Expeditors International of Washington, Inc. (NYSE:EXPD) today announced fourth quarter 2023 financial results including the following highlights compared to the same quarter of 2022:

Diluted Net Earnings Attributable to Shareholders per share (EPS¹) decreased 21% to $1.09
Net Earnings Attributable to Shareholders decreased 28% to $159 million
Operating Income decreased 40% to $199 million
Revenues decreased 34% to $2.3 billion
Airfreight tonnage volume decreased 3% and ocean container volume decreased 10%

"While ocean and air markets have been recovering from the massive disruptions brought on by the global Covid-19 pandemic, we continue to face further market uncertainty due to the current conflicts in the Middle East and on the Red Sea," said Jeffrey S. Musser, President and Chief Executive Officer. "Further, volumes and capacity have remained uncertain due to additional capacity recently brought into the marketplace, while shippers have cautiously sought to avoid overextending their inventory levels. These factors created an environment where rates, which had fallen fairly significantly from the pandemic period, stabilized in ocean and, in the case of air, increased in the fourth quarter of 2023. If I had to use one key word to describe the fourth quarter and all of 2023, it would be ‘uncertainty.'

"As a company we have continued to remain focused on bringing expenses in line with revenue, as shown by headcount reductions. Compensation remains our second largest expenditure behind freight costs and is the area where we know we can have the largest impact from the standpoint of controlling expenses. We also know that there is more work that we can and will do to control expenses moving forward.

"We should again caution that our business is service-based, and we rely on highly skilled individuals to support our customers. History tells us that global trade operates in cycles and that we have periods when global volumes decline, as well as periods when global volumes grow. We've seen a year of declines in 2023, but we need to work hard to ensure that we have the right level of staffing to handle market increases and our expected growth in market share as we move forward. Managing expenses is an important role of any leadership team, but cutting expenses is only one part of effective management. Equally important is the expectation that management will grow the business. We remain committed to both."

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, "Despite reducing headcount in each quarter of 2023 and bringing costs down both sequentially and year-over-year, expenses are still high when compared to our efficiency target and we are working to bring expenses down further. Even though compensation, our largest and most variable expense, is 20% lower than the same quarter a year ago, just about everything else is more expensive. We are not as efficient as we need to be for the current environment of excess capacity, weak demand, soft rates, and economic uncertainty. We continue to be focused on further aligning headcount and overhead expenses with lower levels of transactions and volumes. At the same time, we recognize the need to be prepared when tonnage and volumes eventually begin to trend upward in a rate environment that is less volatile."

Mr. Powell noted that the Company generated $1.1 billion in cash flow from operations in 2023 and returned $1.6 billion to shareholders in share repurchases and dividends.

Expeditors is a global logistics company headquartered in Seattle, Washington. The Company employs trained professionals in 176 district offices and numerous branch locations located on six continents linked into a seamless worldwide network through an integrated information management system. Services include the consolidation or forwarding of air and ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing and distribution and customized logistics solutions.

_______________________

¹Diluted earnings attributable to shareholders per share.

NOTE: See Disclaimer on Forward-Looking Statements in this release.

Disclaimer on Forward-Looking Statements:

Certain statements contained in this news release are "forward-looking statements," based on management's views with respect to future events and underlying assumptions that involve risks and uncertainties. These forward-looking statements include statements regarding uncertainty in the ocean and air markets, including uncertainty due to conflicts in the Middle East and Red Sea; new capacity in the marketplace; cautious shipper demand and variable rate stability. Future financial performance could differ materially because of factors such as: our ability to reduce headcount and to control expenses and bring them in line with revenue; that volumes and tonnage will increase and that we will be able to grow in market share; that management is able to grow the business; that we are able to improve our efficiency; our ability to leverage the strength of our carrier relationships; the strength of our non-asset-based operating model; and our ability to remain a strong, healthy, unified and resilient organization. The normalizing of the supply chain at the end of the pandemic, along with the current uncertainty in the global economy, could have the effect of heightening many of the other risks described in Item 1A of our Annual Report on Form 10-K, including, without limitation, those related to the success of our strategy and desire to maintain historical unitary profitability, our ability to attract and retain customers, our ability to manage costs, interruptions to our information technology systems, the ability of third-party providers to perform and potential litigation as updated by our reports on Form 10-Q, filed with the Securities and Exchange Commission. These and other factors are discussed in the Company's regulatory filings with the Securities and Exchange Commission, including those in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Company's most recent Form 10-Q. The forward-looking statements contained in this news release speak only as of this date and the Company does not assume any obligation to update them except as required by law.


Expeditors International of Washington, Inc. Fourth quarter 2023 Earnings Release, February 20, 2024 Financial Highlights for the three and twelve months ended December 31, 2023 and 2022 (Unaudited) (in 000's of US dollars except share data)

	Three months ended December 31,					Twelve months ended December 31,
	2023		2022		% Change	2023		2022		% Change
Revenues	$	2,277,768	$	3,441,528	(34)%	$	9,300,110	$	17,071,284	(46)%
Directly related cost of transportation and other expenses ¹	$	1,513,604	$	2,425,565	(38)%	$	6,054,000	$	12,576,897	(52)%
Salaries and other operating expenses ²	$	564,766	$	686,257	(18)%	$	2,306,177	$	2,670,016	(14)%
Operating income	$	199,398	$	329,706	(40)%	$	939,933	$	1,824,371	(48)%
Net earnings attributable to shareholders	$	158,719	$	219,276	(28)%	$	752,883	$	1,357,399	(45)%
Diluted earnings attributable to shareholders per share	$	1.09	$	1.38	(21)%	$	5.01	$	8.26	(39)%
Basic earnings attributable to shareholders per share	$	1.09	$	1.39	(22)%	$	5.05	$	8.33	(39)%
Diluted weighted average shares outstanding		145,891		158,535			150,186		164,427
Basic weighted average shares outstanding		144,979		157,269			149,141		163,010
________________ ¹Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.
²Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.

During the three and twelve months ended December 31, 2023, we repurchased 1.6 million and 12.1 million shares of common stock at an average price of $119.22 and $114.68 per share, respectively. During the three and twelve months ended December 31, 2022, we repurchased 5.0 million and 14.5 million shares of common stock at an average price of $112.76 and $108.88 per share, respectively. On February 19, 2024 the Board of Directors amended the Discretionary Stock Repurchase Plan to further authorize share repurchases down to 130 million shares of common stock. This authorization has no expiration date. In addition, during 2023 and 2022, we paid cash dividends of $1.38 and $1.34 per share, respectively.

	Employee Full-time Equivalents as of December 31,
	2023		2022
North America		6,864		7,778
Europe		3,791		4,228
North Asia		2,260		2,448
South Asia		1,693		1,851
Middle East, Africa and India		1,428		1,540
Latin America		750		859
Information Systems		1,259		1,173
Corporate		407		425
Total		18,452		20,302

	Fourth quarter year-over-year percentage (decrease) increase in:
	Airfreight kilos	Ocean freight FEU
2023
October	(6)%	(12)%
November	(6)%	(10)%
December	3%	(7)%
Quarter	(3)%	(10)%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on February 23, 2024 will be considered in management's 8-K "Responses to Selected Questions."


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

	December 31, 2023			December 31, 2022
Assets:
Current Assets:
Cash and cash equivalents	$	1,512,883		$	2,034,131
Accounts receivable, less allowance for credit loss of $6,550 and $9,466 at December 31, 2023 and 2022, respectively		1,532,599			2,107,645
Deferred contract costs		218,807			257,545
Other		170,907			118,696
Total current assets		3,435,196			4,518,017
Property and equipment, net		479,225			501,916
Operating lease right-of-use assets		516,280			507,503
Goodwill		7,927			7,927
Deferred federal and state income taxes, net		63,690			37,449
Other assets, net		21,491			17,622
Total assets	$	4,523,809		$	5,590,434
Liabilities:
Current Liabilities:
Accounts payable	$	860,856		$	1,108,996
Accrued expenses, primarily salaries and related costs		447,336			479,262
Contract liabilities		280,909			323,101
Current portion of operating lease liabilities		99,749			95,621
Federal, state and foreign income taxes		15,562			47,075
Total current liabilities		1,704,412			2,054,055
Noncurrent portion of operating lease liabilities		427,984			422,844
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued		—			—
Common stock, par value $0.01 per share. Issued and outstanding: 143,866 shares and 154,313 shares at December 31, 2023 and 2022, respectively		1,439			1,543
Additional paid-in capital		—			139
Retained earnings		2,580,968			3,310,892
Accumulated other comprehensive loss		(192,057	)		(202,553	)
Total shareholders' equity		2,390,350			3,110,021
Noncontrolling interest		1,063			3,514
Total equity		2,391,413			3,113,535
Total liabilities and equity	$	4,523,809		$	5,590,434

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited)

	Three months ended December 31,						Twelve months ended December 31,
	2023			2022			2023			2022
Revenues:
Airfreight services	$	866,122		$	1,204,810		$	3,246,527		$	5,886,886
Ocean freight and ocean services		511,854			1,124,088			2,363,243			6,544,559
Customs brokerage and other services		899,792			1,112,630			3,690,340			4,639,839
Total revenues		2,277,768			3,441,528			9,300,110			17,071,284
Operating Expenses:
Airfreight services		639,725			899,865			2,347,293			4,359,726
Ocean freight and ocean services		357,788			842,103			1,634,947			5,188,066
Customs brokerage and other services		516,091			683,597			2,071,760			3,029,105
Salaries and related		409,605			509,884			1,700,516			2,056,387
Rent and occupancy		58,134			54,291			232,358			209,532
Depreciation and amortization		21,386			14,922			67,760			57,338
Selling and promotion		9,066			8,119			27,913			24,293
Other		66,575			99,041			277,630			322,466
Total operating expenses		2,078,370			3,111,822			8,360,177			15,246,913
Operating income		199,398			329,706			939,933			1,824,371
Other Income (Expense):
Interest income		16,728			13,107			70,451			25,554
Interest expense		(159	)		(22,245	)		(4,800	)		(23,277	)
Other, net		409			480			9,444			9,243
Other income (expense), net		16,978			(8,658	)		75,095			11,520
Earnings before income taxes		216,376			321,048			1,015,028			1,835,891
Income tax expense		57,231			106,311			263,249			475,286
Net earnings		159,145			214,737			751,779			1,360,605
Less net earnings (losses) attributable to the noncontrolling interest		426			(4,539	)		(1,104	)		3,206
Net earnings attributable to shareholders	$	158,719		$	219,276		$	752,883		$	1,357,399
Diluted earnings attributable to shareholders per share	$	1.09		$	1.38		$	5.01		$	8.26
Basic earnings attributable to shareholders per share	$	1.09		$	1.39		$	5.05		$	8.33
Weighted average diluted shares outstanding		145,891			158,535			150,186			164,427
Weighted average basic shares outstanding		144,979			157,269			149,141			163,010

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

	Three months ended December 31,						Twelve months ended December 31,
	2023			2022			2023			2022
Operating Activities:

Net earnings	$	159,145		$	214,737		$	751,779		$	1,360,605
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		1,627			1,133			3,943			11,050
Deferred income tax benefit		(14,974	)		(18,312	)		(22,916	)		(33,240	)
Stock compensation expense		11,437			13,101			58,399			64,397
Depreciation and amortization		21,386			14,922			67,760			57,338
Other, net		2,065			1,108			8,461			1,252
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(55,481	)		711,977			573,724			1,592,341
Increase (decrease) in accounts payable and accrued expenses		11,645			(454,221	)		(300,345	)		(798,123	)
Decrease in deferred contract costs		8,082			277,805			36,952			714,960
Decrease in contract liabilities		(6,527	)		(309,530	)		(40,076	)		(798,356	)
Increase (decrease) in income taxes payable, net		20,445			23,439			(77,298	)		(55,129	)
(Increase) decrease in other, net		(497	)		10,540			(7,192	)		12,580
Net cash from operating activities		158,353			486,699			1,053,191			2,129,675
Investing Activities:
Purchase of property and equipment		(10,714	)		(18,326	)		(39,314	)		(86,824	)
Other, net		90			(245	)		(119	)		(890	)
Net cash from investing activities		(10,624	)		(18,571	)		(39,433	)		(87,714	)
Financing Activities:
Payments on borrowing on lines of credit		(4,507	)		(688	)		(38,143	)		(30,289	)
Proceeds from borrowing on lines of credit		5,246			25,211			32,199			81,756
Proceeds from issuance of common stock		4,584			7,662			84,889			80,980
Repurchases of common stock		(193,592	)		(563,802	)		(1,392,886	)		(1,581,908	)
Dividends Paid		(99,766	)		(103,971	)		(202,029	)		(213,799	)
Payments for taxes related to net share settlement of equity awards		(5	)		(2	)		(19,506	)		(19,335	)
Distributions to noncontrolling interest		(1,089	)		(1,402	)		(1,089	)		(1,945	)
Net cash from financing activities		(289,129	)		(636,992	)		(1,536,565	)		(1,684,540	)
Effect of exchange rate changes on cash and cash equivalents		14,855			48,461			1,559			(51,982	)
Change in cash and cash equivalents		(126,545	)		(120,403	)		(521,248	)		305,439
Cash and cash equivalents at beginning of period		1,639,428			2,154,534			2,034,131			1,728,692
Cash and cash equivalents at end of period	$	1,512,883		$	2,034,131		$	1,512,883		$	2,034,131
Taxes Paid:
Income taxes	$	50,321		$	100,822		$	356,380		$	566,533

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

	UNITED STATES			OTHER NORTH AMERICA			LATIN AMERICA			NORTH ASIA			SOUTH ASIA			EUROPE			MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the three months ended December 31, 2023:
Revenues	$	775,382			109,933			45,350			573,020			234,260			422,340			118,670		(1,187	)		2,277,768
Directly related cost of transportation and other expenses¹	$	422,015			68,096			27,237			461,029			175,214			276,161			84,391		(539	)		1,513,604
Salaries and other operating expenses²	$	252,715			34,345			17,423			67,098			42,786			120,331			30,707		(639	)		564,766
Operating income (loss)	$	100,652			7,492			690			44,893			16,260			25,848			3,572		(9	)		199,398
Identifiable assets at period end	$	2,595,576			174,509			109,380			449,529			237,470			721,259			256,199		(20,113	)		4,523,809
Capital expenditures	$	8,016			315			82			424			227			1,142			508		—			10,714
Depreciation and amortization	$	15,401			475			281			1,106			460			2,876			787		—			21,386
Equity	$	1,774,874			19,222			54,581			158,329			103,573			167,141			154,038		(40,345	)		2,391,413
For the three months ended December 31, 2022:
Revenues	$	1,118,262			127,442			65,821			969,266			367,679			599,947			194,342		(1,231	)		3,441,528
Directly related cost of transportation and other expenses¹	$	639,804			80,052			41,480			799,583			288,014			432,835			144,377		(580	)		2,425,565
Salaries and other operating expenses²	$	(18,767	)		101,864			29,523			178,038			117,024			239,627			39,588		(640	)		686,257
Operating income³	$	497,225			(54,474	)		(5,182	)		(8,355	)		(37,359	)		(72,515	)		10,377		(11	)		329,706
Identifiable assets at period end	$	3,070,697			209,516			123,003			675,022			316,777			938,660			283,872		(27,113	)		5,590,434
Capital expenditures	$	11,262			282			232			1,098			391			4,525			536		—			18,326
Depreciation and amortization	$	9,433			454			280			1,069			472			2,527			687		—			14,922
Equity	$	2,246,417			31,132			56,416			274,703			136,944			263,278			145,269		(40,624	)		3,113,535

	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the twelve months ended December 31, 2023:
Revenues	$	3,311,327		436,331		197,344		2,180,808		865,261		1,808,624		505,194		(4,779	)		9,300,110
Directly related cost of transportation and other expenses¹	$	1,809,526		270,080		117,376		1,700,025		612,606		1,200,753		345,873		(2,239	)		6,054,000
Salaries and other operating expenses²	$	1,037,997		143,237		69,595		273,074		175,770		493,335		115,710		(2,541	)		2,306,177
Operating income	$	463,804		23,014		10,373		207,709		76,885		114,536		43,611		1			939,933
Identifiable assets at period end	$	2,595,576		174,509		109,380		449,529		237,470		721,259		256,199		(20,113	)		4,523,809
Capital expenditures	$	23,845		1,247		442		1,534		971		7,830		3,445		—			39,314
Depreciation and amortization	$	44,039		1,879		1,123		4,597		1,940		11,313		2,869		—			67,760
Equity	$	1,774,874		19,222		54,581		158,329		103,573		167,141		154,038		(40,345	)		2,391,413
For the twelve months ended December 31, 2022:
Revenues	$	4,869,364		517,662		257,721		5,810,088		2,144,034		2,471,456		1,005,489		(4,530	)		17,071,284
Directly related cost of transportation and other expenses¹	$	2,943,232		310,206		160,273		4,853,902		1,751,187		1,768,102		791,887		(1,892	)		12,576,897
Salaries and other operating expenses²	$	944,050		188,192		72,177		504,805		238,658		573,598		151,069		(2,533	)		2,670,016
Operating income	$	982,082		19,264		25,271		451,381		154,189		129,756		62,533		(105	)		1,824,371
Identifiable assets at period end	$	3,070,697		209,516		123,003		675,022		316,777		938,660		283,872		(27,113	)		5,590,434
Capital expenditures	$	56,411		2,954		937		2,976		1,543		17,868		4,135		—			86,824
Depreciation and amortization	$	35,461		1,892		1,123		4,682		1,966		9,640		2,574		—			57,338
Equity	$	2,246,417		31,132		56,416		274,703		136,944		263,278		145,269		(40,624	)		3,113,535
¹Directly related cost of transportation and other expenses totals Operating Expenses from Airfreight services, Ocean freight and ocean services and Customs brokerage and other services as shown in the Condensed Consolidated Statements of Earnings.
²Salaries and other operating expenses totals Salaries and related, Rent and occupancy, Depreciation and amortization, Selling and promotion and Other as shown in the Condensed Consolidated Statements of Earnings.
³In 2022, certain intercompany fees were billed to our subsidiaries in the 4^th quarter covering the entirety of 2022. This resulted in fourth quarter operating losses or reduced operating income for some of our business segments when compared to the current year where these amounts were billed monthly.

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Expeditors Reports Fourth Quarter 2023 EPS of $1.09