EXPEDITORS INTERNATIONAL OF WASHINGTON INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - EXPEDITORS INTERNATIONAL OF WASHINGTON INC	a20114qer8-k.htm

Exhibit 99.1

EARNINGS RELEASE

By: Expeditors International of Washington, Inc.

1015 Third Avenue, Suite 1200

Seattle, Washington 98104


CONTACTS:	R. Jordan Gates Bradley S. Powell

President and Chief Operating Officer Chief Financial Officer

(206) 674-3427 (206) 674-3412

FOR IMMEDIATE RELEASE

_____________________________________________________________________________________________

EXPEDITORS REPORTS FOURTH QUARTER 2011 EPS OF $.43 PER SHARE¹

SEATTLE, WASHINGTON - February 21, 2012, 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 $476,155,000as compared with $453,362,000 reported for the fourth quarter of 2010. Total revenues and operating income were $1,501,914,000and $155,064,000in 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,
	2011		2010		% Increase (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:
	Airfreight kilos		Ocean freight 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, 2011			December 31, 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

21-February-2012 Expeditors International of Washington, Inc. Page 3 of 6

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

21-February-2012 Expeditors International of Washington, Inc. Page 4 of 6

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

21-February-2012 Expeditors International of Washington, Inc. Page 5 of 6

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Business Segment Information

(In thousands) (Unaudited)



	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- 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

21-February-2012 Expeditors International of Washington, Inc. Page 6 of 6

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