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TheStreet Open House

Expeditors Reports Third Quarter 2012 EPS Of $.42 Per Share1

Stocks in this article: EXPD

Investors may submit written questions via e-mail to: investor@expeditors.com . Questions received by the end of business on November 9, 2012 will be considered in management's 8-K “Responses to Selected Questions” expected to be filed on or about November 30, 2012.

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 uncertain global economy and industry challenges, lackluster consumer and business demand, ability to maintain or increase operating margin and ability to remain profitable and continue to build market share. 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)
 
     

September 30,

    December 31,
2012 2011

Assets

Current Assets:
Cash and cash equivalents $ 1,367,642 $ 1,294,356
Accounts receivable, net 1,015,350 934,752
Deferred Federal and state income taxes 10,955 10,415
Other current assets   46,048   47,360  
Total current assets   2,439,995   2,286,883  
Property and equipment, net 551,610 538,806
Goodwill and other intangibles, net 9,774 10,557
Other assets, net   30,808   30,581  

 

$ 3,032,187 $ 2,866,827  

Liabilities and Equity

Current Liabilities:
Accounts payable 667,395 606,628
Accrued expenses, primarily salaries and related costs 174,862 169,445
Federal, state and foreign income taxes   23,943   20,072  
Total current liabilities   866,200   796,145  
Deferred Federal and state income taxes 70,288 60,613
 
Commitments and contingencies
 
Shareholders’ Equity:
Preferred stock; none issued
Common stock, par value $.01 per share; issued and outstanding 208,950,205 shares at September 30, 2012 and 212,003,662 shares at December 31, 2011 2,090 2,120
Additional paid-in capital 118 13,260
Retained earnings 2,082,542 1,991,222
Accumulated other comprehensive income (loss)   5,267   (2,964 )
Total shareholders’ equity   2,090,017   2,003,638  
Noncontrolling interest   5,682   6,431  
Total equity   2,095,699   2,010,069  
$ 3,032,187 $ 2,866,827  
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
 
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
 
      Three months ended     Nine months ended
September 30, September 30,
2012     2011 2012     2011
Revenues:
Airfreight services $ 622,678 $ 736,946 $ 1,900,131 $ 2,187,730
Ocean freight and ocean services 549,250 510,521 1,502,584 1,437,493
Customs brokerage and other services   359,736     358,901     1,045,271     1,023,361  
Total revenues   1,531,664     1,606,368     4,447,986     4,648,584  
Operating Expenses:
Airfreight consolidation 471,947 558,047 1,437,301 1,658,963
Ocean freight consolidation 432,518 392,249 1,177,919 1,109,603
Customs brokerage and other services 162,061 162,226 467,406 459,696
Salaries and related costs 252,899 258,512 748,956 745,441
Rent and occupancy costs 21,304 21,352 63,333 64,087
Depreciation and amortization 10,030 9,199 29,245 27,630
Selling and promotion 7,847 9,342 25,370 28,527
Other   27,959     31,683     95,683     91,374  
Total operating expenses   1,386,565     1,442,610     4,045,213     4,185,321  
Operating income   145,099     163,758     402,773     463,263  
 
Interest income 2,831 2,888 9,241 7,520
Interest expense (182 ) (279 ) (1,024 ) (722 )
Other, net   1,232     10,792     6,011     12,766  
Other income, net   3,881     13,401     14,228     19,564  
Earnings before income taxes 148,980 177,159 417,001 482,827
Income tax expense   60,253     70,283     167,531     189,724  
Net earnings   88,727     106,876     249,470     293,103  
Less net earnings attributable to the noncontrolling interest   237     272     318     267  
Net earnings attributable to shareholders $ 88,490   $ 106,604   $ 249,152   $ 292,836  
Diluted earnings attributable to shareholders per share $ .42   $ .50   $ 1.17   $ 1.36  
Basic earnings attributable to shareholders per share $ .42   $ .50   $ 1.18   $ 1.38  
Dividends declared and paid per common share $   $   $ .28   $ .25  
Weighted average diluted shares outstanding   211,397,602     214,717,451     212,916,309     215,376,675  
Weighted average basic shares outstanding   210,135,763     212,256,119     211,314,850     212,160,994  
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
 
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
 
      Three months ended     Nine months ended
September 30, September 30,
2012     2011 2012     2011
Operating Activities:
Net earnings $ 88,727 $ 106,876 $ 249,470 $ 293,103
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses on accounts receivable 463 (629 ) (392 ) 1,161
Deferred income tax expense (benefit) 4,588 (9,328 ) 4,330 (9,663 )
Excess tax benefits from stock plans (59 ) (537 ) (4,291 ) (5,068 )
Stock compensation expense 11,320 12,738 32,846 33,446
Depreciation and amortization 10,030 9,199 29,245 27,630
Gain on sale of assets (13 ) (3 ) (143 ) (54 )
Other 1,273 1,210 1,826 1,828
Changes in operating assets and liabilities:
Increase in accounts receivable (23,520 ) (4,312 ) (73,812 ) (11,802 )
Increase in other current assets (7,195 ) (8,344 ) (3,629 ) (5,863 )
(Decrease) increase in accounts payable and accrued expenses (23,267 ) (24,070 ) 60,966 14,060
Increase in income taxes payable, net   6,819     10,505     12,961     10,417  
Net cash from operating activities   69,166     93,305     309,377     349,195  
Investing Activities:
Purchase of property and equipment (10,170 ) (20,619 ) (37,072 ) (58,854 )
Proceeds from sale of property and equipment 41 24 294 109
Other, net   (32 )   (632 )   192     (2,676 )
Net cash from investing activities   (10,161 )   (21,227 )   (36,586 )   (61,421 )
Financing Activities:
Proceeds from issuance of common stock 24,599 30,966 45,001 54,591
Repurchases of common stock (87,227 ) (43,298 ) (193,493 ) (108,572 )
Excess tax benefits from stock plans 59 537 4,291 5,068
Dividends paid (59,358 ) (53,014 )
Distributions to noncontrolling interest   (1,177 )   (822 )   (1,177 )   (822 )
Net cash from financing activities   (63,746 )   (12,617 )   (204,736 )   (102,749 )
Effect of exchange rate changes on cash and cash equivalents   8,136     (24,477 )   5,231     (8,676 )
Increase in cash and cash equivalents 3,395 34,984 73,286 176,349
Cash and cash equivalents at beginning of period   1,364,247     1,225,830     1,294,356     1,084,465  
Cash and cash equivalents at end of period $ 1,367,642   $ 1,260,814   $ 1,367,642   $ 1,260,814  
Interest and taxes paid:
Interest $ 27 $ 48 $ 447 $ 65
Income taxes 50,911 65,856 155,006 183,167
 
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
 
Business Segment Information
(In thousands) (Unaudited)
 
          OTHER             EUROPE     MIDDLE        
UNITED NORTH LATIN ASIA and EAST and ELIMI- CONSOLI-
STATES AMERICA AMERICA PACIFIC AFRICA INDIA NATIONS DATED
Three months ended September 30, 2012:
Revenues from unaffiliated customers $ 383,830 50,208 20,815 804,855 198,124 73,832 1,531,664
Transfers between geographic areas   24,423 2,677 4,140 10,676 9,624 4,507 (56,047 )
Total revenues $ 408,253 52,885 24,955 815,531 207,748 78,339 (56,047 ) 1,531,664
Net revenues $ 187,737 23,412 13,978 146,992 69,841 23,178 465,138
Operating income $ 56,096 6,886 4,239 59,620 13,312 4,946 145,099
Identifiable assets $ 1,570,615 102,020 58,687 714,982 423,488 162,225 170 3,032,187
Capital expenditures $ 5,681 222 405 1,934 1,476 452 10,170
Depreciation and amortization $ 5,942 188 220 1,691 1,555 434 10,030
Equity $ 1,281,250 58,471 33,444 499,590 158,939 96,621 (32,616 ) 2,095,699
Three months ended September 30, 2011:
Revenues from unaffiliated customers $ 388,736 49,341 21,353 839,069 229,776 78,093 1,606,368
Transfers between geographic areas   27,161 2,989 5,025 10,500 10,727 4,596 (60,998 )
Total revenues $ 415,897 52,330 26,378 849,569 240,503 82,689 (60,998 ) 1,606,368
Net revenues $ 189,381 23,783 15,035 162,785 77,768 25,094 493,846
Operating income $ 57,564 7,345 4,846 69,001 18,616 6,386 163,758
Identifiable assets $ 1,509,393 87,554 52,058 667,421 414,991 149,253 2,499 2,883,169
Capital expenditures $ 7,435 315 162 7,201 4,981 525 20,619
Depreciation and amortization $ 4,904 250 240 1,822 1,488 495 9,199
Equity $ 1,242,594 49,134 27,258 435,466 146,652 92,668 (31,714 ) 1,962,058
 
Nine months ended September 30, 2012:
Revenues from unaffiliated customers $ 1,140,258 149,964 61,450 2,273,783 606,696 215,835 4,447,986
Transfers between geographic areas   69,135 7,608 14,010 32,686 28,694 13,828

(165,961

)

Total revenues $ 1,209,393 157,572 75,460 2,306,469 635,390 229,663 (165,961 ) 4,447,986
Net revenues $ 551,503 70,769 43,537 414,714 212,871 71,966 1,365,360
Operating income $ 150,814 21,340 13,119 158,626 40,510 18,364 402,773
Identifiable assets $ 1,570,615 102,020 58,687 714,982 423,488 162,225 170 3,032,187
Capital expenditures $ 20,676 551 1,060 9,823 3,529 1,433 37,072
Depreciation and amortization $ 17,320 556 644 4,960 4,389 1,376 29,245
Equity $ 1,281,250 58,471 33,444 499,590 158,939 96,621 (32,616 ) 2,095,699
Nine months ended September 30, 2011:
Revenues from unaffiliated customers $ 1,156,647 141,004 62,822 2,383,549 673,111 231,451 4,648,584
Transfers between geographic areas   77,099 8,454 15,866 29,853 32,789

13,305

 

(177,366 )
Total revenues $ 1,233,746 149,458 78,688 2,413,402 705,900 244,756 (177,366 ) 4,648,584
Net revenues $ 548,918 66,065 45,295 454,889 230,521 74,634 1,420,322
Operating income $ 169,050 18,895 14,095 189,981 53,200 18,042 463,263
Identifiable assets $ 1,509,393 87,554 52,058 667,421 414,991 149,253 2,499 2,883,169
Capital expenditures $ 14,815 923 462 16,535 24,568 1,551 58,854
Depreciation and amortization $ 14,815 830 773 5,638 4,014 1,560 27,630
Equity $ 1,242,594 49,134 27,258 435,466 146,652 92,668 (31,714 ) 1,962,058




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