Federal Express 1998 Annual Report Download - page 26

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P24
MESSAGE FROM THE CHIEF FINANCIAL OFFICER
Stockholders can expect to
benefit from growth trends
driving the multiple market
niches now served by FDX.
For each one of the FDX
companies, we will focus on
making appropriate
investments in the technol-
ogy and transportation
assets necessary to opti-
mize our enhanced profit
position in terms of earnings
performance and cash
flow. Our strict yield manage-
ment programs will
continue to support profit-
able volume growth.
We will manage the busi-
ness as a portfolio. As a
result, decisions on capital
investment, expansion of our
delivery and information
technology networks, and
service additions or
enhancements will be based
on achieving the highest
overall return on capital. In
addition, our collaborative
selling process will increase
revenues for the operating
companies through a tar-
geted program focusing on
high-yielding business.
While the birth of FDX was a
unique event in the trans-
portation industry, fiscal
year 1998 was, in many
ways, another step on a con-
tinuum of excellence – that
is, a continuation of the
financial performance, ser-
vice and technology innova-
tion, and global leadership
FedEx stockholders have
grown to expect.
The birth of FDX Corporation illustrates the financial synergies that can result when two
complementary organizations combine strengths under a shared vision.
The acquisition of Caliber System, Inc. by FedEx – a “pooling of interests” transaction – was
accretive to FedEx earnings in fiscal year 1998. The transaction included no goodwill charges,
produced a tax-free exchange of shares for Caliber stockholders, and left the FDX balance
sheet in robust health.
Alan B. Graf, Jr.
Executive Vice President
and Chief Financial Officer
FINANCIAL SECTION
97 98
REVENUES
(in billions)
(1)
97 98
EARNINGS
PER SHARE
33.3%
29.3%
97 98
DEBT TO TOTAL
CAPITALIZATION
$14.3
$15.9
$2.53
$3.91
(1) Earnings Per Share assumes dilution and excludes non-recurring items. See footnote (1) on page 25.