SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 


 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported):  September 22, 2004

 


 

FEDEX CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Commission file number 1-15829
 
 
 

Delaware

 

62-1721435

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

942 South Shady Grove Road, Memphis, Tennessee

 

38120

(Address of principal executive offices)

 

(ZIP Code)

 

 

 

Registrant’s telephone number, including area code:  (901) 818-7500

 

 

FEDERAL EXPRESS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Commission file number 1-7806
 
 
 

Delaware

 

71-0427007

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

3610 Hacks Cross Road, Memphis, Tennessee

 

38125

(Address of principal executive offices)

 

(ZIP Code)

 

 

 

Registrant’s telephone number, including area code: (901) 369-3600

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 



 

EXPLANATORY NOTE

 

The information in this Report, including the exhibit, is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder.  Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

 

SECTION 2.  FINANCIAL INFORMATION.

 

Item 2.02.  Results of Operations and Financial Condition.

 

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated September 22, 2004, announcing its and its wholly owned subsidiary Federal Express Corporation’s financial results for the fiscal quarter ended August 31, 2004.

 

SECTION 9.  FINANCIAL STATEMENTS AND EXHIBITS.

 

Item 9.01.  Financial Statements and Exhibits.

 

(c)       Exhibits.  The following exhibit is being furnished as part of this Report.

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Press Release of FedEx Corporation dated September 22, 2004.

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

 

 

FedEx Corporation

 

 

 

 

 

Date:  September 22, 2004

By:

/s/ JOHN L. MERINO

 

 

 

John L. Merino

 

 

Corporate Vice President and

 

 

Principal Accounting Officer

 

 

 

 

 

 

 

Federal Express Corporation

 

 

 

 

 

Date:  September 22, 2004

By:

/s/ JAY L. COFIELD

 

 

 

Jay L. Cofield

 

 

Vice President and

 

 

Worldwide Controller

 

3


Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

FedEx Profits Surge in First Quarter
Strong Revenue Growth Across International, Ground and Freight Services
FedEx International Priority® Revenue Grows 25%

 

MEMPHIS, Tenn., September 22, 2004 ... FedEx Corporation (NYSE: FDX) reported earnings of $1.08 per diluted share for the first quarter ended August 31, compared to $0.42 per diluted share a year ago, an increase of 157%.  Excluding business realignment costs and a one-time tax benefit, last year’s earnings per diluted share were $0.61.

 

FedEx Corp. reported the following consolidated results for the first quarter:

 

                  Revenue of $6.98 billion, up 23% from $5.69 billion the previous year

                  Operating income of $579 million, up from $200 million a year ago

                  Operating margin of 8.3%, up from last year’s 3.5%

                  Net income of $330 million, up from $128 million the previous year

 

“Our strong earnings performance reflects an increased demand for our broad portfolio of services, successful execution of our cross-selling strategy and the expanding global economy,” said Frederick W. Smith, chairman, president and chief executive officer.  “Customers are increasingly seeing the value of using FedEx to reach new markets, grow their businesses and cut inventory carrying costs.  The global economy is expanding steadily, particularly the manufacturing sector, giving our business more opportunities to grow in the future.”

 

First quarter revenues included $490 million from FedEx Kinko’s which was acquired in late fiscal 2004.  Last year’s first quarter included $132 million or $0.27 per diluted share of business realignment expenses at FedEx Express associated with voluntary early retirement and severance programs.  It also included a one-time benefit of $0.08

 

- more -

 

1



 

per diluted share resulting from a court ruling in favor of the company over the tax treatment of jet engine maintenance costs.

 

Total average daily package volume at FedEx Express and FedEx Ground grew a combined 6% year over year for the quarter, due to continued strong growth in international express shipments and higher growth in ground shipments.  FedEx Freight average daily less-than-truckload (LTL) shipment volume increased 14%.  Revenue per package increased at both FedEx Express and FedEx Ground, while LTL revenue per hundredweight grew at FedEx Freight.

 

Outlook

 

FedEx expects second quarter earnings to be $1.10 to $1.20 per diluted share, while earnings for the year are still expected to be $4.40 to $4.60 per diluted share.  Capital spending for fiscal 2005 is forecast to be approximately $2.1 billion.  Strong growth in FedEx International Priority services requires additional aircraft capacity and infrastructure for FedEx Express.  Strong growth at FedEx Freight and FedEx Ground is also driving additional investments in those networks.

 

“The company’s solid revenue growth and improved profitability trend are very encouraging,” said Alan B. Graf, Jr., executive vice president and chief financial officer.  “We continue to be highly focused on increasing profitability and improving returns and cash flow.  The increased investment in our networks is expected to give us the necessary capacity to handle anticipated growth in the future.  We expect cash flows from operating activities to exceed capital spending even with these additional capital investments.”

 

FedEx Express Segment

 

For the first quarter, the FedEx Express segment reported:

 

                  Revenue of $4.62 billion, up 12% from last year’s $4.14 billion

                  Operating income of $310 million, up significantly from $23 million a year ago

                  Operating margin of 6.7%, up from 0.6% the previous year

 

- more -

 

2



 

FedEx International Priority revenue continued its strong growth, increasing 25% for the quarter.  IP average daily package volume grew 13%, led by strong growth in Asia, U.S. export and Europe.  China exports grew 52%.  IP revenue per package grew 8%, primarily due to an increase in average weight per package, fuel surcharges and favorable exchange rate differences.  U.S. domestic express package revenue was higher, as U.S. domestic package yield increased 6% due to higher fuel surcharge revenue and increases in average weight per package and average rate per pound.  U.S. domestic average daily package volume was down about 2%.

 

Operating income improved dramatically year over year, benefiting from savings from business realignment programs, revenue growth, ongoing cost control efforts and one additional operating day.  Also, the first quarter of fiscal 2004 included $132 million of costs related to business realignment.

 

FedEx Express received tentative approval from the U.S. Department of Transportation for 12 new flight frequencies into China, allowing the company to extend its leadership position as the largest express carrier in China.  The new authorities will provide FedEx with 23 weekly flights to China, more than doubling the current number of weekly flights.

 

FedEx Ground Segment

 

For the first quarter, the FedEx Ground segment reported:

 

                  Revenue of $1.07 billion, up 17% from last year’s $914 million

                  Operating income of $147 million, up 27% from $116 million a year ago

                  Operating margin of 13.7%, up from 12.7% the previous year

 

Average daily package volume showed very strong growth, improving 16% year over year in the first quarter.  Yield improved 2% primarily due to a January 2004 general rate increase and an increase in extra services revenue, partially offset by higher incentives, a lower average weight per package and the elimination of the FedEx Ground fuel surcharge.

 

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3



 

The FedEx Ground segment operating margin was up due to improved productivity and cost controls partially offset by higher fuel costs and a small operating loss at FedEx Supply Chain Services.  FedEx Ground also benefited from one additional operating day in this year’s first quarter.

 

On September 12, FedEx acquired Parcel Direct, a division of a privately held company, for approximately $120 million in cash. Parcel Direct is a leading parcel consolidator and will broaden the FedEx portfolio by allowing the company to offer a cost effective option for delivering low-weight, less time-sensitive packages to U.S. residences through the U.S. Postal Service.  The financial results of Parcel Direct will be included in the FedEx Ground segment and are not expected to materially affect earnings, returns or cash flows.

 

FedEx Freight Segment

 

For the first quarter, the FedEx Freight segment reported:

 

                  Revenue of $807 million, up 27% from last year’s $637 million

                  Operating income of $103 million, up 69% from $61 million a year ago

                  Operating margin of 12.8%, up from 9.6% the previous year

 

Average daily LTL shipments increased 14% year over year due to market-share gains and a stronger economy.  LTL yield improved 7% year over year reflecting incremental fuel surcharges, growth in interregional freight service, a 5.9% general rate increase in June 2004 and favorable contract renewals.  Operating margin was up significantly compared to the previous year due to higher fuel surcharges, productivity gains, one additional operating day and effective cost controls.

 

One year after launching its no-fee money-back guarantee, FedEx Freight continues to gain market share, particularly from small- and medium-sized businesses.  The no-fee money-back guarantee aligns the LTL offering with other FedEx services, differentiating FedEx Freight from its competitors and enabling the company to offer better bundled sales solutions.

 

- more -

 

4



 

FedEx Kinko’s Segment

 

For the first quarter, the FedEx Kinko’s segment reported:

 

                  Revenue of $490 million

                  Operating income of $19 million

                  Operating margin of 3.8%

 

Although FedEx Kinko’s revenue for the quarter experienced strong demand from commercial customer sales and signs and graphics, revenue and operating margin were lower than the fourth quarter, as expected, due to the seasonally slower summer period and incremental staffing and training costs related to the expanded service offerings.  Costs associated with the integration of FedEx Kinko’s will continue through fiscal 2005.

 

This is the first full quarter that FedEx Kinko’s has made available the full range of FedEx day-definite ground and time-definite global express shipping services at U.S. FedEx Kinko’s centers.  FedEx Kinko’s now offers FedEx Consolidated Returns service and will provide complete pack-and-ship capabilities to customers in time for the 2004 peak holiday season.

 

During the quarter, FedEx Kinko’s launched an innovative free software tool called File, Print FedEx Kinko’s that can connect Microsoft Windows desktop users to approximately 1,100 FedEx Kinko’s Office and Print Centers nationwide.  The software tool works over the Web to provide easy access to FedEx Kinko’s services not available on most home or office printers and can be found at www.fedex.com/us/officeprint/onlineprint/fpfk/index.html.

 

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 $26 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

 

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5



 

trusted employers, FedEx inspires its more than 240,000 employees and contractors 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 fedex.com.

 

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and first quarter FY2005 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 September 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, any impacts on our business resulting from the duration and magnitude of the U.S. domestic economic recovery, 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 the FedEx Kinko’s business, the impact of changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels, the timing and amount of any money that FedEx is entitled to receive under the Air Transportation Safety and System Stabilization Act and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.

 

Media Contact:  Jess Bunn 901-818-7463

Investor Contact:  Jim Clippard 901-818-7468

Home Page:  fedex.com

 

- more -

 

6



 

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 the impact of business realignment costs and the tax-related court decision from our prior year results will allow more accurate comparisons of these results to the current year period.  As required by SEC rules, the table below presents a reconciliation of our presented non-GAAP measure to the most directly comparable GAAP measure.

 

 

 

Q1 FY04 Diluted
Earnings
Per Share

 

Non-GAAP Measure

 

$

0.61

 

 

 

 

 

Business Realignment Costs

 

(0.27

)

 

 

 

 

Benefit From Tax Court Decision

 

0.08

 

 

 

 

 

GAAP Measure

 

$

0.42

 

 

7



 

FEDEX CORP. FINANCIAL HIGHLIGHTS

 

First Quarter Fiscal 2005

(In millions, except earnings per share and FTEs)

(Unaudited)

 

 

 

Three Months Ended
August 31

 

 

 

2004

 

2003

 

%

 

Revenue:

 

 

 

 

 

 

 

FedEx Express segment

 

$

4,616

 

$

4,137

 

12

%

FedEx Ground segment

 

1,073

 

914

 

17

%

FedEx Freight segment

 

807

 

637

 

27

%

FedEx Kinko’s segment

 

490

 

 

NM

 

Other & eliminations

 

(11

)

(1

)

NM

 

Total Revenue

 

6,975

 

5,687

 

23

%

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

2,920

 

2,570

 

14

%

Purchased transportation

 

681

 

555

 

23

%

Rentals and landing fees

 

559

 

429

 

30

%

Depreciation and amortization

 

360

 

334

 

8

%

Fuel

 

469

 

322

 

46

%

Maintenance and repairs

 

420

 

364

 

15

%

Business realignment costs

 

 

132

 

NM

 

Other

 

987

 

781

 

26

%

Total Operating Expenses

 

6,396

 

5,487

 

17

%

 

 

 

 

 

 

 

 

Operating Income:

 

 

 

 

 

 

 

FedEx Express segment

 

310

 

23

 

NM

 

FedEx Ground segment

 

147

 

116

 

27

%

FedEx Freight segment

 

103

 

61

 

69

%

FedEx Kinko’s segment

 

19

 

 

NM

 

Other & eliminations

 

 

 

NM

 

Total Operating Income

 

579

 

200

 

190

%

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

Interest, net

 

(39

)

(5

)

NM

 

Other, net

 

(6

)

1

 

NM

 

Total Other Income (Expense)

 

(45

)

(4

)

NM

 

 

 

 

 

 

 

 

 

Pretax Income

 

534

 

196

 

172

%

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

204

 

68

 

200

%

 

 

 

 

 

 

 

 

Net Income

 

$

330

 

$

128

 

158

%

 

 

 

 

 

 

 

 

Diluted Earnings Per Share

 

$

1.08

 

$

0.42

 

157

%

 

 

 

 

 

 

 

 

Weighted Average Common and Common Equivalent Shares

 

305

 

303

 

1

%

 

 

 

 

 

 

 

 

Capital Expenditures

 

$

395

 

$

300

 

32

%

 

 

 

 

 

 

 

 

Average Full-Time Equivalents (FTEs in thousands)(1)

 

211

 

190

 

11

%

 


(1) - The three-month period ended August 31, 2004 includes employees of FedEx Kinko’s.

 

8



 

FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS

 

First Quarter Fiscal 2005

(In millions)

 

 

 

August 31, 2004

 

May 31, 2004

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,388

 

$

1,046

 

Other current assets

 

3,883

 

3,924

 

Total Current Assets

 

5,271

 

4,970

 

 

 

 

 

 

 

Net Property and Equipment

 

9,092

 

9,037

 

 

 

 

 

 

 

Other Long-Term Assets

 

5,016

 

5,127

 

 

 

 

 

 

 

 

 

$

19,379

 

$

19,134

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ INVESTMENT

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Current portion of long-term debt

 

$

830

 

$

750

 

Other current liabilities

 

3,828

 

3,982

 

Total Current Liabilities

 

4,658

 

4,732

 

 

 

 

 

 

 

Long-Term Debt, Less Current Portion

 

2,744

 

2,837

 

 

 

 

 

 

 

Other Long-Term Liabilities

 

3,588

 

3,529

 

 

 

 

 

 

 

Total Common Stockholders’ Investment

 

8,389

 

8,036

 

 

 

 

 

 

 

 

 

$

19,379

 

$

19,134

 

 

9



 

FEDEX CORP. CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

 

First Quarter Fiscal 2005

(In millions)

(Unaudited)

 

 

 

Three Months Ended
August 31

 

 

 

2004

 

2003

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

Net income

 

$

330

 

$

128

 

Noncash charges:

 

 

 

 

 

Depreciation and amortization

 

360

 

334

 

Other, net

 

5

 

43

 

Changes in operating assets and liabilities, net

 

42

 

68

 

 

 

 

 

 

 

Net cash provided by operating activities

 

737

 

573

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

Capital expenditures

 

(395

)

(300

)

Proceeds from asset dispositions

 

4

 

9

 

 

 

 

 

 

 

Net cash used in investing activities

 

(391

)

(291

)

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

Dividends paid

 

(21

)

(15

)

Other, net

 

17

 

(99

)

 

 

 

 

 

 

Net cash used in financing activities

 

(4

)

(114

)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

342

 

168

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,046

 

538

 

Cash and cash equivalents at end of period

 

$

1,388

 

$

706

 

 

10



 

FEDEX EXPRESS SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

 

First Quarter Fiscal 2005

(Dollars in millions)

(Unaudited)

 

 

 

Three Months Ended
August 31

 

 

 

2004

 

2003

 

%

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

4,616

 

$

4,137

 

12

%

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

1,889

 

1,834

 

3

%

Purchased transportation

 

191

 

158

 

21

%

Rentals and landing fees

 

383

 

370

 

4

%

Depreciation and amortization

 

200

 

204

 

(2

)%

Fuel

 

422

 

293

 

44

%

Maintenance and repairs

 

325

 

285

 

14

%

Business realignment costs

 

 

132

 

NM

 

Intercompany charges

 

362

 

342

 

6

%

Other

 

534

 

496

 

8

%

Total Operating Expenses

 

4,306

 

4,114

 

5

%

 

 

 

 

 

 

 

 

Operating Income

 

$

310

 

$

23

 

NM

 

 

 

 

 

 

 

 

 

Operating Margin

 

6.7

%

0.6

%

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Weekdays

 

65

 

64

 

2

%

 

 

 

 

 

 

 

 

AVG DAILY VOLUME / POUNDS

 

 

 

 

 

 

 

Average Daily Package Volume (000s):

 

 

 

 

 

 

 

U.S. Overnight Box

 

1,150

 

1,169

 

(2

)%

U.S. Overnight Envelope

 

662

 

682

 

(3

)%

U.S. Deferred

 

862

 

871

 

(1

)%

Total U.S. Domestic Package

 

2,674

 

2,722

 

(2

)%

International Priority

 

419

 

370

 

13

%

Total Average Daily Packages

 

3,093

 

3,092

 

0

%

 

 

 

 

 

 

 

 

Average Daily Freight Pounds (000s):

 

 

 

 

 

 

 

U.S.

 

8,213

 

7,898

 

4

%

International

 

1,861

 

2,276

 

(18

)%

Total Avg Daily Freight Pounds

 

10,074

 

10,174

 

(1

)%

 

 

 

 

 

 

 

 

YIELD

 

 

 

 

 

 

 

Revenue Per Package:

 

 

 

 

 

 

 

U.S. Overnight Box

 

$

19.37

 

$

18.02

 

7

%

U.S. Overnight Envelope

 

10.21

 

9.90

 

3

%

U.S. Deferred

 

11.57

 

10.87

 

6

%

Total U.S. Domestic Package

 

14.59

 

13.70

 

6

%

International Priority

 

52.93

 

48.80

 

8

%

Composite Package Yield

 

$

19.78

 

$

17.90

 

11

%

 

 

 

 

 

 

 

 

Revenue Per Freight Pound:

 

 

 

 

 

 

 

U.S.

 

$

0.79

 

$

0.72

 

10

%

International

 

0.74

 

0.72

 

3

%

Composite Freight Yield

 

$

0.78

 

$

0.72

 

8

%

 

 

 

 

 

 

 

 

Average Full-Time Equivalents (000s)

 

122

 

123

 

(1

)%

 

11



 

FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

 

First Quarter Fiscal 2005

(Dollars in millions)

(Unaudited)

 

 

 

Three Months Ended
August 31

 

 

 

2004

 

2003

 

%

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

1,073

 

$

914

 

17

%

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

197

 

177

 

11

%

Purchased transportation

 

410

 

342

 

20

%

Rentals

 

26

 

20

 

30

%

Depreciation and amortization

 

40

 

37

 

8

%

Fuel

 

7

 

2

 

250

%

Maintenance and repairs

 

26

 

23

 

13

%

Intercompany charges

 

115

 

102

 

13

%

Other

 

105

 

95

 

11

%

Total Operating Expenses

 

926

 

798

 

16

%

 

 

 

 

 

 

 

 

Operating Income

 

$

147

 

$

116

 

27

%

 

 

 

 

 

 

 

 

Operating Margin

 

13.7

%

12.7

%

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Weekdays

 

65

 

64

 

2

%

 

 

 

 

 

 

 

 

Average Daily Package Volume (000s)

 

2,447

 

2,116

 

16

%

Yield (Revenue Per Package)

 

$

6.54

 

$

6.44

 

2

%

 

12



 

FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS

 

First Quarter Fiscal 2005

(Dollars in millions)

(Unaudited)

 

 

 

Three Months Ended
August 31

 

 

 

2004

 

2003

 

%

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

807

 

$

637

 

27

%

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Salaries and employee benefits

 

410

 

340

 

21

%

Purchased transportation

 

84

 

56

 

50

%

Rentals and landing fees

 

25

 

24

 

4

%

Depreciation and amortization

 

24

 

21

 

14

%

Fuel

 

40

 

27

 

48

%

Maintenance and repairs

 

31

 

27

 

15

%

Intercompany charges

 

6

 

6

 

 

Other

 

84

 

75

 

12

%

Total Operating Expenses

 

704

 

576

 

22

%

 

 

 

 

 

 

 

 

Operating Income

 

$

103

 

$

61

 

69

%

 

 

 

 

 

 

 

 

Operating Margin

 

12.8

%

9.6

%

 

 

 

 

 

 

 

 

 

 

OPERATING STATISTICS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LTL Operating Weekdays

 

65

 

64

 

2

%

 

 

 

 

 

 

 

 

LTL Shipments Per Day (000s)

 

64

 

56

 

14

%

Weight Per LTL Shipment (lbs)

 

1,128

 

1,118

 

1

%

LTL Revenue/CWT

 

$

14.98

 

$

13.97

 

7

%

 

13



 

FEDEX KINKO’S SEGMENT FINANCIAL HIGHLIGHTS

 

First Quarter Fiscal 2005

(Dollars in millions)

(Unaudited)

 

 

 

Three Months Ended
August 31
2004

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

Revenue

 

$

490

 

 

 

 

 

Operating Expenses:

 

 

 

Salaries and employee benefits

 

182

 

Rentals

 

110

 

Depreciation and amortization

 

32

 

Maintenance and repairs

 

9

 

Intercompany charges

 

3

 

Other operating expenses:

 

 

 

Supplies, including paper and toner

 

77

 

Other

 

58

 

Total Operating Expenses

 

471

 

 

 

 

 

Operating Income

 

$

19

 

 

 

 

 

Operating Margin

 

3.8

%

 

Note:  The FedEx Kinko’s segment was formed in the fourth quarter of fiscal 2004.

 

14