Federal Express 2000 Annual Report Download - page 31

FedEx
Corp.
29
The following table provides a reconciliation of reportable segm ent revenues, depreciation and amortiza-
tion, operating incom e and segment assets to FedEx’s consolidated financial statem ent totals:
FedEx FedEx Consolidated
In thousands Express Ground Other Total
Revenues
2000 $15,068,338 $2,032,570 $1,156,037 $18,256,945
1999 13,979,277 1,878,107 916,086 16,773,470
1998 13,254,841 1,710,882 907,087 15,872,810
Depreciation and amortization
2000 $ 997,735 $ 99,140 $ 57,988 $ 1,154,863
1999 912,002 82,640 40,476 1,035,118
1998 844,606 79,835 39,291 963,732
Operating incom e
2000 $ 899,610 $ 225,812 $ 95,652 $ 1,221,074
1999 871,476(1) 231,010 60,600 1,163,086
1998 836,733 171,203 2,724(2) 1,010,660
Segment assets
2000 $ 9,740,539 $1,057,519 $ 729,053 $11,527,111
1999 9,115,975 896,723 635,513 10,648,211
(1) Includes $81,000,000 of strike contingency costs. See N ote 16.
(2) Includes $74,000,000 of m erger expenses.
The projected benefit obligation, accumulated
benefit obligation, and fair value of plan assets for
the pension plans with accum ulated benefit obli-
gations in excess of plan assets were $177,900,000,
$126,300,000 and $2,700,000, respectively, as of
May 31, 2000, and $201,700,000, $172,800,000 and
$2,600,000, respectively, as of May 31, 1999. The
m inim um pension liability and corresponding
intangible asset recognized in the balance sheet at
May 31, 1999, relate principally to the collective
bargaining agreem ent between FedEx Express and
the FPA. During 2000, FedEx obtained the necessary
approvals to fund a substantial portion of these
benefits in the qualified pension plan, and the mini-
m um liability and related intangible asset have
been reduced accordingly.
FedEx Express’s future medical benefit costs were
estimated to increase at an annual rate of 8.5% dur-
ing 2001, decreasing to an annual growth rate of
6.3% in 2006 and thereafter. Future dental benefit
costs were estimated to increase at an annual rate
of 7.5% during 2001, decreasing to an annual
growth rate of 6.3% in 2006 and thereafter. FedEx
Express’s cost is capped at 150% of the 1993
em ployer cost and, therefore, will not be subject to
m edical and dental trends after the capped cost is
attained, projected to be in 2001. A 1% change in
these annual trend rates would not have a signifi-
cant impact on the accumulated postretirem ent
benefit obligation at May 31, 2000, or 2000 benefit
expense. Claim s are paid as incurred.
PROFIT SHARIN G PLANS. The profit sharing
plans cover a m ajority of U.S. employees age 21 and
over, with at least one year of service with FedEx as
of the contribution date. The plans provide for dis-
cretionary em ployer contributions, which are
determ ined annually by the Board of Directors.
Profit sharing expense was $125,300,000 in 2000,
$137,500,000 in 1999 and $124,700,000 in 1998.
Included in these expense amounts are cash distri-
butions m ade directly to em ployees of $39,100,000,
$46,800,000 and $43,100,000 in 2000, 1999 and
1998, respectively.
NOTE 12: BUSINESS SEGMENT INFORMATION
FedEx Corporation is a global transportation and
logistics provider prim arily com posed of FedEx
Express, the world’s largest express transportation
com pany, and FedEx Ground, a ground small-package
carrier. Other operating companies included in the
FedEx Corporation portfolio are FedEx Logistics, a
contract logistics provider; FedEx Custom Critical,
a critical-shipm ent carrier; FedEx Trade N etworks, a
global trade services company; and Viking,
a regional less-than-truckload freight carrier operat-
ing principally in the western United States. Other
also includes certain unallocated corporate item s.
FedEx has determined its reportable operating seg-
m ents to be FedEx Express and FedEx Ground,
both of which operate in single lines of business.
FedEx evaluates financial performance based on
operating incom e.