Condensed Consolidating Financial Statements

6 Months Ended

Nov. 30, 2012

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

(9) Condensed Consolidating Financial Statements

We are required to present condensed consolidating financial information in order for the subsidiary guarantors (other than FedEx Express) of our public debt to continue to be exempt from reporting under the Securities Exchange Act of 1934, as amended.

The guarantor subsidiaries, which are wholly owned by FedEx, guarantee $2.0 billion of our debt. The guarantees are full and unconditional and joint and several. Our guarantor subsidiaries were not determined using geographic, service line or other similar criteria, and as a result, the "Guarantor Subsidiaries" and "Non-guarantor Subsidiaries" columns each include portions of our domestic and international operations. Accordingly, this basis of presentation is not intended to present our financial condition, results of operations or cash flows for any purpose other than to comply with the specific requirements for subsidiary guarantor reporting. Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables (in millions):

CONDENSED CONSOLIDATING BALANCE SHEETS
(UNAUDITED)
November 30, 2012
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,715	$	328	$	659	$	(185)	$	2,517
	Receivables, less allowances				-		4,106		1,147		(51)		5,202
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			162		714		54		-		930
	Deferred income taxes				-		491		19		-		510
			Total current assets		1,877		5,639		1,879		(236)		9,159
PROPERTY AND EQUIPMENT, AT COST					26		35,659		2,064		-		37,749
	Less accumulated depreciation and amortization				20		18,264		1,116		-		19,400
			Net property and equipment		6		17,395		948		-		18,349
INTERCOMPANY RECEIVABLE					-		-		1,115		(1,115)		-
GOODWILL					-		1,554		1,203		-		2,757
INVESTMENT IN SUBSIDIARIES					18,069		3,238		-		(21,307)		-
OTHER ASSETS					2,781		802		208		(2,744)		1,047
				$	22,733	$	28,628	$	5,353	$	(25,402)	$	31,312
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	1	$	-	$	-	$	1
	Accrued salaries and employee benefits				66		1,020		211		-		1,297
	Accounts payable				46		1,347		573		(236)		1,730
	Accrued expenses				216		1,386		198		-		1,800
		Total current liabilities			328		3,754		982		(236)		4,828
LONG-TERM DEBT, LESS CURRENT PORTION					1,991		250		-		-		2,241
INTERCOMPANY PAYABLE					697		418		-		(1,115)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		3,704		13		(2,744)		973
	Other liabilities				4,174		3,343		210		-		7,727
		Total other long-term liabilities			4,174		7,047		223		(2,744)		8,700
STOCKHOLDERS' INVESTMENT					15,543		17,159		4,148		(21,307)		15,543
				$	22,733	$	28,628	$	5,353	$	(25,402)	$	31,312

CONDENSED CONSOLIDATING BALANCE SHEETS
May 31, 2012
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	1,906	$	417	$	636	$	(116)	$	2,843
	Receivables, less allowances				3		3,793		943		(35)		4,704
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			261		671		44		-		976
	Deferred income taxes				-		514		19		-		533
			Total current assets		2,170		5,395		1,642		(151)		9,056
PROPERTY AND EQUIPMENT, AT COST					29		34,301		1,834		-		36,164
	Less accumulated depreciation and amortization				20		17,822		1,074		-		18,916
			Net property and equipment		9		16,479		760		-		17,248
INTERCOMPANY RECEIVABLE					-		323		1,524		(1,847)		-
GOODWILL					-		1,553		834		-		2,387
INVESTMENT IN SUBSIDIARIES					17,163		2,978		-		(20,141)		-
OTHER ASSETS					2,845		1,099		86		(2,818)		1,212
				$	22,187	$	27,827	$	4,846	$	(24,957)	$	29,903
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	-	$	417	$	-	$	-	$	417
	Accrued salaries and employee benefits				83		1,365		187		-		1,635
	Accounts payable				6		1,276		482		(151)		1,613
	Accrued expenses				184		1,406		119		-		1,709
		Total current liabilities			273		4,464		788		(151)		5,374
LONG-TERM DEBT, LESS CURRENT PORTION					1,000		250		-		-		1,250
INTERCOMPANY PAYABLE					1,847		-		-		(1,847)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		3,649		5		(2,818)		836
	Other liabilities				4,340		3,193		183		-		7,716
		Total other long-term liabilities			4,340		6,842		188		(2,818)		8,552
STOCKHOLDERS' INVESTMENT					14,727		16,271		3,870		(20,141)		14,727
				$	22,187	$	27,827	$	4,846	$	(24,957)	$	29,903

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended November 30, 2012
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,225	$	1,965	$	(83)	$	11,107
OPERATING EXPENSES:
	Salaries and employee benefits		31		3,569		533		-		4,133
	Purchased transportation		-		1,222		673		(35)		1,860
	Rentals and landing fees		1		549		81		(1)		630
	Depreciation and amortization		1		545		46		-		592
	Fuel		-		1,210		25		-		1,235
	Maintenance and repairs		1		481		29		-		511
	Intercompany charges, net		(59)		(88)		147		-		-
	Other		25		1,143		307		(47)		1,428
			-		8,631		1,841		(83)		10,389
OPERATING INCOME			-		594		124		-		718
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		438		70		-		(508)		-
	Interest, net		(27)		8		1		-		(18)
	Intercompany charges, net		29		(33)		4		-		-
	Other, net		(2)		(3)		(3)		-		(8)
INCOME BEFORE INCOME TAXES			438		636		126		(508)		692
	Provision for income taxes		-		190		64		-		254
NET INCOME		$	438	$	446	$	62	$	(508)	$	438
COMPREHENSIVE INCOME		$	497	$	455	$	71	$	(508)	$	515
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended November 30, 2011
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	9,001	$	1,660	$	(74)	$	10,587
OPERATING EXPENSES:
	Salaries and employee benefits		28		3,506		448		-		3,982
	Purchased transportation		-		1,122		482		(28)		1,576
	Rentals and landing fees		1		557		67		(2)		623
	Depreciation and amortization		1		480		37		-		518
	Fuel		-		1,181		19		-		1,200
	Maintenance and repairs		-		486		25		-		511
	Intercompany charges, net		(53)		(135)		188		-		-
	Other		23		1,156		262		(44)		1,397
			-		8,353		1,528		(74)		9,807
OPERATING INCOME			-		648		132		-		780
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		497		80		-		(577)		-
	Interest, net		(19)		11		1		-		(7)
	Intercompany charges, net		21		(27)		6		-		-
	Other, net		(2)		(1)		7		-		4
INCOME BEFORE INCOME TAXES			497		711		146		(577)		777
	Provision for income taxes		-		202		78		-		280
NET INCOME		$	497	$	509	$	68	$	(577)	$	497
COMPREHENSIVE INCOME		$	525	$	480	$	(11)	$	(577)	$	417

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Six Months Ended November 30, 2012
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	18,319	$	3,743	$	(163)	$	21,899
OPERATING EXPENSES:
	Salaries and employee benefits		61		7,158		1,017		-		8,236
	Purchased transportation		-		2,352		1,256		(68)		3,540
	Rentals and landing fees		2		1,093		156		(3)		1,248
	Depreciation and amortization		1		1,075		89		-		1,165
	Fuel		-		2,326		47		-		2,373
	Maintenance and repairs		1		996		56		-		1,053
	Intercompany charges, net		(119)		(200)		319		-		-
	Other		54		2,276		586		(92)		2,824
			-		17,076		3,526		(163)		20,439
OPERATING INCOME			-		1,243		217		-		1,460
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		897		99		-		(996)		-
	Interest, net		(50)		19		3		-		(28)
	Intercompany charges, net		53		(62)		9		-		-
	Other, net		(3)		(5)		(5)		-		(13)
INCOME BEFORE INCOME TAXES			897		1,294		224		(996)		1,419
	Provision for income taxes		-		426		96		-		522
NET INCOME		$	897	$	868	$	128	$	(996)	$	897
COMPREHENSIVE INCOME		$	1,015	$	883	$	178	$	(996)	$	1,080
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Six Months Ended November 30, 2011
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	18,008	$	3,244	$	(144)	$	21,108
OPERATING EXPENSES:
	Salaries and employee benefits		61		7,037		888		-		7,986
	Purchased transportation		-		2,202		946		(54)		3,094
	Rentals and landing fees		2		1,112		132		(3)		1,243
	Depreciation and amortization		1		951		75		-		1,027
	Fuel		-		2,405		39		-		2,444
	Maintenance and repairs		-		1,014		48		-		1,062
	Intercompany charges, net		(111)		(225)		336		-		-
	Other		47		2,281		494		(87)		2,735
			-		16,777		2,958		(144)		19,591
OPERATING INCOME			-		1,231		286		-		1,517
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		961		151		-		(1,112)		-
	Interest, net		(39)		19		2		-		(18)
	Intercompany charges, net		42		(55)		13		-		-
	Other, net		(3)		(3)		8		-		2
INCOME BEFORE INCOME TAXES			961		1,343		309		(1,112)		1,501
	Provision for income taxes		-		417		123		-		540
NET INCOME		$	961	$	926	$	186	$	(1,112)	$	961
COMPREHENSIVE INCOME		$	1,017	$	910	$	115	$	(1,112)	$	930

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended November 30, 2012
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	(32)	$	1,652	$	167	$	(69)	$	1,718
INVESTING ACTIVITIES
	Capital expenditures		(3)		(1,716)		(169)		-		(1,888)
	Business acquisitions, net of cash acquired		-		-		(483)		-		(483)
	Proceeds from asset dispositions and other		-		22		(2)		-		20
CASH USED IN INVESTING ACTIVITIES			(3)		(1,694)		(654)		-		(2,351)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		(863)		891		(28)		-		-
	Payment on loan between subsidiaries		-		(430)		430		-		-
	Intercompany dividends		-		1		(1)		-		-
	Principal payments on debt		-		(417)		-		-		(417)
	Proceeds from debt issuance		991		-		-		-		991
	Proceeds from stock issuances		53		-		-		-		53
	Excess tax benefit on the exercise of stock options		6		-		-		-		6
	Dividends paid		(88)		-		-		-		(88)
	Purchase of treasury stock		(246)		-		-		-		(246)
	Other, net		(9)		(93)		93		-		(9)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			(156)		(48)		494		-		290
Effect of exchange rate changes on cash			-		1		16		-		17
Net (decrease) increase in cash and cash equivalents			(191)		(89)		23		(69)		(326)
Cash and cash equivalents at beginning of period			1,906		417		636		(116)		2,843
Cash and cash equivalents at end of period		$	1,715	$	328	$	659	$	(185)	$	2,517
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended November 30, 2011
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	135	$	1,814	$	248	$	(29)	$	2,168
INVESTING ACTIVITIES
	Capital expenditures		(1)		(2,161)		(55)		-		(2,217)
	Business acquisition, net of cash acquired		-		-		(114)		-		(114)
	Proceeds from asset dispositions and other		-		15		-		-		15
CASH USED IN INVESTING ACTIVITIES			(1)		(2,146)		(169)		-		(2,316)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		(481)		484		(3)		-		-
	Intercompany dividends		-		21		(21)		-		-
	Principal payments on debt		-		(18)		-		-		(18)
	Proceeds from stock issuances		32		-		-		-		32
	Excess tax benefit on the exercise of stock options		5		-		-		-		5
	Dividends paid		(82)		-		-		-		(82)
	Purchase of treasury stock		(197)		-		-		-		(197)
	Other, net		-		(16)		16		-		-
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			(723)		471		(8)		-		(260)
Effect of exchange rate changes on cash			-		(6)		(18)		-		(24)
Net (decrease) increase in cash and cash equivalents			(589)		133		53		(29)		(432)
Cash and cash equivalents at beginning of period			1,589		279		546		(86)		2,328
Cash and cash equivalents at end of period		$	1,000	$	412	$	599	$	(115)	$	1,896