XML 86 R22.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

General (Policies) | 6 Months Ended
--- | ---
Nov. 30, 2019
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, 2019 (“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 November 30, 2019, and the results of our operations for the three- and six-month periods ended November 30, 2019 and 2018, cash flows for the six-month periods ended November 30, 2019 and 2018, and changes in common stockholders’ investment for the three- and six-month periods ended November 30, 2019 and 2018. Operating results for the three- and six-month periods ended November 30, 2019 are not necessarily indicative of the results that may be expected for the year ending May 31, 2020. Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2020 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.
Reclassifications | RECLASSIFICATIONS. Certain reclassifications have been made to the prior years’ condensed consolidated financial statements to conform to the current year presentation.
Revenue Recognition | REVENUE RECOGNITION. Contract Assets and Liabilities Contract assets include billed and unbilled amounts resulting from in-transit packages, 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 packages totaled $513 million and $533 million at November 30, 2019 and May 31, 2019, respectively. Contract assets net of deferred unearned revenue were $385 million and $364 million at November 30, 2019 and May 31, 2019, 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 $10 million and $11 million at November 30, 2019 and May 31, 2019, 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 (dollars in millions) for the periods ended November 30. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.
|  | Three Months Ended |  |  | Six Months Ended |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
REVENUE BY SERVICE TYPE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FedEx Express segment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Package: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. overnight box |  | $ | 1,864 |  |  | $ | 1,948 |  |  | $ | 3,730 |  |  | $ | 3,834 |
U.S. overnight envelope |  |  | 457 |  |  |  | 444 |  |  |  | 936 |  |  |  | 912 |
U.S. deferred |  |  | 980 |  |  |  | 1,060 |  |  |  | 1,936 |  |  |  | 2,012 |
Total U.S. domestic package revenue |  |  | 3,301 |  |  |  | 3,452 |  |  |  | 6,602 |  |  |  | 6,758 |
International priority |  |  | 1,817 |  |  |  | 1,896 |  |  |  | 3,634 |  |  |  | 3,770 |
International economy |  |  | 873 |  |  |  | 885 |  |  |  | 1,728 |  |  |  | 1,735 |
Total international export package revenue |  |  | 2,690 |  |  |  | 2,781 |  |  |  | 5,362 |  |  |  | 5,505 |
International domestic(1) |  |  | 1,165 |  |  |  | 1,203 |  |  |  | 2,241 |  |  |  | 2,334 |
Total package revenue |  |  | 7,156 |  |  |  | 7,436 |  |  |  | 14,205 |  |  |  | 14,597 |
Freight: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 698 |  |  |  | 792 |  |  |  | 1,393 |  |  |  | 1,522 |
International priority |  |  | 473 |  |  |  | 564 |  |  |  | 937 |  |  |  | 1,097 |
International economy |  |  | 541 |  |  |  | 554 |  |  |  | 1,057 |  |  |  | 1,073 |
International airfreight |  |  | 70 |  |  |  | 83 |  |  |  | 136 |  |  |  | 168 |
Total freight revenue |  |  | 1,782 |  |  |  | 1,993 |  |  |  | 3,523 |  |  |  | 3,860 |
Other |  |  | 146 |  |  |  | 175 |  |  |  | 301 |  |  |  | 369 |
Total FedEx Express segment |  |  | 9,084 |  |  |  | 9,604 |  |  |  | 18,029 |  |  |  | 18,826 |
FedEx Ground segment |  |  | 5,315 |  |  |  | 5,142 |  |  |  | 10,494 |  |  |  | 9,941 |
FedEx Freight segment |  |  | 1,844 |  |  |  | 1,918 |  |  |  | 3,749 |  |  |  | 3,877 |
FedEx Services segment |  |  | 5 |  |  |  | 4 |  |  |  | 9 |  |  |  | 13 |
Other and eliminations(2) |  |  | 1,076 |  |  |  | 1,156 |  |  |  | 2,091 |  |  |  | 2,219 |
|  | $ | 17,324 |  |  | $ | 17,824 |  |  | $ | 34,372 |  |  | $ | 34,876 |
| (1) | International domestic revenues relate to our international intra-country operations.
| (2) | Includes the FedEx Logistics, Inc. (“FedEx Logistics”) and FedEx Office and Print Services, Inc. (“FedEx Office”) operating segments.
Leases | LEASES. We lease certain facilities, aircraft, equipment and vehicles under operating and finance leases. A determination of whether a contract contains a lease is made at the inception of the arrangement. Our leased facilities include national, regional and metropolitan sorting facilities, retail facilities and administrative buildings. We leased 5% of our total aircraft fleet as of November 30, 2019 and 6% as of May 31, 2019. Our leases generally contain options to extend or terminate the lease. We reevaluate our leases on a regular basis to consider the economic and strategic incentives of exercising the renewal options, and how they align with our operating strategy. Therefore, substantially all the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the right-of-use asset and lease liability as the options to extend are not reasonably certain at lease commencement. The lease liabilities are measured at the lease commencement date and determined using the present value of the minimum lease payments not yet paid and our incremental borrowing rate, which approximates the rate at which we would borrow, on a collateralized basis, over the term of a lease in the applicable currency environment. The interest rate implicit in the lease is generally not determinable in transactions where we are the lessee. For real estate leases, we account for lease components and non-lease components (such as common area maintenance) as a single lease component. Certain real estate leases require additional payments based on sales volume and index based rate increases, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Certain leases contain fixed lease payment s for items such as real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities. See Note 8 for additional information.
Impairment of Long-Lived Assets | IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, an impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. We operate integrated transportation networks, and accordingly, cash flows for most of our operating assets to be held and used are assessed at a network level, not at an individual asset level, for our analysis of impairment. During the second quarter of 2020, we made the decision to permanently retire from service 10 Airbus A310-300 aircraft and 12 related engines at Federal Express Corporation (“FedEx Express”) to align with the needs of the U.S. domestic network and modernize its aircraft fleet. As a consequence of this decision, noncash impairment charges of $66 million ($50 million, net of tax, or $0.19 per diluted share) were recorded in the FedEx Express segment in the second quarter. Seven of these aircraft were temporarily idled.
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 incentive stock plans and all financial disclosures about these programs are set forth in our Annual Report. Our stock-based compensation expense was $37 million for the three-month period ended November 30, 2019 and $104 million for the six-month period ended November 30, 2019. Our stock-based compensation expense was $40 million for the three-month period ended November 30, 2018 and $108 million for the six-month period ended November 30, 2018. Due to its immateriality, additional disclosures related to stock-based compensation have been excluded from this quarterly report.
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 the currency translation adjustment section of 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. Accordingly, additional disclosures about cash flow hedges are excluded from this quarterly report. On August 13, 2019, we designated €294 million of debt and on November 8, 2019, we designated an additional €98 million of debt, for a total of €392 million, 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 November 30, 2019, the requirements for the application of hedge accounting continue to be met and the hedge remains effective.

X
- Definition Significant accounting policy. + References No definition available. + Details
Name: | fdx_SignificantAccountingPolicyPolicyTextBlock
Namespace Prefix: | fdx_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for its derivative instruments and hedging activities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41620-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41638-113959 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579245-113959 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41675-113959 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579240-113959 + Details
Name: | us-gaap_DerivativesPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for recognizing and measuring the impairment of long-lived assets. An entity also may disclose its accounting policy for long-lived assets to be sold. This policy excludes goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 05 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=109226317&loc=d3e202-110218 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.CC) -URI http://asc.fasb.org/extlink&oid=27011434&loc=d3e125687-122742 + Details
Name: | us-gaap_ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for leasing arrangement entered into by lessee. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=77888426&loc=SL77918666-209980 + Details
Name: | us-gaap_LesseeLeasesPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for reclassifications that affects the comparability of the financial statements. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6359566&loc=d3e326-107755 + Details
Name: | us-gaap_PriorPeriodReclassificationAdjustmentDescription
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for revenue from contract with customer. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 4 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18823-107790 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
Name: | us-gaap_RevenueFromContractWithCustomerPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b),(f) -URI http://asc.fasb.org/extlink&oid=116856206&loc=d3e5070-113901 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=116856206&loc=d3e5047-113901 + Details
Name: | us-gaap_ShareBasedCompensationOptionAndIncentivePlansPolicy
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration