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About FedEx
FedEx Archives: 2002 Press Releases
( BW)(TN-FEDEX)(FDX) FedEx Corp. Reports Higher Fourth Quarter Earnings, Record Year For Revenue and Earnings; Balance Sheet and Free Cash Flow Measures ImproveBusiness Editors MEMPHIS, Tenn.--(BUSINESS WIRE)--June 25, 2002--FedEx Corporation (NYSE:FDX) today reported earnings of $0.78 per diluted share for the quarter ended May 31, compared to $0.38 per diluted share reported last year. Last year's fourth quarter included charges associated with curtailing certain aircraft modification and development programs and reorganizing certain operations. Excluding these expenses, earnings for last year's fourth quarter were $0.64 per diluted share.
Full Year Results For the full fiscal year, FedEx Corp. reported earnings before the cumulative effect of accounting changes of $2.39 per diluted share, up 20% from $1.99 per share last year. Net income for the year was $2.34 per diluted share including a non-cash charge from an accounting change of $0.05. Excluding last year's fourth quarter charges of $124 million, earnings for the previous year were $2.26 per diluted share. Additional consolidated results for the fiscal year were:
"FedEx achieved record earnings and generated significant free cash flow during the year," said Frederick W. Smith, chairman, president and chief executive officer. "Our FedEx Ground and FedEx Freight units are operating at record profit and service reliability levels. FedEx Express has significantly reduced capital spending levels and has also been able to achieve record levels of service reliability, even as volume has declined during a difficult economic environment." "FedEx benefited in the quarter by offering customers a broad range of services in the express, ground, freight and supply chain solution areas," said Alan B. Graf, Jr., executive vice president and chief financial officer. "Total average daily package volume at FedEx Express and FedEx Ground grew a combined 5% year-over-year for the quarter. FedEx Ground performance was very strong, more than doubling its profit from a year ago on a 21% increase in average daily volume and a 27% increase in revenue. "Our $1.6 billion of capital spending in fiscal 2002 was the lowest level in eight years, which was achieved by deferring or cancelling aircraft deliveries and modifications and by reducing or eliminating various other projects," Graf said. "Our improved profitability and reduced capital spending during the year generated $616 million of free cash flow, enabling us to reduce our debt levels by $315 million, increase cash levels by $210 million, repurchase 3.35 million shares of FedEx stock, increase our stock repurchase authorization by 5 million shares and announce the company's first-ever cash dividend.
"For the full year, operating margin improved to 6.4% from 5.5%
despite the difficult economic environment," Graf said. "The company
has taken significant steps to reduce overhead, increase productivity,
and tightly focus its sales and marketing efforts. We expect our
efforts, combined with an improving economy, should position us to
increase revenue, profitability and return on invested capital and to
continue to generate positive cash flow in the new fiscal year.
Earnings are expected to be $0.40 to $0.50 per diluted share in the
first quarter, compared to $0.41 per diluted share a year ago
excluding the cumulative effect from an accounting change of $0.05 per
share. Capital spending for fiscal 2003 is forecast to be about $1.9
billion, as the company is required to take delivery of 17 aircraft
committed in prior years and is increasing its investment in
information technology and the FedEx Ground network."
Revenue growth came primarily from the strong growth in weight related to the U.S. Postal Service transportation agreement. FedEx Express U.S. domestic average daily package volume declined 3% year-over-year for the fourth quarter, although U.S. domestic deferred package volume grew 3%. FedEx International Priority(R) volume grew 3%, led by strength in Asia and Europe. U.S. domestic express package yield for the quarter was down 2% year-over-year, as an increase in base rates was more than offset by declining weights and fuel surcharges. International Priority package yield grew 1% for the quarter, primarily due to higher weight per package and an improved regional mix. FedEx Express operating income was negatively affected by approximately $60 million year-over-year, as the decline in fuel prices was exceeded by the decline in fuel surcharge revenue. Last year's results included a non-cash charge of $102 million to other operating expense to write off aircraft, aircraft engines, related parts, deposits and related costs. Fourth quarter operating income declined 9% year-over-year excluding the charge.
FedEx Ground average daily package volume grew 21%, with about one-third of the growth coming from FedEx Home Delivery. Yield per package increased more than 3%. Operating margin was 17.2% for the quarter, compared to 9.8% a year ago. FedEx Ground benefited from one additional operating day in this year's fourth quarter. FedEx Home Delivery incurred a pretax loss of $32 million in fiscal 2002, an improvement of $19 million year-over-year, as coverage for this network was expanded to about 90% of the U.S. population. FedEx Home Delivery volumes and financial results are expected to continue to improve in fiscal 2003 as it completes its build-out in September to reach nearly 100% of the U.S. population.
FedEx Freight operating margin was 9.8% in the fourth quarter compared with 7.4% a year ago as the company benefited from productivity improvements and market share gains. FedEx Freight average daily shipments exceeded prior year levels in the latter portion of the quarter, offsetting lower shipment levels earlier in the quarter. Yield increased 6%. In early June, FedEx Freight announced the integration of its operating companies' Web sites and a series of new premium service offerings in conjunction with the official kickoff of the FedEx Freight operating company rebranding. Expanded next-day reach up to 900 miles in selected lanes in the east, and optional money-back guaranteed transit times in the west, reinforce the company's commitment to providing customers with convenient shipping solutions for today's fast cycle supply chains.
Additional information and operating data are contained in the company's annual report, Form 10-K, Form 10-Qs and fourth quarter FY2002 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 10:30 a.m. EDT on June 25, 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 and will remain available for approximately two weeks.
FEDEX CORP. FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2002
(In millions, except earnings per share)
Three Months Ended Year Ended
May 31 May 31(1)
(Unaudited)
--------------------- ---------------------
2002 2001 % 2002 2001 %
------- ------- ----- ------- ------- -----
Revenue:
FedEx Express $ 3,999 $ 3,852 4% $15,327 $15,534 (1%)
FedEx Ground 743 583 27% 2,711 2,237 21%
FedEx Freight 522 498 5% 1,960 835 NM
Other 152 183 (17%) 609 1,023 NM
------- ------- ------- -------
Total Revenue 5,416 5,116 6% 20,607 19,629 5%
Operating Expenses:
Salaries and
employee benefits 2,386 2,170 10% 9,099 8,263 10%
Purchased
transportation 474 427 11% 1,825 1,713 7%
Rentals and
landing fees 432 435 (1%) 1,780 1,650 8%
Depreciation and
amortization 345 337 2% 1,364 1,276 7%
Fuel 283 278 2% 1,100 1,143 (4%)
Maintenance and
repairs 330 312 6% 1,240 1,170 6%
Airline stabilization
compensation -- -- NM (119) -- NM
Other 750 933 (20%) 2,997 3,343 (10%)
------- ------- ------- -------
Total Operating
Expenses 5,000 4,892 2% 19,286 18,558 4%
Operating Income (Loss):
FedEx Express 236 158 49% 811 847 (4%)
FedEx Ground 128 57 125% 337 175 93%
FedEx Freight 51 37 38% 168 55 NM
Other 1 (28) NM 5 (6) NM
------- ------- ------- -------
Total Operating
Income 416 224 86% 1,321 1,071 23%
Other Income (Expense):
Interest, net (30) (42) 29% (139) (144) 3%
Other, net (15) (2) NM (22) -- NM
------- ------- ------- -------
Total Other Income
(Expense) (45) (44) (2%) (161) (144) (12%)
------- ------- ------- -------
Pretax Income 371 180 106% 1,160 927 25%
Provision for Income
Taxes 135 67 101% 435 343 27%
------- ------- ------- -------
Income Before Goodwill
Accounting Change 236 113 109% 725 584 24%
Net Income $ 236 $ 113 109% $ 710 $ 584 22%
======= ======= ======= =======
Diluted Earnings
Per Share:
Income Before
Accounting Change $ 0.78 $ 0.38 105% $ 2.39 $ 1.99 20%
Cumulative Effect of
Accounting Change -- -- NM (0.05) -- NM
------- ------- ------- -------
Diluted Earnings
Per Share $ 0.78 $ 0.38 105% $ 2.34 $ 1.99 18%
======= ======= ======= =======
Weighted Average Common
and Common Equivalent
Shares 304 301 1% 303 293 3%
EBITDA(2) $ 745 $ 559 33% $ 2,662 $ 2,347 13%
Capital Expenditures,
Incl. Equivalent
Capital $ 314 $ 621 (49%)$ 1,615 $ 1,893 (15%)
(1) FedEx Freight East was acquired in Q3 FY01. Prior year results
include the operations of FedEx Freight West from December 1, 2000
and FedEx Freight East from January 1, 2001. Prior to December 1,
2000, FedEx Freight West results are included in Other.
(2) EBITDA is earnings before goodwill accounting change, interest,
taxes, depreciation and amortization.
FEDEX CORP. OPERATING HIGHLIGHTS
Fourth Quarter Fiscal 2002
(In thousands, except yield, weight and operating weekdays)
Three Months Ended Year Ended
May 31 May 31
(Unaudited)
--------------------- ---------------------
2002 2001 % 2002 2001 %
------- ------- ----- ------- ------- -----
FEDEX EXPRESS
-------------
Operating Weekdays 65 65 -- 255 255 --
AVG. DAILY VOLUME / POUNDS
Average Daily Package
Volume:
U.S. Overnight Box 1,179 1,222 (4%) 1,170 1,264 (7%)
U.S. Overnight Envelope 702 764 (8%) 699 757 (8%)
U.S. Deferred 859 837 3% 868 899 (3%)
------- ------- ------- -------
Total U.S. Domestic
Package 2,740 2,823 (3%) 2,737 2,920 (6%)
International Priority 357 346 3% 340 346 (2%)
------- ------- ------- -------
Total Average Daily
Packages 3,097 3,169 (2%) 3,077 3,266 (6%)
======= ======= ======= =======
Average Daily Freight
Pounds:
U.S. 9,145 4,032 127% 7,736 4,337 78%
International 2,138 2,121 1% 2,082 2,208 (6%)
------- ------- ------- -------
Total Avg. Daily
Freight Pounds 11,283 6,153 83% 9,818 6,545 50%
======= ======= ======= =======
YIELD
-----
Revenue Per Package:
U.S. Overnight Box $17.86 $18.15 (2%) $17.90 $18.09 (1%)
U.S. Overnight Envelope 9.78 9.91 (1%) 9.84 9.69 2%
U.S. Deferred 10.89 11.06 (2%) 10.77 10.87 (1%)
------- ------- ------- -------
Total U.S. Domestic
Package 13.60 13.82 (2%) 13.58 13.69 (1%)
International Priority 44.24 43.87 1% 44.16 44.70 (1%)
------- ------- ------- -------
Composite Package
Yield $17.13 $17.10 0% $16.96 $16.97 (0%)
======= ======= ======= =======
Revenue Per Freight
Pound:
U.S. $ 0.64 $ 0.59 8% $ 0.65 $ 0.59 10%
International 0.70 0.75 (7%) 0.72 0.75 (4%)
------- ------- ------- -------
Composite Freight
Yield $ 0.65 $ 0.64 2% $ 0.66 $ 0.64 3%
======= ======= ======= =======
FEDEX GROUND
------------
Operating Weekdays 64 63 2% 253 254 (0%)
Average Daily Package
Volume 1,874 1,545 21% 1,755 1,520 15%
Yield $ 6.19 $ 5.99 3% $ 6.11 $ 5.79 6%
FEDEX FREIGHT(1)
----------------
Operating Weekdays 65 65 -- 253 107 NM
Shipments Per Day 58 57 2% 56 56 --
Weight Per Shipment (lbs) 1,116 1,133 (2%) 1,114 1,132 (2%)
Revenue/CWT $12.50 $11.84 6% $12.41 $11.83 5%
FEDEX CORP
----------
Average Full-Time
Equivalents (FTEs) 186 185 1% 185 177 5%
(1) Fiscal 2001 based on the portion of the year including both FedEx
Freight East and FedEx Freight West (January 2001 through May
2001).
FEDEX CORP. CONSOLIDATED
CONDENSED BALANCE SHEET
Fourth Quarter Fiscal 2002
(In millions)
May 31
-------------------------------
-------------------------------
2002 2001
----- -----
ASSETS
Current Assets:
Cash and cash equivalents $331 $121
Other current assets 3,334 3,380
------- -----
Total Current Assets 3,665 3,501
Net Property and Equipment 8,302 8,100
Other Assets 1,845 1,791
------- -----
$13,812 $13,392
======== ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt $6 $221
Other current liabilities 2,936 3,029
------- -----
Total Current Liabilities 2,942 3,250
Long-Term Debt, Less Current Portion 1,800 1,900
Deferred Income Taxes and Other Liabilities 2,525 2,342
Total Common Stockholders' Investment 6,545 5,900
------- -----
$13,812 $13,392
======== ========
FEDEX CORP. CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
Fourth Quarter Fiscal 2002
(In millions)
Year Ended
May 31,
------------------
------------------
2002 2001
---- ----
Net Cash Provided by Operating Activities $2,228 $2,044
Investing Activities:
Purchases of property and equipment (1,615) (1,893)
Business acquisitions, net of cash acquired (35) (477)
Other, net 38 257
------- -------
Net cash used in investing activities (1,612) (2,113)
------- -------
Net cash (used in) provided by
financing activities (406) 122
------- -------
Net increase in cash and cash equivalents 210 53
Cash and cash equivalents at beginning of period 121 68
------- -------
Cash and cash equivalents at end of period $331 $121
======= =======
Free cash flow $616 ($69)
======= =======
Note: Free cash flow is defined as net cash provided by operating
activities less net cash used in investing activities. Previously, the
company had defined free cash flow as net cash provided by operating
activities less purchases of property and equipment and other, net.
FEDEX EXPRESS FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2002
(In millions, except FTEs)
Three Months Ended Year Ended
May 31 May 31
(Unaudited)
------------------------------------------------
------------------------------------------------
2002 2001 % 2002 2001 %
----- ----- - ----- ----- -
Revenue $3,999 $3,852 4% $15,327 $15,534 (1%)
Operating Expenses:
Salaries and employee
benefits 1,680 1,550 8% 6,467 6,301 3%
Purchased
transportation 140 143 (2%) 562 584 (4%)
Rentals and landing
fees 373 365 2% 1,524 1,419 7%
Depreciation and
amortization 204 200 2% 806 797 1%
Fuel 261 247 6% 1,009 1,063 (5%)
Maintenance and
repairs 262 246 7% 980 968 1%
Airline stabilization
compensation -- -- NM (119) -- NM
Intercompany charges 342 323 6% 1,332 1,317 1%
Other 501 620 (19%) 1,955 2,238 (13%)
------- ------ ------ ------
Total Operating Expenses 3,763 3,694 2% 14,516 14,687 (1%)
------- ------ ------ ------
Operating Income $236 $158 49% $811 $847 (4%)
======= ====== ====== ======
EBITDA $423 $357 18% $1,564 $1,641 (5%)
Average Full-Time
Equivalents (000s) 120 121 (1%) 120 123 (2%)
FEDEX GROUND FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2002
(In millions)
Three Months Ended Year Ended
May 31 May 31
(Unaudited)
------------------------------------------------
------------------------------------------------
2002 2001 % 2002 2001 %
----- ----- --- ----- ----- ---
Revenue $743 $583 27% $2,711 $2,237 21%
Operating Expenses:
Salaries and employee
benefits 141 113 25% 532 450 18%
Purchased
transportation 274 223 23% 1,032 881 17%
Rentals 16 18 (11%) 71 67 6%
Depreciation and
amortization 34 31 10% 132 111 19%
Fuel 1 3 (67%) 4 8 (50%)
Maintenance and
repairs 18 16 13% 73 63 16%
Intercompany charges 61 54 13% 238 215 11%
Other 70 68 3% 292 267 9%
------ ------ ------ ------
Total Operating
Expenses 615 526 17% 2,374 2,062 15%
------ ------ ------ ------
Operating Income $128 $57 125% $337 $175 93%
====== ====== ====== ======
EBITDA $159 $87 83% $460 $283 63%
FEDEX FREIGHT FINANCIAL HIGHLIGHTS
Fourth Quarter Fiscal 2002
(In millions)
Three Months Ended Year Ended
May 31 May 31
(Unaudited)
----------------------------------------------
2002 2001 % 2002
----- ----- - -----
Revenue $522 $498 5% $1,960
Operating Expenses:
Salaries and employee benefits 308 291 6% 1,170
Purchased transportation 16 14 14% 57
Rentals 16 16 -- 64
Depreciation and amortization 21 26 (19%) 86
Fuel 18 23 (22%) 72
Maintenance and repairs 25 24 4% 90
Intercompany charges 2 -- NM 8
Other 65 67 (3%) 245
------ ------ ------
Total Operating Expenses 471 461 2% 1,792
------ ------ ------
Operating Income $51 $37 38% $168
====== ====== ======
EBITDA $69 $63 10% $248
--30--JB/na*
CONTACT: FedEx Corp., Memphis
Media Contact:
Shirlee Clark, 901/818-7463
or
Investor Contact:
Jim Clippard, 901/818-7468
www.fedex.com
KEYWORD: TENNESSEE
INDUSTRY KEYWORD: AIRLINES TRANSPORTATION CONFERENCE CALLS
EARNINGS
SOURCE: FedEx Corp.
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