UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
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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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(ZIP Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
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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.
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).
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.
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
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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 |
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Outstanding Shares at March 15, 2022 |
Common Stock, par value $0.10 per share |
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FEDEX CORPORATION
INDEX
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PAGE |
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PART I. FINANCIAL INFORMATION |
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ITEM 1. Financial Statements |
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Condensed Consolidated Balance Sheets |
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3 |
Condensed Consolidated Statements of Income |
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5 |
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6 |
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Condensed Consolidated Statements of Cash Flows |
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7 |
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8 |
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9 |
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20 |
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ITEM 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition |
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21 |
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk |
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44 |
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45 |
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45 |
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45 |
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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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46 |
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46 |
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49 |
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50 |
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Exhibit 101.1 Interactive Data Files Exhibit 104.1 Cover Page Interactive Data File |
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- 2 -
FEDEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
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February 28, |
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May 31, |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, less allowances of $ |
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Spare parts, supplies, and fuel, less allowances of $ |
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Prepaid expenses and other |
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Total current assets |
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PROPERTY AND EQUIPMENT, AT COST |
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Less accumulated depreciation and amortization |
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Net property and equipment |
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OTHER LONG-TERM ASSETS |
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Operating lease right-of-use assets, net |
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Goodwill |
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Other assets |
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Total other long-term assets |
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$ |
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$ |
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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)
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February 28, |
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May 31, |
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LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT |
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CURRENT LIABILITIES |
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Current portion of long-term debt |
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$ |
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$ |
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Accrued salaries and employee benefits |
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Accounts payable |
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Operating lease liabilities |
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Accrued expenses |
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Total current liabilities |
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LONG-TERM DEBT, LESS CURRENT PORTION |
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OTHER LONG-TERM LIABILITIES |
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Deferred income taxes |
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Pension, postretirement healthcare, and other benefit obligations |
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Self-insurance accruals |
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Operating lease liabilities |
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Other liabilities |
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Total other long-term liabilities |
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COMMON STOCKHOLDERS’ INVESTMENT |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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Treasury stock, at cost |
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Total common stockholders’ investment |
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$ |
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$ |
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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)
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Three Months Ended |
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Nine Months Ended |
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2022 |
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2021 |
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2022 |
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2021 |
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REVENUE |
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$ |
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$ |
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$ |
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$ |
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OPERATING EXPENSES: |
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Salaries and employee benefits |
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Purchased transportation |
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Rentals and landing fees |
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Depreciation and amortization |
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Fuel |
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Maintenance and repairs |
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Business realignment costs |
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Other |
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OPERATING INCOME |
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OTHER (EXPENSE) INCOME: |
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Interest, net |
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Other retirement plans income |
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Other, net |
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INCOME BEFORE INCOME TAXES |
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PROVISION FOR INCOME TAXES |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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EARNINGS PER COMMON SHARE: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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DIVIDENDS DECLARED PER COMMON SHARE |
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$ |
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$ |
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$ |
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$ |
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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)
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Three Months Ended |
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Nine Months Ended |
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February 28, |
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February 28, |
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2022 |
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2021 |
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2022 |
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2021 |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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OTHER COMPREHENSIVE INCOME (LOSS): |
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Foreign currency translation adjustments, net of tax expense of $ |
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Amortization of prior service credit, net of tax benefit of $ |
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COMPREHENSIVE INCOME |
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$ |
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$ |
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$ |
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$ |
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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)
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Nine Months Ended |
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2022 |
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2021 |
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Operating Activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation and amortization |
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Provision for uncollectible accounts |
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Stock-based compensation |
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Retirement plans mark-to-market adjustments |
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Other noncash items including leases and deferred income taxes |
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Business realignment costs |
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— |
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Changes in assets and liabilities: |
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Receivables |
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Other assets |
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Accounts payable and other liabilities |
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Other, net |
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Cash provided by operating activities |
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Investing Activities: |
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Capital expenditures |
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Business acquisitions, net of cash acquired |
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— |
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Purchase of investments |
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Proceeds from asset dispositions and other |
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Cash used in investing activities |
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Financing Activities: |
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Principal payments on debt |
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Proceeds from debt issuances |
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— |
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Proceeds from stock issuances |
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Dividends paid |
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Purchase of treasury stock |
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Other, net |
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— |
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Cash (used in) provided by financing activities |
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Effect of exchange rate changes on cash |
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Net (decrease) increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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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)
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Three Months Ended |
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Nine Months Ended |
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February 28, |
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February 28, |
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2022 |
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2021 |
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2022 |
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2021 |
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Common Stock |
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Beginning Balance |
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$ |
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$ |
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$ |
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$ |
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Ending Balance |
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Additional Paid-in Capital |
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Beginning Balance |
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Employee incentive plans and other |
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Purchase of treasury stock |
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— |
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Ending Balance |
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Retained Earnings |
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Beginning Balance |
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Net Income |
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Cash dividends declared ($ |
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Employee incentive plans and other |
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— |
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Ending Balance |
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Accumulated Other Comprehensive Loss |
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Beginning Balance |
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Other comprehensive income, net of tax (expense)/benefit of ($ |
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Ending Balance |
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Treasury Stock |
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Beginning Balance |
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( |
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( |
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( |
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( |
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Purchase of treasury stock ( |
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— |
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Employee incentive plans and other ( |
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Ending Balance |
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( |
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( |
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( |
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Total Common Stockholders’ Investment Balance |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
- 8 -
FEDEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) General
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, 2021 (“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 February 28, 2022, and the results of our operations for the three- and nine-month periods ended February 28, 2022 and 2021, cash flows for the nine-month periods ended February 28, 2022 and 2021, and changes in common stockholders’ investment for the three- and nine-month periods ended February 28, 2022 and 2021. Operating results for the three- and nine-month periods ended February 28, 2022 are not necessarily indicative of the results that may be expected for the year ending May 31, 2022.
Except as otherwise specified, references to years indicate our fiscal year ending May 31, 2022 or ended May 31 of the year referenced and comparisons are to the corresponding period of the prior year.
REVENUE RECOGNITION.
Contract Assets and Liabilities
Contract assets include billed and unbilled amounts resulting from in-transit shipments, 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 shipments totaled $
- 9 -
Disaggregation of Revenue
The following table provides revenue by service type (in millions) for the periods ended February 28. This presentation is consistent with how we organize our segments internally for making operating decisions and measuring performance.
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Three Months Ended |
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Nine Months Ended |
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