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Long-Term Debt and Other Financing Arrangements | 12 Months Ended
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May 31, 2022
Debt and Lease Obligation [Abstract] |
Long-term Debt and Other Financing Arrangements | NOTE 7: LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS The components of long-term debt (net of discounts and debt issuance costs), along with maturity dates for the years subsequent to May 31, 2022, are as follows (in millions):
|  |  |  |  |  |  | May 31, |
|  |  |  |  |  |  | 2022 |  |  | 2021 |
|  | Interest Rate % |  |  | Maturity |  |  |  |  |  |
Senior secured debt: |  |  |  |  |  |  |  |  |  |  |
|  |  | 1.875 |  |  | 2034 |  | $ | 881 |  |  | $ | 932 |
Senior unsecured debt: |  |  |  |  |  |  |  |  |  |  |
|  |  | 3.25 |  |  | 2026 |  |  | 747 |  |  |  | 746 |
|  |  | 3.40 |  |  | 2028 |  |  | 497 |  |  |  | 496 |
|  |  | 4.20 |  |  | 2029 |  |  | 397 |  |  |  | 397 |
|  | 3.10-4.25 |  |  | 2030 |  |  | 1,735 |  |  |  | 1,733 |
|  |  | 2.40 |  |  | 2031 |  |  | 990 |  |  |  | 989 |
|  |  | 4.90 |  |  | 2034 |  |  | 496 |  |  |  | 496 |
|  |  | 3.90 |  |  | 2035 |  |  | 495 |  |  |  | 494 |
|  |  | 3.25 |  |  | 2041 |  |  | 740 |  |  |  | 739 |
|  | 3.875-4.10 |  |  | 2043 |  |  | 985 |  |  |  | 985 |
|  |  | 5.10 |  |  | 2044 |  |  | 742 |  |  |  | 742 |
|  |  | 4.10 |  |  | 2045 |  |  | 641 |  |  |  | 641 |
|  | 4.55-4.75 |  |  | 2046 |  |  | 2,462 |  |  |  | 2,461 |
|  |  | 4.40 |  |  | 2047 |  |  | 736 |  |  |  | 736 |
|  |  | 4.05 |  |  | 2048 |  |  | 987 |  |  |  | 986 |
|  |  | 4.95 |  |  | 2049 |  |  | 836 |  |  |  | 836 |
|  |  | 5.25 |  |  | 2050 |  |  | 1,226 |  |  |  | 1,226 |
|  |  | 4.50 |  |  | 2065 |  |  | 246 |  |  |  | 246 |
|  |  | 7.60 |  |  | 2098 |  |  | 237 |  |  |  | 237 |
Euro senior unsecured debt: |  |  |  |  |  |  |  |  |  |  |
|  |  | 0.45 |  |  | 2026 |  |  | 533 |  |  |  | 607 |
|  |  | 1.625 |  |  | 2027 |  |  | 1,332 |  |  |  | 1,516 |
|  |  | 0.45 |  |  | 2029 |  |  | 637 |  |  |  | 725 |
|  |  | 1.30 |  |  | 2032 |  |  | 530 |  |  |  | 604 |
|  |  | 0.95 |  |  | 2033 |  |  | 688 |  |  |  | 784 |
Total senior unsecured debt |  |  |  |  |  |  |  | 18,915 |  |  |  | 19,422 |
Finance lease obligations |  |  |  |  |  |  |  | 468 |  |  |  | 525 |
|  |  |  |  |  |  |  | 20,264 |  |  |  | 20,879 |
Less current portion |  |  |  |  |  |  |  | 82 |  |  |  | 146 |
|  |  |  |  |  |  | $ | 20,182 |  |  | $ | 20,733 |
Interest on our U.S. dollar fixed-rate notes is paid semi-annually. Interest on our euro fixed-rate notes is paid annually. The weighted-average interest rate on long-term debt was 3.5% as o f May 31, 2022. Long-term debt, including current maturities and exclusive of finance leases, had estimated fair valu es of $18.8 billion a t May 31, 2022 and $23.1 billion at May 31, 2021. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of our long-term debt is classified a s Level 2 within the fair value hierarchy. This classification is defined as a fair value determined using market-based inputs other than quoted prices that are observable for the liability, either directly or indirectly. We have a shelf registration statement filed with the Securities and Exchange Commission (“SEC”) that allows us to sell, in one or more future offerings, any combination of our unsecured debt securities and common stock and allows pass-through trusts formed by FedEx Express to sell, in one or more future offerings, pass-through certificates. FedEx Express has issued $970 million of Pass-Through Certificates, Series 2020-1AA (the “Certificates”) with a fixed interest rate of 1.875% due in February 2034 utilizing pass-through trusts. The Certificates are secured by 19 Boeing aircraft with a net book value of $1.8 billion at May 31, 2022. The payment obligations of FedEx Express in respect of the Certificates are fully and unconditionally guaranteed by FedEx. FedEx Express is using the proceeds from the issuance for general corporate purposes. The following table sets forth the future scheduled principal payments due by fiscal year on our long-term debt (in millions):
|  |  |  |  |  | Debt Principal |
2023 |  |  |  |  |  | $ | 52 |
2024 |  |  |  |  |  |  | 52 |
2025 |  |  |  |  |  |  | 52 |
2026 |  |  |  |  |  |  | 1,337 |
2027 |  |  |  |  |  |  | 1,391 |
Thereafter |  |  |  |  |  |  | 17,147 |
Subtotal |  |  |  |  |  |  | 20,031 |
Discount and debt issuance costs |  |  |  |  |  |  | (235 | )
Total debt |  |  |  |  |  | $ | 19,796 |
On March 15, 2022, we further amended our second amended and restated $2.0 billion five-year credit agreement (the “Five-Year Credit Agreement”) and replaced our previously existing $1.5 billion 364-day credit agreement (the “Terminated Credit Agreement”) with a $1.5 billion three-year credit agreement (the “Three-Year Credit Agreement” and together with the Five-Year Credit Agreement, the “Credit Agreements”). The Five-Year Credit Agreement expires in March 2026 and includes a $250 million letter of credit sublimit. The Three-Year Credit Agreement expires in March 2025. The Credit Agreements are available to finance our operations and other cash flow need s. As of May 31, 2022, no commercial paper was outstanding, and we had $250 million of the letter of credit sublimit unused under the Five-Year Credit Agreement. Ou tstanding commercial paper reduces the amount available to borrow under the Credit Agreements. As a result of the discontinuation of LIBOR from recent reference rate reform, effective March 15, 2022, all references to LIBOR in the Five-Year Credit Agreement have been replaced with references to SOFR, the recommended risk-free reference rate of the Federal Reserve Board and Alternative Reference Rates Committee, and the additional procedures for transition to a reference rate other than LIBOR have been removed from the Five-Year Credit Agreement. The Three-Year Credit Agreement includes identical provisions regarding SOFR. We do not expect the change in rate to have a material impact on our financial condition, results of operations, or cash flows. Our Credit Agreements contain a financial covenant requiring us to maintain a ratio of debt to consolidated earnings (excluding noncash retirement plans MTM adjustments, noncash pension service costs, and noncash asset impairment charges) before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) of not more than 3.5 to 1.0, calculated as of the last day of each fiscal quarter on a rolling four-quarters basis. The Terminated Credit Agreement also included this financial covenant. The ratio of our debt to adjusted EBITDA was 1.82 to 1.0 at May 31, 2022. The financial covenant discussed above is the only significant restrictive covenant in the Credit Agreements. The Credit Agreements contain other customary covenants that do not, individually or in the aggregate, materially restrict the conduct of our business. We are in compliance with the financial covenant and all other covenants in the Credit Agreements and do not expect the covenants to affect our operations, including our liquidity or expected funding needs. If we failed to comply with the financial covenant or any other covenants in the Credit Agreements, our access to financing could become limited. During the fourth quarter of 2021, we issued $3.25 billion of senior unsecured debt under our current shelf registration statement, comprised of €600 million of 0.45% fixed-rate notes due in May 2029 (the “Sustainability Notes”), €650 million of 0.95% fixed-rate notes due in May 2033, $1.0 billion of 2.40% fixed-rate notes due in May 2031, and $750 million of 3.25% fixed-rate notes due in May 2041. We used the net proceeds from these offerings to redeem the $500 million aggregate principal amount outstanding of our 3.40% notes due 2022, the €640 million aggregate principal amount outstanding of our 0.70% notes due 2022, the $500 million aggregate principal amount outstanding of our 2.625% notes due 2023, the €750 million aggregate principal amount outstanding of our 1.00% notes due 2023, the $250 million aggregate principal amount outstanding of our 2.70% notes due 2023, the $750 million aggregate principal amount outstanding of our 4.00% notes due 2024, the $700 million aggregate principal amount outstanding of our 3.20% notes due 2025, the $1.0 billion aggregate principal amount outstanding of our 3.80% notes due 2025, and the $450 million aggregate principal amount outstanding of our 3.30% notes due 2027. We intend to use an amount equal to the net proceeds from the offering of the Sustainability Notes to fund or refinance a portfolio of new or ongoing projects in the following areas: clean transportation; green buildings; energy efficiency; eco-efficient and/or circular economy adapted products, production technologies and processes; pollution prevention and control; renewable energy; and socioeconomic advancement and empowerment. As a result of the debt redemption, we recognized a loss on debt extinguishment of $393 million in 2021.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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