Federal Express 2006 Annual Report Download - page 85

Download and view the complete annual report

Please find page 85 of the 2006 Federal Express annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

As of May 31, 2006, our reportable segments included the follow-
ing businesses:
FedEx Express Segment FedEx Express
FedEx Trade Networks
FedEx Ground Segment FedEx Ground
FedEx SmartPost
FedEx Supply Chain Services
FedEx Freight Segment FedEx Freight
FedEx Custom Critical
Caribbean Transportation Services
FedEx Kinko’s Segment FedEx Kinko’s
FedEx Services provides customer-facing sales, marketing and
information technology support, primarily for FedEx Express and
FedEx Ground. The costs for these activities and certain other
costs such as corporate management fees related to services
received for general corporate oversight, including executive offi-
cers and certain legal and finance functions, are allocated based
on metrics such as relative revenues or estimated services pro-
vided. We believe these allocations approximate the cost of
providing these functions.
In addition, certain FedEx operating companies provide trans-
portation and related services for other FedEx companies outside
their reportable segment. Billings for such services are based on
negotiated rates, which we believe approximate fair value, and
are reflected as revenues of the billing segment. FedEx Kinko’s
segment revenues include package acceptance revenue, which
represents the fee received by FedEx Kinko’s from FedEx Express
and FedEx Ground for accepting and handling packages at FedEx
Kinko’s locations on behalf of these operating companies.
Package acceptance revenue does not include the external
revenue associated with the actual shipments. All shipment rev-
enues are reflected in the segment performing the transportation
services. Intersegment revenues and expenses are eliminated in
the consolidated results but are not separately identified in the
following segment information as the amounts are not material.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
83
The following table provides a reconciliation of reportable segment revenues, depreciation and amortization, operating income (loss)
and segment assets to consolidated financial statement totals for the years ended or as of May 31 (in millions):
FedEx FedEx FedEx FedEx
Express Ground Freight Kinko’s Other and Consolidated
Segment Segment Segment Segment (1) Eliminations (2) Total
Revenues
2006 $21,446 $5,306 $3,645 $2,088 $(191) $32,294
2005 19,485 4,680 3,217 2,066 (85) 29,363
2004 17,497 3,910 2,689 521 93 24,710
Depreciation and amortization
2006 $ 805 $ 224 $ 120 $ 148 $ 253 $ 1,550
2005 798 176 102 138 248 1,462
2004 810 154 92 33 286 1,375
Operating income
2006(3) $ 1,767 $ 705 $ 485 $ 57 $ – $ 3,014
2005(4) 1,414 604 354 100 (1) 2,471
2004(5) 629 522 244 39 6 1,440
Segment assets(6)
2006 $14,673 $3,378 $2,245 $2,941 $(547) $22,690
2005 13,130 2,776 2,047 2,987 (536) 20,404
2004 12,443 2,248 1,924 2,903 (384) 19,134
(1) Includes the operations of FedEx Kinko’s from the formation of the FedEx Kinko’s segment on March 1, 2004.
(2) Includes the results of operations of FedEx Kinko’s from February 12, 2004 (date of acquisition) through February 29, 2004 (approximately $100 million of revenue and $6 million of oper-
ating income).
(3) Includes a $79 million one-time, noncash charge to adjust the accounting for certain facility leases ($75 million at FedEx Express).
(4) Includes $48 million related to the Airline Stabilization Act charge.
(5) Includes business realignment costs of $428 million in the FedEx Express segment, $1 million in the FedEx Ground segment and $6 million in Other and Eliminations.
(6) Segment assets include intercompany receivables.
The following table provides a reconciliation of reportable segment capital expenditures to consolidated totals for the years ended
May 31 (in millions): FedEx FedEx FedEx FedEx
Express Ground Freight Kinko’s Consolidated
Segment Segment Segment Segment Other Total
2006 $ 1,408 $ 487 $ 274 $ 94 $ 255 $ 2,518
2005 1,195 456 217 152 216 2,236
2004 592 314 130 36 199 1,271