Expeditors Reports First Quarter 2015 EPS of $0.55 Per Share 1

SEATTLE--(BUSINESS WIRE)--

Expeditors International of Washington, Inc. EXPD today announced net earnings attributable to shareholders of $106,704,000 for the first quarter of 2015, as compared with $83,824,000 for the same quarter of 2014, an increase of 27%. Net revenues² for the first quarter of 2015 increased 14% to $529,486,000 as compared with $464,586,000 for the same quarter in 2014. Total revenues and operating income were $1,677,526,000 and $168,883,000 in the first quarter of 2015, as compared with $1,491,645,000 and $135,203,000 for the same quarter of 2014, increases of 12% and 25%, respectively. Diluted net earnings attributable to shareholders per share for the first quarter were $0.55, as compared with $0.42 for the same quarter in 2014, an increase of 31%.

"The 2015 first quarter saw ocean and airfreight volume increases of 12% and 13%, respectively, with total net revenues increasing 14%. While there was some degree of unquantifiable benefit to airfreight volumes that we attribute to a combination of last year's West Coast labor dispute backlogs and the timing of Chinese New Year, we thought it noteworthy that ocean volumes still showed strong, double digit growth," commented Bradley S. Powell, Senior Vice President and Chief Financial Officer. "We also benefited from our ability to leverage our operating expenses. Our efficiency and productivity this quarter, as measured by our operating income as a percentage of net revenue ratio, grew to 32%. Being able to absorb this growth without a corresponding increase in overhead costs resulted in a 25% increase in our operating income, the highest year-over-year quarterly increase in nearly four years," Powell went on to say.

"We were both encouraged and, quite frankly, more than pleasantly surprised by the strength of these results. It's always great to have ‘one of those quarters' where everything seems to be firing on all cylinders and it's particularly good when that occurs during the first quarter. This has created a solid foundation for us to move forward into 2015," said Jeffrey S. Musser, President and Chief Executive Officer. "March was the most profitable month in the history of the company. We do understand that we will have stiffer comparables the last half of the year than we experienced in the 2015 first quarter. We are also aware of the continuing, and we believe warranted, concerns about the global economy. Despite these factors, we remain committed to our objective of returning the company to sustainable double digit growth. To that end, we remain focused on implementing our strategic initiatives. Technically speaking, these programs weren't fully in effect during the first quarter as we were still completing our roll-out. We believe, however, that the increased focus and collaboration that were a by-product of developing and rolling out our strategic initiatives created synergies that showed up in our results. Our people executed impeccably during the first quarter and we're grateful to them for their outstanding efforts. They have always been our most valuable assets and are the ones who truly differentiate Expeditors. Finally, we would also point out that the cumulative effect of returning capital to our shareholders through stock re-purchases contributed to a very healthy year-over-year growth in earnings per share of 31%," Musser concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 185 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, time-definite transportation, order management, warehousing distribution and customized logistics solutions.

1Diluted earnings attributable to shareholders per share.

2Non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. See reconciliation on the last page of this release.

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

Expeditors International of Washington, Inc.
First Quarter 2015 Earnings Release, May 6, 2015
Financial Highlights for the Three months ended March 31, 2015 and 2014 (Unaudited)
(in 000's of US dollars except share data)
			Three months ended
			March 31,										%
			2015					2014					Change
Revenues			$	1,677,526				$	1,491,645				12%
Net revenues1			$	529,486				$	464,586				14%
Operating income			$	168,883				$	135,203				25%
Net earnings attributable to shareholders			$	106,704				$	83,824				27%
Diluted earnings attributable to shareholders per share			$	0.55				$	0.42				31%
Basic earnings attributable to shareholders per share			$	0.56				$	0.42				33%
Diluted weighted average shares outstanding			192,707,093					201,843,858
Basic weighted average shares outstanding			191,627,750					201,118,390

1Non-GAAP measure calculated as revenues less directly related operating expenses attributable to the Company's principal services. See reconciliation on the last page of this release.

During the three-month period ended March 31, 2015, the Company repurchased 535,476 shares of common stock, net of issuances.

				Employee headcount as of March 31,
				2015			2014
North America				5,399			4,926
Europe				2,552			2,273
North Asia				2,476			2,540
Middle East, Africa and India				1,369			1,353
South Asia				1,289			1,287
Latin America				784			713
Information Systems				705			645
Corporate				308			280
Total				14,882			14,017

				Year-over-year percentage increase
				(decrease) in:
				Airfreight kilos				Ocean freight FEU
2015
January				13	%			8	%
February				18	%			42	%
March				9	%			(6	)%
Quarter				13	%			12	%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on May 8, 2015 will be considered in management's 8-K "Responses to Selected Questions" expected to be filed on or about May 15, 2015.

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 benefits to airfreight volumes that we attribute to a combination of the recent West Coast labor dispute backlogs, condition of the global economy, ability to achieve sustainable double digit growth, ability to achieve benefits from new strategies and organization structure and ability to achieve strategic goals. 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 and fuel prices, political changes, foreign exchange rates, 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,					December 31,
				2015					2014
Assets
Current Assets:
Cash and cash equivalents				$	1,033,144				$	927,107
Short-term investments					61					40,336
Accounts receivable, net					1,253,639					1,236,042
Deferred Federal and state income taxes					20,402					20,279
Other current assets					44,914					65,486
Total current assets					2,352,160					2,289,250
Property and equipment, net					528,988					538,415
Goodwill					7,927					7,927
Other assets, net					54,703					55,313
				$	2,943,778				$	2,890,905
Liabilities and Equity
Current Liabilities:
Accounts payable					749,246					770,238
Accrued expenses, primarily salaries and related costs					203,810					192,468
Federal, state and foreign income taxes					26,163					21,077
Total current liabilities					979,219					983,783
Deferred Federal and state income taxes					37,028					35,514
Commitments and contingencies
Shareholders' Equity:
Preferred stock; none issued					—					—
Common stock, par value $0.01 per share. Issued and outstanding 191,120,214 shares at March 31, 2015 and 191,655,690 shares at December 31, 2014					1,911					1,916
Additional paid-in capital					5,241					1,113
Retained earnings					1,974,830					1,903,196
Accumulated other comprehensive loss					(57,091	)				(37,817	)
Total shareholders' equity					1,924,891					1,868,408
Noncontrolling interest					2,640					3,200
Total equity					1,927,531					1,871,608
				$	2,943,778				$	2,890,905

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(In thousands, except share data)
(Unaudited)
				Three months ended
				March 31,
				2015				2014
Revenues:
Airfreight services				$	707,444			$	647,138
Ocean freight and ocean services					565,717				469,224
Customs brokerage and other services					404,365				375,283
Total revenues					1,677,526				1,491,645
Operating Expenses:
Airfreight services					513,001				482,882
Ocean freight and ocean services					445,456				367,375
Customs brokerage and other services					189,583				176,802
Salaries and related costs					278,878				255,942
Rent and occupancy costs					25,388				25,162
Depreciation and amortization					11,529				12,382
Selling and promotion					9,247				8,173
Other					35,561				27,724
Total operating expenses					1,508,643				1,356,442
Operating income					168,883				135,203
Other Income (Expense):
Interest income					2,732				2,697
Other, net					34				(281	)
Other income, net					2,766				2,416
Earnings before income taxes					171,649				137,619
Income tax expense					64,317				53,424
Net earnings					107,332				84,195
Less net earnings attributable to the noncontrolling interest					628				371
Net earnings attributable to shareholders				$	106,704			$	83,824
Diluted earnings attributable to shareholders per share				$	0.55			$	0.42
Basic earnings attributable to shareholders per share				$	0.56			$	0.42
Weighted average diluted shares outstanding					192,707,093				201,843,858
Weighted average basic shares outstanding					191,627,750				201,118,390

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
				Three months ended
				March 31,
				2015					2014
Operating Activities:
Net earnings				$	107,332				$	84,195
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses (recoveries) on accounts receivable					277					(1,115	)
Deferred income tax expense					11,937					7,194
Excess tax benefits from stock plans					(1,480	)				(489	)
Stock compensation expense					9,907					10,294
Depreciation and amortization					11,529					12,382
Other					86					138
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable					(46,790	)				12,228
Increase in accounts payable and accrued expenses					14,895					29,546
Increase in income taxes payable, net					23,132					18,205
Decrease in other current assets					3,569					1,279
Net cash from operating activities					134,394					173,857
Investing Activities:
Decrease (increase) in short-term investments, net					40,274					(60,154	)
Purchase of property and equipment					(9,445	)				(8,760	)
Other, net					198					1,670
Net cash from investing activities					31,027					(67,244	)
Financing Activities:
Proceeds from issuance of common stock					35,048					7,892
Repurchases of common stock					(77,368	)				(226,725	)
Excess tax benefits from stock plans					1,480					489
Distribution to noncontrolling interest					(857	)				(85	)
Net cash from financing activities					(41,697	)				(218,429	)
Effect of exchange rate changes on cash and cash equivalents					(17,687	)				(4,790	)
Increase (decrease) in cash and cash equivalents					106,037					(116,606	)
Cash and cash equivalents at beginning of period					927,107					1,247,652
Cash and cash equivalents at end of period				$	1,033,144				$	1,131,046
Taxes paid:
Income taxes				$	28,261				$	27,496

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)
																							MIDDLE
																							EAST,
								OTHER															AFRICA
				UNITED				NORTH			LATIN			NORTH			SOUTH						and			ELIMI-				CONSOLI-
				STATES				AMERICA			AMERICA			ASIA			ASIA			EUROPE			INDIA			NATIONS				DATED
Three months ended March 31, 2015:
Revenues from unaffiliated customers				$	444,181			54,794			24,081			645,444			181,381			242,086			85,559			—				1,677,526
Transfers between geographic areas					27,675			2,814			4,777			5,697			5,915			9,637			5,067			(61,582	)			—
Total revenues				$	471,856			57,608			28,858			651,141			187,296			251,723			90,626			(61,582	)			1,677,526
Net revenues				$	219,603			30,678			16,559			117,405			42,200			75,888			27,153			—				529,486
Operating income				$	59,181			11,091			5,356			57,056			13,880			15,071			7,248			—				168,883
Identifiable assets				$	1,451,103			109,180			57,232			541,983			143,910			430,338			198,954			11,078				2,943,778
Capital expenditures				$	6,325			288			617			290			319			1,148			458			—				9,445
Depreciation and amortization				$	7,393			292			268			1,399			530			1,246			401			—				11,529
Equity				$	1,182,808			58,998			34,604			306,775			106,139			154,343			120,086			(36,222	)			1,927,531
Three months ended March 31, 2014:
Revenues from unaffiliated customers				$	400,739			51,584			20,629			568,689			140,743			233,683			75,578			—				1,491,645
Transfers between geographic areas					20,011			2,375			5,204			5,417			6,550			9,319			4,542			(53,418	)			—
Total revenues				$	420,750			53,959			25,833			574,106			147,293			243,002			80,120			(53,418	)			1,491,645
Net revenues				$	192,082			26,161			15,357			93,394			39,093			74,331			24,168			—				464,586
Operating income				$	51,898			8,375			4,859			40,054			12,470			11,642			5,905			—				135,203
Identifiable assets				$	1,437,768			105,070			61,503			545,148			151,184			437,857			183,288			3,686				2,925,504
Capital expenditures				$	3,928			264			301			2,660			456			866			285			—				8,760
Depreciation and amortization				$	7,852			280			212			1,502			596			1,507			433			—				12,382
Equity				$	1,151,455			69,702			32,017			333,871			112,090			188,354			108,009			(35,484	)			1,960,014

Net Revenues (Non-GAAP measure)

We commonly refer to the term "net revenues" when commenting about our Company and the results of its operations. Net revenues are a Non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. We believe that net revenues are a better measure than are total revenues when analyzing and discussing our effectiveness in managing our principal services since total revenues earned as a freight consolidator must consider the carriers' charges to us for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by us. Net revenue is one of our primary operational and financial measures and demonstrates our ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings. Using net revenues also provides a commonality for comparison among various services. The following table presents the calculation of net revenues.

				Three months ended
				March 31,
(in thousands)				2015				2014
Total revenues				$	1,677,526			$	1,491,645
Expenses:
Airfreight services					513,001				482,882
Ocean freight and ocean services					445,456				367,375
Customs brokerage and other services					189,583				176,802
Net revenues				$	529,486			$	464,586