expd-10q_20220930.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At November 4, 2022, the number of shares outstanding of the issuer’s common stock was 159,136,384.

	September 30, 2022			December 31, 2021
Assets:
Current Assets:
Cash and cash equivalents	$	2,154,534		$	1,728,692
Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021		2,748,322			3,810,286
Deferred contract costs		499,935			987,266
Other		184,765			108,801
Total current assets		5,587,556			6,635,045
Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021		480,941			487,870
Operating lease right-of-use assets		486,980			459,158
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		27,295			729
Other assets, net		16,827			19,200
Total assets	$	6,607,526		$	7,609,929
Liabilities:
Current Liabilities:
Accounts payable		1,544,757			2,012,461
Accrued liabilities, primarily salaries and related costs		404,207			403,625
Contract liabilities		594,244			1,142,026
Current portion of operating lease liabilities		88,535			82,019
Federal, state and foreign income taxes		74,507			86,166
Total current liabilities		2,706,250			3,726,297
Noncurrent portion of operating lease liabilities		409,883			385,641
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued		—			—
Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021		1,591			1,672
Additional paid-in capital		118			3,160
Retained earnings		3,738,600			3,620,008
Accumulated other comprehensive loss		(258,129	)		(130,414	)
Total shareholders’ equity		3,482,180			3,494,426
Noncontrolling interest		9,213			3,565
Total equity		3,491,393			3,497,991
Total liabilities and equity	$	6,607,526		$	7,609,929

	Three months ended September 30,					Nine months ended September 30,
	2022			2021		2022		2021
Revenues:
Airfreight services	$	1,480,955		$	1,628,115	$	4,682,076	$	4,477,599
Ocean freight and ocean services		1,684,579			1,598,597		5,420,471		3,651,059
Customs brokerage and other services		1,196,612			1,092,549		3,527,209		2,998,516
Total revenues		4,362,146			4,319,261		13,629,756		11,127,174
Operating Expenses:
Airfreight services		1,104,812			1,244,381		3,459,861		3,335,253
Ocean freight and ocean services		1,343,355			1,254,334		4,345,963		2,859,020
Customs brokerage and other services		746,106			686,775		2,345,508		1,837,134
Salaries and related		499,341			519,611		1,546,503		1,452,902
Rent and occupancy		52,715			46,730		155,241		137,376
Depreciation and amortization		15,187			12,753		42,416		38,415
Selling and promotion		6,239			4,237		16,174		10,479
Other		67,468			60,803		223,425		170,798
Total operating expenses		3,835,223			3,829,624		12,135,091		9,841,377
Operating income		526,923			489,637		1,494,665		1,285,797
Other Income (Expense):
Interest income		7,835			2,462		12,447		6,596
Other, net		98			733		7,731		6,382
Other income, net		7,933			3,195		20,178		12,978
Earnings before income taxes		534,856			492,832		1,514,843		1,298,775
Income tax expense		120,694			132,922		368,975		333,941
Net earnings		414,162			359,910		1,145,868		964,834
Less net (losses) earnings attributable to the noncontrolling interest		(47	)		842		7,745		2,174
Net earnings attributable to shareholders	$	414,209		$	359,068	$	1,138,123	$	962,660
Diluted earnings attributable to shareholders per share	$	2.54		$	2.09	$	6.84	$	5.61
Basic earnings attributable to shareholders per share	$	2.56		$	2.12	$	6.90	$	5.68
Weighted average diluted shares outstanding		163,250			171,565		166,398		171,549
Weighted average basic shares outstanding		162,029			169,633		164,944		169,398

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Net earnings	$	414,162		$	359,910		$	1,145,868		$	964,834
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of income tax benefit of $5,648 and $1,592 for the three months ended September 30, 2022 and 2021 and $13,429 and $4,764 for the nine months ended September 30, 2022 and 2021		(64,507	)		(16,908	)		(129,269	)		(23,946	)
Other comprehensive loss		(64,507	)		(16,908	)		(129,269	)		(23,946	)
Comprehensive income		349,655			343,002			1,016,599			940,888
Less comprehensive (loss) income attributable to the noncontrolling interest		(259	)		668			6,191			1,275
Comprehensive income attributable to shareholders	$	349,914		$	342,334		$	1,010,408		$	939,613

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Operating Activities:
Net earnings	$	414,162		$	359,910		$	1,145,868		$	964,834
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		5,570			3,739			9,917			6,028
Deferred income tax (benefit) expense		(3,070	)		(7,658	)		(14,928	)		2,343
Stock compensation expense		14,175			15,204			51,296			57,298
Depreciation and amortization		15,187			12,753			42,416			38,415
Other, net		1,435			626			144			1,523
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		634,421			(714,300	)		880,364			(1,377,997	)
(Decrease) increase in accounts payable and accrued expenses		(350,922	)		436,343			(343,902	)		769,525
Decrease (increase) in deferred contract costs		226,087			(328,932	)		437,155			(550,572	)
(Decrease) increase in contract liabilities		(249,895	)		381,192			(488,826	)		635,286
(Decrease) increase in income taxes payable, net		(31,397	)		33,378			(78,568	)		32,022
(Increase) decrease in other, net		(5,369	)		(14,884	)		2,040			(15,208	)
Net cash from operating activities		670,384			177,371			1,642,976			563,497
Investing Activities:
Purchase of property and equipment		(15,928	)		(9,870	)		(68,498	)		(24,800	)
Other, net		(590	)		(157	)		(645	)		(53	)
Net cash from investing activities		(16,518	)		(10,027	)		(69,143	)		(24,853	)
Financing Activities:
Payments from borrowing on lines of credit		(21,117	)		(1,045	)		(29,601	)		(2,570	)
Proceeds from borrowing on lines of credit		—			8,524			56,545			10,138
Proceeds from issuance of common stock		61,885			56,965			73,318			99,433
Repurchases of common stock		(469,041	)		(76,595	)		(1,018,106	)		(225,064	)
Dividends paid		—			—			(109,828	)		(98,387	)
Payments for taxes related to net share settlement of equity awards		—			(4	)		(19,333	)		(15,172	)
Distribution to noncontrolling interest		(543	)		(1,631	)		(543	)		(1,631	)
Net cash from financing activities		(428,816	)		(13,786	)		(1,047,548	)		(233,253	)
Effect of exchange rate changes on cash and cash equivalents		(47,487	)		(7,573	)		(100,443	)		(13,076	)
Change in cash and cash equivalents		177,563			145,985			425,842			292,315
Cash and cash equivalents at beginning of period		1,976,971			1,674,121			1,728,692			1,527,791
Cash and cash equivalents at end of period	$	2,154,534		$	1,820,106		$	2,154,534		$	1,820,106
Taxes Paid:
Income taxes	$	150,960		$	104,617		$	465,711		$	295,153

	Common Stock
For the three months ended September 30, 2022 and 2021	Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at June 30, 2022		162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263
Shares issued under employee stock plans, net of tax withholding for net settlement		726			7			61,877			—			—			61,884			—			61,884
Shares repurchased under provisions of stock repurchase plan		(4,529	)		(45	)		(76,071	)		(392,925	)		—			(469,041	)		—			(469,041	)
Stock compensation expense		—			—			14,175			—			—			14,175			—			14,175
Net earnings		—			—			—			414,209			—			414,209			(47	)		414,162
Other comprehensive loss		—			—			—			—			(64,295	)		(64,295	)		(212	)		(64,507	)
Dividends and dividend equivalents paid		—			—			—			—			—			—			—			—
Distribution to noncontrolling interest		—			—			—			—			—			—			(543	)		(543	)
Balance at September 30, 2022		159,128		$	1,591		$	118		$	3,738,600		$	(258,129	)	$	3,482,180		$	9,213		$	3,491,393

Balance at June 30, 2021		169,169		$	1,692		$	79,357		$	3,104,471		$	(106,066	)	$	3,079,454		$	4,197		$	3,083,651
Shares issued under employee stock plans, net of tax withholding for net settlement		836			8			56,953			—			—			56,961			—			56,961
Shares repurchased under provisions of stock repurchase plan		(613	)		(6	)		(76,589	)		—

Washington		91-1069248
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

1015 Third Avenue, Seattle, Washington		98104
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		EXPD		NASDAQ Global Select Market


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐