Expeditors Reports Third Quarter 2009 EPS of $.27 Per Share¹

SEATTLE--(BUSINESS WIRE)--Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced quarterly net earnings attributable to shareholders of $57,752,000 for the third quarter of 2009, as compared with $85,565,000 for the same quarter of 2008, a decrease of 33%. Net revenues for the third quarter of 2009 decreased 19% to $346,512,000, as compared with $429,127,000 reported for the third quarter of 2008. Total revenues and operating income were $1,037,327,000 and $96,246,000 in 2009, as compared with $1,564,913,000 and $135,396,000 for the same quarter of 2008, decreases of 34% and 29%, respectively. Diluted net earnings attributable to shareholders per share for the third quarter of 2009 were $.27, as compared with $.39 for the same quarter in 2008, a decrease of 31%. The Company also reported that same store net revenues and operating income decreased 19% and 29%, respectively, for the third quarter of 2009 when compared with 2008.

“Sticking to our core values and ‘walking the walk’ when times are tough provides a tremendously stable springboard from which to expand our customer base, provide technological solutions to our customers and provide opportunities to our people as the business climate improves”

For the nine months ended September 30, 2009, net earnings attributable to shareholders was $171,082,000 as compared with $223,286,000 in 2008, a decrease of 23%. Net revenues for the nine months decreased to $1,013,074,000 from $1,200,780,000 for 2008, down 16%. Total revenues and operating income for the nine months were $2,845,372,000 and $274,647,000 in 2009, as compared with $4,326,489,000 and $353,931,000 for the same period in 2008, decreases of 34% and 22%, respectively. Diluted net earnings attributable to shareholders per share for the first three quarters of 2009 were $.79, as compared with $1.02 for the same period of 2008, a decrease of 23%. Same store net revenues and operating income decreased 16% and 22%, respectively, for the nine months ended September 30, 2009, when compared with the same period of 2008.

“There certainly were significant challenges during the latter part of this quarter as both air and ocean carriers imposed capacity reductions in order to implement very aggressive price increases. While we wouldn’t call it ‘The Perfect Freight Storm,’ the rapidity of these carrier moves created a pricing environment that resulted in our experiencing single digit airfreight yields out of Asia during the first several weeks of September. Ocean yields were also significantly impacted. Market conditions required that we absorb these increases for several weeks as we worked with customers to raise rates in a commercially acceptable manner,” said Peter J. Rose, Chairman and Chief Executive Officer. “On a more positive note, however, year-over-year declines in freight volumes for the month of September (as compared to September 2008), were at the lowest levels we’ve experienced all year. Airfreight tonnage was down 6% while ocean freight container counts were down 17%. Lower yields aside, it was somewhat reassuring to experience freight volumes that, while albeit still negative, seemed to be moving in the right direction,” Rose went on to say.

“While we’ll be the first to acknowledge 2009 has been a tough year, we remain very positive on how we’re positioned for the future, particularly as the global economy gradually strengthens. A strong balance sheet with nearly $1 billion in cash is very stabilizing. With 252 locations throughout the world we’re able to grow market share everywhere we have a network presence. Having not resorted to layoffs, while challenging in the short-term, has allowed our people to maintain that Expeditors’ esprit de corps that we rely on to service our customers and to grow our business over the long-term,” Rose commented. “Sticking to our core values and ‘walking the walk’ when times are tough provides a tremendously stable springboard from which to expand our customer base, provide technological solutions to our customers and provide opportunities to our people as the business climate improves,” Rose concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 183 full-service offices, 65 satellite locations and 4 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.

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.
Financial Highlights
Three months and Nine months ended
September 30, 2009 and 2008
(Unaudited)
(in 000's except share data)
		Three Months Ended September 30,										Nine Months Ended September 30,
			2009			2008		% Decrease				2009			2008		% Decrease
Revenues		$	1,037,327		$	1,564,913		34	%		$	2,845,372		$	4,326,489		34	%
Net revenues		$	346,512		$	429,127		19	%		$	1,013,074		$	1,200,780		16	%
Operating income		$	96,246		$	135,396		29	%		$	274,647		$	353,931		22	%
Net earnings attributable to shareholders		$	57,752		$	85,565		33	%		$	171,082		$	223,286		23	%
Diluted earnings attributable to shareholders per share		$	.27		$	.39		31	%		$	.79		$	1.02		23	%
Basic earnings attributable to shareholders per share		$	.27		$	.40		33	%		$	.81		$	1.05		23	%
Weighted average diluted shares outstanding			216,684,079			218,729,790						216,582,370			219,903,341
Weighted average basic shares outstanding			212,241,480			212,747,871						212,153,404			213,027,420

During the third quarter of 2009, the Company did not open any new offices and closed one satellite office in Port Elizabeth, South Africa.

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 November 6, 2009 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about November 20, 2009.

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 economic trends, improving business climate, positive trends in freight volumes and ability to grow market share. 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, inventory build-up, decreased consumer confidence, volatility in equity markets, energy prices, political changes, or the unpredictable acts of competitors and other risks, risk factors and uncertainties detailed in our Annual and Quarterly Reports filed with the Securities and Exchange Commission.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
		September 30,			December 31,
Assets			2009			2008
Current assets:
Cash and cash equivalents		$	947,269		$	741,028
Short-term investments			629			658
Accounts receivable, net			684,248			788,176
Deferred Federal and state income taxes			7,806			7,986
Other current assets			36,568			35,511
Total current assets			1,676,520			1,573,359
Property and equipment, net			496,203			493,129
Goodwill, net			7,927			7,927
Other intangibles, net			5,380			6,503
Other assets			30,857			19,921
		$	2,216,887		$	2,100,839
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable			486,663			491,823
Accrued expenses, primarily salaries and related costs			150,880			150,487
Federal, state and foreign income taxes			17,593			28,039
Total current liabilities			655,136			670,349
Deferred Federal and state income taxes			41,796			46,574
Shareholders' equity:
Preferred stock; none issued			--			--
Common stock, par value $.01 per share; issued and outstanding 211,984,747 shares at September 30, 2009 and 211,973,377 shares at December 31, 2008			2,120			2,120
Additional paid-in capital			6,751			7,150
Retained earnings			1,503,162			1,372,356
Accumulated other comprehensive income (loss)			13			(15,208	)
Total shareholders' equity			1,512,046			1,366,418
Noncontrolling interest			7,909			17,498
Total equity			1,519,955			1,383,916
		$	2,216,887		$	2,100,839

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
		Three months ended								Nine months ended
		September 30,								September 30,
			2009				2008				2009				2008
Revenues:
Airfreight services		$	457,405			$	703,152			$	1,203,220			$	1,961,797
Ocean freight and ocean services			331,454				567,155				949,380				1,530,420
Customs brokerage and other services			248,468				294,606				692,772				834,272
Total revenues			1,037,327				1,564,913				2,845,372				4,326,489
Operating expenses:
Airfreight consolidation			340,746				553,672				848,131				1,532,454
Ocean freight consolidation			247,733				454,622				704,850				1,234,829
Customs brokerage and other services			102,336				127,492				279,317				358,426
Salaries and related costs			194,743				224,809				571,517				646,159
Rent and occupancy costs			18,183				19,729				54,861				58,538
Depreciation and amortization			9,923				10,222				30,125				30,050
Selling and promotion			6,541				8,881				18,310				28,129
Other			20,876				30,090				63,614				83,973
Total operating expenses			941,081				1,429,517				2,570,725				3,972,558
Operating income			96,246				135,396				274,647				353,931
Interest income			2,214				5,005				8,253				14,884
Interest expense			(325	)			(23	)			(404	)			(169	)
Other, net			1,192				2,225				7,826				3,337
Other income, net			3,081				7,207				15,675				18,052
Earnings before income taxes			99,327				142,603				290,322				371,983
Income tax expense			41,763				56,457				119,575				147,710
Net earnings			57,564				86,146				170,747				224,273
Net earnings attributable to noncontrolling interest			188				(581	)			335				(987	)
Net earnings attributable to shareholders		$	57,752			$	85,565			$	171,082			$	223,286
Diluted earnings attributable to shareholders per share		$	0.27			$	0.39			$	0.79			$	1.02
Basic earnings attributable to shareholders per share		$	0.27			$	0.40			$	0.81			$	1.05
Dividends declared and paid per common share		$	-			$	-			$	0.19			$	0.16
Weighted average diluted shares outstanding			216,684,079				218,729,790				216,582,370				219,903,341
Weighted average basic shares outstanding			212,241,480				212,747,871				212,153,404				213,027,420

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Three months ended								Nine months ended
		September 30,								September 30,
			2009				2008				2009				2008
Operating Activities:
Net earnings		$	57,564			$	86,146			$	170,747			$	224,273
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable			(778	)			1,503				791				930
Deferred income tax (benefit) expense			(6,701	)			1,117				(12,945	)			17,590
Excess tax benefits from stock plans			(246	)			(485	)			(5,381	)			(9,880	)
Stock compensation expense			10,794				11,513				29,065				34,116
Depreciation and amortization			9,923				10,222				30,125				30,050
Loss (gain) on sale of assets			8				(46	)			(2	)			(651	)
Other			365				396				1,092				1,328
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			(94,025	)			(51,422	)			120,318				(83,446	)
Increase in other current assets			(803	)			(2,544	)			(2,126	)			(1,867	)
Increase (decrease) in accounts payable and accrued expenses			71,711				13,796				(28,788	)			95,898
(Decrease) increase in income taxes payable, net			(5,350	)			21,482				(3,066	)			(1,955	)
Net cash provided by operating activities			42,462				91,678				299,830				306,386
Investing Activities:
Decrease (increase) in short-term investments			17				(6	)			48				210
Purchase of property and equipment			(9,514	)			(24,631	)			(25,336	)			(49,157	)
Proceeds from sale of property and equipment			48				106				125				287
Prepayment on long-term land lease			(1,898	)			-				(9,242	)			-
Other			438				635				(1,153	)			690
Net cash used in investing activities			(10,909	)			(23,896	)			(35,558	)			(47,970	)
Financing Activities:
Proceeds from issuance of common stock			25,107				26,737				42,511				46,888
Repurchases of common stock			(34,103	)			(75,332	)			(77,075	)			(144,920	)
Excess tax benefits from stock plans			246				485				5,381				9,880
Dividends paid			-				2				(40,276	)			(34,161	)
Distributions to noncontrolling interests			(1,009	)			(772	)			(1,009	)			(879	)
Purchases of noncontrolling interest			-				-				(2,122	)			-
Net cash used in financing activities			(9,759	)			(48,880	)			(72,590	)			(123,192	)
Effect of exchange rate changes on cash			9,493				(26,041	)			14,559				(13,474	)
Increase (decrease) in cash and cash equivalents			31,287				(7,139	)			206,241				121,750
Cash and cash equivalents at beginning of period			915,982				703,488				741,028				574,599
Cash and cash equivalents at end of period		$	947,269			$	696,349			$	947,269			$	696,349
Interest and taxes paid:
Interest		$	317				20			$	397				166
Income taxes			46,607				32,114				121,717				123,999

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
		United States			Other North America		Latin America		Asia		Europe and Africa		Middle East and India		Austral- asia		Elimi- nations			Consoli- dated
Three months ended
September 30, 2009
Revenues from unaffiliated customers		$	246,066		32,214		16,552		516,897		147,354		60,269		17,975					1,037,327
Transfers between geographic areas			18,293		1,716		3,461		4,227		6,487		3,738		2,595		(40,517	)		-
Total revenues		$	264,359		33,930		20,013		521,124		153,841		64,007		20,570		(40,517	)		1,037,327
Net revenues		$	139,232		16,667		10,960		89,490		57,857		20,771		11,535					346,512
Operating income		$	37,502		4,090		2,611		33,303		9,650		5,424		3,666					96,246
Identifiable assets		$	1,135,327		73,500		37,216		435,584		376,050		121,079		35,518		2,613			2,216,887
Capital expenditures		$	7,656		186		171		248		506		588		159					9,514
Depreciation and amortization		$	5,048		358		245		1,868		1,593		646		165					9,923
Equity		$	1,656,409		44,455		14,982		308,304		137,278		70,531		22,487		(734,491	)		1,519,955
Three months ended
September 30, 2008
Revenues from unaffiliated customers		$	338,662		43,225		21,274		852,255		215,018		72,904		21,575					1,564,913
Transfers between geographic areas			30,807		2,883		4,327		5,624		11,966		4,757		2,307		(62,671	)		-
Total revenues		$	369,469		46,108		25,601		857,879		226,984		77,661		23,882		(62,671	)		1,564,913
Net revenues		$	166,045		19,199		14,069		119,309		74,089		23,270		13,146					429,127
Operating income		$	40,847		4,586		3,700		58,111		16,804		6,867		4,481					135,396
Identifiable assets		$	980,475		79,031		55,979		527,520		467,859		116,698		38,139		4,636			2,270,337
Capital expenditures		$	9,219		658		171		9,861		3,748		925		49					24,631
Depreciation and amortization		$	5,418		371		316		1,686		1,611		600		220					10,222
Equity		$	1,488,514		40,254		26,464		397,491		175,093		57,088		25,735		(853,886	)		1,356,753
Nine months ended
September 30, 2009
Revenues from unaffiliated customers		$	704,962		91,482		47,486		1,373,093		415,479		167,848		45,022					2,845,372
Transfers between geographic areas			54,847		5,340		9,972		11,863		19,086		11,005		7,448		(119,561	)		-
Total revenues		$	759,809		96,822		57,458		1,384,956		434,565		178,853		52,470		(119,561	)		2,845,372
Net revenues		$	399,614		47,718		32,645		275,680		165,623		61,229		30,565					1,013,074
Operating income		$	95,483		11,512		8,691		107,424		26,417		15,362		9,758					274,647
Identifiable assets		$	1,135,327		73,500		37,216		435,584		376,050		121,079		35,518		2,613			2,216,887
Capital expenditures		$	19,268		477		582		1,259		1,847		1,486		417		-			25,336
Depreciation and amortization		$	15,828		1,031		729		5,714		4,490		1,860		473		-			30,125
Equity		$	1,656,409		44,455		14,982		308,304		137,278		70,531		22,487		(734,491	)		1,519,955
Nine months ended
September 30, 2008
Revenues from unaffiliated customers		$	961,377		119,691		63,269		2,300,191		609,879		207,261		64,821					4,326,489
Transfers between geographic areas			81,953		7,579		11,060		16,364		33,725		13,293		6,599		(170,573	)		-
Total revenues		$	1,043,330		127,270		74,329		2,316,555		643,604		220,554		71,420		(170,573	)		4,326,489
Net revenues		$	470,573		53,882		39,246		322,738		212,148		64,223		37,970					1,200,780
Operating income		$	102,254		11,779		10,499		152,878		46,600		17,580		12,341					353,931
Identifiable assets		$	980,475		79,031		55,979		527,520		467,859		116,698		38,139		4,636			2,270,337
Capital expenditures		$	20,022		1,848		940		16,371		7,042		2,532		402					49,157
Depreciation and amortization		$	16,223		1,011		918		4,439		5,060		1,683		716					30,050
Equity		$	1,488,514		40,254		26,464		397,491		175,093		57,088		25,735		(853,886	)		1,356,753