Expeditors Announces 2010 Fourth Quarter Earnings Per Share of $.45 1

SEATTLE--(BUSINESS WIRE)--Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced quarterly total revenues and operating income of $1,582,135,000 and $148,572,000 as compared with $1,246,911,000 and $110,354,000 for the same quarter of 2009, an increase of 27% and 35%, respectively. Net earnings attributable to shareholders were $96,502,000 for the fourth quarter of 2010, compared with $69,135,000 for the same quarter of 2009, an increase of 40%. Net revenues for the fourth quarter of 2010 increased 23% to $453,362,000 as compared with $369,712,000 reported for the fourth quarter of 2009. Diluted net earnings attributable to shareholders per share for the fourth quarter were $.45 as compared with $.32 for the same quarter in 2009, an increase of 41%. The Company also reported that same store net revenues and operating income increased 23% and 35%, respectively, for the fourth quarter of 2010 when compared with 2009.

For the year ended December 31, 2010, total revenues and operating income were $5,967,573,000 and $547,230,000 as compared with $4,092,283,000 and $385,001,000 for the same period in 2009, increases of 46% and 42%, respectively. Net earnings attributable to shareholders rose to $344,172,000 from $240,217,000 in 2009, an increase of 43%. Net revenues for the year increased to $1,692,786,000 from $1,382,786,000 for 2009, up 22%. Diluted net earnings attributable to shareholders per share for the year 2010 were $1.59 as compared with $1.11 for the same period of 2009, a 43% increase. Same store net revenues and operating income increased 22% and 42%, respectively, for the year ended December 31, 2010, when compared with the same period of 2009.

“What a difference a year makes! Last year we closed our 2009 fourth quarter earnings release by saying ‘Having proven our mettle in 2009, we’re excited about 2010.’ How prophetic those words turned out to be,” said Peter J. Rose, Chairman and Chief Executive Officer. “Our 2010 was absolutely outstanding by any measure and this fourth quarter was, simply put, a great ending to an incredible year. The fourth quarter was also remarkable in that, despite handling the large year-over-year increases in shipment and clearance activity, none of the anomalies that can occur in theses kinds of environments reared their ugly heads. The competitive market mechanisms worked as close to perfect as we can remember experiencing them. Our people successfully handled some amazing volumes. Because of our no-layoff policy in 2009, we had the capacity and the experience to absorb anything 2010 threw at us,” Rose went on to say.

“The fourth quarter, just like all of 2010, was a classic case study of what happens when you don’t panic, when you trust in your people and your culture and when you rely on your proven business model. If we had lost our confidence and succumbed to the myriad of pressures we encountered in 2009, we might well have joined the ‘lemming layoff brigade.’ Had we done that, we would not have had the staying power to see our way through the volume challenges, and the corresponding opportunities, that presented themselves in 2010. Experience and tenure is what really pays off in these situations, particularly if you have the confidence to lead…which fortunately, our people did. This wasn’t our first recession, it was merely our worst. We learned from experience that a recession is the least costly time to make investments. We have always thought that recessionary investments, particularly those in technology, productivity and process improvement, have higher rates of return, as the economy turns....and indeed they did. Finally, we were grateful for the opportunity to show how much we truly appreciate and value our greatest assets, our people…and that is why they’re still here servicing more customers and creating value for our shareholders! And yes, we’re excited for whatever challenges and opportunities will come our way in 2011,” 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.

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 Year ended
December 31, 2010 and 2009
(Unaudited)
(in 000's except share data)
	Three months ended December 31,						Year ended December 31,
					%						%
	2010		2009		Increase		2010		2009		Increase
Revenues	$	1,582,135	$	1,246,911	27	%	$	5,967,573	$	4,092,283	46	%
Net revenues	$	453,362	$	369,712	23	%	$	1,692,786	$	1,382,786	22	%
Operating income	$	148,572	$	110,354	35	%	$	547,230	$	385,001	42	%
Net earnings attributable to shareholders^1	$	96,502	$	69,135	40	%	$	344,172	$	240,217	43	%
Diluted earnings attributable to shareholders per share	$	.45	$	.32	41	%	$	1.59	$	1.11	43	%
Basic earnings attributable to shareholders per share	$	.45	$	.33	36	%	$	1.62	$	1.13	43	%
Weighted average diluted shares outstanding		216,587,468	216,378,536				216,446,656		216,533,240
Weighted average basic shares outstanding		212,217,035	211,992,092				212,283,966		212,112,744
_______________________
^1The Company’s consolidated effective tax rate was lower in the fourth quarter and year 2010 as compared to the same periods in 2009 primarily as a result of a higher tax benefit received for disqualified dispositions of incentive stock options in 2010.

During the fourth quarter of 2010, the Company opened one full-service office in Curitiba, Brazil and one satellite office in Belo Horizonte, Brazil. The Company closed one satellite office in Lewiston, New York.

Investors may submit written questions via e-mail to: [e-mail]

Or by fax to: [phone]

Questions received by the end of business on February 25, 2011 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about March 4, 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 economic trends, capacity to absorb additional volumes, positive trends in business volume, ability to benefit from opportunities in 2011, ability to continue our culture and business model, ability to realize higher rates of return from investments in technology, productivity, and process improvement, any future tax benefits from disqualified dispositions of incentive stock options and ability to create shareholder 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 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)
		December 31,		December 31,
Assets		2010		2009
Current assets:
	Cash and cash equivalents	$	1,084,465	$	925,929
	Short-term investments		524		655
	Accounts receivable, net		1,003,884		810,369
	Deferred Federal and state income taxes		8,706		8,338
	Other current assets		42,776		42,539
	Total current assets		2,140,355		1,787,830
Property and equipment, net			498,648		495,701
Goodwill, net			7,927		7,927
Other intangibles, net			3,716		4,938
Other assets, net			28,533		27,326
		$	2,679,179	$	2,323,722
Liabilities and Equity
Current liabilities:
	Accounts payable		652,161		546,675
	Accrued expenses, primarily salaries and related costs		177,869		145,545
	Federal, state and foreign income taxes		31,948		16,166
	Total current liabilities		861,978		708,386
Deferred Federal and state income taxes			69,047		53,989
Commitments and contingencies
Shareholders' equity:
	Preferred stock; none issued		--		--
	Common stock, par value $.01 per share; issued and outstanding 212,047,774 shares at December 31, 2010 and 212,025,494 shares at December 31, 2009		2,120		2,120
	Additional paid-in capital		13,412		18,265
	Retained earnings		1,717,249		1,532,018
	Accumulated other comprehensive income		8,125		604
	Total shareholders' equity		1,740,906		1,553,007
	Noncontrolling interest		7,248		8,340
	Total equity		1,748,154		1,561,347
		$	2,679,179	$	2,323,722

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,
		2010			2009			2010			2009
Revenues:
Airfreight services		$	778,009		$	628,097		$	2,821,828		$	1,831,317
Ocean freight and ocean services			481,263			348,305			1,955,400			1,297,685
Customs brokerage and other services			322,863			270,509			1,190,345			963,281
	Total revenues		1,582,135			1,246,911			5,967,573			4,092,283
Operating expenses:
Airfreight consolidation			604,309			493,711			2,181,598			1,341,842
Ocean freight consolidation			379,250			268,612			1,569,877			973,462
Customs brokerage and other services			145,214			114,876			523,312			394,193
Salaries and related costs			237,822			202,697			894,132			774,214
Rent and occupancy costs			19,988			19,463			77,209			74,324
Depreciation and amortization			9,310			9,910			36,900			40,035
Selling and promotion			9,593			7,985			32,055			26,295
Other			28,077			19,303			105,260			82,917
	Total operating expenses		1,433,563			1,136,557			5,420,343			3,707,282
	Operating income		148,572			110,354			547,230			385,001
Interest income			2,064			1,924			7,002			10,177
Interest expense			(198	)		(95	)		(576	)		(499	)
Other, net			1,181			367			10,412			8,193
	Other income, net		3,047			2,196			16,838			17,871
Earnings before income taxes			151,619			112,550			564,068			402,872
Income tax expense			55,171			42,900			219,863			162,475
	Net earnings		96,448			69,650			344,205			240,397
Less: net earnings attributable to noncontrolling interest			(54	)		515			33			180
	Net earnings attributable to shareholders	$	96,502		$	69,135		$	344,172		$	240,217
Diluted earnings attributable to shareholders per share		$	0.45		$	0.32		$	1.59		$	1.11
Basic earnings attributable to shareholders per share		$	0.45		$	0.33		$	1.62		$	1.13
Dividends declared and paid per common share		$	0.20		$	0.19		$	0.40		$	0.38
Weighted average diluted shares outstanding			216,587,468			216,378,536			216,446,656			216,533,240
Weighted average basic shares outstanding			212,217,035			211,992,092			212,283,966			212,112,744

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,
			2010			2009			2010			2009
Operating Activities:
Net earnings			$	96,448		$	69,650		$	344,205		$	240,397
Adjustments to reconcile net earnings to net cash provided by operating activities:
	Provision for losses on accounts receivable			305			13			3,414			804
	Deferred income tax expense (benefit)			8,048			11,336			10,569			(1,609	)
	Excess tax benefits from stock plans			(12,274	)		(345	)		(23,863	)		(5,726	)
	Stock compensation expense			10,696			10,070			43,743			39,135
	Depreciation and amortization			9,310			9,910			36,900			40,035
	Loss (gain) on sale of assets			140			(40	)		(321	)		(42	)
	Other			304			878			1,536			1,970
	Changes in operating assets and liabilities:
		Decrease (increase) in accounts receivable		77,947			(121,395	)		(188,823	)		(1,077	)
		Decrease (increase) in other current assets		1,484			1,835			(1,475	)		(291	)
		(Decrease) increase in accounts payable and accrued expenses		(60,302	)		58,698			130,138			29,910
		Increase (decrease) in income taxes payable, net		2,725			(9,640	)		39,495			(12,706	)
Net cash provided by operating activities				134,831			30,970			395,518			330,800
Investing Activities:
Decrease (increase) in short-term investments				81			(22	)		188			26
Purchase of property and equipment				(15,755	)		(9,364	)		(42,408	)		(34,700	)
Proceeds from sale of property and equipment				92			151			360			276
Prepayment on long-term land lease, net				-			4,193			-			(5,049	)
Other				(632	)		(748	)		(319	)		(1,901	)
Net cash used in investing activities				(16,214	)		(5,790	)		(42,179	)		(41,348	)
Financing Activities:
Proceeds from issuance of common stock				38,826			4,414			99,784			46,925
Repurchases of common stock				(106,862	)		(7,434	)		(246,312	)		(84,509	)
Excess tax benefits from stock plans				12,274			345			23,863			5,726
Dividends paid				(42,475	)		(40,279	)		(84,872	)		(80,555	)
Distributions to noncontrolling interest				(88	)		(75	)		(1,051	)		(1,084	)
Purchase of noncontrolling interest				-			(1,729	)		-			(3,851	)
Net cash used in financing activities				(98,325	)		(44,758	)		(208,588	)		(117,348	)
Effect of exchange rate changes on cash and cash equivalents				6,947			(1,762	)		13,785			12,797
Increase (decrease) in cash and cash equivalents				27,239			(21,340	)		158,536			184,901
Cash and cash equivalents at beginning of period				1,057,226			947,269			925,929			741,028
Cash and cash equivalents at end of period			$	1,084,465		$	925,929		$	1,084,465		$	925,929
Interest and taxes paid:
Interest			$	57			100		$	110			497
Income taxes				42,369			37,028			171,618			158,745

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
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
Three months ended
December 31, 2009
Revenues from unaffiliated customers	$	277,141	37,790	16,574	683,208	167,280	64,918			1,246,911
Transfers between geographic areas		21,117	2,004	3,548	7,460	8,613	3,597	(46,339	)	-
Total revenues	$	298,258	39,794	20,122	690,668	175,893	68,515	(46,339	)	1,246,911
Net revenues	$	148,265	17,613	11,537	107,382	63,809	21,106			369,712
Operating income	$	22,426	8,741	3,847	50,116	17,536	7,688			110,354
Identifiable assets	$	1,188,111	82,166	42,478	493,338	387,494	128,690	1,445		2,323,722
Capital expenditures	$	5,639	247	107	1,097	1,560	714			9,364
Depreciation and amortization	$	5,181	360	358	1,920	1,478	613			9,910
Equity	$	965,620	40,421	17,809	341,991	148,592	77,566	(30,652	)	1,561,347
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
Twelve months ended
December 31, 2009
Revenues from unaffiliated customers	$	982,103	129,272	64,060	2,101,323	582,759	232,766			4,092,283
Transfers between geographic areas		75,964	7,344	13,520	26,771	27,699	14,602	(165,900	)	-
Total revenues	$	1,058,067	136,616	77,580	2,128,094	610,458	247,368	(165,900	)	4,092,283
Net revenues	$	547,879	65,331	44,182	413,627	229,432	82,335			1,382,786
Operating income	$	117,908	20,253	12,538	167,299	43,953	23,050			385,001
Identifiable assets	$	1,188,111	82,166	42,478	493,338	387,494	128,690	1,445		2,323,722
Capital expenditures	$	24,908	724	688	2,772	3,407	2,201			34,700
Depreciation and amortization	$	21,010	1,391	1,087	8,106	5,968	2,473			40,035
Equity	$	965,620	40,421	17,809	341,991	148,592	77,566	(30,652	)	1,561,347