Business Wire | Feb 16, 2021 08:30AM EST

Expeditors Reports Fourth Quarter 2020 EPS Of $1.16

Feb. 16, 2021

SEATTLE--(BUSINESS WIRE)--Feb. 16, 2021--Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2020 financial results including the following highlights compared to the same quarter of 2019:

* Diluted Net Earnings Attributable to Shareholders per share (EPS1) increased 47% to $1.16 * Net Earnings Attributable to Shareholders increased 45% to $199 million * Operating Income increased 56% to $282 million * Revenues increased 55% to $3.2 billion * Airfreight tonnage volume increased 10% and ocean container volume increased 19%

"We moved more freight in the fourth quarter of 2020 than in any other quarter in our history," said Jeffrey S. Musser, President and Chief Executive Officer. "We set Company bests in airfreight tonnage and ocean containers shipped, as well as in revenue, operating income and net earnings. All 17,500 people in our international network performed at levels we have never experienced before and in one of the most challenging operating environments in our 40-year history. I cannot thank our people enough and am tremendously proud to be part of an organization capable of performing at these levels while facing so many disruptions due to the COVID-19 pandemic. I credit our strong knowledge-based culture and our ability to collectively work as one team as primary factors in our success.

"Air buy and sell rates were elevated and volatile during the quarter, and supply and demand remained severely out of alignment, as demand for certain goods, particularly from North Asia, drove record high air tonnage. Air capacity remained extremely tight, as passenger flights have not returned to anywhere near their pre-COVID-19 pandemic levels. We anticipate that air supply/demand and pricing conditions are likely to remain unsettled well into 2021.

"Our ocean services business also experienced significant marketplace imbalance during the quarter, as demand soared and volumes increased, particularly on exports from North and South Asia, which drove higher average buy and sell rates. In addition, port congestion from labor and equipment shortages have significantly disrupted sailing schedules. We expect the pressure on buy rates to remain elevated until those conditions subside.

"In addition to our diverse workforce and our inclusive culture, our solid performance was largely based on the strength of our carrier relationships - both in air and ocean. Here, too, I applaud the extra focus and dedication of our people to keep those relationships strong and to secure available space for our customers in such unpredictable conditions. The marketplace remains very fluid. Despite some signs of improved COVID-19 conditions in certain parts of the world, supply chains continue to be disrupted. We remain focused on keeping our people safe, first and foremost, while continuing to serve our customers at the very highest level."

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, "We also experienced strong growth in Customs Brokerage, Order Management, Transcon and Distribution, as our customers' businesses improved and we on-boarded new customers. These latest results are particularly striking in comparison to the fourth quarter of 2019, when average sell rates had declined faster than our average buy rates, and both air and ocean volumes fell as slowing trade to and from China impacted overall freight movement around the globe just as the earliest effects of COVID-19 were being felt. While we are unable to predict how ongoing disruptions related to COVID-19 will affect our future operations or financial results going forward, we do not expect these unprecedented operating conditions to persist long-term. We will continue to make important investments in people, processes and technology, as well as to invest in our strategic efforts to explore new areas for profitable growth."

Mr. Powell noted that the Company's effective tax rate for the full year of 2020 was 27.0%, compared to 25.6% in 2019. Earnings of our international subsidiaries, which on average have higher effective tax rates when compared to U.S. Federal and State tax rates, were proportionally higher in 2020 than in the U.S.

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch 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, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

_______________________

^1Diluted earnings attributable to shareholders per share.

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

Expeditors International of Washington, Inc. Fourth Quarter 2020 Earnings Release, February 16, 2021 Financial Highlights for the Three and Twelve months ended December 31, 2020 (Unaudited) (in 000's of US dollars except per share data)

Three months ended December 31,

Twelve months ended December 31,

2020

2019

% Change

2020

2019

% Change

Revenues

$

3,169,188

$

2,044,941

55

%

$

10,116,481

$

8,175,426

24

%

Directly related cost of transportation and other expenses1

$

2,340,603

$

1,398,638

67

%

$

7,188,790

$

5,538,958

30

%

Salaries and other operating expenses2

$

546,774

$

465,963

17

%

$

1,987,254

$

1,869,776

6

%

Operating income

$

281,811

$

180,340

56

%

$

940,437

$

766,692

23

%

Net earnings attributable to shareholders

$

198,620

$

137,326

45

%

$

696,140

$

590,395

18

%

Diluted earnings attributable to shareholders per share

$

1.16

$

0.79

47

%

$

4.07

$

3.39

20

%

Basic earnings attributable to shareholders per share

$

1.17

$

0.81

44

%

$

4.14

$

3.45

20

%

Diluted weighted average shares outstanding

171,692

173,401

170,896

174,209

Basic weighted average shares outstanding

169,473

170,339

168,333

170,899

Expeditors International of Washington, Inc.Fourth Quarter 2020 Earnings Release, February 16, 2021Financial Highlights for the Three and Twelve months ended December 31, 2020(Unaudited)(in 000's of US dollars except per share data)

Three months ended December 31, Twelve months ended December 31,

2020 2019 % 2020 2019 % Change Change

Revenues $ 3,169,188 $ 2,044,941 55 % $ 10,116,481 $ 8,175,426 24 %

Directlyrelated costof $ 2,340,603 $ 1,398,638 67 % $ 7,188,790 $ 5,538,958 30 %transportationand otherexpenses^1

Salaries andother $ 546,774 $ 465,963 17 % $ 1,987,254 $ 1,869,776 6 %operatingexpenses^2

Operating $ 281,811 $ 180,340 56 % $ 940,437 $ 766,692 23 %income

Net earningsattributable $ 198,620 $ 137,326 45 % $ 696,140 $ 590,395 18 %toshareholders

Dilutedearningsattributable $ 1.16 $ 0.79 47 % $ 4.07 $ 3.39 20 %toshareholdersper share

Basic earningsattributableto $ 1.17 $ 0.81 44 % $ 4.14 $ 3.45 20 %shareholdersper share

Dilutedweighted 171,692 173,401 170,896 174,209 average sharesoutstanding

Basic weightedaverage shares 169,473 170,339 168,333 170,899 outstanding

1

Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Consolidated Statements of Earnings.

2

Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Consolidated Statements of Earnings.

The twelve months ended December 31, 2019 includes the effect of changing our presentation of certain import services from a net to a gross basis and our revised presentation of destination services that started in the second quarter of 2019, which increased revenues and directly related operating expenses in customs brokerage and other services but did not change operating income.

During the three and twelve months ended December 31, 2020, we repurchased 0.2 million and 4.6 million shares of common stock at an average price of $90.81 and $72.26 per share, respectively. During the three and twelve months ended December 31, 2019, we repurchased 1.2 million and 5.3 million shares of common stock at an average price of $73.89 and $72.91 per share, respectively.

Directly related cost of transportation and other expenses totals Operating^ Expenses from Airfreight services, Ocean freight and ocean services and1 Customs brokerage and other services as shown in the Consolidated Statements of Earnings.

^ Salaries and other operating expenses totals Salaries and related, Rent and2 occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Consolidated Statements of Earnings.

The twelve months ended December 31, 2019 includes the effect of changing our presentation of certain import services from a net to a gross basis and our revised presentation of destination services that started in the second quarter of 2019, which increased revenues and directly related operating expenses in customs brokerage and other services but did not change operating income.

During the three and twelve months ended December 31, 2020, we repurchased 0.2 million and 4.6 million shares of common stock at an average price of $90.81 and $72.26 per share, respectively. During the three and twelve months ended December 31, 2019, we repurchased 1.2 million and 5.3 million shares of common stock at an average price of $73.89 and $72.91 per share, respectively.

Employee Full-time Equivalents as of December 31,

2020 2019

North America 6,724 6,905

Europe 3,492 3,459

North Asia 2,398 2,488

South Asia 1,631 1,697

Middle East, Africa and India 1,497 1,548

Latin America 784 855

Information Systems 983 961

Corporate 399 384

Total 17,908 18,297

Fourth quarter year-over-year percentage increase in:

Airfreight kilos

Ocean freight FEU

2020

October

5

%

15

%

November

12

%

20

%

December

13

%

21

%

Quarter

10

%

19

%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 19, 2021 will be considered in management's 8-K "Responses to Selected Questions."

Disclaimer on Forward-Looking Statements

Certain statements contained in this news release are "forward-looking statements," such as statements relating to management's views with respect to future events and underlying assumptions that involve risks and uncertainties, including statements such as our expectations of continued volatility in air pricing, ongoing pressure for elevated buy rates in the ocean services business, that the COVID-19-related operating conditions will not continue long-term, and that the Company expects to continue making investments in people, processes and technology. Future financial performance could differ materially because of factors such as: our ability to perform at these levels while facing several disruptions due to the COVID-19 pandemic, including employee retention and their health and safety; our ability to execute during port congestion due to labor and equipment shortages and disrupted sailing schedules; the timing of passenger flights returning close to their pre-COVID-19 levels; the impact on our ocean volumes; continued volatility in airfreight and ocean buy and sell rates; our access to carrier capacity; our ability to keep our global offices open and operating; our ability to execute our business continuity plans; the strength of our financial position and our ability to continue to make investments in our strategic initiatives; our ability to remain a strong, healthy, unified and resilient organization; and the future impact of changes in the mix of domestic and foreign income on our effective tax rate. The COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in "Item 1A. Risk Factors" of the Company's most recent Quarterly Report on Form 10-Q. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020. The forward-looking statements contained in this news release speak only as of this date, and the Company does not assume any obligation to update them except as required by law.

Fourth quarter year-over-year percentage increase in:

Airfreight Ocean freight kilos FEU

2020

October 5 % 15 %

November 12 % 20 %

December 13 % 21 %

Quarter 10 % 19 %

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 19, 2021 will be considered in management's 8-K "Responses to Selected Questions."

Disclaimer on Forward-Looking Statements

Certain statements contained in this news release are "forward-looking statements," such as statements relating to management's views with respect to future events and underlying assumptions that involve risks and uncertainties, including statements such as our expectations of continued volatility in air pricing, ongoing pressure for elevated buy rates in the ocean services business, that the COVID-19-related operating conditions will not continue long-term, and that the Company expects to continue making investments in people, processes and technology. Future financial performance could differ materially because of factors such as: our ability to perform at these levels while facing several disruptions due to the COVID-19 pandemic, including employee retention and their health and safety; our ability to execute during port congestion due to labor and equipment shortages and disrupted sailing schedules; the timing of passenger flights returning close to their pre-COVID-19 levels; the impact on our ocean volumes; continued volatility in airfreight and ocean buy and sell rates; our access to carrier capacity; our ability to keep our global offices open and operating; our ability to execute our business continuity plans; the strength of our financial position and our ability to continue to make investments in our strategic initiatives; our ability to remain a strong, healthy, unified and resilient organization; and the future impact of changes in the mix of domestic and foreign income on our effective tax rate. The COVID-19 pandemic could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in "Item 1A. Risk Factors" of the Company's most recent Quarterly Report on Form 10-Q. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020. The forward-looking statements contained in this news release speak only as of this date, and the Company does not assume any obligation to update them except as required by law.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIESConsolidated Balance Sheets(In thousands, except per share data)(Unaudited)

December December 31, 2020 31, 2019

Assets:

Current Assets:

Cash and cash equivalents $ 1,527,791 $ 1,230,491

Accounts receivable, net 1,998,055 1,315,091

Deferred contract costs 327,448 131,783

Other 110,250 92,558

Total current assets 3,963,544 2,769,923

Property and equipment, net 506,425 499,344

Operating lease right-of-use assets 432,723 390,035

Goodwill 7,927 7,927

Deferred federal and state income taxes, net - 8,034

Other assets, net 16,884 16,621

Total assets $ 4,927,503 $ 3,691,884

Liabilities:

Current Liabilities:

Accounts payable $ 1,136,859 $ 735,695

Accrued expenses, primarily salaries and 257,021 189,446 related costs

Contract liabilities 379,722 154,183

Current portion of operating lease liabilities 74,004 65,367

Federal, state and foreign income taxes 45,437 23,627

Total current liabilities 1,893,043 1,168,318

Noncurrent portion of operating lease 364,185 326,347 liabilities

Deferred federal and state income taxes, net 7,048 -

Commitments and contingencies

Shareholders' Equity:

Preferred stock, none issued - -

Common stock, par value $0.01 per share,authorized 640,000. Issued and outstanding: 1,693 1,696 169,294 shares at December 31, 2020 and 169,622shares at December 31, 2019

Additional paid-in capital 157,496 3,203

Retained earnings 2,600,201 2,321,316

Accumulated other comprehensive loss (99,753 ) (131,187 )

Total shareholders' equity 2,659,637 2,195,028

Noncontrolling interest 3,590 2,191

Total equity 2,663,227 2,197,219

Total liabilities and equity $ 4,927,503 $ 3,691,884

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited)

Three months ended December 31,

Twelve months ended December 31,

2020

2019

2020

2019

Revenues:

Airfreight services

$

1,547,223

$

757,954

$

4,784,402

$

2,929,882

Ocean freight and ocean services

755,250

519,730

2,353,247

2,217,554

Customs brokerage and other services

866,715

767,257

2,978,832

3,027,990

Total revenues

3,169,188

2,044,941

10,116,481

8,175,426

Operating Expenses:

Airfreight services

1,228,254

569,282

3,679,185

2,143,999

Ocean freight and ocean services

577,600

378,801

1,762,754

1,613,646

Customs brokerage and other services

534,749

450,555

1,746,851

1,781,313

Salaries and related

427,344

352,723

1,538,104

1,422,315

Rent and occupancy

43,480

41,775

169,863

166,182

Depreciation and amortization

14,339

12,494

56,959

50,950

Selling and promotion

4,135

11,150

18,436

44,002

Other

57,476

47,821

203,892

186,327

Total operating expenses

2,887,377

1,864,601

9,176,044

7,408,734

Operating income

281,811

180,340

940,437

766,692

Other Income (Expense):

Interest income

1,545

4,680

10,415

22,803

Other, net

551

477

5,712

6,299

Other income, net

2,096

5,157

16,127

29,102

Earnings before income taxes

283,907

185,497

956,564

795,794

Income tax expense

84,382

47,749

258,350

203,778

Net earnings

199,525

137,748

698,214

592,016

Less net earnings attributable to the noncontrolling

interest

905

422

2,074

1,621

Net earnings attributable to shareholders

$

198,620

$

137,326

$

696,140

$

590,395

Diluted earnings attributable to shareholders per share

$

1.16

$

0.79

$

4.07

$

3.39

Basic earnings attributable to shareholders per share

$

1.17

$

0.81

$

4.14

$

3.45

Weighted average diluted shares outstanding

171,692

173,401

170,896

174,209

Weighted average basic shares outstanding

169,473

170,339

168,333

170,899

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIESConsolidated Statements of Earnings(In thousands, except per share data)(Unaudited)

Three months ended Twelve months ended December 31, December 31,

2020 2019 2020 2019

Revenues:

Airfreight services $ 1,547,223 $ 757,954 $ 4,784,402 $ 2,929,882

Ocean freight and 755,250 519,730 2,353,247 2,217,554ocean services

Customs brokerage and 866,715 767,257 2,978,832 3,027,990other services

Total revenues 3,169,188 2,044,941 10,116,481 8,175,426

Operating Expenses:

Airfreight services 1,228,254 569,282 3,679,185 2,143,999

Ocean freight and 577,600 378,801 1,762,754 1,613,646ocean services

Customs brokerage and 534,749 450,555 1,746,851 1,781,313other services

Salaries and related 427,344 352,723 1,538,104 1,422,315

Rent and occupancy 43,480 41,775 169,863 166,182

Depreciation and 14,339 12,494 56,959 50,950amortization

Selling and promotion 4,135 11,150 18,436 44,002

Other 57,476 47,821 203,892 186,327

Total operating 2,887,377 1,864,601 9,176,044 7,408,734expenses

Operating income 281,811 180,340 940,437 766,692

Other Income (Expense):

Interest income 1,545 4,680 10,415 22,803

Other, net 551 477 5,712 6,299

Other income, net 2,096 5,157 16,127 29,102

Earnings before 283,907 185,497 956,564 795,794income taxes

Income tax expense 84,382 47,749 258,350 203,778

Net earnings 199,525 137,748 698,214 592,016

Less net earningsattributable to thenoncontrolling 905 422 2,074 1,621

interest

Net earningsattributable to $ 198,620 $ 137,326 $ 696,140 $ 590,395shareholders

Diluted earningsattributable to $ 1.16 $ 0.79 $ 4.07 $ 3.39shareholders pershare

Basic earningsattributable to $ 1.17 $ 0.81 $ 4.14 $ 3.45shareholders pershare

Weighted averagediluted shares 171,692 173,401 170,896 174,209outstanding

Weighted averagebasic shares 169,473 170,339 168,333 170,899outstanding

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) (Unaudited)

Three months ended December 31,

Twelve months ended December 31,

2020

2019

2020

2019

Operating Activities:

Net earnings

$

199,525

$

137,748

$

698,214

$

592,016

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

Provisions for losses (recoveries) on accounts receivable

977

(454

)

5,584

(1

)

Deferred income tax expense

5,499

4,499

8,371

4,482

Stock compensation expense

17,407

12,182

62,498

61,543

Depreciation and amortization

14,339

12,494

56,959

50,950

Other, net

490

129

3,960

941

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable

(372,753

)

19,744

(647,193

)

265,919

Increase (decrease) in accounts payable and accrued expenses

228,555

(40,788

)

430,495

(181,987

)

(Increase) decrease in deferred contract costs

(89,560

)

261

(189,447

)

28,811

Increase (decrease) in contract liabilities

105,455

(164

)

217,699

(37,097

)

Increase (decrease) in income taxes payable, net

19,146

14,812

8,502

(18,472

)

Decrease (increase) in other, net

12,612

4,783

(630

)

4,830

Net cash from operating activities

141,692

165,246

655,012

771,935

Investing Activities:

Purchase of property and equipment

(10,124

)

(9,079

)

(47,543

)

(47,022

)

Other, net

553

(518

)

1,516

1,007

Net cash from investing activities

(9,571

)

(9,597

)

(46,027

)

(46,015

)

Financing Activities:

Proceeds from issuance of common stock

12,329

28,055

186,345

148,245

Repurchases of common stock

(18,162

)

(92,138

)

(332,387

)

(389,060

)

Dividends Paid

(88,114

)

(85,369

)

(174,929

)

(170,553

)

Payments for taxes related to net share settlement of equity awards

-

-

(10,566

)

(6,674

)

Net cash from financing activities

(93,947

)

(149,452

)

(331,537

)

(418,042

)

Effect of exchange rate changes on cash and cash equivalents

24,107

8,324

19,852

(1,122

)

Change in cash and cash equivalents

62,281

14,521

297,300

306,756

Cash and cash equivalents at beginning of period

1,465,510

1,215,970

1,230,491

923,735

Cash and cash equivalents at end of period

$

1,527,791

$

1,230,491

$

1,527,791

$

1,230,491

Taxes Paid:

Income taxes

$

59,607

$

25,914

$

239,849

$

222,083

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIESConsolidated Statements of Cash Flows(In thousands)(Unaudited)

Three months ended December Twelve months ended December 31, 31,

2020 2019 2020 2019

Operating Activities:

Net earnings $ 199,525 $ 137,748 $ 698,214 $ 592,016

Adjustments toreconcile netearnings to net cash fromoperatingactivities:

Provisions forlosses(recoveries) on 977 (454 ) 5,584 (1 )accountsreceivable

Deferred income 5,499 4,499 8,371 4,482 tax expense

Stockcompensation 17,407 12,182 62,498 61,543 expense

Depreciationand 14,339 12,494 56,959 50,950 amortization

Other, net 490 129 3,960 941

Changes inoperating assets andliabilities:

(Increase)decrease in (372,753 ) 19,744 (647,193 ) 265,919 accountsreceivable

Increase(decrease) inaccounts 228,555 (40,788 ) 430,495 (181,987 )payable andaccruedexpenses

(Increase)decrease in (89,560 ) 261 (189,447 ) 28,811 deferredcontract costs

Increase(decrease) in 105,455 (164 ) 217,699 (37,097 )contractliabilities

Increase(decrease) in 19,146 14,812 8,502 (18,472 )income taxespayable, net

Decrease(increase) in 12,612 4,783 (630 ) 4,830 other, net

Net cash fromoperating 141,692 165,246 655,012 771,935 activities

Investing Activities:

Purchase ofproperty and (10,124 ) (9,079 ) (47,543 ) (47,022 )equipment

Other, net 553 (518 ) 1,516 1,007

Net cash frominvesting (9,571 ) (9,597 ) (46,027 ) (46,015 )activities

Financing Activities:

Proceeds fromissuance of 12,329 28,055 186,345 148,245 common stock

Repurchases of (18,162 ) (92,138 ) (332,387 ) (389,060 )common stock

Dividends Paid (88,114 ) (85,369 ) (174,929 ) (170,553 )

Payments fortaxes relatedto net share - - (10,566 ) (6,674 )settlement ofequity awards

Net cash fromfinancing (93,947 ) (149,452 ) (331,537 ) (418,042 )activities

Effect ofexchange ratechanges on cash 24,107 8,324 19,852 (1,122 )and cashequivalents

Change in cashand cash 62,281 14,521 297,300 306,756 equivalents

Cash and cashequivalents at 1,465,510 1,215,970 1,230,491 923,735 beginning ofperiod

Cash and cashequivalents at $ 1,527,791 $ 1,230,491 $ 1,527,791 $ 1,230,491 end of period

Taxes Paid:

Income taxes $ 59,607 $ 25,914 $ 239,849 $ 222,083

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Business Segment Information (In thousands) (Unaudited)

UNITED STATES

OTHER NORTH AMERICA

LATIN AMERICA

NORTH ASIA

SOUTH ASIA

EUROPE

MIDDLE EAST, AFRICA AND INDIA

ELIMI- NATIONS

CONSOLI- DATED

For the three months ended December 31, 2020:

Revenues1

$

800,663

94,153

41,527

1,300,215

329,050

458,012

146,596

(1,028

)

3,169,188

Directly related cost of transportation and other expenses2

$

460,288

60,625

23,422

1,103,063

256,677

325,878

111,179

(529

)

2,340,603

Salaries and other operating expenses3

$

245,721

26,367

11,894

96,498

40,251

101,631

24,905

(493

)

546,774

Operating income

$

94,654

7,161

6,211

100,654

32,122

30,503

10,512

(6

)

281,811

Identifiable assets at period end

$

2,532,324

186,204

85,085

876,856

272,106

752,589

240,984

(18,645

)

4,927,503

Capital expenditures

$

3,328

194

66

417

1,229

2,976

1,914

-

10,124

Depreciation and amortization

$

9,235

498

284

1,283

493

2,091

455

-

14,339

Equity

$

1,928,945

67,243

32,273

241,155

121,411

196,637

114,369

(38,806

)

2,663,227

For the three months ended December 31, 2019:

Revenues1

$

678,979

89,370

38,925

615,401

188,278

327,879

107,104

(995

)

2,044,941

Directly related cost of transportation and other expenses2

$

386,114

54,372

23,148

495,267

137,231

227,248

75,813

(555

)

1,398,638

Salaries and other operating expenses3

$

223,703

25,371

14,170

62,813

30,154

83,734

26,459

(441

)

465,963

Operating income

$

69,162

9,627

1,607

57,321

20,893

16,897

4,832

1

180,340

Identifiable assets at period end

$

1,978,307

153,813

72,677

538,526

178,336

551,576

219,953

(1,304

)

3,691,884

Capital expenditures

$

5,122

844

485

600

323

1,216

489

-

9,079

Depreciation and amortization

$

7,581

494

324

1,227

449

1,945

474

-

12,494

Equity

$

1,521,059

65,100

29,148

247,725

94,727

159,308

114,726

(34,574

)

2,197,219

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.AND SUBSIDIARIESBusiness Segment Information(In thousands)(Unaudited)

MIDDLE UNITED OTHER LATIN NORTH SOUTH EAST, ELIMI- CONSOLI- STATES NORTH AMERICA ASIA ASIA EUROPE AFRICA NATIONS DATED AMERICA AND INDIA

For the threemonths ended December 31,2020:

Revenues^1 $ 800,663 94,153 41,527 1,300,215 329,050 458,012 146,596 (1,028 ) 3,169,188

Directlyrelated costof $ 460,288 60,625 23,422 1,103,063 256,677 325,878 111,179 (529 ) 2,340,603transportationand otherexpenses^2

Salaries andother $ 245,721 26,367 11,894 96,498 40,251 101,631 24,905 (493 ) 546,774operatingexpenses^3

Operating $ 94,654 7,161 6,211 100,654 32,122 30,503 10,512 (6 ) 281,811income

Identifiableassets at $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503period end

Capital $ 3,328 194 66 417 1,229 2,976 1,914 - 10,124expenditures

Depreciationand $ 9,235 498 284 1,283 493 2,091 455 - 14,339amortization

Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227

For the threemonths ended December 31,2019:

Revenues^1 $ 678,979 89,370 38,925 615,401 188,278 327,879 107,104 (995 ) 2,044,941

Directlyrelated costof $ 386,114 54,372 23,148 495,267 137,231 227,248 75,813 (555 ) 1,398,638transportationand otherexpenses^2

Salaries andother $ 223,703 25,371 14,170 62,813 30,154 83,734 26,459 (441 ) 465,963operatingexpenses^3

Operating $ 69,162 9,627 1,607 57,321 20,893 16,897 4,832 1 180,340income

Identifiableassets at $ 1,978,307 153,813 72,677 538,526 178,336 551,576 219,953 (1,304 ) 3,691,884period end

Capital $ 5,122 844 485 600 323 1,216 489 - 9,079expenditures

Depreciationand $ 7,581 494 324 1,227 449 1,945 474 - 12,494amortization

Equity $ 1,521,059 65,100 29,148 247,725 94,727 159,308 114,726 (34,574 ) 2,197,219

UNITED STATES

OTHER NORTH AMERICA

LATIN AMERICA

NORTH ASIA

SOUTH ASIA

EUROPE

MIDDLE EAST, AFRICA AND INDIA

ELIMI- NATIONS

CONSOLI- DATED

For the twelve months ended December 31, 2020:

Revenues1

$

2,776,546

328,427

156,163

3,838,332

989,633

1,544,130

487,011

(3,761

)

10,116,481

Directly related cost of transportation and other expenses2

$

1,568,461

192,875

93,249

3,157,086

738,648

1,080,741

359,682

(1,952

)

7,188,790

Salaries and other operating expenses3

$

877,117

100,687

48,114

332,978

149,269

375,900

104,968

(1,779

)

1,987,254

Operating income

$

330,968

34,865

14,800

348,268

101,716

87,489

22,361

(30

)

940,437

Identifiable assets at period end

$

2,532,324

186,204

85,085

876,856

272,106

752,589

240,984

(18,645

)

4,927,503

Capital expenditures

$

31,604

1,886

564

2,202

2,264

6,394

2,629

-

47,543

Depreciation and amortization

$

37,081

1,946

1,194

4,961

1,876

8,029

1,872

-

56,959

Equity

$

1,928,945

67,243

32,273

241,155

121,411

196,637

114,369

(38,806

)

2,663,227

For the twelve months ended December 31, 2019:

Revenues1

$

2,712,067

354,405

150,202

2,494,556

743,406

1,280,669

443,487

(3,366

)

8,175,426

Directly related cost of transportation and other expenses2

$

1,528,815

212,369

87,297

1,970,662

544,873

884,968

311,997

(2,023

)

5,538,958

Salaries and other operating expenses3

$

859,946

101,654

55,512

271,594

127,478

342,073

112,844

(1,325

)

1,869,776

Operating income

$

323,306

40,382

7,393

252,300

71,055

53,628

18,646

(18

)

766,692

Identifiable assets at period end

$

1,978,307

153,813

72,677

538,526

178,336

551,576

219,953

(1,304

)

3,691,884

Capital expenditures

$

28,666

2,353

1,556

1,767

1,558

9,231

1,891

-

47,022

Depreciation and amortization

$

31,049

1,881

1,489

5,263

1,912

7,398

1,958

-

50,950

Equity

$

1,521,059

65,100

29,148

247,725

94,727

159,308

114,726

(34,574

)

2,197,219

MIDDLE UNITED OTHER LATIN NORTH SOUTH EAST, ELIMI- CONSOLI- STATES NORTH AMERICA ASIA ASIA EUROPE AFRICA NATIONS DATED AMERICA AND INDIA

For the twelvemonths ended December 31,2020:

Revenues^1 $ 2,776,546 328,427 156,163 3,838,332 989,633 1,544,130 487,011 (3,761 ) 10,116,481

Directlyrelated costof $ 1,568,461 192,875 93,249 3,157,086 738,648 1,080,741 359,682 (1,952 ) 7,188,790transportationand otherexpenses^2

Salaries andother $ 877,117 100,687 48,114 332,978 149,269 375,900 104,968 (1,779 ) 1,987,254operatingexpenses^3

Operating $ 330,968 34,865 14,800 348,268 101,716 87,489 22,361 (30 ) 940,437income

Identifiableassets at $ 2,532,324 186,204 85,085 876,856 272,106 752,589 240,984 (18,645 ) 4,927,503period end

Capital $ 31,604 1,886 564 2,202 2,264 6,394 2,629 - 47,543expenditures

Depreciationand $ 37,081 1,946 1,194 4,961 1,876 8,029 1,872 - 56,959amortization

Equity $ 1,928,945 67,243 32,273 241,155 121,411 196,637 114,369 (38,806 ) 2,663,227

For the twelvemonths ended December 31,2019:

Revenues^1 $ 2,712,067 354,405 150,202 2,494,556 743,406 1,280,669 443,487 (3,366 ) 8,175,426

Directlyrelated costof $ 1,528,815 212,369 87,297 1,970,662 544,873 884,968 311,997 (2,023 ) 5,538,958transportationand otherexpenses^2

Salaries andother $ 859,946 101,654 55,512 271,594 127,478 342,073 112,844 (1,325 ) 1,869,776operatingexpenses^3

Operating $ 323,306 40,382 7,393 252,300 71,055 53,628 18,646 (18 ) 766,692income

Identifiableassets at $ 1,978,307 153,813 72,677 538,526 178,336 551,576 219,953 (1,304 ) 3,691,884period end

Capital $ 28,666 2,353 1,556 1,767 1,558 9,231 1,891 - 47,022expenditures

Depreciationand $ 31,049 1,881 1,489 5,263 1,912 7,398 1,958 - 50,950amortization

Equity $ 1,521,059 65,100 29,148 247,725 94,727 159,308 114,726 (34,574 ) 2,197,219

1

In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation and other expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company's new accounting systems and processes. The change in presentation had no impact on consolidated or segment operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change operating income. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised.

2

Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Consolidated Statements of Earnings.

3

Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Consolidated Statements of Earnings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210216005470/en/

CONTACT: Jeffrey S. Musser President and Chief Executive Officer (206) 674-3433

CONTACT: Bradley S. Powell Senior Vice President and Chief Financial Officer (206) 674-3412

CONTACT: Geoffrey Buscher Director - Investor Relations (206) 892-4510