FEDEX CORP
For the period ended May 31, 2025. Filed Jul 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Jul 21, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 8. Financial Statements and Supplementary Data
MANAGEMENT’S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting includes, among other things, defined policies and procedures for conducting and governing our business, sophisticated information systems for processing transactions, and a properly staffed, professional internal audit department. Mechanisms are in place to monitor the effectiveness of our internal control over financial reporting and actions are taken to correct all identified deficiencies. Our procedures for financial reporting include the active involvement of senior management, our Audit and Finance Committee, and our staff of highly qualified financial and legal professionals.
Management, with the participation of our principal executive and financial officers, assessed our internal control over financial reporting as of May 31, 2025, the end of our fiscal year. Management based its assessment on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Based on this assessment, management has concluded that our internal control over financial reporting was effective as of May 31, 2025.
The effectiveness of our internal control over financial reporting as of May 31, 2025, has been audited by Ernst & Young LLP (PCAOB ID:42), the independent registered public accounting firm who also audited the Company’s consolidated financial statements included in this Annual Report on Form 10-K. Ernst & Young LLP’s report on the Company’s internal control over financial reporting is included in this Annual Report on Form 10-K.
-69-
Opinion on Internal Control Over Financial Reporting
We have audited FedEx Corporation’s internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, FedEx Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of May 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows and changes in common stockholders’ investment for each of the three years in the period ended May 31, 2025, and the related notes and our report dated July 21, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
-70-
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of FedEx Corporation (the Company) as of May 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows and changes in common stockholders’ investment for each of the three years in the period ended May 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at May 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended May 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated July 21, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| U.S. Pension Projected Benefit Obligation | |
| Description of the Matter | The Company sponsors defined benefit pension plans that provide retirement benefits to certain U.S. employees. At May 31, 2025, the Company’s aggregated projected benefit obligation for U.S. pension plans was $26.0 billion, which was less than the $26.6 billion fair value of U.S. pension plan assets, resulting in a funded status of $0.6 billion. As explained in Note 1 and Note 14 to the consolidated financial statements, the Company’s projected benefit obligation for the U.S. pension plans is measured using actuarial techniques that reflect management’s assumptions for discount rate and demographic experience, such as mortality and retirement ages.Auditing the projected benefit obligation of the U.S. pension plans was complex due to the highly judgmental nature and significant effect of the discount rate used in the measurement process. The discount rate has a significant effect on the projected benefit obligation and is developed by utilizing the yield on a theoretical portfolio of high-grade corporate bonds with cash flows that are designed to match expected benefit payments in future years. |
|---|
-71-
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s process for estimating the projected benefit obligation of the U.S. pension plans, including management’s review of the significant assumptions and assessment of the data inputs provided to the actuary.To test the projected benefit obligation of the U.S. pension plans, our audit procedures included, among others, evaluating the methodologies used, the significant actuarial assumptions described above, and the underlying data used by the Company. We compared the actuarial assumptions used by management to historical trends and evaluated the change in the projected benefit obligation of the U.S. pension plans from the prior year due to the change in service cost, interest cost, actuarial gains, and benefit payments. In addition, we involved our actuarial specialists to assist in evaluating management’s methodology for determining the discount rate. As part of this assessment, we compared management’s selected discount rate to an independently developed range of reasonable discount rates. Additionally, we compared the projected future cash flows of the U.S. pension plans to the prior year projections and compared the current year benefits paid to the prior year projected cash flows. We also tested the completeness and accuracy of the underlying data, including the participant data provided to management’s actuarial specialists. |
|---|---|
| Valuation of Self-Insurance Accruals | |
| Description of the Matter | At May 31, 2025, the Company’s self-insurance accruals reflected in the balance sheet were $5.9 billion. As explained in Note 1 to the consolidated financial statements, self-insurance accruals include costs associated with workers’ compensation claims, vehicle accidents, property and cargo loss, general business liabilities, and benefits paid under employee disability programs. These accrued liabilities are primarily based on the actuarially estimated cost of claims, including incurred-but-not-reported (IBNR) claims.Auditing the Company’s self-insurance accruals is complex due to the significant measurement uncertainty inherent to the estimate, the application of management judgment, and the use of various actuarial methods. In addition, the accruals are sensitive due to the volume of claims and the amount of time that can pass before the final cost is known. |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s process for estimating self-insurance accruals, including management’s review of actuarial estimates and assessment of data underlying the accruals.To evaluate the self-insurance accruals, our audit procedures included, among others, testing the completeness and accuracy of the underlying claims data used by the Company. We involved our actuarial specialists to assist in our evaluation of the methodologies applied by management in establishing the actuarially determined accrual and in reviewing the Company’s reinsurance contracts by policy year to assess the Company’s self-insured retentions, deductibles, and coverage limits. We compared the Company’s accrued amounts to a range developed by our actuarial specialists. Furthermore, we compared the Company’s historical estimates of expected incurred losses to actual losses experienced during the current year. |
We have served as the Company’s auditor since 2002.
-72-
CONSOLIDATED BALANCE SHEETS
| May 31, | ||
|---|---|---|
| 2025 | 2024 | |
| ASSETS | ||
| CURRENT ASSETS | ||
| Cash and cash equivalents | $5,502 | $6,501 |
| Receivables, less allowances of $773 and $775 | 11,368 | 10,087 |
| Spare parts, supplies, and fuel, less allowances of $308 and $288 | 602 | 614 |
| Prepaid expenses and other | 914 | 1,005 |
| Total current assets | 18,386 | 18,207 |
| PROPERTY AND EQUIPMENT, AT COST | ||
| Aircraft and related equipment | 31,584 | 30,525 |
| Package handling and ground support equipment | 18,878 | 17,880 |
| Information technology | 9,706 | 9,203 |
| Vehicles and trailers | 10,949 | 10,568 |
| Facilities and other | 16,505 | 16,215 |
| Total property and equipment, at cost | 87,622 | 84,391 |
| Less accumulated depreciation and amortization | 45,980 | 42,900 |
| Net property and equipment | 41,642 | 41,491 |
| OTHER LONG-TERM ASSETS | ||
| Operating lease right-of-use assets, net | 16,453 | 17,115 |
| Goodwill | 6,603 | 6,423 |
| Other assets | 4,543 | 3,771 |
| Total other long-term assets | 27,599 | 27,309 |
| TOTAL ASSETS | $87,627 | $87,007 |
-73-
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
| May 31, | ||
|---|---|---|
| 2025 | 2024 | |
| LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT | ||
| CURRENT LIABILITIES | ||
| Current portion of long-term debt | $1,428 | $68 |
| Accrued salaries and employee benefits | 2,731 | 2,673 |
| Accounts payable | 3,692 | 3,189 |
| Operating lease liabilities | 2,565 | 2,463 |
| Accrued expenses | 4,995 | 4,962 |
| Total current liabilities | 15,411 | 13,355 |
| LONG-TERM DEBT, LESS CURRENT PORTION | 19,151 | 20,135 |
| OTHER LONG-TERM LIABILITIES | ||
| Deferred income taxes | 4,205 | 4,482 |
| Pension, postretirement healthcare, and other benefit obligations | 1,698 | 2,010 |
| Self-insurance accruals | 4,033 | 3,701 |
| Operating lease liabilities | 14,272 | 15,053 |
| Other liabilities | 783 | 689 |
| Total other long-term liabilities | 24,991 | 25,935 |
| COMMITMENTS AND CONTINGENCIES | ||
| COMMON STOCKHOLDERS’ INVESTMENT | ||
| Common stock, $0.10 par value; 800 million shares authorized; 318 million shares issued as of May 31, 2025 and 2024 | 32 | 32 |
| Additional paid-in capital | 4,290 | 3,988 |
| Retained earnings | 41,402 | 38,649 |
| Accumulated other comprehensive loss | (1,362) | (1,359) |
| Treasury stock, at cost; 80 million shares as of May 31, 2025 and 72 million shares as of May 31, 2024 | (16,288) | (13,728) |
| Total common stockholders’ investment | 28,074 | 27,582 |
| TOTAL LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT | $87,627 | $87,007 |
-74-
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
| Years ended May 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| REVENUE | $87,926 | $87,693 | $90,155 |
| OPERATING EXPENSES: | |||
| Salaries and employee benefits | 31,232 | 30,961 | 31,019 |
| Purchased transportation | 21,768 | 20,921 | 21,790 |
| Rentals and landing fees | 4,647 | 4,571 | 4,738 |
| Depreciation and amortization | 4,264 | 4,287 | 4,176 |
| Fuel | 3,775 | 4,710 | 5,909 |
| Maintenance and repairs | 3,245 | 3,291 | 3,357 |
| Goodwill and other asset impairment charges | 21 | 157 | 117 |
| Business optimization and realignment costs | 756 | 582 | 309 |
| Other | 13,001 | 12,654 | 13,828 |
| TOTAL OPERATING EXPENSES | 82,709 | 82,134 | 85,243 |
| OPERATING INCOME | 5,217 | 5,559 | 4,912 |
| OTHER INCOME (EXPENSE): | |||
| Interest expense | (789) | (745) | (694) |
| Interest income | 363 | 370 | 198 |
| Other retirement plans income | 713 | 722 | 1,054 |
| Other, net | (63) | (70) | (107) |
| TOTAL OTHER INCOME (EXPENSE) | 224 | 277 | 451 |
| INCOME BEFORE INCOME TAXES | 5,441 | 5,836 | 5,363 |
| PROVISION FOR INCOME TAXES | 1,349 | 1,505 | 1,391 |
| NET INCOME | $4,092 | $4,331 | $3,972 |
| BASIC EARNINGS PER COMMON SHARE | $16.96 | $17.41 | $15.60 |
| DILUTED EARNINGS PER COMMON SHARE | $16.81 | $17.21 | $15.48 |
-75-
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Years ended May 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| NET INCOME | $4,092 | $4,331 | $3,972 |
| OTHER COMPREHENSIVE LOSS: | |||
| Foreign currency translation adjustments, net of tax benefits of $13 in 2025, $5 in 2024, and $25 in 2023 | 2 | (60) | (214) |
| Prior service credit arising during period, net of tax (expense) of $0 in 2025, ($11) in 2024, and $0 in 2023 | — | 36 | — |
| Amortization of prior service credits and other, net of tax benefit of $6 in 2025, $2 in 2024, and $2 in 2023 | (5) | (8) | (10) |
| TOTAL OTHER COMPREHENSIVE LOSS | (3) | (32) | (224) |
| COMPREHENSIVE INCOME | $4,089 | $4,299 | $3,748 |
-76-
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended May 31, | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| OPERATING ACTIVITIES | |||
| Net income | $4,092 | $4,331 | $3,972 |
| Adjustments to reconcile net income to cash provided by operating activities: | |||
| Depreciation and amortization | 4,264 | 4,287 | 4,176 |
| Provision for uncollectible accounts | 521 | 421 | 696 |
| Other noncash items including leases and deferred income taxes | 3,156 | 2,919 | 3,472 |
| Stock-based compensation | 154 | 163 | 182 |
| Retirement plans mark-to-market adjustments | (515) | (561) | (650) |
| Goodwill and other asset impairment charges | 21 | 157 | 117 |
| Business optimization and realignment costs, net of payments | 43 | 26 | 23 |
| Changes in assets and liabilities: | |||
| Receivables | (1,780) | (270) | 782 |
| Other current assets | 90 | (43) | 48 |
| Pension and postretirement healthcare assets and liabilities, net | (553) | (522) | (623) |
| Accounts payable and other liabilities | (2,445) | (2,553) | (3,331) |
| Other, net | (12) | (43) | (16) |
| Cash provided by operating activities | 7,036 | 8,312 | 8,848 |
| INVESTING ACTIVITIES | |||
| Capital expenditures | (4,055) | (5,176) | (6,174) |
| Purchase of investments | (262) | (176) | (84) |
| Proceeds from sale of investments | 110 | 38 | — |
| Proceeds from asset dispositions, and other investing activities, net | 115 | 114 | 84 |
| Cash used in investing activities | (4,092) | (5,200) | (6,174) |
| FINANCING ACTIVITIES | |||
| Principal payments on debt | (157) | (147) | (152) |
| Proceeds from stock issuances | 524 | 491 | 231 |
| Dividends paid | (1,339) | (1,259) | (1,177) |
| Purchase of common stock | (3,017) | (2,500) | (1,500) |
| Other, net | (30) | (11) | 1 |
| Cash used in financing activities | (4,019) | (3,426) | (2,597) |
| Effect of exchange rate changes on cash | 76 | (41) | (118) |
| Net decrease in cash and cash equivalents | (999) | (355) | (41) |
| Cash and cash equivalents at beginning of period | 6,501 | 6,856 | 6,897 |
| Cash and cash equivalents at end of period | $5,502 | $6,501 | $6,856 |
-77-
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCKHOLDERS’ INVESTMENT
(IN MILLIONS, EXCEPT SHARE DATA)
| CommonStock | AdditionalPaid-inCapital | RetainedEarnings | AccumulatedOtherComprehensiveLoss | TreasuryStock | Total | |
|---|---|---|---|---|---|---|
| Balance at May 31, 2022 | $32 | $3,712 | $32,782 | $(1,103) | $(10,484) | $24,939 |
| Net income | — | — | 3,972 | — | — | 3,972 |
| Other comprehensive loss, net of tax of $27 | — | — | — | (224) | — | (224) |
| Purchases of common stock (9.2 million shares) | — | (82) | — | — | (1,418) | (1,500) |
| Cash dividends declared ($5.86 per share) | — | — | (1,495) | — | — | (1,495) |
| Employee incentive plans and other (1.9 million shares issued) | — | 139 | — | — | 257 | 396 |
| Balance at May 31, 2023 | 32 | 3,769 | 35,259 | (1,327) | (11,645) | 26,088 |
| Net income | — | — | 4,331 | — | — | 4,331 |
| Other comprehensive loss, net of tax of $4 | — | — | — | (32) | — | (32) |
| Purchases of common stock (9.8 million shares) | — | (22) | — | — | (2,495) | (2,517) |
| Cash dividends declared ($3.78 per share) | — | — | (941) | — | — | (941) |
| Employee incentive plans and other (3.1 million shares issued) | — | 241 | — | — | 412 | 653 |
| Balance at May 31, 2024 | 32 | 3,988 | 38,649 | (1,359) | (13,728) | 27,582 |
| Net income | — | — | 4,092 | — | — | 4,092 |
| Other comprehensive loss, net of tax of $19 | — | — | — | (3) | — | (3) |
| Purchases of common stock (10.9 million shares) | — | (21) | — | — | (2,999) | (3,020) |
| Issuance of treasury stock for acquisition | — | 42 | — | — | 48 | 90 |
| Cash dividends declared ($5.52 per share) | — | — | (1,339) | — | — | (1,339) |
| Employee incentive plans and other (2.9 million shares issued) | — | 281 | — | — | 391 | 672 |
| Balance at May 31, 2025 | $32 | $4,290 | $41,402 | $(1,362) | $(16,288) | $28,074 |
-78-
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.