Attached files
| file | filename |
|---|---|
| 8-K - 8-K - EXPEDITORS INTERNATIONAL OF WASHINGTON INC | a20134qer8-k.htm |
Exhibit 99.1
EARNINGS RELEASE
By: Expeditors International of Washington, Inc.
1015 Third Avenue, Suite 1200
Seattle, Washington 98104
CONTACTS: | R. Jordan Gates Bradley S. Powell |
President and Chief Operating Officer Senior Vice President and Chief Financial Officer
(206) 674-3427 (206) 674-3412
FOR IMMEDIATE RELEASE | ||||
EXPEDITORS REPORTS FOURTH QUARTER 2013 EPS OF $.41 PER SHARE 1
SEATTLE, WASHINGTON - February 25, 2014, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings attributable to shareholders of $83,496,000 for the fourth quarter of 2013, as compared with $84,208,000 for the same quarter of 2012, a decrease of (1)%. Net revenues2 for the fourth quarter of 2013 increased 4% to $478,072,000 as compared with $461,510,000 reported for the fourth quarter of 2012. Total revenues and operating income were $1,625,859,000 and $133,663,000 in 2013, as compared with $1,535,729,000 and $128,025,000 for the same quarter of 2012, increases of 6% and 4%, respectively. Diluted net earnings attributable to shareholders per share for the fourth quarter were $.41, as compared with $.40 for the same quarter in 2012, an increase of 2%.
For the year ended December 31, 2013, net earnings attributable to shareholders was $348,526,000, as compared with $333,360,000 in 2012, an increase of 5%. Net revenues for the year increased to $1,882,853,000 from $1,835,370,000 for 2012, up 3%. Total revenues and operating income for the year were $6,080,257,000 and $552,073,000 in 2013, as compared with $5,992,215,000 and $530,798,000 for the same period in 2012, increases of 1% and 4%, respectively. Diluted net earnings attributable to shareholders per share for the year ended December 31, 2013 were $1.68, as compared with $1.57 for the same period of 2012, an increase of 7%.
“Our 2013 fourth quarter showed steady growth in airfreight and ocean freight services, both in revenue and in volumes, said Peter J. Rose, Chairman and Chief Executive Officer. “Airfreight volumes rose 5% while ocean freight volumes were up nearly 16%, as compared with the fourth quarter 2012. Airfreight pricing remained remarkably consistent with the 2012 fourth quarter while pricing in the ocean freight market continued to be weak and somewhat volatile, reflecting the underlying economic challenges that faced ocean freight carriers caused primarily by overcapacity concerns. We also saw the impact of these volume increases spill over into customs brokerage and other services. While it is increasingly acknowledged that the state of the global economy is still not nearly as robust as government, economic and financial pundits would all have us believe, we’ve still found ways to grow profitably while remaining true to the fundamental principles which have been the catalyst for developing this company that had 6 offices and 20 people in 1981 into the $6 billion, nearly 14,000 person, Fortune 500 company it is today,” Rose went on to say.
“The Greek philosopher Heraclitus, 2,500 years ago, coined the phrase, 'Change is the only constant in life.' While the subject of change is currently very topical at Expeditors, the irony of this statement, is that we’ve always believed change can only be effectively managed from a touchstone of constancy. Reflecting back on my career at Expeditors, particularly the last 25 years that I've been privileged to serve as CEO, I am amazed at the changes that have occurred in the world in general and in our industry in specific. We’ve always embraced those things that must change, like technology, customer expectations, regulatory requirements etc., while at the same time reinforcing the specific things that must never change, like our culture, our values and our commitment to exceptional customer service,” Rose continued. “We have the best people, we have great customers and we'll soon have an outstanding new CEO who will be backed by an experienced and vibrant leadership team. What we do to serve our customers will continuously evolve. Our commitment to our customers, to our values and to each other, must never change. For a quarter of a century, it’s been a pleasure and an honor to lead the superb group of people who make up this great company. I’ll miss every aspect of being CEO…even, believe it or not, the good natured (at least from our perspective) sparring with the analysts. I’ll close by saying a heart-felt thank you to everyone who has contributed to making Expeditors what it is today. I’ll also thank in advance those who will assist me in my transition to being 'just' the Chairman of the Board and in supporting Jeff Musser as he becomes our new CEO,” Rose concluded.
Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 185 full-service offices and numerous satellite locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, domestic time-definite transportation services, purchase order management, warehousing and distribution and customized logistics solutions.
________________________
1 Diluted earnings attributable to shareholders per share.
2 Non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. See reconciliation on the last page of this release.
NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release.
Expeditors International of Washington, Inc.
4th Quarter 2013 Earnings Release, February 25, 2014
Financial Highlights for the Three months and Years ended December 31, 2013 and 2012 (Unaudited)
(in 000's of US dollars except share data)
Three months ended December 31, | Years ended December 31, | ||||||||||||||||||
2013 | 2012 | % Increase (Decrease) | 2013 | 2012 | % Increase | ||||||||||||||
Revenues | $ | 1,625,859 | $ | 1,535,729 | 6% | $ | 6,080,257 | $ | 5,992,215 | 1% | |||||||||
Net revenues | $ | 478,072 | $ | 461,510 | 4% | $ | 1,882,853 | $ | 1,835,370 | 3% | |||||||||
Operating income3, 4 | $ | 133,663 | $ | 128,025 | 4% | $ | 552,073 | $ | 530,798 | 4% | |||||||||
Net earnings attributable to shareholders | $ | 83,496 | $ | 84,208 | (1)% | $ | 348,526 | $ | 333,360 | 5% | |||||||||
Diluted earnings attributable to shareholders | $ | .41 | $ | .40 | 2% | $ | 1.68 | $ | 1.57 | 7% | |||||||||
Basic earnings attributable to shareholders | $ | .41 | $ | .41 | —% | $ | 1.69 | $ | 1.58 | 7% | |||||||||
Diluted weighted average shares outstanding | 205,526,229 | 208,963,216 | 206,895,473 | 211,935,171 | |||||||||||||||
Basic weighted average shares outstanding | 204,558,152 | 207,766,619 | 205,994,656 | 210,422,945 | |||||||||||||||
_______________________
3In the fourth quarter of 2013 the Company recorded $8 million of additional Salary and related costs related to the retirement bonus of Peter J. Rose, the Company’s Chairman and Chief Executive Officer, whose retirement was announced on October 7, 2013.
4In the fourth quarter of 2012, the Company recorded approximately $8.4 million in Other operating expenses related to certain foreign indirect withholding taxes that were determined to be non-creditable and approximately $3 million of Rent and occupancy costs associated with a decision not to continue the pursuit of certain real estate projects that had been recorded under construction in process.
Employee headcount as of December 31, | |||||
2013 | 2012 | ||||
North America | 4,860 | 4,726 | |||
Asia Pacific | 3,952 | 3,914 | |||
Europe and Africa | 2,277 | 2,332 | |||
Middle East | 1,222 | 1,236 | |||
South America | 685 | 672 | |||
Information Systems | 630 | 600 | |||
Corporate | 295 | 248 | |||
Total | 13,921 | 13,728 | |||
Year-over-year percentage increase (decrease) in: | ||||||
Airfreight kilos | Ocean freight FEU | |||||
2013 | ||||||
October | 6 | % | 15 | % | ||
November | 11 | % | 17 | % | ||
December | (3 | )% | 16 | % | ||
Quarter | 5 | % | 16 | % | ||
Disclaimer on Forward-Looking Statements:
Certain portions of this release contain forward-looking statements which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including comments on ongoing price volatility overcapacity and volumes in the ocean markets, positive trends in air tonnage and ocean volumes, ability to maintain or grow market share, strength of the global economy, and ability to effectively manage change, including transition to a new CEO. Actual future results and trends may differ materially from historical results or those projected in any forward-looking statements depending on a variety of factors including, but not limited to, our ability to maintain consistent and stable operating results, future success of our business model, ability to perpetuate profits, changes in customer demand for Expeditors’ services caused by a general economic slow-down, customers’ inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, foreign exchange rates, regulatory actions or changes or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual Report as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
December 31, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,247,652 | $ | 1,260,842 | |||
Short-term investments | 26,337 | 139 | |||||
Accounts receivable, net | 1,073,500 | 1,031,376 | |||||
Deferred Federal and state income taxes | 18,396 | 12,102 | |||||
Other current assets | 49,384 | 53,140 | |||||
Total current assets | 2,415,269 | 2,357,599 | |||||
Property and equipment, net | 563,064 | 556,204 | |||||
Goodwill | 7,927 | 7,927 | |||||
Other assets, net | 28,552 | 32,395 | |||||
$ | 3,014,812 | $ | 2,954,125 | ||||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 648,156 | $ | 641,593 | |||
Accrued expenses, primarily salaries and related costs | 200,301 | 178,995 | |||||
Federal, state and foreign income taxes | 21,743 | 21,970 | |||||
Total current liabilities | 870,200 | 842,558 | |||||
Deferred Federal and state income taxes | 58,281 | 78,997 | |||||
Commitments and contingencies | |||||||
Shareholders’ Equity: | |||||||
Preferred stock; none issued | — | — | |||||
Common stock, par value $.01 per share; issued and outstanding 202,553,220 shares at December 31, 2013 and 206,392,013 shares at December 31, 2012 | 2,025 | 2,064 | |||||
Additional paid-in capital | 1,647 | 1,283 | |||||
Retained earnings | 2,087,376 | 2,018,618 | |||||
Accumulated other comprehensive (loss) income | (6,265 | ) | 5,734 | ||||
Total shareholders’ equity | 2,084,783 | 2,027,699 | |||||
Noncontrolling interest | 1,548 | 4,871 | |||||
Total equity | 2,086,331 | 2,032,570 | |||||
$ | 3,014,812 | $ | 2,954,125 | ||||
February 25, 2014 | Expeditors International of Washington, Inc. | Page 3 of 7 |
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
Airfreight services | $ | 742,371 | $ | 700,785 | $ | 2,633,830 | $ | 2,600,916 | |||||||
Ocean freight and ocean services | 495,552 | 472,307 | 1,958,231 | 1,974,891 | |||||||||||
Customs brokerage and other services | 387,936 | 362,637 | 1,488,196 | 1,416,408 | |||||||||||
Total revenues | 1,625,859 | 1,535,729 | 6,080,257 | 5,992,215 | |||||||||||
Operating Expenses: | |||||||||||||||
Airfreight services | 579,740 | 546,395 | 1,994,374 | 1,983,696 | |||||||||||
Ocean freight and ocean services | 386,041 | 364,251 | 1,521,340 | 1,542,170 | |||||||||||
Customs brokerage and other services | 182,006 | 163,573 | 681,690 | 630,979 | |||||||||||
Salaries and related costs | 267,002 | 246,096 | 1,032,601 | 995,052 | |||||||||||
Rent and occupancy costs | 24,990 | 27,343 | 98,437 | 98,580 | |||||||||||
Depreciation and amortization | 12,490 | 10,695 | 48,071 | 39,940 | |||||||||||
Selling and promotion | 9,352 | 8,814 | 33,243 | 34,184 | |||||||||||
Other | 30,575 | 40,537 | 118,428 | 136,816 | |||||||||||
Total operating expenses | 1,492,196 | 1,407,704 | 5,528,184 | 5,461,417 | |||||||||||
Operating income | 133,663 | 128,025 | 552,073 | 530,798 | |||||||||||
Interest income | 2,530 | 3,522 | 11,810 | 12,763 | |||||||||||
Other, net | 1,645 | 1,845 | 8,713 | 6,832 | |||||||||||
Other income, net | 4,175 | 5,367 | 20,523 | 19,595 | |||||||||||
Earnings before income taxes | 137,838 | 133,392 | 572,596 | 550,393 | |||||||||||
Income tax expense | 53,829 | 49,893 | 222,585 | 217,424 | |||||||||||
Net earnings | 84,009 | 83,499 | 350,011 | 332,969 | |||||||||||
Less net earnings (losses) attributable to the noncontrolling interest | 513 | (709 | ) | 1,485 | (391 | ) | |||||||||
Net earnings attributable to shareholders | $ | 83,496 | $ | 84,208 | $ | 348,526 | $ | 333,360 | |||||||
Diluted earnings attributable to shareholders per share | $ | .41 | $ | .40 | $ | 1.68 | $ | 1.57 | |||||||
Basic earnings attributable to shareholders per share | $ | .41 | $ | .41 | $ | 1.69 | $ | 1.58 | |||||||
Dividends declared and paid per common share | $ | .30 | $ | .28 | $ | .60 | $ | .56 | |||||||
Weighted average diluted shares outstanding | 205,526,229 | 208,963,216 | 206,895,473 | 211,935,171 | |||||||||||
Weighted average basic shares outstanding | 204,558,152 | 207,766,619 | 205,994,656 | 210,422,945 | |||||||||||
February 25, 2014 | Expeditors International of Washington, Inc. | Page 4 of 7 |
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Operating Activities: | |||||||||||||||
Net earnings | $ | 84,009 | $ | 83,499 | $ | 350,011 | $ | 332,969 | |||||||
Adjustments to reconcile net earnings to net cash from operating activities: | |||||||||||||||
(Recoveries) provision for losses on accounts receivable | (421 | ) | 302 | 2,116 | (90 | ) | |||||||||
Deferred income tax (benefit) expense | (730 | ) | 7,309 | (20,975 | ) | 11,639 | |||||||||
Excess tax benefits from stock plans | (656 | ) | (1,110 | ) | (2,339 | ) | (5,401 | ) | |||||||
Stock compensation expense | 10,753 | 11,212 | 43,813 | 44,058 | |||||||||||
Depreciation and amortization | 12,490 | 10,695 | 48,071 | 39,940 | |||||||||||
Other | 208 | 3,181 | 844 | 4,864 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Increase in accounts receivable | (50,093 | ) | (16,044 | ) | (64,575 | ) | (89,856 | ) | |||||||
Decrease (increase) in other current assets | 3,263 | 3,566 | (2,015 | ) | (63 | ) | |||||||||
Increase (decrease) in accounts payable and accrued expenses | 9,335 | (30,341 | ) | 44,150 | 30,625 | ||||||||||
(Decrease) in income taxes payable, net | (6,205 | ) | (11,520 | ) | 8,435 | 1,441 | |||||||||
Net cash from operating activities | 61,953 | 60,749 | 407,536 | 370,126 | |||||||||||
Investing Activities: | |||||||||||||||
Decrease (increase) in short-term investments, net | 73,489 | 131 | (26,201 | ) | 342 | ||||||||||
Purchase of property and equipment | (10,720 | ) | (10,554 | ) | (53,411 | ) | (47,626 | ) | |||||||
Other | 1,680 | 15 | 2,806 | 290 | |||||||||||
Net cash from investing activities | 64,449 | (10,408 | ) | (76,806 | ) | (46,994 | ) | ||||||||
Financing Activities: | |||||||||||||||
Proceeds from issuance of common stock | 7,660 | 7,510 | 59,752 | 52,511 | |||||||||||
Repurchases of common stock | (136,730 | ) | (108,921 | ) | (261,936 | ) | (302,414 | ) | |||||||
Excess tax benefits from stock plans | 656 | 1,110 | 2,339 | 5,401 | |||||||||||
Dividends paid | (61,393 | ) | (57,905 | ) | (123,292 | ) | (117,263 | ) | |||||||
Purchase of noncontrolling interest | — | — | (7,730 | ) | — | ||||||||||
Distribution to noncontrolling interest | — | (105 | ) | (1,161 | ) | (1,282 | ) | ||||||||
Net cash from financing activities | (189,807 | ) | (158,311 | ) | (332,028 | ) | (363,047 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 727 | 1,170 | (11,892 | ) | 6,401 | ||||||||||
Decrease in cash and cash equivalents | (62,678 | ) | (106,800 | ) | (13,190 | ) | (33,514 | ) | |||||||
Cash and cash equivalents at beginning of period | 1,310,330 | 1,367,642 | 1,260,842 | 1,294,356 | |||||||||||
Cash and cash equivalents at end of period | $ | 1,247,652 | $ | 1,260,842 | $ | 1,247,652 | $ | 1,260,842 | |||||||
Taxes paid: | |||||||||||||||
Income taxes | $ | 61,169 | $ | 52,168 | $ | 235,368 | $ | 207,174 | |||||||
February 25, 2014 | Expeditors International of Washington, Inc. | Page 5 of 7 |
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands) (Unaudited)
UNITED STATES | OTHER NORTH AMERICA | LATIN AMERICA | ASIA PACIFIC | EUROPE and AFRICA | MIDDLE EAST and INDIA | ELIMI- NATIONS | CONSOLI- DATED | |||||||||||||||||
Three months ended December 31, 2013: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 394,835 | 54,651 | 22,629 | 844,148 | 229,823 | 79,773 | — | 1,625,859 | |||||||||||||||
Transfers between geographic areas | 24,262 | 3,067 | 5,578 | 12,388 | 10,036 | 4,478 | (59,809 | ) | — | |||||||||||||||
Total revenues | $ | 419,097 | 57,718 | 28,207 | 856,536 | 239,859 | 84,251 | (59,809 | ) | 1,625,859 | ||||||||||||||
Net revenues | $ | 197,560 | 27,388 | 15,918 | 139,239 | 73,387 | 24,580 | — | 478,072 | |||||||||||||||
Operating income | $ | 34,509 | 12,201 | 1,727 | 59,682 | 17,506 | 8,038 | — | 133,663 | |||||||||||||||
Identifiable assets | $ | 1,582,557 | 104,735 | 58,027 | 669,040 | 445,722 | 148,626 | 6,105 | 3,014,812 | |||||||||||||||
Capital expenditures | $ | 6,503 | 336 | 459 | 2,404 | 684 | 334 | — | 10,720 | |||||||||||||||
Depreciation and amortization | $ | 7,928 | 267 | 221 | 2,106 | 1,531 | 437 | — | 12,490 | |||||||||||||||
Equity | $ | 1,330,262 | 72,772 | 29,590 | 408,824 | 196,087 | 83,174 | (34,378 | ) | 2,086,331 | ||||||||||||||
Three months ended December 31, 2012: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 381,638 | 51,557 | 20,887 | 800,835 | 210,352 | 70,460 | — | 1,535,729 | |||||||||||||||
Transfers between geographic areas | 25,386 | 2,868 | 4,770 | 11,035 | 10,097 | 4,300 | (58,456 | ) | — | |||||||||||||||
Total revenues | $ | 407,024 | 54,425 | 25,657 | 811,870 | 220,449 | 74,760 | (58,456 | ) | 1,535,729 | ||||||||||||||
Net revenues | $ | 188,796 | 25,029 | 14,258 | 136,528 | 73,514 | 23,385 | — | 461,510 | |||||||||||||||
Operating income | $ | 28,201 | 11,045 | 4,237 | 57,933 | 18,804 | 7,805 | — | 128,025 | |||||||||||||||
Identifiable assets | $ | 1,459,425 | 92,075 | 48,995 | 776,902 | 428,053 | 147,871 | 804 | 2,954,125 | |||||||||||||||
Capital expenditures | $ | 7,412 | 281 | 241 | 1,452 | 794 | 374 | — | 10,554 | |||||||||||||||
Depreciation and amortization | $ | 6,358 | 200 | 229 | 1,850 | 1,605 | 453 | — | 10,695 | |||||||||||||||
Equity | $ | 1,197,239 | 58,071 | 29,504 | 538,710 | 167,752 | 74,950 | (33,656 | ) | 2,032,570 | ||||||||||||||
Twelve months ended December 31, 2013: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 1,561,468 | 215,968 | 86,050 | 3,065,412 | 850,863 | 300,496 | — | 6,080,257 | |||||||||||||||
Transfers between geographic areas | 89,570 | 11,038 | 21,711 | 46,704 | 37,463 | 17,837 | (224,323 | ) | — | |||||||||||||||
Total revenues | $ | 1,651,038 | 227,006 | 107,761 | 3,112,116 | 888,326 | 318,333 | (224,323 | ) | 6,080,257 | ||||||||||||||
Net revenues | $ | 770,519 | 102,864 | 61,478 | 563,705 | 286,018 | 98,269 | — | 1,882,853 | |||||||||||||||
Operating income | $ | 195,799 | 35,224 | 15,734 | 225,322 | 52,939 | 27,055 | — | 552,073 | |||||||||||||||
Identifiable assets | $ | 1,582,557 | 104,735 | 58,027 | 669,040 | 445,722 | 148,626 | 6,105 | 3,014,812 | |||||||||||||||
Capital expenditures | $ | 28,699 | 1,870 | 1,010 | 17,262 | 3,148 | 1,422 | — | 53,411 | |||||||||||||||
Depreciation and amortization | $ | 29,569 | 882 | 901 | 8,420 | 6,244 | 2,055 | — | 48,071 | |||||||||||||||
Equity | $ | 1,330,262 | 72,772 | 29,590 | 408,824 | 196,087 | 83,174 | (34,378 | ) | 2,086,331 | ||||||||||||||
Twelve months ended December 31, 2012: | ||||||||||||||||||||||||
Revenues from unaffiliated customers | $ | 1,529,917 | 201,521 | 82,337 | 3,074,737 | 817,408 | 286,295 | — | 5,992,215 | |||||||||||||||
Transfers between geographic areas | 94,521 | 10,476 | 18,780 | 43,721 | 38,791 | 18,128 | (224,417 | ) | — | |||||||||||||||
Total revenues | $ | 1,624,438 | 211,997 | 101,117 | 3,118,458 | 856,199 | 304,423 | (224,417 | ) | 5,992,215 | ||||||||||||||
Net revenues | $ | 748,320 | 95,798 | 57,795 | 551,361 | 286,745 | 95,351 | — | 1,835,370 | |||||||||||||||
Operating income | $ | 179,015 | 32,385 | 17,356 | 216,559 | 59,314 | 26,169 | — | 530,798 | |||||||||||||||
Identifiable assets | $ | 1,459,425 | 92,075 | 48,995 | 776,902 | 428,053 | 147,871 | 804 | 2,954,125 | |||||||||||||||
Capital expenditures | $ | 28,088 | 832 | 1,301 | 11,275 | 4,323 | 1,807 | — | 47,626 | |||||||||||||||
Depreciation and amortization | $ | 23,678 | 756 | 873 | 6,810 | 5,994 | 1,829 | — | 39,940 | |||||||||||||||
Equity | $ | 1,197,239 | 58,071 | 29,504 | 538,710 | 167,752 | 74,950 | (33,656 | ) | 2,032,570 | ||||||||||||||
February 25, 2014 | Expeditors International of Washington, Inc. | Page 6 of 7 |
Net Revenues (Non-GAAP measure)
We commonly refer to the term “net revenues” when commenting about our Company and the results of its operations. Net revenues are a Non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. We believe that net revenues are a better measure than are total revenues when analyzing and discussing our effectiveness in managing our principal services since total revenues earned as a freight consolidator include the carriers' charges to us for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by us. Net revenue is one of our primary operational and financial measures and demonstrates our ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings. Using net revenues also provides a commonality for comparison among various services. The following table presents the calculation of net revenues.
Three months ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Total revenues | $ | 1,625,859 | $ | 1,535,729 | $ | 6,080,257 | $ | 5,992,215 | |||||||
Expenses: | |||||||||||||||
Airfreight services | 579,740 | 546,395 | 1,994,374 | 1,983,696 | |||||||||||
Ocean freight and ocean services | 386,041 | 364,251 | 1,521,340 | 1,542,170 | |||||||||||
Customs brokerage and other services | 182,006 | 163,573 | 681,690 | 630,979 | |||||||||||
Net revenues | $ | 478,072 | $ | 461,510 | $ | 1,882,853 | $ | 1,835,370 | |||||||
February 25, 2014 | Expeditors International of Washington, Inc. | Page 7 of 7 |