FedEx (FDX) 19 Jun 182018 Q4 Earnings call transcript

Good day, everyone, and welcome to the FedEx Corporation Fourth Quarter Fiscal Year 2018 Earnings Conference Call. Today's call is being recorded.

If you have any questions for the conference call, please e-mail them to ir@fedex.com. Only questions submitted by mail will be discussed on the call today. At this time, I will turn the call over to Mickey Foster, Vice President of Investor Relations for FedEx Corporation. ahead. go Please

This contact welcome send factors, call. And the and are be want full where Corporation's Corporation Certain Act. Securities results expressed quarter our our in a at fourth presentation forward-looking are accompanying strategic Good streamed being advantage may by Litigation is this which e-mail fourth to will statements. Safe take about quarter risks, uncertainties conference from fedex.com. website Preference your our forward-looking statements The of act. as are please such book and conference year. performance, earnings earnings considered all such the of your listeners the available or slides information. you slides include afternoon. website, on FedEx questions, call release, earnings replay future be and other Such given the slides could Questions to be one within name the desires the nature. address from subject projections Private forward-looking those to ir@fedex.com. to differ that for of regarding FedEx and materially which to meaning cause are I through will When welcome inquiries statements implied Reform statements and to of long-term call, provisions actual remind stat Harbor

GAAP the filings measures reconciliation call on press a website For the on and non-GAAP fedex.com our please Relations Please to directly the the most financial releases the at additional information of Investor refer of comparable to this portion measures. these refer factors, SEC. with discussed to for

Officer, and Counsel Mike CIO; VP, Ground; call FedEx Officer; Fred Freight. Dave and Bronczek, on Corporation; Express; Marketing Secretary; CEO on and President FedEx Chief FedEx Officer, and and of Smith General Rob Subramaniam, Graf, Chief President FedEx Mark Executive Maier, VP, VP, Executive Communications Henry VP share Allen, Don today and CEO Chairman; President Ducker, Executive quarter. and David Information Colleran, Smith, FedEx Services now, will the Sales are Fred of the his views FedEx CFO; Raj and Corporation; Chief Operating Carter, VP, us Executive And of Alan Joining Cunningham, President CEO and Executive

paying billion is are progress e-commerce modernization Mickey. volume, shipments. income you, FedEx FedEx our XXXX. balance and for and pricing, team discuss and good better business Freight by FedEx fiscal our year and delivered members margins fourth optimization and and job and our full more XXXX XXXX XXX,XXX growth and to business-to-business to worldwide efficient handling fiscal billion with FedEx results solid in increasing making capacity. with increasing Thank done an industrial XXXX, outlook and financial fiscal more for Welcome very posted than call well We're Express earnings revenue to in the improving beyond. of fiscal of improved $X.X environment congratulate for Ground me due the a growth the to operating towards operational let indeed. proud The quarter $X.X very of versus off are and

cash diminish for the ever. States. Our shareowners, challenges anticipated Having up, been at customers investing and benefits so at our team frankly, I've so our nationwide to future. unexpected, an returns than advantages. never all differentiated We're quite years now to our that, FedEx, At free flows, threats a to of deliver trade pick concerned, the ship margins, approximately edge not strategy lowering customers, ability we long-term sure barriers a and supports conveniently while of FYXX allow opportunity raising believe XX,XXX the street, about goods flow or exciting to of this leading and trade FedEx drop-off in as reap for committed FedEx technologies approach locations emerged and countries, year earnings, by and United creating members, among and will optimistic and sustainable success. do customers our We them. profitable increasing our and more two-way my competitive was remain however, of said

be for Whether call. best Finally, as for Freight more most has our to the the asked than let Mike model been Mike Ducker, mates, and This our he call me in field. and ever opportunity. lead years, extend most team the Europe, tell FedEx the people you he and and one corporation, this of of must wishes the seen I to each summer. leaders and I've Mike in answered has new outstanding President board, philosophy, of all or Americas, CEO, of Mike's personally he will last partner executives XX and importantly, retires me, service any our always that Asia, when the in is the truly been in profit

we're best to only the since we'll you, and you're Mike, lot. our a down going with you miss right retiring you So but road, live wishes see

Mike. So, to here’s you

me Alan with comments. Graf turn it his over that, to let for So

Thank you, Fred, and good afternoon, everyone.

quarter $X.XX by XX% year-over-year up adjusted share, were tax earnings benefits are results in and earnings release. operating driven the For per covered that improved the

the was margin margin quarter. last three operating All that Our adjusted transportation provided quarter targets achieved consolidated fourth operating we XX.X%. segments

with normal from Tax our April finished Turning Act year-over-year. pay to the our by XX% U.S. U.S. Cuts $XX.XX, an annual year, for Jobs date certain share the advancing benefits XXXX. of year to up the the people workers of of EPS for the October some that's more adjusted increases X, we & to invested We full in hourly

contributed X.X plans. billion domestic billion in shares were billion repurchased In $X.X FYXX. FYXX of our revenues. or X.X% for We capital tax-qualified we million approximately expenditures U.S. to $X.X $X Our pension

minutes have would pension new will results our explain Regarding a rules pensions, I to financial effect to for the like few accounting take on that FYXX.

non-operating elements including that All year-end the up make pension classified now adjustment. other mark-to-market service the expense only the as included pension operating be forward, in will Going cost will total expenses, other expenses. be

our cost million. in adjustments example, while For mark-to-market excluding FYXX and expense $XXX million our pension was $XXX other pension total was service

from no by on impact these rules, XX net impact income will negatively was there operating they about while So basis margin points. our new

years Of course, of conform once no year-over-year these not have be future. apples-to-apples foreseeable Since new our so be be pension FYXX. the for recast are will impact contributions will comparison rules, we to required quarter ERISA, an the to there plans under prior in first will primary fully funded starting

cost most a item a of result, the material our flows. has As cash a is non-cash expense modeling that effect when really service

This voluntary the FYXX, but This our annuity sheet. plan long sum all we largest contributions a in required during lower they follows U.S. cash billion single primary $X no will be level balance represents purchase at liabilities, pension changes volatility will a including and our MetLife. event our our are in design billion pension transaction While make an further both with lump the much transaction special $X.X derisking plans, to than we of settlements, a and to pension contributions design like contributed it our and to our strengthen comment approximately we history that in in from QX FYXX. on line activities, for liabilities the pension and the retirees. win the was of through I reduce shareholders our of sheet XX% executed remove transaction balance would also derisking

per targeting accounting $XX.XX is For and revenue mark-to-market X%, we're growth remember an plan of year-end, and $XX the diluted expenses before retirement the integration of excluding earnings also cost, of approximately to adjustments being reduced TNT operating approximately following targeting by FYXX, margin X.X%, FedEx Express that's service share.

retirement plan we're reoccur Additionally, TCJA benefits will an FYXX. higher XX% effective anticipating year not than adjustments end accounting due which is rate during our effective of rate FYXX to approximately tax impacts tax prior tax transactions and that mark-to-market from to

We the be lower rate to the FYXX of the earnings provision cash TCJA. Cash grow. improve XX% created will as capital our expect to flows U.S. tax than by statutory favorable expensing due rate

For and decline spending of will is about cash to be amortization to expected very projected strong $X.X billion flows. revenues. generate the expected to FYXX, X% $X slightly Capital approximately FedEx depreciation billion, is or

than to our by projected we primary the $X.XX plans quarter. share to million, that be for we to voluntary contributions dividend $XXX announced lower are Our and XX% FYXX Last we expenses in TNT significantly per FYXX. expect boosting integration pension be FYXX to are our week

are achieve confident income assuming improvement in versus FYXX economic that Express billion $X.X the to will operating and we FYXX, billion We current at growth tax of moderate rules. $X.X and accounting

in provide will marketplace. Raj more strengthening Now, for color forecast and our our position the

benefiting and provide is very from visible are is into some revenue industrial Globally, and outlook near commentary Overall cuts with segment and each Thank our favorable. multi-year industry business performance conditions gear growth and and spending sector outlook strong priorities. U.S. higher remains years discuss I then growth. capital global The becoming supporting after will has expanding. Alan. are market of Consumers our structured incomes. trends the shifted and labor three-speed economic economic on of our you, couple world in synchronous broader update remains a sentiment a The highs. again open and tax

global and U.S. another balance, a of and rates pace. to we growth On of slowing world runs are the expect growth. While strong Eurozone accelerates, through economic healthy Japan emerging continues year post the fastest the as momentum the

pricing transportation revenue, strategies to Sound performance investment. global increase volume few segment. slides fundamentals volumes success. business growth underpin place The next in is allow that manufacturing yield of us the clear grow and continued details It show sustained by portfolio our yields in remain show across to and

digit per revenue export U.S. continuing and by also excluding exchange fuel yield international and XX%, the volume balanced growth yield up from in commercial. QX, strong and fuel segment Ground yields primarily to impact XX% of and our due FedEx in home yield the increase growth increased package a yield delivery X% revenue and impact volume increased and at domestic each X% X% saw excluding X%. of X%. double double increased with volume Express digits respectively, Express For QX revenue XX% in growth package yield business, rate increased

Freight, X%. Excluding fuel, mainly revenue package by FedEx shipment X%, our increased driven per revenue efforts. increased per yield At quality

X%. driven shipment is growth rate revenue per shipment improvements. Excluding shipment stronger and ongoing up quality emphasis fuel, by was on per per revenue Revenue

new now portfolio Let discuss some enhancements fiscal growth year exciting drive 'XX. in me our the FedEx will that to help

global to leverage realignment transportation believe from to supply chain portfolio our solutions world effect, customers our global a of differentiated for enhance needs. benefit and around our business as portfolio rapidly the on for E-commerce becomes to FTN forwarding, continues global step First, leading chain networks FedEx It capabilities In recently scale. offer continue printing fulfillment XD the that the of air vast to and grow allows FedEx. capabilities multiplier the FedEx. the forced cross-border the supply of customized we market us Trade very ocean is services, and a solutions array across positive and we capabilities, including full for that we

We've the expands territories. which Mailing capabilities to XX% more enrollments quarter, were year. in countries than segment. FedEx we the delivery year PXP experienced options e-commerce within in Delivery PXP Total last-mile the delivery the last new market manager of during further especially platform, also the usage cross-border FedEx growth During of significant acquired Limited, provides Manager and 'XX. last unique up XXX year-over-year fiscal

in We now countries are have been expanding world's GDP. the XX% FedEx Delivery representing of Manager and internationally, XX

FedEx more countries flexibility East, management unique in in Latin with brings for returns 'XX. our added significantly visibility, locations. fiscal our America and will consumers the returns to expanded we and returns our enable and e-tailers new through efficiency have technology E-commerce Additional be and Asia office Middle also year

of expectations pickup our have We peak our packaged will consumers. office season now upcoming time and months. for new continues anticipate peak over the all inside in program locations enhance next preparations Walmart FedEx more additional season. with This to the to years. FedEx U.S. plans We The is the stores We specific locations locations the we adding the office access inside of we stores XX FedEx continue the Walmart including closer XXX first to locations in office onsite about are expand for partners, upcoming services convenience the already ever deep for in retail program total upcoming opening with two Walgreens, FedEx a and announce FedEx and brings almost into peak to season and course customer's XX,XXX

final people that proud our match allowed and outstanding resources, deliver us the are season. prepare our to very which in collaboration processes operational of the forecast XX% holiday results use. the and even busiest forecasting close XXXX We service peak on days The position with effectively and to of were detailed the we customers ultimately and

Dave. to his remarks. now Let me David the turn Bronczek call for over

and everyone. Raj, afternoon you, good Thank to

operating income $XXX adjusted to or record $X which We year-over-year, report of Corporation, up billion are is proud QX XX%. for FedEx million

million Express, said, improve the operating we fourth transportation we $XXX record last companies you billion, they $X.X quarter to FedEx quarter, adjusted operating just all was Express expected growth by year-over-year drive profitability. adjusted in told U.S. operating was at at or margins helped XX%, and business, quarter international revenue our and a and three and hit better segment driven freight profit excellent margin FedEx we up did. their fourth Alan all had double-digits As by international which XX.X%. for At both services primarily growth operating

has of efficiency older, we begin efficient saw The aircraft improve will and fleet XXXs that additional improved in will this air you and in begin FYXX, additional phase release, are of modernization the As deliveries to of continue and air the program. reliability the in the new of network next fleet the in to significantly will deliveries of The additional the will with replace XXXs orders continuing our improve reliability aircraft. FYXX. the for the less

improves Now our continued global happy accelerating competitive On I'm significant network in and TNT we to at continued that X, integration dramatically our of capabilities our our expansion teams. global the with the our -- to world-class and two-year respect sales the June is mark posture. integration integration, that say

our TNT in is fully Our the our course, in this Systems capabilities packages to lanes year year and with the choice demonstrating power commitment. is value, of benefits European more FedEx us processing the our in the one lowest will operated all of the network speed, a were the The on X-day of from key year Express changes. billion service operating transit a 'XX, This the course, benefit be FYXX year to target of integrated that's allow ability $X.X in with The ahead of Express income TNT FedEx coverage sales of technology TNT us this or FYXX's and provide original time road example more teams flow to we X-Day XXXX, more over for driver of improvement and customers. a operational planned schedule. legacy FedEx XXX June transit service previously of will integration $X.X Customers these year. between cost volumes tangible significant FedEx lanes and of fiscal step fiscal to In and results. of Express Europe. highest Express flow the as Economy a more remains to network billion These successful launched integration in

$XXX achieved Now up XX.X%. quarter $XXX operating an operating of margin record FedEx Ground fourth XX% also profit of with year-over-year or growth and million percentage double-digit revenue million, in

an gave balanced Freight record with many profit FedEx reduced FedEx also We optimizing volume improvement Ground matched and drive long-term quarter revenue profitability. million profit last XX%. greater We've the exceeding much was yield quality to growth. revenue are operating costs. improving $XX as safety volume X.X%, that a while lowers and for our expansion Freight's guidance to network approach a up you investments capacity profitability growth. drive to amazing and our capital improves FedEx margin quarter. was in and pricing plans the in fourth modernizing show all better the through and we pricing continues and We're in areas revenue million, our strategies dramatically to $XXX growth of Freight's in operating

success are We in FYXX. Freight's very the to pleased FYXX, in forward performance continued look with

same Mickey and turn towards do FYXX. So And Foster. enhancing back over thing increasing in with while to of FYXX our that, we we cash I'll made expect service. it to margins, customer And in earnings, progress goals returns dramatically flows the

be will to questions. the to here, off answer given the submitted. Probably these now answer that were the people ball various So queue questions I

lot from Cowen Could is disruption? The first entrenched respectively. a long. is If or for Bronczek day too allow it all more to Hoexter war of on. a Dave business talk Ken such I'm trade Becker one since this going perhaps interrupt trade the on of and any of conversation questions BofA get topic Helane end & Dave? growth this, of a So it ask at the world bit shows Merrill Lynch, about a we take global to to we'll other was

those We to are will of items difficult high very believe global well disrupt. supply chains, established value be especially and

that to hopeful found. are of policy trade issues solutions, amenable We be course, will

are your our large the evolve. relatively at any a helped to assets really such reposition answer trade global Hopefully, However, patterns it now scale to I our is for should us networks, question. around world and easy all

two, will the items that July the number Raj? on tariffs is expedited of Question this under Associated Are seeking U.S. X? China fall from Press. new from customers imports

seen not these have new any changes behavior to customer tariffs. US related We the directly in

is again, only revenues. very of a sort not for questioning really this , question since portion very, commodities small sales of surprising, the you of in Hoexter leading watch Raj. China Now tech especially our indicator, exports, make there, same Ken the U.S. our up still line Asia-U.S.

answer we technology is key highly clearly to one it's monitor that The exports. sales correlated indicators question that and the Asia-U.S. of is, to yes, very the

have cycle you technology really investment industrial helped Asian the of capital to the to get back the goods, trend. cellphone to the in exports. noise, and growth product they out ongoing months, underpin the have And in Now, in recent underlying some

is a Sterling the from Bernstein Vernon is segment? of Seaport David each of and FedEx truck cost at question demand tightening market impacting here Global. So Kevin transportation How and

mentioned the earlier to very Raj in industrial continues demand. by consumer strong strength of Demand be production, as

least on the bit it. three Mike with has color Freight, points starting this, and then little and FedEx you background their and to who to then the Henry? give opco However, their have of presidents, effect David comments maybe probably to view at and to of Henry give a I'm going

with of unlimited it to truckload, These contracts has relationships course purchased support you we customer company XX scale importantly most and in our and the know, transportation has XXX% might to Company providers, industry-leading years United for be the drive but At the market surprised providing our warrant. since contracts with contract have rail, needs services, of FedEx flexibility the transportation options been Ground, virtually all entities also access as service Postal Service. States our is to as demands also our transportation

in providing add expansion seeing the demand We very sector. Yes. and on I'll best services industry. the strong service freight in that growth while just for remain focused we're disciplined our margin the

a growth shipments and with results again, were revenue the fourth is year And first X% with daily of an proof shipment robust X% we 'XX. on quarter most the IP really our perfectly correlated [ph] growth during production strong expect a closely LTL market, average while half As balanced number point, per growth. particularly industrial fiscal the

a translates that good into shipments. So growth in

Good representing is day. Dave Express. FedEx Cunningham This

We a third-party have any load. with issues securing not tuckinging experienced

market, FedEx adjusting? if that Does air global seasonality changed how believe This of e-commerce so of the Campbell freight is growth of Thompson Davis. are has David the Raj? the you

e-commerce indeed are the continues patterns. that have Yes, to global pounds still majority remember you traditional that carry and is we business-to-business follow of the seasonality such as to increasing, shipments, but vast

is that more importantly that is combined the capacity carriers perhaps, that with easy deployed by Bronczek capacity relatively market of network earlier the on think it commercial is makes I flex we so for fact huge Dave have required to demand. us now our it mentioned as that scale the

Cunningham I'll comes ask David Don we issue. from impact David? TNT you back Colleran perhaps to Have share cyber-attack recovered fully and with losses? million assume should FYXX? $XXX the of much How deal in the that all

and You services international year-over-year freight double-digit growth results quarter. we can revenue in past see our this package in experienced that the

been customer several sales, the months owe contributor, job freight thanks IT seeing who and a service, certainly to major outstanding of portfolio higher and Again, in TNT. from significantly of recovering growth over of a piece recovery the past professionals through remarkable we're done product we addition year-over-year traffic, this were an the that a the expanded rates business also certainly has attack. While major our of our have solid

resumed shown glad impacted customers We you that have through as went I'm growth noted, segments that business. in mention of period. also to as that our year-over-year greatly appreciate have difficult the the this And loyalty us have we we

Ground three are Henry. to adding here you give FedEx more volumes for Elaine FedEx of facilities, So much Ground, without can one, Becker questions we'll [ph] Cowen. grow Question how

are Diva to ISP those? do of Stifel. possible what of FedEx much model long-term, David left margins over Second, of from remember level David you full Nathan [ph] how Stifel. Henry, the for And of conversion Jerome is can Ground Ross and of all Ross

I think, I thanks. can,

and at peak. that we continue e-commerce. focused utilization investments America intently capacity is to led that the And profitability adding look if In year-to-date I to talked market North about network terms to on ways not based and on that everybody maximize the and sortation and trends as record flex probably network best package volume ground drive we automation automated world. capacity the by how margins, have by example modernizing and our say volume, each year existing in leveraging to most deliver to the expect growth of to us have able technology asset our needed automation. revenue to Concerning We're we would to has and handle by of enables volumes for strong continue us optimizing dynamics driven be in far the so

accelerating process. be terms recently the to expect conversion, sometime announced In that we we XXXX. ISP We've of were done late model calendar in that

IMO the of and freight changes in XXXX Raj? the in marine standards impact air Bernstein. demand [ph] Vernon pricing fuel Will David markets?

to of transportation to are Networks solutions what tell to will see this to the Plus, But pricing too customers. thanks It's early tell. to it's we demand; our air of the the business, a thanks in marine growing and point. be be FedEx global close developments will ocean please note, optimize the at on very has environment. freight XXXX any this that to Trade for position will It's our a kind prices impact material to perfect reduced probably which positive early too to implementation raise -- for bit and we'll sulfur see IMO a fuel great have fuel

heavy in mile? interested a David questions David freight. Bernstein of double-digits goods you be current our of Vernon annual packaged Ross Scott are Why such division? Research restraining And environment? not Would any question. of FedEx your margins margins? a LTL Couple strong investments last Freight And LTL Wolfe on similar in into that [ph] through Stifel. or of getting Group and has

let ask answer Mike So those me Ducker questions. to of most

of during First and the and would margin all, 'XX we're to like for with performance. team performance give shout pleased fiscal mates our their year great profit to out I a

Our operating income improved by XX% and the margin by XXX basis points.

that QX If basis, basis a on XX% and you take quarterly for points. it XXX was

pleased results. with Now while we're that, not we're with satisfied still those

Our but goal continued preparedness. margins growth compromise critical are our we which not we're remains double-digit to sustainable and future for going our believe investments

to continue we we market prepare technology and maintain the modernization ensure rapid better for in that position. of will supply to chains a us So invest leading

goods. the of already for last of and Bernstein, mile Freight, Vernon FedEx part the both goods [ph] question David Ground FedEx Second we at delivered volume through significant

our to is shipments, grows demand positioned FedEx outstanding as for heavier for larger service, networks flexibility believe those we of deliveries. and those on So provide and uniquely reach even

to see Specifically opportunities while margin leverage us will for we e-commerce in that plans market, create to support those and is do growing LTL, for we expansion. have and large opportunity trends

[ph] issues Raj? Nathan chain A plans? for turnaround can the and Sterling FedEx Global. Diva at at Raj; Seaport that detail Kevin question Jerome you the and supply

to customers, our it efforts this increase operating will These only time same we flexibility actions upgrading and lower technology. accelerating operating disclosure also the in at model covered we're streamline issue standardize XX not our profitability our and through Yes, service our May and for our X-K expenses. improves our and

for of I in business. excited a will as trade which As multiplier our we mentioned act about very realignment the entire the networks are opening, force FedEx

that. add to impairment supply the that on decided was two chain, simply that FedEx went just don't me I meaning mean, we a to the contracts; phones. any cell have there. Basic customer with strategic for model -- within goodwill type than excellent about problems we And issue different the to new group systemic gave Let had a just have working split phone second, the more repair reasons. business one model warranty repair, business we

to was believe Network operating putting will a office; tell the together have a of new chain with we of I'm all fit as have lot Networks now we been in Network. FedEx a it you, just out the I doing sea Trade NAFTA of a of under FedEx got Trade but this felt the custom chain the borders, is FedEx By about what -- I we from Raj is operating FedEx -- for related On add area, thought I said, pipeline a the States, forced from we've did kinds across companies our supply there. Basically, So critical broker as doing and moved things be why some companies our there going sort Raj more other do and sure into Express. going specialty it it. stuff that better I clear has that largest depo's a in color all a of fine. Networks FedEx fantastic multiplier would model that across OpCo's of parts Networks a will the with we Trade supply with basically interval we on FedEx be and mentioned case moving FedEx customs to that for Trade sea freight OpCo's. will the the is Ground, is freight forward and this. and and the United they we're mean, the FedEx things Freight contributor services question value-added cross-border and

number now So related turn to CapEx. financial we a questions of to

levels? assume it CapEx We have that? one Alan FYXX from FYXX fair take expenses, Ravi to if Shankar; given beyond and hub from that the will will the I'll new ask increase plains ongoing is and he in And

it's that driving the increase when revenues We're asset five whether that in going as expense productivity we flows, is reductions. Company, certainly we investing driver and going really price to continue opportunities going of next makes years, for not up as our improvements FYXX, TCJA are rate CapEx result and the of to Express. value going we're Obviously, capital less spike expensing long-term make is the present to to to mostly although of risky, invest grow moves; cash that good do continue case and and a with We need that operating to FYXX obviously our that. XXX% to and to the see greatly tax expense, from was -- acquisitions, and aircraft a tremendous benefited grow so or you're at in make our to opportunities the those acquisitions CapEx our those

the CapEx and the so easily outlook I reducing same say at some will be and ways now, able Ground cash at are won't and right still for a for innovative many managed. covered all sweating freight, our reduction be build in Ground, cash a to and lowering which -- they easily assets, productivity very we'll thing will revolutionary cost we improving stay managed We be X% hub significantly underway but time, And at of it has programs somewhat access will costs. long won't involves flows with our level it flow. have

What's telling of for and out vein, So happen Alan, going for up Vernon cash there? to year wants significant the cash flows David than a which our rate know what go in to [ph] which projection time. can free is of we coming same we've CapEx period been the here put as faster this is flow EBITDA

definition we that we're of going cash free No, a there different flow. out to put have because not

Our FedEx; very is strong, service of if EBITDA you but you're of the is pension one driving my cost the favorite particularly allocation. that at capital this consider subjects whole as concept will be

in trading stock where it's today, more, We've dividends. pretty fully think price with remind a at funded fully returns it's move. to XX% effectively shares we I'll an now just the you that I'd pension we're million done $XXX back with tremendous I over standpoint. good a shareholders. -- we've dividend very bought RISA think [ph] just managed based and I our hope we $XX past, from increased buyback effectively, balancing FYXX, our to that billion continued say in on since that XX.X of We very job of funded average was continue

as improving been we've And be suspect we'll what do we be opportunities our along. shareholder and will our and to credit continue I go our doing, total returns. balancing we'll we So ratios

answers Vernon's now overall domestic resulting to in free expect of revenue What improving? Group, Wolfe Research. investors BXC cash BXC? Raj? the with that should what basically margins Are package David percentage FedEx So about Scott is ramp question your do flow.

We BXC don't e-commerce BXC a of our is revenue revenues. that total you still provide specific small breakdown the percentage to of relatively margins or have but global remember,

put a strong to that, very all it's we business grow are excited fast we capabilities have having place you that about Now said the know profitably. in this and relative growing

asks the And Can There Sachs Goldman question outweigh XXXX, have million Huckster you Matthew still integration left from million expenses $XXX of we [ph] benefit is yet? Alan? TNT Ken XXXX? Does what's of after the review BofA-Merrill. a cost since [ph] the total in after in similar the integration question; expenses XXXX? Russell and acquisition of cost then, in $XXX integration

TNT anniversary. with years tremendous two nasty year past Recall, of learned and we've up a year almost a very amount. coming bit little also X we now suffered cyber-attack ago, Day on we're So a

our results going but more our much from be be that's at the invest productive be integration thought so bit because will little to flexible bad a higher we but a we're that we defenses had cyber-standpoint more and going expenses IT than more much and network. all are we'll originally tightening than to And than not anticipated

returns $XXX at we to our very substantially. going Not have the we FYXX go to a year. integration additional integration to that to enhancers step Additionally, is big of we're found million productivity increase say, as about worth going up are through when really

start, somewhere for will in have on we're great we'll good is us After be in. integration. key think to front the the terms place, a but this I to to 'XX year be the in and we're million of chicken that have around edges, FYXX is a left plans We that in off around year million meat $XXX $XXX fiscal going

retired? aircraft you to do will as asked, planes David expect to total stay airless new [ph] Cunningham? Weatherbee all total add Dave or capacity orders Citi Chris are Bronczek, of flat

very incremental off years United is Let bring totally back can replace great and do the States by out out. added thing MDXXs we've can we move to them We the these MDXX, along pick of few just here. like start old mostly them planes planes international and that; the done that, me the and about completely the saying airplanes we've

to On continue seeing use now, could we we capacity. we're add see hand, if like the growth other strong them to

So hold add have. just and we we currently can the capacity replace can or we and grow that

that, So Cunningham? David with

modernize would thing I in greater our emissions operational reduced network Dave we continue resulting flexibility. global only improved and to I think is, add it well, reliability, that covered the

have that operating of and XX% in [ph] OpCo is with answer at at long-term can the the our the in Sachs changes? margins goal accounting Russell level corporate is to [ph] our Matthew To and teams. still detention operating level margins corporate you Goldman asked achieve question yes,

one are Raj, you applied and -- is mile is technology, the last your think can entry? to to [ph], right? of seeing I I'd any Matthew Goldman the is taken heavy assets that's Raj? increase technology that or mode from Sachs. to okay. Russell hard outside being which the Are Here competition hard handle. delivery barrier term disrupt in

subject carried FedEx has definitely could to global mean, our And assets, it's built a to already the combine provides when delivery would to history you If of a assets being is combine encourage done I so, popular value of we the to the human we answer short fedex.com/dream. most where with trend the hard transportation. arguably on I video human and haven't answer that physical in every probably technology highly by press alone there the around question. technology a that you are that seeking. with be technology disruptor. real, watch and technology scenario away at our But network, real in conceive is get customers how our the extensive conversations the propositions a

got the will you? for Group Is Sterling while on to Raj, raise risk the you wants skewer rates? this know do and you a -- here, post office meaningfully Scott Kevin think So when we've

speculate we don't on do. can I think not what USPS might might or

However, will cost do the FedEx. mile to in to delivery years that continue of opportunity which be we the come an believe last for will increase

is Helene strike contingency plans? you Are discuss A question volume a Cowen. Becker to much UPS accommodate if [ph] you and How Bronczek? customers of strike? coming could Dave there of Majors Susquehanna of from Bascom to UPS

question. a it's timely Obviously,

business for actually very we about issues never do their However, competitor's I considerations. comment important something customers that our our or want is to say though.

provide would capacity, there a only if have consider service, alternatives there customers. continue other and will -- to for our customers if other then need, is capacity, We then, for we additional is outstanding only we

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technology innovation So what next talk the from are How Carter, first Morgan; Brain look chain the like? want you viability to test commercial drone Issenbec to does and chapter [ph] Rob two disclosed at to involvement sensors, block and those? small tracking least recently JP flights? close of of So about

world, in The across things and sure. the Yes, mobility, of of block logistics, Internet innovations of accelerating chain are it's sensor-based the those enterprise. impact connected autonomy; whether Things the all

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Research. Scott billion Alan, Wolfe expected, guidance last Group how just mentioned we're from that than higher than integration initially cost will be much? $X.X higher the saying Alan? of year;

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that. that's we I questions the all is [ph]; Shankar Ravi I have. about differ There here from that semi's we'll one think think Tesla

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it you. turn over So I to

your to Thank possible. we the address call Corporation, basis, your on Mark you. and those with streamline quarter analysts To In Rob Smith, our Remarks closing, strategic Subramaniam. Carter our an earnings questions management we Dave many and to by effective integrated strategies the the on on time briefed consolidated as enterprise as the understanding can earnings plan to with focus Fred financial continue Graf, most Raj will process will FedEx the first concentrate be Alan so team results. be and our investors. participants evolve strategic of Allen, questions improve September, Company of use we in enhance of format Beginning and answering to the long-term make call call and Bronczek,

financial simultaneously and those call. more And also around We in to XX-Q to possible, supplemental on as as of the post-recurring will rather interest will offer topics we investors file context information consolidate our earnings and questions. addressing with operating details many our release than similar the results also address

We about are optimize you to investors. Investor FedEx. earnings fourth our FedEx confident you if free with questions time the have you quarter call. for your participation these Feel team, conference changes the anyone will the Corporation's Thank Relations very in call additional on much. Thank

your Once that for for conclude does you today. again, our participation. Thank conference