þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 62-1721435 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
942 South Shady Grove Road | ||
Memphis, Tennessee | 38120 | |
(Address of principal executive offices) | (ZIP Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Common Stock | Outstanding Shares at December 14, 2011 | |
Common Stock, par value $0.10 per share | 314,484,094 |
PAGE | ||||||||
ITEM 1. Financial Statements |
||||||||
3 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
22 | ||||||||
23 | ||||||||
45 | ||||||||
45 | ||||||||
PART II. OTHER INFORMATION |
||||||||
46 | ||||||||
46 | ||||||||
46 | ||||||||
47 | ||||||||
47 | ||||||||
48 | ||||||||
E-1 | ||||||||
EX-10.1 | ||||||||
EX-10.2 | ||||||||
EX-10.3 | ||||||||
EX-12.1 | ||||||||
EX-15.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 | ||||||||
EX-101 INSTANCE DOCUMENT | ||||||||
EX-101 SCHEMA DOCUMENT | ||||||||
EX-101 CALCULATION LINKBASE DOCUMENT | ||||||||
EX-101 LABELS LINKBASE DOCUMENT | ||||||||
EX-101 PRESENTATION LINKBASE DOCUMENT | ||||||||
EX-101 DEFINITION LINKBASE DOCUMENT |
- 2 -
November 30, | ||||||||
2011 | May 31, | |||||||
(Unaudited) | 2011 | |||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ | 1,896 | $ | 2,328 | ||||
Receivables, less allowances of $187 and $182 |
4,837 | 4,581 | ||||||
Spare parts, supplies and fuel, less
allowances of $176 and $169 |
440 | 437 | ||||||
Deferred income taxes |
628 | 610 | ||||||
Prepaid expenses and other |
367 | 329 | ||||||
Total current assets |
8,168 | 8,285 | ||||||
PROPERTY AND EQUIPMENT, AT COST |
35,399 | 33,686 | ||||||
Less accumulated depreciation and amortization |
18,690 | 18,143 | ||||||
Net property and equipment |
16,709 | 15,543 | ||||||
OTHER LONG-TERM ASSETS |
||||||||
Goodwill |
2,399 | 2,326 | ||||||
Other assets |
1,176 | 1,231 | ||||||
Total other long-term assets |
3,575 | 3,557 | ||||||
$ | 28,452 | $ | 27,385 | |||||
- 3 -
November 30, | ||||||||
2011 | May 31, | |||||||
(Unaudited) | 2011 | |||||||
LIABILITIES AND STOCKHOLDERS INVESTMENT |
||||||||
CURRENT LIABILITIES |
||||||||
Current portion of long-term debt |
$ | 428 | $ | 18 | ||||
Accrued salaries and employee benefits |
1,390 | 1,268 | ||||||
Accounts payable |
1,646 | 1,702 | ||||||
Accrued expenses |
1,916 | 1,894 | ||||||
Total current liabilities |
5,380 | 4,882 | ||||||
LONG-TERM DEBT, LESS CURRENT PORTION |
1,251 | 1,667 | ||||||
OTHER LONG-TERM LIABILITIES |
||||||||
Deferred income taxes |
1,555 | 1,336 | ||||||
Pension, postretirement healthcare
and other benefit obligations |
2,065 | 2,124 | ||||||
Self-insurance accruals |
977 | 977 | ||||||
Deferred lease obligations |
897 | 779 | ||||||
Deferred gains, principally related to
aircraft transactions |
234 | 246 | ||||||
Other liabilities |
176 | 154 | ||||||
Total other long-term liabilities |
5,904 | 5,616 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
COMMON STOCKHOLDERS INVESTMENT |
||||||||
Common stock, $0.10 par value; 800 million shares
authorized; 317 million shares
issued as of November 30, 2011
and May 31, 2011 |
32 | 32 | ||||||
Additional paid-in capital |
2,557 | 2,484 | ||||||
Retained earnings |
16,103 | 15,266 | ||||||
Accumulated other comprehensive loss |
(2,581 | ) | (2,550 | ) | ||||
Treasury stock, at cost |
(194 | ) | (12 | ) | ||||
Total common stockholders investment |
15,917 | 15,220 | ||||||
$ | 28,452 | $ | 27,385 | |||||
- 4 -
Three Months Ended | Six Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES |
$ | 10,587 | $ | 9,632 | $ | 21,108 | $ | 19,089 | ||||||||
OPERATING EXPENSES: |
||||||||||||||||
Salaries and employee benefits |
3,982 | 3,779 | 7,986 | 7,582 | ||||||||||||
Purchased transportation |
1,576 | 1,390 | 3,094 | 2,717 | ||||||||||||
Rentals and landing fees |
623 | 628 | 1,243 | 1,229 | ||||||||||||
Depreciation and amortization |
518 | 502 | 1,027 | 981 | ||||||||||||
Fuel |
1,200 | 938 | 2,444 | 1,825 | ||||||||||||
Maintenance and repairs |
511 | 473 | 1,062 | 990 | ||||||||||||
Impairment and other charges |
| 67 | | 67 | ||||||||||||
Other |
1,397 | 1,386 | 2,735 | 2,601 | ||||||||||||
9,807 | 9,163 | 19,591 | 17,992 | |||||||||||||
OPERATING INCOME |
780 | 469 | 1,517 | 1,097 | ||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||
Interest, net |
(7 | ) | (23 | ) | (18 | ) | (41 | ) | ||||||||
Other, net |
4 | (9 | ) | 2 | (16 | ) | ||||||||||
(3 | ) | (32 | ) | (16 | ) | (57 | ) | |||||||||
INCOME BEFORE INCOME TAXES |
777 | 437 | 1,501 | 1,040 | ||||||||||||
PROVISION FOR INCOME TAXES |
280 | 154 | 540 | 377 | ||||||||||||
NET INCOME |
$ | 497 | $ | 283 | $ | 961 | $ | 663 | ||||||||
EARNINGS PER COMMON SHARE: |
||||||||||||||||
Basic |
$ | 1.57 | $ | 0.90 | $ | 3.04 | $ | 2.11 | ||||||||
Diluted |
$ | 1.57 | $ | 0.89 | $ | 3.02 | $ | 2.09 | ||||||||
DIVIDENDS DECLARED PER COMMON SHARE |
$ | 0.13 | $ | 0.12 | $ | 0.39 | $ | 0.36 | ||||||||
- 5 -
Six Months Ended | ||||||||
November 30, | ||||||||
2011 | 2010 | |||||||
Operating Activities: |
||||||||
Net income |
$ | 961 | $ | 663 | ||||
Adjustments to reconcile net income to cash
provided by operating activities: |
||||||||
Depreciation and amortization |
1,027 | 981 | ||||||
Provision for uncollectible accounts |
84 | 66 | ||||||
Stock-based compensation |
60 | 56 | ||||||
Deferred income taxes and other noncash items |
278 | 140 | ||||||
Changes in assets and liabilities: |
||||||||
Receivables |
(291 | ) | (79 | ) | ||||
Other assets |
(44 | ) | (53 | ) | ||||
Accounts payable and other liabilities |
119 | 253 | ||||||
Other, net |
(26 | ) | (16 | ) | ||||
Cash provided by operating activities |
2,168 | 2,011 | ||||||
Investing Activities: |
||||||||
Capital expenditures |
(2,217 | ) | (2,059 | ) | ||||
Business acquisition, net of cash acquired |
(114 | ) | | |||||
Proceeds from asset dispositions and other |
15 | 7 | ||||||
Cash used in investing activities |
(2,316 | ) | (2,052 | ) | ||||
Financing Activities: |
||||||||
Principal payments on debt |
(18 | ) | (12 | ) | ||||
Proceeds from stock issuances |
32 | 25 | ||||||
Excess tax benefit on the exercise of stock options |
5 | 4 | ||||||
Dividends paid |
(82 | ) | (76 | ) | ||||
Purchase of treasury stock |
(197 | ) | | |||||
Cash used in financing activities |
(260 | ) | (59 | ) | ||||
Effect of exchange rate changes on cash |
(24 | ) | 25 | |||||
Net decrease in cash and cash equivalents |
(432 | ) | (75 | ) | ||||
Cash and cash equivalents at beginning of period |
2,328 | 1,952 | ||||||
Cash and cash equivalents at end of period |
$ | 1,896 | $ | 1,877 | ||||
- 6 -
- 7 -
Three Months Ended | ||||||||
2011 | 2010 | |||||||
Net income |
$ | 497 | $ | 283 | ||||
Other comprehensive income: |
||||||||
Foreign currency translation adjustments, net of
tax of $26 in 2011 and $11 in 2010 |
(110 | ) | 44 | |||||
Amortization of unrealized pension actuarial gains/losses
and other, net of tax of $18 in
2011 and $15 in 2010 |
30 | 26 | ||||||
Comprehensive income |
$ | 417 | $ | 353 | ||||
Six Months Ended | ||||||||
2011 | 2010 | |||||||
Net income |
$ | 961 | $ | 663 | ||||
Other comprehensive income: |
||||||||
Foreign currency translation adjustments, net of
tax of $22 in 2011 and $17 in 2010 |
(91 | ) | 72 | |||||
Amortization of unrealized pension actuarial gains/losses
and other, net of tax of $36 in
2011 and $31 in 2010 |
60 | 52 | ||||||
Comprehensive income |
$ | 930 | $ | 787 | ||||
- 8 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Basic earnings per common share: |
||||||||||||||||
Net earnings allocable to common shares(1) |
$ | 495 | $ | 282 | $ | 959 | $ | 661 | ||||||||
Weighted-average common shares |
315 | 314 | 316 | 314 | ||||||||||||
Basic earnings per common share |
$ | 1.57 | $ | 0.90 | $ | 3.04 | $ | 2.11 | ||||||||
Diluted earnings per common share: |
||||||||||||||||
Net earnings allocable to common shares(1) |
$ | 495 | $ | 282 | $ | 959 | $ | 661 | ||||||||
Weighted-average common shares |
315 | 314 | 316 | 314 | ||||||||||||
Dilutive effect of share-based awards |
1 | 2 | 1 | 2 | ||||||||||||
Weighted-average diluted shares |
316 | 316 | 317 | 316 | ||||||||||||
Diluted earnings per common share |
$ | 1.57 | $ | 0.89 | $ | 3.02 | $ | 2.09 | ||||||||
Anti-dilutive options excluded from diluted
earnings per common share |
14.2 | 11.2 | 13.7 | 11.3 | ||||||||||||
(1) | Net earnings available to participating securities were immaterial in all periods presented. |
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
U.S. domestic and international pension plans |
$ | 132 | $ | 134 | $ | 264 | $ | 275 | ||||||||
U.S. domestic and international defined contribution
plans |
81 | 51 | 167 | 105 | ||||||||||||
Postretirement healthcare plans |
17 | 15 | 35 | 30 | ||||||||||||
$ | 230 | $ | 200 | $ | 466 | $ | 410 | |||||||||
- 9 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Pension Plans |
||||||||||||||||
Service cost |
$ | 149 | $ | 130 | $ | 297 | $ | 260 | ||||||||
Interest cost |
244 | 225 | 488 | 449 | ||||||||||||
Expected return on plan assets |
(309 | ) | (265 | ) | (618 | ) | (530 | ) | ||||||||
Recognized actuarial losses and other |
48 | 44 | 97 | 96 | ||||||||||||
$ | 132 | $ | 134 | $ | 264 | $ | 275 | |||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Postretirement Healthcare Plans |
||||||||||||||||
Service cost |
$ | 9 | $ | 7 | $ | 18 | $ | 15 | ||||||||
Interest cost |
9 | 9 | 18 | 17 | ||||||||||||
Recognized actuarial gains and other |
(1 | ) | (1 | ) | (1 | ) | (2 | ) | ||||||||
$ | 17 | $ | 15 | $ | 35 | $ | 30 | |||||||||
FedEx Express Segment
|
FedEx Express (express transportation) | |
FedEx Trade Networks (global trade services) | ||
FedEx SupplyChain Systems (logistics services) | ||
FedEx Ground Segment
|
FedEx Ground (small-package ground delivery) | |
FedEx SmartPost (small-parcel consolidator) | ||
FedEx Freight Segment
|
FedEx Freight (LTL freight transportation) | |
FedEx Custom Critical (time-critical transportation) | ||
FedEx Services Segment
|
FedEx Services (sales, marketing and information technology functions) | |
FedEx TechConnect (customer service, technical support, billings and collections) | ||
FedEx Office (document and business services and package acceptance) |
- 10 -
- 11 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
||||||||||||||||
FedEx Express segment |
$ | 6,583 | $ | 5,992 | $ | 13,175 | $ | 11,904 | ||||||||
FedEx Ground segment |
2,339 | 2,077 | 4,617 | 4,038 | ||||||||||||
FedEx Freight segment |
1,325 | 1,221 | 2,653 | 2,479 | ||||||||||||
FedEx Services segment |
427 | 434 | 838 | 849 | ||||||||||||
Other and eliminations |
(87 | ) | (92 | ) | (175 | ) | (181 | ) | ||||||||
$ | 10,587 | $ | 9,632 | $ | 21,108 | $ | 19,089 | |||||||||
Operating Income (Loss) |
||||||||||||||||
FedEx Express segment |
$ | 342 | $ | 264 | $ | 630 | $ | 621 | ||||||||
FedEx Ground segment |
398 | 296 | 805 | 583 | ||||||||||||
FedEx Freight segment |
40 | (91 | ) | 82 | (107 | ) | ||||||||||
$ | 780 | $ | 469 | $ | 1,517 | $ | 1,097 | |||||||||
Aircraft and | ||||||||||||
Aircraft Related | Other(1) | Total | ||||||||||
2012 (remainder) |
$ | 389 | $ | 435 | $ | 824 | ||||||
2013 |
983 | 128 | 1,111 | |||||||||
2014 |
780 | 57 | 837 | |||||||||
2015 |
555 | 31 | 586 | |||||||||
2016 |
580 | 40 | 620 | |||||||||
Thereafter |
3,225 | 130 | 3,355 |
(1) | Primarily vehicles, facilities, advertising and promotions contracts, and for the remainder of 2012, a total of $291 million of required quarterly contributions to our U.S. Pension Plans. |
- 12 -
B777F(1) | B757 | Total | ||||||||||
2012 (remainder) |
2 | 8 | 10 | |||||||||
2013 |
4 | 6 | 10 | |||||||||
2014 |
7 | | 7 | |||||||||
2015 |
3 | | 3 | |||||||||
2016 |
3 | | 3 | |||||||||
Thereafter |
9 | | 9 | |||||||||
Total |
28 | 14 | 42 | |||||||||
(1) | Reflects the deferral during the second quarter of 2012 of the delivery of two B777F aircraft from 2013 to after 2016. |
Operating Leases | ||||||||||||||||
Aircraft | Total | |||||||||||||||
Capital | and Related | Facilities | Operating | |||||||||||||
Leases | Equipment | and Other | Leases | |||||||||||||
2012 (remainder) |
$ | 15 | $ | 370 | $ | 691 | $ | 1,061 | ||||||||
2013 |
120 | 499 | 1,286 | 1,785 | ||||||||||||
2014 |
2 | 473 | 1,119 | 1,592 | ||||||||||||
2015 |
2 | 455 | 988 | 1,443 | ||||||||||||
2016 |
1 | 458 | 813 | 1,271 | ||||||||||||
Thereafter |
13 | 1,545 | 5,179 | 6,724 | ||||||||||||
Total |
153 | $ | 3,800 | $ | 10,076 | $ | 13,876 | |||||||||
Less amount representing interest |
13 | |||||||||||||||
Present value of net minimum lease
payments |
$ | 140 | ||||||||||||||
- 13 -
- 14 -
- 15 -
2011 | 2010 | |||||||
Cash payments for: |
||||||||
Interest (net of capitalized interest) |
$ | 23 | $ | 45 | ||||
Income taxes |
$ | 276 | $ | 340 | ||||
Income tax refunds received |
(6 | ) | (11 | ) | ||||
Cash tax payments, net |
$ | 270 | $ | 329 | ||||
- 16 -
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS |
||||||||||||||||||||
CURRENT ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 1,000 | $ | 412 | $ | 599 | $ | (115 | ) | $ | 1,896 | |||||||||
Receivables, less allowances |
96 | 3,775 | 1,010 | (44 | ) | 4,837 | ||||||||||||||
Spare parts, supplies, fuel, prepaid expenses
and other, less allowances |
58 | 703 | 46 | | 807 | |||||||||||||||
Deferred income taxes |
| 609 | 19 | | 628 | |||||||||||||||
Total current assets |
1,154 | 5,499 | 1,674 | (159 | ) | 8,168 | ||||||||||||||
PROPERTY AND EQUIPMENT, AT COST |
25 | 33,645 | 1,729 | | 35,399 | |||||||||||||||
Less accumulated depreciation and amortization |
20 | 17,609 | 1,061 | | 18,690 | |||||||||||||||
Net property and equipment |
5 | 16,036 | 668 | | 16,709 | |||||||||||||||
INTERCOMPANY RECEIVABLE |
| | 1,250 | (1,250 | ) | | ||||||||||||||
GOODWILL |
| 1,564 | 835 | | 2,399 | |||||||||||||||
INVESTMENT IN SUBSIDIARIES |
16,266 | 2,815 | | (19,081 | ) | | ||||||||||||||
OTHER ASSETS |
1,522 | 1,039 | 103 | (1,488 | ) | 1,176 | ||||||||||||||
$ | 18,947 | $ | 26,953 | $ | 4,530 | $ | (21,978 | ) | $ | 28,452 | ||||||||||
LIABILITIES AND STOCKHOLDERS INVESTMENT
|
||||||||||||||||||||
CURRENT LIABILITIES |
||||||||||||||||||||
Current portion of long-term debt |
$ | | $ | 428 | $ | | $ | | $ | 428 | ||||||||||
Accrued salaries and employee benefits |
64 | 1,172 | 154 | | 1,390 | |||||||||||||||
Accounts payable |
40 | 1,337 | 428 | (159 | ) | 1,646 | ||||||||||||||
Accrued expenses |
259 | 1,522 | 135 | | 1,916 | |||||||||||||||
Total current liabilities |
363 | 4,459 | 717 | (159 | ) | 5,380 | ||||||||||||||
LONG-TERM DEBT, LESS CURRENT PORTION |
1,000 | 251 | | | 1,251 | |||||||||||||||
INTERCOMPANY PAYABLE |
588 | 662 | | (1,250 | ) | | ||||||||||||||
OTHER LONG-TERM LIABILITIES |
||||||||||||||||||||
Deferred income taxes |
| 3,037 | 6 | (1,488 | ) | 1,555 | ||||||||||||||
Other liabilities |
1,079 | 3,120 | 150 | | 4,349 | |||||||||||||||
Total other long-term liabilities |
1,079 | 6,157 | 156 | (1,488 | ) | 5,904 | ||||||||||||||
STOCKHOLDERS INVESTMENT |
15,917 | 15,424 | 3,657 | (19,081 | ) | 15,917 | ||||||||||||||
$ | 18,947 | $ | 26,953 | $ | 4,530 | $ | (21,978 | ) | $ | 28,452 | ||||||||||
- 17 -
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
ASSETS |
||||||||||||||||||||
CURRENT ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 1,589 | $ | 279 | $ | 546 | $ | (86 | ) | $ | 2,328 | |||||||||
Receivables, less allowances |
| 3,696 | 912 | (27 | ) | 4,581 | ||||||||||||||
Spare parts, supplies, fuel, prepaid expenses
and other, less allowances |
77 | 645 | 44 | | 766 | |||||||||||||||
Deferred income taxes |
| 598 | 12 | | 610 | |||||||||||||||
Total current assets |
1,666 | 5,218 | 1,514 | (113 | ) | 8,285 | ||||||||||||||
PROPERTY AND EQUIPMENT, AT COST |
24 | 31,916 | 1,746 | | 33,686 | |||||||||||||||
Less accumulated depreciation and amortization |
18 | 17,071 | 1,054 | | 18,143 | |||||||||||||||
Net property and equipment |
6 | 14,845 | 692 | | 15,543 | |||||||||||||||
INTERCOMPANY RECEIVABLE |
| | 1,317 | (1,317 | ) | | ||||||||||||||
GOODWILL |
| 1,564 | 762 | | 2,326 | |||||||||||||||
INVESTMENT IN SUBSIDIARIES |
15,404 | 2,705 | | (18,109 | ) | | ||||||||||||||
OTHER ASSETS |
1,652 | 1,039 | 63 | (1,523 | ) | 1,231 | ||||||||||||||
$ | 18,728 | $ | 25,371 | $ | 4,348 | $ | (21,062 | ) | $ | 27,385 | ||||||||||
LIABILITIES AND STOCKHOLDERS INVESTMENT
|
||||||||||||||||||||
CURRENT LIABILITIES |
||||||||||||||||||||
Current portion of long-term debt |
$ | | $ | 18 | $ | | $ | | $ | 18 | ||||||||||
Accrued salaries and employee benefits |
50 | 1,071 | 147 | | 1,268 | |||||||||||||||
Accounts payable |
| 1,385 | 430 | (113 | ) | 1,702 | ||||||||||||||
Accrued expenses |
198 | 1,563 | 133 | | 1,894 | |||||||||||||||
Total current liabilities |
248 | 4,037 | 710 | (113 | ) | 4,882 | ||||||||||||||
LONG-TERM DEBT, LESS CURRENT PORTION |
1,000 | 667 | | | 1,667 | |||||||||||||||
INTERCOMPANY PAYABLE |
1,095 | 222 | | (1,317 | ) | | ||||||||||||||
OTHER LONG-TERM LIABILITIES |
||||||||||||||||||||
Deferred income taxes |
| 2,842 | 17 | (1,523 | ) | 1,336 | ||||||||||||||
Other liabilities |
1,165 | 3,001 | 114 | | 4,280 | |||||||||||||||
Total other long-term liabilities |
1,165 | 5,843 | 131 | (1,523 | ) | 5,616 | ||||||||||||||
STOCKHOLDERS INVESTMENT |
15,220 | 14,602 | 3,507 | (18,109 | ) | 15,220 | ||||||||||||||
$ | 18,728 | $ | 25,371 | $ | 4,348 | $ | (21,062 | ) | $ | 27,385 | ||||||||||
- 18 -
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
REVENUES |
$ | | $ | 9,001 | $ | 1,660 | $ | (74 | ) | $ | 10,587 | |||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
Salaries and employee benefits |
28 | 3,506 | 448 | | 3,982 | |||||||||||||||
Purchased transportation |
| 1,122 | 482 | (28 | ) | 1,576 | ||||||||||||||
Rentals and landing fees |
1 | 557 | 67 | (2 | ) | 623 | ||||||||||||||
Depreciation and amortization |
1 | 480 | 37 | | 518 | |||||||||||||||
Fuel |
| 1,181 | 19 | | 1,200 | |||||||||||||||
Maintenance and repairs |
| 486 | 25 | | 511 | |||||||||||||||
Intercompany charges, net |
(53 | ) | (135 | ) | 188 | | | |||||||||||||
Other |
23 | 1,156 | 262 | (44 | ) | 1,397 | ||||||||||||||
| 8,353 | 1,528 | (74 | ) | 9,807 | |||||||||||||||
OPERATING INCOME |
| 648 | 132 | | 780 | |||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||
Equity in earnings of subsidiaries |
497 | 80 | | (577 | ) | | ||||||||||||||
Interest, net |
(19 | ) | 11 | 1 | | (7 | ) | |||||||||||||
Intercompany charges, net |
21 | (27 | ) | 6 | | | ||||||||||||||
Other, net |
(2 | ) | (1 | ) | 7 | | 4 | |||||||||||||
INCOME BEFORE INCOME TAXES |
497 | 711 | 146 | (577 | ) | 777 | ||||||||||||||
Provision for income taxes |
| 202 | 78 | | 280 | |||||||||||||||
NET INCOME |
$ | 497 | $ | 509 | $ | 68 | $ | (577 | ) | $ | 497 | |||||||||
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
REVENUES |
$ | | $ | 8,002 | $ | 1,718 | $ | (88 | ) | $ | 9,632 | |||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
Salaries and employee benefits |
26 | 3,216 | 537 | | 3,779 | |||||||||||||||
Purchased transportation |
| 970 | 447 | (27 | ) | 1,390 | ||||||||||||||
Rentals and landing fees |
1 | 564 | 64 | (1 | ) | 628 | ||||||||||||||
Depreciation and amortization |
| 443 | 59 | | 502 | |||||||||||||||
Fuel |
| 891 | 47 | | 938 | |||||||||||||||
Maintenance and repairs |
| 440 | 33 | | 473 | |||||||||||||||
Impairment and other charges |
| 17 | 50 | | 67 | |||||||||||||||
Intercompany charges, net |
(58 | ) | (80 | ) | 138 | | | |||||||||||||
Other |
31 | 1,137 | 278 | (60 | ) | 1,386 | ||||||||||||||
| 7,598 | 1,653 | (88 | ) | 9,163 | |||||||||||||||
OPERATING INCOME |
| 404 | 65 | | 469 | |||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||
Equity in earnings of subsidiaries |
283 | 23 | | (306 | ) | | ||||||||||||||
Interest, net |
(23 | ) | 1 | (1 | ) | | (23 | ) | ||||||||||||
Intercompany charges, net |
28 | (34 | ) | 6 | | | ||||||||||||||
Other, net |
(5 | ) | (3 | ) | (1 | ) | | (9 | ) | |||||||||||
INCOME BEFORE INCOME TAXES |
283 | 391 | 69 | (306 | ) | 437 | ||||||||||||||
Provision for income taxes |
| 138 | 16 | | 154 | |||||||||||||||
NET INCOME |
$ | 283 | $ | 253 | $ | 53 | $ | (306 | ) | $ | 283 | |||||||||
- 19 -
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
REVENUES |
$ | | $ | 18,008 | $ | 3,244 | $ | (144 | ) | $ | 21,108 | |||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
Salaries and employee benefits |
61 | 7,037 | 888 | | 7,986 | |||||||||||||||
Purchased transportation |
| 2,202 | 946 | (54 | ) | 3,094 | ||||||||||||||
Rentals and landing fees |
2 | 1,112 | 132 | (3 | ) | 1,243 | ||||||||||||||
Depreciation and amortization |
1 | 951 | 75 | | 1,027 | |||||||||||||||
Fuel |
| 2,405 | 39 | | 2,444 | |||||||||||||||
Maintenance and repairs |
| 1,014 | 48 | | 1,062 | |||||||||||||||
Intercompany charges, net |
(111 | ) | (225 | ) | 336 | | | |||||||||||||
Other |
47 | 2,281 | 494 | (87 | ) | 2,735 | ||||||||||||||
| 16,777 | 2,958 | (144 | ) | 19,591 | |||||||||||||||
OPERATING INCOME |
| 1,231 | 286 | | 1,517 | |||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||
Equity in earnings of subsidiaries |
961 | 151 | | (1,112 | ) | | ||||||||||||||
Interest, net |
(39 | ) | 19 | 2 | | (18 | ) | |||||||||||||
Intercompany charges, net |
42 | (55 | ) | 13 | | | ||||||||||||||
Other, net |
(3 | ) | (3 | ) | 8 | | 2 | |||||||||||||
INCOME BEFORE INCOME TAXES |
961 | 1,343 | 309 | (1,112 | ) | 1,501 | ||||||||||||||
Provision for income taxes |
| 417 | 123 | | 540 | |||||||||||||||
NET INCOME |
$ | 961 | $ | 926 | $ | 186 | $ | (1,112 | ) | $ | 961 | |||||||||
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
REVENUES |
$ | | $ | 15,895 | $ | 3,364 | $ | (170 | ) | $ | 19,089 | |||||||||
OPERATING EXPENSES: |
||||||||||||||||||||
Salaries and employee benefits |
64 | 6,465 | 1,053 | | 7,582 | |||||||||||||||
Purchased transportation |
| 1,890 | 879 | (52 | ) | 2,717 | ||||||||||||||
Rentals and landing fees |
2 | 1,101 | 128 | (2 | ) | 1,229 | ||||||||||||||
Depreciation and amortization |
| 875 | 106 | | 981 | |||||||||||||||
Fuel |
| 1,732 | 93 | | 1,825 | |||||||||||||||
Maintenance and repairs |
| 923 | 67 | | 990 | |||||||||||||||
Impairment and other charges |
| 17 | 50 | | 67 | |||||||||||||||
Intercompany charges, net |
(129 | ) | (172 | ) | 301 | | | |||||||||||||
Other |
63 | 2,123 | 531 | (116 | ) | 2,601 | ||||||||||||||
| 14,954 | 3,208 | (170 | ) | 17,992 | |||||||||||||||
OPERATING INCOME |
| 941 | 156 | | 1,097 | |||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||
Equity in earnings of subsidiaries |
663 | 49 | | (712 | ) | | ||||||||||||||
Interest, net |
(47 | ) | 9 | (3 | ) | | (41 | ) | ||||||||||||
Intercompany charges, net |
55 | (69 | ) | 14 | | | ||||||||||||||
Other, net |
(8 | ) | (7 | ) | (1 | ) | | (16 | ) | |||||||||||
INCOME BEFORE INCOME TAXES |
663 | 923 | 166 | (712 | ) | 1,040 | ||||||||||||||
Provision for income taxes |
| 334 | 43 | | 377 | |||||||||||||||
NET INCOME |
$ | 663 | $ | 589 | $ | 123 | $ | (712 | ) | $ | 663 | |||||||||
- 20 -
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ | 135 | $ | 1,814 | $ | 248 | $ | (29 | ) | $ | 2,168 | |||||||||
INVESTING ACTIVITIES |
||||||||||||||||||||
Capital expenditures |
(1 | ) | (2,161 | ) | (55 | ) | | (2,217 | ) | |||||||||||
Business acquisition, net of cash acquired |
| | (114 | ) | | (114 | ) | |||||||||||||
Proceeds from asset dispositions and other |
| 15 | | | 15 | |||||||||||||||
CASH USED IN INVESTING ACTIVITIES |
(1 | ) | (2,146 | ) | (169 | ) | | (2,316 | ) | |||||||||||
FINANCING ACTIVITIES |
||||||||||||||||||||
Net transfers from (to) Parent |
(481 | ) | 484 | (3 | ) | | | |||||||||||||
Intercompany dividends |
| 21 | (21 | ) | | | ||||||||||||||
Principal payments on debt |
| (18 | ) | | | (18 | ) | |||||||||||||
Proceeds from stock issuances |
32 | | | | 32 | |||||||||||||||
Excess tax benefit on the exercise of stock options |
5 | | | | 5 | |||||||||||||||
Dividends paid |
(82 | ) | | | | (82 | ) | |||||||||||||
Purchase of treasury stock |
(197 | ) | | | | (197 | ) | |||||||||||||
Other, net |
| (16 | ) | 16 | | | ||||||||||||||
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
(723 | ) | 471 | (8 | ) | | (260 | ) | ||||||||||||
Effect of exchange rate changes on cash |
| (6 | ) | (18 | ) | | (24 | ) | ||||||||||||
Net (decrease) increase in cash and cash equivalents |
(589 | ) | 133 | 53 | (29 | ) | (432 | ) | ||||||||||||
Cash and cash equivalents at beginning of period |
1,589 | 279 | 546 | (86 | ) | 2,328 | ||||||||||||||
Cash and cash equivalents at end of period |
$ | 1,000 | $ | 412 | $ | 599 | $ | (115 | ) | $ | 1,896 | |||||||||
Guarantor | Non-guarantor | |||||||||||||||||||
Parent | Subsidiaries | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
$ | (6 | ) | $ | 1,755 | $ | 259 | $ | 3 | $ | 2,011 | |||||||||
INVESTING ACTIVITIES |
||||||||||||||||||||
Capital expenditures |
(1 | ) | (1,968 | ) | (90 | ) | | (2,059 | ) | |||||||||||
Proceeds from asset dispositions and other |
| 6 | 1 | | 7 | |||||||||||||||
CASH USED IN INVESTING ACTIVITIES |
(1 | ) | (1,962 | ) | (89 | ) | | (2,052 | ) | |||||||||||
FINANCING ACTIVITIES |
||||||||||||||||||||
Net transfers from (to) Parent |
(94 | ) | 100 | (6 | ) | | | |||||||||||||
Payment on loan between subsidiaries |
| 113 | (113 | ) | | | ||||||||||||||
Intercompany dividends |
| 5 | (5 | ) | | | ||||||||||||||
Principal payments on debt |
| (12 | ) | | | (12 | ) | |||||||||||||
Proceeds from stock issuances |
25 | | | | 25 | |||||||||||||||
Excess tax benefit on the exercise of stock options |
4 | | | | 4 | |||||||||||||||
Dividends paid |
(76 | ) | | | | (76 | ) | |||||||||||||
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
(141 | ) | 206 | (124 | ) | | (59 | ) | ||||||||||||
Effect of exchange rate changes on cash |
| 11 | 14 | | 25 | |||||||||||||||
Net (decrease) increase in cash and cash equivalents |
(148 | ) | 10 | 60 | 3 | (75 | ) | |||||||||||||
Cash and cash equivalents at beginning of period |
1,310 | 258 | 443 | (59 | ) | 1,952 | ||||||||||||||
Cash and cash equivalents at end of period |
$ | 1,162 | $ | 268 | $ | 503 | $ | (56 | ) | $ | 1,877 | |||||||||
- 21 -
- 22 -
| the overall customer demand for our various services; | |
| the volumes of transportation services provided through our networks, primarily measured by our average daily volume and shipment weight; | |
| the mix of services purchased by our customers; | |
| the prices we obtain for our services, primarily measured by yield (revenue per package or pound or revenue per hundredweight for LTL freight shipments); | |
| our ability to manage our cost structure (capital expenditures and operating expenses) to match shifting volume levels; and | |
| the timing and amount of fluctuations in fuel prices and our ability to recover incremental fuel costs through our fuel surcharges. |
- 23 -
Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues |
$ | 10,587 | $ | 9,632 | 10 | $ | 21,108 | $ | 19,089 | 11 | ||||||||||||||
Operating income |
780 | 469 | 66 | 1,517 | 1,097 | 38 | ||||||||||||||||||
Operating margin |
7.4 | % | 4.9 | % | 250 | bp | 7.2 | % | 5.7 | % | 150 | bp | ||||||||||||
Net income |
$ | 497 | $ | 283 | 76 | $ | 961 | $ | 663 | 45 | ||||||||||||||
Diluted earnings
per share |
$ | 1.57 | $ | 0.89 | 76 | $ | 3.02 | $ | 2.09 | 44 |
Change in | Percent change in | |||||||||||||||||||||||||||||||
Change in | Percent change in | Operating Income | Operating Income | |||||||||||||||||||||||||||||
Revenues | Revenue | (Loss) | (Loss) | |||||||||||||||||||||||||||||
Three | Six | Three | Six | Three | Six | Three | Six | |||||||||||||||||||||||||
Months | Months | Months | Months | Months | Months | Months | Months | |||||||||||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||||||||
FedEx Express
segment |
$ | 591 | $ | 1,271 | 10 | 11 | $ | 78 | $ | 9 | 30 | 1 | ||||||||||||||||||||
FedEx Ground
segment |
262 | 579 | 13 | 14 | 102 | 222 | 34 | 38 | ||||||||||||||||||||||||
FedEx Freight
segment |
104 | 174 | 9 | 7 | 131 | 189 | 144 | 177 | ||||||||||||||||||||||||
FedEx Services
segment |
(7 | ) | (11 | ) | (2 | ) | (1 | ) | | | | | ||||||||||||||||||||
Other and
eliminations |
5 | 6 | NM | NM | | | | | ||||||||||||||||||||||||
$ | 955 | $ | 2,019 | 10 | 11 | $ | 311 | $ | 420 | 66 | 38 | |||||||||||||||||||||
- 24 -
(1) | Includes international domestic operations of a February 2011 business acquisition in India and a July 2011 business acquisition in Mexico. | |
(2) | Package statistics do not include the operations of FedEx SmartPost. |
- 25 -
(1) | Package statistics do not include the operations of FedEx SmartPost. |
- 26 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
$ | 3,982 | $ | 3,779 | $ | 7,986 | $ | 7,582 | ||||||||
Purchased transportation |
1,576 | 1,390 | 3,094 | 2,717 | ||||||||||||
Rentals and landing fees |
623 | 628 | 1,243 | 1,229 | ||||||||||||
Depreciation and amortization |
518 | 502 | 1,027 | 981 | ||||||||||||
Fuel |
1,200 | 938 | 2,444 | 1,825 | ||||||||||||
Maintenance and repairs |
511 | 473 | 1,062 | 990 | ||||||||||||
Impairment and other charges(1) |
| 67 | | 67 | ||||||||||||
Other |
1,397 | 1,386 | 2,735 | 2,601 | ||||||||||||
Total operating expenses |
$ | 9,807 | $ | 9,163 | $ | 19,591 | $ | 17,992 | ||||||||
(1) | Represents charges associated with the combination of FedEx Freight and FedEx National LTL operations, effective January 30, 2011. |
Percent of Revenue | Percent of Revenue | |||||||||||||||
Three | Three | Six | Six | |||||||||||||
Months | Months | Months | Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
37.6 | % | 39.2 | % | 37.8 | % | 39.7 | % | ||||||||
Purchased transportation |
14.9 | 14.4 | 14.7 | 14.2 | ||||||||||||
Rentals and landing fees |
5.9 | 6.5 | 5.9 | 6.4 | ||||||||||||
Depreciation and amortization |
4.9 | 5.2 | 4.9 | 5.2 | ||||||||||||
Fuel |
11.3 | 9.8 | 11.6 | 9.6 | ||||||||||||
Maintenance and repairs |
4.8 | 4.9 | 5.0 | 5.2 | ||||||||||||
Impairment and other charges |
| 0.7 | | 0.4 | ||||||||||||
Other |
13.2 | 14.4 | 12.9 | 13.6 | ||||||||||||
Total operating expenses |
92.6 | 95.1 | 92.8 | 94.3 | ||||||||||||
Operating margin |
7.4 | % | 4.9 | % | 7.2 | % | 5.7 | % | ||||||||
- 27 -
- 28 -
- 29 -
FedEx Express Segment
|
FedEx Express (express transportation) FedEx Trade Networks (global trade services) FedEx SupplyChain Systems (logistics services) |
|
FedEx Ground Segment
|
FedEx Ground (small-package ground delivery) FedEx SmartPost (small-parcel consolidator) |
|
FedEx Freight Segment
|
FedEx Freight (LTL freight transportation) FedEx Custom Critical (time-critical transportation) |
|
FedEx Services Segment
|
FedEx Services (sales, marketing and information technology functions) FedEx TechConnect (customer service, technical support, billings and collections) FedEx Office (document and business services and package acceptance) |
- 30 -
Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Package: |
||||||||||||||||||||||||
U.S. overnight box |
$ | 1,623 | $ | 1,489 | 9 | $ | 3,263 | $ | 2,980 | 9 | ||||||||||||||
U.S. overnight envelope |
421 | 416 | 1 | 872 | 848 | 3 | ||||||||||||||||||
U.S. deferred |
731 | 666 | 10 | 1,462 | 1,327 | 10 | ||||||||||||||||||
Total U.S. domestic package revenue |
2,775 | 2,571 | 8 | 5,597 | 5,155 | 9 | ||||||||||||||||||
International priority |
2,171 | 2,009 | 8 | 4,369 | 3,983 | 10 | ||||||||||||||||||
International domestic (1) |
217 | 165 | 32 | 424 | 313 | 35 | ||||||||||||||||||
Total package revenue |
5,163 | 4,745 | 9 | 10,390 | 9,451 | 10 | ||||||||||||||||||
Freight: |
||||||||||||||||||||||||
U.S. |
628 | 530 | 18 | 1,219 | 1,053 | 16 | ||||||||||||||||||
International priority |
470 | 435 | 8 | 919 | 841 | 9 | ||||||||||||||||||
International airfreight |
74 | 69 | 7 | 151 | 139 | 9 | ||||||||||||||||||
Total freight revenue |
1,172 | 1,034 | 13 | 2,289 | 2,033 | 13 | ||||||||||||||||||
Other (2) |
248 | 213 | 16 | 496 | 420 | 18 | ||||||||||||||||||
Total revenues |
6,583 | 5,992 | 10 | 13,175 | 11,904 | 11 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
2,377 | 2,253 | 6 | 4,790 | 4,511 | 6 | ||||||||||||||||||
Purchased transportation |
448 | 388 | 15 | 897 | 757 | 18 | ||||||||||||||||||
Rentals and landing fees |
421 | 427 | (1 | ) | 844 | 830 | 2 | |||||||||||||||||
Depreciation and amortization |
288 | 265 | 9 | 570 | 520 | 10 | ||||||||||||||||||
Fuel |
1,039 | 802 | 30 | 2,116 | 1,556 | 36 | ||||||||||||||||||
Maintenance and repairs |
354 | 320 | 11 | 734 | 672 | 9 | ||||||||||||||||||
Intercompany charges |
548 | 512 | 7 | 1,096 | 1,025 | 7 | ||||||||||||||||||
Other |
766 | 761 | (3) | 1 | 1,498 | 1,412 | (3) | 6 | ||||||||||||||||
Total operating expenses |
6,241 | 5,728 | 9 | 12,545 | 11,283 | 11 | ||||||||||||||||||
Operating income |
$ | 342 | $ | 264 | 30 | $ | 630 | $ | 621 | 1 | ||||||||||||||
Operating margin |
5.2 | % | 4.4 | % | 80 | bp | 4.8 | % | 5.2 | % | (40 | )bp |
(1) | International domestic revenues include our international intra-country express operations, including our February 2011 business acquisition in India and our July 2011 business acquisition in Mexico. | |
(2) | Other revenues include FedEx Trade Networks and FedEx SupplyChain Systems. | |
(3) | Includes a $66 million legal reserve associated with the ATA Airlines lawsuit. |
- 31 -
Percent of Revenue | Percent of Revenue | |||||||||||||||
Three | Three | Six | Six | |||||||||||||
Months | Months | Months | Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
36.1 | % | 37.6 | % | 36.3 | % | 37.9 | % | ||||||||
Purchased transportation |
6.8 | 6.5 | 6.8 | 6.3 | ||||||||||||
Rentals and landing fees |
6.4 | 7.1 | 6.4 | 7.0 | ||||||||||||
Depreciation and amortization |
4.4 | 4.4 | 4.3 | 4.4 | ||||||||||||
Fuel |
15.8 | 13.4 | 16.1 | 13.1 | ||||||||||||
Maintenance and repairs |
5.4 | 5.3 | 5.6 | 5.6 | ||||||||||||
Intercompany charges |
8.3 | 8.6 | 8.3 | 8.6 | ||||||||||||
Other |
11.6 | 12.7 | (1) | 11.4 | 11.9 | (1) | ||||||||||
Total operating expenses |
94.8 | 95.6 | 95.2 | 94.8 | ||||||||||||
Operating margin |
5.2 | % | 4.4 | % | 4.8 | % | 5.2 | % | ||||||||
(1) | Includes a $66 million legal reserve associated with the ATA Airlines lawsuit. |
Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Package Statistics(1) |
||||||||||||||||||||||||
Average daily package volume (ADV): |
||||||||||||||||||||||||
U.S. overnight box |
1,168 | 1,196 | (2 | ) | 1,151 | 1,182 | (3 | ) | ||||||||||||||||
U.S. overnight envelope |
582 | 626 | (7 | ) | 589 | 625 | (6 | ) | ||||||||||||||||
U.S. deferred |
838 | 865 | (3 | ) | 834 | 855 | (2 | ) | ||||||||||||||||
Total U.S. domestic ADV |
2,588 | 2,687 | (4 | ) | 2,574 | 2,662 | (3 | ) | ||||||||||||||||
International priority |
569 | 585 | (3 | ) | 556 | 575 | (3 | ) | ||||||||||||||||
International domestic(2) |
529 | 354 | 49 | 486 | 339 | 43 | ||||||||||||||||||
Total ADV |
3,686 | 3,626 | 2 | 3,616 | 3,576 | 1 | ||||||||||||||||||
Revenue per package (yield): |
||||||||||||||||||||||||
U.S. overnight box |
$ | 22.05 | $ | 19.75 | 12 | $ | 22.15 | $ | 19.70 | 12 | ||||||||||||||
U.S. overnight envelope |
11.48 | 10.54 | 9 | 11.56 | 10.59 | 9 | ||||||||||||||||||
U.S. deferred |
13.84 | 12.24 | 13 | 13.70 | 12.12 | 13 | ||||||||||||||||||
U.S. domestic composite |
17.01 | 15.19 | 12 | 16.99 | 15.13 | 12 | ||||||||||||||||||
International priority |
60.56 | 54.54 | 11 | 61.42 | 54.12 | 13 | ||||||||||||||||||
International domestic(2) |
6.51 | 7.39 | (12 | ) | 6.81 | 7.22 | (6 | ) | ||||||||||||||||
Composite package yield |
22.23 | 20.77 | 7 | 22.45 | 20.65 | 9 | ||||||||||||||||||
Freight Statistics(1) |
||||||||||||||||||||||||
Average daily freight pounds: |
||||||||||||||||||||||||
U.S. |
7,630 | 7,459 | 2 | 7,295 | 7,179 | 2 | ||||||||||||||||||
International priority |
3,451 | 3,320 | 4 | 3,289 | 3,171 | 4 | ||||||||||||||||||
International airfreight |
1,213 | 1,243 | (2 | ) | 1,188 | 1,242 | (4 | ) | ||||||||||||||||
Total average daily freight pounds |
12,294 | 12,022 | 2 | 11,772 | 11,592 | 2 | ||||||||||||||||||
Revenue per pound (yield): |
||||||||||||||||||||||||
U.S. |
$ | 1.31 | $ | 1.13 | 16 | $ | 1.31 | $ | 1.15 | 14 | ||||||||||||||
International priority |
2.16 | 2.08 | 4 | 2.18 | 2.07 | 5 | ||||||||||||||||||
International airfreight |
0.97 | 0.88 | 10 | 0.99 | 0.87 | 14 | ||||||||||||||||||
Composite freight yield |
1.51 | 1.36 | 11 | 1.52 | 1.37 | 11 |
(1) | Package and freight statistics include only the operations of FedEx Express. | |
(2) | International domestic statistics include our international intra-country express operations, including our February 2011 business acquisition in India and our July 2011 business acquisition in Mexico. |
- 32 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
U.S. Domestic and Outbound Fuel
Surcharge: |
||||||||||||||||
Low |
14.00 | % | 7.00 | % | 14.00 | % | 7.00 | % | ||||||||
High |
15.50 | 8.50 | 16.50 | 10.00 | ||||||||||||
Weighted-average |
14.67 | 7.82 | 15.10 | 8.17 | ||||||||||||
International Fuel Surcharges: |
||||||||||||||||
Low |
14.00 | 7.00 | 14.00 | 7.00 | ||||||||||||
High |
21.00 | 13.50 | 23.00 | 14.00 | ||||||||||||
Weighted-average |
17.33 | 10.59 | 17.63 | 10.83 |
- 33 -
Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
FedEx Ground |
$ | 2,143 | $ | 1,916 | 12 | $ | 4,259 | $ | 3,755 | 13 | ||||||||||||||
FedEx SmartPost |
196 | 161 | 22 | 358 | 283 | 27 | ||||||||||||||||||
Total revenues |
2,339 | 2,077 | 13 | 4,617 | 4,038 | 14 | ||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
362 | 318 | 14 | 713 | 625 | 14 | ||||||||||||||||||
Purchased transportation |
933 | 845 | 10 | 1,819 | 1,627 | 12 | ||||||||||||||||||
Rentals |
72 | 67 | 7 | 138 | 129 | 7 | ||||||||||||||||||
Depreciation and amortization |
94 | 83 | 13 | 187 | 165 | 13 | ||||||||||||||||||
Fuel |
5 | 3 | NM | 7 | 4 | NM | ||||||||||||||||||
Maintenance and repairs |
43 | 42 | 2 | 87 | 86 | 1 | ||||||||||||||||||
Intercompany charges |
245 | 227 | 8 | 486 | 448 | 8 | ||||||||||||||||||
Other |
187 | 196 | (5 | ) | 375 | 371 | 1 | |||||||||||||||||
Total operating expenses |
1,941 | 1,781 | 9 | 3,812 | 3,455 | 10 | ||||||||||||||||||
Operating income |
$ | 398 | $ | 296 | 34 | $ | 805 | $ | 583 | 38 | ||||||||||||||
Operating margin |
17.0 | % | 14.3 | % | 270 | bp | 17.4 | % | 14.4 | % | 300 | bp | ||||||||||||
Average daily package volume |
||||||||||||||||||||||||
FedEx Ground |
3,979 | 3,843 | 4 | 3,849 | 3,686 | 4 | ||||||||||||||||||
FedEx SmartPost |
1,737 | 1,484 | 17 | 1,573 | 1,287 | 22 | ||||||||||||||||||
Revenue per package (yield) |
||||||||||||||||||||||||
FedEx Ground |
$ | 8.53 | $ | 7.89 | 8 | $ | 8.62 | $ | 7.94 | 9 | ||||||||||||||
FedEx SmartPost |
$ | 1.79 | $ | 1.72 | 4 | $ | 1.78 | $ | 1.70 | 5 |
Percent of Revenue | Percent of Revenue | |||||||||||||||
Three | Three | Six | Six | |||||||||||||
Months | Months | Months | Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
15.5 | % | 15.3 | % | 15.4 | % | 15.5 | % | ||||||||
Purchased transportation |
39.9 | 40.7 | 39.4 | 40.3 | ||||||||||||
Rentals |
3.1 | 3.2 | 3.0 | 3.2 | ||||||||||||
Depreciation and amortization |
4.0 | 4.0 | 4.1 | 4.1 | ||||||||||||
Fuel |
0.2 | 0.1 | 0.2 | 0.1 | ||||||||||||
Maintenance and repairs |
1.8 | 2.0 | 1.9 | 2.1 | ||||||||||||
Intercompany charges |
10.5 | 10.9 | 10.5 | 11.1 | ||||||||||||
Other |
8.0 | 9.5 | 8.1 | 9.2 | ||||||||||||
Total operating expenses |
83.0 | 85.7 | 82.6 | 85.6 | ||||||||||||
Operating margin |
17.0 | % | 14.3 | % | 17.4 | % | 14.4 | % | ||||||||
- 34 -
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Low |
8.50 | % | 5.50 | % | 8.50 | % | 5.50 | % | ||||||||
High |
8.50 | 6.00 | 9.50 | 6.00 | ||||||||||||
Weighted-average |
8.50 | 5.66 | 8.90 | 5.74 |
- 35 -
Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Revenues |
$ | 1,325 | $ | 1,221 | 9 | $ | 2,653 | $ | 2,479 | 7 | ||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
577 | 584 | (1 | ) | 1,155 | 1,184 | (2 | ) | ||||||||||||||||
Purchased transportation |
221 | 185 | 19 | 428 | 389 | 10 | ||||||||||||||||||
Rentals |
29 | 31 | (6 | ) | 57 | 65 | (12 | ) | ||||||||||||||||
Depreciation and amortization |
44 | 62 | (29 | ) | 88 | 110 | (20 | ) | ||||||||||||||||
Fuel |
156 | 133 | 17 | 321 | 264 | 22 | ||||||||||||||||||
Maintenance and repairs |
48 | 45 | 7 | 98 | 91 | 8 | ||||||||||||||||||
Impairment and other charges (1) |
| 67 | NM | | 67 | NM | ||||||||||||||||||
Intercompany charges |
108 | 108 | | 217 | 217 | | ||||||||||||||||||
Other |
102 | 97 | 5 | 207 | 199 | 4 | ||||||||||||||||||
Total operating expenses |
1,285 | 1,312 | (2 | ) | 2,571 | 2,586 | (1 | ) | ||||||||||||||||
Operating income (loss) |
$ | 40 | $ | (91 | ) | 144 | $ | 82 | $ | (107 | ) | 177 | ||||||||||||
Operating margin |
3.0 | % | (7.5 | )% | 1,050 | bp | 3.1 | % | (4.3 | )% | 740 | bp | ||||||||||||
Average daily LTL shipments (in thousands) |
86.8 | 89.4 | (3 | ) | 85.8 | 90.6 | (5 | ) | ||||||||||||||||
Weight per LTL shipment (lbs) |
1,147 | 1,115 | 3 | 1,152 | 1,125 | 2 | ||||||||||||||||||
LTL yield (revenue per hundredweight) |
$ | 19.79 | $ | 18.27 | 8 | $ | 19.54 | $ | 17.77 | 10 |
(1) | Includes severance, impairment and other charges associated with the combination of FedEx Freight and FedEx National LTL operations, which was effective January 30, 2011. |
- 36 -
Percent of Revenue | Percent of Revenue | |||||||||||||||
Three | Three | Six | Six | |||||||||||||
Months | Months | Months | Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating expenses: |
||||||||||||||||
Salaries and employee benefits |
43.5 | % | 47.8 | % | 43.5 | % | 47.8 | % | ||||||||
Purchased transportation |
16.7 | 15.2 | 16.1 | 15.7 | ||||||||||||
Rentals |
2.2 | 2.5 | 2.2 | 2.6 | ||||||||||||
Depreciation and amortization |
3.3 | 5.1 | 3.3 | 4.4 | ||||||||||||
Fuel |
11.8 | 10.9 | 12.1 | 10.6 | ||||||||||||
Maintenance and repairs |
3.6 | 3.7 | 3.7 | 3.7 | ||||||||||||
Impairment and other charges(1) |
| 5.5 | | 2.7 | ||||||||||||
Intercompany charges |
8.2 | 8.9 | 8.2 | 8.8 | ||||||||||||
Other |
7.7 | 7.9 | 7.8 | 8.0 | ||||||||||||
Total operating expenses |
97.0 | 107.5 | 96.9 | 104.3 | ||||||||||||
Operating margin |
3.0 | % | (7.5 | )% | 3.1 | % | (4.3 | )% | ||||||||
(1) | Includes severance, impairment and other charges associated with the combination of FedEx Freight and FedEx National LTL operations, which was effective January 30, 2011. |
Three Months Ended | Six Months Ended | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Low |
22.20 | % | 15.30 | % | 19.80 | % | 15.10 | % | ||||||||
High |
23.70 | 16.40 | 23.70 | 16.40 | ||||||||||||
Weighted-average |
22.80 | 15.80 | 22.90 | 15.60 |
- 37 -
2011 | 2010 | |||||||
Operating activities: |
||||||||
Net income |
$ | 961 | $ | 663 | ||||
Noncash charges and credits |
1,449 | 1,243 | ||||||
Changes in assets and liabilities |
(242 | ) | 105 | |||||
Cash provided by operating activities |
2,168 | 2,011 | ||||||
Investing activities: |
||||||||
Capital expenditures |
(2,217 | ) | (2,059 | ) | ||||
Business acquisition, net of cash acquired |
(114 | ) | | |||||
Proceeds from asset dispositions and other |
15 | 7 | ||||||
Cash used in investing activities |
(2,316 | ) | (2,052 | ) | ||||
Financing activities: |
||||||||
Principal payments on debt |
(18 | ) | (12 | ) | ||||
Proceeds from stock issuances |
32 | 25 | ||||||
Dividends paid |
(82 | ) | (76 | ) | ||||
Purchase of treasury stock |
(197 | ) | | |||||
Other |
5 | 4 | ||||||
Cash used in financing activities |
(260 | ) | (59 | ) | ||||
Effect of exchange rate changes on cash |
(24 | ) | 25 | |||||
Net decrease in cash and cash equivalents |
$ | (432 | ) | $ | (75 | ) | ||
- 38 -
Percent Change | ||||||||||||||||||||||||
2011/2010 | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months | Six Months | |||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | Ended | Ended | |||||||||||||||||||
Aircraft and related equipment |
$ | 515 | $ | 660 | $ | 1,215 | $ | 1,407 | (22 | ) | (14 | ) | ||||||||||||
Facilities and sort equipment |
163 | 133 | 257 | 203 | 23 | 27 | ||||||||||||||||||
Vehicles |
235 | 92 | 410 | 195 | 155 | 110 | ||||||||||||||||||
Information and technology investments |
125 | 124 | 253 | 196 | 1 | 29 | ||||||||||||||||||
Other equipment |
69 | 38 | 82 | 58 | 82 | 41 | ||||||||||||||||||
Total capital expenditures |
$ | 1,107 | $ | 1,047 | $ | 2,217 | $ | 2,059 | 6 | 8 | ||||||||||||||
FedEx Express segment |
754 | 760 | 1,626 | 1,604 | (1 | ) | 1 | |||||||||||||||||
FedEx Ground segment |
160 | 119 | 254 | 191 | 34 | 33 | ||||||||||||||||||
FedEx Freight segment |
91 | 59 | 120 | 91 | 54 | 32 | ||||||||||||||||||
FedEx Services segment |
102 | 108 | 216 | 172 | (6 | ) | 26 | |||||||||||||||||
Other and eliminations |
| 1 | 1 | 1 | | | ||||||||||||||||||
Total capital expenditures |
$ | 1,107 | $ | 1,047 | $ | 2,217 | $ | 2,059 | 6 | 8 | ||||||||||||||
- 39 -
- 40 -
Payments Due by Fiscal Year (Undiscounted) | ||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||
2012 (1) | 2013 | 2014 | 2015 | 2016 | Thereafter | Total | ||||||||||||||||||||||
Operating activities: |
||||||||||||||||||||||||||||
Operating leases |
$ | 1,061 | $ | 1,785 | $ | 1,592 | $ | 1,443 | $ | 1,271 | $ | 6,724 | $ | 13,876 | ||||||||||||||
Non-capital purchase obligations and other |
92 | 109 | 41 | 25 | 37 | 130 | 434 | |||||||||||||||||||||
Interest on long-term debt |
63 | 98 | 97 | 78 | 78 | 1,659 | 2,073 | |||||||||||||||||||||
Quarterly contributions to our U.S. Pension Plans |
291 | | | | | | 291 | |||||||||||||||||||||
Investing activities: |
||||||||||||||||||||||||||||
Aircraft and aircraft-related capital
commitments(2) |
389 | 983 | 780 | 555 | 580 | 3,225 | 6,512 | |||||||||||||||||||||
Other capital purchase obligations |
53 | 19 | 16 | 6 | 3 | | 97 | |||||||||||||||||||||
Financing activities: |
||||||||||||||||||||||||||||
Debt |
| 300 | 250 | | | 989 | ` | 1,539 | ||||||||||||||||||||
Capital lease obligations |
15 | 120 | 2 | 2 | 1 | 13 | 153 | |||||||||||||||||||||
Total |
$ | 1,964 | $ | 3,414 | $ | 2,778 | $ | 2,109 | $ | 1,970 | $ | 12,740 | $ | 24,975 | ||||||||||||||
(1) | Cash obligations for the remainder of 2012. | |
(2) | Reflects the deferral during the second quarter of 2012 of the delivery of two B777F aircraft from 2013 to after 2016. |
- 41 -
- 42 -
| economic conditions in the global markets in which we operate; |
| damage to our reputation or loss of brand equity; |
| disruptions to the Internet or our technology infrastructure, including those impacting our computer systems and Web site, which can adversely affect our operations and reputation among customers; |
| the price and availability of jet and vehicle fuel; |
| our ability to manage our cost structure for capital expenditures and operating expenses, and match it to shifting and future customer volume levels; |
| the impact of intense competition on our ability to maintain or increase our prices (including our fuel surcharges in response to rising fuel costs) or to maintain or grow our market share; |
| our ability to maintain good relationships with our employees and prevent attempts by labor organizations to organize groups of our employees, which could significantly increase our operating costs and reduce our operational flexibility; |
| our ability to effectively operate, integrate, leverage and grow acquired businesses, and to continue to support the value we allocate to these acquired businesses, including their goodwill; |
| the impact of costs related to (i) challenges to the status of FedEx Grounds owner-operators as independent contractors, rather than employees, and (ii) any related changes to our relationship with these owner-operators; |
| any impacts on our businesses resulting from new domestic or international government laws and regulation, including regulatory actions affecting global aviation rights, increased air cargo and other security or pilot safety requirements, and tax, accounting, trade (such as protectionist measures enacted in response to weak economic conditions), labor (such as card-check legislation or changes to the Railway Labor Act affecting FedEx Express employees), environmental (such as global climate change legislation) or postal rules; |
| adverse weather conditions or localized natural disasters in key geographic areas, such as earthquakes, volcanoes, and hurricanes, which can disrupt our electrical service, damage our property, disrupt our operations, increase our fuel costs and adversely affect our shipment levels; |
| increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially pension and healthcare benefits; |
- 43 -
| the impact of any international conflicts or terrorist activities on the United States and global economies in general, the transportation industry or us in particular, and what effects these events will have on our costs or the demand for our services; |
| changes in foreign currency exchange rates, especially in the euro, Chinese yuan, Canadian dollar, British pound and Japanese yen, which can affect our sales levels and foreign currency sales prices; |
| market acceptance of our new service and growth initiatives; |
| any liability resulting from and the costs of defending against class-action litigation, such as wage-and-hour and discrimination and retaliation claims, and any other legal proceedings; |
| the outcome of future negotiations to reach new collective bargaining agreements including with the union that represents the pilots of FedEx Express (the current pilot contract is scheduled to become amendable in March 2013 unless the union exercises its option to shorten the contract, in which case the agreement would be amendable in March 2012); |
| any impact on our business from disruptions or modifications in service by the USPS, which is a significant customer and vendor of FedEx, as a consequence of the USPSs current financial difficulties or any resulting structural changes to its operations, network, service offerings or pricing; |
| the impact of technology developments on our operations and on demand for our services, and our ability to continue to identify and eliminate unnecessary information technology redundancy and complexity throughout the organization; |
| widespread outbreak of an illness or any other communicable disease, or any other public health crisis; |
| availability of financing on terms acceptable to us and our ability to maintain our current credit ratings, especially given the capital intensity of our operations; |
| significant changes in the volumes of shipments transported through our networks, customer demand for our various services or the prices we obtain for our services; and |
| other risks and uncertainties you can find in our press releases and SEC filings, including the risk factors identified under the heading Risk Factors in Managements Discussion and Analysis of Results of Operations and Financial Condition in our Annual Report, as updated by our quarterly reports on Form 10-Q. |
- 44 -
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
- 45 -
Total Number of | Maximum | |||||||||||||||
Shares Purchased | Number of | |||||||||||||||
as Part of | Shares That May | |||||||||||||||
Publicly | Yet Be Purchased | |||||||||||||||
Total Number of | Average Price | Announced | Under the | |||||||||||||
Period | Shares Purchased | Paid per Share | Programs | Programs | ||||||||||||
Sept. 1-30, 2011 |
2,820,000 | $ | 69.99 | 2,820,000 | 2,888,000 | |||||||||||
Oct. 1-31, 2011 |
| | | 2,888,000 | ||||||||||||
Nov. 1-30, 2011 |
| | | 2,888,000 | ||||||||||||
Total |
2,820,000 | $ | 69.99 | 2,820,000 | | |||||||||||
- 46 -
Exhibit | ||||
Number | Description of Exhibit | |||
10.1 | Compensation Arrangements with Outside Directors. |
|||
10.2 | Supplemental Agreement No.19 (and related side letter) dated as of October 27, 2011, amending
the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006 between The Boeing
Company and Federal Express Corporation. Confidential treatment has been requested for
confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. |
|||
10.3 | Letter Agreement dated September 9, 2011, amending the Transportation Agreement dated July
31, 2006 between the United States Postal Service and Federal Express Corporation.
Confidential treatment has been requested for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
|||
12.1 | Computation of Ratio of Earnings to Fixed Charges. |
|||
15.1 | Letter re: Unaudited Interim Financial Statements. |
|||
31.1 | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. |
|||
31.2 | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. |
|||
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
101.1 | Interactive Data Files. |
- 47 -
FEDEX CORPORATION |
||||
Date: December 16, 2011 | /s/ JOHN L. MERINO | |||
JOHN L. MERINO | ||||
CORPORATE VICE PRESIDENT AND PRINCIPAL ACCOUNTING OFFICER | ||||
- 48 -
Exhibit | ||||
Number | Description of Exhibit | |||
10.1 | Compensation Arrangements with Outside Directors. |
|||
10.2 | Supplemental Agreement No.19 (and related side letter) dated as of October 27, 2011, amending
the Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006 between The Boeing
Company and Federal Express Corporation. Confidential treatment has been requested for
confidential commercial and financial information, pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. |
|||
10.3 | Letter Agreement dated September 9, 2011, amending the Transportation Agreement dated July
31, 2006 between the United States Postal Service and Federal Express Corporation.
Confidential treatment has been requested for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
|||
12.1 | Computation of Ratio of Earnings to Fixed Charges. |
|||
15.1 | Letter re: Unaudited Interim Financial Statements. |
|||
31.1 | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. |
|||
31.2 | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under
the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. |
|||
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
101.1 | Interactive Data Files. |
E-1
| a quarterly retainer of $20,000; | |
| $2,000 for each in-person Board meeting attended; and | |
| $2,000 for each in-person committee meeting attended. |
Manufacturers | Current Delivery | Revised Delivery | ||||
Serial | Dates of | Dates of Affected | ||||
Number (MSN) | Table | Affected Aircraft | Aircraft | |||
[ * ] | Table 1-D | [ * ] | [ * ] | |||
[ * ] | Table 1 | [ * ] | [ * ] |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157 | 1 | SA 19 | ||
BOEING PROPRIETARY |
1. | Remove and replace, in its entirety, the Table of Contents with the revised Table of Contents attached hereto to reflect the changes made by this Supplemental Agreement No. 19. |
2. | Remove and replace, in its entirety, the Table 1 with the revised Table 1 attached hereto to reflect the delivery date, pricing and advance payments as a result of rescheduling the Affected Aircraft bearing MSN [ * ]. |
3. | Remove and replace, in its entirety, the Table 1-D with the revised Table 1-D attached hereto to reflect the delivery date, pricing and advance payments as a result of the rescheduling the Affected Aircraft bearing MSN [ * ]. |
4. | Customer and Boeing hereby acknowledge and confirm that Letter Agreement 6-1162-RRO-1144R5 entitled [ * ] is hereby cancelled and replaced in its entirety with Letter Agreement 6-1162-RRO-1144R6 entitled [ * ]. |
5. | [ * ] |
6. | This Supplemental Agreement No. 19 shall not be effective unless executed and delivered by Customer on or prior to October 31, 2011. |
7. | For the avoidance of doubt, notwithstanding the rescheduling of the Affected Aircraft, Special Matters Letter Agreement 6-1162-RCN-1790 continues to apply to MSN [ * ] and Special Matters Letter Agreement FED-PA-LA-1001683R1 continues to apply to MSN [ * ]. |
THE BOEING COMPANY
|
FEDERAL EXPRESS CORPORATION | |||||||||
By:
|
/s/ STUART C. ROSS
|
By: | /s/ PHILLIP C. BLUM
|
|||||||
Its:
|
Attorney-In-Fact | Its: | Vice President |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157 | 2 | SA 19 | ||
BOEING PROPRIETARY |
SA | ||||
NUMBER | ||||
ARTICLES |
||||
1. Quantity, Model and Description |
||||
2. Delivery Schedule |
||||
3. Price |
||||
4. Payment |
||||
5. Miscellaneous |
||||
TABLE |
||||
1. Aircraft Information Table |
19 | |||
1B Block B Aircraft Information Table |
4 | |||
1C Block C Aircraft Information Table |
13 | |||
1C1 Block C Aircraft Information Table (MSN [ * ]) |
11 | |||
1C2 Block C Aircraft Information Table |
16 | |||
1D Block D Aircraft Information Table |
19 | |||
EXHIBIT |
||||
A. Aircraft Configuration |
4 | |||
A1. Aircraft Configuration (Block B Aircraft) |
4 | |||
A2. Aircraft Configuration (Block C Aircraft except MSN [ * ]) |
11 | |||
A3. Aircraft Configuration (Block C Aircraft w/ MSN [ * ]) |
11 | |||
A4. Aircraft Configuration (Block D Aircraft) |
12 | |||
B. Aircraft Delivery Requirements and Responsibilities |
||||
SUPPLEMENTAL EXHIBITS |
||||
AE1. Escalation Adjustment/Airframe and Optional Features |
||||
CS1. Customer Support Variables |
||||
EE1. Engine Escalation/Engine Warranty and Patent Indemnity |
||||
SLP1. Service Life Policy Components |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157 | 3 | SA 19 | ||
BOEING PROPRIETARY |
SA | ||||||
LETTER AGREEMENT | NUMBER | |||||
3157-01
|
777 Spare Parts Initial Provisioning | |||||
3157-02
|
Demonstration Flight Waiver | |||||
6-1162-RCN-1785
|
[ * ] | |||||
6-1162-RCN-1789
|
Option Aircraft [Attachment to Letter 6-1162-RCN-1789] | Exercised in SA # 4 | ||||
6-1162-RCN-1790
|
Special Matters | |||||
6-1162-RCN-1791
|
Performance Guarantees | 4 | ||||
6-1162-RCN-1792
|
Liquidated Damages Non-Excusable Delay | |||||
6-1162-RCN-1793
|
Open Configuration Matters | |||||
6-1162-RCN-1795
|
AGTA Amended Articles | |||||
6-1162-RCN-1796
|
777 First-Look Inspection Program | |||||
6-1162-RCN-1797
|
Licensing and Customer Supplemental Type Certificates | |||||
6-1162-RCN-1798
|
777 Boeing Converted Freighter | Deleted in SA # 4 | ||||
6-1162-RCN-1798 R1
|
777 Boeing Converted Freighter | 4 | ||||
6-1162-RCN-1799
|
[ * ] | |||||
6-1162-RRO-1062
|
Option Aircraft | 4 | ||||
Attachment to Letter 6-1162-RRO-1062 | 16 | |||||
6-1162-RRO-1065
|
Performance Guarantees for Block B Aircraft | 4 | ||||
6-1162-RRO-1066R1
|
Special Matters for Block B Aircraft | 4 | ||||
6-1162-RRO-1067
|
Special Matters for Option Aircraft detailed in Letter Agreement 6-1162-RRO-1062 |
4 | ||||
6-1162-RRO-1068
|
Special Provision Block B Aircraft | 4 | ||||
FED-PA-LA-1000790R2
|
Special Matters for Block C Aircraft | 16 | ||||
FED-PA-LA-1001683R1
|
Special Matters for Block D Aircraft | 16 | ||||
6-1162-RRO-1144R6
|
[ * ] | 19 |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157 | 4 | SA 19 | ||
BOEING PROPRIETARY |
SUPPLEMENTAL AGREEMENTS | DATED AS OF: | |||
Supplemental Agreement No. 1 |
May 12, 2008 | |||
Supplemental Agreement No. 2 |
July 14, 2008 | |||
Supplemental Agreement No. 3 |
December 15, 2008 | |||
Supplemental Agreement No. 4 |
January 9, 2009 | |||
Supplemental Agreement No. 5 |
January 11, 2010 | |||
Supplemental Agreement No. 6 |
March 17, 2010 | |||
Supplemental Agreement No. 7 |
March 17, 2010 | |||
Supplemental Agreement No. 8 |
April 30, 2010 | |||
Supplemental Agreement No. 9 |
June 18, 2010 | |||
Supplemental Agreement No. 10 |
June 18, 2010 | |||
Supplemental Agreement No. 11 |
August 19, 2010 | |||
Supplemental Agreement No. 12 |
September 3, 2010 | |||
Supplemental Agreement No. 13 |
August 27, 2010 | |||
Supplemental Agreement No. 14 |
October 25, 2010 | |||
Supplemental Agreement No. 15 |
October 29, 2010 | |||
Supplemental Agreement No. 16 |
January 31, 2011 | |||
Supplemental Agreement No. 17 |
February 14, 2011 | |||
Supplemental Agreement No. 18 |
March 31, 2011 | |||
Supplemental Agreement No. 19 |
October __, 2011 |
P.A. No. 3157 | 5 | SA 19 | ||
BOEING PROPRIETARY |
Airframe Model/MTOW:
|
777-Freighter | 766000 pounds | Detail Specification: D019W007FED7F-1, Rev E dated August 29, 2011 | ||||||||
Engine Model/Thrust:
|
GE90-110B1L | 110100 pounds | Airframe Price Base Year/Escalation Formula: | Jul-06 | ECI-MFG/CPI | ||||||
Airframe Price:
|
[ * ] | Engine Price Base Year/Escalation Formula: | N/A | N/A | |||||||
Optional Features:
|
[ * ] | ||||||||||
Sub-Total of Airframe and Features:
|
[ * ] | Airframe Escalation Data: | |||||||||
Engine Price (Per Aircraft):
|
[ * ] | Base Year Index (ECI): | 180.3 | ||||||||
Aircraft Basic Price (Excluding BFE/SPE):
|
[ * ] | Base Year Index (CPI): | 195.4 | ||||||||
Buyer Furnished Equipment (BFE) Estimate:
|
[ * ] | ||||||||||
Seller Purchased Equipment (SPE) Estimate:
|
[ * ] | ||||||||||
Refundable Deposit/Aircraft at Proposal Accept:
|
[ * ] |
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery): | ||||||||||||||||
Escalation | Escalation Estimate | Balance At | ||||||||||||||
Delivery | Number of | Factor | Adv Payment Base | Signing | 24 Mos. | 21/18/15/12/9/6 Mos. | Total | |||||||||
Date | Aircraft | (Airframe) | MSN | Price Per A/P | 1% | 4% | 5% | 35% | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
2 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
2 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | ||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] |
[ * ] | ||
*** | In SA #15, the former two (2) [ * ] Aircraft have moved as follows: [ * ]. | |
**** | In SA # 19, one (1) [ * ] Aircraft was moved to [ * ]. | |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
FED 50269-1F and 58383-1F |
Boeing Proprietary | Supplemental Agreement No. 19 Page 1 |
Airframe Model/MTOW:
|
777-Freighter | 766000 pounds | Detail Specification: D019W007FED7F-1, Rev E dated August 29, 2011 | ||||||||
Engine Model/Thrust:
|
GE90-110B1L | 110100 pounds | Airframe Price Base Year/Escalation Formula: | Jul-10 | ECI-MFG/CPI | ||||||
Airframe Price:
|
[ * ] | Engine Price Base Year/Escalation Formula: | N/A | N/A | |||||||
Optional Features:
|
[ * ] | ||||||||||
Sub-Total of Airframe and Features:
|
[ * ] | Airframe Escalation Data: | |||||||||
Engine Price (Per Aircraft):
|
[ * ] | Base Year Index (ECI): | 106.8 | ||||||||
Aircraft Basic Price (Excluding BFE/SPE):
|
[ * ] | Base Year Index (CPI): | 215.6 | ||||||||
Buyer Furnished Equipment (BFE) Estimate:
|
[ * ] | ||||||||||
Seller Purchased Equipment (SPE) Estimate:
|
[ * ] | ||||||||||
Deposit per Aircraft:
|
As noted below |
Escalation | Escalation Estimate | Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery) | ||||||||||||||||
Delivery | Number of | Factor | Adv Payment Base | At Signing | 24 Mos. | 21/18/15/12/9/6 Mos. | Total | |||||||||||
Date | Aircraft | (Airframe) | MSN | Deposit | Price Per A/P | 1% | 4% | 5% | 35% | |||||||||
Block D Aircraft |
||||||||||||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | |||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | |||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | |||||||||
[ * ] |
1 | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | [ * ] | |||||||||
4 |
[ * ] | ||
4 | In SA #19, one (1) [ * ] Aircraft was moved to [ * ]. | |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
FED 54641, 55684, 56375, and 58384 |
Boeing Proprietary | Supplemental Agreement No. 19 Page 1 |
The Boeing Company P. O. Box 3707 Seattle, WA 98124-2207 |
Attention: | Mr. Kevin Burkhart |
Managing Director Aircraft Acquisitions & Sales |
Subject:
|
[ * ] | |
Reference:
|
Supplemental Agreement No. 8, Nos. 13 through No. 16, No. 18 and No. 19 to Purchase Agreement 3157, dated November 7, 2006, between The Boeing Company (Boeing) and Federal Express Corporation (Customer) relating to Model 777-FREIGHTER Aircraft (the Aircraft) |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157, 6-1162-RRO-1144R6 [ * ] |
BOEING PROPRIETARY | SA-19 Page 1 |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. No. 3157, 6-1162-RRO-1144R6 [ * ] |
BOEING PROPRIETARY | SA-19 Page 2 |
By
|
/s/ STUART C. ROSS
|
|||
Its
|
Attorney-In-Fact
|
By
|
/s/ PHILLIP C. BLUM
|
|||
Its
|
VP, Aircraft Acquisitions & SAO
|
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. 3157, 6-1162-RRO-1144R6 [ * ] |
BOEING PROPRIETARY | SA-19 Page 3 |
Attachment A to 6-1162-RRO-1144R6 | Page 1 of 2 |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
Attachment A to 6-1162-RRO-1144R6 | Page 2 of 2 |
* | Blank spaces contained confidential information which has been filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
P.A. 3157, 6-1162-RRO-1144R6 [ * ] |
BOEING PROPRIETARY | SA-19 Page 2 |
RE:
|
Transportation Agreement dated July 31, 2006 (the Transportation Agreement) between the United States Postal Service (the USPS) and Federal Express Corporation (FedEx) | |
Change in Conversion Factor |
* | Blank spaces contained confidential information which has been filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of
1934, as amended. |
FEDERAL EXPRESS CORPORATION
|
||
/s/ PAUL J. HERRON |
||
Paul J. Herron |
||
Vice President |
||
Postal Transportation Management |
THE UNITED STATES POSTAL SERVICE | ||||
By:
|
/s/ GREGORY BAYNE | |||
Its:
|
CONTRACTING OFFICER, AIR TRANSPORTATION CMC | |||
The USPS |
cc: |
||
Kyle Adams | ||
Joseph Anzelone | ||
Mary Taylor |
Six Months Ended | ||||||||||||||||||||||||||||
November 30, | Year Ended May 31, | |||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||||||
Earnings: |
||||||||||||||||||||||||||||
Income before income taxes |
$ | 1,501 | $ | 1,040 | $ | 2,265 | $ | 1,894 | $ | 677 | $ | 2,016 | $ | 3,215 | ||||||||||||||
Add back: |
||||||||||||||||||||||||||||
Interest expense, net of capitalized
interest |
22 | 45 | 86 | 79 | 85 | 98 | 136 | |||||||||||||||||||||
Amortization of debt issuance costs |
3 | 8 | 16 | 14 | 5 | 5 | 6 | |||||||||||||||||||||
Portion of rent expense representative
of interest factor |
423 | 417 | 852 | 806 | 795 | 784 | 766 | |||||||||||||||||||||
Earnings as adjusted |
$ | 1,949 | $ | 1,510 | $ | 3,219 | $ | 2,793 | $ | 1,562 | $ | 2,903 | $ | 4,123 | ||||||||||||||
Fixed Charges: |
||||||||||||||||||||||||||||
Interest expense, net of capitalized
interest |
$ | 22 | $ | 45 | $ | 86 | $ | 79 | $ | 85 | $ | 98 | $ | 136 | ||||||||||||||
Capitalized interest |
47 | 38 | 71 | 80 | 71 | 50 | 34 | |||||||||||||||||||||
Amortization of debt issuance costs |
3 | 8 | 16 | 14 | 5 | 5 | 6 | |||||||||||||||||||||
Portion of rent expense representative
of interest factor |
423 | 417 | 852 | 806 | 795 | 784 | 766 | |||||||||||||||||||||
$ | 495 | $ | 508 | $ | 1,025 | $ | 979 | $ | 956 | $ | 937 | $ | 942 | |||||||||||||||
Ratio of Earnings to Fixed Charges |
3.9 | 3.0 | 3.1 | 2.9 | 1.6 | 3.1 | 4.4 | |||||||||||||||||||||
1. | I have reviewed this quarterly report on Form 10-Q of FedEx Corporation (the registrant); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Frederick W. Smith | ||||
Frederick W. Smith | ||||
Chairman, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of FedEx Corporation (the registrant); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Alan B. Graf, Jr. | ||||
Alan B. Graf, Jr. | ||||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FedEx. |
/s/ Frederick W. Smith | ||||
Frederick W. Smith | ||||
Chairman, President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of FedEx. |
/s/ Alan B. Graf, Jr. | ||||
Alan B. Graf, Jr. | ||||
Executive Vice President and Chief Financial Officer |
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Commitments (Details 3) (USD $)
In Millions, unless otherwise specified |
Nov. 30, 2011
|
---|---|
Capital Leases Future Minimum Payments Due [Abstract] | |
2012 (remainder) | $ 15 |
2013 | 120 |
2014 | 2 |
2015 | 2 |
2016 | 1 |
Thereafter | 13 |
Total | 153 |
Less amount representing interest | 13 |
Present value of net minimum lease payments | $ 140 |
Financing Arrangements (Details) (USD $)
In Billions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Nov. 30, 2011
|
May 31, 2011
|
|
Financing Arrangements (Details) [Abstract] | ||
Line Of Credit Facility Maximum Borrowing Capacity | $ 1.0 | |
Line Of Credit Facility Current Borrowing Capacity | 1.0 | |
Line Of Credit Facility Expiration Date | April 2016 | |
Long Term Debt Exclusive of Capital Leases Carrying Value | 1.5 | 1.5 |
Long Term Debt Exclusive Of Capital Leases Fair Value | $ 1.9 | $ 1.9 |
Line Of Credit Facility Covenant Terms Leverage Ratio | 0.5 |
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified |
6 Months Ended | |
---|---|---|
Nov. 30, 2011
|
Dec. 14, 2011
|
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2011 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2012 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | FedEx Corporation | |
Entity Central Index Key | 0001048911 | |
Current Fiscal Year End Date | --05-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $ 24.4 | |
Entity Common Stock, Shares Outstanding | 314,484,094 |
Supplemental Cash Flow Information (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Nov. 30, 2011
|
Nov. 30, 2010
|
|
Supplemental Cash Flow Information [Abstract] | ||
Interest (net of capitalized interest) | $ 23 | $ 45 |
Income taxes | 276 | 340 |
Income tax refunds received | (6) | (11) |
Cash tax payments, net | $ 270 | $ 329 |
Retirement Plans
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2011
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Retirement Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | (5) Retirement Plans
We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report. Our retirement plans costs for the periods ended November 30 were as follows (in millions):
The three- and six-month periods ended November 30, 2011 reflect the full restoration on January 1, 2011 of company-matching contributions for our 401(k) plans.
Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):
Required contributions to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) for the six-month periods ended November 30 were $226 million in 2011 and $158 million in 2010. Our U.S. Pension Plans have ample funds to meet expected benefit payments. For the remainder of 2012, we anticipate making contributions to our U.S. Pension Plans of approximately $300 million ($127 million of which was paid in December 2011). |