EXPD Expeditors International of Washington Inc

Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings attributable to shareholders of $92,843,000 for the fourth quarter of 2011, as compared with $96,502,000 for the same quarter of 2010, a decrease of (4)%. Net revenues for the fourth quarter of 2011 increased 5% to $476,155,000 as compared with $453,362,000 reported for the fourth quarter of 2010. Total revenues and operating income were $1,501,914,000 and $155,064,000 in 2011, as compared with $1,582,135,000 and $148,572,000 for the same quarter of 2010, a decrease of (5)% and an increase of 4%, respectively. Diluted net earnings attributable to shareholders per share for the fourth quarter were $.43, as compared with $.45 for the same quarter in 2010, a decrease of (4)%.

For the year ended December 31, 2011, net earnings attributable to shareholders was $385,679,000, as compared with $344,172,000 in 2010, an increase of 12%. Net revenues for the year increased to $1,896,477,000 from $1,692,786,000 for 2010, up 12%. Total revenues and operating income for the year were $6,150,498,000 and $618,327,000 in 2011, as compared with $5,967,573,000 and $547,230,000 for the same period in 2010, increases of 3% and 13%, respectively. Diluted net earnings attributable to shareholders per share for the year ended December 31, 2011 were $1.79, as compared with $1.59 for the same period of 2010, an increase of 13%.

“From a strategic perspective, our 2011 fourth quarter financial results showed all the things we think are important,” said Peter J. Rose, Chairman and Chief Executive Officer. “Operating income as a percentage of net revenue, at 32.6%, remained well above 30% for the seventh straight quarter while salaries as a percentage of net revenue were very much in line with our historical expectations. All in all, we think the things we can control most, we controlled best. From a tactical perspective, however, we would like to have seen stronger freight volumes as the customary real peak season surge never materialized. The lack of a peak season created irregular demand throughout the quarter. While this resulted in some intermittent spot buying opportunities in both the air and ocean freight markets, ultimately they were not sufficient to compensate for relatively weaker freight demand. Despite this quarters unpredictable shipping patterns, we still managed to grow both net revenue and operating income 5% and 4% respectively. That's something we take great comfort in. For the year ended 2011, net revenue and operating income increased 12% and 13% respectively. That is the kind of annual performance we don't feel particularly compelled to apologize for…particularly in these times,” Rose continued.

“Our third quarter 2011 earnings release highlighted our concerns about global trends for the remainder for 2011 and 2012. While 2011 was a record year, and we are generally optimistic about 2012, the underlying flow of goods both in the global economy and throughout our network in January still give us some cause to reiterate those concerns in the near term. That said, given the outstanding talents and abilities of our people and the support of both our customers and service providers, we remain very confident that we have the wherewithal to successfully address any near term challenges that may occur by staying true to our proven, long-term values and objectives,” concluded Rose.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 185 full-service offices and 64 satellite locations 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.

1 Diluted earnings attributable to shareholders per share.

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

Expeditors International of Washington, Inc. 4th Quarter 2011 Earnings Release, February 21, 2012   Financial Highlights for the Three months and Years ended December 31, 2011 and 2010 (Unaudited)

(in 000's of US dollars except share data)

        Three months ended             December 31, Years ended December 31,     %     Increase % 2011 2010 (Decrease) 2011 2010 Increase Revenues $ 1,501,914 $ 1,582,135 (5)% $ 6,150,498 $ 5,967,573 3% Net revenues $ 476,155 $ 453,362 5% $ 1,896,477 $ 1,692,786 12% Operating income $ 155,064 $ 148,572 4% $ 618,327 $ 547,230 13% Net earnings attributable to shareholders $ 92,843 $ 96,502 (4)% $ 385,679 $ 344,172 12% Diluted earnings attributable to shareholders $ .43 $ .45 (4)% $ 1.79 $ 1.59 13% Basic earnings attributable to shareholders $ .44 $ .45 (2)% $ 1.82 $ 1.62 12% Diluted weighted average shares outstanding 214,159,723 216,587,468 215,033,580 216,446,656 Basic weighted average shares outstanding 211,988,482 212,217,035 212,117,511 212,283,966         Employee headcount as of December 31, 2011     2010 North America 4,666 4,400 Asia Pacific 4,083 3,864 Europe and Africa 2,262 2,074 Middle East 1,250 1,169 South America 645 607 Information Systems 558 559 Corporate 228 197 Total 13,692 12,870         Year-over-year percentage increase (decrease) in:     Ocean freight Airfreight kilos FEU 2011 October (14)% 2% November (6)% 1% December (9)% 7% Quarter (10)% 3%  

During the fourth quarter of 2011, the Company closed one satellite office in Detroit-Ambassador Bridge, United States.

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 maintain operating income as a percentage of net revenue over 30%, ability to benefit in the future from spot buying opportunities, ability to grow net revenue and operating income, changes in consumer confidence in freight volumes, and ability to succeed in 2012, both from a near and long-term perspective. 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 actions or changes or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual Report as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share data) (Unaudited)           December 31, December 31, 2011 2010

Assets

Current Assets: Cash and cash equivalents $ 1,294,356 $ 1,084,465 Short-term investments 472 524 Accounts receivable, net 934,752 1,003,884 Deferred Federal and state income taxes 10,415 8,706 Other current assets 46,888   42,776 Total current assets 2,286,883   2,140,355 Property and equipment, net 538,806 498,648 Goodwill, net 7,927 7,927 Other intangibles, net 2,630 3,716 Other assets, net 30,581   28,533 $ 2,866,827   $ 2,679,179

Liabilities and Equity

Current Liabilities: Accounts payable 606,628 652,161 Accrued expenses, primarily salaries and related costs 169,445 177,869 Federal, state and foreign income taxes 20,072   31,948 Total current liabilities 796,145   861,978 Deferred Federal and state income taxes 60,613 69,047 Commitments and contingencies Shareholders’ Equity: Preferred stock; none issued — — Common stock, par value $.01 per share; issued and outstanding 212,003,662 shares at December 31, 2011 and 212,047,774 shares at December 31, 2010 2,120 2,120 Additional paid-in capital 13,260 13,412 Retained earnings 1,991,222 1,717,249 Accumulated other comprehensive (loss) income (2,964 ) 8,125 Total shareholders’ equity 2,003,638   1,740,906 Noncontrolling interest 6,431   7,248 Total equity 2,010,069   1,748,154 $ 2,866,827   $ 2,679,179   EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except share data) (Unaudited)                   Three months ended Twelve months ended December 31, December 31, 2011 2010 2011 2010 Revenues: Airfreight services $ 705,744 $ 778,009 $ 2,893,474 $ 2,821,828 Ocean freight and ocean services 441,102 481,263 1,878,595 1,955,400 Customs brokerage and other services   355,068     322,863     1,378,429     1,190,345   Total revenues   1,501,914     1,582,135     6,150,498     5,967,573   Operating Expenses: Airfreight consolidation 534,159 604,309 2,193,122 2,181,598 Ocean freight consolidation 333,567 379,250 1,443,170 1,569,877 Customs brokerage and other services 158,033 145,214 617,729 523,312 Salaries and related costs 247,917 237,822 993,358 894,132 Rent and occupancy costs 20,578 19,988 84,665 77,209 Depreciation and amortization 9,146 9,310 36,776 36,900 Selling and promotion 10,447 9,593 38,974 32,055 Other   33,003     28,077     124,377     105,260   Total operating expenses   1,346,850     1,433,563     5,532,171     5,420,343   Operating income   155,064     148,572     618,327     547,230     Interest income 2,715 2,064 10,235 7,002 Interest expense (248 ) (198 ) (970 ) (576 ) Other, net   (2,330 )   1,181     10,436     10,412   Other income (expense), net   137     3,047     19,701     16,838   Earnings before income taxes 155,201 151,619 638,028 564,068 Income tax expense   62,061     55,171     251,785     219,863   Net earnings   93,140     96,448     386,243     344,205  

Less net earnings (losses) attributable to the noncontrolling interest

  297     (54 )   564     33   Net earnings attributable to shareholders $ 92,843   $ 96,502   $ 385,679   $ 344,172   Diluted earnings attributable to shareholders per share $ .43   $ .45   $ 1.79   $ 1.59   Basic earnings attributable to shareholders per share $ .44   $ .45   $ 1.82   $ 1.62   Dividends declared and paid per common share $ .25   $ .20   $ .50   $ .40   Weighted average diluted shares outstanding   214,159,723     216,587,468     215,033,580     216,446,656   Weighted average basic shares outstanding   211,988,482     212,217,035     212,117,511     212,283,966     EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)                   Three months ended Twelve months ended December 31, December 31, 2011 2010 2011 2010 Operating Activities: Net earnings $ 93,140 $ 96,448 $ 386,243 $ 344,205 Adjustments to reconcile net earnings to net cash provided by operating activities: Provision for losses on accounts receivable 166 305 1,327 3,414 Deferred income tax expense (benefit) 5,598 8,048 (4,065 ) 10,569 Excess tax benefits from stock plans (232 ) (12,274 ) (5,300 ) (23,863 ) Stock compensation expense 10,832 10,696 44,278 43,743 Depreciation and amortization 9,146 9,310 36,776 36,900 Loss (gain) on sale of assets 414 140 360 (321 ) Other 308 304 2,136 1,536 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 58,717 77,947 46,915 (188,823 ) (Increase) decrease in other current assets (1,620 ) 1,484 (7,483 ) (1,475 ) (Decrease) increase in accounts payable and accrued expenses (54,879 ) (60,302 ) (40,819 ) 130,138 (Decrease) increase in income taxes payable, net (13,654 ) 2,725   (3,237 ) 39,495   Net cash provided by operating activities 107,936   134,831   457,131   395,518   Investing Activities: Decrease in short-term investments 6 81 29 188 Purchase of property and equipment (19,261 ) (15,755 ) (78,115 ) (42,408 ) Proceeds from sale of property and equipment 84 92 193 360 Prepayment on long-term leases, net — — (936 ) — Other 253   (632 ) (1,510 ) (319 ) Net cash used in investing activities (18,918 ) (16,214 ) (80,339 ) (42,179 ) Financing Activities: Proceeds from issuance of common stock 2,055 38,826 56,646 99,784 Repurchases of common stock (3,499 ) (106,862 ) (112,071 ) (246,312 ) Excess tax benefits from stock plans 232 12,274 5,300 23,863 Dividends paid (52,997 ) (42,475 ) (106,011 ) (84,872 ) Distribution to noncontrolling interest (133 ) (88 ) (955 ) (1,051 ) Net cash used in financing activities (54,342 ) (98,325 ) (157,091 ) (208,588 ) Effect of exchange rate changes on cash and cash equivalents (1,134 ) 6,947   (9,810 ) 13,785   Increase in cash and cash equivalents 33,542 27,239 209,891 158,536 Cash and cash equivalents at beginning of period 1,260,814   1,057,226   1,084,465   925,929   Cash and cash equivalents at end of period $ 1,294,356   $ 1,084,465   $ 1,294,356   $ 1,084,465   Interest and taxes paid: Interest $ 231 $ 57 $ 296 $ 110 Income taxes 83,454 42,369 266,621 171,618   EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information

(In thousands) (Unaudited)

            OTHER                 MIDDLE         UNITED NORTH LATIN ASIA EUROPE and EAST and ELIMI- CONSOLI- STATES AMERICA AMERICA PACIFIC AFRICA INDIA NATIONS DATED Three months ended December 31, 2011: Revenues from unaffiliated customers $ 383,830 48,839 19,490 761,092 218,074 70,589 — 1,501,914 Transfers between geographic areas 24,639 2,641 5,356 10,159 10,570 4,592 (57,957 ) — Total revenues $ 408,469 51,480 24,846 771,251 228,644 75,181 (57,957 ) 1,501,914 Net revenues $ 183,381 24,367 14,673 150,262 76,950 26,522 — 476,155 Operating income $ 41,652 10,314 5,056 68,971 19,048 10,023 — 155,064 Identifiable assets $ 1,521,657 86,020 48,221 667,171 401,518 141,379 861 2,866,827 Capital expenditures $ 8,404 199 166 8,760 1,288 444 — 19,261 Depreciation and amortization $ 5,222 208 226 1,605 1,400 485 — 9,146 Equity $ 1,285,812 49,571 27,346 448,613 145,998 85,605 (32,876 ) 2,010,069 Three months ended December 31, 2010: Revenues from unaffiliated customers $ 368,584 43,083 19,010 867,844 203,958 79,656 — 1,582,135 Transfers between geographic areas 26,804   3,114 4,850 8,976 11,371 4,266 (59,381 ) — Total revenues $ 395,388 46,197 23,860 876,820 215,329 83,922 (59,381 ) 1,582,135 Net revenues $ 177,438 20,322 13,509 146,191 72,528 23,374 — 453,362 Operating income $ 45,968 7,204 4,830 64,006 19,245 7,319 — 148,572 Identifiable assets $ 1,343,098 95,298 51,326 612,085 432,019 144,043 1,310 2,679,179 Capital expenditures $ 4,991 157 332 1,776 7,968 531 — 15,755 Depreciation and amortization $ 5,372 321 241 1,885 940 551 — 9,310 Equity $ 1,089,053 46,601 27,462 371,610 160,428 84,456 (31,456 ) 1,748,154   Twelve months ended December 31, 2011: Revenues from unaffiliated customers $ 1,540,477 189,843 82,312 3,144,641 891,185 302,040 — 6,150,498 Transfers between geographic areas 101,738 11,095 21,222 40,012 43,359 17,897 (235,323 ) — Total revenues $ 1,642,215 200,938 103,534 3,184,653 934,544 319,937 (235,323 ) 6,150,498 Net revenues $ 732,299 90,432 59,968 605,151 307,471 101,156 — 1,896,477 Operating income $ 210,702 29,209 19,151 258,952 72,248 28,065 — 618,327 Identifiable assets $ 1,521,657 86,020 48,221 667,171 401,518 141,379 861 2,866,827 Capital expenditures $ 23,219 1,122 628 25,295 25,856 1,995 — 78,115 Depreciation and amortization $ 20,037 1,038 999 7,243 5,414 2,045 — 36,776 Equity $ 1,285,812 49,571 27,346 448,613 145,998 85,605 (32,876 ) 2,010,069 Twelve months ended December 31, 2010: Revenues from unaffiliated customers $ 1,348,259 163,750 74,327 3,349,960 729,022 302,255 — 5,967,573 Transfers between geographic areas 99,547   10,836 16,932 32,837 40,778 16,184 (217,114 ) — Total revenues $ 1,447,806 174,586 91,259 3,382,797 769,800 318,439 (217,114 ) 5,967,573 Net revenues $ 666,669 77,079 50,937 543,869 264,663 89,569 — 1,692,786 Operating income $ 198,393 23,521 15,985 222,944 63,115 23,272 — 547,230 Identifiable assets $ 1,343,098 95,298 51,326 612,085 432,019 144,043 1,310 2,679,179 Capital expenditures $ 18,128 574 1,320 5,743 14,383 2,260 — 42,408 Depreciation and amortization $ 20,125 1,344 880 7,511 4,661 2,379 — 36,900 Equity $ 1,089,053 46,601 27,462 371,610 160,428 84,456 (31,456 ) 1,748,154