10-KPeriod: FY2013

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Annual Report, Year Ended Dec 31, 2013

Filed February 27, 2014For Securities:EXPD

Summary

Expeditors International of Washington Inc. (EXPD) reported solid financial performance for the fiscal year ending December 31, 2013. The company, a non-asset-based global logistics provider, generated total revenues of $6.08 billion, with net revenues (a non-GAAP measure) of $1.88 billion. Net earnings attributable to shareholders were $348.5 million, or $1.68 per diluted share. The company's diversified revenue streams include airfreight services, ocean freight and ocean services, and customs brokerage and other services. While airfreight and ocean freight are subject to market rate volatility and carrier capacity constraints, the customs brokerage segment showed consistent growth. EXPD continues to emphasize its organic growth strategy, supplemented by select acquisitions, and relies heavily on its skilled personnel and sophisticated technology solutions to maintain a competitive edge in the intensely competitive global logistics market.

Financial Highlights

44 data points
Beta

Revenue

$6.08B

Net Income

$348.53M

5.7% Net Margin

EPS (Diluted)

$1.68

Total Assets

$3.01B

Cash & Equivalents

$1.25B

Free Cash Flow

$407.54M

Financial Statements
Beta
Revenue$6.08B
Operating Expenses$5.53B
Operating Income$552.07M
Net Income$348.53M
EPS (Basic)$1.69
EPS (Diluted)$1.68
Shares Outstanding (Basic)206.00M
Shares Outstanding (Diluted)206.90M

Key Highlights

  • 1Net revenues for 2013 were $1.88 billion, a 2.6% increase from $1.835 billion in 2012.
  • 2Net earnings attributable to shareholders reached $348.5 million in 2013, up from $333.4 million in 2012.
  • 3Diluted earnings per share were $1.68 in 2013, an increase from $1.57 in 2012.
  • 4The company declared and paid semi-annual dividends of $0.30 per share in 2013.
  • 5EXPD repurchased a total of 3,165,670 shares of common stock in the fourth quarter of 2013 under its repurchase plans.
  • 6The company has a strong liquidity position with $1.274 billion in cash and cash equivalents and short-term investments as of December 31, 2013, and no long-term debt.
  • 7Overhead expenses, including salaries and related costs, represented 71% of net revenues in 2013, consistent with 2012.

Frequently Asked Questions

Expeditors International provides a comprehensive range of global logistics services, including air and ocean freight consolidation and forwarding, customs clearance, warehousing and distribution, order management, and time-definite transportation services. They do not compete in the overnight courier or small parcel business and do not own aircraft or steamships.

Expeditors generates revenue from three main sources: airfreight services, ocean freight and ocean services, and customs brokerage and other services. 'Net revenue' is a non-GAAP measure calculated as total revenues less directly related operating expenses. For freight services, it represents the difference between the rates billed to customers and the costs paid to carriers, reflecting the company's margin on these services. For customs brokerage and other services, net revenue is essentially the total revenue as these are primarily fee-based.

Key risks include dependence on third-party service providers (airlines, ocean carriers), fluctuations in international trade due to economic and political factors, currency exchange rate volatility, increasing regulatory complexity (especially in customs and security), intense competition, and the reliance on skilled personnel. The company also highlights the unpredictability of short-term customer demands and the potential impact of catastrophic events on its operations.

Expeditors primarily focuses on organic growth supplemented by certain strategic acquisitions. The company emphasizes building and retaining superior personnel and fostering a consistent global corporate culture centered on customer service, compliance, and employee development, rather than aggressive growth through acquisition.