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Commitments
12 Months Ended
May 31, 2011
Commitments Abstract  
Commitments

NOTE 16: COMMITMENTS

 

Annual purchase commitments under various contracts as of May 31, 2011 were as follows (in millions):

   Aircraft and Facilities     
  Aircraft Related and Other(1)  Total   
            
2012 $ 1,480 $ 918 $ 2,398  
2013   1,086   105   1,191  
2014   781   43   824  
2015   569   30   599  
2016   584   11   595  
Thereafter  1,470   132   1,602  
            
(1) Primarily vehicles, facilities, advertising and promotions contracts.
            

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. Our obligation to purchase 15 of these B777F aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act of 1926, as amended. Commitments to purchase aircraft in passenger configuration do not include the attendant costs to modify these aircraft for cargo transport unless we have entered into noncancelable commitments to modify such aircraft.  Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

 

We had $604 million in deposits and progress payments as of May 31, 2011 (an increase of $167 million from May 31, 2010) on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our consolidated balance sheets. In addition to our commitment to purchase B777Fs, our aircraft purchase commitments include the Boeing 757 (“B757”) in passenger configuration, which will require additional costs to modify for cargo transport. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the number and type of aircraft we are committed to purchase as of May 31, 2011, with the year of expected delivery:

  B757 B777F Total 
        
2012 16  7  23 
2013 4  6  10 
2014 -  7  7 
2015 -  3  3 
2016 -  3  3 
Thereafter -  7  7 
Total 20  33  53