Condensed Consolidating Financial Statements

12 Months Ended

May 31, 2013

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

NOTE 21: 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 $2.75 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
May 31, 2013
						Guarantor		Non-guarantor
				Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	3,892	$	405	$	717	$	(97)	$	4,917
	Receivables, less allowances				-		3,989		1,084		(29)		5,044
	Spare parts, supplies, fuel, prepaid expenses
		and other, less allowances			45		681		54		-		780
	Deferred income taxes				-		518		15		-		533
			Total current assets		3,937		5,593		1,870		(126)		11,274
PROPERTY AND EQUIPMENT, AT COST					27		35,915		2,167		-		38,109
	Less accumulated depreciation and amortization				21		18,469		1,135		-		19,625
			Net property and equipment		6		17,446		1,032		-		18,484
INTERCOMPANY RECEIVABLE					-		439		1,203		(1,642)		-
GOODWILL					-		1,552		1,203		-		2,755
INVESTMENT IN SUBSIDIARIES					18,739		3,347		-		(22,086)		-
OTHER ASSETS					2,187		822		191		(2,146)		1,054
				$	24,869	$	29,199	$	5,499	$	(26,000)	$	33,567
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
	Current portion of long-term debt			$	250	$	1	$	-	$	-	$	251
	Accrued salaries and employee benefits				82		1,402		204		-		1,688
	Accounts payable				4		1,392		609		(126)		1,879
	Accrued expenses				355		1,366		211		-		1,932
		Total current liabilities			691		4,161		1,024		(126)		5,750
LONG-TERM DEBT, LESS CURRENT PORTION					2,489		250		-		-		2,739
INTERCOMPANY PAYABLE					1,642		-		-		(1,642)		-
OTHER LONG-TERM LIABILITIES
	Deferred income taxes				-		3,798		-		(2,146)		1,652
	Other liabilities				2,649		3,133		246		-		6,028
		Total other long-term liabilities			2,649		6,931		246		(2,146)		7,680
STOCKHOLDERS' INVESTMENT					17,398		17,857		4,229		(22,086)		17,398
				$	24,869	$	29,199	$	5,499	$	(26,000)	$	33,567

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
Year Ended May 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	37,073	$	7,543	$	(329)	$	44,287
OPERATING EXPENSES:
	Salaries and employee benefits		103		14,375		2,092		-		16,570
	Purchased transportation		-		4,839		2,574		(141)		7,272
	Rentals and landing fees		5		2,198		324		(6)		2,521
	Depreciation and amortization		1		2,200		185		-		2,386
	Fuel		-		4,650		96		-		4,746
	Maintenance and repairs		1		1,791		117		-		1,909
	Business realignment, impairment and other charges		21		639		-		-		660
	Intercompany charges, net		(227)		(329)		556		-		-
	Other		96		4,565		1,193		(182)		5,672
			-		34,928		7,137		(329)		41,736
OPERATING INCOME			-		2,145		406		-		2,551
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		1,561		253		-		(1,814)		-
	Interest, net		(108)		42		5		-		(61)
	Intercompany charges, net		113		(131)		18		-		-
	Other, net		(5)		(20)		(10)		-		(35)
INCOME BEFORE INCOME TAXES			1,561		2,289		419		(1,814)		2,455
	Provision for income taxes		-		710		184		-		894
NET INCOME		$	1,561	$	1,579	$	235	$	(1,814)	$	1,561
COMPREHENSIVE INCOME		$	2,622	$	1,618	$	268	$	(1,814)	$	2,694
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Year Ended May 31, 2012
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	36,412	$	6,569	$	(301)	$	42,680
OPERATING EXPENSES:
	Salaries and employee benefits		114		14,153		1,832		-		16,099
	Purchased transportation		-		4,509		1,944		(118)		6,335
	Rentals and landing fees		5		2,221		267		(6)		2,487
	Depreciation and amortization		1		1,962		150		-		2,113
	Fuel		-		4,877		79		-		4,956
	Maintenance and repairs		1		1,882		97		-		1,980
	Impairment and other charges		-		134		-		-		134
	Intercompany charges, net		(218)		(323)		541		-		-
	Other		97		4,482		988		(177)		5,390
			-		33,897		5,898		(301)		39,494
OPERATING INCOME			-		2,515		671		-		3,186
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		2,032		395		-		(2,427)		-
	Interest, net		(75)		31		5		-		(39)
	Intercompany charges, net		80		(102)		22		-		-
	Other, net		(5)		(10)		9		-		(6)
INCOME BEFORE INCOME TAXES			2,032		2,829		707		(2,427)		3,141
	Provision for income taxes		-		875		234		-		1,109
NET INCOME		$	2,032	$	1,954	$	473	$	(2,427)	$	2,032
COMPREHENSIVE (LOSS) INCOME		$	(120)	$	1,796	$	380	$	(2,427)	$	(371)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME
Year Ended May 31, 2011
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
REVENUES		$	-	$	33,124	$	6,498	$	(318)	$	39,304
OPERATING EXPENSES:
	Salaries and employee benefits		109		13,206		1,961		-		15,276
	Purchased transportation		-		4,034		1,745		(105)		5,674
	Rentals and landing fees		4		2,209		253		(4)		2,462
	Depreciation and amortization		1		1,784		188		-		1,973
	Fuel		-		4,003		148		-		4,151
	Maintenance and repairs		1		1,862		116		-		1,979
	Impairment and other charges		-		28		61		-		89
	Intercompany charges, net		(222)		(317)		539		-		-
	Other		107		4,392		1,032		(209)		5,322
			-		31,201		6,043		(318)		36,926
OPERATING INCOME			-		1,923		455		-		2,378
OTHER INCOME (EXPENSE):
	Equity in earnings of subsidiaries		1,452		200		-		(1,652)		-
	Interest, net		(88)		13		(2)		-		(77)
	Intercompany charges, net		104		(135)		31		-		-
	Other, net		(16)		(14)		(6)		-		(36)
INCOME BEFORE INCOME TAXES			1,452		1,987		478		(1,652)		2,265
	Provision for income taxes		-		677		136		-		813
NET INCOME		$	1,452	$	1,310	$	342	$	(1,652)	$	1,452
COMPREHENSIVE INCOME		$	1,240	$	1,329	$	425	$	(1,652)	$	1,342

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended May 31, 2013
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY OPERATING ACTIVITIES		$	247	$	3,936	$	486	$	19	$	4,688
INVESTING ACTIVITIES
	Capital expenditures		(3)		(3,029)		(343)		-		(3,375)
	Business acquisitions, net of cash acquired		-		-		(483)		-		(483)
	Proceeds from asset dispositions and other		-		49		6		-		55
CASH USED IN INVESTING ACTIVITIES			(3)		(2,980)		(820)		-		(3,803)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		141		(58)		(83)		-		-
	Payment on loan between subsidiaries		-		(385)		385		-		-
	Intercompany dividends		-		21		(21)		-		-
	Principal payments on debt		-		(417)		-		-		(417)
	Proceeds from debt issuances		1,739		-		-		-		1,739
	Proceeds from stock issuances		280		-		-		-		280
	Excess tax benefit on the exercise of stock options		23		-		-		-		23
	Dividends paid		(177)		-		-		-		(177)
	Purchase of treasury stock		(246)		-		-		-		(246)
	Other, net		(18)		(119)		119		-		(18)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			1,742		(958)		400		-		1,184
Effect of exchange rate changes on cash			-		(10)		15		-		5
Net increase (decrease) in cash and cash equivalents			1,986		(12)		81		19		2,074
Cash and cash equivalents at beginning of period			1,906		417		636		(116)		2,843
Cash and cash equivalents at end of period		$	3,892	$	405	$	717	$	(97)	$	4,917
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended May 31, 2012
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	(88)	$	4,383	$	570	$	(30)	$	4,835
INVESTING ACTIVITIES
	Capital expenditures		(5)		(3,792)		(210)		-		(4,007)
	Business acquisition, net of cash acquired		-		-		(116)		-		(116)
	Proceeds from asset dispositions and other		-		74		-		-		74
CASH USED IN INVESTING ACTIVITIES			(5)		(3,718)		(326)		-		(4,049)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		625		(550)		(75)		-		-
	Intercompany dividends		-		76		(76)		-		-
	Principal payments on debt		-		(29)		-		-		(29)
	Proceeds from stock issuances		128		-		-		-		128
	Excess tax benefit on the exercise of stock options		18		-		-		-		18
	Dividends paid		(164)		-		-		-		(164)
	Purchase of treasury stock		(197)						-		(197)
	Other, net		-		(19)		19		-		-
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			410		(522)		(132)		-		(244)
Effect of exchange rate changes on cash			-		(5)		(22)		-		(27)
Net increase (decrease) in cash and cash equivalents			317		138		90		(30)		515
Cash and cash equivalents at beginning of period			1,589		279		546		(86)		2,328
Cash and cash equivalents at end of period		$	1,906	$	417	$	636	$	(116)	$	2,843

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Year Ended May 31, 2011
				Guarantor		Non-guarantor
		Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		$	25	$	3,978	$	65	$	(27)	$	4,041
INVESTING ACTIVITIES
	Capital expenditures		(1)		(3,263)		(170)		-		(3,434)
	Business acquisition, net of cash acquired		-		(96)		-		-		(96)
	Proceeds from asset dispositions and other		-		110		1		-		111
CASH USED IN INVESTING ACTIVITIES			(1)		(3,249)		(169)		-		(3,419)
FINANCING ACTIVITIES
	Net transfers from (to) Parent		530		(994)		464		-		-
	Payment on loan between subsidiaries		-		235		(235)		-		-
	Intercompany dividends		-		61		(61)		-		-
	Principal payments on debt		(250)		(12)		-		-		(262)
	Proceeds from stock issuances		108		-		-		-		108
	Excess tax benefit on the exercise of stock options		23		-		-		-		23
	Dividends paid		(151)		-		-		-		(151)
	Other, net		(5)		(9)		9		-		(5)
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			255		(719)		177		-		(287)
Effect of exchange rate changes on cash			-		11		30		-		41
Net increase (decrease) in cash and cash equivalents			279		21		103		(27)		376
Cash and cash equivalents at beginning of period			1,310		258		443		(59)		1,952
Cash and cash equivalents at end of period		$	1,589	$	279	$	546	$	(86)	$	2,328