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, | ||||||||||||||||||
2012 | 2011 | % | 2012 | 2011 | % | ||||||||||||||
Revenues | $ | 1,531,664 | $ | 1,606,368 | (5)% | $ | 4,447,986 | $ | 4,648,584 | (4)% | |||||||||
Net revenues | $ | 465,138 | $ | 493,846 | (6)% | $ | 1,365,360 | $ | 1,420,322 | (4)% | |||||||||
Operating income | $ | 145,099 | $ | 163,758 | (11)% | $ | 402,773 | $ | 463,263 | (13)% | |||||||||
Net earnings attributable to shareholders | $ | 88,490 | $ | 106,604 | (17)% | $ | 249,152 | $ | 292,836 | (15)% | |||||||||
Diluted earnings attributable to shareholders | $ | .42 | $ | .50 | (16)% | $ | 1.17 | $ | 1.36 | (14)% | |||||||||
Basic earnings attributable to shareholders | $ | .42 | $ | .50 | (16)% | $ | 1.18 | $ | 1.38 | (14)% | |||||||||
Diluted weighted average shares outstanding | 211,397,602 | 214,717,451 | 212,916,309 | 215,376,675 | |||||||||||||||
Basic weighted average shares outstanding | 210,135,763 | 212,256,119 | 211,314,850 | 212,160,994 |
Employee headcount as of September 30, | |||||
2012 | 2011 | ||||
North America | 4,786 | 4,631 | |||
Asia Pacific | 3,936 | 4,094 | |||
Europe and Africa | 2,336 | 2,227 | |||
Middle East | 1,249 | 1,233 | |||
South America | 683 | 631 | |||
Information Systems | 603 | 552 | |||
Corporate | 241 | 215 | |||
Total | 13,834 | 13,583 |
Year-over-year percentage decrease in: | ||||||
Airfreight kilos | Ocean freight FEU | |||||
2012 | ||||||
July | (19 | )% | (3 | )% | ||
August | (7 | )% | (6 | )% | ||
September | (2 | )% | (2 | )% | ||
Quarter | (9 | )% | (4 | )% |
September 30, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,367,642 | $ | 1,294,356 | |||
Accounts receivable, net | 1,015,350 | 934,752 | |||||
Deferred Federal and state income taxes | 10,955 | 10,415 | |||||
Other current assets | 46,048 | 47,360 | |||||
Total current assets | 2,439,995 | 2,286,883 | |||||
Property and equipment, net | 551,610 | 538,806 | |||||
Goodwill and other intangibles, net | 9,774 | 10,557 | |||||
Other assets, net | 30,808 | 30,581 | |||||
$ | 3,032,187 | $ | 2,866,827 | ||||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | 667,395 | 606,628 | |||||
Accrued expenses, primarily salaries and related costs | 174,862 | 169,445 | |||||
Federal, state and foreign income taxes | 23,943 | 20,072 | |||||
Total current liabilities | 866,200 | 796,145 | |||||
Deferred Federal and state income taxes | 70,288 | 60,613 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity: | |||||||
Preferred stock; none issued | — | — | |||||
Common stock, par value $.01 per share; issued and outstanding 208,950,205 shares at September 30, 2012 and 212,003,662 shares at December 31, 2011 | 2,090 | 2,120 | |||||
Additional paid-in capital | 118 | 13,260 | |||||
Retained earnings | 2,082,542 | 1,991,222 | |||||
Accumulated other comprehensive income (loss) | 5,267 | (2,964 | ) | ||||
Total shareholders’ equity | 2,090,017 | 2,003,638 | |||||
Noncontrolling interest | 5,682 | 6,431 | |||||
Total equity | 2,095,699 | 2,010,069 | |||||
$ | 3,032,187 | $ | 2,866,827 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: | |||||||||||||||
Airfreight services | $ | 622,678 | $ | 736,946 | $ | 1,900,131 | $ | 2,187,730 | |||||||
Ocean freight and ocean services | 549,250 | 510,521 | 1,502,584 | 1,437,493 | |||||||||||
Customs brokerage and other services | 359,736 | 358,901 | 1,045,271 | 1,023,361 | |||||||||||
Total revenues | 1,531,664 | 1,606,368 | 4,447,986 | 4,648,584 | |||||||||||
Operating Expenses: | |||||||||||||||
Airfreight consolidation | 471,947 | 558,047 | 1,437,301 | 1,658,963 | |||||||||||
Ocean freight consolidation | 432,518 | 392,249 | 1,177,919 | 1,109,603 | |||||||||||
Customs brokerage and other services | 162,061 | 162,226 | 467,406 | 459,696 | |||||||||||
Salaries and related costs | 252,899 | 258,512 | 748,956 | 745,441 | |||||||||||
Rent and occupancy costs | 21,304 | 21,352 | 63,333 | 64,087 | |||||||||||
Depreciation and amortization | 10,030 | 9,199 | 29,245 | 27,630 | |||||||||||
Selling and promotion | 7,847 | 9,342 | 25,370 | 28,527 | |||||||||||
Other | 27,959 | 31,683 | 95,683 | 91,374 | |||||||||||
Total operating expenses | 1,386,565 | 1,442,610 | 4,045,213 | 4,185,321 | |||||||||||
Operating income | 145,099 | 163,758 | 402,773 | 463,263 | |||||||||||
Interest income | 2,831 | 2,888 | 9,241 | 7,520 | |||||||||||
Interest expense | (182 | ) | (279 | ) | (1,024 | ) | (722 | ) | |||||||
Other, net | 1,232 | 10,792 | 6,011 | 12,766 | |||||||||||
Other income, net | 3,881 | 13,401 | 14,228 | 19,564 | |||||||||||
Earnings before income taxes | 148,980 | 177,159 | 417,001 | 482,827 | |||||||||||
Income tax expense | 60,253 | 70,283 | 167,531 | 189,724 | |||||||||||
Net earnings | 88,727 | 106,876 | 249,470 | 293,103 | |||||||||||
Less net earnings attributable to the noncontrolling interest | 237 | 272 | 318 | 267 | |||||||||||
Net earnings attributable to shareholders | $ | 88,490 | $ | 106,604 | $ | 249,152 | $ | 292,836 | |||||||
Diluted earnings attributable to shareholders per share | $ | .42 | $ | .50 | $ | 1.17 | $ | 1.36 | |||||||
Basic earnings attributable to shareholders per share | $ | .42 | $ | .50 | $ | 1.18 | $ | 1.38 | |||||||
Dividends declared and paid per common share | $ | — | $ | — | $ | .28 | $ | .25 | |||||||
Weighted average diluted shares outstanding | 211,397,602 | 214,717,451 | 212,916,309 | 215,376,675 | |||||||||||
Weighted average basic shares outstanding | 210,135,763 | 212,256,119 | 211,314,850 | 212,160,994 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Operating Activities: | |||||||||||||||
Net earnings | $ | 88,727 | $ | 106,876 | $ | 249,470 | $ | 293,103 | |||||||
Adjustments to reconcile net earnings to net cash from operating activities: | |||||||||||||||
Provision for losses on accounts receivable | 463 | (629 | ) | (392 | ) | 1,161 | |||||||||
Deferred income tax expense (benefit) | 4,588 | (9,328 | ) | 4,330 | (9,663 | ) | |||||||||
Excess tax benefits from stock plans | (59 | ) | (537 | ) | (4,291 | ) | (5,068 | ) | |||||||
Stock compensation expense | 11,320 | 12,738 | 32,846 | 33,446 | |||||||||||
Depreciation and amortization | 10,030 | 9,199 | 29,245 | 27,630 | |||||||||||
Gain on sale of assets | (13 | ) | (3 | ) | (143 | ) | (54 | ) | |||||||
Other | 1,273 | 1,210 | 1,826 | 1,828 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Increase in accounts receivable | (23,520 | ) | (4,312 | ) | (73,812 | ) | (11,802 | ) | |||||||
Increase in other current assets | (7,195 | ) | (8,344 | ) | (3,629 | ) | (5,863 | ) | |||||||
(Decrease) increase in accounts payable and accrued expenses | (23,267 | ) | (24,070 | ) | 60,966 | 14,060 | |||||||||
Increase in income taxes payable, net | 6,819 | 10,505 | 12,961 | 10,417 | |||||||||||
Net cash from operating activities | 69,166 | 93,305 | 309,377 | 349,195 | |||||||||||
Investing Activities: | |||||||||||||||
Purchase of property and equipment | (10,170 | ) | (20,619 | ) | (37,072 | ) | (58,854 | ) | |||||||
Proceeds from sale of property and equipment | 41 | 24 | 294 | 109 | |||||||||||
Other, net | (32 | ) | (632 | ) | 192 | (2,676 | ) | ||||||||
Net cash from investing activities | (10,161 | ) | (21,227 | ) | (36,586 | ) | (61,421 | ) | |||||||
Financing Activities: | |||||||||||||||
Proceeds from issuance of common stock | 24,599 | 30,966 | 45,001 | 54,591 | |||||||||||
Repurchases of common stock | (87,227 | ) | (43,298 | ) | (193,493 | ) | (108,572 | ) | |||||||
Excess tax benefits from stock plans | 59 | 537 | 4,291 | 5,068 | |||||||||||
Dividends paid | — | — | (59,358 | ) | (53,014 | ) | |||||||||
Distributions to noncontrolling interest | (1,177 | ) | (822 | ) | (1,177 | ) | (822 | ) | |||||||
Net cash from financing activities | (63,746 | ) | (12,617 | ) | (204,736 | ) | (102,749 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 8,136 | (24,477 | ) | 5,231 | (8,676 | ) | |||||||||
Increase in cash and cash equivalents | 3,395 | 34,984 | 73,286 | 176,349 | |||||||||||
Cash and cash equivalents at beginning of period | 1,364,247 | 1,225,830 | 1,294,356 | 1,084,465 | |||||||||||
Cash and cash equivalents at end of period | $ | 1,367,642 | $ | 1,260,814 | $ | 1,367,642 | $ | 1,260,814 | |||||||
Interest and taxes paid: | |||||||||||||||
Interest | $ | 27 | $ | 48 | $ | 447 | $ | 65 | |||||||
Income taxes | 50,911 | 65,856 | 155,006 | 183,167 |
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, 2012: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 383,830 | 50,208 | 20,815 | 804,855 | 198,124 | 73,832 | — | 1,531,664 | |||||||||||||||
Transfers between geographic areas | 24,423 | 2,677 | 4,140 | 10,676 | 9,624 | 4,507 | (56,047 | ) | — | |||||||||||||||
Total revenues | $ | 408,253 | 52,885 | 24,955 | 815,531 | 207,748 | 78,339 | (56,047 | ) | 1,531,664 | ||||||||||||||
Net revenues | $ | 187,737 | 23,412 | 13,978 | 146,992 | 69,841 | 23,178 | — | 465,138 | |||||||||||||||
Operating income | $ | 56,096 | 6,886 | 4,239 | 59,620 | 13,312 | 4,946 | — | 145,099 | |||||||||||||||
Identifiable assets | $ | 1,570,615 | 102,020 | 58,687 | 714,982 | 423,488 | 162,225 | 170 | 3,032,187 | |||||||||||||||
Capital expenditures | $ | 5,681 | 222 | 405 | 1,934 | 1,476 | 452 | — | 10,170 | |||||||||||||||
Depreciation and amortization | $ | 5,942 | 188 | 220 | 1,691 | 1,555 | 434 | — | 10,030 | |||||||||||||||
Equity | $ | 1,281,250 | 58,471 | 33,444 | 499,590 | 158,939 | 96,621 | (32,616 | ) | 2,095,699 | ||||||||||||||
Three months ended September 30, 2011: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 388,736 | 49,341 | 21,353 | 839,069 | 229,776 | 78,093 | — | 1,606,368 | |||||||||||||||
Transfers between geographic areas | 27,161 | 2,989 | 5,025 | 10,500 | 10,727 | 4,596 | (60,998 | ) | — | |||||||||||||||
Total revenues | $ | 415,897 | 52,330 | 26,378 | 849,569 | 240,503 | 82,689 | (60,998 | ) | 1,606,368 | ||||||||||||||
Net revenues | $ | 189,381 | 23,783 | 15,035 | 162,785 | 77,768 | 25,094 | — | 493,846 | |||||||||||||||
Operating income | $ | 57,564 | 7,345 | 4,846 | 69,001 | 18,616 | 6,386 | — | 163,758 | |||||||||||||||
Identifiable assets | $ | 1,509,393 | 87,554 | 52,058 | 667,421 | 414,991 | 149,253 | 2,499 | 2,883,169 | |||||||||||||||
Capital expenditures | $ | 7,435 | 315 | 162 | 7,201 | 4,981 | 525 | — | 20,619 | |||||||||||||||
Depreciation and amortization | $ | 4,904 | 250 | 240 | 1,822 | 1,488 | 495 | — | 9,199 | |||||||||||||||
Equity | $ | 1,242,594 | 49,134 | 27,258 | 435,466 | 146,652 | 92,668 | (31,714 | ) | 1,962,058 |
Nine months ended September 30, 2012: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 1,140,258 | 149,964 | 61,450 | 2,273,783 | 606,696 | 215,835 | — | 4,447,986 | |||||||||||||||
Transfers between geographic areas | 69,135 | 7,608 | 14,010 | 32,686 | 28,694 | 13,828 | (165,961 | ) | — | |||||||||||||||
Total revenues | $ | 1,209,393 | 157,572 | 75,460 | 2,306,469 | 635,390 | 229,663 | (165,961 | ) | 4,447,986 | ||||||||||||||
Net revenues | $ | 551,503 | 70,769 | 43,537 | 414,714 | 212,871 | 71,966 | — | 1,365,360 | |||||||||||||||
Operating income | $ | 150,814 | 21,340 | 13,119 | 158,626 | 40,510 | 18,364 | — | 402,773 | |||||||||||||||
Identifiable assets | $ | 1,570,615 | 102,020 | 58,687 | 714,982 | 423,488 | 162,225 | 170 | 3,032,187 | |||||||||||||||
Capital expenditures | $ | 20,676 | 551 | 1,060 | 9,823 | 3,529 | 1,433 | — | 37,072 | |||||||||||||||
Depreciation and amortization | $ | 17,320 | 556 | 644 | 4,960 | 4,389 | 1,376 | — | 29,245 | |||||||||||||||
Equity | $ | 1,281,250 | 58,471 | 33,444 | 499,590 | 158,939 | 96,621 | (32,616 | ) | 2,095,699 | ||||||||||||||
Nine months ended September 30, 2011: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 1,156,647 | 141,004 | 62,822 | 2,383,549 | 673,111 | 231,451 | — | 4,648,584 | |||||||||||||||
Transfers between geographic areas | 77,099 | 8,454 | 15,866 | 29,853 | 32,789 | 13,305 | (177,366 | ) | — | |||||||||||||||
Total revenues | $ | 1,233,746 | 149,458 | 78,688 | 2,413,402 | 705,900 | 244,756 | (177,366 | ) | 4,648,584 | ||||||||||||||
Net revenues | $ | 548,918 | 66,065 | 45,295 | 454,889 | 230,521 | 74,634 | — | 1,420,322 | |||||||||||||||
Operating income | $ | 169,050 | 18,895 | 14,095 | 189,981 | 53,200 | 18,042 | — | 463,263 | |||||||||||||||
Identifiable assets | $ | 1,509,393 | 87,554 | 52,058 | 667,421 | 414,991 | 149,253 | 2,499 | 2,883,169 | |||||||||||||||
Capital expenditures | $ | 14,815 | 923 | 462 | 16,535 | 24,568 | 1,551 | — | 58,854 | |||||||||||||||
Depreciation and amortization | $ | 14,815 | 830 | 773 | 5,638 | 4,014 | 1,560 | — | 27,630 | |||||||||||||||
Equity | $ | 1,242,594 | 49,134 | 27,258 | 435,466 | 146,652 | 92,668 | (31,714 | ) | 1,962,058 |
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