10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 0-13468

___________________________________________

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

___________________________________________

Washington	91-1069248
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
1015 Third Avenue, 12th Floor, Seattle, Washington	98104
(Address of principal executive offices)	(Zip Code)

(206) 674-3400

(Registrant’s telephone number, including area code)

______________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o
Emerging growth company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.				o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes o No x

At May 1, 2017, the number of shares outstanding of the issuer’s Common Stock was 180,164,709.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	March 31, 2017			December 31, 2016
Current Assets:
Cash and cash equivalents	$	1,156,043		$	974,435
Accounts receivable, less allowance for doubtful accounts of $9,911 at March 31, 2017 and $9,247 at December 31, 2016	1,126,488			1,190,130
Other	119,265			54,014
Total current assets	2,401,796			2,218,579
Property and equipment, less accumulated depreciation and amortization of $394,154 at March 31, 2017 and $406,652 at December 31, 2016	463,604			536,572
Goodwill	7,927			7,927
Other assets, net	29,392			27,793
Total assets	$	2,902,719		$	2,790,871
Current Liabilities:
Accounts payable	$	701,122		$	726,571
Accrued expenses, primarily salaries and related costs	205,255			185,502
Federal, state and foreign income taxes	20,427			17,858
Total current liabilities	926,804			929,931
Deferred Federal and state income taxes	24,195			13,727
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued	—			—
Common stock, par value $0.01 per share. Issued and outstanding 179,924 shares at March 31, 2017 and 179,857 shares at December 31, 2016	1,800			1,799
Additional paid-in capital	4,721			2,642
Retained earnings	2,038,053			1,944,789
Accumulated other comprehensive loss	(95,678		)	(104,592		)
Total shareholders’ equity	1,948,896			1,844,638
Noncontrolling interest	2,824			2,575
Total equity	1,951,720			1,847,213
Total liabilities and equity	$	2,902,719		$	2,790,871

See accompanying notes to condensed consolidated financial statements.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

	Three months ended
	March 31,
	2017		2016
Revenues:
Airfreight services	$	615,545	$	560,853
Ocean freight and ocean services	493,759		454,192
Customs brokerage and other services	435,828		403,427
Total revenues	1,545,132		1,418,472
Operating Expenses:
Airfreight services	443,404		388,777
Ocean freight and ocean services	366,063		323,020
Customs brokerage and other services	208,060		189,606
Salaries and related costs	292,580		283,355
Rent and occupancy costs	28,130		26,859
Depreciation and amortization	11,927		11,329
Selling and promotion	10,915		9,432
Other	37,939		34,268
Total operating expenses	1,399,018		1,266,646
Operating income	146,114		151,826
Other Income (Expense):
Interest income	2,741		2,779
Other, net	298		879
Other income (expense), net	3,039		3,658
Earnings before income taxes	149,153		155,484
Income tax expense	55,586		58,437
Net earnings	93,567		97,047
Less net earnings attributable to the noncontrolling interest	303		463
Net earnings attributable to shareholders	$	93,264	$	96,584
Diluted earnings attributable to shareholders per share	$	0.51	$	0.53
Basic earnings attributable to shareholders per share	$	0.52	$	0.53
Weighted average diluted shares outstanding	182,094		183,018
Weighted average basic shares outstanding	180,062		182,010

See accompanying notes to condensed consolidated financial statements.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2017		2016
Net earnings	$	93,567	$	97,047
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $4,876 and $5,187 for the three months ended March 31, 2017 and 2016	8,860		9,580
Other comprehensive income	8,860		9,580
Comprehensive income	102,427		106,627
Less comprehensive income attributable to the noncontrolling interest	249		577
Comprehensive income attributable to shareholders	$	102,178	$	106,050

See accompanying notes to condensed consolidated financial statements.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2017			2016
Operating Activities:
Net earnings	$	93,567		$	97,047
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses on accounts receivable	931			578
Deferred income tax expense	5,593			9,896
Stock compensation expense	10,623			10,831
Depreciation and amortization	11,927			11,329
Other, net	(351		)	36
Changes in operating assets and liabilities:
Decrease in accounts receivable	75,454			112,710
Decrease in accounts payable and accrued expenses	(18,324		)	(15,344		)
Increase in income taxes payable, net	19,824			10,925
Increase in other current assets	(3,565		)	(2,055		)
Net cash from operating activities	195,679			235,953
Investing Activities:
Purchase of property and equipment	(12,761		)	(14,035		)
Other, net	(671		)	(559		)
Net cash from investing activities	(13,432		)	(14,594		)
Financing Activities:
Proceeds from issuance of common stock	45,365			41,635
Repurchases of common stock	(53,908		)	(70,292		)
Net cash from financing activities	(8,543		)	(28,657		)
Effect of exchange rate changes on cash and cash equivalents	7,904			13,419
Increase in cash and cash equivalents	181,608			206,121
Cash and cash equivalents at beginning of period	974,435			807,796
Cash and cash equivalents at end of period	$	1,156,043		$	1,013,917
Taxes Paid:
Income taxes	$	29,146		$	37,984

See accompanying notes to condensed consolidated financial statements.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(In thousands, except per share data)

(Unaudited)

Note 1. Summary of Significant Accounting Policies

A. Basis of Presentation

Expeditors International of Washington, Inc. (the Company) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, industrial and manufacturing companies around the world.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Form 10-K as filed with the Securities and Exchange Commission on February 23, 2017.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. Certain prior year amounts have been reclassified to conform to the 2017 presentation.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $9,911 as of March 31, 2017 and $9,247 as of December 31, 2016. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of liabilities for the portion of the related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

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Note 2. Share-Based Compensation

Historically, the Company has provided compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. The Company has historically granted the majority of its options during the second quarter of each fiscal year and no options were granted in the three months ended March 31, 2017 and 2016. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and none were issued in the three-month periods ended March 31, 2017 and 2016.

Subsequent to the end of the quarter, on May 2, 2017, shareholders approved the 2017 Omnibus Incentive Plan (2017 Plan), which made available 2.5 million shares of the Company's common stock to be issued under all award types allowed by the 2017 Plan. In May 2017, the Company awarded restricted stock units to certain employees and performance stock units to its Chief Executive Officer. The Company does not plan to grant stock options in 2017.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the stock awards' vesting periods as salaries and related costs.

Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. Also, the Company has elected to continue to estimate forfeitures expected to occur in determining compensation cost to be recognized in each period.

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended
	March 31,
	2017		2016
Stock compensation expense	$	10,623	$	10,831
Recognized tax benefit	$	2,213	$	1,730

Note 3. Basic and Diluted Earnings per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders:

	Three months ended
	March 31,
(Amounts in thousands, except per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2017
Basic earnings attributable to shareholders	$	93,264	180,062	$	0.52
Effect of dilutive potential common shares	—		2,032	—
Diluted earnings attributable to shareholders	$	93,264	182,094	$	0.51
2016
Basic earnings attributable to shareholders	$	96,584	182,010	$	0.53
Effect of dilutive potential common shares	—		1,008	—
Diluted earnings attributable to shareholders	$	96,584	183,018	$	0.53

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The following potential common shares have been excluded from the computation of diluted earnings per share because the effect would have been antidilutive:

	Three months ended
	March 31,
	2017	2016
Shares	3,751	9,414

Note 4. Components of Equity

The components of equity for the three months ended March 31,2017 and 2016 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2016	$	1,844,638		2,575		1,847,213
Exercise of stock options	45,365			—		45,365
Shares repurchased under provisions of stock repurchase plans	(53,908		)	—		(53,908	)
Stock compensation expense	10,623			—		10,623
Net earnings	93,264			303		93,567
Other comprehensive income (loss)	8,914			(54	)	8,860
Balance at March 31, 2017	$	1,948,896		2,824		1,951,720
Balance at December 31, 2015	$	1,691,993		2,683		1,694,676
Exercise of stock options	41,635			—		41,635
Shares repurchased under provisions of stock repurchase plans	(70,292		)	—		(70,292	)
Stock compensation expense	10,831			—		10,831
Tax benefits from stock plans, net	(966		)	—		(966	)
Net earnings	96,584			463		97,047
Other comprehensive income	9,466			114		9,580
Balance at March 31, 2016	$	1,779,251		3,260		1,782,511

The Company has a Non-Discretionary Stock Repurchase Plan to repurchase shares from the proceeds of stock option exercises and employee stock purchases. During the three-month periods ended March 31, 2017 and 2016, 954 and 423 shares were repurchased at an average price of $56.49 and $47.60 per share, respectively.

The Company also has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding stock down to 170 million shares of common stock. No shares were purchased during the three-month period ended March 31, 2017, and 1,048 shares were repurchased at an average price of $47.87 per share during the first quarter of 2016.

Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, for all the periods presented.

Subsequent to the end of the first quarter, on May 2, 2017, the Board of Directors declared a semi-annual dividend of $0.42 per share payable on June 15, 2017 to shareholders of record as of June 1, 2017.

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Note 5. Assets Held for Sale

In January 2017, the Company formally approved a plan to sell land and buildings located in Miami, Florida. The decision to sell these assets was largely based upon changes in local operational requirements and the Company's intended use of the property. The net book value of the property assets is $80 million, and is reported within the United States segment. In May 2017, the Company entered into an agreement for the sale. The Company expects the sale to close in the second or third quarter of 2017 at a selling price which, after selling costs, will exceed the net book value. As of March 31, 2017, these assets are being reported as held for sale and are classified in other current assets.

Note 6. Fair Value of Financial Instruments

The Company’s financial instruments, other than cash, consist primarily of cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents. Cash and cash equivalents consist of the following:

	March 31, 2017			December 31, 2016
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	424,861	424,861	406,787	406,787
Corporate commercial paper	669,046		669,287	507,777	507,889
Time deposits	62,136		62,136	59,871	59,871
Total cash and cash equivalents	$	1,156,043	1,156,284	974,435	974,547

The fair value of corporate commercial paper and time deposits is based on the use of market interest rates for identical or similar assets (Level 2 fair value measurement).

Note 7. Contingencies

The Company is involved in claims, lawsuits, government investigations and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal advisors, none of these matters are expected to have a significant effect on the Company's operations, cash flows or financial position. As of March 31, 2017, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations, cash flows or financial position. At this time, the Company is unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.

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Note 8. Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, net revenues¹, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin.

Financial information regarding the Company’s operations by geographic area is as follows:

(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 March 31, 2017:
Revenues from unaffiliated customers	$	426,019	59,899	22,103	566,428	147,240	231,457	91,986	—		1,545,132
Transfers between geographic areas	24,313		2,639	3,635	5,051	5,431	9,322	4,964	(55,355	)	—
Total revenues	$	450,332	62,538	25,738	571,479	152,671	240,779	96,950	(55,355	)	1,545,132
Net revenues1	$	230,785	25,793	14,916	111,833	37,995	75,958	29,731	594		527,605
Operating income	$	52,346	5,051	3,451	53,352	13,224	11,646	7,043	1		146,114
Identifiable assets at period end	$	1,536,520	106,068	50,344	514,509	122,765	379,853	188,098	4,562		2,902,719
Capital expenditures	$	5,242	234	255	1,240	373	5,078	339	—		12,761
Depreciation and amortization	$	7,753	372	320	1,320	531	1,171	460	—		11,927
Equity	$	1,192,601	51,812	27,248	371,152	105,726	118,211	119,627	(34,657	)	1,951,720
Three months ended March 31, 2016:
Revenues from unaffiliated customers	$	407,826	52,106	20,064	497,232	136,418	221,897	82,929	—		1,418,472
Transfers between geographic areas	26,034		2,700	3,601	5,096	5,806	10,361	5,394	(58,992	)	—
Total revenues	$	433,860	54,806	23,665	502,328	142,224	232,258	88,323	(58,992	)	1,418,472
Net revenues1	$	220,698	27,378	13,733	110,791	39,518	74,541	30,407	3		517,069
Operating income	$	48,205	7,291	3,852	55,218	15,691	12,253	9,313	3		151,826
Identifiable assets at period end	$	1,236,896	119,258	56,334	455,973	133,940	438,711	216,576	3,852		2,661,540
Capital expenditures	$	8,137	311	485	1,085	655	2,119	1,243	—		14,035
Depreciation and amortization	$	7,332	364	253	1,319	512	1,098	451	—		11,329
Equity	$	978,426	79,312	37,325	300,188	115,606	167,726	137,112	(33,184	)	1,782,511

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¹Net revenues are a non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2017		2016
Total revenues	$	1,545,132	$	1,418,472
Expenses:
Airfreight services	443,404		388,777
Ocean freight and ocean services	366,063		323,020
Customs brokerage and other services	208,060		189,606
Net revenues	$	527,605	$	517,069

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995; CERTAIN CAUTIONARY STATEMENTS

Certain portions of this report on Form 10-Q including the sections entitled “Overview,” "Expeditors' Culture and Strategy," "International Trade and Competition," "Seasonality," “Critical Accounting Estimates,” "Recent Accounting Pronouncements," “Results of Operations,” “Currency and Other Risk Factors” and “Liquidity and Capital Resources” contain forward-looking statements. Words such as "will likely result", "are expected to", "would expect", "would not expect", "will continue", "is anticipated", "estimate", "project", "plan", "believe", "probable", "reasonably possible", "may", "could", "should", "intends", "foreseeable future" and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, our anticipated growth and trends in the Company's businesses, and other characterizations of future events or circumstances are forward-looking statements. These statements must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. Attention should be given to the factors identified and discussed in the Company's annual report on Form 10-K filed on February 23, 2017.

Overview

Expeditors International of Washington, Inc. (herein referred to as "Expeditors," the "Company," "we," "us," "our") is a global logistics company. Our services include air and ocean freight consolidation and forwarding, customs clearance, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, cargo insurance and other logistics solutions. We do not compete for overnight courier or small parcel business. As a non-asset based carrier, we do not own or operate transportation assets.

We derive our revenues from three principal sources: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. These are the revenue categories presented in our financial statements.

We generate the major portion of our air and ocean freight revenues by purchasing transportation services on a wholesale basis from direct (asset-based) carriers and reselling those services to our customers on a retail basis. The difference between the rate billed to our customers (the sell rate) and the rate we pay to the carrier (the buy rate) is termed “net revenue” (a non-GAAP measure), “yield” or “margin.” By consolidating shipments from multiple customers and concentrating our buying power, we are able to negotiate favorable buy rates from the direct carriers, while at the same time offering lower sell rates than customers would otherwise be able to negotiate themselves. The most significant drivers of changes in gross revenues and related transportation expenses are volume, sell rates and buy rates. Volume has a similar effect on the change in both gross revenues and related transportation expenses in each of our three primary sources of revenue.

In most cases we act as an indirect carrier. When acting as an indirect carrier, we issue a House Airway Bill (HAWB), a House Ocean Bill of Lading (HOBL) or a House Seaway Bill to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, we receive a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments. In these transactions, we evaluate whether it is appropriate to record the gross or net amount as revenue. Generally, revenue is recorded on a gross basis when we are the primary obligor, are obligated to compensate direct carriers for services performed regardless of whether customers accept the service, have latitude in establishing price, have discretion in selecting the direct carrier, have credit risk or have several but not all of these indicators. Revenue is generally recorded on a net basis where we are not primarily obligated and do not have latitude in establishing prices. Such amounts earned are determined using a fixed fee, a per unit of activity fee or a combination thereof.

For revenues earned in other capacities, for instance, when we do not issue a HAWB, a HOBL or a House Seaway Bill or otherwise act solely as an agent for the shipper, only the commissions and fees earned for such services are included in revenues. In these transactions, we are not a principal and report only commissions and fees earned in revenue.

Customs brokerage and other services involve providing services at destination, such as helping customers clear shipments through customs by preparing and filing required documentation, calculating and providing for payment of duties and other taxes on behalf of customers as well as arranging for any required inspections by governmental agencies, and arranging for delivery. These are complicated functions requiring technical knowledge of customs rules and regulations in the multitude of countries in which we have offices.

We manage our company along five geographic areas of responsibility: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR). Each area is divided into sub-regions which are composed of operating units with individual profit and loss responsibility. Our business involves shipments between operating units and typically touches more than one geographic area. The nature of the international logistics business necessitates a high degree of communication and

12

cooperation among operating units. Because of this inter-relationship between operating units, it is very difficult to examine any one geographic area and draw meaningful conclusions as to its contribution to our overall success on a stand-alone basis.

Our operating units share revenue using the same arms-length pricing methodologies that we use when our offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. Our strategy closely links compensation with operating unit profitability. Individual success is closely linked to cooperation with other operating units within our network.

The mix of services varies by segment based primarily on the import or export orientation of local operations in each of our regions. In accordance with our revenue recognition policy (see Note 1. E. to the consolidated financial statements in our annual report on Form 10-K filed on February 23, 2017), almost all freight revenues and related expenses are recorded at origin and shipment profits are split between origin and destination offices by recording a commission fee or profit share revenue at destination and a corresponding commission or profit share expense as a component of origin consolidation costs.

Expeditors' Culture and Strategy

From the inception of our company, management has believed that the elements required for a successful global service organization can only be assured through recruiting, training, and ultimately retaining superior personnel. We believe that our greatest challenge is now and always has been perpetuating a consistent global corporate culture which demands:

• Total dedication, first and foremost, to providing superior customer service;

• Compliance with our policies and procedures and government regulations;

• Aggressive marketing of all of our 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 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.

We reinforce these values with a compensation system that rewards employees for profitably managing the things they can control. This compensation system has been in place since we became a publicly traded company. There is no limit to how much a key manager can be compensated for success. We believe in a “real world” environment where the employees of our operating units are held accountable for the profit implications of their decisions. If these decisions result in operating losses, management generally must make up these losses with future operating profits, in the aggregate, before any cash incentive compensation can be earned. Executive management, in limited circumstances, makes exceptions at the branch operating unit level. At the same time, our policies, processes and relevant training focus on such things as cargo management, risk mitigation, compliance, accounts receivable collection, cash flow and credit soundness in an attempt to help managers avoid the kinds of errors that might end a career.

We believe that failure to perpetuate our unique culture on a self-sustained basis throughout our organization quite possibly provides a greater threat to our continued success than any external force, which likely would be largely beyond our control. We strongly believe that it is nearly impossible to predict events that, individually or in the aggregate, could have a positive or a negative impact on our future operations. As a result, management's focus is on building and maintaining a global corporate culture and an environment where well-trained employees and managers are prepared to identify and react to changes as they develop and thereby help us adapt and thrive as major trends emerge.

Our business growth strategy emphasizes a focus on the right markets and, within each market, on the right customers to drive profitable business growth. Expeditors' teams are aligned on the specific markets of its focused priorities; on the targeted accounts within those markets; and on ways that we can continue to differentiate ourselves from our competitors.

Our ability to provide services to customers is highly dependent on good working relationships with a variety of entities including airlines, ocean carriers, ground transportation providers and governmental agencies. The significance of maintaining acceptable working relationships with these entities has gained increased importance as a result of ongoing concern over terrorism, security, changes in governmental regulation and oversight of international trade. A good reputation helps to develop practical working understandings that will assist in meeting security requirements while minimizing potential international trade obstacles, especially as governments promulgate new regulations and increase oversight and enforcement of new and existing laws. We consider our current working relationships with these entities to be satisfactory.

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Our business is also highly dependent on the financial stability and operational capabilities of the carriers we utilize. Many air and ocean carriers are highly leveraged with debt. Moreover, certain ocean carriers are facing significant liquidity challenges. This situation requires that we be selective in determining which carriers to utilize. Further changes in the financial stability, operating capabilities and capacity of asset-based carriers, space allotments available from carriers, governmental regulations, and/or trade accords could adversely affect our business in unpredictable ways.

International Trade and Competition

We operate in over 60 countries in the competitive global logistics industry and our activities are closely tied to the global economy. International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, and laws and policies relating to tariffs, trade restrictions, foreign investments and taxation. Periodically, governments consider a variety of changes to current tariffs and trade restrictions and accords. We cannot predict which, if any, of these proposals may be adopted or the effects the adoption of any such proposal will have on our business. Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies concerning international trade, our business may also be negatively affected by recent political developments and changes in government personnel or policies in the United States and other countries, as well as economic turbulence, political unrest and security concerns in the nations in which we conduct business and the future impact that these events may have on international trade and oil prices.

The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. Consistent with continuing uncertainty in global trade and economic conditions, concerns over volatile fuel costs, disruptions in port services, political unrest and fluctuating currency exchange rates, our pricing and terms continue to be pressured by customers, carriers and service providers. We expect these operating and competitive conditions to continue.

Ocean carriers have incurred substantial operating losses in recent years, and many are highly leveraged with debt. These financial challenges resulted in the 2016 bankruptcy of one of the larger carriers in the market, as well as multiple mergers and acquisitions, as carriers pursue scale and market share in an effort to reduce operating costs and improve their financial results. Additionally, while the overall global volumes have increased slightly over recent years, many carriers continue to take delivery of new and larger ships, which has created excess capacity. Consequently, when the market experiences seasonal peaks or any sort of disruption, the carriers react by increasing their pricing as quickly as possible. This carrier behavior creates pricing volatility that could impact Expeditors' ability to maintain historical unitary profitability.

There is uncertainty as to how changes in oil prices will impact future buy rates. Because fuel is an integral part of carriers' costs and impacts both our cargo space buy rates and sell rates to customers, we would expect our gross revenues and costs to be impacted as carriers adjust rates for the effect of changing fuel prices. To the extent that we are unable to pass through any increases to our customers, this could adversely affect our net revenues.

The global economic environment and trade growth remain uncertain. We cannot predict what impact this may have on our operating results, freight volumes, pricing, changes in consumer demand, carrier stability and capacity, customers’ abilities to pay or on changes in competitors' behavior. Additionally, we cannot predict the direct or indirect impact that changes in consumer purchasing behavior, such as on-line shopping, could have on our business.

Seasonality

Historically, our operating results have been subject to seasonal trends with the first quarter being the weakest and the third and fourth quarters being the strongest; however, there is no assurance this seasonal trend will occur in the future. This pattern has been the result of, or influenced by, numerous factors, including weather patterns, national holidays, consumer demand, new product launches, economic conditions and a myriad of other similar and subtle forces. In addition, this historical quarterly trend has been influenced by the growth and diversification of our international network and service offerings.

A significant portion of our revenues are derived from customers in the retail and consumer 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. We cannot accurately forecast many of these factors, nor can we estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns will continue in future periods.

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Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and judgments. We base our estimates on historical experience and on assumptions that we believe are reasonable. Our critical accounting estimates are discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our annual report on Form 10-K for the year ended December 31, 2016, filed on February 23, 2017. There have been no material changes to the critical accounting estimates previously disclosed in that report.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending existing revenue recognition guidance and requiring related detailed disclosures to enable users of financial statements to understand the nature, amount, timing and uncertainty of our revenues and cash flows arising from contracts with customers. This ASU is effective for us beginning on January 1, 2018. We formed a cross-functional project team that is in the process of evaluating the adoption impacts of the ASU for each of our products and services. This process, though underway, is not yet completed and our understanding of the future adoption impacts, including any potential changes related to principal and agent determinations or the timing of revenue recognized, on our consolidated financial statements and related disclosures of the ASU is not yet complete. Our project team is also assessing how our current processes and systems may be impacted by adoption. We have yet to decide whether we will adopt under a cumulative effect or retrospective method. At this time, based on the nature of our operations, we do not believe that the adoption of the ASU will have a material impact on our results of operations, financial position and cash flows once implemented. However, we have not yet completed our full assessment. We expect to complete our assessment of the impact towards the end of 2017.

In February 2016, the FASB issued an ASU changing the accounting for leases and including a requirement to record all leases on the consolidated balance sheet as assets and liabilities. The ASU will be effective for us beginning on January 1, 2019 and will be adopted using a modified retrospective transition. Adoption of the ASU will impact our consolidated balance sheets as future minimum lease payments under noncancelable leases totaled approximately $210 million as of March 31, 2017. We are currently evaluating the full impact that the adoption of this ASU will have on our consolidated financial statements and related disclosures.

Results of Operations

The following table shows the revenues and directly related expenses for our principal services and total net revenues (a non-GAAP measure calculated as revenues less directly related operating expenses attributable to our principal services) and our expenses for the three-month periods ended March 31, 2017 and 2016, expressed as percentages of net revenues. Management believes that net revenues are a better measure than total revenues when analyzing and discussing management's effectiveness in managing our principal services since total revenues earned by Expeditors as a freight consolidator include the carriers’ charges to us for carrying the shipment, whereas revenues earned by Expeditors in our other capacities include primarily the commissions and fees actually earned by us. Net revenue is one of our primary operational and financial measures and demonstrates our ability to manage sell rates to customers with our ability to concentrate and leverage our purchasing power through effective consolidation of shipments from multiple customers utilizing a variety of transportation carriers and optimal routings. Using net revenue also provides a commonality for comparison among various services.

The table and the accompanying discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto in this quarterly report.

	Three months ended March 31,
	2017				2016
	Amount		Percent of net revenues		Amount		Percent of net revenues
(in thousands)
Airfreight services:
Revenues	$	615,545			$	560,853
Expenses	443,404				388,777
Net revenues	172,141		33	%	172,076		33	%
Ocean freight services and ocean services:
Revenues	493,759				454,192
Expenses	366,063				323,020
Net revenues	127,696		24		131,172		25
Customs brokerage and other services:
Revenues	435,828				403,427
Expenses	208,060				189,606
Net revenues	227,768		43		213,821		42
Total net revenues	527,605		100		517,069		100
Overhead expenses:
Salaries and related costs	292,580		55		283,355		55
Other	88,911		17		81,888		16
Total overhead expenses	381,491		72		365,243		71
Operating income	146,114		28		151,826		29
Other income (expense), net	3,039		—		3,658		1
Earnings before income taxes	149,153		28		155,484		30
Income tax expense	55,586		10		58,437		11
Net earnings	93,567		18		97,047		19
Less net earnings attributable to the noncontrolling interest	303		—		463		—
Net earnings attributable to shareholders	$	93,264	18	%	$	96,584	19	%

Airfreight services:

Airfreight services revenues increased 10% in the first quarter of 2017, as compared with the same period for 2016, primarily due to a 16% increase in tonnage that was partially offset by lower sell rates in response to competitive market conditions. Airfreight services expenses increased 14% in the first quarter of 2017, principally as a result of the tonnage growth.

Airfreight services net revenues remained flat in the first quarter of 2017, as compared with the same period for 2016. This was principally due to the 16% increase in tonnage, offset by a 17% decrease in net revenue per kilo. Average net revenue per kilo declined in most regions primarily due to competitive market conditions. Additionally, carriers in North Asia increased pricing as a result of higher demand relative to available capacity. North America and North Asia net revenues increased by 2% and 1%, respectively, while tonnage increased 12% and 21%. South Asia and Europe net revenues decreased 7% and 2%, respectively, despite tonnage increases of 22% and 7%, due to lower average sell rates.

The global airfreight market is experiencing imbalances between carrier capacity and demand in certain lanes. Customers remain focused on improving supply-chain efficiency, reducing overall logistics costs by negotiating lower rates and utilizing ocean freight whenever possible. We expect these trends to continue in conjunction with carriers' efforts to manage available capacity. However, this could be affected by new product launches during periods that have historically experienced higher demands. Historically, we have experienced lower airfreight margins in the fourth quarter as seasonal volumes increase and carriers correspondingly increase buy rates. These events, should they continue to occur, could create a higher degree of volatility in volumes and ultimately buy and sell rates.

Ocean freight and ocean services:

Ocean freight consolidation, direct ocean forwarding and order management are the three basic services that constitute and are collectively referred to as ocean freight and ocean services. Ocean freight and ocean services revenues increased 9% for the three-month period ended March 31, 2017, as compared with the same period in 2016, primarily due to a 7% increase in container volume and higher average sell rates to customers. Ocean freight and ocean services expenses increased 13% for the three-month period ended March 31, 2017, due to increased volumes and higher average buy rates as overall market demand increased and carriers managed available capacity.

Ocean freight and ocean services net revenues decreased 3% for the three-month period ended March 31, 2017, as compared with the same period for 2016. The largest component of our ocean freight net revenue was derived from ocean freight consolidation, which represented 46% and 50% of ocean freight net revenue for the three-month periods ended March 31, 2017 and 2016, respectively.

Ocean freight consolidation net revenues decreased 11% in the first quarter of 2017, as compared with the same period in 2016, due primarily to a 17% decrease in net revenue per container, partially offset by a 7% increase in volume. Direct ocean freight forwarding net revenues increased 2% for the three-month period ended March 31, 2017, as compared with the same period in 2016, due to higher volumes. Order management net revenues increased 9% for the three-month period ended March 31, 2017, mostly resulting from higher volumes with new and existing customers primarily in North Asia.

North America ocean freight and ocean services net revenues decreased 5% in the first quarter of 2017, primarily due to a decrease in ocean freight consolidation resulting from declining margins on imports. Europe and South Asia net revenues decreased 7% and 4%, respectively, due primarily to lower net revenue per kilo. North Asia net revenues remained flat, as lower ocean consolidation margins were offset by an increase in order management.

We expect that pricing volatility will continue as customers solicit bids and carriers react to current market conditions, including carrier liquidity challenges. These conditions could result in lower revenues and yields.

Customs brokerage and other services:

Customs brokerage and other services revenues and expenses increased 8% and 10%, respectively, for the three-month period ended March 31, 2017, as compared with the same period in 2016, primarily as a result of higher volumes in both customs brokerage and road freight services.

Customs brokerage and other services net revenues increased 7% for the three-month period ended March 31, 2017, as compared with the same period in 2016, primarily as a result of an increase in customs brokerage and road freight volumes, particularly in North America. Customers continue to seek out customs brokers, such as Expeditors, with sophisticated computerized capabilities critical to an overall logistics management program, including rapid responses to changes in the regulatory and security environment.

North America net revenues increased 7% for the three-month period ended March 31, 2017, as compared with the same period for 2016, primarily as a result of higher volumes in customs brokerage and road freight services. Europe net revenues increased 10% in the first quarter primarily due to higher road freight services.

Overhead expenses:

Salaries and related costs increased 3% for the three months ended March 31, 2017, as compared with the same period in 2016 due to an increase in the number of employees, primarily in North America and Europe, partially offset by reduced bonuses from lower operating income.

Historically, the relatively consistent relationship between salaries and net revenues has been the result of a compensation philosophy that has been maintained since the inception of our company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee. Using this compensation model, changes in individual incentive compensation occur in proportion to changes in our operating income, creating a direct alignment between corporate performance and shareholder interests. Bonuses to field and executive management for the three-month period ended March 31, 2017 were down 5% and 12%, respectively, as compared with the same period for 2016, primarily as a result of a 4% decrease in operating income. In 2017, we reduced senior executive management bonus pool allocations by 6% to help fund expansion of our strategic growth initiatives. Our management compensation programs have always been incentive-based and performance driven and there is no built-in bias that favors or enriches management in a manner inconsistent with overall corporate performance. Salaries and related costs remained constant at 55% of net revenues for both of the three-month periods ended March 31, 2017 and 2016.

Because our management incentive compensation programs are also cumulative, generally no management bonuses can be paid unless the relevant business unit is, from inception, cumulatively profitable. Any operating losses must be offset in their entirety by operating profits before management is eligible for a bonus. Executive management, in limited circumstances, makes exceptions at the branch operating unit level. Since the most significant portion of management compensation comes from the incentive bonus programs, we believe that this cumulative feature is a disincentive to excessive risk taking by our managers. Due to the nature of our services, it has a short operating cycle. The outcome of any higher risk transactions, such as overriding established credit limits, would be known in a relatively short time frame. Management believes that when the potential and certain impact on the bonus is fully considered in light of this short operating cycle, the potential for short term gains that could be generated by engaging in risky business practices is sufficiently mitigated to discourage excessive and inappropriate risk taking. Management believes that both the stability and the long term growth in revenues, net revenues and net earnings are a result of the incentives inherent in our compensation programs.

Other overhead expenses increased 9% for the three-month period ended March 31, 2017, as compared with the same period in 2016. The increase in expenses was primarily due to renting additional space and higher claims, travel and technology-related fees. We will continue to make important investments in people, processes and technology, as well as to invest in our strategic efforts to explore new areas for profitable growth. Other overhead expenses increased to 17% of net revenues for the three-month period ended March 31, 2017, as compared with 16% for the same period in 2016.

Income tax expense:

We pay income taxes in the United States and other jurisdictions. Our consolidated effective income tax rate was 37.3% for the three-month period ended March 31, 2017, and 37.6% for the same period in 2016. Our effective tax rate is subject to variation and the rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on the effective tax rate is greater when pre-tax income is lower.

Currency and Other Risk Factors

The nature of our worldwide operations necessitates dealing with a multitude of currencies other than the U.S. dollar. This results in our being exposed to the inherent risks of volatile international currency markets and governmental interference. Some of the countries where we maintain offices and/or agency relationships have strict currency control regulations which influence our ability to hedge foreign currency exposure. We try to compensate for these exposures by accelerating international currency settlements among our offices and agents. We may enter into foreign currency hedging transactions where there are regulatory or commercial limitations on our ability to move money freely around the world or the short-term financial outlook in any country is such that hedging is the most time-sensitive way to mitigate short-term exchange losses. Any such hedging activity during the three months ended March 31, 2017 and 2016 was insignificant. We had no foreign currency derivatives outstanding at March 31, 2017 and December 31, 2016. During the first quarter of 2017 and 2016, total net foreign currency losses were approximately $5 million and $4 million, respectively.

International air and ocean freight forwarding and customs brokerage are intensively competitive and are expected to remain so for the foreseeable future. There are a large number of entities competing in the international logistics industry, including new technology-based competitors entering the industry, many of which have significantly more resources than us; however, our primary competition is confined to a relatively small number of companies within this group. Expeditors must compete against both the niche players and larger entities. The industry continues to experience consolidations into larger firms striving for stronger and more complete multinational and multi-service networks. However, regional and local brokers and forwarders remain a competitive force.

The primary competitive factors in the international logistics industry continue to be price and quality of service, including reliability, responsiveness, expertise, convenience, and scope of operations. We emphasize quality customer service and believe that our prices are competitive with those of others in the industry. Customers regularly solicit bids from competitors in order to improve service, pricing and contractual terms such as seeking longer payment terms, higher or unlimited liability limits and performance penalties. Increased competition and competitors' acceptance of expanded contractual terms could result in reduced revenues, reduced margins, higher operating costs or loss of market share, any of which would damage our results of operations and financial condition.

Larger customers utilize more sophisticated and efficient procedures for the management of their logistics supply chains by embracing strategies such as just-in-time inventory management. We believe that this trend has resulted in customers using fewer service providers with greater technological capacity and more consistent global coverage. Accordingly, sophisticated computerized customer service capabilities and a stable worldwide network have become significant factors in attracting and retaining customers. Developing and maintaining these systems and a worldwide network has added a considerable indirect

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cost to the services provided to customers. Smaller and middle-tier competitors, in general, do not have the resources available to develop customized systems and a worldwide network.

Liquidity and Capital Resources

Our principal source of liquidity is cash and cash equivalents and cash generated from operating activities. Net cash provided by operating activities for the three months ended March 31, 2017 was $196 million, as compared with $236 million for the same period in 2016. The decrease of $40 million in the first quarter of 2017 is primarily due to changes in working capital accounts and lower earnings. At March 31, 2017, working capital was $1,475 million, including cash and cash equivalents of $1,156 million. We had no long-term debt at March 31, 2017. Management believes that our current cash position and operating cash flows will be sufficient to meet our capital and liquidity requirements for at least the next 12 months and thereafter for the foreseeable future, including meeting any contingent liabilities related to standby letters of credit and other obligations.

As a customs broker, we make significant cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities in various countries throughout the world. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency. For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures, and historically has experienced relatively insignificant collection problems.

Our business historically has been subject to seasonal fluctuations and this is expected to continue in the future. Cash flows fluctuate as a result of this seasonality. Historically, the first quarter shows an excess of customer collections over customer billings. This results in positive cash flow. The increased activity associated with periods of higher demand (typically commencing late second or early third quarter and continuing well into the fourth quarter) causes an excess of customer billings over customer collections. This cyclical growth in customer receivables consumes available cash.

Cash used in investing activities for the three months ended March 31, 2017 was $13 million, as compared with $15 million in the same period of 2016. We had capital expenditures of $13 million and $14 million for the three-month periods ended March 31, 2017 and 2016, respectively. Capital expenditures in the three months ended March 31, 2017 related primarily to continuing investments in technology, office and warehouse furniture and equipment and building and leasehold improvements. Occasionally, we elect to purchase buildings to house staff and to facilitate the staging of customers’ freight. In 2016, we completed a land acquisition in Europe. Additional expenditures are expected to be made in 2017 and 2018 in connection with the construction of a building on this land. Total anticipated capital expenditures in 2017 are currently estimated to be $110 million. This includes routine capital expenditures, including the construction of the building in Europe, plus additional real estate development.

Cash used in financing activities during the three months ended March 31, 2017 was $9 million, as compared with $29 million for the same period in 2016. We use the proceeds from stock option exercises, employee stock purchases and available cash to repurchase our common stock on the open market to limit the growth in issued and outstanding shares. During the three months ended March 31, 2017, we used cash to repurchase 1.0 million shares, to reduce the number of total outstanding shares, compared to 1.5 million shares in the same period in 2016.

We follow established guidelines relating to credit quality, diversification and maturities of our investments to preserve principal and maintain liquidity. Historically, our investment portfolio has not been adversely impacted by disruptions occurring in the credit markets. However, there can be no assurance that our investment portfolio will not be adversely affected in the future.

We maintain international unsecured bank lines of credit. At March 31, 2017, we were contingently liable for $63 million from standby letters of credit and guarantees. The standby letters of credit and guarantees relate to obligations of our foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value-added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excises are properly recorded as obligations in the books of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company is required to perform.

We typically enter into short-term unconditional purchase obligations with asset-based providers reserving space on a guaranteed basis. The pricing of these obligations varies to some degree with market conditions. We only enter into agreements that management believes we can fulfill.

Our foreign subsidiaries regularly remit dividends to the U.S. parent company after evaluating their working capital requirements and needs to finance local capital expenditures. In some cases, our ability to repatriate funds from foreign operations may be subject to foreign exchange controls. At March 31, 2017, cash and cash equivalent balances of $527 million were held by our non-United States subsidiaries, of which $71 million was held in banks in the United States. Earnings of our foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States and, accordingly, a deferred tax liability has been accrued for all undistributed earnings, net of foreign related tax credits that are available to be repatriated.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. These risks are primarily related to foreign exchange risk and changes in short-term interest rates. The potential impact of our exposure to these risks is presented below:

Foreign Exchange Risk

We conduct business in many different countries and currencies. Our business often results in revenue billings issued in a country and currency which differs from that where the expenses related to the service are incurred. In the ordinary course of business, we create numerous intercompany transactions and may have receivables, payables and currencies that are not denominated in the local functional currency. This brings foreign exchange risk to our earnings. The principal foreign exchange risks to which Expeditors is exposed are in Chinese Yuan, Euro, Mexican Peso, Canadian Dollar and British Pound.

Foreign exchange rate sensitivity analysis can be quantified by estimating the impact on our earnings as a result of hypothetical changes in the value of the U.S. dollar, our functional currency, relative to the other currencies in which we transact business. All other things being equal, an average 10% weakening of the U.S. dollar, throughout the three months ended March 31, 2017, would have had the effect of raising operating income approximately $10 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income approximately $8 million. This analysis does not take into account changes in shipping patterns based upon this hypothetical currency fluctuation. For example, a weakening in the U.S. dollar would be expected to increase exports from the United States and decrease imports into the United States over some relevant period of time, but the exact effect of this change cannot be quantified without making speculative assumptions.

We currently do not use derivative financial instruments to manage foreign currency risk and only enter into foreign currency hedging transactions in limited locations where regulatory or commercial limitations restrict our ability to move money freely. Any such hedging activity throughout the three months ended March 31, 2017 and 2016 was insignificant. During the first quarters of 2017 and 2016, total net foreign currency losses were approximately $5 million and $4 million, respectively. We had no foreign currency derivatives outstanding at March 31, 2017 and December 31, 2016. We instead follow a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of March 31, 2017, we had approximately $57 million of net unsettled intercompany transactions. The majority of intercompany billings are resolved within 30 days.

Interest Rate Risk

At March 31, 2017, we had cash and cash equivalents of $1,156 million, of which $731 million was invested at various short-term market interest rates. We had no long-term debt at March 31, 2017. A hypothetical change in the interest rate of 10 basis points at March 31, 2017 would not have a significant impact on our earnings. In management’s opinion, there has been no material change in our interest rate risk exposure in the first quarter of 2017.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report at the reasonable assurance level.

Changes in Internal Controls

There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are developing a new accounting system which is being implemented on a worldwide basis over the next several years. This system is expected to improve the efficiency of certain financial and transactional processes and reporting. This transition affects the processes that constitute our internal control over financial reporting and requires testing for operating effectiveness.

Our management has confidence in our internal controls and procedures. Nevertheless, our management, including Expeditors’ Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or intentional fraud. An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all of our control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Expeditors is involved in claims, lawsuits, government investigations and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal advisors, none of these matters are expected to have a significant effect on our operations, cash flows or financial position. As of March 31, 2017, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to our operations, cash flows or financial position. At this time, we are unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.

Item 1A. Risk Factors

There have been no material changes in Expeditors' risk factors from those disclosed in our annual report on Form 10-K filed on February 23, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

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
January 1-31, 2017	—	$	—	—	16,274,625
February 1-28, 2017	—	—		—	16,766,916
March 1-31, 2017	954,219	56.49		954,219	15,295,145
Total	954,219	$	56.49	954,219	15,295,145

In November 1993, Expeditors' Board of Directors authorized a Non-Discretionary Stock Repurchase Plan for the purpose of repurchasing our common stock in the open market with the proceeds received from the exercise of stock options. On February 9, 2009, the Plan was amended to increase the authorization to repurchase up to 40 million shares of our common stock. This authorization has no expiration date. This plan was disclosed in our annual report on Form 10-K filed on March 31, 1995. In the first quarter of 2017, 954,219 shares of common stock were repurchased under the Non-Discretionary Stock Repurchase Plan.

In November 2001, under a Discretionary Stock Repurchase Plan, Expeditors' Board of Directors authorized the repurchase of our common stock in the open market to reduce the issued and outstanding stock down to 200 million shares. In February 2014, the Board of Directors authorized repurchases down to 190 million shares of common stock. In February and August 2015 and May 2016, the Board of Directors further authorized repurchases down to 188 million, 180 million and 170 million, respectively. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. This authorization has no expiration date. In the first quarter of 2017, no shares of common stock were repurchased under the Discretionary Stock Repurchase Plan.

Item 3. Defaults Upon Senior Securities

Not applicable.

16

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) Not applicable

(b) Not applicable

17

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K.

Exhibit Number	Description
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

18

SIGNATURES

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

	EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
May 4, 2017	/s/ JEFFREY S. MUSSER
	Jeffrey S. Musser, President, Chief Executive Officer and Director
May 4, 2017	/s/ BRADLEY S. POWELL
	Bradley S. Powell, Senior Vice President and Chief Financial Officer

19

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Form 10-Q Index and Exhibits

March 31, 2017

Exhibit Number	Description
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

20

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Jeffrey S. Musser, certify that:

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.

Date: May 4, 2017

/S/ JEFFREY S. MUSSER

Jeffrey S. Musser

President, Chief Executive Officer and Director

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Bradley S. Powell, certify that:

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.

Date: May 4, 2017

/S/ BRADLEY S. POWELL

Bradley S. Powell

Senior Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Expeditors International of Washington, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jeffrey S. Musser, President, Chief Executive Officer and Director, and Bradley S. Powell, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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.

May 4, 2017	/S/ JEFFREY S. MUSSER
	Jeffrey S. Musser President, Chief Executive Officer and Director
May 4, 2017	/S/ BRADLEY S. POWELL
	Bradley S. Powell Senior Vice President and Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 01, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	EXPEDITORS INTERNATIONAL OF WASHINGTON INC
Entity Central Index Key	0000746515
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	EXPD
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		180,164,709

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current Assets:
Cash and cash equivalents	$ 1,156,043	$ 974,435
Accounts receivable, less allowance for doubtful accounts of $9,911 at March 31, 2017 and $9,247 at December 31, 2016	1,126,488	1,190,130
Other	119,265	54,014
Total current assets	2,401,796	2,218,579
Property and equipment, less accumulated depreciation and amortization of $394,154 at March 31, 2017 and $406,652 at December 31, 2016	463,604	536,572
Goodwill	7,927	7,927
Other assets, net	29,392	27,793
Total assets	2,902,719	2,790,871
Current Liabilities:
Accounts payable	701,122	726,571
Accrued expenses, primarily salaries and related costs	205,255	185,502
Federal, state and foreign income taxes	20,427	17,858
Total current liabilities	926,804	929,931
Deferred Federal and state income taxes	24,195	13,727
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued	0	0
Common stock, par value $0.01 per share. Issued and outstanding 179,924 shares at March 31, 2017 and 179,857 shares at December 31, 2016	1,800	1,799
Additional paid-in capital	4,721	2,642
Retained earnings	2,038,053	1,944,789
Accumulated other comprehensive loss	(95,678)	(104,592)
Total shareholders’ equity	1,948,896	1,844,638
Noncontrolling interest	2,824	2,575
Total equity	1,951,720	1,847,213
Total liabilities and equity	$ 2,902,719	$ 2,790,871

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 9,911	$ 9,247
Property and equipment, accumulated depreciation	$ 394,154	$ 406,652
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	179,924	179,857
Common stock, shares outstanding	179,924	179,857

XML

Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Airfreight services	$ 615,545	$ 560,853
Ocean freight and ocean services	493,759	454,192
Customs brokerage and other services	435,828	403,427
Total revenues	1,545,132	1,418,472
Operating Expenses:
Airfreight services	443,404	388,777
Ocean freight and ocean services	366,063	323,020
Customs brokerage and other services	208,060	189,606
Salaries and related costs	292,580	283,355
Rent and occupancy costs	28,130	26,859
Depreciation and amortization	11,927	11,329
Selling and promotion	10,915	9,432
Other	37,939	34,268
Total operating expenses	1,399,018	1,266,646
Operating income	146,114	151,826
Other Income (Expense):
Interest income	2,741	2,779
Other, net	298	879
Other income (expense), net	3,039	3,658
Earnings before income taxes	149,153	155,484
Income tax expense	55,586	58,437
Net earnings	93,567	97,047
Less net earnings attributable to the noncontrolling interest	303	463
Net earnings attributable to shareholders	$ 93,264	$ 96,584
Diluted earnings attributable to shareholders per share	$ 0.51	$ 0.53
Basic earnings attributable to shareholders per share	$ 0.52	$ 0.53
Weighted average diluted shares outstanding	182,094	183,018
Weighted average basic shares outstanding	180,062	182,010

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net earnings	$ 93,567	$ 97,047
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $4,876 and $5,187 for the three months ended March 31, 2017 and 2016	8,860	9,580
Other comprehensive income	8,860	9,580
Comprehensive income	102,427	106,627
Less comprehensive income attributable to the noncontrolling interest	249	577
Comprehensive income attributable to shareholders	$ 102,178	$ 106,050

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract]
Foreign currency translation adjustments, tax	$ 4,876	$ 5,187

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Activities:
Net earnings	$ 93,567	$ 97,047
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses on accounts receivable	931	578
Deferred income tax expense	5,593	9,896
Stock compensation expense	10,623	10,831
Depreciation and amortization	11,927	11,329
Other, net	(351)	36
Changes in operating assets and liabilities:
Decrease in accounts receivable	75,454	112,710
Decrease in accounts payable and accrued expenses	(18,324)	(15,344)
Increase in income taxes payable, net	19,824	10,925
Increase in other current assets	(3,565)	(2,055)
Net cash from operating activities	195,679	235,953
Investing Activities:
Purchase of property and equipment	(12,761)	(14,035)
Other, net	(671)	(559)
Net cash from investing activities	(13,432)	(14,594)
Financing Activities:
Proceeds from issuance of common stock	45,365	41,635
Repurchases of common stock	(53,908)	(70,292)
Net cash from financing activities	(8,543)	(28,657)
Effect of exchange rate changes on cash and cash equivalents	7,904	13,419
Increase in cash and cash equivalents	181,608	206,121
Cash and cash equivalents at beginning of period	974,435	807,796
Cash and cash equivalents at end of period	1,156,043	1,013,917
Taxes Paid:
Income taxes	$ 29,146	$ 37,984

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

A. Basis of Presentation

Expeditors International of Washington, Inc. (the Company) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, industrial and manufacturing companies around the world.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Form 10-K as filed with the Securities and Exchange Commission on February 23, 2017.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. Certain prior year amounts have been reclassified to conform to the 2017 presentation.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $9,911 as of March 31, 2017 and $9,247 as of December 31, 2016. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of liabilities for the portion of the related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

XML

Share-Based Compensation

3 Months Ended

Mar. 31, 2017

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

Historically, the Company has provided compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. The Company has historically granted the majority of its options during the second quarter of each fiscal year and no options were granted in the three months ended March 31, 2017 and 2016. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and none were issued in the three-month periods ended March 31, 2017 and 2016.

Subsequent to the end of the quarter, on May 2, 2017, shareholders approved the 2017 Omnibus Incentive Plan (2017 Plan), which made available 2.5 million shares of the Company's common stock to be issued under all award types allowed by the 2017 Plan. In May 2017, the Company awarded restricted stock units to certain employees and performance stock units to its Chief Executive Officer. The Company does not plan to grant stock options in 2017.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the stock awards' vesting periods as salaries and related costs.

Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. Also, the Company has elected to continue to estimate forfeitures expected to occur in determining compensation cost to be recognized in each period.

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended
	March 31,
	2017		2016
Stock compensation expense	$	10,623	$	10,831
Recognized tax benefit	$	2,213	$	1,730

XML

Basic and Diluted Earnings per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders:

	Three months ended
	March 31,
(Amounts in thousands, except per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2017
Basic earnings attributable to shareholders	$	93,264	180,062	$	0.52
Effect of dilutive potential common shares	—		2,032	—
Diluted earnings attributable to shareholders	$	93,264	182,094	$	0.51
2016
Basic earnings attributable to shareholders	$	96,584	182,010	$	0.53
Effect of dilutive potential common shares	—		1,008	—
Diluted earnings attributable to shareholders	$	96,584	183,018	$	0.53

The following potential common shares have been excluded from the computation of diluted earnings per share because the effect would have been antidilutive:

	Three months ended
	March 31,
	2017	2016
Shares	3,751	9,414

XML

Components of Equity

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Components of Equity

Components of Equity

The components of equity for the three months ended March 31,2017 and 2016 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2016	$	1,844,638		2,575		1,847,213
Exercise of stock options	45,365			—		45,365
Shares repurchased under provisions of stock repurchase plans	(53,908		)	—		(53,908	)
Stock compensation expense	10,623			—		10,623
Net earnings	93,264			303		93,567
Other comprehensive income (loss)	8,914			(54	)	8,860
Balance at March 31, 2017	$	1,948,896		2,824		1,951,720
Balance at December 31, 2015	$	1,691,993		2,683		1,694,676
Exercise of stock options	41,635			—		41,635
Shares repurchased under provisions of stock repurchase plans	(70,292		)	—		(70,292	)
Stock compensation expense	10,831			—		10,831
Tax benefits from stock plans, net	(966		)	—		(966	)
Net earnings	96,584			463		97,047
Other comprehensive income	9,466			114		9,580
Balance at March 31, 2016	$	1,779,251		3,260		1,782,511

The Company has a Non-Discretionary Stock Repurchase Plan to repurchase shares from the proceeds of stock option exercises and employee stock purchases. During the three-month periods ended March 31, 2017 and 2016, 954 and 423 shares were repurchased at an average price of $56.49 and $47.60 per share, respectively.

The Company also has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding stock down to 170 million shares of common stock. No shares were purchased during the three-month period ended March 31, 2017, and 1,048 shares were repurchased at an average price of $47.87 per share during the first quarter of 2016.

Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, for all the periods presented.

Subsequent to the end of the first quarter, on May 2, 2017, the Board of Directors declared a semi-annual dividend of $0.42 per share payable on June 15, 2017 to shareholders of record as of June 1, 2017.

XML

Assets Held for Sale Assets Held for Sale

3 Months Ended

Mar. 31, 2017

Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract]

Assets Held for Sale

Note 5. Assets Held for Sale

In January 2017, the Company formally approved a plan to sell land and buildings located in Miami, Florida. The decision to sell these assets was largely based upon changes in local operational requirements and the Company's intended use of the property. The net book value of the property assets is $80 million, and is reported within the United States segment. In May 2017, the Company entered into an agreement for the sale. The Company expects the sale to close in the second or third quarter of 2017 at a selling price which, after selling costs, will exceed the net book value. As of March 31, 2017, these assets are being reported as held for sale and are classified in other current assets.

XML

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments, other than cash, consist primarily of cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents. Cash and cash equivalents consist of the following:

	March 31, 2017			December 31, 2016
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	424,861	424,861	406,787	406,787
Corporate commercial paper	669,046		669,287	507,777	507,889
Time deposits	62,136		62,136	59,871	59,871
Total cash and cash equivalents	$	1,156,043	1,156,284	974,435	974,547

The fair value of corporate commercial paper and time deposits is based on the use of market interest rates for identical or similar assets (Level 2 fair value measurement).

XML

Contingencies

3 Months Ended

Mar. 31, 2017

Loss Contingency [Abstract]

Contingencies

Contingencies

The Company is involved in claims, lawsuits, government investigations and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal advisors, none of these matters are expected to have a significant effect on the Company's operations, cash flows or financial position. As of March 31, 2017, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations, cash flows or financial position. At this time, the Company is unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.

XML

Business Segment Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, net revenues¹, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin.

Financial information regarding the Company’s operations by geographic area is as follows:

(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 March 31, 2017:
Revenues from unaffiliated customers	$	426,019	59,899	22,103	566,428	147,240	231,457	91,986	—		1,545,132
Transfers between geographic areas	24,313		2,639	3,635	5,051	5,431	9,322	4,964	(55,355	)	—
Total revenues	$	450,332	62,538	25,738	571,479	152,671	240,779	96,950	(55,355	)	1,545,132
Net revenues1	$	230,785	25,793	14,916	111,833	37,995	75,958	29,731	594		527,605
Operating income	$	52,346	5,051	3,451	53,352	13,224	11,646	7,043	1		146,114
Identifiable assets at period end	$	1,536,520	106,068	50,344	514,509	122,765	379,853	188,098	4,562		2,902,719
Capital expenditures	$	5,242	234	255	1,240	373	5,078	339	—		12,761
Depreciation and amortization	$	7,753	372	320	1,320	531	1,171	460	—		11,927
Equity	$	1,192,601	51,812	27,248	371,152	105,726	118,211	119,627	(34,657	)	1,951,720
Three months ended March 31, 2016:
Revenues from unaffiliated customers	$	407,826	52,106	20,064	497,232	136,418	221,897	82,929	—		1,418,472
Transfers between geographic areas	26,034		2,700	3,601	5,096	5,806	10,361	5,394	(58,992	)	—
Total revenues	$	433,860	54,806	23,665	502,328	142,224	232,258	88,323	(58,992	)	1,418,472
Net revenues1	$	220,698	27,378	13,733	110,791	39,518	74,541	30,407	3		517,069
Operating income	$	48,205	7,291	3,852	55,218	15,691	12,253	9,313	3		151,826
Identifiable assets at period end	$	1,236,896	119,258	56,334	455,973	133,940	438,711	216,576	3,852		2,661,540
Capital expenditures	$	8,137	311	485	1,085	655	2,119	1,243	—		14,035
Depreciation and amortization	$	7,332	364	253	1,319	512	1,098	451	—		11,329
Equity	$	978,426	79,312	37,325	300,188	115,606	167,726	137,112	(33,184	)	1,782,511

¹Net revenues are a non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2017		2016
Total revenues	$	1,545,132	$	1,418,472
Expenses:
Airfreight services	443,404		388,777
Ocean freight and ocean services	366,063		323,020
Customs brokerage and other services	208,060		189,606
Net revenues	$	527,605	$	517,069

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation, Policy

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Form 10-K as filed with the Securities and Exchange Commission on February 23, 2017.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified.

Accounts Receivable, Policy

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $9,911 as of March 31, 2017 and $9,247 as of December 31, 2016. Additions and write-offs have not been significant in the periods presented.

Use of Estimates, Policy

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of liabilities for the portion of the related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy

Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. Also, the Company has elected to continue to estimate forfeitures expected to occur in determining compensation cost to be recognized in each period.

Stock Plans, Policy

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the stock awards' vesting periods as salaries and related costs.

Cash Equivalents, Policy

All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents.

Segment Reporting, Policy

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, net revenues¹, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin.

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Share-based Compensation [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended
	March 31,
	2017		2016
Stock compensation expense	$	10,623	$	10,831
Recognized tax benefit	$	2,213	$	1,730

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Basic and Diluted Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders:

	Three months ended
	March 31,
(Amounts in thousands, except per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2017
Basic earnings attributable to shareholders	$	93,264	180,062	$	0.52
Effect of dilutive potential common shares	—		2,032	—
Diluted earnings attributable to shareholders	$	93,264	182,094	$	0.51
2016
Basic earnings attributable to shareholders	$	96,584	182,010	$	0.53
Effect of dilutive potential common shares	—		1,008	—
Diluted earnings attributable to shareholders	$	96,584	183,018	$	0.53

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following potential common shares have been excluded from the computation of diluted earnings per share because the effect would have been antidilutive:

	Three months ended
	March 31,
	2017	2016
Shares	3,751	9,414

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Components of Equity (Tables)

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Schedule of Components of Equity Disclosure

The components of equity for the three months ended March 31,2017 and 2016 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2016	$	1,844,638		2,575		1,847,213
Exercise of stock options	45,365			—		45,365
Shares repurchased under provisions of stock repurchase plans	(53,908		)	—		(53,908	)
Stock compensation expense	10,623			—		10,623
Net earnings	93,264			303		93,567
Other comprehensive income (loss)	8,914			(54	)	8,860
Balance at March 31, 2017	$	1,948,896		2,824		1,951,720
Balance at December 31, 2015	$	1,691,993		2,683		1,694,676
Exercise of stock options	41,635			—		41,635
Shares repurchased under provisions of stock repurchase plans	(70,292		)	—		(70,292	)
Stock compensation expense	10,831			—		10,831
Tax benefits from stock plans, net	(966		)	—		(966	)
Net earnings	96,584			463		97,047
Other comprehensive income	9,466			114		9,580
Balance at March 31, 2016	$	1,779,251		3,260		1,782,511

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair value of Cash and Cash Equivalents by Balance Sheet Grouping

Cash and cash equivalents consist of the following:

	March 31, 2017			December 31, 2016
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	424,861	424,861	406,787	406,787
Corporate commercial paper	669,046		669,287	507,777	507,889
Time deposits	62,136		62,136	59,871	59,871
Total cash and cash equivalents	$	1,156,043	1,156,284	974,435	974,547

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Financial information regarding the Company’s operations by geographic area is as follows:

(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 March 31, 2017:
Revenues from unaffiliated customers	$	426,019	59,899	22,103	566,428	147,240	231,457	91,986	—		1,545,132
Transfers between geographic areas	24,313		2,639	3,635	5,051	5,431	9,322	4,964	(55,355	)	—
Total revenues	$	450,332	62,538	25,738	571,479	152,671	240,779	96,950	(55,355	)	1,545,132
Net revenues1	$	230,785	25,793	14,916	111,833	37,995	75,958	29,731	594		527,605
Operating income	$	52,346	5,051	3,451	53,352	13,224	11,646	7,043	1		146,114
Identifiable assets at period end	$	1,536,520	106,068	50,344	514,509	122,765	379,853	188,098	4,562		2,902,719
Capital expenditures	$	5,242	234	255	1,240	373	5,078	339	—		12,761
Depreciation and amortization	$	7,753	372	320	1,320	531	1,171	460	—		11,927
Equity	$	1,192,601	51,812	27,248	371,152	105,726	118,211	119,627	(34,657	)	1,951,720
Three months ended March 31, 2016:
Revenues from unaffiliated customers	$	407,826	52,106	20,064	497,232	136,418	221,897	82,929	—		1,418,472
Transfers between geographic areas	26,034		2,700	3,601	5,096	5,806	10,361	5,394	(58,992	)	—
Total revenues	$	433,860	54,806	23,665	502,328	142,224	232,258	88,323	(58,992	)	1,418,472
Net revenues1	$	220,698	27,378	13,733	110,791	39,518	74,541	30,407	3		517,069
Operating income	$	48,205	7,291	3,852	55,218	15,691	12,253	9,313	3		151,826
Identifiable assets at period end	$	1,236,896	119,258	56,334	455,973	133,940	438,711	216,576	3,852		2,661,540
Capital expenditures	$	8,137	311	485	1,085	655	2,119	1,243	—		14,035
Depreciation and amortization	$	7,332	364	253	1,319	512	1,098	451	—		11,329
Equity	$	978,426	79,312	37,325	300,188	115,606	167,726	137,112	(33,184	)	1,782,511

Schedule of Net Revenues Calculation

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2017		2016
Total revenues	$	1,545,132	$	1,418,472
Expenses:
Airfreight services	443,404		388,777
Ocean freight and ocean services	366,063		323,020
Customs brokerage and other services	208,060		189,606
Net revenues	$	527,605	$	517,069

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 9,911	$ 9,247

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Share-Based Compensation - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	May 02, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0
Issuance of shares under stock purchase plan	0	0
Subsequent Event | Omnibus Incentive Plan 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			2,500,000

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Share-Based Compensation - Stock Compensation Expense and Total Related Tax Benefit Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock compensation expense	$ 10,623	$ 10,831
Recognized tax benefit	$ 2,213	$ 1,730

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Basic and Diluted Earnings per Share - Numerator and Denominator of the Basic and Diluted Per Share Computations for Earnings Attributable to Shareholders Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net Earnings Attributable to Shareholders
Basic earnings attributable to shareholders	$ 93,264	$ 96,584
Diluted earnings attributable to shareholders	$ 93,264	$ 96,584
Weighted Average Shares
Weighted average basic shares outstanding	180,062	182,010
Effect of dilutive potential common shares	2,032	1,008
Weighted average diluted shares outstanding	182,094	183,018
Earnings Per Share
Basic earnings attributable to shareholders per share	$ 0.52	$ 0.53
Diluted earnings attributable to shareholders per share	$ 0.51	$ 0.53

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Basic and Diluted Earnings per Share - Shares Excluded from Computation of Diluted earnings Per Share (Detail) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Shares	3,751	9,414

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Components of Equity (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 1,847,213	$ 1,694,676
Exercise of stock options	45,365	41,635
Shares repurchased under provisions of stock repurchase plans	(53,908)	(70,292)
Stock compensation expense	10,623	10,831
Tax (deficiency) benefit from stock plans, net		(966)
Net earnings	93,567	97,047
Other comprehensive loss	8,860	9,580
Ending Balance	1,951,720	1,782,511
Shareholders' Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	1,844,638	1,691,993
Exercise of stock options	45,365	41,635
Shares repurchased under provisions of stock repurchase plans	(53,908)	(70,292)
Stock compensation expense	10,623	10,831
Tax (deficiency) benefit from stock plans, net		(966)
Net earnings	93,264	96,584
Other comprehensive loss	8,914	9,466
Ending Balance	1,948,896	1,779,251
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	2,575	2,683
Net earnings	303	463
Other comprehensive loss	(54)	114
Ending Balance	$ 2,824	$ 3,260

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Components Of Equity - Additional Information (Detail) - $ / shares shares in Thousands		3 Months Ended
	May 02, 2017	Mar. 31, 2017	Mar. 31, 2016
Non-Discretionary Plan
Class of Stock [Line Items]
Shares repurchased		954	423
Average price per share		$ 56.49	$ 47.60
Discretionary Plan
Class of Stock [Line Items]
Shares repurchased		0	1,048
Average price per share			$ 47.87
Expected common stock shares issued and outstanding		170,000
Subsequent Event
Class of Stock [Line Items]
Date of declaration of dividends	May 02, 2017
Dividend declared per share	$ 0.42
Date of dividend payment	Jun. 15, 2017
Dividends payable to shareholders date of record	Jun. 01, 2017

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Assets Held for Sale Assets Held for Sale (Detail) $ in Millions	Mar. 31, 2017 USD ($)
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract]
Assets Held for Sale, Net Book Value, Current	$ 80

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Fair Value of Financial Instruments - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	$ 1,156,043	$ 974,435	$ 1,013,917	$ 807,796
Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	1,156,043	974,435
Cash and Cash Equivalents | Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	424,861	406,787
Corporate commercial paper	669,046	507,777
Time deposits	62,136	59,871
Cash and Cash Equivalents | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	424,861	406,787
Corporate commercial paper	669,287	507,889
Time deposits	62,136	59,871
Total cash and cash equivalents	$ 1,156,284	$ 974,547

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Business Segment Information - Financial Information Regarding Company's Operations by Geographic Area (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Total revenues		$ 1,545,132	$ 1,418,472
Net revenues	[1]	527,605	517,069
Operating income		146,114	151,826
Identifiable assets at period end		2,902,719	2,661,540	$ 2,790,871
Capital expenditures		12,761	14,035
Depreciation and amortization		11,927	11,329
Equity		1,951,720	1,782,511	$ 1,847,213	$ 1,694,676
United States Segment
Segment Reporting Information [Line Items]
Total revenues		426,019	407,826
Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		59,899	52,106
Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		22,103	20,064
North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		566,428	497,232
South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		147,240	136,418
Europe Segment
Segment Reporting Information [Line Items]
Total revenues		231,457	221,897
Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		91,986	82,929
Geography Eliminations | United States Segment
Segment Reporting Information [Line Items]
Total revenues		24,313	26,034
Geography Eliminations | Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		2,639	2,700
Geography Eliminations | Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		3,635	3,601
Geography Eliminations | North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		5,051	5,096
Geography Eliminations | South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		5,431	5,806
Geography Eliminations | Europe Segment
Segment Reporting Information [Line Items]
Total revenues		9,322	10,361
Geography Eliminations | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		4,964	5,394
Operating Segments | United States Segment
Segment Reporting Information [Line Items]
Total revenues		450,332	433,860
Net revenues	[1]	230,785	220,698
Operating income		52,346	48,205
Identifiable assets at period end		1,536,520	1,236,896
Capital expenditures		5,242	8,137
Depreciation and amortization		7,753	7,332
Equity		1,192,601	978,426
Operating Segments | Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		62,538	54,806
Net revenues	[1]	25,793	27,378
Operating income		5,051	7,291
Identifiable assets at period end		106,068	119,258
Capital expenditures		234	311
Depreciation and amortization		372	364
Equity		51,812	79,312
Operating Segments | Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		25,738	23,665
Net revenues	[1]	14,916	13,733
Operating income		3,451	3,852
Identifiable assets at period end		50,344	56,334
Capital expenditures		255	485
Depreciation and amortization		320	253
Equity		27,248	37,325
Operating Segments | North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		571,479	502,328
Net revenues	[1]	111,833	110,791
Operating income		53,352	55,218
Identifiable assets at period end		514,509	455,973
Capital expenditures		1,240	1,085
Depreciation and amortization		1,320	1,319
Equity		371,152	300,188
Operating Segments | South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		152,671	142,224
Net revenues	[1]	37,995	39,518
Operating income		13,224	15,691
Identifiable assets at period end		122,765	133,940
Capital expenditures		373	655
Depreciation and amortization		531	512
Equity		105,726	115,606
Operating Segments | Europe Segment
Segment Reporting Information [Line Items]
Total revenues		240,779	232,258
Net revenues	[1]	75,958	74,541
Operating income		11,646	12,253
Identifiable assets at period end		379,853	438,711
Capital expenditures		5,078	2,119
Depreciation and amortization		1,171	1,098
Equity		118,211	167,726
Operating Segments | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		96,950	88,323
Net revenues	[1]	29,731	30,407
Operating income		7,043	9,313
Identifiable assets at period end		188,098	216,576
Capital expenditures		339	1,243
Depreciation and amortization		460	451
Equity		119,627	137,112
Intersegment Eliminations
Segment Reporting Information [Line Items]
Total revenues		(55,355)	(58,992)
Net revenues	[1]	594	3
Operating income		1	3
Identifiable assets at period end		4,562	3,852
Equity		$ (34,657)	$ (33,184)

[1] Net revenues are a non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

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Business Segment Information - Net Revenues Calculation (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Segment Reporting [Abstract]
Total revenues		$ 1,545,132	$ 1,418,472
Expenses [Abstract]
Airfreight services		443,404	388,777
Ocean freight and ocean services		366,063	323,020
Customs brokerage and other services		208,060	189,606
Net revenues	[1]	$ 527,605	$ 517,069

[1] Net revenues are a non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.