UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 16, 2016
FEDEX CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number 1-15829
Delaware | 62-1721435 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) | |
942 South Shady Grove Road, Memphis, Tennessee | 38120 | |
(Address of principal executive offices) | (ZIP Code) |
Registrants telephone number, including area code: (901) 818-7500
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
Commission File Number 1-7806
Delaware | 71-0427007 | |
(State or other jurisdiction of | (IRS Employer | |
incorporation) | Identification No.) | |
3610 Hacks Cross Road, Memphis, Tennessee | 38125 | |
(Address of principal executive offices) | (ZIP Code) |
Registrants telephone number, including area code: (901) 369-3600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXPLANATORY NOTE
The information in this Report, including the exhibit, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder. Such information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
SECTION 2. FINANCIAL INFORMATION.
Item 2.02. Results of Operations and Financial Condition.
Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporations press release, dated March 16, 2016, announcing its and its wholly owned subsidiary Federal Express Corporations financial results for the fiscal quarter ended February 29, 2016.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is being furnished as part of this Report.
Exhibit |
Description | |
99.1 | Press Release of FedEx Corporation dated March 16, 2016. |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
FedEx Corporation | ||||
Date: March 16, 2016 | By: | /s/ JOHN L. MERINO | ||
John L. Merino | ||||
Corporate Vice President and | ||||
Principal Accounting Officer | ||||
Federal Express Corporation | ||||
Date: March 16, 2016 | By: | /s/ ELISE L. JORDAN | ||
Elise L. Jordan | ||||
Senior Vice President and | ||||
Chief Financial Officer |
3
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Press Release of FedEx Corporation dated March 16, 2016. |
E-1
Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Reports Strong Adjusted Third Quarter Earnings
MEMPHIS, Tenn., March 16, 2016 ... FedEx Corp. (NYSE: FDX) today reported adjusted earnings of $2.51 per diluted share for the third quarter ended February 29, compared to adjusted earnings of $2.03 per diluted share a year ago. Without adjustments, FedEx reported earnings of $1.84 for the third quarter compared to $2.18 per diluted share last year.
This years quarterly consolidated earnings have been adjusted for expenses related to certain legal matters ($0.61 per diluted share) and the pending acquisition of TNT Express ($0.06 per diluted share).
Our strong financial performance was driven by increasing demand for our broad portfolio of FedEx business solutions which helped increase revenue and adjusted profit for the corporation, said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. We sincerely appreciate the peak season efforts of our FedEx team members who delivered great service despite the challenges of stronger-than-expected shipping demand, driven by the growth in e-commerce.
Third Quarter Results
FedEx Corp. reported the following consolidated results for the third quarter:
Fiscal 2016 | Fiscal 2015 | |||||||
Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) | |||||
Revenue |
$12.7 billion | $12.7 billion | $11.7 billion | $11.7 billion | ||||
Operating income |
$1.16 billion | $864 million | $971 million | $1.04 billion | ||||
Operating margin |
9.2% | 6.8% | 8.3% | 8.9% | ||||
Net income |
$692 million | $507 million | $586 million | $628 million | ||||
Diluted EPS |
$2.51 | $1.84 | $2.03 | $2.18 |
Adjusted operating income rose 19% year over year primarily due to improved yield management and the continued positive impacts from profit improvement program initiatives at FedEx Express. The net impact of fuel and currency exchange rates also improved results. These benefits were partially offset by weaker operating results at FedEx Freight and FedEx Ground.
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During the quarter, the company acquired 7.3 million shares of FedEx common stock. Share repurchases benefited the quarters results by $0.07 per diluted share year over year.
Outlook
FedEx is tightening its adjusted earnings forecast to $10.70 to $10.90 per diluted share for fiscal 2016 before year-end mark-to-market pension accounting adjustments (MTM adjustments), compared to the previous forecast of $10.40 to $10.90 per diluted share. The outlook assumes moderate economic growth and excludes certain legal matters as well as any TNT-related costs or operating results. The capital spending forecast for the fiscal year is now $4.8 billion.
We now expect our fiscal 2016 adjusted earnings to be up 20% to 22% over last year, as we continue to benefit from our execution of the profit improvement program, said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. Our positive financial momentum should continue into our upcoming fiscal 2017, where we expect solid growth in earnings and cash flow.
FedEx Express Segment
For the third quarter, the FedEx Express segment reported:
| Revenue of $6.56 billion, down 1% from last years $6.66 billion |
| Operating income of $595 million, up 51% from $393 million a year ago |
| Operating margin of 9.1%, up from 5.9% the previous year |
Revenue decreased slightly as lower fuel surcharges and unfavorable currency exchange rates offset improved yield management and a 2% increase in U.S. domestic volume.
Operating results improved due to yield management efforts and U.S. domestic volume growth as well as the ongoing benefits from profit improvement program initiatives, which continued to improve revenue quality and constrain expense growth. Fuel and currency exchange rate changes had a positive net impact on the quarter.
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FedEx Ground Segment
For the third quarter, the FedEx Ground segment reported:
| Revenue of $4.41 billion, up 30% from last years $3.39 billion |
| Operating income of $557 million, down from $559 million a year ago |
| Operating margin of 12.6%, down from 16.5% the previous year |
Revenue increased due to an 11% increase in FedEx Ground volume, improved yield management, the recording of FedEx SmartPost revenues on a gross basis versus the previous net treatment and the inclusion of GENCO results for the entire quarter versus one month in the prior years results.
Operating results were negatively impacted by higher costs, driven significantly by network expansion and by peak season demand that exceeded both volume and package size expectations. Increased self-insurance expense and higher purchased transportation rates also negatively impacted the quarter. The change in FedEx SmartPost revenue reporting and the inclusion of GENCO results collectively reduced the operating margin year-over-year by 1.9 percentage points.
FedEx Ground has reached agreements in principle to settle all of the 19 cases on appeal in the multidistrict independent contractor litigation. The multidistrict court had found the owner-operators in these cases to be contractors as a matter of law, and the disputes involve a contractor model which FedEx Ground has not operated since 2011. In the third quarter, we recognized a liability at Corporate for the net expected loss of $204 million for these settlements and other contractor-related proceedings. The settlements will require court approval.
FedEx Freight Segment
For the third quarter, the FedEx Freight segment reported:
| Revenue of $1.45 billion, up 1% from last years $1.43 billion |
| Operating income of $56 million, down 16% from $67 million a year ago |
| Operating margin of 3.9%, down from 4.7% the previous year |
Revenue increased as less-than-truckload (LTL) average daily shipments increased 7%, mostly offset by lower fuel surcharges and weight per shipment.
Operating results declined primarily due to salaries and employee benefits expense outpacing volume growth.
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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 $49 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the worlds most admired and trusted employers, FedEx inspires its more than 340,000 team members to remain absolutely, positively focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.
Additional information and operating data are contained in the companys annual report, Form 10-K, Form 10-Qs and third quarter fiscal 2016 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EDT on March 16 are available on the companys 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 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 managements 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, our ability to execute on our profit improvement programs, legal challenges or changes related to FedEx Grounds owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.s
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and its subsidiaries press releases and 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: Jess Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
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RECONCILIATION OF FEDEX CORPORATIONS NON-GAAP FINANCIAL
MEASURES TO GAAP FINANCIAL MEASURES
The company believes that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance, including an understanding of items that are non-operational or non-recurring in nature. Excluding from third quarter fiscal 2016 results TNT Express-related expenses and certain legal settlement costs (net of recognized insurance recoveries), and from third quarter fiscal 2015 results the credit associated with the segment reporting change, will assist investors in understanding and allow for more accurate comparisons of the companys core operating performance. As required by SEC rules, the table below presents a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures. The inability to predict the amount of any future year-end mark-to-market pension accounting adjustments and the amount and timing of any operating results and integration planning and acquisition-related costs with respect to TNT Express makes a reconciliation of the forecasts for adjusted earnings per diluted share for the full year impracticable.
Third Quarter Fiscal 2016
Dollars in millions, except EPS | Operating | Net Income1 |
Diluted Earnings Per Share |
|||||||||||||
Income | Margin1 | |||||||||||||||
Non-GAAP measure |
$ | 1,160 | 9.2 | % | $ | 692 | $ | 2.51 | ||||||||
FedEx Ground legal matters2 |
(204 | ) | (1.6 | %) | (126 | ) | (0.46 | ) | ||||||||
FedEx Trade Networks legal matter2 |
(69 | ) | (0.5 | %) | (43 | ) | (0.15 | ) | ||||||||
TNT Express expenses |
(23 | ) | (0.2 | %) | (15 | ) | (0.06 | ) | ||||||||
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GAAP measure |
$ | 864 | 6.8 | % | $ | 507 | $ | 1.84 | ||||||||
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|
Third Quarter Fiscal 2015
Dollars in millions, except EPS | Operating | Net Income |
Diluted Earnings Per Share |
|||||||||||||
Income | Margin | |||||||||||||||
Non-GAAP measure |
$ | 971 | 8.3 | % | $ | 586 | $ | 2.03 | ||||||||
Segment reporting change3 |
67 | 0.6 | % | 42 | 0.15 | |||||||||||
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GAAP measure |
$ | 1,038 | 8.9 | % | $ | 628 | $ | 2.18 | ||||||||
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Notes
1 | Does not sum to total due to rounding. |
2 | Net of recognized insurance recovery. |
3 | Represents the credit at Corporate resulting from the change in recognizing expected return on plan assets for our defined benefit pension and post-retirement healthcare plans at the segment level associated with the adoption of mark-to-market accounting, as discussed further in our fiscal 2015 Annual Report on Form 10-K. |
# # #
6
FEDEX CORP. FINANCIAL HIGHLIGHTS
Third Quarter Fiscal 2016
(In millions, except earnings per share)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Feb. 29, 2016 | Feb. 28, 2015 | % | Feb. 29, 2016 | Feb. 28, 2015 | % | |||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
FedEx Express segment |
$ | 6,557 | $ | 6,656 | (1 | %) | $ | 19,736 | $ | 20,542 | (4 | %) | ||||||||||||
FedEx Ground segment |
4,408 | 3,393 | 30 | % | 12,288 | 9,416 | 31 | % | ||||||||||||||||
FedEx Freight segment |
1,447 | 1,428 | 1 | % | 4,595 | 4,622 | (1 | %) | ||||||||||||||||
FedEx Services segment |
384 | 370 | 4 | % | 1,177 | 1,138 | 3 | % | ||||||||||||||||
Eliminations and other |
(142 | ) | (131 | ) | NM | (410 | ) | (379 | ) | NM | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Revenue |
12,654 | 11,716 | 8 | % | 37,386 | 35,339 | 6 | % | ||||||||||||||||
Operating Expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
4,712 | 4,335 | 9 | % | 13,807 | 12,678 | 9 | % | ||||||||||||||||
Purchased transportation |
2,623 | 2,165 | 21 | % | 7,505 | 6,404 | 17 | % | ||||||||||||||||
Rentals and landing fees |
744 | 686 | 8 | % | 2,121 | 2,009 | 6 | % | ||||||||||||||||
Depreciation and amortization |
663 | 652 | 2 | % | 1,964 | 1,954 | 1 | % | ||||||||||||||||
Fuel |
537 | 810 | (34 | %) | 1,864 | 2,982 | (37 | %) | ||||||||||||||||
Maintenance and repairs |
504 | 505 | | 1,581 | 1,604 | (1 | %) | |||||||||||||||||
Other |
2,007 | 1,525 | 32 | % | 5,399 | 4,520 | 19 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Operating Expenses |
11,790 | 10,678 | 10 | % | 34,241 | 32,151 | 7 | % | ||||||||||||||||
Operating Income: |
||||||||||||||||||||||||
FedEx Express segment |
595 | 393 | 51 | % | 1,762 | 1,262 | 40 | % | ||||||||||||||||
FedEx Ground segment |
557 | 559 | | 1,620 | 1,569 | 3 | % | |||||||||||||||||
FedEx Freight segment |
56 | 67 | (16 | %) | 289 | 347 | (17 | %) | ||||||||||||||||
Corporate, eliminations and other |
(344 | ) | 19 | NM | (526 | ) | 10 | NM | ||||||||||||||||
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|
|||||||||||||||||
Total Operating Income |
864 | 1,038 | (17 | %) | 3,145 | 3,188 | (1 | %) | ||||||||||||||||
Other Expense: |
||||||||||||||||||||||||
Interest, net |
(81 | ) | (58 | ) | NM | (218 | ) | (153 | ) | NM | ||||||||||||||
Other, net |
(1 | ) | 5 | NM | (6 | ) | 8 | NM | ||||||||||||||||
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|||||||||||||||||
Total Other Expense |
(82 | ) | (53 | ) | NM | (224 | ) | (145 | ) | NM | ||||||||||||||
Pretax Income |
782 | 985 | (21 | %) | 2,921 | 3,043 | (4 | %) | ||||||||||||||||
Provision for Income Taxes |
275 | 357 | (23 | %) | 1,031 | 1,099 | (6 | %) | ||||||||||||||||
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Net Income |
$ | 507 | $ | 628 | (19 | %) | $ | 1,890 | $ | 1,944 | (3 | %) | ||||||||||||
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Diluted Earnings Per Share |
$ | 1.84 | $ | 2.18 | (16 | %) | $ | 6.71 | $ | 6.75 | (1 | %) | ||||||||||||
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Weighted Average Common and Common Equivalent Shares |
275 | 287 | (4 | %) | 281 | 288 | (2 | %) | ||||||||||||||||
Capital Expenditures |
$ | 1,000 | $ | 1,080 | (7 | %) | $ | 3,562 | $ | 2,969 | 20 | % |
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
Third Quarter Fiscal 2016
(In millions)
Feb. 29, 2016 | ||||||||
(Unaudited) | May 31, 2015 | |||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 2,841 | $ | 3,763 | ||||
Receivables, less allowances |
5,634 | 5,719 | ||||||
Spare parts, supplies and fuel, less allowances |
476 | 498 | ||||||
Deferred income taxes |
608 | 606 | ||||||
Prepaid expenses and other |
678 | 355 | ||||||
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|
|||||
Total current assets |
10,237 | 10,941 | ||||||
Property and Equipment, at Cost |
46,032 | 42,864 | ||||||
Less accumulated depreciation and amortization |
23,480 | 21,989 | ||||||
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|
|||||
Net property and equipment |
22,552 | 20,875 | ||||||
Other Long-Term Assets |
||||||||
Goodwill |
3,764 | 3,810 | ||||||
Other assets |
1,266 | 1,443 | ||||||
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Total other long-term assets |
5,030 | 5,253 | ||||||
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|||||
$ | 37,819 | $ | 37,069 | |||||
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LIABILITIES AND STOCKHOLDERS INVESTMENT |
||||||||
Current Liabilities |
||||||||
Current portion of long-term debt |
$ | 11 | $ | 19 | ||||
Accrued salaries and employee benefits |
1,451 | 1,436 | ||||||
Accounts payable |
2,024 | 2,066 | ||||||
Accrued expenses |
2,453 | 2,436 | ||||||
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|||||
Total current liabilities |
5,939 | 5,957 | ||||||
Long-Term Debt, Less Current Portion |
8,477 | 7,249 | ||||||
Other Long-Term Liabilities |
||||||||
Deferred income taxes |
2,046 | 1,747 | ||||||
Pension, postretirement healthcare and other benefit obligations |
4,628 | 4,893 | ||||||
Self-insurance accruals |
1,282 | 1,120 | ||||||
Deferred lease obligations |
723 | 711 | ||||||
Deferred gains, principally related to aircraft transactions |
161 | 181 | ||||||
Other liabilities |
236 | 218 | ||||||
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|
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Total other long-term liabilities |
9,076 | 8,870 | ||||||
Commitments and Contingencies |
||||||||
Common Stockholders Investment |
||||||||
Common stock, $0.10 par value, 800 million shares authorized |
32 | 32 | ||||||
Additional paid-in capital |
2,869 | 2,786 | ||||||
Retained earnings |
18,481 | 16,900 | ||||||
Accumulated other comprehensive (loss) income |
(159 | ) | 172 | |||||
Treasury stock, at cost |
(6,896 | ) | (4,897 | ) | ||||
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|
|||||
Total common stockholders investment |
14,327 | 14,993 | ||||||
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|||||
$ | 37,819 | $ | 37,069 | |||||
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FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Third Quarter Fiscal 2016
(In millions)
(Unaudited)
Three Months Ended | ||||||||
Feb. 29, 2016 | Feb. 28, 2015 | |||||||
Operating Activities: |
||||||||
Net income |
$ | 1,890 | $ | 1,944 | ||||
Noncash charges: |
||||||||
Depreciation and amortization |
1,964 | 1,954 | ||||||
Other, net |
493 | 438 | ||||||
Changes in operating assets and liabilities, net |
(551 | ) | (863 | ) | ||||
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|
|
|
|||||
Net cash provided by operating activities |
3,796 | 3,473 | ||||||
Investing Activities: |
||||||||
Capital expenditures |
(3,562 | ) | (2,969 | ) | ||||
Business acquisitions, net of cash acquired |
| (1,429 | ) | |||||
Asset dispositions and other, net |
(17 | ) | 16 | |||||
|
|
|
|
|||||
Net cash used in investing activities |
(3,579 | ) | (4,382 | ) | ||||
Financing Activities: |
||||||||
Principal payments on debt |
(28 | ) | (1 | ) | ||||
Proceeds from debt issuances |
1,238 | 2,491 | ||||||
Proceeds from stock issuances |
79 | 272 | ||||||
Excess tax benefit on the exercise of stock options |
9 | 31 | ||||||
Dividends paid |
(210 | ) | (171 | ) | ||||
Purchases of treasury stock |
(2,133 | ) | (1,016 | ) | ||||
Other, net |
(16 | ) | (23 | ) | ||||
|
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|
|
|||||
Net cash (used in) provided by financing activities |
(1,061 | ) | 1,583 | |||||
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|
|
|||||
Effect of exchange rate changes on cash |
(78 | ) | (104 | ) | ||||
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|
|
|
|||||
Net (decrease) increase in cash and cash equivalents |
(922 | ) | 570 | |||||
Cash and cash equivalents at beginning of period |
3,763 | 2,908 | ||||||
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|
|||||
Cash and cash equivalents at end of period |
$ | 2,841 | $ | 3,478 | ||||
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FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
Third Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Feb. 29, 2016 | Feb. 28, 2015 | % | Feb. 29, 2016 | Feb. 28, 2015 | % | |||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Package Revenue: |
||||||||||||||||||||||||
U.S. Overnight Box |
$ | 1,704 | $ | 1,653 | 3 | % | $ | 5,044 | $ | 5,040 | | |||||||||||||
U.S. Overnight Envelope |
408 | 392 | 4 | % | 1,227 | 1,207 | 2 | % | ||||||||||||||||
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|
|||||||||||||||||
Total U.S. Overnight |
2,112 | 2,045 | 3 | % | 6,271 | 6,247 | | |||||||||||||||||
U.S. Deferred |
926 | 895 | 3 | % | 2,568 | 2,524 | 2 | % | ||||||||||||||||
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|
|||||||||||||||||
Total U.S. Package Revenue |
3,038 | 2,940 | 3 | % | 8,839 | 8,771 | 1 | % | ||||||||||||||||
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International Priority |
1,346 | 1,463 | (8 | %) | 4,243 | 4,742 | (11 | %) | ||||||||||||||||
International Economy |
546 | 560 | (3 | %) | 1,688 | 1,729 | (2 | %) | ||||||||||||||||
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|
|||||||||||||||||
Total International Export Package |
1,892 | 2,023 | (6 | %) | 5,931 | 6,471 | (8 | %) | ||||||||||||||||
International Domestic1 |
303 | 328 | (8 | %) | 966 | 1,082 | (11 | %) | ||||||||||||||||
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|
|||||||||||||||||
Total Package Revenue |
5,233 | 5,291 | (1 | %) | 15,736 | 16,324 | (4 | %) | ||||||||||||||||
Freight Revenue: |
||||||||||||||||||||||||
U.S. |
647 | 580 | 12 | % | 1,798 | 1,745 | 3 | % | ||||||||||||||||
International Priority |
325 | 375 | (13 | %) | 1,029 | 1,182 | (13 | %) | ||||||||||||||||
International Airfreight |
30 | 45 | (33 | %) | 98 | 133 | (26 | %) | ||||||||||||||||
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|
|||||||||||||||||
Total Freight Revenue |
1,002 | 1,000 | | 2,925 | 3,060 | (4 | %) | |||||||||||||||||
Other Revenue2 |
322 | 365 | (12 | %) | 1,075 | 1,158 | (7 | %) | ||||||||||||||||
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|
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Total Express Revenue |
$ | 6,557 | $ | 6,656 | (1 | %) | $ | 19,736 | $ | 20,542 | (4 | %) | ||||||||||||
Operating Expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
2,602 | 2,572 | 1 | % | 7,638 | 7,574 | 1 | % | ||||||||||||||||
Purchased transportation |
545 | 614 | (11 | %) | 1,762 | 1,942 | (9 | %) | ||||||||||||||||
Rentals and landing fees |
452 | 436 | 4 | % | 1,261 | 1,284 | (2 | %) | ||||||||||||||||
Depreciation and amortization |
342 | 364 | (6 | %) | 1,038 | 1,106 | (6 | %) | ||||||||||||||||
Fuel |
455 | 697 | (35 | %) | 1,579 | 2,573 | (39 | %) | ||||||||||||||||
Maintenance and repairs |
306 | 324 | (6 | %) | 981 | 1,060 | (7 | %) | ||||||||||||||||
Intercompany charges |
464 | 460 | 1 | % | 1,371 | 1,360 | 1 | % | ||||||||||||||||
Other |
796 | 796 | | 2,344 | 2,381 | (2 | %) | |||||||||||||||||
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|
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Total Operating Expenses |
5,962 | 6,263 | (5 | %) | 17,974 | 19,280 | (7 | %) | ||||||||||||||||
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|
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Operating Income |
$ | 595 | $ | 393 | 51 | % | $ | 1,762 | $ | 1,262 | 40 | % | ||||||||||||
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|
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Operating Margin |
9.1 | % | 5.9 | % | 3.2 pts | 8.9 | % | 6.1 | % | 2.8 pts |
1 | - International Domestic revenues represent international intra-country express operations. |
2 | - Includes FedEx Trade Networks, FedEx SupplyChain Systems and Bongo. |
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
Third Quarter Fiscal 2016
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Feb. 29, 2016 | Feb. 28, 2015 | % | Feb. 29, 2016 | Feb. 28, 2015 | % | |||||||||||||||||||
PACKAGE STATISTICS1 |
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Average Daily Package Volume (000s): |
||||||||||||||||||||||||
U.S. Overnight Box |
1,316 | 1,258 | 5 | % | 1,271 | 1,243 | 2 | % | ||||||||||||||||
U.S. Overnight Envelope |
535 | 516 | 4 | % | 536 | 521 | 3 | % | ||||||||||||||||
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|
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Total U.S. Overnight Package |
1,851 | 1,774 | 4 | % | 1,807 | 1,764 | 2 | % | ||||||||||||||||
U.S. Deferred |
1,015 | 1,024 | (1 | %) | 926 | 928 | | |||||||||||||||||
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Total U.S. Domestic Package |
2,866 | 2,798 | 2 | % | 2,733 | 2,692 | 2 | % | ||||||||||||||||
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|
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International Priority |
386 | 398 | (3 | %) | 393 | 410 | (4 | %) | ||||||||||||||||
International Economy |
179 | 175 | 2 | % | 180 | 175 | 3 | % | ||||||||||||||||
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|
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Total International Export Package |
565 | 573 | (1 | %) | 573 | 585 | (2 | %) | ||||||||||||||||
International Domestic2 |
878 | 831 | 6 | % | 895 | 854 | 5 | % | ||||||||||||||||
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|
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Total Average Daily Packages |
4,309 | 4,202 | 3 | % | 4,201 | 4,131 | 2 | % | ||||||||||||||||
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Yield (Revenue Per Package): |
||||||||||||||||||||||||
U.S. Overnight Box |
$ | 20.56 | $ | 20.85 | (1 | %) | $ | 20.77 | $ | 21.34 | (3 | %) | ||||||||||||
U.S. Overnight Envelope |
12.11 | 12.07 | | 11.99 | 12.18 | (2 | %) | |||||||||||||||||
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U.S. Overnight Composite |
18.11 | 18.30 | (1 | %) | 18.17 | 18.64 | (3 | %) | ||||||||||||||||
U.S. Deferred |
14.48 | 13.88 | 4 | % | 14.52 | 14.32 | 1 | % | ||||||||||||||||
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|
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U.S. Domestic Composite |
16.83 | 16.68 | 1 | % | 16.93 | 17.15 | (1 | %) | ||||||||||||||||
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International Priority |
55.35 | 58.40 | (5 | %) | 56.59 | 60.79 | (7 | %) | ||||||||||||||||
International Economy |
48.36 | 50.60 | (4 | %) | 49.02 | 52.03 | (6 | %) | ||||||||||||||||
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|
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Total International Export Composite |
53.14 | 56.01 | (5 | %) | 54.21 | 58.17 | (7 | %) | ||||||||||||||||
International Domestic2 |
5.47 | 6.28 | (13 | %) | 5.65 | 6.67 | (15 | %) | ||||||||||||||||
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Composite Package Yield |
$ | 19.27 | $ | 19.99 | (4 | %) | $ | 19.61 | $ | 20.80 | (6 | %) | ||||||||||||
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FREIGHT STATISTICS |
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Average Daily Freight Pounds (000s): |
||||||||||||||||||||||||
U.S. |
8,340 | 8,145 | 2 | % | 7,937 | 7,831 | 1 | % | ||||||||||||||||
International Priority |
2,414 | 2,823 | (14 | %) | 2,503 | 2,866 | (13 | %) | ||||||||||||||||
International Airfreight |
622 | 718 | (13 | %) | 636 | 673 | (5 | %) | ||||||||||||||||
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|
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Total Avg Daily Freight Pounds |
11,376 | 11,686 | (3 | %) | 11,076 | 11,370 | (3 | %) | ||||||||||||||||
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Revenue Per Freight Pound: |
||||||||||||||||||||||||
U.S. |
$ | 1.23 | $ | 1.13 | 9 | % | $ | 1.19 | $ | 1.17 | 2 | % | ||||||||||||
International Priority |
2.14 | 2.11 | 1 | % | 2.15 | 2.17 | (1 | %) | ||||||||||||||||
International Airfreight |
0.76 | 1.00 | (24 | %) | 0.81 | 1.04 | (22 | %) | ||||||||||||||||
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|
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Composite Freight Yield |
$ | 1.40 | $ | 1.36 | 3 | % | $ | 1.38 | $ | 1.42 | (3 | %) | ||||||||||||
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|
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Operating Weekdays |
63 | 63 | | 191 | 190 | 1 | % |
1 | - Package and freight statistics include only the operations of FedEx Express. |
2 | - International Domestic revenues represent international intra-country express operations. |
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Feb. 29, 20162 | Feb. 28, 2015 | % | Feb. 29, 20162 | Feb. 28, 2015 | % | |||||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||
FedEx Ground1 |
$ | 4,025 | $ | 3,306 | 22 | % | $ | 11,161 | $ | 9,329 | 20 | % | ||||||||||||
GENCO |
383 | 87 | NM | 1,127 | 87 | NM | ||||||||||||||||||
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|
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Total Revenues |
4,408 | 3,393 | 30 | % | 12,288 | 9,416 | 31 | % | ||||||||||||||||
Operating Expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
756 | 564 | 34 | % | 2,105 | 1,497 | 41 | % | ||||||||||||||||
Purchased transportation1 |
1,891 | 1,348 | 40 | % | 5,130 | 3,765 | 36 | % | ||||||||||||||||
Rentals |
166 | 126 | 32 | % | 466 | 349 | 34 | % | ||||||||||||||||
Depreciation and amortization |
159 | 136 | 17 | % | 451 | 381 | 18 | % | ||||||||||||||||
Fuel |
3 | 3 | | 8 | 9 | (11 | %) | |||||||||||||||||
Maintenance and repairs |
71 | 61 | 16 | % | 209 | 174 | 20 | % | ||||||||||||||||
Intercompany charges |
312 | 281 | 11 | % | 910 | 834 | 9 | % | ||||||||||||||||
Other |
493 | 315 | 57 | % | 1,389 | 838 | 66 | % | ||||||||||||||||
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|
|
|
|
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|
|||||||||||||||||
Total Operating Expenses |
3,851 | 2,834 | 36 | % | 10,668 | 7,847 | 36 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Income |
$ | 557 | $ | 559 | | $ | 1,620 | $ | 1,569 | 3 | % | |||||||||||||
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|
|
|
|
|
|
|||||||||||||||||
Operating Margin |
12.6 | % | 16.5 | % | (3.9 pts | ) | 13.2 | % | 16.7 | % | (3.5 pts | ) | ||||||||||||
OPERATING STATISTICS3 |
||||||||||||||||||||||||
Operating Weekdays |
63 | 63 | | 191 | 190 | 1 | % | |||||||||||||||||
Average Daily Package Volume (000s) |
8,339 | 7,496 | 11 | % | 7,551 | 6,970 | 8 | % | ||||||||||||||||
Yield (Revenue Per Package)1 |
$ | 7.65 | $ | 7.06 | 8 | % | $ | 7.72 | $ | 7.06 | 9 | % |
1 | - Effective June 1, 2015, FedEx Ground began recording FedEx SmartPost service revenues on a gross basis (including postal fees). Postal fees, which previously were netted against revenue, are now charged to purchased transportation. |
2 | - The financial results of GENCO are included in the current year. |
3 | - Operating statistics include only the operations of FedEx Ground (including FedEx SmartPost). FedEx SmartPost was merged into FedEx Ground on August 31, 2015. |
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
Feb. 29, 2016 | Feb. 28, 2015 | % | Feb. 29, 2016 | Feb. 28, 2015 | % | |||||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
Revenue |
$ | 1,447 | $ | 1,428 | 1 | % | $ | 4,595 | $ | 4,622 | (1 | %) | ||||||||||||
Operating Expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
716 | 664 | 8 | % | 2,168 | 2,006 | 8 | % | ||||||||||||||||
Purchased transportation |
223 | 235 | (5 | %) | 720 | 792 | (9 | %) | ||||||||||||||||
Rentals |
33 | 33 | | 109 | 96 | 14 | % | |||||||||||||||||
Depreciation and amortization |
65 | 54 | 20 | % | 185 | 170 | 9 | % | ||||||||||||||||
Fuel |
80 | 109 | (27 | %) | 277 | 399 | (31 | %) | ||||||||||||||||
Maintenance and repairs |
48 | 49 | (2 | %) | 154 | 148 | 4 | % | ||||||||||||||||
Intercompany charges |
112 | 108 | 4 | % | 337 | 329 | 2 | % | ||||||||||||||||
Other |
114 | 109 | 5 | % | 356 | 335 | 6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Operating Expenses |
1,391 | 1,361 | 2 | % | 4,306 | 4,275 | 1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Income |
$ | 56 | $ | 67 | (16 | %) | $ | 289 | $ | 347 | (17 | %) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating Margin |
3.9 | % | 4.7 | % | (0.8 pts | ) | 6.3 | % | 7.5 | % | (1.2 pts | ) | ||||||||||||
OPERATING STATISTICS |
||||||||||||||||||||||||
LTL Operating Weekdays |
62 | 62 | | 189 | 188 | 1 | % | |||||||||||||||||
Average Daily LTL Shipments (000s) |
||||||||||||||||||||||||
Priority |
64.7 | 62.0 | 4 | % | 66.7 | 67.1 | (1 | %) | ||||||||||||||||
Economy |
30.0 | 26.8 | 12 | % | 30.7 | 28.4 | 8 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total Average Daily LTL Shipments |
94.7 | 88.8 | 7 | % | 97.4 | 95.5 | 2 | % | ||||||||||||||||
Weight Per LTL Shipment (lbs) |
||||||||||||||||||||||||
Priority |
1,189 | 1,287 | (8 | %) | 1,189 | 1,262 | (6 | %) | ||||||||||||||||
Economy |
1,152 | 1,007 | 14 | % | 1,154 | 1,010 | 14 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Composite Weight Per LTL Shipment |
1,177 | 1,203 | (2 | %) | 1,178 | 1,187 | (1 | %) | ||||||||||||||||
LTL Revenue/Shipment |
||||||||||||||||||||||||
Priority |
$ | 218.15 | $ | 231.92 | (6 | %) | $ | 220.03 | $ | 229.43 | (4 | %) | ||||||||||||
Economy |
258.35 | 265.66 | (3 | %) | 263.84 | 265.51 | (1 | %) | ||||||||||||||||
|
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|
|
|
|
|
|
|||||||||||||||||
Composite LTL Revenue/Shipment |
$ | 231.61 | $ | 242.52 | (4 | %) | $ | 234.07 | $ | 240.30 | (3 | %) | ||||||||||||
LTL Yield (Revenue/CWT) |
||||||||||||||||||||||||
Priority |
$ | 18.35 | $ | 18.02 | 2 | % | $ | 18.51 | $ | 18.18 | 2 | % | ||||||||||||
Economy |
22.42 | 26.38 | (15 | %) | 22.86 | 26.29 | (13 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Composite LTL Yield |
$ | 19.67 | $ | 20.17 | (2 | %) | $ | 19.87 | $ | 20.24 | (2 | %) |