UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 22, 2012
| FEDEX CORPORATION |
(Exact name of registrant as specified in its charter)
| Delaware | 1-15829 | 62-1721435 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 942 South Shady Grove Road, Memphis, Tennessee 38120 |
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (901) 818-7500
| FEDERAL EXPRESS CORPORATION |
(Exact name of registrant as specified in its charter)
| Delaware | 1-7806 | 71-0427007 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 3610 Hacks Cross Road, Memphis, Tennessee 38125 |
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (901) 369-3600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXPLANATORY NOTE
The information in this Report, including the exhibit, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
SECTION 2. FINANCIAL INFORMATION.
Item 2.02. Results of Operations and Financial Condition.
Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated March 22, 2012, announcing its and its wholly owned subsidiary Federal Express Corporation’s financial results for the fiscal quarter ended February 29, 2012.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is being furnished as part of this Report.
| Exhibit |
Description | |
| 99.1 | Press Release of FedEx Corporation dated March 22, 2012. | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
| FedEx Corporation | ||||||
| Date: March 22, 2012 | By: | /s/ HERBERT C. NAPPIER | ||||
| Herbert C. Nappier | ||||||
| Staff Vice President and Corporate Controller | ||||||
| Federal Express Corporation | ||||||
| Date: March 22, 2012 | By: | /s/ J. RICK BATEMAN | ||||
| J. Rick Bateman Vice President and Worldwide Controller | ||||||
3
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release of FedEx Corporation dated March 22, 2012. | |
E-1
Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Reports Strong Third Quarter Earnings Growth
FedEx Ground Operating Income Increases 43%
MEMPHIS, Tenn., March 22, 2012 ... FedEx Corp. (NYSE: FDX) today reported earnings of $1.65 per diluted share for the third quarter ended February 29, which includes a $0.10 per share reversal of a reserve associated with a legal matter at FedEx Express. Last year’s third quarter earnings were $0.73 per diluted share, which included $0.08 per diluted share in costs related to the combination of the company’s FedEx Freight and FedEx National LTL operations. Excluding these one-time items, earnings were $1.55 per diluted share in the third quarter, compared to $0.81 per diluted share a year ago.
“FedEx Corp. results were driven by improving yields, record holiday package shipping and exceptional performance at FedEx Ground,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “We expect our solid performance to continue in our fourth quarter, capping off a strong fiscal year.”
Third Quarter Results
FedEx Corp. reported the following consolidated results for the third quarter:
| • | Revenue of $10.56 billion, up 9% from $9.66 billion the previous year |
| • | Operating income of $813 million, up 107% from $393 million last year |
| • | Operating margin of 7.7%, up from 4.1% the previous year |
| • | Net income of $521 million, up 126% from $231 million a year ago |
Operating income improved due to the continued strong performance of FedEx Ground driven by higher yields and volumes, as well as significantly improved results at FedEx Freight. Operating income also reflects the positive year-over-year impact, predominately at FedEx Express, of a benefit from the timing lag that exists between when fuel prices change and when indexed fuel surcharges automatically adjust. The company also benefitted from a lower tax rate and mild winter weather.
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1
Outlook
FedEx projects earnings to be $1.75 to $2.00 per diluted share in the fourth quarter and an adjusted $6.35 to $6.60 per diluted share for fiscal 2012. This guidance assumes the current market outlook for fuel prices and moderate growth in the global economy. Including the FedEx Express legal reserve reversal, earnings are expected to be $6.43 to $6.68 per diluted share for fiscal 2012. The company reported earnings of $1.75 per diluted share in last year’s fourth quarter. The capital spending forecast for fiscal 2012 remains $4.2 billion.
“We are pleased with the improved performance at FedEx Ground and FedEx Freight during our third quarter,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We are evaluating actions to adjust our FedEx Express U.S. domestic network capacity and improve efficiency.”
FedEx Express Segment
For the third quarter, the FedEx Express segment reported:
| • | Revenue of $6.54 billion, up 8% from last year’s $6.05 billion |
| • | Operating income of $349 million, up 96% from $178 million a year ago |
| • | Operating margin of 5.3%, up from 2.9% the previous year |
U.S. domestic revenue per package grew 9% due to higher rate per pound and fuel surcharges, while average daily package volume decreased 4%. International priority (IP) revenue per package grew 5% due to higher fuel surcharges and package weights, while average daily package volume decreased 1%. IP freight average daily pounds increased 4% with revenue per pound up 2% due to higher fuel surcharges. In total, IP average daily package and freight pounds increased 2% and revenue increased 6% year-over-year.
Operating income and margin improved in the quarter, reflecting the year-over-year benefit of the fuel surcharge timing lag and the reversal of a $66 million reserve associated with a legal matter. One additional operating day benefitted this year’s results, while prior year results were negatively impacted by severe winter weather.
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2
FedEx Ground Segment
For the third quarter, the FedEx Ground segment reported:
| • | Revenue of $2.48 billion, up 14% from last year’s $2.18 billion |
| • | Operating income of $465 million, up 43% from $325 million a year ago |
| • | Operating margin of 18.8%, up from 14.9% the previous year |
FedEx Ground average daily package volume grew 5%, driven by increases in FedEx Home Delivery services as well as the business-to-business market. Revenue per package increased 8% primarily due to increased rates and higher fuel surcharges. FedEx SmartPost average daily volume increased 13% primarily due to growth in e-commerce. FedEx SmartPost revenue per package increased 5% primarily due to increased fuel surcharges.
Operating income and margin increased primarily due to increased revenue per package and volume growth. During the year, we continued to shorten transit times by accelerating various lanes throughout the U.S. and Canada, which has led to consistently high on-time service.
FedEx Freight Segment
For the third quarter, the FedEx Freight segment reported:
| • | Revenue of $1.23 billion, up 10% from last year’s $1.12 billion |
| • | Operating loss of $1 million, compared with an operating loss of $110 million a year ago |
| • | Operating margin of (0.1%), up from (9.8%) the previous year |
Less-than-truckload (LTL) yield increased 6% due to higher LTL fuel surcharges and base yield improvement. LTL average daily shipments increased 2% reflecting sequential improvement during the quarter and favorable comparisons due to severe winter weather in the prior year.
The operating results in the quarter improved significantly as a result of the positive impacts from higher yield and volume, milder winter weather, one additional business day, and ongoing improvements in operational efficiencies. In the prior year quarter, the segment incurred one-time costs of $43 million due to the January 30, 2011 combination of the FedEx Freight and FedEx National LTL operations.
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3
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $42 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.
Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and third quarter fiscal 2012 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EDT on March 22 are available on the company’s Web site at investors.fedex.com. A replay of the conference call Webcast will be posted on our Web site following the call.
Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.
Media Contact: Jess Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
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4
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
The company believes that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. Excluding the reversal of a reserve associated with a legal matter at FedEx Express from current results and the costs of the combination of FedEx Freight and FedEx National LTL operations from our prior period third quarter earnings, net of applicable incentive compensation impacts, will allow for more accurate comparisons of our third quarter operating performance. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures.
| Q3 FY12 Diluted Earnings Per Share |
Q3 FY11 Diluted Earnings Per Share |
|||||||
| Non-GAAP Measure |
$ | 1.55 | $ | 0.81 | ||||
| FedEx Freight Combination Costs |
— | (0.08 | ) | |||||
| ATA Legal Reserve Reversal |
0.10 | — | ||||||
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| GAAP Measure |
$ | 1.65 | $ | 0.73 | ||||
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Fiscal 2012 Full-Year Earnings Guidance
| FY 2012 Diluted EPS Guidance |
||||
| Non-GAAP Measure |
$ | 6.35 to $6.60 | ||
| ATA Legal Reserve Reversal |
0.08 | |||
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| GAAP Measure |
$ | 6.43 to $6.68 | ||
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* * *
5
FEDEX CORP. FINANCIAL HIGHLIGHTS
Third Quarter Fiscal 2012
(In millions, except earnings per share)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| Feb. 29, 2012 | Feb. 28, 2011 | % | Feb. 29, 2012 | Feb. 28, 2011 | % | |||||||||||||||||||
| Revenue: |
||||||||||||||||||||||||
| FedEx Express segment |
$ | 6,543 | $ | 6,049 | 8 | % | $ | 19,718 | $ | 17,953 | 10 | % | ||||||||||||
| FedEx Ground segment |
2,480 | 2,184 | 14 | % | 7,097 | 6,222 | 14 | % | ||||||||||||||||
| FedEx Freight segment |
1,234 | 1,123 | 10 | % | 3,887 | 3,602 | 8 | % | ||||||||||||||||
| FedEx Services segment |
401 | 397 | 1 | % | 1,239 | 1,246 | (1 | %) | ||||||||||||||||
| Other & eliminations |
(94 | ) | (90 | ) | NM | (269 | ) | (271 | ) | NM | ||||||||||||||
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|||||||||||||||||
| Total Revenue |
10,564 | 9,663 | 9 | % | 31,672 | 28,752 | 10 | % | ||||||||||||||||
| Operating Expenses: |
||||||||||||||||||||||||
| Salaries and employee benefits |
4,021 | 3,828 | 5 | % | 12,007 | 11,410 | 5 | % | ||||||||||||||||
| Purchased transportation |
1,619 | 1,446 | 12 | % | 4,713 | 4,163 | 13 | % | ||||||||||||||||
| Rentals and landing fees |
628 | 621 | 1 | % | 1,871 | 1,850 | 1 | % | ||||||||||||||||
| Depreciation and amortization |
543 | 493 | 10 | % | 1,570 | 1,474 | 7 | % | ||||||||||||||||
| Fuel |
1,233 | 1,049 | 18 | % | 3,677 | 2,874 | 28 | % | ||||||||||||||||
| Maintenance and repairs |
456 | 480 | (5 | %) | 1,518 | 1,470 | 3 | % | ||||||||||||||||
| Impairment and other charges |
— | 21 | NM | — | 88 | NM | ||||||||||||||||||
| Other |
1,251 | 1,332 | (6 | %) | 3,986 | 3,933 | 1 | % | ||||||||||||||||
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|||||||||||||||||
| Total Operating Expenses |
9,751 | 9,270 | 5 | % | 29,342 | 27,262 | 8 | % | ||||||||||||||||
| Operating Income (Loss): |
||||||||||||||||||||||||
| FedEx Express segment |
349 | 178 | 96 | % | 979 | 799 | 23 | % | ||||||||||||||||
| FedEx Ground segment |
465 | 325 | 43 | % | 1,270 | 908 | 40 | % | ||||||||||||||||
| FedEx Freight segment |
(1 | ) | (110 | ) | 99 | % | 81 | (217 | ) | NM | ||||||||||||||
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| Total Operating Income |
813 | 393 | 107 | % | 2,330 | 1,490 | 56 | % | ||||||||||||||||
| Other Expense: |
||||||||||||||||||||||||
| Interest, net |
(12 | ) | (24 | ) | (50 | %) | (30 | ) | (65 | ) | (54 | %) | ||||||||||||
| Other, net |
(9 | ) | (9 | ) | — | (7 | ) | (25 | ) | (72 | %) | |||||||||||||
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|||||||||||||||||
| Total Other Expense |
(21 | ) | (33 | ) | (36 | %) | (37 | ) | (90 | ) | (59 | %) | ||||||||||||
| Pretax Income |
792 | 360 | 120 | % | 2,293 | 1,400 | 64 | % | ||||||||||||||||
| Provision for Income Taxes |
271 | 129 | 110 | % | 811 | 506 | 60 | % | ||||||||||||||||
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| Net Income |
$ | 521 | $ | 231 | 126 | % | $ | 1,482 | $ | 894 | 66 | % | ||||||||||||
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| Diluted Earnings Per Share |
$ | 1.65 | $ | 0.73 | 126 | % | $ | 4.67 | $ | 2.82 | 66 | % | ||||||||||||
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| Weighted Average Common and Common Equivalent Shares |
316 | 317 | — | 317 | 316 | — | ||||||||||||||||||
| Capital Expenditures |
$ | 729 | $ | 643 | 13 | % | $ | 2,946 | $ | 2,703 | 9 | % | ||||||||||||
6
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
Third Quarter Fiscal 2012
(In millions)
| Feb. 29, 2012 (Unaudited) |
May 31, 2011 | |||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 2,040 | $ | 2,328 | ||||
| Receivables, less allowances |
4,635 | 4,581 | ||||||
| Spare parts, supplies and fuel, less allowances |
447 | 437 | ||||||
| Deferred income taxes |
617 | 610 | ||||||
| Prepaid expenses and other |
459 | 329 | ||||||
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| Total current assets |
8,198 | 8,285 | ||||||
| Property and Equipment, at Cost |
35,933 | 33,686 | ||||||
| Less accumulated depreciation and amortization |
19,090 | 18,143 | ||||||
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| Net property and equipment |
16,843 | 15,543 | ||||||
| Other Long-Term Assets |
||||||||
| Goodwill |
2,419 | 2,326 | ||||||
| Other assets |
1,292 | 1,231 | ||||||
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| Total other long-term assets |
3,711 | 3,557 | ||||||
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| $ | 28,752 | $ | 27,385 | |||||
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| LIABILITIES AND STOCKHOLDERS’ INVESTMENT |
||||||||
| Current Liabilities |
||||||||
| Current portion of long-term debt |
$ | 419 | $ | 18 | ||||
| Accrued salaries and employee benefits |
1,444 | 1,268 | ||||||
| Accounts payable |
1,687 | 1,702 | ||||||
| Accrued expenses |
1,602 | 1,894 | ||||||
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| Total current liabilities |
5,152 | 4,882 | ||||||
| Long-Term Debt, Less Current Portion |
1,251 | 1,667 | ||||||
| Other Long-Term Liabilities |
||||||||
| Deferred income taxes |
2,030 | 1,336 | ||||||
| Pension, postretirement healthcare and other benefit obligations |
1,654 | 2,124 | ||||||
| Self-insurance accruals |
960 | 977 | ||||||
| Deferred lease obligations |
750 | 779 | ||||||
| Deferred gains, principally related to aircraft transactions |
244 | 246 | ||||||
| Other liabilities |
142 | 154 | ||||||
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| Total other long-term liabilities |
5,780 | 5,616 | ||||||
| Commitments and Contingencies |
||||||||
| Common Stockholders’ Investment |
||||||||
| Common stock, $0.10 par value, 800 million shares authorized |
32 | 32 | ||||||
| Additional paid-in capital |
2,574 | 2,484 | ||||||
| Retained earnings |
16,584 | 15,266 | ||||||
| Accumulated other comprehensive loss |
(2,483 | ) | (2,550 | ) | ||||
| Treasury stock, at cost |
(138 | ) | (12 | ) | ||||
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| Total common stockholders’ investment |
16,569 | 15,220 | ||||||
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| $ | 28,752 | $ | 27,385 | |||||
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7
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Third Quarter Fiscal 2012
(In millions)
(Unaudited)
| Nine Months Ended | ||||||||
| Feb. 29, 2012 | Feb. 28, 2011 | |||||||
| Operating Activities: |
||||||||
| Net income |
$ | 1,482 | $ | 894 | ||||
| Noncash charges: |
||||||||
| Depreciation and amortization |
1,570 | 1,474 | ||||||
| Other, net |
900 | 662 | ||||||
| Changes in operating assets and liabilities, net |
(935 | ) | (573 | ) | ||||
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| Net cash provided by operating activities |
3,017 | 2,457 | ||||||
| Investing Activities: |
||||||||
| Capital expenditures |
(2,946 | ) | (2,703 | ) | ||||
| Business acquisitions, net of cash acquired |
(114 | ) | (96 | ) | ||||
| Proceeds from asset dispositions and other |
20 | 15 | ||||||
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| Net cash used in investing activities |
(3,040 | ) | (2,784 | ) | ||||
| Financing Activities: |
||||||||
| Principal payments on debt |
(28 | ) | (262 | ) | ||||
| Dividends paid |
(123 | ) | (113 | ) | ||||
| Purchase of treasury stock |
(197 | ) | — | |||||
| Other, net |
90 | 75 | ||||||
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|||||
| Net cash used in financing activities |
(258 | ) | (300 | ) | ||||
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|
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| Effect of exchange rate changes on cash |
(7 | ) | 34 | |||||
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|
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| Net decrease in cash and cash equivalents |
(288 | ) | (593 | ) | ||||
| Cash and cash equivalents at beginning of period |
2,328 | 1,952 | ||||||
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| Cash and cash equivalents at end of period |
$ | 2,040 | $ | 1,359 | ||||
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8
FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
| FINANCIAL HIGHLIGHTS |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| Feb. 29, 2012 | Feb. 28, 2011 | % | Feb. 29, 2012 | Feb. 28, 2011 | % | |||||||||||||||||||
| Revenue |
$ | 6,543 | $ | 6,049 | 8 | % | $ | 19,718 | $ | 17,953 | 10 | % | ||||||||||||
| Operating Expenses: |
||||||||||||||||||||||||
| Salaries and employee benefits |
2,410 | 2,321 | 4 | % | 7,200 | 6,832 | 5 | % | ||||||||||||||||
| Purchased transportation |
449 | 386 | 16 | % | 1,346 | 1,143 | 18 | % | ||||||||||||||||
| Rentals and landing fees |
425 | 424 | — | 1,269 | 1,254 | 1 | % | |||||||||||||||||
| Depreciation and amortization |
299 | 267 | 12 | % | 869 | 787 | 10 | % | ||||||||||||||||
| Fuel |
1,078 | 898 | 20 | % | 3,194 | 2,454 | 30 | % | ||||||||||||||||
| Maintenance and repairs |
303 | 330 | (8 | %) | 1,037 | 1,002 | 3 | % | ||||||||||||||||
| Intercompany charges |
547 | 498 | 10 | % | 1,643 | 1,523 | 8 | % | ||||||||||||||||
| Other1 |
683 | 747 | (9 | %) | 2,181 | 2,159 | 1 | % | ||||||||||||||||
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| Total Operating Expenses |
6,194 | 5,871 | 6 | % | 18,739 | 17,154 | 9 | % | ||||||||||||||||
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| Operating Income |
$ | 349 | $ | 178 | 96 | % | $ | 979 | $ | 799 | 23 | % | ||||||||||||
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| Operating Margin |
5.3 | % | 2.9 | % | 2.4 | pts | 5.0 | % | 4.5 | % | 0.5 | pts | ||||||||||||
| OPERATING STATISTICS2 |
||||||||||||||||||||||||
| Operating Weekdays |
63 | 62 | 2 | % | 191 | 190 | 1 | % | ||||||||||||||||
| AVG DAILY VOLUME / POUNDS |
||||||||||||||||||||||||
| Average Daily Package Volume (000s): |
||||||||||||||||||||||||
| U.S. Overnight Box |
1,171 | 1,218 | (4 | %) | 1,158 | 1,194 | (3 | %) | ||||||||||||||||
| U.S. Overnight Envelope |
581 | 631 | (8 | %) | 586 | 627 | (7 | %) | ||||||||||||||||
| U.S. Deferred |
923 | 952 | (3 | %) | 863 | 887 | (3 | %) | ||||||||||||||||
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| Total U.S. Domestic Package |
2,675 | 2,801 | (4 | %) | 2,607 | 2,708 | (4 | %) | ||||||||||||||||
| International Priority3 |
552 | 558 | (1 | %) | 555 | 569 | (2 | %) | ||||||||||||||||
| International Domestic4 |
508 | 337 | 51 | % | 493 | 338 | 46 | % | ||||||||||||||||
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| Total Average Daily Packages |
3,735 | 3,696 | 1 | % | 3,655 | 3,615 | 1 | % | ||||||||||||||||
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| Average Daily Freight Pounds (000s): |
||||||||||||||||||||||||
| U.S. |
8,104 | 8,000 | 1 | % | 7,561 | 7,447 | 2 | % | ||||||||||||||||
| International Priority3 |
3,257 | 3,131 | 4 | % | 3,279 | 3,158 | 4 | % | ||||||||||||||||
| International Airfreight |
1,169 | 1,262 | (7 | %) | 1,182 | 1,248 | (5 | %) | ||||||||||||||||
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| Total Avg Daily Freight Pounds |
12,530 | 12,393 | 1 | % | 12,022 | 11,853 | 1 | % | ||||||||||||||||
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| YIELD |
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| Revenue Per Package: |
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| U.S. Overnight Box |
$ | 21.93 | $ | 20.05 | 9 | % | $ | 22.08 | $ | 19.81 | 11 | % | ||||||||||||
| U.S. Overnight Envelope |
11.65 | 10.87 | 7 | % | 11.59 | 10.68 | 9 | % | ||||||||||||||||
| U.S. Deferred |
13.62 | 12.60 | 8 | % | 13.67 | 12.29 | 11 | % | ||||||||||||||||
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| Total U.S. Domestic Package |
16.83 | 15.45 | 9 | % | 16.94 | 15.23 | 11 | % | ||||||||||||||||
| International Priority3 |
59.78 | 57.07 | 5 | % | 60.88 | 55.06 | 11 | % | ||||||||||||||||
| International Domestic4 |
6.57 | 7.54 | (13 | %) | 6.73 | 7.33 | (8 | %) | ||||||||||||||||
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| Composite Package Yield |
$ | 21.79 | $ | 21.01 | 4 | % | $ | 22.23 | $ | 20.77 | 7 | % | ||||||||||||
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| Revenue Per Freight Pound: |
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| U.S. |
$ | 1.27 | $ | 1.14 | 11 | % | $ | 1.29 | $ | 1.14 | 13 | % | ||||||||||||
| International Priority3 |
2.16 | 2.12 | 2 | % | 2.18 | 2.09 | 4 | % | ||||||||||||||||
| International Airfreight |
1.04 | 0.88 | 18 | % | 1.01 | 0.88 | 15 | % | ||||||||||||||||
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| Composite Freight Yield |
$ | 1.48 | $ | 1.36 | 9 | % | $ | 1.51 | $ | 1.37 | 10 | % | ||||||||||||
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| 1 | - Current year includes the reversal of a $66 million reserve for a legal matter. |
| 2 | - Operating statistics include only the operations of FedEx Express. |
| 3 | - International Priority includes FedEx International Priority® and FedEx International Economy® packages and envelopes. |
| 4 | - International Domestic includes the operations of acquisitions in India (February 2011) and Mexico (July 2011). |
9
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| Feb. 29, 2012 | Feb. 28, 2011 | % | Feb. 29, 2012 | Feb. 28, 2011 | % | |||||||||||||||||||
| FINANCIAL HIGHLIGHTS |
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| Revenues: |
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| FedEx Ground |
$ | 2,259 | $ | 2,001 | 13 | % | $ | 6,518 | $ | 5,756 | 13 | % | ||||||||||||
| FedEx SmartPost |
221 | 183 | 21 | % | 579 | 466 | 24 | % | ||||||||||||||||
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| Total Revenues |
2,480 | 2,184 | 14 | % | 7,097 | 6,222 | 14 | % | ||||||||||||||||
| Operating Expenses: |
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| Salaries and employee benefits |
369 | 329 | 12 | % | 1,082 | 954 | 13 | % | ||||||||||||||||
| Purchased transportation |
995 | 911 | 9 | % | 2,814 | 2,538 | 11 | % | ||||||||||||||||
| Rentals |
74 | 68 | 9 | % | 212 | 197 | 8 | % | ||||||||||||||||
| Depreciation and amortization |
102 | 84 | 21 | % | 289 | 249 | 16 | % | ||||||||||||||||
| Fuel |
4 | 5 | NM | 11 | 9 | NM | ||||||||||||||||||
| Maintenance and repairs |
43 | 40 | 8 | % | 130 | 126 | 3 | % | ||||||||||||||||
| Intercompany charges |
246 | 221 | 11 | % | 732 | 669 | 9 | % | ||||||||||||||||
| Other |
182 | 201 | (9 | %) | 557 | 572 | (3 | %) | ||||||||||||||||
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| Total Operating Expenses |
2,015 | 1,859 | 8 | % | 5,827 | 5,314 | 10 | % | ||||||||||||||||
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| Operating Income |
$ | 465 | $ | 325 | 43 | % | $ | 1,270 | $ | 908 | 40 | % | ||||||||||||
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| Operating Margin |
18.8 | % | 14.9 | % | 3.9 | pts | 17.9 | % | 14.6 | % | 3.3 | pts | ||||||||||||
| OPERATING STATISTICS |
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| Operating Weekdays |
63 | 63 | — | 191 | 191 | — | ||||||||||||||||||
| Average Daily Package Volume (000s) |
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| FedEx Ground |
4,072 | 3,882 | 5 | % | 3,922 | 3,751 | 5 | % | ||||||||||||||||
| FedEx SmartPost |
1,960 | 1,736 | 13 | % | 1,701 | 1,433 | 19 | % | ||||||||||||||||
| Yield (Revenue Per Package) |
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| FedEx Ground |
$ | 8.79 | $ | 8.16 | 8 | % | $ | 8.68 | $ | 8.01 | 8 | % | ||||||||||||
| FedEx SmartPost |
$ | 1.79 | $ | 1.70 | 5 | % | $ | 1.78 | $ | 1.70 | 5 | % | ||||||||||||
10
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| Feb. 29, 2012 | Feb. 28, 2011 | % | Feb. 29, 2012 | Feb. 28, 2011 | % | |||||||||||||||||||
| FINANCIAL HIGHLIGHTS |
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| Revenue |
$ | 1,234 | $ | 1,123 | 10 | % | $ | 3,887 | $ | 3,602 | 8 | % | ||||||||||||
| Operating Expenses: |
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| Salaries and employee benefits |
566 | 562 | 1 | % | 1,721 | 1,746 | (1 | %) | ||||||||||||||||
| Purchased transportation |
201 | 178 | 13 | % | 629 | 567 | 11 | % | ||||||||||||||||
| Rentals |
29 | 29 | — | 86 | 94 | (9 | %) | |||||||||||||||||
| Depreciation and amortization |
47 | 48 | (2 | %) | 135 | 158 | (15 | %) | ||||||||||||||||
| Fuel |
149 | 145 | 3 | % | 470 | 409 | 15 | % | ||||||||||||||||
| Maintenance and repairs |
45 | 44 | 2 | % | 143 | 135 | 6 | % | ||||||||||||||||
| Intercompany charges |
107 | 106 | 1 | % | 324 | 323 | — | |||||||||||||||||
| Impairment and other charges1 |
— | 21 | NM | — | 88 | NM | ||||||||||||||||||
| Other |
91 | 100 | (9 | %) | 298 | 299 | — | |||||||||||||||||
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| Total Operating Expenses |
1,235 | 1,233 | — | 3,806 | 3,819 | — | ||||||||||||||||||
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| Operating Income (Loss) |
$ | (1 | ) | $ | (110 | ) | 99 | % | $ | 81 | $ | (217 | ) | NM | ||||||||||
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| Operating Margin |
(0.1 | %) | (9.8 | %) | 9.7 | pts | 2.1 | % | (6.0 | %) | 8.1 | pts | ||||||||||||
| OPERATING STATISTICS |
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| LTL Operating Weekdays |
63 | 62 | 2 | % | 190 | 189 | 1 | % | ||||||||||||||||
| LTL Shipments Per Day (000s) |
79.8 | 78.3 | 2 | % | 83.8 | 86.6 | (3 | %) | ||||||||||||||||
| Weight Per LTL Shipment (lbs) |
1,157 | 1,151 | 1 | % | 1,154 | 1,133 | 2 | % | ||||||||||||||||
| LTL Revenue/CWT |
$ | 19.70 | $ | 18.66 | 6 | % | $ | 19.59 | $ | 18.04 | 9 | % | ||||||||||||
| 1 | - Previous year includes charges associated with the combination of FedEx Freight and FedEx National LTL operations. |
11