The Battle for Value, FedEx

Corp. vs. The United Parcel

Service, Inc.
Kelompok 1 Urusan

The Battle for Value, 2005: FedEx vs. UPS

FedEx will produce superior financial
returns for shareowners by providing high
value-added supply chain, transportation,
business, and related information services
through focused operating companies
competing collectively, and managed
collaboratively, under the respected FedEx
brand.
FedEx Mission Statement Excerpt

The Battle for Value, 2005: FedEx vs. UPS

We serve the evolving distribution,
logistics, and commerce needs of our
customer worldwide, offering excellence
and value in all we do. We sustain a
financially strong company, with broad
employee ownership, that provides a longterm competitive return to our
shareowners.
UPS Mission Statement

The Battle for Value, 2005: FedEx vs. UPS

FedEx History
Business model conceived by Fred Smith in an
undergraduate term paper.
Invests $4 million of his own capital and raises and
addition $91 million.
Launches in 1971
By 2003

50,000 Delivery Trucks

625 Cargo Planes
217,000 Employees
Handles 2 billion packages
$22.5 Billion with 37% margins

The Battle for Value, 2005: FedEx vs. UPS

UPS History
Started in 1907 by 19 year-old Jim Casey then called
American Messenger Company.
Became Unite Parcel Service of America in 1929 and
began shipping packages on commercial airliners.
By 2003
88,000 Ground Trucks
583 Planes
360,000 Employees
$2.9 Billion in profits on $33.4 Billion

The Battle for Value, 2005: FedEx vs. UPS

Head-to-Head
FedEx

UPS

Ground Vehicles

50,000

88,000

Aircraft

625

583

Employees
Packages Shipped Daily
Assets

216,500
5.4 million
$15.4 billion

360,000
13 million
$28.9 billion

Revenues

$22.5 billion

$33.4 billion

Net Income

$830 million

$2.9 billion

The Battle for Value, 2005: FedEx vs. UPS

FedEx - UPS 2003 Financials

Net Income
UPS
FedEx
Revenues

Assets
$0.00

$10.00

$20.00

$30.00

$40.00

The Battle for Value, 2005: FedEx vs. UPS

The Competition
Price competition
Operational Reengineering
Information Technology
Service Expansion
Logistic Services

The Battle for Value, 2005: FedEx vs. UPS

The European Market
In 1992, FedEx sold operations to DHL after
sustaining an estimated $1 Billion in losses since 1984.
FedEx continues to deliver throughout Europe,
however, leveraging local partners.
UPS enters the European market place in 1988.
Acquires 10 local providers.
Announces $1 Billion of investments in that market
Targets to grow European business to 1/3 of total
operations.

The Battle for Value, 2005: FedEx vs. UPS

The Breaking Into China
Economist suggest China will be the worlds largest
economy by 2039.
Chinese air cargo is growing at a steady rate of 30%.
Import/Export shipping market is estimated at $1
Billion.
Intra-China Shipping estimated at $800 Million.
In 2004, the US and China strike an new
transportation accord.
Five times the number of in/outbound flights
Permitted to establish hubs
Access to all airports

The Battle for Value, 2005: FedEx vs. UPS

The Breaking Into China (cont.)
FedEx and UPS already serving China
FedEx maintained a larger presence in China
Direct flights to Beijing, Shenzhen, and Shanghai
11 weekly flights, twice as many as UPS
Served 220 Chinese cities.
FedEx volumes grew by more that 50% between 2003 and
2004

UPS was active in China since 1988

Direct flights to Beijing and Shanghai
6 weekly 747 flights
Served 200 Chinese cities
UPS reported 60% growth in shipments
since 2001.

Timeline of Competitive Developments

2000
B2C home-delivery service

1984
Acquires Gelco International,
launches Asia-Pacific operations 1985
European hub in Brussels

1987
Warehouse services to IBM
1994
Website for package tracking

1986
handheld barcode scanner

1989
Acquires Tiger International
1990
Malcolm Balbridge Award
1992
2-day delivery

1982
Offers 10:30 AM delivery

1995
Acquires air-routes serving China,
Establishes Latin America Div.
1999
Creates new hub at
CDG Airport in Paris

1982

2002
Home delivery to
cover 100% of U.S.
2003
Acquires Kinko's,
establishes
Chinese headquarters

2003

1982
Establishes next-day air service

1985
Intercontinental air service
between US and Europe

2001
Carries USPS packages,
Acquires American
Freightway Corp.

1994
Website for
package tracking

1988
UPS's first air fleet

2000
Acquires all-cargo air service
in Latin America

1991
Saturday delivery,
Electronic sign. tracking

1990
Offers 10:30 AM guarantee
for next-day air

1999
UPS IPO

1995
Guaranteed 8 A.M.
overnight delivery
1992
Expands delivery
to 200 countries

2003
Contracts with
Yangtze River Express,
Reduces
ground-delivery time

2002
Guaranteed
2001
next-day delivery
Acquires Mail Boxes Etc.,
begins direct flights to China

The Battle for Value, 2005: FedEx vs. UPS

Enabling Factors
FedEx

UPS

Technology Innovations
Customer ordering
Package Tracking
Process Monitoring

Leader in logistics & supply chain management

Customer logistical management

Operations Malcolm Balbridge National Quality

Award for service

Efficiency,
Low-cost provider

Deregulation
In airline industry
In trucking industry

Innovative, entrepreneurial, operational leader

Hub & spoke distribution pattern

Cost reduction through economies of scale, IT,
Business Process Re-engineering

Ditto

The Battle for Value, 2005: FedEx vs. UPS

Inhibiting Factors
FedEx

UPS

Domestic express
Ditto
market reached maturity
Union Problems, large
wage increases

Equity Prices and Returns for FedEx and UPS

UPS
Stock Price Dec 31
Dividends per share
EPS, basic, incl. extra items
P/E multiple
Capital appreciation
UPS Cumul. Compound annual return

1992
$9.25
$0.25
$0.44
21.26

1993
$10.38
$0.25
$0.70
14.82
12.16%
12.16%

1994
$11.75
$0.28
$0.81
14.42
13.25%
27.03%

1995
$13.13
$0.32
$0.92
14.34
11.70%
41.89%

1996
$14.63
$0.34
$1.00
14.55
11.43%
58.11%

1997
$15.38
$0.35
$0.82
18.64
5.13%
66.22%

1998
$20.00
$0.22
$1.59
12.58
30.08%
116.22%

1999
$69.00
$0.58
$0.79
87.34
245.00%
645.95%

2000
$58.75
$0.68
$2.54
23.13
-14.86%
535.14%

2001
$54.50
$0.76
$2.13
25.59
-7.23%
489.19%

2002
$63.08
$0.76
$2.84
22.21
15.74%
581.95%

2003
$74.55
$0.92
$2.57
29.01
18.18%
705.95%

FedEx Corp.
Stock Price Dec 31
Dividends per share
EPS, basic, incl. extra items
P/E multiple
Capital appreciation
FedEx Cumul. Compound annual return

1992
$10.19
$0.00
-$0.53

1993
$12.25
$0.00
$0.25
50.00
20.25%
20.25%

1994
$19.13
$0.00
$0.91
20.96
56.12%
87.73%

1995
$14.97
$0.00
$0.91
11.36
-21.73%
46.93%

1996
$19.16
$0.00
$1.35
14.22
27.97%
88.04%

1997
$26.19
$0.00
$1.56
16.79
36.70%
157.06%

1998
$32.06
$0.00
$1.72
18.70
22.43%
214.72%

1999
$54.81
$0.00
$2.13
25.73
70.96%
438.04%

2000
$35.50
$0.00
$2.36
15.04
-35.23%
248.47%

2001
$40.00
$0.00
$2.02
19.80
12.68%
292.64%

2002
$53.95
$0.00
$2.38
22.67
34.88%
429.57%

2003
$63.98
$0.20
$2.79
22.93
18.59%
528.02%

S&P 500 Index

Index level
Annual return
S&P Cumul. Compound annual return

1992
435.71

1993
466.45
7.06%
7.06%

1994
459.27
-1.54%
5.41%

1995
615.93
34.11%
41.36%

1996
740.74
20.26%
70.01%

1997
970.43
31.01%
122.72%

1998
1229.23
26.67%
182.12%

1999
1469.25
19.53%
237.21%

2000
1320.28
-10.14%
203.02%

2001
1148.08
-13.04%
163.50%

2002
879.82
-23.37%
101.93%

2003
1111.92
26.38%
155.20%

1992

1993
5.11%
13.19%

1994
21.62%
82.32%

1995
0.53%
5.57%

1996
-11.90%
18.03%

1997
-56.51%
34.33%

1998
-65.90%
32.60%

1999
408.74%
200.83%

2000
332.12%
45.45%

2001
325.69%
129.14%

2002
480.02%
327.64%

2003
550.75%
372.83%

Cumul. Market-Adjusted Returns

UPS
FedEx

Cumulative Compound Performance against S & P 500 index

800.00%

700.00%

600.00%

% Return

500.00%
UPS Cumul. Compound annual return
FedEx Cumul. Compound annual return

400.00%

S&P Cumul. Compound annual return

300.00%

200.00%

100.00%

0.00%
1990

1992

1994

1996

1998
Year

2000

2002

2004

Economic Profit Analysis for FedEx

Fedex Corp
Return on Net Assets (RONA)
Net operating profit after tax ($mm)
Beginning capital ($mm)
RONA (NOPAT/Beginning capital)

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

$187
$4,078
4.59%

$176
$4,344
4.05%

$363
$4,456
8.15%

$405
$4,655
8.70%

$419
$5,081
8.25%

$499
$5,663
8.81%

$727
$6,882
10.56%

$726
$7,863
9.23%

$866
$8,636
10.03%

$750
$10,090
7.43%

$881
$10,870
8.10%

$1,418
$12,050
11.77%

Weighted average cost of capital

Long-term debt ($mm)
Shares outstanding (mm)
Share Price ($)
Market value of equity ($mm)
Tax rate (%)
Long-term U.S. gov't bonds (%)
Senior Baa-rated debt (%)
Risk Premium (%)
Beta
Cost of equity (%)
WACC

$1,798
216
$10
$2,205
23%
7.97%
9.20%
5.60%
1.10
14.13%
10.97%

$1,882
219
$12
$2,682
46%
6.80%
8.11%
5.60%
1.15
13.24%
9.59%

$1,632
224
$19
$4,274
46%
7.53%
8.71%
5.60%
1.20
14.25%
11.61%

$1,325
225
$15
$3,363
43%
7.01%
8.27%
5.60%
1.20
13.73%
11.18%

$1,325
228
$19
$4,359
43%
7.07%
8.46%
5.60%
1.40
14.91%
12.56%

$1,398
230
$26
$6,018
43%
6.89%
8.16%
5.60%
1.35
14.45%
12.60%

$1,385
295
$32
$9,453
45%
5.94%
7.33%
5.60%
1.30
13.22%
12.05%

$1,360
298
$55
$16,333
41%
5.79%
7.69%
5.60%
1.15
12.23%
11.64%

$1,776
284
$36
$10,098
39%
6.19%
8.87%
5.60%
1.20
12.91%
11.79%

$1,900
297
$40
$11,893
37%
5.65%
7.94%
5.60%
1.20
12.37%
11.36%

$1,800
298
$54
$16,087
38%
5.55%
7.96%
5.60%
1.20
12.27%
11.53%

$1,709
299
$64
$19,104
38%
4.76%
6.58%
5.60%
1.10
10.92%
10.36%

Economic Value Added (EVA)

RONA (NOPAT/BEGINNING CAPITAL)
WACC
Spread
X beginning capital ($mm)
EVA (annual)
EVA (cumulative)

4.59%
10.97%
-6.39%
$4,078
($261)
($261)

4.05%
9.59%
-5.67%
$4,344
($246)
($507)

8.15%
11.61%
-3.46%
$4,456
($154)
($661)

8.70%
11.18%
-2.48%
$4,655
($115)
($777)

8.25%
12.56%
-4.30%
$5,081
($218)
($995)

8.81%
12.60%
-3.79%
$5,663
($215)
($1,210)

10.56%
12.05%
-1.48%
$6,882
($102)
($1,311)

9.23%
11.64%
-2.41%
$7,863
($189)
($1,501)

10.03%
11.79%
-1.75%
$8,636
($151)
($1,652)

7.43%
8.10%
11.36%
11.53%
-3.92%
-3.43%
$10,090
$10,870
($396)
($373)
($2,048) ($2,420)

11.77%
10.36%
1.41%
$12,050
$170
($2,251)

Market Value Added (MVA)

Market value of equity ($mm)
Long-term debt ($mm)
Capital (market value) ($mm)

$2,205
1,798
4,003

$2,682
1,882
4,564

$4,274
1,632
5,906

$3,363
1,325
4,688

$4,359
1,325
5,684

$6,018
1,398
7,416

$9,453
1,385
10,838

$16,333
1,360
17,693

$10,098
1,776
11,874

$11,893
1,900
13,793

$16,087
1,800
17,887

$19,104
1,709
20,813

Book value of equity ($mm)

Long-term debt ($mm)
Capital (market value) ($mm)
MVA (market value - book value)

$1,580
1,798
3,378
$625

$1,671
1,882
3,553
$1,011

$1,925
1,632
3,557
$2,349

$2,246
1,325
3,571
$1,117

$2,576
1,325
3,901
$1,783

$2,963
1,398
4,361
$3,055

$3,961
1,385
5,346
$5,492

$4,664
1,360
6,024
$11,669

$4,785
1,776
6,561
$5,313

$5,900
1,900
7,800
$5,993

$6,545
1,800
8,345
$9,542

$7,288
1,709
8,997
$11,816

Economic Profit Analysis for UPS

UPS
Return on Net Assets (RONA)
Net operating profit after tax ($mm)
Beginning capital ($mm)
RONA (NOPAT/Beginning capital)

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

$914
$6,932
13.19%

$888
$7,195
12.34%

$944
$8,280
11.40%

$1,448
$9,679
14.96%

$1,545
$11,796
13.10%

$1,379
$12,514
11.02%

$1,909
$13,350
14.30%

$3,215
$18,845
17.06%

$2,955
$17,161
17.22%

$2,846
$2,589
$20,007 $20,802
14.23%
12.45%

$3,309
$23,391
14.15%

Weighted average cost of capital

Long-term debt ($mm)
Shares outstanding (mm)
Share Price ($)
Market value of equity ($mm)
Tax rate (%)
Long-term U.S. gov't bonds (%)
Senior Baa-rated debt (%)
Risk Premium (%)
Beta
Cost of equity (%)
WACC

$862
1,190
$9
$11,008
40%
7.97%
8.34%
5.60%
1.24%
8.04%
7.82%

$852
1,160
$10
$12,035
43%
6.80%
7.36%
5.60%
1.13%
6.86%
6.69%

$1,127
1,160
$12
$13,630
40%
7.53%
8.08%
5.60%
1.16%
7.59%
7.39%

$1,729
1,140
$13
$14,963
39%
7.01%
7.71%
5.60%
1.18%
7.08%
6.83%

$2,573
1,140
$15
$16,673
40%
7.07%
7.78%
5.60%
1.18%
7.14%
6.81%

$2,583
1,124
$15
$17,282
41%
6.89%
7.53%
5.60%
1.14%
6.95%
6.63%

$2,191
1,095
$20
$21,896
40%
5.94%
6.71%
5.60%
1.15%
6.00%
5.82%

$1,912
1,211
$69
$83,538
58%
5.79%
6.90%
5.60%
1.15%
5.85%
5.79%

$2,981
1,135
$59
$66,663
39%
6.19%
7.99%
5.60%
1.11%
6.25%
6.19%

Economic Value Added (EVA)

RONA (NOPAT/BEGINNING CAPITAL) 13.19%
WACC
7.82%
Spread
-1.01%
X beginning capital ($mm)
$6,932
EVA (annual)
($70)
EVA (cumulative)
($70)

12.34%
6.69%
-0.24%
$7,195
($17)
($87)

11.40%
7.39%
-1.91%
$8,280
($158)
($245)

14.96%
6.83%
2.24%
$9,679
$217
($29)

13.10%
6.81%
0.63%
$11,796
$74
$46

11.02%
6.63%
-1.10%
$12,514
($138)
($92)

14.30%
5.82%
3.04%
$13,350
$406
$314

17.06%
5.79%
5.04%
$18,845
$950
$1,264

17.22%
6.19%
5.13%
$17,161
$880
$2,144

Market Value Added (MVA)

Market value of equity ($mm)
Long-term debt ($mm)
Capital (market value) ($mm)

$11,008
862
11,870

$12,035
852
12,887

$13,630
1,127
14,757

$14,963
1,729
16,692

$16,673
2,573
19,246

$17,282
2,583
19,865

$21,896
2,191
24,087

$83,538
1,912
85,450

$66,663
2,981
69,644

$61,068
4,648
65,716

$70,839
3,945
74,784

$84,167
3,149
87,316

Book value of equity ($mm)

Long-term debt ($mm)
Capital (market value) ($mm)
MVA (market value - book value)

$3,720
862
4,582
$7,288

$3,945
852
4,797
$8,090

$4,647
1,127
5,774
$8,983

$5,151
1,729
6,880
$9,812

$5,901
2,573
8,474
$10,772

$6,087
2,583
8,670
$11,195

$6,087
2,191
8,278
$15,809

$12,474
1,912
14,386
$71,064

$9,735
2,981
12,716
$56,928

$10,248
4,648
14,896
$50,820

$12,455
3,945
16,400
$58,384

$14,852
3,149
18,001
$69,315

$4,648
1,121
$55
$61,068
38%
5.65%
7.16%
5.60%
1.09%
5.71%
5.62%

$3,945
1,123
$63
$70,839
35%
5.55%
6.66%
5.60%
0.95%
5.60%
5.54%

$3,149
1,129
$75
$84,167
34%
4.76%
5.47%
5.60%
0.80%
4.80%
4.76%

14.23%
12.45%
5.62%
5.54%
2.99%
1.89%
$20,007 $20,802
$598
$393
$2,742
$3,135

14.15%
4.76%
5.11%
$23,391
$1,195
$4,331

FedEx vs. UPS Annual EVA

$1,400

$1,200

$1,000

$800

$600
UPS Annual EVA
FedEx Annual EVA

$400

$200

$0
1992
($200)

($400)

($600)

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Financial and Analystical Ratios

Fedex Corp
Activity Analysis
Avg days outstanding
Working Capital Turnover
Fixed assets Turnover
Total Asset Turnover

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

44.1
(42.21)
2.21
1.38

42.6
(817.85)
2.25
1.35

41.82
37.64
2.46
1.42

41.79
103.73
2.53
1.46

42.67
93.51
2.5
1.53

44.11
67.84
2.4
1.51

39.74
208.05
2.49
1.64

44.57
47.08
2.67
1.58

46.98
46.37
2.58
1.58

46.98
98.37
2.42
1.47

44.25
28.5
2.48
1.49

41.54
37.11
2.58
1.46

Liquidity Analysis
Current Ratio
Cash Ratio
Cash from Operations Ratio
Defensive Interval

0.87
0.06
0.36
0.7

0.99
0.11
0.5
0.78

1.15
0.26
0.5
0.91

1.05
0.2
0.58
0.92

1.07
0.06
0.58
0.68

1.09
0.06
0.51
0.72

1.03
0.08
0.61
0.8

1.13
0.12
0.64
0.92

1.14
0.02
0.56
0.94

1.06
0.04
0.63
0.87

1.25
0.11
0.76
0.92

1.18
0.16
0.56
1.02

Long-Term Debt and Solvency Analysis

Debt/Equity Ratio
Times Interest Earned
Fixed-charge coverage
Capital Expenditure Ratio
Cash from operations/debt Ratio

1.24
1.36
0.34
0.15
0.27

1.21
1.82
0.46
0.21
0.36

0.95
2.92
0.64
0.22
0.42

0.7
3.73
0.65
0.28
0.65

0.52
4.31
0.61
0.23
0.71

0.51
5.06
0.57
0.22
0.66

0.41
6.42
0.74
0.29
1.04

0.29
7.78
0.75
0.27
1.29

0.37
7.83
0.72
0.23
0.91

0.36
6.58
0.65
0.25
0.96

0.28
6.98
0.61
0.27
1.23

0.28
10.51
0.83
0.22
0.93

3.67
(1.51)
(1.63)
(7.20)
(21.85)

4.67
0.69
4.38
3.22
7.43

6.26
2.41
6.45
10.62
26.64

6.29
3.17
7.09
13.25
28.87

6.07
3.00
6.75
11.95
32.51

5.94
3.14
6.51
12.19
35.85

6.82
3.17
6.94
12.70
29.48

6.93
3.76
7.33
13.54
35.63

6.69
3.77
7.32
14.38
42.35

6.09
2.98
5.71
9.90
28.59

5.79
3.45
6.38
10.85
31.87

6.54
3.69
6.30
11.39
44.36

92-93
3.42
6.04
(196.51)
(147.34)
31.67

93-94
8.60
3.44
86.11
279.40
45.51

94-95
10.76
7.36
45.61
45.61
11.40

95-96
9.39
4.13
3.42
3.42
5.53

96-97
12.13
13.83
17.37
17.37
9.65

97-98
37.79
27.02
37.91
39.26
58.27

98-99
5.67
9.93
26.73
25.51
7.43

99-'00
8.84
8.25
9.03
9.03
4.99

00-01
7.52
15.73
(15.10)
(15.10)
2.14

01-02
4.98
3.54
24.07
21.50
(0.16)

02-03
9.12
11.39
14.48
16.90
23.30

Profitability Analysis
Margin before Interest and Tax
Net profit margin
Return on assets
Return on total equity
Financial Leverage effect
Growth
Sales
Book assets
Net income before unusual (gain) loss
Net income
Operating income

Financial and Analystical Ratios

UPS Ratios
Activity Analysis
Avg days outstanding
Working Capital Turnover
Fixed assets Turnover
Total Asset Turnover

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

23.13
267.78
2.59
1.83

23.1
4748.29
2.63
1.86

25.66
161.79
2.52
1.75

30.5
80.63
2.34
1.66

34.81
20.39
2.19
1.5

38.57
20.81
2.04
1.41

37.68
14.51
2.18
1.45

39.67
3.9
2.34
1.17

44.79
11.35
2.41
1.37

53.16
10.33
2.28
1.24

54.92
9.82
2.3
1.19

51.6
7.72
2.41
1.16

Liquidity Analysis
Current Ratio
Cash Ratio
Cash from Operations Ratio
Defensive Interval

1.03
0.06
0.69
1.71

1
0.12
0.74
1.83

1.04
0.09
0.56
1.47

1.09
0.07
0.66
1.36

1.35
0.12
0.6
1.38

1.32
0.14
0.73
1.6

1.46
0.44
0.77
3.12

2.65
1.5
0.53
5.13

1.58
0.43
0.61
3.07

1.64
0.35
0.84
2.82

1.57
0.54
1.01
4.98

1.79
0.72
0.84
4.57

Long-Term Debt and Solvency Analysis

Debt/Equity Ratio
Times Interest Earned
Fixed-charge coverage
Capital Expenditure Ratio
Cash from operations/debt Ratio

0.23
18.68
18.68
0.23
1.67

0.22
23.59
23.59
0.26
2.04

0.24
20.85
20.85
0.21
1.43

0.34
17.19
17.19
0.22
1.13

0.44
13.71
13.71
0.19
0.74

0.43
7.38
7.38
0.22
0.94

0.36
12.17
12.17
0.25
1.1

0.19
16.08
16.08
0.19
0.92

0.37
19.58
19.58
0.22
0.76

0.5
16.83
16.83
0.29
0.75

0.37
23.15
23.15
0.41
1.22

0.26
36.41
36.41
0.33
1.22

7.74%
3.12%
6.47%
13.87%
35.59%

8.20%
4.55%
9.10%
20.53%
46.16%

7.95%
4.82%
9.10%
20.30%
58.39%

10.29%
4.96%
9.24%
20.25%
53.41%

9.07%
5.12%
8.65%
19.42%
60.16%

7.56%
4.05%
7.16%
14.93%
36.82%

12.47%
7.02%
11.69%
24.27%
60.70%

14.74%
3.26%
4.91%
7.08%
39.72%

15.19%
9.86%
14.61%
30.14%
107.00%

12.69%
7.83%
10.68%
23.41%
61.51%

12.81%
10.18%
12.73%
25.55%
56.55%

13.16%
8.65%
10.44%
19.51%
62.38%

92-93
7.65%
5.93%
5.92%
56.86%
14.08%

93-94
10.08%
16.80%
16.51%
16.51%
6.74%

94-95
7.51%
13.08%
10.57%
10.57%
39.21%

95-96
6.29%
18.26%
9.88%
9.88%
-6.33%

96-97
40.00%
6.41%
-20.68%
-20.68%
-16.31%

97-98
10.37%
7.26%
91.53%
91.53%
81.98%

98-99
9.13%
35.01%
-49.28%
-49.28%
29.06%

99-'00
10.05%
-5.99%
232.28%
232.28%
13.39%

00-01
2.94%
13.73%
-17.35%
-18.23%
-14.02%

01-02
2.04%
6.99%
34.19%
32.64%
3.01%

02-03
7.08%
9.68%
-10.94%
-8.93%
10.01%

Profitability Analysis
Margin before Interest and Tax
Net profit margin
Return on assets
Return on total equity
Financial Leverage effect
Growth
Sales
Book assets
Net income before unusual (gain) loss
Net income
Operating income

35.00%

30.00%

25.00%

20.00%

15.00%

UPS Net Profit Margin

UPS ROE
FedEx Net Prfit Margin
FedEx ROE

10.00%

5.00%

0.00%
1992
-5.00%

-10.00%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

The Battle for Value, 2005: FedEx vs. UPS

Conclusion

Questions