UTi WORLDWIDE INC - FORM 10-Q

UTi WORLDWIDE INC - FORM 10-Q - December 9, 2014

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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended October 31, 2014

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

For the transition period from to

000-31869

(Commission File Number)

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, P.O. Box 805 Road Town, Tortola, VG1110 British Virgin Islands		c/o UTi, Services, Inc. 100 Oceangate, Suite 1500 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 x No ¨

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 x No ¨

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.

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

At December 4, 2014, the number of shares outstanding of the issuer’s ordinary shares of no par value was 105,458,745.

UTi Worldwide Inc.

Report on Form 10-Q

For the Quarter Ended October 31, 2014

Table of Contents


PART I. Financial Information		1

Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	57
Item 4.	Controls and Procedures	58

PART II. Other Information		59

Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
Signatures		62
Exhibit Index		63

- i -

Part I. FINANCIAL INFORMATION

Item 1.

Financial Statements

UTi Worldwide Inc.

Condensed Consolidated Balance Sheets

As of October 31, 2014 and January 31, 2014

(in thousands, except share amounts)


	October 31, 2014			January 31, 2014
	(Unaudited)
ASSETS
Cash and cash equivalents	$	191,869		$	204,384
Cash held as collateral		32,801			—
Trade receivables (net of allowances for doubtful accounts of $18,396 and $23,391 as of October 31, 2014 and January 31, 2014, respectively)		1,080,406			977,885
Deferred income taxes		10,116			8,889
Other current assets		157,024			154,465

Total current assets		1,472,216			1,345,623

Property, plant and equipment (net of accumulated depreciation of $266,183 and $234,054 as of October 31, 2014 and January 31, 2014, respectively)		207,696			222,036
Goodwill		295,218			298,498
Other intangible assets, net		152,201			166,369
Investments		1,034			1,075
Deferred income taxes		13,112			11,693
Other non-current assets		50,189			36,768

Total assets	$	2,191,666		$	2,082,062

LIABILITIES & EQUITY
Bank lines of credit	$	83,109		$	260,700
Short-term borrowings		10,037			7,551
Current portion of long-term borrowings		1,776			3,488
Current portion of capital lease obligations		11,994			12,374
Trade payables and other accrued liabilities		752,274			754,965
Income taxes payable		19,742			17,877
Deferred income taxes		3,348			3,236

Total current liabilities		882,280			1,060,191

Long-term borrowings, excluding current portion		366,297			205,862
Capital lease obligations, excluding current portion		61,104			60,784
Deferred income taxes		14,700			14,390
Other non-current liabilities		36,744			38,098

Convertible preference shares		178,732			—

Commitments and contingencies

UTi Worldwide Inc. shareholders’ equity:
Common stock - ordinary shares of no par value; issued and outstanding 105,457,141 and 104,821,581 shares as of October 31, 2014 and January 31, 2014, respectively		572,204			517,762
Retained earnings		211,624			313,974
Accumulated other comprehensive loss		(147,057	)		(143,317	)

Total UTi Worldwide Inc. shareholders’ equity		636,771			688,419
Non-controlling interests		15,038			14,318

Total equity		651,809			702,737

Total liabilities and equity	$	2,191,666		$	2,082,062

See accompanying notes to the condensed consolidated financial statements.

- 1 -

UTi Worldwide Inc.

Condensed Consolidated Statements of Operations

For the three and nine months ended October 31, 2014 and 2013

(in thousands, except share and per share amounts)


	Three months ended October 31,						Nine months ended October 31,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
Revenues	$	1,078,279		$	1,154,406		$	3,214,513		$	3,364,477

Purchased transportation costs		697,261			760,913			2,059,367			2,209,601
Staff costs		218,105			221,075			668,151			665,567
Depreciation		14,207			13,628			42,235			39,766
Amortization of intangible assets		7,398			5,730			21,417			11,276
Severance and other		23,674			13,184			25,964			19,033
Other operating expenses		139,843			132,630			415,746			397,936

Operating (loss)/income		(22,209	)		7,246			(18,367	)		21,298
Interest income		6,332			3,190			17,624			12,683
Interest expense		(16,889	)		(8,113	)		(46,844	)		(24,346	)
Loss on debt extinguishment		—			—			(21,820	)		—
Other expense, net		(205	)		(294	)		(1,201	)		(1,256	)

Pretax (loss)/income		(32,971	)		2,029			(70,608	)		8,379
Provision for income taxes		2,293			9,334			21,573			30,054

Net loss		(35,264	)		(7,305	)		(92,181	)		(21,675	)
Net (loss)/income attributable to non-controlling interests		(1,269	)		1,770			1,940			4,262

Net loss attributable to UTi Worldwide Inc.	$	(33,995	)	$	(9,075	)	$	(94,121	)	$	(25,937	)

Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders	$	(0.35	)	$	(0.09	)	$	(0.97	)	$	(0.25	)

Cash dividends declared per common share	$	—		$	—		$	—		$	0.06

Number of weighted average common shares outstanding used for per share calculations
Basic and diluted shares		105,438,911			104,746,663			105,257,604			104,450,366

See accompanying notes to the condensed consolidated financial statements.

- 2 -

UTi Worldwide Inc.

Condensed Consolidated Statements of Comprehensive Loss

For the three and nine months ended October 31, 2014 and 2013

(in thousands)


	Three months ended October 31,						Nine months ended October 31,
	2014			2013			2014			2013
	(Unaudited)						(Unaudited)
Net loss	$	(35,264	)	$	(7,305	)	$	(92,181	)	$	(21,675	)
Other comprehensive (loss)/income:
Foreign currency translation		(19,967	)		2,478			(3,778	)		(19,647	)
Defined benefit pension plan adjustments		224			(75	)		234			346

Other comprehensive (loss)/income		(19,743	)		2,403			(3,544	)		(19,301	)

Comprehensive loss, before non-controlling interests		(55,007	)		(4,902	)		(95,725	)		(40,976	)
Comprehensive (loss)/income attributable to non-controlling interests		(1,759	)		1,692			2,136			3,081

Comprehensive loss attributable to UTi Worldwide Inc.	$	(53,248	)	$	(6,594	)	$	(97,861	)	$	(44,057	)

See accompanying notes to the condensed consolidated financial statements.

- 3 -

UTi Worldwide Inc.

Condensed Consolidated Statements of Cash Flows

For the nine months ended October 31, 2014 and 2013

(in thousands)


	Nine months ended October 31,
	2014			2013
	(Unaudited)
OPERATING ACTIVITIES:
Net loss	$	(92,181	)	$	(21,675	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation costs		10,365			9,782
Depreciation		42,235			39,766
Amortization of intangible assets		21,417			11,276
Amortization of debt issuance costs		2,805			524
Make-whole payment		20,830			—
Accretion of convertible senior notes		5,290			—
Deferred income taxes		(2,615	)		7,102
Uncertain tax positions		792			(4	)
Gain on disposal of property, plant and equipment		(522	)		(548	)
Provision for doubtful accounts		4,328			4,220
Net proceeds from the sale of trade receivables		—			20,211
Installment receivable impairment and other		20,449			3,375
Changes in operating assets and liabilities:
Increase in trade receivables		(144,132	)		(240,226	)
(Increase)/decrease in other current assets		(1,496	)		7,860
(Decrease)/increase in trade payables		(7,943	)		41,571
Increase in accrued liabilities and other liabilities		14,781			47,904

Net cash used in operating activities		(105,597	)		(68,862	)

INVESTING ACTIVITIES:
Net increase in cash held as collateral		(32,801	)		—
Purchases of property, plant and equipment, excluding software		(20,989	)		(36,545	)
Proceeds from disposals of property, plant and equipment		4,058			3,583
Purchases of software and other intangible assets		(9,845	)		(27,484	)
Net increase in other non-current assets		(560	)		(3,292	)

Net cash used in investing activities		(60,137	)		(63,738	)

FINANCING ACTIVITIES:
Proceeds from issuances of long-term borrowings		404,644			639
Proceeds from issuance of preference shares		175,000			—
Borrowings from bank lines of credit		183,569			307,780
Repayments of bank lines of credit		(356,387	)		(231,985	)
Net (repayments)/borrowings under revolving lines of credit		(3,012	)		23,175
Net increase in short-term borrowings		2,472			1,031
Repayments of long-term borrowings		(203,517	)		(5,514	)
Make-whole payment		(20,830	)		—
Debt and preferred shares issuance costs		(25,789	)		—
Repayments of capital lease obligations		(10,770	)		(10,168	)
Distributions to non-controlling interests and other		(1,416	)		(2,180	)
Ordinary shares settled under share-based compensation plans		(1,807	)		(2,487	)
Proceeds from issuance of ordinary shares		89			3,345
Dividends paid		—			(6,282	)

Net cash provided by financing activities		142,246			77,354

Effect of foreign exchange rate changes on cash and cash equivalents		10,973			(10,810	)

Net decrease in cash and cash equivalents		(12,515	)		(66,056	)

Cash and cash equivalents at beginning of period		204,384			237,276

Cash and cash equivalents at end of period	$	191,869		$	171,220

See accompanying notes to the condensed consolidated financial statements.

- 4 -

UTi Worldwide Inc.

Notes to the Condensed Consolidated Financial Statements

For the three and nine months ended October 31, 2014 and 2013 (Unaudited)

NOTE 1. Presentation of Financial Statements

Basis of Presentation. The accompanying unaudited condensed 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 October 31, 2014 and January 31, 2014, and the consolidated statements of operations, comprehensive loss and cash flows for the three and nine months ended October 31, 2014 and 2013. 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 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 and nine months ended October 31, 2014 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending January 31, 2015 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 fiscal year ended January 31, 2014.

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

Fiscal 2015 Refinancing. In March 2014, the Company completed a number of actions to address certain liquidity and covenant challenges (which actions are collectively referred to herein as the Fiscal 2015 Refinancing). These actions included, but are not limited to:

•

The completion of a private offering of our $400,000 principal amount of convertible senior notes due 2019 (which we refer to as the 2019 Notes).

•

The completion of a private offering of our Series A 7.0% Convertible Preference Shares (the Convertible Preference Shares) to an affiliate of our largest shareholder, P2 Capital, in the aggregate principal amount of $175,000.

•

Certain of the Company’s United States (U.S.) and Canadian subsidiaries entered into a credit agreement with Citibank, N.A., Citigroup Global Markets Inc., Morgan Stanley Senior Funding, Inc. and Bank of the West for a new senior secured asset-based revolving credit facility (CitiBank Credit Facility) that provides commitments of up to $150,000.

•

The Company (i) repaid all of the $200,000 aggregate principal amount of our private placement notes issued on January 25, 2013 (the 2013 Notes) and paid to the holders thereof a make-whole payment with respect to such prepayment in the amount of $20,830, (ii) refinanced indebtedness which was then outstanding under certain of our previously outstanding credit facilities and terminated those credit facilities, and (iii) in connection with the termination of certain facilities, provided cash collateral of $50,025 for outstanding letters of credit and bank guarantees thereunder.

Loss on debt extinguishment for the nine months ended October 31, 2014, includes the make-whole payment of $20,830 paid to the holders of the 2013 Notes and a non-cash charge of $990 related to the acceleration of unamortized debt issuance costs related to the 2013 Notes and facilities extinguished as part of the Fiscal 2015 Refinancing.

Use of Estimates. The preparation of the consolidated financial statements in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include, but are not limited to, certain estimates relating to the Company’s business transformation initiatives, including useful life assumptions and the dates at which certain software applications became (or will become) ready for their intended use (both of which impact the timing and amount of amortization), revenue recognition, income taxes, allowances for doubtful accounts, the initial and recurring valuation of certain assets acquired and liabilities assumed through business combinations (including goodwill, indefinite lived intangible assets, and contingent liabilities), impairment of long-lived assets, and contingencies. Actual results could differ from those estimates.

- 5 -

South African Installment Receivable Agreement. On July 4, 2014, the Company entered into a South African rand (ZAR) 205,000 ($18,756 as of October 31, 2014) installment receivable agreement with a client in South Africa relating to an unpaid receivable balance. Including the installment agreement, total amounts receivable from the client are approximately $25,266 as of October 31, 2014.

On September 19, 2014, the Company was notified that the client had entered into the South African equivalent of bankruptcy proceedings in the U.S., referred to as Business Rescue Proceedings. While the client continues to have a presence in the South African mining industry and is currently in negotiations with several third parties regarding a possible reorganization and restructuring, based on the Company’s participation in the negotiations during the third quarter of fiscal year 2015, the Company currently believes a successful reorganization of the client is unlikely. As a result, the Company has impaired amounts under this installment receivable agreement and other receivables. Included in severance and other expenses during the third quarter of fiscal year 2015, are expenses of $19,594 for the quarter ended October 31, 2014 resulting from this impairment. After the effects of the impairment, amounts presently included in trade receivables, representing amounts considered collectible and proceeds from insurance which are not considered contingent, are $5,327 as of October 31, 2014.

The Company has filed an insurance claim of ZAR 180,500 ($16,514 as of October 31, 2014) under the terms of an insurance policy covering the installment receivable agreement and other receivables. As of the date of this filing, the insurance company has neither accepted nor repudiated the claim. While the Company believes it should ultimately recover a substantial amount of this claim, all or a portion of the claim may be subject to litigation between the Company and the insurance company. The Company intends to vigorously pursue all of its remedies under the insurance policy in effect as of the date of loss. In accordance with accounting standards, the Company has not recognized the effects of any future insurance recovery and the Company will recognize the effects of any insurance recovery only when the amounts are known.

In addition to amounts which may be recoverable under the Company’s insurance policy, the installment receivable agreement and other receivables from the client are secured by guarantees from other entities as well as a personal guarantee from the sole shareholder of the client company. The Company is continuing to pursue its remedies under these guarantees. No assurance can be given as to the outcome of such pursuit.

Revenues from this client were immaterial for the three months ended October 31, 2014 and were $2,473 for the nine months ended October 31, 2014. Revenues from this client were $24,685 and $49,411 for the three and nine months ended October 31, 2013.

Foreign Currency Translation. Included in other expense, net, are net losses of $205 and $1,201 on foreign exchange for the three and nine months ended October 31, 2014, respectively. Included in other expense, net, are net losses of $294 and $1,256 on foreign exchange for the three and nine months ended October 31, 2013, respectively.

Income Taxes. Under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required to adjust its effective tax rate for each quarter to be consistent with its estimated annual effective tax rate. Jurisdictions with a projected loss where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. Applying the provisions of ASC 270 and ASC 740 can result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.

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. The Company recognizes accrued interest and penalties related to uncertain tax positions in interest and other expense, respectively.

Provision for income taxes was $2,293 and $21,573 for the three and nine months ended October 31, 2014, respectively. Provision for income taxes was $9,334 and $30,054 for the three and nine months ended October 31, 2013, respectively. The out of period adjustments to income tax expense for the three and nine months ended October 31, 2013 were zero and $6,098, respectively, due to the increase of valuation allowances on certain deferred tax assets. Management has concluded that this correction is immaterial.

- 6 -

Segment Reporting. The Company’s reportable business segments are (i) Freight Forwarding and (ii) 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. Certain corporate costs, enterprise-led costs, and various holding company expenses within the group structure are presented separately.

Earnings Per Share. The Company calculates basic earnings per share based on earnings (loss) available to common shareholders and the weighted average number of ordinary common shares outstanding during each period. Diluted earnings per share is computed in a similar manner using the weighted average number of ordinary common shares, but also considers potentially dilutive common shares outstanding. Potentially dilutive common shares includes outstanding employee share-based compensation awards that are assumed to be exercised or vested and paid out in shares of common stock, in addition to the dilutive effects of the Convertible Preference Shares and the 2019 Notes.

In connection with the Convertible Preference Shares, net earnings (loss) for the period are adjusted by the amount of dividends declared in order to calculate earnings (loss) available to common shareholders. In addition, the Company utilizes the “if-converted” method in determining diluted earnings per share. In periods where the “if-converted” method is dilutive, the Convertible Preference Shares are assumed to have been converted as of the beginning of the reporting period. As such, preferred dividends for the period are added back to earnings (loss) available to common shareholders and the number of common shares to be issued upon conversion are assumed to be outstanding for the entire reporting period.

Until the Company has the ability and intent to settle the 2019 Notes partially or wholly in cash, the “if converted” method is used to account for the 2019 Notes in the calculation of diluted earnings per share. In periods when the effect of the 2019 Notes is dilutive, the expected number of common stock to be issued upon conversion is included in the computation and the pro forma effects of excluding accrued interest on the 2019 Notes is added to net earnings/(loss) to compute diluted earnings per share.

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 $213,255 of these deposits were not insured by the Federal Deposit Insurance Corporation (FDIC) or similar entities outside of the United States of America (U.S.) as of October 31, 2014.

Cash Held as Collateral. In connection with the Fiscal 2015 Refinancing, certain of the Company’s credit facilities, as described in Note 11, “Borrowings”, were terminated in March 2014 and the Company provided cash collateral to secure the letters of credit and bank guarantees which were then outstanding. As of October 31, 2014, $32,801 of cash remains subject to such collateral arrangements. The usage of such cash is restricted pursuant to the applicable agreements.

Fair Values of Financial Instruments. The estimated fair values of financial instruments have been determined using available market information and 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, convertible preference shares, bank lines of credit, long-term deposits, short-term borrowings, trade payables and other accrued liabilities, long-term borrowings, forward contracts and other derivative instruments. With the exception of the 2019 Notes, the carrying values 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.

- 7 -

Recent Accounting Pronouncements

Standards Issued But Not Yet Effective. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new guidance is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016; early adoption is not permitted. Companies have the option of using either a full retrospective or a modified retrospective approach to adopt the guidance. This update could impact the timing and amounts of revenue recognized. The Company is currently evaluating the potential impact of the adoption of this guidance on its consolidated financial statements.

Proposed Amendments to Current Accounting Standards. Updates to existing accounting standards and exposure drafts, lease accounting, loss contingencies and fair value measurements, among other items that have been issued or proposed by FASB or other standards setting bodies that do not require adoption until a future date are being evaluated by the Company to determine whether adoption will have a material impact on the Company’s consolidated financial statements.

NOTE 2. Acquisitions

The Company did not complete any acquisitions during the three and nine months ended October 31, 2014.

- 8 -

NOTE 3. Earnings per Share

Earnings per share is calculated as follows:


	Loss			Weighted Average Number of Ordinary Shares		Per Share Amount
For the three months ended October 31, 2014:
Basic earnings per share:
Net loss attributable to UTi Worldwide Inc. common shareholders	$	(33,995	)		105,438,911
Less: Dividends in-kind on Convertible Preference Shares		(3,169	)		—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic earnings per share	$	(37,164	)		105,438,911	$	(0.35	)

Diluted earnings per share:
Loss attributable to UTi Worldwide Inc. common shareholders	$	(37,164	)		105,438,911
Effect of assumed exercise or conversion of dilutive securities:
Employee share-based awards		—			—
Convertible Preference Shares		—			—
2019 Notes		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of diluted earnings per share	$	(37,164	)		105,438,911	$	(0.35	)

Weighted-average anti-dilutive shares excluded from computation:
Employee share-based awards					2,857,152
Convertible Preference Shares					13,060,551
2019 Notes					27,588,120

Total weighted average anti-diluted shares excluded from computation					43,505,823


For the three months ended October 31, 2013:
Basic earnings per share:
Net loss attributable to UTi Worldwide Inc. common shareholders	$	(9,075	)		104,746,663
Less: Dividends in-kind on Convertible Preference Shares		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic earnings per share	$	(9,075	)		104,746,663	$	(0.09	)

Diluted earnings per share:
Loss attributable to UTi Worldwide Inc. common shareholders	$	(9,075	)		104,746,663
Effect of assumed exercise or conversion of dilutive securities:
Employee share-based awards		—			—
Convertible Preference Shares		—			—
2019 Notes		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of diluted earnings per share	$	(9,075	)		104,746,663	$	(0.09	)

- 9 -


	Loss			Weighted Average Number of Ordinary Shares		Per Share Amount
For the nine months ended October 31, 2014:

Basic earnings per share:

Net loss attributable to UTi Worldwide Inc. common shareholders	$	(94,121	)		105,257,604

Less: Dividends in-kind on Convertible Preference Shares		(8,229	)		—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic earnings per share	$	(102,350	)		105,257,604	$	(0.97	)

Diluted earnings per share:

Loss attributable to UTi Worldwide Inc. common shareholders	$	(102,350	)		105,257,604

Effect of assumed exercise or conversion of dilutive securities:
Employee share-based awards		—			—
Convertible Preference Shares		—			—
2019 Notes		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of diluted earnings per share	$	(102,350	)		105,257,604	$	(0.97	)

Weighted-average anti-dilutive shares excluded from computation:
Employee share-based awards					3,168,680
Convertible Preference Shares					11,345,288
2019 Notes					24,306,262

Total weighted average anti-diluted shares excluded from computation					38,820,230

For the nine months ended October 31, 2013:

Basic earnings per share:

Net loss attributable to UTi Worldwide Inc. common shareholders	$	(25,937	)		104,450,366
Less: Dividends in-kind on Convertible Preference Shares		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic earnings per share	$	(25,937	)		104,450,366	$	(0.25	)

Diluted earnings per share:

Loss attributable to UTi Worldwide Inc. common shareholders	$	(25,937	)		104,450,366

Effect of assumed exercise or conversion of dilutive securities:
Employee share-based awards		—			—
Convertible Preference Shares		—			—
2019 Notes		—			—

Loss attributable to UTi Worldwide Inc. common shareholders for calculation of diluted earnings per share	$	(25,937	)		104,450,366	$	(0.25	)

- 10 -

Weighted-average diluted shares outstanding exclude shares representing stock awards that have exercise prices in excess of the average market price of the Company’s common stock during the relevant period or do not result in incremental shares when applying the treasury stock method under ASC 260, Earnings Per Share. For the three and nine months ended October 31, 2014, no incremental common shares are included in the computation of diluted earnings per share, as the Company had a net loss.

NOTE 4. Equity

UTi Worldwide Inc. Shareholders’ Equity. Certain information regarding changes in equity and non-controlling interests are as follows:


	UTi Worldwide Inc. Shareholders’ Equity
	Common Stock			Retained earnings			Accumulated other comprehensive loss			Non-controlling interests			Total Equity
Balance at February 1, 2014	$	517,762		$	313,974		$	(143,317	)	$	14,318		$	702,737
Net (loss)/income		—			(94,121	)		—			1,940			(92,181	)
Other comprehensive (loss)/income		—			—			(3,740	)		196			(3,544	)
Shared-based compensation		10,365			—			—			—			10,365
Ordinary shares settled under share-based compensation plans		(1,799	)		—			—			—			(1,799	)
2019 Notes original issue discount		47,690			—			—			—			47,690
Allocation of debt issuance costs		(1,814	)		—			—			—			(1,814	)
Dividends in-kind on Convertible Preference Shares payable		—			(8,229	)		—			—			(8,229	)
Non-controlling interests and other		—			—			—			(1,416	)		(1,416	)

Balance at October 31, 2014	$	572,204		$	211,624		$	(147,057	)	$	15,038		$	651,809

Balance at February 1, 2013	$	505,237		$	396,946		$	(92,348	)	$	14,347		$	824,182
Net (loss)/income		—			(25,937	)		—			4,262			(21,675	)
Other comprehensive loss		—			—			(18,120	)		(1,181	)		(19,301	)
Shared-based compensation		13,127			—			—			—			13,127
Ordinary shares settled under share-based compensation plans		(2,487	)		—			—			—			(2,487	)
Dividends		—			(6,282	)		—			—			(6,282	)
Non-controlling interests and other		(1,219	)		—			—			(2,180	)		(3,399	)

Balance at October 31, 2013	$	514,658		$	364,727		$	(110,468	)	$	15,248		$	784,165

- 11 -

Accumulated Other Comprehensive Loss. The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss (AOCI) before- and after-tax:


	Foreign Currency Translation			Defined Benefit Pension Plans			Total
Balance at August 1, 2014	$	(123,187	)	$	(4,617	)	$	(127,804	)
Other comprehensive loss before reclassifications, before tax		(32,461	)		—			(32,461	)
Tax-effect		12,984			—			12,984

Other comprehensive loss before reclassifications, after tax		(19,477	)		—			(19,477	)

Amounts reclassified from AOCI, before tax		—			298			298
Tax-effect		—			(74	)		(74	)

Amounts reclassified from AOCI, after tax		—			224			224

Net current-period other comprehensive (loss)/income		(19,477	)		224			(19,253	)

Balance at October 31, 2014	$	(142,664	)	$	(4,393	)	$	(147,057	)

Balance at August 1, 2013	$	(106,341	)	$	(6,608	)	$	(112,949	)
Other comprehensive income before reclassifications, before tax		4,260			—			4,260
Tax-effect		(1,704	)		—			(1,704	)

Other comprehensive income before reclassifications, after tax		2,556			—			2,556

Amounts reclassified from AOCI, before tax		—			(97	)		(97	)
Tax-effect		—			22			22

Amounts reclassified from AOCI, after tax		—			(75	)		(75	)

Net current-period other comprehensive income/(loss)		2,556			(75	)		2,481

Balance at October 31, 2013	$	(103,785	)	$	(6,683	)	$	(110,468	)

- 12 -


	Foreign Currency Translation			Defined Benefit Pension Plans			Total
Balance at February 1, 2014	$	(138,690	)	$	(4,627	)	$	(143,317	)
Other comprehensive loss before reclassifications, before tax		(6,623	)		—			(6,623	)
Tax-effect		2,649			—			2,649

Other comprehensive loss before reclassifications, after tax		(3,974	)		—			(3,974	)

Amounts reclassified from AOCI, before tax		—			311			311
Tax-effect		—			(77	)		(77	)

Amounts reclassified from AOCI, after tax		—			234			234

Net current-period other comprehensive (loss)/income		(3,974	)		234			(3,740	)

Balance at October 31, 2014	$	(142,664	)	$	(4,393	)	$	(147,057	)

Balance at February 1, 2013	$	(85,319	)	$	(7,029	)	$	(92,348	)
Other comprehensive loss before reclassifications, before tax		(30,777	)		—			(30,777	)
Tax-effect		12,311			—			12,311

Other comprehensive loss before reclassifications, after tax		(18,466	)		—			(18,466	)

Amounts reclassified from AOCI, before tax		—			494			494
Tax-effect		—			(148	)		(148	)

Amounts reclassified from AOCI, after tax		—			346			346

Net current-period other comprehensive (loss)/income		(18,466	)		346			(18,120	)

Balance at October 31, 2013	$	(103,785	)	$	(6,683	)	$	(110,468	)

The effects on net (loss)/income of significant amounts reclassified out of each component of AOCI are summarized as follows:


		Three months ended October 31,						Nine months ended October 31,
		2014			2013			2014			2013
Details about AOCI components	Affected line item on the consolidated statements of operations	Amount reclassified from AOCI			Amount reclassified from AOCI			Amount reclassified from AOCI			Amount reclassified from AOCI
Defined benefit plans:
Amortization of net actuarial gain	Staff costs	$	43		$	87		$	131		$	263
Amortization of net transition obligation	Staff costs		—			4			—			13
Amortization of prior service benefit	Staff costs		4			—			13			—
Foreign currency translation	Staff costs		251			(188	)		167			218

	Pretax income/(loss)		298			(97	)		311			494
	(Benefit)/provision for income taxes		(74	)		22			(77	)		(148	)

Total reclassification for the period	Net income/(loss)	$	224		$	(75	)	$	234		$	346

Convertible Preference Shares. On March 4, 2014, the Company issued to an affiliate of its largest shareholder, P2 Capital, $175,000 of its Convertible Preference Shares. Included in temporary equity as of October 31, 2014, is

- 13 -

$178,732, reflecting the issuance of $175,000 net of allocated issuance costs of $4,497 and the subsequent accrual of the dividends paid-in kind of $8,229. The Convertible Preference Shares rank senior to the Company’s ordinary shares with respect to dividend rights and rights upon our liquidation, winding-up and dissolution. The Company expects that dividends on the Convertible Preference Shares will be paid in kind quarterly. Such dividends started to accrue on June 1, 2014 and will continue until March 1, 2017 or the earlier conversion of the Convertible Preference Shares. The dividend rate is 7.0% for paid-in-kind dividends and 8% for cash dividends paid in the limited circumstances provided by the terms of the Convertible Preference Shares. The Convertible Preference Shares became convertible at any time at the holder’s option into the Company’s ordinary shares (or a combination of ordinary shares and cash in certain circumstances) as of September 5, 2014 based on an initial conversion price of $13.8671. The Company may, at its option, cause a mandatory conversion of the Convertible Preference Shares if the Company’s ordinary shares equal or exceed a certain closing price threshold over a specified trading period at any time following March 1, 2017. In addition, if certain specified fundamental changes occur prior to March 1, 2017, the holders of the Convertible Preference Shares will have the right to convert their Convertible Preferred Shares and be entitled to a fundamental change dividend make-whole amount. Until March 1, 2017, the holders of the Convertible Preference Shares have pre-emptive rights with respect to certain of the company’s equity securities for so long as they own a number of Convertible Preference Shares convertible into at least 6,309,896 ordinary shares.

NOTE 5. Segment Reporting

As a result of the implementation of the Company’s new freight forwarding operating system in certain of its operating locations, differences in classification exist between the presentation of product line revenues and purchase transportation costs for the three and nine months ended October 31, 2014 with the same categories for the corresponding prior year period. This is the result of the Company’s system classifying certain freight forwarding transactions by product line in a manner different than the legacy freight forwarding applications. The most significant classification difference relates to the treatment of delivery-related revenue and purchased transportation expense related to ocean-freight import shipments whereby the Company does not facilitate the in-bound air and ocean shipment. These activities were previously recognized in the air and/or ocean product and are now recognized in the customs brokerage product. The amount of the differences in classification for the respective periods presented is not readily available and significant effort and excessive cost would be involved in classifying the individual transactions in the legacy applications in a consistent manner with the new operating system making conforming changes impracticable. Accordingly, the comparability of the product line information for the periods presented has been impacted and will be impacted in the near-term.

- 14 -

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


	Three months ended October 31, 2014
	Freight Forwarding			Contract Logistics and Distribution		Corporate			Total
Revenues	$	689,807		$	388,472	$	—		$	1,078,279

Purchased transportation costs		523,942			173,319		—			697,261
Staff costs		104,492			104,442		9,171			218,105
Depreciation		4,245			8,546		1,416			14,207
Amortization of intangible assets		6,472			926		—			7,398
Severance and other		22,139			1,318		217			23,674
Other operating expenses		47,842			82,076		9,925			139,843

Total operating expenses		709,132			370,627		20,729			1,100,488

Operating (loss)/income	$	(19,325	)	$	17,845	$	(20,729	)		(22,209	)

Interest income										6,332
Interest expense										(16,889	)
Other expense, net										(205	)

Pretax loss										(32,971	)
Provision for income taxes										2,293

Net loss										(35,264	)
Net loss attributable to non-controlling interests										(1,269	)

Net loss attributable to UTi Worldwide Inc.									$	(33,995	)

Capital expenditures for property, plant and equipment	$	4,956		$	7,695	$	75		$	12,726

Capital expenditures for internally developed software	$	—		$	497	$	2,780		$	3,277

Segment assets	$	1,297,943		$	645,271	$	248,452		$	2,191,666

- 15 -


	Three months ended October 31, 2013
	Freight Forwarding		Contract Logistics and Distribution		Corporate			Total
Revenues	$	778,446	$	375,960	$	—		$	1,154,406

Purchased transportation costs		596,663		164,250		—			760,913
Staff costs		108,985		103,582		8,508			221,075
Depreciation		4,269		7,994		1,365			13,628
Amortization of intangible assets		4,404		1,205		121			5,730
Severance and other		6,083		7,004		97			13,184
Other operating expenses		44,390		79,485		8,755			132,630

Total operating expenses		764,794		363,520		18,846			1,147,160

Operating income/(loss)	$	13,652	$	12,440	$	(18,846	)		7,246

Interest income									3,190
Interest expense									(8,113	)
Other expense, net									(294	)

Pretax income									2,029
Provision for income taxes									9,334

Net loss									(7,305	)
Net income attributable to non-controlling interests									1,770

Net loss attributable to UTi Worldwide Inc.								$	(9,075	)

Capital expenditures for property, plant and equipment	$	7,245	$	9,130	$	305		$	16,680

Capital expenditures for internally developed software	$	—	$	515	$	15,378		$	15,893

Segment assets	$	1,343,246	$	650,672	$	200,799		$	2,194,717

- 16 -


	Nine months ended October 31, 2014
	Freight Forwarding			Contract Logistics and Distribution		Corporate			Total
Revenues	$	2,081,720		$	1,132,793	$	—		$	3,214,513

Purchased transportation costs		1,559,265			500,102		—			2,059,367
Staff costs		327,642			312,365		28,144			668,151
Depreciation		13,071			24,890		4,274			42,235
Amortization of intangible assets		18,586			2,831		—			21,417
Severance and other		23,649			1,578		737			25,964
Other operating expenses		144,419			243,677		27,650			415,746

Total operating expenses		2,086,632			1,085,443		60,805			3,232,880

Operating (loss)/income	$	(4,912	)	$	47,350	$	(60,805	)		(18,367	)

Interest income										17,624
Interest expense										(46,844	)
Loss on debt extinguishment										(21,820	)
Other expense, net										(1,201	)

Pretax loss										(70,608	)
Provision for income taxes										21,573

Net loss										(92,181	)
Net income attributable to non-controlling interests										1,940

Net loss attributable to UTi Worldwide Inc.									$	(94,121	)

Capital expenditures for property, plant and equipment	$	12,559		$	18,239	$	81		$	30,879

Capital expenditures for internally developed software	$	—		$	1,123	$	6,970		$	8,093

Segment assets	$	1,297,943		$	645,271	$	248,452		$	2,191,666

- 17 -


	Nine months ended October 31, 2013
	Freight Forwarding		Contract Logistics and Distribution		Corporate			Total
Revenues	$	2,266,765	$	1,097,712	$	—		$	3,364,477

Purchased transportation costs		1,732,000		477,601		—			2,209,601
Staff costs		322,856		314,999		27,712			665,567
Depreciation		12,491		23,356		3,919			39,766
Amortization of intangible assets		6,645		3,648		983			11,276
Severance and other		8,512		8,313		2,208			19,033
Other operating expenses		136,969		237,205		23,762			397,936

Total operating expenses		2,219,473		1,065,122		58,584			3,343,179

Operating income/(loss)	$	47,292	$	32,590	$	(58,584	)		21,298

Interest income									12,683
Interest expense									(24,346	)
Other expense, net									(1,256	)

Pretax income									8,379
Provision for income taxes									30,054

Net loss									(21,675	)
Net income attributable to non-controlling interests									4,262

Net loss attributable to UTi Worldwide Inc.								$	(25,937	)

Capital expenditures for property, plant and equipment	$	23,863	$	19,891	$	4,863		$	48,617

Capital expenditures for internally developed software	$	—	$	531	$	34,290		$	34,821

Segment assets	$	1,343,246	$	650,672	$	200,799		$	2,194,717

For reporting purposes by segment and 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 October 31,
	2014						2013
	Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total		Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total
EMENA	$	211,773	$	58,244	$	270,017	$	220,317	$	58,031	$	278,348
Americas		126,763		223,994		350,757		164,113		206,693		370,806
Asia Pacific		275,278		23,133		298,411		262,281		22,567		284,848
Africa		75,993		83,101		159,094		131,735		88,669		220,404

Total	$	689,807	$	388,472	$	1,078,279	$	778,446	$	375,960	$	1,154,406

- 18 -


	Nine months ended October 31,
	2014						2013
	Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total		Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total
EMENA	$	650,254	$	176,747	$	827,001	$	648,940	$	167,898	$	816,838
Americas		406,235		644,337		1,050,572		519,652		600,134		1,119,786
Asia Pacific		790,440		64,907		855,347		745,549		61,413		806,962
Africa		234,791		246,802		481,593		352,624		268,267		620,891

Total	$	2,081,720	$	1,132,793	$	3,214,513	$	2,266,765	$	1,097,712	$	3,364,477

The following table shows long-lived assets attributable to the Company’s geographic regions:


	October 31, 2014		January 31, 2014
EMENA	$	40,738	$	48,129
Americas		58,024		58,166
Asia Pacific		30,315		34,581
Africa		78,619		81,160

Total	$	207,696	$	222,036

The following table shows long-lived assets attributable to specific countries:


	October 31, 2014		January 31, 2014
United States	$	53,336	$	53,122
South Africa		77,110		79,207
China		15,095		16,595
Spain		5,311		6,590
All others		56,844		66,522

Total	$	207,696	$	222,036

The following table shows revenues attributable to specific countries:


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
United States	$	296,047	$	312,710	$	881,749	$	935,740
South Africa		153,070		208,879		465,659		591,979
China		129,662		120,409		361,444		327,369
Germany		44,099		39,210		134,016		124,273
All others		455,401		473,198		1,371,645		1,385,116

Total	$	1,078,279	$	1,154,406	$	3,214,513	$	3,364,477

- 19 -

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


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
Revenues:
Airfreight forwarding	$	319,057	$	342,447	$	955,407	$	1,021,396
Ocean freight forwarding		264,265		334,622		807,758		957,087
Customs brokerage		55,854		37,948		162,680		100,074
Contract logistics		199,142		190,699		583,833		557,758
Distribution		164,604		157,301		470,561		450,257
Other		75,357		91,389		234,274		277,905

Total	$	1,078,279	$	1,154,406	$	3,214,513	$	3,364,477

Purchased transportation costs:
Airfreight forwarding	$	250,968	$	263,162	$	737,700	$	788,560
Ocean freight forwarding		216,302		279,388		666,875		801,711
Customs brokerage		9,965		7,317		32,912		12,691
Contract logistics		50,436		44,858		142,498		135,272
Distribution		114,436		110,096		328,871		314,308
Other		55,154		56,092		150,511		157,059

Total	$	697,261	$	760,913	$	2,059,367	$	2,209,601

NOTE 6. Goodwill and Other Intangible Assets

Goodwill. The changes in the carrying amount of goodwill by reportable segment are as follows:


	Freight Forwarding			Contract Logistics and Distribution		Total
Balance at January 31, 2014	$	167,672		$	130,826	$	298,498
Foreign currency translation adjustment		(4,297	)		1,017		(3,280	)

Balance at October 31, 2014	$	163,375		$	131,843	$	295,218

In accordance with ASC 350, Intangibles – Goodwill and Other (ASC 350), the Company reviews goodwill and other intangible assets for impairment annually at the end of the second quarter of each fiscal year, or more often if events or circumstances indicate that impairment may have occurred. No impairment was recognized during the nine months ended October 31, 2014. The Company’s accumulated goodwill impairment charge since its adoption of ASC 350 was $193,502 at October 31, 2014 and January 31, 2014, all of which is included in the Company’s Contract Logistics and Distribution segment.

The Company experienced a significant decline of market capitalization during the first quarter of fiscal 2015 following the announcement of the Fiscal 2015 Refinancing. For the purposes of the Company’s goodwill impairment evaluation this was considered to be an indicator that impairment may have occurred in the Company’s freight forwarding reporting unit. Accordingly, during the quarter ended April 30, 2014 the Company performed an interim test of recoverability of its goodwill and intangible assets in its freight forwarding reporting unit and no impairment was identified.

- 20 -

Other Intangible Assets. Amortizable intangible assets at October 31, 2014 and January 31, 2014 relate primarily to software applications internally-developed by the Company for internal use and the estimated fair values of client relationships acquired with respect to certain acquisitions. The carrying values of amortizable intangible assets at October 31, 2014 and January 31, 2014 were as follows:


	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)
Balance at October 31, 2014
Internally-developed software	$	168,606	$	(31,812	)	$	136,794		6.8
Client relationships		76,747		(62,344	)		14,403		8.8
Non-compete agreements		150		(55	)		95		4.5
Other		3,630		(3,630	)		—		3.7

Total	$	249,133	$	(97,841	)	$	151,292

Balance at January 31, 2014
Internally-developed software	$	160,490	$	(16,202	)	$	144,288		6.8
Client relationships		79,767		(58,748	)		21,019		8.8
Non-compete agreements		286		(169	)		117		4.5
Other		3,634		(3,596	)		38		3.7

Total	$	244,177	$	(78,715	)	$	165,462

The following table shows the expected amortization expense for these intangible assets for each of the next five fiscal years and thereafter ended January 31:


2015 (remainder)	$	7,659
2016		29,719
2017		27,772
2018		24,491
2019		22,707
2020 and thereafter		38,944

The Company had $909 and $907 of intangible assets not subject to amortization at October 31, 2014 and January 31, 2014, 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:


	Nine months ended October 31,
	2014			2013
Net cash paid for:
Interest	$	37,692		$	24,701
Make-whole payment		20,830			—
Income taxes		24,558			6,045
Withholding taxes		—			274
Non-cash activities:
Capital lease and other obligations to acquire assets		9,890			11,845
Net change to other obligations incurred to internally-developed software		(1,752	)		(677	)
2019 Notes original issuance discount		47,690			—
Dividends in-kind on Convertible Preference Shares payable		8,229			—

- 21 -

Limitations on dividends. UTi is a holding company that relies on dividends, distributions and advances from its subsidiaries to pay dividends on its ordinary shares and meet its financial obligations. The ability of UTi’s subsidiaries to pay such amounts and UTi’s ability to pay dividends and distributions to its shareholders are subject to restrictions including, but not limited to, applicable local laws and limitations contained in the Company’s bank credit facilities and long-term borrowings. Additionally, in general, UTi’s subsidiaries cannot pay dividends in excess of their retained earnings. Such laws, restrictions, and effects could limit or impede intercompany dividends and distributions, or the making of intercompany advances.

Exchange control laws and regulations. Some of the Company’s subsidiaries may be subject from time to time to exchange control laws and regulations that may limit or restrict the payment of dividends or distributions or other transfers of funds by those subsidiaries to UTi. Total net assets which may not be transferred to UTi in the form of loans, advances, or cash dividends by the Company’s subsidiaries without the consent of a third party was approximately 14% of the Company’s consolidated total net assets as of the end of the most recent fiscal year.

NOTE 8. Contingencies

In connection with ASC 450, Contingencies, the Company has not accrued for material loss contingencies relating to the investigations and legal proceedings disclosed below because the Company believes that, although unfavorable outcomes in the investigations or proceedings may be reasonably possible, they are not considered by the Company’s management to be probable and reasonably estimable.

From time to time, claims are made against the Company or the Company may make claims against others, including in the ordinary course of the Company’s 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 the Company from engaging in certain activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s consolidated results of operations for that period or future periods. As of the date of these consolidated financial statements, the Company is not a party to any material litigation, except as described below.

Industry-Wide Anti-Trust Investigations. On March 28, 2012, the Company was notified by the European Commission (EC) that it had adopted a decision against the Company and two of its subsidiaries relating to alleged anti-competitive behavior in the market for freight forwarding services in the European Union/European Economic Area. The decision of the EC imposes a fine of euro 3,068 (or approximately $3,869 at October 31, 2014) against the Company. The Company believes that neither the Company nor its subsidiaries violated European competition rules. In June 2012, the Company lodged an appeal against the decision and the amount of the fine before the European Union’s General Court and oral arguments before the EU’s General Court in Luxembourg were heard in October 2014.

In May 2009, the Company learned that the Brazilian Ministry of Justice was investigating possible alleged cartel activity in the international air and ocean freight forwarding market. On August 6, 2010, the Company received notice of an administrative proceeding from the Brazilian Ministry of Justice. The administrative proceeding initiates a proceeding against the Company, its Brazilian subsidiary and two of its employees, among many other forwarders and their employees, alleging possible anti-competitive behavior contrary to Brazilian rules on competition. The Company responded to this proceeding in May 2014. We filed a supplemental response in support of our defense in September 2014 after we were granted access to various documents seized by the Brazilian antitrust authority during raids of several other forwarders.

In May 2012, the Competition Commission of Singapore informed the Company that it was contemplating an administrative investigation into possible alleged cartel activity in the international freight forwarding market. In January 2013, the Company provided information and documents related to the air Automated Manifest System fee in response to a notice the Company received in November 2012 from the Competition Commission of Singapore requesting the information and indicating that the commission suspected that the Company engaged in alleged anti-competitive behavior relating to freight forwarding services to and from Singapore. In September 2013, the Company received a follow-up request for information and provided such information in November 2013.

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From time to time the Company may receive additional requests for information, documents and interviews from various governmental agencies with respect to these investigations, and the Company has provided, and may continue to provide in the future, further responses as a result of such requests.

The Company has incurred, and may in the future incur, significant legal fees and other costs in connection with these governmental investigations and lawsuits. If any regulatory body concludes that the Company or any of its subsidiaries have engaged in anti-competitive behavior, the Company could incur significant additional legal fees and other costs and penalties, which could include substantial fines, penalties and/or criminal sanctions against the Company and/or certain of the Company’s current or former officers, directors and employees, and the Company could be liable for damages. Any of these fees, costs, penalties, damages, sanctions or liabilities could have a material adverse effect on the Company and its financial results. As of the date of this filing, except for the decision and fine imposed by the EC, an estimate of any possible loss or range of loss cannot be made. In the case of the decision and fine imposed by the EC, the possible loss ranges from no loss, in the event of a successful appeal by the Company, to the full amount of the fine.

Matters Related to the Fiscal 2015 Financing. On March 17, 2014, a putative securities class action lawsuit was filed against the Company and certain of its executives in the United States District Court for the Central District of California. As amended on September 5, 2014, the complaint, which is captioned Michael J. Angley, individually and on behalf of himself and all others similarly situated v. UTi Worldwide Inc., Eric W. Kirchner, Richard G. Rodick, Edward G. Feitzinger and Jeffrey W. Misakian, No. 2:14-cv-02066, generally alleges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act by misstating or failing to disclose, in certain public statements made and in filings with the SEC between March 28, 2013 and February 26, 2014, material facts relating to the Company’s liquidity position, financial condition, financial covenants, financial systems and freight forwarding operating system. The complaint seeks unspecified damages and other relief. The Company and the individual defendants deny any allegations of wrongdoing and intend to vigorously defend against this lawsuit. All defendants moved to dismiss on November 4, 2014.

In July 2014, the Company received a subpoena from the SEC requesting certain documents related to, among other things, the facts and circumstances surrounding the Fiscal 2015 Refinancing. In September 2014, the Company received a similar subpoena directed to the members of the Audit Committee of the Board of Directors. The Company has been cooperating and intends to continue to cooperate with the SEC inquiry.

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 and the employee’s final average salary on attainment of qualifying retirement age.

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


	Three months ended October 31,						Nine months ended October 31,
	2014			2013			2014			2013
Service cost	$	479		$	509		$	1,477		$	1,512
Interest cost		454			468			1,392			1,418
Expected return on plan assets		(435	)		(415	)		(1,333	)		(1,258	)
Amortization of net actuarial loss		47			91			144			276

Total	$	545		$	653		$	1,680		$	1,948

The Company contributed approximately $548 and $577, respectively, to its defined benefit plans for the three months ended October 31, 2014 and 2013. The Company contributed approximately $1,677 and $1,726, respectively, to its defined benefit plans for the nine months ended October 31, 2014 and 2013.

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NOTE 10. Share-Based Compensation

In 2009, the Company’s shareholders approved the 2009 Long Term Incentive Plan (2009 LTIP). The plan provides for the issuance of a variety of awards, including stock options, share appreciation rights (sometimes referred to as SAR), 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 October 31, 2014, the Company had share-based compensation awards outstanding under the following plans: the 2004 Long Term Incentive Plan (2004 LTIP), the 2004 Non-Employee Directors Share Incentive Plan (2004 Directors Incentive Plan) and the 2000 Employee Share Purchase Plan (2000 ESPP). The Company generally grants awards during the first quarter of each fiscal year. Performance share units (PSUs) will vest upon achievement of certain performance objectives at the end of the vesting period.

Under the 2004 Directors Incentive Plan, prior to its expiration in June 2014, the Company granted RSUs to its outside directors. Since the adoption of the 2009 LTIP, no additional awards may be made pursuant to the 2004 LTIP. Vesting of these awards occurs over different periods, depending on the terms of the individual award.

Under the 2000 ESPP, eligible employees may purchase shares of the Company’s stock at the end 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.


	Stock Options					Performance Share Units				Restricted Stock Units
2009 LTIP:	Shares Subject to Stock Options			Weighted Average Exercise Price		Performance Share Units		Weighted Average Grant Date Fair Value		Restricted Stock Units			Weighted Average Grant Date Fair Value
Balance at February 1, 2014		665,397		$	16.37		—	$	—		2,275,514		$	15.99

Granted		—		$	—		143,812	$	10.04		1,437,204		$	9.99
Exercised/vested		—		$	—		—	$	—		(660,081	)	$	16.21
Cancelled/forfeited		(28,401	)	$	17.15		—	$	—		(292,120	)	$	14.49

Balance at October 31, 2014		636,996		$	16.34		143,812	$	10.04		2,760,517		$	12.97


	Stock Options					Restricted Stock Units
2004 LTIP:	Shares Subject to Stock Options			Weighted Average Exercise Price		Restricted Stock Units			Weighted Average Grant Date Fair Value
Balance at February 1, 2014		1,190,124		$	20.43		108,628		$	13.51

Granted		—		$	—		—		$	—
Exercised/vested		—		$	—		(108,628	)	$	13.51
Cancelled/forfeited		(383,334	)	$	17.54		—		$	—

Balance at October 31, 2014		806,790		$	21.80		—		$	—

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	Restricted Stock Units
2004 Directors Incentive Plan:	Restricted Stock Units			Weighted Average Grant Date Fair Value
Balance at February 1, 2014		35,688		$	15.31

Granted		54,270		$	9.95
Vested		(35,688	)	$	15.31
Cancelled		—		$	—

Balance at October 31, 2014		54,270		$	9.95

In connection with its share-based compensation plans, the Company recorded approximately $3,438 and $2,913 of share-based compensation expense for the three months ended October 31, 2014 and 2013, respectively. In connection with its share-based compensation plans, the Company recorded approximately $10,365 and $9,782 of share-based compensation expense for the nine months ended October 31, 2014 and 2013, respectively.

As of October 31, 2014, the Company had approximately $28,331 of unvested share-based compensation granted under all of the Company’s share-based compensation plans, which amounts will be expensed in full through April 2019.

NOTE 11. Borrowings

Bank Lines of Credit. The Company utilizes a number of financial institutions to provide it with borrowings and letters of credit, guarantee and working capital facilities. Certain of these credit facilities are used for working capital, for issuing letters of credit to support the working capital and operational needs of various subsidiaries, to support various customs bonds and guarantees, and for general corporate purposes. In other cases, customs bonds and guarantees are issued directly by various financial institutions. In some cases, the use of a particular credit facility is restricted to the country in which it originates. These particular credit facilities may restrict distributions by the subsidiary operating in such country.

In connection with the Company’s completion of the Fiscal 2015 Refinancing during the first quarter of fiscal 2015 the Company (i) completed a private placement of the 2019 Notes, (ii) completed the private offering of its Convertible Preference Shares, (iii) entered into the CitiBank Credit Facility (iv) repaid all of the $200,000 aggregate principal amount of its 2013 Notes and paid to the holders thereof a make-whole payment with respect to such prepayment in the amount of approximately $20,830, (v) refinanced indebtedness then outstanding under certain credit facilities and terminated those credit facilities, (vi) provided cash collateral for letters of credit and bank guarantees then outstanding under its credit facility (the 2011 RBS Facility) with The Royal Bank of Scotland (RBS) and a related facility and (vii) terminated its then outstanding credit facility with Nedbank Limited in London (the 2011 Nedbank Facility) (other than certain limited provisions which survive the termination of the agreement). The Company continues to maintain its South African rand credit facility, with Nedbank Limited in South Africa, (the South African Facilities Agreement), and

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various other bank lines, letter of credit and credit facilities. The following table presents information about the facility limits and the aggregate amount of borrowings outstanding, as well as availability for borrowings under various bank lines, letter of credit and other credit facilities as of October 31, 2014:


	CitiBank Credit Facility⁽¹⁾		Nedbank South African Facilities⁽²⁾		Other Facilities⁽³⁾		Total
Credit facility limit	$	143,748	$	52,150	$	136,524	$	332,422

Facility usage for cash withdrawals⁽⁴⁾		35,000		—		48,109		83,109
Letters of credit and guarantees outstanding		9,990		22,337		83,943		116,270

Total facility/usage	$	44,990	$	22,337	$	132,052	$	199,379

Available, unused capacity	$	98,758	$	29,813	$	4,472	$	133,043
Available for cash withdrawals	$	98,758	$	27,447	$	—	$	126,205

⁽¹⁾

The CitiBank Credit Facility was entered into in March 2014 in connection with the Fiscal 2015 Refinancing. The amount of cash withdrawals available under the CitiBank Credit Facility is limited to the lesser of (i) $150,000 or (ii) (a) the borrowing base calculation for the period less (b) letters of credit or guarantees outstanding less (c) outstanding cash withdrawals and reimbursement obligations.

⁽²⁾

In September 2014 the Company amended and restated its South African Facilities Agreement, which currently, provides for both: (i) a 680,000 ZAR revolving credit facility, which is comprised of a ZAR 380,000 working capital facility and a ZAR 300,000 letter of credit, guarantee, forward exchange contract and derivative instrument facility, and (ii) a ZAR 150,000 revolving asset-based finance facility, which consists of a capital lease line. Excluded from the table are amounts outstanding under the ZAR 150,000 revolving asset-based finance facility, which amounts are included under capital lease obligations on the Company’s consolidated balance sheet. The maturity date of this facility is July 9, 2016. Total facility/usage on the South African Facilities Agreement is presented net of cash and cash equivalents of $70,290 and $60,858 for the period ended October 31, 2014 and January 31, 2014, respectively.

⁽³⁾	Letters of credit and guarantees outstanding in this column are collateralized by the Company’s cash held as collateral.

⁽⁴⁾	Amounts in this row reflect letters of credit and bank guarantees supporting outstanding cash borrowings by the Company’s subsidiaries.

CitiBank Credit Facility. As part of the Fiscal 2015 Refinancing, in March 2014 the Company and certain of its U.S. and Canadian subsidiaries entered into the CitiBank Credit Facility, which facility is guaranteed by the Company and certain of its subsidiaries. The CitiBank Credit Facility provides up to $150,000 of commitments for a senior secured asset-based revolving line of credit, including a $20,000 sublimit for swingline loans, a $50,000 sublimit for the issuance of standby letters of credit and a $20,000 sublimit for loans in Canadian dollars. The maximum amount the Company is permitted to borrow under the CitiBank Credit Facility is subject to a borrowing base calculated by reference to its accounts receivable in the U.S. and Canada and certain eligibility criteria with respect to such receivables and other borrowing limitations. Amounts borrowed under the CitiBank Credit Facility bear interest (1) at a rate based on the London Interbank Offered Rate, or LIBOR, or the Canadian equivalent, plus a margin ranging from 2.00% to 2.50%, or (2) a rate based on the higher of (a) the base prime rate offered by CitiBank, (b) 1.00% plus the one-month LIBOR rate or (c) 0.50% plus the federal funds rate or in each case, the Canadian equivalent, plus a margin ranging from 1.00% to 1.50%. The CitiBank Credit Facility will terminate in March 2019, unless the 2019 Notes are not redeemed, refinanced or converted prior to September 2018, in which case the CitiBank Credit Facility will terminate in September 2018.

The CitiBank Credit Facility is secured, subject to permitted liens and other agreed upon exceptions, by a first-priority lien on, and perfected security interest in substantially all of the Company’s U.S. and Canadian assets, including accounts receivable and a pledge of the equity in its U.S. and Canadian holding and operating companies. In addition, the CitiBank Credit Facility requires that the Company maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 if available credit under the CitiBank Facility is less than the greater of (i) 10% of the maximum credit thereunder and (ii) $15,000. The CitiBank Credit Facility contains customary representations and warranties and customary events of default, payment of customary fees and expenses, as well as certain affirmative and negative covenants, including restrictions on: indebtedness; liens; mergers, consolidations and acquisitions; sales of assets; engaging in business other than its current business; investments; dividends; redemptions and distributions; affiliate transactions; and other restrictions.

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South African Facilities Agreement. The obligations of the Company’s subsidiaries subject to 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 its 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. The South African Facilities Agreement terminates in July 2016.

The South African Facilities Agreement contains events of default and covenants, including, but not limited to, financial covenants, restrictions on certain types of activities and transactions, reporting covenants, cross defaults to other indebtedness and other terms, events of default and covenants typical of credit facilities. The South African Facilities Agreement also provides for an uncommitted seasonal customs facility which may be made available to the South African Obligors at a later date if requested by the South African Obligors. In addition, the South African Facilities Agreement provides the South African Obligors with an option to request that Nedbank increase its commitments under the revolving credit facility and the revolving asset-based finance facility in an aggregate amount up to ZAR 400,000, subject to the approval of Nedbank and the satisfaction of certain conditions precedent.

Other Additional Facilities. In addition to the credit, letters of credit, and guarantee facilities provided under the CitiBank Credit Facility and the South African Facilities Agreement, the Company utilizes a number of financial institutions to provide the Company and its subsidiaries with additional credit, letters of credit and guarantee facilities. In some cases, the use of these particular letters of credits, guarantee and credit facilities may be restricted to the country in which they originated and may restrict distributions by the subsidiary operating in the country. The Company’s previous credit facility with Sumitomo Mitsui Banking (Sumitomo) Corporation terminated in accordance with its terms in October 2014 and all amounts which were then outstanding were repaid by the Company.

The CitiBank Credit Facility, the South African Facilities Agreement, and certain of its other credit, letters of credit and guarantee facilities also contain other limitations on the payment by the Company and/or by its various subsidiaries of dividends, distributions and share repurchases. In addition, if a “change in control” (as defined in the various agreements and facilities) should occur, then the outstanding indebtedness thereunder may become due and payable. Furthermore, the CitiBank Credit Facility, the South African Facilities Agreement, and certain of its other credit facilities contain cross-default provisions with respect to other indebtedness, giving the lenders under such credit facilities the right to declare a default if the Company defaults under other indebtedness in certain circumstances. Should the Company fail to comply with the covenants in the CitiBank Credit Facility, the South African Facilities Agreement, or certain of its other credit, letters of credit or guarantee facilities, the Company would be required to seek to amend the covenants or to seek a waiver of such non-compliance as the Company was required to do in the past under its prior facilities. If the Company is unable to obtain any necessary amendments or waivers, all or a portion of the indebtedness and obligations under the various facilities could become immediately due and payable and the various agreements and facilities could be terminated and the credit, letters of credit and guarantee facilities provided thereunder would no longer be available to the Company.

Short-term Borrowings. The Company also has a number of short-term borrowings issued by various parties, not covered under the facilities described above. The total of such bank borrowings was $10,037 and $7,551, respectively, at October 31, 2014 and January 31, 2014.

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Long-term Borrowings. The following table presents information about the Company’s indebtedness pursuant to its outstanding senior unsecured guaranteed notes and other long-term borrowings as of October 31, 2014:


	2019 Notes⁽¹⁾			Other Facilities			Total
Maturity date		March 1, 2019
Original principal	$	400,000
Original issuance discount for fair value of conversion feature	$	47,690
Interest rate per annum		4.50	%		1.00	%
Discount rate		7.40	%

Balance at October 31, 2014:
Current portion of long-term borrowings		—			1,776			1,776
Long-term borrowings, excluding current portion		357,600			8,697			366,297

Total	$	357,600		$	10,473		$	368,073

(1)

Amounts included in long-term borrowings as of the issuance date of the 2019 Notes, March 4, 2014, were initially reflected net of an initial discount of $47,690 reflecting the fair value of the conversion feature. The fair value of the conversion feature of the 2019 Notes has been bifurcated and presented in equity under common stock in the Company’s consolidated financial statements beginning in April 30, 2014. The amount included in long-term borrowings is accreting to the $400,000 redemption value using a discount rate of approximately 7.4%, which approximated the Company’s fair-value incremental borrowing rate for a similar debt instrument (without the conversion feature) as of the date of issuance.

2019 Notes. On March 4, 2014, the Company completed a private offering of its 4.50% 2019 Notes in the aggregate principal amount of $400,000, and entered into an indenture (the Indenture) with Wells Fargo Bank, National Association, as trustee, in connection therewith. After deducting fees and expenses, the Company received net proceeds from the offering of the 2019 Notes of $386,100. The Indenture governs the 2019 Notes and contains terms and conditions customary for similar transactions, including customary events of default. The 2019 Notes bear interest at an annual rate of 4.50% payable in cash semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2014. The 2019 Notes will be due and payable by the Company when they mature on March 1, 2019, unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date. The Company may not redeem the 2019 Notes at its option prior to maturity unless certain tax related events occur. In addition, the Indenture provides that if the Company undergoes certain types of “fundamental changes” prior to the maturity date of the 2019 Notes, each 2019 Note holder has the option to require the Company to repurchase all or any of such holder’s 2019 Notes for cash. Pursuant to the terms of the Indenture, the 2019 Notes will be convertible into the Company’s ordinary shares at a conversion rate of 68.9703 ordinary shares per $1,000 principal amount of 2019 Notes (equivalent to an initial conversion price of approximately $14.50 per ordinary share), subject to adjustment, upon the occurrence of certain events prior to the close of business on the business day immediately preceding September 1, 2018, and, on or after September 1, 2018, by a holder’s surrender for conversion of any of its 2019 Notes at any time prior to the close of the business day immediately preceding the maturity date. Upon a conversion of the 2019 Notes, in accordance with the Indenture the Company has the option, to pay or deliver, as the case may be, cash, its ordinary shares or a combination of cash and ordinary shares, at its election.

2019 Notes Conversion Feature. The balance of the 2019 Notes are reflected net of a discount of approximately $47,690 reflecting the fair value of the conversion feature. The fair value has been bifurcated and presented in equity under common stock in the Company’s consolidated financial statements beginning April 30, 2014.

NOTE 12. Fair Value Disclosures

Fair Value Measurements on Recurring Basis. 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;

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•

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 October 31, 2014 and January 31, 2014 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:


			Fair Value Measurement at Reporting Date Using:
Balance at October 31, 2014	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	191,869	$	191,869	$	—	$	—
Forward exchange contracts		—		—		—		—

Total	$	191,869	$	191,869	$	—	$	—

Liabilities:
Forward exchange contracts	$	114	$	—	$	114	$	—

Total	$	114	$	—	$	114	$	—


Balance at January 31, 2014
Assets:
Cash and cash equivalents	$	204,384	$	204,384	$	—	$	—
Forward exchange contracts		221		—		221		—

Total	$	204,605	$	204,384	$	221	$	—

Liabilities:
Forward exchange contracts	$	116	$	—	$	116	$	—

Total	$	116	$	—	$	116	$	—

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.

Fair Value Measurements on a Non-Recurring Basis. During the nine months ended October 31, 2014, the Company recognized the fair value of the conversion feature (also referred to by the Company as the “original issuance discount”), of the 2019 Notes at fair value on a non-recurring basis. In determining the fair value, the Company used inputs other than quoted prices in active markets that are observable, such as interest rates, comparable market yields on similar debt instruments and quantitative analysis of the Company’s profitability, leverage and other market conditions, which were applied to a present value model, and therefore were classified as Level 2. The original issue discount of the 2019 Notes was estimated to be $47,690 upon issuance. For further information on the 2019 Notes, see Note 11, “Borrowings.”

NOTE 13. 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.

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The Company had contracted to sell the following amounts under forward exchange contracts with maturities within 60 days of October 31, 2014 and 2013:


	October 31,
	2014		2013
Euro	$	3,142	$	4,919
U.S. Dollars		6,581		29,054
British Pound Sterling		570		1,452
All others		1,092		1,955

Total	$	11,385	$	37,380

Changes in the fair value of forward exchange contracts are recorded within purchased transportation costs in the consolidated statements of operations.

The Company does not designate foreign currency derivatives as hedges. Foreign currency derivative assets and liabilities are included in trade receivables and payables, respectively. The Company had the following balances for foreign currency derivative assets and liabilities at October 31, 2014 and January 31, 2014:


	October 31, 2014		January 31, 2014
Foreign currency derivative assets	$	—	$	221
Foreign currency derivative liabilities	$	114	$	116

Net gains and losses on foreign currency derivatives as of October 31, 2014 and 2013 are as follows:


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
Net gains	$	—	$	267	$	—	$	142
Net losses	$	199	$	—	$	114	$	—

NOTE 14. Severance and Other

The following table shows a summary of severance and other charges:


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
Employee severance costs	$	3,395	$	10,540	$	5,685	$	16,389
Facility exit costs		685		2,644		685		2,644
Installment receivable impairment		19,594		—		19,594		—

Total	$	23,674	$	13,184	$	25,964	$	19,033

Employee severance costs. Employee severance costs incurred were related to the Company’s ongoing business transformation initiatives, which include redefining business processes, developing the Company’s next generation freight forwarding operating system and rationalizing business segments to a consistent organizational structure on a worldwide basis. These costs incurred by the Company were not incurred pursuant to a formal plan of restructuring or termination as defined in ASC 420, Exit or Disposal Cost Obligations or ASC 715, Compensation – Retirement Benefits. The Company has not adopted a formal plan of restructuring or termination pursuant to ASC 420 or ASC 715.

Facility exit costs. During the three and nine months ended October 31, 2014, the company incurred facility exit costs in connection with the closure of certain underutilized contract logistics facilities, in the Americas region. Amounts charged for facility exit cost for the three and nine months ended October 31, 2013, were incurred in connection with the closure of certain underutilized contract logistics facilities in Africa and Europe.

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Installment receivable impairment. During the third quarter of fiscal 2015, the Company incurred an impairment charge of $19,594 in connection with an impairment of the South African Installment Receivable Agreement and other receivables. For further information, see Note 1, “Presentation of Financial Statements.” The Company has filed an insurance claim of ZAR 180,500 ($16,514 as of October 31, 2014) under the terms of an insurance policy covering the installment receivable agreement and other receivables. As of the date of the filing of this Form 10-Q, the Company’s insurance provider has neither accepted nor repudiated the claim filed by the Company. While the Company believes it should recover a substantial portion of this claim, all or a portion of the claim may become the subject of litigation between the Company and the insurance company. The Company intends to vigorously pursue all of its remedies under the insurance policy in effect as of the date of loss. In accordance with accounting standards, the Company has not recognized the effects of any future insurance recovery and the Company will recognize the effects of any insurance recovery only when the amounts are known.

Certain information regarding total employee severance and other costs by segment is summarized as follows:


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
Freight Forwarding	$	22,139	$	6,083	$	23,649	$	8,512
Contract Logistics and Distribution		1,318		7,004		1,578		8,313
Corporate		217		97		737		2,208

Total	$	23,674	$	13,184	$	25,964	$	19,033

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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.

Forward-Looking Statements, Uncertainties and Other Factors

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, included in this Quarterly Report which address activities, events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “could,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” “projects,” or “continue” and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, those set forth under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014 filed with the Securities and Exchange Commission (SEC) (together with any amendments thereto and additions and changes thereto contained in our filings with the SEC since the filing of our Annual Report on Form 10-K), those discussed elsewhere in this Quarterly Report, and the following: the Company’s ability to maintain sufficient liquidity and capital resources to fund its business; the Company’s ability to complete its business transformation initiatives in the timeframe anticipated and achieve the expected benefits; the Company’s ability to generate sufficient cash to service its debt and other obligations; delays or inability to pay by the Company’s customers; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and EMENA (which is comprised of Europe, Middle East and North Africa); risks associated with the Company’s ongoing business transformation initiative, which include unanticipated difficulties, delays, additional costs and expenses as well as potential delays processing trade receivables or billing customers; volatile fuel costs; transportation capacity, pricing dynamics and the ability of the Company to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand; material interruptions in transportation services; risks of international operations; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of investigations by the governments of Brazil and Singapore into the international air freight and air cargo transportation industry; risks associated with the pending class action lawsuit and the subpoena we recently received from the SEC; risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance; the Company’s ability to retain clients while facing increased competition; the financial condition of the Company’s clients; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in the Company’s effective tax rates; the ability to remediate the material weakness in internal controls and maintain effective internal controls over financial reporting; the other risks and uncertainties described herein and in the Company’s other filings with the SEC; and other factors outside the Company’s control. All forward-looking statements included in this Quarterly Report speak only as of the date of this Quarterly Report. All of the forward-looking statements made in this Quarterly Report are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligation to update any such forward-looking statements, except as required by law.

In addition to the risks, uncertainties and other factors discussed elsewhere in this Quarterly Report on 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

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“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014 filed with the SEC (together with any amendments thereto and additions and changes thereto contained in our filings with the SEC since the filing of the our Annual Report on Form 10-K including, without limitation, in our Quarterly Reports on Form 10-Q for the quarters ended April 31, 2014 and July 31, 2014) 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.

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. We serve our clients through a worldwide network of freight forwarding offices, and contract logistics and distribution centers.

Freight Forwarding Segment. 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.

We provide airfreight forwarding services in two principal forms (i) as an indirect carrier, and occasionally (ii) as an authorized agent for airlines. When we act as an indirect carrier with respect to shipments of freight, we typically issue a House Airway Bill (HAWB) upon instruction from our client (the shipper). The HAWB serves as the contract of carriage between us and the shipper. When we tender freight to the airline (the direct carrier), we receive a Master Airway Bill. The Master Airway Bill serves as the contract of carriage between us and the air carrier. Because we provide services across a broad range of clients on commonly traveled trade lanes, when we act as an indirect carrier we typically consolidate individual shipments into larger shipments, optimizing weight and volume combinations for lower-cost shipments on a consolidated basis. We typically act as an indirect carrier with respect to shipments tendered to us by our clients, however, in certain circumstances; we occasionally act as an authorized agent for airlines. In such circumstances, we are not an indirect carrier and do not issue a HAWB, but rather we arrange for the transportation of individual shipments directly with the airline. In these instances, as compensation for arrangement for these shipments, the carriers pay us a management fee.

We provide ocean freight forwarding services in two principal forms (i) as an indirect carrier, sometimes referred to as a Non-Vessel Operating Common Carrier (NVOCC), and (ii) as an ocean freight forwarder nominated by our client (ocean freight forwarding agent). When we act as an NVOCC with respect to shipments of freight, we typically issue a House Ocean Bill of Lading (HOBL) to our client (the shipper). The HOBL serves as the contract of carriage between us and the shipper. When we tender the freight to the ocean carrier (the direct carrier), we receive a contract of carriage known as a Master Ocean Bill of Lading. The Master Ocean Bill of Lading serves as the contract of carriage between us and the ocean carrier. When we act as an ocean freight forwarding agent, we typically do not issue a HOBL but rather we receive management fees for managing the transaction as an agent, including booking and documentation between our client and the underlying carrier (contracted by the client).

Regardless of the forms through which we provide airfreight and ocean freight services, if we provide the client with ancillary services, such as the preparation of export documentation, we receive additional fees.

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 levels of expertise 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 air 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 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

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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. Other revenue in our freight forwarding segment is primarily comprised of international road freight shipments.

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, other than the incentive compensation component thereof, they are generally less flexible than purchased transportation costs in the near term as we must staff to meet uncertain future demand. Staff costs and other operating expenses in our Freight Forwarding segment are largely driven by total shipment counts rather than volumes stated in kilograms for airfreight or containers for ocean freight, which are most commonly expressed as twenty foot units (TEUs).

Contract Logistics and Distribution Segment. Our contract logistics services primarily relate to value-added warehousing and the 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, warehousing services, order management, and customized distribution and inventory management services. Our outsourced services include inspection services, quality centers and manufacturing support. Our inventory management services include materials sourcing services pursuant to contractual, formalized repackaging programs and materials sourcing agreements. Contract logistics revenues are recognized when the service has been completed in the ordinary course of business.

We also provide a range of distribution, consultation, outsourced management services, planning and optimization services, and other supply chain management services. We receive fees for the other supply chain management services that we perform. Distribution and other contract logistics revenues are recognized when the service has been completed in the ordinary course of business.

Freight Forwarding Operating System. On September 1, 2013, we deployed our global freight forwarding operating system, which we refer to as 1View or the 1View system, in the United States and, as of that date, we considered it ready for its intended use.

Matters Impacting Full Fiscal Year 2015. We expect costs associated with our 1View system to continue to negatively impact our operating results for the remainder of fiscal year 2015.

We currently expect to incur an aggregate of approximately $18.0 million in duplicative and implementation costs during fiscal year 2015 related to our business transformation initiatives. This does not include severance costs. We currently expect severance and other costs to be approximately $18.0 million to $20.0 million in the aggregate for fiscal year 2015. Our actual costs in fiscal 2015 may differ materially from our estimated costs.

As a result of these and other factors, we expect to continue to incur net losses through the end of fiscal 2015. A number of factors, including those disclosed elsewhere herein and in our other filings with the SEC, could cause our actual results to differ from our expectations.

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 is affected by movements in these currencies against the U.S. dollar. A depreciation of these currencies against the U.S. dollar results in lower revenues reported; however, as applicable costs are also converted from these currencies, costs would also be lower. Similarly, the opposite effect occurs 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. These translation effects are included as a component of accumulated other comprehensive income or loss in shareholders’ equity. We have historically not attempted to hedge this equity risk and we cannot predict the effects of foreign currency exchange rate fluctuations on our future operating results.

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Acquisitions. We did not complete any acquisitions during the three and nine months ended October 31, 2014 and 2013, respectively.

Seasonality. Historically, our results for our operating segments 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 primarily due to lower volumes during those periods when compared to our other quarters, however, this is dependent on numerous factors, including the markets in which we operate, holiday seasons, climate, economic conditions and many other factors. A substantial portion of our revenue is derived from clients in industries whose shipping patterns are tied closely to consumer demand for certain products 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.

Fiscal 2015 Refinancing. As previously disclosed, in March 2014 we undertook the following steps to address the liquidity and covenant challenges which we were then experiencing (we refer to these steps collectively as the Fiscal 2015 Refinancing). These steps included, but were not limited to:

•

We completed a private offering of our $400.0 million principal amount of convertible senior notes due 2019 (which we refer to as the 2019 Notes). After deducting fees and expenses, we received net proceeds from the offering of the 2019 Notes of $386.1 million.

•

We completed a private offering of our Series A 7.0% Convertible Preference Shares (the Convertible Preference Shares) to an affiliate of our largest shareholder, P2 Capital, in the aggregate principal amount of $175.0 million. We currently expect that dividends on the Convertible Preference Shares will be paid in kind quarterly starting on June 1, 2014 until March 1, 2017. The dividend rate is 7.0% for pay-in-kind dividends and 8.0% for cash dividends in the limited circumstances provided by the terms of the Convertible Preference Shares. For additional information regarding the terms of the Convertible Preference Shares, see Note 4 of the Notes to Financial Statements contained in Part I of this Form 10-Q.

•

Certain of our U.S. and Canadian subsidiaries entered into a credit agreement with Citibank, N.A., Citigroup Global Markets Inc., Morgan Stanley Senior Funding, Inc. and Bank of the West for a new senior secured asset-based revolving credit facility (CitiBank Credit Facility) that provides commitments of up to $150.0 million, as more fully described below.

•

We (i) repaid all of the $200.0 million aggregate principal amount of our private placement notes which we issued on January 25, 2013 (the 2013 Notes) and paid to the holders thereof a make-whole payment with respect to such prepayment in the amount of approximately $20.8 million, (ii) refinanced indebtedness which was then outstanding under certain of our previously outstanding credit facilities and terminated those credit facilities, and (iii) in connection with the termination of certain facilities, provided cash collateral of approximately $50.0 million for outstanding letters of credit and bank guarantees thereunder.

In connection with the Fiscal 2015 Refinancing, the 2011 Royal Bank of Scotland (2011 RBS Facility) and certain other facilities were terminated in March 2014 and we provided cash collateral to secure the letters of credit and bank guarantees which were outstanding thereunder and which remain outstanding as of October 31, 2014. As of October 31, 2014, $32.8 million of such cash collateral was outstanding and the usage of such cash is restricted pursuant to the applicable agreements.

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Discussion of Operating Results

The following discussion of our operating results explains material changes in our consolidated results of operations for the three and nine month periods ended October 31, 2014 compared to the three and nine month periods ended October 31, 2013. The discussion should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this quarterly report and our audited consolidated financial statements and notes thereto for the fiscal year ended January 31, 2014, which are included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014, on file with the SEC. Our unaudited 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 of America (U.S. GAAP).

Our year-over-year comparative results were, in certain cases, impacted by foreign currency fluctuations between comparable periods, particularly the year-over-year exchange rate fluctuations. In order to enhance the ability of investors to analyze our performance over comparable periods, we have provided in certain instances comparative information and variances excluding the impact of these foreign currency fluctuations where the effect of foreign currency translation is material to our comparative results. This information is among the information we use as a basis for evaluating our performance on a comparable basis over time, in allocating resources and in planning and forecasting of future periods. This information, however, is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP, which are also presented. We calculate the effects of foreign currency fluctuations by subtracting (i) our current-period financial results as reported in local currencies, translated at current-period foreign currency exchange rates, from (ii) our current-period financial results as reported in local currency, as translated at the prior-period foreign currency exchange rates.

Segment Operating Results. 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. Our reportable business segments are (i) Freight Forwarding and (ii) 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. Certain corporate costs, enterprise-led costs, and various holding company expenses within the group structure are presented separately.

We believe that for our Freight Forwarding segment, net revenues (a non-GAAP financial measure we use to describe revenues less purchased transportation costs) are a better measure of evaluation of our freight forwarding business than revenues because our revenues as an indirect air and ocean carrier include the carriers’ charges to us for carriage of the shipment. Our revenues and purchased transportation costs 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 revenues are determined by the differential between the rates charged to us by the carrier and the rates we charge our clients plus the fees we receive for our ancillary services. Revenues derived from freight forwarding generally are shared between the points of origin and destination, based on a standard formula. Our revenues in our other capacities include only management fees earned by us and are substantially similar to net revenues for the Freight Forwarding segment in this respect.

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.

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Three months ended October 31, 2014 compared to three months ended October 31, 2013

The following tables and discussion and analysis address the operating results attributable to our reportable segments for the three months ended October 31, 2014 compared to the three months ended October 31, 2013:

Freight Forwarding


	Freight Forwarding Three months ended October 31,
	2014			2013			Change Amount			Change Percentage
Revenues:
Airfreight forwarding	$	319,057		$	342,447		$	(23,390	)		(7	)%
Ocean freight forwarding		264,265			334,622			(70,357	)		(21	)
Customs brokerage		55,854			37,948			17,906			47
Other		50,631			63,429			(12,798	)		(20	)

Total revenues		689,807			778,446			(88,639	)		(11	)

Purchased transportation costs:
Airfreight forwarding		250,968			263,162			(12,194	)		(5	)
Ocean freight forwarding		216,302			279,388			(63,086	)		(23	)
Customs brokerage		9,965			7,317			2,648			36
Other		46,707			46,796			(89	)		—

Total purchased transportations costs		523,942			596,663			(72,721	)		(12	)

Net revenues:
Airfreight forwarding		68,089			79,285			(11,196	)		(14	)
Ocean freight forwarding		47,963			55,234			(7,271	)		(13	)
Customs brokerage		45,889			30,631			15,258			50
Other		3,924			16,633			(12,709	)		(76	)

Total net revenues		165,865			181,783			(15,918	)		(9	)

Yields:
Airfreight forwarding		21.3	%		23.2	%
Ocean freight forwarding		18.1	%		16.5	%

Staff costs		104,492			108,985			(4,493	)		(4	)
Depreciation		4,245			4,269			(24	)		(1	)
Amortization of intangible assets		6,472			4,404			2,068			47
Severance and other		22,139			6,083			16,056			264
Other operating expenses		47,842			44,390			3,452			8

Operating (loss)/income	$	(19,325	)	$	13,652		$	(32,976	)		(242	)%

Airfreight Forwarding. Airfreight forwarding revenues decreased $23.4 million, or 7%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, airfreight forwarding revenues decreased $18.1 million, or 5% compared to the corresponding prior year period. When the effects of foreign currency fluctuations are excluded, (i) $16.0 million of the decrease in airfreight forwarding revenues was attributable to a decline of airfreight forwarding volumes (which we measure in terms of total kilograms), (ii) $0.8 million of the decrease was attributable to a decline in our selling rates, caused in part by changes in product and lane-segment mix and lower carrier rates incurred by us, and (iii) $1.3 million of the decrease was attributable to reduced fuel surcharges.

Airfreight forwarding volumes decreased 6% for the three months ended October 31, 2014, compared to the corresponding prior year period. A portion of the decline in airfreight forwarding volumes resulted from a decline in overall airfreight tonnage which decline was attributable to our earlier efforts to shed lower-margin business globally in an effort to improve yields. Additionally, we experienced a decline in volumes shipped from our other existing clients. On a sequential basis, airfreight volumes increased 5% for the third quarter of fiscal 2015 compared to the second quarter of fiscal 2015.

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Airfreight forwarding net revenues decreased $11.2 million, or 14%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, airfreight forwarding net revenues decreased $9.6 million, or 12% compared to the corresponding prior year period. Changes in net revenues are primarily a function of volume movements and the expansion or contraction in yields, which is the difference between our selling rates and the carrier rates incurred by us. The $9.6 million decrease in airfreight forwarding net revenues when calculated on a basis which excludes the effects of foreign currency fluctuations was caused by (i) a $4.7 million decrease attributable to a decrease of airfreight forwarding volumes, and (ii) a $4.9 million decrease attributable to an unfavorable difference between our buying rates and our selling rates.

Airfreight yields for the three months ended October 31, 2014 decreased approximately 190 basis points to 21.3% compared to 23.2% for the corresponding prior year period. On a sequential basis, airfreight yields of 21.3% for the third quarter of fiscal 2015 were 180 basis points lower when compared to airfreight yields of 23.1% for the second quarter of fiscal 2015.

Ocean Freight Forwarding. Ocean freight forwarding revenues decreased $70.4 million, or 21%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, ocean freight forwarding revenues decreased $63.8 million or 20% compared to the corresponding prior year period. When the effects of foreign currency fluctuations are excluded, (i) $78.1 million of the decrease was attributable to a combination of lower selling rates caused in part by reduced carrier rates, as well as a reclassification of certain revenues to our customs brokerage and other product as described more fully below, offset by (ii) an increase of $14.3 caused by an increase of ocean freight volumes. Ocean freight volumes (which we measure in terms of TEUs) increased 6% during the three months ended October 31, 2014 compared to the corresponding prior year period.

Ocean freight forwarding net revenues decreased $7.3 million, or 13%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, ocean freight forwarding net revenues decreased $6.2 million or 12% compared to the corresponding prior year period. The decrease of $6.2 million in ocean freight forwarding net revenues calculated on a basis which excludes the effects of foreign currency fluctuations was primarily caused by (i) a decrease of $8.8 which was attributable a combination of a decline of our selling rates, which decline was offset by a decline in our carrier rates, as well as a reclassification of certain revenues to our customs brokerage and other product, offset by (ii) a $2.6 million increase attributable to increased ocean freight volumes. Ocean freight yields for the three months ended October 31, 2014, increased 160 basis points to 18.1% compared to 16.5% for the corresponding prior year period. On a sequential basis, ocean freight yields of 18.1% for the third quarter of fiscal 2015 were higher than ocean freight yields of 16.8% for the second quarter of fiscal 2015.

Customs Brokerage and Other. Customs brokerage revenues increased $17.9 million, or 47%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, customs brokerage revenues increased $20.2 million, or 68% compared to the corresponding prior year period. The increase was largely due to reclassifications in connection with the deployment of the 1View system described below. In addition, customs clearances revenues increased for the three months ended October 31, 2014, compared to the corresponding prior year period, reflecting an increase in transactions. Other freight forwarding related revenues, which are primarily comprised of international road freight shipments and distribution, decreased $12.8 million, or 20%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other freight forwarding related revenues decreased $10.7 million, or 16% compared to the corresponding prior year period.

Customs brokerage net revenues increased $15.3 million, or 50%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, customs brokerage net revenues increased $17.0 million.

As a result of the implementation of our new freight forwarding operating system in certain our operating locations, differences in classification exist between the presentation of product line revenues and purchase transportation costs for the three months ended October 31, 2014 compared with the same categories for the

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corresponding prior year period. The differences are the result of our system classifying certain freight forwarding transactions by product line in a manner different than the legacy freight forwarding applications. The most significant classification difference relates to the treatment of delivery-related revenue and purchased transportation expense related to ocean-freight import shipments where we do not facilitate the in-bound air and ocean shipment. These activities were previously recognized in the air and/or ocean product and are now recognized in the customs brokerage product. The amount of the differences in classification for the respective periods presented is not readily available and significant effort and excessive cost would be involved in classifying the individual transactions in the legacy applications in a consistent manner with the new operating system making conforming changes impracticable. Accordingly, the comparability of the product line information for the periods presented has been impacted and will be impacted in the near-term.

Staff Costs. Staff costs in our Freight Forwarding segment decreased $4.5 million, or 4%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, staff costs in our Freight Forwarding segment decreased $2.2 million. As a percentage of our Freight Forwarding segment revenues, staff costs were 15% for the three months ended October 31, 2014 compared to 14% in the corresponding prior year period. Movements of staff costs in our Freight Forwarding segment are typically driven by changes in total shipment counts rather than changes in volumes; however, for the three months ended October 31, 2014, staff costs in our Freight Forwarding segment were negatively impacted by temporary costs associated with our transformation. The number of airfreight shipments declined 6% for the three months ended October 31, 2014 compared to the corresponding prior year period, which was offset by a slight decrease of ocean freight volumes during the same period.

Amortization of Intangible Assets. Amortization of intangible assets increased $2.1 million for the three months ended October 31, 2014, compared to the corresponding prior year period. Amortization expense with respect to our new freight forwarding operating system began in September 2013, and accordingly, we recorded additional amortization expense related to the new system for the full three month period ended October 31, 2014 compared to the corresponding prior year period where we only incurred two months of amortization expense.

Severance and Other. During the three months ended October 31, 2014 and 2013, we incurred severance and other costs in the Freight Forwarding segment of approximately $22.1 million and $6.1 million, respectively.

During the third quarter of fiscal 2015, we incurred an impairment charge of $19.6 million in connection with an impairment of the South African Installment Receivable Agreement and other receivables. For further information, see Note 1, “Presentation of Financial Statements.” We have filed an insurance claim of South African rand (ZAR) 180.5 million ($16.5 million as of October 31, 2014) under the terms of an insurance policy covering the installment receivable agreement and other receivables. As of the date of the filing of this Form 10-Q, our insurance provider has neither accepted nor repudiated the claim filed by us. While we believe we should recover a substantial portion of this claim, all or a portion of the claim may become the subject of litigation between us and the insurance company. We intend to vigorously pursue all of our remedies pursuant to the insurance policy in effect as of the date of loss. No assurance can be given as to the outcome of such pursuit. Revenues from this client were immaterial for the three months ended October 31, 2014 and $24.7 million for the three months ended October 31, 2013. In accordance with accounting standards, we have not recognized the effects of any future insurance recovery and we intend to recognize the effects of any insurance recovery only when the amounts are known.

Other costs included in severance and other were comprised primarily of severance charges. These charges were primarily related to our ongoing business transformation initiatives, which include redefining business processes, developing and implementing our 1View system and rationalizing business operations to a more common organizational structure on a worldwide basis. Although a formal plan of restructuring or termination has not been adopted pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC ASC 420, Exit or Disposal Cost Obligations (ASC 420) or ASC 715, Compensation – Retirement Benefits (ASC 715), we expect to incur additional severance costs related to these transformation activities through the fiscal year ending January 31, 2015.

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Other Operating Expenses. Other operating expenses in the Freight Forwarding segment increased $3.5 million, or 8%, for the three months ended October 31, 2014, compared to the corresponding prior year period. Foreign currency fluctuations did not have a material impact on the change. Other operating expenses increased during the period primarily due to expenses related to the implementation of our 1View system.

Contract Logistics and Distribution


	Contract Logistics and Distribution Three months ended October 31,
	2014		2013		Change Amount			Change Percentage
Revenues:
Contract logistics	$	199,142	$	190,699	$	8,443			4	%
Distribution		164,604		157,301		7,303			5
Other		24,726		27,960		(3,234	)		(12	)

Total revenues		388,472		375,960		12,512			3

Purchased transportation costs:
Contract logistics		50,436		44,858		5,578			12
Distribution		114,436		110,096		4,340			4
Other		8,447		9,296		(849	)		(9	)

Total purchased transportations costs		173,319		164,250		9,069			6

Staff costs		104,442		103,582		860			1
Depreciation		8,546		7,994		552			7
Amortization of intangible assets		926		1,205		(279	)		(23	)
Severance and other		1,318		7,004		(5,686	)		(81	)
Other operating expenses		82,076		79,485		2,591			3

Operating income	$	17,845	$	12,440	$	5,405			43	%

Contract Logistics. Contract logistics revenues increased $8.4 million, or 4%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, contract logistics revenues increased $13.7 million, or 7%. The increase was due primarily to increased logistics volumes in our Americas and Africa regions.

Contract logistics purchased transportation costs increased $5.6 million, or 12% for the three months ended October 31, 2014, compared to the corresponding prior year period. Contract logistics purchased transportation costs increased primarily as a result of the increase in contract logistics revenues. In addition to purchased transportation costs related directly to the contract logistics operations, purchased transportation costs within our Contract Logistics and Distribution segment include materials sourcing costs which we incur pursuant to formalized repackaging programs and materials sourcing agreements. These sourcing activities were generally consistent during the three months ended October 31, 2014 when compared to the corresponding prior year period.

Distribution. Distribution revenues increased $7.3 million, or 5%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, distribution revenues increased $10.8 million, or 7%. When the effects of foreign currency fluctuations are excluded, the increase in distribution revenues was primarily due to increased client volumes in our Africa and Americas regions.

Distribution purchased transportation costs increased $4.3 million, or 4%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, distribution purchased transportation costs increased $5.5 million, or 5%. Distribution purchased transportation costs increased primarily due to increased client volumes within our distribution businesses in our Africa and Americas regions.

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Other. Other contract logistics and distribution revenues decreased $3.2 million, or 12%, for the three months ended October 31, 2014, compared to the corresponding prior year period. Other purchased transportation costs decreased $0.8 million, or 9%, for the three months ended October 31, 2014, compared to the corresponding prior year period.

Staff Costs. Staff costs in our Contract Logistics and Distribution segment increased $0.9 million, or 1%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, staff costs in our Contract Logistics and Distribution segment increased $4.0 million, or 4%, primary due to increased volumes in our Africa and Americas regions.

Severance and Other. During the three months ended October 31, 2014 and 2013, we incurred severance and other costs in the Contract Logistics and Distribution segment of approximately $1.3 million and $7.0 million, respectively, comprised primarily of severance charges. Although a formal plan of restructuring or termination has not been adopted pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 420, Exit or Disposal Cost Obligations (ASC 420) or ASC 715, Compensation – Retirement Benefits (ASC 715).

Other Operating Expenses. Other operating expenses in our Contract Logistics and Distribution segment increased $2.6 million, or 3%, for the three months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other operating expenses in our Contract Logistics and Distribution segment increased $6.1 million, or 7%, primarily due to increased volumes.

Corporate

Staff Costs. Staff costs at corporate increased $0.7 million, or 8%, for the three months ended October 31, 2014, compared to the corresponding prior year period.

Other Operating Expenses. Other operating expenses in corporate increased $1.2 million, or 13%, for the three months ended October 31, 2014, compared to the corresponding prior year period. The increase in other operating expenses was primarily the result of an increase in legal fees during the three months ended October 31, 2014.

Interest Expense, Net. Interest income typically relates primarily to interest earned on our cash deposits, while interest expense consists primarily of interest on our credit facilities and our outstanding notes. Interest income was $6.3 million and $3.2 million for the three months ended October 31, 2014 and 2013, respectively. Interest expense was $16.9 million and $8.1 million for the three months ended October 31, 2014 and 2013, respectively. The increase of interest expense is attributable to higher average net outstanding indebtedness and higher effective interest rates associated with the 2019 Notes and increased amortization of debt issuance costs.

Other Expenses, Net. Other income and expenses primarily relate to foreign currency gains and losses on certain of our intercompany loans.

Provision for Income Taxes. Our provision for income taxes for the three months ended October 31, 2014 was $2.3 million on a pretax loss of $33.0 million resulting in an effective tax rate of negative 7.0%. During the three months ended October 31, 2013, we recorded a tax provision of $9.3 million on pretax income of $2.0 million. The $7.0 million decrease in the provision for income taxes was attributable to (i) an increase of $1.0 million for uncertain tax positions and return to provision adjustments, (ii) a decrease of income in tax paying jurisdictions which decreased the provision by $8.0 million. Although there was a $35.0 million increased loss compared to the three months ended October 31, 2013, the Company does not claim tax benefits due to valuation allowances in such loss jurisdictions.

Net Loss Attributable to Non-Controlling Interests. Net loss attributable to non-controlling interests was $1.3 million for the three months ended October 31, 2014, compared to net income attributable to non-controlling interests of $1.8 million for the corresponding prior year period.

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Nine months ended October 31, 2014 compared to nine months ended October 31, 2013

The following tables and discussion and analysis address the operating results attributable to our reportable segments for the nine months ended October 31, 2014 compared to the nine months ended October 31, 2013:

Freight Forwarding


	Freight Forwarding Nine months ended October 31,
	2014			2013			Change Amount			Change Percentage
Revenues:
Airfreight forwarding	$	955,407		$	1,021,396		$	(65,989	)		(6	)%
Ocean freight forwarding		807,758			957,087			(149,329	)		(16	)
Customs brokerage		162,680			100,074			62,606			63
Other		155,875			188,208			(32,333	)		(17	)

Total revenues		2,081,720			2,266,765			(185,045	)		(8	)

Purchased transportation costs:
Airfreight forwarding		737,700			788,560			(50,860	)		(6	)
Ocean freight forwarding		666,875			801,711			(134,836	)		(17	)
Customs brokerage		32,912			12,691			20,221			159
Other		121,778			129,038			(7,260	)		(6	)

Total purchased transportations costs		1,559,265			1,732,000			(172,735	)		(10	)

Net revenues:
Airfreight forwarding		217,707			232,836			(15,129	)		(6	)
Ocean freight forwarding		140,883			155,376			(14,493	)		(9	)
Customs brokerage		129,768			87,383			42,385			49
Other		34,097			59,170			(25,073	)		(42	)

Total net revenues		522,455			534,765			(12,310	)		(2	)

Yields:
Airfreight forwarding		22.8	%		22.8	%
Ocean freight forwarding		17.4	%		16.2	%

Staff costs		327,642			322,856			4,786			1
Depreciation		13,071			12,491			580			5
Amortization of intangible assets		18,586			6,645			11,941			180
Severance and other		23,649			8,512			15,137			178
Other operating expenses		144,419			136,969			7,450			5

Operating income	$	(4,912	)	$	47,292		$	(52,203	)		(110	)%

- 42 -

Airfreight Forwarding. Airfreight forwarding revenues decreased $66.0 million, or 6%, for the nine months ended October 31, 2014, compared to the corresponding prior year period, however, when the effects of foreign currency fluctuations are excluded, airfreight forwarding revenues decreased $60.9 million. When the effects of foreign currency fluctuations are excluded, a decrease of $60.9 million was caused by (i) a decrease of $33.2 million attributable to a decline of airfreight forwarding volumes (which we measure in terms of total kilograms), (ii) a decrease of $21.4 million attributable to a decline of our selling rates, caused in part by lower carrier rates incurred by us, and (iii) a decrease of $6.3 million attributable to reduced fuel surcharges. Airfreight forwarding volumes decreased 5% for the nine months ended October 31, 2014, compared to the corresponding prior year period.

Airfreight forwarding net revenues decreased $15.1 million, or 6%, for the nine months ended October 31, 2014, compared to the corresponding prior year period. Excluding the effects of foreign currency fluctuations, airfreight forwarding net revenues decreased $12.9 million. Changes in net revenues are primarily a function of volume movements and the expansion or contraction in yields, which is the difference between our selling rates and the carrier rates incurred by us. The $12.9 million decrease in airfreight forwarding net revenues calculated on a basis excluding the effects of foreign currency was caused by (i) a $10.4 million decrease attributable to a decrease of airfreight forwarding volumes, and (ii) a $2.5 million net decrease attributable to a decline in our selling rates, which decline was offset by a corresponding decline in carrier rates.

Airfreight yields of 22.8% for the nine months ended October 31, 2014 were generally consistent with those for the corresponding prior year period.

Ocean Freight Forwarding. Ocean freight forwarding revenues decreased $149.6 million, or 16%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, ocean freight forwarding revenues decreased $131.0 million, or 14%. When the effects of foreign currency fluctuations are excluded, (i) a decrease of $170.5 million was attributable a combination of lower selling rates caused in part by reduced carrier rates, as well as a reclassification of certain revenues to our customs brokerage and other product as described more fully below, offset by (ii) an increase of $39.5 million caused by an increase in ocean freight volumes. Ocean freight volumes (which we measure in terms of TEUs) increased 5% during the nine months ended October 31, 2014 compared to the corresponding prior year period.

Ocean freight forwarding net revenues decreased $14.5 million, or 9%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, ocean freight forwarding net revenues decreased $12.3 million, or 8%. The $12.3 million decrease in ocean freight forwarding net revenues calculated on a basis which excludes the effects of foreign currency fluctuations was caused by (i) a decrease of $19.1 million which was attributable a combination of a decline of our selling rates, which decline was offset by a decline in our carrier rates, as well as a reclassification of certain revenues to our customs brokerage and other product, offset by (i) an increase of $6.8 million attributable to increased ocean freight volumes. Ocean freight yields for the nine months ended October 31, 2014, increased 120 basis points to 17.4% compared to 16.2% for the corresponding prior year period.

Customs Brokerage and Other. Customs brokerage revenues increased $62.6 million, or 63%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, customs brokerage revenues increased $68.6 million, or 78%, largely due to reclassifications in connection with the deployment of the 1View system described below. Other freight forwarding related revenues, which are primarily comprised of international road freight shipments and distribution, decreased $32.3 million, or 17%, for the nine months ended October 31, 2014, compared to the corresponding prior year period. However, when the effects of foreign currency fluctuations are excluded, other freight forwarding related revenues decreased $27.2 million, or 14%.

Customs brokerage net revenues increased $42.4 million, or 49%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, customs brokerage net revenues increased $46.7 million, or 56%. Other freight forwarding related net revenues decreased $25.1 million, or 42%, for the nine months ended October 31, 2014, compared to the corresponding prior year period. Foreign currency fluctuations did not have a material impact on the change.

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As a result of the implementation of the our new freight forwarding operating system in certain of our operating locations, differences in classification exist between the presentation of product line revenues and purchase transportation costs for the nine months ended October 31, 2014 compared to the same categories for the corresponding prior year period. This is the result of our system classifying certain freight forwarding transactions by product line in a manner different than the legacy freight forwarding applications. The most significant classification difference relates to the treatment of delivery-related revenue and purchased transportation expense related to ocean-freight import shipments whereby we do not facilitate the in-bound air and ocean shipment. These activities were previously recognized in the air and/or ocean product and are now recognized in the customs brokerage product. The amount of the differences in classification for the respective periods presented is not readily available and significant effort and excessive cost would be involved in classifying the individual transactions in the legacy applications in a consistent manner with the new operating system making conforming changes impracticable. Accordingly, the comparability of the product line information for the periods presented has been impacted and will be impacted in the near-term.

Staff Costs. Staff costs in our Freight Forwarding segment increased $4.8 million, or 1%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, staff costs in our Freight Forwarding segment increased $9.0 million, or 3%. As a percentage of our Freight Forwarding segment revenues, staff costs were 16% for the nine months ended October 31, 2014 compared to 14% in the corresponding prior year period. Movements of staff costs in our Freight Forwarding segment are typically driven more by changes in total shipment counts rather than changes in volumes; however, for the nine months ended October 31, 2014, staff costs in our Freight Forwarding segment reflected higher staff costs related to the deployment of our 1View system. The number of airfreight shipments declined 8% for the nine months ended October 31, 2014 compared to the corresponding prior year period. Ocean freight shipments increased slightly during the same comparative period.

Amortization of Intangible Assets. Amortization of intangible assets increased $11.9 million for the nine months ended October 31, 2014, compared to the corresponding prior year period. Amortization expense with respect to the 1View system began in September 2013, and accordingly, we recorded additional amortization expense related to the 1View system of approximately $11.9 million during the nine months of fiscal 2015 which we did not incur in the corresponding prior year period.

Severance and Other. During the nine months ended October 31, 2014 and 2013, we incurred severance and other costs in the Freight Forwarding segment of approximately $23.6 million and $8.5 million, respectively.

During the third quarter of fiscal 2015, we incurred an impairment charge of $19.6 million in connection with an impairment of the South African Installment Receivable Agreement and other receivables. For further information, see Note 1, “Presentation of Financial Statements.” We have filed an insurance claim of ZAR 180.5 million ($16.5 million as of October 31, 2014) under the terms of an insurance policy covering the installment receivable agreement and other receivables. As of the date of the filing of this Form 10-Q, our insurance provider has neither accepted nor repudiated the claim filed by us. While we believe we should recover a substantial portion of this claim, all or a portion of the claim may become the subject of litigation between us and the insurance company. We intend to vigorously pursue all of our remedies pursuant to the insurance policy in effect as of the date of loss. No assurance can be given as to the outcome of such pursuit. Revenues from this client were $2.5 million and $49.4 million for the nine months ended October 31, 2014 and 2013, respectively. In accordance with accounting standards, we have not recognized the effects of any future insurance recovery and we will recognize the effects of any insurance recovery only when the amounts are known.

Other costs included in severance and other were comprised primarily of severance charges. These charges were primarily related to our ongoing business transformation initiatives, which include redefining business processes, developing and implementing our 1View system and rationalizing business operations to a more common organizational structure on a worldwide basis. Although a formal plan of restructuring or termination has not been adopted pursuant to ASC 420 or ASC 715, we expect to incur additional severance costs related to these transformation activities through the fiscal year ending January 31, 2015.

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Other Operating Expenses. Other operating expenses in the Freight Forwarding segment increased $7.5 million, or 5%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other operating expenses increased $9.8 million, or 7%. Other operating expenses increased during the period primarily due to expenses related to the implementation of our 1View system.

Contract Logistics and Distribution


	Contract Logistics and Distribution Nine months ended October 31,
	2014		2013		Change Amount			Change Percentage
Revenues:
Contract logistics	$	583,833	$	557,758	$	26,075			5	%
Distribution		470,561		450,257		20,304			5
Other		78,399		89,697		(11,298	)		(13	)

Total revenues		1,132,793		1,097,712		35,081			3

Purchased transportation costs:
Contract logistics		142,498		135,272		7,226			5
Distribution		328,871		314,308		14,563			5
Other		28,733		28,021		712			3

Total purchased transportations costs		500,102		477,601		22,501			5

Staff costs		312,365		314,999		(2,634	)		(1	)
Depreciation		24,890		23,356		1,534			7
Amortization of intangible assets		2,831		3,648		(817	)		(22	)
Severance and other		1,578		8,313		(6,735	)		(81	)
Other operating expenses		243,677		237,205		6,472			3

Operating income	$	47,350	$	32,590	$	14,760			45	%

Contract Logistics. Contract logistics revenues increased $26.1 million, or 5%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, contract logistics revenues increased $40.2 million, or 7%. The increase was due to increased logistics volumes in the Americas and Africa regions.

Contract logistics purchased transportation costs increased $7.2 million, or 5%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, purchased transportation costs in our contract logistics and distribution segment increased $9.2 million, or 6%. In addition to purchased transportation costs related directly to the contract logistics operations, purchased transportation costs within our Contract Logistics and Distribution segment include materials sourcing costs which we incur pursuant to formalized repackaging programs and materials sourcing agreements. These sourcing activities were generally consistent during the nine months ended October 31, 2014 when compared to the corresponding prior year period.

Distribution. Distribution revenues increased $20.3 million, or 5%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, distribution revenues increased $33.2 million, or 7%. When the effects of foreign currency fluctuations are excluded, the increase in distribution revenues was primarily due to increased client volumes in our Africa and Americas regions.

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Distribution purchased transportation costs increased $14.6 million, or 5%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, distribution purchased transportation costs increased $19.0 million, or 6%, primarily due to increased client volumes within our distribution businesses in our Africa and Americas regions.

Other. Other contract logistics and distribution revenues decreased $11.3 million, or 13%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other contract logistics and distribution revenues decreased $6.0 million, or 6%. Other purchased transportation costs increased $0.7 million, or 3%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; foreign currency fluctuations did not have a material impact on the change.

Staff Costs. Staff costs in our Contract Logistics and Distribution segment decreased $2.6 million, or 1%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, staff costs in our Contract Logistics and Distribution segment increased $7.2 million, or 2%, compared to the corresponding prior year period. This increase was primary due to increased volumes in our Africa and Americas regions.

Severance and Other. During the nine months ended October 31, 2014 and 2013, we incurred severance and other costs in our Contract Logistics and Distribution segment of approximately $1.6 million and $8.3 million, respectively, comprised primarily of severance charges. Although a formal plan of restructuring or termination has not been adopted pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 420, Exit or Disposal Cost Obligations (ASC 420) or ASC 715, Compensation – Retirement Benefits (ASC 715).

Other Operating Expenses. Other operating expenses in our Contract Logistics and Distribution segment increased $6.5 million, or 3%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other operating expense in our Contract Logistics and Distribution Segment increased $18.7 million, or 7%.

Corporate

Staff Costs. Staff costs at corporate decreased $0.4 million, or 2%, for the nine months ended October 31, 2014, compared to the corresponding prior year period.

Other Operating Expenses. Other operating expenses in corporate increased $3.9 million, or 16%, for the nine months ended October 31, 2014, compared to the corresponding prior year period; however, when the effects of foreign currency fluctuations are excluded, other operating expense in corporate increased $3.4 million, or 14%, due to transformation related initiatives, and increased legal fees.

Interest Expense, Net. Interest income typically relates primarily to interest earned on our cash deposits, while interest expense consists primarily of interest on our credit facilities and our outstanding notes. Interest income was $17.6 million and $12.7 million for the nine months ended October 31, 2014 and 2013, respectively. Interest expense was $46.8 million and $24.3 million for the nine months ended October 31, 2014 and 2013, respectively. The increase of interest expense is attributable to higher effective interest rates associated with the 2019 Notes and increased amortization of debt issuance costs.

Loss on Debt Extinguishment. Included in loss on debt extinguishment for the nine months ended October 31, 2014, is (i) a make-whole payment of $20.8 million with respect to the prepayment of the 2013 Notes, and (ii) a non-cash charge of $1.0 million related to unamortized debt issuance costs related to the prepayment of the 2013 Notes and the termination of various credit facilities.

Other Expenses, Net. Other income and expenses primarily relate to foreign currency gains and losses on certain of our intercompany loans.

- 46 -

Provision for Income Taxes. Our provision for income taxes for the nine months ended October 31, 2014 was $21.6 million on a pretax loss of $70.6 million resulting in an effective tax rate of negative 30.6%. During the nine months ended October 31, 2013, we recorded a tax provision of $30.1 million on a pretax income of $8.4 million. The $8.5 million decrease in the provision for income taxes was attributable to (i) a decrease of $6.1 million caused by the effects of valuation allowances, offset by, (ii) an increase of $1.0 million for uncertain tax positions and return to provision adjustments, (iii) a decrease of income in tax paying jurisdictions which decreased the provision by $3.4 million. Although there was a $79.0 million increased loss from the nine months ended October 31, 2013, the company does not claim tax benefits due to valuation allowances in such loss jurisdictions.

Net Income Attributable to Non-Controlling Interests. Net income attributable to non-controlling interests was $1.9 million for the nine months ended October 31, 2014, compared to $4.3 million for the corresponding prior year period.

The following tables show the revenues and net revenues attributable to our geographic regions:


	Three months ended October 31,
	2014						2013
	Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total		Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total
EMENA	$	211,773	$	58,244	$	270,017	$	220,317	$	58,031	$	278,348
Americas		126,763		223,994		350,757		164,113		206,693		370,806
Asia Pacific		275,278		23,133		298,411		262,281		22,567		284,848
Africa		75,993		83,101		159,094		131,735		88,669		220,404

Total	$	689,807	$	388,472	$	1,078,279	$	778,446	$	375,960	$	1,154,406


	Nine months ended October 31,
	2014						2013
	Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total		Freight Forwarding Revenues		Contract Logistics and Distribution Revenues		Total
EMENA	$	650,254	$	176,747	$	827,001	$	648,940	$	167,898	$	816,838
Americas		406,235		644,337		1,050,572		519,652		600,134		1,119,786
Asia Pacific		790,440		64,907		855,347		745,549		61,413		806,962
Africa		234,791		246,802		481,593		352,624		268,267		620,891

Total	$	2,081,720	$	1,132,793	$	3,214,513	$	2,266,765	$	1,097,712	$	3,364,477

- 47 -


	Three months ended October 31,
	2014						2013
	Freight Forwarding Net Revenues		Contract Logistics and Distribution Net Revenues		Total		Freight Forwarding Net Revenues		Contract Logistics and Distribution Net Revenues		Total
EMENA	$	50,971	$	33,623	$	84,594	$	57,698	$	33,883	$	91,581
Americas		38,444		100,247		138,691		47,938		90,803		138,741
Asia Pacific		53,423		14,802		68,225		50,957		15,791		66,748
Africa		23,027		66,481		89,508		25,190		71,233		96,423

Total	$	165,865	$	215,153	$	381,018	$	181,783	$	211,710	$	393,493


	Nine months ended October 31,
	2014						2013
	Freight Forwarding Net Revenues		Contract Logistics and Distribution Net Revenues		Total		Freight Forwarding Net Revenues		Contract Logistics and Distribution Net Revenues		Total
EMENA	$	170,345	$	102,533	$	272,878	$	174,721	$	98,641	$	273,362
Americas		124,766		288,431		413,197		140,404		264,668		405,072
Asia Pacific		161,145		42,333		203,478		146,528		41,272		187,800
Africa		66,199		199,394		265,593		73,112		215,530		288,642

Total	$	522,455	$	632,691	$	1,155,146	$	534,765	$	620,111	$	1,154,876

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


	Three months ended October 31,				Nine months ended October 31,
	2014		2013		2014		2013
Revenues:
Airfreight forwarding	$	319,057	$	342,447	$	955,407	$	1,021,396
Ocean freight forwarding		264,265		334,622		807,758		957,087
Customs brokerage		55,854		37,948		162,680		100,074
Contract logistics		199,142		190,699		583,833		557,758
Distribution		164,604		157,301		470,561		450,257
Other		75,357		91,389		234,274		277,905

Total	$	1,078,279	$	1,154,406	$	3,214,513	$	3,364,477

Purchased transportation costs:
Airfreight forwarding	$	250,968	$	263,162	$	737,700	$	788,560
Ocean freight forwarding		216,302		279,388		666,875		801,711
Customs brokerage		9,965		7,317		32,912		12,691
Contract logistics		50,436		44,858		142,498		135,272
Distribution		114,436		110,096		328,871		314,308
Other		55,154		56,092		150,511		157,059

Total	$	697,261	$	760,913	$	2,059,367	$	2,209,601

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The following table shows our revenues, purchased transportation costs and other operating expenses for the periods presented, expressed as a percentage of revenues:


	Three months ended October 31,						Nine months ended October 31,
	2014			2013			2014			2013
Revenues:
Airfreight forwarding		30	%		30	%		30	%		30	%
Ocean freight forwarding		25			29			25			28
Customs brokerage		5			3			5			3
Contract logistics		18			17			18			17
Distribution		15			14			15			13
Other		7			7			7			9

Total revenues		100			100			100			100

Purchased transportation costs:
Airfreight forwarding		23			23			23			23
Ocean freight forwarding		20			24			21			24
Customs brokerage		1			1			1			*
Contract logistics		5			4			4			4
Distribution		11			10			10			9
Other		5			5			5			5

Total purchased transportation costs		65			67			64			65

Staff costs		20			19			21			20
Depreciation		1			1			1			1
Amortization of intangible assets		1			*			1			*
Severance and other		2			1			1			1
Other operating expenses		13			11			13			12

Total operating expenses		102			99			101			99

Operating (loss)/income		(2	)		1			(1	)		1
Interest income		1			*			1			*
Interest expense		(2	)		(1	)		(1	)		(1	)
Other expense, net		*			*			*			*

Pretax (loss)/income		(3	)		*			(1	)		*
Provision for income taxes		*			1			1			1

Net loss		(3	)		(1	)		(2	)		(1	)
Net (loss)/income attributable to non-controlling interests		*			*			*			*

Net loss attributable to UTi Worldwide Inc.		(3	)%		(1	)%		(2	)%		(1	)%

*	Less than one percent.

Liquidity and Capital Resources

Limitations on dividends. We are a holding company that relies on dividends, distributions and advances from our subsidiaries to pay dividends on our ordinary shares and meet our financial obligations. The ability of our subsidiaries to pay such amounts to us and our ability to pay dividends and distributions to our shareholders is subject to restrictions including, but not limited to, applicable local laws and limitations contained in our bank credit facilities and long-term

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borrowings. Additionally, intercompany payments of dividends, distributions and advances can, in certain circumstances, result in adverse tax effects such as the requirement to pay withholding and corporate income taxes and distribution taxes on dividends and distributions, and can also require, in certain situations, that our subsidiaries make pro-rata payments to the minority interest holders in such entities. Additionally, in general, our subsidiaries cannot pay dividends in excess of their retained earnings. Such laws, restrictions, and effects could limit or impede intercompany dividends and distributions, or the making of intercompany advances. In addition, we currently expect that the cash and cash equivalents held by our non-U.S. subsidiaries will be used primarily to support our international operations, including paying debt service, making capital expenditures and meeting the cash needs of such operations.

Exchange control laws and regulations. Some of our subsidiaries may be subject from time to time to exchange control laws and regulations that may limit or restrict the payment of dividends or distributions or other transfers of funds by those subsidiaries to our parent holding company. Total net assets which may not be transferred to us in the form of loans, advances, or cash dividends by our subsidiaries without the consent of a third party was approximately 14% of our consolidated total net assets as of the end of the most recent fiscal year.

Client agreements involving cash. The company has entered into agreements with certain of its South African pharmaceutical distribution clients specifying the use of designated cash accounts for receivables collections from the end-recipients. In these circumstances, pursuant to the agreements with our clients and for a nominal fee, we manage our client’s collections and cash application functions, under credit terms and conditions mandated by our clients. Under these arrangements, we bill the end-recipients of the products we distribute from our warehouses on behalf of our clients. We are not obligated to remit cash receipts to our clients until such billings are recovered by us and we typically remit such billings to our clients within two to seven days subsequent to our receipt of cash from the end recipients. Although the company is required under these contracts to use such cash accounts for cash activity related to these clients, the company has access and control over such balances in the normal course of its operations. Balances in such accounts totaled approximately $33.5 million and $33.6 million at October 31, 2014 and January 31, 2014, respectively, and are included in cash and cash equivalents, with corresponding liabilities included in accounts payable in the accompanying consolidated balance sheets. These activities do not have a material impact on the company’s liquidity requirements.

South African Installment Receivable Agreement. On July 4, 2014, we entered into a ZAR 205.0 million ($18.8 million as of October 31, 2014) installment receivable agreement with a client in South Africa relating to an unpaid receivable balance. Including the installment agreement, total amounts receivable from the client are approximately $25.3 million as of October 31, 2014.

On September 19, 2014, we were notified that the client had entered into the South African equivalent of bankruptcy proceedings in the U.S, referred to as Business Rescue Proceedings. While the client continues to have a presence in the South African mining industry and is currently in negotiations with several third parties regarding a possible reorganization and restructuring, based on our participation in the negotiations during the third quarter of fiscal 2015, we currently believe a successful reorganization of the client is unlikely. As a result, we have impaired amounts under this installment receivable agreement and other receivables. Included in severance and other expenses during the third quarter of fiscal year 2015 are expenses of $19.6 million as of October 31, 2014 resulting from this impairment. After the effects of the impairment, amounts presently included in trade receivables, representing amounts considered collectible and proceeds from insurance which are not considered contingent, are $5.3 million as of October 31, 2014.

We have filed an insurance claim of ZAR 180.5 million ($16.5 million as of October 31, 2014) under the terms of an insurance policy covering the installment receivable agreement and other receivables. As of the date of the filing of this Form 10-Q, our insurance provider has neither accepted nor repudiated the claim filed by us. While we believe we should recover a substantial portion of this claim, all or a portion of the claim may become the subject of litigation between us and the insurance company. We intend to vigorously pursue all of our remedies under the insurance policy in effect as of the date of loss. In accordance with accounting standards, we have not recognized the effects of any future insurance recovery and we intend to recognize the effects of any insurance recovery only when the amounts are known.

In addition to amounts which may be recoverable under the insurance policy, the installment receivable agreement and other receivables from the client are secured by guarantees from other entities as well as a personal guarantee from the sole shareholder of the client company. We are continuing to pursue our remedies under these guarantees. No assurance can be given as to the outcome of such pursuit.

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Operating cash advances and disbursements. When we act as a customs broker, we make significant cash advances on behalf of our clients to various customs authorities around the world, predominantly in countries where our clients are importers of goods such as South Africa and Israel. These customs duties and taxes, in addition to certain other pass-through items, are not included as components of revenues and expenses. However, these advances temporarily consume cash as these items are typically paid to third parties in advance of our reimbursement from our clients. Accordingly, operating cash flows are typically stronger in periods of declining logistics activity and are comparably weaker in periods of volume growth as we must disburse cash in advance of collections from clients.

As of October 31, 2014, our cash and cash equivalents totaled $191.9 million, representing a decrease of $12.5 million from January 31, 2014, the reasons for which are discussed below.


	Nine months ended October 31,
	2014			2013
	(Unaudited)
Net cash flow (used in)/provided by:
Operating activities	$	(105,597	)		(68,862	)
Investing activities		(60,137	)		(63,738	)
Financing activities		142,246			77,354
Effect of foreign exchange rate changes on cash and cash equivalents		10,973			(10,810	)
Net decrease in cash and cash equivalents		(12,515	)		(66,056	)

Cash Used In Operating Activities. Cash used in operating activities for the nine months ended October 31, 2014 and 2013 was $105.6 million and $68.9 million, respectively.


	Nine months ended October 31,
	2014			2013
	(Unaudited)
Net cash used in operating activities:
Net loss	$	(92,181	)	$	(21,675	)

Adjustments to reconcile net loss to net cash used in operating activities
Make-whole payment		20,830			—
Non-cash adjustments		104,544			95,704

Total		125,374			95,704

Total results of operations, after cash and non-cash adjustments to net loss		33,193			74,029

Changes in operating assets and liabilities		(138,790	)		(142,891	)

Net cash used in operating activities		(105,597	)		(68,862	)

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Cash used in operating activities for the nine months ended October 31, 2014 reflected the net losses incurred from the company’s businesses compared to the losses in the prior comparable period. Included in cash adjustments to reconcile net loss to net cash used in operating activities is interest expense of $20.8 million with respect to the prepayment of the 2013 Notes. Such amount is included in net cash provided by financing activities.

Accounts receivable and accounts payable are impacted by items included in revenue and expenses, respectively, and also by billings and disbursements of pass-through items for customs duties and taxes, which are not included in revenue and expense on our consolidated statement of operations. A roll forward schedule of such activity for the nine months ended October 31, of fiscal years 2015 and 2014, respectively, is below:


Trade Receivables	Nine months ended October 31,
	2014			2013
Beginning balance	$	977,885		$	898,809

Billings:
Revenues		3,214,513			3,364,477
Billings for pass-through items		3,019,966			3,150,084

Gross billings		6,234,479			6,514,561
Amounts collected		(6,090,347	)		(6,274,335	)

Net cash outflow from billings and collections		144,132			240,226
Foreign currency translation and other		(41,611	)		(54,995	)

Ending balance	$	1,080,406		$	1,084,040


Trade Payables	Nine months ended October 31,
	2014			2013
Beginning balance	$	562,095		$	596,834

Purchased transportation costs:
Purchased transportation costs		2,059,367			2,209,601
Purchased transportation costs for pass-through items		3,019,966			3,150,084

Total accruals		5,079,333			5,359,685
Amounts disbursed		(5,087,276	)		(5,318,114	)

Net cash (outflow)/inflow from accruals and payments		(7,943	)		41,571
Foreign currency translation and other		(3,238	)		(20,559	)

Ending balance	$	550,914		$	617,846

Variances of customs duties and taxes are primarily attributable to variances in the number of clearances and the value of goods imported over the comparable periods.

Cash Used in Investing Activities. Cash used in investing activities for the first nine months of fiscal years 2015 and 2014 was $60.1 million and $63.7 million, respectively. In the first nine months of fiscal 2015, we used $32.8 million relating to funding restricted cash requirements related to our Fiscal 2015 Refinancing and we used $9.8 million of cash relating to business transformation initiatives, as compared to $27.5 million for the nine months of fiscal 2014. Cash used for other capital expenditures during the first nine months of fiscal 2015 was approximately $21.0 million, consisting primarily of computer hardware and furniture, fixtures and equipment. This compares to cash used for other

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capital expenditures during the first nine months of fiscal 2014 of approximately $36.5 million. During the normal course of operations, we have a need to acquire technology, office furniture and equipment to facilitate the handling of our clients’ freight and logistics volumes. We currently expect to incur an aggregate of approximately $40.0 million for cash capital expenditures for fiscal 2015, including an aggregate of approximately $14.0 million related to our ongoing business transformation initiatives.

Cash Provided by Financing Activities. Net cash provided by financing activities included (i) proceeds from issuance of long-term borrowings of $404.6 million, and (ii) proceeds from issuance of the Convertible Preference Shares of $175.0 million. In connection with the Fiscal 2015 Refinancing, we completed a private offering of our 2019 Notes. After deducting fees and expenses, we received net proceeds from the 2019 Notes offering of $386.1 million. In addition, in connection with the Fiscal 2015 Refinancing, we completed a private offering of our Convertible Preference Shares to an affiliate of our largest shareholder in the aggregate principal amount of $175.0 million. After deducting fees and expenses, we received net proceeds from the Convertible Preference Share offering of $170.5 million. Combined, the issuance of our 2019 Notes and Convertible Preference Shares provided cash of $556.6 million. Allocated debt and equity issuance costs in connection with the Fiscal 2015 Refinancing, including the company’s new CitiBank credit facility totaled $25.8 million.

Net cash used by financing activities included repayments of long-term borrowings of $203.5 million and repayments of bank lines of credit of $356.4 million. As part of the Fiscal 2015 Refinancing, we (i) repaid all of the $200.0 million aggregate principal amount of our 2013 Notes and paid to the holders thereof a make-whole payment with respect to such prepayment in the amount of approximately $20.8 million; (ii) refinanced indebtedness then outstanding under certain of our previously outstanding credit facilities, and we terminated certain of those credit facilities, and (iii) provided cash collateral of approximately $50.0 million for certain then outstanding letters of credit and bank guarantees. Other financing activities during the nine months ended October 31, 2014 included net borrowings from bank lines of credit of $180.6 million, increase in short-term credit facilities of $2.5 million, repayments of capital lease obligations of $10.8 million, and other net usages of $3.1 million.

Our financing activities during the nine months ended October 31, 2013 provided $77.4 million of cash, including (i) proceeds from bank lines of credit and long-term borrowings of $307.8 million, (ii) an increase in short-term credit facilities of $23.2 million, and (iii) net proceeds from issuance of ordinary shares of $3.3 million, offset by (i) net repayments of bank lines of credit and long-term borrowings, totaling $237.5 million, (ii) repayments of capital lease obligations totaling $10.2 million, and (iii) other net usages of $9.3 million.

Credit Facilities and Senior Notes

Bank Lines of Credit. We utilize a number of financial institutions to provide us with borrowings and letters of credit, guarantee and working capital facilities. Certain of these credit facilities are used for working capital, for issuing letters of credit to support the working capital and operational needs of various subsidiaries, to support various customs bonds and guarantees, and for general corporate purposes. In other cases, customs bonds and guarantees are issued directly by various financial institutions. In some cases, the use of a particular credit facility is restricted to the country in which it originates. These particular credit facilities may restrict distributions by the subsidiary operating in such country.

In connection with our completion of the Fiscal 2015 Refinancing during the first quarter of fiscal 2015 we (i) completed our private placement of the 2019 Notes, (ii) completed the private placement of our Convertible Preference Shares, (iii) entered into the CitiBank Credit Facility (iv) repaid all of the $200.0 million aggregate principal amount of our 2013 Notes and paid to the holders thereof a make-whole payment with respect to such prepayment in the amount of approximately $20.8 million, (v) refinanced indebtedness then outstanding under certain credit facilities and terminated those other credit facilities, (vi) provided approximately $50.0 million cash collateral for letters of credit and bank guarantees then outstanding under the 2011 RBS Facility and other facilities and (vii) terminated the 2011 Nedbank facility (other than certain limited provisions which survive the termination of the agreement). Continuing after the completion of the Fiscal 2015 Refinancing, we had, and we continue to maintain, our South African rand credit facility, with Nedbank Limited (the South African Facilities Agreement) and various other bank lines, letters of credit and credit facilities.

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The following table presents information about the facility limits and the aggregate amount of borrowings outstanding, as well as availability for borrowings under various bank lines, letter of credit and other credit facilities as of October 31, 2014 (the table is in thousands):


	CitiBank Credit Facility⁽¹⁾		Nedbank South African Facilities⁽²⁾		Other Facilities⁽³⁾		Total
Credit facility limit	$	143,748	$	52,150	$	136,524	$	332,422

Facility usage for cash withdrawals⁽⁴⁾		35,000		—		48,109		83,109
Letters of credit and guarantees outstanding		9,990		22,337		83,943		116,270

Total facility/usage	$	44,990	$	22,337	$	132,052	$	199,379

Available, unused capacity	$	98,758	$	29,813	$	4,472	$	133,043
Available for cash withdrawals	$	98,758	$	27,447	$	—	$	126,205

⁽¹⁾

The CitiBank Credit Facility was entered into in March 2014 in connection with the Fiscal 2015 Refinancing. The amount of cash withdrawals available under the CitiBank Credit Facility is limited to the lesser of (a) $150.0 million or (ii) (a) the borrowing base calculation for the period less (b) letters of credit or guarantees outstanding and (c) and outstanding cash withdrawals and reimbursement obligations.

⁽²⁾

In September 2014 we amended and restated our South African Facilities Agreement, which currently provides for both: (i) a 680.0 million ZAR revolving credit facility, which is comprised of a ZAR 380.0 million working capital facility and a ZAR 300.0 million letter of credit, guarantee, forward exchange contract and derivative instrument facility, and (ii) a ZAR 150.0 million revolving asset-based finance facility, which consists of a capital lease line. Excluded from the table are amounts outstanding under the ZAR 150.0 million revolving asset-based finance facility, which amounts are included under capital lease obligations on our consolidated balance sheet. The maturity date of this facility is July 9, 2016. Total facility/usage on the South African Facilities Agreement is presented net of cash and cash equivalents of $70.3 million and $60.9 million for the nine months and the fiscal year ended October 31, 2014 and January 31, 2014, respectively.

⁽³⁾	Certain letters of credit and guarantees outstanding in this column are collateralized by our cash held as collateral.

⁽⁴⁾	Certain amounts in this row reflect letters of credit and bank guarantees supporting outstanding cash borrowings by the company’s subsidiaries.

CitiBank Credit Facility. As part of the Fiscal 2015 Refinancing, in March 2014 certain of our U.S. and Canadian subsidiaries entered into the CitiBank Credit Facility, which facility is guaranteed by us and certain of our subsidiaries. The CitiBank Credit Facility provides up to $150.0 million of commitments for a senior secured asset-based revolving line of credit, including a $20.0 million sublimit for swingline loans, a $50.0 million sublimit for the issuance of standby letters of credit and a $20.0 million sublimit for loans in Canadian dollars. The maximum amount we are permitted to borrow under the CitiBank Credit Facility is subject to a borrowing base calculated by reference to our accounts receivable in the U.S. and Canada and certain eligibility criteria with respect to such receivables and other borrowing limitations. Amounts borrowed under the CitiBank Credit Facility bear interest (1) at a rate based on the London Interbank Offered Rate, or LIBOR or the Canadian equivalent, plus a margin ranging from 2.00% to 2.50%, or (2) a rate based on the higher of (a) the base prime rate offered by CitiBank, (b) 1.00% plus the one-month LIBOR rate or (c) 0.50% plus the federal funds rate or in each case, the Canadian equivalent, plus a margin ranging from 1.00% to 1.50%. The CitiBank Credit Facility will terminate in March 2019, unless the 2019 Notes are not redeemed, refinanced or converted prior to September 2018, in which case the CitiBank Credit Facility will terminate in September 2018.

The CitiBank Credit Facility is secured, subject to permitted liens and other agreed upon exceptions, by a first-priority lien on and perfected security interest in substantially all of our U.S. and Canadian assets, including accounts receivable and a pledge of the equity in our U.S. and Canadian holding and operating companies. In addition, the CitiBank Credit Facility requires that we maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 if available credit under the CitiBank Credit Facility is less than the greater of (i) 10% of the maximum credit thereunder and (ii) $15.0 million. The CitiBank Credit Facility contains customary representations and warranties and customary events of

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default, payment of customary fees and expenses, as well as certain affirmative and negative covenants, including restrictions on: indebtedness; liens; mergers, consolidations and acquisitions; sales of assets; engaging in business other than our current business; investments; dividends; redemptions and distributions; affiliate transactions; and other restrictions.

South African Facilities Agreement. The obligations of our subsidiaries under the South African Facilities Agreement are guaranteed by selected subsidiaries registered in South Africa. In addition, certain of our 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. The South African Facilities Agreement terminates in July 2016.

The South African Facilities Agreement contains events of default and covenants, including, but not limited to, financial covenants, restrictions on certain types of activities and transactions, reporting covenants, cross defaults to other indebtedness and other terms, events of default and covenants typical of credit facilities. The South African Facilities Agreement also provides for an uncommitted seasonal customs facility which may be made available to the South African Obligors at a later date if requested by the South African Obligors. In addition, the South African Facilities Agreement provides the South African Obligors with an option to request that Nedbank increase its commitments under the revolving credit facility and the revolving asset-based finance facility in an aggregate amount up to ZAR 400.0 million, subject to the approval of Nedbank and the satisfaction of certain conditions precedent.

Overdrafts under the 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 the 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 our subsidiaries party to the South African Facilities Agreement and Nedbank.

In addition to the South African Facilities Agreement described above, our South African subsidiaries have obtained customs bonds to support their customs and duties obligations to the South African customs authorities. These customs bonds are issued by South African registered insurance companies. As of October 31, 2014, the value of these contingent liabilities was $26.5 million.

Cash Pooling Arrangements. A significant number of our subsidiaries participate in cash pooling arrangements administered by various banks and which we use to fund liquidity needs of our subsidiaries. The cash pooling arrangements have no stated maturity dates and yield and bear interest at varying rates. The facilities do not permit aggregate outstanding withdrawals by our subsidiaries under an arrangement to exceed the aggregate amount of cash deposits by our subsidiaries in the arrangement at any one time. Under these arrangements, cash withdrawals of $15.2 million were included in bank lines of credit on our balance sheet at October 31, 2014.

Other Additional Facilities. In addition to the credit, letters of credit, and guarantee facilities provided under the CitiBank Credit Facility and the South African Facilities Agreement, we utilize a number of financial institutions to provide us and our subsidiaries with additional credit, letters of credit and guarantee facilities. In some cases, the use of these particular letters of credits, guarantee and credit facilities may be restricted to the country in which they originated and may restrict distributions by the subsidiary operating in the country. Our previous credit facility with Sumitomo Mitsui Banking (Sumitomo) Corporation terminated in accordance with its terms in October 2014 and all amounts which were then outstanding were repaid by the company.

The CitiBank Credit Facility, the South African Facilities Agreement, and certain of our other credit, letters of credit and guarantee facilities also contain other limitations on the payment by us and/or by our various subsidiaries of dividends, distributions and share repurchases. In addition, if a “change in control” (as defined in the various agreements and facilities) should occur, then the outstanding indebtedness thereunder may become due and payable. Furthermore, the CitiBank Credit Facility, the South African Facilities Agreement, and certain of our other credit facilities contain cross-default provisions with respect to other indebtedness, giving the lenders under such credit facilities the right to declare a default if we default under other indebtedness in certain circumstances. Should we fail to comply with the covenants in the CitiBank Credit Facility, the South African Facilities Agreement, or certain of our other credit, letters of

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credit or guarantee facilities, we would be required to seek to amend the covenants or to seek a waiver of such non-compliance as we were required to do in the past under our prior facilities. If we are unable to obtain any necessary amendments or waivers, all or a portion of the indebtedness and obligations under the various facilities could become immediately due and payable and the various agreements and facilities could be terminated and the credit, letters of credit and guarantee facilities provided thereunder would no longer be available to us.

The maximum and average borrowings against all of our bank lines of credit during the nine months of fiscal 2015 were $334.8 million and $213.7 million, respectively. The maximum and average borrowings against all of our bank lines of credit during the nine months of fiscal 2014 were $319.4 million and $240.7 million, respectively. Borrowings during our reporting periods may be materially different than the period-end amounts recorded in the financial statements due to requirements to fund customs duties and taxes, changes in accounts receivable and payable, and other working capital requirements.

Short-term Borrowings. We also have a number of short-term borrowings issued by various parties not covered under the facilities described above. The total of such borrowings at October 31, 2014 and January 31, 2014 was $10.0 million and $7.6 million, respectively.

Long-term Borrowings. The following table presents information about the company’s indebtedness pursuant to its 2019 Notes and other long-term borrowings as of October 31, 2014:


	2019 Notes⁽¹⁾			Other Facilities			Total
Maturity date		March 1, 2019
Original principal	$	400,000
Original issuance discount for fair value of conversion feature	$	47,690
Interest rate per annum		4.50	%		1.00	%
Discount rate		7.40	%

Balance at October 31, 2014:
Current portion of long-term borrowings		—			1,776			1,776
Long-term borrowings, excluding current portion		357,600			8,697			366,297

Total	$	357,600		$	10,473		$	368,073

(1)

The fair value of the 2019 Notes has been bifurcated and presented in equity under common stock in the company’s consolidated financial statements beginning in April 30, 2014. The amount including in long-term borrowings is accreting to the $400.0 million redemption value using a discount rate of approximately 7.4%, which approximated the company’s fair-value incremental borrowing rate for a similar debt instrument (without the conversion feature) as of the date of issuance.

2019 Notes. On March 4, 2014, we completed a private offering of our 4.50% 2019 Notes in the aggregate principal amount of $400.0 million, and entered into an indenture (the Indenture) with Wells Fargo Bank, National Association, as trustee, in connection therewith. After deducting fees and expenses, we received net proceeds from the offering of the 2019 Notes of $386.1 million. The Indenture governs the 2019 Notes and contains terms and conditions customary for transactions of this type, including customary events of default. The 2019 Notes bear interest at an annual rate of 4.50% payable in cash semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2014. The 2019 Notes will be due and payable by the company when they mature on March 1, 2019, unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date. We may not redeem the 2019 Notes at our option prior to maturity unless certain tax related events occur. In addition, the Indenture provides that if we undergo certain types of “fundamental changes” prior to the maturity date of the 2019 Notes, each 2019 Note holder has the option to require us to repurchase all or any of such holder’s 2019 Notes for cash. Pursuant to the terms of the Indenture, the 2019 Notes will be convertible into the company’s ordinary shares at a conversion rate of 68.9703 ordinary shares per $1,000 principal amount of 2019 Notes (equivalent to an initial conversion price of approximately $14.50 per ordinary share), subject to adjustment, upon the occurrence of certain events prior to the close of business on the

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business day immediately preceding September 1, 2018, and, on or after September 1, 2018, by a holder’s surrender for conversion of any of its 2019 Notes at any time prior to the close of the business day immediately preceding the maturity date. Upon a conversion of the 2019 Notes, in accordance with the Indenture the Company has the option to pay or deliver, as the case may be, cash, its ordinary shares or a combination of cash and ordinary shares, at its election.

Off-Balance Sheet Arrangements

Other than operating leases, we have no material off-balance sheet arrangements.

Critical Accounting Estimates

Our consolidated financial statements are prepared in conformity with U.S. GAAP. The preparation thereof requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information and actual results could differ materially from those estimates. There have been no significant changes in our critical accounting estimates during the first three months of fiscal 2015.

Goodwill and Intangible Assets. Intangible assets with indefinite lives, including goodwill, are assessed at least annually for impairment in accordance with ASC 350, Intangibles – Goodwill and Other. We complete the required impairment test annually in the second quarter, and also when evidence of potential impairment exists. When it is determined that impairment has occurred, a charge to operations is recorded. In order to test for potential impairment, we utilize a discounted cash flow analysis, corroborated by comparative market multiples where appropriate.

Due to the many variables inherent in the estimation of fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of the impairment analysis. The principal factors requiring judgment include factors used in the discounted cash flow analysis, including the projected results of operations, weighted average cost of capital (WACC), and terminal value assumptions. The WACC takes into account the relative weight of each component of our consolidated capital structure (equity and debt) and represents the expected cost of new capital adjusted as appropriate to consider risk profiles specific to us. The terminal value assumptions are applied to the final year of the discounted cash flow model. Due to the many variables inherent in the estimation of fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of the impairment analysis.

We identified seven goodwill reporting units for the required impairment test conducted in the second quarter of fiscal 2014, and based on our results of the Step 1 testing, no impairment charge resulted from such analysis. However, for our Americas Contract Logistics and Africa Contract Logistics reporting units, the fair values of the reporting unit assets exceeded the carrying values by approximately 7% each, respectively. Due to the margin of passing the Step 1 goodwill impairment testing conducted in the second quarter of fiscal 2014, if the projected operational results are not achieved, there is the potential for a partial or full impairment of the goodwill value in the future, particularly with respect to these reporting units. Several of the key assumptions for achieving the projected operational results include certain revenue growth and operating cost assumptions. As of October 31, 2014, the goodwill carrying value for the Americas Contract Logistics and Africa Contract Logistics reporting units were $41.0 million and $29.6 million, respectively.

We experienced a significant decline in our market capitalization during the second quarter of fiscal 2015. For the purposes of our goodwill impairment evaluation this was considered to be an indicator that impairment may have occurred within our freight forwarding reporting unit. Accordingly, during the quarter ended April 30, 2014 the Company performed an interim test of recoverability of its goodwill and intangible assets in its freight forwarding reporting unit and no impairment was identified.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

As of October 31, 2014, there had been no material changes to our exposure to market risks since January 31, 2014, as described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014 on file with the SEC. For a

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discussion of our market risks associated with foreign currencies, interest rates and market rates, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2014.

Item 4.

Controls and Procedures

“Disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are the controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in its Exchange Act reports is accumulated and communicated to the issuer’s management, including each of its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, under the direction and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures as of October 31, 2014. During this evaluation, a material weakness in our internal control over financial reporting was identified, which weakness was also previously disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014. This material weakness relates to the fact that there is currently an insufficient number of shared service center financial accounting and reporting resources to allow for timely analysis and recording of financial statement amounts given the company’s current migration to its new freight forwarding application. As a result, underlying controls related to account reconciliations and analysis across a number of trade receivable and payable accrual accounts were not operating effectively. This material weakness is described more fully in our Management’s Report on Internal Controls Over Financial Reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) and the related Report of Independent Registered Public Accounting Firm, which are contained in Item 15 of Part IV of our Annual Report on Form 10-K for the fiscal year ended January 31, 2014. Furthermore based upon our evaluation (which evaluation included our Chief Executive Officer and Chief Financial Officer) as of October 31, 2014, our management (which included our Chief Executive Officer and Chief Financial Officer) concluded that our disclosure controls and procedures were ineffective as of October 31, 2014, due solely to the material weakness in our internal control over financial reporting.

Management is in the process of improving and strengthening the internal controls related to the above matter, including the completion of a review of the staffing levels of appropriate financial accounting and reporting resources at its shared service centers and its controls and procedures concerning account reconciliations and analysis across its trade receivables and payable accrual accounts. Notwithstanding the above process, the identified material weakness in our internal control over financial reporting will not be considered remediated until the new controls are fully implemented, in operation for a sufficient period of time, tested and concluded by management to be designed and operating effectively.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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Part II. OTHER INFORMATION

Item 1.

Legal Proceedings

In connection with Financial Accounting Standards Board (FASB) Accounting Standards Codification (FASB Codification or ASC) Topic 450, Contingencies (ASC 450), we have not accrued for material loss contingencies relating to the investigations and legal proceedings disclosed below 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 and reasonably estimable.

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. 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 effect on our results of operations for that period or future periods. As of the date of this report, we are not a party to any material litigation, except as described below.

Industry-Wide Anti-Trust Investigation. On March 28, 2012 we were notified by the EC that it had adopted a decision against us and two of our subsidiaries relating to alleged anti-competitive behavior in the market for freight forwarding services in the European Union/European Economic Area. The decision of the EC imposes a fine of euro 3.1 million (or approximately $3.9 million at October 31, 2014) against us. We believe that neither we nor our subsidiaries violated European competition rules. In June 2012, we appealed the decision and the amount of the fine before the European Union’s General Court and oral arguments were heard in October 2014.

In May 2009, we learned that the Brazilian Ministry of Justice was investigating possible alleged cartel activity in the international air and ocean freight forwarding market. On August 6, 2010, we received notice of an administrative proceeding from the Brazilian Ministry of Justice. The administrative proceeding initiates a proceeding against us, our Brazilian subsidiary and two of its employees, among many other forwarders and their employees, alleging possible anti-competitive behavior contrary to Brazilian rules on competition. We responded to this proceeding in May 2014. We filed a supplemental response in support of our defense in September 2014 after we were granted access to various documents seized by the Brazilian antitrust authority during raids of several other forwarders.

In May 2012, the Competition Commission of Singapore informed us that it was contemplating an administrative investigation into possible alleged cartel activity in the international freight forwarding market. In January 2013, we provided information and documents related to the air Automated Manifest System (AMS) fee in response to a notice we received in November 2012 from the Competition Commission of Singapore requesting the information and indicating that the commission suspected that we engaged in alleged anti-competitive behavior relating to freight forwarding services to and from Singapore. In September 2013, we received a follow-up request for information and provided such information in November 2013.

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

We have incurred, and we may in the future incur, significant legal fees and other costs in connection with these governmental investigations and lawsuits. If any regulatory body concludes that we have engaged in anti-competitive behavior, we could incur significant additional legal fees and other costs and penalties, which could include substantial fines, penalties and/or criminal sanctions against us and/or certain of our current or former officers, directors and employees, and we could be liable for damages. Any of these fees, costs, penalties, damages, sanctions or liabilities could have a material adverse effect on us and our financial results.

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Matters Related to the Fiscal 2015 Financing. On March 17, 2014, a putative securities class action lawsuit was filed against us and certain of our executives in the United States District Court for the Central District of California. As amended on September 5, 2014, the complaint, which is captioned Michael J. Angley, individually and on behalf of himself and all others similarly situated v. UTi Worldwide Inc., Eric W. Kirchner, Richard G. Rodick, Edward G. Feitzinger and Jeffrey W. Misakian, No. 2:14-cv-02066, generally alleges that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10b-5 promulgated thereunder and Section 20(a) of the Exchange Act by misstating or failing to disclose, in certain public statements made and in filings with the SEC between March 28, 2013 and February 26, 2014, material facts relating to our liquidity position, financial condition, financial covenants, financial systems and freight forwarding operating system. The complaint seeks unspecified damages and other relief. The company and the individual defendants deny any allegations of wrongdoing and intend to vigorously defend against this lawsuit. All defendants moved to dismiss on November 4, 2014.

In July 2014, we received a subpoena from the SEC requesting certain documents related to, among other things, the facts and circumstances surrounding the Fiscal 2015 Refinancing. In September 2014, we received a similar subpoena directed to the members of the Audit Committee of the Board of Directors. We have been cooperating and intend to continue to cooperate with the SEC inquiry.

Item 1A.

Risk Factors

Our business, financial condition and results of operations are subject to a number of factors, risks and uncertainties. There have been no material changes to the risk factors as disclosed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2014 filed with the SEC. The disclosures in our Annual Report on Form 10-K and in other reports and filings are not necessarily a definitive list of all factors that may affect our business, financial condition and future results of operations.

Item 5.

Other Information

On December 4, 2014, the Company entered into a Parent Customer Agreement (the Customer Agreement) with Greensill Capital (UK) Limited (Greensill) and a Re-invoicing Service Agreement (the Re-invoicing Agreement) with Bramid Outsource Limited (an affiliate of Greensill and the Re-Invoicing Agent) (the Service Agreement and the Re-invoicing Agreement are referred to herein collectively as the Financing Agreements). Pursuant to the Financing Agreements, the Company can submit written requests to the Re-Invoicing Agent pursuant to which the Company may receive an advance of funds to pay such invoices. Greensill may elect, but has no obligation, to advance such funds to the Company on terms set forth in such offer and Greensill retains the right to evaluate each request submitted by the Company and may establish the terms of each advance at the time a request is submitted. The Financing Agreements do not contain a commitment as to any particular level of advances to the Company. If the Re-Invoicing Agent and Greensill choose to enter into a transaction, the Re-Invoicing Agent shall charge the Company a fee based on an annual rate of Libor plus 9.5%. The principal portion of such advance and the fee are due on the maturity of such advance which may vary by agreement between the parties. If any amount is not paid on the maturity date, the advance will continue to accrue interest at Libor plus 9.5%. As of the date of this filing, the Company is authorized to finance up to $40.0 million under these Financing Agreements.

Events of default under the Financing Agreements include the failure to make a payment within five business days after the applicable due date, an insolvency event and a default by the Company on certain other indebtedness. Upon an event of default, all advances outstanding under the Financing Agreements become due and payable. The Financing Agreements terminate in December 2017, subject to earlier termination as provided for therein.

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Item 6.

Exhibits


Exhibit		Description

3.1		Amended and Restated Memorandum of Association of the company (incorporated by reference to Exhibit 3.1 to the company’s Current Report on Form 8-K, filed March 3, 2014)

3.2		Amended and Restated Articles of Association of the company (incorporated by reference to Exhibit 3.2 to the company’s Current Report on Form 8-K, filed March 3, 2014)

10.1		Amendment and Restatement Agreement, as of September 5, 2014, by and among certain subsidiaries of UTi Worldwide Inc. and Nedbank Limited, with attached Amended and Restated Facilities Agreement (incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K (file No. 000-31869), filed September 11, 2014)

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Definition Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*	Indicates compensatory arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	UTi Worldwide Inc.

Date: December 9, 2014	By:	/s/ Edward G. Feitzinger
		Edward G. Feitzinger
		Chief Executive Officer

Date: December 9, 2014	By:	/s/ Richard G. Rodick
		Richard G. Rodick
		Executive Vice President – Finance and Chief Financial Officer Principal Financial Officer and Principal Accounting Officer

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EXHIBIT INDEX


Exhibit		Description

3.1		Amended and Restated Memorandum of Association of the company (incorporated by reference to Exhibit 3.1 to the company’s Current Report on Form 8-K, filed March 3, 2014)

3.2		Amended and Restated Articles of Association of the company (incorporated by reference to Exhibit 3.2 to the company’s Current Report on Form 8-K, filed March 3, 2014)

10.1		Amendment and Restatement Agreement, as of September 5, 2014, by and among certain subsidiaries of UTi Worldwide Inc. and Nedbank Limited, with attached Amended and Restated Facilities Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 000-31869), filed September 11, 2014)

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Definition Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

*	Indicates compensatory arrangement

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Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company