Expeditors Reports First Quarter 2013 EPS of $.39 Per Share 1

Expeditors Reports First Quarter 2013 EPS of $.39 Per Share1

SEATTLE--(BUSINESS WIRE)-- Expeditors International of Washington, Inc. (NAS: EXPD) today announced net earnings attributable to shareholders of $80,315,000 for the first quarter of 2013, as compared with $76,707,000for the same quarter of 2012, an increase of 5%. Net revenues and total revenues for the first quarter of 2013 decreased marginally to $445,284,000 and $1,410,485,000 as compared with $446,571,000 and $1,411,370,000, respectively, for the same quarter in 2012. Operating income was $128,518,000in the first quarter of 2013, as compared with $125,271,0002 for the same quarter of 2012, an increase of 3%. Diluted net earnings attributable to shareholders per share for the first quarter were $.39, as compared with $.36 for the same quarter in 2012, an increase of 8%.

"There is a certain stability in these quarterly results that may not be as apparent on the surface as they were re-assuring to us here," said Peter J. Rose, Chairman and Chief Executive Officer. "We had a strong finish in March and after having swum in deep waters for so long, it's somewhat invigorating to feel that your feet might actually be touching ground. We still have a ways to go, but despite the continued and well-publicized slide in global PC shipments, historically a large part of our tech business, our 2013 first quarter year-over-year airfreight tonnages were actually up, albeit marginally. This was the second consecutive quarter we've had year-over-year airfreight tonnage increases. While pricing was still somewhat volatile, it was great to see some sustained traction in year-over-year airfreight tonnage growth," Rose went on to say.


"As we look forward to the remainder of 2013, amid the obvious challenges, we do see cause for optimism. The same uncertainty that haunted the global economy in 2012 hasn't entirely gone away. That said, we feel increasingly confident about our ability to address these challenges," Rose continued. "We try to be very realistic here and not allow our perspectives to be overly swayed, either positively or negatively, by conventional financial media wisdom du jour. As we assess our current state, we feel much better about 2013 at the end of the first quarter of 2013 than we did about 2012 at the end of the first quarter of 2012. We have control over our expenses, we're 3% more profitable in our branch operations, and the investments we've made in our people and in our systems continue to build and strengthen the cultural foundation we rely on to create long-term stability. As always, we're grateful to our people for their steadfastness and their commitment to our customers and to each other. That's the kind of commitment our culture fosters and predictably, that's what gets us through tough times," Rose concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 188 full-service offices and numerous satellite locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, domestic time definite transportation services, purchase order management and customized logistics solutions.

1 Diluted earnings attributable to shareholders per share.

2 Includes a European Commission fine of $5.5 million.

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

Expeditors International of Washington, Inc.

First Quarter 2013 Earnings Release, May 1, 2013

Financial Highlights for the Three months ended March 31, 2013 and 2012 (Unaudited)

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

Three months ended March 31,

2013

2012

% Change

Revenues

$

1,410,485

$

1,411,370

%

Net revenues1

$

445,284

$

446,571

%

Operating income

$

128,518

$

125,271

3

%

Net earnings attributable to shareholders

$

80,315

$

76,707

5

%

Diluted earnings attributable to shareholders

$

.39

$

.36

8

%

Basic earnings attributable to shareholders

$

.39

$

.36

8

%

Diluted weighted average shares outstanding

207,613,863

214,199,510

Basic weighted average shares outstanding

206,475,095

212,097,662

1Revenues less directly related operating expenses.

Employee headcount as of March 31,

2013

2012

North America

4,705

4,702

Asia Pacific

3,867

4,006

Europe and Africa

2,340

2,292

Middle East and India

1,216

1,229

Latin America

665

644

Information Systems

628

578

Corporate

273

234

Total

13,694

13,685

Year-over-year percentage increase (decrease) in:

Airfreight kilos

Ocean freight FEU

2013

January

16

%

(3

)%

February

(11

)%

(5

)%

March

(1

)%

(4

)%

Quarter

.4

%

(4

)%

Investors may submit written questions via e-mail to:investor@expeditors.com. Questions received by the end of business on May 3, 2013 will be considered in management's 8-K "Responses to Selected Questions" expected to be filed on or about May 10, 2013.

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 stability of future quarter results; ability to increase airfreight tonnage and maintain pricing levels; ability to control expenses; ability to improve branch profitability; and ability to make strategic investments in people and systems to create long-term value. 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)

March 31,
2013

December 31,
2012

Assets

Current Assets:

Cash and cash equivalents

$

1,394,687

$

1,260,842

Accounts receivable, net

982,119

1,031,376

Deferred Federal and state income taxes

11,867

12,102

Other current assets

42,153

53,279

Total current assets

2,430,826

2,357,599

Property and equipment, net

546,698

556,204

Goodwill

7,927

7,927

Other assets, net

32,348

32,395

$

3,017,799

$

2,954,125

Liabilities and Equity

Current Liabilities:

Accounts payable

629,190

641,593

Accrued expenses, primarily salaries and related costs

175,212

178,995

Federal, state and foreign income taxes

27,278

21,970

Total current liabilities

831,680

842,558

Deferred Federal and state income taxes

81,498

78,997

Commitments and contingencies

Shareholders' Equity:

Preferred stock; none issued

Common stock, par value $.01 per share; issued and outstanding 206,475,743 shares at March 31, 2013 and 206,392,013 shares at December 31, 2012

2,065

2,064

Additional paid-in capital

5,962

1,283

Retained earnings

2,098,933

2,018,618

Accumulated other comprehensive (loss) income

(4,265

)

5,734

Total shareholders' equity

2,102,695

2,027,699

Noncontrolling interest

1,926

4,871

Total equity

2,104,621

2,032,570

$

3,017,799

$

2,954,125

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES


Condensed Consolidated Statements of Earnings

(In thousands, except share data)

(Unaudited)

Three months ended

March 31,

2013

2012

Revenues:

Airfreight services

$

620,374

$

638,912

Ocean freight and ocean services

445,479

434,336

Customs brokerage and other services

344,632

338,122

Total revenues

1,410,485

1,411,370

Operating Expenses:

Airfreight consolidation

464,919

481,043

Ocean freight consolidation

344,923

331,954

Customs brokerage and other services

155,359

151,802

Salaries and related costs

248,417

246,132

Rent and occupancy costs

21,657

21,176

Depreciation and amortization

11,278

9,545

Selling and promotion

7,257

8,663

Other

28,157

35,784

Total operating expenses

1,281,967

1,286,099

Operating income

128,518

125,271

Interest income

3,243

3,360

Other, net

1,531

477

Other income, net

4,774

3,837

Earnings before income taxes

133,292

129,108

Income tax expense

52,682

52,386

Net earnings

80,610

76,722

Less net earnings attributable to the noncontrolling interest

295

15

Net earnings attributable to shareholders

$

80,315

$

76,707

Diluted earnings attributable to shareholders per share

$

.39

$

.36

Basic earnings attributable to shareholders per share

$

.39

$

.36

Weighted average diluted shares outstanding

207,613,863

214,199,510

Weighted average basic shares outstanding

206,475,095

212,097,662

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES


Condensed Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

Three months ended

March 31,

2013

2012

Operating Activities:

Net earnings

$

80,610

$

76,722

Adjustments to reconcile net earnings to net cash from operating activities:

Provision for losses (recoveries) on accounts receivable

941

(467

)

Deferred income tax expense

7,122

5,481

Excess tax benefits from stock plans

(1,099

)

(3,426

)

Stock compensation expense

11,005

10,600

Depreciation and amortization

11,278

9,545

Other

208

217

Changes in operating assets and liabilities:

Decrease in accounts receivable

38,856

12,968

(Increase) decrease in other current assets

(485

)

1,924

(Decrease) increase in accounts payable and accrued expenses

(1,390

)

13,559

Increase in income taxes payable, net

18,218

20,274

Net cash from operating activities

165,264

147,397

Investing Activities:

Decrease (increase) in short-term investments, net

38

(15,780

)

Purchase of property and equipment

(10,068

)

(17,088

)

Other, net

(444

)

470

Net cash from investing activities

(10,474

)

(32,398

)

Financing Activities:

Proceeds from issuance of common stock

10,929

12,920

Repurchases of common stock

(17,681

)

(21,865

)

Excess tax benefits from stock plans

1,099

3,426

Purchase of noncontrolling interest

(7,730

)

Net cash from financing activities

(13,383

)

(5,519

)