|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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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
|
|
91-1069248
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(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification Number)
|
|
|
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1015 Third Avenue, 12
th
Floor, Seattle, Washington
|
|
98104
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(Address of principal executive offices)
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|
(Zip Code)
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Large accelerated filer
|
x
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|
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Accelerated filer
|
o
|
|
|
|
|
|
|
Non-accelerated filer
|
o
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(Do not check if a smaller reporting company)
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|
Smaller reporting company
|
o
|
|
|
June 30,
2015 |
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December 31, 2014
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
985,727
|
|
|
$
|
927,107
|
|
Short-term investments
|
47,047
|
|
|
40,336
|
|
||
Accounts receivable, less allowance for doubtful accounts of $7,369 at June 30, 2015 and $7,119 at December 31, 2014
|
1,194,180
|
|
|
1,236,042
|
|
||
Deferred Federal and state income taxes
|
20,930
|
|
|
20,279
|
|
||
Other
|
86,871
|
|
|
65,486
|
|
||
Total current assets
|
2,334,755
|
|
|
2,289,250
|
|
||
Property and equipment, less accumulated depreciation and amortization of $381,393 at June 30, 2015 and $371,756 at December 31, 2014
|
536,121
|
|
|
538,415
|
|
||
Goodwill
|
7,927
|
|
|
7,927
|
|
||
Other assets, net
|
53,572
|
|
|
55,313
|
|
||
Total assets
|
$
|
2,932,375
|
|
|
$
|
2,890,905
|
|
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
738,323
|
|
|
770,238
|
|
||
Accrued expenses, primarily salaries and related costs
|
228,537
|
|
|
192,468
|
|
||
Federal, state and foreign income taxes
|
26,821
|
|
|
21,077
|
|
||
Total current liabilities
|
993,681
|
|
|
983,783
|
|
||
Deferred Federal and state income taxes
|
48,961
|
|
|
35,514
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
||||
Preferred stock, none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share. Issued and outstanding 189,117,916 shares at June 30, 2015 and 191,655,690 shares at December 31, 2014
|
1,891
|
|
|
1,916
|
|
||
Additional paid-in capital
|
2,349
|
|
|
1,113
|
|
||
Retained earnings
|
1,935,159
|
|
|
1,903,196
|
|
||
Accumulated other comprehensive loss
|
(52,778
|
)
|
|
(37,817
|
)
|
||
Total shareholders’ equity
|
1,886,621
|
|
|
1,868,408
|
|
||
Noncontrolling interest
|
3,112
|
|
|
3,200
|
|
||
Total equity
|
1,889,733
|
|
|
1,871,608
|
|
||
Total liabilities and equity
|
$
|
2,932,375
|
|
|
$
|
2,890,905
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Airfreight services
|
$
|
693,812
|
|
|
$
|
667,257
|
|
|
$
|
1,401,256
|
|
|
$
|
1,314,395
|
|
Ocean freight and ocean services
|
576,772
|
|
|
536,438
|
|
|
1,142,489
|
|
|
1,005,662
|
|
||||
Customs brokerage and other services
|
420,969
|
|
|
395,446
|
|
|
825,334
|
|
|
770,729
|
|
||||
Total revenues
|
1,691,553
|
|
|
1,599,141
|
|
|
3,369,079
|
|
|
3,090,786
|
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Airfreight services
|
506,988
|
|
|
503,213
|
|
|
1,019,989
|
|
|
986,095
|
|
||||
Ocean freight and ocean services
|
433,356
|
|
|
423,716
|
|
|
878,812
|
|
|
791,091
|
|
||||
Customs brokerage and other services
|
199,068
|
|
|
187,498
|
|
|
388,651
|
|
|
364,300
|
|
||||
Salaries and related costs
|
287,065
|
|
|
260,767
|
|
|
565,943
|
|
|
516,709
|
|
||||
Rent and occupancy costs
|
24,971
|
|
|
25,401
|
|
|
50,359
|
|
|
50,563
|
|
||||
Depreciation and amortization
|
11,420
|
|
|
12,417
|
|
|
22,949
|
|
|
24,799
|
|
||||
Selling and promotion
|
10,529
|
|
|
9,291
|
|
|
19,776
|
|
|
17,464
|
|
||||
Other
|
35,440
|
|
|
34,395
|
|
|
71,001
|
|
|
62,119
|
|
||||
Total operating expenses
|
1,508,837
|
|
|
1,456,698
|
|
|
3,017,480
|
|
|
2,813,140
|
|
||||
Operating income
|
182,716
|
|
|
142,443
|
|
|
351,599
|
|
|
277,646
|
|
||||
Other Income (Expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
2,636
|
|
|
2,764
|
|
|
5,368
|
|
|
5,461
|
|
||||
Other, net
|
3,804
|
|
|
3,190
|
|
|
3,838
|
|
|
2,909
|
|
||||
Other income, net
|
6,440
|
|
|
5,954
|
|
|
9,206
|
|
|
8,370
|
|
||||
Earnings before income taxes
|
189,156
|
|
|
148,397
|
|
|
360,805
|
|
|
286,016
|
|
||||
Income tax expense
|
70,827
|
|
|
56,669
|
|
|
135,144
|
|
|
110,093
|
|
||||
Net earnings
|
118,329
|
|
|
91,728
|
|
|
225,661
|
|
|
175,923
|
|
||||
Less net earnings attributable to the noncontrolling interest
|
569
|
|
|
426
|
|
|
1,197
|
|
|
797
|
|
||||
Net earnings attributable to shareholders
|
$
|
117,760
|
|
|
$
|
91,302
|
|
|
$
|
224,464
|
|
|
$
|
175,126
|
|
Diluted earnings attributable to shareholders per share
|
$
|
0.61
|
|
|
$
|
0.46
|
|
|
$
|
1.17
|
|
|
$
|
0.88
|
|
Basic earnings attributable to shareholders per share
|
$
|
0.62
|
|
|
$
|
0.46
|
|
|
$
|
1.17
|
|
|
$
|
0.88
|
|
Dividends declared and paid per common share
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
Weighted average diluted shares outstanding
|
191,917,973
|
|
|
197,126,243
|
|
|
192,425,521
|
|
|
199,482,932
|
|
||||
Weighted average basic shares outstanding
|
190,679,008
|
|
|
196,451,912
|
|
|
191,150,758
|
|
|
198,772,260
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net earnings
|
$
|
118,329
|
|
|
$
|
91,728
|
|
|
$
|
225,661
|
|
|
$
|
175,923
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments, net of tax of $2,363 and $2,723 for the three months ended June 30, 2015 and 2014 and $8,197 and $1,394 for the six months ended June 30, 2015 and 2014
|
4,216
|
|
|
4,985
|
|
|
(15,389
|
)
|
|
2,608
|
|
||||
Reclassification adjustment for foreign currency realized losses, net of tax of $61 for the three and six months ended June 30, 2014
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
||||
Other comprehensive income (loss)
|
4,216
|
|
|
5,096
|
|
|
(15,389
|
)
|
|
2,719
|
|
||||
Comprehensive income
|
122,545
|
|
|
96,824
|
|
|
210,272
|
|
|
178,642
|
|
||||
Less comprehensive income attributable to the noncontrolling interest
|
472
|
|
|
440
|
|
|
769
|
|
|
860
|
|
||||
Comprehensive income attributable to shareholders
|
$
|
122,073
|
|
|
$
|
96,384
|
|
|
$
|
209,503
|
|
|
$
|
177,782
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
118,329
|
|
|
$
|
91,728
|
|
|
$
|
225,661
|
|
|
$
|
175,923
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
|
|
||||||||
Provision for losses (recoveries) on accounts receivable
|
584
|
|
|
496
|
|
|
861
|
|
|
(619
|
)
|
||||
Deferred income tax expense
|
8,986
|
|
|
2,891
|
|
|
20,923
|
|
|
10,085
|
|
||||
Excess tax benefits from stock plans
|
(366
|
)
|
|
(495
|
)
|
|
(1,846
|
)
|
|
(984
|
)
|
||||
Stock compensation expense
|
11,663
|
|
|
11,877
|
|
|
21,570
|
|
|
22,171
|
|
||||
Depreciation and amortization
|
11,420
|
|
|
12,417
|
|
|
22,949
|
|
|
24,799
|
|
||||
Other
|
27
|
|
|
68
|
|
|
113
|
|
|
206
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Decrease (increase) in accounts receivable
|
63,234
|
|
|
(84,618
|
)
|
|
16,444
|
|
|
(72,390
|
)
|
||||
Increase in accounts payable and accrued expenses
|
8,038
|
|
|
61,377
|
|
|
22,933
|
|
|
90,923
|
|
||||
Decrease in income taxes payable, net
|
(39,000
|
)
|
|
(47,370
|
)
|
|
(15,868
|
)
|
|
(29,165
|
)
|
||||
(Increase) decrease in other current assets
|
(1,187
|
)
|
|
(3,485
|
)
|
|
2,382
|
|
|
(2,206
|
)
|
||||
Net cash from operating activities
|
181,728
|
|
|
44,886
|
|
|
316,122
|
|
|
218,743
|
|
||||
Investing Activities:
|
|
|
|
|
|
|
|
||||||||
Purchase of short-term investments
|
(46,986
|
)
|
|
(15,301
|
)
|
|
(47,008
|
)
|
|
(96,431
|
)
|
||||
Proceeds from maturities of short-term investments
|
—
|
|
|
15,643
|
|
|
40,296
|
|
|
36,619
|
|
||||
Purchase of property and equipment
|
(12,912
|
)
|
|
(9,635
|
)
|
|
(22,357
|
)
|
|
(18,395
|
)
|
||||
Escrow deposit for land acquisition
|
—
|
|
|
(27,101
|
)
|
|
—
|
|
|
(27,101
|
)
|
||||
Other, net
|
(14
|
)
|
|
(1,536
|
)
|
|
184
|
|
|
134
|
|
||||
Net cash from investing activities
|
(59,912
|
)
|
|
(37,930
|
)
|
|
(28,885
|
)
|
|
(105,174
|
)
|
||||
Financing Activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of common stock
|
25,047
|
|
|
22,125
|
|
|
60,095
|
|
|
30,017
|
|
||||
Repurchases of common stock
|
(128,137
|
)
|
|
(131,391
|
)
|
|
(205,505
|
)
|
|
(358,116
|
)
|
||||
Excess tax benefits from stock plans
|
366
|
|
|
495
|
|
|
1,846
|
|
|
984
|
|
||||
Dividends paid
|
(68,781
|
)
|
|
(62,807
|
)
|
|
(68,781
|
)
|
|
(62,807
|
)
|
||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
(857
|
)
|
|
(85
|
)
|
||||
Net cash from financing activities
|
(171,505
|
)
|
|
(171,578
|
)
|
|
(213,202
|
)
|
|
(390,007
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
2,272
|
|
|
4,137
|
|
|
(15,415
|
)
|
|
(653
|
)
|
||||
(Decrease) increase in cash and cash equivalents
|
(47,417
|
)
|
|
(160,485
|
)
|
|
58,620
|
|
|
(277,091
|
)
|
||||
Cash and cash equivalents at beginning of period
|
1,033,144
|
|
|
1,131,046
|
|
|
927,107
|
|
|
1,247,652
|
|
||||
Cash and cash equivalents at end of period
|
$
|
985,727
|
|
|
$
|
970,561
|
|
|
$
|
985,727
|
|
|
$
|
970,561
|
|
Taxes Paid:
|
|
|
|
|
|
|
|
||||||||
Income taxes
|
$
|
101,389
|
|
|
$
|
105,963
|
|
|
$
|
129,650
|
|
|
$
|
133,459
|
|
Note 1.
|
Summary of Significant Accounting Policies
|
A.
|
Basis of Presentation
|
B.
|
Accounts Receivable
|
C.
|
Use of Estimates
|
|
|
|
|
||||
|
Six months ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Dividend yield
|
1.60
|
%
|
|
1.50
|
%
|
||
Volatility - stock option plans
|
31
|
%
|
|
36
|
%
|
||
Risk free interest rates
|
1.79
|
%
|
|
2.27
|
%
|
||
Expected life (years) - stock option plans
|
6.41 - 7.47
|
|
|
6.52 - 7.43
|
|
||
Weighted average fair value of stock options granted during the period
|
$
|
13.42
|
|
|
$
|
14.08
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Stock compensation expense
|
$
|
11,663
|
|
|
$
|
11,877
|
|
|
$
|
21,570
|
|
|
$
|
22,171
|
|
Recognized tax benefit
|
$
|
1,491
|
|
|
$
|
1,183
|
|
|
$
|
2,734
|
|
|
$
|
2,126
|
|
|
Three months ended
|
|||||||||
|
June 30,
|
|||||||||
(Amounts in thousands, except share and per share amounts)
|
Net earnings
attributable to
shareholders
|
|
Weighted average
shares
|
|
Earnings per share
|
|||||
2015
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
$
|
117,760
|
|
|
190,679,008
|
|
|
$
|
0.62
|
|
Effect of dilutive potential common shares
|
—
|
|
|
1,238,965
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
$
|
117,760
|
|
|
191,917,973
|
|
|
$
|
0.61
|
|
2014
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
$
|
91,302
|
|
|
196,451,912
|
|
|
$
|
0.46
|
|
Effect of dilutive potential common shares
|
—
|
|
|
674,331
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
$
|
91,302
|
|
|
197,126,243
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|||||
|
Six months ended
|
|||||||||
|
June 30,
|
|||||||||
(Amounts in thousands, except share and per share amounts)
|
Net earnings
attributable to
shareholders
|
|
Weighted average
shares
|
|
Earnings per share
|
|||||
2015
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
$
|
224,464
|
|
|
191,150,758
|
|
|
$
|
1.17
|
|
Effect of dilutive potential common shares
|
—
|
|
|
1,274,763
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
$
|
224,464
|
|
|
192,425,521
|
|
|
$
|
1.17
|
|
2014
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
$
|
175,126
|
|
|
198,772,260
|
|
|
$
|
0.88
|
|
Effect of dilutive potential common shares
|
—
|
|
|
710,672
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
$
|
175,126
|
|
|
199,482,932
|
|
|
$
|
0.88
|
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 30,
|
|
June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Shares
|
8,406,717
|
|
|
15,633,365
|
|
|
10,519,482
|
|
|
16,778,917
|
|
|
Shareholders’
equity
|
|
Noncontrolling
interest
|
|
Total
equity
|
||||
Balance at December 31, 2014
|
$
|
1,868,408
|
|
|
3,200
|
|
|
1,871,608
|
|
Exercise of stock options
|
60,095
|
|
|
—
|
|
|
60,095
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(205,505
|
)
|
|
—
|
|
|
(205,505
|
)
|
|
Stock compensation expense
|
21,570
|
|
|
—
|
|
|
21,570
|
|
|
Tax benefits from stock plans, net
|
1,331
|
|
|
—
|
|
|
1,331
|
|
|
Net earnings
|
224,464
|
|
|
1,197
|
|
|
225,661
|
|
|
Other comprehensive loss
|
(14,961
|
)
|
|
(428
|
)
|
|
(15,389
|
)
|
|
Dividends paid ($0.36 per share)
|
(68,781
|
)
|
|
—
|
|
|
(68,781
|
)
|
|
Distributions to noncontrolling interest
|
—
|
|
|
(857
|
)
|
|
(857
|
)
|
|
Balance at June 30, 2015
|
$
|
1,886,621
|
|
|
3,112
|
|
|
1,889,733
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2013
|
$
|
2,084,783
|
|
|
1,548
|
|
|
2,086,331
|
|
Exercise of stock options
|
30,017
|
|
|
—
|
|
|
30,017
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(358,116
|
)
|
|
—
|
|
|
(358,116
|
)
|
|
Stock compensation expense
|
22,171
|
|
|
—
|
|
|
22,171
|
|
|
Tax benefits from stock plans, net
|
984
|
|
|
—
|
|
|
984
|
|
|
Net earnings
|
175,126
|
|
|
797
|
|
|
175,923
|
|
|
Other comprehensive income
|
2,656
|
|
|
63
|
|
|
2,719
|
|
|
Dividends paid ($0.32 per share)
|
(62,807
|
)
|
|
—
|
|
|
(62,807
|
)
|
|
Distributions to noncontrolling interest
|
—
|
|
|
(85
|
)
|
|
(85
|
)
|
|
Balance at June 30, 2014
|
$
|
1,894,814
|
|
|
2,323
|
|
|
1,897,137
|
|
|
June 30, 2015
|
|
December 31, 2014
|
|||||||||
|
Cost
|
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|||||
Cash and Cash Equivalents:
|
|
|
|
|
|
|
|
|||||
Cash and overnight deposits
|
$
|
584,452
|
|
|
584,452
|
|
|
531,312
|
|
|
531,312
|
|
Corporate commercial paper
|
348,653
|
|
|
348,690
|
|
|
356,468
|
|
|
356,536
|
|
|
Time deposits
|
52,622
|
|
|
52,622
|
|
|
39,327
|
|
|
39,327
|
|
|
Total cash and cash equivalents
|
985,727
|
|
|
985,764
|
|
|
927,107
|
|
|
927,175
|
|
|
Short-Term Investments:
|
|
|
|
|
|
|
|
|||||
Corporate commercial paper
|
47,006
|
|
|
47,025
|
|
|
40,295
|
|
|
40,350
|
|
|
Time deposits
|
41
|
|
|
41
|
|
|
41
|
|
|
41
|
|
|
Total short-term investments
|
47,047
|
|
|
47,066
|
|
|
40,336
|
|
|
40,391
|
|
|
Total
|
$
|
1,032,774
|
|
|
1,032,830
|
|
|
967,443
|
|
|
967,566
|
|
(in thousands)
|
UNITED
STATES
|
|
OTHER
NORTH
AMERICA
|
|
LATIN
AMERICA
|
|
NORTH ASIA
|
|
SOUTH ASIA
|
|
EUROPE
|
|
MIDDLE EAST, AFRICA AND INDIA
|
|
ELIMI-
NATIONS
|
|
CONSOLI-
DATED
|
||||||||||
Three months ended June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from unaffiliated customers
|
$
|
449,622
|
|
|
58,739
|
|
|
24,314
|
|
|
649,901
|
|
|
184,862
|
|
|
239,953
|
|
|
84,162
|
|
|
—
|
|
|
1,691,553
|
|
Transfers between geographic areas
|
32,486
|
|
|
3,685
|
|
|
5,403
|
|
|
5,427
|
|
|
6,473
|
|
|
10,716
|
|
|
5,112
|
|
|
(69,302
|
)
|
|
—
|
|
|
Total revenues
|
$
|
482,108
|
|
|
62,424
|
|
|
29,717
|
|
|
655,328
|
|
|
191,335
|
|
|
250,669
|
|
|
89,274
|
|
|
(69,302
|
)
|
|
1,691,553
|
|
Net revenues
1
|
$
|
229,353
|
|
|
30,576
|
|
|
17,485
|
|
|
124,491
|
|
|
46,944
|
|
|
76,607
|
|
|
26,685
|
|
|
—
|
|
|
552,141
|
|
Operating income
|
$
|
68,547
|
|
|
10,437
|
|
|
5,441
|
|
|
60,597
|
|
|
16,140
|
|
|
15,587
|
|
|
5,967
|
|
|
—
|
|
|
182,716
|
|
Identifiable assets at period end
|
$
|
1,381,755
|
|
|
103,613
|
|
|
57,711
|
|
|
572,425
|
|
|
141,344
|
|
|
448,475
|
|
|
219,280
|
|
|
7,772
|
|
|
2,932,375
|
|
Capital expenditures
|
$
|
7,711
|
|
|
1,656
|
|
|
569
|
|
|
475
|
|
|
989
|
|
|
921
|
|
|
591
|
|
|
—
|
|
|
12,912
|
|
Depreciation and amortization
|
$
|
7,339
|
|
|
310
|
|
|
248
|
|
|
1,379
|
|
|
548
|
|
|
1,176
|
|
|
420
|
|
|
—
|
|
|
11,420
|
|
Equity
|
$
|
1,075,703
|
|
|
59,374
|
|
|
38,447
|
|
|
344,479
|
|
|
118,175
|
|
|
166,569
|
|
|
124,564
|
|
|
(37,578
|
)
|
|
1,889,733
|
|
Three months ended June 30, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from unaffiliated customers
|
$
|
416,454
|
|
|
55,343
|
|
|
22,003
|
|
|
623,625
|
|
|
152,570
|
|
|
250,823
|
|
|
78,323
|
|
|
—
|
|
|
1,599,141
|
|
Transfers between geographic areas
|
22,408
|
|
|
2,587
|
|
|
5,567
|
|
|
5,637
|
|
|
6,708
|
|
|
9,829
|
|
|
4,925
|
|
|
(57,661
|
)
|
|
—
|
|
|
Total revenues
|
$
|
438,862
|
|
|
57,930
|
|
|
27,570
|
|
|
629,262
|
|
|
159,278
|
|
|
260,652
|
|
|
83,248
|
|
|
(57,661
|
)
|
|
1,599,141
|
|
Net revenues
1
|
$
|
200,106
|
|
|
25,533
|
|
|
16,648
|
|
|
97,498
|
|
|
40,145
|
|
|
79,958
|
|
|
24,826
|
|
|
—
|
|
|
484,714
|
|
Operating income
|
$
|
59,780
|
|
|
7,001
|
|
|
4,676
|
|
|
39,321
|
|
|
11,828
|
|
|
14,952
|
|
|
4,885
|
|
|
—
|
|
|
142,443
|
|
Identifiable assets at period end
|
$
|
1,328,312
|
|
|
110,498
|
|
|
57,588
|
|
|
587,891
|
|
|
153,660
|
|
|
481,190
|
|
|
205,023
|
|
|
5,778
|
|
|
2,929,940
|
|
Capital expenditures
|
$
|
5,547
|
|
|
422
|
|
|
171
|
|
|
1,383
|
|
|
518
|
|
|
1,234
|
|
|
360
|
|
|
—
|
|
|
9,635
|
|
Depreciation and amortization
|
$
|
7,879
|
|
|
296
|
|
|
227
|
|
|
1,476
|
|
|
620
|
|
|
1,478
|
|
|
441
|
|
|
—
|
|
|
12,417
|
|
Equity
|
$
|
1,044,386
|
|
|
72,681
|
|
|
35,578
|
|
|
356,974
|
|
|
122,577
|
|
|
189,296
|
|
|
112,394
|
|
|
(36,749
|
)
|
|
1,897,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
UNITED
STATES
|
|
OTHER
NORTH
AMERICA
|
|
LATIN
AMERICA
|
|
NORTH ASIA
|
|
SOUTH ASIA
|
|
EUROPE
|
|
MIDDLE EAST, AFRICA AND INDIA
|
|
ELIMI-
NATIONS
|
|
CONSOLI-
DATED
|
||||||||||
Six months ended June 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from unaffiliated customers
|
$
|
893,803
|
|
|
113,533
|
|
|
48,395
|
|
|
1,295,345
|
|
|
366,243
|
|
|
482,039
|
|
|
169,721
|
|
|
—
|
|
|
3,369,079
|
|
Transfers between geographic areas
|
60,161
|
|
|
6,499
|
|
|
10,180
|
|
|
11,124
|
|
|
12,388
|
|
|
20,353
|
|
|
10,179
|
|
|
(130,884
|
)
|
|
—
|
|
|
Total revenues
|
$
|
953,964
|
|
|
120,032
|
|
|
58,575
|
|
|
1,306,469
|
|
|
378,631
|
|
|
502,392
|
|
|
179,900
|
|
|
(130,884
|
)
|
|
3,369,079
|
|
Net revenues
1
|
$
|
448,956
|
|
|
61,254
|
|
|
34,044
|
|
|
241,896
|
|
|
89,144
|
|
|
152,495
|
|
|
53,838
|
|
|
—
|
|
|
1,081,627
|
|
Operating income
|
$
|
127,728
|
|
|
21,528
|
|
|
10,797
|
|
|
117,653
|
|
|
30,020
|
|
|
30,658
|
|
|
13,215
|
|
|
—
|
|
|
351,599
|
|
Identifiable assets at period end
|
$
|
1,381,755
|
|
|
103,613
|
|
|
57,711
|
|
|
572,425
|
|
|
141,344
|
|
|
448,475
|
|
|
219,280
|
|
|
7,772
|
|
|
2,932,375
|
|
Capital expenditures
|
$
|
14,036
|
|
|
1,944
|
|
|
1,186
|
|
|
765
|
|
|
1,308
|
|
|
2,069
|
|
|
1,049
|
|
|
—
|
|
|
22,357
|
|
Depreciation and amortization
|
$
|
14,732
|
|
|
602
|
|
|
516
|
|
|
2,778
|
|
|
1,078
|
|
|
2,422
|
|
|
821
|
|
|
—
|
|
|
22,949
|
|
Equity
|
$
|
1,075,703
|
|
|
59,374
|
|
|
38,447
|
|
|
344,479
|
|
|
118,175
|
|
|
166,569
|
|
|
124,564
|
|
|
(37,578
|
)
|
|
1,889,733
|
|
Six months ended June 30, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues from unaffiliated customers
|
$
|
817,193
|
|
|
106,927
|
|
|
42,632
|
|
|
1,192,314
|
|
|
293,313
|
|
|
484,506
|
|
|
153,901
|
|
|
—
|
|
|
3,090,786
|
|
Transfers between geographic areas
|
42,419
|
|
|
4,962
|
|
|
10,771
|
|
|
11,054
|
|
|
13,258
|
|
|
19,148
|
|
|
9,467
|
|
|
(111,079
|
)
|
|
—
|
|
|
Total revenues
|
$
|
859,612
|
|
|
111,889
|
|
|
53,403
|
|
|
1,203,368
|
|
|
306,571
|
|
|
503,654
|
|
|
163,368
|
|
|
(111,079
|
)
|
|
3,090,786
|
|
Net revenues
1
|
$
|
392,188
|
|
|
51,694
|
|
|
32,005
|
|
|
190,892
|
|
|
79,238
|
|
|
154,289
|
|
|
48,994
|
|
|
—
|
|
|
949,300
|
|
Operating income
|
$
|
111,678
|
|
|
15,376
|
|
|
9,535
|
|
|
79,375
|
|
|
24,298
|
|
|
26,594
|
|
|
10,790
|
|
|
—
|
|
|
277,646
|
|
Identifiable assets at period end
|
$
|
1,328,312
|
|
|
110,498
|
|
|
57,588
|
|
|
587,891
|
|
|
153,660
|
|
|
481,190
|
|
|
205,023
|
|
|
5,778
|
|
|
2,929,940
|
|
Capital expenditures
|
$
|
9,475
|
|
|
686
|
|
|
472
|
|
|
4,043
|
|
|
974
|
|
|
2,100
|
|
|
645
|
|
|
—
|
|
|
18,395
|
|
Depreciation and amortization
|
$
|
15,731
|
|
|
576
|
|
|
439
|
|
|
2,978
|
|
|
1,216
|
|
|
2,985
|
|
|
874
|
|
|
—
|
|
|
24,799
|
|
Equity
|
$
|
1,044,386
|
|
|
72,681
|
|
|
35,578
|
|
|
356,974
|
|
|
122,577
|
|
|
189,296
|
|
|
112,394
|
|
|
(36,749
|
)
|
|
1,897,137
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Total revenues
|
$
|
1,691,553
|
|
|
$
|
1,599,141
|
|
|
$
|
3,369,079
|
|
|
$
|
3,090,786
|
|
Expenses:
|
|
|
|
|
|
|
|
||||||||
Airfreight services
|
506,988
|
|
|
503,213
|
|
|
1,019,989
|
|
|
986,095
|
|
||||
Ocean freight and ocean services
|
433,356
|
|
|
423,716
|
|
|
878,812
|
|
|
791,091
|
|
||||
Customs brokerage and other services
|
199,068
|
|
|
187,498
|
|
|
388,651
|
|
|
364,300
|
|
||||
Net revenues
|
$
|
552,141
|
|
|
$
|
484,714
|
|
|
$
|
1,081,627
|
|
|
$
|
949,300
|
|
•
|
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.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||||||||||||||||||
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Airfreight services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
693,812
|
|
|
|
|
$
|
667,257
|
|
|
|
|
$
|
1,401,256
|
|
|
|
|
$
|
1,314,395
|
|
|
|
|
||||
Expenses
|
506,988
|
|
|
|
|
503,213
|
|
|
|
|
1,019,989
|
|
|
|
|
986,095
|
|
|
|
|
||||||||
Net revenues
|
186,824
|
|
|
34
|
%
|
|
164,044
|
|
|
34
|
%
|
|
381,267
|
|
|
35
|
%
|
|
328,300
|
|
|
34
|
%
|
|
||||
Ocean freight services and ocean services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
576,772
|
|
|
|
|
536,438
|
|
|
|
|
1,142,489
|
|
|
|
|
1,005,662
|
|
|
|
|
||||||||
Expenses
|
433,356
|
|
|
|
|
423,716
|
|
|
|
|
878,812
|
|
|
|
|
791,091
|
|
|
|
|
||||||||
Net revenues
|
143,416
|
|
|
26
|
|
|
112,722
|
|
|
23
|
|
|
263,677
|
|
|
25
|
|
|
214,571
|
|
|
23
|
|
|
||||
Customs brokerage and other services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
420,969
|
|
|
|
|
395,446
|
|
|
|
|
825,334
|
|
|
|
|
770,729
|
|
|
|
|
||||||||
Expenses
|
199,068
|
|
|
|
|
187,498
|
|
|
|
|
388,651
|
|
|
|
|
364,300
|
|
|
|
|
||||||||
Net revenues
|
221,901
|
|
|
40
|
|
|
207,948
|
|
|
43
|
|
|
436,683
|
|
|
40
|
|
|
406,429
|
|
|
43
|
|
|
||||
Total net revenues
|
552,141
|
|
|
100
|
|
|
484,714
|
|
|
100
|
|
|
1,081,627
|
|
|
100
|
|
|
949,300
|
|
|
100
|
|
|
||||
Overhead expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries and related costs
|
287,065
|
|
|
52
|
|
|
260,767
|
|
|
54
|
|
|
565,943
|
|
|
52
|
|
|
516,709
|
|
|
54
|
|
|
||||
Other
|
82,360
|
|
|
15
|
|
|
81,504
|
|
|
17
|
|
|
164,085
|
|
|
15
|
|
|
154,945
|
|
|
17
|
|
|
||||
Total overhead expenses
|
369,425
|
|
|
67
|
|
|
342,271
|
|
|
71
|
|
|
730,028
|
|
|
67
|
|
|
671,654
|
|
|
71
|
|
|
||||
Operating income
|
182,716
|
|
|
33
|
|
|
142,443
|
|
|
29
|
|
|
351,599
|
|
|
33
|
|
|
277,646
|
|
|
29
|
|
|
||||
Other income, net
|
6,440
|
|
|
1
|
|
|
5,954
|
|
|
1
|
|
|
9,206
|
|
|
1
|
|
|
8,370
|
|
|
1
|
|
|
||||
Earnings before income taxes
|
189,156
|
|
|
34
|
|
|
148,397
|
|
|
30
|
|
|
360,805
|
|
|
34
|
|
|
286,016
|
|
|
30
|
|
|
||||
Income tax expense
|
70,827
|
|
|
13
|
|
|
56,669
|
|
|
12
|
|
|
135,144
|
|
|
13
|
|
|
110,093
|
|
|
12
|
|
|
||||
Net earnings
|
118,329
|
|
|
21
|
|
|
91,728
|
|
|
18
|
|
|
225,661
|
|
|
21
|
|
|
175,923
|
|
|
18
|
|
|
||||
Less net earnings attributable to the noncontrolling interest
|
569
|
|
|
—
|
|
|
426
|
|
|
—
|
|
|
1,197
|
|
|
—
|
|
|
797
|
|
|
—
|
|
|
||||
Net earnings attributable to shareholders
|
$
|
117,760
|
|
|
21
|
%
|
|
$
|
91,302
|
|
|
18
|
%
|
|
$
|
224,464
|
|
|
21
|
%
|
|
$
|
175,126
|
|
|
18
|
%
|
|
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
|
|||||
April 1-30, 2015
|
|
1,021
|
|
|
$
|
47.86
|
|
|
1,021
|
|
|
15,359,777
|
|
May 1-31, 2015
|
|
1,038,741
|
|
|
46.44
|
|
|
1,038,741
|
|
|
14,725,586
|
|
|
June 1-30, 2015
|
|
1,660,000
|
|
|
48.10
|
|
|
1,660,000
|
|
|
12,500,655
|
|
|
Total
|
|
2,699,762
|
|
|
$
|
47.46
|
|
|
2,699,762
|
|
|
12,500,655
|
|
(a)
|
In connection with the promotion of Daniel R. Wall to the position of President, Global Products, the Company entered into an Employment Agreement with Mr. Wall on August 3, 2015, on terms substantially identical with the other Executive Officers. In addition, on August 3, 2015, the Company granted Mr. Wall an option to purchase 36,000 shares of the Company’s stock pursuant to the Company’s 2015 Stock Option Plan at an exercise price of $47.08 per share.
|
Exhibit Number
|
|
Description
|
10.1
|
|
The Company's 2015 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 April 09, 2015)
|
|
|
|
10.2
|
|
Form of Stock Option Agreement used in connection with options granted under the Company's 2015 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 April 09, 2015)
|
|
|
|
10.27
|
|
Form of Employment Agreement executed by the Company's President, Global Products, dated August 3, 2015
|
|
|
|
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.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
|
|
|
August 6, 2015
|
|
/s/ JEFFREY S. MUSSER
|
|
|
Jeffrey S. Musser, President, Chief Executive Officer and Director
|
|
|
|
August 6, 2015
|
|
/s/ BRADLEY S. POWELL
|
|
|
Bradley S. Powell, Senior Vice President and Chief Financial Officer
|
Exhibit Number
|
|
Description
|
10.27
|
|
Form of Employment Agreement executed by the Company's President, Global Products, dated August 3, 2015
|
|
|
|
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.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Expeditors International of Washington, Inc.;
|
2.
|
Based on my knowledge, this quarterly 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 quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 quarterly 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 quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
|
d)
|
Disclosed in this quarterly 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 quarterly report on Form 10-Q of Expeditors International of Washington, Inc.;
|
2.
|
Based on my knowledge, this quarterly 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 quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 quarterly 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 quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and
|
d)
|
Disclosed in this quarterly 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
/ BRADLEY S. POWELL
|
Bradley S. Powell
Senior Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
August 6, 2015
|
/
S
/ JEFFREY S. MUSSER
|
|
Jeffrey S. Musser
President, Chief Executive Officer and Director
|
|
|
August 6, 2015
|
/
S
/ B
RADLEY
S. P
OWELL
|
|
Bradley S. Powell
Senior Vice President and Chief Financial Officer
|