Form 8-K FEDEX CORP For: Jun 23

 

Exhibit 99.1

 

 

 

FedEx Corp. Reports Fourth Quarter and Full-Year Results

Additional Earnings Momentum Expected During Fiscal 2023

 

MEMPHIS, Tenn., June 23, 2022 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the quarter ended May 31 (adjusted measures exclude the items listed below for the applicable fiscal year):

 

		Fiscal 2022				Fiscal 2021
		As Reported (GAAP)		Adjusted (non-GAAP)		As Reported (GAAP)		Adjusted (non-GAAP)
Revenue		$24.4 billion		$24.4 billion		$22.6 billion		$22.6 billion
Operating income		$1.92 billion		$2.23 billion		$1.80 billion		$1.97 billion
Operating margin		7.9%		9.2%		8.0%		8.7%
Net income		$558 million		$1.80 billion		$1.87 billion		$1.36 billion
Diluted EPS		$2.13		$6.87		$6.88		$5.01

 

This year’s and last year’s quarterly and full-year consolidated results have been adjusted for:

 

		Fiscal 2022				Fiscal 2021
Impact per diluted share		Fourth Quarter		Full Year		Fourth Quarter		Full Year
Mark-to-market (MTM) retirement     plans accounting adjustments		$3.83		$4.49		($3.44)		($3.33)
FedEx Ground legal matter		0.61		0.60		—		—
Business realignment costs		0.18		0.80		0.30		0.33
TNT Express integration expenses		0.12		0.39		0.18		0.60
Loss on debt extinguishment		—		—		1.09		1.11

 

“Our fiscal 2022 financial performance was a result of our team's ability to adapt to a number of unexpected challenges and is a testament to the FedEx value proposition and the execution of our long-term strategy,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “Our foundational investments have set the stage for a strong fiscal 2023. As we move forward, our focus will be on revenue quality and lowering our cost to serve. I am honored to lead our dedicated global team, who enable FedEx to lead the industry from a position of strength.”

 

Fourth Quarter Results

 

Fourth quarter operating income improved primarily due to revenue management actions, including the favorable net impact of fuel at each transportation segment, and lower variable compensation expense. These factors were partially offset by

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lower shipment demand due to slower economic growth and supply chain disruptions, as well as higher purchased transportation and wage rates.

 

Fourth quarter net income included a tax benefit of $46 million ($0.18 per diluted share) related to revisions of prior year estimates for actual tax return results.

 

FedEx Express operating results improved in the fourth quarter driven by revenue management actions, including increased fuel surcharges. Global volume softness, driven by COVID lockdowns, geopolitical uncertainty, and slower economic growth, partially offset the year-over-year improvement.

 

FedEx Ground operating results declined primarily due to higher self-insurance accruals and increased purchased transportation and wage rates. These costs were partially offset by higher revenue per package, including increased fuel surcharges. Average daily volume declined primarily due to yield management actions affecting the FedEx Ground Economy service.

 

FedEx Freight operating results sharply increased, with operating margin improving 570 basis points to 21.8%. The improved results were driven by a 28% increase in revenue per shipment from the continued focus on revenue quality and profitable growth.

 

Full-Year Results

 

For the full fiscal year, FedEx Corp. reported the following consolidated results (adjusted measures exclude the items listed above for the applicable fiscal year):

 

		Fiscal 2022				Fiscal 2021
		As Reported (GAAP)		Adjusted (non-GAAP)		As Reported (GAAP)		Adjusted (non-GAAP)
Revenue		$93.5 billion		$93.5 billion		$84.0 billion		$84.0 billion
Operating income		$6.25 billion		$6.87 billion		$5.86 billion		$6.18 billion
Operating margin		6.7%		7.3%		7.0%		7.4%
Net income		$3.83 billion		$5.50 billion		$5.23 billion		$4.89 billion
Diluted EPS		$14.33		$20.61		$19.45		$18.17

 

Capital spending for fiscal 2022 was $6.8 billion.

 

Share Repurchases

 

During fiscal 2022 the company repurchased $2.2 billion of FedEx common stock. As of May 31, 2022, $4.1 billion remained under the existing share repurchase authorization. The company expects to repurchase $1.5 billion of FedEx common stock during the first half of fiscal 2023.

 

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Outlook

 

FedEx is unable to forecast the fiscal 2023 mark-to-market (MTM) retirement plans accounting adjustments. FedEx also may incur additional costs in fiscal 2023 related to business optimization initiatives. The company is currently unable to forecast the amount and timing of these additional costs, which may impact the fiscal 2023 effective tax rate (ETR). As a result, FedEx is unable to provide a fiscal 2023 earnings per share or ETR outlook on a GAAP basis.

 

For fiscal 2023, FedEx is forecasting:

 

 

These forecasts assume the company's current economic forecast and fuel price expectations, no additional COVID-19-related business restrictions, successful completion of the planned stock repurchases, and no additional adverse geopolitical developments. FedEx’s ETR and earnings per share forecasts are based on current law and related regulations and guidance.

 

“Our continued emphasis on revenue quality drove significant improvement in our fourth quarter results,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “We expect further momentum in fiscal 2023 and beyond as we execute on our initiatives to drive increased profitability and returns.”

 

Investors Meeting

 

On June 29, 2022, the FedEx executive team will discuss its strategy and plans for the future. These plans will guide the company’s short-term and long-term priorities for maximizing value for customers, stockholders, and team members. The meeting will be streamed beginning at 8:30 a.m. CDT at investors.fedex.com, and the materials presented will be available to download.

 

Corporate Overview

 

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual

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revenue of $94 billion, the company offers integrated business solutions through operating companies competing collectively, operating collaboratively and innovating digitally under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its 550,000 employees to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit fedex.com/about.

 

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks and Statistical Books. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m.

EDT on June 23, 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.

 

The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our Securities and Exchange Commission (SEC) filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.

 

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 and underlying assumptions. Forward-looking statements include those preceded by, followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends” or similar expressions. 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; our ability to meet our labor and purchased transportation needs while controlling related costs; a significant data breach or other disruption to our technology infrastructure; the continuing effect of the COVID-19 pandemic; anti-trade measures and additional changes in international trade policies and relations; the effect of any international conflicts or terrorist activities, including as a result of the current conflict between Russia and Ukraine; our ability to successfully implement our business strategy, effectively respond to changes in market dynamics, and achieve the anticipated benefits and associated cost savings of such strategies and actions, including our ability to successfully implement our FedEx Express workforce reduction plan in Europe and to continue to transform and optimize the FedEx Express international business, particularly in Europe; damage to our reputation or loss of brand equity; changes in the business or financial soundness of the U.S. Postal Service, including strategic

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changes to its operations to reduce its reliance on the air network of FedEx Express; changes in fuel prices or currency exchange rates, including significant increases in fuel prices as a result of the ongoing conflict between Russia and Ukraine; our ability to match capacity to shifting volume levels; the effect of intense competition; an increase in self-insurance accruals and expenses; our ability to effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions and other strategic transactions; the future rate of e-commerce growth and our ability to successfully expand our e-commerce services portfolio; the timeline for recovery of passenger airline cargo capacity; evolving or new U.S. domestic or international laws and government regulations, policies, and actions; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; legal challenges or changes related to service providers engaged by FedEx Ground and the drivers providing services on their behalf; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; our ability to achieve our goal of carbon-neutral operations by 2040; and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
 

 

Media Contact: Jenny Robertson 901-434-4829

Investor Contact: Mickey Foster 901-818-7468

 

 

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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

 

 

Fourth Quarter and Full-Year Fiscal 2022 and Fiscal 2021 Results

 

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or “reported”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or “adjusted”) financial measures, including our adjusted fourth quarter and adjusted full-year fiscal 2022 and 2021 consolidated operating income and margin, net income and diluted earnings per share, and adjusted fourth quarter and adjusted full-year fiscal 2022 and 2021 FedEx Express segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following items (as applicable):

 

 

The MTM retirement plans accounting adjustments, costs related to business realignment activities in connection with the FedEx Express workforce reduction plan in Europe, costs related to a FedEx Ground legal matter, and loss on debt extinguishment are excluded from our fourth quarter and full-year fiscal 2022 and 2021 consolidated and FedEx Express segment non-GAAP financial measures, as applicable, because they are unrelated to our core operating performance and/or to assist investors with assessing trends in our underlying businesses. The charges related to accrued pre- and post-judgment interest incurred in connection with the FedEx Ground legal matter are extraordinary in nature and do not represent a recurring expense arising in our ordinary course of business.

 

We have incurred significant expenses through fiscal 2022 in connection with our integration of TNT Express. We have adjusted our fourth quarter and full-year fiscal 2022 and 2021 consolidated and FedEx Express segment financial measures to exclude TNT Express integration expenses because we generally would not incur such expenses as part of our continuing operations. The integration expenses are predominantly incremental costs directly associated with the integration of TNT Express, including professional and legal fees, salaries and employee benefits, advertising and travel expenses. Internal salaries and employee benefits are included only to the extent the individuals are assigned full-time to integration activities. The integration expenses do not include costs associated with our business realignment activities.

 

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We believe these adjusted financial measures facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company’s and our business segments’ core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.

 

Our non-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. As required by SEC rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures.

 

Fiscal 2023 Earnings Per Share and Effective Tax Rate Forecasts

 

Our fiscal 2023 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes (i) fiscal 2023 MTM retirement plans accounting adjustments, (ii) costs related to business optimization initiatives in fiscal 2023, and (iii) estimated fiscal 2023 business realignment costs. Our fiscal 2023 effective tax rate (ETR) forecast is a non-GAAP financial measure because it excludes the impact of fiscal 2023 MTM retirement plans accounting adjustments and costs related to business optimization initiatives.

 

We have provided these non-GAAP financial measures for the same reasons that were outlined above for historical non-GAAP measures. These items are excluded from our fiscal 2023 EPS and ETR forecasts, as applicable, for the same reasons described above for historical non-GAAP measures.

 

We are unable to predict the amount of the MTM retirement plans accounting adjustments, as they are significantly impacted by changes in interest rates and the financial markets. We also may incur additional costs in fiscal 2023 related to business optimization initiatives. We are currently unable to forecast the amount and timing of these additional costs, which may impact the fiscal 2023 ETR. Accordingly, such adjustments and costs are not included in our fiscal 2023 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2023 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2023 MTM retirement plans accounting adjustments and costs related to business optimization initiatives could have a material impact on our fiscal 2023 consolidated financial results and ETR.

 

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The table included below titled “Fiscal 2023 Earnings Per Share Forecast” outlines the impacts of the items that are excluded from our fiscal 2023 EPS forecast, other than the MTM retirement plans accounting adjustments and costs related to business optimization initiatives.

 

 

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Fourth Quarter Fiscal 2022

 

FedEx Corporation

 

		Operating								Income				Net				Diluted Earnings
Dollars in millions, except EPS		Income				Margin				Taxes1				Income2				Per Share
GAAP measure		$	1,924				7.9	%		$	126			$	558			$	2.13
MTM retirement plans    accounting adjustment3			—				—				315				1,003				3.83
FedEx Ground legal matter4			210				0.9	%			50				160				0.61
Business realignment costs5			60				0.2	%			14				46				0.18
TNT Express integration    expenses6			40				0.2	%			8				32				0.12
Non-GAAP measure		$	2,234				9.2	%		$	513			$	1,799			$	6.87

 

FedEx Express Segment

 

		Operating
Dollars in millions		Income				Margin
GAAP measure		$	886				7.4	%
Business realignment costs			60				0.5	%
TNT Express integration expenses			38				0.3	%
Non-GAAP measure		$	984				8.2	%

 

Full-Year Fiscal 2022

 

FedEx Corporation

 

		Operating								Income				Net				Diluted Earnings
Dollars in millions, except EPS		Income				Margin				Taxes1				Income2				Per Share
GAAP measure		$	6,245				6.7	%		$	1,070			$	3,826			$	14.33
MTM retirement plans    accounting adjustments3			—				—				379				1,199				4.49
Business realignment costs5			278				0.3	%			64				214				0.80
FedEx Ground legal matter4			210				0.2	%			50				160				0.60
TNT Express integration    expenses6			132				0.1	%			29				103				0.39
Non-GAAP measure		$	6,865				7.3	%		$	1,592			$	5,502			$	20.61

 

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Full-Year Fiscal 2022 (continued)

 

FedEx Express Segment

 

		Operating
Dollars in millions		Income				Margin7
GAAP measure		$	2,922				6.4	%
Business realignment costs			278				0.6	%
TNT Express integration expenses			115				0.3	%
Non-GAAP measure		$	3,315				7.2	%

 

Fourth Quarter Fiscal 2021

 

FedEx Corporation

 

		Operating								Income				Net				Diluted Earnings
Dollars in millions, except EPS		Income				Margin7				Taxes1				Income2				Per Share
GAAP measure		$	1,797				8.0	%		$	745			$	1,868			$	6.88
MTM retirement plans    accounting adjustment3			—				—				(292	)			(936	)			(3.44	)
Loss on debt extinguishment			—				—				96				297				1.09
Business realignment costs5			106				0.5	%			24				82				0.30
TNT Express integration    expenses6			64				0.3	%			15				49				0.18
Non-GAAP measure		$	1,967				8.7	%		$	588			$	1,360			$	5.01

 

FedEx Express Segment

 

		Operating
Dollars in millions		Income				Margin7
GAAP measure		$	737				6.5	%
Business realignment costs			106				0.9	%
TNT Express integration expenses			55				0.5	%
Non-GAAP measure		$	898				8.0	%

 

 

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Full-Year Fiscal 2021

 

FedEx Corporation

 

		Operating								Income				Net				Diluted Earnings
Dollars in millions, except EPS		Income				Margin				Taxes1				Income2				Per Share7
GAAP measure		$	5,857				7.0	%		$	1,443			$	5,231			$	19.45
MTM retirement plans    accounting adjustments3			—				—				(281	)			(895	)			(3.33	)
Loss on debt extinguishment			—				—				96				297				1.11
TNT Express integration    expenses6			210				0.3	%			48				162				0.60
Business realignment costs5			116				0.1	%			26				90				0.33
Non-GAAP measure		$	6,183				7.4	%		$	1,332			$	4,885			$	18.17

 

FedEx Express Segment

 

		Operating
Dollars in millions		Income				Margin
GAAP measure		$	2,810				6.7	%
TNT Express integration expenses			176				0.4	%
Business realignment costs			116				0.3	%
Non-GAAP measure		$	3,102				7.4	%

 

 

Fiscal 2023 Earnings Per Share Forecast

 

Dollars in millions, except EPS		Adjustments				Diluted Earnings Per Share
Earnings per diluted share before MTM     retirement plans accounting adjustments     and costs related to business     optimization initiatives (non-GAAP)8						$22.45 to $24.45
Business realignment costs		$	20
Income tax effect1			(5	)
Net of tax effect		$	15			0.05
Earnings per diluted share with    adjustments8						$22.50 to $24.50

 

 

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Notes:

 

1 – Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction.

2 – Effect of “total other (expense) income” on net income amount not shown.

3 – The MTM retirement plans accounting adjustment reflects the year-end adjustment to the valuation of the company’s defined benefit pension and other postretirement plans. For the full-year fiscal 2022 period, the MTM retirement plans accounting adjustments also include the second quarter TNT Express MTM retirement plans accounting adjustment related to a noncash loss associated with the termination of a TNT Express European pension plan and a curtailment charge related to the U.S. FedEx Freight pension plan. For the full-year fiscal 2021 period, the MTM retirement plans accounting adjustments also include the second quarter TNT Express MTM retirement plans accounting adjustment related to a noncash loss associated with amending a TNT Express European pension plan to harmonize retirement benefits.

4 – These charges were recognized at FedEx Corporation.

5 – Business realignment costs were recognized at FedEx Express.

6 – These expenses were recognized at FedEx Corporation and FedEx Express.

7 – Does not sum to total due to rounding.

8 – The MTM retirement plans accounting adjustments and costs related to business optimization initiatives, which are impracticable to calculate at this time, are excluded.

 

# # #

 

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FEDEX CORP. FINANCIAL HIGHLIGHTS

 

Fourth Quarter Fiscal 2022

(In millions, except earnings per share)

(Unaudited)

 

		Three Months Ended May 31,						Twelve Months Ended May 31,
		2022		2021		Percent Change		2022		2021		Percent Change
Revenue:
FedEx Express segment		$11,939		$11,275		6		$45,814		$42,078		9
FedEx Ground segment		8,491		8,132		4		33,232		30,496		9
FedEx Freight segment		2,756		2,235		23		9,532		7,833		22
FedEx Services segment		76		8		850		253		32		691
Other and eliminations1		1,132		915		24		4,681		3,520		33
Total Revenue		24,394		22,565		8		93,512		83,959		11
Operating Expenses2:
Salaries and employee benefits		7,903		7,868		—		32,058		30,173		6
Purchased transportation		5,946		5,630		6		24,118		21,674		11
Rentals		1,177		1,082		9		4,712		4,155		13
Depreciation and amortization		1,018		975		4		3,970		3,793		5
Fuel		1,760		936		88		5,115		2,882		77
Maintenance and repairs		842		885		(5)		3,372		3,328		1
Business realignment costs3		60		106		(43)		278		116		140
Other4		3,764		3,286		15		13,644		11,981		14
Total Operating Expenses		22,470		20,768		8		87,267		78,102		12
Operating Income (Loss):
FedEx Express segment		886		737		20		2,922		2,810		4
FedEx Ground segment		849		1,105		(23)		2,642		3,193		(17)
FedEx Freight segment		602		360		67		1,663		1,005		65
Corporate, other, and eliminations1		(413)		(405)		2		(982)		(1,151)		(15)
Total Operating Income		1,924		1,797		7		6,245		5,857		7
Other (Expense) Income:
Interest, net		(158)		(186)		(15)		(636)		(741)		(14)
Other retirement plans (expense) income5		(1,106)		1,430		(177)		(726)		1,983		(137)
Loss on debt extinguishment6		—		(393)		NM		—		(393)		NM
Other, net		24		(35)		(169)		13		(32)		(141)
Total Other (Expense) Income		(1,240)		816		(252)		(1,349)		817		(265)
Income Before Income Taxes		684		2,613		(74)		4,896		6,674		(27)
Provision for Income Taxes		126		745		(83)		1,070		1,443		(26)
Net Income		$558		$1,868		(70)		$3,826		$5,231		(27)
Diluted Earnings Per Share		$2.13		$6.88		(69)		$14.33		$19.45		(26)
Weighted Average Common and    Common Equivalent Shares		261		271		(4)		266		268		(1)
Capital Expenditures		$2,384		$1,682		42		$6,763		$5,884		15

 

1 – Includes the FedEx Office, FedEx Logistics, and FedEx Dataworks operating segments.

2 – Includes integration expenses of $40 million for the fourth quarter and $132 million for the full year of fiscal 2022 and $64 million for the fourth quarter and $210 million for the full year of fiscal 2021.

3 – Includes business realignment costs associated with the workforce reduction plan in Europe for the fourth quarter and full year of fiscal 2022 and 2021.

4 – Includes $210 million for the fourth quarter and full year of fiscal 2022 in connection with a legal matter involving FedEx Ground included in “Corporate, other, and eliminations.”

5 – Includes a ($1.3) billion MTM adjustment for the fourth quarter and full year of fiscal 2022 and a $1.2 billion MTM adjustment for the fourth quarter and full year of fiscal 2021. Also includes a ($260 million) MTM adjustment for the full year of 2022 associated with the termination of a TNT Express European pension plan and a curtailment charge related to the U.S. FedEx Freight pension plan, as well as a ($52 million) MTM adjustment for the full year of fiscal 2021 associated with amending a TNT Express European pension plan to harmonize retirement benefits.

6 – Includes a loss of debt extinguishment for the fourth quarter and full year of fiscal 2021 associated with the capital allocation strategy, which includes reducing outstanding debt.

 

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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

 

Fourth Quarter Fiscal 2022

(In millions)

(Unaudited)

 

		Year Ended May 31,
		2022				2021
ASSETS
Current Assets
Cash and cash equivalents		$	6,897			$	7,087
Receivables, less allowances			11,863				12,069
Spare parts, supplies, and fuel, less allowances			637				587
Prepaid expenses and other			968				837
Total current assets			20,365				20,580
Property and Equipment, at Cost			75,275				70,077
Less accumulated depreciation and amortization			37,184				34,325
Net property and equipment			38,091				35,752
Other Long-Term Assets
Operating lease right-of-use assets, net			16,613				15,383
Goodwill			6,544				6,992
Other assets			4,381				4,070
Total other long-term assets			27,538				26,445
		$	85,994			$	82,777
LIABILITIES AND COMMON STOCKHOLDERS'    INVESTMENT
Current Liabilities
Current portion of long-term debt		$	82			$	146
Accrued salaries and employee benefits			2,531				2,903
Accounts payable			4,030				3,841
Operating lease liabilities			2,443				2,208
Accrued expenses			5,188				4,562
Total current liabilities			14,274				13,660
Long-Term Debt, Less Current Portion			20,182				20,733
Other Long-Term Liabilities
Deferred income taxes			4,093				3,927
Pension, postretirement healthcare, and other benefit obligations			4,448				3,501
Self-insurance accruals			2,889				2,430
Operating lease liabilities			14,487				13,375
Other liabilities			682				983
Total other long-term liabilities			26,599				24,216
Commitments and Contingencies
Common Stockholders' Investment
Common stock, $0.10 par value, 800 million shares authorized			32				32
Additional paid-in capital			3,712				3,481
Retained earnings			32,782				29,817
Accumulated other comprehensive loss			(1,103	)			(732	)
Treasury stock, at cost			(10,484	)			(8,430	)
Total common stockholders' investment			24,939				24,168
		$	85,994			$	82,777

 

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FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

 

Fourth Quarter Fiscal 2022

(In millions)

(Unaudited)

 

 

		Year Ended May 31,
		2022				2021
Operating Activities:
Net income		$	3,826			$	5,231
Noncash charges:
Depreciation and amortization			3,970				3,793
Retirement plans mark-to-market adjustments			1,578				(1,176	)
Loss on extinguishment of debt			—				393
Business realignment costs			53				102
Other, net			3,524				3,664
Changes in operating assets and liabilities, net			(3,119	)			(1,872	)
Net cash provided by operating activities			9,832				10,135
Investing Activities:
Capital expenditures			(6,763	)			(5,884	)
Business acquisitions, net of cash acquired			—				(228	)
Purchase of investments			(147	)			—
Proceeds from asset dispositions and other			94				102
Net cash used in investing activities			(6,816	)			(6,010	)
Financing Activities:
Principal payments on debt			(161	)			(6,318	)
Proceeds from debt issuances			—				4,212
Proceeds from stock issuances			184				740
Dividends paid			(793	)			(686	)
Purchase of treasury stock			(2,248	)			—
Other, net			(1	)			(38	)
Cash used in financing activities			(3,019	)			(2,090	)
Effect of exchange rate changes on cash			(187	)			171
Net (decrease) increase in cash and cash equivalents			(190	)			2,206
Cash and cash equivalents at beginning of period			7,087				4,881
Cash and cash equivalents at end of period		$	6,897			$	7,087

 

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FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS

 

Fourth Quarter Fiscal 2022

(Dollars in millions)

(Unaudited)

 

 

		Three Months Ended May 31,						Twelve Months Ended May 31,
		2022		2021		Percent Change		2022		2021		Percent Change
Revenue:
Package Revenue:
U.S. Overnight Box		$2,390		$2,165		10		$9,084		$8,116		12
U.S. Overnight Envelope		536		486		10		1,971		1,791		10
Total U.S. Overnight		2,926		2,651		10		11,055		9,907		12
U.S. Deferred		1,370		1,266		8		5,330		4,984		7
Total U.S. Package Revenue		4,296		3,917		10		16,385		14,891		10
International Priority		3,193		2,894		10		12,130		10,317		18
International Economy		766		705		9		2,838		2,632		8
Total International Export    Package		3,959		3,599		10		14,968		12,949		16
International Domestic1		1,063		1,184		(10)		4,340		4,640		(6)
Total Package Revenue		9,318		8,700		7		35,693		32,480		10
Freight Revenue:
U.S.		779		833		(6)		3,041		3,325		(9)
International Priority		1,025		865		18		3,840		3,030		27
International Economy		423		420		1		1,653		1,582		4
International Airfreight		43		49		(12)		177		245		(28)
Total Freight Revenue		2,270		2,167		5		8,711		8,182		6
Other Revenue		351		408		(14)		1,410		1,416		—
Total Express Revenue		$11,939		$11,275		6		$45,814		$42,078		9
Operating Expenses:
Salaries and employee benefits		4,028		4,201		(4)		16,435		16,217		1
Purchased transportation		1,582		1,531		3		6,322		5,744		10
Rentals and landing fees		617		600		3		2,568		2,296		12
Depreciation and amortization		515		497		4		2,007		1,946		3
Fuel		1,521		789		93		4,418		2,461		80
Maintenance and repairs		513		586		(12)		2,120		2,228		(5)
Business realignment costs		60		106		(43)		278		116		140
Intercompany charges		498		540		(8)		1,997		1,996		—
Other		1,719		1,688		2		6,747		6,264		8
Total Operating Expenses		11,053		10,538		5		42,892		39,268		9
Operating Income		$886		$737		20		$2,922		$2,810		4
Operating Margin		7.4%		6.5%		0.9 pts		6.4%		6.7%		(0.3 pts)

 

1 – International Domestic revenue relates to international intra-country operations.

 

 

 

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FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS

 

Fourth Quarter Fiscal 2022

(Unaudited)

 

 

		Three Months Ended May 31,						Twelve Months Ended May 31,
		2022		2021		Percent Change		2022		2021		Percent Change
PACKAGE STATISTICS
Average Daily Package Volume (000s):
U.S. Overnight Box		1,340		1,442		(7)		1,421		1,427		—
U.S. Overnight Envelope		494		519		(5)		506		505		—
Total U.S. Overnight Package		1,834		1,961		(6)		1,927		1,932		—
U.S. Deferred		1,159		1,307		(11)		1,262		1,351		(7)
Total U.S. Domestic Package		2,993		3,268		(8)		3,189		3,283		(3)
International Priority		742		796		(7)		786		752		5
International Economy		276		288		(4)		277		284		(2)
Total International Export Package		1,018		1,084		(6)		1,063		1,036		3
International Domestic1		1,808		2,171		(17)		1,954		2,362		(17)
Total Average Daily Packages		5,819		6,523		(11)		6,206		6,681		(7)
Yield (Revenue Per Package):
U.S. Overnight Box		$27.45		$23.09		19		$25.07		$22.31		12
U.S. Overnight Envelope		16.68		14.41		16		15.28		13.90		10
U.S. Overnight Composite		24.55		20.79		18		22.50		20.11		12
U.S. Deferred		18.18		14.90		22		16.56		14.46		15
U.S. Domestic Composite		22.08		18.44		20		20.15		17.79		13
International Priority		66.22		55.89		18		60.54		53.84		12
International Economy		42.66		37.67		13		40.13		36.32		10
Total International Export Composite		59.82		51.05		17		55.21		49.03		13
International Domestic1		9.05		8.39		8		8.71		7.70		13
Composite Package Yield		$24.64		$20.51		20		$22.56		$19.06		18
FREIGHT STATISTICS
Average Daily Freight Pounds (000s):
U.S.		7,660		8,662		(12)		7,935		9,231		(14)
International Priority		6,533		6,608		(1)		6,671		6,155		8
International Economy		11,544		11,691		(1)		11,978		12,245		(2)
International Airfreight		1,050		1,280		(18)		1,160		1,469		(21)
Total Avg Daily Freight Pounds		26,787		28,241		(5)		27,744		29,100		(5)
Revenue Per Freight Pound:
U.S.		$1.57		$1.48		6		$1.50		$1.41		6
International Priority		2.41		2.02		19		2.26		1.93		17
International Economy		0.56		0.55		2		0.54		0.51		6
International Airfreight		0.63		0.59		7		0.60		0.65		(8)
Composite Freight Yield		$1.30		$1.18		10		$1.23		$1.10		12
Operating Weekdays		65		65		—		255		255		—

1 – International Domestic revenue relates to international intra-country operations.

 

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FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

 

Fourth Quarter Fiscal 2022

(Dollars in millions)

(Unaudited)

 

		Three Months Ended May 31,						Twelve Months Ended May 31,
		2022		2021		Percent Change		2022		2021		Percent Change
FINANCIAL HIGHLIGHTS
Revenue		$8,491		$8,132		4		$33,232		$30,496		9
Operating Expenses:
Salaries and employee benefits		1,683		1,577		7		7,101		6,060		17
Purchased transportation		3,791		3,602		5		15,232		14,126		8
Rentals		371		307		21		1,410		1,166		21
Depreciation and amortization		237		220		8		919		843		9
Fuel		10		6		67		32		21		52
Maintenance and repairs		151		140		8		584		496		18
Intercompany charges		494		504		(2)		1,954		1,862		5
Other		905		671		35		3,358		2,729		23
Total Operating Expenses		7,642		7,027		9		30,590		27,303		12
Operating Income		$849		$1,105		(23)		$2,642		$3,193		(17)
Operating Margin		10.0%		13.6%		(3.6 pts)		8.0%		10.5%		(2.5 pts)
OPERATING STATISTICS
Ground Commercial Operating Weekdays		65		65		—		258		256		1
Home Delivery and Economy Operating Days		91		91		—		359		359		—
Average Daily Package Volume (000s)1:
Ground Commercial		4,500		4,572		(2)		4,549		4,312		5
Home Delivery		3,981		3,968		—		4,223		4,048		4
Economy		879		1,374		(36)		1,130		1,594		(29)
Total Average Daily Package Volume		9,360		9,914		(6)		9,902		9,954		(1)
Yield (Revenue Per Package)		$11.41		$10.31		11		$10.64		$9.70		10

1 – As FedEx Ground has expanded seven-day-per-week residential delivery coverage to virtually all of the U.S. population, Ground Commercial average daily package volume is calculated on a 5-day-per-week basis, while Home Delivery and Economy average daily package volumes are calculated on a 7-day-per-week basis. Prior year statistical information has been revised to conform to the current year presentation.

 

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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

 

Fourth Quarter Fiscal 2022

(Dollars in millions)

(Unaudited)

 

		Three Months Ended May 31,						Twelve Months Ended May 31,
		2022		2021		Percent Change		2022		2021		Percent Change
FINANCIAL HIGHLIGHTS
Revenue		$2,756		$2,235		23		$9,532		$7,833		22
Operating Expenses:
Salaries and employee benefits		1,109		982		13		4,140		3,666		13
Purchased transportation		256		245		4		976		827		18
Rentals		63		57		11		245		229		7
Depreciation and amortization		103		102		1		406		417		(3)
Fuel		228		140		63		662		398		66
Maintenance and repairs		79		63		25		274		227		21
Intercompany charges		131		136		(4)		517		505		2
Other		185		150		23		649		559		16
Total Operating Expenses		2,154		1,875		15		7,869		6,828		15
Operating Income		$602		$360		67		$1,663		$1,005		65
Operating Margin		21.8%		16.1%		5.7 pts		17.4%		12.8%		4.6 pts
OPERATING STATISTICS
Operating Weekdays		65		65		—		254		253		—
Average Daily Shipments (000s):
Priority		79.6		82.7		(4)		79.1		76.2		4
Economy		33.3		34.6		(4)		32.6		32.2		1
Total Average Daily Shipments		112.9		117.3		(4)		111.7		108.4		3
Weight Per Shipment (lbs):
Priority		1,092		1,105		(1)		1,092		1,104		(1)
Economy		953		982		(3)		947		987		(4)
Composite Weight Per Shipment		1,051		1,069		(2)		1,050		1,069		(2)
Revenue/Shipment:
Priority		$357.94		$279.51		28		$320.76		$269.98		19
Economy		412.09		322.26		28		368.08		313.67		17
Composite Revenue/Shipment		$373.92		$292.12		28		$334.57		$282.95		18
Revenue/CWT:
Priority		$32.79		$25.29		30		$29.38		$24.45		20
Economy		43.26		32.83		32		38.86		31.80		22
Composite Revenue/CWT		$35.59		$27.33		30		$31.88		$26.46		20

 

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