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 5, 2008

(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 5, 2008, Expeditors International of Washington, Inc., a Washington corporation, issued a press release announcing second quarter 2008 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)           The following items are filed as exhibits to this report:

99.1         Press release, dated August 5, 2008 issued by Expeditors International of Washington, Inc.

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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 11, 2008	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and
	Chief Executive Officer
August 11, 2008	/s/ R. JORDAN GATES
	R. Jordan Gates, President-and
	Chief Operating Officer

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INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release of Expeditors International of Washington, Inc., dated August 5, 2008, reporting second quarter 2008 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
		President and Chief Operating Officer
		(206) 674-3427	FOR IMMEDIATE RELEASE

EXPEDITORS ANNOUNCES 2^ND QUARTER RESULTS, OPERATING INCOME UP 11%

SEATTLE, WASHINGTON – August 5, 2008, Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced net earnings of $71,249,000 for the second quarter of 2008, as compared with $65,489,000 for the same quarter of 2007, an increase of 9%. Net revenues for the second quarter of 2008 increased 12% to $397,325,000as compared with $354,574,000reported for the second quarter of 2007. Total revenues and operating income were $1,454,255,000 and $112,971,000 in 2008, as compared with $1,258,618,000 and $101,738,000 for the same quarter of 2007, increases of 16% and 11%, respectively. Diluted net earnings per share for the second quarter were $.32, as compared with $.30 for the same quarter in 2007, an increase of 7%. The Company also reported that same store net revenues and operating income increased 12% and 11%, respectively, for the second quarter of 2008 when compared with 2007.

For the six months ended June 30, 2008, net earnings rose to $137,721,000 from $124,777,000 in 2007, an increase of 10%. Net revenues for the six months increased to $771,653,000 from $688,710,000 for 2007, up 12%. Total revenues and operating income for the six months were $2,761,576,000 and $218,535,000 in 2008, as compared with $2,377,564,000 and $196,263,000 for the same period in 2007, increases of 16% and 11%, respectively. Diluted net earnings per share for the first two quarters of 2008 were $.62, as compared with $.56 for the same period of 2007, an increase of 11%. Same store net revenues and operating income increased 12% and 11%, respectively, for the six months ended June 30, 2008 when compared with same period of 2007.

“This was fundamentally a very strong and a very sound quarter.” commented Peter J. Rose, Chairman and Chief Executive Officer. “We had good solid revenue and net revenue growth of 16% and 12%, respectively, and we did an excellent job of managing those costs over which we had control. Despite absorbing over $5.3 million of non-routine legal and related expenses related to the ongoing Department of Justice investigation, we still managed to post double digit operating income growth of 11%. Without the effect of these non-routine expenses, our operating income would have been up 16%(1) over operating income reported for the second quarter of 2007. To us, those are numbers to be proud of, particularly in light of the Economic Armageddon stories du jour that seem to be omni-present in the media these days.” Rose said.

“We understand that there are struggles going on out there in pockets of the economy, but we’re also fortunate enough, with our broad customer base, to see things that are going extremely well for some companies. Accordingly, we continue to ban the use of the “R” word here and direct our focus on expanding our market share and increasing our customer service capabilities. As always, we’d be remiss not to credit the success we have to the dedication and commitment of our employees. They have always executed well, in good times or in times that many have regarded as difficult. We at Expeditors think it would be a big mistake for anyone to ‘count us out’ early.  That isn’t in our culture.” Rose concluded.

Expeditors is a global logistics company headquartered in Seattle, Washington, the company employs trained professionals in 180 full-service offices, 69 satellite locations and 4 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) Second Quarter 2008 Operating Income of $112,971,000, with $5,322,000 of non-routine legal and related expenses added back would have been $118,293,000.  This would have been a 16% increase over the $101,738,000 Operating Income amount reported in the Second Quarter 2007 results.

Expeditors International of Washington, Inc.

2nd Quarter 2008 Earnings Release

August 5, 2008

Expeditors International of Washington, Inc.

Financial Highlights

Three months and Six months ended

June 30, 2008 and 2007

Unaudited

(in 000’s except share data)

	Three Months Ended June 30,				%		Six Months Ended June 30,				%
	2008		2007		Increase		2008		2007		Increase
Revenues	$	1,454,255	$	1,258,618	16	%	$	2,761,576	$	2,377,564	16	%
Net revenues	$	397,325	$	354,574	12	%	$	771,653	$	688,710	12	%
Operating income	$	112,971	$	101,738	11	%	$	218,535	$	196,263	11	%
Net earnings	$	71,249	$	65,489	9	%	$	137,721	$	124,777	10	%
Diluted earnings per share	$	.32	$	.30	7	%	$	.62	$	.56	11	%
Basic earnings per share	$	.33	$	.31	6	%	$	.65	$	.58	12	%
Diluted weighted average shares outstanding	220,515,987		221,716,414				220,490,452		222,283,372
Basic weighted average shares outstanding	213,275,229		213,251,710				213,168,730		213,339,478

Offices opened during the Second Quarter of 2008
(· = Full Service, + = Satellite)

ASIA	NEAR/MIDDLE EAST
·Suzhou, People’s Republic of China (formerly a satellite of Shanghai)	+Mundra, India (satellite of Bombay)

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 August 7, 2008 will be considered in management’s 8-K “Responses to Selected Questions” expected to be filed on or about August 15, 2008.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	June 30,		December 31,
	2008		2007
Assets
Current assets:
Cash and cash equivalents	$	703,488	$	574,599
Short-term investments	410		674
Accounts receivable, net	982,725		933,519
Deferred Federal and state income taxes	7,885		8,278
Other current assets	53,456		17,627
Total current assets	1,747,964		1,534,697
Property and equipment, net	505,263		497,892
Goodwill, net	7,927		7,927
Other intangibles, net	7,216		7,832
Other assets	21,334		20,717
	$	2,289,704	$	2,069,065
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	682,409		613,108
Accrued expenses, primarily salaries and related costs	158,427		129,669
Federal, state and foreign income taxes	31,343		26,976
Total current liabilities	872,179		769,753
Deferred Federal and state income taxes	76,923		55,533
Minority interest	18,050		17,208
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 212,995,326 shares at June 30, 2008 and 212,996,776 shares at December 31, 2007	2,130		2,130
Additional paid-in capital	32,567		50,006
Retained earnings	1,247,023		1,143,464
Accumulated other comprehensive income	40,832		30,971
Total shareholders’ equity	1,322,552		1,226,571
	$	2,289,704	$	2,069,065

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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,
	2008			2007			2008			2007
Revenues:
Airfreight	$	658,882		$	564,471		$	1,258,645		$	1,081,676
Ocean freight and ocean services	516,473			450,431			963,265			825,633
Customs brokerage and other services	278,900			243,716			539,666			470,255
Total revenues	1,454,255			1,258,618			2,761,576			2,377,564
Operating expenses:
Airfreight consolidation	517,683			437,446			978,782			827,090
Ocean freight consolidation	419,767			364,917			780,207			663,808
Customs brokerage and other services	119,480			101,681			230,934			197,956
Salaries and related costs	215,535			197,393			421,350			380,154
Rent and occupancy costs	19,374			15,744			38,809			32,411
Depreciation and amortization	10,056			10,275			19,828			19,850
Selling and promotion	9,744			9,581			19,248			18,677
Other	29,645			19,843			53,883			41,355
Total operating expenses	1,341,284			1,156,880			2,543,041			2,181,301
Operating income	112,971			101,738			218,535			196,263
Interest expense	(75		)	118			(146		)	104
Interest income	4,915			5,531			9,879			10,750
Other, net	(162		)	1,675			1,112			2,430
Other income, net	4,678			7,324			10,845			13,284
Earnings before income taxes and minority interest	117,649			109,062			229,380			209,547
Income tax expense	46,043			43,315			91,253			84,475
Net earnings before minority interest	71,606			65,747			138,127			125,072
Minority interest	(357		)	(258		)	(406		)	(295		)
Net earnings	$	71,249		$	65,489		$	137,721		$	124,777
Diluted earnings per share	$	0.32		$	0.30		$	0.62		$	0.56
Basic earnings per share	$	0.33		$	0.31		$	0.65		$	0.58
Weighted average diluted shares outstanding	220,515,987			221,716,414			220,490,452			222,283,372
Weighted average basic shares outstanding	213,275,229			213,251,710			213,168,730			213,339,478

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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,
	2008			2007			2008			2007
Operating Activities:
Net earnings	$	71,249		$	65,489		$	137,721		$	124,777
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable	(396		)	(869		)	(573		)	(355		)
Deferred income tax expense	7,647			6,772			16,473			12,240
Excess tax benefits from stock plans	(7,889		)	(5,291		)	(9,395		)	(21,623		)
Stock compensation expense	11,323			12,043			22,603			23,503
Depreciation and amortization	10,056			10,275			19,828			19,850
Gain on sale of assets	(30		)	(79		)	(605		)	(202		)
Minority interest in earnings of consolidated entities	357			258			406			295
Other	515			354			932			688
Changes in operating assets and liabilities:
Increase in accounts receivable	(91,778		)	(70,962		)	(32,024		)	(13,261		)
Decrease (increase) in other current assets	622			173			677			(504		)
Increase in accounts payable and other current liabilities	67,024			76,080			82,102			62,445
Decrease in income taxes payable, net	(32,697		)	(7,311		)	(23,437		)	(4,842		)
Net cash provided by operating activities	36,003			86,932			214,708			203,011
Investing Activities:
Decrease in short-term investments	169			76			216			162
Purchase of property and equipment	(14,316		)	(12,904		)	(24,526		)	(26,342		)
Proceeds from sale of property and equipment	139			119			181			498
Prepayment on long-term land lease	—			(2,848		)	—			(2,848		)
Deposit on building purchase and land lease	—			(5,056		)	—			(5,056		)
Other	(308		)	(1,188		)	55			(1,528		)
Net cash used in investing activities	(14,316		)	(21,801		)	(24,074		)	(35,114		)
Financing Activities:
Net distributions to minority interests	—			(316		)	(107		)	(316		)
(Repayments) borrowings of short-term debt, net	(810		)	(17		)	—			203
Proceeds from issuance of common stock	15,537			12,602			20,151			27,868
Repurchases of common stock	(50,970		)	(56,597		)	(69,588		)	(128,995		)
Excess tax benefits from stock plans	7,889			5,291			9,395			21,623
Dividends paid	(34,163		)	(29,902		)	(34,163		)	(29,902		)
Net cash used in financing activities	(62,517		)	(68,939		)	(74,312		)	(109,519		)
Effect of exchange rate changes on cash	3,352			2,034			12,567			5,306
(Decrease) increase in cash and cash equivalents	(37,478		)	(1,774		)	128,889			63,684
Cash and cash equivalents at beginning of period	740,966			576,816			574,599			511,358
Cash and cash equivalents at end of period	$	703,488		$	575,042		$	703,488		$	575,042
Interest and taxes paid:
Interest	75			127			146			138
Income tax	67,613			41,279			91,885			74,312

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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, 2008
Revenues from unaffiliated customers	$	320,278	41,397	768,086	209,297	23,407	24,626	67,164	—		1,454,255
Transfers between geographic areas	$	26,842	2,623	5,629	11,257	2,158	3,649	4,539	(56,697	)	—
Total revenues	$	347,120	44,020	773,715	220,554	25,565	28,275	71,703	(56,697	)	1,454,255
Net revenues	$	153,846	18,009	104,688	72,286	13,125	14,159	21,212	—		397,325
Operating income	$	33,469	3,272	47,543	15,779	4,117	3,553	5,238	—		112,971
Identifiable assets at quarter end	$	1,004,374	75,321	501,944	485,926	41,521	60,909	111,532	8,177		2,289,704
Capital expenditures	$	7,159	855	3,207	1,684	159	505	747	—		14,316
Depreciation and amortization	$	5,424	328	1,499	1,681	247	322	555	—		10,056
Equity	$	1,462,274	37,101	399,486	185,411	26,884	30,550	56,451	(875,605	)	1,322,552
Three months ended June 30, 2007
Revenues from unaffiliated customers	$	260,796	32,765	710,104	162,100	17,057	19,377	56,419	—		1,258,618
Transfers between geographic areas	$	25,856	1,989	4,470	8,172	1,853	3,078	3,340	(48,758	)	—
Total revenues	$	286,652	34,754	714,574	170,272	18,910	22,455	59,759	(48,758	)	1,258,618
Net revenues	$	143,206	15,377	100,479	58,600	9,812	10,950	16,150	—		354,574
Operating income	$	31,459	2,941	46,587	11,951	2,658	2,354	3,788	—		101,738
Identifiable assets at quarter end	$	893,335	69,599	431,106	395,022	30,617	37,310	82,642	(2,370	)	1,937,261
Capital expenditures	$	7,843	688	1,188	2,141	198	267	579	—		12,904
Depreciation and amortization	$	5,304	331	1,222	2,393	225	417	383	—		10,275
Equity	$	1,256,503	32,692	326,036	134,925	20,114	19,571	39,555	(714,363	)	1,115,033
Six months ended June 30, 2008
Revenues from unaffiliated customers	$	618,224	76,466	1,447,936	394,861	43,246	46,486	134,357	—		2,761,576
Transfers between geographic areas	$	50,923	4,696	10,740	21,759	4,292	6,956	8,536	(107,902	)	—
Total revenues	$	669,147	81,162	1,458,676	416,620	47,538	53,442	142,893	(107,902	)	2,761,576
Net revenues	$	302,901	34,683	203,429	138,059	24,824	26,804	40,953	—		771,653
Operating income	$	66,013	6,399	93,573	28,220	7,589	6,819	9,922	—		218,535
Identifiable assets at quarter end	$	1,004,374	75,321	501,944	485,926	41,521	60,909	111,532	8,177		2,289,704
Capital expenditures	$	10,795	1,191	6,510	3,294	353	776	1,607	—		24,526
Depreciation and amortization	$	10,770	640	2,753	3,449	496	637	1,083	—		19,828
Equity	$	1,462,274	37,101	399,486	185,411	26,884	30,550	56,451	(875,605	)	1,322,552
Six months ended June 30, 2007
Revenues from unaffiliated customers	$	506,521	60,851	1,312,135	318,479	31,840	38,748	108,990	—		2,377,564
Transfers between geographic areas	$	48,354	3,967	8,450	15,933	3,550	5,584	6,763	(92,601	)	—
Total revenues	$	554,875	64,818	1,320,585	334,412	35,390	44,332	115,753	(92,601	)	2,377,564
Net revenues	$	278,673	30,077	193,632	114,627	18,739	20,745	32,217	—		688,710
Operating income	$	59,522	5,670	91,471	22,102	5,062	4,406	8,030	—		196,263
Identifiable assets at quarter end	$	893,335	69,599	431,106	395,022	30,617	37,310	82,642	(2,370	)	1,937,261
Capital expenditures	$	16,548	1,012	2,521	3,526	892	762	1,081	—		26,342
Depreciation and amortization	$	10,473	662	2,597	4,130	425	817	746	—		19,850
Equity	$	1,256,503	32,692	326,036	134,925	20,114	19,571	39,555	(714,363	)	1,115,033

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