UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
The information in this Report, including Exhibit 99.1, 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 Corporation’s press release, dated September 17, 2019, announcing its financial results for the fiscal quarter ended August 31, 2019.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| Exhibit |
Description | |||
| 99.1 |
Press Release of FedEx Corporation dated September 17, 2019. | |||
| 104 |
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | |||
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FedEx Corporation | ||||||
| Date: September 17, 2019 |
By: |
/s/ John L. Merino | ||||
| John L. Merino | ||||||
| Corporate Vice President and | ||||||
| Principal Accounting Officer | ||||||
2
EXHIBIT INDEX
| Exhibit |
Description | |||
| 99.1 |
Press Release of FedEx Corporation dated September 17, 2019. | |||
| 104 |
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | |||
E-1
Exhibit 99.1
FedEx Corp. Reports First Quarter Earnings
MEMPHIS, Tenn., September 17, 2019 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the first quarter ended August 31 (adjusted measures exclude TNT Express integration expenses as described below):
| Fiscal 2020 | Fiscal 2019 | |||||||||||||||
| Dollars in millions, except EPS | As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
||||||||||||
| Revenue |
$ | 17,048 | $ | 17,048 | $ | 17,052 | $ | 17,052 | ||||||||
| Operating income |
$ | 977 | $ | 1,048 | $ | 1,071 | $ | 1,192 | ||||||||
| Operating margin |
5.7 | % | 6.1 | % | 6.3 | % | 7.0 | % | ||||||||
| Net income |
$ | 745 | $ | 800 | $ | 835 | $ | 933 | ||||||||
| Diluted EPS |
$ | 2.84 | $ | 3.05 | $ | 3.10 | $ | 3.46 | ||||||||
This year’s and last year’s quarterly consolidated results have been adjusted for TNT Express integration expenses of $71 million ($0.21 per diluted share) for this year and $121 million ($0.36 per diluted share) for last year.
“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “Despite these challenges, we are positioning FedEx to leverage future growth opportunities as we continue the integration of TNT Express, enhance FedEx Ground residential delivery capabilities and modernize the FedEx Express air fleet and hub operations.”
Operating results declined primarily due to weakening global economic conditions, increased costs to expand service offerings and continued mix shift to lower-yielding services. The impact of one fewer operating day and the loss of business from a large customer also negatively impacted results. These factors were partially offset by lower variable incentive compensation expenses, revenue growth at FedEx Ground and increased yields at FedEx Freight.
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2020 Rate Increases
As previously announced, effective January 6, 2020, FedEx Express, FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 4.9%, while FedEx Freight shipping rates will increase by an average of 5.9%. Details related to these and additional changes to rates and surcharges are available at fedex.com/rates2020.
Outlook
FedEx is unable to forecast the fiscal 2020 year-end mark-to-market (MTM) retirement plan accounting adjustment. As a result, the company is unable to provide a fiscal 2020 earnings per share or effective tax rate (ETR) outlook on a GAAP basis.
FedEx is lowering its fiscal 2020 earnings forecast as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 forecast in June. The company’s revised outlook also reflects increased FedEx Ground costs and August’s loss of FedEx Ground business from a large customer. In addition, the FedEx ETR is now expected to be 24% to 26% before the year-end MTM retirement plan accounting adjustment, due to lower-than-expected earnings in certain non-U.S. jurisdictions.
FedEx now forecasts earnings of $10.00 to $12.00 per diluted share before the year-end MTM retirement plan accounting adjustment, and earnings of $11.00 to $13.00 per diluted share before the year-end MTM retirement plan accounting adjustment and excluding TNT Express integration expenses. The capital spending forecast remains $5.9 billion.
“FedEx is implementing additional cost-reduction initiatives to mitigate the effects of macroeconomic uncertainty, including post-peak reductions to the global FedEx Express air network to better match capacity with demand,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “However, we are continuing to make strategic investments to improve our capabilities and efficiency, which we expect will drive long-term increases in earnings, margins, cash flows and returns.”
These forecasts assume moderate U.S. economic growth, the company’s current fuel price expectations, no further weakening in international economic conditions from the company’s current forecast and no additional adverse developments in international trade policies and relations. FedEx’s ETR and earnings per share outlooks are based on the company’s current
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interpretations of the Tax Cuts and Jobs Act (TCJA) and related regulations and guidance, and are subject to change based on future guidance, as well as FedEx’s ability to defend its interpretations. These forecasts do not include potential costs associated with capacity reductions.
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $70 billion, the company offers integrated business solutions through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 450,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visit about.fedex.com.
Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks, Statistical Books and supplemental first quarter fiscal 2020 earnings release conference call slides. These materials, as well as a webcast of the earnings release conference call to be held at 5:30 p.m. EDT on September 17, are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our website following the call.
The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our Securities and Exchange Commission (SEC) filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.
Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate; anti-trade measures and additional changes in international trade policies and relations; a significant data breach or other disruption to our technology infrastructure; our ability to successfully integrate
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the businesses and operations of FedEx Express and TNT Express in the expected time frame and at the expected cost and to achieve the expected benefits from the combined businesses; our ability to successfully implement our business strategy and effectively respond to changes in market dynamics; the impact of the United Kingdom’s vote to leave the European Union and the terms of its withdrawal if it ultimately occurs; our ability to match capacity to shifting volume levels; changes in fuel prices or currency exchange rates; the impact of intense competition; evolving or new U.S. domestic or international government regulation or regulatory actions; future guidance, regulations, interpretations or challenges to our tax positions relating to the TCJA and our ability to defend our interpretations of the TCJA; our ability to effectively operate, integrate, leverage and grow acquired businesses; legal challenges or changes related to owner-operators engaged by FedEx Ground and the drivers providing services on their behalf; disruptions or modifications in service by, or changes in the business or financial soundness of, the U.S. Postal Service; the impact of any international conflicts or terrorist activities; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Media Contact: Jenny Robertson 901-434-4829
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
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RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
First Quarter Fiscal 2020 and Fiscal 2019 Results
The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or “reported”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAAP (or “adjusted”) financial measures, including our adjusted first quarter fiscal 2020 and 2019 consolidated operating income and margin, net income and diluted earnings per share. These financial measures have been adjusted to exclude the impact of TNT Express integration expenses incurred in fiscal 2020 and 2019.
We have incurred and expect to incur significant expenses through fiscal 2021, and may incur additional expenses thereafter, in connection with our integration of TNT Express. We have adjusted our first quarter fiscal 2020 and 2019 consolidated financial measures to exclude TNT Express integration expenses because we generally would not incur such expenses as part of our continuing operations. The integration expenses are predominantly incremental costs directly associated with the integration of TNT Express, including professional and legal fees, salaries and employee benefits, travel and advertising expenses. Internal salaries and employee benefits are included only to the extent the individuals are assigned full-time to integration activities. The integration expenses also include any restructuring charges at TNT Express.
We believe these adjusted financial measures facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of, or are unrelated to, the company’s and our business segments’ core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. These adjustments are consistent with how management views our businesses. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.
Our non-GAAP financial measures are intended to supplement and should be read together with, and are not an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of our financial statements should not place undue reliance on these non-GAAP financial measures. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures
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with other companies’ non-GAAP financial measures having the same or similar names. As required by Securities and Exchange Commission rules, the tables below present a reconciliation of our presented non-GAAP financial measures to the most directly comparable GAAP measures.
Fiscal 2020 Earnings Per Share and Effective Tax Rate Forecasts
Our fiscal 2020 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes the fiscal 2020 year-end mark-to-market (MTM) retirement plan accounting adjustment and estimated fiscal 2020 TNT Express integration expenses. Our fiscal 2020 effective tax rate (ETR) forecast is a non-GAAP financial measure because it excludes the impact of the fiscal 2020 year-end MTM retirement plan accounting adjustment.
We have provided these non-GAAP financial measures for the same reasons that were outlined above for historical non-GAAP measures. The fiscal 2020 year-end MTM retirement plan accounting adjustment is excluded from our fiscal 2020 EPS and ETR forecasts, as applicable, because it is unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses. Estimated fiscal 2020 TNT Express integration expenses are excluded from our fiscal 2020 EPS forecast for the same reasons described above for historical non-GAAP measures.
We are unable to predict the amount of the year-end MTM retirement plan accounting adjustment, as it is significantly impacted by changes in interest rates and the financial markets, so such adjustment is not included in our fiscal 2020 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2020 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2020 year-end MTM retirement plan accounting adjustment could have a material impact on our fiscal 2020 consolidated financial results and ETR.
The table included below titled “Fiscal 2020 Earnings Per Share Forecast” outlines the impacts of the items that are excluded from our fiscal 2020 EPS forecast, other than the year-end MTM retirement plan accounting adjustment.
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First Quarter Fiscal 2020
FedEx Corporation
| Dollars in millions, except EPS | Income Taxes1 |
Net Income2 |
Diluted Earnings Per Share |
|||||||||||||||||
| Operating | ||||||||||||||||||||
| Income | Margin | |||||||||||||||||||
| GAAP measure |
$ | 977 | 5.7 | % | $ | 251 | $ | 745 | $ | 2.84 | ||||||||||
| TNT Express integration expenses3 |
71 | 0.4 | % | 16 | 55 | 0.21 | ||||||||||||||
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| Non-GAAP measure |
$ | 1,048 | 6.1 | % | $ | 267 | $ | 800 | $ | 3.05 | ||||||||||
First Quarter Fiscal 2019
FedEx Corporation
| Dollars in millions, except EPS | Income Taxes1 |
Net Income2 |
Diluted Earnings Per Share |
|||||||||||||||||
| Operating | ||||||||||||||||||||
| Income | Margin | |||||||||||||||||||
| GAAP measure |
$ | 1,071 | 6.3 | % | $ | 266 | $ | 835 | $ | 3.10 | ||||||||||
| TNT Express integration expenses3 |
121 | 0.7 | % | 23 | 98 | 0.36 | ||||||||||||||
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| Non-GAAP measure |
$ | 1,192 | 7.0 | % | $ | 289 | $ | 933 | $ | 3.46 | ||||||||||
Fiscal 2020 Earnings Per Share Forecast
| Dollars in millions, except EPS | Adjustments | Diluted Earnings Per Share |
||||||
| Earnings per diluted share before year-end MTM retirement plan accounting adjustment (non-GAAP)4 |
$ | 10.00 to $12.00 | ||||||
| TNT Express integration expenses |
$ | 350 | ||||||
| Income tax effect1 |
(86 | ) | ||||||
|
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|
|||||||
| Net of tax effect |
$ | 264 | 1.00 | |||||
|
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|
|||||||
| Earnings per diluted share with adjustments4 |
$ | 11.00 to $13.00 | ||||||
Notes:
| 1 - | Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. |
| 2 - | Effect of “total other (expense) income” on net income amount not shown. |
| 3 - | These expenses, including restructuring charges, were recognized at FedEx Corporate and FedEx Express. |
| 4 - | The year-end MTM retirement plan accounting adjustment, which is impracticable to calculate at this time, is excluded. |
* * *
7
FEDEX CORP. FINANCIAL HIGHLIGHTS
First Quarter Fiscal 2020
(In millions, except earnings per share)
(Unaudited)
| Three Months Ended August 31 |
||||||||||||
| 2019 | 2018 | % | ||||||||||
| Revenue: |
||||||||||||
| FedEx Express segment |
$ | 8,945 | $ | 9,222 | (3% | ) | ||||||
| FedEx Ground segment |
5,179 | 4,799 | 8% | |||||||||
| FedEx Freight segment |
1,905 | 1,959 | (3% | ) | ||||||||
| FedEx Services segment |
4 | 9 | (56% | ) | ||||||||
| Other and eliminations1 |
1,015 | 1,063 | (5% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Revenue |
17,048 | 17,052 | — | |||||||||
| Operating Expenses: |
||||||||||||
| Salaries and employee benefits |
6,087 | 6,260 | (3% | ) | ||||||||
| Purchased transportation |
4,028 | 3,967 | 2% | |||||||||
| Rentals and landing fees |
920 | 823 | 12% | |||||||||
| Depreciation and amortization |
879 | 808 | 9% | |||||||||
| Fuel |
870 | 986 | (12% | ) | ||||||||
| Maintenance and repairs |
768 | 735 | 4% | |||||||||
| Other |
2,519 | 2,402 | 5% | |||||||||
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| Total Operating Expenses |
16,071 | 15,981 | 1% | |||||||||
| Operating Income (Loss): |
||||||||||||
| FedEx Express segment2 |
285 | 388 | (27% | ) | ||||||||
| FedEx Ground segment2 |
644 | 676 | (5% | ) | ||||||||
| FedEx Freight segment |
194 | 176 | 10% | |||||||||
| Corporate, eliminations and other1,2 |
(146 | ) | (169 | ) | 14% | |||||||
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| Total Operating Income |
977 | 1,071 | (9% | ) | ||||||||
| Other Income (Expense): |
||||||||||||
| Interest, net |
(137 | ) | (127 | ) | 8% | |||||||
| Other retirement plans income |
168 | 158 | 6% | |||||||||
| Other, net |
(12 | ) | (1 | ) | NM | |||||||
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| Total Other Income |
19 | 30 | (37% | ) | ||||||||
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| Income Before Income Taxes |
996 | 1,101 | (10% | ) | ||||||||
| Provision for Income Taxes |
251 | 266 | (6% | ) | ||||||||
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| Net Income |
$ | 745 | $ | 835 | (11% | ) | ||||||
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| Diluted Earnings Per Share |
$ | 2.84 | $ | 3.10 | (8% | ) | ||||||
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| Weighted Average Common and Common Equivalent Shares |
262 | 269 | (3% | ) | ||||||||
| Capital Expenditures |
$ | 1,418 | $ | 1,179 | 20% | |||||||
| 1 - | Includes the FedEx Logistics and FedEx Office operating segments. |
| 2 - | Prior year amounts have been revised to conform to the current year presentation. |
8
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
First Quarter Fiscal 2020
(In millions)
| August 31, 2019 (Unaudited) |
||||||||
| May 31, 2019 | ||||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 2,389 | $ | 2,319 | ||||
| Receivables, less allowances |
9,312 | 9,116 | ||||||
| Spare parts, supplies and fuel, less allowances |
574 | 553 | ||||||
| Prepaid expenses and other |
742 | 1,098 | ||||||
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|||||
| Total current assets |
13,017 | 13,086 | ||||||
| Property and Equipment, at Cost |
61,436 | 59,511 | ||||||
| Less accumulated depreciation and amortization |
29,826 | 29,082 | ||||||
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|
|||||
| Net property and equipment |
31,610 | 30,429 | ||||||
| Other Long-Term Assets |
||||||||
| Operating lease right-of-use assets |
13,819 | — | ||||||
| Goodwill |
6,821 | 6,884 | ||||||
| Other assets |
3,185 | 4,004 | ||||||
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|
|||||
| Total other long-term assets |
23,825 | 10,888 | ||||||
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| $ | 68,452 | $ | 54,403 | |||||
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| LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT |
|
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| Current Liabilities |
||||||||
| Current portion of long-term debt |
$ | 35 | $ | 964 | ||||
| Accrued salaries and employee benefits |
1,522 | 1,741 | ||||||
| Accounts payable |
3,179 | 3,030 | ||||||
| Operating lease liabilities |
1,896 | — | ||||||
| Accrued expenses |
3,303 | 3,278 | ||||||
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|
|
|||||
| Total current liabilities |
9,935 | 9,013 | ||||||
| Long-Term Debt, Less Current Portion |
18,726 | 16,617 | ||||||
| Other Long-Term Liabilities |
||||||||
| Deferred income taxes |
2,953 | 2,821 | ||||||
| Pension, postretirement healthcare and other benefit obligations |
4,132 | 5,095 | ||||||
| Self-insurance accruals |
1,924 | 1,899 | ||||||
| Operating lease liabilities |
12,137 | — | ||||||
| Deferred lease obligations |
— | 531 | ||||||
| Other liabilities |
479 | 670 | ||||||
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|
|||||
| Total other long-term liabilities |
21,625 | 11,016 | ||||||
| Commitments and Contingencies |
||||||||
| Common Stockholders’ Investment |
||||||||
| Common stock, $0.10 par value, 800 million shares authorized |
32 | 32 | ||||||
| Additional paid-in capital |
3,257 | 3,231 | ||||||
| Retained earnings |
25,048 | 24,648 | ||||||
| Accumulated other comprehensive loss |
(918 | ) | (865 | ) | ||||
| Treasury stock, at cost |
(9,253 | ) | (9,289 | ) | ||||
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|
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|
|||||
| Total common stockholders’ investment |
18,166 | 17,757 | ||||||
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|
|||||
| $ | 68,452 | $ | 54,403 | |||||
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|||||
9
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
First Quarter Fiscal 2020
(In millions)
(Unaudited)
| Three Months Ended August 31 |
||||||||
| 2019 | 2018 | |||||||
| Operating Activities: |
||||||||
| Net income |
$ | 745 | $ | 835 | ||||
| Noncash charges: |
||||||||
| Depreciation and amortization |
879 | 808 | ||||||
| Other, net |
866 | 173 | ||||||
| Changes in operating assets and liabilities, net |
(1,925 | ) | (1,115 | ) | ||||
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|
|
|||||
| Net cash provided by operating activities |
565 | 701 | ||||||
| Investing Activities: |
||||||||
| Capital expenditures |
(1,418 | ) | (1,179 | ) | ||||
| Proceeds from asset dispositions and other |
(1 | ) | 78 | |||||
|
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|
|
|
|||||
| Net cash used in investing activities |
(1,419 | ) | (1,101 | ) | ||||
| Financing Activities: |
||||||||
| Proceeds from short-term borrowings, net |
— | 299 | ||||||
| Principal payments on debt |
(985 | ) | (2 | ) | ||||
| Proceeds from debt issuances |
2,093 | — | ||||||
| Proceeds from stock issuances |
12 | 25 | ||||||
| Dividends paid |
(170 | ) | (173 | ) | ||||
| Purchase of treasury stock |
(3 | ) | (625 | ) | ||||
| Other, net |
(5 | ) | 4 | |||||
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|||||
| Net cash provided by (used in) financing activities |
942 | (472 | ) | |||||
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|||||
| Effect of exchange rate changes on cash |
(18 | ) | (24 | ) | ||||
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|||||
| Net increase (decrease) in cash and cash equivalents |
70 | (896 | ) | |||||
| Cash and cash equivalents at beginning of period |
2,319 | 3,265 | ||||||
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| Cash and cash equivalents at end of period |
$ | 2,389 | $ | 2,369 | ||||
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|||||
10
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
First Quarter Fiscal 2020
(Dollars in millions)
(Unaudited)
| Three Months Ended August 31 |
||||||||||||
| 2019 | 2018 | % | ||||||||||
| Revenues: |
||||||||||||
| Package Revenue: |
||||||||||||
| U.S. Overnight Box |
$ | 1,866 | $ | 1,886 | (1% | ) | ||||||
| U.S. Overnight Envelope |
479 | 468 | 2% | |||||||||
|
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|
|||||||||
| Total U.S. Overnight |
2,345 | 2,354 | — | |||||||||
| U.S. Deferred |
956 | 952 | — | |||||||||
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|
|||||||||
| Total U.S. Package Revenue |
3,301 | 3,306 | — | |||||||||
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|
|||||||||
| International Priority |
1,817 | 1,874 | (3% | ) | ||||||||
| International Economy |
855 | 850 | 1% | |||||||||
|
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|
|
|||||||||
| Total International Export Package |
2,672 | 2,724 | (2% | ) | ||||||||
| International Domestic1 |
1,076 | 1,131 | (5% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Package Revenue |
7,049 | 7,161 | (2% | ) | ||||||||
| Freight Revenue: |
||||||||||||
| U.S. |
695 | 730 | (5% | ) | ||||||||
| International Priority |
464 | 533 | (13% | ) | ||||||||
| International Economy |
516 | 519 | (1% | ) | ||||||||
| International Airfreight |
66 | 85 | (22% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Freight Revenue |
1,741 | 1,867 | (7% | ) | ||||||||
| Other Revenue |
155 | 194 | (20% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Express Revenue |
$ | 8,945 | $ | 9,222 | (3% | ) | ||||||
| Operating Expenses: |
||||||||||||
| Salaries and employee benefits |
3,372 | 3,473 | (3% | ) | ||||||||
| Purchased transportation |
1,232 | 1,307 | (6% | ) | ||||||||
| Rentals and landing fees |
513 | 470 | 9% | |||||||||
| Depreciation and amortization |
462 | 436 | 6% | |||||||||
| Fuel |
743 | 845 | (12% | ) | ||||||||
| Maintenance and repairs |
517 | 502 | 3% | |||||||||
| Intercompany charges2 |
469 | 518 | (9% | ) | ||||||||
| Other |
1,352 | 1,283 | 5% | |||||||||
|
|
|
|
|
|||||||||
| Total Operating Expenses2 |
8,660 | 8,834 | (2% | ) | ||||||||
|
|
|
|
|
|||||||||
| Operating Income2 |
$ | 285 | $ | 388 | (27% | ) | ||||||
|
|
|
|
|
|||||||||
| Operating Margin2 |
3.2% | 4.2% | (1.0 pts | ) | ||||||||
| 1 - | International Domestic revenues relate to international intra-country operations. |
| 2 - | Prior year amounts have been revised to conform to the current year presentation. |
11
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
First Quarter Fiscal 2020
(Unaudited)
| Three Months Ended | ||||||||||||
| August 31 | ||||||||||||
| PACKAGE STATISTICS |
2019 | 2018 | % | |||||||||
| Average Daily Package Volume (000s): |
||||||||||||
| U.S. Overnight Box |
1,218 | 1,231 | (1% | ) | ||||||||
| U.S. Overnight Envelope |
562 | 551 | 2% | |||||||||
|
|
|
|
|
|||||||||
| Total U.S. Overnight Package |
1,780 | 1,782 | — | |||||||||
| U.S. Deferred |
976 | 916 | 7% | |||||||||
|
|
|
|
|
|||||||||
| Total U.S. Domestic Package |
2,756 | 2,698 | 2% | |||||||||
|
|
|
|
|
|||||||||
| International Priority |
530 | 526 | 1% | |||||||||
| International Economy |
294 | 276 | 7% | |||||||||
|
|
|
|
|
|||||||||
| Total International Export Package |
824 | 802 | 3% | |||||||||
| International Domestic1 |
2,352 | 2,396 | (2% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Average Daily Packages |
5,932 | 5,896 | 1% | |||||||||
|
|
|
|
|
|||||||||
| Yield (Revenue Per Package): |
||||||||||||
| U.S. Overnight Box |
$ | 23.94 | $ | 23.57 | 2% | |||||||
| U.S. Overnight Envelope |
13.32 | 13.09 | 2% | |||||||||
|
|
|
|
|
|||||||||
| U.S. Overnight Composite |
20.59 | 20.33 | 1% | |||||||||
| U.S. Deferred |
15.29 | 15.98 | (4% | ) | ||||||||
|
|
|
|
|
|||||||||
| U.S. Domestic Composite |
18.71 | 18.85 | (1% | ) | ||||||||
|
|
|
|
|
|||||||||
| International Priority |
53.52 | 54.80 | (2% | ) | ||||||||
| International Economy |
45.52 | 47.43 | (4% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total International Export Composite |
50.67 | 52.26 | (3% | ) | ||||||||
| International Domestic1 |
7.15 | 7.26 | (2% | ) | ||||||||
|
|
|
|
|
|||||||||
| Composite Package Yield |
$ | 18.57 | $ | 18.69 | (1% | ) | ||||||
|
|
|
|
|
|||||||||
| FREIGHT STATISTICS |
||||||||||||
| Average Daily Freight Pounds (000s): |
||||||||||||
| U.S. |
8,015 | 8,309 | (4% | ) | ||||||||
| International Priority |
4,792 | 5,260 | (9% | ) | ||||||||
| International Economy |
13,717 | 13,459 | 2% | |||||||||
| International Airfreight |
1,555 | 1,717 | (9% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Avg Daily Freight Pounds |
28,079 | 28,745 | (2% | ) | ||||||||
|
|
|
|
|
|||||||||
| Revenue Per Freight Pound: |
||||||||||||
| U.S. |
$ | 1.36 | $ | 1.35 | 1% | |||||||
| International Priority |
1.51 | 1.56 | (3% | ) | ||||||||
| International Economy |
0.59 | 0.59 | — | |||||||||
| International Airfreight |
0.66 | 0.76 | (13% | ) | ||||||||
|
|
|
|
|
|||||||||
| Composite Freight Yield |
$ | 0.97 | $ | 1.00 | (3% | ) | ||||||
| Operating Weekdays |
64 | 65 | (2% | ) | ||||||||
| 1 - | International Domestic revenues relate to international intra-country operations. |
12
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
First Quarter Fiscal 2020
(Dollars in millions)
(Unaudited)
| Three Months Ended | ||||||||||||
| August 31 | ||||||||||||
| 2019 | 2018 | % | ||||||||||
| FINANCIAL HIGHLIGHTS |
||||||||||||
| Revenue |
$ | 5,179 | $ | 4,799 | 8% | |||||||
| Operating Expenses: |
||||||||||||
| Salaries and employee benefits |
871 | 805 | 8% | |||||||||
| Purchased transportation |
2,303 | 2,062 | 12% | |||||||||
| Rentals |
239 | 191 | 25% | |||||||||
| Depreciation and amortization |
193 | 173 | 12% | |||||||||
| Fuel |
3 | 3 | — | |||||||||
| Maintenance and repairs |
87 | 77 | 13% | |||||||||
| Intercompany charges1 |
375 | 388 | (3% | ) | ||||||||
| Other |
464 | 424 | 9% | |||||||||
|
|
|
|
|
|||||||||
| Total Operating Expenses1 |
4,535 | 4,123 | 10% | |||||||||
|
|
|
|
|
|||||||||
| Operating Income1 |
$ | 644 | $ | 676 | (5% | ) | ||||||
|
|
|
|
|
|||||||||
| Operating Margin1 |
12.4% | 14.1% | (1.7 pts | ) | ||||||||
| OPERATING STATISTICS |
||||||||||||
| Operating Weekdays |
64 | 65 | (2% | ) | ||||||||
| Average Daily Package Volume (000s) |
8,834 | 8,221 | 7% | |||||||||
| Yield (Revenue Per Package) |
$ | 9.13 | $ | 8.96 | 2% | |||||||
| 1 - | Prior year amounts have been revised to conform to the current year presentation. |
13
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
First Quarter Fiscal 2020
(Dollars in millions)
(Unaudited)
| Three Months Ended August 31 |
||||||||||||
| 2019 | 2018 | % | ||||||||||
| FINANCIAL HIGHLIGHTS |
||||||||||||
| Revenue |
$ | 1,905 | $ | 1,959 | (3% | ) | ||||||
| Operating Expenses: |
||||||||||||
| Salaries and employee benefits |
919 | 928 | (1% | ) | ||||||||
| Purchased transportation |
187 | 259 | (28% | ) | ||||||||
| Rentals |
52 | 42 | 24% | |||||||||
| Depreciation and amortization |
94 | 78 | 21% | |||||||||
| Fuel |
123 | 137 | (10% | ) | ||||||||
| Maintenance and repairs |
65 | 62 | 5% | |||||||||
| Intercompany charges |
126 | 138 | (9% | ) | ||||||||
| Other |
145 | 139 | 4% | |||||||||
|
|
|
|
|
|||||||||
| Total Operating Expenses |
1,711 | 1,783 | (4% | ) | ||||||||
|
|
|
|
|
|||||||||
| Operating Income |
$ | 194 | $ | 176 | 10% | |||||||
|
|
|
|
|
|||||||||
| Operating Margin |
10.2 | % | 9.0 | % | 1.2 pts | |||||||
| OPERATING STATISTICS |
||||||||||||
| Operating Weekdays |
64 | 65 | (2% | ) | ||||||||
| Average Daily Shipments (000s) |
||||||||||||
| Priority |
78.5 | 81.2 | (3% | ) | ||||||||
| Economy |
32.8 | 34.6 | (5% | ) | ||||||||
|
|
|
|
|
|||||||||
| Total Average Daily Shipments |
111.3 | 115.8 | (4% | ) | ||||||||
| Weight Per Shipment (lbs) |
||||||||||||
| Priority |
1,156 | 1,218 | (5% | ) | ||||||||
| Economy |
960 | 1,009 | (5% | ) | ||||||||
|
|
|
|
|
|||||||||
| Composite Weight Per Shipment |
1,098 | 1,156 | (5% | ) | ||||||||
| Revenue/Shipment |
||||||||||||
| Priority |
$ | 255.45 | $ | 246.77 | 4% | |||||||
| Economy |
295.75 | 292.33 | 1% | |||||||||
|
|
|
|
|
|||||||||
| Composite Revenue/Shipment |
$ | 267.34 | $ | 260.39 | 3% | |||||||
| Revenue/CWT |
||||||||||||
| Priority |
$ | 22.10 | $ | 20.26 | 9% | |||||||
| Economy |
30.81 | 28.97 | 6% | |||||||||
|
|
|
|
|
|||||||||
| Composite Revenue/CWT |
$ | 24.35 | $ | 22.53 | 8% | |||||||
14
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