Expeditors International of Washington (EXPD) 8-K Results of Operations and Financial Condition

Exhibit 99.1

EARNINGS RELEASE

By:	Expeditors International of Washington, Inc.
	1015 Third Avenue, Suite 1200
	Seattle, Washington 98104
	CONTACT:	R. Jordan Gates
		Chief Financial Officer
		(206) 674-3427	FOR IMMEDIATE RELEASE

EXPEDITORS ANNOUNCES NET EARNINGS INCREASE OF 19%

SEATTLE, WASHINGTON – August 2, 2005, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings of $44,644,000 for the second quarter of 2005, compared with $37,612,000 for the same quarter of 2004, an increase of 19%.  Net revenues for the second quarter of 2005 increased 13% to $250,660,000 as compared with $222,223,000 reported for the second quarter of 2004.  Total revenues and operating income were $927,999,000 and $68,305,000 in 2005 compared with $798,666,000 and $58,246,000 for the same quarter of 2004, increases of 16% and 17%, respectively.  Diluted net earnings per share for the second quarter were $.40 as compared with $.34 for the same quarter in 2004, an increase of 18%.  The company also reported that same store net revenues and operating income increased 12% and 17%, respectively, for the second quarter of 2005 when compared with 2004.

For the six months ended June 30, 2005, net earnings rose to $82,388,000 from $69,456,000 in 2004, an increase of 19%. Net revenues for the six months increased to $481,343,000 from $424,719,000 for 2004, up 13%. Total revenues and operating income for the six months were $1,753,163,000 and $125,862,000 in 2005 compared with $1,485,516,000 and $107,054,000 for the same period in 2004, increases of 18%, respectively.  Diluted net earnings per share for the first two quarters of 2005 were $.74 as compared with $.63 for the same period of 2004, an increase of 17%. Same store net revenues and operating income increased 13% and 17%, respectively, for the six months ended June 30, 2005 when compared with same period of 2004.

“These are solid results, particularly in light of the fact that this increase comes off of a very strong historical base.  This quarter was interesting because it started slowly and yet business accelerated throughout the quarter to the point where June 2005 was a record month.  In fact, operating income was nearly 20% higher than our previous best.  This strong finish appears to have been driven by customers in the retail area rushing imports of several commodities from the People’s Republic of China for which safeguards would be closing imminently,” commented Peter J. Rose, Chairman and Chief Executive Officer.

“It is noteworthy that despite the challenges that occurred with the surge in business late in the quarter, our customer-service and supplier management programs appear to have paid off in the right way.  Once again, our employees have demonstrated the ability to keep freight rolling and our customer’s supply chains untangled.  It is their hard work and dedication that provides the best customer service in the industry. Without their efforts and commitment to constantly push the limits of excellence, Expeditors would not enjoy the kind of organic growth and financial success that has created and sustained shareholder value for the last quarter of a century,” Rose concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 160 full-service offices, 54 satellite locations and 7 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.

Expeditors International of Washington, Inc.

Financial Highlights

Three months and Six months ended

June 30, 2005 and 2004

Unaudited

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

	Three months ended						Six months ended
	June 30,				%		June 30,				%
	2005		2004		Increase		2005		2004		Increase
Revenues	$	927,999	$	798,666	16	%	$	1,753,163	$	1,485,516	18	%
Net revenues	$	250,660	$	222,223	13	%	$	481,343	$	424,719	13	%
Operating income	$	68,305	$	58,246	17	%	$	125,862	$	107,054	18	%
Net earnings	$	44,644	$	37,612	19	%	$	82,388	$	69,456	19	%
Diluted earnings per share	$	.40	$	.34	18	%	$	.74	$	.63	17	%
Basic earnings per share	$	.42	$	.36	17	%	$	.77	$	.66	17	%
Diluted weighted average shares outstanding	111,417,781		110,656,193				111,776,854		110,188,368
Basic weighted average shares outstanding	106,776,046		105,597,413				106,752,363		105,364,264

Offices Opened during the 2nd Quarter of 2005

ASIA	EUROPE
Macau, PRC	Turin, Italy	+

+Satellite office.

Investors may submit written questions via e-mail to:  investor@expeditors.com

Or by fax to:  (206) 674-3459

Questions received by the end of business on August 4, 2005 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on our about August 10, 2005.

2

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	June 30,		December 31,
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	438,873	$	408,983
Short-term investments	119		109
Accounts receivable, net	615,637		614,044
Other current assets	24,431		22,724
Total current assets	1,079,060		1,045,860
Property and equipment, net	306,177		287,379
Goodwill, net	7,774		7,774
Other intangibles, net	9,825		10,839
Other assets	14,413		12,201
	$	1,417,249	$	1,364,053
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term debt	—		2,250
Accounts payable	422,939		410,251
Accrued expenses, primarily salaries and related costs	100,540		84,778
Deferred Federal and state income taxes	6,866		6,369
Federal, state and foreign income taxes	19,227		20,668
Total current liabilities	$	549,572	$	524,316
Deferred Federal and state income taxes	$	26,062	$	24,861
Minority interest	$	9,522	$	7,472
Shareholders’ equity:
Preferred stock, par value $.01 per share.
Authorized 2,000,000 shares; none issued	—		—
Common stock, par value $.01 per share. Authorized 320,000,000 shares; issued and outstanding 106,545,961 shares at June 30, 2005 and 106,643,953 shares at December 31, 2004	1,065		1,066
Additional paid-in capital	14,697		44,678
Retained earnings	816,307		749,974
Accumulated other comprehensive income	24		11,686
Total shareholders’ equity	832,093		807,404
	$	1,417,249	$	1,364,053

3

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except share data)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2005			2004			2005			2004
Revenues:
Airfreight	$	421,213		$	368,618		$	794,098		$	693,477
Ocean freight and ocean services	336,934			290,109			634,078			523,155
Customs brokerage and other services	169,852			139,939			324,987			268,884
Total revenues	927,999			798,666			1,753,163			1,485,516
Operating expenses:
Airfreight consolidation	330,269			281,729			614,707			528,381
Ocean freight consolidation	277,259			239,313			521,229			426,132
Customs brokerage and other services	69,811			55,401			135,884			106,284
Salaries and related costs	134,841			117,931			259,395			228,972
Rent and occupancy costs	13,457			12,615			27,205			25,366
Depreciation and amortization	7,603			6,493			14,942			12,752
Selling and promotion	7,120			7,109			14,666			13,619
Other	19,334			19,829			39,273			36,956
Total operating expenses	859,694			740,420			1,627,301			1,378,462
Operating income	68,305			58,246			125,862			107,054
Interest expense	(219		)	(23		)	(248		)	(28		)
Interest income	2,725			1,258			4,872			2,264
Other, net	874		��	644			2,070			1,801
Other income, net	3,380			1,879			6,694			4,037
Earnings before income taxes and minority interest	71,685			60,125			132,556			111,091
Income tax expense	25,712			21,372			47,786			39,532
Net earnings before minority interest	45,973			38,753			84,770			71,559
Minority interest	(1,329		)	(1,141		)	(2,382		)	(2,103		)
Net earnings	$	44,644		$	37,612		$	82,388		$	69,456
Diluted earnings per share	$	0.40		$	0.34		$	0.74		$	0.63
Basic earnings per share	$	0.42		$	0.36		$	0.77		$	0.66
Weighted average diluted shares outstanding	111,417,781			110,656,193			111,776,854			110,188,368
Weighted average basic shares outstanding	106,776,046			105,597,413			106,752,363			105,364,264

4

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2005			2004			2005			2004
Operating Activities:
Net earnings	$	44,644		$	37,612		$	82,388		$	69,456
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable	(394		)	(438		)	(358		)	244
Deferred income tax expense	3,728			5,033			7,987			9,880
Tax benefits from employee stock plans	6,019			8,118			8,955			10,040
Depreciation and amortization	7,603			6,493			14,942			12,752
Gain on sale of property and equipment	(26		)	(61		)	(45		)	(48		)
Impairment write down of other assets	—			2,000			—			2,000
Other	1,220			819			293			1,548
Changes in operating assets and liabilities:
Increase in accounts receivable	(45,318		)	(62,034		)	(1,648		)	(74,612		)
Increase in other current assets	(4,539		)	(9,288		)	(1,746		)	(8,565		)
Increase in minority interest	833			857			1,670			1,819
Increase in accounts payable and other current liabilities	33,183			44,077			30,225			84,649
Net cash provided by operating activities	46,953			33,188			142,663			109,163
Investing Activities:
Decrease (increase) in short-term investments	631			(30		)	(12		)	1
Purchase of property and equipment	(14,175		)	(11,655		)	(43,192		)	(20,293		)
Proceeds from sale of property and equipment	107			235			249			287
Other	(673		)	909			(1,339		)	228
Net cash used in investing activities	(14,110		)	(10,541		)	(44,294		)	(19,777		)
Financing Activities:
Borrowings (repayments) of short-term debt, net	43			2			(2,130		)	(213		)
Proceeds from issuance of common stock	8,700			10,064			11,075			11,491
Repurchases of common stock	(35,486		)	(10,247		)	(50,013		)	(11,784		)
Dividends Paid	(16,055		)	(11,642		)	(16,055		)	(11,642		)
Net cash used in financing activities	(42,798		)	(11,823		)	(57,123		)	(12,148		)
Effect of exchange rate changes on cash	(8,562		)	(2,691		)	(11,356		)	(611		)
Increase (decrease) in cash and cash equivalents	(18,517		)	8,133			29,890			76,627
Cash and cash equivalents at beginning of period	457,390			364,326			408,983			295,832
Cash and cash equivalents at end of period	438,873			372,459			438,873			372,459
Interest and taxes paid:
Interest	214			22			234			32
Income tax	18,444			18,282			28,560			26,747

5

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES

Business Segment Information

(In thousands)

(Unaudited)

	United		Other	Far		Australia/	Latin	Middle	Elimi-		Consoli-
	States		N. America	East	Europe	New Zealand	America	East	nations		dated
Three months ended June 30, 2005
Revenues from unaffiliated customers	$	182,105	23,405	519,774	133,903	11,745	15,561	41,506			927,999
Transfers between geographic areas	$	19,232	1,178	3,126	5,583	1,425	1,879	1,926	(34,349	)	—
Total revenues	$	201,337	24,583	522,900	139,486	13,170	17,440	43,432	(34,349	)	927,999
Net revenues	$	101,950	12,839	66,894	44,724	7,054	6,885	10,314			250,660
Operating income	$	22,748	3,055	30,193	7,391	1,632	1,488	1,798			68,305
Identifiable assets at quarter end	$	666,572	47,503	317,473	289,708	23,903	23,256	43,215	5,619		1,417,249
Capital expenditures	$	10,465	207	1,074	1,309	469	361	290			14,175
Depreciation and amortization	$	3,713	362	1,216	1,499	172	286	355			7,603
Equity	$	898,526	20,124	246,388	85,900	15,148	8,731	20,888	(463,612	)	832,093
Three months ended June 30, 2004
Revenues from unaffiliated customers	$	152,226	18,954	453,309	118,685	10,673	12,365	32,454			798,666
Transfers between geographic areas	$	16,781	942	2,834	4,313	1,325	1,519	1,505	(29,219	)	—
Total revenues	$	169,007	19,896	456,143	122,998	11,998	13,884	33,959	(29,219	)	798,666
Net revenues	$	88,846	10,411	63,841	39,334	5,984	5,013	8,794			222,223
Operating income	$	14,913	2,311	30,357	7,032	1,389	595	1,649			58,246
Identifiable assets at quarter end	$	613,064	39,078	218,148	256,567	19,507	19,532	32,791	7,895		1,206,582
Capital expenditures	$	4,372	546	2,657	2,165	466	559	890			11,655
Depreciation and amortization	$	3,363	285	946	1,234	152	160	353			6,493
Equity	$	757,654	14,545	161,949	70,674	12,949	4,065	14,660	(323,849	)	712,647
Six months ended June 30, 2005
Revenues from unaffiliated customers	$	350,776	43,614	961,787	260,743	23,485	28,665	84,093			1,753,163
Transfers between geographic areas	$	35,626	2,347	5,848	10,998	2,647	3,438	3,783	(64,687	)	—
Total revenues	$	386,402	45,961	967,635	271,741	26,132	32,103	87,876	(64,687	)	1,753,163
Net revenues	$	196,019	24,195	127,551	86,894	13,769	12,543	20,372			481,343
Operating income	$	41,036	5,291	57,828	12,778	3,290	2,441	3,198			125,862
Identifiable assets at quarter end	$	666,572	47,503	317,473	289,708	23,903	23,256	43,215	5,619		1,417,249
Capital expenditures	$	36,437	512	2,150	2,519	537	552	485			43,192
Depreciation and amortization	$	7,222	729	2,386	3,012	326	547	720			14,942
Equity	$	898,526	20,124	246,388	85,900	15,148	8,731	20,888	(463,612	)	832,093
Six months ended June 30, 2004
Revenues from unaffiliated customers	$	288,783	36,087	820,967	230,915	20,489	23,943	64,332			1,485,516
Transfers between geographic areas	$	31,277	1,747	5,190	8,321	2,434	3,099	2,842	(54,910	)	—
Total revenues	$	320,060	37,834	826,157	239,236	22,923	27,042	67,174	(54,910	)	1,485,516
Net revenues	$	169,709	19,966	119,550	77,043	11,639	9,897	16,915			424,719
Operating income	$	28,106	4,303	55,019	12,599	2,624	1,268	3,135			107,054
Identifiable assets at quarter end	$	613,064	39,078	218,148	256,567	19,507	19,532	32,791	7,895		1,206,582
Capital expenditures	$	7,497	1,052	4,641	4,321	576	725	1,481			20,293
Depreciation and amortization	$	6,672	569	1,793	2,447	301	335	635			12,752
Equity	$	757,654	14,545	161,949	70,674	12,949	4,065	14,660	(323,849	)	712,647

6