SecProbe.io

CORRESP
1
filename1.htm

  Expeditors International

  of Washington, Inc.

  1015 Third Avenue

  12th Floor

  Seattle, WA  98104-1190

  November 4, 2005

  Tel                               206 674-3400

  Fax                           206 682-9777

  Ms. Linda Cvrkel, Branch Chief

  Securities and Exchange Commission

  Division of Corporate Finance

  Mail Stop 3561

  Washington, D.C.  20549

  Ref: Comment letter dated October 25, 2005                                                                File No. 0-13468

  Dear Ms. Cvrkel:

  We acknowledge receipt of a comment letter dated October 25,
  2005 in connection with our filing on Form 10-K for the year ended December 31,
  2004 which was filed on March 16, 2005.
  This letter will set forth the SEC comment in bold and will then
  address that comment in the same order as received.

  1.  Your critical accounting policy disclosures
  do not provide the information related to the underlying estimates and
  judgments required by FR-72 and SEC Release No. 33-8098.  In future filings please expand your
  discussion to identify the risks associated with your critical accounting
  policies, analyzing to the extent possible factors such as:

  •                      How the company arrived at the
  estimate.

  •                      How accurate the
  estimate/assumption has been in the past;

  •                      Whether the estimate/assumption
  is reasonably likely to change in the future; and

  •                      Evaluate the sensitivity to
  change of critical accounting policies.
  For example, discuss and quantify the sensitivity of the company’s
  stock compensation assumptions and the effect of reasonably possible changes
  on the company’s financial condition and operating performance.

  In order to respond to this comment, management
  reviewed the guidance set forth in FR-72 and SEC Release No. 33-8098
  with respect to estimates and judgments underlying critical accounting
  policies.  The bulleted items in this
  comment appear to come directly from the penultimate paragraph of the section entitled
  Critical

  Accounting Estimates in FR-72.
  This paragraph deals with disclosures where a company has made
  accounting estimates and assumptions where:

•                                          the nature of the estimates or assumptions is
material due to the levels of subjectivity and judgment necessary to account
for the highly uncertain matters or the susceptibility of such matters to
change; and

•                                          The impact of the estimates and assumptions
on financial condition or operating performance is material

As the definitions to the proposed rule makes
clear, not all accounting estimates rise to the level of critical
estimates.  To be a critical accounting
estimate requiring the level of disclosure set forth in the bullets to this
comment, our reading of the SEC guidance would require that the estimate be
dealing with matters that are highly uncertain or
susceptible to change and then their
impact must be material.   At the time we prepared the Form 10-K,
and today after carefully reviewing the guidance cited, we conclude that we do
not have any sort of estimate that meets this definition.  We therefore did not include the disclosures referenced
in this comment when we prepared our Form 10-K for the period ending December 31,
2004.

We do note the specific mention of accounting for
stock compensation included in the comment.
We will modify this section in future filings to address the impact
that FAS 123R will have on our results of operations.  We will also modify the balance of our
presentation to make it clear that we do not have any other critical accounting
estimates.

2.  We note your disclosures of
cash used in investing activities, including cash paid for capital
expenditures.  We also note your May 17,
2004 Form 8-K discussion of free cash flow.  Please consider supplementing your Form 10-K
disclosures to provide the amount of capital expenditures related to expansion
of your business and those related to maintaining your existing business
activities.

Our response to question 12 in our Form 8-K
dated May 17, 2004 addressed an article that had recently appeared in
a business magazine.  The thrust of that article was
that the GAAP Statement of Profit and Loss can fail to disclose a company that
is in cash flow trouble.  The author
proposes using free cash flow as a much better indicator of a troubled
company.  In order to calculate this
non-GAAP measure, the author urged readers to subtract maintenance level
capital expenditures from the published figure for cash flow from operations.

Our 8-K comments tried to make clear the fact that
we did not know how the author would classify our real estate
acquisitions.  Should these be considered
expenditures to expand our business or are they maintenance level purchases?   In the 8-K response we said:

Frankly, we really don’t know the answer, but we do
know that what we are doing makes sense. Except for real estate acquisitions
our capital expenditures in any year approximate our non-cash depreciation
expense.  These are the capital expenditures
that we would say are maintenance level capital expenditures.

We stand by this statement and remain unable to
properly classify real estate acquisitions under the matrix proposed in this
comment.

2

3.  We note your response to
question 2 [in the Form 8-K dated November 11, 2004] indicates that
when you calculate your deferred taxes, you do so using the “tax rate that the
entity eventually expects to pay.”
Please clarify for us or in your filing your accounting for current and
deferred taxes including rates that you apply. Note that only currently enacted
tax rates should be used in the calculations.

To
be completely correct our 8-K response should have read “the currently enacted
tax rate that the entity eventually expects to pay.”  We do not speculate about future tax rates
nor would we anticipate the enactment of any sort of change in tax law.

While
we believe that our original response was consistent with FAS 109, what we were
trying to highlight was the fact that currently enacted rates may be higher or
lower in future periods.  In such an
instance, it would be appropriate to establish deferred taxes at the tax rate
one would expect to pay whenever the timing differences reversed.   What was left unsaid, and what created the
comment, is the fact that we would never fabricate a tax rate.

We
can confirm that we do not currently provide deferred taxes at any tax rate other
than the currently applicable tax rate.

We
have responded as it seems to us that we are required.  We also formally acknowledge that:

•                              we are responsible for the adequacy and accuracy of the disclosures in
our filings.

•                              Staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to the
filing; and

•                              The company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Should
you have any additional comments in regard to the matters raised herein, please
feel free to contact the undersigned.

Very
truly yours,

  Expeditors International

  of
  Washington, Inc.

  /s/ R. Jordan Gates

  R. Jordan Gates

  Executive Vice-President

  and
  Chief Financial Officer

  RJG:am

3