Expeditors International Of Washington Inc 10-Q for FY2022 Q2

Expeditors International Of Washington Inc (EXPD)

10-Q 2022-08-04 For: 2022-06-30

Added on April 08, 2026

About this 10-Q

Expeditors International Of Washington Inc filed this 10-Q on August 4, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.6B; up 27.5% from $3.61B a year earlier
Net income: $377.81M; up 19.4% from net income of $316.37M a year earlier
Diluted EPS: $2.27; up 23.4% from $1.84 a year earlier

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Washington		91-1069248
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

1015 Third Avenue, Seattle, Washington		98104
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		EXPD		NASDAQ Global Select Market

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	June 30, 2022			December 31, 2021
Assets:
Current Assets:
Cash and cash equivalents	$	1,976,971		$	1,728,692
Accounts receivable, less allowance for credit loss of $7,636 at June 30, 2022 and $6,686 at December 31, 2021		3,469,833			3,810,286
Deferred contract costs		745,577			987,266
Other		137,768			108,801
Total current assets		6,330,149			6,635,045
Property and equipment, less accumulated depreciation and amortization of $554,252 at June 30, 2022 and $541,677 at December 31, 2021		495,328			487,870
Operating lease right-of-use assets		491,630			459,158
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		19,413			729
Other assets, net		16,695			19,200
Total assets	$	7,361,142		$	7,609,929
Liabilities:
Current Liabilities:
Accounts payable		1,914,979			2,012,461
Accrued liabilities, primarily salaries and related costs		473,644			403,625
Contract liabilities		867,467			1,142,026
Current portion of operating lease liabilities		88,112			82,019
Federal, state and foreign income taxes		66,864			86,166
Total current liabilities		3,411,066			3,726,297
Noncurrent portion of operating lease liabilities		414,813			385,641
Commitments and contingencies		—			—
Shareholders’ Equity:
Preferred stock, none issued		—			—
Common stock, par value $0.01 per share. Issued and outstanding: 162,931 shares at June 30, 2022 and 167,210 shares at December 31, 2021		1,629			1,672
Additional paid-in capital		137			3,160
Retained earnings		3,717,316			3,620,008
Accumulated other comprehensive loss		(193,834	)		(130,414	)
Total shareholders’ equity		3,525,248			3,494,426
Noncontrolling interest		10,015			3,565
Total equity		3,535,263			3,497,991
Total liabilities and equity	$	7,361,142		$	7,609,929

	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Revenues:
Airfreight services	$	1,602,566	$	1,523,569	$	3,201,121	$	2,849,484
Ocean freight and ocean services		1,759,646		1,098,550		3,735,892		2,052,462
Customs brokerage and other services		1,241,100		986,974		2,330,597		1,905,967
Total revenues		4,603,312		3,609,093		9,267,610		6,807,913
Operating Expenses:
Airfreight services		1,212,503		1,136,328		2,355,049		2,090,872
Ocean freight and ocean services		1,402,365		862,251		3,002,608		1,604,686
Customs brokerage and other services		826,080		600,054		1,599,402		1,150,359
Salaries and related		508,222		481,186		1,047,162		933,291
Rent and occupancy		51,598		45,366		102,526		90,646
Depreciation and amortization		14,254		12,675		27,229		25,662
Selling and promotion		5,887		3,172		9,935		6,242
Other		76,421		57,416		155,957		109,995
Total operating expenses		4,097,330		3,198,448		8,299,868		6,011,753
Operating income		505,982		410,645		967,742		796,160
Other Income (Expense):
Interest income		2,720		2,188		4,612		4,134
Other, net		106		2,649		7,633		5,649
Other income, net		2,826		4,837		12,245		9,783
Earnings before income taxes		508,808		415,482		979,987		805,943
Income tax expense		126,582		98,508		248,281		201,019
Net earnings		382,226		316,974		731,706		604,924
Less net earnings attributable to the noncontrolling interest		4,421		602		7,792		1,332
Net earnings attributable to shareholders	$	377,805	$	316,372	$	723,914	$	603,592
Diluted earnings attributable to shareholders per share	$	2.27	$	1.84	$	4.31	$	3.52
Basic earnings attributable to shareholders per share	$	2.29	$	1.87	$	4.35	$	3.57
Weighted average diluted shares outstanding		166,474		171,677		167,980		171,660
Weighted average basic shares outstanding		165,092		169,210		166,423		169,140


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Common Stock
For the three months ended June 30, 2022 and 2021	Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at March 31, 2022		167,477		$	1,675		$	13,343		$	3,965,803		$	(137,429	)	$	3,843,392		$	5,939		$	3,849,331
Shares issued under employee stock plans, net of tax withholding for net settlement		454			4			(6,173	)		—			—			(6,169	)		—			(6,169	)
Shares repurchased under provisions of stock repurchase plan		(5,000	)		(50	)		(33,401	)		(515,614	)		—			(549,065	)		—			(549,065	)
Stock compensation expense		—			—			25,518			—			—			25,518			—			25,518
Net earnings		—			—			—			377,805			—			377,805			4,421			382,226
Other comprehensive income (loss)		—			—			—			—			(56,405	)		(56,405	)		(345	)		(56,750	)
Dividends and dividend equivalents paid		—			—			850			(110,678	)		—			(109,828	)		—			(109,828	)
Balance at June 30, 2022		162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263

Balance at March 31, 2021		168,808		$	1,688		$	101,269		$	2,887,323		$	(115,486	)	$	2,874,794		$	3,856		$	2,878,650
Shares issued under employee stock plans, net of tax withholding for net settlement		861			9			8,809			—			—			8,818			—			8,818
Shares repurchased under provisions of stock repurchase plan		(500	)		(5	)		(62,467	)		—			—			(62,472	)		—			(62,472	)
Stock compensation expense		—			—			30,909			—			—			30,909			—			30,909
Net earnings		—			—			—			316,372			—			316,372			602			316,974
Other comprehensive income (loss)		—			—			—			—			9,420			9,420			(261	)		9,159
Dividends and dividend equivalents paid		—			—			837			(99,224	)		—			(98,387	)		—			(98,387	)
Balance at June 30, 2021		169,169		$	1,692		$	79,357		$	3,104,471		$	(106,066	)	$	3,079,454		$	4,197		$	3,083,651

	Common Stock
For the six months ended June 30, 2022 and 2021	Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at December 31, 2021		167,210		$	1,672		$	3,160		$	3,620,008		$	(130,414	)	$	3,494,426		$	3,565		$	3,497,991
Shares issued under employee stock plans, net of tax withholding for net settlement		721			7			(7,907	)		—			—			(7,900	)		—			(7,900	)
Shares repurchased under provisions of stock repurchase plans		(5,000	)		(50	)		(33,401	)		(515,614	)		—			(549,065	)		—			(549,065	)
Stock compensation expense		—			—			37,121			—			—			37,121			—			37,121
Net earnings		—			—			—			723,914			—			723,914			7,792			731,706
Other comprehensive income (loss)		—			—			—			—			(63,420	)		(63,420	)		(1,342	)		(64,762	)
Dividends and dividend equivalents paid		—			—			1,164			(110,992	)		—			(109,828	)		—			(109,828	)
Balance at June 30, 2022		162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263

Balance at December 31, 2020		169,294		$	1,693		$	157,496		$	2,600,201		$	(99,753	)	$	2,659,637		$	3,590		$	2,663,227
Shares issued under employee stock plans, net of tax withholding for net settlement		1,300			13			27,287			—			—			27,300			—			27,300
Shares repurchased under provisions of stock repurchase plans		(1,425	)		(14	)		(148,455	)		—			—			(148,469	)		—			(148,469	)
Stock compensation expense		—			—			42,094			—			—			42,094			—			42,094
Net earnings		—			—			—			603,592			—			603,592			1,332			604,924
Other comprehensive income (loss)		—			—			—			—			(6,313	)		(6,313	)		(725	)		(7,038	)
Dividends and dividend equivalents paid		—			—			935			(99,322	)		—			(98,387	)		—			(98,387	)
Balance at June 30, 2021		169,169		$	1,692		$	79,357		$	3,104,471		$	(106,066	)	$	3,079,454		$	4,197		$	3,083,651

	Three months ended June 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2022
Basic earnings attributable to shareholders	$	377,805		165,092	$	2.29
Effect of dilutive potential common shares		—		1,382		—
Diluted earnings attributable to shareholders	$	377,805		166,474	$	2.27
2021
Basic earnings attributable to shareholders	$	316,372		169,210	$	1.87
Effect of dilutive potential common shares		—		2,467		—
Diluted earnings attributable to shareholders	$	316,372		171,677	$	1.84



	Six months ended June 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2022
Basic earnings attributable to shareholders	$	723,914	$	166,423	$	4.35
Effect of dilutive potential common shares	$	—	$	1,557		—
Diluted earnings attributable to shareholders	$	723,914		167,980	$	4.31
2021
Basic earnings attributable to shareholders	$	603,592	$	169,140	$	3.57
Effect of dilutive potential common shares	$	—	$	2,520		—
Diluted earnings attributable to shareholders	$	603,592		171,660	$	3.52

	June 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	1,246,933	$	1,246,933	$	1,241,565	$	1,241,565
Corporate commercial paper		695,194		695,423		423,261		423,279
Time deposits		34,844		34,844		63,866		63,866
Total cash and cash equivalents	$	1,976,971	$	1,977,200	$	1,728,692	$	1,728,710

	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, 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
For the three months ended June 30, 2021:
Revenues	$	997,567		101,465		46,981		1,309,382		417,718		544,949		192,186		(1,155	)		3,609,093
Directly related cost of transportation and other expenses¹	$	566,882		59,311		25,952		1,086,641		335,219		376,856		148,290		(518	)		2,598,633
Salaries and other operating expenses²	$	241,121		31,300		14,735		106,812		49,046		123,408		34,026		(633	)		599,815
Operating income	$	189,564		10,854		6,294		115,929		33,453		44,685		9,870		(4	)		410,645
Identifiable assets at period end	$	2,972,363		196,558		102,296		1,114,475		377,370		929,706		291,406		(31,003	)		5,953,171
Capital expenditures	$	2,905		64		72		400		532		2,100		466		—			6,539
Equity	$	2,163,114		80,802		36,316		318,111		146,583		255,006		128,148		(44,429	)		3,083,651



	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, 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
For the six months ended June 30, 2021:
Revenues	$	1,872,957		195,582		91,845		2,518,430		767,484		1,011,282		352,692		(2,359	)		6,807,913
Directly related cost of transportation and other expenses¹	$	1,069,517		112,361		52,652		2,054,170		605,163		683,765		269,399		(1,110	)		4,845,917
Salaries and other operating expenses²	$	479,819		57,037		27,112		213,732		92,211		232,863		64,301		(1,239	)		1,165,836
Operating income	$	323,621		26,184		12,081		250,528		70,110		94,654		18,992		(10	)		796,160
Identifiable assets at period end	$	2,972,363		196,558		102,296		1,114,475		377,370		929,706		291,406		(31,003	)		5,953,171
Capital expenditures	$	5,930		186		125		757		1,111		5,654		1,167		—			14,930
Equity	$	2,163,114		80,802		36,316		318,111		146,583		255,006		128,148		(44,429	)		3,083,651

	Three months ended June 30,					Six months ended June 30,
(in thousands)	2022		2021		Percentage change	2022		2021		Percentage change
Airfreight services:
Revenues	$	1,602,566	$	1,523,569	5%	$	3,201,121	$	2,849,484	12%
Expenses		1,212,503		1,136,328	7		2,355,049		2,090,872	13
Ocean freight services and ocean services:
Revenues		1,759,646		1,098,550	60		3,735,892		2,052,462	82
Expenses		1,402,365		862,251	63		3,002,608		1,604,686	87
Customs brokerage and other services:
Revenues		1,241,100		986,974	26		2,330,597		1,905,967	22
Expenses		826,080		600,054	38		1,599,402		1,150,359	39
Overhead expenses:
Salaries and related costs		508,222		481,186	6		1,047,162		933,291	12
Other		148,160		118,629	25		295,647		232,545	27
Total overhead expenses		656,382		599,815	9		1,342,809		1,165,836	15
Operating income		505,982		410,645	23		967,742		796,160	22
Other income, net		2,826		4,837	(42)		12,245		9,783	25
Earnings before income taxes		508,808		415,482	22		979,987		805,943	22
Income tax expense		126,582		98,508	28		248,281		201,019	24
Net earnings		382,226		316,974	21		731,706		604,924	21
Less net earnings attributable to the noncontrolling interest		4,421		602	634		7,792		1,332	485
Net earnings attributable to shareholders	$	377,805	$	316,372	19%	$	723,914	$	603,592	20%

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans		Maximum number of shares that may yet be purchased under the plans
April 1-30, 2022		-		-		-		7,557
May 1-31, 2022		4,000	$	110.24		4,000		13,923
June 1-30, 2022		1,000		108.10		1,000		12,931
Total		5,000	$	109.81		5,000		12,931

Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

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104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, has been formatted in Inline XBRL.

		EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

August 4, 2022		/s/ JEFFREY S. MUSSER
		Jeffrey S. Musser, President, Chief Executive Officer and Director

August 4, 2022		/s/ BRADLEY S. POWELL
		Bradley S. Powell, Senior Vice President and Chief Financial Officer

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Operating Activities:
Net earnings	$	382,226		$	316,974		$	731,706		$	604,924
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		4,763			1,090			4,347			2,289
Deferred income tax (benefit) expense		(8,622	)		1,850			(11,858	)		10,001
Stock compensation expense		25,518			30,909			37,121			42,094
Depreciation and amortization		14,254			12,675			27,229			25,662
Other, net		(1,746	)		346			(1,291	)		897
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		378,291			(410,783	)		245,943			(663,697	)
(Decrease) increase in accounts payable and accrued expenses		(133,171	)		99,944			7,020			333,182
Decrease (increase) in deferred contract costs		37,138			(150,382	)		211,068			(221,640	)
(Decrease) increase in contract liabilities		(45,574	)		174,504			(238,931	)		254,094
Decrease in income taxes payable, net		(93,430	)		(47,994	)		(47,171	)		(1,356	)
(Increase) decrease in other, net		(1,001	)		1,164			7,409			(324	)
Net cash from operating activities		558,646			30,297			972,592			386,126
Investing Activities:
Purchase of property and equipment		(38,158	)		(6,539	)		(52,570	)		(14,930	)
Other, net		(134	)		138			(55	)		104
Net cash from investing activities		(38,292	)		(6,401	)		(52,625	)		(14,826	)
Financing Activities:
Proceeds from borrowing on lines of credit, net		28,571			174			48,061			89
Proceeds from issuance of common stock		5,682			22,711			11,433			42,468
Repurchases of common stock		(549,065	)		(62,472	)		(549,065	)		(148,469	)
Dividends paid		(109,828	)		(98,387	)		(109,828	)		(98,387	)
Payments for taxes related to net share settlement of equity awards		(11,851	)		(13,893	)		(19,333	)		(15,168	)
Net cash from financing activities		(636,491	)		(151,867	)		(618,732	)		(219,467	)
Effect of exchange rate changes on cash and cash equivalents		(46,518	)		8,699			(52,956	)		(5,503	)
Change in cash and cash equivalents		(162,655	)		(119,272	)		248,279			146,330
Cash and cash equivalents at beginning of period		2,139,626			1,793,393			1,728,692			1,527,791
Cash and cash equivalents at end of period	$	1,976,971		$	1,674,121		$	1,976,971		$	1,674,121
Taxes Paid:
Income taxes	$	236,791		$	143,959		$	314,751		$	190,536