UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2005

o	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: 000-13468

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

Washington	91-1069248
(State or other jurisdiction of	(IRS Employer Identification Number)
incorporation or organization)

1015 Third Avenue, 12^th 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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ý No o

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

At November 1, 2005, the number of shares outstanding of the issuer’s Common Stock was 106,630,712.

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, 2005		December 31, 2004
Assets

Current assets:
Cash and cash equivalents	$	461,443	$	408,983
Short-term investments	96		109
Accounts receivable, less allowance for doubtful accounts of $12,347 at September 30, 2005 and $12,842 at December 31, 2004	714,112		614,044
Other current assets	15,440		22,724

Total current assets	1,191,091		1,045,860

Property and equipment, less accumulated depreciation and amortization of $155,336 at September 30, 2005 and $150,766 at December 31, 2004	319,362		287,379
Goodwill, less accumulated amortization of $765 at September 30, 2005 and December 31, 2004	7,774		7,774
Other intangibles, net	9,433		10,839
Other assets, net	14,213		12,201

	$	1,541,873	$	1,364,053

Liabilities and Shareholders’ Equity

Current liabilities:
Short-term debt	—		2,250
Accounts payable	479,298		410,251
Accrued expenses, primarily salaries and related costs	106,197		84,778
Deferred Federal and state income taxes	3,889		6,369
Federal, state and foreign income taxes	25,868		20,668

Total current liabilities	615,252		524,316

Deferred Federal and state income taxes	33,311		24,861

Minority interest	11,570		7,472

Shareholders’ equity:
Preferred stock, par value $.01 per share
Authorized 2,000,000 shares; none issued	—		—

Common stock, par value $.01 per share
Authorized 320,000,000 shares; issued and outstanding 106,704,124 shares at September 30, 2005, and 106,643,953 shares at December 31, 2004	1,067		1,066
Additional paid-in capital	12,121		44,678
Retained earnings	868,502		749,974
Accumulated other comprehensive income	50		11,686

Total shareholders’ equity	881,740		807,404

Commitments and contingencies

	$	1,541,873	$	1,364,053

See accompanying notes to condensed consolidated financial statements.

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,
	2005			2004			2005			2004

Revenues:
Airfreight	$	478,294		$	406,754		$	1,272,392		$	1,100,231
Ocean freight and ocean services	383,975			335,908			1,018,053			859,063
Customs brokerage and other services	184,173			154,526			509,160			423,410

Total revenues	1,046,442			897,188			2,799,605			2,382,704

Operating expenses:
Airfreight consolidation	377,758			315,694			992,465			844,075
Ocean freight consolidation	308,385			276,886			829,614			703,018
Customs brokerage and other services	78,374			64,250			214,258			170,534
Salaries and related costs	145,629			124,744			405,024			353,716
Rent and occupancy costs	13,993			12,711			41,198			38,077
Depreciation and amortization	7,840			6,806			22,782			19,558
Selling and promotion	7,059			6,769			21,725			20,388
Other	21,604			21,908			60,877			58,864

Total operating expenses	960,642			829,768			2,587,943			2,208,230

Operating income	85,800			67,420			211,662			174,474

Interest expense	(14		)	(6		)	(262		)	(34		)
Interest income	3,031			1,436			7,903			3,700
Other, net	1,355			524			3,425			2,325

Other income, net	4,372			1,954			11,066			5,991

Earnings before income taxes and minority interest	90,172			69,374			222,728			180,465
Income tax expense	32,343			24,688			80,129			64,220

Net earnings before minority interest	57,829			44,686			142,599			116,245

Minority interest	(2,060		)	(1,579		)	(4,442		)	(3,682		)

Net earnings	$	55,769		$	43,107		$	138,157		$	112,563

Diluted earnings per share	$	.50		$	.39		$	1.24		$	1.02

Basic earnings per share	$	.52		$	.41		$	1.29		$	1.07

Weighted average diluted shares outstanding	111,390,617			111,206,168			111,595,346			110,480,254

Weighted average basic shares outstanding	106,868,687			106,255,293			106,791,564			105,663,441

See accompanying notes to condensed consolidated financial statements.

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,
	2005			2004			2005			2004
Operating activities:
Net earnings	$	55,769		$	43,107		$	138,157		$	112,563
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for losses on accounts receivable	782			2,063			424			2,307
Deferred income tax expense	4,258			8,155			12,245			18,035
Tax benefits from employee stock plans	2,852			4,597			11,807			14,637
Depreciation and amortization	7,840			6,806			22,782			19,558
Gain on sale of property and equipment	(811		)	(18		)	(856		)	(66		)
Impairment write down of other assets	—			—			—			2,000
Other	775			860			1,068			2,408
Changes in operating assets and liabilities:
Increase in accounts receivable	(97,236		)	(72,797		)	(98,884		)	(147,409		)
Decrease (increase) in other current assets	9,015			(409		)	7,269			(8,974		)
Increase in minority interest	2,087			931			3,757			2,750
Increase in accounts payable and other current liabilities	67,580			40,041			97,805			124,690

Net cash provided by operating activities	52,911			33,336			195,574			142,499

Investing activities:
Decrease in short-term investments	25			7			13			8
Purchase of property and equipment	(22,967		)	(29,232		)	(66,159		)	(49,525		)
Proceeds from sale of property and equipment	1,082			153			1,331			440
Other	77			(1		)	(1,262		)	227

Net cash used in investing activities	(21,783		)	(29,073		)	(66,077		)	(48,850		)

Financing activities:
Borrowings (repayments) of short-term debt, net	37			3			(2,093		)	(210		)
Proceeds from issuance of common stock	21,153			14,949			32,228			26,440
Repurchases of common stock	(30,153		)	(14,984		)	(80,166		)	(26,768		)
Dividends paid	—			—			(16,055		)	(11,642		)

Net cash used in financing activities	(8,963		)	(32		)	(66,086		)	(12,180		)

Effect of exchange rate changes on cash	405			931			(10,951		)	320

Increase in cash and cash equivalents	22,570			5,162			52,460			81,789
Cash and cash equivalents at beginning of period	438,873			372,459			408,983			295,832
Cash and cash equivalents at end of period	$	461,443		$	377,621		$	461,443		$	377,621

Interest and taxes paid:
Interest	$	6		$	5		$	240		$	37
Income taxes	10,297			7,459			38,857			34,206

See accompanying notes to condensed consolidated financial statements.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Note 1. Summary of Significant Accounting Policies

The attached 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 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 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 or about March 16, 2005.

The Company applies APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for its stock option and its employee stock purchase rights plans. Accordingly, no compensation cost has been recognized for its fixed stock option or employee stock purchase rights plans. Had compensation cost for the Company’s three stock-based compensation and employee stock purchase rights plans been determined consistent with SFAS No. 123, the Company’s net earnings, basic earnings per share and diluted earnings per share would have been reduced to the pro forma amounts indicated below:

	Three months ended September 30,					Nine months ended September 30,
(in thousands, except share data)	2005			2004		2005		2004
Net earnings — as reported	$	55,769		43,107		138,157		112,563
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(6,629		)	(6,584	)	(22,142	)	(20,483	)
Net earnings — pro forma	$	49,140		36,523		116,015		92,080

Basic earnings per share — as reported	$	.52		.41		1.29		1.07
Basic earnings per share — pro forma	$	.46		.34		1.09		.87

Diluted earnings per share — as reported	$	.50		.39		1.24		1.02
Diluted earnings per share — pro forma	$	.44		.33		1.05		.84

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R), which replaces SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123) and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options and employee stock purchase plans, to be recognized in the financial statements based on their fair values. The Company is required to adopt SFAS No. 123R in the first quarter of 2006. The Company is evaluating the requirements of SFAS No. 123R and expects the adoption of SFAS No. 123R will have a material impact on the consolidated results of operations, earnings per share and consolidated statement of cash flows.

Note 2. Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under generally accepted accounting principles in the United States, are excluded from net income. For the Company, these consist of foreign currency translation gains and losses and unrealized gains and losses on securities, net of related income tax effects.

The components of total comprehensive income for interim periods are presented in the following table:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2005			2004			2005			2004

Net earnings	$	55,769		$	43,107		$	138,157		$	112,563

Foreign currency translation adjustments net of tax of: $(17) and $(743) for the 3 months ended September 30, 2005 and 2004, and $6,235 and $(535) for the 9 months ended September 30, 2005 and 2004.	33			1,379			(11,578		)	994
Unrealized loss on securities net of tax of $4 and $14 for the 3 months ended September 30, 2005 and 2004 and $41 and $31 for the 9 months ended September 30, 2005 and 2004.	(6		)	(26		)	(57		)	(57		)

Total comprehensive income	$	55,796		$	44,460		$	126,522		$	113,500

Note 3. Business Segment Information

Statement of Financial Accounting Standards (SFAS) No. 131, “Disclosure about Segments of an Enterprise and Related Information” establishes standards for the way that public companies report selected information about segments in their financial statements.

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, 2005 and 2004 are as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	FAR EAST	EUROPE	AUSTRALIA/ NEW ZEALAND	LATIN AMERICA	MIDDLE EAST	ELIMI-NATIONS		CONSOLI-DATED
Three months ended September 30, 2005:

Revenues from unaffiliated customers	$	199,139	25,354	616,305	133,297	12,372	14,500	45,475	—		1,046,442
Transfers between geographic areas	25,313		1,547	3,511	6,368	1,492	1,999	2,173	(42,403	)	—

Total revenues	$	224,452	26,901	619,816	139,665	13,864	16,499	47,648	(42,403	)	1,046,442

Net revenues	$	115,242	12,036	84,226	44,837	7,559	7,095	10,930	—		281,925
Operating income	$	27,769	1,759	43,513	7,911	2,075	1,546	1,227	—		85,800
Identifiable assets at quarter end	$	705,474	55,849	372,276	304,809	25,636	26,573	43,848	7,408		1,541,873
Capital expenditures	$	20,333	204	767	913	135	330	285	—		22,967
Depreciation and amortization	$	3,875	377	1,192	1,529	191	312	364	—		7,840
Equity	$	947,826	21,590	279,783	90,077	16,783	9,798	20,635	(504,752	)	881,740

Three months ended September 30, 2004:

Revenues from unaffiliated customers	$	166,438	19,836	522,274	123,740	11,503	15,086	38,311	—		897,188
Transfers between geographic areas	19,254		1,267	3,000	4,778	1,366	1,569	1,753	(32,987	)	—

Total revenues	$	185,692	21,103	525,274	128,518	12,869	16,655	40,064	(32,987	)	897,188

Net revenues	$	96,495	11,215	68,925	41,288	6,636	5,673	10,126	—		240,358
Operating income	$	20,892	1,953	32,324	6,969	1,804	1,165	2,313	—		67,420
Identifiable assets at quarter end	$	660,037	43,787	251,407	265,921	21,517	19,004	35,973	9,716		1,307,362
Capital expenditures	$	23,516	354	3,570	854	165	480	293	—		29,232
Depreciation and amortization	$	3,383	307	1,084	1,290	173	195	374	—		6,806
Equity	$	827,659	16,548	180,835	75,683	13,769	5,010	16,112	(373,946	)	761,670

Nine months ended September 30, 2005:

Revenues from unaffiliated customers	$	549,915	68,968	1,578,092	394,040	35,857	43,165	129,568	—		2,799,605
Transfers between geographic areas	60,939		3,894	9,359	17,366	4,139	5,437	5,956	(107,090	)	—

Total revenues	$	610,854	72,862	1,587,451	411,406	39,996	48,602	135,524	(107,090	)	2,799,605

Net revenues	$	311,261	36,231	211,777	131,731	21,328	19,638	31,302	—		763,268
Operating income	$	68,805	7,050	101,341	20,689	5,365	3,987	4,425	—		211,662
Identifiable assets at period end	$	705,474	55,849	372,276	304,809	25,636	26,573	43,848	7,408		1,541,873
Capital expenditures	$	56,770	716	2,917	3,432	672	882	770	—		66,159
Depreciation and amortization	$	11,097	1,106	3,578	4,541	517	859	1,084	—		22,782
Equity	$	947,826	21,590	279,783	90,077	16,783	9,798	20,635	(504,752	)	881,740

Nine months ended September 30, 2004:

Revenues from unaffiliated customers	$	455,227	55,923	1,343,241	354,655	31,992	39,025	102,641	—		2,382,704
Transfers between geographic areas	50,536		3,014	8,187	13,098	3,799	4,668	4,595	(87,897	)	—

Total revenues	$	505,763	58,937	1,351,428	367,753	35,791	43,693	107,236	(87,897	)	2,382,704

Net revenues	$	266,206	31,180	188,474	118,332	18,275	15,569	27,041	—		665,077
Operating income	$	49,001	6,256	87,341	19,567	4,428	2,433	5,448	—		174,474
Identifiable assets at period end	$	660,037	43,787	251,407	265,921	21,517	19,004	35,973	9,716		1,307,362
Capital expenditures	$	31,013	1,405	8,211	5,175	741	1,205	1,775	—		49,525
Depreciation and amortization	$	10,054	876	2,877	3,737	474	530	1,010	—		19,558
Equity	$	827,659	16,548	180,835	75,683	13,769	5,010	16,112	(373,946	)	761,670

Note 4. 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 per share for the three months and nine months ended September 30, 2005 and 2004:

	Three months ended September 30,
(Amounts in thousands, except share and per share amounts)	Net Earnings		Weighted Average Shares	Earnings Per Share
2005

Basic earnings per share	$	55,769	106,868,687	$	.52
Effect of dilutive potential common shares	—		4,521,930	—

Diluted earnings per share	$	55,769	111,390,617	$	.50

2004

Basic earnings per share	$	43,107	106,255,293	$	.41
Effect of dilutive potential common shares	—		4,950,875	—

Diluted earnings per share	$	43,107	111,206,168	$	.39

	Nine months ended September 30,
(Amounts in thousands, except share and per share amounts)	Net Earnings		Weighted Average Shares	Earnings Per Share
2005

Basic earnings per share	$	138,157	106,791,564	$	1.29
Effect of dilutive potential common shares	—		4,803,782	—

Diluted earnings per share	$	138,157	111,595,346	$	1.24

2004

Basic earnings per share	$	112,563	105,663,441	$	1.07
Effect of dilutive potential common shares	—		4,816,813	—

Diluted earnings per share	$	112,563	110,480,254	$	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,
	2005	2004	2005	2004
Shares	250	—	250	64,000

Note 5. Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R), which replaces SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123) and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options and employee stock purchase plans to be recognized in the financial statements based on their fair values, beginning with the first interim or annual period of the Company’s first fiscal year beginning after June 15, 2005, with early adoption encouraged. In addition, SFAS No. 123R will cause unrecognized expense related to unvested options granted prior to the date of initial adoption to be recognized as a charge to results of operations over the remaining vesting period. The Company is required to adopt SFAS No. 123R in the first quarter of 2006, beginning January 1, 2006. Under SFAS No. 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition alternatives include the modified prospective and retrospective adoption methods. Under the modified retrospective methods, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The modified prospective method requires that compensation expense be recorded for all unvested stock options and share awards as of the beginning of the first quarter of adoption of SFAS No. 123R, while the modified retrospective methods would record compensation expense for all unvested stock options and share awards beginning with the first period restated. The Company is evaluating the requirements of SFAS No. 123R and expects the adoption of SFAS No. 123R will have a material impact on the consolidated results of operations, earnings per share and consolidated statement of cash flows. The Company has not determined the method of adoption or the effect of adopting SFAS No. 123R.

In December 2004, the FASB issued FASB Staff Position (FSP) No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004”, which provides guidance under SFAS No. 109, “Accounting for Income Taxes,” with respect to recording the potential impact of the repatriation provisions of the American Jobs Creation Act of 2004 (the Jobs Act) on enterprises’ income tax expense and deferred tax liability. The Jobs Act creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing an 85% dividends received deduction for certain dividends from controlled foreign corporations. FSP No. 109-2 states that an enterprise is allowed time beyond the financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying SFAS No. 109. The deduction is subject to a number of limitations and uncertainty remains as to how to interpret certain provisions in the Act. As such, the Company is not yet in a position to determine to what extent the Company will repatriate foreign earnings that have not yet been remitted to the U.S. and, as provided for in FSP No. 109-2, the Company has not adjusted its tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act. The Company will complete its evaluation and quantification in 2005. Since the Company has provided U.S. taxes on all unremitted foreign earnings, the repatriation of foreign earnings in accordance with the repatriation provisions of the Jobs Act would result in a reduction of the Company’s tax expense and deferred tax liability.

Note 6. Stock and Cash Dividends

On May 9, 2005, the Board of Directors declared a semi-annual cash dividend of $.15 per share payable on June 15, 2005 to shareholders of record as of June 1, 2005. The dividend of $16 million was paid on June 15, 2005.

On May 6, 2004, the Board of Directors declared a semi-annual cash dividend of $.11 per share payable on June 15, 2004 to shareholders of record as of June 1, 2004. The dividend of $12 million was paid on June 15, 2004.

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

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS UNDER 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 or about March 16, 2005.

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 ocean vessels.

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 affects 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 in the nations in which it does business.

The Company derives its revenues from three principal sources: airfreight, ocean freight and 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. Net revenue expressed as a percentage of the sell rate is referred to as the 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 carriers, 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. Changes in space allotments available from carriers, governmental 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.

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.

As further discussed under liquidity and capital resources, total capital expenditures in 2005 are expected to exceed $80 million.

In terms of the opportunities, challenges and risks that management is focused on in 2005, the Company operates in 57 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 to providing superior customer service;

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

• Ongoing development of key employees;

• 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. While base salaries are well below industry standards, incentive compensation is a fixed percentage of operating profits. 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 Policies and Estimates

Management believes that the nature of the Company’s business is such that there are few, if any, 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; and

• accrual of tax expense on an interim basis.

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.

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, 2005 and 2004, 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.

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,
	2005					2004					2005					2004
	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	$	100,536		36	%	$	91,060		38	%	$	279,927		37	%	$	256,156		39	%
Ocean freight and ocean services	75,590			27		59,022			24		188,439			25		156,045			23
Customs brokerage and other services	105,799			37		90,276			38		294,902			38		252,876			38

Net revenues	281,925			100		240,358			100		763,268			100		665,077			100

Operating expenses:
Salaries and related costs	145,629			52		124,744			52		405,024			53		353,716			53
Other	50,496			18		48,194			20		146,582			19		136,887			21

Total operating expenses	196,125			70		172,938			72		551,606			72		490,603			74

Operating income	85,800			30		67,420			28		211,662			28		174,474			26
Other income, net	4,372			2		1,954			1		11,066			1		5,991			1

Earnings before income taxes and minority interest	90,172			32		69,374			29		222,728			29		180,465			27
Income tax expense	32,343			11		24,688			10		80,129			10		64,220			10

Net earnings before minority interest	57,829			21		44,686			19		142,599			19		116,245			17
Minority interest	(2,060		)	(1	)	(1,579		)	(1	)	(4,442		)	(1	)	(3,682		)	—

Net earnings	$	55,769		20	%	$	43,107		18	%	$	138,157		18	%	$	112,563		17	%

Airfreight net revenues increased 10% and 9% for the three and nine-month periods ended September 30, 2005, respectively, as compared with the same periods for 2004. These increases are primarily the result of increases in airfreight tonnage of 7% and 6% for the three and nine-month periods ended September 30, 2005, respectively, as compared with the same periods for 2004. The Company’s Far East airfreight net revenues for the three and nine-month periods ended September 30, 2005, increased 16% and 7%, respectively, compared with the same periods in 2004. North American 2005 airfreight net revenues increased 3% and 10%, respectively, for the three and nine-month periods ended September 30, 2005.

Ocean freight volumes, measured in terms of forty-foot container equivalent units (FEUs), increased 16% and 20% for the three and nine-month periods ended September 30, 2005, respectively, as compared with the same periods for 2004, while ocean freight and ocean services net revenues increased 28% and 21%, respectively, during the same periods. The difference in these two growth rates is a result of an increase in ocean freight yields of 212 basis points and 35 basis points, respectively, for the three and nine-month periods ended September 30, 2005.

The Company continued its focus of offering competitive rates to customers at the retail level, while leveraging freight volumes to obtain favorable rates from carriers at the wholesale level. These increased marketing efforts resulted in the Company’s

Far East ocean freight net revenues for the three and nine-month periods ended September 30, 2005, increasing 34% and 22%, respectively, compared with the same periods in 2004. North American ocean freight net revenues increased 31% and 24%, respectively, for the three and nine-month periods ended September 30, 2005.

Customs brokerage and other services net revenues increased 17% for both the three and nine-month periods ended September 30, 2005, as compared with the same periods for 2004 as a result of the Company’s continuing reputation for providing high quality service. Consolidation within the customs brokerage market has also contributed to this increase as customers seek out customs brokers with more sophisticated computerized capabilities critical to an overall logistics management program. In addition, increased emphasis on regulatory compliance continues to benefit the Company’s customs brokerage offerings.

Salaries and related costs increased 17% and 15% during the three and nine-month periods ended September 30, 2005, as compared with the same periods in 2004 as a result of (1) the Company’s increased hiring of sales, operations, and administrative personnel in existing and new offices to accommodate increases in business activity, and (2) increased compensation levels. Salaries and related costs as a percentage of net revenues remained the same for the three and nine-month periods ended September 30, 2005, respectively, as compared with the same periods in 2004. 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 compensation will occur in proportion to changes in Company profits. Management believes that the growth in revenues, net revenues and net earnings for the three and nine-month periods ended September 30, 2005 are a result of the incentives inherent in the Company’s compensation program.

This trend may not continue in future years with the adoption of SFAS 123R, which requires the expensing of the fair value of employee stock options, effective in the first quarter of 2006. When SFAS No. 123R becomes effective, a significant non-cash fixed compensation expense will be added to salaries and related costs. The inclusion of this fixed expense will increase salaries and related costs as a percentage of net revenue above historical levels.

Other operating expenses increased 5% and 7% for the three and nine-month periods ended September 30, 2005, as compared with the same periods in 2004 as rent expense, communications expense, quality and training expenses, and other costs expanded to accommodate the Company’s growing operations. Other operating expenses as a percentage of net revenues decreased 2% for both the three and nine-month periods ended September 30, 2005, as compared with the same periods in 2004. Management believes that this was significant as it reflects the successful achievement of cost containment objectives initiated at the branch level. The ability to sustain these savings into future periods is contingent upon branch level management’s ability to adhere to these objectives.

Other income, net, increased 124% and 85% for the three and nine-month periods ended September 30, 2005, respectively, as compared with the same periods in 2004. Due to higher interest rates on higher average cash balances and short-term investments during the third quarter of 2005, interest income increased by $1,595 and $4,203 for the three and nine months ended September 30, 2005, respectively, as compared with the same periods for 2004. Net foreign currency losses in the third quarter of 2005 were $91 compared to net foreign currency losses of $96 in the third quarter of 2004. Net foreign currency gains were $580 for the nine months ended September 30, 2005, compared to net foreign currency gains of $93 for the same period in 2004.

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 rates during the three and nine-month periods ended September 30, 2005, of 35.87% and 35.98%, respectively, are comparable to the 35.59% rate for the three and nine months in the same periods in 2004. If the Company adopts a plan under Internal Revenue Code (IRC) 965 the Company’s 2005 tax rate will be lower than prior years. This lower tax rate will only affect 2005.

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. Recently, 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. 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 significant amount 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, 2005 and 2004 was insignificant. For the three and nine months ended September 30, 2005, the Company had an approximate $91 in foreign exchange losses and $580 in foreign exchange gains, respectively, on a net basis. For the same periods of 2004, respectively, the Company had an approximate $96 in foreign exchange losses and $93 in foreign exchange gains, respectively, on a net basis.

Sources of Growth

During the third quarter of 2005, the Company opened 4 full-service offices (*) and 2 satellite offices (+), as follows:

Europe		Far East
Aberdeen, Scotland*		Laem Chabang, Thailand+
		Ningbo, China*
		Surabaya, Indonesia*
		Johor Bahru, Malaysia*
		Da Nang, Vietnam+

Surabaya and Johor Bahru went from being satellites to full-service offices. All other openings were start-ups.

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, 2005 (which is the measure of any increase from the same period of 2004) and for the three and nine months ended September 30, 2004 (which measures growth over 2003).

	For the three months ended September 30,				For the nine months ended September 30,
	2005		2004		2005		2004
Net revenue	17	%	21	%	14	%	21	%
Operating income	27	%	36	%	21	%	36	%

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, 2005, was $53 million and $196 million, as compared with $33 million and $143 million for the same periods of 2004. The $20 million increase for the three months and the $53 million increase for the nine months ended September 30, 2005, is principally due to increased net earnings and a favorable swing in the timing of receipts and disbursements represented by the accounts receivable and accounts payable balances.

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 to the Bureau of Customs and Border Protection. 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 to 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, 2005, was $22 million and $66 million, as compared with $29 million and $49 million during the same periods of 2004. The largest use of cash in investing activities is cash paid for capital expenditures. As a non-asset based provider of integrated logistics services, the Company does not own any physical means of transportation (i.e., airplanes, ships, trucks, etc.). However, 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 2005, the Company made capital expenditures of $23 million as compared with $29 million for the same period in 2004. Capital expenditures in the third quarter of 2005 and 2004 related primarily to investments in property. The Company currently expects to spend approximately $30 million for non-real estate capital expenditures in 2005. Non-real estate capital expenditures include leasehold improvements, warehouse equipment, computer hardware and furniture and fixtures. Total capital expenditures in 2005 are expected to exceed $80 million. The Company expects to finance capital expenditures in 2005 with cash.

Cash used in financing activities during the three and nine months ended September 30, 2005 were $9 million and $66 million as compared with $.032 million and $12 million for the same periods in 2004. The Company uses the proceeds from stock option exercises to repurchase the Company’s stock on the open market. In 2005, the Company established a policy of repurchasing stock to prevent growth in issued and outstanding shares as a result of stock option exercises. The increase in cash used in financing activities during the three and nine months ended September 30, 2005 compared with the same periods in 2004 is primarily the result of this new policy.

At September 30, 2005, working capital was $576 million, including cash and short-term investments of $462 million. The Company had no long-term debt at September 30, 2005.

The Company maintains international and domestic unsecured bank lines of credit. At September 30, 2005, the U.S. facility totaled $50 million and international bank lines of credit totaled $10 million. In addition, the Company maintains a bank facility with its U.K. bank for $12 million. At September 30, 2005 the Company had no amounts outstanding on these lines of credit but was contingently liable for $55 million from standby letters of credit and guarantees related to these lines of credit and other obligations. The 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 were to be 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, 2005, cash and cash equivalent balances of $331 million were held by the Company’s non-U.S. subsidiaries, of which $37 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, 2005, would have had the effect of raising operating income approximately $16 million. An average 10% strengthening of the U.S. Dollar, for the same period, would have had the effect of reducing operating income approximately $13 million.

The Company has approximately $7 million of intercompany transactions unsettled at any one point in time. 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, 2005, was insignificant. The Company had no foreign currency derivatives outstanding at September 30, 2005 and 2004. The Company 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, 2005, the Company had cash and cash equivalents and short-term investments of $462 million, the vast majority of which is subject to variable short-term interest rates. The Company had no short-term borrowings at September 30, 2005. A hypothetical change in the interest rate of 10% would have no material impact on the Company’s earnings.

In management’s opinion, there has been no material change in the Company’s market risk exposure in the third quarter of 2005.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

As of September 30, 2005, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), an evaluation of the effectiveness of the Company’s disclosure controls and procedures was performed. Based on this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to ensure that material information is recorded, processed, summarized and reported by management of the Company on a timely basis in order to comply with the Company’s disclosure obligations under the Securities Exchange Act of 1934 and the SEC rules thereunder.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting that occurred 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.

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

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 orPrograms
July 1-31, 2005	494	$	52.51	494	8,081,629
August 1-31, 2005	—	$	—	—	8,219,209
September 1-30, 2005	548,134	$	54.96	548,134	7,456,974
Total	548,628	$	54.96	548,628	7,456,974

In November 1993, the Company’s Board of Directors authorized a Non-Discretionary Stock Repurchase Plan. This plan was amended in February 2001 to increase the authorization to repurchase up to 10 million shares of the Company’s common stock. 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 2005, 362,013 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 100,000,000 shares of common stock. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increase. This authorization has no expiration date. This plan was announced on November 13, 2001. In the third quarter of 2005, 186,615 shares were repurchased under the Discretionary Stock Repurchase Plan. These discretionary repurchases were made to keep the number of issued and outstanding shares from growing as a result of stock option exercises.

Item 5. Other Information

(a) Not applicable.

(b) Not applicable.

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

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 8, 2005	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and Chief Executive Officer
	(Principal Executive Officer)

November 8, 2005	/s/ R. JORDAN GATES
	R. Jordan Gates, Executive Vice President-Chief Financial Officer
	(Principal Financial and Accounting Officer)

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
AND SUBSIDIARIES

Form 10-Q Index and Exhibits

September 30, 2005

Exhibit Number		Description
31.1		Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certificate 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 theSarbanes-Oxley Act of 2002