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 Second Quarter 2023 EPS of $1.30 By: Expeditors International of Washington, Inc. via Business Wire August 08, 2023 at 08:30 AM EDT Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced second quarter 2023 financial results including the following comparisons to the same quarter of 2022: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 43% to $1.30 Net Earnings Attributable to Shareholders decreased 48% to $197 million Operating Income decreased 51% to $248 million Revenues decreased 51% to $2.2 billion Airfreight tonnage volume decreased 15% and ocean container volume decreased 13% “The freight marketplace has continued to reset and has reverted closer to pre-pandemic levels of activity,” said Jeffrey S. Musser, President and Chief Executive Officer. “Average buy and sell rates in the second quarter are still above their pre-COVID levels but are falling, and volumes have continued to decline at the same time that air capacity has scaled up and ocean capacity is readily available. Pricing is becoming a more critical determining factor to shippers the further away we get from the severe supply chain disruptions brought on by the pandemic, which impacted revenues this quarter, primarily in our air and ocean businesses. There is now ample and, in some cases, excess capacity in both air and ocean freight, as global supply chain congestion of recent years has effectively disappeared. "With the return of passenger belly space, total air cargo capacity now exceeds pre-pandemic levels. Driven by robust passenger demand, carriers continue to bring new and idled aircraft back into service, which is coupled with persistent higher utilization of freighter capacity compared to pre-pandemic levels. Despite increased air capacity, shippers face uncertain demand for their products, as consumers remain cautious amidst declines in their purchasing power. In that regard, second-quarter operating conditions were very much a continuation of what we experienced in the immediately prior two quarters. “Ocean buy and sell rates also have continued to fall significantly for the third consecutive quarter as capacity exceeded demand despite carrier efforts to rationalize the availability of space. Our customs brokerage fees and Transcon revenue also were lower due to declines in volumes. “Looking forward, we will continue to thoughtfully manage down our headcount and exert other efforts to align our costs with these lower levels of demand. In many ways, current conditions are very much the reverse of what we experienced in the early days of the pandemic, as the current marketplace shifts to a lower gear on increased capacity and falling rates and demand. We do not see those conditions changing meaningfully before the end of the current year. Shippers are cautious, the economy remains uncertain, and carrier capacity does not adequately reflect the current levels of marketplace demand.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “It is critical that while we keep costs in check, we also prepare ourselves for the future when operating conditions eventually stabilize and demand and volumes begin to recover and grow. While focused on controlling and carefully managing our cash, we still were able to return $1 billion to shareholders in repurchased stock and dividends paid out during the first six months of the year, and more than $2.1 billion over the past 12 months. While our first priority always is to invest in the growth of our business, we will continue to focus on controlling costs, improving operational efficiencies, and returning capital to investors as we have done for more than 40 years.” 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 uncertain short-term outlook; a normalized supply chain; increased air capacity due to robust passenger demand; falling rates; declining volumes; sufficient and in some cases excess air and ocean capacity; shipper uncertainty given the current economic outlook; rising inflation and financing costs; and signs of a slowing economy and drop in demand. Future financial performance could differ materially because of factors such as: our ability to thoughtfully manage down our headcount and exert other efforts to align our costs; our ability to predict when operating conditions may eventually stabilize and demand and volumes begin to recover and grow; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; 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 normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, 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, 2022 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. Second Quarter 2023 Earnings Release, August 8, 2023 Financial Highlights for the three months ended June 30, 2023 and 2022 (Unaudited) (in 000's of US dollars except share data) Three months ended June 30, Six months ended June 30, 2023 2022 % Change 2023 2022 % Change Revenues $ 2,239,752 $ 4,603,312 (51)% $ 4,832,341 $ 9,267,610 (48)% Directly related cost of transportation and other expenses 1 $ 1,419,183 $ 3,440,948 (59)% $ 3,138,285 $ 6,957,059 (55)% Salaries and other operating expenses 2 $ 572,072 $ 656,382 (13)% $ 1,169,590 $ 1,342,809 (13)% Operating income 3 $ 248,497 $ 505,982 (51)% $ 524,466 $ 967,742 (46)% Net earnings attributable to shareholders $ 196,800 $ 377,805 (48)% $ 422,811 $ 723,914 (42)% Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 (43)% $ 2.75 $ 4.31 (36)% Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 (43)% $ 2.78 $ 4.35 (36)% Diluted weighted average shares outstanding 151,563 166,474 153,516 167,980 Basic weighted average shares outstanding 150,435 165,092 152,291 166,423 _______________________ 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. 3Operating income in the three and six months ended June 30, 2022 includes $26 million and $88 million in expenses incurred as a result of the Company's global systems downtime and investigation, recovery and remediation efforts caused by a targeted cyber-attack that occurred in the first quarter of 2022. In the three and six months ended June 30, 2023, amounts related to the cyber-attack recorded in Operating Income were insignificant. During the three and six months ended June 30, 2023, we repurchased 6.0 million and 8.0 million shares of common stock at an average price of $114.61 and $113.23 per share. During the three and six months ended June 30, 2022 we repurchased 5.0 million shares of common stock at an average price of $109.81. Employee Full-time Equivalents as of June 30, 2023 December 31, 2022 June 30, 2022 North America 7,154 7,778 7,770 Europe 3,946 4,228 4,099 North Asia 2,340 2,448 2,488 South Asia 1,731 1,851 1,821 Middle East, Africa and India 1,459 1,540 1,533 Latin America 765 859 854 Information Systems 1,242 1,173 1,093 Corporate 416 425 438 Total 19,053 20,302 20,096 Second quarter year-over-year percentage increase (decrease) in: 2023 Airfreight kilos Ocean freight FEU April (6)% (15)% May (16)% (13)% June (22)% (12)% Quarter (15)% (13)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 11, 2023 will be considered in management's 8-K “Responses to Selected Questions.” _______________________ NOTE: See Disclaimer on Forward-Looking Statements in this release. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) June 30, 2023 December 31, 2022 Assets: Current Assets: Cash and cash equivalents $ 1,698,587 $ 2,034,131 Accounts receivable, less allowance for credit loss of $5,802 at June 30, 2023 and $9,466 at December 31, 2022 1,423,622 2,107,645 Deferred contract costs 175,723 257,545 Other 184,614 118,696 Total current assets 3,482,546 4,518,017 Property and equipment, less accumulated depreciation and amortization $590,490 at June 30, 2023 and $567,758 at December 31, 2022 494,539 501,916 Operating lease right-of-use assets 514,958 507,503 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 43,550 37,449 Other assets, net 20,520 17,622 Total assets $ 4,564,040 $ 5,590,434 Liabilities: Current Liabilities: Accounts payable $ 815,514 $ 1,108,996 Accrued expenses, primarily salaries and related costs 422,134 479,262 Contract liabilities 218,561 323,101 Current portion of operating lease liabilities 99,962 95,621 Federal, state and foreign income taxes 22,936 47,075 Total current liabilities 1,579,107 2,054,055 Noncurrent portion of operating lease liabilities 426,829 422,844 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 147,222 shares at June 30, 2023 and 154,313 shares at December 31, 2022 1,472 1,543 Additional paid-in capital — 139 Retained earnings 2,752,461 3,310,892 Accumulated other comprehensive loss (198,001 ) (202,553 ) Total shareholders’ equity 2,555,932 3,110,021 Noncontrolling interest 2,172 3,514 Total equity 2,558,104 3,113,535 Total liabilities and equity $ 4,564,040 $ 5,590,434 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues: Airfreight services $ 751,171 $ 1,602,566 $ 1,656,074 $ 3,201,121 Ocean freight and ocean services 593,801 1,759,646 1,291,108 3,735,892 Customs brokerage and other services 894,780 1,241,100 1,885,159 2,330,597 Total revenues 2,239,752 4,603,312 4,832,341 9,267,610 Operating Expenses: Airfreight services 525,027 1,212,503 1,191,049 2,355,049 Ocean freight and ocean services 405,807 1,402,365 889,489 3,002,608 Customs brokerage and other services 488,349 826,080 1,057,747 1,599,402 Salaries and related 428,558 508,222 878,406 1,047,162 Rent and occupancy 58,205 51,598 115,837 102,526 Depreciation and amortization 15,506 14,254 30,767 27,229 Selling and promotion 6,314 5,887 12,698 9,935 Other 63,489 76,421 131,882 155,957 Total operating expenses 1,991,255 4,097,330 4,307,875 8,299,868 Operating income 248,497 505,982 524,466 967,742 Other Income (Expense): Interest income 17,792 2,720 36,567 4,612 Interest expense (395 ) (58 ) (3,040 ) (561 ) Other, net 289 164 8,768 8,194 Other income, net 17,686 2,826 42,295 12,245 Earnings before income taxes 266,183 508,808 566,761 979,987 Income tax expense 70,390 126,582 144,970 248,281 Net earnings 195,793 382,226 421,791 731,706 Less net (losses) earnings attributable to the noncontrolling interest (1,007 ) 4,421 (1,020 ) 7,792 Net earnings attributable to shareholders $ 196,800 $ 377,805 $ 422,811 $ 723,914 Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 $ 2.75 $ 4.31 Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 $ 2.78 $ 4.35 Weighted average diluted shares outstanding 151,563 166,474 153,516 167,980 Weighted average basic shares outstanding 150,435 165,092 152,291 166,423 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Operating Activities: Net earnings $ 195,793 $ 382,226 $ 421,791 $ 731,706 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for (recoveries) losses on accounts receivable (167 ) 4,763 905 4,347 Deferred income tax benefit (3,560 ) (8,622 ) (1,524 ) (11,858 ) Stock compensation expense 18,595 25,518 31,083 37,121 Depreciation and amortization 15,506 14,254 30,767 27,229 Other, net 2,564 (1,746 ) 3,723 (1,291 ) Changes in operating assets and liabilities: Decrease in accounts receivable 174,321 378,291 682,927 245,943 (Decrease) increase in accounts payable and accrued liabilities (149,986 ) (133,171 ) (352,909 ) 7,020 Decrease in deferred contract costs 18,166 37,138 85,787 211,068 Decrease in contract liabilities (23,803 ) (45,574 ) (108,250 ) (238,931 ) Increase in income taxes payable, net (93,817 ) (93,430 ) (93,726 ) (47,171 ) Decrease (increase) in other, net 4,834 (1,001 ) 4,284 7,409 Net cash from operating activities 158,446 558,646 704,858 972,592 Investing Activities: Purchase of property and equipment (10,481 ) (38,158 ) (20,607 ) (52,570 ) Other, net (794 ) (134 ) (219 ) (55 ) Net cash from investing activities (11,275 ) (38,292 ) (20,826 ) (52,625 ) Financing Activities: Payments on borrowings on lines of credit (5,743 ) (5,382 ) (32,145 ) (8,484 ) Proceeds from borrowings on lines of credit 7,054 33,953 18,549 56,545 Proceeds from issuance of common stock 9,176 5,682 18,464 11,433 Repurchases of common stock (687,689 ) (549,065 ) (901,191 ) (549,065 ) Dividends Paid (102,263 ) (109,828 ) (102,263 ) (109,828 ) Payments for taxes related to net share settlement of equity awards (12,056 ) (11,851 ) (19,501 ) (19,333 ) Net cash from financing activities (791,521 ) (636,491 ) (1,018,087 ) (618,732 ) Effect of exchange rate changes on cash and cash equivalents (7,857 ) (46,518 ) (1,489 ) (52,956 ) Change in cash and cash equivalents (652,207 ) (162,655 ) (335,544 ) 248,279 Cash and cash equivalents at beginning of period 2,350,794 2,139,626 2,034,131 1,728,692 Cash and cash equivalents at end of period $ 1,698,587 $ 1,976,971 $ 1,698,587 $ 1,976,971 Taxes Paid: Income taxes $ 173,670 $ 236,791 $ 244,456 $ 314,751 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 June 30, 2023: Revenues $ 805,948 110,255 49,972 510,027 199,868 440,916 123,972 (1,206 ) 2,239,752 Directly related cost of transportation and other expenses1 $ 426,121 69,108 29,428 387,973 134,477 288,808 83,890 (623 ) 1,419,182 Salaries and other operating expenses2 $ 256,277 34,793 16,265 68,290 44,048 125,196 27,820 (616 ) 572,073 Operating income (loss) $ 123,550 6,354 4,279 53,764 21,343 26,912 12,262 33 248,497 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 6,623 161 46 352 168 2,336 795 — 10,481 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the three months ended June 30, 2022: Revenues $ 1,265,363 144,988 66,136 1,582,475 611,246 658,307 275,948 (1,151 ) 4,603,312 Directly related cost of transportation and other expenses1 $ 797,179 85,806 43,298 1,323,354 507,473 464,399 220,162 (723 ) 3,440,948 Salaries and other operating expenses2 $ 314,726 31,308 14,496 104,896 38,728 115,394 37,258 (424 ) 656,382 Operating income $ 153,458 27,874 8,342 154,225 65,045 78,514 18,528 (4 ) 505,982 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 26,394 1,038 177 766 436 7,666 1,681 — 38,158 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the six months ended June 30, 2023: Revenues $ 1,751,442 220,105 104,667 1,092,448 423,995 975,380 266,675 (2,371 ) 4,832,341 Directly related cost of transportation and other expenses1 $ 966,078 138,313 61,730 840,315 292,100 661,068 179,839 (1,159 ) 3,138,284 Salaries and other operating expenses2 $ 523,960 70,617 35,767 139,430 90,846 252,568 57,652 (1,249 ) 1,169,591 Operating income $ 261,404 11,175 7,170 112,703 41,049 61,744 29,184 37 524,466 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 12,067 630 276 942 335 5,319 1,038 — 20,607 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the six months ended June 30, 2022: Revenues $ 2,506,587 249,598 123,843 3,351,491 1,257,575 1,234,098 546,629 (2,211 ) 9,267,610 Directly related cost of transportation and other expenses1 $ 1,560,602 150,038 77,155 2,803,447 1,046,356 882,019 438,262 (820 ) 6,957,059 Salaries and other operating expenses2 $ 648,375 56,177 27,597 228,009 84,057 224,663 75,300 (1,369 ) 1,342,809 Operating income $ 297,610 43,383 19,091 320,035 127,162 127,416 33,067 (22 ) 967,742 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 35,871 2,116 286 1,297 726 9,724 2,550 — 52,570 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20230807971584/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 Second Quarter 2023 EPS of $1.30 By: Expeditors International of Washington, Inc. via Business Wire August 08, 2023 at 08:30 AM EDT Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced second quarter 2023 financial results including the following comparisons to the same quarter of 2022: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 43% to $1.30 Net Earnings Attributable to Shareholders decreased 48% to $197 million Operating Income decreased 51% to $248 million Revenues decreased 51% to $2.2 billion Airfreight tonnage volume decreased 15% and ocean container volume decreased 13% “The freight marketplace has continued to reset and has reverted closer to pre-pandemic levels of activity,” said Jeffrey S. Musser, President and Chief Executive Officer. “Average buy and sell rates in the second quarter are still above their pre-COVID levels but are falling, and volumes have continued to decline at the same time that air capacity has scaled up and ocean capacity is readily available. Pricing is becoming a more critical determining factor to shippers the further away we get from the severe supply chain disruptions brought on by the pandemic, which impacted revenues this quarter, primarily in our air and ocean businesses. There is now ample and, in some cases, excess capacity in both air and ocean freight, as global supply chain congestion of recent years has effectively disappeared. "With the return of passenger belly space, total air cargo capacity now exceeds pre-pandemic levels. Driven by robust passenger demand, carriers continue to bring new and idled aircraft back into service, which is coupled with persistent higher utilization of freighter capacity compared to pre-pandemic levels. Despite increased air capacity, shippers face uncertain demand for their products, as consumers remain cautious amidst declines in their purchasing power. In that regard, second-quarter operating conditions were very much a continuation of what we experienced in the immediately prior two quarters. “Ocean buy and sell rates also have continued to fall significantly for the third consecutive quarter as capacity exceeded demand despite carrier efforts to rationalize the availability of space. Our customs brokerage fees and Transcon revenue also were lower due to declines in volumes. “Looking forward, we will continue to thoughtfully manage down our headcount and exert other efforts to align our costs with these lower levels of demand. In many ways, current conditions are very much the reverse of what we experienced in the early days of the pandemic, as the current marketplace shifts to a lower gear on increased capacity and falling rates and demand. We do not see those conditions changing meaningfully before the end of the current year. Shippers are cautious, the economy remains uncertain, and carrier capacity does not adequately reflect the current levels of marketplace demand.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “It is critical that while we keep costs in check, we also prepare ourselves for the future when operating conditions eventually stabilize and demand and volumes begin to recover and grow. While focused on controlling and carefully managing our cash, we still were able to return $1 billion to shareholders in repurchased stock and dividends paid out during the first six months of the year, and more than $2.1 billion over the past 12 months. While our first priority always is to invest in the growth of our business, we will continue to focus on controlling costs, improving operational efficiencies, and returning capital to investors as we have done for more than 40 years.” 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 uncertain short-term outlook; a normalized supply chain; increased air capacity due to robust passenger demand; falling rates; declining volumes; sufficient and in some cases excess air and ocean capacity; shipper uncertainty given the current economic outlook; rising inflation and financing costs; and signs of a slowing economy and drop in demand. Future financial performance could differ materially because of factors such as: our ability to thoughtfully manage down our headcount and exert other efforts to align our costs; our ability to predict when operating conditions may eventually stabilize and demand and volumes begin to recover and grow; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; 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 normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, 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, 2022 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. Second Quarter 2023 Earnings Release, August 8, 2023 Financial Highlights for the three months ended June 30, 2023 and 2022 (Unaudited) (in 000's of US dollars except share data) Three months ended June 30, Six months ended June 30, 2023 2022 % Change 2023 2022 % Change Revenues $ 2,239,752 $ 4,603,312 (51)% $ 4,832,341 $ 9,267,610 (48)% Directly related cost of transportation and other expenses 1 $ 1,419,183 $ 3,440,948 (59)% $ 3,138,285 $ 6,957,059 (55)% Salaries and other operating expenses 2 $ 572,072 $ 656,382 (13)% $ 1,169,590 $ 1,342,809 (13)% Operating income 3 $ 248,497 $ 505,982 (51)% $ 524,466 $ 967,742 (46)% Net earnings attributable to shareholders $ 196,800 $ 377,805 (48)% $ 422,811 $ 723,914 (42)% Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 (43)% $ 2.75 $ 4.31 (36)% Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 (43)% $ 2.78 $ 4.35 (36)% Diluted weighted average shares outstanding 151,563 166,474 153,516 167,980 Basic weighted average shares outstanding 150,435 165,092 152,291 166,423 _______________________ 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. 3Operating income in the three and six months ended June 30, 2022 includes $26 million and $88 million in expenses incurred as a result of the Company's global systems downtime and investigation, recovery and remediation efforts caused by a targeted cyber-attack that occurred in the first quarter of 2022. In the three and six months ended June 30, 2023, amounts related to the cyber-attack recorded in Operating Income were insignificant. During the three and six months ended June 30, 2023, we repurchased 6.0 million and 8.0 million shares of common stock at an average price of $114.61 and $113.23 per share. During the three and six months ended June 30, 2022 we repurchased 5.0 million shares of common stock at an average price of $109.81. Employee Full-time Equivalents as of June 30, 2023 December 31, 2022 June 30, 2022 North America 7,154 7,778 7,770 Europe 3,946 4,228 4,099 North Asia 2,340 2,448 2,488 South Asia 1,731 1,851 1,821 Middle East, Africa and India 1,459 1,540 1,533 Latin America 765 859 854 Information Systems 1,242 1,173 1,093 Corporate 416 425 438 Total 19,053 20,302 20,096 Second quarter year-over-year percentage increase (decrease) in: 2023 Airfreight kilos Ocean freight FEU April (6)% (15)% May (16)% (13)% June (22)% (12)% Quarter (15)% (13)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 11, 2023 will be considered in management's 8-K “Responses to Selected Questions.” _______________________ NOTE: See Disclaimer on Forward-Looking Statements in this release. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) June 30, 2023 December 31, 2022 Assets: Current Assets: Cash and cash equivalents $ 1,698,587 $ 2,034,131 Accounts receivable, less allowance for credit loss of $5,802 at June 30, 2023 and $9,466 at December 31, 2022 1,423,622 2,107,645 Deferred contract costs 175,723 257,545 Other 184,614 118,696 Total current assets 3,482,546 4,518,017 Property and equipment, less accumulated depreciation and amortization $590,490 at June 30, 2023 and $567,758 at December 31, 2022 494,539 501,916 Operating lease right-of-use assets 514,958 507,503 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 43,550 37,449 Other assets, net 20,520 17,622 Total assets $ 4,564,040 $ 5,590,434 Liabilities: Current Liabilities: Accounts payable $ 815,514 $ 1,108,996 Accrued expenses, primarily salaries and related costs 422,134 479,262 Contract liabilities 218,561 323,101 Current portion of operating lease liabilities 99,962 95,621 Federal, state and foreign income taxes 22,936 47,075 Total current liabilities 1,579,107 2,054,055 Noncurrent portion of operating lease liabilities 426,829 422,844 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 147,222 shares at June 30, 2023 and 154,313 shares at December 31, 2022 1,472 1,543 Additional paid-in capital — 139 Retained earnings 2,752,461 3,310,892 Accumulated other comprehensive loss (198,001 ) (202,553 ) Total shareholders’ equity 2,555,932 3,110,021 Noncontrolling interest 2,172 3,514 Total equity 2,558,104 3,113,535 Total liabilities and equity $ 4,564,040 $ 5,590,434 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues: Airfreight services $ 751,171 $ 1,602,566 $ 1,656,074 $ 3,201,121 Ocean freight and ocean services 593,801 1,759,646 1,291,108 3,735,892 Customs brokerage and other services 894,780 1,241,100 1,885,159 2,330,597 Total revenues 2,239,752 4,603,312 4,832,341 9,267,610 Operating Expenses: Airfreight services 525,027 1,212,503 1,191,049 2,355,049 Ocean freight and ocean services 405,807 1,402,365 889,489 3,002,608 Customs brokerage and other services 488,349 826,080 1,057,747 1,599,402 Salaries and related 428,558 508,222 878,406 1,047,162 Rent and occupancy 58,205 51,598 115,837 102,526 Depreciation and amortization 15,506 14,254 30,767 27,229 Selling and promotion 6,314 5,887 12,698 9,935 Other 63,489 76,421 131,882 155,957 Total operating expenses 1,991,255 4,097,330 4,307,875 8,299,868 Operating income 248,497 505,982 524,466 967,742 Other Income (Expense): Interest income 17,792 2,720 36,567 4,612 Interest expense (395 ) (58 ) (3,040 ) (561 ) Other, net 289 164 8,768 8,194 Other income, net 17,686 2,826 42,295 12,245 Earnings before income taxes 266,183 508,808 566,761 979,987 Income tax expense 70,390 126,582 144,970 248,281 Net earnings 195,793 382,226 421,791 731,706 Less net (losses) earnings attributable to the noncontrolling interest (1,007 ) 4,421 (1,020 ) 7,792 Net earnings attributable to shareholders $ 196,800 $ 377,805 $ 422,811 $ 723,914 Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 $ 2.75 $ 4.31 Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 $ 2.78 $ 4.35 Weighted average diluted shares outstanding 151,563 166,474 153,516 167,980 Weighted average basic shares outstanding 150,435 165,092 152,291 166,423 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Operating Activities: Net earnings $ 195,793 $ 382,226 $ 421,791 $ 731,706 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for (recoveries) losses on accounts receivable (167 ) 4,763 905 4,347 Deferred income tax benefit (3,560 ) (8,622 ) (1,524 ) (11,858 ) Stock compensation expense 18,595 25,518 31,083 37,121 Depreciation and amortization 15,506 14,254 30,767 27,229 Other, net 2,564 (1,746 ) 3,723 (1,291 ) Changes in operating assets and liabilities: Decrease in accounts receivable 174,321 378,291 682,927 245,943 (Decrease) increase in accounts payable and accrued liabilities (149,986 ) (133,171 ) (352,909 ) 7,020 Decrease in deferred contract costs 18,166 37,138 85,787 211,068 Decrease in contract liabilities (23,803 ) (45,574 ) (108,250 ) (238,931 ) Increase in income taxes payable, net (93,817 ) (93,430 ) (93,726 ) (47,171 ) Decrease (increase) in other, net 4,834 (1,001 ) 4,284 7,409 Net cash from operating activities 158,446 558,646 704,858 972,592 Investing Activities: Purchase of property and equipment (10,481 ) (38,158 ) (20,607 ) (52,570 ) Other, net (794 ) (134 ) (219 ) (55 ) Net cash from investing activities (11,275 ) (38,292 ) (20,826 ) (52,625 ) Financing Activities: Payments on borrowings on lines of credit (5,743 ) (5,382 ) (32,145 ) (8,484 ) Proceeds from borrowings on lines of credit 7,054 33,953 18,549 56,545 Proceeds from issuance of common stock 9,176 5,682 18,464 11,433 Repurchases of common stock (687,689 ) (549,065 ) (901,191 ) (549,065 ) Dividends Paid (102,263 ) (109,828 ) (102,263 ) (109,828 ) Payments for taxes related to net share settlement of equity awards (12,056 ) (11,851 ) (19,501 ) (19,333 ) Net cash from financing activities (791,521 ) (636,491 ) (1,018,087 ) (618,732 ) Effect of exchange rate changes on cash and cash equivalents (7,857 ) (46,518 ) (1,489 ) (52,956 ) Change in cash and cash equivalents (652,207 ) (162,655 ) (335,544 ) 248,279 Cash and cash equivalents at beginning of period 2,350,794 2,139,626 2,034,131 1,728,692 Cash and cash equivalents at end of period $ 1,698,587 $ 1,976,971 $ 1,698,587 $ 1,976,971 Taxes Paid: Income taxes $ 173,670 $ 236,791 $ 244,456 $ 314,751 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 June 30, 2023: Revenues $ 805,948 110,255 49,972 510,027 199,868 440,916 123,972 (1,206 ) 2,239,752 Directly related cost of transportation and other expenses1 $ 426,121 69,108 29,428 387,973 134,477 288,808 83,890 (623 ) 1,419,182 Salaries and other operating expenses2 $ 256,277 34,793 16,265 68,290 44,048 125,196 27,820 (616 ) 572,073 Operating income (loss) $ 123,550 6,354 4,279 53,764 21,343 26,912 12,262 33 248,497 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 6,623 161 46 352 168 2,336 795 — 10,481 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the three months ended June 30, 2022: Revenues $ 1,265,363 144,988 66,136 1,582,475 611,246 658,307 275,948 (1,151 ) 4,603,312 Directly related cost of transportation and other expenses1 $ 797,179 85,806 43,298 1,323,354 507,473 464,399 220,162 (723 ) 3,440,948 Salaries and other operating expenses2 $ 314,726 31,308 14,496 104,896 38,728 115,394 37,258 (424 ) 656,382 Operating income $ 153,458 27,874 8,342 154,225 65,045 78,514 18,528 (4 ) 505,982 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 26,394 1,038 177 766 436 7,666 1,681 — 38,158 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the six months ended June 30, 2023: Revenues $ 1,751,442 220,105 104,667 1,092,448 423,995 975,380 266,675 (2,371 ) 4,832,341 Directly related cost of transportation and other expenses1 $ 966,078 138,313 61,730 840,315 292,100 661,068 179,839 (1,159 ) 3,138,284 Salaries and other operating expenses2 $ 523,960 70,617 35,767 139,430 90,846 252,568 57,652 (1,249 ) 1,169,591 Operating income $ 261,404 11,175 7,170 112,703 41,049 61,744 29,184 37 524,466 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 12,067 630 276 942 335 5,319 1,038 — 20,607 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the six months ended June 30, 2022: Revenues $ 2,506,587 249,598 123,843 3,351,491 1,257,575 1,234,098 546,629 (2,211 ) 9,267,610 Directly related cost of transportation and other expenses1 $ 1,560,602 150,038 77,155 2,803,447 1,046,356 882,019 438,262 (820 ) 6,957,059 Salaries and other operating expenses2 $ 648,375 56,177 27,597 228,009 84,057 224,663 75,300 (1,369 ) 1,342,809 Operating income $ 297,610 43,383 19,091 320,035 127,162 127,416 33,067 (22 ) 967,742 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 35,871 2,116 286 1,297 726 9,724 2,550 — 52,570 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20230807971584/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 second quarter 2023 financial results including the following comparisons to the same quarter of 2022: Diluted Net Earnings Attributable to Shareholders per share (EPS1) decreased 43% to $1.30 Net Earnings Attributable to Shareholders decreased 48% to $197 million Operating Income decreased 51% to $248 million Revenues decreased 51% to $2.2 billion Airfreight tonnage volume decreased 15% and ocean container volume decreased 13% “The freight marketplace has continued to reset and has reverted closer to pre-pandemic levels of activity,” said Jeffrey S. Musser, President and Chief Executive Officer. “Average buy and sell rates in the second quarter are still above their pre-COVID levels but are falling, and volumes have continued to decline at the same time that air capacity has scaled up and ocean capacity is readily available. Pricing is becoming a more critical determining factor to shippers the further away we get from the severe supply chain disruptions brought on by the pandemic, which impacted revenues this quarter, primarily in our air and ocean businesses. There is now ample and, in some cases, excess capacity in both air and ocean freight, as global supply chain congestion of recent years has effectively disappeared. "With the return of passenger belly space, total air cargo capacity now exceeds pre-pandemic levels. Driven by robust passenger demand, carriers continue to bring new and idled aircraft back into service, which is coupled with persistent higher utilization of freighter capacity compared to pre-pandemic levels. Despite increased air capacity, shippers face uncertain demand for their products, as consumers remain cautious amidst declines in their purchasing power. In that regard, second-quarter operating conditions were very much a continuation of what we experienced in the immediately prior two quarters. “Ocean buy and sell rates also have continued to fall significantly for the third consecutive quarter as capacity exceeded demand despite carrier efforts to rationalize the availability of space. Our customs brokerage fees and Transcon revenue also were lower due to declines in volumes. “Looking forward, we will continue to thoughtfully manage down our headcount and exert other efforts to align our costs with these lower levels of demand. In many ways, current conditions are very much the reverse of what we experienced in the early days of the pandemic, as the current marketplace shifts to a lower gear on increased capacity and falling rates and demand. We do not see those conditions changing meaningfully before the end of the current year. Shippers are cautious, the economy remains uncertain, and carrier capacity does not adequately reflect the current levels of marketplace demand.” Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “It is critical that while we keep costs in check, we also prepare ourselves for the future when operating conditions eventually stabilize and demand and volumes begin to recover and grow. While focused on controlling and carefully managing our cash, we still were able to return $1 billion to shareholders in repurchased stock and dividends paid out during the first six months of the year, and more than $2.1 billion over the past 12 months. While our first priority always is to invest in the growth of our business, we will continue to focus on controlling costs, improving operational efficiencies, and returning capital to investors as we have done for more than 40 years.” 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 uncertain short-term outlook; a normalized supply chain; increased air capacity due to robust passenger demand; falling rates; declining volumes; sufficient and in some cases excess air and ocean capacity; shipper uncertainty given the current economic outlook; rising inflation and financing costs; and signs of a slowing economy and drop in demand. Future financial performance could differ materially because of factors such as: our ability to thoughtfully manage down our headcount and exert other efforts to align our costs; our ability to predict when operating conditions may eventually stabilize and demand and volumes begin to recover and grow; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; 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 normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, 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, 2022 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. Second Quarter 2023 Earnings Release, August 8, 2023 Financial Highlights for the three months ended June 30, 2023 and 2022 (Unaudited) (in 000's of US dollars except share data) Three months ended June 30, Six months ended June 30, 2023 2022 % Change 2023 2022 % Change Revenues $ 2,239,752 $ 4,603,312 (51)% $ 4,832,341 $ 9,267,610 (48)% Directly related cost of transportation and other expenses 1 $ 1,419,183 $ 3,440,948 (59)% $ 3,138,285 $ 6,957,059 (55)% Salaries and other operating expenses 2 $ 572,072 $ 656,382 (13)% $ 1,169,590 $ 1,342,809 (13)% Operating income 3 $ 248,497 $ 505,982 (51)% $ 524,466 $ 967,742 (46)% Net earnings attributable to shareholders $ 196,800 $ 377,805 (48)% $ 422,811 $ 723,914 (42)% Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 (43)% $ 2.75 $ 4.31 (36)% Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 (43)% $ 2.78 $ 4.35 (36)% Diluted weighted average shares outstanding 151,563 166,474 153,516 167,980 Basic weighted average shares outstanding 150,435 165,092 152,291 166,423 _______________________ 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. 3Operating income in the three and six months ended June 30, 2022 includes $26 million and $88 million in expenses incurred as a result of the Company's global systems downtime and investigation, recovery and remediation efforts caused by a targeted cyber-attack that occurred in the first quarter of 2022. In the three and six months ended June 30, 2023, amounts related to the cyber-attack recorded in Operating Income were insignificant. During the three and six months ended June 30, 2023, we repurchased 6.0 million and 8.0 million shares of common stock at an average price of $114.61 and $113.23 per share. During the three and six months ended June 30, 2022 we repurchased 5.0 million shares of common stock at an average price of $109.81. Employee Full-time Equivalents as of June 30, 2023 December 31, 2022 June 30, 2022 North America 7,154 7,778 7,770 Europe 3,946 4,228 4,099 North Asia 2,340 2,448 2,488 South Asia 1,731 1,851 1,821 Middle East, Africa and India 1,459 1,540 1,533 Latin America 765 859 854 Information Systems 1,242 1,173 1,093 Corporate 416 425 438 Total 19,053 20,302 20,096 Second quarter year-over-year percentage increase (decrease) in: 2023 Airfreight kilos Ocean freight FEU April (6)% (15)% May (16)% (13)% June (22)% (12)% Quarter (15)% (13)% Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 11, 2023 will be considered in management's 8-K “Responses to Selected Questions.” _______________________ NOTE: See Disclaimer on Forward-Looking Statements in this release. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) June 30, 2023 December 31, 2022 Assets: Current Assets: Cash and cash equivalents $ 1,698,587 $ 2,034,131 Accounts receivable, less allowance for credit loss of $5,802 at June 30, 2023 and $9,466 at December 31, 2022 1,423,622 2,107,645 Deferred contract costs 175,723 257,545 Other 184,614 118,696 Total current assets 3,482,546 4,518,017 Property and equipment, less accumulated depreciation and amortization $590,490 at June 30, 2023 and $567,758 at December 31, 2022 494,539 501,916 Operating lease right-of-use assets 514,958 507,503 Goodwill 7,927 7,927 Deferred federal and state income taxes, net 43,550 37,449 Other assets, net 20,520 17,622 Total assets $ 4,564,040 $ 5,590,434 Liabilities: Current Liabilities: Accounts payable $ 815,514 $ 1,108,996 Accrued expenses, primarily salaries and related costs 422,134 479,262 Contract liabilities 218,561 323,101 Current portion of operating lease liabilities 99,962 95,621 Federal, state and foreign income taxes 22,936 47,075 Total current liabilities 1,579,107 2,054,055 Noncurrent portion of operating lease liabilities 426,829 422,844 Commitments and contingencies Shareholders’ Equity: Preferred stock, none issued — — Common stock, par value $0.01 per share. Issued and outstanding: 147,222 shares at June 30, 2023 and 154,313 shares at December 31, 2022 1,472 1,543 Additional paid-in capital — 139 Retained earnings 2,752,461 3,310,892 Accumulated other comprehensive loss (198,001 ) (202,553 ) Total shareholders’ equity 2,555,932 3,110,021 Noncontrolling interest 2,172 3,514 Total equity 2,558,104 3,113,535 Total liabilities and equity $ 4,564,040 $ 5,590,434 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues: Airfreight services $ 751,171 $ 1,602,566 $ 1,656,074 $ 3,201,121 Ocean freight and ocean services 593,801 1,759,646 1,291,108 3,735,892 Customs brokerage and other services 894,780 1,241,100 1,885,159 2,330,597 Total revenues 2,239,752 4,603,312 4,832,341 9,267,610 Operating Expenses: Airfreight services 525,027 1,212,503 1,191,049 2,355,049 Ocean freight and ocean services 405,807 1,402,365 889,489 3,002,608 Customs brokerage and other services 488,349 826,080 1,057,747 1,599,402 Salaries and related 428,558 508,222 878,406 1,047,162 Rent and occupancy 58,205 51,598 115,837 102,526 Depreciation and amortization 15,506 14,254 30,767 27,229 Selling and promotion 6,314 5,887 12,698 9,935 Other 63,489 76,421 131,882 155,957 Total operating expenses 1,991,255 4,097,330 4,307,875 8,299,868 Operating income 248,497 505,982 524,466 967,742 Other Income (Expense): Interest income 17,792 2,720 36,567 4,612 Interest expense (395 ) (58 ) (3,040 ) (561 ) Other, net 289 164 8,768 8,194 Other income, net 17,686 2,826 42,295 12,245 Earnings before income taxes 266,183 508,808 566,761 979,987 Income tax expense 70,390 126,582 144,970 248,281 Net earnings 195,793 382,226 421,791 731,706 Less net (losses) earnings attributable to the noncontrolling interest (1,007 ) 4,421 (1,020 ) 7,792 Net earnings attributable to shareholders $ 196,800 $ 377,805 $ 422,811 $ 723,914 Diluted earnings attributable to shareholders per share $ 1.30 $ 2.27 $ 2.75 $ 4.31 Basic earnings attributable to shareholders per share $ 1.31 $ 2.29 $ 2.78 $ 4.35 Weighted average diluted shares outstanding 151,563 166,474 153,516 167,980 Weighted average basic shares outstanding 150,435 165,092 152,291 166,423 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Operating Activities: Net earnings $ 195,793 $ 382,226 $ 421,791 $ 731,706 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for (recoveries) losses on accounts receivable (167 ) 4,763 905 4,347 Deferred income tax benefit (3,560 ) (8,622 ) (1,524 ) (11,858 ) Stock compensation expense 18,595 25,518 31,083 37,121 Depreciation and amortization 15,506 14,254 30,767 27,229 Other, net 2,564 (1,746 ) 3,723 (1,291 ) Changes in operating assets and liabilities: Decrease in accounts receivable 174,321 378,291 682,927 245,943 (Decrease) increase in accounts payable and accrued liabilities (149,986 ) (133,171 ) (352,909 ) 7,020 Decrease in deferred contract costs 18,166 37,138 85,787 211,068 Decrease in contract liabilities (23,803 ) (45,574 ) (108,250 ) (238,931 ) Increase in income taxes payable, net (93,817 ) (93,430 ) (93,726 ) (47,171 ) Decrease (increase) in other, net 4,834 (1,001 ) 4,284 7,409 Net cash from operating activities 158,446 558,646 704,858 972,592 Investing Activities: Purchase of property and equipment (10,481 ) (38,158 ) (20,607 ) (52,570 ) Other, net (794 ) (134 ) (219 ) (55 ) Net cash from investing activities (11,275 ) (38,292 ) (20,826 ) (52,625 ) Financing Activities: Payments on borrowings on lines of credit (5,743 ) (5,382 ) (32,145 ) (8,484 ) Proceeds from borrowings on lines of credit 7,054 33,953 18,549 56,545 Proceeds from issuance of common stock 9,176 5,682 18,464 11,433 Repurchases of common stock (687,689 ) (549,065 ) (901,191 ) (549,065 ) Dividends Paid (102,263 ) (109,828 ) (102,263 ) (109,828 ) Payments for taxes related to net share settlement of equity awards (12,056 ) (11,851 ) (19,501 ) (19,333 ) Net cash from financing activities (791,521 ) (636,491 ) (1,018,087 ) (618,732 ) Effect of exchange rate changes on cash and cash equivalents (7,857 ) (46,518 ) (1,489 ) (52,956 ) Change in cash and cash equivalents (652,207 ) (162,655 ) (335,544 ) 248,279 Cash and cash equivalents at beginning of period 2,350,794 2,139,626 2,034,131 1,728,692 Cash and cash equivalents at end of period $ 1,698,587 $ 1,976,971 $ 1,698,587 $ 1,976,971 Taxes Paid: Income taxes $ 173,670 $ 236,791 $ 244,456 $ 314,751 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 June 30, 2023: Revenues $ 805,948 110,255 49,972 510,027 199,868 440,916 123,972 (1,206 ) 2,239,752 Directly related cost of transportation and other expenses1 $ 426,121 69,108 29,428 387,973 134,477 288,808 83,890 (623 ) 1,419,182 Salaries and other operating expenses2 $ 256,277 34,793 16,265 68,290 44,048 125,196 27,820 (616 ) 572,073 Operating income (loss) $ 123,550 6,354 4,279 53,764 21,343 26,912 12,262 33 248,497 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 6,623 161 46 352 168 2,336 795 — 10,481 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the three months ended June 30, 2022: Revenues $ 1,265,363 144,988 66,136 1,582,475 611,246 658,307 275,948 (1,151 ) 4,603,312 Directly related cost of transportation and other expenses1 $ 797,179 85,806 43,298 1,323,354 507,473 464,399 220,162 (723 ) 3,440,948 Salaries and other operating expenses2 $ 314,726 31,308 14,496 104,896 38,728 115,394 37,258 (424 ) 656,382 Operating income $ 153,458 27,874 8,342 154,225 65,045 78,514 18,528 (4 ) 505,982 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 26,394 1,038 177 766 436 7,666 1,681 — 38,158 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMI- NATIONS CONSOLI- DATED For the six months ended June 30, 2023: Revenues $ 1,751,442 220,105 104,667 1,092,448 423,995 975,380 266,675 (2,371 ) 4,832,341 Directly related cost of transportation and other expenses1 $ 966,078 138,313 61,730 840,315 292,100 661,068 179,839 (1,159 ) 3,138,284 Salaries and other operating expenses2 $ 523,960 70,617 35,767 139,430 90,846 252,568 57,652 (1,249 ) 1,169,591 Operating income $ 261,404 11,175 7,170 112,703 41,049 61,744 29,184 37 524,466 Identifiable assets at period end $ 2,553,553 192,362 115,458 495,229 213,026 748,449 258,849 (12,886 ) 4,564,040 Capital expenditures $ 12,067 630 276 942 335 5,319 1,038 — 20,607 Equity $ 1,873,220 45,252 59,289 220,638 93,476 146,174 158,133 (38,078 ) 2,558,104 For the six months ended June 30, 2022: Revenues $ 2,506,587 249,598 123,843 3,351,491 1,257,575 1,234,098 546,629 (2,211 ) 9,267,610 Directly related cost of transportation and other expenses1 $ 1,560,602 150,038 77,155 2,803,447 1,046,356 882,019 438,262 (820 ) 6,957,059 Salaries and other operating expenses2 $ 648,375 56,177 27,597 228,009 84,057 224,663 75,300 (1,369 ) 1,342,809 Operating income $ 297,610 43,383 19,091 320,035 127,162 127,416 33,067 (22 ) 967,742 Identifiable assets at period end $ 3,681,137 304,799 144,303 1,275,808 554,166 1,081,246 365,532 (45,849 ) 7,361,142 Capital expenditures $ 35,871 2,116 286 1,297 726 9,724 2,550 — 52,570 Equity $ 2,435,088 127,428 54,762 307,453 217,437 297,572 134,388 (38,865 ) 3,535,263 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. 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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