Strong Earnings Growth Expected in Fiscal 2012
MEMPHIS, Tenn., June 22, 2011 …FedEx Corp. (NYSE: FDX) today reported earnings of $1.75 per diluted share for the fourth quarter ended May 31, compared to $1.33 per diluted share a year ago, a year-over-year increase of 32%.
“During fiscal 2011, an improved economy, strong customer demand and decisive actions to grow our business led to increased volumes and yields across all transportation segments,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “With this positive momentum, moderate economic growth and subsiding cost headwinds, FedEx is well positioned to deliver strong earnings growth in fiscal 2012.”
Fourth Quarter Results
FedEx Corp. reported the following consolidated results for the fourth quarter:
Revenue of $10.55 billion, up 12% from $9.43 billion the previous year
Operating income of $888 million, up 28% from $696 million last year
Operating margin of 8.4%, up from 7.4% the previous year
Net income of $558 million, up 33% from last year’s $419 million
Revenue and earnings increased due to continued strong yield improvement in all transportation segments and volume growth of ground and international express shipments. FedEx Freight’s return to profitability also improved operating results.
Full Year Results
FedEx Corp. reported the following consolidated results for the full year:
Revenue of $39.3 billion, up 13% from $34.7 billion the previous year
Operating income of $2.38 billion, up 19% from $2.00 billion last year
Net income of $1.45 billion, up 23% from last year’s $1.18 billion
Adjusted earnings per share of $4.90, up from $3.76 per share a year ago
(Fiscal 2011 earnings per share exclude the impact of certain one-time costs”see table)
Capital spending for fiscal 2011 was $3.4 billion, of which $2.0 billion was for investments in aircraft and related equipment.
Outlook
FedEx projects earnings to be $1.40 to $1.60 per diluted share in the first quarter and $6.35 to $6.85 per diluted share for fiscal 2012. This guidance assumes the current market outlook for fuel prices and continued moderate growth in the global economy. The company reported earnings of $1.20 per diluted share in last year’s first quarter. The capital spending forecast for fiscal 2012 is $4.2 billion, which includes the delivery of aircraft as well as progress payments toward future aircraft deliveries, along with investments in facilities, vehicles and information technology in support of the company’s global growth strategy. The company will benefit from the tax expensing/accelerated depreciation provisions included in the Tax Relief Act of 2010 passed last December.
“Our actions to improve yields continue to drive revenue and earnings growth across our transportation segments,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “FedEx Ground maintained its exceptional performance this quarter, increasing volume, yields and margins, while FedEx Freight returned to profitability. Even with higher planned capital spending in fiscal 2012, margins, cash flows and returns are expected to improve year over year.”
FedEx Express Segment
For the fourth quarter, the FedEx Express segment reported:
Revenue of $6.63 billion, up 13% from last year’s $5.88 billion
Operating income of $429 million, up 4% from $413 million a year ago
Operating margin of 6.5%, down from 7.0% the previous year
FedEx International Priority (IP) average daily package volume increased 6%, led by exports from Asia. IP revenue per package grew 8% due to higher fuel surcharges, the favorable impact of exchange rates, improved weight per package and yield management actions. IP freight pounds increased 13% with revenue per pound up 6% due to higher fuel surcharges and the favorable impact of exchange rates. In total, IP package and freight revenue increased 15% and pounds increased 9% year-over-year. U.S. domestic revenue per package grew 10% due to higher fuel surcharges, yield management actions and increased weight per package, with slightly lower U.S. domestic average daily package volume.
Operating income improvements were driven by strong yield growth, particularly in U.S. domestic package services, and by volume growth in IP package and freight services. Results were negatively impacted by increased retirement plan expenses and the reinstatement of certain compensation programs.
FedEx Ground Segment
For the fourth quarter, the FedEx Ground segment reported:
Revenue of $2.26 billion, up 15% from last year’s $1.96 billion
Operating income of $417 million, up 31% from $319 million a year ago
Operating margin of 18.4%, up from 16.3% the previous year
FedEx Ground average daily package volume grew 6% in the fourth quarter driven by increases in the business-to-business market and the FedEx Home Delivery service. Revenue per package increased 7% primarily due to yield management actions and higher fuel surcharges. FedEx SmartPost average daily volume increased 24% due to growth in e-commerce and gains in market share. FedEx SmartPost revenue per package increased 8% primarily due to growth in higher-yielding services and increased fuel surcharges.
Operating income and margin increased primarily due to higher package yield and volume.
FedEx Freight Segment
For the fourth quarter, the FedEx Freight segment reported:
Revenue of $1.31 billion, up 6% from last year’s $1.23 billion
Operating income of $42 million, up from an operating loss of $36 million a year ago
Operating margin of 3.2%, compared with (2.9%) the previous year
Less-than-truckload (LTL) yield increased 13% primarily due to yield management actions and higher LTL fuel surcharges. LTL average daily shipments decreased 8% as a result of the yield management actions.
The segment returned to profitability in the quarter due primarily to the higher LTL yield. Last year’s results included an $18 million impairment charge related to the goodwill associated with the acquisition of Watkins Motor Lines. Strong yield growth and efficiencies resulting from the January 30, 2011 combination of the FedEx Freight and FedEx National LTL operations are expected to drive a substantial improvement in operating results in fiscal 2012. The net cash effect of the combination was immaterial, as cash proceeds of $88 million from asset sales offset severance and other cash outlays.
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 $39 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 290,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com .
Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and fourth quarter fiscal 2011 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EDT on June 22 are available on the company’s Web site at www.fedex.com/us/investorrelations . A replay of the conference call Webcast will be posted on our Web site following the call.
Certain statements in this press release may be considered forward-looking statements, such as statements relating to 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, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
The company believes that meaningful analysis of our financial performance requires an understanding of the factors underlying that performance and our judgments about the likelihood that particular factors will repeat. Excluding a reserve associated with a legal matter in the second quarter and the costs of the combination of FedEx Freight and FedEx National LTL operations from our full-year earnings, net of applicable incentive compensation impacts, will allow more accurate comparisons to prior periods of operating performance for fiscal 2011. As required by SEC rules, the table below presents a reconciliation of our presented non-GAAP measure to the most directly comparable GAAP measure.
| FY 2011 Diluted | |||
| Earnings Per Share | |||
| Non-GAAP Measure | $4.90 | ||
| FedEx Freight Combination Costs | (0.26) | ||
| ATA Legal Reserve, Net | (0.07) | ||
| GAAP Measure | $4.57 | ||
| FEDEX CORP. FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||
| Fourth Quarter Fiscal 2011 | |||||||||||||||||||||||||||
| (In millions, except earnings per share and FTEs) | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| May 31 | May 31 | ||||||||||||||||||||||||||
| 2011 | 2010 | % | 2011 | 2010 | % | ||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||
| FedEx Express segment | $6,628 | $5,877 | 13 | % | $24,581 | $21,555 | 14 | % | |||||||||||||||||||
| FedEx Ground segment | 2,263 | 1,962 | 15 | % | 8,485 | 7,439 | 14 | % | |||||||||||||||||||
| FedEx Freight segment | 1,309 | 1,231 | 6 | % | 4,911 | 4,321 | 14 | % | |||||||||||||||||||
| FedEx Services segment | 438 | 448 | (2 | %) | 1,684 | 1,770 | (5 | %) | |||||||||||||||||||
| Other & eliminations | (86 | ) | (90 | ) | 4 | % | (357 | ) | (351 | ) | (2 | %) | |||||||||||||||
| Total Revenue | 10,552 | 9,428 | 12 | % | 39,304 | 34,734 | 13 | % | |||||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||||||||
| Salaries and employee benefits | 3,866 | 3,677 | 5 | % | 15,276 | 14,027 | 9 | % | |||||||||||||||||||
| Purchased transportation | 1,511 | 1,299 | 16 | % | 5,674 | 4,728 | 20 | % | |||||||||||||||||||
| Rentals and landing fees | 612 | 595 | 3 | % | 2,462 | 2,359 | 4 | % | |||||||||||||||||||
| Depreciation and amortization | 499 | 488 | 2 | % | 1,973 | 1,958 | 1 | % | |||||||||||||||||||
| Fuel | 1,277 | 886 | 44 | % | 4,151 | 3,106 | 34 | % | |||||||||||||||||||
| Maintenance and repairs | 509 | 500 | 2 | % | 1,979 | 1,715 | 15 | % | |||||||||||||||||||
| Impairment and other charges | 1 | 18 | NM | 89 | 18 | NM | |||||||||||||||||||||
| Other | 1,389 | 1,269 | 9 | % | 5,322 | 4,825 | 10 | % | |||||||||||||||||||
| Total Operating Expenses | 9,664 | 8,732 | 11 | % | 36,926 | 32,736 | 13 | % | |||||||||||||||||||
| Operating Income (Loss): | |||||||||||||||||||||||||||
| FedEx Express segment | 429 | 413 | 4 | % | 1,228 | 1,127 | 9 | % | |||||||||||||||||||
| FedEx Ground segment | 417 | 319 | 31 | % | 1,325 | 1,024 | 29 | % | |||||||||||||||||||
| FedEx Freight segment | 42 | (36 | ) | 217 | % | (175 | ) | (153 | ) | (14 | %) | ||||||||||||||||
| Total Operating Income | 888 | 696 | 28 | % | 2,378 | 1,998 | 19 | % | |||||||||||||||||||
| Other Income (Expense): | |||||||||||||||||||||||||||
| Interest, net | (12 | ) | (19 | ) | (37 | %) | (77 | ) | (71 | ) | 8 | % | |||||||||||||||
| Other, net | (11 | ) | (5 | ) | 120 | % | (36 | ) | (33 | ) | 9 | % | |||||||||||||||
| Total Other Income (Expense) | (23 | ) | (24 | ) | (4 | %) | (113 | ) | (104 | ) | 9 | % | |||||||||||||||
| Pretax Income | 865 | 672 | 29 | % | 2,265 | 1,894 | 20 | % | |||||||||||||||||||
| Provision for Income Taxes | 307 | 253 | 21 | % | 813 | 710 | 15 | % | |||||||||||||||||||
| Net Income | $558 | $419 | 33 | % | $1,452 | $1,184 | 23 | % | |||||||||||||||||||
| Diluted Earnings Per Share | $1.75 | $1.33 | 32 | % | $4.57 | $3.76 | 22 | % | |||||||||||||||||||
| Weighted Average Diluted Common and | |||||||||||||||||||||||||||
| Common Equivalent Shares | 318 | 316 | 1 | % | 317 | 314 | 1 | % | |||||||||||||||||||
| Capital Expenditures | $731 | $835 | (12 | %) | $3,434 | $2,816 | 22 | % | |||||||||||||||||||
| Average Full-Time Equivalents (000s) | 257 | 248 | 4 | % | 256 | 245 | 4 | % | |||||||||||||||||||
| FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| Fourth Quarter Fiscal 2011 | ||||||||||
| (In millions) | ||||||||||
| (Current period is unaudited) | ||||||||||
| May 31, 2011 | May 31, 2010 | |||||||||
| ASSETS | ||||||||||
| Current Assets | ||||||||||
| Cash and cash equivalents | $ | 2,328 | $ | 1,952 | ||||||
| Receivables, less allowances | 4,581 | 4,163 | ||||||||
| Spare parts, supplies and fuel, less allowances | 437 | 389 | ||||||||
| Deferred income taxes | 610 | 529 | ||||||||
| Prepaid expenses and other | 329 | 251 | ||||||||
| Total current assets | 8,285 | 7,284 | ||||||||
| Property and Equipment, at Cost | 33,686 | 31,302 | ||||||||
| Less accumulated depreciation and amortization | 18,143 | 16,917 | ||||||||
| Net property and equipment | 15,543 | 14,385 | ||||||||
| Other Long-Term Assets | ||||||||||
| Goodwill | 2,326 | 2,200 | ||||||||
| Other assets | 1,231 | 1,033 | ||||||||
| Total other long-term assets | 3,557 | 3,233 | ||||||||
| $ | 27,385 | $ | 24,902 | |||||||
| LIABILITIES AND STOCKHOLDERS’ INVESTMENT | ||||||||||
| Current Liabilities | ||||||||||
| Current portion of long-term debt | $ | 18 | $ | 262 | ||||||
| Accrued salaries and employee benefits | 1,268 | 1,146 | ||||||||
| Accounts payable | 1,702 | 1,522 | ||||||||
| Accrued expenses | 1,894 | 1,715 | ||||||||
| Total current liabilities | 4,882 | 4,645 | ||||||||
| Long-Term Debt, Less Current Portion | 1,667 | 1,668 | ||||||||
| Other Long-Term Liabilities | ||||||||||
| Deferred income taxes | 1,336 | 891 | ||||||||
| Pension, postretirement healthcare and other benefit obligations | 2,124 | 1,705 | ||||||||
| Self-insurance accruals | 977 | 960 | ||||||||
| Deferred lease obligations | 779 | 804 | ||||||||
| Deferred gains, principally related to aircraft transactions | 246 | 267 | ||||||||
| Other liabilities | 154 | 151 | ||||||||
| Total other long-term liabilities | 5,616 | 4,778 | ||||||||
| Commitments and Contingencies | ||||||||||
| Common Stockholders’ Investment | ||||||||||
| Common stock, $0.10 par value, 800 million shares authorized | 32 | 31 | ||||||||
| Additional paid-in capital | 2,484 | 2,261 | ||||||||
| Retained earnings | 15,266 | 13,966 | ||||||||
| Accumulated other comprehensive loss | (2,550 | ) | (2,440 | ) | ||||||
| Treasury stock, at cost | (12 | ) | (7 | ) | ||||||
| Total common stockholders’ investment | 15,220 | 13,811 | ||||||||
| $ | 27,385 | $ | 24,902 | |||||||
| FEDEX CORP. CONDENSED CONSOLIDATED | |||||||||||
| STATEMENTS OF CASH FLOWS | |||||||||||
| Fourth Quarter Fiscal 2011 | |||||||||||
| (In millions) | |||||||||||
| (Current period is unaudited) | |||||||||||
| Year Ended | |||||||||||
| May 31 | |||||||||||
| 2011 | 2010 | ||||||||||
| Operating Activities: | |||||||||||
| Net income | $ | 1,452 | $ | 1,184 | |||||||
| Noncash charges: | |||||||||||
| Depreciation and amortization | 1,973 | 1,958 | |||||||||
| Other, net | 948 | 574 | |||||||||
| Changes in operating assets and liabilities, net | (332 | ) | (578 | ) | |||||||
| Cash provided by operating activities | 4,041 | 3,138 | |||||||||
| Investing Activities: | |||||||||||
| Capital expenditures | (3,434 | ) | (2,816 | ) | |||||||
| Business acquisitions, net of cash acquired | (96 | ) | “ | ||||||||
| Proceeds from asset dispositions and other | 111 | 35 | |||||||||
| Cash used in investing activities | (3,419 | ) | (2,781 | ) | |||||||
| Financing Activities: | |||||||||||
| Principal payments on debt | (262 | ) | (653 | ) | |||||||
| Dividends paid | (151 | ) | (138 | ) | |||||||
| Other, net | 126 | 99 | |||||||||
| Cash used in financing activities | (287 | ) | (692 | ) | |||||||
| Effect of exchange rate changes on cash | 41 | (5 | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | 376 | (340 | ) | ||||||||
| Cash and cash equivalents at beginning of period | 1,952 | 2,292 | |||||||||
| Cash and cash equivalents at end of period | $ | 2,328 | $ | 1,952 | |||||||
| FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS | |||||||||||||||||||||||||||||
| Fourth Quarter Fiscal 2011 | |||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| May 31 | May 31 | ||||||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | 2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||||||
| Revenue | $ | 6,628 | $ | 5,877 | 13 | % | $ | 24,581 | $ | 21,555 | 14 | % | |||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 2,351 | 2,187 | 7 | % | 9,183 | 8,402 | 9 | % | |||||||||||||||||||||
| Purchased transportation | 430 | 347 | 24 | % | 1,573 | 1,177 | 34 | % | |||||||||||||||||||||
| Rentals and landing fees | 418 | 399 | 5 | % | 1,672 | 1,577 | 6 | % | |||||||||||||||||||||
| Depreciation and amortization | 272 | 259 | 5 | % | 1,059 | 1,016 | 4 | % | |||||||||||||||||||||
| Fuel | 1,099 | 748 | 47 | % | 3,553 | 2,651 | 34 | % | |||||||||||||||||||||
| Maintenance and repairs | 351 | 342 | 3 | % | 1,353 | 1,131 | 20 | % | |||||||||||||||||||||
| Intercompany charges | 520 | 504 | 3 | % | 2,043 | 1,940 | 5 | % | |||||||||||||||||||||
| Other1 | 758 | 678 | 12 | % | 2,917 | 2,534 | 15 | % | |||||||||||||||||||||
| Total Operating Expenses | 6,199 | 5,464 | 13 | % | 23,353 | 20,428 | 14 | % | |||||||||||||||||||||
| Operating Income | $ | 429 | $ | 413 | 4 | % | $ | 1,228 | $ | 1,127 | 9 | % | |||||||||||||||||
| Operating Margin | 6.5 | % | 7.0 | % | (0.5 pts) | 5.0 | % | 5.2 | % | (0.2 pts) | |||||||||||||||||||
| OPERATING STATISTICS | |||||||||||||||||||||||||||||
| Operating Weekdays | 65 | 65 | “ | 255 | 255 | “ | |||||||||||||||||||||||
| AVG DAILY VOLUME / POUNDS | |||||||||||||||||||||||||||||
| Average Daily Package Volume (000s): | |||||||||||||||||||||||||||||
| U.S. Overnight Box | 1,158 | 1,156 | 0 | % | 1,184 | 1,157 | 2 | % | |||||||||||||||||||||
| U.S. Overnight Envelope | 626 | 632 | (1 | %) | 627 | 614 | 2 | % | |||||||||||||||||||||
| U.S. Deferred | 833 | 843 | (1 | %) | 873 | 867 | 1 | % | |||||||||||||||||||||
| Total U.S. Domestic Package | 2,617 | 2,631 | (1 | %) | 2,684 | 2,638 | 2 | % | |||||||||||||||||||||
| International Priority | 593 | 560 | 6 | % | 575 | 523 | 10 | % | |||||||||||||||||||||
| International Domestic | 373 | 323 | 15 | % | 348 | 318 | 9 | % | |||||||||||||||||||||
| Total Average Daily Packages | 3,583 | 3,514 | 2 | % | 3,607 | 3,479 | 4 | % | |||||||||||||||||||||
| Average Daily Freight Pounds (000s): | |||||||||||||||||||||||||||||
| U.S. | 7,027 | 6,916 | 2 | % | 7,340 | 7,141 | 3 | % | |||||||||||||||||||||
| International Priority | 3,261 | 2,889 | 13 | % | 3,184 | 2,544 | 25 | % | |||||||||||||||||||||
| International Airfreight | 1,195 | 1,198 | (0 | %) | 1,235 | 1,222 | 1 | % | |||||||||||||||||||||
| Total Avg Daily Freight Pounds | 11,483 | 11,003 | 4 | % | 11,759 | 10,907 | 8 | % | |||||||||||||||||||||
| YIELD | |||||||||||||||||||||||||||||
| Revenue Per Package: | |||||||||||||||||||||||||||||
| U.S. Overnight Box | $ | 21.72 | $ | 19.77 | 10 | % | $ | 20.29 | $ | 19.00 | 7 | % | |||||||||||||||||
| U.S. Overnight Envelope | 11.37 | 10.64 | 7 | % | 10.86 | 10.47 | 4 | % | |||||||||||||||||||||
| U.S. Deferred | 13.56 | 12.23 | 11 | % | 12.60 | 11.70 | 8 | % | |||||||||||||||||||||
| Total U.S. Domestic Package | 16.65 | 15.16 | 10 | % | 15.59 | 14.61 | 7 | % | |||||||||||||||||||||
| International Priority | 58.96 | 54.45 | 8 | % | 56.08 | 53.10 | 6 | % | |||||||||||||||||||||
| International Domestic | 7.51 | 7.22 | 4 | % | 7.38 | 7.14 | 3 | % | |||||||||||||||||||||
| Composite Package Yield | $ | 22.69 | $ | 20.69 | 10 | % | $ | 21.25 | $ | 19.72 | 8 | % | |||||||||||||||||
| Revenue Per Freight Pound: | |||||||||||||||||||||||||||||
| U.S. | $ | 1.25 | $ | 1.15 | 9 | % | $ | 1.17 | $ | 1.09 | 7 | % | |||||||||||||||||
| International Priority | 2.21 | 2.09 | 6 | % | 2.12 | 2.01 | 5 | % | |||||||||||||||||||||
| International Airfreight | 0.96 | 0.85 | 13 | % | 0.90 | 0.81 | 11 | % | |||||||||||||||||||||
| Composite Freight Yield | $ | 1.49 | $ | 1.36 | 10 | % | $ | 1.40 | $ | 1.27 | 10 | % | |||||||||||||||||
| Average Full-Time Equivalents (000s) | 135 | 129 | 5 | % | 133 | 128 | 4 | % | |||||||||||||||||||||
| 1 – Current year includes a $66 million reserve for a legal matter. | |||||||||||||||||||||||||||||
| FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS | |||||||||||||||||||||||||||||
| Fourth Quarter Fiscal 2011 | |||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| May 31 | May 31 | ||||||||||||||||||||||||||||
| 2011 | 2010 | % | 2011 | 2010 | % | ||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||
| FedEx Ground | $ | 2,099 | $ | 1,840 | 14 | % | $ | 7,855 | $ | 6,958 | 13 | % | |||||||||||||||||
| FedEx SmartPost | 164 | 122 | 34 | % | 630 | 481 | 31 | % | |||||||||||||||||||||
| Total Revenues | 2,263 | 1,962 | 15 | % | 8,485 | 7,439 | 14 | % | |||||||||||||||||||||
| Operating Expenses: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 328 | 299 | 10 | % | 1,282 | 1,158 | 11 | % | |||||||||||||||||||||
| Purchased transportation | 893 | 769 | 16 | % | 3,431 | 2,966 | 16 | % | |||||||||||||||||||||
| Rentals | 66 | 60 | 10 | % | 263 | 244 | 8 | % | |||||||||||||||||||||
| Depreciation and amortization | 88 | 83 | 6 | % | 337 | 334 | 1 | % | |||||||||||||||||||||
| Fuel | 3 | 2 | 50 | % | 12 | 8 | 50 | % | |||||||||||||||||||||
| Maintenance and repairs | 43 | 47 | (9 | %) | 169 | 166 | 2 | % | |||||||||||||||||||||
| Intercompany charges | 228 | 208 | 10 | % | 897 | 795 | 13 | % | |||||||||||||||||||||
| Other | 197 | 175 | 13 | % | 769 | 744 | 3 | % | |||||||||||||||||||||
| Total Operating Expenses | 1,846 | 1,643 | 12 | % | 7,160 | 6,415 | 12 | % | |||||||||||||||||||||
| Operating Income | $ | 417 | $ | 319 | 31 | % | $ | 1,325 | $ | 1,024 | 29 | % | |||||||||||||||||
| Operating Margin | 18.4 | % | 16.3 | % | 2.1 pts | 15.6 | % | 13.8 | % | 1.8 pts | |||||||||||||||||||
| OPERATING STATISTICS | |||||||||||||||||||||||||||||
| Operating Weekdays | 65 | 65 | “ | 256 | 255 | 0 | % | ||||||||||||||||||||||
| Average Daily Package Volume (000s) | |||||||||||||||||||||||||||||
| FedEx Ground | 3,732 | 3,516 | 6 | % | 3,746 | 3,523 | 6 | % | |||||||||||||||||||||
| FedEx SmartPost | 1,430 | 1,150 | 24 | % | 1,432 | 1,222 | 17 | % | |||||||||||||||||||||
| Yield (Revenue Per Package) | |||||||||||||||||||||||||||||
| FedEx Ground | $ | 8.64 | $ | 8.04 | 7 | % | $ | 8.17 | $ | 7.73 | 6 | % | |||||||||||||||||
| FedEx SmartPost | $ | 1.76 | $ | 1.63 | 8 | % | $ | 1.72 | $ | 1.56 | 10 | % | |||||||||||||||||
| FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS | ||||||||||||||||||||||||||||
| Fourth Quarter Fiscal 2011 | ||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| May 31 | May 31 | |||||||||||||||||||||||||||
| 2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||
| Revenue | $ | 1,309 | $ | 1,231 | 6 | % | $ | 4,911 | $ | 4,321 | 14 | % | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 557 | 576 | (3 | %) | 2,303 | 2,128 | 8 | % | ||||||||||||||||||||
| Purchased transportation | 212 | 213 | (0 | %) | 779 | 690 | 13 | % | ||||||||||||||||||||
| Rentals | 28 | 31 | (10 | %) | 122 | 116 | 5 | % | ||||||||||||||||||||
| Depreciation and amortization | 47 | 48 | (2 | %) | 205 | 198 | 4 | % | ||||||||||||||||||||
| Fuel | 176 | 135 | 30 | % | 585 | 445 | 31 | % | ||||||||||||||||||||
| Maintenance and repairs | 47 | 43 | 9 | % | 182 | 148 | 23 | % | ||||||||||||||||||||
| Intercompany charges | 104 | 102 | 2 | % | 427 | 351 | 22 | % | ||||||||||||||||||||
| Impairment and other charges1 | 1 | 18 | (94 | %) | 89 | 18 | NM | |||||||||||||||||||||
| Other | 95 | 101 | (6 | %) | 394 | 380 | 4 | % | ||||||||||||||||||||
| Total Operating Expenses | 1,267 | 1,267 | “ | 5,086 | 4,474 | 14 | % | |||||||||||||||||||||
| Operating Income (Loss) | $ | 42 | ($36 | ) | 217 | % | ($175 | ) | ($153 | ) | (14 | %) | ||||||||||||||||
| Operating Margin | 3.2 | % | (2.9 | %) | 6.1 pts | (3.6 | %) | (3.5 | %) | (0.1 pts) | ||||||||||||||||||
| OPERATING STATISTICS | ||||||||||||||||||||||||||||
| LTL Operating Weekdays | 65 | 65 | “ | 254 | 253 | 0 | % | |||||||||||||||||||||
| LTL Shipments Per Day (000s) | 84.3 | 91.5 | (8 | %) | 86.0 | 82.3 | 4 | % | ||||||||||||||||||||
| Weight Per LTL Shipment (lbs) | 1,177 | 1,160 | 1 | % | 1,144 | 1,134 | 1 | % | ||||||||||||||||||||
| LTL Revenue/CWT | $ | 18.83 | $ | 16.69 | 13 | % | $ | 18.24 | $ | 17.07 | 7 | % | ||||||||||||||||
| 1 – Current year includes charges associated with the combination of FedEx Freight and FedEx National LTL operations, which became effective January 30, 2011.
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