10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

(Mark One)

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

For the quarterly period ended June 30, 2012

OR

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

For the transition period from             to             

Commission File Number: 0-13468

___________________________________________

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

(Exact name of registrant as specified in its charter)

___________________________________________

Washington	91-1069248
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
1015 Third Avenue, 12thFloor, Seattle, Washington	98104
(Address of principal executive offices)	(Zip Code)

(206) 674-3400

(Registrant’s telephone number, including area code)

______________________________________________________

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

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

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

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

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

At August 3, 2012, the number of shares outstanding of the issuer’s Common Stock was 210,542,529.

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)

	June 30, 2012			December 31, 2011
Current Assets:
Cash and cash equivalents	$	1,364,247		$	1,294,356
Short-term investments	376			472
Accounts receivable, less allowance for doubtful accounts of $8,731 at June 30, 2012 and $10,381 at December 31, 2011	983,131			934,752
Deferred Federal and state income taxes	10,234			10,415
Other	47,409			46,888
Total current assets	2,405,397			2,286,883
Property and equipment, less accumulated depreciation and amortization of $309,467 at June 30, 2012 and $296,481 at December 31, 2011	546,754			538,806
Goodwill and other intangibles, net	10,003			10,557
Other assets, net	30,218			30,581
Total assets	$	2,992,372		$	2,866,827
Current Liabilities:
Accounts payable	672,836			606,628
Accrued expenses, primarily salaries and related costs	184,114			169,445
Federal, state and foreign income taxes	25,948			20,072
Total current liabilities	882,898			796,145
Deferred Federal and state income taxes	59,417			60,613
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued	—			—
Common stock, par value $.01 per share. Issued and outstanding 210,503,675 shares at June 30, 2012 and 212,003,662 shares at December 31, 2011	2,105			2,120
Additional paid-in capital	1,013			13,260
Retained earnings	2,044,682			1,991,222
Accumulated other comprehensive loss	(4,345		)	(2,964		)
Total shareholders’ equity	2,043,455			2,003,638
Noncontrolling interest	6,602			6,431
Total equity	2,050,057			2,010,069
Total liabilities and equity	$	2,992,372		$	2,866,827

See accompanying notes to condensed consolidated financial statements.

2

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Earnings

(In thousands, except share data)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2012			2011			2012			2011
Revenues:
Airfreight services	$	638,541		$	749,861		$	1,277,453		$	1,450,784
Ocean freight and ocean services	518,998			486,831			953,334			926,972
Customs brokerage and other services	347,413			344,676			685,535			664,460
Total revenues	1,504,952			1,581,368			2,916,322			3,042,216
Operating Expenses:
Airfreight consolidation	484,311			576,280			965,354			1,100,916
Ocean freight consolidation	413,447			377,805			745,401			717,354
Customs brokerage and other services	153,543			154,722			305,345			297,470
Salaries and related costs	249,925			249,114			496,057			486,929
Rent and occupancy costs	20,853			21,354			42,029			42,735
Depreciation and amortization	9,670			9,257			19,215			18,431
Selling and promotion	8,860			10,022			17,523			19,185
Other	31,940			30,539			67,724			59,691
Total operating expenses	1,372,549			1,429,093			2,658,648			2,742,711
Operating income	132,403			152,275			257,674			299,505
Other Income (Expense):
Interest income	3,050			2,312			6,410			4,632
Interest expense	(222		)	(229		)	(842		)	(443		)
Other, net	3,682			857			4,779			1,974
Other income, net	6,510			2,940			10,347			6,163
Earnings before income taxes	138,913			155,215			268,021			305,668
Income tax expense	54,892			60,195			107,278			119,441
Net earnings	84,021			95,020			160,743			186,227
Less net earnings (losses) attributable to the noncontrolling interest	66			20			81			(5		)
Net earnings attributable to shareholders	$	83,955		$	95,000		$	160,662		$	186,232
Diluted earnings attributable to shareholders per share	$	.39		$	.44		$	.75		$	.86
Basic earnings attributable to shareholders per share	$	.40		$	.45		$	.76		$	.88
Dividends declared and paid per common share	$	.28		$	.25		$	.28		$	.25
Weighted average diluted shares outstanding	213,212,912			215,659,043			213,683,587			215,780,230
Weighted average basic shares outstanding	211,724,082			212,136,164			211,910,872			212,112,643

See accompanying notes to condensed consolidated financial statements.

3

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2012			2011			2012			2011
Net earnings	$	84,021		$	95,020		$	160,743		$	186,227
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $6,257 and $3,014 for the three months ended June 30, 2012 and 2011, and $758 and $7,855 for the six months ended June 30, 2012 and 2011	(11,453		)	5,372			(1,291		)	14,193
Other comprehensive income (loss)	(11,453		)	5,372			(1,291		)	14,193
Comprehensive income	72,568			100,392			159,452			200,420
Less comprehensive income (loss) attributable to the noncontrolling interest	22			(109		)	171			(146		)
Comprehensive income attributable to shareholders	$	72,546		$	100,501		$	159,281		$	200,566

See accompanying notes to condensed consolidated financial statements.

4

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2012			2011			2012			2011
Operating Activities:
Net earnings	$	84,021		$	95,020		$	160,743		$	186,227
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses on accounts receivable	(388		)	(63		)	(855		)	1,790
Deferred income tax (benefit) expense	(5,739		)	1,601			(258		)	(335		)
Excess tax benefits from stock plans	(806		)	(2,285		)	(4,232		)	(4,531		)
Stock compensation expense	10,926			10,236			21,526			20,708
Depreciation and amortization	9,670			9,257			19,215			18,431
Gain on sale of assets	(65		)	(21		)	(130		)	(51		)
Other	271			311			553			618
Changes in operating assets and liabilities:
Increase in accounts receivable	(63,260		)	(14,173		)	(50,292		)	(7,490		)
Decrease in other current assets	1,642			3,896			3,566			2,481
Increase in accounts payable and accrued expenses	70,674			7,943			84,233			38,130
(Decrease) increase in income taxes payable, net	(14,132		)	(33,665		)	6,142			(88		)
Net cash from operating activities	92,814			78,057			240,211			255,890
Investing Activities:
Decrease (increase) in short-term investments, net	15,878			(449		)	98			(538		)
Purchase of property and equipment	(9,814		)	(17,110		)	(26,902		)	(38,235		)
Proceeds from sale of property and equipment	141			42			253			85
Other	(232		)	(64		)	126			(1,506		)
Net cash from investing activities	5,973			(17,581		)	(26,425		)	(40,194		)
Financing Activities:
Proceeds from issuance of common stock	7,482			15,821			20,402			23,625
Repurchases of common stock	(84,401		)	(45,690		)	(106,266		)	(65,274		)
Excess tax benefits from stock plans	806			2,285			4,232			4,531
Dividends paid	(59,358		)	(53,014		)	(59,358		)	(53,014		)
Net cash from financing activities	(135,471		)	(80,598		)	(140,990		)	(90,132		)
Effect of exchange rate changes on cash and cash equivalents	(11,984		)	7,481			(2,905		)	15,801
(Decrease) increase in cash and cash equivalents	(48,668		)	(12,641		)	69,891			141,365
Cash and cash equivalents at beginning of period	1,412,915			1,238,471			1,294,356			1,084,465
Cash and cash equivalents at end of period	$	1,364,247		$	1,225,830		$	1,364,247		$	1,225,830
Interest and Taxes Paid:
Interest	$	233		$	13		$	420		$	17
Income taxes	77,583			91,035			104,095			117,311

See accompanying notes to condensed consolidated financial statements.

5

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(in thousands, except share data)

(Unaudited)

Note 1. Summary of Significant Accounting Policies

A. Basis of Presentation

Expeditors International of Washington, Inc. (“the Company”) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, and manufacturing companies around the world.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on February 28, 2012. All dollar amounts in the notes are presented in thousands except for share data. All significant intercompany accounts and transactions have been eliminated in consolidation.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $8,731 as of June 30, 2012 and $10,381 as of December 31, 2011. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of insurance liabilities for the portion of the freight related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

D. Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-No. 05 “Presentation of Comprehensive Income”, which amends Accounting Standards Codification (ASC) Topic 220 -“Comprehensive Income”. This update is intended to increase the prominence of items reported in other comprehensive income by giving the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted the provisions of ASU 2011-No. 05, as amended by ASU 2011-No. 12, beginning in the first quarter of 2012. Accordingly, condensed consolidated statements of comprehensive income were included consecutive to the condensed consolidated statements of earnings. The adoption only had a presentation impact on the Company's consolidated financial statements.

Note 2. Share-Based Compensation

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. On May 2, 2012, the shareholders approved the 2012 Stock Option Plan ("2012 Plan"), which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted under the 2012 Plan. The Company's annual grant of option awards generally takes place during the second quarter of each fiscal year. For the six months endedJune 30, 2012 and 2011, 2,822,990 and 2,998,390 options were granted, respectively. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the

6

third quarter of each fiscal year and none were issued in the six-month period ended June 30, 2012 and 2011.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Six months ended June 30,
	2012			2011
Dividend yield	1.30		%	0.97		%
Volatility - stock option plans	38 - 39 %			38 - 40%
Risk free interest rates	0.89 - 1.43%			2.17 - 2.84%
Expected life (years) - stock option plans	5.79 - 7.26			5.50 - 7.11
Weighted average fair value of stock options granted during the period	$	13.53		$	19.35

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2012		2011		2012		2011
Stock compensation expense	$	10,926	$	10,236	$	21,526	$	20,708
Recognized tax benefit	$	336	$	39	$	375	$	77

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Note 3. Basic and Diluted Earnings per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders per share:

	Three months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	83,955	211,724,082	$	.40
Effect of dilutive potential common shares	—		1,488,830	—
Diluted earnings attributable to shareholders	$	83,955	213,212,912	$	.39
2011
Basic earnings attributable to shareholders	$	95,000	212,136,164	$	.45
Effect of dilutive potential common shares	—		3,522,879	—
Diluted earnings attributable to shareholders	$	95,000	215,659,043	$	.44

	Six months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	160,662	211,910,872	$	.76
Effect of dilutive potential common shares	—		1,772,715	—
Diluted earnings attributable to shareholders	$	160,662	213,683,587	$	.75
2011
Basic earnings attributable to shareholders	$	186,232	212,112,643	$	.88
Effect of dilutive potential common shares	—		3,667,587	—
Diluted earnings attributable to shareholders	$	186,232	215,780,230	$	.86

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

	Three months ended		Six months ended
	June 30,		June 30,
	2012	2011	2012	2011
Shares	15,444,641	7,413,458	15,427,041	7,415,063

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Note 4. Components of Equity

The components of equity for the six months ended2012 and 2011 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2011	$	2,003,638		6,431		2,010,069
Exercise of stock options	20,402			—		20,402
Shares repurchased under provisions of stock repurchase plans	(106,266		)	—		(106,266	)
Stock compensation expense	21,526			—		21,526
Tax benefits from stock plans	4,232			—		4,232
Net earnings	160,662			81		160,743
Other comprehensive income (loss)	(1,381		)	90		(1,291	)
Dividends paid ($.28 per share)	(59,358		)	—		(59,358	)
Balance at June 30, 2012	$	2,043,455		6,602		2,050,057
Balance at December 31, 2010	$	1,740,906		7,248		1,748,154
Exercise of stock options	23,625			—		23,625
Shares repurchased under provisions of stock repurchase plans	(65,274		)	—		(65,274	)
Stock compensation expense	20,708			—		20,708
Tax benefits from stock plans	4,531			—		4,531
Net earnings	186,232			(5	)	186,227
Other comprehensive income (loss)	14,334			(141	)	14,193
Dividends paid ($.25 per share)	(53,014		)	—		(53,014	)
Balance at June 30, 2011	$	1,872,048		7,102		1,879,150

On May 2, 2012 , the Board of Directors declared a semi-annual cash dividend of $0.28 per share payable on June 15, 2012 to shareholders of record as of June 1, 2012. On May 4, 2011, the Board of Directors declared a semi-annual cash dividend of $0.25 per share payable on June 15, 2011 to shareholders of record as of June 1, 2011.

Note 5. Fair Value of Financial Instruments

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

	June 30, 2012				December 31, 2011
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	498,782	$	498,782	$	445,586	$	445,586
Corporate commercial paper	804,782		805,080		791,729		791,902
Time deposits	60,683		60,683		57,041		57,041
Total cash and cash equivalents	1,364,247		1,364,545		1,294,356		1,294,529
Short-Term Investments:
Time deposits	376		376		472		472
Total	$	1,364,623	$	1,364,921	$	1,294,828	$	1,295,001

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

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Note 6. Contingencies

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

On April 19, 2012, the Company received a federal grand jury subpoena from the DOJ requiring the production of documents related to the export or re-export by unaffiliated third-parties to end users in a US-embargoed country of products and/or services produced by a U.S. manufacturer. In a related matter, the Company is also responding to an administrative subpoena from the Commerce Department's Bureau of Industry and Security (BIS) requiring the production of documents pertaining to the export or re-export of US-origin goods to the same embargoed country. The Company is co-operating with the DOJ and BIS. If it is determined that the Company or one of its subsidiaries, directly or indirectly, facilitated the export or re-export of these specified products and/or services, the Company may incur fines and/or penalties which could have a material impact on the Company's results of operations and cash flows for any particular quarter or year.

Government investigations are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial monetary damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order relating to business conduct. Were unfavorable final outcomes to occur, the Company's results of operations and cash flows for the particular quarter or year could be materially harmed.

The Company is involved in other claims and lawsuits which arise in the ordinary course of business, none of which currently, in management's opinion, are expected to have a significant effect on the Company's operations or financial position. As of June 30, 2012, the amounts accrued for these claims and lawsuits, and the other legal matters described above, are not significant to the Company's operations or financial position. At this time the Company is unable to estimate any additional loss or range of reasonably possible loss, if any, beyond the amounts recorded, that might result from the resolution of these matters.

Note 7. Business Segment Information

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

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Financial information regarding the Company’s operations by geographic area are as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Three months ended June 30, 2012:
Revenues from unaffiliated customers	$	379,126	49,802	21,366	780,858	202,301	71,499	—		1,504,952
Transfers between geographic areas	22,504		2,466	4,791	11,038	9,603	4,670	(55,072	)	—
Total revenues	$	401,630	52,268	26,157	791,896	211,904	76,169	(55,072	)	1,504,952
Net revenues	$	182,291	25,115	14,724	135,908	71,497	24,116	—		453,651
Operating income	$	49,193	8,085	4,118	51,768	12,951	6,288	—		132,403
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	5,236	153	400	2,602	1,111	312	—		9,814
Depreciation and amortization	$	5,756	181	207	1,645	1,430	451	—		9,670
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Three months ended June 30, 2011:
Revenues from unaffiliated customers	$	390,806	47,816	21,136	816,350	229,724	75,536	—		1,581,368
Transfers between geographic areas	25,973		2,783	5,220	10,170	11,355	4,500	(60,001	)	—
Total revenues	$	416,779	50,599	26,356	826,520	241,079	80,036	(60,001	)	1,581,368
Net revenues	$	181,603	21,581	15,157	150,616	78,828	24,776	—		472,561
Operating income	$	57,752	5,761	4,486	61,542	16,877	5,857	—		152,275
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	3,350	448	144	4,622	7,881	665	—		17,110
Depreciation and amortization	$	4,926	277	264	1,847	1,416	527	—		9,257
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE  and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Six months ended June 30, 2012:
Revenues from unaffiliated customers	$	756,428	99,756	40,635	1,468,928	408,572	142,003	—		2,916,322
Transfers between geographic areas	44,712		4,931	9,870	22,010	19,070	9,321	(109,914	)	—
Total revenues	$	801,140	104,687	50,505	1,490,938	427,642	151,324	(109,914	)	2,916,322
Net revenues	$	363,766	47,357	29,559	267,722	143,030	48,788	—		900,222
Operating income	$	94,718	14,454	8,880	99,006	27,198	13,418	—		257,674
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	14,995	329	655	7,889	2,053	981	—		26,902
Depreciation and amortization	$	11,378	368	424	3,269	2,834	942	—		19,215
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Six months ended June 30, 2011:
Revenues from unaffiliated customers	$	767,911	91,663	41,469	1,544,480	443,335	153,358	—		3,042,216
Transfers between geographic areas	49,938		5,465	10,841	19,353	22,062	8,709	(116,368	)	—
Total revenues	$	817,849	97,128	52,310	1,563,833	465,397	162,067	(116,368	)	3,042,216
Net revenues	$	359,537	42,282	30,260	292,104	152,753	49,540	—		926,476
Operating income	$	111,486	11,550	9,249	120,980	34,584	11,656	—		299,505
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	7,380	608	300	9,334	19,587	1,026	—		38,235
Depreciation and amortization	$	9,911	580	533	3,816	2,526	1,065	—		18,431
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150

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

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

Certain portions of this report on Form 10-Q including the sections entitled “Executive Summary,” “Critical Accounting Estimates,” “Results of Operations,” “Currency and Other Risk Factors” and “Liquidity and Capital Resources” contain forward-looking statements. Words such as “expects,” “goals,” “plans,” “believes,” “continues,” “may,” “will,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of future financial performance, our anticipated growth and trends in the Company's businesses, and other characterizations of future events or circumstances are forward-looking statements. These statements must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. In addition to risk factors identified elsewhere in this report, attention should be given to the factors identified and discussed in the report on Form 10-K filed on February 28, 2012.

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, domestic time definite services and other logistics solutions. The Company does not compete for overnight courier or small parcel business. The Company does not own or operate aircraft or steamships.

International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, and 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 and accords. The Company cannot predict which, if any, of these proposals may be adopted, nor can the Company predict the effects the adoption of any such proposal will have on the Company’s business. Doing business in foreign locations also subjects the Company to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies concerning international trade, the Company’s business may also be affected by political developments and changes in government personnel or policies, as well as economic turbulence, political unrest or security concerns in the nations in which it does business and the future impact that these events may have on international trade and oil prices. The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. Consistent with continuing uncertainty in global economic conditions, concerns over volatile fuel costs, rising costs in general, political unrest and fluctuating currency exchange rates, the Company’s pricing and terms continue to be pressured by customers and service providers. Absent of any meaningful improvement in economic conditions, the Company expects similar trends to continue in the near term.

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

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

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

The Company’s ability to provide services to its customers is highly dependent on good working relationships with a variety of entities including airlines, ocean steamship lines, and governmental agencies. The significance of maintaining acceptable working relationships with governmental agencies and asset-based carriers involved in global trade has gained increased importance as a result of ongoing concern over terrorism. As each carrier labors to comply with additional governmental regulations implementing security policies and procedures, inherent conflicts emerge which can and do affect global trade. A good reputation helps to develop practical working understandings that will assist in meeting security

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requirements while minimizing potential international trade obstacles. The Company considers its current working relationships with these entities to be satisfactory. However, the airline and ocean steamship line industries have incurred significant losses in recent years as a result of the global economic downturn and many carriers are highly leveraged with debt. This situation has required the Company to be increasingly selective in which carriers to utilize. Further changes in the financial stability, operating capabilities and capacity of asset-based carriers, space allotments available from carriers, governmental regulation or deregulation efforts, “modernization” of the regulations governing customs brokerage, and/or changes in governmental quota restrictions or trade accords 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 weather patterns, 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.

The Company operates in 60 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 corporate culture which demands:

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

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

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

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

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

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

The Company reinforces these values with a compensation system that rewards employees for profitably managing the things they can control. This compensation system has been in place since the Company became a publicly traded entity. There is no limit to how much a key manager can be compensated for success. The Company believes in a “real world” environment in every operating unit where individuals are not sheltered from the profit implications of their decisions. If these decisions result in operating losses, these losses must be made up from future operating profits, in the aggregate, before any cash incentive compensation can be earned. 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 improving systems and taking preventative action to reduce exposure to negative events and risks. 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 corporate 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.

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Critical Accounting Estimates

Management believes that the nature of the Company’s business is such that there are few complex challenges in accounting for operations. While judgments and estimates are a necessary component of any system of accounting, the Company’s use of estimates is limited primarily to the following areas:

• accounts receivable valuation;

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

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

• accrual of various tax liabilities;

• accrual of loss contingencies; and

• calculation of share-based compensation expense.

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

The outcomes of government investigations, legal proceedings and claims brought against the Company are subject to significant uncertainty. An estimated loss from a contingency such as a government investigation, legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a loss contingency is required if there is at least a reasonable possibility that a significant loss has been incurred. In determining whether a loss should be accrued, management evaluates several factors, including advice from outside legal counsel, in order to estimate the degree of probability of an unfavorable outcome and make a reasonable estimate of the amount of loss or range of reasonably possible loss. Changes in these factors could have a material impact on the Company’s results of operations and operating cash flows for any particular quarter or year.

As described in Note 2 in the condensed consolidated financial statements in this quarterly report, the Company accounts for share-based compensation based on an estimate of the fair value of options granted to employees under the Company’s stock option and stock purchase rights plans. This expense, as adjusted for expected forfeitures, is recorded on a straight-line basis over the option vesting period.

Determining the appropriate option pricing model to use to estimate stock compensation expense requires judgment. Any option pricing model requires assumptions that are subjective and these assumptions also require judgment. Examples include assumptions about long-term stock price volatility, employee exercise patterns, pre-vesting option forfeitures, post-vesting option terminations, and future interest rates and dividend yields. The Company uses the Black-Scholes model for estimating the fair value of stock options.

Management believes that the assumptions used are appropriate based upon the Company’s historical and currently expected future experience. Looking to future events, management has been strongly influenced by historical patterns which may not be valid predictors of future developments and any future deviation may be material. The fair value of an option is more significantly impacted by changes in the expected volatility and expected life assumptions. The pre-vesting forfeitures assumption is ultimately adjusted to the actual forfeiture rate. Therefore, changes in the forfeitures assumption would not impact the total amount of expense ultimately recognized over the vesting period. Different forfeitures assumptions would only impact the timing of expense recognition over the vesting period. Estimated forfeitures will be reassessed in subsequent periods and may change based on new facts and circumstances.

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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 six-month periods ended June 30, 2012 and 2011, 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 June 30,								Six months ended June 30,
	2012				2011				2012				2011
	Amount		Percent of net revenues		Amount		Percent of net revenues		Amount		Percent of net revenues		Amount			Percent of net revenues
	(Amounts in thousands)
Net Revenues:
Airfreight services	$	154,230	34	%	$	173,581	37	%	$	312,099	35	%	$	349,868		38	%
Ocean freight and ocean services	105,551		23		109,026		23		207,933		23		209,618			23
Customs brokerage and other services	193,870		43		189,954		40		380,190		42		366,990			39
Net revenues	453,651		100		472,561		100		900,222		100		926,476			100
Overhead Expenses:
Salaries and related costs	249,925		55		249,114		53		496,057		55		486,929			53
Other	71,323		16		71,172		15		146,491		16		140,042			15
Total overhead expenses	321,248		71		320,286		68		642,548		71		626,971			68
Operating income	132,403		29		152,275		32		257,674		29		299,505			32
Other income, net	6,510		1		2,940		1		10,347		1		6,163			1
Earnings before income taxes	138,913		30		155,215		33		268,021		30		305,668			33
Income tax expense	54,892		12		60,195		13		107,278		12		119,441			13
Net earnings	84,021		18		95,020		20		160,743		18		186,227			20
Less net earnings (losses) attributable to noncontrolling interest	66		—		20		—		81		—		(5		)	—
Net earnings attributable to shareholders	$	83,955	18	%	$	95,000	20	%	$	160,662	18	%	$	186,232		20	%

Airfreight services net revenues decreased 11% for the three-month period ended June 30, 2012, as compared with the same period for 2011. The decrease in global airfreight services net revenues was primarily due to a 10% decrease in airfreight tonnage. North America, Asia Pacific and Europe airfreight services net revenues decreased 3%, 18% and 16%, respectively, in the second quarter of 2012 as compared with the same period in 2011, while airfreight export tonnage for North America, Asia Pacific and Europe decreased 14%, 8% and 10%, respectively.

Airfreight services net revenues decreased 11% for the six-month period ended June 30, 2012, as compared with the same period for 2011. The decrease in global airfreight services net revenues was primarily due to a 9% decrease in airfreight tonnage. North America, Asia Pacific and Europe airfreight services net revenues decreased 7%, 15% and 12%, respectively, in the six months endedJune 30, 2012 as compared with the same period in 2011, while airfreight export tonnage for North America, Asia Pacific and Europe decreased 15%, 5% and 7%, respectively.

The decline in airfreight tonnage for the three and six months ended June 30, 2012 can be attributed to an overall decrease in the global airfreight market and a lower level of customer specific infrastructure and project related tonnage than experienced during the first half of 2011. Absent of any meaningful improvements in the uncertainties related to global economic conditions, the Company expects similar trends to continue in the near term.

Ocean freight and ocean services net revenues are comprised of three basic services: ocean freight consolidation, direct ocean forwarding and order management. The largest component of the Company’s ocean freight net revenue is derived from ocean freight consolidation which represented 46% and 47% of ocean freight net revenue for the three and six-month periods ended June 30, 2012, respectively, and 50% and 51% for the same periods ended June 30, 2011, respectively.

Ocean freight and ocean services net revenues decreased 3% for the three-month period ended June 30, 2012, as compared with the same period for 2011. North America ocean freight net revenues increased 1% while Asia Pacific and Europe decreased 6% and 5%, respectively, in the second quarter of 2012, as compared with the same period in 2011. Ocean freight consolidation net revenue decreased 11% for the three-month period ended June 30, 2012, as compared with the same period for 2011, due to a 12% decrease in net revenue per container offset by a 1% increase in container volume as measured in terms of forty-foot container equivalent units (FEUs).

Ocean freight and ocean services net revenues decreased 1% for the six-month period ended June 30, 2012, as compared with the same period for 2011. North America ocean freight net revenues increased 2% while Asia Pacific and Europe decreased by 4% and 2%, respectively, in the six-month period ended June 30, 2012, as compared with the same period in 2011. Ocean freight consolidation net revenue decreased 9% for the six-month period ended June 30, 2012, as compared with the same period for 2011, due to a 10% decrease in net revenue per container offset by a 1% increase in container volume as measured in terms of forty-foot container equivalent units (FEUs). The decreases in net revenue per container were primarily due to the timing of significant increases in buy rates implemented by carriers combined with a reduction in available market capacity. We expect carriers will continue to manage overall available capacity in an attempt to maintain rates and improve their operating results.

Direct ocean freight forwarding and order management, which are primarily fee-based, increased 7% and 2%, respectively, for the three-month period ended June 30, 2012, and increased 10% and 4%, respectively, for the six-month period ended June 30, 2012, as compared with the same periods in 2011, primarily due to an increase in market share and volume.

Customs brokerage and other services net revenues increased 2% and 4%, respectively, for the three and six-month periods ended June 30, 2012, as compared with the same periods for 2011, primarily as a result of an increase in market share and volume related to domestic time definite services. Customers continue to seek out customs brokers with sophisticated computerized capabilities critical to an overall logistics management program, including rapid responses to changes in the regulatory and security environment.

Salaries and related costs remained constant and increased 2%, respectively, for the three and six-month periods ended June 30, 2012, as compared with the same periods for 2011, primarily as a result of a 3% increase in the number of employees and higher payroll related taxes and medical costs, partially offset by lower bonuses. The effects of including stock-based compensation expense in salaries and related costs are as follows:

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Salaries and related costs	$	249,925		$	249,114		$	496,057		$	486,929
As a % of net revenue	55.1		%	52.7		%	55.1		%	52.6		%
Stock compensation expense	$	10,926		$	10,236		$	21,526		$	20,708
As a % of net revenue	2.4		%	2.2		%	2.4		%	2.2		%

Historically, the relatively consistent relationship between salaries and net revenues is the result of a compensation philosophy that has been maintained since the inception of the Company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee. Using this compensation model, changes in individual incentive compensation will occur in proportion to changes in Company profits, creating a direct alignment between corporate performance and shareholder interests. However, the results in the first half of 2012 were not consistent with this historical relationship primarily due to a higher number of employees and a decrease in net revenue. Bonuses to field and executive management for the first half of 2012 were down 9% and 14%, respectively, as compared with the same period for 2011, primarily as a result of a 14% decrease in operating income. The Company’s management incentive compensation programs have always been incentive-based and performance driven and there is no built-in bias that favors or enriches management in a manner inconsistent with overall corporate performance.

Because the Company’s management incentive compensation programs are also cumulative, no management bonuses can be paid unless the relevant business unit is, from inception, cumulatively profitable. Any operating losses must have been offset in their entirety by operating profits before management is eligible for a bonus. Since the most significant portion of management compensation comes from the incentive bonus programs, the Company believes that this cumulative feature is a disincentive to excessive risk taking by its managers. Due to the nature of the Company’s services, it has a short operating cycle. The outcome of any higher risk transactions, such as overriding established credit limits, would be known in a relatively short time frame. Management believes that when the potential and certain impact on the bonus is fully considered in light of this short operating cycle, the potential for short term gains that could be generated by engaging in risky business practices is sufficiently mitigated to discourage excessive and inappropriate risk taking. Management believes that both the stability and the long term growth in revenues, net revenues and net earnings are a result of the incentives inherent in the Company’s compensation program.

Other overhead expenses remained constant and increased 5%, respectively, for the three and six-month periods ended June 30, 2012, as compared with the same periods in 2011. The increase for the first half of 2012 is primarily due to the European Commission's conclusion that the Company engaged in anti-competitive behavior which resulted in a fine of €4.14 million ($5.5 million). The Company will continue to incur legal costs related to matters described in Note 6 in the condensed consolidated financial statements in this quarterly report until these legal proceedings are concluded. The Company is subject to formal and informal investigations or litigation from governmental authorities of others, some of which are described in Note 6 in the condensed consolidated financial statements in this quarterly report. If the governmental regulatory agencies conclude that the Company violated certain laws or regulations, fines and/or penalties could have a material impact on the Company’s results of operations and operating cash flows for any particular quarter or year. Further, the Company periodically conducts reviews of the operations and procedures of its offices worldwide relating to compliance with applicable laws and regulations.

The Company pays income taxes in the United States and other jurisdictions, as well as other taxes which are typically included in costs of operations. The Company’s consolidated effective income tax rate increased to approximately 39.5% and 40.0%, respectively, for the three and six-month periods ended June 30, 2012, as compared to 38.8% and 39.1%, respectively, for the three and six-month periods ended June 30, 2011, due to higher nondeductible expenses and stock compensation relative to lower pre-tax earnings.

Currency and Other Risk Factors

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 volatile 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 around the world or the short-term financial outlook in any country is such that hedging is the most time-sensitive way to mitigate short-term exchange losses. Any such hedging activity during the three and six months endedJune 30, 2012 and 2011 was insignificant. The Company had no foreign currency derivatives outstanding at June 30, 2012 and December 31, 2011. Net foreign currency losses were approximately $1,430 and $2,506, respectively, for the three and six months endedJune 30, 2012. For the same periods of 2011, the Company's net foreign currency gains were approximately $363 and net foreign currency losses were approximately $330, respectively.

International air and 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. Historically, the industry has experienced consolidations into larger firms striving for stronger and more complete multinational and multi-service networks. However, regional and local brokers and forwarders remain a competitive force.

The primary competitive factors in the international logistics industry continue to be 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. Larger customers utilize more sophisticated and efficient procedures for the management of their logistics supply chains by embracing strategies such as just-in-time inventory management. The Company believes that this trend has resulted in customers using fewer service providers with greater technological capacity and more consistent global coverage. Accordingly, sophisticated computerized customer service capabilities and a stable worldwide network have become significant factors in attracting and retaining customers. Developing these systems and a worldwide network has added a considerable indirect cost to the services provided to customers. Smaller and middle-tier competitors, in general, do not have the resources available to develop customized systems and a worldwide network.

Liquidity and Capital Resources

The Company’s principal source of liquidity is cash and cash equivalents and cash generated from operating activities. Net cash provided by operating activities for the three and six months endedJune 30, 2012, was approximately $93 million and $240 million, respectively, as compared with $78 million and $256 million for the same periods in 2011. The increase of $15 million for the three-month period ended June 30, 2012 is primarily due to less cash used by working capital accounts, partially offset by lower earnings. The decrease of $16 million for the six-month period ended June 30, 2012 is primarily due to lower earnings, partially offset by changes in working capital accounts. At June 30, 2012, working capital was $1,522 million, including cash, cash equivalents and short-term investments of $1,365 million. The Company had no long-term debt at June 30, 2012. Management believes that the Company’s current cash position 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.

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 and continuing well into the fourth 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 cash advances for a select group of its credit-worthy customers. These cash advances are for customer obligations such as the payment of duties to customs authorities in various countries throughout the world. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency.

Cash from investing activities for the three months ended June 30, 2012, was $6 million. Cash used in investing activities for the six months endedJune 30, 2012, was $26 million. The largest use of cash in investing activities is cash paid for capital expenditures. The Company does have need, on occasion, to purchase or construct 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 second quarter of 2012, the Company made capital expenditures of $10 million, as compared with $17 million for the same period in 2011. Capital expenditures in the second quarter of 2012 related primarily to investments in buildings and leasehold improvements, technology, and office furniture and equipment. Total capital expenditures in 2012 are currently estimated to be $86 million. This includes normal capital expenditures as noted above plus additional real estate development.

Cash used in financing activities during the three and six months endedJune 30, 2012, was $135 million and $141 million, as compared with $81 million and $90 million for each of the same periods in 2011. The Company uses the proceeds from stock option exercises and available cash to repurchase the Company’s common stock on the open market. In the second quarter of 2012, the Company continued its policy of repurchasing stock to limit growth in issued and outstanding shares as a result of stock option exercises. The increase in cash used in financing activity during the three and six months endedJune 30, 2012, as compared to the same periods in 2011, is primarily the result of this policy and an additional discretionary repurchase of 1.5 million shares at an average price of $37.57. During the three months ended June 30, 2012 and 2011, the Company paid dividends of $.28 per share and $.25 per share, respectively.

The Company follows established guidelines relating to credit quality, diversification and maturities of its investments to preserve principal and maintain liquidity. In the past, the Company’s investment portfolio has not been adversely impacted by disruptions in the credit markets. However, there can be no assurance that the Company’s investment portfolio will not be adversely affected in the future.

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

The Company maintains international unsecured bank lines of credit. At June 30, 2012, amounts available for borrowing under international bank lines of credit totaled $14 million. At June 30, 2012, the Company was contingently liable for $100 million from standby letters of credit and guarantees. The standby letters of credit and guarantees relate to obligations of the Company’s foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value-added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excises are properly recorded as obligations in the books of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company is required to perform.

The Company's foreign subsidiaries regularly remit dividends to the U.S. parent company after evaluating their working capital requirements and needs to finance local capital expenditures. In some cases, the Company’s ability to repatriate funds from foreign operations may be subject to foreign exchange controls. At June 30, 2012, cash and cash equivalent balances of $599 million were held by the Company’s non-United States subsidiaries, of which $43 million was held in banks in the United States. Earnings of the Company's foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States and, accordingly, a deferred tax liability has been accrued for all undistributed earnings, net of foreign related tax credits, that are available to be repatriated.

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 and may have receivables, payables and currencies that are not denominated in the local functional currency. This brings foreign exchange risk to the Company’s earnings. The principal foreign exchange risks to which the Company is exposed are in Chinese yuan, Euro, Mexican peso and Canadian dollar.

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 six months ended June 30, 2012, would have had the effect of raising operating income approximately $19 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income approximately $15 million. This analysis does not take into account changes in shipping patterns based upon this hypothetical currency fluctuation. For example, a weakening in the U.S. dollar would be expected to increase exports from the United States and decrease imports into the United States over some relevant period of time, but the exact effect of this change cannot be quantified without making speculative assumptions.

As of June 30, 2012, the Company had approximately $3 million of net unsettled intercompany transactions. The Company currently does not use derivative financial instruments to manage foreign currency risk and only enters into foreign currency hedging transactions in limited locations where regulatory or commercial limitations restrict the Company’s ability to move money freely. Any such hedging activity during the six months endedJune 30, 2012 and 2011 was insignificant. During the three and six months endedJune 30, 2012, net foreign currency losses were approximately $1,430 and $2,506. For the same periods of 2011, the Company's net foreign currency gains were approximately $363 and net foreign currency losses were approximately $330, respectively. The Company had no foreign currency derivatives outstanding at June 30, 2012 and December 31, 2011. The Company instead follows a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. The majority of intercompany billings are resolved within 30 days.

Interest Rate Risk

At June 30, 2012, the Company had cash, cash equivalents and short-term investments of $1,365 million of which $866 million was invested at various short-term market interest rates. The Company had no long-term debt at June 30, 2012. A hypothetical change in the interest rate of 10 basis points at June 30, 2012 would not have a significant impact on the Company’s earnings.

In management’s opinion, there has been no material change in the Company’s interest rate risk exposure in the second quarter of 2012.

Item 4. Controls and Procedures

Evaluation of Controls and Procedures

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

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

15

financial reporting.

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

On April 19, 2012, the Company received a federal grand jury subpoena from the DOJ requiring the production of documents related to the export or re-export by unaffiliated third-parties to end users in a US-embargoed country of products and/or services produced by a U.S. manufacturer. In a related matter, the Company is also responding to an administrative subpoena from the Commerce Department's Bureau of Industry and Security (BIS) requiring the production of documents pertaining to the export or re-export of US-origin goods to the same embargoed country. The Company is co-operating with the DOJ and BIS. If it is determined that the Company or one of its subsidiaries, directly or indirectly, facilitated the export or re-export of these specified products and/or services, the Company may incur fines and/or penalties which could have a material impact on the Company's results of operations and cash flows for any particular quarter or year.

Government investigations are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial monetary damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order relating to business conduct. Were unfavorable final outcomes to occur, the Company's results of operations and cash flows for the particular quarter or year could be materially harmed.

The Company is involved in other claims and lawsuits which arise in the ordinary course of business, none of which currently, in management's opinion, are expected to have a significant effect on the Company's operations or financial position. As of June 30, 2012, the amounts accrued for these claims and lawsuits, and the other legal matters described above, are not significant to the Company's operations or financial position. At this time the Company is unable to estimate any additional loss or range of reasonably possible loss, if any, beyond the amounts recorded, that might result from the resolution of these matters.

Item 1A. Risk Factors

There have been no material changes in the Company’s risk factors from those disclosed in the report on Form 10-K filed on February 28, 2012, except for the following:

RISK FACTOR

DISCUSSION AND POTENTIAL SIGNIFICANCE

Litigation/Investigations

As a multinational corporation, the Company is subject to formal or informal investigations or litigation from governmental authorities or others in the countries in which it does business. Included among these investigations, the Company is currently subject to, and is cooperating fully with, investigations by the U.S. Department of Justice and the Commerce Department's Bureau of Industry and Security. These investigations and other periodic investigations will require further management time and could cause the Company to incur substantial additional legal and related costs, which may include fines and/or penalties that could have a material impact on the Company's results of operations and cash flows. The Company may also become subject to other civil litigation arising from such investigations or litigations, including but not limited to shareholder class action lawsuits and derivative claims made on behalf of plaintiffs.

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

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under  the plans or programs
April 1-30, 2012	4,142	$	46.22	4,142	29,065,352
May 1-31, 2012	659,660	39.21		659,660	28,388,337
June 1-30, 2012	1,550,533	37.63		1,550,533	26,881,952
Total	2,214,335	$	38.12	2,214,335	26,881,952

In November 1993, the Company’s Board of Directors authorized a Non-Discretionary Stock Repurchase Plan for the purpose of repurchasing the Company’s common stock in the open market with the proceeds received from the exercise of stock options. On February 9, 2009, the Plan was amended to increase the authorization to repurchase up to 40 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 second quarter of 2012, 307,565 shares of common stock were repurchased under the Non-Discretionary Stock Repurchase Plan.

In November 2001, under a Discretionary Stock Repurchase Plan, the Company’s Board of Directors authorized the repurchase of such shares as may be necessary to reduce the issued and outstanding stock to 200 million shares of common stock. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. This authorization has no expiration date. This plan was announced on November 13, 2001. In the second quarter of 2012, 1,906,770 shares of common stock were repurchased under the Discretionary Stock Repurchase Plan. These discretionary repurchases included 406,770 shares that were made to limit the growth in the number of issued and outstanding shares resulting from stock option exercises and the exercise of employee stock purchase rights and 1.5 million shares to reduce the number of total shares outstanding.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) On August 6, 2012, the Company's Board of Directors amended Article IV(1) of the Company's Bylaws, effective immediately, in order to increase the maximum potential size of the Board of Directors from nine to ten directors. The preceding description is qualified in its entirety by reference to the complete text of the Company's Bylaws, as amended, which are attached as Exhibit 3.2 to this Form 10-Q.

(b) Not applicable.

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Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K.

Exhibit Number	Description
3.2	The Company's Bylaws, as amended on August 6, 2012.
10.1	The Company's 2012 Stock Option Plan. (Incorporated by reference to Appendix A of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on March 20, 2012.)
10.2	Form of Stock Option Agreement used in connection with options granted under the Company's 2012 Stock Option Plan. (Incorporated by reference to Appendix B of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on March 20, 2012.)
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
August 8, 2012	/s/ PETER J. ROSE
	Peter J. Rose, Chairman and Chief Executive Officer
August 8, 2012	/s/ BRADLEY S. POWELL
	Bradley S. Powell, Senior Vice President and Chief Financial Officer

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EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

AND SUBSIDIARIES

Form 10-Q Index and Exhibits

June 30, 2012

Exhibit Number	Description
3.2	The Company's Bylaws, as amended on August 6, 2012.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-3.2

EXHIBIT 3.2

AMENDED AND RESTATED BYLAWS OF EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. DATED FEBRUARY 28, 1989, AMENDED AS OF MAY 2, 2007 AND FURTHER AMENDED AUGUST 6, 2007, JANUARY 15, 2009, NOVEMBER 1, 2010 AND

AUGUST 6, 2012

Article I

Offices

(1)    Registered Office and Registered Agent: The registered office of the corporation shall be located in the State of Washington at such place as may be fixed from time to time by the Board of Directors upon filing of such notices as may be required by law, and the registered agent shall have a business office identical with such registered office.

(2)    Other Offices: The corporation may have other offices within or outside the State of Washington at such place or places as the Board of Directors may from time to time determine.

Article II

Shareholders' Meetings

(1)    Meeting Place: All meetings of the shareholders shall be held at the principal place of business of the corporation, or at such other place as shall be determined from time to time by the Board of Directors, and the place at which any such meeting shall be held shall be stated in the notice of the meeting.

(2)    Annual Meeting Time: The annual meeting of the shareholders for the election of directors and for the transaction of such other business as may properly come before the meeting, shall be held each year on the second Wednesday of May at the hour of ten o'clock a.m. if not a legal holiday, and if a legal holiday, then on the day following, at the same hour. The time and place of holding any annual meeting may be changed by resolution of the Board of Directors, provided that notification of such change shall meet the notice requirements pursuant to Article II(6) hereunder.

(3)    Business at Annual and Special Meetings. No business may be transacted at an annual or special meeting of shareholders other than business that is

(a)specified in a notice of meeting given by or at the direction of the Board of Directors or an authorized committee thereof and in the form provided by Article II(6),

(b)otherwise brought before the meeting by or at the direction of the Board of Directors or an authorized committee thereof, or

(c)otherwise brought before an annual meeting or special meeting:

i. by (1) a shareholder that holds of record stock of the corporation entitled to vote at the meeting on such business (including any election of a director) (a “Record Holder”) or (2) a person (a “Nominee Holder”) that holds such stock through a nominee or “street name” holder of record of such stock and can demonstrate to the corporation such indirect ownership of such stock and such Nominee Holder's entitlement to vote such stock on such business, and

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ii. who complies with the notice procedures and subject to the limitations set forth in Article II(15) (Record Holders and Nominee Holders are referred to as “Noticing Shareholders”).

Clause (c) of this Article II(3) shall be the exclusive means for Noticing Shareholders to make director nominations or submit other business before an annual or special meeting of shareholders (other than proposals brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and included in the corporation's notice of meeting, which proposals are not governed by these Bylaws).

(4)    Annual Meeting - Order of Business: At the annual meeting of shareholders, the order of business shall be as follows:

(a)    Calling the meeting to order.

(b)    Proof of notice of meeting (or filing waiver).

(c)    Reading of minutes of last annual meeting.

(d)    Reports of officers.

(e)    Reports of committees.

(f)    Election of directors.

(g)    Miscellaneous business.

(5)    Special Meetings: Special meetings of the shareholders for any purpose may be called at any time by the President or Board of Directors, or the holders of not less than one-tenth of all shares entitled to vote at the meeting.

(6)    Notice: Notice of the place, if any, date and time of any shareholders' meeting shall be given to each shareholder entitled to vote. Notice of a special meeting shall also state the purpose or purposes for which the meeting has been called. Unless otherwise provided in the Washington Business Corporation Act, notice shall be given at least 10 days but not more than 60 days before the date of the meeting.

(a)    Notice Provided in a Tangible Medium: Notice to any shareholder may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment which transmits a facsimile of the notice.

(b)    Notice Provided in an Electronic Transmission: Notice to any shareholder may be provided in an electronic transmission and be electronically transmitted. Notice to shareholders in an electronic transmission is effective only with respect to shareholders that have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable statute or regulation. A shareholder that has consented to receipt of electronically transmitted notices may revoke such consent by delivering a revocation to the corporation in the form of a record. The consent of a shareholder to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation, the transfer agent or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other

2

action.

(c)    Posting Notice on an Electronic Network: Notice to shareholders that have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the shareholder a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.

(d)    Effectiveness of Notice: If mailed, notice shall be deemed effective when mailed with first-class postage prepaid and correctly addressed to the shareholder's address shown in the corporation's current record of shareholders. If transmitted by any other permissible tangible means, notice shall be effective at such time specified in the Washington Business Corporation Act. An affidavit of the corporation's secretary, an assistant secretary or an agent of the corporation that notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated in the affidavit. Notice provided in an electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.

(7)    Voting Record: At least ten days before each meeting of shareholders, a complete record of the shareholders entitled to vote at such meeting, or any adjournment thereof, shall be made, arranged in alphabetical order, with the address of and number of shares held by each, which record shall be kept on file at the registered office of the corporation for a period of ten days prior to such meeting. The record shall be kept open at the time and place of such meeting for the inspection of any shareholder.

(8)    Quorum: Except as otherwise required by law:

(a)    A quorum at any annual or special meeting of shareholders shall consist of shareholders representing, either in person or by proxy, a majority of the outstanding capital stock of the corporation entitled to vote at such meeting.

(b)    If a quorum is present, action on a matter, other than the election of Directors, shall be approved by a voting group if the votes cast within the voting group in favor of the action exceed the votes cast within the voting group against such action, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes.

(9)    Voting of Shares: Except as otherwise provided in these Bylaws or to the extent that voting rights of the shares of any class or classes are limited or denied by the Articles of Incorporation, each shareholder, on each matter submitted to a vote at a meeting of shareholders, shall have one vote for each share of stock registered in his name on the books of the corporation.

(10)    Closing of Transfer Books and Fixing Record Date: For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed sixty days nor be less than ten days preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a record date for any such determination of shareholders, such date to be not more than sixty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action requiring such determination of shareholders is to be taken.

(11)    Proxies: A shareholder may vote either in person or by proxy executed in writing by the shareholder or his duly authorized attorney-in-fact. No proxy shall be valid after eleven months from the

3

date of its execution, unless otherwise provided in the proxy.

(12)    Action by Shareholders without a Meeting: Any action required or which may be taken at a meeting of shareholders of the corporation may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. Such consent shall have the same force and effect as a unanimous vote of shareholders.

(13)    Waiver of Notice: A shareholder may waive any notice required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time of the meeting that is the subject of such notice or, in the case of notice required to be given to nonconsenting or nonvoting shareholders in connection with action taken by less than unanimous consent of the shareholders, before or after the action to be taken by executed consent is effective. The waiver must be (i) delivered by the shareholder entitled to notice to the corporation for inclusion in the minutes or filing with the corporate records, and (ii) set forth either in an executed and dated written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver is electronically transmitted to the designated address, location or system, in an executed and dated electronically transmitted record.

(14)    Action of Shareholders by Communications Equipment: Shareholders may participate in a meeting of shareholders by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at a meeting.

(15)    Notice of Shareholder Business to be Conducted at an Annual Meeting or Special Meeting of Shareholders: In order for a Noticing Shareholder to properly bring any item of business before an annual meeting or special meeting of shareholders, the Noticing Shareholder must give timely notice thereof in writing to the Secretary of the corporation in compliance with the requirements of this Article II(15). Subject to compliance with the requirements of this Article II(15) and clause (c) of Article II(3), a Noticing Shareholder may nominate a director at an annual meeting of the shareholders, or any special meeting of the shareholders called for the purpose of electing directors. This Article II(15) shall constitute an “advance notice provision” for annual meetings for purposes of Rule 14a-4(c)(1) under the Exchange Act.

(a)    To be timely, a Noticing Shareholder's notice shall be delivered to the Secretary at the principal executive offices of the corporation:

i. For the purposes of an annual meeting, not earlier than the close of business on the 120th day and not later than the close of business on the later of (i) the 90th day prior to the first anniversary of the preceding year's annual meeting and (ii) the 35th day after the first public announcement of the adoption of this Article II(15); provided, however, that in the event the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the corporation. In no event shall any adjournment or

4

postponement of an annual meeting, or the announcement thereof, commence a new time period for the giving of a shareholder's notice as described above.

ii. For the purposes of a special meeting, not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the date of such special meeting of shareholders; provided, however, that if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the corporation.

(b)    To be in proper form, whether in regard to a nominee for election to the Board of Directors or other business, a Noticing Shareholder's notice to the Secretary must:

i. Set forth, as to the Noticing Shareholder and, if the Noticing Shareholder holds for the benefit of another, the beneficial owner on whose behalf the nomination or proposal is made, the following information together with a representation as to the accuracy of the information:

(A) the name and address of the Noticing Shareholder as they appear on the corporation's books and, if the Noticing Shareholder holds for the benefit of another, the name and address of such beneficial owner (collectively “Holder”),

(B) the class or series and number of shares of the corporation that are, directly or indirectly, owned beneficially and/or of record,

(C) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not the instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a “Derivative Instrument”) that is directly or indirectly owned beneficially by the Holder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation,

(D) any proxy, contract, arrangement, understanding, or relationship pursuant to which the Holder has a right to vote or has granted a right to vote any shares of any security of the corporation,

(E) any short interest in any security of the corporation (for purposes of these Bylaws a person shall be deemed to have a short interest in a security if the Holder directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security),

(F) any rights to dividends on the shares of the corporation owned

5

beneficially by the Holder that are separated or separable from the underlying shares of the corporation,

(G) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership or limited liability company or similar entity in which the Holder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, is the manager, managing member or directly or indirectly beneficially owns an interest in the manager or managing member of a limited liability company or similar entity,

(H) any performance-related fees (other than an asset-based fee) that the Holder is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any,

(I) any arrangements, rights, or other interests described in this Article II(15)(b)(i)(C)-(H) held by members of such Holder's immediate family sharing the same household,

(J) any other information relating to the Holder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations thereunder, and

(K) any other information as reasonably requested by the corporation.

Such information shall be provided as of the date of the notice and shall be supplemented by the Holder not later than 10 days after the record date for the meeting to disclose such ownership as of the record date.

ii. If the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, the notice must set forth:

(A) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest of the Holder, in such business, and

(B) a description of all agreements, arrangements and understandings, direct and indirect, between the Holder, and any other person or persons (including their names) in connection with the proposal of such business by the Holder.

iii. Set forth, as to each person, if any, whom the Holder proposes to nominate for election or reelection to the Board of Directors:

(A) all information relating to the Holder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and

6

the rules and regulations thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and

(B) a description of all direct and indirect compensation and other material monetary agreements, arrangements, and understandings during the past three years, and any other material relationships, between or among the Holder and respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the Holder making the nomination or on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of Item 404 and the nominee were a director or executive officer of such registrant.

iv. A representation that the Noticing Shareholder intends to vote or cause to be voted such stock at the meeting and intends to appear in person or by a representative at the meeting to nominate the person or propose the business specified in the notice.

v. With respect to each nominee for election or reelection to the Board of Directors, the Noticing Shareholder shall include a completed and signed questionnaire, representation, and agreement required by Article II(16). The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of the proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable shareholder's understanding of the independence, or lack thereof, of the nominee.

(c)    Notwithstanding anything in Article II(15)(a) to the contrary, if the number of directors to be elected to the Board of Directors is increased and there is no public announcement by the corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year's annual meeting, a shareholder's notice required by these Bylaws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10th day following the day on which the public announcement naming all nominees or specifying the size of the increased Board of Directors is first made by the corporation.

(d)    For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act and the rules and regulations thereunder.

(e)    Only those persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors. Only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in these Bylaws. Except as otherwise provided by law, the Articles of Incorporation, or these Bylaws, the

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Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in compliance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such proposal or nomination shall be disregarded.

(f)    Notwithstanding the foregoing provisions of these Bylaws, a Noticing Shareholder also shall comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in these Bylaws; provided, however, that any references in these Bylaws to the Exchange Act or the rules thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Article II(3) or Article II(15).

(g)    Nothing in these Bylaws shall be deemed to affect any rights of shareholders to request inclusion of proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Notice of shareholder proposals that are, or that the Noticing Shareholder intends to be, governed by Rule 14a-8 under the Exchange Act are not governed by these Bylaws.

(16)    Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee for election or reelection as a director of the corporation by a Holder, a person must complete and deliver (in accordance with the time periods prescribed for delivery of notice under Article II(15)) to the Secretary at the principal executive offices of the corporation a written questionnaire providing the information requested about the background and qualifications of such person and the background of any other person or entity on whose behalf the nomination is being made and a written representation and agreement (the questionnaire, representation, and agreement to be in the form provided by the Secretary upon written request) that such person:

(a)    is not and will not become a party to:

i. any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the person, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation, or

ii. any Voting Commitment that could limit or interfere with the person's ability to comply, if elected as a director of the corporation, with the person's fiduciary duties under applicable law,

(b)    is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director that has not been disclosed therein, and

(c)    in the person's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality, and stock ownership and trading policies and guidelines of the corporation.

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Article III

Stock

(1)    Certificated Shares: Shares may but need not be represented by certificates. Unless otherwise provided by law, rights and obligations of shareholders are identical whether or not their shares are represented by certificates. If shares are represented by certificates, certificates of stock shall be issued in numerical order, and each shareholder shall be entitled to a certificate signed by the President, or a Vice President, and the Secretary or an Assistant Secretary, or by such other two officers as designated by the Board of Directors, and may be sealed with the seal of the corporation or a facsimile thereof. The signatures of such officers may be facsimiles if the certificate is manually signed on behalf of a transfer agent, or registered by a registrar, other than the corporation itself or an employee of the corporation. If an officer who has signed or whose facsimile signature has been placed upon such certificate ceases to be an officer before the certificate is issued, it may be issued by the corporation with the same effect as if the person were such officer on the date of issue. At a minimum, each certificate of stock shall state:

(a)    the name of the issuing corporation;

(b)    that the corporation is organized under the laws of this state;

(c)    the name of the person to whom issued;

(d)    the number and class of shares and the designation of the series, if any, which such certificate represents; and

(e)    if the corporation is authorized to issue different classes of shares or different series within a class, the designation, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series, and the Board's authority to determine variations for future series, summarized either on the front or back of the certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information upon written request and without charge. In case of any mutilation, loss or destruction of any certificate of stock, another may be issued in its place on proof of such mutilation, loss or destruction. The Board of Directors may impose conditions on such issuance and may require the giving of a satisfactory bond or indemnity to the corporation in such sum as it might determine or establish such other procedures as it deems necessary.

(2)    Uncertificated Shares:

(a)    Unless the Articles of Incorporation provide otherwise, the Board of Directors may authorize the issue of any of the corporation's classes or series of shares without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

(b)    Within a reasonable time after the issue of shares without certificates, the corporation shall send the shareholder a complete written statement of the information required on certificates as provided in Article III(1) herein.

(3)    Transfers:

(a)    Transfers of stock shall be made only upon the stock transfer books of the corporation, kept at the registered office of the corporation or at its principal place of business, or at the office of its transfer agent or registrar. The Board of Directors may, by resolution, open a share register in any state of the United States, and may employ an agent or agents to keep such register, and to record

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transfers of shares therein.

(b)    Shares of certificated stock shall be transferred by delivery of the certificates therefor, accompanied either by an assignment in writing on the back of the certificate or an assignment separate from certificate, or by a written power of attorney to sell, assign and transfer the same, signed by the holder of said certificate. No shares of certificated stock shall be transferred on the books of the corporation until the outstanding certificates therefor have been surrendered to the corporation.

(c)    Shares of uncertificated stock shall be transferred upon receipt by the corporation of a written request for transfer signed by the shareholder. Within a reasonable time after the transfer, the corporation will acknowledge to such shareholder that said shares have been transferred on the books of the corporation.

(4)    Registered Owner: Registered shareholders shall be treated by the corporation as the holders in fact of the stock standing in their respective names and the corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided below or by the laws of the State of Washington. The Board of Directors may adopt by resolution a procedure whereby a shareholder of the corporation may certify in writing to the corporation that all or a portion of the shares registered in the name of such shareholder are held for the account of a specified person or persons. The resolution shall set forth:

(a)    The classification of shareholder who may certify;

(b)    The purpose or purposes for which the certification may be made;

(c)    The form of certification and information to be contained therein;

(d)    If the certification is with respect to a record date or closing of the stock transfer books, the date within which the certification must be received by the corporation; and

(e)    Such other provisions with respect to the procedure as are deemed necessary or desirable. Upon receipt by the corporation of a certification complying with the procedure, the persons specified in the certification shall be deemed, for the purpose or purposes set forth in the certification, to be the holders of record of the number of shares specified in place of the shareholder making the certification.

(5)    Fractional Shares or Scrip: The corporation, may:

(a)    issue fractions of a share which shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation;

(b)    arrange for the disposition of fractional interests by those entitled thereto;

(c)    pay in cash the fair value of fractions of a share as of the time when those entitled to receive such shares are determined; or if certificates are being used to represent shares of such class or series,

(d)    issue scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share.

(6)    Shares of Another Corporation: Shares owned by the corporation in another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board of Directors may

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determine or, in the absence of such determination, by the President of the corporation.

Article IV

Board of Directors

(1)    Number and Powers: The management of all the affairs, property and interest of the corporation shall be vested in a Board of Directors. The Board of Directors shall consist of from six (6) to ten (10) persons, who shall be elected for a term of one year and shall hold office until the next annual meeting of the shareholders and the election and qualification of his or her successor or until the director's earlier death, resignation, removal or termination of term. Directors need not be shareholders or residents of the State of Washington. In addition to the powers and authorities by these Bylaws and the Articles of Incorporation expressly conferred upon it, the Board of Directors may exercise all such powers of the corporation and do all such lawful acts as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders.

(2)    Election of Directors: At each annual shareholders' meeting the shareholders shall elect the directors to hold office until the next annual meeting of the shareholders and until their respective successors are elected and qualified. If, for any reason, the directors shall not have been elected at any annual meeting, they may be elected at a special meeting of shareholders called for that purpose in the manner provided by these Bylaws.

Except as provided in Article IV (4) and this Article IV(2), each director shall be elected by the vote of the majority of the votes cast. A majority of votes cast means that the number of shares cast “for” a director's election exceeds the number of votes cast “against” that director. The following shall not be votes cast: (a) a share whose ballot is marked as withheld; (b) a share otherwise present at the meeting but for which there is an abstention or whose ballot is marked as “abstain”; and (c) a share otherwise present at the meeting as to which a shareholder gives no authority or direction. In a contested election, the directors shall be elected by the vote of a plurality of the votes cast. A contested election is one in which (a) on last day for delivery of a notice under Article II(15)(a), a Noticing Shareholder has complied with the requirements of Article II(15) with respect to one or more nominees; and (b) prior to the date that notice of the meeting is given, the Board of Directors has not made a determination that none of the candidacies of the Noticing Shareholder's nominees creates a bona fide election contest. For purposes of these Bylaws, it is assumed that on the last day for delivery of a notice under Article II(15)(a), there is a candidate nominated by the Board of Directors for each of the director positions to be voted on at the meeting.

The following procedures apply in a non-contested election. A nominee who does not receive a majority vote shall not be elected. Except as otherwise provided in this Article IV(2), an incumbent director who is not elected because he or she does not receive a majority vote shall continue to serve as a holdover director until the earliest of (a) 90 days after the date on which an inspector determines the voting results as to that director pursuant to RCW 23B.07.035; (b) the date on which the Board of Directors appoints an individual to fill the office held by such director, which appointment shall constitute the filling of a vacancy by the Board of Directors pursuant to Article IV(4); or (c) the date of the director's resignation. Any vacancy resulting from the non-election of a director under this Article IV(2) may be filled by the Board of Directors as provided in Article IV(4). The Nominating and Corporate Governance Committee will consider promptly whether to fill the office of a nominee failing to receive a majority vote and make a recommendation to the Board of Directors about filling the office. The Board of Directors will act on the Nominating and Corporate Governance Committee's recommendation and within ninety (90) days after the certification of the shareholder vote will disclose publicly its decision. Except as provided in the next sentence, no director who failed to receive a majority vote for election will participate in the Nominating and Corporate Governance Committee recommendation or Board of Directors decision about filling his or

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her office. If no director receives a majority vote in an uncontested election, then the incumbent directors (a) will nominate a slate of directors and hold a special meeting for the purpose of electing those nominees as soon as practicable, and (b) may in the interim fill one or more offices with the same director(s) who will continue in office until their successors are elected.

(3)    Change of Number: The number of directors may at any time be increased or decreased by the shareholders or directors at any annual or special meeting provided that no decrease shall have the effect of shortening the term of any incumbent director except as provided in Article IV(4) and Article IV(5) hereunder.

(4)    Vacancies: All vacancies in the Board of Directors, whether caused by resignation, death or otherwise, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill any vacancy shall hold office for the unexpired term of his predecessor. Any directorship to be filled by reason of an increase in the number of directors may be filled by the Board of Directors for a term of office continuing only until the next election of directors by the shareholders.

(5)    Removal of Directors: At a meeting of shareholders called expressly for that purpose, the entire Board of Directors, or any member thereof, may be removed by a vote of the holders of a majority of shares then entitled to vote at an election of such directors.

(6)    Regular Meetings: Regular meetings of the Board of Directors or any committee may be held without notice at the principal place of business of the corporation or at such other place or places, either within or without the State of Washington, as the Board of Directors or such committee, as the case may be, may from time to time designate. The annual meeting of the Board of Directors shall be held without notice immediately after the adjournment of the annual meeting of shareholders.

(7)    Special Meetings: Special meetings of the Board of Directors may be called at any time by the President or by any director, to be held at the principal place of business of the corporation or at such other place or places as the Board of Directors or the person or persons calling such meeting may from time to time designate. Notice of all special meetings of the Board of Directors shall be given to each director by at least one (1) day in advance of the meeting. Such notice need not specify the business to be transacted at, nor the purpose of, the meeting.

(8)    Notice: Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be provided to each director in the form of a record or orally, as provided below.

(a)    Oral Notice: Oral notice may be communicated in person, by telephone, wire or wireless equipment which does not transmit a facsimile of the notice, or by any electronic means that does not create a record.     

(b)    Notice Provided in a Tangible Medium: Notice may be provided in a tangible medium and may be transmitted by mail, private carrier, personal delivery, telegraph, teletype, telephone or wire or wireless equipment that transmits a facsimile of the notice.

(c)    Notice Provided in an Electronic Transmission: Notice may be provided in an electronic transmission and be electronically transmitted. Notice to directors in an electronic transmission and be electronically transmitted. Notice to shareholders in an electronic transmission is effective only with respect to directors that have consented, in the form of a record, to receive electronically transmitted notices and designated in the consent the address, location or system to which these notices may be electronically transmitted. Notice provided in an electronic transmission includes material required or permitted to accompany the notice by the Washington Business Corporation Act or other applicable

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statute or regulation. A director who has consented to receipt of electronically transmitted notices may revoke such consent by delivering a revocation to the corporation in the form of a record. The consent of a director to receive notice by electronic transmission is revoked if the corporation is unable to electronically transmit two consecutive notices given by the corporation in accordance with the consent, and this inability becomes known to the Secretary of the corporation or any other person responsible for giving the notice. The inadvertent failure by the corporation to treat this inability as a revocation does not invalidate any meeting or other action.

(d)    Posting Notice on an Electronic Network: Notice to directors who have consented to receipt of electronically transmitted notices may be provided by posting the notice on an electronic network and delivering to the director a separate record of the posting, together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.

(e)    Effectiveness of Notice: Oral notice is effective when received by the director. Notice given by wire or wireless equipment that does not transmit a facsimile of the notice or by any electronic means that does not create a record is effective when communicated to the director. Notice given by mail is effective five days after its deposit in the United States mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed to the director at his or her address shown of the records of the corporation. Notice is effective on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Notice sent to the director's address, telephone number or other number appearing on the records of the corporation is effective when dispatched by telegraph, teletype or wire or wireless equipment which transmits a facsimile of the notice. Notice given by private carrier is effective when received by the director. Notice given by personal delivery is effective when received by the director. Notice provided by electronic transmission, if in comprehensible form, is effective when it (i) is electronically transmitted to an address, location or system designated by the recipient for that purpose, or (ii) has been posted on an electronic network and a separate record of the posting has been delivered to the recipient together with comprehensible instructions regarding how to obtain access to the posting on the electronic network.

(9)    Quorum: A majority of the number of persons then serving as members of the Board of Directors shall be necessary at all meetings of the Board of Directors to constitute a meeting for the transaction of business, and the votes of a majority of those directors present at any properly called meeting at which such a quorum is present shall be sufficient to transact business.

(10)    Waiver of Notice: Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. A director may waive any notice required to be given to any director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, before or after the date and time stated in the notice and such waiver shall be equivalent to the giving of such notice. The wavier must be delivered by the director entitled to the notice to the corporation for inclusion in the minutes or filing with the corporate records. Such waiver shall be send forth either in an executed written record or, if the corporation has designated an address, location or system to which the waiver may be electronically transmitted and the waiver has been electronically transmitted to the designated address, location or system, in an executed electronically transmitted record. Neither the business to be transacted at nor the purpose of any regular or special meeting of the board or any committee designated by the board need be specified in the waiver of notice of such meeting.

(11)    Registering Dissent: A director who is present at a meeting of the Board of Directors at which action on a corporate matter is taken shall be presumed to have assented to such action unless his

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dissent shall be entered in the minutes of the meeting, or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting, before the adjournment thereof, or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

(12)    Executive and Other Committees: The Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an Executive Committee and one or more other standing or special committees. The Executive Committee shall have and may exercise all the authority of the Board of Directors, and other standing or special committees may be invested with such powers, subject to such conditions, as the Board of Directors shall see fit; provided that, notwithstanding the above, no committee of the Board of Directors shall have the authority to: (1) Declare distributions, or the issuance of shares, unless a resolution of the Board of Directors or the Bylaws or the Articles of Incorporation expressly so provide; (2) approve or recommend to shareholders actions or proposals required by law to be approved by shareholders; (3) fill vacancies on the Board of Directors or any committee thereof; (4) amend the Bylaws; (5) fix compensation of any director for serving on the Board of Directors or on any committee thereof; (6) approve a plan of merger, consolidation, or exchange of shares not requiring shareholder approval; (7) appoint other committees of the Board of Directors or the members thereof; or (8) amend the Articles of Incorporation, except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares adopted by the Board of Directors as otherwise provided by law, fix any of the relative rights and preferences of such shares. All committees so appointed shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose in the office of the corporation. The designation of any such committee and the delegation of authority thereto shall not relieve the Board of Directors, or any member thereof, of any responsibility imposed by law. Unless otherwise provided in a resolution of the Board of Directors or in rules adopted by the committee, each committee shall conduct its business as nearly as possible in the same manner as is provided in these Bylaws for the Board of Directors.

(13)    Remuneration: No stated salary shall be paid directors, as such, for their service, but by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of such Board; provided, that nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of standing or special committees may be allowed like compensation for attending committee meetings.

(14)    Loans and Guarantees: The corporation may not lend money to or guarantee the obligation of a director of the corporation unless:

(a)    The particular loan or guarantee is approved by vote of the holders of at least a majority of the votes represented by the outstanding voting shares of all classes, except the votes of the benefited director; or

(b)    The corporation's Board of Directors determines that the loan or guarantee benefits the corporation and either approves the specific loan or guarantee or a general plan authorizing loans and guarantees.

(15)    Action by Directors Without a Meeting: Any action required or which may be taken at a meeting of the directors, or of a committee thereof, may be taken without a meeting if one or more consents setting forth the action so taken are executed by all of the directors, or all of the members of the committee, either before or after the action is taken and delivered to the corporation, each of which shall

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be set forth in an executed written record or, if the corporation has designated an address, location or system to which the consent may be electronically transmitted and the consent is electronically transmitted to the designated address, location or system in an executed electronically transmitted record. Action taken by consent of the directors without a meeting is effective when the last director executed the consent, unless the consent specifies a later effective date. Any such consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.

(16)    Action of Directors by Communications Equipment: Any action required or which may be taken at a meeting of directors, or of a committee thereof, may be taken by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time.

Article V

Officers

(1)    Designations: The officers of the corporation shall be a President, one or more Vice-Presidents (one or more of whom may be Executive Vice-Presidents), a Secretary and a Treasurer, and such Assistant Secretaries and Assistant Treasurers as the Board may designate, who shall be elected for one year by the directors at their first meeting after the annual meeting of shareholders, and who shall hold office until their successors are elected and qualified. Any two or more offices may be held by the same person, except the offices of President and Secretary, except that if all of the issued and outstanding stock of the corporation is owned of record by one shareholder, one person may hold all or any combination of offices.

(2)    The President: The President shall preside at all meetings of shareholders and directors, shall have general supervision of the affairs of the corporation, and shall perform all such other duties as are incident to his office or are properly required of him by the Board of Directors.

(3)    Vice-Presidents: During the absence or disability of the President, the Executive Vice-Presidents, if any, and the Vice-Presidents in the order designated by the Board of Directors, shall exercise all the functions of the President. Each Vice-President shall have such powers and discharge such duties as may be assigned to him from time to time by the Board of Directors.

(4)    Secretary and Assistant Secretaries: The Secretary shall issue notices for all meetings, except for notices for special meetings of the shareholders and special meetings of the directors which are called by the requisite number of shareholders or directors, shall keep minutes of all meetings, shall have charge of the seal and the corporate books, and shall make such reports and perform such other duties as are incident to his office, or are properly required of him by the Board of Directors. The Assistant Secretary, or Assistant Secretaries in the order designated by the Board of Directors, shall perform all of the duties of the Secretary during the absence or disability of the Secretary, and at other times may perform such duties as are directed by the President or the Board of Directors.

(5)    The Treasurer: The Treasurer shall have the custody of all moneys and securities of the corporation and shall keep regular books of account. He shall disburse the funds of the corporation in payment of the just demands against the corporation or as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Board of Directors from time to time as may be required of him an account of all his transactions as Treasurer and of the financial condition of the corporation. He shall perform such other duties incident to his office or that are properly required of him by the Board of Directors. The Assistant Treasurer, or Assistant Treasurers in the order designated by the Board of Directors, shall perform all of the duties of the Treasurer in the absence or disability of the Treasurer, and at other times may perform such other duties as are directed by the

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President or the Board of Directors.

(6)    Delegation: In the case of absence or inability to act of any officer of the corporation and of any person herein authorized to act in his place, the Board of Directors may from time to time delegate the powers or duties of such officer to any other officer or any director or other person whom it may select.

(7)    Vacancies: Vacancies in any office arising from any cause may be filled by the Board of Directors at any regular or special meeting of the Board.

(8)    Other Officers: Directors may appoint such other officers and agents as it shall deem necessary or expedient, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

(9)    Term - Removal: The officers of the corporation shall hold office until their successors are appointed and qualify. Any officer or agent elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the whole Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

(10)    Bonds: The Board of Directors may, by resolution, require any and all of the officers to give bonds to the corporation, with sufficient surety or sureties, conditioned for the faithful performance of the duties of their respective offices, and to comply with such other conditions as may from time to time be required by the Board of Directors.

Article VI

Distributions and Finance

(1)    Distributions: The Board of Directors may authorize a distribution of money or other property to the corporation's shareholders in the form of a dividend or a purchase, redemption or other acquisition of the corporation's shares; provided that no distribution may be made if, after giving it effect, either:

(a)    the corporation would not be able to pay its debts as they become due in the usual course of business; or

(b)    The corporation's total assets would be less than the sum of its total liabilities plus the amount which would be needed to satisfy any shareholder's preferential rights in liquidation if the corporation is in the process of liquidation at the time of the authorization of the distribution. The stock transfer books may be closed for the making of distributions during such periods of not exceeding sixty days, as from time to time may be fixed by the Board of Directors. The Board of Directors, however, without closing the books of the corporation, may authorize distributions only to the holders of record at the close of business, on any business day not more than sixty days prior to the date on which the distribution is made.

(2)    Measure of Effect of Distribution: For purposes of determining whether a distribution may be authorized by the Board of Directors and paid by the corporation under Article VI(1) of these Bylaws, the effect of distribution is measured,

(a)    in the case of a distribution by purchase, redemption or other acquisition of the corporation's shares, as of the earlier of (i) the date on which the money or other property is transferred to the shareholders or the date on which the debt is incurred by the corporation; or (ii) the date on which the shareholder ceases to be a shareholder with respect to the acquired shares; and

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(b)    in any other case, (i) as of the date on which the distribution is authorized, if payment occurs within one hundred and twenty days thereafter; or (ii) the date of payment if such date occurs more than one hundred and twenty days after the date of authorization.

(3)    Reserves: Before making any distribution, there may be set aside out of the sum available to the corporation for distribution such sum or sums as the directors from time to time in their absolute discretion deem expedient as a reserve fund to meet contingencies, or for equalizing distribution, or for maintaining any property of the corporation, or for any other purpose, any earned surplus of any year not distributed as dividends shall be deemed to have been thus set apart until otherwise disposed of by the Board of Directors.

(4)    Depositories: The moneys of the corporation shall be deposited in the name of the corporation in such bank or banks or trust company or trust companies as the Board of Directors shall designate, and shall be drawn out only by check or other order for payment of money signed by such persons and in such manner as may be determined by resolution of the Board of Directors.

Article VII

Notices

Except as may otherwise be required by law, any notice to any shareholder or director may be delivered personally or by mail. If mailed, the notice shall be deemed to have been delivered when deposited in the United States mail, addressed to the addressee at his last known address in the records of the corporation, with postage thereon prepaid

Article VIII

Seal

The corporate seal of the corporation shall be in such form and bear such inscription as may be adopted by resolution of the Board of Directors, or by usage of the officers on behalf of the corporation.

Article IX

Indemnification

(1)    Right to Indemnification: Each person who was or is made a party or is threatened to be made a party to or is involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the corporation or, being or having been such a director or officer, he or she is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the corporation to the full extent permitted by applicable law as then in effect, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that no indemnification shall be provided to any such person if the corporation is prohibited by the nonexclusive provisions of the Washington Business Corporation Act or other applicable law as then in effect from

17

paying such indemnification; and provided, further, that except as provided in Article IX(2) with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if (i) such proceeding (or part thereof) was authorized by the Board of Directors of the corporation, or (ii) the corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the corporation under applicable law. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that the payment of such expenses in advance of the final disposition of a proceeding shall be made only upon delivery to the corporation of (a) a written affirmation of the director's or officer's good faith belief that the person has met the standard of conduct described in RCW 23B.08.510, and (b) an undertaking, by or on behalf of such director of officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Article or otherwise.

(2)    Right of Claimant to Bring Suit: If a claim under Section 1 of this Article is not paid in full by the corporation within sixty days after a written claim has been received by the corporation, except in the case of a claim for expenses incurred in defending a proceeding in advance of its final disposition, in which case the applicable period shall be twenty days, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, to the extent successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. The claimant shall be presumed to be entitled to indemnification under this Article upon submission of a written claim (and, in an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition, where the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the claimant is not so entitled. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its shareholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper in the circumstances nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its shareholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses shall be a defense to the action or create a presumption that the claimant is not so entitled.

(3)    Nonexclusivity of Rights: The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Articles shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation, Bylaws, agreement, vote of shareholders or disinterested directors or otherwise.

(4)    Insurance, Contracts and Funding: The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Washington Business Corporation Act. The corporation may, without further shareholder action, enter into contracts with any director or officer of the corporation in furtherance of the provisions of this Article and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Article.

(5)    Indemnification of Employees and Agents of the Corporation: The corporation may, by action of its Board of Directors from time to time, provide indemnification and pay expenses in advance

18

of the final disposition of a proceeding to employees and agents of the corporation with the same scope and effect as the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the corporation or pursuant to rights granted pursuant to, or provided by, the Washington Business Corporation Act or otherwise.

(6)Amendments: No repeal, modification or amendment of, or adoption of any provision inconsistent with this Article IX, nor, to the fullest extent permitted by applicable law, shall adversely affect any right or protection of any person granted pursuant thereto, existing at, or with respect to any events that occurred prior to, the time of such repeal, amendment, adoption or modification.

Article X

Books and Records

The corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board of Directors; and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. Any books, records, and minutes may be in written form or any other form capable of being converted into written form within a reasonable time.

Article XI

Amendments

(1)    By Shareholders: These Bylaws may be altered, amended or repealed by the affirmative vote of a majority of the voting stock issued and outstanding at any regular or special meeting of the shareholders.

(2)    By Directors: The Board of Directors shall have power to make, alter, amend and repeal the Bylaws of this corporation. However any such Bylaws, or any alteration, amendment or repeal of the Bylaws, may be changed or repealed by the holders of a majority of the stock entitled to vote at any shareholder's meeting.

(3)    Emergency Bylaws: The Board of Directors may adopt emergency Bylaws, subject to repeal or change by action of the shareholders, which shall be operative during any emergency in the conduct of the business of the corporation resulting from an attack on the United States or any nuclear or atomic disaster.

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Peter J. Rose, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Expeditors International of Washington, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/S/ PETER J. ROSE

Peter J. Rose

Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Bradley S. Powell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Expeditors International of Washington, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/S/ BRADLEY S. POWELL

Bradley S. Powell

Senior Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Expeditors International of Washington, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Peter J. Rose, Chairman and Chief Executive Officer, and Bradley S. Powell, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 8, 2012	/S/ PETER J. ROSE
	Peter J. Rose Chairman and Chief Executive Officer
August 8, 2012	/S/ BRADLEY S. POWELL
	Bradley S. Powell Senior Vice President and Chief Financial Officer

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Basic and Diluted Earnings per Share - Numerator and Denominator of the Basic and Diluted Per Share Computations for Earnings Attributable to Shareholders Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Earnings Attributable to Shareholders
Basic earnings attributable to shareholders	$ 83,955	$ 95,000	$ 160,662	$ 186,232
Diluted earnings attributable to shareholders	$ 83,955	$ 95,000	$ 160,662	$ 186,232
Weighted Average Shares
Weighted average basic shares outstanding	211,724,082	212,136,164	211,910,872	212,112,643
Effect of dilutive potential common shares	1,488,830	3,522,879	1,772,715	3,667,587
Weighted average diluted shares outstanding	213,212,912	215,659,043	213,683,587	215,780,230
Earnings Per Share
Basic earnings attributable to shareholders	$ 0.40	$ 0.45	$ 0.76	$ 0.88
Diluted earnings attributable to shareholders	$ 0.39	$ 0.44	$ 0.75	$ 0.86

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Share-Based Compensation

6 Months Ended

Jun. 30, 2012

Share-Based Compensation

Share-Based Compensation

The Company provides compensation benefits by granting stock options and employee stock purchase rights to its employees and restricted shares to its directors. On May 2, 2012, the shareholders approved the 2012 Stock Option Plan ("2012 Plan"), which made available 3,000,000 shares of the Company's common stock for purchase upon exercise of options granted under the 2012 Plan. The Company's annual grant of option awards generally takes place during the second quarter of each fiscal year. For the six months endedJune 30, 2012 and 2011, 2,822,990 and 2,998,390 options were granted, respectively. The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and none were issued in the six-month period ended June 30, 2012 and 2011.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Six months ended June 30,
	2012			2011
Dividend yield	1.30		%	0.97		%
Volatility - stock option plans	38 - 39 %			38 - 40%
Risk free interest rates	0.89 - 1.43%			2.17 - 2.84%
Expected life (years) - stock option plans	5.79 - 7.26			5.50 - 7.11
Weighted average fair value of stock options granted during the period	$	13.53		$	19.35

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2012		2011		2012		2011
Stock compensation expense	$	10,926	$	10,236	$	21,526	$	20,708
Recognized tax benefit	$	336	$	39	$	375	$	77

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Fair Value of Financial Instruments - Cash, Cash Equivalents and Short Term Investments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	$ 1,364,247	$ 1,412,915	$ 1,294,356	$ 1,225,830	$ 1,238,471	$ 1,084,465
Cost
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total cash and cash equivalents	1,364,247		1,294,356
Total	1,364,623		1,294,828
Cost | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	498,782		445,586
Corporate commercial paper	804,782		791,729
Time deposits	60,683		57,041
Cost | Short Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time deposits	376		472
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	1,364,921		1,295,001
Fair Value | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and overnight deposits	498,782		445,586
Corporate commercial paper	805,080		791,902
Time deposits	60,683		57,041
Total cash and cash equivalents	1,364,545		1,294,529
Fair Value | Short Term Investments
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Time deposits	$ 376		$ 472

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Components Of Equity - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Class of Stock [Line Items]
Date of declaration of dividends	May 02, 2012	May 04, 2011
Dividend declared per share	$ 0.28	$ 0.25
Date of dividend payment	Jun. 15, 2012	Jun. 15, 2011
Dividends payable to shareholders date of record	Jun. 01, 2012	Jun. 01, 2011

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Business Segment Information - Financial Information Regarding Company's Operations by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	$ 1,504,952	$ 1,581,368	$ 2,916,322	$ 3,042,216
Total revenues	1,504,952	1,581,368	2,916,322	3,042,216
Net revenues	453,651	472,561	900,222	926,476
Operating income	132,403	152,275	257,674	299,505
Identifiable assets at quarter end	2,992,372	2,878,004	2,992,372	2,878,004	2,866,827
Capital expenditures	9,814	17,110	26,902	38,235
Depreciation and amortization	9,670	9,257	19,215	18,431
Equity	2,050,057	1,879,150	2,050,057	1,879,150	2,010,069	1,748,154
United States
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	379,126	390,806	756,428	767,911
Transfers between geographic areas	22,504	25,973	44,712	49,938
Total revenues	401,630	416,779	801,140	817,849
Net revenues	182,291	181,603	363,766	359,537
Operating income	49,193	57,752	94,718	111,486
Identifiable assets at quarter end	1,597,543	1,411,881	1,597,543	1,411,881
Capital expenditures	5,236	3,350	14,995	7,380
Depreciation and amortization	5,756	4,926	11,378	9,911
Equity	1,295,963	1,123,482	1,295,963	1,123,482
Other North America
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	49,802	47,816	99,756	91,663
Transfers between geographic areas	2,466	2,783	4,931	5,465
Total revenues	52,268	50,599	104,687	97,128
Net revenues	25,115	21,581	47,357	42,282
Operating income	8,085	5,761	14,454	11,550
Identifiable assets at quarter end	93,374	91,678	93,374	91,678
Capital expenditures	153	448	329	608
Depreciation and amortization	181	277	368	580
Equity	51,248	52,814	51,248	52,814
Latin America
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	21,366	21,136	40,635	41,469
Transfers between geographic areas	4,791	5,220	9,870	10,841
Total revenues	26,157	26,356	50,505	52,310
Net revenues	14,724	15,157	29,559	30,260
Operating income	4,118	4,486	8,880	9,249
Identifiable assets at quarter end	52,019	58,396	52,019	58,396
Capital expenditures	400	144	655	300
Depreciation and amortization	207	264	424	533
Equity	31,903	33,784	31,903	33,784
Asia Pacific
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	780,858	816,350	1,468,928	1,544,480
Transfers between geographic areas	11,038	10,170	22,010	19,353
Total revenues	791,896	826,520	1,490,938	1,563,833
Net revenues	135,908	150,616	267,722	292,104
Operating income	51,768	61,542	99,006	120,980
Identifiable assets at quarter end	687,586	678,668	687,586	678,668
Capital expenditures	2,602	4,622	7,889	9,334
Depreciation and amortization	1,645	1,847	3,269	3,816
Equity	462,123	420,962	462,123	420,962
Europe And Africa
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	202,301	229,724	408,572	443,335
Transfers between geographic areas	9,603	11,355	19,070	22,062
Total revenues	211,904	241,079	427,642	465,397
Net revenues	71,497	78,828	143,030	152,753
Operating income	12,951	16,877	27,198	34,584
Identifiable assets at quarter end	412,752	479,852	412,752	479,852
Capital expenditures	1,111	7,881	2,053	19,587
Depreciation and amortization	1,430	1,416	2,834	2,526
Equity	144,659	184,252	144,659	184,252
Middle East And India
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	71,499	75,536	142,003	153,358
Transfers between geographic areas	4,670	4,500	9,321	8,709
Total revenues	76,169	80,036	151,324	162,067
Net revenues	24,116	24,776	48,788	49,540
Operating income	6,288	5,857	13,418	11,656
Identifiable assets at quarter end	152,754	155,503	152,754	155,503
Capital expenditures	312	665	981	1,026
Depreciation and amortization	451	527	942	1,065
Equity	94,892	94,447	94,892	94,447
Eliminations
Segment Reporting Information [Line Items]
Transfers between geographic areas	(55,072)	(60,001)	(109,914)	(116,368)
Total revenues	(55,072)	(60,001)	(109,914)	(116,368)
Identifiable assets at quarter end	(3,656)	2,026	(3,656)	2,026
Equity	$ (30,731)	$ (30,591)	$ (30,731)	$ (30,591)

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

A. Basis of Presentation

Expeditors International of Washington, Inc. (“the Company”) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, and manufacturing companies around the world.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on February 28, 2012. All dollar amounts in the notes are presented in thousands except for share data. All significant intercompany accounts and transactions have been eliminated in consolidation.

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $8,731 as of June 30, 2012 and $10,381 as of December 31, 2011. Additions and write-offs have not been significant in the periods presented.

C. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of insurance liabilities for the portion of the freight related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

D. Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-No. 05 “Presentation of Comprehensive Income”, which amends Accounting Standards Codification (ASC) Topic 220 -“Comprehensive Income”. This update is intended to increase the prominence of items reported in other comprehensive income by giving the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted the provisions of ASU 2011-No. 05, as amended by ASU 2011-No. 12, beginning in the first quarter of 2012. Accordingly, condensed consolidated statements of comprehensive income were included consecutive to the condensed consolidated statements of earnings. The adoption only had a presentation impact on the Company's consolidated financial statements.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash and cash equivalents	$ 1,364,247	$ 1,294,356
Short-term investments	376	472
Accounts receivable, less allowance for doubtful accounts of $8,731 at June 30, 2012 and $10,381 at December 31, 2011	983,131	934,752
Deferred Federal and state income taxes	10,234	10,415
Other	47,409	46,888
Total current assets	2,405,397	2,286,883
Property and equipment, less accumulated depreciation and amortization of $309,467 at June 30, 2012 and $296,481 at December 31, 2011	546,754	538,806
Goodwill and other intangibles, net	10,003	10,557
Other assets, net	30,218	30,581
Total assets	2,992,372	2,866,827
Current Liabilities:
Accounts payable	672,836	606,628
Accrued expenses, primarily salaries and related costs	184,114	169,445
Federal, state and foreign income taxes	25,948	20,072
Total current liabilities	882,898	796,145
Deferred Federal and state income taxes	59,417	60,613
Commitments and contingencies
Shareholders' Equity:
Preferred stock, none issued	0	0
Common stock, par value $.01 per share. Issued and outstanding 210,503,675 shares at June 30, 2012 and 212,003,662 shares at December 31, 2011	2,105	2,120
Additional paid-in capital	1,013	13,260
Retained earnings	2,044,682	1,991,222
Accumulated other comprehensive loss	(4,345)	(2,964)
Total shareholders' equity	2,043,455	2,003,638
Noncontrolling interest	6,602	6,431
Total equity	2,050,057	2,010,069
Total liabilities and equity	$ 2,992,372	$ 2,866,827

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Foreign currency translation adjustments, tax	$ 6,257	$ 3,014	$ 758	$ 7,855

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Share-Based Compensation - Additional Information (Details)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Employee Stock Purchase Plan [Member]	Jun. 30, 2011 Employee Stock Purchase Plan [Member]	May 04, 2012 Stock Option Plan 2012 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for option grants					3,000,000
Options granted	2,822,990	2,998,390
Issuance of shares under stock purchase plan			0	0

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Share-Based Compensation - Stock Compensation Expense and Total Related Tax Benefit Recognized (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock compensation expense	$ 10,926	$ 10,236	$ 21,526	$ 20,708
Recognized tax benefit	$ 336	$ 39	$ 375	$ 77

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Operating Activities:
Net earnings	$ 84,021	$ 95,020	$ 160,743	$ 186,227
Adjustments to reconcile net earnings to net cash from operating activities:
Provision for losses on accounts receivable	(388)	(63)	(855)	1,790
Deferred income tax (benefit) expense	(5,739)	1,601	(258)	(335)
Excess tax benefits from stock plans	(806)	(2,285)	(4,232)	(4,531)
Stock compensation expense	10,926	10,236	21,526	20,708
Depreciation and amortization	9,670	9,257	19,215	18,431
Gain on sale of assets	(65)	(21)	(130)	(51)
Other	271	311	553	618
Changes in operating assets and liabilities:
Increase in accounts receivable	(63,260)	(14,173)	(50,292)	(7,490)
Decrease in other current assets	1,642	3,896	3,566	2,481
Increase in accounts payable and accrued expenses	70,674	7,943	84,233	38,130
(Decrease) increase in income taxes payable, net	(14,132)	(33,665)	6,142	(88)
Net cash from operating activities	92,814	78,057	240,211	255,890
Investing Activities:
Decrease (increase) in short-term investments, net	15,878	(449)	98	(538)
Purchase of property and equipment	(9,814)	(17,110)	(26,902)	(38,235)
Proceeds from sale of property and equipment	141	42	253	85
Other	(232)	(64)	126	(1,506)
Net cash from investing activities	5,973	(17,581)	(26,425)	(40,194)
Financing Activities:
Proceeds from issuance of common stock	7,482	15,821	20,402	23,625
Repurchases of common stock	(84,401)	(45,690)	(106,266)	(65,274)
Excess tax benefits from stock plans	806	2,285	4,232	4,531
Dividends paid	(59,358)	(53,014)	(59,358)	(53,014)
Net cash from financing activities	(135,471)	(80,598)	(140,990)	(90,132)
Effect of exchange rate changes on cash and cash equivalents	(11,984)	7,481	(2,905)	15,801
(Decrease) increase in cash and cash equivalents	(48,668)	(12,641)	69,891	141,365
Cash and cash equivalents at beginning of period	1,412,915	1,238,471	1,294,356	1,084,465
Cash and cash equivalents at end of period	1,364,247	1,225,830	1,364,247	1,225,830
Interest and Taxes Paid:
Interest	233	13	420	17
Income taxes	$ 77,583	$ 91,035	$ 104,095	$ 117,311

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Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accounts receivable, allowance for doubtful accounts	$ 8,731	$ 10,381
Property and equipment, accumulated depreciation	$ 309,467	$ 296,481
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares issued	210,503,675	212,003,662
Common stock, shares outstanding	210,503,675	212,003,662

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Basic and Diluted Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders per share:

	Three months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	83,955	211,724,082	$	.40
Effect of dilutive potential common shares	—		1,488,830	—
Diluted earnings attributable to shareholders	$	83,955	213,212,912	$	.39
2011
Basic earnings attributable to shareholders	$	95,000	212,136,164	$	.45
Effect of dilutive potential common shares	—		3,522,879	—
Diluted earnings attributable to shareholders	$	95,000	215,659,043	$	.44

	Six months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	160,662	211,910,872	$	.76
Effect of dilutive potential common shares	—		1,772,715	—
Diluted earnings attributable to shareholders	$	160,662	213,683,587	$	.75
2011
Basic earnings attributable to shareholders	$	186,232	212,112,643	$	.88
Effect of dilutive potential common shares	—		3,667,587	—
Diluted earnings attributable to shareholders	$	186,232	215,780,230	$	.86

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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

	Three months ended		Six months ended
	June 30,		June 30,
	2012	2011	2012	2011
Shares	15,444,641	7,413,458	15,427,041	7,415,063

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 03, 2012
Entity Information [Line Items]
Entity Registrant Name	EXPEDITORS INTERNATIONAL OF WASHINGTON INC
Entity Central Index Key	0000746515
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	EXPD
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		210,542,529

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Components of Equity (Tables)

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Schedule of Components of Equity Disclosure

The components of equity for the six months ended2012 and 2011 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2011	$	2,003,638		6,431		2,010,069
Exercise of stock options	20,402			—		20,402
Shares repurchased under provisions of stock repurchase plans	(106,266		)	—		(106,266	)
Stock compensation expense	21,526			—		21,526
Tax benefits from stock plans	4,232			—		4,232
Net earnings	160,662			81		160,743
Other comprehensive income (loss)	(1,381		)	90		(1,291	)
Dividends paid ($.28 per share)	(59,358		)	—		(59,358	)
Balance at June 30, 2012	$	2,043,455		6,602		2,050,057
Balance at December 31, 2010	$	1,740,906		7,248		1,748,154
Exercise of stock options	23,625			—		23,625
Shares repurchased under provisions of stock repurchase plans	(65,274		)	—		(65,274	)
Stock compensation expense	20,708			—		20,708
Tax benefits from stock plans	4,531			—		4,531
Net earnings	186,232			(5	)	186,227
Other comprehensive income (loss)	14,334			(141	)	14,193
Dividends paid ($.25 per share)	(53,014		)	—		(53,014	)
Balance at June 30, 2011	$	1,872,048		7,102		1,879,150

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Condensed Consolidated Statements of Earnings (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Airfreight services	$ 638,541	$ 749,861	$ 1,277,453	$ 1,450,784
Ocean freight and ocean services	518,998	486,831	953,334	926,972
Customs brokerage and other services	347,413	344,676	685,535	664,460
Total revenues	1,504,952	1,581,368	2,916,322	3,042,216
Operating Expenses:
Airfreight consolidation	484,311	576,280	965,354	1,100,916
Ocean freight consolidation	413,447	377,805	745,401	717,354
Customs brokerage and other services	153,543	154,722	305,345	297,470
Salaries and related costs	249,925	249,114	496,057	486,929
Rent and occupancy costs	20,853	21,354	42,029	42,735
Depreciation and amortization	9,670	9,257	19,215	18,431
Selling and promotion	8,860	10,022	17,523	19,185
Other	31,940	30,539	67,724	59,691
Total operating expenses	1,372,549	1,429,093	2,658,648	2,742,711
Operating income	132,403	152,275	257,674	299,505
Other Income (Expense):
Interest income	3,050	2,312	6,410	4,632
Interest expense	(222)	(229)	(842)	(443)
Other, net	3,682	857	4,779	1,974
Other income, net	6,510	2,940	10,347	6,163
Earnings before income taxes	138,913	155,215	268,021	305,668
Income tax expense	54,892	60,195	107,278	119,441
Net earnings	84,021	95,020	160,743	186,227
Less net earnings (losses) attributable to the noncontrolling interest	66	20	81	(5)
Net earnings attributable to shareholders	$ 83,955	$ 95,000	$ 160,662	$ 186,232
Diluted earnings attributable to shareholders per share	$ 0.39	$ 0.44	$ 0.75	$ 0.86
Basic earnings attributable to shareholders per share	$ 0.40	$ 0.45	$ 0.76	$ 0.88
Dividends declared and paid per common share	$ 0.28	$ 0.25	$ 0.28	$ 0.25
Weighted average diluted shares outstanding	213,212,912	215,659,043	213,683,587	215,780,230
Weighted average basic shares outstanding	211,724,082	212,136,164	211,910,872	212,112,643

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2012

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

	June 30, 2012				December 31, 2011
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	498,782	$	498,782	$	445,586	$	445,586
Corporate commercial paper	804,782		805,080		791,729		791,902
Time deposits	60,683		60,683		57,041		57,041
Total cash and cash equivalents	1,364,247		1,364,545		1,294,356		1,294,529
Short-Term Investments:
Time deposits	376		376		472		472
Total	$	1,364,623	$	1,364,921	$	1,294,828	$	1,295,001

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

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Components of Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity Note [Abstract]

Components of Equity

Components of Equity

The components of equity for the six months ended2012 and 2011 are as follows:

	Shareholders’ equity			Noncontrolling interest		Total equity
Balance at December 31, 2011	$	2,003,638		6,431		2,010,069
Exercise of stock options	20,402			—		20,402
Shares repurchased under provisions of stock repurchase plans	(106,266		)	—		(106,266	)
Stock compensation expense	21,526			—		21,526
Tax benefits from stock plans	4,232			—		4,232
Net earnings	160,662			81		160,743
Other comprehensive income (loss)	(1,381		)	90		(1,291	)
Dividends paid ($.28 per share)	(59,358		)	—		(59,358	)
Balance at June 30, 2012	$	2,043,455		6,602		2,050,057
Balance at December 31, 2010	$	1,740,906		7,248		1,748,154
Exercise of stock options	23,625			—		23,625
Shares repurchased under provisions of stock repurchase plans	(65,274		)	—		(65,274	)
Stock compensation expense	20,708			—		20,708
Tax benefits from stock plans	4,531			—		4,531
Net earnings	186,232			(5	)	186,227
Other comprehensive income (loss)	14,334			(141	)	14,193
Dividends paid ($.25 per share)	(53,014		)	—		(53,014	)
Balance at June 30, 2011	$	1,872,048		7,102		1,879,150

On May 2, 2012 , the Board of Directors declared a semi-annual cash dividend of $0.28 per share payable on June 15, 2012 to shareholders of record as of June 1, 2012. On May 4, 2011, the Board of Directors declared a semi-annual cash dividend of $0.25 per share payable on June 15, 2011 to shareholders of record as of June 1, 2011.

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Share-Based Compensation - Assumptions to Estimate Fair Value of Option Grant on Date of Grant Using Black Scholes Option Pricing Model (Details) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.30%	0.97%
Risk free interest rates lower end	0.89%	2.17%
Risk free interest rates upper end	1.43%	2.84%
Weighted average fair value of stock options granted during period	$ 13.53	$ 19.35
Employee Stock Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility - stock option plans	38.00%	38.00%
Expected life - stock option plans	5 years 9 months 19 days	5 years 6 months 3 days
Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility - stock option plans	39.00%	40.00%
Expected life - stock option plans	7 years 3 months 5 days	7 years 1 month 10 days

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Fair value of Cash, Cash Equivalents and Short Term investments, by Balance Sheet Grouping

Cash, cash equivalents and short-term investments consist of the following:

	June 30, 2012				December 31, 2011
	Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	498,782	$	498,782	$	445,586	$	445,586
Corporate commercial paper	804,782		805,080		791,729		791,902
Time deposits	60,683		60,683		57,041		57,041
Total cash and cash equivalents	1,364,247		1,364,545		1,294,356		1,294,529
Short-Term Investments:
Time deposits	376		376		472		472
Total	$	1,364,623	$	1,364,921	$	1,294,828	$	1,295,001

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Basis of Presentation, Policy

A. Basis of Presentation

Expeditors International of Washington, Inc. (“the Company”) is a non-asset based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailing and wholesaling, electronics, and manufacturing companies around the world.

The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on February 28, 2012. All dollar amounts in the notes are presented in thousands except for share data. All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounts Receivable, Policy

B. Accounts Receivable

The Company maintains an allowance for doubtful accounts, which is reviewed at least monthly for estimated losses resulting from the inability of its customers to make required payments for services and advances. Additional allowances may be necessary in the future if the ability of its customers to pay deteriorates. The Company has recorded an allowance for doubtful accounts in the amounts of $8,731 as of June 30, 2012 and $10,381 as of December 31, 2011. Additions and write-offs have not been significant in the periods presented.

Use of Estimates, Policy

C. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, accrual of costs related to ancillary services the Company provides, accrual of insurance liabilities for the portion of the freight related exposure which the Company has self-insured, accrual of various tax liabilities, accrual of loss contingencies and calculation of share-based compensation expense. Actual results could differ from those estimates.

Recent Accounting Pronouncements, Policy

D. Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-No. 05 “Presentation of Comprehensive Income”, which amends Accounting Standards Codification (ASC) Topic 220 -“Comprehensive Income”. This update is intended to increase the prominence of items reported in other comprehensive income by giving the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company adopted the provisions of ASU 2011-No. 05, as amended by ASU 2011-No. 12, beginning in the first quarter of 2012. Accordingly, condensed consolidated statements of comprehensive income were included consecutive to the condensed consolidated statements of earnings. The adoption only had a presentation impact on the Company's consolidated financial statements.

Stock Plans, Policy

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s stock option, director restricted stock and employee stock purchase rights plans. The expense, adjusted for expected forfeitures, is recognized on a straight-line basis over the stock awards' vesting period. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns.

Segment Reporting, Policy

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.

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Contingencies

6 Months Ended

Jun. 30, 2012

Contingencies

Contingencies

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

On April 19, 2012, the Company received a federal grand jury subpoena from the DOJ requiring the production of documents related to the export or re-export by unaffiliated third-parties to end users in a US-embargoed country of products and/or services produced by a U.S. manufacturer. In a related matter, the Company is also responding to an administrative subpoena from the Commerce Department's Bureau of Industry and Security (BIS) requiring the production of documents pertaining to the export or re-export of US-origin goods to the same embargoed country. The Company is co-operating with the DOJ and BIS. If it is determined that the Company or one of its subsidiaries, directly or indirectly, facilitated the export or re-export of these specified products and/or services, the Company may incur fines and/or penalties which could have a material impact on the Company's results of operations and cash flows for any particular quarter or year.

Government investigations are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include substantial monetary damages and, in matters in which injunctive relief or other conduct remedies are sought, an injunction or other order relating to business conduct. Were unfavorable final outcomes to occur, the Company's results of operations and cash flows for the particular quarter or year could be materially harmed.

The Company is involved in other claims and lawsuits which arise in the ordinary course of business, none of which currently, in management's opinion, are expected to have a significant effect on the Company's operations or financial position. As of June 30, 2012, the amounts accrued for these claims and lawsuits, and the other legal matters described above, are not significant to the Company's operations or financial position. At this time the Company is unable to estimate any additional loss or range of reasonably possible loss, if any, beyond the amounts recorded, that might result from the resolution of these matters.

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Business Segment Information

6 Months Ended

Jun. 30, 2012

Business Segment Information

Business Segment Information

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

Financial information regarding the Company’s operations by geographic area are as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Three months ended June 30, 2012:
Revenues from unaffiliated customers	$	379,126	49,802	21,366	780,858	202,301	71,499	—		1,504,952
Transfers between geographic areas	22,504		2,466	4,791	11,038	9,603	4,670	(55,072	)	—
Total revenues	$	401,630	52,268	26,157	791,896	211,904	76,169	(55,072	)	1,504,952
Net revenues	$	182,291	25,115	14,724	135,908	71,497	24,116	—		453,651
Operating income	$	49,193	8,085	4,118	51,768	12,951	6,288	—		132,403
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	5,236	153	400	2,602	1,111	312	—		9,814
Depreciation and amortization	$	5,756	181	207	1,645	1,430	451	—		9,670
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Three months ended June 30, 2011:
Revenues from unaffiliated customers	$	390,806	47,816	21,136	816,350	229,724	75,536	—		1,581,368
Transfers between geographic areas	25,973		2,783	5,220	10,170	11,355	4,500	(60,001	)	—
Total revenues	$	416,779	50,599	26,356	826,520	241,079	80,036	(60,001	)	1,581,368
Net revenues	$	181,603	21,581	15,157	150,616	78,828	24,776	—		472,561
Operating income	$	57,752	5,761	4,486	61,542	16,877	5,857	—		152,275
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	3,350	448	144	4,622	7,881	665	—		17,110
Depreciation and amortization	$	4,926	277	264	1,847	1,416	527	—		9,257
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE  and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Six months ended June 30, 2012:
Revenues from unaffiliated customers	$	756,428	99,756	40,635	1,468,928	408,572	142,003	—		2,916,322
Transfers between geographic areas	44,712		4,931	9,870	22,010	19,070	9,321	(109,914	)	—
Total revenues	$	801,140	104,687	50,505	1,490,938	427,642	151,324	(109,914	)	2,916,322
Net revenues	$	363,766	47,357	29,559	267,722	143,030	48,788	—		900,222
Operating income	$	94,718	14,454	8,880	99,006	27,198	13,418	—		257,674
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	14,995	329	655	7,889	2,053	981	—		26,902
Depreciation and amortization	$	11,378	368	424	3,269	2,834	942	—		19,215
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Six months ended June 30, 2011:
Revenues from unaffiliated customers	$	767,911	91,663	41,469	1,544,480	443,335	153,358	—		3,042,216
Transfers between geographic areas	49,938		5,465	10,841	19,353	22,062	8,709	(116,368	)	—
Total revenues	$	817,849	97,128	52,310	1,563,833	465,397	162,067	(116,368	)	3,042,216
Net revenues	$	359,537	42,282	30,260	292,104	152,753	49,540	—		926,476
Operating income	$	111,486	11,550	9,249	120,980	34,584	11,656	—		299,505
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	7,380	608	300	9,334	19,587	1,026	—		38,235
Depreciation and amortization	$	9,911	580	533	3,816	2,526	1,065	—		18,431
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150

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Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Share-based Compensation [Abstract]

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

	Six months ended June 30,
	2012			2011
Dividend yield	1.30		%	0.97		%
Volatility - stock option plans	38 - 39 %			38 - 40%
Risk free interest rates	0.89 - 1.43%			2.17 - 2.84%
Expected life (years) - stock option plans	5.79 - 7.26			5.50 - 7.11
Weighted average fair value of stock options granted during the period	$	13.53		$	19.35

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Total stock compensation expense and the total related tax benefit recognized are as follows:

	Three months ended				Six months ended
	June 30,				June 30,
	2012		2011		2012		2011
Stock compensation expense	$	10,926	$	10,236	$	21,526	$	20,708
Recognized tax benefit	$	336	$	39	$	375	$	77

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Significant Accounting Policies [Line Items]
Accounts receivable, allowance for doubtful accounts	$ 8,731	$ 10,381

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Basic and Diluted Earnings per Share - Shares Excluded from Computation of Diluted earnings Per Share (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares	15,444,641	7,413,458	15,427,041	7,415,063

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Condensed Consolidated Statments of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net earnings	$ 84,021	$ 95,020	$ 160,743	$ 186,227
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax of $6,257 and $3,014 for the three months ended June 30, 2012 and 2011, and $758 and $7,855 for the six months ended June 30, 2012 and 2011	(11,453)	5,372	(1,291)	14,193
Other comprehensive income (loss)	(11,453)	5,372	(1,291)	14,193
Comprehensive income	72,568	100,392	159,452	200,420
Less comprehensive income (loss) attributable to the noncontrolling Interest	22	(109)	171	(146)
Comprehensive income attributable to shareholders	$ 72,546	$ 100,501	$ 159,281	$ 200,566

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Basic and Diluted Earnings per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders per share:

	Three months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	83,955	211,724,082	$	.40
Effect of dilutive potential common shares	—		1,488,830	—
Diluted earnings attributable to shareholders	$	83,955	213,212,912	$	.39
2011
Basic earnings attributable to shareholders	$	95,000	212,136,164	$	.45
Effect of dilutive potential common shares	—		3,522,879	—
Diluted earnings attributable to shareholders	$	95,000	215,659,043	$	.44

	Six months ended
	June 30,
(Amounts in thousands, except share and per share amounts)	Net earnings attributable to shareholders		Weighted average shares	Earnings per share
2012
Basic earnings attributable to shareholders	$	160,662	211,910,872	$	.76
Effect of dilutive potential common shares	—		1,772,715	—
Diluted earnings attributable to shareholders	$	160,662	213,683,587	$	.75
2011
Basic earnings attributable to shareholders	$	186,232	212,112,643	$	.88
Effect of dilutive potential common shares	—		3,667,587	—
Diluted earnings attributable to shareholders	$	186,232	215,780,230	$	.86

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

	Three months ended		Six months ended
	June 30,		June 30,
	2012	2011	2012	2011
Shares	15,444,641	7,413,458	15,427,041	7,415,063

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Components of Equity (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			$ 2,010,069	$ 1,748,154
Exercise of stock options			20,402	23,625
Shares repurchased under provisions of stock repurchase plans			(106,266)	(65,274)
Stock compensation expense			21,526	20,708
Tax benefits from stock plans			4,232	4,531
Net earnings	84,021	95,020	160,743	186,227
Other comprehensive income (loss)	(11,453)	5,372	(1,291)	14,193
Dividends paid			(59,358)	(53,014)
Ending Balance	2,050,057	1,879,150	2,050,057	1,879,150
Shareholders' equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			2,003,638	1,740,906
Exercise of stock options			20,402	23,625
Shares repurchased under provisions of stock repurchase plans			(106,266)	(65,274)
Stock compensation expense			21,526	20,708
Tax benefits from stock plans			4,232	4,531
Net earnings			160,662	186,232
Other comprehensive income (loss)			(1,381)	14,334
Dividends paid			(59,358)	(53,014)
Ending Balance	2,043,455	1,872,048	2,043,455	1,872,048
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance			6,431	7,248
Net earnings			81	(5)
Other comprehensive income (loss)			90	(141)
Ending Balance	$ 6,602	$ 7,102	$ 6,602	$ 7,102

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Segment Reporting Information, by Segment

Financial information regarding the Company’s operations by geographic area are as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Three months ended June 30, 2012:
Revenues from unaffiliated customers	$	379,126	49,802	21,366	780,858	202,301	71,499	—		1,504,952
Transfers between geographic areas	22,504		2,466	4,791	11,038	9,603	4,670	(55,072	)	—
Total revenues	$	401,630	52,268	26,157	791,896	211,904	76,169	(55,072	)	1,504,952
Net revenues	$	182,291	25,115	14,724	135,908	71,497	24,116	—		453,651
Operating income	$	49,193	8,085	4,118	51,768	12,951	6,288	—		132,403
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	5,236	153	400	2,602	1,111	312	—		9,814
Depreciation and amortization	$	5,756	181	207	1,645	1,430	451	—		9,670
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Three months ended June 30, 2011:
Revenues from unaffiliated customers	$	390,806	47,816	21,136	816,350	229,724	75,536	—		1,581,368
Transfers between geographic areas	25,973		2,783	5,220	10,170	11,355	4,500	(60,001	)	—
Total revenues	$	416,779	50,599	26,356	826,520	241,079	80,036	(60,001	)	1,581,368
Net revenues	$	181,603	21,581	15,157	150,616	78,828	24,776	—		472,561
Operating income	$	57,752	5,761	4,486	61,542	16,877	5,857	—		152,275
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	3,350	448	144	4,622	7,881	665	—		17,110
Depreciation and amortization	$	4,926	277	264	1,847	1,416	527	—		9,257
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	ASIA PACIFIC	EUROPE  and AFRICA	MIDDLE EAST and INDIA	ELIMI- NATIONS		CONSOLI- DATED
Six months ended June 30, 2012:
Revenues from unaffiliated customers	$	756,428	99,756	40,635	1,468,928	408,572	142,003	—		2,916,322
Transfers between geographic areas	44,712		4,931	9,870	22,010	19,070	9,321	(109,914	)	—
Total revenues	$	801,140	104,687	50,505	1,490,938	427,642	151,324	(109,914	)	2,916,322
Net revenues	$	363,766	47,357	29,559	267,722	143,030	48,788	—		900,222
Operating income	$	94,718	14,454	8,880	99,006	27,198	13,418	—		257,674
Identifiable assets at quarter end	$	1,597,543	93,374	52,019	687,586	412,752	152,754	(3,656	)	2,992,372
Capital expenditures	$	14,995	329	655	7,889	2,053	981	—		26,902
Depreciation and amortization	$	11,378	368	424	3,269	2,834	942	—		19,215
Equity	$	1,295,963	51,248	31,903	462,123	144,659	94,892	(30,731	)	2,050,057
Six months ended June 30, 2011:
Revenues from unaffiliated customers	$	767,911	91,663	41,469	1,544,480	443,335	153,358	—		3,042,216
Transfers between geographic areas	49,938		5,465	10,841	19,353	22,062	8,709	(116,368	)	—
Total revenues	$	817,849	97,128	52,310	1,563,833	465,397	162,067	(116,368	)	3,042,216
Net revenues	$	359,537	42,282	30,260	292,104	152,753	49,540	—		926,476
Operating income	$	111,486	11,550	9,249	120,980	34,584	11,656	—		299,505
Identifiable assets at quarter end	$	1,411,881	91,678	58,396	678,668	479,852	155,503	2,026		2,878,004
Capital expenditures	$	7,380	608	300	9,334	19,587	1,026	—		38,235
Depreciation and amortization	$	9,911	580	533	3,816	2,526	1,065	—		18,431
Equity	$	1,123,482	52,814	33,784	420,962	184,252	94,447	(30,591	)	1,879,150