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8-K - FORM 8-K - FEDERAL EXPRESS CORP | c25922e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Reports Strong Second Quarter
Revenue and Earnings Growth
Revenue and Earnings Growth
Fiscal 2012 Earnings Outlook of $6.25 to $6.75 Per Share Reconfirmed
MEMPHIS, Tenn., December 15, 2011 ... FedEx Corp. (NYSE: FDX) today reported earnings of $1.57
per diluted share for the second quarter ended November 30. Last years second quarter earnings
were $0.89 per diluted share, which included $0.27 per diluted share in costs related to the
combination of the companys FedEx Freight and FedEx National LTL operations and a reserve
associated with a legal matter at FedEx Express. Excluding those one-time charges, earnings were
$1.16 per diluted share a year ago.
Our improved performance was largely a result of effective yield management programs and
strong demand for FedEx Home Delivery and FedEx SmartPost services, said Frederick W. Smith, FedEx
Corp. chairman, president and chief executive officer. With the healthy growth in online shopping
this holiday season, demand is increasing for these residential delivery services.
In order to continue the modernization of the companys aircraft fleet, FedEx Express has signed an
agreement with The Boeing Company to purchase 27 new 767-300F aircraft, with three arriving in
fiscal 2014 and six per year in fiscal 2015-2018. The 767s were selected as the best choice to
begin replacing FedEx Expresss MD10 aircraft, some of which are more than 40 years old. The 767s
will provide similar capacity as the MD10s, with improved reliability, an approximate 30%
increase in fuel efficiency and a minimum of a 20% reduction in unit operating costs.
FedEx Express is also delaying the delivery of 11 777F aircraft, two of which will be deferred from
fiscal 2013, five from fiscal 2014 and one per year in fiscal 2015-2018, to better balance air
network capacity to demand. As a result of these
deferrals, FedEx Express will place into service four 777s in fiscal 2013 and two in fiscal 2014.
The company is also exercising two 777 options for aircraft to be delivered at the end of the
delivery schedule.
- more -
FedEx Express took action during the quarter to adjust its network, particularly in Asia, as
recent inventory destocking trends have impacted demand for our FedEx Express services, said Alan
B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. The deferral of
our 777 aircraft deliveries is a continuation of those efforts, enabling us to make
appropriately-timed international 777 capacity additions over the next decade. With these actions,
we expect fiscal 2013 capital expenditures to moderate to approximately $3.8 billion.
Second Quarter Results
FedEx Corp. reported the following consolidated results for the second quarter:
| Revenue of $10.59 billion, up 10% from $9.63 billion the previous year | ||
| Operating income of $780 million, up 66% from $469 million last year | ||
| Operating margin of 7.4%, up from 4.9% the previous year | ||
| Net income of $497 million, up 76% from $283 million a year ago |
Operating results improved due to the continued strong performance of FedEx Ground driven by higher
yields and volumes, as well as a significant improvement in profitability at FedEx Freight. The
results for the quarter also reflect the positive year-over-year impact, predominately at FedEx
Express, of a benefit from the timing lag that exists between when fuel prices change and when
indexed fuel surcharges automatically adjust. Last years operating income and margin were
impacted by one-time charges at FedEx Express and FedEx Freight.
Outlook
FedEx projects earnings to be $1.25
to $1.45 per diluted share in the third quarter and reconfirms its forecast of $6.25 to $6.75 per diluted share for fiscal 2012. This guidance
assumes the current market outlook for fuel prices, normal winter weather and moderate growth in
the global economy. The company reported earnings of $0.73 per diluted share in last years third
quarter, which included one-time FedEx Freight combination costs of $0.08 per diluted share. The
capital spending forecast for fiscal 2012 remains $4.2 billion.
- more -
2
FedEx Express Segment
For the second quarter, the FedEx Express segment reported:
| Revenue of $6.58 billion, up 10% from last years $5.99 billion | ||
| Operating income of $342 million, up 30% from $264 million a year ago | ||
| Operating margin of 5.2%, up from 4.4% the previous year |
U.S. domestic revenue per package grew 12% due to higher fuel surcharges and rate per pound,
while average daily package volume declined 4%. FedEx International Priority® (IP)
revenue per package grew 11% due to higher fuel surcharges, rate per pound and weight per package.
IP average daily package volume decreased 3% driven by declines from Asia. IP freight pounds
increased 4% with revenue per pound up 4% due to higher fuel surcharges. In total, IP package and
freight pounds increased 2% and revenue increased 8% year-over-year.
Operating income and margin improved in the quarter, reflecting the year-over-year benefit of the
fuel surcharge timing lag. Prior year results were negatively impacted by a $66 million reserve
associated with a legal matter.
FedEx Ground Segment
For the second quarter, the FedEx Ground segment reported:
| Revenue of $2.34 billion, up 13% from last years $2.08 billion | ||
| Operating income of $398 million, up 34% from $296 million a year ago | ||
| Operating margin of 17.0%, up from 14.3% the previous year |
FedEx Ground average daily package volume grew 4% in the second quarter driven by increases in
FedEx Home Delivery services, as well as the business-to-business market. Revenue per package
increased 8% primarily due to increased rates and higher fuel surcharges. FedEx SmartPost average
daily volume increased 17% primarily due to growth in e-commerce. FedEx SmartPost revenue per
package increased 4% primarily due to increased fuel surcharges.
Operating income and margin increased primarily due to increased revenue per package and volume
growth.
- more -
3
Earlier this month, FedEx Ground and FedEx Home Delivery announced that shipping rates will be
increased by a net average of 4.9% effective January 2, 2012. The full average rate increase of 5.9% will be partially offset by adjusting the fuel price
threshold at which the fuel surcharge begins, reducing the fuel surcharge by one percentage point.
FedEx SmartPost rates will also increase.
FedEx Freight Segment
For the second quarter, the FedEx Freight segment reported:
| Revenue of $1.33 billion, up 9% from last years $1.22 billion | ||
| Operating income of $40 million, compared with an operating loss of $91 million a year ago | ||
| Operating margin of 3.0%, up from (7.5%) the previous year |
Less-than-truckload (LTL) yield increased 8% primarily due to higher LTL fuel surcharges and
ongoing yield management actions, which reduced LTL average daily shipments by 3%. FedEx Freight
implemented a 6.75% general rate increase on September 6, 2011.
Operating income in the quarter was driven by strong yield growth and ongoing efficiency
improvement resulting from the January 30, 2011 combination of the FedEx Freight and FedEx National
LTL operations. The operating loss in the prior year largely resulted from $86 million of
one-time costs
associated with the LTL network combination.
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 $41 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 290,000 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 second quarter fiscal 2012 Statistical Book. These materials, as well as a Webcast
of the earnings
- more -
4
release conference call to be held
at 8:30 a.m. EST on December 15 are available on the companys
Web site at investors.fedex.com. A replay of the conference call Webcast will be posted on
our Web site following the call.
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,
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 and its subsidiaries press releases and
filings with the SEC.
Media Contact: Jess Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
- more -
5
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO 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 and our judgments about the likelihood
that particular factors will repeat. Excluding a reserve associated with a legal matter at FedEx
Express and the costs of the combination of FedEx Freight and FedEx National LTL operations from
our prior period second quarter earnings, net of applicable incentive compensation impacts, will
allow for more accurate comparisons of our second quarter 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.
Fiscal 2011 Second Quarter Earnings
Q2 Diluted | ||||
Earnings Per Share | ||||
Non-GAAP Measure |
$ | 1.16 | ||
FedEx Freight Combination Costs |
(0.17 | ) | ||
ATA Legal Reserve |
(0.10 | ) | ||
GAAP Measure |
$ | 0.89 | ||
* * *
6
FEDEX CORP. FINANCIAL HIGHLIGHTS
Second Quarter Fiscal 2012
(In millions, except earnings per share)
(Unaudited)
(In millions, except earnings per share)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
November 30 | November 30 | |||||||||||||||||||||||
2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||
Revenue: |
||||||||||||||||||||||||
FedEx Express segment |
$ | 6,583 | $ | 5,992 | 10 | % | $ | 13,175 | $ | 11,904 | 11 | % | ||||||||||||
FedEx Ground segment |
2,339 | 2,077 | 13 | % | 4,617 | 4,038 | 14 | % | ||||||||||||||||
FedEx Freight segment |
1,325 | 1,221 | 9 | % | 2,653 | 2,479 | 7 | % | ||||||||||||||||
FedEx Services segment |
427 | 434 | (2 | %) | 838 | 849 | (1 | %) | ||||||||||||||||
Other & eliminations |
(87 | ) | (92 | ) | NM | (175 | ) | (181 | ) | NM | ||||||||||||||
Total Revenue |
10,587 | 9,632 | 10 | % | 21,108 | 19,089 | 11 | % | ||||||||||||||||
Operating Expenses: |
||||||||||||||||||||||||
Salaries and employee benefits |
3,982 | 3,779 | 5 | % | 7,986 | 7,582 | 5 | % | ||||||||||||||||
Purchased transportation |
1,576 | 1,390 | 13 | % | 3,094 | 2,717 | 14 | % | ||||||||||||||||
Rentals and landing fees |
623 | 628 | (1 | %) | 1,243 | 1,229 | 1 | % | ||||||||||||||||
Depreciation and amortization |
518 | 502 | 3 | % | 1,027 | 981 | 5 | % | ||||||||||||||||
Fuel |
1,200 | 938 | 28 | % | 2,444 | 1,825 | 34 | % | ||||||||||||||||
Maintenance and repairs |
511 | 473 | 8 | % | 1,062 | 990 | 7 | % | ||||||||||||||||
Impairment and other charges |
| 67 | NM | | 67 | NM | ||||||||||||||||||
Other |
1,397 | 1,386 | 1 | % | 2,735 | 2,601 | 5 | % | ||||||||||||||||
Total Operating Expenses |
9,807 | 9,163 | 7 | % | 19,591 | 17,992 | 9 | % | ||||||||||||||||
Operating Income (Loss): |
||||||||||||||||||||||||
FedEx Express segment |
342 | 264 | 30 | % | 630 | 621 | 1 | % | ||||||||||||||||
FedEx Ground segment |
398 | 296 | 34 | % | 805 | 583 | 38 | % | ||||||||||||||||
FedEx Freight segment |
40 | (91 | ) | NM | 82 | (107 | ) | NM | ||||||||||||||||
Total Operating Income |
780 | 469 | 66 | % | 1,517 | 1,097 | 38 | % | ||||||||||||||||
Other Expense: |
||||||||||||||||||||||||
Interest, net |
(7 | ) | (23 | ) | (70 | %) | (18 | ) | (41 | ) | (56 | %) | ||||||||||||
Other, net |
4 | (9 | ) | NM | 2 | (16 | ) | NM | ||||||||||||||||
Total Other Expense |
(3 | ) | (32 | ) | (91 | %) | (16 | ) | (57 | ) | (72 | %) | ||||||||||||
Pretax Income |
777 | 437 | 78 | % | 1,501 | 1,040 | 44 | % | ||||||||||||||||
Provision for Income Taxes |
280 | 154 | 82 | % | 540 | 377 | 43 | % | ||||||||||||||||
Net Income |
$ | 497 | $ | 283 | 76 | % | $ | 961 | $ | 663 | 45 | % | ||||||||||||
Diluted Earnings Per Share |
$ | 1.57 | $ | 0.89 | 76 | % | $ | 3.02 | $ | 2.09 | 44 | % | ||||||||||||
Weighted Average Common and
Common Equivalent Shares |
316 | 316 | | 317 | 316 | 0 | % | |||||||||||||||||
Capital Expenditures |
$ | 1,107 | $ | 1,047 | 6 | % | $ | 2,217 | $ | 2,059 | 8 | % |
7
FEDEX CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
Second Quarter Fiscal 2012
(In millions)
(In millions)
Nov. 30, 2011 | ||||||||
(Unaudited) | May 31, 2011 | |||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 1,896 | $ | 2,328 | ||||
Receivables, less allowances |
4,837 | 4,581 | ||||||
Spare parts, supplies and fuel, less allowances |
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 | |||||
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 |
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 | |||||
8
FEDEX CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS
Second Quarter Fiscal 2012
(In millions)
(Unaudited)
(In millions)
(Unaudited)
Six Months Ended | ||||||||
November 30 | ||||||||
2011 | 2010 | |||||||
Operating Activities: |
||||||||
Net income |
$ | 961 | $ | 663 | ||||
Noncash charges: |
||||||||
Depreciation and amortization |
1,027 | 981 | ||||||
Other, net |
422 | 262 | ||||||
Changes in operating assets and liabilities, net |
(242 | ) | 105 | |||||
Net 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 | ||||||
Net cash used in investing activities |
(2,316 | ) | (2,052 | ) | ||||
Financing Activities: |
||||||||
Principal payments on debt |
(18 | ) | (12 | ) | ||||
Dividends paid |
(82 | ) | (76 | ) | ||||
Purchase of treasury stock |
(197 | ) | | |||||
Other, net |
37 | 29 | ||||||
Net 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 | ||||
9
FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Second Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
(Dollars in millions)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
November 30 | November 30 | |||||||||||||||||||||||
2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
Revenue |
$ | 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 | % | ||||||||||||||||
Other1 |
766 | 761 | 1 | % | 1,498 | 1,412 | 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 | % | 0.8 pts | 4.8 | % | 5.2 | % | (0.4 pts) | ||||||||||||||
OPERATING STATISTICS2 |
||||||||||||||||||||||||
Operating Weekdays |
63 | 63 | | 128 | 128 | | ||||||||||||||||||
AVG DAILY VOLUME / POUNDS |
||||||||||||||||||||||||
Average Daily Package Volume (000s): |
||||||||||||||||||||||||
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 Package |
2,588 | 2,687 | (4 | %) | 2,574 | 2,662 | (3 | %) | ||||||||||||||||
International Priority |
569 | 585 | (3 | %) | 556 | 575 | (3 | %) | ||||||||||||||||
International Domestic3 |
529 | 354 | 49 | % | 486 | 339 | 43 | % | ||||||||||||||||
Total Average Daily Packages |
3,686 | 3,626 | 2 | % | 3,616 | 3,576 | 1 | % | ||||||||||||||||
Average Daily Freight Pounds (000s): |
||||||||||||||||||||||||
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 Avg Daily Freight Pounds |
12,294 | 12,022 | 2 | % | 11,772 | 11,592 | 2 | % | ||||||||||||||||
YIELD |
||||||||||||||||||||||||
Revenue Per Package: |
||||||||||||||||||||||||
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 | % | ||||||||||||||||
Total U.S. Domestic Package |
17.01 | 15.19 | 12 | % | 16.99 | 15.13 | 12 | % | ||||||||||||||||
International Priority |
60.56 | 54.54 | 11 | % | 61.42 | 54.12 | 13 | % | ||||||||||||||||
International Domestic3 |
6.51 | 7.39 | (12 | %) | 6.81 | 7.22 | (6 | %) | ||||||||||||||||
Composite Package Yield |
$ | 22.23 | $ | 20.77 | 7 | % | $ | 22.45 | $ | 20.65 | 9 | % | ||||||||||||
Revenue Per Freight Pound: |
||||||||||||||||||||||||
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 | Previous year includes a $66 million reserve for a legal matter. | |
2 | Operating statistics include only the operations of FedEx Express. | |
3 | International Domestic includes the operations of a February 2011 business acquisition in India and a July 2011 business acquisition in Mexico. |
10
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Second Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
(Dollars in millions)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
November 30 | November 30 | |||||||||||||||||||||||
2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
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 | 67 | % | 7 | 4 | 75 | % | ||||||||||||||||
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 | % | 2.7 pts | 17.4 | % | 14.4 | % | 3.0 pts | ||||||||||||||
OPERATING STATISTICS |
||||||||||||||||||||||||
Operating Weekdays |
63 | 63 | | 128 | 128 | | ||||||||||||||||||
Average Daily Package Volume (000s) |
||||||||||||||||||||||||
FedEx Ground |
3,979 | 3,843 | 4 | % | 3,849 | 3,686 | 4 | % | ||||||||||||||||
FedEx SmartPost |
1,737 | 1,484 | 17 | % | 1,573 | 1,287 | 22 | % | ||||||||||||||||
Yield (Revenue Per Package) |
||||||||||||||||||||||||
FedEx Ground |
$ | 8.53 | $ | 7.89 | 8 | % | $ | 8.62 | $ | 7.94 | 9 | % | ||||||||||||
FedEx SmartPost |
$ | 1.79 | $ | 1.72 | 4 | % | $ | 1.78 | $ | 1.70 | 5 | % |
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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Second Quarter Fiscal 2012
(Dollars in millions)
(Unaudited)
(Dollars in millions)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
November 30 | November 30 | |||||||||||||||||||||||
2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||
FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
Revenue |
$ | 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 | % | ||||||||||||||||
Intercompany charges |
108 | 108 | | 217 | 217 | | ||||||||||||||||||
Impairment and other charges1 |
| 67 | NM | | 67 | NM | ||||||||||||||||||
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 | ) | NM | $ | 82 | $ | (107 | ) | NM | ||||||||||||
Operating Margin |
3.0 | % | (7.5 | %) | 10.5 pts | 3.1 | % | (4.3 | %) | 7.4 pts | ||||||||||||||
OPERATING STATISTICS |
||||||||||||||||||||||||
LTL Operating Weekdays |
62 | 62 | | 127 | 127 | | ||||||||||||||||||
LTL Shipments Per Day (000s) |
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 Revenue/CWT |
$ | 19.79 | $ | 18.27 | 8 | % | $ | 19.54 | $ | 17.77 | 10 | % |
1 | Previous year includes charges associated with the combination of FedEx Freight and FedEx National LTL operations. |
12