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Commitments
12 Months Ended
May 31, 2020
Commitments [Abstract]  
Commitments

NOTE 17: COMMITMENTS

Annual purchase commitments under various contracts as of May 31, 2020 were as follows (in millions):

 

 

 

Aircraft and

Aircraft Related

 

 

Other(1)

 

 

Total

 

2021

 

$

2,177

 

 

$

949

 

 

$

3,126

 

2022

 

 

2,772

 

 

 

590

 

 

 

3,362

 

2023

 

 

2,036

 

 

 

407

 

 

 

2,443

 

2024

 

 

697

 

 

 

263

 

 

 

960

 

2025

 

 

660

 

 

 

226

 

 

 

886

 

Thereafter

 

 

2,723

 

 

 

397

 

 

 

3,120

 

Total

 

$

11,065

 

 

$

2,832

 

 

$

13,897

 

(1)

Primarily equipment and advertising contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of May 31, 2020, our obligation to purchase one Boeing 767-300 Freighter (“B767F”) aircraft and six Boeing 777 Freighter (“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. 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 have several aircraft modernization programs underway that are supported by the purchase of B777F and B767F aircraft. These aircraft are significantly more fuel-efficient per unit than the aircraft types previously utilized, and these expenditures are necessary to achieve significant long-term operating savings and to replace older aircraft. Our ability to delay the timing of these aircraft-related expenditures is limited without incurring significant costs to modify existing purchase agreements.

As of May 31, 2020, we had $633 million in deposits and progress payments on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our accompanying consolidated balance sheets. Aircraft and aircraft-related contracts are subject to price escalations. The following table is a summary of the key aircraft we are committed to purchase as of May 31, 2020, with the year of expected delivery:

 

 

 

Cessna SkyCourier 408

 

 

ATR 72-600F

 

 

B767F

 

 

B777F

 

 

Total

 

2021

 

 

 

 

 

4

 

 

 

20

 

 

 

2

 

 

 

26

 

2022

 

 

9

 

 

 

7

 

 

 

18

 

 

 

5

 

 

 

39

 

2023

 

 

12

 

 

 

6

 

 

 

8

 

 

 

2

 

 

 

28

 

2024

 

 

12

 

 

 

6

 

 

 

 

 

 

4

 

 

 

22

 

2025

 

 

12

 

 

 

6

 

 

 

 

 

 

2

 

 

 

20

 

Thereafter

 

 

5

 

 

 

1

 

 

 

 

 

 

 

 

 

6

 

Total

 

 

50

 

 

 

30

 

 

 

46

 

 

 

15

 

 

 

141

 

 

During 2020, FedEx Express exercised options to purchase an additional six B767F aircraft for delivery in 2022. Additionally, FedEx Express executed two contract amendments rescheduling two B777F aircraft deliveries from 2023 to 2022 and two B767F aircraft deliveries from 2022 to 2023.

 

In the fourth quarter of 2020, we received notice from certain aircraft manufacturers (i) rescheduling four B767F aircraft deliveries from 2020 to 2021, as well as two B767F aircraft deliveries from 2021 to 2022, and (ii) rescheduling certain Cessna SkyCourier 408 and ATR 72-600F aircraft between 2021 and 2026.

 

On June 25, 2020, FedEx Express executed a contract amendment rescheduling B767F aircraft deliveries as follows: 2021 – 18 aircraft; 2022 – 11 aircraft; 2023 – 13 aircraft; and 2024 – 4 aircraft.