Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Reports Record Fourth Quarter
and Full-Year Earnings
MEMPHIS, Tenn., June 20, 2017 ... FedEx Corp. (NYSE: FDX) today reported earnings of $3.75 per diluted share ($4.25 per diluted share on an adjusted basis) for the fourth quarter ended May 31, compared to a loss of $0.26 per diluted share (earnings of $3.30 per diluted share on an adjusted basis) a year ago.
This year’s and last year’s quarterly consolidated earnings have been adjusted for:
| | | | | | | | |
| Impact per diluted share | | Fourth Quarter | |
| | Fiscal 2017 | | | Fiscal 2016 | |
Mark-to-market (“MTM”) pension accounting adjustments | | ($ | 0.02 | ) | | $ | 3.47 | |
TNT Express integration expenses | | | 0.32 | | | | — | |
FedEx Trade Networks legal matters | | | 0.09 | | | | — | |
TNT Express intangible asset amortization | | | 0.06 | | | | — | |
FedEx Ground legal matters | | | 0.05 | | | | 0.02 | |
TNT Express expenses and operating results from the date of acquisition | | | — | | | | 0.34 | |
Tax impact – legal entity restructuring for TNT integration | | | — | | | | (0.28 | ) |
“Strong fourth quarter results completed a record fiscal 2017,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “We enter fiscal 2018 confident FedEx Corp. will continue to deliver outstanding value and opportunities for shareowners, customers, and team members for years to come.”
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Fourth Quarter Results
FedEx Corp. reported the following consolidated results for the fourth quarter (adjusted measures exclude the items listed above for the applicable fiscal year):
| | | | | | | | |
| | | Fiscal 2017 | | Fiscal 2016 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) | | As Reported
(GAAP) | | Adjusted
(non-GAAP) |
Revenue | | $15.7 billion | | $15.7 billion | | $13.0 billion | | $13.0 billion |
Operating income (loss) | | $1.58 billion | | $1.76 billion | | ($68 million) | | $1.51 billion |
Operating margin | | 10.1% | | 11.2% | | (0.5%) | | 11.7% |
Net income (loss) | | $1.02 billion | | $1.15 billion | | ($70 million) | | $897 million |
Diluted EPS | | $3.75 | | $4.25 | | ($0.26) | | $3.30 |
Operating results benefited from higher base rates, increased package volume and the inclusion of TNT Express results. Net income and earnings per share reflect tax benefits of $104 million, or $0.37 per diluted share, related to the implementation of new foreign currency tax regulations, the adoption of a new accounting standard for share-based payments, and certain transactions related to the TNT Express integration.
Full-Year Results
FedEx Corp. reported the following consolidated results for the full year (adjusted measures exclude the items listed above for the applicable fiscal year):
| | | | | | | | |
| | | Fiscal 2017 | | Fiscal 2016 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) | | As Reported
(GAAP) | | Adjusted
(non-GAAP) |
Revenue | | $60.3 billion | | $60.3 billion | | $50.4 billion | | $50.4 billion |
Operating income | | $5.04 billion | | $5.48 billion | | $3.08 billion | | $5.01 billion |
Operating margin | | 8.4% | | 9.1% | | 6.1% | | 10.0% |
Net income | | $3.00 billion | | $3.33 billion | | $1.82 billion | | $3.02 billion |
Diluted EPS | | $11.07 | | $12.30 | | $6.51 | | $10.80 |
Operating results benefited from higher base rates, increased volume, continued cost management at FedEx Express and the inclusion of TNT Express results. Tax benefits from the implementation of new foreign currency tax regulations and the adoption of a new accounting standard for share-based payments also benefited results. These factors were partially offset by TNT Express integration and restructuring expenses and network expansion costs at FedEx Ground.
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Capital spending for fiscal 2017 was $5.1 billion, as certain FedEx Ground expansion projects were deferred to fiscal 2018.
For the year, the company acquired 2.96 million shares of FedEx common stock at an average price of $172.13.
Outlook
FedEx is unable to forecast the fiscal 2018year-end MTM pension accounting adjustments. As a result, the company is unable to provide fiscal 2018 earnings guidance on a GAAP basis.
Beforeyear-end MTM pension accounting adjustments, earnings are projected to be $12.45 to $13.25 per diluted share for fiscal 2018. This forecast assumes moderate economic growth. The earnings forecast beforeyear-end MTM pension accounting adjustments and excluding TNT Express integration expenses, including restructuring charges, is $13.20 to $14.00 per diluted share for fiscal 2018. These forecasts include an estimated $65 million of TNT Express intangible asset amortization expense.
Capital spending for fiscal 2018 is expected to be approximately $5.9 billion, which includes an increase in planned aircraft deliveries to support the FedEx Express fleet modernization program and continued investments in FedEx Ground automation and capacity expansion, including certain projects deferred from fiscal 2017.
“Investments to modernize our aircraft fleet and expand our FedEx Ground capacity are supporting our strong earnings growth,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We are very optimistic about fiscal 2018 as evidenced by our earnings outlook.”
FedEx Express Segment
For the fourth quarter, the FedEx Express segment reported (adjusted measures exclude TNT Express integration expenses):
| | | | | | |
| | | Fiscal 2017 | | Fiscal 2016 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) | | As Reported
(GAAP) |
Revenue | | $7.18 billion | | $7.18 billion | | $6.72 billion |
Operating income | | $863 million | | $909 million | | $757 million |
Operating income YOY change % | | 14% | | 20% | | |
Operating margin | | 12.0% | | 12.7% | | 11.3% |
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Revenue increased 7% primarily due to increased package volume, driven by international export growth of 5%, and higher base rates.
Operating results increased primarily due to higher base rates, increased package volume, a positive net benefit from fuel and the continued benefit of cost management initiatives.As-reported results include $46 million of expenses related to the integration of TNT Express.
TNT Express Segment
For the fourth quarter, the TNT Express segment reported (adjusted measures exclude integration expenses, including restructuring charges, and intangible asset amortization expense):
| | | | |
| | | Fiscal 2017 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) |
Revenue | | $1.91 billion | | $1.91 billion |
Operating income | | $26 million | | $83 million |
Operating margin | | 1.4% | | 4.4% |
The TNT Expressas-reported results include $37 million of integration expenses, including restructuring charges, and $20 million of intangible asset amortization expense.
FedEx Ground Segment
For the fourth quarter, the FedEx Ground segment reported:
| | | | | | |
| | | Fiscal 2017 | | Fiscal 2016 | | Change |
Revenue | | $4.68 billion | | $4.29 billion | | 9% |
Operating income | | $702 million | | $656 million | | 7% |
Operating margin | | 15.0% | | 15.3% | | (0.3 pts) |
Revenue increased due primarily to higher base rates and average daily package volume growth of 3%.
Operating income increased due to higher yields and volume, partially offset by network expansion and staffing costs as well as increased self-insurance reserves.
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FedEx Freight Segment
For the fourth quarter, the FedEx Freight segment reported:
| | | | | | |
| | | Fiscal 2017 | | Fiscal 2016 | | Change |
Revenue | | $1.70 billion | | $1.61 billion | | 6% |
Operating income | | $133 million | | $137 million | | (3%) |
Operating margin | | 7.8% | | 8.5% | | (0.7 pts) |
Revenue increased due to higher base rates and fuel surcharges. Average daily shipments were flat as the company focuses on improving revenue quality.
Operating results decreased slightly as higher salaries and wages and increased information technology expenses offset the benefit from higher base rates.
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 $60 billion, the company offers integrated business applications 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 400,000 team members to remain “absolutely, positively” 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 visitabout.fedex.com.
Additional information and operating data are contained in the company’s annual report, Form10-K, Form10-Qs, Form8-Ks, Statistical Books and fourth quarter fiscal 2017 Earnings Presentation. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EDT on June 20, are available on the company’s website atinvestors.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.
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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, our ability to successfully integrate the businesses and operations of FedEx Express and TNT Express in the expected time frame, our ability to match capacity to shifting volume levels, changes in fuel prices or currency exchange rates, a significant data breach or other disruption to our technology infrastructure, legal challenges or changes related to FedEx Ground’s owner-operators and the drivers providing services on their behalf, new U.S. domestic or international government regulation, our ability to effectively operate, integrate and leverage acquired businesses, disruptions or modifications in service by, or changes in the business of, the U.S. Postal Service, the impact from any terrorist activities or international conflicts 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: Jess Bunn901-818-7463
Investor Contact: Mickey Foster901-818-7468
Home Page: fedex.com
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RECONCILIATIONS OFNON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
Fourth Quarter and Full-Year Fiscal 2017 and Fiscal 2016 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 certainnon-GAAP (or “adjusted”) financial measures, including our adjusted fourth quarter and adjusted full-year fiscal 2017 and 2016 consolidated operating income and margin, net income and diluted earnings per share, and adjusted fourth quarter and adjusted full-year fiscal 2017 FedEx Express segment and TNT Express segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following items (as applicable):
| | • | | Year-end MTM pension accounting adjustments(non-cash) for our defined benefit pension and other postretirement plans; |
| | • | | TNT Express integration expenses incurred in fiscal 2017; |
| | • | | Expenses incurred in fiscal 2016 in connection with the settlement of a U.S. Customs and Border Protection matter involving FedEx Trade Networks, net of recognized insurance recovery; |
| | • | | Fiscal 2017 charges related to certain pending U.S. Customs and Border Protection matters involving FedEx Trade Networks; |
| | • | | TNT Express intangible asset amortization; |
| | • | | Expenses incurred in fiscal 2016 and 2017 in connection with the settlement of (and certain expected losses relating to) independent contractor litigation matters involving FedEx Ground (net of recognized insurance recovery for fiscal 2016); and |
| | • | | Expenses incurred in fiscal 2016 associated with the acquisition, financing and integration of TNT Express and its operating results from the date of acquisition, net of any tax impact, including the income tax impact of an internal corporate legal entity restructuring to facilitate the integration of FedEx Express and TNT Express that is presented as a separate item herein. |
The MTM accounting-related adjustments are excluded from our fourth quarter and full-year fiscal 2017 and 2016non-GAAP financial measures because thesenon-cash items are unrelated to our core operating performance.
We expect to incur significant expenses over the next few years in connection with our integration of TNT Express. We have adjusted our fourth quarter and
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full-year fiscal 2017 financial measures and the FedEx Express segment and TNT Express segment fourth quarter and full-year fiscal 2017 financial measures to exclude these items 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 wages, advertising expenses and travel. Internal salaries and wages are included only to the extent the individuals are assigned full-time to integration activities. The integration expenses also include restructuring charges at TNT Express.
The litigation- and legal-related matters are excluded from our fourth quarter and full-year fiscal 2017 and 2016non-GAAP financial measures, as applicable, because they are unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses.
We also have recurring intangible asset amortization expenses at TNT Express. The company and TNT Express incurred, and will continue incurring, these expenses solely as a result of the company’s acquisition of TNT Express and the related purchase accounting treatment. We excluded intangible asset amortization from our fourth quarter and full-year fiscal 2017non-GAAP financial results and the TNT Express segment’s fourth quarter and full-year fiscal 2017non-GAAP financial results to help investors understand the impact of these expenses on TNT Express’s base business and to facilitate the overall comparability of the company’s consolidated financial results. We will not adjust our financial results for intangible asset amortization beginning in fiscal 2018 because the company’s financial results will be comparable year-over-year at that time. Beginning in fiscal 2018, we will recast our fiscal 2017non-GAAP financial results to include TNT Express intangible asset amortization.
The TNT Express expense items, as well as the income tax impact of an internal corporate legal entity restructuring to facilitate the integration of FedEx Express and TNT Express, are excluded from our fourth quarter and full-year fiscal 2016non-GAAP financial measures because these items impacted the year-over-year comparability of our financial statements and are not related to our core operating performance. We excluded TNT Express operating results from the date of acquisition from our fourth quarter and full-year fiscal 2016non-GAAP financial measures because it was acquired on May 25, 2016 (six days before the end of our fiscal year), and its financial results were immaterial from the date of acquisition and not presented as a separate segment.
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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 thesenon-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.
Ournon-GAAP 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 thesenon-GAAP financial measures. Becausenon-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’non-GAAP financial measures having the same or similar names. As required by SEC rules, the tables below present a reconciliation of our presentednon-GAAP financial measures to the most directly comparable GAAP measures.
Fiscal 2018 Earnings Guidance
Our fiscal 2018 earnings guidance is anon-GAAP financial measure because it excludes the fiscal 2018year-end MTM pension accounting adjustments and projected fiscal 2018 TNT Express integration expenses, including restructuring charges at TNT Express. We have provided thisnon-GAAP earnings guidance measure for the same reasons that were outlined above for historicalnon-GAAP measures.
We are unable to predict the amount of theyear-end MTM pension accounting adjustments, as they are significantly impacted by changes in interest rates and the financial markets, so such adjustments are not included in our earnings guidance. For this reason, a full reconciliation of our fiscal 2018 earnings guidance to the most directly comparable GAAP measure is impracticable. It is reasonably possible, however, that our fourth quarter fiscal 2018 MTM pension accounting adjustments could have a material impact on our fiscal 2018 consolidated financial results. The last table included below outlines the impact of the items that are excluded from our earnings guidance, other than theyear-end MTM pension accounting adjustments.
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Fourth Quarter Fiscal 2017
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
| | | Operating | | | Income | | | Net | | | Diluted
Earnings | |
| Dollarsinmillions,exceptEPS | | Income | | | Margin | | | Taxes1 | | | Income2 | | | Per Share | |
GAAP measure | | $ | 1,581 | | | | 10.1 | % | | $ | 440 | | | $ | 1,020 | | | $ | 3.75 | |
MTM pension accounting adjustments3 | | | (24 | ) | | | (0.1 | %) | | | (18 | ) | | | (6 | ) | | | (0.02 | ) |
TNT Express integration expenses4 | | | 124 | | | | 0.8 | % | | | 37 | | | | 87 | | | | 0.32 | |
FedEx Trade Networks legal matters | | | 39 | | | | 0.2 | % | | | 15 | | | | 24 | | | | 0.09 | |
TNT Express intangible asset amortization | | | 20 | | | | 0.1 | % | | | 4 | | | | 16 | | | | 0.06 | |
FedEx Ground legal matters | | | 22 | | | | 0.1 | % | | | 9 | | | | 13 | | | | 0.05 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 1,762 | | | | 11.2 | % | | $ | 487 | | | $ | 1,154 | | | $ | 4.25 | |
FedEx Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 863 | | | | 12.0 | % |
TNT Express integration expenses | | | 46 | | | | 0.7 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 909 | | | | 12.7 | % |
TNT Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 26 | | | | 1.4 | % |
TNT Express integration expenses | | | 37 | | | | 1.9 | % |
TNT Express intangible asset amortization | | | 20 | | | | 1.1 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 83 | | | | 4.4 | % |
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Full-Year Fiscal 2017
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
| | | Operating | | | Income | | | Net | | | Diluted
Earnings | |
| Dollarsinmillions,exceptEPS | | Income | | | Margin | | | Taxes1 | | | Income2 | | | Per Share5 | |
GAAP measure | | $ | 5,037 | | | | 8.4 | % | | $ | 1,582 | | | $ | 2,997 | | | $ | 11.07 | |
MTM pension accounting adjustments3 | | | (24 | ) | | | — | | | | (18 | ) | | | (6 | ) | | | (0.02 | ) |
TNT Express integration expenses4 | | | 327 | | | | 0.5 | % | | | 82 | | | | 245 | | | | 0.91 | |
TNT Express intangible asset amortization | | | 74 | | | | 0.1 | % | | | 17 | | | | 57 | | | | 0.21 | |
FedEx Trade Networks legal matters | | | 39 | | | | 0.1 | % | | | 15 | | | | 24 | | | | 0.09 | |
FedEx Ground legal matters | | | 22 | | | | — | | | | 9 | | | | 13 | | | | 0.05 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 5,475 | | | | 9.1 | % | | $ | 1,687 | | | $ | 3,330 | | | $ | 12.30 | |
FedEx Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 2,678 | | | | 9.8 | % |
TNT Express integration expenses | | | 117 | | | | 0.4 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 2,795 | | | | 10.2 | % |
TNT Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 84 | | | | 1.1 | % |
TNT Express integration expenses | | | 89 | | | | 1.2 | % |
TNT Express intangible asset amortization | | | 74 | | | | 1.0 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 247 | | | | 3.3 | % |
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Fourth Quarter Fiscal 2016
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
Dollarsinmillions,exceptEPS | | Operating | | | Income
Taxes1 | | | Net
Income2 | | | Diluted
Earnings
Per Share5 | |
| | Income5 | | | Margin | | | | |
GAAP measure | | ($ | 68 | ) | | | (0.5 | %) | | ($ | 111 | ) | | ($ | 70 | ) | | ($ | 0.26 | ) |
Tax impact – legal entity restructuring for TNT integration | | | — | | | | — | | | | 76 | | | | (76 | ) | | | (0.28 | ) |
MTM pension accounting adjustments3 | | | 1,498 | | | | 11.6 | % | | | 552 | | | | 946 | | | | 3.47 | |
TNT expenses and operating results6 | | | 66 | | | | 0.5 | % | | | (13 | ) | | | 91 | | | | 0.34 | |
FedEx Ground legal matter | | | 11 | | | | 0.1 | % | | | 4 | | | | 6 | | | | 0.02 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 1,506 | | | | 11.7 | % | | $ | 508 | | | $ | 897 | | | $ | 3.30 | |
Full-Year Fiscal 2016
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
| | | Operating | | | Income
Taxes1,5 | | | Net
Income2 | | | Diluted
Earnings
Per Share | |
| Dollarsinmillions,exceptEPS | | Income5 | | | Margin5 | | | | |
GAAP measure | | $ | 3,077 | | | | 6.1 | % | | $ | 920 | | | $ | 1,820 | | | $ | 6.51 | |
Tax impact – legal entity restructuring for TNT integration | | | — | | | | — | | | | 76 | | | | (76 | ) | | | (0.27 | ) |
MTM pension accounting adjustments3 | | | 1,498 | | | | 3.0 | % | | | 552 | | | | 946 | | | | 3.39 | |
FedEx Ground legal matters7 | | | 256 | | | | 0.5 | % | | | 97 | | | | 158 | | | | 0.57 | |
TNT expenses and operating results6 | | | 115 | | | | 0.2 | % | | | 6 | | | | 125 | | | | 0.45 | |
FedEx Trade Networks legal matter7 | | | 69 | | | | 0.1 | % | | | 26 | | | | 43 | | | | 0.15 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 5,014 | | | | 10.0 | % | | $ | 1,678 | | | $ | 3,016 | | | $ | 10.80 | |
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Fiscal 2018 Earnings Guidance
| | | | | | |
| Dollarsinmillions,exceptEPS | | Adjustments | | | Diluted Earnings
Per Share |
Earnings per diluted share before MTM pension accounting adjustments(non-GAAP)8 | | | | | | $12.45 to $13.25 |
TNT Express integration expenses | | $ | 275 | | | |
Income tax effect1 | | | (71 | ) | | |
| | | | | | |
Net of tax effect | | $ | 204 | | | 0.75 |
| | | | | | |
Earnings per diluted share with adjustments8 | | | | | | $13.20 to $14.00 |
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 | | – | | MTM pension accounting adjustments reflect theyear-end noncash adjustment to the valuation of the company’s defined benefit pension and other postretirement plans. |
| 4 | | – | | These expenses, including restructuring charges at TNT Express, were recognized at FedEx Corporate, FedEx Express and TNT Express. |
| 5 | | – | | Does not sum to total due to rounding. |
| 6 | | – | | TNT Express’s operating results are immaterial from the time of acquisition (May 25, 2016). |
| 7 | | – | | Net of recognized insurance recovery. |
| 8 | | – | | Theyear-end MTM pension accounting adjustments, which are impracticable to calculate at this time, are excluded. |
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FEDEX CORP. FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2017
(In millions, except earnings per share)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
May 31 | | | Twelve Months Ended
May 31 | |
| | | 20171 | | | 20162 | | | % | | | 20171 | | | 20162 | | | % | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Express segment | | $ | 7,180 | | | $ | 6,715 | | | | 7 | % | | $ | 27,358 | | | $ | 26,451 | | | | 3 | % |
TNT Express segment | | | 1,908 | | | | — | | | | NM | | | | 7,401 | | | | — | | | | NM | |
FedEx Ground segment | | | 4,678 | | | | 4,286 | | | | 9 | % | | | 18,075 | | | | 16,574 | | | | 9 | % |
FedEx Freight segment | | | 1,696 | | | | 1,605 | | | | 6 | % | | | 6,443 | | | | 6,200 | | | | 4 | % |
FedEx Services segment | | | 423 | | | | 416 | | | | 2 | % | | | 1,621 | | | | 1,593 | | | | 2 | % |
Eliminations and other | | | (157 | ) | | | (43 | ) | | | NM | | | | (579 | ) | | | (453 | ) | | | (28 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenue | | | 15,728 | | | | 12,979 | | | | 21 | % | | | 60,319 | | | | 50,365 | | | | 20 | % |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 5,483 | | | | 4,774 | | | | 15 | % | | | 21,542 | | | | 18,581 | | | | 16 | % |
Purchased transportation | | | 3,442 | | | | 2,461 | | | | 40 | % | | | 13,611 | | | | 9,966 | | | | 37 | % |
Rentals and landing fees | | | 814 | | | | 733 | | | | 11 | % | | | 3,240 | | | | 2,854 | | | | 14 | % |
Depreciation and amortization | | | 754 | | | | 667 | | | | 13 | % | | | 2,995 | | | | 2,631 | | | | 14 | % |
Fuel | | | 730 | | | | 535 | | | | 36 | % | | | 2,773 | | | | 2,399 | | | | 16 | % |
Maintenance and repairs | | | 609 | | | | 527 | | | | 16 | % | | | 2,374 | | | | 2,108 | | | | 13 | % |
Retirement plansmark-to-market adjustment | | | (24 | ) | | | 1,498 | | | | NM | | | | (24 | ) | | | 1,498 | | | | NM | |
Other | | | 2,339 | | | | 1,852 | | | | 26 | % | | | 8,771 | | | | 7,251 | | | | 21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 14,147 | | | | 13,047 | | | | 8 | % | | | 55,282 | | | | 47,288 | | | | 17 | % |
| | | | | | |
Operating Income: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Express segment | | | 863 | | | | 757 | | | | 14 | % | | | 2,678 | | | | 2,519 | | | | 6 | % |
TNT Express segment | | | 26 | | | | — | | | | NM | | | | 84 | | | | — | | | | NM | |
FedEx Ground segment | | | 702 | | | | 656 | | | | 7 | % | | | 2,292 | | | | 2,276 | | | | 1 | % |
FedEx Freight segment | | | 133 | | | | 137 | | | | (3 | %) | | | 397 | | | | 426 | | | | (7 | %) |
Corporate, eliminations and other | | | (143 | ) | | | (1,618 | ) | | | NM | | | | (414 | ) | | | (2,144 | ) | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Income (Loss) | | | 1,581 | | | | (68 | ) | | | NM | | | | 5,037 | | | | 3,077 | | | | 64 | % |
| | | | | | |
Other (Expense) Income: | | | | | | | | | | | | | | | | | | | | | | | | |
Interest, net | | | (125 | ) | | | (97 | ) | | | 29 | % | | | (479 | ) | | | (315 | ) | | | 52 | % |
Other, net | | | 4 | | | | (16 | ) | | | NM | | | | 21 | | | | (22 | ) | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Expense | | | (121 | ) | | | (113 | ) | | | 7 | % | | | (458 | ) | | | (337 | ) | | | 36 | % |
| | | | | | |
Pretax Income (Loss) | | | 1,460 | | | | (181 | ) | | | NM | | | | 4,579 | | | | 2,740 | | | | 67 | % |
| | | | | | |
Provision for Income Taxes | | | 440 | | | | (111 | ) | | | NM | | | | 1,582 | | | | 920 | | | | 72 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income (Loss) | | $ | 1,020 | | | ($ | 70 | ) | | | NM | | | $ | 2,997 | | | $ | 1,820 | | | | 65 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Diluted Earnings Per Share | | $ | 3.75 | | | ($ | 0.26 | ) | | | NM | | | $ | 11.07 | | | $ | 6.51 | | | | 70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Weighted Average Diluted Common and Common Equivalent Shares | | | 271 | | | | 269 | | | | 1 | % | | | 270 | | | | 279 | | | | (3 | %) |
| | | | | | |
Capital Expenditures | | $ | 1,326 | | | $ | 1,257 | | | | 5 | % | | $ | 5,116 | | | $ | 4,818 | | | | 6 | % |
| | | | |
| 1 | | - | | Includes $124 million of integration expenses, including restructuring charges, for the fourth quarter and $327 million for the full year of fiscal 2017, as well as $20 million of intangible asset amortization expense for the fourth quarter and $74 million for the full year of fiscal 2017. Also includes $39 million and $22 million in connection with the legal matters involving FedEx Trade Networks and FedEx Ground, respectively, for the fourth quarter and full year of fiscal 2017 included in “Corporate, eliminations, and other”. |
| 2 | | - | | Includes legal reserve increases of $325 million included in the “Corporate, eliminations, and other” results for the full year of fiscal 2016, and transaction, financing and integration planning expenses related to the TNT Express acquisition as well as TNT Express’s immaterial operating results from the time of acquisition of $79 million for the fourth quarter of fiscal 2016 and $132 million for fiscal 2016, which are predominantly included in the “Corporate, eliminations, and other” results. |
14
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
Fourth Quarter Fiscal 2017
(In millions)
| | | | | | | | |
| | | May 31, 2017
(Unaudited) | | | May 31, 2016 | |
| | |
ASSETS | | | | | | | | |
| | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 3,969 | | | $ | 3,534 | |
Receivables, less allowances | | | 7,599 | | | | 7,252 | |
Spare parts, supplies and fuel, less allowances | | | 514 | | | | 496 | |
Prepaid expenses and other | | | 546 | | | | 707 | |
| | | | | | | | |
Total current assets | | | 12,628 | | | | 11,989 | |
| | |
Property and Equipment, at Cost | | | 50,626 | | | | 47,018 | |
Less accumulated depreciation and amortization | | | 24,645 | | | | 22,734 | |
| | | | | | | | |
Net property and equipment | | | 25,981 | | | | 24,284 | |
| | |
Other Long-Term Assets | | | | | | | | |
Goodwill | | | 7,154 | | | | 6,747 | |
Other assets | | | 2,789 | | | | 2,939 | |
| | | | | | | | |
Total other long-term assets | | | 9,943 | | | | 9,686 | |
| | | | | | | | |
| | |
| | $ | 48,552 | | | $ | 45,959 | |
| | | | | | | | |
| | |
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | | | | | | | | |
| | |
Current Liabilities | | | | | | | | |
Current portion of long-term debt | | $ | 22 | | | $ | 29 | |
Accrued salaries and employee benefits | | | 1,914 | | | | 1,972 | |
Accounts payable | | | 2,752 | | | | 2,944 | |
Accrued expenses | | | 3,232 | | | | 3,063 | |
| | | | | | | | |
Total current liabilities | | | 7,920 | | | | 8,008 | |
| | |
Long-Term Debt, Less Current Portion | | | 14,909 | | | | 13,733 | |
| | |
Other Long-Term Liabilities | | | | | | | | |
Deferred income taxes | | | 2,527 | | | | 1,567 | |
Pension, postretirement healthcare and other benefit obligations | | | 4,487 | | | | 6,227 | |
Self-insurance accruals | | | 1,494 | | | | 1,314 | |
Deferred lease obligations | | | 531 | | | | 400 | |
Deferred gains, principally related to aircraft transactions | | | 137 | | | | 155 | |
Other liabilities | | | 474 | | | | 771 | |
| | | | | | | | |
Total other long-term liabilities | | | 9,650 | | | | 10,434 | |
| | |
Commitments and Contingencies | | | | | | | | |
| | |
Common Stockholders’ Investment | | | | | | | | |
Common stock, $0.10 par value, 800 million shares authorized | | | 32 | | | | 32 | |
Additionalpaid-in capital | | | 3,005 | | | | 2,892 | |
Retained earnings | | | 20,833 | | | | 18,371 | |
Accumulated other comprehensive loss | | | (415 | ) | | | (169 | ) |
Treasury stock, at cost | | | (7,382 | ) | | | (7,342 | ) |
| | | | | | | | |
Total common stockholders’ investment | | | 16,073 | | | | 13,784 | |
| | | | | | | | |
| | |
| | $ | 48,552 | | | $ | 45,959 | |
| | | | | | | | |
15
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Fiscal 2017
(In millions)
(Unaudited)
| | | | | | | | |
| | | Year Ended
May 31 | |
| | | 2017 | | | 2016 | |
| | |
Operating Activities: | | | | | | | | |
Net income | | $ | 2,997 | | | $ | 1,820 | |
Noncash charges: | | | | | | | | |
Retirement plansmark-to-market adjustment | | | (24 | ) | | | 1,498 | |
Depreciation and amortization | | | 2,995 | | | | 2,631 | |
Other, net | | | 1,199 | | | | 296 | |
Gain from sale of an investment | | | (35 | ) | | | — | |
Changes in operating assets and liabilities, net | | | (2,202 | ) | | | (537 | ) |
| | | | | | | | |
| | |
Cash provided by operating activities | | | 4,930 | | | | 5,708 | |
| | |
Investing Activities: | | | | | | | | |
Capital expenditures | | | (5,116 | ) | | | (4,818 | ) |
Business acquisitions, net of cash acquired | | | — | | | | (4,618 | ) |
Proceeds from asset dispositions and other | | | 135 | | | | (10 | ) |
| | | | | | | | |
| | |
Cash used in investing activities | | | (4,981 | ) | | | (9,446 | ) |
| | |
Financing Activities: | | | | | | | | |
Principal payments on debt | | | (82 | ) | | | (41 | ) |
Proceeds from debt issuances | | | 1,190 | | | | 6,519 | |
Proceeds from stock issuances | | | 337 | | | | 183 | |
Dividends paid | | | (426 | ) | | | (277 | ) |
Purchase of treasury stock | | | (509 | ) | | | (2,722 | ) |
Other, net | | | 18 | | | | (51 | ) |
| | | | | | | | |
| | |
Cash provided by financing activities | | | 528 | | | | 3,611 | |
| | |
Effect of exchange rate changes on cash | | | (42 | ) | | | (102 | ) |
| | | | | | | | |
| | |
Net increase (decrease) in cash and cash equivalents | | | 435 | | | | (229 | ) |
| | |
Cash and cash equivalents at beginning of period | | | 3,534 | | | | 3,763 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 3,969 | | | $ | 3,534 | |
| | | | | | | | |
16
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2017
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
May 31 | | | Twelve Months Ended
May 31 | |
| | | 2017 | | | 2016 | | | % | | | 2017 | | | 2016 | | | % | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Package Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | $ | 1,785 | | | $ | 1,719 | | | | 4 | % | | $ | 6,958 | | | $ | 6,763 | | | | 3 | % |
U.S. Overnight Envelope | | | 463 | | | | 435 | | | | 6 | % | | | 1,750 | | | | 1,662 | | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Overnight | | | 2,248 | | | | 2,154 | | | | 4 | % | | | 8,708 | | | | 8,425 | | | | 3 | % |
U.S. Deferred | | | 930 | | | | 811 | | | | 15 | % | | | 3,528 | | | | 3,379 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Package Revenue | | | 3,178 | | | | 2,965 | | | | 7 | % | | | 12,236 | | | | 11,804 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 1,552 | | | | 1,454 | | | | 7 | % | | | 5,827 | | | | 5,697 | | | | 2 | % |
International Economy | | | 653 | | | | 594 | | | | 10 | % | | | 2,412 | | | | 2,282 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Package | | | 2,205 | | | | 2,048 | | | | 8 | % | | | 8,239 | | | | 7,979 | | | | 3 | % |
International Domestic1 | | | 335 | | | | 319 | | | | 5 | % | | | 1,299 | | | | 1,285 | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Package Revenue | | | 5,718 | | | | 5,332 | | | | 7 | % | | | 21,774 | | | | 21,068 | | | | 3 | % |
| | | | | | |
Freight Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
U.S. | | | 633 | | | | 683 | | | | (7 | %) | | | 2,528 | | | | 2,481 | | | | 2 | % |
International Priority | | | 409 | | | | 355 | | | | 15 | % | | | 1,502 | | | | 1,384 | | | | 9 | % |
International Airfreight | | | 36 | | | | 28 | | | | 29 | % | | | 118 | | | | 126 | | | | (6 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Freight Revenue | | | 1,078 | | | | 1,066 | | | | 1 | % | | | 4,148 | | | | 3,991 | | | | 4 | % |
| | | | | | |
Other Revenue2 | | | 384 | | | | 317 | | | | 21 | % | | | 1,436 | | | | 1,392 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total Express Revenue | | $ | 7,180 | | | $ | 6,715 | | | | 7 | % | | $ | 27,358 | | | $ | 26,451 | | | | 3 | % |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 2,682 | | | | 2,602 | | | | 3 | % | | | 10,536 | | | | 10,240 | | | | 3 | % |
Purchased transportation | | | 615 | | | | 539 | | | | 14 | % | | | 2,337 | | | | 2,301 | | | | 2 | % |
Rentals and landing fees | | | 388 | | | | 427 | | | | (9 | %) | | | 1,618 | | | | 1,688 | | | | (4 | %) |
Depreciation and amortization | | | 363 | | | | 347 | | | | 5 | % | | | 1,431 | | | | 1,385 | | | | 3 | % |
Fuel | | | 571 | | | | 444 | | | | 29 | % | | | 2,153 | | | | 2,023 | | | | 6 | % |
Maintenance and repairs | | | 370 | | | | 313 | | | | 18 | % | | | 1,414 | | | | 1,294 | | | | 9 | % |
Intercompany charges | | | 489 | | | | 475 | | | | 3 | % | | | 1,881 | | | | 1,846 | | | | 2 | % |
Other | | | 839 | | | | 811 | | | | 3 | % | | | 3,310 | | | | 3,155 | | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 6,317 | | | | 5,958 | | | | 6 | % | | | 24,680 | | | | 23,932 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | $ | 863 | | | $ | 757 | | | | 14 | % | | $ | 2,678 | | | $ | 2,519 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Margin | | | 12.0 | % | | | 11.3 | % | | | 0.7 pts | | | | 9.8 | % | | | 9.5 | % | | | 0.3 pts | |
1 - International Domestic revenues represent international intra-country operations.
2 - Includes FedEx Trade Networks and FedEx SupplyChain Systems.
17
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
Fourth Quarter Fiscal 2017
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | May 31 | | | May 31 | |
| | | 2017 | | | 2016 | | | % | | | 2017 | | | 2016 | | | % | |
PACKAGE STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Daily Package Volume (000s): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | | 1,204 | | | | 1,269 | | | | (5 | %) | | | 1,265 | | | | 1,271 | | | | — | |
U.S. Overnight Envelope | | | 565 | | | | 558 | | | | 1 | % | | | 561 | | | | 541 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Overnight Package | | | 1,769 | | | | 1,827 | | | | (3 | %) | | | 1,826 | | | | 1,812 | | | | 1 | % |
U.S. Deferred | | | 890 | | | | 825 | | | | 8 | % | | | 900 | | | | 901 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Domestic Package | | | 2,659 | | | | 2,652 | | | | — | | | | 2,726 | | | | 2,713 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 419 | | | | 399 | | | | 5 | % | | | 405 | | | | 394 | | | | 3 | % |
International Economy | | | 195 | | | | 184 | | | | 6 | % | | | 186 | | | | 181 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Package | | | 614 | | | | 583 | | | | 5 | % | | | 591 | | | | 575 | | | | 3 | % |
International Domestic2 | | | 939 | | | | 869 | | | | 8 | % | | | 934 | | | | 888 | | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Daily Packages | | | 4,212 | | | | 4,104 | | | | 3 | % | | | 4,251 | | | | 4,176 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Yield (Revenue Per Package): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | $ | 22.81 | | | $ | 20.83 | | | | 10 | % | | $ | 21.57 | | | $ | 20.79 | | | | 4 | % |
U.S. Overnight Envelope | | | 12.60 | | | | 11.99 | | | | 5 | % | | | 12.24 | | | | 11.99 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Composite | | | 19.55 | | | | 18.13 | | | | 8 | % | | | 18.70 | | | | 18.16 | | | | 3 | % |
U.S. Deferred | | | 16.07 | | | | 15.12 | | | | 6 | % | | | 15.37 | | | | 14.66 | | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Domestic Composite | | | 18.39 | | | | 17.20 | | | | 7 | % | | | 17.60 | | | | 17.00 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 56.97 | | | | 56.12 | | | | 2 | % | | | 56.44 | | | | 56.47 | | | | — | |
International Economy | | | 51.46 | | | | 49.49 | | | | 4 | % | | | 50.83 | | | | 49.15 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Composite | | | 55.23 | | | | 54.02 | | | | 2 | % | | | 54.68 | | | | 54.16 | | | | 1 | % |
International Domestic2 | | | 5.51 | | | | 5.66 | | | | (3 | %) | | | 5.45 | | | | 5.65 | | | | (4 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Package Yield | | $ | 20.89 | | | $ | 19.99 | | | | 5 | % | | $ | 20.09 | | | $ | 19.71 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
FREIGHT STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Daily Freight Pounds (000s): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | | 8,071 | | | | 8,885 | | | | (9 | %) | | | 8,190 | | | | 8,178 | | | | — | |
International Priority | | | 2,810 | | | | 2,530 | | | | 11 | % | | | 2,670 | | | | 2,510 | | | | 6 | % |
International Airfreight | | | 732 | | | | 586 | | | | 25 | % | | | 641 | | | | 623 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Avg Daily Freight Pounds | | | 11,613 | | | | 12,001 | | | | (3 | %) | | | 11,501 | | | | 11,311 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Revenue Per Freight Pound: | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | $ | 1.21 | | | $ | 1.18 | | | | 3 | % | | $ | 1.21 | | | $ | 1.19 | | | | 2 | % |
International Priority | | | 2.24 | | | | 2.16 | | | | 4 | % | | | 2.21 | | | | 2.15 | | | | 3 | % |
International Airfreight | | | 0.74 | | | | 0.73 | | | | 1 | % | | | 0.72 | | | | 0.79 | | | | (9 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Freight Yield | | $ | 1.43 | | | $ | 1.37 | | | | 4 | % | | $ | 1.41 | | | $ | 1.38 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Weekdays | | | 65 | | | | 65 | | | | — | | | | 255 | | | | 256 | | | | — | |
1 - Package and freight statistics include only the operations of FedEx Express.
2 - International Domestic revenues represent international intra-country operations.
18
TNT EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Fourth Quarter Fiscal 2017
(Dollars in millions)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | May 31, 2017 | | | May 31, 2017 | |
FINANCIAL HIGHLIGHTS | | | | | | | | |
| | |
Revenue | | $ | 1,908 | | | $ | 7,401 | |
| | |
Operating Expenses: | | | | | | | | |
Salaries and employee benefits | | | 538 | | | | 2,077 | |
Purchased transportation | | | 789 | | | | 3,030 | |
Rentals and landing fees | | | 100 | | | | 353 | |
Depreciation and amortization | | | 55 | | | | 239 | |
Fuel | | | 54 | | | | 225 | |
Maintenance and repairs | | | 29 | | | | 143 | |
Intercompany charges | | | 6 | | | | 17 | |
Other | | | 311 | | | | 1,233 | |
| | | | | | | | |
Total Operating Expenses | | | 1,882 | | | | 7,317 | |
| | | | | | | | |
Operating Income | | $ | 26 | | | $ | 84 | |
| | | | | | | | |
Operating Margin | | | 1.4 | % | | | 1.1 | % |
| | |
OPERATING STATISTICS | | | | | | | | |
| | |
Operating Weekdays | | | 63 | | | | 253 | |
| | |
Package: | | | | | | | | |
Average Daily Package Volume (000s) | | | 1,046 | | | | 1,022 | |
Yield (Revenue Per Package) | | $ | 24.77 | | | $ | 24.77 | |
| | |
Freight: | | | | | | | | |
Average Daily Freight Pounds (000s) | | | 3,494 | | | | 3,608 | |
Revenue Per Freight Pound | | $ | 0.54 | | | $ | 0.56 | |
19
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Fourth Quarter Fiscal 2017
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
May 31 | | | Twelve Months Ended
May 31 | |
| | | 2017 | | | 2016 | | | % | | | 2017 | | | 2016 | | | % | |
FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Ground | | $ | 4,295 | | | $ | 3,889 | | | | 10 | % | | $ | 16,497 | | | $ | 15,050 | | | | 10 | % |
FedEx Supply Chain | | | 383 | | | | 397 | | | | (4 | %) | | | 1,578 | | | | 1,524 | | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues | | | 4,678 | | | | 4,286 | | | | 9 | % | | | 18,075 | | | | 16,574 | | | | 9 | % |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 808 | | | | 729 | | | | 11 | % | | | 3,228 | | | | 2,834 | | | | 14 | % |
Purchased transportation | | | 1,838 | | | | 1,687 | | | | 9 | % | | | 7,406 | | | | 6,817 | | | | 9 | % |
Rentals | | | 197 | | | | 173 | | | | 14 | % | | | 764 | | | | 639 | | | | 20 | % |
Depreciation and amortization | | | 176 | | | | 157 | | | | 12 | % | | | 684 | | | | 608 | | | | 13 | % |
Fuel | | | 2 | | | | 2 | | | | — | | | | 10 | | | | 10 | | | | — | |
Maintenance and repairs | | | 85 | | | | 79 | | | | 8 | % | | | 322 | | | | 288 | | | | 12 | % |
Intercompany charges | | | 334 | | | | 320 | | | | 4 | % | | | 1,317 | | | | 1,230 | | | | 7 | % |
Other | | | 536 | | | | 483 | | | | 11 | % | | | 2,052 | | | | 1,872 | | | | 10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 3,976 | | | | 3,630 | | | | 10 | % | | | 15,783 | | | | 14,298 | | | | 10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | $ | 702 | | | $ | 656 | | | | 7 | % | | $ | 2,292 | | | $ | 2,276 | | | | 1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Margin | | | 15.0 | % | | | 15.3 | % | | | (0.3 pts | ) | | | 12.7 | % | | | 13.7 | % | | | (1.0 pts | ) |
| | | | | | |
OPERATING STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Weekdays | | | 65 | | | | 65 | | | | — | | | | 255 | | | | 256 | | | | — | |
| | | | | | |
Average Daily Package Volume (000s) | | | 7,700 | | | | 7,453 | | | | 3 | % | | | 7,896 | | | | 7,526 | | | | 5 | % |
| | | | | | |
Yield (Revenue Per Package) | | $ | 8.57 | | | $ | 8.01 | | | | 7 | % | | $ | 8.18 | | | $ | 7.80 | | | | 5 | % |
1 - Operating statistics include only the operations of FedEx Ground (including FedEx SmartPost).
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FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Fourth Quarter Fiscal 2017
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | May 31 | | | May 31 | |
| | | 2017 | | | 2016 | | | % | | | 2017 | | | 2016 | | | % | |
FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Revenue | | $ | 1,696 | | | $ | 1,605 | | | | 6 | % | | $ | 6,443 | | | $ | 6,200 | | | | 4 | % |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 792 | | | | 757 | | | | 5 | % | | | 3,058 | | | | 2,925 | | | | 5 | % |
Purchased transportation | | | 249 | | | | 242 | | | | 3 | % | | | 988 | | | | 962 | | | | 3 | % |
Rentals | | | 35 | | | | 33 | | | | 6 | % | | | 136 | | | | 142 | | | | (4 | %) |
Depreciation and amortization | | | 70 | | | | 63 | | | | 11 | % | | | 269 | | | | 248 | | | | 8 | % |
Fuel | | | 102 | | | | 86 | | | | 19 | % | | | 384 | | | | 363 | | | | 6 | % |
Maintenance and repairs | | | 56 | | | | 52 | | | | 8 | % | | | 215 | | | | 206 | | | | 4 | % |
Intercompany charges | | | 127 | | | | 119 | | | | 7 | % | | | 497 | | | | 456 | | | | 9 | % |
Other | | | 132 | | | | 116 | | | | 14 | % | | | 499 | | | | 472 | | | | 6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 1,563 | | | | 1,468 | | | | 6 | % | | | 6,046 | | | | 5,774 | | | | 5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | $ | 133 | | | $ | 137 | | | | (3 | %) | | $ | 397 | | | $ | 426 | | | | (7 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Margin | | | 7.8 | % | | | 8.5 | % | | | (0.7 pts | ) | | | 6.2 | % | | | 6.9 | % | | | (0.7 pts | ) |
| | | | | | |
OPERATING STATISTICS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
LTL Operating Weekdays | | | 65 | | | | 65 | | | | — | | | | 254 | | | | 254 | | | | — | |
| | | | | | |
Average Daily LTL Shipments (000s) | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | | 71.7 | | | | 70.8 | | | | 1 | % | | | 70.6 | | | | 67.7 | | | | 4 | % |
Economy | | | 31.0 | | | | 32.0 | | | | (3 | %) | | | 31.0 | | | | 31.1 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Daily LTL Shipments | | | 102.7 | | | | 102.8 | | | | — | | | | 101.6 | | | | 98.8 | | | | 3 | % |
| | | | | | |
Weight Per LTL Shipment (lbs) | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | | 1,183 | | | | 1,197 | | | | (1 | %) | | | 1,176 | | | | 1,191 | | | | (1 | %) |
Economy | | | 1,152 | | | | 1,121 | | | | 3 | % | | | 1,129 | | | | 1,145 | | | | (1 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Weight Per LTL Shipment | | | 1,174 | | | | 1,173 | | | | — | | | | 1,161 | | | | 1,177 | | | | (1 | %) |
| | | | | | |
LTL Revenue/Shipment | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | $ | 224.60 | | | $ | 214.32 | | | | 5 | % | | $ | 221.67 | | | $ | 218.50 | | | | 1 | % |
Economy | | | 274.65 | | | | 254.11 | | | | 8 | % | | | 265.77 | | | | 261.27 | | | | 2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite LTL Revenue/Shipment | | $ | 239.68 | | | $ | 226.71 | | | | 6 | % | | $ | 235.20 | | | $ | 232.11 | | | | 1 | % |
| | | | | | |
LTL Revenue/CWT | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | $ | 18.98 | | | $ | 17.91 | | | | 6 | % | | $ | 18.85 | | | $ | 18.35 | | | | 3 | % |
Economy | | | 23.83 | | | | 22.66 | | | | 5 | % | | | 23.55 | | | | 22.81 | | | | 3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite LTL Revenue/CWT | | $ | 20.41 | | | $ | 19.33 | | | | 6 | % | | $ | 20.25 | | | $ | 19.73 | | | | 3 | % |
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