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Commitments | 12 Months Ended
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May 31, 2018
Commitments [Abstract] |
Commitments | NOTE 17: COMMITMENTS Annual purchase commitments under various contracts as of May 31, 2018 were as follows (in millions):
|  | Aircraft and Aircraft Related |  |  | Other(1) |  |  | Total |
2019 |  | $ | 1,534 |  |  | $ | 894 |  |  | $ | 2,428 |
2020 |  |  | 1,922 |  |  |  | 692 |  |  |  | 2,614 |
2021 |  |  | 1,255 |  |  |  | 416 |  |  |  | 1,671 |
2022 |  |  | 1,359 |  |  |  | 285 |  |  |  | 1,644 |
2023 |  |  | 628 |  |  |  | 185 |  |  |  | 813 |
Thereafter |  |  | 2,653 |  |  |  | 491 |  |  |  | 3,144 |
Total |  | $ | 9,351 |  |  | $ | 2,963 |  |  | $ | 12,314 |
(1) | Primarily equipment and advertising contracts.
The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of May 31, 2018, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and three Boeing 777 Freighter (“B777F”) aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended (“RLA”). Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above. We have several aircraft modernization programs underway that are supported by the purchase of B777F and B767F aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing purchase agreements. During 2018, FedEx Express entered into an agreement to purchase 50 Cessna SkyCourier 408 aircraft with options to purchase up to 50 additional Cessna SkyCourier 408 aircraft. The 50 firm-order Cessna SkyCourier 408 aircraft are expected to be delivered from 2021 through 2024. During 2018, FedEx Express entered into an agreement to purchase 30 ATR 72-600F aircraft with options to purchase up to 20 additional ATR 72-600F aircraft. The 30 firm-order ATR 72-600F aircraft are expected to be delivered from 2021 through 2026. During 2018, FedEx Express entered into an agreement to accelerate the delivery of two B777F aircraft from 2021 to 2020, one B777F aircraft from 2021 to 2019, and one B777F aircraft from 2022 to 2020. On June 18, 2018, FedEx Express entered into agreements to purchase 12 incremental B777F aircraft and 12 incremental B767F aircraft. Six of the B777F and one of the B767F aircraft purchases are conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the RLA. The B777F aircraft are expected to be delivered between 2021 and 2025. The B767F aircraft are expected to be delivered between 2020 and 2022. As part of these agreements, one B777F and one B767F aircraft delivery were accelerated from 2020 to 2019. FedEx Express now has a total of 24 firm orders for B777F aircraft scheduled for delivery during 2019 through 2025 (one of which was delivered in June 2018) and a total of 69 firm orders for B767F aircraft for delivery during 2019 through 2023 (two of which were delivered in June 2018). Six of the B777F orders and five of the B767F orders are conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the RLA (the RLA condition was removed from three previously ordered B777F aircraft). FedEx Express also acquired options to purchase an additional 14 B777F aircraft, and the delivery dates of 11 existing B777F option aircraft were rescheduled. As a result, FedEx Express now has options to purchase a total of 25 B777F aircraft for delivery through 2028. FedEx Express also acquired options to purchase an additional six B767F aircraft. As a result, FedEx Express now has options to purchase a total of 50 B767F aircraft for delivery through 2026. As of May 31, 2018, we had $1.2 billion 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 consolidated balance sheets. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of May 31, 2018, with the year of expected delivery:
|  | Cessna SkyCourier 408 |  |  | ATR 72-600F |  |  | B767F |  |  | B777F |  |  | Total |
2019 |  |  | - |  |  |  | - |  |  |  | 15 |  |  |  | 3 |  |  |  | 18 |
2020 |  |  | - |  |  |  | - |  |  |  | 16 |  |  |  | 6 |  |  |  | 22 |
2021 |  |  | 12 |  |  |  | 5 |  |  |  | 10 |  |  |  | - |  |  |  | 27 |
2022 |  |  | 12 |  |  |  | 6 |  |  |  | 10 |  |  |  | 3 |  |  |  | 31 |
2023 |  |  | 12 |  |  |  | 6 |  |  |  | 6 |  |  |  | - |  |  |  | 24 |
Thereafter |  |  | 14 |  |  |  | 13 |  |  |  | - |  |  |  | - |  |  |  | 27 |
Total |  |  | 50 |  |  |  | 30 |  |  |  | 57 |  |  |  | 12 |  |  |  | 149 |

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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