FEDEX CORP, 10-Q filed on 3/16/2023
Quarterly Report
v3.22.4
Document and Entity Information - shares
 9 Months Ended
Feb. 28, 2023
Mar. 14, 2023
Document Information [Line Items]    
Document Type 10-Q  
Document Period End Date Feb. 28, 2023  
Amendment Flag false  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Entity Registrant Name FedEx Corporation  
Entity Current Reporting Status Yes  
Entity File Number 1-15829  
Entity Tax Identification Number 62-1721435  
Entity Address, Address Line One 942 South Shady Grove Road  
Entity Address, City or Town Memphis  
Entity Address, State or Province TN  
Entity Address, Postal Zip Code 38120  
City Area Code 901  
Local Phone Number 818-7500  
Entity Central Index Key 0001048911  
Current Fiscal Year End Date --05-31  
Entity Filer Category Large Accelerated Filer  
Entity Shell Company false  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   251,351,937
Entity Incorporation, State or Country Code DE  
Entity Interactive Data Current Yes  
Document Quarterly Report true  
Document Transition Report false  
Common Stock, Par Value $0.10 Per Share [Member]    
Document Information [Line Items]    
Trading Symbol FDX  
Title of 12(b) Security Common Stock, par value $0.10 per share  
Security Exchange Name NYSE  
0.450% Notes Due 2025 [Member]    
Document Information [Line Items]    
Trading Symbol FDX 25A  
Title of 12(b) Security 0.450% Notes due 2025  
Security Exchange Name NYSE  
1.625% Notes Due 2027 [Member]    
Document Information [Line Items]    
Trading Symbol FDX 27  
Title of 12(b) Security 1.625% Notes due 2027  
Security Exchange Name NYSE  
0.450% Notes Due 2029 [Member]    
Document Information [Line Items]    
Trading Symbol FDX 29A  
Title of 12(b) Security 0.450% Notes due 2029  
Security Exchange Name NYSE  
1.300% Notes Due 2031 [Member]    
Document Information [Line Items]    
Trading Symbol FDX 31  
Title of 12(b) Security 1.300% Notes due 2031  
Security Exchange Name NYSE  
0.950% Notes Due 2033 [Member]    
Document Information [Line Items]    
Trading Symbol FDX 33  
Title of 12(b) Security 0.950% Notes due 2033  
Security Exchange Name NYSE  
v3.22.4
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Feb. 28, 2023
May 31, 2022
CURRENT ASSETS    
Cash and cash equivalents $ 5,373 $ 6,897
Receivables, less allowances of $784 and $692 10,721 11,863
Spare parts, supplies, and fuel, less allowances of $275 and $360 631 637
Prepaid expenses and other 1,219 968
Total current assets 17,944 20,365
PROPERTY AND EQUIPMENT, AT COST 79,335 75,275
Less accumulated depreciation and amortization 39,486 37,184
Net property and equipment 39,849 38,091
OTHER LONG-TERM ASSETS    
Operating lease right-of-use assets, net 17,410 16,613
Goodwill 6,455 6,544
Other assets 4,117 4,381
Total other long-term assets 27,982 27,538
ASSETS 85,775 85,994
CURRENT LIABILITIES    
Current portion of long-term debt 147 82
Accrued salaries and employee benefits 2,266 2,531
Accounts payable 3,987 4,030
Operating lease liabilities 2,446 2,443
Accrued expenses 4,734 5,188
Total current liabilities 13,580 14,274
LONG-TERM DEBT, LESS CURRENT PORTION 20,122 20,182
OTHER LONG-TERM LIABILITIES    
Deferred income taxes 4,313 4,093
Pension, postretirement healthcare, and other benefit obligations 3,779 4,448
Self-insurance accruals 3,201 2,889
Operating lease liabilities 15,373 14,487
Other liabilities 674 682
Total other long-term liabilities 27,340 26,599
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS' INVESTMENT    
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of February 28, 2023 and May 31, 2022 32 32
Additional paid-in capital 3,735 3,712
Retained earnings 34,040 32,782
Accumulated other comprehensive loss (1,308) (1,103)
Treasury stock, at cost (11,766) (10,484)
Total common stockholders’ investment 24,733 24,939
LIABILITIES AND COMMON STOCKHOLDERS' INVESTMENT $ 85,775 $ 85,994
v3.22.4
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Feb. 28, 2023
May 31, 2022
CURRENT ASSETS    
Allowances for receivables $ 784 $ 692
Allowances for spare parts, supplies and fuel $ 275 $ 360
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
v3.22.4
Condensed Consolidated Statements of Income - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Income Statement [Abstract]        
REVENUE $ 22,169 $ 23,641 $ 68,225 $ 69,118
OPERATING EXPENSES:        
Salaries and employee benefits 7,817 8,244 23,468 24,155
Purchased transportation 5,402 6,272 16,834 18,172
Rentals and landing fees 1,205 1,225 3,559 3,535
Depreciation and amortization 1,031 986 3,101 2,952
Fuel 1,350 1,201 4,765 3,355
Maintenance and repairs 789 822 2,575 2,530
Business optimization and realignment costs 123 107 197 218
Other 3,410 3,458 10,317 9,880
OPERATING EXPENSES 21,127 22,315 64,816 64,797
OPERATING INCOME 1,042 1,326 3,409 4,321
OTHER (EXPENSE) INCOME:        
Interest, net (122) (163) (391) (478)
Other retirement plans income 102 211 304 380
Other, net   1 (87) (11)
OTHER (EXPENSE) INCOME (20) 49 (174) (109)
INCOME BEFORE INCOME TAXES 1,022 1,375 3,235 4,212
PROVISION FOR INCOME TAXES 251 263 801 944
NET INCOME $ 771 $ 1,112 $ 2,434 $ 3,268
EARNINGS PER COMMON SHARE:        
Basic $ 3.07 $ 4.26 $ 9.52 $ 12.36
Diluted 3.05 4.20 9.46 12.17
DIVIDENDS DECLARED PER COMMON SHARE $ 1.15 $ 0.75 $ 4.60 $ 3.00
v3.22.4
Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Statement of Comprehensive Income [Abstract]        
NET INCOME $ 771 $ 1,112 $ 2,434 $ 3,268
OTHER COMPREHENSIVE INCOME (LOSS):        
Foreign currency translation adjustments, net of tax (expense)/benefit of ($5) and $22 in 2023 and ($3) and $1 in 2022 80 91 (199) (150)
Amortization of prior service credit, net of tax benefit of $0 and $1 in 2023 and $1 and $2 in 2022 (3) (1) (6) (5)
Other comprehensive income (loss) 77 90 (205) (155)
COMPREHENSIVE INCOME $ 848 $ 1,202 $ 2,229 $ 3,113
v3.22.4
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Other Comprehensive Income, Tax Amounts        
Foreign currency translation adjustments, tax (expense)/benefit $ (5) $ (3) $ 22 $ 1
Amortization of prior service credit, tax benefit $ 0 $ 1 $ 1 $ 2
v3.22.4
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Millions
 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Operating Activities:    
Net income $ 2,434 $ 3,268
Adjustments to reconcile net income to cash provided by operating activities:    
Depreciation and amortization 3,101 2,952
Provision for uncollectible accounts 536 327
Stock-based compensation 142 151
Retirement plans mark-to-market adjustments   260
Other noncash items including leases and deferred income taxes 2,425 2,498
Business optimization and realignment costs/(payments), net 20 128
Changes in assets and liabilities:    
Receivables 373 (66)
Other assets (110) (235)
Accounts payable and other liabilities (3,534) (2,892)
Other, net 14 (61)
Cash provided by operating activities 5,401 6,330
Investing Activities:    
Capital expenditures (4,420) (4,379)
Purchase of investments (82) (145)
Proceeds from asset dispositions and other 72 71
Cash used in investing activities (4,430) (4,453)
Financing Activities:    
Principal payments on debt (123) (113)
Proceeds from stock issuances 114 151
Dividends paid (888) (598)
Purchase of treasury stock (1,500) (2,248)
Other, net 1  
Cash used in financing activities (2,396) (2,808)
Effect of exchange rate changes on cash (99) (91)
Net (decrease) increase in cash and cash equivalents (1,524) (1,022)
Cash and cash equivalents at beginning of period 6,897 7,087
Cash and cash equivalents at end of period $ 5,373 $ 6,065
v3.22.4
Condensed Consolidated Statements of Changes in Common Stockholders' Investment - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Beginning Balance     $ 24,939  
Net income $ 771 $ 1,112 2,434 $ 3,268
Other comprehensive income/(loss), net of tax (expense)/benefit of ($5), ($2), $23, and $3 77 90 (205) (155)
Ending Balance 24,733 24,526 24,733 24,526
Common Stock        
Beginning Balance 32 32 32 32
Ending Balance 32 32 32 32
Additional Paid-In Capital        
Beginning Balance 3,487 3,653 3,712 3,481
Purchase of treasury stock 218 (9) (82) (9)
Employee incentive plans and other 30 42 105 214
Ending Balance 3,735 3,686 3,735 3,686
Retained Earnings        
Beginning Balance 33,557 31,307 32,782 29,817
Net income 771 1,112 2,434 3,268
Cash dividends declared ($1.15, $0.75, $4.60, and $3.00 per share) (288) (194) (1,176) (792)
Employee incentive plans and other       (68)
Ending Balance 34,040 32,225 34,040 32,225
Accumulated Other Comprehensive Loss        
Beginning Balance (1,385) (977) (1,103) (732)
Other comprehensive income/(loss), net of tax (expense)/benefit of ($5), ($2), $23, and $3 77 90 (205) (155)
Ending Balance (1,308) (887) (1,308) (887)
Treasury Stock        
Beginning Balance (11,576) (9,075) (10,484) (8,430)
Purchase of treasury stock (218) (1,491) (1,418) (2,239)
Employee incentive plans and other 28 36 136 139
Ending Balance $ (11,766) $ (10,530) $ (11,766) $ (10,530)
v3.22.4
Condensed Consolidated Statements of Changes in Common Stockholders' Investment (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Statement of Stockholders' Equity [Abstract]        
Cash dividends declared, per share $ 1.15 $ 0.75 $ 4.60 $ 3.00
Other comprehensive income, tax benefit $ (5) $ (2) $ 23 $ 3
Purchase of treasury stock 1,300,000 6,100,000 9,200,000 8,900,000
Employee incentive plans and other, shares issued 200,000 300,000 1,000,000.0 1,100,000
v3.22.4
General
 9 Months Ended
Feb. 28, 2023
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, 2022 (“Annual Report”). 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 February 28, 2023, and the results of our operations for the three- and nine-month periods ended February 28, 2023 and 2022, cash flows for the nine-month periods ended February 28, 2023 and 2022, and changes in common stockholders’ investment for the three- and nine-month periods ended February 28, 2023 and 2022. Operating results for the three- and nine-month periods ended February 28, 2023 are not necessarily indicative of the results that may be expected for the year ending May 31, 2023.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2023 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

REVENUE RECOGNITION.

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions.

Gross contract assets related to in-transit shipments totaled $737 million and $861 million at February 28, 2023 and May 31, 2022, respectively. Contract assets net of deferred unearned revenue were $527 million and $623 million at February 28, 2023 and May 31, 2022, respectively. Contract assets are included within current assets in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities related to advance payments from customers were $15 million and $8 million at February 28, 2023 and May 31, 2022, respectively. Contract liabilities are included within current liabilities in the accompanying unaudited condensed consolidated balance sheets.

Disaggregation of Revenue

The following table provides revenue by service type (in millions) for the periods ended February 28. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE BY SERVICE TYPE

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment:

 

 

 

 

 

 

 

 

 

 

 

 

Package:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. overnight box

 

$

2,165

 

 

$

2,275

 

 

$

6,718

 

 

$

6,694

 

U.S. overnight envelope

 

 

478

 

 

 

479

 

 

 

1,477

 

 

 

1,435

 

U.S. deferred

 

 

1,346

 

 

 

1,422

 

 

 

3,886

 

 

 

3,960

 

Total U.S. domestic package revenue

 

 

3,989

 

 

 

4,176

 

 

 

12,081

 

 

 

12,089

 

International priority

 

 

2,566

 

 

 

2,991

 

 

 

8,286

 

 

 

8,937

 

International economy

 

 

698

 

 

 

697

 

 

 

2,116

 

 

 

2,072

 

Total international export package revenue

 

 

3,264

 

 

 

3,688

 

 

 

10,402

 

 

 

11,009

 

International domestic(1)

 

 

1,003

 

 

 

1,016

 

 

 

3,013

 

 

 

3,277

 

Total package revenue

 

 

8,256

 

 

 

8,880

 

 

 

25,496

 

 

 

26,375

 

Freight:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

719

 

 

 

712

 

 

 

2,299

 

 

 

2,262

 

International priority

 

 

687

 

 

 

948

 

 

 

2,387

 

 

 

2,815

 

International economy

 

 

358

 

 

 

378

 

 

 

1,123

 

 

 

1,230

 

International airfreight

 

 

47

 

 

 

40

 

 

 

126

 

 

 

134

 

Total freight revenue

 

 

1,811

 

 

 

2,078

 

 

 

5,935

 

 

 

6,441

 

Other

 

 

278

 

 

 

346

 

 

 

905

 

 

 

1,059

 

Total FedEx Express segment

 

 

10,345

 

 

 

11,304

 

 

 

32,336

 

 

 

33,875

 

FedEx Ground segment

 

 

8,658

 

 

 

8,800

 

 

 

25,211

 

 

 

24,741

 

FedEx Freight segment

 

 

2,186

 

 

 

2,253

 

 

 

7,363

 

 

 

6,776

 

FedEx Services segment

 

 

87

 

 

 

65

 

 

 

225

 

 

 

177

 

Other and eliminations(2)

 

 

893

 

 

 

1,219

 

 

 

3,090

 

 

 

3,549

 

 

 

$

22,169

 

 

$

23,641

 

 

$

68,225

 

 

$

69,118

 
(1)
International domestic revenue relates to our international intra-country operations.
(2)
Includes the FedEx Office and Print Services, Inc. (“FedEx Office”), FedEx Logistics, Inc. (“FedEx Logistics”), and FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segments.

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who are a small number of its total employees, are employed under a collective bargaining agreement that took effect on November 2, 2015, and became amendable in November 2021. Bargaining for a successor agreement began in May 2021 and continues. In November 2022, the National Mediation Board (“NMB”) began actively mediating the negotiations. The NMB is the U.S. governmental agency that oversees labor agreements for entities covered by the Railway Labor Act of 1926, as amended. The conduct of mediated negotiations has no impact on our operations. A small number of our other employees are members of unions.

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 outstanding incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report.

Our stock-based compensation expense was $34 million for the three-month period ended February 28, 2023 and $142 million for the nine-month period ended February 28, 2023. Our stock-based compensation expense was $39 million for the three-month period ended February 28, 2022 and $151 million for the nine-month period ended February 28, 2022. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.

 

BUSINESS OPTIMIZATION AND REALIGNMENT COSTS. In the first quarter of 2023, FedEx announced DRIVE, a comprehensive program to improve the company’s long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments and lower our overhead and support costs. At FedEx Express, we plan to reconfigure the air network, optimize sorts and surface linehaul, drive efficiencies in Europe, and harmonize the global clearance process. At FedEx Ground Package System, Inc. (“FedEx Ground”), we are transforming our pickup-and-delivery, package sortation, and transportation operations through enhanced planning tools, advanced data analytics, and increased focus on investment returns in order to drive efficiency improvements. Additionally, we plan to transform our back-office operations through automation, modernizing our infrastructure, and further consolidating the shared-services functions, resulting in procurement and other cost savings from shared and allocated overhead expenses. The DRIVE program will also facilitate the achievement of Network 2.0, a plan to consolidate sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul networks by moving beyond discrete collaboration to an end-to-end optimized network.

 

We incurred costs associated with our business optimization activities of $120 million ($92 million, net of tax, or $0.36 per diluted share) in the third quarter and $180 million ($138 million, net of tax, or $0.53 per diluted share) in the nine months of 2023. These costs were primarily related to consulting services, severance and related costs associated with organizational changes announced in the third quarter of 2023, and idling our operations in Russia. These business optimization costs are included in Corporate, other, and eliminations and FedEx Express.

 

In 2021, FedEx Express announced a workforce reduction plan in Europe related to the network integration of TNT Express. The plan affected approximately 5,000 employees in Europe across operational teams and back-office functions and is substantially complete as of February 28, 2023.

We incurred costs associated with our business realignment activities of $3 million ($2 million, net of tax, or $0.01 per diluted share) in the third quarter and $17 million ($13 million, net of tax, or $0.05 per diluted share) in the nine months of 2023. We incurred costs associated with our business realignment activities of $107 million ($82 million, net of tax, or $0.31 per diluted share) in the third quarter and $218 million ($168 million, net of tax, or $0.63 per diluted share) in the nine months of 2022. These costs are related to certain employee severance arrangements. Payments under this program totaled approximately $18 million in the third quarter and $102 million in the nine months of 2023. We expect the pre-tax cost of our business realignment activities to be approximately $415 million through 2023.

For additional information about the business optimization and realignment costs, see the section titled “Business Optimization and Realignment Costs” included in Item 2 of this Form 10-Q (“Management’s Discussion and Analysis of Results of Operations and Financial Condition”).

DERIVATIVE FINANCIAL INSTRUMENTS. Our risk management strategy includes the select use of derivative instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. In accordance with our risk management policies, we do not hold or issue derivative instruments for trading or speculative purposes. All derivative instruments are recognized in the financial statements at fair value, regardless of the purpose or intent for holding them.

When we become a party to a derivative instrument and intend to apply hedge accounting, we formally document the hedge relationship and the risk management objective for undertaking the hedge, which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge.

If a derivative is designated as a cash flow hedge, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in other comprehensive income. For net investment hedges, the entire change in the fair value is recorded in other comprehensive income. Any portion of a change in the fair value of a derivative that is considered to be ineffective, along with the change in fair value of any derivatives not designated in a hedging relationship, is immediately recognized in the income statement. We do not have any derivatives designated as a cash flow hedge for any period presented. As of February 28, 2023, we had €136 million of debt designated as a net investment hedge to reduce the volatility of the U.S. dollar value of a portion of our net investment in a euro-denominated consolidated subsidiary. As of February 28, 2023, the hedge remains effective.

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly affect 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.

New Accounting Standards and Accounting Standards Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease the potential burden in accounting for reference rate reform. The standard provides optional expedients and exceptions for applying accounting principles generally accepted in the United States to existing contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate to be discontinued because of reference rate reform. The guidance was effective upon issuance and can generally be applied through December 31, 2024. While there has been no material effect to our financial condition, results of operations, or cash flows from reference rate reform as of February 28, 2023, we continue to monitor our contracts and transactions for potential application of this ASU.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. Our historical accounting is consistent with these clarifications. We early adopted this standard effective September 1, 2022. The adoption of this standard did not have an effect on our consolidated financial statements and related disclosures.

In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations, which requires a buyer in a supplier finance program (e.g., reverse factoring) to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The changes will be effective June 1, 2023 (fiscal 2024). We are assessing the effect of this new standard on our consolidated financial statements.

EQUITY INVESTMENTS. Equity investments in private companies for which we do not have the ability to exercise significant influence are accounted for at cost, with adjustments for observable changes in prices or impairments, and are classified as “Other assets” on our consolidated balance sheets with adjustments recognized in “Other (expense) income, net” on our consolidated statements of income. Each reporting period, we perform a qualitative assessment to evaluate whether the investment is impaired. Our assessment includes a review of available recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, we write it down to its estimated fair value.

Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in “Other assets” on our consolidated balance sheets and measured at fair value with changes recognized in “Other (expense) income, net” on our consolidated statements of income.

As of February 28, 2023, these investments were not material to our financial position or results of operations.

TREASURY SHARES. In December 2021, our Board of Directors authorized a new stock repurchase program of up to $5 billion of FedEx common stock. As part of the repurchase program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in October 2022 to repurchase an aggregate of $1.5 billion of our common stock.

During the third quarter of 2023, the ASR transaction was completed, and 1.3 million shares were delivered under the ASR agreement. The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume-weighted average price of our stock during the term of the transaction. The repurchased shares were accounted for as a reduction to common stockholders’ investment in the accompanying consolidated balance sheet and resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. The 1.3 million shares delivered under the ASR agreement were the only shares of FedEx common stock we repurchased during the third quarter of 2023.

During the nine months ended February 28, 2023, we repurchased 9.2 million shares of FedEx common stock at an average price of $163.39 per share for a total of $1.5 billion. As of February 28, 2023, approximately $2.6 billion remained available to use for repurchases under the program.

Shares under the 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 limits were set for the completion of the program, and the program may be suspended or discontinued at any time.

DIVIDENDS DECLARED PER COMMON SHARE. On February 17, 2023, our Board of Directors declared a quarterly dividend of $1.15 per share of common stock. The dividend will be paid on April 3, 2023 to stockholders of record as of the close of business on March 13, 2023. 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. There are no material restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans, or advances.
v3.22.4
Credit Losses
 9 Months Ended
Feb. 28, 2023
Credit Loss [Abstract]  
Credit Losses

(2) Credit Losses

We are exposed to credit losses primarily through our trade receivables. We assess ability to pay for certain customers by conducting a credit review, which considers the customer’s established credit rating and our assessment of creditworthiness. We determine the allowance for credit losses on accounts receivable using a combination of specific reserves for accounts that are deemed to exhibit credit loss indicators and general reserves that are determined using loss rates based on historical write-offs by geography and recent forecasted information, including underlying economic expectations. We update our estimate of credit loss reserves quarterly, considering recent write-offs, collections information, and underlying economic expectations.

Credit losses were $111 million for the three-month period ended February 28, 2023 and $536 million for the nine-month period ended February 28, 2023. Credit losses were $116 million for the three-month period ended February 28, 2022 and $327 million for the nine-month period ended February 28, 2022. Our allowance for credit losses was $452 million at February 28, 2023 and $340 million at May 31, 2022.
v3.22.4
Accumulated Other Comprehensive Loss
 9 Months Ended
Feb. 28, 2023
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Loss

(3) Accumulated Other Comprehensive Loss

The following table provides changes in accumulated other comprehensive income (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28 (in millions; amounts in parentheses indicate debits to AOCI):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Foreign currency translation loss:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(1,427

)

 

$

(1,026

)

 

$

(1,148

)

 

$

(785

)

Translation adjustments

 

 

80

 

 

 

91

 

 

 

(199

)

 

 

(150

)

Balance at end of period

 

 

(1,347

)

 

 

(935

)

 

 

(1,347

)

 

 

(935

)

Retirement plans adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

42

 

 

 

49

 

 

 

45

 

 

 

53

 

Reclassifications from AOCI

 

 

(3

)

 

 

(1

)

 

 

(6

)

 

 

(5

)

Balance at end of period

 

 

39

 

 

 

48

 

 

 

39

 

 

 

48

 

Accumulated other comprehensive (loss) at end of period

 

$

(1,308

)

 

$

(887

)

 

$

(1,308

)

 

$

(887

)

The following table presents details of the reclassifications from AOCI for the periods ended February 28 (in millions; amounts in parentheses indicate debits to earnings):

 

 

 

Amount Reclassified from
AOCI

 

 

Affected Line Item in the
Income Statement

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

Amortization of retirement plans
   prior service credits, before tax

 

$

3

 

 

$

2

 

 

$

7

 

 

$

7

 

 

Other retirement plans, net

Income tax benefit

 

 

—

 

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

Provision for income taxes

AOCI reclassifications, net of tax

 

$

3

 

 

$

1

 

 

$

6

 

 

$

5

 

 

Net income
v3.22.4
Financing Arrangements
 9 Months Ended
Feb. 28, 2023
Debt and Lease Obligation [Abstract]  
Financing Arrangements

(4) Financing Arrangements

We have a shelf registration statement filed with the SEC that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by FedEx Express to sell, in one or more future offerings, pass-through certificates.

FedEx Express has issued $970 million of Pass-Through Certificates, Series 2020-1AA (the “Certificates”) with a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft with a net book value of $1.7 billion at February 28, 2023. The payment obligations of FedEx Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx. FedEx Express is using the proceeds from the issuance for general corporate purposes.

We have a $2.0 billion five-year credit agreement (the “Five-Year Credit Agreement”) and a $1.5 billion three-year credit agreement (the “Three-Year Credit Agreement” and together with the Five-Year Credit Agreement, the “Credit Agreements”). The Five-Year Credit Agreement expires in March 2026 and includes a $250 million letter of credit sublimit. The Three-Year Credit Agreement expires in March 2025. The Credit Agreements are available to finance our operations and other cash flow needs. As of February 28, 2023, no commercial paper was outstanding, and we had $250 million of the letter of credit sublimit unused under the Five-Year Credit Agreement. Outstanding commercial paper reduces the amount available to borrow under the Credit Agreements.

Our Credit Agreements contain a financial covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans mark-to-market (“MTM”) adjustments, noncash pension service costs, and noncash asset impairment charges) before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the last day of each fiscal quarter on a rolling four-quarters basis. The ratio of our debt to adjusted EBITDA was 1.99 to 1.0 at February 28, 2023.

The financial covenant discussed above is the only significant restrictive covenant in the Credit Agreements. The Credit Agreements contain 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 in the Credit Agreements and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. If we failed to comply with the financial covenant or any other covenants in the Credit Agreements, our access to financing could become limited.

Long-term debt, including current maturities and exclusive of finance leases, had carrying values of $19.7 billion at February 28, 2023 and $19.8 billion at May 31, 2022, compared with estimated fair values of $17.1 billion at February 28, 2023 and $18.8 billion at May 31, 2022. The annualized weighted-average interest rate on long-term debt was 3.5% at February 28, 2023. 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.
v3.22.4
Computation of Earnings Per Share
 9 Months Ended
Feb. 28, 2023
Earnings Per Share [Abstract]  
Computation of Earnings Per Share

(5) Computation of Earnings Per Share

The calculation of basic and diluted earnings per common share for the periods ended February 28 was as follows (in millions, except per share amounts):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings allocable to common shares(1)

 

$

770

 

 

$

1,110

 

 

$

2,430

 

 

$

3,262

 

Weighted-average common shares

 

 

251

 

 

 

261

 

 

 

255

 

 

 

264

 

Basic earnings per common share

 

$

3.07

 

 

$

4.26

 

 

$

9.52

 

 

$

12.36

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings allocable to common shares(1)

 

$

770

 

 

$

1,110

 

 

$

2,430

 

 

$

3,262

 

Weighted-average common shares

 

 

251

 

 

 

261

 

 

 

255

 

 

 

264

 

Dilutive effect of share-based awards

 

 

2

 

 

 

4

 

 

 

2

 

 

 

4

 

Weighted-average diluted shares

 

 

253

 

 

 

265

 

 

 

257

 

 

 

268

 

Diluted earnings per common share

 

$

3.05

 

 

$

4.20

 

 

$

9.46

 

 

$

12.17

 

Anti-dilutive options excluded from diluted earnings per
   common share

 

 

7.8

 

 

 

4.4

 

 

 

7.7

 

 

 

3.8

 

 

(1) Net earnings available to participating securities were immaterial in all periods presented.
v3.22.4
Retirement Plans
 9 Months Ended
Feb. 28, 2023
Retirement Benefits [Abstract]  
Retirement Plans

(6) 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 periods ended February 28 were as follows (in millions):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Defined benefit pension plans, net

 

$

59

 

 

$

2

 

 

$

176

 

 

$

(3

)

Defined contribution plans

 

 

242

 

 

 

226

 

 

 

714

 

 

 

577

 

Postretirement healthcare plans

 

 

24

 

 

 

22

 

 

 

70

 

 

 

67

 

Retirement plans MTM net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

260

 

 

 

$

325

 

 

$

250

 

 

$

960

 

 

$

901

 

 

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):

 

 

 

Three Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

162

 

 

$

209

 

 

$

13

 

 

$

14

 

 

$

10

 

 

$

12

 

Other retirement plans expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

304

 

 

 

254

 

 

 

8

 

 

 

8

 

 

 

14

 

 

 

10

 

Expected return on plan assets

 

 

(422

)

 

 

(478

)

 

 

(3

)

 

 

(3

)

 

 

—

 

 

 

—

 

Amortization of prior service credit and other

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

 

(119

)

 

 

(225

)

 

 

3

 

 

 

4

 

 

 

14

 

 

 

10

 

 

 

$

43

 

 

$

(16

)

 

$

16

 

 

$

18

 

 

$

24

 

 

$

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

488

 

 

$

625

 

 

$

34

 

 

$

43

 

 

$

28

 

 

$

36

 

Other retirement plans expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

913

 

 

 

765

 

 

 

25

 

 

 

27

 

 

 

42

 

 

 

31

 

Expected return on plan assets

 

 

(1,266

)

 

 

(1,433

)

 

 

(11

)

 

 

(23

)

 

 

—

 

 

 

—

 

Amortization of prior service credit and other

 

 

(5

)

 

 

(5

)

 

 

(2

)

 

 

(2

)

 

 

—

 

 

 

—

 

MTM net loss

 

 

—

 

 

 

36

 

 

 

—

 

 

 

224

 

 

 

—

 

 

 

—

 

 

 

 

(358

)

 

 

(637

)

 

 

12

 

 

 

226

 

 

 

42

 

 

 

31

 

 

 

$

130

 

 

$

(12

)

 

$

46

 

 

$

269

 

 

$

70

 

 

$

67

 

 

For 2023, no pension contributions are required for our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) as they are fully funded under the Employee Retirement Income Security Act. We made voluntary contributions to our U.S. Pension Plans of $800 million during the nine months of 2023.

 

In the second quarter of 2022, we incurred a pre-tax, noncash MTM net loss of $36 million related to the U.S. FedEx Freight Pension Plan. During the second quarter of 2022, 21% of FedEx Freight Corporation (“FedEx Freight”) employees elected to move from a pension/401(k) benefit structure to a new 401(k)-only structure with a higher company match effective January 1, 2022. The $36 million net loss consisted of a $75 million MTM loss due to a lower discount rate, partially offset by a $39 million curtailment gain.

 

We incurred an additional pre-tax, noncash MTM net loss of $224 million in the second quarter of 2022 related to the termination of the TNT Express Netherlands Pension Plan. Effective October 1, 2021, the responsibility of all pension assets and liabilities of this plan was transferred to a separate, multi-employer pension plan.

v3.22.4
Business Segment Information
 9 Months Ended
Feb. 28, 2023
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]  
Business Segment Information

(7) Business Segment Information

We provide a broad portfolio of transportation, e-commerce, and business services through companies competing collectively, operating collaboratively, and innovating digitally under the respected FedEx brand. Our primary operating companies are FedEx Express, the world’s largest express transportation company; FedEx Ground, a leading North American provider of small-package ground delivery services; and FedEx Freight, a leading North American provider of less-than-truckload (“LTL”) freight transportation services. These companies represent our major service lines and, along with FedEx Corporate Services, Inc. (“FedEx Services”), constitute our reportable segments.

Our reportable segments include the following businesses:

 

FedEx Express Segment

FedEx Express (express transportation, small-package ground delivery, and freight transportation)

 

FedEx Custom Critical, Inc. (time-critical transportation)

 

FedEx Ground Segment

FedEx Ground (small-package ground delivery)

 

 

FedEx Freight Segment

FedEx Freight (LTL freight transportation)

 

 

FedEx Services Segment

FedEx Services (sales, marketing, information technology, communications, customer

     service, technical support, billing and collection services, and back-office functions)

References to our transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight segment.

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative, and information-technology functions in shared services operations for U.S. customers of our major business units and certain back-office support to our operating segments which allows 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 by FedEx Express in their natural expense line items.

The FedEx Services segment provides direct and indirect support to our operating segments, and we allocate all of the net operating costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. 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 effect of its total allocated net operating costs on our operating 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 revenue 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.

Corporate, Other, and Eliminations

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, including certain other costs and credits not attributed to our core business, as well as certain costs associated with developing our “innovate digitally” strategic pillar through our FedEx Dataworks operating segment. FedEx Dataworks is focused on creating solutions to transform the digital and physical experiences of our customers and team members. ShopRunner, Inc. was merged into FedEx Dataworks during the third quarter of 2023.

Also included in Corporate and other are the FedEx Office operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment, which provides integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding.

The results of Corporate, other, and eliminations are not allocated to the other business segments.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment in order to optimize our resources. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenue of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material.

The following table provides a reconciliation of reportable segment revenue and operating income (loss) to our unaudited condensed consolidated financial statement totals for the periods ended February 28 (in millions):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment

 

$

10,345

 

 

$

11,304

 

 

$

32,336

 

 

$

33,875

 

FedEx Ground segment

 

 

8,658

 

 

 

8,800

 

 

 

25,211

 

 

 

24,741

 

FedEx Freight segment

 

 

2,186

 

 

 

2,253

 

 

 

7,363

 

 

 

6,776

 

FedEx Services segment

 

 

87

 

 

 

65

 

 

 

225

 

 

 

177

 

Other and eliminations

 

 

893

 

 

 

1,219

 

 

 

3,090

 

 

 

3,549

 

 

 

$

22,169

 

 

$

23,641

 

 

$

68,225

 

 

$

69,118

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment

 

$

119

 

 

$

520

 

 

$

634

 

 

$

2,036

 

FedEx Ground segment

 

 

844

 

 

 

641

 

 

 

2,136

 

 

 

1,793

 

FedEx Freight segment

 

 

386

 

 

 

337

 

 

 

1,477

 

 

 

1,061

 

Corporate, other, and eliminations

 

 

(307

)

 

 

(172

)

 

 

(838

)

 

 

(569

)

 

 

$

1,042

 

 

$

1,326

 

 

$

3,409

 

 

$

4,321

 
v3.22.4
Commitments
 9 Months Ended
Feb. 28, 2023
Commitments [Abstract]  
Commitments

(8) Commitments

As of February 28, 2023, our purchase commitments under various contracts for the remainder of 2023 and annually thereafter were as follows (in millions):

 

 

 

Aircraft and Related

 

 

Other(1)

 

 

Total

 

2023 (remainder)

 

$

271

 

 

$

228

 

 

$

499

 

2024

 

 

1,944

 

 

 

717

 

 

 

2,661

 

2025

 

 

1,565

 

 

 

550

 

 

 

2,115

 

2026

 

 

568

 

 

 

442

 

 

 

1,010

 

2027

 

 

296

 

 

 

172

 

 

 

468

 

Thereafter

 

 

1,913

 

 

 

139

 

 

 

2,052

 

Total

 

$

6,557

 

 

$

2,248

 

 

$

8,805

 

 

(1)
Primarily equipment and advertising contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

As of February 28, 2023, we had $930 million in deposits and progress payments on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our accompanying unaudited condensed consolidated balance sheets. Aircraft and related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of February 28, 2023 with the year of expected delivery:

 

 

 

Cessna SkyCourier 408

 

 

ATR 72-600F

 

 

B767F

 

 

B777F

 

 

Total

 

2023 (remainder)

 

 

5

 

 

 

4

 

 

 

3

 

 

 

—

 

 

 

12

 

2024

 

 

13

 

 

 

8

 

 

 

14

 

 

 

4

 

 

 

39

 

2025

 

 

12

 

 

 

6

 

 

 

10

 

 

 

2

 

 

 

30

 

2026

 

 

14

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

15

 

2027

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

44

 

 

 

19

 

 

 

27

 

 

 

6

 

 

 

96

 

 

A summary of future minimum lease payments under noncancelable operating and finance leases with an initial or remaining term in excess of one year as of February 28, 2023 is as follows (in millions):

 

 

 

Aircraft
and Related
Equipment

 

 

Facilities
and Other

 

 

Total
Operating
Leases

 

 

Finance Leases

 

 

Total Leases

 

2023 (remainder)

 

$

34

 

 

$

570

 

 

$

604

 

 

$

34

 

 

$

638

 

2024

 

 

103

 

 

 

2,905

 

 

 

3,008

 

 

 

91

 

 

 

3,099

 

2025

 

 

84

 

 

 

2,600

 

 

 

2,684

 

 

 

38

 

 

 

2,722

 

2026

 

 

81

 

 

 

2,322

 

 

 

2,403

 

 

 

30

 

 

 

2,433

 

2027

 

 

80

 

 

 

2,046

 

 

 

2,126

 

 

 

22

 

 

 

2,148

 

Thereafter

 

 

170

 

 

 

9,790

 

 

 

9,960

 

 

 

669

 

 

 

10,629

 

Total lease payments

 

 

552

 

 

 

20,233

 

 

 

20,785

 

 

 

884

 

 

 

21,669

 

Less imputed interest

 

 

(43

)

 

 

(2,923

)

 

 

(2,966

)

 

 

(345

)

 

 

(3,311

)

Present value of lease liability

 

$

509

 

 

$

17,310

 

 

$

17,819

 

 

$

539

 

 

$

18,358

 

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.

As of February 28, 2023, FedEx has entered into additional leases which have not yet commenced and are therefore not part of the right-of-use asset and liability. These leases are generally for build-to-suit facilities and have undiscounted future payments of approximately $2.3 billion that will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from 2023 to 2024.
v3.22.4
Contingencies
 9 Months Ended
Feb. 28, 2023
Loss Contingency [Abstract]  
Contingencies

(9) Contingencies

 

Service Provider Lawsuits. FedEx Ground is defending lawsuits in which it is alleged that FedEx Ground should be treated as a joint employer of drivers employed by service providers 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 these matters could, among other things, entitle service providers’ drivers to certain wage payments from the service providers and FedEx Ground and result in employment and withholding tax and benefit liability for FedEx Ground. We continue to believe that FedEx Ground is not an employer or joint employer of the drivers of these independent businesses.

 

FedEx Services Employment Lawsuit. In May 2021, FedEx Services was named as a defendant in a lawsuit filed in the U.S. District Court for the Southern District of Texas related to the termination of a former FedEx Services employee. The complaint alleged race discrimination and retaliation for complaints of discrimination under Section 1981 of the Civil Rights Act of 1866 and Title VII of the Civil Rights Act of 1964. After trial, on October 25, 2022, the jury found in favor of FedEx Services on the race discrimination claims but awarded the plaintiff compensatory damages of $1.16 million for emotional distress and punitive damages of $365 million for the retaliation claims. The court entered final judgment in the amount of the jury verdict. FedEx Services has appealed the verdict to the U.S. Court of Appeals for the Fifth Circuit. FedEx Services will argue on appeal that plaintiff’s claims were not timely filed, punitive damages are not warranted at all and, if allowed, must be reduced to no greater than a single-digit multiple of the award for compensatory damages based on the United States Supreme Court’s ruling in State Farm v. Campbell, and the compensatory damages award must be reduced to conform with the evidence and the Fifth Circuit’s maximum recovery rule. FedEx Services will argue in the alternative that a new trial should be granted.

 

FedEx believes ultimate compensatory and punitive damages and pre- and post-judgment interest up to $75 million will be covered by insurance, subject to a retention of $5 million. An immaterial loss accrual below the retention has been recorded in FedEx’s consolidated financial statements.

 

FedEx Ground Negligence Lawsuit. In December 2022, FedEx Ground was named as a defendant in a lawsuit filed in Texas state court related to the alleged kidnapping and first-degree murder of a minor by a driver employed by a service provider engaged by FedEx Ground. The complaint alleges compensatory and punitive damages against FedEx Ground for negligent and gross negligent hiring and retention, as well as negligent entrustment. The service provider and driver are also named as defendants in the lawsuit. An immaterial loss accrual has been recorded in FedEx’s consolidated financial statements. It is reasonably possible that an additional material loss could be incurred. Given the early stage of the litigation, we cannot estimate the amount or range of such additional loss, if any.

 

Other Matters. 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, as well as other lawsuits containing allegations that FedEx and its subsidiaries are responsible for third-party losses related to vehicle accidents that could exceed our insurance coverage for such losses. 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.

 

Environmental Matters. SEC regulations require us to disclose certain information about proceedings arising under federal, state, or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to the SEC regulations, FedEx uses a threshold of $1 million or more for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are no environmental matters required to be disclosed for this period.
v3.22.4
Supplemental Cash Flow Information
 9 Months Ended
Feb. 28, 2023
Supplemental Cash Flow Information [Abstract]  
Supplemental Cash Flow Information

(10) Supplemental Cash Flow Information

Cash paid for interest expense and income taxes for the nine-month periods ended February 28 was as follows (in millions):

 

 

 

2023

 

 

2022

 

Cash payments for:

 

 

 

 

 

 

Interest (net of capitalized interest)

 

$

497

 

 

$

496

 

Income taxes

 

$

823

 

 

$

628

 

Income tax refunds received

 

 

(50

)

 

 

(180

)

Cash tax payments, net

 

$

773

 

 

$

448

 
v3.22.4
General (Policies)
 9 Months Ended
Feb. 28, 2023
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, 2022 (“Annual Report”). 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 February 28, 2023, and the results of our operations for the three- and nine-month periods ended February 28, 2023 and 2022, cash flows for the nine-month periods ended February 28, 2023 and 2022, and changes in common stockholders’ investment for the three- and nine-month periods ended February 28, 2023 and 2022. Operating results for the three- and nine-month periods ended February 28, 2023 are not necessarily indicative of the results that may be expected for the year ending May 31, 2023.

Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2023 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.

Revenue Recognition

REVENUE RECOGNITION.

Contract Assets and Liabilities

Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right to payment only once all performance obligations have been completed (e.g., packages have been delivered). Contract assets are generally classified as current, and the full balance is converted each quarter based on the short-term nature of the transactions. Our contract liabilities consist of advance payments and billings in excess of revenue. The full balance of deferred revenue is converted each quarter based on the short-term nature of the transactions.

Gross contract assets related to in-transit shipments totaled $737 million and $861 million at February 28, 2023 and May 31, 2022, respectively. Contract assets net of deferred unearned revenue were $527 million and $623 million at February 28, 2023 and May 31, 2022, respectively. Contract assets are included within current assets in the accompanying unaudited condensed consolidated balance sheets. Contract liabilities related to advance payments from customers were $15 million and $8 million at February 28, 2023 and May 31, 2022, respectively. Contract liabilities are included within current liabilities in the accompanying unaudited condensed consolidated balance sheets.

Disaggregation of Revenue

The following table provides revenue by service type (in millions) for the periods ended February 28. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE BY SERVICE TYPE

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment:

 

 

 

 

 

 

 

 

 

 

 

 

Package:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. overnight box

 

$

2,165

 

 

$

2,275

 

 

$

6,718

 

 

$

6,694

 

U.S. overnight envelope

 

 

478

 

 

 

479

 

 

 

1,477

 

 

 

1,435

 

U.S. deferred

 

 

1,346

 

 

 

1,422

 

 

 

3,886

 

 

 

3,960

 

Total U.S. domestic package revenue

 

 

3,989

 

 

 

4,176

 

 

 

12,081

 

 

 

12,089

 

International priority

 

 

2,566

 

 

 

2,991

 

 

 

8,286

 

 

 

8,937

 

International economy

 

 

698

 

 

 

697

 

 

 

2,116

 

 

 

2,072

 

Total international export package revenue

 

 

3,264

 

 

 

3,688

 

 

 

10,402

 

 

 

11,009

 

International domestic(1)

 

 

1,003

 

 

 

1,016

 

 

 

3,013

 

 

 

3,277

 

Total package revenue

 

 

8,256

 

 

 

8,880

 

 

 

25,496

 

 

 

26,375

 

Freight:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

719

 

 

 

712

 

 

 

2,299

 

 

 

2,262

 

International priority

 

 

687

 

 

 

948

 

 

 

2,387

 

 

 

2,815

 

International economy

 

 

358

 

 

 

378

 

 

 

1,123

 

 

 

1,230

 

International airfreight

 

 

47

 

 

 

40

 

 

 

126

 

 

 

134

 

Total freight revenue

 

 

1,811

 

 

 

2,078

 

 

 

5,935

 

 

 

6,441

 

Other

 

 

278

 

 

 

346

 

 

 

905

 

 

 

1,059

 

Total FedEx Express segment

 

 

10,345

 

 

 

11,304

 

 

 

32,336

 

 

 

33,875

 

FedEx Ground segment

 

 

8,658

 

 

 

8,800

 

 

 

25,211

 

 

 

24,741

 

FedEx Freight segment

 

 

2,186

 

 

 

2,253

 

 

 

7,363

 

 

 

6,776

 

FedEx Services segment

 

 

87

 

 

 

65

 

 

 

225

 

 

 

177

 

Other and eliminations(2)

 

 

893

 

 

 

1,219

 

 

 

3,090

 

 

 

3,549

 

 

 

$

22,169

 

 

$

23,641

 

 

$

68,225

 

 

$

69,118

 
(1)
International domestic revenue relates to our international intra-country operations.
(2)
Includes the FedEx Office and Print Services, Inc. (“FedEx Office”), FedEx Logistics, Inc. (“FedEx Logistics”), and FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segments.
Employees Under Collective Bargaining Arrangements

EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS. The pilots of Federal Express Corporation (“FedEx Express”), who are a small number of its total employees, are employed under a collective bargaining agreement that took effect on November 2, 2015, and became amendable in November 2021. Bargaining for a successor agreement began in May 2021 and continues. In November 2022, the National Mediation Board (“NMB”) began actively mediating the negotiations. The NMB is the U.S. governmental agency that oversees labor agreements for entities covered by the Railway Labor Act of 1926, as amended. The conduct of mediated negotiations has no impact on our operations. A small number of our other employees are members of unions.
Stock-Based Compensation

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 outstanding incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report.

Our stock-based compensation expense was $34 million for the three-month period ended February 28, 2023 and $142 million for the nine-month period ended February 28, 2023. Our stock-based compensation expense was $39 million for the three-month period ended February 28, 2022 and $151 million for the nine-month period ended February 28, 2022. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.
Business Optimization and Realignment Costs

BUSINESS OPTIMIZATION AND REALIGNMENT COSTS. In the first quarter of 2023, FedEx announced DRIVE, a comprehensive program to improve the company’s long-term profitability. This program includes a business optimization plan to drive efficiency among our transportation segments and lower our overhead and support costs. At FedEx Express, we plan to reconfigure the air network, optimize sorts and surface linehaul, drive efficiencies in Europe, and harmonize the global clearance process. At FedEx Ground Package System, Inc. (“FedEx Ground”), we are transforming our pickup-and-delivery, package sortation, and transportation operations through enhanced planning tools, advanced data analytics, and increased focus on investment returns in order to drive efficiency improvements. Additionally, we plan to transform our back-office operations through automation, modernizing our infrastructure, and further consolidating the shared-services functions, resulting in procurement and other cost savings from shared and allocated overhead expenses. The DRIVE program will also facilitate the achievement of Network 2.0, a plan to consolidate sortation facilities and equipment, reduce pickup-and-delivery routes, and optimize our enterprise linehaul networks by moving beyond discrete collaboration to an end-to-end optimized network.

 

We incurred costs associated with our business optimization activities of $120 million ($92 million, net of tax, or $0.36 per diluted share) in the third quarter and $180 million ($138 million, net of tax, or $0.53 per diluted share) in the nine months of 2023. These costs were primarily related to consulting services, severance and related costs associated with organizational changes announced in the third quarter of 2023, and idling our operations in Russia. These business optimization costs are included in Corporate, other, and eliminations and FedEx Express.

 

In 2021, FedEx Express announced a workforce reduction plan in Europe related to the network integration of TNT Express. The plan affected approximately 5,000 employees in Europe across operational teams and back-office functions and is substantially complete as of February 28, 2023.

We incurred costs associated with our business realignment activities of $3 million ($2 million, net of tax, or $0.01 per diluted share) in the third quarter and $17 million ($13 million, net of tax, or $0.05 per diluted share) in the nine months of 2023. We incurred costs associated with our business realignment activities of $107 million ($82 million, net of tax, or $0.31 per diluted share) in the third quarter and $218 million ($168 million, net of tax, or $0.63 per diluted share) in the nine months of 2022. These costs are related to certain employee severance arrangements. Payments under this program totaled approximately $18 million in the third quarter and $102 million in the nine months of 2023. We expect the pre-tax cost of our business realignment activities to be approximately $415 million through 2023.

For additional information about the business optimization and realignment costs, see the section titled “Business Optimization and Realignment Costs” included in Item 2 of this Form 10-Q (“Management’s Discussion and Analysis of Results of Operations and Financial Condition”).
Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS. Our risk management strategy includes the select use of derivative instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. In accordance with our risk management policies, we do not hold or issue derivative instruments for trading or speculative purposes. All derivative instruments are recognized in the financial statements at fair value, regardless of the purpose or intent for holding them.

When we become a party to a derivative instrument and intend to apply hedge accounting, we formally document the hedge relationship and the risk management objective for undertaking the hedge, which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge.

If a derivative is designated as a cash flow hedge, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in other comprehensive income. For net investment hedges, the entire change in the fair value is recorded in other comprehensive income. Any portion of a change in the fair value of a derivative that is considered to be ineffective, along with the change in fair value of any derivatives not designated in a hedging relationship, is immediately recognized in the income statement. We do not have any derivatives designated as a cash flow hedge for any period presented. As of February 28, 2023, we had €136 million of debt designated as a net investment hedge to reduce the volatility of the U.S. dollar value of a portion of our net investment in a euro-denominated consolidated subsidiary. As of February 28, 2023, the hedge remains effective.

Recent Accounting Guidance

RECENT ACCOUNTING GUIDANCE. New accounting rules and disclosure requirements can significantly affect 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.

New Accounting Standards and Accounting Standards Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease the potential burden in accounting for reference rate reform. The standard provides optional expedients and exceptions for applying accounting principles generally accepted in the United States to existing contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate to be discontinued because of reference rate reform. The guidance was effective upon issuance and can generally be applied through December 31, 2024. While there has been no material effect to our financial condition, results of operations, or cash flows from reference rate reform as of February 28, 2023, we continue to monitor our contracts and transactions for potential application of this ASU.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. Our historical accounting is consistent with these clarifications. We early adopted this standard effective September 1, 2022. The adoption of this standard did not have an effect on our consolidated financial statements and related disclosures.

In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations, which requires a buyer in a supplier finance program (e.g., reverse factoring) to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. The amendments do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The changes will be effective June 1, 2023 (fiscal 2024). We are assessing the effect of this new standard on our consolidated financial statements.
Equity Investments

EQUITY INVESTMENTS. Equity investments in private companies for which we do not have the ability to exercise significant influence are accounted for at cost, with adjustments for observable changes in prices or impairments, and are classified as “Other assets” on our consolidated balance sheets with adjustments recognized in “Other (expense) income, net” on our consolidated statements of income. Each reporting period, we perform a qualitative assessment to evaluate whether the investment is impaired. Our assessment includes a review of available recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, we write it down to its estimated fair value.

Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in “Other assets” on our consolidated balance sheets and measured at fair value with changes recognized in “Other (expense) income, net” on our consolidated statements of income.

As of February 28, 2023, these investments were not material to our financial position or results of operations.
Treasury Shares

TREASURY SHARES. In December 2021, our Board of Directors authorized a new stock repurchase program of up to $5 billion of FedEx common stock. As part of the repurchase program, we entered into an accelerated share repurchase (“ASR”) agreement with a bank in October 2022 to repurchase an aggregate of $1.5 billion of our common stock.

During the third quarter of 2023, the ASR transaction was completed, and 1.3 million shares were delivered under the ASR agreement. The final number of shares delivered upon settlement of the ASR agreement was determined based on a discount to the volume-weighted average price of our stock during the term of the transaction. The repurchased shares were accounted for as a reduction to common stockholders’ investment in the accompanying consolidated balance sheet and resulted in a reduction of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. The 1.3 million shares delivered under the ASR agreement were the only shares of FedEx common stock we repurchased during the third quarter of 2023.

During the nine months ended February 28, 2023, we repurchased 9.2 million shares of FedEx common stock at an average price of $163.39 per share for a total of $1.5 billion. As of February 28, 2023, approximately $2.6 billion remained available to use for repurchases under the program.

Shares under the 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 limits were set for the completion of the program, and the program may be suspended or discontinued at any time.
Dividend Declared per Common Share

DIVIDENDS DECLARED PER COMMON SHARE. On February 17, 2023, our Board of Directors declared a quarterly dividend of $1.15 per share of common stock. The dividend will be paid on April 3, 2023 to stockholders of record as of the close of business on March 13, 2023. 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. There are no material restrictions on our ability to declare dividends, nor are there any material restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, loans, or advances.
v3.22.4
General (Tables)
 9 Months Ended
Feb. 28, 2023
Accounting Policies [Abstract]  
Schedule of Revenue by Service Type

The following table provides revenue by service type (in millions) for the periods ended February 28. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUE BY SERVICE TYPE

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment:

 

 

 

 

 

 

 

 

 

 

 

 

Package:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. overnight box

 

$

2,165

 

 

$

2,275

 

 

$

6,718

 

 

$

6,694

 

U.S. overnight envelope

 

 

478

 

 

 

479

 

 

 

1,477

 

 

 

1,435

 

U.S. deferred

 

 

1,346

 

 

 

1,422

 

 

 

3,886

 

 

 

3,960

 

Total U.S. domestic package revenue

 

 

3,989

 

 

 

4,176

 

 

 

12,081

 

 

 

12,089

 

International priority

 

 

2,566

 

 

 

2,991

 

 

 

8,286

 

 

 

8,937

 

International economy

 

 

698

 

 

 

697

 

 

 

2,116

 

 

 

2,072

 

Total international export package revenue

 

 

3,264

 

 

 

3,688

 

 

 

10,402

 

 

 

11,009

 

International domestic(1)

 

 

1,003

 

 

 

1,016

 

 

 

3,013

 

 

 

3,277

 

Total package revenue

 

 

8,256

 

 

 

8,880

 

 

 

25,496

 

 

 

26,375

 

Freight:

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

719

 

 

 

712

 

 

 

2,299

 

 

 

2,262

 

International priority

 

 

687

 

 

 

948

 

 

 

2,387

 

 

 

2,815

 

International economy

 

 

358

 

 

 

378

 

 

 

1,123

 

 

 

1,230

 

International airfreight

 

 

47

 

 

 

40

 

 

 

126

 

 

 

134

 

Total freight revenue

 

 

1,811

 

 

 

2,078

 

 

 

5,935

 

 

 

6,441

 

Other

 

 

278

 

 

 

346

 

 

 

905

 

 

 

1,059

 

Total FedEx Express segment

 

 

10,345

 

 

 

11,304

 

 

 

32,336

 

 

 

33,875

 

FedEx Ground segment

 

 

8,658

 

 

 

8,800

 

 

 

25,211

 

 

 

24,741

 

FedEx Freight segment

 

 

2,186

 

 

 

2,253

 

 

 

7,363

 

 

 

6,776

 

FedEx Services segment

 

 

87

 

 

 

65

 

 

 

225

 

 

 

177

 

Other and eliminations(2)

 

 

893

 

 

 

1,219

 

 

 

3,090

 

 

 

3,549

 

 

 

$

22,169

 

 

$

23,641

 

 

$

68,225

 

 

$

69,118

 
(1)
International domestic revenue relates to our international intra-country operations.
(2)
Includes the FedEx Office and Print Services, Inc. (“FedEx Office”), FedEx Logistics, Inc. (“FedEx Logistics”), and FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segments.
v3.22.4
Accumulated Other Comprehensive Loss (Tables)
 9 Months Ended
Feb. 28, 2023
Accumulated Other Comprehensive Income Loss Tables [Abstract]  
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI")

The following table provides changes in accumulated other comprehensive income (“AOCI”), net of tax, reported in our unaudited condensed consolidated financial statements for the periods ended February 28 (in millions; amounts in parentheses indicate debits to AOCI):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Foreign currency translation loss:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

(1,427

)

 

$

(1,026

)

 

$

(1,148

)

 

$

(785

)

Translation adjustments

 

 

80

 

 

 

91

 

 

 

(199

)

 

 

(150

)

Balance at end of period

 

 

(1,347

)

 

 

(935

)

 

 

(1,347

)

 

 

(935

)

Retirement plans adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

 

42

 

 

 

49

 

 

 

45

 

 

 

53

 

Reclassifications from AOCI

 

 

(3

)

 

 

(1

)

 

 

(6

)

 

 

(5

)

Balance at end of period

 

 

39

 

 

 

48

 

 

 

39

 

 

 

48

 

Accumulated other comprehensive (loss) at end of period

 

$

(1,308

)

 

$

(887

)

 

$

(1,308

)

 

$

(887

)
Reclassification Out of Accumulated Other Comprehensive Income (Loss)

The following table presents details of the reclassifications from AOCI for the periods ended February 28 (in millions; amounts in parentheses indicate debits to earnings):

 

 

 

Amount Reclassified from
AOCI

 

 

Affected Line Item in the
Income Statement

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

Amortization of retirement plans
   prior service credits, before tax

 

$

3

 

 

$

2

 

 

$

7

 

 

$

7

 

 

Other retirement plans, net

Income tax benefit

 

 

—

 

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

Provision for income taxes

AOCI reclassifications, net of tax

 

$

3

 

 

$

1

 

 

$

6

 

 

$

5

 

 

Net income
v3.22.4
Computation of Earnings Per Share (Tables)
 9 Months Ended
Feb. 28, 2023
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 periods ended February 28 was as follows (in millions, except per share amounts):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings allocable to common shares(1)

 

$

770

 

 

$

1,110

 

 

$

2,430

 

 

$

3,262

 

Weighted-average common shares

 

 

251

 

 

 

261

 

 

 

255

 

 

 

264

 

Basic earnings per common share

 

$

3.07

 

 

$

4.26

 

 

$

9.52

 

 

$

12.36

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings allocable to common shares(1)

 

$

770

 

 

$

1,110

 

 

$

2,430

 

 

$

3,262

 

Weighted-average common shares

 

 

251

 

 

 

261

 

 

 

255

 

 

 

264

 

Dilutive effect of share-based awards

 

 

2

 

 

 

4

 

 

 

2

 

 

 

4

 

Weighted-average diluted shares

 

 

253

 

 

 

265

 

 

 

257

 

 

 

268

 

Diluted earnings per common share

 

$

3.05

 

 

$

4.20

 

 

$

9.46

 

 

$

12.17

 

Anti-dilutive options excluded from diluted earnings per
   common share

 

 

7.8

 

 

 

4.4

 

 

 

7.7

 

 

 

3.8

 

 

(1) Net earnings available to participating securities were immaterial in all periods presented.
v3.22.4
Retirement Plans (Tables)
 9 Months Ended
Feb. 28, 2023
Retirement Plan Tables [Abstract]  
Schedule of Retirement Plan Costs

Our retirement plans costs for the periods ended February 28 were as follows (in millions):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Defined benefit pension plans, net

 

$

59

 

 

$

2

 

 

$

176

 

 

$

(3

)

Defined contribution plans

 

 

242

 

 

 

226

 

 

 

714

 

 

 

577

 

Postretirement healthcare plans

 

 

24

 

 

 

22

 

 

 

70

 

 

 

67

 

Retirement plans MTM net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

260

 

 

 

$

325

 

 

$

250

 

 

$

960

 

 

$

901

 

 
Schedule of Net Periodic Benefit Cost

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):

 

 

 

Three Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

162

 

 

$

209

 

 

$

13

 

 

$

14

 

 

$

10

 

 

$

12

 

Other retirement plans expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

304

 

 

 

254

 

 

 

8

 

 

 

8

 

 

 

14

 

 

 

10

 

Expected return on plan assets

 

 

(422

)

 

 

(478

)

 

 

(3

)

 

 

(3

)

 

 

—

 

 

 

—

 

Amortization of prior service credit and other

 

 

(1

)

 

 

(1

)

 

 

(2

)

 

 

(1

)

 

 

—

 

 

 

—

 

 

 

 

(119

)

 

 

(225

)

 

 

3

 

 

 

4

 

 

 

14

 

 

 

10

 

 

 

$

43

 

 

$

(16

)

 

$

16

 

 

$

18

 

 

$

24

 

 

$

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Service cost

 

$

488

 

 

$

625

 

 

$

34

 

 

$

43

 

 

$

28

 

 

$

36

 

Other retirement plans expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

913

 

 

 

765

 

 

 

25

 

 

 

27

 

 

 

42

 

 

 

31

 

Expected return on plan assets

 

 

(1,266

)

 

 

(1,433

)

 

 

(11

)

 

 

(23

)

 

 

—

 

 

 

—

 

Amortization of prior service credit and other

 

 

(5

)

 

 

(5

)

 

 

(2

)

 

 

(2

)

 

 

—

 

 

 

—

 

MTM net loss

 

 

—

 

 

 

36

 

 

 

—

 

 

 

224

 

 

 

—

 

 

 

—

 

 

 

 

(358

)

 

 

(637

)

 

 

12

 

 

 

226

 

 

 

42

 

 

 

31

 

 

 

$

130

 

 

$

(12

)

 

$

46

 

 

$

269

 

 

$

70

 

 

$

67

 

 
v3.22.4
Business Segment Information (Tables)
 9 Months Ended
Feb. 28, 2023
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]  
Schedule of Segment Information

The following table provides a reconciliation of reportable segment revenue and operating income (loss) to our unaudited condensed consolidated financial statement totals for the periods ended February 28 (in millions):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment

 

$

10,345

 

 

$

11,304

 

 

$

32,336

 

 

$

33,875

 

FedEx Ground segment

 

 

8,658

 

 

 

8,800

 

 

 

25,211

 

 

 

24,741

 

FedEx Freight segment

 

 

2,186

 

 

 

2,253

 

 

 

7,363

 

 

 

6,776

 

FedEx Services segment

 

 

87

 

 

 

65

 

 

 

225

 

 

 

177

 

Other and eliminations

 

 

893

 

 

 

1,219

 

 

 

3,090

 

 

 

3,549

 

 

 

$

22,169

 

 

$

23,641

 

 

$

68,225

 

 

$

69,118

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

FedEx Express segment

 

$

119

 

 

$

520

 

 

$

634

 

 

$

2,036

 

FedEx Ground segment

 

 

844

 

 

 

641

 

 

 

2,136

 

 

 

1,793

 

FedEx Freight segment

 

 

386

 

 

 

337

 

 

 

1,477

 

 

 

1,061

 

Corporate, other, and eliminations

 

 

(307

)

 

 

(172

)

 

 

(838

)

 

 

(569

)

 

 

$

1,042

 

 

$

1,326

 

 

$

3,409

 

 

$

4,321

 
v3.22.4
Commitments (Tables)
 9 Months Ended
Feb. 28, 2023
Commitments Tables [Abstract]  
Schedule of Purchase Commitments

As of February 28, 2023, our purchase commitments under various contracts for the remainder of 2023 and annually thereafter were as follows (in millions):

 

 

 

Aircraft and Related

 

 

Other(1)

 

 

Total

 

2023 (remainder)

 

$

271

 

 

$

228

 

 

$

499

 

2024

 

 

1,944

 

 

 

717

 

 

 

2,661

 

2025

 

 

1,565

 

 

 

550

 

 

 

2,115

 

2026

 

 

568

 

 

 

442

 

 

 

1,010

 

2027

 

 

296

 

 

 

172

 

 

 

468

 

Thereafter

 

 

1,913

 

 

 

139

 

 

 

2,052

 

Total

 

$

6,557

 

 

$

2,248

 

 

$

8,805

 

 

(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 February 28, 2023 with the year of expected delivery:

 

 

 

Cessna SkyCourier 408

 

 

ATR 72-600F

 

 

B767F

 

 

B777F

 

 

Total

 

2023 (remainder)

 

 

5

 

 

 

4

 

 

 

3

 

 

 

—

 

 

 

12

 

2024

 

 

13

 

 

 

8

 

 

 

14

 

 

 

4

 

 

 

39

 

2025

 

 

12

 

 

 

6

 

 

 

10

 

 

 

2

 

 

 

30

 

2026

 

 

14

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

15

 

2027

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Thereafter

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

44

 

 

 

19

 

 

 

27

 

 

 

6

 

 

 

96

 
Summary of Future Minimum Lease Payments, Operating and Finance Leases

A summary of future minimum lease payments under noncancelable operating and finance leases with an initial or remaining term in excess of one year as of February 28, 2023 is as follows (in millions):

 

 

 

Aircraft
and Related
Equipment

 

 

Facilities
and Other

 

 

Total
Operating
Leases

 

 

Finance Leases

 

 

Total Leases

 

2023 (remainder)

 

$

34

 

 

$

570

 

 

$

604

 

 

$

34

 

 

$

638

 

2024

 

 

103

 

 

 

2,905

 

 

 

3,008

 

 

 

91

 

 

 

3,099

 

2025

 

 

84

 

 

 

2,600

 

 

 

2,684

 

 

 

38

 

 

 

2,722

 

2026

 

 

81

 

 

 

2,322

 

 

 

2,403

 

 

 

30

 

 

 

2,433

 

2027

 

 

80

 

 

 

2,046

 

 

 

2,126

 

 

 

22

 

 

 

2,148

 

Thereafter

 

 

170

 

 

 

9,790

 

 

 

9,960

 

 

 

669

 

 

 

10,629

 

Total lease payments

 

 

552

 

 

 

20,233

 

 

 

20,785

 

 

 

884

 

 

 

21,669

 

Less imputed interest

 

 

(43

)

 

 

(2,923

)

 

 

(2,966

)

 

 

(345

)

 

 

(3,311

)

Present value of lease liability

 

$

509

 

 

$

17,310

 

 

$

17,819

 

 

$

539

 

 

$

18,358

 
v3.22.4
Supplemental Cash Flow Information (Tables)
 9 Months Ended
Feb. 28, 2023
Supplemental Cash Flow Information [Abstract]  
Supplemental Cash Flow

Cash paid for interest expense and income taxes for the nine-month periods ended February 28 was as follows (in millions):

 

 

 

2023

 

 

2022

 

Cash payments for:

 

 

 

 

 

 

Interest (net of capitalized interest)

 

$

497

 

 

$

496

 

Income taxes

 

$

823

 

 

$

628

 

Income tax refunds received

 

 

(50

)

 

 

(180

)

Cash tax payments, net

 

$

773

 

 

$

448

 
v3.22.4
General - Additional Information (Details)
$ / shares in Units, € in Millions, $ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended 29 Months Ended
Feb. 17, 2023
$ / shares
Feb. 28, 2023
USD ($)
$ / shares
shares
Feb. 28, 2022
USD ($)
$ / shares
shares
Feb. 28, 2023
USD ($)
$ / shares
shares
Feb. 28, 2022
USD ($)
$ / shares
shares
May 31, 2021
Employee
May 31, 2023
USD ($)
Feb. 28, 2023
EUR (€)
Oct. 31, 2022
USD ($)
May 31, 2022
USD ($)
Dec. 16, 2021
USD ($)
Organization Consolidation And Presentation Of Financial Statements [Line Items]                      
Gross contract assets related to in-transit shipments   $ 737   $ 737           $ 861  
Contract assets net of deferred unearned revenue   527   527           623  
Contract liabilities related to advance payments from customers   15   15           $ 8  
Stock-based compensation   34 $ 39 142 $ 151            
Number of employees will affect in workforce reduction plan | Employee           5,000          
Business realignment costs   3 107 17 218            
Business realignment costs, net of tax   $ 2 $ 82 $ 13 $ 168            
Business realignment costs per diluted share | $ / shares   $ 0.01 $ 0.31 $ 0.05 $ 0.63            
Business optimization and realignment costs paid   $ 18   $ 102              
Business optimization costs   120   180              
Business optimization costs, net of tax   $ 92   $ 138              
Business optimization costs per diluted share | $ / shares   $ 0.36   $ 0.53              
Denominated debt as a net investment hedge | €               € 136      
Stock repurchase program number of shares authorized to be repurchased, amount                     $ 5,000
Stock repurchase program number of shares authorized to be repurchased, remaining available amount   $ 2,600   $ 2,600              
Number of shares repurchased | shares   1,300,000 6,100,000 9,200,000 8,900,000            
Treasury stock acquired, average cost price per share | $ / shares       $ 163.39              
Payments for repurchase of common stock under ASR program   $ (1,500)   $ (1,500)              
Dividends payable, date declared Feb. 17, 2023                    
Dividends payable amount per share | $ / shares $ 1.15                    
Dividends payable, date to be paid Apr. 03, 2023                    
Dividends payable, date of record Mar. 13, 2023                    
Accelerated Share Repurchase Agreement                      
Organization Consolidation And Presentation Of Financial Statements [Line Items]                      
Stock repurchase program number of shares authorized to be repurchased, amount                 $ 1,500    
Number of shares repurchased | shares   1,300,000   1,300,000              
Forecast [Member]                      
Organization Consolidation And Presentation Of Financial Statements [Line Items]                      
Business realignment costs             $ 415        
v3.22.4
General - Schedule of Revenue by Service Type (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues $ 22,169 $ 23,641 $ 68,225 $ 69,118
Operating Segments [Member] | FedEx Express Segment [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 10,345 11,304 32,336 33,875
Operating Segments [Member] | FedEx Express Segment [Member] | U.S. overnight box [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 2,165 2,275 6,718 6,694
Operating Segments [Member] | FedEx Express Segment [Member] | U.S. overnight envelope [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 478 479 1,477 1,435
Operating Segments [Member] | FedEx Express Segment [Member] | U.S. deferred [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 1,346 1,422 3,886 3,960
Operating Segments [Member] | FedEx Express Segment [Member] | Total U.S. domestic package revenue [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 3,989 4,176 12,081 12,089
Operating Segments [Member] | FedEx Express Segment [Member] | International priority [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 2,566 2,991 8,286 8,937
Operating Segments [Member] | FedEx Express Segment [Member] | International economy [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 698 697 2,116 2,072
Operating Segments [Member] | FedEx Express Segment [Member] | Total international export package revenue [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 3,264 3,688 10,402 11,009
Operating Segments [Member] | FedEx Express Segment [Member] | International domestic [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues [1] 1,003 1,016 3,013 3,277
Operating Segments [Member] | FedEx Express Segment [Member] | Total package revenue [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 8,256 8,880 25,496 26,375
Operating Segments [Member] | FedEx Express Segment [Member] | U.S. freight [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 719 712 2,299 2,262
Operating Segments [Member] | FedEx Express Segment [Member] | International priority freight [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 687 948 2,387 2,815
Operating Segments [Member] | FedEx Express Segment [Member] | International Economy Freight [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 358 378 1,123 1,230
Operating Segments [Member] | FedEx Express Segment [Member] | International Airfreight [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 47 40 126 134
Operating Segments [Member] | FedEx Express Segment [Member] | Total freight revenue [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 1,811 2,078 5,935 6,441
Operating Segments [Member] | FedEx Express Segment [Member] | Other [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 278 346 905 1,059
Operating Segments [Member] | FedEx Ground Segment [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 8,658 8,800 25,211 24,741
Operating Segments [Member] | FedEx Freight Segment [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 2,186 2,253 7,363 6,776
Operating Segments [Member] | FedEx Services Segment [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues 87 65 225 177
Other and eliminations [Member]        
Entity Wide Information Revenue From External Customer [Line Items]        
Revenues [2] $ 893 $ 1,219 $ 3,090 $ 3,549
[1] International domestic revenue relates to our international intra-country operations.
[2] Includes the FedEx Office and Print Services, Inc. (“FedEx Office”), FedEx Logistics, Inc. (“FedEx Logistics”), and FedEx Dataworks, Inc. (“FedEx Dataworks”) operating segments.
v3.22.4
Credit Losses - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
May 31, 2022
Credit Loss [Abstract]          
Credit losses $ 111 $ 116 $ 536 $ 327  
Allowance for credit losses $ 452   $ 452   $ 340
v3.22.4
Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) ("AOCI") (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Accumulated Other Comprehensive Income Loss [Line Items]        
Beginning Balance     $ 24,939  
Translation adjustments $ 80 $ 91 (199) $ (150)
Ending Balance 24,733 24,526 24,733 24,526
Foreign Currency Translation Loss [Member]        
Accumulated Other Comprehensive Income Loss [Line Items]        
Beginning Balance (1,427) (1,026) (1,148) (785)
Translation adjustments 80 91 (199) (150)
Ending Balance (1,347) (935) (1,347) (935)
Retirement Plans Adjustments [Member]        
Accumulated Other Comprehensive Income Loss [Line Items]        
Beginning Balance 42 49 45 53
Reclassifications from AOCI (3) (1) (6) (5)
Ending Balance 39 48 39 48
Accumulated Other Comprehensive (Loss) [Member]        
Accumulated Other Comprehensive Income Loss [Line Items]        
Beginning Balance (1,385) (977) (1,103) (732)
Ending Balance $ (1,308) $ (887) $ (1,308) $ (887)
v3.22.4
Accumulated Other Comprehensive 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 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]        
Other retirement plans (expense) income $ 3 $ 2 $ 7 $ 7
Provision for income taxes   (1) (1) (2)
Net income $ 3 $ 1 $ 6 $ 5
v3.22.4
Financing Arrangements - Additional Information (Details)
 9 Months Ended
Feb. 28, 2023
USD ($)
AirCraft
May 31, 2022
USD ($)
Line Of Credit Facility [Line Items]    
Number of Boeing aircraft | AirCraft 19  
Net book value of Boeing aircraft $ 1,700,000,000  
Financial covenant terms ratio 3.50%  
Financial covenant compliance ratio 1.99%  
Long term debt, including current maturities and exclusive of finance leases carrying value $ 19,700,000,000 $ 19,800,000,000
Long term debt, including current maturities and exclusive of finance leases fair value $ 17,100,000,000 $ 18,800,000,000
Long-term debt weighted-average interest rate 3.50%  
Five-Year Credit Agreement [Member]    
Line Of Credit Facility [Line Items]    
Line of credit facility, term 5 years  
Line of credit facility maximum borrowing capacity $ 2,000,000,000.0  
Line of credit facility, expiration date 2026-03  
Letter of credit maximum sublimit amount $ 250,000,000  
Letter of credit outstanding sublimit unused amount $ 250,000,000  
Three Year Credit Agreement [Member]    
Line Of Credit Facility [Line Items]    
Line of credit facility, term 3 years  
Line of credit facility maximum borrowing capacity $ 1,500,000,000  
Line of credit facility, expiration date 2025-03  
Credit Agreement [Member]    
Line Of Credit Facility [Line Items]    
Commercial paper outstanding $ 0  
1.875% due in February 2034 [Member]    
Line Of Credit Facility [Line Items]    
Debt instrument, face amount $ 970,000,000  
Fixed interest rate 1.875%  
Debt instrument, maturity date 2034-02  
v3.22.4
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 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Basic earnings per common share:        
Net earnings allocable to common shares [1] $ 770 $ 1,110 $ 2,430 $ 3,262
Weighted-average common shares 251.0 261.0 255.0 264.0
Basic earnings per common share $ 3.07 $ 4.26 $ 9.52 $ 12.36
Diluted earnings per common share:        
Net earnings allocable to common shares [1] $ 770 $ 1,110 $ 2,430 $ 3,262
Weighted-average common shares 251.0 261.0 255.0 264.0
Dilutive effect of share-based awards 2.0 4.0 2.0 4.0
Weighted-average diluted shares 253.0 265.0 257.0 268.0
Diluted earnings per common share $ 3.05 $ 4.20 $ 9.46 $ 12.17
Anti-dilutive options excluded from diluted earnings per common share 7.8 4.4 7.7 3.8
[1] Net earnings available to participating securities were immaterial in all periods presented.
v3.22.4
Retirement Plans - Schedule of Retirement Plan Costs (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]        
Defined benefit pension plans, net $ 59 $ 2 $ 176 $ (3)
Defined contribution plans 242 226 714 577
Postretirement healthcare plans 24 22 70 67
Retirement plans mark-to-market adjustments       260
Retirement plans costs $ 325 $ 250 $ 960 $ 901
v3.22.4
Retirement Plans - Schedule of Net Periodic Benefit Cost (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Other retirement plans expense (income):        
MTM net loss       $ 260
Pension Plans [Member] | U.S. Plans [Member]        
Net Periodic Benefit Cost        
Service cost $ 162 $ 209 $ 488 625
Other retirement plans expense (income):        
Interest cost 304 254 913 765
Expected return on plan assets (422) (478) (1,266) (1,433)
Amortization of prior service credit and other (1) (1) (5) (5)
MTM net loss       36
Other retirement plans (income) expense (119) (225) (358) (637)
Net periodic benefit cost 43 (16) 130 (12)
Pension Plans [Member] | International Pension Plans [Member]        
Net Periodic Benefit Cost        
Service cost 13 14 34 43
Other retirement plans expense (income):        
Interest cost 8 8 25 27
Expected return on plan assets (3) (3) (11) (23)
Amortization of prior service credit and other (2) (1) (2) (2)
MTM net loss       224
Other retirement plans (income) expense 3 4 12 226
Net periodic benefit cost 16 18 46 269
Postretirement Healthcare Plans [Member]        
Net Periodic Benefit Cost        
Service cost 10 12 28 36
Other retirement plans expense (income):        
Interest cost 14 10 42 31
Other retirement plans (income) expense 14 10 42 31
Net periodic benefit cost $ 24 $ 22 $ 70 $ 67
v3.22.4
Retirement Plans - Additional Information (Details) - USD ($)
 3 Months Ended 9 Months Ended
Nov. 30, 2021
Feb. 28, 2023
Feb. 28, 2022
Defined Benefit Plan Disclosure [Line Items]      
Defined benefit plan contributions by employer   $ 800,000,000  
Non-cash MTM net loss     $ 260,000,000
Pension Plans [Member] | U.S. Pension Plans [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Defined benefit plan expected future employer contributions   $ 0  
Non-cash MTM net loss     36,000,000
Pension Plans [Member] | North America [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Non-cash MTM net loss $ 36,000,000    
Percentage of FedEx Freight employees elected to move to new 401(k) plan 21.00%    
MTM loss due to lower discount rate $ 75,000,000    
Curtailment gain 39,000,000    
Pension Plans [Member] | International Pension Plans [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Non-cash MTM net loss     $ 224,000,000
Pension Plans [Member] | Netherlands [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Non-cash MTM net loss $ 224,000,000    
v3.22.4
Business Segment Information - Schedule of Segment Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Feb. 28, 2023
Feb. 28, 2022
Segment Reporting Information [Line Items]        
Revenue $ 22,169 $ 23,641 $ 68,225 $ 69,118
Operating income (loss) 1,042 1,326 3,409 4,321
Operating Segments [Member] | FedEx Express Segment [Member]        
Segment Reporting Information [Line Items]        
Revenue 10,345 11,304 32,336 33,875
Operating income (loss) 119 520 634 2,036
Operating Segments [Member] | FedEx Ground Segment [Member]        
Segment Reporting Information [Line Items]        
Revenue 8,658 8,800 25,211 24,741
Operating income (loss) 844 641 2,136 1,793
Operating Segments [Member] | FedEx Freight Segment [Member]        
Segment Reporting Information [Line Items]        
Revenue 2,186 2,253 7,363 6,776
Operating income (loss) 386 337 1,477 1,061
Operating Segments [Member] | FedEx Services Segment [Member]        
Segment Reporting Information [Line Items]        
Revenue 87 65 225 177
Corporate, Other and Eliminations [Member]        
Segment Reporting Information [Line Items]        
Revenue 893 1,219 3,090 3,549
Operating income (loss) $ (307) $ (172) $ (838) $ (569)
v3.22.4
Commitments - Schedule of Purchase Commitments (Details)
$ in Millions
Feb. 28, 2023
USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]  
2023 (remainder) $ 499
2024 2,661
2025 2,115
2026 1,010
2027 468
Thereafter 2,052
Total 8,805
Aircraft And Related Equipment Commitments [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
2023 (remainder) 271
2024 1,944
2025 1,565
2026 568
2027 296
Thereafter 1,913
Total 6,557
Other Commitments [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
2023 (remainder) 228 [1]
2024 717 [1]
2025 550 [1]
2026 442 [1]
2027 172 [1]
Thereafter 139 [1]
Total $ 2,248 [1]
[1] Primarily equipment and advertising contracts.
v3.22.4
Commitments - Additional Information (Details)
$ in Millions
 9 Months Ended
Feb. 28, 2023
USD ($)
Other Aircraft Commitments Disclosure [Abstract]  
Deposit and Progress Payments $ 930
Lessee Disclosure [Abstract]  
Additional leases not yet commenced, undiscounted future payments $ 2,300
Minimum [Member]  
Lessee Disclosure [Abstract]  
Operating lease commencement date 2023
Maximum [Member]  
Lessee Disclosure [Abstract]  
Operating lease commencement date 2024
v3.22.4
Commitments - Schedule of Aircraft Purchase Commitments (Details)
 9 Months Ended
Feb. 28, 2023
AirCraft
Schedule of Aircraft Commitments [Line Items]  
2023 (remainder) 12
2024 39
2025 30
2026 15
Total 96
Cessna SkyCourier 408 [Member]  
Schedule of Aircraft Commitments [Line Items]  
2023 (remainder) 5
2024 13
2025 12
2026 14
Total 44
ATR 72-600F [Member]  
Schedule of Aircraft Commitments [Line Items]  
2023 (remainder) 4
2024 8
2025 6
2026 1
Total 19
B767F [Member]  
Schedule of Aircraft Commitments [Line Items]  
2023 (remainder) 3
2024 14
2025 10
Total 27
B777F [Member]  
Schedule of Aircraft Commitments [Line Items]  
2024 4
2025 2
Total 6
v3.22.4
Commitments - Summary of Future Minimum Lease Payments, Operating and Finance Leases (Details)
$ in Millions
Feb. 28, 2023
USD ($)
Schedule Of Future Minimum Lease Payments For Operating Leases And Finance Leases [Line Items]  
2023 (remainder) $ 638
2024 3,099
2025 2,722
2026 2,433
2027 2,148
Thereafter 10,629
Total lease payments 21,669
Less imputed interest (3,311)
Present value of lease liability 18,358
Operating Leases  
2023 (remainder) 604
2024 3,008
2025 2,684
2026 2,403
2027 2,126
Thereafter 9,960
Total lease payments 20,785
Less imputed interest (2,966)
Present value of lease liability 17,819
Finance Leases  
2023 (remainder) 34
2024 91
2025 38
2026 30
2027 22
Thereafter 669
Total lease payments 884
Less imputed interest (345)
Present value of lease liability 539
Aircraft and Related Equipment [Member]  
Operating Leases  
2023 (remainder) 34
2024 103
2025 84
2026 81
2027 80
Thereafter 170
Total lease payments 552
Less imputed interest (43)
Present value of lease liability 509
Facilities and Other [Member]  
Operating Leases  
2023 (remainder) 570
2024 2,905
2025 2,600
2026 2,322
2027 2,046
Thereafter 9,790
Total lease payments 20,233
Less imputed interest (2,923)
Present value of lease liability $ 17,310
v3.22.4
Contingencies - Additional Information (Details) - USD ($)
$ in Thousands
 9 Months Ended
Oct. 25, 2022
Feb. 28, 2023
Loss Contingencies [Line Items]    
Loss contingency, damages awarded value $ 1,160  
Loss contingency, punitive damages value $ 365,000  
Loss contingency self-insured retention and insurance deductible   $ 5,000
Maximum [Member]    
Loss Contingencies [Line Items]    
Loss Contingency insurance coverages for reimbursement   $ 75,000
v3.22.4
Supplemental Cash Flow Information - Supplemental Cash Flow (Details) - USD ($)
$ in Millions
 9 Months Ended
Feb. 28, 2023
Feb. 28, 2022
Supplemental Cash Flow Information [Abstract]    
Interest (net of capitalized interest) $ 497 $ 496
Income taxes 823 628
Income tax refunds received (50) (180)
Cash tax payments, net $ 773 $ 448