EX-99.1 2 d505277dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

FedEx Corp. Reports Third Quarter Earnings

Additional Cost-Cutting Actions Under Way

MEMPHIS, Tenn., March 20, 2013 … FedEx Corp. (NYSE: FDX) today reported earnings of $1.23 per diluted share for the third quarter ended February 28, excluding business realignment costs totaling $47 million primarily related to the company’s voluntary buyout program for eligible U.S. officers and managing directors. Including this year’s realignment costs, third quarter earnings were $1.13 per diluted share.

Last year’s third quarter earnings were $1.55 per diluted share, excluding a $0.10 per share reversal of a reserve associated with a legal matter at FedEx Express. Including last year’s reserve reversal, earnings were $1.65 per diluted share.

“The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “In response, beginning April 1, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks. We are currently assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft. We remain focused on our strategic cost reduction programs, which are ramping up and on track.”

Third Quarter Results

FedEx Corp. reported the following consolidated results for the third quarter:

 

   

Revenue of $11.0 billion, up 4% from $10.6 billion the previous year

 

   

Operating income of $589 million, down 28% from $813 million last year

 

   

Operating margin of 5.4%, down from 7.7% the previous year

 

   

Net income of $361 million, down 31% from $521 million a year ago

 

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As discussed above, the quarter’s results reflect the decline in profitability at FedEx Express due to the accelerating demand shift toward lower-yielding international services and lower international export yields. The quarter’s results were also negatively impacted by the business realignment costs noted earlier and by fewer operating days in each transportation segment.

Outlook

FedEx projects earnings to be an adjusted $1.90 to $2.10 per diluted share in the fourth quarter and an adjusted $6.00 to $6.20 per diluted share for fiscal 2013 before charges related to the company’s business realignment. Costs of the benefits provided under the voluntary buyout program will be recognized in the period that eligible employees accept their offers, predominantly in the fourth fiscal quarter. Including the third quarter costs, the company now expects the fiscal 2013 pretax cost of the voluntary buyout program to range from approximately $450 million to $550 million in cash expenditures, or $0.89 to $1.09 per diluted share, with some additional costs expected in fiscal 2014. Actual costs will depend on employee acceptance rates. Including the business realignment costs, earnings are expected to be $0.94 to $1.34 per diluted share in the fourth quarter and $4.91 to $5.31 per diluted share for fiscal 2013. This guidance assumes the current market outlook for fuel prices. The capital spending forecast for fiscal 2013 is now $3.6 billion, compared to $3.9 billion in the company’s previous forecast.

In last year’s fourth quarter, the company reported earnings of $1.99 per diluted share, excluding a $0.26 per diluted share non-cash aircraft impairment charge at FedEx Express. Including this charge, earnings were $1.73 per diluted share.

“Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment,” said Alan B. Graf Jr., FedEx Corp. executive vice president and chief financial officer. “We expect these international revenue trends to continue. We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods.”

“In early February, a number of officers and managing directors, primarily at FedEx Services and FedEx Express, accepted voluntary buyouts, and on

 

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February 15, thousands more team members were notified of their eligibility for the buyout program. This program is one of the first steps in a process that will help FedEx Express achieve necessary cost structure reductions and improved efficiency. In addition to continued profit improvements in the base businesses at FedEx Ground and FedEx Freight, our profit improvement programs are targeting annual profitability improvement at FedEx Express of $1.6 billion by the end of fiscal 2016, from the fiscal year 2013 base business. Collectively, these initiatives are expected to increase margins, improve cash flows and increase our competitiveness,” said Graf.

Stock Repurchase Program Authorization Increase

The FedEx Corp. board of directors has authorized the repurchase of up to 10 million shares of FedEx Corp. common stock. These shares augment the remaining 188 thousand shares authorized for purchase under existing share repurchase programs. It is expected that the additional share authorization will primarily be utilized to offset equity compensation dilution over the next several years. Purchases may be made in the open market and in negotiated or block transactions. FedEx had 317 million shares outstanding as of February 28, 2013.

FedEx Express Segment

For the third quarter, the FedEx Express segment reported:

 

   

Revenue of $6.70 billion, up 2% from last year’s $6.54 billion

 

   

Operating income of $118 million, down 66% from $349 million a year ago

 

   

Operating margin of 1.8%, down from 5.3% the previous year

Revenue increased due to this year’s business acquisitions and growth at FedEx Trade Networks, while core express revenue was constrained by continued demand shift toward lower-yielding international services. U.S. domestic revenue per package grew 1% as higher rate per pound and weight per package were offset by lower fuel surcharges, while average daily package volume increased 1%. Higher growth in international deferred services continued, with FedEx International Economy® volume growing 12%, while FedEx International Priority® volume increased 2% during the quarter. International export revenue per package fell 3% due to the demand shift to lower-yielding international services, lower rates and lower fuel surcharges.

Operating income and margin were significantly lower due to the demand shift to lower-yielding international services, the prior year reversal of a $66 million

 

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reserve associated with a legal matter, the negative impact of one fewer operating day, higher pension cost and increased depreciation expense. Costs associated with the business realignment program also negatively impacted operating results by $34 million.

FedEx Ground Segment

For the third quarter, the FedEx Ground segment reported:

 

   

Revenue of $2.75 billion, up 11% from last year’s $2.48 billion

 

   

Operating income of $467 million, up from $465 million a year ago

 

   

Operating margin of 17.0%, down from 18.8% the previous year

FedEx Ground average daily volume grew 10% in the third quarter, as growth in both FedEx Home Delivery and business-to-business services was driven by market share gains. Revenue per package increased 1% due to increased rates and higher residential surcharges, partially offset by lower package weights and fuel surcharge. FedEx SmartPost average daily volume increased 26% primarily due to growth in e-commerce. FedEx SmartPost net revenue per package was down 1% due to higher postage rates, partially offset by rate increases.

Operating income increased slightly, while operating margin was lower, as the benefit of higher volume and revenue per package was mostly offset by higher purchased transportation, a favorable self-insurance adjustment in the prior year, higher network expansion costs, one fewer operating day and intercompany charges of $9 million associated with the business realignment program.

FedEx Freight Segment

For the third quarter, the FedEx Freight segment reported:

 

   

Revenue of $1.24 billion, up from last year’s $1.23 billion

 

   

Operating income of $4 million, compared with an operating loss of $1 million a year ago

 

   

Operating margin of 0.3%, up from (0.1%) the previous year

Less-than-truckload (LTL) yield increased 2% due to FedEx Freight Economy base yield improvement. LTL average daily shipments increased 1% due to higher customer demand for the FedEx Freight Economy service offering in all lengths of haul.

 

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Even though the quarter had two fewer operating days, operating income and margin increased due to higher yield, volume growth and continued operational efficiencies within the company’s integrated network.

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 $44 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 2013 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 20 are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our website 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, the employee acceptance rate of the voluntary buyout offers, 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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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

The company believes that meaningful analysis of our historical and expected 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 last year’s results, net of applicable incentive compensation impacts, and costs associated with the company’s business realignment initiative will allow for more accurate comparisons of our third quarter and expected 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 FY2013
Diluted

Earnings  Per
Share
    Q3 FY2012
Diluted

Earnings  Per
Share
     Q4 FY2012
Diluted

Earnings  Per
Share
 

Non-GAAP Measure

   $ 1.23      $ 1.55       $ 1.99   

Business Realignment Costs

     (0.09     —           —     

Legal Reserve Reversal

     —          0.10         —     

Aircraft Impairment

     —          —           (0.26
  

 

 

   

 

 

    

 

 

 

GAAP Measure

   $ 1.13   $ 1.65       $ 1.73   
  

 

 

   

 

 

    

 

 

 

*  Does not sum to total due to rounding

       

Fiscal 2013 Earnings Guidance

 

     Q4 FY2013 Diluted
EPS Guidance
     FY2013 Diluted
EPS Guidance
 

Non-GAAP Measure

   $ 1.90 to $2.10       $ 6.00 to $6.20   

Business Realignment Costs

     0.96 to   0.76         1.09 to   0.89   
  

 

 

    

 

 

 

GAAP Measure

   $ 0.94 to $1.34       $ 4.91 to $5.31   
  

 

 

    

 

 

 

* * *

 

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FEDEX CORP. FINANCIAL HIGHLIGHTS

Third Quarter Fiscal 2013

(In millions, except earnings per share)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     Feb. 28, 2013     Feb. 29, 2012     %     Feb. 28, 2013     Feb. 29, 2012     %  

Revenue:

            

FedEx Express segment

   $ 6,704      $ 6,543        2   $ 20,194      $ 19,718        2

FedEx Ground segment

     2,747        2,480        11     7,802        7,097        10

FedEx Freight segment

     1,237        1,234        —          4,013        3,887        3

FedEx Services segment

     380        401        (5 %)      1,174        1,239        (5 %) 

Other & eliminations

     (115     (94     NM        (331     (269     NM   
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Revenue

     10,953        10,564        4     32,852        31,672        4

Operating Expenses:

            

Salaries and employee benefits

     4,150        4,021        3     12,378        12,007        3

Purchased transportation

     1,871        1,619        16     5,411        4,713        15

Rentals and landing fees

     640        628        2     1,888        1,871        1

Depreciation and amortization

     599        543        10     1,764        1,570        12

Fuel

     1,215        1,233        (1 %)      3,588        3,677        (2 %) 

Maintenance and repairs

     424        456        (7 %)      1,477        1,518        (3 %) 

Business realignment costs

     47        —          NM        64        —          NM   

Other

     1,418        1,251        13     4,233        3,986        6
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Expenses

     10,364        9,751        6     30,803        29,342        5

Operating Income (Loss):

            

FedEx Express segment

     118        349        (66 %)      555        979        (43 %) 

FedEx Ground segment

     467        465        —          1,324        1,270        4

FedEx Freight segment

     4        (1     NM        170        81        NM   
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Income

     589        813        (28 %)      2,049        2,330        (12 %) 

Other Expense:

            

Interest, net

     (9     (12     (25 %)      (37     (30     23

Other, net

     (16     (9     78     (29     (7     NM   
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Other Expense

     (25     (21     19     (66     (37     78

Pretax Income

     564        792        (29 %)      1,983        2,293        (14 %) 

Provision for Income Taxes

     203        271        (25 %)      725        811        (11 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Net Income

   $ 361      $ 521        (31 %)    $ 1,258      $ 1,482        (15 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Diluted Earnings Per Share

   $ 1.13      $ 1.65        (32 %)    $ 3.97      $ 4.67        (15 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Weighted Average Common and Common Equivalent Shares

     317        316        —          316        317        —     

Capital Expenditures

   $ 542      $ 729        (26 %)    $ 2,430      $ 2,946        (18 %) 


FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

Third Quarter Fiscal 2013

(In millions)

 

     Feb. 28, 2013        
     (Unaudited)     May 31, 2012  

ASSETS

    

Current Assets

    

Cash and cash equivalents

   $ 3,372      $ 2,843   

Receivables, less allowances

     4,950        4,704   

Spare parts, supplies and fuel, less allowances

     460        440   

Deferred income taxes

     510        533   

Prepaid expenses and other

     453        536   
  

 

 

   

 

 

 

Total current assets

     9,745        9,056   

Property and Equipment, at Cost

     38,114        36,164   

Less accumulated depreciation and amortization

     19,786        18,916   
  

 

 

   

 

 

 

Net property and equipment

     18,328        17,248   

Other Long-Term Assets

    

Goodwill

     2,765        2,387   

Other assets

     992        1,212   
  

 

 

   

 

 

 

Total other long-term assets

     3,757        3,599   
  

 

 

   

 

 

 
   $ 31,830      $ 29,903   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ INVESTMENT

    

Current Liabilities

    

Current portion of long-term debt

   $ 251      $ 417   

Accrued salaries and employee benefits

     1,395        1,635   

Accounts payable

     1,730        1,613   

Accrued expenses

     1,723        1,709   
  

 

 

   

 

 

 

Total current liabilities

     5,099        5,374   

Long-Term Debt, Less Current Portion

     1,991        1,250   

Other Long-Term Liabilities

    

Deferred income taxes

     1,139        836   

Pension, postretirement healthcare and other benefit obligations

     5,361        5,582   

Self-insurance accruals

     989        963   

Deferred lease obligations

     766        784   

Deferred gains, principally related to aircraft transactions

     234        251   

Other liabilities

     139        136   
  

 

 

   

 

 

 

Total other long-term liabilities

     8,628        8,552   

Commitments and Contingencies

    

Common Stockholders’ Investment

    

Common stock, $0.10 par value, 800 million shares authorized

     32        32   

Additional paid-in capital

     2,623        2,595   

Retained earnings

     18,216        17,134   

Accumulated other comprehensive loss

     (4,710     (4,953

Treasury stock, at cost

     (49     (81
  

 

 

   

 

 

 

Total common stockholders’ investment

     16,112        14,727   
  

 

 

   

 

 

 
   $ 31,830      $ 29,903   
  

 

 

   

 

 

 


FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

Third Quarter Fiscal 2013

(In millions)

(Unaudited)

 

     Nine Months Ended  
     Feb. 28, 2013     Feb. 29, 2012  

Operating Activities:

    

Net income

   $ 1,258      $ 1,482   

Noncash charges:

    

Depreciation and amortization

     1,764        1,570   

Other, net

     710        900   

Changes in operating assets and liabilities, net

     (756     (935
  

 

 

   

 

 

 

Net cash provided by operating activities

     2,976        3,017   

Investing Activities:

    

Capital expenditures

     (2,430     (2,946

Business acquisitions, net of cash acquired

     (483     (114

Proceeds from asset dispositions and other

     45        20   
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,868     (3,040

Financing Activities:

    

Principal payments on debt

     (417     (28

Proceeds from debt issuance

     991        —     

Dividends paid

     (132     (123

Purchase of treasury stock

     (246     (197

Other, net

     221        90   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     417        (258
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     4        (7
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     529        (288

Cash and cash equivalents at beginning of period

     2,843        2,328   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 3,372      $ 2,040   
  

 

 

   

 

 

 


FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS

Third Quarter Fiscal 2013

(Dollars in millions)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     Feb. 28, 2013     Feb. 29, 2012     %     Feb. 28, 2013     Feb. 29, 2012     %  

Revenues:

            

Package Revenue:

            

U.S. Overnight Box

   $ 1,609      $ 1,619        (1 %)    $ 4,822      $ 4,882        (1 %) 

U.S. Overnight Envelope

     413        426        (3 %)      1,252        1,298        (4 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Total U.S. Overnight

     2,022        2,045        (1 %)      6,074        6,180        (2 %) 

U.S. Deferred

     812        792        3     2,246        2,254        —     
  

 

 

   

 

 

     

 

 

   

 

 

   

Total U.S. Package Revenue

     2,834        2,837        —          8,320        8,434        (1 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

International Priority

     1,567        1,625        (4 %)      4,906        5,093        (4 %) 

International Economy

     491        454        8     1,492        1,355        10
  

 

 

   

 

 

     

 

 

   

 

 

   

Total International Export Package

     2,058        2,079        (1 %)      6,398        6,448        (1 %) 

International Domestic1

     342        210        63     1,035        634        63
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Package Revenue

     5,234        5,126        2     15,753        15,516        2

Freight Revenue:

            

U.S.

     668        647        3     1,923        1,866        3

International Priority

     384        443        (13 %)      1,269        1,362        (7 %) 

International Airfreight

     64        77        (17 %)      215        228        (6 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Freight Revenue

     1,116        1,167        (4 %)      3,407        3,456        (1 %) 

Other Revenue

     354        250        42     1,034        746        39
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Express Revenue

   $ 6,704      $ 6,543        2   $ 20,194      $ 19,718        2

Operating Expenses:

            

Salaries and employee benefits

     2,539        2,410        5     7,500        7,200        4

Purchased transportation

     583        449        30     1,728        1,346        28

Rentals and landing fees

     429        425        1     1,262        1,269        (1 %) 

Depreciation and amortization

     334        299        12     993        869        14

Fuel

     1,066        1,078        (1 %)      3,126        3,194        (2 %) 

Maintenance and repairs

     262        303        (14 %)      983        1,037        (5 %) 

Business realignment costs2

     13        —          NM        14        —          NM   

Intercompany charges3

     548        547        —          1,620        1,643        (1 %) 

Other4

     812        683        19     2,413        2,181        11
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Expenses

     6,586        6,194        6     19,639        18,739        5
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income

   $ 118      $ 349        (66 %)    $ 555      $ 979        (43 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Margin

     1.8     5.3     (3.5  pts)      2.7     5.0     (2.3  pts) 

 

1 - International Domestic includes international intra-country express operations, including recent acquisitions in Mexico (July 2011), Poland (June 2012), France (July 2012) and Brazil (July 2012).
2 - Includes predominantly severance costs associated with the company’s voluntary buyout program.
3 - Includes allocations of $21 million in the third quarter of 2013 and $31 million year-to-date for business realignment costs.
4 - The third quarter of 2012 includes the reversal of a $66 million legal reserve.


FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS

Third Quarter Fiscal 2013

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     Feb. 28, 2013      Feb. 29, 2012      %     Feb. 28, 2013      Feb. 29, 2012      %  

PACKAGE STATISTICS

                

Average Daily Package Volume (000s):

                

U.S. Overnight Box

     1,176         1,171         —          1,135         1,158         (2 %) 

U.S. Overnight Envelope

     569         581         (2 %)      570         586         (3 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total U.S. Overnight Package

     1,745         1,752         —          1,705         1,744         (2 %) 

U.S. Deferred

     944         923         2     843         863         (2 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total U.S. Domestic Package

     2,689         2,675         1     2,548         2,607         (2 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

International Priority

     420         413         2     424         421         1

International Economy

     155         139         12     152         134         13
  

 

 

    

 

 

      

 

 

    

 

 

    

Total International Export Package

     575         552         4     576         555         4

International Domestic1

     781         508         54     781         493         58
  

 

 

    

 

 

      

 

 

    

 

 

    

Total Average Daily Packages

     4,045         3,735         8     3,905         3,655         7
  

 

 

    

 

 

      

 

 

    

 

 

    

Yield (Revenue Per Package):

                

U.S. Overnight Box

   $ 22.08       $ 21.93         1   $ 22.35       $ 22.08         1

U.S. Overnight Envelope

     11.69         11.65         —          11.57         11.59         —     
  

 

 

    

 

 

      

 

 

    

 

 

    

U.S. Overnight Composite

     18.69         18.53         1     18.75         18.59         1

U.S. Deferred

     13.87         13.62         2     14.02         13.67         3
  

 

 

    

 

 

      

 

 

    

 

 

    

U.S. Domestic Composite

     17.00         16.83         1     17.18         16.94         1
  

 

 

    

 

 

      

 

 

    

 

 

    

International Priority

     60.25         62.49         (4 %)      60.93         63.44         (4 %) 

International Economy

     51.03         51.74         (1 %)      51.72         52.86         (2 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total International Export Composite

     57.76         59.78         (3 %)      58.50         60.88         (4 %) 

International Domestic1

     7.06         6.57         7     6.98         6.73         4
  

 

 

    

 

 

      

 

 

    

 

 

    

Composite Package Yield

   $ 20.87       $ 21.79         (4 %)    $ 21.23       $ 22.23         (4 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

FREIGHT STATISTICS

                

Average Daily Freight Pounds (000s):

                

U.S.

     8,324         8,104         3     7,697         7,561         2

International Priority

     2,894         3,257         (11 %)      3,098         3,279         (6 %) 

International Airfreight

     1,035         1,169         (11 %)      1,102         1,182         (7 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total Avg Daily Freight Pounds

     12,253         12,530         (2 %)      11,897         12,022         (1 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Revenue Per Freight Pound:

                

U.S.

   $ 1.30       $ 1.27         2   $ 1.31       $ 1.29         2

International Priority

     2.14         2.16         (1 %)      2.15         2.18         (1 %) 

International Airfreight

     0.99         1.04         (5 %)      1.03         1.01         2
  

 

 

    

 

 

      

 

 

    

 

 

    

Composite Freight Yield

   $ 1.47       $ 1.48         (1 %)    $ 1.51       $ 1.51         —     
  

 

 

    

 

 

      

 

 

    

 

 

    

Operating Weekdays

     62         63         (2 %)      190         191         (1 %) 

 

1 - International Domestic includes international intra-country express operations, including recent acquisitions in Mexico (July 2011), Poland (June 2012), France (July 2012) and Brazil (July 2012).


FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2013

(Dollars in millions)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     Feb. 28, 2013     Feb. 29, 2012     %     Feb. 28, 2013     Feb. 29, 2012     %  

FINANCIAL HIGHLIGHTS

            

Revenues:

            

FedEx Ground

   $ 2,480      $ 2,259        10   $ 7,112      $ 6,518        9

FedEx SmartPost

     267        221        21     690        579        19
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Revenues

     2,747        2,480        11     7,802        7,097        10

Operating Expenses:

            

Salaries and employee benefits

     405        369        10     1,178        1,082        9

Purchased transportation

     1,121        995        13     3,124        2,814        11

Rentals

     86        74        16     245        212        16

Depreciation and amortization

     111        102        9     324        289        12

Fuel

     6        4        50     13        11        18

Maintenance and repairs

     48        43        12     140        130        8

Intercompany charges

     270        246        10     794        732        8

Other

     233        182        28     660        557        18
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Expenses

     2,280        2,015        13     6,478        5,827        11
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income

   $ 467      $ 465        —        $ 1,324      $ 1,270        4
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Margin

     17.0     18.8     (1.8  pts)      17.0     17.9     (0.9  pts) 

OPERATING STATISTICS

            

Operating Weekdays

     62        63        (2 %)      190        191        (1 %) 

Average Daily Package Volume (000s)

            

FedEx Ground

     4,476        4,072        10     4,214        3,922        7

FedEx SmartPost

     2,477        1,960        26     2,051        1,701        21

Yield (Revenue Per Package)

            

FedEx Ground

   $ 8.92      $ 8.79        1   $ 8.86      $ 8.68        2

FedEx SmartPost

   $ 1.77      $ 1.79        (1 %)    $ 1.78      $ 1.78        —     


FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

Third Quarter Fiscal 2013

(Dollars in millions)

(Unaudited)

 

     Three Months Ended     Nine Months Ended  
     Feb. 28, 2013     Feb. 29, 2012     %     Feb. 28, 2013     Feb. 29, 2012     %  

FINANCIAL HIGHLIGHTS

            

Revenue

   $ 1,237      $ 1,234        —        $ 4,013      $ 3,887        3

Operating Expenses:

            

Salaries and employee benefits

     562        566        (1 %)      1,750        1,721        2

Purchased transportation

     197        201        (2 %)      647        629        3

Rentals

     30        29        3     88        86        2

Depreciation and amortization

     55        47        17     160        135        19

Fuel

     142        149        (5 %)      447        470        (5 %) 

Maintenance and repairs

     45        45        —          142        143        (1 %) 

Business realignment costs

     1        —          NM        1        —          NM   

Intercompany charges

     109        107        2     330        324        2

Other

     92        91        1     278        298        (7 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Operating Expenses

     1,233        1,235        —          3,843        3,806        1
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Income (Loss)

   $ 4      ($ 1     NM      $ 170      $ 81        NM   
  

 

 

   

 

 

     

 

 

   

 

 

   

Operating Margin

     0.3     (0.1 %)      0.4  pts      4.2     2.1     2.1  pts 

OPERATING STATISTICS

            

LTL Operating Weekdays

     61        63        (3 %)      188        190        (1 %) 

Average Daily LTL Shipments (000s)

            

Priority

     55.3        56.4        (2 %)      59.5        59.9        (1 %) 

Economy

     25.2        23.4        8     26.2        23.9        10
  

 

 

   

 

 

     

 

 

   

 

 

   

Total Average Daily LTL Shipments

     80.5        79.8        1     85.7        83.8        2

Weight Per LTL Shipment (lbs)

            

Priority

     1,250        1,212        3     1,226        1,193        3

Economy

     989        1,025        (4 %)      993        1,055        (6 %) 
  

 

 

   

 

 

     

 

 

   

 

 

   

Composite Weight Per LTL Shipment

     1,168        1,157        1     1,154        1,154        —     

LTL Yield (Revenue/CWT)

            

Priority

   $ 17.87      $ 18.10        (1 %)    $ 17.91      $ 18.14        (1 %) 

Economy

     26.17        24.28        8     25.92        23.70        9
  

 

 

   

 

 

     

 

 

   

 

 

   

Composite LTL Yield

   $ 20.10      $ 19.70        2   $ 20.03      $ 19.59        2