United States
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

UTi Worldwide Inc.

(Exact name of Registrant as Specified in its Charter)

British Virgin Islands		N/A
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)
9 Columbus Centre, Pelican Drive		c/o UTi, Services, Inc.
Road Town, Tortola		100 Oceangate, Suite 1500
British Virgin Islands		Long Beach, CA 90802 USA

(Addresses of Principal Executive Offices)

562.552.9400
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Yes o     No o

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

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No þ

At June 2, 2010, the number of shares outstanding of the issuer’s ordinary shares was 101,640,577.

 

 

UTi Worldwide Inc.

Report on Form 10-Q
For the Quarter Ended April 30, 2010

Table of Contents

PART I. Financial Information			2
Item 1. Financial Statements (unaudited)			2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 3. Quantitative and Qualitative Disclosures about Market Risk			43
Item 4. Controls and Procedures			44
PART II. Other Information			45
Item 1. Legal Proceedings			45
Item 1A. Risk Factors			47
Item 6. Exhibits			48
Signatures			49
Exhibit Index			50
Exhibit 31.1
Exhibit 31.2
Exhibit 32

Part I. Financial Information

Item 1. Financial Statements

Consolidated Statements of Income
For the three months ended April 30, 2010 and 2009
(in thousands, except share and per share amounts)

		Three months ended April 30,
		2010				2009
		(Unaudited)
Revenues		$	1,055,156			$	768,356
Purchased transportation costs			689,408				458,849
Staff costs			207,001				175,803
Depreciation			11,412				9,854
Amortization of intangible assets			3,344				2,637
Restructuring charges			—				1,231
Other operating expenses			125,039				102,130
Operating income			18,952				17,852
Interest income			2,559				2,723
Interest expense			(6,678	)			(6,176	)
Other income/(expense), net			844				(202	)
Pretax income			15,677				14,197
Provision for income taxes			4,936				4,317
Net income			10,741				9,880
Net income attributable to noncontrolling interests			667				35
Net income attributable to UTi Worldwide Inc.		$	10,074			$	9,845
Basic earnings per common share attributable to UTi Worldwide Inc. common shareholders		$	0.10			$	0.10
Diluted earnings per common share attributable to UTi Worldwide Inc. common shareholders		$	0.10			$	0.10
Number of weighted average common shares outstanding used for per share calculations
Basic shares			100,071,923				99,659,276
Diluted shares			101,528,328				100,845,303

See accompanying notes to the consolidated financial statements.

Consolidated Balance Sheets
As of April 30, 2010 and January 31, 2010
(in thousands, except share amounts)

		April 30,				January 31,
		2010				2010
		(Unaudited)
ASSETS
Cash and cash equivalents		$	340,721			$	350,784
Trade receivables (net of allowance for doubtful accounts of $13,440 and $13,686 as of April 30, 2010 and January 31, 2010, respectively)			808,719				727,413
Deferred income taxes			17,495				16,917
Other current assets			117,896				111,575
Total current assets			1,284,831				1,206,689
Property, plant and equipment (net of accumulated depreciation of $181,297 and $171,972 as of April 30, 2010 and January 31, 2010, respectively)			180,512				180,422
Goodwill			418,158				414,791
Other intangible assets, net			69,762				72,182
Investments			1,025				1,717
Deferred income taxes			31,577				31,815
Other non-current assets			30,951				29,430
Total assets		$	2,016,816			$	1,937,046
LIABILITIES & EQUITY
Bank lines of credit		$	123,785			$	100,653
Short-term bank borrowings			10,272				8,032
Current portion of long-term bank borrowings			69,966				69,934
Current portion of capital lease obligations			16,534				16,832
Trade payables and other accrued liabilities			762,280				731,518
Income taxes payable			4,527				1,929
Deferred income taxes			3,324				3,503
Total current liabilities			990,688				932,401
Long-term bank borrowings, excluding current portion			98,954				99,097
Capital lease obligations, excluding current portion			22,921				23,892
Deferred income taxes			32,546				32,874
Retirement fund obligations			6,629				8,123
Other non-current liabilities			27,497				26,377
Commitments and contingencies
UTi Worldwide Inc. shareholders’ equity:
Common stock — ordinary shares of no par value: 101,560,197 and 100,900,556 shares issued and outstanding as of April 30, 2010 and January 31, 2010, respectively			469,854				464,731
Retained earnings			383,622				373,548
Accumulated other comprehensive loss			(40,292	)			(46,904	)
Total UTi Worldwide Inc. shareholders’ equity			813,184				791,375
Noncontrolling interests			24,397				22,907
Total equity			837,581				814,282
Total liabilities and equity		$	2,016,816			$	1,937,046

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Cash Flows
For the three months ended April 30, 2010 and 2009
(in thousands)

		Three months ended
		April 30,
		2010				2009
		(Unaudited)
OPERATING ACTIVITIES:
Net income		$	10,741			$	9,880
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Share-based compensation costs, net			1,683				2,471
Depreciation			11,412				9,854
Amortization of intangible assets			3,344				2,637
Amortization of debt issuance costs			713				—
Restructuring charges			—				761
Deferred income taxes			(859	)			2,593
Uncertain tax positions			145				—
Tax benefit relating to share-based compensation			1,369				640
Excess tax benefit from share-based compensation			(251	)			—
Loss/(gain) on disposal of property, plant and equipment			32				(6,635	)
Provision for doubtful accounts			730				399
Other			239				(1,227	)
Changes in operating assets and liabilities:
(Increase)/decrease in trade receivables			(82,511	)			79,373
Decrease in other assets			2,465				19,773
Increase/(decrease) in trade payables			24,961				(88,368	)
Decrease in accrued liabilities and other liabilities			(2,693	)			(17,326	)
Net cash (used in)/provided by operating activities			(28,480	)			14,825
INVESTING ACTIVITIES:
Purchases of property, plant and equipment			(5,651	)			(7,083	)
Proceeds from disposal of property, plant and equipment			488				9,056
Net increase in other non-current assets			(781	)			(1,214	)
Acquisitions and contingent earn-out payments			—				(1,178	)
Other			(95	)			416
Net cash used in investing activities			(6,039	)			(3	)
FINANCING ACTIVITIES:
Borrowings from lines of credit			1,420				333
Repayments of lines of credit			(3,797	)			(11,950	)
Net borrowings/(repayments) under revolving lines of credit			25,634				(9,893	)
Net increase/(decrease) in short-term borrowings			963				(1,018	)
Proceeds from issuance of long-term borrowings			55				1,498
Repayment of long-term borrowings			(300	)			(60	)
Repayment of capital lease obligations			(7,086	)			(5,042	)
Dividends paid to noncontrolling interests			(34	)			(202	)
Net proceeds from issuance of ordinary shares			3,189				235
Excess tax benefit from share-based compensation			251				—
Net cash provided by/(used in) financing activities			20,295				(26,099	)
Effect of foreign exchange rate changes on cash and cash equivalents			4,161				15,377
Net (decrease)/increase in cash and cash equivalents			(10,063	)			4,100
Cash and cash equivalents at beginning of period			350,784				256,869
Cash and cash equivalents at end of period		$	340,721			$	260,969

See accompanying notes to the consolidated financial statements.

Notes to the Consolidated Financial Statements
For the three months ended April 30, 2010 and 2009 (Unaudited)

NOTE 1. Presentation of Financial Statements

Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements of UTi Worldwide Inc. and its subsidiaries (the Company, we, us, or UTi) contain all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the consolidated balance sheets as of April 30, 2010 and January 31, 2010, the consolidated statements of income for the three months ended April 30, 2010 and 2009 and the consolidated statements of cash flows for the three months ended April 30, 2010 and 2009. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and the instructions to Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they have been condensed and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results of operations for the three months ended April 30, 2010 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending January 31, 2011 or any other future periods. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended January 31, 2010.

All amounts in the notes to the consolidated financial statements are presented in thousands except for share and per share data.

Income Taxes

Income tax expense for the three months ended April 30, 2010 and 2009, was computed using the effective tax rate estimated to be applicable for the full fiscal year, which is subject to ongoing review and evaluation by management.

The Company records a provision for estimated additional tax and interest and penalties that may result from tax authorities disputing uncertain tax positions taken at the largest amount that is greater than 50% likely of being realized. For further information, see Note 12, “Uncertain Tax Positions.”

Segment Reporting

The Company’s reportable business segments are Freight Forwarding and Contract Logistics and Distribution. The Freight Forwarding segment includes airfreight forwarding, ocean freight forwarding, customs brokerage and other related services. The Contract Logistics and Distribution segment includes all operations providing contract logistics, distribution and other related services. Corporate office expenses, eliminations, and various holding companies within the group structure have been presented separately.

Foreign Currency Translation

Included in other income, net for the three months ended April 30, 2010 and 2009, are net gains on foreign exchange of $1,033 and net losses of $202, respectively.

Concentration of Credit Risks and Other

The Company maintains its primary cash accounts with established banking institutions around the world. The Company estimates that approximately $315,225 of these deposits was not insured by the Federal Deposit Insurance Corporation (FDIC) or similar entities outside of the United States (U.S.) as of April 30, 2010.

Call and Put Options

In connection with the Company’s merger of one of its subsidiaries with Newlog, Ltd. during fiscal 2008, the Company obtained an option providing it with the right to call the minority partner’s shares of the subsidiary under certain circumstances, including a change in control of the minority partner. The Company recorded an asset related to this call option in other non-current assets. The amount recorded represents the difference between the estimated strike price and the estimated fair value of the subsidiary equity held by the minority partner, if the call option becomes exercisable. The amounts included in other non-current assets were $448 and $476 at April 30, 2010 and January 31, 2010, respectively.

Additionally, the Company granted an option providing the minority partner with the right to call the Company’s shares of the subsidiary in the event the Company does not exercise its right, under specific circumstances, to call the minority partner’s shares. The Company recorded a liability related to this option in other non-current liabilities. The amounts included in other non-current liabilities were $757 and $811 at April 30, 2010 and January 31, 2010, respectively.

In connection with the formation of a partnership in South Africa that holds the shares of a subsidiary that distributes pharmaceutical supplies and equipment, the Company granted a put option to the minority partner providing the partner with a right to put their 25.1% share of the partnership to the Company in fiscal 2011. The liability at April 30, 2010 and January 31, 2010 was determined to be zero. The Company estimates the redemption value of the put option be approximately $9,279, which the Company believes to be substantially less than the fair value of the minority partner’s interest in the partnership.

Fair Values of Financial Instruments

The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Therefore, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The effect of using different market assumptions and estimation methodologies may be material to the estimated fair value amounts.

The Company’s principal financial instruments are cash and cash equivalents, trade receivables, bank lines of credit, short-term bank borrowings, trade payables and other accrued liabilities, long-term bank borrowings, call and put options, and forward contracts and other derivative instruments. With the exception of the Company’s senior unsecured guaranteed notes and the call and put options, the carrying value of these financial instruments approximate fair values either because of the short maturities of these instruments, or because the interest rates are based upon variable reference rates. As of April 30, 2010 and January 31, 2010, the fair value of the Company’s 6.31% senior unsecured guaranteed notes was $100,200 and $99,569, respectively, compared to a book value of $100,000, for each of these periods. As discussed further at Note 11, “Borrowings” on July 9, 2009, the Company issued $55,000 of senior unsecured guaranteed notes bearing an interest rate of 8.06%. As of April 30, 2010 and January 31, 2010, the fair value of these notes was $54,924 and $55,000, respectively, compared to a book value of $55,000, for each of these periods. The call and put options are recorded at their estimated fair value. For further information, see Note 1, “Call and Put Options.”

Sale of Property

Effective April 1, 2009, the Company disposed of property located in South Africa for a sale price of $8,130. The property comprised of land and buildings with carrying values of $572 and $967, respectively, all of which was included within corporate in the segment disclosure in Note 5, “Segment Reporting”. After adjusting for the net costs of the assets sold and for expenses associated with the sale, the Company realized a pre-tax gain of $6,271, which was recorded in other operating expenses in the consolidated statements of income for the three months ended April 30, 2009.

Change in Cash Flow Presentation

In the consolidated statements of cash flows, the Company has presented gross borrowings on certain lines of credit with original repayment terms of greater than three months, separate from the repayments on those lines of credit. The presentation of these lines of credit was previously reflected on a net basis for the three months ended April 30, 2009. The change has no impact on cash flows from financing activities or any other financial statement information.

Recent Accounting Pronouncements

In February 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-09 (ASU 2010-09) to Codification Topic 855, Subsequent Events. This update requires that all SEC filers must evaluate subsequent events through the date the financial statements are issued. However, it no longer requires filers to disclose either the issuance date or the revised issuance date. The amended Codification Topic 855 established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company has evaluated subsequent events for appropriate accounting and disclosure in accordance with ASU 2010-09.

In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements (ASU 2009-13), which amends Codification Topic 605, Revenue Recognition. This update provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. This update also establishes a selling price hierarchy for determining the selling price of a deliverable. ASU 2009-13 is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact the adoption of the update may have on its consolidated results of operations and financial position.

In June 2009, the FASB issued ASU 2009-17 to Codification Topic 810, Consolidation. This update amends previous guidance to require the Company to perform an analysis to determine whether its variable interests give it a controlling financial interest in a variable interest entity. The update is effective for annual periods beginning after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company’s implementation of this standard on February 1, 2010 did not have a significant impact on its consolidated statements of income and financial position.

NOTE 2. Acquisitions

All acquired businesses are primarily engaged in providing logistics management, including international air and ocean freight forwarding, customs brokerage, contract logistics services and transportation management services. The results of acquired businesses have been included in the Company’s consolidated financial statements from the effective dates of acquisition.

Effective December 21, 2009, the Company acquired the remaining outstanding shares of an Israeli subsidiary, Excel MPL-A.V.B.A., LP (EMA Israel), of which the Company already held a 50% ownership interest that was acquired through the Company’s acquisition of the Israeli subsidiary’s parent company in the beginning of fiscal 2010. The purchase price totaled $6,500, including the repayment of a $537 loan and contingent consideration estimated to be $300 which is based on projected net revenues from a particular customer for the following four years. The contingent consideration was accrued as an obligation through an increase to goodwill. The acquisition eliminated a minority shareholder in Israel. The purchase price exceeded the fair value of the noncontrolling interest received and net assets acquired, including acquired intangible assets with an estimated fair value of $3,136, and accordingly, $2,035 was allocated to goodwill, all of which is included within the Company’s Contract Logistics and Distribution segment. The Company is currently determining whether the goodwill is deductible for tax purposes. The estimated purchase price allocation is preliminary and is subject to revision. A valuation of the additional net assets acquired is being conducted and the final allocation will be made when completed.

Effective October 16, 2009, the Company acquired all of the issued and outstanding shares of Tacisa Transitaria, S.L. (Tacisa), a Spanish freight forwarder. An employee of one of the Company’s Spanish subsidiaries held a majority ownership interest in Tacisa prior to the Company’s acquisition. The purchase price totaled $5,463, net of cash acquired of $750, and including contingent consideration estimated to be $4,734 based on projected fiscal 2010 operating results of Tacisa. The contingent consideration was accrued as an obligation with a corresponding increase to goodwill. The acquisition expanded the Company’s freight forwarding coverage in Spain. The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based on their estimated fair values at the date of acquisition. The preliminary allocation resulted in an excess of the purchase price over the fair value of the acquired net assets, and accordingly, $2,536 was allocated to goodwill, all of which is included in the Company’s Freight Forwarding segment. The Company is currently determining whether the goodwill is deductible for tax purposes.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition and the preliminary purchase price allocation that was recorded for Tacisa, which is subject to revision. A valuation of the assets acquired and liabilities assumed is being conducted and the final allocation will be made when completed.

Current assets		$	3,237
Goodwill			2,536
Acquired intangible assets			3,476
Other non-current assets			54
Total assets acquired			9,303
Liabilities assumed			(2,047	)
Deferred income taxes			(1,043	)
Net assets acquired		$	6,213

Revenues and net income attributable to UTi Worldwide, Inc. as a result of the acquisition of EMA Israel and Tacisa totaled $12,278 and $254, respectively, for the three months ended April 30, 2010. The following supplemental pro forma information summarizes the results of operations of Tacisa for the three months ended April 30, 2009, as if the acquisition had occurred at the beginning of the period presented. The pro forma information gives no effect to actual operating results that would have actually been obtained if the acquisition had occurred at the beginning of the period presented or may be obtained in the future.

						Net income
						attributable to				Diluted
						UTi Worldwide				earnings
2009:		Revenue				Inc.				per share*
As reported		$	768,356			$	9,845			$	0.10
Acquisitions			2,267				177				—
Total		$	770,623			$	10,022			$	0.10

NOTE 3. Earnings per Share

Earnings per share are calculated as follows:

		Three months ended
		April 30,
		2010				2009
Amounts attributable to UTi Worldwide Inc. common shareholders:
Net income		$	10,074			$	9,845
Weighted average number of ordinary shares			100,071,923				99,659,276
Incremental shares required for diluted earnings per share related to stock options/restricted share units			1,456,405				1,186,027
Diluted weighted average number of ordinary shares			101,528,328				100,845,303
Basic earnings per common share attributable to UTi Worldwide Inc. common shareholders		$	0.10			$	0.10
Diluted earnings per common share attributable to UTi Worldwide Inc. common shareholders		$	0.10			$	0.10

Weighted-average diluted shares outstanding for the three months ended April 30, 2010 and 2009, exclude 3,065,268 and 3,927,498 shares, respectively, because such shares represent securities that have an exercise price in excess of the average market price of the Company’s common stock during the period, and were therefore anti-dilutive.

NOTE 4. Shareholders’ Equity

Certain information regarding the changes in shareholders’ equity and noncontrolling interests are as follows:

		UTi Worldwide Inc. Shareholders’ Equity
										Accumulated
										Other
		Common				Retained				comprehensive				Noncontrolling
		stock				earnings				loss				interests				Total
Balance at February 1, 2010		$	464,731			$	373,548			$	(46,904	)		$	22,907			$	814,282
Employee share-based compensation plans			5,123				—				—				—				5,123
Net income			—				10,074				—				667				10,741
Foreign currency translation adjustment and other			—				—				6,612				857				7,469
Distributions to noncontrolling interests			—				—				—				(34	)			(34	)
Balance at April 30, 2010		$	469,854			$	383,622			$	(40,292	)		$	24,397			$	837,581
Balance at February 1, 2009		$	450,553			$	338,461			$	(112,268	)		$	16,224			$	692,970
Employee share-based compensation plans			2,517				—				—				—				2,517
Net income			—				9,845				—				35				9,880
Foreign currency translation adjustment and other			—				—				24,494				2,865				27,359
Distributions to noncontrolling interests			—				—				—				(390	)			(390	)
Balance at April 30, 2009		$	453,070			$	348,306			$	(87,774	)		$	18,734			$	732,336

Other comprehensive income is comprised of the following:

		Three months ended
		April 30,
		2010				2009
Net income		$	10,741			$	9,880
Other comprehensive income, net of tax:
Foreign exchange translation adjustments and other			7,469				27,359
Comprehensive income			18,210				37,239
Comprehensive income attributable to noncontrolling interests			(1,524	)			(2,900	)
Comprehensive income attributable to UTi Worldwide Inc.		$	16,686			$	34,339

NOTE 5. Segment Reporting

Certain information regarding the Company’s operations by segment is summarized as follows:

		Three months ended April 30, 2010
						Contract
						Logistics
		Freight				and
		Forwarding				Distribution				Corporate				Total
Revenues		$	721,774			$	333,382			$	—			$	1,055,156
Purchased transportation costs			562,335				127,073				—				689,408
Staff costs			94,390				106,977				5,634				207,001
Depreciation			3,832				7,228				352				11,412
Amortization of intangible assets			1,030				2,314				—				3,344
Other operating expenses			46,370				73,024				5,645				125,039
Total operating expenses			707,957				316,616				11,631				1,036,204
Operating income/(loss)		$	13,817			$	16,766			$	(11,631	)			18,952
Interest income															2,559
Interest expense															(6,678	)
Other income, net															844
Pretax income															15,677
Provision for income taxes															4,936
Net income															10,741
Net income attributable to noncontrolling interests															667
Net income attributable to UTi Worldwide Inc.														$	10,074
Capital expenditures		$	3,734			$	2,960			$	4,070			$	10,764
Segment assets		$	1,134,381			$	765,284			$	117,151			$	2,016,816

		Three months ended April 30, 2009
						Contract
						Logistics
		Freight				and
		Forwarding				Distribution				Corporate				Total
Revenues		$	493,590			$	274,766			$	—			$	768,356
Purchased transportation costs			359,364				99,485				—				458,849
Staff costs			80,905				91,378				3,520				175,803
Depreciation			3,627				6,128				99				9,854
Amortization of intangible assets			826				1,811				—				2,637
Restructuring charges			—				—				1,231				1,231
Other operating expenses			37,865				65,491				(1,226	)			102,130
Total operating expenses			482,587				264,293				3,624				750,504
Operating income/(loss)		$	11,003			$	10,473			$	(3,624	)			17,852
Interest income															2,723
Interest expense															(6,176	)
Other expense, net															(202	)
Pretax income															14,197
Provision for income taxes															4,317
Net income															9,880
Net income attributable to noncontrolling interests															35
Net income attributable to UTi Worldwide Inc.														$	9,845
Capital expenditures		$	3,086			$	4,452			$	978			$	8,516
Segment assets		$	937,591			$	663,913			$	60,816			$	1,662,320

For segment reporting purposes by geographic region, airfreight and ocean freight forwarding revenues for the movement of goods is attributed to the country where the shipment originates. Revenues for all other services, including contract logistics services, are attributed to the country where the services are performed.

The following table shows the revenues attributable to the Company’s geographic regions, EMENA (which is comprised of Europe, Middle East and North Africa), the Americas, Asia Pacific and Africa:

		Three months ended April 30,
		2010												2009
						Contract												Contract
						Logistics												Logistics
		Freight				and								Freight				and
		Forwarding				Distribution								Forwarding				Distribution
		Revenue				Revenue				Total				Revenue				Revenue				Total
EMENA		$	230,394			$	65,194			$	295,588			$	183,832			$	53,556			$	237,388
Americas			150,100				173,304				323,404				106,088				151,945				258,033
Asia Pacific			255,062				9,187				264,249				145,515				7,309				152,824
Africa			86,218				85,697				171,915				58,155				61,956				120,111
Total		$	721,774			$	333,382			$	1,055,156			$	493,590			$	274,766			$	768,356

The following table shows revenues and purchased transportation costs attributable to the Company’s principal services:

		Three months ended
		April 30,
		2010				2009
Revenues:
Airfreight forwarding		$	367,692			$	239,288
Ocean freight forwarding			271,832				192,066
Customs brokerage			25,435				19,949
Contract logistics			177,010				142,926
Distribution			117,374				98,500
Other			95,813				75,627
Total		$	1,055,156			$	768,356
Purchased transportation costs:
Airfreight forwarding		$	293,542			$	175,356
Ocean freight forwarding			227,186				152,410
Customs brokerage			1,570				1,118
Contract logistics			35,723				23,391
Distribution			79,117				66,499
Other			52,270				40,075
Total		$	689,408			$	458,849

NOTE 6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by reportable segment for the three months ended
April 30, 2010 are as follows:

						Contract
						Logistics
		Freight				and
		Forwarding				Distribution				Total
Balance at February 1, 2010		$	170,034			$	244,757			$	414,791
Foreign currency translation			(850	)			4,217				3,367
Balance at April 30, 2010		$	169,184			$	248,974			$	418,158

Amortizable intangible assets as of April 30, 2010 and January 31, 2010 relate primarily to the estimated fair value of the customer relationships acquired with respect to certain acquisitions. The carrying values of amortizable intangible assets as of April 30, 2010 and January 31, 2010 were as follows:

		Gross								Net				Weighted
		carrying				Accumulated				carrying				average/life
		Value				amortization				value				years
As of April 30, 2010:
Customer relationships		$	105,989			$	(39,452	)		$	66,537				9.5
Non-compete agreements			3,154				(2,938	)			216				3.0
Other			4,611				(2,607	)			2,004				3.7
Total		$	113,754			$	(44,997	)		$	68,757
As of January 31, 2010:
Customer relationships		$	105,320			$	(36,586	)		$	68,734				9.6
Non-compete agreements			3,048				(2,797	)			251				3.1
Other			4,473				(2,270	)			2,203				3.7
Total		$	112,841			$	(41,653	)		$	71,188

Amortization expense totaled $3,344 and $2,637 for the three months ended April 30, 2010 and 2009, respectively. The following table shows the expected amortization expense for these intangible assets for the current and each of the next four fiscal years ending January 31,

2011		$	12,235
2012			11,463
2013			10,916
2014			10,363
2015			8,279

In addition to its amortizable intangible assets, the Company also has $1,005 and $994 of intangible assets not subject to amortization as of April 30, 2010 and January 31, 2010, respectively, related primarily to acquired trade names.

NOTE 7. Supplemental Cash Flow Information

The following table shows the supplemental cash flow information and supplemental non-cash investing and financing activities:

		Three months ended
		April 30,
		2010				2009
Net cash paid for:
Interest		$	6,635			$	3,064
Income taxes			3,991				4,374
Non-cash activities:
Capital lease obligations incurred to acquire assets			5,113				1,433

UTi is a holding company which relies on dividends or advances from its subsidiaries to meet its financial obligations and to pay dividends on its ordinary shares. The ability of UTi’s subsidiaries to pay dividends to the Company and UTi’s ability to receive distributions is subject to applicable local law and other restrictions including, but not limited to, applicable tax laws and limitations contained in some of the Company’s bank credit facilities and in the note purchase agreements for the Company’s outstanding senior notes. Such laws and restrictions could limit the payment of dividends and distributions to the Company which would restrict UTi’s ability to continue operations. In general, UTi’s subsidiaries cannot pay dividends in excess of their retained earnings and most countries require that the subsidiaries pay a distribution tax on all dividends paid. In addition, the amount of dividends that UTi’s subsidiaries could declare may be limited in certain countries by exchange controls. Total net assets which may not be transferred to the Company in the form of loans, advances, or cash dividends by the Company’s subsidiaries without the consent of a third party, were less than 10% of the Company’s consolidated total net assets as of the end of the most recent fiscal year.

NOTE 8. Contingencies

From time to time, claims are made against us or we may make claims against others, including in the ordinary course of our business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting us from engaging in certain activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse affect on our consolidated results of operations for that period or future periods. As of the date of these consolidated financial statements, we are not a party to any material litigation except as described below.

The Company and one of its subsidiaries (along with sixteen other global corporations) were named as defendants by a patent holding company, in a patent infringement lawsuit filed on May 7, 2009, in the United States District Court for the Central District of California (Big Baboon, Inc. v. Dell Inc., et. al.). The lawsuit alleged that the Company’s eMpower software tools were infringing U.S. Patent Nos. 6,115,690 (the “690 patent”) and 6,343,275 (the “275 patent”). The claims asserted are not believed to be material to the Company as a whole. On May 12, 2010, after discovery regarding the eMpower software tools, the plaintiff dismissed its lawsuit against the Company and subsidiary without prejudice.

In June 2007, we responded to a grand jury subpoena requesting documents in connection with the United States Department of Justice (U.S. DOJ)’s investigation into the pricing practices in the international freight forwarding and cargo transportation industry which had been served on us in June 2006. On October 10, 2007, the U.S. DOJ executed a search warrant on us at our offices in Long Beach, California, and served one of our subsidiaries with a subpoena requesting numerous documents and other materials in connection with its investigation of the international freight forwarding and cargo transportation industry. In addition to its previous request for documents regarding air freight forwarding, the U.S. DOJ also requested that we produce various documents regarding ocean freight forwarding. We believe we are a subject of the U.S. DOJ investigation.

On October 10, 2007, we also received a notice from the Canadian Competition Bureau that the Bureau commenced an investigation with respect to alleged anti-competitive activities of persons involved in the provision of international freight forwarding services to and from Canada and requesting that we preserve records relevant to such investigation. On October 30, 2009, we received notice from the Canadian Competition Bureau that it had closed its investigation and has withdrawn its record preservation request.

On October 25, 2007, one of our subsidiaries received a notice from the New Zealand Commerce Commission that it was conducting an investigation in relation to international freight forwarding services in New Zealand and requesting that we provide documents and information as it relates to New Zealand. Our subsidiary responded to the request from the New Zealand Commerce Commission on December 21, 2007.

In June 2008 and February 2009, we received a request for information issued by the European Commission (EC) requesting information and records relating to the EC’s ongoing investigation of alleged anti-competitive behavior relating to freight forwarding services in the European Union/European Economic Area. In July 2008 and March 2009, we submitted responses to these requests.

In May 2009, we learned that the Brazilian Ministry of Justice is investigating possible alleged cartel activity in the international air and ocean freight forwarding market and as of the date of the filing of this report, we have not been contacted by Brazilian authorities regarding this matter.

In November 2009, one of our subsidiaries received a summons from the South African Competition Commission requesting certain information and records in connection with its ongoing investigation of alleged anti-competitive behavior relating to the market for air freight forwarding services in South Africa. In January 2010, we responded to this request.

In February 2010, in connection with the EC’s investigation discussed above, the EC sent a Statement of Objections to us and a number of other freight forwarding and logistics providers. The Statement of Objections alleges infringements of European Union competition law with respect to various surcharges. We responded in writing to the EC’s Statement of Objections in April 2010 and expect to attend a hearing in July 2010 to discuss our position with the EC officials.

We continue to receive additional requests for information, documents and interviews from various governmental agencies with respect to these investigations, and we have provided, and expect to continue to provide in the future, further responses as a result of such requests.

We (along with several other global logistics providers) have been named as a defendant in a federal antitrust class action lawsuit filed on January 3, 2008 in the United States District Court of the Eastern District of New York (Precision Associates, Inc., et. al. v. Panalpina World Transport (Holding) Ltd., et. al.). This lawsuit alleges that the defendants engaged in various forms of anti-competitive practices and seeks an unspecified amount of treble monetary damages and injunctive relief under U.S. antitrust laws.

We have incurred, and we expect to continue to incur, significant legal fees and other costs in connection with these governmental investigations and lawsuits. If the U.S. DOJ, the EC, or any other regulatory body concludes that we have engaged in anti-competitive behavior, we could incur significant additional legal fees and other costs, which could include fines and/or penalties, which may be material to our consolidated financial statements.

The Company is involved in a dispute with the South African Revenue Service where the Company makes use of “owner drivers” for the collection and delivery of cargo. The South African Revenue Service is claiming that the Company is liable for employee taxes in respect of these owner drivers. The Company has strongly objected to this and together with its expert legal and tax advisors, believes that the Company is in full compliance with the relevant sections of the income tax act governing this situation and has no tax liability in respect of these owner drivers. The amount claimed by the South African Revenue Service is approximately $9,742 based on exchange rates as of April 30, 2010.

The Company is involved in litigation in Italy (in various cases filed in 2000 in the Court of Milan) and England (in a case filed on April 13, 2000 in the High Court of Justice, London) with the former ultimate owner of Per Transport SpA and related entities, in connection with its April 1998 acquisition of Per Transport SpA and its subsequent termination of the employment services of the former ultimate owner as a consultant. The suits seek monetary damages, including compensation for termination of the former ultimate owner’s consulting agreement. The Company has brought counter-claims for monetary damages in relation to warranty claims under the purchase agreement. The total of all such actual and potential claims, albeit duplicated in several proceedings, is approximately $12,559 based on exchange rates as of April 30, 2010. In connection with the Italian litigation, legal proceedings have also been brought against a former director and officer of the Company and a current employee of the Company. The Company has agreed to indemnify these individuals in connection with these proceedings.

The Company was previously engaged through various indirect subsidiaries in the business of transportation and storage of fine works of art. The Company sold this business and the related indirect subsidiaries during fiscal 2009. A client of one of these subsidiaries has alleged that during several weeks of June 2007 a malfunctioning climate-control unit at such subsidiaries’ warehouses may have caused numerous works of art to be exposed to humidity levels beyond what are considered normal storage conditions. The Company has received communication from the client that several works of art may have been affected by the humidity; however it is not known whether the works have suffered any depreciation beyond normal restoration costs. Although the Company has sold this business, the Company has retained any liabilities associated with this matter. The Company believes that any ultimate liability it may have as a result of a claim may be mitigated based on a number of factors, including insurance policies in place; limitations of liability imposed by the Company’s standard trading conditions; as well as limitations of liability afforded by the subsidiary relationship. If a claim does arise and the Company is found liable and is otherwise unable to successfully mitigate its liability, the claim and its related impact could be material to the Company’s consolidated financial statements.

In connection with ASC 450, Contingencies, the Company has not accrued for a loss contingency relating to any of the disclosed investigations and legal proceedings because we believe that, although unfavorable outcomes in the investigations or proceedings may be reasonably possible, they are not considered by our management to be probable or reasonably estimable.

NOTE 9. Defined Benefit Plans

The Company sponsors defined benefit plans for eligible employees in certain countries. Under these plans, employees are entitled to retirement benefits based on years of service of the employee’s final average salary on attainment of the qualifying retirement age.

Net periodic pension cost for the Company’s defined benefit plans consists of:

		Three months ended
		April 30,
		2010				2009
Service cost		$	139			$	99
Interest cost			462				394
Expected return on assets			(309	)			(210	)
Amortization of net actuarial loss			17				58
Net periodic pension cost		$	309			$	341

For the three months ended April 30, 2010 and 2009, the Company contributed approximately $382 and $471, respectively, to its defined benefit plans.

NOTE 10. Share-Based Compensation

On June 8, 2009, the Company’s shareholders approved the 2009 Long Term Incentive Plan (2009 LTIP). The plan provides for the issuance of a variety awards, including stock options, share appreciation rights (sometimes referred to as SARs), restricted shares, restricted share units (RSUs), deferred share units and performance awards. A total of 6,250,000 shares were originally reserved for issuance under the 2009 LTIP, subject to adjustments as provided for in the plan.

In addition to the 2009 LTIP, at April 30, 2010, the Company had stock based compensation awards outstanding under the following plans: the 2004 Long Term Incentive Plan (2004 LTIP), the 2000 Stock Option Plan, the 2000 Employee Share Purchase Plan, the 2004 Non-Employee Directors Share Incentive Plan (2004 Directors Incentive Plan) and the Non-Employee Directors Share Option Plan (Directors Option Plan).

Under the 2000 Employee Share Purchase Plan, eligible employees may purchase shares of the Company’s stock at 85% of the market price of the common stock at the beginning of an offering period through payroll deductions in an amount not to exceed 10% of an employee’s annual base compensation subject to an annual maximum of $25.

Under the 2004 Directors Incentive Plan, the Company may grant non-qualified stock options, share appreciation rights, restricted stock, RSUs and deferred share units.

Since the 2009 LTIP was approved by the Company’s shareholders in June 2009, no additional awards may be made pursuant to the 2004 LTIP. In addition, the Company no longer grants awards under the 2000 Stock Option Plan and the Directors Option Plan. Vesting of these awards occurs over different periods, depending on the terms of the individual award, however expenses relating to these awards are all recognized on a straight line basis over the applicable vesting period.

Employee Share-Based Compensation Activity

A summary of the employee share-based compensation activity for the three months ended April 30, 2010 is as follows:

		2009 LTIP								2004 LTIP																2000 Stock Option Plan
						Weighted								Weighted								Weighted								Weighted
						average				Shares				average								average				Shares				average
		Restricted				grant date				subject to				exercise				Restricted				grant date				subject to				exercise
		share units				fair value				stock options				price				share units				fair value				stock options				price
Outstanding balance at February 1, 2010			46,232			$	13.05				1,827,663			$	20.32				1,794,895			$	18.00				1,113,564			$	7.44
Granted			973,702				17.14				—				—				—				—				—				—
Exercised/vested			(6,104	)			13.38				(87,488	)			15.62				(276,133	)			15.66				(247,305	)			6.29
Cancelled/forfeited			—				—				(72,225	)			—				(34,885	)			16.73				(15,738	)			4.33
Outstanding balance at April 30, 2010			1,013,830			$	16.98				1,667,950			$	20.54				1,483,877			$	18.30				850,521			$	7.89

Non-Employee Share-Based Compensation Activity

A summary of non-employee share-based compensation activity for the three months ended April 30, 2010 is as follows:

		2004
		Directors Incentive Plan								Directors Option Plan
						Weighted				Shares				Weighted
		Restricted				average				subject to				average
		share				grant date				stock				exercise
		units				fair value				options				price
Outstanding balance at February 1, 2010			30,457			$	12.36				81,000			$	10.33
Outstanding balance at April 30, 2010			30,457			$	12.36				81,000			$	10.33

In connection with its share-based compensation plans, the Company recorded approximately $1,683 and $2,471 of share-based compensation expense for the three months ended April 30, 2010 and 2009, respectively. As of April 30, 2010, the Company had approximately $27,881 of total unrecognized compensation related to share-based compensation to be expensed through April 2015.

NOTE 11. Borrowings

At April 30, 2010, the aggregate amount available for borrowing under all borrowing facilities totaled approximately $305,014. As of April 30, 2010, loans outstanding under these facilities totaled approximately $56,048 and letters of credit and guarantees outstanding under these facilities totaled approximately $159,409, excluding letters of credit (or the portion thereof) used to support loans outstanding. At April 30, 2010, the Company had approximately $89,557 of available, unused capacity under these facilities, approximately $75,623 of which was available for cash draw.

Bank Lines of Credit

A significant number of our subsidiaries participate in a cash pooling arrangement which is used to fund short-term liquidity needs. The cash pooling arrangement has no stated maturity date and yields and bears interest at varying rates. The facility does not permit cash withdrawals in excess of cash deposits on a global basis. At April 30, 2010, cash deposits were equivalent to cash withdrawals. Cash withdrawals of $81,269 are included in bank lines of credit at April 30, 2010.

ABN/RBS Letter of Credit Agreement

On July 9, 2009, the Company and certain of its subsidiaries entered into a letter of credit facility pursuant to an agreement with ABN AMRO N.V. (ABN) and The Royal Bank of Scotland plc. (the “ABN/RBS Letter of Credit Agreement”). The ABN/RBS Letter of Credit Agreement provides for an aggregate availability of up to $50,000 in letters of credit as of April 30, 2010. The ABN/RBS Letter of Credit Agreement provided for two separate letter of credit facilities, which are referred to as the ABN Letter of Credit Facility and the RBS Letter of Credit Facility. As of April 30, 2010, the letters of credit outstanding under the ABN Letter of Credit Facility totaled approximately $36,379 and the amount of available, unused capacity was $13,621. The ABN Letter of Credit Facility matures on July 9, 2011. The RBS Letter of Credit Facility matured on December 31, 2009 and prior to maturity the Company either obtained the release of the remaining letters of credit issued pursuant to this facility or provided for alternative arrangements for the underlying obligations. The Company’s obligations under the ABN/RBS Letter of Credit Agreement are guaranteed by the Company and selected subsidiaries.

Nedbank Letter of Credit Agreement

On July 9, 2009, the Company and certain of its subsidiaries also entered into a letter of credit facility pursuant to an agreement (the “Nedbank Letter of Credit Agreement”) with Nedbank Limited, acting through its London Branch. The Nedbank Letter of Credit Agreement provided for an aggregate initial availability of up to $36,000 in letters of credit. On January 8, 2010, the Company and certain of its subsidiaries entered into an amendment to this agreement (the “Nedbank Amendment”) which temporarily increased the aggregate availability under the facility to $46,000 in letters of credit. The Nedbank Amendment expired on March 1, 2010, after which the aggregate availability under the Nedbank Letter or Credit Agreement reverted to the original availability of $36,000 in letters of credit. As of April 30, 2010, the letters of credit outstanding under the Nedbank Letter of Credit Agreement totaled approximately $6,858 and letters of credit issued to support cash borrowings totaled $18,008, which is included in bank lines of credit in the consolidated balance sheet. As of April 30, 2010, the amount of available, unused capacity was $11,134 under this facility. The Nedbank Letter of Credit Agreement matures on July 9, 2011. The Company’s obligations under the Nedbank Letter of Credit Agreement are guaranteed by the Company and selected subsidiaries.

Together, the Company refers to the ABN/RBS Letter of Credit Agreement and the Nedbank Letter of Credit Agreement as the “Letter of Credit Agreements”. Pursuant to the terms of the Letter of Credit Agreements, the Company is charged fees relating to, among other things, the issuance of letters of credit, the aggregate amount of letters of credit outstanding, and the unused portions of these facilities, all at the rates specified in the applicable agreement.

South African Facilities Agreement

On July 9, 2009, certain of the Company’s subsidiaries operating in South Africa entered into a South African credit facility pursuant to an agreement (the “South African Facilities Agreement”) with Nedbank Limited, acting through its Corporate Banking Division. The South African Facilities Agreement provides for a 650,000 South African rand revolving credit facility, which is comprised of a 400,000 South African rand working capital facility and a 250,000 South African rand letter of credit, guarantee and forward exchange contract facility. At April 30, 2010, based on current exchange rates, the revolving credit facility provided for an aggregate availability of $87,945. As of April 30, 2010, the borrowings, letters of credit, and guarantees under the South African Facilities Agreement totaled approximately $32,117, represented by outstanding letters of credit and guarantees of $32,084 and borrowings of $33, which is included in bank lines of credit in the consolidated balance sheet. As of April 30, 2010, the amount of available, unused capacity was $55,828 under this facility. The South African Facilities Agreement also provides the Company’s South African operations with a 150,000 South African rand revolving asset-based finance facility, which includes, among other things, a capital lease line. The obligations of the Company’s subsidiaries under the South African Facilities Agreement are guaranteed by selected subsidiaries registered in South Africa. In addition, certain of the Company’s operating assets in South Africa, and the rights and interests of the South African branch of one of our subsidiaries in various intercompany loans made to a South African subsidiary and to a South African partnership, are pledged as collateral under the South African Facilities Agreement.

Overdrafts under the new South African working capital facility bear interest at a rate per annum equal to Nedbank’s publicly quoted prime rate minus 1%. The per annum interest rate payable in respect of foreign currency accounts is generally at the London Interbank Offered Rate (LIBOR), or with respect to a foreign currency account in euro, the Euro Interbank Offered Rate (EURIBOR), plus the lender’s cost of funds (to the extent greater than LIBOR or EURIBOR, as applicable), plus 3%. Instruments issued under the letter of credit, guarantee and forward exchange contract facility bear interest at a rate to be agreed upon in writing by the Company’s subsidiaries party to the South African Facilities Agreement and Nedbank.

Bank Borrowings

2009 Note Purchase Agreement

On July 9, 2009, the Company issued $55,000 of senior unsecured guaranteed notes (the “2009 Senior Notes”) under a note purchase agreement (the “2009 Note Purchase Agreement”), entered into among UTi, certain of its subsidiaries as guarantors and the purchasers named therein. The 2009 Senior Notes mature on August 9, 2014. The 2009 Senior Notes bear interest at a rate of 8.06% per annum, payable semi-annually, on the 9th day of February and August. The Company is required to repay approximately $9,167, or such lesser principal amount as shall then be outstanding, on February 9, 2012 and each February 9th and August 9th thereafter up to and including August 9, 2014. The Company’s obligations under the 2009 Senior Notes and the 2009 Note Purchase Agreement are guaranteed by the Company and selected subsidiaries. As of April 30, 2010, the principal amount outstanding under the 2009 Senior Notes was $55,000 and is included in long-term bank borrowings in the consolidated balance sheet.

2006 Note Purchase Agreement

On July 13, 2006, the Company issued $200,000 of senior unsecured guaranteed notes (the “2006 Senior Notes” and, together with the 2009 Senior Notes, the “Senior Notes”) under a note purchase agreement (the “2006 Note Purchase Agreement”, and together with the 2009 Note Purchase Agreement, the “Note Purchase Agreements”), entered into among UTi, certain of its subsidiaries as guarantors and the purchasers named therein. The 2006 Senior Notes mature on July 13, 2011. The 2006 Senior Notes bear interest at a rate of 6.31% per annum, payable semi-annually, on the 13th day of each January and July. The Company is required to repay approximately $33,333, or such lesser principal amount as shall then be outstanding, on each January 13th and July 13th up to and including July 13, 2011. The Company’s obligations under the 2006 Senior Notes and the 2006 Note Purchase Agreement are guaranteed by the Company and selected subsidiaries. As of April 30, 2010, the principal amount outstanding under the 2006 Senior Notes was approximately $100,000, and is included in long-term bank borrowings in the consolidated balance sheets.

The Letter of Credit Agreements, the South African Facilities Agreement, and the Note Purchase Agreements require the Company to comply with financial and other covenants and certain change of control provisions. In March 2010, the Company amended the financial covenants in the Letter of Credit Agreements and in the 2009 Note Purchase Agreement. Some of the covenants include maintaining a specified net worth, maintaining a specified ratio of total debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and minimum interest charge coverage requirements, among others. Should the Company fail to comply with these covenants and be unable to obtain any necessary amendments or waivers, all or a portion of the obligations under the Senior Notes, the Letter of Credit Agreements and the South African Facilities Agreement could become immediately due and payable and the Letter of Credit Agreements and the South African Facilities Agreement could be terminated and the credit, letter of credit, and guarantee facilities provided thereunder would no longer be available. The Company was in compliance with all the covenants set forth in the Note Purchase Agreements, the Letter of Credit Agreements and the South African Facilities Agreement as of April 30, 2010.

Furthermore, the Letter of Credit Agreements, the South African Facilities Agreement, and the Note Purchase Agreements each contain cross-default provisions with respect to other indebtedness, giving the lenders under the Letter of Credit Agreements and the South African Facilities Agreement and the note holders under the Note Purchase Agreements the right to declare a default if the Company defaults under other indebtedness in certain circumstances. Should the Company fail to comply with these provisions and be unable to obtain any necessary amendments or waivers, all or a portion of the obligations under the Senior Notes, the Letter of Credit Agreements and the South African Facilities Agreement could become immediately due and payable and the Letter of Credit Agreements and the South African Facilities Agreement could be terminated and the credit, letter of credit, and guarantee facilities provided thereunder would no longer be available.

Pursuant to the terms of the Letter of Credit Agreements, the South African Facilities Agreement, and the Note Purchase Agreements, the Company is required to indemnify the lenders and others with respect to certain losses, liabilities and costs, those relating to income and other taxes, increased costs suffered as a result of, among other things, changes in laws or regulations, or other requirements which may be imposed by regulatory authorities from time to time, and increased costs suffered as a result of a default under the agreements. The indemnification obligations created by each respective agreement arose at the time such agreement was entered into and will continue in accordance with the terms of such agreement. The Company cannot currently estimate the maximum potential amount which could be payable pursuant to its indemnification obligations under these agreements. Liabilities for these indemnification obligations were not material to the Company as a whole as of the dates that each of the respective agreements was entered into. The Company has not recorded any liabilities related to the indemnification obligations as of April 30, 2010.

In addition to the credit, letter of credit, and guarantee facilities provided under the Letter of Credit Agreements and the South African Facilities Agreement, the Company utilizes a number of other financial institutions to provide it with incremental letter of credit, guarantee and working capital capacity, certain of which are working capital and credit facilities, and certain of which are customs bonds and guarantees which are issued by various financial institutions. In many cases, the use of these particular letter of credit, guarantee, and working capital facilities is restricted to the country in which they originated although this is not always the case. These particular borrowing, letter of credit, guarantee, and working capital facilities may restrict distributions by the subsidiary operating in the country. At April 30, 2010, the aggregate amount available for borrowing under these other facilities totaled approximately $141,729. Of this, the amount utilized for customs bonds and other guarantees was approximately $84,088 and the amount utilized for borrowings was approximately $48,667. At April 30, 2010, the total available, unused borrowing capacity under these other facilities was approximately $8,974.

NOTE 12. Uncertain Tax Positions

A reconciliation of the total amounts of unrecognized tax positions and interest recognized in other non-current liabilities at the beginning and end of the period is as follows:

		Uncertain
		Tax
		Positions				Interest
Balance at February 1, 2010		$	8,234			$	2,088
Increase for tax positions taken during the current year			85				—
Interest			—				205
Foreign currency translation			60				20
Balance at April 30, 2010		$	8,379			$	2,313

The Company recognizes interest and penalties related to uncertain tax positions as interest and other expense, respectively. The total amount of unrecognized tax benefits that would favorably affect our effective tax rate if recognized was $6,785 as of April 30, 2010. Tax years 2006 through 2010 generally remain open to examination by major taxing jurisdictions in which we operate. In addition, previously filed tax returns are under review in various other countries in which we operate.

NOTE 13. Restructuring Charges

Fiscal 2009 Information Technology Cost Reduction Plan

During the fourth quarter of fiscal 2009, the Company initiated several changes to its global information technology operations and incurred related restructuring charges. For the three months ended April 30, 2009 amounts charged for employee severance benefits and other exit costs were $887 and $344, respectively. The Company completed all activities under the plan during fiscal 2010.

Employee severance benefits primarily related to the realignment of corporate and regional information technology functions to reduce overhead costs. Under the plan, the Company’s global IT workforce was reduced by approximately 240 employees.

Other exit costs primarily related to consulting fees incurred in connection with the implementation of the plan. These amounts were expensed as incurred.

NOTE 14. Fair Value Disclosures

The Company measures the fair value of certain assets and liabilities on a recurring basis based upon a fair value hierarchy in accordance with ASC 820, Fair Value Measurements and Disclosures, as follows:

	•		Level 1 — Quoted prices in active markets for identical assets or liabilities;
	•		Level 2 — Observable market data, including quoted prices for similar assets and liabilities, and inputs other than quoted prices that are observable, such as interest rates and yield curves; and
	•		Level 3 — Unobservable data reflecting the Company’s own assumptions, where there is little or no market activity for the asset or liability.

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of April 30, 2010, and indicate the fair value hierarchy of the valuation techniques utilized to determine such fair value.

						Fair Value Measurement at Reporting Date Using:
						Quoted Prices
						in Active				Significant
						Markets for				Other
						Identical				Observable				Significant
		Balance at				Assets				Inputs				Unobservable
		April 30, 2010				(Level 1)				(Level 2)				Inputs (Level 3)
Assets
Cash and cash equivalents		$	340,721			$	340,721			$	—			$	—
Forward exchange contracts			159				—				159				—
Other			448				—				—				448
Total		$	341,328			$	340,721			$	159			$	448
Liabilities
Forward exchange contracts		$	280			$	—			$	280			$	—
Other			757				—				—				757
Total		$	1,037			$	—			$	280			$	757

The following methods were used to measure the fair value of assets and liabilities:

Forward Exchange Contracts — The Company’s forward exchange contracts are over-the-counter derivatives, which are valued using pricing models that rely on currency exchange rates, and therefore are classified as Level 2.

Other — Other financial assets and liabilities utilizing Level 3 inputs include minority call and put options granted to the Company and certain of the Company’s minority partners. These call and put options do not have any quoted prices, nor can they be valued using inputs based on observable market data. These investments are valued internally, based on the difference between the estimated strike price and the estimated fair value of the minority partner equity, when the call and put options become exercisable.

The following table presents the changes in Level 3 instruments measured on a recurring basis for the three months ended April 30, 2010:

		Assets				Liabilities
Beginning balance at February 1, 2010		$	476			$	811
Net change in fair value included in earnings			(27	)			(53	)
Translation adjustment			(1	)			(1	)
Ending balance at April 30, 2010		$	448			$	757

NOTE 15. Derivative Financial Instruments

The Company generally utilizes forward exchange contracts to reduce its exposure to foreign currency denominated assets and liabilities. Foreign exchange contracts purchased are primarily denominated in the currencies of the Company’s principal markets. The Company does not enter into derivative contracts for speculative purposes.

As of April 30, 2010, the Company had contracted to sell the following amounts under forward exchange contracts which all mature within 60 days of April 30, 2010: $5,387 in Euros; $10,602 in U.S. dollars; $1,201 in British pound sterling; and, $2,192 in other currencies. Changes in the fair value of forward exchange contracts are recorded within purchased transportation costs in the consolidated statements of income.

The Company does not designate foreign currency derivatives as hedges. Foreign currency derivative assets included in trade receivables were $159 and $273 at April 30, 2010 and January 31, 2010, respectively. Foreign currency liability derivatives included in trade payables and other accrued liabilities were $280 and $294 at April 30, 2010 and January 31, 2010, respectively. The Company recorded net losses on foreign currency derivatives of $121 and $265 for the three months ended April 30, 2010 and 2009, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “UTi” and the “company” refer to UTi Worldwide Inc. and its subsidiaries as a consolidated entity, except where it is noted or the context makes clear the reference is only to UTi Worldwide Inc.

Overview

We are an international, non-asset-based supply chain services and solutions company that provides airfreight and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves its customers through a worldwide network of freight forwarding offices, and contract logistics and distribution centers.

The company’s operations are principally managed by core business operations. The factors for determining the reportable segments include the manner in which management evaluates the performance of the company combined with the nature of the individual business activities. As discussed above in Note 1 “Presentation of Financial Statements” of our Notes to the Consolidated Financial Statements, our operations are broken into the following reportable segments: Freight Forwarding and Contract Logistics and Distribution. Certain corporate office expenses, eliminations, and various holding companies within the group structure are presented separately.

Freight Forwarding Segment. As a freight forwarder, we conduct business as an indirect carrier for our clients or occasionally as an authorized agent for airlines and ocean carriers. We typically act as an indirect carrier with respect to shipments of freight unless the volume of freight to be shipped over a particular route is not large enough to warrant consolidating such freight with other shipments. In such situations, we usually forward the freight as an agent for the carrier.

We do not own or operate aircraft or vessels and consequently, contract with commercial carriers to arrange for the shipment of cargo. A majority of our freight forwarding business is conducted through non-committed space allocations with carriers. We arrange for, and in many cases provide, pick-up and delivery service between the carrier and the location of the shipper or recipient.

When we act as an authorized agent for the airline or ocean carrier, we arrange for the transportation of individual shipments to the airline or ocean carrier. As compensation for arranging for the shipments, the carriers pay us a commission. If we provide the client with ancillary services, such as the preparation of export documentation, we receive an additional fee.

As part of our freight forwarding services, we provide customs brokerage services in the United States (U.S.) and most of the other countries in which we operate. Within each country, the rules and regulations vary, along with the level of expertise that is required to perform the customs brokerage services. We provide customs brokerage services in connection with a majority of the shipments which we handle as both an airfreight and ocean freight forwarder. We also provide customs brokerage services in connection with shipments forwarded by our competitors. In addition, other companies may provide customs brokerage services in connection with the shipments which we forward.

As part of our customs brokerage services, we prepare and file formal documentation required for clearance through customs agencies, obtain customs bonds, facilitate the payment of import duties on behalf of the importer, arrange for payment of collect freight charges, assist with determining and obtaining the best commodity classifications for shipments and perform other related services. We determine our fees for our customs brokerage services based on the volume of business transactions for a particular client, and the type, number and complexity of services provided. Revenues from customs brokerage and related services are recognized upon completion of the services.

We believe that for the Freight Forwarding segment, net revenue (the term used by the company to describe revenue less purchased transportation costs) is a better measure of growth in our freight forwarding business than revenue because our revenue for our services as an indirect air and ocean carrier includes the carriers’ charges to us for carriage of the shipment. Our revenues are also impacted by changes in fuel and similar surcharges, which have little relation to the volume or value of our services provided. When we act as an indirect air and ocean carrier, our net revenue is determined by the differential between the rates charged to us by the carrier and the rates we charge our customers plus the fees we receive for our ancillary services. Within our company, revenue derived from freight forwarding generally is shared between the points of origin and destination, based on a standard formula. Our revenue in our other capacities includes only commissions and fees earned by us and is substantially similar to net revenue for the Freight Forwarding segment in this respect.

A significant portion of our expenses are variable and adjust to reflect the level of our business activities. Other than purchased transportation costs, staff costs are our single largest variable expense and are less flexible in the near term.

Contract Logistics and Distribution Segment. Our contract logistics services primarily relate to the value-added warehousing and subsequent distribution of goods and materials in order to meet clients’ inventory needs and production or distribution schedules. Our services include receiving, deconsolidation and decontainerization, sorting, put away, consolidation, assembly, cargo loading and unloading, assembly of freight and protective packaging, storage and distribution. Our outsourced services include inspection services, quality centers and manufacturing support. Contract logistics revenues are recognized when the service has been completed in the ordinary course of business.

We also provide a range of distribution and other supply chain management services, such as domestic ground transportation, warehousing services, consulting, order management, planning and optimization services, outsourced management services, developing specialized client-specific supply chain solutions, and customized distribution and inventory management services. We receive fees for the other supply chain management services that we perform.

In contrast to the Freight Forwarding segment, we believe revenue is a better measure of the growth in our contract logistics and distribution business because this segment does not incur carrier costs (and related fuel surcharges) in the same manner as freight forwarding, and purchased transportation costs under this segment primarily relate to the truck brokerage operation in the Americas region.

CLIENTasONE Strategy

As we enter our third year of our five-year strategic plan, which we refer to as “CLIENTasONE,” we continue to undertake various efforts to increase the number and size of our clients and our revenue, improve our operational performance, streamline our back-end operations, develop and implement new systems and train and develop our employees. We have made progress in achieving our objectives, which involves leveraging client relationships, integrating acquisitions, controlling costs, improving our systems and processes and implementing effective change management processes. We continue to face challenges developing, training and recruiting personnel. This strategic operating plan requires that we successfully manage our operations and growth which we may not be able to do as well as we anticipate. Our industry is extremely competitive and our business is subject to numerous factors and risks beyond our control. If we are not able to successfully implement CLIENTasONE, our efforts associated with this strategic plan may not result in increased revenues or improved profitability. If we are not able to increase our revenue or improve our profitability in the future, our results of operations could be adversely affected.

As a central part of our CLIENTasONE strategy, we are continuing a technology-enabled, business transformation initiative, which we refer to as “4asONE.” This program is aimed at establishing a single system and set of global processes for our freight forwarding business and global financial management. It is designed to increase efficiency through the adoption of shared services and enabling technologies. In order to achieve this goal, we intend to deploy enabling technologies to support enterprise master data management, financial management and freight forwarding operations management. As with any significant IT-enabled business transformation, we face various challenges and risks with regard to our 4asONE program, including risks associated with cost increases and changes to our scope, anticipated cost structure, technical difficulties and delays associated with the development and implementation of 4asONE. As a result of these and other issues, the anticipated costs, expected benefits, overall scope and/or deployment schedule may change, and these changes may be material.

Fiscal 2009 Information Technology Cost Reduction Plan and Other Cost Reductions

On December 3, 2008, the company’s Executive Board approved an information technology restructuring plan designed to consolidate the company’s information technology resources, eliminate redundancies, reduce costs and improve client services. The information technology restructuring plan included outsourcing certain information technology functions and support, which ultimately resulted in a reduction in the company’s global information technology workforce by approximately 240 employees.

During the three months ended April 30, 2009, the company incurred aggregate pre-tax restructuring charges of $1.2 million. The company completed the information technology restructuring plan during fiscal 2010. All costs associated with the plan were cash expenditures.

In addition to the restructuring charges described above, during the three months ended April 30, 2009, the company incurred approximately $1.2 million in advisory and ancillary costs associated with the plan.

Effect of Foreign Currency Translation on Comparison of Results

Our reporting currency is the U.S. dollar. However, due to our global operations, we conduct and will continue to conduct business in currencies other than our reporting currency. The conversion of these currencies into our reporting currency for reporting purposes will be affected by movements in these currencies against the U.S. dollar. A depreciation of these currencies against the U.S. dollar would result in lower revenues reported; however, as applicable costs are also converted from these currencies, costs would also be lower. Similarly, the opposite effect will occur if these currencies appreciate against the U.S. dollar. Additionally, the assets and liabilities of our international operations are denominated in each country’s local currency. As such, when the values of those assets and liabilities are translated into U.S. dollars, foreign currency exchange rates may adversely impact the net carrying value of our assets. We cannot predict the effects of foreign currency exchange rate fluctuations on our future operating results.

Acquisitions

Acquisitions affect the comparison of our results between periods prior to when acquisitions are made and to the comparable periods in subsequent years, depending on the date of acquisition (e.g., acquisitions made on February 1, the first day of the first quarter of our fiscal year, will only affect a comparison with the prior year’s results and will not affect a comparison to the following year’s results). The results of acquired operations are included in our consolidated financial statements from the dates of their respective acquisitions. We consider the operating results of an acquired company during the first twelve months following the date of its acquisition to be an “acquisition impact” or a “benefit from acquisitions.” Thereafter, we consider the growth in an acquired company’s results to be “organic growth.”

Effective December 21, 2009, the company acquired the remaining outstanding shares of an Israeli subsidiary, Excel MPL-A.V.B.A., LP (EMA Israel), of which the company had already held a 50% ownership interest that was acquired through its acquisition of the Israeli subsidiary’s parent company in the beginning of fiscal 2010. The purchase price totaled $6.5 million, including the repayment of a $0.5 million loan and contingent consideration estimated to be $0.3 million which is based on projected net revenues from a particular customer for the following four years. The contingent consideration was accrued as an obligation through an increase to goodwill. The acquisition eliminated a minority shareholder in Israel. The purchase price exceeded the fair value of the noncontrolling interest received and net assets acquired, and accordingly, $2.0 million was allocated to goodwill, all of which is included with the company’s Contract Logistics and Distribution segment. The company is currently determining whether the goodwill is deductible for tax purposes. The estimated purchase price allocation is preliminary and is subject to revision. A valuation of the additional net assets acquired is being conducted and the final allocation will be made when completed.

Effective October 16, 2009, the company acquired all of the issued and outstanding shares of Tacisa Transitaria, S.L. (Tacisa), a Spanish freight forwarder. An employee of one of the company’s Spanish subsidiaries held a majority ownership interest in Tacisa prior to the company’s acquisition. The purchase price totaled $5.5 million, net of cash acquired of $0.8 million, and including contingent consideration estimated to be $4.7 million based on projected fiscal 2010 operating results of Tacisa. The contingent consideration was accrued as an obligation with a corresponding increase to goodwill. The acquisition expanded the company’s freight forwarding coverage in Spain. The total cost of the acquisition has been allocated to the assets acquired and the liabilities assumed based on their estimated fair values at the date of acquisition. The preliminary allocation resulted in an excess of the purchase price over the fair value of the acquired net assets, and accordingly, $2.5 million was allocated to goodwill, all of which is included in the company’s Freight Forwarding segment. The company is currently determining whether the goodwill is deductible for tax purposes.

The Tacisa preliminary allocation of the purchase price as of the date of acquisition resulted in total assets acquired and liabilities assumed of $9.3 million and $3.1 million, respectively. Total assets acquired at estimated fair value was comprised of current assets of $3.2 million, comprised primarily of trade receivables, and noncurrent assets of $6.1 million, of which $2.5 million and $3.5 million have been allocated to goodwill and intangible assets, respectively. The amortization period of the client contracts and relationships acquired is currently being assessed by the company. Total liabilities assumed at estimated fair value were comprised of current liabilities of $2.1 million, primarily related to trade payables and other accrued liabilities, and noncurrent liabilities of $1.0 million. The estimated purchase price allocation is preliminary and is subject to revision. A valuation of the assets acquired and liabilities assumed is being conducted and the final allocation will be made when completed.

Seasonality

Historically, our operating results have been subject to seasonal trends when measured on a quarterly basis. Our first and fourth fiscal quarters are traditionally weaker compared with our other fiscal quarters. This trend is dependent on numerous factors, including the markets in which we operate, holiday seasons, climate, economic conditions and numerous other factors. A substantial portion of our revenue is derived from clients in industries whose shipping patterns are tied closely to consumer demand or are based on just-in-time production schedules. We cannot accurately predict the timing of these factors, nor can we accurately estimate the impact of any particular factor, and thus we can give no assurance that these historical seasonal patterns will continue in future periods.

Forward-Looking Statements, Uncertainties and Other Factors

Except for historical information contained herein, this quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), which involve certain risks and uncertainties. Forward-looking statements are included with respect to, among other things, the company’s current business plan and strategy and strategic operating plan, anticipated changes in certain tax benefits, anticipated costs, benefits and timing associated with our 4asONE technology-enabled, business transformation initiative, the anticipated outcome of litigation, the company’s ability to meet its capital and liquidity requirements for the foreseeable future, the anticipated impact of various cost reduction efforts, and all other statements concerning future matters. These forward-looking statements are identified by the use of such terms and phrases as “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled” and other similar expressions which generally identify forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could

differ materially from those set forth in, contemplated by, or underlying our forward-looking statements. Many important factors may cause the company’s actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to the economic volatility that has materially impacted trade volumes, transportation capacity, pricing dynamics and overall margins; the financial condition of many of our customers; the impact of sharply rising freight transportation rates on the company’s net revenue; planned or unplanned consequences of the company’s sales initiatives, procurement initiatives and business transformation efforts; our clients’ demand for our services; the impact of cost reduction measures undertaken by the company and the amount and timing of the expected benefits from such measures; integration risks associated with acquisitions; the ability to retain clients and management of acquisition targets; increased competition; the impact of volatile fuel costs and changes in foreign exchange rates; changes in the company’s effective tax rates; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including those in Africa, Asia and EMENA which is comprised of Europe, Middle East and North Africa; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; risks associated with, and costs and expenses the company will incur as a result of, the ongoing publicly announced investigations by the U.S. Department of Justice, the European Commission (EC) and other governmental agencies into the pricing practices of the international freight forwarding and cargo transportation industry and other similar or related investigations and lawsuits; the success and effects of new strategies and of the realignment of the company’s executive management structure; disruptions caused by epidemics, conflicts, wars and terrorism; and the other risks and uncertainties described herein and in our other filings with the Securities and Exchange Commission (SEC); and other factors outside our control. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, we cannot assure you that the results contemplated in forward-looking statements will be realized in the timeframe anticipated or at all. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi’s objectives or plans will be achieved. Accordingly, investors are cautioned not to place undue reliance on our forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition to the risks, uncertainties and other factors discussed elsewhere in this Form 10-Q, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in any forward-looking statements include, without limitation, those set forth under Part I. Item 1A “Risk Factors” in the company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2010 filed with the SEC (together with any amendments thereto and additions and changes thereto contained in subsequent filings of quarterly reports on Form 10-Q), those contained in the company’s other filings with the SEC, and those set forth above. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements in Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act.

Discussion of Results

The following discussion of our operating results explains material changes in our consolidated results for the first quarter of fiscal 2011 compared to the first quarter of fiscal 2010. The discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this quarterly report and our audited consolidated financial statements and notes thereto for the year ended January 31, 2010, which are included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010, on file with the SEC. Our consolidated financial statements included in this report have been prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States (U.S. GAAP).

Segment Operating Results

The company’s operations are principally managed by core business operations. As discussed above in Note 1 “Presentation of Financial Statements” of our Notes to the Consolidated Financial Statements, our operations are broken into the following reportable segments: Freight Forwarding and Contract Logistics and Distribution. Certain corporate costs are allocated to the operating segments directly. The remaining corporate costs are those that are not specifically attributable to operating segments and are presented separately. The factors for determining the reportable segments include the manner in which management evaluates the performance of the company combined with the nature of the individual business activities.

For segment reporting purposes by geographic region, airfreight and ocean freight forwarding revenues for the movement of goods is attributed to the country where the shipment originates. Revenues for all other services (including contract logistics and distribution services) are attributed to the country where the services are performed. For the purposes of this management’s discussion and analysis, net revenue is the term management uses to describe revenues minus purchased transportation costs. Our revenues, purchased transportation costs and operating income by operating segment for the three months ended April 30, 2010 and 2009, along with the dollar amount of the changes and the percentage changes between the time periods shown, are set forth in the following tables (in thousands):

		Three months ended April 30,
		2010																2009
						Contract																Contract
						Logistics																Logistics
		Freight				and												Freight				and
		Forwarding				Distribution				Corporate				Total				Forwarding				Distribution				Corporate				Total
Revenues		$	721,774			$	333,382			$	—			$	1,055,156			$	493,590			$	274,766			$	—			$	768,356
Purchased transportation costs			562,335				127,073				—				689,408				359,364				99,485				—				458,849
Staff costs			94,390				106,977				5,634				207,001				80,905				91,378				3,520				175,803
Depreciation			3,832				7,228				352				11,412				3,627				6,128				99				9,854
Amortization of intangible assets			1,030				2,314				—				3,344				826				1,811				—				2,637
Restructuring charges			—				—				—				—				—				—				1,231				1,231
Other operating expenses			46,370				73,024				5,645				125,039				37,865				65,491				(1,226	)			102,130
Total operating expenses			707,957				316,616				11,631				1,036,204				482,587				264,293				3,624				750,504
Operating income/(loss)		$	13,817			$	16,766			$	(11,631	)		$	18,952			$	11,003			$	10,473			$	(3,624	)		$	17,852