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Leases | 3 Months Ended
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Aug. 31, 2019
Leases [Abstract] |
Leases | (7) Leases As of August 31, 2019, 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 $872 million and will commence when FedEx gains beneficial access to the leased asset. Commencement dates are expected to be from fiscal 2020 to fiscal 2022. The following table is a summary of the components of net lease cost for the three months ended August 31 (in millions):
|  | 2019 |
Operating lease cost (1) |  | $ | 674 |
Finance lease cost: |  |  |  |
Amortization of right-of-use assets |  |  | 3 |
Interest on lease liabilities |  |  | 1 |
Total finance lease cost |  |  | 4 |
Short-term lease cost |  |  | 35 |
Variable lease cost(1) |  |  | 267 |
Net lease cost |  | $ | 980 |
(1) Expenses are primarily accounted for in the “Rentals and landing fees” line item. Additional amounts related to embedded leases are accounted for in the “Purchased transportation,” “Fuel” and “Other” line items in the unaudited condensed consolidated statements of income. Supplemental cash flow information related to leases for the three months ended August 31 is as follows (in millions):
|  | 2019 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows paid for operating leases |  | $ | 635 |
Operating cash flows paid for interest portion of finance leases |  |  | 1 |
Financing cash flows paid for principal portion of finance leases |  |  | 27 |
Right-of-use assets obtained in exchange for new operating lease liabilities |  | $ | 235 |
Right-of-use assets obtained in exchange for new finance lease liabilities |  | $ | 76 |
Supplemental balance sheet information related to leases as of August 31 is as follows (in millions, except lease term and discount rate):
|  | 2019 |
Operating leases: |  |  |  |
Operating lease right-of-use assets |  | $ | 13,819 |
Current portion of operating lease liabilities |  |  | 1,896 |
Operating lease liabilities |  |  | 12,137 |
Total operating lease liabilities |  | $ | 14,033 |
Finance leases: |  |  |  |
Net property and equipment |  | $ | 124 |
Current portion of long-term debt |  |  | 35 |
Long-term debt, less current portion |  |  | 94 |
Total finance lease liabilities |  | $ | 129 |
Weighted-average remaining lease term |  |  |  |
Operating leases |  |  | 10.2 |
Finance leases |  |  | 10.3 |
Weighted-average discount rate |  |  |  |
Operating leases |  |  | 3.28 | %
Finance leases |  |  | 4.10 | %
A summary of future minimum lease payments under noncancelable operating and finance leases with an initial or remaining term in excess of one year at August 31, 2019 is as follows (in millions):
|  | Aircraft and Related Equipment |  |  | Facilities and Other |  |  | Total Operating Leases |  |  | Finance Leases |  |  | Total Leases |
2020 (remainder) |  | $ | 234 |  |  | $ | 1,523 |  |  | $ | 1,757 |  |  | $ | 37 |  |  | $ | 1,794 |
2021 |  |  | 207 |  |  |  | 2,039 |  |  |  | 2,246 |  |  |  | 14 |  |  |  | 2,260 |
2022 |  |  | 190 |  |  |  | 1,824 |  |  |  | 2,014 |  |  |  | 14 |  |  |  | 2,028 |
2023 |  |  | 154 |  |  |  | 1,633 |  |  |  | 1,787 |  |  |  | 12 |  |  |  | 1,799 |
2024 |  |  | 58 |  |  |  | 1,432 |  |  |  | 1,490 |  |  |  | 11 |  |  |  | 1,501 |
Thereafter |  |  | 85 |  |  |  | 7,453 |  |  |  | 7,538 |  |  |  | 78 |  |  |  | 7,616 |
Total lease payments |  |  | 928 |  |  |  | 15,904 |  |  |  | 16,832 |  |  |  | 166 |  |  |  | 16,998 |
Less imputed interest |  |  | (61 | ) |  |  | (2,738 | ) |  |  | (2,799 | ) |  |  | (37 | ) |  |  | (2,836 | )
Present value of lease liability |  | $ | 867 |  |  | $ | 13,166 |  |  | $ | 14,033 |  |  | $ | 129 |  |  | $ | 14,162 |
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 previously disclosed in our Annual Report and under the previous lease accounting standard, future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at May 31, 2019 would have been as follows (in millions):
|  | Operating Leases |
|  | Aircraft and Related Equipment |  |  | Facilities and Other |  |  | Total Operating Leases |
2020 |  | $ | 288 |  |  | $ | 2,209 |  |  | $ | 2,497 |
2021 |  |  | 230 |  |  |  | 2,033 |  |  |  | 2,263 |
2022 |  |  | 212 |  |  |  | 1,816 |  |  |  | 2,028 |
2023 |  |  | 154 |  |  |  | 1,625 |  |  |  | 1,779 |
2024 |  |  | 58 |  |  |  | 1,428 |  |  |  | 1,486 |
Thereafter |  |  | 85 |  |  |  | 7,977 |  |  |  | 8,062 |
Total |  | $ | 1,027 |  |  | $ | 17,088 |  |  | $ | 18,115 |

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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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