EXPD Expeditors International of Washington Inc

Expeditors International of Washington, Inc. (NASDAQ: EXPD) today announced net earnings attributable to shareholders of $91,232,000 for the first quarter of 2011, as compared with $61,247,000 for the same quarter of 2010, an increase of 49%. Net revenues for the first quarter increased 25% to $453,915,000 as compared with $361,823,000 reported for the first quarter of 2010. Total revenues and operating income were $1,460,848,000 and $147,230,000 for the first quarter of 2011, as compared with $1,201,109,000 and $100,541,000 for the same quarter of 2010, increases of 22% and 46%, respectively. Diluted net earnings attributable to shareholders per share for the first quarter were $.42 as compared with $.28 for the same quarter in 2010, an increase of 50%. The Company also reported that same store net revenues and operating income increased 25% and 46%, respectively, during the first quarter of 2011, as compared with the same period in 2010.

“We should start off by acknowledging that this was an outstanding quarter by every measure. We always like to point out that it is our people, working in concert with our service providers, who really make this happen, and it is our customers who have given us the opportunities. We’re grateful to all of them. The most remarkable thing to us about this 2011 first quarter was the strong across the board operating income growth. All of our geographic operating segments made outstanding contributions. We think this means that we must be doing something right, not just in a few offices, but throughout our global network,” said Peter J. Rose, Chairman and Chief Executive Officer. “We were also impressed with the extent that productivity initiatives continue to benefit our operating income growth. A focus on strong market share growth and efficient operations has been the solid foundation upon which we continue to build our company,” Rose went on to say.

“Whenever we report above-consensus results, there follows a great deal of curiosity by some about what that means for our future expectations. Often a ‘mechanical upward adjustment’ by the amount we exceeded that quarter’s consensus is added onto to what were already challenging future expectations. Those who know us well know that we always decline to make projections and forecasts. What we do try to offer, however, are things that we think about internally that we wish everyone externally would consider. We think about rising fuel costs, rising costs in general, as inflation (which is now globally topical after not having been mentioned for years) and global political unrest. Volatile currency exchange rates and the current status of the US dollar should also be factored in. Does this mean we’re pessimistic? No, not at all. We think we do our best work helping our customers navigate through chaos and unexpected events, and in that sense, opportunity abounds. But we do think that future expectations need to be founded on realistic assessments of current conditions. They should not simply become a mechanical extrapolation exercise that slingshots a number out there from a base created by one single, albeit outstanding, quarter,” concluded Rose.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 184 full-service offices, 65 satellite locations and 2 international service centers located on six continents linked into a seamless worldwide network through an integrated information management system. Services include air and ocean freight forwarding, vendor consolidation, customs clearance, marine insurance, distribution and other value added international logistics services.

NOTE: See Disclaimer on Forward-Looking Statements on the following page of this release.

Expeditors International of Washington, Inc.

1st Quarter 2011 Earnings Release, May 4, 2011

  Financial highlights for the three months ended March 31, 2011 (Unaudited) (in 000's of US dollars except share data)       Three Months Ended   2011   2010 % Increase Revenues $ 1,460,848 $ 1,201,109 22% Net revenues $ 453,915 $ 361,823 25% Operating income $ 147,230 $ 100,541 46% Net earnings attributable to shareholders $ 91,232 $ 61,247 49% Diluted earnings attributable to shareholders per share $ .42 $ .28 50% Basic earnings attributable to shareholders per share $ .43 $ .29 48% Diluted weighted average shares outstanding 215,863,386 216,630,436 Basic weighted average shares outstanding 212,088,860 212,192,710       Employee headcount as of March 31, 2011   2010 North America 4,443 4,131 Asia Pacific 3,898 3,591 Europe and Africa 2,142 1,948 Middle East 1,187 1,109 South America 626 561 Information Systems 551 565 Corporate 205 186 13,052 12,091       Year-over-year percentage growth in: Airfreight kilos   Ocean freight FEUs 2011 January 13% 16% February 12% (9)% March 21% 11% Quarter 16% 7%  

During the first quarter of 2011, the Company opened one satellite office in Kristiansand, Norway and closed one satellite office in Malmoe, Sweden.

Investors may submit written questions via e-mail to: investor@expeditors.com. Or by fax to: (206) 674-3459. Questions received by the end of business on May 6, 2011 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about May 18, 2011.

Disclaimer on Forward-Looking Statements:

Certain portions of this release contain forward-looking statements which are based on certain assumptions and expectations of future events that are subject to risks and uncertainties, including comments on future ability to improve productivity and operating income, rising fuel costs, rising costs in general, global political unrest, volatile currency exchange rates, status of the US Dollar and our ability to help customers navigate through chaos and unexpected events. Actual future results and trends may differ materially from historical results or those projected in any forward-looking statements depending on a variety of factors including, but not limited to, our ability to maintain consistent and stable operating results, future success of our business model, ability to perpetuate profits, changes in customer demand for Expeditors’ services caused by a general economic slow-down, customers’ inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, regulatory changes or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual Report filed with the Securities and Exchange Commission.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited)           March 31, December 31,

Assets

2011   2010   Current assets: Cash and cash equivalents $ 1,238,471 $ 1,084,465 Short-term investments 612 524 Accounts receivable, net 1,006,980 1,003,884 Deferred Federal and state income taxes 9,382 8,706 Other current assets   25,380   42,776 Total current assets   2,280,825   2,140,355   Property and equipment, net 514,429 498,648 Goodwill, net 7,927 7,927 Other intangibles, net 3,402 3,716 Other assets, net   30,149   28,533 $ 2,836,732 $ 2,679,179

Liabilities and Equity

  Current liabilities: Accounts payable 687,988 652,161 Accrued expenses, primarily salaries and related costs 182,391 177,869 Federal, state and foreign income taxes   44,606   31,948 Total current liabilities   914,985   861,978   Deferred Federal and state income taxes 72,627 69,047   Commitments and contingencies   Shareholders' equity: Preferred stock; none issued -- --

Common stock, par value $.01 per share; issued and outstanding 212,034,197 shares at March 31, 2011 and 212,047,774 shares at December 31, 2010

2,120 2,120 Additional paid-in capital 14,350 13,412 Retained earnings 1,808,481 1,717,249 Accumulated other comprehensive income   16,958   8,125 Total shareholders' equity   1,841,909   1,740,906   Noncontrolling interest   7,211   7,248 Total equity   1,849,120   1,748,154     $ 2,836,732 $ 2,679,179   EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except share data) (Unaudited)           Three months ended March 31, 2011 2010 Revenues: Airfreight services $ 700,923 $ 559,383 Ocean freight and ocean services 440,141 381,244 Customs brokerage and other services   319,784     260,482   Total revenues   1,460,848     1,201,109     Operating expenses: Airfreight consolidation 524,636 427,342 Ocean freight consolidation 339,549 301,090 Customs brokerage and other services 142,748 110,854 Salaries and related costs 237,815 199,848 Rent and occupancy costs 21,381 19,227 Depreciation and amortization 9,174 9,395 Selling and promotion 9,163 7,035 Other   29,152     25,777   Total operating expenses   1,313,618     1,100,568     Operating income   147,230     100,541     Interest income 2,320 1,775 Interest expense (214 ) (87 ) Other, net   1,117     609   Other income, net   3,223     2,297     Earnings before income taxes 150,453 102,838   Income tax expense 59,246 41,528     Net earnings   91,207     61,310     Less: net (losses) earnings attributable to noncontrolling interest (25 ) 63     Net earnings attributable to shareholders $ 91,232   $ 61,247     Diluted earnings attributable to shareholders per share $ 0.42   $ 0.28     Basic earnings attributable to shareholders per share $ 0.43   $ 0.29     Weighted average diluted shares outstanding   215,863,386     216,630,436     Weighted average basic shares outstanding   212,088,860     212,192,710     EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)             Three months ended March 31, 2011 2010 Operating Activities: Net earnings $ 91,207 $ 61,310

Adjustments to reconcile net earnings to net cash provided by operating activities:

Provision for losses on accounts receivable 1,853 2,443 Deferred income tax benefit (1,936 ) (7,728 ) Excess tax benefits from stock plans (2,246 ) (4,012 ) Stock compensation expense 10,472 11,198 Depreciation and amortization 9,174 9,395 Gain on sale of assets (30 ) (295 ) Other 307 478 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 6,683 (12,965 ) Increase in other current assets (1,415 ) (1,811 )

Increase in accounts payable and accrued expenses

30,187 43,169 Increase in income taxes payable, net   33,577     25,941   Net cash provided by operating activities   177,833     127,123     Investing Activities: Increase in short-term investments (89 ) (36 ) Purchase of property and equipment (21,125 ) (7,582 ) Proceeds from sale of property and equipment 43 59 Other   (1,442 )   (188 ) Net cash used in investing activities   (22,613 )   (7,747 )   Financing Activities: Proceeds from issuance of common stock 7,804 12,220 Repurchases of common stock (19,584 ) (18,019 ) Excess tax benefits from stock plans   2,246     4,012   Net cash used in financing activities   (9,534 )   (1,787 )   Effect of exchange rate changes on cash and cash equivalents   8,320     (1,870 )   Increase in cash and cash equivalents 154,006 115,719   Cash and cash equivalents at beginning of period   1,084,465     925,929     Cash and cash equivalents at end of period $ 1,238,471   $ 1,041,648     Interest and taxes paid: Interest $ 4 87 Income taxes 26,276 19,996   EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited)           Other       Europe       United North Latin Asia and Middle East Elimi- Consoli- States America America Pacific Africa and India nations dated Three months ended March 31, 2011 Revenues from unaffiliated customers $ 377,106 43,846 20,332 728,130 213,612 77,822 1,460,848 Transfers between geographic areas   23,965 2,682 5,621 9,183 10,707 4,209 (56,367 ) - Total revenues $ 401,071 46,528 25,953 737,313 224,319 82,031 (56,367 ) 1,460,848   Net revenues $ 177,934 20,701 15,103 141,487 73,926 24,764 453,915 Operating income $ 53,734 5,789 4,763 59,438 17,707 5,799 147,230 Identifiable assets $ 1,427,414 86,371 57,960 659,352 452,675 153,236 (276 ) 2,836,732 Capital expenditures $ 4,030 160 156 4,712 11,706 361 21,125 Depreciation and amortization $ 4,985 303 269 1,969 1,110 538 9,174 Equity $ 1,124,913 47,793 30,981 407,053 181,245 89,422 (32,287 ) 1,849,120   Three months ended March 31, 2010 Revenues from unaffiliated customers $ 286,936 35,612 16,296 637,188 161,845 63,232 1,201,109 Transfers between geographic areas   18,743 1,809 3,661 7,110 7,933 3,576 (42,832 ) - Total revenues $ 305,679 37,421 19,957 644,298 169,778 66,808 (42,832 ) 1,201,109   Net revenues $ 146,905 16,422 11,518 107,109 59,923 19,946 361,823 Operating income $ 38,174 3,899 3,531 38,758 11,854 4,325 100,541 Identifiable assets $ 1,249,106 75,890 44,236 529,571 392,163 128,524 2,589 2,422,079 Capital expenditures $ 4,474 176 277 690 1,221 744 7,582 Depreciation and amortization $ 5,022 353 205 1,896 1,312 607 9,395 Equity $ 1,006,340 43,773 20,618 366,460 148,484 74,499 (31,238 ) 1,628,936