FedEx Earnings 2020-11-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

fdx-10q_20201130.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED November 30, 2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 1-15829

FEDEX CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	62-1721435
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

942 South Shady Grove Road, Memphis, Tennessee	38120
(Address of principal executive offices)	(ZIP Code)

Registrant’s telephone number, including area code: (901) 818-7500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	FDX	New York Stock Exchange
0.700% Notes due 2022	FDX 22B	New York Stock Exchange
1.000% Notes due 2023	FDX 23A	New York Stock Exchange
0.450% Notes due 2025	FDX 25A	New York Stock Exchange
1.625% Notes due 2027	FDX 27	New York Stock Exchange
1.300% Notes due 2031	FDX 31	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock		Outstanding Shares at December 15, 2020
Common Stock, par value $0.10 per share		265,070,592

FEDEX CORPORATION

INDEX

		PAGE

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets November 30, 2020 and May 31, 2020		3
Condensed Consolidated Statements of Income Three and Six Months Ended November 30, 2020 and 2019		5
Condensed Consolidated Statements of Comprehensive Income Three and Six Months Ended November 30, 2020 and 2019		6
Condensed Consolidated Statements of Cash Flows Six Months Ended November 30, 2020 and 2019		7
Condensed Consolidated Statements of Changes In Common Stockholders’ Investment Three and Six Months Ended November 30, 2020 and 2019		8
Notes to Condensed Consolidated Financial Statements		9
Report of Independent Registered Public Accounting Firm		20
ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition		21
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		46
ITEM 4. Controls and Procedures		46

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings		47
ITEM 1A. Risk Factors		47
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		49
ITEM 5. Other Information		49
ITEM 6. Exhibits		51
Signature		52

Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 10.7
Exhibit 10.8
Exhibit 10.9
Exhibit 15.1
Exhibit 22
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101.1 Interactive Data Files Exhibit 104.1 Cover Page Interactive Data File

- 2 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS)

	November 30, 2020 (Unaudited)		May 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,339	$	4,881
Receivables, less allowances of $617 and $390		11,417		10,102
Spare parts, supplies and fuel, less allowances of $341 and $335		587		572
Prepaid expenses and other		922		828
Total current assets		21,265		16,383
PROPERTY AND EQUIPMENT, AT COST		67,514		65,024
Less accumulated depreciation and amortization		32,904		31,416
Net property and equipment		34,610		33,608
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net		14,845		13,917
Goodwill		6,702		6,372
Other assets		3,734		3,257
Total other long-term assets		25,281		23,546
	$	81,156	$	73,537

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 3 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN MILLIONS, EXCEPT SHARE DATA)

	November 30, 2020 (Unaudited)			May 31, 2020
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	97		$	51
Accrued salaries and employee benefits		2,159			1,569
Accounts payable		3,733			3,269
Operating lease liabilities		2,123			1,923
Accrued expenses		4,003			3,532
Total current liabilities		12,115			10,344
LONG-TERM DEBT, LESS CURRENT PORTION		23,221			21,952
OTHER LONG-TERM LIABILITIES
Deferred income taxes		3,471			3,162
Pension, postretirement healthcare and other benefit obligations		5,088			5,019
Self-insurance accruals		2,250			2,104
Operating lease liabilities		13,009			12,195
Other liabilities		963			466
Total other long-term liabilities		24,781			22,946
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of November 30, 2020 and May 31, 2020		32			32
Additional paid-in capital		3,400			3,356
Retained earnings		27,208			25,216
Accumulated other comprehensive loss		(898	)		(1,147	)
Treasury stock, at cost		(8,703	)		(9,162	)
Total common stockholders’ investment		21,039			18,295
	$	81,156		$	73,537

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 4 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

	Three Months Ended November 30,						Six Months Ended November 30,
	2020			2019			2020			2019
REVENUE	$	20,563		$	17,324		$	39,884		$	34,372
OPERATING EXPENSES:
Salaries and employee benefits		7,443			6,235			14,295			12,322
Purchased transportation		5,407			4,328			10,384			8,356
Rentals and landing fees		1,006			924			1,942			1,844
Depreciation and amortization		936			901			1,862			1,780
Fuel		625			890			1,190			1,760
Maintenance and repairs		815			774			1,621			1,542
Asset impairment charges		—			66			—			66
Other		2,866			2,652			5,535			5,171
		19,098			16,770			36,829			32,841
OPERATING INCOME		1,465			554			3,055			1,531
OTHER (EXPENSE) INCOME:
Interest, net		(184	)		(151	)		(368	)		(288	)
Other retirement plans income		150			168			351			336
Other, net		(25	)		1			(26	)		(11	)
		(59	)		18			(43	)		37
INCOME BEFORE INCOME TAXES		1,406			572			3,012			1,568
PROVISION FOR INCOME TAXES		180			12			541			263
NET INCOME	$	1,226		$	560		$	2,471		$	1,305
EARNINGS PER COMMON SHARE:
Basic	$	4.64		$	2.15		$	9.40		$	5.00
Diluted	$	4.55		$	2.13		$	9.26		$	4.97
DIVIDENDS DECLARED PER COMMON SHARE	$	0.65		$	0.65		$	1.95		$	1.95

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 5 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(IN MILLIONS)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2020			2019			2020			2019
NET INCOME	$	1,226		$	560		$	2,471		$	1,305
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax expense of $6 and $4 in 2020 and $7 and $4 in 2019		124			72			253			(11	)
Amortization of prior service credit, net of tax benefit of $0 and $1 in 2020 and $6 and $12 in 2019		(2	)		(20	)		(4	)		(41	)
		122			52			249			(52	)
COMPREHENSIVE INCOME	$	1,348		$	612		$	2,720		$	1,253

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 6 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(IN MILLIONS)

	Six Months Ended November 30,
	2020			2019
Operating Activities:
Net income	$	2,471		$	1,305
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		1,862			1,780
Asset impairment charges		—			66
Provision for uncollectible accounts		291			208
Stock-based compensation		121			104
Retirement plan mark-to-market adjustment		52			—
Other noncash items and deferred income taxes		1,482			1,164
Changes in assets and liabilities:
Receivables		(1,100	)		(684	)
Other assets		(56	)		(162	)
Accounts payable and other liabilities		241			(1,691	)
Other, net		(134	)		(16	)
Cash provided by operating activities		5,230			2,074
Investing Activities:
Capital expenditures		(2,826	)		(3,266	)
Proceeds from asset dispositions and other		14			4
Cash used in investing activities		(2,812	)		(3,262	)
Financing Activities:
Proceeds from short-term borrowings, net		—			150
Principal payments on debt		(75	)		(1,021	)
Proceeds from debt issuances		970			2,093
Proceeds from stock issuances		431			26
Dividends paid		(341	)		(339	)
Purchase of treasury stock		—			(3	)
Other, net		(12	)		(5	)
Cash provided by financing activities		973			901
Effect of exchange rate changes on cash		67			(1	)
Net increase (decrease) in cash and cash equivalents		3,458			(288	)
Cash and cash equivalents at beginning of period		4,881			2,319
Cash and cash equivalents at end of period	$	8,339		$	2,031

The accompanying notes are an integral part of these condensed consolidated financial statements.

- 7 -

FEDEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT

(UNAUDITED)

(IN MILLIONS, EXCEPT SHARE DATA)

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2020		2019		2020		2019
Common Stock
Beginning Balance	$	32	$	32	$	32	$	32
Ending Balance		32		32		32		32
Additional Paid-in Capital
Beginning Balance		3,375		3,257		3,356		3,231
Employee incentive plans and other		25		30		44		56
Ending Balance		3,400		3,287		3,400		3,287
Retained Earnings
Beginning Balance		26,108		25,048		25,216		24,648
Net Income		1,226		560

Price	144.98	EPS	-1
Shares	262	P/E	-109
MCap	37,985	P/FCF	7
Net Debt	17,207	EBIT	676
TEV	55,192	TEV/EBIT	82
TTM 2020-02-29, in MM, except price, ratios

10-Q	2020-11-30	Filed 2020-12-17
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10-Q	2019-11-30	Filed 2019-12-17
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10-Q	2018-11-30	Filed 2018-12-18
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10-Q	2016-11-30	Filed 2016-12-21
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10-Q	2016-02-29	Filed 2016-03-17
10-Q	2015-11-30	Filed 2015-12-17
10-Q	2015-08-31	Filed 2015-09-17
10-K	2015-05-31	Filed 2015-07-14
10-Q	2015-02-28	Filed 2015-03-19
10-Q	2014-11-30	Filed 2014-12-18
10-Q	2014-08-31	Filed 2014-09-18
10-K	2014-05-31	Filed 2014-07-14
10-Q	2014-02-28	Filed 2014-03-20
10-Q	2013-11-30	Filed 2013-12-19
10-Q	2013-08-31	Filed 2013-09-19
10-K	2013-05-31	Filed 2013-07-15
10-Q	2013-02-28	Filed 2013-03-21
10-Q	2012-11-30	Filed 2012-12-20
10-Q	2012-08-31	Filed 2012-09-19
10-K	2012-05-31	Filed 2012-07-16
10-Q	2012-02-29	Filed 2012-03-23
10-Q	2011-11-30	Filed 2011-12-16
10-Q	2011-08-31	Filed 2011-09-23
10-K	2011-05-31	Filed 2011-07-12
10-Q	2011-02-28	Filed 2011-03-18
10-Q	2010-11-30	Filed 2010-12-17
10-Q	2010-08-31	Filed 2010-09-17
10-K	2010-05-31	Filed 2010-07-15
10-Q	2010-02-28	Filed 2010-03-19

8-K	2020-09-21
8-K	2020-09-15
8-K	2020-08-13
8-K	2020-07-30
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8-K	2020-05-27
8-K	2020-04-07
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8-K	2020-03-09
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8-K	2019-09-23
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8-K	2019-08-05
8-K	2019-07-24
8-K	2019-06-25
8-K	2019-05-31
8-K	2019-03-22
8-K	2019-03-19
8-K	2019-03-11
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8-K	2019-02-13
8-K	2019-01-28
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8-K	2015-01-09
8-K	2015-01-06

EX-10.1	d22902dex101.htm
EX-10.2	d22902dex102.htm
EX-10.3	d22902dex103.htm
EX-10.4	d22902dex104.htm
EX-10.5	d22902dex105.htm
EX-10.6	d22902dex106.htm
EX-10.7	d22902dex107.htm
EX-10.8	d22902dex108.htm
EX-10.9	d22902dex109.htm
EX-15.1	fdx-ex151_11.htm
EX-22	fdx-ex22_612.htm
EX-31.1	fdx-ex311_6.htm
EX-31.2	fdx-ex312_10.htm
EX-32.1	fdx-ex321_14.htm
EX-32.2	fdx-ex322_8.htm

FDX 10Q Quarterly Report

FedEx Earnings 2020-11-30