8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report:  February 22, 2022 (Date of earliest event reported)

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

Washington	000-13468	91-1069248
(State or other jurisdiction<br><br><br>of incorporation or organization)	(Commission<br><br><br>File No.)	(IRS Employer<br><br><br>Identification Number)
1015 Third Avenue,<br><br><br>Seattle, Washington	(206) 674-3400	98104
(Address of principal executive offices)	(Registrant's telephone number, including area code)	(Zip Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br><br><br>Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EXPD	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On February 22, 2022, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing December 31, 2021 financial results.  A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)	The following items are filed as exhibits to this report:
99.1	Press release, dated February 22, 2022 issued by Expeditors International of Washington, Inc.
---	---
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
February 22, 2022	/S/ Bradley S. Powell
	Bradley S. Powell, Senior Vice President and Chief Financial Officer

expd-ex991_6.htm

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 FOURTH QUARTER 2021 EPS OF $2.66

COMPANY CONTINUES TO ASSESS IMPACT OF CYBERATTACK

SEATTLE, WASHINGTON - February 22, 2022, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced fourth quarter 2021 financial results including the following highlights compared to the same quarter of 2020:

•	Diluted Net Earnings Attributable to Shareholders per share (EPS^1^) increased 129% to $2.66
•	Net Earnings Attributable to Shareholders increased 128% to $453 million
---	---
•	Operating Income increased 121% to $624 million
---	---
•	Revenues increased 81% to $5.4 billion
---	---
•	Airfreight tonnage volume increased 13% and ocean container volume decreased 4%
---	---

“While the global supply chain remains stretched beyond recognizable limits, we continue to do all we can to secure carrier space for our customers and move their freight through and around the many bottlenecks in the air, over the ocean, and on land,” said Jeffrey S. Musser, President and Chief Executive Officer. “Roughly two years of pandemic-induced disruption have led to unprecedented conditions throughout our industry, with little relief in sight. There is still too little international air capacity, as travellers have been kept from flying abroad; the ocean ports are too congested to accommodate many of the ships that need to load and unload their containers; and worker shortages are severely limiting overland capacity to support the freight that is able to arrive in port.

“We have worked our strong carrier relationships to secure as much capacity as we could get on behalf of all of the shippers looking for space during the quarter, but the severe imbalance between capacity and demand continues to heavily impact our industry. There is simply not enough carrier capacity in the air or on the oceans to accommodate the heavy demand for cargo space, particularly from China to the U.S., where historically high average buy and sell rates have been the most elevated.

“Despite the lack of space, we experienced record-high air tonnage in the fourth quarter, as we used more air charters than at any other time in our company’s history, even with extremely elevated rates. Ocean container volumes, by contrast, declined during the quarter, as we were somewhat limited in our ability to secure necessary capacity from ocean carriers and hampered by the time and resources required to process shipments and meet sharply growing customer demand.

“Once again, I offer my sincere gratitude to our highly motivated and dedicated employees and thank them for their significant extra efforts all throughout 2021. While many companies are experiencing a decline in headcount during the so-called Great Resignation, we were able to grow our valuable employee base. That serves as testament to the culture at Expeditors: that we are a company where people are proud to work and one where unusually stressful times have inspired our very best execution aimed at outstanding customer service.”

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, “In addition to our air and ocean products, we also experienced strong financial results in Customs Brokerage, Order Management, Transcon and Distribution. All of these areas saw growing business from both current customers and new ones as well. Our strong operating efficiency is a credit to the strength and resilience of our workforce, as our employees have been successfully able to secure the capacity needed to service our customers in these difficult conditions. While this has helped us produce strong financial results, we caution that should demand and rates return to pre-pandemic levels – whenever that may be – our revenues, expenses, and operating income are likely to decline from the all-time highs that we experienced in 2021.”

COMPANY CONTINUES TO ASSESS IMPACT OF CYBERATTACK

In a separate announcement on February 20, 2022, Expeditors determined that our company was the subject of a targeted cyberattack. Upon discovering the incident, we shut down most of our operating systems globally to manage the safety of our overall global systems environment. The situation is evolving, and we are working with global cybersecurity experts to manage the situation. Further communications will be shared as we manage through this significant event. Depending on the length of the shutdown of our operations, the impact of this cyberattack could have a material adverse impact on our business, revenues, results of operations and reputation.

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

_______________________

^1^Diluted earnings attributable to shareholders per share.

NOTE:  See Disclaimer on Forward-Looking Statements in this release.

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.

_______________________

^1^Diluted earnings attributable to shareholders per share.

NOTE:  See Disclaimer on Forward-Looking Statements in this release.

Expeditors International of Washington, Inc.

Fourth quarter 2021 Earnings Release, February 22, 2022

Financial Highlights for the three and twelve months ended December 31, 2021 and 2020 (Unaudited)

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

	Three months ended December 31,					Twelve months ended December 31,
	2021		2020		% Change	2021		2020		% Change
Revenues^3^	$	5,396,343	$	2,980,835	81%	$	16,523,517	$	9,584,393	72%
Directly related cost of transportation and other expenses ^1, 3^	$	4,026,748	$	2,152,249	87%	$	12,058,155	$	6,656,702	81%
Salaries and other operating expenses ^2^	$	746,066	$	546,775	36%	$	2,556,036	$	1,987,254	29%
Operating income	$	623,529	$	281,811	121%	$	1,909,326	$	940,437	103%
Net earnings attributable to shareholders	$	452,832	$	198,620	128%	$	1,415,492	$	696,140	103%
Diluted earnings attributable to shareholders per share	$	2.66	$	1.16	129%	$	8.27	$	4.07	103%
Basic earnings attributable to shareholders per share	$	2.69	$	1.17	130%	$	8.37	$	4.14	102%
Diluted weighted average shares outstanding		170,293		171,692			171,250		170,896
Basic weighted average shares outstanding		168,393		169,473			169,145		168,333

^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 Condensed 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 Condensed Consolidated Statements of Earnings.

^3^Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management’s compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis.

During the years ended December 31, 2021 and 2020, we repurchased 4.4 million and 4.6 million shares of common stock at an average price of $117.54 and $72.26 per share, respectively. In addition, during 2021 and 2020, we paid cash dividends of $1.16 and $1.04 per share, respectively.

	Employee Full-time Equivalents as of December 31,
	2021		2020
North America		7,587		6,724
Europe		3,984		3,492
North Asia		2,487		2,398
South Asia		1,785		1,631
Middle East, Africa and India		1,511		1,497
Latin America		832		784
Information Systems		994		983
Corporate		408		399
Total		19,588		17,908

Disclaimer on Forward-Looking Statements:

NOTE:  See Disclaimer on Forward-Looking Statements in this release.

	Fourth quarter year-over-year<br><br><br>percentage increase (decrease) in:
	Airfreight<br><br><br>kilos	Ocean freight<br><br><br>FEU
2021
October	13%	2%
November	13%	(7)%
December	12%	(7)%
Quarter	13%	(4)%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 25,2022 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,” based on management’s views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our belief that a decline in demand to pre-pandemic levels could lead to a decline in operating results; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization where people want to work. These risks and uncertainties also include but are not limited to our ongoing investigation of the cyberattack, the length of time that our global operations are not fully functional, and the adverse material impact that this cyberattack may have on our business, revenues, results of operations and reputation. 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, and the ability of third-party providers to perform and potential litigation. 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, 2020 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, 2021. 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 SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

			December 31, 2020
Assets:
Current Assets:
Cash and cash equivalents	1,728,692		$	1,527,791
Accounts receivable, less allowance for credit loss of 6,686 and 5,579 at December 31, 2021 and 2020, respectively	3,810,286			1,998,055
Deferred contract costs	987,266			327,448
Other	108,801			110,250
Total current assets	6,635,045			3,963,544
Property and equipment, net	487,870			506,425
Operating lease right-of-use assets	459,158			432,723
Goodwill	7,927			7,927
Deferred federal and state income taxes, net	729			—
Other assets, net	19,200			16,884
Total assets	7,609,929		$	4,927,503
Liabilities:
Current Liabilities:
Accounts payable	2,012,461		$	1,136,859
Accrued expenses, primarily salaries and related costs	403,625			257,021
Contract liabilities	1,142,026			379,722
Current portion of operating lease liabilities	82,019			74,004
Federal, state and foreign income taxes	86,166			45,437
Total current liabilities	3,726,297			1,893,043
Noncurrent portion of operating lease liabilities	385,641			364,185
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. Issued and outstanding: 167,210 shares and 169,294 shares at December 31, 2021 and 2020, respectively	1,672			1,693
Additional paid-in capital	3,160			157,496
Retained earnings	3,620,008			2,600,201
Accumulated other comprehensive loss	(130,414	)		(99,753	)
Total shareholders’ equity	3,494,426			2,659,637
Noncontrolling interest	3,565			3,590
Total equity	3,497,991			2,663,227
Total liabilities and equity	7,609,929		$	4,927,503

All values are in US Dollars.

Expeditors International of Washington, Inc.	Page 4 of 8

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

	Three months ended December 31,				Twelve months ended December 31,
	2021		2020		2021		2020
Revenues:
Airfreight services	$	2,293,803	$	1,365,575	$	6,771,402	$	4,274,026
Ocean freight and ocean services		1,894,759		751,803		5,545,818		2,342,344
Customs brokerage and other services		1,207,781		863,457		4,206,297		2,968,023
Total revenues		5,396,343		2,980,835		16,523,517		9,584,393
Operating Expenses:
Airfreight services		1,732,127		1,046,603		5,067,380		3,168,808
Ocean freight and ocean services		1,505,140		574,154		4,364,160		1,751,850
Customs brokerage and other services		789,481		531,492		2,626,615		1,736,044
Salaries and related		609,449		427,344		2,062,351		1,538,104
Rent and occupancy		48,911		43,480		186,287		169,863
Depreciation and amortization		12,897		14,339		51,312		56,959
Selling and promotion		5,547		4,135		16,026		18,436
Other		69,262		57,477		240,060		203,892
Total operating expenses		4,772,814		2,699,024		14,614,191		8,643,956
Operating income		623,529		281,811		1,909,326		940,437
Other Income (Expense):
Interest income		2,211		1,545		8,807		10,415
Other, net		101		551		6,483		5,712
Other income, net		2,312		2,096		15,290		16,127
Earnings before income taxes		625,841		283,907		1,924,616		956,564
Income tax expense		171,830		84,382		505,771		258,350
Net earnings		454,011		199,525		1,418,845		698,214
Less net earnings attributable to the noncontrolling<br><br><br>interest		1,179		905		3,353		2,074
Net earnings attributable to shareholders	$	452,832	$	198,620	$	1,415,492	$	696,140
Diluted earnings attributable to shareholders per share	$	2.66	$	1.16	$	8.27	$	4.07
Basic earnings attributable to shareholders per share	$	2.69	$	1.17	$	8.37	$	4.14
Weighted average diluted shares outstanding		170,293		171,692		171,250		170,896
Weighted average basic shares outstanding		168,393		169,473		169,145		168,333
Expeditors International of Washington, Inc.	Page 6 of 8
---	---

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended December 31,						Twelve months ended December 31,
	2021			2020			2021			2020
Operating Activities:
Net earnings	$	454,011		$	199,525		$	1,418,845		$	698,214
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		1,512			977			7,540			5,584
Deferred income tax (benefit) expense		(6,033	)		5,499			(3,690	)		8,371
Stock compensation expense		12,087			17,407			69,385			62,498
Depreciation and amortization		12,897			14,339			51,312			56,959
Other, net		2,267			490			3,790			3,960
Changes in operating assets and liabilities:
Increase in accounts receivable		(491,830	)		(372,753	)		(1,869,827	)		(647,193	)
Increase in accounts payable and accrued expenses		272,280			228,523			1,041,805			430,452
Increase in deferred contract costs		(149,701	)		(89,560	)		(700,273	)		(189,447	)
Increase in contract liabilities		168,551			105,455			803,837			217,699
Increase (decrease) in income taxes payable, net		25,845			19,146			57,867			8,502
Decrease (increase) in other, net		3,111			12,612			(12,097	)		(630	)
Net cash from operating activities		304,997			141,660			868,494			654,969
Investing Activities:
Purchase of property and equipment		(11,447	)		(10,124	)		(36,247	)		(47,543	)
Other, net		(345	)		553			(398	)		1,516
Net cash from investing activities		(11,792	)		(9,571	)		(36,645	)		(46,027	)
Financing Activities:
Proceeds from borrowing on lines of credit, net		(56	)		32			7,512			43
Proceeds from issuance of common stock		6,672			12,329			106,105			186,345
Repurchases of common stock		(289,530	)		(18,162	)		(514,594	)		(332,387	)
Dividends Paid		(97,379	)		(88,114	)		(195,766	)		(174,929	)
Payments for taxes related to net share settlement of equity awards		—			—			(15,172	)		(10,566	)
Distributions to noncontrolling interest		—			—			(1,631	)		—
Net cash from financing activities		(380,293	)		(93,915	)		(613,546	)		(331,494	)
Effect of exchange rate changes on cash and cash equivalents		(4,326	)		24,107			(17,402	)		19,852
Change in cash and cash equivalents		(91,414	)		62,281			200,901			297,300
Cash and cash equivalents at beginning of period		1,820,106			1,465,510			1,527,791			1,230,491
Cash and cash equivalents at end of period	$	1,728,692		$	1,527,791		$	1,728,692		$	1,527,791
Taxes Paid:
Income taxes	$	147,396		$	59,607		$	442,549		$	239,849
Expeditors International of Washington, Inc.	Page 6 of 8
---	---

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Business Segment Information

(In thousands)

(Unaudited)

	UNITED<br><br><br>STATES		OTHER<br><br><br>NORTH<br><br><br>AMERICA		LATIN<br><br><br>AMERICA		NORTH<br><br><br>ASIA		SOUTH<br><br><br>ASIA		OPE	MIDDLE<br><br><br>EAST,<br><br><br>AFRICA<br><br><br>AND<br><br><br>INDIA		ELIMI-<br><br><br>NATIONS			CONSOLI-<br><br><br>DATED
For the three months ended December 31, 2021:
Revenues	$	1,337,772		128,240		63,013		2,154,243		740,305			291,040		(1,089	)		5,396,343
Directly related cost of transportation and other expenses^1^	$	760,915		70,450		39,072		1,824,159		615,659			231,171		(410	)		4,026,748
Salaries and other operating expenses^2^	$	300,474		33,033		15,908		160,862		58,360			42,682		(675	)		746,066
Operating income	$	276,383		24,757		8,033		169,222		66,286			17,187		(4	)		623,529
Identifiable assets at period end	$	3,699,748		265,872		122,327		1,587,659		572,980			350,843		(79,463	)		7,609,929
Capital expenditures	$	7,596		549		171		594		595			343		—			11,447
Depreciation and amortization	$	7,476		439		270		1,269		508			602		—			12,897
Equity	$	2,599,804		111,952		41,743		224,765		140,129			123,598		(38,348	)		3,497,991
For the three months ended December 31, 2020:
Revenues^3^	$	800,663		93,554		41,526		1,148,483		319,687			146,331		(1,028	)		2,980,835
Directly related cost of transportation and other expenses^1,3^	$	460,287		60,026		23,421		951,331		247,314			110,914		(529	)		2,152,249
Salaries and other operating expenses^2^	$	245,722		26,367		11,894		96,498		40,251			24,905		(493	)		546,775
Operating income	$	94,654		7,161		6,211		100,654		32,122			10,512		(6	)		281,811
Identifiable assets at period end	$	2,532,324		186,204		85,085		876,856		272,106			240,984		(18,645	)		4,927,503
Capital expenditures	$	3,328		194		66		417		1,229			1,914		—			10,124
Depreciation and amortization	$	9,235		498		284		1,283		493			455		—			14,339
Equity	$	1,928,945		67,243		32,273		241,155		121,411			114,369		(38,806	)		2,663,227

All values are in Euros.

	UNITED<br><br><br>STATES		OTHER<br><br><br>NORTH<br><br><br>AMERICA		LATIN<br><br><br>AMERICA		NORTH<br><br><br>ASIA		SOUTH<br><br><br>ASIA		OPE	MIDDLE<br><br><br>EAST,<br><br><br>AFRICA<br><br><br>AND<br><br><br>INDIA		ELIMI-<br><br><br>NATIONS			CONSOLI-<br><br><br>DATED
For the twelve months ended December 31, 2021:
Revenues^3^	$	4,344,825		440,226		209,161		6,363,054		2,046,569			865,509		(4,738	)		16,523,517
Directly related cost of transportation and other expenses^1,3^	$	2,491,947		245,842		125,940		5,295,612		1,666,792			675,303		(1,986	)		12,058,155
Salaries and other operating expenses^2^	$	1,019,236		123,147		57,779		515,703		204,574			143,581		(2,744	)		2,556,036
Operating income	$	833,642		71,237		25,442		551,739		175,203			46,625		(8	)		1,909,326
Identifiable assets at period end	$	3,699,748		265,872		122,327		1,587,659		572,980			350,843		(79,463	)		7,609,929
Capital expenditures	$	19,527		983		471		1,786		2,057			1,916		—			36,247
Depreciation and amortization	$	29,826		1,780		1,079		5,047		1,965			2,387		—			51,312
Equity	$	2,599,804		111,952		41,743		224,765		140,129			123,598		(38,348	)		3,497,991
For the twelve months ended December 31, 2020:
Revenues^3^	$	2,776,537		325,878		156,163		3,425,510		961,989			486,331		(3,761	)		9,584,393
Directly related cost of transportation and other expenses^1,3^	$	1,568,452		190,326		93,249		2,744,264		711,004			359,002		(1,952	)		6,656,702
Salaries and other operating expenses^2^	$	877,117		100,687		48,114		332,978		149,269			104,968		(1,779	)		1,987,254
Operating income	$	330,968		34,865		14,800		348,268		101,716			22,361		(30	)		940,437
Identifiable assets at period end	$	2,532,324		186,204		85,085		876,856		272,106			240,984		(18,645	)		4,927,503
Capital expenditures	$	31,604		1,886		564		2,202		2,264			2,629		—			47,543
Depreciation and amortization	$	37,081		1,946		1,194		4,961		1,876			1,872		—			56,959
Equity	$	1,928,945		67,243		32,273		241,155		121,411			114,369		(38,806	)		2,663,227

All values are in Euros.

Expeditors International of Washington, Inc.	Page 7 of 8

^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 Condensed 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 Condensed Consolidated Statements of Earnings.

^3^Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company’s historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders’ equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis.

Expeditors International of Washington, Inc.	Page 8 of 8