Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Aug. 31, 2017 | Sep. 18, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | FedEx Corporation | |
Entity Central Index Key | 1,048,911 | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 268,147,668 | |
Trading Symbol | FDX |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Aug. 31, 2017 | May 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 3,503 | $ 3,969 |
Receivables, less allowances of $334 and $252 | 8,006 | 7,599 |
Spare parts, supplies and fuel, less allowances of $243 and $237 | 516 | 514 |
Prepaid expenses and other | 697 | 546 |
Total current assets | 12,722 | 12,628 |
PROPERTY AND EQUIPMENT, AT COST | 51,540 | 50,626 |
Less accumulated depreciation and amortization | 25,305 | 24,645 |
Net property and equipment | 26,235 | 25,981 |
OTHER LONG-TERM ASSETS | ||
Goodwill | 7,382 | 7,154 |
Other assets | 3,011 | 2,789 |
Total other long-term assets | 10,393 | 9,943 |
ASSETS | 49,350 | 48,552 |
CURRENT LIABILITIES | ||
Current portion of long-term debt | 19 | 22 |
Accrued salaries and employee benefits | 1,656 | 1,914 |
Accounts payable | 2,938 | 2,752 |
Accrued expenses | 3,177 | 3,230 |
Total current liabilities | 7,790 | 7,918 |
LONG-TERM DEBT, LESS CURRENT PORTION | 15,137 | 14,909 |
OTHER LONG-TERM LIABILITIES | ||
Deferred income taxes | 2,730 | 2,485 |
Pension, postretirement healthcare and other benefit obligations | 4,313 | 4,487 |
Self-insurance accruals | 1,603 | 1,494 |
Deferred lease obligations | 575 | 531 |
Deferred gains, principally related to aircraft transactions | 126 | 137 |
Other liabilities | 458 | 518 |
Total other long-term liabilities | 9,805 | 9,652 |
COMMITMENTS AND CONTINGENCIES | ||
COMMON STOCKHOLDERS' INVESTMENT | ||
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of August 31, 2017 and May 31, 2017 | 32 | 32 |
Additional paid-in capital | 3,030 | 3,005 |
Retained earnings | 21,156 | 20,833 |
Accumulated other comprehensive loss | (325) | (415) |
Treasury stock, at cost | (7,275) | (7,382) |
Total common stockholders’ investment | 16,618 | 16,073 |
LIABILITIES AND STOCKHOLDERS' INVESTMENT | $ 49,350 | $ 48,552 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Aug. 31, 2017 | May 31, 2017 |
CURRENT ASSETS | ||
Allowances for receivables | $ 334 | $ 252 |
Allowances for spare parts, supplies and fuel | $ 243 | $ 237 |
COMMON STOCKHOLDERS' INVESTMENT | ||
Common stock, par value | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 318,000,000 | 318,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Income Statement [Abstract] | ||
REVENUES | $ 15,297 | $ 14,663 |
OPERATING EXPENSES: | ||
Salaries and employee benefits | 5,518 | 5,311 |
Purchased transportation | 3,445 | 3,240 |
Rentals and landing fees | 818 | 790 |
Depreciation and amortization | 751 | 739 |
Fuel | 703 | 650 |
Maintenance and repairs | 675 | 598 |
Other | 2,270 | 2,071 |
OPERATING EXPENSES | 14,180 | 13,399 |
OPERATING INCOME | 1,117 | 1,264 |
OTHER INCOME (EXPENSE): | ||
Interest, net | (114) | (113) |
Other, net | (21) | (9) |
OTHER INCOME (EXPENSE) | (135) | (122) |
INCOME BEFORE INCOME TAXES | 982 | 1,142 |
PROVISION FOR INCOME TAXES | 386 | 427 |
NET INCOME | $ 596 | $ 715 |
EARNINGS PER COMMON SHARE: | ||
Basic | $ 2.22 | $ 2.69 |
Diluted | 2.19 | 2.65 |
DIVIDENDS DECLARED PER COMMON SHARE | $ 1 | $ 0.80 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
NET INCOME | $ 596 | $ 715 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||
Foreign currency translation adjustments, net of tax benefit of $25 in 2017 and tax expense of $4 in 2016 | 109 | 12 |
Amortization of prior service credit, net of tax benefit of $11 in 2017 and $11 in 2016 | (19) | (19) |
Other comprehensive income (loss) | 90 | (7) |
COMPREHENSIVE INCOME | $ 686 | $ 708 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Other Comprehensive Income, Tax Amounts | ||
Foreign currency translation adjustments, tax (expense) benefit | $ 25 | $ (4) |
Amortization of prior service credit, tax benefit | $ 11 | $ 11 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Operating Activities: | ||
Net income | $ 596 | $ 715 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 751 | 739 |
Provision for uncollectible accounts | 60 | 39 |
Stock-based compensation | 62 | 57 |
Deferred income taxes and other noncash items | 97 | 173 |
Changes in assets and liabilities: | ||
Receivables | (271) | 20 |
Other assets | (142) | (4) |
Accounts payable and other liabilities | (540) | (753) |
Other, net | (23) | (15) |
Cash provided by operating activities | 590 | 971 |
Investing Activities: | ||
Capital expenditures | (1,044) | (1,215) |
Proceeds from asset dispositions and other | 6 | 9 |
Cash used in investing activities | (1,038) | (1,206) |
Financing Activities: | ||
Principal payments on debt | (12) | (12) |
Proceeds from stock issuances | 150 | 40 |
Dividends paid | (134) | (106) |
Purchase of treasury stock | (86) | (222) |
Other, net | (6) | (13) |
Cash used in financing activities | (88) | (313) |
Effect of exchange rate changes on cash | 70 | 3 |
Net decrease in cash and cash equivalents | (466) | (545) |
Cash and cash equivalents at beginning of period | 3,969 | 3,534 |
Cash and cash equivalents at end of period | $ 3,503 | $ 2,989 |
General
General | 3 Months Ended |
Aug. 31, 2017 | |
General [Abstract] | |
General | (1) General SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2017 (“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of August 31, 2017, the results of our operations and cash flows for the three-month periods ended August 31, 2017 and 2016. Operating results for the three-month period ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2018. Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year. EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who represent a small number of its total employees, are employed under a collective bargaining agreement that took effect on November 2, 2015. This collective bargaining agreement is scheduled to become amendable in November 2021, after a six-year term. In addition to our pilots at FedEx Express, FedEx Supply Chain Distribution System, Inc. (“FedEx Supply Chain”) has a small number of employees who are members of unions, and certain non-U.S. employees are unionized. STOCK-BASED COMPENSATION. We have two types of equity-based compensation: stock options and restricted stock. The key terms of the stock option and restricted stock awards granted under our incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report. Our stock-based compensation expense was $62 million for the three-month period ended August 31, 2017 and $57 million for the three-month period ended August 31, 2016. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report. RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly impact our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our financial statements. During the first quarter of 2018, we early adopted the Accounting Standard Update issued by the Financial Accounting Standards Board (“FASB”) related to Intra-Entity Transfers of Assets Other Than Inventory. This update requires companies to recognize the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs, as opposed to when the assets are ultimately sold to an outside party. This new guidance had a minimal impact on our accounting and financial reporting for the first quarter of 2018. On May 28, 2014, the FASB and International Accounting Standards Board issued a new accounting standard that will supersede virtually all existing revenue recognition guidance under generally accepted accounting principles in the United States. This standard will be effective for us beginning in fiscal 2019. The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided. The new guidance establishes a five-step approach for the recognition of revenue. We are continuing to assess the impact of this new standard on our consolidated financial statements and related disclosures, including ongoing contract reviews. We do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems. On February 25, 2016, the FASB issued a new lease accounting standard which requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The new standard states that a lessee will recognize a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Expenses related to leases determined to be operating leases will be recognized on a straight-line basis, while those determined to be financing leases will be recognized following a front-loaded expense profile in which interest and amortization are presented separately in the income statement. Based on our lease portfolio, we currently anticipate recognizing a lease liability and related right-of-use asset on the balance sheet in excess of $13 billion with an immaterial impact on our income statement compared to the current lease accounting model. However, the ultimate impact of the standard will depend on the company’s lease portfolio as of the adoption date. We are currently in the process of evaluating our existing lease portfolios, including accumulating all of the necessary information required to properly account for the leases under the new standard. Additionally, we are implementing an enterprise-wide lease management system to assist in the accounting and are evaluating additional changes to our processes and internal controls to ensure we meet the standard’s reporting and disclosure requirements. These changes will be effective for our fiscal year beginning June 1, 2019 (fiscal 2020), with a modified retrospective adoption method to the beginning of 2018. In March 2017, the FASB issued an Accounting Standards Update that changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic benefit cost in the income statement. This new guidance requires entities to report the service cost component in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component outside of income from operations. This standard will impact our operating income but will have no impact on our net income or earnings per share. For example, adoption of this guidance would have reduced operating income in the first quarter of 2018 by $146 million and by $112 million in the first quarter of 2017, but would not have impacted our net income in either period. This new guidance will be effective for our fiscal year beginning June 1, 2018 (fiscal 2019) and will be applied retrospectively. TREASURY SHARES. In January 2016, our Board of Directors authorized a share repurchase program of up to 25 million shares. Shares under the current repurchase program may be repurchased from time to time in the open market or in privately negotiated transactions. The timing and volume of repurchases are at the discretion of management, based on the capital needs of the business, the market price of FedEx common stock and general market conditions. No time limit was set for the completion of the program, and the program may be suspended or discontinued at any time. During the first quarter of 2018, we repurchased 0.4 million shares of FedEx common stock at an average price of $207.92 per share for a total of $86 million. As of August 31, 2017, 15.6 million shares remained under the share repurchase authorization. DIVIDENDS DECLARED PER COMMON SHARE. On August 18, 2017, our Board of Directors declared a quarterly dividend of $0.50 per share of common stock. The dividend will be paid on October 2, 2017 to stockholders of record as of the close of business on September 11, 2017. Each quarterly dividend payment is subject to review and approval by our Board of Directors, and we evaluate our dividend payment amount on an annual basis at the end of each fiscal year. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Aug. 31, 2017 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | (2) Accumulated Other Comprehensive Income (Loss) The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to AOCI): 2017 2016 Foreign currency translation loss: Balance at beginning of period $ (685 ) $ (514 ) Translation adjustments 109 12 Balance at end of period (576 ) (502 ) Retirement plans adjustments: Balance at beginning of period 270 345 Reclassifications from AOCI (19 ) (19 ) Balance at end of period 251 326 Accumulated other comprehensive (loss) at end of period $ (325 ) $ (176 ) The following table presents details of the reclassifications from AOCI for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to earnings): Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Amortization of retirement plans prior service credits, before tax $ 30 $ 30 Salaries and employee benefits Income tax benefit (11 ) (11 ) Provision for income taxes AOCI reclassifications, net of tax $ 19 $ 19 Net income |
Financing Arrangements
Financing Arrangements | 3 Months Ended |
Aug. 31, 2017 | |
Debt And Capital Lease Obligations [Abstract] | |
Financing Arrangements | (3) Financing Arrangements We have a shelf registration statement with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock. We have a five-year $1.75 billion revolving credit facility that expires in November 2020. The facility, which includes a $500 million letter of credit sublimit, is available to finance our operations and other cash flow needs. The agreement contains a financial covenant, which requires us to maintain a ratio of debt to consolidated earnings (excluding non-cash pension mark-to-market adjustments and non-cash asset impairment charges) before interest, taxes, depreciation and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the end of the applicable quarter on a rolling four-quarters basis. The ratio of our debt to adjusted EBITDA was 1.9 to 1.0 at August 31, 2017. We believe this covenant is the only significant restrictive covenant in our revolving credit agreement. Our revolving credit agreement contains other customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the financial covenant and all other covenants of our revolving credit agreement and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. As of August 31, 2017, no commercial paper was outstanding. However, we had a total of $317 million in letters of credit outstanding at August 31, 2017, with $183 million of the letter of credit sublimit unused under our revolving credit facility. Long-term debt, exclusive of capital leases, had carrying values of $15.1 billion at August 31, 2017 and $14.9 billion at May 31, 2017, compared with estimated fair values of $15.9 billion at August 31, 2017 and $15.5 billion at May 31, 2017. The annualized weighted average interest rate on long-term debt was 3.6% for the three-months ended August 31, 2017. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified as Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly. |
Computation of Earnings Per Sha
Computation of Earnings Per Share | 3 Months Ended |
Aug. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | (4) Computation of Earnings Per Share The calculation of basic and diluted earnings per common share for the three-month periods ended August 31 was as follows (in millions, except per share amounts): 2017 2016 Basic earnings per common share: Net earnings allocable to common shares (1) $ 595 $ 714 Weighted-average common shares 268 265 Basic earnings per common share $ 2.22 $ 2.69 Diluted earnings per common share: Net earnings allocable to common shares (1) $ 595 $ 714 Weighted-average common shares 268 265 Dilutive effect of share-based awards 4 4 Weighted-average diluted shares 272 269 Diluted earnings per common share $ 2.19 $ 2.65 Anti-dilutive options excluded from diluted earnings per common share 3.2 5.1 (1) Net earnings available to participating securities were immaterial in all periods presented. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Aug. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | (5) Retirement Plans We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report. Our retirement plans costs for the three-month periods ended August 31 were as follows (in millions): 2017 2016 Defined benefit pension plans $ 37 $ 58 Defined contribution plans 127 119 Postretirement healthcare plans 19 19 $ 183 $ 196 Net periodic benefit cost of the pension and postretirement healthcare plans for the three-month periods ended August 31 included the following components (in millions): U.S. Pension Plans International Pension Plans Postretirement Healthcare Plans 2017 2016 2017 2016 2017 2016 Service cost $ 170 $ 160 $ 23 $ 20 $ 9 $ 9 Interest cost 279 282 12 11 10 10 Expected return on plan assets (406 ) (375 ) (11 ) (11 ) — — Amortization of prior service credit and other (30 ) (30 ) — 1 — — $ 13 $ 37 $ 24 $ 21 $ 19 $ 19 Contributions to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) for the three-month periods ended August 31 were as follows (in millions): 2017 2016 Required $ — $ — Voluntary 250 250 $ 250 $ 250 In September 2017, we made $250 million in required contributions to our U.S. Pension Plans. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Aug. 31, 2017 | |
Segment Reporting Disclosure Of Entitys Reportable Segments [Abstract] | |
Business Segment Information | (6) Business Segment Information We provide a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the respected FedEx brand. Our primary operating companies are FedEx Express, including TNT Express B.V. (“TNT Express”), the world’s largest express transportation company; FedEx Ground Package System, Inc. (“FedEx Ground”), a leading North American provider of small-package ground delivery services; and FedEx Freight, Inc. (“FedEx Freight”), a leading U.S. provider of less-than-truckload (“LTL”) freight services. These companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), form the core of our reportable segments. Our reportable segments include the following businesses: FedEx Express Segment FedEx Express (express transportation) TNT Express (international express transportation, small-package ground delivery and freight transportation) FedEx Trade Networks (air and ocean freight forwarding, customs brokerage and cross-border enablement technology and solutions) FedEx Ground Segment FedEx Ground (small-package ground delivery) FedEx Supply Chain (third-party logistics) FedEx Freight Segment FedEx Freight (LTL freight transportation) FedEx Custom Critical (time-critical transportation) FedEx Services Segment FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services and back-office functions) FedEx Office (document and business services and package acceptance) As discussed in our Annual Report, in the first quarter of 2018, we began to report TNT Express as part of the FedEx Express segment. Prior year amounts have been revised to conform to the current year presentation. FedEx Services Segment The FedEx Services segment operates combined sales, marketing, administrative and information technology functions that support our transportation businesses and allow us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions are performed on a regional basis and reported in their natural expense line items. The FedEx Services segment includes: FedEx Services, which provides sales, marketing, information technology, communications, customer service, technical support, billing and collection services for U.S. customers of our major business units and certain back-office support to our other companies; and FedEx Office, which provides an array of document and business services and retail access to our customers for our package transportation businesses. The FedEx Services segment provides direct and indirect support to our transportation businesses, and we allocate all of the net operating costs of the FedEx Services segment (including the net operating results of FedEx Office) to reflect the full cost of operating our transportation businesses in the results of those segments. Within the FedEx Services segment allocation, the net operating results of FedEx Office, which are an immaterial component of our allocations, are allocated to FedEx Express and FedEx Ground. We review and evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance is evaluated based on the impact of its total allocated net operating costs on our transportation segments. Operating expenses for each of our transportation segments include the allocations from the FedEx Services segment to the respective transportation segments. These allocations also include charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenues or estimated services provided. We believe these allocations approximate the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses. Eliminations, Corporate and Other Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenues of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenues and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material. Corporate and other includes corporate headquarters costs for executive officers and certain legal and financial functions, as well as certain other costs and credits not attributed to our core business. These costs are not allocated to the business segments. The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the three-month periods ended August 31 (in millions): 2017 2016 Revenues FedEx Express segment $ 8,652 $ 8,460 FedEx Ground segment 4,639 4,290 FedEx Freight segment 1,752 1,658 FedEx Services segment 400 395 Eliminations and other (146 ) (140 ) $ 15,297 $ 14,663 Operating Income FedEx Express segment $ 433 $ 610 FedEx Ground segment 626 610 FedEx Freight segment 176 135 Eliminations, corporate and other (118 ) (91 ) $ 1,117 $ 1,264 |
Commitments
Commitments | 3 Months Ended |
Aug. 31, 2017 | |
Commitments [Abstract] | |
Commitments | (7) Commitments As of August 31, 2017, our purchase commitments under various contracts for the remainder of 2018 and annually thereafter were as follows (in millions): Aircraft and Aircraft-Related Other (1) Total 2018 (remainder) $ 1,398 $ 1,250 $ 2,648 2019 1,713 636 2,349 2020 1,927 490 2,417 2021 1,335 376 1,711 2022 1,273 206 1,479 Thereafter 2,884 499 3,383 Total $ 10,530 $ 3,457 $ 13,987 (1) Primarily equipment and advertising contracts. The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of August 31, 2017, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and six Boeing 777 Freighter (“B777F”) aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. We had $860 million in deposits and progress payments as of August 31, 2017 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of August 31, 2017 with the year of expected delivery: B767F B777F Total 2018 (remainder) 11 4 15 2019 15 2 17 2020 16 3 19 2021 10 3 13 2022 10 4 14 Thereafter 6 - 6 Total 68 16 84 A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2017 is as follows (in millions): Aircraft and Related Equipment Facilities and Other Total Operating Leases 2018 (remainder) $ 362 $ 1,616 $ 1,978 2019 343 1,972 2,315 2020 261 1,755 2,016 2021 203 1,587 1,790 2022 185 1,431 1,616 Thereafter 175 8,651 8,826 Total $ 1,529 $ 17,012 $ 18,541 Future minimum lease payments under capital leases were immaterial at August 31, 2017. While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations. |
Contingencies
Contingencies | 3 Months Ended |
Aug. 31, 2017 | |
Loss Contingency [Abstract] | |
Contingencies | (8) Contingencies Independent Contractor — Lawsuits and Administrative Proceedings. FedEx Ground is involved in lawsuits and administrative proceedings claiming that owner-operators engaged under a contractor model no longer in use should have been treated as employees of FedEx Ground, rather than independent contractors. Most of the independent contractor class-action lawsuits were consolidated for certain proceedings before a single federal court, the U.S. District Court for the Northern District of Indiana. This multidistrict litigation court granted class certification in 28 cases, and after granting summary judgment in FedEx Ground’s favor on some (but not all) of the claims, remanded eight certified class actions back to the district courts where they were originally filed, leaving 20 cases to be administered by the multidistrict litigation court. Settlements in these 20 cases were reached during 2016 and 2017, and by the end of the first quarter of 2018, the multidistrict litigation court granted final approval of all 20 settlements. Of the eight cases that were remanded to the district courts, seven of these matters settled for immaterial amounts and have received court approval. The remaining case that was remanded to California was appealed to the Ninth Circuit Court of Appeals, which granted summary judgment in favor of the plaintiffs. In June 2015, the parties in this case reached an agreement to settle the matter for $228 million. The court entered final judgment in June 2016, and two objectors to the settlement filed appeals with the Ninth Circuit. One objector has settled with plaintiffs’ counsel, and the court has indicated that it will schedule argument on the second objector’s appeal during the second quarter of 2018. The settlement is not effective until all appeals have been resolved without affecting the court’s approval of the settlement. In addition, we are defending contractor-model cases that were not part of the multidistrict litigation, and we are defending joint-employer cases where it is alleged that FedEx Ground should be treated as an employer of the drivers employed by owner-operators engaged by FedEx Ground. These cases are in varying stages of litigation, and we are not currently able to estimate an amount or range of potential loss in all of these matters. However, we do not expect to incur, individually or in the aggregate, a material loss in these matters. Nevertheless, adverse determinations in matters related to owner-operators engaged by FedEx Ground could, among other things, entitle certain owner-operators to the reimbursement of certain expenses, and their drivers to the benefit of wage-and-hour laws, and result in employment and withholding tax and benefit liability for FedEx Ground. We believe that owner-operators engaged by FedEx Ground are properly classified as independent contractors and that FedEx Ground is not an employer of the drivers employed by these owner-operators. City and State of New York Cigarette Suit. The City of New York and the State of New York filed two related lawsuits against FedEx Ground in December 2013 and November 2014 arising from FedEx Ground’s alleged shipments of cigarettes to New York residents in contravention of several statutes, including the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and New York’s Public Health Law, as well as common law nuisance claims. In April 2016, the two lawsuits were consolidated and will now proceed as one lawsuit. The first-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of four shippers, and the second-filed lawsuit alleges that FedEx Ground provided delivery services on behalf of six additional shippers; none of these shippers continue to ship in our network. Following motions to dismiss filed in both lawsuits, some of the claims were dismissed entirely or limited. In the first-filed lawsuit, the New York Public Health Law and common law nuisance claims were dismissed and the plaintiffs voluntarily dismissed another claim. In the second-filed lawsuit, the common law nuisance claim was dismissed entirely and the New York Public Health Law claim has been limited to claims arising after September 27, 2013, when an amendment to that law provided enforcement authority to the City of New York and State of New York. Other claims, including the RICO claims, remain in both lawsuits. The likelihood of loss is reasonably possible, but the amount or range of loss, if any, cannot be estimated at this stage of the litigation, and we expect the amount of any loss to be immaterial. On July 10, 2017, the City of New York and the State of New York filed a third lawsuit against FedEx Ground and included FedEx Freight as a co-defendant. This new case identifies no shippers or shipments, but generally alleges violations of the same laws that are the subject of the other two lawsuits. The amount or range of loss, if any, cannot be estimated at this stage of the lawsuit. Environmental Matters . SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that management reasonably believes could exceed $100,000. On September 9, 2016, FedEx Supply Chain received a written offer from several District Attorneys’ Offices in California to settle a civil action that the District Attorneys intend to file against FedEx Supply Chain for alleged violations of the state’s hazardous waste regulations. Specifically, the District Attorneys’ Offices allege FedEx Supply Chain unlawfully disposed of hazardous waste at one of its California facilities and caused the illegal transportation and disposal of hazardous waste from the retail stores of a FedEx Supply Chain customer at this same facility. The District Attorneys allege these violations began in 2006 and continued until the facility closed in the spring of 2015. We believe an immaterial loss in this matter is probable, and we will pursue all available remedies against the sellers of GENCO to recover any losses in this matter. Other Matters. During the third quarter of 2017, FedEx Trade Networks informed U.S. Customs and Border Protection (“CBP”) that in connection with certain customs entries it may have made improper claims for (i) reduced-duty treatment and (ii) duty-free treatment. In the fourth quarter of 2017 we established accruals totaling $39.3 million for the then-current estimated probable loss for these matters. In the first quarter of 2018, FedEx Trade Networks tendered payments to CBP in these matters totaling $46.5 million, and an additional expense of $7.2 million was recognized. CBP acknowledged receipt of the amounts tendered in these matters, and we are awaiting a response indicating whether these matters are fully resolved. FedEx and its subsidiaries are subject to other legal proceedings that arise in the ordinary course of business, including certain lawsuits containing various class-action allegations of wage-and-hour violations in which plaintiffs claim, among other things, that they were forced to work “off the clock,” were not paid overtime or were not provided work breaks or other benefits. In the opinion of management, the aggregate liability, if any, with respect to these other actions will not have a material adverse effect on our financial position, results of operations or cash flows. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Aug. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | (9) Supplemental Cash Flow Information Cash paid for interest expense and income taxes for the three-month periods ended August 31 was as follows (in millions): 2017 2016 Cash payments for: Interest (net of capitalized interest) $ 153 $ 143 Income taxes $ 96 $ 80 Income tax refunds received (10 ) (8 ) Cash tax payments, net $ 86 $ 72 |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 3 Months Ended |
Aug. 31, 2017 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | (10) Condensed Consolidating Financial Statements We are required to present condensed consolidating financial information in order for the subsidiary guarantors of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended. The guarantor subsidiaries, which are 100% owned by FedEx, guarantee $15.0 billion of our debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the “Guarantor Subsidiaries” and “Non-guarantor Subsidiaries” columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting. Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions): CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED) August 31, 2017 Guarantor Non-guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,681 $ 343 $ 1,519 $ (40 ) $ 3,503 Receivables, less allowances 2 4,852 3,241 (89 ) 8,006 Spare parts, supplies, fuel, prepaid expenses and other, less allowances 41 931 241 — 1,213 Total current assets 1,724 6,126 5,001 (129 ) 12,722 PROPERTY AND EQUIPMENT, AT COST 22 47,939 3,579 — 51,540 Less accumulated depreciation and amortization 18 23,761 1,526 — 25,305 Net property and equipment 4 24,178 2,053 — 26,235 INTERCOMPANY RECEIVABLE 1,578 2,744 — (4,322 ) — GOODWILL — 1,570 5,812 — 7,382 INVESTMENT IN SUBSIDIARIES 28,433 2,672 — (31,105 ) — OTHER ASSETS 3,492 1,403 1,308 (3,192 ) 3,011 $ 35,231 $ 38,693 $ 14,174 $ (38,748 ) $ 49,350 LIABILITIES AND STOCKHOLDERS’ INVESTMENT CURRENT LIABILITIES Current portion of long-term debt $ — $ 6 $ 13 $ — $ 19 Accrued salaries and employee benefits 50 1,116 490 — 1,656 Accounts payable 149 1,429 1,489 (129 ) 2,938 Accrued expenses 891 1,520 766 — 3,177 Total current liabilities 1,090 4,071 2,758 (129 ) 7,790 LONG-TERM DEBT, LESS CURRENT PORTION 14,872 244 21 — 15,137 INTERCOMPANY PAYABLE — — 4,322 (4,322 ) — OTHER LONG-TERM LIABILITIES Deferred income taxes — 5,753 169 (3,192 ) 2,730 Other liabilities 2,651 3,526 898 — 7,075 Total other long-term liabilities 2,651 9,279 1,067 (3,192 ) 9,805 STOCKHOLDERS’ INVESTMENT 16,618 25,099 6,006 (31,105 ) 16,618 $ 35,231 $ 38,693 $ 14,174 $ (38,748 ) $ 49,350 CONDENSED CONSOLIDATING BALANCE SHEETS May 31, 2017 Guarantor Non-guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,884 $ 325 $ 1,807 $ (47 ) $ 3,969 Receivables, less allowances 3 4,729 2,928 (61 ) 7,599 Spare parts, supplies, fuel, prepaid expenses and other, less allowances 25 787 248 — 1,060 Total current assets 1,912 5,841 4,983 (108 ) 12,628 PROPERTY AND EQUIPMENT, AT COST 22 47,201 3,403 — 50,626 Less accumulated depreciation and amortization 18 23,211 1,416 — 24,645 Net property and equipment 4 23,990 1,987 — 25,981 INTERCOMPANY RECEIVABLE 1,521 2,607 — (4,128 ) — GOODWILL — 1,571 5,583 — 7,154 INVESTMENT IN SUBSIDIARIES 27,712 2,636 — (30,348 ) — OTHER ASSETS 3,494 1,271 1,249 (3,225 ) 2,789 $ 34,643 $ 37,916 $ 13,802 $ (37,809 ) $ 48,552 LIABILITIES AND STOCKHOLDERS’ INVESTMENT CURRENT LIABILITIES Current portion of long-term debt $ — $ 9 $ 13 $ — $ 22 Accrued salaries and employee benefits 72 1,335 507 — 1,914 Accounts payable 10 1,411 1,439 (108 ) 2,752 Accrued expenses 991 1,522 717 — 3,230 Total current liabilities 1,073 4,277 2,676 (108 ) 7,918 LONG-TERM DEBT, LESS CURRENT PORTION 14,641 244 24 — 14,909 INTERCOMPANY PAYABLE — — 4,128 (4,128 ) — OTHER LONG-TERM LIABILITIES Deferred income taxes — 5,472 238 (3,225 ) 2,485 Other liabilities 2,856 3,448 863 — 7,167 Total other long-term liabilities 2,856 8,920 1,101 (3,225 ) 9,652 STOCKHOLDERS’ INVESTMENT 16,073 24,475 5,873 (30,348 ) 16,073 $ 34,643 $ 37,916 $ 13,802 $ (37,809 ) $ 48,552 CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended August 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES $ — $ 11,567 $ 3,854 $ (124 ) $ 15,297 OPERATING EXPENSES: Salaries and employee benefits 38 4,227 1,253 — 5,518 Purchased transportation — 2,063 1,464 (82 ) 3,445 Rentals and landing fees 1 627 191 (1 ) 818 Depreciation and amortization — 639 112 — 751 Fuel — 637 66 — 703 Maintenance and repairs — 602 73 — 675 Intercompany charges, net (116 ) 113 3 — — Other 77 1,476 758 (41 ) 2,270 — 10,384 3,920 (124 ) 14,180 OPERATING INCOME — 1,183 (66 ) — 1,117 OTHER INCOME (EXPENSE): Equity in earnings of subsidiaries 596 (3 ) — (593 ) — Interest, net (129 ) 13 2 — (114 ) Intercompany charges, net 131 (71 ) (60 ) — — Other, net (2 ) (8 ) (11 ) — (21 ) INCOME BEFORE INCOME TAXES 596 1,114 (135 ) (593 ) 982 Provision for income taxes — 399 (13 ) — 386 NET INCOME $ 596 $ 715 $ (122 ) $ (593 ) $ 596 COMPREHENSIVE INCOME $ 578 $ 719 $ (18 ) $ (593 ) $ 686 CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended August 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES $ — $ 10,903 $ 3,830 $ (70 ) $ 14,663 OPERATING EXPENSES: Salaries and employee benefits 36 4,106 1,169 — 5,311 Purchased transportation — 1,917 1,351 (28 ) 3,240 Rentals and landing fees 1 620 170 (1 ) 790 Depreciation and amortization — 611 128 — 739 Fuel — 578 72 — 650 Maintenance and repairs — 526 72 — 598 Intercompany charges, net (90 ) 62 28 — — Other 53 1,373 686 (41 ) 2,071 — 9,793 3,676 (70 ) 13,399 OPERATING INCOME — 1,110 154 — 1,264 OTHER INCOME (EXPENSE): Equity in earnings of subsidiaries 715 56 — (771 ) — Interest, net (122 ) 9 — — (113 ) Intercompany charges, net 122 (81 ) (41 ) — — Other, net — (5 ) (4 ) — (9 ) INCOME BEFORE INCOME TAXES 715 1,089 109 (771 ) 1,142 Provision for income taxes — 380 47 — 427 NET INCOME $ 715 $ 709 $ 62 $ (771 ) $ 715 COMPREHENSIVE INCOME $ 696 $ 702 $ 81 $ (771 ) $ 708 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended August 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (878 ) $ 1,717 $ (256 ) $ 7 $ 590 INVESTING ACTIVITIES Capital expenditures — (985 ) (59 ) — (1,044 ) Proceeds from asset dispositions and other — 6 — — 6 CASH USED IN INVESTING ACTIVITIES — (979 ) (59 ) — (1,038 ) FINANCING ACTIVITIES Net transfers from (to) Parent 744 (735 ) (9 ) — — Principal payments on debt — (8 ) (4 ) — (12 ) Proceeds from stock issuances 150 — — — 150 Dividends paid (134 ) — — — (134 ) Purchase of treasury stock (86 ) — — — (86 ) Other, net 3 — (9 ) — (6 ) CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 677 (743 ) (22 ) — (88 ) Effect of exchange rate changes on cash (2 ) 23 49 — 70 Net (decrease) increase in cash and cash equivalents (203 ) 18 (288 ) 7 (466 ) Cash and cash equivalents at beginning of period 1,884 325 1,807 (47 ) 3,969 Cash and cash equivalents at end of period $ 1,681 $ 343 $ 1,519 $ (40 ) $ 3,503 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended August 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (342 ) $ 1,119 $ 188 $ 6 $ 971 INVESTING ACTIVITIES Capital expenditures — (1,111 ) (104 ) — (1,215 ) Proceeds from asset dispositions and other — 9 — — 9 CASH USED IN INVESTING ACTIVITIES — (1,102 ) (104 ) — (1,206 ) FINANCING ACTIVITIES Net transfers from (to) Parent (35 ) (2 ) 37 — — Payment on loan between subsidiaries (2 ) (14 ) 16 — — Principal payments on debt — (7 ) (5 ) — (12 ) Proceeds from stock issuances 40 — — — 40 Dividends paid (106 ) — — — (106 ) Purchase of treasury stock (222 ) — — — (222 ) Other, net 1 (1 ) (13 ) — (13 ) CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (324 ) (24 ) 35 — (313 ) Effect of exchange rate changes on cash — 8 (5 ) — 3 Net (decrease) increase in cash and cash equivalents (666 ) 1 114 6 (545 ) Cash and cash equivalents at beginning of period 1,974 326 1,277 (43 ) 3,534 Cash and cash equivalents at end of period $ 1,308 $ 327 $ 1,391 $ (37 ) $ 2,989 |
General (Policies)
General (Policies) | 3 Months Ended |
Aug. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. These interim financial statements of FedEx Corporation (“FedEx”) have been prepared in accordance with accounting principles generally accepted in the United States and Securities and Exchange Commission (“SEC”) instructions for interim financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended May 31, 2017 (“Annual Report”). Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in our Annual Report. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly our financial position as of August 31, 2017, the results of our operations and cash flows for the three-month periods ended August 31, 2017 and 2016. Operating results for the three-month period ended August 31, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2018. Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2018 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year. |
Accumulated Other Comprehensi19
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Accumulated Other Comprehensive Income Loss Tables [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides changes in accumulated other comprehensive income (loss) (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to AOCI): 2017 2016 Foreign currency translation loss: Balance at beginning of period $ (685 ) $ (514 ) Translation adjustments 109 12 Balance at end of period (576 ) (502 ) Retirement plans adjustments: Balance at beginning of period 270 345 Reclassifications from AOCI (19 ) (19 ) Balance at end of period 251 326 Accumulated other comprehensive (loss) at end of period $ (325 ) $ (176 ) |
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | The following table presents details of the reclassifications from AOCI for the three-month periods ended August 31 (in millions; amounts in parentheses indicate debits to earnings): Amount Reclassified from AOCI Affected Line Item in the Income Statement 2017 2016 Amortization of retirement plans prior service credits, before tax $ 30 $ 30 Salaries and employee benefits Income tax benefit (11 ) (11 ) Provision for income taxes AOCI reclassifications, net of tax $ 19 $ 19 Net income |
Computation of Earnings Per S20
Computation of Earnings Per Share (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Computation Of Earnings Per Share Tables [Abstract] | |
Schedule of basic and diluted earnings per common share | The calculation of basic and diluted earnings per common share for the three-month periods ended August 31 was as follows (in millions, except per share amounts): 2017 2016 Basic earnings per common share: Net earnings allocable to common shares (1) $ 595 $ 714 Weighted-average common shares 268 265 Basic earnings per common share $ 2.22 $ 2.69 Diluted earnings per common share: Net earnings allocable to common shares (1) $ 595 $ 714 Weighted-average common shares 268 265 Dilutive effect of share-based awards 4 4 Weighted-average diluted shares 272 269 Diluted earnings per common share $ 2.19 $ 2.65 Anti-dilutive options excluded from diluted earnings per common share 3.2 5.1 (1) Net earnings available to participating securities were immaterial in all periods presented. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Retirement Plan Tables [Abstract] | |
Schedule of Retirement Plan Costs | Our retirement plans costs for the three-month periods ended August 31 were as follows (in millions): 2017 2016 Defined benefit pension plans $ 37 $ 58 Defined contribution plans 127 119 Postretirement healthcare plans 19 19 $ 183 $ 196 |
Schedule of Net Periodic Benefit Cost | Net periodic benefit cost of the pension and postretirement healthcare plans for the three-month periods ended August 31 included the following components (in millions): U.S. Pension Plans International Pension Plans Postretirement Healthcare Plans 2017 2016 2017 2016 2017 2016 Service cost $ 170 $ 160 $ 23 $ 20 $ 9 $ 9 Interest cost 279 282 12 11 10 10 Expected return on plan assets (406 ) (375 ) (11 ) (11 ) — — Amortization of prior service credit and other (30 ) (30 ) — 1 — — $ 13 $ 37 $ 24 $ 21 $ 19 $ 19 |
Schedule of Tax Qualified Pension Plans Contributions | Contributions to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) for the three-month periods ended August 31 were as follows (in millions): 2017 2016 Required $ — $ — Voluntary 250 250 $ 250 $ 250 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Business Segment Information Tables [Abstract] | |
Schedule of Segment Information | The following table provides a reconciliation of reportable segment revenues and operating income to our unaudited condensed consolidated financial statement totals for the three-month periods ended August 31 (in millions): 2017 2016 Revenues FedEx Express segment $ 8,652 $ 8,460 FedEx Ground segment 4,639 4,290 FedEx Freight segment 1,752 1,658 FedEx Services segment 400 395 Eliminations and other (146 ) (140 ) $ 15,297 $ 14,663 Operating Income FedEx Express segment $ 433 $ 610 FedEx Ground segment 626 610 FedEx Freight segment 176 135 Eliminations, corporate and other (118 ) (91 ) $ 1,117 $ 1,264 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Commitments Tables [Abstract] | |
Schedule of Purchase Commitments | As of August 31, 2017, our purchase commitments under various contracts for the remainder of 2018 and annually thereafter were as follows (in millions): Aircraft and Aircraft-Related Other (1) Total 2018 (remainder) $ 1,398 $ 1,250 $ 2,648 2019 1,713 636 2,349 2020 1,927 490 2,417 2021 1,335 376 1,711 2022 1,273 206 1,479 Thereafter 2,884 499 3,383 Total $ 10,530 $ 3,457 $ 13,987 (1) Primarily equipment and advertising contracts. |
Schedule of Aircraft Purchase Commitments | The following table is a summary of the key aircraft we are committed to purchase as of August 31, 2017 with the year of expected delivery: B767F B777F Total 2018 (remainder) 11 4 15 2019 15 2 17 2020 16 3 19 2021 10 3 13 2022 10 4 14 Thereafter 6 - 6 Total 68 16 84 |
Schedule of Future Minimum Lease Payments, Operating Leases | A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2017 is as follows (in millions): Aircraft and Related Equipment Facilities and Other Total Operating Leases 2018 (remainder) $ 362 $ 1,616 $ 1,978 2019 343 1,972 2,315 2020 261 1,755 2,016 2021 203 1,587 1,790 2022 185 1,431 1,616 Thereafter 175 8,651 8,826 Total $ 1,529 $ 17,012 $ 18,541 |
Supplemental Cash Flow Inform24
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Supplemental Cash Flow Tables [Abstract] | |
Supplemental Cash Flow | Cash paid for interest expense and income taxes for the three-month periods ended August 31 was as follows (in millions): 2017 2016 Cash payments for: Interest (net of capitalized interest) $ 153 $ 143 Income taxes $ 96 $ 80 Income tax refunds received (10 ) (8 ) Cash tax payments, net $ 86 $ 72 |
Condensed Consolidating Finan25
Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Condensed Consolidating Financial Statements Tables [Abstract] | |
Condensed Consolidating Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEETS (UNAUDITED) August 31, 2017 Guarantor Non-guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,681 $ 343 $ 1,519 $ (40 ) $ 3,503 Receivables, less allowances 2 4,852 3,241 (89 ) 8,006 Spare parts, supplies, fuel, prepaid expenses and other, less allowances 41 931 241 — 1,213 Total current assets 1,724 6,126 5,001 (129 ) 12,722 PROPERTY AND EQUIPMENT, AT COST 22 47,939 3,579 — 51,540 Less accumulated depreciation and amortization 18 23,761 1,526 — 25,305 Net property and equipment 4 24,178 2,053 — 26,235 INTERCOMPANY RECEIVABLE 1,578 2,744 — (4,322 ) — GOODWILL — 1,570 5,812 — 7,382 INVESTMENT IN SUBSIDIARIES 28,433 2,672 — (31,105 ) — OTHER ASSETS 3,492 1,403 1,308 (3,192 ) 3,011 $ 35,231 $ 38,693 $ 14,174 $ (38,748 ) $ 49,350 LIABILITIES AND STOCKHOLDERS’ INVESTMENT CURRENT LIABILITIES Current portion of long-term debt $ — $ 6 $ 13 $ — $ 19 Accrued salaries and employee benefits 50 1,116 490 — 1,656 Accounts payable 149 1,429 1,489 (129 ) 2,938 Accrued expenses 891 1,520 766 — 3,177 Total current liabilities 1,090 4,071 2,758 (129 ) 7,790 LONG-TERM DEBT, LESS CURRENT PORTION 14,872 244 21 — 15,137 INTERCOMPANY PAYABLE — — 4,322 (4,322 ) — OTHER LONG-TERM LIABILITIES Deferred income taxes — 5,753 169 (3,192 ) 2,730 Other liabilities 2,651 3,526 898 — 7,075 Total other long-term liabilities 2,651 9,279 1,067 (3,192 ) 9,805 STOCKHOLDERS’ INVESTMENT 16,618 25,099 6,006 (31,105 ) 16,618 $ 35,231 $ 38,693 $ 14,174 $ (38,748 ) $ 49,350 CONDENSED CONSOLIDATING BALANCE SHEETS May 31, 2017 Guarantor Non-guarantor Parent Subsidiaries Subsidiaries Eliminations Consolidated ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,884 $ 325 $ 1,807 $ (47 ) $ 3,969 Receivables, less allowances 3 4,729 2,928 (61 ) 7,599 Spare parts, supplies, fuel, prepaid expenses and other, less allowances 25 787 248 — 1,060 Total current assets 1,912 5,841 4,983 (108 ) 12,628 PROPERTY AND EQUIPMENT, AT COST 22 47,201 3,403 — 50,626 Less accumulated depreciation and amortization 18 23,211 1,416 — 24,645 Net property and equipment 4 23,990 1,987 — 25,981 INTERCOMPANY RECEIVABLE 1,521 2,607 — (4,128 ) — GOODWILL — 1,571 5,583 — 7,154 INVESTMENT IN SUBSIDIARIES 27,712 2,636 — (30,348 ) — OTHER ASSETS 3,494 1,271 1,249 (3,225 ) 2,789 $ 34,643 $ 37,916 $ 13,802 $ (37,809 ) $ 48,552 LIABILITIES AND STOCKHOLDERS’ INVESTMENT CURRENT LIABILITIES Current portion of long-term debt $ — $ 9 $ 13 $ — $ 22 Accrued salaries and employee benefits 72 1,335 507 — 1,914 Accounts payable 10 1,411 1,439 (108 ) 2,752 Accrued expenses 991 1,522 717 — 3,230 Total current liabilities 1,073 4,277 2,676 (108 ) 7,918 LONG-TERM DEBT, LESS CURRENT PORTION 14,641 244 24 — 14,909 INTERCOMPANY PAYABLE — — 4,128 (4,128 ) — OTHER LONG-TERM LIABILITIES Deferred income taxes — 5,472 238 (3,225 ) 2,485 Other liabilities 2,856 3,448 863 — 7,167 Total other long-term liabilities 2,856 8,920 1,101 (3,225 ) 9,652 STOCKHOLDERS’ INVESTMENT 16,073 24,475 5,873 (30,348 ) 16,073 $ 34,643 $ 37,916 $ 13,802 $ (37,809 ) $ 48,552 |
Condensed Consolidating Statements of Comprehensive Income | CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended August 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES $ — $ 11,567 $ 3,854 $ (124 ) $ 15,297 OPERATING EXPENSES: Salaries and employee benefits 38 4,227 1,253 — 5,518 Purchased transportation — 2,063 1,464 (82 ) 3,445 Rentals and landing fees 1 627 191 (1 ) 818 Depreciation and amortization — 639 112 — 751 Fuel — 637 66 — 703 Maintenance and repairs — 602 73 — 675 Intercompany charges, net (116 ) 113 3 — — Other 77 1,476 758 (41 ) 2,270 — 10,384 3,920 (124 ) 14,180 OPERATING INCOME — 1,183 (66 ) — 1,117 OTHER INCOME (EXPENSE): Equity in earnings of subsidiaries 596 (3 ) — (593 ) — Interest, net (129 ) 13 2 — (114 ) Intercompany charges, net 131 (71 ) (60 ) — — Other, net (2 ) (8 ) (11 ) — (21 ) INCOME BEFORE INCOME TAXES 596 1,114 (135 ) (593 ) 982 Provision for income taxes — 399 (13 ) — 386 NET INCOME $ 596 $ 715 $ (122 ) $ (593 ) $ 596 COMPREHENSIVE INCOME $ 578 $ 719 $ (18 ) $ (593 ) $ 686 CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended August 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated REVENUES $ — $ 10,903 $ 3,830 $ (70 ) $ 14,663 OPERATING EXPENSES: Salaries and employee benefits 36 4,106 1,169 — 5,311 Purchased transportation — 1,917 1,351 (28 ) 3,240 Rentals and landing fees 1 620 170 (1 ) 790 Depreciation and amortization — 611 128 — 739 Fuel — 578 72 — 650 Maintenance and repairs — 526 72 — 598 Intercompany charges, net (90 ) 62 28 — — Other 53 1,373 686 (41 ) 2,071 — 9,793 3,676 (70 ) 13,399 OPERATING INCOME — 1,110 154 — 1,264 OTHER INCOME (EXPENSE): Equity in earnings of subsidiaries 715 56 — (771 ) — Interest, net (122 ) 9 — — (113 ) Intercompany charges, net 122 (81 ) (41 ) — — Other, net — (5 ) (4 ) — (9 ) INCOME BEFORE INCOME TAXES 715 1,089 109 (771 ) 1,142 Provision for income taxes — 380 47 — 427 NET INCOME $ 715 $ 709 $ 62 $ (771 ) $ 715 COMPREHENSIVE INCOME $ 696 $ 702 $ 81 $ (771 ) $ 708 |
Condensed Consolidating Statements of Cash Flows | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended August 31, 2017 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (878 ) $ 1,717 $ (256 ) $ 7 $ 590 INVESTING ACTIVITIES Capital expenditures — (985 ) (59 ) — (1,044 ) Proceeds from asset dispositions and other — 6 — — 6 CASH USED IN INVESTING ACTIVITIES — (979 ) (59 ) — (1,038 ) FINANCING ACTIVITIES Net transfers from (to) Parent 744 (735 ) (9 ) — — Principal payments on debt — (8 ) (4 ) — (12 ) Proceeds from stock issuances 150 — — — 150 Dividends paid (134 ) — — — (134 ) Purchase of treasury stock (86 ) — — — (86 ) Other, net 3 — (9 ) — (6 ) CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 677 (743 ) (22 ) — (88 ) Effect of exchange rate changes on cash (2 ) 23 49 — 70 Net (decrease) increase in cash and cash equivalents (203 ) 18 (288 ) 7 (466 ) Cash and cash equivalents at beginning of period 1,884 325 1,807 (47 ) 3,969 Cash and cash equivalents at end of period $ 1,681 $ 343 $ 1,519 $ (40 ) $ 3,503 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended August 31, 2016 Parent Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (342 ) $ 1,119 $ 188 $ 6 $ 971 INVESTING ACTIVITIES Capital expenditures — (1,111 ) (104 ) — (1,215 ) Proceeds from asset dispositions and other — 9 — — 9 CASH USED IN INVESTING ACTIVITIES — (1,102 ) (104 ) — (1,206 ) FINANCING ACTIVITIES Net transfers from (to) Parent (35 ) (2 ) 37 — — Payment on loan between subsidiaries (2 ) (14 ) 16 — — Principal payments on debt — (7 ) (5 ) — (12 ) Proceeds from stock issuances 40 — — — 40 Dividends paid (106 ) — — — (106 ) Purchase of treasury stock (222 ) — — — (222 ) Other, net 1 (1 ) (13 ) — (13 ) CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (324 ) (24 ) 35 — (313 ) Effect of exchange rate changes on cash — 8 (5 ) — 3 Net (decrease) increase in cash and cash equivalents (666 ) 1 114 6 (545 ) Cash and cash equivalents at beginning of period 1,974 326 1,277 (43 ) 3,534 Cash and cash equivalents at end of period $ 1,308 $ 327 $ 1,391 $ (37 ) $ 2,989 |
General - Additional Informatio
General - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Stock-based compensation | $ 62 | $ 57 |
Lease liability and related right-of-use asset | 13,000 | |
Operating income | $ 1,117 | 1,264 |
Stock Repurchase Program Number Of Shares Authorized To Be Repurchased | 25,000,000 | |
Number of Shares Repurchased | 400,000 | |
Treasury Stock Acquired, Average Cost Per Share | $ 207.92 | |
Payments for Repurchase of Common Stock | $ 86 | 222 |
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 15,600,000 | |
Dividends Payable, Date Declared | Aug. 18, 2017 | |
Dividends Payable Amount Per Share | $ 0.50 | |
Dividends Payable, Date To Be Paid | Oct. 2, 2017 | |
Dividends Payable, Date Of Record | Sep. 11, 2017 | |
ASU 201703 [Member] | ||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||
Operating income | $ 146 | $ 112 |
Accumulated Other Comprehensi27
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | $ 16,073 | |
Translation adjustments | 109 | $ 12 |
Ending balance | 16,618 | |
Foreign Currency Translation Loss [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | (685) | (514) |
Translation adjustments | 109 | 12 |
Ending balance | (576) | (502) |
Retirement Plans Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Beginning balance | 270 | 345 |
Reclassifications from AOCI | (19) | (19) |
Ending balance | 251 | 326 |
Accumulated Other Comprehensive (Loss) [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Ending balance | $ (325) | $ (176) |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Income (Loss) - Reclassification Out of Accumulated Other Comprehensive Income (Loss) (Details) - Reclassification Out of Accumulated Other Comprehensive Income (Loss) [Member] - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items] | ||
Salaries and employee benefits | $ 30 | $ 30 |
Provision for income taxes | (11) | (11) |
Net income | $ 19 | $ 19 |
Financing Arrangements - Additi
Financing Arrangements - Additional Information (Details) - USD ($) | 3 Months Ended | |
Aug. 31, 2017 | May 31, 2017 | |
Line Of Credit Facility [Line Items] | ||
Line of Credit Facility, Expiration Date | Nov. 13, 2020 | |
Letter of Credit Maximum Sublimit Amount | $ 500,000,000 | |
Financial Covenant Terms Ratio | 350.00% | |
Financial Covenant Compliance Ratio | 190.00% | |
Letters Of Credit Outstanding | $ 317,000,000 | |
Commercial paper outstanding | 0 | |
Letter of Credit Outstanding Sublimit Unused Amount | 183,000,000 | |
Long Term Debt Exclusive of Capital Leases Carrying Value | 15,100,000,000 | $ 14,900,000,000 |
Long Term Debt Exclusive Of Capital Leases Fair Value | $ 15,900,000,000 | $ 15,500,000,000 |
Long-term debt weighted average interest rate | 3.60% | |
Revolving Credit Facility [Member] | ||
Line Of Credit Facility [Line Items] | ||
Line of Credit Facility, Term | 5 years | |
Line Of Credit Facility Maximum Borrowing Capacity | $ 1,750,000,000 |
Computation of Earnings Per S30
Computation of Earnings Per Share - Schedule of Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | ||
Basic earnings per common share: | |||
Net earnings allocable to common shares | [1] | $ 595 | $ 714 |
Weighted-average common shares | 268 | 265 | |
Basic earnings per common share | $ 2.22 | $ 2.69 | |
Diluted earnings per common share: | |||
Net earnings allocable to common shares | [1] | $ 595 | $ 714 |
Weighted-average common shares | 268 | 265 | |
Dilutive effect of share-based awards | 4 | 4 | |
Weighted-average diluted shares | 272 | 269 | |
Diluted earnings per common share | $ 2.19 | $ 2.65 | |
Anti-dilutive options excluded from diluted earnings per common share | 3.2 | 5.1 | |
[1] | Net earnings available to participating securities were immaterial in all periods presented. |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Retirement Plan Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Pension And Other Postretirement Benefit Expense [Abstract] | ||
Defined benefit pension plans | $ 37 | $ 58 |
Defined contribution plans | 127 | 119 |
Postretirement healthcare plans | 19 | 19 |
Retirement plans costs | $ 183 | $ 196 |
Retirement Plans - Schedule o32
Retirement Plans - Schedule of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
U.S. Pension Plans [Member] | ||
Net Periodic Benefit Cost | ||
Service cost | $ 170 | $ 160 |
Interest cost | 279 | 282 |
Expected return on plan assets | (406) | (375) |
Amortization of prior service credit and other | (30) | (30) |
Total net periodic benefit cost | 13 | 37 |
International Pension Plans [Member] | ||
Net Periodic Benefit Cost | ||
Service cost | 23 | 20 |
Interest cost | 12 | 11 |
Expected return on plan assets | (11) | (11) |
Amortization of prior service credit and other | 1 | |
Total net periodic benefit cost | 24 | 21 |
Postretirement Healthcare Plans [Member] | ||
Net Periodic Benefit Cost | ||
Service cost | 9 | 9 |
Interest cost | 10 | 10 |
Total net periodic benefit cost | $ 19 | $ 19 |
Retirement Plans - Schedule o33
Retirement Plans - Schedule of Tax Qualified Pension Plans Contributions (Details) - U.S. Pension Plans [Member] - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer | $ 250 | $ 250 |
Voluntary Contribution [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan Contributions By Employer | $ 250 | $ 250 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - September 2017 contribution [Member] - USD ($) $ in Millions | Sep. 15, 2017 | Aug. 31, 2017 | Aug. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan Contributions By Employer | $ 250 | $ 250 | |
Subsequent Event [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan Contributions By Employer | $ 250 |
Business Segment Information -
Business Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 15,297 | $ 14,663 |
Operating Income | 1,117 | 1,264 |
FedEx Express Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 8,652 | 8,460 |
Operating Income | 433 | 610 |
FedEx Ground Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,639 | 4,290 |
Operating Income | 626 | 610 |
FedEx Freight Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,752 | 1,658 |
Operating Income | 176 | 135 |
FedEx Services Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 400 | 395 |
Eliminations, Corporate and Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | (146) | (140) |
Operating Income | $ (118) | $ (91) |
Commitments - Schedule of Purch
Commitments - Schedule of Purchase Commitments (Details) $ in Millions | Aug. 31, 2017USD ($) | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2018 (remainder) | $ 2,648 | |
2,019 | 2,349 | |
2,020 | 2,417 | |
2,021 | 1,711 | |
2,022 | 1,479 | |
Thereafter | 3,383 | |
Total | 13,987 | |
Aircraft And Related Equipment Commitments [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2018 (remainder) | 1,398 | |
2,019 | 1,713 | |
2,020 | 1,927 | |
2,021 | 1,335 | |
2,022 | 1,273 | |
Thereafter | 2,884 | |
Total | 10,530 | |
Other Commitments [Member] | ||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||
2018 (remainder) | 1,250 | [1] |
2,019 | 636 | [1] |
2,020 | 490 | [1] |
2,021 | 376 | [1] |
2,022 | 206 | [1] |
Thereafter | 499 | [1] |
Total | $ 3,457 | [1] |
[1] | Primarily equipment and advertising contracts. |
Commitments - Additional Inform
Commitments - Additional Information (Details) $ in Millions | 3 Months Ended |
Aug. 31, 2017USD ($)air-craft | |
Other Aircraft Commitments Disclosure [Abstract] | |
Boeing 767F Conditional Aircraft Commitments | 4 |
Boeing 777F Conditional Aircraft Commitments | 6 |
Deposit and Progress Payments | $ | $ 860 |
Commitments - Schedule of Aircr
Commitments - Schedule of Aircraft Purchase Commitments (Details) | 3 Months Ended |
Aug. 31, 2017air-craft | |
Schedule of Aircraft Commitments [Line Items] | |
2018 (remainder) | 15 |
2,019 | 17 |
2,020 | 19 |
2,021 | 13 |
2,022 | 14 |
Thereafter | 6 |
Total | 84 |
Boeing 767 Freighter [Member] | |
Schedule of Aircraft Commitments [Line Items] | |
2018 (remainder) | 11 |
2,019 | 15 |
2,020 | 16 |
2,021 | 10 |
2,022 | 10 |
Thereafter | 6 |
Total | 68 |
Boeing 777 Freighter [Member] | |
Schedule of Aircraft Commitments [Line Items] | |
2018 (remainder) | 4 |
2,019 | 2 |
2,020 | 3 |
2,021 | 3 |
2,022 | 4 |
Total | 16 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Lease Payments, Operating Leases (Details) $ in Millions | Aug. 31, 2017USD ($) |
Schedule of Future Minimum Operating Lease Payments [Line Items] | |
2018 (remainder) | $ 1,978 |
2,019 | 2,315 |
2,020 | 2,016 |
2,021 | 1,790 |
2,022 | 1,616 |
Thereafter | 8,826 |
Total | 18,541 |
Aircraft and Related Equipment [Member] | |
Schedule of Future Minimum Operating Lease Payments [Line Items] | |
2018 (remainder) | 362 |
2,019 | 343 |
2,020 | 261 |
2,021 | 203 |
2,022 | 185 |
Thereafter | 175 |
Total | 1,529 |
Facilities and Other [Member] | |
Schedule of Future Minimum Operating Lease Payments [Line Items] | |
2018 (remainder) | 1,616 |
2,019 | 1,972 |
2,020 | 1,755 |
2,021 | 1,587 |
2,022 | 1,431 |
Thereafter | 8,651 |
Total | $ 17,012 |
Contingencies - Additional Info
Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended | |
Aug. 31, 2017USD ($)Case | May 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||
Number of claims settled by the court | Case | 20 | |
California Case [Member] | Pending Litigation [Member] | Expected Litigation Loss [Member] | ||
Loss Contingencies [Line Items] | ||
Litigation Settlement Amount | $ 228 | |
U.S. Customs and Border Protection ("CBP") [Member] | Expected Litigation Loss [Member] | ||
Loss Contingencies [Line Items] | ||
Loss contingency amount | $ 39.3 | |
Payments for legal settlements | 46.5 | |
Litigation settlement expense | $ 7.2 |
Supplemental Cash Flow Inform41
Supplemental Cash Flow Information -Supplemental Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest (net of capitalized interest) | $ 153 | $ 143 |
Income taxes | 96 | 80 |
Income tax refunds received | (10) | (8) |
Cash tax payments, net | $ 86 | $ 72 |
Condensed Consolidating Finan42
Condensed Consolidating Financial Statements - Additional Information (Details) $ in Billions | Aug. 31, 2017USD ($) |
Guarantor Obligations [Abstract] | |
Debt Guarantee | $ 15 |
Condensed Consolidating Balance
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Aug. 31, 2017 | May 31, 2017 | Aug. 31, 2016 | May 31, 2016 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 3,503 | $ 3,969 | $ 2,989 | $ 3,534 |
Receivables, less allowances | 8,006 | 7,599 | ||
Spare parts, supplies, fuel, prepaid expenses and other, less allowances | 1,213 | 1,060 | ||
Total current assets | 12,722 | 12,628 | ||
PROPERTY AND EQUIPMENT, AT COST | 51,540 | 50,626 | ||
Less accumulated depreciation and amortization | 25,305 | 24,645 | ||
Net property and equipment | 26,235 | 25,981 | ||
GOODWILL | 7,382 | 7,154 | ||
OTHER ASSETS | 3,011 | 2,789 | ||
ASSETS | 49,350 | 48,552 | ||
CURRENT LIABILITIES | ||||
Current portion of long-term debt | 19 | 22 | ||
Accrued salaries and employee benefits | 1,656 | 1,914 | ||
Accounts payable | 2,938 | 2,752 | ||
Accrued expenses | 3,177 | 3,230 | ||
Total current liabilities | 7,790 | 7,918 | ||
LONG-TERM DEBT, LESS CURRENT PORTION | 15,137 | 14,909 | ||
OTHER LONG-TERM LIABILITIES | ||||
Deferred income taxes | 2,730 | 2,485 | ||
Other liabilities | 7,075 | 7,167 | ||
Total other long-term liabilities | 9,805 | 9,652 | ||
STOCKHOLDERS’ INVESTMENT | 16,618 | 16,073 | ||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | 49,350 | 48,552 | ||
Consolidation Eliminations [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | (40) | (47) | (37) | (43) |
Receivables, less allowances | (89) | (61) | ||
Total current assets | (129) | (108) | ||
INTERCOMPANY RECEIVABLE | (4,322) | (4,128) | ||
INVESTMENT IN SUBSIDIARIES | (31,105) | (30,348) | ||
OTHER ASSETS | (3,192) | (3,225) | ||
ASSETS | (38,748) | (37,809) | ||
CURRENT LIABILITIES | ||||
Accounts payable | (129) | (108) | ||
Total current liabilities | (129) | (108) | ||
INTERCOMPANY PAYABLE | (4,322) | (4,128) | ||
OTHER LONG-TERM LIABILITIES | ||||
Deferred income taxes | (3,192) | (3,225) | ||
Total other long-term liabilities | (3,192) | (3,225) | ||
STOCKHOLDERS’ INVESTMENT | (31,105) | (30,348) | ||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | (38,748) | (37,809) | ||
Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 1,681 | 1,884 | 1,308 | 1,974 |
Receivables, less allowances | 2 | 3 | ||
Spare parts, supplies, fuel, prepaid expenses and other, less allowances | 41 | 25 | ||
Total current assets | 1,724 | 1,912 | ||
PROPERTY AND EQUIPMENT, AT COST | 22 | 22 | ||
Less accumulated depreciation and amortization | 18 | 18 | ||
Net property and equipment | 4 | 4 | ||
INTERCOMPANY RECEIVABLE | 1,578 | 1,521 | ||
INVESTMENT IN SUBSIDIARIES | 28,433 | 27,712 | ||
OTHER ASSETS | 3,492 | 3,494 | ||
ASSETS | 35,231 | 34,643 | ||
CURRENT LIABILITIES | ||||
Accrued salaries and employee benefits | 50 | 72 | ||
Accounts payable | 149 | 10 | ||
Accrued expenses | 891 | 991 | ||
Total current liabilities | 1,090 | 1,073 | ||
LONG-TERM DEBT, LESS CURRENT PORTION | 14,872 | 14,641 | ||
OTHER LONG-TERM LIABILITIES | ||||
Other liabilities | 2,651 | 2,856 | ||
Total other long-term liabilities | 2,651 | 2,856 | ||
STOCKHOLDERS’ INVESTMENT | 16,618 | 16,073 | ||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | 35,231 | 34,643 | ||
Guarantor Subsidiaries [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 343 | 325 | 327 | 326 |
Receivables, less allowances | 4,852 | 4,729 | ||
Spare parts, supplies, fuel, prepaid expenses and other, less allowances | 931 | 787 | ||
Total current assets | 6,126 | 5,841 | ||
PROPERTY AND EQUIPMENT, AT COST | 47,939 | 47,201 | ||
Less accumulated depreciation and amortization | 23,761 | 23,211 | ||
Net property and equipment | 24,178 | 23,990 | ||
INTERCOMPANY RECEIVABLE | 2,744 | 2,607 | ||
GOODWILL | 1,570 | 1,571 | ||
INVESTMENT IN SUBSIDIARIES | 2,672 | 2,636 | ||
OTHER ASSETS | 1,403 | 1,271 | ||
ASSETS | 38,693 | 37,916 | ||
CURRENT LIABILITIES | ||||
Current portion of long-term debt | 6 | 9 | ||
Accrued salaries and employee benefits | 1,116 | 1,335 | ||
Accounts payable | 1,429 | 1,411 | ||
Accrued expenses | 1,520 | 1,522 | ||
Total current liabilities | 4,071 | 4,277 | ||
LONG-TERM DEBT, LESS CURRENT PORTION | 244 | 244 | ||
OTHER LONG-TERM LIABILITIES | ||||
Deferred income taxes | 5,753 | 5,472 | ||
Other liabilities | 3,526 | 3,448 | ||
Total other long-term liabilities | 9,279 | 8,920 | ||
STOCKHOLDERS’ INVESTMENT | 25,099 | 24,475 | ||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | 38,693 | 37,916 | ||
Non Guarantor Subsidiaries [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 1,519 | 1,807 | $ 1,391 | $ 1,277 |
Receivables, less allowances | 3,241 | 2,928 | ||
Spare parts, supplies, fuel, prepaid expenses and other, less allowances | 241 | 248 | ||
Total current assets | 5,001 | 4,983 | ||
PROPERTY AND EQUIPMENT, AT COST | 3,579 | 3,403 | ||
Less accumulated depreciation and amortization | 1,526 | 1,416 | ||
Net property and equipment | 2,053 | 1,987 | ||
GOODWILL | 5,812 | 5,583 | ||
OTHER ASSETS | 1,308 | 1,249 | ||
ASSETS | 14,174 | 13,802 | ||
CURRENT LIABILITIES | ||||
Current portion of long-term debt | 13 | 13 | ||
Accrued salaries and employee benefits | 490 | 507 | ||
Accounts payable | 1,489 | 1,439 | ||
Accrued expenses | 766 | 717 | ||
Total current liabilities | 2,758 | 2,676 | ||
LONG-TERM DEBT, LESS CURRENT PORTION | 21 | 24 | ||
INTERCOMPANY PAYABLE | 4,322 | 4,128 | ||
OTHER LONG-TERM LIABILITIES | ||||
Deferred income taxes | 169 | 238 | ||
Other liabilities | 898 | 863 | ||
Total other long-term liabilities | 1,067 | 1,101 | ||
STOCKHOLDERS’ INVESTMENT | 6,006 | 5,873 | ||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | $ 14,174 | $ 13,802 |
Condensed Consolidating Stateme
Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Condensed Financial Statements Captions [Line Items] | ||
REVENUES | $ 15,297 | $ 14,663 |
OPERATING EXPENSES: | ||
Salaries and employee benefits | 5,518 | 5,311 |
Purchased transportation | 3,445 | 3,240 |
Rentals and landing fees | 818 | 790 |
Depreciation and amortization | 751 | 739 |
Fuel | 703 | 650 |
Maintenance and repairs | 675 | 598 |
Other | 2,270 | 2,071 |
OPERATING EXPENSES | 14,180 | 13,399 |
OPERATING INCOME | 1,117 | 1,264 |
OTHER INCOME (EXPENSE): | ||
Interest, net | (114) | (113) |
Other, net | (21) | (9) |
INCOME BEFORE INCOME TAXES | 982 | 1,142 |
PROVISION FOR INCOME TAXES | 386 | 427 |
NET INCOME | 596 | 715 |
COMPREHENSIVE INCOME | 686 | 708 |
Consolidation Eliminations [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
REVENUES | (124) | (70) |
OPERATING EXPENSES: | ||
Purchased transportation | (82) | (28) |
Rentals and landing fees | (1) | (1) |
Other | (41) | (41) |
OPERATING EXPENSES | (124) | (70) |
OTHER INCOME (EXPENSE): | ||
Equity in earnings of subsidiaries | (593) | (771) |
INCOME BEFORE INCOME TAXES | (593) | (771) |
NET INCOME | (593) | (771) |
COMPREHENSIVE INCOME | (593) | (771) |
Parent Company [Member] | ||
OPERATING EXPENSES: | ||
Salaries and employee benefits | 38 | 36 |
Rentals and landing fees | 1 | 1 |
Intercompany charges, net | (116) | (90) |
Other | 77 | 53 |
OTHER INCOME (EXPENSE): | ||
Equity in earnings of subsidiaries | 596 | 715 |
Interest, net | (129) | (122) |
Intercompany charges, net | 131 | 122 |
Other, net | (2) | |
INCOME BEFORE INCOME TAXES | 596 | 715 |
NET INCOME | 596 | 715 |
COMPREHENSIVE INCOME | 578 | 696 |
Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
REVENUES | 11,567 | 10,903 |
OPERATING EXPENSES: | ||
Salaries and employee benefits | 4,227 | 4,106 |
Purchased transportation | 2,063 | 1,917 |
Rentals and landing fees | 627 | 620 |
Depreciation and amortization | 639 | 611 |
Fuel | 637 | 578 |
Maintenance and repairs | 602 | 526 |
Intercompany charges, net | 113 | 62 |
Other | 1,476 | 1,373 |
OPERATING EXPENSES | 10,384 | 9,793 |
OPERATING INCOME | 1,183 | 1,110 |
OTHER INCOME (EXPENSE): | ||
Equity in earnings of subsidiaries | (3) | 56 |
Interest, net | 13 | 9 |
Intercompany charges, net | (71) | (81) |
Other, net | (8) | (5) |
INCOME BEFORE INCOME TAXES | 1,114 | 1,089 |
PROVISION FOR INCOME TAXES | 399 | 380 |
NET INCOME | 715 | 709 |
COMPREHENSIVE INCOME | 719 | 702 |
Non Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
REVENUES | 3,854 | 3,830 |
OPERATING EXPENSES: | ||
Salaries and employee benefits | 1,253 | 1,169 |
Purchased transportation | 1,464 | 1,351 |
Rentals and landing fees | 191 | 170 |
Depreciation and amortization | 112 | 128 |
Fuel | 66 | 72 |
Maintenance and repairs | 73 | 72 |
Intercompany charges, net | 3 | 28 |
Other | 758 | 686 |
OPERATING EXPENSES | 3,920 | 3,676 |
OPERATING INCOME | (66) | 154 |
OTHER INCOME (EXPENSE): | ||
Interest, net | 2 | |
Intercompany charges, net | (60) | (41) |
Other, net | (11) | (4) |
INCOME BEFORE INCOME TAXES | (135) | 109 |
PROVISION FOR INCOME TAXES | (13) | 47 |
NET INCOME | (122) | 62 |
COMPREHENSIVE INCOME | $ (18) | $ 81 |
Condensed Consolidating State45
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Condensed Financial Statements Captions [Line Items] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ 590 | $ 971 |
Investing Activities: | ||
Capital expenditures | (1,044) | (1,215) |
Proceeds from asset dispositions and other | 6 | 9 |
Cash used in investing activities | (1,038) | (1,206) |
Financing Activities: | ||
Principal payments on debt | (12) | (12) |
Proceeds from stock issuances | 150 | 40 |
Dividends paid | (134) | (106) |
Purchase of treasury stock | (86) | (222) |
Other, net | (6) | (13) |
Cash used in financing activities | (88) | (313) |
Effect of exchange rate changes on cash | 70 | 3 |
Net decrease in cash and cash equivalents | (466) | (545) |
Cash and cash equivalents at beginning of period | 3,969 | 3,534 |
Cash and cash equivalents at end of period | 3,503 | 2,989 |
Consolidation Eliminations [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 7 | 6 |
Financing Activities: | ||
Net decrease in cash and cash equivalents | 7 | 6 |
Cash and cash equivalents at beginning of period | (47) | (43) |
Cash and cash equivalents at end of period | (40) | (37) |
Parent Company [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (878) | (342) |
Financing Activities: | ||
Net transfers from (to) Parent | 744 | (35) |
Payment on loan between subsidiaries | (2) | |
Proceeds from stock issuances | 150 | 40 |
Dividends paid | (134) | (106) |
Purchase of treasury stock | (86) | (222) |
Other, net | 3 | 1 |
Cash used in financing activities | 677 | (324) |
Effect of exchange rate changes on cash | (2) | |
Net decrease in cash and cash equivalents | (203) | (666) |
Cash and cash equivalents at beginning of period | 1,884 | 1,974 |
Cash and cash equivalents at end of period | 1,681 | 1,308 |
Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 1,717 | 1,119 |
Investing Activities: | ||
Capital expenditures | (985) | (1,111) |
Proceeds from asset dispositions and other | 6 | 9 |
Cash used in investing activities | (979) | (1,102) |
Financing Activities: | ||
Net transfers from (to) Parent | (735) | (2) |
Payment on loan between subsidiaries | (14) | |
Principal payments on debt | (8) | (7) |
Other, net | (1) | |
Cash used in financing activities | (743) | (24) |
Effect of exchange rate changes on cash | 23 | 8 |
Net decrease in cash and cash equivalents | 18 | 1 |
Cash and cash equivalents at beginning of period | 325 | 326 |
Cash and cash equivalents at end of period | 343 | 327 |
Non Guarantor Subsidiaries [Member] | ||
Condensed Financial Statements Captions [Line Items] | ||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (256) | 188 |
Investing Activities: | ||
Capital expenditures | (59) | (104) |
Cash used in investing activities | (59) | (104) |
Financing Activities: | ||
Net transfers from (to) Parent | (9) | 37 |
Payment on loan between subsidiaries | 16 | |
Principal payments on debt | (4) | (5) |
Other, net | (9) | (13) |
Cash used in financing activities | (22) | 35 |
Effect of exchange rate changes on cash | 49 | (5) |
Net decrease in cash and cash equivalents | (288) | 114 |
Cash and cash equivalents at beginning of period | 1,807 | 1,277 |
Cash and cash equivalents at end of period | $ 1,519 | $ 1,391 |