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 September 30, 2015

OR

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

For the transition period from             to             

Commission File Number: 0-13468

___________________________________________

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

___________________________________________

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

(206) 674-3400

(Registrant’s telephone number, including area code)

______________________________________________________

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

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

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

Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

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

Yes o No x

At November 2, 2015, the number of shares outstanding of the issuer’s Common Stock was 186,413,350.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	September 30, 2015			December 31, 2014
Current Assets:
Cash and cash equivalents	$	968,683		$	927,107
Short-term investments	8,260			40,336
Accounts receivable, less allowance for doubtful accounts of $7,309 at September 30, 2015 and $7,119 at December 31, 2014	1,166,300			1,236,042
Deferred Federal and state income taxes	20,862			20,279
Other	71,355			65,486
Total current assets	2,235,460			2,289,250
Property and equipment, less accumulated depreciation and amortization of $379,996 at September 30, 2015 and $371,756 at December 31, 2014	527,893			538,415
Goodwill	7,927			7,927
Other assets, net	55,738			55,313
Total assets	$	2,827,018		$	2,890,905
Current Liabilities:
Accounts payable	718,555			770,238
Accrued expenses, primarily salaries and related costs	208,771			192,468
Federal, state and foreign income taxes	27,876			21,077
Total current liabilities	955,202			983,783
Deferred Federal and state income taxes	29,624			35,514
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued	—			—
Common stock, par value $0.01 per share. Issued and outstanding 186,183,201 shares at September 30, 2015 and 191,655,690 shares at December 31, 2014	1,862			1,916
Additional paid-in capital	874			1,113
Retained earnings	1,910,388			1,903,196
Accumulated other comprehensive loss	(74,079		)	(37,817		)
Total shareholders’ equity	1,839,045			1,868,408
Noncontrolling interest	3,147			3,200
Total equity	1,842,192			1,871,608
Total liabilities and equity	$	2,827,018		$	2,890,905

See accompanying notes to condensed consolidated financial statements.

2

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except share data)

(Unaudited)

	Three months ended					Nine months ended
	September 30,					September 30,
	2015			2014		2015		2014
Revenues:
Airfreight services	$	659,607		$	686,434	$	2,060,863	$	2,000,829
Ocean freight and ocean services	559,976			600,483		1,702,465		1,606,145
Customs brokerage and other services	431,749			418,188		1,257,083		1,188,917
Total revenues	1,651,332			1,705,105		5,020,411		4,795,891
Operating Expenses:
Airfreight services	464,161			516,969		1,484,150		1,503,064
Ocean freight and ocean services	416,075			475,460		1,294,887		1,266,551
Customs brokerage and other services	201,115			199,420		589,766		563,720
Salaries and related costs	295,566			272,548		861,509		789,257
Rent and occupancy costs	25,747			26,396		76,106		76,959
Depreciation and amortization	11,475			12,741		34,424		37,540
Selling and promotion	10,370			9,240		30,146		26,704
Other	34,930			33,200		105,931		95,319
Total operating expenses	1,459,439			1,545,974		4,476,919		4,359,114
Operating income	191,893			159,131		543,492		436,777
Other Income (Expense):
Interest income	2,666			2,793		8,034		8,254
Other, net	(3,085		)	2,336		753		5,245
Other (expense) income, net	(419		)	5,129		8,787		13,499
Earnings before income taxes	191,474			164,260		552,279		450,276
Income tax expense	72,738			61,463		207,882		171,556
Net earnings	118,736			102,797		344,397		278,720
Less net earnings attributable to the noncontrolling interest	426			416		1,623		1,213
Net earnings attributable to shareholders	$	118,310		$	102,381	$	342,774	$	277,507
Diluted earnings attributable to shareholders per share	$	0.62		$	0.53	$	1.79	$	1.40
Basic earnings attributable to shareholders per share	$	0.63		$	0.53	$	1.80	$	1.41
Dividends declared and paid per common share	$	—		$	—	$	0.36	$	0.32
Weighted average diluted shares outstanding	189,641,774			195,001,267		191,447,796		197,953,810
Weighted average basic shares outstanding	188,424,400			194,419,071		190,231,986		197,305,251

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						Nine months ended
	September 30,						September 30,
	2015			2014			2015			2014
Net earnings	$	118,736		$	102,797		$	344,397		$	278,720
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $11,669 and $9,954 for the three months ended September 30, 2015 and 2014 and $19,866 and $8,560 for the nine months ended September 30, 2015 and 2014	(21,692		)	(18,351		)	(37,081		)	(15,743		)
Reclassification adjustment for foreign currency realized losses, net of tax of $61 for the nine months ended September 30, 2014	—			—			—			111
Other comprehensive loss	(21,692		)	(18,351		)	(37,081		)	(15,632		)
Comprehensive income	97,044			84,446			307,316			263,088
Less comprehensive income attributable to the noncontrolling interest	35			234			804			1,094
Comprehensive income attributable to shareholders	$	97,009		$	84,212		$	306,512		$	261,994

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						Nine months ended
	September 30,						September 30,
	2015			2014			2015			2014
Operating Activities:
Net earnings	$	118,736		$	102,797		$	344,397		$	278,720
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses (recoveries) on accounts receivable	134			564			995			(55		)
Deferred income tax (benefit) expense	(7,611		)	(2,085		)	13,312			8,000
Excess tax benefits from stock plans	—			(47		)	(1,846		)	(1,031		)
Stock compensation expense	10,919			10,049			32,489			32,220
Depreciation and amortization	11,475			12,741			34,424			37,540
Other	2			139			115			345
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	2,466			(58,984		)	18,910			(131,374		)
(Decrease) increase in accounts payable and accrued expenses	(19,622		)	23,113			3,311			114,036
Increase (decrease) in income taxes payable, net	19,978			2,050			4,110			(27,115		)
Increase in other current assets	(3,801		)	(3,646		)	(1,419		)	(5,852		)
Net cash from operating activities	132,676			86,691			448,798			305,434
Investing Activities:
Purchase of short-term investments	—			(40,275		)	(47,008		)	(136,706		)
Proceeds from maturities of short-term investments	38,788			86,107			79,084			122,726
Purchase of property and equipment	(9,546		)	(8,255		)	(31,903		)	(26,650		)
Escrow deposit for land acquisition	—			—			—			(27,101		)
Other, net	(2,666		)	370			(2,482		)	504
Net cash from investing activities	26,576			37,947			(2,309		)	(67,227		)
Financing Activities:
Proceeds from issuance of common stock	54,606			28,452			114,701			58,469
Repurchases of common stock	(209,970		)	(117,044		)	(415,475		)	(475,160		)
Excess tax benefits from stock plans	—			47			1,846			1,031
Dividends paid	—			—			(68,781		)	(62,807		)
Distributions to noncontrolling interest	—			—			(857		)	(85		)
Net cash from financing activities	(155,364		)	(88,545		)	(368,566		)	(478,552		)
Effect of exchange rate changes on cash and cash equivalents	(20,932		)	(16,174		)	(36,347		)	(16,827		)
(Decrease) increase in cash and cash equivalents	(17,044		)	19,919			41,576			(257,172		)
Cash and cash equivalents at beginning of period	985,727			970,561			927,107			1,247,652
Cash and cash equivalents at end of period	$	968,683		$	990,480		$	968,683		$	990,480
Taxes Paid:
Income taxes	$	60,374		$	61,899		$	190,024		$	195,358

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 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 26, 2015.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for share data. Effective in the first quarter of 2015, the Company changed the organization of the management of its Asia Pacific region, splitting it into North and South Asia. Accordingly, the financial information previously combined under one geographical operating segment for Asia Pacific is now reported as North Asia and South Asia segments for all periods presented.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $7,309 as of September 30, 2015 and $7,119 as of December 31, 2014. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

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

D. Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 (Topic 606) “Revenue from Contracts with Customers”, as amended. This update, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605 - “Revenue Recognition” and most industry-specific guidance throughout the industry topics of the FASB ASC, substantially converges revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (IFRS), providing a single, comprehensive framework for recognizing revenue. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements and related disclosures. However, at this time, based on the nature of the Company's operations, the adoption of ASU 2014-09 is not expected to have a material impact on the amount or timing of revenue recognized or the Company's revenue recognition policies.

6

Note 2. Share-Based Compensation

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. On May 21, 2015, the shareholders approved the 2015 Stock Option Plan, which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted. The Company has historically granted the majority of its options during the second quarter of each fiscal year. For the nine months ended September 30, 2015 and 2014, 2,955,750 and 2,289,600 options were granted, respectively. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and 699,438 and 671,775 were issued in the nine-month periods ended September 30, 2015 and 2014, respectively. In the second quarter of 2015 and 2014, respectively, 33,848 and 30,702 fully vested shares were granted to independent directors.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Nine months ended September 30,
	2015			2014
Dividend yield	1.60		%	1.50 - 1.51%
Volatility - stock option plans	29 - 34%			36		%
Volatility - stock purchase rights plans	20		%	20		%
Risk free interest rates	0.30 - 2.04%			0.11 - 2.27%
Expected life (years) - stock option plans	6.41 - 7.47			6.52 - 7.43
Expected life (years) - stock purchase rights plans	1			1
Weighted average fair value of stock options granted during the period	$	13.44		$	14.08
Weighted average fair value of stock purchase rights granted during the period	$	10.45		$	9.60

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

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Stock compensation expense	$	10,919	$	10,049	$	32,489	$	32,220
Recognized tax benefit	$	1,571	$	988	$	4,305	$	3,115

7

Note 3. Basic and Diluted Earnings per Share

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

	Three months ended
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	118,310	188,424,400	$	0.63
Effect of dilutive potential common shares	—		1,217,374	—
Diluted earnings attributable to shareholders	$	118,310	189,641,774	$	0.62
2014
Basic earnings attributable to shareholders	$	102,381	194,419,071	$	0.53
Effect of dilutive potential common shares	—		582,196	—
Diluted earnings attributable to shareholders	$	102,381	195,001,267	$	0.53

	Nine months ended
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	342,774	190,231,986	$	1.80
Effect of dilutive potential common shares	—		1,215,810	—
Diluted earnings attributable to shareholders	$	342,774	191,447,796	$	1.79
2014
Basic earnings attributable to shareholders	$	277,507	197,305,251	$	1.41
Effect of dilutive potential common shares	—		648,559	—
Diluted earnings attributable to shareholders	$	277,507	197,953,810	$	1.40

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

	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
Shares	8,379,877	14,886,109	9,713,102	16,532,462

8

Note 4. Components of Equity

The components of equity for the nine months ended September 30,2015 and 2014 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2014	$	1,868,408		3,200		1,871,608
Exercise of stock options	88,851			—		88,851
Issuance of shares under stock purchase plan	25,850			—		25,850
Shares repurchased under provisions of stock repurchase plans	(415,475		)	—		(415,475	)
Stock compensation expense	32,489			—		32,489
Tax benefits from stock plans, net	1,191			—		1,191
Net earnings	342,774			1,623		344,397
Other comprehensive loss	(36,262		)	(819	)	(37,081	)
Dividends paid ($0.36 per share)	(68,781		)	—		(68,781	)
Distributions to noncontrolling interest	—			(857	)	(857	)
Balance at September 30, 2015	$	1,839,045		3,147		1,842,192
Balance at December 31, 2013	$	2,084,783		1,548		2,086,331
Exercise of stock options	34,669			—		34,669
Issuance of shares under stock purchase plan	23,800			—		23,800
Shares repurchased under provisions of stock repurchase plans	(475,160		)	—		(475,160	)
Stock compensation expense	32,220			—		32,220
Tax benefits from stock plans, net	1,031			—		1,031
Net earnings	277,507			1,213		278,720
Other comprehensive loss	(15,513		)	(119	)	(15,632	)
Dividends paid ($0.32 per share)	(62,807		)	—		(62,807	)
Purchase of noncontrolling interest	843					843
Distributions to noncontrolling interest	—			(85	)	(85	)
Balance at September 30, 2014	$	1,901,373		2,557		1,903,930

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 nine month periods ended September 30, 2015 and 2014, 2,242,579 and 1,364,974 shares were repurchased at an average price of $47.93 and $42.73 per share, respectively. The Company also has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding stock to 180 million shares of common stock. During the nine-month periods ended September 30, 2015 and 2014, 6,395,506 and 10,057,648 shares were repurchased at an average price of $48.16 and $41.44 per share, respectively.

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

On May 6, 2015, the Board of Directors declared a semi-annual cash dividend of $0.36 per share payable on June 15, 2015 to shareholders of record as of June 1, 2015. On May 7, 2014, the Board of Directors declared a semi-annual cash dividend of $0.32 per share payable on June 16, 2014 to shareholders of record as of June 2, 2014.

Subsequent to the end of the third quarter, on November 3, 2015, the Board of Directors declared a semi-annual dividend of $0.36 per share payable on December 15, 2015 to shareholders of record as of December 1, 2015.

9

Note 5. Fair Value of Financial Instruments

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

	September 30, 2015			December 31, 2014
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	487,243	487,243	531,312	531,312
Corporate commercial paper	430,387		430,428	356,468	356,536
Time deposits	51,053		51,053	39,327	39,327
Total cash and cash equivalents	968,683		968,724	927,107	927,175
Short-Term Investments:
Corporate commercial paper	8,239		8,245	40,295	40,350
Time deposits	21		21	41	41
Total short-term investments	8,260		8,266	40,336	40,391
Total	$	976,943	976,990	967,443	967,566

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 6. 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 September 30, 2015, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations 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.

10

Note 7. 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. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. 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.

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 September 30, 2015:
Revenues from unaffiliated customers	$	441,097	56,818	24,681	648,096	158,011	234,334	88,295	—		1,651,332
Transfers between geographic areas	29,168		3,492	4,991	5,206	6,289	11,125	5,459	(65,730	)	—
Total revenues	$	470,265	60,310	29,672	653,302	164,300	245,459	93,754	(65,730	)	1,651,332
Net revenues1	$	232,912	32,713	17,115	135,488	45,970	77,250	28,533	—		569,981
Operating income	$	65,389	11,905	5,007	69,690	18,574	14,188	7,140	—		191,893
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	6,196	658	222	711	291	1,223	245	—		9,546
Depreciation and amortization	$	7,439	363	268	1,336	531	1,120	418	—		11,475
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Three months ended September 30, 2014:
Revenues from unaffiliated customers	$	438,882	55,209	22,962	670,763	174,839	259,960	82,490	—		1,705,105
Transfers between geographic areas	24,847		2,867	5,194	6,116	6,814	9,783	5,171	(60,792	)	—
Total revenues	$	463,729	58,076	28,156	676,879	181,653	269,743	87,661	(60,792	)	1,705,105
Net revenues1	$	215,320	27,323	16,792	106,225	42,023	80,024	25,549	—		513,256
Operating income	$	68,972	7,779	4,890	45,153	12,073	14,921	5,343	—		159,131
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	3,171	361	369	1,648	1,247	1,016	443	—		8,255
Depreciation and amortization	$	8,369	303	226	1,493	523	1,391	436	—		12,741
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

11

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Nine months ended September 30, 2015:
Revenues from unaffiliated customers	$	1,334,900	170,351	73,076	1,943,441	524,254	716,373	258,016	—		5,020,411
Transfers between geographic areas	89,329		9,991	15,171	16,330	18,677	31,478	15,638	(196,614	)	—
Total revenues	$	1,424,229	180,342	88,247	1,959,771	542,931	747,851	273,654	(196,614	)	5,020,411
Net revenues1	$	681,868	93,967	51,159	377,384	135,114	229,745	82,371	—		1,651,608
Operating income	$	193,117	33,433	15,804	187,343	48,594	44,846	20,355	—		543,492
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	20,232	2,602	1,408	1,476	1,599	3,292	1,294	—		31,903
Depreciation and amortization	$	22,171	965	784	4,114	1,609	3,542	1,239	—		34,424
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Nine months ended September 30, 2014:
Revenues from unaffiliated customers	$	1,256,075	162,136	65,594	1,863,077	468,152	744,466	236,391	—		4,795,891
Transfers between geographic areas	67,266		7,829	15,965	17,170	20,072	28,931	14,638	(171,871	)	—
Total revenues	$	1,323,341	169,965	81,559	1,880,247	488,224	773,397	251,029	(171,871	)	4,795,891
Net revenues1	$	607,508	79,017	48,797	297,117	121,261	234,313	74,543	—		1,462,556
Operating income	$	180,650	23,155	14,425	124,528	36,371	41,515	16,133	—		436,777
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	12,646	1,047	841	5,691	2,221	3,116	1,088	—		26,650
Depreciation and amortization	$	24,100	879	665	4,471	1,739	4,376	1,310	—		37,540
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

_______________________

¹Net revenues are a non-GAAP measure calculated as revenues less directly related operations 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.

12

The following table presents the calculation of consolidated net revenues:

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Total revenues	$	1,651,332	$	1,705,105	$	5,020,411	$	4,795,891
Expenses:
Airfreight services	464,161		516,969		1,484,150		1,503,064
Ocean freight and ocean services	416,075		475,460		1,294,887		1,266,551
Customs brokerage and other services	201,115		199,420		589,766		563,720
Net revenues	$	569,981	$	513,256	$	1,651,608	$	1,462,556

13

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,” "Strategy and Culture," "International Trade and Competition," "Seasonality," “Critical Accounting Estimates,” “Results of Operations,” “Currency and Other Risk Factors” and “Liquidity and Capital Resources” contain forward-looking statements. Words such as "will likely result", "are expected to", "would expect", "would not expect", "will continue", "is anticipated", "estimate", "project", "plan", "believe", "probable", "reasonably possible", "may", "could", "should", "intends", "foreseeable future" and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, our anticipated growth and trends in the Company's businesses, and other characterizations of future events or circumstances are forward-looking statements. These statements must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. Attention should be given to the factors identified and discussed in the Company's annual report on Form 10-K filed on February 26, 2015.

Overview

Expeditors International of Washington, Inc. is a global logistics company. The Company's services include air and ocean freight consolidation and forwarding, customs clearance, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, cargo insurance and other logistics solutions. The Company does not compete for overnight courier or small parcel business. As a non-asset based carrier, the Company does not own or operate transportation assets.

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

The Company generates the major portion of its air and ocean freight revenues by purchasing transportation services on a wholesale basis from direct (asset-based) carriers and reselling those services to its customers on a retail basis. The difference between the rate billed to customers (the sell rate) and the rate paid 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 its buying power, the Company is able to negotiate favorable buy rates from the direct carriers, while at the same time offering lower sell rates than customers would otherwise be able to negotiate themselves. The most significant drivers of changes in gross revenues and related transportation expenses are volume, sell rates and buy rates. Volume has a similar effect on the change in both gross revenues and related transportation expenses in each of the Company's three primary sources of revenue.

In most cases the Company acts as an indirect carrier. When acting as an indirect carrier, the Company will issue a House Airway Bill (HAWB) or a House Ocean Bill of Lading (HOBL) to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, the Company receives a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments. In these transactions, the Company is the primary obligor and is required to compensate direct carriers for services performed regardless of whether customers accept the service, has latitude in establishing price, has discretion in selecting the direct carrier and has credit risk. The Company is the principal in these transactions and reports revenue and the related expenses on a gross basis.

For revenues earned in other capacities, for instance, when the Company does not issue a HAWB or a HOBL or otherwise acts solely as an agent for the shipper, only the commissions and fees earned for such services are included in revenues. In these transactions, the Company is not a principal and reports only commissions and fees earned in revenue.

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

The Company is managed along five geographic areas of responsibility: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR). Each area is divided into sub-regions which are composed of operating units with individual profit and loss responsibility. The Company’s 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 the Company’s overall success on a stand-alone basis.

14

The Company’s operating units share revenue using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. The Company’s strategy closely links compensation with operating unit profitability. Individual success is closely linked to cooperation with other operating units within the network.

The mix of services varies by segment based primarily on the import or export orientation of local operations in each region. In accordance with the Company's revenue recognition policy (see Note 1. E. to the consolidated financial statements in the Company's annual report on Form 10-K filed on February 26, 2015), almost all freight revenues and related expenses are recorded at origin and shipment profits are split between origin and destination offices by recording a commission fee or profit share revenue at destination and a corresponding commission or profit share expense as a component of origin consolidation costs.

Strategy and Culture

The Company has pursued a strategy emphasizing organic growth supplemented by certain strategic acquisitions. From the inception of the 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. The Company’s greatest challenge is now and always has been perpetuating a consistent global corporate culture which demands:

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

• Compliance with Company policies and government regulations;

• Aggressive marketing of all of the Company’s service offerings;

• Ongoing development of key employees and management personnel via formal and informal means;

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

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

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

The Company reinforces 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 the Company became a publicly traded entity. The Company believes in a “real world” environment in every operating unit where individuals are not sheltered from the profit implications of their decisions. If these decisions result in operating losses, management must make up these losses with future operating profits, in the aggregate, before any cash incentive compensation can be earned. Executive management, in very limited circumstances, has made exceptions at the branch operating unit level. At the same time, the Company insists on continued focus on such things as accounts receivable collection, cash flow management and credit soundness in an attempt to insulate managers from the sort of catastrophic errors that might end a career.

Any failure to perpetuate this unique culture on a self-sustained basis throughout the Company provides a greater threat to the Company’s continued success than any external force, which would be largely beyond its control. The Company strongly believes that it is nearly impossible to predict events that, in the aggregate, could have a positive or a negative impact on 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 the Company adapt and thrive as major trends emerge.

The Company’s ability to provide services to its customers is highly dependent on good working relationships with a variety of entities including airlines, steamship lines, 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 and increased governmental regulation and oversight of international trade and commerce. A good reputation helps to develop practical working understandings that will assist in meeting security and regulatory requirements while minimizing potential international trade obstacles, especially as governments promulgate new regulations and increase oversight and enforcement of new and existing laws. The Company considers its current working relationships with these entities to be satisfactory. Over the last two years, airline profitability has improved and several air carriers have reduced debt levels. The ocean steamship line industry has incurred significant losses in recent years and many carriers are highly leveraged with debt. This situation has required the Company to be selective in determining which carriers to utilize. Further changes in the financial stability, operating capabilities and capacity of asset-based carriers, space allotments available from carriers, governmental regulations, and/or trade accords could adversely affect the Company’s business in unpredictable ways.

15

International Trade and Competition

The Company operates in 63 countries in the competitive global logistics industry and Company 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, laws and policies relating to tariffs, trade restrictions, foreign investments and taxation. Periodically, governments consider a variety of changes to current tariffs and trade restrictions and accords. The Company cannot predict which, if any, of these proposals may be adopted, or the effects the adoption of any such proposal will have on the Company’s business. Doing business in foreign locations also subjects the Company to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies concerning international trade and commerce, the Company’s business may also be affected by political developments and changes in government personnel or policies, as well as economic turbulence, political unrest and security concerns in the nations in which it does 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. The industry continues to experience consolidations into larger firms striving for stronger and more complete multinational and multi-service networks. Consistent with continuing uncertainty in global economic conditions, concerns over volatile fuel costs, disruptions in port services, political unrest and fluctuating currency exchange rates, the Company’s pricing and terms continue to be pressured by customers, carriers and service providers. We expect these competitive conditions to continue.

Currently, there is uncertainty as to how declines in oil prices will impact buy rates due to a number of factors, including that some carriers have hedged fuel costs through 2015. Presently, most carriers have not incorporated lower fuel costs in their pricing structure. Because fuel is an integral part of carriers' costs and impacts both the Company's cargo space buy rates and its sell rates to customers, the Company would expect its gross revenues and costs to decline should lower fuel prices persist. The Company would not expect a significant, adverse effect on net revenues resulting from a decline in oil prices.

The Company cannot predict what impact ongoing uncertainties in the global economy may have on its operating results, freight volumes, pricing, changes in consumer demand, carrier stability and capacity, customers’ abilities to pay or on changes in competitors' behavior.

Seasonality

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

A significant portion of the Company’s revenues are derived from customers in retail 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 the Company’s revenues are, to a large degree, impacted by factors out of the Company’s control, such as a sudden change in consumer demand for retail goods, product launches and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter and, therefore, the Company 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 the Company’s stock. The Company cannot accurately forecast many of these factors or 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 that the Company make estimates and judgments. The Company bases its estimates on historical experience and on assumptions that it believes are reasonable. The Company's critical accounting estimates are discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Company's annual report on Form 10-K for the year ended December 31, 2014, filed on February 26, 2015. There have been no material changes to the critical accounting estimates previously disclosed in that report.

16

Results of Operations

The following table shows the total net revenues (a non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services) and the Company’s expenses for the three and nine-month periods ended September 30, 2015 and 2014, 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 the Company's principal services since total revenues earned by the Company as a freight consolidator include the carriers’ charges to the Company for carrying the shipment, whereas revenues earned by the Company in its other capacities include primarily the commissions and fees actually earned by the Company. Net revenue is one of the Company's primary operational and financial measures that demonstrates the ability of the Company to manage sell rates to customers with its ability to concentrate and leverage its 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 which appear elsewhere in this quarterly report.

	Three months ended September 30,									Nine months ended September 30,
	2015					2014				2015				2014
	Amount			Percent of net revenues		Amount		Percent of net revenues		Amount		Percent of net revenues		Amount		Percent of net revenues
(in thousands)
Airfreight services:
Revenues	$	659,607				$	686,434			$	2,060,863			$	2,000,829
Expenses	464,161					516,969				1,484,150				1,503,064
Net revenues	195,446			34	%	169,465		33	%	576,713		35	%	497,765		34	%
Ocean freight services and ocean services:
Revenues	559,976					600,483				1,702,465				1,606,145
Expenses	416,075					475,460				1,294,887				1,266,551
Net revenues	143,901			25		125,023		24		407,578		25		339,594		23
Customs brokerage and other services:
Revenues	431,749					418,188				1,257,083				1,188,917
Expenses	201,115					199,420				589,766				563,720
Net revenues	230,634			41		218,768		43		667,317		40		625,197		43
Total net revenues	569,981			100		513,256		100		1,651,608		100		1,462,556		100
Overhead expenses:
Salaries and related costs	295,566			52		272,548		53		861,509		52		789,257		54
Other	82,522			14		81,577		16		246,607		15		236,522		16
Total overhead expenses	378,088			66		354,125		69		1,108,116		67		1,025,779		70
Operating income	191,893			34		159,131		31		543,492		33		436,777		30
Other (expense) income, net	(419		)	—		5,129		1		8,787		—		13,499		1
Earnings before income taxes	191,474			34		164,260		32		552,279		33		450,276		31
Income tax expense	72,738			13		61,463		12		207,882		13		171,556		12
Net earnings	118,736			21		102,797		20		344,397		20		278,720		19
Less net earnings attributable to the noncontrolling interest	426			—		416		—		1,623		—		1,213		—
Net earnings attributable to shareholders	$	118,310		21	%	$	102,381	20	%	$	342,774	20	%	$	277,507	19	%

Airfreight services:

Airfreight services revenues decreased 4% and increased 3%, respectively, in the three and nine-month periods ended September 30, 2015, as compared with the same periods for 2014. The third quarter decrease resulted from lower average sell rates in response to competitive market conditions, partially offset by a 3% growth in tonnage. The increase for the nine-month period resulted from an 8% growth in tonnage that was partially offset by lower average sell rates in response to competitive market conditions in North America, Europe and North Asia. Airfreight services expenses decreased 10% and 1%, respectively, in the three and nine-month periods ended September 30, 2015 when compared to the same periods in 2014 as a result of favorable spot market buy rates in 2015, partially offset by costs attributable to tonnage growth. While not possible to quantify, the increase in tonnage through the first half of 2015 was partially attributable to customers converting a portion of their ocean freight shipments to airfreight due to port disruptions on the U.S. West Coast. The volume increases in the third quarter primarily related to exports out of North Asia and South Asia. Volume increases for the nine months occurred throughout all regions.

Airfreight services net revenues increased 15% for the three-month period ended September 30, 2015, as compared with the same period for 2014. This increase was primarily due to 17% increase in net revenue per kilo and a 3% growth in airfreight tonnage. North America net revenues increased by 5% due to lower average buy rates from favorable spot market opportunities during the quarter, partially offset by a 3% decrease in export tonnage. North Asia and South Asia net revenues increased 47% and 34%, respectively, primarily due to favorable spot market buying opportunities in the quarter, which resulted in 34% and 38% increases, respectively, in net revenue per kilo. Export tonnage increased 14% and 3%, respectively, in North Asia and South Asia. Europe net revenues decreased 13% primarily due to an 11% decline in tonnage.

Airfreight services net revenues increased 16% for the nine-month period ended September 30, 2015, as compared with the same period for 2014. This increase was primarily due to an 8% growth in airfreight tonnage and a 12% increase in net revenue per kilo. North America net revenues increased by 12% due to 6% growth in export tonnage and lower average buy rates from favorable spot market opportunities during 2015. North Asia net revenues increased 35%. This was primarily due to favorable spot market buying opportunities in 2015, which resulted in a 31% increase in net revenue per kilo on a 9% improvement in export tonnage. South Asia net revenues increased 29%, primarily due to a 21% increase in tonnage and favorable spot market buying opportunities in the third quarter. Europe net revenues decreased 8% primarily due to an 11% reduction in net revenue per kilo, which was partially offset by a 4% increase in export tonnage.

Aside from temporary disruptions such as those experienced with U.S. West Coast ports, the Company expects the global airfreight market to continue to be affected by carrier overcapacity and the timing of new product launches. Customers remain focused on improving supply-chain efficiency, reducing overall logistics costs by negotiating lower rates and utilizing ocean freight whenever possible. The Company expects these trends to continue in conjunction with carriers' efforts to manage available capacity, however, this could be affected by new product launches during periods that have historically experienced higher demands. These events, should they occur, create a higher degree of volatility in volumes and ultimately buy and sell rates.

Ocean freight and ocean services:

Ocean freight and ocean services revenues decreased 7% for the three-month period ended September 30, 2015, as compared with the same periods in 2014. Container volumes remained flat in the third quarter while the Company lowered average sell rates in response to competitive market conditions. Revenues improved 6% for the nine months, as container volumes increased 5% and average sell rates to customers were higher relative to the comparable periods in 2014. In the first half of 2014, the Company lowered average sell rates to increase container volume. Beginning in September 2014 and continuing through the first quarter of 2015, the Company maintained higher average sell rates in response to overall market conditions. The Company decreased average sell rates in the second and third quarters of 2015 in response to lower overall market demand and growth in carrier capacity. Port operations in the western United States improved significantly during the second quarter of 2015. Container volume is measured in terms of forty-foot container equivalent units.

Ocean freight and ocean services expenses decreased 12% in the third quarter of 2015, as compared with the same period for 2014, due to lower average buy rates. Ocean freight and ocean services expenses increased 2% for the nine-month period ended September 30, 2015 due to increased volumes and higher average buy rates during the first quarter. In the second and third quarters, a decline in overall market demand coupled with growth in carrier capacity led to favorable spot market buying opportunities.

Ocean freight and ocean services net revenues increased 15% and 20% for the three and nine-month periods ended September 30, 2015, as compared with the same periods for 2014. Ocean freight and ocean services net revenues are comprised of three basic services: ocean freight consolidation, direct ocean forwarding and order management. The largest component is ocean freight consolidation, which represented 48% and 50% of ocean freight net revenue for the three and nine-month periods ended September 30, 2015, respectively, and 45% and 44% for the same respective periods ended in 2014.

Ocean freight consolidation net revenues increased 24% and 36%, respectively for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014. This increase was due primarily to 25% and 30% increases in net revenue per container while volume remained flat and increased 5% during the third quarter and first nine months of 2015, respectively. In the first half of 2014, the Company made a strategic decision to lower average sell rates to increase container volume, which resulted in yields that were lower than historical levels. The Company changed its pricing strategies in the third quarter of 2014, which, combined with favorable spot market buying opportunities in the second and third quarters of 2015, led to improved yields. The Company expects pricing volatility to continue as customers and carriers react to current market conditions, which could result in reduced yields.

Direct ocean freight forwarding net revenues increased 12% and 9%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014, as a result of higher volumes principally in North America, Europe and North Asia. Order management net revenues increased 3% and 5%, respectively, for the three and nine-month periods ended September 30, 2015, mostly due to higher volumes with new and existing customers, primarily in North Asia.

North America ocean freight and ocean services net revenues increased 14% and 20%, respectively, for the three and nine-month periods ended September 30, 2015, primarily due to improved margins in both the third quarter and nine months. North Asia increased 15% and 24% due principally to improved margins and growth in other services. Europe increased 20% and 16% primarily as a result of growth in other services and higher volumes.

Customs brokerage and other services:

Customs brokerage and other services revenues increased 3% and 6%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods for 2014, as a result of increased volumes from existing and new customers. Customs brokerage and other services expenses increased 1% and 5%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods for 2014, as a result of increased volumes from existing and new customers and higher year-to-date costs in import delivery services.

Customs brokerage and other services net revenues increased 5% and 7%, respectively for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014, primarily due to higher volumes from existing and new customers in North America.

North America net revenues increased 10% and 11%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods for 2014, primarily as a result of higher volumes from existing and new customers. Europe net revenues decreased 4% as compared with both of the same periods, due to general market conditions.

Overhead expenses:

Salaries and related costs increased 8% and 9%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014, principally as a result of increased bonuses resulting from higher operating income and an increase in the number of employees, primarily in North America and Europe.

Historically, the relatively consistent relationship between salaries and net revenues is the result of a compensation philosophy that has been maintained since the inception of the 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 will occur in proportion to changes in Company operating income, creating a direct alignment between corporate performance and shareholder interests. Bonuses to field and executive management for the nine-month period ended September 30, 2015 were up 22% as compared with the same period for 2014, primarily as a result of a 24% increase in operating income. The Company’s management incentive compensation programs have always been incentive-based and performance driven and there is no built-in bias that favors or enriches management in a manner inconsistent with overall corporate performance. Salaries and related costs as a percentage of net revenues decreased 1% and 2%, respectively, for the three and nine-month periods ended September 30, 2015 as compared with the same periods for 2014.

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

Other overhead expenses increased 1% and 4%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014. The increase in expenses is primarily due to higher travel related costs, business taxes, technology consulting fees and claims, partially offset by lower depreciation expenses. Other overhead expenses as a percentage of net revenues decreased 2% and 1%, respectively, for the three and nine-month periods ended September 30, 2015, as compared with the same periods in 2014.

Other income (expense):

Other (expense) income, net declined in the three and nine-month periods ended September 30, 2015 when compared with the same periods of 2014 due primarily to foreign exchange losses incurred in the third quarter of 2015.

Income tax expense:

The Company pays income taxes in the United States and other jurisdictions. The Company’s consolidated effective income tax rate was 38.0% and 37.6%, respectively, for the three and nine-month periods ended September 30, 2015 and 37.4% and 38.1% for the same periods in 2014. The decrease in the effective tax rate over the prior nine-month period is principally the result of an increasingly higher proportion of the Company's total outstanding stock options being non-qualified grants. The tax benefit associated with non-qualified stock option grants is recorded when the related compensation expense is recognized while the tax benefits for incentive stock options and employee stock purchase plan shares cannot be anticipated and are recognized if and when a disqualifying disposition event occurs.

Currency and Other Risk Factors

The nature of the Company's worldwide operations necessitates the Company dealing with a multitude of currencies other than the U.S. dollar. This results in the Company being exposed to the inherent risks of volatile international currency markets and governmental interference. Some of the countries where the Company maintains offices and/or agency relationships have strict currency control regulations which influence the Company's ability to hedge foreign currency exposure. The Company tries to compensate for these exposures by accelerating international currency settlements among its offices or agents. The Company may enter into foreign currency hedging transactions where there are regulatory or commercial limitations on the Company's 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 and nine months ended September 30, 2015 and 2014 was insignificant. The Company had no foreign currency derivatives outstanding at September 30, 2015 and December 31, 2014. During the three and nine months ended September 30, 2015, total net foreign currency gains, including amounts recorded in revenues, operating expenses and other (expense) income, net, were approximately $4 million and $6 million, respectively. During the three and nine months ended September 30, 2014, total net foreign currency gains were approximately $2 million and net foreign currency losses were $1 million, respectively.

International air and ocean freight forwarding and customs brokerage are intensively competitive and are expected to remain so for the foreseeable future. There are a large number of entities competing in the international logistics industry, many of which have significantly more resources than the Company; however, the Company’s primary competition is confined to a relatively small number of companies within this group. 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. The Company emphasizes quality customer service and believes that its 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 less favorable contractual terms could result in reduced revenues, reduced margins, higher operating costs or lower volumes, any of which would damage the Company's 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. The Company believes 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

17

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.

Liquidity and Capital Resources

The Company’s principal source of liquidity is cash and cash equivalents, short-term investments and cash generated from operating activities. Net cash provided by operating activities for the three and nine months ended September 30, 2015, was $133 million and $449 million, respectively, as compared with $87 million and $305 million for the same periods in 2014. The increases of $46 million and $144 million for the three and nine-month periods ended September 30, 2015 are primarily due to improvements in working capital and higher earnings. At September 30, 2015, working capital was $1,280 million, including cash and cash equivalents and short-term investments of $977 million. The Company had no long-term debt at September 30, 2015. Management believes that the Company’s current cash position and operating cash flows will be sufficient to meet its 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, the Company makes significant cash advances for a select group of its credit-worthy customers. These cash advances are for customer obligations such as the payment of duties to customs authorities in various countries throughout the world. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency. For customers that meet certain criteria, the Company has agreed to extend payment terms beyond its customary terms. Management believes that the Company has effective credit control procedures, and historically has experienced relatively insignificant collection problems.

The Company’s business is subject to seasonal fluctuations. Cash flow fluctuates 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 peak season (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 from investing activities for the three months ended September 30, 2015 and 2014 was $27 million and $38 million, respectively. Cash used in investing activities for the nine months ended September 30, 2015 and 2014 was $2 million and $67 million, respectively. The Company received net proceeds from short-term investments of $39 million and $32 million for the three and nine-month periods ended September 30, 2015, respectively, as compared with net proceeds from short-term investments of $46 million and a net investment of $14 million for the same periods in 2014. The Company had capital expenditures of $10 million and $32 million, respectively, for the three and nine-month periods ended September 30, 2015, as compared with capital expenditures of $8 million and $27 million, for the same periods in 2014. Capital expenditures in the three and nine months ended September 30, 2015 related primarily to investments in technology, office furniture and equipment and building and leasehold improvements. The Company does have need, on occasion, to purchase buildings to house staff and to facilitate the staging of customers’ freight. Total capital expenditures in 2015 are currently estimated to be $70 million. This includes routine capital expenditures plus additional real estate development.

Cash used in financing activities during the three and nine months ended September 30, 2015, was $155 million and $369 million as compared with $89 million and $479 million for the same periods in 2014. The Company uses the proceeds from stock option exercises, employee stock purchases and available cash to repurchase the Company’s common stock on the open market to limit the growth in issued and outstanding shares. During the three and nine months ended September 30, 2015, the Company used cash to repurchase additional common stock of 3.0 million and 5.7 million shares, respectively, to reduce the number of total outstanding shares, compared to 2.0 million and 9.6 million shares, respectively, in the same periods in 2014.

The Company follows established guidelines relating to credit quality, diversification and maturities of its investments to preserve principal and maintain liquidity. The Company’s investment portfolio has not been adversely impacted by the disruption in the credit markets. However, there can be no assurance that the Company’s investment portfolio will not be adversely affected in the future.

The Company maintains international unsecured bank lines of credit. At September 30, 2015, the Company was contingently liable for $78 million from standby letters of credit and guarantees. The standby letters of credit and guarantees relate to obligations of the Company’s 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.

The Company's foreign subsidiaries regularly remit dividends to the U.S. parent company after evaluating their working capital requirements and needs to finance local capital expenditures. In some cases, the Company’s ability to repatriate funds from foreign operations may be subject to foreign exchange controls. At September 30, 2015, cash and cash equivalent balances of $560 million were held by the Company’s non-United States subsidiaries, of which $44 million was held in banks in the United States. Earnings of the Company's foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States and, accordingly, a deferred tax liability has been accrued for all undistributed earnings, net of foreign related tax credits that are available to be repatriated.

18

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Foreign Exchange Risk

The Company conducts business in many different countries and currencies. The Company’s business often results in billings issued in a country and currency which differs from that where the expenses related to the service are incurred. In the ordinary course of business, the Company creates 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 the Company’s earnings. The principal foreign exchange risks to which the Company is exposed are in Chinese Yuan, Euro, Mexican Peso, Canadian Dollar and British Pound.

Foreign exchange rate sensitivity analysis can be quantified by estimating the impact on the Company’s earnings as a result of hypothetical changes in the value of the U.S. dollar, the Company’s functional currency, relative to the other currencies in which the Company transacts business. All other things being equal, an average 10% weakening of the U.S. dollar, throughout the nine months ended September 30, 2015, would have had the effect of raising operating income approximately $40 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income approximately $32 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.

The Company currently does not use derivative financial instruments to manage foreign currency risk and only enters into foreign currency hedging transactions in limited locations where regulatory or commercial limitations restrict the Company’s ability to move money freely. Any such hedging activity during the three and nine months ended September 30, 2015 and 2014 was insignificant. During the three and nine months ended September 30, 2015, total net foreign currency gains, including amounts recorded in revenues, operating expenses and other (expense) income, net, were approximately $4 million and $6 million, respectively. During the three and nine months ended September 30, 2014, total net foreign currency gains were approximately $2 million and net foreign currency losses were $1 million, respectively. The Company had no foreign currency derivatives outstanding at September 30, 2015 and December 31, 2014. The Company instead follows a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of September 30, 2015, the Company had approximately $32 million of net unsettled intercompany transactions. The majority of intercompany billings are resolved within 30 days.

Interest Rate Risk

At September 30, 2015, the Company had cash and cash equivalents and short term investments of $977 million, of which $490 million was invested at various short-term market interest rates. The Company had no long-term debt at September 30, 2015. A hypothetical change in the interest rate of 10 basis points at September 30, 2015 would not have a significant impact on the Company’s earnings.

In management’s opinion, there has been no material change in the Company’s interest rate risk exposure in the third quarter of 2015.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in 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 the Company’s 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 the Company’s internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

19

The Company is developing a new accounting system which it is implementing 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 is affecting the processes that constitute the Company's internal control over financial reporting. Prior to implementing new functionalities, applicable controls are tested for operating effectiveness.

The Company's management has confidence in the Company’s internal controls and procedures. Nevertheless, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure controls and procedures or the Company’s 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 the Company’s control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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 or financial position. As of September 30, 2015, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations 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.

Item 1A. Risk Factors

There have been no material changes in the Company’s risk factors from those disclosed in the Company's annual report on Form 10-K filed on February 26, 2015.

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
July 1-31, 2015	—	$	—	—	14,636,505
August 1-31, 2015	2,321,809	48.69		2,321,809	21,666,291
September 1-30, 2015	2,000,000	48.46		2,000,000	16,506,645
Total	4,321,809	$	48.58	4,321,809	16,506,645

In November 1993, the Company’s Board of Directors authorized a Non-Discretionary Stock Repurchase Plan for the purpose of repurchasing the Company’s 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 the Company’s common stock. This authorization has no expiration date. This plan was disclosed in the Company’s annual report on Form 10-K filed on March 31, 1995. In the third quarter of 2015, 1,059,295 shares of common stock were repurchased under the Non-Discretionary Stock Repurchase Plan.

On November 13, 2001, the Company’s Board of Directors announced a Discretionary Stock Repurchase Plan, which authorized the repurchase of the Company's common stock in the open market to reduce the issued and outstanding common stock to 200 million shares. The Board of Directors amended the plan on February 24, 2014, to authorize management repurchases to 190 million shares of common stock and further authorized repurchases down to 188 million and 180 million shares of common stock outstanding on February 24, 2015 and August 4, 2015, 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 third quarter of 2015, 3,262,514 shares of common stock were repurchased under the Discretionary

20

Stock Repurchase Plan. These discretionary repurchases included 262,514 shares that were made to limit the growth in the number of issued and outstanding shares resulting from stock option exercises and the exercise of employee stock purchase rights and 3,000,000 shares to reduce the number of total shares outstanding.

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.

21

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

22

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.
November 5, 2015	/s/ JEFFREY S. MUSSER
	Jeffrey S. Musser, President, Chief Executive Officer and Director
November 5, 2015	/s/ BRADLEY S. POWELL
	Bradley S. Powell, Senior Vice President and Chief Financial Officer

23

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Form 10-Q Index and Exhibits

September 30, 2015

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

24

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: November 5, 2015

/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: November 5, 2015

/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 September 30, 2015, 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.

November 5, 2015	/S/ JEFFREY S. MUSSER
	Jeffrey S. Musser President, Chief Executive Officer and Director
November 5, 2015	/S/ BRADLEY S. POWELL
	Bradley S. Powell Senior Vice President and Chief Financial Officer

XML

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, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Earnings Attributable to Shareholders
Basic earnings attributable to shareholders	$ 118,310	$ 102,381	$ 342,774	$ 277,507
Diluted earnings attributable to shareholders	$ 118,310	$ 102,381	$ 342,774	$ 277,507
Weighted Average Shares
Weighted average basic shares outstanding	188,424,400	194,419,071	190,231,986	197,305,251
Effect of dilutive potential common shares	1,217,374	582,196	1,215,810	648,559
Weighted average diluted shares outstanding	189,641,774	195,001,267	191,447,796	197,953,810
Earnings Per Share
Basic earnings attributable to shareholders per share	$ 0.63	$ 0.53	$ 1.80	$ 1.41
Diluted earnings attributable to shareholders per share	$ 0.62	$ 0.53	$ 1.79	$ 1.40

XML

Share-Based Compensation

9 Months Ended

Sep. 30, 2015

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. On May 21, 2015, the shareholders approved the 2015 Stock Option Plan, which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted. The Company has historically granted the majority of its options during the second quarter of each fiscal year. For the nine months ended September 30, 2015 and 2014, 2,955,750 and 2,289,600 options were granted, respectively. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and 699,438 and 671,775 were issued in the nine-month periods ended September 30, 2015 and 2014, respectively. In the second quarter of 2015 and 2014, respectively, 33,848 and 30,702 fully vested shares were granted to independent directors.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Nine months ended September 30,
	2015			2014
Dividend yield	1.60		%	1.50 - 1.51%
Volatility - stock option plans	29 - 34%			36		%
Volatility - stock purchase rights plans	20		%	20		%
Risk free interest rates	0.30 - 2.04%			0.11 - 2.27%
Expected life (years) - stock option plans	6.41 - 7.47			6.52 - 7.43
Expected life (years) - stock purchase rights plans	1			1
Weighted average fair value of stock options granted during the period	$	13.44		$	14.08
Weighted average fair value of stock purchase rights granted during the period	$	10.45		$	9.60

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

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Stock compensation expense	$	10,919	$	10,049	$	32,489	$	32,220
Recognized tax benefit	$	1,571	$	988	$	4,305	$	3,115

XML

Fair Value of Financial Instruments - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	$ 968,683	$ 985,727	$ 927,107	$ 990,480	$ 970,561	$ 1,247,652
Total short-term investments	8,260		40,336
Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	968,683		927,107
Total short-term investments	8,260		40,336
Total	976,943		967,443
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	968,724		927,175
Total short-term investments	8,266		40,391
Total	976,990		967,566
Cash and Cash Equivalents | Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	487,243		531,312
Corporate commercial paper	430,387		356,468
Time deposits	51,053		39,327
Cash and Cash Equivalents | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	487,243		531,312
Corporate commercial paper	430,428		356,536
Time deposits	51,053		39,327
Short-term Investments | Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Corporate commercial paper	8,239		40,295
Time deposits	21		41
Short-term Investments | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Corporate commercial paper	8,245		40,350
Time deposits	$ 21		$ 41

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Components Of Equity - Additional Information (Detail) - $ / shares				9 Months Ended
	Nov. 03, 2015	May. 06, 2015	May. 07, 2014	Sep. 30, 2015	Sep. 30, 2014
Class of Stock [Line Items]
Date of declaration of dividends		May 06, 2015	May 07, 2014
Dividend declared per share		$ 0.36	$ 0.32
Date of dividend payment		Jun. 15, 2015	Jun. 16, 2014
Dividends payable to shareholders date of record		Jun. 01, 2015	Jun. 02, 2014
Non-Discretionary Plan
Class of Stock [Line Items]
Shares repurchased				2,242,579	1,364,974
Average price per share				$ 47.93	$ 42.73
Discretionary Plan
Class of Stock [Line Items]
Shares repurchased				6,395,506	10,057,648
Average price per share				$ 48.16	$ 41.44
Expected common stock shares issued and outstanding				180,000,000
Subsequent Event
Class of Stock [Line Items]
Date of declaration of dividends	Nov. 03, 2015
Dividend declared per share	$ 0.36
Date of dividend payment	Dec. 15, 2015
Dividends payable to shareholders date of record	Dec. 01, 2015

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Business Segment Information - Financial Information Regarding Company's Operations by Geographic Area (Detail) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total revenues		$ 1,651,332	$ 1,705,105	$ 5,020,411	$ 4,795,891
Net revenues	[1]	569,981	513,256	1,651,608	1,462,556
Operating income		191,893	159,131	543,492	436,777
Identifiable assets at period end		2,827,018	2,926,053	2,827,018	2,926,053	$ 2,890,905
Capital expenditures		9,546	8,255	31,903	26,650
Depreciation and amortization		11,475	12,741	34,424	37,540
Equity		1,842,192	1,903,930	1,842,192	1,903,930	$ 1,871,608	$ 2,086,331
United States Segment
Segment Reporting Information [Line Items]
Total revenues		441,097	438,882	1,334,900	1,256,075
Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		56,818	55,209	170,351	162,136
Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		24,681	22,962	73,076	65,594
North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		648,096	670,763	1,943,441	1,863,077
South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		158,011	174,839	524,254	468,152
Europe Segment
Segment Reporting Information [Line Items]
Total revenues		234,334	259,960	716,373	744,466
Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		88,295	82,490	258,016	236,391
Geography Eliminations | United States Segment
Segment Reporting Information [Line Items]
Total revenues		29,168	24,847	89,329	67,266
Geography Eliminations | Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		3,492	2,867	9,991	7,829
Geography Eliminations | Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		4,991	5,194	15,171	15,965
Geography Eliminations | North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		5,206	6,116	16,330	17,170
Geography Eliminations | South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		6,289	6,814	18,677	20,072
Geography Eliminations | Europe Segment
Segment Reporting Information [Line Items]
Total revenues		11,125	9,783	31,478	28,931
Geography Eliminations | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		5,459	5,171	15,638	14,638
Operating Segments | United States Segment
Segment Reporting Information [Line Items]
Total revenues		470,265	463,729	1,424,229	1,323,341
Net revenues	[1]	232,912	215,320	681,868	607,508
Operating income		65,389	68,972	193,117	180,650
Identifiable assets at period end		1,385,157	1,333,124	1,385,157	1,333,124
Capital expenditures		6,196	3,171	20,232	12,646
Depreciation and amortization		7,439	8,369	22,171	24,100
Equity		1,144,466	1,074,837	1,144,466	1,074,837
Operating Segments | Other North America Segment
Segment Reporting Information [Line Items]
Total revenues		60,310	58,076	180,342	169,965
Net revenues	[1]	32,713	27,323	93,967	79,017
Operating income		11,905	7,779	33,433	23,155
Identifiable assets at period end		108,644	113,621	108,644	113,621
Capital expenditures		658	361	2,602	1,047
Depreciation and amortization		363	303	965	879
Equity		64,384	75,848	64,384	75,848
Operating Segments | Latin America Segment
Segment Reporting Information [Line Items]
Total revenues		29,672	28,156	88,247	81,559
Net revenues	[1]	17,115	16,792	51,159	48,797
Operating income		5,007	4,890	15,804	14,425
Identifiable assets at period end		56,987	53,939	56,987	53,939
Capital expenditures		222	369	1,408	841
Depreciation and amortization		268	226	784	665
Equity		35,890	34,218	35,890	34,218
Operating Segments | North Asia Segment
Segment Reporting Information [Line Items]
Total revenues		653,302	676,879	1,959,771	1,880,247
Net revenues	[1]	135,488	106,225	377,384	297,117
Operating income		69,690	45,153	187,343	124,528
Identifiable assets at period end		472,189	580,260	472,189	580,260
Capital expenditures		711	1,648	1,476	5,691
Depreciation and amortization		1,336	1,493	4,114	4,471
Equity		250,362	341,092	250,362	341,092
Operating Segments | South Asia Segment
Segment Reporting Information [Line Items]
Total revenues		164,300	181,653	542,931	488,224
Net revenues	[1]	45,970	42,023	135,114	121,261
Operating income		18,574	12,073	48,594	36,371
Identifiable assets at period end		140,206	152,236	140,206	152,236
Capital expenditures		291	1,247	1,599	2,221
Depreciation and amortization		531	523	1,609	1,739
Equity		103,457	111,556	103,457	111,556
Operating Segments | Europe Segment
Segment Reporting Information [Line Items]
Total revenues		245,459	269,743	747,851	773,397
Net revenues	[1]	77,250	80,024	229,745	234,313
Operating income		14,188	14,921	44,846	41,515
Identifiable assets at period end		427,053	476,799	427,053	476,799
Capital expenditures		1,223	1,016	3,292	3,116
Depreciation and amortization		1,120	1,391	3,542	4,376
Equity		148,287	185,332	148,287	185,332
Operating Segments | Middle East Africa And India Segment
Segment Reporting Information [Line Items]
Total revenues		93,754	87,661	273,654	251,029
Net revenues	[1]	28,533	25,549	82,371	74,543
Operating income		7,140	5,343	20,355	16,133
Identifiable assets at period end		229,670	204,378	229,670	204,378
Capital expenditures		245	443	1,294	1,088
Depreciation and amortization		418	436	1,239	1,310
Equity		126,321	114,229	126,321	114,229
Intersegment Eliminations
Segment Reporting Information [Line Items]
Total revenues		(65,730)	(60,792)	(196,614)	(171,871)
Identifiable assets at period end		7,112	11,696	7,112	11,696
Equity		$ (30,975)	$ (33,182)	$ (30,975)	$ (33,182)

[1] Net revenues are a non-GAAP measure calculated as revenues less directly related operations 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		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Revenues Calculation [Line Items]
Total revenues		$ 1,651,332	$ 1,705,105	$ 5,020,411	$ 4,795,891
Airfreight services		464,161	516,969	1,484,150	1,503,064
Ocean freight and ocean services		416,075	475,460	1,294,887	1,266,551
Customs brokerage and other services		201,115	199,420	589,766	563,720
Net revenues	[1]	$ 569,981	$ 513,256	$ 1,651,608	$ 1,462,556

[1] Net revenues are a non-GAAP measure calculated as revenues less directly related operations 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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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

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 26, 2015.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for share data. Effective in the first quarter of 2015, the Company changed the organization of the management of its Asia Pacific region, splitting it into North and South Asia. Accordingly, the financial information previously combined under one geographical operating segment for Asia Pacific is now reported as North Asia and South Asia segments for all periods presented.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $7,309 as of September 30, 2015 and $7,119 as of December 31, 2014. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

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

D. Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 (Topic 606) “Revenue from Contracts with Customers”, as amended. This update, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605 - “Revenue Recognition” and most industry-specific guidance throughout the industry topics of the FASB ASC, substantially converges revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (IFRS), providing a single, comprehensive framework for recognizing revenue. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements and related disclosures. However, at this time, based on the nature of the Company's operations, the adoption of ASU 2014-09 is not expected to have a material impact on the amount or timing of revenue recognized or the Company's revenue recognition policies.

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 968,683	$ 927,107
Short-term investments	8,260	40,336
Accounts receivable, less allowance for doubtful accounts of $7,309 at September 30, 2015 and $7,119 at December 31, 2014	1,166,300	1,236,042
Deferred Federal and state income taxes	20,862	20,279
Other	71,355	65,486
Total current assets	2,235,460	2,289,250
Property and equipment, less accumulated depreciation and amortization of $379,996 at September 30, 2015 and $371,756 at December 31, 2014	527,893	538,415
Goodwill	7,927	7,927
Other assets, net	55,738	55,313
Total assets	2,827,018	2,890,905
Current Liabilities:
Accounts payable	718,555	770,238
Accrued expenses, primarily salaries and related costs	208,771	192,468
Federal, state and foreign income taxes	27,876	21,077
Total current liabilities	955,202	983,783
Deferred Federal and state income taxes	$ 29,624	$ 35,514
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued	$ 0	$ 0
Common stock, par value $0.01 per share. Issued and outstanding 186,183,201 shares at September 30, 2015 and 191,655,690 shares at December 31, 2014	1,862	1,916
Additional paid-in capital	874	1,113
Retained earnings	1,910,388	1,903,196
Accumulated other comprehensive loss	(74,079)	(37,817)
Total shareholders’ equity	1,839,045	1,868,408
Noncontrolling interest	3,147	3,200
Total equity	1,842,192	1,871,608
Total liabilities and equity	$ 2,827,018	$ 2,890,905

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Foreign currency translation adjustments, tax	$ (11,669)	$ (9,954)	$ (19,866)	$ (8,560)
Reclassification adjustment for foreign currency realized losses, tax				$ (61)

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Share-Based Compensation - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	May. 21, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted			2,955,750	2,289,600
Issuance of shares under stock purchase plan			699,438	671,775
Stock Option Plan 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for grant					3,000,000
Directors' Restricted Stock Plan 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted to independent directors	33,848	30,702

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Share-Based Compensation - Stock Compensation Expense and Total Related Tax Benefit Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock compensation expense	$ 10,919	$ 10,049	$ 32,489	$ 32,220
Recognized tax benefit	$ 1,571	$ 988	$ 4,305	$ 3,115

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating Activities:
Net earnings	$ 118,736	$ 102,797	$ 344,397	$ 278,720
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses (recoveries) on accounts receivable	134	564	995	(55)
Deferred income tax (benefit) expense	(7,611)	(2,085)	13,312	8,000
Excess tax benefits from stock plans	0	(47)	(1,846)	(1,031)
Stock compensation expense	10,919	10,049	32,489	32,220
Depreciation and amortization	11,475	12,741	34,424	37,540
Other	2	139	115	345
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	2,466	(58,984)	18,910	(131,374)
(Decrease) increase in accounts payable and accrued expenses	(19,622)	23,113	3,311	114,036
Increase (decrease) in income taxes payable, net	19,978	2,050	4,110	(27,115)
Increase in other current assets	(3,801)	(3,646)	(1,419)	(5,852)
Net cash from operating activities	132,676	86,691	448,798	305,434
Investing Activities:
Purchase of short-term investments	0	(40,275)	(47,008)	(136,706)
Proceeds from maturities of short-term investments	38,788	86,107	79,084	122,726
Purchase of property and equipment	(9,546)	(8,255)	(31,903)	(26,650)
Escrow deposit for land acquisition	0	0	0	(27,101)
Other, net	(2,666)	370	(2,482)	504
Net cash from investing activities	26,576	37,947	(2,309)	(67,227)
Financing Activities:
Proceeds from issuance of common stock	54,606	28,452	114,701	58,469
Repurchases of common stock	(209,970)	(117,044)	(415,475)	(475,160)
Excess tax benefits from stock plans	0	47	1,846	1,031
Dividends paid	0	0	(68,781)	(62,807)
Distributions to noncontrolling interest	0	0	(857)	(85)
Net cash from financing activities	(155,364)	(88,545)	(368,566)	(478,552)
Effect of exchange rate changes on cash and cash equivalents	(20,932)	(16,174)	(36,347)	(16,827)
(Decrease) increase in cash and cash equivalents	(17,044)	19,919	41,576	(257,172)
Cash and cash equivalents at beginning of period	985,727	970,561	927,107	1,247,652
Cash and cash equivalents at end of period	968,683	990,480	968,683	990,480
Taxes Paid:
Income taxes	$ 60,374	$ 61,899	$ 190,024	$ 195,358

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for doubtful accounts	$ 7,309	$ 7,119
Property and equipment, accumulated depreciation	$ 379,996	$ 371,756
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	186,183,201	191,655,690
Common stock, shares outstanding	186,183,201	191,655,690

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Basic and Diluted Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2015

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
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	118,310	188,424,400	$	0.63
Effect of dilutive potential common shares	—		1,217,374	—
Diluted earnings attributable to shareholders	$	118,310	189,641,774	$	0.62
2014
Basic earnings attributable to shareholders	$	102,381	194,419,071	$	0.53
Effect of dilutive potential common shares	—		582,196	—
Diluted earnings attributable to shareholders	$	102,381	195,001,267	$	0.53

	Nine months ended
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	342,774	190,231,986	$	1.80
Effect of dilutive potential common shares	—		1,215,810	—
Diluted earnings attributable to shareholders	$	342,774	191,447,796	$	1.79
2014
Basic earnings attributable to shareholders	$	277,507	197,305,251	$	1.41
Effect of dilutive potential common shares	—		648,559	—
Diluted earnings attributable to shareholders	$	277,507	197,953,810	$	1.40

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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

	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
Shares	8,379,877	14,886,109	9,713,102	16,532,462

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 02, 2015
Entity Information [Line Items]
Entity Registrant Name	EXPEDITORS INTERNATIONAL OF WASHINGTON INC
Entity Central Index Key	0000746515
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	EXPD
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		186,413,350

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Components of Equity (Tables)

9 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Schedule of Components of Equity Disclosure

The components of equity for the nine months ended September 30,2015 and 2014 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2014	$	1,868,408		3,200		1,871,608
Exercise of stock options	88,851			—		88,851
Issuance of shares under stock purchase plan	25,850			—		25,850
Shares repurchased under provisions of stock repurchase plans	(415,475		)	—		(415,475	)
Stock compensation expense	32,489			—		32,489
Tax benefits from stock plans, net	1,191			—		1,191
Net earnings	342,774			1,623		344,397
Other comprehensive loss	(36,262		)	(819	)	(37,081	)
Dividends paid ($0.36 per share)	(68,781		)	—		(68,781	)
Distributions to noncontrolling interest	—			(857	)	(857	)
Balance at September 30, 2015	$	1,839,045		3,147		1,842,192
Balance at December 31, 2013	$	2,084,783		1,548		2,086,331
Exercise of stock options	34,669			—		34,669
Issuance of shares under stock purchase plan	23,800			—		23,800
Shares repurchased under provisions of stock repurchase plans	(475,160		)	—		(475,160	)
Stock compensation expense	32,220			—		32,220
Tax benefits from stock plans, net	1,031			—		1,031
Net earnings	277,507			1,213		278,720
Other comprehensive loss	(15,513		)	(119	)	(15,632	)
Dividends paid ($0.32 per share)	(62,807		)	—		(62,807	)
Purchase of noncontrolling interest	843					843
Distributions to noncontrolling interest	—			(85	)	(85	)
Balance at September 30, 2014	$	1,901,373		2,557		1,903,930

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Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues:
Airfreight services	$ 659,607	$ 686,434	$ 2,060,863	$ 2,000,829
Ocean freight and ocean services	559,976	600,483	1,702,465	1,606,145
Customs brokerage and other services	431,749	418,188	1,257,083	1,188,917
Total revenues	1,651,332	1,705,105	5,020,411	4,795,891
Operating Expenses:
Airfreight services	464,161	516,969	1,484,150	1,503,064
Ocean freight and ocean services	416,075	475,460	1,294,887	1,266,551
Customs brokerage and other services	201,115	199,420	589,766	563,720
Salaries and related costs	295,566	272,548	861,509	789,257
Rent and occupancy costs	25,747	26,396	76,106	76,959
Depreciation and amortization	11,475	12,741	34,424	37,540
Selling and promotion	10,370	9,240	30,146	26,704
Other	34,930	33,200	105,931	95,319
Total operating expenses	1,459,439	1,545,974	4,476,919	4,359,114
Operating income	191,893	159,131	543,492	436,777
Other Income (Expense):
Interest income	2,666	2,793	8,034	8,254
Other, net	(3,085)	2,336	753	5,245
Other (expense) income, net	(419)	5,129	8,787	13,499
Earnings before income taxes	191,474	164,260	552,279	450,276
Income tax expense	72,738	61,463	207,882	171,556
Net earnings	118,736	102,797	344,397	278,720
Less net earnings attributable to the noncontrolling interest	426	416	1,623	1,213
Net earnings attributable to shareholders	$ 118,310	$ 102,381	$ 342,774	$ 277,507
Diluted earnings attributable to shareholders per share	$ 0.62	$ 0.53	$ 1.79	$ 1.40
Basic earnings attributable to shareholders per share	0.63	0.53	1.80	1.41
Dividends declared and paid per common share	$ 0.00	$ 0.00	$ 0.36	$ 0.32
Weighted average diluted shares outstanding	189,641,774	195,001,267	191,447,796	197,953,810
Weighted average basic shares outstanding	188,424,400	194,419,071	190,231,986	197,305,251

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2015

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, short-term investments, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. Cash equivalents consist of highly liquid investments with a maturity of three months or less at date of purchase. Short-term investments have a maturity of greater than three months at date of purchase. Cash, cash equivalents and short-term investments consist of the following:

	September 30, 2015			December 31, 2014
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	487,243	487,243	531,312	531,312
Corporate commercial paper	430,387		430,428	356,468	356,536
Time deposits	51,053		51,053	39,327	39,327
Total cash and cash equivalents	968,683		968,724	927,107	927,175
Short-Term Investments:
Corporate commercial paper	8,239		8,245	40,295	40,350
Time deposits	21		21	41	41
Total short-term investments	8,260		8,266	40,336	40,391
Total	$	976,943	976,990	967,443	967,566

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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Components of Equity

9 Months Ended

Sep. 30, 2015

Stockholders' Equity Note [Abstract]

Components of Equity

Components of Equity

The components of equity for the nine months ended September 30,2015 and 2014 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2014	$	1,868,408		3,200		1,871,608
Exercise of stock options	88,851			—		88,851
Issuance of shares under stock purchase plan	25,850			—		25,850
Shares repurchased under provisions of stock repurchase plans	(415,475		)	—		(415,475	)
Stock compensation expense	32,489			—		32,489
Tax benefits from stock plans, net	1,191			—		1,191
Net earnings	342,774			1,623		344,397
Other comprehensive loss	(36,262		)	(819	)	(37,081	)
Dividends paid ($0.36 per share)	(68,781		)	—		(68,781	)
Distributions to noncontrolling interest	—			(857	)	(857	)
Balance at September 30, 2015	$	1,839,045		3,147		1,842,192
Balance at December 31, 2013	$	2,084,783		1,548		2,086,331
Exercise of stock options	34,669			—		34,669
Issuance of shares under stock purchase plan	23,800			—		23,800
Shares repurchased under provisions of stock repurchase plans	(475,160		)	—		(475,160	)
Stock compensation expense	32,220			—		32,220
Tax benefits from stock plans, net	1,031			—		1,031
Net earnings	277,507			1,213		278,720
Other comprehensive loss	(15,513		)	(119	)	(15,632	)
Dividends paid ($0.32 per share)	(62,807		)	—		(62,807	)
Purchase of noncontrolling interest	843					843
Distributions to noncontrolling interest	—			(85	)	(85	)
Balance at September 30, 2014	$	1,901,373		2,557		1,903,930

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 nine month periods ended September 30, 2015 and 2014, 2,242,579 and 1,364,974 shares were repurchased at an average price of $47.93 and $42.73 per share, respectively. The Company also has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding stock to 180 million shares of common stock. During the nine-month periods ended September 30, 2015 and 2014, 6,395,506 and 10,057,648 shares were repurchased at an average price of $48.16 and $41.44 per share, respectively.

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

On May 6, 2015, the Board of Directors declared a semi-annual cash dividend of $0.36 per share payable on June 15, 2015 to shareholders of record as of June 1, 2015. On May 7, 2014, the Board of Directors declared a semi-annual cash dividend of $0.32 per share payable on June 16, 2014 to shareholders of record as of June 2, 2014.

Subsequent to the end of the third quarter, on November 3, 2015, the Board of Directors declared a semi-annual dividend of $0.36 per share payable on December 15, 2015 to shareholders of record as of December 1, 2015.

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Share-Based Compensation - Assumptions to Estimate Fair Value of Option Grant on Date of Grant Using Black Scholes Option Pricing Model (Detail) - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rates lower end	0.30%	0.11%
Risk free interest rates upper end	2.04%	2.27%
Weighted average fair value of stock options granted during the period	$ 13.44	$ 14.08
Lower end
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.60%	1.50%
Upper end
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.60%	1.51%
Employee Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility lower end - stock option plans	29.00%	36.00%
Volatility upper end - stock option plans	34.00%	36.00%
Employee Stock Option Plan | Lower end
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (years)	6 years 4 months 29 days	6 years 6 months 8 days
Employee Stock Option Plan | Upper end
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (years)	7 years 5 months 21 days	7 years 5 months 6 days
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility - stock purchase rights plans	20.00%	20.00%
Expected life (years)	1 year	1 year
Weighted average fair value of stock purchase rights granted during the period	$ 10.45	$ 9.60

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

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

Cash, cash equivalents and short-term investments consist of the following:

	September 30, 2015			December 31, 2014
	Cost		Fair Value	Cost	Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	487,243	487,243	531,312	531,312
Corporate commercial paper	430,387		430,428	356,468	356,536
Time deposits	51,053		51,053	39,327	39,327
Total cash and cash equivalents	968,683		968,724	927,107	927,175
Short-Term Investments:
Corporate commercial paper	8,239		8,245	40,295	40,350
Time deposits	21		21	41	41
Total short-term investments	8,260		8,266	40,336	40,391
Total	$	976,943	976,990	967,443	967,566

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

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 26, 2015.

All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for share data. Effective in the first quarter of 2015, the Company changed the organization of the management of its Asia Pacific region, splitting it into North and South Asia. Accordingly, the financial information previously combined under one geographical operating segment for Asia Pacific is now reported as North Asia and South Asia segments for all periods presented.

Accounts Receivable, Policy

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $7,309 as of September 30, 2015 and $7,119 as of December 31, 2014. Additions and write-offs have not been significant in the periods presented.

Use of Estimates, Policy

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

Recent Accounting Pronouncements, Policy

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09 (Topic 606) “Revenue from Contracts with Customers”, as amended. This update, which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) Topic 605 - “Revenue Recognition” and most industry-specific guidance throughout the industry topics of the FASB ASC, substantially converges revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (IFRS), providing a single, comprehensive framework for recognizing revenue. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2018. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements and related disclosures. However, at this time, based on the nature of the Company's operations, the adoption of ASU 2014-09 is not expected to have a material impact on the amount or timing of revenue recognized or the Company's revenue recognition policies.

Stock Plans, Policy

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns.

Cash Equivalents, Policy

Cash equivalents consist of highly liquid investments with a maturity of three months or less at date of purchase.

Short-term Investments, Policy

Short-term investments have a maturity of greater than three months at date of purchase.

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. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. 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.

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Contingencies

9 Months Ended

Sep. 30, 2015

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 September 30, 2015, the amounts accrued for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations 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

9 Months Ended

Sep. 30, 2015

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. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. 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.

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 September 30, 2015:
Revenues from unaffiliated customers	$	441,097	56,818	24,681	648,096	158,011	234,334	88,295	—		1,651,332
Transfers between geographic areas	29,168		3,492	4,991	5,206	6,289	11,125	5,459	(65,730	)	—
Total revenues	$	470,265	60,310	29,672	653,302	164,300	245,459	93,754	(65,730	)	1,651,332
Net revenues1	$	232,912	32,713	17,115	135,488	45,970	77,250	28,533	—		569,981
Operating income	$	65,389	11,905	5,007	69,690	18,574	14,188	7,140	—		191,893
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	6,196	658	222	711	291	1,223	245	—		9,546
Depreciation and amortization	$	7,439	363	268	1,336	531	1,120	418	—		11,475
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Three months ended September 30, 2014:
Revenues from unaffiliated customers	$	438,882	55,209	22,962	670,763	174,839	259,960	82,490	—		1,705,105
Transfers between geographic areas	24,847		2,867	5,194	6,116	6,814	9,783	5,171	(60,792	)	—
Total revenues	$	463,729	58,076	28,156	676,879	181,653	269,743	87,661	(60,792	)	1,705,105
Net revenues1	$	215,320	27,323	16,792	106,225	42,023	80,024	25,549	—		513,256
Operating income	$	68,972	7,779	4,890	45,153	12,073	14,921	5,343	—		159,131
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	3,171	361	369	1,648	1,247	1,016	443	—		8,255
Depreciation and amortization	$	8,369	303	226	1,493	523	1,391	436	—		12,741
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Nine months ended September 30, 2015:
Revenues from unaffiliated customers	$	1,334,900	170,351	73,076	1,943,441	524,254	716,373	258,016	—		5,020,411
Transfers between geographic areas	89,329		9,991	15,171	16,330	18,677	31,478	15,638	(196,614	)	—
Total revenues	$	1,424,229	180,342	88,247	1,959,771	542,931	747,851	273,654	(196,614	)	5,020,411
Net revenues1	$	681,868	93,967	51,159	377,384	135,114	229,745	82,371	—		1,651,608
Operating income	$	193,117	33,433	15,804	187,343	48,594	44,846	20,355	—		543,492
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	20,232	2,602	1,408	1,476	1,599	3,292	1,294	—		31,903
Depreciation and amortization	$	22,171	965	784	4,114	1,609	3,542	1,239	—		34,424
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Nine months ended September 30, 2014:
Revenues from unaffiliated customers	$	1,256,075	162,136	65,594	1,863,077	468,152	744,466	236,391	—		4,795,891
Transfers between geographic areas	67,266		7,829	15,965	17,170	20,072	28,931	14,638	(171,871	)	—
Total revenues	$	1,323,341	169,965	81,559	1,880,247	488,224	773,397	251,029	(171,871	)	4,795,891
Net revenues1	$	607,508	79,017	48,797	297,117	121,261	234,313	74,543	—		1,462,556
Operating income	$	180,650	23,155	14,425	124,528	36,371	41,515	16,133	—		436,777
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	12,646	1,047	841	5,691	2,221	3,116	1,088	—		26,650
Depreciation and amortization	$	24,100	879	665	4,471	1,739	4,376	1,310	—		37,540
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

_______________________

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

The following table presents the calculation of consolidated net revenues:

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Total revenues	$	1,651,332	$	1,705,105	$	5,020,411	$	4,795,891
Expenses:
Airfreight services	464,161		516,969		1,484,150		1,503,064
Ocean freight and ocean services	416,075		475,460		1,294,887		1,266,551
Customs brokerage and other services	201,115		199,420		589,766		563,720
Net revenues	$	569,981	$	513,256	$	1,651,608	$	1,462,556

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Share-based Compensation [Abstract]

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Methods Used

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Nine months ended September 30,
	2015			2014
Dividend yield	1.60		%	1.50 - 1.51%
Volatility - stock option plans	29 - 34%			36		%
Volatility - stock purchase rights plans	20		%	20		%
Risk free interest rates	0.30 - 2.04%			0.11 - 2.27%
Expected life (years) - stock option plans	6.41 - 7.47			6.52 - 7.43
Expected life (years) - stock purchase rights plans	1			1
Weighted average fair value of stock options granted during the period	$	13.44		$	14.08
Weighted average fair value of stock purchase rights granted during the period	$	10.45		$	9.60

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

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

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Stock compensation expense	$	10,919	$	10,049	$	32,489	$	32,220
Recognized tax benefit	$	1,571	$	988	$	4,305	$	3,115

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Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Significant Accounting Policies [Line Items]
Accounts receivable, allowance for doubtful accounts	$ 7,309	$ 7,119

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Basic and Diluted Earnings per Share - Shares Excluded from Computation of Diluted earnings Per Share (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares	8,379,877	14,886,109	9,713,102	16,532,462

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net earnings	$ 118,736	$ 102,797	$ 344,397	$ 278,720
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $11,669 and $9,954 for the three months ended September 30, 2015 and 2014 and $19,866 and $8,560 for the nine months ended September 30, 2015 and 2014	(21,692)	(18,351)	(37,081)	(15,743)
Reclassification adjustment for foreign currency realized losses, net of tax of $61 for the nine months ended September 30, 2014	0	0	0	111
Other comprehensive loss	(21,692)	(18,351)	(37,081)	(15,632)
Comprehensive income	97,044	84,446	307,316	263,088
Less comprehensive income attributable to the noncontrolling interest	35	234	804	1,094
Comprehensive income attributable to shareholders	$ 97,009	$ 84,212	$ 306,512	$ 261,994

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Basic and Diluted Earnings per Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share

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

	Three months ended
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	118,310	188,424,400	$	0.63
Effect of dilutive potential common shares	—		1,217,374	—
Diluted earnings attributable to shareholders	$	118,310	189,641,774	$	0.62
2014
Basic earnings attributable to shareholders	$	102,381	194,419,071	$	0.53
Effect of dilutive potential common shares	—		582,196	—
Diluted earnings attributable to shareholders	$	102,381	195,001,267	$	0.53

	Nine months ended
	September 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2015
Basic earnings attributable to shareholders	$	342,774	190,231,986	$	1.80
Effect of dilutive potential common shares	—		1,215,810	—
Diluted earnings attributable to shareholders	$	342,774	191,447,796	$	1.79
2014
Basic earnings attributable to shareholders	$	277,507	197,305,251	$	1.41
Effect of dilutive potential common shares	—		648,559	—
Diluted earnings attributable to shareholders	$	277,507	197,953,810	$	1.40

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

	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
Shares	8,379,877	14,886,109	9,713,102	16,532,462

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Components of Equity (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			$ 1,871,608	$ 2,086,331
Exercise of stock options			88,851	34,669
Issuance of shares under stock purchase plan			25,850	23,800
Shares repurchased under provisions of stock repurchase plans			(415,475)	(475,160)
Stock compensation expense			32,489	32,220
Tax benefits from stock plans, net			1,191	1,031
Net earnings	$ 118,736	$ 102,797	344,397	278,720
Other comprehensive loss	(21,692)	(18,351)	(37,081)	(15,632)
Dividends paid			(68,781)	(62,807)
Purchase of noncontrolling interest				843
Distributions to noncontrolling interest			(857)	(85)
Ending Balance	1,842,192	1,903,930	1,842,192	1,903,930
Shareholders' Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			1,868,408	2,084,783
Exercise of stock options			88,851	34,669
Issuance of shares under stock purchase plan			25,850	23,800
Shares repurchased under provisions of stock repurchase plans			(415,475)	(475,160)
Stock compensation expense			32,489	32,220
Tax benefits from stock plans, net			1,191	1,031
Net earnings			342,774	277,507
Other comprehensive loss			(36,262)	(15,513)
Dividends paid			(68,781)	(62,807)
Purchase of noncontrolling interest				843
Ending Balance	1,839,045	1,901,373	1,839,045	1,901,373
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			3,200	1,548
Net earnings			1,623	1,213
Other comprehensive loss			(819)	(119)
Distributions to noncontrolling interest			(857)	(85)
Ending Balance	$ 3,147	$ 2,557	$ 3,147	$ 2,557

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2015

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 September 30, 2015:
Revenues from unaffiliated customers	$	441,097	56,818	24,681	648,096	158,011	234,334	88,295	—		1,651,332
Transfers between geographic areas	29,168		3,492	4,991	5,206	6,289	11,125	5,459	(65,730	)	—
Total revenues	$	470,265	60,310	29,672	653,302	164,300	245,459	93,754	(65,730	)	1,651,332
Net revenues1	$	232,912	32,713	17,115	135,488	45,970	77,250	28,533	—		569,981
Operating income	$	65,389	11,905	5,007	69,690	18,574	14,188	7,140	—		191,893
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	6,196	658	222	711	291	1,223	245	—		9,546
Depreciation and amortization	$	7,439	363	268	1,336	531	1,120	418	—		11,475
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Three months ended September 30, 2014:
Revenues from unaffiliated customers	$	438,882	55,209	22,962	670,763	174,839	259,960	82,490	—		1,705,105
Transfers between geographic areas	24,847		2,867	5,194	6,116	6,814	9,783	5,171	(60,792	)	—
Total revenues	$	463,729	58,076	28,156	676,879	181,653	269,743	87,661	(60,792	)	1,705,105
Net revenues1	$	215,320	27,323	16,792	106,225	42,023	80,024	25,549	—		513,256
Operating income	$	68,972	7,779	4,890	45,153	12,073	14,921	5,343	—		159,131
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	3,171	361	369	1,648	1,247	1,016	443	—		8,255
Depreciation and amortization	$	8,369	303	226	1,493	523	1,391	436	—		12,741
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Nine months ended September 30, 2015:
Revenues from unaffiliated customers	$	1,334,900	170,351	73,076	1,943,441	524,254	716,373	258,016	—		5,020,411
Transfers between geographic areas	89,329		9,991	15,171	16,330	18,677	31,478	15,638	(196,614	)	—
Total revenues	$	1,424,229	180,342	88,247	1,959,771	542,931	747,851	273,654	(196,614	)	5,020,411
Net revenues1	$	681,868	93,967	51,159	377,384	135,114	229,745	82,371	—		1,651,608
Operating income	$	193,117	33,433	15,804	187,343	48,594	44,846	20,355	—		543,492
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	20,232	2,602	1,408	1,476	1,599	3,292	1,294	—		31,903
Depreciation and amortization	$	22,171	965	784	4,114	1,609	3,542	1,239	—		34,424
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Nine months ended September 30, 2014:
Revenues from unaffiliated customers	$	1,256,075	162,136	65,594	1,863,077	468,152	744,466	236,391	—		4,795,891
Transfers between geographic areas	67,266		7,829	15,965	17,170	20,072	28,931	14,638	(171,871	)	—
Total revenues	$	1,323,341	169,965	81,559	1,880,247	488,224	773,397	251,029	(171,871	)	4,795,891
Net revenues1	$	607,508	79,017	48,797	297,117	121,261	234,313	74,543	—		1,462,556
Operating income	$	180,650	23,155	14,425	124,528	36,371	41,515	16,133	—		436,777
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	12,646	1,047	841	5,691	2,221	3,116	1,088	—		26,650
Depreciation and amortization	$	24,100	879	665	4,471	1,739	4,376	1,310	—		37,540
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

Schedule of Net Revenues Calculation

The following table presents the calculation of consolidated net revenues:

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Total revenues	$	1,651,332	$	1,705,105	$	5,020,411	$	4,795,891
Expenses:
Airfreight services	464,161		516,969		1,484,150		1,503,064
Ocean freight and ocean services	416,075		475,460		1,294,887		1,266,551
Customs brokerage and other services	201,115		199,420		589,766		563,720
Net revenues	$	569,981	$	513,256	$	1,651,608	$	1,462,556