Attached files
| file | filename |
|---|---|
| 8-K - 8-K - FEDEX CORP | d104244d8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Reports Solid Second Quarter Earnings Growth
Improved Base Yields and E-Commerce Growth Drive Results
MEMPHIS, Tenn., December 16, 2015... FedEx Corp. (NYSE: FDX) today reported adjusted earnings of $2.58 per diluted share for the second quarter ended November 30, compared to adjusted earnings of $2.16 per diluted share a year ago. Without adjustments, FedEx reported earnings of $2.44 for the second quarter compared to $2.31 per diluted share last year.
This year’s quarterly consolidated earnings have been adjusted for expenses related to the settlement of certain independent contractor litigation matters involving FedEx Ground ($0.09 per diluted share) and the pending acquisition of TNT Express ($0.04 per diluted share).
“FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “A record number of holiday shipments – fueled by the steady rise of e-commerce – are flowing through the FedEx global networks, and we greatly appreciate the dedication of our 340,000 team members around the world who are delivering outstanding service to our customers.”
Second Quarter Results
FedEx Corp. reported the following consolidated results for the second quarter:
| Fiscal 2016 | Fiscal 2015 | |||||||||||||||
| Adjusted (non-GAAP) |
As Reported (GAAP) |
Adjusted (non-GAAP) |
As Reported (GAAP) |
|||||||||||||
| Revenue |
$ | 12.5 billion | $ | 12.5 billion | $ | 11.9 billion | $ | 11.9 billion | ||||||||
| Operating income |
$ | 1.20 billion | $ | 1.14 billion | $ | 1.02 billion | $ | 1.09 billion | ||||||||
| Operating margin |
9.6 | % | 9.1 | % | 8.6 | % | 9.1 | % | ||||||||
| Net income |
$ | 729 million | $ | 691 million | $ | 622 million | $ | 663 million | ||||||||
| Diluted EPS |
$ | 2.58 | $ | 2.44 | $ | 2.16 | $ | 2.31 | ||||||||
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1
Operating results rose year-over-year primarily due to higher base rates and the continued positive impacts from profit improvement initiatives. These benefits were partially offset by lower-than-anticipated volume at FedEx Freight and the modest negative net impact of fuel. The effective tax rate for the quarter was lowered to 34.5% due primarily to the resolution of a state tax matter.
During the quarter, the company acquired 6.0 million shares of FedEx common stock.
Outlook
FedEx reaffirms its adjusted fiscal 2016 earnings outlook of $10.40 to $10.90 per diluted share before year-end mark-to-market pension accounting adjustments (“MTM adjustments”). The outlook assumes moderate economic growth and excludes the independent contractor legal settlements and any TNT-related costs or operating results. The effective tax rate for the full year is expected to be approximately 36% excluding any MTM adjustments and the impact of the TNT transaction. The capital spending forecast for the fiscal year remains $4.6 billion.
“We expect our solid earnings growth to continue in the second half of our fiscal year despite weakness in industrial production,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Our improved financial results are being driven by better revenue quality, e-commerce growth and the successful ongoing execution of our profit improvement initiatives.”
FedEx Express Segment
For the second quarter, the FedEx Express segment reported:
| • | Revenue of $6.59 billion, down 6% from last year’s $7.02 billion |
| • | Operating income of $622 million, up 26% from $492 million a year ago |
| • | Operating margin of 9.4%, up from 7.0% the previous year |
Revenue decreased 6%, as lower fuel surcharges and unfavorable currency exchange rates more than offset base yield growth. U.S. domestic package volume increased 1%, driven by growth in overnight package. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates. FedEx International Economy® volume grew 3%, while FedEx International Priority® volume decreased 5%. International export revenue per package decreased 9% as lower fuel surcharges and unfavorable currency exchange rates more than offset higher base rates.
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2
Operating expenses decreased 9%, primarily driven by lower fuel prices and currency exchange rates. Base expenses, excluding the impacts of fuel price and exchange rate changes, continued to be constrained by profit improvement program initiatives.
Operating results improved due to higher base pricing and the benefits from profit improvement program initiatives. Fuel and currency exchange rate changes had a minimal combined net impact on the quarter, as the favorable net impact of currency exchange rate changes was partially offset by the slightly negative net impact of fuel.
FedEx Ground Segment
For the second quarter, the FedEx Ground segment reported:
| • | Revenue of $4.05 billion, up 32% from last year’s $3.06 billion |
| • | Operating income of $526 million, up 13% from $465 million a year ago |
| • | Operating margin of 13.0%, down from 15.2% the previous year |
Revenue increased due to the inclusion of GENCO results, higher ground volume and base rates, and the recording of FedEx SmartPost revenues on a gross basis versus the previous net treatment. FedEx Ground average daily volume grew 9% in the second quarter, primarily driven by growth in e-commerce. FedEx Ground revenue per package increased 10% due to the recording of FedEx SmartPost revenues on a gross basis, and higher base rates, which include additional dimensional weight charges. These were partially offset by lower fuel surcharges.
Operating income improved primarily due to higher base rates and volume. Operating margin decreased primarily due to the change in FedEx SmartPost revenue reporting and the inclusion of GENCO results, which collectively reduced the operating margin year-over-year by 2.1 percentage points.
FedEx Freight Segment
For the second quarter, the FedEx Freight segment reported:
| • | Revenue of $1.55 billion, down 2% from last year’s $1.59 billion |
| • | Operating income of $101 million, down 10% from $112 million a year ago |
| • | Operating margin of 6.5%, down from 7.1% the previous year |
Revenue declined 2%, as lower fuel surcharges more than offset base rate and volume growth. Less-than-truckload (LTL) average daily shipments increased 1%, while weight per shipment decreased 1%. LTL revenue per shipment declined 3% due to lower fuel surcharges, partially offset by higher base rates.
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3
Operating results declined primarily due to salaries and employee benefits expense significantly outpacing lower-than-anticipated volume.
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 $49 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 340,000 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 second quarter fiscal 2016 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 5:00 p.m. EST on December 16, are available on the company’s website at investors.fedex.com. A replay of the conference call webcast will be posted on our website following the call.
The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our SEC filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.
Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, our ability to execute on our profit improvement
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4
programs, 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. 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 Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
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5
RECONCILIATION OF FEDEX CORPORATION’S 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, including an understanding of items that are non-operational or non-recurring in nature. Excluding from second quarter fiscal 2016 results TNT Express-related expenses and legal settlement costs, and from second quarter fiscal 2015 results the credit associated with the segment reporting change, will assist investors in understanding and allow for more accurate comparisons of the company’s core operating performance. As required by SEC rules, the table below presents a reconciliation of our presented non-GAAP measures to the most directly comparable GAAP measures. The inability to predict the amount of any future year-end mark-to-market pension accounting adjustments and the amount and timing of any operating results and integration planning and acquisition-related costs with respect to TNT Express makes a reconciliation of the forecasts for adjusted earnings per diluted share and the effective tax rate for the full year impracticable.
Second Quarter Fiscal 2016
Dollars in millions, except EPS
| Operating | Net |
Diluted Earnings |
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| Income1 | Margin1 | Income1 | Per Share1 | |||||||||||||
| Non-GAAP measure |
$ | 1,196 | 9.6 | % | $ | 729 | $ | 2.58 | ||||||||
| Legal settlements |
(41 | ) | (0.3 | %) | (25 | ) | (0.09 | ) | ||||||||
| TNT Express expenses |
(17 | ) | (0.1 | %) | (12 | ) | (0.04 | ) | ||||||||
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| GAAP measure |
$ | 1,137 | 9.1 | % | $ | 691 | $ | 2.44 | ||||||||
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Second Quarter Fiscal 2015
Dollars in millions, except EPS
| Operating | Net | Diluted Earnings |
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| Income | Margin1 | Income1 | Per Share | |||||||||||||
| Non-GAAP measure |
$ | 1,022 | 8.6 | % | $ | 622 | $ | 2.16 | ||||||||
| Segment reporting change2 |
66 | 0.6 | % | 42 | 0.15 | |||||||||||
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| GAAP measure |
$ | 1,088 | 9.1 | % | $ | 663 | $ | 2.31 | ||||||||
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Notes
| 1 | – | Does not sum to total due to rounding. | ||
| 2 | – | Represents the credit at Corporate resulting from the change in recognizing expected return on plan assets for our defined benefit pension and post-retirement healthcare plans at the segment level, as discussed further in our fiscal 2015 Annual Report on Form 10-K. |
# # #
6
FEDEX CORP. FINANCIAL HIGHLIGHTS
Second Quarter Fiscal 2016
(In millions, except earnings per share)
(Unaudited)
| Three Months Ended November 30 |
Six Months Ended November 30 |
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| 2015 | 2014 | % | 2015 | 2014 | % | |||||||||||||||||||
| Revenue: |
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| FedEx Express segment |
$ | 6,588 | $ | 7,024 | (6 | %) | $ | 13,179 | $ | 13,886 | (5 | %) | ||||||||||||
| FedEx Ground segment |
4,050 | 3,063 | 32 | % | 7,880 | 6,023 | 31 | % | ||||||||||||||||
| FedEx Freight segment |
1,547 | 1,585 | (2 | %) | 3,148 | 3,194 | (1 | %) | ||||||||||||||||
| FedEx Services segment |
403 | 394 | 2 | % | 793 | 768 | 3 | % | ||||||||||||||||
| Eliminations and other |
(135 | ) | (127 | ) | 6 | % | (268 | ) | (248 | ) | 8 | % | ||||||||||||
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| Total Revenue |
12,453 | 11,939 | 4 | % | 24,732 | 23,623 | 5 | % | ||||||||||||||||
| Operating Expenses: |
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| Salaries and employee benefits |
4,570 | 4,229 | 8 | % | 9,095 | 8,343 | 9 | % | ||||||||||||||||
| Purchased transportation |
2,538 | 2,185 | 16 | % | 4,882 | 4,239 | 15 | % | ||||||||||||||||
| Rentals and landing fees |
682 | 663 | 3 | % | 1,377 | 1,323 | 4 | % | ||||||||||||||||
| Depreciation and amortization |
653 | 651 | — | 1,301 | 1,302 | — | ||||||||||||||||||
| Fuel |
615 | 1,052 | (42 | %) | 1,327 | 2,172 | (39 | %) | ||||||||||||||||
| Maintenance and repairs |
529 | 543 | (3 | %) | 1,077 | 1,099 | (2 | %) | ||||||||||||||||
| Other |
1,729 | 1,528 | 13 | % | 3,392 | 2,995 | 13 | % | ||||||||||||||||
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| Total Operating Expenses |
11,316 | 10,851 | 4 | % | 22,451 | 21,473 | 5 | % | ||||||||||||||||
| Operating Income: |
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| FedEx Express segment |
622 | 492 | 26 | % | 1,167 | 869 | 34 | % | ||||||||||||||||
| FedEx Ground segment |
526 | 465 | 13 | % | 1,063 | 1,010 | 5 | % | ||||||||||||||||
| FedEx Freight segment |
101 | 112 | (10 | %) | 233 | 280 | (17 | %) | ||||||||||||||||
| Eliminations, corporate and other |
(112 | ) | 19 | NM | (182 | ) | (9 | ) | NM | |||||||||||||||
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| Total Operating Income |
1,137 | 1,088 | 5 | % | 2,281 | 2,150 | 6 | % | ||||||||||||||||
| Other Income (Expense): |
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| Interest, net |
(74 | ) | (47 | ) | 57 | % | (137 | ) | (95 | ) | 44 | % | ||||||||||||
| Other, net |
(8 | ) | 5 | NM | (5 | ) | 3 | NM | ||||||||||||||||
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| Total Other Expense |
(82 | ) | (42 | ) | 95 | % | (142 | ) | (92 | ) | 54 | % | ||||||||||||
| Pretax Income |
1,055 | 1,046 | 1 | % | 2,139 | 2,058 | 4 | % | ||||||||||||||||
| Provision for Income Taxes |
364 | 383 | (5 | %) | 756 | 742 | 2 | % | ||||||||||||||||
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| Net Income |
$ | 691 | $ | 663 | 4 | % | $ | 1,383 | $ | 1,316 | 5 | % | ||||||||||||
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| Diluted Earnings Per Share |
$ | 2.44 | $ | 2.31 | 6 | % | $ | 4.86 | $ | 4.57 | 6 | % | ||||||||||||
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| Weighted Average Common and Common Equivalent Shares |
283 | 287 | (1 | %) | 284 | 288 | (1 | %) | ||||||||||||||||
| Capital Expenditures |
$ | 1,353 | $ | 1,170 | 16 | % | $ | 2,562 | $ | 1,890 | 36 | % | ||||||||||||
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7
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
Second Quarter Fiscal 2016
(In millions)
| Nov. 30, 2015 | ||||||||
| ASSETS | (Unaudited) | May 31, 2015 | ||||||
| Current Assets |
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| Cash and cash equivalents |
$ | 3,647 | $ | 3,763 | ||||
| Receivables, less allowances |
5,865 | 5,719 | ||||||
| Spare parts, supplies and fuel, less allowances |
493 | 498 | ||||||
| Deferred income taxes |
687 | 606 | ||||||
| Prepaid expenses and other |
460 | 355 | ||||||
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| Total current assets |
11,152 | 10,941 | ||||||
| Property and Equipment, at Cost |
45,242 | 42,864 | ||||||
| Less accumulated depreciation and amortization |
22,964 | 21,989 | ||||||
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| Net property and equipment |
22,278 | 20,875 | ||||||
| Other Long-Term Assets |
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| Goodwill |
3,806 | 3,810 | ||||||
| Other assets |
1,135 | 1,443 | ||||||
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| Total other long-term assets |
4,941 | 5,253 | ||||||
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| $ | 38,371 | $ | 37,069 | |||||
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| LIABILITIES AND STOCKHOLDERS’ INVESTMENT |
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| Current Liabilities |
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| Current portion of long-term debt |
$ | 14 | $ | 19 | ||||
| Accrued salaries and employee benefits |
1,510 | 1,436 | ||||||
| Accounts payable |
2,129 | 2,066 | ||||||
| Accrued expenses |
2,298 | 2,436 | ||||||
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| Total current liabilities |
5,951 | 5,957 | ||||||
| Long-Term Debt, Less Current Portion |
8,481 | 7,249 | ||||||
| Other Long-Term Liabilities |
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| Deferred income taxes |
1,759 | 1,747 | ||||||
| Pension, postretirement healthcare and other benefit obligations |
4,702 | 4,893 | ||||||
| Self-insurance accruals |
1,265 | 1,120 | ||||||
| Deferred lease obligations |
840 | 711 | ||||||
| Deferred gains, principally related to aircraft transactions |
167 | 181 | ||||||
| Other liabilities |
216 | 218 | ||||||
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| Total other long-term liabilities |
8,949 | 8,870 | ||||||
| Commitments and Contingencies |
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| Common Stockholders’ Investment |
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| Common stock, $0.10 par value, 800 million shares authorized |
32 | 32 | ||||||
| Additional paid-in capital |
2,839 | 2,786 | ||||||
| Retained earnings |
18,048 | 16,900 | ||||||
| Accumulated other comprehensive income |
(41 | ) | 172 | |||||
| Treasury stock, at cost |
(5,888 | ) | (4,897 | ) | ||||
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| Total common stockholders’ investment |
14,990 | 14,993 | ||||||
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| $ | 38,371 | $ | 37,069 | |||||
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8
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Second Quarter Fiscal 2016
(In millions)
(Unaudited)
| Six Months Ended November 30 |
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| 2015 | 2014 | |||||||
| Operating Activities: |
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| Net income |
$ | 1,383 | $ | 1,316 | ||||
| Noncash charges: |
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| Depreciation and amortization |
1,301 | 1,302 | ||||||
| Other, net |
95 | 120 | ||||||
| Changes in operating assets and liabilities, net |
(325 | ) | (587 | ) | ||||
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| Net cash provided by operating activities |
2,454 | 2,151 | ||||||
| Investing Activities: |
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| Capital expenditures |
(2,562 | ) | (1,890 | ) | ||||
| Proceeds from asset dispositions and other |
12 | 7 | ||||||
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| Net cash used in investing activities |
(2,550 | ) | (1,883 | ) | ||||
| Financing Activities: |
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| Principal payments on debt |
(17 | ) | (1 | ) | ||||
| Proceeds from debt issuances |
1,238 | — | ||||||
| Proceeds from stock issuances |
62 | 189 | ||||||
| Excess tax benefit on the exercise of stock options |
8 | 23 | ||||||
| Dividends paid |
(141 | ) | (114 | ) | ||||
| Purchase of treasury stock |
(1,101 | ) | (947 | ) | ||||
| Other, net |
(16 | ) | — | |||||
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| Net cash provided by (used in) financing activities |
33 | (850 | ) | |||||
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| Effect of exchange rate changes on cash |
(53 | ) | (60 | ) | ||||
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| Net decrease in cash and cash equivalents |
(116 | ) | (642 | ) | ||||
| Cash and cash equivalents at beginning of period |
3,763 | 2,908 | ||||||
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| Cash and cash equivalents at end of period |
$ | 3,647 | $ | 2,266 | ||||
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9
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
Second Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
| Three Months Ended November 30 |
Six Months Ended November 30 |
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| 2015 | 2014 | % | 2015 | 2014 | % | |||||||||||||||||||
| Revenues: |
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| Package Revenue: |
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| U.S. Overnight Box |
$ | 1,682 | $ | 1,705 | (1 | %) | $ | 3,340 | $ | 3,387 | (1 | %) | ||||||||||||
| U.S. Overnight Envelope |
397 | 400 | (1 | %) | 819 | 815 | — | |||||||||||||||||
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| Total U.S. Overnight |
2,079 | 2,105 | (1 | %) | 4,159 | 4,202 | (1 | %) | ||||||||||||||||
| U.S. Deferred |
826 | 834 | (1 | %) | 1,642 | 1,629 | 1 | % | ||||||||||||||||
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| Total U.S. Package Revenue |
2,905 | 2,939 | (1 | %) | 5,801 | 5,831 | (1 | %) | ||||||||||||||||
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| International Priority |
1,433 | 1,649 | (13 | %) | 2,897 | 3,279 | (12 | %) | ||||||||||||||||
| International Economy |
568 | 598 | (5 | %) | 1,142 | 1,169 | (2 | %) | ||||||||||||||||
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| Total International Export Package |
2,001 | 2,247 | (11 | %) | 4,039 | 4,448 | (9 | %) | ||||||||||||||||
| International Domestic1 |
336 | 383 | (12 | %) | 663 | 754 | (12 | %) | ||||||||||||||||
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| Total Package Revenue |
5,242 | 5,569 | (6 | %) | 10,503 | 11,033 | (5 | %) | ||||||||||||||||
| Freight Revenue: |
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| U.S. |
578 | 586 | (1 | %) | 1,151 | 1,165 | (1 | %) | ||||||||||||||||
| International Priority |
354 | 412 | (14 | %) | 704 | 807 | (13 | %) | ||||||||||||||||
| International Airfreight |
32 | 42 | (24 | %) | 68 | 88 | (23 | %) | ||||||||||||||||
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| Total Freight Revenue |
964 | 1,040 | (7 | %) | 1,923 | 2,060 | (7 | %) | ||||||||||||||||
| Other Revenue2 |
382 | 415 | (8 | %) | 753 | 793 | (5 | %) | ||||||||||||||||
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| Total Express Revenue |
$ | 6,588 | $ | 7,024 | (6 | %) | $ | 13,179 | $ | 13,886 | (5 | %) | ||||||||||||
| Operating Expenses: |
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| Salaries and employee benefits |
2,513 | 2,524 | — | 5,036 | 5,002 | 1 | % | |||||||||||||||||
| Purchased transportation |
616 | 681 | (10 | %) | 1,217 | 1,328 | (8 | %) | ||||||||||||||||
| Rentals and landing fees |
399 | 422 | (5 | %) | 809 | 848 | (5 | %) | ||||||||||||||||
| Depreciation and amortization |
349 | 368 | (5 | %) | 696 | 742 | (6 | %) | ||||||||||||||||
| Fuel |
517 | 906 | (43 | %) | 1,124 | 1,876 | (40 | %) | ||||||||||||||||
| Maintenance and repairs |
330 | 357 | (8 | %) | 675 | 736 | (8 | %) | ||||||||||||||||
| Intercompany charges |
462 | 452 | 2 | % | 907 | 900 | 1 | % | ||||||||||||||||
| Other |
780 | 822 | (5 | %) | 1,548 | 1,585 | (2 | %) | ||||||||||||||||
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| Total Operating Expenses |
5,966 | 6,532 | (9 | %) | 12,012 | 13,017 | (8 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Income |
$ | 622 | $ | 492 | 26 | % | $ | 1,167 | $ | 869 | 34 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Margin |
9.4 | % | 7.0 | % | 2.4 | pts | 8.9 | % | 6.3 | % | 2.6 | pts | ||||||||||||
| 1 |
- | International Domestic revenues represent international intra-country express operations. | ||
| 2 |
- | Includes FedEx Trade Networks, FedEx SupplyChain Systems and Bongo. |
10
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
Second Quarter Fiscal 2016
(Unaudited)
| Three Months Ended November 30 |
Six Months Ended November 30 |
|||||||||||||||||||||||
| 2015 | 2014 | % | 2015 | 2014 | % | |||||||||||||||||||
| PACKAGE STATISTICS1 |
||||||||||||||||||||||||
| Average Daily Package Volume (000s): |
||||||||||||||||||||||||
| U.S. Overnight Box |
1,290 | 1,259 | 2 | % | 1,250 | 1,235 | 1 | % | ||||||||||||||||
| U.S. Overnight Envelope |
531 | 521 | 2 | % | 536 | 524 | 2 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total U.S. Overnight Package |
1,821 | 1,780 | 2 | % | 1,786 | 1,759 | 2 | % | ||||||||||||||||
| U.S. Deferred |
900 | 915 | (2 | %) | 882 | 880 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total U.S. Domestic Package |
2,721 | 2,695 | 1 | % | 2,668 | 2,639 | 1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| International Priority |
402 | 424 | (5 | %) | 396 | 417 | (5 | %) | ||||||||||||||||
| International Economy |
186 | 180 | 3 | % | 181 | 175 | 3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total International Export Package |
588 | 604 | (3 | %) | 577 | 592 | (3 | %) | ||||||||||||||||
| International Domestic2 |
954 | 917 | 4 | % | 903 | 866 | 4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Average Daily Packages |
4,263 | 4,216 | 1 | % | 4,148 | 4,097 | 1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Yield (Revenue Per Package): |
||||||||||||||||||||||||
| U.S. Overnight Box |
$ | 20.70 | $ | 21.50 | (4 | %) | $ | 20.89 | $ | 21.59 | (3 | %) | ||||||||||||
| U.S. Overnight Envelope |
11.87 | 12.15 | (2 | %) | 11.93 | 12.24 | (3 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| U.S. Overnight Composite |
18.13 | 18.76 | (3 | %) | 18.20 | 18.81 | (3 | %) | ||||||||||||||||
| U.S. Deferred |
14.55 | 14.48 | — | 14.54 | 14.58 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| U.S. Domestic Composite |
16.94 | 17.31 | (2 | %) | 16.99 | 17.40 | (2 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| International Priority |
56.52 | 61.64 | (8 | %) | 57.19 | 61.92 | (8 | %) | ||||||||||||||||
| International Economy |
48.53 | 52.88 | (8 | %) | 49.35 | 52.75 | (6 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total International Export Composite |
54.00 | 59.04 | (9 | %) | 54.73 | 59.21 | (8 | %) | ||||||||||||||||
| International Domestic2 |
5.59 | 6.63 | (16 | %) | 5.73 | 6.85 | (16 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Composite Package Yield |
$ | 19.52 | $ | 20.97 | (7 | %) | $ | 19.78 | $ | 21.21 | (7 | %) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| FREIGHT STATISTICS |
||||||||||||||||||||||||
| Average Daily Freight Pounds (000s): |
||||||||||||||||||||||||
| U.S. |
8,213 | 8,039 | 2 | % | 7,738 | 7,676 | 1 | % | ||||||||||||||||
| International Priority |
2,605 | 2,983 | (13 | %) | 2,547 | 2,887 | (12 | %) | ||||||||||||||||
| International Airfreight |
678 | 630 | 8 | % | 643 | 650 | (1 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Avg Daily Freight Pounds |
11,496 | 11,652 | (1 | %) | 10,928 | 11,213 | (3 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Revenue Per Freight Pound: |
||||||||||||||||||||||||
| U.S. |
$ | 1.12 | $ | 1.16 | (3 | %) | $ | 1.16 | $ | 1.20 | (3 | %) | ||||||||||||
| International Priority |
2.16 | 2.19 | (1 | %) | 2.16 | 2.20 | (2 | %) | ||||||||||||||||
| International Airfreight |
0.75 | 1.07 | (30 | %) | 0.83 | 1.07 | (22 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Composite Freight Yield |
$ | 1.33 | $ | 1.42 | (6 | %) | $ | 1.37 | $ | 1.45 | (6 | %) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Weekdays |
63 | 63 | — | 128 | 127 | 1 | % | |||||||||||||||||
| 1 |
- | Package and freight statistics include only the operations of FedEx Express. | ||
| 2 |
- | International Domestic revenues represent international intra-country express operations. |
11
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Second Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
| Three Months Ended November 30 |
Six Months Ended November 30 |
|||||||||||||||||||||||
| 20152 | 2014 | % | 20152 | 2014 | % | |||||||||||||||||||
| FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
| Revenues: |
||||||||||||||||||||||||
| FedEx Ground1 |
$ | 3,677 | $ | 3,063 | 20 | % | $ | 7,137 | $ | 6,023 | 18 | % | ||||||||||||
| GENCO |
373 | — | NM | 743 | — | NM | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Revenues |
4,050 | 3,063 | 32 | % | 7,880 | 6,023 | 31 | % | ||||||||||||||||
| Operating Expenses: |
||||||||||||||||||||||||
| Salaries and employee benefits |
696 | 485 | 44 | % | 1,349 | 933 | 45 | % | ||||||||||||||||
| Purchased transportation1 |
1,712 | 1,263 | 36 | % | 3,239 | 2,417 | 34 | % | ||||||||||||||||
| Rentals |
155 | 115 | 35 | % | 300 | 223 | 35 | % | ||||||||||||||||
| Depreciation and amortization |
146 | 126 | 16 | % | 292 | 245 | 19 | % | ||||||||||||||||
| Fuel |
2 | 3 | (33 | %) | 5 | 6 | (17 | %) | ||||||||||||||||
| Maintenance and repairs |
69 | 57 | 21 | % | 138 | 113 | 22 | % | ||||||||||||||||
| Intercompany charges |
301 | 278 | 8 | % | 598 | 553 | 8 | % | ||||||||||||||||
| Other |
443 | 271 | 63 | % | 896 | 523 | 71 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Operating Expenses |
3,524 | 2,598 | 36 | % | 6,817 | 5,013 | 36 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Income |
$ | 526 | $ | 465 | 13 | % | $ | 1,063 | $ | 1,010 | 5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Margin |
13.0 | % | 15.2 | % | (2.2 | pts) | 13.5 | % | 16.8 | % | (3.3 | pts) | ||||||||||||
| OPERATING STATISTICS3 |
||||||||||||||||||||||||
| Operating Weekdays |
63 | 63 | — | 128 | 127 | 1 | % | |||||||||||||||||
| Average Daily Package Volume (000s) |
7,623 | 6,967 | 9 | % | 7,163 | 6,709 | 7 | % | ||||||||||||||||
| Yield (Revenue Per Package)1 |
$ | 7.64 | $ | 6.96 | 10 | % | $ | 7.77 | $ | 7.05 | 10 | % | ||||||||||||
| 1 | - | Effective June 1, 2015, FedEx Ground began recording FedEx SmartPost service revenues on a gross basis (including postal fees). Postal fees, which previously were netted against revenue, are now charged to purchased transportation. | ||
| 2 |
- | The financial results of GENCO are included in the current year. | ||
| 3 |
- | Operating statistics include only the operations of FedEx Ground (including FedEx SmartPost). FedEx SmartPost was merged into FedEx Ground on August 31, 2015. |
12
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
Second Quarter Fiscal 2016
(Dollars in millions)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| November 30 | November 30 | |||||||||||||||||||||||
| 2015 | 2014 | % | 2015 | 2014 | % | |||||||||||||||||||
| FINANCIAL HIGHLIGHTS |
||||||||||||||||||||||||
| Revenue |
$ | 1,547 | $ | 1,585 | (2 | %) | $ | 3,148 | $ | 3,194 | (1 | %) | ||||||||||||
| Operating Expenses: |
||||||||||||||||||||||||
| Salaries and employee benefits |
731 | 686 | 7 | % | 1,452 | 1,342 | 8 | % | ||||||||||||||||
| Purchased transportation |
246 | 273 | (10 | %) | 497 | 557 | (11 | %) | ||||||||||||||||
| Rentals |
33 | 31 | 6 | % | 76 | 63 | 21 | % | ||||||||||||||||
| Depreciation and amortization |
61 | 58 | 5 | % | 120 | 116 | 3 | % | ||||||||||||||||
| Fuel |
95 | 143 | (34 | %) | 197 | 290 | (32 | %) | ||||||||||||||||
| Maintenance and repairs |
53 | 53 | — | 106 | 99 | 7 | % | |||||||||||||||||
| Intercompany charges |
112 | 111 | 1 | % | 225 | 221 | 2 | % | ||||||||||||||||
| Other |
115 | 118 | (3 | %) | 242 | 226 | 7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Operating Expenses |
1,446 | 1,473 | (2 | %) | 2,915 | 2,914 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Income |
$ | 101 | $ | 112 | (10 | %) | $ | 233 | $ | 280 | (17 | %) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Operating Margin |
6.5 | % | 7.1 | % | (0.6 | pts) | 7.4 | % | 8.8 | % | (1.4 | pts) | ||||||||||||
| OPERATING STATISTICS |
||||||||||||||||||||||||
| LTL Operating Weekdays |
62 | 62 | — | 127 | 126 | 1 | % | |||||||||||||||||
| Average Daily LTL Shipments (000s) |
||||||||||||||||||||||||
| Priority |
68.9 | 70.1 | (2 | %) | 67.7 | 69.5 | (3 | %) | ||||||||||||||||
| Economy |
31.4 | 29.3 | 7 | % | 31.0 | 29.3 | 6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Average Daily LTL Shipments |
100.3 | 99.4 | 1 | % | 98.7 | 98.8 | — | |||||||||||||||||
| Weight Per LTL Shipment (lbs) |
||||||||||||||||||||||||
| Priority |
1,179 | 1,245 | (5 | %) | 1,189 | 1,251 | (5 | %) | ||||||||||||||||
| Economy |
1,141 | 1,010 | 13 | % | 1,155 | 1,012 | 14 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Composite Weight Per LTL Shipment |
1,167 | 1,176 | (1 | %) | 1,178 | 1,180 | — | |||||||||||||||||
| LTL Revenue/Shipment |
||||||||||||||||||||||||
| Priority |
$ | 218.52 | $ | 228.62 | (4 | %) | $ | 220.90 | $ | 228.34 | (3 | %) | ||||||||||||
| Economy |
263.47 | 265.46 | (1 | %) | 266.43 | 265.44 | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Composite LTL Revenue/Shipment |
$ | 232.60 | $ | 239.49 | (3 | %) | $ | 235.23 | $ | 239.32 | (2 | %) | ||||||||||||
| LTL Revenue/CWT |
||||||||||||||||||||||||
| Priority |
$ | 18.53 | $ | 18.36 | 1 | % | $ | 18.58 | $ | 18.25 | 2 | % | ||||||||||||
| Economy |
23.09 | 26.29 | (12 | %) | 23.07 | 26.24 | (12 | %) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Composite LTL Revenue/CWT |
$ | 19.93 | $ | 20.37 | (2 | %) | $ | 19.97 | $ | 20.27 | (1 | %) | ||||||||||||
13