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, 2019

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, 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 every Interactive Data File required to be submitted 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 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	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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	EXPD	NASDAQ

At May 6, 2019, the number of shares outstanding of the issuer’s common stock was 171,995,902.

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, 2019			December 31, 2018
Current Assets:
Cash and cash equivalents	$	1,189,429		$	923,735
Accounts receivable, less allowance for doubtful accounts of $12,727 at March 31, 2019 and $15,345 at December 31, 2018	1,353,725			1,581,530
Deferred contract costs	131,535			159,510
Other	54,305			70,041
Total current assets	2,728,994			2,734,816
Property and equipment, less accumulated depreciation and amortization of $457,513 at March 31, 2019 and $446,977 at December 31, 2018	500,853			504,105
Operating lease right-of-use assets	349,140			—
Goodwill	7,927			7,927
Deferred federal and state income taxes, net	37,781			40,465
Other assets, net	18,217			27,246
Total assets	$	3,642,912		$	3,314,559
Current Liabilities:
Accounts payable	$	768,665		$	902,259
Accrued expenses, primarily salaries and related costs	220,085			215,813
Contract liabilities	157,040			190,343
Current portion of operating lease liabilities	58,635			—
Federal, state and foreign income taxes	23,502			18,424
Total current liabilities	1,227,927			1,326,839
Noncurrent portion of operating lease liabilities	289,551			—
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued	—			—
Common stock, par value $0.01 per share. Issued and outstanding 171,648 shares at March 31, 2019 and 171,582 shares at December 31, 2018	1,716			1,716
Additional paid-in capital	3,978			1,896
Retained earnings	2,222,562			2,088,707
Accumulated other comprehensive loss	(103,986		)	(105,481		)
Total shareholders’ equity	2,124,270			1,986,838
Noncontrolling interest	1,164			882
Total equity	2,125,434			1,987,720
Total liabilities and equity	$	3,642,912		$	3,314,559

See accompanying notes to condensed consolidated financial statements.

2

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

	Three months ended
	March 31,
	2019		2018
Revenues:
Airfreight services	$	714,901	$	731,227
Ocean freight and ocean services	568,641		520,883
Customs brokerage and other services	736,509		602,152
Total revenues	2,020,051		1,854,262
Operating Expenses:
Airfreight services	509,210		513,504
Ocean freight and ocean services	420,331		379,418
Customs brokerage and other services	436,396		325,502
Salaries and related	356,910		339,895
Rent and occupancy	41,523		36,913
Depreciation and amortization	13,393		13,922
Selling and promotion	11,076		10,965
Other	43,611		41,325
Total operating expenses	1,832,450		1,661,444
Operating income	187,601		192,818
Other Income (Expense):
Interest income	6,106		4,314
Other, net	1,665		624
Other income (expense), net	7,771		4,938
Earnings before income taxes	195,372		197,756
Income tax expense	55,261		61,556
Net earnings	140,111		136,200
Less net earnings attributable to the noncontrolling interest	412		508
Net earnings attributable to shareholders	$	139,699	$	135,692
Diluted earnings attributable to shareholders per share	$	0.80	$	0.76
Basic earnings attributable to shareholders per share	$	0.81	$	0.77
Weighted average diluted shares outstanding	175,388		179,416
Weighted average basic shares outstanding	171,818		175,900

See accompanying notes to condensed consolidated financial statements.

3

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2019		2018
Net earnings	$	140,111	$	136,200
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax of $521 and $5,512 for the three months ended March 31, 2019 and 2018	1,365		8,851
Other comprehensive income	1,365		8,851
Comprehensive income	141,476		145,051
Less comprehensive income attributable to the noncontrolling interest	282		387
Comprehensive income attributable to shareholders	$	141,194	$	144,664

See accompanying notes to condensed consolidated financial statements.

4

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2019			2018
Operating Activities:
Net earnings	$	140,111		$	136,200
Adjustments to reconcile net earnings to net cash from operating activities:
Recoveries on accounts receivable	(1,888		)	(265		)
Deferred income tax expense	2,108			2,853
Stock compensation expense	13,382			11,267
Depreciation and amortization	13,393			13,922
Other, net	189			48
Changes in operating assets and liabilities:
Decrease in accounts receivable	230,477			100,647
Decrease in accounts payable and accrued expenses	(122,283		)	(45,844		)
Decrease in deferred contract costs	31,259			3,407
Decrease in contract liabilities	(36,725		)	(7,401		)
Increase in income taxes payable, net	16,993			19,509
Decrease in other, net	2,467			1,134
Net cash from operating activities	289,483			235,477
Investing Activities:
Purchase of property and equipment	(9,435		)	(13,796		)
Other, net	255			(431		)
Net cash from investing activities	(9,180		)	(14,227		)
Financing Activities:
Proceeds from issuance of common stock	27,190			26,397
Repurchases of common stock	(44,334		)	(172,360		)
Net cash from financing activities	(17,144		)	(145,963		)
Effect of exchange rate changes on cash and cash equivalents	2,535			6,515
Increase in cash and cash equivalents	265,694			81,802
Cash and cash equivalents at beginning of period	923,735			1,051,099
Cash and cash equivalents at end of period	$	1,189,429		$	1,132,901
Taxes Paid:
Income taxes	$	37,253		$	38,519

See accompanying notes to condensed consolidated financial statements.

5

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 22, 2019.

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.

B. Revenue Recognition

The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. The Company's three principal services are the revenue categories presented in the consolidated statements of earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.

The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year. The Company satisfied nearly all performance obligations for the contract liabilities recorded as of December 31, 2018.

C. Leases

Effective January 1, 2019, the Company adopted new lease accounting guidance using a modified retrospective approach and recognizing a right-of-use (ROU) asset and lease liability on the balance sheet. On January 1, 2019, ROU assets and lease liabilities were recorded for all existing leases exceeding one-year terms and were measured at the present value of lease payments over the remaining lease term. The adoption of this accounting standard resulted in recording ROU assets and lease liabilities for operating leases of $343 million and $340 million, respectively, as of January 1, 2019. The adoption of this standard had no impact on retained earnings on the condensed consolidated balance sheet.

In recording the ROU asset and lease liability, the Company elected to apply the following practical expedients:

•Package of practical expedients not to reassess:

◦Whether a contract is or contains a lease,

◦Historical lease classification, and

◦Initial direct costs.

•Use of hindsight when determining the lease term.

Additionally, the Company has elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and chose not to separate nonlease components from lease components and instead to account for each as a single lease component.

The Company determines if an arrangement is a lease at inception. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As most of the Company's leases do not have an implicit rate, the Company uses an incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent not considered fixed, and instead expense variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses on the condensed consolidated statement of earnings.

D. 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 customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $12,727 as of March 31, 2019 and $15,345 as of December 31, 2018. Additions and write-offs have not been significant in the periods presented.

E. 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 disclosures 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 that the Company has self-insured, accrual of various tax liabilities including estimates associated with the U.S. enacted Tax Cuts and Jobs Act (the 2017 Tax Act), accrual of loss contingencies, calculation of share-based compensation expense and estimates related to determining the lease term when measuring ROU assets and lease liabilities. Actual results could be materially different from the estimated provisions and accruals recorded.

F. Recent Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), which amends existing guidance for the accounting of credit losses on financial instruments. Under the ASU, the Company will record a valuation allowance for credit losses that are expected to be incurred over the financial asset’s contractual term. This standard will be effective for the Company on January 1, 2020 and is not expected to have a material effect on the consolidated financial statements as the new credit loss model will primarily apply to the Company's accounts receivable, which are of short duration and for which the Company has not historically experienced significant credit losses. However, the Company is still evaluating the impact of the new prescribed model compared to its current methodology.

6

Note 2. Leases

The Company enters into lease agreements primarily for office and warehouse space in all districts where it conducts business. As of March 31, 2019, all of the Company's leases are operating leases.

Lease cost for the quarter ended March 31, 2019 were all recorded under rent and occupancy expenses on the condensed consolidated statement of earnings and comprised of the following:

Operating lease cost	$	19,955
Variable lease cost	6,394
Total lease cost	$	26,349

Variable lease cost includes shorter-term lease expenses, which are insignificant.

Maturities of lease liabilities as of March 31, 2019 are as follows:

2019	$	55,196
2020	67,926
2021	58,219
2022	52,367
2023	43,512
Thereafter	142,322
Total minimum lease payments	419,542
Less imputed interest	71,356
Lease liability	$	348,186

At December 31, 2018, the last balance sheet presented before the adoption of the new accounting standard Topic 842 Leases, future minimum annual lease payments under all noncancelable leases were as follows:

2019	$	75,227
2020	62,974
2021	47,552
2022	38,352
2023	26,580
Thereafter	67,140
	$	317,825

Other information related to the Company's operating leases as of and for the period ended March 31, 2019 are as follows:

Right-of-use assets obtained in exchange for new operating lease liabilities	$	18,636
Cash paid for amounts included in the measurement of lease liabilities	$	19,246
Weighted-average remaining lease term (in years)	7.51
Weighted-average discount rate	4.99		%

7

Note 3. Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year. In the three-month periods ended March 31, 2019 and 2018, the Company did not grant any share-based awards.

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. No shares were issued in the three-month periods ended March 31, 2019 and 2018.

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s omnibus incentive, 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 service periods as salaries and related costs. Restricted stock unit awards to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately as there is no substantive service period associated with those awards.

Note 4. Income Taxes

In December 2017, the 2017 Tax Act was enacted in the United States. Beginning January 1, 2018, foreign earnings of the Company's international subsidiaries are generally exempt from U.S. Federal income tax upon repatriation. Notwithstanding these changes, certain non-U.S. withholding taxes and foreign exchange gains and losses will continue to be applicable upon the repatriation of foreign earnings.

During 2018 and 2019, the Internal Revenue Service (IRS) and the U.S. Department of Treasury (Treasury) issued additional guidelines and clarifying regulations related to the implementation of the 2017 Tax Act. The Company expects that additional guidance will continue to be issued in future periods. As this guidance is issued, the Company will continue to evaluate the information to determine whether any additional adjustments to its tax provisions are required.

The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as components of current income tax expense. Income tax expense for the three-month periods ended March 31, 2019 and 2018 had no tax expense related to GILTI or BEAT.

In February 2018, the FASB issued amended guidance for reporting comprehensive income to reflect changes resulting from the 2017 Tax Act. The amendment, which had an effective date of January 1, 2019, provided the option to reclassify stranded tax effects resulting from the 2017 Tax Act within accumulated other comprehensive income (AOCI) to retained earnings. The Company elected to not reclassify stranded income tax effects from AOCI to retained earnings, including those related to implementation of the 2017 Tax Act.

The Company's consolidated effective income tax rate was 28.3% for the three-month period ended March 31, 2019, as compared to 31.1% for the comparable period in 2018. The effective tax rate in 2019 benefited from share-based compensation deductions as a result of stock option exercises occurring during the quarter that were partially offset by certain expenses that are no longer deductible under the 2017 Tax Act. The effect of higher average foreign tax rates of the Company's international subsidiaries, when compared to the U.S. federal and state tax rates, were partially offset by available U.S foreign tax credits principally as a result of withholding taxes related to its foreign operations and U.S. income tax deductions for Foreign-derived intangible income (FDII).

As discussed above, some elements of the recorded impacts of the 2017 Tax Act could be impacted by further legislative action as well as additional interpretations and guidance issued by the IRS or Treasury. As a result, the amount of income tax recorded in the future may differ, possibly materially. For further information and discussion of the potential impact of the 2017 Tax Act, refer to Note 5 to the consolidated financial statements in the Company's 2018 Annual Report on Form 10-K.

8

Note 5. Basic and Diluted Earnings per Share

Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan, and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding.

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
2019
Basic earnings attributable to shareholders	$	139,699	171,818	$	0.81
Effect of dilutive potential common shares	—		3,570	—
Diluted earnings attributable to shareholders	$	139,699	175,388	$	0.80
2018
Basic earnings attributable to shareholders	$	135,692	175,900	$	0.77
Effect of dilutive potential common shares	—		3,516	—
Diluted earnings attributable to shareholders	$	135,692	179,416	$	0.76

9

Note 6. Components of Equity

The components of equity for the three months ended March 31,2019 and 2018 are as follows:

	Common Stock
	Shares		Par value			Additional paid-in capital		Retained earnings		Accumulated  other comprehensive loss		Total shareholders’ equity		Noncontrolling interest		Total equity
Balance at December 31, 2018	171,582		$	1,716		1,896		2,088,707		(105,481	)	1,986,838		882		1,987,720
Exercise of stock options and release of restricted shares	654		6			27,184		—		—		27,190		—		27,190
Shares repurchased under provisions of stock repurchase plans	(588	)	(6		)	(38,484	)	(5,844	)	—		(44,334	)	—		(44,334	)
Stock compensation expense	—		—			13,382		—		—		13,382		—		13,382
Net earnings	—		—			—		139,699		—		139,699		412		140,111
Other comprehensive income (loss)	—		—			—		—		1,495		1,495		(130	)	1,365
Balance at March 31, 2019	171,648		$	1,716		3,978		2,222,562		(103,986	)	2,124,270		1,164		2,125,434
Balance at December 31, 2017	176,374		$	1,764		546		2,063,512		(73,964	)	1,991,858		2,515		1,994,373
Cumulative effect of accounting change	—		—			—		(22,357	)	—		(22,357	)	(105	)	(22,462	)
Exercise of stock options and release of restricted shares	596		6			26,391		—		—		26,397		—		26,397
Shares repurchased under provisions of stock repurchase plans	(2,662	)	(27		)	(37,006	)	(135,327	)	—		(172,360	)	—		(172,360	)
Stock compensation expense	—		—			11,267		—		—		11,267		—		11,267
Net earnings	—		—			—		135,692		—		135,692		508		136,200
Other comprehensive income (loss)	—		—			—		—		8,972		8,972		(121	)	8,851
Balance at March 31, 2018	174,308		$	1,743		1,198		2,041,520		(64,992	)	1,979,469		2,797		1,982,266

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, 2019 and 2018, 88 and 446 shares were repurchased at an average price of $74.03 and $65.68 per share, respectively. As of March 31, 2019, all shares authorized for repurchase under this plan have been repurchased.

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 160 million shares of common stock. During the three-month period ended March 31, 2019, 500 shares were repurchased at an average price of $75.64 per share, compared to 2,216 shares at an average price of $64.58 per share during the same period in 2018.

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 7, 2019, the Board of Directors declared a semi-annual dividend of $0.50 per share payable on June 17, 2019 to shareholders of record as of June 3, 2019.

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Note 7. 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, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	460,584	$	460,584	$	427,307	$	427,307
Corporate commercial paper	692,669		693,248		467,300		467,760
Time deposits	36,176		36,176		29,128		29,128
Total cash and cash equivalents	$	1,189,429	$	1,190,008	$	923,735	$	924,195

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 8. 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, 2019, 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 9. 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, 2019:
Revenues from unaffiliated customers	$	681,424		85,103	35,949		617,000	171,930	320,049		108,596	—		2,020,051
Transfers between geographic areas 2	(21,640		)	6,307	(1,770	)	15,853	5,249	(7,359	)	4,079	(719	)	—
Total revenues	$	659,784		91,410	34,179		632,853	177,179	312,690		112,675	(719	)	2,020,051
Net revenues1	$	292,429		35,169	15,063		134,207	47,369	96,795		33,172	(90	)	654,114
Operating income	$	74,013		10,960	2,636		65,780	15,907	13,952		4,361	(8	)	187,601
Identifiable assets at period end	$	1,906,278		175,034	71,168		511,589	174,512	579,924		234,195	(9,788	)	3,642,912
Capital expenditures	$	6,915		228	93		344	176	982		697	—		9,435
Depreciation and amortization	$	8,222		467	432		1,407	536	1,831		498	—		13,393
Equity	$	1,401,450		82,170	28,581		238,518	114,290	165,718		126,953	(32,246	)	2,125,434
Three months ended March 31, 2018:
Revenues from unaffiliated customers	$	534,869		76,525	32,722		630,572	168,600	305,792		105,182	—		1,854,262
Transfers between geographic areas	28,881			3,562	3,387		6,017	6,550	14,188		5,355	(67,940	)	—
Total revenues	$	563,750		80,087	36,109		636,589	175,150	319,980		110,537	(67,940	)	1,854,262
Net revenues1	$	277,185		30,447	14,745		137,208	44,406	98,635		33,201	11		635,838
Operating income	$	69,648		9,018	2,370		69,923	15,132	19,278		7,438	11		192,818
Identifiable assets at period end	$	1,558,181		165,368	55,036		542,965	153,411	533,012		208,173	(3,665	)	3,212,481
Capital expenditures	$	3,171		1,528	505		784	329	7,191		288	—		13,796
Depreciation and amortization	$	8,765		398	368		1,376	583	1,976		456	—		13,922
Equity	$	1,247,522		68,050	27,226		278,651	105,642	160,038		128,487	(33,350	)	1,982,266

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.

²During the quarter ended March 31, 2019, the Company revised the process used to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation expenses for freight service transactions between Company origin and destination locations. There were no changes for services rendered at the origin, such as pick-up and delivery to port, nor for services rendered at the destination, such as customs clearance and final delivery. The change in process had no impact on reported segment net revenues or operating income nor on reported consolidated revenues or expenses. Prior year segment revenues have not been revised.

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2019		2018
Total revenues	$	2,020,051	$	1,854,262
Expenses:
Airfreight services	509,210		513,504
Ocean freight and ocean services	420,331		379,418
Customs brokerage and other services	436,396		325,502
Net revenues	$	654,114	$	635,838

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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," "Results of Operations," "Income tax expense," "Currency and Other Risk Factors" and "Liquidity and Capital Resources" contain forward-looking statements. Words such as "will likely result," "expects", "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 22, 2019.

Overview

Expeditors International of Washington, Inc. (herein referred to as "Expeditors," the "Company," "we," "us," "our") provides a full suite of global logistics services. Our services include air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking, 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 by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by our customer. Each performance obligation is comprised of one or more of the Company's services. We typically satisfy our performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. Our three principal services are the revenue categories presented in our financial statements: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. 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.

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 then 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.

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.

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 import services such as 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 also provide other value added services at destination, such as warehousing and distribution, time-definitive transportation services and consulting.

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 primarily responsible for fulfilling the promise to provide the services, when we assume risk of loss, when we have discretion in setting the prices for the services to the customers, and we have the ability to direct the use of the services provided by the third party. When revenue is recorded on a net basis, the 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.

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 that 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 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, which includes shared revenues and allocated costs. Therefore, 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.

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 to providing superior customer service;

• Compliance with our policies and procedures and government regulations;

• Aggressive marketing of all of our service offerings;

• A positive, safe work environment that is inclusive and free from discrimination and harassment;

• Ongoing development of key employees and management personnel;

• Creation of unlimited advancement opportunities for employees dedicated to hard work, personal growth and continuous improvement;

• Individual commitment to the identification and mentoring of successors for every key position so that when change occurs, a qualified and well-trained internal candidate is ready to step forward; and

• Continuous identification, design and implementation of system solutions and differentiated service offerings, both technological and otherwise, to meet and exceed the needs of our customers while simultaneously delivering tools to make our employees more efficient and more effective.

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 our unique culture is a critical component to our continued success. We strongly believe that it is nearly impossible to predict all 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 that lead to profitable business growth. Expeditors' teams are aligned on the specific markets; 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

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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.

Our business is also highly dependent on the financial stability and operational capabilities of the carriers we utilize. Although airline profitability has improved, many air carriers remain highly leveraged with debt. Moreover, the ocean carrier industry has incurred substantial losses in recent years. Many carriers are highly leveraged with debt and certain carriers are facing significant liquidity challenges. This environment 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, capacity 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 tariffs and trade restrictions and accords. Currently, the United States and China have significantly increased tariffs on certain imports and are engaged in trade negotiations. The United Kingdom and the European Union are negotiating the terms of the United Kingdom's exit from the European Union. We cannot predict the outcome of these proposals or negotiations, or the effects they will have on our business. As governments implement higher tariffs on imports, manufacturers may accelerate, to the extent possible, shipments to avoid higher tariffs and, over time, may shift manufacturing to other countries. 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 and inter-governmental disputes concerning international trade, our business may also be negatively affected by 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. Our pricing and terms continue to be pressured by uncertainty in global trade and economic conditions, concerns over volatile fuel costs, disruptions in port services, political unrest and fluctuating currency exchange rates. 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 have resulted in multiple carrier acquisitions and carrier alliance formations. Additionally, while overall global demand has recently increased, carriers continue to take delivery of new and larger ships, which creates additional capacity. Carriers also face new regulatory requirements that become effective in 2020 requiring reductions in the sulfur in marine fuel, which is expected to increase their operating and capital costs. When the market experiences seasonal peaks or any sort of disruption, the carriers often increase their pricing suddenly. This carrier behavior creates pricing volatility that could impact Expeditors' ability to maintain historical unitary profitability.

Currently, there is uncertainty as to how new regulatory requirements and changes in oil prices will continue to impact future buy rates. Because fuel is an integral part of carriers' costs and impacts both our cargo space buy rates and our 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 the impact of future changes in global trade 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 further changes in consumer purchasing behavior, such as online shopping, could have on our business.

Seasonality

Historically, our operating results have been subject to seasonal demand 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, governmental policies and inter-governmental disputes 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.

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A significant portion of our revenues is derived from customers in the retail and technology industries whose shipping patterns are tied closely to consumer demand, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules. Therefore, the timing of our revenues are, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for retail goods, changes in trade tariffs, 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.

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, 2018, filed on February 22, 2019. There have been no material changes to the critical accounting estimates previously disclosed in that report.

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, 2019 and 2018, 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,
	2019				2018
	Amount		Percent of net revenues		Amount		Percent of net revenues
(in thousands)
Airfreight services:
Revenues	$	714,901			$	731,227
Expenses	509,210				513,504
Net revenues	205,691		31	%	217,723		34	%
Ocean freight services and ocean services:
Revenues	568,641				520,883
Expenses	420,331				379,418
Net revenues	148,310		23		141,465		22
Customs brokerage and other services:
Revenues	736,509				602,152
Expenses	436,396				325,502
Net revenues	300,113		46		276,650		44
Total net revenues	654,114		100		635,838		100
Overhead expenses:
Salaries and related costs	356,910		54		339,895		54
Other	109,603		17		103,125		16
Total overhead expenses	466,513		71		443,020		70
Operating income	187,601		29		192,818		30
Other income (expense), net	7,771		1		4,938		1
Earnings before income taxes	195,372		30		197,756		31
Income tax expense	55,261		8		61,556		10
Net earnings	140,111		22		136,200		21
Less net earnings attributable to the noncontrolling interest	412		—		508		—
Net earnings attributable to shareholders	$	139,699	22	%	$	135,692	21	%

Airfreight services:

Airfreight services revenues and costs decreased 2% and 1%, respectively, in the first quarter of 2019, as compared with the same period for 2018, primarily due to 4% decline in tonnage.

Airfreight services net revenues decreased 6% in the first quarter of 2019, as compared with the same period for 2018, due to the 4% decline in tonnage and a 1% decrease in net revenue per kilo. North America and North Asia net revenues decreased 10% and 11%, respectively, primarily due to a 3% and 9% reduction in tonnage and higher buy rates not fully offset by higher sell rates.

The global airfreight market has been experiencing imbalances between carrier capacity and demand in certain lanes, which is resulting in higher average buy rates. Customers remain focused on improving supply-chain efficiency, reducing overall logistics costs by negotiating lower rates and utilizing ocean freight whenever possible. At the same time, customers are increasingly utilizing airfreight to improve speed to market. We expect these trends to continue in conjunction with carriers' efforts to manage available capacity and the evolution of consumer purchasing behavior, such as online shopping. These conditions could be affected by new product launches and customer responses to governmental trade policies during periods that have historically experienced higher demand. These conditions, 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 and expenses increased 9% and 11%, respectively, in the first quarter of 2019, as compared with the same period for 2018 primarily from 6% growth in container volume.

Ocean freight and ocean services net revenues increased 5% in the first quarter of 2019, as compared with the same period for 2018. The largest component of our ocean freight net revenue was derived from ocean freight consolidation, which represented 46% of ocean freight net revenue in the first quarter of 2019.

Ocean freight consolidation net revenues increased 6% in the first quarter of 2019, as compared with the same period for 2018, due primarily to higher volumes in most regions and higher net revenue per container in North and South Asia. Direct ocean freight forwarding net revenues increased 7%, primarily due to higher volumes in most regions. Order management net revenues increased 2%.

North America ocean freight and ocean services net revenues increased 6% in the first quarter of 2019, primarily due to higher export volumes and growth in direct ocean freight forwarding. North Asia and South Asia net revenues increased 7% and 18%, respectively, due primarily to higher export volumes, increases in net revenue per container and growth in direct ocean freight forwarding and order management.

We expect that pricing volatility will continue as customers solicit bids, react to governmental trade policies, and carriers adapt to changes in capacity and market demand, merge or create alliances with other carriers. Carriers also face new regulatory requirements that become effective in 2020 to reduce the use of sulfur in marine fuel, which is expected to increase their operating and capital costs. These conditions could result in lower margins.

Customs brokerage and other services:

Customs brokerage and other services revenues and expenses increased 22% and 34%, respectively, in the first quarter of 2019, as compared with the same period for 2018, primarily as a result of higher volumes in customs brokerage and road freight and increased costs in import services.

Customs brokerage and other services net revenues increased 8% in the first quarter of 2019, as compared with the same period for 2018, primarily as a result of an increase in customs brokerage, road freight and distribution volumes. 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 14% in the first quarter of 2019, as compared with the same period for 2018, primarily as a result of higher volumes in customs brokerage, road freight and distribution services.

Overhead expenses:

Salaries and related costs increased 5% in the first quarter of 2019, as compared with the same period in 2018, due principally to an increase in the number of employees, primarily in North America, Europe and Asia and higher commissions. The number of employees increased primarily to support increased activity in our business operations.

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 an alignment between branch and corporate performance and shareholder interests. Bonuses to field management in the first quarter of 2019 were up 3%, consistent with branch operating income. Bonuses to executive management are down 7%, as a result of a 3% reduction in consolidated operating income and reductions made to senior executive management bonus pool allocations in order to fund future investments in key personnel. Our management compensation programs have always been incentive-based and performance driven. Salaries and related costs as a percentage of net revenues in the first quarter of 2019 remains unchanged at 54%, as compared to the same period in 2018.

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. 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 the short operating cycle of our services, 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 6% in the first quarter of 2019, as compared with the same period in 2018. The increase in expenses was due to renting additional space, technology-related fees, claims and consulting expenses, partially offset by bad debt recoveries. Other overhead expenses as a percentage of net revenues in the first quarter of 2019 increased by 1% to 17% compared to the same period in 2018. 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.

Income tax expense:

Our consolidated effective income tax rate was 28.3% for the three-month period ended March 31, 2019, as compared to 31.1% for the comparable period in 2018. The effective tax rate in 2019 benefited from share-based compensation deductions as a result of stock option exercises occurring during the quarter that were partially offset by certain expenses that are no longer deductible under the 2017 Tax Act. The effect of higher average foreign tax rates of our international subsidiaries, when compared to the U.S. federal and state tax rates, were partially offset by available U.S foreign tax credits principally as a result of withholding taxes related to our foreign operations and U.S. income tax deductions for Foreign-derived intangible income (FDII). Some elements of the recorded impacts of the 2017 Tax Act could be impacted by further legislative action as well as additional interpretations and guidance issued by the IRS or Treasury. As a result, the amount of income tax recorded in the future may differ, possibly materially. See Note 4 to the condensed consolidated financial statements for additional information.

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, 2019 and 2018 was insignificant. We had no foreign currency derivatives outstanding at March 31, 2019 and December 31, 2018. During the three-month periods ended March 31, 2019 and 2018, net foreign currency losses were approximately $3 million and $4 million, respectively.

International air and ocean freight forwarding and customs brokerage are intensely 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, higher claims 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 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.

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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, 2019 was $289 million as compared with $235 million for the same period in 2018. The increase of $54 million in the first quarter of 2019 is primarily due to changes in working capital, principally as a result of the excess of customer collections over customer billings during the period. At March 31, 2019, working capital was $1,501 million, including cash and cash equivalents of $1,189 million. Other than our recorded lease liabilities, we had no long-term obligations or debt at March 31, 2019. 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. Increases in duty rates could result in increases in the amounts we advance on behalf of our customers. 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, 2019 was $9 million as compared with $14 million in the same period of 2018, primarily for capital expenditures. Capital expenditures in the three months ended March 31, 2019 related primarily to continuing investments in technology, building construction, building and leasehold improvements. Occasionally, we elect to purchase buildings to house staff and to facilitate the staging of customers’ freight. Total anticipated capital expenditures in 2019 are currently estimated to be $50 million. This includes routine capital expenditures and investments in technology.

Cash used in financing activities during the three months ended March 31, 2019 was $17 million as compared with $146 million for the same period in 2018. 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, 2019, we used cash to repurchase 0.6 million shares to reduce the number of total outstanding shares, compared to 2.7 million shares in the same period in 2018.

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 cannot predict what impact ongoing uncertainties in the global economy and political uncertainty may have on our operating results, freight volumes, pricing, amounts advanced on behalf of our customers, changes in consumer demand, carrier stability and capacity, customers’ abilities to pay or on changes in competitors' behavior.

We maintain international unsecured bank lines of credit. At March 31, 2019, we were contingently liable for $70 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 funds necessary 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, 2019, cash and cash equivalent balances of $496 million were held by our non-United States subsidiaries, of which $7 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.

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 that 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 include 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, 2019, would have had the effect of raising operating income approximately $13 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income approximately $11 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, 2019 and 2018 was insignificant. During the three-month periods ended March 31, 2019 and 2018, foreign currency losses were approximately $3 million and $4 million, respectively. We had no foreign currency derivatives outstanding at March 31, 2019 and December 31, 2018. We instead follow a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of March 31, 2019, we had approximately $51 million of net unsettled intercompany transactions. The majority of intercompany billings are resolved within 30 days.

Interest Rate Risk

At March 31, 2019, we had cash and cash equivalents of $1,189 million, of which $729 million was invested at various short-term market interest rates. Other than our recorded lease liabilities, we had no long-term obligations or debt at March 31, 2019. A hypothetical change in the interest rate of 10 basis points at March 31, 2019 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 2019.

Item 4. 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.

In 2018, we adopted new accounting standard Topic 606 Revenue from Contracts with Customers. The adoption of this standard resulted in changes to existing processes and systems. In particular, to capture information to measure the progress of completion of performance obligations under contracts with customers on an on-going basis and these changes are continuing in 2019 as further enhancements to our accounting information systems are introduced. In 2019, we adopted the new accounting standard Topic 842 Leases. The adoption of this accounting standard resulted in changes to existing processes and systems, including the implementation of a new leasing tracking and accounting system, processes and procedures associated with properly identifying and classifying leases, and the calculation and recording of leasehold right-of-use assets and lease liabilities.

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.

16

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, 2019, 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

In addition to the other information set forth in this report, careful consideration should be given to the risk factors under Item 1A Risk Factors in our Annual Report on Form 10-K filed on February 22, 2019. There have been no material changes in Expeditors' risk factors from those disclosed under Item 1A Risk Factors in our annual report on Form 10-K filed on February 22, 2019.

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
Jan 1-31, 2019	—	$	—	—	11,705,484
Feb 1-28, 2019	—	—		—	12,044,536
March 1-31, 2019	587,988	75.40		587,988	11,647,916
Total	587,988	$	75.40	587,988	11,647,916

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. In the first quarter of 2019, 87,988 shares of common stock were repurchased under the Non-Discretionary Stock Repurchase Plan and no further shares are available for future repurchases under this plan as of March 31, 2019.

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, May 2016 and November 2018, the Board of Directors further authorized repurchases down to 188 million, 180 million, 170 million and 160 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 2019, 500,000 shares of common stock were repurchased under the Discretionary Stock Repurchase Plan.

Item 3. Defaults Upon Senior Securities

Not applicable.

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 8, 2019	/s/ JEFFREY S. MUSSER
	Jeffrey S. Musser, President, Chief Executive Officer and Director
May 8, 2019	/s/ BRADLEY S. POWELL
	Bradley S. Powell, Senior Vice President and Chief Financial Officer

19

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 8, 2019

/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 8, 2019

/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, 2019, 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 8, 2019	/S/ JEFFREY S. MUSSER
	Jeffrey S. Musser President, Chief Executive Officer and Director
May 8, 2019	/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, 2019	May 06, 2019
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	EXPD
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
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		171,995,902

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 1,189,429	$ 923,735
Accounts receivable, less allowance for doubtful accounts of $12,727 at March 31, 2019 and $15,345 at December 31, 2018	1,353,725	1,581,530
Deferred contract costs	131,535	159,510
Other	54,305	70,041
Total current assets	2,728,994	2,734,816
Property and equipment, less accumulated depreciation and amortization of $457,513 at March 31, 2019 and $446,977 at December 31, 2018	500,853	504,105
Operating lease right-of-use assets	349,140	0
Goodwill	7,927	7,927
Deferred federal and state income taxes, net	37,781	40,465
Other assets, net	18,217	27,246
Total assets	3,642,912	3,314,559
Current Liabilities:
Accounts payable	768,665	902,259
Accrued expenses, primarily salaries and related costs	220,085	215,813
Contract liabilities	157,040	190,343
Current portion of operating lease liabilities	58,635	0
Federal, state and foreign income taxes	23,502	18,424
Total current liabilities	1,227,927	1,326,839
Noncurrent portion of operating lease liabilities	289,551	0
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued	0	0
Common stock, par value $0.01 per share. Issued and outstanding 171,648 shares at March 31, 2019 and 171,582 shares at December 31, 2018	1,716	1,716
Additional paid-in capital	3,978	1,896
Retained earnings	2,222,562	2,088,707
Accumulated other comprehensive loss	(103,986)	(105,481)
Total shareholders’ equity	2,124,270	1,986,838
Noncontrolling interest	1,164	882
Total equity	2,125,434	1,987,720
Total liabilities and equity	$ 3,642,912	$ 3,314,559

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 12,727	$ 15,345
Property and equipment, accumulated depreciation	$ 457,513	$ 446,977
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	171,648	171,582
Common stock, shares outstanding	171,648	171,582

XML

Condensed Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Revenue from Contract with Customer, Excluding Assessed Tax	$ 2,020,051	$ 1,854,262
Operating Expenses:
Salaries and related	356,910	339,895
Rent and occupancy	41,523	36,913
Depreciation and amortization	13,393	13,922
Selling and promotion	11,076	10,965
Other	43,611	41,325
Total operating expenses	1,832,450	1,661,444
Operating income	187,601	192,818
Other Income (Expense):
Interest income	6,106	4,314
Other, net	1,665	624
Other income (expense), net	7,771	4,938
Earnings before income taxes	195,372	197,756
Income tax expense	55,261	61,556
Net earnings	140,111	136,200
Less net earnings attributable to the noncontrolling interest	412	508
Net earnings attributable to shareholders	$ 139,699	$ 135,692
Diluted earnings attributable to shareholders per share	$ 0.80	$ 0.76
Basic earnings attributable to shareholders per share	$ 0.81	$ 0.77
Weighted average diluted shares outstanding	175,388	179,416
Weighted average basic shares outstanding	171,818	175,900
Airfreight services
Revenues:
Revenue from Contract with Customer, Excluding Assessed Tax	$ 714,901	$ 731,227
Operating Expenses:
Direct Operating Costs	509,210	513,504
Ocean freight and ocean services
Revenues:
Revenue from Contract with Customer, Excluding Assessed Tax	568,641	520,883
Operating Expenses:
Direct Operating Costs	420,331	379,418
Customs brokerage and other services
Revenues:
Revenue from Contract with Customer, Excluding Assessed Tax	736,509	602,152
Operating Expenses:
Direct Operating Costs	$ 436,396	$ 325,502

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net earnings	$ 140,111	$ 136,200
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $521 and $5,512 for the three months ended March 31, 2019 and 2018	1,365	8,851
Other comprehensive income	1,365	8,851
Comprehensive income	141,476	145,051
Less comprehensive income attributable to the noncontrolling interest	282	387
Comprehensive income attributable to shareholders	$ 141,194	$ 144,664

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract]
Foreign currency translation adjustments, tax	$ 521	$ 5,512

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities:
Net earnings	$ 140,111	$ 136,200
Adjustments to reconcile net earnings to net cash from operating activities:
Recoveries on accounts receivable	(1,888)	(265)
Deferred income tax expense	2,108	2,853
Stock compensation expense	13,382	11,267
Depreciation and amortization	13,393	13,922
Other, net	189	48
Changes in operating assets and liabilities:
Decrease in accounts receivable	230,477	100,647
Decrease in accounts payable and accrued expenses	(122,283)	(45,844)
Decrease in deferred contract costs	31,259	3,407
Decrease in contract liabilities	(36,725)	(7,401)
Increase in income taxes payable, net	16,993	19,509
Increase (Decrease) in Other Noncurrent Assets and Liabilities, Net	(2,467)	(1,134)
Net cash from operating activities	289,483	235,477
Investing Activities:
Purchase of property and equipment	(9,435)	(13,796)
Other, net	255	(431)
Net cash from investing activities	(9,180)	(14,227)
Financing Activities:
Proceeds from issuance of common stock	27,190	26,397
Repurchases of common stock	(44,334)	(172,360)
Net cash from financing activities	(17,144)	(145,963)
Effect of exchange rate changes on cash and cash equivalents	2,535	6,515
Increase in cash and cash equivalents	265,694	81,802
Cash and cash equivalents at beginning of period	923,735	1,051,099
Cash and cash equivalents at end of period	1,189,429	1,132,901
Taxes Paid:
Income taxes	$ 37,253	$ 38,519

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

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 22, 2019.

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.

B. Revenue Recognition

The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. The Company's three principal services are the revenue categories presented in the consolidated statements of earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.

The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year. The Company satisfied nearly all performance obligations for the contract liabilities recorded as of December 31, 2018.

C. Leases

Effective January 1, 2019, the Company adopted new lease accounting guidance using a modified retrospective approach and recognizing a right-of-use (ROU) asset and lease liability on the balance sheet. On January 1, 2019, ROU assets and lease liabilities were recorded for all existing leases exceeding one-year terms and were measured at the present value of lease payments over the remaining lease term. The adoption of this accounting standard resulted in recording ROU assets and lease liabilities for operating leases of $343 million and $340 million, respectively, as of January 1, 2019. The adoption of this standard had no impact on retained earnings on the condensed consolidated balance sheet.

In recording the ROU asset and lease liability, the Company elected to apply the following practical expedients:

•Package of practical expedients not to reassess:

◦Whether a contract is or contains a lease,

◦Historical lease classification, and

◦Initial direct costs.

•Use of hindsight when determining the lease term.

Additionally, the Company has elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and chose not to separate nonlease components from lease components and instead to account for each as a single lease component.

The Company determines if an arrangement is a lease at inception. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As most of the Company's leases do not have an implicit rate, the Company uses an incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent not considered fixed, and instead expense variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses on the condensed consolidated statement of earnings.

D. 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 customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $12,727 as of March 31, 2019 and $15,345 as of December 31, 2018. Additions and write-offs have not been significant in the periods presented.

E. 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 disclosures 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 that the Company has self-insured, accrual of various tax liabilities including estimates associated with the U.S. enacted Tax Cuts and Jobs Act (the 2017 Tax Act), accrual of loss contingencies, calculation of share-based compensation expense and estimates related to determining the lease term when measuring ROU assets and lease liabilities. Actual results could be materially different from the estimated provisions and accruals recorded.

F. Recent Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), which amends existing guidance for the accounting of credit losses on financial instruments. Under the ASU, the Company will record a valuation allowance for credit losses that are expected to be incurred over the financial asset’s contractual term. This standard will be effective for the Company on January 1, 2020 and is not expected to have a material effect on the consolidated financial statements as the new credit loss model will primarily apply to the Company's accounts receivable, which are of short duration and for which the Company has not historically experienced significant credit losses. However, the Company is still evaluating the impact of the new prescribed model compared to its current methodology.

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Leases

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

Lessee, Operating Leases

Leases

The Company enters into lease agreements primarily for office and warehouse space in all districts where it conducts business. As of March 31, 2019, all of the Company's leases are operating leases.

Lease cost for the quarter ended March 31, 2019 were all recorded under rent and occupancy expenses on the condensed consolidated statement of earnings and comprised of the following:

Operating lease cost	$	19,955
Variable lease cost	6,394
Total lease cost	$	26,349

Variable lease cost includes shorter-term lease expenses, which are insignificant.

Maturities of lease liabilities as of March 31, 2019 are as follows:

2019	$	55,196
2020	67,926
2021	58,219
2022	52,367
2023	43,512
Thereafter	142,322
Total minimum lease payments	419,542
Less imputed interest	71,356
Lease liability	$	348,186

At December 31, 2018, the last balance sheet presented before the adoption of the new accounting standard Topic 842 Leases, future minimum annual lease payments under all noncancelable leases were as follows:

2019	$	75,227
2020	62,974
2021	47,552
2022	38,352
2023	26,580
Thereafter	67,140
	$	317,825

Other information related to the Company's operating leases as of and for the period ended March 31, 2019 are as follows:

Right-of-use assets obtained in exchange for new operating lease liabilities	$	18,636
Cash paid for amounts included in the measurement of lease liabilities	$	19,246
Weighted-average remaining lease term (in years)	7.51
Weighted-average discount rate	4.99		%

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Share-Based Compensation

3 Months Ended

Mar. 31, 2019

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year. In the three-month periods ended March 31, 2019 and 2018, the Company did not grant any share-based awards.

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. No shares were issued in the three-month periods ended March 31, 2019 and 2018.

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s omnibus incentive, 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 service periods as salaries and related costs. Restricted stock unit awards to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately as there is no substantive service period associated with those awards.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

Income Taxes

In December 2017, the 2017 Tax Act was enacted in the United States. Beginning January 1, 2018, foreign earnings of the Company's international subsidiaries are generally exempt from U.S. Federal income tax upon repatriation. Notwithstanding these changes, certain non-U.S. withholding taxes and foreign exchange gains and losses will continue to be applicable upon the repatriation of foreign earnings.

During 2018 and 2019, the Internal Revenue Service (IRS) and the U.S. Department of Treasury (Treasury) issued additional guidelines and clarifying regulations related to the implementation of the 2017 Tax Act. The Company expects that additional guidance will continue to be issued in future periods. As this guidance is issued, the Company will continue to evaluate the information to determine whether any additional adjustments to its tax provisions are required.

The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as components of current income tax expense. Income tax expense for the three-month periods ended March 31, 2019 and 2018 had no tax expense related to GILTI or BEAT.

In February 2018, the FASB issued amended guidance for reporting comprehensive income to reflect changes resulting from the 2017 Tax Act. The amendment, which had an effective date of January 1, 2019, provided the option to reclassify stranded tax effects resulting from the 2017 Tax Act within accumulated other comprehensive income (AOCI) to retained earnings. The Company elected to not reclassify stranded income tax effects from AOCI to retained earnings, including those related to implementation of the 2017 Tax Act.

The Company's consolidated effective income tax rate was 28.3% for the three-month period ended March 31, 2019, as compared to 31.1% for the comparable period in 2018. The effective tax rate in 2019 benefited from share-based compensation deductions as a result of stock option exercises occurring during the quarter that were partially offset by certain expenses that are no longer deductible under the 2017 Tax Act. The effect of higher average foreign tax rates of the Company's international subsidiaries, when compared to the U.S. federal and state tax rates, were partially offset by available U.S foreign tax credits principally as a result of withholding taxes related to its foreign operations and U.S. income tax deductions for Foreign-derived intangible income (FDII).

As discussed above, some elements of the recorded impacts of the 2017 Tax Act could be impacted by further legislative action as well as additional interpretations and guidance issued by the IRS or Treasury. As a result, the amount of income tax recorded in the future may differ, possibly materially. For further information and discussion of the potential impact of the 2017 Tax Act, refer to Note 5 to the consolidated financial statements in the Company's 2018 Annual Report on Form 10-K.

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Basic and Diluted Earnings per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share

Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan, and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding.

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
2019
Basic earnings attributable to shareholders	$	139,699	171,818	$	0.81
Effect of dilutive potential common shares	—		3,570	—
Diluted earnings attributable to shareholders	$	139,699	175,388	$	0.80
2018
Basic earnings attributable to shareholders	$	135,692	175,900	$	0.77
Effect of dilutive potential common shares	—		3,516	—
Diluted earnings attributable to shareholders	$	135,692	179,416	$	0.76

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Components of Equity

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Components of Equity

Components of Equity

The components of equity for the three months ended March 31,2019 and 2018 are as follows:

	Common Stock
	Shares		Par value			Additional paid-in capital		Retained earnings		Accumulated  other comprehensive loss		Total shareholders’ equity		Noncontrolling interest		Total equity
Balance at December 31, 2018	171,582		$	1,716		1,896		2,088,707		(105,481	)	1,986,838		882		1,987,720
Exercise of stock options and release of restricted shares	654		6			27,184		—		—		27,190		—		27,190
Shares repurchased under provisions of stock repurchase plans	(588	)	(6		)	(38,484	)	(5,844	)	—		(44,334	)	—		(44,334	)
Stock compensation expense	—		—			13,382		—		—		13,382		—		13,382
Net earnings	—		—			—		139,699		—		139,699		412		140,111
Other comprehensive income (loss)	—		—			—		—		1,495		1,495		(130	)	1,365
Balance at March 31, 2019	171,648		$	1,716		3,978		2,222,562		(103,986	)	2,124,270		1,164		2,125,434
Balance at December 31, 2017	176,374		$	1,764		546		2,063,512		(73,964	)	1,991,858		2,515		1,994,373
Cumulative effect of accounting change	—		—			—		(22,357	)	—		(22,357	)	(105	)	(22,462	)
Exercise of stock options and release of restricted shares	596		6			26,391		—		—		26,397		—		26,397
Shares repurchased under provisions of stock repurchase plans	(2,662	)	(27		)	(37,006	)	(135,327	)	—		(172,360	)	—		(172,360	)
Stock compensation expense	—		—			11,267		—		—		11,267		—		11,267
Net earnings	—		—			—		135,692		—		135,692		508		136,200
Other comprehensive income (loss)	—		—			—		—		8,972		8,972		(121	)	8,851
Balance at March 31, 2018	174,308		$	1,743		1,198		2,041,520		(64,992	)	1,979,469		2,797		1,982,266

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, 2019 and 2018, 88 and 446 shares were repurchased at an average price of $74.03 and $65.68 per share, respectively. As of March 31, 2019, all shares authorized for repurchase under this plan have been repurchased.

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 160 million shares of common stock. During the three-month period ended March 31, 2019, 500 shares were repurchased at an average price of $75.64 per share, compared to 2,216 shares at an average price of $64.58 per share during the same period in 2018.

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 7, 2019, the Board of Directors declared a semi-annual dividend of $0.50 per share payable on June 17, 2019 to shareholders of record as of June 3, 2019.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

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, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	460,584	$	460,584	$	427,307	$	427,307
Corporate commercial paper	692,669		693,248		467,300		467,760
Time deposits	36,176		36,176		29,128		29,128
Total cash and cash equivalents	$	1,189,429	$	1,190,008	$	923,735	$	924,195

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).

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Contingencies

3 Months Ended

Mar. 31, 2019

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, 2019, 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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Business Segment Information

3 Months Ended

Mar. 31, 2019

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, 2019:
Revenues from unaffiliated customers	$	681,424		85,103	35,949		617,000	171,930	320,049		108,596	—		2,020,051
Transfers between geographic areas 2	(21,640		)	6,307	(1,770	)	15,853	5,249	(7,359	)	4,079	(719	)	—
Total revenues	$	659,784		91,410	34,179		632,853	177,179	312,690		112,675	(719	)	2,020,051
Net revenues1	$	292,429		35,169	15,063		134,207	47,369	96,795		33,172	(90	)	654,114
Operating income	$	74,013		10,960	2,636		65,780	15,907	13,952		4,361	(8	)	187,601
Identifiable assets at period end	$	1,906,278		175,034	71,168		511,589	174,512	579,924		234,195	(9,788	)	3,642,912
Capital expenditures	$	6,915		228	93		344	176	982		697	—		9,435
Depreciation and amortization	$	8,222		467	432		1,407	536	1,831		498	—		13,393
Equity	$	1,401,450		82,170	28,581		238,518	114,290	165,718		126,953	(32,246	)	2,125,434
Three months ended March 31, 2018:
Revenues from unaffiliated customers	$	534,869		76,525	32,722		630,572	168,600	305,792		105,182	—		1,854,262
Transfers between geographic areas	28,881			3,562	3,387		6,017	6,550	14,188		5,355	(67,940	)	—
Total revenues	$	563,750		80,087	36,109		636,589	175,150	319,980		110,537	(67,940	)	1,854,262
Net revenues1	$	277,185		30,447	14,745		137,208	44,406	98,635		33,201	11		635,838
Operating income	$	69,648		9,018	2,370		69,923	15,132	19,278		7,438	11		192,818
Identifiable assets at period end	$	1,558,181		165,368	55,036		542,965	153,411	533,012		208,173	(3,665	)	3,212,481
Capital expenditures	$	3,171		1,528	505		784	329	7,191		288	—		13,796
Depreciation and amortization	$	8,765		398	368		1,376	583	1,976		456	—		13,922
Equity	$	1,247,522		68,050	27,226		278,651	105,642	160,038		128,487	(33,350	)	1,982,266

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.

²During the quarter ended March 31, 2019, the Company revised the process used to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation expenses for freight service transactions between Company origin and destination locations. There were no changes for services rendered at the origin, such as pick-up and delivery to port, nor for services rendered at the destination, such as customs clearance and final delivery. The change in process had no impact on reported segment net revenues or operating income nor on reported consolidated revenues or expenses. Prior year segment revenues have not been revised.

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2019		2018
Total revenues	$	2,020,051	$	1,854,262
Expenses:
Airfreight services	509,210		513,504
Ocean freight and ocean services	420,331		379,418
Customs brokerage and other services	436,396		325,502
Net revenues	$	654,114	$	635,838

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

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 22, 2019.

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.

Revenue Recognition, Policy

The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. The Company's three principal services are the revenue categories presented in the consolidated statements of earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.

The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year. The Company satisfied nearly all performance obligations for the contract liabilities recorded as of December 31, 2018.

Leases, Policy

Effective January 1, 2019, the Company adopted new lease accounting guidance using a modified retrospective approach and recognizing a right-of-use (ROU) asset and lease liability on the balance sheet. On January 1, 2019, ROU assets and lease liabilities were recorded for all existing leases exceeding one-year terms and were measured at the present value of lease payments over the remaining lease term. The adoption of this accounting standard resulted in recording ROU assets and lease liabilities for operating leases of $343 million and $340 million, respectively, as of January 1, 2019. The adoption of this standard had no impact on retained earnings on the condensed consolidated balance sheet.

In recording the ROU asset and lease liability, the Company elected to apply the following practical expedients:

•Package of practical expedients not to reassess:

◦Whether a contract is or contains a lease,

◦Historical lease classification, and

◦Initial direct costs.

•Use of hindsight when determining the lease term.

Additionally, the Company has elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and chose not to separate nonlease components from lease components and instead to account for each as a single lease component.

The Company determines if an arrangement is a lease at inception. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As most of the Company's leases do not have an implicit rate, the Company uses an incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variable payments from lease ROU assets and lease liabilities, to the extent not considered fixed, and instead expense variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses on the condensed consolidated statement of earnings.

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 customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $12,727 as of March 31, 2019 and $15,345 as of December 31, 2018. 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 disclosures 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 that the Company has self-insured, accrual of various tax liabilities including estimates associated with the U.S. enacted Tax Cuts and Jobs Act (the 2017 Tax Act), accrual of loss contingencies, calculation of share-based compensation expense and estimates related to determining the lease term when measuring ROU assets and lease liabilities. Actual results could be materially different from the estimated provisions and accruals recorded.

New Accounting Pronouncements, Policy

In June 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), which amends existing guidance for the accounting of credit losses on financial instruments. Under the ASU, the Company will record a valuation allowance for credit losses that are expected to be incurred over the financial asset’s contractual term. This standard will be effective for the Company on January 1, 2020 and is not expected to have a material effect on the consolidated financial statements as the new credit loss model will primarily apply to the Company's accounts receivable, which are of short duration and for which the Company has not historically experienced significant credit losses. However, the Company is still evaluating the impact of the new prescribed model compared to its current methodology.

Stock Plans, Policy

The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s omnibus incentive, 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 service periods as salaries and related costs. Restricted stock unit awards to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately as there is no substantive service period associated with those awards.

Income Taxes, Policy

In December 2017, the 2017 Tax Act was enacted in the United States. Beginning January 1, 2018, foreign earnings of the Company's international subsidiaries are generally exempt from U.S. Federal income tax upon repatriation. Notwithstanding these changes, certain non-U.S. withholding taxes and foreign exchange gains and losses will continue to be applicable upon the repatriation of foreign earnings.

During 2018 and 2019, the Internal Revenue Service (IRS) and the U.S. Department of Treasury (Treasury) issued additional guidelines and clarifying regulations related to the implementation of the 2017 Tax Act. The Company expects that additional guidance will continue to be issued in future periods. As this guidance is issued, the Company will continue to evaluate the information to determine whether any additional adjustments to its tax provisions are required.

The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as components of current income tax expense. Income tax expense for the three-month periods ended March 31, 2019 and 2018 had no tax expense related to GILTI or BEAT.

In February 2018, the FASB issued amended guidance for reporting comprehensive income to reflect changes resulting from the 2017 Tax Act. The amendment, which had an effective date of January 1, 2019, provided the option to reclassify stranded tax effects resulting from the 2017 Tax Act within accumulated other comprehensive income (AOCI) to retained earnings. The Company elected to not reclassify stranded income tax effects from AOCI to retained earnings, including those related to implementation of the 2017 Tax Act.

Earnings Per Share, Policy

Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan, and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding.

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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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

Lease, Cost

Lease cost for the quarter ended March 31, 2019 were all recorded under rent and occupancy expenses on the condensed consolidated statement of earnings and comprised of the following:

Operating lease cost	$	19,955
Variable lease cost	6,394
Total lease cost	$	26,349

Variable lease cost includes shorter-term lease expenses, which are insignificant.

Lessee, Operating Lease, Liability, Maturity

Maturities of lease liabilities as of March 31, 2019 are as follows:

2019	$	55,196
2020	67,926
2021	58,219
2022	52,367
2023	43,512
Thereafter	142,322
Total minimum lease payments	419,542
Less imputed interest	71,356
Lease liability	$	348,186

Schedule of Future Minimum Rental Payments for Operating Leases

At December 31, 2018, the last balance sheet presented before the adoption of the new accounting standard Topic 842 Leases, future minimum annual lease payments under all noncancelable leases were as follows:

2019	$	75,227
2020	62,974
2021	47,552
2022	38,352
2023	26,580
Thereafter	67,140
	$	317,825

Other information related to leases

Other information related to the Company's operating leases as of and for the period ended March 31, 2019 are as follows:

Right-of-use assets obtained in exchange for new operating lease liabilities	$	18,636
Cash paid for amounts included in the measurement of lease liabilities	$	19,246
Weighted-average remaining lease term (in years)	7.51
Weighted-average discount rate	4.99		%

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Basic and Diluted Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2019

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
2019
Basic earnings attributable to shareholders	$	139,699	171,818	$	0.81
Effect of dilutive potential common shares	—		3,570	—
Diluted earnings attributable to shareholders	$	139,699	175,388	$	0.80
2018
Basic earnings attributable to shareholders	$	135,692	175,900	$	0.77
Effect of dilutive potential common shares	—		3,516	—
Diluted earnings attributable to shareholders	$	135,692	179,416	$	0.76

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Components of Equity (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Schedule of Components of Equity Disclosure

The components of equity for the three months ended March 31,2019 and 2018 are as follows:

	Common Stock
	Shares		Par value			Additional paid-in capital		Retained earnings		Accumulated  other comprehensive loss		Total shareholders’ equity		Noncontrolling interest		Total equity
Balance at December 31, 2018	171,582		$	1,716		1,896		2,088,707		(105,481	)	1,986,838		882		1,987,720
Exercise of stock options and release of restricted shares	654		6			27,184		—		—		27,190		—		27,190
Shares repurchased under provisions of stock repurchase plans	(588	)	(6		)	(38,484	)	(5,844	)	—		(44,334	)	—		(44,334	)
Stock compensation expense	—		—			13,382		—		—		13,382		—		13,382
Net earnings	—		—			—		139,699		—		139,699		412		140,111
Other comprehensive income (loss)	—		—			—		—		1,495		1,495		(130	)	1,365
Balance at March 31, 2019	171,648		$	1,716		3,978		2,222,562		(103,986	)	2,124,270		1,164		2,125,434
Balance at December 31, 2017	176,374		$	1,764		546		2,063,512		(73,964	)	1,991,858		2,515		1,994,373
Cumulative effect of accounting change	—		—			—		(22,357	)	—		(22,357	)	(105	)	(22,462	)
Exercise of stock options and release of restricted shares	596		6			26,391		—		—		26,397		—		26,397
Shares repurchased under provisions of stock repurchase plans	(2,662	)	(27		)	(37,006	)	(135,327	)	—		(172,360	)	—		(172,360	)
Stock compensation expense	—		—			11,267		—		—		11,267		—		11,267
Net earnings	—		—			—		135,692		—		135,692		508		136,200
Other comprehensive income (loss)	—		—			—		—		8,972		8,972		(121	)	8,851
Balance at March 31, 2018	174,308		$	1,743		1,198		2,041,520		(64,992	)	1,979,469		2,797		1,982,266

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

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, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	460,584	$	460,584	$	427,307	$	427,307
Corporate commercial paper	692,669		693,248		467,300		467,760
Time deposits	36,176		36,176		29,128		29,128
Total cash and cash equivalents	$	1,189,429	$	1,190,008	$	923,735	$	924,195

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Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

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, 2019:
Revenues from unaffiliated customers	$	681,424		85,103	35,949		617,000	171,930	320,049		108,596	—		2,020,051
Transfers between geographic areas 2	(21,640		)	6,307	(1,770	)	15,853	5,249	(7,359	)	4,079	(719	)	—
Total revenues	$	659,784		91,410	34,179		632,853	177,179	312,690		112,675	(719	)	2,020,051
Net revenues1	$	292,429		35,169	15,063		134,207	47,369	96,795		33,172	(90	)	654,114
Operating income	$	74,013		10,960	2,636		65,780	15,907	13,952		4,361	(8	)	187,601
Identifiable assets at period end	$	1,906,278		175,034	71,168		511,589	174,512	579,924		234,195	(9,788	)	3,642,912
Capital expenditures	$	6,915		228	93		344	176	982		697	—		9,435
Depreciation and amortization	$	8,222		467	432		1,407	536	1,831		498	—		13,393
Equity	$	1,401,450		82,170	28,581		238,518	114,290	165,718		126,953	(32,246	)	2,125,434
Three months ended March 31, 2018:
Revenues from unaffiliated customers	$	534,869		76,525	32,722		630,572	168,600	305,792		105,182	—		1,854,262
Transfers between geographic areas	28,881			3,562	3,387		6,017	6,550	14,188		5,355	(67,940	)	—
Total revenues	$	563,750		80,087	36,109		636,589	175,150	319,980		110,537	(67,940	)	1,854,262
Net revenues1	$	277,185		30,447	14,745		137,208	44,406	98,635		33,201	11		635,838
Operating income	$	69,648		9,018	2,370		69,923	15,132	19,278		7,438	11		192,818
Identifiable assets at period end	$	1,558,181		165,368	55,036		542,965	153,411	533,012		208,173	(3,665	)	3,212,481
Capital expenditures	$	3,171		1,528	505		784	329	7,191		288	—		13,796
Depreciation and amortization	$	8,765		398	368		1,376	583	1,976		456	—		13,922
Equity	$	1,247,522		68,050	27,226		278,651	105,642	160,038		128,487	(33,350	)	1,982,266

Schedule of Net Revenues Calculation

The following table presents the calculation of consolidated net revenues:

	Three months ended
	March 31,
	2019		2018
Total revenues	$	2,020,051	$	1,854,262
Expenses:
Airfreight services	509,210		513,504
Ocean freight and ocean services	420,331		379,418
Customs brokerage and other services	436,396		325,502
Net revenues	$	654,114	$	635,838

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	$ 349,140		$ 0
Operating Lease, Liability	348,186
Accounts receivable, allowance for doubtful accounts	$ 12,727		$ 15,345
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset		$ 343,000
Operating Lease, Liability		$ 340,000

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Leases (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Lease, Cost [Abstract]
Operating lease cost	$ 19,955
Variable lease cost	6,394
Total lease cost	26,349
Operating Lease Liabilities, Payments, Due, Rolling Maturity [Abstract]
2019	55,196
2020	67,926
2021	58,219
2022	52,367
2023	43,512
Thereafter	142,322
Total minimum lease payments	419,542
Less imputed interest	71,356
Lease liability	348,186
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2019		$ 75,227
2020		62,974
2021		47,552
2022		38,352
2023		26,580
Thereafter		67,140
Operating Leases, Future Minimum Payments Due		$ 317,825
Supplemental Cash Flow Information Related to Leases [Abstract]
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	18,636
Cash paid for amounts included in measurement of lease liabilities	$ 19,246
Operating Lease, Weighted Average Discount Rate, Percent	4.99%
Weighted-average remaining lease term [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	7 years 6 months 4 days

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Share-Based Compensation - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	0	0
Stock Issued During Period, Shares, Employee Stock Purchase Plans	0	0

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Income Taxes Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Taxes [Line Items]
Income tax expense	$ 55,261,000	$ 61,556,000
Effective income tax rate reconciliation, percent	28.30%	31.10%
Base Erosion and Anti-Abuse Tax
Income Taxes [Line Items]
Income tax expense	$ 0	$ 0
Global Intangible Low-Taxed Income
Income Taxes [Line Items]
Income tax expense	$ 0	$ 0

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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, 2019	Mar. 31, 2018
Net Earnings Attributable to Shareholders
Basic earnings attributable to shareholders	$ 139,699	$ 135,692
Diluted earnings attributable to shareholders	$ 139,699	$ 135,692
Weighted Average Shares
Weighted average basic shares outstanding	171,818	175,900
Effect of dilutive potential common shares	3,570	3,516
Weighted average diluted shares outstanding	175,388	179,416
Earnings Per Share
Basic earnings attributable to shareholders per share	$ 0.81	$ 0.77
Diluted earnings attributable to shareholders per share	$ 0.80	$ 0.76

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Components of Equity (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares, outstanding	171,648		171,582
Beginning balance	$ 1,987,720	$ 1,994,373
Cumulative effect of accounting change		(22,462)
Exercise of stock options and release of restricted shares	27,190	26,397
Shares repurchased under provisions of stock repurchase plans	(44,334)	(172,360)
Stock compensation expense	13,382	11,267
Net earnings	140,111	136,200
Other comprehensive (loss) income	1,365	8,851
Ending balance	2,125,434	1,982,266
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(105,481)	(73,964)
Other comprehensive (loss) income	1,495	8,972
Ending balance	(103,986)	(64,992)
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	2,088,707	2,063,512
Cumulative effect of accounting change		(22,357)
Shares repurchased under provisions of stock repurchase plans	(5,844)	(135,327)
Net earnings	139,699	135,692
Ending balance	2,222,562	2,041,520
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	1,896	546
Exercise of stock options and release of restricted shares	27,184	26,391
Shares repurchased under provisions of stock repurchase plans	(38,484)	(37,006)
Stock compensation expense	13,382	11,267
Ending balance	$ 3,978	$ 1,198
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares, outstanding	171,648	174,308	171,582	176,374
Beginning balance	$ 1,716	$ 1,764
Exercise of stock options and release of restricted shares (In shares)	654	596
Exercise of stock options and release of restricted shares	$ 6	$ 6
Shares repurchased under provisions of stock repurchase plans, shares	(588)	(2,662)
Shares repurchased under provisions of stock repurchase plans	$ (6)	$ (27)
Ending balance	1,716	1,743
Shareholders' Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	1,986,838	1,991,858
Cumulative effect of accounting change		(22,357)
Exercise of stock options and release of restricted shares	27,190	26,397
Shares repurchased under provisions of stock repurchase plans	(44,334)	(172,360)
Stock compensation expense	13,382	11,267
Net earnings	139,699	135,692
Other comprehensive (loss) income	1,495	8,972
Ending balance	2,124,270	1,979,469
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	882	2,515
Cumulative effect of accounting change		(105)
Net earnings	412	508
Other comprehensive (loss) income	(130)	(121)
Ending balance	$ 1,164	$ 2,797

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Components Of Equity - Additional Information (Detail) - $ / shares shares in Thousands		3 Months Ended
	May 07, 2019	Mar. 31, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Expected common stock shares issued and outstanding		160,000
Non-Discretionary Plan
Class of Stock [Line Items]
Shares repurchased		88	446
Average price per share		$ 74.03	$ 65.68
Discretionary Plan
Class of Stock [Line Items]
Shares repurchased		500	2,216
Average price per share		$ 75.64	$ 64.58
Subsequent Event
Class of Stock [Line Items]
Date of declaration of dividends	May 07, 2019
Dividend declared per share	$ 0.50
Date of dividend payment	Jun. 17, 2019
Dividends payable to shareholders date of record	Jun. 03, 2019

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Fair Value of Financial Instruments - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	$ 1,189,429	$ 923,735	$ 1,132,901	$ 1,051,099
Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	1,189,429	923,735
Cost | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	460,584	427,307
Corporate commercial paper	692,669	467,300
Time deposits	36,176	29,128
Fair Value | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	460,584	427,307
Corporate commercial paper	693,248	467,760
Time deposits	36,176	29,128
Total cash and cash equivalents	$ 1,190,008	$ 924,195

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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, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		$ 2,020,051	$ 1,854,262
Net revenues	[1]	654,114	635,838
Operating income		187,601	192,818
Identifiable assets at period end		3,642,912	3,212,481	$ 3,314,559
Capital expenditures		9,435	13,796
Depreciation and amortization		13,393	13,922
Equity		2,125,434	1,982,266	$ 1,987,720	$ 1,994,373
United States Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		681,424	534,869
Other North America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		85,103	76,525
Latin America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		35,949	32,722
North Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		617,000	630,572
South Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		171,930	168,600
Europe Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		320,049	305,792
Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		108,596	105,182
Geography Eliminations | United States Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		(21,640)	28,881
Geography Eliminations | Other North America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		6,307	3,562
Geography Eliminations | Latin America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		(1,770)	3,387
Geography Eliminations | North Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		15,853	6,017
Geography Eliminations | South Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		5,249	6,550
Geography Eliminations | Europe Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		(7,359)	14,188
Geography Eliminations | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		4,079	5,355
Operating Segments | United States Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		659,784	563,750
Net revenues	[1]	292,429	277,185
Operating income		74,013	69,648
Identifiable assets at period end		1,906,278	1,558,181
Capital expenditures		6,915	3,171
Depreciation and amortization		8,222	8,765
Equity		1,401,450	1,247,522
Operating Segments | Other North America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		91,410	80,087
Net revenues	[1]	35,169	30,447
Operating income		10,960	9,018
Identifiable assets at period end		175,034	165,368
Capital expenditures		228	1,528
Depreciation and amortization		467	398
Equity		82,170	68,050
Operating Segments | Latin America Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		34,179	36,109
Net revenues	[1]	15,063	14,745
Operating income		2,636	2,370
Identifiable assets at period end		71,168	55,036
Capital expenditures		93	505
Depreciation and amortization		432	368
Equity		28,581	27,226
Operating Segments | North Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		632,853	636,589
Net revenues	[1]	134,207	137,208
Operating income		65,780	69,923
Identifiable assets at period end		511,589	542,965
Capital expenditures		344	784
Depreciation and amortization		1,407	1,376
Equity		238,518	278,651
Operating Segments | South Asia Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		177,179	175,150
Net revenues	[1]	47,369	44,406
Operating income		15,907	15,132
Identifiable assets at period end		174,512	153,411
Capital expenditures		176	329
Depreciation and amortization		536	583
Equity		114,290	105,642
Operating Segments | Europe Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		312,690	319,980
Net revenues	[1]	96,795	98,635
Operating income		13,952	19,278
Identifiable assets at period end		579,924	533,012
Capital expenditures		982	7,191
Depreciation and amortization		1,831	1,976
Equity		165,718	160,038
Operating Segments | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		112,675	110,537
Net revenues	[1]	33,172	33,201
Operating income		4,361	7,438
Identifiable assets at period end		234,195	208,173
Capital expenditures		697	288
Depreciation and amortization		498	456
Equity		126,953	128,487
Intersegment Eliminations
Segment Reporting Information [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		(719)	(67,940)
Net revenues	[1]	(90)	11
Operating income		(8)	11
Identifiable assets at period end		(9,788)	(3,665)
Equity		$ (32,246)	$ (33,350)

[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, 2019	Mar. 31, 2018
Schedule of Net Revenues Calculation [Line Items]
Total revenues		$ 2,020,051	$ 1,854,262
Expenses [Abstract]
Net revenues	[1]	654,114	635,838
Airfreight services
Schedule of Net Revenues Calculation [Line Items]
Total revenues		714,901	731,227
Expenses [Abstract]
Direct Operating Costs		509,210	513,504
Ocean freight and ocean services
Schedule of Net Revenues Calculation [Line Items]
Total revenues		568,641	520,883
Expenses [Abstract]
Direct Operating Costs		420,331	379,418
Customs brokerage and other services
Schedule of Net Revenues Calculation [Line Items]
Total revenues		736,509	602,152
Expenses [Abstract]
Direct Operating Costs		$ 436,396	$ 325,502

[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.