01—Abstract
Summary
Summary of the 10-K/A filed August 15, 2019. Cited figures are marked; the original filing is the authoritative source.
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 ($19,500a) 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.
02—Key points
Key Highlights
- This filing is an amendment to the previously filed 2019 10-K, solely to address international trade sanctions compliance.
- The amendment details shipments to Iran facilitated by P2P Mailing Limited, an acquired UK-based subsidiary, between March 2018 and February 2019.
- These shipments generated minimal revenue (£16,067) and profit (£5,083) for FedEx.
- FedEx has implemented corrective actions, including enhanced controls, to prevent future sanction violations via P2P Mailing Limited.
- The U.S. Office of Foreign Assets Control (OFAC) has concluded its investigation into this matter without further action.
- No other financial or operational disclosures from the original 10-K are affected or updated by this amendment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, FedEx kept $0.01.
- Revenue$69.69B100.0%
- Cost of revenue−$16.65B23.9%
- Gross profit$53.04B76.1%
- Operating costs−$48.57B69.7%
- Operating income$4.47B6.4%
- Interest, other & tax−$3.93B5.6%
- Net income$540.0M0.8%
Where FY2019 revenue went
$69.69B- Operating costs: $48.57B, 70% of revenue
- Cost of revenue: $16.65B, 24% of revenue
- Net income: $540.0M, 0.8% of revenue
- Interest, other & tax: $3.93B, 5.6% of revenue
Kept 0.8% as net incomeNet income $540.0M · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2019filed August 15, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $69.69B$65.45B | +6.5% |
| Cost of Revenue | $16.65B$15.10B | +10.3% |
| Gross Profit | $53.04B$50.35B | +5.3% |
| Operating Expenses | $65.23B$61.18B | +6.6% |
| Operating Income | $4.47B$4.27B | +4.5% |
| Interest Expense | $588.00M$558.00M | +5.4% |
| Net Income | $540.00M$4.57B | −88.2% |
| EPS (Basic) | $2.06$17.08 | −87.9% |
| EPS (Diluted) | $2.03$16.79 | −87.9% |
| Shares Outstanding (Basic) | 262.00M267.00M | −1.9% |
| Shares Outstanding (Diluted) | 265.00M272.00M | −2.6% |
05—Questions
Frequently Asked Questions
What is the primary reason for this amendment to FedEx's 10-K filing?
This amendment (10-K/A) is filed solely to add disclosure regarding compliance with international trade sanctions laws, specifically Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Exchange Act. It addresses specific shipments to Iran that were identified as requiring disclosure.
Did FedEx violate U.S. sanctions laws, and what was the financial impact?
FedEx disclosed that its acquired subsidiary, P2P Mailing Limited, facilitated a limited number of shipments into Iran between March 2018 and February 2019. These shipments resulted in minimal aggregate gross revenue of approximately £16,067 (about $19,500) and profit of approximately £5,083 (about $6,200). FedEx has stated these shipments were not in accordance with their internal policies and has taken corrective actions. The U.S. OFAC investigated and has since closed its inquiry into the matter.
Are there any significant updates to FedEx's financial performance or operational outlook in this filing?
No, this amendment does not update any financial performance or operational information from the original Form 10-K filed on July 16, 2019. The amendment is strictly limited to providing additional disclosure related to past international trade sanctions compliance issues.
What actions has FedEx taken regarding the identified shipments to Iran?
Upon learning of the shipments, FedEx implemented a mechanism to prevent further shipments into Iran through P2P's service offerings, and no such shipments have occurred since. They have also implemented enhanced controls and procedures to ensure P2P's compliance with FedEx's export controls and economic sanctions programs. FedEx also voluntarily self-disclosed the matter to OFAC.
06—Continue