Exhibit 99.1
FedEx Corp. Reports Third Quarter Earnings
MEMPHIS, Tenn., March 20, 2018 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the third quarter ended February 28 (adjusted measures exclude the items listed below for the applicable fiscal year):
| | | | | | | | |
| | | Fiscal 2018 | | Fiscal 2017 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) | | As Reported
(GAAP) | | Adjusted
(non-GAAP) |
Revenue | | $16.5 billion | | $16.5 billion | | $15.0 billion | | $15.0 billion |
Operating income | | $1.00 billion | | $1.11 billion | | $1.03 billion | | $1.10 billion |
Operating margin | | 6.1% | | 6.7% | | 6.8% | | 7.4% |
Net income | | $2.07 billion | | $1.02 billion | | $562 million | | $625 million |
Diluted EPS | | $7.59 | | $3.72 | | $2.07 | | $2.30 |
This year’s quarterly consolidated earnings have been adjusted to exclude the benefit of an estimated $1.15 billion reduction in the company’s net U.S. deferred tax liability attributable to the lower statutory rate enacted as part of the Tax Cuts and Jobs Act (TCJA). Additionally, this year’s and last year’s quarterly consolidated earnings have been adjusted for TNT Express integration expenses. The adjustments are as follows:
| | | | | | | | |
| | | Third Quarter | |
| Impact per diluted share | | Fiscal 2018 | | | Fiscal 2017 | |
Net U.S. deferred tax liability remeasurement | | ($ | 4.21 | ) | | | — | |
TNT Express integration expenses | | | 0.34 | | | | 0.23 | |
“Execution of our long-term growth strategies, customer demand for the unique value of our broad portfolio of solutions and healthy growth in the global economy are driving our performance,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “We expect strong operating performance in each of our transportation segments in the fourth quarter.”
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Operating results benefited from higher base rates, increased volume at FedEx Ground and FedEx Freight, and a favorable net impact from fuel. Results were negatively affected by significantly higher variable compensation accruals, increased peak-related costs at FedEx Express and the impact of adverse weather. Variable compensation increased in connection with the company’s pay actions that were announced following the passage of the TCJA. These variable compensation accruals include theyear-to-date impact of the announced changes. TNT Express integration expenses were also higher.
Net results include a tax benefit of $1.53 billion ($5.60 per diluted share) attributable to the TCJA, which has three primary components:
| | • | | A provisional benefit of $1.15 billion ($4.21 per diluted share) from the remeasurement of the company’s net U.S. deferred tax liability for lower tax rates; |
| | • | | A benefit of approximately $200 million ($0.75 per diluted share) from an incremental pension contribution made in February and deductible against the company’s prior year taxes at 35%; and |
| | • | | A benefit of approximately $170 million ($0.60 per diluted share) attributable to thephase-in of the reduced tax rate applied to the company’syear-to-date earnings. |
Outlook
FedEx is unable to forecast the fiscal 2018year-endmark-to-market (MTM) pension accounting adjustments. As a result, the company is unable to provide fiscal 2018earnings-per-share guidance or projected fourth quarter fiscal 2018 consolidated operating income or margin on a GAAP basis.
Beforeyear-end MTM pension accounting adjustments, earnings are now projected to be $17.90 to $18.30 per diluted share for fiscal 2018. The fiscal 2018 earnings forecast beforeyear-end MTM pension accounting adjustments and excluding the estimate of the remeasurement of the company’s net U.S. deferred tax liability, expenses related to TNT Express integration and certain first quarter FedEx Trade Networks legal matters is now $15.00 to $15.40 per diluted share.
Beforeyear-end MTM pension accounting adjustments, fourth quarter fiscal 2018 consolidated operating income and margin are projected to be $1.84 billion to $1.94 billion and 10.4% to 11.1%, respectively. Excludingyear-end MTM pension accounting adjustments and TNT Express integration expenses, fourth quarter consolidated operating income and margin are projected to be $1.95 billion to $2.05 billion and 11.0% to 11.8%, respectively.
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The projected fourth quarter fiscal 2018 operating margin for each transportation segment is as follows (the adjusted operating margin for the FedEx Express segment excludes TNT Express integration expenses):
| | | | |
| | | Projected Fourth Quarter
Operating Margin |
| | | As Reported
(GAAP) | | Adjusted
(Non-GAAP) |
FedEx Express segment | | 9.1% to 9.6% | | 9.9% to 10.4% |
FedEx Ground segment | | 17.0% to 17.5% | | N/A |
FedEx Freight segment | | 8.0% to 9.0% | | N/A |
These margin forecasts reflect the March 1, 2018 realignment of the company’s specialty logistics ande-commerce solutions into a new organizational structure within the FedEx Express segment. All of the above forecasts assume moderate economic growth.
The capital spending forecast for fiscal 2018 is now $5.8 billion, down $100 million from the prior forecast.
“We are increasing our fiscal 2018 earnings outlook due to foreign tax benefits from our international corporate structure, the benefits from U.S. tax reform and improved operating performance,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We remain committed to improving operating income at the FedEx Express segment by $1.2 to $1.5 billion in fiscal 2020 versus fiscal 2017.”
FedEx Express Segment
For the third quarter, the FedEx Express segment reported (adjusted measures exclude TNT Express integration expenses):
| | | | | | | | |
| | | Fiscal 2018 | | Fiscal 2017 |
| | | As Reported
(GAAP) | | Adjusted
(non-GAAP) | | As Reported
(GAAP) | | Adjusted
(non-GAAP) |
Revenue | | $9.37 billion | | $9.37 billion | | $8.57 billion | | $8.57 billion |
Operating income | | $424 million | | $510 million | | $557 million | | $610 million |
Operating income YOY change % | | (24%) | | (16%) | | | | |
Operating margin | | 4.5% | | 5.4% | | 6.5% | | 7.1% |
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Revenue increased due to improved base rates, currency exchange rates and higher fuel surcharges, despite a lingering impact from the June cyberattack affecting TNT Express. Total package volume declined 1%, as lower international domestic and U.S. domestic volumes offset international export package volume growth of 1%. Average daily freight pounds increased 3% on higher volume in both international and U.S. freight services.
As-reported results during the quarter were primarily affected by the estimated impacts of:
| | • | | Higher variable compensation accruals |
| | • | | Increased peak-related costs |
| | • | | Higher TNT Express integration expenses |
| | • | | Unfavorable currency exchange rates |
Combined, these six factors negatively affected the segment’s year-over-year results by approximately $170 million.
FedEx Ground Segment
For the third quarter, the FedEx Ground segment reported:
| | | | | | |
| | | Fiscal 2018 | | Fiscal 2017 | | Change |
Revenue | | $5.22 billion | | $4.69 billion | | 11% |
Operating income | | $634 million | | $515 million | | 23% |
Operating margin | | 12.1% | | 11.0% | | 1.1 pts |
Strong revenue growth was driven by average daily package volume growth of 6% and higher base rates. During peak season, record volume was delivered with exceptional service through FedEx Ground’s highly automated and flexible network.
Operating results improved due to the benefits from strong revenue growth and ongoing cost management, partially offset by increased purchased transportation, seasonal staffing and network expansion costs as well as higher variable compensation accruals.
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FedEx Freight Segment
For the third quarter, the FedEx Freight segment reported:
| | | | | | |
| | | Fiscal 2018 | | Fiscal 2017 | | Change |
Revenue | | $1.69 billion | | $1.49 billion | | 14% |
Operating income | | $55 million | | $41 million | | 34% |
Operating margin | | 3.2% | | 2.7% | | 0.5 pts |
Revenue increased due to less-than truckload (LTL) revenue per shipment growth of 8% and average daily LTL shipment growth of 6%.
Operating results improved primarily due to the benefit from higher LTL revenue per shipment, partially offset by higher variable compensation accruals.
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 $64 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 425,000 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 third quarter fiscal 2018 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 March 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, a significant data breach or other disruption to our technology infrastructure, the ongoing impact of the June 27, 2017 cyberattack affecting TNT Express, our ability to successfully integrate the businesses and operations of FedEx Express and TNT Express in the expected time frame or at the expected cost, changes in fuel prices or currency exchange rates, our ability to match capacity to shifting volume levels, new U.S. domestic or international government regulation, future guidance and interpretations relating to the recently enacted TCJA and our ability to realize the benefits of certain provisions of the TCJA, our ability to effectively operate, integrate and leverage acquired businesses, our ability to achieve our FedEx Express segment profit improvement goal, 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 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
Third Quarter Fiscal 2018 and Fiscal 2017 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 third quarter fiscal 2018 and 2017 consolidated operating income and margin, net income and diluted earnings per share, and adjusted third quarter fiscal 2018 and 2017 FedEx Express segment operating income and margin. These financial measures have been adjusted to exclude the impact of the following items (as applicable):
| | • | | Net U.S. deferred tax liability remeasurement; and |
| | • | | TNT Express integration expenses. |
The provisional benefit from the remeasurement of our net U.S. deferred tax liability is excluded from our third quarter fiscal 2018 consolidatednon-GAAP financial measures because it results from thenon-recurring impact of a significant change in the U.S. federal statutory tax rate due to the enactment of the TCJA. The adjustment to our third quarter fiscal 2018 consolidated financial measures includes only this transitional impact. This provisional benefit is an estimate subject to adjustment during a12-month measurement period.
We expect to incur significant expenses over the next few years in connection with our integration of TNT Express. We have adjusted our third quarter fiscal 2018 and 2017 consolidated financial measures and the FedEx Express segment third quarter fiscal 2018 and 2017 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 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 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.
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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 2018Earnings-Per-Share Guidance and Fourth Quarter Fiscal 2018 Operating Income and Margin Projections
Our fiscal 2018earnings-per-share (“EPS”) guidance is anon-GAAP financial measure because it excludes the fiscal 2018year-end MTM pension accounting adjustments, the provisional benefit from the remeasurement of our net U.S. deferred tax liability, projected fiscal 2018 TNT Express integration expenses (which include any restructuring charges at TNT Express), and charges related to certain first quarter FedEx Trade Networks legal matters.
Our projected fourth quarter fiscal 2018 consolidated operating income and margin arenon-GAAP financial measures because they exclude the fiscal 2018year-end MTM pension accounting adjustments and projected fourth quarter fiscal 2018 TNT Express integration expenses. Our projected fourth quarter fiscal 2018 FedEx Express segment operating margin is anon-GAAP financial measure because it excludes projected fourth quarter fiscal 2018 TNT Express integration expenses.
We have provided fiscal 2018non-GAAP EPS guidance, projected fourth quarter fiscal 2018non-GAAP consolidated operating income and margin and projected fourth quarter fiscal 2018non-GAAP FedEx Express segment operating margin for the same reasons that were outlined above for historicalnon-GAAP measures. The fiscal 2018year-end MTM pension accounting adjustments are excluded from our fiscal 2018non-GAAP EPS guidance and projected fourth quarter fiscal 2018 consolidated operating income and margin because thesenon-cash items are unrelated to our core operating performance. Similarly, charges related to certain first quarter FedEx Trade Networks legal matters are excluded from our fiscal 2018non-GAAP EPS guidance because they are unrelated to our
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core operating performance and to assist investors with assessing trends in our underlying business. The provisional benefit from the remeasurement of our net U.S. deferred tax liability is excluded from our fiscal 2018non-GAAP EPS guidance for the same reason described above for historicalnon-GAAP measures. Projected fiscal 2018 TNT Express integration expenses are excluded from our fiscal 2018non-GAAP EPS guidance, projected fourth quarter fiscal 2018non-GAAP consolidated operating income and margin and FedEx Express segment operating margin for the same reasons described 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 fiscal 2018non-GAAP EPS guidance or projected fourth quarter fiscal 2018 consolidated operating income or margin. For this reason, a full reconciliation of our fiscal 2018non-GAAP EPS guidance and projected fourth quarter fiscal 2018non-GAAP consolidated operating income and margin to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fourth quarter fiscal 2018 MTM pension accounting adjustments could have a material impact on our full-year and fourth quarter fiscal 2018 consolidated financial results. The tables included below titled “Fiscal 2018Earnings-Per-Share Outlook” and “Fourth Quarter Fiscal 2018 Outlook—FedEx Corporation” outline the impact of the items that are excluded from our fiscal 2018non-GAAP EPS guidance and projected fourth quarter fiscal 2018non-GAAP consolidated operating income and margin, other than theyear-end MTM pension accounting adjustments.
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Third Quarter Fiscal 2018
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
| | | Operating | | | Income | | | Net | | | Diluted
Earnings | |
| Dollars in millions, except EPS | | Income | | | Margin | | | Taxes1 | | | Income2 | | | Per Share | |
GAAP measure | | $ | 1,001 | | | | 6.1 | % | | ($ | 1,200 | ) | | $ | 2,074 | | | $ | 7.59 | |
Net U.S. deferred tax liability remeasurement | | | — | | | | — | | | | 1,150 | | | | (1,150 | ) | | | (4.21 | ) |
TNT Express integration expenses3 | | | 106 | | | | 0.6 | % | | | 14 | | | | 92 | | | | 0.34 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 1,107 | | | | 6.7 | % | | ($ | 36 | ) | | $ | 1,016 | | | $ | 3.72 | |
FedEx Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 424 | | | | 4.5 | % |
TNT Express integration expenses | | | 86 | | | | 0.9 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 510 | | | | 5.4 | % |
Third Quarter Fiscal 2017
FedEx Corporation
| | | | | | | | | | | | | | | | | | | | |
| | | Operating | | | Income | | | Net | | | Diluted
Earnings | |
| Dollars in millions, except EPS | | Income | | | Margin | | | Taxes1 | | | Income2 | | | Per Share | |
GAAP measure | | $ | 1,025 | | | | 6.8 | % | | $ | 337 | | | $ | 562 | | | $ | 2.07 | |
TNT Express integration expenses3 | | | 78 | | | | 0.6 | % | | | 15 | | | | 63 | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | |
Non-GAAP measure | | $ | 1,103 | | | | 7.4 | % | | $ | 352 | | | $ | 625 | | | $ | 2.30 | |
FedEx Express Segment
| | | | | | | | |
| | | Operating | |
| Dollars in millions | | Income | | | Margin | |
GAAP measure | | $ | 557 | | | | 6.5 | % |
TNT Express integration expenses | | | 53 | | | | 0.6 | % |
| | | | | | | | |
Non-GAAP measure | | $ | 610 | | | | 7.1 | % |
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Fiscal 2018Earnings-Per-Share Outlook
| | | | | | |
| Dollars in millions, except EPS | | Adjustments | | | Diluted Earnings
Per Share |
Earnings per diluted share before MTM pension accounting adjustments(non-GAAP)4 | | | | | | $17.90 to $18.30 |
Net U.S. deferred tax liability remeasurement1 | | ($ | 1,150 | ) | | (4.21) |
| | | | | | |
TNT Express integration expenses | | $ | 450 | | | |
Income tax effect1 | | | (100 | ) | | |
| | | | | | |
Net of tax effect | | $ | 350 | | | 1.29 |
| | | | | | |
FedEx Trade Networks legal matters | | $ | 7 | | | |
Income tax effect1 | | | (2 | ) | | |
| | | | | | |
Net of tax effect | | $ | 5 | | | 0.02 |
| | | | | | |
Earnings per diluted share with adjustments(non-GAAP)4 | | | | | | $15.00 to $15.40 |
Fourth Quarter Fiscal 2018 Outlook
FedEx Corporation
| | | | |
| | | Operating |
| Dollars in millions | | Income | | Margin |
Operating results before MTM pension accounting adjustments(non-GAAP)4 | | $1,840 to $1,940 | | 10.4% to 11.1% |
TNT Express integration expenses3 | | 110 | | 0.6% to 0.7% |
| | | | |
Operating results excluding TNT Express integration expenses(non-GAAP) 4 | | $1,950 to $2,050 | | 11.0% to 11.8% |
FedEx Express Segment
| | |
| | | Operating
Margin |
GAAP measure | | 9.1% to 9.6% |
TNT Express integration expenses | | 0.8% |
| | |
Non-GAAP measure | | 9.9% to 10.4% |
Notes:
| 1 – | Income taxes are based on the company’s approximate statutory tax rates, and for fiscal 2018, give consideration to the effects of the TCJA on the fiscal 2018 rates. |
| 2 – | Effect of “Total other (expense) income” on net income amount not shown. |
| 3 – | These expenses are recognized at FedEx Corporate and FedEx Express. |
| 4 – | Theyear-end MTM pension accounting adjustments, which are impracticable to calculate at this time, are excluded. |
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FEDEX CORP. FINANCIAL HIGHLIGHTS
Third Quarter Fiscal 2018
(In millions, except earnings per share)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | February 28 | | | February 28 | |
| | | 2018 | | | 2017 | | | % | | | 2018 | | | 2017 | | | % | |
Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Express segment | | $ | 9,370 | | | $ | 8,569 | | | | 9 | % | | $ | 27,376 | | | $ | 25,671 | | | | 7 | % |
FedEx Ground segment | | | 5,222 | | | | 4,688 | | | | 11 | % | | | 14,790 | | | | 13,397 | | | | 10 | % |
FedEx Freight segment | | | 1,694 | | | | 1,492 | | | | 14 | % | | | 5,208 | | | | 4,747 | | | | 10 | % |
FedEx Services segment | | | 397 | | | | 389 | | | | 2 | % | | | 1,213 | | | | 1,198 | | | | 1 | % |
Eliminations and other | | | (157 | ) | | | (141 | ) | | | NM | | | | (451 | ) | | | (422 | ) | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenue | | | 16,526 | | | | 14,997 | | | | 10 | % | | | 48,136 | | | | 44,591 | | | | 8 | % |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 5,981 | | | | 5,395 | | | | 11 | % | | | 17,241 | | | | 16,059 | | | | 7 | % |
Purchased transportation | | | 3,935 | | | | 3,498 | | | | 12 | % | | | 11,220 | | | | 10,169 | | | | 10 | % |
Rentals and landing fees | | | 873 | | | | 834 | | | | 5 | % | | | 2,526 | | | | 2,426 | | | | 4 | % |
Depreciation and amortization | | | 786 | | | | 762 | | | | 3 | % | | | 2,293 | | | | 2,241 | | | | 2 | % |
Fuel | | | 914 | | | | 735 | | | | 24 | % | | | 2,435 | | | | 2,043 | | | | 19 | % |
Maintenance and repairs | | | 628 | | | | 588 | | | | 7 | % | | | 1,968 | | | | 1,765 | | | | 12 | % |
Other | | | 2,408 | | | | 2,160 | | | | 11 | % | | | 7,073 | | | | 6,432 | | | | 10 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 15,525 | | | | 13,972 | | | | 11 | % | | | 44,756 | | | | 41,135 | | | | 9 | % |
| | | | | | |
Operating Income: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Express segment | | | 424 | | | | 557 | | | | (24 | %) | | | 1,574 | | | | 1,873 | | | | (16 | %) |
FedEx Ground segment | | | 634 | | | | 515 | | | | 23 | % | | | 1,781 | | | | 1,590 | | | | 12 | % |
FedEx Freight segment | | | 55 | | | | 41 | | | | 34 | % | | | 349 | | | | 264 | | | | 32 | % |
Eliminations, corporate and other | | | (112 | ) | | | (88 | ) | | | NM | | | | (324 | ) | | | (271 | ) | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Income | | | 1,001 | | | | 1,025 | | | | (2 | %) | | | 3,380 | | | | 3,456 | | | | (2 | %) |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest, net | | | (125 | ) | | | (122 | ) | | | NM | | | | (363 | ) | | | (354 | ) | | | NM | |
Other, net | | | (2 | ) | | | (4 | ) | | | NM | | | | (22 | ) | | | 17 | | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Other Expense | | | (127 | ) | | | (126 | ) | | | NM | | | | (385 | ) | | | (337 | ) | | | NM | |
Pretax Income | | | 874 | | | | 899 | | | | (3 | %) | | | 2,995 | | | | 3,119 | | | | (4 | %) |
Provision for Income Taxes | | | (1,200 | ) | | | 337 | | | | NM | | | | (450 | ) | | | 1,142 | | | | NM | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 2,074 | | | $ | 562 | | | | 269 | % | | $ | 3,445 | | | $ | 1,977 | | | | 74 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings Per Share | | $ | 7.59 | | | $ | 2.07 | | | | 267 | % | | $ | 12.63 | | | $ | 7.31 | | | | 73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted Average Common and Common Equivalent Shares | | | 273 | | | | 271 | | | | 1 | % | | | 272 | | | | 270 | | | | 1 | % |
Capital Expenditures | | $ | 1,372 | | | $ | 1,109 | | | | 24 | % | | $ | 3,994 | | | $ | 3,790 | | | | 5 | % |
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FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
Third Quarter Fiscal 2018
(In millions)
| | | | | | | | |
| | | Feb. 28, 2018 | | | | |
| | | (Unaudited) | | | May 31, 2017 | |
ASSETS | | | | | | | | |
| | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 2,789 | | | $ | 3,969 | |
Receivables, less allowances | | | 8,671 | | | | 7,599 | |
Spare parts, supplies and fuel, less allowances | | | 523 | | | | 514 | |
Prepaid expenses and other | | | 1,592 | | | | 546 | |
| | | | | | | | |
Total current assets | | | 13,575 | | | | 12,628 | |
Property and Equipment, at Cost | | | 54,377 | | | | 50,626 | |
Less accumulated depreciation and amortization | | | 26,680 | | | | 24,645 | |
| | | | | | | | |
Net property and equipment | | | 27,697 | | | | 25,981 | |
| | |
Other Long-Term Assets | | | | | | | | |
Goodwill | | | 7,464 | | | | 7,154 | |
Other assets | | | 3,115 | | | | 2,789 | |
| | | | | | | | |
Total other long-term assets | | | 10,579 | | | | 9,943 | |
| | | | | | | | |
| | $ | 51,851 | | | $ | 48,552 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ INVESTMENT | | | | | | | | |
| | |
Current Liabilities | | | | | | | | |
Short-term borrowings | | $ | 799 | | | $ | — | |
Current portion of long-term debt | | | 764 | | | | 22 | |
Accrued salaries and employee benefits | | | 1,945 | | | | 1,914 | |
Accounts payable | | | 3,102 | | | | 2,752 | |
Accrued expenses | | | 2,893 | | | | 3,230 | |
| | | | | | | | |
Total current liabilities | | | 9,503 | | | | 7,918 | |
| | |
Long-Term Debt, Less Current Portion | | | 16,017 | | | | 14,909 | |
| | |
Other Long-Term Liabilities | | | | | | | | |
Deferred income taxes | | | 2,401 | | | | 2,485 | |
Pension, postretirement healthcare and other benefit obligations | | | 2,181 | | | | 4,487 | |
Self-insurance accruals | | | 1,715 | | | | 1,494 | |
Deferred lease obligations | | | 532 | | | | 531 | |
Deferred gains, principally related to aircraft transactions | | | 124 | | | | 137 | |
Other liabilities | | | 484 | | | | 518 | |
| | | | | | | | |
Total other long-term liabilities | | | 7,437 | | | | 9,652 | |
| | |
Commitments and Contingencies | | | | | | | | |
| | |
Common Stockholders’ Investment | | | | | | | | |
Common stock, $0.10 par value, 800 million shares authorized | | | 32 | | | | 32 | |
Additionalpaid-in capital | | | 3,085 | | | | 3,005 | |
Retained earnings | | | 23,710 | | | | 20,833 | |
Accumulated other comprehensive loss | | | (357 | ) | | | (415 | ) |
Treasury stock, at cost | | | (7,576 | ) | | | (7,382 | ) |
| | | | | | | | |
Total common stockholders’ investment | | | 18,894 | | | | 16,073 | |
| | | | | | | | |
| | $ | 51,851 | | | $ | 48,552 | |
| | | | | | | | |
13
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Third Quarter Fiscal 2018
(In millions)
(Unaudited)
| | | | | | | | |
| | | Nine Months Ended | |
| | | February 28 | |
| | | 2018 | | | 2017 | |
Operating Activities: | | | | | | | | |
Net income | | $ | 3,445 | | | $ | 1,977 | |
Noncash charges: | | | | | | | | |
Depreciation and amortization | | | 2,293 | | | | 2,241 | |
Other, net | | | (602 | ) | | | 712 | |
Gain from sale of an investment | | | — | | | | (35 | ) |
Changes in operating assets and liabilities, net | | | (3,974 | ) | | | (2,250 | ) |
| | | | | | | | |
Net cash provided by operating activities | | | 1,162 | | | | 2,645 | |
| | |
Investing Activities: | | | | | | | | |
Capital expenditures | | | (3,994 | ) | | | (3,790 | ) |
Business acquisitions, net of cash acquired | | | (44 | ) | | | — | |
Proceeds from asset dispositions and other | | | 21 | | | | 123 | |
| | | | | | | | |
Net cash used in investing activities | | | (4,017 | ) | | | (3,667 | ) |
| | |
Financing Activities: | | | | | | | | |
Proceeds from short-term borrowings, net | | | 797 | | | | — | |
Principal payments on debt | | | (31 | ) | | | (49 | ) |
Proceeds from debt issuances | | | 1,481 | | | | 1,190 | |
Proceeds from stock issuances | | | 284 | | | | 265 | |
Dividends paid | | | (402 | ) | | | (319 | ) |
Purchase of treasury stock | | | (558 | ) | | | (358 | ) |
Other, net | | | 6 | | | | 2 | |
| | | | | | | | |
Cash provided by financing activities | | | 1,577 | | | | 731 | |
| | | | | | | | |
Effect of exchange rate changes on cash | | | 98 | | | | (70 | ) |
| | | | | | | | |
Net decrease in cash and cash equivalents | | | (1,180 | ) | | | (361 | ) |
| | |
Cash and cash equivalents at beginning of period | | | 3,969 | | | | 3,534 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 2,789 | | | $ | 3,173 | |
| | | | | | | | |
14
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
Third Quarter Fiscal 2018
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | February 28 | | | February 28 | |
| | | 2018 | | | 2017 | | | % | | | 2018 | | | 2017 | | | % | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Package Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | $ | 1,836 | | | $ | 1,742 | | | | 5% | | | $ | 5,373 | | | $ | 5,173 | | | | 4% | |
U.S. Overnight Envelope | | | 435 | | | | 422 | | | | 3% | | | | 1,317 | | | | 1,287 | | | | 2% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Overnight | | | 2,271 | | | | 2,164 | | | | 5% | | | | 6,690 | | | | 6,460 | | | | 4% | |
U.S. Deferred | | | 996 | | | | 954 | | | | 4% | | | | 2,796 | | | | 2,598 | | | | 8% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Package Revenue | | | 3,267 | | | | 3,118 | | | | 5% | | | | 9,486 | | | | 9,058 | | | | 5% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 1,813 | | | | 1,667 | | | | 9% | | | | 5,393 | | | | 5,144 | | | | 5% | |
International Economy | | | 793 | | | | 692 | | | | 15% | | | | 2,378 | | | | 2,101 | | | | 13% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Package | | | 2,606 | | | | 2,359 | | | | 10% | | | | 7,771 | | | | 7,245 | | | | 7% | |
International Domestic1 | | | 1,128 | | | | 1,033 | | | | 9% | | | | 3,386 | | | | 3,136 | | | | 8% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Package Revenue | | | 7,001 | | | | 6,510 | | | | 8% | | | | 20,643 | | | | 19,439 | | | | 6% | |
Freight Revenue: | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | | 739 | | | | 667 | | | | 11% | | | | 2,040 | | | | 1,895 | | | | 8% | |
International Priority | | | 551 | | | | 471 | | | | 17% | | | | 1,581 | | | | 1,396 | | | | 13% | |
International Economy | | | 492 | | | | 437 | | | | 13% | | | | 1,354 | | | | 1,265 | | | | 7% | |
International Airfreight | | | 86 | | | | 84 | | | | 2% | | | | 259 | | | | 270 | | | | (4% | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Freight Revenue | | | 1,868 | | | | 1,659 | | | | 13% | | | | 5,234 | | | | 4,826 | | | | 8% | |
Other Revenue2 | | | 501 | | | | 400 | | | | 25% | | | | 1,499 | | | | 1,406 | | | | 7% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Express Revenue | | $ | 9,370 | | | $ | 8,569 | | | | 9% | | | $ | 27,376 | | | $ | 25,671 | | | | 7% | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 3,484 | | | | 3,170 | | | | 10% | | | | 10,001 | | | | 9,393 | | | | 6% | |
Purchased transportation | | | 1,478 | | | | 1,286 | | | | 15% | | | | 4,346 | | | | 3,963 | | | | 10% | |
Rentals and landing fees | | | 532 | | | | 511 | | | | 4% | | | | 1,520 | | | | 1,483 | | | | 2% | |
Depreciation and amortization | | | 425 | | | | 420 | | | | 1% | | | | 1,254 | | | | 1,252 | | | | — | |
Fuel | | | 782 | | | | 633 | | | | 24% | | | | 2,088 | | | | 1,753 | | | | 19% | |
Maintenance and repairs | | | 420 | | | | 386 | | | | 9% | | | | 1,327 | | | | 1,158 | | | | 15% | |
Intercompany charges | | | 528 | | | | 473 | | | | 12% | | | | 1,521 | | | | 1,403 | | | | 8% | |
Other | | | 1,297 | | | | 1,133 | | | | 14% | | | | 3,745 | | | | 3,393 | | | | 10% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 8,946 | | | | 8,012 | | | | 12% | | | | 25,802 | | | | 23,798 | | | | 8% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | $ | 424 | | | $ | 557 | | | | (24% | ) | | $ | 1,574 | | | $ | 1,873 | | | | (16% | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Margin | | | 4.5 | % | | | 6.5 | % | | | (2.0 pts | ) | | | 5.7 | % | | | 7.3 | % | | | (1.6 pts | ) |
| 1 - | International Domestic revenues represent international intra-country operations. |
| 2 - | Includes FedEx Trade Networks. |
15
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
Third Quarter Fiscal 2018
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | February 28 | | | February 28 | |
| | | 2018 | | | 2017 | | | % | | | 2018 | | | 2017 | | | % | |
PACKAGE STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Daily Package Volume (000s): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | | 1,315 | | | | 1,322 | | | | (1% | ) | | | 1,249 | | | | 1,286 | | | | (3% | ) |
U.S. Overnight Envelope | | | 541 | | | | 549 | | | | (1% | ) | | | 548 | | | | 559 | | | | (2% | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Overnight Package | | | 1,856 | | | | 1,871 | | | | (1% | ) | | | 1,797 | | | | 1,845 | | | | (3% | ) |
U.S. Deferred | | | 1,026 | | | | 1,025 | | | | — | | | | 946 | | | | 904 | | | | 5% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total U.S. Domestic Package | | | 2,882 | | | | 2,896 | | | | — | | | | 2,743 | | | | 2,749 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 529 | | | | 535 | | | | (1% | ) | | | 525 | | | | 522 | | | | 1% | |
International Economy | | | 266 | | | | 253 | | | | 5% | | | | 265 | | | | 250 | | | | 6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Package | | | 795 | | | | 788 | | | | 1% | | | | 790 | | | | 772 | | | | 2% | |
International Domestic2 | | | 2,445 | | | | 2,471 | | | | (1% | ) | | | 2,447 | | | | 2,391 | | | | 2% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Daily Packages | | | 6,122 | | | | 6,155 | | | | (1% | ) | | | 5,980 | | | | 5,912 | | | | 1% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Yield (Revenue Per Package): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Box | | $ | 22.53 | | | $ | 21.24 | | | | 6% | | | $ | 22.64 | | | $ | 21.17 | | | | 7% | |
U.S. Overnight Envelope | | | 12.97 | | | | 12.41 | | | | 5% | | | | 12.64 | | | | 12.12 | | | | 4% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Overnight Composite | | | 19.74 | | | | 18.65 | | | | 6% | | | | 19.59 | | | | 18.43 | | | | 6% | |
U.S. Deferred | | | 15.66 | | | | 15.00 | | | | 4% | | | | 15.56 | | | | 15.13 | | | | 3% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Domestic Composite | | | 18.29 | | | | 17.36 | | | | 5% | | | | 18.20 | | | | 17.34 | | | | 5% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
International Priority | | | 55.26 | | | | 50.28 | | | | 10% | | | | 54.06 | | | | 51.82 | | | | 4% | |
International Economy | | | 48.01 | | | | 44.05 | | | | 9% | | | | 47.24 | | | | 44.24 | | | | 7% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total International Export Composite | | | 52.83 | | | | 48.27 | | | | 9% | | | | 51.77 | | | | 49.37 | | | | 5% | |
International Domestic2 | | | 7.44 | | | | 6.74 | | | | 10% | | | | 7.29 | | | | 6.90 | | | | 6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Package Yield | | $ | 18.45 | | | $ | 17.06 | | | | 8% | | | $ | 18.17 | | | $ | 17.31 | | | | 5% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
FREIGHT STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Daily Freight Pounds (000s): | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | | 8,757 | | | | 8,458 | | | | 4% | | | | 8,311 | | | | 8,231 | | | | 1% | |
International Priority | | | 5,430 | | | | 5,238 | | | | 4% | | | | 5,342 | | | | 5,145 | | | | 4% | |
International Economy | | | 13,209 | | | | 12,578 | | | | 5% | | | | 12,215 | | | | 12,095 | | | | 1% | |
International Airfreight | | | 1,757 | | | | 1,995 | | | | (12% | ) | | | 1,850 | | | | 1,941 | | | | (5% | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Avg Daily Freight Pounds | | | 29,153 | | | | 28,269 | | | | 3% | | | | 27,718 | | | | 27,412 | | | | 1% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Revenue Per Freight Pound: | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | $ | 1.36 | | | $ | 1.27 | | | | 7% | | | $ | 1.29 | | | $ | 1.21 | | | | 7% | |
International Priority | | | 1.64 | | | | 1.45 | | | | 13% | | | | 1.56 | | | | 1.43 | | | | 9% | |
International Economy | | | 0.60 | | | | 0.56 | | | | 7% | | | | 0.58 | | | | 0.55 | | | | 5% | |
International Airfreight | | | 0.78 | | | | 0.68 | | | | 15% | | | | 0.74 | | | | 0.73 | | | | 1% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Freight Yield | | $ | 1.02 | | | $ | 0.95 | | | | 7% | | | $ | 0.99 | | | $ | 0.93 | | | | 6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Weekdays | | | 62 | | | | 62 | | | | — | | | | 190 | | | | 190 | | | | — | |
| 1 - | Package and freight statistics do not include FedEx Trade Networks. |
| 2 - | International Domestic represents international intra-country operations. |
16
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2018
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | February 28 | | | February 28 | |
| | | 2018 | | | 2017 | | | % | | | 2018 | | | 2017 | | | % | |
FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
FedEx Ground | | $ | 4,824 | | | $ | 4,296 | | | | 12% | | | $ | 13,586 | | | $ | 12,202 | | | | 11% | |
FedEx Supply Chain | | | 398 | | | | 392 | | | | 2% | | | | 1,204 | | | | 1,195 | | | | 1% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues | | | 5,222 | | | | 4,688 | | | | 11% | | | | 14,790 | | | | 13,397 | | | | 10% | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 956 | | | | 834 | | | | 15% | | | | 2,711 | | | | 2,420 | | | | 12% | |
Purchased transportation | | | 2,235 | | | | 2,015 | | | | 11% | | | | 6,194 | | | | 5,568 | | | | 11% | |
Rentals | | | 209 | | | | 197 | | | | 6% | | | | 617 | | | | 567 | | | | 9% | |
Depreciation and amortization | | | 187 | | | | 177 | | | | 6% | | | | 537 | | | | 508 | | | | 6% | |
Fuel | | | 4 | | | | 3 | | | | 33% | | | | 10 | | | | 8 | | | | 25% | |
Maintenance and repairs | | | 82 | | | | 83 | | | | (1% | ) | | | 249 | | | | 237 | | | | 5% | |
Intercompany charges | | | 371 | | | | 330 | | | | 12% | | | | 1,087 | | | | 983 | | | | 11% | |
Other | | | 544 | | | | 534 | | | | 2% | | | | 1,604 | | | | 1,516 | | | | 6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 4,588 | | | | 4,173 | | | | 10% | | | | 13,009 | | | | 11,807 | | | | 10% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | $ | 634 | | | $ | 515 | | | | 23% | | | $ | 1,781 | | | $ | 1,590 | | | | 12% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Margin | | | 12.1% | | | | 11.0% | | | | 1.1 pts | | | | 12.0% | | | | 11.9% | | | | 0.1 pts | |
| | | | | | |
OPERATING STATISTICS1 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Weekdays | | | 62 | | | | 62 | | | | — | | | | 190 | | | | 190 | | | | — | |
Average Daily Package Volume (000s) | | | 8,993 | | | | 8,522 | | | | 6% | | | | 8,408 | | | | 7,963 | | | | 6% | |
Yield (Revenue Per Package) | | $ | 8.64 | | | $ | 8.12 | | | | 6% | | | $ | 8.49 | | | $ | 8.05 | | | | 5% | |
| 1 - | Operating statistics include only the operations of FedEx Ground (including FedEx SmartPost). |
17
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Third Quarter Fiscal 2018
(Dollars in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | February 28 | | | February 28 | |
| | | 2018 | | | 2017 | | | % | | | 2018 | | | 2017 | | | % | |
FINANCIAL HIGHLIGHTS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Revenue | | $ | 1,694 | | | $ | 1,492 | | | | 14% | | | $ | 5,208 | | | $ | 4,747 | | | | 10% | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 825 | | | | 733 | | | | 13% | | | | 2,455 | | | | 2,266 | | | | 8% | |
Purchased transportation | | | 263 | | | | 230 | | | | 14% | | | | 792 | | | | 739 | | | | 7% | |
Rentals | | | 41 | | | | 36 | | | | 14% | | | | 114 | | | | 101 | | | | 13% | |
Depreciation and amortization | | | 77 | | | | 69 | | | | 12% | | | | 219 | | | | 199 | | | | 10% | |
Fuel | | | 127 | | | | 99 | | | | 28% | | | | 336 | | | | 282 | | | | 19% | |
Maintenance and repairs | | | 52 | | | | 50 | | | | 4% | | | | 169 | | | | 159 | | | | 6% | |
Intercompany charges | | | 130 | | | | 120 | | | | 8% | | | | 384 | | | | 370 | | | | 4% | |
Other | | | 124 | | | | 114 | | | | 9% | | | | 390 | | | | 367 | | | | 6% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 1,639 | | | | 1,451 | | | | 13% | | | | 4,859 | | | | 4,483 | | | | 8% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Income | | $ | 55 | | | $ | 41 | | | | 34% | | | $ | 349 | | | $ | 264 | | | | 32% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating Margin | | | 3.2 | % | | | 2.7 | % | | | 0.5 pts | | | | 6.7 | % | | | 5.6 | % | | | 1.1 pts | |
| | | | | | |
OPERATING STATISTICS | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
LTL Operating Weekdays | | | 62 | | | | 62 | | | | — | | | | 189 | | | | 189 | | | | — | |
Average Daily LTL Shipments (000s) | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | | 69.7 | | | | 65.6 | | | | 6% | | | | 73.5 | | | | 70.3 | | | | 5% | |
Economy | | | 30.6 | | | | 29.0 | | | | 6% | | | | 31.5 | | | | 30.9 | | | | 2% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Daily LTL Shipments | | | 100.3 | | | | 94.6 | | | | 6% | | | | 105.0 | | | | 101.2 | | | | 4% | |
Weight Per LTL Shipment (lbs) | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | | 1,232 | | | | 1,179 | | | | 4% | | | | 1,205 | | | | 1,173 | | | | 3% | |
Economy | | | 1,133 | | | | 1,155 | | | | (2% | ) | | | 1,144 | | | | 1,121 | | | | 2% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite Weight Per LTL Shipment | | | 1,202 | | | | 1,172 | | | | 3% | | | | 1,187 | | | | 1,157 | | | | 3% | |
LTL Revenue/Shipment | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | $ | 242.49 | | | $ | 224.63 | | | | 8% | | | $ | 233.31 | | | $ | 220.64 | | | | 6% | |
Economy | | | 295.31 | | | | 272.74 | | | | 8% | | | | 285.99 | | | | 262.72 | | | | 9% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite LTL Revenue/Shipment | | $ | 259.20 | | | $ | 239.82 | | | | 8% | | | $ | 249.32 | | | $ | 233.64 | | | | 7% | |
LTL Revenue/CWT | | | | | | | | | | | | | | | | | | | | | | | | |
Priority | | $ | 19.67 | | | $ | 19.06 | | | | 3% | | | $ | 19.37 | | | $ | 18.81 | | | | 3% | |
Economy | | | 26.07 | | | | 23.61 | | | | 10% | | | | 24.99 | | | | 23.44 | | | | 7% | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Composite LTL Revenue/CWT | | $ | 21.56 | | | $ | 20.47 | | | | 5% | | | $ | 21.01 | | | $ | 20.19 | | | | 4% | |
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