Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 22 111K
2: EX-10.25 Loan Modification Agreement Dated 8/2/95 1 8K
3: EX-10.26 Loan Modification Agreement Dated 3/22/96 1 8K
4: EX-11.1 Computation of Per Share Net Earnings 1 4K
5: EX-13.1 Financial Highlights 24 120K
6: EX-21.1 Subsidiaries of the Registrant 2 10K
7: EX-23 Consent of Ind Accts 1 7K
8: EX-27 FDS Exh. 27 2 9K
EX-13.1 — Financial Highlights
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EXHIBIT 13.1
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Financial Highlights
(In thousands, except per share data) 1995 1994 1993 1992 1991
Revenues $584,691 450,607 361,487 333,166 253,974
Net earnings 17,395 13,217 10,167 11,279 10,196
Net earnings per share 1.38 1.08 .85 .94 .86
Cash dividends paid per share .12 .10 .10 -- --
Working capital 81,431 68,464 60,847 53,498 46,012
Total assets 204,128 162,788 144,314 118,029 104,702
Long-term debt -- -- -- 789 902
Shareholders' equity 117,192 101,110 87,641 78,993 66,428
Weighted average shares outstanding 12,583 12,275 12,026 12,062 11,819
All share and per share information has been adjusted to reflect a 2-for-1
stock split effected in November 1993.
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[Enlarge/Download Table]
Consolidated Balance Sheets
(In thousands, except share data) December 31, 1995 1994
-----------------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 36,142 21,427
Short-term investments 457 2,810
Accounts receivable, less allowance for doubtful accounts
of $3,807 in 1995 and $3,310 in 1994 123,793 100,533
Deferred Federal and state income taxes 4,113 2,781
Other 3,862 2,566
-------- -------
Total current assets 168,367 130,117
-------- -------
Property and Equipment:
Buildings and leasehold improvements 13,493 12,376
Furniture, fixtures, and equipment 27,210 20,473
Vehicles 3,644 3,205
-------- -------
44,347 36,054
Less accumulated depreciation and amortization 20,799 15,100
-------- -------
23,548 20,954
Land 4,694 4,741
-------- -------
Net property and equipment 28,242 25,695
Other assets, net 7,519 6,976
-------- -------
$204,128 162,788
-------- -------
-------- -------
See accompanying notes to consolidated financial statements.
27
[Enlarge/Download Table]
(In thousands, except share data) December 31, 1995 1994
-----------------------------------------------------------------------------------------
Current Liabilities:
Short-term borrowings $ 285 234
Accounts payable 72,238 48,994
Accrued expenses, primarily salaries and related costs 11,129 8,542
Federal, state, and foreign income taxes 3,284 3,883
-------- -------
Total current liabilities 86,936 61,653
-------- -------
Deferred Federal income taxes -- 25
Shareholders' Equity:
Preferred stock, par value $.01 per share
Authorized 2,000,000 shares; none issued -- --
Common stock, par value $.01 per share
Authorized 40,000,000 shares, issued and outstanding
12,010,663 shares at December 31, 1995
and 11,934,843 shares at December 31, 1994 120 119
Additional paid-in capital 13,129 12,651
Retained earnings 100,928 84,971
Equity adjustments from foreign currency translation 3,015 3,369
-------- -------
Total shareholders' equity 117,192 101,110
-------- -------
Commitments and contingencies $204,128 162,788
-------- -------
-------- -------
See accompanying notes to consolidated financial statements.
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[Enlarge/Download Table]
Consolidated Statements of Earnings
(In thousands, except share data) Years Ended December 31,
1995 1994 1993
-------------------------------------------------------------------------------------
Revenues:
Airfreight $ 407,188 315,546 259,172
Ocean freight 126,638 92,945 74,859
Customsbrokerage and import services 50,865 42,116 27,456
----------- ----------- -----------
Total revenues 584,691 450,607 361,487
----------- ----------- -----------
Operating Expenses:
Airfreight consolidation 334,281 257,994 208,665
Ocean freight consolidation 96,337 73,473 59,398
Salaries and related costs 84,272 64,177 50,104
Selling and promotion 7,545 5,293 4,021
Rent 6,651 5,563 3,881
Depreciation and amortization 6,629 4,919 3,692
Other 22,125 17,834 15,409
----------- ----------- -----------
Total operating expenses 557,840 429,253 345,170
----------- ----------- -----------
Operating income 26,851 21,354 16,317
----------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense (312) (199) (249)
Interest income 1,741 1,273 1,061
Other, net 119 (40) (60)
----------- ----------- -----------
Other income, net 1,548 1,034 752
----------- ----------- -----------
Earnings before income taxes 28,399 22,388 17,069
Income tax expense 11,004 9,171 6,902
----------- ----------- -----------
Net earnings $ 17,395 13,217 10,167
----------- ----------- -----------
----------- ----------- -----------
Net earnings per common share $ 1.38 $ 1.08 $ .85
----------- ----------- -----------
----------- ----------- -----------
Weighted average shares outstanding 12,583,078 12,275,117 12,025,690
----------- ----------- -----------
----------- ----------- -----------
See accompanying notes to consolidated financial statements.
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Consolidated Statements of Shareholders' Equity
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Equity
adjustments
(In thousands, except share data) Additional from foreign
Years Ended December 31, 1995, Common stock paid-in Retained currency
-------------------
1994 and 1993 Shares Par Value capital earnings translation Total
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 11,795,642 $118 11,840 63,960 3,075 78,993
Exercise of stock options 3,350 -- 30 -- -- 30
Issuance of shares under stock
purchase plan 41,688 -- 452 -- -- 452
Tax benefits related to stock options
and stock purchase plan -- -- 7 -- -- 7
Net earnings -- -- -- 10,167 -- 10,167
Foreign currency translation adjustments -- -- -- -- (826) (826)
Dividends paid ($.10 per share) -- -- -- (1,182) -- (1,182)
---------- ---- ------ ------ ----- ------
Balance at December 31, 1993 11,840,680 $118 12,329 72,945 2,249 87,641
Exercise of stock options, net 154,340 2 1,622 -- -- 1,624
Issuance of shares under stock
purchase plan 50,999 -- 556 -- -- 556
Shares repurchased under provisions
of stock repurchase plan (111,176) (1) (2,172) -- -- (2,173)
Tax benefits related to stock options
and stock purchase plan -- -- 316 -- -- 316
Net earnings -- -- -- 13,217 -- 13,217
Foreign currency translation
adjustments, net of deferred
taxes of $196 -- -- -- -- 1,120 1,120
Dividends paid ($.10 per share) -- -- -- (1,191) -- (1,191)
---------- ---- ------ ------ ----- -------
Balance at December 31, 1994 11,934,843 $119 12,651 84,971 3,369 101,110
Exercise of stock options, net 96,520 1 1,143 -- -- 1,144
Issuance of shares under stock
purchase plan 60,423 1 989 -- -- 990
Shares repurchased under provisions
of stock repurchase plan (81,123) (1) (2,062) -- -- (2,063)
Tax benefits related to stock options
and stock purchase plan -- -- 408 -- -- 408
Net earnings -- -- -- 17,395 -- 17,395
Foreign currency translation
adjustments, net of deferred
tax credit of $196 -- -- -- -- (354) (354)
Dividends paid ($.12 per share) -- -- -- (1,438) -- (1,438)
---------- ---- ------ ------- ----- -------
Balance at December 31, 1995 12,010,663 $120 13,129 100,928 3,015 117,192
---------- ---- ------ ------- ----- -------
---------- ---- ------ ------- ----- -------
See accompanying notes to consolidated financial statements.
30
Consolidated Statements of Cash Flows
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(In thousands) Years Ended December 31, 1995 1994 1993
---------------------------------------------------------------------------------------------
Operating Activities:
Net earnings $ 17,395 13,217 10,167
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Provision for losses on accounts receivable 710 1,322 1,583
Depreciation and amortization 6,629 4,919 3,692
Deferred income tax benefit (340) (2,461) (533)
Amortization of cost in excess of net assets
of acquired businesses 320 244 186
Provision for insurance claims -- -- 914
Changes in operating assets and liabilities:
Increase in accounts receivable (24,054) (15,725) (23,407)
Increase in accounts payable,
accrued expenses and taxes payable 24,525 9,571 12,860
Other ( 1,641) 107 (1,163)
-------- ------- -------
Net cash provided by operating activities
(balances carried forward) $ 23,544 11,194 4,299
--------- ------- -------
--------- ------- -------
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[Enlarge/Download Table]
(In thousands) Years Ended December 31, 1995 1994 1993
---------------------------------------------------------------------------------------------
Net cash provided by operating activities
(balances brought forward) $ 23,544 11,194 4,299
Investing Activities:
Decrease (increase) in short-term investments 2,353 (1,325) (1,485)
Purchase of property and equipment (9,302) (8,561) (5,687)
Other ( 977) (1,147) (1,021)
-------- ------ ------
Net cash used in investing activities (7,926) (11,033) (8,193)
-------- ------ ------
Financing Activities:
Short-term borrowings, net 44 (4,092) 4,328
Principal payments on long-term debt -- -- (902)
Proceeds from issuance of common stock 2,134 2,180 489
Repurchases of common stock (2,063) (2,173) --
Dividends paid (1,438) (1,191) (1,182)
-------- ------ ------
Net cash (used in) provided by financing activities (1,323) (5,276) 2,733
Effect of exchange rate changes on cash 420 369 (516)
-------- ------ ------
Increase (decrease) in cash and cash equivalents 14,715 (4,746) (1,677)
Cash and cash equivalents at beginning of year 21,427 26,173 27,850
--------- ------ ------
Cash and cash equivalents at end of year $ 36,142 21,427 26,173
--------- ------ ------
--------- ------ ------
Interest and Taxes paid:
Interest $ 306 158 309
Income taxes 13,697 8,797 7,701
See accompanying notes to consolidated financial statements.
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Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
A. Basis of Presentation
Expeditors International of Washington, Inc. ("the Company") is an
international logistics company operating in the United States, Europe, the
Far East, the Middle East, Australia/New Zealand, Latin America and Canada,
and through a worldwide network of exclusive and non-exclusive agents. The
Company's customers include retailing and wholesaling, electronics, and
manufacturing companies around the world. The Company grants credit upon
approval to customers.
The consolidated financial statements include the accounts of the
Company and its subsidiaries. In addition the accounts of exclusive agents
have been consolidated in those circumstances where the Company maintains
unilateral control over the agent's assets and operations, notwithstanding a
lack of technical majority ownership of the agents common stock.
All significant intercompany accounts and transactions have been
eliminated in consolidation.
All dollar amounts in the footnotes are presented in thousands except for
share data.
B. Short-term investments
On January 1, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN
DEBT AND EQUITY SECURITIES, which requires that investments be designated as
either held-to-maturity, available-for-sale, or trading. Short-term
investments are available-for-sale and cost approximates market at December
31, 1995 and 1994.
C. Property and Equipment, Depreciation and Amortization
Property and equipment are recorded at cost, including interest
capitalized for the construction of certain facilities, and are depreciated
or amortized on the straight-line method over the shorter of the assets'
estimated useful lives or lease terms. No interest was capitalized in 1995 or
1994. Interest capitalized in 1993 amounted to $53.
Expenditures for maintenance, repairs, and renewals of minor items are
charged to earnings as incurred. Major renewals and improvements 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.
The excess of the cost over the fair value of the net assets of acquired
businesses (included in Other assets, net) is amortized on the straight-line
method over periods up to 20 years.
D. Revenues and Revenue Recognition
Air freight revenues include the charges to the Company for carrying the
shipments when the Company acts as a freight consolidator. Ocean freight
revenues include the charges to the Company for carrying the shipments when
the Company acts as a Non-Vessel Operating Common Carrier (NVOCC). Revenues
realized in other capacities include only the commissions and fees earned.
Revenues related to shipments are recognized at the time the freight is
tendered to a direct carrier at origin. All other revenues, including
breakbulk services, local transportation, customs formalities, distribution
services and logistics management, are recognized upon performance.
33
E. Income Taxes
Income taxes are accounted for under the asset and liability method of
accounting for income taxes. Under the asset and liability 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. 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. The Company used 34% in 1993 and 35% for
both 1994 and 1995. The impact of this change was immaterial.
F. Net Earnings per Common Share
Net earnings per common share is computed using the weighted average
number of common shares and dilutive common share equivalents outstanding.
Fully diluted earnings per share do not differ materially from primary
earnings per share.
G. 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 average annual rates for
revenues and expenses. Unrealized gains or losses arising from fluctuations
in the year-end exchange rates are generally recorded as equity adjustments
from foreign currency translation. Currency fluctuations are a normal
operating factor in the conduct of the Company's business and exchange
transaction gains and losses are included in freight consolidation expenses.
Foreign currency transaction gains and losses realized by the Company's
foreign operations in 1995, 1994, and 1993, were insignificant.
H. Cash Equivalents
All highly liquid investments with a maturity of three months or less at
date of purchase are considered to be cash equivalents.
I. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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. Actual results could differ from those estimates.
International trade is influenced by many factors, including economic and
political conditions in the United States and abroad, currency exchange
rates, and United States and foreign laws and policies relating to tariffs,
trade restrictions, foreign investments and taxation. Periodically,
governments consider a variety of changes to current tariffs and trade
restrictions. The Company cannot predict which, if any, of these proposals
may be adopted. 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
affected by governmental policies concerning international trade, the
Company's business may also be affected by political developments and changes
in government personnel or policies in the nations in which it does business.
34
J. Reclassification
In 1995, the Company modified its presentation for the investment in
its exclusive agent in Taiwan. The respective asset and liability accounts
of this entity are reported within the appropriate captions of the Company's
Consolidated Balance Sheet in conformance with the Company's consolidation
policy. The Company has historically included the operating results of this
exclusive agent within the appropriate captions of the Consolidated
Statement of Earnings. Conforming reclassifications have been made to the
1994 Consolidated Balance Sheet and to the 1993 and 1994 Statements of Cash
Flows.
In addition, certain other 1994 and 1993 amounts have been reclassified
to conform with the 1995 presentation.
Note 2. Credit Arrangements
At December 31, 1995, the Company had a $15,000 bank line of credit
extending through March 31, 1996. Borrowings under the line bear interest at
the prime rate and are unsecured. As of December 31, 1995 and December 31,
1994 there were no borrowings under this line of credit.
The majority of the Company's foreign subsidiaries maintain bank lines of
credit for short-term working capital purposes. 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. Lines of credit bear interest at .5% to 1.5% over the foreign banks'
equivalent prime rate. At December 31, 1995 and 1994, the Company was liable
for $285 and $234 respectively, of short-term borrowings under these lines,
and at December 31, 1995 was contingently liable for approximately $12,849
under outstanding standby letters of credit and guarantees related to these
lines of credit and other obligations.
In addition, at December 31, 1995 the Company had a $7,750 credit
facility with a United Kingdom bank (U.K. facility), secured by a corporate
guarantee. The Company was contingently liable under the U.K. facility at
December 31, 1995 for approximately $7,396 used to secure customs bonds
issued by foreign governments and to provide short-term overdraft facilities
to several of the Company's subsidiaries.
At December 31, 1995, the Company was in compliance with all restrictive
covenants of these credit lines and the associated credit facilities,
including maintenance of certain minimum asset, working capital and equity
balances and ratios.
35
Note 3. Income Taxes
Income tax expense for 1995, 1994 and 1993 includes the following
components:
[Download Table]
Federal State Foreign Total
--------- ------- ------- -------
1995
Current $ 7,121 866 3,357 11,344
Deferred income tax (benefit) (403) 63 -- (340)
--------- ------- ------- -------
$ 6,718 929 3,357 11,004
--------- ------- ------- -------
--------- ------- ------- -------
1994
Current $ 7,162 1,660 2,810 11,632
Deferred income tax (benefit) (2,131) (330) -- (2,461)
--------- ------- ------- -------
$ 5,031 1,330 2,810 9,171
--------- ------- ------- -------
--------- ------- ------- -------
1993
Current $ 4,481 966 1,988 7,435
Deferred income tax (benefit) (592) 59 -- (533)
--------- ------- ------- -------
$ 3,889 1,025 1,988 6,902
--------- ------- ------- -------
--------- ------- ------- -------
Income tax expense differs from amounts computed by applying the U.S.
Federal income tax rate of 35% in 1995 and 1994 and 34% in 1993, to earnings
before income taxes as a result of the following:
[Download Table]
1995 1994 1993
------ ------ ------
Computed "expected" tax expense $ 9,940 7,836 5,974
Increase (reduction) in income taxes
resulting from:
State and local income taxes, net of
federal income tax benefit 604 865 666
Increase in valuation allowance for
deferred tax assets 49 119 20
Other, net 411 351 242
------ ------ ------
$ 11,004 9,171 6,902
------ ------ ------
------ ------ ------
36
The components of earnings before income taxes are as follows:
[Download Table]
1995 1994 1993
-------- -------- --------
United States $ 13,307 11,108 7,939
Foreign 15,092 11,280 9,130
-------- -------- --------
$ 28,399 22,388 17,069
-------- -------- --------
-------- -------- --------
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at December 31,
1995 and 1994 are as follows:
[Download Table]
Year Ended December 31, 1995 1994
------- -------
Deferred tax assets:
Foreign tax credits related to unremitted foreign earnings $ 4,010 1,737
Accrued intercompany and third party charges, deductible
for taxes upon economic performance (i.e. actual payment) 2,501 1,372
Provision for doubtful accounts receivable 1,035 925
Excess of financial statement over tax depreciation 610 347
Foreign net operating loss carryforwards 587 538
Provision for insurance claims 372 372
Interest income - seller financed real estate 168 90
Other 434 346
------- -------
Total gross deferred tax assets 9,717 5,727
Less valuation allowance (587) (538)
------- -------
9,130 5,189
------- -------
Deferred tax liabilities:
Unremitted foreign earnings (4,219) (2,234)
Other (798) (199)
------- -------
Total gross deferred tax liabilities (5,017) (2,433)
Net deferred tax assets $ 4,113 2,756
------- -------
------- -------
37
At December 31, 1995 the Company has net operating loss carryforwards for
foreign income tax purposes of $1,678 which are available over an indefinite
period to offset future foreign taxable income.
The Company has not provided U.S. Federal income taxes on undistributed
earnings of foreign subsidiaries accumulated through December 31, 1992 since
the Company intends to reinvest such earnings indefinitely or to distribute
them in a manner in which no significant additional taxes would be incurred.
Such undistributed earnings are approximately $41,900 and the additional
Federal and state taxes payable in a hypothetical distribution of such
accumulated earnings would approximate $10,100. The Company provides for
Federal and state income tax expense on foreign earnings in 1993 and future
fiscal years without regard to whether such earnings will be permanently
reinvested outside the United States.
Note 4. Shareholders' Equity
A. Dividends
The Board of Directors declared semi-annual dividends of $.06 per share of
common stock in 1995 and $.05 per share of common stock in 1994 and 1993.
Dividends were paid on June 15, 1995, 1994 and 1993 and December 15, 1995,
1994 and 1993 to shareholders of record as of June 1, 1995, 1994 and 1993 and
December 1, 1995, 1994 and 1993, respectively.
On October 11, 1993, the Board declared a 2-for-1 stock split, effected in
the form of a stock dividend of one share of common stock for every share
outstanding, and increased the authorized common stock to 40,000,000 shares.
The stock dividend was distributed on November 11, 1993 to shareholders of
record on October 27, 1993. All share and per share information, except par
value, has been adjusted for all years to reflect the stock split.
B. Non-Discretionary Stock Repurchase Plan
The Board of Directors has approved a Non-Discretionary Stock Repurchase
Plan. Under the terms of this plan, management is authorized to repurchase
up to 550,000 shares of the Company's common stock, in the open market, with
the proceeds received from the exercise of Employee and Director Stock
Options. As of December 31, 1995, the Company had repurchased and retired
192,299 shares of common stock at an average price of $22.03.
C. Stock Option Plans
The Company has a stock option plan ("1985 Plan") for employees under which
the Board of Directors may grant to officers and key employees incentive
and/or non-qualified stock options to purchase common stock at prices equal
to or greater than market value on the date of grant. The Company also has a
stock option plan ("Directors' Plan") under which non-employee directors
elected at each annual meeting are granted non-qualified options to purchase
2,000 shares of common stock on the first business day of the next month
following the meeting. Outstanding options under the 1985 Plan vest and
become exercisable over periods up to five years from the date of grant and
expire no more than ten years from the date of grant. Outstanding options
under the Directors' Plan vest and are exercisable immediately and expire ten
years from the date of grant. Upon the exercise of non-qualified 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. The related tax
benefit is credited to additional paid-in capital.
38
Details regarding the plans are as follows:
[Enlarge/Download Table]
Unoptioned Shares Oustanding Options
-----------------------------------------------------------------------------------------
1985 Directors' Number of Price per
Plan Plan shares shares
-----------------------------------------------------------------------------------------
Balance at December 31, 1992 124,182 --- 1,146,352 $ .37-$15.75
Options authorized 500,000 56,000 ---
Options granted (99,000) (8,000) 107,000 $ 12.75-$14.25
Options exercised --- --- (3,350) $ 8.00-$12.63
Options cancelled 24,000 2,000 (26,000) $ 8.00-$15.75
--------- --------- ---------
Balance at December 31, 1993 549,182 50,000 1,224,002 $ .37-$15.75
--------- --------- ---------
Options granted (172,750) (6,000) 178,750 $ 17.00-$20.75
Options exercised --- --- (172,782) $ .37-$13.00
Options cancelled 63,750 --- (63,750) $ 11.25-$17.00
--------- --------- ---------
Balance at December 31, 1994 440,182 44,000 1,166,220 $ 5.17-$20.75
--------- --------- ---------
Options granted (352,300) (6,000) 358,300 $ 22.50-$22.75
Options exercised -- (96,520) $ 5.17-$15.75
Options cancelled 22,900 -- (22,900) $ 5.92-$22.50
--------- --------- ---------
Balance at December 31, 1995 110,782 38,000 1,405,100 $ 5.17-$22.75
--------- --------- ---------
--------- --------- ---------
At December 31, 1995, options to purchase 707,635 shares were exercisable
at a weighted average price of $11.57 per share.
Financial Accounting Standards Board Statement No. 123, Accounting for
Stock-Based Compensation, establishes the accounting and reporting standards
for stock-based employee compensation plans, including stock purchase plans,
stock options and stock appreciation rights. This new standard defines a fair
value-based method of accounting for these equity instruments. This method
measures compensation cost based on the value of the award and recognizes
that cost over a specified service period. Companies may elect to adopt the
fair value method or may continue accounting for these types of equity
instruments under current APB Opinion No. 25, Accounting for Stock Issued to
Employees. Companies which continue using APB Opinion No. 25 must make pro
forma disclosures of net income and earnings per share using the fair value
method. Statement No. 123 applies to fiscal years beginning after December
15, 1995.
The Company anticipates that it will continue to use APB Opinion No. 25 and
will make pro forma disclosures using the fair value method.
39
D. Stock Purchase Plan
The Company's 1988 Employee Stock Purchase Plan provides for 700,000 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 July 31 or (2)
85% of the fair market value of the Company's stock on the preceding August
1. At December 31, 1995, 1994 and 1993, an aggregate of 273,886 shares,
213,463 shares, and 162,464 shares, respectively, had been issued under the
plan, and at December 31, 1995, $580 had been withheld in connection with the
plan year ending July 31, 1996.
Note 5. Commitments
A. Leases
The Company occupies office and warehouse facilities under terms of
operating leases expiring up to 2007. At December 31, 1995, future minimum
annual lease payments under all leases are as follows:
[Download Table]
1996 $ 5,186
1997 3,986
1998 2,664
1999 1,697
2000 628
Thereafter 609
---------
$ 14,770
---------
---------
B. Employee Benefits
The Company has an employee savings plan under which the Company provides a
discretionary matching contribution. In 1995, 1994, and 1993, the Company's
contributions under the plan were $521, $396, and $304, respectively.
Note 6. Contingent Liabilities
The Company is ordinarily involved in claims and lawsuits which arise in
the normal course of business, none of which currently, in management's
opinion, will have a significant effect on the Company's financial condition.
40
Note 7. Business Segment Information
Financial information regarding the Company's 1995, 1994, and 1993 operations
by geographic area follows:
[Enlarge/Download Table]
----------------------------------------------------------------------------------------------------------------------------
North Australia/ Middle Latin Elimi- Consoli-
America Far East New Zealand Europe East America nation dated
----------------------------------------------------------------------------------------------------------------------------
1995
Revenues from unaffiliated
customers $165,026 351,056 5,610 61,785 511 703 -- 584,691
Transfers between
geographic areas 8,756 1,579 1,883 2,083 301 181 (14,783) --
-------- -------- -------- -------- -------- ------- -------- --------
Total revenues $173,782 352,635 7,493 63,868 812 884 14,783) 584,691
-------- -------- -------- -------- -------- ------- -------- --------
-------- -------- -------- -------- -------- ------- -------- --------
Operating income
(loss) $ 13,431 9,005 651 4,553 (308) (481) -- 26,851
Identifiable assets
at year end $112,248 51,732 5,135 31,326 2,213 1,474 -- 204,128
Capital expenditures $ 4,210 1,422 373 2,189 457 651 -- 9,302
Depreciation and
amortization $ 3,485 1,328 261 1,427 62 66 -- 6,629
----------------------------------------------------------------------------------------------------------------------------
1994
Revenues from unaffiliated
customers $133,926 269,432 5,400 41,617 232 -- -- 450,607
Transfers between
geographic areas 6,771 1,134 388 1,426 263 -- (9,982) --
-------- -------- -------- -------- -------- ------- -------- --------
Total revenues $140,697 270,566 5,788 43,043 495 -- (9,982) 450,607
-------- -------- -------- -------- -------- ------- -------- --------
-------- -------- -------- -------- -------- ------- -------- --------
Operating income
(loss) $ 10,789 7,309 384 2,951 (79) -- -- 21,354
Identifiable assets
at year end $ 85,633 47,327 3,760 24,761 1,307 -- -- 162,788
Capital expenditures $ 4,293 1,645 640 1,908 75 -- -- 8,561
Depreciation and
amortization $ 2,602 955 230 1,107 25 -- -- 4,919
----------------------------------------------------------------------------------------------------------------------------
1993
Revenues from unaffiliated
customers $114,803 220,127 2,448 23,967 142 -- -- 361,487
Transfers between
geographic areas 5,306 838 1,449 1,022 249 -- (8,864) --
-------- -------- -------- -------- -------- ------- -------- --------
Total revenues $120,109 220,965 3,897 24,989 391 -- (8,864) 61,487
-------- -------- -------- -------- -------- ------- -------- --------
-------- -------- -------- -------- -------- ------- -------- --------
Operating income $ 8,266 5,980 306 1,762 3 -- -- 16,317
Identifiable assets
at year end $ 73,486 50,790 3,419 15,257 1,362 -- -- 144,314
Capital expenditures $ 2,765 1,123 336 1,455 8 -- -- 5,687
Depreciation and
amortization $ 2,062 652 184 780 14 -- -- 3,692
----------------------------------------------------------------------------------------------------------------------------
Financial information contained under the North America caption relate to
the United States and Canada. The Canadian balances are immaterial.
The Company charges its subsidiaries and affiliates for services rendered
in the United States on a cost recovery basis.
41
Note 8. Quarterly Results (Unaudited)
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1st 2nd 3rd 4th
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1995 Revenues $122,878 141,520 159,168 161,125
Net revenues 33,286 36,732 41,272 42,783
Net earnings 3,218 4,087 5,015 5,075
Net earnings per share .26 .33 .40 .40
1994 Revenues $ 93,088 106,065 123,846 127,608
Net revenues 24,956 28,204 32,033 33,947
Net earnings 2,282 3,153 3,902 3,880
Net earnings per share .19 .26 .32 .31
Net revenues are determined by deducting freight consolidation costs from
total revenues. Quarterly per share data may not equal the per share total
reported for the year.
42
Independent Auditors' Report
The Board of Directors and Shareholders
Expeditors International of Washington, Inc.:
We have audited the consolidated balance sheets of Expeditors International
of Washington, Inc. and subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of earnings, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1995.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Expeditors International of Washington, Inc. and subsidiaries at December 31,
1995 and 1994, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1995, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK, LLP
/s/ KPMG Peat Marwick, LLP
Seattle, Washington
February 16, 1996
43
Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Expeditors International of Washington, Inc. is engaged in the business of
global logistics management, including international freight forwarding and
consolidation, for both air and ocean freight. The Company acts as a customs
broker in all domestic offices, and in many of its overseas offices. The
Company also provides additional services for its customers including value
added distribution, purchase order management, vendor consolidation and other
logistics solutions. The Company offers domestic forwarding services only in
conjunction with international shipments. The Company does not compete for
overnight courier or small parcel business. The Company does not own or
operate aircraft or steamships.
International trade is influenced by many factors, including economic and
political conditions in the United States and abroad, currency exchange
rates, and United States and foreign laws and policies relating to tariffs,
trade restrictions, foreign investments and taxation. Periodically,
governments consider a variety of changes to current tariffs and trade
restrictions. The Company cannot predict which, if any, of these proposals
may be adopted. 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
affected by governmental policies concerning international trade, the
Company's business may also be affected by political developments and changes
in government personnel or policies in the nations in which it does business.
The Company's ability to provide services to its customers is highly
dependent on good working relationships with a variety of entities including
airlines, ocean steamship lines, and governmental agencies. The Company
considers its current working relationships with these entities to be
satisfactory. However, changes in space allotments available from carriers,
governmental deregulation efforts, "modernization" of the regulations
governing customs brokerage, and/or changes in governmental quota
restrictions could affect the Company's business in unpredictable ways.
Historically, the Company's operating results have been subject to a
seasonal trend when measured on a quarterly basis. The first quarter has
traditionally been the weakest and the third quarter has traditionally been
the strongest. This pattern is the result of, or is influenced by, numerous
factors including climate, national holidays, consumer demand, economic
conditions and a myriad of other similar and subtle forces. In addition,
this historical quarterly trend has been influenced by the growth and
diversification of the Company's international network and service offerings.
The Company cannot accurately forecast many of these factors nor can the
Company estimate accurately the relative influence of any particular factor
and, as a result, there can be no assurance that historical patterns, if any,
will continue in future periods.
A significant portion of the Company's revenues are derived from customers
in retail industries whose shipping patterns are tied closely to consumer
demand, and from customers in industries whose shipping patterns are
dependent upon just-in-time production schedules. Therefore, the timing of
the Company's revenues are, to a large degree, impacted by factors out of the
Company's control, such as a sudden change in consumer demand for retail
goods and/or manufacturing production delays. Additionally, many customers
ship a significant portion of their goods at or near the end of a quarter,
and therefore, the Company may not learn of a shortfall in revenues until
late in a quarter. To the extent that a shortfall in revenues or earnings
was not expected by securities analysts, any such shortfall from levels
predicted by securities analysts could have an immediate and adverse effect
on the trading price of the Company's stock.
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation, which established the
accounting and reporting standards for stock-based employee compensation
plans, including stock purchase plans, stock options and stock appreciation
rights. Under the provision of this pronouncement, Companies utilizing these
kinds of equity instruments must either (1) provide compensation expense,
based upon prescribed measurement guidelines or (2), elect to continue using
APB Opinion No. 25, Accounting for Stock Issued to Employees under the
stipulation that supplemental pro forma disclosures of net income and
earnings per share be made as if these new accounting and reporting standards
had been applied. Statement No. 123 is
44
required for fiscal years beginning after December 15, 1995. The Company
anticipates that it will continue to use APB Opinion No. 25 and will make the
required supplemental pro forma disclosures.
Results of Operations
The following table shows the consolidated net revenues (revenues less
consolidation expenses) attributable to the Company's principal services and
the Company's expenses for 1995, 1994 and 1993, expressed as percentages of
net revenues. With respect to the Company's services other than
consolidation, net revenues are identical to revenues. Management believes
that net revenues are a better measure than total revenues of the relative
importance of the Company's principal services since total revenues earned by
the Company as a freight consolidator include the carriers' charges to the
Company for carrying the shipment whereas revenues earned by the Company in
its other capacities include only the commissions and fees actually earned by
the Company.
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(Amounts in thousands) 1995 1994 1993
Percent Percent Percent
of net of net of net
Amount revenues Amount revenues Amount revenues
---------------------------------------------------------------------------------------------------
Net revenues:
Airfreight $ 72,907 47% $ 57,552 48% $ 50,507 54%
Ocean freight 30,301 20 19,472 17 15,461 17
Customs brokerage
and import services 50,865 33 42,116 35 27,456 29
-------- --- -------- --- -------- ---
Net revenues 154,073 100 119,140 100 93,424 100
-------- --- -------- --- -------- ---
Operating expenses:
Salaries and related costs 84,272 55 64,177 54 50,104 54
Other 42,950 28 33,609 28 27,003 29
-------- --- -------- --- -------- ---
Total operating expense $127,222 83 97,786 82 77,107 83
-------- --- -------- --- -------- ---
Operating income 26,851 17 21,354 18 16,317 17
Other income, net 1,548 1 1,034 1 752 1
-------- --- -------- --- -------- ---
Earnings before
income taxes 28,399 18 22,388 19 17,069 18
Income tax expense 11,004 7 9,171 8 6,902 7
Net earnings $ 17,395 11% $ 13,217 11% $ 10,167 11%
-------- --- -------- --- -------- ---
-------- --- -------- --- -------- ---
1995 compared with 1994
Airfreight net revenues in 1995 increased 27% compared with 1994 primarily
due to (1) increased airfreight shipments and tonnages handled by the
Company from the Far East to North America and Europe, (2) increased prices
charged by the airlines which were passed along to customers, and (3)
increased export airfreight shipments and tonnages from North America and
Europe, and from North America to Australia and the Middle East. The
Company's North American export airfreight net revenues increased 24% in 1995
compared to 1994. Net air freight revenues from the Far East and from Europe
increased 18% and 46%, respectively for 1995 compared with 1994.
Ocean freight net revenues increased 56% in 1995 compared to 1994 a result
of the Company being able to aggressively market extremely competitive ocean
freight rates to its customers, primarily on freight from the Far East to
North America. The ability to offer these competitive rates was due to
favorable contracts with certain key ocean carriers from whom the Company
contracts space on a wholesale basis to be offered to its customers on a
retail basis.
45
The Company was able to expand market share while at the same time
increase its ocean freight margins. In addition to increases in the
traditional NVOCC (Non-Vessel Operating Common Carrier) and ocean forwarding
business, E.C.M.S. (Expeditors Cargo Management Service), a PC-based ocean
freight consolidation management and purchase order tracking service, was
instrumental in providing new business. The Company's North American export
ocean freight net revenues increased 48% in 1995 compared to 1994. This
increase was a result of the Company handling more ocean shipments moving
from North America to Europe, and, from North America to the Far East. Net
ocean freight revenues from the Far East and from Europe increased 69% and
71%, respectively for 1995 compared with 1994.
Customs brokerage and import services increased 21% in 1995 as compared
with 1994 as a result of (1) the Company's growing reputation for providing
high quality service; (2) consolidation within the customs brokerage market
as customers seek out customs brokers with more sophisticated computerized
capabilities, critical to an overall logistics management program, and (3)
the growing importance of distribution services as a separate and distinct
service offered to existing and potential customers-distribution services
account for nearly 18% of the increase in Customs brokerage and import
services revenues for 1995 compared with 1994.
Salaries and related costs increased annually as a result of, (1) the
Company's increased hiring of sales, operations, and administrative personnel
in existing and new offices to accommodate increases in business activity and
(2) increased compensation levels. Salaries and related costs increased
approximately 1% as a percentage of net revenue. This small 1% increase is
largely attributable to increased staffing related to the opening of new
offices, principally in Latin America and Europe, in the last six months of
1995. The relationship between salaries and net revenues is the result of a
compensation philosophy that has been maintained since the inception of the
Company: offer a modest base salary and the opportunity to share in a fixed
and determinable percentage of the operating profit of the business unit
controlled by each key employee. Using this compensation model, changes in
individual compensation will occur in proportion to changes in Company
profits. Management believes that the growth in revenues, net revenue and net
income for 1995, (and 1994 and 1993) are a direct result of the incentives
inherent in the Company's compensation program.
Other operating expenses increased in 1995 as compared with 1994 as rent
expense, communications expense, quality and training expenses, and other
costs to accommodate the Company's growing operations. Other operating
expenses as a percentage of net revenues remained constant in 1995 as
compared with 1994.
Other income, net, increased in 1995 as compared to 1994 primarily due to
higher interest income earned, as a result of higher positive cash flow
during 1995 and resulting higher interest income on the Company's invested
cash balances. In addition, due to the change in the Company's tax policy
effective January 1, 1993, line of credit borrowings in the United States
were kept at a minimum level by repatriating cash from overseas subsidiaries.
This is very significant to the Company's U.S. operations where the Company
is most active in its role as a customs broker and regularly advances duties
on behalf of customers.
The Company pays income taxes in the United States and other jurisdictions,
as well as other taxes, which are typically included in costs of operations.
Effective income tax rates per financial statements decreased in 1995 to
38.7% compared with 41% in 1994. This decrease is a result of lower state
taxes in the state of California allowed because of changes in that state's
unitary tax regulations and also as a result of the reversal of certain
valuation allowances established in 1994 and earlier. These valuation
allowances related to net operating loss carryforwards generated at the time
the actual losses were incurred in foreign countries, but were not recognized
as a reduction in income tax expense until actually utilized to offset
subsequent taxable income.
1994 compared with 1993
Airfreight net revenues increased approximately 14% in 1994 as compared
with 1993, primarily due to increased volumes of air freight tonnages on
shipments from certain of the Company's Far East markets, combined with
growth in the Company's U.S. export and European export airfreight markets as
a result of increased sales efforts, and, in 1994, an improving world economy
as compared with 1993. The Company's U.S. Exports increased 10% in 1994
compared to 1993. Net air freight revenues from the Far East and from Europe
increased 21% and 28%, respectively for 1994 compared with 1993.
46
Ocean freight net revenues increased in 26% 1994 compared to 1993 due to
increased ocean freight volumes handled by the Company's offices in North
America, the Far East and Europe. The increase in ocean freight net revenue
in 1994 compared with 1993 were a result of favorable contracts with certain
key ocean carriers. During 1994, the Company's ocean freight volumes
reached a size that major ocean carriers offered the Company significant rate
concessions, not previously available to the Company. These incentives
resulted in higher profit margins for the Company in 1994 as compared with
1993. In addition to increases in the traditional NVOCC and ocean forwarding
business - 20% in 1994 compared to 1993, E.C.M.S., in its first full year of
operation, accounted for nearly 40% of the Company's 1994 increase in ocean
freight net revenue. Net ocean freight revenues from the Far East and from
Europe increased 32% and 51%, respectively in 1994 as compared with 1993.
Customs brokerage and import services increased annually as a result of (1)
the Company's growing reputation for providing high quality service; (2)
consolidation within the customs brokerage market as customers seek out
customs brokers with more sophisticated computerized capabilities, critical
to an overall logistics management program, and (3) the emergence of
distribution services in 1994 as a separate and distinct service offered to
existing and potential customers - distribution services accounted for nearly
20% of the increase in Customs brokerage and import services revenues for
1994 compared with 1993.
Salaries and related costs increased annually as a result of (1) the
Company's increased hiring of sales, operations, and administrative personnel
in existing and new offices to accommodate increases in business activity and
(2) increased compensation levels . Salaries and related costs as a
percentage of net revenue remained constant in 1994 as compared with the same
percentage figure in 1993.
Other operating expenses increased in 1994 as compared with 1993 as rent
expense, communications expense, quality and training expenses, and other
costs expanded to accommodate the Company's growing operations. Other
operating expenses as a percentage of net revenue actually decreased 1% in
1994 as compared with 1993, largely related to economies of scale recognized
in fixed costs of computers and communications.
Other income, net, increased in 1994 as compared to 1993 primarily due to
higher interest income earned, as a result of higher interest rates, on the
Company's invested cash balances. In addition, due to the change in the
Company's tax policy effective January 1, 1993, line of credit borrowings in
the United States were kept at a minimum level by repatriating cash from
overseas subsidiaries. This resulted in lower interest expense in 1994,
despite higher interest rates and higher levels of business activity than
experienced in 1993.
Currency and Other Risk Factors
International air/ocean freight forwarding and customs brokerage are
intensively competitive and are expected to remain so for the foreseeable
future. There are a large number of entities competing in the international
logistics industry, however, the Company's primary competition is confined to
a relatively small number of companies within this group. While there is
currently a marked trend within the industry toward consolidation into large
firms with multinational office and agency networks, regional and local
broker/forwarders remain a competitive force.
Historically, the primary competitive factors in the international
logistics industry have been price and quality of service, including
reliability, responsiveness, expertise, convenience, and scope of operations.
The Company emphasizes quality service and believes that its prices are
competitive with those of others in the industry. Recently customers have
exhibited a trend towards the more sophisticated and efficient procedures for
the management of the logistics supply chain by embracing strategies such as
just in time inventory management. This trend has made having sophisticated
computerized customer service capabilities and a stable worldwide network
significant factors in attracting and retaining customers.
Developing these systems and a worldwide network has added a considerable
indirect cost to the services provided to customers. Smaller and middle-tier
competitors, in general, do not have the resources available to develop
customized systems and worldwide network. As a result, there is a
significant amount of consolidation currently taking place in the industry.
Management expects that this trend toward consolidation will continue for the
short to medium term. Historically, growth through aggressive acquisition
has proven to be
47
a challenge for many of the Company's competitors and typically involves the
purchase of significant "goodwill", the value of which can be realized in
large measure only by retaining the customers and profit margins of the
acquired business. As a result, the Company has pursued a strategy
emphasizing organic growth supplemented by certain strategic acquisitions.
The nature of the Company's worldwide operations necessitate the Company
dealing with a multitude of currencies other than the U.S. dollar. This
results in the Company being exposed to the inherent risks of the
international currency markets and governmental interference. Many of the
countries where the Company maintains offices and/or agency relationships
have strict currency control regulations which influence the Company's
ability to hedge foreign currency exposure. The Company tries to compensate
for these exposures by accelerating international currency settlements among
these offices or agents. Foreign currency gains and losses recognized during
1995, 1994 and 1993 were immaterial.
The Company has traditionally generated revenues from air freight, ocean
freight and customs brokerage and import services. In light of the
customer-driven trend to provide customer rates on a door-to-door basis,
management foresees the potential, in the medium to long-term, for fees
normally associated with customs house brokerage to be de-emphasized and
included as a component of other services offered by the Company.
Liquidity and Capital Resources
The Company's principal source of liquidity is cash generated from
operations. At December 31, 1995, working capital was $81 million, including
cash and short-term investments of $37 million. The Company had no long-term
debt at December 31, 1995. While the nature of its business does not require
an extensive investment in property and equipment, the Company is actively
looking for suitable facilities and/or property to acquire at or near
airports in certain cities in North America and overseas. The Company
expects to purchase at least one high-end combined office/warehouse and
distribution facility in a key metropolitan area in 1996. Including this
facility, the Company currently expects to spend approximately $ 25 million
on property and equipment in 1996, which is expected to be financed with
cash, short-term floating rate, and/or long-term fixed-rate borrowings.
The Company borrows foreign and domestically under unsecured bank lines of
credit totaling $15 million. At December 31, 1995, the Company was directly
liable for $285,000 drawn on these lines of credit and was contingently
liable for an additional $12.8 million of standby letters of credit. In
addition, the Company maintains a bank facility with its U.K. bank for $7.75
million of which the Company was contingently liable for $7.4 million.
Management believes that the Company's current cash position, bank
financing arrangements, and operating cash flows will be sufficient to meet
its capital and liquidity requirements for the foreseeable future.
In some cases, the Company's ability to repatriate funds from foreign
operations is subject to foreign exchange controls. In addition, certain
undistributed earnings of the Company's subsidiaries accumulated through
December 31, 1992 would, under most circumstances, be subject to some
additional United States income tax if distributed to the Company. The
Company has not provided for this additional tax because the Company intends
to reinvest such earnings to fund the expansion of its foreign activities, or
to distribute them in a manner in which no significant additional taxes would
be incurred. At December 31, 1995, the total of such undistributed earnings
was approximately $42 million. And the associated Federal and state tax
that would be payable on any hypothetical repatriation of these earnings at
that date approximates $10.1 million.
Impact of Inflation
To date, the Company's business has not been adversely affected by
inflation, nor has the Company experienced significant difficulty in passing
carrier rate increases on to its customers by means of price increases. It
is, however generally felt by the Company that airline rate increases will
occur over the short to medium term period and, due to the high degree of
competition in the market place, it is possible that these rate increases
could lead to an erosion in the Company's air freight margins. Also, as the
Company is not required to purchase or maintain extensive property and
equipment and has not otherwise incurred substantial interest rate-sensitive
indebtedness, the Company's direct exposure to increased costs resulting from
increases in interest rates is not severe.
48
[Enlarge/Download Table]
CORPORATE INFORMATION
Shareholder Information
TRANSFER AGENT AND ANNUAL MEETING STOCK PRICE AND
REGISTRAR, The annual meeting of SHAREHOLDER DATA
DIVIDEND DISBURSING AGENT shareholders is The following table sets forth
First Interstate Bank Wednesday, May 8, 1996, the high and low sale prices
Washington, N.A. at 2:00 p.m. in the in the over-the-counter market
First Interstate Center SeaTac Marriott Hotel for the Company's Common Stock
P.O. Box 21927 International Blvd. as reported by The NASDAQ
Seattle, WA 98111 Seattle, WA National Market System under
the symbol EXPD.
INDEPENDENT AUDITORS FORM 10-K _____________________________________________________
KPMG Peat Marwick LLP The Company files an Common
3100 Two Union Square Annual Report with the Stock Quarter High Low
601 Union Street Securities and Exchange _____________________________________________________
Seattle, WA 98101-2327 Commission on Form 10-K 1995 First 23-1/4 19-3/4
Shareholders may obtain Second 25 21
CORPORATE HEADQUARTERS a copy of this report Third 28-1/4 21
Expeditors International without charge by Fourth 28-1/4 22-3/4
of Washington, Inc. writing: _____________________________________________________
19119 - 16th Avenue South Jeffrey J. King, 1994 First 19-1/4 15
Seattle, WA 98188 Secretary Second 19-1/2 15-1/2
Expeditors International Third 22 16-1/2
Information is available on of Washington, Inc. Fourth 23-1/4 17-7/8
the World Wide Web at 19119-16th Avenue South _____________________________________________________
http://www.expd.com P.O. Box 69620
Seattle, WA 98168-9620 There were 455 shareholders of
OFFICES AND AGENTS record as of December 31,
Major Cities of the World 1995. Management estimates
that there were approximately
3,000 beneficial shareholders
at that date.
In 1994 and 1995, the Board of
Directors declared a semi-
annual dividend of $.05 per
share and $.06 per share,
respectively, which was paid
on the 15th day of June and
December.
49
Dates Referenced Herein and Documents Incorporated by Reference
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