Expeditors Reports Third Quarter 2021 EPS of $2.09

Nov 02, 2021

Expeditors Reports Third Quarter 2021 EPS of $2.09

SEATTLE--(BUSINESS WIRE)-- Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2021 financial results including the following highlights compared to the same quarter of 2020:

  • Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 87% to $2.09
  • Net Earnings Attributable to Shareholders increased 88% to $359 million
  • Operating Income increased 94% to $490 million
  • Revenues increased 84% to $4.3 billion
  • Airfreight tonnage volume and ocean container volume increased 28% and 15%, respectively

“In a marketplace that remains severely impacted by labor and infrastructure constraints throughout the supply chain, our people continue to perform at their best by identifying, accessing, and securing available space,” said Jeffrey S. Musser, President and Chief Executive Officer. “There remains an overall deficiency of available air capacity due to a reduction of passenger belly space on international routes. Despite increased utilization of air charters, there is insufficient capacity to meet the current high demand. At the same time, unprecedented congestion at the ocean ports due to labor and equipment shortages is disrupting sailing schedules and causing significant delays. There is simply not enough equipment, warehouse and pier space, or people in the locations where they are needed to meaningfully reduce the significant backlogs of cargo. Handling record volumes under these conditions has not been easy, but we continue to set records for company performance by servicing our customers at the highest level.

“The entire global infrastructure for the movement of cargo remains stretched beyond its limits. While certain ocean ports are particularly constrained, most notably on the U.S. west coast, many of the current bottlenecks stem from supply and infrastructure issues that were building well before the pandemic. The global reaction to COVID-19, including lockdowns, facility closures and spikes in demand for certain products, exposed and exacerbated those long-simmering issues. Unfortunately, there is no simple or immediate fix. As a result, we believe these current conditions are likely to last well into 2022.

“We also believe, as we always have, that our company’s best strategy for achieving ongoing success in servicing our customers and growing our business depends on our strong culture of close collaboration. As many of the most restrictive pandemic precautionary measures are being lifted around the world, we are carefully bringing our people back to on-site work in a measured and cautious manner. Our view is that the stresses of so many of our people working at such an accelerated pace from so many remote, off-site locations would be unsustainable over the long term.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “Our strong results continue to demonstrate our ability to adapt and perform exceptionally well on behalf of our customers under very trying conditions. Demand continues to far outstrip available capacity. Buy and sell rates for both air and ocean remain elevated and erratic. Despite those conditions, our operating efficiency is strong, even as each individual shipment requires more resources and greater attention, and conditions change rapidly. While we are performing exceptionally well under these trying circumstances, I continue to caution that we are unable to predict how long the current conditions will persist or the impact they will have on our future operations.”

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

_______________________

1Diluted earnings attributable to shareholders per share.

NOTE: See Disclaimer on Forward-Looking Statements in this release.

Expeditors International of Washington, Inc.

Third Quarter 2021 Earnings Release, November 2, 2021

Financial Highlights for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

(in 000's of US dollars except per share data)

 

 

 

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

% Change

 

 

2021

 

 

2020

 

 

% Change

 

Revenues3

 

$

4,319,261

 

 

$

2,348,713

 

 

84%

 

 

$

11,127,174

 

 

$

6,603,558

 

 

69%

 

Directly related cost of transportation and other expenses1, 3

 

$

3,185,490

 

 

$

1,614,334

 

 

97%

 

 

$

8,031,407

 

 

$

4,504,452

 

 

78%

 

Salaries and other operating expenses2

 

$

644,134

 

 

$

482,434

 

 

34%

 

 

$

1,809,970

 

 

$

1,440,480

 

 

26%

 

Operating income

 

$

489,637

 

 

$

251,945

 

 

94%

 

 

$

1,285,797

 

 

$

658,626

 

 

95%

 

Net earnings attributable to shareholders

 

$

359,068

 

 

$

191,307

 

 

88%

 

 

$

962,660

 

 

$

497,520

 

 

93%

 

Diluted earnings attributable to shareholders per share

 

$

2.09

 

 

$

1.12

 

 

87%

 

 

$

5.61

 

 

$

2.92

 

 

92%

 

Basic earnings attributable to shareholders per share

 

$

2.12

 

 

$

1.14

 

 

86%

 

 

$

5.68

 

 

$

2.96

 

 

92%

 

Diluted weighted average shares outstanding

 

 

171,565

 

 

 

170,735

 

 

 

 

 

 

171,549

 

 

 

170,539

 

 

 

 

Basic weighted average shares outstanding

 

 

169,633

 

 

 

168,310

 

 

 

 

 

 

169,398

 

 

 

167,942

 

 

 

 

 

 

_______________________

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.

 

3Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis.

During the nine months ended September 30, 2021 and 2020, we repurchased 2.0 million and 4.4 million shares of common stock at an average price of $110.45 and $71.41 per share, respectively.

 

 

Employee Full-time Equivalents as of September 30,

 

 

2021

 

2020

North America

 

 

7,315

 

 

 

6,666

 

Europe

 

 

3,860

 

 

 

3,361

 

North Asia

 

 

2,440

 

 

 

2,406

 

South Asia

 

 

1,740

 

 

 

1,643

 

Middle East, Africa and India

 

 

1,507

 

 

 

1,509

 

Latin America

 

 

801

 

 

 

800

 

Information Systems

 

 

976

 

 

 

975

 

Corporate

 

 

395

 

 

 

383

 

Total

19,034

17,743

 

Disclaimer on Forward-Looking Statements:

NOTE: See Disclaimer on Forward-Looking Statements in this release.

 

Third quarter year-over-year

percentage increase in:

 

2021

 

Airfreight

kilos

 

 

Ocean freight

FEU

 

July

 

36%

 

 

18%

 

August

 

36%

 

 

21%

 

September

 

15%

 

 

7%

 

Quarter

 

28%

 

 

15%

 

Investors may submit written questions via e-mail to: [email protected]. Questions received by the end of business on November 5, 2021 will be considered in management's 8-K “Responses to Selected Questions.”

Disclaimer on Forward-Looking Statements:

Certain statements contained in this news release are “forward-looking statements,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance and rate volatility will continue for the remainder of 2021 and likely well into 2022, and will stabilize over time; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company’s regulatory filings with the Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

 

 

September 30,

2021

 

 

December 31,

2020

 

Assets:

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,820,106

 

 

$

1,527,791

 

Accounts receivable, less allowance for credit loss of $7,285 at September 30, 2021 and $5,579 at December 31, 2020

 

 

3,330,398

 

 

 

1,998,055

 

Deferred contract costs

 

 

841,689

 

 

 

327,448

 

Other

 

 

119,346

 

 

 

110,250

 

Total current assets

 

 

6,111,539

 

 

 

3,963,544

 

Property and equipment, less accumulated depreciation and amortization of $533,450 at September 30, 2021 and $516,988 at

December 31, 2020

 

 

491,577

 

 

 

506,425

 

Operating lease right-of-use assets

 

 

448,228

 

 

 

432,723

 

Goodwill

 

 

7,927

 

 

 

7,927

 

Other assets, net

 

 

17,112

 

 

 

16,884

 

Total assets

 

$

7,076,383

 

 

$

4,927,503

 

Liabilities:

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,806,977

 

 

$

1,136,859

 

Accrued liabilities, primarily salaries and related costs

 

 

342,151

 

 

 

257,021

 

Contract liabilities

 

 

977,660

 

 

 

379,722

 

Current portion of operating lease liabilities

 

 

81,362

 

 

 

74,004

 

Federal, state and foreign income taxes

 

 

67,332

 

 

 

45,437

 

Total current liabilities

 

 

3,275,482

 

 

 

1,893,043

 

Noncurrent portion of operating lease liabilities

 

 

374,658

 

 

 

364,185

 

Deferred federal and state income taxes, net

 

 

5,651

 

 

 

7,048

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Preferred stock, none issued

 

 

 

 

 

 

Common stock, par value $0.01 per share. Issued and outstanding: 169,392 shares at September 30, 2021 and 169,294 shares at December 31, 2020

 

 

1,694

 

 

 

1,693

 

Additional paid-in capital

 

 

74,925

 

 

 

157,496

 

Retained earnings

 

 

3,463,539

 

 

 

2,600,201

 

Accumulated other comprehensive loss

 

 

(122,800

)

 

 

(99,753

)

Total shareholders’ equity

 

 

3,417,358

 

 

 

2,659,637

 

Noncontrolling interest

 

 

3,234

 

 

 

3,590

 

Total equity

 

 

3,420,592

 

 

 

2,663,227

 

Total liabilities and equity

 

$

7,076,383

 

 

$

4,927,503

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airfreight services

 

$

1,628,115

 

 

$

983,199

 

 

$

4,477,599

 

 

$

2,908,451

 

Ocean freight and ocean services

 

 

1,598,597

 

 

 

609,816

 

 

 

3,651,059

 

 

 

1,590,541

 

Customs brokerage and other services

 

 

1,092,549

 

 

 

755,698

 

 

 

2,998,516

 

 

 

2,104,566

 

Total revenues

 

 

4,319,261

 

 

 

2,348,713

 

 

 

11,127,174

 

 

 

6,603,558

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airfreight services

 

 

1,244,381

 

 

 

723,340

 

 

 

3,335,253

 

 

 

2,122,205

 

Ocean freight and ocean services

 

 

1,254,334

 

 

 

452,028

 

 

 

2,859,020

 

 

 

1,177,696

 

Customs brokerage and other services

 

 

686,775

 

 

 

438,966

 

 

 

1,837,134

 

 

 

1,204,551

 

Salaries and related

 

 

519,611

 

 

 

373,613

 

 

 

1,452,902

 

 

 

1,110,760

 

Rent and occupancy

 

 

46,730

 

 

 

42,484

 

 

 

137,376

 

 

 

126,383

 

Depreciation and amortization

 

 

12,753

 

 

 

15,851

 

 

 

38,415

 

 

 

42,620

 

Selling and promotion

 

 

4,237

 

 

 

2,945

 

 

 

10,479

 

 

 

14,301

 

Other

 

 

60,803

 

 

 

47,541

 

 

 

170,798

 

 

 

146,416

 

Total operating expenses

 

 

3,829,624

 

 

 

2,096,768

 

 

 

9,841,377

 

 

 

5,944,932

 

Operating income

 

 

489,637

 

 

 

251,945

 

 

 

1,285,797

 

 

 

658,626

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

2,462

 

 

 

1,504

 

 

 

6,596

 

 

 

8,870

 

Other, net

 

 

733

 

 

 

980

 

 

 

6,382

 

 

 

5,161

 

Other income, net

 

 

3,195

 

 

 

2,484

 

 

 

12,978

 

 

 

14,031

 

Earnings before income taxes

 

 

492,832

 

 

 

254,429

 

 

 

1,298,775

 

 

 

672,657

 

Income tax expense

 

 

132,922

 

 

 

62,710

 

 

 

333,941

 

 

 

173,968

 

Net earnings

 

 

359,910

 

 

 

191,719

 

 

 

964,834

 

 

 

498,689

 

Less net earnings attributable to the noncontrolling interest

 

 

842

 

 

 

412

 

 

 

2,174

 

 

 

1,169

 

Net earnings attributable to shareholders

 

$

359,068

 

 

$

191,307

 

 

$

962,660

 

 

$

497,520

 

Diluted earnings attributable to shareholders per share

 

$

2.09

 

 

$

1.12

 

 

$

5.61

 

 

$

2.92

 

Basic earnings attributable to shareholders per share

 

$

2.12

 

 

$

1.14

 

 

$

5.68

 

 

$

2.96

 

Weighted average diluted shares outstanding

 

 

171,565

 

 

 

170,735

 

 

 

171,549

 

 

 

170,539

 

Weighted average basic shares outstanding

169,633

168,310

169,398

167,942

 

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

 

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

359,910

 

 

$

191,719

 

 

$

964,834

 

 

$

498,689

 

Adjustments to reconcile net earnings to net cash from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provisions for losses on accounts receivable

 

 

3,739

 

 

 

398

 

 

 

6,028

 

 

 

4,607

 

Deferred income tax (benefit) expense

 

 

(7,658

)

 

 

(1,276

)

 

 

2,343

 

 

 

2,872

 

Stock compensation expense

 

 

15,204

 

 

 

12,297

 

 

 

57,298

 

 

 

45,091

 

Depreciation and amortization

 

 

12,753

 

 

 

15,851

 

 

 

38,415

 

 

 

42,620

 

Other, net

 

 

626

 

 

 

2,919

 

 

 

1,523

 

 

 

3,470

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase in accounts receivable

 

 

(714,300

)

 

 

(106,065

)

 

 

(1,377,997

)

 

 

(274,440

)

Increase in accounts payable and accrued liabilities

 

 

436,343

 

 

 

94,232

 

 

 

769,525

 

 

 

201,929

 

Increase in deferred contract costs

 

 

(328,932

)

 

 

(81,486

)

 

 

(550,572

)

 

 

(99,887

)

Increase in contract liabilities

 

 

381,192

 

 

 

91,638

 

 

 

635,286

 

 

 

112,244

 

Increase (decrease) in income taxes payable, net

 

 

33,378

 

 

 

(41,286

)

 

 

32,022

 

 

 

(10,644

)

Increase in other, net

 

 

(14,884

)

 

 

(17,373

)

 

 

(15,208

)

 

 

(13,242

)

Net cash from operating activities

 

 

177,371

 

 

 

161,568

 

 

 

563,497

 

 

 

513,309

 

Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(9,870

)

 

 

(9,178

)

 

 

(24,800

)

 

 

(37,419

)

Other, net

 

 

(157

)

 

 

1,174

 

 

 

(53

)

 

 

963

 

Net cash from investing activities

 

 

(10,027

)

 

 

(8,004

)

 

 

(24,853

)

 

 

(36,456

)

Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from borrowing on lines of credit, net

 

 

7,479

 

 

 

31

 

 

 

7,568

 

 

 

11

 

Proceeds from issuance of common stock

 

 

56,965

 

 

 

121,430

 

 

 

99,433

 

 

 

174,016

 

Repurchases of common stock

 

 

(76,595

)

 

 

 

 

 

(225,064

)

 

 

(314,225

)

Dividends paid

 

 

 

 

 

 

 

 

(98,387

)

 

 

(86,815

)

Payments for taxes related to net share settlement of equity awards

 

 

(4

)

 

 

 

 

 

(15,172

)

 

 

(10,566

)

Distribution to noncontrolling interest

 

 

(1,631

)

 

 

 

 

 

(1,631

)

 

 

 

Net cash from financing activities

 

 

(13,786

)

 

 

121,461

 

 

 

(233,253

)

 

 

(237,579

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(7,573

)

 

 

10,030

 

 

 

(13,076

)

 

 

(4,255

)

Change in cash and cash equivalents

 

 

145,985

 

 

 

285,055

 

 

 

292,315

 

 

 

235,019

 

Cash and cash equivalents at beginning of period

 

 

1,674,121

 

 

 

1,180,455

 

 

 

1,527,791

 

 

 

1,230,491

 

Cash and cash equivalents at end of period

 

$

1,820,106

 

 

$

1,465,510

 

 

$

1,820,106

 

 

$

1,465,510

 

Taxes Paid:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

$

104,617

 

 

$

106,434

 

 

$

295,153

 

 

$

180,242

 

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 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

 

For the three months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues3

 

$

686,243

 

 

 

77,414

 

 

 

39,193

 

 

 

795,155

 

 

 

259,069

 

 

 

359,107

 

 

 

133,447

 

 

 

(915

)

 

 

2,348,713

 

Directly related cost of transportation and other expenses1,3

 

$

379,586

 

 

 

44,196

 

 

 

23,361

 

 

 

632,858

 

 

 

192,175

 

 

 

242,384

 

 

 

100,301

 

 

 

(527

)

 

 

1,614,334

 

Salaries and other operating expenses2

 

$

197,749

 

 

 

25,325

 

 

 

12,359

 

 

 

81,876

 

 

 

39,926

 

 

 

96,658

 

 

 

28,925

 

 

 

(384

)

 

 

482,434

 

Operating income

 

$

108,908

 

 

 

7,893

 

 

 

3,473

 

 

 

80,421

 

 

 

26,968

 

 

 

20,065

 

 

 

4,221

 

 

 

(4

)

 

 

251,945

 

Identifiable assets at period end

 

$

2,336,071

 

 

 

163,943

 

 

 

76,173

 

 

 

689,525

 

 

 

231,771

 

 

 

642,124

 

 

 

228,423

 

 

 

(9,476

)

 

 

4,358,554

 

Capital expenditures

 

$

4,703

 

 

 

483

 

 

 

180

 

 

 

1,075

 

 

 

665

 

 

 

1,780

 

 

 

292

 

 

 

 

 

 

9,178

 

Equity

 

$

1,791,658

 

 

 

77,915

 

 

 

31,324

 

 

 

246,557

 

 

 

97,564

 

 

 

185,352

 

 

 

110,714

 

 

 

(36,611

)

 

 

2,504,473

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues3

 

$

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 expenses1,3

 

$

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

 

For the nine months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues3

 

$

1,975,874

 

 

 

232,324

 

 

 

114,637

 

 

 

2,277,027

 

 

 

642,302

 

 

 

1,024,127

 

 

 

340,000

 

 

 

(2,733

)

 

 

6,603,558

 

Directly related cost of transportation and other expenses1,3

 

$

1,108,164

 

 

 

130,300

 

 

 

69,828

 

 

 

1,792,933

 

 

 

463,690

 

 

 

692,872

 

 

 

248,088

 

 

 

(1,423

)

 

 

4,504,452

 

Salaries and other operating expenses2

 

$

631,396

 

 

 

74,320

 

 

 

36,220

 

 

 

236,480

 

 

 

109,018

 

 

 

274,269

 

 

 

80,063

 

 

 

(1,286

)

 

 

1,440,480

 

Operating income

 

$

236,314

 

 

 

27,704

 

 

 

8,589

 

 

 

247,614

 

 

 

69,594

 

 

 

56,986

 

 

 

11,849

 

 

 

(24

)

 

 

658,626

 

Identifiable assets at period end

 

$

2,336,071

 

 

 

163,943

 

 

 

76,173

 

 

 

689,525

 

 

 

231,771

 

 

 

642,124

 

 

 

228,423

 

 

 

(9,476

)

 

 

4,358,554

 

Capital expenditures

 

$

28,276

 

 

 

1,692

 

 

 

498

 

 

 

1,785

 

 

 

1,035

 

 

 

3,418

 

 

 

715

 

 

 

 

 

 

37,419

 

Equity

$

1,791,658

77,915

31,324

246,557

97,564

185,352

110,714

(36,611

)

2,504,473

 

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.

 

3Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis.

 

The Company’s consolidated financial results in the three and nine months ended September 30, 2021 and 2020 were each significantly impacted by the effects of the global pandemic in divergent ways. In all quarters of 2021, the Company experienced strong volumes and high average sell and buy rates as a result of imbalances between demand and carrier capacity and continuing effects of disruptions in supply chains originating in measures to combat the pandemic in 2020.

 

This is in contrast with slower activity in North Asia in the first quarter of 2020 as the pandemic resulted in temporary closures and limited operations in the Company’s China offices. Shipments were also rerouted or delayed by customers and service providers as they were taking their own precautionary measures. This was followed by significant increases in airfreight services revenues and related expenses, in the second and third quarters of 2020, as a result of demand for time-sensitive delivery of technology equipment and medical equipment and supplies from China, which combined with reductions in airfreight supply resulted in significantly higher average buy and sell rates.

 

These impacts are affecting all of the Company’s geographical segments and most notably the year-over-year comparability of the North Asia segment. For the three months ended September 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 32% and 27%, respectively, of the Company’s total revenues and 21% and 26%, respectively, of the total operating income. For the nine months ended September 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 30% and 28%, respectively, of the Company’s total revenues and 23% and 30%, respectively, of the total operating income.

 

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

Source: Expeditors International of Washington, Inc.