2d507a2b7de0d0b3834de55711778494335324c997424af036ba9075d8132b95

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

08b98b8fdf0d2a2a5f8734d78588d843eb22b4efef6126100e762c87624cc079

29ea94b28819732dd9e7e84c2efcbbb161d2091c06c65c1c21d7b18b705b35b4

Airfreight Services

Ocean Freight

Customs Brokerage

Ocean Freight and Ocean Services

- Ocean Freight Consolidation

- Order Management

- Direct Ocean Forwarding

Customs Brokerage and Other Services

Total Revenue

853b86614d9572e308bc977e035fd53b3f3e125c75c5559b0c7d3c4a66233845

Ocean containers shipped (percentage)

Airfreight tonnage (percentage)

Ocean containers shipped in North America (percentage)

65dd78b429e2e192c1c55d2fb7987a1c1f3201be2429c4e42126a111366e4c8c

703bb67afaca5c01f3969828e15a465b4c93cf726c2316a5bdf023c5ae86e092

2d38bcd999d147d28aa6fecc0115e947416509c5ad03fb877bb3aa9cd7b860a8

Total revenues (USD, thousands)

Total operating expenses (USD, thousands)

Operating income (USD, thousands)

Other income, net (USD, thousands)

Earnings before income taxes (USD, thousands)

Income tax expense (USD, thousands)

Net earnings (USD, thousands)

Net earnings attributable to shareholders (USD, thousands)

Diluted earnings attributable to shareholders per share (USD)

Basic earnings attributable to shareholders per share (USD)

Weighted average diluted shares outstanding (thousands)

Weighted average basic shares outstanding (thousands)

1ef42c81b0a1a282bf238f70bfd4ee7dff63343fabe6066d92c9b0266d471883

The negative operating cash flow in Q4 2023 was driven primarily by a substantial drop in net earnings (a **28% decline** year-over-year) along with adverse changes in working capital. There was a notable **increase in accounts receivable** of **$55,481 thousand**, which consumed cash, while the positive impacts from increases in accounts payable and accrued expenses, deferred contract costs, and income taxes payable were not sufficient to offset these outflows. These combined factors led to the significantly lower operating cash flow observed in Q4 2023.  **[0000950170-24-017029_expd-ex99_1.htm:5]** **[0000950170-24-017029_expd-ex99_1.htm:2]** 

Why was Operating Cash Flow negative in Q4 2023?

The documents indicate that while there was a significant change in the Purchase of property and equipment in Q4 2023, they do not provide any detailed explanation regarding what drove the positive cash inflow from this activity in that period.  **[0000950170-24-017029_expd-ex99_1.htm:5]** 

What drove the positive cash inflow from Purchase of property and equipment in Q4 2023?

The steep drop in operating cash flow in Q2 2024 was primarily driven by **lower net earnings**—an **18% decrease** compared to Q2 2023—and several changes in working capital. Specifically, there was a significant **increase in accounts receivable by $(286,085) thousand**, which indicated slower collections or higher credit sales, while **accounts payable increased by $211,692 thousand**, partially offsetting the receivable impact. Additionally, **deferred contract costs rose by $(122,258) thousand**, consuming more cash, and **contract liabilities increased by $135,067 thousand**, which had a different effect on cash flow. A smaller decrease in **income taxes payable (a drop of $(29,854) thousand)** compared to the previous period also contributed to the decline in cash flows.  **[0000950170-24-091438_expd-ex99_1.htm:5]** **[0000950170-24-093558_expd-20240630.htm:3]** **[0000950170-24-093558_expd-20240630.htm:18]** 

What factors contributed to the steep drop in Operating Cash Flow in Q2 2024?

fd01dcdb93a0e5860e6f2c6777e54d07f7f6e1eb38c1a3102eeada1adaa41ced

Cash and cash equivalents in Q2 2024 were low due to a combination of factors. **Operating activities** provided significantly less cash compared to previous periods, driven by **lower net earnings** and increases in working capital such as **accounts receivable** and **contract liabilities**. Additionally, investments in **capital expenditures** and notable cash outflows from **financing activities**—including substantial **stock repurchases** and **dividends paid**—further decreased the cash balance. Finally, adverse **exchange rate changes** contributed to the reduction in cash and cash equivalents.  **[0000950170-24-091438_expd-ex99_1.htm:5]** **[0000950170-24-093558_expd-20240630.htm:3]** 

Why was Cash and cash equivalents so low in Q2 2024?

The jump in **Total Assets** during Q3 2024 was mainly driven by a significant increase in **accounts receivable** (rising from **$1,532,599** at the end of 2023 to **$2,176,959** in Q3 2024) and a major rise in **deferred contract costs** (increasing from **$218,807** to **$431,640**). This reflects stronger business activity, higher revenue growth, and increased volumes in air and ocean freight during the period. Additionally, while there was a slight rise in **operating lease right-of-use assets** and a drop in **cash and cash equivalents**, these factors played a less influential role compared to the primary drivers.  **[0000950170-24-121182_expd-ex99_1.htm:3]** **[0000950170-24-121496_expd-20240930.htm:1]** **[0000950170-24-121496_expd-20240930.htm:18]** 

What drove the jump in Total assets in Q3 2024?

The spike in Q3 2024 was primarily driven by significant increases in several components: **Accounts Payable** rose markedly due to higher operational activity and related costs; **Contract Liabilities** increased, likely reflecting higher customer prepayments or deferred revenue tied to increased volumes in ocean and air freight; and there were also moderate increases in **Accrued Liabilities** and the **Current Portion of Operating Lease Liabilities**. These factors combined as the company grew operationally and required additional working capital to support that growth.  **[0000950170-24-121182_expd-ex99_1.htm:3]** **[0000950170-24-121496_expd-20240930.htm:1]** 

Why did Total current liabilities spike in Q3 2024?

61ec99de093bb493e1e6df593df7fe0f12f03cdfadbe6a607dfd023c80ba26d8

The revenues weren't "negative" in the sense of being below zero, but they experienced a significant decline. In Q4 2023, revenues dropped by **34%** compared to Q4 2022. This decline was primarily driven by **decreased volumes** in key segments—such as a **3%** drop in airfreight tonnage and a **10%** drop in ocean container volumes—and by **lower revenues** across services. Notably, airfreight services declined by **28%**, ocean freight revenue fell by **54%**, and customs brokerage revenue decreased by **19%**. Additional factors included challenging market conditions—like global conflicts and cautious inventory management by shippers—and the impact of **excess capacity** which put further pressure on pricing.  **[0000950170-24-017029_expd-ex99_1.htm:2]** **[0000950170-24-017029_expd-ex99_1.htm:0]** **[0000950170-24-017029_expd-ex99_1.htm:4]** 

Why were revenues negative in Q4 2023?

The operating income turned negative in Q4 2023 primarily because the company experienced a steep **34% decline in total revenues** compared to Q4 2022. This decrease was driven by significant drops in key segments—**airfreight services** revenue fell **28%**, **ocean freight and ocean services** revenue dropped **54%**, and **customs brokerage and other services** revenue declined **19%**. Additionally, unfavourable market conditions (such as the lingering impacts of the COVID-19 pandemic, increased market capacity, and cautious inventory management by shippers) and modest reductions in operating expenses that couldn’t fully offset the revenue decline contributed to the negative operating income ( **[0000950170-24-019394_expd-20231231.htm:85]** **[0000950170-24-017029_expd-ex99_1.htm:2]** **[0000950170-24-017029_expd-ex99_1.htm:0]** **[0000950170-24-017029_expd-ex99_1.htm:4]** ).

Why did operating income turn negative in Q4 2023?

The drastic drop in diluted EPS in Q4 2023 was primarily driven by a **34% decline in revenues** to **$2.3 billion**, which was largely due to lower demand and pricing in airfreight and ocean freight services. Additionally, **operating income fell by 40% to $199 million** and **net earnings decreased by 28% to $159 million**, further contributing to the EPS decline. Other contributing factors included **reduced shipment volumes** (with a **3% drop in airfreight tonnage** and a **10% decrease in ocean container volume**) and overall **market uncertainty** due to economic and geopolitical factors.  **[0000950170-24-017029_expd-ex99_1.htm:0]** **[0000950170-24-017029_expd-ex99_1.htm:2]** 

What caused the drastic drop in diluted EPS in Q4 2023?

The lower diluted EPS in Q1 2024 is primarily due to a challenging operating environment. Total revenues dropped by **15%** (from **$2.59 billion** to **$2.21 billion**), and operating income declined by **22%** (from **$276 million** to **$215 million**). These declines were compounded by cost pressures—such as only a modest **7%** decrease in salaries and other operating expenses—and adverse market conditions, including lower airfreight and ocean freight rates due to excess capacity and broader economic uncertainties. These factors combined to produce a Q1 2024 diluted EPS of **$1.17**, which is notably lower than the annual diluted EPS of **$5.01** in FY 2023.  **[0000950170-24-019394_expd-20231231.htm:85]** **[0000950170-24-056466_expd-20240331.htm:2]** **[0000950170-24-054162_expd-ex99_1.htm:0]** **[0000950170-24-054162_expd-ex99_1.htm:3]** 

Expeditors International of Washington Inc (EXPD)

Financials