Washington | 000-13468 | 91-1069248 | ||
(State or other jurisdiction of | (Commission File No.) | (IRS Employer Identification Number) | ||
incorporation or organization) | ||||
1015 Third Avenue, 12th Floor, Seattle, Washington | 98104 | |||
(Address of principal executive offices) | (Zip Code) | |||
(206) 674-3400 | ||||
(Registrant's telephone number, including area code) | ||||
N/A | ||||
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
CONTACTS: | R. Jordan Gates Bradley S. Powell |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||
2011 | 2010 | % Increase (Decrease) | 2011 | 2010 | % Increase | ||||||||||||||
Revenues | $ | 1,606,368 | $ | 1,667,559 | (4)% | $ | 4,648,584 | $ | 4,385,438 | 6% | |||||||||
Net revenues | $ | 493,846 | $ | 458,743 | 8% | $ | 1,420,322 | $ | 1,239,424 | 15% | |||||||||
Operating income | $ | 163,758 | $ | 159,621 | 3% | $ | 463,263 | $ | 398,658 | 16% | |||||||||
Net earnings attributable to shareholders1 | $ | 106,604 | $ | 96,105 | 11% | $ | 292,836 | $ | 247,670 | 18% | |||||||||
Diluted earnings attributable to shareholders | $ | .50 | $ | .44 | 14% | $ | 1.36 | $ | 1.14 | 19% | |||||||||
Basic earnings attributable to shareholders | $ | .50 | $ | .45 | 11% | $ | 1.38 | $ | 1.17 | 18% | |||||||||
Diluted weighted average shares outstanding | 214,717,451 | 216,342,380 | 215,376,675 | 216,497,838 | |||||||||||||||
Basic weighted average shares outstanding | 212,256,119 | 212,392,286 | 212,160,994 | 212,306,521 |
Employee headcount as of September 30, | |||||
2011 | 2010 | ||||
North America | 4,631 | 4,325 | |||
Asia Pacific | 4,094 | 3,851 | |||
Europe and Africa | 2,227 | 2,057 | |||
Middle East | 1,233 | 1,133 | |||
South America | 631 | 596 | |||
Information Systems | 552 | 573 | |||
Corporate | 215 | 189 | |||
Total | 13,583 | 12,724 |
Year-over-year percentage increase (decrease) in: | ||||||
Airfreight kilos | Ocean freight FEU | |||||
2011 | ||||||
July | (8 | )% | (4 | )% | ||
August | (2 | )% | (2 | )% | ||
September | (5 | )% | — | % | ||
Quarter | (4 | )% | (2 | )% |
September 30, 2011 | December 31, 2010 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,260,814 | $ | 1,084,465 | |||
Short-term investments | 483 | 524 | |||||
Accounts receivable, net | 997,705 | 1,003,884 | |||||
Deferred Federal and state income taxes | 10,161 | 8,706 | |||||
Other current assets | 43,450 | 42,776 | |||||
Total current assets | 2,312,613 | 2,140,355 | |||||
Property and equipment, net | 528,852 | 498,648 | |||||
Goodwill, net | 7,927 | 7,927 | |||||
Other intangibles, net | 2,916 | 3,716 | |||||
Other assets, net | 30,861 | 28,533 | |||||
$ | 2,883,169 | $ | 2,679,179 | ||||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | 655,092 | 652,161 | |||||
Accrued expenses, primarily salaries and related costs | 178,175 | 177,869 | |||||
Federal, state and foreign income taxes | 32,234 | 31,948 | |||||
Total current liabilities | 865,501 | 861,978 | |||||
Deferred Federal and state income taxes | 55,610 | 69,047 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity: | |||||||
Preferred stock; none issued | — | — | |||||
Common stock, par value $.01 per share. Issued and outstanding 211,979,262 shares at September 30, 2011 and 212,047,774 shares at December 31, 2010 | 2,120 | 2,120 | |||||
Additional paid-in capital | 3,641 | 13,412 | |||||
Retained earnings | 1,951,375 | 1,717,249 | |||||
Accumulated other comprehensive (loss) income | (1,417 | ) | 8,125 | ||||
Total shareholders’ equity | 1,955,719 | 1,740,906 | |||||
Noncontrolling interest | 6,339 | 7,248 | |||||
Total equity | 1,962,058 | 1,748,154 | |||||
$ | 2,883,169 | $ | 2,679,179 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Revenues: | |||||||||||||||
Airfreight services | $ | 736,946 | $ | 751,555 | $ | 2,187,730 | $ | 2,043,819 | |||||||
Ocean freight and ocean services | 510,521 | 599,280 | 1,437,493 | 1,474,137 | |||||||||||
Customs brokerage and other services | 358,901 | 316,724 | 1,023,361 | 867,482 | |||||||||||
Total revenues | 1,606,368 | 1,667,559 | 4,648,584 | 4,385,438 | |||||||||||
Operating Expenses: | |||||||||||||||
Airfreight consolidation | 558,047 | 578,924 | 1,658,963 | 1,577,289 | |||||||||||
Ocean freight consolidation | 392,249 | 488,808 | 1,109,603 | 1,190,627 | |||||||||||
Customs brokerage and other services | 162,226 | 141,084 | 459,696 | 378,098 | |||||||||||
Salaries and related costs | 258,512 | 235,357 | 745,441 | 656,310 | |||||||||||
Rent and occupancy costs | 21,352 | 19,295 | 64,087 | 57,221 | |||||||||||
Depreciation and amortization | 9,199 | 9,085 | 27,630 | 27,590 | |||||||||||
Selling and promotion | 9,342 | 7,877 | 28,527 | 22,462 | |||||||||||
Other | 31,683 | 27,508 | 91,374 | 77,183 | |||||||||||
Total operating expenses | 1,442,610 | 1,507,938 | 4,185,321 | 3,986,780 | |||||||||||
Operating income | 163,758 | 159,621 | 463,263 | 398,658 | |||||||||||
Interest income | 2,888 | 1,679 | 7,520 | 4,938 | |||||||||||
Interest expense | (279 | ) | (140 | ) | (722 | ) | (378 | ) | |||||||
Other, net | 10,792 | (1,666 | ) | 12,766 | 9,231 | ||||||||||
Other income (expense), net | 13,401 | (127 | ) | 19,564 | 13,791 | ||||||||||
Earnings before income taxes | 177,159 | 159,494 | 482,827 | 412,449 | |||||||||||
Income tax expense | 70,283 | 63,456 | 189,724 | 164,692 | |||||||||||
Net earnings | 106,876 | 96,038 | 293,103 | 247,757 | |||||||||||
Less: net earnings (losses) attributable to the noncontrolling interest | 272 | (67 | ) | 267 | 87 | ||||||||||
Net earnings attributable to shareholders | $ | 106,604 | $ | 96,105 | $ | 292,836 | $ | 247,670 | |||||||
Diluted earnings attributable to shareholders per share | $ | .50 | $ | .44 | $ | 1.36 | $ | 1.14 | |||||||
Basic earnings attributable to shareholders per share | $ | .50 | $ | .45 | $ | 1.38 | $ | 1.17 | |||||||
Dividends declared and paid per common share | $ | — | $ | — | $ | .25 | $ | .20 | |||||||
Weighted average diluted shares outstanding | 214,717,451 | 216,342,380 | 215,376,675 | 216,497,838 | |||||||||||
Weighted average basic shares outstanding | 212,256,119 | 212,392,286 | 212,160,994 | 212,306,521 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Operating Activities: | |||||||||||||||
Net earnings | $ | 106,876 | $ | 96,038 | $ | 293,103 | $ | 247,757 | |||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||
Provision for losses on accounts receivable | (629 | ) | 1,284 | 1,161 | 3,109 | ||||||||||
Deferred income tax (benefit) expense | (9,328 | ) | (565 | ) | (9,663 | ) | 2,521 | ||||||||
Excess tax benefits from stock plans | (537 | ) | (3,470 | ) | (5,068 | ) | (11,589 | ) | |||||||
Stock compensation expense | 12,738 | 10,846 | 33,446 | 33,047 | |||||||||||
Depreciation and amortization | 9,199 | 9,085 | 27,630 | 27,590 | |||||||||||
Gain on sale of assets | (3 | ) | (57 | ) | (54 | ) | (461 | ) | |||||||
Other | 1,210 | 387 | 1,828 | 1,232 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Increase in accounts receivable | (4,312 | ) | (34,203 | ) | (11,802 | ) | (266,770 | ) | |||||||
Increase in other current assets | (8,344 | ) | (4,095 | ) | (5,863 | ) | (2,959 | ) | |||||||
(Decrease) increase in accounts payable and accrued expenses | (24,070 | ) | 25,330 | 14,060 | 190,440 | ||||||||||
Increase in income taxes payable, net | 10,505 | 12,438 | 10,417 | 36,770 | |||||||||||
Net cash provided by operating activities | 93,305 | 113,018 | 349,195 | 260,687 | |||||||||||
Investing Activities: | |||||||||||||||
Decrease in short-term investments | 561 | 137 | 23 | 107 | |||||||||||
Purchase of property and equipment | (20,619 | ) | (10,953 | ) | (58,854 | ) | (26,653 | ) | |||||||
Proceeds from sale of property and equipment | 24 | 98 | 109 | 268 | |||||||||||
Other | (1,193 | ) | 1,208 | (2,699 | ) | 313 | |||||||||
Net cash used in investing activities | (21,227 | ) | (9,510 | ) | (61,421 | ) | (25,965 | ) | |||||||
Financing Activities: | |||||||||||||||
Proceeds from issuance of common stock | 30,966 | 37,718 | 54,591 | 60,958 | |||||||||||
Repurchases of common stock | (43,298 | ) | (67,782 | ) | (108,572 | ) | (139,450 | ) | |||||||
Excess tax benefits from stock plans | 537 | 3,470 | 5,068 | 11,589 | |||||||||||
Dividends paid | — | — | (53,014 | ) | (42,397 | ) | |||||||||
Distribution to noncontrolling interest | (822 | ) | (963 | ) | (822 | ) | (963 | ) | |||||||
Net cash used in financing activities | (12,617 | ) | (27,557 | ) | (102,749 | ) | (110,263 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (24,477 | ) | 20,975 | (8,676 | ) | 6,838 | |||||||||
Increase in cash and cash equivalents | 34,984 | 96,926 | 176,349 | 131,297 | |||||||||||
Cash and cash equivalents at beginning of period | 1,225,830 | 960,300 | 1,084,465 | 925,929 | |||||||||||
Cash and cash equivalents at end of period | $ | 1,260,814 | $ | 1,057,226 | $ | 1,260,814 | $ | 1,057,226 | |||||||
Interest and taxes paid: | |||||||||||||||
Interest | $ | 48 | $ | 9 | $ | 65 | $ | 53 | |||||||
Income taxes | 65,856 | 52,407 | 183,167 | 129,249 |
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | ASIA PACIFIC | EUROPE and AFRICA | MIDDLE EAST and INDIA | ELIMI- NATIONS | CONSOLI- DATED | |||||||||||||||||
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 | 426,164 | 146,652 | 92,668 | (22,412 | ) | 1,962,058 | ||||||||||||||
Three months ended September 30, 2010: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 361,120 | 43,380 | 20,400 | 968,858 | 190,350 | 83,451 | — | 1,667,559 | |||||||||||||||
Transfers between geographic areas | 28,571 | 3,567 | 4,190 | 8,593 | 11,045 | 4,448 | (60,414 | ) | — | |||||||||||||||
Total revenues | $ | 389,691 | 46,947 | 24,590 | 977,451 | 201,395 | 87,899 | (60,414 | ) | 1,667,559 | ||||||||||||||
Net revenues | $ | 179,290 | 20,911 | 13,181 | 153,241 | 68,158 | 23,962 | — | 458,743 | |||||||||||||||
Operating income | $ | 61,735 | 6,846 | 3,837 | 64,046 | 17,128 | 6,029 | — | 159,621 | |||||||||||||||
Identifiable assets | $ | 1,437,318 | 78,347 | 48,887 | 574,216 | 433,020 | 139,478 | 4,917 | 2,716,183 | |||||||||||||||
Capital expenditures | $ | 5,297 | 92 | 354 | 1,853 | 2,963 | 394 | — | 10,953 | |||||||||||||||
Depreciation and amortization | $ | 4,882 | 316 | 223 | 1,871 | 1,184 | 609 | — | 9,085 | |||||||||||||||
Equity | $ | 1,121,817 | 40,708 | 23,974 | 346,210 | 155,428 | 80,774 | (32,793 | ) | 1,736,118 |
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | ASIA PACIFIC | EUROPE and AFRICA | MIDDLE EAST and INDIA | ELIMI- NATIONS | CONSOLI- DATED | |||||||||||||||||
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 | 426,164 | 146,652 | 92,668 | (22,412 | ) | 1,962,058 | ||||||||||||||
Nine months ended September 30, 2010: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 979,675 | 120,667 | 55,317 | 2,482,116 | 525,064 | 222,599 | — | 4,385,438 | |||||||||||||||
Transfers between geographic areas | 72,743 | 7,722 | 12,082 | 23,861 | 29,407 | 11,918 | (157,733 | ) | — | |||||||||||||||
Total revenues | $ | 1,052,418 | 128,389 | 67,399 | 2,505,977 | 554,471 | 234,517 | (157,733 | ) | 4,385,438 | ||||||||||||||
Net revenues | $ | 489,231 | 56,757 | 37,428 | 397,678 | 192,135 | 66,195 | — | 1,239,424 | |||||||||||||||
Operating income | $ | 152,425 | 16,317 | 11,155 | 158,938 | 43,870 | 15,953 | — | 398,658 | |||||||||||||||
Identifiable assets | $ | 1,437,318 | 78,347 | 48,887 | 574,216 | 433,020 | 139,478 | 4,917 | 2,716,183 | |||||||||||||||
Capital expenditures | $ | 13,137 | 417 | 988 | 3,967 | 6,415 | 1,729 | — | 26,653 | |||||||||||||||
Depreciation and amortization | $ | 14,753 | 1,023 | 639 | 5,626 | 3,721 | 1,828 | — | 27,590 | |||||||||||||||
Equity | $ | 1,121,817 | 40,708 | 23,974 | 346,210 | 155,428 | 80,774 | (32,793 | ) | 1,736,118 |
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