FedEx Earnings Call Insights: Restructuring Outlook and Trans-Pacific Express
Tom Wadewitz – JPMorgan: I wanted to focus on – I guess the restructuring and kind of how you see the pace of that activity playing out. You indicated you expect – I think stronger pace of margin improvement in fiscal ’15, and then maybe a build in fiscal ’14. But are there any numbers that you can give us or kind of a range of numbers in terms of how much actual restructuring cost savings would be in that fiscal ’14 is that $200 million or $300 million, and how you – what you think that number might build to in terms of the restructuring driven operating income improvement in fiscal ’15?
Alan B. Graf, Jr. – EVP and CFO: Tom, this is Alan. Thanks for the question. I think I’ll answer two or the three parts if that’s okay. As we noted, we only had about 40% of the people leave on May 31 as we determined how many folks we needed to keep for longer period of time to continue our high service levels for both internal and external customers. So, I don’t know what everybody has in their models as in first call, but I suspect that there were people who are expecting to see higher FY ’14 benefit than what I’m currently looking at, which is the right thing for the company to do. I will tell you this that we expect ongoing savings, when we are — outgoing rate in FY ’16 to be well in excess of $600 million. The cash charges or the business realignment charges from an accounting standpoint, as we said were $560 million in 2013. The cash outflows actually are spread out as people leave. We expect about a 21-month payback on this program, so we’re thrilled with where we are and think we’ve got right in the sweet spot, but less benefit in ’14 and much greater in ’15 and ’16.
David J. Bronczek – President and CEO, FedEx Express: Tom, this is Dave Bronczek. I’ll add to what Alan said. We talked about at the analyst meeting; the FY ’16 target of our $1.6 billion profit improvement is still on target. 75% of that accrues by FY ’15 and we’re right on track to hit those goals.