Expeditors International Of Washington Inc 10-Q for FY2022 Q3

Expeditors International Of Washington Inc (EXPD)

10-Q 2022-11-08 For: 2022-09-30

Added on April 08, 2026

About this 10-Q

Expeditors International Of Washington Inc filed this 10-Q on November 8, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

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

Revenue: $4.36B; up 1.0% from $4.32B a year earlier
Net income: $414.21M; up 15.4% from net income of $359.07M a year earlier
Diluted EPS: $2.54; up 21.5% from $2.09 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	☐

	September 30, 2022			December 31, 2021
Assets:
Current Assets:
Cash and cash equivalents	$	2,154,534		$	1,728,692
Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021		2,748,322			3,810,286
Deferred contract costs		499,935			987,266
Other		184,765			108,801
Total current assets		5,587,556			6,635,045
Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021		480,941			487,870
Operating lease right-of-use assets		486,980			459,158
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		27,295			729
Other assets, net		16,827			19,200
Total assets	$	6,607,526		$	7,609,929
Liabilities:
Current Liabilities:
Accounts payable		1,544,757			2,012,461
Accrued liabilities, primarily salaries and related costs		404,207			403,625
Contract liabilities		594,244			1,142,026
Current portion of operating lease liabilities		88,535			82,019
Federal, state and foreign income taxes		74,507			86,166
Total current liabilities		2,706,250			3,726,297
Noncurrent portion of operating lease liabilities		409,883			385,641
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued		—			—
Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021		1,591			1,672
Additional paid-in capital		118			3,160
Retained earnings		3,738,600			3,620,008
Accumulated other comprehensive loss		(258,129	)		(130,414	)
Total shareholders’ equity		3,482,180			3,494,426
Noncontrolling interest		9,213			3,565
Total equity		3,491,393			3,497,991
Total liabilities and equity	$	6,607,526		$	7,609,929

	Three months ended September 30,					Nine months ended September 30,
	2022			2021		2022		2021
Revenues:
Airfreight services	$	1,480,955		$	1,628,115	$	4,682,076	$	4,477,599
Ocean freight and ocean services		1,684,579			1,598,597		5,420,471		3,651,059
Customs brokerage and other services		1,196,612			1,092,549		3,527,209		2,998,516
Total revenues		4,362,146			4,319,261		13,629,756		11,127,174
Operating Expenses:
Airfreight services		1,104,812			1,244,381		3,459,861		3,335,253
Ocean freight and ocean services		1,343,355			1,254,334		4,345,963		2,859,020
Customs brokerage and other services		746,106			686,775		2,345,508		1,837,134
Salaries and related		499,341			519,611		1,546,503		1,452,902
Rent and occupancy		52,715			46,730		155,241		137,376
Depreciation and amortization		15,187			12,753		42,416		38,415
Selling and promotion		6,239			4,237		16,174		10,479
Other		67,468			60,803		223,425		170,798
Total operating expenses		3,835,223			3,829,624		12,135,091		9,841,377
Operating income		526,923			489,637		1,494,665		1,285,797
Other Income (Expense):
Interest income		7,835			2,462		12,447		6,596
Other, net		98			733		7,731		6,382
Other income, net		7,933			3,195		20,178		12,978
Earnings before income taxes		534,856			492,832		1,514,843		1,298,775
Income tax expense		120,694			132,922		368,975		333,941
Net earnings		414,162			359,910		1,145,868		964,834
Less net (losses) earnings attributable to the noncontrolling interest		(47	)		842		7,745		2,174
Net earnings attributable to shareholders	$	414,209		$	359,068	$	1,138,123	$	962,660
Diluted earnings attributable to shareholders per share	$	2.54		$	2.09	$	6.84	$	5.61
Basic earnings attributable to shareholders per share	$	2.56		$	2.12	$	6.90	$	5.68
Weighted average diluted shares outstanding		163,250			171,565		166,398		171,549
Weighted average basic shares outstanding		162,029			169,633		164,944		169,398


☒	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 September 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 June 30, 2022		162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263
Shares issued under employee stock plans, net of tax withholding for net settlement		726			7			61,877			—			—			61,884			—			61,884
Shares repurchased under provisions of stock repurchase plan		(4,529	)		(45	)		(76,071	)		(392,925	)		—			(469,041	)		—			(469,041	)
Stock compensation expense		—			—			14,175			—			—			14,175			—			14,175
Net earnings		—			—			—			414,209			—			414,209			(47	)		414,162
Other comprehensive loss		—			—			—			—			(64,295	)		(64,295	)		(212	)		(64,507	)
Dividends and dividend equivalents paid		—			—			—			—			—			—			—			—
Distribution to noncontrolling interest		—			—			—			—			—			—			(543	)		(543	)
Balance at September 30, 2022		159,128		$	1,591		$	118		$	3,738,600		$	(258,129	)	$	3,482,180		$	9,213		$	3,491,393

Balance at June 30, 2021		169,169		$	1,692		$	79,357		$	3,104,471		$	(106,066	)	$	3,079,454		$	4,197		$	3,083,651
Shares issued under employee stock plans, net of tax withholding for net settlement		836			8			56,953			—			—			56,961			—			56,961
Shares repurchased under provisions of stock repurchase plan		(613	)		(6	)		(76,589	)		—			—			(76,595	)		—			(76,595	)
Stock compensation expense		—			—			15,204			—			—			15,204			—			15,204
Net earnings		—			—			—			359,068			—			359,068			842			359,910
Other comprehensive loss		—			—			—			—			(16,734	)		(16,734	)		(174	)		(16,908	)
Dividends and dividend equivalents paid		—			—			—			—			—			—			—			—
Distributions to noncontrolling interest		—			—			—			—			—			—			(1,631	)		(1,631	)
Balance at September 30, 2021		169,392		$	1,694		$	74,925		$	3,463,539		$	(122,800	)	$	3,417,358		$	3,234		$	3,420,592

	Common Stock
For the nine months ended September 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		1,447			14			53,970			—			—			53,984			—			53,984
Shares repurchased under provisions of stock repurchase plans		(9,529	)		(95	)		(109,472	)		(908,539	)		—			(1,018,106	)		—			(1,018,106	)
Stock compensation expense		—			—			51,296			—			—			51,296			—			51,296
Net earnings		—			—			—			1,138,123			—			1,138,123			7,745			1,145,868
Other comprehensive loss		—			—			—			—			(127,715	)		(127,715	)		(1,554	)		(129,269	)
Dividends and dividend equivalents paid		—			—			1,164			(110,992	)		—			(109,828	)		—			(109,828	)
Distribution to noncontrolling interest		—			—			—			—			—			—			(543	)		(543	)
Balance at September 30, 2022		159,128		$	1,591		$	118		$	3,738,600		$	(258,129	)	$	3,482,180		$	9,213		$	3,491,393

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		2,136			21			84,240			—			—			84,261			—			84,261
Shares repurchased under provisions of stock repurchase plans		(2,038	)		(20	)		(225,044	)		—			—			(225,064	)		—			(225,064	)
Stock compensation expense		—			—			57,298			—			—			57,298			—			57,298
Net earnings		—			—			—			962,660			—			962,660			2,174			964,834
Other comprehensive loss		—			—			—			—			(23,047	)		(23,047	)		(899	)		(23,946	)
Dividends and dividend equivalents paid		—			—			935			(99,322	)		—			(98,387	)		—			(98,387	)
Distributions to noncontrolling interest		—			—			—			—			—			—			(1,631	)		(1,631	)
Balance at September 30, 2021		169,392		$	1,694		$	74,925		$	3,463,539		$	(122,800	)	$	3,417,358		$	3,234		$	3,420,592

	Three months ended September 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2022
Basic earnings attributable to shareholders	$	414,209		162,029	$	2.56
Effect of dilutive potential common shares		—		1,221		—
Diluted earnings attributable to shareholders	$	414,209		163,250	$	2.54
2021
Basic earnings attributable to shareholders	$	359,068		169,633	$	2.12
Effect of dilutive potential common shares		—		1,932		—
Diluted earnings attributable to shareholders	$	359,068		171,565	$	2.09



	Nine months ended September 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2022
Basic earnings attributable to shareholders	$	1,138,123	$	164,944	$	6.90
Effect of dilutive potential common shares	$	—	$	1,454		—
Diluted earnings attributable to shareholders	$	1,138,123		166,398	$	6.84
2021
Basic earnings attributable to shareholders	$	962,660	$	169,398	$	5.68
Effect of dilutive potential common shares	$	—	$	2,151		—
Diluted earnings attributable to shareholders	$	962,660		171,549	$	5.61

	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	1,169,248	$	1,169,248	$	1,241,565	$	1,241,565
Corporate commercial paper		952,613		953,391		423,261		423,279
Time deposits		32,673		32,673		63,866		63,866
Total cash and cash equivalents	$	2,154,534	$	2,155,312	$	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 September 30, 2022:
Revenues	$	1,244,515		140,622		68,057		1,489,331		518,780		637,411		264,518		(1,088	)		4,362,146
Directly related cost of transportation and other expenses¹	$	742,826		80,116		41,638		1,250,872		416,817		453,248		209,248		(492	)		3,194,273
Salaries and other operating expenses²	$	314,442		30,151		15,057		98,758		37,577		109,308		36,181		(524	)		640,950
Operating income	$	187,247		30,355		11,362		139,701		64,386		74,855		19,089		(72	)		526,923
Identifiable assets at period end	$	3,553,279		272,527		137,472		915,895		421,148		1,020,756		322,160		(35,711	)		6,607,526
Capital expenditures	$	9,278		556		419		581		426		3,619		1,049		—			15,928
Equity	$	2,430,632		129,346		59,494		304,496		180,855		289,595		140,147		(43,172	)		3,491,393
For the three months ended September 30, 2021:
Revenues	$	1,134,096		116,404		54,303		1,690,381		538,780		564,810		221,777		(1,290	)		4,319,261
Directly related cost of transportation and other expenses¹	$	661,515		63,031		34,216		1,417,283		445,970		389,208		174,733		(466	)		3,185,490
Salaries and other operating expenses²	$	238,943		33,077		14,759		141,109		54,003		126,475		36,598		(830	)		644,134
Operating income	$	233,638		20,296		5,328		131,989		38,807		49,127		10,446		6			489,637
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383
Capital expenditures	$	6,001		248		175		435		351		2,254		406		—			9,870
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592



	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the nine months ended September 30, 2022:
Revenues	$	3,751,102		390,220		191,900		4,840,822		1,776,355		1,871,509		811,147		(3,299	)		13,629,756
Directly related cost of transportation and other expenses¹	$	2,303,428		230,154		118,793		4,054,319		1,463,173		1,335,267		647,510		(1,312	)		10,151,332
Salaries and other operating expenses²	$	962,817		86,328		42,654		326,767		121,634		333,971		111,481		(1,893	)		1,983,759
Operating income	$	484,857		73,738		30,453		459,736		191,548		202,271		52,156		(94	)		1,494,665
Identifiable assets at period end	$	3,553,279		272,527		137,472		915,895		421,148		1,020,756		322,160		(35,711	)		6,607,526
Capital expenditures	$	45,149		2,672		705		1,878		1,152		13,343		3,599		—			68,498
Equity	$	2,430,632		129,346		59,494		304,496		180,855		289,595		140,147		(43,172	)		3,491,393
For the nine months ended September 30, 2021:
Revenues	$	3,007,053		311,986		146,148		4,208,811		1,306,264		1,576,092		574,469		(3,649	)		11,127,174
Directly related cost of transportation and other expenses¹	$	1,731,032		175,392		86,868		3,471,453		1,051,133		1,072,973		444,132		(1,576	)		8,031,407
Salaries and other operating expenses²	$	718,762		90,114		41,871		354,841		146,214		359,338		100,899		(2,069	)		1,809,970
Operating income	$	557,259		46,480		17,409		382,517		108,917		143,781		29,438		(4	)		1,285,797
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383
Capital expenditures	$	11,931		434		300		1,192		1,462		7,908		1,573		—			24,800
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2022			2021		Percentage change	2022		2021		Percentage change
Airfreight services:
Revenues	$	1,480,955		$	1,628,115	(9)%	$	4,682,076	$	4,477,599	5%
Expenses		1,104,812			1,244,381	(11)		3,459,861		3,335,253	4
Ocean freight services and ocean services:
Revenues		1,684,579			1,598,597	5		5,420,471		3,651,059	48
Expenses		1,343,355			1,254,334	7		4,345,963		2,859,020	52
Customs brokerage and other services:
Revenues		1,196,612			1,092,549	10		3,527,209		2,998,516	18
Expenses		746,106			686,775	9		2,345,508		1,837,134	28
Overhead expenses:
Salaries and related costs		499,341			519,611	(4)		1,546,503		1,452,902	6
Other		141,609			124,523	14		437,256		357,068	22
Total overhead expenses		640,950			644,134	—		1,983,759		1,809,970	10
Operating income		526,923			489,637	8		1,494,665		1,285,797	16
Other income, net		7,933			3,195	148		20,178		12,978	55
Earnings before income taxes		534,856			492,832	9		1,514,843		1,298,775	17
Income tax expense		120,694			132,922	(9)		368,975		333,941	10
Net earnings		414,162			359,910	15		1,145,868		964,834	19
Less net (losses) earnings attributable to the noncontrolling interest		(47	)		842	(106)		7,745		2,174	256
Net earnings attributable to shareholders	$	414,209		$	359,068	15%	$	1,138,123	$	962,660	18%

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
July 1-31, 2022		-		-		-		13,595
August 1-31, 2022		2,158		105.03		2,158		11,484
September 1-30, 2022		2,371		102.23		2,371		9,128
Total		4,529	$	103.56		4,529		9,128

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

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

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101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

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

		EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

November 8, 2022		/s/ JEFFREY S. MUSSER
		Jeffrey S. Musser, President, Chief Executive Officer and Director

November 8, 2022		/s/ BRADLEY S. POWELL
		Bradley S. Powell, Senior Vice President and Chief Financial Officer

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Operating Activities:
Net earnings	$	414,162		$	359,910		$	1,145,868		$	964,834
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		5,570			3,739			9,917			6,028
Deferred income tax (benefit) expense		(3,070	)		(7,658	)		(14,928	)		2,343
Stock compensation expense		14,175			15,204			51,296			57,298
Depreciation and amortization		15,187			12,753			42,416			38,415
Other, net		1,435			626			144			1,523
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		634,421			(714,300	)		880,364			(1,377,997	)
(Decrease) increase in accounts payable and accrued expenses		(350,922	)		436,343			(343,902	)		769,525
Decrease (increase) in deferred contract costs		226,087			(328,932	)		437,155			(550,572	)
(Decrease) increase in contract liabilities		(249,895	)		381,192			(488,826	)		635,286
(Decrease) increase in income taxes payable, net		(31,397	)		33,378			(78,568	)		32,022
(Increase) decrease in other, net		(5,369	)		(14,884	)		2,040			(15,208	)
Net cash from operating activities		670,384			177,371			1,642,976			563,497
Investing Activities:
Purchase of property and equipment		(15,928	)		(9,870	)		(68,498	)		(24,800	)
Other, net		(590	)		(157	)		(645	)		(53	)
Net cash from investing activities		(16,518	)		(10,027	)		(69,143	)		(24,853	)
Financing Activities:
Payments from borrowing on lines of credit		(21,117	)		(1,045	)		(29,601	)		(2,570	)
Proceeds from borrowing on lines of credit		—			8,524			56,545			10,138
Proceeds from issuance of common stock		61,885			56,965			73,318			99,433
Repurchases of common stock		(469,041	)		(76,595	)		(1,018,106	)		(225,064	)
Dividends paid		—			—			(109,828	)		(98,387	)
Payments for taxes related to net share settlement of equity awards		—			(4	)		(19,333	)		(15,172	)
Distribution to noncontrolling interest		(543	)		(1,631	)		(543	)		(1,631	)
Net cash from financing activities		(428,816	)		(13,786	)		(1,047,548	)		(233,253	)
Effect of exchange rate changes on cash and cash equivalents		(47,487	)		(7,573	)		(100,443	)		(13,076	)
Change in cash and cash equivalents		177,563			145,985			425,842			292,315
Cash and cash equivalents at beginning of period		1,976,971			1,674,121			1,728,692			1,527,791
Cash and cash equivalents at end of period	$	2,154,534		$	1,820,106		$	2,154,534		$	1,820,106
Taxes Paid:
Income taxes	$	150,960		$	104,617		$	465,711		$	295,153