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: investor@expeditors.com. 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. |