FedEx Earnings 2021-02-28

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

fdx-10q_20210228.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 February 28, 2021

☐

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 March 16, 2021
Common Stock, par value $0.10 per share		265,342,075

FEDEX CORPORATION

INDEX

		PAGE

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets February 28, 2021 and May 31, 2020		3
Condensed Consolidated Statements of Income Three and Nine Months Ended February 28, 2021 and February 29, 2020		5
Condensed Consolidated Statements of Comprehensive Income Three and Nine Months Ended February 28, 2021 and February 29, 2020		6
Condensed Consolidated Statements of Cash Flows Nine Months Ended February 28, 2021 and February 29, 2020		7
Condensed Consolidated Statements of Changes In Common Stockholders’ Investment Three and Nine Months Ended February 28, 2021 and February 29, 2020		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		50
ITEM 5. Other Information		50
ITEM 6. Exhibits		52
Signature		53

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 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)

	February 28, 2021 (Unaudited)		May 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,856	$	4,881
Receivables, less allowances of $697 and $390		11,481		10,102
Spare parts, supplies and fuel, less allowances of $345 and $335		583		572
Prepaid expenses and other		790		828
Total current assets		21,710		16,383
PROPERTY AND EQUIPMENT, AT COST		68,703		65,024
Less accumulated depreciation and amortization		33,713		31,416
Net property and equipment		34,990		33,608
OTHER LONG-TERM ASSETS
Operating lease right-of-use assets, net		14,964		13,917
Goodwill		6,977		6,372
Other assets		4,152		3,257
Total other long-term assets		26,093		23,546
	$	82,793	$	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)

	February 28, 2021 (Unaudited)			May 31, 2020
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Current portion of long-term debt	$	646		$	51
Accrued salaries and employee benefits		2,321			1,569
Accounts payable		3,990			3,269
Operating lease liabilities		2,133			1,923
Accrued expenses		4,476			3,532
Total current liabilities		13,566			10,344
LONG-TERM DEBT, LESS CURRENT PORTION		22,797			21,952
OTHER LONG-TERM LIABILITIES
Deferred income taxes		3,563			3,162
Pension, postretirement healthcare and other benefit obligations		4,773			5,019
Self-insurance accruals		2,314			2,104
Operating lease liabilities		12,990			12,195
Other liabilities		809			466
Total other long-term liabilities		24,449			22,946
COMMITMENTS AND CONTINGENCIES
COMMON STOCKHOLDERS’ INVESTMENT
Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of February 28, 2021 and May 31, 2020		32			32
Additional paid-in capital		3,445			3,356
Retained earnings		27,924			25,216
Accumulated other comprehensive loss		(764	)		(1,147	)
Treasury stock, at cost		(8,656	)		(9,162	)
Total common stockholders’ investment		21,981			18,295
	$	82,793		$	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						Nine Months Ended
	February 28, 2021			February 29, 2020			February 28, 2021			February 29, 2020
REVENUE	$	21,510		$	17,487		$	61,394		$	51,859
OPERATING EXPENSES:
Salaries and employee benefits		8,010			6,382			22,305			18,704
Purchased transportation		5,660			4,558			16,044			12,914
Rentals and landing fees		1,131			964			3,073			2,808
Depreciation and amortization		956			908			2,818			2,688
Fuel		756			879			1,946			2,639
Maintenance and repairs		822			684			2,443			2,226
Business realignment costs		10			—			10			—
Asset impairment charges		—			—			—			66
Other		3,160			2,701			8,695			7,872
		20,505			17,076			57,334			49,917
OPERATING INCOME		1,005			411			4,060			1,942
OTHER (EXPENSE) INCOME:
Interest, net		(187	)		(155	)		(555	)		(443	)
Other retirement plans income		202			168			553			504
Other, net		29			(4	)		3			(15	)
		44			9			1			46
INCOME BEFORE INCOME TAXES		1,049			420			4,061			1,988
PROVISION FOR INCOME TAXES		157			105			698			368
NET INCOME	$	892		$	315		$	3,363		$	1,620
EARNINGS PER COMMON SHARE:
Basic	$	3.36		$	1.21		$	12.75		$	6.21
Diluted	$	3.30		$	1.20		$	12.55		$	6.17
DIVIDENDS DECLARED PER COMMON SHARE	$	0.65		$	0.65		$	2.60		$	2.60

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						Nine Months Ended
	February 28, 2021			February 29, 2020			February 28, 2021			February 29, 2020
NET INCOME	$	892		$	315		$	3,363		$	1,620
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments, net of tax expense of $1 and $5 in 2021 and tax benefit of $6 and $3 in 2020		136			(1	)		389			(12	)
Amortization of prior service credit, net of tax benefit of $0 and $1 in 2021 and $7 and $19 in 2020		(2	)		(20	)		(6	)		(61	)
		134			(21	)		383			(73	)
COMPREHENSIVE INCOME	$	1,026		$	294		$	3,746		$	1,547

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)

	Nine Months Ended
	February 28, 2021			February 29, 2020
Operating Activities:
Net income	$	3,363		$	1,620
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		2,818			2,688
Asset impairment charges		—			66
Provision for uncollectible accounts		428			295
Stock-based compensation		161			137
Retirement plan mark-to-market adjustment		52			—
Other noncash items and deferred income taxes		2,020			1,758
Changes in assets and liabilities:
Receivables		(1,187	)		(504	)
Other assets		(165	)		(149	)
Accounts payable and other liabilities		63			(2,612	)
Other, net		(161	)		(21	)
Cash provided by operating activities		7,392			3,278
Investing Activities:
Capital expenditures		(4,202	)		(4,705	)
Business acquisitions, net of cash acquired		(225	)		—
Proceeds from asset dispositions and other		88			15
Cash used in investing activities		(4,339	)		(4,690	)
Financing Activities:
Proceeds from short-term borrowings, net		—			298
Principal payments on debt		(105	)		(1,045	)
Proceeds from debt issuances		970			2,093
Proceeds from stock issuances		482			38
Dividends paid		(513	)		(509	)
Purchase of treasury stock		—			(3	)
Other, net		(13	)		(5	)
Cash provided by financing activities		821			867
Effect of exchange rate changes on cash		101			(8	)
Net increase (decrease) in cash and cash equivalents		3,975			(553	)
Cash and cash equivalents at beginning of period		4,881			2,319
Cash and cash equivalents at end of period	$	8,856		$	1,766

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				Nine Months Ended
	February 28, 2021		February 29, 2020		February 28, 2021		February 29, 2020
Common Stock
Beginning Balance	$	32	$	32	$	32	$	32
Ending Balance		32		32		32		32
Additional Paid-in Capital
Beginning Balance		3,400		3,287		3,356		3,231
Employee incentive plans and other		45		37		89		93
Ending Balance		3,445		3,324		3,445		3,324
Retained Earnings
Beginning Balance		27,208

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	2021-02-28	Filed 2021-03-18
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10-Q	2017-02-28	Filed 2017-03-22
10-Q	2016-11-30	Filed 2016-12-21
10-Q	2016-08-31	Filed 2016-09-21
10-K	2016-05-31	Filed 2016-07-18
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	2021-01-19
8-K	2020-12-17
8-K	2020-09-21
8-K	2020-09-15
8-K	2020-08-13
8-K	2020-07-30
8-K	2020-06-30
8-K	2020-06-15
8-K	2020-05-27
8-K	2020-04-07
8-K	2020-04-03
8-K	2020-03-17
8-K	2020-03-17
8-K	2020-03-09
8-K	2020-01-27
8-K	2019-12-17
8-K	2019-09-23
8-K	2019-09-17
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
8-K	2019-01-18
8-K	2019-01-18
8-K	2019-01-16
8-K	2018-12-18
8-K	2018-12-03
8-K	2018-10-17
8-K	2018-10-10
8-K	2018-09-24
8-K	2018-09-17
8-K	2018-09-06
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8-K	2018-06-18
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8-K	2018-05-24
8-K	2018-05-03
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8-K	2018-03-12
8-K	2018-01-31
8-K	2018-01-26
8-K	2015-09-28
8-K	2015-09-16
8-K	2015-07-21
8-K	2015-07-02
8-K	2015-06-17
8-K	2015-06-08
8-K	2015-05-31
8-K	2015-04-06
8-K	2015-03-18
8-K	2015-03-09
8-K	2015-01-09
8-K	2015-01-06

EX-10.1	d128910dex101.htm
EX-10.2	d128910dex102.htm
EX-10.3	d128910dex103.htm
EX-10.4	d128910dex104.htm
EX-10.5	d128910dex105.htm
EX-10.6	d128910dex106.htm
EX-10.7	d128910dex107.htm
EX-10.8	d128910dex108.htm
EX-15.1	fdx-ex151_7.htm
EX-22	fdx-ex22_8.htm
EX-31.1	fdx-ex311_10.htm
EX-31.2	fdx-ex312_19.htm
EX-32.1	fdx-ex321_12.htm
EX-32.2	fdx-ex322_6.htm

FDX 10Q Quarterly Report

FedEx Earnings 2021-02-28