Q
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Washington
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91-1069248
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
|
|
|
1015 Third Avenue, 12
th
Floor, Seattle, Washington
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98104
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
|
|
NASDAQ Global Select Market
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Large accelerated filer
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x
|
|
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Accelerated filer
|
o
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|
|
|
|
|
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
|
o
|
•
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Americas
|
◦
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United States (47)
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◦
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Other North America (10)
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◦
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Latin America (15)
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•
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Asia Pacific (42)
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•
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Europe (50)
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•
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Middle East, Africa and India (22)
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Name
|
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Age
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|
Position
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Jeffrey S. Musser
|
|
49
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|
President, Chief Executive Officer and director
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James L.K. Wang
|
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66
|
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President-Asia and director
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R. Jordan Gates
|
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59
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President and Chief Operating Officer and director
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Philip M. Coughlin
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54
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President-Global Geographies and Operations
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Rommel C. Saber
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57
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President-Europe, Africa, Near/Middle East and Indian Subcontinent
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Eugene K. Alger
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54
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Executive Vice President-Global Services
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Bradley S. Powell
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54
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Senior Vice President and Chief Financial Officer
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Christopher J. McClincy
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40
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Senior Vice President and Chief Information Officer
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Benjamin G. Clark
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46
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Senior Vice President-General Counsel
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RISK FACTORS
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DISCUSSION AND POTENTIAL SIGNIFICANCE
|
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Key Personnel
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The Company is a service business. The quality of this service is directly related to the quality of the Company’s employees. Identifying, training and retaining key employees is essential to continued growth and future profitability. Effective succession planning is an important element of the Company's programs. Failure to ensure an effective transfer of knowledge and smooth transitions involving key employees could hinder the Company's ability to execute on its business strategies and level of service. Senior management of the Company includes employees with long tenures, many of whom are approaching retirement age and some of whom announced their retirement in 2014. The loss of the services of one or more key personnel could have an adverse effect on the Company’s business. The Company must continue to develop and retain management personnel to address issues of succession planning.
The Company believes that its compensation programs, which have been in place since the Company became a publicly traded entity, are one of the unique characteristics responsible for differentiating its performance from that of many of its competitors. Significant changes to its compensation programs could affect the Company’s performance and ability to attract and retain key personnel. Continued loyalty to the Company will not be assured by contract.
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Technology
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The Company relies heavily and must compete based upon the flexibility and sophistication of the technologies utilized in performing its core businesses. Future results depend upon the Company's success in the cost effective development, maintenance and integration of secure communication and information systems technologies, including those acquired from and maintained by third parties. As the Company and its customers continue to increase reliance on these systems and as additional features are added, the risks also increase. The Company has begun upgrading many of its systems, including core operations and accounting. This process is inherently complex and if not managed properly could lead to disruptions in the Company's operations. The Company has implemented processes and procedures to mitigate these risks; however, these measures cannot assure the prevention of a serious negative event in the future.
Any significant disruptions to the Company’s global systems or the Internet for any reason, which could include equipment or network failures, power outages, sabotage, employee error or other actions, cyber-attacks or other security breaches, geo-political activity or natural disasters, would have a material negative effect on the Company's results and could include loss of revenue, business disruptions including the inability to timely process shipments, loss of property including trade secrets and confidential information, legal claims and proceedings, reporting delays or errors, interference with regulatory reporting, significant remediation costs, an increase in costs to protect the Company's systems and technology and damage to its reputation.
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Growth
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The Company has historically relied primarily upon organic growth and has tended to avoid growth through acquisition. Future results will depend upon the Company’s ability to anticipate and adapt to constantly evolving supply chain requirements and innovations. To continue to grow organically, the Company must gain profitable market share and successfully develop and market new service offerings. When investment opportunities arise, the Company’s success will be dependent on its ability to evaluate and integrate the acquisitions.
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Regulatory Environment
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The Company is affected by ever increasing regulations from a number of sources in the United States and in foreign locations in which the Company operates. Many of these regulations are complex and require varying degrees of interpretation and increase the Company's costs. The current business environment tends to stress the avoidance of risk through regulation and oversight, the effect of which is likely to be unforeseen costs and potentially unforeseen consequences.
In reaction to the continuing global terrorist threat, governments around the world are continuously enacting or updating security regulations. These regulations are multi-layered, increasingly technical in nature and characterized by a lack of harmonization of substantive requirements amongst various governmental authorities. Furthermore, the implementation of these regulations, including deadlines and substantive requirements, is driven by political urgencies rather than the industries’ realistic ability to comply.
Failure to consistently and timely comply with these regulations, or the failure, breach or compromise of the Company’s policies and procedures or those of its service providers or agents, may result in increased operating costs, damage to the Company’s reputation, restrictions on operations and/or fines and penalties.
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|
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RISK FACTORS
|
|
DISCUSSION AND POTENTIAL SIGNIFICANCE
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Competition
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|
The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. There are a large number of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement of logistics services is more limited. Many of these competitors have significantly more resources than the Company. Depending on the location of the shipper and the importer, the Company must compete against both the niche players and larger entities, including some carriers. The primary competitive factors are price and quality of service. Many larger customers utilize the services of multiple logistics providers. Customers regularly solicit bids from competitors in order to improve service, pricing and contractual terms such as seeking longer payment terms, higher or unlimited liability limits and performance penalties. Increased competition and competitors' acceptance of expanded contractual terms could result in reduced revenues, reduced margins, higher operating costs or loss of market share, any of which would damage the Company’s results of operations and financial condition.
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Taxes
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The Company is subject to many taxes in the United States and foreign jurisdictions. In many of these jurisdictions, the tax laws are very complex and are open to different interpretations and application. Tax authorities frequently implement new taxes and change their tax rates and rules, including interpretations of those rules. The Company is regularly under audit by tax authorities. Although the Company believes its tax estimates are reasonable, the final determination of tax audits, including transfer pricing inquiries, could be materially different from the Company’s tax provisions and accruals and negatively impact its financial results.
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Litigation/Investigations
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As a multinational corporation, the Company is subject to formal or informal investigations or litigation from governmental authorities or others in the countries in which it does business. These investigations and other periodic investigations may require management time and could cause the Company to incur substantial additional legal and related costs, which may include fines and/or penalties that could have a material impact on the Company’s results of operations and operating cash flows.
The Company may also become subject to other civil litigation arising from such investigations or litigation, including but not limited to shareholder class action lawsuits and derivative claims made on behalf of the plaintiffs.
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Economic Conditions
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The global economy and capital and credit markets continue to experience uncertainty and volatility. Unfavorable changes in economic conditions may result in lower freight volumes and adversely affect the Company’s revenues and operating results, as experienced in 2009 and 2012. These conditions may adversely affect certain of the Company’s customers, carriers and third party services providers. Were that to occur, the Company’s revenues and net earnings could also be adversely affected. Should customers’ ability to pay deteriorate, additional bad debts may be incurred.
These unfavorable conditions can create situations where rate increases charged by carriers and other service providers are implemented with little or no advanced notice. The Company often times cannot pass these rate increases on to its customers in the same time frame, if at all. As a result, the Company’s yields and margins can be negatively impacted, as experienced in 2012 and parts of 2013 and 2014, particularly with ocean freight.
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Catastrophic Events
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A disruption or failure of the Company’s systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack, strike, civil unrest, pandemic or other catastrophic event could cause delays in providing services or performing other mission-critical functions. The Company’s corporate headquarters, and certain other critical business operations are in the Seattle, Washington area, which is near major earthquake faults. A catastrophic event that results in the destruction or disruption of any of the Company’s critical business or information technology systems could harm the Company’s ability to conduct normal business operations and its operating results.
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Location
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Nature of Property
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United States:
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Washington, Seattle
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Corporate headquarters
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California, Brisbane
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Office and warehouse building
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California, Hawthorne
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Office and warehouse building
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Florida, Miami
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Office and warehouse building
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Illinois, Bensenville
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Office and warehouse building
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New Jersey, Edison
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Office and warehouse building
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New York, Inwood
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Office and warehouse building
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Texas, Humble
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Office and warehouse building
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Washington, SeaTac
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Office building
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Washington, Spokane
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Office building
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Asia Pacific:
|
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China, Beijing
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Office and warehouse building
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China, Shanghai
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Office building
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China, Shenzhen
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Offices
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China, Tianjin
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Offices
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Hong Kong, Kowloon
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Offices
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Korea, Seoul
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Office and warehouse
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Taiwan, Taipei
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Offices
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Europe:
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Belgium, Brussels
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Office and warehouse building
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England, London
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Office and warehouse building
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Ireland, Cork
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Office and warehouse building
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Ireland, Dublin
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Office and warehouse building
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Latin America:
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Costa Rica, Alajuela
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Office building
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Middle East:
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Egypt, Cairo
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Office and warehouse building
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Common Stock
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Common Stock
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||||||||||||
Quarter
|
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High
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Low
|
|
Quarter
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High
|
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Low
|
||||||||
2014
|
|
|
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|
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2013
|
|
|
|
|
||||||||
First
|
|
$
|
45.69
|
|
|
$
|
38.42
|
|
|
First
|
|
$
|
43.80
|
|
|
$
|
35.33
|
|
Second
|
|
$
|
46.80
|
|
|
$
|
38.54
|
|
|
Second
|
|
$
|
40.71
|
|
|
$
|
34.83
|
|
Third
|
|
$
|
45.78
|
|
|
$
|
39.97
|
|
|
Third
|
|
$
|
45.48
|
|
|
$
|
37.79
|
|
Fourth
|
|
$
|
47.24
|
|
|
$
|
38.14
|
|
|
Fourth
|
|
$
|
46.90
|
|
|
$
|
41.79
|
|
June 16, 2014
|
$
|
0.32
|
|
December 15, 2014
|
$
|
0.32
|
|
June 17, 2013
|
$
|
0.30
|
|
December 16, 2013
|
$
|
0.30
|
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
|
Maximum
Number
of Shares
that
May Yet Be
Purchased
Under the
Plans or
Programs
|
|||||
October 1-31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
15,757,532
|
|
November 1-30, 2014
|
|
491,441
|
|
|
$
|
46.07
|
|
|
491,441
|
|
|
15,775,012
|
|
December 1-31, 2014
|
|
1,184,000
|
|
|
$
|
44.75
|
|
|
1,184,000
|
|
|
14,221,713
|
|
Total
|
|
1,675,441
|
|
|
$
|
—
|
|
|
1,675,441
|
|
|
14,221,713
|
|
|
|
12/09
|
|
12/10
|
|
12/11
|
|
12/12
|
|
12/13
|
|
12/14
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Expeditors International of Washington, Inc.
|
|
$
|
100.00
|
|
$
|
158.45
|
|
$
|
120.16
|
|
$
|
117.76
|
|
$
|
133.68
|
|
$
|
136.68
|
|
Standard and Poor's 500 Index
|
|
100.00
|
|
115.06
|
|
117.49
|
|
136.30
|
|
180.44
|
|
205.14
|
|
||||||
NASDAQ Transportation
|
|
100.00
|
|
128.91
|
|
111.44
|
|
122.10
|
|
161.38
|
|
229.56
|
|
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues
|
|
$
|
6,564,721
|
|
|
6,080,257
|
|
|
5,992,215
|
|
|
6,161,537
|
|
|
5,978,286
|
|
Net revenues
1
|
|
1,981,427
|
|
|
1,882,853
|
|
|
1,835,370
|
|
|
1,907,516
|
|
|
1,703,499
|
|
|
Net earnings attributable to shareholders
|
|
376,888
|
|
|
348,526
|
|
|
333,360
|
|
|
385,679
|
|
|
344,172
|
|
|
Diluted earnings attributable to shareholders per share
|
|
1.92
|
|
|
1.68
|
|
|
1.57
|
|
|
1.79
|
|
|
1.59
|
|
|
Basic earnings attributable to shareholders per share
|
|
1.92
|
|
|
1.69
|
|
|
1.58
|
|
|
1.82
|
|
|
1.62
|
|
|
Dividends declared and paid per common share
|
|
0.64
|
|
|
0.60
|
|
|
0.56
|
|
|
0.50
|
|
|
0.40
|
|
|
Working capital
|
|
1,305,467
|
|
|
1,545,069
|
|
|
1,515,041
|
|
|
1,490,738
|
|
|
1,278,377
|
|
|
Total assets
|
|
2,890,905
|
|
|
3,014,812
|
|
|
2,954,125
|
|
|
2,866,827
|
|
|
2,679,179
|
|
|
Shareholders’ equity
|
|
1,868,408
|
|
|
2,084,783
|
|
|
2,027,699
|
|
|
2,003,638
|
|
|
1,740,906
|
|
|
Weighted average diluted shares outstanding
|
|
196,768,067
|
|
|
206,895,473
|
|
|
211,935,171
|
|
|
215,033,580
|
|
|
216,446,656
|
|
|
Weighted average basic shares outstanding
|
|
196,146,676
|
|
|
205,994,656
|
|
|
210,422,945
|
|
|
212,117,511
|
|
|
212,283,966
|
|
•
|
Total dedication, first and foremost, to providing superior customer service;
|
•
|
Compliance with Company policies and government regulations;
|
•
|
Aggressive marketing of all of the Company’s service offerings;
|
•
|
Ongoing development of key employees and management personnel via formal and informal means;
|
•
|
Creation of unlimited advancement opportunities for employees dedicated to hard work, personal growth and continuous improvement;
|
•
|
Individual commitment to the identification and mentoring of successors for every key position so that when inevitable change occurs, a qualified and well-trained internal candidate is ready to step forward; and
|
•
|
Continuous identification, design and implementation of system solutions, both technological and otherwise, to meet and exceed the needs of the Company's customers while simultaneously delivering tools to make the Company's employees more efficient and more effective.
|
•
|
Ensure every operating unit's base-line growth strategies for the air, ocean and customs services both defend existing market share and grow at the rate of that unit's (i.e. district or region) relevant market growth rate. Transcon and Distribution services are expected to maintain current growth rates.
|
•
|
Align and integrate European-Asian Pacific interests and European-North Americas interest to the same degree Asian Pacific and Americas interests have historically been aligned. This alignment is expected to result in additional growth in these markets beyond the base-line growth expectations, referenced above.
|
•
|
Leverage our long and deeply entrenched presence in various Asian export markets, and the reputation we have with strategic carriers servicing those markets, to create a stronger Asian import presence while concentrating and enhancing export capabilities in key strategic lanes, particularly into and out of China and Southeast Asia. This is expected to create additional product growth opportunities in these markets.
|
•
|
Expand market share growth and position in North America, traditionally the Company's most strategic market.
|
•
|
accounts receivable valuation;
|
•
|
accrual of costs related to ancillary services the Company provides;
|
•
|
accrual of insurance liabilities for the portion of the related exposure which the Company has self-insured;
|
•
|
accrual of various tax liabilities;
|
•
|
accrual of loss contingencies; and
|
•
|
calculation of stock-based compensation expense.
|
|
|
2014
|
|
2013
|
|
2012
|
|
|||||||||||||||
In thousands
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
|||||||||
Airfreight services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
2,780,840
|
|
|
|
|
$
|
2,633,830
|
|
|
|
|
$
|
2,600,916
|
|
|
|
|
|||
Expenses
|
|
2,103,777
|
|
|
|
|
1,994,374
|
|
|
|
|
1,983,696
|
|
|
|
|
||||||
Net revenues
|
|
677,063
|
|
|
34
|
%
|
|
639,456
|
|
|
34
|
%
|
|
617,220
|
|
|
34
|
%
|
|
|||
Ocean freight and ocean services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
2,174,394
|
|
|
|
|
1,958,231
|
|
|
|
|
1,974,891
|
|
|
|
|
||||||
Expenses
|
|
1,712,795
|
|
|
|
|
1,521,340
|
|
|
|
|
1,542,170
|
|
|
|
|
||||||
Net revenues
|
|
461,599
|
|
|
23
|
|
|
436,891
|
|
|
23
|
|
|
432,721
|
|
|
24
|
|
|
|||
Customs brokerage and other services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
1,609,487
|
|
|
|
|
1,488,196
|
|
|
|
|
1,416,408
|
|
|
|
|
||||||
Expenses
|
|
766,722
|
|
|
|
|
681,690
|
|
|
|
|
630,979
|
|
|
|
|
||||||
Net revenues
|
|
842,765
|
|
|
43
|
|
|
806,506
|
|
|
43
|
|
|
785,429
|
|
|
42
|
|
|
|||
Total net revenues
|
|
1,981,427
|
|
|
100
|
|
|
1,882,853
|
|
|
100
|
|
|
1,835,370
|
|
|
100
|
|
|
|||
Overhead expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Salaries and related costs
|
|
1,065,329
|
|
|
54
|
|
|
1,032,601
|
|
|
55
|
|
|
995,052
|
|
|
54
|
|
|
|||
Other
|
|
321,450
|
|
|
16
|
|
|
298,179
|
|
|
16
|
|
|
309,520
|
|
|
17
|
|
|
|||
Total overhead expenses
|
|
1,386,779
|
|
|
70
|
|
|
1,330,780
|
|
|
71
|
|
|
1,304,572
|
|
|
71
|
|
|
|||
Operating income
|
|
594,648
|
|
|
30
|
|
|
552,073
|
|
|
29
|
|
|
530,798
|
|
|
29
|
|
|
|||
Other income, net
|
|
16,241
|
|
|
1
|
|
|
20,523
|
|
|
1
|
|
|
19,595
|
|
|
1
|
|
|
|||
Earnings before income taxes
|
|
610,889
|
|
|
31
|
|
|
572,596
|
|
|
30
|
|
|
550,393
|
|
|
30
|
|
|
|||
Income tax expense
|
|
231,429
|
|
|
12
|
|
|
222,585
|
|
|
12
|
|
|
217,424
|
|
|
12
|
|
|
|||
Net earnings
|
|
379,460
|
|
|
19
|
|
|
350,011
|
|
|
18
|
|
|
332,969
|
|
|
18
|
|
|
|||
Less net earnings (losses) attributable to the noncontrolling interest
|
|
2,572
|
|
|
—
|
|
|
1,485
|
|
|
—
|
|
|
(391
|
)
|
|
—
|
|
|
|||
Net earnings attributable to shareholders
|
|
$
|
376,888
|
|
|
19
|
%
|
|
$
|
348,526
|
|
|
18
|
%
|
|
$
|
333,360
|
|
|
18
|
%
|
|
|
|
|
|
Amount of commitment expiration per period
|
||||||||||||
In thousands
|
|
Total
amounts
committed
|
|
Less than 1
year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
After
5 years
|
||||||
Standby letters of credit and guarantees
|
|
$
|
73,902
|
|
|
63,598
|
|
|
9,965
|
|
|
339
|
|
|
—
|
|
|
|
|
|
Payments due by period
|
||||||||||||
In thousands
|
|
Total
|
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
After
5 years
|
|||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating leases
|
|
$
|
123,328
|
|
|
40,693
|
|
|
50,380
|
|
|
23,194
|
|
|
9,061
|
|
Unconditional purchase obligations
|
|
44,090
|
|
|
44,090
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Construction, equipment and technology purchase obligations
|
|
18,372
|
|
|
13,921
|
|
|
4,451
|
|
|
—
|
|
|
—
|
|
|
Total contractual cash obligations
|
|
$
|
185,790
|
|
|
98,704
|
|
|
54,831
|
|
|
23,194
|
|
|
9,061
|
|
Document
|
|
Page
|
|||
|
|
|
|
||
1
|
|
|
Financial Statements and Reports of Independent Registered Public Accounting Firm:
|
|
|
|
|
|
|
||
|
|
|
F-1 and F-2
|
||
|
|
|
|
||
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
||
|
|
|
F-3
|
||
|
|
|
|
||
|
|
|
F-4
|
||
|
|
|
|
|
|
|
|
|
F-5
|
||
|
|
|
|
||
|
|
|
F-6 and F-7
|
||
|
|
|
|
||
|
|
|
F-8
|
||
|
|
|
|
||
|
|
|
F-9 through F-19
|
(1)
|
Includes
3,494,196
available for issuance under the employee stock purchase plans,
102,050
available for future grants of stock options and
219,298
available for issuance of restricted stock.
|
|
|
|
|
Page
|
(a)
|
1.
|
FINANCIAL STATEMENTS
|
|
|
|
|
|
F-1 and F-2
|
|
|
|
|
F-3
|
|
|
|
|
F-4
|
|
|
|
|
F-5
|
|
|
|
|
F-6 and F-7
|
|
|
|
|
F-8
|
|
|
|
|
F-9 through F-19
|
|
|
2.
|
FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
Schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the consolidated financial statements or notes thereto.
|
|
|
|
3.
|
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
|
|
|
(1)
|
Form of Employment Agreement executed by Jeffrey S. Musser, the Company’s President and Chief Executive Officer. See Exhibit 10.23.
|
(2)
|
Form of Employment Agreement executed by the Company’s President and Chief Operating Officer and certain of the Company’s executive officers. See Exhibit 10.24.
|
(3)
|
Form of Employment Agreement executed by the Company’s Chief Financial Officer. See Exhibit 10.25.
|
(4)
|
Form of Employment Agreement executed by the Company's President-Asia Pacific and Director. See Exhibit 10.26.
|
(5)
|
The Company’s Amended 1993 Directors’ Non-Qualified Stock Option Plan. See Exhibit 10.39.
|
(6)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 1993 Directors’ Non-Qualified Stock Option Plan. See Exhibit 10.9.
|
(7)
|
The Company’s Amended 1997 Non-Qualified and Incentive Stock Option Plan. See Exhibit 10.40.
|
(8)
|
Form of Stock Option Agreement used in connection with Non-Qualified options granted under the Company’s 1997 Non-Qualified and Incentive Stock Option Plan. See Exhibit 10.30.
|
(9)
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 1997 Non-Qualified and Incentive Stock Option Plan. See Exhibit 10.31.
|
(10)
|
The Company’s 2008 Executive Incentive Compensation Plan. See Exhibit 10.35.
|
(11)
|
The Company’s 2014 Directors’ Restricted Stock Plan. See Exhibit 10.36.
|
(12)
|
The Company’s 2002 Employee Stock Purchase Plan. See Exhibit 10.42.
|
(13)
|
The Company’s amendment to the 2002 Employee Stock Purchase Plan. See Exhibit 10.42.1
|
(14)
|
The Company’s 2005 Stock Option Plan. See Exhibit 10.45.
|
(15)
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2005 Stock Option Plan. See Exhibit 10.46.
|
(16)
|
The Company’s 2006 Stock Option Plan. See Exhibit 10.47.
|
(17)
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2006 Stock Option Plan. See Exhibit 10.48.
|
(18)
|
The Company’s 2007 Stock Option Plan. See Exhibit 10.49.
|
(19)
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2007 Stock Option Plan. See Exhibit 10.50.
|
(20)
|
The Company’s 2008 Stock Option Plan. See Exhibit 10.51.
|
(21)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2008 Stock Option Plan. See Exhibit 10.52.
|
(22)
|
The Company’s 2009 Stock Option Plan. See Exhibit 10.53.
|
(23)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2009 Stock Option Plan. See Exhibit 10.54.
|
(24)
|
The Company’s 2010 Stock Option Plan. See Exhibit 10.55.
|
(25)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2010 Stock Option Plan. See Exhibit 10.56.
|
(26)
|
The Company’s 2011 Stock Option Plan. See Exhibit 10.57.
|
(27)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2011 Stock Option Plan. See Exhibit 10.58.
|
(28)
|
The Company’s 2012 Stock Option Plan. See Exhibit 10.59.
|
(29)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2012 Stock Option Plan. See Exhibit 10.60.
|
(30)
|
The Company’s 2013 Stock Option Plan. See Exhibit 10.61.
|
(31)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2013 Stock Option Plan. See Exhibit 10.62.
|
(32)
|
The Company’s 2014 Stock Option Plan. See Exhibit 10.63
|
(33)
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2014 Stock Option Plan. See Exhibit 10.64
|
Exhibit Number
|
|
Exhibit
|
|
|
|
||
3.1
|
|
|
The Company’s Restated Articles of Incorporation and the Articles of Amendment thereto dated December 9, 1993. (Incorporated by reference to Exhibit 3.1 to Form 10-K, filed on or about March 31, 1995.)
|
|
|
||
3.1.1
|
|
|
Articles of Amendment to the Restated Articles of Incorporation dated November 12, 1996. (Incorporated by reference to Exhibit 3.1.1 to Form 10-K, filed on or about March 31, 1997.)
|
|
|
||
3.1.2
|
|
|
Articles of Amendment to the Restated Articles of Incorporation dated May 20, 1999. (Incorporated by reference to Exhibit 3.1.2 to Form 10-K, filed on or about March 28, 2003.)
|
|
|
||
3.1.3
|
|
|
Articles of Amendment to the Restated Articles of Incorporation dated June 12, 2002. (Incorporated by reference to Exhibit 3.1.3 to Form 10-K, filed on or about March 28, 2003.)
|
|
|
|
|
3.1.4
|
|
|
Articles of Amendment to the Restated Articles of Incorporation dated August 2, 2006. (Incorporated by reference to Exhibit 3.1.4 to Form 10-K, filed on or about February 27, 2013.)
|
|
|
||
3.2
|
|
|
The Company’s Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 to Form 8-K, filed on or about December 23, 2013.)
|
|
|
||
10.9
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 1993 Directors’ Non-Qualified Stock Option Plan. (Incorporated by reference to Exhibit 10.9 to Form 10-K, filed on or about March 28, 1994.)
|
|
|
||
10.18
|
|
|
Plan and Agreement of Reorganization, dated as of January 1, 1984, between the Company and the individual shareholders of Fons Pte. Ltd. (Incorporated by reference to Exhibit 2.5 to Registration Statement No. 2-91224, filed on May 21, 1984.)
|
|
|
|
|
10.19
|
|
|
Plan and Agreement of Reorganization, dated as of January 1, 1984, among the Company, EIO Investment Ltd., Wong Hoy Leung, Chiu Chi Shing, and James Li Kou Wang. (Incorporated by reference to Exhibit 2.6 to Registration Statement No. 2-91224, filed on May 21, 1984.)
|
|
|
|
|
10.23
|
|
|
Form of Employment Agreement executed by Jeffrey S. Musser, the Company’s President and Chief Executive Officer dated December 31, 2008.
|
|
|
||
10.24
|
|
|
Form of Employment Agreement executed by the Company’s President and Chief Operating Officer and certain of the Company’s executive officers dated December 31, 2008. (Incorporated by reference to Exhibit 10.24 to Form 10-K, filed on or about February 27, 2009.)
|
|
|
||
10.25
|
|
|
Form of Employment Agreement executed by the Company’s Chief Financial Officer dated December 31, 2008. (Incorporated by reference to Exhibit 10.25 to Form 10-K, filed on or about February 27, 2009.)
|
|
|
||
10.26
|
|
|
Form of Employment Agreement executed by the Company's President Asia-Pacific and Director. (Incorporated by reference to Exhibit 10.18 to Registration Statement No. 2-91224, filed on May 21, 1984.)
|
|
|
|
|
10.30
|
|
|
Form of Stock Option Agreement used in connection with Non-Qualified options granted under the Company’s 1997 Non-Qualified and Incentive Stock Option Plan. (Incorporated by reference to Exhibit 10.30 to Form 10-K, filed on or about March 31, 1998.)
|
|
|
||
10.31
|
|
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 1997 Non Qualified and Incentive Stock Option Plan. (Incorporated by reference to Exhibit 10.31 to Form 10-K, filed on or about March 31, 1998.)
|
|
|
||
10.35
|
|
|
The Company’s 2008 Executive Incentive Compensation Plan. (Incorporated by reference to Appendix C of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2008.)
|
|
|
||
10.36
|
|
|
The Company’s 2014 Directors’ Restricted Stock Plan. (Incorporated by reference to Appendix D of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
||
10.39
|
|
|
The Company’s Amended 1993 Directors’ Non-Qualified Stock Option Plan. (Incorporated by reference to Appendix B of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 28, 2001.)
|
|
|
||
10.39.1
|
|
|
Amendment to Amended 1993 Directors’ Non-Qualified Stock Option Plan (Incorporated by reference to Exhibit 10.39.1 to Form 10-Q filed on or about August 9, 2007.)
|
|
|
||
10.40
|
|
|
The Company’s Amended 1997 Non-Qualified and Incentive Stock Option Plan. (Incorporated by reference to Appendix C of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 28, 2001.)
|
|
|
||
10.42
|
|
|
The Company’s 2002 Employee Stock Purchase Plan. (Incorporated by reference to Appendix C of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
||
10.42.1
|
|
|
The Company’s amendment to the 2002 Employee Stock Purchase Plan. (Incorporated by reference to Appendix C of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
10.45
|
|
|
The Company’s 2005 Stock Option Plan. (Incorporated by reference to Appendix A of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 31, 2005.)
|
|
|
||
10.46
|
|
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2005 Stock Option Plan. (Incorporated by reference to Exhibit 10.46 to Form 10-K filed on or about March 1, 2007.)
|
|
|
||
10.47
|
|
|
The Company’s 2006 Stock Option Plan. (Incorporated by reference to Appendix A of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about April 4, 2006.)
|
|
|
||
10.48
|
|
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2006 Stock Option Plan. (Incorporated by reference to Exhibit 10.48 to Form 10-K filed on or about March 1, 2007.)
|
|
|
||
10.49
|
|
|
The Company’s 2007 Stock Option Plan. (Incorporated by reference to Appendix A of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 30, 2007.)
|
|
|
||
10.50
|
|
|
Form of Stock Option Agreement used in connection with Incentive options granted under the Company’s 2007 Stock Option Plan. (Incorporated by reference to Exhibit 10.50 to Form 10-K filed on or about February 9, 2008.)
|
|
|
||
10.51
|
|
|
The Company’s 2008 Stock Option Plan. (Incorporated by reference to Appendix A of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2008.)
|
|
|
||
10.52
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2008 Stock Option Plan. (Incorporated by reference to Exhibit 10.52 to Form 10-K filed on or about February 27, 2009.)
|
|
|
||
10.53
|
|
|
The Company’s 2009 Stock Option Plan. (Incorporated by reference to Appendix A of the Company’s Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2009.)
|
|
|
||
10.54
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company’s 2009 Stock Option Plan. (Incorporated by reference to Exhibit 10.2 to Form 8-K filed on or about May 11, 2009.)
|
|
|
|
|
10.55
|
|
|
The Company's 2010 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 19, 2010.)
|
|
|
|
|
10.56
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2010 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 19, 2010.)
|
|
|
|
|
10.57
|
|
|
The Company's 2011 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 18, 2011.)
|
|
|
|
|
10.58
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2011 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 18, 2011.)
|
|
|
|
|
10.59
|
|
|
The Company's 2012 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2012.)
|
|
|
|
|
10.60
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2012 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2012.)
|
|
|
|
|
10.61
|
|
|
The Company's 2013 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 29, 2013.)
|
|
|
|
|
10.62
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2013 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 29, 2013.)
|
|
|
|
|
10.63
|
|
|
The Company's 2014 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
10.64
|
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2014 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
21.1
|
|
|
Subsidiaries of the registrant.
|
|
|
|
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32
|
|
|
Certification pursuant to 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 Calculation Linkbase Document.
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Bradley S. Powell
|
|
|
Bradley S. Powell
|
|
|
Senior Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
|
|
|
|
/s/ Jeffrey S. Musser
|
|
President, Chief Executive Officer and Director
|
|
(Jeffrey S. Musser)
|
|
(Principal Executive Officer) and Director
|
|
|
|
|
|
/s/ R. Jordan Gates
|
|
President and Chief Operating Officer and Director
|
|
(R. Jordan Gates)
|
|
|
|
|
|
|
|
/s/ James Li Kou Wang
|
|
President-Asia Pacific and Director
|
|
(James Li Kou Wang)
|
|
|
|
|
|
|
|
/s/ Bradley S. Powell
|
|
Senior Vice President and Chief Financial Officer
|
|
(Bradley S. Powell)
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ Robert R. Wright
|
|
Chairman of the Board and Director
|
|
(Robert R. Wright)
|
|
|
|
|
|
|
|
/s/ Mark A. Emmert
|
|
Director
|
|
(Mark A. Emmert)
|
|
|
|
|
|
|
|
/s/ Dan P. Kourkoumelis
|
|
Director
|
|
(Dan P. Kourkoumelis)
|
|
|
|
|
|
|
|
/s/ Michael J. Malone
|
|
Director
|
|
(Michael J. Malone)
|
|
|
|
|
|
|
|
/s/ Richard B. McCune
|
|
Director
|
|
(Richard B. McCune)
|
|
|
|
|
|
|
|
/s/ John W. Meisenbach
|
|
Director
|
|
(John W. Meisenbach)
|
|
|
|
|
|
|
|
/s/ Liane J. Pelletier
|
|
Director
|
|
(Liane J. Pelletier)
|
|
|
|
|
|
|
|
/s/ Tay Yoshitani
|
|
Director
|
|
(Tay Yoshitani)
|
|
|
|
|
|
|
/s/ KPMG LLP
|
|
|
Seattle, Washington
|
|
|
February 26, 2015
|
|
|
|
|
|
/s/ KPMG LLP
|
|
|
Seattle, Washington
|
|
|
February 26, 2015
|
|
|
December 31,
|
2014
|
|
2013
|
|||
Current Assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
927,107
|
|
|
1,247,652
|
|
Short-term investments
|
40,336
|
|
|
26,337
|
|
|
Accounts receivable, less allowance for doubtful accounts of $7,119 in 2014 and $8,695 in 2013
|
1,236,042
|
|
|
1,073,500
|
|
|
Deferred Federal and state income taxes
|
20,279
|
|
|
18,396
|
|
|
Other
|
65,486
|
|
|
49,384
|
|
|
Total current assets
|
2,289,250
|
|
|
2,415,269
|
|
|
Property and equipment, net
|
538,415
|
|
|
563,064
|
|
|
Goodwill
|
7,927
|
|
|
7,927
|
|
|
Other assets, net
|
55,313
|
|
|
28,552
|
|
|
Total assets
|
$
|
2,890,905
|
|
|
3,014,812
|
|
|
|
|
|
|||
Current Liabilities:
|
|
|
|
|||
Accounts payable
|
$
|
770,238
|
|
|
648,156
|
|
Accrued expenses, primarily salaries and related costs
|
192,468
|
|
|
200,301
|
|
|
Federal, state and foreign income taxes
|
21,077
|
|
|
21,743
|
|
|
Total current liabilities
|
983,783
|
|
|
870,200
|
|
|
Deferred Federal and state income taxes
|
35,514
|
|
|
58,281
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|||
Shareholders’ Equity:
|
|
|
|
|||
Preferred stock, par value $0.01 per share, authorized 2,000,000 shares; none issued
|
—
|
|
|
—
|
|
|
Common stock, par value $0.01 per share, authorized 640,000,000 shares;
|
|
|
|
|||
issued and outstanding 191,655,690 shares at December 31, 2014
|
|
|
|
|||
and 202,553,220 shares at December 31, 2013
|
1,916
|
|
|
2,025
|
|
|
Additional paid-in capital
|
1,113
|
|
|
1,647
|
|
|
Retained earnings
|
1,903,196
|
|
|
2,087,376
|
|
|
Accumulated other comprehensive loss
|
(37,817
|
)
|
|
(6,265
|
)
|
|
Total shareholders’ equity
|
1,868,408
|
|
|
2,084,783
|
|
|
Noncontrolling interest
|
3,200
|
|
|
1,548
|
|
|
Total equity
|
1,871,608
|
|
|
2,086,331
|
|
|
Total liabilities and equity
|
$
|
2,890,905
|
|
|
3,014,812
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|
2012
|
||||
Revenues:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
$
|
2,780,840
|
|
|
2,633,830
|
|
|
2,600,916
|
|
Ocean freight and ocean services
|
|
2,174,394
|
|
|
1,958,231
|
|
|
1,974,891
|
|
|
Customs brokerage and other services
|
|
1,609,487
|
|
|
1,488,196
|
|
|
1,416,408
|
|
|
Total revenues
|
|
6,564,721
|
|
|
6,080,257
|
|
|
5,992,215
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
2,103,777
|
|
|
1,994,374
|
|
|
1,983,696
|
|
|
Ocean freight and ocean services
|
|
1,712,795
|
|
|
1,521,340
|
|
|
1,542,170
|
|
|
Customs brokerage and other services
|
|
766,722
|
|
|
681,690
|
|
|
630,979
|
|
|
Salaries and related costs
|
|
1,065,329
|
|
|
1,032,601
|
|
|
995,052
|
|
|
Rent and occupancy costs
|
|
102,810
|
|
|
98,437
|
|
|
98,580
|
|
|
Depreciation and amortization
|
|
49,292
|
|
|
48,071
|
|
|
39,940
|
|
|
Selling and promotion
|
|
38,125
|
|
|
33,243
|
|
|
34,184
|
|
|
Other
|
|
131,223
|
|
|
118,428
|
|
|
136,816
|
|
|
Total operating expenses
|
|
5,970,073
|
|
|
5,528,184
|
|
|
5,461,417
|
|
|
Operating income
|
|
594,648
|
|
|
552,073
|
|
|
530,798
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
||||
Interest income
|
|
10,773
|
|
|
11,810
|
|
|
12,763
|
|
|
Other, net
|
|
5,468
|
|
|
8,713
|
|
|
6,832
|
|
|
Other income, net
|
|
16,241
|
|
|
20,523
|
|
|
19,595
|
|
|
Earnings before income taxes
|
|
610,889
|
|
|
572,596
|
|
|
550,393
|
|
|
Income tax expense
|
|
231,429
|
|
|
222,585
|
|
|
217,424
|
|
|
Net earnings
|
|
379,460
|
|
|
350,011
|
|
|
332,969
|
|
|
Less net earnings (losses) attributable to the noncontrolling interest
|
|
2,572
|
|
|
1,485
|
|
|
(391
|
)
|
|
Net earnings attributable to shareholders
|
|
$
|
376,888
|
|
|
348,526
|
|
|
333,360
|
|
Diluted earnings attributable to shareholders per share
|
|
$
|
1.92
|
|
|
1.68
|
|
|
1.57
|
|
Basic earnings attributable to shareholders per share
|
|
$
|
1.92
|
|
|
1.69
|
|
|
1.58
|
|
Weighted average diluted shares outstanding
|
|
196,768,067
|
|
|
206,895,473
|
|
|
211,935,171
|
|
|
Weighted average basic shares outstanding
|
|
196,146,676
|
|
|
205,994,656
|
|
|
210,422,945
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|
2012
|
||||
Net earnings
|
|
$
|
379,460
|
|
|
350,011
|
|
|
332,969
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments, net of tax of $17,348 in 2014, $6,574 in 2013 and $4,419 in 2012
|
|
(32,080
|
)
|
|
(12,420
|
)
|
|
8,164
|
|
|
Reclassification adjustments for foreign currency realized losses, net of tax of $61 in 2014 and $348 in 2012
|
|
111
|
|
|
—
|
|
|
647
|
|
|
Other comprehensive (loss) income
|
|
(31,969
|
)
|
|
(12,420
|
)
|
|
8,811
|
|
|
Comprehensive income
|
|
347,491
|
|
|
337,591
|
|
|
341,780
|
|
|
Less comprehensive income (loss) attributable to the noncontrolling interest
|
|
2,155
|
|
|
1,064
|
|
|
(278
|
)
|
|
Comprehensive income attributable to shareholders
|
|
$
|
345,336
|
|
|
336,527
|
|
|
342,058
|
|
|
Common Stock
|
|||||
|
Shares
|
|
Par Value
|
|||
Balance at December 31, 2011
|
212,003,662
|
|
|
$
|
2,120
|
|
Exercise of stock options and release of restricted shares
|
1,653,994
|
|
|
16
|
|
|
Issuance of shares under stock purchase plan
|
773,661
|
|
|
8
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(8,039,304
|
)
|
|
(80
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Tax benefits from stock plans, net
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
Dividends paid ($0.56 per share)
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2012
|
206,392,013
|
|
|
2,064
|
|
|
Exercise of stock options and release of restricted shares
|
1,509,890
|
|
|
15
|
|
|
Issuance of shares under stock purchase plan
|
800,461
|
|
|
8
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(6,149,144
|
)
|
|
(62
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Tax benefits from stock plans, net
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
Dividends paid ($0.60 per share)
|
—
|
|
|
—
|
|
|
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2013
|
202,553,220
|
|
|
2,025
|
|
|
Exercise of stock options and release of restricted shares
|
1,528,758
|
|
|
15
|
|
|
Issuance of shares under stock purchase plan
|
671,775
|
|
|
7
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(13,098,063
|
)
|
|
(131
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Tax benefits from stock plans, net
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
Dividends paid ($0.64 per share)
|
—
|
|
|
—
|
|
|
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2014
|
191,655,690
|
|
|
$
|
1,916
|
|
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated other
comprehensive
income (loss)
|
|
Total
shareholders’
equity
|
|
Noncontrolling
interest
|
|
Total
equity
|
||||||
Balance at December 31, 2011
|
13,260
|
|
|
1,991,222
|
|
|
(2,964
|
)
|
|
2,003,638
|
|
|
6,431
|
|
|
2,010,069
|
|
Exercise of stock options and release of restricted shares
|
29,103
|
|
|
—
|
|
|
—
|
|
|
29,119
|
|
|
—
|
|
|
29,119
|
|
Issuance of shares under stock purchase plan
|
23,384
|
|
|
—
|
|
|
—
|
|
|
23,392
|
|
|
—
|
|
|
23,392
|
|
Shares repurchased under provisions of stock repurchase plans
|
(113,633
|
)
|
|
(188,701
|
)
|
|
—
|
|
|
(302,414
|
)
|
|
—
|
|
|
(302,414
|
)
|
Stock compensation expense
|
44,058
|
|
|
—
|
|
|
—
|
|
|
44,058
|
|
|
—
|
|
|
44,058
|
|
Tax benefits from stock plans, net
|
5,111
|
|
|
—
|
|
|
—
|
|
|
5,111
|
|
|
—
|
|
|
5,111
|
|
Net earnings
|
—
|
|
|
333,360
|
|
|
—
|
|
|
333,360
|
|
|
(391
|
)
|
|
332,969
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
8,698
|
|
|
8,698
|
|
|
113
|
|
|
8,811
|
|
Dividends paid ($0.56 per share)
|
—
|
|
|
(117,263
|
)
|
|
—
|
|
|
(117,263
|
)
|
|
—
|
|
|
(117,263
|
)
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,282
|
)
|
|
(1,282
|
)
|
Balance at December 31, 2012
|
1,283
|
|
|
2,018,618
|
|
|
5,734
|
|
|
2,027,699
|
|
|
4,871
|
|
|
2,032,570
|
|
Exercise of stock options and release of restricted shares
|
35,760
|
|
|
—
|
|
|
—
|
|
|
35,775
|
|
|
—
|
|
|
35,775
|
|
Issuance of shares under stock purchase plan
|
23,969
|
|
|
—
|
|
|
—
|
|
|
23,977
|
|
|
—
|
|
|
23,977
|
|
Shares repurchased under provisions of stock repurchase plans
|
(105,398
|
)
|
|
(156,476
|
)
|
|
—
|
|
|
(261,936
|
)
|
|
—
|
|
|
(261,936
|
)
|
Stock compensation expense
|
43,813
|
|
|
—
|
|
|
—
|
|
|
43,813
|
|
|
—
|
|
|
43,813
|
|
Tax benefits from stock plans, net
|
2,174
|
|
|
—
|
|
|
—
|
|
|
2,174
|
|
|
—
|
|
|
2,174
|
|
Net earnings
|
—
|
|
|
348,526
|
|
|
—
|
|
|
348,526
|
|
|
1,485
|
|
|
350,011
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(11,999
|
)
|
|
(11,999
|
)
|
|
(421
|
)
|
|
(12,420
|
)
|
Dividends paid ($0.60 per share)
|
—
|
|
|
(123,292
|
)
|
|
—
|
|
|
(123,292
|
)
|
|
—
|
|
|
(123,292
|
)
|
Purchase of noncontrolling interest
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|
(3,226
|
)
|
|
(3,180
|
)
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,161
|
)
|
|
(1,161
|
)
|
Balance at December 31, 2013
|
1,647
|
|
|
2,087,376
|
|
|
(6,265
|
)
|
|
2,084,783
|
|
|
1,548
|
|
|
2,086,331
|
|
Exercise of stock options and release of restricted shares
|
45,454
|
|
|
—
|
|
|
—
|
|
|
45,469
|
|
|
—
|
|
|
45,469
|
|
Issuance of shares under stock purchase plan
|
23,793
|
|
|
—
|
|
|
—
|
|
|
23,800
|
|
|
—
|
|
|
23,800
|
|
Shares repurchased under provisions of stock repurchase plans
|
(114,216
|
)
|
|
(436,434
|
)
|
|
—
|
|
|
(550,781
|
)
|
|
—
|
|
|
(550,781
|
)
|
Stock compensation expense
|
42,533
|
|
|
—
|
|
|
—
|
|
|
42,533
|
|
|
—
|
|
|
42,533
|
|
Tax benefits from stock plans, net
|
1,061
|
|
|
—
|
|
|
—
|
|
|
1,061
|
|
|
—
|
|
|
1,061
|
|
Net earnings
|
—
|
|
|
376,888
|
|
|
—
|
|
|
376,888
|
|
|
2,572
|
|
|
379,460
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(31,552
|
)
|
|
(31,552
|
)
|
|
(417
|
)
|
|
(31,969
|
)
|
Dividends paid ($0.64 per share)
|
—
|
|
|
(124,634
|
)
|
|
—
|
|
|
(124,634
|
)
|
|
—
|
|
|
(124,634
|
)
|
Purchase of noncontrolling interest
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
|
—
|
|
|
841
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(503
|
)
|
|
(503
|
)
|
Balance at December 31, 2014
|
1,113
|
|
|
1,903,196
|
|
|
(37,817
|
)
|
|
1,868,408
|
|
|
3,200
|
|
|
1,871,608
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|
2012
|
||||
Operating Activities:
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
379,460
|
|
|
350,011
|
|
|
332,969
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
|
||||
Provision for losses (recoveries) on accounts receivable
|
|
763
|
|
|
2,116
|
|
|
(90
|
)
|
|
Deferred income tax (benefit) expense
|
|
(6,576
|
)
|
|
(20,975
|
)
|
|
11,639
|
|
|
Excess tax benefits from stock plans
|
|
(1,115
|
)
|
|
(2,339
|
)
|
|
(5,401
|
)
|
|
Stock compensation expense
|
|
42,533
|
|
|
43,813
|
|
|
44,058
|
|
|
Depreciation and amortization
|
|
49,292
|
|
|
48,071
|
|
|
39,940
|
|
|
Other
|
|
340
|
|
|
844
|
|
|
4,864
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||
Increase in accounts receivable
|
|
(206,887
|
)
|
|
(64,575
|
)
|
|
(89,856
|
)
|
|
Increase in accounts payable and accrued expenses
|
|
153,424
|
|
|
44,150
|
|
|
30,625
|
|
|
(Decrease) increase in income taxes payable, net
|
|
(12,998
|
)
|
|
8,435
|
|
|
1,441
|
|
|
Increase in other current assets
|
|
(3,270
|
)
|
|
(2,015
|
)
|
|
(63
|
)
|
|
Net cash from operating activities
|
|
394,966
|
|
|
407,536
|
|
|
370,126
|
|
|
Investing Activities:
|
|
|
|
|
|
|
||||
Purchase of short-term investments
|
|
(136,726
|
)
|
|
(116,116
|
)
|
|
(15,879
|
)
|
|
Proceeds from maturities of short-term investments
|
|
122,726
|
|
|
89,915
|
|
|
16,221
|
|
|
Purchase of property and equipment
|
|
(37,472
|
)
|
|
(53,411
|
)
|
|
(47,626
|
)
|
|
Escrow deposit for land acquisition
|
|
(27,101
|
)
|
|
—
|
|
|
—
|
|
|
Other, net
|
|
(338
|
)
|
|
2,806
|
|
|
290
|
|
|
Net cash from investing activities
|
|
(78,911
|
)
|
|
(76,806
|
)
|
|
(46,994
|
)
|
|
Financing Activities:
|
|
|
|
|
|
|
||||
Proceeds from issuance of common stock
|
|
69,269
|
|
|
59,752
|
|
|
52,511
|
|
|
Repurchases of common stock
|
|
(550,781
|
)
|
|
(261,936
|
)
|
|
(302,414
|
)
|
|
Excess tax benefits from stock plans
|
|
1,115
|
|
|
2,339
|
|
|
5,401
|
|
|
Dividends paid
|
|
(124,634
|
)
|
|
(123,292
|
)
|
|
(117,263
|
)
|
|
Purchase of noncontrolling interest
|
|
—
|
|
|
(7,730
|
)
|
|
—
|
|
|
Distributions to noncontrolling interest
|
|
(503
|
)
|
|
(1,161
|
)
|
|
(1,282
|
)
|
|
Net cash from financing activities
|
|
(605,534
|
)
|
|
(332,028
|
)
|
|
(363,047
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(31,066
|
)
|
|
(11,892
|
)
|
|
6,401
|
|
|
Decrease in cash and cash equivalents
|
|
(320,545
|
)
|
|
(13,190
|
)
|
|
(33,514
|
)
|
|
Cash and cash equivalents at beginning of year
|
|
1,247,652
|
|
|
1,260,842
|
|
|
1,294,356
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
927,107
|
|
|
1,247,652
|
|
|
1,260,842
|
|
Taxes Paid:
|
|
|
|
|
|
|
||||
Income taxes
|
|
$
|
254,439
|
|
|
235,368
|
|
|
207,174
|
|
NOTE 1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Land Improvements
|
50 years
|
Buildings
|
28 to 40 years
|
Furniture, fixtures, equipment and purchased software
|
3 to 5 years
|
NOTE 2.
|
PROPERTY AND EQUIPMENT
|
|
|
Years ended December 31,
|
|||||
|
|
2014
|
|
2013
|
|||
Land
|
|
$
|
166,252
|
|
|
171,072
|
|
Buildings and leasehold improvements
|
|
467,115
|
|
|
467,342
|
|
|
Furniture, fixtures, equipment and purchased software
|
|
271,897
|
|
|
268,588
|
|
|
Construction in progress
|
|
4,907
|
|
|
4,344
|
|
|
Property and equipment, at cost
|
|
910,171
|
|
|
911,346
|
|
|
Less accumulated depreciation and amortization
|
|
371,756
|
|
|
348,282
|
|
|
Property and equipment, net
|
|
$
|
538,415
|
|
|
563,064
|
|
NOTE 3.
|
SHAREHOLDERS’ EQUITY
|
|
|
Cumulative shares
repurchased
|
|
Average price
per share
|
|||
Non-Discretionary Plan (1994 through 2014)
|
|
27,433,977
|
|
|
$
|
25.50
|
|
Discretionary Plan (2001 through 2014)
|
|
44,129,166
|
|
|
$
|
38.12
|
|
|
|
Number of
shares
|
|
Weighted
average
exercise price
per share
|
|
Weighted
average
remaining
contractual life
|
|
Aggregate
intrinsic value
(in thousands)
|
|||||
Outstanding at December 31, 2013
|
|
18,524,303
|
|
|
$
|
41.02
|
|
|
|
|
|
||
Options granted
|
|
3,008,200
|
|
|
$
|
42.47
|
|
|
|
|
|
||
Options exercised
|
|
(1,462,188
|
)
|
|
$
|
31.10
|
|
|
|
|
|
||
Options forfeited
|
|
(474,851
|
)
|
|
$
|
41.67
|
|
|
|
|
|
||
Options canceled
|
|
(221,863
|
)
|
|
$
|
45.35
|
|
|
|
|
|
||
Outstanding at December 31, 2014
|
|
19,373,601
|
|
|
$
|
41.92
|
|
|
5.77
|
|
$
|
77,856
|
|
Exercisable at December 31, 2014
|
|
9,521,129
|
|
|
$
|
42.48
|
|
|
3.46
|
|
$
|
35,127
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Dividend yield
|
|
1.50 - 1.51%
|
|
|
1.50 - 1.53%
|
|
|
1.30 - 1.35%
|
|
|||
Volatility – stock option plans
|
|
35 - 36%
|
|
|
38%
|
|
|
38 - 39%
|
|
|||
Volatility – stock purchase rights plans
|
|
20
|
%
|
|
21
|
%
|
|
34
|
%
|
|||
Risk-free interest rates
|
|
0.11 - 2.27%
|
|
|
0.12 - 1.40%
|
|
|
0.19 - 1.43%
|
|
|||
Expected life (years) – stock option plans
|
|
6.52 - 7.43
|
|
|
5.91 - 7.43
|
|
|
5.79 - 7.26
|
|
|||
Expected life (years) – stock purchase rights plans
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Weighted average fair value of stock options granted during the period
|
|
$
|
14.44
|
|
|
$
|
11.17
|
|
|
$
|
13.53
|
|
Weighted average fair value of stock purchase rights granted during the period
|
|
$
|
9.60
|
|
|
$
|
9.43
|
|
|
$
|
9.70
|
|
|
|
For the years ended December 31,
|
||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||
Stock compensation expense
|
|
$
|
42,533
|
|
|
43,813
|
|
|
44,058
|
|
Recognized tax benefit
|
|
$
|
4,356
|
|
|
3,473
|
|
|
2,016
|
|
NOTE 4.
|
BASIC AND DILUTED EARNINGS PER SHARE
|
|
|
Net earnings
attributable to
shareholders
|
|
Weighted
average
shares
|
|
Earnings
per share
|
|||||
2014
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
376,888
|
|
|
196,146,676
|
|
|
$
|
1.92
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
621,391
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
376,888
|
|
|
196,768,067
|
|
|
$
|
1.92
|
|
2013
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
348,526
|
|
|
205,994,656
|
|
|
$
|
1.69
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
900,817
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
348,526
|
|
|
206,895,473
|
|
|
$
|
1.68
|
|
2012
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
333,360
|
|
|
210,422,945
|
|
|
$
|
1.58
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
1,512,226
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
333,360
|
|
|
211,935,171
|
|
|
$
|
1.57
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|
2012
|
|||
Shares
|
|
17,017,272
|
|
|
15,220,785
|
|
|
15,044,514
|
|
NOTE 5.
|
INCOME TAXES
|
|
|
Federal
|
|
State
|
|
Foreign
|
|
Total
|
|||||
2014
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
93,345
|
|
|
17,093
|
|
|
127,567
|
|
|
238,005
|
|
Deferred
|
|
(6,023
|
)
|
|
(553
|
)
|
|
—
|
|
|
(6,576
|
)
|
|
|
|
$
|
87,322
|
|
|
16,540
|
|
|
127,567
|
|
|
231,429
|
|
2013
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
104,224
|
|
|
17,715
|
|
|
121,621
|
|
|
243,560
|
|
Deferred
|
|
(19,811
|
)
|
|
(1,164
|
)
|
|
—
|
|
|
(20,975
|
)
|
|
|
|
$
|
84,413
|
|
|
16,551
|
|
|
121,621
|
|
|
222,585
|
|
2012
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
86,606
|
|
|
12,704
|
|
|
106,475
|
|
|
205,785
|
|
Deferred
|
|
11,864
|
|
|
(225
|
)
|
|
—
|
|
|
11,639
|
|
|
|
|
$
|
98,470
|
|
|
12,479
|
|
|
106,475
|
|
|
217,424
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||
Computed “expected” tax expense
|
|
$
|
213,811
|
|
|
200,408
|
|
|
192,638
|
|
Increase in income taxes resulting from:
|
|
|
|
|
|
|
||||
State income taxes, net of Federal income tax benefit
|
|
10,751
|
|
|
10,758
|
|
|
8,111
|
|
|
Nondeductible stock compensation expense, net
|
|
8,069
|
|
|
9,927
|
|
|
12,061
|
|
|
Other, net
|
|
(1,202
|
)
|
|
1,492
|
|
|
4,614
|
|
|
|
|
$
|
231,429
|
|
|
222,585
|
|
|
217,424
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||
United States
|
|
$
|
211,588
|
|
|
192,850
|
|
|
179,483
|
|
Foreign
|
|
399,301
|
|
|
379,746
|
|
|
370,910
|
|
|
|
|
$
|
610,889
|
|
|
572,596
|
|
|
550,393
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|||
Deferred Tax Assets:
|
|
|
|
|
|||
Accrued third party obligations, deductible for taxes upon economic performance
|
|
$
|
17,769
|
|
|
16,973
|
|
Provision for doubtful accounts receivable
|
|
957
|
|
|
756
|
|
|
Excess of financial statement over tax depreciation
|
|
10,905
|
|
|
9,852
|
|
|
Deductible stock compensation expense, net
|
|
15,122
|
|
|
11,621
|
|
|
Foreign currency translation adjustment
|
|
20,719
|
|
|
3,432
|
|
|
Retained liability for cargo claims
|
|
1,555
|
|
|
802
|
|
|
Total gross deferred tax assets
|
|
67,027
|
|
|
43,436
|
|
|
Deferred Tax Liabilities:
|
|
|
|
|
|||
Unremitted foreign earnings, net of related foreign tax credits
|
|
(82,262
|
)
|
|
(83,186
|
)
|
|
Other
|
|
—
|
|
|
(135
|
)
|
|
Total gross deferred tax liabilities
|
|
$
|
(82,262
|
)
|
|
(83,321
|
)
|
Net deferred tax liabilities
|
|
$
|
(15,235
|
)
|
|
(39,885
|
)
|
Current deferred tax assets
|
|
$
|
(20,279
|
)
|
|
(18,396
|
)
|
Noncurrent deferred tax liabilities
|
|
$
|
(35,514
|
)
|
|
(58,281
|
)
|
NOTE 6.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
|
December 31, 2014
|
|
December 31, 2013
|
|||||||||
|
|
Cost
|
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|||||
Cash and overnight deposits
|
|
$
|
531,312
|
|
|
531,312
|
|
|
590,317
|
|
|
590,317
|
|
Corporate commercial paper
|
|
356,468
|
|
|
356,536
|
|
|
629,923
|
|
|
629,990
|
|
|
Time deposits
|
|
39,327
|
|
|
39,327
|
|
|
27,412
|
|
|
27,412
|
|
|
Total cash and cash equivalents
|
|
927,107
|
|
|
927,175
|
|
|
1,247,652
|
|
|
1,247,719
|
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|||||
Corporate commercial paper
|
|
40,295
|
|
|
40,350
|
|
|
26,296
|
|
|
26,321
|
|
|
Time deposits
|
|
41
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
Total short-term investments
|
|
40,336
|
|
|
40,391
|
|
|
26,337
|
|
|
26,362
|
|
|
Total
|
|
$
|
967,443
|
|
|
967,566
|
|
|
1,273,989
|
|
|
1,274,081
|
|
NOTE 7.
|
CREDIT ARRANGEMENTS
|
NOTE 8.
|
COMMITMENTS
|
2015
|
$
|
40,693
|
|
2016
|
30,542
|
|
|
2017
|
19,838
|
|
|
2018
|
14,737
|
|
|
2019
|
8,457
|
|
|
Thereafter
|
9,061
|
|
|
|
$
|
123,328
|
|
NOTE 9.
|
CONTINGENCIES
|
NOTE 10.
|
BUSINESS SEGMENT INFORMATION
|
|
United States
|
|
Other
North
America
|
|||
2014
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,694,819
|
|
|
218,735
|
|
Transfers between geographic areas
|
97,028
|
|
|
10,891
|
|
|
Total revenues
|
$
|
1,791,847
|
|
|
229,626
|
|
Net revenues
1
|
$
|
823,111
|
|
|
108,631
|
|
Operating income
|
$
|
221,166
|
|
|
36,475
|
|
Identifiable assets at year end
|
$
|
1,408,598
|
|
|
111,324
|
|
Capital expenditures
|
$
|
19,610
|
|
|
1,439
|
|
Depreciation and amortization
|
$
|
31,553
|
|
|
1,170
|
|
Equity
|
$
|
1,165,488
|
|
|
54,338
|
|
2013
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,561,468
|
|
|
215,968
|
|
Transfers between geographic areas
|
89,570
|
|
|
11,038
|
|
|
Total revenues
|
$
|
1,651,038
|
|
|
227,006
|
|
Net revenues
1
|
$
|
770,519
|
|
|
102,864
|
|
Operating income
|
$
|
195,799
|
|
|
35,224
|
|
Identifiable assets at year end
|
$
|
1,582,557
|
|
|
104,735
|
|
Capital expenditures
|
$
|
28,699
|
|
|
1,870
|
|
Depreciation and amortization
|
$
|
29,569
|
|
|
882
|
|
Equity
|
$
|
1,330,262
|
|
|
72,772
|
|
2012
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,529,917
|
|
|
201,521
|
|
Transfers between geographic areas
|
94,521
|
|
|
10,476
|
|
|
Total revenues
|
$
|
1,624,438
|
|
|
211,997
|
|
Net revenues
1
|
$
|
748,320
|
|
|
95,798
|
|
Operating income
|
$
|
179,015
|
|
|
32,385
|
|
Identifiable assets at year end
|
$
|
1,459,425
|
|
|
92,075
|
|
Capital expenditures
|
$
|
28,088
|
|
|
832
|
|
Depreciation and amortization
|
$
|
23,678
|
|
|
756
|
|
Equity
|
$
|
1,197,239
|
|
|
58,071
|
|
|
|
Latin
America
|
|
Asia Pacific
|
|
Europe
|
|
Middle
East, Africa and
India
|
|
Eliminations
|
|
Consolidated
|
||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues from unaffiliated customers
|
|
89,058
|
|
|
3,233,539
|
|
|
1,012,389
|
|
|
316,181
|
|
|
—
|
|
|
6,564,721
|
|
Transfers between geographic areas
|
|
20,634
|
|
|
49,599
|
|
|
39,541
|
|
|
19,654
|
|
|
(237,347
|
)
|
|
—
|
|
Total revenues
|
|
109,692
|
|
|
3,283,138
|
|
|
1,051,930
|
|
|
335,835
|
|
|
(237,347
|
)
|
|
6,564,721
|
|
Net revenues
1
|
|
65,016
|
|
|
570,793
|
|
|
313,325
|
|
|
100,551
|
|
|
—
|
|
|
1,981,427
|
|
Operating income
|
|
19,855
|
|
|
230,092
|
|
|
62,101
|
|
|
24,959
|
|
|
—
|
|
|
594,648
|
|
Identifiable assets at year end
|
|
53,815
|
|
|
655,148
|
|
|
447,349
|
|
|
208,684
|
|
|
5,987
|
|
|
2,890,905
|
|
Capital expenditures
|
|
1,574
|
|
|
9,073
|
|
|
4,246
|
|
|
1,530
|
|
|
—
|
|
|
37,472
|
|
Depreciation and amortization
|
|
911
|
|
|
8,233
|
|
|
5,690
|
|
|
1,735
|
|
|
—
|
|
|
49,292
|
|
Equity
|
|
34,386
|
|
|
361,529
|
|
|
169,117
|
|
|
121,520
|
|
|
(34,770
|
)
|
|
1,871,608
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues from unaffiliated customers
|
|
86,050
|
|
|
3,046,039
|
|
|
876,967
|
|
|
293,765
|
|
|
—
|
|
|
6,080,257
|
|
Transfers between geographic areas
|
|
21,711
|
|
|
46,578
|
|
|
38,728
|
|
|
16,698
|
|
|
(224,323
|
)
|
|
—
|
|
Total revenues
|
|
107,761
|
|
|
3,092,617
|
|
|
915,695
|
|
|
310,463
|
|
|
(224,323
|
)
|
|
6,080,257
|
|
Net revenues
1
|
|
61,478
|
|
|
560,900
|
|
|
288,407
|
|
|
98,685
|
|
|
—
|
|
|
1,882,853
|
|
Operating income
|
|
15,734
|
|
|
223,980
|
|
|
53,294
|
|
|
28,042
|
|
|
—
|
|
|
552,073
|
|
Identifiable assets at year end
|
|
58,027
|
|
|
668,032
|
|
|
414,710
|
|
|
180,646
|
|
|
6,105
|
|
|
3,014,812
|
|
Capital expenditures
|
|
1,010
|
|
|
17,231
|
|
|
3,313
|
|
|
1,288
|
|
|
—
|
|
|
53,411
|
|
Depreciation and amortization
|
|
901
|
|
|
8,381
|
|
|
6,569
|
|
|
1,769
|
|
|
—
|
|
|
48,071
|
|
Equity
|
|
29,590
|
|
|
406,728
|
|
|
178,729
|
|
|
102,628
|
|
|
(34,378
|
)
|
|
2,086,331
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues from unaffiliated customers
|
|
82,337
|
|
|
3,059,070
|
|
|
833,688
|
|
|
285,682
|
|
|
—
|
|
|
5,992,215
|
|
Transfers between geographic areas
|
|
18,780
|
|
|
43,602
|
|
|
40,077
|
|
|
16,961
|
|
|
(224,417
|
)
|
|
—
|
|
Total revenues
|
|
101,117
|
|
|
3,102,672
|
|
|
873,765
|
|
|
302,643
|
|
|
(224,417
|
)
|
|
5,992,215
|
|
Net revenues
1
|
|
57,795
|
|
|
548,858
|
|
|
285,175
|
|
|
99,424
|
|
|
—
|
|
|
1,835,370
|
|
Operating income
|
|
17,356
|
|
|
215,351
|
|
|
58,790
|
|
|
27,901
|
|
|
—
|
|
|
530,798
|
|
Identifiable assets at year end
|
|
48,995
|
|
|
774,569
|
|
|
392,180
|
|
|
186,077
|
|
|
804
|
|
|
2,954,125
|
|
Capital expenditures
|
|
1,301
|
|
|
11,199
|
|
|
4,490
|
|
|
1,716
|
|
|
—
|
|
|
47,626
|
|
Depreciation and amortization
|
|
873
|
|
|
6,782
|
|
|
5,962
|
|
|
1,889
|
|
|
—
|
|
|
39,940
|
|
Equity
|
|
29,504
|
|
|
536,384
|
|
|
150,264
|
|
|
94,764
|
|
|
(33,656
|
)
|
|
2,032,570
|
|
Years ended December 31,
|
|
2014
|
|
2013
|
|
2012
|
||||
Revenues:
|
|
|
|
|
|
|
||||
Total revenues
|
|
$
|
6,564,721
|
|
|
6,080,257
|
|
|
5,992,215
|
|
Expenses:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
2,103,777
|
|
|
1,994,374
|
|
|
1,983,696
|
|
|
Ocean freight and ocean services
|
|
1,712,795
|
|
|
1,521,340
|
|
|
1,542,170
|
|
|
Customs brokerage and other services
|
|
766,722
|
|
|
681,690
|
|
|
630,979
|
|
|
Net revenues
|
|
$
|
1,981,427
|
|
|
1,882,853
|
|
|
1,835,370
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Total revenues
|
|
33
|
%
|
|
33
|
%
|
|
34
|
%
|
Net revenues
|
|
16
|
%
|
|
16
|
%
|
|
16
|
%
|
Identifiable assets at year end
|
|
14
|
%
|
|
14
|
%
|
|
17
|
%
|
Equity
|
|
10
|
%
|
|
11
|
%
|
|
16
|
%
|
NOTE 11.
|
QUARTERLY RESULTS (UNAUDITED)
|
|
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
|||||
2014
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,491,645
|
|
|
1,599,141
|
|
|
1,705,105
|
|
|
1,768,830
|
|
Net revenues
|
|
464,586
|
|
|
484,714
|
|
|
513,256
|
|
|
518,871
|
|
|
Net earnings
|
|
84,195
|
|
|
91,728
|
|
|
102,797
|
|
|
100,740
|
|
|
Net earnings attributable to shareholders
|
|
83,824
|
|
|
91,302
|
|
|
102,381
|
|
|
99,381
|
|
|
Diluted earnings attributable to shareholders per share
|
|
0.42
|
|
|
0.46
|
|
|
0.53
|
|
|
0.51
|
|
|
Basic earnings attributable to shareholders per share
|
|
0.42
|
|
|
0.46
|
|
|
0.53
|
|
|
0.52
|
|
|
2013
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,413,208
|
|
|
1,503,224
|
|
|
1,537,966
|
|
|
1,625,859
|
|
Net revenues
|
|
448,007
|
|
|
471,872
|
|
|
484,902
|
|
|
478,072
|
|
|
Net earnings
|
|
80,610
|
|
|
92,663
|
|
|
92,729
|
|
|
84,009
|
|
|
Net earnings attributable to shareholders
|
|
80,315
|
|
|
92,315
|
|
|
92,400
|
|
|
83,496
|
|
|
Diluted earnings attributable to shareholders per share
|
|
0.39
|
|
|
0.45
|
|
|
0.45
|
|
|
0.41
|
|
|
Basic earnings attributable to shareholders per share
|
|
0.39
|
|
|
0.45
|
|
|
0.45
|
|
|
0.41
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.23
|
|
Form of Employment Agreement executed by Jeffrey S. Musser, the Company’s President and Chief Executive Officer, dated December 31, 2008.
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32
|
|
Certification pursuant to 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 Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Subsidiary (1)(2)(3)
|
|
State or Country of Organization
|
Beijing Kang Jie Kong International Cargo Agent Co., Ltd.
|
|
People's Republic of China
|
CV Miami, LLC
|
|
Delaware
|
ECI Taiwan Co., Ltd.
|
|
Taiwan
|
EI Freight (U.S.A.), Inc.
|
|
Illinois
|
EIF SDN. BHD.
|
|
Malaysia
|
Expeditors (Bangladesh), Ltd.
|
|
Bangladesh
|
Expeditors (China) Co., Ltd.
|
|
People's Republic of China
|
Expeditors (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Expeditors (Portugal) Transitarios Internacionais, Lda.
|
|
Portugal
|
Expeditors (Thailand) Ltd. (4)
|
|
Thailand
|
Expeditors Aduanas Peru S.A.C.
|
|
Peru
|
Expeditors Argentina S.A.
|
|
Argentina
|
Expeditors Assurance of Vermont, Inc.
|
|
Vermont
|
Expeditors Cambodia Ltd.
|
|
Cambodia
|
Expeditors Canada, Inc.
|
|
Canada
|
Expeditors Cargo Insurance Brokers Agente de Seguros, S.A. de C.V.
|
|
Mexico
|
Expeditors Cargo Insurance Brokers, Inc.
|
|
Washington
|
Expeditors Chile Transportes Internacionales Limitada
|
|
Chile
|
Expeditors de Colombia Ltda.
|
|
Colombia
|
Expeditors Denmark ApS
|
|
Denmark
|
Expeditors Dominicana SAS
|
|
Dominican Republic
|
Expeditors Egypt S.A.E.
|
|
Egypt
|
Expeditors Finland Oy
|
|
Finland
|
Expeditors Guatemala S.A.
|
|
Guatemala
|
Expeditors Hong Kong Limited
|
|
Hong Kong
|
Expeditors Insurance Brokers (U.A.E.) LLC
|
|
United Arab Emirates
|
Expeditors International - Lebanon (s.a.l.) (5)
|
|
Lebanon
|
Expeditors International (India) Pvt. Ltd.
|
|
India
|
Expeditors International (NZ) Ltd.
|
|
New Zealand
|
Expeditors International (Puerto Rico) Inc.
|
|
Puerto Rico
|
Expeditors International (UK) Ltd.
|
|
United Kingdom
|
Expeditors International B.V.
|
|
Netherlands
|
Expeditors International Bahrain (SPC)
|
|
Bahrain
|
Expeditors International Cargo Co. Ltd.
|
|
Saudi Arabia
|
Expeditors International CR s.r.o.
|
|
Czech Republic
|
Expeditors International de Mexico, S.A. de C.V.
|
|
Mexico
|
Expeditors International de Uruguay S.A.
|
|
Uruguay
|
Expeditors International do Brasil Ltda.
|
|
Brazil
|
Expeditors International E.I. (Switzerland) Sagl
|
|
Switzerland
|
Expeditors International España, S.A.
|
|
Spain
|
Expeditors International Forwarding and Clearing (Abu Dhabi) LLC
|
|
United Arab Emirates
|
Expeditors International Forwarding and Clearing, LLC
|
|
United Arab Emirates
|
Expeditors International France S.A.S.
|
|
France
|
Expeditors International GmbH
|
|
Germany
|
Expeditors International Hellas A.E.
|
|
Greece
|
Expeditors International Hungary Kft
|
|
Hungary
|
Expeditors International Italia srl
|
|
Italy
|
Expeditors International-Jordan
|
|
Jordan
|
Expeditors International Kuwait W.L.L. (6)
|
|
Kuwait
|
Expeditors International Norway AS
|
|
Norway
|
Expeditors International NV
|
|
Belgium
|
Expeditors International Ocean, Inc.
|
|
Delaware
|
Expeditors International Pakistan (Private) Limited (7)
|
|
Pakistan
|
Expeditors International Pty. Limited
|
|
Australia
|
Expeditors International Romania S.R.L.
|
|
Romania
|
Expeditors International SA (Proprietary) Limited
|
|
South Africa
|
Expeditors International Sverige AB
|
|
Sweden
|
Expeditors International Tasimacilik ve Ticaret As (5)
|
|
Turkey
|
Expeditors International Trading (Shanghai) Co., Ltd.
|
|
People's Republic of China
|
Expeditors Ireland Limited
|
|
Ireland
|
Expeditors Japan KK
|
|
Japan
|
Expeditors Korea Ltd.
|
|
South Korea
|
Expeditors LLC
|
|
Oman
|
Expeditors Mar y Tierra S.A.
|
|
Costa Rica
|
Expeditors Panama Logistics Services, Inc.
|
|
Panama
|
Expeditors Peru SAC
|
|
Peru
|
Expeditors Philippines, Inc.
|
|
Philippines
|
Expeditors Polska Sp. z o. o.
|
|
Poland
|
Expeditors Qatar LLC
|
|
Qatar
|
Expeditors Singapore Pte Ltd
|
|
Singapore
|
Expeditors Speditionsges.m.b.H.
|
|
Austria
|
Expeditors TradeWin, LLC
|
|
Washington
|
P.T. Expeditors Indonesia (8)
|
|
Indonesia
|
(1)
|
For purposes of this list, if the Company owns directly or indirectly a controlling interest in the voting securities of any entity or if the Company has unilateral control over the assets and operations of any entity, such entity is deemed to be a subsidiary. Except as otherwise noted, the Company has 100% controlling interest in subsidiary operations. With respect to certain companies, shares of voting securities in the names of nominees and qualifying shares in the names of directors are included in Company's ownership percentage.
|
(2)
|
Except as otherwise noted, each subsidiary does business in its own name and in the name of the Company.
|
(3)
|
The names of other subsidiaries have been omitted from the above list since, considered in the aggregate, they would not constitute a significant subsidiary.
|
(4)
|
Company has 99.5% controlling interest in subsidiary.
|
(5)
|
Company has 75% controlling interest in subsidiary.
|
(6)
|
Company has 61% controlling interest in subsidiary.
|
(7)
|
Company has 80% controlling interest in subsidiary.
|
(8)
|
Company has a 95% controlling interest in subsidiary.
|
/s/ KPMG LLP
|
Seattle, Washington
|
February 26, 2015
|
1.
|
I have reviewed this annual report on Form 10-K of Expeditors International of Washington, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
d)
|
Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ JEFFREY S. MUSSER
|
Jeffrey S. Musser
President, Chief Executive Officer and Director
|
1.
|
I have reviewed this annual report on Form 10-K of Expeditors International of Washington, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
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d)
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Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ BRADLEY S. POWELL
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Bradley S. Powell
Senior Vice President and Chief Financial Officer
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February 26, 2015
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/s/ Jeffrey S. Musser
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Jeffrey S. Musser
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President, Chief Executive Officer and Director
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February 26, 2015
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/s/ Bradley S. Powell
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Bradley S. Powell
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Senior Vice President and Chief Financial Officer
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