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 the year-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:

 

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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 the phase-in of the reduced tax rate applied to the company’s year-to-date earnings.

Outlook

FedEx is unable to forecast the fiscal 2018 year-end mark-to-market (MTM) pension accounting adjustments. As a result, the company is unable to provide fiscal 2018 earnings-per-share guidance or projected fourth quarter fiscal 2018 consolidated operating income or margin on a GAAP basis.

Before year-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 before year-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.

Before year-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. Excluding year-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 and e-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:

 

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Higher variable compensation accruals

 

•

Increased peak-related costs

 

•

Higher TNT Express integration expenses

 

•

Adverse weather

 

•

Unfavorable currency exchange rates

 

•

Favorable net fuel

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 visit about.fedex.com.

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-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 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 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 Bunn 901-818-7463

Investor Contact: Mickey Foster 901-818-7468

Home Page: fedex.com

 

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RECONCILIATIONS OF NON-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 certain non-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 consolidated non-GAAP financial measures because it results from the non-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 a 12-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 these non-GAAP financial measures in making financial, operating and planning decisions and evaluating the company’s and each business segment’s ongoing performance.

Our non-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 these non-GAAP financial measures. Because non-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 presented non-GAAP financial measures to the most directly comparable GAAP measures.

Fiscal 2018 Earnings-Per-Share Guidance and Fourth Quarter Fiscal 2018 Operating Income and Margin Projections

Our fiscal 2018 earnings-per-share (“EPS”) guidance is a non-GAAP financial measure because it excludes the fiscal 2018 year-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 are non-GAAP financial measures because they exclude the fiscal 2018 year-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 a non-GAAP financial measure because it excludes projected fourth quarter fiscal 2018 TNT Express integration expenses.

We have provided fiscal 2018 non-GAAP EPS guidance, projected fourth quarter fiscal 2018 non-GAAP consolidated operating income and margin and projected fourth quarter fiscal 2018 non-GAAP FedEx Express segment operating margin for the same reasons that were outlined above for historical non-GAAP measures. The fiscal 2018 year-end MTM pension accounting adjustments are excluded from our fiscal 2018 non-GAAP EPS guidance and projected fourth quarter fiscal 2018 consolidated operating income and margin because these non-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 2018 non-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 2018 non-GAAP EPS guidance for the same reason described above for historical non-GAAP measures. Projected fiscal 2018 TNT Express integration expenses are excluded from our fiscal 2018 non-GAAP EPS guidance, projected fourth quarter fiscal 2018 non-GAAP consolidated operating income and margin and FedEx Express segment operating margin for the same reasons described above for historical non-GAAP measures.

We are unable to predict the amount of the year-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 2018 non-GAAP EPS guidance or projected fourth quarter fiscal 2018 consolidated operating income or margin. For this reason, a full reconciliation of our fiscal 2018 non-GAAP EPS guidance and projected fourth quarter fiscal 2018 non-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 2018 Earnings-Per-Share Outlook” and “Fourth Quarter Fiscal 2018 Outlook—FedEx Corporation” outline the impact of the items that are excluded from our fiscal 2018 non-GAAP EPS guidance and projected fourth quarter fiscal 2018 non-GAAP consolidated operating income and margin, other than the year-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 2018 Earnings-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 –	The year-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
Additional paid-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

 

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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

 

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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

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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

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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

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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%

 

18