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
	Seattle, Washington 98104
	CONTACTS:
	Jeffrey S. Musser	Bradley S. Powell	Geoffrey Buscher
	President and Chief Executive Officer	Senior Vice President and Chief Financial Officer	Director - Investor Relations
	(206) 674-3433	(206) 674-3412	(206) 892-4510

FOR IMMEDIATE RELEASE

EXPEDITORS REPORTS SECOND QUARTER 2020 EPS OF $1.09

SEATTLE, WASHINGTON - August 4, 2020, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced second 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 24% to $1.09

• Net Earnings Attributable to Shareholders increased 20% to $184 million

• Operating Income increased 29% to $248 million

• Revenues increased 27% to $2.6 billion

• Airfreight tonnage volume decreased 10% and ocean container volume decreased 14%

“Like so many companies, the COVID-19-related impacts to our business have been significant and widespread, as the retail, auto, aviation, energy and other sectors continued to be severely disrupted by shutdowns and supply chain dislocations,” said Jeffrey S. Musser, President and Chief Executive Officer. “While volumes for all of our products were down, as we would have expected during such unprecedented conditions, our airfreight revenue was much greater than anticipated. The air market has been particularly unsettled, with the cancellation of so many passenger flights limiting access to passenger belly space and requiring the increased use of charters to meet customer needs. While air capacity has been tight, demand for shipping technology-related equipment, medical equipment and supplies and other priority goods has been intense, creating a supply and demand imbalance and a spike in buy and sell rates. Our employees’ ability to perform at an extremely high level during such turmoil attests to our strong relationships with our customers and carriers, as we were able to access capacity and execute well under such trying conditions. Airfreight buy and sell rates, which peaked in April and May and started to decline in June, remain highly volatile and continue to be unpredictable.

“Buy and sell rates were much less volatile across our other products, even as volumes were down due to COVID-19. Despite a decrease in ocean volumes throughout the marketplace, capacity remains tight as carriers have continued to take steps to manage their capacity and costs.

“Perhaps needless to say, these times have been very challenging for all of us and I appreciate how well our team has performed under such conditions. All of our offices around the world remain open and continue to serve our customers at the highest level, proving that our employees remain our most valuable assets. Our business is service-based and we believe that employee retention remains critical to our long-term success. To that end and true to our company culture, we did not lay off any employees, although headcount was down slightly due to normal employee attrition. We also increased paid sick leave to support those employees unfortunate to have either contracted COVID-19 or to have shown symptoms of the virus.

“We remain extremely appreciative to all of our dedicated employees, including those vital members who report to work each day to facilitate the essential movement of cargo around the world. We are also very thankful to the majority of our employees who have not yet been able to return to the in-person office environment and recognize the extra effort required to work under such conditions. To successfully manage our way through this pandemic, we relied on the strength of our highly connected information systems and have implemented our business continuity plans around the world in support of all of our employees to safeguard their health and safety.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “Compared to a year ago, the effects of COVID-19 led to lower volumes for all products. Air tonnage out of North Asia, however, increased 14%, driven by goods needed to support remote work and to combat COVID-19. We are unable to remember a time when the operating environment has been so uncertain. Given that unpredictability, we will keep costs in check and focus on increasing operational efficiencies and gaining profitable market share. We will also use our strong financial position to continue to make investments in our strategic initiatives. Not knowing how or when the global economy will recover, we remain a strong, healthy, and unified organization that has demonstrated resiliency under the most trying conditions and believe we are well-prepared for the post-COVID economy, no matter what that looks like.”

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 of this release.

Expeditors International of Washington, Inc.

Second Quarter 2020 Earnings Release, August 4, 2020

Financial Highlights for the three and six months ended June 30, 2020 and 2019 (Unaudited)

(in 000's of US dollars except per share data)

	Three months ended June 30,					Six months ended June 30,
	2020		2019		% Change	2020		2019		% Change
Revenues	$	2,580,632	$	2,035,579	27%	$	4,482,496	$	4,055,630	11%
Directly related cost of transportation and   other expenses1	$	1,831,041	$	1,373,884	33%	$	3,117,769	$	2,739,821	14%
Salaries and other operating expenses2	$	501,965	$	469,494	7%	$	958,046	$	936,007	2%
Operating income	$	247,626	$	192,201	29%	$	406,681	$	379,802	7%
Net earnings attributable to shareholders	$	183,869	$	153,149	20%	$	306,213	$	292,848	5%
Diluted earnings attributable to    shareholders per share	$	1.09	$	0.88	24%	$	1.80	$	1.67	8%
Basic earnings attributable to shareholders    per share	$	1.10	$	0.90	22%	$	1.83	$	1.71	7%
Diluted weighted average shares    outstanding		169,290		174,466			170,382		174,953
Basic weighted average shares outstanding		166,767		171,003			167,751		171,425

¹Directly 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 Condensed Consolidated Statements of Earnings.

²Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings

During the three and six months ended June 30, 2020, we repurchased 0.4 million and 4.4 million shares of common stock at an average price of $77.46 and $71.41 per share, respectively. During the three and six months ended June 30, 2019, we repurchased 2.6 million and 3.2 million shares of common stock at an average price of $73.03 and $73.47 per share, respectively.

	Employee Full-time Equivalents June 30,
	2020		2019
North America		6,749		6,893
Europe		3,419		3,439
North Asia		2,413		2,532
South Asia		1,654		1,661
Middle East, Africa and India		1,528		1,550
Latin America		823		873
Information Systems		971		922
Corporate		380		379
Total		17,937		18,249

	Second quarter year-over-year percentage decrease in:
	Airfreight kilos	Ocean freight FEU
2020
April	(7)%	(10)%
May	(13)%	(17)%
June	(12)%	(15)%
Quarter	(10)%	(14)%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on August 7, 2020 will be considered in management's 8-K “Responses to Selected Questions.”

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 the impacts to our business as a result of the Novel Coronavirus (COVID-19); our employees’ ability to continue to perform at a high level; airfreight buy and sell rates; our access to carrier capacity; our ability to keep our global offices open and operating; employee retention; employee health and safety; 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; the impact of the 2017 Tax Act and related interpretations 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.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

	June 30, 2020			December 31, 2019
Assets:
Current Assets:
Cash and cash equivalents	$	1,180,455		$	1,230,491
Accounts receivable, less allowance for credit loss of    $5,347 at June 30, 2020 and $11,143 at December 31, 2019		1,460,324			1,315,091
Deferred contract costs		147,932			131,783
Other		69,560			92,558
Total current assets		2,858,271			2,769,923
Property and equipment, less accumulated depreciation and    amortization of $494,773 at June 30, 2020 and $478,906 at    December 31, 2019		497,762			499,344
Operating lease right-of-use assets		424,516			390,035
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		5,300			8,034
Other assets, net		16,401			16,621
Total assets	$	3,810,177		$	3,691,884
Liabilities:
Current Liabilities:
Accounts payable	$	755,971		$	735,695
Accrued expenses, primarily salaries and related costs		257,923			189,446
Contract liabilities		172,148			154,183
Current portion of operating lease liabilities		69,740			65,367
Federal, state and foreign income taxes		32,287			23,627
Total current liabilities		1,288,069			1,168,318
Noncurrent portion of operating lease liabilities		360,510			326,347
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued		—		—
Common stock, par value $0.01 per share. Issued and    outstanding: 166,816 shares at June 30, 2020 and 169,622    shares at December 31, 2019		1,668			1,696
Additional paid-in capital		12,221			3,203
Retained earnings		2,298,387			2,321,316
Accumulated other comprehensive loss		(153,158	)		(131,187	)
Total shareholders’ equity		2,159,118			2,195,028
Noncontrolling interest		2,480			2,191
Total equity		2,161,598			2,197,219
Total liabilities and equity	$	3,810,177		$	3,691,884

04-August-2020 Expeditors International of Washington, Inc. Page 3 of 7

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Revenues:
Airfreight services	$	1,434,590	$	741,577	$	2,143,629	$	1,456,478
Ocean freight and ocean services		491,712		543,809		985,139		1,112,450
Customs brokerage and other services		654,330		750,193		1,353,728		1,486,702
Total revenues		2,580,632		2,035,579		4,482,496		4,055,630
Operating Expenses:
Airfreight services		1,097,073		542,639		1,617,242		1,051,849
Ocean freight and ocean services		363,599		390,299		730,082		810,630
Customs brokerage and other services		370,369		440,946		770,445		877,342
Salaries and related		395,107		356,351		737,147		713,261
Rent and occupancy		41,375		40,897		83,899		82,420
Depreciation and amortization		14,109		12,677		26,769		26,070
Selling and promotion		3,113		11,643		11,356		22,719
Other		48,261		47,926		98,875		91,537
Total operating expenses		2,333,006		1,843,378		4,075,815		3,675,828
Operating income		247,626		192,201		406,681		379,802
Other Income (Expense):
Interest income		2,559		6,516		7,366		12,622
Other, net		797		2,262		4,181		3,927
Other income, net		3,356		8,778		11,547		16,549
Earnings before income taxes		250,982		200,979		418,228		396,351
Income tax expense		66,794		47,449		111,258		102,710
Net earnings		184,188		153,530		306,970		293,641
Less net earnings attributable to the noncontrolling    interest		319		381		757		793
Net earnings attributable to shareholders	$	183,869	$	153,149	$	306,213	$	292,848
Diluted earnings attributable to shareholders per share	$	1.09	$	0.88	$	1.80	$	1.67
Basic earnings attributable to shareholders per share	$	1.10	$	0.90	$	1.83	$	1.71
Weighted average diluted shares outstanding		169,290		174,466		170,382		174,953
Weighted average basic shares outstanding		166,767		171,003		167,751		171,425

04-August-2020 Expeditors International of Washington, Inc. Page 4 of 7

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Operating Activities:
Net earnings	$	184,188		$	153,530		$	306,970		$	293,641
Adjustments to reconcile net earnings to net cash from    operating activities:
Provisions for losses (recoveries) on accounts receivable		2,389			1,584			4,209			(304	)
Deferred income tax expense		9,287			3,697			4,148			5,805
Stock compensation expense		21,638			23,824			32,794			37,206
Depreciation and amortization		14,109			12,677			26,769			26,070
Other, net		118			(29	)		551			160
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(185,055	)		(28,187	)		(168,375	)		202,290
Increase (decrease) in accounts payable and accrued    expenses		106,760			39,900			107,677			(82,383	)
(Increase) decrease in deferred contract costs		(2,333	)		(13,010	)		(18,401	)		18,249
(Decrease) increase in contract liabilities		(595	)		13,003			20,606			(23,722	)
Increase (decrease) in income taxes payable, net		20,154			(49,606	)		30,642			(32,613	)
Decrease (increase) in other, net		16,061			(1,676	)		4,131			791
Net cash from operating activities		186,721			155,707			351,721			445,190
Investing Activities:
Purchase of property and equipment		(22,114	)		(12,987	)		(28,241	)		(22,422	)
Other, net		(68	)		1,038			(211	)		1,293
Net cash from investing activities		(22,182	)		(11,949	)		(28,452	)		(21,129	)
Financing Activities:
Proceeds from issuance of common stock		29,187			32,287			52,586			59,477
Repurchases of common stock		(30,985	)		(190,589	)		(314,225	)		(234,923	)
Dividends Paid		(86,815	)		(85,184	)		(86,815	)		(85,184	)
Payments for taxes related to net share settlement of equity    awards		(9,170	)		(6,674	)		(10,566	)		(6,674	)
Net cash from financing activities		(97,783	)		(250,160	)		(359,020	)		(267,304	)
Effect of exchange rate changes on cash and cash equivalents		1,726			(377	)		(14,285	)		2,158
Change in cash and cash equivalents		68,482			(106,779	)		(50,036	)		158,915
Cash and cash equivalents at beginning of period		1,111,973			1,189,429			1,230,491			923,735
Cash and cash equivalents at end of period	$	1,180,455		$	1,082,650		$	1,180,455		$	1,082,650
Taxes Paid:
Income taxes	$	38,504		$	97,715		$	73,808		$	134,968

04-August-2020 Expeditors International of Washington, Inc. Page 5 of 7

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 June 30, 2020:
Revenues1	$	639,231		74,314		37,553		1,117,058		224,313		387,430		101,611		(878	)		2,580,632
Directly related cost of transportation and    other expenses2	$	354,624		41,449		22,701		907,915		160,355		271,540		72,908		(451	)		1,831,041
Salaries and other operating expenses3	$	207,703		25,283		12,112		97,171		39,184		95,757		25,188		(433	)		501,965
Operating income	$	76,904		7,582		2,740		111,972		24,774		20,133		3,515		6			247,626
Identifiable assets at period end	$	1,886,463		170,873		72,912		669,335		213,007		581,988		221,381		(5,782	)		3,810,177
Capital expenditures	$	19,076		1,148		216		385		182		993		114		—			22,114
Equity	$	1,399,124		71,165		29,758		306,022		108,777		168,060		116,279		(37,587	)		2,161,598
For the three months ended June 30, 2019:
Revenues1	$	681,076		85,537		38,757		621,951		181,380		319,331		108,311		(764	)		2,035,579
Directly related cost of transportation and    other expenses2	$	386,093		50,336		22,043		487,554		132,487		220,676		75,089		(394	)		1,373,884
Salaries and other operating expenses3	$	207,060		26,343		14,368		69,944		33,380		89,340		29,423		(364	)		469,494
Operating income	$	87,923		8,858		2,346		64,453		15,513		9,315		3,799		(6	)		192,201
Identifiable assets at period end	$	1,819,718		176,151		73,197		580,311		193,771		581,518		229,692		(7,368	)		3,646,990
Capital expenditures	$	8,985		768		145		300		428		1,914		447		—			12,987
Equity	$	1,303,381		83,417		31,014		282,192		107,229		168,570		109,790		(33,199	)		2,052,394

	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the six months ended June 30, 2020:
Revenues1	$	1,289,638		156,145		75,443		1,655,013		393,355		708,070		206,650		(1,818	)		4,482,496
Directly related cost of transportation and    other expenses2	$	728,585		87,339		46,466		1,333,216		281,637		493,538		147,884		(896	)		3,117,769
Salaries and other operating expenses3	$	433,647		48,995		23,861		154,604		69,092		177,611		51,138		(902	)		958,046
Operating income	$	127,406		19,811		5,116		167,193		42,626		36,921		7,628		(20	)		406,681
Identifiable assets at period end	$	1,886,463		170,873		72,912		669,335		213,007		581,988		221,381		(5,782	)		3,810,177
Capital expenditures	$	23,573		1,209		318		710		370		1,638		423		—			28,241
Equity	$	1,399,124		71,165		29,758		306,022		108,777		168,060		116,279		(37,587	)		2,161,598
For the six months ended June 30, 2019:
Revenues1	$	1,340,859		176,947		72,936		1,254,804		358,559		632,021		220,986		(1,482	)		4,055,630
Directly related cost of transportation and    other expenses2	$	753,448		106,576		41,158		986,200		262,298		436,571		154,592		(1,022	)		2,739,821
Salaries and other operating expenses3	$	425,475		50,553		26,796		138,371		64,841		172,183		58,234		(446	)		936,007
Operating income	$	161,936		19,818		4,982		130,233		31,420		23,267		8,160		(14	)		379,802
Identifiable assets at period end	$	1,819,718		176,151		73,197		580,311		193,771		581,518		229,692		(7,368	)		3,646,990
Capital expenditures	$	15,900		996		238		644		604		2,896		1,144		—			22,422
Equity	$	1,303,381		83,417		31,014		282,192		107,229		168,570		109,790		(33,199	)		2,052,394

¹Beginning in the second quarter of 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 impact of these changes on reported segment revenues was immaterial and in the six months ended June 30, 2019, segment revenues have not been revised.

²Directly 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 Condensed Consolidated Statements of Earnings.

³Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

The Company’s consolidated financial results in the first and second quarter 2020 were significantly impacted by the effects of the global pandemic and are expected to be further impacted in the remainder of 2020. The impact is affecting the Company’s geographical segments unevenly.

04-August-2020 Expeditors International of Washington, Inc. Page 6 of 7

In the second quarter of 2020, North Asia experienced significant increases in airfreight services revenues and related expenses as a result of demand for time-sensitive delivery of technology equipment and medical equipment and supplies from China, which combined with reductions in airfreight supply resulted in significantly higher rates. In the second quarter 2020 and 2019, the People's Republic of China, including Hong Kong, represented 37% and 26%, respectively, of the Company’s total revenues and 38% and 28%, respectively, of the Company’s total operating income.

This is in contrast with slower activity in North Asia in the first quarter of 2020 as the global pandemic resulted in temporary closures and limited operations from the Company’s China offices and shipments that were rerouted or delayed by customers and service providers taking their own precautionary measures. In the first half of 2020 and 2019, the People's Republic of China, including Hong Kong, represented 31% and 26%, respectively, of the Company’s total revenues and 33% and 28%, respectively, of the Company’s total operating income.

04-August-2020 Expeditors International of Washington, Inc. Page 7 of 7