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Condensed Consolidating Financial Statements

3 Months Ended

Aug. 31, 2019

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 $18.6 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)

August 31, 2019

						Guarantor				Non-guarantor
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	684			$	176			$	1,598			$	(69	)		$	2,389
Receivables, less allowances			335				5,575				3,541				(139	)			9,312
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances			40				949				327				—				1,316
Total current assets			1,059				6,700				5,466				(208	)			13,017
PROPERTY AND EQUIPMENT, AT COST			26				57,131				4,279				—				61,436
Less accumulated depreciation and amortization			17				27,715				2,094				—				29,826
Net property and equipment			9				29,416				2,185				—				31,610
INTERCOMPANY RECEIVABLE			3,003				72				—				(3,075	)			—
OPERATING LEASE RIGHT-OF-USE ASSETS			32				11,538				2,249				—				13,819
GOODWILL			—				1,582				5,239				—				6,821
INVESTMENT IN SUBSIDIARIES			34,439				4,970				—				(39,409	)			—
OTHER ASSETS			984				1,019				1,734				(552	)			3,185
		$	39,526			$	55,297			$	16,873			$	(43,244	)		$	68,452
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt		$	—			$	26			$	9			$	—			$	35
Accrued salaries and employee benefits			91				985				446				—				1,522
Accounts payable			191				1,444				1,747				(203	)			3,179
Operating lease liabilities			4				1,445				447				—				1,896
Accrued expenses			512				1,895				902				(6	)			3,303
Total current liabilities			798				5,795				3,551				(209	)			9,935
LONG-TERM DEBT, LESS CURRENT PORTION			18,395				286				45				—				18,726
INTERCOMPANY PAYABLE			—				—				3,074				(3,074	)			—
OTHER LONG-TERM LIABILITIES
Deferred income taxes			—				2,929				576				(552	)			2,953
Operating lease liabilities			30				10,257				1,850				—				12,137
Other liabilities			2,137				3,390				1,008				—				6,535
Total other long-term liabilities			2,167				16,576				3,434				(552	)			21,625
COMMON STOCKHOLDERS’ INVESTMENT			18,166				32,640				6,769				(39,409	)			18,166
		$	39,526			$	55,297			$	16,873			$	(43,244	)		$	68,452

CONDENSED CONSOLIDATING BALANCE SHEETS

May 31, 2019

						Guarantor				Non-guarantor
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	826			$	158			$	1,381			$	(46	)		$	2,319
Receivables, less allowances			56				5,603				3,684				(227	)			9,116
Spare parts, supplies, fuel, prepaid expenses and other,    less allowances			366				953				332				—				1,651
Total current assets			1,248				6,714				5,397				(273	)			13,086
PROPERTY AND EQUIPMENT, AT COST			25				55,341				4,145				—				59,511
Less accumulated depreciation and amortization			17				27,066				1,999				—				29,082
Net property and equipment			8				28,275				2,146				—				30,429
INTERCOMPANY RECEIVABLE			2,877				(405	)			—				(2,472	)			—
GOODWILL			—				1,589				5,295				—				6,884
INVESTMENT IN SUBSIDIARIES			33,725				5,449				—				(39,174	)			—
OTHER ASSETS			995				1,811				1,789				(591	)			4,004
		$	38,853			$	43,433			$	14,627			$	(42,510	)		$	54,403
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt		$	959			$	2			$	3			$	—			$	964
Accrued salaries and employee benefits			143				1,100				498				—				1,741
Accounts payable			16				1,469				1,808				(263	)			3,030
Accrued expenses			521				1,853				914				(10	)			3,278
Total current liabilities			1,639				4,424				3,223				(273	)			9,013
LONG-TERM DEBT, LESS CURRENT PORTION			16,322				287				8				—				16,617
INTERCOMPANY PAYABLE			—				—				2,472				(2,472	)			—
OTHER LONG-TERM LIABILITIES
Deferred income taxes			—				2,832				580				(591	)			2,821
Other liabilities			3,135				3,965				1,095				—				8,195
Total other long-term liabilities			3,135				6,797				1,675				(591	)			11,016
COMMON STOCKHOLDERS’ INVESTMENT			17,757				31,925				7,249				(39,174	)			17,757
		$	38,853			$	43,433			$	14,627			$	(42,510	)		$	54,403

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended August 31, 2019

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	12,241			$	4,893			$	(86	)		$	17,048
OPERATING EXPENSES:
Salaries and employee benefits			20				4,685				1,382				—				6,087
Purchased transportation			—				2,543				1,519				(34	)			4,028
Rentals and landing fees			2				712				208				(2	)			920
Depreciation and amortization			—				761				118				—				879
Fuel			—				812				58				—				870
Maintenance and repairs			—				684				84				—				768
Intercompany charges, net			(78	)			(481	)			559				—				—
Other			56				1,668				845				(50	)			2,519
			—				11,384				4,773				(86	)			16,071
OPERATING INCOME			—				857				120				—				977
OTHER (EXPENSE) INCOME:
Equity in earnings of subsidiaries			745				18				—				(763	)			—
Interest, net			(151	)			12				2				—				(137	)
Other retirement plans income			—				163				5				—				168
Intercompany charges, net			164				(120	)			(44	)			—				—
Other, net			(13	)			16				(15	)			—				(12	)
INCOME BEFORE INCOME TAXES			745				946				68				(763	)			996
Provision for income taxes			—				225				26				—				251
NET INCOME (LOSS)		$	745			$	721			$	42			$	(763	)		$	745
COMPREHENSIVE INCOME (LOSS)		$	731			$	705			$	(32	)		$	(763	)		$	641

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended August 31, 2018

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
REVENUES		$	—			$	12,367			$	4,787			$	(102	)		$	17,052
OPERATING EXPENSES:
Salaries and employee benefits			48				4,783				1,429				—				6,260
Purchased transportation			—				2,380				1,634				(47	)			3,967
Rentals and landing fees			1				631				192				(1	)			823
Depreciation and amortization			—				693				115				—				808
Fuel			—				902				84				—				986
Maintenance and repairs			—				646				89				—				735
Intercompany charges, net			(111	)			(226	)			337				—				—
Other			62				1,546				848				(54	)			2,402
			—				11,355				4,728				(102	)			15,981
OPERATING INCOME			—				1,012				59				—				1,071
OTHER (EXPENSE) INCOME:
Equity in earnings of subsidiaries			835				81				—				(916	)			—
Interest, net			(143	)			15				1				—				(127	)
Other retirement plans (expense) income			—				155				3				—				158
Intercompany charges, net			143				(122	)			(21	)			—				—
Other, net			—				(10	)			9				—				(1	)
INCOME (LOSS) BEFORE INCOME TAXES			835				1,131				51				(916	)			1,101
Provision for income taxes			—				215				51				—				266
NET INCOME (LOSS)		$	835			$	916			$	—			$	(916	)		$	835
COMPREHENSIVE INCOME (LOSS)		$	817			$	1,014			$	(265	)		$	(916	)		$	650

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended August 31, 2019

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES		$	(1,671	)		$	2,111			$	148			$	(23	)		$	565
INVESTING ACTIVITIES
Capital expenditures			(2	)			(1,317	)			(99	)			—				(1,418	)
Proceeds from asset dispositions and other			(10	)			5				4				—				(1	)
CASH USED IN INVESTING    ACTIVITIES			(12	)			(1,312	)			(95	)			—				(1,419	)
FINANCING ACTIVITIES
Net transfers from (to) Parent			1,002				(1,059	)			57				—				—
Payment on loan between subsidiaries			(434	)			—				434				—				—
Intercompany dividends			—				304				(304	)			—				—
Proceeds from debt issuances			2,093				—				—				—				2,093
Principal payments on debt			(956	)			(27	)			(2	)			—				(985	)
Proceeds from stock issuances			12				—				—				—				12
Dividends paid			(170	)			—				—				—				(170	)
Purchase of treasury stock			(3	)			—				—				—				(3	)
Other, net			(3	)			—				(2	)			—				(5	)
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES			1,541				(782	)			183				—				942
Effect of exchange rate changes on cash			—				1				(19	)			—				(18	)
Net (decrease) increase in cash and cash equivalents			(142	)			18				217				(23	)			70
Cash and cash equivalents at beginning of period			826				158				1,381				(46	)			2,319
Cash and cash equivalents at end of period		$	684			$	176			$	1,598			$	(69	)		$	2,389

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended August 31, 2018

		Parent				Guarantor Subsidiaries				Non-guarantor Subsidiaries				Eliminations				Consolidated
CASH PROVIDED BY (USED IN) OPERATING    ACTIVITIES		$	785			$	(159	)		$	102			$	(27	)		$	701
INVESTING ACTIVITIES
Capital expenditures			—				(983	)			(196	)			—				(1,179	)
Proceeds from asset dispositions and other			(5	)			78				5				—				78
CASH USED IN INVESTING ACTIVITIES			(5	)			(905	)			(191	)			—				(1,101	)
FINANCING ACTIVITIES
Proceeds from short-term borrowings, net			299				—				—				—				299
Net transfers from (to) Parent			(853	)			763				90				—				—
Intercompany dividends			—				81				(81	)			—				—
Principal payments on debt			—				—				(2	)			—				(2	)
Proceeds from stock issuances			25				—				—				—				25
Dividends paid			(173	)			—				—				—				(173	)
Purchase of treasury stock			(625	)			—				—				—				(625	)
Other, net			—				148				(144	)			—				4
CASH (USED IN) PROVIDED BY FINANCING    ACTIVITIES			(1,327	)			992				(137	)			—				(472	)
Effect of exchange rate changes on cash			—				(5	)			(19	)			—				(24	)
Net decrease in cash and cash equivalents			(547	)			(77	)			(245	)			(27	)			(896	)
Cash and cash equivalents at beginning of period			1,485				257				1,538				(15	)			3,265
Cash and cash equivalents at end of period		$	938			$	180			$	1,293			$	(42	)		$	2,369

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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