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FedEx Corporation 2000 Annual Report

Table of contents

  • Page 1
    FedEx Corporation 2000 Annual Report

  • Page 2
    ...-critical delivery (formerly Roberts Express) Customs brokerage and trade facilitation solutions After two years as FDX Corporation, we have adopted a new name that, we believe, more accurately reï¬,ects our corporate identity: FedEx Corporation, the parent company for the FedEx family of services...

  • Page 3
    ...s Lon g-term debt C om m on stock h olders' in vest m en t 2000 $18,256,945 1,221,...243 $10,648,211 1,374,606 4,663,692 + 8 +30 + 3 FedEx (1) N et in com e plu s depreciat ion an d am ort izat ... in terest , taxes, depreciat ion an...aircraft), whose use was obtained through long-term operating leases...

  • Page 4
    ...r cu stom ers n ow have one "touch point" to connect with the full range of FedEx services - one sales rep, one tollfree custom er service line, one Web site, one custom er autom ation platform and, soon, one account num ber and one invoice. Ju st as we did in FY99 - w h en we overcam e sign ifican...

  • Page 5
    ... Saturday delivery. For ou r cu stom ers, ou r diversified port folio st rat egy is t h e righ t approach , offerin g t h e righ t FedEx service at t h e righ t t im e an d t h e righ t price. > A t t ract n ew b u sin ess from sm all an d m ed iu m -siz ed cu stom ers. Our sales integration plan...

  • Page 6
    ...logist ics solu t ion s t h at en su re t im ely order fu lfillm en t . An d FedEx is posit ion ed righ t at t h e h eart of t h is t ren d. Wit h ou r u n m at ch ed global ph ysical n et work an d ou r state-of-t h e-art in form at ion n et work , FedEx h elps ou r cu stom ers bridge t h e e-world...

  • Page 7
    ... from su ppliers in t h ose cou n t ries t h rou gh t h e com pan y's N ort h Am erican wareh ou ses an d on to t h e en d cu stom ers. Bu t t h ree week s is a lifet im e in an in du st ry w it h h igh obsolescen ce rates. Wit h a FedEx solu t ion , t h e com pan y cu t it s order-t o-delivery t im...

  • Page 8
    ... to reallocate fu n ds to ot h er grow t h opport u n it ies like FedEx G rou n d, w h ich sign ifican t ly expan ded t h e capacit y of it s prim ary bu sin ess-t o-bu sin ess grou n d service, an d began t h e FedEx H om e D elivery rollou t . > Im proved cash flow Wit h EBIT DA in creasin g 9% to...

  • Page 9
    ... m , Increased prices caused fuel expense to increase by $273 m illion in 2000. In respon se to h igh er fu el cost s, several of ou r su bsidiaries im plem en t ed fu el su rch arges du rin g 2000. At Federal Express C orporat ion (" FedEx Express" ), t h e C om pan y's largest bu sin ess segm en...

  • Page 10
    ... h alf of 2000. FedEx cu rren t ly h as jet fu el h edges in place to fix t h e price of approxim at ely on e-t h ird of t h e an t icipated jet fu el u sage for 2001 an d an t icipates retain in g it s fu el su rch arge u n t il su ch t im e as fu el cost s h ave declin ed for a su st ain ed period...

  • Page 11
    ... u es In 2000, total package reven u e for FedEx Express i n c re a s e d 8 % , p r i n c i p a l l y d u e t o i n c re a s e s i n international package volum e and yield. List price in creases, in clu din g an average 2.8% dom est ic rate in crease in M arch 1999, t h e fu el su rch arges im plem...

  • Page 12
    ... t h e corporate realign m en t an d reorgan izat ion of t h e sales, m arket in g an d in form at ion tech n ology fu n ct ion s. A 48% in crease in average fu el price per gallon h ad a n egat ive im pact of approxim ately $260 m illion on 2000 fuel costs, in clu din g t h e resu lt s of jet fu el...

  • Page 13
    ... n et work refin em en t , act ion s by ou r com pet itors, in clu din g capacit y flu ct u at ion s, jet fu el prices, regulatory conditions for aviation rights and the rate of dom estic and international econom ic growth. In t h e past t h ree years, t h e FedEx Express worldw ide aircraft fleet...

  • Page 14
    ...O t h er operat ion s in clu de FedEx G lobal Logist ics, In c. (" FedEx Logist ics" ), a con t ract logist ics provider; FedEx Custom Critical, Inc. ("FedEx Custom Critical"), a critical-shipm ent carrier; FedEx Trade N et work s, In c. (" FedEx Trade N et work s" ), a t rade services provider; Vik...

  • Page 15
    ...h ave determ in ed t h at t h ese operat in g leases h ave provided econ om ic ben efit s favorable t o ow n ersh ip w it h respect t o m arket valu es, liqu idit y an d aft er-t ax cash flows. In t h e fu t u re, ot h er form s of secu red financing m ay be pursued to finance FedEx Express's FedEx...

  • Page 16
    ... of changes in foreign currency exchange rates does n ot factor in a poten t ial ch an ge in sales levels or local cu rren cy prices. FedEx h as en tered in to jet fu el h edgin g con t ract s on beh alf of it s su bsidiary FedEx Express, w h ich are design ed to lim it it s exposu re to flu ct u at...

  • Page 17
    ... s expressed or im plied by such forward-looking statem en t s. Poten t ial risk s an d u n certain t ies in clu de, bu t are n ot lim ited to, econ om ic an d com pet it ive con dit ion s in t h e m arket s w h ere FedEx operates, m at ch in g capacit y t o volu m e levels an d ot h er u n certain...

  • Page 18
    ... an ce an d repairs Fu el O t h er 2000 $18,256,945 7,597,964 1,674,854 1,538,...OM E OT H ER IN C OM E (EXPEN SE) In terest , n et O t h er, n et 1,221,074 (106,060) 22,726 (83,334) 16 IN C OM E FROM C O N T IN U IN G O PERAT IO N S BEFO RE IN C OM E TAXES PROVISIO N FO R IN C OM E TAXES IN C OM...

  • Page 19
    ... eferred in com e taxes Prepaid expen ses an d ot h er Total cu rren t asset s PRO PERT Y AN D EQ U IPM EN T, AT C O ST Fligh t equ ipm en t Package h an dlin g an d grou n d su pport equ ipm en t an d veh icles C om pu ter an d elect ron ic equ ipm en t O t h er Less accu m u lated depreciat ion an...

  • Page 20
    ...en t s on debt Proceeds from debt issu an ces Proceeds from stock issu an ces D ividen ds paid Pu rch ase of t reasu ry stock O t h er, n et C ash u sed in fin an cin g act ivit ies C ASH AN D C ASH EQ U IVALEN T S C ash (u sed in ) provided by con t in u in g operat ion s C ash u sed in discon t in...

  • Page 21
    ... AND COMPREHENSIVE INCOME C om m on In t h ou san ds, except sh ares Stock BALAN C E AT M AY 31, 1997 $14,762 N et in com e - Foreign cu rren cy t ran slat ion adju st m en t , n et of deferred tax ben efit of $2,793 - - - Total com prehensive income Adju st m en t to con form C aliber System , In...

  • Page 22
    ... in g operat in g su bsidiaries' n am es were ch an ged: Form er N am e RPS, In c. FD X Logist ics Robert s Express N ew N am e FedEx G rou n d Package System , In c. FedEx G lobal Logist ics, In c. FedEx C u stom C rit ical, In c. Bran d N am e FedEx G rou n d FedEx Logist ics FedEx C u stom C rit...

  • Page 23
    ... s an d losses of FedEx's foreign operat ion s t h at u se local cu rren cies as t h e fu n ct ion al cu rren cy are accu m u lat ed an d report ed, n et of related deferred in com e taxes, as a com pon en t of accu m u lated ot h er com preh en sive in com e w it h in com m on st ock h olders' in...

  • Page 24
    ...of World Tariff, Lim ited, a prem ier sou rce of cu st om s du t y an d t ax in for m at ion arou n d t h e globe, for approxim at ely $8,400,000 in cash an d stock . T h is bu sin ess is operat in g as a su bsidiary of FedEx Trade N et work s. T h e excess of pu rch ase price over t h e est im ated...

  • Page 25
    ... as follows: M ay 31, In t h ou san ds Package h an dlin g an d grou n d su pport equ ipm en t an d veh icles Facilit ies C om pu ter an d elect ron ic equ ipm en t an d ot h er Less accu m u lated am ort izat ion 2000 1999 FedEx 23 Corp. $673,970 239,382 $673,779 239,376 62,510 $975...

  • Page 26
    ...h as n o par valu e. As of M ay 31, 2000, n on e of t h ese sh ares h ad been issu ed. NOTE 8: COMMON STOCKHOLDERS' INVESTMENT Stock Compensation Plans At M ay 31, 2000, FedEx h ad opt ion s an d awards o u t st a n d i n g u n d e r st o c k -b a s e d c o m p e n s a t i o n plan s described below...

  • Page 27
    ... periods varyin g from t wo to five years from t h eir date of award. Sh ares are valu ed at t h e m ark et price of FedEx's com m on st ock at t h e dat e of award. C om pen sat ion related to t h ese plan s is recorded as a redu ct ion of com m on stock h olders' in vest m en t an d is bein g am...

  • Page 28
    ... (credit ): D om est ic Federal State an d local Foreign $385,164 49,918 22,730 457,812 $267,471 32,839 36,543 336,853 In com e taxes h ave been provided for foreign operat ion s based u pon t h e variou s tax laws an d rates of t h e cou n t ries in w h ich FedEx's operat ion s are con du ct ed...

  • Page 29
    ... plan s at M ay 31, 2000 an d 1999, bu t did n ot m aterially affect pen sion cost in eit h er year. P O ST R ET IR EM EN T H EA LT H C A R E P LA N S. FedEx Express offers m edical an d den tal coverage to eligible U .S. ret irees an d t h eir eligible depen den t s. Vision coverage is provided for...

  • Page 30
    ...asset s Foreign cu rren cy exch an ge rate ch an ges C om pan y con t ribu t ion s Plan part icipan t con t ribu t ion s Ben efit s paid Fair valu e of plan asset s at en d of year FU N D ED STAT U S O F T H E PLAN S U n recogn ized act u arial gain U n recogn ized prior service cost U n recogn ized...

  • Page 31
    ... posed of FedEx Express, t h e world's largest express t ran sportat ion com pany, and FedEx Ground, a ground sm all-package carrier. Other operating com panies included in the FedEx Corporation portfolio are FedEx Logistics, a contract logistics provider; FedEx Custom Critical, a critical-shipm ent...

  • Page 32
    ...t s FedEx's reven u e by service t ype an d geograph ic in form at ion for t h e years en ded or as of M ay 31: In t h ou san ds REVEN U E BY SERVIC E T YPE FedEx Express: Package: U .S. overn igh t U .S. deferred In tern at ion al priorit y Freigh t : U .S. In tern at ion al O t h er 30 2000 1999...

  • Page 33
    ... $7,100,000 h ave been m ade toward t h ese pu rch ases. FedEx Express h as agreem en t s w it h t wo airlin es to acqu ire 53 D C10 aircraft (49 of w h ich h ad been received as of M ay 31, 2000), spare part s, aircraft en gin es an d ot h er equ ipm en t , an d m ain t en an ce services in exch an...

  • Page 34
    ...,000,000 from the insurance settlem ent and the release from certain related liabilit ies on a leased MD11 aircraft destroyed in an accident in July 1997. T h e ga i n w a s re c o rd e d i n o p e ra t i n g a n d n o n operating incom e in substantially equal am ounts. 32 FedEx in cu rred $88,000...

  • Page 35
    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To t h e Stock h olders of FedEx C orporat ion : We h ave au dited t h e accom pan yin g con solidated balan ce sh eet s of FedEx C orporat ion (a D elaware corporat ion ) an d su bsidiaries as of M ay 31, 2000 an d 1999, an d t h e related con solidated ...

  • Page 36
    ... t s an d O t h er O perat in g D ata 2000 1999 $16,773,470 1,163,086...cu rren t port ion 1,776,253 C om m on stock h olders' in vest m en t 4,785,243 OT H ER O PERAT IN G DATA FedEx Express: O perat in g week days 257 Aircraft fleet 663 FedEx G rou n d: O perat in g week days 254 Average fu ll-t im...

  • Page 37
    ... pan y PET ER S. WILLM OT T (1) C h airm an an d C h ief Execu t ive O fficer Willm ot t Services, In c. R et ail an d con su lt in g firm Au dit C om m it tee C om pen sat ion C om m it tee (3) In form at ion Tech n ology O versigh t C om m it tee ( ) * C om m it tee C h air (1) (2) FedEx 35 Corp...

  • Page 38
    ...ER Execu t ive Vice Presiden t an d C h ief In form at ion O fficer FedEx Express DAVID J. BRO N C Z EK Presiden t an d C h ief Execu t ive O fficer FedEx Ground DAN IEL J. SU...perat in g O fficer RO D G ER G . M ART IC KE Execu t ive Vice Presiden t FedEx Custom Critical R. BRU C E SIM PSO N ...

  • Page 39
    ... Copies of FedEx Corporation's Annual Report on Form 10-K (exclu din g exh ibit s), ot h er FedEx docu m en t s filed w it h t h e Secu rit ies an d Exch an ge C om m ission (SEC ) an d ot h er FedEx financial and statistical inform ation are available on FedEx's Web site at w w w.fedex.com . You...

  • Page 40
    FedEx Corporation 942 South Shady Grove Road Memphis, Tennessee 38120 www.fedex.com