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FedEx (NYSE: FDX)
This autumn 2023 Earnings Name
Jun 20, 2023, 5:00 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Members
Ready Remarks:
Operator
Good day, and welcome to the FedEx fiscal 12 months 2023 fourth-quarterearnings name All contributors shall be in a listen-only mode. [Operator instructions] Please word, this occasion is being recorded. I’d now like to show the convention over to Mickey Foster, vice chairman of investor relations.
Please go forward, sir.
Mickey Foster — Vice President, Investor Relations
Good afternoon and welcome to FedEx Corp.’s fourth-quarterearnings convention name The fourth-quarter earnings launch and stat e book are on our web site at fedex.com. This name and the accompanying slides are being streamed from our web site, the place the replay and slides shall be obtainable for about one 12 months. Becoming a member of us on the decision at this time are members of the media.
Throughout our question-and-answer session, callers shall be restricted to 1 query in an effort to permit us to accommodate all those that want to take part. I wish to remind all listeners that FedEx Corp. needs to make the most of the Secure Harbor provisions of the Personal Securities Litigation Reform Act. Sure statements on this convention name, resembling projections concerning future efficiency, could also be thought of forward-looking statements throughout the that means of the act.
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Such forward-looking statements are topic to dangers, uncertainties, and different components which might trigger precise outcomes to vary materially from these expressed or implied by such forward-looking statements. For extra data on these components, please seek advice from our press releases and filings with the SEC. Please seek advice from the Investor Relations portion of our web site, at fedex.com. for reconciliation of the non-GAAP monetary measures mentioned on this name to essentially the most immediately comparable GAAP measures.
Becoming a member of us on the decision at this time are Raj Subramaniam, president and CEO; Mike Lenz, government vice chairman and CFO; and Brie Carere, government vice chairman, chief buyer officer. And now over to Raj.
Raj Subramaniam — President and Chief Govt Officer
Good afternoon, everybody. Earlier than I begin my remarks, I first wish to acknowledge the upcoming retirement of Mike and his terrific contributions and accomplishments at FedEx over the past 18 years. Mike was named CFO in March of 2020, and I am grateful for his management over the three years since then as we navigated a world pandemic and important change. As a consequence of his tireless work, FedEx is on strong footing as we execute the following section of our technique.
Above all, Mike has been buddy and a colleague of mine, and I want him all the easiest. Now, let me flip to my remarks for the quarter. Due to the laborious work of the FedEx group, we’ve demonstrated continued progress on our journey to rework into the world’s most versatile, environment friendly, and clever community. Within the fourth quarter, we launched and started getting ready for one FedEx.
On the identical time, we proceed to bend the fee curve by way of our DRIVE initiatives. This supported our fiscal 12 months 2023 earnings, which got here in above the midpoint of our March outlook regardless of continued comfortable demand and an unplanned year-end tax expense, which negatively impacted our earnings by $0.18 for the quarter. Our working efficiency stays strong. We’re coming into fiscal 2024 with a continued give attention to areas inside our management and a dedication to execute swiftly on our priorities.
This focus will help sustained revenue enchancment in FY ’24 by way of an setting that we anticipate to stay marked by demand challenges, significantly within the first half. Turning to Slide 6. I’ll begin with a snapshot of the quarter. Whole income within the fourth quarter was down 10% 12 months over 12 months as volumes declined with demand remaining comfortable throughout the market.
With this stated, the speed of quantity decline in Floor and Categorical improved sequentially. As anticipated, yield tendencies have been pressured in worldwide markets the place the provision demand balances have modified. We proceed to keep up our give attention to income high quality and are dedicated to our disciplined pricing strategy centered on the long run. Whereas we anticipate these pressures to persist, we do anticipate moderation all through the fiscal 12 months.
With our execution on a lot of value actions, we delivered adjusted working revenue of $1.8 billion. Our fourth-quarter efficiency enabled us to shut out the 12 months with an adjusted working margin of 6% and adjusted earnings per share of $14.96. Whereas our income declines have been according to the business, I am happy to notice that our flow-through efficiency continues to enhance, and we imagine it is the most effective within the business within the first quarter of the calendar 12 months. Past the headline numbers, our outcomes this quarter embed continued progress on our transformation.
I am happy to see our cost-out efforts take maintain, however I am additionally equally excited concerning the operational enhancements we’re driving as we construct the neatest logistics community on the planet. For instance, our market-leading image proof of supply is now obtainable to 90% of worldwide residential deliveries having launched in Europe earlier this month. Image proof of supply provides our clients visibility to their delivered cargo on the click on of a button, and it has led to a 14% discount in disputed supply circumstances and contributed to a 17% discount in name quantity in the US. Our four-hour estimated supply time window, which we’ve rolled out to 47 international locations, can be bettering the client expertise.
And at Floor, our dock modernization efforts are enhancing productiveness, serving to us run our docks smarter with new know-how and key knowledge insights. This features a new community working plan that makes use of machine studying to develop extra detailed and correct quantity forecasts. Floor remained a standout on this quarter because the group delivered working earnings of over $1 billion. For the primary time in firm historical past, the Floor group expanded margins regardless of decrease volumes within the second half.
This can be a clear indication that our DRIVE transformation is working and offers us confidence as we push ahead. And amid continued quantity stress, value per package deal this quarter elevated just one.9%. This was supported by a complete discount in working bills of $350 million as the corporate continued to handle staffing ranges successfully, benefited from retailer closures and consolidations, and decreased Sunday operations. These actions assist deliver Floor’s fourth-quarter working margin to 12.1%.
At Categorical, we’ve made important progress aligning prices with underlying demand. Our initiatives proceed to ramp, and we anticipate accelerating advantages within the upcoming fiscal 12 months. Demand dynamics, mixed with yield stress, drove a 13% decline in income at Categorical. This efficiency was usually according to our expectations coming into the quarter.
Within the face of those headwinds, the Categorical group was in a position to speed up value and productiveness efforts pushed by a mixture of structural and volume-related initiatives. The Categorical group decreased whole flight hours by 12% 12 months over 12 months and completely retired 18 plane, together with 12 MD-11s this quarter. The group can be planning to take one other 29 plane out of scheduled flying in fiscal 2024. As well as, we made glorious progress implementing structural value financial savings initiatives past flights, together with sure home effectivity initiatives.
This consists of the shift to a single each day dispatch of couriers, which achieved its goal of $50 million in fourth-quarter financial savings, in addition to accelerated hub productiveness measures. In Europe, we proceed to enhance operational execution throughout the area. Notably, we introduced the official opening of two of our hubs this quarter. In April, we reopened our worldwide highway hub in Duiven, Netherlands.
And this month, we opened our new state-of-the-art highway hub in Novara, Italy. These two amenities have enhanced their capabilities, enabled extra environment friendly routing, and improved our service on the continent. In mixture, whole working bills at Categorical have been down $1.1 billion within the quarter. The magnitude of the working margin decline has continued to slim sequentially as our initiatives take maintain.
At Freight, the group is concentrated on sustaining pricing self-discipline whereas flexing prices to guard profitability. The Freight group was in a position to scale back working bills by over $330 million within the fourth quarter. This shall be additional supported by our introduced plan to shut and consolidate 29 areas, which shall be accomplished by August. Consolidation will enhance service ranges whereas decreasing our prices to serve.
Additional, we’ve performed one other spherical of furloughs to match staffing with quantity ranges and are limiting hiring of salaried workers. Turning to Slide 7. We proceed to make important progress in taking prices out of our community, delivering a $2 billion year-over-year discount in working prices within the fourth quarter of FY ’23. This included extra successfully matching flying with demand, marking the primary quarter of this 12 months the place our flight hours declined greater than the underlying volumes.
Moreover, we proceed to aggressively handle headcount, together with attrition, to align our groups with the community modifications underway. We exceeded our goal with U.S. headcount down by about 29,000 in FY ’23. Additionally included in these value reductions are ramping advantages from the quite a few initiatives we’ve recognized throughout the 14 DRIVE domains.
Given our progress, we’re assured that we will ship on our earlier purpose for about $1.8 billion in value discount advantages from DRIVE this fiscal 12 months and $4 billion of everlasting value reductions in fiscal 12 months 2025. As we launched in April, between now and June of 2024, we shall be consolidating our working corporations into one unified group. One FedEx is the following step of this journey to appreciate our full worth potential. It aligns our group to 1 company construction that may facilitate the execution of our DRIVE transformation and can additional allow the work that is underway in Community 2.0.
Our work towards this purpose is already taking form. We’ve taken a big step ahead within the implementation of Community 2.0 with at this time’s announcement of the transformation of our Canadian operations. In April of 2024, we’ll start to transition all FedEx floor operations and personnel in Canada to FedEx Categorical, creating a really built-in and unified Canadian community. This unification is enabled by the character of the Canadian market the place the inhabitants is closely concentrated in just a few key geographies at the moment serviced by each opcos.
Consolidation will create important efficiencies all through the enterprise from first to final mile and throughout our help groups. We anticipate this modification in Canada to generate an annualized advantage of over $100 million upon completion in FY ’25. We introduced transitions in 20 markets, and Canada marks the primary large-scale implementation of Community 2.0, which builds of the learnings from our accomplished transitions in different geographies. To be clear, we’re not taking a one-size-fits-all strategy to our Community.
2.0 technique. Success relies on a mixture of fashions, together with workers and contracting with service suppliers as all are essential items of how FedEx strikes packages. Waiting for FY ’24, we’re coming into the 12 months with a transparent give attention to what’s inside our management in an underlying setting that is still dynamic throughout geographies. This backdrop is prone to stress income progress, significantly within the close to time period.
In consequence, we’re taking a prudent strategy to our full-year outlook that builds upon our strong end to FY ’23. We’ll additionally make progress on lowering capital depth by persevering with to give attention to the highest-return operational alternatives in an environment friendly method. After FY ’25, we’ve no further agency commitments on jet plane capex . As such, we anticipate our aircraft-related capex to lower after FY ’24 and be roughly $1 billion in FY ’26.
This capital allocation technique represents our strategy to a extra environment friendly and nimble community. We are going to proceed to search for further alternatives as we proceed with our plane modernization technique. We’ll deliver this self-discipline together with our improved flexibility and agility to make sure that we’re profitable given the unsure exterior setting. In closing, I am assured that the progress we’re making on our transformation will translate into improved margins, returns, and money movement all year long.
On the identical time, our dedication to driving operational enchancment will additional improve the client expertise. Now, let me flip it over to our chief buyer officer, Brie Carere, who will focus on market tendencies and our business technique in additional element.
Brie Carere — Govt Vice President, Chief Buyer Officer
Thanks, Raj, and good afternoon, everybody. As anticipated, the fourth-quarter working setting remained pressured, with year-over-year quantity declines and sequential moderation in yields throughout all transportation segments. We stay centered on income high quality and creating significant differentiation whereas managing by way of these dynamics. Let’s take every phase and switch now.
At FedEx Floor, fourth-quarter income was down 2% 12 months over 12 months, pushed by a 6% decline in quantity, partially offset by a 5% enhance in yield attributable to surcharges and product combine. We as soon as once more delivered robust service ranges and best-in-class market transits. Income at FedEx Categorical was down 13% 12 months over 12 months. Parcel quantity declines have been most pronounced in the US, and as well as, U.S.
freight kilos have been down over 25% attributable to a change in technique from a really giant buyer. Worldwide export volumes have been about 4% decrease 12 months over 12 months. FedEx Freight income was down 18% pushed by an 18% decline in volumes with income per cargo flat. This decline was pushed primarily by the slowdown out there and excessive stock ranges.
Though the pricing setting is moderating, our pricing self-discipline stays robust. Let’s transfer now to Slide 11. As anticipated, yield was pressured as year-over-year gas surcharge comparisons normalized. Buyer demand rebalanced between precedence and financial system companies with capability availability.
That is most notable within the Asian markets. In response, we stay centered on income high quality whereas managing our combine. At Floor and U.S. Home Categorical, yield improved 12 months over 12 months however at a moderating charge versus the earlier three quarters.
And as I discussed a second in the past, freight and freight yield was flat. Turning now to Slide 12. Our efforts to make the community essentially the most versatile, environment friendly, and clever community on the planet are taking maintain. We’re delivering higher service and outcomes for our clients, creating deep relationships and, after all, incremental income for FedEx.
These efforts are supported by a implausible portfolio of companies. Raj spoke earlier about the advantages we and our clients are seeing from the expanded rollout of image proof of supply and continued enhancements to the estimated time supply window. Later this 12 months, we plan to slim our four-hour supply window in lots of areas and supply new, enhanced mapping capabilities to assist clients monitor their package deal actions. Returns can be an space the place we’re underpenetrated, and so we’re specializing in progress.
Returns transfer by way of our community equally to B2B shipments and are extremely environment friendly in our community. Within the fourth quarter, we launched our new returns program, FedEx Consolidated Returns, which is accessible at FedEx workplace areas. For retailers, it is a low-cost e-commerce resolution for light-weight attire returns with end-to-end visibility. And for buyers, it is a handy, no-label, no-box drop-off expertise utilizing a QR code.
We’ve acquired glorious suggestions and sit up for persevering with to scale the answer in a short time. Lastly, final month, we launched FedEx Sustainability Insights, a cloud-based device that permits clients to view estimated carbon emissions for each particular person monitoring numbers and all their FedEx accounts. This platform marks the inspiration of a brand new suite of instruments for our clients. It permits clients to switch their carbon knowledge to their very own inner programs through an API.
The insights are additionally obtainable on-line for our small clients. Leveraging the huge cargo knowledge that we’ve and utilizing our AI and machine studying capabilities, we’re in a position to present data to our clients in a significant and actionable method. I’m very enthusiastic about these portfolio expansions and firmly imagine {that a} provide chain powered by FedEx is a aggressive benefit for our clients. I am happy with the group for his or her unwavering dedication to service and for delivering these progressive options.
Now, I’ll flip it over to Mike to debate the financials in additional element.
Mike Lenz — Govt Vice President, Chief Monetary Officer
Thanks, Brie. I will begin on Slide 14. The FedEx group demonstrated robust operational execution to shut out fiscal 2023. our transportation phase efficiency for the fourth quarter, beginning with Floor which continues to ship robust outcomes, working earnings elevated 18% and working margin expanded 210 foundation factors to 12.1% even with volumes down 6%.
Margin growth was supported by yield progress of 5% and powerful value controls pushed by lower-line haul expense. At Categorical, we’re seeing sequential working margin enchancment as our group continues to maneuver with urgency to drive structural and volume-related value enhancements. Adjusted working earnings declined 47%, and adjusted margin contracted 320 foundation factors to five%, as package deal volumes have been down 7% and yields declined 3% attributable to worldwide package deal yield stress. At Freight, the group continues to navigate a softening quantity setting.
Working earnings decreased 26% and working margin declined 210 foundation factors as shipments declined 18% and yield moderated. Our fourth-quarter outcomes embrace a number of noncash gadgets. We recorded an impairment cost of $70 million associated to the choice to completely retire from service 18 plane and 34 associated engines. The outcomes additionally embrace $47 million of goodwill and different asset impairment prices associated to the ShopRunner acquisition.
As well as, we incurred an unplanned tax expense of $46 million from a revaluation of sure overseas tax belongings. To offer further colour on current demand tendencies and what we’re planning for in our outlook, Slide 15 reveals trailing month-to-month quantity tendencies over the past six months for our main service classes. Quantity declines continued within the quarter. Whereas nonetheless destructive, Floor and U.S.
Home Categorical year-over-year package deal quantity tendencies improved into Might on a sequential foundation. As we glance to the primary quarter of FY ’24, we anticipate quantity declines to proceed to reasonable at Categorical and Floor as we lap the onset of softer volumes, whereas Freight will proceed to expertise stress. This brings me to our FY ’24 earnings outlook on Slide 16. We stay acutely centered on sustaining our robust business place, prioritizing income high quality and driving profitability enchancment by way of our effectivity initiatives supported by DRIVE.
These efforts are extra successfully aligning our value base with demand, lowering our everlasting prices, and growing the pliability of our community. We do anticipate exterior enterprise situations to stay difficult close to time period and there stays important uncertainty with respect to the timing of demand restoration, significantly within the again half of our fiscal 12 months. In consequence, we’re getting ready for a number of potential outcomes as we take into consideration the 12 months forward. This led us to ascertain an adjusted earnings per share outlook vary of $16.50 to $18.50 for fiscal 2024.
In a requirement setting that is still in keeping with what we’re at the moment experiencing, we anticipate flattish income for the complete 12 months and full-year adjusted earnings per share towards the low finish of the vary. Ought to macroeconomic situations help an bettering demand setting within the again half of the 12 months, we anticipate to see modest quantity enchancment for the 12 months. On this situation, we anticipate income to be up low single-digit proportion for the complete 12 months. This may additionally translate into better working leverage from our extra environment friendly community on the next income base, driving an outlook for full-year adjusted earnings per share nearer to the excessive finish of our vary.
The important thing exterior components that may decide the FY ’24 consequence are broader financial exercise in North America, Europe, and trans-Pacific commerce, stock restocking, and the event of e-commerce exercise as we proceed to distinguish our choices. At Categorical and Floor, we anticipate to construct on fourth-quarter value momentum and see adjusted margin enchancment in FY ’24. Freight margins will stay robust in FY ’24 however decrease than FY ’23 given important quantity reductions and yield stress. Turning to different facets of our outlook.
First, we anticipate a $230 million internet noncash pension headwind with a 330 million headwind beneath the road, offset by $100 million decrease pension service prices. Partially offsetting this below-the-line impression, we anticipate increased curiosity earnings on our money balances. Our projection for the full-year results of tax charge is roughly 25% previous to the mark-to-market retirement plan changes. We’re projecting $500 million of enterprise optimization value in FY ’24 related to our transformation.
We nonetheless anticipate a complete pre-tax spend of two billion by way of FY ’25, and the timing and quantity of those enterprise optimization bills could change as we revise and implement our plans. Shifting to the following slide. We wish to share how we’re fascinated about the working revenue issues embedded in our expectations for the complete 12 months. For illustrative functions, I will use adjusted EPS of $17.50, the midpoint of the outlook vary.
This situation relies on modest demand restoration resulting in restricted protection of base value inflationary pressures. As well as, we anticipate roughly $800 million of worldwide export yield stress as peak surcharges considerably diminish and product combine proceed shifting towards deferred choices. We additionally embrace a $500 million enhance in variable compensation to make sure our compensation package deal is aggressive. That is vital to retain key expertise as we execute our DRIVE transformation.
Importantly, although, these pressures are greater than offset by the $1.8 billion in value financial savings from DRIVE. Collectively, these illustrative parts result in FY ’24 adjusted working revenue of roughly $6.2 billion on the midpoint of our outlook. Shifting to Slide 18. We proceed our unwavering give attention to environment friendly and accountable capital allocation in our pursuit to drive shareholder returns.
For the 12 months, we ended with 6.8 billion in money, according to the place we started the 12 months, regardless of the difficult enterprise setting. We accomplish this by way of continued enchancment in money conversion cycles and internet working capital, together with decreased capital expenditures. Capital expenditures have been 6.2 billion, which represented 6.8% of income, versus 7.2% of income in fiscal 2022. FY ’23 capex was barely increased than our projection due largely to timing as easing provide chain constraints accelerated the supply of apparatus and different tasks.
With a slight acceleration of sure spend into FY ’23, we at the moment are projecting 5.7 billion in capex for FY ’24, which achieves our goal of lower than 6.5% capex as a proportion of income a 12 months sooner than we projected. Our fiscal 2023 adjusted free money movement of three.5 billion supported the repurchase of roughly $1.5 billion in inventory at a median share worth of roughly $163 a share. And we paid 1.2 billion of dividends. As well as, we funded 800 million in voluntary pension contributions.
Trying forward, we’ll proceed to spend money on engaging return enchancment initiatives. We’re dedicated to additional lowering capital depth. Capability investments at Floor will decline along with the decrease plane expenditures in Categorical Raj talked about, and we anticipate to repurchase an extra $2 billion of inventory in fiscal 2024. As beforehand introduced, we’re elevating our dividend by 10%, which will increase our adjusted payout ratio to over 30%.
These important stockholder returns replicate confidence in our continued execution of profitability and return enchancment initiatives. Lastly, we’re planning for $800 million of voluntary pension contributions to our U.S. plans, which have been 94.5% funded at year-end. In closing, we’re making progress on our transformation and stay centered on delivering shareholder worth by driving improved profitability, decreasing our capital depth, whereas persevering with to ship robust return of extra money to shareholders.
And with that, let’s open it up for questions.
Questions & Solutions:
Operator
Thanks. We are going to now start the question-and-answer session. [Operator instructions] And the primary query will come from Allison Poliniak-Cusic with Wells Fargo. Please go forward.
Allison Poliniak — Wells Fargo Securities — Analyst
Hello, Good night. I simply wish to return to the optimization in Canada. I do know you talked somewhat bit concerning the uniqueness of the area. Might you possibly speak to how does that impression the deployment of the optimization? After which, extra importantly, relative to, say, the U.S., how is the size completely different in Canada versus the U.S.
and the way that deployment would go ahead? Thanks.
Raj Subramaniam — President and Chief Govt Officer
Yeah, Allison, thanks to your query. After all, Canada is a novel market, and we’re taking a special strategy there than the market-to-market strategy we’re take — taking within the U.S. The Canadian inhabitants is closely concentrated in just a few key geographies, and the quantity is cut up roughly 50-50 between Categorical and Floor. So, we — you already know, we made the choice to consolidate every little thing underneath Categorical.
And it is the precise time to take these steps as a result of we’ll start in April 2024 and full by September of 2024. And, you already know, it is essential that you just perceive that that is distinctive to Canada as a result of we’ll take a market-by-market strategy in the US, and we’ll have a hybrid in the US between couriers and package deal handlers. However it’s an important step for us in Canada. It reduces our prices by about $100 million and, importantly, improves our portfolio and repair differentiation.
Thanks for the query, Allison.
Operator
The subsequent query will come from Jordan Alliger with Goldman Sachs. Please go forward.
Jordan Alliger — Goldman Sachs — Analyst
Yeah. Hello, thanks. You type of gave some parameters for the EPS vary, 16.50, 18.50, and talked about within the second half, you already know, what — what it might imply if the macro type of accelerated by way of the income facet. However I am type of curious, as you consider the primary half of the fiscal 12 months and the second half of the 12 months is away, might give a way, possibly on the midpoint, the proportion of EBIT in each halves? As a result of I think that it is extra of a second-half acceleration with the prices and the financial system.
Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
Certain, Jordan, that is Mike. So, let me — let me break that all the way down to a few components, you already know. First, the demand projection we’re speaking about for the second half of the 12 months can be relative to what we’ve been at the moment experiencing. So, that is the diploma of uncertainty there by way of how that flows going to the again half of the 12 months.
Within the entrance half of the 12 months, remember the fact that the numerous inflection that we noticed final 12 months was very late within the first quarter with that the majority pronounced at Categorical. So, we shall be lapping that for the primary quarter. And as well as, the trail-off in freight quantity accelerated into the mid to higher teenagers later within the — within the calendar 12 months as effectively largely within the fall when that began. So, you bought to consider the first-quarter issues there as you place the entire 12 months collectively and are modeling.
However by way of the outlook total, we’re not projecting any materials inflection within the — within the demand setting to — to get to that — that time there that you have referenced.
Operator
The subsequent query will come from Jon Chappell with Evercore ISI. Please go forward.
Jon Chappell — Evercore ISI — Analyst
Thanks. Good afternoon. Mike, simply sticking with you on Slide 17, the 300 million of income internet of value will increase, is there any approach to break down how a lot of that’s quantity versus worth? And whether it is extra sort of worth pushed, the two.7 billion of variable prices that you just took out this 12 months, how a lot do you could have including again in fiscal ’24?
Mike Lenz — Govt Vice President, Chief Monetary Officer
All proper, Jon, let me — let me take a swing at that right here. So, you may — look, the way in which we’ve framed that is that, you already know, our expectation is for continued however moderating underlying inflation. So, what we illustrated right here on this midpoint situation is constructive contribution past inflation amid a muted demand progress situation. Then, clearly, on prime of that, the DRIVE financial savings are better than the nonrecurring headwinds.
So, once more, you already know, as we talked about, we’ll see moderating quantity declines as we transfer by way of the 12 months right here. However on the identical time, the diploma of yield will increase that we noticed final 12 months aren’t going to proceed into — into this 12 months.
Operator
The subsequent query will come from Brian Ossenbeck with J.P. Morgan. Please go forward.
Brian Ossenbeck — JPMorgan Chase and Firm — Analyst
Hey, good night. Thanks for taking the query. For Brie, simply speak about any indicators of demand destruction or trade-down on this unsure setting. You talked about one buyer making a change, I feel it was inside U.S.
air freight, I imagine it was. After which, relatedly, are you able to simply speak about in case you’re seeing any diversions from the usnetwork that could be driving a few of these month-on-month incremental beneficial properties by way of at Floor and Categorical? Thanks.
Brie Carere — Govt Vice President, Chief Buyer Officer
OK, I feel I bought all that, Brian. I feel you had a few questions. Let’s begin with the final half first. So, I feel the query was are we seeing any profit from the uslabor negotiation.
So, the quick reply is, in This autumn, we didn’t see any materials profit due to these discussions, and we’ve not deliberate for any profit shifting into fiscal 12 months ’24. What I can let you know is that this has opened a whole lot of doorways. We’re having a whole lot of nice conversations with legacy UPS clients, and we really feel actually robust — we really feel actually good concerning the gross sales pipeline due to the robust worth proposition we’ve versus our major competitor. I feel the opposite query was concerning the combine and are we seeing any clients make trades throughout the portfolio.
The place we’re seeing that the majority pronounced and we’ve deliberate for it, to Mike’s level, it is — it is in our vary accounted for is in Asia. You already know, clearly, capability has come again relative to demand, and we did reopen our ID product within the fourth quarter that has carried out effectively. And truly, I am actually happy with the efficiency that I am seeing from the Asia-Pacific group and their gross sales pipeline, however that is the place we have seen the most important shift.
Operator
The subsequent query will come from Jack Atkins with Stephens. Please go forward.
Jack Atkins — Stephens, Inc. — Analyst
OK, nice. Thanks for taking my query. So, I assume possibly if I might, a two-parter right here. You already know, the steering itself, I feel the underside finish, Mike, if — the way in which you described it, if I understood it accurately, contemplates the working setting type of stays as is correct now.
If we have been to see issues deteriorate by way of simply underlying buyer demand, the corporate ready to possibly pull ahead among the DRIVE financial savings, you already know, from FY ’25 and FY ’24. Is that even actually, you already know, believable at this level? For those who possibly might speak about that. After which, for temporary, for the second a part of the query, is the $800 million of worldwide export yield stress that you just guys are going to be seeing this 12 months, is that going to completely seize type of getting again to type of pre-COVID ranges there. Once more, thanks for the two-parter however — however would admire the insights.
Mike Lenz — Govt Vice President, Chief Monetary Officer
All proper, Jack, we’ll offer you a particular cross then. So, on the — on the low in there, I characterised that flattish income 12 months over 12 months. So, that might be the low finish of our expectation. However by way of how we navigate and handle by way of that, the pliability that Raj talked about too that we’re incorporating into the community is permitting us to then react to that and modify and, once more, level to the great progress we have made and the outcomes you’ve got seen at Floor in the previous couple of quarters of fabric quantity declines, but improved margins and profitability.
And also you noticed within the final quarter right here, Categorical is mitigating the flow-through from the decreased demand. So, we’ll transfer with — with nice urgency ought to or not it’s beneath our vary of expectations.
Raj Subramaniam — President and Chief Govt Officer
And let me simply soar in earlier than I flip it on to Brie right here. So, it is a easy 1, 2, 3 method. At 1%, we’re on the low finish of the vary. At 2%, we’re within the center.
At 3%, we’re on the increased finish of the vary by way of income progress. Now, to transcend that, there’s — you already know, we turn out to be nonlinear by way of important operations leverage. So, yeah, DRIVE is working, and we’ve flexibility to tug further levers as we have to. Now, Brie.
Brie Carere — Govt Vice President, Chief Buyer Officer
Thanks, Raj. So, Jack, the quick reply is sure that we’ve deliberate for the $800 million impression this fiscal 12 months. After which, as we lap that impression, we will construct again from there. So, the quick reply is sure.
Operator
The subsequent query will come from Chris Wetherbee with Citigroup. Please go forward.
Chris Wetherbee — Citi — Analyst
Yeah, hello. Perhaps simply on the 1.8 billion of value financial savings, can we simply perceive the timing of that as we undergo fiscal ’24? How a lot of that comes, I assume, in 1Q or within the first half, and the way a lot ought to we type of unfold out over the remainder of the 12 months?
Mike Lenz — Govt Vice President, Chief Monetary Officer
Certain, Chris. That is Mike. The — you already know, the 1.8 billion, it’s a sequential construct as we undergo. We proceed with the self-discipline and rigor of the DRIVE framework.
So, as sure issues are carried out throughout the 12 months, you already know, we can’t get the complete run charge of that as a result of there’s a steady movement of initiatives. So, it might be — the least quantity of that 1.8 shall be within the first quarter and it’ll construct as we — as we undergo the 12 months, after which that offers us the — the run charge momentum then to get to the 4 billion absolutely by FY ’25.
Operator
The subsequent query will come from Brandon Oglenski with Barclays. Please go forward.
Brandon Oglenski — Barclays — Analyst
Sure, thanks, and good afternoon. Raj, I feel, in your ready remarks, you stated that you have already transitioned one thing like 20 markets to 1 FedEx operation, however not each market is identical. Are you able to elaborate on that somewhat bit? And the way is that this hybrid mannequin going to work within the states the place you do have overlapping contractors and probably worker drivers? Thanks.
Raj Subramaniam — President and Chief Govt Officer
Yeah, Brandon, the markets that we’ve transitioned over our — you already know, we’re in Alaska, we’re working by way of Hawaii, and there is sure different markets in Minneapolis. So, we’ve realized so much on this course of from know-how, from amenities, and folks. And the hybrid mannequin is that, in some markets, we can have couriers. And a few markets, we’ve — we’ve a contractor.
So, these issues shall be decided. They’re going to be data-driven, and so they’ll be labored by way of with our people-first, P — PSP philosophy, and they’ll — you already know, as I stated, we’re going to take somewhat little bit of time as we — as we advised you, however I am glad we’re making the progress we’re making already. Thanks.
Operator
The subsequent query will come from Tom Wadewitz with UBS. Please go forward.
Tom Wadewitz — UBS — Analyst
Yeah, good afternoon. So, Raj, if I check out what occurred final, you already know, sort of August, September the, you already know, consequence was fairly a bit completely different than you anticipated. I feel, you already know, your worldwide fell off fairly a bit, possibly another issues. And I feel the way in which you guided, wanting ahead, if we take a look at your ends in November quarter and February quarter, you already know, you set a bar that was achievable.
Perhaps you — you already know, possibly you simply executed somewhat higher. How do you consider the steering that you just’re giving us for fiscal ’24? You already know, you’ve got talked concerning the completely different macro assumptions and income, however is there some aspect of getting a conservative bar the place you possibly can probably do higher on value, or possibly pricing is available in a bit higher? You already know, simply sort of reflecting what appeared to be a sample of giving your self somewhat little bit of room to — you already know, to overachieve within the final couple of quarters? Thanks.
Raj Subramaniam — President and Chief Govt Officer
Tom, firstly, let me say this a lot. As I stated in my ready remarks, it is the primary time in historical past of FedEx that within the FedEx Floor the place the volumes declined and our working margin expanded. So, clearly, that is past simply flexing for quantity and the place that is actually DRIVE taking effort as impact as effectively. So, that is, you already know, we’re simply very, very happy with how John his group are performing with — in Floor.
And, oh, by the way in which, I will give kudos to the Categorical group and Richard’s group in addition to we’ve began to see important enchancment within the — within the fourth quarter. To your query concerning the macro, so after we talked in September, we pointed to a few issues. We stated that the economic financial system was slowing down, and due to inflation, rates of interest have slowed down in international commerce. We stated that the buyer spending — spending was shifting to companies versus items.
After which, thirdly, there was an e-commerce reset popping out of — popping out of the pandemic. However all these three issues occurred, and so they have been detrimental to quantity for all the entire business. So, I imply, we’re roughly the identical income efficiency on the calendar quarter that’s comparable throughout the — throughout the sector. For those who look forward right here, at this level, the one and two are mainly alongside the identical traces we have seen within the — in the previous couple of months.
I feel on the e-commerce facet, we anticipate to see progress now I feel the reset might be full and, you already know, e-commerce goes to develop into the following — subsequent calendar — sorry, the following enterprise FY ’24 timeframe. So, you already know, we’re watching this very fastidiously. It is a — visibility, particularly within the second half could be very troublesome given the dynamic circumstances we’re seeing. We are going to see how the economic manufacturing goes.
We’ll see how GDP and commerce goes, and we’ll observe the stock stocking and inventory-to-sales ratio very fastidiously. And — however on the finish of the day, we’re centered on the issues we will management. We made a willpower that we’ll come out of this stronger than we went in, and it is precisely what we’re doing, and I am very, very happy with the way in which we’re executing DRIVE. So, sorry, for the lengthy reply, Tom, however thought I needed to provide you a full perspective there.
Mike Lenz — Govt Vice President, Chief Monetary Officer
And, Tom, that is Mike. I needed to amplify one facet there as effectively, To only spotlight, we talked about Floor and the — the progress of the numbers there, however there was great progress at Categorical amid the headwinds right here. So, you talked — you requested concerning the steering broadly, however have in mind, you already know, all 800 million of that worldwide headwind is, A, at Categorical as a, you already know, nonrecurring headwind, a significant factor of the variable compensation, is — it is Categorical. And the — the home freight headwind that Brie alluded to earlier, that is about 400 million proper there as a headwind in ’24.
So, regardless of all that, by way of the self-discipline and rigor of DRIVE and a muted demand setting, we’re projecting up margins at Categorical in ’24. So, once more, simply to reiterate, we’re this very thoughtfully and are planning to adapt to any additional modifications within the setting.
Operator
The subsequent query will come from Ken Hoexter with Financial institution of America. Please go forward.
Ken Hoexter — Financial institution of America Merrill Lynch — Analyst
Hey, nice. Mike, if I can simply observe up on a few ideas there. Your — your ideas on the size of enchancment in Categorical, are you able to attain mid-single digits? Is there sort of a spread, as you’d put, throughout the goal, identical at Floor? Is that going to achieve double digits if we’re going up, after which magnitude at Freight margin in case you’re declining expectations? After which, I assume inside that, any ideas on Europe and TNT integration inside that Categorical class? Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
That was so much. Definitely, like I stated, we’ll see margin enhancements at Categorical and at Floor in ’24. Freight will — undoubtedly, we’ll see some margin stress there. So, I will — I will depart it at that.
The Freight will mitigate. Like I stated earlier, we’ll see the most important margin stress at Freight in Q1, and that may mitigate as we transfer — transfer by way of the 12 months. You already know, equally, I’d anticipate the Categorical margin enchancment to enhance to a better diploma past Q1 in addition to we transfer by way of the 12 months. So, I will — I will depart it at that.
Because it pertains to Europe, we’re completely, as a element of that Categorical enchancment, projecting improved profitability in Europe. Take into account that, throughout the DRIVE domains, we have recognized $600 million of worth that we’ll notice from the Europe initiatives there. So, we’ll completely see progress on that in ’24 and going ahead.
Operator
The subsequent query will come from Scott Group with Wolfe Analysis. Please go forward.
Scott Group — Wolfe Analysis — Analyst
Hey, thanks, afternoon. So, Raj, in one of many earlier solutions, you mainly stated 1, 2, 3, proper, for the earnings sensitivity and income sensitivity. So, that is — mainly, each billion of income will get you an additional greenback of earnings. Is that the precise sensitivity to consider simply long run past simply this 12 months as Freight finally recovers? After which, simply individually, the 5.7 billion of capex this 12 months, how a lot is included in plane? I simply wish to get a way of what the — the capex might appear to be in a few years after we’re spending so much much less on planes? Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
OK, Scott, so, first, on the plane capex, we got here in at about 1.7 billion in ’23, about 1.5 billion for ’24, barely decrease than that in ’25, after which, as Raj stated, you already know, roughly beneath that even into ’26. So, that is the — that is the plane element of it.
Raj Subramaniam — President and Chief Govt Officer
And — and, Scott, on the 1, 2, 3, simply needed to maintain the maths easy right here. You already know, it is a easy 1,2, 3 method, however the level I needed to make is also that, because it accelerates past that, then the curve turns into nonlinear. As you already know, we’ve important working leverage. I feel you are the one who referred to as it the opening the jaws of the crocodile, and that is sort of what is going on to occur.
Operator
The subsequent query will come from Conor Cunningham with Melius Analysis. Please go forward.
Conor Cunningham — Melius Analysis — Analyst
Everybody, thanks. Simply on the ’24 income assumption, I am somewhat confused on how that may work with export, you already know, yield stress. It simply looks as if the opposite lever goes to be, you already know, volumes usually. I am — simply to be tremendous clear, are you assuming a year-over-year enhance in ’24 on the midpoint? Simply any assist that might be can be — can be — can be nice.
Thanks.
Brie Carere — Govt Vice President, Chief Buyer Officer
Certain, Conor. So, sure, the belief on the midpoint, as Raj simply talked about, can be 2% income progress. And as you consider the construct again, from a income perspective, it is essential to notice as I feel Mike talked about earlier, within the U.S. home, as we get late into Q1, early Q2, you will notice volumes, Home Categorical and Floor parcel, they’re going to get to flat.
After which, we do anticipate they are going to construct again from there. FedEx Freight will lag that barely as a result of, as Mike talked about, the impression lagged. After which after we get into our worldwide enterprise, the 800 is basically yield impression. We’re anticipating to construct again some quantity in our worldwide enterprise this 12 months.
And once more, that may occur all year long. So, that is — sure, 2% is the midpoint, volumes will begin to construct again all year long.
Operator
The subsequent query will come from Jeff Kauffman with Vertical Analysis Companions. Please go forward.
Jeff Kauffman — Vertical Analysis Companions — Analyst
Thanks very a lot. Brie, I simply wish to observe up on that if I can. You gave you a spread of outcomes, however we do have increased rates of interest, bank cards. I do know there’s been a whole lot of chatter about faculty loans being paid later this 12 months and that could be a destructive for vacation season and e-commerce.
As you look world wide, let me phrase this somewhat in another way than you’ve got been answering, the place are potential inexperienced shoots beginning to present up in your community or causes for optimism? And the place are we seeing, let’s neglect the worldwide yields, however extra by way of exercise that you just’re seeing on the market incremental purple?
Brie Carere — Govt Vice President, Chief Buyer Officer
Yeah, completely, it is a honest query. So, you already know, we — we deliberate proper now for flattish to single, low single income progress, and that is actually mainly on the backdrop of the financial system that we’re experiencing proper now. We’re all watching the buyer. As Raj talked about, we’re nonetheless seeing, you already know, client energy right here in the US, however we’re seeing an e-commerce reset.
So, from a inexperienced shoots perspective, one of many issues that we’ll be is that e-commerce progress, it is sitting at 7% to eight%. It is essential to notice, our proportion of that’s nearer to 2% to three% as a result of we do not play in grocery. And — and clearly, inside that 7 to eight can be purchase on-line, pickup in retailer. So, we shall be keeping track of that client energy right here in the US and would like to see, as we head into peak, somewhat little bit of a special shift.
We’ve not seen that but, however we’ll be looking ahead to it. After which, you already know, the opposite factor, from an Asia perspective, is we’re going to watch intently on Asia reopening. We have not seen important uptick there, but when that occurs, to Raj’s level, that may completely be a tailwind for us. After which, truthfully, our personal execution in Europe.
You already know, I am actually happy with the service that the European group is delivering. We have got some inexperienced shoots within the home markets in Europe, and we’re working that basically, actually laborious from an operations and a gross sales perspective. So, there are undoubtedly some inexperienced shoots we’re engaged on.
Operator
The subsequent query will come from Helane Becker with TD Cowen. Please go forward.
Helane Becker — Cowen and Firm — Analyst
Thanks, operator. Hello, group. So, straightforward questions. I feel the pilots are voting on a brand new contract, and I am questioning if the fee enhance related to that’s included within the steering.
And the opposite a part of the query is, as you retire your older plane or are you additionally retiring pilots, or is there an extra of pilots?
Mike Lenz — Govt Vice President, Chief Monetary Officer
OK, Helane, a pair questions there. So, first, because it pertains to the facets of the — the pilot tentative settlement there, a element of that could be a fee upon implementation. So, we have beforehand accrued for that date of signing fee there. After which, throughout the steering right here, we’ve the FY ’24 scale will increase.
After which, throughout the pension figures I gave earlier, that comes with the issues because it pertains to that as effectively. So, that is absolutely integrated into the outlook there. And, you already know, as we talked about earlier, we’re anticipating to park 29 further plane throughout the 12 months, 9 of which shall be completely retired.
Operator
The subsequent query will come from Scott Schneeberger with Oppenheimer. Please go forward.
Scott Schneeberger — Oppenheimer and Firm — Analyst
Thanks very a lot. Good afternoon. I will hold it on the airplanes. Simply curious on — on –on flight, in case you sort of body the reply in the place you have been a 12 months in the past, the place you at the moment are, and the place you anticipate being in — in a — in 1 / 4 or two with regard to taking out flights trans-Pacific, trans-Atlantic, Asia, Europe? If we might simply get an replace on that for what you’ve got finished and what could come going ahead.
Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
So, Scott, you already know, look, as Raj talked about, flight hours have been down 12% within the fourth quarter, which is larger than the quantity decline. So, we have taken important flying out of the community. We have stated that that was anticipated as soon as the provision demand constraints have been eased, and so that’s the determination to then retire these aircrafts as a result of we proceed to cut back the — the trans-Pacific and trans-Atlantic flying to match demand. And we’ll proceed to lean into that in addition to using the pliability of capability out there.
Operator
The subsequent query will come from David Vernon with Bernstein. Please go forward.
David Vernon — AllianceBernstein — Analyst
Hey, thanks for squeezing me right here. So, Mike, within the eventualities you’ve got outlined for us, you already know, is there a situation the place margins, on a consolidated foundation, do not get higher on an adjusted foundation in 2023, or are we searching for margin growth? After which, Brie, as you consider the big buyer change in conduct, I am assuming we’re speaking concerning the put up workplace, are we anticipating extra of that precedence mail income to say no given what DeJoy has stated publicly round his want to floor a few of that visitors? After which, how can we take into consideration that type of in reference to the — your want additionally to sort of scale back the fly community a bit?
Mike Lenz — Govt Vice President, Chief Monetary Officer
Yeah, I imply, David, the quick reply is we’re projecting margin enchancment with the outcomes right here that we’ve highlighted and the particular drivers inside that.
Brie Carere — Govt Vice President, Chief Buyer Officer
Yeah, so, the client we’re speaking about is the US Postal Service. Clearly, we have had a protracted and productive and worthwhile relationship with the put up workplace. You are appropriate, their 10-year strategic plan is to trace extra quantity and fly much less. So, to Mike’s level earlier, we’ve accounted that — for that on this 12 months’s fiscal vary.
We’re dedicated to assembly the service obligations in that contract, which does finish in September 2024. And so, we have accounted for that headwind. At that time, it would turn out to be a tailwind as we both renegotiate or we’ll modify our community accordingly.
Operator
The subsequent query will come from Stephanie Moore with Jefferies. Please go forward.
Unknown speaker
Nice. Good night. That is truly Joe hopping on for Stephanie. Thanks for squeezing me on the finish right here.
I will hold it to 1. My query is possibly for Mike, it’s kind of within the weeds. Trying on the floor working revenue growth, buy transportation prices are clearly down large 12 months over 12 months, at 40%. I feel it is the lowest % of income in 10 years or one thing with the softer macro.
So, how ought to we take into consideration PT, significantly within the context of quantity rebound and the necessity to possibly supply third-party capability if the macro improves, particularly as extra prices are popping out of the community? Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
OK, Joe, effectively, you already know, in my remarks, I discussed how one of many drivers of the margin growth and value management at Floor was lower-line haul expense. So, we moved a whole lot of high-cost advert hoc exterior line haul spend into our scheduled community as we optimize that and decrease charges on the deliberate line haul buy transportation. So, once more, it is all a part of the broader optimization of the networks holistically, each pickup and supply line haul, in addition to the — you already know, the kind and facility operations.
Operator
The subsequent query will come from Bruce Chan with Stifel. Please go forward.
J. Bruce Chan — Stifel Monetary Corp. — Analyst
Hey, thanks, and good night. And congrats, Mike, on the retirement. Simply wish to ask concerning the LTL facet since we have not talked about it an excessive amount of. You lately had a big competitor announce some materials solvency considerations, and I simply needed to see what the playbook right here is.
If we do see a significant competitor exit, would you rethink among the facility closures and furloughs at that time and even simply if it is a stronger-than-expected LTL market?
Mike Lenz — Govt Vice President, Chief Monetary Officer
Certain. And thanks — thanks for that, Bruce. However, yeah, on the LTL facet, look, you’ve got seen how briskly the group reacted to declining quantity setting earlier within the 12 months, and we nonetheless have been increasing margins that accelerated. So, that was tougher.
So, look, we’ll proceed to look to optimize the amenities. It is a holistic perspective, so the 29 amenities have been smaller ones that weren’t essentially the most environment friendly. So, as we lean into what could possibly be a requirement restoration, that quantity could possibly be accommodated throughout the bigger amenities, and that simply has that rather more incremental contribution as and when that comes again?
Operator
And the ultimate query will come from Amit Mehrotra with Deutsche Financial institution. Please go forward.
Amit Mehrotra — Deutsche Financial institution — Analyst
Thanks. Hello, everybody. Mike, I do know there’s a whole lot of questions on the long-term 12-month view. That is laborious, I get it, however possibly assist us calibrate expectations for the close to time period.
Do you anticipate Categorical and Floor earnings to be up within the subsequent quarter? I do know there’s seasonality, however the query, you already know, there’s clearly DRIVE financial savings. After which, Raj, you already know, the choice to go exterior for the CFO search, that clearly wasn’t misplaced upon me, that that exterior standards, you already know, that is a giant deal for — for FedEx, clearly. And questioning in case you can speak about what you are — what the board — what you are making an attempt to realize there by way of hiring any individual from the skin, which actually hasn’t occurred earlier than for such a senior place. Thanks.
Mike Lenz — Govt Vice President, Chief Monetary Officer
All proper, Amit, that is Mike. So — so, first, I will reiterate, as I discussed earlier, Freight margins shall be down for the 12 months, and that shall be most pronounced in Q1. And at Categorical, as we noticed the numerous inflection in demand very late within the first quarter final 12 months, so Categorical will see the smallest year-over-year margin change in Q1 relative to the remainder of the 12 months. So, I will depart it at that and go from there.
Raj Subramaniam — President and Chief Govt Officer
And, Amit, sure, initially, let me once more thank Mike for simply unbelievable work over the past 18 years and significantly within the final three. And, you already know, we’ve a implausible finance group and an important group. From a succession planning, we’re any individual who has deep monetary experience but in addition robust operational capabilities and assist lead FedEx by way of our DRIVE transformation packages. So, once more, thanks to your query.
Operator
This concludes our question-and-answer session. I want to flip the convention again over to administration for any closing remarks. Please go forward.
Raj Subramaniam — President and Chief Govt Officer
Thanks, operator. Earlier than we shut, I wish to give Mike a possibility to say just a few phrases.
Mike Lenz — Govt Vice President, Chief Monetary Officer
Thanks, Raj. The final 18 years at FedEx have been an incredible expertise, and it was my nice honor to function CFO for the final three years. Who would have identified, after I was named into this place in March of 2020, what we and the world have been about to face? However this group rose to the event time and again by way of many obstacles, and we at the moment are effectively positioned for the longer term. I wish to specific my gratitude to your entire FedEx group and the finance group, particularly, for his or her dedication all through all the change; to Fred and Raj for his or her imaginative and prescient and management; and most significantly to my spouse, Jane, and our sons for his or her help alongside the way in which.
I’ve additionally valued the engagement with this viewers in sharing the thrilling plans and shiny future for FedEx. As I begin my subsequent chapter, I depart understanding that FedEx is in a robust place. I could not ask for any greater than that. Thanks.
Raj Subramaniam — President and Chief Govt Officer
Thanks, Mike. In closing, I additionally wish to thank our group members for his or her laborious work and dedication as we construct the world’s smartest logistics community. We made great progress on our transformation efforts in fiscal 12 months ’23, and the group is already shifting with urgency as we enter fiscal 12 months ’24. We all know there’s important alternative forward, and I am assured in our capacity to proceed to execute.
Thanks very a lot.
Operator
[Operator signoff]
Length: 0 minutes
Name contributors:
Mickey Foster — Vice President, Investor Relations
Raj Subramaniam — President and Chief Govt Officer
Brie Carere — Govt Vice President, Chief Buyer Officer
Mike Lenz — Govt Vice President, Chief Monetary Officer
Allison Poliniak — Wells Fargo Securities — Analyst
Jordan Alliger — Goldman Sachs — Analyst
Jon Chappell — Evercore ISI — Analyst
Brian Ossenbeck — JPMorgan Chase and Firm — Analyst
Jack Atkins — Stephens, Inc. — Analyst
Chris Wetherbee — Citi — Analyst
Brandon Oglenski — Barclays — Analyst
Tom Wadewitz — UBS — Analyst
Ken Hoexter — Financial institution of America Merrill Lynch — Analyst
Scott Group — Wolfe Analysis — Analyst
Conor Cunningham — Melius Analysis — Analyst
Jeff Kauffman — Vertical Analysis Companions — Analyst
Helane Becker — Cowen and Firm — Analyst
Scott Schneeberger — Oppenheimer and Firm — Analyst
David Vernon — AllianceBernstein — Analyst
Unknown speaker
J. Bruce Chan — Stifel Monetary Corp. — Analyst
Amit Mehrotra — Deutsche Financial institution — Analyst
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