Business Segments and Disaggregated Revenue

12 Months Ended

May 31, 2022

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Business Segments and Disaggregated Revenue

NOTE 15: BUSINESS SEGMENTS AND DISAGGREGATED REVENUE

FedEx Express, FedEx Ground, and FedEx Freight represent our major service lines and, along with FedEx Services, constitute our reportable segments. Our reportable segments include the following businesses:

FedEx Express Segment	FedEx Express (express transportation, small-package ground delivery, and freight transportation)
	FedEx Custom Critical, Inc. (“FedEx Custom Critical”) (time-critical transportation)
FedEx Ground Segment	FedEx Ground (small-package ground delivery)
FedEx Freight Segment	FedEx Freight (LTL freight transportation)
FedEx Services Segment	FedEx Services (sales, marketing, information technology, communications, customer service, technical support, billing and collection services, and back-office functions)

Effective March 1, 2020, the results of FedEx Custom Critical are included in the FedEx Express segment prospectively as the impact to prior periods was not material. This change was made to reflect our internal management reporting structure.

Effective June 1, 2020, the results of FedEx Cross Border Holdings, Inc. (“FedEx Cross Border”) are included in the FedEx Express segment prospectively as the impact to prior periods was not material. This change was made to reflect our internal management reporting structure. FedEx Cross Border was subsequently merged into FedEx Express in the third quarter of 2022.

References to our transportation segments include, collectively, the FedEx Express segment, the FedEx Ground segment, and the FedEx Freight segment.

FedEx Services Segment

The FedEx Services segment operates combined sales, marketing, administrative, and information-technology functions in shared services operations for U.S. customers of our major business units and certain back-office support to our operating segments which allows us to obtain synergies from the combination of these functions. For the international regions of FedEx Express, some of these functions are performed on a regional basis and reported by FedEx Express in their natural expense line items.

The FedEx Services segment provides direct and indirect support to our operating segments, and we allocate all of the net operating costs of the FedEx Services segment to reflect the full cost of operating our businesses in the results of those segments. We review and evaluate the performance of our transportation segments based on operating income (inclusive of FedEx Services segment allocations). For the FedEx Services segment, performance is evaluated based on the effect of its total allocated net operating costs on our operating segments.

Operating expenses for each of our transportation segments include the allocations from the FedEx Services segment to the respective transportation segments. These allocations also include charges and credits for administrative services provided between operating companies. The allocations of net operating costs are based on metrics such as relative revenue or estimated services provided. We believe these allocations approximate the net cost of providing these functions. Our allocation methodologies are refined periodically, as necessary, to reflect changes in our businesses.

Other Intersegment Transactions

Corporate and other includes corporate headquarters costs for executive officers and certain legal and finance functions, including certain other costs and credits not attributed to our core business, including certain costs associated with developing our innovate digitally strategic pillar through our FedEx Dataworks, Inc. (including ShopRunner) (“FedEx Dataworks”) operating segment. FedEx Dataworks is focused on creating solutions to transform the digital and physical experiences of our customers and team members.

Also included in Corporate and other are the FedEx Office operating segment, which provides an array of document and business services and retail access to our customers for our package transportation businesses, and the FedEx Logistics operating segment, which provides integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding.

The results of Corporate, other, and eliminations are not allocated to the other business segments.

Certain FedEx operating companies provide transportation and related services for other FedEx companies outside their reportable segment in order to optimize our resources. Billings for such services are based on negotiated rates, which we believe approximate fair value, and are reflected as revenue of the billing segment. These rates are adjusted from time to time based on market conditions. Such intersegment revenue and expenses are eliminated in our consolidated results and are not separately identified in the following segment information because the amounts are not material.

The following table provides a reconciliation of reportable segment revenue, depreciation and amortization, operating income (loss), and segment assets to consolidated financial statement totals (in millions) for the years ended or as of May 31:

	FedEx Express   Segment		FedEx Ground   Segment		FedEx Freight   Segment		FedEx Services   Segment		Corporate, other, and eliminations			Consolidated Total
Revenue
2022	$	45,814	$	33,232	$	9,532	$	253	$	4,681		$	93,512
2021		42,078		30,496		7,833		32		3,520			83,959
2020		35,513		22,733		7,102		22		3,847			69,217
Depreciation and amortization
2022	$	2,007	$	919	$	406	$	513	$	125		$	3,970
2021		1,946		843		417		462		125			3,793
2020		1,894		789		381		413		138			3,615
Operating income (loss)
2022(1)	$	2,922	$	2,642	$	1,663	$	—	$	(982	)	$	6,245
2021(2)		2,810		3,193		1,005		—		(1,151	)		5,857
2020(3)		996		2,014		580		—		(1,173	)		2,417
Segment assets(4)
2022	$	47,604	$	32,645	$	8,904	$	8,389	$	(11,548	)	$	85,994
2021		46,356		29,134		7,371		8,639		(8,723	)		82,777
2020		41,252		24,700		6,434		7,285		(6,134	)		73,537

(1)Includes business realignment costs of $278 million included in the FedEx Express segment, as well as a charge of $210 million related to the pre- and post-judgment interest in connection with a FedEx Ground legal matter included in “Corporate, other, and eliminations.” Also includes TNT Express integration expenses of $132 million included in “Corporate, other, and eliminations” and the FedEx Express segment.

(2)Includes TNT Express integration expenses of $210 million included in “Corporate, other, and eliminations” and the FedEx Express segment. Also includes business realignment costs of $116 million included in the FedEx Express segment.

(3)Includes noncash goodwill and other asset impairment charges of $435 million primarily related to goodwill impairment at FedEx Office and from the decision to permanently retire certain aircraft and related engines at FedEx Express. Also includes TNT Express integration expenses of $270 million included in “Corporate, other, and eliminations” and the FedEx Express segment.

(4)Segment assets include intercompany receivables.

The following table provides a reconciliation of reportable segment capital expenditures to consolidated totals for the years ended May 31 (in millions):

	FedEx Express   Segment		FedEx Ground   Segment		FedEx Freight   Segment		FedEx Services   Segment		Other		Consolidated Total
2022	$	3,637	$	2,139	$	319	$	565	$	103	$	6,763
2021		3,503		1,446		320		512		103		5,884
2020		3,560		1,083		539		527		159		5,868

The following table presents revenue by service type and geographic information for the years ended or as of May 31 (in millions):

	2022		2021		2020
REVENUE BY SERVICE TYPE
FedEx Express segment:
Package:
U.S. overnight box	$	9,084	$	8,116	$	7,234
U.S. overnight envelope		1,971		1,791		1,776
U.S. deferred		5,330		4,984		4,038
Total U.S. domestic package revenue		16,385		14,891		13,048
International priority		12,130		10,317		7,354
International economy		2,838		2,632		3,082
Total international export package revenue		14,968		12,949		10,436
International domestic(1)		4,340		4,640		4,179
Total package revenue		35,693		32,480		27,663
Freight:
U.S.		3,041		3,325		2,998
International priority		3,840		3,030		1,915
International economy		1,653		1,582		1,930
International airfreight		177		245		270
Total freight revenue		8,711		8,182		7,113
Other(2)		1,410		1,416		737
Total FedEx Express segment		45,814		42,078		35,513
FedEx Ground segment		33,232		30,496		22,733
FedEx Freight segment		9,532		7,833		7,102
FedEx Services segment		253		32		22
Other and eliminations(3)		4,681		3,520		3,847
	$	93,512	$	83,959	$	69,217
GEOGRAPHICAL INFORMATION(4)
Revenue:
U.S.	$	64,941	$	58,792	$	48,404
International:
FedEx Express segment		25,564		23,085		19,177
FedEx Ground segment		857		735		479
FedEx Freight segment		235		190		192
FedEx Services segment		1		1		1
Other		1,914		1,156		964
Total international revenue		28,571		25,167		20,813
	$	93,512	$	83,959	$	69,217
Noncurrent assets:
U.S.	$	53,311	$	49,407	$	45,691
International		12,318		12,790		11,463
	$	65,629	$	62,197	$	57,154

(1)International domestic revenue relates to our intra-country operations.

(2)Includes the operations of FedEx Custom Critical beginning March 1, 2020 and FedEx Cross Border beginning June 1, 2020.

(3)Includes the FedEx Office, FedEx Logistics, and FedEx Dataworks operating segments. The financial results of FedEx Dataworks are included in the periods ended May 31, 2022 and 2021.

(4)International revenue includes shipments that either originate in or are destined to locations outside the United States, which could include U.S. payors. Noncurrent assets include property and equipment, operating lease right-of-use assets, goodwill, and other long-term assets. Our flight equipment is registered in the U.S. and is included as U.S. assets; however, many of our aircraft operate internationally.