Analysis of Debt
Total Debt (Carrying Amount)
FedEx Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
The debt profile exhibits a period of relative stability from 2021 through 2024, followed by a significant expansion in total obligations and a structural shift in maturity schedules starting in 2025.
- Total Long-Term Debt Trends
- Total long-term debt remained consistent between May 2021 and May 2025, fluctuating within a narrow range between 20.2 billion and 20.9 billion US dollars. However, a substantial increase is recorded for May 2026, where total long-term debt rises to 25.7 billion US dollars, representing a significant expansion of the overall debt carrying amount.
- Current Maturities and Short-Term Obligations
- The current portion of long-term debt showed minimal volatility between 2021 and 2024, consistently remaining below 150 million US dollars. A sharp escalation occurred in May 2025, with the current portion rising to 1.4 billion US dollars, and further increasing to 1.7 billion US dollars by May 2026. This indicates a significant increase in immediate repayment obligations.
- Analysis of Borrowing Structure
- Long-term debt, excluding current maturities, remained stable until May 2025, followed by a sharp increase to 23.3 billion US dollars in May 2026. The emergence of 745 million US dollars in short-term borrowings in May 2026, coupled with the rise in long-term debt, suggests a marked increase in total leverage and a change in the company's financing requirements toward the end of the observed period.
Total Debt (Fair Value)
| May 31, 2026 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Long-term debt, including current maturities and exclusive of finance leases | 20,900) |
| Finance lease obligations | 1,514) |
| Total long-term debt, including current maturities (fair value) | 22,414) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.87 |
Based on: 10-K (reporting date: 2026-05-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on long-term debt: 3.80%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 3.80% | 24,969) | 949) | |
| Total | 24,969) | 949) | |
| 3.80% | |||
Based on: 10-K (reporting date: 2026-05-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 949 ÷ 24,969 = 3.80%
Interest Costs Incurred
FedEx Corp., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
An analysis of the interest costs incurred between May 31, 2021, and May 31, 2026, reveals a period of initial decline followed by a consistent upward trajectory, culminating in a significant increase in the final reported period.
- Total Interest Costs Incurred
- Total interest costs experienced a reduction of approximately 12.8% between 2021 and 2022, falling from 861 million to 751 million. From 2022 onward, a steady growth pattern emerged, with costs rising to 844 million by 2025. A substantial acceleration is observed in the final year, where costs surged to 1,022 million, representing a 21% increase over the previous year and the highest level within the analyzed period.
- Interest Expense Trends
- Interest expense followed a similar trajectory to total costs, dipping from 793 million in 2021 to a low of 689 million in 2022. Subsequently, a consistent year-over-year increase was recorded, moving from 694 million in 2023 to 789 million in 2025. This trend peaked sharply in 2026 with an increase to 970 million, indicating heightened borrowing costs or an expansion of the debt profile.
- Capitalized Interest Dynamics
- Capitalized interest remained relatively stable between 2021 and 2022 before increasing to a peak of 81 million in 2024. However, a downward trend is evident in the final two years, with values decreasing to 55 million in 2025 and 52 million in 2026. This decline suggests a reduction in the volume of qualifying capital projects during the latter part of the period.
- Cost Composition and Allocation
- The proportion of total interest costs attributed to capitalization has diminished over time. While capitalized interest contributed approximately 7.9% of total costs in 2021, this contribution fell to approximately 5.1% by 2026. This shift indicates that a larger share of the total interest burden is being recognized immediately as an expense rather than being deferred through capitalization.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
2026 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 6,763 ÷ 970 = 6.97
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 6,763 ÷ 1,022 = 6.62
An analysis of interest coverage metrics reveals a general downward trend in the capacity to service debt obligations over the six-year period. While the ratios remain well above critical thresholds, there is a noticeable contraction in the margin of safety, particularly in the final years of the observed timeframe.
- Adjusted Interest Coverage Ratio Analysis
- The adjusted interest coverage ratio, which accounts for capitalized interest, experienced an initial decline from 8.67 in May 2021 to 7.44 in May 2022. A period of moderate recovery followed, with the ratio increasing to 7.86 in 2023 and reaching 7.97 in 2024. However, a subsequent and more pronounced decline is observed, with the ratio falling to 7.38 in 2025 and reaching a period low of 6.62 by May 2026. This trajectory indicates a progressive tightening of the relationship between operating earnings and total interest obligations.
- Comparative Metric Evaluation
- A consistent variance is observed between the interest coverage ratio without capitalized interest and the adjusted ratio. The adjusted ratio is lower across all reported periods, confirming that the inclusion of capitalized interest reduces the perceived coverage strength. The parallel movement of both ratios suggests that the underlying drivers of the trend—likely a combination of fluctuating operating income and shifting interest expenses—affect both measures similarly.
- Solvency and Financial Flexibility
- The movement toward a lower coverage ratio by May 2026 suggests a diminishing buffer to absorb potential shocks in operating performance or increases in borrowing costs. Despite the overall decline, an adjusted ratio of 6.62 indicates that earnings remain sufficient to cover interest expenses multiple times over, although the trend reflects a reduction in overall financial flexibility compared to the 2021 baseline.