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:  November 2, 2004

(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 of incorporation or organization)	(Commission File No.)	(IRS Employer Identification Number)
1015 Third Avenue, 12th Floor, Seattle, Washington		98104
(Address of principal executive offices)		(Zip Code)
(206) 674-3400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)

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:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition.”

On November 2, 2004, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing third quarter 2004 financial results.  A copy of the press release is furnished as Exhibit 99.1 to this report.

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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.

November 2, 2004	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and Chief Executive Officer
November 2, 2004	/s/ R. JORDAN GATES
	R. Jordan Gates, Executive Vice President- Chief Financial Officer and Treasurer

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INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Expeditors International of Washington, Inc., dated November 2, 2004, reporting third quarter 2004 financial results.

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EX-99.1

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 $.39 PER SHARE THIRD QUARTER NET EARNINGS

SEATTLE, WASHINGTON – November 2, 2004, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced record quarterly net earnings of $43,107,000 for the third quarter of 2004, compared with $32,558,000 for the same quarter of 2003, an increase of 32%.  Net revenues for the third quarter of 2004 increased 22% to $240,358,000 as compared with $196,849,000 reported for the third quarter of 2003.  Total revenues and operating income were $897,188,000 and $67,420,000 in 2004 compared with $711,469,000 and $49,380,000 for the same quarter of 2003, an increase of 26% and 37%, respectively.  Diluted net earnings per share for the third quarter were $.39 as compared with $.30 for the same quarter in 2003, an increase of 30%.  The company also reported that same store net revenues and operating income increased 21% and 36%, respectively, for the third quarter of 2004 when compared with 2003.

For the nine months ended September 30, 2004, net earnings rose to $112,563,000 from $85,587,000 in 2003, an increase of 32%.  Net revenues for the nine months increased to $665,077,000 from $545,136,000 for 2003, up 22%. Total revenues and operating income for the nine months were $2,382,704,000 and $174,474,000 in 2004 compared with $1,893,528,000 and $128,214,000 for the same period in 2003, increases of 26% and 36%, respectively.  Diluted net earnings per share for the first three quarters of 2004 were $1.02 as compared with $.79 for the same period of 2003, an increase of 29%.  Same store net revenues and operating income increased 21% and 36%, respectively, for the nine months ended September 30, 2004, when compared with the same period of 2003.

“There isn’t a lot we can add to this story as these numbers pretty much speak for themselves.  We continued to experience significant volume increases during the third quarter as our airfreight tonnage was up over 27% while the ocean NVOCC container count increased over 24%.  With increased volumes came margin pressures in both the air and ocean products.  Fortunately, the increases in cargo volume allowed us to compensate for the higher carrier costs, particularly in ocean freight,” said Peter J. Rose, Chairman and Chief Executive Officer.

“Again, all the credit belongs to our employees as their hard work made these results possible,” Rose stated.  “The fourth quarter is shaping up to be a challenge.  In response to ever rising fuel costs, the asset-based carriers are raising surcharges so rapidly that it is a real chore to smoothly communicate market conditions to our customers,” Rose concluded.

Expeditors is a global logistics company.  Headquartered in Seattle, Washington, the company employs trained professionals in 170 offices and 12 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.

3rd Quarter 2004 Earnings Release

November 2, 2004

Expeditors International of Washington, Inc.

Financial Highlights

Three months and Nine months ended

September 30, 2004 and 2003

Unaudited

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

	Three months ended September 30,				% Inc.		Nine months ended September 30,				% Inc.
	2004		2003				2004		2003
Revenues	$	897,188	$	711,469	26	%	$	2,382,704	$	1,893,528	26	%
Net revenues	$	240,358	$	196,849	22	%	$	665,077	$	545,136	22	%
Operating income	$	67,420	$	49,380	37	%	$	174,474	$	128,214	36	%
Net earnings	$	43,107	$	32,558	32	%	$	112,563	$	85,587	32	%
Diluted earnings per share	$	.39	$	.30	30	%	$	1.02	$	.79	29	%
Basic earnings per share	$	.41	$	.31	32	%	$	1.07	$	.82	30	%
Diluted weighted average shares outstanding	111,206,168		109,190,930				110,480,254		108,927,724
Basic weighted average shares outstanding	106,255,293		105,042,210				105,663,441		104,636,462

New Office Opened during the 3rd Quarter of 2004:

NORTH AMERICA

Calgary, Canada

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 November 3, 2004 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about November 5, 2004.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	September 30, 2004			December 31, 2003
Assets
Current assets:
Cash and cash equivalents	$		377,621	$		295,832
Short-term investments	73			82
Accounts receivable, net	596,771			452,551
Deferred Federal and state income taxes	5,512			3,593
Other current assets	26,821			17,941
Total current assets	1,006,798			769,999
Property and equipment, net	270,528			241,702
Goodwill, net	7,774			7,774
Other intangibles, net	9,976			11,163
Other assets	12,286			13,440
	$	1,307,362		$			1,044,078
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term debt	—			217
Accounts payable	406,606			301,122
Accrued expenses, primarily salaries and related costs	86,625			74,905
Federal, state and foreign income taxes	17,070			10,141
Total current liabilities	$	510,301		$			386,385
Deferred Federal and state income taxes	$	29,388		$			8,968
Minority interest	$	6,003		$			3,224
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 106,358,953 shares at September 30, 2004 and 105,056,454 shares at December 31, 2003	1,064			1,051
Additional paid-in capital	39,788			25,491
Retained earnings	718,138			617,216
Accumulated other comprehensive income	2,680			1,743
Total shareholders’ equity	761,670			645,501
	$	1,307,362		$	1,044,078

Certain 2003 amounts have been reclassified to conform to the 2004 presentation.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except share data)

(Unaudited)

	Three months ended September 30,										Nine months ended September 30,
	2004						2003				2004				2003
Revenues:
Airfreight	$	406,754					$	307,645			$	1,100,231			$	861,973
Ocean freight and ocean services	335,908						284,893				859,063				707,217
Customs brokerage and other services	154,526						118,931				423,410				324,338
Total revenues	897,188						711,469				2,382,704				1,893,528
Operating expenses:
Airfreight consolidation	315,694						237,657				844,075				658,735
Ocean freight consolidation	276,886						229,601				703,018				564,102
Customs brokerage and other services	64,250						47,362				170,534				125,555
Salaries and related costs	124,744						103,274				353,716				294,828
Rent and occupancy costs	12,711						12,520				38,077				34,977
Depreciation and amortization	6,806						6,090				19,558				17,792
Selling and promotion	6,769						5,784				20,388				16,423
Other	21,908						19,801				58,864				52,902
Total operating expenses	829,768						662,089				2,208,230				1,765,314
Operating income	67,420						49,380				174,474				128,214
Interest expense	(6					)	(16			)	(34			)	(141		)
Interest income	1,436						1,106				3,700				3,360
Other, net	524						829				2,325				3,466
Other income, net	1,954						1,919				5,991				6,685
Earnings before income taxes and minority interest	69,374						51,299				180,465				134,899
Income tax expense	24,688						18,311				64,220				48,141
Net earnings before minority interest	44,686						32,988				116,245				86,758
Minority interest	(1,579					)	(430			)	(3,682			)	(1,171		)
Net earnings	$		43,107				$		32,558		$		112,563		$	85,587
Diluted earnings per share	$			0.39			$		0.30		$		1.02		$	0.79
Basic earnings per share	$				0.41		$		0.31		$		1.07		$	0.82
Weighted average diluted shares outstanding	111,206,168						109,190,930				110,480,254				108,927,724
Weighted average basic shares outstanding	106,255,293						105,042,210				105,663,441				104,636,462

Certain 2003 amounts have been reclassified to conform to the 2004 presentation.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2004			2003			2004			2003
Operating Activities:
Net earnings	$	43,107		$	32,558		$	112,563		$	85,587
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable	2,063			426			2,307			340
Deferred income tax expense	8,155			3,555			18,035			6,841
Tax benefits from employee stock plans	4,597			1,826			14,637			5,071
Depreciation and amortization	6,806			6,090			19,558			17,792
Gain on sale of property and equipment	(18		)	(64		)	(66		)	(146		)
Impairment write down of other assets	—			—			2,000			—
Other	860			1,049			2,408			2,734
Changes in operating assets and liabilities:
Increase in accounts receivable	(72,797		)	(76,911		)	(147,409		)	(64,226		)
Increase in other current assets	(409		)	(9,311		)	(8,974		)	(20,059		)
Increase in minority interest	931			430			2,750			234
Increase in accounts payable and other current liabilities	40,041			52,131			124,690			61,622
Net cash provided by operating activities	33,336			11,779			142,499			95,790
Investing Activities:
Decrease (increase) in short-term investments	7			(46		)	8			(43		)
Purchase of property and equipment	(29,232		)	(4,301		)	(49,525		)	(13,194		)
Proceeds from sale of property and equipment	153			151			440			289
Other	(1		)	(380		)	227			(384		)
Net cash used in investing activities	(29,073		)	(4,576		)	(48,850		)	(13,332		)
Financing Activities:
Borrowings (repayments) of short-term debt, net	3			(440		)	(210		)	(1,324		)
Proceeds from issuance of common stock	14,949			13,165			26,440			18,222
Repurchases of common stock	(14,984		)	(13,083		)	(26,768		)	(18,510		)
Dividends paid							(11,642		)	(8,368		)
Net cash used in financing activities	(32		)	(358		)	(12,180		)	(9,980		)
Effect of exchange rate changes on cash	931			1,735			320			8,658
Increase in cash and cash equivalents	5,162			8,580			81,789			81,136
Cash and cash equivalents at beginning of period	372,459			284,415			295,832			211,859
Cash and cash equivalents at end of period	377,621			292,995			377,621			292,995
Interest and taxes paid:
Interest	5			15			37			139
Income tax	7,459			18,211			34,206			53,623

Certain 2003 amounts have been reclassified to conform to the 2004 presentation.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES

Business Segment Information

(In thousands)

(Unaudited)

	United States		Other N. America	Far East	Europe	Australia/ New Zealand	Latin America	Middle East	Elimi- nations		Consoli- dated
Three months ended September 30, 2004
Revenues from unaffiliated customers	$	166,438	19,836	522,274	123,740	11,503	15,086	38,311			897,188
Transfers between geographic areas	$	19,254	1,267	3,000	4,778	1,366	1,569	1,753	(32,987	)	—
Total revenues	$	185,692	21,103	525,274	128,518	12,869	16,655	40,064	(32,987	)	897,188
Net revenues	$	96,495	11,215	68,925	41,288	6,636	5,673	10,126			240,358
Operating income	$	20,892	1,953	32,324	6,969	1,804	1,165	2,313			67,420
Identifiable assets at quarter end	$	660,037	43,787	251,407	265,921	21,517	19,004	35,973	9,716		1,307,362
Capital expenditures	$	23,516	354	3,570	854	165	480	293			29,232
Depreciation and amortization	$	3,383	307	1,084	1,290	173	195	374			6,806
Equity	$	827,659	16,548	180,835	75,683	13,769	5,010	16,112	(373,946	)	761,670
Three months ended September 30, 2003
Revenues from unaffiliated customers	$	131,237	16,061	410,668	105,459	8,624	9,702	29,718			711,469
Transfers between geographic areas	$	12,584	621	1,778	2,880	1,001	1,085	849	(20,798	)	—
Total revenues	$	143,821	16,682	412,446	108,339	9,625	10,787	30,567	(20,798	)	711,469
Net revenues	$	80,094	9,070	56,792	34,602	5,026	3,594	7,671			196,849
Operating income	$	16,255	1,641	24,365	4,341	1,113	342	1,323			49,380
Identifiable assets at quarter end	$	526,857	30,535	195,111	229,081	17,615	14,862	26,746			1,040,807
Capital expenditures	$	2,100	175	740	900	27	92	267			4,301
Depreciation and amortization	$	3,061	321	792	1,317	169	143	287			6,090
Equity	$	650,269	10,793	145,826	54,755	11,940	2,231	11,295	(273,723	)	613,386
Nine months ended September 30, 2004
Revenues from unaffiliated customers	$	455,227	55,923	1,343,241	354,655	31,992	39,025	102,641			2,382,704
Transfers between geographic areas	$	50,536	3,014	8,187	13,098	3,799	4,668	4,595	(87,897	)	—
Total revenues	$	505,763	58,937	1,351,428	367,753	35,791	43,693	107,236	(87,897	)	2,382,704
Net revenues	$	266,206	31,180	188,474	118,332	18,275	15,569	27,041			665,077
Operating income	$	49,001	6,256	87,341	19,567	4,428	2,433	5,448			174,474
Identifiable assets at quarter end	$	660,037	43,787	251,407	265,921	21,517	19,004	35,973	9,716		1,307,362
Capital expenditures	$	31,013	1,405	8,211	5,175	741	1,205	1,775			49,525
Depreciation and amortization	$	10,054	876	2,877	3,737	474	530	1,010			19,558
Equity	$	827,659	16,548	180,835	75,683	13,769	5,010	16,112	(373,946	)	761,670
Nine months ended September 30, 2003
Revenues from unaffiliated customers	$	381,429	48,307	1,033,973	294,443	22,504	26,162	86,710			1,893,528
Transfers between geographic areas	$	26,221	1,405	4,842	7,662	2,864	3,019	2,354	(48,367	)	—
Total revenues	$	407,650	49,712	1,038,815	302,105	25,368	29,181	89,064	(48,367	)	1,893,528
Net revenues	$	223,358	26,067	151,886	98,473	13,577	10,057	21,718			545,136
Operating income	$	40,269	4,860	63,086	12,172	2,626	1,331	3,870			128,214
Identifiable assets at quarter end	$	526,857	30,535	195,111	229,081	17,615	14,862	26,746			1,040,807
Capital expenditures	$	5,646	888	2,825	2,360	179	330	966			13,194
Depreciation and amortization	$	9,279	944	2,289	3,685	475	400	720			17,792
Equity	$	650,269	10,793	145,826	54,755	11,940	2,231	11,295	(273,723	)	613,386

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