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Expeditors Reports Fourth Quarter 2011 EPS Of $.43 Per Share 1

Stocks in this article: EXPD

Disclaimer on Forward-Looking Statements:

Certain portions of this release contain forward-looking statements which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including comments on future ability to maintain operating income as a percentage of net revenue over 30%, ability to benefit in the future from spot buying opportunities, ability to grow net revenue and operating income, changes in consumer confidence in freight volumes, and ability to succeed in 2012, both from a near and long-term perspective. Actual future results and trends may differ materially from historical results or those projected in any forward-looking statements depending on a variety of factors including, but not limited to, our ability to maintain consistent and stable operating results, future success of our business model, ability to perpetuate profits, changes in customer demand for Expeditors’ services caused by a general economic slow-down, customers’ inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, regulatory actions or changes or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual Report as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
         
December 31, December 31,
2011 2010

Assets

Current Assets:
Cash and cash equivalents $ 1,294,356 $ 1,084,465
Short-term investments 472 524
Accounts receivable, net 934,752 1,003,884
Deferred Federal and state income taxes 10,415 8,706
Other current assets 46,888   42,776
Total current assets 2,286,883   2,140,355
Property and equipment, net 538,806 498,648
Goodwill, net 7,927 7,927
Other intangibles, net 2,630 3,716
Other assets, net 30,581   28,533
$ 2,866,827   $ 2,679,179

Liabilities and Equity

Current Liabilities:
Accounts payable 606,628 652,161
Accrued expenses, primarily salaries and related costs 169,445 177,869
Federal, state and foreign income taxes 20,072   31,948
Total current liabilities 796,145   861,978
Deferred Federal and state income taxes 60,613 69,047
Commitments and contingencies
Shareholders’ Equity:
Preferred stock; none issued
Common stock, par value $.01 per share; issued and outstanding 212,003,662 shares at December 31, 2011 and 212,047,774 shares at December 31, 2010 2,120 2,120
Additional paid-in capital 13,260 13,412
Retained earnings 1,991,222 1,717,249
Accumulated other comprehensive (loss) income (2,964 ) 8,125
Total shareholders’ equity 2,003,638   1,740,906
Noncontrolling interest 6,431   7,248
Total equity 2,010,069   1,748,154
$ 2,866,827   $ 2,679,179
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
                 
Three months ended Twelve months ended
December 31, December 31,
2011 2010 2011 2010
Revenues:
Airfreight services $ 705,744 $ 778,009 $ 2,893,474 $ 2,821,828
Ocean freight and ocean services 441,102 481,263 1,878,595 1,955,400
Customs brokerage and other services   355,068     322,863     1,378,429     1,190,345  
Total revenues   1,501,914     1,582,135     6,150,498     5,967,573  
Operating Expenses:
Airfreight consolidation 534,159 604,309 2,193,122 2,181,598
Ocean freight consolidation 333,567 379,250 1,443,170 1,569,877
Customs brokerage and other services 158,033 145,214 617,729 523,312
Salaries and related costs 247,917 237,822 993,358 894,132
Rent and occupancy costs 20,578 19,988 84,665 77,209
Depreciation and amortization 9,146 9,310 36,776 36,900
Selling and promotion 10,447 9,593 38,974 32,055
Other   33,003     28,077     124,377     105,260  
Total operating expenses   1,346,850     1,433,563     5,532,171     5,420,343  
Operating income   155,064     148,572     618,327     547,230  
 
Interest income 2,715 2,064 10,235 7,002
Interest expense (248 ) (198 ) (970 ) (576 )
Other, net   (2,330 )   1,181     10,436     10,412  
Other income (expense), net   137     3,047     19,701     16,838  
Earnings before income taxes 155,201 151,619 638,028 564,068
Income tax expense   62,061     55,171     251,785     219,863  
Net earnings   93,140     96,448     386,243     344,205  

Less net earnings (losses) attributable to the noncontrolling interest

  297     (54 )   564     33  
Net earnings attributable to shareholders $ 92,843   $ 96,502   $ 385,679   $ 344,172  
Diluted earnings attributable to shareholders per share $ .43   $ .45   $ 1.79   $ 1.59  
Basic earnings attributable to shareholders per share $ .44   $ .45   $ 1.82   $ 1.62  
Dividends declared and paid per common share $ .25   $ .20   $ .50   $ .40  
Weighted average diluted shares outstanding   214,159,723     216,587,468     215,033,580     216,446,656  
Weighted average basic shares outstanding   211,988,482     212,217,035     212,117,511     212,283,966  
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
                 
Three months ended Twelve months ended
December 31, December 31,
2011 2010 2011 2010
Operating Activities:
Net earnings $ 93,140 $ 96,448 $ 386,243 $ 344,205
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable 166 305 1,327 3,414
Deferred income tax expense (benefit) 5,598 8,048 (4,065 ) 10,569
Excess tax benefits from stock plans (232 ) (12,274 ) (5,300 ) (23,863 )
Stock compensation expense 10,832 10,696 44,278 43,743
Depreciation and amortization 9,146 9,310 36,776 36,900
Loss (gain) on sale of assets 414 140 360 (321 )
Other 308 304 2,136 1,536
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 58,717 77,947 46,915 (188,823 )
(Increase) decrease in other current assets (1,620 ) 1,484 (7,483 ) (1,475 )
(Decrease) increase in accounts payable and accrued expenses (54,879 ) (60,302 ) (40,819 ) 130,138
(Decrease) increase in income taxes payable, net (13,654 ) 2,725   (3,237 ) 39,495  
Net cash provided by operating activities 107,936   134,831   457,131   395,518  
Investing Activities:
Decrease in short-term investments 6 81 29 188
Purchase of property and equipment (19,261 ) (15,755 ) (78,115 ) (42,408 )
Proceeds from sale of property and equipment 84 92 193 360
Prepayment on long-term leases, net (936 )
Other 253   (632 ) (1,510 ) (319 )
Net cash used in investing activities (18,918 ) (16,214 ) (80,339 ) (42,179 )
Financing Activities:
Proceeds from issuance of common stock 2,055 38,826 56,646 99,784
Repurchases of common stock (3,499 ) (106,862 ) (112,071 ) (246,312 )
Excess tax benefits from stock plans 232 12,274 5,300 23,863
Dividends paid (52,997 ) (42,475 ) (106,011 ) (84,872 )
Distribution to noncontrolling interest (133 ) (88 ) (955 ) (1,051 )
Net cash used in financing activities (54,342 ) (98,325 ) (157,091 ) (208,588 )
Effect of exchange rate changes on cash and cash equivalents (1,134 ) 6,947   (9,810 ) 13,785  
Increase in cash and cash equivalents 33,542 27,239 209,891 158,536
Cash and cash equivalents at beginning of period 1,260,814   1,057,226   1,084,465   925,929  
Cash and cash equivalents at end of period $ 1,294,356   $ 1,084,465   $ 1,294,356   $ 1,084,465  
Interest and taxes paid:
Interest $ 231 $ 57 $ 296 $ 110
Income taxes 83,454 42,369 266,621 171,618
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information

(In thousands) (Unaudited)

 
          OTHER                 MIDDLE        
UNITED NORTH LATIN ASIA EUROPE and EAST and ELIMI- CONSOLI-
STATES AMERICA AMERICA PACIFIC AFRICA INDIA NATIONS DATED
Three months ended December 31, 2011:
Revenues from unaffiliated customers $ 383,830 48,839 19,490 761,092 218,074 70,589 1,501,914
Transfers between geographic areas 24,639 2,641 5,356 10,159 10,570 4,592 (57,957 )
Total revenues $ 408,469 51,480 24,846 771,251 228,644 75,181 (57,957 ) 1,501,914
Net revenues $ 183,381 24,367 14,673 150,262 76,950 26,522 476,155
Operating income $ 41,652 10,314 5,056 68,971 19,048 10,023 155,064
Identifiable assets $ 1,521,657 86,020 48,221 667,171 401,518 141,379 861 2,866,827
Capital expenditures $ 8,404 199 166 8,760 1,288 444 19,261
Depreciation and amortization $ 5,222 208 226 1,605 1,400 485 9,146
Equity $ 1,285,812 49,571 27,346 448,613 145,998 85,605 (32,876 ) 2,010,069
Three months ended December 31, 2010:
Revenues from unaffiliated customers $ 368,584 43,083 19,010 867,844 203,958 79,656 1,582,135
Transfers between geographic areas 26,804   3,114 4,850 8,976 11,371 4,266 (59,381 )
Total revenues $ 395,388 46,197 23,860 876,820 215,329 83,922 (59,381 ) 1,582,135
Net revenues $ 177,438 20,322 13,509 146,191 72,528 23,374 453,362
Operating income $ 45,968 7,204 4,830 64,006 19,245 7,319 148,572
Identifiable assets $ 1,343,098 95,298 51,326 612,085 432,019 144,043 1,310 2,679,179
Capital expenditures $ 4,991 157 332 1,776 7,968 531 15,755
Depreciation and amortization $ 5,372 321 241 1,885 940 551 9,310
Equity $ 1,089,053 46,601 27,462 371,610 160,428 84,456 (31,456 ) 1,748,154
 
Twelve months ended December 31, 2011:
Revenues from unaffiliated customers $ 1,540,477 189,843 82,312 3,144,641 891,185 302,040 6,150,498
Transfers between geographic areas 101,738 11,095 21,222 40,012 43,359 17,897 (235,323 )
Total revenues $ 1,642,215 200,938 103,534 3,184,653 934,544 319,937 (235,323 ) 6,150,498
Net revenues $ 732,299 90,432 59,968 605,151 307,471 101,156 1,896,477
Operating income $ 210,702 29,209 19,151 258,952 72,248 28,065 618,327
Identifiable assets $ 1,521,657 86,020 48,221 667,171 401,518 141,379 861 2,866,827
Capital expenditures $ 23,219 1,122 628 25,295 25,856 1,995 78,115
Depreciation and amortization $ 20,037 1,038 999 7,243 5,414 2,045 36,776
Equity $ 1,285,812 49,571 27,346 448,613 145,998 85,605 (32,876 ) 2,010,069
Twelve months ended December 31, 2010:
Revenues from unaffiliated customers $ 1,348,259 163,750 74,327 3,349,960 729,022 302,255 5,967,573
Transfers between geographic areas 99,547   10,836 16,932 32,837 40,778 16,184 (217,114 )
Total revenues $ 1,447,806 174,586 91,259 3,382,797 769,800 318,439 (217,114 ) 5,967,573
Net revenues $ 666,669 77,079 50,937 543,869 264,663 89,569 1,692,786
Operating income $ 198,393 23,521 15,985 222,944 63,115 23,272 547,230
Identifiable assets $ 1,343,098 95,298 51,326 612,085 432,019 144,043 1,310 2,679,179
Capital expenditures $ 18,128 574 1,320 5,743 14,383 2,260 42,408
Depreciation and amortization $ 20,125 1,344 880 7,511 4,661 2,379 36,900
Equity $ 1,089,053 46,601 27,462 371,610 160,428 84,456 (31,456 ) 1,748,154




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