8-KMaterial Agreements

FEDEX CORP 8-K Report, Material Agreement (Jul 24, 2015)

Filed July 24, 2015For Securities:FDX

Summary

FedEx Corporation, through its subsidiary Federal Express Corporation, announced a significant fleet expansion by entering into a Supplemental Agreement with The Boeing Company. This agreement includes firm orders for 50 additional Boeing 767-300 Freighter (B767F) aircraft, with deliveries scheduled from fiscal year 2018 through fiscal year 2023. This expansion will bolster FedEx Express's fleet efficiency and reliability, bringing the total firm orders for B767F aircraft to 106 through fiscal 2023. Furthermore, FedEx Express secured options to purchase an additional 15 B767F aircraft, increasing their total options to 50. Notably, the company reaffirmed its fiscal year 2016 capital spending guidance of approximately $4.6 billion, indicating that the impact of this new order on fiscal year 2017 capital expenditures is expected to be immaterial. This strategic fleet investment signals FedEx's commitment to long-term operational growth and efficiency.

Key Highlights

  • 1FedEx Express placed firm orders for 50 additional Boeing 767-300 Freighter (B767F) aircraft.
  • 2The new aircraft are expected to be delivered between fiscal year 2018 and fiscal year 2023.
  • 3This order increases the total firm orders for B767F aircraft to 106 through fiscal year 2023.
  • 4FedEx Express acquired options for an additional 15 B767F aircraft, bringing total options to 50.
  • 5Four of the firm orders are contingent on FedEx Express and its employees remaining covered under the Railway Labor Act.
  • 6The company maintained its fiscal year 2016 capital spending forecast at approximately $4.6 billion.
  • 7The incremental capital spending impact for fiscal year 2017 from this order is projected to be immaterial.

Frequently Asked Questions

This 8-K filing reports on a material definitive agreement where FedEx Express, a subsidiary of FedEx Corporation, entered into a supplemental agreement with Boeing to purchase 50 additional Boeing 767-300 Freighter aircraft, signifying a significant fleet expansion.

FedEx reaffirmed its fiscal year 2016 capital spending guidance of approximately $4.6 billion. The impact of this new order on fiscal year 2017 capital spending is expected to be immaterial, suggesting the investment will be spread out over several years and managed within existing financial plans.

With the new order, FedEx Express now has a total of 106 firm orders for B767F aircraft through fiscal year 2023. Additionally, they hold options for another 50 B767F aircraft.

Yes, four of the 50 firm orders for the B767F aircraft are conditioned upon there being no event that causes FedEx Express or its employees to no longer be covered by the Railway Labor Act of 1926, as amended.