Stock Analysis on Net
Stock Analysis on Net
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FedEx Corp. (NYSE:FDX)

This company was transferred to the archive: financial data is no longer updated!

Analysis of Income Taxes

Advanced level


Accounting Policy on Income Taxes

Deferred income taxes are provided for the tax effect of temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The liability method is used to account for income taxes, which requires deferred taxes to be recorded at the statutory rate expected to be in effect when the taxes are paid.

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credit carryforwards. FedEx evaluates the recoverability of these future tax deductions and credits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income rely heavily on estimates to make this determination and, thus, there is a risk that these estimates will have to be revised as new information is received. To the extent FedEx does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. FedEx believes FedEx will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets in the consolidated balance sheets that are not subject to valuation allowances.

FedEx recognizes liabilities for uncertain income tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires FedEx to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as FedEx must determine the probability of various possible outcomes. FedEx reevaluates these uncertain tax positions on a quarterly basis or when new information becomes available to management. These reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, successfully settled issues under audit and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an increase to the related provision.

FedEx classifies interest related to income tax liabilities as interest expense, and if applicable, penalties are recognized as a component of income tax expense. The income tax liabilities and accrued interest and penalties that are due within one year of the balance sheet date are presented as current liabilities. The noncurrent portion of FedEx’s income tax liabilities and accrued interest and penalties are recorded in the caption “Other liabilities” in the accompanying consolidated balance sheets.

Source: 10-K (filing date: 2019-07-16).


Income Tax Expense (Benefit)

FedEx Corp., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Federal (107) (540) 269  513  795  624 
State and local 64  43  88  72  102  56 
Domestic (43) (497) 357  585  897  680 
Foreign 243  461  285  200  214  194 
Current provision (benefit) 200  (36) 642  785  1,111  874 
Federal (61) 271  989  155  (474) 238 
State and local (7) 125  59  (18) (47) 62 
Domestic (68) 396  1,048  137  (521) 300 
Foreign (17) (579) (108) (2) (13) 18 
Deferred provision (benefit) (85) (183) 940  135  (534) 318 
Provision for income taxes 115  (219) 1,582  920  577  1,192 

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

Item Description The company
Current provision (benefit) Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. FedEx Corp.’s current provision (benefit) decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Deferred provision (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. FedEx Corp.’s deferred provision (benefit) decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.
Provision for income taxes Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. FedEx Corp.’s provision for income taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Effective Income Tax Rate (EITR)

FedEx Corp., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Statutory federal income tax rate 21.00% 29.20% 35.00% 35.00% 35.00% 35.00%
Effective tax rate, before TCJA 28.40% 26.10% 34.60% 33.60% 35.50% 36.30%
Effective tax rate 17.60% -5.00% 34.60% 33.60% 35.50% 36.30%

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

Item Description The company
Effective tax rate, before TCJA Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. FedEx Corp.’s effective tax rate, before TCJA decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

FedEx Corp., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Property, equipment, leases and intangibles 592  752  124  129  93  120 
Employee benefits 1,256  595  1,951  2,453  2,029  1,464 
Self-insurance accruals 585  494  745  681  607  555 
Other 510  416  692  528  477  292 
Net operating loss/credit carryforwards 1,139  1,146  1,069  925  326  333 
Deferred tax assets, gross 4,082  3,403  4,581  4,716  3,532  2,764 
Valuation allowances (590) (711) (738) (738) (224) (245)
Deferred tax assets 3,492  2,692  3,843  3,978  3,308  2,519 
Property, equipment, leases and intangibles (4,633) (3,663) (4,993) (4,767) (3,872) (3,730)
Employee benefits —  (31) —  —  (13) (11)
Other (340) (602) (660) (343) (414) (290)
Deferred tax liabilities (4,973) (4,296) (5,653) (5,110) (4,299) (4,031)
Net deferred tax assets (liabilities) (1,481) (1,604) (1,810) (1,132) (991) (1,512)

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

Item Description The company
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. FedEx Corp.’s deferred tax assets, gross decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. FedEx Corp.’s deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. FedEx Corp.’s net deferred tax assets (liabilities) increased from 2017 to 2018 and from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

FedEx Corp., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Current deferred tax assets —  —  —  —  606  522 
Noncurrent deferred tax assets (included in Other assets) 1,340  1,263  675  435  150  80 
Noncurrent deferred tax liabilities 2,821  2,867  2,485  1,567  1,747  2,114 

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

Item Description The company
Noncurrent deferred tax assets (included in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. FedEx Corp.’s noncurrent deferred tax assets (included in Other assets) increased from 2017 to 2018 and from 2018 to 2019.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. FedEx Corp.’s noncurrent deferred tax liabilities increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

FedEx Corp., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Adjustment to Current Assets
Current assets (as reported) 13,086  13,341  12,628  11,989  10,941  9,683 
Less: Current deferred tax assets, net —  —  —  —  606  522 
Current assets (adjusted) 13,086  13,341  12,628  11,989  10,335  9,161 
Adjustment to Total Assets
Total assets (as reported) 54,403  52,330  48,552  46,064  37,069  33,070 
Less: Current deferred tax assets, net —  —  —  —  606  522 
Less: Noncurrent deferred tax assets, net 1,340  1,263  675  435  150  80 
Total assets (adjusted) 53,063  51,067  47,877  45,629  36,313  32,468 
Adjustment to Total Liabilities
Total liabilities (as reported) 36,646  32,914  32,479  32,280  22,076  17,793 
Less: Noncurrent deferred tax liabilities, net 2,821  2,867  2,485  1,567  1,747  2,114 
Total liabilities (adjusted) 33,825  30,047  29,994  30,713  20,329  15,679 
Adjustment to Common Stockholders’ Investment
Common stockholders’ investment (as reported) 17,757  19,416  16,073  13,784  14,993  15,277 
Less: Net deferred tax assets (liabilities) (1,481) (1,604) (1,810) (1,132) (991) (1,512)
Common stockholders’ investment (adjusted) 19,238  21,020  17,883  14,916  15,984  16,789 
Adjustment to Net Income
Net income (as reported) 540  4,572  2,997  1,820  1,050  2,097 
Add: Deferred income tax expense (benefit) (85) (183) 940  135  (534) 318 
Net income (adjusted) 455  4,389  3,937  1,955  516  2,415 

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).


FedEx Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

FedEx Corp., adjusted financial ratios

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
Current Ratio
Reported current ratio 1.45 1.39 1.59 1.50 1.84 1.82
Adjusted current ratio 1.45 1.39 1.59 1.50 1.73 1.72
Net Profit Margin
Reported net profit margin 0.77% 6.99% 4.97% 3.61% 2.21% 4.60%
Adjusted net profit margin 0.65% 6.71% 6.53% 3.88% 1.09% 5.30%
Total Asset Turnover
Reported total asset turnover 1.28 1.25 1.24 1.09 1.28 1.38
Adjusted total asset turnover 1.31 1.28 1.26 1.10 1.31 1.40
Financial Leverage
Reported financial leverage 3.06 2.70 3.02 3.34 2.47 2.16
Adjusted financial leverage 2.76 2.43 2.68 3.06 2.27 1.93
Return on Equity (ROE)
Reported ROE 3.04% 23.55% 18.65% 13.20% 7.00% 13.73%
Adjusted ROE 2.37% 20.88% 22.02% 13.11% 3.23% 14.38%
Return on Assets (ROA)
Reported ROA 0.99% 8.74% 6.17% 3.95% 2.83% 6.34%
Adjusted ROA 0.86% 8.59% 8.22% 4.28% 1.42% 7.44%

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. FedEx Corp.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. FedEx Corp.’s adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
FedEx Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

FedEx Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Current assets 13,086  13,341  12,628  11,989  10,941  9,683 
Current liabilities 9,013  9,627  7,918  8,008  5,957  5,312 
Liquidity Ratio
Current ratio1 1.45 1.39 1.59 1.50 1.84 1.82
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 13,086  13,341  12,628  11,989  10,335  9,161 
Current liabilities 9,013  9,627  7,918  8,008  5,957  5,312 
Liquidity Ratio
Adjusted current ratio2 1.45 1.39 1.59 1.50 1.73 1.72

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 13,086 ÷ 9,013 = 1.45

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 13,086 ÷ 9,013 = 1.45

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. FedEx Corp.’s adjusted current ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 540  4,572  2,997  1,820  1,050  2,097 
Revenues 69,693  65,450  60,319  50,365  47,453  45,567 
Profitability Ratio
Net profit margin1 0.77% 6.99% 4.97% 3.61% 2.21% 4.60%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 455  4,389  3,937  1,955  516  2,415 
Revenues 69,693  65,450  60,319  50,365  47,453  45,567 
Profitability Ratio
Adjusted net profit margin2 0.65% 6.71% 6.53% 3.88% 1.09% 5.30%

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 Net profit margin = 100 × Net income ÷ Revenues
= 100 × 540 ÷ 69,693 = 0.77%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 455 ÷ 69,693 = 0.65%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. FedEx Corp.’s adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Revenues 69,693  65,450  60,319  50,365  47,453  45,567 
Total assets 54,403  52,330  48,552  46,064  37,069  33,070 
Activity Ratio
Total asset turnover1 1.28 1.25 1.24 1.09 1.28 1.38
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 69,693  65,450  60,319  50,365  47,453  45,567 
Adjusted total assets 53,063  51,067  47,877  45,629  36,313  32,468 
Activity Ratio
Adjusted total asset turnover2 1.31 1.28 1.26 1.10 1.31 1.40

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 69,693 ÷ 54,403 = 1.28

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 69,693 ÷ 53,063 = 1.31

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. FedEx Corp.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Total assets 54,403  52,330  48,552  46,064  37,069  33,070 
Common stockholders’ investment 17,757  19,416  16,073  13,784  14,993  15,277 
Solvency Ratio
Financial leverage1 3.06 2.70 3.02 3.34 2.47 2.16
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 53,063  51,067  47,877  45,629  36,313  32,468 
Adjusted common stockholders’ investment 19,238  21,020  17,883  14,916  15,984  16,789 
Solvency Ratio
Adjusted financial leverage2 2.76 2.43 2.68 3.06 2.27 1.93

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 Financial leverage = Total assets ÷ Common stockholders’ investment
= 54,403 ÷ 17,757 = 3.06

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted common stockholders’ investment
= 53,063 ÷ 19,238 = 2.76

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
FedEx Corp.’s adjusted financial leverage ratio decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 540  4,572  2,997  1,820  1,050  2,097 
Common stockholders’ investment 17,757  19,416  16,073  13,784  14,993  15,277 
Profitability Ratio
ROE1 3.04% 23.55% 18.65% 13.20% 7.00% 13.73%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 455  4,389  3,937  1,955  516  2,415 
Adjusted common stockholders’ investment 19,238  21,020  17,883  14,916  15,984  16,789 
Profitability Ratio
Adjusted ROE2 2.37% 20.88% 22.02% 13.11% 3.23% 14.38%

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 ROE = 100 × Net income ÷ Common stockholders’ investment
= 100 × 540 ÷ 17,757 = 3.04%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted common stockholders’ investment
= 100 × 455 ÷ 19,238 = 2.37%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. FedEx Corp.’s adjusted ROE deteriorated from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
May 31, 2019 May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014
As Reported
Selected Financial Data (US$ in millions)
Net income 540  4,572  2,997  1,820  1,050  2,097 
Total assets 54,403  52,330  48,552  46,064  37,069  33,070 
Profitability Ratio
ROA1 0.99% 8.74% 6.17% 3.95% 2.83% 6.34%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income 455  4,389  3,937  1,955  516  2,415 
Adjusted total assets 53,063  51,067  47,877  45,629  36,313  32,468 
Profitability Ratio
Adjusted ROA2 0.86% 8.59% 8.22% 4.28% 1.42% 7.44%

Based on: 10-K (filing date: 2019-07-16), 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 540 ÷ 54,403 = 0.99%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 455 ÷ 53,063 = 0.86%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. FedEx Corp.’s adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.