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 16, 2021 (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 16, 2021, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing fourth quarter 2020 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 16, 2021 issued by Expeditors International of Washington, Inc.
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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 16, 2021	/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 2020 EPS OF $1.16

SEATTLE, WASHINGTON - February 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 (EPS^1^) 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.

_______________________

^1^Diluted 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.

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 expenses^1^	$	2,340,603	$	1,398,638	67%	$	7,188,790	$	5,538,958	30%
Salaries and other operating expenses^2^	$	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

^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.

	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<br><br><br>percentage increase in:
---	---	---
	Airfreight<br><br><br>kilos	Ocean freight<br><br><br>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 SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

			December 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 related costs	257,021			189,446
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 liabilities	364,185			326,347
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: 169,294 shares at December 31, 2020 and 169,622 shares at December 31, 2019	1,693			1,696
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

All values are in US Dollars.

16-February-2021	Expeditors International of Washington, Inc.	Page 3 of 6

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<br><br><br>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
16-February-2021	Expeditors International of Washington, Inc.	Page 4 of 6
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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
16-February-2021	Expeditors International of Washington, Inc.	Page 5 of 6
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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, 2020:
Revenues^1^	$	800,663		94,153		41,527		1,300,215		329,050			146,596		(1,028	)		3,169,188
Directly related cost of transportation and other expenses^2^	$	460,288		60,625		23,422		1,103,063		256,677			111,179		(529	)		2,340,603
Salaries and other operating expenses^3^	$	245,721		26,367		11,894		96,498		40,251			24,905		(493	)		546,774
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
For the three months ended December 31, 2019:
Revenues^1^	$	678,979		89,370		38,925		615,401		188,278			107,104		(995	)		2,044,941
Directly related cost of transportation and other expenses^2^	$	386,114		54,372		23,148		495,267		137,231			75,813		(555	)		1,398,638
Salaries and other operating expenses^3^	$	223,703		25,371		14,170		62,813		30,154			26,459		(441	)		465,963
Operating income	$	69,162		9,627		1,607		57,321		20,893			4,832		1			180,340
Identifiable assets at period end	$	1,978,307		153,813		72,677		538,526		178,336			219,953		(1,304	)		3,691,884
Capital expenditures	$	5,122		844		485		600		323			489		—			9,079
Depreciation and amortization	$	7,581		494		324		1,227		449			474		—			12,494
Equity	$	1,521,059		65,100		29,148		247,725		94,727			114,726		(34,574	)		2,197,219

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, 2020:
Revenues^1^	$	2,776,546		328,427		156,163		3,838,332		989,633			487,011		(3,761	)		10,116,481
Directly related cost of transportation and other expenses^2^	$	1,568,461		192,875		93,249		3,157,086		738,648			359,682		(1,952	)		7,188,790
Salaries and other operating expenses^3^	$	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
For the twelve months ended December 31, 2019:
Revenues^1^	$	2,712,067		354,405		150,202		2,494,556		743,406			443,487		(3,366	)		8,175,426
Directly related cost of transportation and other expenses^2^	$	1,528,815		212,369		87,297		1,970,662		544,873			311,997		(2,023	)		5,538,958
Salaries and other operating expenses^3^	$	859,946		101,654		55,512		271,594		127,478			112,844		(1,325	)		1,869,776
Operating income	$	323,306		40,382		7,393		252,300		71,055			18,646		(18	)		766,692
Identifiable assets at period end	$	1,978,307		153,813		72,677		538,526		178,336			219,953		(1,304	)		3,691,884
Capital expenditures	$	28,666		2,353		1,556		1,767		1,558			1,891		—			47,022
Depreciation and amortization	$	31,049		1,881		1,489		5,263		1,912			1,958		—			50,950
Equity	$	1,521,059		65,100		29,148		247,725		94,727			114,726		(34,574	)		2,197,219

All values are in Euros.

^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.

16-February-2021	Expeditors International of Washington, Inc.	Page 6 of 6