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FDX · FedEx

31 filings

10-K

FDX 10-K Annual Reports

FedEx - 31 annual reports

Filing record · 2016–202610-K1210-Q328-K159

2026
FedEx Annual Report, Year Ended May 31, 2026
FedEx Corporation's 2026 10-K filing reveals significant strategic shifts, including the spin-off of its less-than-truckload (LTL) freight services business and a change in its fiscal year-end to December 31. These changes are part of a broader strategy to streamline operations and focus on core express and international delivery services. The company reported an 8% increase in consolidated revenue to $94.72 billion, driven by improved yields, higher U.S. domestic package volumes, and increased fuel surcharges. Operating income saw a 5% increase to $5.46 billion, though this was impacted by substantial separation and business optimization costs. Key financial highlights for fiscal year 2026 include a substantial increase in cash and cash equivalents to $13.3 billion, bolstered by proceeds from debt issuances and lower stock repurchases compared to the prior year. The company also announced a new $5 billion stock repurchase program. Despite ongoing investments in network modernization and efficiency initiatives like Network 2.0, FedEx is navigating a complex economic environment characterized by inflation and geopolitical uncertainties. The company reiterates its commitment to long-term growth and profitability through strategic capital allocation and operational improvements.
Jul 20, 2026
2025
FedEx Annual Report, Year Ended May 31, 2025
FedEx Corporation reported relatively flat consolidated revenue for the fiscal year ended May 31, 2025, driven by improved yields across its segments, partially offset by a shift towards deferred services, lower volumes in certain segments, and the expiration of a significant contract with the U.S. Postal Service. While the Federal Express segment saw a modest revenue increase, FedEx Freight experienced a revenue decline due to reduced shipments and lower fuel surcharges. Despite flat revenue, consolidated operating income decreased by 6% year-over-year, primarily impacted by increased purchased transportation costs, wage rates, and business optimization expenses related to the DRIVE program. The company is actively managing its cost structure and pursuing efficiency initiatives, including Network 2.0, to navigate current macroeconomic challenges and changing customer preferences. Furthermore, FedEx announced its intention to separate FedEx Freight through a spin-off, expected by June 2026, aiming to create a more focused enterprise.
Jul 21, 2025
2024
FedEx Annual Report, Year Ended May 31, 2024
FedEx Corporation's (FDX) 10-K filing for the fiscal year ending May 31, 2024, highlights a strategic transformation with the "one FedEx" consolidation, merging FedEx Ground and FedEx Services into Federal Express Corporation to create a more unified air-ground express network. This integration, alongside ongoing DRIVE and Network 2.0 initiatives, aims to enhance long-term profitability and operational efficiency. Despite a 3% revenue decrease to $87.7 billion, primarily driven by lower fuel surcharges and volume declines in FedEx Express and FedEx Freight, the company reported a 13% increase in consolidated operating income to $5.6 billion. FedEx Ground showed strong performance with a 2% revenue increase and a significant 29% rise in operating income, boosted by yield improvements and cost efficiencies. Key operational shifts include a continued focus on deferred services, reflecting evolving customer preferences amidst challenging macroeconomic conditions like elevated inflation and interest rates. The company also announced a workforce reduction plan in Europe and is conducting an assessment of FedEx Freight's role in its portfolio structure. FedEx remains committed to its strategic goals, including advancing vehicle electrification and achieving carbon neutrality by 2040, with capital expenditures expected to remain stable year-over-year. Investors should note the potential impacts of the USPS contract expiration in September 2024 and ongoing pilot labor negotiations.
Jul 15, 2024
2023
FedEx Annual Report, Year Ended May 31, 2023
FedEx Corporation's fiscal year 2023 (ending May 31, 2023) filing indicates a challenging year marked by a 4% decline in revenue to $90.16 billion, primarily due to weaker global economic conditions impacting shipping volumes across all segments. Despite these headwinds, the company achieved yield improvements, particularly in its Ground and Freight segments, leading to a 19% increase in FedEx Ground's operating income and a 16% increase in FedEx Freight's operating income. However, FedEx Express saw a significant 64% drop in operating income, largely due to volume declines and the lingering effects of integration costs from the TNT Express acquisition, although significant progress has been made on that front. Looking ahead, FedEx is undergoing a major transformation with its 'one FedEx' strategy and DRIVE program, aimed at consolidating operations for greater efficiency and profitability, with full integration expected by June 2024. The company is managing capital expenditures carefully, planning for a decrease in spending in FY24. While the macro-economic environment remains uncertain, FedEx's focus on operational efficiency, yield management, and strategic transformation positions it for potential recovery and long-term value creation for investors.
Jul 17, 2023
2022
FedEx Annual Report, Year Ended May 31, 2022
FedEx Corporation's fiscal year 2022 (ending May 31, 2022) was characterized by robust revenue growth driven by yield management actions and increased volumes across several segments, particularly FedEx Freight. The company reported total revenues of $93.5 billion, an 11% increase year-over-year. Despite revenue growth, consolidated operating income saw a modest 7% increase to $6.2 billion, with operating margins slightly declining year-over-year due to increased operating expenses related to labor market challenges, inflationary pressures, and the ongoing integration of TNT Express. FedEx Express experienced revenue growth primarily from yield improvements but faced volume declines in certain categories. FedEx Ground saw strong revenue growth due to yield and mix shifts, but its operating income was negatively impacted by increased costs. FedEx Freight demonstrated significant operational improvements with a 65% increase in operating income, driven by strong yield and volume growth. The company also provided an outlook for fiscal year 2023 anticipating continued revenue growth through yield management and cost controls, while acknowledging potential impacts from slowing global economic conditions and geopolitical uncertainties.
Jul 18, 2022
2021
FedEx Annual Report, Year Ended May 31, 2021
FedEx Corporation's fiscal year ending May 31, 2021, demonstrated robust performance driven by significant increases in e-commerce demand, amplified by the COVID-19 pandemic, leading to strong revenue and operating income growth across its transportation segments. The company reported a substantial 21% increase in consolidated revenue, reaching $83.96 billion, with operating income more than doubling to $5.86 billion. This growth was primarily fueled by higher package volumes in FedEx Ground and FedEx Express, coupled with yield improvements resulting from strategic pricing initiatives. Despite increased operating expenses related to managing heightened demand, including higher labor and operational costs, FedEx successfully navigated the challenging pandemic environment. The company also made strategic moves, including acquiring ShopRunner and investing in technology and network modernization, positioning itself for continued growth in the evolving logistics landscape.
Jul 19, 2021
2020
FedEx Annual Report, Year Ended May 31, 2020
FedEx's fiscal 2020 (year ended May 31, 2020) was a sharply weaker year: revenue fell 1% to $69.2 billion, while operating income dropped 46% to $2.4 billion and the operating margin compressed 290 basis points to 3.5%. Net income rose to $1.29 billion, but that figure is distorted by offsetting items, including a non-cash $794 million pension mark-to-market loss, $435 million of goodwill and asset impairments (mainly FedEx Office), $270 million of TNT Express integration expenses, and tax benefits of roughly $133 million (valuation allowance release) and $71 million (CARES Act). Diluted EPS was $4.90, versus $2.03 in 2019, which included a much larger $3.9 billion pension loss. The segment picture was split. FedEx Ground was the bright spot, with revenue up 11% on residential e-commerce volume during the COVID-19 stay-at-home surge, though its operating income fell 24% on higher self-insurance accruals, expansion costs, and a more competitive pricing environment. FedEx Express had operating income down 54% to $996 million, reflecting weaker global trade, the loss of a large customer, and integration costs. FedEx Freight was relatively stable, with operating income down 6% to $580 million. For investors, the outlook is the central concern. Management said the pace of economic recovery is the most significant uncertainty, and it guided to 2021 capital expenditures of about $4.9 billion (down $1.0 billion), integration expenses of roughly $175 million, and a continued TNT integration into 2022. Liquidity was strengthened through $6.6 billion of new debt, a $4.9 billion cash balance, suspended voluntary pension funding, and amended credit covenants that temporarily suspend share buybacks and dividend increases through May 2021. The company also maintained its $0.65 quarterly dividend, and its credit ratings (BBB / Baa2) carry negative outlooks.
Jul 20, 2020
2019-A
FedEx Annual Report (Amendment), Year Ended May 31, 2019
This filing is an amendment (10-K/A) to FedEx Corporation's Annual Report for the fiscal year ended May 31, 2019. The primary purpose of this amendment is to disclose information related to international trade sanctions compliance, specifically concerning shipments facilitated by P2P Mailing Limited, a company acquired by FedEx. While the original 10-K was filed on July 16, 2019, this amendment adds disclosure required by Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Exchange Act. FedEx disclosed that P2P Mailing Limited, from its acquisition in March 2018 through early February 2019, facilitated a limited number of shipments into Iran. These shipments, primarily consumer goods, generated approximately £16,067 ($19,500) in gross revenue and £5,083 ($6,200) in profit. The company has since implemented enhanced controls and procedures to prevent such shipments, and the Office of Foreign Assets Control (OFAC) has closed its investigation into the matter. No other financial or operational information from the original 10-K is updated by this amendment.
Aug 15, 2019
2019
FedEx Annual Report, Year Ended May 31, 2019
FedEx's fiscal 2019 10-K (fiscal year ended May 31, 2019) shows revenue growing 6% to $69.7 billion and operating income rising 5% to $4.47 billion, but the headline net income collapsed to $540 million (diluted EPS $2.03, versus $16.79 in FY2018) because of a pre-tax, non-cash $3.9 billion mark-to-market pension loss recorded in the fourth quarter. Excluding that item and the prior year's $1.15 billion one-time U.S. deferred tax remeasurement benefit, the underlying picture is more balanced: volume growth, favorable fuel net impact, and yield gains at FedEx Ground and FedEx Freight offset softening international trade volumes and cost headwinds, including $320 million of business realignment costs and $388 million of TNT Express integration expenses. Segment performance diverged sharply. FedEx Ground operating income rose 4% to $2.64 billion on 7% volume growth driven by e-commerce, though its margin fell 80 basis points to 12.9% as purchased transportation costs climbed with the expansion to six-day operations. FedEx Freight was the standout, with operating income up 26% to $615 million and margin up 90 basis points to 8.1%, driven by higher revenue per shipment. FedEx Express was roughly flat at $2.12 billion, with margin slipping to 5.7%, as international priority volumes weakened and mix shifted toward lower-yielding deferred and freight services. Management's 2020 outlook calls for lower Express operating income, improved Ground and Freight results, roughly $5.9 billion in capital expenditures, and an effective tax rate of 23% to 25% before any year-end pension adjustment. For investors, the key watch items are the pension sensitivity to discount rates (a 50 basis point move changes the largest plan's obligation by about $1.7 to $1.9 billion), the ongoing ground contractor litigation, the $233 million of TCJA transition-tax benefits that could be reversed if the IRS position prevails, the Securities class actions filed in June and July 2019, and the cost of the TNT Express integration, which management now expects to total about $1.7 billion through 2021. Leverage remains manageable, with debt to adjusted EBITDA at 2.25x against a 3.5x covenant, and the company continued to return cash through $1.48 billion of buybacks and $683 million of dividends.
Jul 16, 2019
2018
FedEx Annual Report, Year Ended May 31, 2018
FedEx's fiscal 2018 (year ended May 31, 2018) 10-K shows a year of contrasting results. Consolidated revenue rose 9% to $65.45 billion, driven by yield and volume growth at FedEx Ground and FedEx Freight, higher fuel surcharges, and the consolidation of TNT Express. However, operating income fell 3% to $4.87 billion and operating margin contracted 100 basis points to 7.4%. The decline reflects the NotPetya cyberattack at TNT Express (estimated $400 million hit in the first half), $477 million of TNT Express integration expenses, and a $380 million goodwill and asset impairment at FedEx Supply Chain. Diluted EPS was $16.79, up 52%, but this was inflated by a $1.15 billion provisional benefit from the Tax Cuts and Jobs Act, which drove an effective tax rate of (5.0%). Investors should therefore treat net income of $4.57 billion as non-recurring in large part. Cash flow and capital allocation were heavy. Operating cash flow fell to $4.67 billion from $4.93 billion, mainly because of $2.5 billion in U.S. pension contributions, including a voluntary $1.5 billion funded in February 2018. Capital expenditures rose to $5.66 billion, largely for FedEx Express aircraft fleet modernization. Free cash flow was therefore negative at roughly $1.0 billion. Management nonetheless returned capital, repurchasing $1.0 billion of stock and paying $535 million in dividends, and raised the quarterly dividend to $0.65 from $0.50. Total debt, including the current portion, reached about $16.6 billion. The company stated that its debt-to-adjusted-EBITDA ratio was 2.0x against a 3.5x covenant, and it holds BBB (S&P) and Baa2 (Moody's) ratings with stable outlooks. Looking ahead, management guided to yield and volume growth at all transportation segments in fiscal 2019, with capital expenditures of about $5.6 billion and roughly $450 million of integration expenses. It targets $1.2 to $1.5 billion of incremental operating income at FedEx Express by 2020, measured against 2017, with TNT Express integration expected to be substantially complete by the end of 2020. Key risks disclosed include fuel price volatility, trade policy and tariffs, labor and independent-contractor classification litigation at FedEx Ground, the GDPR compliance burden, and the execution risk of the TNT integration. Also noteworthy is the upcoming accounting change in fiscal 2019 that moves non-service pension costs below operating income. This will reduce reported operating income and margin but leave net income and EPS unaffected.
Jul 16, 2018
2017
FedEx Annual Report, Year Ended May 31, 2017
FedEx Corporation's (FDX) 2017 10-K filing indicates a pivotal year driven by the acquisition of TNT Express, aiming to significantly expand its global footprint and service offerings, particularly in Europe. While the integration process is underway, it presented substantial operational and financial challenges, including integration expenses and a cyber-attack on TNT Express operations that caused significant delays and incremental costs. The company's core FedEx Express and FedEx Ground segments showed resilience with revenue and volume growth, supported by yield improvements and strategic investments in fleet modernization and network expansion. Despite the integration complexities and cyber incident, FedEx demonstrated a commitment to shareholder returns through share repurchases and dividend payments, underpinned by a solid operating performance across most segments.
Jul 17, 2017
2016
FedEx Annual Report, Year Ended May 31, 2016
FedEx Corporation's 2016 Form 10-K highlights a year of significant strategic shifts, most notably the transformative acquisition of TNT Express in May 2016. This acquisition, the largest in FedEx's history, is positioned to expand its global reach, particularly in Europe, and reduce costs by increasing operational density. The company also reported strong performance across its segments, benefiting from profit improvement initiatives, particularly at FedEx Express, and favorable market conditions. Despite facing challenges such as lower fuel surcharges and currency headwinds impacting FedEx Express, overall revenue grew, driven by volume increases at FedEx Ground. Investors should note the company's continued investment in network modernization and expansion, especially at FedEx Ground, to capitalize on e-commerce growth. The report also details FedEx's commitment to corporate responsibility, environmental sustainability, and strong corporate governance, including the adoption of proxy access bylaws. While the integration of TNT Express presents near-term complexities and costs, FedEx anticipates significant long-term benefits from this strategic move.
Jul 18, 2016
2015
FedEx Annual Report, Year Ended May 31, 2015
FedEx Corporation's 2015 10-K filing highlights a challenging fiscal year marked by significant non-cash charges impacting net income, most notably a $2.2 billion mark-to-market adjustment related to pension accounting. Despite these accounting impacts, the company's core transportation segments—FedEx Express, FedEx Ground, and FedEx Freight—demonstrated strong operational performance with increased volumes and improved yields, particularly in FedEx Ground and FedEx Freight. The company made substantial progress on its profit improvement initiatives, aiming to enhance efficiency and reduce costs across its operations. Strategic growth initiatives were also a key focus, with notable acquisitions of GENCO and Bongo International to bolster capabilities in e-commerce and third-party logistics. Furthermore, FedEx announced its conditional agreement to acquire TNT Express, a move intended to significantly expand its global reach, especially in Europe. The company continued its commitment to modernizing its fleet and investing in network expansion, particularly at FedEx Ground, signaling a forward-looking approach to managing capacity and operational effectiveness.
Jul 14, 2015
2014
FedEx Annual Report, Year Ended May 31, 2014
FedEx's fiscal 2014 (year ended May 31, 2014) results show revenue growth and a sharp rebound in operating income. Revenues rose 3% to $45.6 billion, and operating income increased 35% to $3.4 billion, with operating margin improving to 7.6% from 5.8%. Net income reached $2.1 billion and diluted EPS was $6.75, up 37%. The comparison is flattered by the prior year, which absorbed $560 million of business realignment costs and a $100 million aircraft impairment, worth $1.31 per diluted share. Excluding those items, the improvement was more modest, and management cited a significant negative net fuel impact, severe weather, and one fewer operating day as headwinds. The business mix was uneven. FedEx Ground was the standout, with revenue up 10% to $11.6 billion, operating income up 9% to $1.96 billion, and average daily volume up 9%. FedEx Freight also improved, with operating income up 53%. FedEx Express was essentially flat on revenue at $27.1 billion, and its operating income rose to $1.17 billion from $555 million, mainly because of the prior-year charges. Management continues to target $1.6 billion of additional annual operating profit at FedEx Express by the end of fiscal 2016 through its profit improvement programs, and it expects revenue and earnings growth in fiscal 2015. Capital allocation was aggressive. FedEx repurchased $4.9 billion of stock in fiscal 2014, including a $2.0 billion accelerated share repurchase, and funded it partly with $2.0 billion of new senior unsecured debt. Long-term debt rose to $4.7 billion from $2.7 billion, and cash fell to $2.9 billion from $4.9 billion. Capital expenditures were $3.5 billion, and fiscal 2015 spending is guided to about $4.2 billion. The company also flagged material unresolved risks, including the FedEx Ground independent contractor litigation, the California and New York environmental and cigarette matters, a French Competition Authority investigation that could be material, and a pilot labor contract still under negotiation.
Jul 14, 2014
2013
FedEx Annual Report, Year Ended May 31, 2013
FedEx's fiscal 2013 (year ended May 31, 2013) was a year of divergent segment performance. Consolidated revenue rose 4% to $44.3 billion, but operating income fell 20% to $2.55 billion and diluted EPS dropped 23% to $4.91, with the decline driven largely by $560 million of business realignment costs (mostly a voluntary buyout program affecting roughly 3,600 employees), a $100 million aircraft impairment, and a shift in demand from priority to lower-yielding economy international services at FedEx Express. Express operating income fell 56% to $555 million, with its operating margin dropping to 2.0% from 4.8%. In contrast, FedEx Ground was the standout, with revenue up 10% to $10.6 billion and operating income up 1% to $1.79 billion, while FedEx Freight improved its operating income to $208 million on higher yields. Management is pinning its near-term hopes on a $1.6 billion annual profit improvement target at FedEx Express by the end of fiscal 2016, built on cost reductions, fleet modernization (including retiring aircraft and shortening depreciable lives on 76 more), and network adjustments. Management expects revenue and earnings growth in fiscal 2014, though it also flags continued pressure from the priority-to-economy shift and higher capital spending of about $4.0 billion. Balance sheet metrics remain solid: cash rose to $4.9 billion, the company issued $750 million of new senior notes, the leverage ratio was 51% against a 70% covenant, and the pension funded deficit narrowed to $3.2 billion from $4.9 billion. Investors should also weigh ongoing legal risk around FedEx Ground's independent contractor model, which management says could lead to material loss or changes to the model, although it does not expect that to impair the business. The company also disclosed potential OFAC sanctions exposure from shipments tied to Dubai-based consolidators, though the identified revenue was small.
Jul 15, 2013
2012
FedEx Annual Report, Year Ended May 31, 2012
FedEx's fiscal 2012 10-K (fiscal year ended May 31, 2012) shows a strong year driven by yield growth and the outperformance of FedEx Ground. Revenue rose 9% to $42.7 billion and operating income rose 34% to $3.19 billion, lifting operating margin 140 basis points to 7.5%. Diluted EPS was $6.41, up 40% from $4.57. Results were helped by a timing lag in fuel surcharges, a milder winter versus 2011, and a $66 million reversal of the ATA Airlines legal reserve, partly offset by a $134 million non-cash impairment on retired aircraft. Management attributes about $0.15 per diluted share of net favorable items to these charges and credits. Segment performance was uneven but encouraging. FedEx Ground was the standout, with operating income up 33% and margin expanding 280 basis points to 18.4%. FedEx Freight swung to a $162 million operating profit from a loss a year earlier, and FedEx Express operating income rose only 3% as U.S. domestic and international priority package volumes declined amid weaker global demand. Cash flow from operations rose to $4.8 billion, but capital expenditures climbed to $4.0 billion, leaving free cash flow of roughly $828 million. Pension obligations are a notable headwind: the funded status deficit widened to $4.9 billion after a 4.44% discount rate, and management expects pension expense to rise by about $150 million in fiscal 2013. Looking ahead, management guides to revenue and earnings growth in fiscal 2013 despite modest global growth, with capital expenditures expected to fall to about $3.9 billion. The effective tax rate is expected to rise to 37% to 38%. Key risks include the ongoing independent-contractor litigation at FedEx Ground (the outcome could be material), the USPS air contract expiring in September 2013, fuel price volatility, and the pilot contract becoming amendable in March 2013. The company has a $1 billion undrawn revolving credit facility and a BBB/Baa1 credit profile.
Jul 16, 2012
2011
FedEx Annual Report, Year Ended May 31, 2011
FedEx's fiscal 2011 10-K (year ended May 31, 2011) shows a strong rebound from the recession. Revenue rose 13% to $39.3 billion, operating income climbed 19% to $2.38 billion, and operating margin improved to 6.1% from 5.8%. Diluted EPS was $4.57, versus $3.76 in fiscal 2010 and $0.31 in fiscal 2009, which was depressed by $1.2 billion in goodwill and aircraft impairments. Growth was broad-based, driven by yield increases and volume gains across FedEx Express, FedEx Ground and FedEx Freight. FedEx Ground was the standout, with operating margin rising to 15.6%. FedEx Freight returned to profitability in the fourth quarter after combining its LTL operations with FedEx National LTL. Costs rose meaningfully. Salaries and benefits increased 9% on the reinstatement of merit raises, higher pension and medical costs, and restored 401(k) matching. Fuel expense jumped 34%, and severe second-half weather disrupted networks. The results also absorbed a $66 million ATA Airlines legal reserve and $133 million in LTL integration costs. Cash from operations rose to $4.04 billion, and capital expenditures increased to $3.43 billion. Management guided to significant earnings improvement in fiscal 2012, with FedEx Express as the primary driver, a $4.2 billion capex budget, and an effective tax rate of 36% to 38%. Investors should weigh several risks. FedEx Ground's independent contractor model faces numerous lawsuits, and the company says an adverse outcome could be material. The company also has $1.5 billion of fixed-rate debt and $14 billion of undiscounted operating lease commitments. Its large pension deficit grew to $1.5 billion, and its 777F aircraft purchase commitments total $5.97 billion. The dividend was raised to $0.13 per quarter, and no shares were repurchased in the fourth quarter.
Jul 12, 2011
2010
FedEx Annual Report, Year Ended May 31, 2010
FedEx's fiscal 2010 10-K (fiscal year ended May 31, 2010) shows a company recovering from the global recession, with revenue down 2% to $34.7 billion but net income rising to $1.18 billion (diluted EPS $3.76) from $1.13 billion in 2009, which was depressed by $1.2 billion in goodwill and aircraft impairment charges. Operating income fell to $2.0 billion from $2.1 billion on an operating margin of 5.8% versus 2.1% a year earlier, but the 2010 comparison is distorted by the prior-year charges. Management points to a strong second half of the year, with volume growth across all transportation segments, particularly higher-margin international priority package and freight shipments at FedEx Express. Operating cash flow rose to $3.1 billion, while capital expenditures of $2.8 billion were concentrated on new B777 Freighter and B757 aircraft. Segment performance was uneven. FedEx Ground was the standout, with operating income exceeding $1 billion for the first time on market share gains and FedEx SmartPost volume growth of 48%. FedEx Express improved operating income to $1.1 billion on volume growth and lower fuel costs, though revenue fell 4% on lower fuel surcharges. FedEx Freight swung to an operating loss of $153 million amid excess LTL industry capacity and a 10% decline in yield. Management expects stronger revenue and earnings growth in fiscal 2011, though it flagged a roughly $260 million increase in pension and retiree medical expense from a lower discount rate, reinstated employee compensation programs, and higher aircraft maintenance costs. Key investor risks in the filing include the ongoing legal challenge to FedEx Ground's independent contractor model, with multiple class actions in which the company says a material loss is reasonably possible; a possible Congressional change that could remove most FedEx Express employees from Railway Labor Act protections; and the October 2010 expiration of the pilots' collective bargaining agreement. The company also remains exposed to fuel price volatility because surcharges lag spot prices by six to eight weeks, and to pension funding requirements. Its balance sheet is solid, with an adjusted debt-to-capital ratio of 0.5 against a covenant ceiling of 0.7, and no commercial paper outstanding.
Jul 15, 2010
2009
FedEx Annual Report, Year Ended May 31, 2009
FedEx's fiscal 2009 (year ended May 31, 2009) was a sharply weaker year driven by the global recession. Revenue fell 6% to $35.5 billion from $37.95 billion, operating income dropped 37% to $2.08 billion, and operating margin compressed to 2.1% from 5.5%. Diluted EPS fell to $0.31 from $3.60, reflecting a $1.2 billion fourth-quarter charge (about $3.45 per diluted share) for goodwill impairments at FedEx Office (Kinko's, $810 million) and FedEx National LTL (Watkins, $90 million), plus aircraft-related asset impairments at FedEx Express. Excluding these charges, the decline was primarily volume-driven: FedEx Express revenue fell 8%, FedEx Freight revenue fell 11% on a 7% drop in LTL shipments, and FedEx Express's jet fuel costs fell 8%-9% in dollar terms as fuel prices collapsed. FedEx Ground was the bright spot, with revenue up 4% and operating margin improving to 11.5%, as it gained share (including volume from DHL's exit from the U.S. domestic market). Cash generation and liquidity remained solid. Operating cash flow was $2.75 billion, capital expenditures were $2.46 billion (down 17%), and cash rose to $2.29 billion. FedEx issued $1 billion of senior unsecured notes in January 2009 and has an undrawn $1 billion revolver. Management is cautious for fiscal 2010, expecting flat volumes at FedEx Express, lower fuel surcharges reducing revenue, continued LTL weakness, and a 2010 capex plan of about $2.6 billion, with pension contributions of roughly $850 million. Investors should also note ongoing legal risk tied to FedEx Ground's independent contractor model, which management says could be material, and a potential congressional change to the Railway Labor Act that would affect FedEx Express labor relations.
Jul 15, 2009
2008
FedEx Annual Report, Year Ended May 31, 2008
FedEx's fiscal 2008 10-K (year ended May 31, 2008) shows a sharply weaker year. Revenue rose 8% to $37.95 billion, but operating income fell 37% to $2.08 billion and diluted EPS dropped 44% to $3.60, from $6.48. The decline reflects a fourth-quarter charge of roughly $891 million, mostly noncash impairments tied to the decision to retire the Kinko's trade name (renamed FedEx Office) and to goodwill at that unit. Excluding the charge, management points to record fuel prices (fuel expense up about 30%), a weak U.S. economy that pushed domestic express volumes to pre-2000 levels by Q4, and fuel surcharges that lagged cost increases. Cost-containment measures and lower incentive compensation cushioned the impact. Management's outlook for fiscal 2009 is cautious. It expects no significant U.S. economic recovery, nominal base revenue growth, and reduced earnings. Capital expenditures are planned at roughly 2008 levels (under $3 billion), with reductions possible if conditions worsen. The company also flagged material contingent exposure from FedEx Ground's independent contractor litigation, including an IRS tentative assessment of $319 million for 2002 and ongoing DOJ and foreign antitrust investigations. Balance sheet metrics remain solid: $1.54 billion in cash, a leverage ratio of 0.5 against a 0.7 covenant, a $1 billion undrawn revolver, and BBB/Baa2 credit ratings with stable outlooks. The dividend was raised to $0.11 per quarter.
Jul 16, 2008
2007
FedEx Annual Report, Year Ended May 31, 2007
FedEx's fiscal 2007 10-K (fiscal year ended May 31, 2007) shows a company growing revenue and earnings while absorbing several headwinds. Revenue rose 9% to $35.2 billion, operating income rose 9% to $3.28 billion, and diluted EPS grew 11% to $6.48, though operating margin was flat at 9.3%. Growth was driven by FedEx Ground volume (average daily volume up 11%), FedEx Express International Priority services, and the acquisition of Watkins Motor Lines (now FedEx National LTL), which added roughly $760 million to revenue. Results were pressured by a $143 million upfront pilot labor contract charge, fuel surcharge timing lags, softening LTL volumes, and operating losses at FedEx National LTL. FedEx Kinko's remained weak, with operating income falling to $45 million. Management guided to a more cautious fiscal 2008. Revenue growth is expected to moderate and earnings are expected to fall below the company's long-term goal of 10% to 15% annual earnings growth, reflecting a softer U.S. economy and heavy planned investment. Capital expenditures are projected at about $3.5 billion, up from $2.9 billion, with spending focused on the Boeing 757 and 777 Freighter fleet renewal, FedEx Ground network expansion (targeting about five million packages per day of pickup capacity by 2012), and FedEx Kinko's retail expansion of roughly 300 new centers. The 2007 acquisitions totaled about $1.3 billion in cash, including DTW Group ($427 million), Watkins ($787 million) and ANC ($241 million), alongside PAFEX. Investors should also weigh balance sheet and legal items. Cash fell to $1.57 billion, operating cash flow was $3.56 billion against capex of $2.88 billion, and the company paid a dividend increase to $0.10 per quarter. Notable risks include FedEx Ground's owner-operator classification litigation, wage-and-hour class actions, and antitrust investigations by the DOJ, the European Commission and the ACCC into air freight pricing. Pension accounting changed materially: SFAS 158 reduced shareholders' equity by $982 million, and the company is modernizing retirement plans starting in 2008.
Jul 13, 2007
2006-A
FedEx Annual Report (Amendment), Year Ended May 31, 2006
FedEx Corporation's fiscal year 2006 annual report (10-K/A) reveals a company experiencing significant growth, with revenues climbing to $32.3 billion, a notable increase from $29.4 billion in the prior year. This growth is reflected in the company's net income, which rose to $1.8 billion from $1.4 billion in fiscal year 2005. The company's balance sheet shows a healthy increase in cash and cash equivalents, bolstering liquidity. The report also details substantial investments in property and equipment, indicating a commitment to expanding and modernizing its infrastructure to support future growth and operational efficiency. Key strategic moves include the acquisition of FedEx SmartPost and the significant acquisition of FedEx Kinko's, which expanded FedEx's service offerings into document solutions and retail presence. The company is also planning further expansion, with announced agreements to acquire the LTL operations of Watkins Motor Lines and a significant stake in China's express delivery market. Despite strong financial performance, the company faces ongoing litigation, particularly concerning independent contractor classifications and potential discrimination claims, which investors should monitor.
Aug 2, 2006
2006
FedEx Annual Report, Year Ended May 31, 2006
FedEx's fiscal 2006 10-K (year ended May 31, 2006) shows a strong year. Revenue rose 10% to $32.3 billion, operating income rose 22% to $3.0 billion, and diluted EPS reached $5.83, up 24% from $4.72. Operating margin expanded 90 basis points to 9.3%. Growth came from international priority (IP) volume and yield, U.S. domestic yield gains, fuel surcharges, and volume growth at FedEx Ground and FedEx Freight. Net income was $1.8 billion and operating cash flow was $3.7 billion, which funded $2.5 billion of capital expenditures and $369 million of debt repayment while keeping the balance sheet solid. A one-time $79 million lease accounting charge in Q1 weighed on results. The main investor concerns are FedEx Kinko's, where operating income fell 43% to $57 million on weaker copy demand and competition, and the rising cost of growth. Management plans roughly $2.9 billion of capex in fiscal 2007 and is buying Watkins Motor Lines (about $780 million) and the DTW China express business (about $400 million), both expected to close in the first half of 2007. Management also expects SFAS 123R to reduce diluted EPS by about $0.15 in fiscal 2007. Risk factors include a pending FedEx Ground owner-operator classification challenge, a $60 million jury verdict against FedEx Ground in Issa & Rizkallah, a Satchell race discrimination class action, pilot contract negotiations, and fuel price volatility. The filing also notes a grand jury subpoena received June 23, 2006 in a DOJ antitrust investigation of the air cargo industry. Management says it has no reason to believe FedEx is a target and is cooperating.
Jul 14, 2006
2005
FedEx Annual Report, Year Ended May 31, 2005
FedEx Corporation's 2005 10-K report highlights a period of robust growth, driven by strong performance across its express, ground, and freight segments. The company reported significant revenue increases, largely attributed to volume growth and improved yields, bolstered by the full-year inclusion of FedEx Kinko's and strategic international expansion, particularly in Asia. Operating income saw a substantial increase, benefiting from revenue growth and efficiency gains, which helped offset rising fuel costs and operational expenses. Financially, FedEx demonstrated strong cash flow from operations, supporting investments in network expansion and fleet modernization, including the anticipation of Airbus A380 freighters. The company maintained a healthy liquidity position and reported effective internal controls over financial reporting. Strategic priorities include optimizing networks, enhancing customer experience, and managing costs to drive long-term shareholder value, while navigating potential challenges like fuel price volatility and ongoing labor negotiations.
Jul 14, 2005
2004-A
FedEx Annual Report (Amendment), Year Ended May 31, 2004
FedEx Corporation's fiscal 2004 10-K/A (Amendment No. 1, for the year ended May 31, 2004) is a narrow amendment that corrects the unaudited pro forma results table in Note 2 (Business Combinations). The corrected pro forma figures for FY2004, as if the FedEx Kinko's acquisition had occurred at the start of FY2003, are revenues of $26.056 billion, net income of $836 million, basic EPS of $2.80 and diluted EPS of $2.75. No other changes were made to the original Form 10-K filed July 16, 2004. The amendment does not change reported results, which show FY2004 revenues of $24.71 billion (up 9.9%), net income of $838 million (up 1%), and diluted EPS of $2.76 (up from $2.74). The year was shaped by the February 2004 acquisition of FedEx Kinko's for about $2.4 billion in cash, financed largely by $1.6 billion of senior notes. This added $1.7 billion of goodwill and a $567 million indefinite-lived Kinko's trade name, which pushed total goodwill to $2.8 billion and total assets to $19.1 billion. Operating income was roughly flat at $1.44 billion, held down by $435 million of business realignment costs, mainly voluntary early-retirement programs at FedEx Express that drew about 3,600 employees. Operating cash flow rose sharply to $3.02 billion from $1.87 billion, helped by a pension-related swing and higher payables. Capital expenditures fell to $1.27 billion from $1.51 billion. Investors should weigh a few items. The effective tax rate fell to 36.5% from 38.0%, partly due to a favorable court ruling on jet engine maintenance costs that delivered a one-time $26 million benefit. Total debt rose to about $3.6 billion from $2.0 billion. Pending matters include a Department of Transportation claim of $31.6 million related to September 11 airline stabilization compensation, with a possible loss range of zero to $49.6 million, and California wage-and-hour class actions. Management also expects a roughly $30 million increase in pension cost for 2005.
Jul 21, 2004
2004
FedEx Annual Report, Year Ended May 31, 2004
FedEx's fiscal 2004 10-K (year ended May 31, 2004) shows a company that grew revenue 10% to $24.7 billion and net income 1% to $838 million, but operating income fell 2% to $1.44 billion as the company absorbed $435 million of business realignment costs, mainly at FedEx Express. Diluted EPS rose 1% to $2.76, helped by a one-time $37 million after-tax benefit from a favorable jet engine maintenance tax ruling and a lower effective tax rate of 36.5%. Excluding realignment costs, operating income would have grown meaningfully, and management guides to significant operating income and margin growth in fiscal 2005, citing roughly $80 to $90 million of incremental realignment savings. The defining event of the year was the $2.4 billion cash acquisition of FedEx Kinko's on February 12, 2004, funded with $1.6 billion of senior unsecured notes and cash. The deal added $621 million of revenue in 2004 and produced $1.7 billion of goodwill plus a $567 million indefinite-lived Kinko's trade name, pushing total assets to $19.1 billion from $15.4 billion and long-term debt to $2.8 billion from $1.7 billion. Management expects FedEx Kinko's revenue of about $2.1 billion in 2005 and the addition of roughly 70 new locations. Investors should weigh the larger balance sheet, higher leverage, and goodwill exposure against stronger free cash flow, which rose to about $1.75 billion ($3.02 billion operating cash flow less $1.27 billion capex) because pension contributions fell to $320 million from over $1 billion. Key risks include fuel price exposure (partly offset by surcharges that lag spot prices), the pending pilot union contract negotiations, a disputed Airline Stabilization Act compensation claim where the DOT seeks $31.6 million back and a reasonably possible loss range of zero to $49.6 million, and pension sensitivity to discount rates. Management expects 2005 capital expenditures of about $1.65 billion and a roughly 38% effective tax rate.
Jul 16, 2004
2003
FedEx Annual Report, Year Ended May 31, 2003
FedEx's fiscal 2003 10-K (year ended May 31, 2003) shows a company whose consolidated results improved while its largest segment weakened. Revenue rose 9% to $22.5 billion and operating income rose 11% to $1.47 billion, with net income up 17% to $830 million and diluted EPS of $2.74 versus $2.34. The growth was driven by FedEx Ground, where revenue grew 26% and operating margin expanded to 14.5%, plus higher international volumes at FedEx Express and higher FedEx Freight yields. FedEx Express, the largest segment, saw operating income fall 3% and its margin decline to 4.8% on sluggish U.S. domestic volumes, higher pension and healthcare costs, heavier maintenance spending, and net fuel cost pressure. Balance sheet and cash flow picture is mixed. Operating cash flow fell to $1.87 billion from $2.23 billion, largely because the company made about $1.1 billion of discretionary contributions to its U.S. pension plans to fund the accumulated benefit obligation. Capital expenditures declined 6% to $1.51 billion, and the company paid its first-ever cash dividend ($0.05 per quarter) and repurchased $186 million of stock. Long-term debt stands at roughly $1.7 billion, and the company held $538 million in cash at year end. Management's outlook for fiscal 2004 is cautious. Management expects a sluggish U.S. economy at least through the first quarter, with an approved early-retirement and severance program at FedEx Express expected to cost $230-290 million pretax. Pension expense is projected to rise about $115 million. Investors should also note a pending dispute with the Department of Transportation over $31.6 million of airline stabilization compensation and a $70 million judgment on appeal in the 1997 Teamsters strike class action, though management views neither as likely to be material.
Jul 17, 2003
2002-A
FedEx Annual Report (Amendment), Year Ended May 31, 2002
This filing is an amendment to FedEx Corporation's Form 10-K for the fiscal year ended May 31, 2002, primarily correcting an EDGAR conversion error in historical stock price table headings. For investors, the key takeaway is the company's historical practice of reinvesting earnings, marked by the significant announcement of its first-ever cash dividend of $0.05 per share declared on May 31, 2002. This signals a potential shift in capital allocation strategy towards returning value to shareholders, a factor that warrants close observation in future filings. While the amendment itself is minor, the period covered saw a general upward trend in FedEx's stock price, particularly in the latter half of fiscal year 2002, with prices reaching highs of $58.91 and $61.35 in the third and fourth quarters, respectively. This suggests a positive market sentiment towards the company leading up to this filing. Investors should monitor the consistency and growth of future dividends as an indicator of sustained financial health and shareholder-friendliness.
Jul 22, 2002
2002
FedEx Annual Report, Year Ended May 31, 2002
FedEx Corporation's fiscal 2002 10-K (year ended May 31, 2002) shows a company recovering from a weak economy and the aftermath of September 11, with earnings growing even as revenue was only modestly higher. Revenue rose 5% to $20.6 billion and operating income rose 23% to $1.32 billion, while net income climbed 22% to $710 million (diluted EPS $2.34, versus $1.99). Much of the improvement came from FedEx Ground, whose operating income nearly doubled to $337 million, and from the first full year of FedEx Freight. FedEx Express, the largest segment, saw package volumes fall 6% and operating income drop 4% to $811 million, though U.S. Postal Service transportation contracts and cost controls cushioned the decline. Cash generation strengthened materially. Operating cash flow reached $2.2 billion, capital expenditures fell to $1.6 billion, and free cash flow turned positive at $616 million, the first year after investing activities that the company generated positive cash flow. Management used this to retire over $300 million of debt and repurchase $177 million of stock. The board also declared FedEx's first-ever cash dividend of $0.05 per share, signaling confidence in sustained cash flow. Investors should weigh several risks: pension costs are expected to rise about $90 million in 2003 due to lower discount rates and weaker asset returns, and the company's rapidly growing operating lease commitments total about $14.8 billion off balance sheet. The company also faces a potential material reduction in $119 million of September 11 airline stabilization compensation, a $68 million class-action judgment it plans to appeal, and an IRS dispute over jet engine maintenance deductions. Management guided to revenue and volume growth in 2003, contingent on an economic recovery in the second half of the year.
Jul 19, 2002
1999
FedEx Annual Report, Year Ended May 31, 1999
FDX Corporation's fiscal 1999 10-K (fiscal year ended May 31, 1999) reports a record year: revenues rose 6% to $16.77 billion, operating income rose 15% to $1.16 billion, and net income climbed 26% to $631 million, or $2.10 per diluted share (up 24%). Excluding non-recurring items, including a roughly $91 million charge for strike contingency planning tied to the FedEx pilots' dispute, diluted EPS was $2.28, up 17%. The results were driven by package volume growth, yield-management actions, and lower jet fuel prices (average jet fuel cost per gallon fell about 23%). FedEx, the largest subsidiary, accounts for about 83% of revenue and remains the global express leader, while RPS, the ground small-package carrier, grew revenue 10% with a 12.3% operating margin. Balance sheet and cash flow improved meaningfully. Debt to total capitalization fell to 22.8% from 29.3%, long-term debt dropped 16%, and operating cash flow reached $1.77 billion against capital expenditures of $1.77 billion, so free cash flow was roughly breakeven. Management is targeting five-year goals of 12% to 15% annual earnings growth and return on equity of at least 20%, and it reports ROE of 14.6% for FY99. The company pays no dividends and has said it does not intend to pay them. Its strategy rests on a 'portfolio' model in which independent operating companies focus on separate market segments while sharing sales and IT synergies. Key risks include pending DOT and foreign aviation-rights issues, weakness in Asian markets, rising maintenance costs from an aging fleet, and a $500 million RPS expansion plus a planned business-to-residential delivery test. The FedEx pilots' five-year contract, ratified in February 1999, adds about 17% in pay over its term. Ongoing litigation over the air-cargo excise tax is not reserved for, and management views the other legal matters as immaterial.
Aug 16, 1999
1998
FedEx Annual Report, Year Ended May 31, 1998
FDX Corporation's inaugural 10-K (fiscal year ended May 31, 1998) reports the formation of a holding company that combined FedEx and the Caliber System companies (RPS, Viking Freight, Roberts Express, Caliber Logistics) through a pooling-of-interests transaction completed January 27, 1998. Because pooling accounting restates prior periods, the reported figures are comparable across years. FY1998 revenue rose 11% to $15.87 billion, operating income nearly doubled to $1.01 billion (including an $88 million merger charge), and net income reached $503 million, or $3.37 per diluted share. Excluding non-recurring items, net income was $583 million, or $3.91 per share, up about 55% from the prior-year comparable figure. Management attributed much of the strength to the August 1997 UPS strike, which added substantial one-time volume, and to yield-management actions at FedEx's U.S. domestic business. The business is growing, but several pressures are visible. International operating margins fell to 2.3% from 4.4% amid Asian economic weakness and lower airfreight yields, and management expects airfreight volumes and yields to decline in 1999. FedEx's engine noise-reduction kit sales, a meaningful source of profit, peaked in 1998 and are expected to fall. Viking Freight's daily shipments dropped 60% after its 1997 restructuring. The company also carries a large off-balance-sheet aircraft lease commitment (roughly $12.4 billion in future operating lease payments) and substantial aircraft purchase obligations, and it has never paid a cash dividend. Pilot labor negotiations at FedEx were unresolved at filing, and class-action suits over the air-transportation excise tax remain pending with no reserve recorded. For investors, the filing presents a strong earnings base with clear growth drivers in express package volume and RPS ground small-package volume, but the 1998 figures are flattered by strike-related and non-recurring gains. The sustainability of the margin improvement, especially in international operations and in the face of rising aircraft lease and maintenance costs, is the key question going forward.
Aug 14, 1998