Form 8-K FEDEX CORP For: Sep 17

September 17, 2019 4:25 PM

Exhibit 99.1

FedEx Corp. Reports First Quarter Earnings

MEMPHIS, Tenn., September 17, 2019 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the first quarter ended August 31 (adjusted measures exclude TNT Express integration expenses as described below):

 

     Fiscal 2020     Fiscal 2019  
Dollars in millions, except EPS    As Reported
(GAAP)
    Adjusted
(non-GAAP)
    As Reported
(GAAP)
    Adjusted
(non-GAAP)
 

Revenue

   $ 17,048     $ 17,048     $ 17,052     $ 17,052  

Operating income

   $ 977     $ 1,048     $ 1,071     $ 1,192  

Operating margin

     5.7     6.1     6.3     7.0

Net income

   $ 745     $ 800     $ 835     $ 933  

Diluted EPS

   $ 2.84     $ 3.05     $ 3.10     $ 3.46  

This year’s and last year’s quarterly consolidated results have been adjusted for TNT Express integration expenses of $71 million ($0.21 per diluted share) for this year and $121 million ($0.36 per diluted share) for last year.

“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “Despite these challenges, we are positioning FedEx to leverage future growth opportunities as we continue the integration of TNT Express, enhance FedEx Ground residential delivery capabilities and modernize the FedEx Express air fleet and hub operations.”

Operating results declined primarily due to weakening global economic conditions, increased costs to expand service offerings and continued mix shift to lower-yielding services. The impact of one fewer operating day and the loss of business from a large customer also negatively impacted results. These factors were partially offset by lower variable incentive compensation expenses, revenue growth at FedEx Ground and increased yields at FedEx Freight.

 

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2020 Rate Increases

As previously announced, effective January 6, 2020, FedEx Express, FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%, while FedEx Freight shipping rates will increase by an average of 5.9%. Details related to these and additional changes to rates and surcharges are available at fedex.com/rates2020.

Outlook

FedEx is unable to forecast the fiscal 2020 year-end mark-to-market (MTM) retirement plan accounting adjustment. As a result, the company is unable to provide a fiscal 2020 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.

FedEx is lowering its fiscal 2020 earnings forecast as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 forecast in June. The company’s revised outlook also reflects increased FedEx Ground costs and August’s loss of FedEx Ground business from a large customer. In addition, the FedEx ETR is now expected to be 24% to 26% before the year-end MTM retirement plan accounting adjustment, due to lower-than-expected earnings in certain non-U.S. jurisdictions.

FedEx now forecasts earnings of $10.00 to $12.00 per diluted share before the year-end MTM retirement plan accounting adjustment, and earnings of $11.00 to $13.00 per diluted share before the year-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses. The capital spending forecast remains $5.9 billion.

“FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions to the global FedEx Express air network to better match capacity with demand,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “However, we are continuing to make strategic investments to improve our capabilities and efficiency, which we expect will drive long-term increases in earnings, margins, cash flows and returns.”

These forecasts assume moderate U.S. economic growth, the company’s current fuel price expectations, no further weakening in international economic conditions from the company’s current forecast and no additional adverse developments in international trade policies and relations. FedEx’s ETR and earnings per share outlooks are based on the company’s current

 

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interpretations of the Tax Cuts and Jobs Act (TCJA) and related regulations and guidance, and are subject to change based on future guidance, as well as FedEx’s ability to defend its interpretations. These forecasts do not include potential costs associated with capacity reductions.

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 $70 billion, the company offers integrated business solutions 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 450,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visit about.fedex.com.

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks, Statistical Books and supplemental first quarter fiscal 2020 earnings release conference call slides. These materials, as well as a webcast of the earnings release conference call to be held at 5:30 p.m. EDT on September 17, 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. 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; anti-trade measures and additional changes in international trade policies and relations; a significant data breach or other disruption to our technology infrastructure; our ability to successfully integrate

 

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the businesses and operations of FedEx Express and TNT Express in the expected time frame and at the expected cost and to achieve the expected benefits from the combined businesses; our ability to successfully implement our business strategy and effectively respond to changes in market dynamics; the impact of the United Kingdom’s vote to leave the European Union and the terms of its withdrawal if it ultimately occurs; our ability to match capacity to shifting volume levels; changes in fuel prices or currency exchange rates; the impact of intense competition; evolving or new U.S. domestic or international government regulation or regulatory actions; future guidance, regulations, interpretations or challenges to our tax positions relating to the TCJA and our ability to defend our interpretations of the TCJA; our ability to effectively operate, integrate, leverage and grow acquired businesses; legal challenges or changes related to owner-operators engaged by FedEx Ground and the drivers providing services on their behalf; disruptions or modifications in service by, or changes in the business or financial soundness of, the U.S. Postal Service; the impact of any international conflicts or terrorist activities; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; 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

Home Page: fedex.com

 

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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES

TO GAAP FINANCIAL MEASURES

First Quarter Fiscal 2020 and Fiscal 2019 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 first quarter fiscal 2020 and 2019 consolidated operating income and margin, net income and diluted earnings per share. These financial measures have been adjusted to exclude the impact of TNT Express integration expenses incurred in fiscal 2020 and 2019.

We have incurred and expect to incur significant expenses through fiscal 2021, and may incur additional expenses thereafter, in connection with our integration of TNT Express. We have adjusted our first quarter fiscal 2020 and 2019 consolidated 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, travel and advertising expenses. Internal salaries and employee benefits are included only to the extent the individuals are assigned full-time to integration activities. The integration expenses also include any restructuring charges at TNT Express.

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

 

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with other companies’ non-GAAP financial measures having the same or similar names. As required by Securities and Exchange Commission rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures.

Fiscal 2020 Earnings Per Share and Effective Tax Rate Forecasts

Our fiscal 2020 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes the fiscal 2020 year-end mark-to-market (MTM) retirement plan accounting adjustment and estimated fiscal 2020 TNT Express integration expenses. Our fiscal 2020 effective tax rate (ETR) forecast is a non-GAAP financial measure because it excludes the impact of the fiscal 2020 year-end MTM retirement plan accounting adjustment.

We have provided these non-GAAP financial measures for the same reasons that were outlined above for historical non-GAAP measures. The fiscal 2020 year-end MTM retirement plan accounting adjustment is excluded from our fiscal 2020 EPS and ETR forecasts, as applicable, because it is unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses. Estimated fiscal 2020 TNT Express integration expenses are excluded from our fiscal 2020 EPS forecast for the same reasons described above for historical non-GAAP measures.

We are unable to predict the amount of the year-end MTM retirement plan accounting adjustment, as it is significantly impacted by changes in interest rates and the financial markets, so such adjustment is not included in our fiscal 2020 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2020 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2020 year-end MTM retirement plan accounting adjustment could have a material impact on our fiscal 2020 consolidated financial results and ETR.

The table included below titled “Fiscal 2020 Earnings Per Share Forecast” outlines the impacts of the items that are excluded from our fiscal 2020 EPS forecast, other than the year-end MTM retirement plan accounting adjustment.

 

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First Quarter Fiscal 2020

FedEx Corporation

 

Dollars in millions, except EPS          Income
Taxes1
     Net
Income2
     Diluted
Earnings

Per Share
 
     Operating  
     Income      Margin  

GAAP measure

   $ 977        5.7   $ 251      $ 745      $ 2.84  

TNT Express integration expenses3

     71        0.4     16        55        0.21  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-GAAP measure

   $ 1,048        6.1   $ 267      $ 800      $ 3.05  

First Quarter Fiscal 2019

FedEx Corporation

 

Dollars in millions, except EPS          Income
Taxes1
     Net
Income2
     Diluted
Earnings

Per Share
 
     Operating  
     Income      Margin  

GAAP measure

   $ 1,071        6.3   $ 266      $ 835      $ 3.10  

TNT Express integration expenses3

     121        0.7     23        98        0.36  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Non-GAAP measure

   $ 1,192        7.0   $ 289      $ 933      $ 3.46  

Fiscal 2020 Earnings Per Share Forecast

 

Dollars in millions, except EPS    Adjustments     Diluted Earnings
Per Share
 

Earnings per diluted share before year-end MTM retirement plan accounting adjustment (non-GAAP)4

     $ 10.00 to $12.00  

TNT Express integration expenses

   $ 350    

Income tax effect1

     (86  
  

 

 

   

Net of tax effect

   $ 264       1.00  
    

 

 

 

Earnings per diluted share with adjustments4

     $ 11.00 to $13.00  

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 -

These expenses, including restructuring charges, were recognized at FedEx Corporate and FedEx Express.

4 -

The year-end MTM retirement plan accounting adjustment, which is impracticable to calculate at this time, is excluded.

* * *

 

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FEDEX CORP. FINANCIAL HIGHLIGHTS

First Quarter Fiscal 2020

(In millions, except earnings per share)

(Unaudited)

 

     Three Months Ended
August 31
 
         2019             2018             %      

Revenue:

      

FedEx Express segment

   $ 8,945     $ 9,222       (3%

FedEx Ground segment

     5,179       4,799       8%  

FedEx Freight segment

     1,905       1,959       (3%

FedEx Services segment

     4       9       (56%

Other and eliminations1

     1,015       1,063       (5%
  

 

 

   

 

 

   

Total Revenue

     17,048       17,052        

Operating Expenses:

      

Salaries and employee benefits

     6,087       6,260       (3%

Purchased transportation

     4,028       3,967       2%  

Rentals and landing fees

     920       823       12%  

Depreciation and amortization

     879       808       9%  

Fuel

     870       986       (12%

Maintenance and repairs

     768       735       4%  

Other

     2,519       2,402       5%  
  

 

 

   

 

 

   

Total Operating Expenses

     16,071       15,981       1%  

Operating Income (Loss):

      

FedEx Express segment2

     285       388       (27%

FedEx Ground segment2

     644       676       (5%

FedEx Freight segment

     194       176       10%  

Corporate, eliminations and other1,2

     (146     (169     14%  
  

 

 

   

 

 

   

Total Operating Income

     977       1,071       (9%

Other Income (Expense):

      

Interest, net

     (137     (127     8%  

Other retirement plans income

     168       158       6%  

Other, net

     (12     (1     NM  
  

 

 

   

 

 

   

Total Other Income

     19       30       (37%
  

 

 

   

 

 

   

Income Before Income Taxes

     996       1,101       (10%

Provision for Income Taxes

     251       266       (6%
  

 

 

   

 

 

   

Net Income

   $ 745     $ 835       (11%
  

 

 

   

 

 

   

Diluted Earnings Per Share

   $ 2.84     $ 3.10       (8%
  

 

 

   

 

 

   

Weighted Average Common and Common Equivalent Shares

     262       269       (3%

Capital Expenditures

   $ 1,418     $ 1,179       20%  

 

1 -

Includes the FedEx Logistics and FedEx Office operating segments.

2 -

Prior year amounts have been revised to conform to the current year presentation.

 

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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

First Quarter Fiscal 2020

(In millions)

 

     August 31, 2019
(Unaudited)
       
    May 31, 2019  

ASSETS

    

Current Assets

    

Cash and cash equivalents

   $ 2,389     $ 2,319  

Receivables, less allowances

     9,312       9,116  

Spare parts, supplies and fuel, less allowances

     574       553  

Prepaid expenses and other

     742       1,098  
  

 

 

   

 

 

 

Total current assets

     13,017       13,086  

Property and Equipment, at Cost

     61,436       59,511  

Less accumulated depreciation and amortization

     29,826       29,082  
  

 

 

   

 

 

 

Net property and equipment

     31,610       30,429  

Other Long-Term Assets

    

Operating lease right-of-use assets

     13,819        

Goodwill

     6,821       6,884  

Other assets

     3,185       4,004  
  

 

 

   

 

 

 

Total other long-term assets

     23,825       10,888  
  

 

 

   

 

 

 
   $ 68,452     $ 54,403  
  

 

 

   

 

 

 

LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT

 

 

Current Liabilities

    

Current portion of long-term debt

   $ 35     $ 964  

Accrued salaries and employee benefits

     1,522       1,741  

Accounts payable

     3,179       3,030  

Operating lease liabilities

     1,896        

Accrued expenses

     3,303       3,278  
  

 

 

   

 

 

 

Total current liabilities

     9,935       9,013  

Long-Term Debt, Less Current Portion

     18,726       16,617  

Other Long-Term Liabilities

    

Deferred income taxes

     2,953       2,821  

Pension, postretirement healthcare and other benefit obligations

     4,132       5,095  

Self-insurance accruals

     1,924       1,899  

Operating lease liabilities

     12,137        

Deferred lease obligations

           531  

Other liabilities

     479       670  
  

 

 

   

 

 

 

Total other long-term liabilities

     21,625       11,016  

Commitments and Contingencies

    

Common Stockholders’ Investment

    

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

     32       32  

Additional paid-in capital

     3,257       3,231  

Retained earnings

     25,048       24,648  

Accumulated other comprehensive loss

     (918     (865

Treasury stock, at cost

     (9,253     (9,289
  

 

 

   

 

 

 

Total common stockholders’ investment

     18,166       17,757  
  

 

 

   

 

 

 
   $ 68,452     $ 54,403  
  

 

 

   

 

 

 

 

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FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

First Quarter Fiscal 2020

(In millions)

(Unaudited)

 

     Three Months Ended
August 31
 
     2019     2018  

Operating Activities:

    

Net income

   $ 745     $ 835  

Noncash charges:

    

Depreciation and amortization

     879       808  

Other, net

     866       173  

Changes in operating assets and liabilities, net

     (1,925     (1,115
  

 

 

   

 

 

 

Net cash provided by operating activities

     565       701  

Investing Activities:

    

Capital expenditures

     (1,418     (1,179

Proceeds from asset dispositions and other

     (1     78  
  

 

 

   

 

 

 

Net cash used in investing activities

     (1,419     (1,101

Financing Activities:

    

Proceeds from short-term borrowings, net

           299  

Principal payments on debt

     (985     (2

Proceeds from debt issuances

     2,093        

Proceeds from stock issuances

     12       25  

Dividends paid

     (170     (173

Purchase of treasury stock

     (3     (625

Other, net

     (5     4  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     942       (472
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

     (18     (24
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     70       (896

Cash and cash equivalents at beginning of period

     2,319       3,265  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 2,389     $ 2,369  
  

 

 

   

 

 

 

 

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FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

 

     Three Months Ended
August 31
 
     2019      2018      %  

Revenues:

        

Package Revenue:

        

U.S. Overnight Box

   $ 1,866      $ 1,886        (1%

U.S. Overnight Envelope

     479        468        2%  
  

 

 

    

 

 

    

Total U.S. Overnight

     2,345        2,354         

U.S. Deferred

     956        952         
  

 

 

    

 

 

    

Total U.S. Package Revenue

     3,301        3,306         
  

 

 

    

 

 

    

International Priority

     1,817        1,874        (3%

International Economy

     855        850        1%  
  

 

 

    

 

 

    

Total International Export Package

     2,672        2,724        (2%

International Domestic1

     1,076        1,131        (5%
  

 

 

    

 

 

    

Total Package Revenue

     7,049        7,161        (2%

Freight Revenue:

        

U.S.

     695        730        (5%

International Priority

     464        533        (13%

International Economy

     516        519        (1%

International Airfreight

     66        85        (22%
  

 

 

    

 

 

    

Total Freight Revenue

     1,741        1,867        (7%

Other Revenue

     155        194        (20%
  

 

 

    

 

 

    

Total Express Revenue

   $ 8,945      $ 9,222        (3%

Operating Expenses:

        

Salaries and employee benefits

     3,372        3,473        (3%

Purchased transportation

     1,232        1,307        (6%

Rentals and landing fees

     513        470        9%  

Depreciation and amortization

     462        436        6%  

Fuel

     743        845        (12%

Maintenance and repairs

     517        502        3%  

Intercompany charges2

     469        518        (9%

Other

     1,352        1,283        5%  
  

 

 

    

 

 

    

Total Operating Expenses2

     8,660        8,834        (2%
  

 

 

    

 

 

    

Operating Income2

   $ 285      $ 388        (27%
  

 

 

    

 

 

    

Operating Margin2

     3.2%        4.2%        (1.0 pts

 

1 -

International Domestic revenues relate to international intra-country operations.

2 -

Prior year amounts have been revised to conform to the current year presentation.

 

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FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Unaudited)

 

     Three Months Ended  
     August 31  

PACKAGE STATISTICS

   2019      2018      %  

Average Daily Package Volume (000s):

        

U.S. Overnight Box

     1,218        1,231        (1%

U.S. Overnight Envelope

     562        551        2%  
  

 

 

    

 

 

    

Total U.S. Overnight Package

     1,780        1,782         

U.S. Deferred

     976        916        7%  
  

 

 

    

 

 

    

Total U.S. Domestic Package

     2,756        2,698        2%  
  

 

 

    

 

 

    

International Priority

     530        526        1%  

International Economy

     294        276        7%  
  

 

 

    

 

 

    

Total International Export Package

     824        802        3%  

International Domestic1

     2,352        2,396        (2%
  

 

 

    

 

 

    

Total Average Daily Packages

     5,932        5,896        1%  
  

 

 

    

 

 

    

Yield (Revenue Per Package):

        

U.S. Overnight Box

   $ 23.94      $ 23.57        2%  

U.S. Overnight Envelope

     13.32        13.09        2%  
  

 

 

    

 

 

    

U.S. Overnight Composite

     20.59        20.33        1%  

U.S. Deferred

     15.29        15.98        (4%
  

 

 

    

 

 

    

U.S. Domestic Composite

     18.71        18.85        (1%
  

 

 

    

 

 

    

International Priority

     53.52        54.80        (2%

International Economy

     45.52        47.43        (4%
  

 

 

    

 

 

    

Total International Export Composite

     50.67        52.26        (3%

International Domestic1

     7.15        7.26        (2%
  

 

 

    

 

 

    

Composite Package Yield

   $ 18.57      $ 18.69        (1%
  

 

 

    

 

 

    

FREIGHT STATISTICS

        

Average Daily Freight Pounds (000s):

        

U.S.

     8,015        8,309        (4%

International Priority

     4,792        5,260        (9%

International Economy

     13,717        13,459        2%  

International Airfreight

     1,555        1,717        (9%
  

 

 

    

 

 

    

Total Avg Daily Freight Pounds

     28,079        28,745        (2%
  

 

 

    

 

 

    

Revenue Per Freight Pound:

        

U.S.

   $ 1.36      $ 1.35        1%  

International Priority

     1.51        1.56        (3%

International Economy

     0.59        0.59         

International Airfreight

     0.66        0.76        (13%
  

 

 

    

 

 

    

Composite Freight Yield

   $ 0.97      $ 1.00        (3%

Operating Weekdays

     64        65        (2%

 

1 -

International Domestic revenues relate to international intra-country operations.

 

12


FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

 

     Three Months Ended  
     August 31  
     2019      2018      %  

FINANCIAL HIGHLIGHTS

        

Revenue

   $ 5,179      $ 4,799        8%  

Operating Expenses:

        

Salaries and employee benefits

     871        805        8%  

Purchased transportation

     2,303        2,062        12%  

Rentals

     239        191        25%  

Depreciation and amortization

     193        173        12%  

Fuel

     3        3         

Maintenance and repairs

     87        77        13%  

Intercompany charges1

     375        388        (3%

Other

     464        424        9%  
  

 

 

    

 

 

    

Total Operating Expenses1

     4,535        4,123        10%  
  

 

 

    

 

 

    

Operating Income1

   $ 644      $ 676        (5%
  

 

 

    

 

 

    

Operating Margin1

     12.4%        14.1%        (1.7 pts

OPERATING STATISTICS

        

Operating Weekdays

     64        65        (2%

Average Daily Package Volume (000s)

     8,834        8,221        7%  

Yield (Revenue Per Package)

   $ 9.13      $ 8.96        2%  

 

1 -

Prior year amounts have been revised to conform to the current year presentation.

 

13


FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

First Quarter Fiscal 2020

(Dollars in millions)

(Unaudited)

 

     Three Months Ended
August 31
 
     2019     2018     %  

FINANCIAL HIGHLIGHTS

      

Revenue

   $ 1,905     $ 1,959       (3%

Operating Expenses:

      

Salaries and employee benefits

     919       928       (1%

Purchased transportation

     187       259       (28%

Rentals

     52       42       24%  

Depreciation and amortization

     94       78       21%  

Fuel

     123       137       (10%

Maintenance and repairs

     65       62       5%  

Intercompany charges

     126       138       (9%

Other

     145       139       4%  
  

 

 

   

 

 

   

Total Operating Expenses

     1,711       1,783       (4%
  

 

 

   

 

 

   

Operating Income

   $ 194     $ 176       10%  
  

 

 

   

 

 

   

Operating Margin

     10.2     9.0     1.2 pts  

OPERATING STATISTICS

      

Operating Weekdays

     64       65       (2%

Average Daily Shipments (000s)

      

Priority

     78.5       81.2       (3%

Economy

     32.8       34.6       (5%
  

 

 

   

 

 

   

Total Average Daily Shipments

     111.3       115.8       (4%

Weight Per Shipment (lbs)

      

Priority

     1,156       1,218       (5%

Economy

     960       1,009       (5%
  

 

 

   

 

 

   

Composite Weight Per Shipment

     1,098       1,156       (5%

Revenue/Shipment

      

Priority

   $ 255.45     $ 246.77       4%  

Economy

     295.75       292.33       1%  
  

 

 

   

 

 

   

Composite Revenue/Shipment

   $ 267.34     $ 260.39       3%  

Revenue/CWT

      

Priority

   $ 22.10     $ 20.26       9%  

Economy

     30.81       28.97       6%  
  

 

 

   

 

 

   

Composite Revenue/CWT

   $ 24.35     $ 22.53       8%  

 

14

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