Q
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
91-1069248
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(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
|
1015 Third Avenue, 12
th
Floor, Seattle, Washington
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98104
|
(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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Page
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PART I
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Item 16
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•
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Airfreight Services
|
•
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Ocean Freight and Ocean Services
|
•
|
Customs Brokerage and Other Services
|
•
|
Americas (70)
|
•
|
North Asia (21)
|
•
|
South Asia (17)
|
•
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Europe (45)
|
•
|
Middle East, Africa and India (24)
|
1.
|
Ensure that every operating unit's base-line growth strategies for air, ocean and customs services grow at the rate of each unit's (i.e. district or region) relevant market growth rate, and Expeditors' Transcon and Distribution services are expected to maintain higher growth rates.
|
2.
|
Align and integrate our European-Asian Pacific and European-North Americas interests to the same degree that our Asian Pacific and Americas interests have historically been aligned. This alignment is expected to result in additional growth in these markets beyond our base-line growth expectations.
|
3.
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Leverage our long and deeply entrenched presence in China - as well as the reputation that we have with the strategic carriers servicing China - to build a stronger import presence. Our main focus remains on developing and integrating our customs systems, expertise and talent, and making investments that enhance and improve our import infrastructure and our ability to provide local delivery and support services in China.
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4.
|
Expand market share growth and position in North America, traditionally Expeditors’ most strategic market.
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Name
|
|
Age
|
|
Position
|
Jeffrey S. Musser
|
|
52
|
|
President, Chief Executive Officer and Director
|
Eugene K. Alger
|
|
57
|
|
President, Global Services
|
Daniel R. Wall
|
|
49
|
|
President, Global Products
|
Richard H. Rostan
|
|
61
|
|
President, Global Geographies and Operations
|
Philip M. Coughlin
|
|
57
|
|
Senior Vice President and Chief Strategy Officer
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Bradley S. Powell
|
|
57
|
|
Senior Vice President and Chief Financial Officer
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Christopher J. McClincy
|
|
43
|
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Senior Vice President and Chief Information Officer
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Benjamin G. Clark
|
|
49
|
|
Senior Vice President, General Counsel and Corporate Secretary
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RISK FACTORS
|
|
DISCUSSION AND POTENTIAL SIGNIFICANCE
|
|
|
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Network Continuity and Cybersecurity
|
|
As Expeditors, our customers and suppliers continue to increase reliance on systems, and as additional features are added, the risks also increase. Any significant disruptions to our global systems or the Internet for any reason, which could include equipment or network failures; co-location facility failures; power outages; sabotage; employee error or other actions; cyber-attacks or other security breaches; reliance on third party technology; geo-political activity or natural disasters; all of which could have a material negative effect on our results. This could include loss of revenue; business disruptions (such as 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 our systems and technology; or damage to our reputation.
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|
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Foreign Operations
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|
The majority of Expeditors' revenues and operating income comes from operations conducted outside the United States. To maintain a global service network, we may be required to operate in hostile locations and in dangerous situations. Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises.
In addition, we operate in parts of the world where common business practices could constitute violations of the anti-corruption laws, rules, regulations and decrees of the United States and of other countries in which we conduct business, including the U.S. Foreign Corrupt Practices Act and the UK Bribery Act; as well as trade and exchange control laws, or laws, regulations and Executive Orders imposing embargoes and sanctions; and anti-boycott laws and regulations. Compliance with these laws, rules, regulations and decrees is dependent on our employees, service providers, agents, third party brokers and customers, whose individual actions could violate these laws, rules, regulations and decrees. Failure to comply could result in substantial penalties and additional expenses, damage to our reputation and restrictions on our ability to conduct business.
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|
|
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Growth
|
|
Expeditors has historically relied primarily upon organic growth and has tended to avoid growth through acquisition. Future results will depend upon our ability to anticipate and adapt to constantly evolving supply chain requirements and innovations. To continue to grow organically, we must gain profitable market share in a highly competitive environment and successfully develop and market new service offerings. When investment opportunities arise, our success could be dependent on our ability to evaluate and integrate acquisitions.
|
|
|
|
Regulatory Environment
|
|
Expeditors is affected by ever increasing regulations from a number of sources in the United States and in foreign locations in which we operate. Many of these regulations are complex and require varying degrees of interpretation, including those related to trade compliance, data privacy, employment, compensation and competition, and may result in unforeseen costs.
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 among various governmental authorities. Furthermore, the implementation of these regulations, including deadlines and substantive requirements, can be driven by regulatory urgencies rather than industry's realistic ability to comply.
Failure to consistently and timely comply with these regulations, or the failure, breach or compromise of our policies and procedures or those of our service providers or agents, may result in increased operating costs, damage to our reputation, restrictions on operations or fines and penalties.
|
|
|
|
Competition
|
|
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. Nevertheless, many of these competitors have significantly more resources than Expeditors, and are actively pursuing acquisition opportunities and are developing new technologies to gain competitive advantages. Depending on the location of the shipper and the importer, we must compete against both the niche players, larger entities including carriers, and emerging technology companies. 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 and to secure favorable pricing and contractual terms such as longer payment terms, fixed-price arrangements, 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 our results of operations, cash flows and financial condition.
|
RISK FACTORS
|
|
DISCUSSION AND POTENTIAL SIGNIFICANCE
|
|
|
|
Taxes
|
|
Expeditors 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. In December 2017, the United States made significant changes to its tax laws, which added complexity and uncertainty in calculating corporate tax liabilities. We are regularly under audit by tax authorities, including transfer pricing inquiries. Although we believe our tax estimates are reasonable, the final determination of tax audits, including any potential penalties and interest, could be materially different from our tax provisions and accruals and negatively impact our financial results.
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Litigation/Investigations
|
|
As a multinational corporation, Expeditors is subject to formal or informal investigations from governmental authorities or others in the countries in which we do business. In addition, we may become subject to civil litigation with our customers, service providers and other parties with whom we do business. These investigations and litigation may require significant management time and could cause us to incur substantial additional legal and related costs, which may include fines, penalties or damages that could have a materially adverse impact on our financial results.
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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 Expeditors' revenues and operating results, as experienced in 2009 and 2012. These conditions may adversely affect certain of our customers and service providers. Were that to occur, our revenues and net earnings could also be adversely affected. Should our customers’ ability to pay deteriorate, additional bad debts may be incurred.
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Predictability of Results
|
|
Expeditors is not aware of any accurate means of forecasting short-term customer requirements. However, long-term customer satisfaction depends upon our ability to meet these unpredictable short-term customer requirements. Personnel costs, our single largest expense, are always less flexible in the very near term as we must staff to meet uncertain demand. As a result, short-term operating results could be disproportionately affected.
A significant portion of Expeditors' revenues is derived from customers in retail and technology industries whose shipping patterns are tied closely to consumer demand and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules. Therefore, the timing of our revenues are, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for retail goods, product launches and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter, and therefore, we may not learn of a shortfall in revenues until late in a quarter. To the extent that a shortfall in revenues or earnings was not expected by securities analysts or investors, any such shortfall from levels predicted by securities analysts or investors could have an immediate and adverse effect on the trading price of our stock.
Volatile market conditions can create situations where rate increases charged by carriers and other service providers are implemented with little or no advance notice. We often times cannot pass these rate increases on to our customers in the same time frame, if at all. As a result, our yields and margins can be negatively impacted, as recently experienced, particularly with ocean freight.
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Catastrophic Events
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|
A disruption or failure of Expeditors' 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. Our 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 our critical business or information technology systems could harm our ability to conduct normal business operations and our operating results.
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Location
|
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Nature of Property
|
United States:
|
|
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Washington, Seattle
|
|
Corporate headquarters
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California, Brisbane
|
|
Office and warehouse building
|
California, Hawthorne
|
|
Office and warehouse building
|
Illinois, Bensenville
|
|
Office and warehouse building
|
New Jersey, Edison
|
|
Office and warehouse building
|
New York, Inwood
|
|
Office and warehouse building
|
Texas, Humble
|
|
Office and warehouse building
|
Washington, SeaTac
|
|
Office building
|
Washington, Spokane
|
|
Office building
|
|
|
|
North Asia:
|
|
|
China, Beijing
|
|
Office and warehouse building
|
China, Shanghai
|
|
Office building
|
China, Shenzhen
|
|
Offices
|
China, Tianjin
|
|
Offices
|
Hong Kong, Kowloon
|
|
Offices
|
Korea, Seoul
|
|
Offices
|
Taiwan, Taipei
|
|
Offices
|
|
|
|
Europe:
|
|
|
Belgium, Brussels
|
|
Office and warehouse building
|
England, London
|
|
Office and warehouse building
|
Ireland, Cork
|
|
Office and warehouse building
|
Ireland, Dublin
|
|
Office and warehouse building
|
Netherlands, Amsterdam
|
|
Office and warehouse building
|
|
|
|
Other North America:
|
|
|
Mexico, Nuevo Laredo
|
|
Land
|
|
|
|
Latin America:
|
|
|
Costa Rica, Alajuela
|
|
Office building
|
|
|
|
Middle East:
|
|
|
Egypt, Cairo
|
|
Office and warehouse building
|
|
|
Common Stock
|
|
|
|
Common Stock
|
||||||||||||
Quarter
|
|
High
|
|
Low
|
|
Quarter
|
|
High
|
|
Low
|
||||||||
2017
|
|
|
|
|
|
2016
|
|
|
|
|
||||||||
First
|
|
$
|
57.35
|
|
|
$
|
51.57
|
|
|
First
|
|
$
|
49.56
|
|
|
$
|
40.41
|
|
Second
|
|
$
|
57.75
|
|
|
$
|
51.96
|
|
|
Second
|
|
$
|
50.63
|
|
|
$
|
46.48
|
|
Third
|
|
$
|
60.30
|
|
|
$
|
54.32
|
|
|
Third
|
|
$
|
52.58
|
|
|
$
|
48.41
|
|
Fourth
|
|
$
|
66.01
|
|
|
$
|
56.45
|
|
|
Fourth
|
|
$
|
56.37
|
|
|
$
|
47.23
|
|
June 15, 2017
|
$
|
0.42
|
|
December 15, 2017
|
$
|
0.42
|
|
June 15, 2016
|
$
|
0.40
|
|
December 15, 2016
|
$
|
0.40
|
|
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, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
11,121,188
|
|
November 1-30, 2017
|
|
574,000
|
|
|
$
|
64.33
|
|
|
574,000
|
|
|
11,031,664
|
|
December 1-31, 2017
|
|
1,557,579
|
|
|
$
|
64.58
|
|
|
1,557,579
|
|
|
9,018,093
|
|
Total
|
|
2,131,579
|
|
|
$
|
64.52
|
|
|
2,131,579
|
|
|
9,018,093
|
|
|
|
12/12
|
|
12/13
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
Expeditors International of Washington, Inc.
|
|
$
|
100.00
|
|
$
|
113.52
|
|
$
|
116.07
|
|
$
|
119.12
|
|
$
|
142.10
|
|
$
|
176.08
|
|
Standard and Poor's 500 Index
|
|
100.00
|
|
132.39
|
|
150.51
|
|
152.59
|
|
170.84
|
|
208.14
|
|
||||||
NASDAQ Transportation
|
|
100.00
|
|
133.76
|
|
187.65
|
|
162.30
|
|
193.79
|
|
248.92
|
|
||||||
NASDAQ Industrial Transportation (NQUSB2770T)
|
|
100.00
|
|
141.60
|
|
171.91
|
|
132.47
|
|
171.17
|
|
218.34
|
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
|
$
|
6,920,948
|
|
|
6,098,037
|
|
|
6,616,632
|
|
|
6,564,721
|
|
|
6,080,257
|
|
Net revenues
1
|
|
$
|
2,319,189
|
|
|
2,164,036
|
|
|
2,187,777
|
|
|
1,981,427
|
|
|
1,882,853
|
|
Net earnings attributable to shareholders
|
|
$
|
489,345
|
|
|
430,807
|
|
|
457,223
|
|
|
376,888
|
|
|
348,526
|
|
Diluted earnings attributable to shareholders per share
|
|
$
|
2.69
|
|
|
2.36
|
|
|
2.40
|
|
|
1.92
|
|
|
1.68
|
|
Basic earnings attributable to shareholders per share
|
|
$
|
2.73
|
|
|
2.38
|
|
|
2.42
|
|
|
1.92
|
|
|
1.69
|
|
Dividends declared and paid per common share
|
|
$
|
0.84
|
|
|
0.80
|
|
|
0.72
|
|
|
0.64
|
|
|
0.60
|
|
Cash used for dividends
|
|
$
|
150,495
|
|
|
145,123
|
|
|
135,673
|
|
|
124,634
|
|
|
123,292
|
|
Cash used for share repurchases
|
|
$
|
478,258
|
|
|
337,658
|
|
|
629,991
|
|
|
550,781
|
|
|
261,936
|
|
Working capital
|
|
$
|
1,448,333
|
|
|
1,288,648
|
|
|
1,115,136
|
|
|
1,285,188
|
|
|
1,526,673
|
|
Total assets
|
|
$
|
3,117,008
|
|
|
2,790,871
|
|
|
2,565,577
|
|
|
2,870,626
|
|
|
2,996,416
|
|
Shareholders’ equity
|
|
$
|
1,991,858
|
|
|
1,844,638
|
|
|
1,691,993
|
|
|
1,868,408
|
|
|
2,084,783
|
|
Weighted average diluted shares outstanding
|
|
181,666
|
|
|
182,704
|
|
|
190,223
|
|
|
196,768
|
|
|
206,895
|
|
|
Weighted average basic shares outstanding
|
|
179,247
|
|
|
181,282
|
|
|
188,941
|
|
|
196,147
|
|
|
205,995
|
|
•
|
Total dedication to providing superior customer service;
|
•
|
Compliance with our policies and procedures and government regulations;
|
•
|
Aggressive marketing of all of our service offerings;
|
•
|
A positive, safe work environment that is inclusive and free from discrimination and harassment;
|
•
|
Ongoing development of key employees and management personnel;
|
•
|
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 change occurs, a qualified and well-trained internal candidate is ready to step forward; and
|
•
|
Continuous identification, design and implementation of system solutions and differentiated service offerings, both technological and otherwise, to meet and exceed the needs of our customers while simultaneously delivering tools to make our employees more efficient and more effective.
|
•
|
accrual of loss contingencies;
|
•
|
accrual of various tax liabilities and contingencies;
|
•
|
accounts receivable valuation; and
|
•
|
accrual of insurance liabilities for the portion of the related exposure that we have self-insured.
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||||||||
In thousands
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
Amount
|
|
Percent
of net
revenues
|
|
|||||||||
Airfreight services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
2,877,032
|
|
|
|
|
$
|
2,453,347
|
|
|
|
|
$
|
2,740,583
|
|
|
|
|
|||
Expenses
|
|
2,126,761
|
|
|
|
|
1,752,167
|
|
|
|
|
1,987,690
|
|
|
|
|
||||||
Net revenues
|
|
750,271
|
|
|
32
|
%
|
|
701,180
|
|
|
32
|
%
|
|
752,893
|
|
|
34
|
%
|
|
|||
Ocean freight and ocean services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
2,107,045
|
|
|
|
|
1,917,494
|
|
|
|
|
2,194,004
|
|
|
|
|
||||||
Expenses
|
|
1,543,740
|
|
|
|
|
1,378,699
|
|
|
|
|
1,648,993
|
|
|
|
|
||||||
Net revenues
|
|
563,305
|
|
|
24
|
|
|
538,795
|
|
|
25
|
|
|
545,011
|
|
|
25
|
|
|
|||
Customs brokerage and other services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
1,936,871
|
|
|
|
|
1,727,196
|
|
|
|
|
1,682,045
|
|
|
|
|
||||||
Expenses
|
|
931,258
|
|
|
|
|
803,135
|
|
|
|
|
792,172
|
|
|
|
|
||||||
Net revenues
|
|
1,005,613
|
|
|
44
|
|
|
924,061
|
|
|
43
|
|
|
889,873
|
|
|
41
|
|
|
|||
Total net revenues
|
|
2,319,189
|
|
|
100
|
|
|
2,164,036
|
|
|
100
|
|
|
2,187,777
|
|
|
100
|
|
|
|||
Overhead expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Salaries and related costs
|
|
1,267,120
|
|
|
55
|
|
|
1,157,635
|
|
|
53
|
|
|
1,143,511
|
|
|
52
|
|
|
|||
Other
|
|
351,809
|
|
|
15
|
|
|
336,238
|
|
|
16
|
|
|
322,782
|
|
|
15
|
|
|
|||
Total overhead expenses
|
|
1,618,929
|
|
|
70
|
|
|
1,493,873
|
|
|
69
|
|
|
1,466,293
|
|
|
67
|
|
|
|||
Operating income
|
|
700,260
|
|
|
30
|
|
|
670,163
|
|
|
31
|
|
|
721,484
|
|
|
33
|
|
|
|||
Other income, net
|
|
18,335
|
|
|
1
|
|
|
16,693
|
|
|
1
|
|
|
15,205
|
|
|
1
|
|
|
|||
Earnings before income taxes
|
|
718,595
|
|
|
31
|
|
|
686,856
|
|
|
32
|
|
|
736,689
|
|
|
34
|
|
|
|||
Income tax expense
|
|
228,212
|
|
|
10
|
|
|
254,323
|
|
|
12
|
|
|
277,192
|
|
|
13
|
|
|
|||
Net earnings
|
|
490,383
|
|
|
21
|
|
|
432,533
|
|
|
20
|
|
|
459,497
|
|
|
21
|
|
|
|||
Less net earnings attributable to the noncontrolling interest
|
|
1,038
|
|
|
—
|
|
|
1,726
|
|
|
—
|
|
|
2,274
|
|
|
—
|
|
|
|||
Net earnings attributable to shareholders
|
|
$
|
489,345
|
|
|
21
|
%
|
|
$
|
430,807
|
|
|
20
|
%
|
|
$
|
457,223
|
|
|
21
|
%
|
|
|
|
|
|
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
|
|
$
|
75,311
|
|
|
66,929
|
|
|
6,484
|
|
|
88
|
|
|
1,810
|
|
|
|
|
|
Payments due by period
|
||||||||||||
In thousands
|
|
Total
|
|
|
Less than
1 year
|
|
1 - 3
years
|
|
3 - 5
years
|
|
After
5 years
|
|||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating leases
|
|
$
|
259,895
|
|
|
72,148
|
|
|
103,242
|
|
|
49,949
|
|
|
34,556
|
|
Unconditional purchase obligations
|
|
56,116
|
|
|
51,340
|
|
|
4,776
|
|
|
—
|
|
|
—
|
|
|
Construction, equipment and technology purchase obligations
|
|
18,475
|
|
|
15,311
|
|
|
3,164
|
|
|
—
|
|
|
—
|
|
|
Total contractual cash obligations
|
|
$
|
334,486
|
|
|
138,799
|
|
|
111,182
|
|
|
49,949
|
|
|
34,556
|
|
Document
|
|
Page
|
|||
|
|
|
|
||
1
|
|
|
Financial Statements and Reports of Independent Registered Public Accounting Firm:
|
|
|
|
|
|
|
||
|
|
|
F-1 and F-2
|
||
|
|
|
|
||
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
||
|
|
Balance Sheets as of December 31, 2017 and 2016
|
|
F-3
|
|
|
|
|
|
||
|
|
Statements of Earnings for the Years Ended December 31, 201
7, 2016, and 2015
|
|
F-4
|
|
|
|
|
|
|
|
|
|
Statements of Comprehensive Income for the Years Ended December 31, 201
7, 2016, and 2015
|
|
F-5
|
|
|
|
|
|
||
|
|
Statements of Equity for the Years Ended December 31, 201
7, 2016, and 2015
|
|
F-6 and F-7
|
|
|
|
|
|
||
|
|
Statements of Cash Flows for the Years Ended December 31, 201
7, 2016, and 2015
|
|
F-8
|
|
|
|
|
|
||
|
|
|
F-9 through F-23
|
(1)
|
Represents shares issuable upon exercise of outstanding stock options, vesting of outstanding restricted stock units under the Omnibus Incentive Plan and performance stock units that will vest if target levels are achieved.
|
(2)
|
The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock units, which have no exercise price.
|
(3)
|
Includes
1,409,217
available for issuance under the employee stock purchase plans,
1,884,387
available for future grants of equity awards under the Omnibus Incentive Plan and
106,250
available for issuance of restricted stock under the Director's Restricted Stock Plan.
|
|
|
|
|
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-23
|
|
|
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, Expeditors' President and Chief Executive Officer. See Exhibit 10.23.
|
(2)
|
Form of Employment Agreement executed by Expeditors' Chief Financial Officer. See Exhibit 10.25.
|
(3)
|
Form of Employment Agreement executed by Expeditors' President, Global Products. See Exhibit 10.27.
|
(4)
|
Expeditors' 2008 Executive Incentive Compensation Plan. See Exhibit 10.35.
|
(5)
|
Expeditors' 2014 Directors’ Restricted Stock Plan. See Exhibit 10.36.
|
(6)
|
Expeditors' 2002 Employee Stock Purchase Plan. See Exhibit 10.42.
|
(7)
|
Expeditors' amendment to the 2002 Employee Stock Purchase Plan. See Exhibit 10.42.1
|
(8)
|
Expeditors' 2007 Stock Option Plan. See Exhibit 10.49.
|
(9)
|
Form of Stock Option Agreement used in connection with Incentive options granted under Expeditors' 2007 Stock Option Plan. See Exhibit 10.50.
|
(10)
|
Expeditors' 2008 Stock Option Plan. See Exhibit 10.51.
|
(11)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2008 Stock Option Plan. See Exhibit 10.52.
|
(12)
|
Expeditors' 2009 Stock Option Plan. See Exhibit 10.53.
|
(13)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2009 Stock Option Plan. See Exhibit 10.54.
|
(14)
|
Expeditors' 2010 Stock Option Plan. See Exhibit 10.55.
|
(15)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors’ 2010 Stock Option Plan. See Exhibit 10.56.
|
(16)
|
Expeditors' 2011 Stock Option Plan. See Exhibit 10.57.
|
(17)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2011 Stock Option Plan. See Exhibit 10.58.
|
(18)
|
Expeditors' 2012 Stock Option Plan. See Exhibit 10.59.
|
(19)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2012 Stock Option Plan. See Exhibit 10.60.
|
(20)
|
Expeditors' 2013 Stock Option Plan. See Exhibit 10.61.
|
(21)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2013 Stock Option Plan. See Exhibit 10.62.
|
(22)
|
Expeditors' 2014 Stock Option Plan. See Exhibit 10.63.
|
(23)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors; 2014 Stock Option Plan. See Exhibit 10.64.
|
(24)
|
Expeditors' 2015 Stock Option Plan. See Exhibit 10.65.
|
(25)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2015 Stock Option Plan. See Exhibit 10.66.
|
(26)
|
Expeditors' 2016 Stock Option Plan. See Exhibit 10.67.
|
(27)
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2016 Stock Option Plan. See Exhibit 10.68.
|
(28)
|
Expeditors' 2017 Omnibus Incentive Plan. See Exhibit 10.69
|
(29)
|
Form of Executive Restricted Stock Unit Award Agreement used in connection with executive restricted stock units granted under Expeditors' 2017 Omnibus Incentive Stock Plan. See Exhibit 10.70
|
(30)
|
Form of Performance Share Award Agreement used in connection with performance share units granted under Expeditors' 2017 Omnibus Incentive Stock Plan. See Exhibit 10.71
|
Exhibit Number
|
|
Exhibit
|
|
|
|
|
Expeditors' Restated Articles of Incorporation and the Articles of Amendment as amended
|
|
|
|
|
|
Expeditors' Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 to Form 8-K, filed on or about May 6, 2016.)
|
|
|
|
|
|
Form of Employment Agreement executed by Jeffrey S. Musser, Expeditors' President and Chief Executive Officer dated December 31, 2008. (Incorporated by reference to Exhibit 10.23 to Form 10-K, filed on or about February 26, 2015.)
|
|
|
|
|
|
Form of Employment Agreement executed by Expeditors' 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.)
|
|
|
|
|
|
Form of Employment Agreement executed by Expeditors' President, Global Products. (Incorporated by reference to Exhibit 10.27 to Form 10-Q, filed on or about August 6, 2015.)
|
|
|
|
|
|
Expeditors' 2008 Executive Incentive Compensation Plan. (Incorporated by reference to Appendix C of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2008.)
|
|
|
|
|
|
Expeditors' 2014 Directors’ Restricted Stock Plan. (Incorporated by reference to Appendix D of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
|
Expeditors' 2002 Employee Stock Purchase Plan. (Incorporated by reference to Appendix C of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
|
Expeditors' amendment to the 2002 Employee Stock Purchase Plan. (Incorporated by reference to Appendix C of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
|
Expeditors' 2007 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 30, 2007.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with Incentive options granted under Expeditors' 2007 Stock Option Plan. (Incorporated by reference to Exhibit 10.50 to Form 10-K filed on or about February 29, 2008.)
|
|
|
|
|
|
Expeditors' 2008 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2008.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2008 Stock Option Plan. (Incorporated by reference to Exhibit 10.52 to Form 10-K filed on or about February 27, 2009.)
|
|
|
|
|
|
Expeditors' 2009 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2009.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2009 Stock Option Plan. (Incorporated by reference to Exhibit 10.2 to Form 8-K filed on or about May 11, 2009.)
|
|
|
|
|
|
Expeditors' 2010 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 19, 2010.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2010 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 19, 2010.)
|
|
|
|
|
|
Expeditors' 2011 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 18, 2011.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2011 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 18, 2011.)
|
|
|
|
|
|
Expeditors' 2012 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2012.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2012 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 20, 2012.)
|
|
|
|
|
|
Expeditors' 2013 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 29, 2013.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2013 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 29, 2013.)
|
|
|
|
|
|
Expeditors' 2014 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2014 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2014.)
|
|
|
|
|
|
Expeditors' 2015 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about April 9, 2015.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2015 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about April 9, 2015.)
|
|
|
|
|
|
Expeditors' 2016 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 24, 2016.)
|
|
|
|
|
|
Form of Stock Option Agreement used in connection with options granted under Expeditors' 2016 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 24, 2016.)
|
|
|
|
|
|
Expeditors' 2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 10.69 to Form S-8 Registration filed on or about May 16, 2017.)
|
|
|
|
|
|
Form of Executive Restricted Stock Unit Award Agreement used in connection with executive restricted stock units granted under Expeditors' 2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 10.70 to Form S-8 filed on or about May 16, 2017.)
|
|
|
|
|
|
Form of Performance Share Award Agreement used in connection with performance share units granted under Expeditors' 2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 10.71 to Form S-8 filed on or about May 16, 2017.)
|
|
|
|
|
|
Subsidiaries of the registrant.
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
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)
|
|
|
|
|
|
/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/ Glenn M. Alger
|
|
Director
|
|
(Glenn M. Alger)
|
|
|
|
|
|
|
|
/s/ James M. DuBois
|
|
Director
|
|
(James M. DuBois)
|
|
|
|
|
|
|
|
/s/ Mark A. Emmert
|
|
Director
|
|
(Mark A. Emmert)
|
|
|
|
|
|
|
|
/s/ Diane H. Gulyas
|
|
Director
|
|
(Diane H. Gulyas)
|
|
|
|
|
|
|
|
/s/ Dan P. Kourkoumelis
|
|
Director
|
|
(Dan P. Kourkoumelis)
|
|
|
|
|
|
|
|
/s/ Richard B. McCune
|
|
Director
|
|
(Richard B. McCune)
|
|
|
|
|
|
|
|
/s/ Alain Monié
|
|
Director
|
|
(Alain Monié)
|
|
|
|
|
|
|
|
/s/ Liane J. Pelletier
|
|
Director
|
|
(Liane J. Pelletier)
|
|
|
|
|
|
|
|
/s/ Tay Yoshitani
|
|
Director
|
|
(Tay Yoshitani)
|
|
|
|
|
|
|
/s/ KPMG LLP
|
|
|
|
|
|
We have served as the Company's auditor since 1982.
|
|
|
|
|
|
Seattle, Washington
|
|
|
February 23, 2018
|
|
|
|
|
|
/s/ KPMG LLP
|
|
|
Seattle, Washington
|
|
|
February 23, 2018
|
|
|
December 31,
|
2017
|
|
2016
|
|||
Current Assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
1,051,099
|
|
|
974,435
|
|
Accounts receivable, less allowance for doubtful accounts of $12,858 in 2017 and $9,247 in 2016
|
1,414,741
|
|
|
1,190,130
|
|
|
Other
|
75,612
|
|
|
54,014
|
|
|
Total current assets
|
2,541,452
|
|
|
2,218,579
|
|
|
Property and equipment, net
|
525,203
|
|
|
536,572
|
|
|
Goodwill
|
7,927
|
|
|
7,927
|
|
|
Deferred Federal and state income taxes, net
|
13,207
|
|
|
—
|
|
|
Other assets, net
|
29,219
|
|
|
27,793
|
|
|
Total assets
|
$
|
3,117,008
|
|
|
2,790,871
|
|
|
|
|
|
|||
Current Liabilities:
|
|
|
|
|||
Accounts payable
|
$
|
866,305
|
|
|
726,571
|
|
Accrued expenses, primarily salaries and related costs
|
206,320
|
|
|
185,502
|
|
|
Federal, state and foreign income taxes
|
20,494
|
|
|
17,858
|
|
|
Total current liabilities
|
1,093,119
|
|
|
929,931
|
|
|
Noncurrent Federal income tax payable
|
29,516
|
|
|
—
|
|
|
Deferred Federal and state income taxes, net
|
—
|
|
|
13,727
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|||
Shareholders’ Equity:
|
|
|
|
|||
Preferred stock, par value $0.01 per share, authorized 2,000 shares; none issued
|
—
|
|
|
—
|
|
|
Common stock, par value $0.01 per share, authorized 640,000 shares;
|
|
|
|
|||
issued and outstanding 176,374 shares at December 31, 2017
|
|
|
|
|||
and 179,857 shares at December 31, 2016
|
1,764
|
|
|
1,799
|
|
|
Additional paid-in capital
|
546
|
|
|
2,642
|
|
|
Retained earnings
|
2,063,512
|
|
|
1,944,789
|
|
|
Accumulated other comprehensive loss
|
(73,964
|
)
|
|
(104,592
|
)
|
|
Total shareholders’ equity
|
1,991,858
|
|
|
1,844,638
|
|
|
Noncontrolling interest
|
2,515
|
|
|
2,575
|
|
|
Total equity
|
1,994,373
|
|
|
1,847,213
|
|
|
Total liabilities and equity
|
$
|
3,117,008
|
|
|
2,790,871
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
$
|
2,877,032
|
|
|
2,453,347
|
|
|
2,740,583
|
|
Ocean freight and ocean services
|
|
2,107,045
|
|
|
1,917,494
|
|
|
2,194,004
|
|
|
Customs brokerage and other services
|
|
1,936,871
|
|
|
1,727,196
|
|
|
1,682,045
|
|
|
Total revenues
|
|
6,920,948
|
|
|
6,098,037
|
|
|
6,616,632
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
2,126,761
|
|
|
1,752,167
|
|
|
1,987,690
|
|
|
Ocean freight and ocean services
|
|
1,543,740
|
|
|
1,378,699
|
|
|
1,648,993
|
|
|
Customs brokerage and other services
|
|
931,258
|
|
|
803,135
|
|
|
792,172
|
|
|
Salaries and related costs
|
|
1,267,120
|
|
|
1,157,635
|
|
|
1,143,511
|
|
|
Rent and occupancy costs
|
|
119,732
|
|
|
108,812
|
|
|
102,470
|
|
|
Depreciation and amortization
|
|
49,310
|
|
|
46,796
|
|
|
46,012
|
|
|
Selling and promotion
|
|
44,290
|
|
|
41,763
|
|
|
41,990
|
|
|
Other
|
|
138,477
|
|
|
138,867
|
|
|
132,310
|
|
|
Total operating expenses
|
|
6,220,688
|
|
|
5,427,874
|
|
|
5,895,148
|
|
|
Operating income
|
|
700,260
|
|
|
670,163
|
|
|
721,484
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
||||
Interest income
|
|
13,204
|
|
|
11,580
|
|
|
10,421
|
|
|
Other, net
|
|
5,131
|
|
|
5,113
|
|
|
4,784
|
|
|
Other income, net
|
|
18,335
|
|
|
16,693
|
|
|
15,205
|
|
|
Earnings before income taxes
|
|
718,595
|
|
|
686,856
|
|
|
736,689
|
|
|
Income tax expense
|
|
228,212
|
|
|
254,323
|
|
|
277,192
|
|
|
Net earnings
|
|
490,383
|
|
|
432,533
|
|
|
459,497
|
|
|
Less net earnings attributable to the noncontrolling interest
|
|
1,038
|
|
|
1,726
|
|
|
2,274
|
|
|
Net earnings attributable to shareholders
|
|
$
|
489,345
|
|
|
430,807
|
|
|
457,223
|
|
Diluted earnings attributable to shareholders per share
|
|
$
|
2.69
|
|
|
2.36
|
|
|
2.40
|
|
Basic earnings attributable to shareholders per share
|
|
$
|
2.73
|
|
|
2.38
|
|
|
2.42
|
|
Weighted average diluted shares outstanding
|
|
181,666
|
|
|
182,704
|
|
|
190,223
|
|
|
Weighted average basic shares outstanding
|
|
179,247
|
|
|
181,282
|
|
|
188,941
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||
Net earnings
|
|
$
|
490,383
|
|
|
432,533
|
|
|
459,497
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments, net of tax of $16,761 in 2017, $12,687 in 2016 and $23,801 in 2015
|
|
30,434
|
|
|
(23,743
|
)
|
|
(44,090
|
)
|
|
Other comprehensive income (loss)
|
|
30,434
|
|
|
(23,743
|
)
|
|
(44,090
|
)
|
|
Comprehensive income
|
|
520,817
|
|
|
408,790
|
|
|
415,407
|
|
|
Less comprehensive income attributable to the noncontrolling interest
|
|
844
|
|
|
1,337
|
|
|
1,605
|
|
|
Comprehensive income attributable to shareholders
|
|
$
|
519,973
|
|
|
407,453
|
|
|
413,802
|
|
|
Common Stock
|
|||||
|
Shares
|
|
Par Value
|
|||
Balance at December 31, 2014
|
191,656
|
|
|
$
|
1,916
|
|
Exercise of stock options and release of restricted shares
|
2,851
|
|
|
29
|
|
|
Issuance of shares under stock purchase plan
|
699
|
|
|
7
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(13,139
|
)
|
|
(131
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Tax benefits from stock plans, net
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
Dividends paid ($0.72 per share)
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2015
|
182,067
|
|
|
1,821
|
|
|
Exercise of stock options and release of restricted shares
|
3,769
|
|
|
38
|
|
|
Issuance of shares under stock purchase plan
|
703
|
|
|
7
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(6,682
|
)
|
|
(67
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Tax benefits from stock plans, net
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
Dividends paid ($0.80 per share)
|
—
|
|
|
—
|
|
|
Purchase of noncontrolling interest
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2016
|
179,857
|
|
|
1,799
|
|
|
Exercise of stock options and release of restricted shares
|
4,058
|
|
|
40
|
|
|
Issuance of shares under stock purchase plan
|
682
|
|
|
7
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(8,223
|
)
|
|
(82
|
)
|
|
Stock compensation expense
|
—
|
|
|
—
|
|
|
Net earnings
|
—
|
|
|
—
|
|
|
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
Dividends paid ($0.84 per share)
|
—
|
|
|
—
|
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
Balance at December 31, 2017
|
176,374
|
|
|
$
|
1,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Additional
paid-in
capital
|
|
Retained
earnings
|
|
Accumulated other
comprehensive loss
|
|
Total
shareholders’
equity
|
|
Noncontrolling
interest
|
|
Total
equity
|
|||||||
Balance at December 31, 2014
|
$
|
1,113
|
|
|
1,903,196
|
|
|
(37,817
|
)
|
|
1,868,408
|
|
|
3,200
|
|
|
1,871,608
|
|
Exercise of stock options and release of restricted shares
|
105,085
|
|
|
—
|
|
|
—
|
|
|
105,114
|
|
|
—
|
|
|
105,114
|
|
|
Issuance of shares under stock purchase plan
|
25,843
|
|
|
—
|
|
|
—
|
|
|
25,850
|
|
|
—
|
|
|
25,850
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(176,493
|
)
|
|
(453,367
|
)
|
|
—
|
|
|
(629,991
|
)
|
|
—
|
|
|
(629,991
|
)
|
|
Stock compensation expense
|
43,415
|
|
|
—
|
|
|
—
|
|
|
43,415
|
|
|
—
|
|
|
43,415
|
|
|
Tax benefits from stock plans, net
|
1,068
|
|
|
—
|
|
|
—
|
|
|
1,068
|
|
|
—
|
|
|
1,068
|
|
|
Net earnings
|
—
|
|
|
457,223
|
|
|
—
|
|
|
457,223
|
|
|
2,274
|
|
|
459,497
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(43,421
|
)
|
|
(43,421
|
)
|
|
(669
|
)
|
|
(44,090
|
)
|
|
Dividends paid ($0.72 per share)
|
—
|
|
|
(135,673
|
)
|
|
—
|
|
|
(135,673
|
)
|
|
—
|
|
|
(135,673
|
)
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,122
|
)
|
|
(2,122
|
)
|
|
Balance at December 31, 2015
|
31
|
|
|
1,771,379
|
|
|
(81,238
|
)
|
|
1,691,993
|
|
|
2,683
|
|
|
1,694,676
|
|
|
Exercise of stock options and release of restricted shares
|
157,139
|
|
|
—
|
|
|
—
|
|
|
157,177
|
|
|
—
|
|
|
157,177
|
|
|
Issuance of shares under stock purchase plan
|
28,129
|
|
|
—
|
|
|
—
|
|
|
28,136
|
|
|
—
|
|
|
28,136
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(225,317
|
)
|
|
(112,274
|
)
|
|
—
|
|
|
(337,658
|
)
|
|
—
|
|
|
(337,658
|
)
|
|
Stock compensation expense
|
45,217
|
|
|
—
|
|
|
—
|
|
|
45,217
|
|
|
—
|
|
|
45,217
|
|
|
Tax benefits from stock plans, net
|
(2,664
|
)
|
|
—
|
|
|
—
|
|
|
(2,664
|
)
|
|
—
|
|
|
(2,664
|
)
|
|
Net earnings
|
—
|
|
|
430,807
|
|
|
—
|
|
|
430,807
|
|
|
1,726
|
|
|
432,533
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(23,354
|
)
|
|
(23,354
|
)
|
|
(389
|
)
|
|
(23,743
|
)
|
|
Dividends paid ($0.80 per share)
|
—
|
|
|
(145,123
|
)
|
|
—
|
|
|
(145,123
|
)
|
|
—
|
|
|
(145,123
|
)
|
|
Purchase of noncontrolling interest
|
107
|
|
|
|
|
|
|
107
|
|
|
(110
|
)
|
|
(3
|
)
|
|||
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,335
|
)
|
|
(1,335
|
)
|
|
Balance at December 31, 2016
|
2,642
|
|
|
1,944,789
|
|
|
(104,592
|
)
|
|
1,844,638
|
|
|
2,575
|
|
|
1,847,213
|
|
|
Exercise of stock options and release of restricted shares
|
176,285
|
|
|
—
|
|
|
—
|
|
|
176,325
|
|
|
—
|
|
|
176,325
|
|
|
Issuance of shares under stock purchase plan
|
28,760
|
|
|
—
|
|
|
—
|
|
|
28,767
|
|
|
—
|
|
|
28,767
|
|
|
Shares repurchased under provisions of stock repurchase plans
|
(258,049
|
)
|
|
(220,127
|
)
|
|
—
|
|
|
(478,258
|
)
|
|
—
|
|
|
(478,258
|
)
|
|
Stock compensation expense
|
50,908
|
|
|
—
|
|
|
—
|
|
|
50,908
|
|
|
—
|
|
|
50,908
|
|
|
Net earnings
|
—
|
|
|
489,345
|
|
|
—
|
|
|
489,345
|
|
|
1,038
|
|
|
490,383
|
|
|
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
30,628
|
|
|
30,628
|
|
|
(194
|
)
|
|
30,434
|
|
|
Dividends paid ($0.84 per share)
|
—
|
|
|
(150,495
|
)
|
|
—
|
|
|
(150,495
|
)
|
|
—
|
|
|
(150,495
|
)
|
|
Distributions of dividends to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(904
|
)
|
|
(904
|
)
|
|
Balance at December 31, 2017
|
$
|
546
|
|
|
2,063,512
|
|
|
(73,964
|
)
|
|
1,991,858
|
|
|
2,515
|
|
|
1,994,373
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||
Operating Activities:
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
490,383
|
|
|
432,533
|
|
|
459,497
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
|
||||
Provision for losses on accounts receivable
|
|
5,356
|
|
|
2,607
|
|
|
2,173
|
|
|
Deferred income tax (benefit) expense
|
|
(43,695
|
)
|
|
15,835
|
|
|
17,999
|
|
|
Stock compensation expense
|
|
50,908
|
|
|
45,217
|
|
|
43,415
|
|
|
Depreciation and amortization
|
|
49,310
|
|
|
46,796
|
|
|
46,012
|
|
|
Other
|
|
(4,382
|
)
|
|
(3,540
|
)
|
|
(24
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||
(Increase) decrease in accounts receivable
|
|
(184,771
|
)
|
|
(102,297
|
)
|
|
62,619
|
|
|
Increase (decrease) in accounts payable and accrued expenses
|
|
114,631
|
|
|
102,716
|
|
|
(84,164
|
)
|
|
Increase (decrease) in income taxes payable, net
|
|
16,264
|
|
|
(12,370
|
)
|
|
18,382
|
|
|
(Increase) decrease in other current assets
|
|
(5,365
|
)
|
|
1,988
|
|
|
653
|
|
|
Net cash from operating activities
|
|
488,639
|
|
|
529,485
|
|
|
566,562
|
|
|
Investing Activities:
|
|
|
|
|
|
|
||||
Purchase of short-term investments
|
|
(12
|
)
|
|
(54
|
)
|
|
(47,026
|
)
|
|
Proceeds from maturities of short-term investments
|
|
12
|
|
|
17
|
|
|
87,320
|
|
|
Purchase of property and equipment
|
|
(95,016
|
)
|
|
(59,316
|
)
|
|
(44,383
|
)
|
|
Proceeds from sale of property and equipment
|
|
84,405
|
|
|
229
|
|
|
258
|
|
|
Other, net
|
|
(1,074
|
)
|
|
5,928
|
|
|
(3,595
|
)
|
|
Net cash from investing activities
|
|
(11,685
|
)
|
|
(53,196
|
)
|
|
(7,426
|
)
|
|
Financing Activities:
|
|
|
|
|
|
|
||||
Proceeds from issuance of common stock
|
|
205,092
|
|
|
185,313
|
|
|
130,964
|
|
|
Repurchases of common stock
|
|
(478,258
|
)
|
|
(337,658
|
)
|
|
(629,991
|
)
|
|
Dividends paid
|
|
(150,495
|
)
|
|
(145,123
|
)
|
|
(135,673
|
)
|
|
Distributions to noncontrolling interest
|
|
(904
|
)
|
|
(1,335
|
)
|
|
(2,122
|
)
|
|
Net cash from financing activities
|
|
(424,565
|
)
|
|
(298,803
|
)
|
|
(636,822
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
24,275
|
|
|
(10,847
|
)
|
|
(41,625
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
|
76,664
|
|
|
166,639
|
|
|
(119,311
|
)
|
|
Cash and cash equivalents at beginning of year
|
|
974,435
|
|
|
807,796
|
|
|
927,107
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
1,051,099
|
|
|
974,435
|
|
|
807,796
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
||||
Cash paid for income taxes
|
|
$
|
249,704
|
|
|
254,312
|
|
|
239,367
|
|
NOTE 1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Buildings and land improvements
|
30 to 40 years
|
Building improvements
|
3 to 10 years
|
Furniture, fixtures, equipment and purchased software
|
3 to 10 years
|
NOTE 2.
|
PROPERTY AND EQUIPMENT
|
|
|
2017
|
|
2016
|
|||
Land
|
|
$
|
147,261
|
|
|
172,310
|
|
Buildings and leasehold improvements
|
|
416,597
|
|
|
467,096
|
|
|
Furniture, fixtures, equipment and purchased software
|
|
320,544
|
|
|
296,214
|
|
|
Construction in progress
|
|
61,083
|
|
|
7,604
|
|
|
Property and equipment, at cost
|
|
945,485
|
|
|
943,224
|
|
|
Less accumulated depreciation and amortization
|
|
420,282
|
|
|
406,652
|
|
|
Property and equipment, net
|
|
$
|
525,203
|
|
|
536,572
|
|
NOTE 3.
|
SHAREHOLDERS’ EQUITY
|
|
|
Cumulative shares
repurchased
|
|
Average price
per share
|
|||
Non-Discretionary Plan (1994 through 2017)
|
|
37,356
|
|
|
$
|
32.63
|
|
Discretionary Plan (2001 through 2017)
|
|
62,252
|
|
|
$
|
41.90
|
|
|
|
Number of
shares
|
|
Weighted average
grant date fair value
|
|||
Outstanding at December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
RSU granted
|
|
593
|
|
|
$
|
54.11
|
|
RSU vested
|
|
—
|
|
|
$
|
—
|
|
RSU forfeited
|
|
(12
|
)
|
|
$
|
54.04
|
|
Outstanding at December 31, 2017
|
|
581
|
|
|
$
|
54.11
|
|
|
|
Number of
shares
|
|
Weighted
average
exercise price
per share
|
|
Weighted
average
remaining
contractual life
|
|
Aggregate
intrinsic value
|
|||||
Outstanding at December 31, 2016
|
|
17,374
|
|
|
$
|
44.25
|
|
|
|
|
|
||
Options granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Options exercised
|
|
(4,020
|
)
|
|
$
|
43.86
|
|
|
|
|
|
||
Options forfeited
|
|
(328
|
)
|
|
$
|
44.23
|
|
|
|
|
|
||
Options canceled
|
|
(65
|
)
|
|
$
|
46.27
|
|
|
|
|
|
||
Outstanding at December 31, 2017
|
|
12,961
|
|
|
$
|
44.36
|
|
|
5.78
|
|
$
|
263,431
|
|
Exercisable at December 31, 2017
|
|
6,615
|
|
|
$
|
43.44
|
|
|
4.30
|
|
$
|
140,569
|
|
|
|
For the years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Dividend yield
|
|
1.50
|
%
|
|
1.70
|
%
|
|
1.60
|
%
|
|||
Volatility – stock option plans
|
|
-
|
|
|
24 - 25%
|
|
|
29 - 34%
|
|
|||
Volatility – stock purchase rights plans
|
|
14
|
%
|
|
20
|
%
|
|
20
|
%
|
|||
Risk-free interest rates
|
|
1.22
|
%
|
|
0.51 - 1.42%
|
|
|
0.30 - 2.04%
|
|
|||
Expected life (years) – stock option plans
|
|
-
|
|
|
5.5 - 6.5
|
|
|
6.41 - 7.47
|
|
|||
Expected life (years) – stock purchase rights plans
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Weighted average fair value of stock options granted during the period
|
|
-
|
|
|
$
|
9.57
|
|
|
$
|
13.44
|
|
|
Weighted average fair value of stock purchase rights granted during the period
|
|
$
|
11.69
|
|
|
$
|
10.99
|
|
|
$
|
10.45
|
|
|
|
For the years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
Stock compensation expense
|
|
$
|
50,908
|
|
|
45,217
|
|
|
43,415
|
|
Recognized tax benefit
|
|
$
|
7,029
|
|
|
8,178
|
|
|
6,010
|
|
NOTE 4.
|
BASIC AND DILUTED EARNINGS PER SHARE
|
|
|
Net earnings
attributable to
shareholders
|
|
Weighted
average
shares
|
|
Earnings
per share
|
|||||
2017
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
489,345
|
|
|
179,247
|
|
|
$
|
2.73
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
2,419
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
489,345
|
|
|
181,666
|
|
|
$
|
2.69
|
|
2016
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
430,807
|
|
|
181,282
|
|
|
$
|
2.38
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
1,422
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
430,807
|
|
|
182,704
|
|
|
$
|
2.36
|
|
2015
|
|
|
|
|
|
|
|||||
Basic earnings attributable to shareholders
|
|
$
|
457,223
|
|
|
188,941
|
|
|
$
|
2.42
|
|
Effect of dilutive potential common shares
|
|
—
|
|
|
1,282
|
|
|
—
|
|
||
Diluted earnings attributable to shareholders
|
|
$
|
457,223
|
|
|
190,223
|
|
|
$
|
2.40
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|||
Shares
|
|
19
|
|
|
9,211
|
|
|
8,330
|
|
NOTE 5.
|
INCOME TAXES
|
|
|
Federal
|
|
State
|
|
Foreign
|
|
Total
|
|||||
2017
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
101,821
|
|
|
20,490
|
|
|
149,596
|
|
|
271,907
|
|
Deferred
|
|
(42,474
|
)
|
|
(1,221
|
)
|
|
—
|
|
|
(43,695
|
)
|
|
|
|
$
|
59,347
|
|
|
19,269
|
|
|
149,596
|
|
|
228,212
|
|
2016
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
85,330
|
|
|
16,082
|
|
|
137,076
|
|
|
238,488
|
|
Deferred
|
|
16,903
|
|
|
(1,068
|
)
|
|
—
|
|
|
15,835
|
|
|
|
|
$
|
102,233
|
|
|
15,014
|
|
|
137,076
|
|
|
254,323
|
|
2015
|
|
|
|
|
|
|
|
|
|||||
Current
|
|
$
|
95,046
|
|
|
16,973
|
|
|
147,174
|
|
|
259,193
|
|
Deferred
|
|
17,631
|
|
|
368
|
|
|
—
|
|
|
17,999
|
|
|
|
|
$
|
112,677
|
|
|
17,341
|
|
|
147,174
|
|
|
277,192
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
Computed “expected” tax expense
|
|
$
|
251,508
|
|
|
240,400
|
|
|
257,841
|
|
Increase in income taxes resulting from:
|
|
|
|
|
|
|
||||
State income taxes, net of Federal income tax benefit
|
|
12,525
|
|
|
9,759
|
|
|
11,272
|
|
|
Nondeductible stock compensation expense, net
|
|
63
|
|
|
3,629
|
|
|
5,241
|
|
|
Enactment of 2017 Tax Act
|
|
(13,894
|
)
|
|
—
|
|
|
—
|
|
|
Effect of lower foreign tax rates
|
|
(25,374
|
)
|
|
—
|
|
|
—
|
|
|
Other, net
|
|
3,384
|
|
|
535
|
|
|
2,838
|
|
|
|
|
$
|
228,212
|
|
|
254,323
|
|
|
277,192
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
United States
|
|
$
|
276,714
|
|
|
243,754
|
|
|
236,932
|
|
Foreign
|
|
441,881
|
|
|
443,102
|
|
|
499,757
|
|
|
|
|
$
|
718,595
|
|
|
686,856
|
|
|
736,689
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|||
Deferred Tax Assets:
|
|
|
|
|
|||
Accrued third party obligations, deductible for taxes upon economic performance
|
|
$
|
8,075
|
|
|
15,153
|
|
Provision for doubtful accounts receivable
|
|
628
|
|
|
497
|
|
|
Excess of financial statement over tax depreciation
|
|
4,804
|
|
|
10,650
|
|
|
Deductible stock compensation expense, net
|
|
17,326
|
|
|
21,758
|
|
|
Foreign currency translation adjustment
|
|
24,448
|
|
|
57,207
|
|
|
Retained liability for cargo claims
|
|
1,062
|
|
|
1,178
|
|
|
Total gross deferred tax assets
|
|
56,343
|
|
|
106,443
|
|
|
Deferred Tax Liabilities:
|
|
|
|
|
|||
Unremitted foreign earnings, net of related foreign tax credits
|
|
43,136
|
|
|
120,170
|
|
|
Total gross deferred tax liabilities
|
|
43,136
|
|
|
120,170
|
|
|
Net deferred tax assets (liabilities)
|
|
$
|
13,207
|
|
|
(13,727
|
)
|
NOTE 6.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||
|
|
Cost
|
|
Fair Value
|
|
Cost
|
|
Fair Value
|
|||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|||||
Cash and overnight deposits
|
|
$
|
383,021
|
|
|
383,021
|
|
|
406,787
|
|
|
406,787
|
|
Corporate commercial paper
|
|
635,345
|
|
|
635,919
|
|
|
507,777
|
|
|
507,889
|
|
|
Time deposits
|
|
32,733
|
|
|
32,733
|
|
|
59,871
|
|
|
59,871
|
|
|
Total cash and cash equivalents
|
|
1,051,099
|
|
|
1,051,673
|
|
|
974,435
|
|
|
974,547
|
|
NOTE 7.
|
CREDIT ARRANGEMENTS
|
NOTE 8.
|
COMMITMENTS
|
2018
|
$
|
72,148
|
|
2019
|
57,776
|
|
|
2020
|
45,466
|
|
|
2021
|
30,925
|
|
|
2022
|
19,024
|
|
|
Thereafter
|
34,556
|
|
|
|
$
|
259,895
|
|
NOTE 9.
|
CONTINGENCIES
|
NOTE 10.
|
BUSINESS SEGMENT INFORMATION
|
|
United States
|
|
Other
North
America
|
|||
2017
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,851,395
|
|
|
256,359
|
|
Transfers between geographic areas
|
111,163
|
|
|
11,827
|
|
|
Total revenues
|
$
|
1,962,558
|
|
|
268,186
|
|
Net revenues
1
|
$
|
1,008,841
|
|
|
119,071
|
|
Operating income
|
$
|
277,821
|
|
|
38,131
|
|
Identifiable assets at year end
|
$
|
1,595,140
|
|
|
151,181
|
|
Capital expenditures
|
$
|
28,212
|
|
|
1,563
|
|
Depreciation and amortization
|
$
|
32,017
|
|
|
1,546
|
|
Equity
|
$
|
1,337,568
|
|
|
60,705
|
|
2016
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,683,006
|
|
|
226,561
|
|
Transfers between geographic areas
|
106,076
|
|
|
10,778
|
|
|
Total revenues
|
$
|
1,789,082
|
|
|
237,339
|
|
Net revenues
1
|
$
|
918,110
|
|
|
119,492
|
|
Operating income
|
$
|
250,715
|
|
|
32,530
|
|
Identifiable assets at year end
|
$
|
1,455,722
|
|
|
104,804
|
|
Capital expenditures
|
$
|
39,531
|
|
|
1,727
|
|
Depreciation and amortization
|
$
|
29,939
|
|
|
1,479
|
|
Equity
|
$
|
1,166,582
|
|
|
46,448
|
|
2015
|
|
|
|
|||
Revenues from unaffiliated customers
|
$
|
1,763,361
|
|
|
226,284
|
|
Transfers between geographic areas
|
118,884
|
|
|
13,383
|
|
|
Total revenues
|
$
|
1,882,245
|
|
|
239,667
|
|
Net revenues
1
|
$
|
906,780
|
|
|
124,381
|
|
Operating income
|
$
|
245,257
|
|
|
46,846
|
|
Identifiable assets at year end
|
$
|
1,185,671
|
|
|
111,549
|
|
Capital expenditures
|
$
|
26,807
|
|
|
3,915
|
|
Depreciation and amortization
|
$
|
29,532
|
|
|
1,331
|
|
Equity
|
$
|
986,330
|
|
|
70,932
|
|
|
|
Latin
America
|
|
North Asia
|
|
South Asia
|
|
Europe
|
|
Middle
East, Africa and
India
|
|
Elimi-
nations
|
|
Consoli-
dated
|
|||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues from unaffiliated customers
|
|
97,096
|
|
|
2,576,971
|
|
|
661,878
|
|
|
1,072,028
|
|
|
405,221
|
|
|
—
|
|
|
6,920,948
|
|
Transfers between geographic areas
|
|
14,766
|
|
|
21,405
|
|
|
22,999
|
|
|
43,296
|
|
|
20,848
|
|
|
(246,304
|
)
|
|
—
|
|
Total revenues
|
|
111,862
|
|
|
2,598,376
|
|
|
684,877
|
|
|
1,115,324
|
|
|
426,069
|
|
|
(246,304
|
)
|
|
6,920,948
|
|
Net revenues
1
|
|
58,199
|
|
|
509,235
|
|
|
163,450
|
|
|
335,702
|
|
|
121,267
|
|
|
3,424
|
|
|
2,319,189
|
|
Operating income
|
|
9,964
|
|
|
248,422
|
|
|
53,057
|
|
|
48,491
|
|
|
24,365
|
|
|
9
|
|
|
700,260
|
|
Identifiable assets at year end
|
|
55,431
|
|
|
458,152
|
|
|
137,279
|
|
|
501,711
|
|
|
215,495
|
|
|
2,619
|
|
|
3,117,008
|
|
Capital expenditures
|
|
4,612
|
|
|
3,756
|
|
|
1,688
|
|
|
53,954
|
|
|
1,231
|
|
|
—
|
|
|
95,016
|
|
Depreciation and amortization
|
|
1,277
|
|
|
5,326
|
|
|
2,215
|
|
|
5,068
|
|
|
1,861
|
|
|
—
|
|
|
49,310
|
|
Equity
|
|
26,546
|
|
|
240,721
|
|
|
94,516
|
|
|
142,971
|
|
|
123,600
|
|
|
(32,254
|
)
|
|
1,994,373
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues from unaffiliated customers
|
|
84,665
|
|
|
2,242,670
|
|
|
603,980
|
|
|
918,561
|
|
|
338,594
|
|
|
—
|
|
|
6,098,037
|
|
Transfers between geographic areas
|
|
15,037
|
|
|
21,212
|
|
|
24,251
|
|
|
41,102
|
|
|
21,876
|
|
|
(240,332
|
)
|
|
—
|
|
Total revenues
|
|
99,702
|
|
|
2,263,882
|
|
|
628,231
|
|
|
959,663
|
|
|
360,470
|
|
|
(240,332
|
)
|
|
6,098,037
|
|
Net revenues
1
|
|
56,066
|
|
|
471,275
|
|
|
171,033
|
|
|
304,429
|
|
|
123,335
|
|
|
296
|
|
|
2,164,036
|
|
Operating income
|
|
13,321
|
|
|
230,777
|
|
|
64,967
|
|
|
42,195
|
|
|
35,672
|
|
|
(14
|
)
|
|
670,163
|
|
Identifiable assets at year end
|
|
49,231
|
|
|
511,851
|
|
|
120,300
|
|
|
351,960
|
|
|
190,902
|
|
|
6,101
|
|
|
2,790,871
|
|
Capital expenditures
|
|
1,038
|
|
|
3,889
|
|
|
3,038
|
|
|
7,554
|
|
|
2,539
|
|
|
—
|
|
|
59,316
|
|
Depreciation and amortization
|
|
1,187
|
|
|
5,455
|
|
|
2,177
|
|
|
4,576
|
|
|
1,983
|
|
|
—
|
|
|
46,796
|
|
Equity
|
|
27,164
|
|
|
327,672
|
|
|
91,983
|
|
|
108,430
|
|
|
112,633
|
|
|
(33,699
|
)
|
|
1,847,213
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues from unaffiliated customers
|
|
94,229
|
|
|
2,557,398
|
|
|
677,628
|
|
|
958,827
|
|
|
338,905
|
|
|
—
|
|
|
6,616,632
|
|
Transfers between geographic areas
|
|
19,158
|
|
|
21,722
|
|
|
25,018
|
|
|
42,787
|
|
|
21,322
|
|
|
(262,274
|
)
|
|
—
|
|
Total revenues
|
|
113,387
|
|
|
2,579,120
|
|
|
702,646
|
|
|
1,001,614
|
|
|
360,227
|
|
|
(262,274
|
)
|
|
6,616,632
|
|
Net revenues
1
|
|
65,017
|
|
|
493,235
|
|
|
179,110
|
|
|
308,301
|
|
|
110,953
|
|
|
—
|
|
|
2,187,777
|
|
Operating income
|
|
19,656
|
|
|
245,854
|
|
|
69,643
|
|
|
65,024
|
|
|
29,204
|
|
|
—
|
|
|
721,484
|
|
Identifiable assets at year end
|
|
48,678
|
|
|
446,914
|
|
|
127,014
|
|
|
421,590
|
|
|
221,835
|
|
|
2,326
|
|
|
2,565,577
|
|
Capital expenditures
|
|
1,756
|
|
|
2,203
|
|
|
2,383
|
|
|
5,222
|
|
|
2,097
|
|
|
—
|
|
|
44,383
|
|
Depreciation and amortization
|
|
1,041
|
|
|
5,425
|
|
|
2,110
|
|
|
4,931
|
|
|
1,642
|
|
|
—
|
|
|
46,012
|
|
Equity
|
|
33,161
|
|
|
253,097
|
|
|
99,220
|
|
|
154,174
|
|
|
130,105
|
|
|
(32,343
|
)
|
|
1,694,676
|
|
Years ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||
Revenues:
|
|
|
|
|
|
|
||||
Total revenues
|
|
$
|
6,920,948
|
|
|
6,098,037
|
|
|
6,616,632
|
|
Expenses:
|
|
|
|
|
|
|
||||
Airfreight services
|
|
2,126,761
|
|
|
1,752,167
|
|
|
1,987,690
|
|
|
Ocean freight and ocean services
|
|
1,543,740
|
|
|
1,378,699
|
|
|
1,648,993
|
|
|
Customs brokerage and other services
|
|
931,258
|
|
|
803,135
|
|
|
792,172
|
|
|
Net revenues
|
|
$
|
2,319,189
|
|
|
2,164,036
|
|
|
2,187,777
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Total revenues
|
|
31
|
%
|
|
31
|
%
|
|
32
|
%
|
Net revenues
|
|
18
|
%
|
|
18
|
%
|
|
19
|
%
|
Identifiable assets at year end
|
|
11
|
%
|
|
15
|
%
|
|
13
|
%
|
Equity
|
|
8
|
%
|
|
13
|
%
|
|
10
|
%
|
NOTE 11.
|
QUARTERLY RESULTS (UNAUDITED)
|
|
|
1st
|
|
2nd
|
|
3rd
|
|
4th
|
|||||
2017
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,545,132
|
|
|
1,672,279
|
|
|
1,802,166
|
|
|
1,901,371
|
|
Net revenues
|
|
527,605
|
|
|
563,633
|
|
|
599,142
|
|
|
628,809
|
|
|
Net earnings
|
|
93,567
|
|
|
108,755
|
|
|
120,606
|
|
|
167,455
|
|
|
Net earnings attributable to shareholders
|
|
93,264
|
|
|
108,851
|
|
|
120,263
|
|
|
166,967
|
|
|
Diluted earnings attributable to shareholders per share
|
|
0.51
|
|
|
0.60
|
|
|
0.66
|
|
|
0.92
|
|
|
Basic earnings attributable to shareholders per share
|
|
0.52
|
|
|
0.60
|
|
|
0.67
|
|
|
0.94
|
|
|
2016
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
$
|
1,418,472
|
|
|
1,475,164
|
|
|
1,562,394
|
|
|
1,642,007
|
|
Net revenues
|
|
517,069
|
|
|
553,117
|
|
|
545,259
|
|
|
548,591
|
|
|
Net earnings
|
|
97,047
|
|
|
116,439
|
|
|
107,949
|
|
|
111,098
|
|
|
Net earnings attributable to shareholders
|
|
96,584
|
|
|
116,052
|
|
|
107,581
|
|
|
110,590
|
|
|
Diluted earnings attributable to shareholders per share
|
|
0.53
|
|
|
0.63
|
|
|
0.59
|
|
|
0.61
|
|
|
Basic earnings attributable to shareholders per share
|
|
0.53
|
|
|
0.64
|
|
|
0.59
|
|
|
0.61
|
|
Exhibit Number
|
|
Description
|
|
|
|
|
Expeditors' Restated Articles of Incorporation and the Articles of Amendment thereto
|
|
|
|
|
|
Subsidiaries of the Registrant
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
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
|
Name
|
Address
|
John M. Kaiser
|
1927 Eight Avenue West
Seattle, Washington 98119 |
Mike Krummel
|
2912 124th Avenue Northeast
Bellevue, Washington 98119 |
Susan R. Kaiser
|
1927 Eighth Avenue West
Seattle, Washington 98119 |
Name
|
Address
|
Charles A. Johnson, Jr.
|
10655 Northeast Fourth
Suite 506 Seattle Trust Building Bellevue, Washington 98004 |
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Gary E. Fowler
|
|
|
Gary E. Fowler
|
|
|
Secretary
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Gary E. Fowler
|
|
|
Gary E. Fowler
|
|
|
Vice President and Chief Financial Officer
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Jeffrey J. King
|
|
|
Jeffrey J. King
|
|
|
Senior Vice President, General Counsel and Secretary
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Jeffrey J. King
|
|
|
Jeffrey J. King
|
|
|
Senior Vice President, General Counsel and Secretary
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Jeffrey J. King
|
|
|
Jeffrey J. King
|
|
|
Senior Vice President, General Counsel and Secretary
|
(1)
|
Authorized Capital
. The total number of shares which the Corporation is authorized to issue is six hundred forty-two million (642,000,000), consisting of six hundred forty million (640,000,000) shares of Common Stock, having a par value of $.01, and two million (2,000,000) shares of Preferred Stock, having a par value of $.01. Shares shall be issued at such prices as shall be determined by the Board of Directors. The Common Stock is subject to the rights and preferences of the Preferred Stock as hereinafter set forth.
|
EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
|
||
|
|
|
|
By:
|
/s/ Jeffrey J. King
|
|
|
Jeffrey J. King
|
|
|
Senior Vice President, General Counsel and Secretary
|
Subsidiary (1)(2)(3)
|
|
State or Country of Organization
|
Beijing Kang Jie Kong International Cargo Agent Co., Ltd.
|
|
People's Republic of China
|
Cargo Signal Solutions, LLC
|
|
Washington
|
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 B.V.
|
|
Netherlands
|
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 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 Company 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
|
Expeditors Vietnam Company Limited
|
|
Vietnam
|
P.T. Expeditors Indonesia (8)
|
|
Indonesia
|
(1)
|
For purposes of this list, if Expeditors owns directly or indirectly a controlling interest in the voting securities of any entity or if Expeditors has unilateral control over the assets and operations of any entity, such entity is deemed to be a subsidiary. Except as otherwise noted, Expeditors 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 Expeditors' ownership percentage.
|
(2)
|
Each subsidiary does business in its own name and in the name of Expeditors.
|
(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)
|
Expeditors has 99.5% controlling interest in subsidiary.
|
(5)
|
Expeditors has 75% controlling interest in subsidiary.
|
(6)
|
Expeditors has 61% controlling interest in subsidiary.
|
(7)
|
Expeditors has 80% controlling interest in subsidiary.
|
(8)
|
Expeditors has a 95% controlling interest in subsidiary.
|
/s/ KPMG LLP
|
Seattle, Washington
|
February 23, 2018
|
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):
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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/ JEFFREY S. MUSSER
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Jeffrey S. Musser
President, Chief Executive Officer and Director
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1.
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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):
|
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.
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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 23, 2018
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/s/ Jeffrey S. Musser
|
|
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Jeffrey S. Musser
|
|
|
President, Chief Executive Officer and Director
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February 23, 2018
|
|
/s/ Bradley S. Powell
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|
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Bradley S. Powell
|
|
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Senior Vice President and Chief Financial Officer
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