Summary of Expeditors International of Washington (NYSE: EXPD) Update - February 23, 2026 Company Overview - **Company**: Expeditors International of Washington (NYSE: EXPD) - **Event**: Webinar focused on the Supreme Court's IEEPA tariff decision Key Points and Arguments Supreme Court Decision on IEEPA - The Supreme Court ruled in a 6 to 3 decision that the International Emergency Economic Powers Act (IEEPA) does not grant the president authority to impose tariffs on U.S. imports [24][25] - Chief Justice John Roberts stated that the statute lacks explicit language allowing the president to impose tariffs for unusual or extraordinary threats [25] - The ruling invalidates all IEEPA-based tariffs, including those against imports from China, Hong Kong, Mexico, and Canada related to fentanyl emergencies [27][28] Immediate Impact of the Ruling - The president issued an executive order terminating IEEPA tariffs effective February 24, 2026, at 12:01 A.M. Eastern Standard Time [28] - Customs and Border Protection (CBP) is expected to update their systems to reflect the termination of these tariffs [29] - The Supreme Court did not address the issue of refunds for tariffs already paid, leaving uncertainty regarding the return of approximately $175 billion collected under IEEPA tariffs [30][58] New Tariff Measures - Following the Supreme Court decision, President Trump announced a 10% global tariff under Section 122 of the Trade Act of 1974, with potential increases to 15% [31][32] - Section 122 allows the president to impose tariffs for a maximum of 150 days to address serious balance of payments deficits [38] - The administration plans to launch new Section 301 investigations targeting major trading partners, particularly China and the European Union [34][54] International and Congressional Reactions - International partners have largely taken a low-key response to the Supreme Court decision, with Canada and Mexico welcoming the ruling [46][48] - Congress expressed satisfaction with the ruling affirming its authority over tariffs, with potential oversight and hearings expected rather than new legislation [49][50] - A new piece of legislation was introduced to require CBP to complete refunds of duties within 90 days, though its progress is uncertain [50] Legal and Operational Considerations for Importers - Importers are advised to preserve their rights to IEEPA duty refunds and assess their exposure to new duty rates [60][72] - Timely filing of protests is crucial for liquidated entries, with a 180-day window for filing [65][66] - Importers should monitor the status of their entries and be prepared for potential legal challenges regarding the new tariffs [41][56] Conclusion - The Supreme Court's decision marks a significant shift in tariff authority, impacting numerous existing tariffs and introducing new measures under different legal frameworks. Importers must navigate these changes carefully to protect their interests and ensure compliance with evolving regulations.

Financial Data and Key Metrics Changes - Adjusted EBITDA in Q2 improved by $271 million from the prior quarter, driven by higher shipment volumes and operational efficiency [5] - The average selling price increased by $35 per ton to $10.15, while unit costs decreased by $15 per ton [21][22] - The company ended the quarter with $2.7 billion in liquidity and no near-term maturities, with net debt on a downward trajectory [24] Business Line Data and Key Metrics Changes - Shipment volumes reached 4.3 million tons, a 150,000 ton increase from the prior quarter, allowing for more efficient mill operations [21] - The stainless steel business saw a $150 million investment in a bright annealing line, expected to improve quality and productivity [16][18] Market Data and Key Metrics Changes - The Section 232 tariffs have positively impacted both the steel and automotive sectors, with flat rolled steel imports and light vehicle imports hitting multi-year lows [6][7] - The company is positioned to benefit from the resurgence in automotive production in the U.S., as OEMs are moving production back from Mexico and Asia [70][71] Company Strategy and Development Direction - The company is focused on cost-cutting and optimizing its footprint, with expectations for further cost reductions in Q3 and Q4 [5][32] - Cleveland Cliffs is exploring potential sales of non-core assets to unlock value for shareholders, with JPMorgan engaged as an advisor [25][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro trends aligning favorably for the company, anticipating a better second half of 2025 compared to the first half [28] - The management highlighted the need for a new Federal Reserve Chairman to lower interest rates, which would benefit the automotive sector [12][13] Other Important Information - The company is vertically integrated, relying on American iron ore and coal, which differentiates it from competitors who depend on imported feedstock [15] - The company has seen a significant reduction in working capital due to inventory reductions, particularly in raw materials [22][40] Q&A Session Summary Question: How should we think about the cadence of cost reductions from here? - Management expects costs to decrease by another $20 per ton from Q2 to Q3, with further reductions anticipated in Q4 [32] Question: What are the expectations for free cash flow generation in the second half? - Free cash flow is expected to improve as working capital continues to be released, with a history of generating over $1 billion in free cash flow annually [40][41] Question: Can you provide insights on automotive volumes in Q2? - Automotive volumes are growing as OEMs are moving production back to the U.S. and reducing reliance on imports [70][71] Question: What is the outlook for average selling prices in Q3? - Average selling prices are expected to remain stable, with shipments similar to Q2 levels [53][56] Question: Can you elaborate on the non-core assets that may be sold? - The company is open to selling non-core assets that could generate significant cash inflow, which would be used for debt reduction [96][104]