,262 282 232 1,098 391 4,525 536 — 18,326 Depreciation and amortization $ 9,433 454 280 1,069 472 2,527 687 — 14,922 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 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 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, 2022: Revenues $ 4,869,364 517,662 257,721 5,810,088 2,144,034 2,471,456 1,005,489 (4,530 ) 17,071,284 Directly related cost of transportation and other expenses1 $ 2,943,232 310,206 160,273 4,853,902 1,751,187 1,768,102 791,887 (1,892 ) 12,576,897 Salaries and other operating expenses2 $ 944,050 188,192 72,177 504,805 238,658 573,598 151,069 (2,533 ) 2,670,016 Operating income $ 982,082 19,264 25,271 451,381 154,189 129,756 62,533 (105 ) 1,824,371 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 56,411 2,954 937 2,976 1,543 17,868 4,135 — 86,824 Depreciation and amortization $ 35,461 1,892 1,123 4,682 1,966 9,640 2,574 — 57,338 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 For the twelve months ended December 31, 2021: Revenues $ 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 $ 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 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. In 2022, certain intercompany fees were billed to our subsidiaries in the 4th quarter covering the entirety of 2022. This resulted in fourth quarter operating losses or reduced operating income for some of our business segments when compared to the prior year as in 2021 these amounts were billed monthly. View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005285/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 2022 financial results including the following highlights compared to the same quarter of 2021: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 48% to $1.38 Net Earnings Attributable to Shareholders decreased 52% to $219 million Operating Income decreased 47% to $330 million Revenues decreased 36% to $3.4 billion Airfreight tonnage volume decreased 20% and ocean container volume decreased 15% “As pandemic-related bottlenecks eased and air and ocean supply/demand imbalances began to dissipate in the first half of the year, average buy and sell rates progressively declined to varying degrees, as they typically do – until they suddenly began to plummet simultaneously and faster than we would have expected in the fourth quarter,” said Jeffrey S. Musser, President and Chief Executive Officer. “The rapid turnaround in Q4 was stunning and unparalleled.” “Fourth quarter demand also was softer than we would have expected, particularly in retail and high tech,” Musser continued. “Many shippers had stockpiled inventory and pulled orders forward early in 2022, in a concerted effort to avoid the worst of the supply chain bottlenecks that materialized during the pandemic, when abrupt shutdowns and stay-at-home orders transformed how we live and do business. Those conditions, which were already starting to ease throughout the first three quarters of 2022, quickly reversed course as we entered the fourth quarter and shippers swiftly adapted to increased consumer caution and slowing demand for their products, while also battling inflation and tighter financing. We were especially impacted in North Asia, our second largest geography, as the lingering effects of the lockdowns contributed to the largest declines in our air tonnage and ocean volumes in at least a decade. “I am extremely grateful to our people, who continued to perform at their very best as they have throughout the many significant challenges we have faced over the past couple of years. We recognize that the pandemic tailwind is gone and we are now in a marketplace in which the supply chain appears to have largely normalized. Nevertheless, a level of uncertainty remains and shippers are prioritizing cost controls as they scramble to adapt to an increasingly fragile global economy. “While we remain very optimistic about the future, our short-term outlook is somewhat uncertain due to a difficult economic environment and the resetting of supply and demand, which has a direct impact on available capacity and pricing. We plan to move forward with a sharp eye on aligning expenses with revenues, particularly over the next one or two quarters. Our focus will be on maintaining our existing accounts and gaining new business, while reducing overall expenses. Just as we quickly configured our operations to accommodate unprecedented chaos and complexity during the pandemic, we now need to address our operations for a post-pandemic environment of soft demand and pressured pricing.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “This quarter was heavily impacted by a rapid reversal from the most robust operating environment we have ever seen. Economic uncertainty, government actions directed at trying to tame inflation, and severe challenges to the global supply chain gave way to sharply decelerating volumes along with a swift and simultaneous falloff in buy/sell rates. Such quickly evolving operating conditions impacted our results for the quarter, as did year-over-year comparisons to strong results in 2021. In addition, earnings before income taxes were impacted by an increase in discretionary field and branch bonuses that were awarded at year-end within our district incentive compensation program, as well as the recording of a non-income tax contingency, which on a combined basis totaled approximately $81 million. Our teams around the world worked well managing through significant challenges in 2022 always with careful attention to cash flow. Our cash flow from operations exceeded $2.1 billion in 2022 and we returned $1.8 billion to shareholders via repurchases of common stock and dividends.” Mr. Powell noted that the Company’s annual effective tax rate for 2022 was 25.9%, compared to 26.3% in 2021. The fourth quarter of 2022 effective tax rate was 33.1%, compared to 27.5% in the year-ago quarter. The increase is primarily due to a change in the amount of foreign taxes incurred net of available foreign tax credits. 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 our optimism regarding the future and our uncertain short-term outlook; a normalized supply chain; softening demand; pressure on buy and sell rates; the continued unsettled operating environment due to uncertain air and ocean capacity; an increasingly fragile global economy; 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 align expenses with revenues and to enhance our productivity; our ability to maintain our existing accounts and gain new business; 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. Fourth quarter 2022 Earnings Release, February 21, 2023 Financial Highlights for the three and twelve months ended December 31, 2022 and 2021 (Unaudited) (in 000's of US dollars except share data) Three months ended December 31, Twelve months ended December 31, 2022 2021 % Change 2022 2021 % Change Revenues $ 3,441,528 $ 5,396,343 (36)% $ 17,071,284 $ 16,523,517 3% Directly related cost of transportation and other expenses 1 $ 2,425,565 $ 4,026,748 (40)% $ 12,576,897 $ 12,058,155 4% Salaries and other operating expenses 2 $ 686,257 $ 746,066 (8)% $ 2,670,016 $ 2,556,036 4% Operating income $ 329,706 $ 623,529 (47)% $ 1,824,371 $ 1,909,326 (4)% Net earnings attributable to shareholders $ 219,276 $ 452,832 (52)% $ 1,357,399 $ 1,415,492 (4)% Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 (48)% $ 8.26 $ 8.27 — Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 (48)% $ 8.33 $ 8.37 — Diluted weighted average shares outstanding 158,535 170,293 164,427 171,250 Basic weighted average shares outstanding 157,269 168,393 163,010 169,145 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. During the three and twelve months ended December 31, 2022, we repurchased 5.0 million and 14.5 million shares of common stock at an average price of $112.76 and $108.88 per share, respectively. During the three and twelve months ended December 31, 2021, we repurchased 2.3 million and 4.4 million shares of common stock at an average price of $123.71 and $117.54 per share, respectively. In addition, during 2022 and 2021, we paid cash dividends of $1.34 and $1.16 per share, respectively. Employee Full-time Equivalents as of December 31, 2022 2021 North America 7,778 7,613 Europe 4,228 3,961 North Asia 2,448 2,485 South Asia 1,851 1,783 Middle East, Africa and India 1,540 1,504 Latin America 859 833 Information Systems 1,173 994 Corporate 425 415 Total 20,302 19,588 Fourth quarter year-over-year percentage decrease in: Airfreight kilos Ocean freight FEU 2022 October (16)% (11)% November (20)% (15)% December (24)% (19)% Quarter (20)% (15)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 24, 2023 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) December 31, 2022 December 31, 2021 Assets: Current Assets: Cash and cash equivalents $ 2,034,131 $ 1,728,692 Accounts receivable, less allowance for credit loss of $9,466 and $6,686 at December 31, 2022 and 2021, respectively 2,107,645 3,810,286 Deferred contract costs 257,545 987,266 Other 118,696 108,801 Total current assets 4,518,017 6,635,045 Property and equipment, net 501,916 487,870 Operating lease right-of-use assets 507,503 459,158 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 37,449 729 Other assets, net 17,622 19,200 Total assets $ 5,590,434 $ 7,609,929 Liabilities: Current Liabilities: Accounts payable $ 1,108,996 $ 2,012,461 Accrued expenses, primarily salaries and related costs 479,262 403,625 Contract liabilities 323,101 1,142,026 Current portion of operating lease liabilities 95,621 82,019 Federal, state and foreign income taxes 47,075 86,166 Total current liabilities 2,054,055 3,726,297 Noncurrent portion of operating lease liabilities 422,844 385,641 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 154,313 shares and 167,210 shares at December 31, 2022 and 2021, respectively 1,543 1,672 Additional paid-in capital 139 3,160 Retained earnings 3,310,892 3,620,008 Accumulated other comprehensive loss (202,553 ) (130,414 ) Total shareholders’ equity 3,110,021 3,494,426 Noncontrolling interest 3,514 3,565 Total equity 3,113,535 3,497,991 Total liabilities and equity $ 5,590,434 $ 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 December 31, Twelve months ended December 31, 2022 2021 2022 2021 Revenues: Airfreight services $ 1,204,810 $ 2,293,803 $ 5,886,886 $ 6,771,402 Ocean freight and ocean services 1,124,088 1,894,759 6,544,559 5,545,818 Customs brokerage and other services 1,112,630 1,207,781 4,639,839 4,206,297 Total revenues 3,441,528 5,396,343 17,071,284 16,523,517 Operating Expenses: Airfreight services 899,865 1,732,127 4,359,726 5,067,380 Ocean freight and ocean services 842,103 1,505,140 5,188,066 4,364,160 Customs brokerage and other services 683,597 789,481 3,029,105 2,626,615 Salaries and related 509,884 609,449 2,056,387 2,062,351 Rent and occupancy 54,291 48,911 209,532 186,287 Depreciation and amortization 14,922 12,897 57,338 51,312 Selling and promotion 8,119 5,547 24,293 16,026 Other 99,041 69,262 322,466 240,060 Total operating expenses 3,111,822 4,772,814 15,246,913 14,614,191 Operating income 329,706 623,529 1,824,371 1,909,326 Other Income (Expense): Interest income 13,107 2,211 25,554 8,807 Interest expense (22,245 ) (312 ) (23,277 ) (411 ) Other, net 480 413 9,243 6,894 Other income (expense), net (8,658 ) 2,312 11,520 15,290 Earnings before income taxes 321,048 625,841 1,835,891 1,924,616 Income tax expense 106,311 171,830 475,286 505,771 Net earnings 214,737 454,011 1,360,605 1,418,845 Less net (losses) earnings attributable to the noncontrolling interest (4,539 ) 1,179 3,206 3,353 Net earnings attributable to shareholders $ 219,276 $ 452,832 $ 1,357,399 $ 1,415,492 Diluted earnings attributable to shareholders per share $ 1.38 $ 2.66 $ 8.26 $ 8.27 Basic earnings attributable to shareholders per share $ 1.39 $ 2.69 $ 8.33 $ 8.37 Weighted average diluted shares outstanding 158,535 170,293 164,427 171,250 Weighted average basic shares outstanding 157,269 168,393 163,010 169,145 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, 2022 2021 2022 2021 Operating Activities: Net earnings $ 214,737 $ 454,011 $ 1,360,605 $ 1,418,845 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 1,133 1,512 11,050 7,540 Deferred income tax benefit (18,312 ) (6,033 ) (33,240 ) (3,690 ) Stock compensation expense 13,101 12,087 64,397 69,385 Depreciation and amortization 14,922 12,897 57,338 51,312 Other, net 1,108 2,267 1,252 3,790 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 711,977 (491,830 ) 1,592,341 (1,869,827 ) (Decrease) increase in accounts payable and accrued expenses (454,221 ) 272,280 (798,123 ) 1,041,805 Decrease (increase) in deferred contract costs 277,805 (149,701 ) 714,960 (700,273 ) (Decrease) increase in contract liabilities (309,530 ) 168,551 (798,356 ) 803,837 Increase (decrease) in income taxes payable, net 23,439 25,845 (55,129 ) 57,867 Decrease (increase) in other, net 10,540 3,111 12,580 (12,097 ) Net cash from operating activities 486,699 304,997 2,129,675 868,494 Investing Activities: Purchase of property and equipment (18,326 ) (11,447 ) (86,824 ) (36,247 ) Other, net (245 ) (345 ) (890 ) (398 ) Net cash from investing activities (18,571 ) (11,792 ) (87,714 ) (36,645 ) Financing Activities: Payments from borrowing on lines of credit (688 ) 19 (30,289 ) (2,551 ) Proceeds from borrowing on lines of credit 25,211 (75 ) 81,756 10,063 Proceeds from issuance of common stock 7,662 6,672 80,980 106,105 Repurchases of common stock (563,802 ) (289,530 ) (1,581,908 ) (514,594 ) Dividends Paid (103,971 ) (97,379 ) (213,799 ) (195,766 ) Payments for taxes related to net share settlement of equity awards (2 ) — (19,335 ) (15,172 ) Distributions to noncontrolling interest (1,402 ) — (1,945 ) (1,631 ) Net cash from financing activities (636,992 ) (380,293 ) (1,684,540 ) (613,546 ) Effect of exchange rate changes on cash and cash equivalents 48,461 (4,326 ) (51,982 ) (17,402 ) Change in cash and cash equivalents (120,403 ) (91,414 ) 305,439 200,901 Cash and cash equivalents at beginning of period 2,154,534 1,820,106 1,728,692 1,527,791 Cash and cash equivalents at end of period $ 2,034,131 $ 1,728,692 $ 2,034,131 $ 1,728,692 Taxes Paid: Income taxes $ 100,822 $ 147,396 $ 566,533 $ 442,549 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, 2022: Revenues $ 1,118,262 127,442 65,821 969,266 367,679 599,947 194,342 (1,231 ) 3,441,528 Directly related cost of transportation and other expenses1 $ 639,804 80,052 41,480 799,583 288,014 432,835 144,377 (580 ) 2,425,565 Salaries and other operating expenses2 $ (18,767 ) 101,864 29,523 178,038 117,024 239,627 39,588 (640 ) 686,257 Operating income (loss) $ 497,225 (54,474 ) (5,182 ) (8,355 ) (37,359 ) (72,515 ) 10,377 (11 ) 329,706 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 11,262 282 232 1,098 391 4,525 536 — 18,326 Depreciation and amortization $ 9,433 454 280 1,069 472 2,527 687 — 14,922 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 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 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, 2022: Revenues $ 4,869,364 517,662 257,721 5,810,088 2,144,034 2,471,456 1,005,489 (4,530 ) 17,071,284 Directly related cost of transportation and other expenses1 $ 2,943,232 310,206 160,273 4,853,902 1,751,187 1,768,102 791,887 (1,892 ) 12,576,897 Salaries and other operating expenses2 $ 944,050 188,192 72,177 504,805 238,658 573,598 151,069 (2,533 ) 2,670,016 Operating income $ 982,082 19,264 25,271 451,381 154,189 129,756 62,533 (105 ) 1,824,371 Identifiable assets at period end $ 3,070,697 209,516 123,003 675,022 316,777 938,660 283,872 (27,113 ) 5,590,434 Capital expenditures $ 56,411 2,954 937 2,976 1,543 17,868 4,135 — 86,824 Depreciation and amortization $ 35,461 1,892 1,123 4,682 1,966 9,640 2,574 — 57,338 Equity $ 2,246,417 31,132 56,416 274,703 136,944 263,278 145,269 (40,624 ) 3,113,535 For the twelve months ended December 31, 2021: Revenues $ 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 $ 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 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. In 2022, certain intercompany fees were billed to our subsidiaries in the 4th quarter covering the entirety of 2022. This resulted in fourth quarter operating losses or reduced operating income for some of our business segments when compared to the prior year as in 2021 these amounts were billed monthly. View source version on businesswire.com: https://www.businesswire.com/news/home/20230220005285/en/
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