8-K
FEDEX CORP (FDX)
UNITED STATES
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 20, 2023
FedEx Corporation
(Exact name of registrant as specified in its charter)
Commission File Number 1-15829
| Delaware | 62-1721435 |
|---|---|
| (State or other jurisdiction of | (IRS Employer |
| incorporation) | 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
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:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.10 per share | FDX | New York Stock Exchange |
| 0.450% Notes due 2025 | FDX 25A | New York Stock Exchange |
| 1.625% Notes due 2027 | FDX 27 | New York Stock Exchange |
| 0.450% Notes due 2029 | FDX 29A | New York Stock Exchange |
| 1.300% Notes due 2031 | FDX 31 | New York Stock Exchange |
| 0.950% Notes due 2033 | FDX 33 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
The information in this Report, including Exhibit 99.1, 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 20, 2023, announcing its financial results for the fiscal quarter ended August 31, 2023.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press Release of FedEx Corporation dated September 20, 2023. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FedEx Corporation | ||
|---|---|---|
| Date: September 20, 2023 | By: | /s/ Jennifer L. Johnson |
| Jennifer L. Johnson | ||
| Corporate Vice President and | ||
| Principal Accounting Officer |
EXHIBIT INDEX
| Exhibit<br><br>Number | Description |
|---|---|
| 99.1 | Press Release of FedEx Corporation dated September 20, 2023. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
EX-99.1
Exhibit 99.1
FedEx Reports Higher First Quarter Diluted EPS of $4.23
and Adjusted Diluted EPS of $4.55
Updates Full-Year Fiscal 2024 Earnings Outlook and
Increases Full-Year Fiscal 2024 Adjusted Earnings Outlook
MEMPHIS, Tenn., September 20, 2023 ... FedEx Corp. (NYSE: FDX) today reported the following consolidated results for the first quarter ended August 31 (adjusted measures exclude the items listed below for the applicable fiscal year):
| Fiscal 2024 | Fiscal 2023 | |||
|---|---|---|---|---|
| As Reported<br>(GAAP) | Adjusted<br>(non-GAAP) | As Reported<br>(GAAP) | Adjusted<br>(non-GAAP) | |
| Revenue | $21.7 billion | $21.7 billion | $23.2 billion | $23.2 billion |
| Operating income | $1.49 billion | $1.59 billion | $1.19 billion | $1.23 billion |
| Operating margin | 6.8% | 7.3% | 5.1% | 5.3% |
| Net income | $1.08 billion | $1.16 billion | $875 million | $905 million |
| Diluted EPS | $4.23 | $4.55 | $3.33 | $3.44 |
This year’s and last year’s quarterly consolidated results have been adjusted for:
| Impact per diluted share | Fiscal 2024 | Fiscal 2023 |
|---|---|---|
| Business optimization costs | $0.32 | $0.07 |
| Business realignment costs | — | 0.04 |
“We started fiscal 2024 with strong momentum as our global transformation actions take hold and drive improved results,” said Raj Subramaniam, FedEx Corp. president and chief executive officer. “FedEx Ground had an outstanding quarter which, when combined with improved earnings at FedEx Express and expense controls across the organization, led to our better-than-expected overall financial performance. FedEx is well-positioned to continue to deliver improved profitability while becoming an even more flexible, efficient and data-driven organization.”
First quarter results improved primarily due to the execution of the company's DRIVE program initiatives and continued focus on revenue quality. The improvement in operating results was partially offset by ongoing demand weakness.
FedEx Express operating income increased 18% during the quarter, as a 9% decline in revenue was more than offset by reduced operating expenses. Cost reductions and transformation efforts that benefited the quarter included structural flight reductions, the alignment of staffing with volume levels, parking aircraft, and shifting to one delivery wave per day in the U.S.
FedEx Ground operating income increased 59% during the quarter primarily due to yield improvement and cost reductions. Cost per package declined more than 2%,
driven by lower line-haul expense and improved dock and first- and last-mile productivity.
FedEx Freight operating income decreased 26% during the quarter driven by lower fuel surcharges and shipments, partially offset by base yield improvement. FedEx Freight completed the planned closure of 29 terminal locations during August.
The company completed a $500 million accelerated share repurchase (ASR) transaction during the quarter. A total of 1.95 million shares were delivered under the ASR agreement. The decrease in outstanding shares benefited first quarter results by $0.02 per diluted share. FedEx expects to repurchase an additional $1.5 billion of common stock during fiscal 2024. Cash on-hand as of August 31, 2023 was $7.1 billion.
Outlook
FedEx is unable to forecast the fiscal 2024 mark-to-market (MTM) retirement plans accounting adjustments. As a result, FedEx is unable to provide a fiscal 2024 earnings per share or effective tax rate (ETR) outlook on a GAAP basis and is relying on the exemption provided by the Securities and Exchange Commission. It is reasonably possible that the fiscal 2024 MTM retirement plans accounting adjustments could have a material effect on fiscal 2024 consolidated financial results and ETR.
FedEx is revising its forecast for fiscal 2024 and now expects:
• Approximately flat revenue year over year, compared to the prior forecast of flat to low-single-digit-percent revenue growth;
• Earnings per diluted share of $15.10 to $16.60 before the MTM retirement plans accounting adjustments, compared to the prior forecast of $15.00 to $17.00;
• Earnings per diluted share of $17.00 to $18.50 before the MTM retirement plans accounting adjustments after also excluding costs related to business optimization initiatives, compared to the prior forecast of $16.50 to $18.50;
• Permanent cost reductions from the DRIVE transformation program of $1.8 billion;
• ETR of approximately 25% prior to the MTM retirement plans accounting adjustments; and
• Capital spending of $5.7 billion, with a priority on investments to improve efficiency, including fleet and facility modernization, network optimization and automation.
These forecasts assume the company's current economic forecast and fuel price expectations, successful completion of the planned stock repurchases, and no additional adverse geopolitical developments. FedEx’s ETR and earnings per share
forecasts are based on current law and related regulations and guidance.
“Our first quarter results demonstrate the significant opportunity FedEx has to create long-term value for its stockholders,” said John Dietrich, FedEx Corp. executive vice president and chief financial officer. “The FedEx team is working tirelessly to implement its transformation initiatives, which are driving efficiencies and reducing expenses. As we look ahead to the rest of the year, my highest priority is building on this momentum to improve margins and returns.”
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of nearly $90 billion, the company offers integrated business solutions through operating companies competing collectively, operating collaboratively and innovating digitally as one FedEx. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its 520,000 employees to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit fedex.com/about.
Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks and Statistical Books. These materials, as well as a webcast of the earnings release conference call to be held at 5:30 p.m. EDT on September 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.
Certain statements in this press release may be considered forward-looking statements, such as statements regarding expected cost savings, the planned consolidation of operating companies, future financial targets, business strategies, management’s views with respect to future events and financial performance, and the assumptions underlying such expected cost savings, targets, strategies, and statements. Forward-looking statements include those preceded by, followed by or that include the words “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends” or similar expressions. 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 successfully implement our business strategy and global transformation program and consolidate our operating companies into one organization, effectively respond to changes in market dynamics, and achieve the anticipated benefits of such strategies and actions while managing related risks; our ability to achieve our cost reduction initiatives and financial performance goals; the timing and amount of costs related to our global transformation program and other ongoing initiatives; damage to our reputation or loss of brand equity; changes in the business or financial soundness of the U.S. Postal Service or its relationship with FedEx, including strategic changes to its operations to reduce its reliance on the air network of FedEx Express; our ability to meet our labor and purchased transportation needs while controlling related costs; a significant data breach or other disruption to our technology infrastructure; the impact of a widespread outbreak of an illness or any other communicable disease or public health crises; anti-trade measures and additional changes in international trade policies and relations; the effect of any international conflicts or terrorist activities, including as a result of the current conflict between Russia and Ukraine; changes in fuel prices or currency exchange rates; our ability to match capacity to shifting volume levels; the effect of intense competition; an increase in self-insurance accruals and expenses; failure to receive or collect expected insurance coverage; our ability to effectively operate, integrate, leverage, and grow acquired businesses and realize the anticipated benefits of acquisitions and other strategic transactions; noncash impairment charges related to our goodwill and certain deferred tax assets; the future rate of e-commerce growth and levels of inventory restocking; evolving or new U.S. domestic or international laws and government regulations, policies, and actions; future guidance, regulations, interpretations, challenges, or judicial decisions related to our tax positions; legal challenges or changes related to service providers engaged by FedEx Ground and the drivers providing services on their behalf and the coverage of U.S. employees at FedEx Express under the Railway Labor Act of 1926, as amended; our ability to quickly and effectively restore operations following adverse weather or a localized disaster or disturbance in a key geography; any liability resulting from and the costs of defending against litigation; our ability to achieve or demonstrate progress on our goal of carbon-neutral operations by 2040; 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: Caitlin Adams Maier 901-434-8100
Investor Contact: Mickey Foster 901-818-7468
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
TO GAAP FINANCIAL MEASURES
First Quarter Fiscal 2024 and Fiscal 2023 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 first quarter fiscal 2024 and 2023 consolidated operating income and margin, net income and diluted earnings per share, adjusted first quarter fiscal 2024 FedEx Express and FedEx Ground segment operating income and margin and adjusted first quarter fiscal 2023 FedEx Express segment operating income and margin. These financial measures have been adjusted to exclude the effects of the following items (as applicable):
• Business optimization costs incurred in fiscal 2024 and 2023; and
• Business realignment costs incurred in fiscal 2023.
In fiscal 2023, FedEx announced DRIVE, a comprehensive program to improve the company’s long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments, lower our overhead and support costs, and transform our digital capabilities. We incurred costs associated with our business optimization initiatives in the first quarter of fiscal 2024 and fiscal 2023. These costs were primarily related to professional services and severance. Business optimization costs are included in Corporate, other, and eliminations, FedEx Ground, and FedEx Express. Additionally, we incurred costs associated with our business realignment activities in connection with the FedEx Express workforce reduction plan in Europe in the first quarter of fiscal 2023. These costs were related to certain employee severance arrangements. Costs related to business optimization initiatives and business realignment activities are excluded from our first quarter fiscal 2024 and 2023 consolidated and FedEx Express and FedEx Ground segment non-GAAP financial measures, as applicable, because they are unrelated to our core operating performance and to assist investors with assessing trends in our underlying businesses.
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. 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 financial 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 2024 Earnings Per Share and Effective Tax Rate Forecasts
Our fiscal 2024 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes fiscal 2024 mark-to-market (MTM) retirement plans accounting adjustments and estimated costs related to business optimization initiatives in fiscal 2024. Our fiscal 2024 effective tax rate (ETR) forecast is a non-GAAP financial measure because it excludes the effect of fiscal 2024 MTM retirement plans accounting adjustments.
We have provided these non-GAAP financial measures for the same reasons that were outlined above for historical non-GAAP measures. Costs related to business optimization initiatives are excluded from our fiscal 2024 EPS forecast for the same reasons described above for historical non-GAAP measures.
We are unable to predict the amount of the MTM retirement plans accounting adjustments, as they are significantly affected by changes in interest rates and the financial markets, so such adjustments are not included in our fiscal 2024 EPS and ETR forecasts. For this reason, a full reconciliation of our fiscal 2024 EPS and ETR forecasts to the most directly comparable GAAP measures is impracticable. It is reasonably possible, however, that our fiscal 2024 MTM retirement plans accounting adjustments could have a material effect on our fiscal 2024 consolidated financial results and ETR.
The table included below titled “Fiscal 2024 Earnings Per Share Forecast” outlines the effects of the items that are excluded from our fiscal 2024 EPS forecast, other than the MTM retirement plans accounting adjustments.
First Quarter Fiscal 2024
FedEx Corporation
| Operating | Income | Net | Diluted<br>Earnings | ||
|---|---|---|---|---|---|
| Dollars in millions, except EPS | Income | Margin | Taxes1 | Income2 | Per Share |
| GAAP measure | $1,485 | 6.8% | $345 | $1,078 | $4.23 |
| Business optimization costs3 | 105 | 0.5% | 24 | 81 | 0.32 |
| Non-GAAP measure | $1,590 | 7.3% | $369 | $1,159 | $4.55 |
FedEx Express Segment
| Operating | ||
|---|---|---|
| Dollars in millions | Income | Margin |
| GAAP measure | $205 | 2.0% |
| Business optimization costs | 10 | 0.1% |
| Non-GAAP measure | $215 | 2.1% |
FedEx Ground Segment
| Operating | ||
|---|---|---|
| Dollars in millions | Income | Margin |
| GAAP measure | $1,103 | 13.1% |
| Business optimization costs | 17 | 0.2% |
| Non-GAAP measure | $1,120 | 13.3% |
First Quarter Fiscal 2023
FedEx Corporation
| Operating | Income | Net | Diluted<br>Earnings | ||
|---|---|---|---|---|---|
| Dollars in millions, except EPS | Income | Margin | Taxes1 | Income2 | Per Share |
| GAAP measure | $1,191 | 5.1% | $279 | $875 | $3.33 |
| Business optimization costs4 | 24 | 0.1% | 6 | 19 | 0.07 |
| Business realignment costs5 | 14 | 0.1% | 3 | 11 | 0.04 |
| Non-GAAP measure | $1,229 | 5.3% | $288 | $905 | $3.44 |
FedEx Express Segment
| Operating | ||
|---|---|---|
| Dollars in millions | Income | Margin |
| GAAP measure | $174 | 1.6% |
| Business realignment costs | 14 | 0.1% |
| Non-GAAP measure | $188 | 1.7% |
Fiscal 2024 Earnings Per Share Forecast
| Dollars in millions, except EPS | Adjustments |
|---|---|
| Earnings per diluted share before <br> MTM retirement plans accounting <br> adjustments (non-GAAP)6 | |
| Business optimization costs | 620 |
| Income tax effect1 | (145) |
| Net of tax effect | 475 |
| Earnings per diluted share with adjustments <br> (non-GAAP)6 |
All values are in US Dollars.
Notes:
1 – Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction.
2 – Effect of “total other (expense) income” on net income amount not shown.
3 – These expenses were recognized at Corporate, other, and eliminations, as well as FedEx Express and FedEx Ground.
4 – These expenses were recognized at FedEx Corporate.
5 – These expenses were recognized at FedEx Express.
6 – The MTM retirement plans accounting adjustments, which are impracticable to calculate at this time, are excluded.
#
FEDEX CORP. FINANCIAL HIGHLIGHTS
First Quarter Fiscal 2024
(In millions, except earnings per share)
(Unaudited)
| Three Months Ended<br>August 31, | |||
|---|---|---|---|
| 2023 | 2022 | Percent Change | |
| Revenue: | |||
| FedEx Express segment | $10,085 | $11,127 | (9) |
| FedEx Ground segment | 8,420 | 8,160 | 3 |
| FedEx Freight segment | 2,291 | 2,723 | (16) |
| FedEx Services segment | 72 | 70 | 3 |
| Other and eliminations1 | 813 | 1,162 | (30) |
| Total Revenue | 21,681 | 23,242 | (7) |
| Operating Expenses: | |||
| Salaries and employee benefits | 7,785 | 7,859 | (1) |
| Purchased transportation | 5,036 | 5,767 | (13) |
| Rentals | 1,151 | 1,159 | (1) |
| Depreciation and amortization | 1,071 | 1,024 | 5 |
| Fuel | 1,101 | 1,822 | (40) |
| Maintenance and repairs | 824 | 904 | (9) |
| Business optimization and realignment costs | 105 | 38 | 176 |
| Other | 3,123 | 3,478 | (10) |
| Total Operating Expenses | 20,196 | 22,051 | (8) |
| Operating Income: | |||
| FedEx Express segment | 205 | 174 | 18 |
| FedEx Ground segment | 1,103 | 694 | 59 |
| FedEx Freight segment | 481 | 651 | (26) |
| Corporate, other, and eliminations1 | (304) | (328) | (7) |
| Total Operating Income | 1,485 | 1,191 | 25 |
| Other (Expense) Income: | |||
| Interest, net | (91) | (142) | (36) |
| Other retirement plans, net | 39 | 101 | (61) |
| Other, net | (10) | 4 | (350) |
| Total Other (Expense) Income | (62) | (37) | 68 |
| Income Before Income Taxes | 1,423 | 1,154 | 23 |
| Provision for Income Taxes | 345 | 279 | 24 |
| Net Income | $1,078 | $875 | 23 |
| Diluted Earnings Per Share | $4.23 | $3.33 | 27 |
| Weighted Average Common and | |||
| Common Equivalent Shares | 254 | 262 | (3) |
| Capital Expenditures | $1,290 | $1,284 | — |
1 – Includes the FedEx Office, FedEx Logistics, and FedEx Dataworks operating segments.
FEDEX CORP. CONDENSED CONSOLIDATED BALANCE SHEETS
First Quarter Fiscal 2024
(In millions)
| August 31, 2023 | ||
|---|---|---|
| (Unaudited) | May 31, 2023 | |
| ASSETS | ||
| Current Assets | ||
| Cash and cash equivalents | $7,055 | $6,856 |
| Receivables, less allowances | 10,207 | 10,188 |
| Spare parts, supplies, and fuel, less allowances | 631 | 604 |
| Prepaid expenses and other | 994 | 962 |
| Total current assets | 18,887 | 18,610 |
| Property and Equipment, at Cost | 81,992 | 80,624 |
| Less accumulated depreciation and amortization | 40,818 | 39,926 |
| Net property and equipment | 41,174 | 40,698 |
| Other Long-Term Assets | ||
| Operating lease right-of-use assets, net | 17,327 | 17,347 |
| Goodwill | 6,422 | 6,435 |
| Other assets | 3,766 | 4,053 |
| Total other long-term assets | 27,515 | 27,835 |
| $87,576 | $87,143 | |
| LIABILITIES AND COMMON STOCKHOLDERS'<br> INVESTMENT | ||
| Current Liabilities | ||
| Current portion of long-term debt | $351 | $126 |
| Accrued salaries and employee benefits | 2,365 | 2,475 |
| Accounts payable | 3,794 | 3,848 |
| Operating lease liabilities | 2,382 | 2,390 |
| Accrued expenses | 4,919 | 4,747 |
| Total current liabilities | 13,811 | 13,586 |
| Long-Term Debt, Less Current Portion | 20,145 | 20,453 |
| Other Long-Term Liabilities | ||
| Deferred income taxes | 4,450 | 4,489 |
| Pension, postretirement healthcare, and other benefit obligations | 3,021 | 3,130 |
| Self-insurance accruals | 3,583 | 3,339 |
| Operating lease liabilities | 15,338 | 15,363 |
| Other liabilities | 694 | 695 |
| Total other long-term liabilities | 27,086 | 27,016 |
| Commitments and Contingencies | ||
| Common Stockholders' Investment | ||
| Common stock, $0.10 par value, 800 million shares authorized | 32 | 32 |
| Additional paid-in capital | 3,800 | 3,769 |
| Retained earnings | 36,021 | 35,259 |
| Accumulated other comprehensive loss | (1,356) | (1,327) |
| Treasury stock, at cost | (11,963) | (11,645) |
| Total common stockholders' investment | 26,534 | 26,088 |
| $87,576 | $87,143 |
FEDEX CORP. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
First Quarter Fiscal 2024
(In millions)
(Unaudited)
| Three Months Ended<br>August 31, | ||
|---|---|---|
| 2023 | 2022 | |
| Operating Activities: | ||
| Net income | $1,078 | $875 |
| Adjustments to reconcile net income to cash provided by operating activities: | ||
| Depreciation and amortization | 1,071 | 1,024 |
| Other, net | 814 | 1,073 |
| Changes in operating assets and liabilities, net | (733) | (1,365) |
| Net cash provided by operating activities | 2,230 | 1,607 |
| Investing Activities: | ||
| Capital expenditures | (1,290) | (1,284) |
| Purchase of investments | (2) | (35) |
| Proceeds from asset dispositions and other | 12 | 10 |
| Net cash used in investing activities | (1,280) | (1,309) |
| Financing Activities: | ||
| Principal payments on debt | (66) | (29) |
| Proceeds from stock issuances | 157 | 81 |
| Dividends paid | (318) | (299) |
| Purchase of treasury stock | (500) | — |
| Cash used in financing activities | (727) | (247) |
| Effect of exchange rate changes on cash | (24) | (98) |
| Net increase (decrease) in cash and cash equivalents | 199 | (47) |
| Cash and cash equivalents at beginning of period | 6,856 | 6,897 |
| Cash and cash equivalents at end of period | $7,055 | $6,850 |
FEDEX EXPRESS SEGMENT FINANCIAL HIGHLIGHTS
First Quarter Fiscal 2024
(Dollars in millions)
(Unaudited)
| Three Months Ended<br>August 31, | |||
|---|---|---|---|
| 2023 | 2022 | Percent Change | |
| Revenue: | |||
| Package Revenue: | |||
| U.S. Overnight Box | $2,188 | $2,316 | (6) |
| U.S. Overnight Envelope | 485 | 525 | (8) |
| Total U.S. Overnight | 2,673 | 2,841 | (6) |
| U.S. Deferred | 1,187 | 1,287 | (8) |
| Total U.S. Package Revenue | 3,860 | 4,128 | (6) |
| International Priority | 2,327 | 2,897 | (20) |
| International Economy | 1,021 | 707 | 44 |
| Total International Export Package | 3,348 | 3,604 | (7) |
| International Domestic1 | 1,024 | 974 | 5 |
| Total Package Revenue | 8,232 | 8,706 | (5) |
| Freight Revenue: | |||
| U.S. | 582 | 796 | (27) |
| International Priority | 553 | 888 | (38) |
| International Economy | 425 | 377 | 13 |
| International Airfreight | 32 | 41 | (22) |
| Total Freight Revenue | 1,592 | 2,102 | (24) |
| Other Revenue | 261 | 319 | (18) |
| Total Express Revenue | 10,085 | 11,127 | (9) |
| Operating Expenses: | |||
| Salaries and employee benefits | 3,983 | 4,050 | (2) |
| Purchased transportation | 1,374 | 1,478 | (7) |
| Rentals and landing fees | 536 | 577 | (7) |
| Depreciation and amortization | 538 | 513 | 5 |
| Fuel | 954 | 1,584 | (40) |
| Maintenance and repairs | 496 | 562 | (12) |
| Business optimization and realignment costs | 10 | 14 | (29) |
| Intercompany charges | 492 | 484 | 2 |
| Other | 1,497 | 1,691 | (11) |
| Total Operating Expenses | 9,880 | 10,953 | (10) |
| Operating Income | $205 | $174 | 18 |
| Operating Margin | 2.0% | 1.6% | 0.4 pts |
1 – International Domestic revenue relates to international intra-country operations.
FEDEX EXPRESS SEGMENT OPERATING HIGHLIGHTS
First Quarter Fiscal 2024
(Unaudited)
| Three Months Ended<br>August 31, | |||
|---|---|---|---|
| 2023 | 2022 | Percent Change | |
| PACKAGE STATISTICS | |||
| Average Daily Package Volume (000s): | |||
| U.S. Overnight Box | 1,227 | 1,285 | (5) |
| U.S. Overnight Envelope | 453 | 485 | (7) |
| Total U.S. Overnight Package | 1,680 | 1,770 | (5) |
| U.S. Deferred | 970 | 1,070 | (9) |
| Total U.S. Domestic Package | 2,650 | 2,840 | (7) |
| International Priority | 658 | 700 | (6) |
| International Economy | 333 | 260 | 28 |
| Total International Export Package | 991 | 960 | 3 |
| International Domestic1 | 1,742 | 1,706 | 2 |
| Total Average Daily Packages | 5,383 | 5,506 | (2) |
| Yield (Revenue Per Package): | |||
| U.S. Overnight Box | $27.43 | $27.73 | (1) |
| U.S. Overnight Envelope | 16.50 | 16.64 | (1) |
| U.S. Overnight Composite | 24.49 | 24.70 | (1) |
| U.S. Deferred | 18.81 | 18.50 | 2 |
| U.S. Domestic Composite | 22.41 | 22.36 | — |
| International Priority | 54.39 | 63.72 | (15) |
| International Economy | 47.14 | 41.81 | 13 |
| Total International Export Composite | 51.95 | 57.78 | (10) |
| International Domestic1 | 9.05 | 8.78 | 3 |
| Composite Package Yield | $23.53 | $24.33 | (3) |
| FREIGHT STATISTICS | |||
| Average Daily Freight Pounds (000s): | |||
| U.S. | 5,319 | 7,313 | (27) |
| International Priority | 4,390 | 6,042 | (27) |
| International Economy | 9,665 | 10,211 | (5) |
| International Airfreight | 703 | 956 | (26) |
| Total Avg Daily Freight Pounds | 20,077 | 24,522 | (18) |
| Revenue Per Freight Pound: | |||
| U.S. | $1.69 | $1.68 | 1 |
| International Priority | 1.94 | 2.26 | (14) |
| International Economy | 0.68 | 0.57 | 19 |
| International Airfreight | 0.70 | 0.66 | 6 |
| Composite Freight Yield | $1.22 | $1.32 | (8) |
| Operating Weekdays | 65 | 65 | — |
1 – International Domestic statistics relate to international intra-country operations.
FEDEX GROUND SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
First Quarter Fiscal 2024
(Dollars in millions)
(Unaudited)
| Three Months Ended<br>August 31, | |||
|---|---|---|---|
| 2023 | 2022 | Percent Change | |
| FINANCIAL HIGHLIGHTS | |||
| Revenue | $8,420 | $8,160 | 3 |
| Operating Expenses: | |||
| Salaries and employee benefits | 1,667 | 1,637 | 2 |
| Purchased transportation | 3,427 | 3,713 | (8) |
| Rentals | 423 | 390 | 8 |
| Depreciation and amortization | 273 | 246 | 11 |
| Fuel | 7 | 9 | (22) |
| Maintenance and repairs | 159 | 155 | 3 |
| Business optimization and realignment costs | 17 | — | NM |
| Intercompany charges | 508 | 490 | 4 |
| Other | 836 | 826 | 1 |
| Total Operating Expenses | 7,317 | 7,466 | (2) |
| Operating Income | $1,103 | $694 | 59 |
| Operating Margin | 13.1% | 8.5% | 4.6 pts |
| OPERATING STATISTICS | |||
| Ground Commercial Operating Weekdays | 65 | 65 | — |
| Home Delivery and Economy Operating Days | 91 | 91 | — |
| Average Daily Package Volume (000s)1: | |||
| Ground Commercial | 4,479 | 4,368 | 3 |
| Home Delivery | 3,846 | 3,912 | (2) |
| Economy | 736 | 730 | 1 |
| Total Average Daily Package Volume | 9,061 | 9,010 | 1 |
| Yield (Revenue Per Package) | $11.80 | $11.48 | 3 |
1 – FedEx Ground Commercial average daily package volume is calculated on a 5-day-per-week basis, while Home Delivery and Economy average daily package volumes are calculated on a 7-day-per-week basis.
FEDEX FREIGHT SEGMENT FINANCIAL AND OPERATING HIGHLIGHTS
First Quarter Fiscal 2024
(Dollars in millions)
(Unaudited)
| Three Months Ended<br>August 31, | |||
|---|---|---|---|
| 2023 | 2022 | Percent Change | |
| FINANCIAL HIGHLIGHTS | |||
| Revenue | $2,291 | $2,723 | (16) |
| Operating Expenses: | |||
| Salaries and employee benefits | 973 | 1,059 | (8) |
| Purchased transportation | 149 | 221 | (33) |
| Rentals | 68 | 65 | 5 |
| Depreciation and amortization | 107 | 106 | 1 |
| Fuel | 138 | 228 | (39) |
| Maintenance and repairs | 75 | 80 | (6) |
| Intercompany charges | 135 | 132 | 2 |
| Other | 165 | 181 | (9) |
| Total Operating Expenses | 1,810 | 2,072 | (13) |
| Operating Income | $481 | $651 | (26) |
| Operating Margin | 21.0% | 23.9% | (2.9 pts) |
| OPERATING STATISTICS | |||
| Operating Weekdays | 65 | 65 | — |
| Average Daily Shipments (000s): | |||
| Priority | 66.1 | 76.2 | (13) |
| Economy | 28.5 | 32.1 | (11) |
| Total Average Daily Shipments | 94.6 | 108.3 | (13) |
| Weight Per Shipment (lbs): | |||
| Priority | 989 | 1,054 | (6) |
| Economy | 876 | 938 | (7) |
| Composite Weight Per Shipment | 955 | 1,020 | (6) |
| Revenue/Shipment: | |||
| Priority | $353.01 | $369.60 | (4) |
| Economy | 407.99 | 423.59 | (4) |
| Composite Revenue/Shipment | $369.56 | $385.61 | (4) |
| Revenue/CWT: | |||
| Priority | $35.71 | $35.06 | 2 |
| Economy | 46.59 | 45.16 | 3 |
| Composite Revenue/CWT | $38.71 | $37.82 | 2 |