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<blockquote data-quote="Ricochet1a" data-source="post: 863746" data-attributes="member: 22880"><p>FedEx Corporation can and does move cash around from each of its operating companies. How do you think each of the operating companies were started: Office/Kinkos, Ground, Freight, LTL - before being absorbed by Freight? Each was PURCHASED with cash gained through the business operations of EXPRESS - then funneled up to FedEx Corporation. All perfectly legal, but you seem to be advocating that each op-co has a separate "kitty" of cash and is isolated from the other op-co's. Couldn't be further from the truth. If FedEx Corporation didn't have the cow of Express to draw cash from, none of those other op-co's would've even been purchased, or sustained during their period of unprofitability (on an op-co level basis). All of the non-Express op-co's are more profitable than Express now, but even now, the capital investments that are being made in each still use more cash than the individual op-co generates in profits. When that huge write-off was taken in the Kinko's fiasco, did Kinko's take the loss? No, FedEx as a whole took the loss. That loss went against the OVERALL corporate profitability and affected stock price for FedEx. There is no stock for each of the op-co's, there is only one stock - FedEx, which covers the entire shooting match. </p><p></p><p>If it wasn't for the ability of FedEx to move capital around, establish separate operating companies and then use Express as the cow to keep each op-co going through their initial organization phase, there would be no FedEx Corporation, there would be the old Federal Express.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 863746, member: 22880"] FedEx Corporation can and does move cash around from each of its operating companies. How do you think each of the operating companies were started: Office/Kinkos, Ground, Freight, LTL - before being absorbed by Freight? Each was PURCHASED with cash gained through the business operations of EXPRESS - then funneled up to FedEx Corporation. All perfectly legal, but you seem to be advocating that each op-co has a separate "kitty" of cash and is isolated from the other op-co's. Couldn't be further from the truth. If FedEx Corporation didn't have the cow of Express to draw cash from, none of those other op-co's would've even been purchased, or sustained during their period of unprofitability (on an op-co level basis). All of the non-Express op-co's are more profitable than Express now, but even now, the capital investments that are being made in each still use more cash than the individual op-co generates in profits. When that huge write-off was taken in the Kinko's fiasco, did Kinko's take the loss? No, FedEx as a whole took the loss. That loss went against the OVERALL corporate profitability and affected stock price for FedEx. There is no stock for each of the op-co's, there is only one stock - FedEx, which covers the entire shooting match. If it wasn't for the ability of FedEx to move capital around, establish separate operating companies and then use Express as the cow to keep each op-co going through their initial organization phase, there would be no FedEx Corporation, there would be the old Federal Express. [/QUOTE]
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