5 ms·

FedEx CapEx in $B '09-'18 $2.6,$3.4,$3.6,$3.6,$3.3,$3.8,$5.0,$5.0,$5.1,$5.6 Do you think the article fairly reflects the trends in the company's capital expen

by cascom 7y ago

FedEx CapEx in $B '09-'18 $2.6,$3.4,$3.6,$3.6,$3.3,$3.8,$5.0,$5.0,$5.1,$5.6 Do you think the article fairly reflects the trends in the company's capital expenditures?

ceejayoz 7y ago
Yes, I think it does. FedEx's lobbying efforts argued reduced taxes would allow them to increase capital spending more than they would have otherwise. Instead, they look to have stuck to their trendline - and 2019's estimated is flat. Draw those numbers on a chart and it doesn't look like the tax cut generated much of a boost: https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?w=587&fit=max&auto=format https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?... Article from which the chart is drawn: https://articles2.marketrealist.com/2018/09/a-look-at-fedexs-capital-expenditure-in-q1-2019/ https://articles2.marketrealist.com/2018/09/a-look-at-fedexs...
- drak0n1c 7y ago
  The NYT in the paragraph you quoted vaguely paints the picture that investment is being cut significantly in favor of massive dividend payments. However, if the reality is that it is merely plateauing as you and the parent comment show, then doesn't that show their wording was misleading? Yes, FedEx didn't follow up with the massive new boosts they promised (besides the pension fund). However, the NYT should have included figures and stated it how you are in your comment - that growth factor is what has gone down, not the actual level of investment. I am not disputing what you say about FedEx, I just want NYT to be more careful and precise in its reporting.
  - ceejayoz 7y ago
    It makes the point that they didn't even spend what they'd initially projected, let alone increase it like they said they would. They did not follow through with their lobbying promises. The fact that they instead increased stock buybacks etc. demonstrates a point of detractors of the tax law - that it's proceeds would most likely go back into already-wealthy pockets, not capital investment. It's not unreasonable to point it out here.
  - ryanmercer 7y ago
    >Yes, FedEx didn't follow up with the massive new boosts they promised (besides the pension fund). They've been building 800,000 square feet of new sort facility at IND for a year and change... https://www.indystar.com/story/news/2018/01/26/fedex-credits-tax-cuts-1-5-billion-expansion-indianapolis-hub/1068813001/ https://www.indystar.com/story/news/2018/01/26/fedex-credits... https://bgabuilders.com/fedex-indianapolis-ob4-project/ https://bgabuilders.com/fedex-indianapolis-ob4-project/ It's huge and runs right along side Interstate 70, you can see it from the other side of the airport just off of U.S. 40. I can walk to my car, drive about 10 yards out of my work parking lot and see it across the airport. It's very real and almost certainly didn't grow out of the ground on its own accord. They're also expanding in Greenwood, Indiana. They're also expanding at MEM. ...
    - ceejayoz 7y ago
      FedEx makes capital expenditures every year. The NYT is not alleging they stopped them. They're alleging they didn't increase them any more than they normally would, despite saying that's why they needed tax reductions. https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?w=587&fit=max&auto=format https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?... indicates their spending growth has largely just stayed what it was prior to the tax changes.
RC_ITR 7y ago
You're missing the giant acquisition they made between the $3B & that $5B... https://about.van.fedex.com/newsroom/fedex-acquires-tnt-express/ https://about.van.fedex.com/newsroom/fedex-acquires-tnt-expr... Take that out & how does it look?
- cascom 7y ago
  I don’t follow - that’s not CapEx, and 4.4B EUR on ~$70b in EV does not make the acquisition giant in relative terms

by cascom 7y ago

FedEx CapEx in $B '09-'18 $2.6,$3.4,$3.6,$3.6,$3.3,$3.8,$5.0,$5.0,$5.1,$5.6 Do you think the article fairly reflects the trends in the company's capital expenditures?

ceejayoz 7y ago

Yes, I think it does. FedEx's lobbying efforts argued reduced taxes would allow them to increase capital spending more than they would have otherwise. Instead, they look to have stuck to their trendline - and 2019's estimated is flat. Draw those numbers on a chart and it doesn't look like the tax cut generated much of a boost: https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?w=587&fit=max&auto=format https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?... Article from which the chart is drawn: https://articles2.marketrealist.com/2018/09/a-look-at-fedexs-capital-expenditure-in-q1-2019/ https://articles2.marketrealist.com/2018/09/a-look-at-fedexs...

drak0n1c 7y ago
The NYT in the paragraph you quoted vaguely paints the picture that investment is being cut significantly in favor of massive dividend payments. However, if the reality is that it is merely plateauing as you and the parent comment show, then doesn't that show their wording was misleading? Yes, FedEx didn't follow up with the massive new boosts they promised (besides the pension fund). However, the NYT should have included figures and stated it how you are in your comment - that growth factor is what has gone down, not the actual level of investment. I am not disputing what you say about FedEx, I just want NYT to be more careful and precise in its reporting.
- ceejayoz 7y ago
  It makes the point that they didn't even spend what they'd initially projected, let alone increase it like they said they would. They did not follow through with their lobbying promises. The fact that they instead increased stock buybacks etc. demonstrates a point of detractors of the tax law - that it's proceeds would most likely go back into already-wealthy pockets, not capital investment. It's not unreasonable to point it out here.
- ryanmercer 7y ago
  >Yes, FedEx didn't follow up with the massive new boosts they promised (besides the pension fund). They've been building 800,000 square feet of new sort facility at IND for a year and change... https://www.indystar.com/story/news/2018/01/26/fedex-credits-tax-cuts-1-5-billion-expansion-indianapolis-hub/1068813001/ https://www.indystar.com/story/news/2018/01/26/fedex-credits... https://bgabuilders.com/fedex-indianapolis-ob4-project/ https://bgabuilders.com/fedex-indianapolis-ob4-project/ It's huge and runs right along side Interstate 70, you can see it from the other side of the airport just off of U.S. 40. I can walk to my car, drive about 10 yards out of my work parking lot and see it across the airport. It's very real and almost certainly didn't grow out of the ground on its own accord. They're also expanding in Greenwood, Indiana. They're also expanding at MEM. ...
  - ceejayoz 7y ago
    FedEx makes capital expenditures every year. The NYT is not alleging they stopped them. They're alleging they didn't increase them any more than they normally would, despite saying that's why they needed tax reductions. https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?w=587&fit=max&auto=format https://marketrealist.imgix.net/uploads/2018/09/Capex-2.png?... indicates their spending growth has largely just stayed what it was prior to the tax changes.

RC_ITR 7y ago

You're missing the giant acquisition they made between the $3B & that $5B... https://about.van.fedex.com/newsroom/fedex-acquires-tnt-express/ https://about.van.fedex.com/newsroom/fedex-acquires-tnt-expr... Take that out & how does it look?

cascom 7y ago
I don’t follow - that’s not CapEx, and 4.4B EUR on ~$70b in EV does not make the acquisition giant in relative terms