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EXPD · Expeditors International

27 filings

10-K

EXPD 10-K Annual Reports

Expeditors International - 27 annual reports

Filing record · 2016–202610-K1110-Q338-K134

2025
Expeditors International Annual Report, Year Ended Dec 31, 2025
Expeditors International (EXPD) reported a solid but mixed 2025. Total revenues rose 4% to $11.07 billion and operating income rose 1% to $1.05 billion, while net earnings attributable to shareholders were essentially flat at $810 million. Diluted EPS grew 4% to $5.95, helped by a roughly 4% lower weighted diluted share count from aggressive buybacks. Growth was uneven across services: customs brokerage revenue rose 13% to $4.27 billion and airfreight rose 9% to $3.98 billion, driven by customs complexity from the shifting tariff environment and by demand from technology customers building AI infrastructure. Ocean freight revenue fell 11% to $2.81 billion as sell and buy rates collapsed in the second half of the year amid excess vessel capacity. Cash generation and balance sheet strength were the standout positives. Operating cash flow nearly doubled sequentially to $1.0 billion (from $723 million), driven largely by receivables collections. The company ended the year with $1.31 billion in cash and no long-term debt, and it returned $875 million to shareholders through buybacks and dividends. Management also remediated the material weaknesses in IT general controls disclosed in the prior year, and KPMG issued an unqualified opinion on internal control. Key watch items for investors include the continued sharp decline in ocean rates, which management says could persist into 2026, and the exposure to China-linked trade volumes (19% of 2025 revenue). The February 20, 2026 Supreme Court ruling invalidating many IEEPA tariffs creates both potential refund and uncertainty for customs brokerage activity, which the company says it is still assessing. Pending Indian tax audits and rising 2026 capex guidance of about $100 million are additional factors to monitor.
Feb 25, 2026
2024
Expeditors International Annual Report, Year Ended Dec 31, 2024
Expeditors International (EXPD) reported a strong rebound in 2024, with total revenues rising 14% to $10.6 billion from $9.3 billion and operating income climbing 11% to $1.04 billion. The growth was driven by a sharp rise in ocean freight, where revenues increased 33%, and by airfreight, where revenues rose 13% on a 12% increase in tonnage. Disruptions in the Red Sea, front-loaded importer demand, and capacity constraints pushed average buy and sell rates higher. Diluted EPS was $5.72, up from $5.01 in 2023, and management expects ocean rates to decline through at least the first half of 2025 as demand softens and new vessels enter service, so the 2024 spike should not be treated as a run rate. The quality of the period's results is weaker than the headline numbers suggest. Operating cash flow fell 31% to $723 million, largely because of a $330 million working-capital build to finance second-half growth. Accounts receivable rose to $2.0 billion. The company returned $1.06 billion to shareholders through buybacks and dividends, and cash fell to $1.15 billion from $1.51 billion. Management also disclosed that internal control over financial reporting was not effective as of December 31, 2024, and KPMG issued an adverse opinion on ICFR. The weaknesses relate to IT general controls over database changes, were first identified in 2022, and remediation has no estimated completion date. Leadership is also changing, with Jeffrey Musser retiring and Daniel Wall becoming CEO effective April 1, 2025. For investors, the central questions are whether the 2024 freight-rate tailwind reverses as guided, whether working capital normalizes and cash conversion recovers, and whether the IT control remediation can be completed under new leadership. The balance sheet remains debt-free apart from lease liabilities, and the company held significant cash, but the pending Indian tax dispute and the unresolved control weaknesses are risks that the headline earnings growth does not resolve.
Feb 21, 2025
2023
Expeditors International Annual Report, Year Ended Dec 31, 2023
Expeditors International (EXPD) reported a sharp earnings contraction for fiscal 2023 as the post-pandemic freight boom unwound. Total revenue fell 46% to $9.30 billion from $17.07 billion, and operating income declined 48% to $939.9 million from $1.82 billion. Net earnings attributable to shareholders dropped 45% to $752.9 million, and diluted EPS fell to $5.01 from $8.26. Management attributed the decline to a sharp fall in both buy and sell rates for air and ocean freight, a roughly 10% drop in airfreight tonnage, a 16% drop in ocean containers shipped, and softer customs brokerage volumes as port congestion cleared. The balance sheet and cash generation remain strong, though the business is clearly in a cyclical downturn. Operating cash flow was $1.05 billion, down from $2.13 billion, and the company returned $1.6 billion to shareholders through buybacks ($1.39 billion in repurchases) and dividends ($202 million). Cash stood at $1.51 billion against no long-term debt, and working capital was $1.73 billion. Management guided that excess carrier capacity may continue to pressure rates into 2024, so investors should expect further near-term revenue and margin pressure. The most notable non-financial item is a material weakness in internal control over financial reporting, tied to unauthorized or unreviewed direct database changes in IT systems that support financial reporting. KPMG issued an adverse opinion on internal control, although its unqualified opinion on the financial statements stands. Remediation is targeted for completion in 2024. The company also disclosed a February 2022 cyber-attack that shut down most systems for about three weeks, with cumulative costs of roughly $59 million, and an ongoing Indian tax dispute with no estimable range of outcomes.
Feb 23, 2024
2022
Expeditors International Annual Report, Year Ended Dec 31, 2022
Expeditors International of Washington (EXPD) reported a 2022 that was strong in absolute terms but softened as the pandemic-era freight boom unwound. Total revenues rose 3% to $17.07 billion, while operating income fell 4% to $1.82 billion and net earnings attributable to shareholders declined 4% to $1.36 billion, or $8.26 per diluted share. The revenue gain was driven by higher buy and sell rates early in the year; volumes fell in most services as customer demand softened and the global economy slowed. Rates declined progressively through the second half, sharply in Q4, and management expects further declines in 2023, which could reduce revenues, expenses and operating income. Cash generation and capital return were the standout features. Operating cash flow was $2.13 billion, up from $868 million, largely from collecting receivables that had built up during the 2021 rate surge. The company returned about $1.8 billion to shareholders through repurchases (14.5 million shares at an average of $108.88) and dividends ($1.34 per share, up from $1.16). Year-end cash was $2.03 billion and the company carries no long-term debt, leaving a strong balance sheet. Investors should weigh two operational issues. A February 2022 cyber-attack shut down most global systems for about three weeks and cost roughly $65 million net, including demurrage and remediation. More significantly, management disclosed a material weakness in internal control over financial reporting tied to unauthorized-capable database changes in an IT system. KPMG issued an adverse opinion on internal control, though it gave an unqualified opinion on the financial statements. Remediation is expected by the end of 2023.
Mar 1, 2023
2021
Expeditors International Annual Report, Year Ended Dec 31, 2021
Expeditors International (EXPD) reported a dramatic 2021 rebound driven by the global freight market dislocation. Total revenues rose 72% to $16.52 billion from $9.58 billion, and operating income more than doubled (up 103%) to $1.91 billion. Net earnings attributable to shareholders reached $1.42 billion, or $8.27 per diluted share, versus $4.07 in 2020. Management attributes the surge to historically high air and ocean buy and sell rates, port congestion, and capacity constraints, and explicitly warns that these conditions are not expected to last long term, so a decline in rates would significantly reduce revenues and operating income. Balance sheet strength is notable: the company ended 2021 with $1.73 billion of cash, no long-term debt, and working capital of $2.91 billion, and it returned $710 million to shareholders through buybacks and dividends. The most important new risk is a targeted cyber-attack disclosed on February 20, 2022, after which Expeditors shut down most of its operating systems globally. Management says it has only partially resumed operations, cannot yet estimate when full operations will return, and expects a material adverse impact on business, revenues, expenses, cash flows and reputation. It also cannot estimate the ultimate financial impact. Investors should treat 2021 results as a peak-cycle snapshot and watch for the restoration timeline, incremental remediation costs, and any customer or liability claims tied to the incident. For 2022, management expects disruptive market conditions to persist at least through the first half, and it guided to $100 million in capital expenditures, including cyber-related upgrades. Its 2021 operating margin of roughly 11.6% and its strong cash generation of $868 million in operating cash flow position it well if freight rates normalize gradually, but the combination of rate normalization risk and cyber-related disruption makes near-term earnings visibility low.
Mar 15, 2022
2020
Expeditors International Annual Report, Year Ended Dec 31, 2020
Expeditors International of Washington (EXPD) reported a record-setting 2020 driven by the pandemic-induced freight market dislocation. Total revenues rose 24% to $10.12 billion from $8.18 billion, and operating income climbed 23% to $940 million from $767 million. Net earnings attributable to shareholders grew 18% to $696 million, and diluted EPS rose to $4.07 from $3.39. Airfreight drove the results: airfreight revenues jumped 63% on a 78% increase in average sell rates, while tonnage fell 3%. Customs brokerage and ocean revenues were comparatively flat, with brokerage down 2% and ocean up 6%. Management repeatedly stressed that these historically high buy and sell rates are unprecedented and not expected to be sustained long term, so investors should be cautious about extrapolating 2020 margins and earnings. The balance sheet and cash position remain very strong. Cash and equivalents rose to $1.53 billion, and the company carries no long-term debt. Operating cash flow was $655 million, down from $772 million, as a $647 million increase in accounts receivable absorbed cash from high freight rates and rising customer billings. Shareholder returns continued, with $175 million in dividends ($1.04 per share, up from $1.00) and $332 million in share repurchases. Key risks flagged in the filing include carrier capacity and pricing volatility, customer credit exposure as receivables grow, a heavy concentration of revenue and operating income in China and North Asia, and an ongoing rollout of a new global accounting system. KPMG issued an unqualified opinion on both the financial statements and internal controls, and identified gross unrecognized tax benefits as a critical audit matter.
Feb 19, 2021
2019
Expeditors International Annual Report, Year Ended Dec 31, 2019
Expeditors International of Washington (EXPD) reported 2019 total revenues of $8.18 billion, up 0.5% from $8.14 billion in 2018, while operating income fell 4% to $767 million from $797 million. Net earnings attributable to shareholders declined 4.5% to $590 million, and diluted EPS was $3.39 versus $3.48. The decline was driven by a 10% drop in airfreight revenue and a 2% drop in ocean freight revenue, partly offset by a 16% increase in customs brokerage and other services revenue. Management attributed the softness to slowing global economic growth and ongoing U.S.-China trade disputes, and noted that the fourth quarter was hit hard by weaker China trade volumes. Note that the revenue increase in customs brokerage partly reflects presentation changes (net-to-gross) that did not affect operating income. The balance sheet remains very strong, with $1.23 billion in cash and equivalents, no long-term debt, and shareholders' equity of $2.20 billion. Operating cash flow improved to $772 million from $573 million, helped by lower receivables. The company returned substantial capital to shareholders, paying $171 million in dividends ($1.00 per share, up from $0.90) and repurchasing $389 million of stock (5.3 million shares), down from $648 million in 2018. The primary forward-looking concern is COVID-19, which the filing says is disrupting central China operations, reducing airfreight capacity, and likely reducing 2020 shipment volumes. Because China accounts for roughly 26% of revenue and 27% of operating income, management expects 2020 results to be negatively affected. Investors should weigh the company's cash-rich, asset-light model and history of profitability against near-term cyclical pressure, pricing volatility in airfreight and ocean markets, and the uncertainty created by trade policy and the epidemic.
Feb 21, 2020
2018
Expeditors International Annual Report, Year Ended Dec 31, 2018
Expeditors International of Washington (EXPD) reported a strong 2018 for its fiscal year ended December 31, 2018. Total revenues rose 18% to $8.14 billion from $6.92 billion, and net revenues (a non-GAAP measure) grew 13% to $2.62 billion. Net earnings attributable to shareholders increased 26% to $618.2 million, and diluted EPS rose to $3.48 from $2.69. Operating income grew 14% to $796.6 million, with the operating margin on net revenues holding at about 30%. Much of the top-line growth reflects a $225 million gross-up from changing the presentation of certain warehouse and distribution revenues under the new revenue recognition standard (ASC 606), so investors should focus on net revenues and operating income for underlying performance. Growth was broad-based across the three principal services. Airfreight net revenues rose 15%, driven by a 15% increase in net revenue per kilo and 3% tonnage growth amid tighter carrier capacity. Ocean freight net revenues rose 4%, held back by lower sell rates in ocean consolidation, offset by strong order management (+11%) and direct forwarding (+6%). Customs brokerage and other services net revenues rose 17% and now represent 45% of net revenues. The balance sheet remains very strong, with $924 million in cash, no long-term debt, and shareholders' equity of about $2.0 billion. The company returned substantial capital through $648 million in buybacks and $157 million in dividends ($0.90 per share, up from $0.84). Key risks include carrier pricing volatility, ocean overcapacity, trade policy shifts (notably U.S.-China tariffs), currency exposure, and rising compensation costs tied to incentive pay. Management also flagged a new ASC 842 lease standard, expected to add roughly $370 million of right-of-use assets and lease liabilities on January 1, 2019, and an ongoing worldwide accounting system implementation. The Company reported effective internal controls over financial reporting, with KPMG issuing an unqualified opinion.
Feb 22, 2019
2017
Expeditors International Annual Report, Year Ended Dec 31, 2017
Expeditors International of Washington (EXPD) reported a strong 2017 for its FY ended December 31, 2017, with total revenues rising 14% to $6.92 billion (from $6.10 billion) and net revenues (a non-GAAP measure) up 7% to $2.32 billion. Net earnings attributable to shareholders increased 14% to $489.3 million, and diluted EPS rose to $2.69 from $2.36. Operating income grew 4.5% to $700.3 million, though the operating margin on net revenues slipped to 30% from 31%, as salaries and related costs rose to 55% of net revenues. Reported diluted EPS was helped by a net $39 million income tax benefit from the 2017 Tax Act, so the year's bottom-line growth partly reflects a one-time item rather than purely operating improvement. The balance sheet remains very conservative, with $1.05 billion in cash and cash equivalents, no long-term debt, and shareholders' equity of $1.99 billion. Operating cash flow was $489 million, down from $529 million, mainly because accounts receivable grew. Management returned capital through $478 million of share repurchases and $150 million of dividends ($0.84 per share, up from $0.80). Expeditors also sold Miami property for about $84 million in proceeds. Looking forward, management flagged two accounting changes: the new revenue recognition standard (ASC 606), expected to reduce opening retained earnings by less than $35 million and to shift some revenue from net to gross presentation, and the new lease standard, which will bring about $260 million of future minimum lease payments onto the balance sheet. Management also guided that the 2017 Tax Act should reduce the annual effective tax rate to roughly 31% to 34%. Key risks include ocean carrier financial instability and pricing volatility, airfreight capacity tightness, currency exposure, and the ongoing, multi-year transition to a new worldwide accounting system.
Feb 23, 2018
2016
Expeditors International Annual Report, Year Ended Dec 31, 2016
Expeditors International of Washington (EXPD) reported a solid but lower-earnings 2016 as the global freight market remained oversupplied and pricing-pressured. Total revenues fell about 8% to $6.10 billion from $6.62 billion, driven by lower airfreight and ocean freight sell rates that passed through lower carrier buy rates. The metric management and investors focus on, non-GAAP net revenues, declined about 1% to $2.16 billion, with customs brokerage and other services (up 4%) offsetting flat ocean freight net revenue and a 7% drop in airfreight net revenue. Diluted EPS fell to $2.36 from $2.40, and net earnings attributable to shareholders declined 6% to $430.8 million. Operating income dropped 7% to $670 million, though operating margin on net revenues held near 31%. Capital allocation remained shareholder-friendly. The company returned roughly $483 million to shareholders through dividends ($0.80 per share, up from $0.72) and share repurchases of about $338 million, and the diluted share count fell roughly 4% to 182.7 million. Management highlighted a strong balance sheet with $974 million of cash, no long-term debt, and operating cash flow of $529 million. Forward-looking items include planned 2017 capital expenditures of about $110 million, the pending sale of Miami land and buildings with a book value of $80 million, and the adoption of new stock compensation and revenue recognition accounting rules that may add earnings volatility. Investors should weigh the cash-rich, organic-growth model against ongoing pricing pressure in airfreight and ocean freight and the risk of carrier instability.
Feb 23, 2017
2015
Expeditors International Annual Report, Year Ended Dec 31, 2015
Expeditors International of Washington (EXPD) closed 2015 with revenues of $6.62 billion (up 1% from $6.56 billion in 2014) and net revenues, the company's non-GAAP primary profitability measure, of $2.19 billion (up 10% from $1.98 billion). Net earnings attributable to shareholders rose 21% to $457.2 million, and diluted EPS reached $2.40 versus $1.92 in 2014. Operating margin on net revenues improved to 33% from 30%, driven mainly by stronger ocean freight consolidation yields and favorable market buying opportunities, while airfreight net revenues grew 11% on higher tonnage. Customs brokerage net revenues also rose 6%, with North America up 10%. The balance sheet remains very strong, with $808 million in cash and short-term investments, no long-term debt, and working capital of $1.13 billion. Management returned substantial capital to shareholders, repurchasing $630 million of stock (about 13.1 million shares) and paying $136 million in dividends ($0.72 per share, up from $0.64). Operating cash flow improved to $565 million from $395 million. Total shareholders' equity declined to $1.69 billion, largely because of buybacks and a $44 million foreign currency translation loss. The key risks for investors are the cyclical pressure on air and ocean carrier capacity and pricing, the 2015 decline in fuel-driven rates, and the company's heavy reliance on international trade flows and foreign operations, where a majority of revenue and operating income is generated. Management also flagged competitive pricing pressure from customers seeking lower rates and expanded contract terms, and the upcoming transition to the CBP's ACE system and a new worldwide accounting system. Beyond these operational issues, the company says it expects a 2016 capex budget of about $100 million, including real estate.
Feb 25, 2016
2014
Expeditors International Annual Report, Year Ended Dec 31, 2014
Expeditors International of Washington (EXPD) closed 2014 with record results despite a challenging freight environment. Total revenues rose 8% to $6.56 billion and net revenues (the company's non-GAAP primary profitability measure) grew 5% to $1.98 billion. Net earnings attributable to shareholders increased 8% to $376.9 million, and diluted EPS rose to $1.92 from $1.68. Operating margin on net revenues improved to 30% from 29%, reflecting disciplined overhead control: salaries and related costs fell to 54% of net revenues from 55%. Airfreight net revenues grew 6% on a 9% tonnage increase, ocean freight net revenues rose 6% on an 11% container volume increase, and customs brokerage net revenues grew 4%. The balance sheet remains exceptionally strong. The company carries no debt, holds $967 million in cash and short-term investments, and has working capital of $1.3 billion. Management is returning significant capital to shareholders: it repurchased $551 million of stock in 2014 (about 13.1 million shares) and paid $0.64 per share in dividends. Total shareholders' equity fell to $1.87 billion from $2.08 billion, largely because buybacks exceeded earnings and currency translation losses hit other comprehensive income. Investors should weigh several forward-looking issues. Management flagged that lower oil prices could prompt customers to seek rate reductions in 2015, and that carrier overcapacity and carrier financial stress persist, particularly in ocean freight. Net revenue per unit fell in airfreight and some ocean lanes as sell rates were cut to defend share. The company also disclosed a 2015 capital expenditure plan of $85 million, including real estate development, and the planned retirement of President-Europe Rommel Saber at the end of Q1 2015. Overall, the filing portrays a financially resilient, debt-free company whose growth depends on volume gains outpacing pricing pressure.
Feb 26, 2015
2013
Expeditors International Annual Report, Year Ended Dec 31, 2013
Expeditors International of Washington (EXPD) closed 2013 with revenues of $6.08 billion (up 1.5% from $5.99 billion) and net revenues, the company's non-GAAP key operating metric, of $1.88 billion (up 2.6%). Net earnings attributable to shareholders rose to $348.5 million, or $1.68 diluted EPS, up from $1.57 in 2012, though still below the $385.7 million (EPS $1.79) earned in 2011. Operating income increased 4% to $552 million, and the operating margin on net revenues held at 29%. Growth came mainly from airfreight tonnage (+4%) and ocean container volume (+6%), while per-unit pricing stayed soft as carrier capacity outpaced demand. Customs brokerage was the strongest segment, with net revenues up 3% and a 43% share of total net revenues. The balance sheet remains very strong. The company held $1.27 billion in cash and short-term investments, had no long-term debt, and generated $408 million in operating cash flow. It returned capital through $123 million in dividends ($0.60 per share, up from $0.56) and $262 million in share repurchases. Management guided 2014 capital expenditures to about $75 million. The main investor watch items are leadership transition and margin pressure. Chairman and CEO Peter Rose retires as CEO on March 1, 2014, with Jeffrey Musser succeeding him, and Rose's retirement bonus of roughly $8 million was expensed in Q4 2013. Management also flagged compressed unitary margins from competitive pricing and carrier rate volatility, particularly in ocean freight, and continued exposure to currency swings and regulatory costs.
Feb 27, 2014
2012
Expeditors International Annual Report, Year Ended Dec 31, 2012
Expeditors International of Washington (EXPD) closed fiscal 2012 with a clear earnings and margin reset. Total revenues rose to $5.98 billion from $6.15 billion in 2011 (down about 3%), while net revenues (revenues less transportation costs) fell 4% to $1.82 billion from $1.90 billion. Net earnings attributable to shareholders declined 14% to $333 million, and diluted EPS fell to $1.57 from $1.79. Operating income dropped 14% to $531 million, and operating margin on net revenues contracted from 33% to 29%. Management attributes the pressure to lower airfreight tonnage (down 6%), a 7% decline in airfreight net revenue per kilo as carriers cut capacity, and an inability to pass carrier rate increases through to customers in a timely manner. Ocean consolidation net revenue fell 7%, and salaries and related costs rose slightly even as revenue declined, which compressed margins further. The balance sheet remains very strong. The company had no long-term debt, cash and equivalents of $1.26 billion, and working capital of $1.5 billion. Operating cash flow was $370 million, down from $457 million. Management returned substantial capital to shareholders: it repurchased $302 million of stock (roughly 8 million shares, including discretionary buybacks to shrink the share count) and paid $117 million in dividends, with the semi-annual dividend raised to $0.28 per share from $0.25. Capital expenditures were $48 million, with about $100 million guided for 2013, including real estate development. For investors, the key takeaways are a cyclical earnings downturn driven by air and ocean capacity dynamics rather than balance-sheet stress, along with a continued policy of returning excess cash. Risks flagged include carrier financial instability, pricing pressure from customers who bid out logistics contracts, a European Commission anti-competition fine of about $5.5 million, and foreign currency exposure, with most revenue generated outside the United States.
Feb 27, 2013
2011
Expeditors International Annual Report, Year Ended Dec 31, 2011
Expeditors International of Washington (EXPD) reported a strong 2011 in its 10-K filed February 28, 2012. Total revenues rose 3% to $6.15 billion, while net revenues (revenues less transportation costs, the company's preferred measure of profitability) grew 12% to $1.90 billion. Operating income increased 13% to $618 million, and net earnings attributable to shareholders rose 12% to $386 million, or $1.79 per diluted share. Operating margin on net revenues improved to 33% from 32% a year earlier, driven by higher net revenue per kilo in airfreight and per container in ocean freight, which the company attributed to excess carrier capacity creating buying opportunities, particularly in Asia. The balance sheet remains very conservative. The company had $1.29 billion in cash and short-term investments, no long-term debt, and total shareholders' equity of $2.0 billion. Operating cash flow was $457 million, and the board raised the semi-annual dividend to $0.25 per share from $0.20, bringing the annual payout to $0.50. Management also noted that the first-quarter-weak seasonal pattern was disrupted in 2011, with airfreight volumes declining after Q1 and the expected fourth-quarter peak season failing to materialize, and that lower underlying trade flows continued into January 2012. The key investor concern is legal and regulatory exposure. The company is cooperating with a U.S. Department of Justice investigation into air cargo freight forwarders and faces a European Commission Statement of Objections alleging anticompetitive conduct, with a State of Play meeting scheduled for March 2012. Management has recorded no accrual and cannot estimate potential fines, which could be material to any given quarter or year. Separately, the company agreed on February 28, 2012 to settle a U.S. antitrust class action, assigning 70% of any related air cargo proceeds to plaintiffs, which management does not expect to be material to the financial statements.
Feb 28, 2012
2010
Expeditors International Annual Report, Year Ended Dec 31, 2010
Expeditors International of Washington (EXPD) reported a strong rebound in fiscal 2010 following the 2009 downturn. Revenues rose 46% to $5.97 billion from $4.09 billion, and net revenues (revenues less transportation expenses, the metric management emphasizes) increased 22% to $1.69 billion. Operating income climbed 42% to $547 million, with the operating margin on net revenues expanding to 32% from 28%. Net earnings attributable to shareholders reached $344 million, or $1.59 diluted EPS, versus $1.11 in 2009. Airfreight tonnage rose 35% and ocean consolidation volume rose 20%, reflecting the global economic recovery that began in late 2009. Management noted that the rebound was accompanied by tight carrier capacity and rising buy rates, which the company absorbs in the short term before passing them to customers. The balance sheet remains very conservative. The company had no long-term debt, cash and short-term investments of $1.085 billion, and shareholders' equity of $1.74 billion. Operating cash flow was $396 million, and the company repurchased about $246 million of stock while paying $0.40 per share in dividends. Management projects 2011 capital expenditures of roughly $117 million, including real estate development in London and Beijing. The principal risk for investors is legal. Expeditors is under investigation by the U.S. Department of Justice, the European Commission, and Brazil's Ministry of Justice over alleged anti-competitive conduct among freight forwarders, and it is a defendant in a federal antitrust class action in New York. The company has spent about $15 million on these matters since 2007 but cannot estimate a potential loss, and management states that fines could be material. The company also acknowledges that its results depend heavily on the financial health of asset-based carriers, which remain highly leveraged.
Feb 28, 2011
2009
Expeditors International Annual Report, Year Ended Dec 31, 2009
Expeditors International of Washington (EXPD) reported a difficult fiscal 2009 as the global downturn sharply reduced freight volumes. Total revenues fell 27% to $4.09 billion from $5.63 billion, and net revenues (revenues less freight consolidation costs, the metric management considers most meaningful) fell 14% to $1.38 billion. Operating income declined 19% to $385 million, and net earnings attributable to shareholders dropped 20% to $240 million, or $1.11 per diluted share versus $1.37 in 2008. Management described these results as unprecedented in the company's history. Airfreight net revenues fell 15%, ocean freight net revenues fell 18%, and customs brokerage net revenues fell 10%. Management also noted that carriers removed capacity and raised prices in the second half of 2009, which the company absorbed before passing costs to customers, pressuring margins. The balance sheet remains very strong. The company ended 2009 with $927 million in cash and short-term investments, no long-term debt, and shareholders' equity of $1.55 billion. Operating cash flow was $331 million, and the company continued to return capital through semi-annual dividends (totaling $0.38 per share) and share repurchases. The company's cost structure is largely variable, and its incentive-based compensation fell 19% in line with profits, which management presents as a built-in cushion during downturns. The key risk for investors is legal exposure. The company is under a U.S. Department of Justice investigation of air cargo freight forwarders, received a European Commission Statement of Objections on February 10, 2010, and is a defendant in a U.S. antitrust class action. Management could not estimate potential losses, and it warned that fines or penalties could have a material impact on financial results. Legal costs are expected to rise in 2010.
Feb 26, 2010
2008
Expeditors International Annual Report, Year Ended Dec 31, 2008
Expeditors International of Washington (EXPD) reported a strong 2008 on the top line and bottom line despite a sharp global downturn in the back half of the year. Total revenues rose 8% to $5.63 billion and net revenues (revenues less freight consolidation costs, the metric management prefers) rose 10% to $1.60 billion. Net earnings grew 12% to $301.0 million and diluted EPS rose 13% to $1.37. Operating income reached $473.1 million, and the operating margin on net revenue held at 29%, flat with 2007, while the company held overhead costs at 71% of net revenue. Management was candid that volumes weakened materially in the second half of 2008. Airfreight and ocean freight volumes fell versus 2007 in that period, and airfreight volumes in the second half were below the first half, which management described as unprecedented in the company's history. Growth was therefore driven largely by higher net revenue per unit, with airfreight net revenue per kilo up 12% against a 4% decline in tonnage. Management said it cannot predict the ongoing impact of the downturn. Cash generation was solid, with operating cash flow of $409 million and a balance sheet holding $741 million in cash and no long-term debt. The main investor overhang is legal. The company is cooperating with a U.S. Department of Justice investigation of air cargo freight forwarders, with roughly $14 million of cumulative costs incurred so far. It is also responding to a European Commission investigation of freight forwarders, and it is a defendant in a federal antitrust class action in New York. Management states it cannot estimate the range of potential loss, and fines could be material to financial position, results and cash flows. The company also raised its dividend and expanded its buyback authorization to 40 million shares, signaling confidence in its capital position.
Feb 27, 2009
2007
Expeditors International Annual Report, Year Ended Dec 31, 2007
Expeditors International of Washington (EXPD) reported a strong fiscal 2007 with total revenues of $5.24 billion (up 13% from $4.63 billion) and net earnings of $269.2 million (up 14.5% from $235.1 million). Diluted EPS rose to $1.21 from $1.06. Net revenues (revenues less freight consolidation costs), the company's preferred measure of underlying business strength, grew 13% to $1.45 billion, and operating income climbed 13% to $423.4 million, with the operating margin on net revenues holding at 29%. Growth was driven by airfreight tonnage (+8% globally), ocean freight container volume (+15%), and a 16% increase in customs brokerage and other services. Management highlights an organic growth strategy supported by incentive-based compensation for branch managers. The balance sheet is conservative: the company carried $575 million in cash and short-term investments, no long-term debt, and working capital of $765 million. Operating cash flow was $313 million, down from $333 million, mainly because receivables grew faster than payables. The company returned capital through $59.7 million in dividends ($0.28 per share, up from $0.22) and $207.6 million in share repurchases, which were designed to offset dilution from option exercises. The primary risk for investors is legal. In October 2007 the U.S. Department of Justice subpoenaed the company in an investigation of alleged anti-competitive behavior among air cargo freight forwarders, and in January 2008 Expeditors was named as one of eight defendants in a federal antitrust class action in New York. The company has incurred about $3.7 million in legal costs so far and says fines or penalties are possible. The filing does not quantify a potential loss, so the outcome is a key uncertainty. Management also flagged 2008 capital expenditures above $85 million and a CFO transition, with the President and COO serving as acting CFO.
Feb 29, 2008
2006
Expeditors International Annual Report, Year Ended Dec 31, 2006
Expeditors International of Washington (EXPD), a non-asset based global logistics provider, delivered a strong 2006. Revenues rose 19% to $4.63 billion, and net revenues (revenues less freight consolidation costs) grew 21% to $1.28 billion. Operating income increased 38% to $375 million, and operating margin on net revenues expanded from 26% to 29%, reflecting strong volume growth (global airfreight tonnage up 18%, ocean FEUs up 20%) and disciplined overhead control, with overhead as a percentage of net revenue falling from 74% to 71%. Net earnings rose 23% to $235 million, and diluted EPS was $1.06 (post 2-for-1 split in June 2006), up from $0.86. The effective tax rate rose to 40.6% from 31.2%, largely because 2005 benefited from a one-time $22 million IRC 965 tax benefit, which compresses year-over-year earnings growth in the tax line. The balance sheet is conservative: the company had no long-term debt, $512 million of cash and short-term investments, and working capital of $633 million. Operating cash flow was $333 million, while capital expenditures roughly doubled to $141 million, including $67 million for a Miami facility and $22 million of real estate development in Seattle and Houston. Management guided 2007 capital spending to about $106 million, to be funded with cash. Shareholder returns were significant: the company repurchased $176 million of stock and paid $47 million in dividends, and the dividend was raised to $0.22 per share from $0.15. Key risks in the filing include dependence on asset-based carriers (airlines and steamship lines), exposure to global trade and currency volatility, quarterly seasonality, and rising cargo security regulation. The company also disclosed a change in stock compensation accounting under SFAS 123R with restated prior periods, and a filing-timeliness box indicating it had not filed all required reports in the preceding 12 months. Investors should weigh the strong operating momentum and cash generation against the elevated effective tax rate and the reliance on carrier relationships and macro trade conditions.
Mar 1, 2007
2005
Expeditors International Annual Report, Year Ended Dec 31, 2005
Expeditors International of Washington (EXPD) closed 2005 with a strong year of growth in its global logistics business. Total revenues rose 18% to $3.90 billion from $3.32 billion, while net revenues (revenues less freight consolidation costs) grew 17% to $1.06 billion. Operating income increased 26% to $304.5 million, and net earnings rose 40% to $218.6 million, or $1.96 per diluted share. Growth was broad-based across airfreight (net revenues up 12%), ocean freight (up 23%) and customs brokerage (up 18%), and same-store net revenue growth of 16% suggests the expansion is largely organic, supported by 12 new full-service offices opened in 2005. The result was helped by a one-time $21.7 million tax benefit under IRC Section 965 tied to a commitment to spend roughly $105 million on qualified capital expenditures, which lowered the effective tax rate to 29.6% from 35.4%. Excluding this benefit, earnings growth was still robust but less dramatic. Management also flagged that the 2006 adoption of SFAS 123R will materially affect reported results, since stock option expense will now be recognized and salary costs as a percentage of net revenues may become more volatile. The balance sheet remains very conservative, with no long-term debt, $464 million in cash and short-term investments, and $914 million in shareholders' equity. Operating cash flow improved to $280 million. Management is returning capital through dividends (raised to $0.30 per share) and share repurchases of about $127 million, and expects 2006 capital expenditures of roughly $165 million, including real estate purchases and development. Key risks include dependence on asset-based carriers, currency controls, customer concentration in retail and just-in-time supply chains, and the cost of evolving security regulations.
Mar 16, 2006
2004
Expeditors International Annual Report, Year Ended Dec 31, 2004
Expeditors International of Washington (EXPD) closed 2004 with a strong year of growth in its non-asset based global logistics business. Total revenues rose 26% to $3.32 billion from $2.62 billion, while net revenues (revenues less freight consolidation costs) grew 21% to $906 million. Operating income increased 29% to $241 million, and net earnings rose 28% to $156 million, or $1.41 per diluted share versus $1.12 in 2003. Growth was broad-based across airfreight (net revenues up 25%), customs brokerage (up 23%), and ocean freight volumes (up 29%, though net revenue rose only 10% due to a 200 basis point yield decline). Same-store net revenue growth of 20% and operating income growth of 29% suggest the growth is largely organic rather than acquisition-driven. The balance sheet is conservative, with $409 million in cash and short-term investments, no long-term debt, and working capital of $522 million. Operating cash flow nearly doubled to $193 million. Management highlighted several items investors should watch. Under SFAS 123R, which takes effect July 1, 2005, the company expects a material charge to earnings from expensing stock options, and salary costs as a percentage of net revenues may become more volatile. The company also expects 2005 capital expenditures above $100 million, including potential investment tied to the American Jobs Creation Act repatriation provisions, which could lower tax expense if the company repatriates foreign earnings. The filing also points to business risks. Revenue is concentrated in international trade flows and dependent on carrier relationships and government customs regulation. Results are seasonal, with the first quarter typically weakest, and the company warns that short-term revenue shortfalls can hit the stock hard. Ocean yields compressed in 2004 as carrier rate increases could not be passed through promptly. The company does not own aircraft or vessels, and it holds $82.7 million in contingent guarantees tied to foreign subsidiaries, though management considers the likelihood of parent-level payment remote.
Mar 16, 2005
2003
Expeditors International Annual Report, Year Ended Dec 31, 2003
Expeditors International of Washington (EXPD) reported a strong fiscal 2003, with revenues rising 14% to $2.62 billion and net earnings up 8% to $122.0 million, or $1.12 diluted EPS (up from $1.03). Growth was driven mainly by customs brokerage (net revenues up 20%) and ocean freight (net revenues up 16% on 23% higher container volumes), while airfreight net revenues fell 2% as yields eroded. Operating income rose 9% to $186.8 million, and operating margin on net revenues held at roughly 25%. Salaries and other operating costs stayed flat as a percentage of net revenues, which management attributes to its branch-level incentive compensation model. The balance sheet remains very strong, with $296 million in cash and short-term investments, no long-term debt, and shareholders' equity up 23% to $645.5 million. Operating cash flow was $114 million, roughly flat year over year, as receivables grew with slower collections from large technology accounts. Investors should note two items affecting 2003 results: a $9.5 million charge to provide U.S. taxes on $41.9 million of previously unremitted foreign earnings, and an $8 million tax reversal recognized in the fourth quarter. Management also flagged risks tied to carrier pricing, currency exposure, and the difficulty of forecasting short-term customer demand. For investors, the filing describes a non-asset-based, organically grown global forwarder with a conservative capital structure and a consistent record of dividend increases and share repurchases. Key watch items going forward include airfreight yield pressure, ocean rate volatility, and whether the branch-level compensation model can keep costs proportional to revenue as volumes grow.
Mar 15, 2004
2002
Expeditors International Annual Report, Year Ended Dec 31, 2002
Expeditors International of Washington (EXPD) delivered a strong 2002, with total revenues up 22% to $2.30 billion (from $1.88 billion) and net revenues (the company's preferred yield-based measure) up 12.5% to $682.2 million. Net earnings rose 16% to $112.5 million, and diluted EPS increased to $1.03 from $0.89, after adjusting for the June 2002 2-for-1 stock split. Operating income grew 17% to $171.0 million, and operating margin on net revenues edged up to 25% from 24%. Growth was broad-based across airfreight (net revenues +12%), ocean freight (+18%), and customs brokerage (+9%), with same-store net revenue growth of 12% and same-store operating income growth of 16%. Management attributes results to its non-asset-based model and incentive compensation structure tied to branch profits. The balance sheet remains conservative, with no long-term debt, $212 million in cash and short-term investments, and working capital of $249 million. Shareholders' equity rose 26% to $524 million. Operating cash flow fell to $116 million from $168 million, mainly because of a $99 million increase in receivables tied to strong peak-season billings and customs cash advances. Capital spending roughly doubled to $81 million, including about $59 million for real estate in New Jersey and London and a $31 million escrow payment for a San Francisco facility that closed in January 2003. Key risks for investors include currency controls in certain countries, dependence on third-party carriers whose pricing and capacity could shift, seasonal quarterly patterns, and the ongoing consolidation of the logistics industry. Airfreight margins compressed about 2% due to carrier rate increases, and ocean margins fell 1% amid falling Far East rates. Interest income declined by $2.9 million as rates fell, and the company recorded a $3.5 million impairment charge on other assets in Q4 2002.
Mar 28, 2003
2001
Expeditors International Annual Report, Year Ended Dec 31, 2001
Expeditors International of Washington (EXPD) reported a strong fiscal 2001 despite a sharp downturn in global air freight volumes. Revenues fell about 2.5% to $1.65 billion from $1.70 billion, but net revenues (revenues less freight consolidation costs, the metric management emphasizes) rose 11% to $606.5 million. Net earnings climbed 17% to $97.2 million, and diluted EPS rose to $1.77 from $1.52. Operating margin on net revenues improved to 24% from 23%, driven by cost containment in other operating expenses and a 21% increase in ocean freight net revenues, which offset a 13% airfreight net revenue gain despite a 9% drop in worldwide airfreight tonnage. The balance sheet remains very conservative. The company ended 2001 with $219 million in cash and short-term investments, no long-term debt, and shareholders' equity of $415 million, up 15%. Operating cash flow rose to $168 million, and the company repurchased about $60 million of stock, including a 1 million share discretionary buyback at an average of $45.12. The dividend was raised to $0.20 per share for the year from $0.14. Key considerations for investors include the company's heavy dependence on Far East trade lanes (Hong Kong and Taiwan each contributed over 10% of revenue), its non-asset-based model that relies on third-party carriers, currency and political risks across many emerging markets, and the seasonality of quarterly results. Same-store net revenue growth slowed sharply to 7% in 2001 from 23% in 2000, which suggests that the 2001 growth was more dependent on new office openings and margin gains than on organic volume expansion.
Apr 1, 2002
2000
Expeditors International Annual Report, Year Ended Dec 31, 2000
Expeditors International of Washington, Inc. (EXPD) operates as a global logistics provider, specializing in airfreight, ocean freight, and customs brokerage services. For the fiscal year ended December 31, 2000, the company demonstrated strong growth, with total revenues reaching $1.695 billion, a significant increase from $1.445 billion in 1999. This growth was driven by robust performance across all its service segments, particularly airfreight and ocean freight, which benefited from increased shipments, higher carrier rates, and expanded market share. The company's financial health appears solid, with net earnings of $83 million in 2000, up from $59 million in 1999. This profitability is supported by effective cost management, with salaries and related costs remaining a consistent percentage of net revenues, attributed to an incentive-based compensation philosophy and operational improvements. EXPD also maintained a strong liquidity position, with significant cash generated from operations and no long-term debt at the end of the fiscal year. The company's strategic focus on organic growth supplemented by selective acquisitions, coupled with a commitment to technological advancement and customer service, positions it well within the competitive global logistics landscape.
Apr 2, 2001
1995
Expeditors International Annual Report, Year Ended Dec 31, 1995
Expeditors International of Washington (EXPD) reported a strong 1995 for its FY ended December 31, 1995. Total revenues rose about 30% to $584.7 million (from $450.6 million), and net earnings grew about 32% to $17.4 million, or $1.38 per share (from $1.08). Operating income climbed 26% to $26.9 million. Growth was broad-based across airfreight, ocean freight, and customs brokerage, with ocean freight net revenues up 56% and airfreight net revenues up 27%. Because net revenues (revenues less freight consolidation costs) are the more meaningful measure of the business, net revenues rose 29% to $154.1 million, and operating margin on net revenues improved to 17% from 18%, which is roughly flat. Management attributes the results to a compensation model that ties branch staff pay to unit profitability, along with an expanding global office network, particularly in Latin America and Europe. The balance sheet is conservative. The company had no long-term debt at year-end, working capital of $81.4 million, and cash plus short-term investments of about $37 million. Shareholders' equity grew to $117.2 million, and the company generated $23.5 million of operating cash flow. Accounts receivable, at $123.8 million, is the largest asset and grew faster than revenue, which is a point to watch. The effective tax rate fell to 38.7% from 41%, partly because of lower California unitary taxes. The company paid a semi-annual dividend totaling $0.12 per share. Key risks flagged in the filing include currency controls in many countries where the company cannot easily hedge, dependence on airlines and ocean carriers, pronounced seasonality (Q1 weakest, Q3 strongest), concentration of revenue in consumer-demand-linked industries, and the possibility that airline rate increases could compress air freight margins. The company does not own aircraft or vessels and does not compete in domestic freight or small parcel. Competition is intense, and management expects continued industry consolidation. The filing also notes a 2-for-1 stock split in 1993 and an active small buyback under a non-discretionary repurchase plan.
Apr 1, 1996