FedEx Changes Name of FedEx Kinko's to FedEx Office, Will Record $891 Million Fourth Quarter Charge
Monday June 2, 4:05 pm ET
Board of Directors raises quarterly dividend by 10 percent

MEMPHIS, Tenn.--(BUSINESS WIRE)--FedEx Corporation (NYSE: FDX - News) today announced it will change the name of FedEx Kinko’s, the world's leading provider of document solutions and business services, to FedEx Office.

Source: FedEx Corp.

· FedEx Office (Photo: Business Wire). View Multimedia Gallery


Along with the strategic decision to minimize the use of the Kinko’s trade name, FedEx said it will record a charge of approximately $891 million ($696 million, net of tax, or $2.22 per diluted share) in its fiscal fourth quarter, which ended May 31. This charge relates predominately to one-time, non-cash impairment charges associated with the decision about the use of the Kinko’s trade name and goodwill resulting from the Kinko’s acquisition.

The components of the charge are as follows (in millions):

Trade name $515
Goodwill 367
Other 9

Total
$891

The charge was not included in the latest earnings guidance, issued on May 9. FedEx will announce earnings results on June 18 for the fourth quarter and fiscal year 2008.

The FedEx Office name better describes the wide range of services available at its retail centers and takes full advantage of the FedEx brand — long recognized for excellent customer service, quality and reliability. The centers will be rebranded during the next several years. The goodwill impairment charge reflects a decline in the current fair value of the FedEx Office unit in light of current economic conditions, the unit’s recent and forecasted performance and the decision to reduce the rate of store expansion.

“Kinko's was primarily a copy and print-service provider when it was acquired in 2004," said Brian D. Philips, president and chief executive officer of FedEx Office. "The name FedEx Office more accurately represents our broader role of providing superior information and services through our company-owned, digitally connected locations around the world. We are a back office for small businesses and a branch office for medium to large businesses and mobile professionals."

In May, Philips was named president and chief executive officer of FedEx Office. The unit’s senior management team was reduced and restructured to better support execution of the company’s strategy and to control costs. Earlier this year, the company reduced future capital commitments by slowing the rate of expansion from about 300 locations in fiscal year 2008 to about 70 in fiscal 2009.

These changes at FedEx Office are the latest in a series of moves designed to more sharply focus the division on profitable core revenue growth and incremental shipping volume, which contributes about $1 billion of revenues annually to FedEx Express and FedEx Ground.

In another action today, the FedEx Board of Directors declared a quarterly cash dividend of $0.11 per share on FedEx Corporation common stock, an increase of $0.01, or 10 percent, per share over the previous dividend payment. The dividend is payable July 1, 2008 to stockholders of record at the close of business on June 13, 2008.

About FedEx Office

FedEx Office is the world's leading provider of document solutions and business services. The Dallas-based company has a global network of about 1,900 digitally-connected locations in 11 countries. FedEx Office offers access to copying and digital printing, professional finishing, document creation, Internet access, computer rentals, videoconferencing, signs and graphics, notary, direct mail, office products, Web-based printing, and the full range of FedEx day-definite ground shipping and time-definite global express shipping services. For more information, please visit www.fedex.com.

 

I'm glad we're trying to do everything we can to lower our spending.

$891,000,000 is a lot of unused APU time, sitting in a friggin' sweat box.

 

I wonder how long they thought about "The FedEx Store"?

 

I'd love to know what $367 mil of "goodwill" represents. Color me skeptical, but my suspicion is that it's a payout to a few former Kinko's execs.

 

So Fedex buys the company, the name and the stores, and then has to pay an $891 Million, "one-time, non-cash impairment charge associated with the decision about the use of the Kinko’s trade name and goodwill resulting from the Kinko’s acquisition"????
Can you say accounting slight-of-hand to hide profits?
That, or it must have been a very strange buyout agreement that required the continued use of the Kinko's name. But why would Fedex agree to a clause like that in the buyout agreement?

 

 

$515 million for a change of name?

-They better not ask us for pay/benefit cuts in the next round of negotiations when they are doing dumb things like this!

N!

 

All on paper! FM accounting!

 

I wonder what it cost to change the name from Federal Express to FedEx? As well, I'd sure like to have what it cost the company to repaint all the jets. Remember what a big secret it was? A name change and a paint job. Bet it cost millions and millions.

 

I recall reading the total cost was less than an average TV commercial. Losing all the purple paint actually saved money, and having the airplanes painted white instead of purple means they're easier to keep cool.






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