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Condensed Consolidating Financial Statements

6 Months Ended

Nov. 30, 2018

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

(11) Condensed Consolidating Financial Statements

We are required to present condensed consolidating financial information in order for the subsidiary guarantors of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

The guarantor subsidiaries, which are 100% owned by FedEx, guarantee $16.9 billion of our public debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the “Guarantor Subsidiaries” and “Non-guarantor Subsidiaries” columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting.

Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

CONDENSED CONSOLIDATING BALANCE SHEETS

(UNAUDITED)

November 30, 2018

						Guarantor				Non-guarantor
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	688			$	187			$	1,310			$	(62	)		$	2,123
Receivables, less allowances			40				5,848				3,868				(183	)			9,573
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances			491				956				295				—				1,742
Total current assets			1,219				6,991				5,473				(245	)			13,438
PROPERTY AND EQUIPMENT, AT COST			23				53,441				4,037				—				57,501
Less accumulated depreciation and amortization			17				26,166				1,931				—				28,114
Net property and equipment			6				27,275				2,106				—				29,387
INTERCOMPANY RECEIVABLE			845				1,628				—				(2,473	)			—
GOODWILL			—				1,598				5,310				—				6,908
INVESTMENT IN SUBSIDIARIES			34,957				4,891				—				(39,848	)			—
OTHER ASSETS			270				1,569				1,717				—				3,556
		$	37,297			$	43,952			$	14,606			$	(42,566	)		$	53,289
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Short-term borrowings		$	250			$	—			$	—			$	—			$	250
Current portion of long-term debt			567				69				6				—				642
Accrued salaries and employee benefits			49				1,192				609				—				1,850
Accounts payable			197				1,576				1,831				(204	)			3,400
Accrued expenses			544				1,843				1,007				(40	)			3,354
Total current liabilities			1,607				4,680				3,453				(244	)			9,496
LONG-TERM DEBT, LESS CURRENT PORTION			16,101				287				11				—				16,399
INTERCOMPANY PAYABLE			—				—				2,473				(2,473	)			—
OTHER LONG-TERM LIABILITIES
Deferred income taxes			92				3,055				106				—				3,253
Other liabilities			203				3,643				1,002				(1	)			4,847
Total other long-term liabilities			295				6,698				1,108				(1	)			8,100
STOCKHOLDERS’ INVESTMENT			19,294				32,287				7,561				(39,848	)			19,294
		$	37,297			$	43,952			$	14,606			$	(42,566	)		$	53,289

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2018

						Guarantor				Non-guarantor
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	1,485			$	257			$	1,538			$	(15	)		$	3,265
Receivables, less allowances			3				4,970				3,586				(78	)			8,481
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances			425				878				292				—				1,595
Total current assets			1,913				6,105				5,416				(93	)			13,341
PROPERTY AND EQUIPMENT, AT COST			21				51,232				3,868				—				55,121
Less accumulated depreciation and amortization			17				25,111				1,839				—				26,967
Net property and equipment			4				26,121				2,029				—				28,154
INTERCOMPANY RECEIVABLE			1,487				924				—				(2,411	)			—
GOODWILL			—				1,709				5,264				—				6,973
INVESTMENT IN SUBSIDIARIES			33,370				4,082				—				(37,452	)			—
OTHER ASSETS			75				1,854				1,829				104				3,862
		$	36,849			$	40,795			$	14,538			$	(39,852	)		$	52,330
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt		$	1,332			$	1			$	9			$	—			$	1,342
Accrued salaries and employee benefits			65				1,506				606				—				2,177
Accounts payable			16				1,332				1,719				(90	)			2,977
Accrued expenses			460				1,778				896				(3	)			3,131
Total current liabilities			1,873				4,617				3,230				(93	)			9,627
LONG-TERM DEBT, LESS CURRENT PORTION			14,942				288				13				—				15,243
INTERCOMPANY PAYABLE			—				—				2,411				(2,411	)			—
OTHER LONG-TERM LIABILITIES
Deferred income taxes			—				2,626				137				104				2,867
Other liabilities			619				3,432				1,126				—				5,177
Total other long-term liabilities			619				6,058				1,263				104				8,044
STOCKHOLDERS’ INVESTMENT			19,415				29,832				7,621				(37,452	)			19,416
		$	36,849			$	40,795			$	14,538			$	(39,852	)		$	52,330

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2018

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	12,874			$	5,050			$	(100	)		$	17,824
OPERATING EXPENSES:
Salaries and employee benefits			34				4,797				1,429				—				6,260
Purchased transportation			—				2,650				1,731				(35	)			4,346
Rentals and landing fees			1				640				196				(1	)			836
Depreciation and amortization			—				709				119				—				828
Fuel			—				968				84				—				1,052
Maintenance and repairs			—				655				96				—				751
Intercompany charges, net			(152	)			(149	)			301				—				—
Other			117				1,675				863				(72	)			2,583
			—				11,945				4,819				(108	)			16,656
OPERATING INCOME			—				929				231				8				1,168
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries			935				48				—				(983	)			—
Interest, net			(180	)			63				(12	)			—				(129	)
Other retirement plans income			—				155				3				—				158
Intercompany charges, net			162				(124	)			(38	)			—				—
Other, net			18				(22	)			(7	)			(9	)			(20	)
INCOME BEFORE INCOME TAXES			935				1,049				177				(984	)			1,177
Provision for income taxes			—				217				25				—				242
NET INCOME		$	935			$	832			$	152			$	(984	)		$	935
COMPREHENSIVE INCOME		$	912			$	819			$	133			$	(983	)		$	881

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended November 30, 2017

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	12,044			$	4,362			$	(93	)		$	16,313
OPERATING EXPENSES:
Salaries and employee benefits			35				4,580				1,274				—				5,889
Purchased transportation			—				2,314				1,576				(50	)			3,840
Rentals and landing fees			1				640				197				(3	)			835
Depreciation and amortization			—				649				107				—				756
Fuel			—				746				72				—				818
Maintenance and repairs			—				584				81				—				665
Intercompany charges, net			(95	)			1				94				—				—
Other			59				1,592				784				(40	)			2,395
			—				11,106				4,185				(93	)			15,198
OPERATING INCOME			—				938				177				—				1,115
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries			775				40				—				(815	)			—
Interest, net			(130	)			11				(5	)			—				(124	)
Other retirement plans income			—				141				6				—				147
Intercompany charges, net			132				(70	)			(62	)			—				—
Other, net			(2	)			(8	)			11				—				1
INCOME BEFORE INCOME TAXES			775				1,052				127				(815	)			1,139
Provision for income taxes			—				225				139				—				364
NET INCOME		$	775			$	827			$	(12	)		$	(815	)		$	775
COMPREHENSIVE INCOME		$	756			$	817			$	(92	)		$	(815	)		$	666

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2018

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	25,241			$	9,837			$	(202	)		$	34,876
OPERATING EXPENSES:
Salaries and employee benefits			82				9,580				2,858				—				12,520
Purchased transportation			—				5,032				3,364				(83	)			8,313
Rentals and landing fees			3				1,271				388				(3	)			1,659
Depreciation and amortization			—				1,402				234				—				1,636
Fuel			—				1,871				167				—				2,038
Maintenance and repairs			1				1,301				184				—				1,486
Intercompany charges, net			(264	)			(375	)			639				—				—
Other			178				3,221				1,711				(125	)			4,985
			—				23,303				9,545				(211	)			32,637
OPERATING INCOME			—				1,938				292				9				2,239
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries			1,770				128				—				(1,898	)			—
Interest, net			(338	)			122				(25	)			—				(241	)
Other retirement plans income			—				311				5				—				316
Intercompany charges, net			304				(246	)			(58	)			—				—
Other, net			34				(76	)			16				(10	)			(36	)
INCOME BEFORE INCOME TAXES			1,770				2,177				230				(1,899	)			2,278
Provision for income taxes			—				432				76				—				508
NET INCOME		$	1,770			$	1,745			$	154			$	(1,899	)		$	1,770
COMPREHENSIVE INCOME		$	1,730			$	1,833			$	(133	)		$	(1,899	)		$	1,531

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Six Months Ended November 30, 2017

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	23,611			$	8,216			$	(217	)		$	31,610
OPERATING EXPENSES:
Salaries and employee benefits			73				8,949				2,531				—				11,553
Purchased transportation			—				4,377				3,040				(132	)			7,285
Rentals and landing fees			2				1,267				388				(4	)			1,653
Depreciation and amortization			—				1,288				219				—				1,507
Fuel			—				1,383				138				—				1,521
Maintenance and repairs			—				1,186				154				—				1,340
Intercompany charges, net			(211	)			115				96				—				—
Other			136				3,068				1,542				(81	)			4,665
			—				21,633				8,108				(217	)			29,524
OPERATING INCOME			—				1,978				108				—				2,086
OTHER INCOME (EXPENSE):
Equity in earnings of subsidiaries			1,371				37				—				(1,408	)			—
Interest, net			(259	)			24				(3	)			—				(238	)
Other retirement plans income			—				283				10				—				293
Intercompany charges, net			263				(140	)			(123	)			—				—
Other, net			(4	)			(16	)			—				—				(20	)
INCOME BEFORE INCOME TAXES			1,371				2,166				(8	)			(1,408	)			2,121
Provision for income taxes			—				624				126				—				750
NET INCOME		$	1,371			$	1,542			$	(134	)		$	(1,408	)		$	1,371
COMPREHENSIVE INCOME		$	1,334			$	1,536			$	(110	)		$	(1,408	)		$	1,352

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2018

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES		$	262			$	1,631			$	333			$	(47	)		$	2,179
INVESTING ACTIVITIES
Capital expenditures			(2	)			(2,337	)			(295	)			—				(2,634	)
Proceeds from asset dispositions and other			(45	)			83				15								53
CASH USED IN INVESTING    ACTIVITIES			(47	)			(2,254	)			(280	)			—				(2,581	)
FINANCING ACTIVITIES
Proceeds from short-term borrowings			248				—				—				—				248
Net transfers from (to) Parent			(344	)			350				(6	)			—				—
Intercompany dividends			—				113				(113	)			—				—
Proceeds from debt issuances			1,233				—				—				—				1,233
Principal payments on debt			(750	)			(29	)			(6	)			—				(785	)
Proceeds from stock issuances			45				—				—				—				45
Dividends paid			(173	)			—				—				—				(173	)
Purchase of treasury stock			(1,271	)			—				—				—				(1,271	)
Other, net			—				128				(127	)			—				1
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES			(1,012	)			562				(252	)			—				(702	)
Effect of exchange rate changes on cash			—				(9	)			(29	)			—				(38	)
Net (decrease) increase in cash and cash equivalents			(797	)			(70	)			(228	)			(47	)			(1,142	)
Cash and cash equivalents at beginning of period			1,485				257				1,538				(15	)			3,265
Cash and cash equivalents at end of period		$	688			$	187			$	1,310			$	(62	)		$	2,123

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended November 30, 2017

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES		$	(1,959	)		$	3,504			$	(66	)		$	19			$	1,498
INVESTING ACTIVITIES
Capital expenditures			—				(2,474	)			(147	)			—				(2,621	)
Business acquisitions, net of cash acquired			—				(44	)			—				—				(44	)
Proceeds from asset dispositions and other			—				12				—				—				12
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES			—				(2,506	)			(147	)			—				(2,653	)
FINANCING ACTIVITIES
Net transfers from (to) Parent			947				(1,019	)			72				—				—
Payment on loan between subsidiaries			167				—				(167	)			—				—
Proceeds from short-term borrowings			250				—				—				—				250
Principal payments on debt			—				(18	)			(10	)			—				(28	)
Proceeds from stock issuances			205				—				—				—				205
Dividends paid			(268	)			—				—				—				(268	)
Purchase of treasury stock			(270	)			—				—				—				(270	)
Other, net			3				—				—				—				3
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES			1,034				(1,037	)			(105	)			—				(108	)
Effect of exchange rate changes on cash			—				56				6				—				62
Net (decrease) increase in cash and cash equivalents			(925	)			17				(312	)			19				(1,201	)
Cash and cash equivalents at beginning of period			1,884				325				1,807				(47	)			3,969
Cash and cash equivalents at end of period		$	959			$	342			$	1,495			$	(28	)		$	2,768

X

- References

No definition available.

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X

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=108774443&loc=d3e5283-111683

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 2
-Subparagraph (SX 210.9-06)
-URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884

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