UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 0-13468

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

Washington	91-1069248
(State or other jurisdiction of incorporation or organization)	(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)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨ (Do not check if a smaller reporting company) Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

At November 3, 2009, the number of shares outstanding of the issuer’s Common Stock was 212,049,756.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

	September 30, 2009		December 31, 2008
Assets
Current Assets:
Cash and cash equivalents	$	947,269	$	741,028
Short-term investments		629		658
Accounts receivable, less allowance for doubtful accounts of $14,208 at September 30, 2009 and $14,414 at December 31, 2008		684,248		788,176
Deferred Federal and state income taxes		7,806		7,986
Other		36,568		35,511
Total current assets		1,676,520		1,573,359
Property and equipment, less accumulated depreciation and amortization of $259,059 at September 30, 2009 and $228,025 at December 31, 2008		496,203		493,129
Goodwill, net		7,927		7,927
Other intangibles, net		5,380		6,503
Other assets, net		30,857		19,921
	$	2,216,887	$	2,100,839
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable		486,663		491,823
Accrued expenses, primarily salaries and related costs		150,880		150,487
Federal, state and foreign income taxes		17,593		28,039
Total current liabilities		655,136		670,349
Deferred Federal and state income taxes		41,796		46,574
Shareholders’ Equity:
Preferred stock, none issued
Common stock, par value $.01 per share
Issued and outstanding 211,984,747 shares at September 30, 2009, and 211,973,377 shares at December 31, 2008		2,120		2,120
Additional paid-in capital		6,751		7,150
Retained earnings		1,503,162		1,372,356
Accumulated other comprehensive income (loss)		13		(15,208	)
Total shareholders’ equity		1,512,046		1,366,418
Noncontrolling interest		7,909		17,498
Total equity		1,519,955		1,383,916
Commitments and contingencies
	$	2,216,887	$	2,100,839

See accompanying notes to condensed consolidated financial statements.

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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,
	2009			2008			2009			2008
Revenues:
Airfreight services	$	457,405		$	703,152		$	1,203,220		$	1,961,797
Ocean freight and ocean services		331,454			567,155			949,380			1,530,420
Customs brokerage and other services		248,468			294,606			692,772			834,272
Total revenues		1,037,327			1,564,913			2,845,372			4,326,489
Operating Expenses:
Airfreight consolidation		340,746			553,672			848,131			1,532,454
Ocean freight consolidation		247,733			454,622			704,850			1,234,829
Customs brokerage and other services		102,336			127,492			279,317			358,426
Salaries and related costs		194,743			224,809			571,517			646,159
Rent and occupancy costs		18,183			19,729			54,861			58,538
Depreciation and amortization		9,923			10,222			30,125			30,050
Selling and promotion		6,541			8,881			18,310			28,129
Other		20,876			30,090			63,614			83,973
Total operating expenses		941,081			1,429,517			2,570,725			3,972,558
Operating income		96,246			135,396			274,647			353,931
Other Income (Expense):
Interest income		2,214			5,005			8,253			14,884
Interest expense		(325	)		(23	)		(404	)		(169	)
Other, net		1,192			2,225			7,826			3,337
Other income, net		3,081			7,207			15,675			18,052
Earnings before income taxes		99,327			142,603			290,322			371,983
Income tax expense		41,763			56,457			119,575			147,710
Net earnings		57,564			86,146			170,747			224,273
Net earnings attributable to noncontrolling interest		188			(581	)		335			(987	)
Net earnings attributable to shareholders	$	57,752		$	85,565		$	171,082		$	223,286
Diluted earnings attributable to shareholders per share	$	.27		$	.39		$	.79		$	1.02
Basic earnings attributable to shareholders per share	$	.27		$	.40		$	.81		$	1.05
Dividends declared and paid per common share	$	—		$	—		$	.19		$	.16
Weighted average diluted shares outstanding		216,684,079			218,729,790			216,582,370			219,903,341
Weighted average basic shares outstanding		212,241,480			212,747,871			212,153,404			213,027,420

See accompanying notes to condensed consolidated financial statements.

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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,
	2009			2008			2009			2008
Operating Activities:
Net earnings	$	57,564		$	86,146		$	170,747		$	224,273
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable		(778	)		1,503			791			930
Deferred income tax (benefit) expense		(6,701	)		1,117			(12,945	)		17,590
Excess tax benefits from stock plans		(246	)		(485	)		(5,381	)		(9,880	)
Stock compensation expense		10,794			11,513			29,065			34,116
Depreciation and amortization		9,923			10,222			30,125			30,050
Loss (gain) on sale of assets		8			(46	)		(2	)		(651	)
Other		365			396			1,092			1,328
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(94,025	)		(51,422	)		120,318			(83,446	)
Increase in other current assets		(803	)		(2,544	)		(2,126	)		(1,867	)
Increase (decrease) in accounts payable and accrued expenses		71,711			13,796			(28,788	)		95,898
(Decrease) increase in income tax payables, net		(5,350	)		21,482			(3,066	)		(1,955	)
Net cash provided by operating activities		42,462			91,678			299,830			306,386
Investing Activities:
Decrease (increase) in short-term investments		17			(6	)		48			210
Purchase of property and equipment		(9,514	)		(24,631	)		(25,336	)		(49,157	)
Proceeds from sale of property and equipment		48			106			125			287
Prepayment on long-term land lease		(1,898	)		—			(9,242	)		—
Other		438			635			(1,153	)		690
Net cash used in investing activities		(10,909	)		(23,896	)		(35,558	)		(47,970	)
Financing Activities:
Proceeds from issuance of common stock		25,107			26,737			42,511			46,888
Repurchases of common stock		(34,103	)		(75,332	)		(77,075	)		(144,920	)
Excess tax benefits from stock plans		246			485			5,381			9,880
Dividends paid		—			2			(40,276	)		(34,161	)
Distributions to noncontrolling interest		(1,009	)		(772	)		(1,009	)		(879	)
Purchase of noncontrolling interest		—			—			(2,122	)		—
Net cash used in financing activities		(9,759	)		(48,880	)		(72,590	)		(123,192	)
Effect of exchange rate changes on cash		9,493			(26,041	)		14,559			(13,474	)
Increase (decrease) in cash and cash equivalents		31,287			(7,139	)		206,241			121,750
Cash and cash equivalents at beginning of period		915,982			703,488			741,028			574,599
Cash and cash equivalents at end of period	$	947,269		$	696,349		$	947,269		$	696,349
Interest and Taxes Paid:
Interest	$	317		$	20		$	397		$	166
Income taxes		46,607			32,114			121,717			123,999

See accompanying notes to condensed consolidated financial statements.

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

A. Basis of Presentation

Expeditors International of Washington, Inc. (“the Company”) is a global logistics company operating through a worldwide network of offices, international service centers and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, and manufacturing companies around the world. The Company grants credit upon approval to customers.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on February 27, 2009.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain 2008 amounts have been reclassified to conform with the 2009 presentation. Subsequent events have been evaluated through November 9, 2009, the date the financial statements were issued.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded accounts receivable allowances in the amounts of $14,208 as of September 30, 2009 and $14,414 as of December 31, 2008. Additions and write-offs have not been significant.

C. Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under U.S. GAAP, are excluded from net income. For the Company, these consist of foreign currency translation adjustments, net of related income tax effects, and comprehensive income attributable to noncontrolling interest.

The components of total comprehensive income for interim periods are presented in Note 3.

D. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

E. Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (SFAS 160) and incorporated in Topic 810 – “Consolidation” of the FASB Accounting Standards Codification (Codification). SFAS 160 changes the accounting and reporting for minority interest, which is recharacterized as noncontrolling interest and classified as a component of equity. SFAS 160 modifies the accounting for changes in a parent’s ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company adopted the provisions of SFAS 160 beginning in the first quarter of 2009. Accordingly, minority interest of $17,498 as of December 31, 2008 has been reclassified to the noncontrolling interest section of equity. Also, the presentation of the consolidated balance sheets, statement of earnings, cash flows and comprehensive income have been modified to meet the reporting requirements of SFAS 160. The adoption of this statement had no impact on net earnings attributable to shareholders.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (SFAS 141R), supplemented by FASB Financial Staff Position 141R-1 and incorporated in Codification Topic 805 – “Business Combinations”. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets

5

acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company adopted the provisions of SFAS 141R beginning in the first quarter of 2009. The adoption had no material impact on the Company’s consolidated financial condition or results of operations. The impact will depend upon the acquisitions, if any, the Company consummates after the effective date.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (SFAS 165), incorporated in Codification Topic 855 – “Subsequent Events”. SFAS 165 establishes general standards of accounting and disclosure for events that occur after the balance sheet date but before financial statements are issued. This standard is effective for reporting periods ending after June 15, 2009. The Company adopted the provisions of SFAS 165 beginning in the second quarter of 2009. The adoption had no impact on the Company’s consolidated financial condition or results of operations.

In June 2009, the FASB issued Accounting Standards Update (ASU) 2009–No. 1 to Codification Topic 105 – “Generally Accepted Accounting Principles,” based on SFAS No. 168, “FASB Accounting Guidance Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of SFAS No. 162”. This statement establishes that the Codification becomes the single official source of authoritative U.S. GAAP superseding all non-SEC accounting and reporting standards and literature. Only one level of authoritative U.S. GAAP will exist and all other literature will be considered non-authoritative. The Codification became effective for interim and annual periods ending on or after September 15, 2009. The Company applied the Codification beginning in the third quarter of 2009. Given that the Codification does not change U.S. GAAP this statement had no impact on the Company’s consolidated financial condition or results of operations.

In October 2009, the FASB issued ASU 2009–No. 13 “Multiple-Deliverable Revenue Arrangements”, which amends Codification Topic 605 –“Revenue Recognition”. This provides amendments to the criteria for separating deliverables, measuring and allocating arrangement consideration to one or more units of accounting. This update establishes a selling price hierarchy for determining the selling price of a deliverable. ASU 2009–No. 13 is effective for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is required to and plans to adopt the provisions of this update beginning in the first quarter of 2011. The Company is currently assessing the impact of the adoption of ASU 2009–No. 13.

Note 2. Income Taxes

Based on management’s review of the Company’s tax positions, the Company had no significant unrecognized tax benefits as of September 30, 2009 and December 31, 2008.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2006. With respect to state and local jurisdictions and countries outside of the United States, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for years prior to 2001. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that may result from these open tax years.

The Company recognizes interest expense related to unrecognized tax benefits or underpayment of income taxes in interest expense and recognizes penalties in operating expenses. Any interest and penalties expensed in relation to the underpayment of income taxes were insignificant for the three and nine months ended September 30, 2009 and 2008.

Note 3. Equity

A. Stock Option Plans, Director Restricted Stock Plan and Stock Purchase Plan

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. In May 2009, the shareholders approved the Company’s 2009 Stock Option Plan (“2009 Plan”), which made available a total of 3,000,000 shares of the Company’s common stock for purchase upon exercise of options granted under the 2009 Plan. The Company’s annual grant of option awards and restricted shares generally takes place during the second quarter of each fiscal year. For the nine-month periods ended September 30, 2009 and 2008, 2,449,200 and 2,080,315 options were granted, respectively. Also, for the nine months ended September 30, 2009 and 2008, 29,230 and 25,488 shares were granted to non-employee directors under the 2008 Directors’ Restricted Stock Plan, respectively. For the three and nine-month periods ended September 30, 2009 and 2008, 714,799 and 732,720 shares were issued upon exercise of employee stock purchase rights, respectively.

The Company recognizes compensation expense based on the estimated fair value of options awarded under its stock option and employee stock purchase rights plans. The stock compensation expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The fair value of each option grant was estimated on the date of grant using the Black – Scholes option pricing model with the following assumptions used for grants issued during the nine months ended September 30, 2009 and 2008.

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	Nine months ended September 30,
	2009			2008
Dividend yield		1.22 — 1.25	%		.72 — .73	%
Volatility — stock option plans		38 — 39	%		34 — 37	%
Volatility — stock purchase rights plans		59	%		45	%
Risk-free interest rates		0.48 — 3.37	%		2.28 — 3.46	%
Expected life (years) — stock option plans		6.09 — 7.86			6.50 — 7.99
Expected life (years) — stock purchase rights plans		1			1
Weighted average fair value of stock options granted during the period	$	13.84		$	17.85
Weighted average fair value of stock purchase rights granted during the period	$	12.78		$	11.12

The compensation expense for restricted stock awards is based on the fair market value of the Company’s shares of common stock on the date of grant. On June 1, 2009 and June 1, 2008, restricted shares were granted with a fair value per share of $34.21 and $47.08, respectively.

Total stock compensation expense and the total related tax benefit recognized in the three and nine-months ended September 30, 2009 and 2008 are as follows:

	Three months ended September 30,				Nine months ended September 30,
	2009		2008		2009		2008
Stock compensation expense	$	10,794	$	11,513	$	29,065	$	34,116
Recognized tax benefit	$	58	$	234	$	206	$	824

B. Basic and Diluted Earnings per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders per share for the three months and nine months ended September 30, 2009 and 2008:

	Three months ended September 30,
(Amounts in thousands, except share and per share amounts)	Net Earnings Attributable to Shareholders		Weighted Average Shares	Earnings Per Share
2009
Basic earnings attributable to shareholders	$	57,752	212,241,480	$	.27
Effect of dilutive potential common shares		—	4,442,599		—
Diluted earnings attributable to shareholders	$	57,752	216,684,079	$	.27
2008
Basic earnings attributable to shareholders	$	85,565	212,747,871	$	.40
Effect of dilutive potential common shares		—	5,981,919		—
Diluted earnings attributable to shareholders	$	85,565	218,729,790	$	.39

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	Nine months ended September 30,
(Amounts in thousands, except share and per share amounts)	Net Earnings Attributable to Shareholders		Weighted Average Shares	Earnings Per Share
2009
Basic earnings attributable to shareholders	$	171,082	212,153,404	$	.81
Effect of dilutive potential common shares		—	4,428,966		—
Diluted earnings attributable to shareholders	$	171,082	216,582,370	$	.79
2008
Basic earnings attributable to shareholders	$	223,286	213,027,420	$	1.05
Effect of dilutive potential common shares		—	6,875,921		—
Diluted earnings attributable to shareholders	$	223,286	219,903,341	$	1.02

The following shares have been excluded from the computation of diluted earnings per share because the effect would have been antidilutive:

	Three months ended September 30,		Nine months ended September 30,
	2009	2008	2009	2008
Shares	8,789,330	6,646,208	8,789,830	6,646,208

C. Components of Equity and Comprehensive Income

The components of equity for the nine months ended September 30, 2009 and 2008 are as follows:

	Shareholders’ Equity			Noncontrolling Interest		Equity
Balance at December 31, 2008	$	1,366,418		17,498		1,383,916
Exercise of stock options		21,999		—		21,999
Issuance of shares under stock purchase plan		20,512		—		20,512
Shares repurchased under provisions of stock repurchase plans		(77,075	)	—		(77,075	)
Stock compensation expense		29,065		—		29,065
Tax benefits from stock plans		5,381		—		5,381
Purchase of noncontrolling interest		(281	)	(187	)	(468	)
Comprehensive income
Net earnings		171,082		(335	)	170,747
Foreign currency translation adjustments, net of tax of $8,348		15,221		—		15,221
Total comprehensive income		186,303		(335	)	185,968
Dividends paid ($.19 per share)		(40,276	)	—		(40,276	)
Distributions or declaration of dividends to noncontrolling interest(1)		—		(9,067	)	(9,067	)
Balance at September 30, 2009	$	1,512,046		7,909		1,519,955

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	Shareholders’ Equity			Noncontrolling Interest		Equity
Balance at December 31, 2007	$	1,226,571		16,748		1,243,319
Exercise of stock options		23,927		—		23,927
Issuance of shares under stock purchase plan		22,961		—		22,961
Shares repurchased under provisions of stock repurchase plans		(144,920	)	—		(144,920	)
Stock compensation expense		34,116		—		34,116
Tax benefits from stock plans		9,880		—		9,880
Comprehensive Income
Net earnings		223,286		987		224,273
Foreign currency translation adjustments, net of tax of $11,625		(21,776	)	13		(21,763	)
Total comprehensive income		201,510		1,000		202,510
Dividends paid ($.16 per share)		(34,161	)	—		(34,161	)
Distributions or declaration of dividends to noncontrolling interest		—		(879	)	(879	)
Balance at September 30, 2008	$	1,339,884		16,869		1,356,753

⁽¹⁾ Amount of earnings owed to the noncontrolling interest at the time their ownership interest was purchased. These earnings, reclassified from noncontrolling interest to accounts payable, will be distributed in periods subsequent to the effective date of the purchase, including $1,655 paid during the nine months ended September 30, 2009.

The components of total comprehensive income for interim periods are as follows:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2009			2008			2009			2008
Net earnings	$	57,564		$	86,146		$	170,747		$	224,273
Foreign currency translation adjustments net of tax of $(3,664) and $16,935 for the three months ended September 30, 2009 and 2008, and $(8,348) and $11,625 for the nine months ended September 30, 2009 and 2008, respectively.		6,674			(32,168	)		15,221			(21,763	)
Comprehensive income		64,238			53,978			185,968			202,510
Less comprehensive income attributable to noncontrolling interest		(196	)		51			(335	)		1,000
Comprehensive income attributable to shareholders		64,434			53,927			186,303			201,510

D. Stock and Cash Dividends

On May 7, 2009, the Board of Directors declared a semi-annual cash dividend of $.19 per share payable on June 15, 2009 to shareholders of record as of June 1, 2009.

On May 8, 2008, the Board of Directors declared a semi-annual cash dividend of $.16 per share payable on June 16, 2008 to shareholders of record as of June 2, 2008.

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Note 4. Fair Value of Financial Instruments

The Company’s financial instruments, other than cash, consist primarily of cash equivalents, short-term investments, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. Cash equivalents consist of highly liquid investments with a maturity of three months or less at date of purchase. Short term investments have a maturity of greater than three months at date of purchase. Cash, cash equivalents and short-term investments consist of the following:

	September 30, 2009				December 31, 2008
	Cost		Fair Value		Cost		Fair Value
Cash and cash equivalents:
Cash and overnight deposits	$	378,323	$	378,323	$	344,853	$	344,853
Corporate commercial paper		518,819		518,921		317,230		317,796
Time deposits		50,127		50,127		78,945		78,945
Total cash and cash equivalents		947,269		947,371		741,028		741,594
Short-term investments:
Time deposits		629		629		658		658
Total	$	947,898	$	948,000	$	741,686	$	742,252

The fair value of corporate commercial paper is based on the use of market interest rates for identical or similar assets.

Note 5. Contingencies

On October 10, 2007, the U. S. Department of Justice (DOJ) issued a subpoena ordering the Company to produce certain information and records relating to an investigation of alleged anti-competitive behavior amongst air cargo freight forwarders. The Company has retained the services of a law firm to assist in complying with the DOJ’s subpoena. As part of this process, the Company has met with and continues to co-operate with the DOJ. The Company expects to incur additional costs during the course of this ongoing investigation, which could include fines and/or penalties if the DOJ concludes that the Company has engaged in anti-competitive behavior and such fines and/or penalties could have a material impact on the Company’s financial position, results of operations and operating cash flows.

On January 3, 2008, the Company was named as a defendant, with seven other European and North American-based global logistics providers, in a Federal antitrust class action lawsuit filed in the United States District Court of the Eastern District of New York, Precision Associates, Inc. et al v. Panalpina World Transport, No. 08-CV0042. On July 21, 2009, the plaintiffs filed an amended complaint adding a number of new defendants and various claims which they assert to violate the Sherman Act. The plaintiffs’ amended complaint, which purports to be brought on behalf of a class of customers (and has not yet been certified), asserts claims that the defendants engaged in price fixing regarding eight discrete surcharges in violation of the Sherman Act. The allegations concerning the Company relate to two of these surcharges. The amended complaint seeks unspecified damages and injunctive relief. The Company believes that these allegations are without merit and intends to vigorously defend itself. On August 13, 2009, the Company filed a motion to dismiss the amended complaint for failure to state a claim, which is currently pending before the Court.

On June 18, 2008, the European Commission (EC) issued a request for information to the Company’s UK subsidiary, Expeditors International (UK) Ltd., requesting certain information relating to an ongoing investigation of freight forwarders. The Company replied to the request. On February 18, 2009, the EC issued another request for information to the same subsidiary requesting certain additional information in connection with the EC’s ongoing investigation of freight forwarders. The Company replied to the request. The Company expects to incur additional costs during the course of this ongoing investigation, which could include administrative fines if the EC concludes that the Company has engaged in anti-competitive behavior and such fines could have a material impact on the Company’s financial position, results of operations and operating cash flows.

The Company had incurred approximately $14 million of cumulative legal and associated costs on the above matters through September 30, 2009. At this time the Company is unable to estimate the range of loss or damages, if any, that might result as an outcome of any of these proceedings. These government investigations and the related litigation matters are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial monetary damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order relating to business conduct. Were unfavorable final outcomes to occur, the Company’s business, results of operations, financial position, and overall trends could be materially harmed.

The Company is involved in other claims and lawsuits which arise in the ordinary course of business, none of which currently, in management’s opinion, will have a significant effect on the Company’s operations or financial position.

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Note 6. Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, net revenues, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents.

Financial information regarding the Company’s operations by geographic area for the three and nine months ended September 30, 2009 and 2008 are as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA	EUROPE and AFRICA	MIDDLE EAST and INDIA	AUSTRAL- ASIA	ELIMI- NATIONS		CONSOLI- DATED
Three months ended September 30, 2009:
Revenues from unaffiliated customers	$	246,066	32,214	16,552	516,897	147,354	60,269	17,975	—		1,037,327
Transfers between geographic areas		18,293	1,716	3,461	4,227	6,487	3,738	2,595	(40,517	)	—
Total revenues	$	264,359	33,930	20,013	521,124	153,841	64,007	20,570	(40,517	)	1,037,327
Net revenues	$	139,232	16,667	10,960	89,490	57,857	20,771	11,535	—		346,512
Operating income	$	37,502	4,090	2,611	33,303	9,650	5,424	3,666	—		96,246
Identifiable assets at quarter end	$	1,135,327	73,500	37,216	435,584	376,050	121,079	35,518	2,613		2,216,887
Capital expenditures	$	7,656	186	171	248	506	588	159	—		9,514
Depreciation and amortization	$	5,048	358	245	1,868	1,593	646	165	—		9,923
Equity	$	1,656,409	44,455	14,982	308,304	137,278	70,531	22,487	(734,491	)	1,519,955
Three months ended September 30, 2008:
Revenues from unaffiliated customers	$	338,662	43,225	21,274	852,255	215,018	72,904	21,575	—		1,564,913
Transfers between geographic areas		30,807	2,883	4,327	5,624	11,966	4,757	2,307	(62,671	)	—
Total revenues	$	369,469	46,108	25,601	857,879	226,984	77,661	23,882	(62,671	)	1,564,913
Net revenues	$	166,045	19,199	14,069	119,309	74,089	23,270	13,146	—		429,127
Operating income	$	40,847	4,586	3,700	58,111	16,804	6,867	4,481	—		135,396
Identifiable assets at quarter end	$	980,475	79,031	55,979	527,520	467,859	116,698	38,139	4,636		2,270,337
Capital expenditures	$	9,219	658	171	9,861	3,748	925	49	—		24,631
Depreciation and amortization	$	5,418	371	316	1,686	1,611	600	220	—		10,222
Equity	$	1,488,514	40,254	26,464	397,491	175,093	57,088	25,735	(853,886	)	1,356,753
Nine months ended September 30, 2009:
Revenues from unaffiliated customers	$	704,962	91,482	47,486	1,373,093	415,479	167,848	45,022	—		2,845,372
Transfers between geographic areas		54,847	5,340	9,972	11,863	19,086	11,005	7,448	(119,561	)	—
Total revenues	$	759,809	96,822	57,458	1,384,956	434,565	178,853	52,470	(119,561	)	2,845,372
Net revenues	$	399,614	47,718	32,645	275,680	165,623	61,229	30,565	—		1,013,074
Operating income	$	95,483	11,512	8,691	107,424	26,417	15,362	9,758	—		274,647
Identifiable assets at quarter end	$	1,135,327	73,500	37,216	435,584	376,050	121,079	35,518	2,613		2,216,887
Capital expenditures	$	19,268	477	582	1,259	1,847	1,486	417	—		25,336
Depreciation and amortization	$	15,828	1,031	729	5,714	4,490	1,860	473	—		30,125
Equity	$	1,656,409	44,455	14,982	308,304	137,278	70,531	22,487	(734,491	)	1,519,955
Nine months ended September 30, 2008:
Revenues from unaffiliated customers	$	961,377	119,691	63,269	2,300,191	609,879	207,261	64,821	—		4,326,489
Transfers between geographic areas		81,953	7,579	11,060	16,364	33,725	13,293	6,599	(170,573	)	—
Total revenues	$	1,043,330	127,270	74,329	2,316,555	643,604	220,554	71,420	(170,573	)	4,326,489
Net revenues	$	470,573	53,882	39,246	322,738	212,148	64,223	37,970	—		1,200,780
Operating income	$	102,254	11,779	10,499	152,878	46,600	17,580	12,341	—		353,931
Identifiable assets at quarter end	$	980,475	79,031	55,979	527,520	467,859	116,698	38,139	4,636		2,270,337
Capital expenditures	$	20,022	1,848	940	16,371	7,042	2,532	402	—		49,157
Depreciation and amortization	$	16,223	1,011	918	4,439	5,060	1,683	716	—		30,050
Equity	$	1,488,514	40,254	26,464	397,491	175,093	57,088	25,735	(853,886	)	1,356,753

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995; CERTAIN CAUTIONARY STATEMENTS

Certain portions of this report on Form 10-Q including the section entitled “Currency and Other Risk Factors” and “Liquidity and Capital Resources” contain forward-looking statements which must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. In addition to risk factors identified elsewhere in this report, attention should be given to the factors identified and discussed in the report on Form 10-K filed on February 27, 2009.

We maintain an “Investor Relations” page on our website, www.investor.expeditors.com, which has important information for investors and the market regarding our Company. Our Investor Relations page includes information regarding a Rule 10b5-1 executive trading plan under the heading “Stock Transactions”, and will be updated regularly for any additional Rule 10b5-1 trading plans that are entered into by directors or executive officers of the Company or by the Company itself.

EXECUTIVE SUMMARY

Expeditors International of Washington, Inc. is engaged in the business of global logistics management, including international freight forwarding and consolidation, for both air and ocean freight. The Company acts as a customs broker in all domestic offices, and in many of its international offices. The Company also provides additional services for its customers including value-added distribution, purchase order management, vendor consolidation and other logistics solutions. The Company does not compete for overnight courier or small parcel business. The Company does not own or operate aircraft or steamships.

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International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, and United States and foreign laws and policies relating to tariffs, trade restrictions, foreign investments and taxation. Periodically, governments consider a variety of changes to current tariffs and trade restrictions. The Company cannot predict which, if any, of these proposals may be adopted, nor can the Company predict the effects the adoption of any such proposal will have on the Company’s business. Doing business in foreign locations also subjects the Company to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies concerning international trade, the Company’s business may also be affected by political developments and changes in government personnel or policies, as well as economic turbulence or security concerns in the nations in which it does business. The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. Consistent with current economic conditions, the Company’s pricing continues to be pressured by customers and service providers.

The Company derives its revenues from three principal sources: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. These are the revenue categories presented in the financial statements.

As a non-asset based carrier, the Company does not own transportation assets. Rather, the Company generates the major portion of its air and ocean freight revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to its customers. The difference between the rate billed to customers (the sell rate), and the rate paid to the carrier (the buy rate) is termed “net revenue” or “yield.” By consolidating shipments from multiple customers and concentrating its buying power, the Company is able to negotiate favorable buy rates from the direct carriers, while at the same time offering lower sell rates than customers would otherwise be able to negotiate themselves.

Customs brokerage and other services involves providing services at destination, such as helping customers clear shipments through customs by preparing required documentation, calculating and providing for payment of duties and other taxes on behalf of the customers as well as arranging for any required inspections by governmental agencies, and arranging for delivery. This is a complicated function requiring technical knowledge of customs rules and regulations in the multitude of countries in which the Company has offices.

The Company’s ability to provide services to its customers is highly dependent on good working relationships with a variety of entities including airlines, ocean steamship lines, and governmental agencies. The significance of maintaining acceptable working relationships with governmental agencies and asset-based providers involved in global trade has gained increased importance as a result of ongoing concern over terrorism. As each carrier labors to comply with governmental regulations implementing security policies and procedures, inherent conflicts emerge which can and do affect global trade to some degree. A good reputation helps to develop practical working understandings that will effectively meet security requirements while minimizing potential international trade obstacles. The Company considers its current working relationships with these entities to be satisfactory. However, changes in the financial stability, operating capabilities and capacity of asset-based carriers, space allotments made available to the Company by asset-based carriers, governmental regulation or deregulation efforts, “modernization” of the regulations governing customs brokerage, and/or changes in governmental quota restrictions could affect the Company’s business in unpredictable ways.

Historically, the Company’s operating results have been subject to a seasonal trend when measured on a quarterly basis. The first quarter has traditionally been the weakest and the third and fourth quarters have traditionally been the strongest. This pattern is the result of, or is influenced by, numerous factors including climate, national holidays, consumer demand, economic conditions and a myriad of other similar and subtle forces. In addition, this historical quarterly trend has been influenced by the growth and diversification of the Company’s international network and service offerings. The Company cannot accurately forecast many of these factors nor can the Company estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns, if any, will continue in future periods.

Primarily as a result of the global economic downturn, the Company’s air and ocean freight volumes were lower for the nine months ended September 30, 2009 as compared to the same period in 2008. This decline in volumes started in the second half of 2008. At this point in time, the Company cannot predict the ongoing impact of the current global economic downturn or whether various governmental stimulus plans will be effective. Both the total revenues and net revenues for the nine-month period ended September 30, 2009 were lower than the comparable amounts for the same period in 2008. These results are unprecedented in the Company’s history.

A significant portion of the Company’s revenues are derived from customers in retail industries whose shipping patterns are tied closely to consumer demand, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules. Therefore, the timing of the Company’s revenues are, to a large degree, impacted by factors out of the Company’s control, such as a sudden change in consumer demand for retail goods and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter, and therefore, the Company may not learn of a shortfall in revenues until late in a quarter. To the extent that a shortfall in revenues or earnings was not expected by securities analysts, any such shortfall from levels predicted by securities analysts could have an immediate and adverse effect on the trading price of the Company’s stock.

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As further discussed under liquidity and capital resources, total capital expenditures in 2009 are expected to approximate $45 million.

In terms of the opportunities, challenges and risks that management is focused on in 2009, the Company operates in 61 countries throughout the world in the competitive global logistics industry and Company activities are tied directly to the global economy. From the inception of the Company, management has believed that the elements required for a successful global service organization can only be assured through recruiting, training, and ultimately retaining superior personnel. The Company’s greatest challenge is now and always has been perpetuating a consistent global culture which demands:

• Total dedication, first and foremost, to providing superior customer service;

• Aggressive marketing of all of the Company’s service offerings;

• Ongoing development of key employees and management personnel via formal and informal means;

• Creation of unlimited advancement opportunities for employees dedicated to hard work, personal growth and continuous improvement;

• Individual commitment to the identification and mentoring of successors for every key position so that when inevitable change is required, a qualified and well-trained internal candidate is ready to step forward; and

• Continuous identification, design and implementation of system solutions, both technological and otherwise, to meet and exceed the needs of our customers while simultaneously delivering tools to make our employees more efficient and more effective.

The Company has reinforced these values with a compensation system that rewards employees for profitably managing the things they can control. There is no limit to how much a key manager can be compensated for success. The Company believes in a “real world” environment in every operating unit where individuals are not sheltered from the profit implications of their decisions. At the same time, the Company insists on continued focus on such things as accounts receivable collection, cash flow management and credit soundness in an attempt to insulate managers from the sort of catastrophic errors that might end a career.

Any failure to perpetuate this unique culture on a self-sustained basis throughout the Company, provides a greater threat to the Company’s continued success than any external force, which would be largely beyond our control. Consequently, management spends the majority of its time focused on creating an environment where employees can learn and develop while also building systems and taking preventative action to reduce exposure to negative events. The Company strongly believes that it is nearly impossible to predict events that, in the aggregate, could have a positive or a negative impact on future operations. As a result our focus is on building and maintaining a global culture of well-trained employees and managers that are prepared to identify and react to subtle changes as they develop and thereby help the Company adapt and thrive as major trends emerge.

Critical Accounting Estimates

Management believes that the nature of the Company’s business is such that there are few complex challenges in accounting for operations.

While judgments and estimates are a necessary component of any system of accounting, the Company’s use of estimates is limited primarily to the following areas that in the aggregate are not a major component of the Company’s statement of earnings:

• accounts receivable valuation;

• the useful lives of long-term assets;

• the accrual of costs related to ancillary services the Company provides;

• establishment of adequate insurance liabilities for the portion of the freight related exposure which the Company has self-insured;

• accrual of various tax liabilities; and

• calculation of share-based compensation expense.

These estimates, other than the calculation of share-based compensation expense, are not highly uncertain and have not historically been subject to significant change. Management believes that the methods utilized in all of these areas are non-aggressive in approach and consistent in application. Management believes that there are limited, if any, alternative accounting principles or methods which could be applied to the Company’s transactions. While the use of estimates means that actual future results may be different from those contemplated by the estimates, the Company believes that alternative principles and methods used for making such estimates would not produce materially different results than those reported.

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As described in Note 3 in the condensed consolidated financial statements in this quarterly report, the Company accounts for share-based compensation based on an estimate of the fair value of options granted to employees under the Company’s stock option and stock purchase rights plans. This expense is recorded on a straight-line basis over the option vesting periods.

Determining the appropriate option pricing model to use to estimate stock compensation expense requires judgment. Any option pricing model requires assumptions that are subjective and these assumptions also require judgment. Examples include assumptions about long-term stock price volatility, employee exercise patterns, pre-vesting option forfeitures, post-vesting option terminations, and the future interest rates and dividend yields. The Company uses the Black-Scholes model for estimating the fair value of stock options. Refer to Note 3 in the condensed consolidated financial statements for the assumptions used for grants issued during the nine months ended September 30, 2009 and 2008.

Management believes that the assumptions used are appropriate based upon the Company’s historical and currently expected future experience. Looking to future events, management has been strongly influenced by historical patterns which may not be valid predictors of future developments and any future deviation may be material.

The Company’s expected volatility assumptions are based on the historical volatility of the Company’s stock. The expected life assumption is primarily based on historical employee exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the corresponding yield curve in effect at the time of grant for U.S. Treasury bonds having the same term as the expected life of the option, i.e. a ten year bond rate is used for valuing an option with a ten year expected life. The expected dividend yield is based on the Company’s historical experience. The forfeiture rate used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns.

The use of different assumptions would result in different amounts of stock compensation expense. Keeping all other variables constant, the indicated change in each of the assumptions below increases or decreases the fair value of an option (and the resulting stock compensation expense), as follows:

Assumption	Change in assumption	Impact of fair value of options
Expected volatility	Higher	Higher
Expected life of option	Higher	Higher
Risk-free interest rate	Higher	Higher
Expected dividend yield	Higher	Lower

The fair value of an option is more significantly impacted by changes in the expected volatility and expected life assumptions. The pre-vesting forfeitures assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeitures assumption would not impact the total amount of expense ultimately recognized over the vesting period. Different forfeitures assumptions would only impact the timing of expense recognition over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances.

Results of Operations

The following table shows the consolidated net revenues (revenues less transportation expenses) attributable to the Company’s principal services and the Company’s expenses for the three and nine-month periods ended September 30, 2009 and 2008, expressed as percentages of net revenues. Management believes that net revenues are a better measure than total revenues of the relative importance of the Company’s principal services since total revenues earned by the Company as a freight consolidator include the carriers’ charges to the Company for carrying the shipment whereas revenues earned by the Company in its other capacities include only the commissions and fees actually earned by the Company.

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The table and the accompanying discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto which appear elsewhere in this quarterly report.

	Three months ended September 30,									Nine months ended September 30,
	2009				2008					2009				2008
	Amount		Percent of net revenues		Amount			Percent of net revenues		Amount		Percent of net revenues		Amount			Percent of net revenues
	(Amounts in thousands)
Net Revenues:
Airfreight services	$	116,659	34	%	$	149,480		35	%	$	355,089	35	%	$	429,343		36	%
Ocean freight and ocean services		83,721	24			112,533		26			244,530	24			295,591		24
Customs brokerage and other services		146,132	42			167,114		39			413,455	41			475,846		40
Net revenues		346,512	100			429,127		100			1,013,074	100			1,200,780		100
Overhead Expenses:
Salaries and related costs		194,743	56			224,809		52			571,517	56			646,159		54
Other		55,523	16			68,922		16			166,910	17			200,690		17
Total overhead expenses		250,266	72			293,731		68			738,427	73			846,849		71
Operating income		96,246	28			135,396		32			274,647	27			353,931		29
Other income, net		3,081	1			7,207		1			15,675	2			18,052		2
Earnings before income taxes		99,327	29			142,603		33			290,322	29			371,983		31
Income tax expense		41,763	12			56,457		13			119,575	12			147,710		12
Net earnings		57,564	17			86,146		20			170,747	17			224,273		19
Net earnings attributable to noncontrolling interest		188	—			(581	)	—			335	—			(987	)	—
Net earnings attributable to shareholders	$	57,752	17	%	$	85,565		20	%	$	171,082	17	%	$	223,286		19	%

Airfreight services net revenues decreased 22% for the three-month period ended September 30, 2009, as compared with the same period for 2008. North America, Asia and Europe airfreight services net revenues decreased 17%, 28% and 23%, respectively, for the third quarter of 2009 as compared with the same period in 2008. The decrease in global airfreight services net revenues was primarily due to a 14% decrease in net revenue per kilo and a 9% decline in airfreight tonnage.

Airfreight services net revenues decreased 17% for the nine-month period ended September 30, 2009, as compared with the same period for 2008. North America, Asia and Europe airfreight services net revenues decreased 19%, 14% and 25%, respectively, for the nine-month period ended September 30, 2009 as compared with the same period in 2008. The decrease in global airfreight services net revenues was primarily due to a 21% decline in airfreight tonnage, which was partially offset by an overall 11% increase in net revenue per kilo.

These decreases in airfreight tonnage are primarily due to the global economic downturn which began in the second half of 2008. Net revenue per kilo increased during the nine months of 2009 as compared to the same period in 2008, as a result of favorable buying opportunities that developed in a number of short-term spot markets during the first six months of 2009. This increase was partially offset during September 2009, as air carriers removed significant capacity from the markets while rapidly and aggressively increasing airfreight pricing, particularly in Asia. The Company absorbed these price increases during the short-term, pending negotiation with and acceptance by the Company’s customers. This factor was primarily responsible for the decline in net revenue per kilo in the third quarter of 2009.

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Ocean freight and ocean services net revenues decreased 26% for the three-month period ended September 30, 2009, as compared with the same period for 2008. North America, Asia and Europe ocean freight net revenues decreased approximately 27%, 26% and 29%, respectively, for the third quarter of 2009 as compared with the same period in 2008.

Ocean freight and ocean services net revenues decreased 17% for the nine-month period ended September 30, 2009, as compared with the same period for 2008. North America, Asia and Europe ocean freight net revenues decreased approximately 17%, 18% and 20%, respectively, for the nine-month period ended September 30, 2009 as compared with the same period in 2008.

Ocean freight net revenues are comprised of three basic services: ocean freight consolidation, direct ocean forwarding and order management. The majority of the Company’s ocean freight net revenue is derived from ocean freight consolidation which represented 53% and 58% of ocean freight net revenue for the nine-month periods ended September 30, 2009 and 2008, respectively.

Ocean freight consolidation net revenue decreased 37% for the three-month period ended September 30, 2009 as compared with the same period in 2008, primarily due to a 19% decrease in volume as measured in terms of forty-foot container equivalent units (FEUs), and a 23% decrease in net revenue per container. Direct ocean freight forwarding, which is primarily fee-based, decreased 13% for the three-month period ended September 30, 2009 as compared with the same period in 2008, due to a decrease in volume. Order management, which is also primarily fee-based, decreased 7% for the three-month period ended September 30, 2009, as compared to the same period in 2008.

Ocean freight consolidation net revenue decreased 25% for the nine-month period ended September 30, 2009, as compared with the same period in 2008, primarily due to a 21% decrease in volume and a 6% decrease in net revenue per container. Direct ocean freight forwarding, which is primarily fee-based, decreased 9% for the nine-month period ended September 30, 2009, as compared with the same period in 2008, due to a decrease in volume. Order management remained relatively constant for the nine-month period ended September 30, 2009, as compared with the same period in 2008.

These decreases in ocean volumes are primarily due to the global economic downturn. Net revenue per container decreased during the nine months ended September 30, 2009, as compared to the same period in 2008, as steamship lines removed significant capacity from the market and implemented price increases, particularly on the Pacific North America lanes. The combination of these moves eliminated the favorable buying opportunities that existed in the first six months of 2009. Consistent with the Company’s experience in airfreight, these price increases were absorbed during the third quarter of 2009, pending negotiation with and acceptance by the Company’s customers.

Customs brokerage and other services net revenues decreased 13% for both the three and the nine-month periods ended September 30, 2009, as compared with the same periods for 2008, primarily as a result of declines in air and ocean freight volumes. Customers continue to seek out customs brokers with more sophisticated computerized capabilities critical to an overall logistics management program, including rapid responses to changes in the regulatory and security environment.

Salaries and related costs decreased 13% and 12% for the three and nine-month periods ended September 30, 2009, as compared with the same periods in 2008, primarily as a result of (i) smaller bonuses due to lower operating income, (ii) an overall decrease in base salaries directly related to a lower headcount and (iii) lower stock compensation expense.

The effects of including stock-based compensation expense in salaries and related costs for the three and nine months ended September 30, 2009 and 2008 are as follows:

	For the three months ended September 30,						For the nine months ended September 30,
	2009			2008			2009			2008
Salaries and related costs	$	194,743		$	224,809		$	571,517		$	646,159
As a % of net revenue		56.2	%		52.4	%		56.4	%		53.8	%
Stock compensation expense	$	10,794		$	11,513		$	29,065		$	34,116
As a % of salaries and related costs		5.5	%		5.1	%		5.1	%		5.3	%
As a % of net revenue		3.1	%		2.7	%		2.9	%		2.8	%

Excluding stock compensation expense, salaries and related costs as a percentage of net revenue increased 338 and 257 basis points, respectively, for the three and nine-month periods ended September 30, 2009, as compared with the same periods for 2008. This increase is largely due to the fixed nature of base salaries and management’s commitment to maintaining its people during this economic downturn. Stock compensation expense declined 6% for the three-month period ended September 30, 2009, as compared with the same period for 2008. Stock compensation expense declined 15% for the nine-month period ended September 30, 2009, as compared with the same period for 2008, primarily a result of a $4 million “true up” credit recognized in the first quarter of 2009 for the difference between the higher actual pre-vesting forfeiture experience and the pre-vesting forfeiture assumptions used to calculate stock option expense. The net impact on salaries and related costs was $3 million after consideration of the effect on bonuses. This credit relates primarily to stock option grants made in 2006, the majority of which began vesting in May 2009.

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Historically, the relatively consistent relationship between salaries and net revenues is the result of a compensation philosophy that has been maintained since the inception of the Company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee. Using this compensation model, changes in individual incentive compensation will occur in proportion to changes in Company profits, creating a direct alignment between corporate performance and shareholder interests. Management believes that long term growth in revenues, net revenues and net earnings are a result of the incentives inherent in the Company’s compensation program.

Other overhead expenses decreased 19% and 17%, respectively, for the three and nine-month periods ended September 30, 2009, as compared with the same periods in 2008, primarily as a result of continued cost reduction measures, including cutbacks on travel and entertainment expenses. Legal and related expenses decreased approximately $3 million and $9 million for the three and nine-month periods, respectively, as compared to the same periods in 2008, primarily attributable to lower activity related to governmental regulatory agencies’ ongoing investigations of air cargo freight forwarders and related legal proceedings as described further in Part II – Item 1 of this report on Form 10-Q entitled “Legal Proceedings”. Further, the Company periodically conducts reviews of the operations and procedures of its offices worldwide relating to compliance with applicable laws and regulations. The Company will continue to incur legal costs, which could be substantial and include judgements, fines and/or penalties, until these proceedings are concluded. If the governmental regulatory agencies conclude that the Company has engaged in anti-competitive behavior or in the event of an adverse judgement in the class action lawsuit, such judgements, fines and/or penalties could have a material impact on the Company’s financial condition, results of operations and operating cash flows. Other overhead expenses as a percentage of net revenues remained constant for the three and nine-month periods ended September 30, 2009, as compared with the same period in 2008.

Other income, net, decreased 57% and 13%, respectively, for the three and nine-month periods ended September 30, 2009, as compared with the same periods in 2008. Due to lower average interest rates during the three and nine months ended September 30, 2009, as compared with the same periods for 2008, interest income decreased $3 and $7 million, respectively.

The Company pays income taxes in the United States and other jurisdictions, as well as other taxes which are typically included in costs of operations. The Company’s consolidated effective income tax rate during the three-month period ended September 30, 2009, was 42.1% as compared to 39.6% for the same period in 2008. The Company’s consolidated effective income tax rate during the nine-month period ended September 30, 2009 was 41.2% as compared to 39.7% for the same period in 2008. Although a tax benefit related to stock-based compensation expense is recorded for non-qualified stock options at the time the related compensation expense is recognized, the tax benefit received for disqualifying dispositions of incentive stock options cannot be anticipated. The higher consolidated effective income tax rate during the three and nine-month periods ended September 30, 2009, as compared to the same periods in 2008, is primarily the result of a lower tax benefit received for disqualifying dispositions of incentive stock options occurring during the three and nine months ended September 30, 2009, as compared to the same periods in 2008.

Currency and Other Risk Factors

International air/ocean freight forwarding and customs brokerage are intensively competitive and are expected to remain so for the foreseeable future. There are a large number of entities competing in the international logistics industry; however, the Company’s primary competition is confined to a relatively small number of companies within this group. While there is currently a marked trend within the industry toward consolidation into large firms with multinational offices and agency networks, regional and local broker/forwarders remain a competitive force.

Historically, the primary competitive factors in the international logistics industry have been price and quality of service, including reliability, responsiveness, expertise, convenience, and scope of operations. The Company emphasizes quality service and believes that its prices are competitive with those of others in the industry. Customers have exhibited a trend towards more sophisticated and efficient procedures for the management of the logistics supply chain by embracing strategies such as just-in-time inventory management. The Company believes that this trend has resulted in customers using fewer service providers with greater technological capacity and more consistent global coverage. Accordingly, sophisticated computerized customer service capabilities and a stable worldwide network have become significant factors in attracting and retaining customers.

Developing these systems and a worldwide network has added a considerable indirect cost to the services provided to customers. Smaller and middle-tier competitors, in general, do not have the resources available to develop customized systems and a worldwide network. As a result, there is a trend of consolidation currently taking place in the industry. Management expects that this trend toward consolidation will continue for the short- to medium-term.

The nature of the Company’s worldwide operations necessitates the Company dealing with a multitude of currencies other than the U.S. dollar. This results in the Company being exposed to the inherent risks of the international currency markets and governmental interference. Some of the countries where the Company maintains offices and/or agency relationships have strict currency control regulations which influence the Company’s ability to hedge foreign currency exposure. The Company tries to compensate for these exposures by accelerating international currency settlements among its offices or agents. The Company enters into foreign currency hedging transactions only in limited locations where there are regulatory or commercial limitations on the Company’s ability to move money freely or the short-term financial outlook is such that hedging is the way to avoid short-term exchange losses. Any such hedging activity during the three and nine months ended September 30, 2009 and 2008 was insignificant. For the three and nine months ended September 30, 2009, the Company incurred foreign exchange gains of approximately $281 and $1,628, respectively, on a net basis. For the same periods of 2008, the Company incurred foreign exchange gains of approximately $1,896 and $878, respectively, on a net basis. The Company had no foreign currency derivatives outstanding at September 30, 2009 and December 31, 2008.

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Sources of Growth

During the third quarter of 2009, the Company did not open any new offices and closed one satellite office in Port Elizabeth, South Africa.

Acquisitions—Historically, growth through aggressive acquisition has proven to be a challenge for many of the Company’s competitors and typically involves the purchase of significant “goodwill”, the value of which can be realized in large measure only by retaining the customers and profit margins of the acquired business. As a result, the Company has pursued a strategy emphasizing organic growth supplemented by certain strategic acquisitions, where future economic benefit significantly exceeds the “goodwill” recorded in the transaction.

Internal Growth—Management believes that a comparison of “same store” growth is critical in the evaluation of the quality and extent of the Company’s internally generated growth. This “same store” analysis isolates the financial contributions from offices that have been included in the Company’s operating results for at least one full year. The table below presents “same store” comparisons for the three and nine months ended September 30, 2009 (which is the measure of any increase or decrease from the same period of 2008) and for the three and nine months ended September 30, 2008 (which measures growth over 2007).

	For the three months ended September 30,				For the nine months ended September 30,
	2009		2008		2009		2008
Net revenue	(19	)%	11	%	(16	)%	12	%
Operating income	(29	)%	13	%	(22	)%	12	%

Liquidity and Capital Resources

The Company’s principal source of liquidity is cash generated from operating activities. Net cash provided by operating activities for the three and nine months ended September 30, 2009, was $42 million and $300 million, respectively, as compared with $92 million and $306 million for the same periods of 2008. The $6 million decrease for the nine months ended September 30, 2009, is primarily due to a decrease in net earnings offset by changes in working capital accounts. At September 30, 2009, working capital was $1,022 million, including cash, cash equivalents and short-term investments of $948 million. The Company had no long-term debt at September 30, 2009.

The Company’s business is subject to seasonal fluctuations. Cash flow fluctuates as a result of this seasonality. Historically, the first quarter shows an excess of customer collections over customer billings. This results in positive cash flow. The increased activity associated with peak season (typically commencing late second or early third quarter) causes an excess of customer billings over customer collections. This cyclical growth in customer receivables consumes available cash.

As a customs broker, the Company makes significant 5-10 business day cash advances for its customers’ obligations such as the payment of duties in the United States to the Customs and Border Protection Division of the Department of Homeland Security. These advances are made as an accommodation for a select group of credit-worthy customers. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency.

Cash used in investing activities for the three and nine months ended September 30, 2009, was $11 million and $36 million, respectively, as compared with $24 million and $48 million during the same periods of 2008. The Company does have need, on occasion, to purchase buildings to house staff and to facilitate the staging of customers’ freight. The Company routinely invests in technology, office furniture and equipment and leasehold improvements. In the third quarter of 2009, the Company made capital expenditures of $10 million as compared with $25 million for the same period in 2008. The Company currently expects to spend approximately $10 million for ongoing capital expenditures in the fourth quarter of 2009. In addition to property and equipment, ongoing capital expenditures include leasehold improvements, warehouse equipment, computer hardware and furniture and fixtures. Total capital expenditures in 2009 are estimated to be $45 million. This includes normal capital expenditures as noted above, plus additional real estate acquisitions and development.

Cash used in financing activities during the three and nine-months ended September 30, 2009 was $10 million and $73 million, respectively, as compared with $49 million and $123 million for each of the same periods in 2008. The Company uses the proceeds from stock option exercises to repurchase the Company’s common stock on the open market. The Company follows a policy of repurchasing stock to limit growth in issued and outstanding shares as a result of stock option exercises. The changes in cash used in financing activities during the three and nine months ended September 30, 2009 as compared with the same periods in 2008 is primarily the result of this policy. During the nine months ended September 30, 2009 and 2008 the net use of cash in financing activities included the payment of dividends of $.19 per share and $.16 per share, respectively.

On November 3, 2009, the Board of Directors declared a semi-annual cash dividend of $.19 per share payable on December 15, 2009 to shareholders of record as of December 1, 2009.

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The Company cannot forecast the impact that the ongoing uncertainties in the world financial markets may have on the underlying global economy. Management believes that the Company has effective credit control procedures, and historically has experienced relatively insignificant collection problems. The Company cannot predict what fallout these uncertainties may have on freight volumes, changes in consumer demand, supplier stability and capacity or on customers’ abilities to pay.

The Company maintains international unsecured bank lines of credit. At September 30, 2009, the international bank lines of credit totaled $25 million. In addition, the Company maintains a bank facility with its U.K. bank for $11 million which is available for issuances of standby letters of credit. At September 30, 2009, the Company had no amounts outstanding on these lines of credit but was contingently liable for $80 million from standby letters of credit and guarantees. The standby letters of credit and guarantees relate to obligations of the Company’s foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value-added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excises are properly recorded as obligations in the books of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company is required to perform.

Management believes that the Company’s current cash position, bank financing arrangements, and operating cash flows will be sufficient to meet its capital and liquidity requirements for the foreseeable future, including meeting any contingent liabilities related to standby letters of credit and other obligations.

In some cases, the Company’s ability to repatriate funds from foreign operations may be subject to foreign exchange controls. At September 30, 2009, cash and cash equivalent balances of $471 million were held by the Company’s non-U.S. subsidiaries, of which $63 million was held in banks in the United States.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risks in the ordinary course of its business. These risks are primarily related to foreign exchange risk and changes in short-term interest rates. The potential impact of the Company’s exposure to these risks is presented below:

Foreign Exchange Risk

The Company conducts business in many different countries and currencies. The Company’s business often results in revenue billings issued in a country and currency which differs from that where the expenses related to the service are incurred. In the ordinary course of business, the Company creates numerous intercompany transactions. This brings a market risk to the Company’s earnings.

Foreign exchange rate sensitivity analysis can be quantified by estimating the impact on the Company’s earnings as a result of hypothetical changes in the value of the U.S. dollar, the Company’s functional currency, relative to the other currencies in which the Company transacts business. All other things being equal, an average 10% weakening of the U.S. dollar, throughout the nine months ended September 30, 2009, would have had the effect of raising operating income approximately $21 million. An average 10% strengthening of the U.S. dollar, for the same period, would have had the effect of reducing operating income approximately $17 million. This analysis does not take into account changes in shipping patterns based upon this hypothetical currency fluctuation. For example, a weakening in the U.S. dollar would be expected to increase exports from the United States and decrease imports into the United States over some relevant period of time, but the exact effect of this change cannot be quantified without making speculative assumptions.

As of September 30, 2009, the Company had approximately $3 million of net unsettled intercompany transactions. The Company currently does not use derivative financial instruments to manage foreign currency risk and only enters into foreign currency hedging transactions in limited locations where regulatory or commercial limitations restrict the Company’s ability to move money freely. Any such hedging activity during the three and nine months ended September 30, 2009, was insignificant. For the three and nine months ended September 30, 2009, the Company incurred foreign exchange gains of approximately $281 and $1,628, respectively, on a net basis. For the same periods of 2008, the Company incurred foreign exchange gains of approximately $1,896 and $878, respectively, on a net basis. The Company had no foreign currency derivatives outstanding at September 30, 2009 and December 31, 2008. The Company instead follows a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. The majority of intercompany billings are resolved within 30 days and intercompany billings arising in the normal course of business are fully settled within 90 days.

Interest Rate Risk

At September 30, 2009, the Company had cash, cash equivalents and short-term investments of $948 million, of which $570 million was invested at various short-term market interest rates. The Company had no short-term borrowings at September 30, 2009. A hypothetical change in the interest rate of 10% would not have a significant impact on the Company’s earnings.

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In management’s opinion, there has been no material change in the Company’s market risk exposure in the third quarter of 2009.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

We have confidence in the Company’s internal controls and procedures. Nevertheless, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s disclosure procedures and controls or the Company’s internal controls will prevent all errors or intentional fraud. An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all the Company’s control issues and instances of fraud, if any, have been detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On October 10, 2007, the U. S. Department of Justice (DOJ) issued a subpoena ordering the Company to produce certain information and records relating to an investigation of alleged anti-competitive behavior amongst air cargo freight forwarders. The Company has retained the services of a law firm to assist in complying with the DOJ’s subpoena. As part of this process, the Company has met with and continues to co-operate with the DOJ. The Company expects to incur additional costs during the course of this ongoing investigation, which could include fines and/or penalties if the DOJ concludes that the Company has engaged in anti-competitive behavior and such fines and/or penalties could have a material impact on the Company’s financial position, results of operations and operating cash flows.

On January 3, 2008, the Company was named as a defendant, with seven other European and North American-based global logistics providers, in a Federal antitrust class action lawsuit filed in the United States District Court of the Eastern District of New York, Precision Associates, Inc. et al v. Panalpina World Transport, No. 08-CV0042. On July 21, 2009, the plaintiffs filed an amended complaint adding a number of new defendants and various claims which they assert to violate the Sherman Act. The plaintiffs’ amended complaint, which purports to be brought on behalf of a class of customers (and has not yet been certified), asserts claims that the defendants engaged in price fixing regarding eight discrete surcharges in violation of the Sherman Act. The allegations concerning the Company relate to two of these surcharges. The amended complaint seeks unspecified damages and injunctive relief. The Company believes that these allegations are without merit and intends to vigorously defend itself. On August 13, 2009, the Company filed a motion to dismiss the amended complaint for failure to state a claim, which is currently pending before the Court.

On June 18, 2008, the European Commission (EC) issued a request for information to the Company’s UK subsidiary, Expeditors International (UK) Ltd., requesting certain information relating to an ongoing investigation of freight forwarders. The Company replied to the request. On February 18, 2009, the EC issued another request for information to the same subsidiary requesting certain additional information in connection with the EC’s ongoing investigation of freight forwarders. The Company replied to the request. The Company expects to incur additional costs during the course of this ongoing investigation, which could include administrative fines if the EC concludes that the Company has engaged in anti-competitive behavior and such fines could have a material impact on the Company’s financial position, results of operations and operating cash flows.

The proceedings described above generally relate to investigations of freight forwarders or allegations of anti-competitive behaviour. The distractions caused by these proceedings and the legal and other costs associated with these proceedings have been and continue to be significant. The Company has incurred approximately $14 million of cumulative legal and associated costs on the above matters through September 30, 2009. At this time the Company is unable to estimate the range of loss or damages, if any, that might result as an outcome of any of these proceedings. The Company assumes, as should investors, that these challenges could continue for a significant period of time and may require the investment of substantial additional management time and substantial financial resources. These government investigations and the related litigation matters are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial monetary damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order relating to be business conduct. Were unfavorable final outcomes to occur, the Company’s business, results of operations, financial position, and overall trends could be materially harmed.

The Company is involved in other claims and lawsuits which arise in the ordinary course of business, none of which currently, in management’s opinion, will have a significant effect on the Company’s operations or financial position.

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Item 1A. Risk Factors

There have been no material changes in the Company’s risk factors from those disclosed in the report on Form 10-K filed on February 27, 2009, except for the following:

RISK FACTOR	DISCUSSION AND POTENTIAL SIGNIFICANCE
Third Party Suppliers	The Company is a non-asset based provider of global logistics services. As a result, the Company depends on a variety of asset-based third party suppliers. The quality and profitability of the Company’s services depend upon effective selection, management and discipline of third party suppliers. Changes in the financial stability, operating capabilities and capacity of asset-based carriers and space allotment made available to the Company by asset-based carriers could affect the Company in unpredictable ways.
Foreign Operations	The majority of the Company’s revenues and operating income come from operations conducted outside the United States. To maintain a global service network, the Company may be required to operate in hostile locations and in dangerous situations. In addition, the Company operates in parts of the world where common business practices could constitute violations of the anti-corruption laws, rules, regulations and decrees of the United States, including the U.S. Foreign Corrupt Practices Act, and of all other countries in which the Company conducts business; as well as trade control laws, or laws, regulations and Executive Orders imposing embargoes and sanctions; and anti-boycott laws and regulations. Compliance with these laws, rules, regulations and decrees is dependent on the Company’s employees, subcontractors, agents, third party brokers and customers, whose individual actions could violate these laws, rules, regulations and decrees. Failure to comply could result in substantial penalties and additional expenses, damages to the Company’s reputation and restrictions on its ability to conduct business.
Economic Conditions	The global economy and capital and credit markets continue to experience high levels of uncertainty and volatility. Unfavorable changes in economic conditions may result in lower freight volumes and adversely affect the Company’s revenues. These conditions may adversely affect certain of the Company’s customers and third party suppliers. Were that to occur, the Company’s revenues and net earnings could also be adversely affected. Should customers’ ability to pay deteriorate, additional bad debts may be incurred. These unfavorable conditions can create situations where rate increases charged by carriers and other suppliers are implemented with little or no advanced notice. The Company often times cannot pass these rate increases on to its customers in the same time frame, if at all. As a result, the Company’s yields and margins can be negatively impacted.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
July 1-31, 2009	196	$	31.15	196	33,425,307
August 1-31, 2009	506,024		32.41	506,024	33,610,819
September 1-30, 2009	538,294		32.87	538,294	32,474,666
Total	1,044,514	$	32.65	1,044,514	32,474,666

In November 1993, the Company’s Board of Directors authorized a Non-Discretionary Stock Repurchase Plan for the purpose of repurchasing the Company’s common stock in the open market with the proceeds received from the exercise of stock options. This plan was amended in February 2001 to increase the authorization to repurchase up to 20 million shares of the Company’s common stock. On February 9, 2009, the plan was further amended to increase the authorization to repurchase up to 40 million shares. This authorization has no expiration date. This plan was disclosed in the Company’s report on Form 10-K filed March 31, 1995. In the third quarter of 2009, 806,798 shares were repurchased under the Non-Discretionary Stock Repurchase Plan.

In November 2001, under a Discretionary Stock Repurchase Plan, the Company’s Board of Directors authorized the repurchase of such shares as may be necessary to reduce the issued and outstanding stock to 200 million shares of common stock. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. This authorization has no expiration date. This plan was announced on November 13, 2001. In the third quarter of 2009, 237,716 shares were repurchased under the Discretionary Stock Repurchase Plan. These discretionary repurchases were made to limit the growth in number of issued and outstanding shares resulting from stock option exercises.

Item 5. Other Information

(a) None.

(b) None.

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Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K.

Exhibit Number	Description
Exhibit 31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32	Certification pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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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 9, 2009	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and Chief Executive Officer
November 9, 2009	/s/ BRADLEY S. POWELL
	Bradley S. Powell, Chief Financial Officer

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Form 10-Q Index and Exhibits

September 30, 2009

Exhibit Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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