Expeditors International of Washington, Inc. (NASDAQ:EXPD) today announced third quarter 2021 financial results including the following highlights compared to the same quarter of 2020:

Diluted Net Earnings Attributable to Shareholders per share (EPS¹) increased 87% to $2.09
Net Earnings Attributable to Shareholders increased 88% to $359 million
Operating Income increased 94% to $490 million
Revenues increased 84% to $4.3 billion
Airfreight tonnage volume and ocean container volume increased 28% and 15%, respectively

"In a marketplace that remains severely impacted by labor and infrastructure constraints throughout the supply chain, our people continue to perform at their best by identifying, accessing, and securing available space," said Jeffrey S. Musser, President and Chief Executive Officer. "There remains an overall deficiency of available air capacity due to a reduction of passenger belly space on international routes. Despite increased utilization of air charters, there is insufficient capacity to meet the current high demand. At the same time, unprecedented congestion at the ocean ports due to labor and equipment shortages is disrupting sailing schedules and causing significant delays. There is simply not enough equipment, warehouse and pier space, or people in the locations where they are needed to meaningfully reduce the significant backlogs of cargo. Handling record volumes under these conditions has not been easy, but we continue to set records for company performance by servicing our customers at the highest level.

"The entire global infrastructure for the movement of cargo remains stretched beyond its limits. While certain ocean ports are particularly constrained, most notably on the U.S. west coast, many of the current bottlenecks stem from supply and infrastructure issues that were building well before the pandemic. The global reaction to COVID-19, including lockdowns, facility closures and spikes in demand for certain products, exposed and exacerbated those long-simmering issues. Unfortunately, there is no simple or immediate fix. As a result, we believe these current conditions are likely to last well into 2022.

"We also believe, as we always have, that our company's best strategy for achieving ongoing success in servicing our customers and growing our business depends on our strong culture of close collaboration. As many of the most restrictive pandemic precautionary measures are being lifted around the world, we are carefully bringing our people back to on-site work in a measured and cautious manner. Our view is that the stresses of so many of our people working at such an accelerated pace from so many remote, off-site locations would be unsustainable over the long term."

Bradley S. Powell, Senior Vice President and Chief Financial Officer, added, "Our strong results continue to demonstrate our ability to adapt and perform exceptionally well on behalf of our customers under very trying conditions. Demand continues to far outstrip available capacity. Buy and sell rates for both air and ocean remain elevated and erratic. Despite those conditions, our operating efficiency is strong, even as each individual shipment requires more resources and greater attention, and conditions change rapidly. While we are performing exceptionally well under these trying circumstances, I continue to caution that we are unable to predict how long the current conditions will persist or the impact they will have on our future operations."

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.

Expeditors International of Washington, Inc. Third Quarter 2021 Earnings Release, November 2, 2021 Financial Highlights for the three and nine months ended September 30, 2021 and 2020 (Unaudited) (in 000's of US dollars except per share data)

	Three months ended September 30,					Nine months ended September 30,
	2021		2020		% Change	2021		2020		% Change
Revenues³	$	4,319,261	$	2,348,713	84%	$	11,127,174	$	6,603,558	69%
Directly related cost of transportation and other expenses^{1, 3}	$	3,185,490	$	1,614,334	97%	$	8,031,407	$	4,504,452	78%
Salaries and other operating expenses²	$	644,134	$	482,434	34%	$	1,809,970	$	1,440,480	26%
Operating income	$	489,637	$	251,945	94%	$	1,285,797	$	658,626	95%
Net earnings attributable to shareholders	$	359,068	$	191,307	88%	$	962,660	$	497,520	93%
Diluted earnings attributable to shareholders per share	$	2.09	$	1.12	87%	$	5.61	$	2.92	92%
Basic earnings attributable to shareholders per share	$	2.12	$	1.14	86%	$	5.68	$	2.96	92%
Diluted weighted average shares outstanding		171,565		170,735			171,549		170,539
Basic weighted average shares outstanding		169,633		168,310			169,398		167,942

_______________________
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.


³Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company's historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders' equity, other comprehensive income and cash flows. These errors do not affect any of the metrics used to calculate or evaluate management's compensation and had no impact on bonuses, commissions, share-based compensation or any other employee remuneration. Historical amounts have been revised and are presented on a comparable basis.

During the nine months ended September 30, 2021 and 2020, we repurchased 2.0 million and 4.4 million shares of common stock at an average price of $110.45 and $71.41 per share, respectively.

	Employee Full-time Equivalents as of September 30,
	2021		2020
North America		7,315		6,666
Europe		3,860		3,361
North Asia		2,440		2,406
South Asia		1,740		1,643
Middle East, Africa and India		1,507		1,509
Latin America		801		800
Information Systems		976		975
Corporate		395		383
Total		19,034		17,743

Disclaimer on Forward-Looking Statements:

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

	Third quarter year-over-year percentage increase in:
2021	Airfreight kilos	Ocean freight FEU
July	36%	18%
August	36%	21%
September	15%	7%
Quarter	28%	15%

Investors may submit written questions via e-mail to: investor@expeditors.com. Questions received by the end of business on November 5, 2021 will be considered in management's 8-K "Responses to Selected Questions."

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 the future stabilization of supply/demand imbalance and rate volatility; the continued unsettled operating environment due to continued scarce air and ocean capacity; elevated air and ocean pricing and an increase in demand for such services; port congestion; equipment imbalances; labor shortages; insufficient warehouse and pier space; trade disruptions; rising fuels costs; and the uneven lifting of the COVID-19 pandemic restrictions. Future financial performance could differ materially because of factors such as: our ability to leverage the strength of our carrier relationships to secure space; the strength of our non-asset-based operating model; our expectation that the supply/demand imbalance and rate volatility will continue for the remainder of 2021 and likely well into 2022, and will stabilize over time; our ability to re-open our offices for return-to-work; our ability to continue to enhance our productivity; our expectation that the current unprecedented operating conditions will not persist long-term; our ability to invest in our strategic efforts to explore new areas for profitable growth; and our ability to remain a strong, healthy, unified and resilient organization. The COVID-19 pandemic 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, 2020. 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. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) (Unaudited)

	September 30, 2021			December 31, 2020
Assets:
Current Assets:
Cash and cash equivalents	$	1,820,106		$	1,527,791
Accounts receivable, less allowance for credit loss of $7,285 at September 30, 2021 and $5,579 at December 31, 2020		3,330,398			1,998,055
Deferred contract costs		841,689			327,448
Other		119,346			110,250
Total current assets		6,111,539			3,963,544
Property and equipment, less accumulated depreciation and amortization of $533,450 at September 30, 2021 and $516,988 at December 31, 2020		491,577			506,425
Operating lease right-of-use assets		448,228			432,723
Goodwill		7,927			7,927
Other assets, net		17,112			16,884
Total assets	$	7,076,383		$	4,927,503
Liabilities:
Current Liabilities:
Accounts payable	$	1,806,977		$	1,136,859
Accrued liabilities, primarily salaries and related costs		342,151			257,021
Contract liabilities		977,660			379,722
Current portion of operating lease liabilities		81,362			74,004
Federal, state and foreign income taxes		67,332			45,437
Total current liabilities		3,275,482			1,893,043
Noncurrent portion of operating lease liabilities		374,658			364,185
Deferred federal and state income taxes, net		5,651			7,048
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued		—			—
Common stock, par value $0.01 per share. Issued and outstanding: 169,392 shares at September 30, 2021 and 169,294 shares at December 31, 2020		1,694			1,693
Additional paid-in capital		74,925			157,496
Retained earnings		3,463,539			2,600,201
Accumulated other comprehensive loss		(122,800	)		(99,753	)
Total shareholders' equity		3,417,358			2,659,637
Noncontrolling interest		3,234			3,590
Total equity		3,420,592			2,663,227
Total liabilities and equity	$	7,076,383		$	4,927,503

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

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Revenues:
Airfreight services	$	1,628,115	$	983,199	$	4,477,599	$	2,908,451
Ocean freight and ocean services		1,598,597		609,816		3,651,059		1,590,541
Customs brokerage and other services		1,092,549		755,698		2,998,516		2,104,566
Total revenues		4,319,261		2,348,713		11,127,174		6,603,558
Operating Expenses:
Airfreight services		1,244,381		723,340		3,335,253		2,122,205
Ocean freight and ocean services		1,254,334		452,028		2,859,020		1,177,696
Customs brokerage and other services		686,775		438,966		1,837,134		1,204,551
Salaries and related		519,611		373,613		1,452,902		1,110,760
Rent and occupancy		46,730		42,484		137,376		126,383
Depreciation and amortization		12,753		15,851		38,415		42,620
Selling and promotion		4,237		2,945		10,479		14,301
Other		60,803		47,541		170,798		146,416
Total operating expenses		3,829,624		2,096,768		9,841,377		5,944,932
Operating income		489,637		251,945		1,285,797		658,626
Other Income (Expense):
Interest income		2,462		1,504		6,596		8,870
Other, net		733		980		6,382		5,161
Other income, net		3,195		2,484		12,978		14,031
Earnings before income taxes		492,832		254,429		1,298,775		672,657
Income tax expense		132,922		62,710		333,941		173,968
Net earnings		359,910		191,719		964,834		498,689
Less net earnings attributable to the noncontrolling interest		842		412		2,174		1,169
Net earnings attributable to shareholders	$	359,068	$	191,307	$	962,660	$	497,520
Diluted earnings attributable to shareholders per share	$	2.09	$	1.12	$	5.61	$	2.92
Basic earnings attributable to shareholders per share	$	2.12	$	1.14	$	5.68	$	2.96
Weighted average diluted shares outstanding		171,565		170,735		171,549		170,539
Weighted average basic shares outstanding		169,633		168,310		169,398		167,942

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,
	2021			2020			2021			2020
Operating Activities:
Net earnings	$	359,910		$	191,719		$	964,834		$	498,689
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		3,739			398			6,028			4,607
Deferred income tax (benefit) expense		(7,658	)		(1,276	)		2,343			2,872
Stock compensation expense		15,204			12,297			57,298			45,091
Depreciation and amortization		12,753			15,851			38,415			42,620
Other, net		626			2,919			1,523			3,470
Changes in operating assets and liabilities:
Increase in accounts receivable		(714,300	)		(106,065	)		(1,377,997	)		(274,440	)
Increase in accounts payable and accrued liabilities		436,343			94,232			769,525			201,929
Increase in deferred contract costs		(328,932	)		(81,486	)		(550,572	)		(99,887	)
Increase in contract liabilities		381,192			91,638			635,286			112,244
Increase (decrease) in income taxes payable, net		33,378			(41,286	)		32,022			(10,644	)
Increase in other, net		(14,884	)		(17,373	)		(15,208	)		(13,242	)
Net cash from operating activities		177,371			161,568			563,497			513,309
Investing Activities:
Purchase of property and equipment		(9,870	)		(9,178	)		(24,800	)		(37,419	)
Other, net		(157	)		1,174			(53	)		963
Net cash from investing activities		(10,027	)		(8,004	)		(24,853	)		(36,456	)
Financing Activities:
Proceeds from borrowing on lines of credit, net		7,479			31			7,568			11
Proceeds from issuance of common stock		56,965			121,430			99,433			174,016
Repurchases of common stock		(76,595	)		—			(225,064	)		(314,225	)
Dividends paid		—			—			(98,387	)		(86,815	)
Payments for taxes related to net share settlement of equity awards		(4	)		—			(15,172	)		(10,566	)
Distribution to noncontrolling interest		(1,631	)		—			(1,631	)		—
Net cash from financing activities		(13,786	)		121,461			(233,253	)		(237,579	)
Effect of exchange rate changes on cash and cash equivalents		(7,573	)		10,030			(13,076	)		(4,255	)
Change in cash and cash equivalents		145,985			285,055			292,315			235,019
Cash and cash equivalents at beginning of period		1,674,121			1,180,455			1,527,791			1,230,491
Cash and cash equivalents at end of period	$	1,820,106		$	1,465,510		$	1,820,106		$	1,465,510
Taxes Paid:
Income taxes	$	104,617		$	106,434		$	295,153		$	180,242

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 September 30, 2021:
Revenues	$	1,134,096		116,404		54,303		1,690,381		538,780		564,810		221,777		(1,290	)		4,319,261
Directly related cost of transportation and other expenses¹	$	661,515		63,031		34,216		1,417,283		445,970		389,208		174,733		(466	)		3,185,490
Salaries and other operating expenses²	$	238,943		33,077		14,759		141,109		54,003		126,475		36,598		(830	)		644,134
Operating income	$	233,638		20,296		5,328		131,989		38,807		49,127		10,446		6			489,637
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383
Capital expenditures	$	6,001		248		175		435		351		2,254		406		—			9,870
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592
For the three months ended September 30, 2020:
Revenues³	$	686,243		77,414		39,193		795,155		259,069		359,107		133,447		(915	)		2,348,713
Directly related cost of transportation and other expenses^1,3	$	379,586		44,196		23,361		632,858		192,175		242,384		100,301		(527	)		1,614,334
Salaries and other operating expenses²	$	197,749		25,325		12,359		81,876		39,926		96,658		28,925		(384	)		482,434
Operating income	$	108,908		7,893		3,473		80,421		26,968		20,065		4,221		(4	)		251,945
Identifiable assets at period end	$	2,336,071		163,943		76,173		689,525		231,771		642,124		228,423		(9,476	)		4,358,554
Capital expenditures	$	4,703		483		180		1,075		665		1,780		292		—			9,178
Equity	$	1,791,658		77,915		31,324		246,557		97,564		185,352		110,714		(36,611	)		2,504,473


	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the nine months ended September 30, 2021:
Revenues³	$	3,007,053		311,986		146,148		4,208,811		1,306,264		1,576,092		574,469		(3,649	)		11,127,174
Directly related cost of transportation and other expenses^1,3	$	1,731,032		175,392		86,868		3,471,453		1,051,133		1,072,973		444,132		(1,576	)		8,031,407
Salaries and other operating expenses²	$	718,762		90,114		41,871		354,841		146,214		359,338		100,899		(2,069	)		1,809,970
Operating income	$	557,259		46,480		17,409		382,517		108,917		143,781		29,438		(4	)		1,285,797
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383
Capital expenditures	$	11,931		434		300		1,192		1,462		7,908		1,573		—			24,800
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592
For the nine months ended September 30, 2020:
Revenues³	$	1,975,874		232,324		114,637		2,277,027		642,302		1,024,127		340,000		(2,733	)		6,603,558
Directly related cost of transportation and other expenses^1,3	$	1,108,164		130,300		69,828		1,792,933		463,690		692,872		248,088		(1,423	)		4,504,452
Salaries and other operating expenses²	$	631,396		74,320		36,220		236,480		109,018		274,269		80,063		(1,286	)		1,440,480
Operating income	$	236,314		27,704		8,589		247,614		69,594		56,986		11,849		(24	)		658,626
Identifiable assets at period end	$	2,336,071		163,943		76,173		689,525		231,771		642,124		228,423		(9,476	)		4,358,554
Capital expenditures	$	28,276		1,692		498		1,785		1,035		3,418		715		—			37,419
Equity	$	1,791,658		77,915		31,324		246,557		97,564		185,352		110,714		(36,611	)		2,504,473

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.

³Beginning in the first quarter of 2019, the Company made changes to its process and presentation of freight services revenue and directly related transportation operating expenses with the objective that at each reporting level (reporting entity, segment and consolidated level) the gross revenue and associated directly related operating expenses be representative of the location where the services were performed, the operating expenses were incurred and where the revenues were earned. During the second quarter of 2021, management identified and corrected certain immaterial errors in the Company's historical financial statements primarily related to this process that was utilized through the first quarter of 2021. The process missed an intercompany elimination of revenues and an equal and offsetting amount of directly related transportation expenses, principally impacting airfreight services in North Asia. The errors overstated revenues and directly related transportation operating expenses by equal amounts in the consolidated statements of earnings. The errors had no impact on operating income, net earnings, and earnings per share nor any other financial statement amount. Further, the errors had no impact on the balance sheets, statements of shareholders' equity, other comprehensive income and cash flows. Historical amounts for business segment information have been revised and are presented on a comparable basis.

The Company's consolidated financial results in the three and nine months ended September 30, 2021 and 2020 were each significantly impacted by the effects of the global pandemic in divergent ways. In all quarters of 2021, the Company experienced strong volumes and high average sell and buy rates as a result of imbalances between demand and carrier capacity and continuing effects of disruptions in supply chains originating in measures to combat the pandemic in 2020.

This is in contrast with slower activity in North Asia in the first quarter of 2020 as the pandemic resulted in temporary closures and limited operations in the Company's China offices. Shipments were also rerouted or delayed by customers and service providers as they were taking their own precautionary measures. This was followed by significant increases in airfreight services revenues and related expenses, in the second and third quarters of 2020, as a result of demand for time-sensitive delivery of technology equipment and medical equipment and supplies from China, which combined with reductions in airfreight supply resulted in significantly higher average buy and sell rates.

These impacts are affecting all of the Company's geographical segments and most notably the year-over-year comparability of the North Asia segment. For the three months ended September 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 32% and 27%, respectively, of the Company's total revenues and 21% and 26%, respectively, of the total operating income. For the nine months ended September 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 30% and 28%, respectively, of the Company's total revenues and 23% and 30%, respectively, of the total operating income.

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Expeditors Reports Third Quarter 2021 EPS of $2.09