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:  August 2, 2006
(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	(Commission File No.)	(IRS Employer Identification Number)
incorporation or organization)

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 August 1, 2006, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing second quarter 2006 financial results.  A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01  Financial Statements and Exhibits

(d)  Exhibits

Exhibit No.	Description
99.1	Press Release of Expeditors International of Washington, Inc., dated August 1, 2006, reporting second quarter 2006 financial results.

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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.
August 2, 2006	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and
	Chief Executive Officer
August 2, 2006	/s/ R. JORDAN GATES
	R. Jordan Gates, Executive Vice President-
	Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Expeditors International of Washington, Inc., dated August 1, 2006, reporting second quarter 2006 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 NET EARNINGS INCREASE OF 53%

SEATTLE, WASHINGTON — August 1, 2006, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings of $56,329,000 for the second quarter of 2006, compared with $36,698,000(1) for the same quarter of 2005, an increase of 53%.  Net revenues for the second quarter of 2006 increased 25% to $313,570,000 as compared with $250,660,000 reported for the second quarter of 2005.  Total revenues and operating income were $1,129,324,000 and $88,803,000 in 2006 compared with $927,999,000 and $58,729,000(1) for the same quarter of 2005, increases of 22% and 51%, respectively.  Diluted net earnings per share for the second quarter were $.25 as compared with $.17 for the same quarter in 2005, an increase of 47%.  The company also reported that same store net revenues and operating income increased 25% and 51%, respectively, for the second quarter of 2006 when compared with 2005.

For the six months ended June 30, 2006, net earnings rose to $108,681,000 from $67,744,000(1) in 2005, an increase of 60%. Net revenues for the six months increased to $609,767,000 from $481,343,000 for 2005, up 27%. Total revenues and operating income for the six months were $2,153,916,000 and $174,204,000 in 2006 compared with $1,753,163,000 and $109,177,000(1) for the same period in 2005, increases of 23% and 60%, respectively.  Diluted net earnings per share for the first two quarters of 2006 were $.49 as compared with $.31 for the same period of 2005, an increase of 58%. Same store net revenues and operating income increased 26% and 59%, respectively, for the six months ended June 30, 2006 when compared with same period of 2005.

“You take results like these any time you can get them.” commented Peter J. Rose, Chairman and Chief Executive Officer.   “The second quarter of 2006 was strong across the board.  We remain encouraged by the degree that our operational productivity and efficiency initiatives continue to allow us to increase business volumes without a commensurate increase in operating costs.  We were also pleased to see our fee-based ocean products—order management and ocean forwarding, - making year over year gains — this is something that we haven’t seen in quite some time.”

“Our culture makes customer service and profitability management the focus of each and every employee.  Placing this responsibility beyond the purview of a small group empowers those who are most able to execute and deliver.” Rose continued.  “The combined efforts of every individual from the most senior District Manager to the newest runner determines how we deliver customer service and how well we generate profits.  Our results reflect the fact that our employees understand the culture, live it and improve upon it, each and every day.  To paraphrase Robert Frost, that makes all the difference” Rose concluded.

Expeditors is a global logistics company.  Headquartered in Seattle, Washington, the company employs trained professionals in 167 offices and 56 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.

(1)In accordance with the provisions of FAS 123R, the Company has elected to apply the modified retrospective method to prior year’s reported numbers.  The Modified Retrospective Method calls for prior reported numbers to be adjusted to reflect the expensing of stock options, as has been required for disclosure in the company’s 10-K reports since 1996 and in the Company’s 10-Q reports since 2002.  Accordingly certain 2005 numbers which have been adjusted retrospectively to show the effect of stock compensation expense, will not agree with the figures reported in the 2005 second quarter press release dated August 2, 2005.  Diluted weighted shares outstanding for 2005 are also reported consistent with the requirements of FAS 123R.  Accordingly, the 2005 diluted weighted shares outstanding amounts shown in this press release will not agree with the amounts reported in above-referenced 2005 second quarter press release.

Expeditors International of Washington, Inc.
Financial Highlights
Three months and Six months ended
June 30, 2006 and 2005
Unaudited
(in 000’s except share data)

	Three months ended				Six months ended
	June 30				June 30
	2006	2005(2)	% Increase		2006	2005(2)	% Increase
Revenues	1,129,324	927,999	22	%	2,153,916	1,753,163	23	%
Net revenues	313,570	250,660	25	%	609,767	481,343	27	%
Operating income	88,803	58,729	51	%	174,204	109,177	60	%
Net earnings	56,329	36,698	53	%	108,681	67,744	60	%
Diluted earnings per share	.25	.17	47	%	.49	.31	58	%
Basic earnings per share	.26	.17	53	%	.51	.32	59	%
Diluted weighted average shares outstanding	224,374,720	220,901,114			224,051,286	221,160,880
Basic weighted average shares outstanding	213,725,395	213,552,092			213,574,773	213,504,726

Office developments  during the Second Quarter of 2006
North America
Reynosa, Tamaulipas, Mexico *
Calexico, California, USA+

* Full-service office (previously a satellite office)
+ Satellite office

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

Or by fax to 206 674 3459

Questions received by the end of business on 2 August, 2006 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on our about 9 August, 2006.

(2)See note 1 on the first page of this important information regarding comparability of prior year numbers.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)

	June 30,		December 31,
	2006		2005
Assets
Current assets:
Cash and cash equivalents	$	454,694	$	463,894
Short-term investments	415		123
Accounts receivable, net	751,929		709,331
Deferred Federal and state income taxes	6,679		7,208
Other current assets	28,191		21,405
Total current assets	1,241,908		1,201,961
Property and equipment, net	444,285		333,787
Goodwill, net	7,774		7,774
Other intangibles, net	8,367		8,997
Other assets	13,216		13,525
	$	1,715,550	$	1,566,044
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	529,518		479,546
Accrued expenses, primarily salaries and related costs	128,516		103,674
Federal, state and foreign income taxes	28,754		29,281
Total current liabilities	$	686,788	$	612,501
Deferred Federal and state income taxes	$	29,019	$	13,278
Minority interest	$	30,142	$	13,883
Shareholders’ equity:
Preferred stock, par value $.01 per share.
Authorized 2,000,000 shares; none issued	—		—
Common stock, par value $.01 per share.
Authorized 640,000,000 shares; issued and outstanding 213,258,504 shares at June 30, 2006 and 213,227,042 shares at December 31, 2005	2,133		2,132
Additional paid-in capital	132,120		180,905
Retained earnings	831,090		745,984
Accumulated other comprehensive income	4,258		(2,639		)
Total shareholders’ equity	969,601		926,382
	$	1,715,550	$	1,566,044

Certain 2005 amounts have been restated as required by the modified retrospective method in connection with the implementation of FAS 123R and other amounts have been reclassified to conform to the 2006 presentation.

All share and per share amounts have been adjusted for the 2-for-1 stock split effective June 2006.

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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						Six months ended
	June 30,						June 30,
	2006			2005			2006			2005
Revenues:
Airfreight	$	545,273		$	421,213		$	1,036,271		$	794,098
Ocean freight and ocean services	380,280			336,934			724,939			634,078
Customs brokerage and other services	203,771			169,852			392,706			324,987
Total revenues	1,129,324			927,999			2,153,916			1,753,163
Operating expenses:
Airfreight consolidation	429,976			330,269			810,557			614,707
Ocean freight consolidation	300,780			277,259			571,659			521,229
Customs brokerage and other services	84,998			69,811			161,933			135,884
Salaries and related costs	172,453			145,624			333,427			278,515
Rent and occupancy costs	13,372			13,457			27,095			27,205
Depreciation and amortization	8,626			7,603			16,679			14,942
Selling and promotion	8,957			7,120			16,914			14,666
Other	21,359			18,127			41,448			36,838
Total operating expenses	1,040,521			869,270			1,979,712			1,643,986
Operating income	88,803			58,729			174,204			109,177
Interest expense	(10		)	(219		)	(37		)	(248		)
Interest income	4,390			2,725			8,664			4,872
Other, net	465			874			2,132			2,070
Other income, net	4,845			3,380			10,759			6,694
Earnings before income taxes and minority interest	93,648			62,109			184,963			115,871
Income tax expense	35,503			24,083			72,555			45,745
Net earnings before minority interest	58,145			38,026			112,408			70,126
Minority interest	(1,816		)	(1,328		)	(3,727		)	(2,382		)
Net earnings	$	56,329		$	36,698		$	108,681		$	67,744
Diluted earnings per share	$	0.25		$	0.17		$	0.49		$	0.31
Basic earnings per share	$	0.26		$	0.17		$	0.51		$	0.32
Weighted average diluted shares outstanding	224,374,720			220,901,114			224,051,286			221,160,880
Weighted average basic shares outstanding	213,725,395			213,552,092			213,574,773			213,504,726

Certain 2005 amounts have been restated as required by the modified retrospective method in connection with the

implementation of FAS 123R and other amounts have been reclassified to conform to the 2006 presentation.

All share and per share amounts have been adjusted for the 2-for-1 stock split effective June 2006.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2006			2005			2006			2005
Operating Activities:
Net earnings	$	56,329		$	36,698		$	108,681		$	67,744
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable	647			(394		)	493			(358		)
Deferred income tax expense	5,817			3,370			12,589			8,580
Stock compensation expense	9,418			9,576			17,816			16,684
Depreciation and amortization	8,626			7,603			16,679			14,942
Gain on sale of property and equipment	(68		)	(26		)	(215		)	(45		)
Minority interest in earnings of consolidated entities	1,815			833			4,011			1,670
Other	789			1,220			1,577			293
Changes in operating assets and liabilities:
Increase in accounts receivable	(49,838		)	(45,318		)	(28,999		)	(1,648		)
Increase in other current assets	(11,394		)	(4,539		)	(6,300		)	(1,746		)
Increase in accounts payable and other current liabilities	33,437			33,183			67,379			30,225
Net cash provided by operating activities	55,578			42,206			193,711			136,341
Investing Activities:
(Increase) decrease in short-term investments	(275		)	631			(283		)	(12		)
Purchase of property and equipment	(100,334		)	(14,175		)	(121,833		)	(43,192		)
Proceeds from sale of property and equipment	87			107			265			249
Other	692			(673		)	486			(1,339		)
Net cash used in investing activities	(99,830		)	(14,110		)	(121,365		)	(44,294		)
Financing Activities:
Proceeds (repayments) of short-term debt, net	—			43			—			(2,130		)
Proceeds from issuance of common stock	20,513			8,700			26,020			11,075
Repurchases of common stock	(86,669		)	(35,486		)	(113,628		)	(50,013		)
Excess tax benefits from employee stock plans	14,973			4,747			21,008			6,322
Dividends paid	(23,575		)	(16,055		)	(23,576		)	(16,055		)
Net cash used in financing activities	(74,758		)	(38,051		)	(90,176		)	(50,801		)
Effect of exchange rate changes on cash	6,016			(8,562		)	8,630			(11,356		)
Increase (decrease) in cash and cash equivalents	(112,994		)	(18,517		)	(9,200		)	29,890
Cash and cash equivalents at beginning of period	567,688			457,390			463,894			408,983
Cash and cash equivalents at end of period	454,694			438,873			454,694			438,873
Interest and taxes paid:
Interest	8			214			32			234
Income tax	30,376			18,444			43,051			28,560

Certain 2005 amounts have been restated as required by the modified retrospective method in connection with the implementation of FAS 123R and other amounts have been reclassified to conform to the 2006 presentation.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES
Business Segment Information
(In thousands)
(Unaudited)

	United		Other	Far		Australia/	Latin	Middle	Elimi-		Consoli-
	States		N. America	East	Europe	New Zealand	America	East	nations		dated
Three months ended
June 30, 2006
Revenues from unaffiliated customers	$	230,158	30,254	629,016	156,268	13,435	16,801	53,392			1,129,324
Transfers between geographic areas	$	27,485	1,962	4,171	7,900	1,621	2,111	2,680	(47,930	)	—
Total revenues	$	257,643	32,216	633,187	164,168	15,056	18,912	56,072	(47,930	)	1,129,324
Net revenues	$	126,161	15,871	88,945	53,330	8,024	8,287	12,952			313,570
Operating income	$	27,659	3,864	40,855	10,051	2,127	1,665	2,582			88,803
Identifiable assets at quarter end	$	839,926	57,363	369,930	329,676	22,431	32,241	58,371	5,612		1,715,550
Capital expenditures	$	91,578	198	4,467	3,096	109	468	418			100,334
Depreciation and amortization	$	4,417	345	1,210	1,729	189	382	354			8,626
Equity	$	1,106,283	24,124	276,872	95,304	14,245	13,256	25,951	(586,434	)	969,601
Three months ended
June 30, 2005
Revenues from unaffiliated customers	$	182,105	23,405	519,774	133,903	11,745	15,561	41,506			927,999
Transfers between geographic areas	$	19,232	1,178	3,126	5,583	1,425	1,879	1,926	(34,349	)	—
Total revenues	$	201,337	24,583	522,900	139,486	13,170	17,440	43,432	(34,349	)	927,999
Net revenues	$	101,950	12,839	66,894	44,724	7,054	6,885	10,314			250,660
Operating income	$	16,617	2,781	28,297	6,652	1,592	1,367	1,423			58,729
Identifiable assets at quarter end	$	666,572	47,503	317,473	289,708	23,903	23,256	43,215	5,619		1,417,249
Capital expenditures	$	10,465	207	1,074	1,309	469	361	290			14,175
Depreciation and amortization	$	3,713	362	1,216	1,499	172	286	355			7,603
Equity	$	911,406	19,831	245,979	85,294	15,106	8,606	20,623	(463,612	)	843,233
Six months ended
June 30, 2006
Revenues from unaffiliated customers	$	449,380	58,635	1,185,711	296,633	25,788	32,910	104,859			2,153,916
Transfers between geographic areas	$	52,927	3,692	7,854	15,225	3,030	4,004	5,062	(91,794	)	—
Total revenues	$	502,307	62,327	1,193,565	311,858	28,818	36,914	109,921	(91,794	)	2,153,916
Net revenues	$	251,860	30,553	169,694	101,933	15,424	15,474	24,829			609,767
Operating income	$	52,227	7,203	82,139	20,624	4,108	2,939	4,964			174,204
Identifiable assets at quarter end	$	839,926	57,363	369,930	329,676	22,431	32,241	58,371	5,612		1,715,550
Capital expenditures	$	108,764	295	7,221	3,810	346	791	606			121,833
Depreciation and amortization	$	8,485	696	2,400	3,265	387	747	699			16,679
Equity	$	1,106,283	24,124	276,872	95,304	14,245	13,256	25,951	(586,434	)	969,601
Six months ended
June 30, 2005
Revenues from unaffiliated customers	$	350,776	43,614	961,787	260,743	23,485	28,665	84,093			1,753,163
Transfers between geographic areas	$	35,626	2,347	5,848	10,998	2,647	3,438	3,783	(64,687	)	—
Total revenues	$	386,402	45,961	967,635	271,741	26,132	32,103	87,876	(64,687	)	1,753,163
Net revenues	$	196,019	24,195	127,551	86,894	13,769	12,543	20,372			481,343
Operating income	$	27,261	4,801	57,144	11,764	3,220	2,232	2,755			109,177
Identifiable assets at quarter end	$	666,572	47,503	317,473	289,708	23,903	23,256	43,215	5,619		1,417,249
Capital expenditures	$	36,437	512	2,150	2,519	537	552	485			43,192
Depreciation and amortization	$	7,222	729	2,386	3,012	326	547	720			14,942
Equity	$	911,406	19,831	245,979	85,294	15,106	8,606	20,623	(463,612	)	843,233

Certain 2005 amounts have been restated as required by the modified retrospective method in connection with the implementation of FAS 123R and other amounts have been reclassified to conform to the 2006 presentation.

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