Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 18, 2020 | Jun. 30, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | EXPD | ||
Entity Registrant Name | EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. | ||
Entity Central Index Key | 0000746515 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 12,821,403,723 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 169,764,263 | ||
Entity File Number | 0-13468 | ||
Entity Tax Identification Number | 91-1069248 | ||
Entity Address, Address Line One | 1015 Third Avenue | ||
Entity Address, City or Town | Seattle | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98104 | ||
City Area Code | 206 | ||
Local Phone Number | 674-3400 | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, par value $.01 per share | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | WA | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference [Text Block] | Portions of the definitive proxy statement for the Registrant’s 2020 Annual Meeting of Shareholders to be held on May 5, 2020 are incorporated by reference into Part III of this Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 1,230,491 | $ 923,735 |
Accounts receivable, net | 1,315,091 | 1,581,530 |
Deferred contract costs | 131,783 | 159,510 |
Other | 92,558 | 70,041 |
Total current assets | 2,769,923 | 2,734,816 |
Property and equipment, net | 499,344 | 504,105 |
Operating lease right-of-use assets | 390,035 | 0 |
Goodwill | 7,927 | 7,927 |
Deferred federal and state income taxes, net | 8,034 | 40,465 |
Other assets, net | 16,621 | 27,246 |
Total assets | 3,691,884 | 3,314,559 |
Current Liabilities: | ||
Accounts payable | 735,695 | 902,259 |
Accrued expenses, primarily salaries and related costs | 189,446 | 215,813 |
Contract liabilities | 154,183 | 190,343 |
Current portion of operating lease liabilities | 65,367 | 0 |
Federal, state and foreign income taxes | 23,627 | 18,424 |
Total current liabilities | 1,168,318 | 1,326,839 |
Noncurrent portion of operating lease liabilities | 326,347 | 0 |
Commitments and contingencies | ||
Shareholders’ Equity: | ||
Preferred stock, par value $0.01 per share, authorized 2,000 shares; none issued | 0 | 0 |
Common stock, par value $0.01 per share, authorized 640,000. Issued and outstanding: 169,622 shares at December 31, 2019 and 171,582 shares at December 31, 2018 | 1,696 | 1,716 |
Additional paid-in capital | 3,203 | 1,896 |
Retained earnings | 2,321,316 | 2,088,707 |
Accumulated other comprehensive loss | (131,187) | (105,481) |
Total shareholders’ equity | 2,195,028 | 1,986,838 |
Noncontrolling interest | 2,191 | 882 |
Total equity | 2,197,219 | 1,987,720 |
Total liabilities and equity | $ 3,691,884 | $ 3,314,559 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 640,000,000 | 640,000,000 |
Common stock, shares issued | 169,622,000 | 171,582,000 |
Common stock, shares outstanding | 169,622,000 | 171,582,000 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Revenues: | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | [1] | $ 8,175,426 | $ 8,138,365 | $ 6,920,948 |
Operating Expenses: | ||||
Directly related cost of transportation and other expenses | [2] | 5,538,958 | 5,517,992 | 4,601,759 |
Salaries and related costs | 1,422,315 | 1,393,259 | 1,267,120 | |
Rent and occupancy costs | 166,182 | 152,813 | 119,732 | |
Depreciation and amortization | 50,950 | 54,019 | 49,310 | |
Selling and promotion | 44,002 | 45,346 | 44,290 | |
Other | 186,327 | 178,373 | 138,477 | |
Total operating expenses | 7,408,734 | 7,341,802 | 6,220,688 | |
Operating income | 766,692 | 796,563 | 700,260 | |
Other Income (Expense): | ||||
Interest income | 22,803 | 19,153 | 13,204 | |
Other, net | 6,299 | 2,613 | 5,131 | |
Other income, net | 29,102 | 21,766 | 18,335 | |
Earnings before income taxes | 795,794 | 818,329 | 718,595 | |
Income tax expense | 203,778 | 198,539 | 228,212 | |
Net earnings | 592,016 | 619,790 | 490,383 | |
Less net earnings attributable to the noncontrolling interest | 1,621 | 1,591 | 1,038 | |
Net earnings attributable to shareholders | $ 590,395 | $ 618,199 | $ 489,345 | |
Diluted earnings attributable to shareholders per share | $ 3.39 | $ 3.48 | $ 2.69 | |
Basic earnings attributable to shareholders per share | $ 3.45 | $ 3.55 | $ 2.73 | |
Weighted average diluted shares outstanding | 174,209 | 177,833 | 181,666 | |
Weighted average basic shares outstanding | 170,899 | 174,133 | 179,247 | |
Airfreight services | ||||
Revenues: | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,929,882 | $ 3,271,932 | $ 2,877,032 | |
Operating Expenses: | ||||
Directly related cost of transportation and other expenses | 2,143,999 | 2,410,793 | 2,126,761 | |
Ocean freight and ocean services | ||||
Revenues: | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,217,554 | 2,251,754 | 2,107,045 | |
Operating Expenses: | ||||
Directly related cost of transportation and other expenses | 1,613,646 | 1,664,168 | 1,543,740 | |
Customs brokerage and other services | ||||
Revenues: | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,027,990 | 2,614,679 | 1,936,871 | |
Operating Expenses: | ||||
Directly related cost of transportation and other expenses | $ 1,781,313 | $ 1,443,031 | $ 931,258 | |
[1] | In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. | |||
[2] | Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the consolidated statements of earnings. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net earnings | $ 592,016 | $ 619,790 | $ 490,383 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments, net of tax expense (benefit) of $25,731 in 2019, $(13,364) in 2018 and $16,761 in 2017 | (26,553) | (32,390) | 30,434 |
Reclassification adjustment for foreign currency realized losses, net of tax of $145 in 2019 | 535 | 0 | 0 |
Other comprehensive (loss) income | (26,018) | (32,390) | 30,434 |
Comprehensive income | 565,998 | 587,400 | 520,817 |
Less comprehensive income attributable to the noncontrolling interest | 1,309 | 718 | 844 |
Comprehensive income attributable to shareholders | $ 564,689 | $ 586,682 | $ 519,973 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Comprehensive Income Loss Tax Parenthetical Disclosures [Abstract] | |||
Foreign currency translation adjustments, tax | $ 25,731 | $ (13,364) | $ 16,761 |
Reclassification adjustments for foreign currency realized losses, tax | $ 145 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Total shareholders’ equity | Noncontrolling interest |
Balance at Dec. 31, 2016 | $ 1,847,213 | $ 1,799 | $ 2,642 | $ 1,944,789 | $ (104,592) | $ 1,844,638 | $ 2,575 |
Balance (in shares) at Dec. 31, 2016 | 179,857 | ||||||
Increase (Decrease) in Equity [Roll Forward] | |||||||
Exercise of stock options and release of restricted shares | 176,325 | $ 40 | 176,285 | 176,325 | |||
Exercise of stock options and release of restricted shares (in shares) | 4,058 | ||||||
Issuance of shares under stock purchase plan | 28,767 | $ 7 | 28,760 | 28,767 | |||
Issuance of shares under stock purchase plan (in shares) | 682 | ||||||
Shares repurchased under provisions of stock repurchase plans | (478,258) | $ (82) | (258,049) | (220,127) | (478,258) | ||
Shares repurchased under provisions of stock repurchase plans (in shares) | (8,223) | ||||||
Stock compensation expense | 50,908 | 50,908 | 50,908 | ||||
Net earnings | 490,383 | 489,345 | 489,345 | 1,038 | |||
Other comprehensive income (loss) | 30,434 | 30,628 | 30,628 | (194) | |||
Dividends paid | (150,495) | (150,495) | (150,495) | ||||
Distributions to noncontrolling interest | (904) | (904) | |||||
Balance at Dec. 31, 2017 | 1,994,373 | $ 1,764 | 546 | 2,063,512 | (73,964) | 1,991,858 | 2,515 |
Balance (in shares) at Dec. 31, 2017 | 176,374 | ||||||
Increase (Decrease) in Equity [Roll Forward] | |||||||
Exercise of stock options and release of restricted shares | 146,193 | $ 36 | 146,157 | 146,193 | |||
Exercise of stock options and release of restricted shares (in shares) | 3,589 | ||||||
Issuance of shares under stock purchase plan | 33,291 | $ 6 | 33,285 | 33,291 | |||
Issuance of shares under stock purchase plan (in shares) | 666 | ||||||
Shares repurchased under provisions of stock repurchase plans | (647,898) | $ (90) | (234,160) | (413,648) | (647,898) | ||
Shares repurchased under provisions of stock repurchase plans (in shares) | (9,047) | ||||||
Stock compensation expense | 56,147 | 56,147 | 56,147 | ||||
Net earnings | 619,790 | 618,199 | 618,199 | 1,591 | |||
Other comprehensive income (loss) | (32,390) | (31,517) | (31,517) | (873) | |||
Dividends paid | (156,840) | 159 | (156,999) | (156,840) | |||
Purchase of noncontrolling interest | (688) | (238) | (238) | (450) | |||
Distributions to noncontrolling interest | (1,796) | (1,796) | |||||
Balance at Dec. 31, 2018 | $ 1,987,720 | $ 1,716 | 1,896 | 2,088,707 | (105,481) | 1,986,838 | 882 |
Balance (in shares) at Dec. 31, 2018 | 171,582 | 171,582 | |||||
Increase (Decrease) in Equity [Roll Forward] | |||||||
Cumulative adjustment for adoption of new accounting pronouncement | $ (22,462) | (22,357) | (22,357) | (105) | |||
Exercise of stock options and release of restricted shares | 103,696 | $ 28 | 103,668 | 103,696 | |||
Exercise of stock options and release of restricted shares (in shares) | 2,792 | ||||||
Issuance of shares under stock purchase plan | 37,875 | $ 6 | 37,869 | 37,875 | |||
Issuance of shares under stock purchase plan (in shares) | 585 | ||||||
Shares repurchased under provisions of stock repurchase plans | (389,060) | $ (54) | (202,176) | (186,830) | (389,060) | ||
Shares repurchased under provisions of stock repurchase plans (in shares) | (5,337) | ||||||
Stock compensation expense | 61,543 | 61,543 | 61,543 | ||||
Net earnings | 592,016 | 590,395 | 590,395 | 1,621 | |||
Other comprehensive income (loss) | (26,018) | (25,706) | (25,706) | (312) | |||
Dividends paid | (170,553) | 403 | (170,956) | (170,553) | |||
Balance at Dec. 31, 2019 | $ 2,197,219 | $ 1,696 | $ 3,203 | $ 2,321,316 | $ (131,187) | $ 2,195,028 | $ 2,191 |
Balance (in shares) at Dec. 31, 2019 | 169,622 | 169,622 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Stockholders Equity [Abstract] | |||
Dividends paid, per share | $ 1 | $ 0.90 | $ 0.84 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities: | |||
Net earnings | $ 592,016 | $ 619,790 | $ 490,383 |
Adjustments to reconcile net earnings to net cash from operating activities: | |||
(Recoveries) provisions for losses on accounts receivable | (1) | 3,808 | 5,356 |
Deferred income tax expense (benefit) | 4,482 | (12,031) | (43,695) |
Stock compensation expense | 61,543 | 56,147 | 50,908 |
Depreciation and amortization | 50,950 | 54,019 | 49,310 |
Other, net | 941 | 647 | (4,382) |
Changes in operating assets and liabilities: | |||
Decrease (increase) in accounts receivable | 265,919 | (214,971) | (184,771) |
(Decrease) increase in accounts payable and accrued expenses | (181,987) | 86,036 | 114,631 |
Decrease (increase) in deferred contract costs | 28,811 | (42,097) | |
(Decrease) increase in contract liabilities | (37,097) | 43,928 | |
(Decrease) increase in income taxes payable, net | (18,472) | (19,691) | 16,264 |
Decrease (increase) in other, net | 4,830 | (2,781) | (5,365) |
Net cash from operating activities | 771,935 | 572,804 | 488,639 |
Investing Activities: | |||
Purchase of property and equipment | (47,022) | (47,474) | (95,016) |
Proceeds from sale of property and equipment | 579 | 215 | 84,405 |
Other, net | 428 | (1,140) | (1,074) |
Net cash from investing activities | (46,015) | (48,399) | (11,685) |
Financing Activities: | |||
Proceeds from issuance of common stock | 148,245 | 182,732 | 205,092 |
Repurchases of common stock | (389,060) | (647,898) | (478,258) |
Dividends Paid | (170,553) | (156,840) | (150,495) |
Payments for taxes related to net share settlement of equity awards | (6,674) | (3,248) | |
Purchase of noncontrolling interest | (688) | ||
Distributions to noncontrolling interest | (1,796) | (904) | |
Net cash from financing activities | (418,042) | (627,738) | (424,565) |
Effect of exchange rate changes on cash and cash equivalents | (1,122) | (24,031) | 24,275 |
Change in cash and cash equivalents | 306,756 | (127,364) | 76,664 |
Cash and cash equivalents at beginning of period | 923,735 | 1,051,099 | 974,435 |
Cash and cash equivalents at end of period | 1,230,491 | 923,735 | 1,051,099 |
Supplemental Cash Flow Information: | |||
Cash paid for income taxes | $ 222,083 | $ 239,255 | $ 249,704 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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, high technology, industrial and manufacturing companies around the world. 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 tariffs and trade restrictions and accords. The Company cannot predict the outcome of ongoing proposals or negotiations, nor can the Company predict the effects 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 and inter-governmental disputes concerning international trade, 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 and on the shipping lanes in which it does business and the future impact that these events may have on international trade, oil prices and security costs. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The consolidated financial statements include the accounts of the Company and its subsidiaries stated in U.S. dollars, the Company’s reporting currency. In addition, the consolidated financial statements also include the accounts of operating entities where the Company maintains a parent-subsidiary relationship through unilateral control over assets and operations together with responsibility for payment of all liabilities, notwithstanding a lack of technical majority ownership of the subsidiary's common stock. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. Certain prior year amounts in the notes to the consolidated financial statements have been revised to conform to the 2019 presentation. B. | Cash Equivalents All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents. C. | 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 $11,143, $15,345 and $12,858 as of December 31, 2019, 2018 and 2017, respectively. Additions and write-offs have not been significant in any of these years. D. | Long-Lived Assets, Depreciation and Amortization Property and equipment are recorded at cost and are depreciated or amortized on the straight-line method over the shorter of the assets’ estimated useful lives or lease terms. Useful lives for major categories of property and equipment are as follows: Buildings and land improvements 30 to 40 years Building improvements 3 to 10 years Furniture, fixtures, equipment and purchased software 3 to 10 years Expenditures for maintenance, repairs, and replacements of minor items are charged to earnings as incurred. Major upgrades and improvements that extend the life of the asset are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income for the period. For the years ended December 31, 2019 and 2018 , the Company performed the required goodwill annual impairment test during the fourth quarter and determined that no impairment had occurred. E. | Revenues and Revenue Recognition Effective January 1, 2018, the Company adopted Topic 606 Revenue from Contracts with Customers (Topic 606). The adoption of Topic 606 did not materially impact the Company's revenue recognition policy. The Company adopted the standard using the modified retrospective transition method applied to those contracts not completed as of January 1, 2018, resulting in a $22 million adjustment to the opening balance of retained earnings and the recording of deferred contract costs and contract liabilities of $135 million and $165 million, respectively. The Company satisfied nearly all performance obligations for the contract liabilities recorded upon adoption at January 1, 2018, and recognized the corresponding revenues and costs during the first quarter of 2018. In conjunction with the adoption of Topic 606, the Company also changed its presentation of certain warehouse and distribution revenues from a net to a gross basis, which increased customs brokerage and other services revenues and operating expenses by approximately $225 million in 2018 compared to 2017. Comparative prior year information has not been adjusted and continues to be reported under the Company's historical revenue recognition policies. The Company provides global logistics services, including air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking and other logistics solutions. As a non-asset based carrier, the Company does not own transportation assets. The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. The Company's three principal services are the revenue categories presented in the Consolidated Statements of Earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. The 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. The major portion of the Company's air and ocean freight revenues are generated by purchasing transportation services on a wholesale basis from direct (asset-based) carriers and then reselling those services to customers on a retail basis. The rate billed to our customers (the sell rate) is recognized as revenues and the rate we pay to the carrier (the buy rate) is recognized in operating expenses as the directly related cost of transportation and other expenses. Effective January 1, 2018, revenue is recognized upon transfer of control of promised services to customers, which occurs over time. The Company has determined that in general each shipment transaction or service order constitutes a separate contract with the customer. However, when the Company provides multiple services to a customer, different contracts may be present for different services. The Company combines the contracts, which form a single performance obligation, and accounts for the contracts as a single contract when certain criteria are met. The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. This method of measurement of progress depicts the pattern of the Company's actual performance under the contracts with the customer. There are no significant judgments involved in measuring the progress of the performance obligations. Amounts allocated to the services for each performance obligation are typically based on standalone selling prices. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Typically, the transaction price for each of the Company's services are quoted as separate components; however, customers on occasion will request an all-inclusive rate for a set of services known in the industry as “door-to-door service.” This means that the customer is billed a single rate for all services from pickup at origin to delivery at destination. In these instances, the transaction price is allocated to each service on a relative selling price basis. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year . The Company generally has an unconditional right to consideration when the services are initiated or soon thereafter. The amount due from the customer is recorded as accounts receivable. The amounts related to services that are not yet completed at the reporting date are presented as contract liabilities, with corresponding direct costs to fulfill the performance obligation that will be satisfied in the future presented as deferred contract costs. The Company generally does not incur incremental costs to obtain the contract with the customer. The Company may incur costs to fulfill the contract with the customers, such as set-up costs. However, the amount incurred is insignificant to the Company’s consolidated financial statements. The Company evaluates whether amounts billed to customers should be reported as gross or net revenue. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it assumes risk of loss, when it has discretion in setting the prices for the services to the customers, and when the Company has the ability to direct the use of the services provided by the third party. The Company disaggregates its revenues by its three primary service categories in the consolidated financial statements: airfreight, ocean freight and ocean services and customs brokerage and other. Revenues by geographic location are presented within business segment information in Note 10. In 2019, the Company revised its presentation for revenue transfers between its geographic operating segments and services rendered at the destination, which moved certain revenues and directly related operating expenses for air and ocean transactions to destination services within customs brokerage and other services. These changes better align revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased revenues and directly related operating expenses in customs brokerage and other services but did not change operating income. The impact on reported consolidated and segment total revenues and expenses for these changes was immaterial and the prior year presentation has not been revised. F. | Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, the tax effect of loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Earnings of the Company's foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States. Accordingly, prior to the implementation of the requirements of U.S. tax reform under the Tax Cuts and Jobs Act (2017 Tax Act) in December of 2017, U.S. Federal and State income taxes were provided for all undistributed earnings net of related foreign tax credits. See Note 7 for impacts associated with U.S. tax reform under the 2017 Tax Act. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company recognizes interest expense related to unrecognized tax benefits or underpayment of income taxes in interest expense and recognizes penalties in operating expenses. The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as discrete adjustments as components of current income tax expense. In February 2018, the Financial Accounting Standards Board (FASB) issued amended guidance for reporting comprehensive income to reflect changes resulting from the 2017 Tax Act. The amendment, which had an effective date of January 1, 2019, provided the option to reclassify stranded tax effects resulting from the 2017 Tax Act within accumulated other comprehensive income (AOCI) to retained earnings. The Company elected to not reclassify stranded income tax effects from AOCI to retained earnings, including those related to implementation of the 2017 Tax Act. Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. G | Net Earnings Attributable to Shareholders per Common Share Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential common shares represent outstanding stock options, stock purchase rights and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. H. | Stock Plans The Company maintains several equity incentive plans under which the Company has granted stock options, director restricted stock, restricted stock units (RSUs), performance stock units (PSUs) and employee stock purchase rights to employees or directors. The Company recognizes stock compensation expense based on the fair value of awards at the grant date. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the service periods as a component of salaries and related costs. Expense for PSU awards is recognized over the service period when it is probable the performance goal will be achieved. RSUs and PSUs awarded to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately, as there is no substantive service period associated with those awards. I. | Foreign Currency Foreign currency amounts attributable to foreign operations have been translated into U.S. dollars using year-end exchange rates for assets and liabilities, historical rates for equity, and weighted average rates for revenues and expenses. Translation adjustments resulting from this process are recorded as components of other comprehensive income until complete or substantially complete liquidation by the Company of its investment in a foreign entity. Currency fluctuations are a normal operating factor in the conduct of the Company’s business and foreign exchange transaction gains and losses are included in revenues and operating expenses. Also, the Company is exposed to foreign currency exchange fluctuations on monetary assets and liabilities denominated in currencies that are not the local functional currency. Foreign exchange gains and losses on such balances are recognized in net earnings within customs brokerage and other services costs. Net foreign currency losses in 2019, 2018 and 2017 were $9,251, $1,853 and $13,315, respectively. The Company follows a policy of accelerating international currency settlements to manage its foreign exchange exposure. Accordingly, the Company enters into foreign currency hedging transactions only in limited locations where there are regulatory or commercial limitations on the Company’s ability to move money freely. Such hedging activity during 2019, 2018 and 2017 was insignificant. The Company had no foreign currency derivatives outstanding at December 31, 2019 and 2018. J. | Comprehensive Income Comprehensive income consists of net earnings and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net earnings. For the Company, these consist of foreign currency translation gains and losses, net of related income tax effects and comprehensive income or loss attributable to the noncontrolling interests. Upon the complete or substantially complete liquidation of the Company's investment in a foreign entity, cumulative translation adjustments are recorded as reclassification adjustments in other comprehensive income and recognized in net earnings. Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, as of December 31, 2019 and 2018. K. | Segment Reporting The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenue, salaries and other operating expenses, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. L. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of liabilities for the portion of the related exposure that the Company has self-insured, accrual of various tax liabilities including estimates associated with the 2017 Tax Act, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could be materially different from the estimated provisions and accruals recorded. M. | Recent Accounting Pronouncements Leases Effective January 1, 2019, the Company adopted new lease accounting guidance using a modified retrospective approach and recognizing a right-of-use (ROU) asset and lease liability on the balance sheet. On January 1, 2019, ROU assets and lease liabilities were recorded for all existing leases exceeding one-year terms and were measured at the present value of lease payments over the remaining lease term. The adoption of this accounting standard resulted in recording ROU assets and lease liabilities for operating leases of $343 million and $340 million, respectively, as of January 1, 2019. The adoption of this standard had no impact on retained earnings in the consolidated balance sheets. In recording the ROU asset and lease liability, the Company elected to apply the following practical expedients: • Package of practical expedients not to reassess: ◦ Whether a contract is or contains a lease, ◦ Historical lease classification and ◦ Initial direct costs. • Use of hindsight when determining the lease term. Additionally, the Company has elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and has chosen not to separate nonlease components from lease components and instead to account for each as a single lease component. The Company determines if an arrangement is a lease at inception. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As the Company's leases generally do not have an implicit rate, the Company uses an estimated incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of the leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from ROU assets and lease liabilities, to the extent not considered fixed, and instead expenses variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses in the consolidated statements of earnings. Credit Losses on Financial Instruments In June 2016, the FASB issued an Accounting Standards Update (ASU), which amends existing guidance for the accounting of credit losses on financial instruments. Under the ASU, the valuation allowance for credit losses are expected to be incurred over the financial asset’s contractual term. The Company reviewed the new credit loss standard and determined that it applied to Company's accounts receivable, which are of short duration and for which the Company has not historically experienced significant credit losses. The Company will adopt this standard effective January 1, 2020 with a cumulative effect of adoption recorded as an adjustment to retained earnings. The Company evaluated the impact of the new prescribed credit loss model and compared it to its current methodology, and determined that it does not have a material effect on the Company’s consolidated financial statements and related disclosures. Simplifying the Accounting for Income T axes In December 2019, the FASB issued an ASU, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application among reporting entities. This standard will become effective for the Company on January 1, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | NOTE 2. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments, other than cash, consist primarily of cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. Cash and cash equivalents consist of the following: December 31, 2019 December 31, 2018 Cost Fair Value Cost Fair Value Cash and cash equivalents: Cash and overnight deposits $ 417,456 $ 417,456 $ 427,307 $ 427,307 Corporate commercial paper 775,504 776,356 467,300 467,760 Time deposits 37,531 37,531 29,128 29,128 Total cash and cash equivalents $ 1,230,491 $ 1,231,343 $ 923,735 $ 924,195 The fair value of corporate commercial paper and time deposits is based on the use of market interest rates for identical or similar assets (Level 2 fair value measurement). |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 . PROPERTY AND EQUIPMENT The components of property and equipment are as follows: 2019 2018 Land $ 145,172 $ 144,521 Buildings and leasehold improvements 478,361 473,663 Furniture, fixtures, equipment and purchased software 353,923 330,316 Construction in progress 794 2,582 Property and equipment, at cost 978,250 951,082 Less accumulated depreciation and amortization 478,906 446,977 Property and equipment, net $ 499,344 $ 504,105 In December 2017, the Company sold land and buildings in Miami, Florida, which had a net book value of $80 million. The Company recorded a $4 million gain from the sale in 2017, which is reported in the United States segment within other operating expenses in the consolidated statements of earnings. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Lessee, Operating Leases | NOTE 4 . LEASES The Company enters into lease agreements primarily for office and warehouse space in all districts where it conducts business. As of December 31, 2019, all of the Company's leases are operating leases. Lease terms are either on a month-to-month basis or terminate at various times through 2032. The Company also has two long-term operating lease arrangements to use land, for which the usage rights were entirely prepaid. Usage rights for those arrangements are recognized in rent expense over the lease terms up to 2057. Lease cost for the year ended December 31, 2019 is recorded under rent and occupancy expenses in the consolidated statements of earnings and is comprised of the following: 2019 Operating lease cost $ 81,912 Variable lease cost 25,843 Total lease cost $ 107,755 Variable lease cost includes short-term lease expenses, which are insignificant. Maturities of lease liabilities as of December 31, 2019 are as follows: 2020 $ 81,713 2021 72,881 2022 66,099 2023 56,570 2024 44,302 Thereafter 145,661 Total minimum lease payments 467,226 Less imputed interest 75,512 Lease liability $ 391,714 The weighted-average remaining lease term and weighted-average discount rate as of December 31, 2019 are as follows: Weighted-average remaining lease term (in years) 7.37 Weighted-average discount rate 4.78 % Other information related to the Company's operating leases are as follows: 2019 Right-of-use assets obtained in exchange for new operating lease liabilities $ 103,788 Cash paid for amounts included in the measurement of lease liabilities $ 79,040 Supplemental Information for Comparative Periods At December 31, 2018, the last balance sheet presented before the adoption of the new accounting standard Topic 842 Leases, future minimum annual lease payments under all noncancelable operating leases were as follows: 2019 $ 75,227 2020 62,974 2021 47,552 2022 38,352 2023 26,580 Thereafter 67,140 $ 317,825 The Company recorded rent expense under operating leases of $89,377 and $68,920 for the years ended December 31, 2018 and December 31, 2017, respectively. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders Equity Note [Abstract] | |
Shareholders' Equity | NOTE 5 . SHAREHOLDERS’ EQUITY A. | Stock Repurchase Plans The Company has a Discretionary Stock Repurchase Plan originally approved by the Board of Directors in November 2001, and amended from time to time under which management as of December 31, 2019 is authorized to repurchase shares down to 160,000 shares of common stock outstanding. The Company had a Non-Discretionary Stock Repurchase Plan, originally approved by the Board of Directors in November 1993, under which management is authorized to repurchase up to 40,000 shares of the Company’s common stock in the open market with the proceeds received from the exercise of employee stock options and the Employee Stock Purchase Plan. Since March 31, 2019, all shares authorized under this plan have been repurchased and no further shares are available for future repurchases. The following table summarizes by plan the Company’s repurchasing activity: Cumulative shares repurchased Average price per share Non-Discretionary Plan (1994 through 2019) 40,000 $ 35.29 Discretionary Plan (2001 through 2019) 73,991 $ 46.67 B. | Omnibus Incentive Plan On May 2, 2017, the shareholders approved the Company's 2017 Omnibus Incentive Plan (2017 Plan), which made available 2,500 shares of the Company's common stock in aggregate to be issued under any award type allowed by the 2017 Plan. The RSUs granted in 2019, 2018 and 2017 vest annually over three years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The following table summarizes information about RSUs: Number of shares Weighted average grant date fair value Outstanding at December 31, 2018 834 $ 62.51 RSUs granted 475 $ 75.73 RSUs vested (337 ) $ 60.92 RSUs forfeited (26 ) $ 66.03 Outstanding at December 31, 2019 946 $ 69.54 In 2019 and 2018, the Company also awarded 96 and 18 PSUs, respectively, under the 2017 Plan. Outstanding PSUs include performance conditions to be finally measured based on financial results at December 31, 2019, 2020 and 2021. The final number of PSUs will be determined using an adjustment factor of up to 2 times or down to 0.5 of the targeted PSU grant, depending on the degree of achievement of the designated performance targets. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting. At December 31, 2019 and December 31, 2018, there were 137 shares and 41 shares of PSUs unvested at target levels, respectively, with a weighted-average grant date fair value of $71.28 and $60.83, respectively. RSUs and PSUs granted under the 2017 Plan have dividend equivalent rights, which entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs and are accumulated and paid in shares when the underlying awards vest. At December 31, 2019, there are approximately 744 shares available for grant under the 2017 plan. When restrictions on RSUs or PSUs lapse the Company derives a tax deduction in certain countries based on the fair market value of the award upon vesting and subject to the limits allowed under each jurisdiction’s tax regulations. Until vesting, a deferred tax asset is recognized and measured based on the fair value of the award at the date of grant (consistent with measurement for stock compensation expense). Any excess or shortfall in the tax deduction resulting from the difference between fair market value of the award between the date of grant and the date of vesting is recognized in income tax expense upon vesting. C. | Stock Option Plans Historically, the Company granted stock options under stock option plans approved annually by shareholders. Those plans generally allowed for the grant of qualified and non-qualified grants and outstanding options expire no more than ten years from the date of grant. Stock options granted in 2016 vest over three years from the date of grant as compared to five years for options granted in prior years. Stock options were last granted in 2016 under the Company's 2016 stock options plan. No additional shares can be granted under any of the Company's stock option plans other than the 2017 Plan. Upon the exercise of non-qualified stock options and disqualifying dispositions of incentive stock options, the Company derives a tax deduction measured by the excess of the market value over the option price at the date of exercise or disqualifying disposition. The portion of the benefit from the deduction, which equals the estimated fair value of the options (previously recognized as compensation expense) is recorded as a credit to the deferred tax asset for non-qualified stock options and is recorded as a credit to current tax expense for any disqualified dispositions of incentive stock options. For disqualifying dispositions, when the amount of the tax deduction is less than the cumulative amount of compensation expense recognized for the award, the amount credited to current tax expense is limited to the tax benefit associated with the tax deduction. The following table summarizes information about stock options: Number of shares Weighted average exercise price per share Weighted average remaining contractual life Aggregate intrinsic value Outstanding at December 31, 2018 9,353 $ 44.60 Options granted — $ — Options exercised (2,518 ) $ 43.85 Options forfeited (62 ) $ 46.89 Options canceled (10 ) $ 45.98 Outstanding at December 31, 2019 6,763 $ 44.85 4.33 $ 224,309 Exercisable at December 31, 2019 6,159 $ 44.62 4.22 $ 205,731 D. | Stock Purchase Plan In May 2002, the shareholders approved the Company’s 2002 Employee Stock Purchase Plan (the 2002 Plan), which became effective August 1, 2002. As last amended in May 2019, the Company’s 2002 Plan provides for 15,305 shares of the Company’s common stock to be reserved for issuance upon exercise of purchase rights granted to employees who elect to participate through regular payroll deductions beginning August 1 of each year. The purchase rights are exercisable on July 31 of the following year at a price equal to the lesser of (1) 85% of the fair market value of the Company’s stock on the last trading day in July or (2) 85% of the fair market value of the Company’s stock on the first trading day in August of the preceding year. A total of 12,147 shares have been issued under the 2002 Plan since inception and $20,466 has been withheld from employees at December 31, 2019 in connection with the plan year ending July 31, 2020. E. | Director Restricted Stock Plan On May 7, 2014, the shareholders approved the Company’s 2014 Directors’ Restricted Stock Plan (the 2014 Directors’ Plan), which provides for annual awards of restricted stock to non-employee directors and makes 250 shares of the Company’s common stock available for grant. The plan provides for an annual grant of restricted stock awards with a fair market value equal to $200 to each participant on May 20 of each year. Each restricted stock award under the 2014 Directors’ Plan vests either at the time of grant or with a vesting schedule, as determined by the Compensation Committee of the Board of Directors. Restricted shares granted in 2017, 2018 and 2019 vested at the time of grant and there were no unvested restricted shares as of December 31, 2019. In 2019, restricted shares totaling 24 were granted with a fair value per share of $73.85. Restricted shares entitle the grantees to all shareholder rights, including cash dividends and transfer rights once vested. There are no shares available for grant as of December 31, 2019 as no shares can be granted under this plan after June 1, 2019 . Subsequent to June 1, 2019, shares awarded to non-employee directors can be granted under the Omnibus Incentive Plan. F. | Share-Based Compensation Expense The fair value of employee stock purchase rights granted under the 2002 Plan is estimated on the date of grant using the Black-Scholes Model with the following assumptions: For the years ended December 31, 2019 2018 2017 Dividend yield 1.40 % 1.30 % 1.50 % Volatility 23 % 22 % 14 % Risk-free interest rates 1.96 % 2.39 % 1.22 % Expected life (years) 1 1 1 Weighted average fair value $ 17.03 $ 17.49 $ 11.69 The Company’s expected volatility assumptions are based on the historical volatility of the Company’s stock over a period of time commensurate to the expected life. The expected life assumption is based on the one-year offering period. The risk-free interest rate for the expected term of the option is based on the corresponding yield curve in effect at the time of grant for U.S. Treasury bonds having the same term as the expected life of the option. The expected dividend yield is based on the Company’s historical experience. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The compensation expense for employee RSUs and PSUs is based on the fair market value of the Company’s share of common stock on the date of grant. RSUs and PSUs awarded in 2019, 2018 and 2017 were granted at a weighted-average grant date fair value of $75.73 $69.58 $54.11 The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was approximately $79 million, $92 million and $55 million, respectively. As of December 31, 2019, the total unrecognized compensation cost related to stock awards is $50 million and the weighted average period over which that cost is expected to be recognized is 1.7 years. Shares issued as a result of stock option exercises, restricted stock awards, vested RSUs, vested PSUs and employee stock plan purchases are issued as new shares outstanding by the Company. |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | NOTE 6 . BASIC AND DILUTED EARNINGS PER SHARE Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan and unvested RSUs. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders. Net earnings attributable to shareholders Weighted average shares Earnings per share 2019 Basic earnings attributable to shareholders $ 590,395 170,899 $ 3.45 Effect of dilutive potential common shares — 3,310 — Diluted earnings attributable to shareholders $ 590,395 174,209 $ 3.39 2018 Basic earnings attributable to shareholders $ 618,199 174,133 $ 3.55 Effect of dilutive potential common shares — 3,700 — Diluted earnings attributable to shareholders $ 618,199 177,833 $ 3.48 2017 Basic earnings attributable to shareholders $ 489,345 179,247 $ 2.73 Effect of dilutive potential common shares — 2,419 — Diluted earnings attributable to shareholders $ 489,345 181,666 $ 2.69 Substantially all outstanding potential common shares in 2019, 2018 and 2017 were dilutive. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 . INCOME TAXES On December 22, 2017, the United States enacted the 2017 Tax Act. The 2017 Tax Act, which is also commonly referred to as “U.S. tax reform”, significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate from 35% to 21% starting in 2018 and created a territorial tax system with a one-time mandatory tax on the undistributed foreign earnings of the Company's non-U.S. subsidiaries. As a result, the Company recorded a net income tax benefit of $13.9 million during the fourth quarter of 2017. This amount, which reduced income tax expense, consisted of three components: i. $116.2 million of deferred income tax benefit resulting from the remeasurement of net deferred tax liabilities based on the new lower U.S. income tax rate, ii. $70.2 million provisional estimate of deferred income tax expense for the reversal of net deferred tax asset provided for foreign income tax credits in excess of unremitted foreign earnings (after adjustment of the unremitted foreign earnings liability to reflect the lower U.S. tax rate) to transition to the territorial tax system, and iii. $32.1 million of current income tax expense relating to the provisional estimate of the one-time mandatory tax (Transition Tax) on undistributed earnings of the Company's non-U.S. subsidiaries. In addition, as a result of the transition to a territorial tax system in the U.S., the effective tax rate for the year ended December 31, 2017 included a $25.4 million income tax benefit, as foreign tax rates were lower than the 2017 U.S. corporate income tax rate of 35%. Given the significance of the legislation, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allowed registrants to record provisional amounts of income tax during a one-year “measurement period.” Provisional amounts included any changes as a result of further guidance and interpretations issued in the future and also included any indirect impacts required to be recorded, including for example amounts recorded for state income taxes. December 2018 marked the end of the provisional measurement period for purposes of SAB 118. As such, the Company has completed the analysis based on current legislative updates relating to the 2017 Tax Act, which resulted in an increase of $1 million to the Transition Tax obligation initially recorded in 2017. The Company also decreased its provisional foreign tax credits on repatriated earnings initially recorded at December 31, 2017, by $3.6 million during 2018 based on additional guidance and clarifications issued. Income tax expense (benefit) includes the following components: Federal State Foreign Total 2019 Current $ 35,324 $ 13,711 $ 150,261 $ 199,296 Deferred 3,149 1,333 — 4,482 $ 38,473 $ 15,044 $ 150,261 $ 203,778 2018 Current $ 45,996 $ 13,262 $ 151,312 $ 210,570 Deferred (9,759 ) (2,272 ) — (12,031 ) $ 36,237 $ 10,990 $ 151,312 $ 198,539 2017 Current $ 101,821 $ 20,490 $ 149,596 $ 271,907 Deferred (42,474 ) (1,221 ) — (43,695 ) $ 59,347 $ 19,269 $ 149,596 $ 228,212 The components of earnings before income taxes are as follows: 2019 2018 2017 United States $ 327,878 $ 313,178 $ 276,714 Foreign 467,916 505,151 441,881 $ 795,794 $ 818,329 $ 718,595 Income tax expense differs from amounts computed by applying the United States Federal income tax rate of 21% in both 2019 and 2018 and 35% in 2017 when compared to earnings before income taxes as a result of the following: 2019 2018 2017 Computed “expected” tax expense $ 167,117 $ 171,849 $ 251,508 Increase (decrease) in income taxes resulting from: Effect of foreign taxes 26,599 16,445 (25,374 ) State income taxes, net of Federal income tax benefit 11,885 8,682 12,525 Nondeductible executive compensation 2,838 3,126 — Stock compensation expense, net (2,689 ) (3,860 ) 63 Enactment of 2017 Tax Act — — (13,894 ) Other, net (1,972 ) 2,297 3,384 $ 203,778 $ 198,539 $ 228,212 In addition to the lower U.S. federal tax rate that resulted from the 2017 Tax Act, the Company's effective tax rate in both 2019 and 2018 benefited from significant share-based compensation deductions. In 2019 and 2018, the Company also benefited from U.S. Federal tax credits totaling $15.7 million and $20.3 million, respectively, principally because of withholding taxes related to the Company's foreign operations, as well as U.S. income tax deductions for Foreign-derived intangible income (FDII) of $9.0 million and $4.8 million, respectively. Also, in both 2019 and 2018, the Company received state income tax refunds totaling approximately $4 million. These amounts were partially offset by the effect of higher foreign tax rates of the Company's international subsidiaries, when compared to the U.S. Federal income tax rate of 21%, as well as certain expenses that are no longer deductible under the 2017 Tax Act, including certain executive compensation in excess of amounts allowed. The tax effects of temporary differences and tax credits that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows: Years ended December 31, 2019 2018 Deferred Tax Assets: Deductible stock compensation expense, net $ 18,569 $ 19,011 Operating lease liabilities 52,966 — Accrued third party obligations, deductible for taxes upon economic performance 5,333 7,726 Excess of financial statement over tax depreciation 5,802 5,134 Foreign currency translation adjustments 9,248 37,299 Retained liability for cargo claims 1,006 1,025 Provision for doubtful accounts receivable 916 1,443 Total gross deferred tax assets 93,840 71,638 Deferred Tax Liabilities: Unremitted foreign earnings, net of related foreign tax credits 31,615 31,173 Operating lease assets 52,351 — Deferred contract costs 1,840 — Total gross deferred tax liabilities 85,806 31,173 Net deferred tax assets $ 8,034 $ 40,465 Based on management’s review of the Company’s tax positions, the Company had no significant unrecognized tax benefits as of December 31, 2019 and 2018. The Company is subject to taxation in various states and many foreign jurisdictions including the People’s Republic of China, including Hong Kong, Taiwan, Vietnam, India, Mexico, Canada, Netherlands and the United Kingdom. The Company believes that its tax positions, including intercompany transfer pricing policies, are reasonable and consistently applied. ometimes audits result in proposed assessments where the ultimate resolution could result in significant additional tax, penalties and interest payments being required. The Company establishes liabilities when, despite its belief that the tax return positions are appropriate and consistent with tax law, it concludes that it may not be successful in realizing the tax position. In evaluating a tax position, the Company determines whether it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position and in consultation with qualified tax advisors. The total amount of the Company’s tax contingencies may increase in 2020. In addition, changes in state, federal, and foreign tax laws and changes in interpretations of these laws may increase the Company’s existing tax contingencies. The timing of the resolution of income tax examinations can be highly uncertain, and the amounts ultimately paid including interest and penalties, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts recorded. It is reasonably possible that within the next twelve months the Company may undergo further audits and examinations by various tax authorities and possibly may reach resolution related to income tax examinations in one or more jurisdictions. These assessments or settlements could result in changes to the Company’s contingencies related to positions on tax filings in future years. The estimate of any ultimate tax liability contains assumptions based on experiences, judgments about potential actions by taxing jurisdictions as well as judgments about the likely outcome of issues that have been raised by the taxing jurisdiction. Any interest and penalties expensed in relation to the underpayment of income taxes were insignificant for the years ended December 31, 2019, 2018 and 2017. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments [Abstract] | |
Commitments Disclosure | NOTE 8 . COMMITMENTS A. | Unconditional Purchase Obligations The Company enters into short-term unconditional purchase obligations with asset-based providers reserving space on a guaranteed basis. The pricing of these obligations varies to some degree with market conditions. Historically, the Company has met these obligations in the normal course of business within one year. In the regular course of business, the Company also enters into agreements with service providers to maintain or operate equipment, facilities or software that can be longer than one year. We also regularly have contractual obligations for specific projects related to improvements of our owned or leased facilities and information technology infrastructure. Purchase obligations outstanding as of December 31, 2019 totaled $96,380. B . | Employee Benefits The Company has employee savings plans under which the Company provides a discretionary matching contribution. In 2019, 2018 and 2017, the Company’s contributions under the plans were $19,624, $19,600, and $18,210, respectively. C. | Credit Arrangements Certain of the Company’s foreign subsidiaries maintain bank lines of credit for short-term working capital purposes. A few of these credit lines are supported by standby letters of credit issued by a United States bank, or guarantees issued by the Company to the foreign banks issuing the credit line. At December 31, 2019, the Company was contingently liable for approximately $69,489 under outstanding standby letters of credit and guarantees. At December 31, 2019, the Company was in compliance with all restrictive covenants of these credit lines and the associated credit facilities. 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 excise taxes 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 were to be required to perform. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingency [Abstract] | |
Contingencies | NOTE 9 . 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 December 31, 2019, the amounts recorded for these claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations, cash flows or financial position. At this time, the Company is unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | NOTE 10. BUSINESS SEGMENT INFORMATION Financial information regarding 2019, 2018 and 2017 operations by the Company’s designated geographic areas is as follows: UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMINATIONS CONSOLIDATED 2019 Revenues 1 $ 2,712,067 354,405 150,202 2,494,556 743,406 1,280,669 443,487 (3,366 ) 8,175,426 Directly related cost of transportation and other expenses 2 $ 1,528,815 212,369 87,297 1,970,662 544,873 884,968 311,997 (2,023 ) 5,538,958 Salaries and other operating expenses 3 $ 859,946 101,654 55,512 271,594 127,478 342,073 112,844 (1,325 ) 1,869,776 Operating income $ 323,306 40,382 7,393 252,300 71,055 53,628 18,646 (18 ) 766,692 Identifiable assets at period end $ 1,978,307 153,813 72,677 538,526 178,336 551,576 219,953 (1,304 ) 3,691,884 Capital expenditures $ 28,666 2,353 1,556 1,767 1,558 9,231 1,891 — 47,022 Depreciation and amortization $ 31,049 1,881 1,489 5,263 1,912 7,398 1,958 — 50,950 Equity $ 1,521,059 65,100 29,148 247,725 94,727 159,308 114,726 (34,574 ) 2,197,219 2018 Revenues 1 $ 2,479,812 355,802 156,854 2,886,322 777,863 1,330,365 464,071 (312,724 ) 8,138,365 Directly related cost of transportation and other expenses 2 $ 1,352,924 216,753 94,041 2,315,826 591,925 926,949 330,209 (310,635 ) 5,517,992 Salaries and other operating expenses 3 $ 816,817 94,950 53,970 289,015 125,056 337,970 108,131 (2,099 ) 1,823,810 Operating income $ 310,071 44,099 8,843 281,481 60,882 65,446 25,731 10 796,563 Identifiable assets at period end $ 1,689,950 161,604 53,542 533,071 152,646 513,744 206,367 3,635 3,314,559 Capital expenditures $ 21,732 4,259 1,042 3,057 2,182 10,815 4,387 — 47,474 Depreciation and amortization $ 33,511 1,847 1,508 5,309 2,257 7,727 1,860 — 54,019 Equity $ 1,339,673 72,941 26,007 200,371 100,706 157,003 123,228 (32,209 ) 1,987,720 2017 Revenues 1 $ 1,962,558 268,186 111,862 2,598,376 684,877 1,115,324 426,069 (246,304 ) 6,920,948 Directly related cost of transportation and other expenses 2 $ 953,717 149,115 53,663 2,089,141 521,427 779,622 304,802 (249,728 ) 4,601,759 Salaries and other operating expenses 3 $ 731,020 80,940 48,235 260,813 110,393 287,211 96,902 3,415 1,618,929 Operating income $ 277,821 38,131 9,964 248,422 53,057 48,491 24,365 9 700,260 Identifiable assets at period end $ 1,595,140 151,181 55,431 458,152 137,279 501,711 215,495 2,619 3,117,008 Capital expenditures $ 28,212 1,563 4,612 3,756 1,688 53,954 1,231 — 95,016 Depreciation and amortization $ 32,017 1,546 1,277 5,326 2,215 5,068 1,861 — 49,310 Equity $ 1,337,568 60,705 26,546 240,721 94,516 142,971 123,600 (32,254 ) 1,994,373 1 In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. 2 Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the consolidated statements of earnings. 3 Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the consolidated statements of earnings. Other than the United States, only the People’s Republic of China, including Hong Kong, represented more than 10% 2019 2018 2017 Revenues 26 % 29 % 31 % Operating income 27 % 30 % 30 % Identifiable assets at year end 12 % 14 % 11 % Equity 9 % 8 % 8 % |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | NOTE 11 . QUARTERLY RESULTS (UNAUDITED) 1st 2nd 3rd 4th 2019 Revenues 1 $ 2,020,051 2,035,579 2,074,855 2,044,941 Operating income 1 187,601 192,201 206,550 180,340 Net earnings 140,111 153,530 160,627 137,748 Net earnings attributable to shareholders 139,699 153,149 160,221 137,326 Diluted earnings attributable to shareholders per share 0.80 0.88 0.92 0.79 Basic earnings attributable to shareholders per share 0.81 0.90 0.94 0.81 2018 Revenues 1 $ 1,854,262 1,957,559 2,090,947 2,235,597 Operating income 1 192,818 183,584 203,154 217,007 Net earnings 136,200 140,946 163,067 179,577 Net earnings attributable to shareholders 135,692 140,605 162,692 179,210 Diluted earnings attributable to shareholders per share 0.76 0.79 0.92 1.02 Basic earnings attributable to shareholders per share 0.77 0.80 0.94 1.04 The sum of quarterly per share data may not equal the per share total reported for the year. 1 The fourth quarter of 2019 was significantly impacted by declines in results in our China operations due to the slowing of trade to and from China, which impacted overall freight movement around the globe. The Company’s consolidated financial results are expected to be further impacted in 2020 due to the significance of its China operations and the effects of the recent outbreak of the Novel Coronavirus (COVID-19). See Note 12 for further detail. In the fourth quarter 2019 and 2018, the People's Republic of China, including Hong Kong, represented 25% and 31%, respectively, of the Company’s total revenues and 25% and 27%, respectively, of the Company’s total operating income. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 . SUBSEQUENT EVENTS The Company expects China trade, and hence its operations, to be affected by the recent outbreak of Novel Coronavirus (COVID-19) that began in China and was declared by the World Health Organization as a global health emergency. As precautionary measures, the government in China extended the Lunar New Year Holiday into February 2020 and has implemented travel restrictions and closures of certain central China ports and government offices. Additionally, factories have experienced extended closures and certain airlines are cancelling flights to and from China. As a result, certain of the Company’s central China offices have experienced closures and limited operations and shipments are being rerouted or delayed by customers and service providers, who are taking their own precautionary measures. Also, available airfreight capacity could be reduced affecting the ability to efficiently route customers’ freight. Any such conditions of operations, for an extended period of time would result in a reduction in shipments that could negatively affect the Company’s results of operations in 2020. In addition to traditional supply chain movements, the Company also believes this may have a further impact to global supply chains through potential shortages of raw materials, parts and supplies. For the years ended December 31, 2019, 2018 and 2017, the People’s Republic of China, including Hong Kong, represented 26%, 29% and 31%, respectively, of the Company’s total revenues and 27%, 30% and 30%, respectively, of the Company’s total operating income. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, high technology, industrial and manufacturing companies around the world. 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 tariffs and trade restrictions and accords. The Company cannot predict the outcome of ongoing proposals or negotiations, nor can the Company predict the effects 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 and inter-governmental disputes concerning international trade, 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 and on the shipping lanes in which it does business and the future impact that these events may have on international trade, oil prices and security costs. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The consolidated financial statements include the accounts of the Company and its subsidiaries stated in U.S. dollars, the Company’s reporting currency. In addition, the consolidated financial statements also include the accounts of operating entities where the Company maintains a parent-subsidiary relationship through unilateral control over assets and operations together with responsibility for payment of all liabilities, notwithstanding a lack of technical majority ownership of the subsidiary's common stock. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. Certain prior year amounts in the notes to the consolidated financial statements have been revised to conform to the 2019 presentation. |
Cash Equivalents | B. | Cash Equivalents All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents. |
Accounts Receivable | C. | 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 $11,143, $15,345 and $12,858 as of December 31, 2019, 2018 and 2017, respectively. Additions and write-offs have not been significant in any of these years. |
Long-Lived Assets, Depreciation and Amortization | D. | Long-Lived Assets, Depreciation and Amortization Property and equipment are recorded at cost and are depreciated or amortized on the straight-line method over the shorter of the assets’ estimated useful lives or lease terms. Useful lives for major categories of property and equipment are as follows: Buildings and land improvements 30 to 40 years Building improvements 3 to 10 years Furniture, fixtures, equipment and purchased software 3 to 10 years Expenditures for maintenance, repairs, and replacements of minor items are charged to earnings as incurred. Major upgrades and improvements that extend the life of the asset are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income for the period. For the years ended December 31, 2019 and 2018 , the Company performed the required goodwill annual impairment test during the fourth quarter and determined that no impairment had occurred. |
Revenues and Revenue Recognition | E. | Revenues and Revenue Recognition Effective January 1, 2018, the Company adopted Topic 606 Revenue from Contracts with Customers (Topic 606). The adoption of Topic 606 did not materially impact the Company's revenue recognition policy. The Company adopted the standard using the modified retrospective transition method applied to those contracts not completed as of January 1, 2018, resulting in a $22 million adjustment to the opening balance of retained earnings and the recording of deferred contract costs and contract liabilities of $135 million and $165 million, respectively. The Company satisfied nearly all performance obligations for the contract liabilities recorded upon adoption at January 1, 2018, and recognized the corresponding revenues and costs during the first quarter of 2018. In conjunction with the adoption of Topic 606, the Company also changed its presentation of certain warehouse and distribution revenues from a net to a gross basis, which increased customs brokerage and other services revenues and operating expenses by approximately $225 million in 2018 compared to 2017. Comparative prior year information has not been adjusted and continues to be reported under the Company's historical revenue recognition policies. The Company provides global logistics services, including air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking and other logistics solutions. As a non-asset based carrier, the Company does not own transportation assets. The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. The Company's three principal services are the revenue categories presented in the Consolidated Statements of Earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. The 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. The major portion of the Company's air and ocean freight revenues are generated by purchasing transportation services on a wholesale basis from direct (asset-based) carriers and then reselling those services to customers on a retail basis. The rate billed to our customers (the sell rate) is recognized as revenues and the rate we pay to the carrier (the buy rate) is recognized in operating expenses as the directly related cost of transportation and other expenses. Effective January 1, 2018, revenue is recognized upon transfer of control of promised services to customers, which occurs over time. The Company has determined that in general each shipment transaction or service order constitutes a separate contract with the customer. However, when the Company provides multiple services to a customer, different contracts may be present for different services. The Company combines the contracts, which form a single performance obligation, and accounts for the contracts as a single contract when certain criteria are met. The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. This method of measurement of progress depicts the pattern of the Company's actual performance under the contracts with the customer. There are no significant judgments involved in measuring the progress of the performance obligations. Amounts allocated to the services for each performance obligation are typically based on standalone selling prices. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. Typically, the transaction price for each of the Company's services are quoted as separate components; however, customers on occasion will request an all-inclusive rate for a set of services known in the industry as “door-to-door service.” This means that the customer is billed a single rate for all services from pickup at origin to delivery at destination. In these instances, the transaction price is allocated to each service on a relative selling price basis. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year . The Company generally has an unconditional right to consideration when the services are initiated or soon thereafter. The amount due from the customer is recorded as accounts receivable. The amounts related to services that are not yet completed at the reporting date are presented as contract liabilities, with corresponding direct costs to fulfill the performance obligation that will be satisfied in the future presented as deferred contract costs. The Company generally does not incur incremental costs to obtain the contract with the customer. The Company may incur costs to fulfill the contract with the customers, such as set-up costs. However, the amount incurred is insignificant to the Company’s consolidated financial statements. The Company evaluates whether amounts billed to customers should be reported as gross or net revenue. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it assumes risk of loss, when it has discretion in setting the prices for the services to the customers, and when the Company has the ability to direct the use of the services provided by the third party. The Company disaggregates its revenues by its three primary service categories in the consolidated financial statements: airfreight, ocean freight and ocean services and customs brokerage and other. Revenues by geographic location are presented within business segment information in Note 10. In 2019, the Company revised its presentation for revenue transfers between its geographic operating segments and services rendered at the destination, which moved certain revenues and directly related operating expenses for air and ocean transactions to destination services within customs brokerage and other services. These changes better align revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased revenues and directly related operating expenses in customs brokerage and other services but did not change operating income. The impact on reported consolidated and segment total revenues and expenses for these changes was immaterial and the prior year presentation has not been revised. |
Income Taxes | F. | Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, the tax effect of loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Earnings of the Company's foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States. Accordingly, prior to the implementation of the requirements of U.S. tax reform under the Tax Cuts and Jobs Act (2017 Tax Act) in December of 2017, U.S. Federal and State income taxes were provided for all undistributed earnings net of related foreign tax credits. See Note 7 for impacts associated with U.S. tax reform under the 2017 Tax Act. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company recognizes interest expense related to unrecognized tax benefits or underpayment of income taxes in interest expense and recognizes penalties in operating expenses. The 2017 Tax Act included provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries and for Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies. The Company treats BEAT and GILTI as discrete adjustments as components of current income tax expense. In February 2018, the Financial Accounting Standards Board (FASB) issued amended guidance for reporting comprehensive income to reflect changes resulting from the 2017 Tax Act. The amendment, which had an effective date of January 1, 2019, provided the option to reclassify stranded tax effects resulting from the 2017 Tax Act within accumulated other comprehensive income (AOCI) to retained earnings. The Company elected to not reclassify stranded income tax effects from AOCI to retained earnings, including those related to implementation of the 2017 Tax Act. Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. |
Net Earnings Attributable to Shareholders per Common Share | G | Net Earnings Attributable to Shareholders per Common Share Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential common shares represent outstanding stock options, stock purchase rights and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan and unvested RSUs. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. |
Stock Plans | H. | Stock Plans The Company maintains several equity incentive plans under which the Company has granted stock options, director restricted stock, restricted stock units (RSUs), performance stock units (PSUs) and employee stock purchase rights to employees or directors. The Company recognizes stock compensation expense based on the fair value of awards at the grant date. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the service periods as a component of salaries and related costs. Expense for PSU awards is recognized over the service period when it is probable the performance goal will be achieved. RSUs and PSUs awarded to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately, as there is no substantive service period associated with those awards. |
Foreign Currency | I. | Foreign Currency Foreign currency amounts attributable to foreign operations have been translated into U.S. dollars using year-end exchange rates for assets and liabilities, historical rates for equity, and weighted average rates for revenues and expenses. Translation adjustments resulting from this process are recorded as components of other comprehensive income until complete or substantially complete liquidation by the Company of its investment in a foreign entity. Currency fluctuations are a normal operating factor in the conduct of the Company’s business and foreign exchange transaction gains and losses are included in revenues and operating expenses. Also, the Company is exposed to foreign currency exchange fluctuations on monetary assets and liabilities denominated in currencies that are not the local functional currency. Foreign exchange gains and losses on such balances are recognized in net earnings within customs brokerage and other services costs. Net foreign currency losses in 2019, 2018 and 2017 were $9,251, $1,853 and $13,315, respectively. The Company follows a policy of accelerating international currency settlements to manage its foreign exchange exposure. Accordingly, the Company enters into foreign currency hedging transactions only in limited locations where there are regulatory or commercial limitations on the Company’s ability to move money freely. Such hedging activity during 2019, 2018 and 2017 was insignificant. The Company had no foreign currency derivatives outstanding at December 31, 2019 and 2018. |
Comprehensive Income | J. | Comprehensive Income Comprehensive income consists of net earnings and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net earnings. For the Company, these consist of foreign currency translation gains and losses, net of related income tax effects and comprehensive income or loss attributable to the noncontrolling interests. Upon the complete or substantially complete liquidation of the Company's investment in a foreign entity, cumulative translation adjustments are recorded as reclassification adjustments in other comprehensive income and recognized in net earnings. Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, as of December 31, 2019 and 2018. |
Segment Reporting | K. | Segment Reporting The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenue, salaries and other operating expenses, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. |
Use of Estimates | L. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of liabilities for the portion of the related exposure that the Company has self-insured, accrual of various tax liabilities including estimates associated with the 2017 Tax Act, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could be materially different from the estimated provisions and accruals recorded. |
Recent Accounting Pronouncements | M. | Recent Accounting Pronouncements Leases Effective January 1, 2019, the Company adopted new lease accounting guidance using a modified retrospective approach and recognizing a right-of-use (ROU) asset and lease liability on the balance sheet. On January 1, 2019, ROU assets and lease liabilities were recorded for all existing leases exceeding one-year terms and were measured at the present value of lease payments over the remaining lease term. The adoption of this accounting standard resulted in recording ROU assets and lease liabilities for operating leases of $343 million and $340 million, respectively, as of January 1, 2019. The adoption of this standard had no impact on retained earnings in the consolidated balance sheets. In recording the ROU asset and lease liability, the Company elected to apply the following practical expedients: • Package of practical expedients not to reassess: ◦ Whether a contract is or contains a lease, ◦ Historical lease classification and ◦ Initial direct costs. • Use of hindsight when determining the lease term. Additionally, the Company has elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and has chosen not to separate nonlease components from lease components and instead to account for each as a single lease component. The Company determines if an arrangement is a lease at inception. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As the Company's leases generally do not have an implicit rate, the Company uses an estimated incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of the leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from ROU assets and lease liabilities, to the extent not considered fixed, and instead expenses variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses in the consolidated statements of earnings. Credit Losses on Financial Instruments In June 2016, the FASB issued an Accounting Standards Update (ASU), which amends existing guidance for the accounting of credit losses on financial instruments. Under the ASU, the valuation allowance for credit losses are expected to be incurred over the financial asset’s contractual term. The Company reviewed the new credit loss standard and determined that it applied to Company's accounts receivable, which are of short duration and for which the Company has not historically experienced significant credit losses. The Company will adopt this standard effective January 1, 2020 with a cumulative effect of adoption recorded as an adjustment to retained earnings. The Company evaluated the impact of the new prescribed credit loss model and compared it to its current methodology, and determined that it does not have a material effect on the Company’s consolidated financial statements and related disclosures. Simplifying the Accounting for Income T axes In December 2019, the FASB issued an ASU, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application among reporting entities. This standard will become effective for the Company on January 1, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives for Property and Equipment | Useful lives for major categories of property and equipment are as follows: Buildings and land improvements 30 to 40 years Building improvements 3 to 10 years Furniture, fixtures, equipment and purchased software 3 to 10 years |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair value of Cash and Cash Equivalents by Balance Sheet Grouping | Cash and cash equivalents consist of the following: December 31, 2019 December 31, 2018 Cost Fair Value Cost Fair Value Cash and cash equivalents: Cash and overnight deposits $ 417,456 $ 417,456 $ 427,307 $ 427,307 Corporate commercial paper 775,504 776,356 467,300 467,760 Time deposits 37,531 37,531 29,128 29,128 Total cash and cash equivalents $ 1,230,491 $ 1,231,343 $ 923,735 $ 924,195 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | The components of property and equipment are as follows: 2019 2018 Land $ 145,172 $ 144,521 Buildings and leasehold improvements 478,361 473,663 Furniture, fixtures, equipment and purchased software 353,923 330,316 Construction in progress 794 2,582 Property and equipment, at cost 978,250 951,082 Less accumulated depreciation and amortization 478,906 446,977 Property and equipment, net $ 499,344 $ 504,105 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Lease, Cost | Lease cost for the year ended December 31, 2019 is recorded under rent and occupancy expenses in the consolidated statements of earnings and is comprised of the following: 2019 Operating lease cost $ 81,912 Variable lease cost 25,843 Total lease cost $ 107,755 |
Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2019 are as follows: 2020 $ 81,713 2021 72,881 2022 66,099 2023 56,570 2024 44,302 Thereafter 145,661 Total minimum lease payments 467,226 Less imputed interest 75,512 Lease liability $ 391,714 |
Schedule of Weighted-average Remaining Lease Term and Weighted-average Discount Rate | The weighted-average remaining lease term and weighted-average discount rate as of December 31, 2019 are as follows: Weighted-average remaining lease term (in years) 7.37 Weighted-average discount rate 4.78 % |
Other Information Related to Leases | Other information related to the Company's operating leases are as follows: 2019 Right-of-use assets obtained in exchange for new operating lease liabilities $ 103,788 Cash paid for amounts included in the measurement of lease liabilities $ 79,040 |
Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2018, the last balance sheet presented before the adoption of the new accounting standard Topic 842 Leases, future minimum annual lease payments under all noncancelable operating leases were as follows: 2019 $ 75,227 2020 62,974 2021 47,552 2022 38,352 2023 26,580 Thereafter 67,140 $ 317,825 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Schedule of Cumulative Repurchasing Activity by Plan | The following table summarizes by plan the Company’s repurchasing activity: Cumulative shares repurchased Average price per share Non-Discretionary Plan (1994 through 2019) 40,000 $ 35.29 Discretionary Plan (2001 through 2019) 73,991 $ 46.67 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following table summarizes information about RSUs: Number of shares Weighted average grant date fair value Outstanding at December 31, 2018 834 $ 62.51 RSUs granted 475 $ 75.73 RSUs vested (337 ) $ 60.92 RSUs forfeited (26 ) $ 66.03 Outstanding at December 31, 2019 946 $ 69.54 |
Schedule of Stock Option Activity | The following table summarizes information about stock options: Number of shares Weighted average exercise price per share Weighted average remaining contractual life Aggregate intrinsic value Outstanding at December 31, 2018 9,353 $ 44.60 Options granted — $ — Options exercised (2,518 ) $ 43.85 Options forfeited (62 ) $ 46.89 Options canceled (10 ) $ 45.98 Outstanding at December 31, 2019 6,763 $ 44.85 4.33 $ 224,309 Exercisable at December 31, 2019 6,159 $ 44.62 4.22 $ 205,731 |
Employee Stock Purchase 2002 Plan | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shared-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | The fair value of employee stock purchase rights granted under the 2002 Plan is estimated on the date of grant using the Black-Scholes Model with the following assumptions: For the years ended December 31, 2019 2018 2017 Dividend yield 1.40 % 1.30 % 1.50 % Volatility 23 % 22 % 14 % Risk-free interest rates 1.96 % 2.39 % 1.22 % Expected life (years) 1 1 1 Weighted average fair value $ 17.03 $ 17.49 $ 11.69 |
Basic and Diluted Earnings pe_2
Basic and Diluted Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders. Net earnings attributable to shareholders Weighted average shares Earnings per share 2019 Basic earnings attributable to shareholders $ 590,395 170,899 $ 3.45 Effect of dilutive potential common shares — 3,310 — Diluted earnings attributable to shareholders $ 590,395 174,209 $ 3.39 2018 Basic earnings attributable to shareholders $ 618,199 174,133 $ 3.55 Effect of dilutive potential common shares — 3,700 — Diluted earnings attributable to shareholders $ 618,199 177,833 $ 3.48 2017 Basic earnings attributable to shareholders $ 489,345 179,247 $ 2.73 Effect of dilutive potential common shares — 2,419 — Diluted earnings attributable to shareholders $ 489,345 181,666 $ 2.69 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | Income tax expense (benefit) includes the following components: Federal State Foreign Total 2019 Current $ 35,324 $ 13,711 $ 150,261 $ 199,296 Deferred 3,149 1,333 — 4,482 $ 38,473 $ 15,044 $ 150,261 $ 203,778 2018 Current $ 45,996 $ 13,262 $ 151,312 $ 210,570 Deferred (9,759 ) (2,272 ) — (12,031 ) $ 36,237 $ 10,990 $ 151,312 $ 198,539 2017 Current $ 101,821 $ 20,490 $ 149,596 $ 271,907 Deferred (42,474 ) (1,221 ) — (43,695 ) $ 59,347 $ 19,269 $ 149,596 $ 228,212 |
Schedule of U.S. and Foreign Components of Income Before Income Tax Expense/(Benefit) | The components of earnings before income taxes are as follows: 2019 2018 2017 United States $ 327,878 $ 313,178 $ 276,714 Foreign 467,916 505,151 441,881 $ 795,794 $ 818,329 $ 718,595 |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense differs from amounts computed by applying the United States Federal income tax rate of 21% in both 2019 and 2018 and 35% in 2017 when compared to earnings before income taxes as a result of the following: 2019 2018 2017 Computed “expected” tax expense $ 167,117 $ 171,849 $ 251,508 Increase (decrease) in income taxes resulting from: Effect of foreign taxes 26,599 16,445 (25,374 ) State income taxes, net of Federal income tax benefit 11,885 8,682 12,525 Nondeductible executive compensation 2,838 3,126 — Stock compensation expense, net (2,689 ) (3,860 ) 63 Enactment of 2017 Tax Act — — (13,894 ) Other, net (1,972 ) 2,297 3,384 $ 203,778 $ 198,539 $ 228,212 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences and tax credits that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows: Years ended December 31, 2019 2018 Deferred Tax Assets: Deductible stock compensation expense, net $ 18,569 $ 19,011 Operating lease liabilities 52,966 — Accrued third party obligations, deductible for taxes upon economic performance 5,333 7,726 Excess of financial statement over tax depreciation 5,802 5,134 Foreign currency translation adjustments 9,248 37,299 Retained liability for cargo claims 1,006 1,025 Provision for doubtful accounts receivable 916 1,443 Total gross deferred tax assets 93,840 71,638 Deferred Tax Liabilities: Unremitted foreign earnings, net of related foreign tax credits 31,615 31,173 Operating lease assets 52,351 — Deferred contract costs 1,840 — Total gross deferred tax liabilities 85,806 31,173 Net deferred tax assets $ 8,034 $ 40,465 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Financial information regarding 2019, 2018 and 2017 operations by the Company’s designated geographic areas is as follows: UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMINATIONS CONSOLIDATED 2019 Revenues 1 $ 2,712,067 354,405 150,202 2,494,556 743,406 1,280,669 443,487 (3,366 ) 8,175,426 Directly related cost of transportation and other expenses 2 $ 1,528,815 212,369 87,297 1,970,662 544,873 884,968 311,997 (2,023 ) 5,538,958 Salaries and other operating expenses 3 $ 859,946 101,654 55,512 271,594 127,478 342,073 112,844 (1,325 ) 1,869,776 Operating income $ 323,306 40,382 7,393 252,300 71,055 53,628 18,646 (18 ) 766,692 Identifiable assets at period end $ 1,978,307 153,813 72,677 538,526 178,336 551,576 219,953 (1,304 ) 3,691,884 Capital expenditures $ 28,666 2,353 1,556 1,767 1,558 9,231 1,891 — 47,022 Depreciation and amortization $ 31,049 1,881 1,489 5,263 1,912 7,398 1,958 — 50,950 Equity $ 1,521,059 65,100 29,148 247,725 94,727 159,308 114,726 (34,574 ) 2,197,219 2018 Revenues 1 $ 2,479,812 355,802 156,854 2,886,322 777,863 1,330,365 464,071 (312,724 ) 8,138,365 Directly related cost of transportation and other expenses 2 $ 1,352,924 216,753 94,041 2,315,826 591,925 926,949 330,209 (310,635 ) 5,517,992 Salaries and other operating expenses 3 $ 816,817 94,950 53,970 289,015 125,056 337,970 108,131 (2,099 ) 1,823,810 Operating income $ 310,071 44,099 8,843 281,481 60,882 65,446 25,731 10 796,563 Identifiable assets at period end $ 1,689,950 161,604 53,542 533,071 152,646 513,744 206,367 3,635 3,314,559 Capital expenditures $ 21,732 4,259 1,042 3,057 2,182 10,815 4,387 — 47,474 Depreciation and amortization $ 33,511 1,847 1,508 5,309 2,257 7,727 1,860 — 54,019 Equity $ 1,339,673 72,941 26,007 200,371 100,706 157,003 123,228 (32,209 ) 1,987,720 2017 Revenues 1 $ 1,962,558 268,186 111,862 2,598,376 684,877 1,115,324 426,069 (246,304 ) 6,920,948 Directly related cost of transportation and other expenses 2 $ 953,717 149,115 53,663 2,089,141 521,427 779,622 304,802 (249,728 ) 4,601,759 Salaries and other operating expenses 3 $ 731,020 80,940 48,235 260,813 110,393 287,211 96,902 3,415 1,618,929 Operating income $ 277,821 38,131 9,964 248,422 53,057 48,491 24,365 9 700,260 Identifiable assets at period end $ 1,595,140 151,181 55,431 458,152 137,279 501,711 215,495 2,619 3,117,008 Capital expenditures $ 28,212 1,563 4,612 3,756 1,688 53,954 1,231 — 95,016 Depreciation and amortization $ 32,017 1,546 1,277 5,326 2,215 5,068 1,861 — 49,310 Equity $ 1,337,568 60,705 26,546 240,721 94,516 142,971 123,600 (32,254 ) 1,994,373 1 In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. 2 Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the consolidated statements of earnings. 3 Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the consolidated statements of earnings. |
Schedule of Revenues Operating Income and Long-lived Assets Attributed to Material Foreign Countries | Other than the United States, only the People’s Republic of China, including Hong Kong, represented more than 10% 2019 2018 2017 Revenues 26 % 29 % 31 % Operating income 27 % 30 % 30 % Identifiable assets at year end 12 % 14 % 11 % Equity 9 % 8 % 8 % |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information Table | 1st 2nd 3rd 4th 2019 Revenues 1 $ 2,020,051 2,035,579 2,074,855 2,044,941 Operating income 1 187,601 192,201 206,550 180,340 Net earnings 140,111 153,530 160,627 137,748 Net earnings attributable to shareholders 139,699 153,149 160,221 137,326 Diluted earnings attributable to shareholders per share 0.80 0.88 0.92 0.79 Basic earnings attributable to shareholders per share 0.81 0.90 0.94 0.81 2018 Revenues 1 $ 1,854,262 1,957,559 2,090,947 2,235,597 Operating income 1 192,818 183,584 203,154 217,007 Net earnings 136,200 140,946 163,067 179,577 Net earnings attributable to shareholders 135,692 140,605 162,692 179,210 Diluted earnings attributable to shareholders per share 0.76 0.79 0.92 1.02 Basic earnings attributable to shareholders per share 0.77 0.80 0.94 1.04 The sum of quarterly per share data may not equal the per share total reported for the year. 1 The fourth quarter of 2019 was significantly impacted by declines in results in our China operations due to the slowing of trade to and from China, which impacted overall freight movement around the globe. The Company’s consolidated financial results are expected to be further impacted in 2020 due to the significance of its China operations and the effects of the recent outbreak of the Novel Coronavirus (COVID-19). See Note 12 for further detail. In the fourth quarter 2019 and 2018, the People's Republic of China, including Hong Kong, represented 25% and 31%, respectively, of the Company’s total revenues and 25% and 27%, respectively, of the Company’s total operating income. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | [1] | Jun. 30, 2019 | [1] | Mar. 31, 2019 | [1] | Dec. 31, 2018 | Sep. 30, 2018 | [1] | Jun. 30, 2018 | [1] | Mar. 31, 2018 | [1] | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||
Accounts receivable, allowance for doubtful accounts | $ 11,143 | $ 15,345 | $ 11,143 | $ 15,345 | $ 12,858 | |||||||||||||||||||
Cumulative adjustment for adoption of new accounting pronouncement | $ 22,000 | |||||||||||||||||||||||
Deferred contract costs | 131,783 | 159,510 | 131,783 | 159,510 | 135,000 | |||||||||||||||||||
Contract liabilities | 154,183 | 190,343 | 154,183 | 190,343 | $ 165,000 | |||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,044,941 | [1] | $ 2,074,855 | $ 2,035,579 | $ 2,020,051 | 2,235,597 | [1] | $ 2,090,947 | $ 1,957,559 | $ 1,854,262 | 8,175,426 | [2] | 8,138,365 | [2] | 6,920,948 | [2] | ||||||||
Costs and Expenses | 7,408,734 | 7,341,802 | 6,220,688 | |||||||||||||||||||||
Net foreign currency gains (losses) | (9,251) | (1,853) | (13,315) | |||||||||||||||||||||
Operating lease, right-of-use asset | 390,035 | $ 0 | 390,035 | 0 | ||||||||||||||||||||
Operating lease, liability | $ 391,714 | 391,714 | ||||||||||||||||||||||
Accounting Standards Update 2016-02 [Member] | ||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||
Operating lease, right-of-use asset | $ 343,000 | |||||||||||||||||||||||
Operating lease, liability | $ 340,000 | |||||||||||||||||||||||
Customs brokerage and other services | ||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 3,027,990 | 2,614,679 | $ 1,936,871 | |||||||||||||||||||||
Prospective Change in Presentation Gross vs Net | Customs brokerage and other services | ||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 225,000 | |||||||||||||||||||||||
Costs and Expenses | $ 225,000 | |||||||||||||||||||||||
[1] | The fourth quarter of 2019 was significantly impacted by declines in results in our China operations due to the slowing of trade to and from China, which impacted overall freight movement around the globe. The Company’s consolidated financial results are expected to be further impacted in 2020 due to the significance of its China operations and the effects of the recent outbreak of the Novel Coronavirus (COVID-19). See Note 12 for further detail. In the fourth quarter 2019 and 2018, the People's Republic of China, including Hong Kong, represented 25% and 31%, respectively, of the Company’s total revenues and 25% and 27%, respectively, of the Company’s total operating income. | |||||||||||||||||||||||
[2] | In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Useful Lives for Major Categories of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings and Land Improvements | Minimum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 30 years |
Buildings and Land Improvements | Maximum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 40 years |
Building Improvements | Minimum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Building Improvements | Maximum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Furniture, Fixtures, Equipment and Purchased Software | Minimum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture, Fixtures, Equipment and Purchased Software | Maximum | |
Property Plant And Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | $ 1,230,491 | $ 923,735 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 1,231,343 | 924,195 |
Cash and Overnight Deposits | Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 417,456 | 427,307 |
Cash and Overnight Deposits | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 417,456 | 427,307 |
Corporate Commercial Paper | Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 775,504 | 467,300 |
Corporate Commercial Paper | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 776,356 | 467,760 |
Time Deposits | Cost | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | 37,531 | 29,128 |
Time Deposits | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total cash and cash equivalents | $ 37,531 | $ 29,128 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Abstract] | ||
Land | $ 145,172 | $ 144,521 |
Buildings and leasehold improvements | 478,361 | 473,663 |
Furniture, fixtures, equipment and purchased software | 353,923 | 330,316 |
Construction in progress | 794 | 2,582 |
Property and equipment, at cost | 978,250 | 951,082 |
Less accumulated depreciation and amortization | 478,906 | 446,977 |
Property and equipment, net | $ 499,344 | $ 504,105 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - Miami, Florida - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 01, 2017 | |
Long Lived Assets Held For Sale [Line Items] | ||
Real Estate Held-for-sale | $ 80 | |
Gain on Disposition of Assets | $ 4 |
Leases - Lease Cost (Detail)
Leases - Lease Cost (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lessee Disclosure [Abstract] | |
Operating lease cost | $ 81,912 |
Variable lease cost | 25,843 |
Total lease cost | $ 107,755 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Lease Liabilities, Payments, Due, Rolling Maturity [Abstract] | |
2020 | $ 81,713 |
2021 | 72,881 |
2022 | 66,099 |
2023 | 56,570 |
2024 | 44,302 |
Thereafter | 145,661 |
Total minimum lease payments | 467,226 |
Less imputed interest | 75,512 |
Operating lease, liability | $ 391,714 |
Leases - Weighted-Average Remai
Leases - Weighted-Average Remaining Lease Term and Weighted-Average Discount (Detail) | Dec. 31, 2019 |
Weighted-average remaining lease term and weighted-average discount rate [Abstract] | |
Weighted-average remaining lease term (in years) | 7 years 4 months 13 days |
Weighted-average discount rate | 4.78% |
Leases - Other Information Rela
Leases - Other Information Related to Operating Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Supplemental Cash Flow Information Related to Leases [Abstract] | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 103,788 |
Cash paid for amounts included in the measurement of lease liabilities | $ 79,040 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payment (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 75,227 |
2020 | 62,974 |
2021 | 47,552 |
2022 | 38,352 |
2023 | 26,580 |
Thereafter | 67,140 |
Operating Leases, Future Minimum Payments Due | $ 317,825 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee Disclosure [Abstract] | ||
Rent expense | $ 89,377 | $ 68,920 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | May 02, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | Dec. 31, 2019 | May 07, 2014 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Issuance of shares under stock purchase plan (in shares) | 12,147,000 | |||||||
Total intrinsic value of options exercised | $ 79,000 | $ 92,000 | $ 55,000 | |||||
Total unrecognized share-based compensation cost | $ 50,000 | $ 50,000 | ||||||
Unrecognized share-based compensation cost, weighted average period | 1 year 8 months 12 days | |||||||
2017 Omnibus Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Shares authorized for grant | 2,500,000 | |||||||
Shares available for granting of awards | 744,000 | 744,000 | ||||||
Weighted average fair value of award granted during the period | $ 75.73 | $ 69.58 | $ 54.11 | |||||
Restricted Stock Units (RSUs) | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Number of common stock issued per unit based award upon vesting | 100.00% | |||||||
Shares Granted | 475,000 | |||||||
Weighted average grant date fair value of shares unvested | $ 69.54 | $ 62.51 | $ 69.54 | |||||
Weighted average fair value of award granted during the period | $ 75.73 | |||||||
Performance Shares | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of common stock issued per unit based award upon vesting | 100.00% | |||||||
Shares Granted | 96,000 | 18,000 | ||||||
Maximum Adjustment Factor | 200.00% | |||||||
Minimum Adjustment Factor | 50.00% | |||||||
Shares issued if minimum performance thresholds are not achieved | 0 | |||||||
Number of shares, unvested | 137,000 | 41,000 | 137,000 | |||||
Weighted average grant date fair value of shares unvested | $ 71.28 | $ 60.83 | $ 71.28 | |||||
Employee Stock Option Plan | Upper End | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | 5 years | ||||||
Maximum contractual term | 10 years | |||||||
Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Shares authorized for grant | 15,305,000 | 15,305,000 | ||||||
Purchase price percentage of fair market value | 85.00% | |||||||
Amount withheld employee stock purchase plan | $ 20,466 | $ 20,466 | ||||||
Directors' Restricted Stock Plan 2014 | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Shares authorized for grant | 250,000 | |||||||
Shares Granted | 24,000 | |||||||
Number of shares, unvested | 0 | 0 | ||||||
Shares available for granting of awards | 0 | 0 | ||||||
Fair value of annual grant per participant of restricted stock awards | $ 200 | |||||||
Weighted average fair value of award granted during the period | $ 73.85 | |||||||
Discretionary Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Expected common stock shares issued and outstanding | 160,000,000 | 160,000,000 | ||||||
Non-Discretionary Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares authorized for repurchase | 40,000,000 | 40,000,000 | ||||||
Remaining number of shares authorized for repurchase | 0 | 0 |
Shareholders' Equity - Company'
Shareholders' Equity - Company's Repurchasing Activity by Repurchase Plan (Detail) - $ / shares shares in Thousands | 228 Months Ended | 312 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Non-Discretionary Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Cumulative shares repurchased | 40,000 | |
Average price per share | $ 35.29 | |
Discretionary Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Cumulative shares repurchased | 73,991 | |
Average price per share | $ 46.67 |
Shareholder's Equity - Summary
Shareholder's Equity - Summary of Information about RSUs (Detail) - Restricted Stock Units (RSUs) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at December 31, 2018 | shares | 834 |
RSUs granted | shares | 475 |
RSUs vested | shares | (337) |
RSUs forfeited | shares | (26) |
Outstanding at December 31, 2019 | shares | 946 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding at December 31, 2018 | $ / shares | $ 62.51 |
RSUs granted | $ / shares | 75.73 |
RSUs vested | $ / shares | 60.92 |
RSUs forfeited | $ / shares | 66.03 |
Outstanding at December 31, 2019 | $ / shares | $ 69.54 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Information about Stock Options (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of shares - Stock Option | |
Outstanding Beginning Balance | shares | 9,353 |
Options granted | shares | 0 |
Options exercised | shares | (2,518) |
Options forfeited | shares | (62) |
Options canceled | shares | (10) |
Outstanding Ending Balance | shares | 6,763 |
Exercisable at December 31, 2019 | shares | 6,159 |
Weighted average exercise price per share - Stock Option | |
Outstanding Beginning Balance | $ / shares | $ 44.60 |
Options granted | $ / shares | 0 |
Options exercised | $ / shares | 43.85 |
Options forfeited | $ / shares | 46.89 |
Options canceled | $ / shares | 45.98 |
Outstanding Ending Balance | $ / shares | 44.85 |
Exercisable at December 31, 2019 | $ / shares | $ 44.62 |
Weighted average remaining contractual life - Stock Option | |
Outstanding at December 31, 2019 | 4 years 3 months 29 days |
Exercisable at December 31, 2019 | 4 years 2 months 19 days |
Aggregate intrinsic value - Stock Option | |
Outstanding at December 31, 2019 | $ | $ 224,309 |
Exercisable at December 31, 2019 | $ | $ 205,731 |
Shareholders' Equity - Assumpti
Shareholders' Equity - Assumptions to Estimate Fair Value of Employee Stock Purchase Rights on Date of Grant Using Black Scholes Option Pricing Model (Detail) - Employee Stock Purchase 2002 Plan - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Dividend yield | 1.40% | 1.30% | 1.50% |
Volatility | 23.00% | 22.00% | 14.00% |
Risk-free interest rates | 1.96% | 2.39% | 1.22% |
Expected life (years) | 1 year | 1 year | 1 year |
Weighted average fair value | $ 17.03 | $ 17.49 | $ 11.69 |
Basic and Diluted Earnings pe_3
Basic and Diluted Earnings per Share - Numerator and Denominator of the Basic and Diluted Per Share Computations for Earnings Attributable to Shareholders Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Earnings Attributable to Shareholders | |||||||||||
Basic earnings attributable to shareholders | $ 590,395 | $ 618,199 | $ 489,345 | ||||||||
Diluted earnings attributable to shareholders | $ 590,395 | $ 618,199 | $ 489,345 | ||||||||
Weighted Average Shares | |||||||||||
Weighted average basic shares outstanding | 170,899 | 174,133 | 179,247 | ||||||||
Effect of dilutive potential common shares | 3,310 | 3,700 | 2,419 | ||||||||
Weighted average diluted shares outstanding | 174,209 | 177,833 | 181,666 | ||||||||
Earnings Per Share [Abstract] | |||||||||||
Basic earnings attributable to shareholders per share | $ 0.81 | $ 0.94 | $ 0.90 | $ 0.81 | $ 1.04 | $ 0.94 | $ 0.80 | $ 0.77 | $ 3.45 | $ 3.55 | $ 2.73 |
Diluted earnings attributable to shareholders per share | $ 0.79 | $ 0.92 | $ 0.88 | $ 0.80 | $ 1.02 | $ 0.92 | $ 0.79 | $ 0.76 | $ 3.39 | $ 3.48 | $ 2.69 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||||
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21.00% | 21.00% | 35.00% | |
Net income tax benefit | $ 0 | $ 0 | $ (13,894) | |
Deferred income tax benefit from change in tax rate | $ 116,200 | |||
Income tax benefit from lower foreign tax rates | 26,599 | 16,445 | (25,374) | |
Effective Income Tax Rate Reconciliation, Tax Credit, Other, Amount | 15,700 | 20,300 | ||
Income tax refunds received | 4,000 | 4,000 | ||
Tax Cuts and Jobs Act - Provisional | ||||
Income Taxes [Line Items] | ||||
Net income tax benefit | (13,900) | |||
Deferred tax asset reversal, foreign income tax credits | 70,200 | |||
Current income tax expense, mandatory tax on undistributed earnings | $ 32,100 | |||
Income tax benefit from lower foreign tax rates | $ 25,400 | |||
Tax Cut and Jobs Act Adjustment | ||||
Income Taxes [Line Items] | ||||
Deferred tax asset reversal, foreign income tax credits | 3,600 | |||
Current income tax expense, mandatory tax on undistributed earnings | 1,000 | |||
Foreign Derived Intangible Income (FDII) | ||||
Income Taxes [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | $ 9,000 | $ 4,800 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | |||
Current | $ 35,324 | $ 45,996 | $ 101,821 |
Deferred | 3,149 | (9,759) | (42,474) |
Federal income tax expense, total | 38,473 | 36,237 | 59,347 |
State | |||
Current | 13,711 | 13,262 | 20,490 |
Deferred | 1,333 | (2,272) | (1,221) |
State and local income tax expense, total | 15,044 | 10,990 | 19,269 |
Foreign | |||
Current | 150,261 | 151,312 | 149,596 |
Deferred | 0 | 0 | 0 |
Foreign income tax expense, total | 150,261 | 151,312 | 149,596 |
Total | |||
Current | 199,296 | 210,570 | 271,907 |
Deferred | 4,482 | (12,031) | (43,695) |
Income tax expense | $ 203,778 | $ 198,539 | $ 228,212 |
Income Taxes - Components of Ea
Income Taxes - Components of Earnings Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments [Abstract] | |||
United States | $ 327,878 | $ 313,178 | $ 276,714 |
Foreign | 467,916 | 505,151 | 441,881 |
Earnings before income taxes | $ 795,794 | $ 818,329 | $ 718,595 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense Computed by Applying the United States Federal Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | |||
Computed “expected” tax expense | $ 167,117 | $ 171,849 | $ 251,508 |
Increase (decrease) in income taxes resulting from: | |||
Effect of foreign taxes | 26,599 | 16,445 | (25,374) |
State income taxes, net of Federal income tax benefit | 11,885 | 8,682 | 12,525 |
Nondeductible executive compensation | 2,838 | 3,126 | 0 |
Stock compensation expense, net | (2,689) | (3,860) | 63 |
Enactment of 2017 Tax Act | 0 | 0 | (13,894) |
Other, net | (1,972) | 2,297 | 3,384 |
Income tax expense | $ 203,778 | $ 198,539 | $ 228,212 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Taxes (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets: | ||
Deductible stock compensation expense, net | $ 18,569 | $ 19,011 |
Operating lease liabilities | 52,966 | |
Accrued third party obligations, deductible for taxes upon economic performance | 5,333 | 7,726 |
Excess of financial statement over tax depreciation | 5,802 | 5,134 |
Foreign currency translation adjustments | 9,248 | 37,299 |
Retained liability for cargo claims | 1,006 | 1,025 |
Provision for doubtful accounts receivable | 916 | 1,443 |
Total gross deferred tax assets | 93,840 | 71,638 |
Deferred Tax Liabilities: | ||
Unremitted foreign earnings, net of related foreign tax credits | 31,615 | 31,173 |
Operating lease assets | 52,351 | |
Deferred contract costs | 1,840 | |
Total gross deferred tax liabilities | 85,806 | 31,173 |
Net deferred tax assets | $ 8,034 | $ 40,465 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Committed purchase obligations | $ 96,380 | ||
Contribution by employer for employee saving plan | 19,624 | $ 19,600 | $ 18,210 |
Standby Letters of Credit | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Contingently liable for letters of credit, amount | $ 69,489 |
Business Segment Information -
Business Segment Information - Financial Information Regarding Company's Operations by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | [1] | Jun. 30, 2019 | [1] | Mar. 31, 2019 | [1] | Dec. 31, 2018 | Sep. 30, 2018 | [1] | Jun. 30, 2018 | [1] | Mar. 31, 2018 | [1] | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,044,941 | [1] | $ 2,074,855 | $ 2,035,579 | $ 2,020,051 | $ 2,235,597 | [1] | $ 2,090,947 | $ 1,957,559 | $ 1,854,262 | $ 8,175,426 | [2] | $ 8,138,365 | [2] | $ 6,920,948 | [2] | ||||||||
Directly related cost of transportation and other expenses | [3] | 5,538,958 | 5,517,992 | 4,601,759 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 1,869,776 | 1,823,810 | 1,618,929 | ||||||||||||||||||||
Operating income | 180,340 | [1] | $ 206,550 | $ 192,201 | $ 187,601 | 217,007 | [1] | $ 203,154 | $ 183,584 | $ 192,818 | 766,692 | 796,563 | 700,260 | |||||||||||
Identifiable assets at period end | 3,691,884 | 3,314,559 | 3,691,884 | 3,314,559 | 3,117,008 | |||||||||||||||||||
Capital expenditures | 47,022 | 47,474 | 95,016 | |||||||||||||||||||||
Depreciation and amortization | 50,950 | 54,019 | 49,310 | |||||||||||||||||||||
Equity | 2,197,219 | 1,987,720 | 2,197,219 | 1,987,720 | 1,994,373 | $ 1,847,213 | ||||||||||||||||||
Operating Segments | United States Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 2,712,067 | 2,479,812 | 1,962,558 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 1,528,815 | 1,352,924 | 953,717 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 859,946 | 816,817 | 731,020 | ||||||||||||||||||||
Operating income | 323,306 | 310,071 | 277,821 | |||||||||||||||||||||
Identifiable assets at period end | 1,978,307 | 1,689,950 | 1,978,307 | 1,689,950 | 1,595,140 | |||||||||||||||||||
Capital expenditures | 28,666 | 21,732 | 28,212 | |||||||||||||||||||||
Depreciation and amortization | 31,049 | 33,511 | 32,017 | |||||||||||||||||||||
Equity | 1,521,059 | 1,339,673 | 1,521,059 | 1,339,673 | 1,337,568 | |||||||||||||||||||
Operating Segments | Other North America Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 354,405 | 355,802 | 268,186 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 212,369 | 216,753 | 149,115 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 101,654 | 94,950 | 80,940 | ||||||||||||||||||||
Operating income | 40,382 | 44,099 | 38,131 | |||||||||||||||||||||
Identifiable assets at period end | 153,813 | 161,604 | 153,813 | 161,604 | 151,181 | |||||||||||||||||||
Capital expenditures | 2,353 | 4,259 | 1,563 | |||||||||||||||||||||
Depreciation and amortization | 1,881 | 1,847 | 1,546 | |||||||||||||||||||||
Equity | 65,100 | 72,941 | 65,100 | 72,941 | 60,705 | |||||||||||||||||||
Operating Segments | Latin America Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 150,202 | 156,854 | 111,862 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 87,297 | 94,041 | 53,663 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 55,512 | 53,970 | 48,235 | ||||||||||||||||||||
Operating income | 7,393 | 8,843 | 9,964 | |||||||||||||||||||||
Identifiable assets at period end | 72,677 | 53,542 | 72,677 | 53,542 | 55,431 | |||||||||||||||||||
Capital expenditures | 1,556 | 1,042 | 4,612 | |||||||||||||||||||||
Depreciation and amortization | 1,489 | 1,508 | 1,277 | |||||||||||||||||||||
Equity | 29,148 | 26,007 | 29,148 | 26,007 | 26,546 | |||||||||||||||||||
Operating Segments | North Asia Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 2,494,556 | 2,886,322 | 2,598,376 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 1,970,662 | 2,315,826 | 2,089,141 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 271,594 | 289,015 | 260,813 | ||||||||||||||||||||
Operating income | 252,300 | 281,481 | 248,422 | |||||||||||||||||||||
Identifiable assets at period end | 538,526 | 533,071 | 538,526 | 533,071 | 458,152 | |||||||||||||||||||
Capital expenditures | 1,767 | 3,057 | 3,756 | |||||||||||||||||||||
Depreciation and amortization | 5,263 | 5,309 | 5,326 | |||||||||||||||||||||
Equity | 247,725 | 200,371 | 247,725 | 200,371 | 240,721 | |||||||||||||||||||
Operating Segments | South Asia Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 743,406 | 777,863 | 684,877 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 544,873 | 591,925 | 521,427 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 127,478 | 125,056 | 110,393 | ||||||||||||||||||||
Operating income | 71,055 | 60,882 | 53,057 | |||||||||||||||||||||
Identifiable assets at period end | 178,336 | 152,646 | 178,336 | 152,646 | 137,279 | |||||||||||||||||||
Capital expenditures | 1,558 | 2,182 | 1,688 | |||||||||||||||||||||
Depreciation and amortization | 1,912 | 2,257 | 2,215 | |||||||||||||||||||||
Equity | 94,727 | 100,706 | 94,727 | 100,706 | 94,516 | |||||||||||||||||||
Operating Segments | Europe Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 1,280,669 | 1,330,365 | 1,115,324 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 884,968 | 926,949 | 779,622 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 342,073 | 337,970 | 287,211 | ||||||||||||||||||||
Operating income | 53,628 | 65,446 | 48,491 | |||||||||||||||||||||
Identifiable assets at period end | 551,576 | 513,744 | 551,576 | 513,744 | 501,711 | |||||||||||||||||||
Capital expenditures | 9,231 | 10,815 | 53,954 | |||||||||||||||||||||
Depreciation and amortization | 7,398 | 7,727 | 5,068 | |||||||||||||||||||||
Equity | 159,308 | 157,003 | 159,308 | 157,003 | 142,971 | |||||||||||||||||||
Operating Segments | Middle East Africa and India Segment | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 443,487 | 464,071 | 426,069 | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | 311,997 | 330,209 | 304,802 | ||||||||||||||||||||
Salaries and other operating expenses | [4] | 112,844 | 108,131 | 96,902 | ||||||||||||||||||||
Operating income | 18,646 | 25,731 | 24,365 | |||||||||||||||||||||
Identifiable assets at period end | 219,953 | 206,367 | 219,953 | 206,367 | 215,495 | |||||||||||||||||||
Capital expenditures | 1,891 | 4,387 | 1,231 | |||||||||||||||||||||
Depreciation and amortization | 1,958 | 1,860 | 1,861 | |||||||||||||||||||||
Equity | 114,726 | 123,228 | 114,726 | 123,228 | 123,600 | |||||||||||||||||||
Intersegment Eliminations | ||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | (3,366) | (312,724) | (246,304) | ||||||||||||||||||||
Directly related cost of transportation and other expenses | [3] | (2,023) | (310,635) | (249,728) | ||||||||||||||||||||
Salaries and other operating expenses | [4] | (1,325) | (2,099) | 3,415 | ||||||||||||||||||||
Operating income | (18) | 10 | 9 | |||||||||||||||||||||
Identifiable assets at period end | (1,304) | 3,635 | (1,304) | 3,635 | 2,619 | |||||||||||||||||||
Equity | $ (34,574) | $ (32,209) | $ (34,574) | $ (32,209) | $ (32,254) | |||||||||||||||||||
[1] | The fourth quarter of 2019 was significantly impacted by declines in results in our China operations due to the slowing of trade to and from China, which impacted overall freight movement around the globe. The Company’s consolidated financial results are expected to be further impacted in 2020 due to the significance of its China operations and the effects of the recent outbreak of the Novel Coronavirus (COVID-19). See Note 12 for further detail. In the fourth quarter 2019 and 2018, the People's Republic of China, including Hong Kong, represented 25% and 31%, respectively, of the Company’s total revenues and 25% and 27%, respectively, of the Company’s total operating income. | |||||||||||||||||||||||
[2] | In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. | |||||||||||||||||||||||
[3] | Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the consolidated statements of earnings. | |||||||||||||||||||||||
[4] | Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the consolidated statements of earnings. |
Business Segment Information _2
Business Segment Information - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum | Geographic Concentration Risk | Revenue, Operating Income, Identifiable Assets or Equity | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 10.00% | 10.00% | 10.00% |
Business Segment Information _3
Business Segment Information - People's Republic of China Including Hong Kong Percentage Share of the Company's Total Revenue, Net Revenue, total Operating Income, Total Identifiable Assets or Equity (Detail) - People's Republic of China, including Hong Kong - Geographic Concentration Risk | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 25.00% | 31.00% | 26.00% | 29.00% | 31.00% |
Operating Income | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 25.00% | 27.00% | 27.00% | 30.00% | 30.00% |
Identifiable assets at year end | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 12.00% | 14.00% | 11.00% | ||
Equity | |||||
Concentration Risk [Line Items] | |||||
Concentration percentage | 9.00% | 8.00% | 8.00% |
Quarterly Results (Unaudited)_2
Quarterly Results (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||||||||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 2,044,941 | [1] | $ 2,074,855 | [1] | $ 2,035,579 | [1] | $ 2,020,051 | [1] | $ 2,235,597 | [1] | $ 2,090,947 | [1] | $ 1,957,559 | [1] | $ 1,854,262 | [1] | $ 8,175,426 | [2] | $ 8,138,365 | [2] | $ 6,920,948 | [2] |
Operating income | 180,340 | [1] | 206,550 | [1] | 192,201 | [1] | 187,601 | [1] | 217,007 | [1] | 203,154 | [1] | 183,584 | [1] | 192,818 | [1] | 766,692 | 796,563 | 700,260 | |||
Net earnings | 137,748 | 160,627 | 153,530 | 140,111 | 179,577 | 163,067 | 140,946 | 136,200 | 592,016 | 619,790 | 490,383 | |||||||||||
Net earnings attributable to shareholders | $ 137,326 | $ 160,221 | $ 153,149 | $ 139,699 | $ 179,210 | $ 162,692 | $ 140,605 | $ 135,692 | $ 590,395 | $ 618,199 | $ 489,345 | |||||||||||
Diluted earnings attributable to shareholders per share | $ 0.79 | $ 0.92 | $ 0.88 | $ 0.80 | $ 1.02 | $ 0.92 | $ 0.79 | $ 0.76 | $ 3.39 | $ 3.48 | $ 2.69 | |||||||||||
Basic earnings attributable to shareholders per share | $ 0.81 | $ 0.94 | $ 0.90 | $ 0.81 | $ 1.04 | $ 0.94 | $ 0.80 | $ 0.77 | $ 3.45 | $ 3.55 | $ 2.73 | |||||||||||
[1] | The fourth quarter of 2019 was significantly impacted by declines in results in our China operations due to the slowing of trade to and from China, which impacted overall freight movement around the globe. The Company’s consolidated financial results are expected to be further impacted in 2020 due to the significance of its China operations and the effects of the recent outbreak of the Novel Coronavirus (COVID-19). See Note 12 for further detail. In the fourth quarter 2019 and 2018, the People's Republic of China, including Hong Kong, represented 25% and 31%, respectively, of the Company’s total revenues and 25% and 27%, respectively, of the Company’s total operating income. | |||||||||||||||||||||
[2] | In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised. |
Quarterly Results (Unaudited)_3
Quarterly Results (Unaudited) (Parenthetical) (Detail) - People's Republic of China, including Hong Kong - Geographic Concentration Risk | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||
Revenues: | |||||
Concentration percentage | 25.00% | 31.00% | 26.00% | 29.00% | 31.00% |
Operating Income | |||||
Revenues: | |||||
Concentration percentage | 25.00% | 27.00% | 27.00% | 30.00% | 30.00% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Geographic Concentration Risk - People's Republic of China, including Hong Kong | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||||
Subsequent Event [Line Items] | |||||
Concentration percentage | 25.00% | 31.00% | 26.00% | 29.00% | 31.00% |
Operating Income | |||||
Subsequent Event [Line Items] | |||||
Concentration percentage | 25.00% | 27.00% | 27.00% | 30.00% | 30.00% |